Financial Viability - The company has not yet achieved profitability and does not expect to do so in the near future [25]. - The company is an early development-stage entity with no revenues, raising substantial doubt about its ability to continue as a going concern [22]. - The company will need to raise additional financing to continue operations, indicating significant liquidity needs [32]. Product Development Risks - The success of future product candidates, including Telomir-1, is critical and will require significant capital resources and years of clinical development [28]. - There is a high rate of failure for drug candidates in clinical trials, which poses a risk to the company's product development [35]. - The company relies on third parties for conducting clinical trials, which may affect its ability to develop and commercialize product candidates [36]. Regulatory and Market Challenges - The regulatory approval processes with the FDA are lengthy and inherently unpredictable, impacting the timeline for product commercialization [34]. - The company has limited marketing experience and does not anticipate establishing a sales force or distribution capabilities in the near term [29]. - The company faces intense competition from other firms with greater resources and experience [31]. Merger Risks - The merger with TELI Pharmaceuticals, Inc. presents risks due to TELI's limited operating history and significant liquidity needs [38].

Revenue and Profitability - Revenue for Q4 2025 was $56.8 million, a 69% increase from Q4 2024[6] - Gross profit for Q4 2025 was $24.2 million, up 38% from Q4 2024[6] - Full-year 2025 revenue reached $172.2 million, a 23% increase from 2024[6] - Full-year 2025 adjusted EBITDA was $4.2 million, compared to $0.9 million in 2024[6] - Building Solutions revenue for Q4 2025 was $18.0 million, with adjusted EBITDA of $1.9 million[8] - Full-year 2025 Business Services revenue was $139.7 million, slightly down from $140.1 million in 2024[11] - Energy Services revenue for full-year 2025 was $4.9 million, with adjusted EBITDA of $1.0 million[12] - Total revenues for the three months ended December 31, 2025, were $56,793,000, compared to $33,600,000 for the same period in 2024, representing a 69% increase[33] - Building Solutions segment generated revenues of $17,975,000 for the three months ended December 31, 2025, with Business Services contributing $35,207,000[33] - Gross profit for the year ended December 31, 2025, was $79,869,000, up from $70,152,000 in 2024, indicating an increase of 14%[33] - For the year ended December 31, 2025, total revenue from external customers reached $172,159 million, with a gross profit of $79,869 million[39] Expenses and Losses - Operating expenses for the three months ended December 31, 2025, totaled $24,318,000, compared to $17,729,000 in the same period of 2024, reflecting a 37% increase[33] - Net loss attributable to common shareholders for the year ended December 31, 2025, was $6,657,000, compared to a loss of $4,770,000 in 2024[33] - The company reported a basic loss per share of $1.85 for the year ended December 31, 2025, compared to a loss of $1.59 in 2024[33] - The net loss attributable to common shareholders for the same period was $2,382 million, compared to a net loss of $585 million for the three months ended December 31, 2024[37] - The adjusted net loss for the three months ended December 31, 2025, was $347 million, resulting in an adjusted diluted loss per share of $0.10[47] - The company reported a net loss of $1,709 million for the three months ended December 31, 2025, with a diluted loss per share of $0.48[47] Cash and Assets - The company ended Q4 2025 with $13.4 million in cash, including $3.1 million in restricted cash[17] - Cash and cash equivalents decreased to $10,269,000 as of December 31, 2025, down from $17,011,000 in 2024[35] - Total assets increased significantly to $113,231,000 as of December 31, 2025, compared to $52,583,000 in 2024, marking a 115% growth[35] - Total liabilities rose to $47,524,000 as of December 31, 2025, compared to $12,155,000 in 2024, indicating a 291% increase[35] - The company has a total stockholders' equity of $65,707,000 as of December 31, 2025, up from $40,428,000 in 2024, reflecting a 62% increase[35] Adjusted Metrics - Adjusted EBITDA for the three months ended December 31, 2025, was $2,208 million, while for the year ended December 31, 2025, it was $4,191 million[37][39] - The adjusted net loss attributable to common shareholders for the year ended December 31, 2025, was $641 million, equating to an adjusted diluted loss per share of $0.20[47] - The pro forma adjusted net income attributable to common shareholders for the year ended December 31, 2025, was $4,965 million, leading to a pro forma adjusted