Product Launch and Market Strategy - ZUNVEYL was launched on March 19, 2025, targeting nursing homes specializing in Alzheimer's Disease, with a focus on a long-term care commercial team [19]. - The Wholesale Acquisition Cost (WAC) for ZUNVEYL is set at $820 per month, reflecting the company's strategy to balance affordability and access in the $2 billion U.S. Alzheimer's LTC market [33]. - The company has executed agreements with two of the four major national pharmacy benefit managers (PBMs) to secure formulary coverage for ZUNVEYL [31]. - The company plans to develop a detailed commercialization plan for ZUNVEYL in the U.S. and identify distribution partners in Asia, the European Union, and LATAM [48]. - The Company received marketing approval for ZUNVEYL on July 26, 2024, and is assembling a commercialization team for its launch [166]. Market Potential and Patient Demographics - The acetylcholinesterase inhibitor (AChEI) prescription market in the U.S. from the long-term care market represents 36% of over 11 million prescriptions filled annually, indicating significant market potential [25]. - The estimated number of Americans aged 65 and older living with Alzheimer's dementia is 6.7 million in 2023, with a projected increase to 7.2 million by 2025 [50][55]. - Approximately 2.5 million patients have been diagnosed with mild Alzheimer's disease, which is expected to grow over the next decade, highlighting the need for more effective symptomatic drugs [51]. - ZUNVEYL is positioned as a next-generation treatment for Alzheimer's disease, with 88% of long-term care prescribers likely to prescribe it, indicating a 29% preference share [42]. Treatment Discontinuation and Market Opportunity - Approximately 30% of patients discontinue AChEI treatment by month 4, and 55% discontinue within one year, highlighting the opportunity for ZUNVEYL to capture market share [25]. - Current acetylcholinesterase inhibitors have a treatment discontinuation rate of approximately 30% within 4 months and 55% within 12 months due to gastrointestinal side effects [41]. - ZUNVEYL's dual mechanism of action enhances acetylcholine levels and nicotinic receptor sensitivity, potentially reducing gastrointestinal side effects [43]. Research and Development - The company plans to pursue non-dilutive funding sources for ALPHA-1062 for cognitive impairment with mild traumatic brain injury (mTBI) and advance a benzgalantamine sublingual formulation for mild-to-moderate Alzheimer's disease in 2025 [24]. - The Company filed a New Drug Application (NDA) for ALPHA-1062 in Q3 2023, with FDA approval expected on July 26, 2024 [80]. - ALPHA-1062 delayed release oral tablet formulation achieved bioequivalence with galantamine hydrobromide immediate release, with AUC0-inf ratios of 95% in the fasted state and 87% in the fed state [73]. - The Company has completed Phase 1 clinical studies for ALPHA-1062, demonstrating safety and tolerability with no safety signals observed [94][95]. Financial Outlook and Profitability - The company expects to achieve operating profitability by 2027, provided it successfully executes its commercial plan in the long-term care market [26]. - The successful commercialization of the ZUNVEYL oral tablet formulation, the company's only FDA-approved product, is critical for generating revenue and achieving profitability [190]. - The company has incurred significant losses since inception and expects to continue incurring losses for the foreseeable future, impacting its financial stability [190]. Regulatory Environment - The FDA's review process for new drugs typically takes about 10 months from the filing of a standard NDA, with a preliminary review occurring within the first 60 days [127]. - The FDA may grant Orphan Drug Designation (ODD) for drugs intended to treat rare diseases, which can provide exclusivity for seven years upon first approval for the designated condition [132][133]. - The FDA has a fast track designation program to expedite the review of new drug products intended for serious or life-threatening diseases, allowing for rolling review of NDA sections [136]. Competition and Market Risks - The company faces substantial competition from large biotechnology and pharmaceutical companies, academic institutions, and smaller biotech firms, which may impact its market position [174][177]. - The market acceptance of ZUNVEYL and other product candidates is uncertain, which could hinder revenue generation and profitability [204]. - The company may face challenges in expanding its pipeline of product candidates, which is essential for achieving strategic objectives [193]. Supply Chain and Manufacturing - The company has contracted with specialized manufacturing organizations in Taiwan and the U.S. to ensure a reliable supply chain for ZUNVEYL [44]. - The company relies on third-party suppliers for manufacturing, and any disruptions could adversely affect its business operations and financial condition [190]. - Manufacturing drugs involves complex processes, and any difficulties encountered by third-party manufacturers could delay or prevent adequate supply for clinical trials or commercialization [217]. Caregiver Impact and Societal Burden - Caregivers of Alzheimer's patients provide approximately 18 billion hours of unpaid care annually, equating to a financial burden of $339.5 billion [62]. - The caregiver burden for Alzheimer's patients increases significantly, with caregivers providing an average of 64.5 hours of care per week [83]. Intellectual Property and Innovation - The Company has a significant intellectual property portfolio for ALPHA-1062, including patents granted in the U.S. and China, with expiry dates ranging from 2026 to 2042 [101][104]. - The company is developing an improved method for synthesizing benzgalantamine, with pending applications in the United States and China, expected to expire on March 31, 2045 [114].

