Financial Results Announcement - CervoMed Inc. announced financial results for the quarter and full year ended December 31, 2025[5]. - The press release detailing these results was issued on March 17, 2026[5]. Company Information - The company is listed on the NASDAQ Capital Market under the symbol CRVO[2]. - CervoMed Inc. is not classified as an emerging growth company[3]. - The financial information is available on the company's website under the "Investors – Events and Presentations" section[6]. Reporting Obligations - The company has no obligation to publicly update or revise the information provided, except as required by law[7]. - The press release is attached as Exhibit 99.1 in the current report[10]. - The report includes a cover page interactive data file embedded within the Inline XBRL document[10]. - The Chief Financial Officer & General Counsel, William Elder, signed the report[14]. - The report was filed pursuant to the Securities Exchange Act of 1934[12].

Clinical Development - The company has developed a novel anti-cancer and anti-viral immunotherapy, with a Phase 1 clinical trial for its lead candidate, Decoy20, initiated in 2023[30]. - The company has initiated a Phase 1 clinical trial for its lead product candidate, Decoy20, targeting patients with advanced solid tumors who have exhausted approved treatment options[67]. - In the first cohort of the Phase 1 trial, four patients received a single dose of 7 x 10^7 Decoy20, experiencing transient adverse events that resolved within 30 minutes[68]. - The second cohort of the Phase 1 trial involved a reduced dose of 3 x 10^7 Decoy20, with similar adverse events observed as in the first cohort[69]. - Preclinical studies demonstrated significant anti-tumor activity and durable responses in models of non-Hodgkin's lymphoma and various carcinomas, with a wide therapeutic index of 10 to ≥33-fold[60]. - The company has successfully completed cGMP manufacturing and stability studies for Decoy20, with IND-enabling toxicology studies showing no sustained induction of cytokine release syndrome factors[62]. - The FDA allowed the company to proceed with the Phase 1 clinical trial in May 2022, focusing on safety, tolerability, and pharmacokinetics of Decoy20[67]. - As of October 2024, the company completed one month of weekly dosing in the first six participants at the 3 x 10^7 Decoy20 dose, receiving authorization for unrestricted enrollment[71]. - By May 2025, the company had enrolled 13 participants on Decoy20 as a single dose and 32 participants in the weekly dosing among two Decoy20 dose levels[71]. - In the Combination Study with BeOne Medicines, six evaluable participants were enrolled by November 2025, with one serious adverse event of cytokine release syndrome (CRS) reported[72]. - Three participants in the Combination Study experienced disease progression and had to discontinue, while three showed evidence of stable disease[72]. - One subject with pancreatic adenocarcinoma maintained stable disease for over four months before discontinuing after six months due to disease progression[72]. - The company has discontinued further enrollment in the Combination Study and currently has no plans to initiate a new clinical trial[72]. - The company must demonstrate substantial evidence of safety and efficacy to obtain regulatory approval, which may require additional studies or trials[186]. - No clinical trials have been completed that provide substantial evidence of efficacy for any product candidates, and further development is required[156]. - The company is focusing its limited resources on the development of Decoy20, potentially foregoing other product candidates with greater commercial potential[170]. - Patient enrollment challenges may arise due to competition from other pharmaceutical companies targeting the same diseases, impacting clinical trial timelines[179]. Financial Performance - The company reported a net loss of approximately $20.8 million for the year ended December 31, 2025, with an accumulated deficit of approximately $81.3 million[145]. - As of December 31, 2025, the company had approximately $8.5 million in cash and used $14.8 million of cash in operations during the twelve months ended December 31, 2025[147]. - The company expects to continue incurring significant cash outflows and additional losses, raising substantial doubt about its ability to continue as a going concern[147]. - The company has experienced significant operating losses in every reporting period since inception, indicating a lack of profitability[145]. - The company may need to raise additional capital through equity or debt financings to fund its operations and may face substantial dilution to stockholders[147]. - The company may seek financing through collaborations, strategic alliances, or license agreements, but there is no assurance that new financing will be available on commercially acceptable terms[147]. - Future capital requirements will depend on various factors, including the outcome of identifying a suitable target company for acquisition and the costs of clinical trials[152]. - The company may seek additional capital through equity and debt financings, which could lead to shareholder dilution[154]. Regulatory Environment - The FDA imposes substantial requirements on companies involved in clinical development, including safety, effectiveness, and quality control regulations[76]. - The NDA or BLA review process by the FDA typically includes a 60-day review to determine if the application is substantially complete before acceptance for filing[88]. - The FDA may grant orphan designation to drugs intended for rare diseases affecting fewer than 200,000 individuals in the U.S., providing financial incentives and exclusivity for seven years upon first approval[98]. - Fast track designation allows for expedited review of products intended to treat serious conditions, with potential for priority review and rolling review of application sections[93]. - Breakthrough therapy designation offers more intensive FDA interaction and guidance, aimed at expediting development for products showing substantial improvement over existing therapies[94]. - Priority review designation aims for FDA action on marketing applications within six months, compared to ten months under standard review, for products that significantly improve treatment[95]. - Accelerated approval may be granted based on surrogate endpoints likely to predict clinical benefit, with required confirmatory studies to verify effectiveness[96]. - The FDA requires ongoing compliance with regulations post-approval, including record-keeping and reporting of adverse experiences[101]. - Non-patent data exclusivity under the FDCA provides a five-year period for the first applicant to obtain approval of a new chemical entity, preventing approval of similar applications during this time[105]. - Pediatric exclusivity can extend existing exclusivity periods by six months if clinical trials in children are conducted in response to FDA requests[107]. - The BPCIA establishes a 12-year exclusivity period for reference products, delaying the submission of biosimilar applications until four years after the reference product's approval[109]. - The company must comply with various healthcare regulations, including anti-kickback and fraud laws, which can result in significant penalties for violations[111]. - The Affordable Care Act (ACA) increased the minimum Medicaid rebates for brand name drugs from 15.1% to 23.1% of the average manufacturer price[113]. - The American Rescue Plan Act of 2021 eliminated the statutory Medicaid drug rebate cap starting January 1, 2024, which was previously capped at 100% of a drug's average manufacturer price[114]. - The Inflation Reduction Act of 2022 requires price negotiations for certain drugs with Medicare starting in 2026, with penalties for price increases exceeding inflation[114]. Market and Competition - The company faces significant competition from larger biopharmaceutical companies, including Amgen, AstraZeneca, and Merck, which may have greater resources and faster regulatory approval processes[117]. - The potential market opportunity for the company's product candidates is difficult to estimate and may be smaller than anticipated, impacting profitability[203]. - Market acceptance of the company's product candidates among physicians, patients, and healthcare payors is uncertain and could affect revenue generation[200]. - The company may face significant competition in establishing collaboration agreements for product development and commercialization, which are complex and time-consuming[215]. - Third-party payors increasingly challenge prices for biopharmaceutical products, which may limit the company's ability to charge appropriate prices for its products[224]. - Legislative and regulatory changes in the healthcare system may increase the difficulty and cost of obtaining marketing approval and affect pricing strategies for product candidates[229]. Operational Challenges - The company relies on third-party