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  • MIL-Evening Report: What did the parties say on TikTok in the election, and how? Here’s the campaign broken down in 5 charts

    Source: The Conversation (Au and NZ) – By Hannah Oates, PhD Candidate, School of Social Sciences, Monash University

    TikTok emerged as a key battleground in an election where young voters comprised a dominant share of the electorate. All the prominent political parties used the platform – especially after tactics by Labor contributed to its electoral success in 2022.

    With 60% of Gen Z now getting their news primarily from social media, this shift reflects a welcome effort to meet young voters where they are.

    But on these platforms, visibility alone isn’t enough. What you say, and how you say it, matters just as much.

    Collecting the data

    We collected and manually analysed more than 500 TikTok posts from the official accounts of Labor, the Liberals, the Greens and One Nation during the federal election campaign period (March 28 to May 2).

    Data was collected using web-scraping software, and included captions, sounds, hashtags and engagement metrics.

    Our analysis focused on both the discursive content (what was said) and performative use of the platform (how it was said).

    We manually categorised posts by their focus, whether political, apolitical, or blending politics and entertainment (“politainment”). We also grouped them according to their primary purpose:

    • promoting the party’s own policies

    • attacking opponents

    • or shaping their public image to appeal to a TikTok audience.

    We also coded posts by topic, including key campaign issues, such as the economy, health, housing and climate.

    What we found

    Labor had the highest total number of posts, which correlated to the highest views and a fairly strong engagement rate (10.5%). Engagement rates are calculated by the total number of user interactions with a post (comments, likes, shares) relative to how many people viewed the post.

    Labor also had a relatively balanced gender reach, skewing young.

    The Liberals posted frequently, as well, with an ever so slightly lower engagement rate (10.1%) and a more male-leaning audience.

    One Nation, though with far fewer posts, still achieved notable reach.

    Despite a smaller post volume than major parties, the Greens stood out for having the highest engagement rate by far (14.4%), along with the highest share of female and young audience followers.

    Focus, tone and messaging

    Clear differences emerge in how parties used TikTok to communicate.

    The Liberals leaned heavily into politainment (75%) and attack ads (nearly 90%). They rarely promoted their own policies, with only 12% of posts being solely focused on their campaign promises.

    Their content was strongly centred around the economy (60%) and energy (26%). Three-quarters of their posts were designed to target and appeal primarily to young audiences through the inclusion of informal language, youth-focused policies and youth slang and trends.

    One Nation, in contrast, was the most overtly political (94%) and traditional in tone (88% professional language). It directed its messaging to a general audience with a strong focus on attack content (82%).

    On the whole, One Nation’s content consisted of long formal news interviews and speeches, and was not well-adapted to suit the TikTok medium.

    Labor blended politainment (58%) with substantive political messaging (42%). About 35% of the videos were promoting party policy, while 53% were attack ads. It focused most on Medicare (44%), education, and housing – all issues particularly resonant with younger people (68% of their audience).

    The Greens had the highest share of policy-focused content (60%). These posts were strongly youth-oriented (77%), and covered climate change (27%), taxes (27%), and education (23%). Their posts were the most informal, with Greens leaders often using the platform to speak directly to TikTok users in a “selfie” style.

    Follow the money

    A closer look at the policy messaging on TikTok reveals a strong focus on the economy and health. These are two of the most decisive issues for voters across generations, according to the Australian Election Study.

    Given the rising cost of living, it’s no surprise this election played out around hip-pocket concerns. Yet, it’s notable that Labor didn’t lean heavily into economic messaging on TikTok, despite cost of living being the top concern for young people.

    The Liberals, by contrast, stuck to their traditional strength, making the economy a central theme of their content.

    Did it translate to electoral victory?

    Our analysis reveals a highly coordinated Labor campaign on TikTok, backed by serious resourcing and a keen understanding of platform dynamics. From short-form videos to youth-oriented podcasts and influencer briefings, Labor went all-in.

    While it’s hard to draw a straight line from TikTok posts to ballots cast, their dominant presence online mirrored their dominant result at the polls.

    The Greens, however, present a puzzle. They’ve traditionally performed well with young voters and achieved enviable engagement rates on TikTok: about 14% during the campaign, the kind most influencers dream of.

    Their content resonated, especially when it featured positive messaging or direct, informal engagement from party leaders. They didn’t rely on minimising political issues with memes and trends.

    But they posted far less than Labor and didn’t invest as heavily in trend-based posting. That likely reflects a smaller budget rather than a flawed strategy, but the result was fewer overall views and reach.



    Read more:
    Greens’ election hubris – how the minor party lost its way and now its leader

    Ultimately, this isn’t a story about young voters being swayed by viral videos. They’re politically engaged, issue-aware, and looking for credibility.

    Labor’s full-spectrum campaign was slick, and while they also backed that style with substance, they relied heavily on trends and mass-posting, prioritising quantity over quality.

    The Greens’ more quality-focused approach connected with their audience, but led to them being out-performed and far less visible.

    Hannah Oates receives funding from the Australian Government in the form of a PhD stipend.

    Intifar Chowdhury does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

    – ref. What did the parties say on TikTok in the election, and how? Here’s the campaign broken down in 5 charts – https://theconversation.com/what-did-the-parties-say-on-tiktok-in-the-election-and-how-heres-the-campaign-broken-down-in-5-charts-254793

    MIL OSI Analysis – EveningReport.nz –

  • MIL-Evening Report: Trump heads to the Gulf aiming to bolster trade ties – but side talks on Tehran, Gaza could drive a wedge between US and Israel

    Source: The Conversation (Au and NZ) – By Asher Kaufman, Professor of History and Peace Studies, University of Notre Dame

    President Donald Trump and Saudi Arabia’s Crown Prince Mohammed Bin Salman attend the G20 Summit in Japan in 2019. Eliot Blondet/AFP via Getty Images

    President Donald Trump will sit down with the Saudi crown prince and Emirati and Qatari leaders on May 14, 2025, in what is being heavily touted as a high-stakes summit. Not invited, and watching warily, will be Israeli Prime Minister Benjamin Netanyahu.

    Like many other members of his right-wing coalition, Netanyahu appeared delighted at the election of Trump as U.S. president in November, believing that the Republican’s Middle East policies would undoubtedly favor Israeli interests and be coordinated closely with Netanyahu himself.

    But it hasn’t quite played out that way. Of course, Washington remains – certainly in official communications – Israel’s strongest global ally and chief supplier of arms. But Trump is promoting a Middle East policy that is, at times, distinctly at odds with the interests of Netanyahu and his government.

    In fact, in pushing for an Iran nuclear deal – a surprise reversal from Trump’s first administration – Trump is undermining long-held Netanyahu positions. Such is the level of alarm in Israeli right-wing circles that rumors have been circulating of Trump announcing unilateral U.S. support for a Palestinian state ahead of the Riyadh visit – something that would represent a clear departure for Washington.

    As a historian of Israel and the broader Middle East, I recognize that in key ways Trump’s agenda in Riyadh represents a continuation of the U.S. policies, notably in pursuing security relationships with Arab Gulf monarchies – something Israel has long accepted if not openly supported. But in the process, the trip could also put significant daylight between Trump and Netanyahu.

    Trump’s official agenda

    The four-day trip to the Gulf, Trump’s first policy-driven foreign visit since being elected president, is on the surface more about developing economic and security ties between the U.S. and traditional allies in the Persian Gulf.

    Trump is expected to cement trade deals worth tens of billions of dollars between the U.S. and Arab Gulf States, including unprecedented arms purchases, Gulf investments in the U.S. and even the floated Qatari gift of a palatial 747 intended for use as Air Force One.

    There is also the possibility of a security alliance between the U.S. and Saudi Arabia.

    So far, so good for Israel’s government. Prior to the Oct. 7 attacks, Israel was already in the process of forging closer ties to the Gulf states, with deals and diplomatic relations established with the United Arab Emirates and Bahrain through the Abraham Accords that the Trump administration itself facilitated in September 2020. A potential normalization of ties with Saudi Arabia was also in the offing.

    Dealing with Tehran

    But central to the agenda this week in Riyadh will be issues where Trump and Netanyahu are increasingly not on the same page. And that starts with Iran.

    While the country won’t be represented, Iran will feature heavily at Trump’s summit, as it coincides with the U.S. administration’s ongoing diplomatic talks with Tehran over its nuclear program. Those negotiations have now concluded four rounds. And despite clear challenges, American and Iranian delegations continue to project optimism about the possibility of reaching a deal.

    The approach marks a change of course for Trump, who in 2018 abandoned a similar deal to the one he is now largely looking to forge. It also suggests the U.S. is currently opposed to the idea of direct armed confrontation with Iran, against Netanayhu’s clear preference.

    Diplomacy with Tehran is also favored by Gulf states as a way of containing Iran’s nuclear ambitions. Even Saudi Arabia – Tehran’s long-term regional rival that, like Israel, opposed the Obama-era Iran nuclear diplomacy – is increasingly looking for a more cautious engagement with Iran. In April, the Saudi defense minister visited Tehran ahead of the recent U.S.-Iranian negotiations.

    Netanyahu has built his political career on the looming threat from a nuclearized Iran and the necessity to nip this threat in the bud. He unsuccessfully tried to undermine President Barack Obama’s initial efforts to reach an agreement with Iran – resulting in 2015’s Iran nuclear deal. But Netanyahu had more luck with Obama’s successor, helping convince Trump to withdraw from the agreement in 2018.

    So Trump’s about-turn on Iran talks has irked Netanyahu – not only because it happened, but because it happened so publicly. In April, the U.S. president called Netanyahu to the White House and openly embarrassed him by stating that Washington is pursuing diplomatic negotiations with Tehran.

    Split over Yemen

    A clear indication of the potential tension between the Trump administration and the Israeli government can be seen in the ongoing skirmishes involving the U.S., Israel and the Houthis in Yemen.

    After the Houthis fired a missile at the Tel Aviv airport on May 4 – leading to its closure and the cancellation of multiple international flights – Israel struck back, devastating an airport and other facilities in Yemen’s capital.

    But just a few hours after the Israeli attack, Trump announced that the U.S. would not strike the Houthis anymore, as they had “surrendered” to his demands and agreed not to block passage of U.S. ships in the Red Sea.

    It became clear that Israel was not involved in this new understanding between the U.S. and the Houthis. Trump’s statement was also notable in its timing, and could be taken as an effort to calm the region in preparation of his trip to Saudi Arabia. The fact that it might help smooth talks with Iran too – Tehran being the Houthis’ main sponsor – was likely a factor as well.

    Timing is also relevant in Israel’s latest attack on Yemeni ports. They took place on May 11 – the eve of Trump setting off for his visit to Saudi Arabia. In so doing, Netanyahu may be sending a signal not only to the Houthis but also to the U.S. and Iran. Continuing to attack the Houthis might make nuclear talks more difficult.

    Bibi’s political survival-first approach

    Critical observers of Netanyahu have long argued that he prioritizes continued war in Gaza over regional calm for the sake of holding together his far-right coalition, members of which desire full control of the Gaza Strip and de-facto annexation of the West Bank.

    Israel’s Prime Minister Benjamin Netanyahu warns of the Iran nuclear threat at the United Nations in 2012.
    Mario Tama/Getty Images

    This, many political commentators have argued, is the main reason why Netanyahu backed off from the last stage of the ceasefire agreement with Hamas in March – something which would have required the withdrawal of the Israeli army from the Gaza Strip.

    Since the collapse of the ceasefire, Israel’s army has mobilized in preparation for a renewed Gaza assault, scheduled to start after the end of Trump’s trip to the Gulf.

    With members of the Netanayhu government openly supporting the permanent occupation of the strip and declaring that bringing back the remaining Israeli hostages is no longer a top priority, it seems clear to me that deescalation is not on Netanyahu’s agenda.

    Trump himself has noted recently both the alarming state of the hostages and the grave humanitarian crisis in Gaza. Now, in addition to the release of Israeli-American hostage Edan Alexander, the U.S. is also engaged in negotiations with Hamas over ceasefire and aid – ignoring Netanyahu in the process.

    The bottom dollar

    Current U.S. policy in the region may all be serving a greater aim for Trump: to secure billions of dollars of Gulf money for the American economy and, some have said, himself. But to achieve that requires a stable Middle East, and continued war in Gaza and Iran inching closer to nuclear capabilities might disrupt that goal.

    Of course, a diplomatic agreement over Tehran’s nuclear plans is still some way off. And Trump’s foreign policy is notably prone to abrupt turns. But whether guided by a dealmaker’s instincts to pursue trade and economic deals with wealthy Gulf states, or by a genuine – and related – desire to stabilize the region, his administration is increasingly pursuing policies that go against the interests of the current Israeli government.

    Asher Kaufman does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

    – ref. Trump heads to the Gulf aiming to bolster trade ties – but side talks on Tehran, Gaza could drive a wedge between US and Israel – https://theconversation.com/trump-heads-to-the-gulf-aiming-to-bolster-trade-ties-but-side-talks-on-tehran-gaza-could-drive-a-wedge-between-us-and-israel-256371

    MIL OSI Analysis – EveningReport.nz –

  • MIL-Evening Report: From Zoo Quest to Ocean: The evolution of David Attenborough’s voice for the planet

    Source: The Conversation (Au and NZ) – By Neil J. Gostling, Associate Professor in Evolution and Palaeobiology, University of Southampton

    Over the course of seven decades, Sir David Attenborough’s documentaries have reshaped how we see the natural world, shifting from colonial-era collecting trips to urgent calls for environmental action.

    His storytelling has inspired generations, but has only recently begun to confront the scale of the ecological crisis. To understand how far nature broadcasting has come, it helps to return to where it started.

    When Attenborough’s broadcasting career began in the 1950s, Austrian filmmakers Hans and Lotte Hass were already pushing the boundaries of what was possible by taking cameras below the sea and touring the world aboard their schooner, the Xafira.

    In one of their 1953 Galapagos films, a crewman handled a sealion pup, having crawled across the volcanic rock of Fernandina honking at sealions to attract them. A penguin and giant tortoise were brought on board Xafira. And as Lotte Hass took photographs, she’d beseech some poor creature to “not be frightened” and “look pleasant”.

    This is a world away from today’s expectations, where both research scientists and amateur naturalists are taught to observe without touching or disturbing wildlife. When the Hasses visited the Galápagos, it was still five years before the creation of the national park and the founding of the island’s conservation organisation Charles Darwin Foundation. Now, visitors must stay at least two metres from all animals – and never approach them.

    Get your news from actual experts, straight to your inbox. Sign up to our daily newsletter to receive all The Conversation UK’s latest coverage of news and research, from politics and business to the arts and sciences. Join The Conversation for free today.

    At the same time, television was beginning to shape public perceptions of the natural world. In 1954, Attenborough was working as a young producer on Zoo Quest. By chance, he became its presenter when zoologist Jack Lester became ill.

    The programme followed zoologists collecting animals from around the world for London Zoo. Zoo Quest was filmed in exotic locations around the world and then in the studio where the animals found on the expedition were shown “up close”.

    Attenborough has since acknowledged that Zoo Quest reflected attitudes that would not be acceptable today. The series showed animals being captured from the wild and transported to London Zoo – practices which mirrored extractive, colonial-era approaches to science.

    David Attenborough’s Zoo Quest for a Dragon aired in 1956.

    Yet, Zoo Quest was also groundbreaking. The series brought viewers face-to-face with animals they might never have seen before and pioneered a visual style that made natural history television both entertaining and educational. It helped establish Attenborough’s reputation as a compelling communicator and laid the foundations for a new genre of science broadcasting – one that has evolved, like its presenter, over time.

    After a decade in production, Attenborough returned to presenting with Life on Earth (1979), a landmark series that traced the evolution of life from single-celled organisms to birds and apes. Drawing on his long-standing interest in fossils, the series combined zoology, palaeobiology and natural history to create an ambitious new template for science broadcasting.

    Life on Earth helped cement Attenborough’s reputation as a trusted communicator and became the foundation of the BBC’s “blue-chip” natural history format – big-budget, internationally produced films that put high-quality cinematic wildlife footage at the forefront of the story. The series did not simply document the natural world. It reframed it, using presenter-led storytelling and global spectacle to shape how audiences understood evolutionary processes.

    For much of his career, Attenborough has been celebrated for showcasing the beauty of the natural world. Yet, he has also faced criticism for sidestepping the environmental crises threatening it. Commentators such as the environmental journalist George Monbiot argued that his earlier documentaries, while visually stunning, often avoided addressing the human role in climate change, presenting nature as untouched and avoiding difficult truths about ecological decline.

    Building on the legacy of Life on Earth, Attenborough’s later series began to respond to these critiques. Blue Planet (2001) expanded the scope of nature storytelling, revealing the mysteries of the ocean’s most remote and uncharted ecosystems. Its 2017 sequel, Blue Planet II, introduced a more urgent tone, highlighting the scale of plastic pollution and the need for marine conservation.

    Although Blue Planet II significantly increased viewers’ environmental knowledge, it did not lead to measurable changes in plastic consumption behaviour – a reminder that awareness alone does not guarantee action. The subsequent Wild Isles (2023) continued the shift towards conservation messaging. While the main series aired in five parts, a sixth episode – Saving Our Wild Isles – was released separately and drew controversy amid claims the BBC had sidelined it for being too political. In reality, the episode delivered a clear call to action.

    Attenborough’s latest film, Ocean, continues in this more urgent register, pairing breathtaking imagery with an unflinching assessment of ocean health. After decades of gentle narration, he now speaks with sharpened clarity about the scale of the crisis and the need to act.

    A voice for action

    In recent years, Attenborough has taken on a new role – not just as a broadcaster, but as a powerful voice in environmental diplomacy. He has addressed world leaders at major summits such as the UN climate conference Cop24 and the World Economic Forum, calling for urgent action on climate change. He was also appointed ambassador for the UK government’s review on the economics of biodiversity.

    On the subject of environmemtal diplomacy, Monbiot recently wrote: “A few years ago, I was sharply critical of Sir David for downplaying the environmental crisis on his TV programmes. Most people would have reacted badly but remarkably, at 92, he took this and similar critiques on board and radically changed his approach.”

    Attenborough not only speaks. He listens. This is part of his charm and popularity. He is learning and evolving as much as his audience.

    What makes Attenborough stand out is the way he speaks. While official climate treaties often rely on technical or legal language, he communicates in emotional, accessible terms – speaking plainly about responsibility, urgency and the moral imperative to protect life on Earth. His calm authority and familiar voice make complex issues easier to grasp and harder to dismiss.

    Frequently named Britain’s most trusted public figure, Attenborough has become something of an unofficial diplomat for the planet – apolitical, measured, and often seen as a voice of reason amid populist noise. Despite his criticisms, Attenborough’s documentaries walk a careful line between fragility and resilience, using emotionally ambivalent imagery to prompt reflection. He shares his wonder with the natural world and brings people along with him

    Ocean shows our blue planet in more spectacular fashion than Lotte and Hans Hass could ever have imagined. But it is also Attenborough’s most direct reckoning with environmental collapse. With clarity and urgency, it confronts the damage wrought by industrial trawling and habitat destruction.

    After 70 years of gently guiding viewers through the natural world, Attenborough’s voice has sharpened. If he once opened our eyes to nature’s wonders, he now challenges us not to look away. As he puts it: “If we save the sea, we save our world. After a lifetime filming our planet, I’m sure that nothing is more important.”

    Don’t have time to read about climate change as much as you’d like?

    Get a weekly roundup in your inbox instead. Every Wednesday, The Conversation’s environment editor writes Imagine, a short email that goes a little deeper into just one climate issue. Join the 45,000+ readers who’ve subscribed so far.

    The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.

    – ref. From Zoo Quest to Ocean: The evolution of David Attenborough’s voice for the planet – https://theconversation.com/from-zoo-quest-to-ocean-the-evolution-of-david-attenboroughs-voice-for-the-planet-251727

    MIL OSI Analysis – EveningReport.nz –

  • MIL-Evening Report: A looming workforce crisis in NZ tourism and hospitality threatens industry growth plans

    Source: The Conversation (Au and NZ) – By Anthony Brien, Associate Professor, Department of Global Value Chains and Trade, Lincoln University, New Zealand

    Getty Images

    Last week’s big tourism conference in Rotorua saw plenty of optimism about the industry’s potential, but also warnings that airline capacity is hampering post-COVID growth.

    The focus on bringing more foreign tourists to New Zealand is understandable, given the sector accounts for 7.5% of GDP and is our second highest export earner. But there is deeper problem, too. We already struggle to serve current visitor numbers – how will we handle more?

    International tourism injected NZ$16.9 billion into the economy in the year to March 2024. Total tourism expenditure (domestic and international) hit a record $44.4 billion, up nearly 15% from the previous year.

    The government has responded with a $13.5 million global marketing boost, and business leaders are celebrating. The big question is whether we will have the workforce to match the ambition.

    Because right now, the pipeline of skilled, engaged people willing to work, grow and lead in tourism and hospitality isn’t flowing.

    Without an industry-led, well-funded campaign to rebuild the perception of tourism and hospitality as credible, rewarding and sustainable career options, New Zealand has a crisis in the making.

    Who wants to work in tourism and hospo?

    Fewer New Zealanders are choosing tourism and hospitality as a career. With the number of locals studying tourism and hospitality collapsing, both sectors are increasingly dependent on foreign workers.

    Tourism education numbers for the past decade show:

    • 1,355 equivalent full-time students were enrolled in tourism-related courses in 2024, down from 3,750 in 2015 – a 63% drop

    • enrolments in bachelor’s degrees in tourism management fell from 45 in 2015 to 25 in 2024 – a 44% drop

    • postgraduate enrolments in tourism management are down 75%, with only 20 in 2024.

    The figures for hospitality education paint an even grimmer picture:

    • enrolments in hospitality courses fell from from 915 in 2015 to just 250 in 2024 – a 73% drop

    • cookery course enrolments fell from 4,125 to 1,140 – a 72% drop

    • food and beverage service training fell from 1,445 in 2015 to just 340 in 2024 – a 76% drop

    • hospitality management degree enrolments fell from 380 in 2015 to 210 in 2024 – a 45% drop.

    These figures do not include actual workplace training, but they still illustrate a clear trend.

    The looming workforce shortage

    Minister of Tourism and Hospitality Louise Upston recently said, “We need to grow tourism businesses. We need to grow the value from the tourism visitors we have.” She’s right. But without a viable workforce, none of this is possible.

    As to why more New Zealanders aren’t keen to work in the sector, Upston said, “I just don’t think the sector’s promoted it well enough.” This is despite many years of industry exhortations to “grow the domestic workforce”, “attract more young people” and “build career pathways”.

    COVID-19 certainly hurt the industry’s image as a place to work. But the challenges around neglected workforce development, career promotion and long-term planning predate the pandemic.

    Other industries and professions – including construction, agriculture and accounting – have invested heavily in scholarships, internships, mentoring and reputation building. Tourism and hospitality haven’t matched this and now risk losing young people to global demand.

    If the pattern continues, there will be a national shortage of qualified staff and competent managers, and greater reliance on short-term and migrant labour. That leads in turn to overworked staff, poorer service, and businesses forced to reduce hours or close altogether.

    Investment in the future

    In the 1970s and 80s, New Zealand had to import tourism and hospitality talent to grow the industries. Without real change, those days may return.

    Apart from what is offered by two major hotel chains, few formal internships exist. Such programmes are not simply part-time jobs, they’re investments in future talent, involving professional guidance and meaningful experience. They take effort, but they work.

    Meanwhile, degree-level programmes are already being dropped. If lower-level course enrolments continue to fall, these programmes may close too. The burden then falls on businesses to train and educate staff. But those same businesses say they can’t find enough staff today.

    This is more than a workforce problem, it’s a national economic risk. Spending millions on attracting visitors only to deliver a substandard experience is not a good use of taxpayer money.

    Without people, there is no hospitality. Without hospitality, there is no tourism. And without a sustainable tourism industry, New Zealand’s economy will suffer.

    Anthony Brien is a member of Tourism Industry Aotearoa.

    – ref. A looming workforce crisis in NZ tourism and hospitality threatens industry growth plans – https://theconversation.com/a-looming-workforce-crisis-in-nz-tourism-and-hospitality-threatens-industry-growth-plans-256212

    MIL OSI Analysis – EveningReport.nz –

  • MIL-OSI USA: Huizenga, McCaul Introduce Legislation to Modernize Missile Technology Export Controls

    Source: United States House of Representatives – Congressman Bill Huizenga (MI-02)

    Today, Congressman Bill Huizenga (R-MI) and House Foreign Affairs Committee Chairman Emeritus Michael McCaul (R-TX) announced the introduction of H.R. 3068, the Missile Technology Control Revision Act. H.R 3068 modernizes missile technology export controls by removing unnecessary regulatory barriers. This will bolster U.S. national security while ensuring our allies are equipped to address shared security threats in a timely manner.

    “The threats our nation faces have evolved over time; therefore, our approach to keeping America safe must evolve as well,” said Congressman Bill Huizenga. “We cannot allow bureaucratic red tape to hinder our national security. By modernizing the Missile Technology Control Regime to meet the security challenges of today, we can strengthen our defense capabilities and increase our cooperation with our allies, especially Australia and the United Kingdom. The Missile Technology Control Revision Act can act as a force multiplier that allows the United States and our closest allies to address the security challenges we face today and in the future.”

    “The Chinese Communist Party is working at lightning speed to advance its military apparatus — and it does not play fair,” said Chairman Emeritus Michael McCaul. “The MTCR Act empowers the United States and its allies to meet that generational challenge head-on by removing burdensome red tape that slows down the transfer of critical military technologies. I urge my colleagues to support this important bill that will strengthen crucial partnerships like the AUKUS defense pact and deter the CCP’s malign activity in the Indo-Pacific and beyond.”

    Background

    The Missile Technology Control Regime (MTCR) was signed in 1987 and is a non-binding political arrangement designed to curtail exports and proliferation of ballistic missiles and WMD delivery vehicles. It is comprised of 35 nations, including Russia. Unfortunately, the MTCR has no independent means to verify whether states adhere to its guidelines or a mechanism to penalize member states if they violate them.

    Specifically, H.R. 3068 removes section 38(j), the statutory requirement of the Missile Technology Control Regime (MTCR), from the Arms Export Control Act of 1976, thus allowing for expedited defense trade with countries the President determines to be eligible for a defense trade exemption. Additionally, this bill includes a statement of policy that the US shall no longer apply a “presumption of denial” for MTCR items to NATO, major non-NATO allies, and Five Eyes members. H.R. 3068 reflects the current security realities around the globe.

    While never its intended purpose, the MTCR has hindered the United States’ ability to transfer technologies like ballistic missiles, space launch vehicles, UAV systems, cruise missiles, and other dual-use missile-related components to our closest allies. This ultimately hampers cooperation and collaboration on advanced technologies with ally nations through partnerships like NATO, Five Eyes, and AUKUS. Given the evolving threat landscape, the guidelines of the MTCR fail to provide flexibilities needed to enhance current and future collaboration opportunities.

    H.R. 3068 is supported by the Aerospace Industries Association, which represents hundreds of American aerospace and defense companies.

    MIL OSI USA News –

  • MIL-OSI USA: Congresswoman Norma Torres Condemns and Demands Investigation into ICE’s Attack on Members of Congress

    Source: United States House of Representatives – Congresswoman Norma Torres (35th District of California)

    May 12, 2025

    Washington, D.C. — Congresswoman Norma Torres (D-CA) is calling for an immediate and full investigation into the actions of U.S. Immigration and Customs Enforcement (ICE) agents, who recently engaged in a violent and unconscionable attack on members of Congress while they were conducting oversight over the executive branch at the ICE Detention Center in Newark, New Jersey.

    “This is an attack on our democracy and an abuse of power that cannot and will not be tolerated. Being an appropriator doesn’t mean giving President Donald Trump a blank check; it means fulfilling the constitutional duty of overseeing how ICE is using the allocated funds and ensuring proper accountability,” said Congresswoman Torres. “We demand an immediate investigation into who gave the orders to target sitting members of Congress. These actions go beyond the realm of acceptable conduct — they are a direct attack on the fundamental rights of elected officials to do their jobs without fear of retaliation or violence.”

    The incident, which involved ICE agents targeting and accosting Reps. Rob Menendez, Bonnie Watson Coleman, and LaMonica McIver during a routine oversight visit, marks a dangerous escalation of tactics used by this administration. Members of Congress have a constitutional responsibility to oversee and challenge the actions of agencies like ICE — not to be subjected to threats, intimidation, or violence while carrying out those duties.

    “The level of aggression shown by these agents is a disgrace,” Torres continued. “This is not about enforcing laws — it is about sending a message of intimidation to anyone who dares challenge this administration. It is clear that this attack was orchestrated at the highest levels, and those responsible must be held accountable. The leadership of DHS and ICE must not only rectify the situation but also explain who within the agency issued the orders to use such heavy-handed tactics against sitting members of Congress. This is not just a matter of individual misconduct; this is a pattern of behavior that has been fostered at the very top — and it must end now.”

    ###

    MIL OSI USA News –

  • MIL-OSI USA: Padilla, Merkley, Schakowsky Introduce Bicameral Bill to Strengthen Nursing Staff Standards, Improve Patient Care

    US Senate News:

    Source: United States Senator Alex Padilla (D-Calif.)

    Padilla, Merkley, Schakowsky Introduce Bicameral Bill to Strengthen Nursing Staff Standards, Improve Patient Care

    WASHINGTON, D.C. — Today, on International Nurses Day, U.S. Senators Alex Padilla (D-Calif.) and Jeff Merkley (D-Ore.) introduced the Nurse Staffing Standards for Hospital Patient Safety and Quality Care Act to improve hospital patient care and nurse retention by setting mandatory minimum registered nurse-to-patient staffing ratios. Representative Jan Schakowsky (D-Ill.-09) is leading companion legislation in the House of Representatives.

    There are no federal mandates regulating the number of patients a registered nurse (RN) can care for at one time in U.S. hospitals. As a result, RNs are consistently required to care for more patients than is safe, negatively impacting patient outcomes. Studies show that when RNs are forced to care for too many patients at one time, patients are at higher risk of preventable medical errors, avoidable complications, falls and injuries, pressure sores, increased length of hospital stay, higher numbers of hospital readmissions, and death. For each additional surgical patient in a registered nurse’s workload above the baseline nurse-to-patient ratio of 1:4, the likelihood of patient death within 30 days increases by seven percent.

    California is currently the only state with an enforceable nurse-to-patient safe staffing law, which the California Nurses Association successfully pushed to pass in 1999. The law has significantly expanded nurse staffing at California’s acute-care hospitals and saved thousands of lives since it was fully implemented in 2004. For instance, a widely cited 2010 University of Pennsylvania study showed that if New Jersey and Pennsylvania matched California’s 1:5 RN-to-patient ratio, their surgical units would have 14 percent fewer deaths and 11 percent fewer deaths, respectively.

    “Every patient deserves access to quality care, but the registered nursing staffing crisis across the country is putting patients at risk and leading to preventable health complications, especially in communities of color,” said Senator Padilla. “The numbers are clear: California’s mandatory minimum nurse-to-patient ratio is saving lives. Extending safe staffing at hospitals across the country is long overdue and is essential to retaining our nursing workforce and improving health outcomes.”

    “As the husband of a nurse, I’ve seen how our health care heroes give so much to keep communities in Oregon healthy every day,” said Senator Merkley, Co-Chair of the Senate Nursing Caucus. “As we celebrate National Nurses Week, I am committed to fighting for safe staffing levels for both nurses and patients, to enhance the quality of patient care, reduce medical errors, and increase nurse retention. Nurses make the world so much better, one bedside at a time, and Congress must do all it can to tackle the challenges these life-saving professionals face.”

    “I am proud to reintroduce the Nurse Staffing Standards for Hospital Patient Safety and Quality Care Act with Senators Padilla and Merkley that will establish registered nurse-to-patient ratios in hospitals, provide whistleblower protection for nurses who advocate on behalf of their patients, and invest in training and career development to retain hardworking nurses in the workforce,” said Congresswoman Schakowsky. “For years, I’ve talked to exhausted nurses who have said they go home at night, wondering if they forgot to turn a patient because they were stretched far too thin. Study after study shows that safe nurse-to-patient staffing ratios result in higher quality care for patients, lower health care costs, and a better workplace for nurses. It is past time that we act on the evidence, give nurses the support they deserve, and put patients over profits. Let’s get it done!”

    “Nurses are constantly forced by our employers to care for too many patients than is safe. Yet, during National Nurses Week, those same employers hang banners or give out a free cookie to show their appreciation of us. It’s a slap in the face,” said Nancy Hagans, RN and NNU president. “Our patients deserve high-quality care, and nurses have always stood up to protect our patients. It’s time hospital managers are mandated to staff our units safely for our patients’ sake and to actually give nurses the resources and respect we deserve.”

    “Nurses know from caring for patients at the bedside, that safe nurse-to-patient staffing ratios save lives. CNA fought for and won legislation in California ensuring safe staffing ratios, and unfortunately two decades later, we are still the only state in the country with a law of its kind,” said Sandy Reding, RN and CNA/NNOC President. “Nurses come to California from all over because of our ratios, and we are proud to continue the fight on the national level until every nurse is guaranteed safe staffing ratios, and our patients and our profession are protected.”

    “The understaffing crisis at hospitals and health care facilities puts 60 million older Americans at risk every year,” said Richard Fiesta, Executive Director of the Alliance for Retired Americans. “This legislation will improve patient safety and health outcomes by requiring all healthcare facilities to maintain adequate nurse staffing ratios. Nurses, patients, and family members deserve nothing less.”

    “As some in Congress try to cut healthcare to hand tax breaks to billionaires, others are trying to invest in the safe staffing levels needed for high-quality patient care. All too often, patients face interminable delays, overcrowded waiting rooms, and understaffing that puts them in danger. It does not have to be this way. In many cases, we have enough qualified nurses, but they’ve been driven from the bedside by a healthcare system that puts profits over patients. With this bill, Rep. Schakowsky and Sens. Padilla and Merkley give us a path forward that holds hospitals accountable for staffing levels. These standards will improve outcomes for patients, make healthcare careers more sustainable and, in a medical emergency, reassure families that their local hospital is a safe place to get the care they need,” said Randi Weingarten, President, AFT: Education, Healthcare, Public Services.

    “Hospitals across the U.S. are faced with an intensifying staffing crisis, leaving dedicated nurses with no choice but to turn to jobs with better working conditions, regrettably leaving the patients they love and care for,” said Martha Baker, RN, Chairperson of the Nurse Alliance of SEIU Healthcare. “Congress needs to pass safe staffing ratios to allow all nurses—regardless of where we live or where we work—to provide the high-quality care that our patients need and deserve.

    “One nurse can be responsible for the care of an entire hospital floor — keeping multiple patients alive and on the path to recovery,” said AFSCME President Lee Saunders. “They are truly the front-line heroes of our health care system, but they’re also human. Too often, they’re stretched thin, working exhausting hours that put patient care and their own health at risk. The Nurse Staffing Standards for Hospital Patient Safety and Quality Care Act gives nurses the backup they need to keep themselves and their patients safe and healthy. On behalf of the over 60,000 nurses in our AFSCME family, we thank Senator Padilla and Representative Schakowsky for championing real solutions for care and safety.”

    Studies have also found that registered nurse staffing levels in hospitals that serve communities of color are often lower, exacerbating health care disparities. Setting a single standard of nursing care across hospitals would improve outcomes for patients, including patients of color, through reduced readmission rates, increased satisfaction, and better obstetrical outcomes.

    Specifically, the Nurse Staffing Standards for Hospital Patient Safety and Quality Care Act would:

    • Require hospitals to annually develop safe staffing plans that meet the bill’s mandated minimum RN staffing ratios and provide for additional staffing based on individual patient care needs;
    • Mandate that hospitals post notices on minimum ratios and maintain records on RN and other staffing;
    • Provide whistleblower protections, including administrative complaint process and cause of action, for nurses who speak out against assignments that are unsafe for the patient or nurse;
    • Authorize the Secretary of the Department of Health and Human Services to enforce the minimum RN staffing ratios through administrative complaints and civil penalties.

    The bill is endorsed by organizations including National Nurses United, California Nurses Association/National Nurses Organizing Committee, Alliance for Retired Americans, American Federation of Teachers (AFT), SEIU Healthcare, and American Federation of State, County and Municipal Employees (AFSCME).

    Senator Padilla has long been a leader in the fight to make health care more equitable and affordable in the United States. Last year, Padilla, Senator Mazie Hirono (D-Hawaii), and Senator Cory Booker (D-N.J.) introduced the Health Equity and Accountability Act (HEAA) of 2024 to address health disparities among racial and ethnic minorities as well as women, the LGBTQ+ community, rural populations, and socioeconomically disadvantaged communities across the United States. Additionally, Padilla and Booker introduced the Equal Health Care for All Act, bicameral legislation that would make equal access to medical care a protected civil right to help address the racial inequities and structural failures in America’s health care system. He also recently joined Senator Bernie Sanders (I-Vt.) and over 100 lawmakers in reintroducing the Medicare for All Act, historic legislation that would guarantee health care as a fundamental human right to all people in the United States regardless of income or background.

    A one-pager on the bill is available here.

    Full text of the bill is available here.

    MIL OSI USA News –

  • MIL-OSI: Natural Gas Services Group, Inc. Reports First Quarter 2025 Financial and Operating Results; Increases 2025 Guidance

    Source: GlobeNewswire (MIL-OSI)

    Midland, Texas, May 12, 2025 (GLOBE NEWSWIRE) — Natural Gas Services Group, Inc. (“NGS” or the “Company”) (NYSE:NGS), a leading provider of natural gas compression equipment, technology, and services to the energy industry, today announced financial results for the three months ended March 31, 2025. The Company also raised the high-end of its full-year 2025 Adjusted EBITDA guidance to $79 million, citing continued strength in its business and growing demand across its fleet.

    First Quarter 2025 Highlights

    • Rental revenue of $38.9 million for the first quarter of 2025 representing a 15% year-over-year increase and a 2% sequential increase compared to the period ended December 31, 2024.
    • Net income of $4.9 million or $0.38 per diluted share for the first quarter of 2025 compared to net income of $5.1 million or $0.41 per diluted share for the comparable period; net income up $2.0 million sequentially.
    • Leverage ratio at March 31, 2025, was 2.18x.
    • Adjusted EBITDA of $19.3 million for the first quarter of 2025, representing a 14% year-over-year increase; Adjusted EBITDA up 7% sequentially. See Non-GAAP Financial Measures – Adjusted EBITDA, below.

    Management Commentary and Outlook
    “We are pleased to report another quarter of strong execution and continued momentum across our business,” said Justin Jacobs, Chief Executive Officer. “We are taking market share, expanding our presence in key basins, and investing in our fleet, including the deployment of large-horsepower electric motor units. Our recent credit facility expansion, which also decreased our interest rate and provided more flexible covenants, further improves our ability to take advantage of organic and inorganic growth opportunities.”

    Jacobs continued, “While broader market uncertainty increased in recent weeks—driven primarily by tariff concerns, commodity price volatility, and macroeconomic factors—we are not seeing any meaningful direct impact on our operations. We will continue to monitor indirect effects closely, but we remain confident in our ability to deliver results consistent with our guidance.”

    “We increased our EBITDA outlook to reflect our first quarter outperformance relative to internal expectations and our confidence in the trajectory of the business. We remain excited about our prospects as we look to the remainder of 2025 and into 2026. Our team remains focused on disciplined capital allocation, operational excellence, and long-term value creation for our shareholders.”

    Corporate Guidance — 2025 Outlook

    The Company today provides updates to its previously announced guidance for the 2025 Fiscal Year. Based on a strong start to the year in the first quarter and its confidence for the remainder of the year, the Company today increased the high-end of its adjusted EBITDA guidance to $79 million. The Company now anticipates adjusted EBITDA for the 2025 Fiscal Year to be in the range of $74 – $79 million.

    The Company also reaffirms its outlook for 2025 growth capital expenditures of between $95 – $120 million, which are mostly  comprised of new units (essentially all of which are under contract). Once all these units are deployed, which is expected by early 2026, the Company expects its rented horsepower fleet to increase by approximately 90,000 horsepower, representing an increase of approximately 18% compared to year-end 2024. Customer deployments remain on schedule and the timing of deployments as previously noted is heavily weighted to the second half of 2025 and early 2026. Additionally, the Company anticipates 2025 maintenance expenditures of $10 – $13 million, consistent with its prior guidance and its target return on invested capital of 20% remains unchanged.

    The Company also reiterates the statement from the 2024 year end release that once all the 2025 growth capital expenditures are spent and the units are deployed, its “run rate” Adjusted EBITDA should increase at a rate (when compared to the fourth quarter of 2024) well in excess of (but less than double the rate of) the Company’s anticipated horsepower growth of 18%.

      Outlook
    NEW FY 2025 Adjusted EBITDA $74 million – $79 million
    FY 2025 Growth Capital Expenditures $95 million – $120 million
    FY 2025 Maintenance Capital Expenditures $10 million – $13 million
    Target Return on Invested Capital At least 20%

    Jacobs concluded, “We have multiple pathways to build on our industry-leading growth and drive shareholder value: fleet optimization, asset utilization (both unutilized units and non-cash assets), new rental units (both electric motor and natural gas engine), and accretive mergers and acquisitions. Given our strong balance sheet, low relative leverage, and recent increase in our borrowing capacity, we are well positioned to capitalize on opportunities for significant growth throughout the remainder of 2025.”

    2025 First Quarter Financial Results

    Revenue:  Total revenue for the three months ended March 31, 2025, increased 12% to $41.4 million from $36.9 million for the three months ended March 31, 2024. This increase was primarily due to higher rental revenues for the comparable periods. Rental revenue increased 15% to $38.9 million from $33.7 million in the first quarter of 2024 due to the addition of higher horsepower packages and pricing improvements. As of March 31, 2025, we had 492,679 rented horsepower (1,202 rented units) compared to 444,220 horsepower (1,245 rented units) as of March 31, 2024, reflecting an 11% increase in total utilized horsepower. Sequentially, total revenue increased 2% from $40.7 million primarily related to higher rental revenue for the current period.

    Gross Margins and Adjusted Gross Margins: Total gross margins, including depreciation expense increased to $15.7 million for the three months ended March 31, 2025, compared to $14.2 million for the same period in 2024 and increased on a sequential basis from $14.6 million for the three months ended December 31, 2024. Total adjusted gross margin, exclusive of depreciation expense, increased to $24.3 million for the three months ended March 31, 2025, compared to $21.1 million for the same period in 2024. On a sequential basis, total adjusted gross margin, exclusive of depreciation expense increased by $1.3 million compared to $23.0 million for the period ended December 31, 2024. For a reconciliation of Gross Margin, see Non-GAAP Financial Measures – Adjusted Gross Margin, below.

    Operating Income:  Operating income for the three months ended March 31, 2025, was $9.5 million compared to operating income of $9.3 million for the comparable 2024 period. On a sequential basis, operating income increased $3.5 million compared to $6.0 million for the period ended December 31, 2024.

    Net Income: Net income for the three months ended March 31, 2025, was $4.9 million, or $0.38 per diluted share compared to net income of $5.1 million or $0.41 per diluted share for the comparable 2024 period. On a sequential basis, net income increased $2.0 million when compared to net income of $2.9 million, or $0.23 per diluted share, in the fourth quarter of 2024. The modest year-over-year decline in net income was primarily related to an adjustment to inventory allowance, retirement of rental equipment, a gain on the sale of property and equipment, as well as an increase in depreciation and amortization. The sequential improvement in net income was primarily driven by higher rental revenue and rental gross margin.

