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Category: Taxation

  • MIL-OSI USA: 25 Canadian nationals connected to nationwide multi-million dollar “grandparent scam” charged in Vermont

    Source: US Immigration and Customs Enforcement

    Burlington, Vt. – Canadian law enforcement provisionally arrested 23 Canadian nationals March 4 after they were indicted by federal grand jury in Vermont for participation in a “grandparent scam” uncovered by U.S. Immigration and Customs Enforcement. The scam allegedly defrauded elderly individuals in more than 40 states of over $21 million.

    According to the indictment returned by the grand jury Feb. 20 and unsealed on March 4, between the summer of 2021 and June 4, 2024, the defendants engaged in a “grandparent scam” involving phone calls made from call centers in and around Montreal, Québec. During these phone calls, defendants falsely claimed to be an elderly victim’s relative, typically a grandchild, who had been arrested following a car crash and needed money for “bail.” Other defendants posed as an “attorney” representing the elderly victim’s relative. Elderly victims were often told that there was a “gag order” in place to prevent the elderly victim from telling anyone about their family member’s supposed arrest. Elderly victims were convinced to provide bail money to an individual falsely posing as a bail bondsman, who would come to the elderly victim’s home to collect the money. This money was later transmitted to Canada following cash deliveries and financial transactions, sometimes involving cryptocurrency, which, the indictment alleges, obscured the source of the money and the identities of defendants.

    When Canadian law enforcement executed search warrants on June 4, 2024, at several call centers, many of the defendants were found in the act of placing phone calls to elderly victims in Virginia. The Indictment alleges the call centers were managed by Gareth West, Usman Khalid, Andrew Tatto, Stephan Moskwyn, and Ricky Ylimaki, and also charges these five defendants with conspiring to commit money laundering. The conspiracy defrauded elderly Americans out of more than $21 million.

    “These individuals are accused of an elaborate scheme using fear to extort millions of dollars from victims who believed they were helping loved ones in trouble. Today’s arrests are the result of domestic collaboration as well as our critical international partnerships with our colleagues in Canada, Sûreté du Québec and the Royal Canadian Mounted Police. Tackling transnational crime is one of our greatest priorities and we’re working hand-in-hand with our neighbors to dismantle organized criminal groups that threaten our safety and security,” said ICE Homeland Security Investigations Special Agent in Charge New England Michael J. Krol.

    “Today’s operation is an excellent example of ICE Canada’s partnership with the Sûreté du Québec and resulted in the disruption of a significant transnational criminal organization. We will continue to partner with the SQ, the Royal Canadian Mounted Police and other law enforcement agencies to identify and dismantle criminal organizations operating throughout North America and abroad that exploit our shared border and vulnerable population for illicit gain,” said ICE HSI Attache for Ottawa Magdalena Sigur.

    “The transnational criminal conspiracy described in the Indictment preyed on vulnerable Americans throughout the United States,” observed Acting United States Attorney Michael P. Drescher. “These charges reflect the painstaking investigatory work of the Vermont-based agents from Homeland Security Investigations and the Internal Review Service-Criminal Investigations. In addition, we recognize the extensive investigative assistance provided by Sûreté du Québec and the Royal Canadian Mounted Police.”

    “Today’s arrest of Gareth West and his co-conspirators demonstrates IRS-CI’s commitment to protecting the American people from bad actors, no matter where they are hiding.” said Thomas Demeo, Acting Special Agent in Charge of the Internal Revenue Service Criminal Investigation, Boston Field Office. “West and his associates lead a transnational criminal enterprise with the sole intent of defrauding hundreds of retirees of their life savings by preying on their emotions and deceiving them into thinking that their loved ones were in peril. IRS-CI is committed to continued collaboration with our law enforcement partners, both at home and abroad, to stop and deter anyone who seeks to profit off the hard work of U.S. citizens.”

    “For the Quebec Provincial Police and Homeland Security Investigations, transnational criminal organizations are a significant concern that requires close collaboration. Criminal networks operate beyond borders; thus, it is crucial to have strong partnerships among law enforcement. Today’s arrests highlight the efficiency of our joint efforts, demonstrating that our cooperation delivers concrete results in enhancing public safety on both sides of the border,” said Chief Inspector Michel Patenaude

    An indictment contains only allegations, and defendants are presumed innocent until and unless proven guilty.

    West, Khalid, Tatto, Moskwyn and Ricky Ylimaki face up to 40 years of imprisonment if convicted, and the remaining defendants face up to 20 years of imprisonment if convicted.

    The investigation was led by ICE and IRS-CI with the assistance of U.S. Customs and Border Protection and the Quebec Provincial Police (Sûreté du Québec) in Canada. The Royal Canadian Mounted Police conducted the provisional arrests in Canada. Significant assistance was provided by the U.S. Department of Justice Office of International Affairs as well as the International Assistance Group at Justice Canada. This case was investigated under the Organized Crime Drug Enforcement Task Forces (OCDETF). OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach.

    More information about Organized Crime Drug Enforcement Task Forces

    Individuals charged in the indictment:

    • Gareth West, a.k.a. “Buddy” and “Muscles,” (38 – Burlington, Ontario)
    • Usman Khalid, a.k.a. “Paul” and “Pauly,” (36 – Les Coteaux, Québec)
    • Andrew Tatto, a.k.a. “Chevy” and “Truck,” (43 – Pierrefonds, Québec)
    • Stephan Moskwyn, a.k.a. “HK,” (42 – Pierrefonds, Québec)
    • Ricky Ylimaki, a.k.a. “Ruffles,” (31 – Notre-Dame-de-l’Île-Perrot, Québec)
    • Richard Frischman, a.k.a. “Styx,” (31 – Montréal, Québec)
    • Adam Lawrence, a.k.a. “Carter,” (41 – Lasalle, Québec)
    • Michael Filion, a.k.a. “Elvis,” (45 – Pierrefonds, Québec)
    • Jimmy Ylimaki, a.k.a. “Coop,” (35 – Notre-Dame-de-l’Île-Perrot, Québec)
    • Nicolas Gonzalez, a.k.a. “Brady,” (27 – Kirkland, Québec)
    • Ryan Melanson, a.k.a. “Parker,” (27 – Montréal, Québec)
    • Joy Kalafatidis, a.k.a. “Blondie,” (31 – Pointe-Claire, Québec)
    • David Arcobelli, a.k.a. “Phil,” (36 – Pierrefonds, Québec)
    • Jonathan Massouras, a.k.a. “Borze,” (35 – Dollard-Des Ormeaux, Québec)
    • Nicholas Shiomi, a.k.a. “Keanu,” (42 – Montréal, Québec)
    • Antonio Iannacci, a.k.a. “DJ,” (33 – Pierrefonds, Québec)
    • Jonathan Ouellet, a.k.a. “Sunny,” (29 – Saint-Eustache, Québec)
    • Kassey-Lee Lankford, a.k.a. “Lex,” (28 – Vaudreuil-Dorion, Québec)
    • Sara Burns, a.k.a. “Ginger,” (31 – Dollard-Des Ormeaux, Québec)
    • Justin Polenz, a.k.a. “Happy,” (34 – Montréal, Québec)
    • Ryan Thibert, a.k.a. “Toast,” (37 – Vaudreuil-Dorion, Québec)
    • Michael Farella, a.k.a. “Honda,” (29 – Sainte-Geneviève, Québec)
    • Sebastian Guenole, a.k.a. “Tweeter,” (30 – Pierrefonds, Québec)
    • Ryan Bridgman, a.k.a. “Clint,” (37 – Deux-Montagnes, Québec)
    • Stephanie-Marie Samaras, a.k.a. “North” (29 – Laval, Québec)

    All but two of the above-named individuals were arrested in Canada on March 4. West and Jimmy Ylimaki remain at large.

    An additional nine individuals have previously been charged in the District of Vermont in connection with this grandparent scam, including Otmane Khalladi (32 – Miami, Florida), Jean Richard Audate (39 – New York, New York), Philippe Alvarez (34 – Montréal, Québec), Paul Conneh (37 – Guangzhou, China), Dave Leblanc (37 – Greenacres, Florida), Zavier Buchanan (27 – Wellington, Florida), William Comfort (29 – Los Angeles, California), Alejandro Garcia (34 – Miami, Florida), and Enmanuel Castillo (31 – Miami, Florida).

    If you or someone you know has been a victim of elder fraud, help is standing by at the National Elder Fraud Hotline (833-FRAUD-11). This hotline is a free resource created by the U.S. Department of Justice, Office for Victims of Crime for people to report fraud against anyone age 60 or older.

    View the indictment

    MIL OSI USA News –

  • MIL-OSI Security: Three Wanted Defendants from Mexico Secured in Arizona

    Source: Office of United States Attorneys

    PHOENIX, Ariz. – Jose Bibiano Cabrera-Cabrera, 37; Jesus Humberto Limon-Lopez, 43; and Jose Guadalupe Tapia-Quintero, 53; all of Mexico, appeared last week for their initial appearances after they were secured from Mexico on February 27, 2025.

    The defendants taken into U.S. custody include leaders and managers of drug cartels recently designated as Foreign Terrorist Organizations and Specially Designated Global Terrorists, such as the Sinaloa Cartel, Cártel de Jalisco Nueva Generación (CJNG), Cártel del Noreste (formerly Los Zetas), La Nueva Familia Michoacana, and Cártel de Golfo (Gulf Cartel). These defendants are collectively alleged to have been responsible for the importation into the United States of massive quantities of poison, including cocaine, methamphetamine, fentanyl, and heroin, as well as associated acts of violence.

    Tapia-Quintero is charged with Conspiracy to Distribute Methamphetamine with Intent to Import into the United States; Conspiracy to Import Methamphetamine; Conspiracy to Possess with the Intent to Distribute Methamphetamine; Conspiracy to Commit Promotional Money Laundering; Conspiracy to Commit Concealment Money Laundering; and Aiding and Abetting. He is facing up to life imprisonment.

    Limon-Lopez is charged with Continuing Criminal Enterprise; Conspiracy to Distribute Methamphetamine, Fentanyl, Heroin, and Cocaine; Conspiracy to Import Methamphetamine, Fentanyl, Heroin, and Cocaine; Distribution of Methamphetamine; Distribution of Fentanyl; Distribution of Heroin; Distribution of Cocaine; and Conspiracy to Unlawfully Export Firearms and Ammunition. He faces up to life imprisonment.

    Cabrera-Cabrera is charged with Conspiracy to Distribute Methamphetamine, Fentanyl, Heroin, and Cocaine; Conspiracy to Import Methamphetamine, Fentanyl, Heroin, and Cocaine; and Conspiracy to Unlawfully Export Firearms and Ammunition. He faces up to life imprisonment.

    An indictment is merely an allegation of criminal conduct, not evidence. An individual is presumed innocent until evidence is presented to a jury that establishes guilt beyond a reasonable doubt.

    This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) Strike Force Initiative, which provides for the establishment of permanent multi-agency task force teams that work side-by-side in the same location. This co-located model enables agents from different agencies to collaborate on intelligence-driven, multi-jurisdictional operations to disrupt and dismantle the most significant drug traffickers, money launderers, gangs, and transnational criminal organizations.

    The OCDETF Arizona Strike Force is comprised of agents and officers from Customs and Border Protection, the Department of Homeland Security, Homeland Security Investigations, the Drug Enforcement Administration, the Federal Bureau of Investigation, the Internal Revenue Service, Criminal Investigations, the United States Marshals Service, the United States Postal Service, United States Postal Inspection Service, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Arizona Army National Guard, the Maricopa County Sheriff’s Office, the Pima County Sheriff’s Office, and the Scottsdale Police Department. The prosecution is being handled by the United States Attorney Office for the District of Arizona.
     

    CASE NUMBER:           CR-13-00179-PHX-SRB
                                          CR-21-01864-TUC-SHR
    RELEASE NUMBER:    2025-030_Cabrera-Cabrera

    # # #

    For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
    Follow the U.S. Attorney’s Office, District of Arizona, on X @USAO_AZ for the latest news.

     

    MIL Security OSI –

  • MIL-OSI: Rigetti Computing Reports Fourth Quarter and Full-Year 2024 Results

    Source: GlobeNewswire (MIL-OSI)

    BERKELEY, Calif., March 05, 2025 (GLOBE NEWSWIRE) — Rigetti Computing, Inc. (Nasdaq: RGTI) (“Rigetti” or the “Company”), a pioneer in full-stack quantum-classical computing, today announced its financial results for the fourth quarter and year ended December 31, 2024.

    Fourth Quarter and Full-Year 2024 Financial Highlights

    • Revenues for the three months ended December 31, 2024 were $2.3 million
    • Operating expenses for the three months ended December 31, 2024 were $19.5 million
    • Operating loss for the three months ended December 31, 2024 was $18.5 million
    • Net loss for the three months ended December 31, 2024 was $153.0 million, including $135.1 million of non-cash charges for the fair value change in the earn-out and derivative warrant liabilities
    • For the year ended December 31, 2024, revenues were $10.8 million, operating expenses were $74.2 million, operating loss was $68.5 million and net loss was $201.0 million, including $133.9 million of non-cash charges for the fair value change in the earn-out and derivative warrant liabilities
    • As of December 31, 2024 cash, cash equivalents and available-for-sale securities totaled $217.2 million
    • Received net proceeds of $153.3 million during the three months ended December 31, 2024 from the sale of 88.1 million shares of common stock through a registered direct offering and completion of our at-the-market equity offering
    • Prepaid in full all remaining amounts owed under our loan agreement with Trinity Capital, Inc.

    Business & Strategic Collaboration Updates

    New strategic collaboration with Quanta Computer
    Rigetti has entered into a strategic collaboration agreement with Quanta Computer, Inc. (“Quanta”), a Taiwan-based Global Fortune 500 company and the global leader of computer server manufacturing, with the goal of accelerating the development and commercialization of superconducting quantum computing. The companies have committed to investing more than $100 million each over the next five years pursuant to the collaboration agreement, with both sides focusing on their complementary strengths to develop superconducting quantum computing technologies. In addition, pursuant to a securities purchase agreement, Quanta will invest $35 million to purchase shares of Rigetti common stock, subject to regulatory clearance. The agreements were signed on February 27, 2025.

    “Quanta’s collaboration with Rigetti is designed to strengthen our position in this flourishing market. Our companies’ complementary strengths — Rigetti as a pioneer in superconducting quantum technology, with open, modular architecture enabling integration of innovative solutions across the stack, and Quanta as the world’s leading notebook/server manufacturer with $43 billion in annual sales — will support us in our goal to be at the forefront of the quantum computing industry,” says Dr. Subodh Kulkarni, Rigetti CEO.

    Montana State University purchases a Novera QPU
    Rigetti sold a Novera QPU to Montana State University (MSU) in December 2024, which was the Company’s first QPU sale to an academic institution. The Novera will be located at MSU’s QCORE to educate and train scientists and engineers on quantum computing technologies, in addition to being used to create a testbed for quantum computing R&D. MSU’s QCORE is a new center of excellence for quantum enabling technologies established to accelerate workforce development and the regional quantum innovation ecosystem.

    Technology Milestones

    84-qubit Ankaa-3 system launches with record high fidelity
    Rigetti launched its 84-qubit Ankaa™-3 system in December 2024. Ankaa-3 features an extensive hardware redesign that enables superior performance. Rigetti achieved major two-qubit gate fidelity milestones with Ankaa-3: successfully halving error rates in 2024 to achieve a 99.0% median iSWAP gate fidelity and demonstrating 99.5% median fidelity with fSim gates. Rigetti’s newest flagship quantum computer continues to feature Rigetti’s scalable, industry-leading chip architecture with 3D signal delivery while incorporating major enhancements to key technologies.

    Ankaa-3 is available to Rigetti’s partners via the Rigetti Quantum Cloud Services platform (QCS®) and to the general public via Microsoft Azure and Amazon Braket.

    “We believe that superconducting qubits are the winning modality for quantum computers given their fast gate speeds and scalability. We’ve developed critical IP to scale our systems and remain confident in our plans to scale to 100+ qubits by the end of the year with a targeted 2x reduction in error rates from the error rates we achieved at the end of 2024. We believe our leadership in superconducting quantum computing continues to be reinforced as we push the boundaries of our system performance, as evidenced by the success of Ankaa-3,” says Dr. Kulkarni.

    Successful AI-powered calibration of a Rigetti QPU
    AI-powered tools from Quantum Elements and Qruise remotely automated the calibration of a Rigetti QPU integrated with Quantum Machines’ control system. This work was part of the “AI for Quantum Calibration Challenge” (the “Challenge”) hosted at the Israeli Quantum Computing Center. The two companies participating in the Challenge, Quantum Elements and Qruise, automated the calibration of a 9-qubit Rigetti Novera™ QPU integrated with Quantum Machines’ advanced OPX1000 control system and NVIDIA DGX Quantum, a unified system for quantum-classical computing that NVIDIA built with Quantum Machines. This achievement showcases the potential of AI in quantum computer calibration and also highlights the growing collaboration within the quantum computing ecosystem.

    Quantum Elements, Cruise, and Quantum Machines are members of Rigetti’s Novera QPU Partner Program — an ecosystem of quantum computing hardware, software, and service providers who build and offer integral components of a functional quantum computing system.

    “We believe that another advantage we leverage is our modular approach to developing our technology. By enabling our partners to integrate their technology with ours, we can explore and advance creative and flexible ways to improve quantum computing capabilities,” says Dr. Kulkarni.

    Research demonstrating optical reading technique published in Nature Physics
    Joint research with QphoX and Qblox demonstrating the ability to readout superconducting qubits with an optical transducer was recently published in Nature Physics. This approach to qubit signal processing could have benefits in building scalable quantum computers as it could be a more compact, modular approach for measuring qubit performance in quantum computing systems that rely on microwave amplification. Current qubit readout techniques used by superconducting quantum computer systems in cryogenic environments can be resource intensive from a thermal and power usage perspective. A potential solution to this problem may be to replace coaxial cables and other cryogenic components with optical fibers, which have a considerably smaller footprint and negligible thermal conductivity. To demonstrate the potential of this technology, QphoX, Rigetti and Qblox connected a transducer to a superconducting qubit, with the goal of measuring its state using light transmitted through an optical fiber. It was discovered that the transducer is capable of converting the signal that reads out the qubit and the qubit can also be sufficiently protected from decoherence introduced by thermal noise or stray optical photons from the transducer during operation.

    Conference Call and Webcast
    Rigetti will host a conference call later today, March 5, 2025, at 5:00 pm ET, or 2:00 pm PT, to discuss its fourth quarter and full-year 2024 financial results.

    You can listen to a live audio webcast of the conference call at https://edge.media-server.com/mmc/p/5jaikwa8/ or the “Events & Presentations” section of the Company’s Investor Relations website at https://investors.rigetti.com/. A replay of the conference call will be available at the same locations following the conclusion of the call for one year.

    To participate in the live call, you must register using the following link: https://register.vevent.com/register/BIc3642ee5e70e4bea9d3311a88c4e128a. Once registered, you will receive dial-in numbers and a unique PIN number. When you dial in, you will input your PIN and be routed into the call. If you register and forget your PIN, or lose the registration confirmation email, simply re-register to receive a new PIN.

    About Rigetti
    Rigetti is a pioneer in full-stack quantum computing. The Company has operated quantum computers over the cloud since 2017 and serves global enterprise, government, and research clients through its Rigetti Quantum Cloud Services platform. In 2021, Rigetti began selling on-premises quantum computing systems with qubit counts between 24 and 84 qubits, supporting national laboratories and quantum computing centers. Rigetti’s 9-qubit Novera QPU was introduced in 2023 supporting a broader R&D community with a high-performance, on-premises QPU designed to plug into a customer’s existing cryogenic and control systems. The Company’s proprietary quantum-classical infrastructure provides high-performance integration with public and private clouds for practical quantum computing. Rigetti has developed the industry’s first multi-chip quantum processor for scalable quantum computing systems. The Company designs and manufactures its chips in-house at Fab-1, the industry’s first dedicated and integrated quantum device manufacturing facility. Learn more at https://www.rigetti.com/.

    Contacts

    Rigetti Computing Investor Contact:
    IR@Rigetti.com

    Rigetti Computing Media Contact:
    press@rigetti.com

    Cautionary Language Concerning Forward-Looking Statements
    Certain statements in this communication may be considered “forward-looking statements” within the meaning of the federal securities laws, including statements with respect to the Company’s future success and performance, including expectations with respect to future revenues and the timing, availability and impact of government programs relating to quantum information science; expectations regarding the advantages and impact of the strategic collaboration agreement with Quanta Computer on our operations, technology roadmap, milestones, and our position in the industry; the expectation that Rigetti and Quanta will each invest more than $100 million over the next five years; expectations regarding Quanta’s anticipated $35 million investment in Rigetti through a purchase of Rigetti’s common stock; anticipated regulatory clearance; expectations related to the Company’s ability to achieve milestones including the development of future generations of hardware, including any future generations developed to achieve our targeted fidelities and qubit counts, or to demonstrate narrow quantum advantage or broad quantum advantage, each of which is an important anticipated milestone for our technology roadmap and commercialization of our quantum computers; expectations with respect to scaling to create larger qubit systems without sacrificing gate performance using the Company’s modular chip architecture, including expectations with respect to the Company’s anticipated systems and targeted error rate reduction; expectations with respect to future sales or leases of the Novera QPU, customer adoption of the Ankaa-3 systems and Novera QPU; the possibility that reading out superconducting qubits with an optical transducer could have benefits in building scalable quantum computers; the possibility that replacing coaxial cables and other cryogenic components with optical fibers could result in less thermal and power usage; expectations with respect to the Company’s partners and customers and the quantum computing plans and activities thereof; and expectations with respect to the anticipated stages of quantum technology maturation, including the Company’s ability to develop a quantum computer that is able to solve practical, operationally relevant problems significantly better, faster, or cheaper than a current classical solution and achieve quantum advantage on the anticipated timing or at all. These forward-looking statements are based upon estimates and assumptions that, while considered reasonable by the Company and its management, are inherently uncertain. Factors that may cause actual results to differ materially from current expectations include, but are not limited to: the Company’s ability to achieve milestones, technological advancements, including with respect to its technology roadmap; the ability of the Company to obtain government contracts successfully and in a timely manner and the availability of government funding; the potential of quantum computing; the ability of the Company to expand its QPU sales and the Novera QPU Partnership Program; the success of the Company’s partnerships and collaborations, including the strategic collaboration with Quanta Computer; the Company’s ability to accelerate its development of multiple generations of quantum processors; the outcome of any legal proceedings that may be instituted against the Company or others; the ability to maintain relationships with customers and suppliers and attract and retain management and key employees; costs related to operating as a public company; changes in applicable laws or regulations; the possibility that the Company may be adversely affected by other economic, business, or competitive factors; the Company’s estimates of expenses and profitability; the evolution of the markets in which the Company competes; the ability of the Company to implement its strategic initiatives and expansion plans; the expected use of proceeds from the Company’s past and future financings or other capital; the sufficiency of the Company’s cash resources; unfavorable conditions in the Company’s industry, the global economy or global supply chain, including rising inflation and interest rates, deteriorating international trade relations, political turmoil, natural catastrophes, warfare and terrorist attacks; and other risks and uncertainties set forth in the section entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 and Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, and other documents filed by the Company from time to time with the SEC. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and the Company assumes no obligation and does not intend to update or revise these forward-looking statements other than as required by applicable law. The Company does not give any assurance that it will achieve its expectations.

    RIGETTI COMPUTING, INC.
    CONSOLIDATED BALANCE SHEETS
    (in thousands, except number of shares and par value)
               
      December 31,   December 31,
      2024   2023
    Assets          
    Current assets:          
    Cash and cash equivalents $ 67,674     $ 21,392  
    Available-for-sale investments – short-term   124,420       78,537  
    Accounts receivable   2,427       5,029  
    Prepaid expenses   3,156       1,938  
    Other current assets   9,081       771  
    Total current assets   206,758       107,667  
    Available-for-sale investments – long-term   25,068       —  
    Property and equipment, net   44,643       44,483  
    Operating lease right-of-use assets   7,993       7,634  
    Other assets   325       129  
    Total assets $ 284,787     $ 159,913  
               
    Liabilities and Stockholders’ Equity          
    Current liabilities:          
    Accounts payable $ 1,590     $ 5,772  
    Accrued expenses and other current liabilities   8,005       8,563  
    Current portion of deferred revenue   113       343  
    Current portion of debt   —       12,164  
    Current portion of operating lease liabilities   2,159       2,210  
    Total current liabilities   11,867       29,052  
    Debt, less current portion   —       9,894  
    Deferred revenue, less current portion   698       —  
    Operating lease liabilities, less current portion   6,641       6,297  
    Derivative warrant liabilities   93,095       2,927  
    Earn-out liabilities   45,897       2,155  
    Total liabilities   158,198       50,325  
    Commitments and contingencies          
    Stockholders’ equity:          
    Preferred stock, par value $0.0001 per share, 10,000,000 shares authorized, none outstanding   —       —  
    Common stock, par value $0.0001 per share, 1,000,000,000 shares authorized, 283,546,871 shares issued and outstanding at December 31, 2024 and 147,066,336 shares issued and outstanding at December 31, 2023   29       14  
    Additional paid-in capital   681,202       463,089  
    Accumulated other comprehensive income   105       244  
    Accumulated deficit   (554,747 )     (353,759 )
    Total stockholders’ equity   126,589       109,588  
    Total liabilities and stockholders’ equity $ 284,787     $ 159,913  
                   
    RIGETTI COMPUTING, INC.
    CONSOLIDATED STATEMENTS OF OPERATIONS
    (in thousands, except per share data)
     
                   
      Three Months Ended December 31,   Year Ended December 31,
      2024   2023   2024   2023
    Revenue $ 2,274     $ 3,376     $ 10,790     $ 12,008  
    Cost of revenue   1,271       860       5,093       2,800  
    Total gross profit   1,003       2,516       5,697       9,208  
    Operating expenses:                      
    Research and development   13,657       12,787       49,750       52,768  
    Selling, general and administrative   5,840       6,936       24,457       27,744  
    Restructuring   —       —       —       991  
    Total operating expenses   19,497       19,723       74,207       81,503  
    Loss from operations   (18,494 )     (17,207 )     (68,510 )     (72,295 )
    Other income (expense), net                      
    Interest expense   (446 )     (1,268 )     (3,255 )     (5,779 )
    Interest income   1,546       1,330       5,113       5,076  
    Change in fair value of derivative warrant liabilities   (90,885 )     3,160       (90,168 )     (1,160 )
    Change in fair value of earn-out liabilities   (44,256 )     1,413       (43,742 )     (949 )
    Loss on extinguishment of debt   (426 )     —       (426 )     —  
    Total other expense, net   (134,467 )     4,635       (132,478 )     (2,812 )
    Net loss before provision for income taxes   (152,961 )     (12,572 )     (200,988 )     (75,107 )
    Provision for income taxes   —       —       —       —  
    Net loss $ (152,961 )   $ (12,572 )   $ (200,988 )   $ (75,107 )
    Net loss per share attributable to common stockholders – basic and diluted $ (0.68 )   $ (0.09 )   $ (1.09 )   $ (0.57 )
    Weighted average shares used in computing net loss per share attributable to common stockholders – basic and diluted   226,364       140,537       184,666       131,977  
                                   
    RIGETTI COMPUTING INC.
    CONSOLIDATED STATEMENTS OF CASH FLOW
    (in thousands)
       
      Year Ended December 31,
      2024   2023
    Cash flows from operating activities:          
    Net loss $ (200,988 )   $ (75,107 )
    Adjustments to reconcile net loss to net cash used in operating activities:          
    Depreciation and amortization   6,906       7,426  
    Stock-based compensation   13,069       12,409  
    Change in fair value of earn-out liabilities   43,742       949  
    Change in fair value of derivative warrant liabilities   90,168       1,160  
    Change in fair value of forward contract   —       2,229  
    Impairment of deferred offering costs   —       836  
    Accretion of available-for-sale securities   (3,622 )     (3,121 )
    Loss on extinguishment of debt   426       —  
    Amortization of debt issuance costs, commitment fees and accretion of final payment fees   844       1,453  
    Non-cash lease expense   1,909       1,682  
    Changes in operating assets and liabilities:          
    Accounts receivable   2,602       1,206  
    Prepaid expenses, other current assets and other assets   (2,434 )     (259 )
    Deferred revenue   468       (618 )
    Accounts payable   (1,036 )     895  
    Accrued expenses and operating lease liabilities   (2,681 )     (1,719 )
    Net cash used in operating activities   (50,627 )     (50,579 )
    Cash flows from investing activities:          
    Purchases of property and equipment   (11,098 )     (9,059 )
    Purchases of available-for-sale securities   (224,764 )     (109,252 )
    Maturities of available-for-sale securities   157,500       119,084  
    Net cash (used in) provided by investing activities   (78,362 )     773  
    Cash flows from financing activities:          
    Principal repayments and prepayment and final payment fees of notes payable   (23,328 )     (8,333 )
    Net payments of tax withholdings on sell-to-cover equity award transactions   (6,272 )     —  
    Proceeds from sale of common stock through Common Stock Purchase Agreement   12,838       20,544  
    Proceeds from sale of common stock through At-The-Market (ATM) Offering   97,500       —  
    Proceeds from sale of common stock through registered direct offering   96,000       —  
    Payments of offering costs   (1,833 )     (107 )
    Proceeds from issuance of common stock upon exercise of stock options and warrants   554       1,126  
    Net cash provided by financing activities   175,459       13,230  
    Effects of exchange rate changes on cash and cash equivalents   (188 )     80  
    Net increase (decrease) in cash and cash equivalents   46,282       (36,496 )
    Cash and cash equivalents – beginning of period   21,392       57,888  
    Cash and cash equivalents – end of period $ 67,674     $ 21,392  
    Supplemental disclosures of other cash flow information:          
    Cash paid for interest $ 2,350     $ 4,340  
    Non-cash investing and financing activities:          
    Capitalization of deferred costs to equity upon share issuance   —       13  
    Purchases of property and equipment recorded in accounts payable   466       3,612  
    Purchases of property and equipment recorded in accrued expenses   150       1,019  
    Non-cash addition to operating lease right-of-use assets and lease liability   2,268       —  
    Unrealized gain on short term investments   66       325  

    The MIL Network –

  • MIL-OSI USA: Kennedy explains how new natural disaster tax law could save Louisianians money this tax season

    US Senate News:

    Source: United States Senator John Kennedy (Louisiana)

    Watch Kennedy’s comments here.
    WASHINGTON – Sen. John Kennedy (R-La.) explained how changes to the tax code could affect how some Louisianians claim deductions related to damage from Hurricanes Laura, Delta, Ida and Francine in a speech on the Senate floor.
    Key excerpts of the speech are below:
    “I realize, Mr. President of the Senate, that you would probably prefer to be condemned to hearing O.J. jokes for the rest of eternity than to hear me talk about federal income tax filing, but it is important for Americans and my people back in Louisiana because we have a new deduction for people who have uninsured losses from natural disasters. It’s really important in my state because many of my people have suffered damages, for which they did not receive insurance payments, from Hurricanes Laura, Delta, Ida and Francine.
    “It is called the Federal Disaster Tax Relief Act. What it does is the following: It changes the law. It now says that if you are a victim of a natural disaster like a hurricane and you have a loss that is not paid for by your insurance, you can now deduct off your income tax—dollar for dollar—any uninsured property damage in excess of $500.”
    . . . 
    “I know folks are thinking, well, I already filed my income taxes for 2021 and 2022 and 2023. You can file an amended return. It is very simple to do. You just file an amended return that says: There has been a change in the law, and I am entitled to have this higher deduction, and therefore the federal government owes me money, and therefore please send me my check. So, I wanted to make sure that Americans knew about this new tax provision we passed.”
    Background: 
    In Dec. 2024, Congress passed the Federal Disaster Tax Relief Act, which allows Americans who suffered damage as a result of a federally declared disaster—including some hurricanes, tornados, and wildfires—to deduct from their taxes certain uninsured property damage in excess of $500.
    Louisianians who suffered uninsured property damage during Hurricanes Laura, Delta, Ida and Francine may be eligible for the new deduction. Those who already claimed losses from those storms between 2021 and 2023 may be able to amend their previously filed taxes to claim the new deduction.
    Individuals and couples that receive the standard tax deduction—which is 90% of Americans—will still receive the full standard deduction in addition to any deduction they may claim related to storm damage under this new law.
    Watch Kennedy’s full speech here.

    MIL OSI USA News –

  • MIL-OSI Security: Former small business office manager sentenced to 4+ years in federal prison for embezzlement, identity theft

    Source: Office of United States Attorneys

    A district judge sentenced a Collinsville woman to 51 months’ imprisonment after she embezzled more than $158,000 and stole the identity of a coworker while employed by AMK Heating and Cooling in Edwardsville.

    Angela L. Cooper, 47, pleaded guilty to one count of wire fraud, one count of bank fraud, one count of aggravated identity theft and three counts of tax fraud. In addition to imprisonment, the judge ordered her to pay $168,536.12 in restitution and serve three years of supervised release.

    “The U.S. Attorney’s Office aggressively prosecutes identity theft because the crime causes so much harm. Its victims suffer not only drained bank accounts, but they also endure sleepless nights, and it can sometimes take years to undo the damage,” said U.S. Attorney Steven D. Weinhoeft. “The U.S. Attorney’s Office is proud of our partnership with IRS Criminal Investigation and the FBI, and we will continue to hold those who harm small businesses accountable.”

    According to court documents, Cooper served as the office manager for AMK and had access to the company’s checkbook and accounting software. Using these tools, Cooper fraudulently wrote more than 100 checks payable to herself and forged the signature of the business’s owner. Cooper tried to conceal her fraud by disguising the checks as payroll and loans to her from AMK. Over a two-year period, Cooper embezzled $158,658.41 from AMK.

    “By nature, greed continues to grow if left unchecked. For two years, Angela Cooper found multiple ways to steal from her employer. Cooper’s greed even extended to a coworker,” said FBI Springfield Special Agent in Charge Christopher Johnson. “The FBI is proud to work alongside our IRS law enforcement partners to thwart corporate fraud and ensure justice for victims.”

    While employed by AMK, Cooper also had access to employee files and personal information like birthdates and social security numbers. Cooper used a coworker’s information to apply for and fraudulently obtain a Discover credit card. Cooper maxed out the credit card, accruing $9,877.71 in charges on the card in a matter of weeks. In doing so, she committed bank fraud and aggravated identity theft, which carried a mandatory two year minimum sentence.

    “Ms. Cooper broke the trust of her employer by embezzling well over $100,000 from them in her role as a bookkeeper,” said Special Agent in Charge Bill Steenson, IRS Criminal Investigation’s St. Louis Field Office. “The crime was compounded when she failed to report the stolen funds as income on her tax returns. All income is taxable, even stolen income and this sentence helps drive that point home.”