diluted income per share of $1.35[51] Transaction Costs and Other Income - The company incurred transaction costs related to mergers and acquisitions amounting to $371 million for the three months ended December 31, 2025[37] - The company incurred transaction costs related to mergers and acquisitions totaling $5,004 million in 2025, compared to $1.646 million in 2024, indicating increased activity in this area[41] - Interest income for the year ended December 31, 2025, was $449 million, reflecting the company's investment activities[39] - Interest income for 2025 was $1.249 million, consistent with the previous year, reflecting stable financial management[41] - The company reported dividends on Series A perpetual preferred stock of $740 million for the year ended December 31, 2025[47] Foreign Currency and Taxation - The company experienced a foreign currency gain of $303 million for the year ended December 31, 2025, contributing positively to its financial results[39] - The company reported a foreign currency gain of $303,000 in 2025, compared to a gain of $161,000 in 2024, indicating improved currency management[41] - The provision for income taxes in 2025 was $330,000, a decrease from $1.576 million in 2024, suggesting better tax efficiency[41] Depreciation and Amortization - The company reported total depreciation and amortization of $884 million for the three months ended December 31, 2025, and $2,078 million for the year ended December 31, 2025[37][39] - Total depreciation and amortization expenses for 2025 amounted to $5.618 million, slightly higher than $5.668 million in 2024[41]

Financial Performance - The company reported a significant increase in revenue, achieving $XX million for the quarter, representing a YY% year-over-year growth[7]. - The company has incurred losses since inception, with a net loss of $KK million reported for the last fiscal year, raising concerns about future profitability[20]. - The company has incurred losses since inception and may continue to do so, raising concerns about achieving profitability[21]. User Metrics - User data showed an increase in active users, reaching ZZ million, which is a growth of AA% compared to the previous quarter[7]. Future Guidance - The company provided guidance for the next quarter, projecting revenues between $BB million and $CC million, indicating a growth rate of DD%[7]. - New product launches are expected to contribute an additional $EE million in revenue over the next fiscal year, with a focus on expanding the ClearPoint system and IRRAflow system[20]. Acquisitions and Market Presence - The recent acquisition of IRRAS is anticipated to enhance market presence and is expected to generate synergies of approximately $FF million annually[20]. - The acquisition of IRRAS may not yield the anticipated benefits, potentially impacting the company's performance and stock price[20]. Research and Development - The company is investing $GG million in R&D to develop innovative technologies aimed at improving neurosurgery outcomes[20]. Market Expansion - Market expansion efforts are underway in Europe and Asia, targeting a market size estimated at $HH billion, with a projected growth rate of II%[20]. Customer Risks - The company reported a customer concentration risk, with the top three customers accounting for JJ% of total revenue, which could impact future performance[20]. - Revenue could be significantly affected if the company fails to maintain or establish new relationships with drug delivery customers[20]. Regulatory Challenges - The company is facing significant regulatory challenges that could impact the approval timelines for new products, potentially delaying market entry[20]. - The company is subject to various regulatory risks that could impact its ability to operate and grow, including compliance with FDA regulations[21]. Business Risks - The company faces significant risks and uncertainties that could adversely affect its business, financial condition, and results of operations, including general economic conditions and customer concentration risks[20]. - The market size for the company's current and future products may be smaller than estimated, affecting growth potential[20]. - The success of the ClearPoint and IRRAflow systems is contingent on achieving broad market adoption, which remains uncertain[20]. - Future growth relies on the company's ability to effectively market and sell its product platforms and manage a combined commercial team[20]. Financial Flexibility - The company currently has significant debt and may incur additional debt, which could restrict operational flexibility[21]. Dividend Policy - The company has not paid dividends in the past and does not expect to pay dividends in the future, which may affect investor returns[23].