    Cash Flows: At March 31, 2025, cash and cash equivalents were approximately $2.1 million, while working capital was $24.7 million. For the three months ended March 31, 2025, cash flows provided by operating activities were $21.3 million, while cash flows used in investing activities was $19.3 million. This compares to cash flows from operating activities of $5.6 million and cash flows used in investing activities of $10.9 million for the comparable three-month period in 2024. Cash flow used in investing activities during the first quarter 2025 included $19.3 million in capital expenditures.

    Adjusted EBITDA: Adjusted EBITDA increased 14% to $19.3 million for the three months ended March 31, 2025, from $16.9 million for the same period in 2024. The increase was primarily attributable to higher rental revenue and rental adjusted gross margin. Sequentially, Adjusted EBITDA increased 7% when compared to $18.0 million for the three months ended December 31, 2024.

    Debt:  Outstanding debt on our revolving credit facility as of March 31, 2025, was $168 million. Our leverage ratio at March 31, 2025, was 2.18x and our fixed charge coverage ratio was 2.98x. The Company is in compliance with all terms, conditions and covenants of the credit agreement.

    Selected data: The tables below show revenue by product line, gross margin and adjusted gross margin for the trailing five quarters.   Adjusted gross margin is the difference between revenue and cost of sales, exclusive of depreciation.

      Revenues
      Three months ended
      March 31, 2024 June 30, 2024 September 30, 2024 December 31, 2024 March 31, 2025
      ($ in 000)   ($ in 000)   ($ in 000)   ($ in 000)   ($ in 000)  
    Rentals $                  33,734   $                  34,926   $                  37,350   $                  38,226   $                  38,910  
    Sales                        2,503                          2,270                          1,843                             997                          1,927  
    Aftermarket services                           670                          1,295                          1,493                          1,435                             546  
    Total $                  36,907   $                  38,491   $                  40,686   $                  40,658   $                  41,383  
      Gross Margin
      Three months ended
      March 31, 2024 June 30, 2024 September 30, 2024 December 31, 2024 March 31, 2025
      ($ in 000)   ($ in 000)   ($ in 000)   ($ in 000)   ($ in 000)  
    Rentals $                  13,761                       13,211                       15,043                       14,865   $                  15,634  
    Sales                           253                             (50)                           (258)                           (531)                           (181)  
    Aftermarket services                           163                             269                             151                             296                             264  
    Total $                  14,177   $                  13,430   $                  14,936   $                  14,630   $                  15,717  
                         
      Adjusted Gross Margin (1)
      Three months ended
      March 31, 2024 June 30, 2024 September 30, 2024 December 31, 2024 March 31, 2025
      ($ in 000)   ($ in 000)   ($ in 000)   ($ in 000)   ($ in 000)  
    Rentals                     20,620                       20,698                       22,908                       23,107                       24,070  
    Sales                           323                               21                           (185)                           (449)                             (89)  
    Aftermarket services                           170                             283                             169                             321                             275  
    Total $                  21,113   $                  21,002   $                  22,892   $                  22,979   $                  24,256  
                         
        Adjusted Gross Margin %
        Three months ended
        March 31, 2024 June 30, 2024 September 30, 2024 December 31, 2024 March 31, 2025
    Rentals   61.1 %   59.3 %   61.3 %   60.4 %   61.9 %
    Sales   12.9 %   0.9 %   (10.0) %   (45.0) %   (4.6) %
    Aftermarket services   25.4 %   21.9 %   11.3  %   22.4 %   50.4 %
    Total   57.2 %   54.6 %   56.3 %   56.5 %   58.6 %
      Compression Units (at end of period):
      Three months ended
      March 31, 2024 June 30, 2024 September 30, 2024 December 31, 2024 March 31, 2025
    Horsepower Utilized 444,220   454,568   475,534   491,756   492,679
    Total Horsepower 542,256   552,599   579,699   598,840   603,391
    Horsepower Utilization 81.9 %   82.3 %   82.0 %   82.1 %   81.7 %
                       
    Units Utilized 1,245   1,242   1,229   1,208   1,202
    Total Units 1,894   1,899   1,909   1,912   1,916
    Unit Utilization 65.7 %   65.4 %   64.4 %   63.2 %   62.7 %

    (1) For a reconciliation of adjusted gross margin to its most directly comparable financial measure calculated and presented in accordance with GAAP, please read “Non-GAAP Financial Measures – Adjusted Gross Margin” below.

    Non-GAAP Financial Measure – Adjusted Gross Margin: “Adjusted Gross Margin” is defined as total revenue less costs of revenues (excluding depreciation and amortization expense). Adjusted Gross Margin is included as a supplemental disclosure because it is a primary measure used by our management as it represents the results of revenue and costs (excluding depreciation and amortization expense), which are key components of our operations. Adjusted Gross Margin differs from gross margin, in that gross margin includes depreciation and amortization expense. We believe Adjusted Gross Margin is important because it focuses on the current operating performance of our operations and excludes the impact of the prior historical costs of the assets acquired or constructed that are utilized in those operations. Depreciation and amortization expense does not accurately reflect the costs required to maintain and replenish the operational usage of our assets and therefore may not portray the costs from current operating activity. Rather, depreciation and amortization expense reflects the systematic allocation of historical property and equipment costs over their estimated useful lives.

    Adjusted Gross Margin has certain material limitations associated with its use as compared to gross margin. These limitations are primarily due to the exclusion of depreciation and amortization expense, which is material to our results of operations. Because we use capital assets, depreciation and amortization expense is a necessary element of our costs and our ability to generate revenue. In order to compensate for these limitations, management uses this non-GAAP measure as a supplemental measure to other GAAP results to provide a more complete understanding of our performance. As an indicator of our operating performance, Adjusted Gross Margin should not be considered an alternative to, or more meaningful than, gross margin as determined in accordance with GAAP. Our Adjusted Gross Margin may not be comparable to a similarly titled measure of another company because other entities may not calculate Adjusted Gross Margin in the same manner.

    The following table shows gross margin, the most directly comparable GAAP financial measure, and reconciles it to Adjusted Gross Margin:

      Three months ended
      March 31, 2024 June 30, 2024 September 30, 2024 December 31, 2024 March 31, 2025
      (in thousands)
    Total revenue $              36,907 $              38,491 $                    40,686 $                 40,658 $              41,383
    Costs of revenue, exclusive of depreciation                (15,794)                (17,489)                     (17,794)                   (17,679)                (17,127)
    Depreciation allocable to costs of revenue                  (6,936)                  (7,572)                       (7,956)                     (8,349)                  (8,539)
    Gross margin                  14,177                  13,430                       14,936                    14,630                  15,717
    Depreciation allocable to costs of revenue                    6,936                    7,572                         7,956                       8,349                    8,539
    Adjusted Gross Margin $              21,113 $              21,002 $                    22,892 $                 22,979 $              24,256

    Non-GAAP Financial Measures – Adjusted EBITDA: “Adjusted EBITDA” is a non-GAAP financial measure that we define as net income (loss) before interest, taxes, depreciation and amortization, as well as an increase in inventory allowance, impairments, retirement of rental equipment, nonrecurring restructuring charges including severance and non-cash equity-classified stock-based compensation expenses. This term, as used and defined by us, may not be comparable to similarly titled measures employed by other companies and is not a measure of performance calculated in accordance with GAAP. Adjusted EBITDA should not be considered in isolation or as a substitute for operating income, net income or loss, cash flows provided by operating, investing and financing activities, or other income or cash flow statement data prepared in accordance with GAAP. However, management believes Adjusted EBITDA is useful to an investor in evaluating our operating performance because: (i) it is widely used by investors in the energy industry to measure a company’s operating performance without regard to items excluded from the calculation of Adjusted EBITDA, which can vary substantially from company to company depending upon accounting methods and book value of assets, capital structure and the method by which assets were acquired, among other factors; (ii) it helps investors to more meaningfully evaluate and compare the results of our operations from period to period by removing the impact of our capital structure and asset base from our operating structure; (iii) it is used by our management for various purposes, including as a measure of operating performance, in presentations to our Board of Directors, and as a basis for strategic planning and forecasting.

    Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are as follows: (i) Adjusted EBITDA does not reflect all our cash expenditures, future requirements for capital expenditures, or contractual commitments; (ii) Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; (iii) Adjusted EBITDA does not reflect the cash requirements necessary to service interest or principal payments on our debt and finance leases; and (iv) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect any capital expenditures for such replacements.

    The following table reconciles our net income, the most directly comparable GAAP financial measure, to Adjusted EBITDA:

      Three months ended
      March 31, 2024   June 30, 2024   September 30, 2024   December 31, 2024   March 31, 2025
      (in thousands)
    Net income $               5,098                4,250   $                     5,014   $                    2,865   $                4,854
    Interest expense                  2,935                2,932                          3,045                         3,015                     3,170
    Income tax expense (benefit)                  1,479                1,294                          1,383                             283                     1,482
    Depreciation and amortization                  7,087                7,705                          8,086                         8,469                     8,636
    Impairments                        —                      —                             136                             705                           —
    Inventory allowance                        —                      —                                —                         1,863                           61
    Retirement of rental equipment                          5                      —                                —                               23                         728
    Severance and restructuring                        —                      33                                —                               —                           —
    Stock-based compensation                      274                    242                             522                             783                         359
    Adjusted EBITDA $             16,878   $         16,456   $                  18,186   $                  18,006   $              19,290

    Conference Call Details: The Company will host a conference call to review its fourth-quarter and year-end financial results on Tuesday, May 13, 2025 at 8:30 a.m. (EST), 7:30 a.m. (CST). To join the conference call, kindly access the Investor Relations section of our website at www.ngsgi.com or dial in at (800) 550-9745 and enter conference ID 167298 at least five minutes prior to the scheduled start time. Please note that using the provided dial-in number is necessary for participation in the Q&A section of the call. A recording of the conference will be made available on our Company’s website following its conclusion. Thank you for your interest in our Company’s updates.

    About Natural Gas Services Group, Inc. (NGS): Natural Gas Services Group is a leading provider of natural gas compression equipment, technology and services to the energy industry. The Company designs, rents, sells and maintains natural gas compressors for oil and natural gas production and plant facilities, primarily using equipment from third-party fabricators and OEM suppliers along with limited in-house assembly. The Company is headquartered in Midland, Texas, with a fabrication facility located in Tulsa, Oklahoma, and service facilities located in major oil and natural gas producing basins in the U.S. Additional information can be found at www.ngsgi.com.

    Forward-Looking Statements

    Certain statements herein (and oral statements made regarding the subjects of this release) constitute “forward-looking statements” within the meaning of the federal securities laws. Words such as “may,” “might,” “should,” “believe,” “expect,” “anticipate,” “estimate,” “continue,” “predict,” “forecast,” “project,” “plan,” “intend” or similar expressions, or statements regarding intent, belief, or current expectations, are forward-looking statements. These forward-looking statements are based upon current estimates and assumptions.

    These forward–looking statements rely on a number of assumptions concerning future events and are subject to a number of uncertainties and factors that could cause actual results to differ materially from such statements, many of which are outside the control of the Company. Forward–looking information includes, but is not limited to statements regarding: guidance or estimates related to EBITDA growth, projected capital expenditures; returns on invested capital, fundamentals of the compression industry and related oil and gas industry, valuations, compressor demand assumptions and overall industry outlook, and the ability of the Company to capitalize on any potential opportunities.
    While the Company believes that the assumptions concerning future events are reasonable, investors are cautioned that there are inherent difficulties in predicting certain important factors that could impact the future performance or results of its business. Some of these factors that could cause results to differ materially from those indicated by such forward-looking statements include, but are not limited to:

    • conditions in the oil and gas industry, including the supply and demand for oil and gas and volatility in the prices of oil and gas;
    • changes in general economic and financial conditions, inflationary pressures, the potential for economic recession in the U.S., tariffs and trade restrictions, including the imposition of new and higher tariffs on imported goods and retaliatory tariffs implemented by other countries on U.S. goods, and the potential effects on our financial condition, results of operations and cash flows;
    • our reliance on major customers;
    • failure of projected organic growth due to adverse changes in the oil and gas industry, including depressed oil and gas prices, oppressive environmental regulations and competition;
    • our inability to achieve increased utilization of assets, including rental fleet utilization and monetizing other non-cash balance sheet assets;
    • failure of our customers to continue to rent equipment after expiration of the primary rental term;
    • our ability to economically develop and deploy new technologies and services, including technology to comply with health and environmental laws and regulations;
    • failure to achieve accretive financial results in connection with any acquisitions we may make;
    • fluctuations in interest rates;
    • changes in regulation or prohibition of new or current well completion techniques;
    • competition among the various providers of compression services and products;
    • changes in safety, health and environmental regulations;
    • changes in economic or political conditions in the markets in which we operate;
    • the inherent risks associated with our operations, such as equipment defects, malfunctions, natural disasters and adverse changes in customer, employee and supplier relationships;
    • our inability to comply with covenants in our debt agreements and the decreased financial flexibility associated with our debt;
    • inability to finance our future capital requirements and availability of financing;
    • capacity availability, costs and performance of our outsourced compressor fabrication providers and overall inflationary pressures;
    • impacts of world events, such as acts of terrorism and significant economic disruptions and adverse consequences resulting from possible long-term effects of potential pandemics and other public health crises; and
    • general economic conditions.

    In addition, these forward-looking statements are subject to other various risks and uncertainties, including without limitation those set forth in the Company’s filings with the Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. Thus, actual results could be materially different. The Company expressly disclaims any obligation to update or alter statements whether as a result of new information, future events or otherwise, except as required by law.

    Company’s Annual Report on Form 10-K for the year ended December 31, 2024. Thus, actual results could be materially different. The Company expressly disclaims any obligation to update or alter statements whether as a result of new information, future events or otherwise, except as required by law.

    For More Information, Contact:
    Anna Delgado, Investor Relations
    (432) 262-2700
    IR@ngsgi.com
    www.ngsgi.com

     NATURAL GAS SERVICES GROUP, INC.
    CONDENSED CONSOLIDATED BALANCE SHEETS
    (in thousands, except par value)
    (unaudited)
           
      March 31,
    2025    		   December 31, 2024
    ASSETS      
    Current Assets:      
    Cash and cash equivalents $                2,147   $                2,142
    Trade accounts receivable, net of provision for credit losses                 15,415                   15,626
    Inventory, net of allowance for obsolescence                 17,343                   18,051
    Federal income tax receivable                 11,263                   11,282
    Prepaid expenses and other                      992                     1,075
    Total current assets                 47,160                   48,176
    Long-term inventory, net of allowance for obsolescence                         —                           —
    Rental equipment, net of accumulated depreciation               424,856                 415,021
    Property and equipment, net of accumulated depreciation                 23,570                   22,989
    Other assets                   6,105                     6,342
    Total assets $           501,691   $           492,528
    LIABILITIES AND STOCKHOLDERS’ EQUITY      
    Current Liabilities:      
    Accounts payable $             14,977   $                9,670
    Accrued liabilities                   7,468                     7,688
    Total current liabilities                 22,445                   17,358
    Long-term debt               168,000                 170,000
    Deferred income taxes                 47,323                   45,873
    Other long-term liabilities                   3,659                     4,240
    Total liabilities               241,427                 237,471
    Commitments and contingencies      
    Stockholders’ Equity:      
    Preferred stock                         —                           —
    Common stock, 30,000 shares authorized, par value $0.01; 13,784 and 13,762 shares issued, respectively                      138                        138
    Additional paid-in capital               118,768                 118,415
    Retained earnings               156,362                 151,508
    Treasury shares, at cost, 1,310 shares for each of the dates presented, respectively               (15,004)                 (15,004)
    Total stockholders’ equity               260,264                 255,057
    Total liabilities and stockholders’ equity $           501,691   $           492,528
    NATURAL GAS SERVICES GROUP, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
    (in thousands, except earnings per share)
    (unaudited)
       
      Three months ended
      March 31,
      2025   2024
    Revenue:      
    Rental $             38,910   $             33,734
    Sales                   1,927                     2,503
    Aftermarket services                      546                        670
    Total revenue                 41,383                   36,907
    Cost of revenue (excluding depreciation and amortization):      
    Rental                 14,840                   13,114
    Sales                   2,016                     2,180
    Aftermarket services                      271                        500
    Total cost of revenues (excluding depreciation and amortization)                 17,127                   15,794
    Selling, general and administrative expense                   5,378                     4,702
    Depreciation and amortization                   8,636                     7,087
    Inventory allowance                         61                           —
    Retirement of rental equipment                      728                             5
    Gain on sale of assets, net                       (54)                           —
    Total operating costs and expenses                 31,876                   27,588
    Operating income                   9,507                     9,319
    Other income (expense):      
    Interest expense                 (3,170)                   (2,935)
    Other income (expense)                         (1)                        193
    Total other income (expense), net                 (3,171)                   (2,742)
    Income before income taxes                   6,336                     6,577
    Provision for income taxes                 (1,482)                   (1,479)
    Net income $                4,854   $                5,098
    Earnings per share:      
    Basic                     0.39                       0.41
    Diluted                     0.38                       0.41
    Weighted average shares outstanding:      
    Basic                 12,462                   12,380
    Diluted                 12,611                   12,465
    NATURAL GAS SERVICES GROUP, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
    (in thousands)
    (unaudited)
      Three months ended
      March 31,
      2025   2024
    CASH FLOWS FROM OPERATING ACTIVITIES:      
    Net income $             4,854   $             5,098
    Adjustments to reconcile net income to net cash provided by operating activities:      
    Depreciation and amortization                 8,636                   7,087
    Inventory allowance                      61                        —
    Retirement of rental equipment                    728                          5
    Gain on sale of assets, net                    (54)                        —
    Amortization of debt issuance costs                    212                      150
    Deferred income taxes                 1,450                   1,456
    Stock-based compensation                    359                      274
    Provision for credit losses                    208                      110
    Loss (gain) on company owned life insurance                      17                    (184)
    Changes in operating assets and liabilities:      
    Trade accounts receivables                        3                 (3,265)
    Inventory                    647                   2,650
    Prepaid expenses and prepaid income taxes                      64                      250
    Accounts payable and accrued liabilities                 4,617                 (8,380)
    Other                  (535)                      358
    NET CASH PROVIDED BY OPERATING ACTIVITIES              21,267                   5,609
    CASH FLOWS FROM INVESTING ACTIVITIES:      
    Purchase of rental equipment, property and other equipment             (19,256)               (10,932)
    Purchase of company owned life insurance                      —                         (9)
    NET CASH USED IN INVESTING ACTIVITIES             (19,256)               (10,941)
    CASH FLOWS FROM FINANCING ACTIVITIES:      
    Proceeds from credit facility borrowings                 6,000                   8,000
    Repayments of credit facility borrowings               (8,000)                        —
    Payments of other long-term liabilities                      —                    (175)
    Taxes paid related to net share settlement of equity awards                       (6)                        —
    NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES               (2,006)                   7,825
    NET CHANGE IN CASH AND CASH EQUIVALENTS                        5                   2,493
    CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                 2,142                   2,746
    CASH AND CASH EQUIVALENTS AT END OF PERIOD $             2,147   $             5,239
    SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:      
    Interest paid $             3,510   $             6,220
    Income taxes paid $                   16   $                   —
    NON-CASH TRANSACTIONS      
    Accrued purchases of property and equipment $                 524   $                   —
    Right of use asset acquired through an finance lease $                   —   $                 532

    The MIL Network –

  • MIL-OSI USA: 5 Tips to Craft a Standout NASA Internship Application

    Source: NASA

    A NASA internship provides a stellar opportunity to launch your future as part of America’s aerospace workforce. NASA interns take on meaningful work and contribute to exciting agency projects with the guidance of a supportive mentor. The internship program regularly ranks as the nation’s most prestigious and competition is steep: in fiscal year 2024, NASA’s Office of STEM Engagement selected nearly 1,800 interns out of 38,000 applicants.
    To give you the best shot at a NASA internship, we’ve compiled a list of tips mentors say can make an application stand out from the crowd. It is NASA’s mentors who create internship project descriptions, review applications, and take the lead in choosing candidates to work on their specific internship projects. Here’s what they had to say:
    1. Your personal statement is your chance to make a lasting impression.
    Mentors pay close attention to personal statements to identify the best candidate for their project and team. A powerful personal statement combines core content, such as personal background and goals, with content tailored to the needs of the project.
    NASA mentors are looking for interns who will enjoy the work and fit in with the team culture. Beyond your academic background, grades, and interests, this is your chance to share your curiosity, enthusiasm, passion, or resilience. Show us who you are and what you can do!
    2. Show off your academic achievements.
    Mentors love to see what academic expertise and hands-on experience you can bring to the internship project. Your resume, transcripts, grade point average, coursework, research, academic projects, awards, and accomplishments are valuable highlights in your application.
    3. Tell us about your extracurriculars, too!
    Who are you outside the classroom?
    Mentors like to see well-rounded candidates whose interests take them beyond their chosen academic and career path. Include any extracurricular activities you participate in, such as a club or team at school or an organization in your community. Whether you’re involved in a local rocketry club, a school athletic team, or a music ensemble, these pursuits may demonstrate academic skills or soft skills such as collaboration. Shared hobbies can also be a great point of personal connection with a future mentor.
    4. Include as many of your skills as possible.
    You have valuable skills you can bring to an internship project! These could be technical skills, such as experience with specific tools or computer programming languages, and non-technical skills, which may include communications skills or leadership experience. Mentors search for skills that meet their project requirements, so the more of your skills you share on your application, the better your chances of matching with the role.
    5. Give yourself a chance.
    Don’t count yourself out before you get started! If you have a passion for spaceflight or aviation, it’s worth applying for a NASA internship – even if you’re not a math, science, engineering, or technology major. That’s because NASA achieves its exploration goals with the support of a nationwide team with a wide variety of skills: communicators, creatives, business specialists, legal experts, and so many more. Take a look at NASA’s internship opportunities and you’ll find projects in many of these fields.
    Yes, competition is fierce. But someone is going to land that internship – and that person could be you.
    Learn More

    Check eligibility requirements, see current deadlines, and launch your internship journey at https://intern.nasa.gov.
    Federal resumes don’t need to be limited to one page. Click here to find NASA resume tips.

    MIL OSI USA News –

  • MIL-OSI USA: HARRISBURG – Shapiro Administration to Launch New Security Feature Allowing SNAP Users to Digitally Lock EBT Cards and Prevent Public Benefits Theft

    Source: US State of Pennsylvania

    May 12, 2025 – Harrisburg, PA

    ADVISORY – HARRISBURG – Shapiro Administration to Launch New Security Feature Allowing SNAP Users to Digitally Lock EBT Cards and Prevent Public Benefits Theft

    The Pennsylvania Department of Human Services (DHS) and Office of State Inspector General (OSIG) will announce the launch of a new electronic benefit transfer (EBT) card security feature to protect Pennsylvanians who receive Supplemental Nutrition Assistance Program (SNAP) and cash benefits from theft. Benefit recipients can now lock their EBT cards when they are not in use to protect their benefits from skimming and theft.

    DHS and OSIG have been aware of recent instances of SNAP theft in Pennsylvania and nationwide, especially in incidents of card skimming, where SNAP benefits are stolen off EBT cards after they are used at a point-of-sale machine with an attached skimming device. The new card lock feature is one-way individuals can protect their EBT cards while they are not in use. Locking an EBT card blocks all purchases, balance inquiries, and transactions to keep benefits secure.

    WHO:
    DHS Secretary Dr. Val Arkoosh
    Inspector General Michelle Henry

    WHEN:
    Tuesday, May 13, 2025, at 2:00 PM

    WHERE:
    Pennsylvania Emergency Management Agency (PEMA)
    Media Room
    1310 Elmerton Ave.
    Harrisburg, PA 17110

    MEDIA RSVP:
    Press interested in attending must RSVP with the name of photographer/reporter to ra-pwdhspressoffice@pa.gov.

    MIL OSI USA News –

  • MIL-OSI USA: Shaheen Holds Roundtable on Dangers of Medicaid Cuts in Nashua, Accepts Energy Champion Award in Manchester

    US Senate News:

    Source: United States Senator for New Hampshire Jeanne Shaheen
    (Nashua, NH) – Today, U.S. Senator Jeanne Shaheen (D-NH) held a roundtable discussion at Greater Nashua Mental Health Center to discuss the disastrous impact that Republican-led cuts to Medicaid would have on New Hampshire. Shaheen convened local substance use disorder recovery organizations and treatment providers to hear how cutting Medicaid would hinder efforts to support Granite Staters struggling with substance use disorders. Photos from today’s events can be found here. 
    “Thousands of Granite Staters who are recovering from substance use disorders are able to get the treatment they need thanks to Medicaid – cutting the funding they count on could have serious consequences,” said Senator Shaheen. “I was grateful to hear from Granite State advocates who are on the frontlines of the fight to combat the substance use disorder crisis about how harmful cuts to Medicaid would be. We’ll keep working to make sure Republicans in Congress know just how many families would be devastated by their proposal.” 
    More than 180,000 people in New Hampshire use Medicaid for their insurance and half of those recipients are children. Under the Republican proposal, they will see significant changes to their coverage and more than 60,000 Granite Starters will be at risk of losing their coverage. This includes thousands of patients that are currently receiving treatment for substance use disorders.    
    The roundtable at Greater Nashua Mental Health Center was the latest stop on Shaheen’s “Medicaid Impact Tour”—a series of discussions across the Granite State to underscore the harm that Republican-led cuts to Medicaid would have on New Hampshire, including by raising the cost of health care and leaving thousands uninsured. The tour included stops in Berlin, Laconia, Claremont and Concord for meetings with health care providers, activists and Medicaid beneficiaries. 
    Later in the day, Shaheen was honored at New Hampshire Energy Week’s Energy Innovation and Champion Award Reception with the Elected Official Energy Champion Award for her decades of energy efficiency leadership.  
    “Throughout my career in public service—from the Governor’s office to the United States Senate—I’ve looked to energy efficiency first,” said Senator Shaheen. “This work is especially important right now as too many families feel squeezed by the high cost of living. Energy efficiency programs are an important and cost-effective way for Granite Staters to save money and have more breathing room in their household budgets.” 
    Earlier this week, Shaheen pushed back on the Trump administration’s plans to scrap the Energy Star Program, which helps Americans save on energy costs.  
    As a lead negotiator of the Bipartisan Infrastructure Law, Shaheen helped secure $3.5 billion in additional funding for the Weatherization Assistance Program, including $18 million for New Hampshire. Shaheen has long-championed the Weatherization Assistance Program to lower energy costs for low-income families in New Hampshire, as well as the State Energy Program, which assists states with the development of energy efficiency renewable projects. In the Fiscal Year 2024 government funding bills, Shaheen helped defend key efficiency programs at the U.S. Department of Energy (DOE) from cuts, including securing $366 million for weatherization efforts and $66 million for the State Energy Program, which work to bring down energy bills for families and communities. 

    MIL OSI USA News –

  • MIL-OSI USA: Grassley, Ernst Expose Biden-Era Bureaucrats Engaged in Potential Criminal Misconduct, Urge Corrective Action

    US Senate News:

    Source: United States Senator for Iowa Chuck Grassley
    WASHINGTON – Senate Judiciary Committee Chairman Chuck Grassley (R-Iowa) and Sen. Joni Ernst (R-Iowa) are demanding the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) take immediate corrective action to hold accountable two senior ATF bureaucrats who cost taxpayers millions by illegally misclassifying administrative positions as “law enforcement.”
    Grassley and Ernst are making public previously unreleased government reports confirming ATF Senior Executive Lisa Boykin and Justice Management Division (JMD) Acting Deputy Director of Human Resources (HR) Ralph Bittelari engaged in gross and substantial waste, fraud and abuse, as well as potentially criminal false certification of government records and whistleblower retaliation.
    Despite the Office of Personnel Management (OPM) and ATF Internal Affairs Division (IAD) confirming Boykin and Bittelari’s potential criminal misconduct, the Biden administration promoted both bureaucrats. According to whistleblower disclosures, Boykin and Bittelari remain employed at the Department of Justice (DOJ).
    “The Biden administration’s ATF illegally lined employees’ pockets with tens-of-millions of taxpayer dollars. These Washington bureaucrats must answer for their misconduct, and if heads don’t roll, nothing will change,” Grassley said. “Without the continued persistence of brave whistleblowers, ATF’s illegal scheme would’ve likely continued. As always, sunshine is the best disinfectant. Attorney General Pam Bondi should take strong action to hold these Biden-era pencil pushers accountable and end the fraudulent waste at ATF.”
    “It is unacceptable that the Biden administration looked the other way while ATF bureaucrats knowingly defrauded taxpayers to pad their salaries,” Ernst said. “These desk jockeys pretending to be law enforcement officers are about to get a crash course in the law. I look forward to Attorney General Pam Bondi sending a clear message that federal employees are not above the law and stealing tax dollars is a crime.”
    Read the senators’ letter to DOJ and ATF HERE.
    Background:
    In February 2020, then-HR Division Chief Bittelari fraudulently certified an administrative ATF position as “law enforcement,” despite warnings from an ATF HR classification expert. The HR expert eventually recused themself from the process and was subsequently threatened with insubordination. Bittelari then approved the fraudulent classification.
    Bittelari, along with then-Deputy Assistant Director Boykin, additionally relocated an ATF law enforcement officer from the Phoenix field office to a misclassified administrative position at ATF headquarters, in defiance of OPM’s directives. After moving forward with the illegal relocation, Bittelari told an ATF staff member “everyone was fully aware of the potential consequences,” and attempted to hide the reassignment by submitting false payroll information.
    OPM’s audit report found that the ATF’s illegal misclassification scheme hampered the agency’s ability to carry out its law enforcement mission by relocating approximately 100 law enforcement officers from the field to administrative positions at ATF headquarters in Washington, D.C., while continuing to pay them enhanced salaries and benefits. Further, many experienced administrative employees were passed over for promotions as ATF assigned unqualified special agents to senior administrative roles.
    OPM estimates the illegal enhancement of ATF bureaucrats’ salaries and benefits cost taxpayers at least $20 million during the five-year period it reviewed. However, whistleblowers allege the scheme has been decades-long and the actual taxpayer cost is in the hundreds of millions of dollars. 
    -30-

    MIL OSI USA News –

  • MIL-OSI Security: Environmental Crimes Bulletin – April 2025

    Source: United States Attorneys General

    View All Environmental Crimes Bulletins

    In This Issue:

    Cases by District/Circuit

    District/Circuit Case Name Conduct/Statute(s)
    District of Alaska United States v. Jason Christenson Tampering with a Monitoring Device/Clean Air Act
    United States v. Matanuska Diesel, LLC, et al. Tampering with a Monitoring Device/ Clean Air Act, Conspiracy
    Western District of Arkansas United States v. Redemption Repairs & Performance Tampering with a Monitoring Device/Clean Air Act
    Southern District of California United States v. Dumitru Cicai Pesticide Smuggling
    United States v. Sarmad Ghaled Dafer, et al. Monkey Smuggling/ Conspiracy
    Southern District of Florida United States v. Royce Gillham Biofuel Credits/Conspiracy, False Claims, Wire Fraud
    Southern District of Georgia United States v. Justin Taylor Tampering with a Monitoring Device/Conspiracy, Tax
    District of Maryland United States v. Idrissa Bagayoko Pesticide Sales/FIFRA, HMTA
    District of Massachusetts United States v. John D. Murphy Dog Fighting/Animal Welfare Act
    Eastern District of Michigan United States v. Tribar Technologies, Inc. Wastewater Discharges/Clean Water Act
    District of Montana United States v. Mold Wranglers, et al. Lead Paint Abatement/False Claims Act/Toxic Substances Control Act, Knowing Endangerment
    United States v. Melanie Ann Carlin Lead Paint Disclosures/Toxic Substances Control Act
    District of New Jersey United States v. Johnnie Lee Nelson, et al. Dog Fighting/Animal Fighting Venture, Conspiracy
    United States v. Antonio Pereira, et al. Scallop Harvesting/ Conspiracy, Obstruction
    Eastern District of New York United States v. Charles Limmer Butterfly Smuggling/ Conspiracy
    United States v. John Waldrop, et al. Bird Mounts/Conspiracy, Endangered Species Act
    Southern District of New York United States v. Jose Correa Asbestos Removal/Clean Air Act
    District of Oregon United States v. Chamness Dirt Works, Inc., et al. Asbestos Removal/Clean Air Act
    United States v. J.H. Baxter & Co., Inc. et al. Hazardous Waste Treatment and Emissions/Clean Air Act, Resource Conservation and Recovery Act, False Statement
    Middle District of Pennsylvania United States v. Ryan Spencer Tampering with a Monitoring Device/Clean Air Act, Conspiracy
    Western District of Pennsylvania United States v. Dale A. Smith Ginseng Sales/ Conspiracy, Lacey Act
    District of Rhode Island United States v. Onill Vasquez Lozada, et al. Cockfighting/Animal Welfare Act
    District of South Carolina United States v. Lauren DeLoach Sperm Whale Teeth and Bones/Lacey Act, Marine Mammal Protection Act
    Northern District of Texas United States v. Dlubak Glass Company Hazardous Waste Storage/False Statement
    Southern District of Texas United States v. Priscilla Sanchez Monkey Smuggling/Lacey Act
    Western District of Texas United States v. Aghorn Operating, Inc., et al. Employee Death/Clean Air Act, False Statement, Safe Drinking Water Act, Worker Safety
    Western District of Virginia United States v. Coby Brummett Ginseng Digging/ Unauthorized Removal Natural Product from Park
    Eastern District of Washington United States v. Pavel Ivanovich Turlak, et al. Tampering with a Monitoring Device/Clean Air Act, Conspiracy, False Claims, Wire Fraud
    Western District of Washington United States v. Joel David Ridley Eagle Killing/Bald and Golden Eagle Protection Act, Firearm
    Northern District of West Virginia United States v. Michael Kandis Reptile Trafficking/Lacey Act

    Recently Charged

    United States v. Ryan Spencer

    • No. 1:25-CR-00100 (Middle District of Pennsylvania)
    • ECS Senior Trial Attorneys RJ Powers and Ron Sarachan
    • AUSA David Williams

    On April 4, 2025, prosecutors filed an information charging Ryan Spencer with conspiring to impede the lawful functions of the Environmental Protection Agency (EPA) and to violate the Clean Air Act (CAA), as well as substantive CAA violations (18 U.S.C. § 371; 42 U.S.C. § 7413(c)(2)(C)).

    Between 2013 and March 2024, Spencer, a Service Manager at Pro Diesel Werks, LLC, along with Pro Diesel Werks owner Roy Ladell Weaver and others, disabled the hardware emissions control systems on the diesel vehicles of Pro Diesel Werks’ customers (a practice referred to as a “delete” or “deleting”), defeating the systems’ ability to reduce pollutant gases and particulate matter emitted into the atmosphere. The information further alleges that Spencer and his co-conspirators also tampered with the emissions diagnostic systems on the vehicles to prevent the diagnostic system software from monitoring the emission control system hardware deletes (a practice referred to as a “tune” or “tuning”).

    On February 19, 2025, a grand jury indicted Weaver and Pro Diesel Werks on similar charges.

    The U.S. Environmental Protection Agency Criminal Investigation Division conducted the investigation.

    Related Press Release: Middle District of Pennsylvania | Dauphin County Man Charged With Violations of Clean Air Act and Conspiring to Defraud the United States and Violate the Clean Air Act | United States Department of Justice

    United States v. Joel David Ridley

    • No. 2:25-mj-00175 (Western District of Washington)
    • AUSA Celia Ann Lee

    On April 7, 2025, a court unsealed a complaint charging Joel David Ridley, a member of the Lummi Nation, with violating the Bald and Golden Eagle Protection Act and for illegally possessing a firearm (16 U.S.C. § 668(a); 18 U.S.C. 922(g)(1)).

    According to the complaint, on February 23, 2025, a witness on the Lummi Reservation heard a gunshot while walking his dog. As he walked home, the witness heard a second shot and saw a person pick up an eagle from the ground. As the witness was on the phone with police, he saw another eagle fall from a tree on his property. The eagle was badly injured. Police captured the surviving eagle and later transported it to the Humane Society.

    Shortly after meeting with the witness, police encountered an SUV in the area that matched the description provided by the reporting party.  A records check revealed the vehicle belonged to Ridley. When police responded to the residence, they observed a dead eagle in the back seat of Ridley’s vehicle.

    Police obtained a search warrant for Ridley’s vehicle and found a dead eagle and a .22 caliber Savage rifle concealed between the rear seats. Ridely is prohibited from possessing firearms due to a prior conviction.

    Both juvenile bald eagles were taken to the Washington State Humane Society and found to have suffered gunshot wounds. The surviving eagle had to be euthanized.

    While the Lummi Tribe is permitted to possess, distribute, and transport bald or golden eagles found dead within Indian Country, the permit does not authorize the taking of eagles by gunshot, poison, or trapping.

    The Lummi Nation Police Department and the Federal Bureau of Investigation conducted the investigation.

    Related Press Release: Western District of Washington | Member of Lummi Nation charged federally with illegal firearms possession and killing protected bald eagles | United States Department of Justice

    United States v. Dumitru Cicai

    • No. 3:25-mj-01628 (Southern District of California)
    • AUSA Emily Allen

    On April 8, 2025, prosecutors filed a complaint charging Dumitru Cicai with smuggling twenty-four one-liter bottles of “Taktic” pesticide into the United States (18 U.S.C. § 545).

    On March 31, 2025, Cicai drove into the United States at the San Ysidro Port of Entry. Cicai told the Customs and Border Patrol (CBP) primary inspection officer that he had nothing to declare. Upon inspecting the vehicle, the primary officer discovered multiple pieces of natural wood branches in the vehicle’s trunk and large bottles concealed in black bags.

    When questioned by the secondary CBP officer, Cicai said he only had wood to declare, nothing else. Upon closer inspection, officers found 24 bottles of pesticide labeled “Taktic.”

    “Taktic” contains the active ingredient amitraz at an emulsifiable concentration of 12.5 percent. Under U.S. Environmental Protection Agency regulations, amitraz in this form is a cancelled and unregistered pesticide in the United States.

    The U.S. Environmental Protection Agency Criminal Investigation Division and Homeland Security Investigations conducted the investigation. 

    United States v. Jason Christenson

    • No. 3:25-CR-00030 (District of Alaska)
    • AUSA Ainsley McNerney
    • RCEC Karla Perrin

    On April 25, 2025, prosecutors filed an information charging Jason Christenson with tampering with a Clean Air Act (CAA) monitoring device and CAA false statements (42 U.S.C. §§ 7413(c)(2)(C), (c)(2)(A)).

    Between October 2019 and March 2024, Christenson tampered with monitoring methods required to be maintained under the CAA by altering the emissions control equipment on approximately 170 diesel trucks. Christenson and his business, Elite Diesel Performance, also modified the onboard diagnostic systems of the vehicles to prevent them from detecting the fact that this equipment had been removed.

    On May 1, 2021, Christenson submitted a response to a Request for Information sent by the Environmental Protection Agency that contained false statements. Specifically, for the question asking whether he or his business had manufactured, sold, or installed any defeat devices, Christenson responded ‘no.’ In truth, he had installed more than 100 defeat devices on diesel trucks between January 2019 and January 2021.

    The U.S. Environmental Protection Agency Criminal Investigation Division conducted the investigation.

    Guilty Pleas

    United States v. Priscilla Sanchez

    • No. 5:25-CR-00254 (Southern District of Texas)
    • AUSA Torie Sailor

    On April 1, 2025, Priscilla Sanchez pleaded guilty to violating the Lacey Act for attempting to import five spider monkeys, a protected species, into the United States from Mexico (16 U.S.C. §§ 3372(a)(2), 3373(d)(1)(A)). Sentencing is scheduled for July 1, 2025.

    On January 13, 2025, Sanchez attempted to enter the U.S. at the Port of Entry, near Laredo, Texas, driving an SUV. Customs and Border Protection officers referred her to secondary screening. Officers discovered a duffle bag with five monkeys wearing diapers concealed inside of it. Authorities confirmed they were spider monkeys, which are protected by the Convention on International Trade in Endangered Species. Sanchez admitted to keeping monkeys at her house and selling them for between $300 and $500 each. She also knew it was illegal to do so.

    The U.S. Fish and Wildlife Service Office of Law Enforcement, Homeland Security Investigations, and Customs and Border Protection conducted the investigation.

    Case photo of monkeys seized by CBP agents.

    United States v. Lauren DeLoach

    • No. 9:25-CR-00164 (District of South Carolina)
    • ECS Senior Trial Attorney Ryan Connors
    • AUSA Winston Holliday
    • AUSA Elle Klein

    On April 10, 2025, Lauren DeLoach pleaded guilty to violating the Marine Mammal Protection Act and Lacey Act trafficking for importing and selling sperm whale teeth and bones (16 U.S.C. §§ 1372(a)(4)(B), 3372(a)(1), 3373(b)(1)(B)).

    DeLoach operated a home decoration store in St. Helena Island, South Carolina. Between September 2021 and September 2024, he imported sperm whale parts to South Carolina, with at least 30 shipments coming from Australia, Latvia, Norway, and Ukraine. DeLoach instructed suppliers to label the items as “plastic” or “resin” so they would not be seized by U.S. Customs authorities. DeLoach acknowledged selling the teeth and bones from July 2022 through September 2024, in violation of the Lacey Act. He sold at least 85 items on eBay worth more than $18,000, and agents seized approximately $20,000 worth of sperm whale parts from DeLoach’s residence while executing a search warrant.

    Laboratory analysis confirmed the teeth and bones belonged to sperm whales, which are a protected species.

    The U.S. Fish and Wildlife Service Office of Law Enforcement and the National Oceanic and Atmospheric Administration conducted the investigation.

    Related Press Release: District of South Carolina | South Carolina Man Pleads Guilty for Illegally Importing and Selling Sperm Whale Teeth and Bones | United States Department of Justice

    United States v. Dale A. Smith

    • No. 1:21-CR-00031 (Western District of Pennsylvania)
    • AUSA Paul Sellers

    On April 21, 2025, Dale A. Smith pleaded guilty to conspiracy and to violating the Lacey Act for illegally purchasing American ginseng (18 U.S.C. § 371; 16 U.S.C. §§ 3372(a)(2)(B), 3373(d)(l)(B)).

    As the owner and operator of Alleghany Mountain Ginseng, Smith possessed licenses to deal wild American ginseng in Pennsylvania and New York. Between September 2018 and January 2020, he purchased wild ginseng in Pennsylvania from buyers who informed him that they harvested it from New York without required certifications. Smith then submitted falsified Ginseng Dealer Quarterly Reports stating he purchased legally harvested ginseng from Pennsylvania, when in fact the ginseng came from New York.

    The United States Fish and Wildlife Service Office of Law Enforcement conducted the investigation.

    United States v. Matanuska Diesel, LLC, et al.

    • No. 3:23-CR-00109 (District of Alaska)
    • AUSA Jennifer Ivers
    • RCEC Karla Perrin

    On April 23, 2025, Brendan Trevors entered into a pretrial diversion agreement, pleading guilty to conspiracy to violate the Clean Air Act (18 U.S.C. § 371). The charge will be dismissed in 18 months if Trevors complies with all the conditions in the agreement. This includes paying a $16,000 fine and restoring his vehicle back to original emission control parameters.

    Between July 2020 and June 2022, Matanuska Diesel, LLC, company owner Mackenzie Spurlock, and former co-owner Trevors, removed air pollution control equipment and tampered with federally mandated monitoring devices on diesel vehicles. The process of removing emissions control systems and reprogramming a vehicle’s onboard diagnostic system is known as “deleting” and “tuning.” These unlawful modifications result in a significant increase in pollutants emitted by the vehicle. The defendants tampered with approximately nine trucks, charging between $1,200 and $5,000 for those services.