    Finally, Cooper failed to report the additional income in her 2019, 2020 and 2021 tax returns to the IRS. Although fraudulently obtained, the income was required to be reported on her tax returns. Her omission of the additional income caused a tax loss of over $35,000 to the IRS.

    IRS Criminal Investigation and the FBI Springfield Field Office contributed to the investigation, and Assistant U.S. Attorney Zoe Gross prosecuted the case.

    MIL Security OSI –

  • MIL-OSI: Amplify Energy Announces Fourth Quarter and Full-Year 2024 Results, Year-End 2024 Proved Reserves, Juniper Capital Acquisition Update and Standalone Full-Year 2025 Guidance

    Source: GlobeNewswire (MIL-OSI)

    HOUSTON, March 05, 2025 (GLOBE NEWSWIRE) — Amplify Energy Corp. (NYSE: AMPY) (“Amplify,” the “Company,” “us,” or “our”) announced today its operating and financial results for the fourth quarter and full-year 2024, year-end 2024 proved reserves, Juniper Capital (“Juniper”) acquisition update and full-year 2025 standalone guidance for the Company.

    Key Highlights

    • 2025 strategic initiatives include:
      • Completing the previously announced transformational combination with certain Juniper portfolio companies which own substantial oil-weighted producing assets and significant leasehold interests in the DJ and Powder River Basins (the “Transaction”) and integrating such assets into our operations
      • Continuing the Beta development program with six completions planned for 2025 including the C-48 and the A-45 which were deferred from the 2024 program
      • Expanding Magnify Energy Services, a wholly owned subsidiary of Amplify (“Magnify”), to enhance Amplify’s competitive advantage in operating our mature assets located in East Texas and Oklahoma
      • Creating incremental value in East Texas by monetizing portions of our portfolio and/or participating in joint development opportunities focused within the Haynesville formation
    • During the fourth quarter of 2024, the Company:
      • Achieved average total production of 18.5 MBoepd
      • Generated net cash provided by operating activities of $12.5 million and a net loss of $7.4 million
      • Delivered Adjusted EBITDA of $21.8 million and Adjusted Net Income of $5.1 million
      • Generated $2.9 million of free cash flow
      • Completed the sale of undeveloped Haynesville acreage in East Texas for $1.4 million
    • For full-year 2024, the Company:
      • Achieved average total production of 19.5 MBoepd
      • Generated net cash provided by operating activities of $51.3 million and net income of $12.9 million
      • Delivered Adjusted EBITDA of $103.0 million and Adjusted Net Income of $35.8 million
      • Generated $18.0 million of free cash flow
      • Renegotiated prior surety bonds and reduced sinking fund payments by approximately $7.0 million per year
      • Initiated development drilling program at Beta, with the completion of two wells, which outperformed type curves
      • Generated $3.1 million of Adjusted EBITDA at Magnify
      • Renegotiated the iodine contract in Oklahoma, increasing annual Adjusted EBITDA by $2.4 million
    • Amplify’s year-end 2024 total proved reserves, utilizing Securities and Exchange Commission (“SEC”) pricing of $75.48/Bbl for oil and NGLs and $2.13/MMBtu for natural gas, totaled 93 MMBoe and had a PV-10 value of approximately $736 million
    • As of December 31, 2024, Amplify had $127.0 million outstanding under the revolving credit facility
      • Net Debt to Last Twelve Months (“LTM”) Adjusted EBITDA of 1.2x1
         
      (1) Net debt as of December 31, 2024, consisting of $127 MM outstanding under its revolving credit facility with ~$0.0 MM of cash and cash equivalents, and LTM Adjusted EBITDA as of the fourth quarter of 2024.
         

    Martyn Willsher, Amplify’s President and Chief Executive Officer, commented, “In early 2024, we told stakeholders that 2024 had the potential to be a transformative year for the Company, and we believe that we delivered on that expectation throughout the year. The recently announced transaction with Juniper Capital expands our operations into the DJ and Powder River Basins, increases our scale, operating efficiency and margins, improves our inventory of attractive drilling locations, and provides us with a new core area for potential M&A activity. The transaction also resulted in a new long-term partnership with Juniper Capital, who have a long history of delivering substantial value to shareholders. At Beta, we safely and successfully initiated a drilling program, which has increased our confidence regarding the future inventory of the field and has enabled us to expand our development plans for this prolific asset in 2025 and beyond.”

    Mr. Willsher continued, “While we have focused our attention and resources on these two significant initiatives, our team has also delivered value to stockholders by pursuing opportunities to reduce operating expenses and maximize the value of our existing asset base. For example, Magnify Energy Services, our wholly owned subsidiary that provides oilfield services to Amplify-operated wells, expanded meaningfully in scope, realizing a significant increase in revenue and efficiency and reducing operating costs in East Texas and Oklahoma. We also renegotiated several existing contracts, like our iodine extraction contract, to receive improved economics. Although smaller in scope, these efforts have demonstrated management’s commitment to identifying areas to improve our operations and deliver value to stockholders. On the value maximizing front, we were able to monetize a portion of our acreage with Haynesville rights for several million dollars, while retaining an interest to realize upside value.”

    Mr. Willsher concluded, “We believe that our strategic and operational accomplishments in 2024 set the foundation for Amplify’s future and that in 2025 we will begin to capitalize on the growth potential of this significantly enhanced asset base.  By delivering on our 2025 strategic initiatives, we believe we can create immediate and long-term value for Amplify’s stockholders.”

    Juniper Capital Rocky Mountain Assets Update

    On January 15, 2025, Amplify announced that it has entered into a definitive merger agreement with privately held Juniper to combine with certain Juniper portfolio companies owning assets and leasehold interests in the DJ and Powder River Basins. Such portfolio companies are oil-weighted and include approximately 287,000 net acres. We expect to close the acquisition in the second quarter of 2025. Amplify has provided more information on the portfolio companies and their assets and the value potential of the Transaction in its latest investor presentation, available on its investor relations website.

    On March 4, 2025, a definitive proxy statement was filed providing additional details on the Transaction. A special meeting of stockholders, to be held virtually, has been scheduled for April 14, 2025, at 9:00 am Central Time, where stockholders of record as of March 3, 2025 can vote to approve the issuance of common stock, par value $0.01 per share (the “Common Stock”) (as described in more detail in the definitive proxy statement) in connection with the Transaction. In order to virtually attend, stockholders must register in advance at www.cesonlineservices.com/ampysm_vm prior to April 13, 2025 at 9:00 a.m. Central Time. More information can be found in the definitive proxy statement on the SEC’s website at www.sec.gov and the Company’s website, www.amplifyenergy.com, under the Investor Relations section. Upon approval from our stockholders of the issuance of Common Stock and the resulting closing of the Transaction, Amplify and Juniper are expected to own approximately 61% and 39%, respectively, of the combined company’s outstanding equity.

    In anticipation of closing, Amplify is currently working with Juniper and its portfolio companies on integrating the Juniper assets into the Amplify organization. Furthermore, the Company expects to refinance a substantial portion of its outstanding debt and approximately $133 million in principal amount of the portfolio companies’ outstanding debt prior to closing the Transaction. Amplify intends to update the market with developments of the Transaction as they progress.

    East Texas Haynesville Monetization Update

    Starting in 2024, several operators expressed increased interest in buying or partnering with Amplify on our East Texas Haynesville interests. In December 2024, Amplify monetized ninety percent (90%) of its interests in certain units with Haynesville rights in Panola and Shelby Counties, while retaining a ten percent (10%) working interest and the ability to participate in any well drilled within the boundary of such units. Upon closing, such transaction generated approximately $1.4 million in proceeds.

    In January 2025, Amplify completed a second transaction with a separate counterparty. Amplify sold ninety percent (90%) of its interest in certain units with Haynesville rights in Harrison County, Texas, in addition to 11 gross operated wells. This transaction also established an Area of Mutual Interest (“AMI”) with the counterparty covering 10,000 gross acres. Amplify retained a ten percent (10%) working interest in the units it divested and purchased a ten percent (10%) working interest in the counterparty’s acreage. Amplify generated net proceeds of $6.2 million from these transactions and estimates the AMI has more than 30 potential gross drilling locations.

    2024 Year-End Proved Reserve Update

    The Company’s estimated proved reserves at SEC pricing for year-end 2024 totaled 93.0 MMBoe, which consisted of 82.2 MMBoe of proved developed reserves and 10.8 MMBoe of proved undeveloped reserves. Proved developed reserves were lower year-over-year, primarily due to lower SEC pricing for oil and natural gas, which fell from $78.22 to $75.48 for oil and from $2.64 to $2.13 for natural gas, and the impact of 2024 production roll-off. Total proved reserves were comprised of 44% oil, 19% NGLs, and 37% natural gas.

    At year-end 2024, Amplify’s total proved reserves and proved developed reserves had PV-10 values of approximately $736 million and $507 million, respectively, using SEC pricing. Proved developed reserve value at Bairoil was lower than 2023 due to a combination of SEC pricing, production performance and higher operating cost assumptions due to significant increases in regulated electricity rates. Proved undeveloped reserves have increased materially as a result of the successful 2024 Beta development program, with the Company adding 23 additional locations and approximately $200 million in PV-10 value. The initial production rates for the two Beta wells brought on-line in 2024 exceeded the type-curves included in our year-end reserve report, and Amplify will consider increasing the type curve assumptions for Beta development wells after evaluating results from the 2025 development program. Detail on the Company’s reserves by asset is provided in the table below. Additionally, Amplify has provided more information on its Beta development program and the substantial value potential of the field in its latest investor presentation, available on its investor relations website.

      Estimated Net Reserves1
    Region MMBoe % Oil and NGL Proved Developed PV-10 Proved Undeveloped PV-10 Total Proved PV-10
          (in millions)
               
    Beta 19.1 100% $144 $214 $358
    Oklahoma 27.0 46% 138 – 138
    Bairoil 16.4 100% 118 – 118
    East Texas/ North Louisiana 28.0 30% 75 4 79
    Eagle Ford (Non-op) 2.5 90% 32 11 43
               
    Total 93.0 63% $507 $229 $736
    (1) Amplify’s year-end 2024 total proved reserves, utilizing SEC pricing of $75.48/Bbl for oil and NGLs and $2.13/MMBtu for natural gas.
       

    Amplify’s reserves estimates were prepared by its third-party independent reserve consultant, Cawley, Gillespie & Associates, Inc.

    Key Financial Results

    During the fourth quarter of 2024, the Company reported a net loss of approximately $7.4 million. The net loss was primarily attributable to a non-cash unrealized loss on commodity derivatives during the period. Excluding the impact of the non-cash unrealized loss on commodity derivatives in addition to other one-time impacts, Amplify generated Adjusted Net Income of $5.1 million in the fourth quarter of 2024.

    Fourth quarter Adjusted EBITDA was $21.8 million, a decrease of approximately $3.7 million from $25.5 million in the prior quarter. The decrease was primarily due to lower realized oil prices (net of hedges) in the fourth quarter compared to the prior quarter.

    Free cash flow was $2.9 million for the fourth quarter, a decrease of $0.7 million compared to the prior quarter. Amplify has now generated positive free cash flow in 18 of the last 19 fiscal quarters.

      Fourth Quarter Third Quarter
    $ in millions 2024   2024  
    Net income (loss)   ($7.4 )   $22.7  
    Net cash provided by operating activities   $12.5     $15.7  
    Average daily production (MBoe/d)   18.5     19.0  
    Total revenues excluding hedges   $69.0     $69.9  
    Adjusted EBITDA (a non-GAAP financial measure)   $21.8     $25.5  
    Adjusted net income (loss), (a non-GAAP financial measure)   $5.1     $9.8  
    Total capital   $15.3     $18.2  
    Free Cash Flow (a non-GAAP financial measure)   $2.9     $3.6  
         

    Revolving Credit Facility

    As of December 31, 2024, Amplify had $127.0 million outstanding under its revolving credit facility, and net debt to LTM Adjusted EBITDA was 1.2x (net debt as of December 31, 2024 and 4Q24 LTM Adjusted EBITDA). Fourth quarter net debt increased from the prior quarter due to expected changes in working capital and increased development activity, primarily at Beta.

    Corporate Production and Pricing

    During the fourth quarter of 2024, average daily production was approximately 18.5 Mboepd, a decrease of 0.5 Mboepd from the prior quarter. The decrease in production was driven by gas volumes, which were impacted by gas plant realizations in East Texas. Our oil volumes, although slightly higher compared to the prior quarter, were impacted by platform shutdowns following the completion of the emission reduction and electrification facility projects and several unexpected well failures and subsequent interventions at Beta. With the successful completion of the electrification and emissions reduction project in the fourth quarter 2024 and the intervention projects completed by end of January 2025, we are projecting Beta production to be significantly higher than the fourth quarter, before the impact of the 2025 drilling program. As of March 2, 2025, current 7-day average production rates at Beta were 4,834 gross Bopd (3,635 net Bopd), representing an approximate 9% increase from fourth quarter 2024 volumes, with minimal contribution from the recently completed C48 well, which we continue to draw down since completing in mid-February.

    The Company’s product mix for the quarter was 45% crude oil, 17% NGLs, and 38% natural gas.

      Three Months   Three Months
      Ended   Ended
      December 31, 2024   September 30, 2024
           
    Production volumes – MBOE:      
    Bairoil   293       294  
    Beta   308       304  
    Oklahoma   436       454  
    East Texas / North Louisiana   609       638  
    Eagle Ford (Non-op)   60       62  
    Total – MBoe   1,706       1,752  
    Total – MBoe/d   18.5       19.0  
    % – Liquids   62 %     60 %
           

    Total oil, natural gas and NGL revenues for the fourth quarter of 2024 were approximately $67.2 million, before the impact of derivatives. The Company realized a net gain on commodity derivatives of $4.1 million during the fourth quarter. Oil, natural gas and NGL revenues, net of realized hedges, decreased $3.3 million for the fourth quarter compared to the prior quarter.

    The following table sets forth information regarding average realized sales prices for the periods indicated:

      Crude Oil ($/Bbl) NGLs ($/Bbl) Natural Gas ($/Mcf)
                           
      Three Months Ended December 31, 2024   Three Months Ended September 30, 2024   Three Months Ended December 31, 2024   Three Months Ended September 30, 2024   Three Months Ended December 31, 2024   Three Months Ended September 30, 2024
                           
    Average sales price exclusive of realized derivatives and certain deductions from revenue $ 66.82     $ 71.74     $ 23.46     $ 21.63     $ 2.52     $ 1.84  
    Realized derivatives   1.43       (0.24 )     –       –       0.76       1.38  
                           
    Average sales price with realized derivatives exclusive of certain deductions from revenue $ 68.25     $ 71.50     $ 23.46     $ 21.63     $ 3.28     $ 3.22  
    Certain deductions from revenue   –       –       (1.37 )     (1.33 )     (0.01 )     0.00  
                           
    Average sales price inclusive of realized derivatives and certain deductions from revenue $ 68.25     $ 71.50     $ 22.09     $ 20.30     $ 3.27     $ 3.22  
                           

    Costs and Expenses

    Lease operating expenses in the fourth quarter of 2024 were approximately $35.1 million, or $20.57 per Boe, a $1.8 million increase compared to the prior quarter. Due to increased well failures in the fourth quarter, Beta lease operating costs were higher compared to the prior quarter. Lease operating expenses do not reflect $0.9 million of income generated by Magnify in the fourth quarter.

    Severance and ad valorem taxes in the fourth quarter were approximately $5.4 million, a decrease of $0.6 million compared to $6.0 million in the prior quarter, and in line with expectations. Severance and ad valorem taxes as a percentage of revenue were approximately 8.0% in the fourth quarter.

    Amplify incurred $4.5 million, or $2.62 per Boe, of gathering, processing and transportation expenses in the fourth quarter, compared to $4.3 million, or $2.45 per Boe, in the prior quarter.

    Cash G&A expenses in the fourth quarter were $6.3 million, an increase of $0.1 million compared to the prior quarter and in-line with expectations.

    Depreciation, depletion and amortization expense in the fourth quarter totaled $8.4 million, or $4.93 per Boe, compared to $8.1 million, or $4.62 per Boe, in the prior quarter.

    Net interest expense was $3.7 million in the fourth quarter, a decrease of $0.1 million compared to $3.8 million in the prior quarter.

    Amplify recorded a current income tax benefit of $2.1 million in the fourth quarter.

    Fourth Quarter and Full-Year Capital Investments

    Cash capital investment during the fourth quarter of 2024 was approximately $15.3 million. During the fourth quarter, the Company’s capital allocation was approximately 65% for Beta development drilling and facility projects, with the remainder distributed across the Company’s other assets.

    The following table details Amplify’s capital invested during the fourth quarter of 2024:

      Fourth Quarter   Full-Year
      2024 Capital   2024 Capital
      ($ MM)   ($ MM)
    Bairoil $ 0.2     $ 2.9  
    Beta $ 10.0     $ 53.7  
    Oklahoma $ 0.1     $ 3.2  
    East Texas / North Louisiana $ 2.8     $ 5.6  
    Eagle Ford (Non-op) $ 2.1     $ 4.1  
    Magnify Energy Services $ 0.1     $ 1.1  
    Total Capital Invested $ 15.3     $ 70.6  
           

    2025 Operations & Development Plan

    The following table details Amplify’s 2025 projected capital investments of $70 – $80 million:

    Capital Investment by Type (% of Total):  
    Beta Development 41 %
    Beta Facility 16 %
    Workovers & Other Facilities 25 %
    Non-op Development 18 %
    Total Capital Investments: 100 %
         

    Amplify’s 2025 operations and development plan is designed to continue unlocking the underlying value of the Company’s assets. To achieve this goal, we intend to 1) continue our development program at Beta, 2) execute on low-cost, high-return workover projects, and 3) reduce operating costs by increasing activity at Magnify.

    At Beta, Amplify intends to complete six wells in 2025. The C48 well, the first of the six wells to be completed in 2025, was drilled in the fourth quarter of 2024 and completed in mid-February. Similar to the A50 and C59 wells drilled in 2024, the completion of the C48 well was initially designed to target the D-sand. However, drilling conditions encountered in the D-sand and the quality of the C-Sand observed while drilling through the formation, led the team to alter the completion design and target the C-sand instead. The C48 will be the first test of the horizontal potential of the C-sand and we will share the results of the C48 well after obtaining sufficient initial production data.

    In 2024 Amplify brought online two new wells at Beta, the A50 well (brought online in June) and the C59 well (brought online in October), both of which exceeded internal projections and increased Beta’s overall production approximately 15% in January 2025 compared to January of 2024. Similarly, the six Beta completions planned in 2025 are expected to significantly increase Amplify’s oil production year-over-year. Additional information regarding the Beta development plan can be found in the investor presentation on the Company’s investor relations website.

    In addition to drilling and completing the six wells, Amplify intends to make continued investments in Beta’s facilities. In 2025, the Company expects to invest approximately $8 million to upgrade a 2-mile pipeline that ships all produced fluid from platform Eureka to platform Elly.

    At Bairoil, we continue to focus on enhancing water-alternating-gas injection performance through targeted well recompletions and conversions, which helps offset the asset’s nominal production declines. Our plan also includes an investment at our CO2 gas plant intended to reduce overall power usage and lease operating expenses in the second half of 2025.

    Amplify’s operating strategy in Oklahoma remains focused on prioritizing a stable free cash flow profile by managing production through an active workover program, artificial lift enhancements, extending well run-times and continuing to reduce operating costs.

    In East Texas, we are participating in the completion of four non-operated development projects, which we expect to be online by mid-year. The Company also continues to focus on prudent management of the field, such as optimizing field compression, artificial lift enhancement, and equipment insourcing, which is expected to improve the production profile and lower lease operating costs.

    In late 2023, we formed Magnify to in-source specific oilfield services to improve service reliability and to reduce overall operating expenses for the Company. Since its inception, Magnify has generated $3.7 million of Adjusted EBITDA with a capital investment of only $1.7 million. In 2025, we expect to invest an additional $1.4 million of capital in Magnify and project 2025 Adjusted EBITDA of approximately $5 million (with an annualized run rate of $6 million by year-end). We are evaluating additional accretive services for Magnify to service Amplify operated assets.

    In the Eagle Ford, we are participating in 14 gross (0.7 net) new development wells and two gross (0.4 net) recompletion projects. These non-operated wells, with highly accretive returns, are currently scheduled to be completed in the first half of 2025.

    Full-Year 2025 Guidance

    The following standalone guidance is subject to the cautionary statements and limitations described under the “Forward-Looking Statements” caption at the end of this press release. Amplify’s 2025 guidance is based on its current expectations regarding capital investment levels and flat commodity prices for crude oil of $71/Bbl (WTI) and natural gas of $3.75/MMBtu (Henry Hub), and on the assumption that market demand and prices for oil and natural gas will continue at levels that allow for economic production of these products. Additionally, the Company expects to invest approximately 90% of its capital in the first three quarters of the year primarily in connection with the Beta development program. Upon closing of the Transaction with Juniper, the Company will provide updated guidance to include the acquired assets.

    A summary of the standalone guidance is presented below:

      FY 2025E
           
      Low   High
           
    Net Average Daily Production      
    Oil (MBbls/d) 8.5 – 9.4
    NGL (MBbls/d) 3.0 – 3.3
    Natural Gas (MMcf/d) 45.0 – 51.0
    Total (MBoe/d) 19.0 – 21.0
           
    Commodity Price Differential / Realizations (Unhedged)      
    Oil Differential ($ / Bbl) ($3.25) – ($4.25)
    NGL Realized Price (% of WTI NYMEX) 27% – 31%
    Natural Gas Realized Price (% of Henry Hub) 85% – 92%
           
    Other Revenue      
    Magnify Energy Services ($ MM) $4 – $6
    Other ($ MM) $2 – $3
    Total ($ MM) $6 – $9
           
    Gathering, Processing and Transportation Costs      
    Oil ($ / Bbl) $0.65 – $0.85
    NGL ($ / Bbl) $2.75 – $4.00
    Natural Gas ($ / Mcf) $0.55 – $0.75
    Total ($ / Boe) $2.25 – $2.85
           
    Average Costs      
    Lease Operating ($ / Boe) $18.50 – $20.50
    Taxes (% of Revenue) (1) 6.0% – 7.0%
    Cash General and Administrative ($ / Boe) (2)(3) $3.40 – $3.90
           
    Adjusted EBITDA ($ MM) (2)(3) $100 – $120
    Cash Interest Expense ($ MM) $12 – $18
    Capital Expenditures ($ MM) $70 – $80
    Free Cash Flow ($ MM) (2)(3) $10 – $30
           
    (1) Includes production, ad valorem and franchise taxes
    (2) Refer to “Use of Non-GAAP Financial Measures” for Amplify’s definition and use of Cash G&A, Adjusted EBITDA and free cash flow, non-GAAP measures (cash income taxes, which are not included in free cash flow, are expected to range between $0 – $2 million for the year)
    (3) Amplify believes that a quantitative reconciliation of such forward-looking information to the most comparable financial measure calculated and presented in accordance with GAAP cannot be made available without unreasonable efforts. A reconciliation of these non-GAAP financial measures would require Amplify to predict the timing and likelihood of future transactions and other items that are difficult to accurately predict. Neither of these forward-looking measures, nor their probable significance, can be quantified with a reasonable degree of accuracy. Accordingly, a reconciliation of the most directly comparable forward-looking GAAP measures is not provided.
     

    Hedging

    Recently, the Company took advantage of volatility in the futures market to add to its hedge position, further protecting future cash flows. Amplify executed crude oil swaps covering the second half of 2025 through year-end 2026 at a weighted average price of $68.10. The Company also added natural gas collars for a portion of 2027 with a weighted average floor of $3.63 per MMBtu and a weighted average ceiling of $3.98 per MMBtu.

    The following table reflects the hedged volumes under Amplify’s commodity derivative contracts and the average fixed floor and ceiling prices at which production is hedged for January 2025 through December 2027, as of March 4, 2025:

        2025       2026       2027  
               
    Natural Gas Swaps:          
    Average Monthly Volume (MMBtu)   585,000       500,000       87,500  
    Weighted Average Fixed Price ($) $ 3.75     $ 3.79     $ 3.76  
               
    Natural Gas Collars:          
    Two-way collars          
    Average Monthly Volume (MMBtu)   500,000       500,000       87,500  
    Weighted Average Ceiling Price ($) $ 3.90     $ 4.06     $ 4.20  
    Weighted Average Floor Price ($) $ 3.50     $ 3.55     $ 3.50  
               
    Oil Swaps:          
    Average Monthly Volume (Bbls)   128,583       72,750      
    Weighted Average Fixed Price ($) $ 70.85     $ 69.19      
               
    Oil Collars:          
    Two-way collars          
    Average Monthly Volume (Bbls)   59,500          
    Weighted Average Ceiling Price ($) $ 80.20          
    Weighted Average Floor Price ($) $ 70.00          
               

    Amplify has posted an updated investor presentation containing additional hedging information on its website, www.amplifyenergy.com, under the Investor Relations section.

    Annual Report on Form 10-K

    Amplify’s financial statements and related footnotes will be available in its Annual Report on Form 10-K for the year ended December 31, 2024, which Amplify expects to file with the SEC on March 5, 2025.

    About Amplify Energy

    Amplify Energy Corp. is an independent oil and natural gas company engaged in the acquisition, development, exploitation and production of oil and natural gas properties. Amplify’s operations are focused in Oklahoma, the Rockies (Bairoil), federal waters offshore Southern California (Beta), East Texas / North Louisiana, and the Eagle Ford (Non-op). For more information, visit www.amplifyenergy.com.

    Conference Call

    Amplify will host an investor teleconference tomorrow at 10 a.m. Central Time to discuss these operating and financial results. Interested parties may join the call by dialing (888) 999-5318 at least 15 minutes before the call begins and providing the Conference ID: AEC4Q24. A telephonic replay will be available for fourteen days following the call by dialing (800) 654-1563 and providing the Access Code: 71724906. A transcript and a recorded replay of the call will also be available on our website after the call.

    Forward-Looking Statements

    This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact, included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. Terminology such as “may,” “will,” “would,” “should,” “expect,” “plan,” “project,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “pursue,” “target,” “outlook,” “continue,” the negative of such terms or other comparable terminology are intended to identify forward-looking statements. These statements include, but are not limited to, statements about the Company’s expectations of plans, goals, strategies (including measures to implement strategies), objectives and anticipated results with respect thereto. These statements address activities, events or developments that we expect or anticipate will or may occur in the future, including things such as projections of results of operations, plans for growth, goals, future capital expenditures, competitive strengths, references to future intentions and other such references. These forward-looking statements involve risks and uncertainties and other factors that could cause the Company’s actual results or financial condition to differ materially from those expressed or implied by forward-looking statements. These include risks and uncertainties relating to, among other things: the Company’s ability to successfully complete the proposed business combination between the Company and certain of Juniper’s portfolio companies, or the “Mergers”; the Company’s evaluation and implementation of strategic alternatives; risks related to the redetermination of the borrowing base under the Company’s revolving credit facility; the Company’s ability to satisfy debt obligations; the Company’s need to make accretive acquisitions or substantial capital expenditures to maintain its declining asset base, including the existence of unanticipated liabilities or problems relating to acquired or divested business or properties; volatility in the prices for oil, natural gas and NGLs; the Company’s ability to access funds on acceptable terms, if at all, because of the terms and conditions governing the Company’s indebtedness, including financial covenants; general political and economic conditions, globally and in the jurisdictions in which we operate, including the Russian invasion of Ukraine, and ongoing conflicts in the Middle East, and the potential destabilizing effect such conflicts may pose for the global oil and natural gas markets; expectations regarding general economic conditions, including inflation; and the impact of local, state and federal governmental regulations, including those related to climate change and hydraulic fracturing, and the current administration’s potential reversal thereof. Please read the Company’s filings with the SEC, including “Risk Factors” in the Company’s Annual Report on Form 10-K, and if applicable, the Company’s Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, which are available on the Company’s Investor Relations website at https://www.amplifyenergy.com/investor-relations/sec-filings/default.aspx or on the SEC’s website at http://www.sec.gov, for a discussion of risks and uncertainties that could cause actual results to differ from those in such forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. All forward-looking statements in this press release are qualified in their entirety by these cautionary statements. Except as required by law, the Company undertakes no obligation and does not intend to update or revise any forward-looking statements, whether as a result of new information, future results or otherwise.

    No Offer or Solicitation

    A portion of this press release relates to a proposed business combination transaction between the Company and certain Juniper portfolio companies. This communication is for informational purposes only and does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval, in any jurisdiction, pursuant to the proposed business combination transaction or otherwise, nor shall there be any sale, issuance, exchange or transfer of the securities referred to in this document in any jurisdiction in contravention of applicable law. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

    Important Additional Information Regarding the Mergers Will Be Filed With the SEC

    In connection with the proposed transaction, the Company has filed a definitive proxy statement. The definitive proxy statement will be sent to the stockholders of the Company. The Company may also file other documents with the SEC regarding the proposed transaction. INVESTORS AND SECURITY HOLDERS OF AMPLIFY ARE ADVISED TO CAREFULLY READ THE DEFINITIVE PROXY STATEMENT AND ANY OTHER RELEVANT MATERIALS FILED WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE MERGERS, THE PARTIES TO THE MERGERS AND THE RISKS ASSOCIATED WITH THE MERGERS. Investors and security holders may obtain a free copy of the definitive proxy statement and other relevant documents filed by Amplify with the SEC from the SEC’s website at www.sec.gov. Security holders and other interested parties will also be able to obtain, without charge, a copy of the definitive proxy statement and other relevant documents (when available) by (1) directing your written request to: 500 Dallas Street, Suite 1700, Houston, Texas or (2) contacting our Investor Relations department by telephone at (832) 219-9044 or (832) 219-9051. Copies of the documents filed by the Company with the SEC will be available free of charge on the Company’s website at http://www.amplifyenergy.com.

    Participants in the Solicitation

    Amplify and certain of its respective directors, executive officers and employees may be considered participants in the solicitation of proxies in connection with the proposed transaction. Information regarding the persons who may, under the rules of the SEC, be deemed participants in the solicitation of the stockholders of Amplify in connection with the proposed transaction, including a description of their respective direct or indirect interests, by security holdings or otherwise, is included in the definitive proxy statement filed with the SEC. Additional information regarding the Company’s directors and executive officers is also included in Amplify’s Notice of Annual Meeting of Stockholders and 2024 Proxy Statement, which was filed with the SEC on April 5, 2024. These documents are available free of charge as described above.

    Use of Non-GAAP Financial Measures

    This press release and accompanying schedules include the non-GAAP financial measures of Adjusted EBITDA, Adjusted net income, free cash flow, net debt, PV-10 and cash G&A. The accompanying schedules provide a reconciliation of these non-GAAP financial measures to their most directly comparable financial measures calculated and presented in accordance with GAAP. Amplify’s non-GAAP financial measures should not be considered as alternatives to GAAP measures such as net income, operating income, net cash flows provided by operating activities, standardized measure of discounted future net cash flows, or any other measure of financial performance calculated and presented in accordance with GAAP. Amplify’s non-GAAP financial measures may not be comparable to similarly titled measures of other companies because they may not calculate such measures in the same manner as Amplify does.

    Adjusted EBITDA. Amplify defines Adjusted EBITDA as net income (loss) plus Interest expense; Income tax expense (benefit); DD&A; Impairment of goodwill and long-lived assets (including oil and natural gas properties); Accretion of AROs; Loss or (gain) on commodity derivative instruments; Cash settlements received or (paid) on expired commodity derivative instruments; Amortization of gain associated with terminated commodity derivatives; Losses or (gains) on sale of assets and other, net; Share-based compensation expenses; Exploration costs; Acquisition and divestiture related expenses; Reorganization items, net; Severance payments; and Other non-routine items that we deem appropriate. Adjusted EBITDA is commonly used as a supplemental financial measure by management and external users of Amplify’s financial statements, such as investors, research analysts and rating agencies, to assess: (1) its operating performance as compared to other companies in Amplify’s industry without regard to financing methods, capital structures or historical cost basis; (2) the ability of its assets to generate cash sufficient to pay interest and support Amplify’s indebtedness; and (3) the viability of projects and the overall rates of return on alternative investment opportunities. Since Adjusted EBITDA excludes some, but not all, items that affect net income or loss and because these measures may vary among other companies, the Adjusted EBITDA data presented in this press release may not be comparable to similarly titled measures of other companies. The GAAP measures most directly comparable to Adjusted EBITDA are net income and net cash provided by operating activities.

    Adjusted Net Income. Amplify defines Adjusted Net Income as net income (loss) adjusted for loss (gain) on commodity derivative instruments, acquisition & divestiture related expenses, unusual and infrequent items, and the income tax expense or benefit of these adjustments using our federal statutory tax rate. Adjusted Net Income (Loss) excludes the impact of unusual and infrequent items affecting earnings that vary widely and unpredictably, including derivative gains and losses. This measure is not meant to disassociate these items from management’s performance but rather is intended to provide helpful information to investors interested in comparing our performance between periods. Adjusted net income (loss) is not considered to be an alternative to net income (loss) reported in accordance with GAAP.

    Free cash flow. Amplify defines free cash flow as Adjusted EBITDA, less cash interest expense and capital expenditures. Free cash flow is an important non-GAAP financial measure for Amplify’s investors since it serves as an indicator of the Company’s success in providing a cash return on investment. The GAAP measures most directly comparable to free cash flow are net income and net cash provided by operating activities.

    Net debt. Amplify defines net debt as the total principal amount drawn on the revolving credit facility less cash and cash equivalents. The Company uses net debt as a measure of financial position and believes this measure provides useful additional information to investors to evaluate the Company’s capital structure and financial leverage.

    PV-10. PV-10 is a non-GAAP financial measure that represents the present value of estimated future cash inflows from proved oil and natural gas reserves that are calculated using the unweighted arithmetic average first-day-of-the-month prices for the prior 12 months, less future development and operating costs, discounted at 10% per annum to reflect the timing of future cash flows. The most directly comparable GAAP measure to PV-10 is standardized measure. PV-10 differs from standardized measure in its treatment of estimated future income taxes, which are excluded from PV-10. Amplify believes the presentation of PV-10 provides useful information because it is widely used by investors in evaluating oil and natural gas companies without regard to specific income tax characteristics of such entities. PV-10 is not intended to represent the current market value of our estimated proved reserves. PV-10 should not be considered in isolation or as a substitute for the standardized measure as defined under GAAP.

    Cash G&A. Amplify defines cash G&A as general and administrative expense, less share-based compensation expense; acquisition and divestiture costs; bad debt expense; and severance payments. Cash G&A is an important non-GAAP financial measure for Amplify’s investors since it allows for analysis of G&A spend without regard to share-based compensation and other non-recurring expenses which can vary substantially from company to company. The GAAP measures most directly comparable to cash G&A is total G&A expenses.

