Bakkt Reports Second Quarter 2025 Results
Management Commentary:
Andy Main, former President and Co-CEO of Bakkt said, 'Over the past year as CEO of Bakkt, we strategically realigned the company to position it to unlock its full potential—streamlining operations, reducing costs, exiting non-core businesses, forging a transformative partnership with DTR to expand into stablecoin payments and strengthening our leadership with Akshay Naheta and other senior executives. Today, Bakkt is a leaner, more agile organization, fully focused on the massive and accelerating digital asset trend, where we see the greatest opportunity for long-term growth.'
Mr. Main continued, 'With the sale of Bakkt Trust to ICE completed, a definitive agreement to sell our Loyalty business to Roman DBDR Technology Advisors in place, and the successful recapitalization of our balance sheet with $100 million in new growth capital, effective today, I am handing the reins to Akshay, who will assume the sole CEO position to lead Bakkt forward, focused fully on strengthening and expanding Bakkt's crypto platform. With Bakkt's strong regulatory moat, institutional-grade technology and Akshay's leadership and vision, I am confident we are well-positioned to lead the next wave of digital asset innovation."
Akshay Naheta, CEO of Bakkt, stated, 'It's an honor to lead Bakkt as we accelerate our transformation into a global leader in crypto infrastructure. We are focused on three key strategic pillars that will position Bakkt at the forefront of the digital asset revolution:
Enhancing our brokerage-in-a-box solution with significant technology upgrades, enabling clients to achieve faster time-to-market with advanced brokerage and trading capabilities, improving user experience, and unlocking new monetization opportunities.
Launching our stablecoin payments solution, Bakkt Agent, to deliver disruptive, AI-enabled, consumer finance and cross-border payment capabilities to consumers.
Expanding our Bitcoin treasury initiative, focusing on markets where we hold unique structural advantages, starting with Japan.'
Mr. Naheta added, 'In the upcoming quarter, we will conduct a comprehensive review of our cost structure to ensure we are optimized, driving synergies across our business, and accelerating our path to profitability.'
Mr. Naheta concluded, 'I want to express my sincere gratitude to our customers and shareholders for their unwavering support and patience throughout this critical phase of Bakkt's transformation. We are in the early stages of a generational shift around what money is, how money moves, and how markets operate and trade. Bakkt is uniquely positioned to lead and define this evolution.'
Second Quarter 2025 Key Performance Indicators:
Total transacting accounts remained relatively flat year-over-year and declined 11.4% sequentially to approximately 689,000, driven by reduced market activity.
Notional traded volume, comprised of total crypto trading and loyalty redemption, increased 9.0% year-over-year to $733.1 million for the quarter, driven by stronger crypto market activity from Q2 2024 and increased prices from Q2 2024 and down 39.6% sequentially due to the reduced market activity following the post-election cool off period in Q4 of last year.
Assets under custody increased 39.1% year-over-year to $1,355.0 million, primarily due to higher trading prices for crypto assets and declined 27.7% sequentially due to the sale of Bakkt Trust on May 15 th.
Second Quarter 2025 Financial Highlights (unaudited):
Total revenues of $577.9 million for the quarter reflect a 13.3% increase year-over-year in gross crypto services revenues driven by the overall increase in broader market activity from Q2 2024 and a decrease of 46.2% sequentially due to the reduced broader market activity from Q1 2025. Net loyalty revenues of $9.8 million for the quarter decreased 23.3% year-over-year driven by reduced overall volume-based services revenue and transaction volume and the exit of a loyalty client in 2024 and increased 6.8% sequentially driven by higher transaction volumes driven by seasonal redemption promotions.
Total operating expenses of $596.4 million for the quarter, up 12.1% year-over-year driven by an increase in crypto costs and execution, clearing and brokerage fees ('ECB') driven by higher trading volume, and down 45.5% sequentially in line with reduced revenues.
Total operating expenses excluding crypto costs and ECB decreased 15.4% year-over-year to $31.2 million for the quarter, driven by reductions in Selling, General and Administrative expenses ('SG&A') and compensation and benefits expenses resulting from our restructuring actions in 2024 and relatively flat sequentially.
Operating loss improved 16.0% year-over-year to $18.5 million for the quarter due to the reduction in operating expenses (outside of ECB) driven from the reduction in SG&A and compensation and benefits expenses resulting from our restructuring actions in 2024 and remained flat sequentially.
