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MiniLuxe Holding — Management Reports 2025
Nov 20, 2025
48067_rns_2025-11-19_66e3583a-aeb6-45f6-9884-9809252631d7.pdf
Management Reports
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MINILUXE MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A) IN CONNECTION WITH THE INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE 13 AND 39 WEEKS ENDED SEPTEMPBER 28, 2025
DATED: NOVEMBER 19, 2025
This Management’s Discussion and Analysis ("MD&A") for the thirteen and thirty-nine weeks ended September 28, 2025 provides information on the operating activities, performance and financial position of MiniLuxe Holding Corp. ("MiniLuxe" or the "Company"). This discussion should be read in conjunction with the Company’s corresponding interim unaudited consolidated financial statements for the thirteen and thirty-nine week period ended September 28, 2025 and related notes (the "interim financial statements"), as well as the audited consolidated financial statements for the 52-week period ended December 29, 2024 and related notes (the "Audited Financial Statements"). The financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") and the information contained herein is current to November 19, 2025, unless otherwise stated.
The fiscal year of the Company is a 52-week reporting cycle ending on the Sunday closest to December 31st, which periodically necessitates a fiscal year of 53 weeks. The 52-week fiscal year, which will end on December 28, 2025, is referred to as "fiscal 2025", "FY25" or similar wording while the 52-week fiscal year, which ended on December 29, 2024, is referred to as "fiscal 2024", "FY24" or similar wording. The period of thirteen weeks ended September 28, 2025 is referred to as "Q3 2025", or similar while the thirteen-week period ended September 29, 2024 is referred to as "Q3 2024", or similar.
In this document unless otherwise specified, "we", "us", "our", "Company" and "MiniLuxe" all refer to MiniLuxe Holding Corp. The content of this MD&A has been approved by the Board of Directors, on the recommendation of its Audit Committee. All figures are denominated in U.S. dollars, unless otherwise stated.
Non-IFRS Measures
This MD&A makes reference to certain non-IFRS measures (e.g. Adjusted EBITDA). These measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS, and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of the Company’s results of operations from management’s perspective. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of the Company’s financial information reported under IFRS. For definitions and reconciliations of these non-IFRS measures to the relevant reported measures, please see the “Performance Assessment” and “Selected Consolidated Financial Information” sections of this MD&A.
Forward-Looking Information
Certain statements in this MD&A which are not historical facts constitute forward-looking statements or information within the meaning of applicable securities laws ("forward-looking statements"). Such statements include, but are not limited to, statements regarding MiniLuxe’s projected revenues, gross margins, earnings, growth rates, the success of new products and services, market penetration and product or service plans. The use of terms such as "may", "anticipated", "expected", "projected", "targeting", "estimate", "entend" and similar terms are intended to assist in the identification of these forward-looking statements. Such forward-looking statements are not promises or guarantees of future performance and involve both known and unknown risks and uncertainties that may cause MiniLuxe’s actual results to be materially different from historical results or from any results expressed or implied by such forward-looking statements. Accordingly, there can be no assurance that forward-looking statements will prove to be accurate, and readers are therefore cautioned not to place undue reliance upon any such forward-looking statements.
Factors that could cause results or events to differ materially from current expectations expressed or implied by forward looking statements contained herein include, but are not limited to: MiniLuxe’s history of losses and the risks associated with not achieving or sustaining profitability; risks relating to the competitive industry in which MiniLuxe operates; inability to successfully improve existing products or services and introduce new products or services; inability to anticipate and respond to market trends and changing consumer preferences; inability to expand market awareness of the MiniLuxe brand; damage to the MiniLuxe brand’s reputational value; structural or other post-impacts of COVID-19 or other COVID-like pandemics; failure to receive and/or renew requisite licenses and regulatory approvals; the impact of adverse macro-economic conditions on revenue and profitability; loss of key personnel or an inability to attract and retain new personnel; involvement in product recalls or product liability claims; inability to generate sufficient cash from operations or raise capital on acceptable terms to meet future needs; risks related to acquisitions; changes in tax and trade law; natural disasters, unusual weather, pandemic outbreaks, boycotts and geopolitical events; adoption of new accounting standards or interpretations or changes in accounting standards and management’s underlying accounting standard assumptions, estimates and judgments; and risks related to forward-looking information contained in MiniLuxe’s annual financial statements.
All forward-looking statements are qualified in their entirety by this cautionary statement. MiniLuxe is providing this information as of the current date and does not undertake any obligation to update any forward-looking statements contained herein as a result of new information, future events or otherwise except as may be required by applicable securities laws.
Overview
The Company and Purpose Statement
MiniLuxe is a lifestyle brand and talent empowerment platform servicing the beauty and self-care industry. The Company is a digitally-enabled and socially-responsible brand that owns and operates nail and beauty studio salons delivering high-quality nail care and esthetic services and a suite of trusted proprietary products. The Company holds a strong brand reputation and is an emerging employer-of-choice in the regions it operates for nail designers (“Talent”) who are part of a larger industry group of 500,000+ nail care professionals. In addition to creating long-term durable economic returns for our stakeholders, the Company holds as its core purpose to empower and bring joy to its team members, clients and communities through cleaner, healthier and more ethical self-care services and proprietary better-for-you products. Empowerment for MiniLuxe means economic mobility and career pathing for team members, shared equity participation, safe and well-designed workplaces, clean and hygienic practices, and continuous professional development towards consistent and high-quality client experiences.