manufacturers for the production of its product candidates, increasing the risk of supply issues and regulatory compliance failures[209]. - The company lacks long-term commitments or supply agreements with third-party manufacturers, increasing the risk of failing to obtain sufficient quantities of product candidates on acceptable terms[211]. - There is no arrangement for redundant supply or a second source for all required raw materials, which could materially impact the company's financial position if manufacturers fail to perform[212]. - The company does not have experience in sales, marketing, and distribution of pharmaceutical products, which may hinder revenue generation if product candidates are approved[218]. - Coverage and reimbursement processes are time-consuming and costly, with no uniform policy existing among third-party payors, leading to uncertainty in obtaining adequate reimbursement[226]. - The company may be subject to price controls in international markets, which could restrict revenue generation compared to the United States[227]. - Increasing efforts by payors to cap healthcare costs may limit coverage and reimbursement levels for newly approved products, creating high barriers to market entry[228]. Corporate Governance - The company has five full-time employees as of December 31, 2025, and none are represented by labor unions[125]. - The company provides competitive compensation and benefits, including incentive compensation plans and equity-based grants to retain key personnel[127]. - The conversion of Preferred Stock will result in the issuance of 111.0 million shares of common stock, representing approximately 96.4% of the total shares expected to be outstanding on a fully diluted basis[132]. - Following the conversion of Preferred Stock, Mr. Lazar will own approximately 96.4% of the total number of shares of common stock outstanding on a fully diluted basis, significantly reducing other stockholders' ownership and voting power[138]. - The company relies on trade secrets and know-how, alongside patents, to protect its proprietary technology and competitive position[123]. - Heightened governmental scrutiny over drug pricing and reimbursement methodologies may impact the company's market position and sales[115].

Expansion and Growth Strategy - The company has grown to 42 showrooms across the U.S. as of December 31, 2025, indicating significant expansion in its retail presence [131]. - The company plans to continue expanding showrooms throughout the U.S., which may expose it to significant risks related to market presence and competition [141]. - The company’s growth strategy includes increasing advertising and marketing spending, expanding product offerings, and showroom presence, which requires significant upfront investment [133]. - The company may face challenges in expanding into new geographical markets due to differing consumer characteristics and competition [141]. - The company derives a significant portion of its revenue from sales of its Design Your Own rings, and any decline in these sales could materially impact its financial condition and operating results [156]. Supply Chain and Inventory Management - Approximately 30% of the world's rough diamonds are of Russian origin, and sanctions on Russian diamonds could negatively affect the worldwide supply, impacting the company's supply chain practices [121]. - The company primarily uses repurposed precious metals in its jewelry, but limited supply of repurposed platinum may require significant cash investment and management skills to resolve supply issues [120]. - The company faces challenges in managing inventory levels, which are crucial for maintaining profitability and meeting customer demand [154]. - Volatile economic conditions and supply chain disruptions may adversely affect the timely delivery of materials, impacting the company's ability to fulfill orders [140]. - The company relies on a limited number of suppliers and third-party carriers for timely delivery of diamonds and fine jewelry, which poses risks to order fulfillment and business operations [255]. Economic and Market Risks - The company faces risks related to consumer spending influenced by economic conditions, which could affect demand for its products [124]. - Increased labor costs and inflationary pressures may reduce profitability, as the company may struggle to reflect these costs in product pricing [122]. - The introduction of tariffs and international trade restrictions has increased uncertainty in the market and could raise material costs, impacting gross margins [140]. - Changes in credit markets could limit consumer financing options, adversely affecting the company's sales [194]. - The company is affected by seasonality, with a significant portion of annual revenue occurring in the fourth quarter, making it vulnerable to changes in consumer spending during peak shopping periods [195]. Technology and Cybersecurity - The company is focusing on enhancing customer experience through machine learning models and new technologies, such as virtual try-ons and optimized payment processing [127]. - The company relies heavily on IT systems for critical operations, and any significant failure or security breach could adversely affect its financial condition [160]. - Cybersecurity risks are increasing, with potential impacts from data breaches leading to legal claims, regulatory investigations, and significant costs [166]. - The company faces uncertainties related to technology platforms, including potential website downtime and security breaches, which could adversely affect operations [179]. - The company collects a wide variety of personal data, and failure to comply with privacy laws could result in significant fines and penalties [228]. Regulatory and Compliance Challenges - The company is subject to various ESG-related regulations, which may increase compliance costs and impact business operations [175]. - The regulatory environment surrounding cybersecurity and data protection is becoming more demanding, with potential fines and liabilities for non-compliance [169]. - Compliance with rapidly changing privacy and data protection laws could lead to significant liabilities and affect the company's operations and financial performance [222]. - The California Consumer Privacy Act (CCPA) and similar laws in other states may increase compliance costs and potential liabilities, particularly in the event of a data breach [224]. - The company is subject to various limitations and restrictions regarding distributions from Brilliant Earth, LLC, which may impact its ability to pay taxes and operating expenses [264]. Financial and Operational Risks - The company has a short operating history at scale, making it difficult to predict future operating results and sustain profitability [157]. - The company may require additional capital to support business growth, which might not be available on acceptable terms [201]. - The company funds operations primarily through revenue from products and services and equity financings, raising concerns about cash generation sufficiency [201]. - The company’s insurance coverage may be insufficient, and any failure of insurance providers to meet obligations could lead to significant financial losses [262]. - The company may face significant costs and resource diversion if involved in securities litigation due to stock price volatility [283]. Intellectual Property and Competitive Landscape - The company may face significant expenses in defending intellectual property rights, which could divert management attention [213]. - The company faces potential intellectual property claims that could adversely impact its business and financial condition [217]. - Increasing competition raises the likelihood of intellectual property rights claims, which may involve rights holders with no relevant product revenue [219]. - The company is subject to competitive pressures from larger retailers with greater resources, which may affect its pricing and market share [144]. - The concentration of voting power with Continuing Equity Owners may adversely impact the price of Class A common stock [281]. Internal Control and Governance - The company identified a material weakness in internal control over financial reporting related to ineffective information technology general controls, which has been remediated as of December 31, 2025 [312]. - The company expects to incur ongoing costs related to implementing an internal audit function and additional controls in the upcoming years to improve the internal control environment [313]. - If the company cannot assert the effectiveness of its internal control over financial reporting, it may face restricted access to capital markets and a negative impact on stock price [313]. - The company is classified as a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk [429]. - The company qualifies as a "controlled company" under Nasdaq rules, exempting it from certain corporate governance requirements, which may affect investor protections [286].