    Matanuska and Spurlock are scheduled for trial to begin on October 20, 2025, for conspiring to violate the CAA and multiple substantive CAA violations (18 U.S.C. § 371; 42 U.S.C. § 7413(c)(2)(C)).

    The U.S. Environmental Protection Agency Criminal Investigation Division conducted the investigation.

    United States v. Onill Vasquez Lozada, et al.

    • No. 1:24-CR-00075 (District of Rhode Island)
    • ECS Assistant Chief Stephen DaPonte
    • ECS Senior Trial Attorney Gary Donner
    • AUSA John McAdams

    On April 29, 2025, Onill Vasquez Lozada pleaded guilty to two counts of possessing, sponsoring, and exhibiting birds in an animal fighting venture in violation of the Animal Welfare Act (7 U.S.C. § 2156(a)(1), (b), (d); 18 U.S.C. § 49(a)). Sentencing is scheduled for July 29, 2025.

    Lozada is one of six defendants charged with violating the Animal Welfare Act in connection with a cockfighting operation. According to the indictment, on March 6, 2022, Miguel Delgado hosted a series of individual cockfights, known as “derbies,” at his Providence home. Delgado is also charged with sponsoring and exhibiting roosters in an animal fighting venture on multiple dates, buying and transporting sharp instruments, or “gaffs,” for use in the cockfights, and unlawfully possessing roosters for use in an animal fighting venture.

    Antonio Ledee Rivera and Lozada were charged with unlawfully possessing roosters in April 2021 for use in an animal fighting venture and for sponsoring and exhibiting roosters at a March 2022 derby at Delgado’ s home. Rivera was also charged in connection with an earlier derby at Delgado’ s home.

    Germidez Kingsley Jamie, Jose Rivera, and Luis Castillo are charged with sponsoring and exhibiting roosters at an animal fighting venture at the March 2022 derby. Jamie and Jose Rivera are also charged with one count of buying and transporting gaffs for use in an animal fighting venture.

    The Department of Agriculture Office of Inspector General, the Postal Inspection Service, the Food and Drug Administration Office of Criminal Investigation, and the Rhode Island Society for the Prevention of Cruelty to Animals conducted the investigation. The following agencies also assisted: the U.S. Marshals Service; the U.S. Fish and Wildlife Service Office of Law Enforcement; U.S. Customs and Border Protection; Rhode Island State Police; Massachusetts State Police; Animal Rescue League of Boston’s Law Enforcement Division; and Providence, Woonsocket, and Attleboro, MA, Police Departments.

    United States v. Michael Kandis

    • No. 5:25-CR-00005 (Northern District of West Virginia)
    • ECS Trial Attorney Lauren Steele
    • AUSA Max Nogay

    On April 30, 2025, Michael Kandis pleaded guilty to a Lacey Act Trafficking offense (16 U.S.C. §§ 3372(a)(2)(A), 3373(d)(2)).

    Kandis is a reptile dealer in Wheeling, West Virginia. Indiana Department of Natural Resources (IDNR) conservation officers became acquainted with Kandis through a long-term investigation in which they operated in a covert capacity at various reptile shows throughout the Midwest.

    During their investigation, the IDNR officers conducted several wildlife transactions involving Kandis. In October 2019, Kandis purchased 47 snakes from undercover officers, 25 of which were bullsnakes, for a total price of $1,415. The sale was conducted in Noblesville, Indiana. Bullsnakes are a native species in Indiana, and it is illegal to sell them under Indiana law. Kandis later transported the snakes from Indiana to West Virginia to sell.

    The U.S. Fish and Wildlife Service Office of Law Enforcement and the Indiana Department of Natural Resources conducted the investigation.

    Sentencings

    United States v. Pavel Ivanovich Turlak, et al.

    • No. 2:24-CR-00057 (Eastern District of Washington)
    • AUSA Dan Fruchter
    • AUSA Jacob Brooks
    • RCEC Gwendolyn Brooks

    On April 2, 2025, a court sentenced Pavel Ivanovich Turlak, and his Spokane-based trucking companies: PT Express, LLC; Spokane Truck Service, LLC; and Pauls Trans, LLC. They previously pleaded guilty to conspiring to illegally violate Clean Air Act (CAA) emissions controls and to fraudulently obtaining hundreds of thousands of dollars in COVID-19 relief funding (42 U.S.C. § 7413 (c)(2)(C);18 U.S.C. §§ 371, 1343, 287). All defendants will complete five-year terms of probation, with the companies subject to an environmental compliance plan. All defendants are jointly and severally responsible for $317,389 in restitution to the Small Business Administration.

    Between August 2017 and November 2023, Turlak purchased illegal “delete tune” packages from Ryan Hugh Milliken and his company, Hardaway Solutions, LLC. They designed this software to disable and defeat emissions controls and monitoring systems required under the CAA. Turlak loaded the delete tunes into the trucks used by his own businesses, as well as trucks of co-conspirators who were customers of Spokane Truck Service, LLC. Milliken created and sold custom software delete tunes to Turlak for vehicles based on specifications Turlak outlined. Turlak then charged as much as $3,500 to diesel truck owners to “delete” and “tune” their vehicles by tampering with their pollution monitoring devices.

    In addition to violating the CAA, Turlak fraudulently obtained hundreds of thousands of dollars in COVID-19 relief funding. Between March 2020 and August 2021, Turlak fraudulently applied for and received more than $300,000 in federal funding that was designated to go to eligible small businesses during the pandemic. Turlak and his businesses were not eligible to receive this funding due to their ongoing participation in this criminal conspiracy.

    Milliken and Hardaway Solutions pleaded guilty in November 2024 to conspiracy and to violating the CAA (18 U.S.C. § 371; 42 U.S.C. § 7413(c)(2)(C)). They were sentenced in January 2025 to complete five-year terms of probation, during which the company will be responsible for implementing an environmental compliance plan. Both defendants are jointly and severally responsible for paying a $75,000 fine.

    The U.S. Environmental Protection Agency Criminal Investigation Division conducted the investigation with assistance from the EPA National Enforcement Investigations Center, the Small Business Administration Office of Inspector General, and the Spokane Police Department.

    United States v. Charles Limmer

    • No. 1:23-CR-00405 (Eastern District of New York)
    • AUSA Sean M. Sherman

    On April 3, 2025, a court sentenced Charles Limmer to two years of home detention. Limmer pleaded guilty to conspiracy after prosecutors charged him with Endangered Species Act, Lacey Act, and smuggling violations for trafficking in numerous specimens of butterflies (18 U.S.C. § 371). This protected species is known as “birdwings” due to their exceptional size, angular wings, and birdlike flight. As part of the plea, Limmer forfeited 1,600 specimens.

    Limmer obtained a license in 2016 to import and export wildlife.  After Limmer and his business violated numerous import/export regulations, the Fish and Wildlife Service suspended his license.

    Between October 2022 and September 2023, Limmer and others imported and exported at least 59 illegal shipments containing wildlife, valued at approximately $216,000. They falsely labelled the wildlife as “decorative wall coverings” or “origami paper creations.”

    The U.S. Fish and Wildlife Service Office of Law Enforcement conducted the investigation.

    United States v. Idrissa Bagayoko

    • No. 1:23-CR-00265 (District of Maryland)
    • AUSA Kimberly Phillips
    • RCEC Kertisha Dixon
    • RCEC David Lastra

    On April 3, 2025, a court sentenced Idrissa Bagayoko to time served, followed by one year of supervised release to include three months’ home confinement for transporting and selling unregistered pesticides. Bagayoko also will pay $5,640 in restitution to reimburse the Environmental Protection Agency (EPA) for the cost of destroying unregistered pesticides.

    A jury convicted Bagayoko in November 2024 on two counts for transporting and selling the unregistered pesticide Sniper DDVP. The jury found Bagayoko guilty of violating the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) and the Hazardous Materials Transportation Act (HMTA) (7 U.S.C. §§ 136j(a)(1) (A), 136l(b)(1)(B); 49 U.S.C. § 5124).

    Bagayoko owned and operated Maliba Trading, LLC. According to evidence presented at trial, on September 29, 2021, Bagayoko drove from New York to Maryland and sold two boxes of Sniper DDVP to an individual in Maryland. Police later stopped Bagayoko in Elkton, Maryland, with 18 additional boxes of Sniper DDVP containing a total of 1,728 bottles.

    Samples taken from the bottles revealed the presence of dichlorvos. EPA has classified dichlorvos as a probable human carcinogen. In total, the defendant transported more than 330 pounds of dichlorvos (a reportable quantity) without requisite shipping papers.

    The U.S. Environmental Protection Agency Criminal Investigation Division, the U.S. Department of Transportation Office of Inspector General, and the Elkton Maryland Police Department conducted the investigation.

    Related Press Release: District of Maryland | New York Business Owner Sentenced for Illegally Transporting and Selling Probable Carcinogen | United States Department of Justice

    United States v. Redemption Repairs & Performance

    • No. 4:24-CR-40016 (Western District of Arkansas)
    • AUSA Sydney Stanley

    On April 3, 2025, a court sentenced Redemption Repairs & Performance (RRP) to pay a $50,000 fine and complete a three-year term of probation.

    RRP pleaded guilty to violating the Clean Air Act (CAA) for modifying and deleting the emissions control systems of diesel engines and tampering with and rendering inaccurate the vehicles’ onboard diagnostic (OBD) systems (42 U.S.C § 7413(c)(2)(C)).

    RRP is a truck repair shop specializing in diesel engine repairs and performance located in Texarkana, Arkansas. Between May 2020 and October 2022, the company falsified, tampered with, and rendered inaccurate monitoring devices required to be maintained and followed under the CAA. After removing or altering the emission control equipment on diesel trucks, RRP modified the diesel trucks’ OBD systems to prevent detection of the removal and disabling of the equipment. The company performed this service on approximately 50 vehicles, charging between $2,600-$2,700 per truck.

    The U.S. Environmental Protection Agency Criminal Investigation Division conducted the investigation. 

    United States v. Chamness Dirt Works, Inc., et al.

    • No. 3:24-CR-00430 (District of Oregon)
    • AUSA Bryan Chinwuba
    • RCEC Karla Perrin

    On April 3, 2025, a court sentenced Ryan Richter, Ronald Chamness, Horseshoe Grove, LLC, and Chamness Dirt Works, Inc., for violations of the Clean Air Act (CAA).

    Property management company Horseshoe Grove pleaded guilty to violating the CAA National Emission Standards for Hazardous Air Pollutants (NESHAP) for asbestos work practice standards (42 U.S.C. §§ 7412(h),7413(c)(1)). Horseshoe Grove’s owner and operator Ryan Richter pleaded guilty to a CAA negligent endangerment violation (42 U.S.C. § 7413(c)(4)). Construction and demolition company Chamness Dirt Works pleaded guilty to violating the CAA NESHAP for asbestos, and company owner and president, Ronald Chamness, pleaded guilty to a CAA negligent endangerment violation (42 U.S.C. § 7413(c)(4)).

    Horseshoe Grove and Chamness Dirt Works were sentenced to complete three-year terms of probation. Richter and Ronald Chamness were each sentenced to five-year terms of probation and ordered to remediate the impacted site in accordance with stipulated conditions of probation. No fine was sought against the parties due to the cost of remediating the site to remove any remaining asbestos. The approximate cost of the remediation was $175,000.

    In November 2022, Horseshoe Grove acquired a property in The Dalles, Oregon, which included a mobile home park and two dilapidated apartment buildings. The previous owner provided the new buyers with an asbestos survey from December 2021, which identified more than 5,000 square feet of friable chrysotile asbestos within the two deteriorating buildings, with levels ranging from two percent to 25 percent. The survey also noted non-friable asbestos in various building materials, including siding and flooring, throughout the apartments. Despite these findings, Horseshoe Grove failed to implement the necessary precautions for asbestos removal.

    In March 2023, Chamness Dirt Works began demolishing the two asbestos-laden structures without following proper removal procedures. Chamness did not engage a certified asbestos abatement contractor, did not wet the asbestos-containing debris, and dumped the material in a regular landfill.

    Horseshoe Grove paid Chamness Dirt Works a total of $49,330 for the demolition, which did not meet the required safety standards.

    The U.S. Environmental Protection Agency Criminal Investigation Division conducted the investigation.

    United States v. John Waldrop, et al.

    • No. 1:23-CR-00378 (Eastern District of New York)
    • ECS Senior Trial Attorney Ryan Connors
    • AUSA Anna Karamigios

    On April 9, 2025, the court sentenced Dr. John Waldrop and Toney Jones for their involvement in the largest seizure of bird mounts in U.S. Fish and Wildlife Service (USFWS) history. Waldrop pleaded guilty to conspiracy to smuggle wildlife and Endangered Species Act (ESA) violations. He was ordered to pay a $900,000 fine and will complete a three-year term of probation (18 U.S.C. § 371; 16 U.S.C. §§ 1538(e), 1540(b)(1)). This is one of the largest fines ever imposed in an ESA case. Jones was sentenced to complete a six-month term of probation for violating the ESA (16 U.S.C. §§ 1538(e), 1540(b)(1)).

    Over a period of five years, Waldrop illegally imported thousands of museum-quality taxidermy bird mounts and preserved eggs to build a personal collection. His collection of 1,401 taxidermy bird mounts and 2,594 eggs included:

    • Four eagles protected by the Bald and Golden Eagle Protection Act
    • 179 bird and 193 egg species listed in the Migratory Bird Treaty Act, and
    • 212 bird and 32 egg species protected by the Convention on International Trade in Endangered Species (CITES).

    This included extremely rare specimens such as three eggs from the Nordmann’s greenshank, an Asian shorebird with only 900 to 1,600 remaining birds in the wild.

    Between 2016 and 2020, Waldrop imported birds and eggs without the required declarations and permits. After USFWS inspectors at John F. Kennedy International Airport and elsewhere intercepted several shipments, Waldrop recruited Jones, who worked on his Georgia farm, to receive the packages. Jones also deposited approximately $525,000 in a bank account that Waldrop then used to pay for the imports and hide his involvement. Waldrop and Jones used online sales sites such as eBay and Etsy to buy birds and eggs from around the world, including Germany, Hungary, Iceland, Italy, Lithuania, Malta, Russia, South Africa, the United Kingdom, and Uruguay.

    In total, Waldrop spent more than $1.2 million to illegally build this collection. Pursuant to the plea agreement, Waldrop abandoned his collection, which was distributed to the USFWS forensic laboratory, the Smithsonian, and other museums and universities.

    The U.S. Fish and Wildlife Service Office of Law Enforcement conducted the investigation.

    Related Press Release: Office of Public Affairs | Two Men Sentenced in Largest-Ever Bird Mount Trafficking Case | United States Department of Justice

    United States v. John D. Murphy

    • No. 1:24-CR-10074 (District of Massachusetts)
    • ECS Senior Trial Attorney Matthew Morris
    • AUSA Danial Bennett
    • AUSA Kaitlin Brown
    • ECS Paralegal Jonah Fruchtman

    On April 9, 2025, a court sentenced John D. Murphy to nine months’ incarceration, and three months and one day of home confinement, followed by three years’ supervised release. Murphy was also ordered to pay a $10,000 fine. Murphy pleaded guilty to violating the Animal Welfare Act for possessing dogs to use in an animal fighting venture (7 U.S.C. § 2156(b)).

    Prosecutors charged Murphy after investigators identified him on recorded calls discussing dog fighting in a separate investigation. Subsequent court-authorized searches of his Facebook accounts revealed Murphy’s extensive involvement in dogfighting.

    On June 7, 2023, authorities executed a search warrant at Murphy’s residence and another home, seizing 13 pit bull-type dogs. Several dogs exhibited scarring consistent with animal fighting. Authorities also recovered equipment used in fights, including syringes, anabolic steroids, a skin stapler, forceps, and equipment and literature for training dogs.

    The investigation revealed that Murphy often communicated with other dogfighters via Facebook and posted dogfighting-related photos to his Facebook account. Additionally, Murphy posted videos depicting pit bull-type dogs tethered to treadmills commonly used to physically condition dogs for fighting.

    The U.S. Department of Agriculture Office of Inspector General conducted the investigation with assistance from the following agencies: Homeland Security Investigations; U.S. Customs and Border Protection; the Bureau of Alcohol, Tobacco, Firearms, and Explosives; U.S. Coast Guard Investigative Service; U.S. Marshals Service; Maine State Police; New Hampshire State Police; Massachusetts Office of the State Auditor; Rhode Island Society for the Prevention of Cruelty to Animals; and Police Departments in Hanson, Boston, and Acton, Massachusetts.

    Related Press Release: District of Massachusetts | Massachusetts Man Sentenced to More Than a Year in Prison for Dogfighting | United States Department of Justice

    United States v. Jose Correa

    • No. 1:24-CR-00685 (Southern District of New York)
    • AUSA Alexandra Rothman

    On April 10, 2025, a court sentenced Jose Correa to pay a $10,000 fine and complete a two-year term of probation. Correa pleaded guilty to violating the Clean Air Act for negligently releasing asbestos into the ambient air (42 U.S.C. § 7413(c)(4)).

    Between November and December 2022, Correa removed asbestos-containing floor tiles and mastic from a supermarket in Manhattan without hiring an asbestos abatement contractor. Instead, the material was removed by construction workers who were not provided with protective gear, thereby releasing asbestos into the ambient air and placing the workers in imminent danger of death and serious bodily injury.

    The U.S. Environmental Protection Agency Criminal Investigation Division conducted the investigation.

    United States v. Coby Brummett

    • No. 1:24-PO-00040 (Western District of Virginia)
    • AUSA Corey Hall

    On April 11, 2025, a court sentenced Coby Brummett to 30 days’ incarceration with credit for time served. Brummett was also ordered to pay more than $6,200 in restitution for illegally digging and removing ginseng from within the boundaries of Cumberland Gap National Historical Park. Additionally, Brummett is banned from the Park for three years (36 C.F.R. § 2.1(c)(3)).

    An investigation by Park Service rangers determined that Brummett dug up more than 300 ginseng roots from within the confines of the park.

    The restitution will be paid to the National Park Service, which conducted the investigation.

    Related Press Release: Western District of Virginia | Virginia Man Sentenced for Ginseng Poaching at National Park | United States Department of Justice

    United States v. Royce Gillham

    • No. 2:24-CR-14046 (Southern District of Florida)
    • ECS Senior Trial Attorney Adam Cullman
    • AUSA Daniel Funk

    On April 11, 2025, a court ordered Royce Gillham to pay $2,857,029 in restitution to ACT Fuels.

    This is in addition to the court’s sentence of 37 months’ incarceration, followed by three years of supervised release, ordered on March 14, 2025. Gillham, the former general manager of a biofuel producer based in Fort Pierce, Florida, pleaded guilty to conspiring to commit wire fraud and conspiring to make false claims (18 U.S.C.§ 371).

    This biofuel company produced and sold renewable fuel and fuel credits and claimed to turn various feedstocks into biodiesel. When reporting the number of gallons produced to the Internal Revenue Service and the Environmental Protection Agency (EPA), Gillham and his employer vastly overstated their production volume in an effort to generate more credits. When auditors sought more information from the company, Gillham and his co-conspirators gave them false information about their fuel production and customers.

    The scheme generated more than $7 million in fraudulent EPA renewable fuels credits and sought over $6 million in fraudulent tax credits connected to the purported production of biodiesel.

    ACT Fuels purchased the fraudulent fuel credits in question and had to buy replacement credits when authorities found that Gillham’s company produced fraudulent renewable identification numbers or RINs.

    The U.S. Environmental Protection Agency Criminal Investigation Division and the Internal Revenue Service Criminal Investigations conducted the investigation.

    United States v. Mold Wranglers, et al.

    • No. 6:24-CR-00025 (District of Montana)
    • AUSA Ryan Weldon

    On April 14, 2025, a court sentenced Mold Wranglers, Inc., a Kalispell-based hazardous material mitigation company, to pay a $50,000 fine, and complete a two-year term of probation, to include an environmental compliance plan. The company also will pay $348,000 in restitution to the U.S. Department of Veterans Affairs (VA). Mold Wranglers pleaded guilty to a False Claims Act conspiracy for filing false claims with the VA for lead paint abatement work that was never performed (18 U.S.C. § 286).

    Between 2018 and 2019, Mold Wranglers claimed it performed lead abatement work at the Freedom’s Path Fort Harrison facility. The project consisted of converting residential units for low-income veterans and their families. Mold Wranglers submitted documentation to the VA for work including painting over lead-based paint with encapsulating paint. However, the company failed to comply with federal regulations governing lead work, as its employees were not certified to handle lead, and it did not notify the Environmental Protection Agency of the work as required.

    Additionally, Mold Wranglers applied the encapsulating paint in a manner inconsistent with the manufacturer’s specifications.

    The agreement the company made with the VA specified it was not performing an actual abatement but merely “aesthetically repairing the paint and finishing the homes.” Despite this agreement, the company submitted 11 false payment requests, claiming to have performed lead abatement work, and received a total of $456,000 in federal funds for work that did not meet the necessary standards for lead abatement.

    The U.S. Environmental Protection Agency Criminal Investigation Division and Office of Inspector General, The Department of Veterans Affairs, and the Department of Housing and Urban Development conducted the investigation.

    Related Press Release: District of Montana | Helena real estate agent convicted of felony and fined $150,000 for failing to provide lead-based paint disclosures for veterans residing in Fort Harrison rental housing | United States Department of Justice

    United States v. Melanie Ann Carlin

    • No. 6:24-CR-00024 (District of Montana)
    • AUSA Ryan Weldon

    On April 14, 2025, a court sentenced Melanie Ann Carlin to pay a $150,000 fine and complete a three-year term of probation. Carlin pleaded guilty to violating the knowing endangerment provision of the Toxic Substances Control Act for failing to provide required lead-based paint disclosures to veterans residing at Freedom’s Path Fort Harrison in Helena, Montana (15 U.S.C. § 2615(b)(2)(A)). Carlin’s actions led to the exposure of veterans and their families to dangerous levels of lead, a hazardous substance known to cause serious health issues, particularly for children.

    Carlin owns a property management company called 406 Properties, Inc. She was responsible for overseeing rental units at Freedom’s Path, a housing facility with units built prior to 1978. The facility provided affordable homes for veterans and their families. Between September 2019 and September 2021, Carlin knowingly failed to provide mandated lead disclosures. Carlin knew that the property was built before 1978, which meant that the presence of lead paint was likely.

    In 2019, after receiving an email from the Montana Department of Commerce about lead paint concerns, Carlin signed and submitted forms for the units, falsely indicating that they were either free of lead paint or built after 1978. Despite having first-hand knowledge that lead paint was present in the buildings, Carlin continued to neglect her duty to disclose this information to tenants.

    In September 2021, an 18-month-old child living in one of the units ingested lead paint chips.

    Subsequent medical tests revealed the child had dangerously high blood lead levels and required lead poisoning treatment. Carlin admitted to agents that she knew about the lead paint disclosure requirement but failed to give residents the required notice. Carlin’s failure to act placed veterans and their families at imminent risk of serious harm.

    The U.S. Environmental Protection Agency Criminal Investigation Division, The Department of Veterans Affairs Office of Inspector General, and the Department of Housing and Urban Development conducted the investigation.

    Related Press Release: District of Montana | Helena real estate agent convicted of felony and fined $150,000 for failing to provide lead-based paint disclosures for veterans residing in Fort Harrison rental housing | United States Department of Justice

    United States v. Aghorn Operating, Inc., et al.

    On April 15, 2025, Aghorn Operating, Inc., Trent Day, and Kodiak Roustabout, Inc., entered guilty pleas and were sentenced in relation to Worker Safety, Clean Air Act (CAA) and Safe Drinking Water Act (SDWA) violations. Day pleaded guilty to a CAA negligent endangerment charge and was sentenced to serve five months’ incarceration, followed by one year of supervised release (42 U.S.C. § 7413(c)(4)). Aghorn pleaded guilty to CAA negligent endangerment and an Occupational Safety and Health Act (OSHA) willful violation count for the death of an employee, Jacob Dean, and his wife, Natalee Dean (42 U.S.C. § 7413(c)(4); 29 U.S.C. § 666(e)). Aghorn was sentenced to pay a $1 million fine and complete a two-year term of probation. Kodiak pleaded guilty to making a materially false statement (18 U.S.C. §1001) regarding well integrity testing that is required under the SDWA and was sentenced to pay a $400,000 fine and complete a one-year term of probation.

    Aghorn owns and operates oil wells and leases in Texas. Kodiak performed oilfield support and maintenance services for Aghorn. Day was a vice president for both Aghorn and Kodiak. The CAA and OSHA charges stem from the defendants releasing hydrogen sulfide that caused the deaths of Aghorn employee, Jacob Dean, and his wife, Natalee Dean. Both victims were overcome by hydrogen sulfide at Aghorn’s facility in Odessa. Aghorn and Day later obstructed the investigation into the Deans’ deaths. The SDWA-related violation stems from false statements made by Kodiak regarding the mechanical integrity of Aghorn injection wells in forms and pressure charts filed with the State of Texas Railroad Commission. In addition to the fine, Aghorn will guarantee that at least 33 tests conducted for Aghorn wells during its year of probation are witnessed or conducted by a third party.

    The U.S. Environmental Protection Agency Criminal Investigation Division conducted the investigation, with assistance from the Texas Railroad Commission, Ector County Environmental Enforcement, and the Odessa Fire Department.

    Related Press Release: Office of Public Affairs | Oilfield Company, Its Executive, and a Support Services Company Plead Guilty and Are Sentenced for Worker Safety, Clean Air Act, and Safe Drinking Water Act Violations Resulting in the Death of an Employee and His Spouse | United States Department of Justice

    United States v. Justin Taylor

    • No. 6:24-CR-00013 (Southern District of Georgia)
    • AUSA Darron J. Hubbard

    On April 15, 2025, a court sentenced Justin Taylor to complete a five-year term of probation and pay $279,642 in restitution to the Internal Revenue Service. Taylor pleaded guilty to conspiracy to tamper with a monitoring device and filing a fraudulent tax return (18 U.S.C. § 371; 26 U.S.C. § 7206(1)).

    Between January 2018 and January 2021, Taylor worked as a mechanic. Using a high-powered computer that supported diagnostic tools for heavy-duty logging equipment, Taylor performed emission-control “deletes” for more than 200 owners of diesel engines.

    The changes Taylor made to the emission controls on those machines disabled the electronic monitoring devices and methods required under the Clean Air Act. Taylor routinely charged $2,000 for this service, earning more than $1.2 million during this period while reporting only $166,853 in income.

    The U.S. Environmental Protection Agency Criminal Investigation Division and the Internal Revenue Service Criminal Investigations conducted the investigation.

    United States v. Johnnie Lee Nelson, et al.

    • No. 1:23-CR-00787 (District of New Jersey)
    • ECS Senior Trial Attorney Ethan Eddy
    • AUSA Michelle Goldman

    On April 16, 2025, a court sentenced Johnnie Lee Nelson to complete a two-year term of probation to include one year of home confinement. Nelson also will perform 100 hours of community service. Nelson pleaded guilty to conspiracy to possess, train, and transport dogs for an animal fighting venture and to sponsor and exhibit dogs in an animal fighting venture (18 U.S.C. § 371).

    On March 23, 2019, officers responded to an emergency call at an auto body garage in Upper Deerfield Township, New Jersey. They found a fighting pit in the garage, along with two pit bull-type dogs, still fighting, that had been placed into an inoperable car on a lift in the garage as the participants fled on foot. The dogs later died from injuries they sustained while fighting. Officers also found an uninjured pit bull-type dog in a car just outside the garage, along with a rudimentary veterinary suture and skin staple kit in a bag.

    Evidence revealed that Nelson’s co-defendant, Tommy Watson, organized the fight, and that their dog was scheduled for the next fight on deck. They jointly possessed and trained this dog for this particular fight, as shown by cell phone video evidence. Nelson and Watson participated in a dog fighting operation they called “From Da Bottom Kennels.” From Da Bottom Kennels and others live-streamed dog fight videos from that garage via the Telegram app. Watson is scheduled for trial to begin on June 4, 2025.

    The U.S. Department of Agriculture Office of Inspector General, the Federal Bureau of Investigation, and Homeland Security Investigations conducted the investigation.

    United States v. Sarmad Ghaled Dafer, et al.

    • Nos. 3:24-CR-00615, 23-CR-01879 (Southern District of California)
    • AUSA Sabrina L. Feve
    • AUSA Robert Miller
    • Former AUSA Melanie Pierson

    On April 18, 2025, a court sentenced Sarmad Ghaled Dafer to four months’ incarceration, followed by three years’ supervised release, to include 180 days of home confinement. Dafer also will pay $23,502 in restitution to the U.S. Fish and Wildlife Service to reimburse costs for quarantining three Mexican spider monkeys at the San Diego Zoo. Dafer is jointly and severally responsible along with co-defendant Sarkon Yonan Hanna for the restitution.

    On August 14, 2023, Customs and Border Protection (CBP) officers stopped a man and woman attempting to drive a van into the United States from Mexico. During an initial inspection, a CBP officer discovered an animal carrier hidden behind the rear seat that contained live monkeys. The CBP officer referred the occupants and vehicle for a secondary examination. Officers found three baby spider monkeys hidden in the van. The officers seized the monkeys and placed them in quarantine.

    A search of the co-conspirator’s phone led to evidence that Dafer purchased and coordinated the smuggling of monkeys across the border on three occasions, between June 2022 and August 2023.

    Baby Mexican spider monkeys continue to nurse throughout their first year and ordinarily are not fully weaned and independent until they turn two. Most baby Mexican spider monkeys will continue to stay close to their mothers until they are approximately four years old.

    Dafer’s Facebook messages and photos show that he intentionally sought baby monkeys to make the smuggling process easier. He even posted a photo of a baby spider monkey under a heat lamp in a small cage. This suggests that Dafer knew that the baby monkey he was selling had been prematurely separated from its mother.

    Mexican spider monkey mothers will not voluntarily relinquish their young and the entire troop of spider monkeys will try to defend the mother and baby from perceived threats. Consequently, to capture the babies, poachers will typically have to kill or harm the mother and entire troop. In this case, genetic analysis confirmed the three babies each had different mothers.

    Dafer pleaded guilty to conspiracy, and Hanna pleaded guilty to smuggling (18 U.S.C. §§ 371, 545.) Hanna was sentenced on March 14, 2025, to time served, followed by two years’ supervised release, along with the restitution. Hanna was in the car that attempted to smuggle the three monkeys into the United States from Mexico on August 14, 2023.

    Homeland Security Investigations, Customs and Border Protection, and the U.S. Fish and Wildlife Service Office of Law Enforcement conducted the investigation. 

    Case photo of two of the three monkeys rescued by CBP.

    Related Press Release: Southern District of California | Wildlife Trafficker Sentenced for Smuggling Baby Spider Monkeys | United States Department of Justice

    United States v. Antonio Pereira, et al.

    • Nos. 3:24-CR-00824, 3:25-CR-00001 (District of New Jersey)
    • ECS Trial Attorney Christopher Hale
    • AUSA Kelly Lyons

    On April 22, 2025, a court sentenced Antonio Periera to pay a $4,000 fine and complete a two-year term of probation. Periera and co-defendant Darren McClave pleaded guilty to conspiracy to obstruct justice (18 U.S.C. § 371). McClave is scheduled for sentencing on June 30, 2025.

    McClave, a captain of a clam vessel based out of New Jersey, participated in a scheme to illegally harvest and sell excess scallops, violating federal fishing regulations. While clam vessels are allowed to take a limited quantity of scallops as bycatch, McClave routinely exceeded these limits and sold the surplus to Pereira, a seafood dealer. To cover up the overfishing, McClave and Pereira worked together to falsify the Fishing Vessel Trip Reports and Dealer Reports required by the National Oceanic and Atmospheric Administration.

    The National Oceanic and Atmospheric Administration Office of Law Enforcement conducted the investigation.

    United States v. J.H. Baxter & Co., Inc. et al.

    • No. 6:24-CR-00441 (District of Oregon)
    • ECS Trial Attorney Stephen Foster
    • ECS Trial Attorney Rachel M. Roberts
    • AUSA William M. McLaren
    • RCEC Karla G. Perrin
    • ECS Law Clerk Maria Wallace

    On April 22, 2025, a court sentenced J.H. Baxter & Co., Inc., and J.H. Baxter & Co., a California Limited Partnership, collectively, to pay a total of $1.5 million in criminal fines. In addition, both companies were ordered to serve five-year terms of probation. The companies’ president, Georgia Baxter-Krause, was sentenced to 90 days’ incarceration, followed by one year of supervised release.

    The two companies (collectively J.H. Baxter) were responsible for a wood treatment facility in Eugene, Oregon. Both pleaded guilty to charges of illegally treating hazardous waste and knowingly violating the Clean Air Act (CAA) (42 U.S.C. § 6928(d)(2)(A); 42 U.S.C. § 7413(c)(1)). Baxter-Krause pleaded guilty to two counts of making false statements in violation of the Resource Conservation and Recovery Act (RCRA) (42 U.S.C. § 6928 (d)(3)).

    J.H. Baxter used hazardous chemicals to treat and preserve wood at its Eugene facility. The wastewater from the wood preserving processes was hazardous waste. J.H. Baxter operated a wastewater treatment unit to treat and evaporate the waste. For years, however, when the facility accumulated too much water on site, employees transferred this water to a wood treatment retort to “boil it off,” greatly reducing the volume. J.H. Baxter would then remove the waste that remained, label it as hazardous waste, and ship it offsite for disposal.

    J.H. Baxter was never issued a RCRA permit to treat its waste in this manner. The facility was also subject to CAA emissions standards for hazardous air pollutants. However, employees were directed to open all vents on the retorts, allowing discharges to the surrounding air.

    State inspectors requested information about J.H. Baxter’s practice of boiling off hazardous wastewater. On two separate occasions, Baxter-Krause made false statements in response to these requests regarding the dates the practice took place, and which retorts were used. The investigation determined that Baxter-Krause knew J.H. Baxter maintained detailed daily production logs for each retort.

    J.H. Baxter boiled off hazardous process wastewater in its wood treatment retorts on 136 days. Baxter-Krause was also aware that during this time the company used four of its five retorts to boil off wastewater.

    The U.S. Environmental Protection Agency Criminal Investigation Division conducted the investigation with assistance from the Oregon Department of Environmental Quality and the Oregon State Police. 

    Related Press Release: Environment and Natural Resources Division | United States v. J.H. Baxter & Co., Inc. et al. | United States Department of Justice

    United States v. Dlubak Glass Company

    • No. 3:24-CR-00533 (Northern District of Texas)
    • ECS Trial Attorney Lauren Steele
    • ECS Senior Trial Attorney Gary Donner

    On April 29, 2025, a court sentenced Dlubak Glass Company (DGC) to pay a $100,000 fine and complete a four-year term of probation. The company pleaded guilty to making a false statement regarding the storage of hazardous waste (18 U.S.C. § 1001(a)(2)).

    DGC is in the business of processing and recycling glass products, including CRT (cathode ray tube) glass. CRTs have three components: a panel, a funnel, and a neck. Both the panel and the funnel are made of glass. CRT funnel glass contains significant amounts of lead, while panel glass typically contains lead in much lower quantities. Because of the presence of lead, used CRTs that are transported, stored, or disposed of can be considered a characteristic hazardous waste under the Resource Conservation and Recovery Act.

    DGC operated facilities in several states, including locations in Arizona, Texas, and Oklahoma. Pursuant to a Consent Order, DGC agreed to ship all the CRT glass at its Arizona facility offsite for recycling or disposal as hazardous waste. DGC later shipped approximately 4,000 tons of CRT glass from Yuma, Arizona, to its Texas facility, telling regulators that it would recycle the material by incorporating it into commercial products.

    When Texas Commission of Environmental Quality (TCEQ) inspected DGC’s Texas facility they observed piles of CRT glass onsite. DGC’s plant manager told inspectors that the only CRT glass present at the location was “processed panel glass containing no lead.” Dlubak employees later repeated this assertion in a follow-up meeting with TCEQ. However, further investigation determined that the glass in question was composed of both panel and funnel glass, a fact which DGC was aware of when it made these statements to TCEQ.

    The U.S. Environmental Protection Agency Criminal Investigation Division conducted the investigation.

    United States v. Tribar Technologies, Inc.

    • No. 2:24-CR-20552 (Eastern District of Michigan)
    • ECS Senior Counsel Kris Dighe
    • AUSA Karen Reynolds
    • RCEC Sasha Reyes

    On April 29, 2025, a court sentenced Tribar Technologies, Inc. (Tribar), to pay a $200,000 fine, complete a five-year term of probation and enact an environmental compliance plan. Tribar also will pay $20,000 in restitution to the City of Ann Arbor, Michigan.

    The company pleaded guilty to negligently violating a pretreatment standard under the Clean Water Act (33 U.S.C. §§ 1317(d) and 1319(c)(1)(A)).

    Tribar manufactures automobile parts and presently operates five active plants in southeast Michigan. Plant 5 is a chrome plating facility located in Wixom, Michigan. It uses an electroplating process to apply chrome finishing to plastic automotive parts. Plant 5 generates wastewater that contains chromium compounds, including hexavalent chromium, a known carcinogen.

    On July 23, 2022, Plant 5 accumulated approximately 15,000 gallons of untreated wastewater containing high concentrations of hexavalent chromium. This wastewater had higher levels of pollutants than the wastewater typically generated from Plant 5 operations. During the week beginning July 25, 2022, Plant 5 employees attempted to treat this wastewater in a holding tank to reduce the amount of hexavalent chromium before putting it into the Plant 5 wastewater treatment system. By the end of the week, the wastewater still contained high concentrations of hexavalent chromium.

    On July 29, 2022, an employee discharged approximately 10,000 gallons of insufficiently treated wastewater from the holding tank into the Plant 5 wastewater treatment system. This discharge activated wastewater treatment system alarms, indicating that the wastewater required further treatment before it could be discharged to the Wixom sanitary sewer system. The employee disabled approximately 460 alarms and discharged the wastewater to the Wixom sanitary sewer system, and ultimately to the Wixom publicly owned treatment works, without completing the treatment necessary to remove chromium from the wastewater, as required by Tribar’s Industrial Pretreatment Program Permit.

    The U.S. Environmental Protection Agency Criminal Investigation Division, the Michigan Department of Environment, Great Lakes and Energy, and the Federal Bureau of Investigation conducted the investigation. 

    View All Environmental Crimes Bulletins

    MIL Security OSI –

  • MIL-OSI: CPS Announces First Quarter 2025 Earnings

    Source: GlobeNewswire (MIL-OSI)

    • Revenues of $106.9 million compared to $91.7 million in the prior year period
    • Net income of $4.7 million, or $0.19 per diluted share
    • Total portfolio balance of $3.615 billion, highest in company history
    • New contract purchases of $451.2 million

    LAS VEGAS, NV, May 12, 2025 (GLOBE NEWSWIRE) — Consumer Portfolio Services, Inc. (Nasdaq: CPSS) (“CPS” or the “Company”) today announced earnings of $4.7 million, or $0.19 per diluted share, for its first quarter ended March 31, 2025. This compares to a net income of $4.6 million, or $0.19 per diluted share, in the first quarter of 2024.

    Revenues for the first quarter of 2025 were $106.9 million, an increase of $15.2 million, or 16.6%, compared to $91.7 million for the first quarter of 2024.  Total operating expenses for the first quarter of 2025 were $100.1 million compared to $85.2 million for the 2024 period.  Pretax income for the first quarter of 2025 was $6.8 million compared to pretax income of $6.6 million in the first quarter of 2024.

    During the first quarter of 2025, CPS purchased $451.2 million of new contracts compared to $457.8 million during the fourth quarter of 2024, and $346.3 million during the first quarter of 2024. The Company’s receivables totaled $3.615 billion as of March 31, 2025, an increase from $3.491 billion as of December 31, 2024, and an increase from $3.021 billion as of March 31, 2024.

    Annualized net charge-offs for the first quarter of 2025 were 7.54% of the average portfolio as compared to 7.84% for the first quarter of 2024. Delinquencies greater than 30 days (including repossession inventory) were 12.35% of the total portfolio as of March 31, 2025, compared to 12.39% as of March 31, 2024.

    “We started off the year by posting the highest amount in new loan originations for any first quarter in company history,” said Charles E. Bradley, Chief Executive Officer. “This positions us well for the remainder of the year, as we remain focused on driving the company forward.”  

    Conference Call

    CPS announced that it will hold a conference call on May 13, 2025 at 1:00 p.m. ET to discuss its first quarter 2025 operating results. 

    Those wishing to participate can pre-register for the conference call at the following link https://register-conf.media-server.com/register/BIa727447d5fdf49d4b7da9c96f3d668b7. Registered participants will receive an email containing conference call details for dial-in options. To avoid delays, we encourage participants to dial into the conference call fifteen minutes ahead of the schedule start time. A replay will be available beginning two hours after conclusion of the call for 12 months via the Company’s website at https://ir.consumerportfolio.com/investor-relations.

    About Consumer Portfolio Services, Inc.

    Consumer Portfolio Services, Inc. is an independent specialty finance company that provides indirect automobile financing to individuals with past credit problems or limited credit histories. We purchase retail installment sales contracts primarily from franchised automobile dealerships secured by late model used vehicles and, to a lesser extent, new vehicles. We fund these contract purchases on a long-term basis primarily through the securitization markets and service the contracts over their lives.

    Forward-looking statements in this news release include the Company’s recorded figures representing allowances for remaining expected lifetime credit losses, its estimates of fair value (most significantly for its receivables accounted for at fair value), its provision for credit losses, its entries offsetting the preceding, and figures derived from any of the preceding. In each case, such figures are forward-looking statements because they are dependent on the Company’s estimates of losses to be incurred in the future. The accuracy of such estimates may be adversely affected by various factors, which include the following: possible increased delinquencies; repossessions and losses on retail installment contracts; incorrect prepayment speed and/or discount rate assumptions; possible unavailability of qualified personnel, which could adversely affect the Company’s ability to service its portfolio; possible increases in the rate of consumer bankruptcy filings, which could adversely affect the Company’s rights to collect payments from its portfolio; other changes in government regulations affecting consumer credit; possible declines in the market price for used vehicles, which could adversely affect the Company’s realization upon repossessed vehicles; and economic conditions in geographic areas in which the Company’s business is concentrated. Any or all of such factors also may affect the Company’s future financial results, as to which there can be no assurance. Any implication that the results of the most recently completed quarter are indicative of future results is disclaimed, and the reader should draw no such inference. Factors such as those identified above in relation to losses to be incurred in the future may affect future performance.

