Financial Performance - Net loss for the fourth quarter of 2025 was $19.9 million, or $0.27 per share, compared to a net loss of $18.6 million, or $0.62 per share, for the same period in 2024 [13]. - Net loss narrowed to $57,385,163 in 2025 compared to $79,979,354 in 2024, reflecting an improvement of about 28.5% [27]. - Cash and cash equivalents at the end of 2025 were $3,496,540, down from $3,857,026 in 2024, a decrease of 9.3% [31]. - Net cash used in operating activities was $45,786,988 in 2025, a decrease from $51,755,798 in 2024, indicating improved cash flow management [31]. Research and Development - Relmada reported a 95% complete response (CR) rate at any time and a durable 76% CR rate at 12 months for NDV-01 in non-muscle invasive bladder cancer (NMIBC) [4]. - The company is on track to initiate the Phase 3 RESCUE registrational program for NDV-01 in mid-2026 [4]. - Expected initial 3-month NDV-01 data from the Phase 3 2L BCG-unresponsive study is anticipated by the end of 2026 [10]. - Relmada has received FDA alignment on two registrational pathways for NDV-01, confirming study design and primary endpoints [5]. - No patients in the NDV-01 study had progression to muscle-invasive disease, and no radical cystectomies were performed [9]. Financial Position - Cash balance as of December 31, 2025, was $93.0 million, with additional gross proceeds of $160 million expected to fund operations through 2029 [4]. - Total assets increased to $94,003,471 in 2025 from $45,817,818 in 2024, representing a growth of 105% [25]. - Total stockholders' equity rose to $86,512,013 in 2025 from $35,521,961 in 2024, an increase of 143% [25]. Operating Expenses - Research and development expense for the 12 months ended December 31, 2025, totaled $26.9 million, a decrease of $19.3 million from $46.2 million in 2024 [13]. - General and administrative expense for the 12 months ended December 31, 2025, was $32.2 million, down from $37.7 million in 2024 [13]. - Total operating expenses decreased to $59,100,200 in 2025 from $83,891,036 in 2024, a reduction of approximately 29.6% [27]. - Research and development expenses decreased significantly to $26,879,146 in 2025 from $46,175,512 in 2024, a decline of 41.5% [27]. - General and administrative expenses also decreased to $32,221,054 in 2025 from $37,715,524 in 2024, a reduction of 14.5% [27]. Financing Activities - The company completed an oversubscribed $160 million PIPE financing in March 2026, strengthening its balance sheet to support NDV-01 Phase 3 development [4]. - Proceeds from the issuance of common stock, net, amounted to $93,637,829 in 2025, compared to no proceeds in 2024 [31]. - The weighted average number of common shares outstanding increased to 39,479,694 in 2025 from 30,163,751 in 2024, an increase of 30.8% [27].

Clinical Trials and FDA Approvals - The FDA cleared the Company's Type I Diabetes (CELZ-201 CREATE-1) IND application, allowing the initiation of a Phase I/II clinical trial with patient recruitment starting in September 2023[23]. - The Company received FDA clearance for a Phase I/II trial of AlloStemSpine® Chronic Lower Back Pain (CELZ-201 ADAPT) in September 2023, enrolling 30 individuals[28]. - In March 2024, the Company secured FDA authorization for expanded access therapy using CELZ-201 to manage abnormal glucose tolerance in high-risk individuals[31]. - The FDA granted Fast Track designation to CELZ-201-DDT in August 2025, expediting its path to market and patient access[40]. - The AlloStem™ Clinical Cell Line (CELZ-200) was developed to support multiple programs, including treatments for Type I Diabetes and chronic lower back pain[22]. - The FDA clearance for the AlloStemSpine® Chronic Lower Back Pain trial will enroll 30 individuals to evaluate safety and efficacy[28]. - The AlloStem™ program is in clinical phase, utilizing perinatal tissue-derived cells for regenerative therapies, with FDA Drug Master Files registered for interventional drug products[50]. - The ImmCelz™ (CELZ-100) technology is in pre-clinical trials, focusing on reprogramming a patient's immune cells for various treatments[51]. - The AlloStem™ (CELZ-201-DDT) program demonstrated an excellent safety profile with no serious adverse events reported in the first cohort of the clinical trial[38]. - The company completed patient enrollment in the ADAPT clinical trial for CELZ-201 in December 2025, transitioning to the next phase focused on follow-up and data analysis[43]. Efficacy and Outcomes - In April 2023, a study reported a 93% efficacy rate in patients treated with CELZ-001 for Type 2 Diabetes, demonstrating at least a 50% reduction in insulin requirement[27]. - The StemSpine® procedure demonstrated an efficacy rate of 87% in a three-year follow-up study, with no serious adverse effects reported[69]. - The mean pain score for patients in the pilot study decreased from 8.9 at baseline to 1.3 at 12 months, indicating significant improvement in mobility and pain reduction[67]. - The OvaStem™ procedure showed significant efficacy for treating medical refractory Primary Ovarian Insufficiency (POI), resulting in the successful birth of healthy babies without serious adverse effects[75]. - In February 2023, positive one-year follow-up data for the StemSpine® pilot study demonstrated continued efficacy for treating chronic lower back pain[24]. Financial Activities and Investments - On October 23, 2024, the company sold 418,552 shares at $4.42 per share, raising approximately $1.6 million in net proceeds from a registered direct offering and concurrent private placement[44]. - On March 6, 2025, the company entered into