Business Strategy and Operations - AgEagle has transitioned from manufacturing fixed-wing farm drones to offering a full-stack drone solution, acquiring three market-leading companies in 2021 to enhance its UAS capabilities[20] - The company is focused on evaluating merger and acquisition opportunities to expand its product offerings and improve its cost structure[22] - AgEagle plans to relocate its headquarters to Allen, Texas in 2026, enhancing its operational capabilities[23] - The company plans to establish a new manufacturing facility in Texas, expected to begin operations in 2026, to capitalize on the demand for "Made in America" drones[39] - The company intends to consider additional strategic transactions, including acquisitions, joint ventures, or investments to expand or complement its current business[137] - Future acquisitions may involve substantial investments, which could dilute existing shareholders' interests or lead to increased debt[138] - The company faces challenges in generating sufficient revenue to achieve sustainable profitability and maintaining market share[114] Product Development and Technology - The eBee line of drones has logged over 500,000 flight hours and completed more than one million successful missions, demonstrating significant operational experience[28] - The eBee TAC was the first drone approved for the U.S. Department of War's Blue UAS Cleared List, allowing for immediate procurement by U.S. government agencies[28] - The eBee X can achieve a flight time of up to 90 minutes and cover up to 500 hectares in a single flight, making it suitable for BVLOS operations[30] - AgEagle's eBee VISION has been successfully tested by European Armed Forces, leading to multiple orders for prototypes in late 2023[32] - The Altum-PT sensor, introduced in early 2022, offers twice the spatial resolution of its predecessor, enabling deeper analytical capabilities and broader applications in agriculture[38] - AgEagle's RedEdge-P sensor, launched in early 2022, provides three times the capture speed and twice the spatial resolution of the RedEdge-MX, enhancing data collection efficiency for agricultural and forestry applications[41] - AgEagle's eBee X series drones are the first to comply with Category 3 of the FAA's Operations of Small Uncrewed Aerial Systems Over People rules, facilitating broader commercial applications[50] - AgEagle's new RedEdge-P™ dual sensor was released in May 2023, enhancing analytical capabilities for environmental monitoring and vegetation analysis[208] Financial Performance - Total revenue for 2025 was $12,811,082, a decrease from $13,392,777 in 2024, with drone revenue increasing to $7,857,059 from $6,410,305[55] - As of December 31, 2025, the company reported an accumulated deficit of approximately $231.2 million, with a net loss of approximately $5.3 million for the year ended December 31, 2025, and a net loss of $35.0 million for the year ended December 31, 2024[78] - The company expects to incur significant additional operating expenses as it continues to invest in its business strategy and growth[78] - The company will require additional funding to support ongoing research and development activities and the commercialization of existing and new products[79] - The company has a history of operating losses and cannot guarantee when it will generate sufficient cash flows from operations[78] Market and Industry Trends - The global military drone market is projected to grow from $24.25 billion in 2025 to $56.69 billion by 2033, with a CAGR of 11.20% during the forecast period[36] - The U.S. Department of Transportation plans to award $100 million in grants for drone use in critical infrastructure projects, supporting domestic drone manufacturers[35] - AgEagle aims to capture a significant share of the global drone market, particularly in agriculture, energy/utilities, infrastructure, and government/military sectors[204] - Global economic challenges, including rising inflation and supply-chain disruptions, pose risks to operational and financial performance, impacting the ability to manufacture drones and sensors[213] Compliance and Regulatory Environment - Regulatory approvals for UAV operations are uncertain, and public privacy concerns may restrict the expansion of drone solutions in commercial markets[136] - Compliance with the Foreign Corrupt Practices Act and other anti-bribery laws is critical, as violations could lead to severe penalties and disrupt business operations[152] Risks and Challenges - The company faces significant risks and uncertainties that could materially harm its business and financial condition if not addressed successfully[115] - Product development for UAV systems is costly and time-consuming, with significant investments required in research and development, which may not yield returns for several years[116] - Successful technical development does not guarantee commercialization, as market acceptance depends on demonstrating product capabilities and competition from established players[117] - The company competes with firms that have greater resources, which may allow them to offer superior products or more competitive pricing, potentially impacting the company's margins[118] - The company maintains cash deposits exceeding federally insured limits, which poses liquidity risks if financial institutions face adverse developments[127] - The company relies on subcontractors for performance, and failures in their obligations could compromise contract fulfillment and damage the company's reputation[128] Human Capital and Corporate Governance - As of March 31, 2026, the company employed 58 full-time employees and 1 part-time employee, emphasizing the importance of human capital[63] - The company maintains a focus on employee health and safety, adhering to established safety procedures and regulatory requirements[66] - The company relies heavily on senior management and key employees, and their loss could significantly harm business objectives and customer relationships[156] Shareholder and Market Information - The company does not intend to pay cash dividends, focusing instead on retaining earnings for business development[161] - The market price of the company's securities may be volatile, influenced by factors such as stock sales by executives and announcements related to product developments[159] - The Common Stock reached a high of $3.40 and a low of $0.75 per share during the fiscal year 2025[160] - The quarterly high and low closing sales prices for Common Stock in 2025 were $3.40 and $0.75, respectively[191] - As of March 31, 2026, there were approximately 294 individual shareholders of record for the Common Stock[191]

