Financial Performance - Net income rose by $2.9 million, or 53.1%, to $8.3 million for the year ended December 31, 2025, compared to $5.4 million for the year ended December 31, 2024[188]. - Net income increased by $2.9 million, or 53.1%, to $8.3 million for the year ended December 31, 2025, compared to $5.4 million for 2024[208]. - Noninterest income decreased by $91,000, or 4.5%, to $1.9 million for the year ended December 31, 2025[218]. - Income tax expense increased to $2.9 million for the year ended December 31, 2025, compared to $1.5 million for 2024, attributed to increased income before income taxes[221]. Asset and Liability Management - Total assets increased by $14.9 million, or 1.7%, to $881.7 million at December 31, 2025, from $866.8 million at December 31, 2024[187]. - Gross loans increased by $28.6 million, or 4.0%, to $742.7 million at December 31, 2025, with consumer loans rising by $15.2 million, or 12.6%[197]. - Total deposits increased by $21.5 million, or 3.2%, to $695.0 million at December 31, 2025, with savings accounts growing by $20.9 million, or 27.5%[199]. - Cash and cash equivalents increased by $12.4 million, or 30.0%, to $53.9 million at December 31, 2025, primarily due to deposit growth[196]. - The loan-to-deposit ratio at December 31, 2025, was 106.9%, compared to 106.0% at December 31, 2024[199]. - The company had outstanding commitments to originate loans of $72.0 million as of December 31, 2025[237]. Interest Income and Expenses - Interest income increased by $3.0 million, or 6.3%, to $51.0 million for the year ended December 31, 2025, driven by a $3.5 million increase in interest income on loans[188]. - Interest income rose by $3.0 million, or 6.3%, to $51.0 million for the year ended December 31, 2025, from $48.0 million in 2024[209]. - Interest expense increased by $1.1 million, or 5.7%, to $19.9 million for the year ended December 31, 2025[212]. - Net interest income before provision for credit losses increased by $2.0 million, or 6.8%, to $31.1 million for the year ended December 31, 2025[215]. - Total interest-earning assets increased by $45.2 million, or 5.5%, to $868.0 million for the year ended December 31, 2025[215]. - Net interest margin was 3.59% for the year ended December 31, 2025, compared to 3.54% for 2024[215]. Expenses and Efficiency - Noninterest expenses decreased by $2.1 million, or 8.7%, to $21.7 million for the year ended December 31, 2025[188]. - Non-interest expenses decreased by $2.1 million, or 8.7%, to $21.7 million for the year ended December 31, 2025, from $23.8 million for 2024, primarily due to a decrease in other expenses, specifically merger-related expenses[220]. - Total non-interest expenses included salaries and employee benefits of $12.904 million, a decrease of 1.7% from $13.126 million in 2024[220]. Capital and Liquidity - Stockholders' equity decreased by $2.1 million, or 1.6%, to $127.0 million at December 31, 2025, impacted by $8.8 million in dividends paid and $5.9 million in common stock repurchases[201]. - The company maintained a liquidity ratio of 12.0% or greater, with compliance at December 31, 2025, and 2024[231]. - The company is categorized as well capitalized and exceeded all regulatory capital requirements as of December 31, 2025[236]. Risk Management - Provision for credit losses recorded was $125,000 for the year ended December 31, 2025, compared to $438,000 for 2024[217]. - Allowance for credit losses to total loans was 1.21% at December 31, 2025, compared to 1.19% at December 31, 2024[217]. - The estimated net interest income for a 400 basis point increase in interest rates is projected to be $29.935 million, reflecting an 8.27% decrease from the current level[228]. - The company does not engage in hedging activities such as futures or options, focusing instead on managing interest rate risk through various strategies[224]. Borrowings - The company had a $50.6 million line of credit with the Federal Home Loan Bank of Atlanta, with $54.0 million in borrowings as of December 31, 2025[231].

Finance Receivables Segment - The Finance Receivables segment has executed transactions with 58 different parties, funding an aggregate of approximately $876.1 million in various financial products across the life science sector [24]. - The company focuses on transactions under $50 million, filling an underserved niche in the market, which results in less competition [23][31]. - The majority of finance receivables transactions are structured similarly to factoring transactions, providing capital in exchange for an interest in existing revenue streams [26]. - Capital provided to partners is generally used for growth, working capital, acquisitions, or recapitalizations, with full funding for transactions up to $25 million [26][27]. - The company aims to maximize portfolio total return while managing risk, generating income from interest, fees, and potential equity-like returns [25]. - The Finance Receivables segment is the primary focus following the sale of substantially all assets of the Pharmaceutical Development Segment in Q3 2025 [177]. - As of December 31, 2025, the finance receivables portfolio contains $218.6 million of net finance receivables, expected to generate positive cash flows in 2026 [210]. - The majority of the finance receivables portfolio consists of debt instruments with floating interest rates, which may be affected by changes in market interest rates [210]. - The company continuously monitors the financial position of its finance receivables portfolio to manage risks effectively [210]. Competition and Market Risks - The company faces competition from larger financial institutions and funds, which may have lower costs of capital and greater resources [31][45]. - The performance of the Finance Receivables segment is significantly dependent on the underlying performance of partner companies, which are subject to various financial risks [58]. - The pharmaceutical industry faces numerous risks, including competition and extensive government regulation, which can adversely affect the ability to market existing products and develop new ones [51]. - Limited access to information about privately-held royalty streams may hinder informed investment decisions, increasing the risk of financial loss [59]. - A rise in reference rates could increase the debt servicing costs for partner companies, potentially impairing their ability to meet obligations [67]. - Economic downturns could increase non-performing assets and decrease the value of collateral securing loans, adversely impacting the company's financial results [129]. - Public health crises could disrupt the company's operations and those of partner companies, affecting capital raising and increasing credit risk [126][127]. Regulatory and Compliance Risks - The healthcare and life sciences industries are subject to extensive government regulation, which could adversely affect sales levels and operations [47]. - The commercial success of pharmaceutical products is heavily reliant on adequate reimbursement from governmental and third-party payors, which can be compromised by changes in coverage policies or payment delays [48]. - Regulatory approval processes for pharmaceutical products require substantial resources and can take many years, affecting the company's ability to generate revenue [72]. - Changes in FDA regulations may increase the time and cost for partner companies to conduct clinical trials, impacting their ability to market products [135][136]. - Changes in healthcare laws and regulations may increase compliance costs for partner companies, potentially impacting their profitability and operations [139]. - The company must ensure compliance with the Investment Company Act of 1940 to avoid being classified as an investment company, which could adversely affect operations [106]. Financial Condition and Performance - The company had $42.8 million in cash and cash equivalents and an additional $10.0 million available to borrow under a new credit facility as of December 31, 2025 [88]. - The company may not be able to generate sufficient cash to service all of its debt obligations, which could force it to take other actions that may not be successful [93]. - The company may face substantial liquidity problems if cash flow from operating activities is insufficient to meet debt service obligations, potentially leading to asset sales or restructuring of debt [94]. - The company is subject to interest rate risk, which could impact income depending on the difference between borrowing and lending rates [217]. - The company does not currently engage in interest rate hedging activities, which may expose it to risks from interest rate fluctuations [216]. - The company has $2.5 million in unfunded commitments as of December 31, 2025 [213]. - The company reported a GAAP balance of $23.5 million for 4Web, Inc. with a revenue recognized of $4.3 million [179]. - Revenues decreased to $41.5 million for the year ended December 31, 2025, down from $45.0 million in 2024, representing a decline of $3.5 million [198]. - General and administrative expenses increased to $14.8 million in 2025 from $11.5 million in 2024, primarily due to higher compensation and legal costs [204]. - Income tax expense rose significantly to $22.6 million in 2025 from $4.9 million in 2024, attributed to reduced realizability of deferred tax assets [206]. Cybersecurity and Data Privacy - Cybersecurity incidents pose a risk to the company's information technology systems, potentially compromising data integrity and impacting financial condition [114]. - The company has implemented cybersecurity measures, but there is no assurance that these will be sufficient to prevent or address potential incidents [115]. - The company experienced a cybersecurity incident in January 2025, where an employee's email was compromised, leading to fraudulent payment redirection [116]. - The company is subject to evolving privacy and data security laws, with potential fines for non-compliance, including the California Consumer Privacy Act (CCPA) which imposes stringent obligations [117][119]. - The Department of Justice's January 2025 rule restricts data brokerage transactions involving sensitive personal data to certain countries, including China, with potential criminal and civil penalties for violations [118]. - The company has implemented a cybersecurity risk management process for third-party vendors to assess their cybersecurity maturity [164]. - The Audit Committee oversees the management of cybersecurity risks, receiving periodic reports from senior management [166]. - The Company has not identified any cybersecurity incidents that materially affected its business or financial condition [164]. Management and Governance - The company is dependent on key management personnel for its success, and the loss of any key personnel could materially affect its business [82]. - As of December 31, 2025, funds affiliated with Carlson owned 75.1% of the company's common stock, allowing them significant influence over management and policies [99]. - The company has a Stockholders' Agreement with Carlson that grants them approval rights over specific transactions, including incurring debt and asset sales [100]. - The board of directors has the authority to issue up to 5 million shares of preferred stock, which could complicate potential acquisitions [103]. - The company is involved in ongoing merger litigations alleging misleading proxy statements related to the merger agreement [169]. Mergers and Acquisitions - Stockholders will experience a reduction in percentage ownership and voting power in the combined company as a result of the Mergers [142]. - The announcement and pendency of the Mergers could disrupt business operations and negatively impact future revenues [144]. - The Mergers are subject to closing conditions, including stockholder approval, which if not satisfied, could prevent completion and adversely affect business operations [149]. - The market price of RWAY common stock may fluctuate significantly after the Mergers, potentially affecting the value of investments [159]. - The fair value of investments may not align with figures reported in pro forma filings, which could misrepresent financial health [160]. Other Financial Metrics - The provision for credit losses recognized a benefit of $0.9 million in 2025, compared to an expense of $12.8 million in 2024, marking a decrease of $13.7 million [199]. - Pharmaceutical manufacturing, research and development expenses decreased from $2.2 million in 2024 to $1.6 million in 2025, a reduction of $0.6 million due to asset sales [201]. - Interest expense remained stable at $4.8 million in 2025, consistent with the previous year [200]. - The change in fair value of acquisition-related contingent consideration resulted in a gain of $4.9 million in 2024, which was not realized in 2025 [202]. - The loss on impairment decreased to $0.6 million in 2025 from $5.8 million in 2024, reflecting improved asset management [196]. - Other income (expense), net shifted to an expense of $0.2 million in 2025 from income of $6.8 million in 2024, a change of $7.0 million due to revaluation losses [205].