Revenue and Client Relationships - Harte Hanks generated 10.5% of total revenues from its largest client in 2025, with the largest 25 clients accounting for 68.3% of total revenue[37] - The company’s revenue streams tend to be higher in the fourth quarter due to increased activity in the retail and healthcare verticals[45] - Approximately 9.5% of the company's revenues were derived from operations outside the United States, primarily in Europe and Asia, indicating potential for international expansion[77] Financial Performance - Operating revenue for the year ended December 31, 2025, was $159.6 million, a decrease of $25.6 million or 13.9% compared to $185.2 million in 2024[132] - Revenue in the Revenue Solutions segment declined by $15.2 million or 30.2% to $35.1 million; Fulfillment & Logistics Services revenue decreased by $7.6 million or 9.3% to $74.4 million; Customer Care segment revenue fell by $2.9 million or 5.4% to $50.1 million[133] - Operating expenses for 2025 were $159.2 million, down $24.0 million or 13.1% from $183.1 million in 2024[134] - The net loss for 2025 was $811, a decrease of 97.3% compared to a net loss of $30,297 in 2024[132] - Diluted EPS from operations for 2025 was $(0.11), down 97.4% from $(4.15) in 2024[132] Cost Management and Restructuring - The company expects restructuring cost reductions from "Project Elevate" to be approximately $16.0 million during 2024 through 2025, with total restructuring charges of $1.8 million and $2.4 million incurred in 2025 and 2024, respectively[36] - The company is implementing "Project Elevate" to optimize its cost structure, but may not achieve all identified savings, which could adversely affect financial results[70] - Labor costs decreased by $12.9 million or 13.8% due to optimized operations and reduced salary and wages[134] Operational Strategy and Services - Harte Hanks operates in six service categories: data, marketing, sales, customer care, fulfillment, and logistics, addressing growth and customer experience challenges for B2B and B2C businesses[21] - The company leverages a proprietary DataView tool, providing a 360-degree customer view with over 1,500 attributes for accurate predictive marketing[27] - Harte Hanks' fulfillment and logistics services support enterprise-level supply chain management and eCommerce scalability, enhancing customer experience and optimizing cost efficiencies[29] - The company provides a flexible outsourcing marketing operations solution known as "Marketing as a Service," which integrates various marketing functions[27] Technology and Innovation - The proprietary logistics technology, Allink®360, optimizes freight costs and delivery timelines, ensuring on-time and within-budget shipments[39] - The company has developed proprietary software, including NexTOUCH and Allink 360, which are integral to its business operations[54] - The company is positioned to help clients navigate challenges in a cookie-restricted digital environment, enhancing awareness, demand, and sales for products[24] Human Capital and Compliance - The company’s human capital strategy emphasizes training and talent development, with a commitment to providing various learning opportunities[56] - The company is subject to numerous local, national, and international laws regulating direct marketing activities, including privacy and data security[47] - The company faces risks associated with compliance to evolving privacy and data protection regulations, which could increase operational costs and impact service offerings[84] Market Risks and Competition - The company faces intense competition in the B2B services industry, with significant risks related to client retention and market dynamics[62] - Competitors may have significantly greater financial resources, leading to pricing pressures that could negatively impact the company's margins and results of operations[65] - Reduced marketing budgets from clients due to economic conditions could lead to decreased demand for the company's products and services[69] Financial Liabilities and Risks - The company has approximately $23.0 million in unfunded pension liabilities as of December 31, 2025, which may impact future results of operations and cash flows[99] - Interest rate fluctuations could materially affect the company's cash flows and financial position, particularly regarding its Credit Facility[74] - Inflation has negatively impacted the company's financial condition, particularly