Financial Performance - The company has a history of operating losses since inception and expects to incur additional near-term losses, with auditors expressing substantial doubt about its ability to continue as a going concern [24]. - Edible Garden experienced net losses of approximately $17.3 million and $11.1 million for the years ended December 31, 2025 and 2024, respectively [92]. - The company expects to continue incurring operating losses in the near term due to ongoing capital and operational expenses related to the development of an RTD beverage manufacturing facility and other growth strategies [92]. - Net loss attributable to common stockholders for 2025 was $33,850,000, an increase from a net loss of $14,924,000 in 2024, reflecting a deterioration of approximately 126.5% [280]. - Total revenue for the year ended December 31, 2025, was $13,857,000, an increase from $12,810,000 in 2024, representing a growth of approximately 8.2% [279]. - Gross profit for 2025 was $2,312,000, compared to a gross loss of $204,000 in 2024, indicating a significant turnaround in profitability [279]. - Cash used in operating activities for 2025 was $11,804,000, compared to $8,516,000 in 2024, indicating a higher cash outflow of approximately 38.5% [287]. - Total liabilities increased to $8,099,000 in 2025 from $7,821,000 in 2024, marking a rise of about 3.6% [276]. - Total stockholders' equity improved to $12,497,000 in 2025 from $4,094,000 in 2024, showing an increase of approximately 205.5% [276]. - Cash reserves decreased from $3,530,000 in December 2024 to $1,114,000 in December 2025, reflecting liquidity challenges [272]. Business Strategy and Operations - The company is transitioning its Edible Garden Prairie Hills facility in Webster City, Iowa, into a dedicated ready-to-drink (RTD) and clean nutrition manufacturing hub, broadening its business into higher-margin, shelf-stable beverage categories [26]. - Phase 1 production at the Webster City facility is anticipated to begin in 2027, subject to final supply agreement execution, completion of engineering and installation, regulatory approvals, and adequate capital availability [31]. - The company acquired a five-acre greenhouse facility in Grand Rapids, Michigan, for $2.9 million, which is expected to contribute positively to gross margin by reducing costs associated with contract growers [34]. - The company completed the purchase of sustainable aquaculture assets for $12.0 million, including innovative patents for environmentally friendly water treatment technologies, enhancing agricultural efficiency and sustainability [36]. - The company currently offers over 140 stock keeping units (SKUs) and expects to further cross-sell products across supermarket partners [38]. - The company sells products at over 5,000 supermarket stores and food distributors across the Northeast, Midwest, and Mid-Atlantic regions, including major retailers like Walmart and Kroger [42]. - The company has entered into agreements with Meijer to supply fresh cut herbs and potted herbs until December 2026, with an estimated $800 thousand investment for in-store fixtures [44]. - The company operates a 5-acre Flagship Facility in Belvidere, New Jersey, and a 5-acre Edible Garden Heartland facility in Grand Rapids, Michigan, which transitioned to growing herb products in 2023, adding a total of 10 acres of controlled growing capacity [59][63]. - The company anticipates investing $1.1 million in capital expenditures to complete the construction of a packhouse at the New Jersey facility, with $410 thousand already spent [61]. - The company plans to develop a ready-to-drink beverage manufacturing platform at its Midwest facility, with phase-one production expected to begin in 2027 [76]. - The company’s growth strategy includes expanding into higher-margin value-added categories such as functional foods and dietary supplements [75]. Customer Concentration and Risks - During the year ended December 31, 2025, approximately 88.2% of the company's revenue was earned from four customers, highlighting a significant customer concentration risk [46]. - In 2025, 88.2% of total revenue was attributed to five customers, with 42.7% from one customer, compared to 82.0% from four customers and 44.0% from one customer in 2024 [102]. - As of December 31, 2025, approximately 73.7% of gross outstanding trade receivables were from five customers, with 38.0% due from one customer, down from 87.5% and 45.6% respectively in 2024 [102]. - The company faces risks related to customer concentration, as the loss of significant customers could materially affect revenue and operations [103]. Sustainability and Environmental Impact - Edible Garden recycled 1,890,000 gallons of water across its facilities, achieving 95% water reuse in Grand Rapids and 75% in Belvidere [85]. - The company reduced food waste by 167.24 metric tons through donations and operational efficiencies, which also decreased the need to source fresh organic produce from other suppliers [85]. - The company avoided 412,537 miles of conventional refrigerated truck miles by co-loading orders and backhauling supplies, contributing to sustainability efforts [83]. - Edible Garden reduced the overall need for pesticide applications by 34% in 2025 [86]. - The company plans to continue innovating in packaging and potting materials to further eliminate plastics and enhance sustainability [81]. Regulatory and Compliance Risks - Compliance with USDA and FDA regulations is critical, as failure to do so could result in bans on production or marketing of products [140]. - The company is subject to uncertainties in supply chain management due to reliance on purchase orders rather than long-term commitments, which could affect product availability and operational results [110]. - The company operates under extensive regulations from federal and state agencies, which could adversely affect operating results if compliance is not maintained [149]. - The company faces potential decreased demand for its products due to public perceptions regarding quality, safety, or health risks associated with food products [145]. Market and Economic Conditions - The grocery industry is characterized by low margins and intense competition, with risks of reduced sales and gross margin dollars due to consolidation and pricing pressures [106][107]. - Economic volatility, inflation, and geopolitical events could adversely affect consumer spending and demand for the company's products, impacting financial results [113]. - Labor shortages and rising operational costs due to inflation could negatively impact financial results if these costs cannot be passed on to customers [119]. - The company faces increased costs and supply chain disruptions due to tariffs and geopolitical events, which could negatively impact financial results [164]. Legal and Financial Risks - The company has received a notice from Nasdaq regarding non-compliance with the Bid Price Rule, which could affect liquidity and capital raising efforts [151]. - If the company fails to maintain compliance with Nasdaq listing requirements, its common stock could be delisted, potentially classifying it as a penny stock [153]. - The company may face significant litigation costs that could adversely affect its financial condition and operational results [165]. - The company is subject to potential product recalls, which could lead to significant unexpected expenses and loss of sales [129]. - Cybersecurity threats pose risks to the company’s information infrastructure, potentially leading to data breaches and operational disruptions [136]. Future Outlook and Funding - The company has plans to raise additional funds to meet its obligations and sustain operations, as indicated in its financial statements [260][267]. - The company may seek additional funding through debt or equity financing to meet liquidity needs [297]. - Future fundraising efforts may lead to dilution of existing shareholders' ownership, negatively impacting the trading price of the common stock [158].

