Westaim Reports Q2 2025 Results for the Quarter Ended June 30, 2025

Executive Summary

• Westaim Corporation reported unaudited interim financial results for the quarter ended June 30, 2025, recording a net loss attributable to controlling interests of $0.2 million ($0.01 diluted loss per share), a significant improvement from the $17.1 million net loss in Q2 2024.
• The Asset Management segment (Arena) reported $1.2 billion in new AUM and Programmatic Capital during Q2 2025, bringing total AUM to $4.6 billion, driven by a $0.7 billion mandate entered in April and $0.5 billion in incremental mandates.
• The Insurance segment (Ceres Life) secured regulatory approvals in 43 states plus D.C. and received an AM Best Financial Strength Rating of B++, positioning it for a product launch in September 2025 with distribution partner Advisors Excel.

Key Details

• Financial Performance (Q2 2025):
  • Net loss attributable to controlling interests: $0.2 million ($0.01 diluted loss per share).
  • Comparison: Net loss of $17.1 million ($0.80 diluted loss per share) in Q2 2024.
  • Consolidated Total Revenue: $10.5 million.
  • Consolidated Adjusted EBITDA: $(1.2) million.
  • Consolidated Net Profit: $0.5 million.
  • Consolidated Net Loss attributable to controlling interests: $(0.2) million.
• Segment Results (Closing Date through June 30, 2025):
  • Asset Management (Arena):
    • Total Revenue: $7.7 million.
    • Adjusted EBITDA: $(6.3) million (includes $2.4 million reversal of incentive fees and $1.0 million non-recurring professional fees).
    • AUM and Programmatic Capital: $4.6 billion (up from $3.4 billion at Dec 31, 2024).
    • Fee-paying AUM: $2.7 billion (up from $2.4 billion at Dec 31, 2024).
  • Insurance (Ceres Life):
    • Total Revenue: $0.3 million.
    • Adjusted EBITDA: $(10.7) million (includes $3.6 million platform build-out expenses).
    • Net Loss: $(7.6) million.
  • Corporate:
    • Adjusted EBITDA Gain: $15.8 million.
    • Driven by a $29.0 million gain on restructuring of AIGH investment and $3.0 million interest income.
    • Offset by $8.1 million losses on Arena FINCO investments, $4.5 million non-recurring severance expenses, and $1.5 million other operating expenses.
• Strategic Transformation & CC Capital Transaction:
  • Strategic Transaction with CC Capital Partners, LLC closed on April 3, 2025.
  • Company transformed from an investment entity to an operating entity under IFRS.
  • Financial reporting now split into two segments: Asset Management and Insurance.
  • Net impact of Strategic Transaction was a reduction of $1.48 (C$2.08) to book value per fully diluted share.
• Operational Updates & Savings:
  • Severance expenses of $4.5 million identified, expected to produce estimated annualized run-rate savings of approximately $4.0 million.
  • Additional $5.0 million of annualized run-rate savings opportunities identified in Asset Management.
  • Total identified run-rate savings opportunities: $9.0 million per annum.
  • Ceres Life product regulatory approvals secured in 43 states plus District of Columbia.
  • Ceres Life received AM Best Financial Strength Rating of B++.
  • Ceres Life MYGA product launch scheduled for first week of September 2025 with distribution partner Advisors Excel.
• Balance Sheet Metrics:
  • Consolidated shareholders’ equity attributable to controlling interests: $686.4 million.
  • Common shares outstanding: 33,551,508.
  • Book value per fully diluted share: $20.46 (C$27.88) at June 30, 2025 (down from $22.88 (C$32.90) at Dec 31, 2024).
• Corporate Governance:
  • Long-Term Incentive Plan (LTIP) amended to permit awards to persons providing services to Ceres Life.

Notable Quotes

• Cameron MacDonald, President and CEO: “With our new corporate structure and our talented executive leadership team in place, Westaim is moving forward to implement our new strategic direction. As expected, Westaim’s Q2 2025 was populated by substantial accounting activity, with significant one-time expenses and non-cash gains associated with the implementation of the new business strategy.”
• Cameron MacDonald, President and CEO: “Notably, Ceres Life has secured necessary licenses, approvals, and received its AM Best Financial Strength Rating of B++. They will officially launch in the first week in September with their distribution partner, Advisors Excel. We were pleased that Arena reported $1.2 billion in new AUM and Programmatic Capital in Q2... We are confident that the realignment work done to date positions the new Westaim to generate significant long-term value for our stakeholders.”
• Chinh Chu, Executive Chairman: “We are pleased that our strategic transformation is underway with a new, experienced executive leadership team at the helm. As discussed at our Annual General Meeting on June 12, 2025, all of us at CC Capital are fully committed and aligned to build Westaim into a high-quality business that in time will experience significant profitable growth.”