through rising labor costs and service charges from third-party providers[75] Cybersecurity and Data Management - The company has experienced cybersecurity incidents in the past, and failure to prevent future breaches could lead to lawsuits, loss of customers, and reputational harm[90] - The company has implemented robust processes to manage cybersecurity risks, overseen by its Chief Security Officer and Risk Steering Committee[107] - The company relies heavily on data centers and telecommunications infrastructure, and any significant disruptions could materially affect its ability to provide services, resulting in loss of revenues and client confidence[89] Accounting and Financial Reporting - The financial statements were prepared in conformity with accounting principles generally accepted in the United States of America[214] - The company evaluated its internal control over financial reporting and concluded it was effective as of December 31, 2025[184] - The company is currently evaluating the impact of new accounting standards on its consolidated financial statements[176] - The audit was conducted in accordance with PCAOB standards, ensuring the reliability of the financial statements[216]

Financial Performance - Revenue for the three months ended January 31, 2026, was $24.552 million, a 62.5% increase from $15.090 million in the same period of 2025[15] - Gross profit for the three months ended January 31, 2026, was $12.906 million, compared to $6.547 million in the prior year, reflecting a 96.2% increase[15] - Total operating expenses for the three months ended January 31, 2026, were $47.671 million, up from $27.148 million in the same period of 2025, representing a 75.7% increase[15] - The net loss for the three months ended January 31, 2026, was $34.166 million, compared to a net loss of $21.759 million in the same period of 2025, indicating a 56.9% increase in losses[15] - For the nine months ended January 31, 2026, the company reported a net loss of $92,777 thousand, compared to a net loss of $62,703 thousand for the same period in 2025, indicating an increase in losses of approximately 48%[34] - The net loss attributable to common shareholders for the three months ended January 31, 2026, was $34,166, compared to a net loss of $24,833 for the same period in 2025, representing a year-over-year increase of 37%[115] - For the nine months ended January 31, 2026, the net loss attributable to common shareholders was $92,777, compared to $70,791 for the same period in 2025, reflecting a year-over-year increase of 31%[115] Cash and Liquidity - Cash and cash equivalents as of January 31, 2026, were $291.321 million, an increase from $237.595 million as of April 30, 2025[13] - The company reported cash and cash equivalents of $291,321 thousand as of January 31, 2026, providing a liquidity buffer[33] - Cash used in operating activities for the nine months ended January 31, 2026, was $62,983 thousand, up from $53,552 thousand in 2025, reflecting a 17.9% increase in cash outflow[34] - The Company believes existing cash and cash equivalents will fund planned operating expenses and capital expenditures for at least the next 12 months[37] Assets and Liabilities - Total assets as of January 31, 2026, were $379.342 million, compared to $295.744 million as of April 30, 2025, marking a 28.3% increase[13] - Total liabilities as of January 31, 2026, were $91.353 million, slightly up from $90.338 million as of April 30, 2025[13] - As of January 31, 2026, the company had an accumulated deficit of $613,026 thousand, highlighting ongoing financial challenges[34] - The Company’s long-term debt was $42,261, slightly up from $41,098 as of April 30, 2025, an increase of 2.8%[81] Shareholder Information - The weighted-average shares of common stock outstanding for the three months ended January 31, 2026, were 55,848,413, compared to 19,885,382 in the same period of 2025[15] - The Company had 58,349,053 Common Shares issued and outstanding as of January 31, 2026, an increase from 51,348,656 as of April 30, 2025, representing a growth of 13.6%[89] - The basic and diluted net loss per share attributable to common shareholders for the three months ended January 31, 2026, was $(0.61), compared to $(1.25) for the same period in 2025, showing an improvement of 51.2%[115] Research and Development - The company reported a significant increase in research and development expenses, totaling $4.972 million for the three months ended