Clinical Development - The company is advancing PALI-2108, a once-daily oral PDE4 inhibitor prodrug, towards a Phase 2 clinical study in ulcerative colitis (UC) to evaluate clinical remission response and pharmacodynamic biomarkers over 12 weeks [24]. - The Phase 1 clinical study of PALI-2108 has completed dosing of 89 subjects, with positive results reported for safety, tolerability, and pharmacokinetics [39]. - The exploratory Phase 1b cohort in fibrotic strictures of Crohn's disease (FSCD) is expected to evaluate safety, tolerability, pharmacokinetics, and pharmacodynamics over a 14-day treatment period [40]. - The company plans to submit Investigational New Drug Applications (IND) to the FDA for Phase 2 studies in UC and CD in 2026 [42]. - The company has commenced a Phase 1 clinical trial for PALI-2108 in Canada, with positive results reported from various cohorts [196]. - The lead clinical product candidate, PALI-2108, may face regulatory approval challenges due to potential undesirable side effects [211]. - Clinical trials could be suspended or terminated if unacceptable severity and prevalence of side effects are revealed, adversely affecting business and financial condition [212]. - Regulatory approval for PALI-2108 requires significant development, clinical testing, and substantial financial investment, with no assurance of success [214]. Market Overview - The market for ulcerative colitis (UC) treatments was valued at approximately $7.3 billion in 2021 and is expected to grow to over $9.5 billion by 2031, reflecting a compound annual growth rate (CAGR) of approximately 2.78% [43]. - Diagnosed incident cases of UC in the eight major markets (8MM) are projected to increase from 160,122 cases in 2021 to 168,467 cases by 2031, with an annual growth rate (AGR) of 0.52% [43]. - The global market for Crohn's disease (CD) treatments was valued at $13.9 billion in 2022 and is projected to grow to approximately $25.5 billion by 2032, with a CAGR of approximately 6% [45]. - Diagnosed incident cases of CD in the 8MM are expected to increase from 118,885 cases in 2022 to 122,175 cases by 2032, reflecting an AGR of 0.28% [44]. Regulatory Environment - The FDA requires extensive monitoring and auditing of all clinical activities and data during all phases of clinical development [87]. - Phase 3 clinical trials, referred to as pivotal studies, typically require two adequate and well-controlled trials for NDA approval, although one may suffice with supporting evidence [88]. - The FDA reviews an NDA within 60 days to determine if it is substantially complete before accepting it for filing [100]. - The FDA may impose restrictions on product distribution and require post-marketing clinical trials for approved products [105]. - The FDA has performance goals under the PDUFA, aiming to review standard NDAs in ten months and priority NDAs in six months [106]. - The FDA has various expedited programs to facilitate the development and review of drugs for serious or life-threatening conditions [107]. - IND safety reports must be submitted within seven calendar days for unexpected fatal or life-threatening adverse reactions [89]. - Compliance with cGMP regulations is mandatory for manufacturers to ensure consistent production of pharmaceutical products [94]. - The FDA may refuse to file any NDA deemed incomplete or not properly reviewable at the time of submission [100]. - The FDA may require a REMS to ensure the safe use of a product candidate if deemed necessary [102]. - The Fast Track program allows expedited review for new drugs and biologics intended to treat serious conditions, with increased FDA interactions during development [108]. - Priority review designation can reduce FDA review time to six months from the standard ten months for drugs showing significant safety or effectiveness improvements [110]. - Accelerated approval may be granted for drugs that provide meaningful advantages over existing therapies, based on surrogate endpoints or earlier clinical endpoints [111]. - Breakthrough therapy designation offers intensive guidance and expedited development for drugs showing substantial improvement over existing therapies [112]. - The FDA's Commissioner's National Priority Voucher pilot program aims to accelerate reviews for products addressing key national health priorities, with targeted review completion within 1-2 months [113]. - Post-approval requirements include annual user fees and compliance with cGMP regulations, emphasizing quality control and safety [116]. Intellectual Property - The company has exclusive rights to one pending patent application in the U.S. and six pending applications internationally related to PALI-2108 [73]. - A Notice of Allowance for the patent covering PALI-2108 was issued by the China National Intellectual Property Administration in July 2025 [73]. - The expected expiration date of the patent related to LB1148 is 2031, excluding any adjustments or extensions [77]. - The Hatch-Waxman Amendments allow for patent term extensions of up to five years for drugs lost during development and FDA review, with a maximum total patent life of 14 years [128]. - New Chemical Entity (NCE) exclusivity provides five years of non-patent marketing exclusivity for the first approved drug containing an NCE [134]. - A drug may obtain a three-year exclusivity for a new indication if new clinical trials were essential for approval [135]. - Orphan drug exclusivity grants seven years of market protection for drugs approved for rare diseases affecting fewer than 200,000 individuals in the U.S. [138]. - Pediatric exclusivity can extend marketing protection by six months if pediatric research is conducted as requested by the FDA [139]. Financial and Operational Considerations - The company has not yet established a commercial organization or distribution capabilities for potential product candidates [55]. - The company relies on third parties for clinical supply and manufacturing of its product candidates, including PALI-2108 [56][60]. - LBS engages a network of third-party CDMOs and CMOs to ensure quality and compliance in drug development and manufacturing [58]. - The company expects to have sufficient capital to fund operations through major clinical development milestones, including a Phase 2 primary efficacy readout of PALI-2108 for UC expected in the second half of 2027 [207]. - The company faces challenges in patient enrollment for clinical trials, which could delay or prevent trial completion [205]. - The company must navigate evolving data privacy laws, such as the California Consumer Privacy Act (CCPA), which may increase compliance costs and potential liabilities [164]. - The company faces risks related to data security and privacy regulations, which are rapidly changing and could impose significant operational costs [161]. - The implementation of cost containment measures may adversely affect the company's ability to generate revenue and achieve profitability [154]. Competitive Landscape - LBS faces competition from large pharmaceutical companies and emerging biotech firms in the IBD treatment space, impacting market share [65][66]. - The company’s product candidates, if approved, would compete with established therapies such as TNF antibodies and JAK inhibitors for moderate-to-severe IBD [69][70]. Legislative and Policy Changes - The U.S. healthcare system is undergoing significant reforms aimed at controlling costs and improving access, which may impact the profitability of pharmaceutical products [146]. - The Affordable Care Act (ACA) includes provisions that affect pharmaceutical manufacturers, such as Medicaid rebates and annual fees on branded drugs, which could influence revenue streams [147]. - The Inflation Reduction Act (IRA) mandates price negotiations for high Medicare spend drugs starting in 2026, potentially affecting pricing strategies and revenue [149]. - Legislative changes, including the establishment of the "Department of Government Efficiency," may lead to operational disruptions and delays in FDA approvals, impacting product development timelines [150]. - The current administration's executive orders focus on lowering drug prices and increasing competition, which may create additional pricing pressures for pharmaceutical companies [151]. - State-level regulations are increasingly controlling drug pricing and