Since its founding, the Company has upskilled thousands of diverse workers and estimates having paid out ~$200M in industry-leading fair wages to its team members. Additionally, nail designers and waxing specialists who have been with the Company for more than 5 years (currently ~50% of designer base) receive equity incentive ownership. The annual retention rate of MiniLuxe’s hourly workforce currently stands at 87% year over year. The brand also has a clear esthetic with a clean and modern design sensibility reflected throughout its work and client space. These design choices of clean industry practices, better-for-you product choices and cleaner air work environments represent a competitive advantage in terms of MiniLuxe’s talent engagement, retention and overall loyalty.
Today, MiniLuxe is a trusted lifestyle brand and digitally driven platform offering high-quality self-care and self-expression via its nail care and esthetic services and related proprietary products that have been developed and improved upon over many years with extensive testing and feedback. The Company’s vision is to radically transform a fragmented and under-regulated self-care and nail care industry through its elevated nation-wide (in United States) brand, consistent standards, systems, and protocols (for its products and services), and a technology platform that enables better team and client experiences.
MiniLuxe is headquartered in Boston, Massachusetts and has performed over 4 million services since its inception with studio locations across Massachusetts, Rhode Island, Texas, California, Georgia, and Florida. In Q3 2022, MiniLuxe completed the acquisition of the majority of the assets of Paintbox, LLC and continues to operate it as a sister brand (“Paintbox”) with a nail art focused studio location in New York City, a branded product line (e.g. press
on nails) and proprietary IP nail art designs, alongside a large online social following. Paintbox-trained nail artists perform high-quality nail services featuring sophisticated and modern nail art and the Company offers a premium line of ready-to-wear press-on nails. In addition, in Q3 2024 MiniLuxe acquired a majority stake in a joint venture in Sugarcoat, a leading regional modern nail care brand based in Atlanta, GA, to accelerate its expansion to the region. In Q3 2025 MiniLuxe acquired the majority stake in a joint venture for a new studio location in the Dallas Fort Worth area of Texas.
Business Model: Services, Products and Franchising
MiniLuxe’s business model consists primarily of two revenue streams: Talent service revenue (primarily from the Company’s fleet of studios) and Product revenue (sold through various channels). The company also derives revenues from franchising MiniLuxe branded studios. That revenue is accounted for as part of the Talent service revenue.
Talent revenue is derived from the provision of self-care services including nail care (i.e. manicures and pedicures), waxing, and other esthetic services. The Company principally delivers its services revenue across its own fleet of 24 MiniLuxe / Paintbox / Sugarcoat studios (consisting of 21 MiniLuxe owned and operated studios, 2 MiniLuxe franchise studio, 1 Paintbox shop-in-shop co-location, 1 Sugarcoat studio in Atlanta, Georgia being planned for brand conversion and 1 location in Dallas, Texas also being planned for brand conversion). Since its founding, MiniLuxe has committed to offering elevated services using only fully licensed MiniLuxe certified nail designers who practice consistent quality and hygiene protocols using proprietary MiniLuxe branded products, from better-for-you nail care treatments to high-performance polishes, across all service offerings. Talent service revenue makes up the majority of the Company’s sales, though product revenue is expected to grow rapidly as the Company expands its franchise network and begins to distribute its offerings more broadly through third-party channels.
Product revenue is derived from the sale of the Company’s proprietary and branded lines of self-care products (nail products, cuticle oil, press-on nails, skincare). Channels of distribution for these products are direct-to-consumer (DTC) (Company’s own website and select third-parties) and through wholesale retail partners. Today, excluding such in-store retail sales noted above, the vast majority of MiniLuxe’s product sales come from its own DTC website; MiniLuxe expects further growth in this revenue channel from wholesale and franchising initiatives. MiniLuxe differentiates its product offerings by committing to clean, sustainable, and better-for-you products that have been time- and client-tested across millions of in-studio services performed by certified MiniLuxe and Paintbox designers. MiniLuxe and Paintbox products are also sold in Company owned studios via MiniLuxe team member/product ambassadors.
In April of 2024 MiniLuxe formalized the launch of its franchising plans rooted in a belief that decentralized and hyper-localized entrepreneurship (and ownership) would accelerate performance, innovation and scale. During Q3, MiniLuxe converted a previously company-owned studio location in Tampa, Florida to a franchise location effective as of August 16, 2025. Inclusive of Tampa, since the Company has launched franchising, it has signed up five new franchise locations. In addition, the Company is accelerating M&A opportunities for conversion and focusing (whether through franchising or acquisition) on attracting and developing the very best-in-class operating partners that it can find.