    Investor Relations Contact

    Danny Bharwani, Chief Financial Officer

    949-753-6811

     
    Consumer Portfolio Services, Inc. and Subsidiaries
    Condensed Consolidated Statements of Operations
    (In thousands, except per share data)
    (Unaudited)
           
      Three months ended
      March 31,
        2025       2024  
    Revenues:      
    Interest income $ 101,933     $ 84,288  
    Mark to finance receivables measured at fair value   3,500       5,000  
    Other income   1,441       2,456  
        106,874       91,744  
    Expenses:      
    Employee costs   25,033       24,416  
    General and administrative   13,542       13,753  
    Interest   54,918       41,968  
    Provision for credit losses   (979 )     (1,635 )
    Other expenses   7,558       6,685  
        100,072       85,187  
    Income before income taxes   6,802       6,557  
    Income tax expense   2,108       1,967  
    Net income $ 4,694     $ 4,590  
           
    Earnings per share:      
    Basic $ 0.22     $ 0.22  
    Diluted $ 0.19     $ 0.19  
           
           
    Number of shares used in computing earnings per share:      
    Basic   21,444       21,143  
    Diluted   24,325       24,602  
                   
    Condensed Consolidated Balance Sheets
    (In thousands)
    (Unaudited)
           
           
      March 31,   December 31,
        2025       2024  
    Assets:      
    Cash and cash equivalents $ 29,841     $ 11,713  
    Restricted cash and equivalents   153,637       125,684  
    Finance receivables measured at fair value   3,449,106       3,313,767  
           
    Finance receivables   3,109       5,420  
    Allowance for finance credit losses   (249 )     (433 )
    Finance receivables, net   2,860       4,987  
           
           
    Deferred tax assets, net   826       1,010  
    Other assets   37,336       36,707  
      $ 3,673,606     $ 3,493,868  
           
    Liabilities and Shareholders’ Equity:      
    Accounts payable and accrued expenses $ 75,289     $ 70,151  
    Warehouse lines of credit   365,683       410,898  
    Residual interest financing   163,391       99,176  
    Securitization trust debt   2,743,269       2,594,384  
    Subordinated renewable notes   27,547       26,489  
        3,375,179       3,201,098  
           
    Shareholders’ equity   298,427       292,770  
      $ 3,673,606     $ 3,493,868  
                   
    Operating and Performance Data ($ in millions)        
         
        At and for the
        Three months ended
        March 31,
          2025       2024  
             
    Contracts purchased   $ 451.22     $ 346.30  
    Contracts securitized   $ 462.54     $ 300.61  
             
    Total portfolio balance (1)   $ 3,614.55     $ 3,021.19  
    Average portfolio balance (1)   $ 3,572.64     $ 2,993.82  
             
             
    Delinquencies (1)        
    31+ Days     9.75 %     9.98 %
    Repossession Inventory     2.60 %     2.41 %
    Total Delinquencies and Repo. Inventory     12.35 %     12.39 %
             
    Annualized Net Charge-offs as % of Average Portfolio (1)     7.54 %     7.84 %
             
    Recovery rates (1), (2)     27.7 %     33.3 %
                     
      For the
      Three months ended
      March 31,
      2025   2024
      $ (3)   % (4)   $ (3)   % (4)
    Interest income $ 101.93     11.4 %   $ 84.29     11.3 %
    Mark to finance receivables measured at fair value   3.50     0.4 %     5.00     0.7 %
    Other income   1.44     0.2 %     2.46     0.3 %
    Interest expense   (54.92 )   -6.1 %     (41.97 )   -5.6 %
    Net interest margin   51.96     5.8 %     49.78     6.7 %
    Provision for credit losses   0.98     0.1 %     1.64     0.2 %
    Risk adjusted margin   52.94     5.9 %     51.41     6.9 %
    Other operating expenses (5)   (46.13 )   -5.2 %     (44.85 )   -6.0 %
    Pre-tax income $ 6.80     0.8 %   $ 6.56     0.9 %
                               
    (1)  Excludes third party portfolios.
    (2)  Wholesale auction liquidation amounts (net of expenses) as a percentage of the account balance at the time of sale.
    (3)  Numbers may not add due to rounding.
    (4)  Annualized percentage of the average portfolio balance.  Percentages may not add due to rounding.  
    (5)  Total pre-tax expenses less provision for credit losses and interest expense.
                               

    The MIL Network –

  • MIL-OSI: HighPeak Energy, Inc. Announces First Quarter 2025 Financial and Operating Results

    Source: GlobeNewswire (MIL-OSI)

    FORT WORTH, Texas, May 12, 2025 (GLOBE NEWSWIRE) — HighPeak Energy, Inc. (“HighPeak” or the “Company”) (NASDAQ: HPK) today announced financial and operating results for the quarter ended March 31, 2025, provided an updated 2025 development outlook and increased production guidance.

    First Quarter 2025 Highlights

    • Sales volumes averaged approximately 53.1 thousand barrels of crude oil equivalent per day (“MBoe/d”), representing a 6% increase from the fourth quarter 2024.
    • Net income was $36.3 million, or $0.26 per diluted share and EBITDAX (a non-GAAP financial measure defined and reconciled below) was $197.3 million, or $1.40 per diluted share. First quarter 2025 adjusted net income (a non-GAAP financial measure defined and reconciled below) was $42.7 million, or $0.31 per diluted share.
    • Lease operating expenses averaged $6.61 per Boe, excluding workover expenses, representing a 3% decrease compared to the fourth quarter 2024.
    • Generated free cash flow (a non-GAAP financial measure defined and reconciled below) of $10.7 million, reduced long-term debt by $30 million and paid $0.04 per share in dividends.
    • Realized increased drilling and completion efficiency gains, which translated to drilling and completing four additional wells during the first quarter.

    Recent Events

    • Narrowed 2025 production guidance range and increased the midpoint.
    • On May 12, 2025, the Company’s Board of Directors declared a quarterly dividend of $0.04 per common share outstanding payable in June 2025.

    Statement from Jack Hightower, Chairman and CEO:

    In March, we discussed our four pillars of success for 2025 which include: 1) improving corporate efficiency, 2) maintaining capital discipline, 3) optimizing our capital structure, and 4) delivering shareholder value. I would like to take this opportunity to update our shareholders on where we stand and the progress we have made to date.

    Improving Corporate Efficiency
    HighPeak delivered another strong quarter of results, beating production guidance and consensus estimates, while also realizing higher levels of operating efficiencies in our development program. We drilled over 25% faster than our previous expectations, which translated to drilling and completing four additional wells during the first quarter. We are running smoother and more efficiently than ever before, while continuing to keep development costs in line with internal expectations.

    Maintaining Capital Discipline
    Due to the global economic uncertainty and its impact on oil prices, we have moderated our development program by laying down one rig for four months, May through August. Despite the pause, we remain on track to drill and complete the same number of wells in our 2025 guidance because of the gains made through operational efficiencies.

    As detailed on our March conference call, the majority of our 2025 infrastructure capex was first-quarter weighted. Factoring in drilling and completing four additional wells, we accomplished an outsized portion of our planned annual development activity during the first quarter. Going forward, we expect our quarterly capital expenditures to be materially lower and the total for the year to fall within our 2025 guided capex range. Although our operations are running much more efficiently, this is not the proper time to accelerate development activity from our original plan. Additionally, we have complete flexibility from a land and operations perspective to reduce the budget and leave a rig down for longer than the current plan if conditions warrant.

    Optimizing our Capital Structure
    We remain committed to optimizing our capital structure and remain poised to execute our plan once the market has stabilized. We are in a healthy financial position with no near-term debt maturities and are taking proactive steps to keep our balance sheet strong as we navigate this turbulent market.

    Shareholder Value
    Given the current global macro-economic backdrop, this is a time to remain nimble and prudent, which our high-quality asset base allows. As large owners of the Company, management is fully aligned with shareholders and has a long-term outlook on value creation. While markets may be volatile, it is important to remember the fundamental value of our asset base is still strong.

    First Quarter 2025 Operational Update

    HighPeak’s sales volumes during the first quarter of 2025 averaged 53.1 MBoe/d, a six percent increase over the fourth quarter 2024. First quarter sales volumes consisted of approximately 72% crude oil and 86% liquids.

    The Company averaged two drilling rigs and one frac crew during the first quarter, drilled 16 gross (16.0 net) horizontal wells and turned-in-line 13 gross (12.9 net) producing wells. On March 31, 2025, the Company had 28 gross (28.0 net) horizontal wells in various stages of drilling and completion.

    The Company updated its 2025 production guidance range to 48,000 – 50,500 Boe/d.

    HighPeak President, Michael Hollis, commented, “Our strong first quarter production is allowing us to narrow our guided range and increase the midpoint. This speaks to our strong well performance and the high quality of our long lived oily inventory. As seen in the last few commodity price cycles, HighPeak is realizing deflationary cost pressures on both the capex and opex fronts. With our increased operational efficiency, we are doing more with less and at a lower overall cost.”

    First Quarter 2025 Financial Results

    HighPeak reported net income of $36.3 million for the first quarter of 2025, or $0.26 per diluted share, and EBITDAX of $197.3 million, or $1.40 per diluted share. HighPeak reported adjusted net income of $42.7 million for the first quarter of 2025, or $0.31 per diluted share.

    First quarter average realized prices were $71.64 per Bbl of crude oil, $24.21 per Bbl of NGL and $2.34 per Mcf of natural gas, resulting in an overall realized price of $53.84 per Boe, or 75% of the weighted average of NYMEX crude oil prices, excluding the effects of derivatives. HighPeak’s cash costs for the first quarter were $11.94 per Boe, including lease operating expenses of $6.61 per Boe, workover expenses of $0.83 per Boe, production and ad valorem taxes of $3.17 per Boe and G&A expenses of $1.33 per Boe. As a result, the Company’s unhedged EBITDAX per Boe was $41.90 per Boe, or 78% of the overall realized price per Boe for the quarter, excluding the effects of derivatives.

    HighPeak’s first quarter 2025 capital expenditures to drill, complete, equip, provide facilities and for infrastructure were $179.8 million.

    Hedging

    Crude oil. As of March 31, 2025, HighPeak had the following outstanding crude oil derivative instruments and the weighted average crude oil prices and premiums payable per Bbl:

                          Swaps     Collars, Enhanced Collars
    & Deferred
    Premium Puts    		  
    Settlement
    Month    		   Settlement
    Year    		   Type of
    Contract    		   Bbls
    Per
    Day    		   Index   Price per
    Bbl    		     Floor or
    Strike
    Price per
    Bbl    		     Ceiling
    Price per
    Bbl    		     Deferred
    Premium
    Payable
    per Bbl    		  
    Crude Oil:                                                  
    Apr – Jun   2025   Swap     5,500   WTI Cushing   $ 76.37     $ —     $ —     $ —  
    Apr – Jun   2025   Collar     7,989   WTI Cushing   $ —     $ 64.38     $ 88.55     $ 2.00  
    Apr – Jun   2025   Put     9,000   WTI Cushing   $ —     $ 65.78     $ —     $ 5.00  
    Jul – Sep   2025   Swap     3,000   WTI Cushing   $ 75.85     $ —     $ —     $ —  
    Jul – Sep   2025   Collar     7,000   WTI Cushing   $ —     $ 65.00     $ 90.08     $ 2.28  
    Jul – Sep   2025   Put     9,000   WTI Cushing   $ —     $ 65.78     $ —     $ 5.00  
    Oct – Dec   2025   Collar     5,000   WTI Cushing   $ —     $ 60.00     $ 72.80     $ —  
    Jan – Mar   2026   Collar     5,000   WTI Cushing   $ —     $ 60.00     $ 72.80     $ —  
     

    The Company’s crude oil derivative contracts detailed above are based on reported settlement prices on the New York Mercantile Exchange for West Texas Intermediate pricing.

    Natural gas. As of March 31, 2025, the Company had the following outstanding natural gas derivative instruments and the weighted average natural gas prices payable per MMBtu.

    Settlement Month   Settlement
    Year    		   Type of
    Contract    		   MMBtu
    Per Day    		   Index   Price per
    MMBtu    		  
    Natural Gas:                          
    Apr – Jun   2025   Swap     30,000   HH   $ 4.43  
    Jul – Sep   2025   Swap     30,000   HH   $ 4.43  
    Oct – Dec   2025   Swap     30,000   HH   $ 4.43  
    Jan – Mar   2026   Swap     19,667   HH   $ 4.43  
     

    HighPeak added the following natural gas swaps in April 2025.

    Settlement Month   Settlement
    Year    		   Type of
    Contract    		   MMBtu
    Per Day    		   Index   Price per
    MMBtu    		  
    Natural Gas:                          
    Jan – Mar   2026   Swap     10,333   HH   $ 4.30  
    Apr – Jun   2026   Swap     30,000   HH   $ 4.30  
    Jul – Sep   2026   Swap     30,000   HH   $ 4.30  
    Oct – Dec   2026   Swap     30,000   HH   $ 4.30  
    Jan – Mar   2027   Swap     19,667   HH   $ 4.30  
     

    Dividends

    During the first quarter of 2025, HighPeak’s Board of Directors approved a quarterly dividend of $0.04 per share, or $5.0 million in dividends paid to stockholders during the quarter. In addition, in May 2025, the Company’s Board of Directors declared a quarterly dividend of $0.04 per share, or approximately $5.0 million in dividends, to be paid on June 25, 2025, to stockholders of record on June 2, 2025. 

    Conference Call

    HighPeak will host a conference call and webcast on Tuesday, May 13, 2025, at 10:00 a.m. Central Time for investors and analysts to discuss its results for the first quarter of 2025. Conference call participants may register for the call here. Access to the live audio-only webcast and replay of the earnings release conference call may be found here. A live broadcast of the earnings conference call will also be available on the HighPeak Energy website at www.highpeakenergy.com under the “Investors” section of the website. A replay will also be available on the website following the call.

    When available, a copy of the Company’s earnings release, investor presentation and Quarterly Report on Form 10-Q may be found on its website at www.highpeakenergy.com.

    About HighPeak Energy, Inc.

    HighPeak Energy, Inc. is a publicly traded independent crude oil and natural gas company, headquartered in Fort Worth, Texas, focused on the acquisition, development, exploration and exploitation of unconventional crude oil and natural gas reserves in the Midland Basin in West Texas. For more information, please visit our website at www.highpeakenergy.com.

    Cautionary Note Regarding Forward-Looking Statements

    The information in this press release contains forward-looking statements that involve risks and uncertainties. When used in this document, the words “believes,” “plans,” “expects,” “anticipates,” “forecasts,” “intends,” “continue,” “may,” “will,” “could,” “should,” “future,” “potential,” “estimate” or the negative of such terms and similar expressions as they relate to HighPeak Energy, Inc. (“HighPeak Energy” or the “Company”) are intended to identify forward-looking statements, which are generally not historical in nature. The forward-looking statements are based on the Company’s current expectations, assumptions, estimates and projections about the Company and the industry in which the Company operates. Although the Company believes that the expectations and assumptions reflected in the forward-looking statements are reasonable as and when made, they involve risks and uncertainties that are difficult to predict and, in many cases, beyond the Company’s control. For example, the Company’s review of strategic alternatives may not result in a sale of the Company, a recommendation that a transaction occur or result in a completed transaction, and any transaction that occurs may not increase shareholder value, in each case as a result of such risks and uncertainties.

    These risks and uncertainties include, among other things, the results of the strategic review being undertaken by the Company’s Board and the interest of prospective counterparties, the Company’s ability to realize the results contemplated by its 2025 guidance, volatility of commodity prices, political instability or armed conflicts in crude or natural gas producing regions such as the ongoing war between Russia and Ukraine or Israel and Hamas, product supply and demand, the impact of a widespread outbreak of an illness, such as the coronavirus disease pandemic, on global and U.S. economic activity, competition, OPEC+ policy decisions, potential new trade policies, such as tariffs, could adversely affect the Company’s operations, business and profitability, inflationary pressures on costs of oilfield goods, services and personnel, the ability to obtain environmental and other permits and the timing thereof, other government regulation or action, the ability to obtain approvals from third parties and negotiate agreements with third parties on mutually acceptable terms, litigation, the costs and results of drilling and operations, availability of equipment, services, resources and personnel required to perform the Company’s drilling and operating activities, access to and availability of transportation, processing, fractionation, refining and storage facilities, HighPeak Energy’s ability to replace reserves, implement its business plans or complete its development activities as scheduled, access to and cost of capital, the financial strength of counterparties to any credit facility and derivative contracts entered into by HighPeak Energy, if any, and purchasers of HighPeak Energy’s oil, natural gas liquids and natural gas production, uncertainties about estimates of reserves, identification of drilling locations and the ability to add proved reserves in the future, the assumptions underlying forecasts, including forecasts of production, expenses, cash flow from sales of oil and gas and tax rates, quality of technical data, environmental and weather risks, including the possible impacts of climate change, cybersecurity risks and acts of war or terrorism. These and other risks are described in the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K and other filings with the SEC. The Company undertakes no duty to publicly update these statements except as required by law.

    Reserve engineering is a process of estimating underground accumulations of hydrocarbons that cannot be measured in an exact way. The accuracy of any reserve estimate depends on the quality of available data, the interpretation of such data and price and cost assumptions made by reserve engineers. Reserves estimates included herein may not be indicative of the level of reserves or PV-10 value of oil and natural gas production in the future. In addition, the results of drilling, testing and production activities may justify revisions of estimates that were made previously. If significant, such revisions could impact HighPeak’s strategy and change the schedule of any further production and development drilling. Accordingly, reserve estimates may differ significantly from the quantities of oil and natural gas that are ultimately recovered.

    Use of Projections

    The financial, operational, industry and market projections, estimates and targets in this press release and in the Company’s guidance (including production, operating expenses and capital expenditures in future periods) are based on assumptions that are inherently subject to significant uncertainties and contingencies, many of which are beyond the Company’s control. The assumptions and estimates underlying the projected, expected or target results are inherently uncertain and are subject to a wide variety of significant business, economic, regulatory and competitive risks and uncertainties that could cause actual results to differ materially from those contained in the financial, operational, industry and market projections, estimates and targets, including assumptions, risks and uncertainties described in “Cautionary Note Regarding Forward-Looking Statements” above. These projections are speculative by their nature and, accordingly, are subject to significant risk of not being actually realized by the Company. Projected results of the Company for 2025 are particularly speculative and subject to change. Actual results may vary materially from the current projections, including for reasons beyond the Company’s control. The projections are based on current expectations and available information as of the date of this release. The Company undertakes no duty to publicly update these projections except as required by law.

    Drilling Locations

    The Company has estimated its drilling locations based on well spacing assumptions and upon the evaluation of its drilling results and those of other operators in its area, combined with its interpretation of available geologic and engineering data. The drilling locations actually drilled on the Company’s properties will depend on the availability of capital, regulatory approvals, commodity prices, costs, actual drilling results and other factors. Any drilling activities conducted on these identified locations may not be successful and may not result in additional proved reserves. Further, to the extent the drilling locations are associated with acreage that expires, the Company would lose its right to develop the related locations.

    HighPeak Energy, Inc.
    Unaudited Condensed Consolidated Balance Sheet Data
    (In thousands)
        March 31,
    2025    		   December 31,
    2024    		  
    Current assets:              
    Cash and cash equivalents   $ 51,619     $ 86,649    
    Accounts receivable     78,356       85,242    
    Inventory     8,706       10,952    
    Prepaid expenses     8,301       4,587    
    Derivative instruments     5,620       7,582    
    Total current assets     152,602       195,012    
    Crude oil and natural gas properties, using the successful efforts method of accounting:              
    Proved properties     4,140,881       3,959,545    
    Unproved properties     71,359       70,868    
    Accumulated depletion, depreciation and amortization     (1,293,949 )     (1,184,684 )  
    Total crude oil and natural gas properties, net     2,918,291       2,845,729    
    Other property and equipment, net     3,141       3,201    
    Other noncurrent assets     19,047       19,346    
    Total assets   $ 3,093,081     $ 3,063,288    
                   
    Current liabilities:              
    Current portion of long-term debt, net   $ 120,000     $ 120,000    
    Accounts payable – trade     66,473       74,011    
    Accrued capital expenditures     53,240       35,170    
    Revenues and royalties payable     27,993       26,838    
    Other accrued liabilities     22,065       22,196    
    Derivative instruments     8,275       5,380    
    Operating leases     821       719    
    Advances from joint interest owners     —       316    
    Total current liabilities     298,867       284,630    
    Noncurrent liabilities:              
    Long-term debt, net     902,844       928,384    
    Deferred income taxes     242,337       232,398    
    Asset retirement obligations     15,058       14,750    
    Operating leases     581       670    
    Commitments and contingencies              
                   
    Stockholders’ equity              
    Common stock     13       13    
    Additional paid-in capital     1,166,786       1,166,609    
    Retained earnings     466,595       435,834    
    Total stockholders’ equity     1,633,394       1,602,456    
    Total liabilities and stockholders’ equity   $ 3,093,081     $ 3,063,288    
     
    HighPeak Energy, Inc.
    Unaudited Condensed Consolidated Statements of Operations
    (in thousands)
        Quarter Ended March 31,
    		  
        2025   2024
    		  
    Operating revenues:            
    Crude oil sales   $ 246,424     $ 282,369    
    NGL and natural gas sales     11,024       5,395    
    Total operating revenues     257,448       287,764    
    Operating costs and expenses:            
    Crude oil and natural gas production     35,562       30,271    
    Production and ad valorem taxes     15,152       14,402    
    Exploration and abandonments     264       498    
    Depletion, depreciation and amortization     109,325       130,850    
    Accretion of discount     244       239    
    General and administrative     6,345       4,685    
    Stock-based compensation     177       3,798    
    Total operating costs and expenses     167,069       184,743    
    Other expense     —       1    
    Income from operations     90,379       103,020    
    Interest income     810       2,392    
    Interest expense     (36,988 )     (43,634 )  
    Loss on derivative instruments, net     (7,927 )     (53,043 )  
    Income before income taxes     46,274       8,735    
    Provision for income taxes     9,939       2,297    
    Net income   $ 36,335     $ 6,438    
                 
    Earnings per share:            
    Basic net income   $ 0.26     $ 0.05    
    Diluted net income   $ 0.26     $ 0.05    
                 
    Weighted average shares outstanding:            
    Basic     123,913       125,696    
    Diluted     127,213       129,641    
                 
    Dividends declared per share   $ 0.04     $ 0.04    
     
    HighPeak Energy, Inc.
    Unaudited Condensed Consolidated Statements of Cash Flows
    (in thousands)
        Quarter Ended March 31,
    		  
        2025
    		   2024
    		  
    CASH FLOWS FROM OPERATING ACTIVITIES:            
    Net income   $ 36,335     $ 6,438    
    Adjustments to reconcile net income to net cash provided by operations:            
    Provision for deferred income taxes     9,939       1,688    
    Loss on derivative instruments     7,927       53,043    
    Cash paid on settlement of derivative instruments     (3,071 )     (5,148 )  
    Amortization of debt issuance costs     2,034       2,053    
    Amortization of discounts on long-term debt     2,426       2,453    
    Stock-based compensation expense     177       3,798    
    Accretion expense     244       239    
    Depletion, depreciation and amortization     109,325       130,850    
    Exploration and abandonment expense     4       274    
    Changes in operating assets and liabilities:            
    Accounts receivable     6,886       (14,414 )  
    Prepaid expenses, inventory and other assets     (1,314 )     (4,722 )  
    Accounts payable, accrued liabilities and other current liabilities     (13,860 )     (5,113 )  
    Net cash provided by operating activities     157,052       171,439    
    CASH FLOWS FROM INVESTING ACTIVITIES:            
    Additions to crude oil and natural gas properties     (179,819 )     (147,698 )  
    Changes in working capital associated with crude oil and natural gas property additions     25,172       1,705    
    Acquisitions of crude oil and natural gas properties     (2,517 )     (2,171 )  
    Proceeds from sales of properties     570       —    
    Other property additions     —       (59 )  
    Net cash used in investing activities     (156,594 )     (148,223 )  
    CASH FLOWS FROM FINANCING ACTIVITIES:            
    Repayments under Term Loan Credit Agreement     (120,000 )     (30,000 )  
    Dividends paid     (4,957 )     (5,050 )  
    Dividend equivalents paid     (531 )     (530 )  
    Repurchased shares under buyback program     —       (8,764 )  
    Debt issuance costs     —       (7 )  
    Net cash used in financing activities     (35,488 )     (44,351 )  
    Net decrease in cash and cash equivalents     (35,030 )     (21,135 )  
    Cash and cash equivalents, beginning of period     86,649       194,515    
    Cash and cash equivalents, end of period   $ 51,619     $ 173,380    
     
    HighPeak Energy, Inc.
    Unaudited Summary Operating Highlights
        Quarter Ended March 31,  
        2025   2024  
    Average Daily Sales Volumes:              
    Crude oil (Bbls)     38,222       39,959    
    NGLs (Bbls)     7,724       5,147    
    Natural gas (Mcf)     43,096       27,733    
    Total (Boe)     53,128       49,729    
                   
    Average Realized Prices (excluding effects of derivatives):              
    Crude oil per Bbl   $ 71.64     $ 77.65    
    NGL per Bbl   $ 24.21     $ 24.94    
    Natural gas per Mcf   $ 2.34     $ 1.33    
    Total per Boe   $ 53.84     $ 63.59    
                   
    Margin Data ($ per Boe):              
    Average price, excluding effects of derivatives   $ 53.84     $ 63.59    
    Lease operating expenses     (6.61 )     (6.30 )  
    Expense workovers     (0.83 )     (0.39 )  
    Production and ad valorem taxes     (3.17 )     (3.18 )  
    General and administrative expenses     (1.33 )     (1.04 )  
        $ 41.90     $ 52.68    
     
    HighPeak Energy, Inc.
    Unaudited Earnings Per Share Details
        Quarter Ended March 31,  
        2025   2024  
    Net income as reported   $ 36,335     $ 6,438    
    Participating basic earnings     (3,542 )     (605 )  
    Basic earnings attributable to common shareholders     32,793       5,833    
    Reallocation of participating earnings     47       1    
    Diluted net income attributable to common shareholders   $ 32,840     $ 5,834    
                   
    Basic weighted average shares outstanding     123,913       125,696    
    Dilutive warrants and unvested stock options     1,146       1,786    
    Dilutive unvested restricted stock     2,154       2,159    
    Diluted weighted average shares outstanding     127,213       129,641    
                   
    Net income per share attributable to common shareholders:              
    Basic   $ 0.26     $ 0.05    
    Diluted   $ 0.26     $ 0.05    
     
    HighPeak Energy, Inc.
    Unaudited Reconciliation of Net Income to EBITDAX, Discretionary Cash Flow and Net Cash Provided by Operations
    (in thousands)    		  
        Quarter Ended March 31,  
        2025   2024  
    Net income   $ 36,335     $ 6,438    
    Interest expense     36,988       43,634    
    Interest income     (810 )     (2,392 )  
    Income tax expense     9,939       2,297    
    Depletion, depreciation and amortization     109,325       130,850    
    Accretion of discount     244       239    
    Exploration and abandonment expense     264       498    
    Stock based compensation     177       3,798    
    Derivative related noncash activity     4,856       47,895    
    Other expense     —       1    
    EBITDAX     197,318       233,258    
    Cash interest expense     (32,528 )     (39,128 )  
    Other (a)     550       1,558    
    Discretionary cash flow     165,340       195,688    
    Changes in operating assets and liabilities     (8,288 )     (24,249 )  
    Net cash provided by operating activities   $ 157,052     $ 171,439    
    (a)     Includes interest income net of current tax expense, other expense and operating portion of exploration and abandonment expenses.
     
    HighPeak Energy, Inc.
    Unaudited Reconciliation of Net Cash Provided by Operations and Free Cash Flow
    (in thousands)
        Quarter Ended March 31,  
        2025   2024  
    Net cash provided by operating activities   $ 157,052     $ 171,439    
    Add back: net change in operating assets and liabilities     8,288       24,249    
    Operating cash flow before working capital changes     165,340       195,688    
    Additions to crude oil and natural gas properties     (179,819 )     (147,698 )  
    Changes in working capital associated with crude oil and natural gas property additions     25,172       1,705    
    Free cash flow   $ 10,693     $ 49,695    
     
    HighPeak Energy, Inc.
    Unaudited Reconciliation of Net Income to Adjusted Net Income
    (in thousands, except per share data)
        Quarter Ended
    March 31, 2025    		  
        Amounts   Amounts per Diluted Share  
    Net income   $ 36,335     $ 0.26    
    Derivative loss, net     7,927       0.06    
    Stock-based compensation     177       0.00    
    Income tax adjustment for above items *     (1,741 )     (0.01 )  
                       
    Adjusted net income   $ 42,698     $ 0.31    
                   
    * Assuming 21% statutory tax rate              
     

    Investor Contact:

    Ryan Hightower
    Vice President, Business Development
    817.850.9204
    rhightower@highpeakenergy.com

    Source: HighPeak Energy, Inc.

    The MIL Network –

  • MIL-OSI: MidCap Financial Investment Corporation Reports Financial Results for the Quarter Ended March 31, 2025

    Source: GlobeNewswire (MIL-OSI)

    Results for the Quarter Ended March 31, 2025 and Other Recent Highlights:

    • Net investment income per share for the quarter was $0.37
    • Net asset value per share as of the end of the quarter was $14.93, compared to $14.98 as of December 31, 2024, a decrease of 0.3%
    • New investment commitments made during the quarter totaled $376 million(1)
    • Gross fundings, excluding revolver fundings(2), totaled $357 million for the quarter
    • Net fundings, including revolvers(2), totaled $170 million for the quarter
    • Net leverage(3)was 1.31x as of March 31, 2025
    • Repurchased 476,656 shares of common stock at a weighted average price per share of $12.75, inclusive of commissions, for an aggregate cost of $6.1 million during the quarter
    • Completed Collateralized Loan Obligation (“CLO”) transaction, MFIC Bethesda CLO 2 LLC, a $529.6 million CLO secured by middle market loans in February 2025
    • On May 7, 2025, the Board of Directors (the “Board”) declared a dividend of $0.38 per share payable on June 26, 2025 to stockholders of record as of June 10, 2025(4)

    NEW YORK, May 12, 2025 (GLOBE NEWSWIRE) — MidCap Financial Investment Corporation (NASDAQ: MFIC) or the “Company,” today announced financial results for the quarter ended March 31, 2025. The Company’s net investment income was $0.37 per share for the quarter ended March 31, 2025, compared to $0.40 per share for the quarter ended December 31, 2024. The Company’s net asset value (“NAV”) was $14.93 per share as of March 31, 2025, compared to $14.98 as of December 31, 2024.

    On May 7, 2025, the Board declared a dividend of $0.38 per share payable on June 26, 2025 to stockholders of record as of June 10, 2025.

    Mr. Tanner Powell, the Company’s Chief Executive Officer, stated, “We reported solid first quarter results including a healthy level of earnings, a reduction in non-accruals, and strong portfolio growth. We continued to deploy the investment capacity generated from our recent mergers into assets originated by MidCap Financial, although this was partially offset by ongoing sales and repayments of non-directly originated assets acquired through the mergers. Additionally, we repurchased some stock below NAV during the quarter.” Mr. Powell continued, “Looking ahead, despite the uncertainty surrounding the duration and trajectory of current market volatility, we believe the current environment may present opportunities that MidCap Financial and MFIC are well-equipped to capitalize on.”

    ___________________
    (1) Commitments made for the direct origination portfolio.
    (2) During the quarter ended March 31, 2025, direct origination revolver fundings totaled $33 million, direct origination revolver repayments totaled $30 million.
    (3) The Company’s net leverage ratio is defined as debt outstanding plus payable for investments purchased, less receivable for investments sold, less cash and cash equivalents, less foreign currencies, divided by net assets.
    (4) There can be no assurances that the Board will continue to declare a base dividend of $0.38 per share.

    FINANCIAL HIGHLIGHTS

    ($ in billions, except per share data) March 31,
    2025    		     December 31,
    2024    		     September 30,
    2024    		     June 30,
    2024    		     March 31,
    2024    		  
    Total assets $ 3.36     $ 3.19     $ 3.22     $ 2.55     $ 2.45  
    Investment portfolio (fair value) $ 3.19     $ 3.01     $ 3.03     $ 2.44     $ 2.35  
    Debt outstanding $ 1.94     $ 1.75     $ 1.77     $ 1.51     $ 1.41  
    Net assets $ 1.39     $ 1.40     $ 1.42     $ 1.00     $ 1.01  
    Net asset value per share $ 14.93     $ 14.98     $ 15.10     $ 15.38     $ 15.42  
                                           
    Debt-to-equity ratio   1.39 x       1.25 x       1.25 x       1.51 x       1.40 x  
    Net leverage ratio (1)   1.31 x       1.16 x       1.16 x       1.45 x       1.35 x  

    ___________________
    (1) The Company’s net leverage ratio is defined as debt outstanding plus payable for investments purchased, less receivable for investments sold, less cash and cash equivalents, less foreign currencies, divided by net assets.

    PORTFOLIO AND INVESTMENT ACTIVITY

        Three Months Ended March 31,  
    (in millions)*   2025     2024  
    Investments made in portfolio companies   $ 391.9     $ 152.8  
    Investments sold     (43.9 )      —  
    Net activity before repaid investments     348.0       152.8  
    Investments repaid     177.6       (136.9 )
    Net investment activity   $ 170.4     $ 15.9  
                     
    Portfolio companies, at beginning of period     233       152  
    Number of investments in new portfolio companies     20       7  
    Number of exited companies     (13 )     (5 )
    Portfolio companies at end of period     240       154  
                     
    Number of investments in existing portfolio companies     78       49  

    ___________________
    * Totals may not foot due to rounding.

    OPERATING RESULTS

        Three Months Ended March 31,  
    (in millions)*   2025     2024  
    Net investment income   $ 34.3     $ 28.5  
    Net realized and change in unrealized gains (losses)     (4.0 )     (3.1 )
    Net increase in net assets resulting from operations   $ 30.3     $ 25.5  
                     
    (per share)* (1)                
    Net investment income on per average share basis   $ 0.37     $ 0.44  
    Net realized and change in unrealized gain (loss) per share     (0.05 )     (0.05 )
    Earnings per share — basic   $ 0.32     $ 0.39  

    ___________________
    * Totals may not foot due to rounding.

    (1) Based on the weighted average number of shares outstanding for the period presented.

    SHARE REPURCHASE PROGRAM *

    During the three months ended March 31, 2025, the Company repurchased 476,656 shares at a weighted average price per share of $12.75, inclusive of commissions, for a total cost of $6.1 million. This represents a discount of approximately 14.72% of the average net asset value per share for the three months ended March 31, 2025.

    Since the inception of the share repurchase program and through May 12, 2025, the Company repurchased 16,069,776 shares at a weighted average price per share of $15.82, inclusive of commissions, for a total cost of $254.2 million, leaving a maximum of $20.8 million available for future purchases under the current Board authorization of $275 million.

    * Share figures have been adjusted for the 1-for-3 reverse stock split which was completed after market close on November 30, 2018.

    LIQUIDITY

    As of March 31, 2025, the Company’s outstanding debt obligations, excluding deferred financing cost and debt discount of $6.7 million, totaled $1.942 billion which was comprised of $125 million of Senior Unsecured Notes (the “2026 Notes”) which will mature on July 16, 2026, $80 million of Senior Unsecured Notes (the “2028 Notes”) which will mature on December 15, 2028, $232 million outstanding Class A-1 Notes in MFIC Bethesda CLO 1 LLC, $399 million outstanding secured debt in MFIC Bethesda CLO 2 LLC, and $1,106 million outstanding under the Company’s multi-currency revolving credit facility (the “Facility”). As of March 31, 2025, $6 million in standby letters of credit were issued through the Facility. The available remaining capacity under the Facility was $548 million as of March 31, 2025, which is subject to compliance with a borrowing base that applies different advance rates to different types of assets in the Company’s portfolio.

    CONFERENCE CALL / WEBCAST AT 8:30 AM EDT ON MAY 13, 2025

    The Company will host a conference call on Tuesday, May 13, 2025, at 8:30 a.m. Eastern Time. All interested parties are welcome to participate in the conference call by dialing (800) 225-9448 approximately 5-10 minutes prior to the call; international callers should dial (203) 518-9708. Participants should reference either MidCap Financial Investment Corporation Earnings or Conference ID: MFIC0513 when prompted. A simultaneous webcast of the conference call will be available to the public on a listen-only basis and can be accessed through the Shareholders section of the Company’s website under Events at www.midcapfinancialic.com. Following the call, you may access a replay of the event either telephonically or via audio webcast. The telephonic replay will be available approximately two hours after the live call and through June 3, 2025, by dialing (800) 727-1367; international callers should dial (402) 220-2669. A replay of the audio webcast will also be available later that same day. To access the audio webcast please visit the Shareholders section of the Company’s website under Events in the Shareholders section of our website at www.midcapfinancialic.com.

    SUPPLEMENTAL INFORMATION

    The Company provides a supplemental information package to offer more transparency into its financial results and make its reporting more informative and easier to follow. The supplemental package is available in the Shareholders section of the Company’s website under Presentations at www.midcapfinancialic.com.

    Our portfolio composition and weighted average yields as of March 31, 2025, December 31, 2024, September 30, 2024, June 30, 2024, and March 31, 2024 were as follows:

      March 31,
    2025    		     December 31,
    2024    		 September 30,
    2024    		   June 30,
    2024    		   March 31,
    2024
    Portfolio composition, at fair value:                            
    First lien secured debt   93%     92%     91%     90%     90%
    Second lien secured debt   0%     1%     1%     1%     1%
    Total secured debt   93%     93%     92%     91%     91%
    Unsecured debt   0%     0%     —%     —%     —%
    Structured products and other   1%     1%     2%     1%     1%
    Preferred equity   1%     1%     1%     1%     1%
    Common equity/interests and warrants   5%     5%     5%     7%     7%
    Weighted average yields, at amortized cost (1):                            
    First lien secured debt (2)   10.5%     10.8%     11.1%     11.9%     12.0%
    Second lien secured debt (2)   13.8%     14.4%     14.0%     14.1%     14.1%
    Total secured debt (2)   10.5%     10.8%     11.1%     11.9%     12.0%
    Unsecured debt portfolio (2)   9.5%     9.5%     9.5%     —%     —%
    Total debt portfolio (2)   10.5%     10.8%     11.1%     11.9%     12.0%
    Total portfolio (3)   9.4%     9.5%     9.6%     9.9%     10.0%
    Interest rate type, at fair value (4):                            
    Fixed rate amount $ 0.0 billion   $ 0.0 billion   $ 0.0 billion   $ 0.0 billion   $ 0.0 billion
    Floating rate amount $ 2.9 billion   $ 2.7 billion   $ 2.7 billion   $ 2.1 billion   $ 2.0 billion
    Fixed rate, as percentage of total   1%     1%     1%     0%     0%
    Floating rate, as percentage of total   99%     99%     99%     100%     100%
    Interest rate type, at amortized cost (4):                            
    Fixed rate amount $ 0.0 billion   $ 0.0 billion   $ 0.0 billion   $ 0.0 billion   $ 0.0 billion
    Floating rate amount $ 2.9 billion   $ 2.7 billion   $ 2.7 billion   $ 2.1 billion   $ 2.0 billion
    Fixed rate, as percentage of total   1%     1%     1%     0%     0%
    Floating rate, as percentage of total   99%     99%     99%     100%     100%

    (1)  An investor’s yield may be lower than the portfolio yield due to sales loads and other expenses.
    (2)  Exclusive of investments on non-accrual status.
    (3)  Inclusive of all income generating investments, non-income generating investments and investments on non-accrual status.
    (4)  The interest rate type information is calculated using the Company’s corporate debt portfolio and excludes aviation and investments on non-accrual status.

     
    MIDCAP FINANCIAL INVESTMENT CORPORATION
    CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES
    (In thousands, except share and per share data)
     
        March 31, 2025     December 31, 2024  
        (Unaudited)          
    Assets                
    Investments at fair value:                
    Non-controlled/non-affiliated investments (cost — $2,855,490 and $2,700,957, respectively)   $ 2,756,760     $ 2,605,329  
    Non-controlled/affiliated investments (cost — $176,063 and $142,686, respectively)     113,290       84,334  
    Controlled investments (cost — $326,224 and $333,754, respectively)     318,571       324,753  
    Cash and cash equivalents     83,703       74,357  
    Foreign currencies (cost — $1,367 and $1,487, respectively)     1,330       1,429  
    Receivable for investments sold     32,151       57,195  
    Interest receivable     25,346       19,289  
    Dividends receivable     459       709  
    Deferred financing costs     22,267       23,555  
    Unrealized appreciation on foreign currency forward contracts     33       —  
    Prepaid expenses and other assets     1,789       —  
    Total Assets   $ 3,355,699     $ 3,190,950  
                     
    Liabilities                
    Debt   $ 1,935,242     $ 1,751,621  
    Payable for investments purchased     2,091       4,190  
    Management fees payable     6,061       6,247  
    Performance-based incentive fees payable     6,433       5,336  
    Interest payable     9,403       12,813  
    Accrued administrative services expense     —       60  
    Unrealized depreciation on foreign currency forward contracts     —       —  
    Other liabilities and accrued expenses     3,209       6,037  
    Total Liabilities   $ 1,962,439     $ 1,786,304  
    Commitments and contingencies (Note 9)                
    Net Assets   $ 1,393,260     $ 1,404,646  
                     
    Net Assets                
    Common stock, $0.001 par value (130,000,000 shares authorized; 93,303,622 and 93,780,278 shares issued and outstanding, respectively)   $ 94     $ 94  
    Capital in excess of par value     2,652,015       2,658,090  
    Accumulated under-distributed (over-distributed) earnings     (1,258,849 )     (1,253,538 )
    Net Assets   $ 1,393,260     $ 1,404,646  
                     
    Net Asset Value Per Share   $ 14.93     $ 14.98  
     
    MIDCAP FINANCIAL INVESTMENT CORPORATION
    CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
    (In thousands, except per share data)
     
        Three Months Ended March 31,  
        2025     2024  
    Investment Income                
    Non-controlled/non-affiliated investments:                
    Interest income (excluding Payment-in-kind (“PIK”) interest income)   $ 69,302     $ 59,996  
    Dividend income     —       12  
    PIK interest income     3,170       1,995  
    Other income     324       1,708  
    Non-controlled/affiliated investments:                
    Interest income (excluding PIK interest income)     1,229       299  
    Dividend income     240       —  
    PIK interest income     351       34  
    Other income     —       —  
    Controlled investments:                
    Interest income (excluding PIK interest income)     4,072       4,287  
    Dividend income     —       —  
    PIK interest income     —       —  
    Other income     10       —  
    Total Investment Income   $ 78,698     $ 68,331  
    Expenses                
    Management fees   $ 6,061     $ 4,386  
    Performance-based incentive fees     6,433       6,038  
    Interest and other debt expenses     30,464       26,179  
    Administrative services expense     1,016       1,223  
    Other general and administrative expenses     1,248       2,129  
    Total expenses     45,222       39,955  
    Management and performance-based incentive fees waived     —       —  
    Performance-based incentive fee offset     —       —  
    Expense reimbursements     (806 )     (168 )
    Net Expenses   $ 44,416     $ 39,787  
    Net Investment Income   $ 34,282     $ 28,544  
    Net Realized and Change in Unrealized Gains (Losses)                
    Net realized gains (losses):                
    Non-controlled/non-affiliated investments   $ 3,588     $ (7,470 )
    Non-controlled/affiliated investments     (188 )     —  
    Controlled investments     —       —  
    Foreign currency transactions     (313 )     (618 )
    Net realized gains (losses)     3,087       (8,088 )
    Net change in unrealized gains (losses):                
    Non-controlled/non-affiliated investments     (6,088 )     4,983  
    Non-controlled/affiliated investments     (1,509 )     (2,341 )
    Controlled investments     1,348       1,613  
    Foreign currency forward contracts     24       —  
    Foreign currency translations     (814 )     778  
    Net change in unrealized gains (losses)     (7,039 )     5,033  
    Net Realized and Change in Unrealized Gains (Losses)   $ (3,952 )   $ (3,055 )
    Net Increase (Decrease) in Net Assets Resulting from Operations   $ 30,330     $ 25,489  
    Earnings (Loss) Per Share — Basic   $ 0.32     $ 0.39  
                     

    Important Information

    Investors are advised to carefully consider the investment objective, risks, charges and expenses of the Company before investing. The prospectus dated April 12, 2023, which has been filed with the Securities and Exchange Commission (“SEC”), contains this and other information about the Company and should be read carefully before investing. An effective shelf registration statement relating to certain securities of the Company is on file with the SEC. Any offering may be made only by means of a prospectus and any accompanying prospectus supplement. Before you invest, you should read the base prospectus in that registration statement, the prospectus and any documents incorporated by reference therein, which the issuer has filed with the SEC, for more complete information about the Company and an offering. You may obtain these documents for free by visiting EDGAR on the SEC website at www.sec.gov.