    Contacts

    Jim Frew — Senior Vice President and Chief Financial Officer
    (832) 219-9044
    jim.frew@amplifyenergy.com

    Michael Jordan — Director, Finance and Treasurer
    (832) 219-9051
    michael.jordan@amplifyenergy.com


    Selected Operating and Financial Data (Tables)

    Amplify Energy Corp.
    Selected Financial Data – Unaudited
    Statements of Operations Data
           
      Three Months   Three Months
      Ended   Ended
    (Amounts in $000s, except per share data) December 31, 2024   September 30, 2024
           
    Revenues:      
    Oil and natural gas sales $ 67,189     $ 68,135  
    Other revenues   1,832       1,723  
    Total revenues   69,021       69,858  
           
    Costs and Expenses:      
    Lease operating expense   35,100       33,255  
    Pipeline incident loss   2,405       247  
    Gathering, processing and transportation   4,468       4,290  
    Exploration   10       –  
    Taxes other than income   5,356       5,997  
    Depreciation, depletion and amortization   8,418       8,102  
    General and administrative expense   9,486       8,251  
    Accretion of asset retirement obligations   2,156       2,125  
    Realized (gain) loss on commodity derivatives   (4,052 )     (6,375 )
    Unrealized (gain) loss on commodity derivatives   13,357       (18,672 )
    (Gain) loss on sale of properties   (1,367 )     –  
    Other, net   334       38  
    Total costs and expenses   75,671       37,258  
           
    Operating Income (loss)   (6,650 )     32,600  
           
    Other Income (Expense):      
    Interest expense, net   (3,684 )     (3,756 )
    Other income (expense)   (113 )     (130 )
    Total other income (expense)   (3,797 )     (3,886 )
           
    Income (loss) before reorganization items, net and income taxes   (10,447 )     28,714  
           
    Income tax benefit (expense) – current   2,132       (412 )
    Income tax benefit (expense) – deferred   886       (5,650 )
           
    Net income (loss) $ (7,429 )   $ 22,652  
           
    Earnings per share:      
    Basic and diluted earnings (loss) per share $ (0.19 )   $ 0.54  
           
    Selected Financial Data – Unaudited      
    Operating Statistics      
           
      Three Months   Three Months
      Ended   Ended
    (Amounts in $000s, except per unit data) December 31, 2024   September 30, 2024
           
    Oil and natural gas revenue:      
    Oil Sales $ 50,817     $ 54,353  
    NGL Sales   6,602       6,096  
    Natural Gas Sales   9,770       7,686  
    Total oil and natural gas sales – Unhedged $ 67,189     $ 68,135  
           
    Production volumes:      
    Oil Sales – MBbls   760       758  
    NGL Sales – MBbls   299       301  
    Natural Gas Sales – MMcf   3,883       4,165  
    Total – MBoe   1,706       1,752  
    Total – MBoe/d   18.5       19.0  
           
    Average sales price (excluding commodity derivatives):      
    Oil – per Bbl $ 66.82     $ 71.74  
    NGL – per Bbl $ 22.09     $ 20.29  
    Natural gas – per Mcf $ 2.52     $ 1.85  
    Total – per Boe $ 39.37     $ 38.88  
           
    Average unit costs per Boe:      
    Lease operating expense $ 20.57     $ 18.98  
    Gathering, processing and transportation $ 2.62     $ 2.45  
    Taxes other than income $ 3.14     $ 3.42  
    General and administrative expense $ 5.56     $ 4.71  
    Realized gain/(loss) on commodity derivatives $ 2.38     $ 3.64  
    Depletion, depreciation, and amortization $ 4.93     $ 4.62  
           
    Selected Financial Data – Unaudited      
    Asset Operating Statistics      
           
      Three Months   Three Months
      Ended   Ended
      December 31, 2024   September 30, 2024
           
    Production volumes – MBOE:      
    Bairoil   293       294  
    Beta   308       304  
    Oklahoma   436       454  
    East Texas / North Louisiana   609       638  
    Eagle Ford (Non-op)   60       62  
    Total – MBoe   1,706       1,752  
    Total – MBoe/d   18.5       19.0  
    % – Liquids   62 %     60 %
           
    Lease operating expense – $M:      
    Bairoil $ 11,800     $ 13,164  
    Beta   12,113       9,520  
    Oklahoma   3,948       3,644  
    East Texas / North Louisiana   5,887       5,592  
    Eagle Ford (Non-op)   1,351       1,335  
    Total Lease operating expense: $ 35,099     $ 33,255  
           
    Capital expenditures – $M:      
    Bairoil $ 190     $ 1,224  
    Beta   10,001       12,047  
    Oklahoma   168       1,449  
    East Texas / North Louisiana   2,758       2,303  
    Eagle Ford (Non-op)   2,125       1,157  
    Magnify Energy Services   82       44  
    Total Capital expenditures: $ 15,324     $ 18,224  
           
    Selected Financial Data – Unaudited              
    Balance Sheet Data              
                   
    (Amounts in $000s) December 31, 2024   September 30, 2024
                   
    Assets              
    Cash and Cash Equivalents $ –     $ –  
    Accounts Receivable   39,713       32,295  
    Other Current Assets   32,064       37,862  
    Total Current Assets $ 71,777     $ 70,157  
                   
    Net Oil and Gas Properties $ 386,218     $ 378,871  
    Other Long-Term Assets   289,081       290,188  
    Total Assets $ 747,076     $ 739,216  
                   
    Liabilities              
    Accounts Payable $ 13,231     $ 18,107  
    Accrued Liabilities   43,413       36,699  
    Other Current Liabilities   11,494       11,362  
    Total Current Liabilities $ 68,138     $ 66,168  
                   
    Long-Term Debt $ 127,000     $ 120,000  
    Asset Retirement Obligation   129,700       127,556  
    Other Long-Term Liabilities   13,326       10,822  
    Total Liabilities $ 338,164     $ 324,546  
                   
    Shareholders’ Equity              
    Common Stock & APIC $ 440,380     $ 438,709  
    Accumulated Earnings (Deficit)   (31,468 )     (24,039 )
    Total Shareholders’ Equity $ 408,912     $ 414,670  
                   
    Selected Financial Data – Unaudited      
    Statements of Cash Flows Data      
           
      Three Months   Three Months
      Ended   Ended
    (Amounts in $000s) December 31, 2024   September 30, 2024
           
           
    Net cash provided by (used in) operating activities $ 12,455     $ 15,737  
    Net cash provided by (used in) investing activities   (19,379 )     (18,078 )
    Net cash provided by (used in) financing activities   6,924       1,839  
           
    Selected Operating and Financial Data (Tables)
    Reconciliation of Unaudited GAAP Financial Measures to Non-GAAP Financial Measures
    Adjusted EBITDA and Free Cash Flow
           
      Three Months   Three Months
      Ended   Ended
    (Amounts in $000s) December 31, 2024   September 30, 2024
           
    Reconciliation of Adjusted EBITDA to Net Cash Provided from Operating Activities:    
    Net cash provided by operating activities $ 12,455     $ 15,737  
    Changes in working capital   4,770       5,937  
    Interest expense, net   3,684       3,756  
    Cash settlements received on terminated commodity derivatives   –       (793 )
    Amortization of gain associated with terminated commodity derivatives   159       –  
    Amortization and write-off of deferred financing fees   (315 )     (310 )
    Exploration costs   10       –  
    Acquisition and divestiture related costs   1,424       186  
    Plugging and abandonment cost   754       372  
    Current income tax expense (benefit)   (2,132 )     412  
    Pipeline incident loss   2,405       247  
    (Gain) loss on sale of properties   (1,367 )     –  
    Adjusted EBITDA: $ 21,847     $ 25,544  
           
    Reconciliation of Free Cash Flow to Net Cash Provided from Operating Activities:    
    Adjusted EBITDA: $ 21,847     $ 25,544  
    Less: Cash interest expense   3,598       3,721  
    Less: Capital expenditures   15,324       18,224  
    Free Cash Flow: $ 2,925     $ 3,599  
           
    Selected Operating and Financial Data (Tables)
    Reconciliation of Unaudited GAAP Financial Measures to Non-GAAP Financial Measures
    Adjusted EBITDA and Free Cash Flow
           
           
      Twelve Months   Twelve Months
      Ended   Ended
    (Amounts in $000s, except per share data) December 31, 2024   December 31, 2023
           
    Reconciliation of Adjusted EBITDA1to Net Cash Provided from Operating Activities:    
    Net cash provided by operating activities $ 51,293     $ 141,590  
    Changes in working capital   32,272       (8,517 )
    Interest expense, net   14,599       17,719  
    Cash settlements received on terminated commodity derivatives   (793 )     (658 )
    Amortization of gain associated with terminated commodity derivatives   159       658  
    Amortization and write-off of deferred financing fees   (1,233 )     (1,980 )
    Exploration costs   61       57  
    Acquisition and divestiture related costs   1,633       219  
    Plugging and abandonment cost   1,640       2,239  
    Current income tax expense (benefit)   232       4,817  
    Pipeline incident loss   3,859       19,981  
    (Gain) loss on sale of properties   (1,367 )     –  
    LOPI – timing differences   –       (4,636 )
    Litigation settlement   –       (84,875 )
    Other   686       1,418  
    Adjusted EBITDA: $ 103,041     $ 88,032  
           
    Reconciliation of Free Cash Flow to Net Cash Provided from Operating Activities:    
    Adjusted EBITDA1: $ 103,041     $ 88,032  
    Less: Cash interest expense   14,438       16,263  
    Less: Capital expenditures   70,644       33,744  
    Free Cash Flow: $ 17,959     $ 38,025  
      (1) Adjusted EBITDA includes a revenue suspense release of $8.4 million for the twelve months ended December 31, 2024. See “Revenue Payables in Suspense” table for additional information.
         
    Selected Operating and Financial Data (Tables)
    Reconciliation of Unaudited GAAP Financial Measures to Non-GAAP Financial Measures
    Adjusted EBITDA1 and Free Cash Flow
           
      Three Months   Three Months
      Ended   Ended
    (Amounts in $000s) December 31, 2024   September 30, 2024
           
    Reconciliation of Adjusted EBITDA to Net Income (Loss):      
    Net income (loss) $ (7,429 )   $ 22,652  
    Interest expense, net   3,684       3,756  
    Income tax expense (benefit) – current   (2,132 )     412  
    Income tax expense (benefit) – deferred   (886 )     5,650  
    Depreciation, depletion and amortization   8,418       8,102  
    Accretion of asset retirement obligations   2,156       2,125  
    (Gains) losses on commodity derivatives   9,305       (25,047 )
    Cash settlements received (paid) on expired commodity derivative instruments   4,052       5,582  
    Amortization of gain associated with terminated commodity derivatives   159       –  
    Acquisition and divestiture related costs   1,424       186  
    Share-based compensation expense   1,686       1,815  
    (Gain) loss on sale of properties   (1,367 )     –  
    Exploration costs   10       –  
    Loss on settlement of AROs   334       38  
    Bad debt expense   28       26  
    Pipeline incident loss   2,405       247  
    Adjusted EBITDA1: $ 21,847     $ 25,544  
           
    Reconciliation of Free Cash Flow to Net Income (Loss):      
    Adjusted EBITDA: $ 21,847     $ 25,544  
    Less: Cash interest expense   3,598       3,721  
    Less: Capital expenditures   15,324       18,224  
    Free Cash Flow: $ 2,925     $ 3,599  
           
    Selected Operating and Financial Data (Tables)
    Reconciliation of Unaudited GAAP Financial Measures to Non-GAAP Financial Measures
    Adjusted EBITDA and Free Cash Flow
           
           
      Twelve Months   Twelve Months
      Ended   Ended
    (Amounts in $000s, except per share data) December 31, 2024   December 31, 2023
           
           
    Reconciliation of Adjusted EBITDA1to Net Income (Loss):      
    Net income (loss) $ 12,946     $ 392,750  
    Interest expense, net   14,599       17,719  
    Income tax expense (benefit) – current   232       4,817  
    Income tax expense (benefit) – deferred   2,196       (253,796 )
    Depreciation, depletion and amortization   32,586       28,004  
    Accretion of asset retirement obligations   8,438       7,951  
    (Gains) losses on commodity derivatives   2,047       (40,343 )
    Cash settlements received (paid) on expired commodity derivative instruments   17,617       (8,273 )
    Amortization of gain associated with terminated commodity derivatives   159       658  
    Acquisition and divestiture related costs   1,633       219  
    Share-based compensation expense   6,799       5,280  
    (Gain) loss on sale of properties   (1,367 )     –  
    Exploration costs   61       57  
    Loss on settlement of AROs   470       1,003  
    Bad debt expense   80       98  
    Pipeline incident loss   3,859       19,981  
    LOPI – timing differences   –       (4,636 )
    Litigation settlement   –       (84,875 )
    Other   686       1,418  
    Adjusted EBITDA: $ 103,041     $ 88,032  
           
    Reconciliation of Free Cash Flow to Net Income (Loss):      
    Adjusted EBITDA1: $ 103,041     $ 88,032  
    Less: Cash interest expense   14,438       16,263  
    Less: Capital expenditures   70,644       33,744  
    Free Cash Flow: $ 17,959     $ 38,025  
      (1) Adjusted EBITDA includes a revenue suspense release of $8.4 million for the twelve months ended December 31, 2024. See “Revenue Payables in Suspense” table for additional information.
         
    Selected Operating and Financial Data (Tables)
    Reconciliation of Unaudited GAAP Financial Measures to Non-GAAP Financial Measures
    Net Income (Loss) to Adjusted Net Income (Loss)
           
      Three Months   Three Months
      Ended   Ended
    (Amounts in $000s, except per share data) December 31, 2024   September 30, 2024
           
    Reconciliation of Adjusted Net Income (Loss):      
    Net income (loss) $ (7,429 )   $ 22,652  
    Unrealized (gain) loss on commodity derivatives   13,357       (18,672 )
    Acquisition and divestiture related costs   1,424       186  
    Non-recurring costs:      
    Income tax expense (benefit) – deferred   (886 )     5,650  
    Gain on sale of properties   (1,367 )     –  
    Litigation settlement   –       –  
    Tax effect of adjustments   (12 )     (39 )
    Adjusted net income (loss) $ 5,087     $ 9,777  
           
    Selected Operating and Financial Data (Tables)
    Reconciliation of Unaudited GAAP Financial Measures to Non-GAAP Financial Measures
    Net Income (Loss) to Adjusted Net Income (Loss)
           
      Twelve Months   Twelve Months
      Ended   Ended
    (Amounts in $000s, except per share data) December 31, 2024   December 31, 2023
           
    Reconciliation of Adjusted Net Income (Loss):      
    Net income (loss) $ 12,946     $ 392,750  
    Unrealized (gain) loss on commodity derivatives   20,457       (47,958 )
    Acquisition and divestiture related costs   1,633       219  
    Non-recurring costs:      
    Income tax expense (benefit) – deferred1   2,196       (253,796 )
    Gain on sale of properties   (1,367 )     –  
    Litigation settlement2   –       (84,875 )
    Tax effect of adjustments3   (56 )     17,778  
    Adjusted net income (loss) $ 35,809     $ 24,118  
      (1) In 2023, we achieved three years of cumulative book income which resulted in the release of our valuation allowance of $284.9 million.
      (2) In 2023, non-recurring costs included a litigation settlement with the shipping companies and the containerships whose anchors struck the Company’s pipeline.
      (3) The federal statutory rates were utilized for all periods presented.
         
    Selected Operating and Financial Data (Tables)
    Reconciliation of Unaudited GAAP Financial Measures to Non-GAAP Financial Measures
    Cash General and Administrative Expenses
                   
      Three Months      Three Months
      Ended   Ended
    (Amounts in $000s) December 31, 2024   September 30, 2024
                   
    General and administrative expense $ 9,486     $ 8,251  
    Less: Share-based compensation expense   1,686       1,815  
    Less: Acquisition and divestiture costs   1,424       186  
    Less: Bad debt expense   28       26  
    Less: Severance payments   —       —  
    Total Cash General and Administrative Expense $ 6,348     $ 6,224  
                   
    Selected Operating and Financial Data (Tables)
    Reconciliation of Unaudited GAAP Financial Measures to Non-GAAP Financial Measures
    Cash General and Administrative Expenses
                   
      Twelve Months      Twelve Months
      Ended   Ended
    (Amounts in $000s) December 31, 2024   December 31, 2023
                   
    General and administrative expense $ 35,895     $ 32,984  
    Less: Share-based compensation expense   6,799       5,280  
    Less: Acquisition and divestiture costs   1,633       219  
    Less: Bad debt expense   80       98  
    Less: Severance payments   344       965  
    Total Cash General and Administrative Expense $ 27,039     $ 26,422  
                   
    Selected Operating and Financial Data (Tables)
    Reconciliation of Unaudited GAAP Financial Measures to Non-GAAP Financial Measures
    Revenue Payables in Suspense
           
      Three Months      Twelve Months
      Ended   Ended
    (Amounts in $000s) December 31, 2024   December 31, 2024
           
           
    Oil and natural gas sales $ –     $ 4,023  
    Other revenues   –       4,829  
    Severance tax and other deducts   –       (433 )
    Total net revenue $ –     $ 8,419  
           
    Production volumes:      
    Oil (MBbls)   –       33  
    NGLs (MBbls)   –       31  
    Natural gas (MMcf)   –       441  
    Total (Mboe)   –       138  
    Total (Mboe/d)   –       0.38  
           
        As of       As of  
      December 31,       December 31,  
      2024       2023  
    Standardized measure of future net cash flows, discounted at 10% ($ M)   $608,239       $626,131  
    Add: PV of future income tax, discounted at 10% ($ M)   $127,526       $130,882  
    PV-10 ($ M)   $735,765       $757,013  
                   

    The MIL Network –

  • MIL-OSI: Zscaler Reports Second Quarter Fiscal 2025 Financial Results

    Source: GlobeNewswire (MIL-OSI)

    Second Quarter Highlights

    • Revenue grows 23% year-over-year to $647.9 million
    • Calculated billings grows 18% year-over-year to $742.7 million
    • Deferred revenue grows 25% year-over-year to $1,878.5 million
    • GAAP net loss of $7.7 million compared to GAAP net loss of $28.5 million on a year-over-year basis
    • Non-GAAP net income of $127.1 million compared to non-GAAP net income of $99.4 million on a year-over-year basis

    SAN JOSE, Calif., March 05, 2025 (GLOBE NEWSWIRE) — Zscaler, Inc. (Nasdaq: ZS), the leader in cloud security, today announced financial results for its second quarter of fiscal year 2025, ended January 31, 2025.

    “Growing adoption of Zero Trust and AI is driving strong demand for our platform, resulting in yet another strong quarter that exceeded our guidance on both top and bottom line. We are leading the industry towards Zero Trust Everywhere by transforming security from legacy appliance-based to a Zero Trust architecture,” said Jay Chaudhry, Chairman and CEO of Zscaler. “By combining AI with Zero Trust, we are delivering several key innovations to secure our customers’ use of AI applications, creating new avenues of growth.”

    Second Quarter Fiscal 2025 Financial Highlights

    • Revenue: $647.9 million, an increase of 23% year-over-year.
    • Income (loss) from operations: GAAP loss from operations was $40.1 million, or 6% of revenue, compared to $45.5 million, or 9% of revenue, in the second quarter of fiscal 2024. Non-GAAP income from operations was $140.5 million, or 22% of revenue, compared to $103.2 million, or 20% of revenue, in the second quarter of fiscal 2024.
    • Net income (loss): GAAP net loss was $7.7 million, compared to $28.5 million in the second quarter of fiscal 2024. Non-GAAP net income was $127.1 million, compared to $99.4 million in the second quarter of fiscal 2024.
    • Net income (loss) per share, diluted: GAAP net loss per share was $0.05, compared to $0.19 in the second quarter of fiscal 2024. Non-GAAP net income per share was $0.78, compared to $0.63 in the second quarter of fiscal 2024.
    • Cash flows: Cash provided by operations was $179.4 million, or 27% of revenue, compared to $142.1 million, or 27% of revenue, in the second quarter of fiscal 2024. Free cash flow was $143.4 million, or 22% of revenue, compared to $100.8 million, or 19% of revenue, in the second quarter of fiscal 2024.
    • Deferred revenue: $1,878.5 million as of January 31, 2025, an increase of 25% year-over-year.
    • Cash, cash equivalents and short-term investments: $2,880.2 million as of January 31, 2025, an increase of $470.6 million from July 31, 2024.

    Recent Business Highlights

    • Introduced the industry’s first Zero Trust Segmentation solution for branches and cloud environments. The new solution improves customers’ security posture by preventing lateral movement from ransomware attacks, while cutting firewall and infrastructure spend in half.
    • Started offering the Zero Trust Network Access (ZTNA) service natively integrated within RISE with SAP. Zscaler Private Access™ (ZPA™) for SAP helps enable SAP customers with on-premises ERP workloads to simplify and de-risk their cloud migration, without the complexity and risk associated with traditional VPNs.
    • Appointed Phil Tee as EVP of AI Innovations. Tee previously co-founded an enterprise AI-driven provider of intelligent monitoring solutions for DevOps and ITOps.
    • Achieved FedRAMP authorization for Zscaler Zero Trust Browser. The authorization assures agencies of compliance with rigorous security standards, facilitating cloud adoption and streamlining the procurement process.
    • Announced that Nokia, a multinational technology leader, is migrating from its traditional firewall-based security model to the Zscaler Zero Trust Exchange to enhance its security, improve operational efficiency, and strengthen cloud capabilities.

    Change in Non-GAAP Measures Presentation

    Effective August 1, 2024, the beginning of our fiscal year ending July 31, 2025, we are using a long-term projected non-GAAP tax rate of 23% for the purpose of determining our non-GAAP net income and non-GAAP net income per share to provide better consistency across interim reporting periods in fiscal 2025 and beyond. Given the significant growth of our business and non-GAAP operating income, we believe this change is necessary to better reflect the performance of our business. We will continue to assess the appropriate non-GAAP tax rate on a regular basis, which could be subject to changes for a variety of reasons, including the rapidly evolving global tax environment, significant changes in our geographic earnings mix, or other changes to our strategy or business operations. Prior period amounts have been recast to reflect this change.

    Financial Outlook

    For the third quarter of fiscal 2025, we expect:

    • Revenue of $665 million to $667 million
    • Non-GAAP income from operations of $140 million to $142 million
    • Non-GAAP net income per share of approximately $0.75 to $0.76, assuming approximately 163 million fully diluted shares outstanding and a non-GAAP tax rate of 23%

    For the full year of fiscal 2025, we expect:

    • Revenue of approximately $2.640 billion to $2.654 billion
    • Calculated billings of $3.153 billion to $3.168 billion
    • Non-GAAP income from operations of $562 million to $572 million
    • Non-GAAP net income per share of $3.04 to $3.09, assuming approximately 163.5 million fully diluted shares outstanding and a non-GAAP tax rate of 23%

    These statements are forward-looking and actual results may differ materially. Refer to the Forward-Looking Statements safe harbor below for information on the factors that could cause our actual results to differ materially from these forward-looking statements.

    Guidance for non-GAAP income from operations excludes stock-based compensation expense and related employer payroll taxes, amortization of debt issuance costs, and amortization expense of acquired intangible assets. We have not reconciled our expectations of non-GAAP income from operations and non-GAAP net income per share to their most directly comparable GAAP measures because certain items are out of our control or cannot be reasonably predicted. For those reasons, we are also unable to address the probable significance of the unavailable information, the variability of which may have a significant impact on future results. Accordingly, a reconciliation for the guidance for non-GAAP income from operations and non-GAAP net income per share is not available without unreasonable effort.

    For further information regarding why we believe that these non-GAAP measures provide useful information to investors, the specific manner in which management uses these measures, and some of the limitations associated with the use of these measures, please refer to the “Explanation of Non-GAAP Financial Measures” section of this press release.

    Conference Call and Webcast Information

    Zscaler will host a conference call for analysts and investors to discuss its second quarter of fiscal 2025 and outlook for its third quarter of fiscal 2025 and full year fiscal 2025 today at 1:30 p.m. Pacific time (4:30 p.m. Eastern time).

    Date: Wednesday, March 5, 2025
    Time: 1:30 p.m. PT
    Webcast: https://ir.zscaler.com 
    Dial-in: To join by phone, register at the following link: (https://register.vevent.com/register/BI81201a44d72f48cab018ea30aa79b03b). After registering, you will be provided with a dial-in number and a personal PIN that you will need to join the call.
       

    Upcoming Conferences

    Third quarter of fiscal 2025 investor conference participation schedule:

    • Morgan Stanley Technology, Media and Telecom Conference in San Francisco
      Thursday, March 6, 2025
    • Susquehanna Travel, Tech + Gambling Forum (Virtual)
      Friday, March 7, 2025
    • Loop Capital Markets 2025 Investor Conference (Virtual)
      Monday, March 10, 2025
    • Stifel Technology 2025 Technology One-on-One Conference in New York City
      Tuesday, March 11, 2025
    • Cantor Global Technology Conference in New York City
      Wednesday, March 12, 2025

    Sessions which offer a webcast will be available on the Investor Relations section of the Zscaler website at https://ir.zscaler.com/

    Forward-Looking Statements

    This press release contains forward-looking statements that involve risks and uncertainties, including, but not limited to, statements regarding our future financial and operating performance, including our financial outlook for the third quarter of fiscal 2025 and full year fiscal 2025. There are a significant number of factors that could cause actual results to differ materially from statements made in this press release, including but not limited to: macroeconomic influences and instability, geopolitical events, operations and financial results and the economy in general; risks related to the use of AI in our platform; our ability to identify and effectively implement the necessary changes to address execution challenges; risks associated with managing our rapid growth, including fluctuations from period to period; our limited experience with new products and subscriptions and support introductions and the risks associated with new products and subscription and support offerings, including the discovery of software bugs; our ability to attract and retain new customers; the failure to timely develop and achieve market acceptance of new products and subscriptions as well as existing products and subscription and support; rapidly evolving technological developments in the market for network security products and subscription and support offerings and our ability to remain competitive; length of sales cycles; useful lives of our assets and other estimates; and general market, political, economic and business conditions.

    Additional risks and uncertainties that could affect our financial results are included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” set forth from time to time in our filings and reports with the Securities and Exchange Commission (“SEC”), including our Quarterly Report on Form 10-Q for the fiscal quarter ended October 31, 2024 filed on December 5, 2024 and our Annual Report on Form 10-K for the fiscal year ended July 31, 2024 filed on September 12, 2024, as well as future filings and reports by us, copies of which are available on our website at ir.zscaler.com and on the SEC’s website at www.sec.gov. You should not rely on these forward-looking statements, as actual outcomes and results may differ materially from those contemplated by these forward-looking statements as a result of such risks and uncertainties. Additional information will also be set forth in other filings that we make with the SEC from time to time. All forward-looking statements in this press release are based on information available to us as of the date hereof, and we do not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made.

    Use of Non-GAAP Financial Information

    We believe that the presentation of non-GAAP financial information provides important supplemental information to management and investors regarding financial and business trends relating to our financial condition and results of operations. For further information regarding why we believe that these non-GAAP measures provide useful information to investors, the specific manner in which management uses these measures, and some of the limitations associated with the use of these measures, please refer to the “Explanation of Non-GAAP Financial Measures” section of this press release.

    About Zscaler

    Zscaler (Nasdaq: ZS) accelerates digital transformation so customers can be more agile, efficient, resilient, and secure. The Zscaler Zero Trust Exchange™ platform protects thousands of customers from cyberattacks and data loss by securely connecting users, devices, and applications in any location. Distributed across more than 160 data centers globally, the SASE-based Zero Trust Exchange is the world’s largest in-line cloud security platform.

    Zscaler™ and the other trademarks listed at https://www.zscaler.com/legal/trademarks are either (i) registered trademarks or service marks or (ii) trademarks or service marks of Zscaler, Inc. in the United States and/or other countries. Any other trademarks are the properties of their respective owners.

    Investor Relations Contacts

    Ashwin Kesireddy
    VP, Investor Relations and Strategic Finance
    (415) 798-1475
    ir@zscaler.com

    Natalia Wodecki
    Media Relations Contact
    press@zscaler.com

     
    ZSCALER, INC.
    Condensed Consolidated Statements of Operations
    (in thousands, except per share amounts)
    (unaudited)
                   
      Three Months Ended   Six Months Ended
      January 31,   January 31,
      2025   2024   2025   2024
    Revenue $ 647,900     $ 524,999     $ 1,275,855     $ 1,021,702  
    Cost of revenue(1) (2)   148,498       117,199       289,960       228,593  
    Gross profit   499,402       407,800       985,895       793,109  
    Operating expenses:              
    Sales and marketing(1) (2)   307,872       276,481       613,959       543,592  
    Research and development(1) (2)   170,860       122,181       325,114       235,720  
    General and administrative(1)   60,810       54,595       117,629       105,311  
    Total operating expenses   539,542       453,257       1,056,702       884,623  
    Loss from operations   (40,140 )     (45,457 )     (70,807 )     (91,514 )
    Interest income   30,878       28,385       60,926       54,327  
    Interest expense(3)   (2,339 )     (3,605 )     (5,482 )     (6,764 )
    Other income (expense), net   (4,936 )     172       (5,588 )     (1,040 )
    Loss before income taxes   (16,537 )     (20,505 )     (20,951 )     (44,991 )
    Provision for (benefit from) for income taxes(4)   (8,813 )     7,964       (1,176 )     16,961  
    Net loss $ (7,724 )   $ (28,469 )   $ (19,775 )   $ (61,952 )
    Net loss per share, basic and diluted $ (0.05 )   $ (0.19 )   $ (0.13 )   $ (0.42 )
    Weighted-average shares used in computing net loss per share, basic and diluted   153,672       148,951       153,114       148,287  
    (1) Includes stock-based compensation expense and related payroll taxes as follows:
    Cost of revenue $ 17,619     $ 13,434     $ 33,412     $ 26,389  
    Sales and marketing   69,979       65,855       134,845       124,523  
    Research and development   65,896       44,120       124,761       85,163  
    General and administrative   22,862       22,127       43,912       42,190  
    Total $ 176,356     $ 145,536     $ 336,930     $ 278,265  
    (2) Includes amortization expense of acquired intangible assets as follows:
    Cost of revenue $ 3,815     $ 2,717     $ 7,490     $ 5,434  
    Sales and marketing   425       226       850       452  
    Research and development   5       140       145       233  
    Total $ 4,245     $ 3,083     $ 8,485     $ 6,119  
    (3) Includes amortization of debt issuance costs $ 982     $ 978     $ 1,963     $ 1,955  
    (4) Benefit from a release of valuation allowance (*) $ 17,188     $ —     $ 17,188     $ —  
                                   

    (*) During the three months ended January 31, 2025, we recognized a tax benefit of $17.2 million attributable to the release of the valuation allowance on United Kingdom (U.K.) deferred tax assets.