Net loss improved 15.1% year-over-year to $30.2 million for the quarter driven by the reduction in operating expenses (outside of ECB) and the reduced loss from the fair value of warrant liability and decreased 285.8% sequentially from a profit due to the gain from change in fair-value of warrant liability in the first quarter.
Adjusted EBITDA loss (non-GAAP) improved 29.9% year-over-year to $12.6 million for the quarter primarily due to the overall decrease in SG&A and compensation and benefits expenses and improved 13.7% sequentially due to lower total operating expenses.
Recent Operational Updates:
$75 Million Capital Raise to further Bitcoin Treasury Strategy:
On July 30, 2025, the Company successfully closed a $75 million underwritten public offering issuing 6.75 million shares of Class A common stock and pre-funded warrants to purchase 746,373 shares of Class A common stock at $10.00 per share with underwriters granted a 30-day option to purchase up to an additional 1.125 million shares. Bakkt intends to use the net proceeds from the offering to purchase Bitcoin and other digital assets in accordance with its investment policy, for working capital and for general corporate purposes.
Bitcoin Treasury Strategy:
In furtherance of its Bitcoin treasury strategy, Bakkt entered into a share purchase agreement on August 4, 2025 to acquire approximately 30% of MHT (TSE: 8105), a Tokyo Stock Exchange-listed company, making Bakkt the company's largest shareholder. This strategic investment initiates the execution of Bakkt's Japan Bitcoin treasury strategy.
As part of the transaction, Phillip Lord, President of Bakkt International, will become Chief Executive Officer of MHT, and MHT will include investing in Bitcoin and other digital assets as part of its treasury. In connection with the transaction, Bakkt has acquired the Web domain bitcoin.jp, which, subject to the approval of MHT's shareholders, will become the new name of MHT.
Definitive Agreement for Sale of Loyalty Business:
On July 23, 2025, the Company entered into a definitive agreement to sell its loyalty business to Project Labrador Holdco, LLC, a wholly owned subsidiary of Roman DBDR Technology Advisors, Inc. The transaction, which is subject to customary closing conditions, is expected to close in the third quarter of 2025. The transaction will include monetary accommodations to the buyer of an amount of cash equal to $11 million plus (i) the amount of estimated negative working capital of the business as of the closing and (ii) the amount of estimated indebtedness, subject to post-closing adjustments, as well as a short-term loan of certain restricted cash transferred with the business to facilitate the transfer. The Company will report the Loyalty business as a discontinued operation beginning in Q3 2025, allowing management to focus resources on the Company's core crypto offerings and stablecoin payments infrastructure.
Leadership Transition:
With the regulatory approval process for Akshay Naheta substantially complete, Andy Main will step down from his role as Co-CEO and Director effective today, August 11, 2025, and Akshay Naheta will assume the role of Chief Executive Officer. Mr. Main will become an advisor to the Company to, among other things, lead the completion of the Company's sale of its loyalty business. This leadership transition reflects the natural progression of Bakkt's transformation into a pure-play crypto infrastructure company and positions Mr. Naheta to drive the Company's vision of being a leading crypto platform at the forefront of the accelerating digital asset transformation of global money and finance.
Webcast and Conference Call Information
Bakkt will host a conference call at 5:00 PM ET, August 11, 2025. The earnings conference call will be webcast live here and archived on the investor relations section of Bakkt's corporate website under the 'Events & Presentations' section, along with any related earnings materials.
Investors and analysts interested in participating in the call are invited to dial (833) 470-1428 or (404) 975-4839, and reference participant access code 446108 approximately ten minutes prior to the start of the call.
About Bakkt
Founded in 2018, Bakkt builds solutions that enable our clients to grow with the crypto economy. Through institutional-grade trading and onramp capabilities, our clients leverage technology that's built for sustainable, long-term involvement in crypto.
