Financial Position - As of December 31, 2025, total assets were $1.96 billion, total loans were $1.61 billion, total deposits were $1.70 billion, and total shareholders' equity was $251.0 million[160]. - Total assets increased by $223.8 million, or 12.9%, to $1.96 billion as of December 31, 2025, compared to $1.74 billion in 2024[184]. - Gross loans reached $1.61 billion as of December 31, 2025, up from $1.40 billion in 2024, representing an increase of $211.1 million or 15.1%[185]. - Total deposits increased to $1.70 billion as of December 31, 2025, compared to $1.52 billion in 2024, representing a growth of approximately 12.3%[210]. - As of December 31, 2025, total outstanding loan balances reached $1.61 billion, an increase from $1.40 billion in 2024, reflecting a growth of approximately 15%[206]. Loan Performance - Total loans increased by $209.0 million, or 15.0%, and total deposits increased by $185.4 million, or 12.2%, compared to December 31, 2024[162]. - The construction & development loan category increased to $224.6 million, representing 14.0% of total loans as of December 31, 2025, compared to 12.0% in 2024[185]. - The commercial real estate loan category accounted for 58.3% of total loans in 2025, consistent with 57.2% in 2024[185]. - The agricultural loan category increased to $90.9 million, representing 5.7% of total loans as of December 31, 2025, compared to 5.6% in 2024[185]. - The total commercial real estate loans reached $938,285 thousand as of December 31, 2025, reflecting a significant portion of the gross loans[187]. Income and Expenses - Income before taxes decreased by $3.6 million, or 6.0%, to $56.8 million for the year ended December 31, 2025, compared to $60.4 million for the same period in 2024[162]. - Net interest income for the year ended December 31, 2025, was $87.9 million, compared to $86.2 million for 2024, reflecting a net interest margin of 4.94%[166][173]. - Total noninterest income decreased by $2.75 million, or 24.44%, to $8.5 million, primarily due to a decline in other noninterest income related to oil and gas assets[181]. - Noninterest expense for the year ended December 31, 2025, was $38.9 million, an increase of $1.8 million or 4.9% compared to $37.1 million in 2024[182]. - Salaries and employee benefits expense rose to $22.6 million in 2025, an increase of $1.9 million or 8.9% from $20.8 million in 2024[182]. Credit Losses and Allowance - The provision for credit losses for the year ended December 31, 2025, was $700,000, an increase of 100% compared to a $0 provision for the year ended December 31, 2024[164]. - The allowance for credit losses was $19.4 million as of December 31, 2025, compared to $17.9 million in 2024[185]. - The total recoveries in 2025 were $989 thousand, compared to $502 thousand in 2024[191]. - The total charge-offs for 2025 were $200 thousand, a decrease from $2,275 thousand in 2024[191]. - The net recoveries (charge-offs) to average loans ratio was 0.05% for 2025, improving from -0.13% in 2024 and -1.25% in 2023[191]. Interest Rates and Margins - Yields on interest-earning assets decreased to 7.24%, a decline of 55 basis points from the previous year, primarily due to lower loan yields[168]. - The Federal Reserve's actions led to a peak federal funds target rate of 5.25% to 5.50% by December 31, 2023, with subsequent reductions impacting net interest margins[161]. - Net interest margin improved to 5.11% for 2024, up from 4.97% in 2023[175]. - The weighted average yield of the debt securities portfolio was 1.72% as of December 31, 2025[176]. - The average balance of interest-bearing transaction deposits increased to $941.2 million in 2025, with a weighted average rate of 3.16%[211]. Regulatory and Capital Requirements - The company is subject to regulatory capital requirements, including maintaining a Common Equity Tier 1 capital buffer of 2.5% of risk-weighted assets to avoid limits on capital distributions[218]. - As of December 31, 2025, total shareholders' equity increased to $251.0 million, up from $213.2 million in 2024 and $170.3 million in 2023, driven by retained capital from net income[223]. - The Bank's total capital to risk-weighted assets ratio was 15.25% as of December 31, 2025, exceeding the minimum requirement of 10.50%[222]. - The Company reported a Tier 1 capital to risk-weighted assets ratio of 14.09% as of December 31, 2025, above the required minimum of 8.50%[222]. - The Company reported a CET 1 capital to risk-weighted assets ratio of 14.09% as of December 31, 2025, exceeding the minimum requirement of 7.00%[222]. Risk Management - The Company has established a measurement system for monitoring net interest rate sensitivity, managing exposure to interest rates within established guidelines[233]. - The ALCO Committee manages interest rate risk by formulating strategies based on earnings and capital impact, considering various economic factors[236]. - Interest rate risk simulation models are used to assess the sensitivity of net interest income and fair value of equity, incorporating contractual maturities and re-pricing opportunities[237]. - Under the internal policy, estimated net interest income at risk for a -200 basis point shift should not decline by more than 20%[239]. - The model indicates that actual results may differ from simulations due to the timing and magnitude of interest rate changes[240].