The Company also differentiates itself through the experience and data derived from the delivery of millions of services since its inception and its digitally driven approach with the vast majority of all its services booked through the Company’s website and booking app. Other specific factors of distinction for MiniLuxe’s offerings include:
- Standard-setter for clean and hygienic practices: MiniLuxe studios are distinctively branded with a modern and clean design esthetic and each location is equipped with a “Clean Lab” that utilizes surgical-grade sterilization techniques, including autoclaving, to clean metal tools, while all non-metal tools are disposed of after each service.
- Optimized utilization leveraging platform and data insights: The MiniLuxe, Paintbox and Sugarcoat Talent Ecosystem runs on a fully digitized booking, personalization, and payment platform. This platform is used by all team members enabling transparency, efficiency and data insights that improves the predictability of matching supply (talent side) and demand (client side) utilization.
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- Branded proprietary products: MiniLuxe’s proprietary line of products are used across MiniLuxe services and are formulated in the United States with the best efforts to be better-for-you, sustainable, and ethically sourced.
- Loyalty and engagement of clients and team members: MiniLuxe holds a significant base of recurring and loyal clients, and in any given month, 80% or more of clients are repeat customers. The Company’s nail designers and waxing specialists are compensated with fair and industry-leading wages commensurate with their experience and their value as professionals and are eligible for benefits that include healthcare coverage, 401k, paid time off, and equity ownership opportunities. These factors contribute to a low turnover / high retention rate of team members with more than 50% of associates having 5-year or longer tenure with the Company and an industry-leading retention rate of 87%.
Key Performance Factors
MiniLuxe’s performance and success depend on several factors, each presenting inherent opportunities and risks. Overall, key performance factors for the business include the continued recruitment of talent and focus on consistent and superior studio unit economics (driven by unit revenue volume, margin, and efficient investment in build-out costs). By focusing on well-identified key performance indicators (including peak day staffing, premium nail and waxing services and growth of loyal clients), the Company has delivered consistent studio year of year revenue CAGR of +16% from 2021 – 2024, gross profit CAGR of +10% and adjusted EBITDA CAGR +18% over the same period.
Essential to driving this performance is to maintain focus on continually improving unit-level economics. The Company has been focused on developing consistent systems that enable studio performance and most important a set of increasingly honed KPIs (key performance indicators) that are utilized throughout the field to help drive average unit volume and / or 4-wall contribution. For the last 10 consecutive quarters, studio-level unit economics have improved on an average unit revenue volume and / or contribution basis.
Strategic Trends and Competitive Environment
Consumer Trends
The self-care market has benefited from several positive trends and tailwinds: greater consumer consciousness around self-care, wellness and clean beauty (e.g. growing convergence of self-care, wellness, and beauty), demand for more transparent and ethical practices and Gen Z preferences for more inclusive brands. Other consumer trends include nails becoming more integrated into the culture, beauty, and fashion, and sports industry narrative and nail art and custom press-ons continue to grow. Nail services have also gained more innovation with a broader range of premium services and in Q2 the Company introduced new premium offerings such as “Builder Gel” (i.e a technique that strengthens and lengthens one’s natural nails). A recent Economist article this past October 2025, discussed the recent strong growth in nail care and nail art.
Competition
MiniLuxe operates in the self-care product and service industry and most directly in the “better-for-you” nail care segment of that market. The industry is highly fragmented, with full service high-end day spas on one end and thousands of single unit “mom and pop” salons on the other.
MiniLuxe has been a pioneer in creating an “accessible luxury” nail care studio offering that is more elevated, consistent and predictable compared to a traditional corner nail salon while being much more accessible than a high-end day spa.
Whereas most salons compete on price, MiniLuxe focuses on the Company’s principles of value and consistent quality with clean products, a hygienic environment, ethical and empowering treatment of team associates. For nail designers and waxing specialists, there are differentiated learning and career path advancement opportunities that are far from the norm in the industry. On the product side, the quality of MiniLuxe’s proprietary back-bar supplies and polishes. The Company’s purpose-driven brand and market positioning are similarly differentiating factors.
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Acquisitions
MiniLuxe may pursue acquisitions that represent a strategic fit and are consistent with the Company’s overall growth values and disciplined capital management. The Company has been evaluating the acquisition of other nail care studio operators with the intention of converting them into MiniLuxe studios. MiniLuxe may also consider opportunities to engage in joint ventures or other business collaborations with third parties.
As discussed in the FY24 year-end financial statements, MNLX SC, LLC, the joint venture established to hold the majority-owned investment in Atlanta-based Sugarcoat, has been fully consolidated into MiniLuxe’s current year operations. Further disclosures on the terms of the transaction can be found in FY24 year-end financial statement. Sugarcoat has performed strongly since the partnership, and the Company is evaluating opportunities to expand this relationship through additional units and potential new market partnerships. As announced in company’s press release, on August 14th, MiniLuxe completed an additional acquisition of Bliss Nails in the Dallas Fort-Worth market. This acquisition was structured as a joint venture with experienced local operators to strengthen the Company’s presence in a key growth market. Further information on the transaction can be found in the Q3 period-end financial statements.