reimbursement, which could lead to reduced revenue from both government and private payors [154]. - Compliance with government pricing programs, such as the Medicaid Drug Rebate program and the 340B Drug Pricing program, imposes financial obligations on manufacturers that could affect profitability [155][156]. Subsidiaries and Agreements - The company has two wholly owned subsidiaries, with one, Suzhou Neuralstem Biopharmaceutical Co., Ltd., currently in the process of dissolution [182]. - The company issued contingent value rights (CVRs) entitling holders to 80% of net proceeds from the sale or licensing of legacy technology, with no payments made to CVR holders to date [183]. - The company has an exclusive license for NSI-189 assets, with a purchase option that was early exercised by Alto Neuroscience [184]. - Alto is required to pay up to $4.5 million upon achieving certain development and regulatory approval milestones for ALTO-100, with a maximum aggregate payment of $5.0 million under the ATA [186]. - A milestone payment of $1.5 million will be due from Alto upon the enrollment of a patient in a Phase 3 clinical trial of ALTO-100 [187]. - The University of Michigan will bear 100% of the costs for patent filing and maintenance related to NSI-532.IGF-1, with the company receiving 50% of net revenues from licensing [188].

Financial Performance - As of December 31, 2025, 95.3% of total deposits were held in transaction accounts, with a cost of funds of 0.32%[42] - The loan portfolio consisted of 73.2% in residential real estate loans, 17.6% in commercial real estate loans, 1.6% in commercial loans, and 7.6% in consumer loans[63] - The company has reported no non-performing assets since June 30, 2012, and has incurred cumulative net loan charge-offs of $265 thousand since inception[39] - The company serves deposit clients across 49 states, the District of Columbia, and Puerto Rico, with approximately 37.2% of total deposits from the District of Columbia[61] Product Offerings - The company launched its own branded business credit card program in Q4 2023, offering both secured and unsecured credit lines[66] - The company offers secured credit cards to political committees, ensuring compliance with FEC regulations[72] - The company provides letters of credit to commercial borrowers, including political organizations, to meet security deposit requirements[74] Client Focus and Growth Strategy - The company emphasizes services designed to attract commercial clients managing high transaction volumes, including digital onboarding and treasury management offerings[41] - The company has historically grown organically, with many new business opportunities arising from word-of-mouth referrals[50] - The company focuses on clients in less saturated sectors, such as political organizations, to develop its banking capabilities[50] Risk Management - The company actively monitors credit risk, interest rate risk, liquidity risk, price risk, and operational risk as part of its risk management strategy[79] - The company has established interest rate risk policies and an Asset-Liability Committee (ALCO) that meets quarterly to manage interest rate risk[535] - Interest rate fluctuations significantly impact the company's net interest income and overall financial condition, with the potential for material adverse effects[532] Regulatory Environment - The Dodd-Frank Act has significantly impacted the financial services industry, requiring substantial regulatory and compliance changes[96] - The Economic Growth, Regulatory Relief and Consumer Protection Act of 2018 provides regulatory relief for financial institutions with less than $10 billion in total consolidated assets[97] - The Bank must comply with Basel III Capital Rules, requiring a common equity Tier 1 capital ratio of at least 4.50% plus a 2.50% capital conservation buffer, resulting in a minimum of 7.00%[103] - The Company is currently treated as a "small bank holding company" with less than $3 billion in total consolidated assets, exempt from certain capital rules[102] - The Company must obtain prior approval from the Federal Reserve for significant acquisitions or changes in control, which will consider the impact on competition and community needs[114] Compliance and Security - The company has implemented a compliance training program for employees to mitigate compliance risk[87] - The Company is subject to several federal laws designed to combat money laundering, including the Bank Secrecy Act and the USA PATRIOT Act[130] - The Company must comply with the Office of Foreign Assets Control regulations, which include blocking accounts of prohibited parties and reporting blocked transactions[132] - The Company is required to provide customers with information regarding its policies on handling personal information under privacy legislation[133] - The CFPB adopted a rule requiring payment account providers to make certain data available to consumers upon request, with a compliance date for the Bank set for April 1, 2030[134] - The Company must implement multiple layers of security controls to address cybersecurity risks as per federal regulatory guidance[141] - Effective April 1, 2022, banking organizations must notify regulators of significant cybersecurity incidents within 36 hours of discovery[142] - The Company faces constant threats from cybersecurity attacks, with risks expected to remain high due to evolving threats and increased use of technology-based services[144] Capital and Dividends - The Company's ability to pay dividends is restricted by the Delaware General Corporation Law and Federal Reserve policy, which requires dividends to be paid from income available over the previous four quarters[109] - The Bank has not opted into the Community Bank Leverage Ratio (CBLR) framework, which allows banks with less than $10 billion in assets to maintain a 9% leverage ratio[106] Community Engagement - The Bank was rated "outstanding" in its most recent Community Reinvestment Act evaluation received on February 24, 2025[128] - The revised CRA rules, if implemented, could make it more challenging for the Bank to maintain its current rating of "outstanding" or receive at least a "satisfactory" rating[129] Employee and Organizational Structure - The company employs 92 full-time employees as of December 31, 2025, with no employees under collective bargaining agreements[84] - The company prioritizes internal promotion and invests in human capital through training and development programs[86] - The Trust & Wealth Department commenced operations in Q3 2020, offering fiduciary services and is subject to OCC supervision[75] Interest Rate Sensitivity - As of December 31, 2025, the company had a total one-year cumulative gap in rate-sensitive assets of $937.9 million and rate-sensitive liabilities of $616.5 million, indicating that assets will reprice before liabilities[534] - The company's interest rate risk analysis shows that a 400 basis points increase in rates could lead to a 23.00% increase in net interest income by December 31, 2025, while a decrease of the same magnitude could result in a 22.87% decrease[538] - For the immediate scenario, a 400 basis points increase in rates could lead to a 49.00% increase in net interest income by December 31, 2025, while a decrease could result in a 46.37% decrease[538] - The fair value of equity is projected to decrease by 11.85% with a 400 basis points increase in rates as of December 31, 2025, and decrease by 11.85% with a 400 basis points decrease[540] - The company utilizes interest rate risk models and rate shock simulations to assess sensitivity of net interest income and economic value of equity[536] - The company is asset-sensitive, indicating that net interest income is expected to increase as interest rates rise and decrease as rates fall[538] - Changes in interest rates do not typically occur uniformly, but the company's analysis aids in understanding potential impacts on net interest income[538] Investor Relations - The company maintains an investor relations website providing access to financial reports and SEC filings[146]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 (Exact name of registrant as specified in its charter) Delaware 77-0312442 (State or other jurisdiction of incorporation or organization) FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ ...

