Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to _________ Commission file number 001-39982 ___________________________________ ENERGY VAULT HOLDINGS, INC. ____________________ ...

Clinical Trials and Efficacy - The pivotal trials Launch-HTN and Advance-HTN demonstrated statistically significant and clinically meaningful efficacy for lorundrostat in treating uncontrolled hypertension, with a placebo-adjusted systolic BP reduction of -9.1 mmHg at week 6 and -11.7 mmHg at week 12 for the Launch-HTN trial [99][100]. - The Launch-HTN trial enrolled 1,083 participants, with 63% having a BMI ≥30 kg/m² and 29% identifying as Black or African American, reflecting a diverse patient population [100]. - The Advance-HTN trial involved 285 participants, achieving a placebo-adjusted reduction of -7.9 mmHg in systolic BP at week 12, with 66% of subjects having a BMI ≥30 kg/m² [102]. - The company is exploring lorundrostat's potential in treating hypertension associated with chronic kidney disease (CKD) and obstructive sleep apnea (OSA), addressing multiple cardiorenal metabolic disorders [92][97]. - The FDA cleared the investigational new drug application for the Explore-OSA trial, which will evaluate lorundrostat's effects on overweight and obese subjects with moderate-to-severe OSA and hypertension [98]. - Safety data from the Launch-HTN trial indicated a low incidence of treatment-emergent serious adverse events (SAEs) at 2.2% for the 50 mg arm, supporting a favorable benefit-risk profile [104]. - The ongoing Transform-HTN trial allows subjects to continue receiving lorundrostat, generating additional long-term safety and efficacy data [92]. - The company plans to present the results of the Launch-HTN trial at the 2025 European Society of Hypertension Meeting, emphasizing its commitment to sharing clinical findings with the medical community [93]. Financial Performance and Projections - As of March 31, 2025, the company had cash, cash equivalents, and investments totaling $343.0 million [107]. - The net losses for the three months ended March 31, 2025, and 2024 were $42.2 million and $31.5 million, respectively, with an accumulated deficit of $344.7 million as of March 31, 2025 [108]. - The company has no products approved for sale and does not expect to generate revenue until lorundrostat is developed and approved [109]. - The company expects to significantly increase research and development expenses as it continues the development of lorundrostat [120]. - The company anticipates increased general and administrative expenses to support its research and development and commercialization efforts [121]. - Research and development expenses increased by $7.1 million to $37.9 million for the three months ended March 31, 2025, compared to $30.8 million in the same period of 2024 [126][127]. - General and administrative expenses rose by $2.0 million to $6.6 million for the three months ended March 31, 2025, compared to $4.6 million in the same period of 2024 [128]. - Net loss increased by $10.7 million to $42.2 million for the three months ended March 31, 2025, compared to a net loss of $31.5 million in the same period of 2024 [126]. - Net cash used in operating activities was $45.5 million for the three months ended March 31, 2025, compared to $19.1 million in the same period of 2024, reflecting an increase of $26.3 million [138]. - Net cash used in investing activities was $92.9 million for the three months ended March 31, 2025, compared to $56.0 million in the same period of 2024, an increase of $36.9 million [139]. - Net cash provided by financing activities increased to $189.3 million for the three months ended March 31, 2025, compared to $116.2 million in the same period of 2024 [140]. - The company raised approximately $700.0 million from various equity offerings since inception, including $188.7 million from a March 2025 stock sale [107][112]. - Future capital requirements will depend on various factors, including the progress of clinical trials and regulatory approvals for lorundrostat [134]. - The company anticipates continuing to incur net losses and negative cash flows from operations for the foreseeable future [130]. Obligations and Agreements - The company is obligated to pay Mitsubishi Tanabe up to $155.0 million in commercial milestone payments upon first commercial sale and meeting certain sales targets [110]. - The company entered into an ATM Equity Offering Sales Agreement with a potential offering price of up to $100 million [113]. - The company plans to use net proceeds from the private placement to fund research and development of lorundrostat and for working capital [115]. - The company has incurred no development or commercial expenses under the Mitsubishi License during the three months ended March 31, 2025, and 2024 [110]. Economic and Market Conditions - The company is exposed to interest income sensitivity due to changes in U.S. interest rates, but a hypothetical 10% change would not materially affect operations [149]. - The company contracts with vendors outside the U.S., exposing it to foreign currency exchange rate fluctuations, though these have not been significant to date [150]. - A hypothetical 10% change in foreign exchange rates would not materially impact the company's results of operations [150]. - Inflation has increased costs related to labor and research and development contracts, but has not materially impacted financial results to date [151]. - Future inflationary costs may adversely affect the company's business, financial condition, and results of operations [151]. Market Need - Approximately 120 million patients in the U.S. suffer from hypertension, with over 30 million not achieving their BP goals despite treatment, highlighting a significant unmet medical need [90]. - The company anticipates a pre-new drug application (NDA) meeting with the FDA in Q4 2025 for lorundrostat, targeting treatment for uncontrolled and resistant hypertension [91].

