Revenue and Sales Performance - In 2025, sales to TI Group Automotive Systems, LLC accounted for approximately 19% of the Company's consolidated revenues, while sales to Martinrea International Inc. and Cooper-Standard Holdings Inc. accounted for approximately 10% and 5%, respectively [16]. - Sales to the top three customers constituted approximately 34% of consolidated revenues in 2025, highlighting reliance on major customers [26]. - Fourth quarter 2025 sales were $5,986,263, an increase of 46% compared to $4,104,048 in the fourth quarter of 2024 [60]. - For the full year 2025, net sales were $27,890,260, a 3% increase from $26,986,627 in 2024 [60]. - Net sales for 2025 increased to $27,890,260, up from $26,986,627 in 2024, representing a growth of approximately 3.35% [107]. - The Fastener segment generated net sales of $24,085,699 in 2025, while the Assembly Equipment segment contributed $3,804,561, indicating a strong performance in both segments [147]. Financial Performance and Losses - The Company experienced significant recurring operating losses and negative cash flows, leading to substantial doubt about its ability to continue as a going concern [21]. - The net loss for 2025 was $1,083,214, or ($1.12) per share, significantly improved from a net loss of $5,615,614, or ($5.81) per share in 2024 [60]. - The Company reported operating losses of $1,196,717 in 2025, compared to $5,164,054 in 2024 [77]. - The operating loss decreased to $(1,196,717) in 2025 from $(5,164,054) in 2024, reflecting a reduction in operating expenses [107]. - The Company reported a gain on the sale of property of $(339,520) in 2025, compared to no such gain in 2024, impacting overall operating expenses [107]. Cost and Expenses - The Company faced significant price volatility in raw materials, particularly steel, which impacted operational costs and profitability [22][28]. - Selling and administrative expenses decreased by 9% to $5,662,120 in 2025 from $6,224,234 in 2024 [66]. - The gross margin for the Fastener segment improved by $2,374,051 year over year, reaching $2,673,791 in 2025 [63]. - Gross profit for 2025 was $4,125,883, significantly higher than $1,060,180 in 2024, indicating a substantial improvement in profitability [107]. - The Fastener segment's gross profit was $2,673,791 in 2025, while the Assembly Equipment segment's gross profit was $1,452,092, showcasing the profitability of both segments [147]. Assets and Liabilities - Working capital at December 31, 2025 was $9,894,317, a decrease of $476,898 from the beginning of the year [72]. - The Company had cash, cash equivalents, and marketable securities of $1,718,237 at the end of 2025, down from $1,922,679 at the beginning of the year [72]. - Total current assets decreased to $12,243,323 in 2025 from $12,591,065 in 2024, primarily due to a reduction in cash and cash equivalents [105]. - Total liabilities increased to $4,468,137 in 2025 from $3,337,722 in 2024, driven by higher deferred income taxes and other long-term liabilities [105]. - Cash and cash equivalents at the end of 2025 were $1,718,237, down from $1,922,679 at the end of 2024, indicating a cash decrease of approximately 10.6% [112]. Compliance and Governance - The Company was in default of a profitability covenant as of December 31, 2025, but the lender waived the default on February 27, 2026 [38]. - As of December 31, 2025, the Company was not in compliance with the minimum annual profitability covenant of its credit agreement [75]. - There have been no changes in the Company's internal control over financial reporting that materially affected or are likely to materially affect the Company's internal control during the quarter ended December 31, 2025 [182]. - The Company has adopted a code of ethics for its principal executive officer and principal financial officer, which is available upon request [186]. - The report has been signed by the Chief Executive Officer and Chief Financial Officer, confirming compliance with the Securities Exchange Act of 1934 [203]. Strategic Actions and Future Outlook - The Company plans to sell certain H&L assets valued at $179,254 in the first half of 2026 to improve liquidity [77]. - The outlook for 2026 indicates improvement in order volume but acknowledges significant uncertainty in the manufacturing sector [83]. - The Company is exploring additional financing sources, including potential real estate sale leaseback transactions [77]. - The Company recognized an ROU asset of $424,188 and a corresponding long-term lease liability of $415,824 upon the commencement of a new operating lease on March 1, 2025 [156]. - The expected annual minimum lease payments for the operating lease liability total $514,061, with a present value discount of $93,098 [155]. Inventory and Taxation - The Company's net inventory totaled approximately $6.2 million as of December 31, 2025, with valuation based on lower of cost or net realizable value [93]. - Total inventories decreased from $7,039,820 in 2024 to $6,584,921 in 2025, with valuation reserves reducing from $543,650 to $413,941 [139]. - The total tax benefit for 2025 was $(95,096), compared to an expense of $572,226 in 2024, with domestic income from operations before income taxes at $(1,178,310) in 2025 [140]. - The company reported a provision for state income tax of $2,430 in 2025, up from $1,021 in 2024, while federal income tax was $0 in 2025 compared to $8,390 in 2024 [140]. Capital Expenditures - Total capital expenditures in 2025 were $331,669, focused entirely on Fastener segment activities [69]. - The Company’s capital expenditures for 2025 amounted to $331,669, a decrease from $651,398 in 2024, indicating a potential shift in investment strategy [147]. - Total capital expenditures in 2024 were $651,398, with $369,003 allocated to the Fastener segment [70]. Customer and Market Dynamics - The automotive industry, which is cyclical and highly competitive, directly influences demand for the Company's products [24]. - Export sales accounted for approximately 25% of total sales in 2025, up from 19% in 2024, indicating a growing international market presence [19]. - The average daily trading volume for the Company's common stock was less than 4,000 shares in 2025, indicating low liquidity in the market [36]. - The Company’s three largest customers accounted for approximately 34% of consolidated net revenues in 2025, highlighting a reliance on key clients within the Fastener segment [152].