Bakkt is headquartered in Alpharetta, GA. For more information, visit: https://www.bakkt.com/ | X - @Bakkt | LinkedIn
Bakkt-E
Note on Forward-Looking Statements
This press release contains '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. Such statements include, but are not limited to, the Company's ability to grow and manage growth profitably; the possibility that the Company may be unable to obtain the applicable regulatory approvals to execute on the commercial agreement with DTR; whether the Company will be able to successfully integrate its operations with those of DTR, including its infrastructure, and achieve the expected benefits therefrom; the regulatory environment for cryptocurrencies and digital stablecoin payments; changes in the Company's business strategy; the Company's adoption of its updated investment policy ('Investment Policy') and related international treasury strategy, including the Company's ability to successfully consummate acquisitions, integrate or manage investments in potential acquisition targets, including MarushoHotta Co.; the price of digital assets, including Bitcoin; risks associated with owning digital assets, including Bitcoin, including price volatility, limited liquidity and trading volumes, relative anonymity, potential widespread susceptibility to market abuse and manipulation, compliance and internal control failures at exchanges and other risks inherent in its entirely electronic, virtual, form and decentralized network; the fluctuation of the Company's operating results, including because the Company may be required to account for its digital assets at fair value; the Company's ability to time the price of its purchase of digital assets pursuant to its strategy; the impact of the market value of digital assets on the Company's ability to satisfy its financial obligations, including any debt financings; unrealized fair value gains on its digital asset holdings subjecting the Company to the corporate alternative minimum tax; legal, commercial, regulatory and technical uncertainty regarding digital assets and enhanced regulatory oversight of companies holding digital assets including the possibility that regulators reclassify any digital assets the Company holds, including Bitcoin, as a security causing the Company to be in violation of securities laws and be classified as an 'investment company' under the Investment Company Act of 1940; competition by other Bitcoin treasury companies and the availability of spot-traded products for Bitcoin; enhanced regulatory oversight as a result of the Company's Investment Policy and related international treasury strategy; the possibility of experiencing greater fraud, security failures or operational problems on digital asset trading venues compared to trading venues for more established asset classes, and any malfunction, breakdown or abandonment of the underlying blockchain protocols, or other technological difficulties, may prevent access to or use of such digital assets; the concentration of the Company's expected digital asset holdings relative to non-digital assets; the inability to use the Company's digital asset holdings as a source of liquidity to the same extent as cash and cash equivalents, due to, for example, risks associated with digital assets and other risks inherent to its entirely electronic, virtual form and decentralized network; the Company or a third-party service provider experiencing a security breach or cyber-attack where unauthorized parties obtain access to its digital assets; the loss of access to or theft or data loss of the Company's digital assets, which could be unrecoverable due to the immutable nature of blockchain transactions; if the Company elects to hold its digital assets through a third-party custodian, the loss of direct control over its digital assets and dependence on the custodian's security practices and operational integrity which may lead to the loss of its digital assets as a result of the insolvency of the custodian, theft by employees or insiders of the custodian or if the custodian's security measures are comprised, including as a result of a cyber-attack; the Company not being subject to the legal and regulatory protections applicable to investment companies such as mutual funds and exchange-traded funds, or to obligations applicable to investment advisers; the non-performance, breach of contract or other violations by counterparties assisting the Company in effecting its Investment Policy and related international treasury strategy; the Company's future capital requirements and sources and uses of cash, including funds to satisfy its liquidity needs; changes in the market in which the Company competes, including with respect to its competitive landscape, technology evolution or changes in applicable laws or regulations; changes in the markets that the Company targets; volatility and disruptions in the crypto, digital payments and stablecoin markets that subject the Company to additional risks, including the risk that banks may not provide banking services to the Company and market sentiments regarding crypto currencies, digital payments and stablecoins; the possibility that the Company may be adversely affected by other macroeconomic, geopolitical, business, and/or competitive factors; the Company's ability to launch new services and products, including with its expected commercial partners, or to profitably expand into new markets and services; the Company's ability to execute its growth strategies, including identifying and executing acquisitions and divestitures and the Company's initiatives to add new clients; the Company's ability to reach definitive agreements with its expected commercial counterparties; the Company's failure to comply with extensive government regulations, oversight, licensure and appraisals; uncertain and evolving regulatory regime governing blockchain technologies, stablecoins, digital payments and crypto; the Company's ability to establish and maintain effective internal controls and procedures; the exposure to any liability, protracted and costly litigation or reputational damage relating to the Company's data security; the impact of any goodwill or other intangible assets impairments on the Company's operating results; the Company's ability to maintain the listing of its securities on the New York Stock Exchange; and other risks and uncertainties indicated in the Company's filings with the SEC, including its most recent Annual Report on Form 10-K for the year ended December 31, 2024, its quarterly report on Form 10-Q for the quarter ended March 31, 2025, the risks regarding the Company's adoption of its Investment Policy set forth in Exhibit 99.1 to the Company's Current Report on Form 8-K, filed with the U.S. Securities and Exchange Commission on June 10, 2025 and its quarterly report on Form 10-Q for the quarter ended June 30, 2025. You are cautioned not to place undue reliance on such forward-looking statements. Such forward-looking statements relate only to events as of the date on which such statements are made and are based on information available to us as of the date of this press release. Unless otherwise required by law, we undertake no obligation to update any forward-looking statements made in this press release to reflect events or circumstances after the date of this press release or to reflect new information or the occurrence of unanticipated events.