Customer Acquisition and Marketing - The company has recently faced challenges in acquiring new customers cost-efficiently, leading to increased customer acquisition costs and lower levels of customer acquisition [33]. - Significant investments have been made to enhance brand awareness and attract new customers, but marketing campaigns have not reliably resulted in increased sales [33]. - The company expects an adverse impact on results of operations for the fiscal year ending December 31, 2026, primarily in the first half due to increased customer acquisition costs [34]. - The company relies on social media platforms for marketing, and changes in algorithms have negatively impacted customer acquisition costs and effectiveness [39]. - Maintaining relationships with content creators is critical for brand promotion, and difficulties in this area could adversely affect customer engagement and brand awareness [38]. Revenue and Customer Dependence - A significant portion of revenue is generated from existing customers, and any decline in their spending or repeat purchases could adversely affect business performance [36]. - The company faces risks related to consumer spending, which can decline during economic downturns, affecting revenue and profitability [67]. - Seasonal fluctuations in revenue are expected, with the highest revenue typically occurring in the first quarter, and disruptions during peak seasons could negatively impact financial results [84]. Supply Chain and Operational Risks - The company relies on single source suppliers for certain component materials, which poses risks of supply shortages or disruptions that could adversely affect its business and financial condition [47]. - The majority of raw material suppliers are located outside the United States and Israel, exposing the company to risks such as regulatory restrictions, natural disasters, and political unrest [51]. - Shipping disruptions due to port congestion, labor disputes, and other factors could significantly impact the company's ability to deliver products and maintain customer satisfaction [63]. - The company may need to reformulate or substitute ingredients in its products due to shortages of specific raw materials, which could affect product quality and customer satisfaction [49]. Competition and Market Position - The company faces competition from larger multinational consumer product companies, which may have greater resources and capabilities [57]. - Increased competition in the beauty and wellness industry may lead to pricing pressures, affecting sales and gross profit margins [106]. Financial and Capital Management - The company may require additional capital in the future, and obtaining financing on favorable terms is uncertain, which could impair business growth and operational capabilities [114]. - The conditional exchange feature of the Exchangeable Notes could adversely affect the company's liquidity and financial condition if triggered [116]. - The company’s marketable securities totaled $374 million as of December 31, 2025, exposing it to market and interest rate risks [97]. Regulatory and Compliance Challenges - The company faces significant challenges in establishing and managing international operations, including increased costs for travel, infrastructure, and legal compliance [16]. - Compliance with ethical business practices and product safety regulations is essential to protect the company’s reputation and avoid legal issues [103]. - The evolving regulatory framework for AI technology may impose additional compliance requirements, potentially increasing costs and restricting opportunities for the company [127]. - The company must comply with anti-corruption and trade compliance laws globally, with violations leading to significant penalties and reputational harm [159]. - The company is subject to evolving data privacy and security laws, which could lead to significant liabilities if compliance is perceived as inadequate [165]. Intellectual Property and Technology Risks - The company relies on a combination of intellectual property laws and contractual provisions to protect its proprietary technology, but there is no guarantee that these protections will be effective [199]. - The company has applied for patent protection for certain technologies, but there is no assurance that these applications will be granted or that existing patents will not be challenged [200]. - The company faces risks in protecting its trade secrets and intellectual property, which could adversely affect its competitive position if competitors lawfully obtain or independently develop its technology [208]. Cybersecurity and Data Protection - Cybersecurity incidents, including ransomware attacks, pose significant risks to the company's operations and could result in substantial costs and reputational harm [188]. - The company maintains cybersecurity insurance, but there is no assurance that coverage will be adequate or available on acceptable terms [189]. - Non-compliance with data privacy laws could result in regulatory investigations, fines, and reputational damage, adversely affecting the company's financial condition [180]. Growth and Expansion Challenges - The company has expanded operations rapidly since its founding and must effectively manage growth, including employee base and hiring needs, to avoid harming its business and financial condition [65]. - The company plans to continue expanding into international markets, which presents new risks and challenges, including regulatory environments and cultural differences [87]. - The company must continue to expand and scale its information technology systems to support growth, which involves inherent costs and risks that could disrupt operations [213].