Revenue Performance - Total revenue for the year ended December 31, 2025, was $4,470,875, a significant decrease from $21,115,899 in 2024, resulting in a net loss of $49,350,566 compared to a net loss of $4,165,816 in 2024[225]. - Revenue from home rentals accounted for approximately 52% of total revenue in 2025, while revenue from other activities accounted for approximately 48%; in 2024, home rentals accounted for 14% and other activities for 7%[226]. - Revenue for the year ended December 31, 2025 was $4,470,875, a decrease of 79% from $21,115,899 in 2024, primarily due to lower property sales[258]. - Real estate revenue dropped by 86% from $19,608,184 in 2024 to $2,829,270 in 2025, while revenue from the "Other" segment increased by 9% to $1,641,433[259]. - The company expects revenue from its rental business to continue increasing as more rental houses are acquired[262]. Operating Expenses and Losses - Operating expenses increased by 32% from $12,450,351 in 2024 to $16,399,543 in 2025, largely due to higher executive bonuses and professional fees[267]. - The net loss for the year ended December 31, 2025 was $49,350,566, compared to a net loss of $4,165,816 in 2024[269]. - Operating expenses for 2025 totaled $19,621,458, down from $25,232,975 in 2024, reflecting a reduction of 22.4%[352]. - The company reported a loss on equity method investment of $2,132,825 in 2025, compared to a loss of $3,234,851 in 2024, a decrease of 34.3%[352]. Cash Flow and Assets - Cash decreased from $27,243,787 as of December 31, 2024 to $25,184,990 as of December 31, 2025, while total assets increased to $136,587,114 from $96,761,977[271]. - Net cash used in operating activities was $5,927,532 in 2025, compared to net cash provided of $5,156,047 in 2024, primarily due to purchases of trading securities[277]. - Cash and cash equivalents decreased to $25,184,990 as of December 31, 2025, from $27,243,787 in 2024, a decline of 7.6%[350]. - Total assets increased to $136,587,114 in 2025, up from $96,761,977 in 2024, representing an increase of 41.2%[350]. Investments and Equity - The company has a 36.9% equity interest in American Pacific Financial, Inc., and a 43.6% equity interest in DSS Inc., among other investments, indicating a diversified investment strategy[218]. - The fair value of total held equity stock of DSS, VEII, SHRG, and Impact was $3,696,579 as of December 31, 2025, down from $11,028,405 in 2024[296]. - The Company owns approximately 45.8% of Value Exchange International, Inc. (VEII) after acquiring shares for a total of $2,993,734, including a conversion of $1,300,000 loan into 7,344,632 common shares[284]. - The Company has significant influence over DSS, owning approximately 43.6% of its common stock as of December 31, 2025[292]. - The investment loss in American Pacific Financial, Inc. (APF) was $1,812,898 for the year ended December 31, 2025, compared to a loss of $3,205,094 in 2024[308]. Strategic Changes and Subsidiaries - The company has ceased operations of its subsidiary Alset F&B PLQ in the second quarter of 2024, indicating a strategic shift in its food and beverage segment[247]. - The company has incorporated new subsidiaries in China to engage in the food and beverage business, reflecting its market expansion strategy[250]. - The biohealth segment's subsidiary HWHKOR generated $0 in revenue for the years ended December 31, 2025, and 2024, and was sold to AES Group Inc. for a gain of $384,356[369]. - Hapi Café Inc. commenced operations of two cafés in Singapore and South Korea, aiming to provide a lifestyle dining experience[377]. Compliance and Regulatory Matters - The Company received a notification from Nasdaq on May 13, 2025, regarding non-compliance with the minimum bid price requirement, but regained compliance by July 17, 2025[323][325]. - The Company has significant transactions with related parties, which may not be conducted on an arm's length basis[334]. Impairments and Losses - An impairment charge of approximately $30.1 million was recognized related to the investment in New Energy, reducing its carrying amount to an estimated fair value of $52.7 million as of December 31, 2025[312][313]. - The Company suspended recognition of additional losses from American Medical REIT Inc. (AMRE) as the share of losses exceeded the carrying amount of the investment[307]. - The Company has not recognized impairment losses for certain investments, maintaining them at cost[305].

Financial Performance - Total net revenue for the years ended December 31, 2025 and 2024 was $63.3 million and $57.7 million, respectively, with net product revenue from Journey's commercial portfolio at $61.2 million and $55.1 million [406]. - For the year ended December 31, 2025, net revenue increased to $63.3 million, up 10% from $57.7 million in 2024, driven by a $6.1 million increase in product revenue [444]. - Product revenue from Journey's sales of branded and generic products was $61.2 million, with a notable contribution of $14.7 million from the U.S. commercial launch of Emrosi, despite a $6.5 million decline in Accutane revenue due to market competition [445]. - The net loss attributable to Fortress decreased to $6.8 million in 2025 from a loss of $46.0 million in 2024, marking a substantial improvement [443]. - Other income significantly improved to $36.7 million in 2025 from a loss of $10.2 million in 2024, largely due to a gain from the deconsolidation of a subsidiary [444]. Research and Development - Research and development expenses dropped by 79% to $11.9 million in 2025 from $56.6 million in 2024, reflecting decreased costs across multiple entities, particularly Checkpoint and Journey [449]. - The company expects research and development costs to increase in 2026 with potential new in-licenses or acquisitions [456]. Financing Activities - Fortress entered into a $50.0 million senior secured credit agreement with Oaktree, with a maturity date extended to June 30, 2028, and an interest rate of 11.6% as of December 31, 2025 [496]. - Total cash provided by financing activities increased to $77.4 million in 2025, compared to $70.6 million in 2024 [503]. - Net cash provided by financing activities increased by $6.8 million from $0 in 2024 to $6.8 million in 2025, driven by a $12.0 million increase in proceeds from partner companies' equity offerings and warrant exercises [506]. Product Development and Approvals - The FDA approved ZYCUBO for the treatment of Menkes Disease in pediatric patients, with Fortress eligible to receive up to $128 million in aggregate sales milestones and royalties on net sales ranging from 3% to 12.5% [410]. - Journey launched Emrosi for the treatment of rosacea in March 2025 after FDA approval in November 2024 [406]. - Mustang is exploring a trial for IL13Rα2+ recurrent GBM and high-grade astrocytoma with MB-109, potentially starting in Q2 2026 [420]. Expenses and Cost Management - Total operating expenses decreased by 21% to $133.5 million in 2025 from $168.1 million in 2024, primarily due to a significant reduction in research and development expenses [444]. - Selling, general and administrative expenses rose by 10% to $96.4 million in 2025, compared to $87.7 million in 2024, indicating increased costs associated with marketing and operational support [458]. - Amortization of acquired intangible assets increased by 24% to $4.3 million in 2025, driven by the addition of the Emrosi asset following FDA approval [447]. Stock and Equity Transactions - Journey issued and sold approximately 2.6 million shares of common stock for net proceeds of $16.4 million under its at-the-market offering programs in 2025 [484]. - Mustang closed an equity offering in February 2025, raising approximately $6.9 million in net proceeds from the sale of 495,000 shares and warrants [491]. - Avenue issued 0.9 million shares through the At-the-Market Offering Agreement for net proceeds of $2.1 million during the year ended December 31, 2025 [494]. Cash Flow and Liquidity - Fortress had cash and cash equivalents of $79.4 million as of December 31, 2025, with $35.2 million related to Fortress and private subsidiaries [475]. - The net increase in cash and cash equivalents for the year ended December 31, 2025 was $21,786 thousand, compared to a decrease of $(24,550) thousand in 2024 [507]. - The company incurred $(19,527) thousand in operating activities for Fortress in 2024, which improved to $6,915 thousand in 2025 [507]. Strategic Partnerships and Collaborations - Fortress has executed arrangements with leading institutions and companies, including AstraZeneca and Dana-Farber Cancer Institute, to enhance its product portfolio [401]. - Avenue entered a license agreement with Duke University for ATX-04, a selective β2-adrenergic agonist, focusing on Pompe disease treatment [420]. - Fortress's partner companies are pursuing various biopharmaceutical products, including Journey Medical Corporation and Mustang Bio, Inc. [403].