Definitions
Transacting accounts: unique accounts that perform at least one transaction across crypto buy/sell and loyalty redemption each month. Monthly figures are de-duped for the month. Quarterly figure represents sum of all months in the quarter.
Notional traded volume: total notional volume of transactions across crypto buy/sell and loyalty redemption. Figures represent gross values recorded as of order date.
Assets under custody: the sum of coin quantities held by customers multiplied by the final quote for each coin on the last day of the quarter.
Bakkt Q2 2025 Financial Statements
Consolidated Balance Sheets
$ in thousands except per share data
As of 6/30/25
As of 12/31/24
Assets
Current assets
Cash and cash equivalents
$43,493
$39,049
Restricted cash
17,965
24,889
Customer funds
21,336
88,566
Accounts receivable, net
23,306
24,648
Prepaid insurance
2,068
3,972
Other current assets
2,292
2,721
Total current assets
110,462
183,845
Property, equipment and software, net
1,839
2,064
Goodwill
64,658
68,001
Intangible assets, net
2,900
2,900
Other assets
10,281
12,567
Total assets
$190,140
$269,377
Liabilities and stockholders' equity
Current liabilities
Accounts payable and accrued liabilities
$42,683
$39,911
Customer funds payable
21,336
88,566
Deferred revenue, current
1,630
1,605
Due to related party
—
2,360
Convertible debentures, net
22,307
—
Other current liabilities
5,236
5,277
Total current liabilities
93,192
137,719
Deferred revenue, noncurrent
2,062
2,621
Warrant liability
23,279
46,923
Other noncurrent liabilities
13,782
19,261
Total liabilities
132,315
206,524
Stockholders' equity
Class A Common Stock ($0.0001 par value, 60,000,000 shares authorized, 6,974,740 shares issued and outstanding as of June 30, 2025 and 6,510,885 shares issued and outstanding as of December 31, 2024)
1
1
Class V Common Stock ($0.0001 par value, 10,000,000 shares authorized, 7,177,076 shares issued and outstanding as of June 30, 2025 and 7,178,303 shares issued and outstanding as of December 31, 2024)
1
1
Additional paid-in capital
840,671
832,693
Accumulated other comprehensive loss
(395)
(841)
Accumulated deficit
(804,918)
(797,960)
Total stockholders' equity
35,359
33,894
Noncontrolling interest
22,531
28,959
Total equity
57,825
62,853
Total liabilities and stockholders' equity
$190,140
$269,377
Expand
Consolidated Statements of Operations
$ in thousands except per share data
2Q25
2Q24
Revenues:
Crypto services
$568,103
$497,141
Loyalty services, net
9,779
12,757
Total revenues
577,882
509,898
Operating expenses:
Crypto costs
561,074
491,701
Execution, clearing and brokerage fees
4,139
3,392
Compensation and benefits
20,124
22,381
Professional services
4,069
3,639
Technology and communication
2,901
3,651
Selling, general and administrative
3,590
5,516
Depreciation and amortization
154
117
Related party expenses
—
150
Impairment of long-lived assets
—
—
Restructuring expenses
—
926
Other operating expenses
320
442
Total operating expenses
596,371
531,915
Operating loss
(18,489)
(22,017)
Interest income, net
(53)
1,245
(Loss) gain from change in fair value of warrant liability
(8,604)
(15,114)
Other (expenses) income, net
(2,946)
448
Loss before income taxes
(30,092)
(35,438)
Income tax expense
(60)
(74)
Net Loss
(30,152)
(35,512)
Less: Net loss attributable to noncontrolling interest
(15,418)
(19,088)
Net loss attributable to Bakkt Holdings, Inc.