Financial Performance - Revenues for the three months ended March 31, 2025, were $10,258, compared to $0 in the same period of 2024, indicating a significant increase[17]. - Gross profit for Q1 2025 was $673, resulting in a gross margin of approximately 6.56%[17]. - Operating loss for the first quarter of 2025 was $3.57 million, an improvement from a loss of $5.49 million in Q1 2024[17]. - Net loss from continuing operations for Q1 2025 was $3.06 million, compared to a loss of $6.63 million in the same quarter of the previous year, showing a reduction of approximately 53.91%[17]. - For the three months ended March 31, 2025, the net loss from continuing operations was $3,063,997, a decrease of 54% compared to a net loss of $6,633,422 for the same period in 2024[1]. - The company incurred a net loss from operations of $3,063,997, a 54% improvement compared to a net loss of $6,633,422 in the same period in 2024[194]. - Net (loss) income for the three months ended March 31, 2025, was $(3,063,997), a decrease of 114% compared to net income of $21,246,033 in the same period in 2024[185]. Assets and Liabilities - Total assets increased to $106.36 million as of March 31, 2025, compared to $104.85 million at the end of 2024, reflecting a growth of approximately 1.44%[13]. - Total current liabilities decreased to $7.46 million as of March 31, 2025, from $7.91 million at the end of 2024, a decline of about 5.67%[13]. - Cash balance increased significantly to $2.05 million as of March 31, 2025, compared to $308,096 at the end of 2024, representing a growth of over 564%[13]. - The company reported an accumulated deficit of $42.10 million as of March 31, 2025, compared to $39.04 million at the end of 2024[15]. - Total stockholders' equity increased to $81.16 million as of March 31, 2025, from $79.07 million at the end of 2024, reflecting a growth of approximately 2.66%[15]. Cash Flow - Net cash used in operating activities from continuing operations was $2,956,457, significantly reduced from $9,659,231 in the prior year[1]. - The company reported a net cash provided by investing activities of $27,432,589, primarily due to proceeds from discontinued operations[1]. - Cash used in operating activities for the three months ended March 31, 2025, was $2,956,457, a decrease of 71% compared to $10,189,673 for the same period in 2024[181]. Strategic Transactions - The company plans to divest its membership interests in Integra Pharma Solutions, LLC and Bonum Health, Inc. to Tollo Health, Inc. for a total consideration of $5 million[28][31]. - The divestitures are part of a strategic realignment aimed at optimizing the company's portfolio and accelerating growth in the Branded and Specialty Pharma markets[32]. - The company anticipates using proceeds from the divestment to support high-growth commercial and strategic product development activities at Scienture, LLC[32]. - The company entered into a Membership Interest Purchase Agreement with Tollo Health, Inc. to sell all membership interests in IPS for $5 million, payable via a promissory note[153]. - Tollo has agreed to pay the company $5 million for acquiring IPS and Bonum, with a promissory note maturing on June 30, 2030[168]. Research and Development - Scienture, LLC is engaged in the research and development of branded pharmaceutical products, with a focus on addressing unmet medical needs[27]. - The Company identified product technology assets related to potential treatments for hypertension, migraine, pain, and thrombosis, which are in various phases of development[53]. - Management expects SCN-102 to achieve regulatory approval in mid-2025, with commercialization projected to begin in late 2025[93]. Debt and Financing - The company needs to raise additional capital or secure debt funding to support ongoing operations, which may not be available on favorable terms, raising substantial doubt about its ability to continue as a going concern[68]. - The company entered into a Securities Purchase Agreement to issue convertible debentures with a principal amount of up to $12,222,222, with the first tranche of $3,333,333 completed on November 25, 2024[94][95]. - The outstanding balance of the Arena debentures, net of unamortized debt discount, was $1,092,461 as of March 31, 2025[101]. - The company accrued $84,167 in interest expense related to the Arena debentures during the three months ended March 31, 2025[99]. - The NVK debt of $2,000,000, which accrues interest at 15.50%, is collateralized by the company's receivables and intellectual property[107]. Stock and Equity - The company issued 240,000 common shares for services and 2.8 million shares for cash pursuant to an equity line of commitment during the first quarter of 2025[19]. - The company recognized a net increase to additional paid-in capital of $2,691,467 from the issuance of 2,800,000 shares of common stock for gross proceeds of $4,597,999 under the ELOC Agreement[127]. - The company authorized the issuance of up to 9,211,246 shares of Series X Preferred Stock, replacing the revoked Series A Preferred Stock[113]. - In connection with the Scienture Merger, 291,536 shares of common stock and 6,826,753 shares of Series X Preferred Stock were issued[115]. Expenses - Operating expenses totaled $3,571,990, a decrease of 35% from $5,492,971 in the comparable period in 2024[185]. - Wage and salary expenses increased by 213% to $696,068, attributed to executive salary increases and the Scienture Merger[188]. - Professional fees rose by 130% to $412,850, mainly due to post-acquisition expenses related to Scienture[189]. - General and administrative expenses decreased by 71% to $1,355,948, primarily due to a reduction in the fair value of shares issued for services[191]. - Interest expense increased significantly to $670,784 from $98,515, driven by interest on Scienture's convertible debt[192]. Goodwill and Intangible Assets - The Company acquired intangible assets valued at $76,400,000 and recognized goodwill of $21,372,960 from the Scienture acquisition[48]. - As of March 31, 2025, no impairment of goodwill was recognized, indicating that the fair value of reporting units exceeded their carrying values[52]. - The Company did not record any impairment charge for the three months ended March 31, 2025 and 2024[56]. - Goodwill is tested annually for impairment and is not amortized, with management regularly reviewing operating results[49]. - The product technology assets will be amortized over their expected remaining life of 15-20 years once placed in service[54].