Financial Performance and Projections - VenHub Global, Inc. began recording revenue in 2025, with a reliance on debt and equity financing to sustain operations until consistent revenue flow is established[17]. - The company estimates costs of approximately $1,000,000 for the next 12 months to cover expenses associated with being a publicly reporting company[17]. - The Company has incurred losses for each of the past few years, primarily due to investments in research and development[56]. - The Company expects to continue incurring substantial losses for the foreseeable future, raising concerns about its ability to operate profitably[55]. - The company anticipates significant capital requirements for developing and growing its business, including costs related to research and development, procurement, and operational expenses[129]. - The company will incur ongoing SEC compliance and reporting obligations estimated at approximately $1,000,000 annually, which may strain available cash resources[177]. - The company has ongoing costs related to SEC reporting and compliance, which may hinder its ability to remain compliant if revenues do not increase[177]. Business Operations and Strategy - VenHub currently operates two company-owned stores located at Los Angeles Airport (LAX) and Union Station, with plans to evaluate the viability of opening more stores[33]. - The company aims to become a global leader in autonomous retail solutions, focusing on innovation, technology, and sustainability[19]. - The company is focused on launching new products and services, expanding manufacturing capabilities, and pursuing strategic partnerships and acquisitions[65]. - The company plans to expand its management, engineering, and product teams significantly to support its growth strategy[59]. - The transition to operating VenHub-owned stores may require significant operational adjustments and could introduce complexities that affect growth[116]. Technology and Innovation - VenHub's Smart Stores operate 24/7, utilizing autonomous robotic systems for product selection, bagging, and delivery, which significantly reduces labor costs for store owners[36]. - The company is developing AI-driven personalization features, including recommender engines, which are currently in testing and not yet deployed in live environments[23]. - The company is actively developing features such as ID verification technology for age-restricted products and solar-powered energy alternatives[23]. - Many planned features for the Smart Stores, such as enhanced AI-driven analytics and biometric authentication, are still in development and may not be commercialized on time[66][67]. - The company aims to reduce operating costs and greenhouse gases through its robotic systems, but customer adoption may be negatively impacted by resistance to new technology[90]. Intellectual Property and Legal Matters - VenHub has filed 25 unique patent applications, including 19 provisional and 6 utility patents, to protect its innovative technologies in robotics and AI[41]. - The Company has a strong IP portfolio with multiple patents pending, which is crucial for maintaining market leadership and growth potential[43]. - Protecting intellectual property is crucial for the company’s success, as failure to do so may hinder product development and commercialization[94]. - The company may face claims of infringement on third-party intellectual property rights, which could lead to costly litigation and impact operations[95]. - The company anticipates potential product liability claims, which could result in significant legal costs despite maintaining product liability insurance[92]. Market and Economic Conditions - Economic conditions, including higher interest rates, have negatively impacted investment activity and capital allocation to hardware startups, which could reduce future revenues[64]. - The company's business is highly dependent on discretionary spending patterns, which can be adversely affected by economic downturns, inflation, and other macroeconomic factors[110]. - The market demand for autonomous smart stores remains unproven, and assumptions about pricing and adoption rates may be inaccurate[112]. - Regulatory changes and resistance from labor unions could delay the adoption of new technologies, adversely affecting growth and financial performance[113]. Risks and Challenges - The company faces significant revenue forecasting challenges due to fluctuating customer demand for autonomous store units and related products[62]. - Limited deployment experience means the company cannot reliably convert pre-orders into final sales, leading to potential material fluctuations in operating results[63]. - Supply chain disruptions, particularly for specialized components like robotics assemblies and semiconductor chips, pose risks to production and operational efficiency[68][69][70]. - Cybersecurity threats pose risks to proprietary information, potentially harming the company's competitive position and incurring significant costs[98]. - The complexity of the company's products necessitates proper usage to avoid injuries, and any misuse could expose the company to liability risks[93]. Human Resources and Employment - The Company currently employs two full-time employees and over 30 independent contractors, with plans to expand its workforce as it scales[48]. - The company has engaged a Professional Employer Organization (PEO) to optimize costs and develop comprehensive fringe benefit programs[48]. - Executive employment agreements include potential cash bonuses up to $3.2 million, which could increase operating expenses significantly[121]. - Executive cash compensation obligations exceed $3.2 million annually in bonuses, which may impact liquidity and operational flexibility[163]. Shareholder and Financial Structure - The company has not paid, nor intends to pay, dividends on its common stock in the foreseeable future, with any earnings expected to be reinvested into business activities[180][181]. - The company issued an aggregate of 7,858,308 shares of common stock to consultants and service providers from April 15, 2023, through December 31, 2025, as compensation for services rendered[203]. - The company’s executive employment agreements include significant equity-based compensation, potentially resulting in the issuance of tens of millions of additional shares, leading to substantial dilution for existing stockholders[190]. - The Regulation CF offering of Series B Preferred Stock raised $2,735,670.99 from the