Economic Conditions and Market Risks - Adverse economic conditions in Mexico may negatively impact the company's financial condition and results of operations[104] - The performance of the real estate markets is cyclical and closely tied to the U.S. and Mexican economies, which may affect the company's financial and operating performance[108] - The Mexican GDP growth rates were 0.8% in 2025, 4.2% in 2024, and 4.7% in 2023, indicating fluctuating economic conditions[205] - The annual inflation rate in Mexico was reported at 4.7%, 4.2%, and 3.7% for the years ending December 31, 2023, 2024, and 2025, respectively[231] - The U.S. government imposed a 25% additional tariff on imports from Mexico effective February 1, 2025, contributing to market volatility and economic uncertainty[234] - Changes in international trade policies could adversely affect the competitive position of Mexico as a manufacturing hub, impacting demand for the company's properties[235] - Political developments in Mexico, including the dominance of the Morena party, could impact the business environment and economic stability[210] - The Mexican government's concentration of power poses challenges for the business sector, leading to decisions driven by electoral priorities rather than economic considerations[218] - Security violence risks in Mexico could negatively impact the company's operations and financial results[237] Tenant and Revenue Risks - The company is dependent on tenants for a substantial portion of its revenues, and defaults by major tenants could materially affect its business[105] - The company derives a significant portion of its rental income from a limited number of customers, increasing its vulnerability to sector-specific downturns[105] - The company’s tenant base is concentrated, with the top 10 tenants accounting for approximately 27.5% of total GLA and 30.0% of rents as of 2025, with Mercado Libre being the largest customer[135] - Economic downturns affecting tenants could lead to defaults, impacting rental income and financial stability[139] - The company may need to modify lease terms to accommodate tenants facing financial difficulties, which could reduce rental income[134] Competition and Market Position - The company may face increased competition leading to lower occupancy rates and rental income, impacting its growth strategy[105] - The company faces significant competition from major players like Prologis and Fibra Uno, which could lead to lower occupancy rates and rental income[142] - The company operates in specific industrial sectors, with 32.2% of leased GLA from the automotive sector, exposing it to economic downturns in these industries[140] Financial Condition and Debt Management - The volatility of financial markets may adversely affect the company's financial condition and the availability of credit[116] - The company may not be able to recover the current carrying value of its properties, land, or investments, which could impair its ability to repay or refinance debt[117] - As of December 31, 2025, the company's total outstanding debt was US$1,275.2 million, with US$100.6 million in secured loans[147] - The company has a debt cap of US$1.8 billion, increased by shareholders in March 2023, which may affect its ability to service debt if additional indebtedness is incurred[147] - 88% of the company's outstanding indebtedness bore fixed interest rates as of December 31, 2025, indicating a significant exposure to interest rate fluctuations[151] - The ability to raise capital is crucial for future growth, and unfavorable market conditions could hinder access to financing[144] - The company’s credit ratings are vital for obtaining favorable financing terms, and any deterioration could increase borrowing costs and limit capital access[145] Development and Operational Risks - The company is subject to risks related to the development of new properties, including rising construction costs and supply chain issues[105] - The company may incur additional costs if tenants fail to maintain adequate insurance coverage, impacting financial performance[158] - The company is subject to various governmental regulations that may delay obtaining necessary approvals, licenses, and permits, impacting operations[164] - The company carries insurance coverage for property damage, but certain risks, such as acts of war or pandemics, may not be fully insured, potentially leading to significant financial losses[154] - The company regularly reviews its real estate assets for impairment, which could materially affect its financial condition and market price of its ADSs[160] Environmental and Regulatory Risks - The company is subject to numerous environmental laws and regulations, which may lead to significant additional costs and liabilities that could adversely affect its financial condition[169] - The company anticipates that the regulation of its business operations under Mexican environmental laws will become more stringent over time, potentially impacting cash flows and compliance costs[170] - The company is jointly liable with its tenants for soil pollution remediation costs, which could lead to substantial financial liabilities if tenants fail to meet their obligations[171] - Under the General Law on Climate Change, the company faces various environmental obligations that may impact its financial performance, including potential costs for greenhouse gas emissions compliance[172] - The company is exposed to physical risks from climate change, which could affect tenant operations and their ability to pay rent, potentially impacting the company's financial condition[173] - The company may face adverse impacts from stricter energy efficiency standards and greenhouse gas regulations, which could increase operating costs and affect tenant financial conditions[174] Legal and Compliance Risks - The company may face legal and administrative proceedings that could harm its reputation and financial condition[178] - The company is subject to anti-corruption and anti-bribery laws, and violations could have a material adverse effect on its financial condition and operations[179] - The company identified material weaknesses in internal controls over financial reporting, which could lead to material misstatements if not remediated[194] - The company has taken steps to strengthen its internal control environment but cannot assure that all material weaknesses will be fully addressed in a timely manner[198] - Compliance with the Sarbanes-Oxley Act is expected to increase legal and financial compliance costs[251] Shareholder and Governance Issues - The protections for minority shareholders in Mexico are less developed compared to other jurisdictions, making enforcement of rights more difficult[260] - The company's bylaws restrict certain transfers of common shares, which could impede changes in control or management[241] - Any acquisition resulting in beneficial ownership of 20.0% or more of common shares requires a public tender offer at a specified price[242] - The exclusive jurisdiction of federal courts in Mexico City for disputes may limit shareholders' ability to obtain favorable judicial forums[255] - The company may not be able to offer preemptive rights to ADS holders or non-Mexican shareholders during future common share issuances, potentially leading to dilution of their ownership stakes[261] - If additional equity securities are issued, existing shareholders may experience dilution, and the market price of the ADSs or common shares could decline[264] Corporate Structure and Financial Strategy - The company is a holding entity that relies on dividends from subsidiaries to meet debt obligations and distribute to shareholders[271] - A dividend policy approved on March 23, 2021, allows for the distribution of up to 75% of distributable profit each year from 2021 to 2026[273] - Dividends will be paid in pesos, and fluctuations in the exchange rate between pesos and U.S. dollars could adversely affect the value received by shareholders[276] - The company follows home country practices for corporate governance, which may afford less protection to holders of common shares compared to U.S. issuers[283] - The trading market for the company's shares may decline if analysts publish negative reports or cease coverage[285] Company Growth and Development - The company completed a $445.6 million initial public offering of 14,375,000 ADSs on July 5, 2023, and a $148.8 million follow-on offering of 4,250,000 ADSs on December 13, 2023[295] - As of December 31, 2025, the company's portfolio comprised 231 buildings with a total GLA of 42,954,022 square feet and a stabilized occupancy rate of 93.6%[297] - The company's GLA has grown 77.2 times since operations began in 1998, representing a compound annual growth rate (CAGR) of 17.5%[297] - The company operates in strategic locations across sixteen Mexican states, focusing on light-manufacturing and logistics[297] - The company has significant development experience and capabilities in the industrial real estate segment in Mexico[297] - The company aims to generate efficient and sustainable investments through eco-efficient standards in its developments[297] Foreign Investment and Taxation - The company’s future operations may be affected by its potential classification as a passive foreign investment company (PFIC), which could have adverse tax consequences for U.S. investors[287] - The company’s PFIC status is uncertain and depends on the classification of its income and assets, particularly regarding lease revenue[287] - Legislative changes in tax laws could increase the company's tax liability, impacting financial conditions and cash available for dividends[221] - The company faces risks from potential foreign exchange controls if Mexico experiences balance of payment difficulties in the future[226]