Seasonality
MiniLuxe’s business is subject to seasonal variation with peak quarterly revenue typically occurring in the fourth quarter. During FY24, 22% of Talent revenue occurred in Q1, 27% in Q2, 26% in Q3, and 25% in Q4. Within these quarters there is additional seasonal variation based on timings of holidays, school vacation weeks, and other factors; for example, historically certain months (e.g. September) have lighter customer traffic due to “back to school” focus and some vacation timing of designer Talent team members than other quarters in a given year.
Performance Indicators and Financial Definitions
In assessing the performance of MiniLuxe’s business, the Company considers a variety of financial and operating drivers and key performance indicators. Some of the key performance drivers of Talent revenue include: quality of manager within a given studio, staffing levels and staff availability (especially on peak days), utilization of hours and available service stations, revenue per staffed hour, premium nail and waxing services, indirect labor management, and highly repeatable business from loyal clients. On the Product revenue side of the business, key performance drivers include efficient client acquisition costs, lifetime value of clients, and ability to develop and offer hero products. The Company has taken a highly data-driven approach towards gathering, analyzing and sharing across studio team leaders the key performance indicators and relative performance between studios.
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Revenue Recognition
From a revenue recognition standpoint, MiniLuxe’s business model, as mentioned, consists of 1) Talent services revenue generated from nail care and waxing/esthetics, and 2) Product revenue generated from MiniLuxe’s proprietary branded nail and self-care product portfolio via e-commerce DTC offerings and wholesale channels and 3) Franchise revenue which includes franchising fees and royalties. This revenue stream is currently accounted for as part of Studio revenues.
The Company’s services revenue is delivered across its fleet of fully owned-and-operated MiniLuxe, Paintbox, and joint venture Sugarcoat and Lakewood studios as well as selective “off-premises” delivery (e.g., hospitality venues, partner pop-ups, and events). In addition to services, MiniLuxe sells its proprietary branded products through its studios, online, and wholesale partners. Revenue from products sold in studios are included in Talent revenue and reported as part of studio revenues. Revenue from products is recognized at the time of sale. Revenue from royalties paid by franchisees is also recognized as part of total Company revenues. Royalty revenue is recognized at the time it is paid.
The Company recognizes Talent service revenue immediately after a given service is completed or when retail is sold and Product revenue after fulfillment of each order in accordance with IFRS 15. Historically the Company has only received consideration in advance of provided goods and services related to the sale of gift cards and service packages. The Company records unused gift card balances as deferred liabilities then recognizes revenue and reduces the corresponding liabilities as the gift cards are redeemed in exchange for services. The Company does not charge administrative fees on unused gift cards, and gift cards do not have an expiration date. Revenue as reported is inclusive of all discounts and promotions.
Since the opening of the Company’s first franchise location in Brookline MA, the company also reports system wide sales. System wide sales is the combination of Company owned studio revenue and franchisee owned studio revenue to reflect total revenue earned by the MiniLuxe brand.
Cost of Sales
Cost of sales consists of expenses directly involved in the delivery of services and products. Cost of sales associated with the Company’s Talent revenue includes the cost of products used in services and the cost of direct labor, defined as the immediate service providers. Cost of sales associated with MiniLuxe’s Product revenue primarily consists of the cost of purchasing MiniLuxe private label products directly from manufacturers, raw materials, and third-party products purchased at wholesale cost.
Gross Profit
Gross profit reflects MiniLuxe’s revenue less cost of sales. The Company defines gross profit margin as MiniLuxe’s gross profit divided by MiniLuxe’s net revenue.
Operating Expenses
Selling, general and administrative
Selling, general and administrative expenses primarily consist of indirect labor costs (defined as salaries, wages, and benefits for employees whose primary function is not service provision), marketing costs, accounting and legal fees, information technology and systems expenses, other professional services fees, freight and shipping costs, and variable occupancy expenses.
Q3 2025 Business Highlights
Overall Q3 was another successful quarter for MiniLuxe, continuing the momentum from both the prior quarter and YTD. The Company delivered another strong quarter with double-digit system sales, high single digital same store sales and year to date cash contribution improvement of 9%.
FY25 goals focused on continuing to grow the existing base of studios while driving new growth through operating, JV and franchise partners. Consistent with prior MD&A reports, the three key 2025 priorities set out at the beginning of the calendar year:
1) Drive growth through operating partners and franchise partners;
2) Accelerate overall studio-level profitability growth;
3) Increase fixed cost leverage and SG&A efficiency
Drive Growth Through Operating Partners and Franchise Partners
Continued expansion of the Company's Talent revenue base (principally through the studio fleet), which grew by 11% on a system wide sales base (+$.8M) and 7% on a net basis year-over-year to $7.3M, reflecting the success of MiniLuxe's operating model and growing appeal to partners. After three quarters of operation, MiniLuxe's first franchise location grew almost 130% from Q1 2025 to Q3 2025 – demonstrating the consistent power of the brand to attract and capture demand.
Increase Fixed Cost Leverage and SG&A Efficiency
Corporate SG&A in Q3 was approximately at the same level as prior quarter as a percentage of revenue. One time recruitment costs and legal related to M+A and new operating partners increased the run-rate of SG&A relative to where it would be without those growth initiatives. SG&A as a percentage of revenue remained stable and same percentage as prior year.
