# EDGAR Filing Document

**Accession Number:** 0001081745
**File Stem:** 0001641172-25-023452
**Filing Date:** 2025-8
**Character Count:** 27679
**Document Hash:** 4ab63cfb670b660f21fff5adc7a7cb39
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001641172-25-023452.hdr.sgml**: 20250813

**ACCESSION NUMBER**: 0001641172-25-023452

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 14

**CONFORMED PERIOD OF REPORT**: 20250813

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20250813

**DATE AS OF CHANGE**: 20250813

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** INTELLINETICS, INC.
- **CENTRAL INDEX KEY:** 0001081745
- **STANDARD INDUSTRIAL CLASSIFICATION:** SERVICES-PREPACKAGED SOFTWARE [7372]
- **ORGANIZATION NAME:** 06 Technology
- **EIN:** 870613716
- **STATE OF INCORPORATION:** NV
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-41495
- **FILM NUMBER:** 251211256

**BUSINESS ADDRESS:**
- **STREET 1:** 2190 DIVIDEND DRIVE
- **CITY:** COLUMBUS
- **STATE:** OH
- **ZIP:** 43228
- **BUSINESS PHONE:** 6143888909

**MAIL ADDRESS:**
- **STREET 1:** 2190 DIVIDEND DRIVE
- **CITY:** COLUMBUS
- **STATE:** OH
- **ZIP:** 43228

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** GLOBALWISE INVESTMENTS INC
- **DATE OF NAME CHANGE:** 20000928

?xml version='1.0' encoding='ASCII'?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 8-K**

**CURRENT REPORT**

**Pursuant to Section 13 or 15(d) of**

**The Securities Exchange Act of 1934**

**Date of Report (Date of earliest event reported): August 13, 2025**

**INTELLINETICS, INC.**

**(Exact name of Registrant as specified in its charter)**

---

| | | |
|:---|:---|:---|
| **Nevada** | **001-41495** | **87-0613716** |
| **(State or other jurisdiction**<br> **of incorporation)** | **(Commission**<br> **File Number)** | **(I.R.S Employer**<br> **Identification No.)** |

---

---

| | |
|:---|:---|
| **2190 Dividend Dr., Columbus, Ohio** | **43228** |
| **(Address of principal executive offices)** | **(Zip code)** |

---

**Registrant's telephone number, including area code**: **(614) 388-8908**

**Intellinetics, Inc.**

**(Former name or former address, if changed since last report)**

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| **Title of each class** | **Trading Symbol(s)** | **Name of each exchange on which registered** |
| Common Stock, $0.001 par value | INLX | NYSE American |

---

Securities registered pursuant to Section 12(g) of the Act: Common Stock, $0.001 par value

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

**Item 2.02 Results of Operations and Financial Condition.**

On August 13, 2025, the Company issued a press release announcing its financial results for the fiscal quarter ended June 30, 2025. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated herein by reference.

The information reported under this Item 2.02 of Form 8-K, including Exhibit 99.1, is being furnished and shall not be deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of such section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

**Item 9.01 Financial Statements and Exhibits**

(d) Exhibits

---

| | |
|:---|:---|
| Exhibit No. | Name of Exhibit |
| 99.1 | [Press release issued by Intellinetics, Inc., on August 13, 2025.](ex99-1.htm) |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |

---

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  | INTELLINETICS, INC. | INTELLINETICS, INC. |
|  | By: | */s/ James F. DeSocio* |
|  |  | James F. DeSocio |
|  |  | President and Chief Executive Officer |
| Dated: August 13, 2025 |  |  |

---

## Exhibit 99.1

**Exhibit 99.1**

![](ex99-1_001.jpg)

**Intellinetics Reports Second Quarter Results**

**COLUMBUS, OH – August 13, 2025** – Intellinetics, Inc. <u>(NYSE American: INLX</u>), a digital transformation solutions provider, announced financial results for the second quarter of 2025 and six months ended June 30, 2025.

**2025 Second Quarter Highlights**

● Software as a Service revenue increased 12.6% over the same period in 2024.