sale of 675,015 shares at an average price of $4.05 per share[209]. Compliance and Regulatory Issues - The company is subject to evolving data privacy and security laws, which could result in significant fines and liabilities if not complied with[147]. - The California Consumer Privacy Act (CCPA) and the California Privacy Rights Act (CPRA) impose new obligations that may increase compliance costs and potential liabilities for the company[148]. - The company is subject to stringent international data protection regulations, including the GDPR, which can impose penalties up to €20 million or 4% of worldwide turnover for serious violations[149]. - Noncompliance with privacy and data protection laws could lead to investigations and significant costs, impacting business prospects[151]. Miscellaneous - The company has identified material weaknesses in its internal control over financial reporting, which could lead to misstatements and regulatory scrutiny[158]. - As an "emerging growth company," the company benefits from reduced reporting requirements, but this may hinder its ability to raise capital[168]. - The company is not currently required to comply with certain provisions of the Sarbanes-Oxley Act, delaying formal assessments of internal controls until it no longer qualifies as an emerging growth company[174]. - Future pandemics or catastrophic events could adversely impact the company’s operations and financial results, necessitating additional capital[166].

Financial Performance - Treatment Segment accounted for $45,097,000, or 73.1% of total revenue for 2025, up from $34,953,000, or 59.1% in 2024[15] - Services Segment revenue decreased to $16,577,000, or 26.9% of total revenue for 2025, down from $24,164,000, or 40.9% in 2024[17] - Revenue from federal government entities totaled $39,243,000, representing 63.6% of total revenue in 2025, down from $40,550,000 or 68.6% in 2024[39] - Foreign revenue increased by approximately 162.6% to $6,440,000, or 10.4% of total revenue in 2025, compared to $2,452,000, or 4.1% in 2024[19] - The company anticipates improvements in financial results in 2026, driven by increased revenue from contracts and advancements in technology[198] Operational Developments - Treatment Segment backlog increased by approximately 50.9% to $11,861,000 as of December 31, 2025, compared to $7,859,000 as of December 31, 2024[11] - The operational phase of the DFLAW program is expected to begin in 2026, with an increase in Hanford waste receipts anticipated in the first half of 2026[198] - The company anticipates the operational phase of the DFLAW program to begin in 2026, generating several effluent waste streams for treatment[11] - The commercial operation of the Perma-FAS system for PFAS destruction is expected to significantly increase production capacity, with a second-generation unit planned for deployment in the second half of 2026[27] - The company plans to deploy a second generation PFAS destruction unit in the second half of 2026, which is expected to triple production capacity[198] Employee and Labor Relations - The company employed approximately 307 employees as of December 31, 2025, with 293 being full-time[36] - The Collective Bargaining Agreement for 68 employees became effective on October 1, 2025, and will last until October 1, 2030[37] Environmental and Regulatory Matters - Environmental remediation liabilities increased to $3,485,000 as of December 31, 2025, up from $767,000 in 2024, reflecting a net increase of approximately $2,718,000[44] - Approximately $76,000 of total environmental remediation liabilities were recorded as current as of December 31, 2025[44] - The PFNWR facility's permit renewal triples its permitted liquid mixed waste processing capacity to approximately 1,200,000 gallons per year[11] Competition and Market Strategy - The company is facing significant competition in the Treatment Segment, particularly from EnergySolutions and Waste Control Specialists, which may impact market share and profit margins[41] - The company is focusing on expanding into international markets to enhance growth opportunities[42] Research and Development - Research and Development (R&D) expenses were $1,291,000 in 2025, compared to $1,172,000 in 2024, focusing on new technology for treating PFAS[46] Financial Stability - The ability to meet quarterly financial covenant requirements under the loan agreement is a critical factor for the company's financial stability[198]

Financial Performance - For the year ended December 31, 2025, the company reported a net income of $2,948, which was primarily due to interest earned on marketable securities held in the Trust Account amounting to $2,108,805, offset by a loss on derivative liability of $1,612,150 and transaction costs of $111,382[367]. - For the period from June 5, 2024, through December 31, 2024, the company reported a net loss of $50,041, entirely attributed to general and administrative expenses[368]. Marketable Securities - As of December 31, 2025, the company had marketable securities in the Trust Account totaling $117,108,805, which includes approximately $2,108,805 of interest income[372]. - The company intends to use substantially all funds in the Trust Account to complete its Business Combination and any remaining proceeds for working capital to finance operations of the target business[372]. Initial Public Offering - The company completed its Initial Public Offering on July 16, 2025, raising gross proceeds of $115,000,000 from the sale of 11,500,000 Units at $10.00 per Unit[369]. - The company incurred $6,471,835 in Initial Public Offering related costs, which included a cash underwriting fee of $2,000,000 and a deferred underwriting fee of $4,025,000[370]. Cash and Operational Needs - As of December 31, 2025, the company had cash of $378,794 available for operational activities and evaluating target businesses[373]. - The company may need to raise additional capital through loans or investments to meet working capital needs, and if a Business Combination is not completed by January 16, 2027, it will face mandatory liquidation[375][376]. - The company has no long-term debt or off-balance sheet arrangements as of December 31, 2025, and incurs a monthly fee of $10,000 for office space and administrative support[377][378]. Business Operations - The company has not engaged in any operations or generated revenues to date, with all activities focused on preparing for the Initial Public Offering and identifying a target company for a Business Combination[366].