agreements for the exercise of existing warrants, generating gross proceeds of $3.7 million from the exercise of 837,104 shares at $4.42 per share[45]. - On October 29, 2025, the company raised approximately $4.2 million from the exercise of warrants for 1,116,136 shares at $3.75 per share, with new warrants for up to 2,790,340 shares at $2.86 per share[46]. - The company contributed $43,200 to Bionance for an investment in Applife Digital Solutions, indicating strategic financial partnerships[42]. Intellectual Property and Licensing - The company has a robust intellectual property portfolio with seven issued patents and thirty-nine pending applications related to stem cell utilization in various medical fields[78]. - The company acquired U.S. Patent No. 9,598,673 for the treatment of lower back pain, with an initial payment of $100,000, including cash and stock[84]. - The company has ongoing obligations under the Patent Purchase Agreement, including $100,000 upon filing an IND with the FDA and $200,000 upon dosing the first patient in a Phase 1-2 clinical trial[88]. - The company has entered into a Patent License Agreement with Jadi Cell, LLC, granting access to proprietary processes for expanding the master cell bank, with an initial license fee of $250,000 paid in stock[86][87]. - The company is required to pay a 5% royalty on gross sales of products derived from its patents for five years following the first sale[88]. - Trademark registrations have been obtained for CaverStem®, StemSpine®, AlloStemSpine®, and FemCelz®, with additional applications pending for several other products[90]. Regulatory Environment - The FDA regulates the company's stem cell treatments under the Public Health Service Act and the Federal Food, Drug, and Cosmetic Act, imposing substantial requirements on clinical development and marketing[93][95]. - The FDA's approval process for drugs and biologics typically involves multiple phases of clinical trials, which can be time-consuming and expensive[102]. - The FDA can impose enforcement actions such as fines and product recalls if regulatory compliance is not met, which could adversely affect the company[100]. - The FDA's premarket clearance process can take from three months to four years, depending on the type of application submitted[122]. - If products are classified as medical devices, the company must comply with FDA regulations, which could lead to significant enforcement actions if not adhered to[123]. Strategic Partnerships and Initiatives - The partnership with Greenstone Biosciences aims to leverage AI for developing hypoimmunogenic iPSC-derived pancreatic islet cells, enhancing insulin secretion capabilities[36]. - The company announced a national BioDefense Veterans Initiative to address long-term effects of toxic burn pit exposure, utilizing AI and iPSC technology[41]. - In July 2024, the company initiated a program combining AI with proprietary iPSC technology to diagnose and treat patients exposed to biological and chemical weapons[34]. - The company announced an expanded agreement with Greenstone Biosciences Inc. in February 2025 to leverage AI for developing iPSC technology for diabetes treatment[36]. - In October 2025, the company launched the BioDefense Veterans Initiative to address long-term effects of toxic burn pit exposure, partnering with Greenstone Biosciences for AI and iPSC development[41]. Market Position and Competition - The company is competing with larger pharmaceutical and biotechnology firms in the regenerative medicine sector, which is rapidly evolving[91]. - Competitors in regenerative medicine for disc and spine treatments include Mesoblast, Longeveron, BioRestorative Therapies, and DiscGenics[92]. - The healthcare industry is highly regulated in the U.S., with substantial requirements imposed by the FDA and other regulatory agencies on medical products[93].

Financial Uncertainty and Risk - The company is subject to a high degree of uncertainty and risk regarding future performance due to various factors, which could cause results to differ materially from estimates[16]. Whistler Project Overview - The Whistler Project is located approximately 170 km northwest of Anchorage, Alaska, and is governed by S-K 1300 standards for mining registrants[30]. - The technical report for the Whistler Project includes an economic analysis and was prepared by qualified persons, with an effective date of March 2, 2026[30]. Mineral Resource Classification - Indicated Mineral Resources involve greater uncertainty regarding their existence and economic feasibility compared to Proven and Probable Mineral Reserves[33]. - Inferred Mineral Resources have the highest level of geological uncertainty and cannot be considered for economic viability assessments[31]. - The company reports Indicated and Inferred Resources in compliance with both S-K 1300 and NI 43-101, with no material differences in the disclosed resources[33]. - The estimation of Indicated Mineral Resources is cautioned against being assumed to convert into compliant Mineral Reserves[33]. Compliance and Approval - The scientific and technical information regarding the Whistler Project has been reviewed and approved by the Chief Executive Officer, a qualified person under S-K 1300 and NI 43-101[34]. - The company has prepared its mineral property disclosures in accordance with S-K 1300 and NI 43-101, ensuring an appropriate level of confidence in the reported information[32]. Economic Viability - The economic extraction of Mineral Reserves must be justified by a preliminary feasibility study, which includes relevant mining and processing factors[22].