Financial Performance - For the three months ended January 31, 2026, the company's net income was $5,910,000, or $0.63 per share, representing a 14.5% increase from $5,163,000, or $0.55 per share, for the same period in 2025[150]. - For the nine months ended January 31, 2026, the company's net income was $18,052,000, or $1.92 per share, which is 7.9% higher than $16,735,000, or $1.78 per share, for the same period in 2025[149]. - The company's income before income taxes for the three months ended January 31, 2026, was $7,943,000, an increase of 11.3% from $7,136,000 in 2025[148]. - EAM's net income for the nine months ended January 31, 2026, was $3,648,000, an increase from $3,384,000 in the same period of the previous year[164]. Operational Income - The company's income from operations for the three months ended January 31, 2026, was $1,004,000, a decrease of 35.8% compared to $1,564,000 for the same period in 2025[150]. - The company's income from operations for the nine months ended January 31, 2026, was $4,012,000, down 22.2% from $5,155,000 for the same period in 2025[149]. Revenue and Expenses - Non-voting revenues and non-voting profits interests from EAM Trust for the three months ended January 31, 2026, were $4,761,000, a decrease of 3.0% from $4,910,000 in 2025[148]. - The company's total operating expenses for the three months ended January 31, 2026, were $7,272,000, a slight decrease of 1.8% from $7,403,000 in 2025[148]. - Total operating revenues for the nine months ended January 31, 2026, were $25,438,000, a decrease of 4.7% compared to $26,692,000 in the prior fiscal year[156]. - Total expenses for the nine months ended January 31, 2026, were $21,426,000, slightly below the $21,537,000 reported in the prior fiscal year[168]. Investment Gains - Investment gains for the three months ended January 31, 2026, were $2,178,000, an increase of 229.0% compared to $662,000 in 2025[148]. - Total investment gains increased by 51.2% to $5,379,000 for the nine months ended January 31, 2026, primarily from unrealized gains on equity securities[174]. Cash Flow - Cash inflows from operating activities decreased to $13,801,000 for the nine months ended January 31, 2026, down from $14,703,000 in the prior year[181]. - Cash inflows from investing activities were $8,626,000 for the nine months ended January 31, 2026, compared to $16,475,000 in the same period of 2025[183]. - Cash outflows from financing activities increased to $10,041,000 for the nine months ended January 31, 2026, compared to $8,752,000 in the prior year[184]. Tax and Working Capital - The effective income tax rate rose to 26.10% for the nine months ended January 31, 2026, up from 25.60% in the previous year, due to increased state and local income taxes[176]. - Working capital increased to $65,716,000 as of January 31, 2026, compared to $56,230,000 as of April 30, 2025[179]. Shareholder Information - The average common shares outstanding during the nine months ended January 31, 2026, were 9,402,966, compared to 9,418,527 for the same period in 2025[151]. - The Company had 9,402,966 common shares outstanding as of January 31, 2026, a slight decrease from 9,418,527 shares a year earlier[185]. Asset Management - Total assets in the Value Line Funds managed by EAM were $4.20 billion as of January 31, 2026, a decrease of 15.6% from $4.97 billion a year earlier[161]. - The aggregate cost and fair value of fixed income securities classified as available-for-sale were $12,552,000 and $12,546,000, respectively, as of January 31, 2026[199]. - The aggregate cost of equity securities as of January 31, 2026, is $16,916,000, with a fair value of $25,541,000, representing a 51.1% increase in value[205]. Investment Strategy - The company's equity investment strategy focuses on acquiring a diverse range of equity securities, primarily through ETFs for dividend yield[204]. - The company maintains a policy to invest no more than 5% of the average daily trading volume in any single security to ensure liquidity[204]. - Management regularly monitors the maturity structure of debt securities to manage price risk associated with interest rate changes[201].

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 or ☐ 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: 001-42659 ProCap Acquisition Corp (Exact name of registrant as specified in its charter) | Cayman Islands | N/A | | --- | --- | | (State ...

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 or ☐ 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: 001-42659 ProCap Acquisition Corp (Exact name of registrant as specified in its charter) | Cayman Islands | N/A | | --- | --- | | (State ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal years ended December 31, 2023, 2024 and 2025 OR ☐ 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: 001-31326 ELOXX PHARMACEUTICALS, INC. (Exact Name of Registrant as Specified in Its Charter) Delaware 84-1368850 (State or Other Ju ...