Transaction and Financial Implications - The Transaction Agreement with Lilly involves the acquisition of the entire issued share capital of the Company at a price of $38.00 per share, plus contingent value rights (CVRs) potentially worth up to $9.00 per share based on specified milestones[198]. - The Company may incur significant costs related to the Transaction, including approximately $63 million in termination fees under certain circumstances, which could adversely affect its financial condition if the Transaction is not completed[202]. - The completion of the Transaction is subject to customary closing conditions, including shareholder approval and regulatory clearances, which are beyond the Company's control[199]. - The announcement of the Transaction may create uncertainty and disrupt business operations, potentially affecting relationships with partners and stakeholders[201]. - The CVRs issued to shareholders may expire valueless if specified milestones are not achieved, limiting potential future benefits from the Transaction[207]. Operational and Personnel Challenges - As of December 31, 2025, the Company had 118 full-time equivalent employees, and future growth may require additional personnel across various functions, impacting management's focus on day-to-day operations[212]. - The Company may face challenges in attracting and retaining key personnel, which could hinder its ability to develop and commercialize product candidates[212]. - The company relies on a small team of 118 full-time equivalent employees across various geographies, which may limit operational capacity[217]. - The transition to a new CEO, effective January 1, 2026, is critical for executing the company's business strategy and may involve inherent risks[216]. Financial Position and Funding Needs - As of December 31, 2025, the company had cash, cash equivalents, and investments totaling $577.1 million, expected to fund operations into mid-2028[233]. - The company has incurred significant net losses since inception and does not anticipate generating revenue from product sales for several years, if ever[223][228]. - The company expects to incur significant expenses as it continues research and clinical development, with potential fluctuations in net losses from quarter to quarter[223][227]. - The company may need to seek additional funding sooner than planned due to uncertainties in capital consumption and operational needs[233]. - The company will seek additional funding through public or private equity offerings, debt financings, or a combination of these sources, with potential dilution for shareholders if equity securities are issued[237]. Product Development and Regulatory Risks - The Company faces risks related to the successful development of its product pipeline, which is critical for generating future revenue and maintaining its financial position[208]. - The company has three product candidates in clinical development, with the remainder in preclinical stages, emphasizing the need for regulatory approvals for commercialization[253]. - Delays in clinical trials due to various factors could significantly impact development timelines and costs, affecting the company's ability to bring products to market[253]. - The company may encounter delays in obtaining Investigational New Drug applications (INDs) or face suspensions of clinical trials due to safety concerns or regulatory issues[258]. - The company has limited experience in managing clinical trials necessary for regulatory approvals, which typically take many years[279]. Intellectual Property and Legal Challenges - The company faces risks related to intellectual property, including the need to obtain licenses from third parties, which could harm business if not secured on reasonable terms[336]. - The patent prosecution process is expensive and time-consuming, and failure to file necessary applications could hinder the ability to secure patent protection[342]. - The company may face challenges regarding the validity and enforceability of its patents, which could adversely affect its ability to commercialize product candidates[357]. - Legal proceedings to enforce patents could lead to counterclaims of invalidity, which are common in patent litigation and could result in loss of patent protection[358]. - The company may incur significant expenses from intellectual property claims, which could harm its financial condition and operational results[362]. Market and Competitive Environment - The company faces significant competition in a rapidly changing technological environment, which may adversely affect its ability to market or commercialize product candidates[289]. - Competitors may develop therapies that are safer, more effective, or less expensive, potentially limiting the company's market opportunities[291]. - Market opportunities for future oncology products may be limited, as they target patients ineligible for or who have failed prior treatments[311]. - Estimates of patient populations for future oncology products may be inaccurate, potentially leading to lower than expected eligible patients[312]. Manufacturing and Supply Chain Risks - Manufacturing processes are complex and subject to disruptions, which could materially impact development and commercialization[323]. - The company relies on third-party manufacturers for product candidates, exposing it to risks such as supply chain shortages and quality control issues[328]. - Problems in the supply chain or manufacturing processes could restrict the ability to meet future market demand for products[327]. - Legislative proposals in the U.S. could negatively impact funding for biotechnology providers, potentially causing supply chain disruptions[332].