Financial Performance - Revenues for the three months ended March 31, 2025, were $10,258, compared to $0 for the same period in 2024, indicating a significant increase[17]. - Gross profit for Q1 2025 was $673, resulting in a gross margin of approximately 6.57%[17]. - Operating expenses decreased to $3.57 million in Q1 2025 from $5.49 million in Q1 2024, a reduction of about 35%[17]. - Net loss from continuing operations for Q1 2025 was $3.06 million, an improvement compared to a net loss of $6.63 million in Q1 2024[17]. - The company reported a net loss per common share from continuing operations of $0.33 for Q1 2025, compared to a loss of $6.40 per share in Q1 2024[17]. - The company incurred a net loss from operations of $3,063,997, a 54% improvement compared to a net loss of $6,633,422 in the same period in 2024[194]. Assets and Liabilities - Total assets increased to $106.36 million as of March 31, 2025, compared to $104.85 million at December 31, 2024, reflecting a growth of approximately 1.44%[13]. - Total liabilities decreased to $25.20 million as of March 31, 2025, from $25.78 million at December 31, 2024, a decline of approximately 2.25%[15]. - Stockholders' equity increased to $81.16 million as of March 31, 2025, compared to $79.07 million at December 31, 2024, reflecting a growth of about 2.65%[15]. - As of March 31, 2025, the Company had an accumulated deficit of $42,102,970 and $2,049,638 in cash[67]. - Current liabilities decreased by 6% to $7,461,666 as of March 31, 2025, from $7,906,893 as of December 31, 2024[172]. Cash Flow - Cash and cash equivalents increased significantly to $2.05 million as of March 31, 2025, from $0.31 million at December 31, 2024[13]. - Net cash used in operating activities from continuing operations was $2,956,457, significantly reduced from $9,659,231 in the prior year[1]. - Cash provided by investing activities was $0 for the three months ended March 31, 2025, compared to $27,432,589 for the same period in 2024[182]. - Cash used in operating activities for the three months ended March 31, 2025, was $2,956,457, a decrease of 69% compared to $10,189,673 for the same period in 2024[181]. Strategic Initiatives - The company plans to divest its membership interests in Integra Pharma Solutions, LLC, and Bonum Health, Inc. to Tollo Health, Inc. for $5 million in a promissory note[28]. - The divestitures are part of a strategic realignment aimed at optimizing the company's portfolio and accelerating growth in the Branded and Specialty Pharma markets[32]. - The company anticipates using proceeds from divestitures to support high-growth commercial and strategic product development activities at Scienture, LLC[32]. Research and Development - The company has ongoing research and development expenses amounting to $574,679 for Q1 2025, indicating continued investment in innovation[17]. - Scienture, LLC is engaged in the research and development of branded pharmaceutical products, with a focus on addressing unmet medical needs[27]. - Management expects SCN-102 to achieve regulatory approval in mid-2025, with commercialization projected to begin in late 2025[93]. Debt and Financing - The company issued convertible debentures totaling $3,333,333, with an original issue discount of 10%, and recognized a debt discount of $3,333,333[94][100]. - As of March 31, 2025, the total debt of the company is $5,333,333, net of unamortized debt discount of $2,240,872, resulting in a net debt of $3,092,462[111]. - The company entered into a loan agreement with NVK Finance for $2,000,000, with an interest rate of 15.50% as of March 31, 2025[107]. Acquisitions - The Company acquired Scienture, Inc. for a total purchase consideration of $78,646,184, with goodwill recognized primarily for expected economic benefits[70]. - The preliminary purchase price allocation for the Scienture acquisition includes $21,372,960 in goodwill and $76,400,000 in intangible assets related to product technologies[72]. - The Company recorded goodwill of $21,372,960 and intangible assets valued at $76,400,000 in connection with the Scienture Merger on July 25, 2024[90]. Operational Metrics - The company reported total operating lease expenses of $36,402 for Q1 2025, compared to $12,840 in Q1 2024, reflecting a significant increase[144]. - The company has future lease obligations totaling $241,392, with a present value of future minimum lease payments at $204,762[144]. - The weighted-average remaining lease term is 3.23 years, with a discount rate of 10.90%[144].

