Revenue Performance - Full Year Research & Development Revenue for 2025 was $19.7 million, down from $29.6 million in 2024, reflecting a decrease in reimbursed costs associated with the BARDA PBS Contract[7] - Q4 2025 Revenue was $3.8 million, compared to $7.6 million in Q4 2024, due to a reduction in research direct labor and clinical trial costs[6] - The Company forecasts revenue of approximately $18.5 million for the year ending December 31, 2026, primarily from the continued development of the DeepView System[13] Financial Position - Cash balance improved to $15.4 million as of December 31, 2025, up from $5.2 million at the end of 2024, reflecting successful debt and equity financings[12] - Total current assets increased to $19.5 million as of December 31, 2025, compared to $10.1 million at the end of 2024[20] - Cash at the end of the period rose to $15,394 million, up from $5,157 million at the beginning of the period[24] Net Income and Loss - Net income for Q4 2025 was $0.6 million, or $0.02 per diluted share, a significant improvement from a net loss of $(7.7) million, or $(0.41) per diluted share, in Q4 2024[10] - Net loss for FY 2025 was $(7.6) million, or $(0.29) per diluted share, an improvement from a net loss of $(15.3) million, or $(0.85) per diluted share, in FY 2024[11] - Net loss for the twelve months ended December 31, 2025, was $7,571 million, an improvement from a net loss of $15,315 million for the same period in 2024[24] Expenses and Operational Efficiency - General and administrative expenses decreased to $4.0 million in Q4 2025 from $4.5 million in Q4 2024, reflecting a focus on operational efficiencies[9] - Gross margin for Q4 2025 was 39.8%, down from 44.0% in Q4 2024, primarily due to a lower percentage of reimbursed direct labor[8] Funding and Investments - The Company received $31.7 million in additional funding from BARDA to support the development of the DeepView System, with a total contract value of up to $150.0 million[4] Cash Flow and Working Capital - Net cash used in operating activities increased to $9,920 million from $9,198 million year-over-year[24] - Proceeds from the issuance of common stock and warrants amounted to $10,638 million, compared to $4,060 million in the previous year[24] - Net cash provided by financing activities was $20,120 million, significantly higher than $9,575 million in the prior year[24] Changes in Assets and Liabilities - Accounts receivable increased by $1,238 million, while accounts payable decreased by $1,025 million[24] - Inventory levels decreased by $413 million, while prepaid expenses increased by $761 million[24] - The change in fair value of warrant liabilities resulted in a loss of $3,249 million, compared to a gain of $4,633 million in the previous year[24] - The effect of exchange rate changes on cash resulted in a positive impact of $37 million[24]

Financial Performance - Full Year Research & Development Revenue for 2025 was $19.7 million, down from $29.6 million in 2024, reflecting a decrease in reimbursed costs associated with the BARDA PBS Contract[7] - Q4 2025 Revenue was $3.8 million, compared to $7.6 million in Q4 2024, due to reduced research direct labor and clinical trial costs[6] - Gross margin for Q4 2025 was 39.8%, down from 44.0% in Q4 2024, primarily due to a lower percentage of reimbursed direct labor[8] - Net income for Q4 2025 was $0.6 million, or $0.02 per diluted share, compared to a net loss of $(7.7) million, or $(0.41) per diluted share in Q4 2024[10] - The Company ended FY 2025 with a total stockholders' deficit of $(5.7) million, an improvement from $(7.3) million in FY 2024[20] - Net loss for the twelve months ended December 31, 2025, was $7,571 million, an improvement from a net loss of $15,315 million for the same period in 2024[24] Cash Flow and Funding - Cash balance improved to $15.4 million as of December 31, 2025, up from $5.2 million at the end of 2024[12] - The Company received $31.7 million in additional funding from BARDA to support the development of the DeepView System, with a total contract value of up to $150.0 million[4] - The Company forecasts revenue of approximately $18.5 million for the year ending December 31, 2026, primarily from the continued development of the DeepView System[13] - Net cash used in operating activities increased to $9,920 million from $9,198 million year-over-year[24] - Cash at the end of the period rose to $15,394 million, up from $5,157 million at the beginning of the period[24] - Proceeds from the issuance of common stock and warrants amounted to $10,638 million, compared to $4,060 million in the previous year[24] - Net cash provided by financing activities was $20,120 million, significantly higher than $9,575 million in the prior year[24] Operational Efficiency - General and administrative expenses for FY 2025 were $17.5 million, down from $19.9 million in FY 2024, reflecting a focus on operational efficiencies[9] - Stock-based compensation increased to $1,115 million from $1,032 million year-over-year[24] - Accounts receivable increased by $1,238 million, while inventory decreased by $413 million[24] - Payments for notes payable decreased to $1,529 million from $7,758 million year-over-year[24] Development Projects - The DeepView System is being developed as a predictive diagnostic device aimed at improving treatment decisions in wound care, particularly for burn patients[15] - The change in fair value of warrant liabilities resulted in a loss of $3,249 million, compared to a gain of $4,633 million in the previous year[24] - The effect of exchange rate changes on cash resulted in a positive impact of $37 million[24]