     
    ZSCALER, INC.
    Condensed Consolidated Balance Sheets
    (in thousands)
    (unaudited)
      January 31,   July 31,
      2025   2024
    Assets      
    Current assets:      
    Cash and cash equivalents $ 1,758,506     $ 1,423,080  
    Short-term investments   1,121,734       986,574  
    Accounts receivable, net   514,314       736,529  
    Deferred contract acquisition costs   156,079       148,873  
    Prepaid expenses and other current assets   114,573       101,561  
    Total current assets   3,665,206       3,396,617  
    Property and equipment, net   422,315       383,121  
    Operating lease right-of-use assets   83,703       89,758  
    Deferred contract acquisition costs, noncurrent   284,286       296,525  
    Acquired intangible assets, net   55,658       63,835  
    Goodwill   417,730       417,029  
    Other noncurrent assets   77,070       58,083  
    Total assets $ 5,005,968     $ 4,704,968  
           
    Liabilities and Stockholders’ Equity      
    Current liabilities:      
    Accounts payable $ 24,600     $ 23,309  
    Accrued expenses and other current liabilities   90,626       91,708  
    Accrued compensation   140,430       160,810  
    Deferred revenue   1,595,780       1,643,919  
    Convertible senior notes   1,147,513       1,142,275  
    Operating lease liabilities   49,917       50,866  
    Total current liabilities   3,048,866       3,112,887  
    Deferred revenue, noncurrent   282,725       251,055  
    Operating lease liabilities, noncurrent   40,912       44,824  
    Other noncurrent liabilities   26,119       22,100  
    Total liabilities   3,398,622       3,430,866  
    Stockholders’ Equity      
    Common stock   155       152  
    Additional paid-in capital   2,797,350       2,426,819  
    Accumulated other comprehensive loss   (22,304 )     (4,789 )
    Accumulated deficit   (1,167,855 )     (1,148,080 )
    Total stockholders’ equity   1,607,346       1,274,102  
    Total liabilities and stockholders’ equity $ 5,005,968     $ 4,704,968  
                   
     
    ZSCALER, INC.
    Condensed Consolidated Statements of Cash Flows
    (in thousands)
    (unaudited)
      Six Months Ended
      January 31,
      2025   2024
    Cash Flows from Operating Activities      
    Net loss $ (19,775 )   $ (61,952 )
    Adjustments to reconcile net loss to cash provided by operating activities:      
    Depreciation and amortization expense   45,911       29,361  
    Amortization expense of acquired intangible assets   8,485       6,119  
    Amortization of deferred contract acquisition costs   79,191       61,504  
    Amortization of debt issuance costs   1,963       1,955  
    Non-cash operating lease costs   31,565       21,633  
    Stock-based compensation expense   329,295       269,570  
    Accretion of investments purchased at a discount   (10,110 )     (9,582 )
    Unrealized losses on hedging transactions   3,036       2,841  
    Deferred income taxes   (17,359 )     (1,437 )
    Other   1,303       1,403  
    Changes in operating assets and liabilities, net of effects of business acquisitions:      
    Accounts receivable   222,043       102,374  
    Deferred contract acquisition costs   (74,158 )     (67,744 )
    Prepaid expenses, other current and noncurrent assets   (12,144 )     2,660  
    Accounts payable   98       (2,412 )
    Accrued expenses, other current and noncurrent liabilities   (11,481 )     6,020  
    Accrued compensation   (20,380 )     562  
    Deferred revenue   (16,469 )     62,477  
    Operating lease liabilities   (30,246 )     (22,477 )
    Net cash provided by operating activities   510,768       402,875  
    Cash Flows from Investing Activities      
    Purchases of property, equipment and other assets   (32,043 )     (59,553 )
    Capitalized internal-use software   (43,416 )     (17,816 )
    Payments for business acquisitions, net of cash acquired   (834 )     (4,377 )
    Purchase of strategic investments   (786 )     (2,000 )
    Purchases of short-term investments   (729,066 )     (761,796 )
    Proceeds from maturities of short-term investments   605,003       594,687  
    Proceeds from sale of short-term investments   —       2,105  
    Net cash used in investing activities   (201,142 )     (248,750 )
    Cash Flows from Financing Activities      
    Proceeds from issuance of common stock upon exercise of stock options   3,456       3,848  
    Proceeds from issuance of common stock under the employee stock purchase plan   22,344       18,407  
    Net cash provided by financing activities   25,800       22,255  
    Net increase in cash and cash equivalents   335,426       176,380  
    Cash and cash equivalents at beginning of period   1,423,080       1,262,206  
    Cash and cash equivalents at end of period $ 1,758,506     $ 1,438,586  
                   
     
    ZSCALER, INC.
    Reconciliation of GAAP to Non-GAAP Financial Measures
    (in thousands, except percentages)
    (unaudited)
                   
      Three Months Ended   Six Months Ended
      January 31,   January 31,
      2025   2024   2025   2024
                   
    Revenue $ 647,900     $ 524,999     $ 1,275,855     $ 1,021,702  
                   
    Non-GAAP Gross Profit and Non-GAAP Gross Margin              
    GAAP gross profit $ 499,402     $ 407,800     $ 985,895     $ 793,109  
    Add: Stock-based compensation expense and related payroll taxes   17,619       13,434       33,412       26,389  
    Add: Amortization expense of acquired intangible assets   3,815       2,717       7,490       5,434  
    Non-GAAP gross profit $ 520,836     $ 423,951     $ 1,026,797     $ 824,932  
    GAAP gross margin   77 %     78 %     77 %     78 %
    Non-GAAP gross margin   80 %     81 %     80 %     81 %
                   
    Non-GAAP Income from Operations and Non-GAAP Operating Margin              
    GAAP loss from operations $ (40,140 )   $ (45,457 )   $ (70,807 )   $ (91,514 )
    Add: Stock-based compensation expense and related payroll taxes   176,356       145,536       336,930       278,265  
    Add: Amortization expense of acquired intangible assets   4,245       3,083       8,485       6,119  
    Non-GAAP income from operations $ 140,461     $ 103,162     $ 274,608     $ 192,870  
    GAAP operating margin (6 )%   (9 )%   (6 )%   (9 )%
    Non-GAAP operating margin   22 %     20 %     22 %     19 %
                                   
     
    ZSCALER, INC.
    Reconciliation of GAAP to Non-GAAP Financial Measures
    (in thousands, except per share amounts)
    (unaudited)
                   
      Three Months Ended   Six Months Ended
      January 31,   January 31,
      2025   2024   2025   2024
    Non-GAAP Net Income per Share, Diluted              
    GAAP net loss $ (7,724 )   $ (28,469 )   $ (19,775 )   $ (61,952 )
    Add: GAAP provision for (benefit from) income taxes   (8,813 )     7,964       (1,176 )     16,961  
    GAAP loss before income taxes   (16,537 )     (20,505 )     (20,951 )     (44,991 )
    Add:              
    Stock-based compensation expense and related payroll taxes   176,356       145,536       336,930       278,265  
    Amortization expense of acquired intangible assets   4,245       3,083       8,485       6,119  
    Amortization of debt issuance costs   982       978       1,963       1,955  
    Non-GAAP net income before income taxes   165,046       129,092       326,427       241,348  
    Non-GAAP provision for income taxes(1)   37,965       29,691       75,083       55,510  
    Non-GAAP net income $ 127,081     $ 99,401     $ 251,344     $ 185,838  
                   
    GAAP provision for (benefit from) income taxes $ (8,813 )   $ 7,964     $ (1,176 )   $ 16,961  
    Add: Income tax and other tax adjustments(2)   46,778       21,727       76,259       38,549  
    Non-GAAP provision for income taxes(1) $ 37,965     $ 29,691     $ 75,083     $ 55,510  
    Non-GAAP effective tax rate(1)   23 %     23 %     23 %     23 %
                   
    Non-GAAP net income   127,081       99,401       251,344       185,838  
    Add: Non-GAAP interest expense, net of tax related to the convertible senior notes   276       276       552       552  
    Numerator used in computing non-GAAP net income per share, diluted $ 127,357     $ 99,677     $ 251,896     $ 186,390  
                   
    GAAP net loss per share, diluted $ (0.05 )   $ (0.19 )   $ (0.13 )   $ (0.42 )
    Stock-based compensation expense and related payroll taxes   1.09       0.91       2.08       1.75  
    Amortization expense of acquired intangible assets   0.03       0.02       0.05       0.04  
    Amortization of debt issuance costs   0.01       0.01       0.01       0.01  
    Income tax and other tax adjustments(2)   (0.29 )     (0.14 )     (0.47 )     (0.24 )
    Non-GAAP interest expense related to the convertible senior notes   —       —       —       —  
    Adjustment to total fully diluted earnings per share(3)   (0.01 )     0.02       0.01       0.03  
    Non-GAAP net income per share, diluted $ 0.78     $ 0.63     $ 1.55     $ 1.17  
                   
    Weighted-average shares used in computing GAAP net loss per share, diluted   153,672       148,951       153,114       148,287  
    Add: Outstanding potentially dilutive equity incentive awards   2,988       4,670       2,848       4,226  
    Add: Convertible senior notes   7,626       7,626       7,626       7,626  
    Less: Antidilutive impact of capped call transactions(4)   (1,769 )     (2,093 )     (1,505 )     (1,254 )
    Weighted-average shares used in computing non-GAAP net income per share, diluted   162,517       159,154       162,083       158,885  

    ___________

    (1) Effective August 1, 2024, the beginning of our fiscal year ending July 31, 2025, we are using a long-term projected non-GAAP tax rate of 23% for the purpose of determining our non-GAAP net income and non-GAAP net income per share to provide better consistency across interim reporting periods in fiscal 2025 and beyond. Given the significant growth of our business and non-GAAP operating income, we believe this change is necessary to better reflect the performance of our business. We will continue to assess the appropriate non-GAAP tax rate on a regular basis, which could be subject to changes for a variety of reasons, including the rapidly evolving global tax environment, significant changes in our geographic earnings mix, or other changes to our strategy or business operations. Prior period amounts have been recast to reflect this change.

    (2) Consists of income tax adjustments related to our long-term non-GAAP effective tax rate of 23%. In the three months ended January 31, 2025, the adjustments exclude the tax benefit of $17.2 million attributable to the release of the valuation allowance on U.K. deferred tax assets.

    (3) The sum of the fully diluted earnings per share impact of individual reconciling items may not total to fully diluted non-GAAP net income per share due to the weighted-average shares used in computing the GAAP net loss per share differs from the weighted-average shares used in computing the non-GAAP net income per share, and due to rounding of the individual reconciling items. The GAAP net loss per share calculation uses a lower share count as it excludes potentially dilutive shares, which are included in calculating the non-GAAP net income per share.

    (4) We exclude the in-the-money portion of the convertible senior notes for non-GAAP weighted-average diluted shares as they are covered by our capped call transactions. Our outstanding capped call transactions are antidilutive under GAAP but are expected to mitigate the dilutive effect of the convertible senior notes and therefore are included in the calculation of non-GAAP diluted shares outstanding. The capped calls have an antidilutive impact when the average stock price of our common stock in a given period is higher than their exercise price.

     
    ZSCALER, INC.
    Reconciliation of GAAP to Non-GAAP Financial Measures
    (in thousands, except percentages)
    (unaudited)
                   
      Three Months Ended   Six Months Ended
      January 31,   January 31,
      2025   2024   2025   2024
    Calculated Billings              
    Revenue $ 647,900     $ 524,999     $ 1,275,855     $ 1,021,702  
    Add: Total deferred revenue, end of period   1,878,505       1,502,175       1,878,505       1,502,175  
    Less: Total deferred revenue, beginning of period   (1,783,720 )     (1,399,544 )     (1,894,974 )     (1,439,676 )
    Calculated billings $ 742,685     $ 627,630     $ 1,259,386     $ 1,084,201  
                   
    Free Cash Flow              
    Net cash provided by operating activities $ 179,433     $ 142,069     $ 510,768     $ 402,875  
    Less: Purchases of property, equipment and other assets   (15,018 )     (30,894 )     (32,043 )     (59,553 )
    Less: Capitalized internal-use software   (20,987 )     (10,387 )     (43,416 )     (17,816 )
    Free cash flow $ 143,428     $ 100,788     $ 435,309     $ 325,506  
                   
    Free Cash Flow Margin              
    Net cash provided by operating activities, as a percentage of revenue   27 %     27 %     40 %     39 %
    Less: Purchases of property, equipment and other assets, as a percentage of revenue (2 )%   (6 )%   (3 )%   (6 )%
    Less: Capitalized internal-use software, as a percentage of revenue (3 )%   (2 )%   (3 )%   (2 )%
    Free cash flow margin   22 %     19 %     34 %     32 %
                                   
     
    ZSCALER, INC.
    Explanation of Non-GAAP Financial Measures
     

    In addition to our results determined in accordance with generally accepted accounting principles in the United States of America (“GAAP”), we believe the following non-GAAP measures are useful in evaluating our operating performance. We use the following non-GAAP financial information to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that non-GAAP financial information, when taken collectively, may be helpful to investors because it provides consistency and comparability with past financial performance. However, non-GAAP financial information is presented for supplemental informational purposes only, as it has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. In particular, free cash flow is not a substitute for cash provided by operating activities. Additionally, the utility of free cash flow as a measure of our liquidity is further limited as it does not represent the total increase or decrease in our cash balance for a given period. In addition, other companies, including companies in our industry, may calculate similarly titled non-GAAP measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. A reconciliation of our historical non-GAAP financial measures to their most directly comparable financial measures stated in accordance with GAAP has been included in this press release. Investors are cautioned that there are a number of limitations associated with the use of non-GAAP financial measures and key metrics as analytical tools. Investors are encouraged to review these reconciliations, and not to rely on any single financial measure to evaluate our business.

    Expenses Excluded from Non-GAAP Measures

    Stock-based compensation expense is excluded primarily because it is a non-cash expense that management believes is not reflective of our ongoing operational performance. Employer payroll taxes related to stock-based compensation, which is a cash expense, are excluded because these are tied to the timing and size of the exercise or vesting of the underlying equity incentive awards and the price of our common stock at the time of vesting or exercise, which may vary from period to period independent of the operating performance of our business. Amortization expense of acquired intangible assets and amortization of debt issuance costs from the convertible senior notes are excluded because these are non-cash expenses and are not reflective of our ongoing operational performance.

    Effective August 1, 2024, the beginning of our fiscal year ending July 31, 2025, we are using a long-term projected non-GAAP tax rate of 23% for the purpose of determining our non-GAAP net income and non-GAAP net income per share to provide better consistency across interim reporting periods. Given the significant growth of our business and non-GAAP operating income, we believe this change is necessary to better reflect the performance of our business. We will continue to assess the appropriate non-GAAP tax rate on a regular basis, which could be subject to changes for a variety of reasons, including the rapidly evolving global tax environment, significant changes in our geographic earnings mix, or other changes to our strategy or business operations. Prior period amounts have been recast to reflect this change.

    Non-GAAP Financial Measures

    Non-GAAP Gross Profit and Non-GAAP Gross Margin. We define non-GAAP gross profit as GAAP gross profit excluding stock-based compensation expense and related employer payroll taxes and amortization expense of acquired intangible assets. We define non-GAAP gross margin as non-GAAP gross profit as a percentage of revenue.

    Non-GAAP Income from Operations and Non-GAAP Operating Margin. We define non-GAAP income from operations as GAAP loss from operations excluding stock-based compensation expense and related employer payroll taxes and amortization expense of acquired intangible assets. We define non-GAAP operating margin as non-GAAP income from operations as a percentage of revenue.

    Non-GAAP Net Income per Share, Diluted. We define non-GAAP net income as GAAP net loss excluding stock-based compensation expense and related employer payroll taxes, amortization expense of acquired intangible assets, amortization of debt issuance costs, and the non-GAAP provision for income taxes adjustment. We define non-GAAP net income per share, diluted, as non-GAAP net income plus the non-GAAP interest expense related to the convertible senior notes divided by the weighted-average diluted shares outstanding, which includes the effect of potentially diluted common stock equivalents outstanding during the period and the anti-dilutive impact of the capped call transactions entered into in connection with the convertible senior notes.

    Calculated Billings. We define calculated billings as revenue plus the change in deferred revenue in a period. Calculated billings in any particular period aims to reflect amounts invoiced for subscriptions to access our cloud platform, together with related support services for our new and existing customers. We typically invoice our customers annually in advance, and to a lesser extent quarterly in advance, monthly in advance or multi-year in advance.

    Free Cash Flow and Free Cash Flow Margin. We define free cash flow as net cash provided by operating activities less purchases of property, equipment and other assets and capitalized internal-use software. We define free cash flow margin as free cash flow divided by revenue. We believe that free cash flow and free cash flow margin are useful indicators of liquidity that provide information to management and investors about the amount of cash generated from our operations that, after the investments in property, equipment and other assets and capitalized internal-use software, can be used for strategic initiatives.

    The MIL Network –

  • MIL-OSI: Silvaco Reports Fourth Quarter and Full Year 2024 Financial Results

    Source: GlobeNewswire (MIL-OSI)

    Achieved record gross bookings of $65.8 million and revenue of $59.7 million in full-year 2024

    Signed 46 new customers in 2024 and expanded relationship with existing customers across key markets including power, automotive, memory, foundry, and display

    Expanded Product Portfolio with the Acquisition of Cadence’s Process Proximity Compensation Product Line

    SANTA CLARA, Calif., March 05, 2025 (GLOBE NEWSWIRE) — Silvaco Group, Inc. (Nasdaq: SVCO) (“Silvaco” or the “Company”), a provider of TCAD, EDA software, and SIP solutions that enable innovative semiconductor design and digital twin modeling through AI software and automation, today announced its fourth quarter and full year 2024 results.

    “We are proud to close out the year with strong momentum and growing customer traction, including 46 new customer wins in 2024 and multiple bookings on our AI based, flagship FTCO platform,” said Dr. Babak Taheri, Silvaco’s Chief Executive Officer. Dr. Taheri continued, “Our first acquisition as a public company marks a significant milestone in executing our M&A strategy for talent, technology and expanding through inorganic growth. With a continued focus on innovation and execution, we are well-positioned to build on this success and drive further growth in 2025 for our EDA and TCAD product lines.”

    Fourth Quarter 2024 and Recent Business Highlights

    • Acquired 13 new customers across key markets including Photonics, Power, Automotive, Memory, and Foundry, which represented approximately 9% of gross bookings for the quarter.
    • Announced a partnership with Micon Global to expand Silvaco’s reach across the EMEA market, leveraging Micon’s expertise to deliver cutting-edge TCAD, EDA, and SIP solutions to new customers.
    • Joined the SMART USA Institute under the CHIPS Manufacturing USA program to advance digital twin technologies in semiconductor manufacturing, reinforcing Silvaco’s leadership in innovation. We received our first booking from this program.
    • Received a $5.0 million follow-on order for FTCO™ digital-twin modeling product from a strategic memory customer. This order extends the footprint of our FTCO™ product line and further validates our strategic focus on this unique technology.
    • Achieved ISO 9001 certification, underscoring Silvaco’s commitment to quality and continuous improvement across its TCAD, EDA, and SIP product portfolio.
    • On March 4, 2025, Silvaco closed the acquisition of the Process Proximity Compensation (PPC) product line from Cadence Design Systems, Inc. The addition, an optical proximity correction suite of tools, is highly complementary to Silvaco’s EDA and TCAD tool suites.

    Full Year 2024 Business Highlights

    • Acquired 46 new customers across key markets including Power, Automotive, Government/Mil-Aero, Photonics, IOT, 5G/6G, Memory, and Foundry, which represented approximately 10% of gross bookings for the year.
    • Expanded Victory TCAD and Digital Twin Modeling Platform to Planar CMOS, FinFET and Advanced CMOS Technologies which is a necessary step to enable FTCO for Advanced Process.
    • Silvaco Announced that the Ninth Circuit Court of Appeals affirmed the dismissal of all claims against Silvaco brought by Aldini AG.
    • Silvaco was added to the Russell 2000®, Russell 3000®, and Russell Microcap® indexes in September 2024.
    • Completed initial public offering in May 2024, raising $106 million net of underwriters’ fees.

    Fourth Quarter 2024 Financial Results

    GAAP Financial Results

    • Revenue of $17.9 million, up 43% year-over-year and up 63% quarter-over-quarter.
      • TCAD revenue of $12.7 million, up 65% year-over-year.
      • EDA revenue of $4.2 million, up 57% year-over-year.
      • SIP revenue of $0.9 million, down 57% year-over-year.
    • GAAP gross profit and GAAP gross margin were $15.4 million and 86%, respectively, which includes the impact of $194,000 stock-based compensation expense, $249,000 amortization of acquired intangible assets, and $80,000 payroll taxes from the RSU lockup release, up from $9.8 million and 79% in Q4 2023.
    • GAAP net income of $4.2 million, compared to a GAAP net loss of $2.2 million in Q4 2023.
    • GAAP basic and diluted net income per share of $0.14, compared to GAAP basic and diluted net loss per share of $(0.11) in Q4 2023.
    • As of December 31, 2024, cash and cash equivalents and marketable securities totaled $87.5 million.

    Key Operating Indicators and Non-GAAP Financial Results:

    • Gross bookings were $20.3 million, up 30% year-over-year.
    • As of December 31, 2024, the remaining performance obligation balance of $34.3 million, 46% of which is expected to be recognized as revenue in the next 12 months.
    • Non-GAAP gross profit and non-GAAP gross margin were $16.0 million and 89%, respectively, up from $9.8 million and 79% year-over-year.
    • Non-GAAP net income of $4.3 million, compared to Non-GAAP net loss of $(1.6) million in Q4 2023.
    • Non-GAAP diluted net income per share of $0.15, compared to Non-GAAP diluted net loss per share of $(0.08) in Q4 2023.

    Full Year 2024 Financial Results

    GAAP Financial Results

    • Revenue of $59.7 million, up 10% year-over-year.
      • TCAD revenue of $40.2 million, up 25% year-over-year.
      • EDA revenue of $14.6 million, up 4% year-over-year.
      • SIP revenue of $4.9 million, down 40% year-over-year.
    • GAAP gross profit and GAAP gross margin were $47.6 million and 80%, respectively, which includes the impact of $3.0 million stock-based compensation expense, $747,000 amortization of acquired intangible assets, and $80,000 payroll taxes from the RSU lockup release, up from $44.9 million and down from 83% in 2023.
    • GAAP net loss of $(39.4) million, compared to $(0.3) million in 2023.
    • GAAP basic and diluted net loss per share of $(1.53), compared to $(0.02) in 2023.

    Key Operating Indicators and Non-GAAP Financial Results:

    • Gross bookings were $65.8 million, up 13% year-over-year.
    • Non-GAAP gross profit and non-GAAP gross margin were $51.4 million and 86%, respectively, up from $44.9 million and 83% year over year.
    • Non-GAAP net income of $6.7 million, compared to $3.4 million in 2023.
    • Non-GAAP diluted net income per share of $0.25, compared to $0.17 in 2023.

    For a discussion of the non-GAAP metrics presented in this press release, as well as a reconciliation of non-GAAP metrics to the nearest comparable GAAP metric, see “Discussion of Non-GAAP Financial Measures” and “GAAP to Non-GAAP Reconciliation” in the accompanying tables below.

    Supplementary materials to this press release, including our fourth quarter 2024 financial results, can be found at https://investors.silvaco.com/financial-information/quarterly-results.

    First Quarter and Full Year 2025 Financial Outlook

    As of March 5, 2025, Silvaco is providing guidance for its first quarter of 2025 and its full-year 2025, which represents Silvaco’s current estimates on its operations and financial results. The financial information below represents forward-looking financial information and in some instances forward-looking, non-GAAP financial information, including estimates of non-GAAP gross margin, non-GAAP operating income (loss) and non-GAAP diluted net income (loss) per share. GAAP gross margin is the most comparable GAAP measure to non-GAAP gross margin, GAAP operating income (loss) is the most comparable GAAP measure to non-GAAP operating income (loss). GAAP diluted net income (loss) per share is the most comparable GAAP measure to non-GAAP diluted net income (loss) per share. Non-GAAP gross margin differs from GAAP gross margin in that it excludes items such as stock-based compensation expense, amortization of acquired intangible assets, and payroll tax from the IPO lock-up release. Non-GAAP operating income (loss) differs from GAAP operating income (loss) in that it excludes items such as acquisition-related estimated litigation claim and legal costs, stock-based compensation expense, amortization of acquired intangible assets, payroll tax from the IPO lock-up release, IPO preparation costs, and executive severance costs. Non-GAAP diluted net income (loss) per share differs from GAAP diluted net income (loss) per share in that it excludes certain costs, including IPO preparation costs, acquisition-related estimated litigation claim and legal costs, stock-based compensation expense, amortization of acquired intangible assets, payroll tax from the IPO lock-up release, executive severance costs, change in fair value of contingent consideration, foreign exchange (gain) loss, loss on debt extinguishment, and the income tax effect on non-GAAP items. Silvaco is unable to predict with reasonable certainty the ultimate outcome of these exclusions without unreasonable effort. Therefore, Silvaco has not provided guidance for GAAP gross margin, GAAP operating income or GAAP diluted net income (loss) per share or a reconciliation of the forward-looking non-GAAP gross margin or non-GAAP operating income or non-GAAP diluted net income (loss) per share guidance to GAAP gross margin or GAAP operating income or GAAP diluted net income (loss) per share, respectively. However, it is important to note that these excluded items could be material to our results computed in accordance with GAAP in future periods.

    Based on current business trends and conditions, the Company expects for first quarter 2025 the following:

    • Gross bookings in the range of $16.0 million to $19.0 million, which would compare to $16.1 million in the first quarter of 2024.
    • Revenue in the range of $14.5 million to $17.0 million, which would compare to $15.9 million in the first quarter of 2024.
    • Non-GAAP gross margin in the range of 84% to 87%, which would compare to 88% in the first quarter of 2024.
    • Non-GAAP operating income in the range of ($1.0) million loss to $1.0 million income, compared to $3.3 million in the first quarter of 2024.
    • Non-GAAP diluted net income per share in the range of ($0.03) loss to $0.03, compared to $0.12 in the first quarter of 2024.

    For full year 2025, the Company expects:

    • Gross bookings in the range of $72.0 million to $79.0 million, which would represent a 9% to 20% increase from $65.8 million in 2024.
    • Revenue in the range of $66.0 million to $72.0 million, which would represent a 11% to 21% increase from $59.7 million in 2024.
    • Non-GAAP gross margin in the range of 84.0% to 89.0%, which would compare to 86% in 2024.
    • Non-GAAP operating income in the range of $2.0 million to $7.0 million, which would compare to $5.5 million in 2024.
    • Non-GAAP diluted net income per share in the range of $0.07 to $0.19, compared to $0.25 in 2024.

    Q4 2024 Conference Call Details

    A press release highlighting the Company’s results along with supplemental financial results will be available at https://investors.silvaco.com/ along with an earnings presentation to accompany management’s prepared remarks on the day of the conference call, after market close. An archived replay of the conference call will be available on this website for a limited time after the call. Participants who want to join the call and ask a question may register for the call here to receive the dial-in numbers and unique PIN.

    Date: Wednesday, March 5, 2025
    Time: 5:00 p.m. Eastern time
    Webcast: Here (live and replay)

    About Silvaco

    Silvaco is a provider of TCAD, EDA software, and SIP solutions that enable semiconductor design and digital twin modeling through AI software and innovation. Silvaco’s solutions are used for semiconductor and photonics processes, devices, and systems development across display, power devices, automotive, memory, high performance compute, foundries, photonics, internet of things, and 5G/6G mobile markets for complex SoC design. Silvaco is headquartered in Santa Clara, California, and has a global presence with offices located in North America, Europe, Brazil, China, Japan, Korea, Singapore, and Taiwan.

    Safe Harbor Statement

    This press release contains forward-looking statements based on Silvaco’s current expectations. The words “believe”, “estimate”, “expect”, “intend”, “anticipate”, “plan”, “project”, “will”, and similar phrases as they relate to Silvaco are intended to identify such forward-looking statements. These forward-looking statements reflect the current views and assumptions of Silvaco and are subject to various risks and uncertainties that could cause actual results to differ materially from expectations.

    These forward-looking statements include but are not limited to, statements regarding our future operating results, financial position, and guidance, our business strategy and plans, our objectives for future operations, our development or delivery of new or enhanced products, and anticipated results of those products for our customers, our competitive positioning, projected costs, technological capabilities, and plans, and macroeconomic trends.

    A variety of risks and factors that are beyond our control could cause actual results to differ materially from those in the forward-looking statements including, without limitation, the following: (a) market conditions; (b) anticipated trends, challenges and growth in our business and the markets in which we operate; (c) our ability to appropriately respond to changing technologies on a timely and cost-effective basis; (d) the size and growth potential of the markets for our software solutions, and our ability to serve those markets; (e) our expectations regarding competition in our existing and new markets; (f) the level of demand in our customers’ end markets; (g) regulatory developments in the United States and foreign countries; (h) changes in trade policies, including the imposition of tariffs; (i) proposed new software solutions, services or developments; (j) our ability to attract and retain key management personnel; (k) our customer relationships and our ability to retain and expand our customer relationships; (l) our ability to diversify our customer base and develop relationships in new markets; (m) the strategies, prospects, plans, expectations, and objectives of management for future operations; (n) public health crises, pandemics, and epidemics and their effects on our business and our customers’ businesses; (o) the impact of the current conflicts between Ukraine and Russia and Israel and Hamas and the ongoing trade disputes among the United States and China on our business, financial condition or prospects, including extreme volatility in the global capital markets making debt or equity financing more difficult to obtain, more costly or more dilutive, delays and disruptions of the global supply chains and the business activities of our suppliers, distributors, customers and other business partners; (p) changes in general economic or business conditions or economic or demographic trends in the United States and foreign countries including changes in tariffs, interest rates and inflation; (q) our ability to raise additional capital; (r) our ability to accurately forecast demand for our software solutions; (s) our expectations regarding the outcome of any ongoing litigation; (t) our expectations regarding the period during which we qualify as an emerging growth company under the JOBS Act and as a smaller reporting company under the Exchange Act; (u) our expectations regarding our ability to obtain, maintain, protect and enforce intellectual property protection for our technology; (v) our status as a controlled company; (w) our use of the net proceeds from our initial public offering, and (x) our ability to successfully integrate, retain key personnel, and realize the anticipated benefits of the acquisition of Cadence’s PPC product line.

    It is not possible for us to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results or outcomes to differ materially from those contained in any forward-looking statements we may make. Accordingly, you should not rely on any of the forward-looking statements. Additional information relating to the uncertainty affecting the Silvaco’s business is contained in Silvaco’s filings with the Securities and Exchange Commission. These documents are available on the SEC Filings section of the Investor Relations section of Silvaco’s website at http://investors.silvaco.com/. These forward-looking statements represent Silvaco’s expectations as of the date of this press release. Subsequent events may cause these expectations to change, and Silvaco disclaims any obligations to update or alter these forward-looking statements in the future, whether as a result of new information, future events or otherwise.

    Discussion of Non-GAAP Financial Measures

    We use certain non-GAAP financial measures to supplement the performance measures in our consolidated financial statements, which are presented in accordance with GAAP. These non-GAAP financial measures include non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income (loss), non-GAAP net income (loss), and non-GAAP diluted net income (loss) per share. We use these non-GAAP financial measures for financial and operational decision-making and as a mean to assist us in evaluating period-to-period comparisons.

    We define non-GAAP gross profit and non-GAAP gross margin as our GAAP gross profit and GAAP gross margin adjusted to exclude certain costs, including stock-based compensation expense, amortization of acquired intangible assets and payroll tax from the IPO lock-up release. We define non-GAAP operating income (loss), as our GAAP operating income (loss) adjusted to exclude certain costs, including IPO preparation costs, acquisition-related estimated litigation claim and legal costs, stock-based compensation expense, amortization of acquired intangible assets, payroll tax from the IPO lock-up release, and executive severance costs. We define non-GAAP net income (loss) as our GAAP net income (loss) adjusted to exclude certain costs, including IPO preparation costs, acquisition-related estimated litigation claim and legal costs, stock-based compensation expense, amortization of acquired intangible assets, payroll tax from the IPO lock-up release, executive severance costs, change in fair value of contingent consideration, foreign exchange (gain) loss, loss on debt extinguishment, and the income tax effect on non-GAAP items. Our non-GAAP diluted net income (loss) per share is calculated in the same way as our non-GAAP net income (loss), but on a per share basis. We monitor non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income (loss), non-GAAP net income (loss) and non-GAAP diluted net income (loss) per share as non-GAAP financial measures to supplement the financial information we present in accordance with GAAP to provide investors with additional information regarding our financial results.

    Certain items are excluded from our non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income (loss), non-GAAP net income (loss) and non-GAAP diluted net income (loss) per share because these items are non-cash in nature or are not indicative of our core operating performance and render comparisons with prior periods and competitors less meaningful. We adjust GAAP gross profit, GAAP gross margin, GAAP operating income (loss), GAAP net income (loss), and GAAP diluted net income (loss) per share for these items to arrive at non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income (loss), non-GAAP net income (loss), and non-GAAP diluted net income (loss) per share because these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, capital structure and the method by which the assets were acquired. By excluding certain items that may not be indicative of our recurring core operating results, we believe that non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income (loss), non-GAAP net income (loss) and non-GAAP diluted net income (loss) per share provide meaningful supplemental information regarding our performance.

    We believe these non-GAAP financial measures are useful to investors and others because they allow for additional information with respect to financial measures used by management in its financial and operational decision-making and they may be used by our institutional investors and the analyst community to help them analyze our financial performance and the health of our business. However, there are a number of limitations related to the use of non-GAAP financial measures, and these non-GAAP measures should be considered in addition to, not as a substitute for or in isolation from, our financial results prepared in accordance with GAAP. Other companies, including companies in our industry, may calculate these non-GAAP financial measures differently or not at all, which reduces their usefulness as comparative measures.