Revenue Performance - Revenue for the three months ended March 31, 2025, was $589,000, a decrease of $367,000 or 38.4% compared to $956,000 in the same period of 2024[112]. - Revenue for Q1 2025 was $589,000, a decrease of 38.4% from $956,000 in Q1 2024, primarily due to reduced shipments of MOVIA L sensors[112][113]. Cost of Revenue - Cost of revenue for the three months ended March 31, 2025, was $550,000, representing 93.4% of revenue, down from $1,277,000 or 133.6% of revenue in 2024, a decrease of $727,000 or 56.9%[114]. - Cost of revenue decreased to $550,000 in Q1 2025, representing 93.4% of revenue, compared to $1.277 million or 133.6% of revenue in Q1 2024, attributed to decreased revenue and revenue mix[114][115]. Expenses - Research and development expenses for the three months ended March 31, 2025, were $7,403,000, a decrease of $9,908,000 or 57.2% compared to $17,311,000 in 2024[116]. - Research and development expenses dropped to $7.403 million in Q1 2025, a 57.2% decrease from $17.311 million in Q1 2024, mainly due to lower salary and benefits expenses[116][118]. - Sales, marketing, general and administrative expenses for the three months ended March 31, 2025, were $6,676,000, a decrease of $2,402,000 or 26.5% from $9,078,000 in 2024[119]. - Sales, marketing, general and administrative expenses were $6.676 million in Q1 2025, down 26.5% from $9.078 million in Q1 2024, primarily due to reduced salary and benefits expenses[119][120]. Interest Expense - Interest expense for the three months ended March 31, 2025, was $(12,903,000), an increase of $12,885,000 or 71,583.3% compared to $(18,000) in 2024[121]. - Interest expense increased significantly to $(12.903) million in Q1 2025 from $(18) in Q1 2024, largely due to non-cash interest expenses related to warrants and notes payable[121]. Cash and Investments - As of March 31, 2025, the company had $51.9 million in cash and cash equivalents and $17.1 million in short-term investment securities[125]. - The company has approximately $113.4 million available under its existing $150.0 million ATM facility, which was established in the first quarter of 2024[125]. - As of March 31, 2025, the company reported an unrealized gain on derivative liability of $842,000 due to a decrease in the fair value of the derivative liability[122]. - The unrealized gain on warrant liability was $1,761,000 as of March 31, 2025, reflecting a decrease in the fair value of the warrant liability[123]. - The company recognized a realized loss on debt extinguishment of $4,654,000 during the three months ended March 31, 2025[124]. - Cash used in operating activities decreased to $14.1 million in Q1 2025 from $20.8 million in Q1 2024, primarily due to reduced operating expenses related to personnel[126]. - Net cash provided by investing activities was $3.1 million in Q1 2025, compared to a net cash used of $3.3 million in Q1 2024, with short-term investment securities purchased totaling $10.3 million and sold totaling $13.5 million[127]. - Cash provided by financing activities totaled $8.2 million in Q1 2025, down from $21.0 million in Q1 2024, with net proceeds from the issuance of common stock and warrants being $8.2 million in Q1 2025[128]. - The company has a remaining commitment of $30.0 million under its convertible note facility, subject to certain limitations[125]. Future Expectations - The company expects to continue incurring significant losses in the near term, having funded operations primarily through equity and convertible debt[110]. - The company expects to make minimum payments of approximately $2.6 million to its contract manufacturing partner for MOVIA sensor inventory production during 2025 and 2026[126]. - The company restructured its workforce in 2024, resulting in a 41% reduction, which added approximately $6.0 million to fiscal year 2024 expenses but is expected to extend its financial runway[107]. - In February 2025, the company entered into a securities purchase agreement for 5,750,225 shares of common stock and warrants, receiving net proceeds of $7.8 million[129].