Financial Performance - BioAge reported collaboration revenue of $9.0 million for the year ended December 31, 2025, compared to no revenue in 2024[9]. - The net loss for the year ended December 31, 2025, was $80.6 million, or $2.24 per share, compared to a net loss of $71.1 million, or $6.63 per share, in 2024[14]. Expenses - Research and development expenses increased to approximately $73.9 million in 2025 from $59.0 million in 2024, primarily due to increased costs associated with clinical trials and new programs[10]. - General and administrative expenses rose to $27.8 million in 2025, up from $19.2 million in 2024, driven by higher personnel-related expenses and legal fees[13]. Cash and Assets - As of December 31, 2025, BioAge had approximately $285.1 million in cash, cash equivalents, and marketable securities, sufficient to fund operations through 2029[15]. - Total current assets decreased from $357,103 in 2024 to $286,793 in 2025, a decline of approximately 19.6%[26]. - Cash and cash equivalents dropped significantly from $354,349 in 2024 to $188,888 in 2025, a decrease of about 46.6%[26]. Liabilities and Equity - Total liabilities decreased from $35,107 in 2024 to $22,838 in 2025, representing a reduction of approximately 34.9%[26]. - Total stockholders' equity fell from $323,127 in 2024 to $272,051 in 2025, a decline of about 15.8%[26]. - Accounts payable increased from $1,996 in 2024 to $2,674 in 2025, an increase of approximately 33.9%[26]. - Accrued expenses and other current liabilities decreased from $11,751 in 2024 to $8,480 in 2025, a reduction of about 27.4%[26]. - The current portion of term loan decreased from $6,000 in 2024 to $2,648 in 2025, a decline of approximately 55.7%[26]. - Deferred revenue, current decreased from $7,826 in 2024 to $5,754 in 2025, a reduction of about 26.5%[26]. - Additional paid-in-capital increased from $575,693 in 2024 to $605,189 in 2025, an increase of approximately 5.1%[26]. - The accumulated deficit increased from $(252,811) in 2024 to $(333,416) in 2025, reflecting a worsening of approximately 31.9%[26]. Clinical Developments - Positive interim Phase 1 data for BGE-102 showed an 86% median reduction in hsCRP and a 58% reduction in IL-6 at Day 14 in participants with obesity[6]. - The company plans to initiate a Phase 2a proof-of-concept trial for BGE-102 in cardiovascular risk in the first half of 2026, with data expected in the second half of 2026[6]. - BioAge is expanding BGE-102 into ophthalmology, with a Phase 1b/2a trial in diabetic macular edema planned for mid-2026[6]. - The company is advancing its APJ agonist program, demonstrating at least 10-fold greater potency than apelin, with plans to file an IND by the end of 2026[5]. Funding Activities - BioAge completed an upsized follow-on public offering generating total gross proceeds of approximately $132.3 million, strengthening its balance sheet to support clinical programs[7].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2025 ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ___________ Commission file number 001-36583 ENERGY FOCUS, INC. (Exact name of registrant as specified in its charter) Delaware 94-3021850 (State or other jurisdi ...

