• Statutory reported loss includes non-cash and non-recurring items
• Term Deposit Shop (TTDS) platform continues to perform well, with further investment planned
• Ausbiz convertible notes sold for $500,000 cash, strengthening balance sheet

ARC Funds Limited (ASX:ARC) has provided a Managing Director's Update for the first half of FY26. The company reported a statutory loss of $1,014,823, which included significant non-cash and non-recurring items such as impairment on investments and share-based payments. Excluding these items, the cash-based loss was in line with the company's operating cash outflow of approximately $600,000, meeting expectations. The Term Deposit Shop (TTDS) investment platform remains the core business of ARC Funds and continues to perform well, with Funds Under Administration exceeding $530 million and the business delivering ongoing profitable operations. The company has acquired an additional 10.99% stake in TTDS, bringing its ownership to 74.48%, and has appointed a seasoned executive to the role of Executive Chairman to accelerate the platform's growth. Further investment into TTDS will focus on enhancing technology, expanding distribution, and increasing client numbers and Funds Under Administration. Additionally, ARC Funds announced the sale of its convertible notes in Ausbiz Pty Ltd for $500,000 cash, which will strengthen the company's balance sheet and provide flexibility to pursue future growth opportunities. The company's strategic investments in Ausbiz Capital (26.35%) and secured debt position in Ausbiz Group Pty Ltd remain intact. ARC Funds has also successfully completed capital raises totaling $1.5 million, providing a strong capital foundation to execute its growth strategy of acquiring and investing in growth-oriented, cash flow positive businesses that enhance its broader investment ecosystem.

ARC Funds remains firmly focused on executing its growth strategy -- acquiring and investing in growth-oriented, cash flow positive businesses that enhance its broader investment in the financial services and products ecosystem. The company remains disciplined, opportunistic, and committed to long-term value creation for shareholders.