    The information in the prospectus and in this announcement is not complete and may be changed. This communication shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction.

    Past performance is not indicative of, or a guarantee of, future performance. The performance and certain other portfolio information quoted herein represents information as of dates noted herein. Nothing herein shall be relied upon as a representation as to the future performance or portfolio holdings of the Company. Investment return and principal value of an investment will fluctuate, and shares, when sold, may be worth more or less than their original cost. The Company’s performance is subject to change since the end of the period noted in this report and may be lower or higher than the performance data shown herein.

    About MidCap Financial Investment Corporation

    MidCap Financial Investment Corporation (NASDAQ: MFIC) is a closed-end, externally managed, diversified management investment company that has elected to be treated as a business development company (“BDC”) under the Investment Company Act of 1940 (the “1940 Act”). For tax purposes, the Company has elected to be treated as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). The Company is externally managed by the Investment Adviser, an affiliate of Apollo Global Management, Inc. and its consolidated subsidiaries (“Apollo”), a high-growth global alternative asset manager. The Company’s investment objective is to generate current income and, to a lesser extent, long-term capital appreciation. The Company primarily invests in directly originated and privately negotiated first lien senior secured loans to privately held U.S. middle-market companies, which the Company generally defines as companies with less than $75 million in earnings before interest, taxes, depreciation and amortization, as may be adjusted for market disruptions, mergers and acquisitions-related charges and synergies, and other items. To a lesser extent, the Company may invest in other types of securities including, first lien unitranche, second lien senior secured, unsecured, subordinated, and mezzanine loans, and equities in both private and public middle market companies. For more information, please visit www.midcapfinancialic.com

    Forward-Looking Statements

    Some of the statements in this press release constitute forward-looking statements because they relate to future events, future performance or financial condition. The forward-looking statements may include statements as to: future operating results of MFIC and distribution projections; business prospects of MFIC, and the prospects of its portfolio companies, if applicable; and the impact of the investments that MFIC expects to make. In addition, words such as “anticipate,” “believe,” “expect,” “seek,” “plan,” “should,” “estimate,” “project” and “intend” indicate forward-looking statements, although not all forward-looking statements include these words. The forward-looking statements contained in this press release involve risks and uncertainties. Certain factors could cause actual results and conditions to differ materially from those projected, including the uncertainties associated with: future changes in laws or regulations (including the interpretation of these laws and regulations by regulatory authorities); changes in general economic conditions, including the impact of supply chain disruptions, tariffs and trade disputes with other countries, or changes in financial markets, and the risk of recession; changes in the interest rate environment and levels of general interest rates and the impact of inflation; the return on equity; the yield on investments; the ability to borrow to finance assets; new strategic initiatives; the ability to reposition the investment portfolio; the market outlook; future investment activity; and risks associated with changes in business conditions and the general economy. MFIC has based the forward-looking statements included in this press release on information available to it on the date hereof, and assumes no obligation to update any such forward-looking statements. Although MFIC undertakes no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that they may make directly to you or through reports that MFIC in the future may file with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.

    Contact

    Elizabeth Besen
    Investor Relations Manager
    MidCap Financial Investment Corporation
    212.822.0625
    ebesen@apollo.com

    The MIL Network –

  • MIL-OSI: Phunware Reports First Quarter 2025 Financial Results

    Source: GlobeNewswire (MIL-OSI)

    New Customer Launches Drive 40% Revenue Growth for Software Subscriptions and Services

    Strong Balance Sheet of $109.7 Million Powering R&D Activities in AI-Driven Customer Platform and Corporate Initiatives

    AUSTIN, Texas, May 12, 2025 (GLOBE NEWSWIRE) — Phunware, Inc. (“Phunware” or the “Company”) (NASDAQ: PHUN), a leader in enterprise cloud solutions for mobile applications, today reported financial results for the first quarter ended March 31, 2025.

    Financial Highlights

    • Software subscriptions and services revenue increased 40% to $0.6 million in Q1 2025, as compared to Q1 2024.
    • Q1 2025 software and subscription bookings totaled $0.4 million.
    • Net loss was $3.7 million for the three months ended March 31, 2025, as compared to $2.3 million in the previous year period.
      • Primary driver for net loss increase was $1.2 million one-time legal expenses related to the Wild Basin litigation bench trial that concluded in Q1 2025; a decision is expected in Q3 2025.
    • Net loss per share improved to ($0.18) per share in Q1 2025, as compared to ($0.33) per share in Q1 2024.
    • Net cash used in operations decreased to $3.3 million for the three months ended March 31, 2025, compared to $5.5 million for the previous year period.
    • Cash and cash equivalents as of March 31, 2025, was $109.7 million.

    Recent Business Highlights

    • During Q1 2025, added three (3) new customers in the hospitality vertical. Momentum carried into Q2, with a new $0.5 million booking for a multi-location health care facility.
    • Appointed Quyen Du to the Board of Directors, a 25-year corporate strategy and development executive with Fortune 500 consumer brands.
      • Her appointment satisfies Nasdaq Stock Market LLC (“Nasdaq”) continued listing requirements for audit committee service.
    • Attended investor and industry conferences including the 37th Annual ROTH Conference and upcoming 2025 Hospitality Industry Technology Exposition and Conference (HITEC®) June 16–19 in Indianapolis, Indiana.

    Management Commentary

    “The first quarter of 2025 was underscored by new customers and bookings and continued focus on our AI-related initiatives,” said interim CEO Stephen Chen. “First quarter revenues of $0.7 million and gross margin of 52% were driven by a 40% increase in Mobile software subscriptions and services with delivered customer projects. With an existing hospitality customer, we launched an integrated conference solution including dynamic wayfinding, mobile engagement messaging, events scheduling, and content management. With a well-known resort and entertainment venue customer, we launched our hospitality industry solution application to enhance guest experiences.”

    “Software bookings for the first quarter were $0.4 million and we continue to accelerate our pipeline while simultaneously shortening the sales cycle. With three new customers in the hospitality vertical during the first quarter, and a $0.5 million multi-location health care facility booking in the second quarter, we believe customer momentum continues to accelerate.”

    “We were honored to appoint Quyen Du to our Board of Directors in February. Ms. Du brings 25 years’ experience in strategy and corporate development as an executive at Fortune 500 consumer brands. She has an impressive record of guiding strategic growth and will add tremendous expertise to our Board for Phunware investments, M&A and new business development strategies. We are happy to announce that Ms. Du was elected to three-year term at our most recent stockholders’ meeting.”

    “While we’ve seen some softness in the ad market, we are focused on new opportunities in that market and investing in marketing and research and development in generative and agentic AI initiatives, among others. We remain committed to reinforcing our core business units, identifying high-impact investment and M&A opportunities, driving operational excellence, and aligning our cost structure for long-term scalability. We are also committed to enhancing our team with experienced sales, marketing, and technology professionals to amplify market visibility and accelerate customer acquisition.”

    “Looking ahead, we are developing additional features and functionalities for our existing products, including AI-related features such as AI Personal Concierge for hospitality customers and their guests and Intelligent Reporting for large real property owners. We expect to launch the initial AI Personal Concierge product in mid-2025. With our leadership position in mobile app development, combined with compelling new technology improvements and AI integration, we are executing on our strategic vision to deliver our solutions globally. I look forward to additional announcements and milestones in the months ahead,” concluded Chen.

    Note about Non-GAAP Financial Measures

    A non-GAAP financial measure is a numerical measure of a company’s performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with accounting principles generally accepted in the United States of America, or GAAP. Non-GAAP measures are not in accordance with, nor are they a substitute for, GAAP measures. Other companies may use different non-GAAP measures and presentation of results.

    In addition to financial results presented in accordance with GAAP, this press release presents adjusted EBITDA, which is a non-GAAP measure. Adjusted EBITDA is determined by taking net loss and adding interest expense (income), income tax expense, depreciation, and further adjusted for non-cash impairment, valuation adjustments and stock-based compensation expense. The company believes that this non-GAAP measure, viewed in addition to and not in lieu of net loss, provides additional information to investors by providing a more focused measure of operating results. This metric is an integral part of the Company’s internal reporting to evaluate its operations and the performance of senior management. A reconciliation of adjusted EBITDA to net loss, the most comparable GAAP measure, is available in the accompanying financial tables below. The non-GAAP measure presented herein may not be comparable to similarly titled measures presented by other companies.

           
    US-GAAP NET LOSS TO ADJUSTED EBITDA RECONCILIATION
    (Unaudited)
           
        Three Months Ended March 31,  
    (in thousands)   2025     2024  
    Net loss   $ (3,723 )   $ (2,292 )
    Add back: Depreciation     4       4  
    Add back: Interest expense     9       108  
    Less: Interest income     (1,119 )     (140 )
    EBITDA     (4,829 )     (2,320 )
    Add back: Stock-based compensation     86       630  
    Less: Gain on extinguishment of debt     –       (535 )
    Adjusted EBITDA   $ (4,743 )   $ (2,225 )
                     

    About Phunware

    Phunware, Inc. (NASDAQ: PHUN) is an enterprise software company specializing in mobile app solutions with integrated intelligent capabilities. We provide businesses with the tools to create, implement, and manage custom mobile applications, analytics, digital advertising, and location-based services. Phunware is transforming mobile engagement by delivering scalable, personalized, and data-driven mobile app experiences.

    Phunware’s mission is to achieve unparalleled connectivity and monetization through the widespread adoption of Phunware mobile technologies, leveraging brands, consumers, partners, digital asset holders, and market participants. Phunware is poised to expand its software products and services audience through a new Generative AI platform which is in development, utilize and monetize its patents and other intellectual property, and renewed focus on development of a digital asset ecosystem for existing holders and new market participants.

    For more information on Phunware, please visit www.phunware.com. To better understand and leverage generative AI and Phunware’s mobile app technologies, visit ai.phunware.com.

    Safe Harbor / Forward-Looking Statements

    This press release includes forward-looking statements. All statements other than statements of historical facts contained in this press release, including statements regarding our future results of operations and financial position, business strategy and plans, and our objectives for future operations, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “will,” and similar expressions are intended to identify forward-looking statements. For example, Phunware is using forward-looking statements when it discusses the adoption and impact of emerging technologies and their use across mobile engagement platforms. The forward-looking statements contained in this press release are based on our current expectations and beliefs concerning future developments and their potential effects on us. These forward-looking statements involve risks, uncertainties, and other assumptions that may cause actual results to differ materially from those expressed or implied. These risks and uncertainties include, but are not limited to, those factors described under the heading “Risk Factors” in our filings with the SEC. We undertake no obligation to update any forward-looking statements.

    By their nature, forward-looking statements involve risks and uncertainties. We caution you that forward-looking statements are not guarantees of future performance and that our actual results may differ materially from those expressed or implied by these forward-looking statements.

    Investor Relations Contact:
    Chris Tyson, Executive Vice President
    MZ Group – MZ North America
    949-491-8235
    PHUN@mzgroup.us
    www.mzgroup.us

    Phunware Media Contact:
    Joe McGurk, Managing Director
    917-259-6895
    PHUN@mzgroup.us

               
    Phunware, Inc.
    Consolidated Balance Sheets
    (In thousands, except share and per share data)
               
      March 31,     December 31,  
      2025     2024  
    Assets: (Unaudited)        
    Current assets:          
    Cash and cash equivalents $ 109,719     $ 112,974  
    Accounts receivable, net of allowance for credit losses of $264 and $166 as of March 31, 2025 and December 31, 2024, respectively   697       276  
    Digital currencies   82       103  
    Prepaid expenses and other current assets   588       406  
    Total current assets   111,086       113,759  
    Non-current assets:          
    Property and equipment, net   20       24  
    Right-of-use asset   770       840  
    Other assets   158       158  
    Total non-current assets   948       1,022  
    Total assets $ 112,034     $ 114,781  
               
    Liabilities and stockholders’ equity          
    Current liabilities:          
    Accounts payable $ 4,073     $ 3,754  
    Accrued expenses   492       148  
    Deferred revenue   1,124       1,034  
    Lease liability   320       313  
    PhunCoin subscription payable   1,202       1,202  
    Total current liabilities   7,211       6,451  
    Deferred revenue   660       528  
    Lease liability   537       619  
    Total noncurrent liabilities   1,197       1,147  
    Total liabilities   8,408       7,598  
    Commitments and contingencies (See Note 7)   –       –  
    Stockholders’ equity          
    Common stock, $0.0001 par value, 1,000,000,000 shares authorized; 20,180,875 shares issued and 20,170,745 share outstanding as of March 31, 2025 and 20,166,665 shares issued and 20,156,535 shares outstanding as of December 31, 2024   2       2  
    Treasury Stock   (502 )     (502 )
    Additional paid-in capital   421,169       421,003  
    Accumulated deficit   (317,043 )     (313,320 )
    Total stockholders’ equity   103,626       107,183  
    Total liabilities and stockholders’ equity $ 112,034     $ 114,781  
                   
    Phunware, Inc.
    Consolidated Statements of Operations and Comprehensive Loss
    (In thousands, except share and per share information)
         
      Three Months Ended  
      March 31,  
      2025     2024  
               
    Net revenues $ 688     $ 921  
    Cost of revenues   329       397  
    Gross profit   359       524  
    Operating expenses:          
    Sales and marketing   896       443  
    General and administrative   3,464       2,471  
    Research and development   813       484  
    Total operating expenses   5,173       3,398  
    Operating loss   (4,814 )     (2,874 )
    Other income (expense):          
    Interest expense   (9 )     (108 )
    Interest income   1,119       140  
    Gain on extinguishment of debt   –       535  
    Other (expense) income, net   (19 )     15  
    Total other income   1,091       582  
    Loss before taxes   (3,723 )     (2,292 )
    Income tax expense   –       –  
    Net loss   (3,723 )     (2,292 )
    Net loss per share, basic and diluted $ (0.18 )   $ (0.33 )
    Weighted-average shares used to compute net loss per share, basic & diluted   20,169,640       6,864,226  
                   
    Phunware, Inc.
    Consolidated Statements of Cash Flows
    (In thousands)
         
      Three Months Ended  
      March 31,  
      2025     2024  
    Operating activities          
    Net loss $ (3,723 )   $ (2,292 )
    Adjustments to reconcile net loss to net cash used in operating activities:          
    Gain on extinguishment of debt   –       (535 )
    Stock-based compensation   86       630  
    Other adjustments   132       329  
    Changes in operating assets and liabilities:          
    Accounts receivable   (444 )     (82 )
    Prepaid expenses and other assets   (182 )     (11 )
    Accounts payable and accrued expenses   663       (2,893 )
    Lease liability payments   (89 )     (185 )
    Deferred revenue   222       (286 )
    Net cash used in operating activities from continued operations   (3,335 )     (5,325 )
    Net cash used in operating activities from discontinued operations   –       (205 )
    Net cash used in operating activities   (3,335 )     (5,530 )
    Investing activities          
    Net cash provided by (used in) investing activities   –       –  
    Financing activities          
    Proceeds from sales of common stock, net of issuance costs   80       23,204  
    Net cash provided by financing activities   80       23,204  
               
    Effect of exchange rate on cash   –       (41 )
    Net (decrease) increase in cash and cash equivalents   (3,255 )     17,633  
    Cash and cash equivalents at the beginning of the period   112,974       3,934  
    Cash and cash equivalents at the end of the period $ 109,719     $ 21,567  
               
               
    Supplemental disclosure of cash flow information          
    Interest paid $ 9     $ 4  
    Income taxes paid $ –     $ 26  
    Supplemental disclosures of non-cash financing activities:          
    Issuance of common stock upon conversion of the 2022 Promissory Note $ –     $ 4,505  
    Issuance of common stock for payment of bonuses and consulting fees $ –     $ 35  
                   

    The MIL Network –

  • MIL-OSI: Rapid7 Announces First Quarter 2025 Financial Results

    Source: GlobeNewswire (MIL-OSI)

    • Annualized recurring revenue (“ARR”) of $837 million, an increase of 4% year-over-year
    • Total revenue of $210 million, up 3% year-over-year; Product subscriptions revenue of $204 million, up 4% year-over-year
    • GAAP operating loss of $0.1 million; Non-GAAP operating income of $32 million
    • Net cash provided by operating activities of $30 million; Free cash flow of $25 million

    BOSTON, May 12, 2025 (GLOBE NEWSWIRE) — Rapid7, Inc. (Nasdaq: RPD), a leader in extended risk and threat detection, today announced its financial results for the first quarter 2025.

    “We had a slower start to 2025 than anticipated however we have a clear strategy and strong conviction in our long-term opportunity,” said Corey Thomas, Chairman and CEO of Rapid7. “Against a more uncertain macroeconomic environment, we are executing with increased focus and urgency—investing behind our leadership in MDR, accelerating Exposure Command adoption, and sharpening our go-to-market engine. We believe these steps position us for improved ARR in the second half of the year and beyond. At the same time, we remain committed to operational discipline and delivering strong free cash flow in 2025.”

    First Quarter 2025 Financial Results and Other Metrics

      As of March 31,
      2025
    		   2024
    		   % Change
      (dollars in thousands)
    ARR $ 837,220     $ 807,196     4 %
    Number of customers   11,685       11,462     2 %
    ARR per customer $ 71.6     $ 70.4     2 %
      Three Months Ended March 31,
      2025   2024   % Change
      (in thousands, except per share data)
    Product subscriptions revenue $ 203,935     $ 196,918     4 %
    Professional services revenue   6,318       8,183     (23 %)
    Total revenue $ 210,253     $ 205,101     3 %
               
    North America revenue $ 157,945     $ 157,340     — %
    Rest of world revenue   52,308       47,761     10 %
    Total revenue $ 210,253     $ 205,101     3 %
               
    GAAP gross profit $ 150,773     $ 144,107      
    GAAP gross margin   72 %     70 %    
    Non-GAAP gross profit $ 157,460     $ 151,112      
    Non-GAAP gross margin   75 %     74 %    
               
    GAAP (loss) income from operations $ (101 )   $ 9,716      
    GAAP operating margin   — %     5 %    
    Non-GAAP income from operations $ 32,353     $ 40,285      
    Non-GAAP operating margin   15 %     20 %    
               
    GAAP net income $ 2,105     $ 1,406      
    GAAP net income per share, basic $ 0.03       0.02      
    GAAP net income per share, diluted $ 0.03     $ 0.02      
    Non-GAAP net income $ 35,578     $ 39,388      
    Non-GAAP net income per share:          
    Basic $ 0.56     $ 0.64      
    Diluted $ 0.49     $ 0.55      
               
    Adjusted EBITDA $ 38,898     $ 46,619      
               
    Net cash provided by operating activities $ 29,757     $ 31,070      
    Free cash flow $ 24,677     $ 27,534      
                       

    For additional details on the reconciliation of non-GAAP measures and certain other business metrics to their nearest comparable GAAP measures, please refer to the accompanying financial data tables included in this press release. The prior year period reflects an immaterial correction. Refer to Note 16, Immaterial Correction of an Error, in the notes to our unaudited condensed consolidated financial statements for further information.

    Recent Business Highlights

    • In April, Rapid7 launched unified threat-informed remediation for its Command Platform, delivering effective remediation at scale via proactive exposure remediation and AI-assisted automated detection and response. In addition to these enhancements to the Command Platform, Rapid7 also launched Breach Protection Warranty, offering MTC (Managed Thread Complete) Ultimate customers up to $1,000,000 in coverage embedded directly into the service.
    • In April, Rapid7 launched Managed Detection & Response (MDR) for Enterprise, a fully managed and customizable detection and response service designed to meet the unique demands of complex, distributed enterprise environments.
    • In April, Rapid7 introduced Intelligence Hub within its Command Platform, an integrated threat intelligence solution designed to provide security teams with meaningful context and actionable insights for accelerated detection and response.
    • In March, Rapid7 announced the appointment of three new members to its Board of Directors: Wael Mohamed, Mike Burns, and Kevin Galligan. These strategic appointments reinforce the company’s commitment to scaling the business, enhancing operational efficiency, and driving long-term shareholder returns.
    • In March, Rapid7 announced plans for expansion in India, including the opening of a global capacity center, which will serve as a Security Operations Center (SOC) and innovation hub to house technology, security operations, customer support, and IT teams.

    Second Quarter and Full Year 2025 Guidance

    Rapid7 anticipates ARR, revenue, non-GAAP income from operations, non-GAAP net income per share and free cash flow to be in the following ranges:

      Second Quarter 2025   Full-Year 2025
      (in millions, except per share data)
    ARR         $850 to $880
    Year-over-year growth         1% to 5%
    Revenue $211 to $213   $853 to $863
    Year-over-year growth 1% to 2%   1% to 2%
    Non-GAAP income from operations $30 to $32   $125 to $135
    Non-GAAP net income per share $0.43 to $0.46   $1.78 to $1.91
    Weighted average shares outstanding 75.3   76.7
    Free cash flow         $125 to $135
                   

    The guidance provided above is forward-looking in nature. Actual results may differ materially. See the cautionary note regarding “Forward-Looking Statements” below. Guidance for the second quarter 2025 does not include any potential impact of foreign exchange gains or losses. The guidance provided above is based on a number of assumptions, estimates and expectations as of the date of this press release and, while presented with numerical specificity, this guidance is inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond Rapid7’s control and are based upon specific assumptions with respect to future business decisions or economic conditions, some of which may change. Rapid7 undertakes no obligation to update guidance after this date.

    Non-GAAP guidance excludes estimates for stock-based compensation expense, amortization of acquired intangible assets, amortization of debt issuance costs, and certain other items such as acquisition-related expenses, impairment of long-lived assets, restructuring expense, induced conversion expense, change in the fair value of derivative assets, litigation-related expenses and discrete tax items. Rapid7 has provided a reconciliation of each non-GAAP guidance measure to the most comparable GAAP measures in the financial statement tables included in this press release. The reconciliation does not reflect any items that are unknown at this time, including, but not limited to, non-ordinary course litigation-related expenses, which we are not able to predict without unreasonable effort due to their inherent uncertainty.

    Conference Call and Webcast Information

    Rapid7 will host a conference call today, May 12, 2025, to discuss its results at 4:30 p.m. Eastern Time. The call will be accessible by telephone at 888-330-2384 (domestic) or +1 240-789-2701 (international) with the event code 8484206. The call will also be available live via webcast on Rapid7’s website at https://investors.rapid7.com. A webcast replay of the conference call will be available at https://investors.rapid7.com.

    About Rapid7

    Rapid7 (Nasdaq: RPD) is on a mission to create a safer digital world by making cybersecurity simpler and more accessible. We empower security professionals to manage a modern attack surface through our best-in-class technology, leading-edge research, and broad, strategic expertise. Rapid7’s comprehensive security solutions help more than 11,000 global customers unite cloud risk management and threat detection to reduce attack surfaces and eliminate threats with speed and precision. For more information, visit our website, check out our blog, or follow us on LinkedIn or Twitter.

    Non-GAAP Financial Measures and Other Metrics

    To supplement our consolidated financial statements, which are prepared and presented in accordance with generally accepted accounting principles in the United States (“GAAP”), we provide investors with certain non-GAAP financial measures and other metrics, which we believe are helpful to our investors. We use these non-GAAP financial measures and other metrics for financial and operational decision-making purposes and as a means to evaluate period-to-period comparisons. We also use certain non-GAAP financial measures as performance measures under our executive bonus plan. We believe that these non-GAAP financial measures and other metrics provide useful information about our operating results, enhance the overall understanding of past financial performance and future prospects and allow for greater transparency with respect to metrics used by our management in its financial and operational decision-making.

    While our non-GAAP financial measures are an important tool for financial and operational decision-making and for evaluating our own operating results over different periods of time, you should review the reconciliation of our non-GAAP financial measures to the comparable GAAP financial measures included below, and not rely on any single financial measure to evaluate our business.

    Non-GAAP Financial Measures

    We disclose the following non-GAAP financial measures: non-GAAP gross profit, non-GAAP income from operations, non-GAAP net income, non-GAAP net income per share, adjusted EBITDA and free cash flow. We also disclose non-GAAP gross margin and non-GAAP operating margin derived from these financial measures.

    We define non-GAAP gross profit, non-GAAP income from operations, non-GAAP net income and non-GAAP net income per share as the respective GAAP balances excluding the effect of stock-based compensation expense, amortization of acquired intangible assets, amortization of debt issuance costs and certain other items such as acquisition-related expenses, impairment of long-lived assets, change in the fair value of derivative assets, restructuring expense, induced conversion expense and discrete tax items. Non-GAAP net income per basic and diluted share is calculated as non-GAAP net income divided by the weighted average shares used to compute net income per share, with the number of weighted average shares decreased, when applicable, to reflect the anti-dilutive impact of the capped call transactions entered into in connection with our convertible senior notes.

    We believe these non-GAAP financial measures are useful to investors in assessing our operating performance due to the following factors:

    Stock-based compensation expense. We exclude stock-based compensation expense because of varying available valuation methodologies, subjective assumptions and the variety of equity instruments that can impact our non-cash expense. We believe that providing non-GAAP financial measures that exclude stock-based compensation expense allows for more meaningful comparisons between our operating results from period to period.

    Amortization of acquired intangible assets. We believe that excluding the impact of amortization of acquired intangible assets allows for more meaningful comparisons between operating results from period to period as the intangible assets are valued at the time of acquisition and are amortized over several years after the acquisition.

    Amortization of debt issuance costs. The expense for the amortization of debt issuance costs related to our convertible senior notes and our former revolving credit facility is a non-cash item, and we believe the exclusion of this interest expense provides a more useful comparison of our operational performance in different periods.

    Induced conversion expense. In conjunction with the third quarter of 2023 partial repurchase of our 2.25% convertible senior notes due 2025, we incurred a non-cash induced conversion expense of $53.9 million. We exclude induced conversion expense because this amount is not indicative of the performance of or trends in our business, and neither is comparable to the prior period nor predictive of future results.

    Litigation-related expenses. We exclude non-ordinary course litigation expense because we do not consider legal costs and settlement fees incurred in litigation and litigation-related matters of non-ordinary course lawsuits and other disputes to be indicative of our core operating performance. We do not adjust for ordinary course legal expenses, including legal costs and settlement fees resulting from maintaining and enforcing our intellectual property portfolio and license agreements.

    Acquisition-related expenses. We exclude acquisition-related expenses, including accretion expense associated with contingent consideration, as costs that are unrelated to the current operations and are neither comparable to the prior period nor predictive of future results.

    Change in fair value of derivative assets. The expense for the change in fair value of derivative assets related to our 2023 capped calls settlement is a non-cash item and we believe the exclusion of this other income (expense) provides a more useful comparison of our operational performance in different periods.

    Impairment of long-lived assets. Impairment of long-lived assets consists of impairment charges allocated to the carrying amount of certain operating right-of-use assets and the associated leasehold improvements when the carrying amounts exceed their respective fair values and we believe the exclusion of the impairment charges provides a more useful comparison of our operational performance in different periods.

    Restructuring expense. We exclude non-ordinary course restructuring expenses related to our restructuring plan, that was completed during fiscal year 2024, because we do not believe these charges are indicative of our core operating performance and we believe the exclusion of the restructuring expenses provides a more useful comparison of our performance in different periods.

    Discrete tax items. We exclude certain discrete tax items such as income tax expenses or benefits that are not related to ongoing business operations in the current year and adjustments to uncertain tax position reserves as these charges are not indicative of our ongoing operating results, and they are not considered when we are forecasting our future results.

    Anti-dilutive impact of capped call transaction. Our capped call transactions are intended to offset potential dilution from the conversion features in our convertible senior notes. Although we cannot reflect the anti-dilutive impact of the capped call transactions under GAAP, we do reflect the anti-dilutive impact of the capped call transactions in non-GAAP net income (loss) per diluted share, when applicable, to provide investors with useful information in evaluating our financial performance on a per share basis.

    Adjusted EBITDA. Adjusted EBITDA is a non-GAAP measure that we define as net income (loss) before (1) interest income, (2) interest expense, (3) other (income) expense, net, (4) provision for (benefit from) income taxes, (5) depreciation expense, (6) amortization of intangible assets, (7) stock-based compensation expense, (8) acquisition-related expenses, and (9) restructuring expense. We believe that the use of adjusted EBITDA is useful to investors and other users of our financial statements in evaluating our operating performance because it provides them with an additional tool to compare business performance across companies and across periods.

    Free Cash Flow. Free cash flow is a non-GAAP measure that we define as cash provided by operating activities less purchases of property and equipment and capitalization of internal-use software costs. We consider free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business after necessary capital expenditures.

    Our non-GAAP financial measures may not provide information that is directly comparable to that provided by other companies in our industry, as other companies in our industry may calculate non-GAAP financial results differently, particularly related to non-recurring, unusual items. In addition, there are limitations in using non-GAAP financial measures because the non-GAAP financial measures are not prepared in accordance with GAAP, may be different from non-GAAP financial measures used by other companies and exclude expenses that may have a material impact upon our reported financial results. Further, stock-based compensation expense has been and will continue to be for the foreseeable future a significant recurring expense in our business and an important part of the compensation provided to our employees.

    Other Metrics

    ARR. ARR is defined as the annual value of all recurring revenue related to contracts in place at the end of the period. ARR should be viewed independently of revenue and deferred revenue as ARR is an operating metric and is not intended to be combined with or replace these items. ARR is not a forecast of future revenue, which can be impacted by contract start and end dates and renewal rates, and does not include revenue reported as professional services revenue in our consolidated statement of operations.

    Number of Customers. We define a customer as any entity that has an active Rapid7 recurring revenue contract as of the specified measurement date, excluding InsightOps and Logentries only customers with a contract value of less than $2,400 per year.

    ARR per Customer. We define ARR per customer as ARR divided by the number of customers at the end of the period.

    Cautionary Language Concerning Forward-Looking Statements

    This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, the statements regarding our financial guidance for the second quarter and full-year 2025, and the assumptions underlying such guidance. Our use of the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “will” and similar expressions are intended to identify forward-looking statements. The events described in our forward-looking statements are subject to a number of risks and uncertainties, assumptions and other factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by the forward-looking statements. Risks that could cause or contribute to such differences include, but are not limited to, growing macroeconomic uncertainty, unstable market and economic conditions, fluctuations in our quarterly results, our ability to successfully grow our sales of our cloud-based solutions, including through the shift to a consolidated platform sales approach, effectiveness of our restructuring plan that was completed during fiscal year 2024, failure to meet our publicly announced guidance or other expectations about our business, our ability to sustain our revenue growth rate, the ability of our products and professional services to correctly detect vulnerabilities, renewal of our customer’s subscriptions, competition in the markets in which we operate, market growth, our ability to innovate and manage our growth, our sales cycles, our ability to integrate acquired companies, exposure to greater than anticipated tax liabilities, and our ability to operate in compliance with applicable laws as well as other risks and uncertainties that could affect our business and results described in our filings with the Securities and Exchange Commission (the “SEC”), including our most recent Annual Report on Form 10-K filed with the SEC on February 28, 2025, particularly in the section entitled “Item 1.A Risk Factors,” and in the subsequent reports that we file with the SEC. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management 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 to differ materially from those expressed in any forward-looking statements we may make. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this press release.

    Investor contact:

    Elizabeth Chwalk
    Vice President, Investor Relations
    investors@rapid7.com
    (617) 865-4277

    Press contact:

    Alice Randall
    Director, Global Corporate Communications
    press@rapid7.com
    (214) 693-4727

     
    RAPID7, INC.
    Consolidated Balance Sheets (Unaudited)
    (in thousands)
             
        March 31, 2025   December 31, 2024
    Assets        
    Current assets:        
    Cash and cash equivalents   $ 291,462     $ 334,686  
    Short-term investments     202,011       187,025  
    Accounts receivable, net     140,541       168,242  
    Deferred contract acquisition and fulfillment costs, current portion     50,667       52,134  
    Prepaid expenses and other current assets     47,964       44,024  
    Total current assets     732,645       786,111  
    Long-term investments     99,136       37,274  
    Property and equipment, net     31,659       32,245  
    Operating lease right-of-use assets     46,404       48,877  
    Deferred contract acquisition and fulfillment costs, non-current portion     69,843       73,672  
    Goodwill     575,268       575,268  
    Intangible assets, net     79,763       85,719  
    Other assets     10,092       12,868  
    Total assets   $ 1,644,810     $ 1,652,034  
    Liabilities and Stockholders’ Equity        
    Current liabilities:        
    Accounts payable   $ 12,318     $ 18,908  
    Accrued expenses and other current liabilities     69,458       88,802  
    Convertible senior notes, current portion, net     45,967       45,895  
    Operating lease liabilities, current portion     13,614       15,493  
    Deferred revenue, current portion     447,798       461,118  
    Total current liabilities     589,155       630,216  
    Convertible senior notes, non-current portion, net     889,303       888,356  
    Operating lease liabilities, non-current portion     65,484       68,430  
    Deferred revenue, non-current portion     27,524       27,078  
    Other long-term liabilities     20,622       20,243  
    Total liabilities     1,592,088       1,634,323  
    Stockholders’ equity:        
    Common stock   $ 642     $ 635  
    Treasury stock     (4,765 )     (4,765 )
    Additional paid-in-capital     1,042,355       1,011,080  
    Accumulated other comprehensive (loss) income     419       (1,205 )
    Accumulated deficit     (985,929 )     (988,034 )
    Total stockholders’ equity     52,722       17,711  
    Total liabilities and stockholders’ equity   $ 1,644,810     $ 1,652,034  
                     

    Note: Certain prior periods reflect immaterial corrections. Refer to Note 16, Immaterial Correction of an Error, in the notes to our Consolidated Financial Statements for further information.

     
    RAPID7, INC.
    Consolidated Statements of Operations (Unaudited)
    (in thousands, except share and per share data)
       
      Three Months Ended March 31,
      2025   2024
    Revenue:      
    Product subscriptions $ 203,935     $ 196,918  
    Professional services   6,318       8,183  
    Total revenue   210,253       205,101  
    Cost of revenue:      
    Product subscriptions   54,368       54,734  
    Professional services   5,112       6,260  
    Total cost of revenue   59,480       60,994  
    Total gross profit   150,773       144,107  
    Operating expenses:      
    Research and development   47,888       41,368  
    Sales and marketing   79,400       73,095  
    General and administrative   23,586       19,928  
    Total operating expenses   150,874       134,391  
    (Loss) income from operations   (101 )     9,716  
    Other income (expense), net:      
    Interest income   5,758       4,720  
    Interest expense   (2,654 )     (2,670 )
    Other income (expense), net   1,802       (1,435 )
    Income before income taxes   4,805       10,331  
    Provision for income taxes   2,700       8,925  
    Net income $ 2,105     $ 1,406  
    Net income per share, basic $ 0.03     $ 0.02  
    Net income per share, diluted (1) $ 0.03     $ 0.02  
    Weighted-average common shares outstanding, basic   63,835,945       61,907,808  
    Weighted-average common shares outstanding, diluted   64,224,415       74,021,704  
                   

    (1) We use the if-converted method to compute diluted earnings per share with respect to our convertible senior notes. There was no add-back of interest expense or additional dilutive shares related to the convertible senior notes where the effect was anti-dilutive. On an if-converted basis, for the three months ended March 31, 2025 and 2024, the 2025, 2027 and 2029 Notes were anti-dilutive.

    Note: Certain prior periods reflect immaterial corrections. Refer to Note 16, Immaterial Correction of an Error, in the notes to our Consolidated Financial Statements for further information.

     
    RAPID7, INC.
    Consolidated Statements of Cash Flows (Unaudited)
    (in thousands)
       
      Three Months Ended March 31,
      2025   2024
    Cash flows from operating activities:      
    Net income $ 2,105     $ 1,406  
    Adjustments to reconcile net income to net cash provided by operating activities:      
    Depreciation and amortization   11,665       11,348  
    Amortization of debt issuance costs   1,019       1,053  
    Stock-based compensation expense   27,151       25,745  
    Deferred income taxes   —       1,840  
    Other   (1,153 )     (203 )
    Changes in assets and liabilities:      
    Accounts receivable   27,668       39,529  
    Deferred contract acquisition and fulfillment costs   5,295       (679 )
    Prepaid expenses and other assets   (1,995 )     (1,223 )
    Accounts payable   (6,555 )     (4,190 )
    Accrued expenses   (20,325 )     (24,890 )
    Deferred revenue   (12,874 )     (21,186 )
    Other liabilities   (2,244 )     2,520  
    Net cash provided by operating activities   29,757       31,070  
    Cash flows from investing activities:      
    Purchases of property and equipment   (1,361 )     (620 )
    Capitalization of internal-use software   (3,719 )     (2,916 )
    Purchases of investments   (144,461 )     (93,158 )
    Sales and maturities of investments   69,000       55,000  
    Other investing activities   1,328       —  
    Net cash used in investing activities   (79,213 )     (41,694 )
    Cash flows from financing activities:      
    Taxes paid related to net share settlement of equity awards   (1,303 )     (1,764 )
    Proceeds from employee stock purchase plan   4,446       5,046  
    Proceeds from stock option exercises   1,589       1,080  
    Net cash provided by financing activities   4,732       4,362  
    Effect of exchange rate changes on cash ,cash equivalents and restricted cash   1,334       (1,493 )
    Net decrease in cash, cash equivalents and restricted cash   (43,390 )     (7,755 )
    Cash, cash equivalents and restricted cash, beginning of period $ 342,101     $ 214,130  
    Cash, cash equivalents and restricted cash, end of period $ 298,711     $ 206,375  
    Supplemental cash flow information:      
    Cash paid for interest on convertible senior notes   1,571       2,698  
    Cash paid for income taxes, net of refunds   992       2,352  
    Reconciliation of cash, cash equivalents and restricted cash:      
    Cash and cash equivalents $ 291,462     $ 198,716  
    Restricted cash included in prepaid expenses and other current assets and other assets   7,249       7,659  
    Total cash, cash equivalents and restricted cash $ 298,711     $ 206,375  
                   

    Note: Certain prior periods reflect immaterial corrections. Refer to Note 16, Immaterial Correction of an Error, in the notes to our Consolidated Financial Statements for further information.

     
    RAPID7, INC.
    GAAP to Non-GAAP Reconciliation (Unaudited)
    (in thousands, except share and per share data)
       
      Three Months Ended March 31,
      2025   2024
    GAAP gross profit $ 150,773     $ 144,107  
    Add: Stock-based compensation expense1   2,264       2,671  
    Add: Amortization of acquired intangible assets2   4,423       4,317  
    Non-GAAP gross profit $ 157,460     $ 151,095  
    Non-GAAP gross margin   74.9 %     73.7 %
           
    GAAP gross profit – Product subscriptions $ 149,567     $ 142,184  
    Add: Stock-based compensation expense   1,731       2,298  
    Add: Amortization of acquired intangible assets   4,423       4,317  
    Non-GAAP gross profit – Product subscriptions $ 155,721     $ 148,799  
    Non-GAAP gross margin – Product subscriptions   76.4 %     75.6 %
           
    GAAP gross profit – Professional services $ 1,206     $ 1,923  
    Add: Stock-based compensation expense   533       373  
    Non-GAAP gross profit – Professional services $ 1,739     $ 2,296  
    Non-GAAP gross margin – Professional services   27.5 %     28.1 %
           
    GAAP (loss) income from operations $ (101 )   $ 9,716  
    Add: Stock-based compensation expense1   27,151       25,745  
    Add: Amortization of acquired intangible assets2   5,120       5,014  
    Add: Acquisition-related expenses3   183       —  
    Add: Restructuring expense   —       (190 )
    Non-GAAP income from operations $ 32,353     $ 40,285  
           
    GAAP net income $ 2,105     $ 1,406  
    Add: Stock-based compensation expense1   27,151       25,745  
    Add: Amortization of acquired intangible assets2   5,120       5,014  
    Add: Amortization of debt issuance costs   1,019       1,053  
    Add: Acquisition-related expenses3   183       —  
    Add: Restructuring expense4   —       (190 )
    Add: Discrete tax items5   —       6,360  
    Non-GAAP net income $ 35,578     $ 39,388  
    Add: Interest expense of convertible senior notes6   1,571       1,571  
    Numerator for non-GAAP earnings per share, diluted calculation $ 37,149     $ 40,959  
           
    Weighted average shares used in GAAP earnings per share calculation, basic   63,835,945       61,907,808  
    Dilutive effect of convertible senior notes6   11,183,611       11,183,611  
           
    Dilutive effect of employee equity incentive plans7   388,471       930,195  
    Weighted average shares used in non-GAAP earnings per share calculation, diluted   75,408,027       74,021,614  
           
    Non-GAAP net income per share:      
    Basic $ 0.56     $ 0.64  
    Diluted $ 0.49     $ 0.55  
           
    1 Includes stock-based compensation expense as follows:      
    Cost of revenue $ 2,264     $ 2,671  
    Research and development   10,386       7,944  
    Sales and marketing   7,241       7,137  
    General and administrative   7,260       7,993  
           
    2 Includes amortization of acquired intangible assets as follows:      
    Cost of revenue $ 4,423     $ 4,317  
    Sales and marketing   652       652  
    General and administrative   45       45  
           
    3 Includes acquisition-related expenses as follows:      
    General and administrative $ 183     $ —  
           
    4 For the three months ended March 31, 2024 restructuring expense was included within general and administrative expense in our consolidated statements of operations.
           
    5 Includes discrete tax items as follows:
    Provision for income taxes $ —     $ 6,360  
           
    6 We use the if-converted method to compute diluted earnings per share with respect to our convertible senior notes. There was no add-back of interest expense or additional dilutive shares related to the convertible senior notes where the effect was anti-dilutive.
           
    7 We use the treasury method to compute the dilutive effect of employee equity incentive plan awards.
           

    Note: Certain prior periods reflect immaterial corrections. Refer to Note 16, Immaterial Correction of an Error, in the notes to our Consolidated Financial Statements for further information.

     
    RAPID7, INC.
    Reconciliation of Net Income (Loss) to Adjusted EBITDA (Unaudited)
    (in thousands)
       
      Three Months Ended March 31,
      2025   2024
    GAAP net income $ 2,105     $ 1,406  
    Interest income   (5,758 )     (4,720 )
    Interest expense   2,654       2,670  
    Other (income) expense, net   (1,802 )     1,435  
    Provision for (benefit from) income taxes   2,700       8,925  
    Depreciation expense   2,791       2,908  
    Amortization of intangible assets   8,874       8,440  
    Stock-based compensation expense   27,151       25,745  
    Acquisition-related expenses   183       —  
    Restructuring expense   —       (190 )
    Adjusted EBITDA $ 38,898     $ 46,619  
                   

    Note: Certain prior period reflect immaterial corrections. Refer to Note 16, Immaterial Correction of an Error, in the notes to our Consolidated Financial Statements for further information.