Financial Viability - The company has received a delisting determination from Nasdaq due to the closing bid price of its common stock being below the $1.00 minimum requirement for 30 consecutive business days [252]. - The company has substantial doubt regarding its ability to continue as a going concern, as existing cash and cash equivalents are insufficient to fund operating expenses and capital expenditures for the next 12 months [257]. - The company expects to need significant additional capital in the future to fund operations, which may lead to dilution for existing shareholders [374]. - The company has approximately $54.4 million of gross federal and $8.5 million of gross state net operating loss carry-forwards as of December 31, 2025 [369]. - Federal net operating losses incurred after December 31, 2017, may be carried forward indefinitely, while those incurred prior to 2018 may be carried forward for twenty years [369]. - The company has approximately $3.5 million of federal research and development credits and $0.4 million of state research and development credits, which will begin to expire in 2040 if not utilized [369]. Product Development and Clinical Trials - The company has never generated revenue from product sales and all potential product candidates are currently in the pre-clinical stage, with no expectation of revenue generation for several years [259]. - The company plans to begin a Phase 1 clinical trial for DCOY-101 potentially in the first half of 2027, contingent on raising sufficient capital [257]. - The company has invested significantly in the identification and preclinical development of potential product candidates targeting diseases such as viral diseases and colon cancer, with revenue generation expected to take many years [292]. - Clinical trials are expensive and can take many years to complete, with the outcome of early trials not necessarily predictive of later success [294]. - The company must demonstrate safety and efficacy to regulatory authorities, with the potential for additional costs and delays if trials do not yield positive results [294]. - The company has not advanced any potential product candidates to clinical trials, which may hinder its ability to commercialize products [317]. - Delays in clinical trial processes, such as patient recruitment and regulatory approvals, could significantly impact the company's ability to commercialize its products [300]. Regulatory and Compliance Risks - The company is subject to a Mandatory Panel Monitor for a period of one year due to non-compliance with the Minimum Bid Price Requirement, which could lead to delisting if not resolved [255]. - The evolving regulatory environment for AI, including the EU's AI Act set to take effect in August 2026, may increase compliance costs and operational burdens for the company [281]. - The company faces unique risks related to its reliance on AI for drug development, including potential regulatory changes and competition from other entities using similar technologies [280]. - The company is subject to various federal and state healthcare fraud and abuse laws, and non-compliance could result in significant penalties and reputational harm [358]. - Changes in regulatory requirements and policies could affect the commercial viability of the company's products and create revenue uncertainty [352]. - Disruptions at regulatory agencies like the FDA could hinder the timely review and approval of new products, negatively impacting the company's business and timelines [348]. Competition and Market Risks - The company faces significant competition from major companies developing vaccines or treatments for targeted diseases, which could adversely affect its market share [314]. - The biotechnology and pharmaceutical industries are intensely competitive, with competitors having greater financial and technical resources, which could negatively impact the company's operating results [336]. - The company's potential product candidates are in preclinical stages and will face competition from existing approved products, affecting its ability to compete successfully [338]. - The commercial success of potential product candidates will depend on various factors, including regulatory approvals, market needs, and effective commercialization strategies [293]. - The company may face significant competition from established companies with extensive marketing and sales operations, which could hinder its ability to generate sufficient product revenue [355]. Intellectual Property and Legal Risks - The company relies on a combination of patents, trade secret protection, and confidentiality agreements to protect its intellectual property, which may not be sufficient [320]. - The company may face challenges in obtaining or maintaining necessary rights to drug compounds and processes through acquisitions and in-licenses [311]. - If third-party intellectual property infringement claims are asserted, it may delay or prevent the company's development and commercialization efforts [325]. - The company may encounter significant problems in protecting and defending its intellectual property both domestically and internationally [323]. - The company may face expensive and time-consuming lawsuits to protect its patents, which could adversely affect its business if patents are invalidated or interpreted narrowly [328]. - The company may need to obtain additional licenses from third parties to advance research or commercialize potential product candidates, which could significantly harm its business if not acquired at reasonable terms [332]. Operational Risks - The company relies on third-party vendors for operational functions, which may delay research and development efforts and increase costs [271]. - The company relies on third-party CROs for clinical trials, which may impact the quality and timeliness of clinical data, potentially delaying regulatory approvals and increasing costs [277]. - Business interruptions from natural disasters could delay research and development efforts, and the company does not carry insurance for such events [371]. - Cybersecurity threats pose risks to the company's proprietary data and technology, which could disrupt operations and harm its business [341]. - The company is highly dependent on key personnel, including its CEO and other executives, and losing any of them could adversely impact its business [357]. Financial and Stock Market Considerations - The company's stock price may fluctuate significantly due to various factors, including market conditions and investor confidence [372]. - The company does not currently intend to pay dividends on its common stock, with any potential return to investors expected only from increases in stock price [377]. - The company is classified as a "smaller reporting company," which allows it to utilize reduced disclosure requirements, potentially making its common stock less attractive to investors [380]. - The company is subject to significant legal, accounting, and compliance costs as a publicly traded entity, which may impact financial performance [385]. - Changes in tax laws, such as the TCJA and the Inflation Reduction Act, could materially affect the company's financial condition and results of operations [389]. - The company has the ability to issue up to 10 million shares of preferred stock, which could adversely affect the rights of common stockholders [383]. - The company is not deemed an "investment company" under the Investment Company Act of 1940, which allows it to continue its business operations as planned [378].