Revenue and Sales Performance - In 2025, the company achieved net revenues of $142,440,236, representing a 3% increase from 2024[33] - Approximately 98% of the company's revenue in 2025 was generated through the Amazon sales platform[33] - The total U.S. e-commerce sales reached $1,233.7 billion in 2025, marking a 3.4% year-over-year increase[42] - E-commerce accounted for 16.4% of total U.S. retail sales in 2025, with total retail sales reaching approximately $7.68 trillion, a 3.5% increase from 2024[46] - Amazon accounted for approximately 40.4% of all U.S. e-commerce sales, solidifying its position as the largest e-commerce retailer[41] - Amazon is estimated to hold a 40.4% share of all U.S. e-commerce sales, making it the largest e-commerce retailer[47] - The company experienced a net income of $1,704,849 in 2025, a significant recovery from a net loss of $2,429,694 in 2023[33] Operational Strategies and Challenges - The company implemented strategic measures to front-load 3-6 months of sales-related inventory in response to tariff increases, ensuring supply chain stability[26] - The company’s proprietary software system optimizes operations by processing large amounts of data daily to identify product gaps and maintain stock availability[25] - The company is actively pursuing vendor partnerships and enhancements in third-party logistics to mitigate cost impacts and refine operational frameworks[78] - The company plans to expand rapidly by increasing the number of business managers, vendors, and SKUs in the upcoming years[18] - The company anticipates structural challenges in 2026, including higher inbound placement fees and increased shipping costs due to the discontinuation of Amazon's labeling service[77] - Increased fulfillment and storage fees from Amazon could adversely impact profit margins and operational results[113] - The company faces significant variability in retail demand, particularly during the fourth quarter, which could affect revenue if popular products are not adequately stocked[111] Financial Position and Risks - As of December 31, 2025, the outstanding balance under the line of credit with Taishin International Bank was $637,348, with an interest rate of 3.42% per annum[79] - The company had $3,810,418 due to related parties as of December 31, 2025, a decrease from $4,192,995 in 2024[80] - The company is exposed to insolvency risks from third parties, which could negatively impact cash flows and financial condition[138] - Legal proceedings and claims could have a material adverse impact on operating results, including significant monetary damages[106] - Increased labor costs and compliance with evolving regulations may negatively impact financial results[95] - Economic conditions significantly influence consumer spending, which could adversely affect sales of discretionary items[127] - Revenue growth may not be sustainable, and percentage growth rates may decrease due to general economic conditions and customer preferences[105] Compliance and Regulatory Issues - Compliance with legal and regulatory requirements is crucial, as failure to do so may adversely affect operations and financial condition[139] - The company is subject to evolving government regulations that could impose substantial costs and affect operations, including areas such as data protection and consumer protection[157] - The company has implemented internal controls to comply with SEC and Nasdaq regulations, which adds complexity and cost to compliance efforts[140] - The exclusive forum provision in the company's bylaws may limit stockholders' ability to bring claims in preferred jurisdictions, potentially increasing litigation costs[142] - The company adopted a fee-shifting provision to discourage frivolous litigation, which may impact stockholder lawsuits[144] Management and Governance - The loss of key senior management personnel could negatively affect the company's operations and strategic direction[154] - Sam Lai and Maggie Yu control approximately 94.8% of the voting power, which may limit minority stockholders' influence on corporate affairs[155] - As of March 24, 2026, Mr. Lai and Ms. Yu together beneficially owned 33,394,442 shares, representing approximately 94.8% of the voting power of the company's outstanding common stock[156] Market and Stock Performance - The market price of the company's common stock may be volatile, influenced by factors such as operating results and industry developments[160] - The company may be classified as a "penny stock" in the future if it fails to maintain its Nasdaq listing, which would impose additional sales practice requirements on broker-dealers[163] - The company qualifies as an "emerging growth company" under the JOBS Act, allowing it to rely on exemptions from certain disclosure requirements[172] - The company has a public float of less than $250 million, which may affect its attractiveness to potential investors[181] - The company has incurred significant increased costs due to operating as a public company, impacting management time and resources[179] Insurance and Risk Management - The company maintains liability insurance for product liability claims, but there is no guarantee that coverage will be adequate for all liabilities incurred[158] - The company has not identified any known cybersecurity threats that have materially affected its operations, but recognizes ongoing risks[191] Stock Issuances and Equity - On July 2, 2025, the Company issued 2,275 shares of common stock to each of five executives, valued at $1.3185 per share[210] - On October 3, 2025, the Company issued 951 shares of common stock to each of the same five executives, valued at $3.1530 per share[211] - The stock issuances were made under an exemption from registration as per Rule 506 of Regulation D and Section 4(a)(2) of the Securities Act[212] - There were no purchases of equity securities by the issuer or affiliated purchasers during the reporting period[213] - The company has authorized 4,995,000 shares for issuance under the 2021 Equity Incentive Plan, with 9,152,213 shares available as of March 24, 2026[207] Office and Lease Agreements - The company has two office leases in Taiwan with total contract amounts of $207,197, effective from June 2025 to November 2028[198] - The company leases a virtual office for $59 per month, expiring on August 31, 2026[196]