Company Operations - As of December 31, 2025, the Company owned and operated 13 stores totaling 966,567 net leasable square feet and offering 7,044 storage units[23]. - The Company has established a third-party management platform, with its first client having 137,318 leasable square feet and 619 units[39]. - The company operates a total of 13 self-storage properties across several states, including Connecticut, Illinois, Indiana, New York, Ohio, Pennsylvania, South Carolina, and Oklahoma, as of December 31, 2025[161]. - The average occupancy rate for owned and managed stores is 93.9% as of December 31, 2025, compared to 93.4% in 2024[149]. - The company aims to maintain an average occupancy level at or above 90% to maximize rental income[207]. - As of December 31, 2025, the average tenant duration of stay increased to approximately 3.5 years, up from 3.4 years in 2024[213]. Financial Performance - Total revenues increased from $12,530,280 in 2024 to $12,705,245 in 2025, a rise of 1.4% or $174,965[183]. - Rental income rose from $12,024,552 in 2024 to $12,196,698 in 2025, also an increase of 1.4% or $172,146, driven by higher occupancy rates and a revenue rate management program[183]. - Operating income rose by 2.3% to $2,961,351 for the year ended December 31, 2025, driven by increased rental income[188]. - Net income decreased to $2,038,451 or $0.18 per fully diluted share for the year ended December 31, 2025, down from $2,123,743 or $0.19 per share in 2024[191]. - Same-store revenues increased by 1.4% to $12,631,502 for the twelve months ended December 31, 2025, compared to $12,459,719 in 2024[202]. - Same-store net operating income (NOI) increased by 0.6% to $7,767,100 for the twelve months ended December 31, 2025, driven by higher revenues[206]. Acquisition and Growth Strategy - The Company continues to focus on acquiring stores in densely populated areas with high barriers to entry, which helps to maximize financial performance and stockholder value[24]. - The Company has not completed any self-storage property acquisitions in 2025, but continues to review acquisition opportunities[37]. - The company has no acquisitions planned for the year ended December 31, 2025, but continues to review store and portfolio acquisition opportunities[177]. - The company intends to use proceeds from the Second Amended Credit Facility Loan Agreement for acquiring additional self-storage properties and expanding existing ones[174]. Sustainability and Environmental Impact - The Company has a Sustainability Committee that evaluates sustainability risks and reports annually on progress against sustainability goals[50]. - The company is committed to minimizing environmental impact through initiatives such as solar panel installations and energy management systems, aiming to further reduce energy consumption and costs by 2025[51]. - The Sustainability Committee oversees climate-related activities and reports annually to the board of directors, reflecting the company's commitment to responsible environmental stewardship[53]. - Climate change poses transition and physical risks that could increase operating costs and adversely impact properties, with expectations of more frequent weather-related events[80][81]. - New climate-related regulations may result in enhanced disclosure obligations and increased compliance costs, impacting financial performance[82]. Risks and Challenges - Economic conditions, including government shutdowns and market slowdowns, could negatively affect occupancy levels and rental rates, impacting operating results[57]. - The company faces competition in the self-storage market, which may lead to pricing pressures and limit revenue growth in certain markets[65]. - Rental revenues are significantly influenced by demand for self-storage space, with a decrease in demand likely to have a greater adverse effect on revenues due to the lack of diversification in the property portfolio[66]. - The company may encounter challenges in identifying and acquiring suitable self-storage properties, which could impede growth and profitability[68]. - Increases in operating costs, including taxes and regulatory compliance, may adversely impact net income and cash flows[63]. - The company’s performance is subject to risks associated with the real estate industry, including fluctuations in interest rates and competition from other investors[74]. - Negative perceptions of the self-storage industry could result in a decline in the company's stock price[77]. - Compliance with various federal, state, and local laws, including the ADA, may lead to unanticipated expenses that could significantly reduce cash available for distribution to stockholders[78]. - Environmental regulations may impose liabilities for investigating and remediating hazardous substances, potentially affecting the ability to lease or sell properties[79]. - The company may face litigation or claims that could divert management's attention and result in significant expenses[84]. - Uninsured losses or losses exceeding insurance coverage could adversely affect financial condition and cash flow[86]. - Major public health issues, such as pandemics, could disrupt financial condition and operations, with impacts depending on various uncertain factors[92][94]. Financing and Capital Structure - The Company has a financing strategy aimed at minimizing capital costs to maximize returns for stockholders, utilizing various financing alternatives[38]. - The company relies on external financing sources, which may not be available on favorable terms, impacting its ability to acquire properties and meet debt obligations[110]. - The company must maintain its REIT qualification by ensuring at least 75% of gross income is derived from real property-related sources, which involves complex compliance requirements[112]. - Failure to qualify as a REIT could result in significant tax liabilities, reducing available cash flow for distributions to stockholders[114]. - The company may need to borrow funds during unfavorable market conditions to meet REIT distribution requirements, which could adversely affect its financial condition[117]. - The terms of the company's indebtedness include covenants that require maintaining a minimum net worth and liquidity, which could impact operational flexibility[111]. - Disruptions in financial markets could affect the company's ability to obtain debt financing on reasonable terms, impacting acquisition strategies[108]. - To qualify as a REIT, the company must distribute at least 90% of its net taxable income to stockholders each calendar year[119]. - Failure to meet the 90% distribution requirement could result in a 4% non-deductible excise tax on undistributed net taxable income[119]. Shareholder Considerations - The company is structured as a REIT, which currently provides a competitive advantage in property acquisitions, but this may diminish if competitors also convert to a REIT structure[105]. - The board of directors has the authority to issue additional shares without stockholder approval, which could delay or prevent changes in control that may benefit stockholders[106]. - Ownership restrictions limit any individual from owning more than 9.8% of the company's shares, which could discourage takeovers that might offer a premium to stockholders[107]. - Future sales of shares of common stock may depress the market price and dilute stockholders' beneficial ownership[135]. - Any future offerings of debt or preferred equity securities may adversely affect the market price of common stock[136].