January 31, 2026, compared to $3.353 million in the same period of 2025, a 48.3% increase[15] - The company continues to focus on expanding the commercialization of its ASSURE WCD and related products as part of its Cardiac Recovery System platform[9] - The company entered into a strategic collaboration agreement with Biobeat Technologies, Ltd., which includes research and development funding of up to $2,000 contingent upon achieving specified milestones[116] Investment Activities - The company incurred a net cash used in investing activities of $30,571 thousand for the nine months ended January 31, 2026, compared to $15,904 thousand in 2025, indicating increased investment activity[23] - The company made a $5,000 equity investment in Biobeat's Series B financing, measured at cost and included in Other long-term assets[116] Compensation and Employee Benefits - Share-based compensation expense for the nine months ended January 31, 2026, was $23,340 thousand, significantly higher than $1,958 thousand in the same period of 2025[23] - The Company sponsors a 401(k) Plan for full-time employees, with matching and discretionary contributions totaling $1,628 for the nine months ended January 31, 2026[112] Accounting and Compliance - The Company is evaluating the impact of several new accounting standards, including ASU 2025-05, which addresses credit losses for accounts receivable[63] - The Company has provided a full valuation allowance against its net deferred tax assets as of January 31, 2026, indicating they are not likely to be realized[108] Market and Risk Factors - There have been no material changes to the company's market risk during the nine months ended January 31, 2026[187]

Revenue Generation - Gaxos.AI generated revenues of $1,933,030 for the year ended December 31, 2025, with $1,509,886 from RNK Health providing non-clinical services[180] - Revenue from health coaching packages was $1,124 in 2025, compared to $3,952 in 2024, indicating a significant increase in service offerings[180] - Subscription services from Art-Gen.ai, UnGPT.ai, and Bible.ai applications generated $421,995 in revenue in 2025[180] - Total revenues for the year ended December 31, 2025, were $1,933,030, a decrease of 52.0% compared to $4,027 in 2024[181] Operating Expenses - Operating expenses increased by $3,141,924, or 84.7%, totaling $6,849,556 for the year ended December 31, 2025[183] - General and administrative expenses rose to $5,855,885, an increase of 116.0% from $2,711,145 in 2024[186] - Advertising and marketing expenses surged by $2,715,433, or 739.2%, reaching $3,082,784 in 2025[190] - Research and development fees decreased slightly by $2,816, or 0.3%, amounting to $993,671 in 2025[184] Financial Performance - The company reported a loss from operations of $4,916,526 for 2025, an increase of 32.7% from $3,703,605 in 2024[194] - Net loss attributable to common shareholders was $3,900,583, with a net loss per share of $0.55, compared to a net loss of $3,418,197 and $1.92 per share in 2024[196] - Net cash used in operations for 2025 was $3,853,757, compared to $3,280,397 in 2024[203] Cash and Financing - As of December 31, 2025, the company had a cash balance of $840,799 and working capital of $11,919,230[198] - The company plans to pursue additional financing to support its growth strategy and research and development efforts[209] Business Initiatives - Gaxos Labs launched a generative AI service in September 2024, reducing creative asset development time from hours to minutes for game developers[165] - The company launched UnGPT.ai in May 2025, enhancing AI-generated text to sound more natural and human-like[166] - Art-Gen.AI, launched in August 2025, allows users to create professional-grade content quickly and cost-effectively[167] - Gaxos Health initiative aims to provide personalized health optimization solutions using AI-driven insights and biometric data[168] - RNK Health, a subsidiary formed in September 2024, holds a 70% membership interest and focuses on marketing health-related products[170] - Gaxos Gaming launched five proprietary games by December 31, 2025, integrating AI for personalized gaming experiences and NFT minting[172] Regulatory and Compliance - The company has chosen to take advantage of the extended transition periods available to emerging growth companies under the JOBS Act for complying with new or revised accounting standards[214] - The company will remain an "emerging growth company" until it has total annual gross revenues of $1.07 billion or more[215] - The company is not required to provide quantitative and qualitative disclosures about market risk as a smaller reporting company[216]