Debt and Financial Obligations - As of December 28, 2025, the company had $2,003 million in total debt and finance lease obligations, with $2,298 million in undrawn capacity, including $2,100 million under the Senior Revolving Credit Facility[225]. - The company’s ability to generate sufficient cash flow to service its indebtedness is uncertain, which may necessitate alternative financing plans[232]. - The Senior Revolving Credit Facility bears interest at a variable rate linked to the Secured Overnight Financing Rate (SOFR), which may increase debt service obligations if market rates rise[236]. - The company’s financial covenants may limit its ability to obtain financing or refinance existing debt, potentially impacting liquidity and operational flexibility[230]. - A breach of covenants could lead to defaults, allowing lenders to demand immediate repayment of outstanding amounts[229]. - The repayment obligations under outstanding debt may discourage or delay potential takeovers of the company[231]. - The company may incur additional indebtedness despite current levels, which could exacerbate financial leverage risks[237]. Ownership and Control - WH Group beneficially owned approximately 87% of the company's outstanding shares as of March 24, 2026, classifying the company as a "controlled company" under Nasdaq rules[239]. - WH Group controls a majority of the company's outstanding shares, allowing it to designate a majority of the board of directors and influence key decisions[240]. - WH Group's ownership enables it to control matters such as business direction, mergers, financing policies, and executive compensation[242]. - The concentration of ownership by WH Group may limit opportunities for shareholders to receive a premium during potential acquisitions, affecting the market price of the company's common stock[243]. - If WH Group sells its controlling interest, shareholders may not realize any change of control premium, potentially leading to control by an unknown third party[244]. - Related party transactions with WH Group may create conflicts of interest, impacting investor confidence and business opportunities[248]. - Changes in U.S.-PRC relations could adversely affect the company's financial condition and market price due to its ties with WH Group[251]. - WH Group is required to obtain approvals for certain corporate actions under the HKEx Listing Rules, which may restrict the company's ability to engage in transactions[252]. - Failure to obtain necessary approvals from WH Group could materially affect the company's business and financial condition[254]. Market and Competitive Environment - The food industry is highly competitive, and the company's ability to compete effectively depends on executing across multiple criteria such as product quality and consumer preferences[117]. - The company faces competition from larger multi-brand packaged foods businesses and other protein sources, which may impact its market position[119]. - Competitive pressures may force the company to lower prices or increase marketing expenditures, adversely affecting margins and operating results[123]. - Changes in consumer preferences and failure to maintain favorable perceptions of the company's brands could lead to reduced demand and price reductions[124]. - The company has experienced outbreaks of livestock diseases, which can significantly impact production, supply of raw materials, and consumer confidence[130]. - Recent outbreaks of avian influenza and other diseases have previously affected hog supplies, leading to higher meat prices, although past outbreaks did not materially impact financial results[130]. - The company must effectively manage various risks, including labor issues and natural disasters, to maintain operational stability and financial performance[148]. Regulatory and Compliance Risks - The company is subject to extensive regulations in food safety, and non-compliance could result in fines, recalls, or operational disruptions[134]. - Product recalls due to contamination or mislabeling could lead to significant financial losses and damage to the company's reputation[136]. - The company is subject to evolving regulatory standards regarding climate-related disclosures, which may increase operational costs[218]. - Compliance with environmental regulations has resulted in significant costs, with potential future liabilities from non-compliance leading to administrative, civil, and criminal penalties[210]. - The company may incur material capital expenditures to meet proposed wastewater discharge standards, which could significantly impact financial results[213]. - The company has incurred significant costs associated with being a public company, including compliance with the Sarbanes-Oxley Act and Dodd-Frank Act, which have increased operational expenses[255]. Financial Performance and Market Conditions - The maximum amount of margin deposits held by brokers and counterparties over the past three years was $121 million, indicating potential volatility in cash flow due to market conditions[227]. - Economic conditions, including inflation and interest rates, have adversely affected the company's operations, with potential impacts on demand for products and costs of raw materials[185]. - Changes in tax laws or adverse outcomes from tax examinations could negatively affect the company's financial condition and results of operations[187]. - The market price of the company's common stock may fluctuate significantly due to various factors, including operational results and market conditions[260]. - Future sales or issuances of common stock could negatively impact the market price of the company's shares[265]. - The company may issue additional shares or debt securities in the future, which could dilute existing stockholders' holdings and adversely affect the market price of its common stock[269]. - The trading market for the company's common stock relies on analysts' reports, and downgrades or lack of coverage could lead to a decline in stock price and trading volume[272]. Strategic Initiatives and Risks - The company is implementing multiple savings opportunities across production and logistics to improve profitability and efficiency, but results may vary due to various uncertainties[115]. - The company regularly conducts R&D activities to develop new products, but success is contingent on various factors including consumer preferences and regulatory compliance[118]. - The company faces significant risks in developing and marketing new products, which require substantial marketing expenditures that may not be recouped if products do not gain market acceptance[121]. - Labor shortages, particularly in rural areas, could impact operations and increase labor costs[166]. - The company has implemented new risk-based measures to address identity fraud and compliance with labor laws following a state investigation[173]. - The company may require additional financing to achieve its goals, which could lead to delays or limitations in product manufacturing and development[222]. Customer and Sales Concentration - The company's ten largest customers accounted for approximately 42% of net sales for fiscal year 2025, indicating a significant reliance on a concentrated customer base[177]. - U.S. export sales accounted for 11% of total sales for the fiscal year 2025[160]. - Products exported to China faced tariffs ranging from 25% to 47%, with most products subject to a 47% tariff rate[161]. - Sales into California and Massachusetts accounted for approximately 6% of consolidated sales for the year ended December 28, 2025, with 19% of those sales subject to Proposition 12 and Question 3 regulations[199][200]. Asset Management and Impairment Risks - As of December 28, 2025, the company reported $2,882 million in goodwill and intangible assets, representing about 24% of total assets, with goodwill primarily allocated to Packaged Meats ($1,503 million) and Mexico ($79 million)[178]. - The company faces risks related to the potential impairment of goodwill and intangible assets, which could negatively impact consolidated results of operations and net worth[180]. - The company’s equity investments are subject to periodic evaluations, and any impairment could lead to significant non-cash charges affecting reported earnings[181].