Banking Operations and Services - As of December 31, 2025, the Bank maintained 19 full-service branch offices across California, with plans for further expansion based on demand and resources[23] - Approximately 99% of the Bank's loans and 90% of its deposits are generated from the Central Valley, which has a total population of over 5 million[25] - The Bank emphasizes SBA lending services, particularly for minority-owned businesses, within its market area in the California Central Valley and Eastern Sierra[47] - The Bank's consumer loan portfolio includes personal loans, auto loans, and home mortgages, aimed at diversifying its product line[48] - The company offers several types of Certificates of Deposit (CDs) with a maximum maturity of five years, with the majority having a maturity of one to twelve months[50] - The company competes primarily with major banks such as Wells Fargo, Bank of America, and JP Morgan Chase in its service area[60] - The company emphasizes personalized client service to meet the banking needs of consumers, professionals, and businesses in the community[58] Loan Portfolio and Risk Management - As of December 31, 2025, consumer and commercial real estate loans constituted 91% of the Bank's loan portfolio, with 97% being commercial real estate loans[32] - The aggregate loan-to-value ratio of the entire commercial real estate portfolio was 44.9% as of December 31, 2025, indicating strong collateralization[41] - Non-owner occupied commercial real estate comprised 69.9% of the Bank's total commercial real estate commitments, with a loan-to-value ratio of 45.6%[41] - The Bank employs strict underwriting practices to mitigate risks in its loan portfolio, including joint approval systems and external independent credit reviews[46] - Approximately 91% of the company's loan portfolio held for investment as of December 31, 2025, consisted of real estate-related loans[67] - The company maintains an allowance for credit losses, which may prove insufficient if actual losses exceed estimates, potentially impacting financial condition and profitability[158] - Commercial real estate loans involve higher principal amounts and repayment is dependent on factors outside the company's control, increasing credit risk[161] Financial Condition and Capital Management - The Bank's primary capital plus allowance for credit losses totaled $236.0 million as of December 31, 2025, allowing for legal lending limits of $35.4 million for unsecured loans[30] - The company had total deposits of approximately $1.7 billion, representing about 1.9% of the total deposits in its primary service area of approximately $90.8 billion[62] - The company has a borrowing limit of approximately $402 million with the Federal Home Loan Bank (FHLB) as of December 31, 2025[54] - The holding company primarily depends on dividends from the Bank for income, which could be limited if capital raising is restricted[182] - The company may need to seek additional capital in the future, but market conditions could affect availability[183] Regulatory Environment and Compliance - The Company is subject to significant regulation and restrictions by federal and state laws, primarily for the protection of depositors and the stability of the U.S. banking system[80] - The Dodd-Frank Act mandates higher capital and liquidity requirements, including a minimum common equity Tier 1 ratio of 4.5% of risk-weighted assets and a minimum Tier 1 risk-based capital requirement of 6.0%[94] - The Community Reinvestment Act requires banks to meet the credit needs of their communities, with penalties for inadequate service[81] - The Company must adhere to safety and soundness requirements, including operational and management standards[81] - The Company is subject to extensive anti-money laundering regulations, including the USA Patriot Act, which mandates enhanced due diligence for high-risk customers[110] - The company is subject to various consumer protection laws, including the Truth-In-Lending Act and the Equal Credit Opportunity Act, which govern credit disclosures and prohibit discrimination in lending[127][128] - Increased regulatory supervision and compliance costs due to the Dodd-Frank Act are expected to adversely affect the Company's business operations and financial condition[201] Economic and Market Conditions - Economic conditions, including interest rate differentials, significantly influence the company's profitability and are subject to factors beyond its control[70] - A deterioration in economic conditions could lead to increased loan delinquencies and a decline in net interest income, impacting overall profitability[146] - Inflation and higher interest rates have led to a decline in the trading value of government securities, posing risks to the company's financial condition[150] - Recent bank failures have led to significant market volatility and decreased confidence in the U.S. banking system, with potential deposit outflows as customers seek to maximize FDIC insurance[152] - Economic conditions in the primary market areas, particularly in the Central Valley and Eastern Sierras, could adversely affect the company's financial condition and earnings[145] Operational Risks and Challenges - The company faces significant operational risks, including fraud, data processing errors, and technology breaches, which could lead to substantial losses[173] - The effectiveness of the enterprise risk management framework is questioned, with potential for unexpected losses if it fails to adapt to market changes[174] - Liquidity risk is highlighted, with concerns that inability to raise funds could negatively impact financial condition[177] - The company relies on external vendors for essential