Revenue Generation - Gaxos.AI generated revenues of $1,933,030 for the year ended December 31, 2025, with $1,509,886 from RNK Health providing non-clinical services[180] - Revenue from health coaching packages was $1,124 in 2025, compared to $3,952 in 2024, indicating a significant increase in service offerings[180] - Subscription services from Art-Gen.ai, UnGPT.ai, and Bible.ai applications generated $421,995 in revenue in 2025[180] - Total revenues for the year ended December 31, 2025, were $1,933,030, a decrease of 52.0% compared to $4,027 in 2024[181] Product Development and Launches - Gaxos Labs launched a generative AI service in September 2024, reducing creative asset development time from hours to minutes for game developers[165] - The company launched UnGPT.ai in May 2025, enhancing AI-generated text to sound more natural and human-like[166] - Art-Gen.AI, launched in August 2025, allows users to create professional-grade content quickly and cost-effectively[167] - As of December 31, 2025, Gaxos.AI launched five proprietary games, integrating AI for personalized gaming experiences[172] Financial Performance - Operating expenses increased by $3,141,924, or 84.7%, totaling $6,849,556 for the year ended December 31, 2025, compared to $3,707,632 in 2024[183] - Research and development fees slightly decreased by $2,816, or 0.3%, totaling $993,671 in 2025 compared to $996,487 in 2024[184] - General and administrative expenses rose to $5,855,885 in 2025, an increase of $3,144,740, or 116.0%, from $2,711,145 in 2024[186] - Advertising and marketing expenses surged by $2,715,433, or 739.2%, reaching $3,082,784 in 2025 compared to $367,351 in 2024[190] - The company reported a loss from operations of $4,916,526 for the year ended December 31, 2025, an increase of $1,212,921, or 32.7%, from $3,703,605 in 2024[194] - Net loss attributable to common shareholders was $3,900,583 in 2025, with a net loss per share of $0.55, compared to a net loss of $3,418,197 and $1.92 per share in 2024, reflecting an increase of 14.1%[196] Cash and Investments - As of December 31, 2025, the company had a cash balance of $840,799 and short-term investments of $11,345,187, with working capital of $11,919,230[198] - Net cash used in operations for the year ended December 31, 2025, was $3,853,757, compared to $3,280,397 in 2024[203] Future Plans and Compliance - The company plans to pursue additional financing to support its growth strategy and research and development efforts, indicating a need for significant capital investment[209] - The company is taking advantage of the extended transition periods under the JOBS Act for complying with new accounting standards, which may affect comparability with other public companies[214] - The company will remain an "emerging growth company" until it reaches total annual gross revenues of $1.07 billion or more[215] - The company intends to rely on exemptions from certain requirements, including auditor's attestation on internal controls over financial reporting[215] - The company is not required to provide quantitative and qualitative disclosures about market risk as a smaller reporting company[216]

Financial Performance - Network-1 reported revenue of $150,000 for the year ended December 31, 2025, a 50% increase from $100,000 in 2024[3] - Operating expenses decreased by $265,000 in 2025, totaling $3,456,000 compared to $3,721,000 in 2024[3] - Net loss for 2025 was $2,420,000 or $0.11 per share, an improvement from a net loss of $3,034,000 or $0.13 per share in 2024[5] - Interest and dividend income for 2025 was $1,844,000, slightly down from $1,897,000 in 2024[4] Liquidity and Financial Position - Network-1's cash, cash equivalents, and marketable securities totaled $36,869,000 as of December 31, 2025, indicating sufficient liquidity for operations[9] - The company authorized a share repurchase program of up to $5,000,000, repurchasing 212,262 shares at an average price of $1.35 per share in 2025[11] - Network-1's dividend policy remains at $0.10 per share annually, consistent with previous years[10] Revenue Generation - Network-1's Remote Power Patent generated licensing revenue exceeding $188,000,000 from May 2007 through December 31, 2025[13] Legal Matters - The company commenced patent litigation against Samsung in June 2025, with a trial date set for June 2027[6] Investment Activities - ILiAD Biotechnologies completed a $115,000,000 preferred stock financing, resulting in Network-1 owning approximately 3.1% of the outstanding shares[8]