Financial Performance - Revenue for the year ended December 31, 2025, was $391.55 million, with time charter equivalent revenue of $265.42 million, reflecting a Daily TCE Rate of $52,823 [529]. - The Daily TCE Rate decreased from $59,281 in 2023 to $52,823 in 2025, indicating a decline in average daily revenue performance [529]. - Vessel operating expenses for 2025 totaled $45.24 million, with daily vessel operating expenses, including management fees, at $9,753 [530]. Market Conditions - The BDTI reached a high of 1,468 and a low of 799 during 2025, indicating significant volatility in charter rates [511]. - The ongoing war in Ukraine has led to increased economic uncertainty, affecting ton-mile demand and operating expenses in the tanker market [512]. - Inflation has impacted vessel operating expenses, with rising insurance costs anticipated to continue over the next few years [517]. - The U.S. government imposed a baseline tariff of 10% on imports, which may lead to retaliatory tariffs and increased volatility in the tanker market [518]. - The geopolitical tensions in the Middle East, including the conflict between Israel and Hamas, have raised security risks and may affect shipping demand [514]. Operational Metrics - As of December 31, 2025, the company reported calendar days of 5,110 and operating days of 5,025, resulting in a fleet utilization rate of 98% [528]. - The company has not experienced material impacts from supply chain disruptions related to the military conflict in Ukraine and does not expect future material effects [513]. Accounting Policies - The company applies IFRS as issued by the IASB in its primary financial statements, thus not required to discuss critical accounting estimates in this section [531]. - For detailed information on critical accounting judgments and key sources of estimation uncertainty, refer to Note 5 in the annual audited consolidated financial statements [531].

IPO and Financing - The company completed its IPO on December 12, 2025, raising gross proceeds of $172.5 million from the sale of 17,250,000 units at $10.00 per unit[19]. - An additional 4,500,000 private placement warrants were sold at $1.00 each, generating gross proceeds of $4.5 million[20]. - The total amount of $172.5 million from the IPO proceeds was placed in a Trust Account, which can only be released under specific conditions related to the initial Business Combination[22]. - The company may need additional financing to complete its initial Business Combination if the transaction requires more cash than available in the Trust Account[24]. - The company has approximately $750,000 of proceeds held outside the Trust Account to cover liquidation costs, with an additional potential release of up to $100,000 in accrued interest[63]. - The company may need to borrow funds from its Sponsor or management team if the net proceeds from the IPO and Private Placement Warrants are insufficient[104]. - Up to $1,500,000 of loans from the Sponsor may be convertible into Private Placement Warrants at a price of $1.00 per warrant[105]. Business Combination Strategy - The company intends to pursue a Business Combination with a target business that has an aggregate fair market value of at least 80% of the Trust Account assets[28]. - The company aims to leverage Bluerock's extensive network and industry experience to identify high-quality acquisition targets[25]. - The selection criteria for target businesses include robust growth prospects, recurring revenues, and experienced management teams[33]. - The company plans to conduct thorough due diligence on prospective target businesses, including financial and operational reviews[34]. - The timeline and costs associated with identifying and completing a Business Combination are currently uncertain, which may impact available funds for future transactions[35]. - The company may attempt to complete multiple Business Combinations simultaneously, which could increase costs and risks[155]. - The company may pursue Business Combination opportunities outside of its management's areas of expertise, which could affect the evaluation of potential risks[133]. Shareholder Rights and Redemption - Public Shareholders will have the opportunity to redeem their shares at a price initially anticipated to be $10.00 per Public Share, based on the amount in the Trust Account[49]. - If the cash consideration required for redemptions exceeds available cash, the initial Business Combination will not be completed[51]. - Shareholder approval for the initial Business Combination requires a majority vote, and a quorum is established with one-third of issued shares present[43]. - The company may conduct redemptions through a tender offer, which must remain open for at least 20 business days[46]. - The redemption rights will not be affected by whether shareholders vote for or against the initial Business Combination[49]. - The company will redeem Public Shares at a price equal to the aggregate amount in the Trust Account divided by the number of outstanding Public Shares if the initial Business Combination is not completed within the Completion Window[60]. - Shareholders are restricted from seeking redemption rights for more than 15% of Public Shares without prior consent, aimed at preventing large block accumulations[59]. - The company will not allow amendments to its memorandum and articles of association that affect redemption rights without providing shareholders the opportunity to redeem their shares[62]. Conflicts of Interest - Management and independent directors own Founder Shares and Private Placement