$(14,734)
$(16,424)
Net loss per share attributable to Class A Common Stockholders
Basic
$ (2.16)
$(2.67)
Diluted
$ (2.16)
$(2.67)
Expand
Consolidated Statements of Cash Flows
$ in thousands
6MO Ended
6/30/25
6MO Ended
6/30/24
Cash flows from operating activities:
Net loss
$(13,915)
$(56,787)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization
374
174
Non-cash lease expense
566
989
Share-based compensation expense
9,681
10,419
Impairment of long-lived assets
—
288
Loss on sale of Bakkt Trust
2,301
—
Gain on lease assignment
(1,755)
—
(Gain) loss from change in fair value of warrant liability
(23,644)
6,068
Other
87
2
Changes in operating assets and liabilities:
Accounts receivable
1,672
6,035
Prepaid insurance
1,904
7,105
Accounts payable and accrued liabilities
3,592
(15,739)
Due to related party
(2,360)
(570)
Deferred revenue
(535)
(2,410)
Operating lease liabilities
(2,698)
(1,934)
Customer funds payable
(67,230)
20,405
Assets and liabilities of businesses held for sale
(3,476)
—
Other assets and liabilities
(493)
(1,585)
Net cash (used in operating activities
(95,929)
(27,540)
Cash flows from investing activities:
Capitalized internal-use software development costs and other capital expenditures
(149)
(2,234)
Purchase of available-for-sale securities
—
(17,996)
Proceeds from the settlement of available-for-sale securities
—
22,223
Proceeds from Sale of Bakkt Trust
4,518
—
Net cash used in investing activities
4,369
1,993
Cash flows from financing activities:
Proceeds from Concurrent Offerings, net of issuance costs
—
46,505
Proceeds from the exercise of warrants
1
3
Withholding tax payments on net share settlements on equity awards
(1,712)
(2,318)
Proceeds from borrowings on revolving credit facility
5,000
—
Proceeds on revolving credit facility
(5,000)
—
Cash paid for financing fees
(775)
—
Proceeds from issuance of convertible debentures
23,750
—
Net cash provided by financing activities
21,264
44,190
Effect of exchange rate changes
915
(620)
Net (decrease) increase in cash, cash equivalents, restricted cash, customer funds and deposits
(69,381)
18,023
Cash, cash equivalents, restricted cash, customer funds and deposits at the beginning of the period
153,746
118,498
Cash, cash equivalents, restricted cash, customer funds and deposits at the end of the period
$84,365
$136,521
Expand
Reconciliation of Non-GAAP Financial Measures
Non-GAAP Financial Measures – EBITDA and Adjusted EBITDA
EBITDA is defined as earnings before interest, income taxes, depreciation and amortization. Adjusted EBITDA is defined as earnings before interest, income taxes, depreciation, amortization, acquisition-related expenses, share-based and unit-based compensation expense, goodwill and intangible assets impairments, restructuring charges, changes in the fair value of our warrant liability and certain other non-cash and/or non-recurring items that do not contribute directly to our evaluation of operating results and are not components of our core business operations. EBITDA and Adjusted EBITDA provide management with an understanding of earnings before the impact of investing and financing transactions and income taxes, and the effects of aforementioned items that do not reflect the ordinary earnings of our operations. These measures may be useful to an investor in evaluating our performance. EBITDA and Adjusted EBITDA are not measures of our financial performance under GAAP and should not be considered as an alternative to net income (loss) or other performance measures derived in accordance with GAAP. Our definitions of EBITDA and Adjusted EBITDA may not be comparable to similarly titled measures used by other companies.
Non-GAAP financial measures like EBITDA and Adjusted EBITDA have limitations, should be considered as supplemental in nature and are not meant as a substitute for the related financial information prepared in accordance with GAAP. The non-GAAP financial measures should be considered alongside other financial performance measures, including net loss and our other financial results presented in accordance with GAAP.