Financial Results
Q3 2025 MiniLuxe Studios Brand system wide sales delivered $7.6M versus prior year at $6.8M, translating into a year-over-year increase of 11%. Total Q3 2025 YTD system sales grew to $21.6M from $19.4M, a 11% year-over-year increase.
For company owned studios, Q3 2025 revenue increased 7% to $6.6M compared to Q3 2024 revenue of $6.2M. Q3 2025 YTD revenue was $18.9M representing 5% growth over Q3 2024 YTD. Q3 ended with a record-breaking period with P9 achieving revenues over $2.7M, or +9% YoY. The fleet had weekly Designer staffing levels at almost 10,000 hours with premium nail services reaching 17% mix of business.
Gross profit earnings for Q3 2025 was $3.1M, representing a 7% increase from $2.9M in Q3 2024. Q3 2025 YTD delivered total gross profit of $8.8M, a 7% increase over Q3 2024 YTD of $8.2M. The Company views gross profit dollar growth as a key indicator of MiniLuxe's positive trajectory towards long-term profitability and, in conjunction with the reduced cost base, moved materially to a narrowing loss rate. In Q3 2025, the Company's operating loss increased from ($1.3M) versus ($1.2M) in Q3 2024 primarily driven by one time expenses related to Q3 M&A activities.
As part of the Company's revenue and profit expansion strategy, management plans to continue to invest in initiatives that could temporarily reduce topline revenue and gross margin but are designed to accelerate adoption of MiniLuxe's premium service offerings and ultimately shift mix of business to higher margin services. These commercial development initiatives for service offering enhancements and other tests will also ensure we provide the most relevant self-care experience on the market while remaining committed to our mission of clean and empowerment of the designer.
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Beyond premium services, the Company continues to see further opportunities to drive the full potential of its performance metrics on the revenue side (e.g. waxing revenue and in-studio retail). On the cost-side, indirect labor continues to be a focus to further increase studio profitability.
MiniLuxe continues its focus on generating both new demand and new supply of its business as follows: (a) positive momentum on the demand side (new client and loyal client growth) by further enhancing the first-time customer experience and further refining the customer journey from initial visit to MiniLuxe regular client, and (b) further investments and innovations in attracting, developing and retaining supply side talent (Talent ecosystem growth). Other key areas that demonstrate the strengthening brand resiliency and loyal demand for MiniLuxe in-studio service offerings include:
- Impact of loyal client base: MiniLuxe’s loyal client base continues to grow, with over 10,000 studio clients that average 10+ visits per year. Those visiting 20+ times per year, also known as Superfans, are the most loyal customer subsegment and have an average annual spend of more than $2,000. The Company has plans to launch an updated loyalty plan for its clients in 2026.
- Attracting, developing and retaining talent: On the supply side, MiniLuxe’s current and future success comes from the continued growth, development and scaling of the MiniLuxe Talent Ecosystem (i.e. its team of nail designers and waxing specialists in the field). MiniLuxe’s differentiation in attracting, developing and retaining talent comes from providing a safe and empowering workplace environment that offers strong training and workforce development, and highly competitive earnings and earnings potential. Over 50% of MiniLuxe’s field team members have been with the company for more than 5 years, and those team members participate in the company’s equity ownership program. MiniLuxe’s annual retention of its hourly work base has continued its trend of holding over 87% in year over year retention.
- Growing studio economics on a revenue and gross profit base: The combination of a growing, loyal client base and the dedication to continuously improving the quality and staffing of the designer base has contributed to the consistent, same-store year-over-year growth and consistent trailing-twelve month (TTM) quarterly growth. The Company has implemented consistent KPIs (Key Performance Indicators) and systems to allow studio leaders to drive unit economics.
Focus on studio expansion via M&A, JV and Franchise partners
Building on the momentum of its early success with operating partners (via M&A, JV and/or franchising) the management team is already in some advanced discussions with partners based in Boston, New York City, Dallas Fort Worth, and Atlanta for joint venture opportunities, additional franchise locations and existing studio conversions to MiniLuxe studios.
Subsequent Q3 Events and Remaining 2025 Outlook
Expand Operating Partnerships and Acquisition Activity
Subsequent to the closing of Q3, MiniLuxe entered into franchise and joint venture agreements with Coastline Capital. Under the franchise agreement, Coastline Capital has the right to open three MiniLuxe franchise studio’s in the Connecticut area. The joint venture agreement focuses on opening and operating a studio located in Mansfield, Massachusetts. Under the terms of the agreement, MiniLuxe will contribute $357,000 in exchange for a 51% equity interest in the joint venture.
Conversion of Company Owned Location to Franchisee
On August 16, 2025, the Company executed its planned conversion of a previously company-owned studio in Tampa, Florida into a franchised location. This conversion furthers the Company’s partnership with Ms. Peiru Kim, co-owner
and operating partner of its Sugarcoat location in Atlanta and reinforces its strategy to scale with strong local operators. The transaction also strengthens the Company's relationship with Ms. Kim, who will focus on accelerating growth in this underserved studio.