Business Transition and Strategy - FiEE, Inc. transitioned to a digital service provider focusing on AI and data analytics, launching customized software services in July 2025[16]. - The acquisition of Houren-Geiju Kabushikikaisha (HGK) for $3.5 million on November 30, 2025, enhances FiEE's capabilities in digital authentication services using AI and blockchain technology[17][42]. - FiEE's growth strategy emphasizes high-margin digital service models, with digital content services yielding higher gross margins and significant scalability potential in digital authentication services[32]. - The company plans to pursue strategic acquisitions in key sectors such as AI, hardware, and IoT to enhance its service offerings and establish a global community of Key Opinion Leaders[33]. - The company is actively planning to develop and integrate blockchain technology into its operations, enhancing security and efficiency[110]. - Future growth will depend on acquiring new customers and expanding SaaS, MCN digital services, and digital authentication services[114]. - The company is targeting potential acquisitions in key sectors such as AI, hardware, and IoT to strengthen technological capabilities and market presence[111]. Financial Performance - The company generated service fees of $6.2 million in 2025, achieving profitability after transitioning to a digital service provider[50]. - Total revenues increased by $5.6 million or 867.9% year-over-year, reaching $6,193,616 in 2025, primarily due to the transition to SaaS solutions[119]. - The company reported a net income of $1.1 million in 2025, with positive working capital of $2.4 million and cash of $3.1 million as of December 31, 2025, compared to $30 thousand in 2024[134]. - Basic earnings per common share improved to $0.12 in 2025 from a loss of $1.34 in 2024[199]. - Gross profit for 2025 was $5,353,598, compared to $207,259 in 2024, indicating a substantial improvement in profitability[199]. - Operating income for 2025 was $1,550,519, a turnaround from an operating loss of $4,235,576 in 2024[199]. - Cash provided by operating activities was $3,636,620 thousand in 2025, a significant improvement from cash used of $(3,772,008) thousand in 2024[138]. Customer and Revenue Sources - For the fiscal year ended December 31, 2025, approximately 75% of total accounts receivable was attributed to one customer, primarily from the acquisition of HGK, which accounted for about 1% of the company's revenue[28]. - The company generated substantially all of its revenue from customers located outside the U.S. for the fiscal year ended December 31, 2025[27]. - The company onboarded approximately 800 customers for SaaS – MCN digital services, generating total fees of $6.8 million, with $5.3 million recognized as revenue[120]. - Digital authentication services generated $329 thousand in revenue, serving one corporate client and 38 individual clients[122]. Operational Challenges and Risks - The company faces risks related to intensified market competition and rising customer acquisition costs as it develops its new business model[50]. - The company has a limited operating history in its current digital services business, making it difficult to evaluate future performance[51]. - The company may need to raise additional funds through equity or debt financing to support ongoing operations and expansion[53]. - The company has identified a material weakness in its internal control over financial reporting as of December 31, 2025, which could adversely affect financial reporting[65]. - The company is subject to stringent and evolving laws regarding data privacy and cybersecurity, which could result in significant fines and loss of customer trust[61]. - The company relies on AI and data analytics, exposing it to operational and ethical risks, including biased algorithms and potential legal liabilities[57]. - Historical losses and negative cash flows raise substantial doubt about the company's ability to continue as a going concern[178]. Stock and Market Information - Trading of FiEE's common stock resumed on Nasdaq on June 2, 2025, after regaining compliance with listing rules[35]. - The company previously faced Nasdaq delisting risk but resolved deficiencies and resumed trading on June 2, 2025, under the symbol "FIEE"[75]. - As of December 31, 2025, the company has satisfied all applicable Nasdaq continued listing requirements[75]. - The market price of the company's Common Stock is particularly volatile, which could lead to wide fluctuations in share price[85]. - The company is classified as a "smaller reporting company," which may make its Common Stock less attractive to investors[92]. Cybersecurity and Risk Management - The company has developed processes for assessing and managing cybersecurity risks, integrated into its overall enterprise risk management framework[95]. - The Board of Directors has primary responsibility for the oversight of cybersecurity risks, receiving annual reports from management[96]. - Significant cybersecurity matters are escalated to the Board of Directors as necessary[99]. Investments and Acquisitions - The company completed the acquisition of technology-related intangible assets, with a significant portion of the purchase price allocated to these assets[183]. - The company made significant investments in acquisitions, including $1,200,000 for Yixuntong and $3,487,304 for HGK[204]. - The Company entered into a Purchase Agreement with Helena to issue and sell up to $15 million of Common Stock, with the purchase price based on 95% of the lowest VWAP during the three trading days following receipt of the shares[152]. Shareholder Information - The company is authorized to issue 60,000,000 shares of Common Stock, and future funding is anticipated to be in the form of equity financing[88]. - The company has never declared or paid any cash dividends and does not intend to do so in the foreseeable future[90]. - The company issued 2,582,169 shares of common stock in 2025, raising $4,150,000 in capital[201].