     
    RAPID7, INC.
    Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow (Unaudited)
    (in thousands)
       
      Three Months Ended March 31,
      2025   2024
    Net cash provided by operating activities $ 29,757     $ 31,070  
    Less: Purchases of property and equipment   (1,361 )     (620 )
    Less: Capitalized internal-use software costs   (3,719 )     (2,916 )
    Free cash flow $ 24,677     $ 27,534  
                   
     
    Second Quarter and Full-Year 2025 Guidance
    GAAP to Non-GAAP Reconciliation
    (in millions, except per share data)
           
      Second Quarter 2025   Full-Year 2025
    Reconciliation of GAAP income from operations to non-GAAP income from operations:              
    Anticipated GAAP loss from operations $ (2 ) to $ —     $ (11 ) to $ (1 )
    Add: Anticipated stock-based compensation expense   27   to   27       116   to   116  
    Add: Anticipated amortization of acquired intangible assets   5   to   5       20   to   20  
    Anticipated non-GAAP income from operations $ 30   to $ 32     $ 125   to $ 135  
                   
    Reconciliation of GAAP net income to non-GAAP net income:              
    Anticipated GAAP net loss $ (2 ) to $ —     $ (9 ) to $ 1  
    Add: Anticipated stock-based compensation expense   27   to   27       116   to   116  
    Add: Anticipated amortization of acquired intangible assets   5   to   5       20   to   20  
    Add: Anticipated amortization of debt issuance costs   1   to   1       4   to   4  
    Anticipated non-GAAP net income $ 31   to $ 33     $ 131   to $ 141  
    Add: Anticipated interest expense on convertible senior notes   1.4   to   1.4       5.6   to   5.6  
    Numerator for non-GAAP earnings per share calculation $ 32.4   to $ 34.4     $ 136.6   to $ 146.6  
                   
    Anticipated GAAP net (loss) income per share1 $ (0.03 )   $ —     $ (0.14 )   $ 0.02  
    Anticipated non-GAAP net income per share, diluted $ 0.43     $ 0.46     $ 1.78     $ 1.91  
                   
    Weighted average shares used in earnings per share calculation, diluted 75.3   76.7
                   
    1 The anticipated GAAP net loss per share is calculated using basic weighted average shares for periods in which the Company anticipated a GAAP net loss. The anticipated GAAP net income per share is calculated using GAAP diluted weighted average shares for periods in which the Company anticipated GAAP net income.
     

    The reconciliation does not reflect any items that are unknown at this time, including, but not limited to, non-ordinary course litigation-related expenses, which we are not able to predict without unreasonable effort due to their inherent uncertainty. As a result, the estimates shown for Anticipated GAAP loss from operations, Anticipated GAAP net loss and Anticipated GAAP net loss per share are expected to change.

       
      Full-Year 2025
    Reconciliation of net cash provided by operating activities to free cash flow:      
    Anticipated net cash provided by operating activities $ 146   to $ 156  
    Less: Anticipated purchases of property and equipment   (7 ) to   (7 )
    Less: Anticipated capitalized internal-use software costs   (14 ) to   (14 )
    Anticipated free cash flow $ 125     $ 135  
                   

    The MIL Network –

  • MIL-OSI: OptimizeRx Reports First Quarter 2025 Financial Results and Updates Fiscal Year 2025 Guidance

    Source: GlobeNewswire (MIL-OSI)

    • Q1 revenue of $21.9 million, increasing 11% year-over-year
    • Q1 gross profit increased 9% year-over-year to $13.3 million
    • Increases full year 2025 guidance to a revenue range between $101 million and $106 million and adjusted EBITDA range between $13 million and $15 million

    WALTHAM, Mass., May 12, 2025 (GLOBE NEWSWIRE) — OptimizeRx Corp. (the “Company”) (Nasdaq: OPRX), a leading provider of healthcare technology solutions helping life sciences companies reach and engage healthcare professionals (HCPs) and patients, today reported results for the three months ended March 31, 2025. Quarterly comparisons are to the same year-ago period.

    Financial Highlights

    • Revenue in the first quarter of 2025 increased 11% to $21.9 million, as compared to $19.7 million in the same year ago period
    • Gross profit in the first quarter of 2025 increased 9% year-over-year to $13.3 million, from $12.2 million during the first quarter of 2024
    • GAAP net loss totaled $(2.2) million or $(0.12) per basic and diluted share in the first quarter of 2025, as compared to $(6.9) million or $(0.38) per basic and diluted share during the first quarter of 2024
    • Non-GAAP net income in the first quarter totaled $1.5 million or $0.08 per diluted share, as compared to Non-GAAP net loss of $(2.0) million or $(0.11) per diluted share during the first quarter of 2024 (see *Non-GAAP Measures below)
    • Adjusted EBITDA for the first quarter of 2025 increased to $1.5 million compared to $(0.3) million in the same year ago period (see *Non-GAAP Measures below)
    • Cash, cash equivalents and short-term investments totaled $16.6 million as of March 31, 2025, as compared to $13.4 million as of December 31, 2024

    Stephen L. Silvestro, OptimizeRx CEO commented, “I’m encouraged by our year-to-date performance, which has exceeded both consensus estimates and our internal expectations. The momentum we saw at the end of 2024 has carried into 2025, with year-to-date contracted revenue up more than 20% compared to the same period last year—positioning us well for a strong second half of the year. I believe this performance clearly reflects the results of our focus on operational excellence, our commitment to delighting customers, and our efforts to deepen relationships with valued business partners, all of which are driving meaningful shareholder value.

    “At the same time, we’ve already converted over 5% of our expected 2025 sales into subscription-based revenue streams. I believe this transition, combined with our improving operating leverage, puts us on a strong path toward achieving Rule of 40 performance in the coming years.

    “Given our strong performance and positive outlook, I’m pleased to announce that we are raising our full-year guidance. We now expect the revenue range to be between $101 million and $106 million, and adjusted EBITDA to be between $13 million and $15 million.”

      Rolling Twelve Months Ended March 31,
    Key Performance Indicators (KPIs)**  2025     2024 
      (in thousands, except percentages)
    Average revenue per top 20 pharmaceutical manufacturer $ 2,960     $ 2,592  
    Percent of total revenue attributable to top 20 pharmaceutical manufacturers   63 %     66 %
    Net revenue retention   114 %     116 %
    Revenue per average full-time employee $ 710     $ 641  

    2025 Financial Outlook

    The Company is increasing its 2025 guidance and expects revenue to be between $101 million and $106 million with Adjusted EBITDA to be between $13 million and $15 million.

    Conference Call

    Individual Meeting Invitation

    In an effort to increase relations with institutional investors, OptimizeRx management has dedicated time to hosting individual meetings with portfolio managers and analysts. If you are interested in scheduling a meeting with OptimizeRx management, please contact: adsilva@optimizerx.com or shalper@lifesciadvisors.com.

    *Non-GAAP Measures

    In addition to the financial measures prepared in accordance with generally accepted accounting principles (GAAP), this earnings release also contains non-GAAP financial measures. The reasons why we believe these measures provide useful information to investors and, for historical periods, a reconciliation of these measures to the most directly comparable GAAP measures are included in the supplemental tables that follow.

    Although the Company provides guidance for Adjusted EBITDA, a non-GAAP financial measure, it is not able to provide guidance to the most directly comparable GAAP measure. Reconciliations for forward-looking figures would require unreasonable effort at this time because of the uncertainty and variability of the nature and amount of certain components of various necessary GAAP components, including, for example, those related to compensation, acquisition expenses, other income, amortization or others that may arise during the year, and the Company’s management believes such reconciliations would imply a degree of precision that would be confusing or misleading to investors. For the same reasons, the Company is unable to address the probable significance of the unavailable information.

    **Definition of Key Performance Indicators

    Top 20 pharmaceutical manufacturers: We have updated the definition of “top 20 pharmaceutical manufacturers” in our key performance indicators to be based upon Fierce Pharma’s most updated list of “The top 20 pharma companies by 2024 revenue”. We previously used “The top 20 pharma companies by 2023 revenue”. As a result of this change, prior periods have been restated for comparative purposes.

    Net revenue retention: Net revenue retention is a comparison of revenue generated from all clients in the previous period to total revenue generated from the same clients in the following year (i.e., excludes new client relationships for the most recent year).

    Revenue per average full-time employee: We define revenue per average full-time employee (FTE) as total revenue over the last 12 months (LTM) divided by the average number of employees over the LTM, which is calculated by taking our total number of FTEs at the end of the prior year period by our total FTE headcount at the end of the most recent period.

    About OptimizeRx

    OptimizeRx is a leading healthcare technology company that’s redefining how life science brands connect with patients and healthcare providers. Our platform combines innovative AI-driven tools like the Dynamic Audience Activation Platform (DAAP) and Micro-Neighborhood Targeting (MNT) to deliver timely, relevant, and hyper-local engagement. By bridging the gap between HCP and DTC strategies, we empower brands to create synchronized marketing solutions that drive faster treatment decisions and improved patient outcomes.

    Our commitment to privacy-safe, patient-centric technology ensures that every interaction is designed to make a meaningful impact, delivering life-changing therapies to the right patients at the right time. Headquartered in Waltham, Massachusetts, OptimizeRx partners with some of the world’s leading pharmaceutical and life sciences companies to transform the healthcare landscape and create a healthier future for all.

    For more information, follow the Company on Twitter, LinkedIn or visit www.optimizerx.com.  

    Important Cautions Regarding Forward-Looking Statements

    This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “anticipates”, “believes”, “estimates”, “expects”, “forecasts”, “intends”, “plans”, “projects”, “targets”, “designed”, “could”, “may”, “should”, “will” or other similar words and expressions are intended to identify these forward-looking statements. All statements that reflect the Company’s expectations, assumptions, projections, beliefs or opinions about the future, other than statements of historical fact, are forward-looking statements, including, without limitation, statements relating to the Company’s future performance, expected revenues, expected Adjusted EBITDA, plans to grow shareholder value creation, plans to continue the Company’s growth and transformation, plans to position the Company to become a “Rule of 40” company, plans for forging stronger relationships with valued business partners, and other statements relating to future performance, plans, and expectations. These forward-looking statements are based on the Company’s current expectations and involve assumptions regarding the Company’s business, the economy, and other future conditions that may never materialize or may prove to be incorrect. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted, or quantified. Actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of various risks and uncertainties including, but not limited to, the effect of government regulation, seasonal trends, dependence on a concentrated group of customers, cybersecurity incidents that could disrupt operations, the ability to keep pace with growing and evolving technology, the ability to maintain contracts with electronic prescription platforms and electronic health records networks, competition, and other factors discussed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, its subsequent Quarterly Reports on Form 10-Q, and in other filings the Company has made and may make with the Securities and Exchange Commission in the future. One should not place undue reliance on these forward-looking statements, which speak only as of the date on which they were made. The Company undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they were made, except as may be required by law.

    OptimizeRx Contact
    Andy D’Silva, SVP Corporate Finance
    adsilva@optimizerx.com

    Investor Relations Contact
    Steven Halper
    LifeSci Advisors, LLC
    shalper@lifesciadvisors.com

    OPTIMIZERX CORPORATION
    CONDENSED CONSOLIDATED BALANCE SHEETS
    (in thousands, except share and per share data)

      March 31,
    2025    		   December 31,
    2024
    ASSETS (unaudited)    
    Current assets      
    Cash and cash equivalents $ 16,573     $ 13,380  
    Accounts receivable, net of allowance for credit losses of $335 at March 31, 2025 and December 31, 2024   32,720       38,212  
    Taxes receivable   113       —  
    Prepaid expenses and other   2,305       2,379  
    Total current assets   51,711       53,971  
    Property and equipment, net   150       150  
    Other assets      
    Goodwill   70,869       70,869  
    Patent rights, net   5,349       5,517  
    Technology assets, net   7,931       8,180  
    Tradename and customer relationships, net   31,226       31,819  
    Operating lease right of use assets   303       366  
    Security deposits and other assets   229       296  
    Total other assets   115,907       117,047  
    TOTAL ASSETS $ 167,768     $ 171,168  
           
    LIABILITIES AND STOCKHOLDERS’ EQUITY      
    Current liabilities      
    Current portion of long-term debt $ 3,300     $ 2,000  
    Accounts payable   3,381       2,156  
    Accrued expenses   9,277       8,486  
    Revenue share payable   1,743       5,053  
    Taxes payable   —       318  
    Current portion of lease liabilities   139       168  
    Deferred revenue   511       473  
    Total current liabilities   18,351       18,654  
    Non-current liabilities      
    Long-term debt, net   29,190       30,816  
    Lease liabilities, net of current portion   171       209  
    Deferred tax liabilities, net   3,786       4,491  
    Total liabilities   51,498       54,170  
           
    Stockholders’ equity      
    Preferred stock, $0.001 par value, 10,000,000 shares authorized, none issued and outstanding at March 31, 2025 or December 31, 2024   —       —  
    Common stock, $0.001 par value, 166,666,667 shares authorized, 20,234,186 and 20,194,697 shares issued at March 31, 2025 and December 31, 2024, respectively   20       20  
    Treasury stock, $0.001 par value, (1,741,397) shares held at March 31, 2025 and December 31, 2024   (2 )     (2 )
    Additional paid-in-capital   202,819       201,348  
    Accumulated deficit   (86,567 )     (84,368 )
    Total stockholders’ equity   116,270       116,998  
    TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 167,768     $ 171,168  
     

    OPTIMIZERX CORPORATION
    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
    (in thousands, except share and per share data, unaudited)

      For the Three Months Ended
    March 31,
       2025     2024 
           
    Net revenue $ 21,928     $ 19,690  
    Cost of revenues, exclusive of depreciation and amortization presented separately below   8,584       7,486  
    Gross profit   13,344       12,204  
           
    Operating expenses      
    General and administrative expenses   14,364       16,166  
    Depreciation and amortization   1,094       1,067  
    Total operating expenses   15,458       17,233  
    Loss from operations   (2,114 )     (5,029 )
    Other income (expense)      
    Interest expense   (1,297 )     (1,546 )
    Other income   39       —  
    Interest income   88       20  
    Total other expense, net   (1,170 )     (1,526 )
    Loss before provision for income taxes   (3,284 )     (6,555 )
    Income tax benefit (expense)   1,085       (344 )
    Net loss $ (2,199 )   $ (6,899 )
    Weighted average number of shares outstanding – basic   18,470,808       18,170,108  
    Weighted average number of shares outstanding – diluted   18,470,808       18,170,108  
    Loss per share – basic $ (0.12 )   $ (0.38 )
    Loss per share – diluted $ (0.12 )   $ (0.38 )
     

    OPTIMIZERX CORPORATION
    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
    (in thousands, unaudited)

      For the Three Months Ended
    March 31,
      2025   2024
    CASH FLOWS FROM OPERATING ACTIVITIES:      
    Net loss $ (2,199 )   $ (6,899 )
    Adjustments to reconcile net loss to net cash provided by operating activities:      
    Depreciation and amortization   1,094       1,067  
    Stock-based compensation   1,558       3,024  
    Bad debt reserve   —       132  
    Amortization of debt issuance costs   174       182  
    Changes in:      
    Accounts receivable   5,492       6,373  
    Prepaid expenses and other assets   74       800  
    Accounts payable   1,225       (562 )
    Revenue share payable   (3,310 )     (2,692 )
    Accrued expenses and other liabilities   854       (362 )
    Taxes receivable and payable   (431 )     323  
    Deferred tax liabilities   (705 )     —  
    Deferred revenue   38       732  
    NET CASH PROVIDED BY OPERATING ACTIVITIES   3,864       2,118  
           
    CASH FLOWS USED IN INVESTING ACTIVITIES:      
    Purchase of property and equipment   (27 )     (32 )
    Capitalized software development costs   (57 )     (121 )
    NET CASH USED IN INVESTING ACTIVITIES   (84 )     (153 )
           
    CASH FLOWS USED IN FINANCING ACTIVITIES:      
    Cash paid for employee withholding taxes related to the vesting of restricted stock units   (87 )     (140 )
    Repayment of long-term debt   (500 )     (500 )
    NET CASH USED IN FINANCING ACTIVITIES   (587 )     (640 )
    NET INCREASE IN CASH AND CASH EQUIVALENTS   3,193       1,325  
    CASH AND CASH EQUIVALENTS – BEGINNING OF PERIOD   13,380       13,852  
    CASH AND CASH EQUIVALENTS – END OF PERIOD $ 16,573     $ 15,177  
           
    SUPPLEMENTAL CASH FLOW INFORMATION:      
    Cash paid for interest $ 1,121     $ 1,350  
    Cash paid for income taxes $ —     $ 21  

    OPTIMIZERX CORPORATION
    RECONCILIATION of GAAP to NON-GAAP FINANCIAL MEASURES
    (in thousands, except share and per share data, unaudited)

    This earnings release includes certain financial measures not derived in accordance with generally accepted accounting principles (GAAP). These non-GAAP financial measures are measures of performance not defined by accounting principles generally accepted in the United States and should be considered in addition to, not in lieu of, GAAP reported measures. Additionally, these non-GAAP measures may not be comparable to similarly titled measures reported by other companies. However, management believes that presenting certain non-GAAP financial measures provides additional information to facilitate comparison of the Company’s historical operating results and trends in its underlying operating results and provides transparency on how the Company evaluates its business. Management uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the Company’s performance. Management believes that financial information excluding certain items that are not considered to reflect the Company’s ongoing operating results, such as those listed below, improves the comparability of year-to-year results. Consequently, management believes that investors may be able to better understand the Company’s operating results excluding these items. Non-GAAP financial measures may reflect adjustments for items such as asset impairment charges, amortization, stock-based compensation, acquisition expenses, severance, shareholder activist related fees, CEO search fees, other income, as well as other items that management believes are not related to the Company’s ongoing performance.

      Three Months Ended March 31,
       2025     2024 
    Net loss $         (2,199 )   $         (6,899 )
    Depreciation and amortization           1,094               1,067  
    Stock-based compensation           1,558               3,024  
    Severance expenses           275               419  
    Shareholder activist related fees           451               —  
    CEO search fees           225               —  
    Other income           (39 )             —  
    Amortization of debt issuance costs           174               182  
    Acquisition expenses           —               243  
    Non-GAAP net income (loss) $         1,539     $         (1,964 )
           
    Non-GAAP net income (loss) per share      
    Diluted $         0.08     $         (0.11 )
    Weighted average shares outstanding:      
    Diluted   18,579,012       18,170,108  
      Three Months Ended March 31,
      2025   2024
    Net loss $ (2,199 )   $ (6,899 )
    Depreciation and amortization   1,094       1,067  
    Income tax (benefit) expense   (1,085 )     344  
    Stock-based compensation   1,558       3,024  
    Severance expenses   275       419  
    Acquisition expenses   —       243  
    Shareholder activist related fees   451       —  
    CEO search fees   225       —  
    Other income   (39 )     —  
    Interest expense, net   1,209       1,526  
    Adjusted EBITDA $ 1,489     $ (276 )

    The MIL Network –

  • MIL-OSI: Amplify Energy Announces First Quarter 2025 Results, Beta Development Update and Updated Full-Year 2025 Guidance

    Source: GlobeNewswire (MIL-OSI)

    HOUSTON, May 12, 2025 (GLOBE NEWSWIRE) — Amplify Energy Corp. (NYSE: AMPY) (“Amplify,” the “Company,” “us,” or “our”) announced today its operating and financial results for the first quarter of 2025 and updated full-year 2025 guidance for the Company.

    Beta Development Program Update

    • Amplify initiated a development drilling program in the prolific Beta oilfield in 2024 to demonstrate the significant upside potential of the asset and generate strong incremental cash flows for the Company, with results to date proving out the viability and long-term potential of the program
    • Completed the C54 well in mid-April 2025
      • Drilled well utilizing lessons learned from 2024 program including the implementation of a managed pressure drilling system
      • IP20 was approximately 800 Bopd, which has been the strongest initial well performance in the program
      • With the C54 online, the three wells completed in the D-Sand (our primary target formation) are all projected to have greater than 90% IRR at $60/bbl oil prices
    • Completed the C48 well in mid-February 2025 as the first C-Sand completion
      • Initially planned as a D-Sand completion, but due to drilling complications elected to complete the shallower C-Sand
      • Current production rate of approximately 100 BOPD
      • Well exhibits lower oil gravities and reservoir pressures than the D-Sand completions
      • Future injection support in the area to increase reservoir pressure and deliverability is expected to prove the C-Sand as a viable future target zone
    • With the recent completions of the C48 and C54, the field now has four new development wells online, which, after offsetting the asset’s base decline, have increased Beta production by approximately 35% since early 2024
    • Based on Beta development success, at year-end 2024 Amplify had 25 SEC Proved Undeveloped (“PUD”) locations (21 D-Sand locations) with approximately $144 million in PV-10 value1
      • D-Sand completions to date are significantly outperforming the type curve utilized in SEC PUD value/reserves indicating material upside above the current valuation estimate
      • Substantial future development remains at Beta beyond the current SEC PUD locations which are based on conservative volumetric and recovery factor assumptions

    First Quarter Highlights

    • During the first quarter of 2025, the Company:
      • Achieved average total production of 17.9 MBoepd
      • Generated net cash provided by operating activities of $25.5 million and a net loss of $5.9 million
      • Delivered Adjusted EBITDA of $19.4 million and Adjusted Net Income of $3.8 million
      • Generated $6.3 million in net proceeds from the sale of undeveloped Haynesville acreage in East Texas
        • In May 2025, sold additional Haynesville interests generating $1.5 million in proceeds
      • Generated $0.9 million of Adjusted EBITDA at Magnify Energy Services, Amplify’s wholly owned subsidiary (“Magnify”)
      • As of March 31, 2025, Amplify had $125.0 million outstanding under the revolving credit facility
        • Net debt to Last Twelve Months (“LTM”) Adjusted EBITDA of 1.3x2

    (1)   2024 Year End reserves are evaluated at flat pricing: (NYMEX WTI, HH) – $65.00, $4.00

    (2)   Net debt as of March 31, 2025, consisting of $125 MM outstanding under its revolving credit facility with ~$0 MM of cash and cash equivalents, and LTM Adjusted EBITDA as of the first quarter of 2025.

    Martyn Willsher, Amplify’s President and Chief Executive Officer, commented, “Amplify’s strong first quarter operating and financial results continue to demonstrate the significant value derived from the Company’s portfolio of assets. At Beta, we brought online two wells this year, which strengthen our conviction about the prolific untapped value that remains in the reservoir. In East Texas and the Eagle Ford, we anticipate our non-operated development projects will begin producing in the second quarter, with improved natural gas prices driving strong economics for our East Texas wells. Also, in East Texas, we recently monetized a portion of our undeveloped acreage with Haynesville rights in two separate transactions for net proceeds of $7.8 million dollars, while retaining an interest in over 30 gross locations to realize upside value in future periods.”

    Mr. Willsher continued, “In light of recent market volatility and a material reduction in oil prices, we conducted a comprehensive review of our remaining uncommitted 2025 capital budget and have elected to temporarily defer three development projects at Beta resulting in capital savings of approximately $15 million in 2025. While our Beta development projects have strong economics at current oil prices, we have flexibility on the timing of these projects and are committed to maintaining strong free cash flow and a healthy balance sheet for our investors. Our diversified portfolio of mature, low-decline assets and robust hedge book protect our cash flow profile during commodity downturns, allowing us the flexibility to scale up or down investments in either oil or gas projects depending on market conditions.”

    Mr. Willsher concluded, “Going forward, Amplify intends to focus on prudent management of its existing asset base to maximize free cash flow and is conducting a thorough review of additional operating and overhead cost-saving opportunities. The Company will also continue to evaluate portfolio optimization opportunities, which could enable us to accelerate Beta development.”

    Key Financial Results

    During the first quarter of 2025, the Company reported a net loss of approximately $5.9 million. The net loss was primarily attributable to a non-cash unrealized loss on commodity derivatives during the period partially offset by a gain on the sale of East Texas properties. Excluding the impact of the non-cash unrealized loss on commodity derivatives, the East Texas divestiture, and additional other one-time impacts, Amplify generated Adjusted Net Income of $3.8 million in the first quarter of 2025.

    First quarter 2025 Adjusted EBITDA was $19.4 million, a decrease of approximately $2.4 million from the prior quarter. The decrease was primarily due to higher lease operating expense and general and administrative expense that are typically higher in the first quarter offset by stronger gas price realizations compared to the prior quarter.

    Free cash flow was negative $7.2 million for the first quarter, which was in-line with expectations, due to planned capital investments.

         
         
         
      First Quarter Fourth Quarter
    $ in millions  2025   2024 
    Net income (loss) ($5.9 ) ($7.4 )
    Net cash provided by operating activities $25.5   $12.5  
    Average daily production (MBoe/d) 17.9   18.5  
    Total revenues excluding hedges $72.1   $69.0  
    Adjusted EBITDA (a non-GAAP financial measure) $19.4   $21.8  
    Adjusted net income (loss), (a non-GAAP financial measure) $3.8   $5.1  
    Total capital $23.1   $15.3  
    Free Cash Flow (a non-GAAP financial measure) ($7.2 ) $2.9  
         

    Revolving Credit Facility and Liquidity Update

    As of March 31, 2025, Amplify had total debt of $125 million under its revolving credit facility. Net debt to LTM Adjusted EBITDA was 1.3x (net debt as of March 31, 2025). The borrowing base is redetermined on a semi-annual basis with the next redetermination expected in the second quarter of 2025.

    Corporate Production and Pricing

    During the first quarter of 2025, average daily production was approximately 17.9 Mboepd, a decrease of 0.6 Mboepd from the prior quarter. The decrease in production was driven by natural gas and NGL volumes affected by a gas imbalance adjustment in East Texas and adverse weather in Oklahoma, causing widespread power outages. These temporary production issues were factored into the production guidance previously presented for 2025.

    The Company’s product mix for the quarter was 46% crude oil, 16% NGLs, and 38% natural gas.

        Three Months   Three Months
        Ended   Ended
        March 31, 2025   December 31, 2024
             
    Production volumes – MBOE:      
      Bairoil 280     293  
      Beta 315     308  
      Oklahoma 393     436  
      East Texas / North Louisiana 570     609  
      Eagle Ford (Non-op) 49     60  
      Total – MBoe 1,607     1,706  
      Total – MBoe/d 17.9     18.5  
      % – Liquids 62 %   62 %
             

    Total oil, natural gas and NGL revenues for the first quarter of 2025 were approximately $70.3 million, before the impact of derivatives. The Company realized a net gain on commodity derivatives of $0.5 million during the first quarter. Oil, natural gas and NGL revenues, net of realized hedges, decreased $0.4 million for the first 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
    March 31,
    2025    		   Three Months
    Ended
    December 31,
    2024    		   Three Months
    Ended
    March 31,
    2025    		   Three Months
    Ended
    December 31,
    2024    		   Three Months
    Ended
    March 31,
    2025    		   Three Months
    Ended
    December 31,
    2024
                           
    Average sales price exclusive of realized derivatives and certain deductions from revenue $ 67.82   $ 66.82   $ 25.24     $ 23.46     $ 3.87   $ 2.52  
    Realized derivatives   0.49     1.43     –       –       0.04     0.76  
                           
    Average sales price with realized derivatives exclusive of certain deductions from revenue $ 68.31   $ 68.25   $ 25.24     $ 23.46     $ 3.91   $ 3.28  
    Certain deductions from revenue   –     –     (1.78 )     (1.37 )     0.02     (0.01 )
                           
    Average sales price inclusive of realized derivatives and certain deductions from revenue $ 68.31   $ 68.25   $ 23.46     $ 22.09     $ 3.93   $ 3.27  
                           

    Costs and Expenses

    Lease operating expenses in the first quarter of 2025 were approximately $37.4 million, or $23.28 per Boe, a $2.3 million increase compared to the prior quarter and in-line with internal projections. Lease operating expenses are expected to decrease in the second half of 2025 after cost savings projects are completed in Bairoil, and fewer expense workovers are conducted later in the year. Lease operating expenses do not reflect $0.9 million of income generated by Magnify in the first quarter.

    Severance and ad valorem taxes in the first quarter were approximately $4.4 million, a decrease of $1.0 million compared to $5.4 million in the prior quarter. Lower production taxes were primarily due to lower production and a one-time benefit from reversing a prior accrual for waste emissions charges. Severance and ad valorem taxes as a percentage of revenue were approximately 6.2% in the first quarter. The Company anticipates that taxes as a percentage of revenue will remain within its previously announced guidance range for 2025.

    Amplify incurred $4.3 million, or $2.67 per Boe, of gathering, processing and transportation expenses in the first quarter, compared to $4.5 million, or $2.62 per Boe, in the prior quarter.

    Cash G&A expenses in the first quarter were $7.3 million, down 7% compared to the first quarter of 2024, and in-line with expectations. The Company anticipates that quarterly cash G&A expenses will be significantly lower throughout the remainder of the year primarily due to annual year-end processes that impact various cost drivers in the first quarter. The Company expects costs to be in line with our previously announced guidance range.

    Depreciation, depletion and amortization expense in the first quarter totaled $8.5 million, or $5.29 per Boe, compared to $8.4 million, or $4.93 per Boe, in the prior quarter.

    Net interest expense was $3.5 million in the first quarter, a decrease of $0.2 million compared to $3.7 million in the prior quarter.

    Amplify recorded minimal current income tax expense for the first quarter of 2025.

    Capital Investment Update

    Cash capital investment during the first quarter of 2025 was approximately $23.1 million. During the first quarter, the Company’s capital allocation was approximately 55% for development drilling, recompletions and facility projects at Beta, and approximately 30% for non-operated development projects in East Texas and the Eagle Ford, with the remainder distributed across the Company’s other assets.

    The following table details Amplify’s capital invested during the first quarter of 2025:

      First Quarter
      2025 Capital
      ($ MM)
    Bairoil $ 1.3
    Beta $ 12.7
    Oklahoma $ 1.4
    East Texas / North Louisiana $ 3.4
    Eagle Ford (Non-op) $ 3.9
    Magnify Energy Services $ 0.3
    Total Capital Invested $ 23.1
       

    2025 Operations & Development Plan

    Amplify has adjusted its 2025 operations and development plan for the current lower commodity price environment. The Company is electing to reduce discretionary development capital at Beta for the second half of 2025, while our previously committed non-operated projects in East Texas and the Eagle Ford are expected to be completed and brought online in the second quarter.

    Amplify’s current plan is to complete three wells at Beta in 2025, including the C48 and C54 wells, which were brought online in mid-February and mid-April, respectively. Amplify intends to drill and complete its next Beta well in the third quarter, which will be a D-Sand completion drilled in the same fault block as the recently completed C54 and the C59, which was completed in October 2024 and is still producing greater than 500 bopd. With the exceptional economics at Beta, Amplify will consider adding back development wells later this year should commodity prices improve.

    Other capital at Beta for 2025 includes $8 million to upgrade a two-mile pipeline that ships all produced fluid from platform Eureka to platform Elly, facility upgrades and capital workovers. Additional information regarding the Beta development plan can be found in the Company’s investor presentation under the investor relations section of the website.

    In East Texas, we are participating in the completion of four non-operated development projects, which we expect to be online in late second quarter. Operators in the area are taking advantage of strong natural gas prices and favorable economics, and the Company anticipates more activity in this area. For the Company’s operated assets, the team is focused 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.

    Also in East Texas, as previously announced, Amplify sold 90% of its interest in certain units with Haynesville rights in Harrison County, Texas, in addition to 11 gross operated wells, and purchased a 10% interest in adjacent acreage, generating $6.3 million in net proceeds from the sale. This transaction also established an area of mutual interest (“AMI”) with the counterparty covering 10,000 gross acres. We estimate the AMI has more than 30 potential gross drilling locations.

    In May 2025, Amplify completed a separate transaction, which monetized 90% of its interests in three additional units with Haynesville rights in Panola and Shelby Counties, finalizing a separate AMI consisting of seven total units. Amplify also retained a 10% working interest with the ability to participate in any well drilled within the boundary of the AMI. Upon closing the transaction, Amplify generated approximately $1.5 million in proceeds.

    From November 2024 to present, Amplify has generated proceeds of $9.2 million related to Haynesville acreage transactions, while retaining a 10% working interest in two newly created AMIs in the Haynesville play of East Texas.

    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 forecasted returns, have been completed and are scheduled to come online in early May. The Company is also evaluating additional development opportunities recently offered by our partners in fields where we have interests.

    Updated Full-Year 2025 Guidance

    Based on recent reductions to crude oil prices, Amplify has decided to modify its capital plans in order to maintain positive free cash flow in 2025. As a result of these modifications, we are providing updated guidance. The following 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 updated 2025 guidance is based on its current expectations regarding capital investment and full-year 2025 commodity prices for crude oil of $61.75/Bbl (WTI) and natural gas of $3.60/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 95% of its capital in the first three quarters of the year primarily in connection with the Beta development program and for non-operated development projects in East Texas and the Eagle Ford.

    A summary of the guidance is presented below:

      March 5, 2025
    		   March 7, 2025
      Previous Guidance   Updated Guidance
                   
      FY 2025E   FY 2025E
                   
      Low   High   Low   High
                   
    Net Average Daily Production              
    Oil (MBbls/d) 8.5 – 9.4   8.3 – 8.9
    NGL (MBbls/d) 3.0 – 3.3   3.0 – 3.3
    Natural Gas (MMcf/d) 45.0 – 51.0   45.0 – 50.0
    Total (MBoe/d) 19.0 – 21.0   19.0 – 20.5
                   
    Commodity Price Differential / Realizations (Unhedged)              
    Oil Differential ($ / Bbl) ($3.25) – ($4.25)   ($3.25) – ($4.25)
    NGL Realized Price (% of WTI NYMEX) 27% – 31%   27% – 31%
    Natural Gas Realized Price (% of Henry Hub) 85% – 92%   85% – 92%
                   
    Other Revenue              
    Magnify Energy Services ($ MM) $4 – $6   $4 – $6
    Other ($ MM) $2 – $3   $2 – $3
    Total ($ MM) $6 – $9   $6 – $9
                   
    Gathering, Processing and Transportation Costs              
    Oil ($ / Bbl) $0.65 – $0.85   $0.65 – $0.85
    NGL ($ / Bbl) $2.75 – $4.00   $2.75 – $4.00
    Natural Gas ($ / Mcf) $0.55 – $0.75   $0.55 – $0.75
    Total ($ / Boe) $2.25 – $2.85   $2.25 – $2.85
                   
    Average Costs              
    Lease Operating ($ / Boe) $18.50 – $20.50   $18.50 – $20.50
    Taxes (% of Revenue) (1) 6.0% – 7.0%   6.0% – 7.0%
    Cash General and Administrative ($ / Boe) (2)(3) $3.40 – $3.90   $3.40 – $3.90
                   
    Adjusted EBITDA ($ MM) (2)(3) $100 – $120   $80 – $110
    Cash Interest Expense ($ MM) $12 – $18   $12 – $18
    Capital Investment ($ MM) $70 – $80   $55 – $70
    Free Cash Flow ($ MM) (2)(3) $10 – $30   $10 – $20
                   

    (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 – $1 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

    Amplify maintains a robust hedge book to support its cash flow profile and provide downside protection in weak commodity environments. Recently, the Company added to its hedge position, further protecting future cash flows.

    Amplify executed crude oil swaps covering the first half of 2026 at a weighted average price of $62.55 per barrel and the first half of 2027 with a weighted average price of $61.93 per barrel. The Company also added natural gas swaps covering 2026 at a weighted average price of $4.12 per MMBtu, collars for the first quarter of 2026 with a weighted average floor of $4.50 per MMBtu and a weighted average ceiling of $5.73 and natural gas collars for 2027 with a weighted average floor of $3.57 per MMBtu and a weighted average ceiling of $4.58 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 April 2025 through December 2027, as of May 12, 2025:

      2025   2026   2027
               
    Natural Gas Swaps:          
    Average Monthly Volume (MMBtu)   560,000     515,000     137,500
    Weighted Average Fixed Price ($) $ 3.75   $ 3.80   $ 4.01
               
    Natural Gas Collars:          
    Two-way collars          
    Average Monthly Volume (MMBtu)   500,000     517,500     437,500
    Weighted Average Ceiling Price ($) $ 3.90   $ 4.11   $ 4.21
    Weighted Average Floor Price ($) $ 3.50   $ 3.58   $ 3.56
               
    Oil Swaps:          
    Average Monthly Volume (Bbls)   141,444     125,500     30,667
    Weighted Average Fixed Price ($) $ 70.61   $ 66.40   $ 61.93
               
    Oil Collars:          
    Two-way collars          
    Average Monthly Volume (Bbls)   45,333        
    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.

    Quarterly Report on Form 10-Q

    Amplify’s financial statements and related footnotes will be available in its Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, which Amplify expects to file with the SEC on May 12, 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) 999-3182 at least 15 minutes before the call begins and providing the Conference ID: AEC1Q25. A telephonic replay will be available for fourteen days following the call by dialing (800) 654-1563 and providing the Access Code: 52458798. 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 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, trade wars 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 potential changes in these regulations. 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.

    Use of Non-GAAP Financial Measures

    This press release and accompanying schedules include the non-GAAP financial measures of Adjusted EBITDA, Adjusted Net Income (Loss), 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, net; Income tax expense (benefit); DD&A; 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 properties; Share-based compensation expenses; Exploration costs; Acquisition and divestiture related costs; Loss on settlement of AROs; Bad debt expense; and Pipeline incident loss. 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 (Loss). Amplify defines Adjusted Net Income (Loss) as net income (loss) adjusted for unrealized loss (gain) on commodity derivative instruments, acquisition and 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. 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. As GAAP does not prescribe a comparable GAAP measure for PV-10 of reserves adjusted for pricing sensitives, it is not practicable for us to reconcile PV-10 to a standardized measure or any other GAAP measure.

    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) March 31, 2025   December 31, 2024
             
    Revenues:      
      Oil and natural gas sales $ 70,341     $ 67,189  
      Other revenues   1,709       1,832  
      Total revenues   72,050       69,021  
             
    Costs and Expenses:      
      Lease operating expense   37,417       35,100  
      Pipeline incident loss   396       2,405  
      Gathering, processing and transportation   4,286       4,468  
      Exploration   6       10  
      Taxes other than income   4,384       5,356  
      Depreciation, depletion and amortization   8,494       8,418  
      General and administrative expense   10,815       9,486  
      Accretion of asset retirement obligations   2,183       2,156  
      Realized (gain) loss on commodity derivatives   (503 )     (4,052 )
      Unrealized (gain) loss on commodity derivatives   14,820       13,357  
      (Gain) loss on sale of properties   (6,251 )     (1,367 )
      Other, net   (3 )     334  
      Total costs and expenses   76,044       75,671  
             
    Operating Income (loss)   (3,994 )     (6,650 )
             
    Other Income (Expense):      
      Interest expense, net   (3,519 )     (3,684 )
      Other income (expense)   115       (113 )
      Total other income (expense)   (3,404 )     (3,797 )
             
      Income (loss) before reorganization items, net and income taxes   (7,398 )     (10,447 )
             
    Income tax benefit (expense) – current   (1 )     2,132  
    Income tax benefit (expense) – deferred   1,538       886  
             
      Net income (loss) $ (5,861 )   $ (7,429 )
             
    Earnings per share:      
      Basic and diluted earnings (loss) per share $ (0.15 )   $ (0.19 )
             
    Selected Financial Data – Unaudited      
    Operating Statistics      
               
          Three Months   Three Months
          Ended   Ended
    (Amounts in $000s, except per unit data) March 31, 2025   December 31, 2024
               
    Oil and natural gas revenue:      
      Oil Sales $ 49,982   $ 50,817
      NGL Sales   6,157     6,602
      Natural Gas Sales   14,202     9,770
      Total oil and natural gas sales – Unhedged $ 70,341   $ 67,189
               
    Production volumes:      
      Oil Sales – MBbls   737     760
      NGL Sales – MBbls   263     299
      Natural Gas Sales – MMcf   3,647     3,883
      Total – MBoe   1,607     1,706
      Total – MBoe/d   17.9     18.5
               
    Average sales price (excluding commodity derivatives):      
      Oil – per Bbl $ 67.82   $ 66.82
      NGL – per Bbl $ 23.46   $ 22.09
      Natural gas – per Mcf $ 3.89   $ 2.52
      Total – per Boe $ 43.76   $ 39.37
               
    Average unit costs per Boe:      
      Lease operating expense $ 23.28   $ 20.57
      Gathering, processing and transportation $ 2.67   $ 2.62
      Taxes other than income $ 2.73   $ 3.14
      General and administrative expense $ 6.73   $ 5.56
      Realized gain/(loss) on commodity derivatives $ 0.31   $ 2.38
      Depletion, depreciation, and amortization $ 5.29   $ 4.93
               
    Selected Financial Data – Unaudited      
    Asset Operating Statistics      
             
        Three Months   Three Months
        Ended   Ended
        March 31, 2025   December 31, 2024
             
    Production volumes – MBOE:      
      Bairoil   280       293  
      Beta   315       308  
      Oklahoma   393       436  
      East Texas / North Louisiana   570       609  
      Eagle Ford (Non-op)   49       60  
      Total – MBoe   1,607       1,706  
      Total – MBoe/d   17.9       18.5  
      % – Liquids   62 %     62 %
             
    Lease operating expense – $M:      
      Bairoil $ 13,732     $ 11,800  
      Beta   13,305       12,113  
      Oklahoma   3,856       3,948  
      East Texas / North Louisiana   4,981       5,887  
      Eagle Ford (Non-op)   1,542       1,351  
      Total Lease operating expense: $ 37,416     $ 35,099  
             
    Capital expenditures – $M:      
      Bairoil $ 1,322     $ 190  
      Beta   12,733       10,001  
      Oklahoma   1,445       168  
      East Texas / North Louisiana   3,449       2,758  
      Eagle Ford (Non-op)   3,905       2,125  
      Magnify Energy Services   263       82  
      Total Capital expenditures: $ 23,117     $ 15,324  
             
    Selected Financial Data – Unaudited              
    Balance Sheet Data              
                       
    (Amounts in $000s) March 31, 2025
    		   December 31, 2024
                       
    Assets              
      Cash and Cash Equivalents $ –     $ –  
      Accounts Receivable   35,893       39,713  
      Other Current Assets   24,296       32,064  
        Total Current Assets $ 60,189     $ 71,777  
                       
      Net Oil and Gas Properties $ 400,770     $ 386,218  
      Other Long-Term Assets   292,680       289,081  
        Total Assets $ 753,639     $ 747,076  
                       
    Liabilities              
      Accounts Payable $ 19,863     $ 13,231  
      Accrued Liabilities   40,343       43,413  
      Other Current Liabilities   18,658       11,494  
        Total Current Liabilities $ 78,864     $ 68,138  
                       
      Long-Term Debt $ 125,000     $ 127,000  
      Asset Retirement Obligation   131,158       129,700  
      Other Long-Term Liabilities   15,680       13,326  
        Total Liabilities $ 350,702     $ 338,164  
                       
    Shareholders’ Equity              
      Common Stock & APIC $ 440,266     $ 440,380  
      Accumulated Earnings (Deficit)   (37,329 )     (31,468 )
        Total Shareholders’ Equity $ 402,937     $ 408,912  
                       
    Selected Financial Data – Unaudited      
    Statements of Cash Flows Data      
           
      Three Months   Three Months
      Ended   Ended
    (Amounts in $000s) March 31, 2025   December 31, 2024
           
           
    Net cash provided by (used in) operating activities $ 25,501     $ 12,455  
    Net cash provided by (used in) investing activities   (21,497 )     (19,379 )
    Net cash provided by (used in) financing activities   (4,004 )     6,924  
           
    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) March 31, 2025   December 31, 2024
             
    Reconciliation of Adjusted EBITDA to Net Cash Provided from Operating Activities:    
      Net cash provided by operating activities $ 25,501     $ 12,455  
      Changes in working capital   (5,372 )     4,770  
      Interest expense, net   3,519       3,684  
      Amortization of gain associated with terminated commodity derivatives   159       159  
      Amortization and write-off of deferred financing fees   (315 )     (315 )
      Exploration costs   6       10  
      Acquisition and divestiture related costs   1,629       1,424  
      Plugging and abandonment cost   171       754  
      Current income tax expense (benefit)   1       (2,132 )
      Pipeline incident loss   396       2,405  
      (Gain) loss on sale of properties   (6,251 )     (1,367 )
    Adjusted EBITDA: $ 19,444     $ 21,847  
             
    Reconciliation of Free Cash Flow to Net Cash Provided from Operating Activities:    
    Adjusted EBITDA: $ 19,444     $ 21,847  
      Less: Cash interest expense   3,545       3,598  
      Less: Capital expenditures   23,117       15,324  
    Free Cash Flow: $ (7,218 )   $ 2,925  
             
    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) March 31, 2025   December 31, 2024
             
    Reconciliation of Adjusted EBITDA to Net Income (Loss):      
      Net income (loss) $ (5,861 )   $ (7,429 )
      Interest expense, net   3,519       3,684  
      Income tax expense (benefit) – current   1       (2,132 )
      Income tax expense (benefit) – deferred   (1,538 )     (886 )
      Depreciation, depletion and amortization   8,494       8,418  
      Accretion of asset retirement obligations   2,183       2,156  
      (Gains) losses on commodity derivatives   14,317       9,305  
      Cash settlements received (paid) on expired commodity derivative instruments   503       4,052  
      Amortization of gain associated with terminated commodity derivatives   159       159  
      Acquisition and divestiture related costs   1,629       1,424  
      Share-based compensation expense   1,890       1,686  
      (Gain) loss on sale of properties   (6,251 )     (1,367 )
      Exploration costs   6       10  
      Loss on settlement of AROs   (3 )     334  
      Bad debt expense   –       28  
      Pipeline incident loss   396       2,405  
    Adjusted EBITDA: $ 19,444     $ 21,847  
             
      Reconciliation of Free Cash Flow to Net Income (Loss):      
      Adjusted EBITDA: $ 19,444     $ 21,847  
      Less: Cash interest expense   3,545       3,598  
      Less: Capital expenditures   23,117       15,324  
      Free Cash Flow: $ (7,218 )   $ 2,925  
             
    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) March 31, 2025   December 31, 2024
               
    Reconciliation of Adjusted Net Income (Loss):      
      Net income (loss) $ (5,861 )   $ (7,429 )
      Unrealized (gain) loss on commodity derivatives   14,820       13,357  
      Acquisition and divestiture related costs   1,629       1,424  
      Non-recurring costs:      
        Income tax expense (benefit) – deferred   (1,538 )     (886 )
        Gain on sale of properties   (6,251 )     (1,367 )
      Tax effect of adjustments   971       (12 )
        Adjusted net income (loss) $ 3,770     $ 5,087  
               
    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) March 31, 2025   December 31, 2024
               
    General and administrative expense $ 10,815   $ 9,486
    Less: Share-based compensation expense   1,890     1,686
    Less: Acquisition and divestiture costs   1,629     1,424
    Less: Bad debt expense   —     28
    Less: Severance payments   —     —
    Total Cash General and Administrative Expense $ 7,296   $ 6,348
               

    The MIL Network –

  • MIL-OSI: GigaCloud Technology Inc Announces First Quarter Ended March 31, 2025 Financial Results

    Source: GlobeNewswire (MIL-OSI)

    EL MONTE, Calif., May 12, 2025 (GLOBE NEWSWIRE) — GigaCloud Technology Inc (Nasdaq: GCT) (“GigaCloud” or the “Company”), a pioneer of global end-to-end B2B technology solutions for large parcel merchandise, today announced financial results for the first quarter ended March 31, 2025, including sustained revenue and GMV growth over the comparable prior year period.