Revenue and Premiums - Total revenues for the title insurance segment accounted for 90.4% of the Company's revenues for the three-month period ended March 31, 2025[84]. - Net premiums written increased 15.3% for the three-month period ended March 31, 2025, reaching $46.3 million compared to $40.2 million for the same prior year period[107]. - Agency net premiums written increased 22.2% for the three-month period ended March 31, 2025, primarily due to higher activity levels across key markets[110]. - Total revenues for the three-month period ended March 31, 2025, were $56.6 million, compared to $53.5 million for the same period in 2024[104]. - Net premiums written for the three-month period ended March 31, 2025, increased to $46,345 thousand, up from $40,180 thousand in the same period of 2024, representing a growth of 15.4%[111]. - Revenue from non-title services increased to $4.6 million for the three-month period ended March 31, 2025, up from $4.3 million in the same prior year period, reflecting a growth of 7.0%[113]. Income and Expenses - Net income for the three-month period ended March 31, 2025, was $3.2 million, down from $4.5 million in the same prior year period[104]. - The Company's operating expenses for the three-month period ended March 31, 2025, totaled $52.5 million, compared to $47.7 million for the same period in 2024[104]. - Operating expenses increased by 10.2% for the three-month period ended March 31, 2025, totaling $52,512 thousand, compared to $47,662 thousand in the same prior year period[128]. - Interest and dividends income decreased to $2.3 million for the three-month period ended March 31, 2025, from $2.5 million in the same prior year period[104]. - Interest and dividends decreased to $2.3 million for the three-month period ended March 31, 2025, down from $2.5 million in the same prior year period, a decline of 8.0%[118]. Claims and Reserves - The provision for claims decreased by 64.5% for the three-month period ended March 31, 2025, with claims totaling $386 thousand compared to $741 thousand in the same prior year period[135]. - The total reserve for claims as of March 31, 2025, was $37.0 million, with approximately $2.5 million reserved for specific claims[137]. - The Company had a claims reserve totaling $37.0 million as of March 31, 2025, with potential variability in future payments due to economic conditions[157]. Cash and Investments - Net cash used in operating activities was $(75) thousand for Q1 2025, compared to $1.4 million for Q1 2024[146]. - As of March 31, 2025, the Company held cash and cash equivalents of $27.6 million, short-term investments of $54.1 million, and available-for-sale fixed maturity securities of $118.3 million[148]. - The net effect of all activities on total cash and cash equivalents was an increase of $2.9 million in 2025[148]. - Like-kind exchange deposits held by the Company totaled approximately $362.1 million as of March 31, 2025, up from $323.5 million at the end of 2024[162]. Strategic Initiatives - The company is evaluating nonorganic growth opportunities, including mergers and acquisitions, as part of its ongoing business strategy[142]. - The Company anticipates making further stock repurchases under its plan, having purchased no shares in Q1 2025 and 6,763 shares in Q1 2024[155]. - The Company’s capital resources are influenced by state regulations and the need to maintain superior financial ratings[149]. - The Company’s title insurance subsidiaries met the minimum capital, surplus, and reserve requirements for their respective states as of March 31, 2025[151]. Market Conditions - The average 30-year fixed mortgage interest rates were 6.8% for the three-month period ended March 31, 2025, compared to 6.7% for the same period in 2024[101]. - The Mortgage Bankers Association projects a 16.7% net increase in total mortgage originations to $2,076 billion in 2025 from 2024 levels[101]. - The Company's profitability is influenced by the overall level of residential and commercial real estate activity, which is cyclical and affected by various economic factors[91]. Financial Instruments and Risk Management - The Company does not currently utilize derivative financial instruments for hedging purposes, actively monitoring market risks related to interest rates and equity values[168]. - Other investment income rose significantly to $410 thousand for the three-month period ended March 31, 2025, compared to $111 thousand for the same prior year period, marking an increase of 269.4%[120]. - The effective income tax rate for the three-month period ended March 31, 2025, was 21.8%, slightly down from 21.9% in the same prior year period[139]. - Capital expenditures for Q1 2025 were approximately $1.3 million, with plans for technology and system development initiatives funded by cash flows from operations[156].

Financial Performance - For the three months ended March 31, 2025, sales increased to $1,261,578, up 7.6% from $1,172,601 in the same period of 2024[17] - Gross profit for the nine months ended March 31, 2025, was $1,129,932, a significant increase of 78.1% compared to $634,842 for the same period in 2024[17] - The net loss for the nine months ended March 31, 2025, was $6,373,822, compared to a net loss of $5,737,879 for the same period in 2024, indicating a 11.1% increase in losses[17] - The company reported a basic and diluted net loss per share of $1.94 for the three months ended March 31, 2025, compared to $3.58 for the same period in 2024[17] - The 'BayMedica Commercial' segment reported sales of $3,637,923 for the nine months ended March 31, 2025, an increase from $3,314,663 in the same period of 2024[112] Assets and Liabilities - As of March 31, 2025, total assets decreased to $9,279,834 from $11,822,782 as of June 30, 2024, representing a decline of approximately 21.5%[15] - Total liabilities decreased to $2,258,309 as of March 31, 2025, from $2,616,673 as of June 30, 2024, a reduction of approximately 13.7%[15] - Shareholders' equity decreased to $7,021,525 as of March 31, 2025, from $9,206,109 as of June 30, 2024, reflecting a decline of approximately 23.8%[15] - Cash and cash equivalents decreased to $4,679,826 as of March 31, 2025, down from $6,571,610 at the beginning of the period, a decline of 28.8%[20] - As of March 31, 2025, total inventories amounted to $813,970, a decrease from $1,244,324 as of June 30, 2024, reflecting lower demand and pricing pressure[84] Research and Development - Research and development expenses rose to $2,741,200 for the nine months ended March 31, 2025, compared to $2,558,648 in the prior year, reflecting an increase of 7.1%[17] - Research and development costs are expensed as incurred, with no specific figures provided for the current period[71] Funding and Capital - The Company raised $4,361,220 from private placements during the nine months ended March 31, 2025, compared