Financial Performance - Total revenues for the years ended December 31, 2025 and 2024 were $95.4 million and $120.3 million, respectively, reflecting a year-over-year decline partly due to divestitures[21]. - The company reported net losses of $81.8 million for 2025 and $62.5 million for 2024, indicating ongoing financial challenges despite efforts to achieve profitability[66]. - Approximately 93% of the company's revenues are generated from subscription-based arrangements, highlighting the importance of customer retention for financial stability[67]. - As of December 31, 2025, the company's annual recurring revenue (ARR) was $84.1 million[43]. - The net revenue retention (NRR) for subscription customers was approximately 96% for Q4 2025[44]. Strategic Initiatives - The company aims to return to positive revenue growth rates through a product-led growth strategy and sales optimization efforts[29]. - The company completed 16 acquisitions from 2017 to 2023 to increase scale and expand product offerings, with a focus on streamlining operations and divesting non-core businesses[28]. - The company plans to expand into political prediction markets, leveraging its expertise in policy data and analysis[54]. - The focus on enhancing the PolicyNote platform and expanding into political prediction markets is part of the company's strategy to leverage its proprietary data and technology[20][28]. - The company is investing in AI and machine learning capabilities to enhance its product offerings, but success in these areas is uncertain and could impact future revenue growth[79]. Workforce and Culture - The company reduced its employee headcount from approximately 800 as of December 31, 2022, to 540 as of December 31, 2025, as part of its strategic refocusing[28]. - The workforce consists of 543 employees, with 407 being full-time as of December 31, 2025[58]. - The company emphasizes the importance of maintaining a strong corporate culture, which is vital for employee retention and overall business success[109]. - Attracting and retaining highly skilled personnel, particularly in AI and machine learning, is essential for continued innovation and revenue growth[111]. Technology and Innovation - Investments in AI-driven technology and agentic APIs are expected to enhance product offerings and customer insights, facilitating better decision-making[30][32]. - The technology stack includes AI-enabled core technologies built on modern cloud infrastructure, supporting reliable business operations[45]. - The company utilizes AI-driven analytical solutions to provide actionable insights and enhance decision-making for clients[46]. - The company has obtained SOC-2 certification for many of its products, subjecting them to annual compliance audits[206]. - The company's cybersecurity risk management program is led by a Vice President with over 15 years of experience, emphasizing the importance of cybersecurity across the organization[205]. Market and Competition - The company faces competition from traditional information services and emerging AI platforms, emphasizing the need for continuous investment in product capabilities[49]. - The company operates in competitive markets and faces challenges from established competitors with substantial financial resources and market experience[165]. - Increased competition from lower-cost alternatives may require the company to reduce prices, potentially impacting revenue and profit margins[166]. - The company faces risks from competition, particularly from lower-priced offerings and AI platforms, which could adversely affect subscription demand and revenue[68]. Regulatory and Compliance Risks - The company recognizes the increasing complexity of global regulations and policies, positioning itself to capture market opportunities while managing associated risks[24][31]. - Compliance with laws and regulations governing public sector contracts is critical, with potential penalties for non-compliance that could adversely affect revenue[106]. - The company may incur significant operational costs to comply with anti-corruption and anti-bribery laws, which could lead to penalties if not adhered to[153]. - Legal and regulatory risks across various jurisdictions could significantly impact business operations and financial performance[122]. Financial Obligations and Risks - As of December 31, 2025, the company had $136.2 million in total indebtedness, including $74.1 million under the 2025 Senior Term Loan secured by substantially all assets and $62.1 million unsecured[123]. - The 2025 Senior Term Loan requires monthly cash interest payments and quarterly principal payments, with full repayment due by August 12, 2029, impacting available funds for working capital and expansion[124]. - The company was required to seek financial covenant relief due to an inability to meet the requirement of an Annual Recurring Revenue (ARR) of at least $81 million as of January 31, 2026[126]. - The company has identified a material weakness in its internal controls over financial reporting, which could lead to inaccurate financial results and loss of investor confidence[160]. Customer Base and Relationships - The company serves a diverse customer base, including 46 of the Fortune 100, across more than 40 countries, providing stability and growth opportunities[21][34]. - The company serves a diverse customer base, including 46 of the Fortune 100, and aims to drive increased customer loyalty through a product-led growth strategy[42]. - High-quality customer support and professional services are crucial for maintaining customer relationships and ensuring the effective integration of products[119]. Risks and Uncertainties - The company may experience significant fluctuations in results of operations and cash flows due to variable sales cycles and the unpredictability of contract renewals[88]. - The company may face challenges in obtaining and maintaining effective intellectual property protection, which is critical for its success[140]. - The company may face significant costs and distractions from potential litigation related to intellectual property rights, which could impair its ability to commercialize products[145]. - The company may not be able to adequately protect its intellectual property rights, which could harm its competitive position and financial condition[139].