           
    SILVACO GROUP, INC.
    CONDENSED CONSOLIDATED BALANCE SHEETS
    (Unaudited, in thousands except share and par value amounts)
      December 31,   December 31,
      2024   2023
           
    ASSETS      
    Current assets:      
    Cash and cash equivalents $ 19,606     $ 4,421  
    Short-term marketable securities   63,071       –  
    Accounts receivable, net   9,211       4,006  
    Contract assets, net   11,932       8,749  
    Prepaid expenses and other current assets   3,460       2,549  
    Deferred transaction costs   –       1,163  
    Total current assets   107,280       20,888  
    Non-current assets:      
    Non-current marketable securities   4,785       –  
    Property and equipment, net   865       591  
    Operating lease right-of-use assets, net   1,711       1,963  
    Intangible assets, net   4,369       342  
    Goodwill   9,026       9,026  
    Non-current portion of contract assets, net   12,611       6,250  
    Other assets   1,698       1,825  
    Total non-current assets   35,065       19,997  
    Total assets $ 142,345     $ 40,885  
           
    Liabilities and stockholders’ equity      
    Current liabilities:      
    Accounts payable $ 3,316     $ 2,495  
    Accrued expenses and other current liabilities   19,801       10,255  
    Accrued income taxes   1,668       1,626  
    Deferred revenue, current   7,497       7,882  
    Operating lease liabilities, current   744       735  
    Related party line of credit   –       2,000  
    Vendor financing obligations, current   1,462       –  
    Total current liabilities   34,488       24,993  
    Non-current liabilities:      
    Deferred revenue, non-current   3,593       5,071  
    Operating lease liabilities, non-current   946       1,198  
    Vendor financing obligations, non-current   2,928       –  
    Other non-current liabilities   307       221  
    Total liabilities   42,262       31,483  
    Commitments and contingencies      
    Stockholders’ equity      
    Preferred stock, $0.0001 par value; 10,000,000 shares authorized, no shares issued and outstanding as of December 31, 2024; no shares authorized as of December 31, 2023   –       –  
    Common stock, $0.0001 par value; 500,000,000 shares authorized; 28,526,615 shares issued and outstanding as of December 31, 2024; 25,000,000 shares authorized; 20,000,000 shares issued and outstanding as of December 31, 2023   3       2  
    Additional paid-in capital   130,360       –  
    (Accumulated deficit) Retained earnings   (28,012 )     11,392  
    Accumulated other comprehensive loss   (2,268 )     (1,992 )
    Total stockholders’ equity   100,083       9,402  
    Total liabilities and stockholders’ equity $ 142,345     $ 40,885  
           
    SILVACO GROUP, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF INCOME
    (Unaudited, in thousands except share and per share amounts)
                   
      Three months Ended December 31,   Twelve months Ended December 31,
        2024       2023       2024       2023  
                   
    Revenue:              
    Software license revenue $ 13,870     $ 8,738     $ 43,991     $ 39,331  
    Maintenance and service   3,989       3,748       15,689       14,915  
    Total revenue   17,859       12,486       59,680       54,246  
    Cost of revenue   2,422       2,682       12,042       9,354  
    Gross profit   15,437       9,804       47,638       44,892  
    Operating expenses:              
    Research and development   5,283       3,337       20,740       13,170  
    Selling and marketing   3,983       3,833       18,300       12,707  
    General and administrative   7,529       4,570       37,571       17,881  
    Estimated litigation claim   (3,782 )     –       11,306       –  
    Total operating expenses   13,013       11,740       87,917       43,758  
    Operating (loss) income   2,424       (1,936 )     (40,279 )     1,134  
    Loss on debt extinguishment   –       –       (718 )     –  
    Interest income   1,077       2       2,976       6  
    Interest and other expenses, net   (67 )     (95 )     (899 )     (630 )
    (Loss) income before income tax provision   3,434       (2,029 )     (38,920 )     510  
    Income tax provision (benefit)   (723 )     218       484       826  
    Net (loss) income $ 4,157     $ (2,247 )   $ (39,404 )   $ (316 )
    (Loss) earnings per share attributable to common stockholders:              
    Basic and diluted $ 0.14     $ (0.11 )   $ (1.53 )   $ (0.02 )
    Weighted average shares used in computing per share amounts:              
    Basic and diluted   28,734,082       20,000,000       25,672,845       20,000,000  
                   
    SILVACO GROUP, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
    (Unaudited, in thousands)
      Year Ended December 31
        2024       2023  
    Cash flows from operating activities:      
    Net loss $ (39,404 )   $ (316 )
    Adjustments to reconcile net loss to net cash (used in) provided by operating activities:      
    Depreciation and amortization   1,285       601  
    Stock-based compensation expense   26,915       –  
    Provision for credit losses   351       220  
    Accretion of discount on marketable securities, net   (1,685 )     –  
    Estimated litigation claim   11,306       –  
    Loss on debt extinguishment   718       –  
    Change in fair value of contingent consideration   (27 )     325  
    Changes in operating assets and liabilities:      
    Accounts receivable   (5,971 )     1,378  
    Contract assets   (10,293 )     (5,208 )
    Prepaid expense and other current assets   (790 )     133  
    Other assets   57       (267 )
    Accounts payable   1,326       156  
    Accrued expenses and other current liabilities   (2,160 )     2,015  
    Accrued income taxes   74       (23 )
    Deferred revenue   (1,585 )     2,268  
    Other non-current liabilities   109       (102 )
    Net cash (used in) provided by operating activities   (19,774 )     1,180  
    Cash flows from investing activities:      
    Purchases of marketable securities   (99,630 )     –  
    Maturities of marketable securities   33,600       –  
    Purchases of property and equipment   (505 )     (339 )
    Net cash used in investing activities   (66,535 )     (339 )
    Cash flows from financing activities:      
    Proceeds from initial public offering, net of underwriting fees   106,020       –  
    Proceeds from issuance of convertible note, net of debt issuance costs   4,852       –  
    Proceeds from loan facility   4,250       –  
    Repayment of loan facility   (4,250 )     –  
    Proceeds from related party line of credit   –       1,000  
    Repayment of related party line of credit   (2,000 )     (1,000 )
    Proceeds from issuance of common stock for share-based awards   315       –  
    Payroll taxes related to shares withheld from employees   (4,575 )     –  
    Deferred transaction costs   (2,649 )     (650 )
    Contingent consideration   (74 )     (1,002 )
    Payments of vendor financing obligation   (588 )     –  
    Net cash provided by (used in) financing activities   101,301       (1,652 )
    Effect of exchange rate fluctuations on cash and cash equivalents   193       (246 )
    Net increase (decrease) in cash and cash equivalents   15,185       (1,057 )
    Cash and cash equivalents, beginning of period   4,421       5,478  
    Cash and cash equivalents, end of period $ 19,606     $ 4,421  
           
    SILVACO GROUP, INC.
    REVENUE
    (Unaudited)
                             
        2023   2024
        Q1 Q2 Q3 Q4 Year   Q1 Q2 Q3 Q4 Year
    Revenue by Region:                        
    Americas   35 % 29 % 31 % 29 % 31 %   27 % 51 % 31 % 40 % 38 %
    APAC   51 % 62 % 61 % 63 % 59 %   62 % 41 % 58 % 52 % 53 %
    EMEA   14 % 9 % 8 % 8 % 10 %   11 % 8 % 11 % 8 % 9 %
    Total revenue   100 % 100 % 100 % 100 % 100 %   100 % 100 % 100 % 100 % 100 %
                             
    Revenue by Product Line:                        
    TCAD   62 % 62 % 52 % 62 % 59 %   66 % 69 % 59 % 71 % 68 %
    EDA   29 % 20 % 31 % 22 % 26 %   30 % 20 % 24 % 24 % 24 %
    SIP   9 % 18 % 17 % 16 % 15 %   4 % 11 % 17 % 5 % 8 %
    Total revenue   100 % 100 % 100 % 100 % 100 %   100 % 100 % 100 % 100 % 100 %
                             
    Revenue Item Category:                        
    Software license revenue   75 % 71 % 74 % 70 % 73 %   77 % 74 % 62 % 78 % 74 %
    Maintenance and service   25 % 29 % 26 % 30 % 27 %   23 % 26 % 38 % 22 % 26 %
    Total revenue   100 % 100 % 100 % 100 % 100 %   100 % 100 % 100 % 100 % 100 %
                             
    Revenue by Country:                        
    United States   34 % 28 % 28 % 28 % 30 %   51 % 30 % 39 % 39 % 37 %
    China   19 % 29 % 16 % 29 % 23 %   17 % 25 % 23 % 23 % 18 %
    Other   47 % 43 % 56 % 43 % 47 %   32 % 45 % 38 % 38 % 45 %
    Total revenue   100 % 100 % 100 % 100 % 100 %   100 % 100 % 100 % 100 % 100 %
    SILVACO GROUP, INC.
    GAAP to Non-GAAP Reconciliation
    (Unaudited, in thousands except per share amounts)
                   
      Three Months Ended   Twelve Months Ended
      12/31/2024   12/31/2023   12/31/2024   12/31/2023
                   
    GAAP Cost of revenue $ 2,422     $ 2,682     $ 12,042     $ 9,354  
    Less: Stock-based compensation expense   (194 )     –       (2,974 )     –  
    Less: Amortization of acquired intangible assets   (249 )     –       (747 )     –  
    Less: Payroll tax from the IPO lock-up release   (80 )     –       (80 )     –  
    Non-GAAP Cost of revenue $ 1,899     $ 2,682     $ 8,241     $ 9,354  
    GAAP Gross profit $ 15,437     $ 9,804     $ 47,638     $ 44,892  
    Add: Stock-based compensation expense   194       –       2,974       –  
    Add: Amortization of acquired intangible assets   249       –       747       –  
    Add: Payroll tax from the IPO lockup release   80       –       80       –  
    Non-GAAP Gross profit $ 15,960     $ 9,804     $ 51,439     $ 44,892  
    GAAP Research and development $ 5,283     $ 3,337     $ 20,740     $ 13,170  
    Less: Stock-based compensation expense   (535 )     –       (5,091 )     –  
    Less: Executive severance   (215 )     –       (215 )     –  
    Less: Payroll tax from the IPO lock-up release   (397 )     –       (397 )     –  
    Less: Amortization of acquired intangible assets   (43 )     (82 )     (206 )     (339 )
    Non-GAAP Research and development $ 4,093     $ 3,255     $ 14,831     $ 12,831  
    GAAP Sales and marketing $ 3,983     $ 3,833     $ 18,300     $ 12,707  
    Less: Stock-based compensation expense   (388 )     –       (4,319 )     –  
    Less: Payroll tax from the IPO lock-up release   (85 )     –       (85 )     –  
    Less: IPO preparation costs   –       –       (178 )     –  
    Non-GAAP Sales and marketing $ 3,510     $ 3,833     $ 13,718     $ 12,707  
    GAAP General and administrative $ 7,529     $ 4,570     $ 37,571     $ 17,881  
    Less: Stock-based compensation expense   (1,410 )     –       (14,531 )     –  
    Less: Acquisition-related estimated litigation claim and legal costs   (523 )     (515 )     (4,629 )     (1,707 )
    Less: Executive severance   (200 )     –       (200 )     –  
    Less: Payroll tax from the IPO lock-up release   (163 )     –       (163 )     –  
    Less: IPO preparation costs   –       (45 )     (695 )     (1,221 )
    Non-GAAP General and administrative $ 5,233     $ 4,010     $ 17,353     $ 14,953  
    GAAP Estimated Litigation claim $ (3,782 )   $ –     $ 11,306     $ –  
    Add (Less): Acquisition-related estimated litigation claim and legal costs   3,782       –       (11,306 )     –  
    Non-GAAP Litigation claim $ –     $ –     $ –     $ –  
    GAAP Operating expenses $ 13,013     $ 11,740     $ 87,917     $ 43,758  
    Less: Stock-based compensation expense   (2,333 )     –       (23,941 )     –  
    Less: Acquisition-related estimated litigation claim and legal costs   3,259       (515 )     (15,935 )     (1,707 )
    Less: Executive severance   (415 )     –       (415 )     –  
    Less: Payroll tax from the IPO lock-up release   (645 )     –       (645 )     –  
    Less: IPO preparation costs   –       (45 )     (873 )     (1,221 )
    Less: Amortization of acquired intangible assets   (43 )     (82 )     (206 )     (339 )
    Non-GAAP Operating expenses $ 12,836     $ 11,098     $ 45,902     $ 40,491  
    GAAP Operating (loss) income $ 2,424     $ (1,936 )   $ (40,279 )   $ 1,134  
    Add: Stock-based compensation expense   2,527       –       26,915       –  
    Add (Less): Acquisition-related estimated litigation claim and legal costs   (3,259 )     515       15,935       1,707  
    Add: Payroll tax from the IPO lockup release   725       –       725       –  
    Add: Executive severance   415       –       415       –  
    Add: IPO preparation costs   –       45       873       1,221  
    Add: Amortization of acquired intangible assets   292       82       953       339  
    Non-GAAP Operating (loss) income $ 3,124     $ (1,294 )   $ 5,537     $ 4,401  
    GAAP Net (loss) income $ 4,157     $ (2,247 )   $ (39,404 )   $ (316 )
    Add: Stock-based compensation expense   2,527       –       26,915       –  
    Add: Amortization of acquired intangible assets   292       82       953       339  
    Add (Less): Acquisition-related estimated litigation claim and legal costs   (3,259 )     515       15,935       1,707  
    Add: Payroll tax from the IPO lockup release   725       –       725       –  
    Add: Executive Severance   415       –       415       –  
    Add: IPO preparation costs   –       45       873       1,221  
    Add: Loss on debt extinguishment   –       –       718       –  
    Add (Less): Change in fair value of contingent consideration   (9 )     (7 )     (27 )     325  
    Add (Less): Foreign exchange (gain) loss   (14 )     (3 )     404       335  
    Add: Income tax effect of non-GAAP adjustment   (566 )     (27 )     (831 )     (169 )
    Non-GAAP Net (loss) income $ 4,268     $ (1,642 )   $ 6,676     $ 3,442  
    GAAP Net income (loss) per share:              
    Basic and diluted: $ 0.14     $ (0.11 )   $ (1.53 )   $ (0.02 )
    Non-GAAP Net income (loss) per share:              
    Basic $ 0.15     $ (0.08 )   $ 0.26     $ 0.17  
    Diluted $ 0.15     $ (0.08 )   $ 0.25     $ 0.17  
    Weighted average shares used in GAAP and non-GAAP net income (loss) per share:              
    Basic   28,734,082       20,000,000       25,672,845       20,000,000  
    Diluted   28,849,041       20,000,000       26,841,901       20,000,000  
                   

    Investor Contact:
    Greg McNiff
    investors@silvaco.com

    Media Contact:
    Farhad Hayat
    press@silvaco.com

    The MIL Network –

  • MIL-OSI Global: Investors value green labels — but not always for the right reasons

    Source: The Conversation – Canada – By Vasundhara Saravade, Postdoctoral Fellow, Institute of the Environment, L’Université d’Ottawa/University of Ottawa

    Imagine you are choosing between two similar investment options. One has a green label, promising to fund climate-friendly projects and assets. The other offers a slightly higher return, but has no green label. Which do you choose?

    My recent study explored this question. My co-researchers and I found that, for most retail investors — individual, non-professional investors — the presence of a green label mattered more than the actual environmental impact of the bond or the higher financial return of a non-green option.

    This finding raises critical questions about how sustainable finance is marketed and whether green labels alone are enough to drive real environmental change.

    Green bonds and retail investors

    Green bonds are a financial tool designed to fund environmentally friendly projects. Institutional investors and governments have embraced them, but their adoption by everyday retail investors remains low.

    The Canadian market was one of the first to provide access to retail-level green bonds, but demand for such bonds was always oversubscribed. Low interest rates made it difficult to balance investor returns with lending profits. This imbalance squeezed sustainable investment firms like CoPower, which ultimately led to its green bond model winding down.

    With the urgent need to attract capital for climate financing, the role of retail investors is now a key topic of discussion. In 2021, these investors accounted for 52 per cent of global assets under management in 2021 — a figure expected to jump to nearly 61 per cent by 2030. This presents a massive opportunity to mobilize private capital toward sustainable finance.

    However, before retail investors venture into the green bond market, the sustainable finance sector must address a key question: do people invest in green bonds because they believe in their environmental benefits or simply because of the “green” label?

    And, more importantly, does the green label alone persuade retail investors to accept a “greenium” — choosing a lower-return green bond over a higher-return non-green bond — like professional investors do?

    The ‘green-label effect’ is real

    To determine this, my co-researchers and I conducted an experiment with over 1,000 self-identified retail investors to see how different framing techniques — such as labels, environmental impact and reporting descriptions — shaped their willingness to invest in green bonds.

    Our study identified a “green label effect.” Most retail investors relied on green labels as a shortcut to save time and avoid having to evaluate the environmental impact of a bond. Investors often relied on simplified decision cues like labels and financial returns to navigate complex financial information.



    Read more:
    Sustainable finance: Canada risks being left behind in low-carbon economy

    However, a small subset of environmentally conscious investors researched the validity of green bonds and aligned their investments with their values, even at the cost of lower returns.

    This highlights the need for green bonds that offer a competitive return, given that a majority still invest based on financial returns in addition to labelling. Labelling alone is not enough to drive mainstream retail investment in sustainable finance.

    Our study also found that certain types of personal characteristics made people more likely to invest in labelled green bonds, even if those bonds had the lowest financial returns. Investors with a high-risk tolerance were more likely to invest in green bonds.

    Additionally, previous investment experience played a role. Those who had moderately invested in stocks, had none to high levels of experience investing in bonds.

    The greenwashing challenge

    Our findings highlight both the potential and pitfalls of sustainable finance. The popularity of green-labelled bonds suggests that retail investors are open to sustainable investment and would help to drive growth in this market considerably.

    However, the fact that many choose labels without finding out whether the bond is actually green raises concerns about greenwashing. This practice occurs when companies exploit sustainability branding and use green labels on non-green bonds to avoid delivering environmental impact.

    If investors rely too much on green labels without verifying the actual impact of their investments, they may inadvertently support projects that fail to make a meaningful difference.

    As green finance regulations evolve, governments must strengthen labelling standards and transparency. This would ensure that labelled green bonds deliver on their promises.

    Stronger green taxonomies and consumer oversight mechanisms would help prevent misleading claims, protect investors and ensure sustainable finance can scale quickly. Without these safeguards, green bonds could lose credibility and fail to scale effectively.

    What should policymakers do?

    To expand the green bond market and align it with Canada’s climate goals, policymakers could introduce tax-free government green bonds or green infrastructure bonds. These would incentivize retail investors and raise their awareness of sustainable finance.

    Policymakers could allow banks to add green bonds to registered products like tax-free savings accounts or registered retirement savings plans. They could create new green registered products that would encourage individual-level savings and investment, like the first home savings account.

    Making verified climate-related financial disclosures easier to use could help retail investors better understand the impact of green products. This would reduce reliance on labels alone and encourage more informed decision-making.

    Green bonds have the potential to be a powerful tool in the fight against climate change, but only if they’re backed by real accountability. As our study shows, labels matter a lot — but what’s behind them matters most.

    Vasundhara Saravade is affiliated with the Smart Prosperity Institute.

    – ref. Investors value green labels — but not always for the right reasons – https://theconversation.com/investors-value-green-labels-but-not-always-for-the-right-reasons-251021

    MIL OSI – Global Reports –

  • MIL-OSI Security: Putnam County Business Owner Pleads Guilty to Employment Tax Crimes

    Source: Office of United States Attorneys

    HUNTINGTON, W.Va. – Dean E. Dawson, 65, of Hurricane, pleaded guilty today to one count of willful failure to pay over employment taxes on behalf of his business.

    According to court documents and statements made in court, Dawson operated RPC Group LLC, a Hurricane, West Virginia, real estate appraisal business. Dawson was responsible for withholding employment taxes from RPC Group’s employees and paying over those funds to the IRS. Between 2015 and 2022, however, Dawson willfully failed to pay over to the IRS the employment taxes withheld from his employees’ paychecks. He also used the RPC Group’s business accounts to pay for personal expenses, including personal credit cards and his wife’s home mortgage, and issued checks to his wife from RPC Group even though she was not an employee of the business. In addition, from 2018 to 2023, Dawson did not file personal tax returns or pay income taxes. In total, Dawson caused a tax loss to the IRS exceeding $250,000.

    Dawson is scheduled to be sentenced on June 23, 2025, and faces a maximum penalty of five years in prison, up to three years of supervised release, and a $250,000 fine. Dawson also owes restitution in an amount to be determined by the Court.

    Acting Deputy Assistant Attorney General Karen E. Kelly of the Justice Department’s Tax Division and Acting U.S. Attorney Lisa G. Johnston for the Southern District of West Virginia made the announcement.

    The Internal Revenue Service-Criminal Investigations (IRS-CI) is investigating the case.

    United States District Judge Robert C. Chambers presided over the hearing. Trial Attorneys Brian E. Flanagan and Rebecca A. Caruso of the Tax Division and Assistant U.S. Attorney Jonathan T. Storage for the Southern District of West Virginia are prosecuting the case.

    A copy of this press release is located on the website of the U.S. Attorney’s Office for the Southern District of West Virginia. Related court documents and information can be found on PACER by searching for Case No. 3:24-cr-120.

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    MIL Security OSI –

  • MIL-OSI Asia-Pac: MOTHER IS EPITOME OF COMPASSION, AFFECTION AND SACRIFICE; TAKING CARE OF HER HEALTH IS LIKE WORSHIP – LOK SABHA SPEAKER

    Source: Government of India (2)

    MOTHER IS EPITOME OF COMPASSION, AFFECTION AND SACRIFICE; TAKING CARE OF HER HEALTH IS LIKE WORSHIP – LOK SABHA SPEAKER

    LOK SABHA SPEAKER LAUNCHES THIRD PHASE OF SUPOSHIT MAA ABHIYAN IN BUNDI WITH A VISION OF BRINGING CHANGE IN THE LIVES OF WEAKEST IN THE SOCIETY

    LAUNCH AND FOUNDATION STONE LAYING OF DEVELOPMENT WORKS WORTH RS 17.13 CRORE

    Posted On: 05 MAR 2025 8:50PM by PIB Delhi

    Lok Sabha Speaker Om Birla on Wednesday launched the third phase of Suposhit Maa Abhiyan. Addressing the public at the function organized at the Police Parade Ground in Bundi, Shri Birla said that this campaign is dedicated to the empowerment of the mother power and protection of health of pregnant mothers and newborns. Shri Birla said that Suposhit Maa Abhiyan was launched with a vision of bringing change in the lives of weakest people in the society.

    Mentioning that Suposhit Maa Abhiyan is not just a campaign, but it has also taken the form of a mass movement, Shri Birla said that if the mother is healthy, the child will be healthy and only a healthy child will build a strong society. This campaign is an attempt to lay the foundation of a healthy and self-reliant society by making the mother power aware, he added. Shri Birla noted that mother is not only a life-giver, but is also the epitome of compassion, affection and sacrifice. Taking care of their health is no less than worship. Our goal is to reach out to women of every needy family in the society and make them well-nourished, Shri Birla stressed.

    In the programme, while giving the gift of development works in Bundi and Talera Panchayat Samiti areas, Shri Birla also inaugurated and laid the foundation stone of various development works worth Rs 17.13 crore.

    Lok Sabha Speaker started the campaign by presenting nutrition kits to pregnant women. For the campaign, with the help of social workers, more than 1800 pregnant women from deprived families have been identified, who will be provided health check-up and consultation facilities along with free nutrition kits every month till delivery.

    Health cards have also been made for continuous monitoring of the health of women. Through this, along with distribution of nutrition kits in the follow-up camp organized every month, doctors will be available to arrange various types of free health checkups and consultation to these women. Its report will be recorded in the health card, which will help in arranging follow-ups. Apart from the necessary precautions to be taken for health, these women will also be given basic information for proper care of the children.

    5 successful years of the campaign

         Launch on 29 February 2020

         Start of the second phase on 17 May 2022

         Start of the third phase in Kota on 3 February

         Distribution of more than 1 lakh nutrition kits

         More than 18 thousand beneficiaries

         More than 800 distribution camps

         Increase in normal delivery

         Birth of healthy baby

         Increase in weight of pregnant women

         Significant reduction in maternal-infant mortality rate

    ***

    AM

    (Release ID: 2108651) Visitor Counter : 71

    Read this release in: Hindi

    MIL OSI Asia Pacific News –

  • MIL-OSI Asia-Pac: Model Women-Friendly Gram Panchayats Initiative Launched; One Model Gram Panchayat to be developed in each District

    Source: Government of India (2)

    Model Women-Friendly Gram Panchayats Initiative Launched; One Model Gram Panchayat to be developed in each District

    Real-Time Dashboard Launched for Monitoring Women-Friendly Panchayats’ Progress

    Panchayat Collaboration Crucial for Success of Health Initiatives in Villages: MoS Smt. Anupriya Patel

    MoS Prof. S.P. Singh Baghel Calls on Women Sarpanchs to Spearhead Implementation of Central Government Schemes in Gram Panchayats

    Posted On: 05 MAR 2025 6:50PM by PIB Delhi

    The National Convention on Model Women-Friendly Gram Panchayats was organized by the Ministry of Panchayati Raj in New Delhi on 5th March, 2025, with an aim to establish at least one Model Gram Panchayat in each District in the country that is both women and girl friendly. The national convention, held as part of the International Women’s Day 2025 celebrations, witnessed participation from over 1500 elected representatives and officials from selected Gram Panchayats across the country in physical and virtual mode. The event was graced by Union Minister of State for Health & Family Welfare, Smt. Anupriya Patel and Union Minister of State for Panchayati Raj Prof. S. P. Singh Baghel. Senior officials of the ministry including Shri Vivek Bharadwaj, Secretary and Shri Sushil Kumar Lohani, Additional Secretary along with representatives from various Ministries/Departments, State Institutes of Rural Development & Panchayati Raj (SIRD&PRs), and international organizations, including United Nations Population Fund (UNFPA), also participated in the event. The National Convention unveiled initiatives including Virtual Training Programs for Model Women-Friendly Gram Panchayats and a comprehensive Real-Time Monitoring Dashboard for gauging the progress of these women friendly gram panchayats in India. This digital platform is a technological intervention to measure, analyze, and improve women’s participation and welfare at the grassroots level. The dashboard promises real-time insights and data-driven interventions to support women leaders in the country.

    In her address, Union Minister of State for Health & Family Welfare Smt. Anupriya Patel presented a comprehensive overview of several health initiatives of the central government designed to support women and children. She said that women elected representatives have a key role in ensuring that schemes of the central government reach the most vulnerable. The Union Minister of State highlighted that there is a Village Health, Sanitation, and Nutrition Committee, present in every Gram Panchayat that makes a robust framework for community health. The Ayushman Aarogya Mandir offers 12 types of medical services, including geriatric care, dental care, screening for various diseases including cancer, telemedicine etc. She said that women pradhans need to actively educate their panchayats about these initiatives of the government such that maximum people can benefit. Smt. Anupriya Patel also laid emphasis on programs like Janani Suraksha Yojana and Janani Shishu Suraksha Karyakram that focus on maternal and child health, promoting institutional deliveries and establishing a culture of safe motherhood. She said that Panchayat-level collaboration is crucial in ensuring the success of health-related initiatives at village level, reinforcing Prime Minister Narendra Modi’s vision of “Sashakt Mahila, Sashakt Panchayat leads to Sashakt Bharat”.

    Union Minister of State for Panchayati Raj Prof. S.P. Singh Baghel announced the selection of 770 Model Women-Friendly Gram Panchayats i.e. one Model Gram Panchayat in each District, for specialized training for development of leadership skills. Prof. Baghel urged women gram pradhans to take the lead in implementing central government schemes like Pradhan Mantri Jeevan Jyoti  Bima yojana, Pradhan Mantri Suraksha Bima yojana, pension schemes for widows and divyanjan, Ayushman Bharat and initiatives like organ donation etc.

    Shri Vivek Bharadwaj, Secretary, Ministry of Panchayati Raj emphasized that the Model Women-Friendly Gram Panchayat initiative represents an intensive, result-oriented intervention to advance women and girls participation in all spheres of life. Shri Bharadwaj stressed that women are inherently capable of taking leadership roles and pursuing their aspirations, calling on society and Panchayats to create supportive ecosystems that enable women to fully utilize their potential for national growth. Drawing inspiration from successful regional gram panchayat models in Kerala, Odisha, and Rajasthan, Dr. Deepa Prasad, Chief of Programmes, UNFPA, highlighted the pivotal role of local governance in ensuring women’s protection and empowerment. She highlighted Kerala’s Jagratha Samithi, a vigilance committee dedicated to safeguarding women and children, Odisha’s initiatives aimed at preventing social evils such as child marriage, and UNFPA’s collaboration with the Rajasthan Panchayati Raj Department to develop women-friendly and child-friendly Gram Panchayats. This National Convention marks a significant step further from women-centric towards women-led development, reflecting the progress made over the past eleven years. A key milestone in this journey has been the enactment of the Women’s Reservation Bill (Nari Shakti Vandan Adhiniyam), a landmark legislation ensuring greater participation of women in policy-making along with basic initiatives like providing toilets, clean fuel, menstrual hygiene, education, nutrition etc. that comprehensively address a woman’s basic needs. A nationwide Mahila Gram Sabha is scheduled to be organized on 8th March 2025 in all Gram Panchayats across the country. This will serve as a platform for furthering the objectives of the Model Women-Friendly Gram Panchayat initiative at the grassroots level, reinforcing the commitment to gender equality and sustainable rural development.

    ***

    Aditi Agrawal

    (Release ID: 2108572) Visitor Counter : 94

    MIL OSI Asia Pacific News –

  • MIL-OSI Security: Nigerian Man Extradited to the United States to Face Computer Intrusion and Theft Charges

    Source: Office of United States Attorneys

    Defendant allegedly conspired to use stolen taxpayer information to file over 1,000 fraudulent tax returns seeking millions of dollars in tax refunds

    BOSTON – A Nigerian national living in Mexico has been extradited to the United States for his role in a scheme to break into Massachusetts tax preparation firms’ computer networks and to file fraudulent tax returns.

    Matthew A. Akande, 36, was arrested in October 2024 at Heathrow Airport in the United Kingdom at the request of the United States and extradited to the United States on March 5, 2025. He appeared in federal court in Boston today. Akande was indicted by a federal grand jury in July 2022 with one count of conspiracy to obtain unauthorized access to protected computers in furtherance of fraud and to commit theft of government money and money laundering; one count of wire fraud; four counts of unauthorized access to protected computers in furtherance of fraud; 13 counts of theft of government money; and 14 counts of aggravated identity theft.

    Co-conspirator, Kehinde H. Oyetunji, 33, a Nigerian national living in North Dakota, pleaded guilty in December 2022 to one count of conspiracy to obtain unauthorized access to protected computers in furtherance of fraud and to commit theft of government money and money laundering. Oyetunji’s sentencing hearing has not yet been scheduled by the Court.

    Between in or about June 2016 and June 2021, Akande, Oyetunji and others are alleged to have worked together to steal money from the United States government using taxpayers’ personally identifiable information (PII) to file fraudulent tax returns in the taxpayers’ names. In addition, between in or about February 2020, the scheme involved stealing taxpayers’ PII from Massachusetts tax preparation firms via phishing attacks and computer intrusions.

    To carry out the scheme, Akande is alleged to have caused fraudulent phishing emails to be sent to five Massachusetts tax preparation firms. The emails purported to be from a prospective client seeking the tax preparation firms’ services but in truth were used to trick the firms into downloading remote access trojan malicious software (RAT malware), including malware known as Warzone RAT. Akande allegedly used the RAT malware to obtain the PII and prior year tax information of the tax preparation firms’ clients, which Akande then used to cause fraudulent tax returns to be filed seeking refunds. The tax returns directed that the fraudulent tax refunds be deposited in bank accounts allegedly opened by Oyetunji and others. Once the refunds were issued, Oyetunji and others withdrew the stolen money in cash in the United States and then transferred a portion to third parties in Mexico, allegedly at Akande’s direction, while keeping a portion for themselves. In total, Akande and his coconspirators are alleged to have filed more than 1,000 fraudulent tax returns seeking over $8.1 million in fraudulent tax refunds over approximately five years. They are alleged to have successfully obtained over $1.3 million in fraudulent tax refunds.

    Federal authorities encourage all businesses that suspect they have been the target and/or victim of a cyberattack to file a complaint with the Internet Crime Complaint Center at www.ic3.gov. Taxpayers and tax preparation firms that suspect they have been the target and/or victim of a phishing attack can also forward phishing email(s) to phishing@irs.gov.

    The charge of conspiracy provides for a sentence of up to five years in prison, three years of supervised release and a fine of $250,000 or twice the gross gain or loss, whichever is greater. The charge of wire fraud provides for a sentence of up to 20 years in prison, three years of supervised release and a fine of $250,000 or twice the gross gain or loss, whichever is greater. The charge of unauthorized access to protected computers in furtherance of fraud provides for a sentence of up to five years in prison, three years of supervised release and a fine of $250,000 or twice the gross gain or loss, whichever is greater. The charge of theft of government money provides for a sentence of up to 10 years in prison, three years of supervised release and a fine of $250,000 or twice the gross gain or loss, whichever is greater. The charge of aggravated identity theft provides for a mandatory sentence of two years in prison to be served consecutive to any other sentence imposed, one year of supervised release and a fine of $250,000 or twice the gross gain or loss, whichever is greater. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes which govern the determination of a sentence in a criminal case.

    United States Attorney Leah B. Foley; Jodi Cohen, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division; and Thomas Demeo, Acting Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston made the announcement. The Justice Department’s Office of International Affairs coordinated with authorities in the United Kingdom to secure the extradition of Akande. Assistant U.S. Attorney David M. Holcomb of the Securities, Financial & Cyber Fraud Unit is prosecuting the case.

    The details contained in the charging documents are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

    MIL Security OSI –

  • MIL-OSI USA: 03.05.2025 Cruz Resolution Overturning IRS Rule on Cryptocurrency Passes By Overwhelming Bipartisan Majority

    US Senate News:

    Source: United States Senator for Texas Ted Cruz
    WASHINGTON, D.C. – Yesterday, the United State Senate passed a resolution authored by U.S. Sen. Ted Cruz (R-Texas) to overturn a Biden administration midnight rule imposing regulations on software developers of decentralized financial (DeFi) technology. The resolution passed by an overwhelming bipartisan majority, 70-28.
    The rule defined those developers as “brokers,” even though they did not touch any of the cryptocurrency being exchanged. The resolution is the first crypto-related measure to pass the Senate this Congress, and will now head to the House of Representatives for consideration.
    Upon passage, Sen. Cruz said, “Last night’s vote was a victory for American innovation. In a midnight move, the Biden administration attempted to undermine American privacy and impose burdensome regulations on digital currency. Yesterday, an overwhelming bipartisan majority voted in support of my legislation to rescind this harmful regulation. I urge the House to pass this legislation expeditiously.”
    The resolution was co-sponsored by Sens. Cynthia Lummis (R-Wyo.), Thom Tillis (R-N.C.), Tim Sheehy (R-Utah), and Ted Budd (R-N.C.). Rep. Carey introduced the joint resolution in the House of Representatives.
    Read the joint resolution here.
    Blockchain Association CEO Kristin Smith said yesterday, “Today’s a bright day for DeFi – and all of crypto – in the United States. An incredible showing of bipartisan support passed Senator Ted Cruz’s Congressional Review Act resolution to roll back the DeFi-killing broker rule out of the Senate. It’s a hopeful sign that shows there is true bipartisan agreement in Washington that the American crypto industry deserves the freedom to grow and innovate here in the United States.”
    BACKGROUND
    The Internal Revenue Service rule that would be repealed by Sen. Cruz’s resolution in Gross Proceeds Reporting by Brokers That Regularly Provide Services Effectuating Digital Asset Sales. The rule was finalized on December 30, 2024.
    Sen. Cruz’s resolution was endorsed by:
    The Digital Chamber, Blockchain Association, DeFi Education Fund, Cedar Innovation Foundation, Uniswap, Paradigm, Cryptocurrency Council for Innovation, DCG, Stand With Crypto, Coin Center, Texas Blockchain Association, Crypto Freedom Alliance of Texas, Pennsylvania Blockchain Coalition, Ohio Blockchain Council, North Carolina Blockchain Initiative, South Carolina Blockchain, Virginia Blockchain Council, and California Blockchain Advocacy Coalition. The Club for Growth issued a “key vote” urging lawmakers to vote for the resolution.

    MIL OSI USA News –

  • MIL-OSI Russia: Transcript of Press Briefing on the Completion of the Third Review for the IMF Extended Fund Facility for Sri Lanka

    Source: IMF – News in Russian

    March 5, 2025

    PARTICIPANTS:

    PETER BREUER

    Senior Mission Chief for Sri Lanka

    KATSIARYNA SVIRYDZENKA

    Deputy Mission Chief for Sri Lanka

    MARTHA TESFAYE WOLDEMICHAEL

    Resident Representative in Sri Lanka

    MODERTOR:

    RANDA ELNAGAR

    Senior Media Officer

    TRANSCRIPT:


    Ms. Elnagar:      Good morning to our participants who are joining us from Asia and good evening to our participants in DC. Welcome to the press conference on of the Third review of Sri Lanka’s Extended Fund Facility Arrangement with the International Monetary Fund. I am Randa Elnagar, with the IMF’s communications department.

    I am joined today by three speakers. Peter Breuer, IMF’s Senior Mission Chief for Sri Lanka; Katsiaryna Svirydzenka, Deputy Mission Chief for Sri Lanka; and Martha Tesfaye Woldemichael, IMF’s Resident Representative in Sri Lanka.

    By now you should have seen the press release, which we issued on Friday and the staff report is not on IMF.org. First, Peter will give some opening remarks, and then we will take your questions.

    We are kindly asking you to mute your microphones throughout the briefing, unless you are asking a question. Peter the floor is yours.

    started transcription


    Mr. Breuer:     Thank you, Randa. Good morning, all, thank you very much for being here and for your interest in Sri Lanka’s IMF-supported economic reform program.

    I am pleased to announce that, on Friday February 28, the IMF Executive Board approved the third review under the 48-month Extended Fund Facility Arrangement with Sri Lanka. This provides the country with immediate access to about US$334 million to support its economic policies and reforms.

    It brings the total IMF financial support dispersed so far to about $1.3 billion.
    The IMF continues to support Sri Lanka’s efforts to restore and maintain macroeconomic stability and debt sustainability while protecting the poor and vulnerable rebuilding external buffers. Safeguarding financial sector stability and enhancing growth oriented structural reforms, including by strengthening governance.

    The IMF Executive Board’s approval to complete the third review recognizes the strong program performance. All quantitative targets for end December 2024 were met, except for the indicative target on social spending.
    Most structural benchmarks do by end January 2025 were either met or implemented with delay.

    Turning to through the macroeconomic situation, it is encouraging to see that reforms in Sri Lanka are bearing fruit with the economic recovery gaining momentum, inflation remains slow.