Financial Position - As of December 31, 2025, Primis Financial Corp. had total assets of $4.0 billion, total loans held for investment of $3.3 billion, total deposits of $3.4 billion, and total stockholders' equity of $423 million[28]. - The Panacea Financial Division ended 2025 with $544 million in loans and $128 million in deposits, an increase from $434 million in loans and $92 million in deposits as of December 31, 2024[34]. - Primis Mortgage Company funded approximately $1.2 billion in loans in 2025, up from approximately $800 million in 2024[34]. - Deposits on the Bank's digital platform reached $992 million by the end of 2025, with an average balance of $48,000, and 82% of customers had been with the platform for over 2 years[34]. - The Bank increased deposits per branch (excluding digital platform deposits) to $100 million as of December 31, 2025, compared to $69 million as of December 31, 2021[34]. - As of December 31, 2025, the Company had over $1 billion in commitments with 125 customers in its warehouse lending business[63]. - The digital banking platform launched in 2022 had digital deposits totaling $1 billion as of December 31, 2025[65]. - As of December 31, 2025, Primis Financial Corp. had $1.2 billion in commercial real estate loans, representing 37% of its loan portfolio, with $42 million classified as nonperforming[153]. - The company reported $132 million in construction and land development loans, accounting for 4% of its loan portfolio, with no nonperforming loans in this category[154]. - The unsecured consumer loan portfolio stood at $183 million, approximately 6% of the total held for investment loan portfolio, with $90 million managed by a third party[155]. - Nonperforming assets totaled $87 million, or 3% of total loans and OREO, marking a 417% increase from $17 million, or 1%, as of December 31, 2024[164]. - Real estate lending constitutes $2.0 billion, or about 61% of the total loan portfolio, making the company vulnerable to declines in real estate values[162]. - As of December 31, 2025, 37% of the loan portfolio was secured by commercial real estate, with $639 million, or 19%, secured by single-family residential real estate[163]. Business Strategy and Growth - Primis aims to grow its business and improve profitability by focusing on maintaining a strong community bank presence, supplementing growth with high-return business lines, and enhancing digital offerings[33]. - The Bank's management team has been strengthened with new members bringing extensive expertise, enhancing its competitive advantage[34]. - Primis is positioned to pursue selective acquisition opportunities due to its strong capital position and experience in integrating financial institution acquisitions[41]. - The Company launched a Life Premium Financing division in Q4 2021, which was sold to EverBank on January 31, 2025[61]. - Primis expanded its V1BE service to cover the majority of its footprint, with plans to onboard its first bank customer in 2026[64]. - The company is pursuing a growth strategy but acknowledges the risks and expenses associated with managing growth effectively, including the need for infrastructure and personnel[196]. - The company may seek to supplement internal growth through acquisitions, but competition for suitable candidates is increasing, which could raise acquisition costs and reduce potential returns[197]. Regulatory Compliance and Capital Requirements - The Federal Reserve requires bank holding companies to maintain a Tier 1 risk-based capital ratio of at least 6.0% and a total risk-based capital ratio of at least 10.0% to be considered well-capitalized[110]. - As of December 31, 2025, both Primis and the Bank's regulatory capital ratios were above the applicable well-capitalized standards and met the capital conservation buffer[112]. - The capital conservation buffer requires an additional 2.5% CET1 above the minimum capital ratio requirements to absorb losses during economic stress[108]. - The leverage capital ratio, a minimum capital standard, requires a Tier 1 capital ratio of at least 4%[107]. - The SEC's clawback provisions require companies to recover excess incentive-based compensation based on financial reporting measures that are later restated[100]. - The Federal Reserve has policies that generally restrict insured banks from paying dividends if they are not in compliance with capital requirements[116]. - The Bank must submit annual audit reports prepared by independent auditors to federal and state regulators, effective January 1, 2026[144]. - Insured institutions with total assets of $1 billion or more must have independent audit committees consisting of outside directors only, with members experienced in banking or financial management[145]. Risk Factors - The company’s profitability is sensitive to local economic conditions, and any downturn could adversely affect borrowers' ability to repay loans[149]. - The company faces risks related to its reliance on third-party vendors for key business components, which could expose it to operational and financial risks[151]. - The company is exposed to credit loss risks, and if the allowance for credit losses is inadequate, earnings may decrease significantly[168]. - A significant portion of the consumer loan portfolio is exposed to credit risk due to a promotional zero-interest period, with $3 million in loans currently in this category[160]. - The company faces increasing risks related to ESG developments, including potential anti-ESG legislation that could impact lending operations[195]. - Economic conditions, including inflation and geopolitical tensions, could lead to increased credit losses and negatively impact demand for loans[182]. - A prolonged economic downturn could lead to increased non-performing assets and negatively impact the company's capital and financial condition[184]. - Changes in monetary policy and interest rates could significantly impact the company's net interest income and overall profitability[178]. - The company may be required to increase its allowance for credit losses based on regulatory reviews, which could adversely affect net income[169]. Operational and Technological Risks - Rapid technological changes in the financial services industry require the company to effectively implement new technology-driven products and services to remain competitive[200]. - Cybersecurity risks are significant, with potential consequences including financial loss, increased operational expenses, and damage to reputation[215]. - The company has incurred significant expenses to improve system reliability and security, but remains vulnerable to evolving cyber-attack methods[219]. - The launch of real-time payments networks may require the company to hold more liquidity reserves and could reduce product profitability due to increased fraud risks[214]. - The company relies on accurate information from customers and counterparties for credit decisions, with potential fraud increasing financial risk and unexpected loan losses[220]. Community Engagement and Employee Relations - The Company’s employees volunteered 225 hours in 2025, reflecting its commitment to community engagement[80]. - The company has recorded goodwill and net amortizable intangibles of approximately $93 million and $36 thousand, respectively, as of December 31, 2025, which are subject to impairment testing[209]. - Key personnel are crucial for maintaining customer relationships, and the loss of senior management could adversely affect business operations[221]. - Compensation practices are under regulatory oversight, and changes in these practices could impact the ability to attract and retain qualified employees[222]. Market Conditions and Stock Performance - Stock price volatility is influenced by general market conditions, which could affect liquidity and investor confidence[188]. - Deposit insurance premiums may increase due to FDIC rules, potentially leading to significantly higher costs for the company[225]. - Liquidity is essential for the company's operations, and reliance on retail and commercial deposits is expected to meet funding needs in the foreseeable future[226].