---

| | |
|:---|:---|
| ◌ | IntelliCloud Payables Automation continued its commercialization; |
| ◌ | Management believes Payables Automation solutions will be the primary drivers of our SaaS growth going forward. |

---

● Professional services revenue decreased 29.0% from the same period in 2024.

◌ We received new orders for work as of the time of this release, that substantially increases our backlog.

● Total Revenue decreased 13.6% from the same period in 2024.

● Gross profit decreased 9.2% from the same period in 2024, a function of volume, as gross margin percentage rates remained stable in all revenue lines.

● Net loss was $567,590, or $0.13 net loss per basic and fully diluted share, compared with a net income of $75,050, or $0.02 net income per basic and fully diluted share, for the same period in 2024. The change was due to infrastructure, including system security, and SAAS spending to promote growth.

● Adjusted EBITDA was $27,573, compared to $698,217 from the same period in 2024.

● All outstanding notes payable were prepaid in June.

● Ended the quarter with approximately $2.1 million in cash.

---

| | | |
|:---|:---|:---|
|  | **For the Quarter ended June 30,** | **For the Quarter ended June 30,** |
|  | **2025** | **2024** |
| Revenues: |  |  |
| &nbsp;&nbsp;&nbsp;Software as a service | $1577104 | $1400591 |
| &nbsp;&nbsp;&nbsp;Software maintenance services | 330459 | 353966 |
| &nbsp;&nbsp;&nbsp;Professional services | 1899619 | 2677291 |
| &nbsp;&nbsp;&nbsp;Storage and retrieval services | 203631 | 209745 |
| &nbsp;&nbsp;&nbsp;Total revenues | 4010813 | 4641593 |

---

<u>James F. DeSocio,</u> President & CEO of Intellinetics, stated, "Our company suffered from a temporary reduction in our professional services revenue in our document conversion segment which was deeper and longer than we anticipated. This was caused by the timing of our June 1, 2025 renewal of our contract with our largest customer, which we announced June 2. The revenue shortfall in the quarter and first half of the year is significant, but I am happy to share that the recovery is underway now and that during this current quarter, Q3, production is returning to historical levels. We have orders in hand that will keep production at historical levels well into Q1 2026. Further, the renewed contract includes price increases that we expect to provide incremental gross margins the latter half of this year. We also have other positives to call out, including the fact that our margins across all revenue lines have remained stable, and that despite the professional services revenue shortfall, we were still able to achieve positive operating cash flow, as reported in our financial statements. Additionally, we were able to prepay all of our outstanding debt in June, improving our future cash flows and flexibility."

"Despite market challenges, we have stayed laser-focused on growing our SaaS revenues," said DeSocio. "SaaS revenue rose 12.6% from Q2 2024 to Q2 2025. We have added headcount to drive additional SAAS revenue growth recently and we will continue to selectively hire. We are actively running targeted sales campaigns both within our existing partner ecosystems and to our direct customers, in K-12, Payables Automation, and Digital Transformation. These strategic investments are designed to drive strong sales growth in Q3, Q4, and into FY26."

"Our plan is to drive our SAAS business much further, which can take our company to the next level. We believe material penetration of accounts with strategic partners over the next many years is eminently achievable. As reference accounts grow and share the story of driving efficiencies and a tremendous ROI, paired with executive visibility, the sales cycle within each ecosystem will shorten and accelerate. Our business model, which mostly revolves around making good ERP systems better, has an ultimately low cost of generating high value annual recurring revenue." DeSocio concluded.

**Summary – 2025 Second Quarter Results**

Revenues for the three months ended June 30, 2025 were $4,010,813, a decrease of 13.6%, as compared with $4,641,593 for the same period in 2024. This net decrease was driven by a 29.0% decrease in professional services revenues more than offsetting SaaS revenue growth of 12.6%.

Total operating expenses increased 14.3% to $3,235,035, compared to $2,830,873, driven by our initiatives in sales and marketing to grow the business, as well as corresponding initiatives in general and administrative costs to enhance our IT and control environment as part of SOC2 and preparing the organization for growth at scale. Additionally, for the second quarter share-based compensation increased $177,234 from 2024 to 2025. Loss from operations was $508,478 compared to income from operations of $172,106 in the first quarter last year.