Warrants, which may create conflicts of interest in selecting acquisition targets[37]. - The company may sponsor or form other special purpose acquisition companies, potentially leading to additional conflicts of interest[39]. - The underwriters are entitled to deferred underwriting commissions, which may create conflicts of interest in providing additional services related to the initial Business Combination[89]. - The company may engage in Business Combinations with affiliated entities, which could present potential conflicts of interest[146]. - The Company does not have employment contracts with its officers and directors that limit their ability to work at other businesses, potentially leading to conflicts of interest[202]. - The Company’s officers and directors may have competitive pecuniary interests that conflict with the Company’s interests, as there is no policy prohibiting such interests[203]. Regulatory and Compliance Risks - The company is classified as a "shell company" with no operations or revenue generated to date, holding nominal assets primarily in cash[18]. - The company is classified as an "emerging growth company," allowing it to take advantage of certain exemptions from reporting requirements, including not needing to comply with auditor attestation requirements[73]. - The company is also a "smaller reporting company," which allows it to provide only two years of audited financial statements until certain market value thresholds are met[76]. - The company is subject to new SEC SPAC Rules that require additional disclosures and may increase costs and time needed to complete a Business Combination[113][115]. - Compliance with the SPAC Rules may constrain the circumstances under which the company could complete an initial Business Combination[115]. - The company is obligated to offer Public Shareholders the right to redeem their shares for cash at the time of the initial Business Combination[102]. - The company is subject to evolving regulatory measures, which have increased compliance costs and risks of non-compliance[193]. Market and Economic Conditions - The ongoing geopolitical tensions, particularly the Russia-Ukraine conflict, may adversely affect the company's ability to identify and consummate an initial Business Combination due to market volatility and disruptions[125]. - Increased competition among special purpose acquisition companies (SPACs) may lead to a scarcity of attractive targets, raising costs and complicating the completion of Business Combinations[168]. - The financial services industry may face adverse developments that could impact the company's liquidity and financial condition, particularly if funds are held in banks that experience issues[170]. - Economic and political conditions in the country of operations could significantly impact the company's business and ability to find attractive target businesses[196]. Financial and Operational Risks - The company may incur substantial debt to complete a Business Combination, which could negatively impact shareholders' investment value[151]. - The company may only complete one Business Combination with the proceeds from the IPO, leading to a lack of diversification and increased operational risks[152]. - The company may face significant dilution if additional third-party financing is required due to unexpected redemption requests[85]. - The probability of an unsuccessful initial Business Combination increases if cash in the Trust Account is insufficient to meet purchase price requirements, potentially delaying shareholder liquidity[86]. - The management of a target business may not possess the necessary skills to manage a public company, potentially impacting post-combination operations[178]. - The departure of key personnel from an acquisition candidate post-transaction could negatively impact operations and profitability[175]. - The company may face complex tax obligations and burdensome tax structures as a result of its initial Business Combination, potentially impacting shareholders and warrant holders[181]. Shareholder Influence and Voting - Initial shareholders own 25% of the issued and outstanding ordinary shares, and their agreement to vote in favor of the initial Business Combination increases the likelihood of approval[81]. - If the initial Business Combination requires shareholder approval, a simple majority of votes cast is needed, which could be as low as 33.3% of the Public Shares sold in the IPO[81]. - The absence of a specified maximum redemption threshold may enable the company to complete an initial Business Combination even if a substantial majority of shareholders disagree[157]. - The non-managing Sponsor investors are not required to hold or vote their shares, which may affect the outcome of the initial Business Combination[211]. Miscellaneous - The company has not yet selected a specific target business for its initial Business Combination, making it difficult to evaluate potential risks and merits[131]. - The company’s business plan focuses on acquiring and growing businesses for the long term rather than trading in securities[118]. - The company has authorized the issuance of up to 500,000,000 Class A Ordinary Shares, with 17,250,000 currently outstanding[138]. - The company may issue additional Class A Ordinary Shares or preference shares to complete its initial Business Combination, which could dilute existing shareholders' interests[140]. - The company’s securities are listed on Nasdaq, but there is no assurance that they will continue to be listed prior to the initial Business Combination[213].