New Company-Owned Location in Massachusetts
The Company is negotiating a new lease for another new studio in the southeastern area of Massachusetts (approximately 35 miles south of Boston) in a rapidly growing suburban area that Management believes is a strong fit with MiniLuxe's target demographic and target area(s) for recruitment of talent.
Non-IFRS Measures
Adjusted EBITDA
Management believes Adjusted EBITDA most accurately reflects the commercial reality of the Company's operations on an ongoing basis by adding back non-cash expenses. Additionally, the rent-related adjustments ensure that studio-related expenses align with revenue generated over the corresponding time periods.
Adjusted EBITDA is calculated by adding back fixed asset depreciation, right-of-use asset amortization under IFRS 16, asset disposal, and share-based compensation expense to IFRS operating income, then deducting straight-line rent expenses net of lease abatements. IFRS operating income is revenue less cost of sales (gross profit), additionally adjusted for general and administrative expenses, and depreciation and amortization expenses.
A reconciliation of IFRS Operating Income (Loss) to Adjusted EBITDA is included below in Selected Consolidated Financial Information.
Selected Consolidated Financial Information
The following tables set forth selected financial information derived from the Company's interim financial statements for the thirteen and twenty-six weeks ended September 28, 2025 and September 29, 2024. The selected financial information was prepared in accordance with IFRS in a manner consistent with the Company's Audited Financial Statements. The following information should be read in conjunction with these statements and the accompanying notes.
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Statement of Comprehensive Income (Loss)
| 13 Weeks Ended | 39 Weeks Ended | |||
|---|---|---|---|---|
| In thousands of U.S. dollars | September 28, 2025 | September 29, 2024 | September 28, 2025 | September 29, 2024 |
| Revenue | $ 7,261 | $ 6,811 | $ 20,873 | $ 19,379 |
| Cost of sales | 4,156 | 3,883 | 12,052 | 11,159 |
| Gross profit | 3,105 | 2,929 | 8,821 | 8,220 |
| General and administrative expense | 3,601 | 3,289 | 10,896 | 9,776 |
| Depreciation and amortization expense | 768 | 888 | 2,377 | 2,995 |
| Operating loss | (1,264) | (1,248) | (4,453) | (4,550) |
| Finance costs | (494) | (446) | (1,466) | (1,216) |
| Other income | 38 | - | 38 | 1 |
| Impairment | (418) | - | (418) | - |
| Unrealized gain (loss) | (33) | 6 | 5 | 78 |
| Debt extinguishment | - | - | (234) | (230) |
| Income (loss) before taxes | (2,171) | (1,688) | (6,529) | (5,917) |
| Income tax expenses | - | - | - | - |
| Net income (loss) | $ (2,171) | $ (1,688) | $ (6,529) | $ (5,917) |
| Net comprehensive income (loss) | $ (2,171) | $ (1,729) | $ (6,574) | $ (5,709) |
| Earnings per share (US$/share): | ||||
| Subordinate voting shares (basic) | (0.01) | (0.01) | (0.04) | (0.04) |
| Proportionate voting shares (basic) | (13.34) | (11.42) | (40.42) | (40.09) |
| Subordinate voting shares (diluted) | (0.01) | (0.01) | (0.04) | (0.04) |
| Proportionate voting shares (diluted) | (12.83) | (11.42) | (38.65) | (40.09) |
Reconciliation of Full Company Adjusted EBITDA to Operating Loss
| In thousands of U.S. dollars | 13 Weeks Ended | 39 Weeks Ended | ||
|---|---|---|---|---|
| September 28, 2025 | September 29, 2024 | September 28, 2025 | September 29, 2024 | |
| Operating Loss | ($1,264) | ($1,248) | ($4,453) | ($4,550) |
| Right-of-Use Asset Amortization Expense | 355 | 266 | 1,060 | 1,005 |
| Fixed Asset Depreciation Expense | 413 | 622 | 1,317 | 1,990 |
| Disposals | (183) | - | (183) | - |
| Stock Compensation Expense | 350 | 124 | 794 | 356 |
| Straight Line Rent | (583) | (695) | (1,926) | (2,071) |
| Full Company Adjusted EBITDA | ($912) | ($931) | ($3,391) | ($3,271) |
| Versus Prior Period ($) | $20 | ($120) | ||
| Versus Prior Period (%) | 2% | -4% |
Balance Sheet
| in thousands of U.S. dollars | As of | |
|---|---|---|
| September 28, 2025 | December 29, 2024 | |
| Current assets | ||
| Cash, cash equivalents and restricted cash | $4,935 | $3,995 |
| Inventory | 1,070 | 870 |
| Prepaid expenses and other current assets | 549 | 601 |
| Total current assets | 6,554 | 5,466 |
| Total non-current assets | 7,085 | 9,569 |
| Total assets | $13,639 | $15,035 |
| Current liabilities | ||
| Accounts payable and accrued liabilities | $2,466 | $2,281 |
| Deferred revenue | 2,474 | 2,894 |
| Current portion of lease liability | 1,484 | 1,271 |
| Derivative Liabilities | 161 | 121 |
| Current portion of contingent consideration | 86 | 86 |
| Total current liabilities | 6,670 | 6,653 |
| Total non-current liabilities | 10,584 | 14,089 |
| Total liabilities | 17,254 | 20,742 |
| Total equity (deficit) | (3,615) | (5,707) |
| Total liabilities and shareholders' equity | $13,639 | $15,035 |
Results of Operations
Revenue
The following table breaks down total revenue by Talent and Product :
| 13 Weeks Ended | 26 Weeks Ended | |||
|---|---|---|---|---|
| September 28, 2025 | September 29, 2024 | September 28, 2025 | September 29, 2024 | |
| in thousands of U.S. dollars | ||||
| Talent | $7,239 | $6,743 | $20,742 | $20,246 |
| Product | 22 | 69 | 131 | (866) |
| Total Revenue | $7,261 | $6,811 | $20,873 | $19,379 |
Revenues for Q3 2025 totaled $7.2 million, up 7% from $6.7 million recognized in Q3 2024. This year-over-year increase was primarily due to continued strength in the growth of Talent services revenue driven by higher levels of staffing and increased volume of customers to MiniLuxe studios.