Financial Performance and Risks - The company has incurred significant operating losses since inception and expects to continue incurring losses in the future [19] - The company requires substantial additional funding and may face challenges in raising equity capital or debt financing when needed [19] - The company’s financial results may fluctuate significantly, impacting its ability to forecast customer demand and manage inventory effectively [23] Regulatory and Compliance Issues - The company has received deficiency notices from Nasdaq regarding non-compliance with continued listing requirements, risking delisting if compliance is not regained [17] - The company must comply with extensive government regulations, and failure to do so could result in enforcement actions [28] - The company is substantially dependent on FDA approval for its FemBloc system, with the clinical development process being lengthy and expensive [20] Market Strategy and Operations - The company plans to rely on its own direct sales force in North America and distribution partners outside North America to market its women-specific medical products [28] - The company may need to redesign products and seek new marketing authorization from the FDA, which could impact its market strategy [26] External Risks - The company faces risks related to health epidemics and outbreaks, which could adversely affect its business operations [28] Accounting Standards - The company is an emerging growth company and has elected not to delay adopting new or revised accounting standards under the JOBS Act [32]

Financial Performance - Total revenue for the full year 2025 increased by 10.7% year-over-year to $187.1 million[6] - Net income for the full year 2025 was $2.3 million, compared to a net loss of $4.6 million in 2024[6] - EBITDA for the full year increased to $5.4 million from $1.9 million in the prior year[7] - GAAP diluted EPS for the full year was $0.04, compared to $(0.39) in the prior year[6] - Total revenue for Q4 2025 was $50.512 million, a 13.5% increase from $44.608 million in Q4 2024[19] - Net income for Q4 2025 was $167, compared to a net loss of $1.095 million in Q4 2024[19] - Net income for the twelve months ended December 31, 2025, was $2.308 million, a significant improvement from a net loss of $4.562 million in 2024[19] Assets and Management - Assets Under Management (AuM) grew by 11% year-over-year to $29.9 billion as of December 31, 2025[6] - Total advisory and brokerage assets as of December 31, 2025, grew 11% year-over-year to $29.9 billion[6] Expenses and Cost Management - Total annual operating expenses decreased to $35.2 million from $36.8 million in 2024, reflecting improved cost management[6] - Total expenses for Q4 2025 were $50.748 million, up from $45.178 million in Q4 2024[19] - Employee compensation and benefits for Q4 2025 totaled $4.929 million, compared to $4.556 million in Q4 2024[19] EBITDA Adjustments - Adjusted EBITDA for the full year increased to $6.5 million, compared to $6.3 million in 2024[7] - Adjusted EBITDA for Q4 2025 was $0.8 million, compared to $2.2 million in Q4 2024[22] - Adjusted EBITDA for the twelve months ended December 31, 2025, was $6.5 million, slightly up from $6.3 million in 2024[22] Cash and Debt - Cash and cash equivalents as of December 31, 2025, were $10.7 million, with outstanding long-term debt of $17.7 million[9] Share Information - The weighted average shares outstanding for diluted shares in Q4 2025 was 16,813, compared to 16,593 in Q4 2024[19]

Drug Development and Clinical Trials - The company is in the clinical stage of drug development with no products approved for commercial sale and has not generated any revenue since its inception in June 2009[141]. - The company has conducted Phase 3 pivotal clinical trials for its product candidates, including tarcocimab, KSI-501, and KSI-101, but has not yet demonstrated the ability to successfully overcome risks associated with drug development[143]. - In July 2023, the Phase 3 GLEAM and GLIMMER clinical trials of tarcocimab did not meet their primary efficacy endpoints, leading to a pause in further development pending review of additional clinical data[148]. - The company resumed development of tarcocimab in November 2023 after reviewing Year 1 data from the Phase 3 BEACON study and the Phase 3 GLOW1 study[149]. - The company has never submitted a Biologics License Application (BLA) and may face delays in submission and approval processes, which could impact its ability to commercialize its product candidates[146]. - Preliminary and ongoing data from clinical trials are subject to change and may not be indicative of future results, which poses risks for the company's development strategies[150]. - The company acknowledges that investment in biopharmaceutical product development involves significant risks, including the potential failure to demonstrate adequate efficacy or safety profiles[159]. - Regulatory approval is necessary before the company can market any of its product candidates, and there is no assurance that such approvals will be granted[155]. - The company may need to conduct additional clinical studies to obtain regulatory approval, which could further delay commercialization efforts[158]. - Clinical trials are subject to significant delays and uncertainties, which may impair the ability to generate revenue[160]. - The company’s most advanced product candidate, tarcocimab, did not meet the primary efficacy endpoint in the Phase 2b/3 DAZZLE clinical trial[175]. - Delays in clinical trials could lead to increased costs and jeopardize the ability to commence product sales[164]. - Adverse events observed in clinical trials may halt development or limit regulatory approval, impacting commercial potential[165]. - The company faces challenges in patient enrollment for clinical trials, which could result in significant delays or abandonment of trials[173]. - Regulatory authorities may require additional studies or impose clinical holds, affecting the timeline for product development[162]. - The company’s ABC Platform may not yield viable product candidates, posing risks to future product development[180]. - Changes in manufacturing processes or formulation may necessitate additional studies, further delaying timelines[162]. Market and Competitive Landscape - The company faces significant competition from major pharmaceutical and biotechnology companies, including Roche, Regeneron, and Novartis, which have established therapies for retinal diseases[182]. - Roche's Vabysmo and Regeneron's Eylea HD have gained rapid market share, with Vabysmo approved for wet AMD and DME in January 2022 and RVO in October 2023, while Eylea HD received approval for wet AMD, DME, and DR in August 2023[183]. - The market for the company's product candidates may change, affecting the commercial viability of ongoing development efforts[156]. - Market acceptance of product candidates is uncertain, and factors such as pricing, distribution channels, and competition could hinder commercial success[199]. - The company may face challenges in negotiating reimbursement arrangements and obtaining formulary access, impacting product profitability[200]. - The company faces significant risks related to the acceptance and commercialization of its product candidates, which may not generate substantial revenue if they do not achieve adequate market acceptance[202]. - The company may face competition from biosimilar products sooner than anticipated, which could impact market share and revenue[207]. Regulatory and Compliance Risks - Regulatory approval processes for the company's product candidates are lengthy and unpredictable, potentially delaying market entry and impacting revenue generation[212]. - The company may encounter unfavorable pricing regulations and reimbursement practices that