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New Mexico – Permian Basin: After four years of expenditures, Empire anticipates receiving a ruling from the New Mexico Oil Conservation Commission ('NMOCD') in Q3-2025, regarding its applications to revoke four existing permits and deny five new applications for what the Company believes is the illegal disposal of wastewater into Eunice Monument South Unit's ('EMSU') Unitized Interval by the largest of the third-party Saltwater Disposal ('SWD') operators; Pending the NMOCD's decision, Empire plans to proceed with Motions to Revoke the existing permits granted to the remaining three SWD Companies disposing wastewater into the EMSU and Arrowhead Grayburg Unit ('AGU') Unitized Interval, while concurrently advancing litigation for trespass and damages; While litigation has limited the scope of development activity in the affected areas, production from the EMSU and AGU units has increased in recent months, reflecting ongoing optimization efforts; and The Company expects final resolution of this matter to result in a meaningful reduction in operating expenses and contribute to improved financial performance going forward. Texas – East Texas Basin: Empire remains on track to initiate drilling operations in Q4-2025, as part of its broader development strategy in the region; The upcoming program is designed to target multiple prospective pay zones identified during technical evaluation, with a focus on horizontal development opportunities that support long-term, capital-efficient production; The Company expects this activity to establish a foundation for scalable development throughout 2026 and beyond; As of the first week of August 2025, the first drilling pad has been completed, and the Company is actively securing materials, equipment, rigs, and other necessary resources to begin and conclude drilling operations on the initial wells in Q4-2025; and The production targets associated with these wells are expected to deliver the most significant impact to Empire's portfolio to date. SECOND QUARTER 2025 FINANCIAL AND OPERATIONAL RESULTS Net sales volumes for Q2-2025 were 2,357 Boe/d, including 1,493 barrels of oil per day; 430 barrels of NGLs per day, and 2,606 thousand cubic feet per day ('Mcf/d') or 434 Boe/d of natural gas. Oil sales volumes decreased approximately 15% compared to Q2-2024 primarily due to redrilling efforts in North Dakota and natural decline. Empire reported Q2-2025 total product revenue of $8.7 million versus $12.8 million in Q2-2024. Contributing to the decrease were lower oil sales volumes and lower realized oil and NGL prices. Realized oil and natural gas liquids prices decreased 23% and 14%, respectively, due to a general decline in overall market pricing. Lease operating expenses in Q2-2025 decreased to $6.4 million versus $7.5 million in Q2-2024 primarily due to lower workover costs. Q2-2025 workover expense decreased to $0.5 million versus $1.6 million in Q2-2024. Higher workover expense in 2024 was primarily in New Mexico as Empire continued work in the region to enhance and maintain production. Production and ad valorem taxes for Q2-2025 were $0.8 million versus $1.1 million in Q2-2024, as a result of lower product revenues. Depreciation, Depletion, and Amortization ('DD&A') and Accretion for Q2-2025 was $3.1 million versus $3.2 million for Q2-2024. The decrease in DD&A is primarily due to lower production volumes partially offset by the acquisition of additional working interest in New Mexico and the impact of the capitalized costs associated with the new drilling as part of Empire's Starbuck Drilling Program in North Dakota. Accretion increased slightly due to the new drilling activity and acquisition of working interest in New Mexico. General and administrative expenses, excluding share-based compensation expense, was $2.9 million, or $13.55 per Boe in Q1-2025 versus $2.4 million, or $9.80 per Boe in Q2-2024. The increase in expenses was primarily due to an increase in salaries and benefits associated with an increase in employee headcount. Interest expense for Q2-2025 slightly decreased, compared to Q2-2024, primarily due to certain non-cash interest expense in Q2-2024 from the convertible promissory note partially offset by a higher average outstanding balance on the Company's credit facility. Empire recorded a net loss of $5.1 million in Q2-2025, or ($0.15) per diluted share, versus a Q2-2024 net loss of $4.4 million, or ($0.15) per diluted share. Adjusted EBITDA was ($1.2) million for Q2-2025 compared to Adjusted EBITDA of $1.7 million in Q2-2024. CAPITAL SPENDING, BALANCE SHEET & LIQUIDITY For the six