Revenue Performance - For the year ended December 31, 2025, Cheetah reported revenue of $1,288,536, an increase of $832,731, or 182.7%, compared to $455,805 in 2024[2] - Revenue from Edward Transit Express Group Inc. decreased by 32.2% to $214,810 in 2025, compared to $316,852 in 2024, due to reduced customer demand and shipment volume[5] - Revenue from TW & EW Services Inc. increased substantially to $1,073,726 in 2025, compared to $138,953 in 2024, attributed to a full year of revenue generation[6] - Revenue for 2025 reached $1,288,536, a significant increase from $455,805 in 2024, representing a growth of approximately 182.5%[32] Operating Loss and Expenses - The company recorded an operating loss of $4,579,576 for 2025, an increase of $839,030, or 22.4%, from the operating loss of $3,740,546 in 2024, primarily due to an impairment loss of $731,307[2] - Total operating expenses increased to $4,746,351 in 2025 from $3,919,058 in 2024, reflecting a rise of approximately 21.2%[32] - General and administrative expenses for continuing operations were $3,627,426, a decrease of $14,287, or 0.4%, compared to $3,641,713 in 2024[9] Profitability Metrics - Gross profit for 2025 was $166,775, a decrease of $11,737, or 6.6%, from $178,512 in 2024[8] - The net loss for 2025 was $3,649,703, an improvement compared to a net loss of $5,188,852 in 2024, showing a reduction of about 29.7%[32] - The company reported a net loss from continuing operations of $3,649,703 for 2025, compared to a net loss of $3,232,194 in 2024, representing an increase of $417,509, or 12.9%[14] - Loss from continuing operations per share improved to $(1.12) in 2025 from $(1.65) in 2024, indicating a decrease in loss per share of approximately 32.1%[32] Cash Flow and Financial Position - As of December 31, 2025, the company had cash and cash equivalents of approximately $0.2 million and a working capital balance of $7.7 million[21] - Cash used in operating activities for 2025 was $(2,075), a significant decline from $242,220 in 2024[35] - Net cash used in investing activities was $(1,341,816) in 2025, compared to $(6,130,932) in 2024, showing a reduction of approximately 78.0%[35] - The net increase in cash for 2025 was $(1,417,745), contrasting with an increase of $1,217,964 in 2024[35] - Cash inflows from discontinued operations were $2,487,601 in 2025, down from $3,698,138 in 2024, reflecting a decrease of about 32.7%[35] Interest Income - Interest income from continuing operations was $924,224 in 2025, an increase of $603,752, or 188.4%, compared to $320,472 in 2024[12] - Interest income rose to $924,224 in 2025 from $320,472 in 2024, marking an increase of approximately 188.3%[32] Strategic Outlook - The company plans to continue evaluating strategic opportunities, including potential partnerships, investments, or acquisitions to support long-term growth[3]

Financial Performance - Total revenue for the fiscal year ended January 31, 2026, was $4.7 billion, representing a year-over-year growth of 29% from $3.6 billion in 2025[31] - The number of total customers increased to 13,328 as of January 31, 2026, up from 10,996 in 2025, with 790 of these being from the Forbes Global 2000, contributing approximately 43% of total revenue[30] - The net revenue retention rate was 125% as of January 31, 2026, indicating significant expansion in usage among existing customers[30] - The number of customers generating over $1 million in trailing 12-month product revenue rose from 576 in 2025 to 733 in 2026[30] - The company has historically seen higher order volumes in the fourth fiscal quarter, impacting cash flow and performance obligations positively during this period[59] Research and Development - The company plans to continue investing in research and development to enhance its platform, with new capabilities like Snowflake Intelligence and Snowpark Connect for Apache Spark becoming generally available[37] - As of January 31, 2026, the research and development organization employed 2,424 individuals, with ongoing investments planned to expand platform capabilities[55] Global Expansion and Strategy - The company aims to expand its global footprint, particularly in EMEA, APJ, and Latin America, to capitalize on increasing public cloud adoption[37] - The company is focused on driving customer growth by replacing legacy solutions and enhancing collaboration capabilities through strategic partnerships[37] - The company’s partnership strategy focuses on enhancing functionality and performance through collaborations with system integrators and technology partners[53] Platform Capabilities - The platform supports a multi-cloud strategy across 53 regional deployments, allowing organizations to optimize cloud costs and meet regulatory requirements[38] - The AI Data Cloud is designed to eliminate data silos, enabling organizations to share and access data seamlessly across various sources[33] - The platform's architecture is built on a multi-cluster, shared data model, ensuring high availability and scalability across public clouds[42] - The platform supports full ACID compliant transactional integrity, ensuring data consistency even with concurrent usage by multiple users[47] - The platform enables data replication across regions or public clouds while maintaining transactional integrity, enhancing business continuity[50] - The platform supports semi-structured and unstructured data, enabling ingestion and querying with performance comparable to structured data[47] - The platform's compute clusters can be instantiated in seconds, allowing for high concurrency and optimized performance for various workloads[47] Financial Position and Investments - As of January 31, 2026, the company held approximately $4.8 billion in cash, cash equivalents, and short-term and long-term investments[371] - The company issued an aggregate principal amount of $2.3 billion in Notes in September 2024, which do not bear regular interest[373] - As of January 31, 2026, the company's strategic investments totaled approximately $380.6 million, an increase from $301.2 million as of January 31, 2025[379] - A hypothetical 100 basis point increase or decrease in interest rates would have resulted in a decrease of $11.7 million or an increase of $11.4 million in the market value of cash equivalents and investments as of January 31, 2026[371] - A hypothetical 10% increase or decrease in foreign currency exchange rates would have resulted in a theoretical increase or decrease in operating loss of approximately $50 million for the fiscal year ended January 31, 2026[376] Compliance and Intellectual Property - The company has more than 1,050 issued U.S. patents and over 320 U.S. patent applications pending as of January 31, 2026[66] - The company has more than 800 registered or protected trademarks in foreign jurisdictions as of January 31, 2026[66] - Compliance with existing or future governmental regulations could have a material impact on the company's business in future periods[69] - The company utilizes foreign currency forward contracts to hedge against foreign currency exchange risks, which mature within 12 months[375] - The company plans to continue strategic investments as part of its corporate development program, anticipating additional volatility in its consolidated statements of operations[380]