    First Quarter 2025 Financial Highlights

    • Total revenues of $271.9 million, increased 8.3% year-over-year.
    • Gross profit of $63.7 million, decreased 4.2% year-over-year.
      Gross margin was 23.4%, compared to 26.5% in the first quarter of 2024.
    • Net income of $27.1 million, in line with $27.2 million reported in the prior-year period.
      Net income margin was 10.0%, compared to 10.8% in the first quarter of 2024.
      Diluted EPS increased 3.0% year-over-year to $0.68.
    • Adjusted EBITDA1 of $33.2 million, decreased 3.8% year-over-year.
      Adjusted EPS – diluted2 of $0.83, decreased 1.2% year-over-year.
    • Cash and cash equivalents, Restricted Cash, and Investments totaled $287.5 million as of March 31, 2025, a 5.1% decrease from December 31, 2024.

    Operational Highlights

    • GigaCloud Marketplace GMV3 increased 56.1% year-over-year to $1,416.7 million for the 12 months ended March 31, 2025.
    • 3P seller GigaCloud Marketplace GMV4 increased 49.9% year-over-year to $734.3 million for the 12 months ended March 31, 2025. 3P seller GigaCloud Marketplace GMV represented 51.8% of total GigaCloud Marketplace GMV for the 12 months ended March 31, 2025.
    • Active 3P sellers5 increased 33.4% year-over-year to 1,154 for the 12 months ended March 31, 2025.
    • Active buyers6 increased 81.4% year-over-year to 9,966 for the 12 months ended March 31, 2025.
    • Spend per active buyer7 was $142,156 for the 12 months ended March 31, 2025.

    “Despite persistent industry headwinds, we continue to grow and see the strength of the GigaCloud Marketplace come through—buyers and sellers continue to lean in during times of volatility and challenge. That is a testament to the efficiency and value created by our Supplier Fulfilled Retailing (SFR) model,” said Larry Wu, Founder, Chairman, and Chief Executive Officer. “We are building GigaCloud to thrive for the long-term by empowering our partners to do business smarter in an increasingly complex global market. While we are actively managing near-term macro uncertainty, the positive long-term fundamentals reinforce our confidence in delivering lasting value.”

    “In September 2024, our Board of Directors approved a share repurchase program of $46 million, and subsequently increased the total authorized amount to $62 million in March 2025. As of today, we have repurchased approximately 3.7 million shares for $61.8 million—close to 150% of the gross proceeds raised in our IPO—at a weighted average price well above our IPO offering price. We remain positioned to deploy additional capital through future repurchase authorizations, balancing capital returns and growth investments to drive future shareholder value creation,” said Erica Wei, Chief Financial Officer.

    Business Outlook

    The Company expects its total revenues to be between $275 million and $305 million in the second quarter of 2025. This forecast reflects the Company’s current and preliminary views on the market and operational conditions, which are subject to change and cannot be predicted with reasonable accuracy as of the date hereof.

    Share Repurchase Program

    In September 2024, the Company’s Board of Directors (the “Board”) approved a $46 million share repurchase program, which was increased by $16 million to $62 million on March 28, 2025. Following quarter-end, on May 8, 2025, the Board approved an additional $16 million, bringing the total authorization to $78 million. The program runs through August 28, 2025. As of May 12, 2025, the Company has repurchased approximately 3.7 million of its Class A ordinary shares for $61.8 million.

    Under the share repurchase program, the Company may purchase its ordinary shares through various means, including open market transactions, privately negotiated transactions, block trades, any combination thereof or other legally permissible means. The Company may effect repurchase transactions in compliance with Rule 10b5-1 and Rule 10b-18 of the Securities Exchange Act of 1934, as amended. The number of shares repurchased and the timing of repurchases will depend on a number of factors, including, but not limited to, price, trading volume and general market conditions, along with the Company’s working capital requirements, general business conditions and other factors.

    Conference Call

    The Company will host a conference call to discuss its financial results at 6:30 pm U.S. Eastern Time on May 12, 2025. Participants who wish to join the call should pre-register here at https://s1.c-conf.com/diamondpass/10046996-fh4na1.html. Upon registration, participants will receive the dial-in number and a unique PIN, which can be used to join the conference call. If participants register and forget their PIN or lose their registration confirmation email, they may re-register to receive a new PIN. All participants are encouraged to dial in 15 minutes prior to the start time.

    A live and archived webcast of the conference call will be accessible on the Company’s investor relations website at: https://investors.gigacloudtech.com/.

    About GigaCloud Technology Inc

    GigaCloud Technology Inc is a pioneer of global end-to-end B2B technology solutions for large parcel merchandise. The Company’s B2B ecommerce platform, which it refers to as the “GigaCloud Marketplace,” integrates everything from discovery, payments and logistics tools into one easy-to-use platform. The Company’s global marketplace seamlessly connects manufacturers, primarily in Asia, with resellers, primarily in the U.S., Asia and Europe, to execute cross-border transactions with confidence, speed and efficiency. The Company offers a truly comprehensive solution that transports products from the manufacturer’s warehouse to the end customer’s doorstep, all at one fixed price. The Company first launched its marketplace in January 2019 by focusing on the global furniture market and has since expanded into additional categories such as home appliances and fitness equipment. For more information, please visit the Company’s website: https://investors.gigacloudtech.com/.

    Non-GAAP Financial Measures

    The Company uses certain non-GAAP financial measures, including Adjusted EBITDA and Adjusted EPS – diluted, to understand and evaluate its core operating performance. Adjusted EBITDA is net income excluding interest, income taxes and depreciation, further adjusted to exclude share-based compensation expense. Adjusted EPS – diluted is a financial measure defined as our Adjusted EBITDA divided by our diluted weighted-average shares outstanding, respectively. Management uses Adjusted EBITDA and Adjusted EPS – diluted as measures of operating performance, for planning purposes, to allocate resources to enhance the financial performance of our business, to evaluate the effectiveness of our business strategies and in communications with our Board of Directors and investors concerning our financial performance. Non-GAAP financial measures, which may differ from similarly titled measures used by other companies, are presented to enhance investors’ overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with U.S. GAAP.

    For more information on the non-GAAP financial measures, please see the tables captioned “Unaudited Reconciliation of Adjusted EBITDA” and “Unaudited Reconciliation of Adjusted EPS – diluted” set forth at the end of this press release.

    Forward-Looking Statements

    This press release contains “forward-looking statements”. Forward-looking statements reflect our current view about future events. These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company’s current expectations and projections about future events that the Company believes may affect its financial condition, results of operations, business strategy and financial needs. Investors can identify these forward-looking statements by words or phrases such as “may,” “will,” “could,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “is/are likely to,” “propose,” “potential,” “continue” or similar expressions. The Company undertakes no obligation to update or revise publicly any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company’s registration statement and other filings with the SEC.

    For investor and media inquiries, please contact:

    GigaCloud Technology Inc

    Investor Relations

    Email: ir@gigacloudtech.com

    PondelWilkinson, Inc.

    Laurie Berman (Investors) – lberman@pondel.com

    George Medici (Media) – gmedici@pondel.com

     
    GigaCloud Technology Inc
    UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
    (In thousands except for share data and per share data)
     
        March 31,
    2025    		   December 31,
    2024
    ASSETS        
    Current assets        
    Cash and cash equivalents   $ 251,711   $ 259,759
    Restricted cash     697     685
    Investments     35,101     42,674
    Accounts receivable, net     67,000     57,313
    Inventories     204,854     172,489
    Prepayments and other current assets     19,842     14,672
    Total current assets     579,205     547,592
    Non-current assets        
    Operating lease right-of-use assets     438,692     451,930
    Property and equipment, net     32,688     29,498
    Intangible assets, net     5,893     6,198
    Goodwill     12,586     12,586
    Deferred tax assets     11,366     10,026
    Other non-current assets     10,607     12,645
    Total non-current assets     511,832     522,883
    Total assets   $ 1,091,037   $ 1,070,475
     
    GigaCloud Technology Inc
    UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (continued)
    (In thousands)
     
      March 31,
    2025    		   December 31,
    2024
    LIABILITIES AND SHAREHOLDERS’ EQUITY      
    Current liabilities      
    Accounts payable $ 87,814     $ 78,163  
    Contract liabilities   5,665       4,486  
    Current operating lease liabilities   90,823       88,521  
    Income tax payable   20,001       13,615  
    Accrued expenses and other current liabilities   87,510       79,594  
    Total current liabilities   291,813       264,379  
    Non-current liabilities      
    Operating lease liabilities, non-current   380,842       395,235  
    Deferred tax liabilities   759       941  
    Finance lease obligations, non-current   241       382  
    Non-current income tax payable   4,485       4,321  
    Total non-current liabilities   386,327       400,879  
    Total liabilities $ 678,140     $ 665,258  
    Commitments and contingencies $ —     $ —  
    Shareholders’ equity        
    Treasury shares, at cost (2,008,984 and 609,390 shares held as of March 31, 2025 and December 31, 2024, respectively)   $ (34,550 )   $ (11,816 )
    Class A ordinary shares $0.05 par value, 50,673,268 shares authorized, 32,881,519 and 32,878,735 shares issued as of March 31, 2025 and December 31, 2024, respectively, 30,872,535 and 32,269,345 shares outstanding as of March 31, 2025 and December 31, 2024, respectively)     1,643       1,643  
    Class B ordinary shares ($0.05 par value, 9,326,732 shares authorized as of March 31, 2025 and December 31, 2024, 8,076,732 shares issued and outstanding as of March 31, 2025 and December 31, 2024)     403       403  
    Additional paid-in capital     121,490       120,262  
    Accumulated other comprehensive loss     (2,096 )     (4,136 )
    Retained earnings     326,007       298,861  
    Total shareholders’ equity     412,897       405,217  
    Total liabilities and shareholders’ equity   $ 1,091,037     $ 1,070,475  
     
    GigaCloud Technology Inc
    UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
    (In thousands except for share data and per share data)
     
      Three Months Ended
    March 31,
        2025       2024  
    Revenues      
    Service revenues $ 94,068     $ 76,623  
    Product revenues   177,838       174,454  
    Total revenues   271,906       251,077  
    Cost of revenues      
    Services   79,156       62,700  
    Products   129,024       121,829  
    Total cost of revenues   208,180       184,529  
    Gross profit   63,726       66,548  
    Operating expenses      
    Selling and marketing expenses   18,558       14,580  
    General and administrative expenses   14,340       15,389  
    Research and development expenses   2,493       1,756  
    Losses on disposal of property and equipment   12       6  
    Total operating expenses   35,403       31,731  
    Operating income   28,323       34,817  
    Interest expense   (23 )     (81 )
    Interest income   2,621       1,609  
    Foreign currency exchange gains (losses), net   792       (2,709 )
    Government grants   213       6  
    Others, net   579       (322 )
    Income before income taxes   32,505       33,320  
    Income tax expense   (5,359 )     (6,125 )
    Net income $ 27,146     $ 27,195  
    Net income attributable to ordinary shareholders   27,146       27,195  
    Foreign currency translation adjustment, net of income taxes of nil   411       (112 )
    Net unrealized loss on available-for-sale investments   (6 )     —  
    Intra-entity foreign currency transactions gain   1,636       —  
    Release of foreign currency translation reserve related to liquidation of subsidiaries   (1 )     —  
    Total other comprehensive income (loss)   2,040       (112 )
    Comprehensive Income $ 29,186     $ 27,083  
    Net income per ordinary share      
    —Basic $ 0.68     $ 0.67  
    —Diluted $ 0.68     $ 0.66  
    Weighted average number of ordinary shares outstanding used in computing net income per ordinary share      
    —Basic   40,020,265       40,788,658  
    —Diluted   40,138,522       40,950,170  
     
    GigaCloud Technology Inc
    UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
    (In thousands)
     
      Three Months Ended March 31,
        2025       2024  
    Cash flows from operating activities:      
    Net income $ 27,146     $ 27,195  
    Adjustments to reconcile net income to net cash provided by operating activities:      
    Depreciation and amortization   2,049       2,081  
    Share-based compensation   1,227       275  
    Operating lease   1,125       8,806  
    Changes in accounts receivables, net   (9,011 )     (632 )
    Changes in inventories   (30,845 )     (56,047 )
    Changes in prepayments and other assets   (3,217 )     (2,364 )
    Changes in accounts payable, accrued expenses and other current liabilities   14,551       27,886  
    Changes in contract liabilities   1,096       2,045  
    Changes in income tax payable   6,418       6,552  
    Changes in deferred income taxes   (1,511 )     (2,034 )
    Other operating activities   405       1,546  
    Net cash provided by operating activities   9,433       15,309  
    Cash flows from investing activities:      
    Purchases of property and equipment   (2,395 )     (3,993 )
    Disposals of property and equipment   34       1,525  
    Purchases of investments   (25,000 )     (10,000 )
    Sales and maturities of investments   31,986       —  
    Net cash provided by (used in) investing activities   4,625       (12,468 )
    Cash flows from financing activities:      
    Repayment of finance lease obligations   (34 )     (595 )
    Repurchases of ordinary shares   (22,734 )     —  
    Net cash used in financing activities   (22,768 )     (595 )
    Effect of foreign currency exchange rate changes on cash, cash equivalents and restricted cash   674       (306 )
    Net increase (decrease) in cash, cash equivalents and restricted cash   (8,036 )     1,940  
    Cash, cash equivalents and restricted cash at the beginning of the period   260,444       184,168  
    Cash, cash equivalents and restricted cash at the end of the period $ 252,408     $ 186,108  
    Supplemental disclosure of cash flow information      
    Cash paid for interest expense   23       81  
    Cash paid for income taxes   552       1,596  
     
    GigaCloud Technology Inc
    UNAUDITED RECONCILIATION OF ADJUSTED EBITDA
    (In thousands, except for per share data)
     
      Three Months Ended
    March 31,
        2025       2024  
      (In thousands)
    Net Income $ 27,146     $ 27,195  
    Add: Income tax expense   5,359       6,125  
    Add: Interest expense   23       81  
    Less: Interest income   (2,621 )     (1,609 )
    Add: Depreciation and amortization   2,049       2,081  
    Add: Share-based compensation expenses   1,227       275  
    Add: Non-recurring items(1)   —       349  
    Adjusted EBITDA $ 33,183     $ 34,497  

    ________________________
    (1) During the three months ended March 31, 2024, one of our fulfillment centers in Japan experienced a fire. As a result of the fire, we recognized losses of $1.8 million. Based on the provisions of our insurance policy, we have determined that partial recovery of the incurred losses is probable as of March 31, 2024 and therefore recorded an insurance recovery of $1.5 million. We do not believe such losses to be recurring or frequent in nature.

    UNAUDITED RECONCILIATION OF ADJUSTED EPS – DILUTED

      Three Months Ended
    March 31,
        2025       2024  
    Net income per ordinary share – diluted $ 0.68     $ 0.66  
    Adjustments, per ordinary share:      
    Add: Income tax expense   0.13       0.15  
    Add: Interest expense   —       —  
    Less: Interest income   (0.07 )     (0.04 )
    Add: Depreciation and amortization   0.05       0.05  
    Add: Share-based compensation expenses   0.04       0.01  
    Add: Non-recurring items(1)   —       0.01  
    Adjusted EPS – diluted $ 0.83     $ 0.84  
           
    Weighted average number of ordinary shares outstanding – diluted   40,138,522       40,950,170  

    ________________________
    (1) During the three months ended March 31, 2024, one of our fulfillment centers in Japan experienced a fire. As a result of the fire, we recognized losses of $1.8 million. Based on the provisions of our insurance policy, we have determined that partial recovery of the incurred losses is probable as of March 31, 2024 and therefore recorded an insurance recovery of $1.5 million. We do not believe such losses to be recurring or frequent in nature.

    ________________________
    1 Adjusted EBITDA is a non-GAAP financial measure. For more information on the non-GAAP financial measure, please see the section of “Non-GAAP Financial Measure” and the table captioned “Unaudited Reconciliation of Adjusted EBITDA” set forth at the end of this press release.

    2 Adjusted EPS – diluted is a non-GAAP financial measure. For more information on the non-GAAP financial measure, please see the section of “Non-GAAP Financial Measure” and the table captioned “Unaudited Reconciliation of Adjusted EPS – diluted” set forth at the end of this press release.

    3 GigaCloud Marketplace GMV means the total gross merchandise value of transactions ordered through our GigaCloud Marketplace including GigaCloud 3P and GigaCloud 1P, before any deductions of value added tax, goods and services tax, shipping charges paid by buyers to sellers and any refunds.

    4 3P seller GigaCloud Marketplace GMV means the total gross merchandise value of transactions sold through our GigaCloud Marketplace by 3P sellers, before any deductions of value added tax, goods and services tax, shipping charges paid by buyers to sellers and any refunds.

    5 Active 3P sellers means sellers who have sold a product in GigaCloud Marketplace within the last 12-month period, irrespective of cancellations or returns.

    6 Active buyers means buyers who have purchased a product in the GigaCloud Marketplace within the last 12-month period, irrespective of cancellations or returns.

    7 Spend per active buyer is calculated by dividing the total GigaCloud Marketplace GMV within the last 12-month period by the number of active buyers as of such date.

    The MIL Network –

  • MIL-OSI: Runway Growth Finance Corp. Reports First Quarter 2025 Financial Results

    Source: GlobeNewswire (MIL-OSI)

    Delivered Total and Net Investment Income of $35.4 million and $15.6 million, Respectively

    Investment Portfolio of $1.0 billion

    Conference Call Today, Monday, May 12, 2025 at 5:00 p.m. ET

    MENLO PARK, Calif., May 12, 2025 (GLOBE NEWSWIRE) — Runway Growth Finance Corp. (Nasdaq: RWAY) (“Runway Growth” or the “Company”), a leading provider of flexible capital solutions to late- and growth-stage companies seeking an alternative to raising equity, today announced its financial results for the first quarter ended March 31, 2025.

    First Quarter 2025 Highlights

    • Total investment income of $35.4 million
    • Net investment income of $15.6 million, or $0.42 per share
    • Net asset value of $503.3 million, or $13.48 per share
    • Dollar-weighted annualized yield on debt investments of 15.44%
    • Three investments completed in existing portfolio companies, representing $50.7 million in funded investments
    • Aggregate proceeds of $71.9 million in principal prepayments and $3.7 million from scheduled amortization
    • Aggregate proceeds of $38.1 million in equity sale proceeds, resulting in net realized gains of $7.4 million
    • Total net realized gains on investments of $6.1 million

    Second Quarter 2025 Distributions

    • Declared second quarter 2025 regular dividend of $0.33 per share
    • Declared second quarter 2025 supplemental dividend of $0.02 per share

    “In the first quarter of 2025, Runway Growth advanced its platform strategy, enhancing origination channels as we seek to maximize our portfolio,” said David Spreng, Founder and CEO of Runway Growth. “For the first quarter, we delivered net investment income of $15.6 million, comfortably covered our quarterly distributions, and executed on three investments in existing portfolio companies. As officially part of the broader BC Partners platform, we believe we have ample liquidity to move both opportunistically and selectively when the right investments arise. Looking ahead, we are well positioned to optimize our portfolio while maintaining credit-first underwriting practices as we deliver strong returns for our shareholders.”

    First Quarter 2025 Operating Results

    Total investment income for the quarter ended March 31, 2025 was $35.4 million, compared to $40.0 million for the quarter ended March 31, 2024.

    Net investment income for the quarter ended March 31, 2025 was $15.6 million, or $0.42 per share, compared to $18.7 million, or $0.46 per share, for the quarter ended March 31, 2024.

    The Company’s dollar-weighted annualized yield on average debt investments for the quarter ended March 31, 2025 was 15.4%. The Company calculates the yield on dollar-weighted debt investments for any period measured as (1) total investment-related income during the period divided by (2) the daily average of the fair value of debt investments, including investments on non-accrual status, outstanding during the period.

    Total operating expenses for the quarter ended March 31, 2025 were $19.8 million, compared to $21.3 million for the quarter ended March 31, 2024.

    Net realized gain on investments was $6.1 million for the quarter ended March 31, 2025, compared to no net realized gains or losses for the quarter ended March 31, 2024.

    For the quarter ended March 31, 2025, net change in unrealized loss on investments was $19.8 million, compared to a net change in unrealized loss on investments of $6.6 million for the comparable prior year period.

    Portfolio and Investment Activity

    As of March 31, 2025, Runway Growth’s investment portfolio had an aggregate fair value of $1.0 billion in 52 companies, comprising $946.4 million in term loans, 97.9% of which are senior secured loans, and $57.8 million in warrants and other equity-related investments.

    During the first quarter of 2025, Runway Growth funded three investments in existing portfolio companies, representing $15.3 million in funded loans, which is net of refinances of $35.0 million and upfront loan origination fees of $0.4 million.

    Total portfolio investment activity for the three months ended March 31, 2025 and 2024 was as follows:

         
      Three Months Ended March 31,  
         
      2025     2024  
    Beginning investment portfolio $ 1,076,840     $ 1,067,009  
    Purchases of investments   15,320       24,642  
    PIK interest   3,260       4,176  
    Sales and prepayments of investments   (74,978 )     (34,449 )
    Scheduled repayments of investments   (3,665 )     (413 )
    Sales and maturities of U.S. Treasury Bills   –       (42,029 )
    Amortization of fixed income premiums or accretion of discounts   1,189       4,013  
    Net realized gain (loss) on investments   6,057       –  
    Net change in unrealized gain (loss) on investments   (19,790 )     (6,617 )
    Ending investment portfolio $ 1,004,233     $ 1,016,332  
                   

    Net Asset Value

    As of March 31, 2025, net asset value per share was $13.48, compared to $13.36 as of March 31, 2024. Total net assets at the end of the first quarter of 2025 was $503.3 million, down 4.9% from $529.5 million as of March 31, 2024.

    For the quarter ended March 31, 2025, our net increase in net assets resulting from operations was $1.9 million, or $0.05 per share, compared to a net increase in net assets resulting from operations of $12.0 million, or $0.30 per share, for the quarter ended March 31, 2024.

    Liquidity and Capital Resources

    As of March 31, 2025, the Company had approximately $315.4 million in available liquidity, including unrestricted cash and cash equivalents of $18.4 million and $297.0 million in available borrowing capacity under the Company’s credit facility, subject to existing terms, advance rates and regulatory and covenant requirements.

    The Company ended the quarter with a core leverage ratio of approximately 99%, compared to 108% for the quarter ended December 31, 2024.

    Distributions

    On May 7, 2025, the Company’s board of directors (the “Board of Directors”) declared a regular quarterly distribution of $0.33 per share and a supplemental distribution of $0.02 per share for stockholders of record as of May 19, 2025, each payable on June 3, 2025.

    Recent Developments

    The Company evaluated events subsequent to March 31, 2025 through May 12, 2025, the date the consolidated financial statements were issued. There have been no subsequent events that occurred during such period that would require recognition or disclosure, except as disclosed below.

    Borrowings

    On April 7, 2025, the Company entered into the Master Note Purchase Agreement, dated April 7, 2025 (the “Note Purchase Agreement”), governing the issuance of 7.51% Series 2025A Senior Notes due April 7, 2028 (the “Series 2025A Notes”), in aggregate principal amount of $107.0 million, to institutional investors in a private placement.

    The Series 2025A Notes have a fixed interest rate of 7.51% per year. The Company used the net proceeds from the offering of the Series 2025A Notes to repay outstanding indebtedness, make investments in accordance with the Company’s investment objective and investment strategy, and for other general corporate purposes of the Company.

    The Series 2025A Notes will mature on April 7, 2028 unless redeemed, purchased or prepaid prior to such date by the Company in accordance with the terms of the Note Purchase Agreement. Interest on the Series 2025A Notes will be due semiannually on April 7 and October 7 of each year, beginning on October 7, 2025. In addition, the Company is obligated to offer to repay the Series 2025A Notes at par (plus accrued and unpaid interest to, but not including, the date of prepayment) if certain change in control events occur. Subject to the terms of the Note Purchase Agreement, so long as no Default or Event of Default (each as defined in the Note Purchase Agreement) shall then exist, at any time on or after October 7, 2027, the Company may, at its option, prepay all or any part of the 2025A Notes at 100% of the principal amount so prepaid, together with, in each case, accrued interest to the prepayment date.

    The Note Purchase Agreement contains customary terms and conditions for senior notes issued in a private placement, including, without limitation, affirmative and negative covenants related to information reporting, maintenance of the Company’s status as a business development company within the meaning of the Investment Company Act of 1940, as amended, and a regulated investment company under the Internal Revenue Code of 1986, as amended, minimum shareholders’ equity, minimum asset coverage ratio and maximum secured debt ratio. The Note Purchase Agreement also contains customary events of default with customary cure and notice periods.

    Recent Portfolio Activity

    From April 1, 2025 through May 12, 2025, the Company completed $40.0 million of additional debt commitments, of which $27.0 million was funded upon closing.

    Share Repurchase Program

    On May 7, 2025, the Board of Directors approved a repurchase program (the “New Repurchase Program”) under which the Company may repurchase up to $25.0 million of its outstanding common stock. Under the New Repurchase Program, purchases may be made at management’s discretion from time to time in open-market transactions, in accordance with all applicable securities laws and regulations. If not renewed, the New Repurchase Program will terminate upon the earlier of (i) May 7, 2026 or (ii) the repurchase of $25.0 million of the Company’s outstanding shares of common stock.

    Conference Call

    Runway Growth will hold a conference call to discuss its first quarter ended March 31, 2025 financial results at 2:00 p.m. PT (5:00 p.m. ET) on Monday, May 12, 2025. To participate in the conference call or webcast, participants should register online at the Runway Investor Relations website. The earnings call can also be accessed through the following links:

    A live webcast will be available in the investor section of the Company’s website, and will be archived for 90 days following the call.

    About Runway Growth Finance Corp.

    Runway Growth is a growing specialty finance company focused on providing flexible capital solutions to late- and growth-stage companies seeking an alternative to raising equity. Runway Growth is a closed-end investment fund that has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended. Runway Growth is externally managed by Runway Growth Capital LLC, an established registered investment advisor that was formed in 2015 and led by industry veteran David Spreng. For more information, please visit www.runwaygrowth.com.

    Forward-Looking Statements

    Statements included herein may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements other than statements of historical facts included in this press release may constitute forward-looking statements and are not guarantees of future performance, condition or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in Runway Growth’s filings with the Securities and Exchange Commission. Runway Growth undertakes no duty to update any forward-looking statement made herein. All forward-looking statements speak only as of the date of this press release.

    Important Disclosures

    Strategies described involve special risks that should be evaluated carefully before a decision is made to invest. Not all of the risks and other significant aspects of these strategies are discussed herein.  Please see a more detailed discussion of these risk factors and other related risks in the Company’s most recent annual report on Form 10-K in the section entitled “Risk Factors”, and in the Company’s quarterly report on Form 10-Q for the quarter ended March 31, 2025, which may be obtained on the Company’s website, www.runwaygrowth.com, or the SEC’s website, www.sec.gov. 

    IR Contacts:

    Taylor Donahue, Prosek Partners, tdonahue@prosek.com 

    Thomas B. Raterman, Chief Financial Officer and Chief Operating Officer, tr@runwaygrowth.com 

    RUNWAY GROWTH FINANCE CORP.
    Consolidated Statements of Assets and Liabilities
    (In thousands, except share and per share data)    		  
      March 31, 2025   December 31, 2024  
        (Unaudited)      
    Assets            
    Investments at fair value:            
    Non-control/non-affiliate investments at fair value (cost of $1,039,965 and $1,038,135, respectively) $ 997,359   $ 1,005,328  
    Affiliate investments at fair value (cost of $4,551 and $59,198, respectively)   —     64,572  
    Control investments at fair value (cost of $6,550 and $6,550, respectively)   6,874     6,940  
    Total investments at fair value (cost of $1,051,066 and $1,103,883, respectively)   1,004,233     1,076,840  
    Cash and cash equivalents   18,356     5,751  
    Interest and fees receivable   8,730     8,141  
    Other assets   1,577     623  
    Total assets   1,032,896     1,091,355  
    Liabilities            
    Debt:            
    Credit facility   253,000     311,000  
    2026 Notes   95,000     95,000  
    2027 Notes   152,250     152,250  
    Unamortized deferred financing costs   (8,043 )   (5,918 )
    Total debt, less unamortized deferred financing costs   492,207     552,332  
    Distributions payable   13,445     —  
    Incentive fees payable   14,045     14,106  
    Interest payable   7,656     7,743  
    Accrued expenses and other liabilities   2,253     2,305  
    Total liabilities   529,606     576,486  
    Net assets            
    Common stock, par value   373     373  
    Additional paid-in capital   557,992     557,992  
    Accumulated undistributed (overdistributed) earnings   (55,075 )   (43,496 )
    Total net assets $ 503,290   $ 514,869  
                 
    Shares of common stock outstanding ($0.01 par value, 100,000,000 shares authorized)   37,347,428     37,347,428  
    Net asset value per share $ 13.48   $ 13.79  
    RUNWAY GROWTH FINANCE CORP.
    Consolidated Statements of Operations
    (Unaudited)
    (In thousands, except share and per share data)    		  
       
      Three Months Ended March 31,  
      2025   2024  
    Investment income            
    From non-control/non-affiliate investments:            
    Interest income $ 30,109   $ 34,455  
    Payment-in-kind interest income   3,651     4,207  
    Dividend income   318     —  
    Fee income   229     620  
    From affiliate investments:            
    Interest income   646     599  
    Fee income   256     —  
    Other income   189     128  
    Total investment income   35,398     40,009  
    Operating expenses            
    Management fees   4,009     3,952  
    Incentive fees   3,929     4,668  
    Interest and other debt financing expenses   10,287     10,860  
    Professional fees   454     662  
    Administration agreement expenses   625     564  
    Insurance expense   155     208  
    Tax expense   110     2  
    Other expenses   230     429  
    Total operating expenses   19,799     21,345  
    Net investment income   15,599     18,664  
    Net realized and net change in unrealized gain (loss) on investments            
    Net realized gain (loss) on non-control/non-affiliate investments   (2,886 )   —  
    Net realized gain (loss) on affiliate investments   8,943     —  
    Net realized gain (loss) on investments   6,057     —  
    Net change in unrealized gain (loss) on non-control/non-affiliate investments   (9,799 )   (5,065 )
    Net change in unrealized gain (loss) on affiliate investments   (9,925 )   (1,552 )
    Net change in unrealized gain (loss) on control investments   (66 )   —  
    Net change in unrealized gain (loss) on investments   (19,790 )   (6,617 )
    Net realized and unrealized gain (loss) on investments   (13,733 )   (6,617 )
    Net increase (decrease) in net assets resulting from operations $ 1,866   $ 12,047  
    Net investment income per common share (basic and diluted) $ 0.42   $ 0.46  
    Net increase (decrease) in net assets resulting from operations per common share (basic and diluted) $ 0.05   $ 0.30  
    Weighted average shares outstanding (basic and diluted)   37,347,428     40,392,255  

    The MIL Network –

  • MIL-OSI: Exodus Reports First Quarter 2025 Results

    Source: GlobeNewswire (MIL-OSI)

    OMAHA, Neb., May 12, 2025 (GLOBE NEWSWIRE) — Exodus Movement, Inc. (NYSE American: EXOD) (“Exodus”), a leading self-custodial cryptocurrency platform, today announced its unaudited results for the first quarter ended March 31, 2025.

    First Quarter 2025 Financial Highlights (Unaudited)

           
    In USD millions, except percentages Q1 2025 Q1 2024  % Change
                       
    Revenue $ 36.0   $ 29.1     24 %
                       
    Technology, development and user support   14.9     10.7     39 %
                       
    General and administrative   14.3     8.0     79 %
                       
    Loss (gain) on digital assets, net   28.8     (56.8 )   (151 %)
                       
    Net (loss) income   (12.9 )   54.8     (124 %)
                       

    “Exodus continues to offer innovative solutions that capitalize on the growing market for digital assets,” said JP Richardson, CEO and co-founder of Exodus. “Meanwhile, our focus on self-custody remains a difference-maker.”

    First Quarter Operational and Other Financial Highlights

    • Exchange provider processed volume – $2.18 billion in Q1 2025, down 7% from Q4 2024. Bitcoin, Tether (TRX Network), Solana, Tether (ETH Network), ETH, and XRP were the top assets traded in Q1 2025, at 16%, 11%, 11%, 9%, 8%, and 8% of volume, respectively.
    • Exodus monthly active users – 1.6 million at end of Q1 2025, down 30% from 2.3 million as of December 31, 2024.
    • Exodus quarterly funded users – 1.8 million at end of Q1 2025, down 5% from 1.9 million as of December 31, 2024.
    • Digital assets, cash, and cash equivalents – $238.0 million, including 2,011 units of Bitcoin valued at $166.0 million, 2,693 units of Ether valued at $4.9 million, and $62.8 million in cash and cash equivalents, USD Coin (USDC), and Treasury bills as of March 31, 2025.
    • Full-time equivalent team members – approximately 210 as of March 31 2025, unchanged from the prior quarter.
    • Customer response time – average response time of less than 60 minutes in Q1.

    “Q1 saw our highest first quarter revenue and second best revenue quarter on record.” said James Gernetzke, CFO of Exodus. “With an abundance of opportunities at our doorstep, Exodus is well-positioned to expand within our industry and beyond, well into the future.”

    Q1 2025 Webcast 

    Exodus will host a webcast of its preliminary first quarter 2025 fiscal results beginning at 4:30PM (Eastern Time) on May 12, 2025. To access the webcast, please use this link. It will also be carried on the Company’s website exodus.com/investors. Supplementary materials will also be made available prior to the webcast on the “Investor Relations” portion of the Company website, and a replay of the video webcast will be available following the live event for at least 90 days thereafter.

    Investor Contact
    investors@exodus.com

    Disclosure Information

    Exodus may use its website and the following social media outlets as distribution channels of material nonpublic information about the Company. Financial and other important information regarding the Company is routinely accessible through and posted on the following: websites exodus.com/investors and exodus.com/blog, and social media: X (@exodus and JP Richardson’s feed @jprichardson), Facebook, LinkedIn, and YouTube.

    Forward-Looking Statements

    This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, may be forward-looking statements. Forward-looking statements are based on our beliefs and assumptions and on information currently available to us as of the date hereof. In some cases, you can identify forward-looking statements by the following words: “will,” “expect,” “would,” “should,” “intend,” “believe,” “expect,” “likely,” “believes,” “views”, “estimates”, or other comparable terminology. Forward-looking statements in this document include, but are not limited to, our preliminary financial information, including digital asset holdings, exchange provider processed volumes and our fiscal quarter end results, management statements regarding management’s confidence in our products, services, business trajectory and plans, expectations regarding demand for our products; and our ability to deliver higher transaction volumes. Such forward-looking statements involve a number of risks, uncertainties and other important factors that could cause our actual results to differ materially from those expressed or implied by our forward-looking statements. Such factors include those set forth in “Item 1. Business” and “Item 1A. Risk Factors” of Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 6, 2025, as well as in our other reports filed with the SEC from time to time. All forward-looking statements are expressly qualified in their entirety by such cautionary statements. Readers are cautioned not to place undue reliance on such forward-looking statements. Except as required by law, we undertake no obligation to update or revise any forward-looking statements that have been made to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events.

    The MIL Network –

  • MIL-OSI Economics: Commemoration of the Customs Valuation Agreement at 30 WTO Committee on Customs Valuation

    Source: World Trade Organization

    Distinguished delegates, ladies and gentlemen,

    It is a pleasure to address you today to celebrate the 30th anniversary of the Customs Valuation Agreement, as well as the Committee on Customs Valuation overseeing the Agreement’s implementation.

    While 2025 marks the 30th anniversary of the Agreement, its origins trace back to the GATT era, when it was called the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994.

    Its long history demonstrates the importance of customs valuation, and its particular relevance in today’s environment when there is so much focus on tariffs. Customs valuation is a threshold question that importers must address because it can dramatically change the effect of tariffs. How customs value goods can be just as important as the tariff rate applicable to that good because the customs value and the tariff rate together determine the amount of duty the importer must pay. A low tariff with high customs valuation can hurt as much as a high tariff.

    This interrelationship shows that the WTO rules are more than about tariff levels – our rules benefit all Members by establishing how value is measured for purposes of applying tariffs. Inconsistent valuation methods created uncertainty and unpredictability for traders. Without these rules, Members cannot predict how much they would collect in tariffs and how much their exporters would pay abroad.

    Just consider what happened before the Agreement was negotiated. Article VII of the GATT, which first regulated customs valuation in 1947, set out broad principles for national customs valuation systems but allowed countries considerable flexibility to implement their own national systems. In practice, this flexibility led to wide variation and a lack of transparency across customs administrations.

    By the time of the Tokyo Round, these challenges had become so significant that customs valuation practices were increasingly considered to be non-tariff barriers to trade, prompting the international community to seek stronger, more harmonized rules.

    The Tokyo Round resulted in the conclusion in 1979 of the GATT Valuation Code, which provided for the first time a detailed regulation of customs valuation aimed at establishing a fair, uniform, and neutral system that reflected commercial realities and prohibited the use of arbitrary or fictitious customs values.

    The WTO Customs Valuation Agreement we are commemorating today is in essence that Valuation Code with two key advancements:

    • First, it strengthened the plurilateral GATT Valuation Code into a multilateral agreement, and therefore all WTO Members are obliged to comply; and
    • Second, it ensures that the market access opportunities achieved through rounds of tariff reductions are not eroded as a result of arbitrary, fictitious or non-transparent valuation methodologies. 

    In so doing, the Customs Valuation Agreement was a forward-looking agreement for its time. Let me highlight two aspects that illustrate its progressive nature.  

    • First, the Agreement recognizes the importance of a constructive relationship between customs authorities and the private sector. It is premised on an idea that an informed and committed private sector is more likely to comply voluntarily. This partnership-based approach was a significant shift at the time, particularly given the importance for governments to maintain control over revenue fraud.
    • Second, the Agreement introduced market-oriented and trade facilitating practices to customs valuation. For example, it established the transaction value – i.e., the price actually paid or payable – as the basis for customs valuation. This approach reflected market conditions more accurately than other valuation methods by ensuring that the customs value of goods is based on the true value of goods negotiated between buyer and seller.

    The Customs Valuation Agreement serves also as a trade facilitating tool. Given the inherent complexity of customs valuation, by providing a uniform set of rules for valuing goods, it leads to greater predictability and consistency in the treatment of goods at the border. This standardization helps minimize costs and delays for developed and developing Members alike by enabling traders to understand, in advance, how their goods will be valued.  

    Nevertheless, the implementation of the Customs Valuation Agreement is not without challenges. For some Members, customs duties remain a significant source of government revenue; others operate under trade policy frameworks that include high tariffs or face the realities of large informal trading sectors. In some cases, customs administrations also contend with limited resources, which can impede full and effective implementation of the Agreement.

    The Committee has shown its commitment to supporting implementation efforts by Members. This activity includes targeted initiatives, such as the 2002 seminar on mobilizing technical assistance and, more recently, the 2019 workshop organized in collaboration with the Trade Facilitation Agreement Facility to address implementation challenges and explore how the TFA can reinforce CVA implementation.

    Just last year, the Committee brought renewed attention to one of the fundamental aspects of the Customs Valuation Agreement and the WTO more broadly – transparency.  Your efforts to strengthen the notification process have yielded tangible results, leading to the strongest year in recent memory for notification submissions. This is a commendable achievement. Transparency through timely notifications is essential – not only for the effective operation of the CVA, but also for the credibility and functioning of the WTO as a whole. I encourage you to continue this important work. Thirty years on, notification remains a cornerstone of successful implementation.

    Your Committee stands as a reminder that WTO Agreements cannot operate in a silo nor in a vacuum. Let me give you an example. As you know, this Committee also oversees the Preshipment Inspection Agreement. Historically, the CVA was strongly linked to the Preshipment Inspection Agreement because some governments relied on preshipment inspection entities to carry out customs valuation-related activities.  However, since the entry into force of the Trade Facilitation Agreement in 2017, which prohibits the use of preshipment inspections for customs valuation, this linkage has naturally diminished. At the same time, a growing alignment between the Customs Valuation Agreement and the Trade Facilitation Agreement has emerged. These two Agreements now reinforce each other in promoting transparency, efficiency, and predictability at the border.