Intellinetics reported a net loss of $567,590 compared to net income of $75,050 for the same period in 2024. Basic and diluted net loss per share for the three months ended June 30, 2025 was $(0.13), compared to net income per basic and diluted share of $0.02 for the period ended June 30, 2024. Adjusted EBITDA was $27,573 compared to $698,217 in 2024.

**Summary – 2025 Year-to-Date Results**

Revenues for the six months ended June 30, 2025 were $8,258,158, a decrease of 9.7% compared to $9,148,677 for the same period in 2024. This net decrease was driven by a 21.4% decrease in professional services revenues more than offsetting SaaS revenue growth of 11.2%. Total operating expenses increased 17.8% to $6,788,794 compared to $5,764,997. In addition to structural investments for growth and scale, including sales and marketing expansion, share-based compensation expense increased $200,640. Loss from operations was $1,193,037, compared to income from operations of $137,626 last year. Intellinetics reported a net loss of $1,295,155, or $(0.31) per basic and diluted share compared to net loss of $99,664, or $(0.02) per basic and diluted share, for the same period in 2024. Adjusted EBITDA was $104,162 compared to $1,371,579 in 2024.

**2025 Outlook**

Based on management's current plans and assumptions, the Company is revising its guidance and expects that 2025 revenues will be less than 2024 revenues, driven by weakness in professional services in the first half of the year, however, the Company expects to still grow SAAS revenues and maintain positive Adjusted EBITDA. The Company expects its 2025 Adjusted EBITDA to be reduced by more than half compared to fiscal year 2024, due to increased investments in sales and marketing intended to provide returns on those investments in late 2025 and beyond.

**Conference Call**

Intellinetics is holding a conference call to discuss these results on a live webcast at 4:30 p.m. ET today. Interested parties can access the webcast through the Intellinetics website at <u>https://ir.intellinetics.com/</u>. Investors can also dial in to the webcast by calling (877) 407-8133 (toll-free) or (201) 689-8040. A replay of the call can also be accessed via phone through September 13, 2025 by dialing (877) 660-6853 (toll-free) or (201) 612-7415 and using replay access code 13755361.

**About Intellinetics, Inc.**

Intellinetics, Inc. (NYSE American: INLX) is enabling the digital transformation. Intellinetics empowers organizations to manage, store and protect their important documents and data. The Company's flagship solution, the IntelliCloud<sup>™</sup> content management platform, delivers advanced security, compliance, workflow and collaboration features critical for highly regulated, risk-intensive markets. IntelliCloud connects documents to users and the processes they support anytime, anywhere to accelerate innovation and empower organizations to think and work in new ways. In addition, Intellinetics offers business process outsourcing (BPO), document and micrographics scanning services, and records storage. From highly regulated industries like Healthcare/Human Service Providers, K-12, Public Safety, and State and Local Governments, to businesses looking to move away from paper-based processes, Intellinetics is the all-in-one, compliant, document management solution. Intellinetics is headquartered in Columbus, Ohio. For additional information, please visit <u>www.intellinetics.com</u>.

**Cautionary Statement**

Statements in this press release which are not purely historical, including statements regarding future business and growth, increased production in professional services, increases in gross margins from price increases, increased sales and marketing efforts, future revenues, including the "2025 Outlook" for revenues and EBITDA; organic revenue growth from both new and existing customers; successful completion of existing orders; sales penetration with strategic distribution and reseller partners; customer returns on investment in our software solutions; market share, growth of our markets; sustainable profitability; the rollout and success of new products, including Payables Automation; continued growth of SaaS revenue; execution of our business plan, strategy, direction and focus; and other intentions, beliefs, expectations, representations, projections, plans or strategies regarding future growth, financial results, and other future events are forward-looking statements. The forward-looking statements involve risks and uncertainties including, but not limited to, the risks associated with the effect of changing economic conditions including inflationary pressures; the effect of tariff uncertainty on our customers; challenges with hiring and maintaining a stable workforce; reductions in governmental funding of public education; our ability to execute on our business plan and strategy including our transition to a SaaS-based company, customary risks attendant to acquisitions, trends in the products markets, variations in Intellinetics' cash flow or adequacy of capital resources, market acceptance risks, the success of Intellinetics' solutions providers, including human services, health care, and education, technical development risks, and other risks, uncertainties and other factors discussed from time to time in its reports filed with or furnished to the Securities and Exchange Commission, including in Intellinetics' most recent annual report on Form 10-K as well as subsequently filed reports on Form 8-K. Intellinetics cautions investors not to place undue reliance on the forward-looking statements contained in this press release. Intellinetics disclaims any obligation and does not undertake to update or revise any forward-looking statements in this press release. Expanded and historical information is made available to the public by Intellinetics on its website at <u>www.intellinetics.com</u> or at <u>www.sec.gov</u>.