    Revenue collection is improving and reserves continue to accumulate.
    Economic growth averaged 4.3% since growth resumed in the third quarter of 2023.
    The recovery is expected to continue in two thousand 2025 now. Despite these positive developments, the economy is still vulnerable.
    It is critical to sustain the reform momentum to ensure macroeconomic stability and debt sustainability.

    And to promote long term inclusive growth, there is no room for policy errors.
    Let me emphasize that sustained revenue mobilization is crucial to restoring fiscal sustainability.

    And ensuring that the government can continue to provide essential services.
    Boosting tax compliance and refraining from tax exemptions are key to maintaining support for economic reforms.

    Let me also emphasize that to ease economic hardship and ensure the poor and vulnerable can participate in Sri Lanka’s recovery, it is important to meet social spending targets and continue with reforms of the social safety net going forward. Social support needs to be well targeted towards the.

    Most disadvantaged, so as to promote inclusive growth with limited fiscal space.
    Restoring cost recovery, electricity pricing without delay is needed to contain fiscal risks from state owned enterprises.
    A smoother execution of capital spending within the fiscal envelope would foster medium term growth.

    The recent successful completion of the bond exchange is a major milestone towards restoring debt sustainability, timely finalization of bilateral agreements with creditors in the official creditor committee, and with remaining creditors is a priority now. Regarding monetary policy, I would like to highlight that it should prioritize maintaining price. Stability supported by sustained commitment to prohibit monetary financing and.

    To safeguard central bank independence. Continued exchange rate, flexibility and gradually phasing out the balance of payments measures remain critical to rebuild external buffers and facilitate rebalancing.

    As for the financial sector, resolving non performing loans, strengthening governance and oversight of state owned banks and improving the insolvency and resolution frameworks are important priorities to revive credit growth and support the economic recovery.

    Finally, prolonged structural challenges need to be addressed to unlock Sri Lanka’s long term potential, including steadfast implementation of governance reforms.
    I would like to thank the authorities for their commitment and excellent collaboration.

    Let me also take this opportunity to announce that as part of a standard staff rotation process, I will soon be transitioning from the role of mischief for Sri Lanka.
    And I will be handing over to the next mission Chief Evan Papageorgiou, during the next mission. It has been an honor to accompany Sri Lanka on his journey out of this.

    Severe crisis for nearly three years. While there are more challenges ahead, the IMF team will remain a steadfast partner for Sri Lanka and its people on the road to a more sustainable and inclusive recovery.
    I will be moving to another assignment soon and wish the people of Sri Lanka continued success with the economic recovery.
    With this, let me hand it back to Rhonda. Thank you.


    Ms. Elnagar:     Thank you so much, Peter.
    Colleagues, please raise your hand and identify yourself if you want to ask your question and turn on your camera, if possible and the mic. Thank you. I see the first hand, please.


    QUESTIONER:     Thank you, Randa. This is Shihar Anis from economy next.
    I hope you can hear you.


    Ms. Elnagar:     We can hear you well, Shihar. Thank you.


    QUESTIONER:     OK. So my question is now there is a delay in the SOE restructuring because we don’t see the same speed that the previous government was doing, the SOE restructuring this government has been. Basically, they are not into privatization, but they are looking into a different model. How concerned are you on that? You know, delay or the current restructuring model.
    Thank you.


    Ms. Elnagar:     Thank you. We’ll take another couple of questions and then answer them in groups.


    Ms. Elnagar:     The audio. Zulfiq there is a lot of static on your mic.


    QUESTIONER:     Hope you can hear me. I have two questions. That is, it has come to light that the Sri Lankan Government plans not to proceed with the imputed rental income tax as a revenue measure. So has this been discussed with the IMF and is there any other alternative that is being put forward and at the same time, what is IMF stake on the budget that was presented recently?


    Ms. Elnagar:     Let’s take another question. Sampath, please.


    QUESTIONER:     Hi I’m Sampath Dissanayake from BBC Sinhala service.
    The government is increasing the tax as per the IMF advice to increase government revenue. The number of people receiving Social Security benefit in benefits in Sri Lanka is increasing annually. So do you believe that the increase in tax burden is increase for reason for this?


    Ms. Elnagar:      Peter, we can take these three questions.


    Mr. Breuer:     Yes, thank you very much. So let me answer some of the questions.
    On the budget and fiscal, and maybe Katie can answer the question on the.
    SOE reforms so the. Imputed rental income tax was a measure proposed by the previous administration as part of a possible revenue package for 2025, and the new authorities have proposed a slightly different package that is aligned with their mandate and priorities. And staff and the authorities have assessed that this package is sufficient to meet the revenue targets under the program. Now of course, should those measures prove insufficient, then additional revenue measures would be needed. And so that also. Ties in with the question on the budget and tax revenues. So yes, we have looked at the budget. And have, of course, disgusted with the authorities. There’s more detailed explanation in the staff report that should be online now, so there’s a table on page 12 that kind of lists some of the main measures needed to. reach the goal for tax revenue for next year. Yeah, reallybthe objective here is as you know tax revenue was a key driver of the crisis in 2022.
    Sri Lanka was the lowest that the country with the lowest tax take amongst.
    Middle income countries and low income countries in the world, and so it has made significant progress since then. Tax as a share of GDP, he has increased by 5 percentage points from somewhere. You know 7 to somewhere 12.4% or so last year. So that’s a significant increase, but by no means is excessive and. The essential services that the government provides need to be funded and for that reason.
    Working on ensuring that there is sufficient tax revenue remains a priority.
    And so social services, which was the 3rd question is just a portion of the overall essential services that that the government provides and is just a component on that actually. Maybe Marta can add on that point and cut you a can speak to the SOE reforms.


    Ms. Svirydzenka:     So should I go first? OK. So on the on the SOE restructuring, the most crucial element is that the state owned enterprises are managed in a prudent manner so as to avoid the accumulation of losses or debts that then would eventually need to be repaid by the taxpayers. And in that sense, the SOEs can be managed prudently while remaining state owned or they can be divested partially or completely.

    We are reassured by the authorities commitment to ensure that this enterprises do not become a burden for the budget or for the government debt in terms of other key elements under the program has been the cost, reflective pricing of services provided by so especially in the area of electricity and fuel prices. Other commitments under the program include making SOEs more transparent, in particular by publishing audited financial statements of the largest, SOEs in a timely manner.

    And then finally, to allow the economy to grow, it is important that the consumers of services receive the best value for the price of being charged. So this involves running, SOEs in the most efficient manner and ensuring that they are following the best governance principles. So in that sense, we’re quite satisfied with the progress, yes.


    Martha Tesfaye Woldemichael:     So let me maybe come in then to compliment a bit Peter’s response on the social spending, right. So there’s a question. Why social spending is increasing? I think this is a good opportunity to remind that protecting the poor and vulnerable is really an important component of the EFF program. So the EFF supports this objective through the different reforms through macro stabilization. But importantly, there is also a floor on social spending in the program that we assess on a quarterly basis. So this means the government has to spend a minimum amount to protect the poor and vulnerable.

    So in this context, the key commitment is really for the authorities to continue strengthening the coverage, the adequacy and the targeting of social spending. So recent announcement related to the expected decrease in the payments, for instance for the poor and extremely poor categories under a ASWASUMA or the.
    Announcement that the payments would also increase for the elderly, the disabled and chronic kidney patients are aligned with the authorities commitments to continue strengthening, strengthening social safety Nets and I think it is also very important to make sure that this coverage under the ASWASUMA program. Is above the poverty rates that are currently observed. I think I will stop here. Thank you very much. Back to you, Randa.


    Ms. Elnagar:     Thank you, Martha. We’re first going to take a question from Kelum.
    I think Shihar you had your hand raised, so it’s from the first question. So if you can, please put your hand down because it’s a bit confusing, but we’re going to go to Kellum 1st and then Asante. So Kelum, please go ahead.


    QUESTIONER:     Thank you. Can you hear me?


    Ms. Elnagar:     Yes.


    QUESTIONER:     Yes, I’m Kelum Bandara, from Daily Mirror newspaper. So my question is wanting the overall assessment about the budget, actually that was answered was that next day and the next question is, how important is it for the government to proceed with this Economic Transformation Act to reach the economic targets? Actually in searching by MFN or for the broader infrastructure of the country.


    Ms. Elnagar:      Thank you Asante. If you can, please pose your question.


    QUESTIONER:     Yeah, so, the government has started the import duty on vehicles, which just knocked out earlier. Yeah, I think all the taxes were kind of like excise taxes. And so have you made any assessment on whether this will lead to an increase in assembled vehicles, which earlier didn’t get this tax protection and how much leakage of revenue might happen to the assembled sector and whether any effect to publish a kind of a tax expenditure statement to say how much of the import duties lost due to any increase or the sales of the assembled vehicles which are like got CKD, I think tax free the parts and also have you had any discuss? With the central bank. On offloading their government securities now that the Treasury bills

    Ms. Elnagar: Thank you, Asantha. There is a question in the chat which we’re going to take and then move to the ones online. Amal, you didn’t verify your organization.


    QUESTIONER:     Oh, and I have actually done that. I’m from AFP, the French news agency, Agence France Press.


    Ms. Elnagar:     Hi would you like to ask? Yeah, because you post in the in the chat.


    QUESTIONER:     Oh yeah. I mean, if you want to save time, can just answer that.
    I mean basically I was trying to ask Peter how concerned you are about sort of emerging labor unrest, particularly now in the medical field. The doctors are threatening to go on strike from tomorrow, although there is a pay increase that the increase is less than the. Reduction of their allowances. So this is something that affects a lot of not just the medical sector. So how concerned are you that this kind of growing unrest, labor unrest, how it will affect the overall IMF backed program?


    Ms. Elnagar:      Peter, do you want to take another question?
    So they are three. So I think Indiqa is next.


    Mr. Breuer:      Well, there’s actually an under. It feels like there’s a bunch of questions.
    Should we try and answer these?


    Ms. Elnagar:      OK. Sounds good.


    Mr. Breuer:      And maybe Katya can speak to the Economic Transformation Act.
    And also to the central bank question so. On this important question with respect to the potential for unrest. Well, I suppose there is potential, but I think what really should be remembered is that this budget really sought to address some of the concerns that the government and ourselves have hurt that. You know, civil servants have been concerned about. The wages that they have been receiving and so.
    There is for the first time in a long time, an increase in civil service wages, while at the same time the personal income tax regime is were being changed and reducing personal income taxes considerably, at least for some. Income earners, including civil servants, you have to remember who are the ones who earn an income and pay taxes that really is the upper 20% of income earners in Sri Lanka. There has been a massive crisis in 2022 with huge costs to the population of Sri Lanka and in order for the government to keep on providing the essential services that the citizens of Sri Lanka expected, expect the government to provide and in order to bring along the poorer segments of society. Everyone who can needs to make a sacrifice.
    This is how the society can pull together and continue to function, and so.
    I think we all know how painful this crisis has been there’s no doubt about it.
    We have travelled around the country, we have met with many people.
    You know the plantation workers in Noro, alia have shown us their income statements and their bills. And it was very, very clear that this is a very severe crisis, but how else to address it. So, sticking with the reforms is really the best way out for Sri Lanka to assure its sustainability, and I think it’s important for everyone in Sri Lanka to recognize that.

    If you put it into the broader perspective the adjustment, this is the last budget.
    Where there is still a bit of an increase in in revenue is needed 1.5 percentage points of GDP, but all the hard adjustment has already taken place in the previous two years. You know revenue have increased 5 percentage points of GDP over the last two years. This is, you know, the last sort of big push. Not quite as big as in the previous years, and there after it’ll be much easier going forward.

    So on the cars I mean that’s a specific question. Does is there some import substitution? I can’t answer that. I would assume that after five years or so of a ban of imported cars that there will be some demand for finished cars from overseas.
    I do take your point that it’s possible that there may be some assembly of cars domestically.

    Katya, can you answer the other two questions please?


    Ms. Svirydzenka:     Sure. So on the economic transformation, bill, we understand there was a recent announcement that the new government will propose amendments to the bill. And so we look forward to reviewing the amended economic transformation bill. We expect it to be consistent with program objectives, including for example with the authorities’ commitment to refrain from granting tax.
    Incentives until the STP act is revised to provide clear and transparent criteria on the granting of tax incentives on the. Central Bank Securities, I understand the question was that the Central Bank has sold T-bills but has a stock of on marketable bonds. And this is correct. And under the program at this point, because there’s no market for this restructured bonds, we do not envision they unwinding of this stock and over the next 12 months you can see it in the program targets in table one on page 95 of the published report under the category of net credit to the government.
    I hope that answers the question. If I understood it correctly.

     

    QUESTIONER: So, I am trying to find out what’s the alternative if you want to sterilize the inflows. I mean, kind of issuing central banks equity or something, but you have reserve target.


    Ms. Svirydzenka:     Is this more than a question about the operation of monetary policy and how to sterilize reserve accumulation?


    QUESTIONER:     Yeah. Yeah. Because you don’t you?


    Ms. Svirydzenka    : Perhaps I misunderstood.


    QUESTIONER:     You no longer have the tables to sell. What is the alternative securities they can sell to build?


    Ms. Svirydzenka    : Yes, I understand. Thank you so much for clarifying. Yeah. So there are many alternatives that the Central bank can use. For example, they can engage in repo operations or also issue their own securities. But I guess what is important to highlight for your question is that the Central Bank so far has been able to meet the inflation target and if anything, they’re a little bit undershooting as you saw with the breach of the MPCC clause in June and in December. So in that sense, the central bank is quite effective in terms of reaching the inflation objectives and we think the tools they have in their, in their in their hands should be enough.


    Ms. Elnagar:      Thank you, Katya. We have more questions, Peter.
    We have Indika first please.


    QUESTIONER:      Hi, Randa. Thank you, I think. I hope I’m audible.


    Ms. Elnagar:     Yes you are.


    QUESTIONER:     My questions, question to Peter is in the budget, there is a budget proposal to recruit about 30,000 people to the public sector. So we already have a bloated public sector in the country. So what’s your what’s IMF’s opinion on that? And the other question is on their flight, electricity, the price, reflective electricity tariffs. So we were under the impression that that is already happening because the government is already. Adjusting prices periodically, but in the press release that was released on Friday. The sort of insinuated that Sri Lanka S deviated. What is what is the situation there? Thank you.


    Ms. Elnagar    : Peter, we can take a couple more questions this round.


    QUESTIONER:     Randa, I hope I’m audible.


    Ms. Elnagar:     Yes you are.


    QUESTIONER:     Great. I just have one question. Peter, could you please outline what are the key goal posts that Sri Lanka has to hit as it moves forward to the 4th review now, right. And when will there be an IMF delegation coming to Colombo?
    Thank you.


    Ms. Elnagar:     We can take more questions. There are two questions in the chat, Peter, One is asking, why was the proposed property tax under the IMF program withdrawn, and why wasn’t the existing under taxed Council tax system rebased instead? How much revenue was expected from the input rental tax and why could this be? Couldn’t this be raised adjusting Council taxes? There’s another one we can take, or that’s enough for now this round.


    Mr. Breuer:     Yeah. Why don’t we get going with these ones? Thank you.


    Ms. Elnagar:      Yeah, because Shehar already had a chance at the beginning, so let’s take a different group now. Thank you.


    Mr. Breuer:     So thanks so much for these questions. On the size of the public sector, that’s really not for us to judge the government needs to sort of identify the resources it needs to provide the services that it’s expected to provide.
    And do all of that within the envelope of the program. So there may be other institutions. The World Bank, for example, you know that can provide some more assistance, technical assistance to help with making the government as efficient as as possible. But. I don’t really have a comment there. The electricity tariff.
    So there was a reduction in the electricity tariffs in January, and this is when we feel that the cost reflective pricing was no longer met because on a forward-looking basis. That tariff cut meant that Ceb wouldn’t be able to avoid any losses.
    So these cuts. Essentially, at least on a forward-looking basis, implied that losses would be run now of course. These profits and losses by the electricity company depend on many factors, including the weather, the rain and so forth.
    So what turns out ex post may be different from what happens ex ante, but this is a concern that we have because it could mean that that starts building up again in the electricity company. That could ultimately become a contingent liability for the government. This is something that, of course, Sri Lanka has experienced before, and avoiding this and making sure that consumers on average pay for how much it costs to generate and distribute the electricity is an important part of the program.

    And this actually also goes towards answering the question of what are some of the main goal posts for the 4th review. So ensuring that cost reflective energy pricing is restored is of course a key. Part of what we would like to see for the next.
    Review I should say there are some mechanisms that give us hope that this will happen automatically. The SD bulk supply transaction account, which is sort of a mechanism that is supposed to kick in when losses at CB become too large when they are cash balances become. You know, negative beyond a certain value.
    Then there’s meant to be an automatic increase in the tariff. That would prevent these losses from accumulating, so so they are already mechanisms in place.
    It’s important that these mechanisms be allowed to function, and then, of course, at the next tariff setting, it’s important to ensure that tariffs will once again be set to  cover the costs. Another important Issue for the next review will of course be.
    The budget that the budget that is finally passed at the end of this month is in fact consistent with the program parameters. So this is something that we will be watching very carefully. So those are two issues that may matter.

    The next mission we expect to be visiting Colombo.in the coming weeks or months or so. So the exact dates will be announced closer to the time.
    With respect to the property tax. That is a property tax. Is very common in many countries it is a form of wealth tax whereby those who have more wealth, meaning more expensive homes, larger homes that are worth more, need to make larger contributions to the tax coffers and support the government. So, now it’s it had been discussed for quite some time previously, and in fact many preparations have been made under this program for property tax with respect to, you know sales price and rents register, and various databases to estimate the values of homes. So lots of preparations have been have been made. Then there were some concerns and this goes towards the question with respect to the local authorities how this tax could be raised and how it could be shared with at the at the central government level. So some of these issues still need to be resolved and so this is this is something I think that is as yet you know to be addressed. Let me stop there. Thank you.


    Ms. Elnagar:      Peter, we can take a couple more questions because we are out of time. So we can take from Sisira, who has been waiting patiently, and then we have a couple of questions in the chat. So Sisira, please go ahead. We can’t hear you.
    Sisira do you have a question? You have your hand raised?


    QUESTIONER:     Yeah. Can you hear me?


    Elnagar, Randa Mohamed:     Yes.


    QUESTIONER:      My question is, what is the impact?


    Ms. Elnagar:     Your mic is a bit muffled.


    QUESTIONER:     Can you hear me?


    Ms. Elnagar:     Peter, can you hear him?


    Mr. Breuer:     It’s very, very soft. I don’t know whether you can bring the mic closer to him.


    QUESTIONER:     Yeah, my question is what is the projected impact of Sri Lanka’s foreign reserves?


    Mr. Breuer:     I think the question is what is the impact of the car imports on reserves? Yeah, OK.


    Ms. Elnagar:     Vehicle import. Yeah. And then we have a couple of questions here.
    Amal already asked the question, a supplementary question regarding what Asantha raised about vehicle imports. So it’s the same topic and then we have. One from Ishara. Even though the IMF program has put Sri Lanka’s economy on the right track, a recent poverty study revealed that more than 50% of households are below the poverty line. Additionally, the Central bank mentioned that brain drain could severely impact efforts to accelerate growth. In this scenario, how can Sri Lanka reach its anticipated IMF recovery targets? And these are the last questions of the press conference.


    Mr. Breuer:    :Yeah. Thank you very much. On the car imports. So yes, removing the import restrictions on car imports will allow cars to be imported which means they have to be paid for and so that could have an impact on the balance of payments. But as you know there’s a question to what extent you know the Central bank should intervene to make those reserves available versus allowing the exchange rate to fluctuate in response to market forces. So, that is something that remains to be seen, but maybe just to highlight the fact that reserves have increased. Significantly, so far under the program they have reached about half of the program objective already, which is very impressive.

    On the question with respect to the anticipated IMF recovery targets, so. I think it’s quite clear that things really have turned around significantly in Sri Lanka. I mean, you all live there, so you experience it much more than us. But when I first got to Sri Lanka in June 2022. Everybody was standing in a line somewhere in, you know, to get fuel, to get cooking gas to get food or medications and economic activity was was very subdued, I think in real terms. Sri Lanka lost, you know, 10% or so of its economic activity. As a result of this crisis and since then in the short amount of time.
    That the program has been there basically since 2023 it has already recovered 40% of the income it has lost. In the preceding five years, so in a very short amount of time, you have already a very significant recovery. You have the most recent growth number of 5.5%.

    So I think things are turning around significantly in Sri Lanka and that will have an impact on the indicators that we care about, such as poverty, so.
    As economic opportunities return to Sri Lanka. Incomes will increase and poverty will be reduced, and also it’ll be more attractive to remain in Sri Lanka and not leave and emigrate or those who have emigrated may find opportunities back in in Sri Lanka again so. You know, as you look at our projections, we have increased these quite a bit. For 2025 and beyond and so based on these, I would say I’m quite optimistic about the recovery in Sri Lanka.


    Ms. Elnagar:     I think we’re out of time, Peter. If you guys have any further questions, please, please feel free to send them by e-mail. We are always very responsive or via WhatsApp. With that I would like to thank our speakers Peter, Katia, and Martha, and I would like to thank you all for participating in this press conference.
    We’re going to be posting the recording and the transcript by tomorrow.
    And we look forward in seeing to seeing you again in the future.
    Thank you very much.


    Mr. Breuer:      Thank you.

     

    Ms. Woldemichael: Thank you.


    Ms. Svirydzenka:     Thank you.

    IMF Communications Department
    MEDIA RELATIONS

    PRESS OFFICER: Randa Elnagar

    Phone: +1 202 623-7100Email: MEDIA@IMF.org

    https://www.imf.org/en/News/Articles/2025/03/05/tr-030525-sri-lanka-transcript-of-press-briefing-on-completion-of-3rd-rev-for-eff

    MIL OSI

    MIL OSI Russia News –

  • MIL-OSI USA: West Virginia Business Owner Pleads Guilty to Employment Tax Crimes

    Source: US State Government of Utah

    A West Virginia man pleaded guilty today to one count of willful failure to pay over employment taxes on behalf of his business.

    According to court documents and statements made in court, Dean E. Dawson operated RPC Group LLC, a Hurricane, West Virginia, real estate appraisal business. Dawson was responsible for withholding employment taxes from RPC Group’s employees and paying over those funds to the IRS. Between 2015 and 2022, however, Dawson willfully failed to pay over to the IRS the employment taxes withheld from his employees’ paychecks. He also used the RPC Group’s business accounts to pay for personal expenses, including personal credit cards and his wife’s home mortgage, and issued checks to his wife from RPC Group even though she was not an employee of the business. In addition, from 2018 to 2023, Dawson did not file personal tax returns or pay income taxes. In total, Dawson caused a tax loss to the IRS exceeding $250,000.

    Dawson is scheduled to be sentenced on June 23. He faces a maximum penalty of five years in prison as well as a period of supervised release, restitution and monetary penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

    Acting Deputy Assistant Attorney General Karen E. Kelly of the Justice Department’s Tax Division and Acting U.S. Attorney Lisa G. Johnston for the Southern District of West Virginia made the announcement.

    IRS Criminal Investigation is investigating the case.

    Trial Attorneys Brian E. Flanagan and Rebecca A. Caruso of the Tax Division and Assistant U.S. Attorney Jonathan T. Storage for the Southern District of West Virginia are prosecuting the case.

    MIL OSI USA News –

  • MIL-OSI Security: West Virginia Business Owner Pleads Guilty to Employment Tax Crimes

    Source: United States Attorneys General 6

    A West Virginia man pleaded guilty today to one count of willful failure to pay over employment taxes on behalf of his business.

    According to court documents and statements made in court, Dean E. Dawson operated RPC Group LLC, a Hurricane, West Virginia, real estate appraisal business. Dawson was responsible for withholding employment taxes from RPC Group’s employees and paying over those funds to the IRS. Between 2015 and 2022, however, Dawson willfully failed to pay over to the IRS the employment taxes withheld from his employees’ paychecks. He also used the RPC Group’s business accounts to pay for personal expenses, including personal credit cards and his wife’s home mortgage, and issued checks to his wife from RPC Group even though she was not an employee of the business. In addition, from 2018 to 2023, Dawson did not file personal tax returns or pay income taxes. In total, Dawson caused a tax loss to the IRS exceeding $250,000.

    Dawson is scheduled to be sentenced on June 23. He faces a maximum penalty of five years in prison as well as a period of supervised release, restitution and monetary penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

    Acting Deputy Assistant Attorney General Karen E. Kelly of the Justice Department’s Tax Division and Acting U.S. Attorney Lisa G. Johnston for the Southern District of West Virginia made the announcement.

    IRS Criminal Investigation is investigating the case.

    Trial Attorneys Brian E. Flanagan and Rebecca A. Caruso of the Tax Division and Assistant U.S. Attorney Jonathan T. Storage for the Southern District of West Virginia are prosecuting the case.

    MIL Security OSI –

  • MIL-OSI Economics: Transcript of Press Briefing on the Completion of the Third Review for the IMF Extended Fund Facility for Sri Lanka

    Source: International Monetary Fund

    March 5, 2025

    PARTICIPANTS:

    PETER BREUER

    Senior Mission Chief for Sri Lanka

    KATSIARYNA SVIRYDZENKA

    Deputy Mission Chief for Sri Lanka

    MARTHA TESFAYE WOLDEMICHAEL

    Resident Representative in Sri Lanka

    MODERTOR:

    RANDA ELNAGAR

    Senior Media Officer

    TRANSCRIPT:


    Ms. Elnagar:      Good morning to our participants who are joining us from Asia and good evening to our participants in DC. Welcome to the press conference on of the Third review of Sri Lanka’s Extended Fund Facility Arrangement with the International Monetary Fund. I am Randa Elnagar, with the IMF’s communications department.

    I am joined today by three speakers. Peter Breuer, IMF’s Senior Mission Chief for Sri Lanka; Katsiaryna Svirydzenka, Deputy Mission Chief for Sri Lanka; and Martha Tesfaye Woldemichael, IMF’s Resident Representative in Sri Lanka.

    By now you should have seen the press release, which we issued on Friday and the staff report is not on IMF.org. First, Peter will give some opening remarks, and then we will take your questions.

    We are kindly asking you to mute your microphones throughout the briefing, unless you are asking a question. Peter the floor is yours.

    started transcription


    Mr. Breuer:     Thank you, Randa. Good morning, all, thank you very much for being here and for your interest in Sri Lanka’s IMF-supported economic reform program.

    I am pleased to announce that, on Friday February 28, the IMF Executive Board approved the third review under the 48-month Extended Fund Facility Arrangement with Sri Lanka. This provides the country with immediate access to about US$334 million to support its economic policies and reforms.

    It brings the total IMF financial support dispersed so far to about $1.3 billion.
    The IMF continues to support Sri Lanka’s efforts to restore and maintain macroeconomic stability and debt sustainability while protecting the poor and vulnerable rebuilding external buffers. Safeguarding financial sector stability and enhancing growth oriented structural reforms, including by strengthening governance.

    The IMF Executive Board’s approval to complete the third review recognizes the strong program performance. All quantitative targets for end December 2024 were met, except for the indicative target on social spending.
    Most structural benchmarks do by end January 2025 were either met or implemented with delay.

    Turning to through the macroeconomic situation, it is encouraging to see that reforms in Sri Lanka are bearing fruit with the economic recovery gaining momentum, inflation remains slow.

    Revenue collection is improving and reserves continue to accumulate.
    Economic growth averaged 4.3% since growth resumed in the third quarter of 2023.
    The recovery is expected to continue in two thousand 2025 now. Despite these positive developments, the economy is still vulnerable.
    It is critical to sustain the reform momentum to ensure macroeconomic stability and debt sustainability.

    And to promote long term inclusive growth, there is no room for policy errors.
    Let me emphasize that sustained revenue mobilization is crucial to restoring fiscal sustainability.

    And ensuring that the government can continue to provide essential services.
    Boosting tax compliance and refraining from tax exemptions are key to maintaining support for economic reforms.

    Let me also emphasize that to ease economic hardship and ensure the poor and vulnerable can participate in Sri Lanka’s recovery, it is important to meet social spending targets and continue with reforms of the social safety net going forward. Social support needs to be well targeted towards the.

    Most disadvantaged, so as to promote inclusive growth with limited fiscal space.
    Restoring cost recovery, electricity pricing without delay is needed to contain fiscal risks from state owned enterprises.
    A smoother execution of capital spending within the fiscal envelope would foster medium term growth.

    The recent successful completion of the bond exchange is a major milestone towards restoring debt sustainability, timely finalization of bilateral agreements with creditors in the official creditor committee, and with remaining creditors is a priority now. Regarding monetary policy, I would like to highlight that it should prioritize maintaining price. Stability supported by sustained commitment to prohibit monetary financing and.

    To safeguard central bank independence. Continued exchange rate, flexibility and gradually phasing out the balance of payments measures remain critical to rebuild external buffers and facilitate rebalancing.

    As for the financial sector, resolving non performing loans, strengthening governance and oversight of state owned banks and improving the insolvency and resolution frameworks are important priorities to revive credit growth and support the economic recovery.

    Finally, prolonged structural challenges need to be addressed to unlock Sri Lanka’s long term potential, including steadfast implementation of governance reforms.
    I would like to thank the authorities for their commitment and excellent collaboration.

    Let me also take this opportunity to announce that as part of a standard staff rotation process, I will soon be transitioning from the role of mischief for Sri Lanka.
    And I will be handing over to the next mission Chief Evan Papageorgiou, during the next mission. It has been an honor to accompany Sri Lanka on his journey out of this.

    Severe crisis for nearly three years. While there are more challenges ahead, the IMF team will remain a steadfast partner for Sri Lanka and its people on the road to a more sustainable and inclusive recovery.
    I will be moving to another assignment soon and wish the people of Sri Lanka continued success with the economic recovery.
    With this, let me hand it back to Rhonda. Thank you.


    Ms. Elnagar:     Thank you so much, Peter.
    Colleagues, please raise your hand and identify yourself if you want to ask your question and turn on your camera, if possible and the mic. Thank you. I see the first hand, please.


    QUESTIONER:     Thank you, Randa. This is Shihar Anis from economy next.
    I hope you can hear you.


    Ms. Elnagar:     We can hear you well, Shihar. Thank you.


    QUESTIONER:     OK. So my question is now there is a delay in the SOE restructuring because we don’t see the same speed that the previous government was doing, the SOE restructuring this government has been. Basically, they are not into privatization, but they are looking into a different model. How concerned are you on that? You know, delay or the current restructuring model.
    Thank you.


    Ms. Elnagar:     Thank you. We’ll take another couple of questions and then answer them in groups.


    Ms. Elnagar:     The audio. Zulfiq there is a lot of static on your mic.


    QUESTIONER:     Hope you can hear me. I have two questions. That is, it has come to light that the Sri Lankan Government plans not to proceed with the imputed rental income tax as a revenue measure. So has this been discussed with the IMF and is there any other alternative that is being put forward and at the same time, what is IMF stake on the budget that was presented recently?


    Ms. Elnagar:     Let’s take another question. Sampath, please.


    QUESTIONER:     Hi I’m Sampath Dissanayake from BBC Sinhala service.
    The government is increasing the tax as per the IMF advice to increase government revenue. The number of people receiving Social Security benefit in benefits in Sri Lanka is increasing annually. So do you believe that the increase in tax burden is increase for reason for this?


    Ms. Elnagar:      Peter, we can take these three questions.


    Mr. Breuer:     Yes, thank you very much. So let me answer some of the questions.
    On the budget and fiscal, and maybe Katie can answer the question on the.
    SOE reforms so the. Imputed rental income tax was a measure proposed by the previous administration as part of a possible revenue package for 2025, and the new authorities have proposed a slightly different package that is aligned with their mandate and priorities. And staff and the authorities have assessed that this package is sufficient to meet the revenue targets under the program. Now of course, should those measures prove insufficient, then additional revenue measures would be needed. And so that also. Ties in with the question on the budget and tax revenues. So yes, we have looked at the budget. And have, of course, disgusted with the authorities. There’s more detailed explanation in the staff report that should be online now, so there’s a table on page 12 that kind of lists some of the main measures needed to. reach the goal for tax revenue for next year. Yeah, reallybthe objective here is as you know tax revenue was a key driver of the crisis in 2022.
    Sri Lanka was the lowest that the country with the lowest tax take amongst.
    Middle income countries and low income countries in the world, and so it has made significant progress since then. Tax as a share of GDP, he has increased by 5 percentage points from somewhere. You know 7 to somewhere 12.4% or so last year. So that’s a significant increase, but by no means is excessive and. The essential services that the government provides need to be funded and for that reason.
    Working on ensuring that there is sufficient tax revenue remains a priority.
    And so social services, which was the 3rd question is just a portion of the overall essential services that that the government provides and is just a component on that actually. Maybe Marta can add on that point and cut you a can speak to the SOE reforms.


    Ms. Svirydzenka:     So should I go first? OK. So on the on the SOE restructuring, the most crucial element is that the state owned enterprises are managed in a prudent manner so as to avoid the accumulation of losses or debts that then would eventually need to be repaid by the taxpayers. And in that sense, the SOEs can be managed prudently while remaining state owned or they can be divested partially or completely.

    We are reassured by the authorities commitment to ensure that this enterprises do not become a burden for the budget or for the government debt in terms of other key elements under the program has been the cost, reflective pricing of services provided by so especially in the area of electricity and fuel prices. Other commitments under the program include making SOEs more transparent, in particular by publishing audited financial statements of the largest, SOEs in a timely manner.

    And then finally, to allow the economy to grow, it is important that the consumers of services receive the best value for the price of being charged. So this involves running, SOEs in the most efficient manner and ensuring that they are following the best governance principles. So in that sense, we’re quite satisfied with the progress, yes.


    Martha Tesfaye Woldemichael:     So let me maybe come in then to compliment a bit Peter’s response on the social spending, right. So there’s a question. Why social spending is increasing? I think this is a good opportunity to remind that protecting the poor and vulnerable is really an important component of the EFF program. So the EFF supports this objective through the different reforms through macro stabilization. But importantly, there is also a floor on social spending in the program that we assess on a quarterly basis. So this means the government has to spend a minimum amount to protect the poor and vulnerable.

    So in this context, the key commitment is really for the authorities to continue strengthening the coverage, the adequacy and the targeting of social spending. So recent announcement related to the expected decrease in the payments, for instance for the poor and extremely poor categories under a ASWASUMA or the.
    Announcement that the payments would also increase for the elderly, the disabled and chronic kidney patients are aligned with the authorities commitments to continue strengthening, strengthening social safety Nets and I think it is also very important to make sure that this coverage under the ASWASUMA program. Is above the poverty rates that are currently observed. I think I will stop here. Thank you very much. Back to you, Randa.