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Gross Margin
The following table breaks down the calculation of the Company's gross profit as a percentage of total revenue.
| 13 Weeks Ended | 26 Weeks Ended | |||
|---|---|---|---|---|
| September 28, | September 29, | September 28, | September 29, | |
| in thousands of U.S. dollars | 2025 | 2024 | 2025 | 2024 |
| Revenue | $7,261 | $6,811 | $20,873 | $19,379 |
| Cost of Sales | 4,156 | 3,883 | 12,052 | 11,159 |
| Gross Profit ($) | $3,105 | $2,929 | $8,821 | $8,220 |
| Gross Margin (%) | 42.8% | 43.0% | 42.3% | 42.4% |
Gross Profit for Q3 2025 was $3.1 million, up 7% from Q3 2024 driven by increased studio services and expansion in growth channels. Gross margin for Q3 2025 was 42.8%, a slight decrease from Q3 2024's level of 43.0%. The Company targets a long-term, mature studio gross margin of ~45%.
Expenses
The following table provides an analysis of the Company's general and administrative expenses as a percentage of total revenue. This total represents all company General and Administrative expenses, inclusive of HQ and non direct expenses.
General and Administrative Expenses
| 13 Weeks Ended | 26 Weeks Ended | |||
|---|---|---|---|---|
| September 28, | September 29, | September 28, | September 29, | |
| in thousands of U.S. dollars | 2025 | 2024 | 2025 | 2024 |
| General and administrative expense ($) | $3,601 | $3,289 | $10,896 | $9,776 |
| General and administrative expense (% of Revenue) | 49.6% | 48.3% | 52.2% | 50.4% |
Total G&A expense increased $.3 million, or 9%, from Q3 2024 to Q3 2025 and represented general and administrative expense as a percentage of revenue of 49.6%. Management continues to review spending and investment to ensure the Company remains disciplined in its capital outlays.
Operating Expenses
| 13 Weeks Ended | 26 Weeks Ended | |||
|---|---|---|---|---|
| September 28, | September 29, | September 28, | September 29, | |
| in thousands of U.S. dollars | 2025 | 2024 | 2025 | 2024 |
| Operating expense ($) | $4,369 | $4,177 | $13,273 | $12,770 |
Total operating expenses in Q3 2025 were $4.4 million, a $0.2 million increase from $4.2 million in Q3 2024.
Other Items
Finance costs
Finance costs were $0.5 million in Q3 2025, a $0.1 million increase from $0.4 million in Q3 2024. These amounts represent interest expense related to real estate leases as accounted for under IFRS 16 as well as senior debt interest incurred.
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Adjusted EBITDA
Adjusted EBITDA was ($0.9) million in Q3 2025 compared with ($0.9) million in Q3 2024. There was a 20K favorability in 2025.
Cash and cash equivalents
As of September 28, 2025, the Company’s cash and cash equivalents (incl. restricted cash) totaled $4.9 million, an increase of +23% or $0.9 million from December 29, 2024 balance of $4.0 million.
Working capital
Working capital represents the Company’s current assets less its current liabilities. The Company’s working capital was $0.1 million as of September 28, 2025, up from ($1.2) million at December 29, 2024.
| As of | ||
|---|---|---|
| September 28, | September 29, | |
| in thousands of U.S. dollars | 2025 | 2024 |
| Current assets | $6,554 | $5,466 |
| Current liabilities | 6,670 | 6,653 |
| Working capital | ($116) | ($1,187) |
Cash flows by activity:
The following table shows the Company’s cash flows from operating activities, investing activities and financing activities for the periods indicated.
| 26 Weeks Ended | ||
|---|---|---|
| September 28, | September 29, | |
| in thousands of U.S. dollars | 2025 | 2024 |
| Operating activities | (2,352) | ($2,194) |
| Investing activities | (51) | (309) |
| Financing activities | 3,343 | 1,996 |
| Net (outflows)/inflows | 940 | ($507) |
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Cash Flows from Operating Activities
Cash flows from operating activities consist of MiniLuxe’s net loss adjusted for non-cash expenses and for changes in working capital items. Non-cash adjustments generally include depreciation and amortization, share-based payments, write-downs on disposals of property, plant, and equipment, and adjustments in the fair value of assets and liabilities. Working capital adjustments generally include changes in inventories, prepaid expenses, and deferred revenue, and changes to accounts payable.