**CONTACT:**

Joe Spain, CFO

Intellinetics, Inc.

614.921.8170 <u>investors@intellinetics.com</u>

 ****

**Non-GAAP Financial Measures**

Intellinetics uses non-GAAP Adjusted EBITDA as supplemental measures of our performance that are not required by, or presented in accordance with, accounting principles generally accepted in the United States (GAAP). A non-GAAP financial measure is a numerical measure of a company's financial performance that excludes or includes amounts so as to be different from the most directly comparable measure calculated and presented in accordance with GAAP in the statement of income, balance sheet or statement of cash flows of a company.

**Adjusted EBITDA:** Adjusted EBITDA is not a measurement of financial performance under GAAP and should not be considered as an alternative to net income, operating income, or any other performance measure derived in accordance with GAAP, or as an alternative to cash flow from operating activities or a measure of our liquidity. Intellinetics urges investors to review the reconciliation of non-GAAP Adjusted EBITDA to the comparable GAAP Net Income, which is included in this press release, and not to rely on any single financial measure to evaluate Intellinetics' financial performance.

We believe that Adjusted EBITDA is a useful performance measure and is used by us to facilitate a comparison of our operating performance on a consistent basis from period-to-period and to provide for a more complete understanding of factors and trends affecting our business than measures under GAAP can provide alone. We define "Adjusted EBITDA" as earnings before interest expense, any income taxes, depreciation and amortization expense, non-cash portion of share-based compensation, note conversion and note or equity offer warrant or stock expense, gain or loss on debt extinguishment, change in fair value of contingent consideration, and transaction costs.

**Reconciliation of Net (Loss) Income to Adjusted EBITDA**

---

| | | |
|:---|:---|:---|
|  | For the Three Months Ended June 30, | For the Three Months Ended June 30, |
|  | 2025 | 2024 |
| Net (loss) income - GAAP | $(567590) | $75050 |
| Interest expense, net | 59112 | 97056 |
| Depreciation and amortization | 307442 | 274638 |
| Share-based compensation | 228609 | 251473 |
| Adjusted EBITDA | $27573 | $698217 |

---

---

| | | |
|:---|:---|:---|
|  | For the Six Months Ended June 30, | For the Six Months Ended June 30, |
|  | 2025 | 2024 |
| Net (loss) income - GAAP | $(1295155) | $(99664) |
| Interest expense, net | 102118 | 237290 |
| Depreciation and amortization | 615127 | 538648 |
| Share-based compensation | 682072 | 695305 |
| Adjusted EBITDA | $104162 | $1371579 |