Financial Performance - DSS, Inc. reported year-over-year revenue growth and increased printed product sales within the Product Packaging segment for Q1 2025[19]. - Total revenue for the year ended December 31, 2025, increased by 9% to approximately $20.8 million compared to $19.1 million in 2024[134]. - Revenue from printed products rose by approximately 12% to $18.1 million, driven by new and existing customer orders[134]. - Commercial lending revenue fell by approximately 80% to $45,000, attributed to loans going on non-accrual[134]. - Total costs and expenses decreased by 43% to $35.2 million from $61.7 million in 2024[135]. - Interest income decreased by 92% year-over-year to $19,000 in 2025, primarily due to several notes being put on non-accrual as borrowers showed inability to pay timely[145]. - The loss on investments was $807,000 in 2025, a significant decline compared to a gain of $224,000 in 2024, primarily due to the performance of True Partners Capital Holdings Limited[150]. - Net cash used by operating activities was approximately $9.1 million in 2025, compared to $8.8 million in 2024, reflecting a decrease in net loss adjustments[157]. - Net cash provided by investing activities increased to approximately $18.1 million in 2025 from $12.1 million in 2024, including $15.7 million from real estate sales[158]. - Net cash used by financing activities was approximately $14.1 million in 2025, primarily due to payments toward long-term debt[159]. Strategic Initiatives - DSS aims to reduce costs by 15-20% in the upcoming fiscal year to improve profitability and strengthen its financial position[23]. - The Company is strategically expanding key business units, such as Premier Packaging, to drive growth and contribute to long-term revenue generation[22]. - DSS is committed to exploring untapped markets to create scalable and recurring revenue streams across multiple sectors[23]. - The Company is focusing on advancing research and development in emerging sectors, such as biomedical technologies and sustainable packaging[23]. - The Company is implementing metrics-driven accountability systems across all business units to ensure consistent execution of high-priority opportunities[23]. Intellectual Property and Innovation - Impact BioMedical announced the issuance of a U.S. patent related to its 3F™ intellectual property portfolio, expanding its patent protection[21]. - DSS holds nine issued patents and over forty pending patents worldwide, with expiration dates ranging from 2029 to 2040, enhancing its competitive position[48]. - Key products in development include LineBacker for various diseases, Equivir for antiviral treatments, and Laetose, a sugar alternative believed to lower glycemic index by 30%[46]. - The company plans to develop additional new inventions and intellectual property, which will require significant capital and time, with risks of not yielding viable results[88]. - Patent application delays could hinder revenue recognition from internally generated patents and may result in missed licensing opportunities[91]. Market and Customer Concentration - As of December 31, 2025, one customer accounted for approximately 29% of consolidated revenue, indicating a significant reliance on key clients[58]. - The company reported that five customers accounted for 19%, 18%, 13%, 12%, and 11% of its trade accounts receivable balance as of December 31, 2025, highlighting customer concentration risk[73]. - The company emphasizes sustainability in its packaging operations, working closely with suppliers to meet rigorous sustainability standards[60]. Financial Health and Risks - The company has outstanding indebtedness totaling approximately $37.0 million under the LifeCare Agreement, which is currently in default[72]. - The company faces risks related to intellectual property infringement, which could result in costly litigation and negatively affect financial condition[74]. - Future business expansion may strain management and financial resources, requiring additional controls and personnel[83]. - The company is subject to unique risks in its investments in Asia, including regulatory changes and trade restrictions, which could adversely affect earnings[82]. - The company has identified weaknesses in its internal control over financial reporting, which may lead to errors in financial statements and potential restatements, impacting investor confidence and stock price[86]. - The company incurred significant marketing and development costs for bio-health related products, with no assurance of commercial acceptance impacting financial results[76]. Operational Overview - The Company completed the sale of its Plano, Texas facility for $9.5 million, using a portion of the proceeds to reduce outstanding debt[19]. - The Company received FINRA approval for Sentinel Brokers Company to act as an underwriter for corporate securities offerings, including IPOs[18]. - The Company reported four operating segments for 2025, focusing on innovation and diversification, with Premier Packaging and Commercial Lending adapting to market demands[42]. - The Securities and Investment Management segment is a key growth pillar, expanding into real estate investment, digital securities, and wealth management solutions[42]. - Premier Packaging provides custom packaging services across various industries, including pharmaceuticals and consumer goods, and is involved in security printing and brand protection technologies[42]. - American Pacific Financial, the commercial lending arm, focuses on providing commercial loans and acquiring equity positions in undervalued financial entities across the U.S. and Asia[43]. - The Biotechnology segment is dedicated to addressing urgent medical needs, with ongoing research in drug discovery for neurological, oncology, and immuno-related diseases[44]. Compliance and Governance - The Company has been audited by Grassi & Co., CPAs, P.C. from 2022 to 2025, ensuring compliance with PCAOB standards[210]. - The Company’s financial statements for the year ended December 31, 2024, present fairly its financial position in conformity with GAAP[199]. - The valuation of real estate properties is a critical audit matter due to the complexity of valuation models and sensitivity to key assumptions[205]. - The Company is subject to numerous laws and regulations, and changes in these could significantly increase compliance costs[92]. Employee Relations - DSS has 102 employees as of December 31, 2025, and maintains good relations with its workforce, which is not covered by collective bargaining agreements[66].