Financial Performance - Fiscal 2025 net sales reached $15.5 billion, an increase of 9.8% from fiscal year 2024[5] - Annual operating profit was $1.3 billion, marking the second consecutive year of record operating profit[5] - Packaged Meats segment operating profit was $1,094 million, with an operating profit margin of 12.5%[5] - Fresh Pork segment operating profit improved to $214 million, despite market challenges[8] - Adjusted net income from continuing operations attributable to Smithfield for the twelve months ended December 28, 2025, was $987 million, compared to $783 million for the same period in 2024, representing a 26.1% increase[28] - Sales for the three months ended December 28, 2025, were $4,227 million, up from $3,951 million in the same period of 2024, reflecting a 7% growth[28] - The net income from continuing operations attributable to Smithfield for the three months ended December 28, 2025, was $327 million, compared to $204 million for the same period in 2024, indicating a 60.8% increase[28] - Net income from continuing operations for the twelve months ended December 28, 2025, was $998 million, an increase from $798 million in the previous year, representing a 25% growth[32] - Adjusted net income from continuing operations attributable to Smithfield for the twelve months ended December 28, 2025, was $1,002 million, compared to $714 million in the prior year, reflecting a 40% increase[36] - EBITDA from continuing operations for the twelve months ended December 28, 2025, reached $1,654 million, up from $1,474 million in the previous year, indicating a 12% growth[40] - Operating profit for the three months ended December 28, 2025, was $400 million, with an operating profit margin of 9.5%[46] - For the twelve months ended December 28, 2025, the consolidated operating profit was $1,292 million, with an operating profit margin of 8.3%[48] - Adjusted operating profit for the twelve months was $1,336 million, with an adjusted operating profit margin of 8.6%[48] Cash Flow and Liquidity - The company generated over $1 billion in cash flows from operating activities, supporting strong financial health[6] - Cash and cash equivalents increased to $1,539 million as of December 28, 2025, compared to $943 million as of December 29, 2024, showing a significant liquidity improvement[30] - Net cash flows from operating activities of continuing operations were $1,059 million for the twelve months ended December 28, 2025, compared to $916 million in the previous year, marking a 16% increase[32] - Cash, cash equivalents, and restricted cash at the end of the period totaled $1,539 million, significantly higher than $943 million at the end of the previous year[33] Debt and Financial Health - The ratio of net debt to adjusted EBITDA from continuing operations is a critical measure for monitoring the sustainability of debt levels, although specific figures were not provided[28] - The ratio of total debt and finance lease obligations to net income from continuing operations improved to 2.0x for the twelve months ended December 28, 2025, down from 2.5x in the prior year[43] - The net debt as of December 28, 2025, was $464 million, a decrease from $1,059 million in the previous year, indicating improved financial health[43] Dividends and Shareholder Returns - Smithfield announced a dividend increase to $1.25 per share for fiscal year 2026[10] - The company anticipates a dividend payment of $1.25 per share in 2026, reflecting its commitment to returning value to shareholders[23] - The company paid dividends totaling $396 million during the twelve months ended December 28, 2025, an increase from $288 million in the previous year[32] Strategic Initiatives - The company plans to invest in a new state-of-the-art processing facility in Sioux Falls, South Dakota[6] - Smithfield entered into an agreement to acquire Nathan's Famous, aiming to enhance profitability and brand ownership[6] - The company is focused on strategic decisions to restructure operations, which may impact future financial results and operational efficiency[28] Operational Efficiency - Adjusted operating profit for the same period was $402 million, maintaining an adjusted operating profit margin of 9.5%[46] - The adjusted EBITDA margin from continuing operations for the twelve months ended December 28, 2025, was 10.8%, compared to 9.7% in the prior year, reflecting improved operational efficiency[40] - Capital expenditures for the twelve months ended December 28, 2025, were $341 million, slightly down from $350 million in the previous year[32] Segment Performance - The Packaged Meats segment reported an operating profit of $1,094 million for the twelve months, representing a margin of 12.5%[48] - Fresh Pork segment's operating profit for the twelve months was $214 million, with a margin of 2.6%[48] - Hog Production segment incurred an operating loss of $176 million for the twelve months[48] - The company recognized a $32 million gain from the sale of Utah hog farms during the reporting period[48] Costs and Charges - Workforce reduction initiatives resulted in $12 million in costs for the twelve months ended December 28, 2025[48] - The company reported litigation charges of $73 million for the twelve months, impacting overall profitability[48]