Financial Performance - Total revenue for the fiscal year ended January 31, 2026, was $955.2 million, representing a growth rate of 26% compared to $759.2 million in the previous year[95]. - The total number of Base Customers increased to 10,682 as of January 31, 2026, up from 9,893 as of January 31, 2025[93]. - The company incurred net losses of approximately $56.0 million, $6.3 million, and $425.7 million in fiscal years 2026, 2025, and 2024, respectively, with an accumulated deficit of approximately $1.2 billion as of January 31, 2026[100]. - As of January 31, 2026, the company had $1,259.9 million in cash, cash equivalents, and short-term investments, up from $992.4 million as of January 31, 2025, indicating a growth of approximately 27%[384]. - The company's cash equivalents and short-term investments primarily consist of money market funds, treasuries, agency securities, corporate debt securities, and commercial paper, totaling $1,183.1 million as of January 31, 2026, compared to $898.3 million in the previous year[384]. Growth and Investment Strategies - The company plans to continue investing in product development, including enhancements related to artificial intelligence, and expanding its sales and marketing efforts[101]. - The company anticipates that its operating expenses will increase as it invests in growth opportunities and infrastructure[100]. - The company plans to expand its marketing and sales capabilities to attract larger organizations, but success is not guaranteed and may divert resources from existing customer maintenance[163]. - The company aims to convert users of free products into paying customers, but this may require sophisticated sales efforts and could be impacted by general economic conditions[162]. - The company may need to change its subscription-based revenue model to remain competitive, which could impact financial stability[136]. Market and Competitive Risks - Future revenue growth may be impacted by factors such as increased competition, changes in technology, and global economic conditions[97]. - Intense competition in the software market could lead to a loss of market share, adversely affecting the company's business and financial condition[115]. - The company competes with well-established providers like Microsoft and Atlassian, which have greater resources and larger customer bases[117]. - The introduction of new services by competitors could make the company's solutions obsolete, impacting its business and financial condition[123]. - The market for the company's services is rapidly evolving, making it difficult to predict customer adoption and demand, which could adversely affect future results[133]. Operational and Compliance Challenges - Significant legal, accounting, and operational expenses are expected as the company continues to operate as a public entity[102]. - The company faces heightened security risks due to the nature of its platform, which allows code execution, increasing the potential attack surface[108]. - Security breaches could lead to litigation, reputational harm, and significant financial liabilities for the company[112]. - The company is subject to evolving privacy laws, including GDPR and CCPA, which impose significant compliance obligations and potential penalties[201][202]. - Compliance with privacy legislation may require additional resources and incur costs, affecting financial condition and operational results[201]. Customer and Revenue Dynamics - The company relies on sales and marketing strategies to drive revenue growth, and any decline in customer renewals could harm future operating results[134]. - Customer renewal rates may fluctuate due to dissatisfaction with pricing or services, which could adversely affect revenue if customers opt for free versions or discontinue use[147]. - A significant portion of annual orders typically comes from new and existing customer renewals in the last two fiscal quarters, influenced by the annual budget approval process[142]. - The company faces potential fluctuations in customer expansions and renewals, which may decline due to factors such as customer satisfaction, pricing, and macroeconomic conditions[139]. - The length of the sales cycle can be unpredictable, particularly for large customers, affecting revenue timing and operational adjustments[222]. Financial and Tax Considerations - The company may need to raise additional capital to support growth and respond to business challenges, which could adversely affect operating results if capital is not raised on acceptable terms[253]. - The company faces potential increases in effective tax rates due to changes in tax laws, including the One Big Beautiful Bill Act, which implements significant corporate tax reforms[257]. - The company is exposed to greater than anticipated tax liabilities due to aggressive interpretations of tax laws by jurisdictions in which it operates[261]. - The company may experience volatility in the market price of its Class A common stock, influenced by factors such as operating results and industry developments[266]. - The company may face dilution of existing stockholders' equity if additional funds are raised through equity or convertible debt issuances[255]. Strategic Risks and Future Outlook - The ability to forecast future results is subject to uncertainties, including the effectiveness of growth management and billing models[99]. - The company faces challenges in transitioning users from free to paid versions of its services, affecting revenue growth[118]. - The company must continuously enhance its services to integrate with various technologies, which requires significant resources and could impact revenue growth if not managed effectively[168]. - The company may engage in merger and acquisition activities, which could disrupt business and dilute stockholder value[185]. - Risks associated with acquisitions include management distraction, integration challenges, and potential negative perceptions from users or investors[186]. Regulatory and Compliance Risks - The company is subject to the reporting requirements of the Exchange Act and the Sarbanes-Oxley Act, as well as Nasdaq listing standards[247]. - The company incurs significant costs related to compliance with the Sarbanes-Oxley Act, including accounting and management oversight expenses[248]. - The company has faced regulatory scrutiny regarding export controls, particularly concerning software exports to countries like Russia and Belarus, which may require licenses[208]. - Any failure to comply with anti-bribery and anti-corruption laws could result in significant penalties and adversely affect the company's reputation and operations[212]. - The company is transitioning certain users in China to its JiHu entity to comply with the Personal Information Protection Law[202]. Human Resources and Culture - The company faces intense competition for highly skilled personnel, particularly in AI and machine learning, which may hinder its ability to hire and retain qualified team members[225]. - The company’s corporate culture is a key contributor to its success, and failure to maintain this culture as it grows could harm innovation and teamwork[228]. - Customization demands from customers may increase upfront investment without guaranteed subscription growth, affecting overall business performance[166]. - The reliance on channel partners for sales and support poses risks, as poor performance from these partners could harm the company's brand and growth[170]. - The company tracks performance metrics using internal tools, which may be subject to inaccuracies, potentially harming reputation and business[173].