months ended June 30, 2025, Empire invested approximately $3.3 million in total capital expenditures, primarily from finalizing drilling and completions activity related to the Starbuck Drilling Program in North Dakota and continued return-to-production efforts in Texas. As of June 30, 2025, Empire had approximately $2.3 million in cash on hand and approximately $4.0 million available on its credit facility. Empire is scheduled to complete a subscriptions rights offering in August 2025, which is expected to raise approximately $5.0 million of gross proceeds. UPDATED PRESENTATION An updated Company presentation will be posted to the Company's website under the Investor Relations section. ABOUT EMPIRE PETROLEUM Empire Petroleum Corporation is a publicly traded, Tulsa-based oil and gas company with current producing assets in New Mexico, North Dakota, Montana, Texas, and Louisiana. Management is focused on organic growth and targeted acquisitions of proved developed assets with synergies with their existing portfolio of wells. More information about Empire can be found at SAFE HARBOR STATEMENT This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements involve a wide variety of risks and uncertainties, and include, without limitations, statements with respect to the Company's estimates, strategy, and prospects. Such statements are subject to certain risks and uncertainties which are disclosed in the Company's reports filed with the SEC, including its Form 10-K for the fiscal year ended December 31, 2024, and its other filings with the SEC. Readers and investors are cautioned that the Company's actual results may differ materially from those described in the forward-looking statements due to a number of factors, including, but not limited to, future commodity prices, the Company's ability to acquire productive oil and/or gas properties or to successfully drill and complete oil and/or gas wells on such properties, general economic conditions both domestically and abroad, including inflation, tariffs and interest rates, uncertainties associated with legal and regulatory matters, successful completion of the Rights Offering, including future exercise of the warrants issued as part of the Rights Offering, and other risks and uncertainties related to the conduct of business by the Company. Other than as required by applicable securities laws, the Company does not assume a duty to update these forward-looking statements, whether as a result of new information, subsequent events or circumstances, changes in expectations, or otherwise. EMPIRE PETROLEUM CORPORATION Condensed Operating Data (Unaudited) Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, 2025 2025 2024 2025 2024 Net Sales Volumes: Oil (Bbl) 135,854 119,635 160,283 255,489 291,043 Natural gas (Mcf) 237,133 199,868 241,242 437,001 453,063 Natural gas liquids (Bbl) 39,091 31,453 39,612 70,544 74,397 Total (Boe) 214,467 184,400 240,102 398,867 440,951 Average daily equivalent sales (Boe/d) 2,357 2,049 2,638 2,204 2,423 Average Price per Unit: Oil ($/Bbl) $ 58.92 $ 67.28 $ 76.66 $ 62.84 $ 74.66 Natural gas ($/Mcf) $ 0.93 $ 2.74 $ (0.48 ) $ 1.76 $ 0.58 Natural gas liquids ($/Bbl) $ 13.33 $ 12.56 $ 15.58 $ 12.98 $ 13.89 Total ($/Boe) $ 40.78 $ 48.76 $ 53.26 $ 44.47 $ 52.21 Operating Costs and Expenses per Boe: Lease operating expense $ 29.78 $ 31.27 $ 31.42 $ 30.47 $ 33.86 Production and ad valorem taxes $ 3.58 $ 3.86 $ 4.44 $ 3.71 $ 4.31 Depreciation, depletion, amortization and accretion $ 14.50 $ 14.92 $ 13.20 $ 14.70 $ 11.67 General & administrative expense: General & administrative expense (excluding stock-based compensation) $ 13.55 $ 17.34 $ 9.80 $ 15.30 $ 11.87 Stock-based compensation $ 2.27 $ 2.88 $ 2.47 $ 2.55 $ 2.95 Total general & administrative expense $ 15.82 $ 20.22 $ 12.27 $ 17.85 $ 14.82 Expand EMPIRE PETROLEUM CORPORATION Condensed Consolidated Balance Sheets (in thousands, except share data) (Unaudited) June 30, December 31, 2025 2024 ASSETS Current Assets: Cash $ 2,293 $ 2,251 Accounts Receivable 10,167 8,155 Inventory 1,303 1,305 Prepaids 756 640 Total Current Assets 14,519 12,351 Property and Equipment: Oil and Natural Gas Properties, Successful Efforts 144,008 140,675 Less: Accumulated Depletion, Amortization and Impairment (36,583 ) (31,974 ) Total Oil and Gas Properties, Net 107,425 108,701 Other Property and Equipment, Net 1,484 1,391 Total Property and Equipment, Net 108,909 110,092 Other Noncurrent Assets 1,231 1,425 TOTAL ASSETS $ 124,659 $ 123,868 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts Payable $ 11,935 $ 10,452 Accrued Expenses 11,402 10,348 Current Portion of Lease Liability 300 400 