Financial Performance and Costs - The company was assessed $27.5 million in federal excise taxes related to optional passenger seat selection charges, following an IRS audit covering Q2 2018 to Q4 2020[174]. - Labor costs represent approximately 32%, 28%, and 28% of total operating costs for 2025, 2024, and 2023, respectively, with 81% of the workforce represented by labor unions as of December 31, 2025[186]. - Increased security measures post-9/11 have led to higher operating costs for airlines, which may not be passed on to consumers, adversely affecting financial results[177]. - The company has not recognized a loss contingency related to the excise tax assessment, believing a loss is not probable[174]. - Negative economic conditions, including inflation and labor shortages, could lead to decreased spending on air travel and increased labor costs, adversely affecting profitability[197]. - The company anticipates that compliance with the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) could significantly increase operating costs in the coming years[253]. - Aircraft fuel expenses represented approximately 22% of the company's operating expenses for the year ended December 31, 2025, and a hypothetical 10% increase in fuel prices would have raised costs by $100 million[575]. - The company had $358.6 million in outstanding variable-rate debt as of December 31, 2025, and a 100 basis point increase in interest rates would increase annual interest expense by $593.7 thousand[577]. - The company is subject to market risks, including fluctuations in commodity prices (specifically aircraft fuel) and interest rates, which could adversely affect its financial results[574]. Operational Challenges - The airline industry is sensitive to economic conditions, with adverse conditions potentially reducing demand for air travel, impacting revenues significantly[175]. - The company experienced operational disruptions due to adverse weather conditions and natural disasters, resulting in approximately 1,400 flight cancellations during 2017[181]. - The company is facing ongoing negotiations with labor unions, which may lead to increased labor costs and operational disruptions[186]. - The company has experienced operational disruptions in the past due to labor disputes, which could adversely affect business operations if similar situations arise in the future[195]. - The company is dependent on the FAA for air traffic control, which faces challenges that can lead to inefficiencies and delays, impacting operations[181]. - The company is currently engaged in ongoing negotiations with AMFA regarding a collective bargaining agreement for aircraft maintenance technicians, with mediation filed in October 2023[194]. - The company anticipates that scheduled and unscheduled aircraft maintenance expenses will increase over the next several years, which could materially affect financial performance[201]. - The company is in the process of reducing fleet size as part of Chapter 11 bankruptcy proceedings, which may impact future profitability[226]. - The company has significant aircraft-related fixed obligations and may incur additional debt, which could impair liquidity and harm financial condition[266]. Regulatory and Compliance Issues - The company is subject to extensive regulatory compliance costs, which could increase due to new laws and regulations, potentially raising ticket prices and reducing demand for air travel[203]. - The DOT proposed a rule requiring airlines to seat children aged 13 and under adjacent to at least one accompanying adult at no additional cost, with civil penalties for non-compliance[211]. - The DOT issued a final rule on December 17, 2024, to enhance access to air travel for individuals with disabilities, effective January 16, 2025, requiring airlines to provide specific assistance and reimbursements for mishandled wheelchairs[212]. - The U.S. government faces pressure for cost-cutting initiatives, which could delay funding for regulatory agencies like the DOT and FAA, potentially affecting airline operations[216]. - International routes are subject to treaties and regulations that may change, impacting the ability to operate in new markets and requiring compliance with foreign regulations[217]. - The company is subject to new California laws requiring annual reporting of Scope 1 and 2 greenhouse gas emissions starting in 2026, and Scope 3 emissions starting in 2027, which may incur compliance costs[251]. - The company is monitoring litigation related to new environmental regulations that could impose additional costs and operational challenges[251]. - The company is subject to evolving data privacy regulations, which could result in liabilities if compliance is not maintained[234]. Market Position and Competition - The airline industry faces competition from substitutes such as bus and train services, as well as technological advancements like video teleconferencing[184]. - The company lacks marketing alliances, putting it at a competitive disadvantage compared to traditional network carriers, which may affect passenger traffic and financial results[202]. - The airline's network strategy implementation is critical for profitability, facing challenges such as hiring personnel and securing equipment[223]. - Target markets in the Caribbean and Latin America may be vulnerable to economic and political instability, affecting profitability and operational strategies[224]. - Heavy reliance on technology and automated systems poses risks; failures could disrupt operations and lead to significant revenue loss[227]. - The company faces challenges in maintaining or growing passenger revenues due to changing customer preferences and increased competition, which could limit revenue growth[238]. - Dependence on key airports for operations poses risks, including