to $5,216,193 in the same period of 2024[20] - The Company expects to continue seeking additional funding through equity and debt financings, collaborations, and strategic transactions[28] - The Company has an uninsured cash balance of $2.5 million as of March 31, 2025, which may exceed insurable limits[43] - The Company’s liquidity condition raises substantial doubt about its ability to continue as a going concern, necessitating additional capital to finance operations[29] Customer Concentration - Customer A and Customer B accounted for 25% and 37% of revenues, respectively, for the three months ended March 31, 2025, indicating increased customer concentration risk compared to the previous year[45] Legal and Compliance - The Company received a letter from the Licensor on April 29, 2025, indicating the intention to commence arbitration proceedings regarding the Patent License Agreement[123] - The Company has not recognized any liabilities related to indemnification obligations due to the minimal fair value of these obligations[118] Stock and Equity - The Company issued 313,242 Common Shares for gross proceeds of approximately $1.9 million during the nine months ended March 31, 2025[93] - The Company entered into a Standby Equity Purchase Agreement (SEPA) to sell up to $10 million in Common Shares over a 36-month period, with a limit of 19.99% of outstanding shares unless pricing conditions are met[94] - The Company granted 28,700 stock options to employees and external directors on December 20, 2024, with an exercise price of $4.14[101] - As of March 31, 2025, the Company had 61,864 stock options outstanding, with a weighted average exercise price of $32.41[104] Miscellaneous - The Company recorded deferred offering costs of $25,000 for the nine months ended March 31, 2025, related to ongoing financing efforts[46] - The Company has a total undiscounted operating lease liability of $898,599 as of March 31, 2025[107] - The Company has made a one-time payment to UBC under the Collaborative Research Agreement, with one such payment already completed[115] - No payments have been required to be made to UBC under the Technology Assignment Agreement to date[114] - The Company has not experienced any triggering events for repayment under the Contribution Agreement with NRC-IRAP as of March 31, 2025[116]

Financial Performance - Total revenues for the three months ended March 31, 2025, were $1,813 million, a decrease of 12.8% compared to $2,080 million in the same period of 2024[17]. - Net loss for the first quarter of 2025 was $443 million, compared to a net loss of $186 million in the first quarter of 2024, reflecting a significant increase in losses[20]. - The company reported a total comprehensive loss of $428 million for the three months ended March 31, 2025, compared to a total comprehensive loss of $226 million in the same period of 2024[20]. - Net income for Q1 2025 was a loss of $443 million, compared to a loss of $186 million in Q1 2024, indicating a significant decline in profitability[25]. - Adjusted EBITDA for Hertz Global was $(325) million for Q1 2025, compared to $(567) million in Q1 2024, indicating an improvement in operational performance[150]. Assets and Liabilities - Total assets as of March 31, 2025, were $22,047 million, up from $21,802 million as of December 31, 2024, indicating a growth of 1.1%[15]. - Total debt increased to $16,772 million as of March 31, 2025, compared to $16,335 million at the end of 2024, representing a rise of 2.7%[15]. - Total liabilities rose to $22,126 million as of March 31, 2025, compared to $21,475 million at the end of 2024, an increase of 3.0%[30]. - The company’s retained earnings (accumulated deficit) decreased to $(2,945) million as of March 31, 2025, from $(2,502) million at the end of 2024, reflecting a worsening of the deficit[15]. - The accumulated deficit increased to $2,945 million as of March 31, 2025, compared to $2,502 million as of December 31, 2024, highlighting ongoing financial losses[22]. Cash Flow and Investments - Cash provided by operating activities in Q1 2025 was $251 million, down from $370 million in Q1 2024, reflecting a decrease in operational cash flow[25]. - Revenue earning vehicle expenditures in Q1 2025 totaled $2,847 million, an increase from $1,904 million in Q1 2024, highlighting increased investment in fleet[25]. - Net cash used in investing activities was $718 million in Q1 2025, slightly higher than $703 million in Q1 2024, showing continued capital expenditure[25]. - Net cash provided by financing activities in Q1 2025 was $346 million, a significant increase from $85 million in Q1 2024, suggesting improved financing conditions[27]. Operational Metrics - Direct vehicle and operating expenses for Q1 2025 were $1,274 million, down from $1,366 million in Q1 2024, showing a decrease of 6.7%[17]. - The Americas RAC segment generated revenues of $1,490 million in Q1 2025, down from $1,739 million in Q1 2024, reflecting a 14% decline[148]. - International RAC revenues were $323 million in Q1 2025, slightly down from $341 million in Q1 2024, a decrease of 5%[148]. - Vehicle utilization for the Americas RAC segment improved to 80% in Q1 2025, up from 77% in Q1 2024[193]. Debt and Interest - The company incurred interest expense of $267 million in Q1 2025, compared to $216 million in Q1 2024, an increase of 23.6%[33]. - The total non-vehicle debt increased to $5,746 million as of March 31, 2025, compared to $5,104 million as of December 31, 2024, representing a rise of approximately 12.5%[60]. - The total vehicle debt decreased to $11,026 million as of March 31, 2025, from $11,231 million as of December 31, 2024, showing a decline of approximately 1.83%[61]. Tax and Legal Matters - Hertz Global recorded a tax benefit of $82 million for the three months ended March 31, 2025, resulting in an effective tax rate of 16%, compared to a tax benefit of $395 million and an effective tax rate of 68% in the same period of 2024[93][94]. - As of March 31, 2025, the Company has accrued approximately $326 million for litigation, including $260 million on underlying claims and $66 million in pre-judgment interest[135]. - A class action complaint was filed against Hertz Global alleging violations of the Exchange Act, seeking unspecified damages for securities purchased between January 6, 2023, and April 24, 2024[139]. Segment Performance - The corporate segment reported a loss of $(70) million in Q1 2025, which is an increase from a loss of $(52) million in Q1 2024[150]. - Total revenues decreased by $267 million (13%) in Q1 2025 compared to Q1 2024, primarily due to lower volume and pricing in both the Americas RAC and International RAC segments[181]. - Selling, general and administrative expenses (SG&A) increased by $58 million (36%) in Q1 2025 compared to Q1 2024, primarily due to corporate operations[181][185].