could harm its business and limit the commercial viability of its products[203]. - Reimbursement availability from government and private payors is critical for the company's product candidates, and any limitations could hinder successful commercialization[204]. - The company must comply with extensive ongoing regulatory requirements post-approval, which may result in significant additional expenses[219]. - The company may incur substantial liabilities from product liability lawsuits, which could limit the commercialization of its product candidates[209]. - Delays in obtaining reimbursement for newly approved drugs may occur, and coverage may be more limited than the approved uses of the drugs[206]. - Regulatory approvals for product candidates may come with limitations on marketing and promotion, potentially leading to costly post-marketing testing[221]. - The company may face significant penalties, including fines and withdrawal of regulatory approvals, if it fails to comply with applicable regulatory requirements[228]. - Legislative changes, such as the One Big Beautiful Bill Act, are expected to reduce the number of Americans with health insurance and impact Medicaid spending[230]. - Disruptions at regulatory agencies like the FDA due to funding shortages or government shutdowns could hinder timely product approvals[226]. - The U.S. Supreme Court's Loper Bright decision may increase regulatory uncertainty and legal challenges affecting the company's operations[225]. - Legislative measures aimed at controlling healthcare costs may adversely affect the company's ability to sell products profitably[229]. - The company may face challenges in maintaining regulatory compliance, which is critical for sustaining marketing approvals and profitability[225]. - Future healthcare legislation could impact the drug approval process and the company's overall business strategy[232]. Data Privacy and Cybersecurity - The company is subject to stringent data privacy and security obligations, including U.S. and foreign laws, which could lead to regulatory investigations and significant penalties if not complied with[240]. - The California Consumer Privacy Act (CCPA) imposes specific obligations on businesses regarding personal data, including civil penalties for noncompliance, which could significantly impact the company's operations[242]. - Under the EU GDPR, companies face fines of up to €20 million or 4% of annual global revenue for violations, highlighting the financial risks associated with data processing noncompliance[243]. - The company utilizes generative AI and automated decision-making technologies, which are subject to various privacy laws, potentially increasing compliance costs and regulatory scrutiny[244]. - Data localization laws in Europe restrict the transfer of personal data to the U.S., which could materially impact the company's ability to conduct clinical trials and collaborate with partners[245]. - The U.S. Department of Justice has issued rules that impose additional restrictions on data transactions involving certain countries, which could affect the company's business activities[246]. - The company is contractually bound by industry standards related to data privacy and security, and failure to comply could result in investigations and enforcement actions[248]. - Compliance with evolving data privacy laws requires significant resources, potentially necessitating changes to the company's business model and operations[249]. - The company faces risks from cybersecurity threats, including cyberattacks and data breaches, which could disrupt operations and harm its reputation[319]. - The company’s insurance coverage may not be adequate for cybersecurity liabilities, potentially leading to significant financial repercussions[331]. - The company has implemented security measures to protect against cybersecurity incidents, but there is no assurance these measures will be fully effective[326]. Manufacturing and Supply Chain Risks - The manufacturing of biologics is complex and costly, with significant lead times required, making it more expensive than traditional small molecule drugs[185]. - The company relies on third parties for raw materials, which are sourced from single suppliers in multiple countries, increasing supply chain risks[189]. - The company has limited experience in commercial-scale manufacturing, which could delay clinical trials and regulatory approvals if production issues arise[190]. - The Ursus Facility, built for the production of tarcocimab, may not be fully utilized due to changes in the development plan, potentially leading to additional costs[194]. - The company relies on third-party manufacturers for clinical trial materials and commercialization, which increases risks related to supply availability and cost[259]. - There is a potential for delays in obtaining marketing approvals if third parties do not meet contractual obligations or regulatory requirements[257]. - The company faces risks from reliance on third-party suppliers for key raw materials, which could impact manufacturing capabilities and timelines[265]. - Collaborations with third parties for research and development may not yield expected market potential if not successful[266]. - The company may incur additional costs and delays if current contract manufacturers fail to perform as agreed, as there are no arrangements for redundant supply[263]. - International operations expose the company to economic and regulatory risks, including tariffs and trade restrictions that could increase costs and disrupt supply chains[336]. - The company anticipates that future tariffs may lead to increased research and development expenses and complicate supply chain management[339]. Intellectual Property Risks - Patent protection is critical for the company's product candidates, and failure to secure patents could adversely affect competitive positioning[273]. - The patent prosecution process is complex and costly, which may hinder the ability to maintain necessary patent protections[276]. - The patent protection for the ABC Platform and product candidates is uncertain, with potential challenges to validity and enforceability that could adversely affect competitive positioning[277]. - Patent applications may not result in meaningful protection, and competitors could develop similar technologies, impacting business prospects[278]. - Legal proceedings could challenge patent rights, leading to potential loss of exclusivity and increased costs for the company[279]. - The time required for product development may result in patents expiring before commercialization, limiting intellectual property protection[280]. - Global patent protection is costly and may not be as effective as in the U.S., allowing competitors to exploit technologies in jurisdictions without patent coverage[281]. - Enforcement of intellectual property rights in foreign jurisdictions can be difficult, leading to potential infringement issues and increased costs[282]. - Compulsory licensing laws in some countries may force the company to grant licenses to third parties, impairing competitive position[283]. - Compliance with patent agency requirements is critical; non-compliance could result in loss of patent rights and market entry for competitors[284]. - Changes in U.S. patent laws could increase uncertainties and costs related to patent prosecution and enforcement, impacting the company's patent portfolio[290]. - Failure to obtain patent term extensions could harm the business, as competitors may launch similar products post-expiration of patents[291]. - The company may face claims regarding the wrongful use or disclosure of trade secrets by employees or advisors, which could lead to litigation and substantial costs[295]. - There is a risk that the company may not successfully execute agreements for