Current Portion of Note Payable - Related Party 2,000 - Current Portion of Long-Term Debt 530 70 Total Current Liabilities 26,167 21,270 Long-Term Debt 14,627 11,266 Long-Term Lease Liability 39 144 Asset Retirement Obligations 29,321 28,423 Total Liabilities 70,154 61,103 Stockholders' Equity: Series A Preferred Stock - $0.001 Par Value, 10,000,000 Shares Authorized, 6 and 6 Shares Issued and Outstanding, Respectively - - Common Stock - $0.001 Par Value, 190,000,000 Shares Authorized, 33,756,595 and 33,667,132 Shares Issued and Outstanding, Respectively 93 93 Additional Paid-in-Capital 144,506 143,489 Total Stockholders' Equity 54,505 62,765 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 124,659 $ 123,868 Expand EMPIRE PETROLEUM CORPORATION Condensed Consolidated Statements of Cash Flows (in thousands) (Unaudited) Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, 2025 2025 2024 2025 2024 Cash Flows from Operating Activities: Net Loss $ (5,056 ) $ (4,221 ) $ (4,390 ) (9,277 ) $ (8,364 ) Adjustments to Reconcile Net Loss to Net Cash (Used In) Provided By Operating Activities: Stock-Based Compensation 486 531 592 1,017 1,302 Amortization of Right-of-Use Assets 120 121 136 241 271 Depreciation, Depletion and Amortization 2,576 2,226 2,677 4,802 4,167 Accretion of Asset Retirement Obligations 534 526 492 1,060 977 Loss on Commodity Derivatives - - 1 - 859 Settlement on or Purchases of Derivative Instruments - - (253 ) - (263 ) Loss on Financial Derivatives - - 1,736 - 998 Amortization of Debt Discount on Convertible Notes - - 500 - 500 Gain on Extinguishment of Debt - - (17 ) - (17 ) Gain on Sale of Oil and Natural Gas Properties (175 ) - - (175 ) - Gain on Sale of Other Fixed Assets - (32 ) - (32 ) - Change in Operating Assets and Liabilities: Accounts Receivable (2,291 ) 279 (1,694 ) (2,012 ) (630 ) Inventory, Oil in Tanks 200 (199 ) 346 1 (18 ) Prepaids, Current 331 94 463 425 460 Accounts Payable (355 ) 1,676 (2,484 ) 1,321 1,855 Accrued Expenses 455 599 668 1,054 1,030 Other Long Term Assets and Liabilities 37 13 (574 ) 50 (1,021 ) Net Cash (Used In) Provided By Operating Activities (3,138 ) 1,613 (1,801 ) (1,525 ) 2,106 Cash Flows from Investing Activities: Disposal of Oil and Natural Gas Properties 175 - - 175 - Additions to Oil and Natural Gas Properties (491 ) (2,680 ) (13,202 ) (3,171 ) (30,143 ) Disposal of Other Fixed Assets - 49 - 49 - Purchase of Other Fixed Assets (23 ) (18 ) (89 ) (41 ) (120 ) Cash Paid for Right-of-Use Assets (111 ) (113 ) (125 ) (224 ) (251 ) Net Cash Used In Investing Activities (450 ) (2,762 ) (13,416 ) (3,212 ) (30,514 ) Cash Flows from Financing Activities: Borrowings on Credit Facility 3,000 - - 3,000 3,950 Proceeds from Promissory Note - Related Party 2,000 - - 2,000 5,000 Proceeds from Rights Offering, net of transaction costs - - 20,512 - 20,512 Principal Payments of Debt (200 ) (21 ) (157 ) (221 ) (218 ) Net Proceeds from Warrant Exercise - - 629 - 629 Net Cash Provided By (Used In) Financing Activities 4,800 (21 ) 20,984 4,779 29,873 Net Change in Cash 1,212 (1,170 ) 5,767 42 1,465 Cash - Beginning of Period 1,081 2,251 3,491 2,251 7,793 Expand Empire Petroleum Corporation Non-GAAP Information Certain financial information included in Empire's financial results are not measures of financial performance recognized by accounting principles generally accepted in the United States, or GAAP. These non-GAAP financial measures include 'Adjusted Net Loss', 'EBITDA' and 'Adjusted EBITDA'. These disclosures may not be viewed as a substitute for results determined in accordance with GAAP and are not necessarily comparable to non-GAAP performance measures which may be reported by other companies. Adjusted net loss is presented because the timing and amount of these items cannot be reasonably estimated and affect the comparability of operating results from period to period, and current periods to prior periods. The Company defines adjusted EBITDA as net loss plus net interest expense, DD&A, accretion, amortization of right of use assets, income tax provision (benefit), and other adjustments. Company management believes this presentation is relevant and useful because it helps investors understand Empire's operating performance and makes it easier to compare its results with those of other companies that have different financing, capital and tax structures. Adjusted EBITDA should not be considered in isolation from or as a substitute for net income (loss), as an indication of operating performance or cash flows from operating activities or as a measure of liquidity. In addition, adjusted EBITDA does not represent funds available for discretionary use.