    Over the past 30 years, the Customs Valuation Agreement has proven to be flexible and successful at adapting to a changing environment by requiring that customs value be based on simple and equitable criteria consistent with commercial practices. But today, we are entering a new phase – one marked by rapid, transformative change. Digitalization, artificial intelligence, and evolving trade dynamics will challenge us to interpret and apply the CVA in new and complex ways.  

    It is up to you as Members of the Committee on Customs Valuation to collectively ensure uniformity in interpretation and application of the Agreement in this volatile trading environment and constantly evolving business models. In this effort, our continued partnership with the World Customs Organization Technical Committee on Customs Valuation will continue to be indispensable. I am pleased that we are joined today by the Chairperson of this Committee, whose presence reflects the strength of that collaboration.

    As we mark 30 years of this Agreement, I wish to thank all our delegates, as well as the Secretariat team, for the dedication and professionalism that has sustained its implementation. I am confident that, through your continued engagement, this Committee will remain a cornerstone of the multilateral trading system – resilient, effective, and ready to address the challenges we are facing.

    Thank you.

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    MIL OSI Economics –

  • MIL-OSI USA: Congressman Don Davis Joins Global Security Leaders at the London Defence Conference 2025

    Source: US Congressman Don Davis (NC-01)

    London, U.K. — Congressman Don Davis (NC-01), a U.S. Air Force veteran and the vice ranking member of the House Armed Services Committee, participated in a panel at the London Defence Conference 2025 entitled “Facing China, Russia, Iran, and North Korea (CRINK),” focused on emerging threats to the post-World War II global order and the strengthening alliance between CRINK nations. The conference took place during the 80th anniversary of Victory in Europe (VE) Day marking the end of World War II.

    With its theme of “Alliances,” the London Defence Conference 2025 comes at a crucial moment in global affairs. The U.S.-led network of alliances is facing internal strains and threats to its continued existence. The panel discussions on these topics took place among former heads of state, members of the U.S. Congress, members of the British Parliament, and non-government foreign policy experts.

    “The importance of these discussions is growing as we face emerging global threats. Our shared defense remains essential for safeguarding democracies around the world,” said Congressman Don Davis. “As we commemorate the 80th anniversary of VE Day, we are reminded of the enduring value of our allies. We must maintain unity in addressing threats posed by countries such as China, Russia, Iran, North Korea, and other global extremists.”

    During the “Facing CRINK” panel, participants addressed emerging threats  to the post-World War II global order and emphasized the importance of reinforcing alliances such as North Atlantic Treaty Organization (NATO).

    Specific topics included Russia’s invasion of Ukraine, belligerence from the People’s Republic of China in the Indo-Pacific, and Iran’s malign actions in the Gulf. Panelists discussed best practices for uniting the free world and ensuring internal political divisions do not divide the West against common foes.

    Congressman Don Davis serves as the vice ranking member of the House Armed Services Committee and sits on the Subcommittees on Tactical Air and Land Forces and Readiness. He graduated from the U.S. Air Force Academy in 1994, a co-chair of the For Country Caucus and is a veteran of the U.S. Air Force.

    MIL OSI USA News –

  • MIL-OSI USA: Congressman Nick Langworthy Releases Statement Supporting House Energy and Commerce Committee’s Budget Reconciliation Legislation

    Source: US Congressman Nick Langworthy (NY-23)

    WASHINGTON, D.C. – Today,Congressman Nick Langworthy (NY-23) released the following statement regarding the House Energy and Commerce Committee’s reconciliation bill text. This legislation will be marked up tomorrow, May 13 at 2:00 pm. 

     

    “After five months of tough negotiations and in-depth discussions with key stakeholders, the House Energy and Commerce Committee has delivered a bold reconciliation bill that achieves our top priorities: protecting Medicaid for those who genuinely need it, advancing American energy independence, and ending the hemorrhaging of taxpayer dollars through waste, fraud, and abuse.

     

    “From day one, I made it clear that I would fight relentlessly to protect rural hospitals and safeguard access to care—and as the only Republican from New York serving on the Energy and Commerce Committee, I was proud to help lead that charge alongside my colleagues and the White House.

     

    “This bill strengthens the social safety net while restoring fiscal responsibility. Its passage marks a critical step toward delivering on a pro-growth, pro-taxpayer agenda that puts America’s working and middle class first.

     

    “Let’s be clear: if we do nothing, the system goes broke. Medicaid and other essential programs will collapse under the weight of wasteful spending, fraud, and abuse. For too long, these programs have operated with little accountability—broken systems with no safeguards for taxpayers. That’s unacceptable. We have a duty to protect both the people who depend on these services and the taxpayers who fund them.

     

    “That’s why this legislation includes commonsense work requirements for able-bodied adults without dependents—just as President Bill Clinton enacted in the 1990s. It was one of the most popular and effective policies of his presidency, helping lift millions out of poverty and into the workforce. We are building on that bipartisan legacy to ensure assistance is tied to opportunity, not lifelong dependency.

     

    “We are also removing illegal aliens from the Medicaid rolls. American taxpayers should never be forced to subsidize healthcare for those who have broken our immigration laws. These benefits are meant for American citizens and lawful residents—not for those who enter the country illegally and exploit the system. This reform is about restoring fairness, accountability, and the rule of law.

     

    “Unfortunately, powerful Democrats like Chuck Schumer are already resorting to lies, fear-mongering, and deception to protect the failed status quo. They’d rather mislead the public than admit that change is urgently needed. But we know the truth—and the American people are demanding action.

     

    “While Democrats and their special interest allies cling to bloated bureaucracy and broken programs, we are delivering real solutions, restoring integrity to our institutions, and honoring the clear mandate voters gave us to put America back on the right track.”

    MIL OSI USA News –

  • MIL-OSI New Zealand: Serious crash, Takapau, Central Hawke’s Bay

    Source: New Zealand Police

    Emergency services are responding to a serious crash on State Highway 2 near Takapau this morning, which has closed the State Highway.

    The two vehicle crash was reported to Police just before 7.30am.

    Initial indications are there are serious injuries.

    Motorists are advised there are diversions in place via Fraser Road and Marahakeke Road.

    The Serious Crash Unit has been notified.

    ENDS

    MIL OSI New Zealand News –

  • MIL-OSI USA: Travel Advisory: Route 113 Traffic Shift in Warwick Scheduled for May 16

    Source: US State of Rhode Island

    Starting at 8 p.m. on Friday, May 16, the Rhode Island Department of Transportation (RIDOT) is scheduled to shift all travel lanes on Route 113 (East Avenue) where it passes over I-95 and I-295 in Warwick. The travel lanes � one in each direction � will operate on the eastbound side of the road while RIDOT uses accelerated bridge construction methods to begin demolition and replacement of the westbound side of the bridges.

    All ramps and exits will remain open, with the exception of Route 113 East to I-95 North. That ramp was closed in early May and it will remain closed for the rest of the year.

    This temporary traffic pattern will be in place until mid-summer, when RIDOT will move traffic onto newly constructed bridge sections and demolish and rebuild the other half. By the end of the year, all travel lanes will be restored to their original configuration.

    The bridge replacements are part of the new $102.4 million Warwick Corridor Project. In addition to the bridge work, RIDOT will improve several other important corridors and intersections, with paving, sidewalk work, ADA accessibility, new traffic signal upgrades, and new pedestrian crossing and other safety features. Specifically, RIDOT will pave sections of East Avenue, Route 2 (Bald Hill Road), Main Avenue, West Shore Road and Post Road. More information on this project is available at www.ridot.net/WarwickCorridor.

    All construction projects are subject to changes in schedule and scope depending on needs, circumstances, findings, and weather.

    The replacement of these bridges is made possible by RhodeWorks. RIDOT is committed to bringing Rhode Island’s infrastructure into a state of good repair while respecting the environment and striving to improve it. Learn more at www.ridot.net/RhodeWorks.

    MIL OSI USA News –

  • MIL-OSI USA: Governor Newsom releases state model for cities and counties to immediately address encampments with urgency and dignity

    Source: US State of California 2

    May 12, 2025

    What you need to know: Governor Newsom today released a model ordinance for cities and counties to immediately address dangerous and unhealthy encampments and connect people experiencing homelessness with shelter and services. Backed in part by $3.3 billion in new Prop 1 funding being announced today, the Governor is calling on all local governments to act without delay and use their authority affirmed by the U.S. Supreme Court to address encampments.

    SACRAMENTO —  As part of California’s ambitious push to tackle the nationwide homelessness crisis head-on, Governor Gavin Newsom released a model ordinance for cities and counties to address unhealthy and dangerous encampments. The Governor is calling on every local government to adopt and implement local policies without delay, backed by billions in state funding and authority affirmed by the U.S. Supreme Court last year. The model ordinance follows and builds on the Governor’s 2024 executive order, which urged all local jurisdictions to quickly address encampments and use state and local funding to connect people experiencing homelessness with the care and support they need.

    This announcement is coupled with the release of $3.3 billion in voter-approved Proposition 1 funding, which will be made available later today to communities statewide to expand behavioral health housing and treatment options for the most seriously ill and homeless in California.

    “There’s nothing compassionate about letting people die on the streets. Local leaders asked for resources — we delivered the largest state investment in history. They asked for legal clarity — the courts delivered. Now, we’re giving them a model they can put to work immediately, with urgency and with humanity, to resolve encampments and connect people to shelter, housing, and care. The time for inaction is over. There are no more excuses.”

    Governor Gavin Newsom

    Giving locals the tools they need

    Governor Newsom has been a fierce advocate for people experiencing homelessness, creating new resources to support local governments to help provide support and care. The Newsom administration has provided local communities with more than $27 billion to address homelessness, created stronger accountability laws and tools to ensure that every community is doing its part.

    Today, Governor Newsom is continuing the state’s support by sharing with local communities a model ordinance to help local governments set appropriate rules around encampments and establish effective enforcement procedures that prioritize notice, shelter, and services.  Encampments pose a serious public safety risk, and expose the people in encampments to increased risk of sexual violence, criminal activity, property damage and break-ins, and unsanitary conditions. 

    Clear formal guidelines for clearing encampments 

    The state’s model ordinance will be provided to every community as a starting point so jurisdictions can create their own policies.  It draws from the state’s proven and workable approach — an approach that, since July 2021, has cleared more than 16,000 encampments and over 311,873 cubic yards of waste and debris from sites along the state right of way. These results demonstrate that the policy is effective and scalable, offering a sound, adoptable framework for jurisdictions to resolve encampments with urgency and dignity.

    The ordinance contains key provisions, which may be modified based on local need, including:

    • A prohibition on persistent camping in one location
    • A prohibition on encampments that block free passage on sidewalks
    • A requirement that local officials provide notice and make every reasonable effort to identify and offer shelter prior to clearing an encampment

    The ordinance helps ensure that local communities take a balanced approach to address and prevent encampments with compassion and care. 

    The ordinance reflects the guidance for local governments created following the Governor’s Executive Order, requiring at least 48 hours’ notice, outreach to local service providers, and proper storage of items when addressing encampments.

    Learn about your community’s progress

    Visit accountability.ca.gov, which brings together thousands of locally reported data points to provide an accurate picture of local communities’ work to address homelessness, create housing, and create behavioral health supports.  The new accountability tool helps Californians quickly and clearly assess the progress being made by their local governments on these pressing issues and learn more about the process and funding provided to communities by the state.

    Reversing decades of inaction 

    The Newsom Administration is making significant progress in reversing decades of inaction on homelessness. Between 2014 and 2019, unsheltered homelessness in California increased by approximately 37,000 people, more than double the increase seen during the Newsom Administration.

    As states throughout the nation continue to see ever-higher increases in homeless populations, California has dramatically slowed the growth in homelessness and reduced the number of veterans and youth experiencing homelessness — more than any other state.

    Homelessness continues to increase nationwide, increasing in 2024 by more than 18%, but California is bucking the national trend by holding the statewide increase to 3%. This is a lower rate than in 40 other states.

    California is also one of the few states that have dramatically blunted the increases in unsheltered homelessness, holding it to 0.45%. By comparison, in 2024, nationwide unsheltered homelessness grew by nearly 7%. Unsheltered homelessness growth in other large population states like Illinois, Florida, New York, and Texas surpassed California’s percentage and number. California experienced the largest decrease in veteran homelessness in the nation last year.

    Recent news

    May 9, 2025

    News Sacramento, California – Governor Gavin Newsom today issued a proclamation declaring May 2025 as “Older Californians Month.”The text of the proclamation and a copy can be found below: PROCLAMATIONCalifornia is home to nearly nine million older residents who…

    May 9, 2025

    News What you need to know: Ahead of peak wildfire season, California has launched “Ask CAL FIRE,” an AI-powered chatbot on CAL FIRE’s website offering wildfire resources and emergency information in 70 languages. SACRAMENTO — As California marks Wildfire Preparedness…

    May 9, 2025

    News What you need to know: Governor Newsom has been appointed co-chair of the U.S. Climate Alliance – a bipartisan coalition of 24 governors working to achieve a net-zero carbon pollution future in America by advancing state-led, high-impact climate action….

    MIL OSI USA News –

  • MIL-OSI Europe: Text adopted – Discharge 2023: EU general budget – Court of Justice of the European Union – P10_TA(2025)0080 – Wednesday, 7 May 2025 – Strasbourg

    Source: European Parliament

    The European Parliament,

    –  having regard to its decision on discharge in respect of the implementation of the general budget of the European Union for the financial year 2023, Section IV – Court of Justice of the European Union,

    –  having regard to Rule 102 of and Annex V to its Rules of Procedure,

    –  having regard to the opinion of the Committee on Legal Affairs,

    –  having regard to the report of the Committee on Budgetary Control (A10-0050/2025),

    A.  whereas in the context of the discharge procedure, the discharge authority wishes to stress the particular importance of further strengthening the democratic legitimacy of the Union institutions by improving transparency and accountability, and by implementing the concept of performance-based budgeting and good governance of human resources;

    B.  whereas the Court of Justice of the European Union (CJEU) is the judicial institution of the Union, having the task of ensuring compliance with Union law by overseeing the uniform interpretation and application of the Treaties and ensuring the lawfulness of measures adopted by the Union institutions, bodies, offices and agencies;

    C.  whereas the CJEU helps preserving the values of the Union and, through its case-law, works towards the building of Europe;

    D.  whereas the CJEU comprises two courts: the Court of Justice and the General Court;

    E.  whereas Parliament and Council amended Protocol No 3 on the Statute of the CJEU (the ‘Statute’)(1) in 2024 with respect to the transfer of preliminary rulings in specific areas to the jurisdiction of the General Court;

    1.  Notes that the budget of the CJEU falls under MFF heading 7, ‘European public administration’, which amounted to EUR 12,3 billion in 2023 (representing 6,4 % of the total Union budget); notes that the CJEU’s budget of approximately EUR 0,5 billion represents approximately 3,9 % of the total administrative expenditure of the Union;

    2.  Notes that the Court of Auditors (the ‘Court’), in its Annual Report for the financial year 2023 (the ‘Court’s report’) examined a sample of 70 transactions under the heading ‘Administration’, 10 more than were examined in 2022; the Court further states that administrative expenditure comprises expenditure on human resources, including expenditure on pensions, which in 2023 accounted for approximately 70 % of the total administrative expenditure, and expenditure on buildings, equipment, energy, communications and information technology (IT), and that its work over many years indicates that, overall, this spending is low risk;

    3.  Notes that 21 (30 %) of the 70 transactions contained errors but that the Court, based on the five errors which were quantified, estimates the level of error to be below the materiality threshold;

    4.  Notes that the Court’s report did not identify any specific issues concerning the CJEU;

    Budgetary and financial management

    5.  Notes that the budget allocated for the CJEU in 2023 amounted to EUR 486 025 796, which represented an increase of 3,9 % compared to 2022; notes that this increase was mainly related to salary adjustments forecasted for 2023; stresses that the budget of the CJEU is essentially administrative, with around 75 % of the appropriations related to expenditure for its members and staff, and almost all of the rest related to expenditure for buildings and IT;

    6.  Notes that the overall implementation rate of the budget at the end of 2023 was 97,72 %; notes that five transfers were submitted to the budgetary authority in accordance with Article 29 of the Financial Regulation to reinforce the budget lines for ‘Energy consumption’, ‘Purchases, work, servicing and maintenance of equipment and software’ and ‘buildings’ from other budget lines, mainly the budget line for staff ‘Remuneration and allowances’; notes that Russia’s war of aggression against Ukraine continued to create budgetary pressure for the CJEU, including through rising inflation and salary adjustments, strongly increasing energy costs and costs for a number of goods and services;

    7.  Notes with satisfaction that the authorising officer by delegation declared that the resources allocated had been used for the purpose intended and in accordance with the principle of sound financial management and that the control procedures put in place provided the necessary guarantees as to the legality and regularity of the underlying transactions;

    8.  Notes that the average payment time stood at 23,1 days in 2023 compared to 24,32 days in 2022; calls on the CJEU to continue its efforts to reduce the time for payment, particularly considering that 81 % of invoices were received electronically in 2023;

    9.  Notes that the CJEU’s mission budget, which stood at EUR 638 000 for both staff and Members in 2023, continued to decrease by 3,3 % in 2023 compared to 2022; notes that 85,1 % of the appropriations for missions in 2023 were used compared to 46,6 % in 2022 due to the persistent travel restrictions in application at that time;

    Internal management, performance and internal control

    10.  Notes the significant steps taken by the CJEU in 2023 towards its judicial reform which has led to the partial transfer of jurisdiction to give preliminary rulings from the Court of Justice to the General Court; notes that a political agreement with Parliament and Council was reached at the end of 2023 in view of the amendment to the Statute of the CJEU and with a view to improving the functioning of the CJEU against the background of a steady increase in the caseload and in the complexity and sensitive nature of questions raised; notes that, further to the adoption of the reform in 2024, detailed rules and procedures were adopted in order to complete the reform and allow the implementation of the new regulatory framework as of 1 October 2024;

    11.  Notes that, in 2023, the Court of Justice ruled on five cases concerning the principle of primacy in the context of four preliminary rulings brought by the courts in Germany, Ireland, Poland, and Romania, as well as one infringement case concerning Poland; stresses the fundamental importance of the principle of primacy of Union law, which ensures the uniform interpretation and application of Union law across all Member States and safeguards the rule of law as a core value of the Union; strongly reaffirms that the primacy of Union law is the cornerstone of the Union’s legal order and highlights the pivotal role of the CJEU in upholding the rule of law across the Union. Furthermore, notes that the General Court ruled on six cases related to measures for the protection of the Union budget against breaches of the principles of the rule of law by the Hungarian government, which systematically undermines core Union values; urges the Commission to take decisive enforcement actions against any Member State that challenges or disregards the binding nature of CJEU rulings; highlights that, in cases relating to the investigation of the Union budget, the principles of due process and fundamental rights must be fully respected by all competent authorities;

    12.  Notes that Article 4(2) of the Treaty on European Union states that “The Union shall respect the equality of Member States before the Treaties as well as their national identities, inherent in their fundamental structures, political and constitutional, inclusive of regional and local self-government. It shall respect their essential State functions […]”;

    13.  Condemns any national measures or legislative actions that seek to undermine the codification and enforcement of CJEU judgments; calls for the establishment of a formal monitoring mechanism to track Member State compliance with CJEU rulings and recommends linking compliance with EU funding disbursement under the rule of law conditionality framework;

    14.  Notes that 821 new cases were submitted to the Court of Justice in 2023, compared to 806 in 2022, out of which 63 % were references for preliminary ruling and 28,6 % were appeals against decisions of the General Court; notes that the General Court saw a major increase of cases with 1 271 new cases in 2023 compared to 904 in 2022, including an exceptional series of 404 joint cases submitted in October 2023; notes that in 2023 for the General Court, 37 % of the new cases, including the series of 404 joint cases, concerned actions relating to institutional law, 24,3 % concerned actions relating to intellectual property and 6 % concerned disputes between institutions of the Union and their staff; notes that the total number of pending cases remains stable when compared to previous years: considering the previously mentioned 404 cases as a single case, 2 587 cases were pending at the end of 2023, compared to 2 585 at the end of 2022 and 2 541 at the end of 2021;

    15.  Notes that the Court of Justice closed 783 cases in 2023, compared to 808 in 2022, and that the General Court closed 904 cases in 2023, compared to 858 in 2022;

    16.  Welcomes the decrease in the average length of proceedings for the cases closed by the Court of Justice, whereas in 2023 that average was 16,1 months, compared to 16,4 months in 2022; notes that the average duration for the cases closed by the General Court was 18,2 months, compared to 16,2 months in 2022, which the General Court explained was due to the nature and related complexity of the proceedings managed in 2023;

    17.  Notes the decrease in the average time taken to deal with direct actions before the Court of Justice (from 23,5 months in 2022 to 20,8 months in 2023) and with references for preliminary rulings (from 17,3 months to 16,8 months); notes that, as regards the litigation before the Court of Justice, there was a significant increase in the number of direct actions, in particular in the field of the environment, and that the questions referred to the Court of Justice for a preliminary ruling in 2023 related principally to the area of freedom, security and justice, followed by taxation, consumer protection and transport; notes that, as regards the litigation before the General Court, there was an increase of cases in the fields of intellectual property and economic and monetary policy, including banking;

    18.  Notes with satisfaction the high use rate of e-Curia in 2023, with 10 502 e-Curia accounts being registered: 94 % of lodgements before the General Court were made via e-Curia, which is the same as in 2022, while the use rate of e-Curia at the Court of Justice went up to approximately 89 %, compared to 87 % in 2022;

    19.  Appreciates the progress made in digitising the judicial archives with a view to preserving documents for future consultation and facilitating access for researchers and the public by means of a digital portal;

    20.  Welcomes the performance-based approach developed by the CJEU, allowing the CJEU to take decisions based on performance outcomes and the level of achievement of its objectives, measured through a set of workload and operational indicators; notes that the key performance indicators used by the CJEU cover a wide range of specific areas in support of the five management objectives relating to the proper functioning of the CJEU, digitalisation and emerging technologies, openness and transparency, multilingualism and human resources management;

    21.  Notes that the internal control framework of the CJEU was subject to an in-depth evaluation in 2022-2023, which confirmed its soundness; notes that, as part of that evaluation, the financial control circuits were adapted in order to make the controls more efficient;

    22.  Notes that the main internal audits carried out in 2023 concerned the CJEU’s expenditure on the cleaning of buildings, the effectiveness of the internal control system to safeguard the CJEU’s IT assets and the staff selection procedures; notes that an internal audit also carried out a study on the use of artificial intelligence in the area of justice in relation to the implementation of a “strategy for integrating tools based on artificial intelligence into the operation of the CJEU”; notes that, in many cases, the services of the CJEU took actions to implement the internal audit recommendations before the formal finalisation of the internal audits and that those actions were considered satisfactory by the internal auditor;

    Human resources, equality and staff well-being

    23.  Notes that, at the end of 2023, the CJEU employed 1340 officials (58 %), 765 temporary agents (33 %) under Articles 2(a), 2(b) and 2(c) of the Conditions of Employment of Other Staff of the EU, and 198 contract agents (9 %); notes that, at the end of 2023, the occupation rate of the establishment plan stood at 97,11 %; notes further that the annual turnover of staff was 7,8 % in 2023, which was particularly due to the 20 % of those staff who left the CJEU by taking retirement;

    24.  Notes that the Court of Justice is composed of 27 Judges and 11 Advocates General and that no new Judge or Advocate General took office in 2023; notes further that the General Court is composed of 54 Judges and that two new Judges, one woman and one man, took office during 2023; notes further that a new Registrar for the General Court was elected in 2023;

    25.  Welcomes the CJEU’s detailed responses to the questionnaire from Parliament’s Committee on Budgetary Control, provided as part of the current discharge procedure, particularly regarding staff distribution at the end of 2023; notes that the gender composition of the Court of Justice and the General Court continues to be very unbalanced; expresses its appreciation of the letter from the President of the General Court to the President of the Conference of the Representatives of the Member States in 2024, calling on Member States to take the need for gender balance into account when nominating candidates for the replacement of Judges and Advocates General; calls on Member States to take the need for gender balance into account when nominating candidates for the replacement of judges;

    26.  Takes note that, of the 2 303 officials and agents serving at the end of 2023, 61 % are women; welcomes the fact that the proportion of women in administrative positions is 55 %, and especially the fact that, in managerial posts, the proportion has increased to 43 %, compared to 40 % in 2022 and 2021, confirming the upward trend recorded since 2018 (41 % in 2020, 39 % in 2019 and 37,5 % in 2018); notes however that representation of women was the highest in assistant grades, whereas it was the lowest in senior management positions; calls on the CJEU to ensure a greater representation of women in senior management positions and take further measures to promote gender balance at all levels; welcomes the efforts deployed by the CJEU in favour of equality, inclusion and diversity, especially at recruitment stage;

    27.  Calls on the CJEU to publish an annual Gender and Diversity Report to provide transparency on gender representation at all levels of the institution, including Judges, Advocates General, and administrative staff, as well as to provide for concrete measures of improving gender parity in senior positions;

    28.  Welcomes that all Union nationalities are represented in the staff of the CJEU, but notes that certain nationalities are more represented than others; welcomes the continued efforts of the CJEU to promote a better geographical balance among its staff, in particular by fostering the visibility and attractiveness of its job vacancies, creating and offering more favourable job conditions to attract temporary agents from certain less-represented Member States and communicating widely to varied audiences on the job opportunities at the CJEU in 2023; notes that a significant effort was made to attract many talented young people from different Member States though the CJEU’s internship programme; invites the CJEU to examine whether trainees are proportionally represented from all member states;

    29.  Urges the CJEU to promote a multilingual working environment, recognizing its potential to enhance the fair distribution of nationalities among its staff; calls on all EU institutions to uphold and ensure the principle of multilingualism;

    30.  Welcomes the work done by the High Level Interinstitutional Group on enhancing the attractiveness of Luxembourg as a place of work for staff; calls on the CJEU to maintain and enhance cooperation with other Luxembourg-based institutions across different initiatives; notes with appreciation that the budgetary authority approved for the financial year 2025 the necessary appropriations in order to allow the granting of a housing allowance to staff at lower grades, as recommended by the High Level Interinstitutional Group; asks that Parliament be updated on the progress of such initiatives intended to improve the attractiveness of Luxembourg as a place of work;

    31.  Notes that, in 2023, the CJEU implemented several initiatives to promote physical and mental wellbeing of staff through specialised workshops and awareness-raising activities; notes that the teleworking scheme, which entered into force on 1 May 2022, was assessed positively by the managers, among whom 92 % replied that the productivity of staff teleworking was either equivalent or better than prior to the existence of the teleworking scheme; notes that, with a view to achieving a better work and personal-life balance, in 2023, the CJEU renewed the possibility for its staff to telework from outside the place of employment up to 10 days per year, especially during the judicial vacations;

    32.  Welcomes the ongoing awareness-raising, information and training campaigns aiming at promoting inclusion, mutual respect, cooperation and support for people with disabilities and their helpers;

    33.  Notes that the number of working days of sick leave was 20 198 in 2023, corresponding to a reduction of 14,78 % compared to 2022; notes with concern that the medical service reported 11 cases of burnout in 2023; welcomes a thorough analysis of diagnostic reports undertaken by the CJEU to identify instances of professional burnout and the CJEU’s focus on preventive measures, especially the reinforcement of its medical and social workers’ team, the prevention of psychosocial risks in the workplace and the introduction of awareness-raising activities for management on the right to disconnect and the risks of over-performance; encourages the CJEU to maintain focus on this problem in order to prevent any further cases associated with burnout and inform the Parliament of the measures taken in this regard;

    34.  Notes that an administrative enquiry was launched in 2023 on an alleged case of sexual harassment concerning a member of staff and that this case was closed in 2024 with a sanction; expresses concern that a procedure of assistance for alleged harassment concerning a judge was also filed in 2023 but no harassment was established in that case; notes that an interdepartmental working group, established in March 2023, therefore ahead of the ratification of the Council of Europe Convention on preventing and combating violence against women and domestic violence, examined the rules and procedures in place in the CJEU to prevent harassment and made some recommendations with a view to improving these rules and procedures; encourages the CJEU to follow up and continue to show no tolerance for harassment in the workplace by introducing mandatory training on unconscious bias and ethical standards for all judges and senior officials to prevent abuse of power;

    Ethical framework

    35.  Notes with satisfaction that, as requested in previous discharge recommendations, the new code of conduct on the rights and obligations of officials and other servants of the CJEU reflecting the CJEU’s values and commitment to ethics was drawn up in 2023 and adopted in March 2024; notes that the code of conduct includes provisions on conflict of interests, duty of loyalty, duty of confidentiality and discretion, outside activities, occupational activities after leaving the service and publications and also applies to seconded national experts and trainee judges hosted under the European Judicial Training Network; notes that, in 2023, awareness-raising activities and revamped training on the code of conduct were organised for staff and managers, with a particular focus on newcomers; calls for a mandatory training for all staff on a regular basis and asks that Parliament be kept informed about the implementation of the code of conduct;

    36.  Notes that, before the code of conduct entered into force, two potential cases of conflict of interest were declared and handled in accordance with the procedures in place, with the aim of ensuring that the new members of staff concerned were not involved in the management of files that they knew from a previous job;

    37.  Notes that, further to the adoption of the code of conduct for Members and former Members of the CJEU, the declaration of interests of the Members have been published online to avoid any potential conflict of interest in the handling of cases; notes that the CJEU is constantly reassessing its internal rules on this matter with a view to updating those rules and to ensuring the highest possible standards of ethical behaviour; calls on the CJEU to establish an independent ethics committee to oversee compliance with the code of conduct and investigate potential breaches; calls for mandatory annual ethics training for all CJEU personnel, including Judges and Advocates General to preserve the integrity of the CJEU; asks the CJEU to inform Parliament about the results of any further assessment of the effectiveness of that measure aimed at the prevention of conflicts of interest;

    38.  Welcomes the publication of the declarations of interests of the Members of the CJEU but calls for the introduction of a standard pre-appointment screening process to identify and mitigate potential conflicts of interest at an early stage; urges the Council to establish transparent guidelines for Member States when nominating candidates for judicial positions at the CJEU;

    39.  Urges the CJEU to introduce a mandatory recusal policy for judges in cases where they have past professional affiliations with litigants appearing before the CJEU; calls for stricter conflict-of-interest screening for judges and high-ranking staff, including regular updates to financial disclosure requirements; asks for the publication of real-time recusal decisions in cases where judges declare a conflict of interest, ensuring greater transparency in the judicial process and reinforcing public confidence in the impartiality and integrity of the CJEU;

    40.  Notes that in 2023, all Members of the CJEU were resident of Luxembourg in accordance with Article 14 of the Statute;

    41.  Notes that the list of external activities carried out by the Members of both the Court of Justice and the General Court has been published on the CJEU website since 2018; further notes that the list is difficult to read for the general public and recommends its revision to ensure greater clarity and informativeness; notes that the prior authorisation by the general meeting of the Court of Justice or by the plenary conference of the General Court is only granted when the external activity is compatible with the requirements of the code of conduct and with the Members’ obligations to be available for judicial activities; asks the CJEU to inform the discharge authority about any initiatives to improve the readability of the information related to external activities, in line with previous discharge recommendations;

    42.  Notes that the rules governing Members’ travels, missions and use of drivers and cars, as updated in 2021, provide that only the running costs resulting from the car use for purposes related to the execution of a mission order or to the exercise of his or her mandate within a limit of 10 000 km are borne by the CJEU; reiterates its opinion that the use of the car fleet outside of the strict performance of the duties of the Members of the CJEU should not take place under any circumstances, notes that the CJEU reported to be in discussion with other institutions in order to obtain a harmonised set of rules for the use of official vehicles, while respecting the autonomy of each institution; invites all Union institutions to agree on a single system to be applied horizontally, which would reduce the confusion and increase transparency and efficiency in the use of public money; asks the CJEU to keep Parliament informed of any progress in this matter;

    43.  Notes that an OLAF case, referred to in previous discharge resolutions, which dealt with the conduct of a member of staff that might have constituted a serious failure to comply with their obligations, was closed in 2023; notes that the CJEU is not aware of any new OLAF investigation or recommendation in 2023;

    44.  Notes that the CJEU did not report any cases of fraud, corruption or misuse of Union funds in 2023; notes that the CJEU’s anti-fraud strategy is an integral part of its integrated internal control and risk management framework, with a particular focus on the risks of improper disclosure of information;

    Transparency and access to justice for citizens

    45.  Welcomes the CJEU’s engagement to enhance transparency, access to justice and public openness, thus contributing to foster public trust in the Union institutions;

    46.  Notes that, in 2023, the CJEU consolidated the streaming service for hearings of the Court of Justice and of the General Court on the Curia website, thus facilitating the access of citizens to the judicial activities of the CJEU; welcomes the improvement of the CVRIA website, in terms of its structure, functionalities and content; welcomes that the delivery of judgments of the Court of Justice, the reading of opinions of the Advocates General, the hearings of the Grand Chamber and certain hearings of chambers sitting with five Judges have been broadcast live on the Curia website since 2023; calls on the CJEU to further improve transparency by broadcasting all hearings of both the Court of Justice and the General Court on its website and permanently storing them online;

    47.  Welcomes that, further to the reform of its Statute, the CJEU will publish statements of case or written observations lodged in preliminary ruling proceedings after the closure of such proceedings, except in cases of objection to the publication of a person’s statement of case or observation; underlines that such publication will improve transparency and access to justice for citizens and calls on the CJEU to publish all documents related to a file on its website; calls on the CJEU to implement a procedure that could be used by any person to access in house all the documents related to a case;

    48.  Notes that rules on the use of videoconferencing were adopted by the General Court in April 2023 and by the Court of Justice in September 2024, according to which a party may request the use of videoconferencing where security or other serious reasons prevent that party’s representative from participating in a hearing in person;

    49.  Notes that the rules laid down by the CJEU decision of 26 November 2019 concerning public access to documents held by the CJEU in the exercise of its administrative function do not apply to judicial documents for which access is governed by the Rules of Procedure of the Court of Justice or the Rules of Procedure of the General Court; notes that the CJEU registered 21 requests of public access to administrative documents in 2023 and granted access to administrative documents in 12 cases; notes that the European Ombudsman found no instances of maladministration on the part of the CJEU in 2023;

    50.  Invites the CJEU to simplify the process of finding specific rulings on e-curia; welcomes efforts to make the interface more client-friendly and intuitive;

    Digitalisation, cybersecurity and data protection

    51.  Notes that compared to 2022 the budget expenditure increased by 10,9 % for IT projects, by 13 % for IT equipment, by 59 % for cybersecurity projects and by 72 % for cybersecurity services, licences and equipment in 2023;

    52.  Notes that the implementation of major digitalisation projects under the digital transformation strategy remained a priority for the CJEU in 2023, such as the development of the integrated case management system (SIGA), the promotion of the use of the e-Curia application for the lodging and notification of procedural documents by electronic means, the adoption of eSignature and the adoption of HAN/Ares electronic document record and management system; notes that the CJEU tracks the return on investment in digitalisation projects in terms of costs and resources efficiency and asks the CJEU to keep the discharge authority informed of its findings in that area;

    53.  Notes that, as part of its comprehensive initiative to increase accessibility and inclusion for persons with vulnerability, the CJEU has continued to implement the “accessibility by design” approach for any change and evolution of its IT systems; notes that, following an audit of the Curia website, the CJEU started to improve the site’s accessibility to a wide range of users, such as people with visual impairments, hearing impairments or learning disabilities;

    54.  Notes that the CJEU implemented several projects based on artificial intelligence (AI), such as the automation of document analysis for references to applicable legislation and assistance with invoice verification through robotic processes and hearing transcription, in line with its new AI integration strategy adopted in June 2023; underlines that it is of vital importance that AI is used in a manner which fully preserves the independence, the quality and the serenity of the legal processes, is in full consideration of ethical matters and is used under human oversight and allowing human intervention in order to avoid negative consequences or risks, or stop the system if it does not perform as intended; notes that, as part of that strategy, the CJEU set up an AI management board composed of members of the Court of Justice and of the General Court to oversee the ethical aspects of AI use within the CJEU and to set clear boundaries for its application; welcomes the staff guidelines on the use of AI issued by the board; welcomes the initiatives in place to upskill employees in digital competencies through the training path developed in cooperation with the Interinstitutional Committee for Digital Transformation (ETA); emphasises that the digitalisation of justice and the adoption of emerging technologies such as AI will offer significant advantages for the efficient functioning of the CJEU; recommends however that the CJEU anticipate the associated cybersecurity risks and strengthen even more its collaboration with the EU Agency for Cybersecurity and CERT-EU;

    55.  Notes that no EDPS enquiries were communicated to the CJEU in 2023; notes that, in 2023, EDPS had not addressed any specific recommendation to the CJEU following its investigation regarding the use of cloud services by Amazon web services; notes that EDPS published a decision in 2023 confirming compliance of the CJEU’s use of cloud videoconferencing services with data protection law; reiterates however its concerns regarding the use of external cloud services, given the growing threats about cybersecurity and digital sovereignty;

    56.  Welcomes the CJEU adoption of a cyber roadmap in 2023 and strengthening of its cybersecurity operational capabilities to better protect its systems against the increasing number of cyberattacks; underlines furthermore that a robust cybersecurity strategy is an essential tool to fight against foreign interferences aiming to undermine the integrity of the European Institutions; notes that the CJEU has taken various measures to reinforce its cybersecurity preparedness and ability to recover from security incidents, including through its participation in the governance of the Interinstitutional Cybersecurity Board and through a combination of cybersecurity controls and tools in line with the recommendations of CERT-EU; notes that the budgetary authority approved for the financial year 2025 the necessary appropriations for two additional posts in order to reinforce the CJEU’s staff capacities in the field of cybersecurity;

    57.  Welcomes the measures taken, such as cybersecurity audits, staff training and rapid incident response protocols, to protect the CJEU’s technological infrastructure from cyber threats; stresses that the digitisation of justice and the use of new technologies such as artificial intelligence will bring many benefits in terms of the smooth functioning of the CJEU, but also entail risks that the CJEU needs to pre-empt and protect itself against; suggests in this regard that the CJEU develop a cybersecurity strategy and step up collaboration with other Union institutions, in particular ENISA (the EU Agency for Cybersecurity), on the prevention of cyber-attacks, the number and sophistication of which are growing exponentially in Europe;

    58.  Welcomes the initiative to assign fictitious names to anonymised cases, by using a computerised automatic name generator, in order to strengthen the protection of personal data and facilitate the identification of individual cases;

    59.  Notes with satisfaction the amendment to the Rules of Procedure of the General Court, which will clarify and simplify judicial procedures, including the possibility of using videoconferencing for hearings, electronic signature of decisions and the designation of pilot cases;

    Buildings

    60.  Notes that, following-up on the cross services reflection about the most efficient use of the CJEU’s premises, that was concluded in 2023, pilot projects were launched; notes that the results of those projects, together with other factors, such as environmental and budgetary aspects, quality of justice, well-being at work, inclusion, accessibility and the attractiveness of the CJEU, will be taken into account in the final decision on the use of the CJEU’s buildings; asks that Parliament be kept informed about the implementation of those conclusions and the consequences for the organisation of the workspace;

    61.  Notes that, in 2023, the CJEU further pursued its comprehensive initiative to increase accessibility and inclusion for persons with disabilities, with the aim of guaranteeing access to the CJEU, physically or virtually, to all individuals, participants in proceedings and visitors; notes further that, in 2023, the CJEU started to make an inventory of its infrastructure with a view to complying with the new national accessibility legislation as of 1 January 2032; asks that Parliament be kept informed about further initiatives in this area;

    Environment and sustainability

    62.  Notes with satisfaction that, in 2023, the CJEU continued to significantly reduce its energy consumption and carbon footprint compared to 2015, which is the baseline for the implementation of the CJEU’s eco-management and audit scheme strategy, thanks to energy-saving measures and optimisation of its heating, cooling and lighting infrastructures; notes that heating consumption was reduced by 33,5 %, electricity by 28,7 %, water by 20,1 %, office paper by 63 %, office and canteen waste by 43 % and greenhouse gas emissions by 30,2 % in 2023 compared to 2015; welcomes that the CJEU applied green procurement criteria in 10 calls for tender above EUR 60 000; welcomes the CJEU’s commitment to the Eco-Management and Audit Scheme (EMAS); encourages the CJEU to continue its efforts in reducing its environmental impact, with a strategy to reach carbon neutrality by 2035;

    63.  Welcomes that the CJEU has taken several initiatives to support and increase sustainable mobility for its staff and Members, including subsidies for public transportation, subsidies for self-service bicycles, improved bike parking facilities and improved facilities for hybrid and electrical cars;

    Interinstitutional cooperation

    64.  Welcomes the budgetary savings achieved through cooperation with other institutions and in particular the shared applications and hosting services based on service-level agreements with the Commission as well as the participation in interinstitutional procurement procedures, which have allowed the CJEU to optimise costs and resources;

    65.  Welcomes the efforts of the European Judicial Training Network (EJTN) in training national judges on EU law; notes with appreciation that, in line with the CJEU’s declaration entitled “Supporting the EJTN to shape a sustainable European judicial culture”, the CJEU and the EJTN sought to increase the diversity of long-term trainees in 2023, with the aim of ultimately increasing their number to one per Member State; notes that the measures taken have already been successful since the CJEU has trainees from some Member States which previously did not actively participate in the programme; notes that 15 remunerated traineeships were offered for the year 2023-24; calls on the CJEU to further develop its knowledge-sharing initiatives, including joint case-law databases and virtual collaboration platforms to support national courts in complex legal interpretations;

    66.  Emphasises that traineeships should be remunerated in compliance with the European Parliament’s resolution of 14 June 2023 on Quality Traineeships in the Union (2020/2005(INL)), which calls for all internships in Europe to be paid; welcomes that currently all trainees at the CJEU receive a grant during their stay, mainly from the CJEU and, in some specific cases, from other sources; take notes that the CJEU only accepts a few trainees (less than 10 per year) paid by other sources, and for short periods (on average 2 months); welcomes that in such cases, the CJEU administration carefully checks that these trainees receive a grant, allowance or remuneration for this traineeship, paid directly by their employer or academic institution;

    67.  Appreciates that the CJEU fully cooperates with OLAF, the Court, the EDPS and the European Ombudsman; notes that, in 2023, the CJEU has continued to work towards maintaining the established dialogue with national courts, and in particular with the constitutional and supreme courts, and that the CJEU hosted a number of meetings, including the annual meeting of national judges; encourages deeper cooperation between the CJEU and national courts to strengthen uniform application of Union law; recommends establishing a permanent judicial exchange programme for judges from Member States to work alongside their CJEU counterparts, fostering best practices in the interpretation of Union law;

    Communication

    68.  Notes that, in 2023, the CJEU strengthened its efforts to engage with Union citizens by enhancing its outreach on social media; notes that, at the end of 2023, the number of subscribers to the CJEU’s LinkedIn account increased by 32 % and the number of followers on the CJEU’s two accounts on X (formerly Twitter) by 9 %,while the views on its YouTube channel increased by 84,96 % compared to the previous year;

    69.  Welcomes the CJEU’s efforts to enhance strategic communication and transparency towards Union citizens on the judicial activities of the CJEU, especially through the organisation of an open day, the offer for visitors, in particular the special virtual visits, in which 800 students participated in 2023, and the review of the drafting of its press releases and online publications in an accessible style, about matters of media interest or which have an impact on the lives of citizens.

    (1) Regulation (EU, Euratom) 2024/2019 of the European Parliament and of the Council of 11 April 2024 amending Protocol No 3 on the Statute of the Court of Justice of the European Union, OJ L, 2024/2019, 12.8.2024, ELI: http://data.europa.eu/eli/reg/2024/2019/oj.

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