the assignment of intellectual property rights, potentially leading to adverse effects on business and financial condition[296]. - The competitive landscape in retinal disease treatment is dynamic, with potential litigation related to intellectual property that could delay product development and commercialization[298]. - The company is at risk of infringing on third-party patents, which could impede the commercialization of its ABC Platform and product candidates[300]. - If third parties claim patent infringement, the company may face significant litigation expenses and potential injunctions that could delay product commercialization[304]. Human Resources and Organizational Risks - The company is highly dependent on key personnel, and the loss of any executive or key employee could delay product development and harm business[312]. - Competition for skilled personnel in the biotechnology sector is intense, which may limit the company's ability to hire and retain qualified staff[313]. - The company faces significant challenges in recruiting and retaining quality personnel, which could impact its operational effectiveness[321]. - As of December 31, 2025, the company had 124 employees and plans to significantly increase its workforce to support future growth[316]. - The company relies heavily on independent organizations, advisors, and consultants for critical services, which may impact clinical trials and regulatory approvals if not managed effectively[317]. Business Continuity Risks - Business disruptions from natural disasters or geopolitical events could adversely affect the company's operations and financial condition[333]. - The company’s enterprise resource planning (ERP) system is crucial for maintaining accurate financial records, and any issues with it could negatively impact financial results[335].

Financial Performance - The company generated a net loss of $(7,966,366) for the year ended December 31, 2025, with an accumulated deficit of $(10,260,014) as of the same date[55]. - In 2025, the company experienced a revenue reduction of approximately $835,878 due to a significant customer temporarily suspending orders[76]. - For the year ended December 31, 2025, three customers accounted for approximately 79% of total revenues, with Customer 1 contributing 58%[76]. - The company does not intend to pay dividends for the foreseeable future, focusing on retaining earnings for business expansion[135]. Capital Requirements - The company may need to raise substantial additional capital in the future to execute its business plan and fund product development[59]. - The company may need to raise substantial additional capital in the future to execute its business plan, which could lead to dilution for stockholders[79]. - The business is capital intensive, requiring ongoing cash outlays that may strain available capital and necessitate selling assets or incurring debt[58]. Operational Risks - The company faces risks related to cold chain logistics services, including environmental, health, safety, and quality control issues[64]. - Delays or increased costs in procuring components from third-party manufacturers could adversely affect business operations and financial performance[69]. - The company relies on third-party shipment services, and any delays could harm customer satisfaction and the company's reputation[78]. - The company relies on third-party agents for importation and delivery, and their failure could lead to customer dissatisfaction and liability[96]. - Cybersecurity threats and data breaches pose risks to business operations, potentially leading to significant costs and reputational damage[102]. Competition and Market Position - The company may face significant competition from larger firms with greater resources, which could adversely affect its market position[85]. - The company faces intense competition and must innovate to maintain market share, as failure to introduce new products could lead to revenue decline[106]. - Strategic alliances with global shipping providers like FedEx, DHL, and UPS may not guarantee increased revenues or cash flow[110]. Regulatory and Compliance Issues - The company is subject to regulation by the FDA and similar state agencies, and failure to comply could adversely affect its business and financial condition[94]. - Compliance with various governmental regulations may increase operational costs and limit activities, potentially affecting financial results[96]. - The company is subject to complex laws, including the U.S. Foreign Corrupt Practices Act, which could result in fines and operational restrictions if violated[98]. - Significant changes in regulations could require costly adjustments to solutions and services, impacting marketability and financial condition[97]. Management and Governance - The management team has limited experience managing a public company, which could divert attention from day-to-day operations[82]. - The company is classified as a "controlled company," with Mr. Williams and Dr. Croyle controlling 62% of the voting power, exempting it from certain corporate governance requirements[86]. - The company is classified as an emerging growth company, allowing it to take advantage of reduced reporting requirements[131]. Financial Risks - The company’s liability exposure may exceed current insurance coverage, potentially impacting financial condition and results of operations[72]. - Product liability claims may lead to significant costs, management distraction, and potential loss of revenue[116]. - Changes in trade policy and tariffs could adversely affect business operations and financial results[119]. - The company is exposed to market risks, primarily interest rate risks and inflation risks[200]. - Cash consists of readily available checking accounts and may include short-term money market fund investments, which carry interest rate risk[201]. - Historical fluctuations in interest income have not been significant, indicating limited impact from interest rate risk[201]. - Inflation has generally increased the cost of facilitating business, but it has not had a material effect on the company's results of operations during the reported periods[202]. Sales and Marketing - The company plans to enhance sales, marketing, and distribution capabilities in the Americas, EMEA, and APAC, which will be expensive and time-consuming[70]. - Establishing effective sales and marketing capabilities is crucial for revenue growth, but challenges in this area could hinder expansion efforts[108]. - The company must accurately forecast customer demand to avoid excess inventory or missed revenue opportunities, which could harm operating results[77]. Product and Liability Issues - Product errors or defects could result in reputational damage, increased costs, and potential litigation, particularly in sensitive applications like human reproductive medicine[113]. - The company maintains product liability coverage, but claims exceeding this coverage could materially impact liquidity and financial condition[115]. - Damage to the company's reputation could significantly harm its business and financial condition[118]. Accounting and Tax Considerations - The Tax Cuts and Jobs Act of 2017 reduced the corporate tax rate, impacting future tax benefits of deferred tax assets[124]. - The company may face challenges related to indirect tax audits and potential liabilities from tax authorities[126]. - Changes in accounting principles could result in unfavorable effects on financial statements and stock price[138]. Market Value and Stock Considerations - The market value of the company's stock held by non-affiliates is less than $700 million, qualifying it as a smaller reporting company[134]. - Future sales of substantial amounts of common stock could negatively impact stock price and market perception[136].