During Q3 2025, the net cash flow used in operating activities was ($2.4) million, $.2M higher than ($2.2) million used in Q3 2024.
Cash Flows from Investing Activities
Net cash outflows from investing activities result from purchases and disposals of property, plant and equipment and intangible assets to support product development, facilities expansion, and general growth. These include investments in new Fleet and market expansion and development of the MiniLuxe digital platform. Net cash outflows used in investing activities for Q3 2025 were $0.1 million and are attributable to cash payments for fixed assets and real estate leases related to the Company’s current studio base.
Cash Flows from Financing Activities
Net cash flows provided by financing activities through Q3 2025 was $3.3 million, a $1.3 million increase over prior Q3 2024. Driving this increase was $3.6 million in proceeds from shares issued in Private Placement, and additional investment from Flow Capital of $1.556M, partially offset by $1.2 million in lease repayments and $0.6 million in loan payments.
Liquidity, Capital and Cash Resource Requirements and Going Concern Disclosure
Historically, the Company has financed its operations through the sale of equity securities, raising debt, and generating cash through its operating activities.
The Company’s objective in managing its capital is to ensure that it has sufficient liquidity to support its operations and meet its short-term liabilities and commitments as they become due. The Company manages its liquidity risk by monitoring its operating requirements. The Company prepares budget and cash forecast to ensure it has sufficient funds to fulfil obligations. In managing working capital, the Company may limit or control the amount of working capital used for operations or other initiatives and/or pursue additional financing. The Company is not subject to any financial ratio maintenance covenants in its bank borrowings or other outstanding debt obligations.
The Q3 2025 interim financial statements also do not reflect the adjustments that might be necessary to the carrying amount of reported assets, liabilities, revenue, and expenses and the consolidated statement of financial position classification used if the Company was unable to continue operations in accordance with the assumption. Such adjustments could be material.
Disclosure of Outstanding Share Data
In Q3, the Company’s outstanding share data has not changed. Please see Note 10 in the Company’s financial statements.
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Transactions Between Related Parties
The Company made related party payments to key management personnel and advisors. Those payments consisted of salary, benefits, and share-based payments. Total payments made in Q3 2025 were $0.46 million, compared to Q3 2024 payments of $0.25 million.
Off-Balance Sheet Arrangement
During the periods presented, the Company did not have, nor does the Company currently have, any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.
Financial Instruments and Risk Management
The Company’s principal financial liabilities are comprised of accounts payable and accrued expenses, lease liabilities, loans payable, convertible promissory notes, redeemable preferred shares, warrants and contingent consideration. The main purpose of these financial liabilities is to finance the Company's operations.
The Company is exposed to market risk, credit risk and liquidity risk. Risk management is carried out by senior finance executives ('Finance') under policies approved by the Board of Directors ('the Board'). These policies include identification and analysis of the risk exposure of the Company and appropriate procedures, controls and risk limits. Finance identifies, evaluates and responds to financial risks within the Company's operating units. Finance reports to the Board monthly.
Fair Value
The Company’s financial liabilities include accounts payable and accrued expenses, lease liabilities, and loans payable. Accounts payable and accrued expenses, lease liabilities, and loans payable are subsequently measured at amortized cost while the convertible notes payable are measured at fair value.
Market Risk and Foreign Currency risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk. Financial instruments affected by market risk include loans and borrowings.
Credit Risk
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is not materially exposed to credit risk from its operating activities and from its financing activities, since most of its revenue is generated at point-of-sale systems where cash is exchanged, or credit card payments are made. The Company’s cash holdings and deposits are held in an A+ rating financial institution according to Standard & Poor’s.
Liquidity Risk
Liquidity risk is a risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash of another financial asset.
The Company manages liquidity risk by maintaining adequate cash reserves and available borrowing facilities by continuously monitoring actual and forecast cash flows and matching the maturity profiles of financial assets and liabilities.
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Changes in Internal Control over Financial Reporting
There have been no material changes to internal control over financial reporting.
Critical Accounting Policies and Estimates
The preparation of financial statements in accordance with IFRS requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses in the reporting period. The Company regularly evaluates MiniLuxe’s estimates, and assumptions related to revenue recognition, accounts receivable, share-based transaction expense, and warrant liability. The Company bases estimates and assumptions on current facts, historical experience and various other factors that the Company believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of revenues, costs and expenses that are not readily apparent from other sources. The actual results experienced by MiniLuxe may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the Company’s estimates and actual results, MiniLuxe’s future results of operations will be affected. For a description of MiniLuxe’s critical accounting estimates, please refer to Note 3, Accounting policies, in the Company’s Audited Financial Statements for the fiscal year ended December 29, 2024.