Financial Performance - Village Farms reported Q1 2025 consolidated sales of $77.1 million, a slight decrease from $78.1 million in Q1 2024[10]. - The company experienced a consolidated net loss of $6.7 million, or $0.06 per share, compared to a net loss of $2.9 million, or $0.03 per share in the prior year[10]. - Adjusted EBITDA for Q1 2025 was $0.1 million, down from $3.6 million in Q1 2024, indicating a significant decline in operational profitability[10]. - Sales for the three months ended March 31, 2025, were $77,074, a decrease of 1.3% from $78,077 in the same period of 2024[21]. - Gross profit for Q1 2025 was $11,340, down 27.0% from $15,513 in Q1 2024[21]. - Net loss attributable to Village Farms International Inc. shareholders increased to $6,703 in Q1 2025 from $2,852 in Q1 2024, representing a 134.5% increase[21]. - Adjusted EBITDA for Q1 2025 was $81, a significant decline from $3,591 in Q1 2024[21]. - Basic loss per share for Q1 2025 was $(0.06), compared to $(0.03) in Q1 2024[21]. - Total current assets decreased to $104,874,000 as of March 31, 2025, from $116,019,000 at December 31, 2024, a decline of 9.6%[45]. - Total liabilities decreased to $119,151,000 as of March 31, 2025, from $125,348,000 at December 31, 2024, a reduction of 4.5%[45]. - Cash and cash equivalents at the end of Q1 2025 were $15,125,000, down 38.5% from $24,631,000 at the end of Q4 2024[48]. - Net cash used in operating activities for Q1 2025 was $6,376,000, compared to a minimal usage of $50,000 in Q1 2024[48]. - Cash flows used in investing activities totaled $2,839,000 in Q1 2025, an increase from $1,876,000 in Q1 2024[48]. - Comprehensive loss attributable to Village Farms International, Inc. shareholders was $5,811,000 in Q1 2025, compared to $6,815,000 in Q1 2024, indicating a slight improvement[46]. Cannabis Operations - Canadian Cannabis net income increased 258% year-over-year to $3.0 million, with adjusted EBITDA rising 64% to $6.7 million[5][18]. - International medical export cannabis sales surged 285% year-over-year, contributing to gross margin expansion in Canadian Cannabis to 36%[5][10]. - Village Farms commenced cannabis sales in the Netherlands, marking its entry into the European recreational market, with sales beginning in late February 2025[5][10]. - The company plans to complete its Phase II facility in Groningen by Q1 2026, which is expected to quintuple annual production capacity[4][10]. - Retail branded sales in Canadian Cannabis decreased by 20%, while non-branded sales increased by 3% in Canadian dollars[10][19]. - The company maintained a top three market share position in Canada despite a reduction in lower-margin branded sales[5][16]. - Sales breakdown for Q1 2025 included $37,421 from VF Fresh, $34,837 from Canadian Cannabis, and $3,904 from U.S. Cannabis[23]. - The company is expanding its international presence by exporting medical cannabis to markets including Germany, the UK, Israel, Australia, and New Zealand[34]. - Village Farms plans to enter the U.S. THC market leveraging its 5.5 million square feet of greenhouse capacity in West Texas[35]. - Village Farms is one of the leading CBD and hemp-derived brands in the U.S. through its subsidiary Balanced Health Botanicals[35]. Strategic Initiatives - The company expects to receive $40 million in cash proceeds and a 37.9% equity ownership interest in Vanguard Food LP from the privatization of certain Fresh Produce segment assets[3][4]. - The partnership with Terreva Renewables is expected to reduce greenhouse gas emissions by 475,000 metric tons of CO2 annually[36]. - The company is focusing on high-growth cannabinoid opportunities internationally, with strategic investments in international assets[34]. - The proposed spin-out of produce assets into a new joint venture is part of the company's future growth strategy[38]. - Village Farms has 2.6 million square feet of additional greenhouse capacity available in Canada for future expansion[33]. Management Outlook - Management cautioned that the results for the three months ended March 31, 2025, may not be indicative of future performance[22]. - For the three months ended March 31, 2024, the total net loss was $2,852,000, with a significant loss from U.S. Cannabis operations amounting to $711,000[27]. - Adjusted EBITDA for the total company was $3,591,000, with the Canadian Cannabis segment contributing $4,073,000[27].