Financial Performance - Net sales increased to $4.3 billion, an 8.1% increase over the comparable prior year period, driven by a 3.3% increase in same store sales on a constant currency basis and $114.4 million from new stores[82][87] - Operating profit decreased 1.2% to $698.5 million, negatively impacted by a $59.0 million unfavorable non-cash LIFO charge[82] - Net income decreased 3.9% to $468.9 million, with diluted earnings per share decreasing 2.3% to $27.63 for the quarter[82][93] - Gross profit for the twelve weeks ended February 14, 2026, was $2.2 billion, with a gross profit margin of 52.5%, down from 53.9% in the prior year due to a 138 basis point unfavorable non-cash LIFO charge[89] - For the twenty-four weeks ended February 14, 2026, net sales increased to $8.9 billion, an 8.2% increase, driven by a 4.0% increase in same store sales on a constant currency basis[94] Expenses and Costs - Operating, selling, general and administrative expenses for the twenty-four weeks ended February 14, 2026, were $3.1 billion, or 35.0% of sales, compared to 34.6% in the prior year[97] - Net interest expense was $213.5 million for the twenty-four weeks ended February 14, 2026, with average borrowings of $8.8 billion[98] - The effective income tax rate increased to 21.2% for the twenty-four weeks ended February 14, 2026, compared to 20.9% in the prior year[99] - The adjusted after-tax return on invested capital (ROIC) for the trailing four quarters ended February 14, 2026, was 37.6%, down from 45.5% in the prior year[108] - The accounts payable to inventory ratio was 110.9% at February 14, 2026, down from 118.2% at February 15, 2025, reflecting changes in working capital management[106] Cash Flow and Investments - Net cash flows used in investing activities for the twenty-four weeks ended February 14, 2026, were $667.5 million, up from $563.4 million in the prior year period, with capital expenditures increasing to $652.0 million from $539.7 million[103] - Net cash flows used in financing activities decreased to $642.9 million from $826.4 million in the prior year, with stock repurchases totaling $741.7 million compared to $866.5 million previously[104] - The company anticipates relying on internally generated funds and available borrowing capacity for capital expenditures and stock repurchases, with potential new borrowings as needed[107] Store Expansion and Growth Strategy - The company opened 117 net new stores during the twenty-four weeks ended February 14, 2026, compared to 79 in the prior year period, indicating a strong expansion strategy[103] - The company plans to increase investments in growth initiatives, including new stores and hub expansions, compared to fiscal 2025[105] Debt and Financial Position - The adjusted debt to EBITDAR ratio was 2.5:1 as of February 14, 2026, consistent with the prior year, indicating stable debt management[110] - The fair value of the Company's debt was estimated at $9.1 billion as of February 14, 2026, an increase from $8.9 billion as of August 30, 2025, representing a rise of 2.25%[130] - A net increase of $102.4 million in commercial paper was reported as of February 14, 2026, indicating a significant change in market-sensitive instruments[129] - The Company had $851.0 million of variable rate debt outstanding as of February 14, 2026, compared to $748.6 million as of August 30, 2025, reflecting an increase of 13.7%[130] - A one percentage point increase in interest rates would negatively impact pre-tax earnings and cash flows by $8.5 million in fiscal 2026 due to variable rate debt exposure[130] - The Company had outstanding fixed rate debt of $8.1 billion as of February 14, 2026, unchanged from August 30, 2025, with a potential fair value reduction of $304.8 million if interest rates rise by one percentage point[130] Lease and Rent Expenses - Total lease cost per ASC 842 for the trailing four quarters ended February 14, 2026, was $630.737 million, compared to $614.312 million for the same period ended February 15, 2025, reflecting a year-over-year increase of 2.5%[124] - Rent expense for the trailing four quarters ended February 14, 2026, was $478.652 million, up from $459.840 million for the same period ended February 15, 2025, indicating a growth of 4.1%[124] Tax and Financial Arrangements - The effective tax rate for the trailing four quarters ended February 14, 2026, was 20.4%, slightly higher than 20.3% for the same period ended February 15, 2025[125] - The company has arrangements with third-party financial institutions to confirm invoice balances owed to suppliers, which may impact working capital depending on supplier participation[106] - The net investment in tax credit equity investments was $9.7 million for the twenty-four weeks ended February 14, 2026, down from $37.4 million in the prior year[103]

Revenue and Profitability - Revenue for the year ended December 31, 2025, was $172.2 million, an increase of $32.1 million or 22.9% compared to $140.1 million in 2024, primarily driven by the acquisition of Star Operating Companies[189] - Gross profit for 2025 was $79.9 million, up $9.7 million or 13.9% from $70.2 million in 2024, with the acquisition contributing 12 percentage points to this growth[189] - Net loss attributable to common shareholders was $6.7 million for 2025, compared to a net loss of $4.8 million in 2024[189] - Gross profit for Business Services increased by $1.6 million, or 2%, driven by increases in both contracting and RPO gross profit[200] Expenses and Losses - SG&A and Non-Op other income (expense) totaled $82.8 million for 2025, compared to $72.6 million in 2024, with the acquisition increasing these expenses by $7.3 million[189] - Corporate expenses increased by $3.3 million, or 92%, to $6.9 million, primarily due to professional fees associated with the acquisition of Star Operating Companies[213] - Net loss attributable to common shareholders increased to $6.7 million for the year