Market Conditions and Risks - The tanker industry is cyclical and volatile, which may adversely affect Scorpio Tankers' earnings and available cash flow [28]. - As of March 19, 2026, 72 vessels were employed in the spot market or spot market-oriented tanker pools, exposing the company to fluctuations in spot market charter rates [35]. - The newbuilding orderbook as of February 13, 2026, equaled approximately 18% of the existing world tanker fleet, indicating potential oversupply risks [38]. - A decline in oil and natural gas prices for an extended period could negatively affect future growth in the tanker sector, impacting demand for services [34]. - The company is dependent on spot-oriented pools and spot charters, and any decrease in spot charter rates may adversely affect earnings [35]. - The ability to renew expiring charters or obtain new charters will depend on prevailing market conditions, which could affect revenues and profitability [36]. - Increased tanker capacity due to new deliveries without corresponding demand could lead to a decline in charter rates, adversely impacting financial results [38]. - The company faces risks related to geopolitical events, which may disrupt energy production and trade patterns, affecting tanker rates [28]. - Fluctuations in charter rates and vessel values are influenced by external factors, including supply and demand for oil and petroleum products [28]. - The company may incur impairment charges due to declines in charter rates and other market deterioration [29]. - Volatility in global economic conditions historically correlates with demand for vessels, with declines in economic activity leading to reduced demand and profitability [47]. Regulatory and Compliance Risks - Compliance with complex environmental regulations may increase operational costs and liabilities, affecting financial condition and cash flows [53]. - Non-compliance with international safety regulations could lead to increased liability and potential denial of access to certain ports, adversely affecting operations [57]. - Cybersecurity regulations require companies to implement additional procedures and may incur extra expenses, impacting operational costs [59]. - The Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships will enter into force in June 2025, requiring ships to carry an inventory of hazardous materials, potentially increasing compliance costs [61]. - Regulatory requirements may lead to cost escalation by shipyards and recycling yards, decreasing the residual recycling value of vessels, which could adversely affect future performance and cash flows [63]. - Increased inspection procedures could result in cargo seizures, delays, and additional customs duties, negatively impacting operational efficiency and financial condition [67][68]. - Compliance with sanctions and embargo laws is critical, as violations could lead to monetary fines and reputational damage, impacting the market for the company's securities [81]. - The company must comply with complex laws and regulations, including environmental regulations, which could adversely affect operations and financial condition [117]. Geopolitical and Economic Factors - The military conflict between Russia and Ukraine has led to sanctions affecting the trade of refined petroleum products, which may adversely impact financial condition and results of operations [70]. - Recent drone and missile attacks on commercial vessels in the Red Sea could disrupt trade routes and significantly impact the global oil markets [71]. - Trade protectionism may increase shipping costs and risks, adversely affecting charterers' ability to make timely payments and renew contracts [72]. - The potential for additional tariffs or restrictions on trade due to changing U.S. trade policies could have an adverse effect on business operations and financial results [73]. - Acts of piracy continue to pose risks to ocean-going vessels, particularly in vulnerable regions, which could adversely affect business operations [78]. - The ongoing conflict in Ukraine and sanctions against Russia may restrict the company's operations and cargo, negatively affecting business performance [84]. - The recent military conflict in Iran has disrupted major trading routes, significantly impacting crude oil and petroleum product prices, which may adversely affect the company's financial condition [183]. - The ongoing US-Israel conflict has created significant volatility in oil tanker demand, with potential disruptions in the Strait of Hormuz affecting trading patterns and freight volatility [206]. - Russian oil exports have declined due to escalating sanctions and operational challenges, with significant impacts expected on total output due to prolonged underinvestment [213]. Financial Performance and Projections - The company reported a revenue of $9.9 billion for the quarter, reflecting a year-over-year growth of 9% [185]. - The company provided a future outlook, projecting a revenue growth of 10% for the next quarter, driven by new product launches and market expansion strategies [185]. - The gross margin for the quarter was reported at 68%, indicating strong operational efficiency [185]. - The company aims to reduce operational costs by 5% through improved supply chain management [185]. - The company declared a quarterly cash dividend of $0.45 per common share on February 11, 2026, payable on March 20, 2026 [177]. - The company may face volatility in cash available for dividends due to operational expenses and liabilities, impacting distribution capabilities [132]. Fleet Management and Operations - The company operates a fleet of 90 wholly owned tankers, including 34 LR2, 42 MR, and 14 Handymax vessels, with a weighted average age of approximately 10.1 years [173]. - The company has 17 vessels on long-term time charter-out agreements, with 72 out of 90 owned vessels employed through Scorpio Pools as of March 19, 2026 [109]. - The company employs a chartering strategy that includes commercial pools, time charters, and spot market exposure to optimize vessel utilization and revenue [187]. - The commercial pools enhance vessel utilization rates by securing backhaul voyages and contracts of affreightment, leading to higher effective TCE revenues [188]. - The company operates in the Scorpio Pools, which provides a collaborative platform for securing employment for vessels, enhancing revenue stability [190][194]. - The company has entered into time charters for various vessels, with rates ranging from $21,000 to $40,000 per day, ensuring stable cash flow over the contract periods [4][5][10][16][17][21]. Strategic Initiatives and Investments - Investment in new technology development was highlighted, with a budget allocation of $1.4 billion for R&D in the upcoming fiscal year [185]. - A strategic acquisition was announced, with the company acquiring a competitor for $500 million to enhance its product offerings [185]. - The company introduced two new products, which are expected to contribute an additional $300 million in revenue over the next year [185]. - The company plans to opportunistically enter more vessels into time charter contracts, potentially including profit-sharing agreements to benefit from rising spot market rates [191]. - Newbuilding vessels are under construction, with deliveries expected in 2026 and 2027, which will expand the fleet and enhance operational capacity [23][24][25]. Environmental, Social, and Governance (ESG) Factors - Increasing scrutiny on Environmental, Social, and Governance (ESG) practices may impose additional costs and affect access to capital, potentially harming the company's reputation [100]. - The company may face pressures to implement stringent ESG standards to retain investor interest, particularly in the crude oil transportation sector [102]. - The company may face limitations in accessing equity and debt capital markets due to ESG factors, which could adversely affect growth plans and financial condition [103]. - The company has established sustainability goals related to shipping decarbonization, but achieving these goals may involve uncertainties and potential negative publicity if not met [104]. - Unfavorable ESG ratings and activism against fossil fuel-related assets could lead to negative investor sentiment and impact access to capital [105].