services, exposing operations to risks if vendors fail to meet contractual obligations[181] - Cybersecurity threats are a significant concern, with potential impacts on customer trust and operational integrity if breaches occur[186] Future Outlook and Strategic Initiatives - The company intends to improve and develop its Internet banking products and delivery channels as resources permit[55] - The company intends to pursue an organic growth strategy and may engage in selected acquisitions, although there are risks associated with managing such growth effectively[141][142] - The company is exploring new lines of business and products, which may involve substantial risks and uncertainties, potentially affecting operating results[168] - The SEC adopted new rules requiring public companies to disclose material impacts of climate-related risks, which may affect the company's reporting obligations[135][136] - Climate change poses risks that could disrupt operations and affect client relationships, necessitating integration of climate risk into management strategies[185]

Financial Performance - The company achieved a consolidated operating profit of Ps. 703,481 million in 2025, reflecting strong economic management despite macroeconomic challenges[30]. - In 2025, revenues amounted to Ps. 705,124 million, a positive increase of Ps. 124,828 million compared to Ps. 580,296 million in 2024[90]. - The company recorded revenues of Ps. 660,573 million in 2025, down from Ps. 732,283 million in 2024, with operating income decreasing to Ps. 216,995 million from Ps. 293,558 million[163]. - Operating income increased to 164,804 million pesos in 2025, compared to 153,506 million pesos in 2024, reflecting a growth of about 7.8%[187]. - The investment in capital expenditures for 2025 was 112,780 million pesos, a significant decrease from 285,617 million pesos in 2024[187]. Revenue Sources - Natural gas transportation revenue reached Ps. 1,720,626 million, an increase from Ps. 1,604,587 million in 2024[18]. - Liquids Production and Commercialization export revenues reached Ps. 292,674 million, accounting for 17% of total revenues[138]. - The company recorded a significant increase in sold ethane, reaching 334,596 tons in 2025, compared to 309,894 tons in 2024[149]. Operational Efficiency - Liquids production levels were 1,095,813 tons, up 44,419 tons from 2024, with operational efficiency ratios of 98.4% and reliability ratios of 98.8%[22]. - The average load factor during winter was 86%, compared to 84% in the previous year, indicating improved operational efficiency[124]. - The average daily natural gas injection to the pipeline system was 86.4 MMm³/d, with a 39% increase in transportation through the GPM compared to 2024[104]. Infrastructure and Capacity Expansion - The expansion of the Perito Moreno Pipeline will increase transportation capacity by 14 MMm³/day, with an investment exceeding US$ 780 million[25]. - The company plans to expand the GPM natural gas transportation capacity by adding 14 MMm³/d up to Salliqueló and an additional 12 MMm³/d in the final sections of the transportation system[82]. - The conditioning capacity at the Tratayén Plant in Vaca Muerta increased to 28.0 MMm³/d in 2025, up from 21.4 MMm³/d in 2024, marking a growth of 30.8%[187]. Strategic Initiatives - The company secured a 20-year extension of its public natural gas transportation license until December 2047, enhancing its operational stability[21]. - The company aims to maintain leadership in energy development in Argentina while driving innovation and consolidating its position in midstream services[36]. - The company continues to explore new project opportunities to enhance the development of Vaca Muerta and drive growth in the energy sector[26]. Market and Economic Context - The CPI in Argentina showed a pronounced deceleration, closing the year around an annual 32%, with monthly rates close to 2%, the lowest level recorded in over three years[42]. - The unemployment rate recorded in the third quarter of 2025 was 6.6%, showing slight improvement compared to previous periods[43]. - The Emerging Markets Bonds Index (EMBI+) improved to around 571 at the end of 2025, indicating better compliance with the fiscal program and the IMF agreement[42]. - The government’s economic program, supported by a USD 20 billion agreement with the IMF, focuses on stabilization and structural reforms, including lifting currency controls and allowing profit distribution to foreign shareholders[42]. Challenges and Losses - The company experienced a loss of Ps. 54,281 million in 2025 due to expenses from the climate event and impairment charges[160]. - The company faced delays in receiving compensation payments amounting to Ps. 10,882 million as of December 31, 2025, related to the propane supply agreement[148]. Technological Advancements - The implementation of remote operations in compressor plants has improved operational safety and efficiency through real-time monitoring[28]. - Telcosur implemented artificial intelligence solutions and remote operation facilities to enhance operational efficiency and service continuity[184]. - The integration of RTK drones technology for digital twins and 3D modeling was introduced, enhancing aerial support capabilities[185]. - Telcosur successfully passed ISO 9001 and 14001 surveillance audits, underscoring its commitment to quality and sustainability[186]. Maintenance and Reliability - The company conducted in-line inspections along 1,200 km of pipelines and direct integrity assessments over 220 km to ensure service reliability[192]. - A total of 35 repairs and 48 pipeline replacements were completed, focusing on minimizing system impact and enhancing integrity[195].