    Ms. Elnagar:     Thank you, Martha. We’re first going to take a question from Kelum.
    I think Shihar you had your hand raised, so it’s from the first question. So if you can, please put your hand down because it’s a bit confusing, but we’re going to go to Kellum 1st and then Asante. So Kelum, please go ahead.


    QUESTIONER:     Thank you. Can you hear me?


    Ms. Elnagar:     Yes.


    QUESTIONER:     Yes, I’m Kelum Bandara, from Daily Mirror newspaper. So my question is wanting the overall assessment about the budget, actually that was answered was that next day and the next question is, how important is it for the government to proceed with this Economic Transformation Act to reach the economic targets? Actually in searching by MFN or for the broader infrastructure of the country.


    Ms. Elnagar:      Thank you Asante. If you can, please pose your question.


    QUESTIONER:     Yeah, so, the government has started the import duty on vehicles, which just knocked out earlier. Yeah, I think all the taxes were kind of like excise taxes. And so have you made any assessment on whether this will lead to an increase in assembled vehicles, which earlier didn’t get this tax protection and how much leakage of revenue might happen to the assembled sector and whether any effect to publish a kind of a tax expenditure statement to say how much of the import duties lost due to any increase or the sales of the assembled vehicles which are like got CKD, I think tax free the parts and also have you had any discuss? With the central bank. On offloading their government securities now that the Treasury bills

    Ms. Elnagar: Thank you, Asantha. There is a question in the chat which we’re going to take and then move to the ones online. Amal, you didn’t verify your organization.


    QUESTIONER:     Oh, and I have actually done that. I’m from AFP, the French news agency, Agence France Press.


    Ms. Elnagar:     Hi would you like to ask? Yeah, because you post in the in the chat.


    QUESTIONER:     Oh yeah. I mean, if you want to save time, can just answer that.
    I mean basically I was trying to ask Peter how concerned you are about sort of emerging labor unrest, particularly now in the medical field. The doctors are threatening to go on strike from tomorrow, although there is a pay increase that the increase is less than the. Reduction of their allowances. So this is something that affects a lot of not just the medical sector. So how concerned are you that this kind of growing unrest, labor unrest, how it will affect the overall IMF backed program?


    Ms. Elnagar:      Peter, do you want to take another question?
    So they are three. So I think Indiqa is next.


    Mr. Breuer:      Well, there’s actually an under. It feels like there’s a bunch of questions.
    Should we try and answer these?


    Ms. Elnagar:      OK. Sounds good.


    Mr. Breuer:      And maybe Katya can speak to the Economic Transformation Act.
    And also to the central bank question so. On this important question with respect to the potential for unrest. Well, I suppose there is potential, but I think what really should be remembered is that this budget really sought to address some of the concerns that the government and ourselves have hurt that. You know, civil servants have been concerned about. The wages that they have been receiving and so.
    There is for the first time in a long time, an increase in civil service wages, while at the same time the personal income tax regime is were being changed and reducing personal income taxes considerably, at least for some. Income earners, including civil servants, you have to remember who are the ones who earn an income and pay taxes that really is the upper 20% of income earners in Sri Lanka. There has been a massive crisis in 2022 with huge costs to the population of Sri Lanka and in order for the government to keep on providing the essential services that the citizens of Sri Lanka expected, expect the government to provide and in order to bring along the poorer segments of society. Everyone who can needs to make a sacrifice.
    This is how the society can pull together and continue to function, and so.
    I think we all know how painful this crisis has been there’s no doubt about it.
    We have travelled around the country, we have met with many people.
    You know the plantation workers in Noro, alia have shown us their income statements and their bills. And it was very, very clear that this is a very severe crisis, but how else to address it. So, sticking with the reforms is really the best way out for Sri Lanka to assure its sustainability, and I think it’s important for everyone in Sri Lanka to recognize that.

    If you put it into the broader perspective the adjustment, this is the last budget.
    Where there is still a bit of an increase in in revenue is needed 1.5 percentage points of GDP, but all the hard adjustment has already taken place in the previous two years. You know revenue have increased 5 percentage points of GDP over the last two years. This is, you know, the last sort of big push. Not quite as big as in the previous years, and there after it’ll be much easier going forward.

    So on the cars I mean that’s a specific question. Does is there some import substitution? I can’t answer that. I would assume that after five years or so of a ban of imported cars that there will be some demand for finished cars from overseas.
    I do take your point that it’s possible that there may be some assembly of cars domestically.

    Katya, can you answer the other two questions please?


    Ms. Svirydzenka:     Sure. So on the economic transformation, bill, we understand there was a recent announcement that the new government will propose amendments to the bill. And so we look forward to reviewing the amended economic transformation bill. We expect it to be consistent with program objectives, including for example with the authorities’ commitment to refrain from granting tax.
    Incentives until the STP act is revised to provide clear and transparent criteria on the granting of tax incentives on the. Central Bank Securities, I understand the question was that the Central Bank has sold T-bills but has a stock of on marketable bonds. And this is correct. And under the program at this point, because there’s no market for this restructured bonds, we do not envision they unwinding of this stock and over the next 12 months you can see it in the program targets in table one on page 95 of the published report under the category of net credit to the government.
    I hope that answers the question. If I understood it correctly.

     

    QUESTIONER: So, I am trying to find out what’s the alternative if you want to sterilize the inflows. I mean, kind of issuing central banks equity or something, but you have reserve target.


    Ms. Svirydzenka:     Is this more than a question about the operation of monetary policy and how to sterilize reserve accumulation?


    QUESTIONER:     Yeah. Yeah. Because you don’t you?


    Ms. Svirydzenka    : Perhaps I misunderstood.


    QUESTIONER:     You no longer have the tables to sell. What is the alternative securities they can sell to build?


    Ms. Svirydzenka    : Yes, I understand. Thank you so much for clarifying. Yeah. So there are many alternatives that the Central bank can use. For example, they can engage in repo operations or also issue their own securities. But I guess what is important to highlight for your question is that the Central Bank so far has been able to meet the inflation target and if anything, they’re a little bit undershooting as you saw with the breach of the MPCC clause in June and in December. So in that sense, the central bank is quite effective in terms of reaching the inflation objectives and we think the tools they have in their, in their in their hands should be enough.


    Ms. Elnagar:      Thank you, Katya. We have more questions, Peter.
    We have Indika first please.


    QUESTIONER:      Hi, Randa. Thank you, I think. I hope I’m audible.


    Ms. Elnagar:     Yes you are.


    QUESTIONER:     My questions, question to Peter is in the budget, there is a budget proposal to recruit about 30,000 people to the public sector. So we already have a bloated public sector in the country. So what’s your what’s IMF’s opinion on that? And the other question is on their flight, electricity, the price, reflective electricity tariffs. So we were under the impression that that is already happening because the government is already. Adjusting prices periodically, but in the press release that was released on Friday. The sort of insinuated that Sri Lanka S deviated. What is what is the situation there? Thank you.


    Ms. Elnagar    : Peter, we can take a couple more questions this round.


    QUESTIONER:     Randa, I hope I’m audible.


    Ms. Elnagar:     Yes you are.


    QUESTIONER:     Great. I just have one question. Peter, could you please outline what are the key goal posts that Sri Lanka has to hit as it moves forward to the 4th review now, right. And when will there be an IMF delegation coming to Colombo?
    Thank you.


    Ms. Elnagar:     We can take more questions. There are two questions in the chat, Peter, One is asking, why was the proposed property tax under the IMF program withdrawn, and why wasn’t the existing under taxed Council tax system rebased instead? How much revenue was expected from the input rental tax and why could this be? Couldn’t this be raised adjusting Council taxes? There’s another one we can take, or that’s enough for now this round.


    Mr. Breuer:     Yeah. Why don’t we get going with these ones? Thank you.


    Ms. Elnagar:      Yeah, because Shehar already had a chance at the beginning, so let’s take a different group now. Thank you.


    Mr. Breuer:     So thanks so much for these questions. On the size of the public sector, that’s really not for us to judge the government needs to sort of identify the resources it needs to provide the services that it’s expected to provide.
    And do all of that within the envelope of the program. So there may be other institutions. The World Bank, for example, you know that can provide some more assistance, technical assistance to help with making the government as efficient as as possible. But. I don’t really have a comment there. The electricity tariff.
    So there was a reduction in the electricity tariffs in January, and this is when we feel that the cost reflective pricing was no longer met because on a forward-looking basis. That tariff cut meant that Ceb wouldn’t be able to avoid any losses.
    So these cuts. Essentially, at least on a forward-looking basis, implied that losses would be run now of course. These profits and losses by the electricity company depend on many factors, including the weather, the rain and so forth.
    So what turns out ex post may be different from what happens ex ante, but this is a concern that we have because it could mean that that starts building up again in the electricity company. That could ultimately become a contingent liability for the government. This is something that, of course, Sri Lanka has experienced before, and avoiding this and making sure that consumers on average pay for how much it costs to generate and distribute the electricity is an important part of the program.

    And this actually also goes towards answering the question of what are some of the main goal posts for the 4th review. So ensuring that cost reflective energy pricing is restored is of course a key. Part of what we would like to see for the next.
    Review I should say there are some mechanisms that give us hope that this will happen automatically. The SD bulk supply transaction account, which is sort of a mechanism that is supposed to kick in when losses at CB become too large when they are cash balances become. You know, negative beyond a certain value.
    Then there’s meant to be an automatic increase in the tariff. That would prevent these losses from accumulating, so so they are already mechanisms in place.
    It’s important that these mechanisms be allowed to function, and then, of course, at the next tariff setting, it’s important to ensure that tariffs will once again be set to  cover the costs. Another important Issue for the next review will of course be.
    The budget that the budget that is finally passed at the end of this month is in fact consistent with the program parameters. So this is something that we will be watching very carefully. So those are two issues that may matter.

    The next mission we expect to be visiting Colombo.in the coming weeks or months or so. So the exact dates will be announced closer to the time.
    With respect to the property tax. That is a property tax. Is very common in many countries it is a form of wealth tax whereby those who have more wealth, meaning more expensive homes, larger homes that are worth more, need to make larger contributions to the tax coffers and support the government. So, now it’s it had been discussed for quite some time previously, and in fact many preparations have been made under this program for property tax with respect to, you know sales price and rents register, and various databases to estimate the values of homes. So lots of preparations have been have been made. Then there were some concerns and this goes towards the question with respect to the local authorities how this tax could be raised and how it could be shared with at the at the central government level. So some of these issues still need to be resolved and so this is this is something I think that is as yet you know to be addressed. Let me stop there. Thank you.


    Ms. Elnagar:      Peter, we can take a couple more questions because we are out of time. So we can take from Sisira, who has been waiting patiently, and then we have a couple of questions in the chat. So Sisira, please go ahead. We can’t hear you.
    Sisira do you have a question? You have your hand raised?


    QUESTIONER:     Yeah. Can you hear me?


    Elnagar, Randa Mohamed:     Yes.


    QUESTIONER:      My question is, what is the impact?


    Ms. Elnagar:     Your mic is a bit muffled.


    QUESTIONER:     Can you hear me?


    Ms. Elnagar:     Peter, can you hear him?


    Mr. Breuer:     It’s very, very soft. I don’t know whether you can bring the mic closer to him.


    QUESTIONER:     Yeah, my question is what is the projected impact of Sri Lanka’s foreign reserves?


    Mr. Breuer:     I think the question is what is the impact of the car imports on reserves? Yeah, OK.


    Ms. Elnagar:     Vehicle import. Yeah. And then we have a couple of questions here.
    Amal already asked the question, a supplementary question regarding what Asantha raised about vehicle imports. So it’s the same topic and then we have. One from Ishara. Even though the IMF program has put Sri Lanka’s economy on the right track, a recent poverty study revealed that more than 50% of households are below the poverty line. Additionally, the Central bank mentioned that brain drain could severely impact efforts to accelerate growth. In this scenario, how can Sri Lanka reach its anticipated IMF recovery targets? And these are the last questions of the press conference.


    Mr. Breuer:    :Yeah. Thank you very much. On the car imports. So yes, removing the import restrictions on car imports will allow cars to be imported which means they have to be paid for and so that could have an impact on the balance of payments. But as you know there’s a question to what extent you know the Central bank should intervene to make those reserves available versus allowing the exchange rate to fluctuate in response to market forces. So, that is something that remains to be seen, but maybe just to highlight the fact that reserves have increased. Significantly, so far under the program they have reached about half of the program objective already, which is very impressive.

    On the question with respect to the anticipated IMF recovery targets, so. I think it’s quite clear that things really have turned around significantly in Sri Lanka. I mean, you all live there, so you experience it much more than us. But when I first got to Sri Lanka in June 2022. Everybody was standing in a line somewhere in, you know, to get fuel, to get cooking gas to get food or medications and economic activity was was very subdued, I think in real terms. Sri Lanka lost, you know, 10% or so of its economic activity. As a result of this crisis and since then in the short amount of time.
    That the program has been there basically since 2023 it has already recovered 40% of the income it has lost. In the preceding five years, so in a very short amount of time, you have already a very significant recovery. You have the most recent growth number of 5.5%.

    So I think things are turning around significantly in Sri Lanka and that will have an impact on the indicators that we care about, such as poverty, so.
    As economic opportunities return to Sri Lanka. Incomes will increase and poverty will be reduced, and also it’ll be more attractive to remain in Sri Lanka and not leave and emigrate or those who have emigrated may find opportunities back in in Sri Lanka again so. You know, as you look at our projections, we have increased these quite a bit. For 2025 and beyond and so based on these, I would say I’m quite optimistic about the recovery in Sri Lanka.


    Ms. Elnagar:     I think we’re out of time, Peter. If you guys have any further questions, please, please feel free to send them by e-mail. We are always very responsive or via WhatsApp. With that I would like to thank our speakers Peter, Katia, and Martha, and I would like to thank you all for participating in this press conference.
    We’re going to be posting the recording and the transcript by tomorrow.
    And we look forward in seeing to seeing you again in the future.
    Thank you very much.


    Mr. Breuer:      Thank you.

     

    Ms. Woldemichael: Thank you.


    Ms. Svirydzenka:     Thank you.

    IMF Communications Department
    MEDIA RELATIONS

    PRESS OFFICER: Randa Elnagar

    Phone: +1 202 623-7100Email: MEDIA@IMF.org

    MIL OSI Economics –

  • MIL-OSI Security: Former Executive of Chicago-Area Non-Profit Pleads Guilty in $1.8 Million Fraud Scheme

    Source: Office of United States Attorneys

    CHICAGO — A former executive of a Chicago-area non-profit organization has pleaded guilty to a federal fraud charge for her role in misappropriating $1.8 million intended to support the charity’s work with underprivileged youth.

    BARBARA HARRIS served as the Executive Director of the Center for Community Academic Success Partnerships (CCASP), which received government grants and other funds to provide after-school programs to schools in the Chicago area.  The grants included funds from the 21st Century Community Learning Centers Program, a federal program offering financial support for academic enrichment opportunities.  The 21st Century program issued grants to its local administrator, the Illinois State Board of Education, which in turn disbursed the funds to CCASP.

    Harris stated in a plea agreement that from 2012 to 2017, she schemed with another CCASP executive, TONY BELL, to submit grant applications that inflated CCASP’s projected annual expenses and falsely claimed that the organization would receive services from five subcontractors.  In reality, Harris knew that the subcontractors, two of which were other non-profit groups run by Harris and Bell, provided no actual services to CCASP.  The fraud scheme resulted in approximately $1.8 million in actual loss to the Illinois Department of Education.

    Harris further admitted in the plea agreement that from 2021 to 2023, she participated in a separate fraud scheme that bilked the federally funded AmeriCorps VISTA program, which awarded grants to non-profit organizations working to bring communities out of poverty.  Harris, who at the time of this scheme was serving as Co-Executive Director of the non-profit South Suburban Community Services, submitted grant applications falsely representing that VISTA members would work for SSCS developing programs aimed at bringing economic opportunities to the south suburbs of Chicago. Harris knew that the VISTA members would actually be used at SSCS to support already-funded job training and afterschool violence prevention programs.  Harris fraudulently obtained approval for eleven VISTA members to work at SSCS, none of whom performed services in accordance with their VISTA assignment descriptions, causing a loss to the VISTA program of $98,699.

    Harris, 55, of South Holland, Ill., pleaded guilty on Feb. 27, 2025, to a wire fraud charge.  U.S. District Judge Andrea R. Wood set sentencing for July 11, 2025, at 10:30 a.m.

    Harris’s guilty plea was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, John F. Woolley, Special Agent-in-Charge of the U.S. Department of Education Office of Inspector General’s Midwestern Regional Office, Douglas S. DePodesta, Special Agent-in-Charge of the Chicago Field Office of the FBI, Ramsey Covington, Acting Special Agent-in-Charge of IRS Criminal Investigation in Chicago, and Stephen Ravas, Acting Inspector General of the AmeriCorps Office of Inspector General.  The Illinois Office of Executive Inspector General provided valuable assistance.  The government is represented by Assistant U.S. Attorneys Kristen Totten and Caitlin Walgamuth.

    Bell, 64, of Matteson, Ill., has pleaded not guilty to charges of conspiracy, money laundering, and wire fraud.  He is awaiting trial.  The public is reminded that the indictment against Bell is not evidence of guilt.  Bell is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt. 

    MIL Security OSI –

  • MIL-OSI USA: Florida businessman sentenced for migrant labor employment scheme, payroll tax evasion, worker death

    Source: US Immigration and Customs Enforcement

    WASHINGTON — A Florida man was sentenced Feb. 20 to 48 months in prison and ordered to forfeit more than $5.5 million to the United States as well as forfeit numerous real properties and cash, and to pay over $55 million in restitution for conspiracy to commit wire fraud, conspiracy to defraud the United States and willful violation of a workplace standard that resulted in the death of his employee following a joint agency investigation with U.S. Immigration and Customs Enforcement.

    Manual Domingos Pita, of Wesley Chapel, previously pleaded guilty to those charges on July 9, 2024.

    According to court documents, Pita owned and operated Domingos 54 Construction, a subcontracting business for the wood framing of new construction homes. Domingos 54 was a shell construction company that Pita used to provide workers, including undocumented aliens, with construction jobs. However, Pita failed to secure the required workers compensation insurance coverage for these employees by falsifying in worker’s compensation insurance applications the number of workers for which he sought coverage. In addition, Pita failed to pay any federal employment taxes on the wages that these workers earned during the course of the scheme between 2018 and 2022. As a result, Pita caused several worker’s compensation insurance companies to sustain a loss of over $22.7 million in premiums that they could have charged had they been aware of the number of workers which they had been manipulated into covering with their policies. In addition, Pita failed to pay to the IRS over $33.7 million in federal employment taxes on those workers’ wages.

    Between February and July 2019, investigators with the Occupational Safety and Health Administration (OSHA) issued six citations to Domingos 54 for failure to provide fall protection to workers. Even after being cited for these violations, Pita continued to ignore OSHA requirements. In March 2020, Pita assigned a worker and three other carpenters to install sheeting on the roof of a residential home in windy conditions without providing the required fall-protection gear or ensuring its use. As a result, one of the workers was blown off the roof and died from his injuries.

    The FBI, IRS Criminal Investigation, ICE Tampa, Florida Department of Financial Services’ Bureau of Insurance Fraud-Criminal Investigations and the Department of Labor’s Office of Inspector General investigated the case.

    Assistant U.S. Attorney Jay L. Hoffer for the Middle District of Florida and Senior Trial Attorney Banumathi Rangarajan of the Environment and Natural Resources Division’s Environmental Crimes Section prosecuted the case.

    MIL OSI USA News –

  • MIL-OSI Security: United States Attorney Durham Launches the Eastern District of New York’s Transnational Criminal Organizations Strike Force

    Source: United States Department of Justice (Human Trafficking)

    Strike Force Focuses on Dismantling Cartels and Transnational Criminal Organizations

    U.S. Attorney for the Eastern District of New York John J. Durham announced today the creation and launch of the Eastern District of New York’s Transnational Criminal Organizations (TCOs) Strike Force. Capitalizing on the Office’s preeminence in this area, the Strike Force will focus on investigating, prosecuting and dismantling cartels and TCOs, and their senior leadership by bringing charges that include terrorism, racketeering and operating a continuing criminal enterprise.

    “I am establishing this Strike Force with immense pride in what this Office has already accomplished, as well as the knowledge that there is much more work to be done in the fight against TCOs,” stated United States Attorney Durham.  “Because of my Office’s significant experience and expertise in this area, we have a responsibility to our community and our country to dismantle these ruthless organizations from the top down in order to stop the violence, flow of drugs, and dangers they unleash in our District and across the nation.”

    For more than two decades, the U.S. Attorney’s Office for the Eastern District of New York has been a nationwide leader in prosecuting many of the most significant TCOs in the country and the world, including innovative indictments of the highest-ranking international leaders of the La Mara Salvatrucha (MS-13), Sinaloa Cartel, Guadalajara Cartel, Juarez Cartel, H-2 Drug Cartel, Clan de Golfo and others.  In addition, this Office has investigated and prosecuted numerous other TCOs that have a significant operating presence in our district, including the Trinitarios, 18th Street and, more recently, Tren de Aragua (TdA). Notably, United States Attorney Durham has been at the forefront of these prosecutions, leading and serving on the Attorney General’s Transnational Organized Crime Task Force Subcommittee for MS-13 and directing Joint Task Force Vulcan, while other AUSAs in the Office have served on the subcommittees for Sinaloa, Jalisco New Generation (CJNG) Cartel, Hezbollah and Clan de Golfo.

    Consistent with the Attorney General’s memorandum titled “TOTAL ELIMINATION OF CARTELS AND TRANSNATIONAL CRIMINAL ORGANIZATIONS” issued on February 5, 2025, which provided further guidance regarding President Trump’s January 20, 2025 Executive Order regarding TCOs such as TdA and MS-13, the Strike Force’s mission is as follows:

    • Investigating, prosecuting and dismantling cartels and TCOs, with a particular focus on their senior leadership and management, including without limitation: Mexican drug cartels such as the Sinaloa, H-2, Juarez, CJNG and Clan de Golfo cartels, and TCOs that have a significant operating presence in the District, such as MS-13, the Trinitarios, the 18th Street gang and TdA.   

    • Disrupting the criminal activities of TCOs, particularly those operating in the United States and/or that impact United States victims at home or abroad, including TCOs engaged in criminal activity involving terrorism; racketeering; drug trafficking, particularly with respect to fentanyl and fentanyl precursors; violent crime; human trafficking and smuggling; corruption of foreign officials; money laundering; immigration crimes; and fraud and cybercrime schemes.

    • Identifying the sources and methods of illicit funds related to TCO financing and profits, and seizing and forfeiting bank accounts, digital assets, real property and other assets that are criminally derived, commingled with criminal proceeds, or otherwise involved in money laundering by or in support of TCOs.

    • Coordinating the investigative efforts of the Office’s federal law enforcement partners in the Eastern District and beyond, including the Federal Bureau of Investigation, Drug Enforcement Administration, Homeland Security Investigations, Bureau of Alcohol, Tobacco, Firearms and Explosives, United States Postal Inspection Service, Internal Revenue Service, as well as High Intensity Drug Trafficking Areas Program (HIDTA), state and local police departments and district attorneys’ offices.

    • Strengthening the Office’s partnerships and coordination with other Department of Justice components, including the National Security Division, Criminal Division, Joint Task Force Vulcan, Joint Task Force 10-7, Joint Task Force Alpha, OCDETF, MLARS, NDDS, OIA and other United States Attorney’s Offices. 

    The Chief of the International Narcotics and Money Laundering Section Francisco J. Navarro has been selected to serve as Director of the EDNY TCO Strike Force, and Assistant U.S. Attorneys Megan E. Farrell and Gabriel Park have been selected as Deputy Directors.  In addition, the Strike Force will have at least one representative from each section of the Office’s Criminal Division to capitalize on existing experience, coordinate strategic focus and maximize resources to make an even more significant impact combatting TCOs. The Strike Force will also include OCDETF-designated AUSAs, Project Safe Neighborhood (PSN) coordinators, as well as a designated representative from the Civil Division to ensure the Strike Force leverages civil remedies as appropriate.  The Strike Force will also coordinate closely with the Office’s Immigration Enforcement Working Group.

    Francisco J. Navarro

    AUSA Navarro joined the Department in 2013 and the Office in 2018 after serving as an AUSA in the District of New Jersey.  He has been in charge of INML since April 2023.  He received his B.A. from Boston University and his J.D. from Georgetown University Law Center.

    AUSA Navarro has prosecuted several significant narcotics, national security and material support cases.  He has also prosecuted significant white collar cases involving sanctions evasion, money laundering and the Bank Secrecy Act.  For example,  AUSA Navarro is part of the team prosecuting Rafael Caro Quintero for leading a continuing criminal enterprise, including his role in the kidnapping, torture and murder of DEA Special Agent Enrique “Kiki” Camarena.  He is also leading the team prosecuting Ismael Zambada Garcia (aka “El Mayo”) for his founding and two-decade leadership of the Sinaloa Cartel—a continuing criminal enterprise—and one of the most violent and powerful drug cartels in the world.  In United States v. Usuga David, et al., he led the team that obtained a 45-year prison sentence against Dairo Usuga David (aka “Otoniel”) who was the supreme leader of the Clan del Golfo and was considered the most dangerous narco-terrorist in Colombia since Pablo Escobar.  AUSA Navarro also led the team that obtained the first indictments in the nation against Chinese chemical manufacturing companies and employees for importing fentanyl precursors into the United States and working with Mexican cartels to manufacture and distribute fentanyl in the United States.  In addition, AUSA Navarro is also leading the prosecution of Mohammad Bazzi, a Specially Designated Global Terrorist and financier for Hizballah, a foreign terrorist organization on sanctions evasion and money laundering charges.  AUSA Navarro has been involved in multiple prosecutions of individuals and institutions for failing to follow United States laws regarding maintaining effective anti-money laundering programs, the prohibition on the provision of material support to designated Foreign Terrorist Organizations, or other financial regulations.

    Megan E. Farrell

    AUSA Farrell joined the Office in 2018, and currently serves in the Office’s Long Island Criminal Section.  She is one of the Office’s Human Trafficking Coordinators and previously served as an Acting Deputy Chief in the Office’s General Crimes Section.  She received her B.A. from Boston College and her J.D. from St. John’s University.

    AUSA Farrell has prosecuted significant organized crime, gang and sex trafficking cases during her time in the Office.  In United States v. Canales-Rivera et al. and United States v. Arevalo-Chavez et al., she is part of the team prosecuting the highest-ranking members of MS-13’s international command and control structure, including the body known as the Ranfla Nacional, with charges that include conspiracy to provide and conceal material support to terrorists, conspiracy to commit acts of terrorism transcending national boundaries, conspiracy to finance terrorism and narco-terrorism conspiracy.  In United States v. Alexi Saenz et al., AUSA Farrell was part of a team that secured the convictions of two MS-13 defendants to racketeering and other charges in connection with eight murders.  In United States v. Blanco et al., she was a member of the team that secured the convictions of three high-ranking MS-13 gang members to racketeering charges in connection with nine murders.  In United States v. Escobar, AUSA Farrell was part of the team that secured a sentence of 50 years after the defendant was convicted on April 8, 2022, following a four-week trial, of racketeering, including predicate acts of murder, conspiracy to murder rival gang members, and obstruction of justice and murder in aid-of racketeering, in relation to the deaths of four young men who were hacked to death with machetes and other sharp objects by  more than a dozen MS-13 members and associates after Escobar lured them to a local park in 2017.  In United States v. Lampley-Reid, AUSA Farrell was part of the team leading to a Bloods gang member being sentenced to 23 years in prison for sex trafficking of minors.  Additionally, AUSA Farrell is part of the team charging former CEO of Abercrombie & Fitch and two other individuals with sex trafficking and interstate prostitution.

    Gabriel Park

    AUSA Park joined the Office in 2022 after serving in the United States Air Force Judge Advocate General’s Corps.  He received his B.A. from Wake Forest University and his J.D. from Brooklyn Law School and clerked for the Honorable Dora L. Irizarry.  He currently serves in the Office’s Organized Crime and Gangs Section.

    AUSA Park has prosecuted significant violent organized crime and gang cases.  In United States v. Yu, he was part of the prosecution team that convicted two defendants who were subsequently sentenced to life imprisonment in a murder-for-hire scheme of a perceived business rival, and in the related case United States v. Abreu, AUSA Park was on the prosecution team that convicted a third defendant for his role in the murder-for-hire scheme.  In United States v. Thompson, AUSA Park was on the prosecution team that convicted a Long Island man who was later sentenced to 30 years in prison for drug trafficking, distribution of fentanyl that resulted in a death and illegal possession of firearms.    

    MIL Security OSI –

  • MIL-OSI United Kingdom: GAD’s interest rate advice for the Ukraine loan

    Source: United Kingdom – Executive Government Non-Ministerial Departments

    News story

    GAD’s interest rate advice for the Ukraine loan

    GAD advised HM Treasury on the interest rate to be charged on the UK’s £2.26 billion loan to Ukraine.

    Credit: Max Kukurudziak, Unsplash

    We analysed and advised HM Treasury on the options around setting an interest rate on UK’s loan to Ukraine.

    The Chancellor Rachel Reeves and Ukraine’s Finance Minister Sergii Marchenko signed the UK-Ukraine Bilateral agreement at the beginning of March, witnessed by the Prime Minister and President Zelenskyy at a ceremony in Downing Street.

    GAD assessed financial considerations for setting an interest rate on the loan of £2.26 billion to Ukraine. It will be paid back using the extraordinary profits generated on sanctioned Russian sovereign assets held in the EU.

    This is the UK’s contribution to the G7 Extraordinary Revenue Acceleration (ERA) Loans to Ukraine scheme, through which G7 countries will collectively provide $50 billion to support Ukraine.

    Repaying the loan

    The loan is novel in that its repayments will be drawn from a future income stream derived from the profits on immobilised Russian sovereign assets. This means that careful consideration of the potential income stream of these assets had to be considered in our calculations.

    Our analysis and supporting assumptions formed the basis of our advice to HM Treasury around the level and structure of the interest rate on the loan.  

    Credit: iStock Photo

    UK commitment

    Deputy Government Actuary Matt Gurden said: “The work we undertook to advise on the interest rate played a key part in ensuring the suitability of the UK government’s loan contribution to Ukraine.”

    The funding will be delivered in 3 equal annual payments of £752m. The announcement of the loan agreement is on top of the £3 billion a year commitment by the UK to provide military aid for Ukraine.

    Updates to this page

    Published 5 March 2025

    MIL OSI United Kingdom –

  • MIL-OSI: Neurones: Net profit up 7.8% in 2024

    Source: GlobeNewswire (MIL-OSI)

    PRESS INFORMATION
    Heading: 2024 annual results        Nanterre, March 5, 2025 (after trading)

    Net profit up 7.8% in 2024

    Financial statements at December 31 (1) 2023 2024
    Revenues 741.2 810.4
    Business operating profit (2) 81.5 (11%) 84.1 (10.4%)
    Operating profit 75.9 (10.2%) 77.9 (9.6%)
    Financial profit 4.9 10.2
    Tax on earnings (22.2) (24.9)
    Net profit 58.6 (7.9%) 63.2 (7.8%)
    – of which, group share 49.4 52.5
    Free cash flow (3) 51.6 74.6
    Cash and cash equivalents net of financial debt (4) 290.4 319.5
    Staff at year-end 6,749 7,087

    (1)        In millions of euros, 2024 financial statements approved by the Board of Directors on March 5, 2025.
    (2)        Before cost of bonus shares
    (3)        Cash flow from operational activities, plus financial profit/loss and less net industrial investments.
    (4)        Excluding IFRS16 lease liabilities.

    Achievements

    NEURONES enjoyed another year of sustained growth in 2024 (+ 9.3%, of which + 8.6% organic compared with + 0.7% for the Consulting and Digital Services market), while net profit grew by 7.8%.

    Free cash flow rose sharply, with a reduction in working capital requirement (- €8.5m) and capital expenditure (Capex) back to its usual level (€11.8m after €17.9m invested in the previous financial year, mainly in the Group’s SecNumCloud sovereign and secure cloud platform).

    Cash and cash equivalents at the end of the year rose to €319.5m (or €13 per share).

    Outlook

    As usual, forecasts for the current year will be posted along with the Group’s 1st quarter revenues (on May 7, after the closing of the stock exchange). Driven by solid underlying trends (AI, cloud, cybersecurity, digital, data), NEURONES is well positioned to achieve another year of profitable growth.

    At the Shareholders’ Meeting on June 5, the Board will suggest paying a dividend of €1.3 per share for 2024 (compared with €1.2 the previous year).

    About NEURONES
    With close to 7,200 experts, and ranking among the French leaders in consulting and digital services, NEURONES helps large companies and organizations implement their digital projects, transform their IT infrastructures and adopt new uses.

    Euronext Paris (compartment B – NRO) – Euronext Tech Leaders – DSS mid-caps – ‘PEA-PME’ eligible
    www.neurones.net

    Attachment

    The MIL Network –

  • MIL-OSI USA: Luján Introduces Legislation to Modernize Broken Mining Law, Protect Public Lands and Taxpayers

    US Senate News:

    Source: US Senator for New Mexico Ben Ray Luján

    Luján Bill Would Update the 1872 Mining Law Which Has Led to Significant Waste, Fraud, and Abuse

    Washington, D.C. – Today, U.S. Senator Ben Ray Luján (D-N.M.) introduced the Mining Waste, Fraud, and Abuse Prevention Act of 2025, legislation that would reform the broken 1872 Mining Law. Failure to update the 1872 Mining Law has allowed mining companies to exploit public resources for free, pass environmental costs onto taxpayers, and engage in speculation with minimal government oversight. Congressman Raúl Grijalva (D-Ariz.) leads companion legislation in the House.

    Senator Luján’s bill would update the 153-year-old law by eliminating patenting of federal lands, imposing a federal minerals royalty, establishing a Hardrock Minerals Reclamation Fund for the cleanup of abandoned mines, and requiring a review of certain lands within three years to determine if they should be available for future mining claims.

    “Elon Musk and President Trump are putting a chainsaw to our federal workforce and public lands protections. If Republicans were serious about eliminating waste, fraud, and abuse, they would join me in reforming this Civil War-era mining law that has allowed mining companies to exploit our gold, silver, and critical minerals from public lands without paying their fair share and stiffing the American taxpayer with the cleanup costs. It’s far past time that we update this law to crack down on actual waste, fraud, and abuse,” said Senator Luján. “I am proud to lead this legislation to modernize the broken 1872 Mining Law to reduce waste, protect taxpayers, generate revenue, and protect public lands. I look forward to working with my colleagues to get this legislation passed.”