Company Overview - As of March 31, 2025, the company owns and manages 19 casinos across 11 states in the US and one casino in the UK, with a recent merger adding four additional casinos to its portfolio[205]. - The company has a significant stake in Intralot S.A., a global lottery management business, which diversifies its revenue streams[205]. - The company completed a merger with The Queen Casino & Entertainment Inc. on February 7, 2025, enhancing its market presence[208]. Financial Performance - Total revenue for the Successor period from February 8, 2025 to March 31, 2025 was $368.7 million, a decrease of 5% or $29.3 million from $618.5 million in the three months ended March 31, 2024[226]. - Net income for the Successor period was $34.5 million, compared to a net loss of $51.0 million for the Predecessor period and a net loss of $173.9 million for the three months ended March 31, 2024[234]. - Gaming revenue for the Successor period was $313.8 million, up 3% or $8.8 million from the previous year, while International Interactive revenue decreased by 22% or $42.9 million[226]. - Adjusted EBITDA for the Successor period was $83.3 million, compared to $116.5 million for the three months ended March 31, 2024[235]. - Adjusted EBITDAR for the Casinos & Resorts segment was $71.5 million for the Successor period, down from $89.4 million in the three months ended March 31, 2024[236]. - Total revenue for the Successor period from February 8, 2025 to March 31, 2025 was $368.7 million, a significant increase from $220.5 million in the Predecessor period[239]. - Adjusted EBITDA for the Successor period was $83.3 million, compared to $24.4 million in the Predecessor period, reflecting a strong operational performance[239]. - The effective tax rate for the Successor period was 155.2%, reflecting a benefit for income tax of $(97.1) million[232]. Expenses and Costs - General and administrative expenses increased by 11% or $26.4 million to $160.4 million compared to $248.4 million in the three months ended March 31, 2024, primarily due to costs related to the Merger Agreement[228]. - Depreciation and amortization expenses decreased by 56% or $89.9 million to $69.8 million, driven by accelerated depreciation recorded in the first quarter of 2024[229]. - Total operating costs and expenses for the Successor period were 100.5% of total revenue, down from 112.0% in the previous year[222]. - Interest expense increased to (14.0)% of total revenue for the Successor period, compared to (11.8)% in the previous year[222]. Investments and Capital Expenditures - The company is committed to investing $100 million in Rhode Island over the term of its regulatory agreement, which includes expanding Bally's Twin River and adding new amenities[215]. - Capital expenditures for the Successor period from February 8, 2025, to March 31, 2025, were $30.5 million, while the Predecessor Period from January 1, 2025, to February 7, 2025, was $16.4 million[274]. - The Company expects to spend at least $1.34 billion on the design, construction, and outfitting of its temporary casino and permanent resort and casino in Chicago[278]. - The Company committed to invest $100 million in Bally's Twin River over the term of its master contract, with approximately $45 million remaining as of March 31, 2025[275]. Debt and Financing - The Company entered into a Credit Agreement providing for a senior secured term loan facility of $1.945 billion, maturing in 2028, and a revolving credit facility of $620 million, maturing in 2026[263]. - The Company issued $500 million in first lien senior secured notes due October 2, 2028, at an annual interest rate of 11% as part of the merger financing[262]. - As of March 31, 2025, the Company had $2.02 billion of variable rate debt outstanding under its Term Loan and Revolving Credit Facilities[283]. - A hypothetical increase of 1% in the effective interest rate would cause an increase in interest expense of approximately $20.2 million over the next twelve months[283]. - As of March 31, 2025, the Company was in compliance with all applicable covenants related to its credit facilities, including maintaining a first lien secured indebtedness to Adjusted EBITDA ratio of 5.00 to 1.00 when borrowings exceed 30% of the total revolving commitment[265]. Cash Flow - Net cash provided by operating activities for the Successor period was $42.0 million, contrasting with a net cash used of $80.2 million in the Predecessor period[255]. - Cash and cash equivalents at the end of the Successor period totaled $264.7 million, up from $230.9 million at the beginning of the period[254]. - Net cash used in investing activities for the Successor period was $20.8 million, compared to $17.7 million in the Predecessor period[256]. - Financing activities provided $14.1 million in the Successor period, a 118.3% increase from $51.3 million in the three months ended March 31, 2024[257]. Regulatory and Compliance - The company operates under a regulatory agreement in Rhode Island that imposes financial covenants and operational restrictions, including a leverage ratio limit of 5.50 to 1.00[213]. - The company is focusing on the integration of acquired assets and capital deployment for strategic growth projects, positioning itself as a vertically integrated iGaming company[207]. - The company faces risks from global economic challenges, including rising inflation and interest rates, which could impact consumer spending and visitation to its properties[216]. Sponsorship and Agreements - The Company has entered into several sponsorship agreements with obligations totaling $122.7 million, extending through 2036[279].