Financial Performance - Net income attributable to the Company for 2025 was $16.4 million, or $4.89 per diluted share, an increase from $11.9 million, or $3.57 per diluted share in 2024[244]. - Net income attributable to the Company for the year ended December 31, 2025, was $16.4 million, an increase of 37.0% from $11.9 million in 2024, resulting in earnings per share of $4.89 compared to $3.57[262]. - The total annual shareholder return was 87.3% for 2025, significantly higher than 19.6% in 2024[244]. Operational Efficiency - The efficiency ratio decreased to 58.4% in 2025 from 64.1% in 2024, indicating improved operational efficiency[244]. - Return on average assets improved to 1.34% in 2025 from 1.02% in 2024, while return on average equity increased to 13.18% from 10.97%[244]. Asset and Loan Growth - Total assets grew to $1,271.995 million in 2025, up from $1,187.523 million in 2024[258]. - Net loans increased to $654.1 million in 2025, compared to $631.2 million in 2024[258]. - Net loans receivable increased by $22.9 million from $631.2 million at December 31, 2024 to $654.1 million at December 31, 2025, driven by increases in multifamily residential, commercial real estate, and home equity loans[288]. - Total deposits increased by $56.6 million to $1.12 billion at December 31, 2025, with time deposits and non-interest bearing deposits rising by $37.5 million and $22.1 million, respectively[291]. Income and Expenses - Net interest income rose by $6.4 million, or 17.8%, from $35.8 million in 2024 to $42.2 million in 2025, driven by an increase in the average tax-equivalent yield on interest-earning assets[263]. - Noninterest income rose to $8.465 million in 2025, up from $7.656 million in 2024[258]. - Noninterest expenses increased by $1.7 million in 2025, primarily due to higher compensation and benefits, and occupancy and equipment expenses[270]. - Provision for credit losses decreased from $1.4 million in 2024 to $1.1 million in 2025, reflecting a lower incremental change in estimated lifetime expected credit losses[268]. Interest Rates and Yield - The average yield on total loans increased from 6.05% in 2024 to 6.29% in 2025, reflecting improved interest income[282]. - The interest rate spread improved to 3.12% in 2025 compared to 2.70% in 2024, indicating better management of interest-earning assets[282]. - The effective tax rate increased to 17.7% in 2025 from 15.6% in 2024, resulting in an increase in income tax expense of $1.3 million[271]. Capital and Shareholder Equity - Total stockholders' equity attributable to the Company increased by $23.2 million from $114.6 million at December 31, 2024, to $137.8 million at December 31, 2025[293]. - The community bank leverage ratio improved to 11.01% in 2025 from 10.57% in 2024, indicating stronger capital position[261]. Strategic Plans and Growth Opportunities - The Company plans to enhance profitability by expanding product offerings and leveraging technology investments[247]. - Management intends to focus on growth in the loan portfolio and secondary market lending programs in 2026[247]. - The Company is evaluating growth opportunities through acquisitions to expand its market area and market share[247]. Risk Management - The Company has developed strategies to manage liquidity and reduce exposure to interest rate fluctuations by emphasizing short-term commercial and consumer loans[302]. - The Company does not engage in hedging activities or maintain a trading account for any class of financial instrument, thus avoiding foreign currency exchange rate risk[303]. - Management evaluated and adjusted deposit rate betas and key interest rate index ties during the year ended December 31, 2025, to reflect the current interest rate environment[312]. Market and Regulatory Compliance - The Bank maintained a CBLR of 11.01% as of December 31, 2025, in compliance with all regulatory capital requirements[299]. - Recent accounting pronouncements impact is discussed in Note 1 of the accompanying Notes to Consolidated Financial Statements[314]. - Market risk analysis is detailed in "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations – Market Risk Analysis" in the Annual Report on Form 10-K[315].