potential increases in airport rates and charges, which could adversely affect financial results[239]. - Reliance on third-party service providers for essential operations may lead to disruptions if agreements are not renewed or if service providers fail to perform[241]. - The company relies on third-party distribution channels for ticket sales, and any inability to manage costs or functionality could negatively impact competitive position and results[243]. Financial Stability and Liquidity - The company is facing significant liquidity challenges and may not be able to improve its financial position or return to profitability, which could materially affect its operations and necessitate modifications to its operational plans[277]. - As of December 31, 2025, the company had cash and cash equivalents of $273.0 million, and it borrowed $275.0 million under the Exit Revolving Credit Facility due on March 12, 2028[274]. - The company entered into a Superpriority Secured Priming Debtor-in-Possession Credit Agreement for up to $475.0 million in new money term loans[275]. - Credit ratings were downgraded to D by Fitch and S&P Global following the 2025 Bankruptcy filing, which could increase future debt financing costs[269]. - The company is highly dependent on operating cash flows to fund operations and make scheduled payments on aircraft-related fixed obligations[274]. Technology and Innovation - The company is currently utilizing AI functions to enhance services and technical support, but risks associated with AI could adversely affect business operations and financial results[229]. - The company may utilize artificial intelligence, which presents significant risks and could adversely affect business operations and financial results[261]. - The regulatory framework for AI is rapidly evolving, which may require the company to expend additional resources to comply with new laws and regulations[262]. Stock and Shareholder Issues - The company has never declared or paid cash dividends on its Common Stock and does not intend to do so in the foreseeable future[295]. - The market price of the company's Common Stock has been volatile, particularly following the delisting from the NYSE and subsequent trading on the OTC Pink Limited Market[282]. - Future sales and issuances of Common Stock could result in substantial dilution for existing stockholders, potentially causing the stock price to decline[279]. - The company reserves shares of Common Stock for future issuance under equity incentive plans, which could lead to a significant decline in stock price if perceived as likely to be sold[281]. Insurance and Risk Management - Significant losses could arise from emergencies or accidents involving aircraft, potentially leading to increased insurance costs and reputational damage[244]. - The company may face increased insurance costs and reduced coverage, which could materially affect financial condition and results of operations[249]. - Cybersecurity risks are increasing, leading to potential costs for deploying additional security measures and addressing breaches, which could materially impact financial condition[231]. - The company's reputation and financial condition could be harmed by security breaches or failures to protect personal data, leading to legal liabilities and increased costs[237]. Seasonal and Operational Fluctuations - The company's quarterly operating results are expected to fluctuate due to seasonality, with greater demand anticipated in the second and third quarters and during peak U.S. holiday periods[260].

Revenue and Growth - Revenue increased from $379.8 million in 2024 to $427.5 million in 2025, reflecting a 12.6% year-over-year growth driven by a 16.5% increase in sales volume[419]. - The Asia-Pacific region accounted for 42% of total revenue in 2025, while Europe accounted for 49%, indicating a strategic shift towards higher-margin opportunities in the European commercial vehicle sectors[403]. Profitability and Expenses - Gross profit margin decreased to 28.6% in 2025 from 31.5% in 2024, primarily due to a $32.5 million inventory impairment charge[421]. - General and administrative expenses decreased by $23.7 million, or 29.0%, in 2025 compared to 2024, driven by reduced share-based compensation expenses[422]. - Research and development expenses decreased by $7.0 million, or 16.9%, in 2025 compared to 2024, primarily due to a decrease in share-based compensation expenses[423]. - The impairment loss of long-lived assets decreased by $89.0 million, or 95.6%, in 2025 compared to 2024[425]. Cash Flow and Financing - As of December 31, 2025, the company had cash, cash equivalents, and restricted cash totaling $169.2 million, with $105.0 million in cash and cash equivalents[430]. - The company secured $85.7 million in bank loans during the year ended December 31, 2025, and generated $75.9 million in net cash from operating activities, with an order backlog of $196.1 million expected to be fulfilled in 2026 and 2027[434]. - Net cash provided by operating activities increased by $73.1 million to $75.9 million for the year ended December 31, 2025, compared to $2.8 million in 2024, driven by a $49.9 million increase in net income and a $23.2 million net improvement in operating assets and liabilities[448]. - The company plans to utilize its Controlled Equity Offering Sales Agreement to raise additional capital, having already received $27.9 million in net proceeds[434]. - The company is currently unable to repatriate cash from China to fund U.S. operations or the Clarksville expansion due to regulatory restrictions and is seeking alternate sources of capital[442]. Capital Expenditures and Investments - Capital expenditures amounted to $38.7 million for the year ended December 31, 2025, primarily related to the Huzhou Phase 3.2 expansion, funded