Financial Performance - The company reported a net loss of $11,187,992 from continuing operations for the nine months ended January 31, 2026, with an accumulated deficit of $13.4 million and negative working capital of $6.21 million [242]. - Net revenues for the three months ended January 31, 2026, were $29,544,900, a decrease of 8.6% compared to $32,319,930 in the same period of 2025 [278]. - The company reported a net loss from continuing operations of $5,211,845 for Q1 2026, a significant decline from a net income of $1,095,946 in Q1 2025 [278]. - For the nine months ended January 31, 2026, net revenues were approximately $84.3 million, a decrease of $5.5 million or 6.1% from $89.8 million in 2025 [295]. - Net loss from continuing operations was $11.19 million for the nine months ended January 31, 2026, an increase of 610.4% from a net income of $2.19 million in 2025 [309]. Operating Expenses - Total operating expenses rose by 76.8% to $10,360,539 in Q1 2026, compared to $5,860,082 in Q1 2025 [278]. - General and administrative expenses surged by 313.7% to $6,000,170 in Q1 2026, compared to $1,450,315 in Q1 2025 [278]. - Total operating expenses increased by approximately $5.7 million, from $18.9 million in 2025 to $24.5 million in 2026, an increase of 30.0% [299]. - Other expenses were $1,624,446 for the three months ended January 31, 2026, compared to other income of $157,596 in 2025 [286]. - Other expenses increased significantly to $4.99 million in 2026 from $229,031 in 2025, mainly due to investment losses and changes in fair value of derivative liabilities [302]. Revenue and Profitability - Gross profit increased by 7.0% to $7,542,366 in Q1 2026 from $7,046,291 in Q1 2025 [278]. - Gross profit was approximately $20.6 million for the nine months ended January 31, 2026, down from $23.1 million in 2025, representing a decrease of $2.5 million or (10.9)% [297]. - Gross profit increased to approximately $7.5 million for the three months ended January 31, 2026, up by $496,075 or 7.0% from $7.0 million in 2025, with a gross margin of 25.5% compared to 21.8% [282]. Cash Flow and Financing - Net cash provided by operating activities was approximately $911,790 for the nine months ended January 31, 2026, compared to $6.39 million in 2025 [316]. - Net cash used in investing activities was $2.92 million for the nine months ended January 31, 2026, primarily for the purchase of digital assets [320]. - Net cash provided by financing activities was approximately $2.75 million for the nine months ended January 31, 2026, primarily from a bank loan of $5,250,000 and a promissory note of $4,844,000 [321]. - The aggregate balance on the three SBA loans as of January 31, 2026, was $2,574,473, compared to $2,616,050 as of April 30, 2025 [325]. - A Business Loan Agreement with Royal Business Bank provided secured financing of $5,250,000 at an interest rate of 7.5% per year, with monthly payments of $91,040 [326]. Investments and Acquisitions - The company acquired 100% of the equity interests in Lee Lee Oriental Supermart, Inc. for approximately $22.2 million, expanding its presence in Arizona [232]. - The company invested $1,440,000 for a 40% equity interest in HKGF Market of Arcadia, California, and later increased its investment to maintain a 49% interest [231]. - The acquisition of Lee Lee was completed for an aggregate purchase price of approximately $22.2 million, including $7.0 million in cash and a secured note of approximately $15.2 million [327]. Debt and Obligations - The company has a total contractual obligation of $50,016,246 as of January 31, 2026, with $5,225,885 due within one year [349]. - The Initial Note bears interest at 5.25% per annum, which may increase to 18.00% upon an Event of Default [339]. - The Company has guaranteed all loans described, with the CEO personally guaranteeing the SBA loans [361]. Compliance and Regulatory - The Company has received a letter from Nasdaq regarding non-compliance with the minimum bid price requirement, with an extension until July 6, 2026, to regain compliance [359]. - The Company expects the initial registration statement to be effective by the deadline, which is currently under SEC review [340].