ended December 31, 2025, compared to a net loss of $4.8 million in 2024, representing a 39.6% increase[218] Segment Performance - The Building Solutions segment generated $27.6 million in revenue for 2025, reflecting a recovery from previous macroeconomic challenges and project delays[193] - The Energy Services segment experienced improved performance in 2025, supported by higher oil prices that contributed to increased customer activity[185] - Business Services revenue decreased by $0.4 million to $139.7 million, driven by a $0.8 million decrease in contracting revenue, partially offset by a $0.4 million increase in RPO revenue[198] - Energy Services contributed $4.9 million in revenue, reflecting a gradual recovery in drilling activity, with market share gains through competitive pricing[204] Cash Flow and Financial Position - Net cash used in operating activities was $7.3 million for the year ended December 31, 2025, an increase of $4.5 million from $2.8 million in 2024[220] - Cash and cash equivalents totaled $13.4 million as of December 31, 2025, down from $17.7 million as of December 31, 2024[219] - Net cash provided by investing activities was $4.6 million in 2025, compared to $1.1 million in 2024, reflecting $7.0 million received from the SOC acquisition[221] - Net cash used in financing activities decreased to $2.0 million in 2025 from $3.1 million in 2024, attributed to borrowing under credit facilities[222] Tax and Legal Matters - The effective tax rate for the year ended December 31, 2025 was negative 53%, compared to negative 37% for 2024, primarily due to pre-tax losses and changes in valuation allowances[217] - The Company had $0.2 million in legal reserves as of December 31, 2025, up from $0.0 million in 2024[229] - The Company had a gross liability for income taxes associated with uncertain tax positions of $0.1 million as of December 31, 2025[239] Strategic Outlook - The Company is exploring strategic alternatives to maximize shareholder value, including potential acquisitions and share repurchases[188] - Economic uncertainty and elevated interest rates have impacted market activity, contributing to wage pressures and higher operating costs[186] - The company identifies various risks and uncertainties that could materially affect future results, including global economic fluctuations and competition in the market[245] - The company is classified as a smaller reporting company and is not required to provide detailed market risk disclosures[246] Accounting and Business Combinations - Business combinations are accounted for under the acquisition method, requiring identifiable assets and liabilities to be recognized at fair value on the acquisition date[243] - Goodwill is recorded when the purchase price exceeds the net fair value of acquired assets and liabilities in business combinations[243] - Transaction costs are expensed in business combinations and included in the acquisition cost for asset acquisitions[243]

Revenue and Financial Performance - For the year ended December 31, 2025, the company recognized $106,855 in licensing and royalty revenue and $130,000 in non-recurring engineering revenue, compared to $81,855 and $13,750 respectively in 2024, indicating a significant increase in licensing and royalty revenue of 30.6%[262] - The net loss for the year ended December 31, 2025, was $20,313,797, a decrease of 10% from the net loss of $22,535,041 in 2024, attributed to lower development expenses[269] - The company anticipates that revenues recognized during 2026 will primarily relate to material supply and non-recurring engineering arrangements, with significant revenue from volume production expected no earlier than 2027[252] Expenses - The cost of sales for the year ended December 31, 2025, was $6,823, a slight decrease from $7,395 in 2024, reflecting a reduction of 7.7%[263] - Research and development expenses decreased by 32% to $11,489,687 in 2025 from $16,806,548 in 2024, primarily due to reductions in various development-related costs[264][265] - General and administrative expenses increased by 49% to $9,501,769 in 2025 from $6,370,805 in 2024, driven by higher salary and employee benefits expenses[264][267] Capital and Financing - The company has satisfied its capital requirements primarily through the issuance and sale of common stock, indicating a reliance on equity financing for operational funding[261] - The company completed a public offering of 11,666,667 shares at a price of $3.00 per share, raising approximately $32.8 million in net proceeds for working capital and corporate purposes[276] - The company raised $56,915,778 from financing activities in 2025, including proceeds from the Titan Offering and the Roth Sales Agreement[287] - The company received $18,785,657 in proceeds from the Roth Sales Agreement during the year ended December 31, 2025[278] - The company has a remaining availability of $12,235,261 under the Roth Sales Agreement as of the date of the filing[277] Cash Position and Expenditures - As of December 31, 2025, the company's cash and cash equivalents totaled $69,017,354, with total assets of $79,185,249 and stockholders' equity of $74,645,830[288] - Net cash used in operating activities for the year ended December 31, 2025, was $13,749,186, primarily due to a net loss of $20,313,797[285] - The company expects to incur approximately $2,400,000 in monthly expenditures over the next 12 months, totaling about $28.8 million[280] - The company anticipates that cash requirements will increase in line with revenue growth as it expands operations and commercialization efforts[281] - The company has no debt obligations and expects to maintain operations at least through December 2027 with its current cash position[281] Business Operations and Strategy - The company commenced commercial operations in May 2023, with a material supply license agreement for Perkinamine chromophore materials, marking a significant step in its commercialization strategy[244] - The company’s business model focuses on material sales and intellectual property licensing, without plans to manufacture finished optical transceivers or devices[240][245] - The Design Win Cycle, which guides customer programs from evaluation to production, typically spans approximately 18 to 24 months[259][260] - The company plans to use proceeds from the Titan Offering to accelerate commercialization and expand U.S. production capacity[276]