by localized borrowings and cash flow from China operations[440]. - The company experienced a net cash outflow of $16.0 million in investing activities for the year ended December 31, 2025, primarily due to capital expenditures for manufacturing facility expansions[449]. - The company reported a net cash used in financing activities of $2.7 million for the year ended December 31, 2025, a decrease of $40.3 million compared to the previous year[450]. Credit Risk Management - Credit risk primarily relates to trade receivables, restricted cash, cash equivalents, and amounts due from related parties[469]. - A hypothetical 100-basis-point increase in the expected loss rate on financing receivables would increase the allowance for credit losses by approximately $0.8 million as of December 31, 2025[470]. - A dedicated credit management team is responsible for establishing credit limits, approving credit terms, and implementing collection strategies[471]. - The company reviews the recoverability of outstanding balances at each reporting period and ensures adequate impairment provisions are recorded[471]. - The company considers its overall credit risk exposure to be significantly mitigated due to robust credit risk management practices[472]. Seasonal Trends - Historically, higher sales volumes are observed in the third and fourth fiscal quarters compared to the first and second quarters[473]. - The company continues to monitor sales trends and market conditions to understand the impact of seasonal demand fluctuations[473].

Business Segments - The Company operates through two reportable segments: title insurance issuance and tax-deferred real property exchange services[12]. - The Company's exchange services division, ITEC and ITAC, derives income from fees for handling exchange transactions and interest on client deposits[31]. - The Company issues title insurance policies directly and through a network of agents, with the ability to attract and retain agents being a key growth determinant[133]. Title Insurance Revenue - Title insurance premiums are recognized as revenue at the closing of related transactions, with agents retaining a majority of the premium as commission[22]. - Premiums from title insurance written in North Carolina, Texas, South Carolina, Georgia, and Florida represent the largest revenue source for the title insurance segment[26]. - In 2025, North Carolina, Texas, Georgia, South Carolina, and Florida represented 35.3%, 27.1%, 8.6%, 8.1%, and 6.4% of total premiums written by the Company, respectively[70]. - Investors Title Company reported total revenues from the title segment accounted for 90.2% of the Company's revenues in 2025[130]. - Title insurance revenues accounted for 90.2% of total revenues in 2025, amounting to $246.1 million, compared to 91.2% in 2024 and 89.4% in 2023[173]. Financial Performance - The Company’s net income for 2025 was $35.2 million, compared to $31.1 million in 2024 and $21.7 million in 2023, showing a strong growth trajectory[171]. - Total revenues for 2025 reached $272.8 million, a 5.8% increase from $258.3 million in 2024, and up from $224.8 million in 2023[171]. - The Company’s total operating expenses for 2025 were $228.2 million, an increase from $218.8 million in 2024, driven by higher commissions and other operational costs[171]. - The provision for income taxes was $9.4 million for 2025, $8.4 million for 2024, and $4.5 million for 2023[210]. - The effective income tax rates were 21.0% for 2025, 21.3% for 2024, and 17.3% for 2023, differing from the U.S. federal statutory rate of 21%[210]. Claims and Reserves - Title insurance claims can be complex and are influenced by economic conditions, with reserve estimates subject to variability[20]. - The reserve for claims as of December 31, 2025, totaled $38.1 million, with approximately $3.5 million reserved for specific claims and $34.6 million for incurred but not reported claims[148]. - The provision for claims was $4.6 million in 2025, slightly up from $4.5 million in 2024, indicating stable claims management[171]. - The total reserve for claims at December 31, 2025, was $38.1 million, with approximately $34.6 million reserved for claims without notice[208]. - The company continues to evaluate and adjust its reserve estimates for claims based on historical loss ratios and new information, ensuring adequate coverage for future claims[156]. Market Conditions - The title insurance business is cyclical and seasonal, with premiums fluctuating based on real estate activity and mortgage lending conditions[34][35]. - The demand for title insurance is influenced by the volume of residential and commercial real estate transactions and mortgage financing, which can fluctuate based on economic conditions[66]. - The Mortgage Bankers Association projects 2026 purchase activity to increase by 6.4% to $1.4 trillion and refinance activity to increase by 9.5% to $760 billion[145]. - The average 30-year fixed mortgage interest rates were 6.6% in 2025 and are projected to decline to 6.1% in 2026[145]. - Regulatory changes and economic conditions, including inflationary pressures and geopolitical conflicts, may impact the Company's investment portfolio and net premiums written[143]. Competition and Market Share - The title insurance industry is highly competitive, with the four largest companies holding over 80% of the market share in the United States[48]. - The title insurance industry is highly competitive, with key factors including service quality, pricing, expertise, and financial strength[73]. - The Company faces high competition for skilled personnel, which is critical for supporting future growth plans[76]. Regulatory Environment - The Company is subject to various regulatory examinations and potential changes in regulations that could impact its