Revenue and Profitability - Revenue for the year ended December 31, 2025 was $69,262,124, a decrease of $11,816,740 or 14.6% compared to $81,078,864 for 2024, primarily due to unfavorable contract adjustments related to the Boeing A-10 program[175]. - Revenue from prime government contracts decreased by $4,261,718 or 36.5% to $7,415,434 for 2025, reflecting lower revenue from the T-38 Pacer Classic program[176]. - Revenue from government subcontracts decreased by $9,156,691 or 14.2% to $55,547,679 for 2025, mainly due to the Boeing A-10 program termination[177]. - Revenue from commercial contracts increased by $1,601,669 or 34.1% to $6,299,011 for 2025, driven by new production on Embraer and Collins programs[178]. - Gross profit for 2025 was $10,556,069, a decrease of $6,681,992 or 38.8% from $17,238,061 in 2024, with a gross margin of 15.2% compared to 21.3%[183]. - Net loss for 2025 was $(843,361), a decrease of $4,142,695 or 125.6% compared to a net income of $3,299,334 in 2024, driven by reduced gross margin[189]. Financial Position and Cash Flow - Total assets increased to $75.24 million as of December 31, 2025, from $67.98 million in 2024, representing an increase of approximately 10.5%[250]. - Current liabilities decreased to $23.02 million in 2025 from $26.47 million in 2024, a reduction of about 13.5%[250]. - The company’s cash position decreased to $899,199 in 2025 from $5.49 million in 2024, a decline of approximately 83.7%[250]. - Cash flows from operating activities showed a net cash used of $5,200,025 in 2025 compared to a net cash provided of $3,558,935 in 2024, highlighting a negative shift in operational cash flow[258]. - The company made repayments on its line of credit totaling $17,390,000 in 2025, compared to $2,650,000 in 2024, indicating a substantial increase in debt repayment efforts[258]. Working Capital and Financing - The company may experience liquidity constraints if unable to finance working capital requirements, as significant working capital is needed to support production before receiving customer payments[92]. - The company relies on borrowings under its credit facility to support working capital requirements, and insufficient cash flows may necessitate obtaining additional financing[97]. - The Company entered into a Loan and Security Agreement with Western Alliance Bank on December 12, 2025, providing a revolving line of credit and a term loan, both totaling $10.0 million[165]. - The Company utilized $6,220,722 from the Credit Facilities to fully repay obligations under the previous BankUnited Credit Agreement, terminating it without incurring early termination penalties[166]. - The obligations under the Loan and Security Agreement are secured by a first priority security interest in substantially all of the Company's assets, limiting financing flexibility[141]. Risks and Compliance - Changes in government funding and program priorities can lead to variations in production levels for aerospace and defense programs, adversely affecting revenues[90]. - Contracts with the U.S. Government are subject to audit and oversight, which could lead to unfavorable findings and affect the company's financial condition[98]. - The company faces risks associated with new programs, including design changes and the ability to meet customer specifications, which could materially affect financial results[108]. - Disruptions in the supply chain, including supplier financial difficulties and transportation delays, could adversely affect the company's ability to fulfill contracts[110]. - The funding of U.S. Government programs is subject to congressional budget authorization, which can lead to delays or reductions in appropriations, adversely impacting future sales[99]. - The company faces risks related to subcontractor performance, which could adversely impact contract fulfillment and profitability[111]. Internal Controls and Reporting - Effective internal control over financial reporting is necessary for reliable financial reports; past material weaknesses have been identified[133]. - The Company identified a material weakness in internal control over financial reporting related to ASC-470 – Debt, specifically regarding the classification of debt as short-term due to non-compliance with financial covenants for the Boeing A-10 program[212]. - Management evaluated the effectiveness of internal control over financial reporting and concluded it was effective at the reasonable assurance level as of December 31, 2025[211]. - The Company’s disclosure controls and procedures were deemed effective, providing reasonable assurance that required information is recorded and reported within specified time periods[208]. - There were no changes in internal control over financial reporting during the quarter ended December 31, 2025, that materially affected the controls[219]. Environmental and Regulatory Compliance - The company is subject to strict environmental regulations, which could result in fines and remediation expenses for non-compliance[120]. - The company may face increased scrutiny regarding environmental practices and sustainability initiatives, potentially impacting its reputation and operations[125]. - The company must maintain certain approvals and certifications to manufacture products for aerospace and defense applications; failure to do so could result in loss of business[121]. Tax and NOLs - The company has approximately $68.2 million in federal net operating loss carryforwards (NOLs) as of December 31, 2025, which could reduce future taxable income[136]. - Federal NOLs arising prior to January 1, 2018, totaling about $51.6 million, will expire between 2034 and 2037 if not utilized[137]. - The Company’s ability to utilize NOLs may be limited by ownership changes, which could significantly reduce the value of these tax attributes[138]. Competition and Labor - Intense competition for skilled technicians may increase labor costs, affecting the company's financial condition and operations[112].