Revenue Performance - Consolidated net revenue for the year ended December 31, 2025, decreased by approximately 16.7% to $374.4 million compared to $449.7 million in 2024[184]. - Revenue from the Radio Broadcasting segment decreased by approximately $26.7 million, totaling $139.1 million in 2025, primarily due to weaker demand from advertisers[184]. - The Reach Media segment reported a revenue decline of approximately $16.1 million, generating $31.1 million in 2025, driven by decreased syndicated and event revenue[184]. - Digital segment revenue decreased by approximately $15.0 million to $47.8 million in 2025, attributed to lower direct revenue streams and national streaming revenue[184]. - Cable Television segment revenue decreased by approximately $17.1 million to $159.0 million in 2025, primarily due to subscriber churn and lower advertising sales[184]. - Net revenue for the year ended December 31, 2025, decreased significantly, impacting broadcast and digital operating income, which fell to approximately $92.4 million from approximately $140.2 million in 2024, a decrease of approximately $47.7 million or 34.1%[199]. - Net revenue for 2025 was $374.4 million, a decrease of 16.7% from $449.7 million in 2024[201]. Operating Performance - Total operating expenses increased by 3.7% to $544.5 million in 2025, with significant increases in impairment of goodwill and intangible assets by 26.4%[182]. - Operating loss for 2025 was $170.1 million, compared to a loss of $75.6 million in 2024, reflecting a significant increase in losses[182]. - Net loss from consolidated operations increased by 41.5% to $146.9 million in 2025, compared to $103.8 million in 2024[182]. - Broadcast and digital operating income fell to $92.4 million in 2025, down 34.1% from $140.2 million in 2024[201]. - Adjusted EBITDA decreased to $56.7 million in 2025, a decline of 45.4% compared to $103.5 million in 2024[202]. Expenses and Impairments - Selling, general and administrative expenses decreased to approximately $207.3 million for the year ended December 31, 2025, down from $224.8 million in 2024, a decrease of approximately $17.5 million[187]. - Stock-based compensation expense was approximately $1.9 million for the year ended December 31, 2025, compared to approximately $5.7 million in 2024, a decrease of approximately $3.8 million or 66.6%[188]. - Depreciation and amortization expense increased to approximately $18.1 million for the year ended December 31, 2025, from approximately $7.7 million in 2024, an increase of approximately $10.4 million[189]. - Impairment of goodwill and intangible assets was approximately $191.8 million for the year ended December 31, 2025, compared to approximately $151.8 million in 2024, an increase of approximately $40.1 million or 26.4%[190]. - The Company recognized an impairment loss of approximately $127.8 million within the Radio Broadcasting segment for the year ended December 31, 2025[276]. - An impairment loss of approximately $53.1 million was recognized for the Cable Television reporting unit as of December 31, 2025, attributed to declining revenue and macroeconomic conditions[263]. Debt and Financing Activities - The company repurchased approximately $96.7 million of its 2028 Notes at an average price of 53.6% of par during 2025[215]. - The company issued $291.0 million aggregate principal amount of 7.625% Second Lien Senior Secured Notes due 2031 as part of the 2025 Refinancing[216]. - The company issued $60.6 million aggregate principal amount of 10.500% First Lien Senior Secured Notes due 2030 on December 18, 2025[222]. - The company recorded a net gain on retirement of debt of approximately $44.0 million during the year ended December 31, 2025[215]. - The 2031 Second Lien Notes are secured on a second-lien priority basis by collateral owned by the Company and each guarantor[220]. Cash Flow and Liquidity - Net cash flows provided by operating activities decreased to approximately $4.2 million in 2025 from $37.5 million in 2024, primarily due to decreased profitability and timing of interest payments[239]. - Net cash flows used in investing activities increased to approximately $10.3 million in 2025 from $1.6 million in 2024, driven by capital expenditures of approximately $10.1 million in 2025[240]. - Net cash flows used in financing activities decreased to approximately $105.1 million in 2025 from $131.8 million in 2024, primarily due to reduced common stock and debt repurchase activity[241]. - The company’s borrowing capacity was approximately $40.3 million as of December 31, 2025, after drawing down on the Current ABL Facility[301]. Strategic Focus and Future Plans - The company plans to focus on growing market share and diversifying revenue through a multimedia strategy in 2026[169]. - The Company increased its ownership in Reach Media to 100% after purchasing the remaining 5.4% of non-controlling interest for $1.3 million on February 25, 2026[296]. Contractual Obligations and Leases - The company has scheduled contractual obligations totaling $728.8 million as of December 31, 2025, with significant payments due in 2026 ($108.3 million) and 2027 ($73.6 million)[297]. - The company has non-cancelable operating leases with obligations totaling $65.7 million over the next several years[291]. - Approximately $118.2 million of other operating contracts and agreements has not been recorded on the consolidated balance sheets as of December 31, 2025[300].