Financial Performance - Alpha Modus reported royalty revenue of $7,138 for the year ended December 31, 2025, compared to $0 in 2024[305]. - The company experienced a net loss of $8,021,235 for the year ended December 31, 2025, a decline from a net income of $4,103,067 in 2024[308]. - Total other expenses for 2025 amounted to $2,777,047, including $3,981,641 in interest expense, contrasting with total other income of $4,938,162 in 2024[307]. Operating Expenses - Operating expenses increased significantly to $5,251,326 in 2025 from $834,895 in 2024, primarily due to higher professional fees and consulting costs[306]. - Cash used in operations was $3,210,182 for the year ended December 31, 2025, compared to $1,676,499 in 2024[310]. Cash Reserves and Financing - As of December 31, 2025, Alpha Modus had cash reserves of $68,000 and indicated a need to raise at least $2,500,000 to support ongoing operations[309]. - The company had net cash provided by financing activities of $2,550,418 in 2025, slightly down from $2,664,610 in 2024[311]. Strategic Plans - Alpha Modus plans to enhance consumer in-store experiences through data-driven technologies, including smart planograms and inventory management solutions[298]. - The company is classified as an emerging growth company and intends to utilize the benefits of the JOBS Act for financial reporting[314]. Off-Balance Sheet Arrangements - Alpha Modus does not have any off-balance sheet arrangements that could materially affect its financial condition[304].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended: December 31, 2025 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to ____________ Commission File Number: 001-40775 ALPHA MODUS HOLDINGS, INC. (Exact name of registrant as specified in its charter) Delaware 86-3386030 ...

Financial Performance and Capital Needs - As of December 31, 2025, the company had unrestricted cash of approximately $78 thousand and net losses of approximately $2.8 million for the year [127]. - The company has generated limited revenues since inception and may never achieve long-term profitability [117]. - The company has a history of losses and uncertainty regarding future earnings and cash flows, which may be volatile [119]. - The company must raise significant capital to conduct its current and proposed businesses, including the purchase of the Property from Sportech [135]. - The company plans to raise additional capital through equity or debt financings, with a potential drawdown of $1 million under the Sportech Loan facility [128]. - The company may not receive all anticipated proceeds from private placements, which could necessitate seeking additional capital under unfavorable terms [251]. Agreements and Funding - The company has entered into a Contribution Agreement with Sportech, which includes up to $10 million in funding for operations through 2027, contingent on the company's listing on a U.S. national stock exchange [123]. - Sportech has agreed to provide up to $10 million to fund the business and operations of the company through 2027, contingent on the company's listing on a U.S. national stock exchange [137]. - The company has entered into a Lease Agreement with Sportech for an initial term of three years, with an option to purchase the Property at €29.17 (approximately $34) per m² [135]. - The company has entered into a subscription agreement to sell up to $5.4 million of class A common stock at a price of $3.65 per share, representing the issuance of up to 1,480,937 shares [139]. - The company has entered into a Standby Equity Purchase Agreement (SEPA) with Yorkville, allowing for the purchase of up to $30 million of common stock over a period of 36 months [238]. - The company has entered into private placement agreements for an aggregate of approximately $7.13 million, having received approximately $3.85 million to date [251]. Operational Risks and Challenges - The company is dependent on the performance and popularity of Cádiz CF's men's first team, which could materially impact business results [116]. - The company may face challenges in attracting and retaining students for its programs, which could adversely affect business prospects [116]. - The company is subject to risks associated with international expansion and operations in foreign markets, which may impact overall business performance [116]. - The company faces intense competition in the sports merchandise industry, which is highly fragmented and includes both large companies and private labels [157]. - The company faces risks related to the infringement of its intellectual property rights, which could adversely affect its brand value and financial condition [176]. - The company may struggle to manage and adapt to technological changes, which could adversely affect its competitive position and financial results [208]. Construction and Development - The construction of JP Financial Arena is projected to be completed in the 2031 calendar year, involving over 26,600 m² of public open space and 1,800 parking spots [131]. - The total funding required for the development of JP Financial Arena and its associated infrastructure is estimated to be €285 million (approximately $334.1 million) [136]. - The development of JP Financial Arena is expected to be capital intensive and require more human resources than currently available [175]. - Public health issues, such as a pandemic, could negatively affect operations and visitor traffic towards JP Financial Arena [141]. - There is a risk of personal injury claims at events held at JP Financial Arena, which could increase operational expenses despite existing insurance coverage [198]. Market and Economic Factors - Economic and political risks associated with international operations may adversely affect profitability and growth prospects [152]. - Fluctuations in raw material costs and supply chain expenses could negatively impact profit margins and overall