operations[44]. - Regulatory changes, particularly from the CFPB and state regulators, could adversely affect the Company's operations and financial condition[80][81]. - Title insurance rates are regulated and require pre-approval for changes, potentially limiting the Company's pricing flexibility[86]. Cybersecurity and Risk Management - The Company is exposed to cybersecurity risks, which could disrupt operations and result in financial losses[92][100]. - The Company’s investments in cybersecurity include advanced data loss prevention measures and continuous monitoring to safeguard sensitive information[115]. - The Company has established a comprehensive enterprise information security program aligned with the NIST Cybersecurity Framework 2.0 to manage cybersecurity threats[113]. - The Company’s Board of Directors oversees risk management processes, including cybersecurity risks, to align risk exposure with strategic objectives[117]. - The Company’s risk management strategy includes policies and procedures for identifying and mitigating risks associated with title insurance policies and other operational risks[107]. Employee and Corporate Structure - The Company had 548 full-time employees and 26 part-time employees as of December 31, 2025[55]. - The Company is committed to maintaining high-quality employee compensation and benefits to attract and retain key personnel[58]. - The Company relies on its subsidiaries for dividends, with approximately $121.4 million of consolidated shareholders' equity representing net assets that cannot be transferred to the Company[88]. Investment Portfolio - The Company's investment portfolio is primarily composed of municipal and federal U.S. government securities, investment grade corporate fixed maturity securities, and equity securities[51]. - The Company's investment portfolio, which includes fixed maturity securities and equity securities, is subject to risks from economic conditions and market fluctuations, potentially impacting net income[89]. - The Company’s investment portfolio is managed internally and via a wholly owned subsidiary, with securities subject to economic conditions and market risks[51]. Corporate Governance - The Company has goodwill and other intangible assets comprising approximately 5.8% of total assets as of December 31, 2025, which may be subject to impairment charges due to economic downturns[78]. - The Company has a current dividend policy anticipating quarterly dividends, subject to the discretion of the Board of Directors and dependent on future earnings and financial condition[124]. - As of December 31, 2025, the Company had authority remaining under its repurchase plan to purchase up to 413,177 shares of its common stock[125]. Legal Matters - The Company’s legal proceedings are considered incidental to its business and are not expected to materially impact its consolidated financial condition or operations[120].

Environmental Regulations - As of January 1, 2015, ships operating within designated Emission Control Areas (ECAs) must not use fuel with sulfur content exceeding 0.1% m/m, with additional costs anticipated for compliance [64]. - The IMO has established new nitrogen oxide emissions standards, with Tier III standards applicable to ships built on or after January 1, 2016, in North American and U.S. Caribbean Sea ECAs [65]. - By 2025, all new ships are required to be 30% more energy efficient than those built in 2014, with amendments to the Energy Efficiency Design Index (EEDI) effective from April 1, 2022 [67]. - The International Maritime Organization (IMO) has introduced requirements to reduce carbon intensity through the Energy Efficiency Existing Ship Index (EEXI) and operational carbon intensity indicators (CII) for ships over 400 gross tonnage [68]. - Compliance with the revised standards may incur significant costs, including the installation of emission control systems, impacting the company's financial condition [70]. - The Ballast Water Management Convention requires ships to manage ballast water to prevent the spread of invasive species, with compliance deadlines and standards established since 2019 [79]. - Ships over 400 gross tons must comply with the D-1 and D-2 standards for ballast water management, with the D-2 standard requiring treatment systems to eliminate unwanted organisms [80]. - The IMO's data collection system for fuel oil consumption became mandatory for ships over 5,000 gross tonnage starting January 1, 2019, contributing to greenhouse gas emission reduction strategies [66]. - The company plans to invest in its fleet to improve fuel efficiency and comply with revised environmental standards through its comprehensive IMO 2023 plan [70]. - The European Union regulations require companies with ships over 5,000 gross tonnage to monitor and report carbon dioxide emissions annually, potentially incurring additional expenses [101]. - The European Union aims to reduce net greenhouse gas emissions by at least 55% by 2030 compared to 1990 levels, impacting shipping companies with new compliance costs [103]. - Starting January 1, 2024, the EU's carbon market will cover CO2 emissions from all large ships entering EU ports, requiring shipowners to buy permits for emissions [108]. - The Maritime Fuel Regulation mandates a 2% reduction in greenhouse gas emissions from covered vessels starting January 1, 2025, with further reductions every five years, targeting an 80% reduction by January 1, 2050 [103]. - The International Maritime Organization (IMO) aims to reduce total annual GHG emissions from international shipping by at least 20% by 2030 and 70% by 2040 compared to 2008 levels [107]. - The company is committed to reducing its carbon footprint by transitioning to low-carbon fuels while maintaining service delivery [105]. - The IMO Net-zero Framework, expected