Revenue Performance - Consolidated net revenue for the year ended December 31, 2025, decreased by approximately 16.7% to $374.4 million from $449.7 million in 2024[184] - Revenue from the Radio Broadcasting segment decreased by approximately $26.7 million, totaling $139.1 million in 2025 compared to $165.8 million in 2024[184] - Revenue from the Reach Media segment decreased by approximately $16.1 million, totaling $31.1 million in 2025 compared to $47.3 million in 2024[184] - Digital segment revenue decreased by approximately $15.0 million, totaling $47.8 million in 2025 compared to $62.8 million in 2024[184] - Cable Television segment revenue decreased by approximately $17.1 million, totaling $159.0 million in 2025 compared to $176.1 million in 2024[184] Advertising Revenue - Local advertising accounted for 63.4% of the core radio business in 2025, up from 59.8% in 2024[174] - National advertising, including network advertising, accounted for 30.7% of the core radio business in 2025, down from 35.2% in 2024[174] Operating Expenses and Losses - Total operating expenses increased by 3.7% to $544.5 million in 2025 from $525.3 million in 2024[182] - The net loss from consolidated operations increased by 41.5% to $146.9 million in 2025 from $103.8 million in 2024[182] Strategic Focus - The company plans to focus on growing market share and diversifying revenue through a multimedia strategy in 2026[169] Expense Management - Selling, general and administrative expenses decreased to approximately $207.3 million for the year ended December 31, 2025, down from $224.8 million in 2024, a decrease of approximately $17.5 million[187] - Stock-based compensation expense was approximately $1.9 million for the year ended December 31, 2025, compared to approximately $5.7 million in 2024, a decrease of approximately $3.8 million or 66.6%[188] - Depreciation and amortization expense increased to approximately $18.1 million for the year ended December 31, 2025, from approximately $7.7 million in 2024, an increase of approximately $10.4 million[189] Impairment Charges - Impairment of goodwill and intangible assets was approximately $191.8 million for the year ended December 31, 2025, compared to approximately $151.8 million in 2024, an increase of approximately $40.1 million or 26.4%[190] - The Company recognized an impairment loss of approximately $127.8 million within the Radio Broadcasting segment for the year ended December 31, 2025, due to declining market conditions[276] - The Company recognized an impairment loss of approximately $3.9 million for the Radio Market reporting units as of May 31, 2025, due to a decline in revenues[250] - The Company recognized an impairment loss of approximately $6.6 million for the Digital reporting unit as of May 31, 2025, also due to declining revenues[257] - An impairment loss of approximately $53.1 million was recognized for the Cable Television reporting unit as of December 31, 2025, attributed to declining revenue and macroeconomic conditions[263] Cash Flow and Financing Activities - Net cash flows provided by operating activities decreased to approximately $4.2 million in 2025 from $37.5 million in 2024, primarily due to decreased profitability and timing of interest payments[239] - Net cash flows used in investing activities increased to approximately $10.3 million in 2025 from $1.6 million in 2024, driven by capital expenditures of approximately $10.1 million in 2025[240] - Net cash flows used in financing activities decreased to approximately $105.1 million in 2025 from $131.8 million in 2024, primarily due to reduced common stock and debt repurchase activity[241] Debt Management - The company repurchased approximately $96.7 million of its 2028 Notes at an average price of 53.6% of par during 2025, recording a net gain on retirement of debt of approximately $44.0 million[215] - The company issued $291.0 million in aggregate principal amount of 7.625% Second Lien Senior Secured Notes due 2031 as part of the 2025 Refinancing[216] - The company issued $60.6 million aggregate principal amount of 10.500% First Lien Senior Secured Notes due 2030 as part of the 2025 Refinancing[222] - The 2024 Stock Repurchase Program has been cancelled due to restrictions imposed in connection with the December 2025 Refinancing[210] Future Obligations - The total scheduled contractual obligations as of December 31, 2025, amount to $728.8 million, with significant payments due in 2026 ($108.3 million) and 2027 ($73.6 million)[297] - The company has non-cancelable operating leases with obligations totaling $65.7 million over the next several years[291] - Approximately $118.2 million of other operating contracts and agreements has not been recorded on the consolidated balance sheets as of December 31, 2025[300] Ownership and Equity - The company increased its ownership in Reach Media to 100% by purchasing the remaining 5.4% of non-controlling interest for $1.3 million[296] Tax and Effective Rate - The company recorded a benefit from income taxes of approximately $16.0 million on a pre-tax loss of $162.9 million for the year ended December 31, 2025, resulting in an annual effective tax rate of 9.8%[194]