financial condition [162]. - The popularity of soccer, particularly in Spain, is crucial for the company's revenue streams, including ticket sales and sponsorships [186]. - Injuries to Cádiz CF players could adversely affect team performance and, consequently, the company's financial results [187]. - The company's financial success is expected to depend on Cádiz CF's popularity and competitive success, which cannot be guaranteed [188]. Governance and Compliance - The company is classified as an "emerging growth company," allowing it to take advantage of reduced disclosure requirements, which may affect investor attractiveness [218]. - As of December 31, 2025, executive officers and directors, along with major stockholders, own approximately 92.74% of the voting power, enabling significant control over corporate decisions [222]. - The company may face challenges in enforcing civil liabilities against its directors and management due to their non-resident status in the U.S. [215]. - Compliance with La Liga's financial and operational disclosure requirements may increase administrative burdens and costs for the company [212]. - Changes in laws and regulations regarding corporate governance are creating uncertainty and increasing compliance costs for the company [232]. Financial Reporting and Internal Controls - Material weaknesses in internal control over financial reporting have been identified, which could adversely affect the company's ability to accurately report financial results [233]. - The company is actively working to remediate identified material weaknesses, but there is no assurance that these efforts will be successful [234]. - The company may not be able to maintain effective internal controls, which could lead to restatements of financial statements and negatively impact investor confidence [235]. - Compliance with the Sarbanes-Oxley Act and other regulations increases legal and financial compliance costs, impacting overall business operations [230]. Strategic Initiatives - The company may pursue acquisitions and strategic transactions to expand its business, which could involve significant risks and capital commitments [174]. - The company plans to hire between four to six employees in Spain and two to four in the United States to support operations, particularly for the JP Financial Arena project [175]. - The success of the Nomadar HPT depends on student enrollment and the ability to develop and market training programs effectively [206]. - Nomadar has entered into an exclusive 20-year license agreement with Cádiz CF for the Mágico González brand, with Cádiz CF entitled to 15% of net sales from this brand [156]. - The company has entered into a 20-year HPT License Agreement with Cádiz CF, entitling Cádiz CF to 15% of net sales from the commercialization of the Nomadar HPT [203].

Financial Performance - The Company incurred significant losses and experienced negative cash flows, raising substantial doubt about its ability to continue as a going concern[29]. - Net loss for 2025 was $26,084,000, compared to a net loss of $8,983,000 in 2024, representing an increase in losses of approximately 190%[191]. - Loss from continuing operations for 2025 was $4,624,000, compared to a loss of $1,850,000 in 2024, an increase of approximately 150%[191]. - Total operating expenses increased from $1,941,000 in 2024 to $4,068,000 in 2025, an increase of approximately 109%[191]. - The company reported no revenue for 2025, consistent with the previous year[191]. - Discontinued operations reported a revenue of $6,009,000 for the year ended December 31, 2025, a decrease from $11,386,000 in 2024[95]. - The loss from discontinued operations, net of tax, was $21,460,000 for the year ended December 31, 2025, compared to a loss of $7,076,000 in 2024[95]. Cash and Liquidity - As of December 31, 2025, the Company had approximately $0.74 million in cash and cash equivalents and restricted cash, which is insufficient to fund ongoing operating costs[28]. - Cash and cash equivalents decreased from $1,417,000 at the beginning of 2025 to $739,000 at the end of 2025, a decrease of approximately 48%[195]. - The Company did not have committed sources of financing during 2025, which may impact its liquidity position[102]. - If unable to complete a special transaction or obtain additional capital, management may need to significantly curtail operations or pursue an orderly wind-down[107]. - The Company has contractual obligations totaling $513,000 due within one year, including operating lease obligations[108]. Strategic Alternatives - The Company is actively evaluating strategic alternatives to enhance stockholder value, including potential acquisitions and additional asset sales[19]. - Management is actively evaluating strategic alternatives to enhance stockholder value and improve liquidity, which may include special transactions[106]. - Global economic conditions and capital market volatility may adversely affect the Company's ability to obtain financing or complete a strategic transaction[42]. Shareholder and Stockholder Information - As of March 16, 2026, the largest stockholder beneficially owned approximately 61.3% of the outstanding common stock, giving them significant influence over corporate matters[53]. - As of March 31, 2026, First Finance Ltd. owned 1,641,162 shares, representing 61.3% of the outstanding common stock[157]. - The total number of shares beneficially owned by directors and executive officers as of March 31, 2026, was 2,789, representing 0.01% of the total[157]. Corporate Governance - The Audit and Compliance Committee includes Eric L. Robinson as Chairman, who is recognized as an "audit committee financial expert"[139]. - The Board of Directors determined that three directors are independent according to NASDAQ standards, ensuring no conflicts of interest[164]. - The Company has established insider trading policies that include quarterly blackout