Financial Performance - The company incurred a net loss of approximately $29.6 million and used cash in operations of approximately $19.9 million during the nine months ended January 31, 2026[141]. - Revenues for the three months ended January 31, 2026, were approximately $0.5 million, a decline from $0.8 million in the same period of 2025, primarily due to timing impacts from the U.S. federal government shutdown[167]. - Revenues for the nine months ended January 31, 2026, were approximately $2.1 million, down from $4.5 million in 2025, primarily due to the timing of deliveries on current year projects[177]. - Net loss for the three months ended January 31, 2026, was $11.4 million, compared to a net loss of $6.7 million in 2025[166]. - Operating expenses rose to $8.4 million for the three months ended January 31, 2026, compared to $6.1 million in 2025, driven by a $1.8 million increase in share-based compensation[169]. - Operating expenses for the nine months ended January 31, 2026, were $24.2 million, up from $15.7 million in 2025, reflecting a significant increase in share-based compensation[179]. - Cost of revenues increased to $1.3 million for the three months ended January 31, 2026, from $0.6 million in 2025, mainly due to full recognition of losses associated with contracts in strategically important markets[168]. - Cost of revenues for the nine months ended January 31, 2026, increased to $4.3 million from $3.1 million in 2025, related to full recognition of one-time losses associated with contracts[178]. - Net cash used in operating activities for the nine months ended January 31, 2026, was $19.9 million, an increase of $5.3 million compared to $14.6 million in 2025[186]. Revenue Breakdown - Revenue from North America and South America decreased to 16% for the three months ended January 31, 2026, down from 39% in the same period of 2025[156]. - EMEA revenue contribution increased to 26% for the three months ended January 31, 2026, compared to 61% in the same period of 2025[156]. - Asia and Australia accounted for 58% of revenue for the three months ended January 31, 2026, marking a new revenue stream as there was no contribution in the same period of 2025[156]. Backlog and Future Expectations - As of January 31, 2026, the backlog was $19.9 million, compared to $7.5 million at January 31, 2025, indicating a significant increase in unfulfilled purchase orders[147]. - The company expects to convert all current backlog into revenue within the next 12 to 36 months, although the timing is subject to change[147]. Funding and Financial Stability - The company issued an additional $6.5 million of convertible notes to institutional investors, increasing its total convertible notes issued to $16.5 million[140][146]. - The company has entered into an At Market Issuance Sales Agreement to offer shares of common stock with an aggregate gross sales price of up to $40.0 million for general corporate purposes[144]. - As of January 31, 2026, the company had cash and cash equivalents of $7.2 million, which may not be sufficient to fund planned expenditures through March 2027[191]. - The company faces substantial doubt about its ability to continue as a going concern for at least one year from the issuance of its consolidated financial statements[192]. - The company expects to continue operating losses in the short-term and possibly longer[192]. - The company is dependent on obtaining additional funding, which is subject to market conditions and its financial performance[192]. Risks and Challenges - The company faces significant risks and uncertainties that could materially affect its future operating results, including product performance and access to capital[141]. - The company must improve, market, and commercialize its products to achieve and sustain profitability[192]. - The company must manage risks associated with internal cybersecurity protocols and data protection[192]. - The company is challenged by potential inflation related to the U.S. dollar impacting its operations and costs[192]. - The company must effectively respond to competition in its targeted markets[192]. - The company is affected by geopolitical uncertainties, including tariffs and conflicts that may impact its operations[192]. - The company has not engaged in any off-balance sheet financing activities since inception[194]. - The company is evaluating the impact of several recently issued Accounting Standards Updates (ASUs) on its financial reporting, including ASU 2023-09 and ASU 2024-3[150][151].