Financial Performance - Net income increased by $10.7 million to $17.7 million, or $1.96 per diluted share, for the year ended December 31, 2025, compared to $7.0 million, or $1.00 per diluted share, for 2024[179]. - Net income for 2025 was $17,703 thousand, significantly up from $6,966 thousand in 2024[190]. - A $5.9 million decrease in merger expenses associated with the Touchstone acquisition contributed to the increase in net income[180]. - Noninterest income was $17,018 thousand for 2025, compared to $16,380 thousand in 2024[188]. - Noninterest income rose to $17.0 million, an increase of $638 thousand or 3.9%, primarily due to a $1.3 million increase in ATM and check card fees[203]. Asset and Liability Management - Total assets increased by $27.7 million to $2.0 billion as of December 31, 2025, driven by a $53.7 million increase in securities available for sale[207]. - Total liabilities increased by $8.0 million to $1.9 billion, attributed to $25.0 million in other borrowings from the Federal Home Loan Bank[208]. - Total shareholders' equity rose by $19.7 million to $186.2 million, primarily due to a $12.0 million increase in retained earnings[209]. - The Company acquired Touchstone Bankshares, Inc. on October 1, 2024, completing the operational merger in the first quarter of 2025[182]. Credit Quality - Provision for credit losses on loans totaled $2.9 million in 2025, down from $7.9 million in 2024[182]. - Nonperforming assets as a percentage of total loans decreased to 0.32% on December 31, 2025, from 0.50% in 2024[182]. - The total allowance for credit losses on loans decreased by $1.7 million, reflecting lower calculated loss rates and inherent risks in the loan portfolio[200]. - The allowance for credit losses on loans was $14.7 million at December 31, 2025, representing 1.02% of total loans, compared to $16.4 million or 1.12% in 2024[220]. - No loans were greater than 90 days past due and still accruing at December 31, 2025, compared to $365 thousand in 2024[219]. Income and Expense Analysis - Net interest income increased by $20.8 million, while noninterest expense rose by $12.5 million, or 24%[180]. - Noninterest expense increased by $12.5 million or 23.6% for the year ended December 31, 2025, largely due to salaries and employee benefits[204]. - The efficiency ratio for 2025 was 68.18%, compared to 66.73% in 2024[187]. - The interest rate spread improved to 3.26% in 2025 from 2.79% in 2024, indicating better profitability on interest-earning assets[1]. Capital Management - The Bank's common equity Tier 1 capital increased to $186.2 million in 2025, up 13.2% from $164.5 million in 2024, resulting in a common equity Tier 1 capital ratio of 12.59%[261]. - Total risk-based capital rose to $201.6 million in 2025, compared to $181.4 million in 2024, with a total capital ratio of 13.64%[261]. - The capital conservation buffer ratio improved to 5.64% in 2025 from 4.34% in 2024, indicating a stronger capital position[261]. - The Bank met all capital adequacy requirements, including the capital conservation buffer, as of December 31, 2025[259]. - The Bank's leverage ratio increased to 9.13% in 2025 from 7.95% in 2024, reflecting improved capital management[261]. Loan and Deposit Trends - Period end loans, net, decreased by $15.2 million in 2025 compared to 2024[182]. - Total loans decreased by $16.9 million to $1.4 billion at December 31, 2025, compared to $1.5 billion at December 31, 2024[213]. - Total deposits remained stable at $1.812 billion in 2025, a slight decrease of $4.2 million from 2024[241]. - Average noninterest-bearing deposits increased to $527.756 million in 2025 from $422.981 million in 2024[242]. Securities and Investments - Securities totaled $326.0 million in 2025, an increase of $48.7 million or 17.6% from $277.3 million in 2024[232]. - The weighted average yield of the total securities portfolio was 2.90% as of December 31, 2025[238]. - The amortization of unrealized loss on transferred securities totaled $957 thousand for the year ended December 31, 2025[234]. Other Financial Commitments - As of December 31, 2025, the Bank had commitments to extend credit totaling $299.1 million, an increase of 10.2% from $271.4 million in 2024[250]. - Standby letters of credit decreased significantly from $15.6 million in 2024 to $3.1 million in 2025, representing an 80.3% decline[250]. - The Company does not expect any counterparty to fail to meet its obligations related to $4.7 million in locked-rate commitments to originate mortgage loans[253]. - The Company did not repurchase any shares during the year ended December 31, 2025[264].