periods for trading in the company's securities[137]. - The company’s Code of Ethics is available on its website, ensuring compliance among directors, executive officers, and employees[136]. - The Audit and Compliance Committee will review transactions exceeding $120,000 involving directors or executives to ensure they align with the best interests of the Company[160]. Asset Sales and Transformations - The Company completed the sale of certain intellectual property and product inventory to Biamp Systems for gross cash consideration of $3.0 million on October 24, 2025[17]. - The Company completed the sale of substantially all of its operating intellectual property and related assets in October 2025, reporting these as discontinued operations[185]. - The Company completed the sale of a significant portion of its operating assets on October 24, 2025, leading to a shift in business focus[199]. - The Company incurred a loss on the sale of assets of $11,143,000 in the fourth quarter of 2025, primarily due to inventory write-downs[94]. Internal Controls and Compliance - The effectiveness of the Company's internal control over financial reporting was evaluated as effective as of December 31, 2025[120]. - The Company has no off-balance sheet arrangements that are likely to affect its financial condition or results of operations[110]. - The Audit and Compliance Committee reviewed all non-audit services provided by the independent registered public accounting firm and concluded they were compatible with maintaining independence[166]. Compensation and Employment - For the year ended December 31, 2025, Derek Graham's total compensation was $249,749, while Simon Brewer's was $307,477[142]. - The company terminated Derek Graham and Simon Brewer on December 31, 2025, with Graham receiving a severance of $57,500 and Brewer receiving no material severance[145][146]. - Simon Brewer was appointed Chief Financial Officer in April 2024, bringing over 25 years of experience in finance and operations[134]. Accounting and Fees - Audit fees for 2025 amounted to $217,655, a decrease of 11.3% from $245,493 in 2024[165]. - Tax fees increased to $68,527 in 2025 from $53,956 in 2024, reflecting a rise of 27%[165]. - Total accounting fees for 2025 were $286,182, down from $299,449 in 2024, representing a decrease of 4.4%[165]. - The Company paid $50,000 in consulting fees to Edward D. Bagley in 2025, with no stock options granted during that year[161].

Financial Performance - Turn Therapeutics Inc. reported net losses of approximately $3.19 million and $1.77 million for the years ended December 31, 2025 and 2024, respectively, with an accumulated deficit of approximately $22.39 million as of December 31, 2025[317]. - Total operating expenses increased by $4.06 million from $1.80 million in 2024 to $5.86 million in 2025, primarily due to legal and advisory services related to the company's direct listing[330][332]. - General and administrative expenses rose to $5.59 million in 2025, up from $1.55 million in 2024, driven by increased payroll costs and professional fees[332]. - Research and development expenses remained relatively stable, with a slight increase from $245,956 in 2024 to $265,570 in 2025[330][333]. - Net cash used in operating activities for the year ended December 31, 2025, was $2.56 million, primarily due to a net loss of $3.19 million[343]. - The company recognized stock-based compensation expenses of $0.42 million for the year ended December 31, 2025[343]. Liquidity and Capital Resources - The company had cash and cash equivalents of approximately $5.08 million as of December 31, 2025, compared to $0.87 million in 2024, indicating improved liquidity[318]. - As of December 31, 2025, the company has approximately $5.08 million in cash and cash equivalents to fund operations for the next 12 months[341]. - The company expects to incur significant additional costs, including research and development, general and administrative expenses, and marketing expenses, and plans to fund operations through equity and debt financing[342]. - The company plans to engage in additional debt and/or equity financing as necessary to fund operations and planned research and development activities[342]. - Net cash provided by financing activities for the year ended December 31, 2025, was $6.92 million, mainly from proceeds of common stock issuance[346]. - The company issued an initial draw-down notice to GEM for 1,235,200 shares, resulting in gross proceeds of $4.07 million at approximately $3.29 per share[341]. Assets and Liabilities - Total assets as of December 31, 2025, were reported at $12.16 million, with total liabilities of $7.48 million[338][339]. - The company had federal cumulative net operating loss (NOL) carryforwards of approximately $14.5 million and state NOL carryforwards of approximately $7.3 million as of December 31, 2025[355]. - The company has established a full valuation allowance against its net deferred tax assets, indicating it is unlikely to recognize these benefits in the near future[355]. Clinical Development and Future Plans - GX-03 is currently being evaluated in a randomized, double-blind clinical study for moderate-to-severe eczema, with topline results expected in the first half of 2026[314][319]. - The company anticipates requiring approximately $60.0 to $65.0 million to complete planned Phase 3 trials for eczema and onychomycosis, and $1.5 million to $2.5 million for its vaccine program[340]. - The company has licensed the K183681 medical device to Medline Industries, which is expected to contribute to future revenue streams[315]. Derivative Liabilities - The change in fair value of derivative liability instruments resulted in a net gain of $2.57 million for the year ended December 31, 2025[334]. - Net cash used in investing activities for the year ended December 31, 2025, was $152.99 thousand, primarily for capitalization of patent-related legal costs[345].