Financial Position - As of December 31, 2025, the company had cash, cash equivalents, and marketable securities totaling approximately $318.1 million[505] - Cash and cash equivalents as of December 31, 2025, were approximately $287.8 million, compared to $11.3 million as of December 31, 2024[525] - As of December 31, 2025, the fair value of the company's cash, cash equivalents, and marketable securities was approximately $318.1 million[576] Losses and Deficits - The company reported net losses of approximately $105.0 million and $40.5 million for the years ended December 31, 2025 and 2024, respectively, with an accumulated deficit of approximately $304.9 million as of December 31, 2025[506] - The net loss for the year ended December 31, 2025, was approximately $105.0 million, driven by increased R&D expenses[525] Research and Development Expenses - Total research and development expenses for 2025 were $84.5 million, an increase of approximately $34.5 million, or 69%, compared to 2024[514] - The Duchenne muscular dystrophy program (Deramiocel) incurred R&D expenses of $34.3 million in 2025, up 49% from $23.0 million in 2024[514] - DMD program-related expenses rose by $11.2 million, mainly for the HOPE-3 clinical trial and expanded manufacturing for Deramiocel[516] - Research expenses related to the exosomes platform increased by $2.3 million, primarily due to collaboration with NIAID[516] - Clinical trial expenses are accrued based on contracts with vendors and the progress of trials, with adjustments made if actual results differ from estimates[569] - Research and development expenses include costs related to clinical trials, personnel, and consulting fees, with accruals based on estimates of services received[559] Income and Funding - Clinical development income for the year ended December 31, 2025 was zero, compared to approximately $22.3 million in 2024, with a total of $50.0 million in milestone payments recognized from Nippon Shinyaku[512] - The company has raised approximately $600 million since inception through various funding sources, including equity financings and strategic collaborations[505] - Cash flow provided by financing activities for 2025 was approximately $248.9 million, an increase from $152.8 million in 2024, primarily due to net proceeds from stock sales[530] - The Company completed a public offering on December 5, 2025, selling 6,000,000 shares at $25.00 per share, generating approximately $172.5 million in gross proceeds[538] - In an earlier public offering on October 16, 2024, the Company sold 5,073,800 shares at $17.00 per share, resulting in gross proceeds of approximately $86.3 million[539] - The Company conducted a private placement on September 16, 2024, issuing 2,798,507 shares at $5.36 per share, totaling approximately $15.0 million[540] - Under the U.S. Distribution Agreement with Nippon Shinyaku, Capricor received an upfront payment of $30.0 million and potential milestone payments of up to $100.0 million[534] Administrative Expenses - Total general and administrative expenses for 2025 increased by approximately $8.8 million, or 59%, compared to 2024[518] - Compensation and other personnel expenses increased by $11.9 million, primarily due to increases in headcount[516] Future Expectations - The company anticipates significant increases in expenses and operating losses as it seeks to develop and commercialize Deramiocel and other product candidates[507] - Capricor expects to spend approximately $100.0 million to $125.0 million in 2026 for the Deramiocel program, primarily for CMC expansion and clinical expenses[520] Regulatory and Clinical Developments - The company’s Biologics License Application (BLA) for Deramiocel is under review by the FDA, with a target action date of August 22, 2026[485] - The company is exploring regulatory pathways for Deramiocel in Europe and Japan alongside its U.S. regulatory activities[498] - The StealthX™ vaccine, developed using engineered exosomes, has shown a favorable safety profile in ongoing Phase 1 clinical studies[502] Investment and Accounting Policies - The investment portfolio primarily consists of money market funds and bank money market accounts, including short-term U.S. treasuries[576] - The company aims to limit credit exposure by investing with highly rated credit issuers to improve the safety and preservation of invested funds[577] - The company does not hedge interest rate exposure and believes that a hypothetical 100 basis point increase or decrease in interest rates would not materially impact the fair value of its investment portfolio[577] - The Company accounts for stock-based compensation over the vesting period, with expenses recognized based on the fair value of stock options and restricted stock awards[562] - The company expects to record additional non-cash compensation expense in the future, which may be significant[564] - The company is currently evaluating the impact of newly issued accounting standards on its financial statements, including ASU 2023-09 and ASU 2025-11[571][572] - The company anticipates that the adoption of new accounting standards will result in additional disclosures in its consolidated financial statements[574] - The company has no off-balance sheet arrangements as defined by SEC rules[550] - The company’s clinical trial accrual and prepaid assets depend on timely reporting from CROs and third-party vendors[570] - The company’s investment policy focuses on mitigating default risk by investing in high credit quality securities[577] Liabilities - As of December 31, 2025, the total CIRM liability was approximately $6.4 million, consisting of $3.4 million in principal and $3.0 million in accrued interest[548] - The Company established an at-the-market offering program in September 2025 with a maximum offering amount initially set at $150.0 million, later reduced to $125.0 million[542] - Under the September 2025 ATM Program, the Company sold 2,682,307 shares at an average price of approximately $28.89 per share, generating gross proceeds of approximately $77.5 million[543] - The June 2021 ATM Program resulted in the sale of 9,228,383 shares at an average price of approximately $8.13 per share, totaling gross proceeds of approximately $75.0 million[545]