Sales and Store Operations - In Fiscal 2026, the Journeys Group accounted for 61% of net sales, operating 965 stores, including 741 Journeys stores, 194 Journeys Kidz stores, and 30 Little Burgundy stores[27][28] - The Schuh Group represented 21% of net sales in Fiscal 2026, operating 118 stores, and closed a net of six stores during the fiscal year[30] - The Johnston & Murphy Group accounted for 13% of net sales in Fiscal 2026, operating 153 retail shops and factory stores, with footwear making up 52% of retail sales[31][32] - The Genesco Brands Group segment accounted for 5% of net sales in Fiscal 2026, with a new licensing agreement for Wrangler footwear expected to launch in Fall 2026[34][38] - In Fiscal 2026, the company closed a net of 41 Journeys stores, reflecting ongoing adjustments to its retail strategy[29] Workforce and Employment - As of January 31, 2026, the company had approximately 16,000 employees, with 70% part-time and 30% full-time[44] Financial Performance and Operations - The wholesale operations had a backlog of orders amounting to approximately $55.9 million as of February 28, 2026, down from $57.1 million the previous year[39] - The company's business is seasonal, with peaks in working capital investment during spring and fall, and a significant portion of net sales generated in the fourth quarter[66] Strategic Initiatives - The company plans to continue optimizing its store footprint, focusing on productive locations while investing in store remodels and technology[24] - The company aims to mitigate risks related to consumer demand and economic factors, emphasizing its ability to quickly adapt to changing fashion trends[26] Sustainability and Corporate Responsibility - The company is committed to sustainability initiatives and has issued its second corporate responsibility report in Fiscal 2026[41][42] - The company updated its comprehensive human rights policy in 2025, emphasizing respect for human rights and integrity in relationships with employees and partners[56] - The company engages in community outreach initiatives, supporting underserved communities through various programs[63] Governance and Compliance - The board of directors is composed of 67% diverse members as of January 31, 2026, reflecting the company's commitment to diverse perspectives[65] - The company has established a corporate governance framework, including risk management and ethics compliance programs, with annual updates to the board[64] - The company is involved in environmental proceedings related to former manufacturing operations, addressing compliance with federal and state regulations[68] Cybersecurity and Data Protection - The company has made significant investments in information security, including hardware-based end-to-end encryption and tokenization to protect customer data[59] - Compliance with privacy regulations such as GDPR and CCPA is a priority, with processes in place for responding to data access requests[61][62] - The company has implemented multi-factor authentication and next-generation firewalls to enhance cybersecurity measures[60] Reporting and Transparency - The company files reports with the SEC, including Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, available on its website[76]

Revenue and Growth - Revenue for the year ended December 31, 2025, totaled $7.1 million, representing an increase of $1.3 million or 22.9% from $5.8 million in 2024[112] - Consulting revenues totaled $5.3 million in 2025 compared to $4.2 million in 2024, while Shield revenues totaled $1.8 million, compared to $1.6 million in 2024[112] - Revenues from U.S. government entities totaled $6.7 million, or 94.6% of total revenues, for the year ended December 31, 2025, compared to $4.8 million, or 83.8% in 2024[115] - The company anticipates future growth from the sale of its OT Defender solution to other U.S. government departments and commercial markets[113] Profitability and Expenses - Gross profit for the year ended December 31, 2025, was $5.4 million, with a gross profit margin of 75.8%, remaining relatively flat year-over-year[119] - Operating expenses for the year ended December 31, 2025, totaled $14.5 million, an increase of 13.0% compared to $12.9 million in 2024[120] Cash Flow and Financing - Net cash used in operating activities for the year ended December 31, 2025, was $6.8 million, due to a net loss of $9.1 million[128] - Net cash provided by financing activities for the year ended December 31, 2025, was $8.1 million, primarily from a registered direct offering of $7.0 million[132] - As of December 31, 2025, the company had cash and cash equivalents of $3.6 million and $2.4 million in working capital[135] - The company has entered into a new ATM Offering Agreement to potentially sell up to $50.0 million of its common stock[137] Stock Transactions and Debt - In 2024, Streeterville purchased 1.2 million shares of common stock, resulting in aggregate net proceeds of $1.8 million, with $0.1 million received in 2024 and $1.7 million in January 2025[141] - Principal payments on the Streeterville notes totaled $1.9 million through 2023, with $0.8 million of principal exchanged for 146 thousand shares of common stock in Q4 2023 and Q1 2024[143] - In March 2025, the remaining $0.5 million Streeterville note was fully retired through the issuance of 553 thousand shares of common stock, eliminating all Streeterville debt with no material cash outflow during 2024 or 2025[143] - A note purchase agreement in September 2024 involved Streeterville purchasing a note payable of $0.6 million for $0.5 million in cash, with weekly payments of $25 thousand until maturity in November 2024[144] - In January 2024, Mr. Scott purchased a note payable of $1.1 million for $1.0 million in cash, with weekly payments of $40 thousand until maturity in June 2024[145] Revenue Recognition and Estimates - Revenue from consulting services is recognized monthly as services are rendered, with most sales derived from these services[151] - The company began offering its newest product, INTRUSION Shield, on a subscription basis, with revenue recognized monthly over the contract term[154] - Allowances for credit losses are maintained for estimated losses from customer payment defaults, with historical estimates not differing materially from actual results[159] - The estimated fair value of accounts receivable, accounts payable, and accrued expenses approximates their carrying amounts due to their short maturity[160]