---

**INTELLINETICS, INC. and SUBSIDIARIES**

**Condensed Consolidated Statements of Operations**

**(unaudited)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Three Months Ended**<br> **June 30,** | **For the Three Months Ended**<br> **June 30,** | **For the Six Months Ended**<br> **June 30,** | **For the Six Months Ended**<br> **June 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| Revenues: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Software as a service | $1577104 | $1400591 | $3119273 | $2805744 |
| &nbsp;&nbsp;&nbsp;Software maintenance services | 330459 | 353966 | 665650 | 711949 |
| &nbsp;&nbsp;&nbsp;Professional services | 1899619 | 2677291 | 4057934 | 5162748 |
| &nbsp;&nbsp;&nbsp;Storage and retrieval services | 203631 | 209745 | 415301 | 468236 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total revenues | 4010813 | 4641593 | 8258158 | 9148677 |
| Cost of revenues: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Software as a service | 247051 | 217586 | 462180 | 433578 |
| &nbsp;&nbsp;&nbsp;Software maintenance services | 12978 | 13364 | 29343 | 29074 |
| &nbsp;&nbsp;&nbsp;Professional services | 964448 | 1345666 | 2004454 | 2634794 |
| &nbsp;&nbsp;&nbsp;Storage and retrieval services | 59779 | 61998 | 166424 | 148608 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total cost of revenues | 1284256 | 1638614 | 2662401 | 3246054 |
| Gross profit | 2726557 | 3002979 | 5595757 | 5902623 |
| Operating expenses: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;General and administrative | 2272221 | 2025796 | 4704255 | 4154289 |
| &nbsp;&nbsp;&nbsp;Sales and marketing | 655372 | 530439 | 1469412 | 1072060 |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | 307442 | 274638 | 615127 | 538648 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 3235035 | 2830873 | 6788794 | 5764997 |
| (Loss) income from operations | (508478) | 172106 | (1193037) | 137626 |
| Interest expense, net | (59112) | (97056) | (102118) | (237290) |
| Net (loss) income | $(567590) | $75050 | $(1295155) | $(99664) |
| Basic net (loss) income per share: | $(0.13) | $0.02 | $(0.31) | $(0.02) |
| Diluted net (loss) income per share: | $(0.13) | $0.02 | $(0.31) | $(0.02) |
| Weighted average number of common shares outstanding - basic | 4251689 | 4229518 | 4213389 | 4171570 |
| Weighted average number of common shares outstanding - diluted | 4251689 | 4722063 | 4213389 | 4171570 |

---

**INTELLINETICS, INC. and SUBSIDIARIES**

**Condensed Consolidated Balance Sheets**

---

| | | |
|:---|:---|:---|
|  | **(Unaudited)**<br>**June 30, 2025** |<br>**December 31, 2024** |
| **ASSETS** |  |  |
| Current assets: |  |  |
| &nbsp;&nbsp;&nbsp;Cash | $2071475 | $2489236 |
| &nbsp;&nbsp;&nbsp;Accounts receivable, net | 771802 | 1111504 |
| &nbsp;&nbsp;&nbsp;Accounts receivable, unbilled | 1091894 | 1296524 |
| &nbsp;&nbsp;&nbsp;Parts and supplies, net | 164561 | 100561 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 502994 | 476731 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 4602726 | 5474556 |
| Property and equipment, net | 1195766 | 1093867 |
| Right of use assets, operating | 1539922 | 1894866 |
| Right of use assets, finance | 201369 | 237741 |
| Intangible assets, net | 3148242 | 3399029 |
| Goodwill | 5789821 | 5789821 |
| Other assets | 680539 | 685076 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets | $17158385 | $18574956 |
| **LIABILITIES AND STOCKHOLDERS' EQUITY** |  |  |
| Current liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | $564394 | $310623 |
| &nbsp;&nbsp;&nbsp;Accrued compensation | 364281 | 493700 |
| &nbsp;&nbsp;&nbsp;Accrued expenses | 218144 | 172421 |
| &nbsp;&nbsp;&nbsp;Lease liabilities, operating - current | 865916 | 842468 |
| &nbsp;&nbsp;&nbsp;Lease liabilities, finance - current | 72688 | 69261 |
| &nbsp;&nbsp;&nbsp;Deferred revenues | 2593372 | 3411852 |
| &nbsp;&nbsp;&nbsp;Notes payable - current |  | 781936 |
| &nbsp;&nbsp;&nbsp;Notes payable - related party - current | - | 515512 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 4678795 | 6597773 |
| Long-term liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Lease liabilities, operating - net of current portion | 769116 | 1161404 |
| &nbsp;&nbsp;&nbsp;Lease liabilities, finance - net of current portion | 146802 | 184024 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total long-term liabilities | 915918 | 1345428 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 5594713 | 7943201 |
| Stockholders' equity: |  |  |
| &nbsp;&nbsp;&nbsp;Common stock, $0.001 par value, 25,000,000 shares authorized; 4,473,130 and 4,249,735 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively | 4473 | 4250 |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 34495592 | 32268743 |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (22936393) | (21641238) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total stockholders' equity | 11563672 | 10631755 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and stockholders' equity | $17158385 | $18574956 |