Financial Performance - Net sales for the year ended December 31, 2025 were $161.7 million, a decrease of $27.1 million, or 14.4%, compared to $188.9 million for the year ended December 31, 2024[168]. - The Cultivation and Gardening segment reported net sales of $134.2 million for 2025, down from $163.5 million in 2024, primarily due to the closure of 19 retail locations and economic uncertainty[169]. - Gross profit was $43.3 million for 2025, a decrease of $0.4 million or 1.0% from $43.7 million in 2024, with a gross profit margin of 26.8%, an increase of 370 basis points from 23.1% in 2024[172][174]. - Operating expenses decreased by $26.8 million or 28.0% to $68.9 million in 2025, down from $95.7 million in 2024, primarily due to the closure of retail locations[175]. - The company reported a net loss of $24.0 million for 2025, a significant improvement from a net loss of $49.5 million in 2024, representing a year-over-year variance of $25.5 million or 51.4%[182]. - EBITDA for 2025 was $(14.3) million, an improvement from $(32.5) million in 2024, while Adjusted EBITDA was $(6.0) million compared to $(14.5) million in 2024[182]. Restructuring and Cost Management - GrowGeneration reported a total restructuring cost of approximately $3.5 million, with $1.1 million incurred in the year ended December 31, 2025, and $2.4 million in fiscal year 2024[155]. - The company expects annualized cost savings of approximately $12.0 million as a result of its restructuring activities[155]. - The company has implemented a strategic restructuring plan aimed at long-term profitability, including closing underperforming retail locations and reducing workforce[154]. - The company maintains strategies to mitigate inflation impacts on cost of sales and operating expenses, including cost reduction and passing certain cost increases to customers[207]. Asset Management and Acquisitions - The company acquired substantially all assets of Viagrow for $1.3 million on June 6, 2025, including $1.0 million in cash and $0.2 million in common stock[185]. - The company has diversified its product offerings through the acquisition of Hydro Generation Inc. (Viagrow), enhancing its reach to new customers[147][159]. Operational Overview - As of December 31, 2025, GrowGeneration operated 23 retail locations across 10 states, having closed eight locations during the year[151]. - The Cultivation and Gardening segment focuses on proprietary brands and has been consolidating assets within the fragmented hydroponics industry to leverage efficiencies[149]. - The Storage Solutions segment, branded as "Mobile Media," provides customized storage solutions and aims to expand its customer base in various industries, including controlled environment agriculture[152][160]. - Management believes that the company has the largest chain of specialty retail hydroponic and organic garden centers in the U.S.[159]. Cash Flow and Financing - Net cash used in operating activities for the year ended December 31, 2025, was $9.4 million, an increase from $1.8 million in 2024, primarily due to changes in operating assets and liabilities[188]. - Net cash provided by investing activities increased to $12.6 million in 2025 from $5.7 million in 2024, driven by investments in marketable securities totaling $35.7 million and acquisitions of $1.0 million[189]. - Net cash used in financing activities decreased significantly to $0.2 million in 2025 from $6.2 million in 2024, mainly due to common stock withheld for employee payroll taxes[190]. - The company may require additional financing through equity offerings or debt financings in the future to support its growth strategies, but management believes it is adequately funded for at least one year from the filing date[186]. Impairment and Risk Management - A goodwill impairment loss of $5.9 million was recorded in 2024 due to changes in business and future projections, while no impairment was necessary in 2025[199]. - The company did not identify any events indicating impairment of long-lived assets for the year ended December 31, 2025[202]. - The qualitative assessment for goodwill impairment in 2025 did not identify any indicators of impairment for the two reporting units with remaining goodwill balances[198]. - The company has no material exposure to interest rate risk from investments, as excess cash is primarily invested in short-term money market funds and fixed-income securities[206]. - The company regularly reviews accounting estimates and assumptions for reasonableness based on historical experience and market-specific factors[191]. Trade Policy Impact - Cost increases from U.S. trade policy changes have impacted less than 10% of the total cost of goods sold, which the company has partially offset through improved purchasing leverage and price adjustments[146].