Acquisition and Divestiture - The company completed the acquisition of Newtek Technology Solutions, Inc. on January 2, 2025, and divested its telecommunications services provider, Vumber, along with the Paltalk and Camfrog applications[18]. - The company completed the acquisition of NTS on January 2, 2025, for a total consideration of $4,000,000 in cash and 4,000,000 shares of Series A Preferred Stock, with potential earn-out payments of up to $5,000,000 based on future performance[194]. - The company also completed the divestiture of certain assets to Meteor Mobile for $1,350,000 in cash, with additional earn-out payments based on future revenue from the divested business[196]. Financial Performance - Revenue for the year ended December 31, 2025 increased by 2050% to approximately $23.6 million compared to $1.1 million for the year ended December 31, 2024, due to the Acquisition[153]. - Revenue for the three months ended December 31, 2025 increased by 2092% to approximately $6.1 million compared to $0.3 million for the same period in 2024, attributed to the Acquisition[154]. - Operating loss from continuing operations for the year ended December 31, 2025 was $4.7 million, a decrease from $5.1 million for the year ended December 31, 2024[155]. - Net loss from continuing operations for the year ended December 31, 2025 totaled $2.0 million, a significant improvement from a net loss of $4.3 million for the year ended December 31, 2024[155]. - Adjusted EBITDA for the three months ended December 31, 2025 was positive $5.0 thousand, compared to negative $1.5 million for the same period in 2024, marking a 100% improvement[155]. - Cash provided by operations was $1.1 million for the year ended December 31, 2025, compared to cash used in operations of $3.0 million for the year ended December 31, 2024[155]. - Total revenue increased by 2,049.9% to $23,612,459 for the year ended December 31, 2025, compared to $1,098,280 for the year ended December 31, 2024[179]. - Managed information technology revenue was $14,813,411, accounting for 62.7% of total revenue for the year ended December 31, 2025[180]. - Total costs and expenses increased by $22,111,809, or 355.5%, to $28,331,638 for the year ended December 31, 2025[182]. - Cost of revenue increased by $11,010,041, or 4,188.1%, primarily due to expenses related to new revenue streams acquired in connection with the Acquisition[183]. Cybersecurity and Regulatory Compliance - The company is subject to periodic examinations by regulators under the authority of the Federal Financial Institutions Examination Council, covering various subjects including cybersecurity and disaster preparedness[43]. - Company faces significant cybersecurity risks due to remote work policies and increasing cyberattack frequency, which could adversely affect its reputation and financial condition[47]. - Company may incur significant costs related to cybersecurity breaches, which could increase insurance costs and adversely impact financial results[49]. - The company has implemented a multi-layered defense strategy for cybersecurity, including continuous threat monitoring and zero trust security architecture[102]. - The company has not experienced any material adverse effects from cybersecurity threats to date[107]. - The company is subject to regulatory oversight by the FFIEC, and non-compliance could result in adverse actions impacting operations[72]. - Evolving government regulations may impose additional costs and operational challenges, affecting financial results[73]. - Concerns regarding AI technologies may lead to regulatory restrictions that could limit product offerings and negatively impact business[74]. Intellectual Property - The company has a portfolio of eight issued patents and intends to continue defending its intellectual property rights while generating revenue through licensing fees[36]. - The company holds eight patents and aims to protect intellectual property, but challenges in enforcement may arise[75]. - The company is actively involved in defending against patent infringement claims from Cisco regarding its ManyCam software[116]. - The company received a jury award of $65.7 million in a patent infringement lawsuit against Cisco, with the final judgment entered on October 8, 2024[112]. - The company estimates it will receive no more than one third of the gross proceeds from the jury award due to litigation-related expenses[115]. Employee and Operational Insights - The company had 53 full-time employees and one part-time employee as of March 13, 2026, emphasizing the importance of hiring and retaining qualified personnel for future success[32]. - Company’s ability to attract and retain customers is critical, with high customer churn rates possible if needs are not met[59]. - Company’s future success is dependent on the performance of key executives, with potential adverse effects on operations if they leave[64]. - Company may face challenges in hiring and retaining qualified personnel, which could impact its ability to execute strategies and maintain customer relationships[63]. Market and Competitive Landscape - The company operates in a highly competitive industry, with pressure on prices potentially affecting gross margins if costs cannot be reduced accordingly[51]. - The company differentiates itself from competitors by offering a consultative approach that delivers personalized, expert-driven solutions rather than a one-size-fits-all model[41]. - Company relies on a limited number of customers, with Newtek accounting for 32.5% of revenue for the fiscal year ended December 31, 2025[52]. Future Plans and Strategic Initiatives - The company plans to launch an AI Data Readiness solution in Q2 2026, aimed at improving the reliability and security of adopting AI technologies[26]. - The company aims to drive growth by investing in proprietary solutions and expanding its sales and marketing efforts, particularly in cloud infrastructure and cybersecurity sectors[33]. - The company plans to continue exploring strategic opportunities, including potential mergers or acquisitions that are synergistic to its business[155]. Financial Position and Capital Management - As of December 31, 2025, the company had $8.4 million of cash and cash equivalents, including $1.0 million of restricted cash, with no long-term debt[155]. - The company has a secured revolving line of credit of up to $1 million, maturing on April 10, 2026, with no amounts outstanding as of the report date[144]. - The company expects long-term liquidity to be sufficient to meet its needs, but may require additional liquidity if business conditions change[191]. - The company approved a Stock Repurchase Plan on May 8, 2025, for up to $400,000 of common stock, with 151,258 shares repurchased for approximately $304,887 as of December 31, 2025[193]. - Future minimum lease payments as of December 31, 2025, totaled approximately $1,181,617, with $789,270 due within the next twelve months[204].