Store Operations and Growth Potential - Sportsman's Warehouse operates 147 stores across 32 states, with an average store size of approximately 37,000 gross square feet[50]. - Approximately 62% of the markets served currently lack another nationally recognized outdoor specialty retailer, indicating growth potential[40]. - The average net capital investment to open a new store is approximately $5.0 million, including about $2.5 million in initial inventory[40]. - The company does not plan to open any new stores in fiscal year 2026 while evaluating its short-term strategy[48]. - The store model is adaptable to various market sizes, from populations under 75,000 to over 1,000,000[58]. - The company targets a four-wall Adjusted EBITDA margin of more than 10% after the first 24 months of opening a new store[62]. - The company anticipates closing approximately five underperforming stores within the next year, after the 2026 holiday season[209]. Financial Performance and Sales - The company has achieved an average four-wall Adjusted EBITDA margin of over 10% for stores open for more than twelve months[40]. - In fiscal year 2025, consumables accounted for approximately 44% of unit sales and 21% of dollar sales[38]. - In fiscal year 2025, e-commerce driven sales exceeded 20% of total sales, with the website receiving more than 117 million visits[67]. - The Hunting and Shooting Sports department contributed 59.4% of net sales in fiscal year 2025, while Fishing sales grew to 11.2%[76]. - The camping department represented approximately 10.4% of net sales during fiscal year 2025, addressing both casual and heavy-use campers[77]. - The apparel department accounted for 7.3% of net sales in fiscal year 2025, with plans to grow private label lines[78]. - The company has incurred costs from litigation related to firearms and ammunition, which could adversely affect net sales and profitability[174]. - Elevated macroeconomic pressures have led to decreased revenue and a net loss since fiscal year 2023, impacting consumer discretionary spending[177]. Customer Engagement and Loyalty - As of January 31, 2026, the loyalty program had over 5.5 million members, representing approximately 57% of revenue[85]. - The company actively engages customers through in-store programs and educational seminars, organizing thousands of events annually[55]. - The company believes that the recruitment and training of Outfitters are central to its success, enhancing the customer experience[156]. Compliance and Regulatory Environment - The company is subject to various federal, state, and local laws regarding the sale of firearms, including the National Firearms Act and the Gun Control Act, which require maintaining FFLs and performing background checks[129]. - The company has never had an FFL revoked since its operations began in 1986, demonstrating strong compliance with federal, state, and local laws and regulations[144]. - The company dedicates significant resources to ensure compliance with applicable laws and regulations, including environmental regulations, which are not expected to materially affect its financial condition[147]. - The company is actively monitoring legislative changes that may impose additional restrictions on the sale and transfer of firearms and ammunition in various states[132]. Inventory and Supply Chain Management - The company carries over 22,000 SKUs on average in a single store, out of a total offering of almost 170,000 SKUs[38]. - The company purchased merchandise from approximately 765 vendors during fiscal year 2025, with no vendor accounting for more than 10% of total purchases[90]. - Approximately 2.3% of merchandise was imported directly from foreign vendors, primarily from China and El Salvador, exposing the company to geopolitical risks[189]. - The company relies on a single distribution center in Salt Lake City, Utah, which poses risks of disruption from natural disasters or malfeasance[185]. Market Competition and Challenges - Competition in the outdoor activities and sporting goods market is intense, with competitors having larger market presence and resources, potentially impacting profitability[180]. - The company faces challenges in anticipating changes in consumer demands, which could lead to misjudgments in inventory and product offerings[181]. - The company’s e-commerce business is expected to continue growing, but it faces competition from larger, more developed competitors[210][211]. Operational Risks and Infrastructure - The company has identified high and critical vulnerabilities in certain legacy information systems, which may be difficult to remediate[219]. - The company's computer systems are vulnerable to disruptions from natural disasters and other external events, which could negatively impact sales[226]. - Centralized computer systems in support and distribution centers may lead to operational inefficiencies if disrupted[227]. - Future growth may strain the company's business infrastructure, potentially affecting operations and financial condition[228].