    “For more than a century and a half, the mining industry has operated under an outdated, free-for-all system that gives them carte blanche to pollute and destroy, while American taxpayers get stuck with the cleanup bill. Under the Mining Law of 1872, foreign-owned companies, even companies controlled by our adversaries with egregious track records of human rights abuses and environmental harms, can mine our publicly-owned minerals. These companies then ship our minerals abroad without paying a cent back to the American people or even committing for these minerals to support the U.S. economy. It’s past time to reject this harmful status quo and move forward with commonsense reforms that protect Americans and ensure a more responsible, accountable mining industry that actually benefits Americans,” said Representative Grijalva. “Securing the minerals we need for our clean energy future cannot come at the cost of our environment, our health and safety, or tribal sovereignty. I want to thank Senator Luján for lending his leadership to join me in this effort and encourage my colleagues on both sides of the aisle to do the same.”

    Specifically, the Mining Waste, Fraud, and Abuse Prevention Act of 2025 would:

    • Require annual rental payments for claimed public land, thereby treating mine operators as other public land users.
    • Set a royalty rate of not less than 5% and not greater than 8% based on the gross income of production on federal land but would not apply to mining operations already in commercial production or those with an approved plan of operations.
    • Revenues would be deposited into a Hardrock Minerals Reclamation Fund for abandoned mine cleanup. Additionally, the Fund would be infused by an abandoned mine reclamation fee of 1% to 3%.
    • Allow the Secretary of the Interior to grant royalty relief to mining operations based on economic factors.
    • Require an exploration permit and mining operations permit for non-casual mining operations on federal land, which would be valid for 30 years and continue as long as commercial production occurs.
    • Permit states, political subdivisions, and tribes to petition the Secretary of the Interior to have lands withdrawn from mining.
    • Require an expedited review of areas that may be inappropriate for mining, and allow specific areas be reviewed for possible withdrawal.

    The Mining Law of 1872 was enacted to promote mineral exploration and development in the western United States. Today, the Civil War-era statute still guarantees broad rights to individuals and corporations, including foreign-owned, to extract minerals from public lands without payment of royalties to the federal government and constrains protections for public health and the environment.

    The legislation is cosponsored by U.S. Senators Michael Bennet (D-Colo.), Cory Booker (D-N.J.), Martin Heinrich (D-N.M.), Edward J. Markey (D-Mass.), Jeff Merkley (D-Ore.), Alex Padilla (D-Calif.), Bernie Sanders (D-Vt.), Chris Van Hollen (D-Md.), Ron Wyden (D-Ore), and Elizabeth Warren (D-Mass.).

    The legislation is supported by Earthjustice, Earthworks, Hualapai Tribe, The Wilderness Society, Natural Resources Defense Council, Grand Canyon Trust, Outdoor Alliance, Backcountry Hunters & Anglers, the National Parks Conservation Association, and Trout Unlimited.

    Endorsement quotes can be found here.

    Full bill text is available here.

    MIL OSI USA News –

  • MIL-OSI United Kingdom: Council approves ambitious Budget plan

    Source: Scotland – City of Aberdeen

    New and upgraded schools, a major roads project, continuing investment in the city centre, and increased support for vulnerable and disadvantaged citizens form the basis of Aberdeen City Council’s 2025/26 Budget, which was approved today. 

    The Council is to spend £247 million on schools over the next five years, including £121m on the new Hazlehead Academy. There is a commitment to expand facilities at Harlaw Academy, refurbish St Peter’s Roman Catholic School and Ferryhill Primary, and progress an extension for Bucksburn Academy. 

    To help reduce congestion, £55 million will go to the Berryden Corridor Improvement Project, with work starting next year. In the city centre, £13m will be used to enhance the Castlegate as a public space. 

    The Budget also makes £1.534m available to the Fairer Aberdeen Fund in 2025/26, £1m through the Anti-Poverty and Inequality Committee for people struggling with the cost of living, and an extra £9.5m to deliver social care, bringing the Council’s total award to the Integration Joint Board (IJB) to £140m for the coming 12 months. 

    Councillor Alex McLellan, convener of the Finance and Resources Committee, said: “Despite the Council operating in incredibly challenging circumstances, we remain focussed on delivering essential public services and assisting people through the ongoing cost-of-living crisis. 

    “Aberdeen City Council is continuing to invest in the school estate, in roads, and other key infrastructure such as the regeneration of the city centre and beach area. 

    “These actions will ensure Aberdeen continues to be a place people want to live, want to work, want to raise a family, and want to start a business.” 

    The Budget allocates £668m to delivering public services in 2025/26 and £709m to capital projects over the next five years. 

    The Common Good Fund will help provide nearly £1.5m for to 15 external organisations for 2025/26, supporting recommendations put forward by the Culture Investment Panel.  Aberdeen Performing Arts was awarded £961,000.

    Sport Aberdeen, which operates the city’s leisure venues, will receive £4.1m for 2025/26. 

    And the Council will also fund a Cruyff Court in Kincorth – the city’s 4th – in partnership with the Denis Law Legacy Trust.  

    The gap between income and expenditure was estimated at £18.1m for 2025/26. To help address the shortfall and maintain service delivery, Council Tax is to rise by 9.85% in 2025/26. 

    For the next 12 months the Council’s Carbon Budget was set at 22,567 tonnes of carbon dioxide equivalent, a maximum target on the road to Next Zero emissions by 2045.  

    Actions agreed include:  

    • Completing a £19m investment in a Hydrogen Hub, a joint venture with bp to produce and distribute green hydrogen;
    • £9m to enlarge the electric vehicle charging network. 

    MIL OSI United Kingdom –

  • MIL-OSI Security: New York Man Who Ran Multimillion-Dollar Cryptocurrency Investment Scheme Found Guilty of Wire Fraud and Money Laundering

    Source: Federal Bureau of Investigation (FBI) State Crime Alerts (b)

    SAN FRANCISCO – A federal jury convicted Douglas Jae Woo Kim, 32, of New York, New York, on 14 counts of wire fraud, international money laundering, and money laundering.  The jury reached its verdict yesterday afternoon, following a three-week trial before Senior U.S. District Judge Charles R. Breyer.  

    According to court documents and evidence presented at trial, between October 2017 and June 2020, after moving to San Francisco, Kim engaged in a scheme to defraud investors, many of whom were friends and acquaintances, of over $7 million in money and cryptocurrency by holding himself out as a legitimate trader of cryptocurrency, a form of virtual currency.  Kim falsely represented that he was seeking short-term liquidity in the form of loans or investments for cryptocurrency trading or other legitimate business purposes and promised to trade or invest the cryptocurrency provided by investors and lenders to make a profit.  He also told victims that the loans carried no or very low risk, promised high rates of return on their loans, and claimed that he had sufficient funds to personally guarantee the loans.  

    “This case may involve the new world of virtual currency, but there’s nothing new about the defendant’s scheme to defraud,” said Acting United States Attorney Patrick D. Robbins.  “Douglas Kim made bogus promise after promise to investors and lenders, only to cheat them and send their money to offshore gambling sites.  Today’s verdict sends a clear message to anyone who engages in fraud in the Northern District of California: you will be prosecuted, and you will face serious consequences.”

    “Mr. Kim deceived those who trusted him, exploiting their confidence to fund his personal gambling activities rather than the legitimate investments he offered his victims. The FBI remains committed to identifying and bringing to justice individuals who manipulate and defraud others for financial gain,” said FBI Acting Special Agent in Charge Dan Costin.

    In October 2017, Kim contacted a victim by text message and said he was looking for investors interested in making what he called a short-term loan for a “fairly modest operation.”  Kim represented that he was investing in a cryptocurrency operation in which he would make a profit from fees charged to a peer-to-peer network and from exchange transactions, and informed the victim that the operation “isn’t very risky to me.”  Within days of receiving cryptocurrency from the victim to finance the investment, Kim transferred almost all of it to bitcoin sports betting sites located outside the United States.  Kim went on to obtain over a million dollars’ worth of funds from this victim over the course of the scheme, the majority of which went to offshore sports betting sites.

    In November 2017, Kim contacted another victim by email and said he was looking for cryptocurrency for a trading strategy.  Kim assured that the victim that “my activities are fairly low risk.”  On Dec. 1, 2017, Kim obtained a cryptocurrency loan from this victim worth approximately $186,000 at the time. Once the cryptocurrency was obtained, Kim immediately sent all of it to offshore sports betting sites. In total, Kim obtained over $500,000 in funds from this victim.

    In an agreement dated Jan. 1, 2018, Kim set out the terms of a similar investment with a third victim.  The agreement called for the victim to provide cryptocurrency valued at approximately $200,000 at the time.  The same day, Kim converted more than half of the funds to bitcoin and, in the following days, transferred substantially all the converted cryptocurrency to his account with an offshore casino.  Kim went on to obtain over $4 million in funds from this victim.

    Kim defrauded numerous other victims, including nine who testified at trial, until at least July 2020, when he was charged by federal complaint.  In 2023, while he was out on pretrial release, Kim allegedly renewed his scheme to defraud.  One count related to this renewed period of fraud remains pending.  

    The jury acquitted Kim of one count of international money laundering.

    Kim is scheduled to appear on June 25, 2025, to set a date for sentencing.  He faces a maximum penalty of 20 years in prison for each count of wire fraud and international money laundering, and 10 years in prison for each count of money laundering.  Any sentence will be imposed by the Court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.  

    Assistant U.S. Attorneys Noah Stern and Maya Karwande are prosecuting the case with the assistance of Veronica Hernandez, Maryam Beros, Andy Ding, Lynette Dixon, and Christine Tian. The prosecution is the result of an investigation by the FBI and IRS Criminal Investigation. 
     

    MIL Security OSI –

  • MIL-OSI United Kingdom: UKHSA appoints new Chief Operating Officer

    Source: United Kingdom – Executive Government & Departments

    News story

    UKHSA appoints new Chief Operating Officer

    Dyfed Alsop joins UKHSA as new Chief Operating Officer and Deputy CEO from the Welsh Revenue Authority (WRA)

    Dyfed Alsop has been appointed as UKHSA’s new Chief Operating Officer and Deputy Chief Executive Officer, starting 1 May 2025.

    He has already begun working with UKHSA, attending meetings and building relationships across the agency, ahead of his formal start date later in the year.

    Dyfed joins UKHSA from the Welsh Revenue Authority (WRA), where he served as Chief Executive since 2017.

    He will work alongside UKHSA Chief Executive Jenny Harries and the Executive Committee over the coming months to ensure continuity of leadership and operations ahead of Jenny Harries’ departure in early summer. 

    As Deputy Chief Executive, Dyfed will cover the CEO role until a new chief executive is appointed.

    UKHSA Chief Executive Jenny Harries said:

    I am absolutely delighted to welcome Dyfed to our organisation as Chief Operating Officer and Deputy CEO. His extensive experience in public and private sectors, combined with his strong track record in delivering transformation and managing complex operations, makes him ideally suited for this role.  Dyfed’s appointment strengthens our Executive Committee team and his expertise and leadership style will be invaluable as we continue to develop our people, embed a new culture and grow our organisation.

    Dyfed Alsop said:

    I’m delighted to be joining UKHSA at such an interesting time in the organisation’s development. I’m looking forward to getting out and about to meet people and learn more about the important work that UKHSA does.

    I’m passionate about public service and the potential we have collectively to make a difference. I can’t wait to get started.

    Dyfed has held senior leadership positions across government, including the Valuation Office Agency, HM Treasury and HM Revenue & Customs.

    Updates to this page

    Published 5 March 2025

    MIL OSI United Kingdom –

  • MIL-OSI United Kingdom: Government to unleash the North Sea’s clean energy future

    Source: United Kingdom – Executive Government & Departments

    Press release

    Government to unleash the North Sea’s clean energy future

    The government is consulting on plans to put the North Sea at the heart of Britain’s clean energy future and drive economic growth.

    • UK government consults on plan to unleash the North Sea’s clean energy future and ensure prosperous and sustainable transition for oil and gas

    • this plan backs industry to make North Sea a world-leader in offshore industries, such as hydrogen, carbon capture and wind, as part of the government’s clean energy superpower mission

    • it also offers oil and gas industry long-term certainty on the fiscal landscape by ending the Energy Profits Levy and consulting on a new regime to boost investment in jobs and growth 

    • consultation gives certainty to industry about the lifespan of oil and gas projects by committing to maintain existing fields for their lifetime and work with business and communities on a managed transition, while implementing the commitment not to issue new licences to explore new fields 

    The government has today (Wednesday 5 March) launched a consultation that will put the North Sea – its communities, workers, businesses and supply chains – at the heart of Britain’s clean energy future to drive economic growth and deliver the Plan for Change.   

    This will support private investment into the technologies that will deliver the next generation of good jobs for North Sea workers, invest in local communities, cut carbon emissions and help the UK become energy secure.

    The consultation sets out the next steps in the government’s overarching objective for the North Sea to make it a world leading example of an offshore clean energy industry, building on the UK’s world-class oil and gas heritage. In addition to maintaining existing oil and gas fields, and continuing ongoing domestic production, which have been critical to the UK’s energy system and will continue to play an important role for decades to come, the government wants to boost the economy through the expansion of clean technologies, protecting the country’s energy security in the process. To achieve this, the government needs to ensure the oil and gas industry and its workers can take advantage of a clean energy future.

    Separately, HM Treasury and HM Revenue and Customs are confirming that the Energy Profits Levy will end in 2030. They are consulting on what a new regime could look like, to respond to any future shocks in oil and gas prices. The government will work closely with the sector and other stakeholders to develop an approach that protects jobs in existing and future industries and delivers a fair return for the nation, during times of unusually high prices. The government will ensure that the oil and gas industry has the long-term certainty it needs on the future fiscal landscape, helping to support investment and protect businesses and jobs now and for the future. 

    The government is committed to working with industry, communities, trade unions and wider organisations to develop a plan that will ensure a phased transition for the North Sea – creating tens of thousands more jobs in offshore renewables estimated by 2030.   

    The government recognises the call of workers and trade unions for a coordinated plan to protect good jobs, pay terms and conditions in the North Sea, and commits to shaping this plan with workers and unions. 

    The consultation also includes delivering the government’s commitment not to issue new licences to explore new oil and gas fields in the UK, in line with the science of what is required to keep global warming to 1.5 degrees. The consultation also engages with industry on how to manage existing fields, which will continue to make an important contribution during the clean energy transition, for the entirety of their lifespan.  

    This comes after the government has backed new investment into Scotland’s clean energy future, awarding £55.7 million to the Port of Cromarty Firth, securing critical facilities needed for the rapid development of new floating offshore wind farms and ensuring that they are built from the UK.

    By sprinting to achieve this mission, the UK can take back control of its energy and protect both family and national finances from fossil fuel price spikes – with cleaner, affordable, homegrown power. As part of this, Britain must also reduce its dependency on oil and gas, which leaves consumers exposed to unstable global energy markets, as its price is set on international markets.  

    Energy Secretary Ed Miliband said: 

    The North Sea will be at the heart of Britain’s energy future. For decades, its workers, businesses and communities have helped power our country and our world. 

    Oil and gas production will continue to play an important role and, as the world embraces the drive to clean energy, the North Sea can power our Plan for Change and clean energy future in the decades ahead.  

    This consultation is about a dialogue with North Sea communities – businesses, trade unions, workers, environmental groups and communities – to develop a plan that enables us to take advantage of the tremendous opportunities of the years ahead.

    Diversifying the North Sea industries while domestic production is managed for decades to come is key to protecting its jobs and investment in the long-term. Today’s consultation explores how to harness the North Sea’s existing infrastructure, natural assets and world-leading expertise to deploy new technologies – like hydrogen, carbon capture and storage, and renewables – to create skilled jobs, meet the UK’s climate obligations, and make the UK a clean energy superpower.  

    It is estimated that the offshore renewables workforce, including offshore wind, CCUS and hydrogen, could increase to between 70,000 and 138,000 in 2030, Meanwhile, an up-and-running carbon capture industry alone is expected to add around £5 billion per year of gross value to the UK economy by 2050. 

    New proposals could also see changes to the role of North Sea Transition Authority, as the regulator of UK oil and gas, offshore hydrogen, and carbon storage industries. This includes ensuring the authority has the regulatory framework it needs to support the government’s vision for the long-term future of the North Sea and enable an orderly and prosperous transition to clean energy.  

    The government has already taken rapid steps in accelerating clean energy industries – with the biggest ever investment in offshore wind and up to £21.7 billion in funding over the next 25 years for carbon capture and storage and hydrogen projects. This comes alongside the launch of Great British Energy, headquartered in Aberdeen, and the creation of a National Wealth Fund, both of which will unlock significant investment in clean power projects across the UK and help create thousands of skilled jobs. 

    The government has also consulted on revised environmental guidance offshore oil and gas projects and will respond to give certainty to the industry and enable developers to resume applying for consents for already-licensed projects. This follows a Supreme Court ruling last year that requires regulators to consider the impact of burning oil and gas – known as scope 3 emissions – in the Environmental Impact Assessment for new projects.

    Exchequer Secretary to the Treasury, James Murray, said: 

    We are committed to working together with the sector on the future of the North Sea by providing the stability they need to keep investing and supporting jobs across the country while ensuring they make a fair contribution at times of unusually high prices. 

    Tania Kumar, Net Zero Director, CBI said:

    The North Sea has long been a cornerstone of the UK’s energy sector and will continue to play a vital role in securing energy independence and transitioning to a low-carbon economy. Today’s consultations highlight the government’s commitment to a managed transition. Success hinges on our collaboration with communities, workers, and businesses to develop a practical plan.   

    Robust regulation and the pivotal role of the North Sea Transition Authority will be essential. The UK’s net zero economy is growing faster than the rest of the economy – the future is green growth and managing the transition away from fossil fuels to a clean energy future for the North Sea is vital to achieving it. 

    Dhara Vyas, CEO, Energy UK said: 

    Today’s announcement offers a positive step toward a just transition for offshore workers. The North Sea has been an engine of economic growth and energy security for the UK, but it’s critical to ensure pathways are available for offshore workers to transition to the low carbon industries of the future. The government has a sent a strong signal about the UK’s clean energy future, and the role the North Sea will continue to play in fostering clean technologies such as offshore wind, hydrogen, and carbon capture and storage. The clean energy mission can help ensure the North Sea’s best days are ahead of it, powering economic growth and enabling the UK to lead the way in the global clean industrial revolution. 

    David Whitehouse, Chief Executive, OEUK said:

    The UK offshore energy industry, including its oil and gas sector, is responsible for thousands of jobs across Scotland and the UK, and today the government has committed to meaningful consultation on the long-term future of our North Sea. That is important and welcomed. Energy policy underpins our national security – how we build a clean energy future and leverage our proud heritage matters.

    Today’s consultations, on both the critical role of the North Sea in the energy transition and how the taxation regime will respond to unusually high oil and gas prices, will help to begin to give certainty to investors and create a stable investment environment for years to come. We will continue to work with government and wider stakeholders to ensure a future North Sea which delivers economic growth and supports the communities that rely on this sector and workers across right and the UK.

    Rachel Solomon Williams, Executive Director, Aldersgate Group said:  

    The private sector recognises the growth opportunity of the clean energy transition alongside the risks associated with investments that are incompatible with the 1.5C target. This consultation is an important step on the path to building a prosperous and resilient economy, with wider benefits across all regions of the UK. Investing in assets that risk becoming stranded is sustainable for neither the UK economy nor the environment – the government’s recognition of this position will contribute to resolving uncertainty and building private sector confidence for clean energy investments in the region.    

    The skills and expertise built over recent decades in the North Sea are invaluable. They are highly transferable for clean energy and other growth sectors, both directly and with further upskilling. We welcome the government’s announcement that it is ensuring that the North Sea transition makes best use of the strengths in the region, creating opportunities and jobs. Capturing this growth opportunity for the UK must ensure that the local communities and workers can play a role in future energy sectors. The right policy framework and engagement with industry and local communities can enable a transition to net zero emissions without deindustrialisation.

    Dan McGrail, Chief Executive, RenewableUK said: 

    The biggest offshore wind farms in the world are being built in the North Sea and even more ambitious projects are being planned. Offshore wind is at the very heart of the government’s mission to reach clean power by 2030 and net zero by 2050, and the industry also offers the UK one of its biggest opportunities for job creation, industrial regeneration and economic growth. 

    The North Sea is already playing a crucial role in powering the UK and this is set to grow in the years ahead. A future focused on offshore wind isn’t just cleaner – it provides a more stable energy system for billpayers as we will be less exposed to volatile international fossil fuel prices. Offshore wind also offers opportunities for skilled workers from other industries to transfer into this dynamic and innovative sector.

    Notes to Editors 

    The Department for Energy Security and Net Zero’s consultation on Building the North Sea’s Energy Future will run for 8 weeks from 5 March to 30 April.

    The government is consulting on how to deliver its commitment to end new licences to explore new fields, including all new seaward exploration and production licences to search for and extract new oil and gas resources in the UK. Licence extensions and transfers would not be affected, to facilitate existing fields to operate for the entirety of their lifetime and support the government’s commitments not to revoke existing licences. Licences for carbon storage, gas storage and methane drainage would also not be affected.   

    The consultation also sets out the government’s commitment to end new licences for onshore oil and gas exploration and production in England.    

    HM Treasury’s consultation on High Price Mechanism for Oil and Gas will run for 12 weeks from 5 March to 28 May.   

    Officials figures from the Department for Energy Security and Net Zero’s ‘Digest of UK Energy Statistics’ show a 72% reduction in UK oil and gas production occurring between 1999 and 2023. The North Sea Transition Authority also predicts an 89 per cent drop in UK oil and gas production by 2050.   

    Office for National Statistics’ analysis shows that direct jobs in oil and gas extraction fell by around a third between 2014 and 2023.   

    Meanwhile, findings from the Robert Gordon University study ‘Powering up the Workforce’ in 2023 estimated that the offshore renewables workforce – which includes offshore wind, carbon capture and storage, and hydrogen – could increase to between 70,000 and 138,000 in 2030. This study also found that over 90% of the UK’s oil and gas workforce have medium to high skills transferability and are well positioned to work in adjacent energy sector.   

    Today’s announcement also comes after the government confirmed Aberdeen, Cheshire, Lincolnshire and Pembrokeshire as key growth regions for clean energy and launched pilots to help workers in these areas access jobs in new clean energy industries.    

    Oil and gas workers will also get help to move into these sectors, thanks to a new energy ‘skills passport’ launched last month – led by Renewable UK and Offshore Energies UK, and backed by UK and Scottish Governments. This tool will support workers into careers in offshore wind initially, before being expanded to other renewables roles later this year.   

    Many of the skills required for the transition already exist, with research showing that 90% of oil and gas workers have transferable skills for offshore renewable jobs. The government is now exploring what further support is needed to help workers take full advantage of the UK’s clean energy transition, as part of its consultation on the future of the North Sea.

    Updates to this page

    Published 5 March 2025

    MIL OSI United Kingdom –

  • MIL-OSI Australia: Is your TPAR overdue?

    Source: Australian Department of Revenue

    If your business pays contractors for Taxable payments reporting system (TPRS) services, you may need to lodge a Taxable payments annual report (TPAR) by 28 August each year.

    From 22 March, we’ll apply penalties to businesses that:

    • haven’t lodged their TPAR from 2024 or previous years
    • have been issued 3 reminder letters about their overdue TPAR.

    Last year, we issued more than 11,000 businesses with approximately $18 million in penalties.

    If you don’t need to lodge a TPAR, you can submit a non-lodgment advice (NLA) form. If you no longer pay contractors, you can also use this form to indicate that you won’t need to lodge a TPAR in the future.

    TPAR data helps us identify contractors who under-report their income. This lets us level the playing field for honest businesses.

    Understand your TPAR lodgment obligations

    Find out more about how to prepare, record and report your TPAR.

    Remember, a registered tax professional or BAS agent can help you with your TPAR lodgment obligations.

    MIL OSI News –

  • MIL-OSI Australia: Operation Protego

    Source: Australian Department of Revenue

    About Operation Protego

    Operation Protego is an ATO-led investigation into large-scale GST fraud that was promoted particularly on social media. The attempted fraud involves an individual:

    • inventing a fake business
    • lodging a fraudulent Australian business number (ABN) application, and
    • submitting fictitious business activity statements (BAS) to attempt to gain a false GST refund.

    In May 2022 we issued warnings to the community to be on the lookout for fraud schemes being promoted through social media and other channels. We advised those who were involved to come forward.

    The most serious offenders of financial crime are referred to the ATO-led Serious Financial Crime Taskforce (SFCT), including individuals involved in Operation Protego. The SFCT is taking firm action against individuals, facilitators and promoters suspected of defrauding the community by inventing fake businesses to claim false GST refunds.

    You need to check the facts – nobody is giving money away for free or offering loans that don’t need to be paid back. Simply speaking, if you don’t operate a business, you don’t need an ABN, and you shouldn’t lodge a BAS. This is fraud.

    For those who may be tempted by the promise of big gains, the ATO has sophisticated risk models. We work with banks, law enforcement agencies and other organisations to share information and detect fraud. We also have access to intelligence through community tip offs, and other information sources. The SFCT brings together the knowledge, resources and experience of relevant law enforcement and regulatory agencies to identify and address the most serious and complex forms of financial crime.

    Latest news

    25 February 2025 – Benjamin West sentenced to 2 years jail

    Benjamin West has been sentenced to 2 years jail. He is to be released after serving 6 months in custody, on a recognisance release order of $500, and to be of good behaviour for 2 years. Mr West was also ordered to pay reparation of $49,226.

    In February 2022, Mr West applied for an Australian Business Number claiming he was providing garden and lawn maintenance services. He then knowingly provided his myGov login details to a third party who lodged 6 business activity statements, allowing Mr West to fraudulently obtain $49,226 in GST refunds before attempting to obtain a further $25,060 which was stopped by the ATO.

    An audit by the ATO determined that he was not operating a legitimate business, and therefore not entitled to the GST refunds he had claimed.

    17 February 2025 – Adam Hohenberger sentenced to 2 years and 3 months jail

    Adam Hohenberger was sentenced to 2 years and 3 months in jail for committing GST fraud. He is to be released after serving 8 months in custody, on a recognisance release order. He must be of good behaviour and be supervised by a probation officer for 19 months.

    Mr Hohenberger was charged with 22 counts of obtaining a financial advantage by deception and 16 counts of attempting to obtain a financial advantage by deception.

    In May 2020, an Australian business number (ABN) was created for a construction repair business in Mr Hohenberger’s name. In 2022, he lodged 98 business activity statements (BAS) receiving over $108,000 he was not entitled to.

    During the audit process it was discovered that Mr Hohenberger did not have the skills required to repair construction machinery and therefore he was not operating a legitimate business.

    Mr Hohenberger was also ordered to repay $108,451 to the ATO.

    29 November 2024 – Thitikorn Thanawong sentenced to 2 years and 8 months jail

    Thitikorn Thanawong recklessly dealt with $296,212 that was the proceeds of indictable crime. She spent the entire amount on holiday expenses, transfers to associates and luxury retail purchases.

    She was sentenced to 2 years and 8 months in jail, to be released on a recognisance release order after serving 10 months, upon entering recognisance of $2,000 and to be of good behaviour for 2 years.

    For more information, see Luxury spender jailed through Operation Protego.

    28 October 2024 – Craig Hamilton sentenced to 2 months and 2 weeks jail

    Craig Hamilton was sentenced to 2 months and 2 weeks jail, released immediately on a security of $500 and to be of good behaviour for 2 years for dealing with the proceeds of indictable crime. Mr Hamilton obtained and dealt with $80,000 of fraudulent funds.

    Mr Hamilton reactivated a past Australian business number (ABN) operating as a construction project manager. In February 2022, 4 business activity statements (BAS) were lodged for the business and he claimed GST refunds that he was not entitled to.

    During the audit process, several red flags were identified:

    • No website or social media presence existed for the business.
    • Reported expenses exceeded his actual earnings.
    • Identical expense amounts were reported every quarter.
    • 80% of his income came from government benefits.

    Mr Hamilton’s bank records also didn’t indicate any business expenses or wages being paid. Instead, his expenses were largely spent on fines and fees, takeout, and supermarket purchases.

    Of the $80,000 obtained, $72,905 was recovered from the bank after Mr Hamilton’s account was frozen. This left a balance of $7,094 which he was ordered to repay.

    16 October 2024 – Tahra Wyntjes sentenced to 4 years jail

    Tahra Wyntjes was sentenced to 4 years jail with a non-parole period of 2 years and 4 months. She was charged with one count of obtaining a financial advantage by deception and one count of attempting to obtain a financial advantage by deception.

    Ms Wyntjes obtained $599,349 in fraudulent GST refunds she was not entitled to and attempted to obtain a further $259,976, which was stopped by ATO officers.

    Ms Wyntjes registered for both an ABN and for GST in November 2021 for a residential cleaning business. Between November 2021 and March 2022, she lodged fraudulent BAS, which ATO officers quickly noticed and began investigating.

    Ms Wyntjes was ordered to repay $599,349 by the court.

    For more information, see Victorian woman sentenced over GST fraud.

    9 October 2024 – Aman Akol sentenced to 6 months jail

    Aman Akol was sentenced to 6 months jail, released on a security of $1,000 and good behaviour for one year. She was charged with one offence of obtaining a financial advantage by deception, and one offence of attempting to obtain a financial advantage by deception.

    Between 20 October 2021 and 2 March 2022, Ms Akol conspired with an online associate to dishonestly lodge 7 BAS for a cleaning business that did not exist. These lodgments resulted in Ms Akol fraudulently obtaining $85,759 in GST refunds she was not entitled to and attempting to obtain a further $27,960.

    Aman Akol is the sister of Arec Akol who was charged and sentenced with similar offences in January 2024.

    6 September 2024 – Lee Sheridan sentenced to 2 years jail

    On 6 September 2024, Lee Sheridan was sentenced to 2 years in jail, to be released after having served 6 months, for dealing with the proceeds of crime (GST fraud).

    Mr Sheridan received and spent fraudulent GST refunds totalling $377,820 after he provided his personal details to an individual who lodged 38 original and revised monthly BAS on his behalf.

    For more information, see Operation Protego holds Perth offender to account.

    31 May 2024 – Joshua Mitchell sentenced to 18 months in jail

    On 31 May 2024, 33-year-old Joshua Mitchell was sentenced to 18 months imprisonment, partially suspended with a $2,000 recognisance, under supervision and good behaviour. Mr Mitchell was also ordered to pay reparation of $24,200.

    Between 11 March 2022 and 2 April 2022, Mr Mitchell dishonestly lodged one original and one revised BAS, for a business that did not exist. He fraudulently obtained a total of $24,200.

    During the same period, he disposed of almost all the proceeds he had fraudulently obtained through payments to associates, streaming services and restaurants.

    26 March 2024 – Lisa McCormick sentenced to 2 years 6 months jail

    Lisa McCormick was sentenced to 2 years and 6 months jail and ordered to repay $39,600 in fraudulent funds. After serving 12 months, she will be released on a security of $5,000 and good behaviour for 18 months.

    Between 3 March 2022 and 30 April 2022, Mrs McCormick lodged 3 fraudulent BAS and as a result, received a GST refund of $39,600 which she was not entitled to. She also tried to obtain a further $9,820.

    While undergoing investigation, Mrs McCormick sent 8 false documents to the ATO which she was later charged over.

    She was charged with 2 counts of obtaining financial advantage by deception, one count of attempt to obtain financial advantage by deception, and one count of using a false document with the intention of dishonestly inducing a Commonwealth public official.

    22 January 2024 – Arec Akol sentenced to 3 months jail

    Arec Akol was sentenced to 3 months jail, released on a security of $5,000 and good behaviour for a year. She was charged with one count of obtaining financial advantage by deception.

    Ms Akol had registered an ABN for a cleaning business which didn’t exist. Seven fraudulent BAS were then lodged between 1 April 2021 and 28 February 2022.

    In total, Ms Akol claimed a GST refund of $69,461 which she was not entitled to. She was ordered to repay this amount in full.

    12 January 2024 – Adam Mitchell sentenced to a community corrections order of 15 months

    Adam Mitchell was sentenced to a community corrections order of 15 months after being charged with one offence of dealing in money or property that was the proceeds of crime worth $10,000 or more.

    Mr Mitchell had registered an ABN in 2017 and registered for GST reporting on 8 April 2022. On 22 April 2022, he lodged a fraudulent BAS claiming a GST refund of $18,000.

    In addition to the community corrections order, Mr Mitchell was ordered to repay the Commonwealth the full amount he had fraudulently claimed.

    17 November 2023 – Wayne Garrett sentenced to 3 years and 4 months jail

    Wayne Garrett was sentenced to 3 years and 4 months in jail with a non-parole period of 1 year and 9 months and ordered to repay $180,095 for GST fraud. He was charged with one count of obtaining a financial advantage by deception, one count of attempting to obtain a financial advantage by deception and one count of joint commission with a person of interest.

    Mr Garrett received $180,095 in GST refunds he was not entitled to. He also attempted to obtain a further $50,644.

    23 October 2023 – Rachel Saville sentenced to 1 year and 8 months jail

    Rachel Saville was sentenced to 1 year and 8 months jail after being charged with 4 counts of obtaining benefit by deception.

    Ms Saville reactivated an ABN for a jewellery and silver manufacturing business on 7 February 2022. Between 21 February 2022 and 26 July 2023, she lodged 63 fraudulent BAS obtaining $73,650 that she was not entitled to.

    Ms Saville also attempted to claim a further $192,983 in fraudulent GST refunds.

    For more information, see Wollongong woman jailed for GST fraud.

    30 August 2023 – Linden Phillips sentenced to 7 and a half years jail

    Linden Phillips was sentenced to 7 years and 6 months in prison with a non-parole period of 5 years. He was changed with obtaining financial advantage by deception, attempt to obtain financial advantage by deception, and deal with the proceeds of crime.

    Mr Phillips lodged false BAS which saw him fraudulently receive more than $830,000.

    For more information, see Mildura man jailed for 7 years for GST fraud.

    Update: Upon appeal, the sentence was reduced on 13 June 2024 to 6 years and 3 months with a non-parole period of 4 years.

    29 August 2023 – Justin McCormick sentenced to 2 years jail

    Justin McCormick was sentenced to 2 years jail with a 12-month non-parole period and ordered to repay almost $110,000 of funds fraudulently obtained. He was charged with 5 offences of dishonestly obtaining a financial advantage by deception from the Commissioner of Taxation.

    Mr McCormick had an ABN which had been registered between 28 March 2009 and 13 February 2015. He then re-registered this ABN on 11 February 2022 with the intent to lodge BAS for a business that did not exist and to claim GST on purchases that were never made.

    As a result of the false information reported in each BAS, McCormick obtained $109,278 in GST refunds, an amount to which he was not entitled.

    For more information, see Perth man jailed as Protego enforcement action continues.

    MIL OSI News –