Financial Performance - In 2025, lululemon generated net revenue of $7,847,044, a decrease of 1.0% compared to $7,928,156 in 2024[23] - The company achieved net revenue growth of 5%, with a 22% increase in international regions, while the Americas experienced a decrease of 1%[180] - Net revenue from China Mainland increased by 28.9% to $1,754,799 in 2025, compared to $1,361,337 in 2024[28] - The Americas accounted for 71% of total net revenue in 2025, with a focus on product innovation and localized assortments[22] - The Rest of World segment, including APAC and EMEA, generated net revenue of $1,500,757, reflecting a growth of 15.6% from $1,298,633 in 2024[31] - Net revenue increased by 5% to $11.1 billion, with comparable sales rising by 2%[190] - Net revenue for the Americas segment decreased by $81.1 million (1.0%) to $7,847.0 million, primarily due to a 3% decrease in comparable sales[212] Product Categories - Women's, men's, and accessories categories represented 63%, 24%, and 13% of net revenue in 2025, respectively[16] - The company aims to expand its product offerings and innovate in performance fabrics to attract and retain customers[15] - Approximately 40% of products were manufactured in Vietnam, with significant portions also from Cambodia (18%), Sri Lanka (11%), Indonesia (11%), and Bangladesh (7%)[115] - Approximately 40% of products were manufactured in Vietnam, with the largest manufacturer producing 15% of total products[43] Store Operations - The number of company-operated stores increased from 767 in 2025 to 811 in 2026, with significant growth in Mexico and China Mainland[34] - The company opened 44 net new company-operated stores, contributing to an 11% increase in square footage[181] - New or expanded company-operated stores contributed an increase of $192.4 million to net revenue, with 14 net new stores opened since 2024[212] Financial Metrics - Gross margin decreased by 260 basis points to 56.6%, primarily due to increased tariffs and markdowns[190] - Operating margin decreased by 380 basis points to 19.9%, with income from operations down 12% to $2.2 billion[200] - Selling, general and administrative expenses increased by 8.1% to $4.07 billion, representing 36.6% of net revenue[207] - The increase in product costs was $249.2 million (10.7%), attributed to higher tariffs and increased markdowns[212][213] Strategic Initiatives - The company plans to continue investing in digital and omni-channel capabilities to enhance customer experience and brand awareness[21] - The company launched the Impact Agenda 2030 in 2025, focusing on employee wellbeing and sustainability[49] - The company is focusing on three strategic pillars: product creation, product activation, and enterprise efficiency to drive improvement in North America[186] Risks and Challenges - The athletic apparel market is highly competitive, with increasing competition from both established companies and new entrants[47] - The company faces risks related to maintaining brand value and reputation, which are critical for its expansion strategies[64] - The company is experiencing macroeconomic volatility, with inflation and economic uncertainty leading to lower store traffic and discretionary spending in 2025[92] - Changes in U.S. tariff and customs policy have increased product costs, which are expected to continue affecting margins and profitability into 2026[90] - Supply chain disruptions due to geopolitical events, public health crises, or natural disasters could materially impact operating and financial results[111] Employee and Management - As of February 1, 2026, the company had approximately 39,000 employees worldwide[55] - The company achieved gender pay equity globally and full pay equity in the United States[52] - Recent changes in senior management may create uncertainty and disrupt operations, potentially impacting financial performance and stock price[84] Shareholder Actions - The board of directors approved a new stock repurchase program authorizing up to $4.0 billion, with $1.0 billion initially authorized on November 29, 2023[172] - During the fourth quarter of 2025, the company repurchased a total of 1,430,667 shares at an average price of $198.90 per share[174] - The maximum dollar value of shares that may yet be purchased under the repurchase plans is approximately $1.4 billion[174] - The company does not anticipate paying any cash dividends on its common stock in the foreseeable future[167] Compliance and Legal - The company is subject to various privacy and data protection laws, including GDPR, PIPEDA, CCPA, and PIPL, which increase compliance costs and operational complexity[127] - Significant breaches of privacy laws could lead to regulatory enforcement, fines, and adverse impacts on the company's reputation and financial condition[128] - The company faces risks related to cybersecurity, including potential legal and financial exposure from data breaches and evolving regulatory requirements[126] Environmental and Social Governance (ESG) - The company faces scrutiny regarding its ESG practices, which could lead to reputational and legal consequences if perceived as insufficient[146] - The company may incur additional costs to comply with evolving ESG disclosure frameworks and stakeholder expectations[147] - Climate change poses physical and transitional risks that could disrupt the supply chain and increase operational costs[142]

Revenue Performance - Revenue for Q4 2025 was $93.5 million, a decrease of 1.5% from $94.9 million in Q4 2024, with cross-platform revenue growing by 9.6%[5] - Full-year revenue for 2025 was $357.5 million, up 0.4% from $356.0 million in 2024, driven by a 24% growth in cross-platform solutions[8] - Total revenues for 2025 were $357,469 thousand, a slight increase from $356,047 thousand in 2024, but a decrease from $371,343 thousand in 2023[28] - Revenues from Content & Ad Measurement for 2025 were $304,270 thousand, accounting for 85.1% of total revenues, with a 1.0% increase from 2024[37] - Syndicated Audience revenue grew from $260,654 thousand in 2024 to $253,932 thousand in 2025, representing 70.9% of total revenue[37] - Cross-Platform revenue increased by 24.4% from $40,470 thousand in 2024 to $50,338 thousand in 2025[37] Profitability and Loss - Net loss for 2025 was $10.0 million, significantly improved from a net loss of $60.2 million in 2024, resulting in net loss margins of 2.8%[13] - Income per share attributable to common shares in 2025 was $4.30, compared to a loss per share of $(15.53) in 2024[13] - The net loss for 2025 was $10,004 thousand, significantly improved from a net loss of $60,248 thousand in 2024 and $79,361 thousand in 2023[28] - Net income available to common stockholders for 2025 was $22,569 thousand, compared to a loss of $77,848 thousand in 2024[28] - Basic net income per common share for 2025 was $4.30, a recovery from a loss of $15.53 per share in 2024[28] - The company reported a net loss margin of (2.8)% for 2025, improving from (16.9)% in 2024[32] Expenses and Costs - Core operating expenses for 2025 were $350.4 million, up 1.0% from $347.1 million in 2024, mainly due to higher employee compensation and royalties[12] - Cost of revenues for 2025 was $212,761 thousand, up from $208,708 thousand in 2024[28] - Stock-based compensation expense for Q4 2025 was a benefit of $(206) thousand, compared to an expense of $924 thousand in Q4 2024[36] - The company incurred transformation costs of $2,860 thousand in 2025, aimed at strategic projects with long-term benefits[32] Cash and Assets - Cash, cash equivalents, and restricted cash totaled $26.8 million as of December 31, 2025, with no outstanding borrowings under the revolving credit facility[15] - Cash and cash equivalents at the end of 2025 were $23,621 thousand, down from $29,937 thousand in 2024[30] - Net cash provided by operating activities for 2025 was $22,736 thousand, an increase from $18,104 thousand in 2024[30] - Total assets decreased to $407,709 thousand in 2025 from $430,247 thousand in 2024[26] - Total liabilities decreased to $206,548 thousand in 2025 from $231,040 thousand in 2024[26] EBITDA and Financial Adjustments - Adjusted EBITDA for Q4 2025 was $14.7 million, compared to $14.2 million in Q4 2024, with adjusted EBITDA margins of 15.7%[10] - Non-GAAP adjusted EBITDA for 2025 was $42,035 thousand, compared to $40,988 thousand in 2024, reflecting a margin of 11.8%[32] - The company completed a recapitalization transaction that eliminated an $18.0 million annual dividend burden and enhanced alignment between common and preferred stockholders[8] Future Outlook - The company expects Q1 2026 revenue to be roughly flat compared to Q1 2025, with continued double-digit revenue growth anticipated from cross-platform offerings[17] - Research & Insight Solutions revenue decreased by 3.1% from 2024, primarily due to lower deliveries of certain custom digital products[11]