Regulatory Approvals and Compliance - Nexalin's Gen-1 device is classified as a Class II device by the FDA for treating anxiety and insomnia, requiring a new 510(k) application for marketing approval[33]. - The FDA accepted a Q-Submission for the Gen-2 SYNC system targeting Alzheimer's disease and dementia, marking a significant step towards clinical studies[42]. - A new pre-submission document for the Gen-3 HALO headset was filed with the FDA in January 2023, with formal comments received in March 2023[43]. - The Gen-2 device has received regulatory approval in China for treating insomnia and depression, with plans for a joint venture to market these devices in the region[52][58]. - The FDA's 510(k) review process typically takes three to six months but can extend longer, impacting the timeline for product launches[66]. - The PMA process requires extensive data from preclinical studies and human clinical trials, which can take several years for approval[68]. - The NMPA in China requires mandatory registration for medical devices, with local testing and clinical trials generally required for Class II and Class III devices[72]. - The FDA reclassification in December 2019 changed the classification of devices for anxiety and insomnia from Class III to Class II, requiring new trials and applications[156]. - The regulatory approval process for the company's products is expensive, time-consuming, and uncertain, potentially delaying commercialization[222]. - Regulatory authorities have substantial discretion in the approval process, which could lead to delays or rejection of product applications[223]. Product Development and Technology - The Gen-2 SYNC and Gen-3 HALO devices utilize a new 15 milliamp waveform, which is expected to penetrate deeper into the brain and enhance patient response without side effects[39]. - Nexalin's proprietary waveform technology allows for a more than 400% increase in power from <4 mAmps to 15 mAmps, improving treatment efficacy[46]. - The company has completed numerous prototypes of a Nexalin headset utilizing the new 15 milliamp waveform, with clinical testing already begun[69]. - The company has developed second- and third-generation versions of its medical device, but these have not yet received FDA approval for marketing in the U.S.[146]. - The company’s Gen-2 and Gen-3 devices are currently in the prototype stage of manufacturing and testing[222]. Market Opportunities and Challenges - The insomnia market is responsible for at least $63 billion in direct and indirect healthcare costs each year, indicating a significant opportunity for non-pharmaceutical treatments[86]. - Depression is the leading cause of medical disability globally, with only one-third of people with severe depression having taken anti-depressants, highlighting a demand for alternative therapies[87]. - The company believes that a decline in the depression medication market will accelerate the growth of the neurostimulator market[88]. - The global chronic pain treatment market is projected to reach $173 billion by 2033, growing at a CAGR of 7%[93]. - The global Alzheimer's therapeutics market is expected to grow from $2.2 billion in 2020 to $13.7 billion by 2030, with a CAGR of 20%[96]. - The substance use disorders cost the United States over $740 billion annually in healthcare, crime, and lost productivity[90]. - Approximately 48.4 million individuals aged 12 or older in the U.S. experienced a substance use disorder[90]. Financial Performance and Projections - For the years ended December 31, 2025 and 2024, the company incurred net losses of approximately $8,222,000 and $7,607,000, respectively[139]. - The accumulated deficit as of December 31, 2025 and 2024 was approximately $92,867,000 and $84,645,000, respectively[139]. - The company expects to continue incurring significant expenses and operating losses over the next several years due to ongoing product development and regulatory approvals[140]. - The company incurred a net loss of approximately $8,222,000 for the year ended December 31, 2025, and is currently not cash flow positive[149]. - The company has only raised losses since its inception, raising substantial doubt about its ability to continue as a going concern[144]. - The company expects significant fluctuations in its financial condition and operating results from quarter to quarter and year to year[148]. - The company may require additional funding to meet financial needs and pursue business objectives, with no assurance of raising sufficient capital[149]. Competition and Market Risks - The company faces competition from other companies with greater resources and capabilities, which may hinder its market success[167]. - The company anticipates that competition in its industry will increase due to rapid technological changes and new product introductions[170]. - The company may not achieve market acceptance for its products even if they receive regulatory approval, which would adversely affect its business prospects[166]. - The company is exposed to anti-monopoly concerns under the PRC's Anti-Monopoly Law, particularly if market share thresholds are met[199]. Intellectual Property and Legal Risks - The company relies on patent protection for its technologies, and failure to maintain this protection could allow competitors to erode its market position[201]. - The patent application process is expensive and time-consuming, and there is no guarantee that all necessary patents will be obtained[202]. - Changes in patent laws or their interpretation could diminish the value of the company's patents and limit competitive advantages[203]. - The company may face challenges in patent rights that could reduce the scope or validity of its protections, impacting its ability to commercialize products[206]. - The company may incur significant costs in enforcing its patent rights in foreign jurisdictions, which could divert focus from other business aspects[220]. - There is a risk that the company may not prevail in intellectual property litigation, which could significantly harm its business and competitive position[211]. Operational and Management Risks - The company maintains alternate suppliers to mitigate supply chain risks in the manufacturing of its neurostimulation devices[116]. - The company is increasingly dependent on information technology systems, making it vulnerable to data security incidents that could harm its business[178]. - The company faces intense competition for hiring qualified personnel, which is critical for its success in research, development, and commercialization[175]. - The company may encounter difficulties in managing growth as it expands its development and regulatory capabilities, potentially disrupting operations[176]. - The company is exposed to risks of employee fraud and misconduct, which could lead to significant penalties and reputational harm[228]. Healthcare Regulations and Compliance - Current and future relationships with healthcare professionals may be constrained by anti-kickback and fraud laws, impacting business arrangements[230]. - The federal Anti-Kickback Statute prohibits remuneration to induce referrals for services covered by federal healthcare programs, which could affect sales strategies[230]. - The company may face civil and criminal penalties under the federal False Claims Act for presenting false claims to government healthcare programs[230]. - The Health Insurance Portability and Accountability Act (HIPAA) imposes obligations on the company regarding the privacy and security of health information[230]. - The Affordable Care Act (ACA) amended the intent requirement of the federal Anti-Kickback Statute, making compliance more complex[231].