---

**INTELLINETICS, INC. and SUBSIDIARIES**

**Condensed Consolidated Statements of Cash Flows**

**(unaudited)**

---

| | | |
|:---|:---|:---|
|  | **For the Six Months Ended** **June 30,** | **For the Six Months Ended** **June 30,** |
|  | **2025** | **2024** |
| Cash flows from operating activities: |  |  |
| Net loss | $(1295155) | $(99664) |
| Adjustments to reconcile net loss to net cash |  |  |
| provided by operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | 615127 | 538648 |
| &nbsp;&nbsp;&nbsp;Bad debt expense (recovery) | 29126 | (143) |
| &nbsp;&nbsp;&nbsp;Loss on disposal of fixed assets | 10202 | 547 |
| &nbsp;&nbsp;&nbsp;Amortization of deferred financing costs | 42052 | 94531 |
| &nbsp;&nbsp;&nbsp;Amortization of right of use assets, financing | 36372 | 34954 |
| &nbsp;&nbsp;&nbsp;Share-based compensation | 965471 | 764831 |
| Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Accounts receivable | 310576 | 401330 |
| &nbsp;&nbsp;&nbsp;Accounts receivable, unbilled | 204630 | (162476) |
| &nbsp;&nbsp;&nbsp;Parts and supplies | (64000) | 16346 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | (26263) | 31049 |
| &nbsp;&nbsp;&nbsp;Accounts payable and accrued expenses | 116759 | 345041 |
| &nbsp;&nbsp;&nbsp;Operating lease assets and liabilities, net | (13896) | (3990) |
| &nbsp;&nbsp;&nbsp;Deferred revenues | (818480) | (172623) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total adjustments | 1407676 | 1888045 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by operating activities | 112521 | 1788381 |
| Cash flows from investing activities: |  |  |
| &nbsp;&nbsp;&nbsp;Capitalization of internal use software | (209171) | (198051) |
| &nbsp;&nbsp;&nbsp;Purchases of property and equipment | (262733) | (200715) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in investing activities | (471904) | (398766) |
| Cash flows from financing activities: |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds from issuance of common stock | 1716957 |  |
| &nbsp;&nbsp;&nbsp;Costs paid for issuance of common stock | (118629) |  |
| &nbsp;&nbsp;&nbsp;Principal payments on financing lease liability | (33795) | (29668) |
| &nbsp;&nbsp;&nbsp;Payments to taxing authorities in connection with shares directly withheld from employees | (283399) | (69526) |
| &nbsp;&nbsp;&nbsp;Exercise of stock warrants | (12) |  |
| &nbsp;&nbsp;&nbsp;Repayment of notes payable | (807331) | (825000) |
| &nbsp;&nbsp;&nbsp;Repayment of notes payable - related parties | (532169) | - |
| &nbsp;&nbsp;&nbsp;Net cash used in financing activities | (58378) | (924194) |
| Net (decrease) increase in cash | (417761) | 465421 |
| Cash - beginning of period | 2489236 | 1215248 |
| Cash - end of period | $2071475 | $1680669 |
| Supplemental disclosure of cash flow information: |  |  |
| &nbsp;&nbsp;&nbsp;Cash paid during the period for interest | $74425 | $160813 |
| &nbsp;&nbsp;&nbsp;Cash paid during the period for income taxes | $18849 | $12999 |
| Supplemental disclosure of non-cash financing activities: |  |  |
| &nbsp;&nbsp;&nbsp;Right-of-use asset obtained in exchange for operating lease liability | $43430 | $- |
| &nbsp;&nbsp;&nbsp;Right-of-use asset obtained in exchange for finance lease liability | $- | $89289 |

---