Financial Performance and Projections - Enlivex reported a gross proceeds of $212 million from a private placement completed on November 24, 2025[34]. - The company recognized net income attributable to an unrealized, non-cash gain from increases in the fair value of digital cryptocurrency assets held in its treasury for the year ended December 31, 2025[35]. - The company has not generated any revenue from its product candidate Allocetra and may never achieve profitability[24]. - Enlivex's ability to continue operations as a going concern is dependent on obtaining additional financial support due to recurring operating losses[24]. - The company has incurred operating losses since its inception in 2005, with retained earnings of approximately $1.1 billion as of December 31, 2025[38]. - The company anticipates incurring substantial additional capital requirements to support its clinical operations and product development[42]. - The company expects to maintain its planned operations through the end of 2027, but will require significant additional funds to initiate and complete the FDA and EMA approval processes[45]. - The company has no committed external sources of funds, and additional financing may not be available on favorable terms[45]. - The company may incur substantial costs in pursuing future financing, which could adversely impact its financial condition[47]. Clinical Development and Regulatory Challenges - Enlivex operates a dual strategy combining clinical development in quality longevity therapeutics with a treasury model based on decentralized prediction markets through the RAIN protocol[12]. - The company is focused on the treatment of osteoarthritis with its product candidate Allocetra, which aims to restore macrophage homeostasis[13]. - The commercialization of Allocetra™ is uncertain, and the company has focused substantially all efforts on its development[59]. - The company has not yet obtained regulatory clearance to conduct confirmatory clinical trials necessary for filing a biologics license application (BLA) with the FDA[60]. - Marketing approval procedures vary significantly among countries, potentially leading to substantial delays in commercialization due to pricing and reimbursement approvals[61]. - Clinical trial results may not replicate earlier successes, which could lead to abandonment of product candidates and significantly impair revenue generation[64]. - The clinical trial process is complex and expensive, with potential delays caused by regulatory clearance issues, patient recruitment challenges, and safety concerns[66]. - Phase III clinical trials frequently yield unsatisfactory results, which may require additional studies and delay approval processes by several years[71]. - The company must comply with stringent regulations during the manufacturing of Allocetra™, including adherence to current Good Manufacturing Practices (cGMP)[76]. - Regulatory authorities require manufacturers to register and inspect facilities, and any non-compliance could delay clinical research and product development[80]. Market and Competitive Landscape - The company faces risks related to geopolitical tensions and economic instability, which may adversely affect its business and financial condition[56]. - The commercial success of Allocetra™ will depend on broad market acceptance, which is influenced by clinical safety, efficacy, and the presence of competitive products[94]. - The company may face significant competition from larger pharmaceutical companies with more resources and experience in the development and commercialization of drugs[115]. - If reimbursement for future products is limited, the company may struggle to profitably sell its products, affecting market acceptance and sales[109]. - The healthcare industry is facing increased limitations on reimbursement, which could adversely affect third-party coverage of the company's products[106]. Intellectual Property and Legal Risks - The biotechnology industry is characterized by significant litigation regarding patents and intellectual property rights, which can materially affect competitive advantage and business operations[149]. - The company may face challenges in maintaining patents and intellectual property, which could impact its competitive position[141][142]. - The company may face challenges from third parties asserting intellectual property rights, which could delay product development and commercialization efforts[158]. - There is uncertainty regarding the scope and strength of patent protection for product candidates, which could limit revenue opportunities[151]. - Changes in patent law could diminish the value of patents, affecting the company's ability to protect its products[156]. Cybersecurity and Operational Risks - Cybersecurity risks pose a significant threat to the company's proprietary information, with potential disruptions to operations and reputation[118]. - The costs associated with mitigating cybersecurity risks are expected to increase, including compliance and administrative costs[121]. - Security breaches or cyberattacks could result in a partial or total loss of cryptocurrency holdings, adversely affecting financial conditions[197]. - The availability and solvency of third-party custodians pose risks of illiquidity and asset loss, impacting the Treasury Reserve Policy[202]. - The company faces counterparty risks due to potential non-performance by custodians and other service providers[204]. Cryptocurrency and Treasury Management - The company has established a digital asset treasury through the purchase of RAIN, which is subject to high volatility and could significantly impact financial results[169]. - Cryptocurrency holdings are less liquid than cash and cash equivalents, potentially impacting the company's liquidity during market instability[171]. - Regulatory developments regarding Cryptocurrency could adversely affect the company's financial condition and results of operations[172]. - If Cryptocurrencies are classified as securities, the company may face extensive regulatory requirements, impacting operations and costs[176]. - The expected concentration of Cryptocurrency holdings increases risks associated with the Treasury Reserve Policy, limiting diversification[186]. - Regulatory changes could require the company to register as a money services business, leading to significant compliance costs[188]. - The classification of Cryptocurrencies as commodities could subject the company to additional CFTC regulations, resulting in operational disruptions[190]. - The emergence of alternative digital assets could negatively impact the market price of the company's Cryptocurrency[183]. - A decrease in the fair value of Cryptocurrency holdings could lead to significant volatility in reported earnings, adversely affecting share prices[184]. - The company may incur losses if forced to sell Cryptocurrency at unattractive prices to meet working capital requirements[171].