to be approved in Spring 2026, will require ships to reduce their annual greenhouse gas fuel intensity [107]. Financial Implications - Compliance with the EPA and U.S. Coast Guard regulations may require substantial costs for installing ballast water treatment equipment or implementing disposal procedures [100]. - The company maintains pollution liability coverage insurance of $1.0 billion per incident for each vessel, which may be insufficient in the event of a catastrophic spill [96]. - The company expects to perform thirteen special surveys in 2026 at an aggregate total cost of approximately $15.7 million and two intermediate surveys at a cost of approximately $3.0 million [121]. - Compliance with the Maritime EU ETS will incur additional costs for the company, which cannot be precisely predicted at this time [110]. - The company’s credit facilities impose operating and financial restrictions, including maintaining a consolidated leverage ratio of not more than 200% and a minimum liquidity of not less than $18 million [295]. - The company’s long-term COAs may result in significant fluctuations in quarterly results, potentially affecting liquidity and the ability to meet financial obligations [302]. - The company may incur a 2% United States federal income tax on shipping income attributable to transport of cargoes to or from the United States if not entitled to exemption under section 883 of the Code [329]. - The company is subject to significant legal, accounting, and other expenses as a result of being a public company, which may strain its resources [307]. - The company may need to raise additional capital in the future, which could dilute existing shareholders' interests and may not be available on favorable terms [340]. Operational Risks - The company does not carry loss-of-hire insurance, which could lead to significant financial impacts during extended vessel off-hire periods [279]. - Labor interruptions, such as strikes or work stoppages, could materially affect the company's operations and financial condition [272]. - The company’s reliance on COAs for revenue means it may face operational risks if it cannot fulfill contractual obligations due to factors beyond its control [303]. - The company is subject to counterparty risks in various contracts, including COAs and charters, which could lead to significant losses if counterparties fail to meet their obligations [286]. - The company’s growth strategy involves expanding its fleet, which may require additional financing and could lead to increased operational risks and expenses [299]. - The company manages market exposure using forward freight agreements (FFAs) and other derivatives, which may lead to material fluctuations in results if market movements are not correctly anticipated [300]. - The company’s vessels must undergo regulatory surveys every 30 to 60 months, and failure to pass inspections could result in loss of revenues [308]. - The company relies on key executives, and their loss could have a material adverse effect on its business and financial condition [318]. Market and Competitive Environment - The international shipping industry is highly competitive, and the company may struggle to charter vessels at reasonable rates due to competition from larger operators [271]. - The logistics industry presents risks related to infrastructure, operational efficiencies, and labor relations, which could hinder the company's ability to provide solutions [280]. - The company expects to derive a significant part of its revenue and cash flow from a relatively small number of repeat customers, with the top ten customers representing 35% of total revenue for the year ended December 31, 2025 [283]. - The company participates in various capacities within the dry bulk shipping industry, including as a ship owner, operator, and manager [137]. Taxation and Compliance - The Company is classified as a non-resident of Bermuda for exchange control purposes, allowing for unrestricted transfer of funds into and out of Bermuda [130]. - The Company is subject to U.S. federal income taxation unless exempt under Section 883 of the Internal Revenue Code, which requires meeting specific stock ownership criteria [150]. - There is a risk that the company could lose the Section 883 exemption if 5% Shareholders own 50% or more of the outstanding common shares for more than half the days during the taxable year [158]. - If the 5 Percent Override Rule is triggered, the company may still qualify for the Section 883 exemption if it can demonstrate sufficient qualified shareholders [159]. - The maximum effective rate of U.S. federal income tax on the company's U.S. source shipping income would not exceed 2% under the 4% gross basis tax regime [161]. - If the Section 883 exemption is unavailable, U.S. source shipping income considered "effectively connected" with a U.S. trade or business would be subject to a 21% federal corporate income tax [162]. - Distributions made by the company to U.S. Holders will generally constitute dividends, which may be taxable as ordinary income or "qualified dividend income" depending on certain conditions [168]. - There is no assurance that any dividends paid will be eligible for preferential tax rates for U.S. Individual Holders [170]. - If treated as a Passive Foreign Investment Company (PFIC), U.S. Holders would face different taxation rules, including the option to make a Qualified Electing Fund (QEF) Election [175]. - The company is subject to special rules for Non-Electing Holders, including taxation on excess distributions and gains realized on the sale of common shares [179]. - Non-U.S. Holders generally will not be subject to U.S. federal income or withholding tax on dividends unless connected with a U.S. trade or business [182]. - The European Union has agreed to implement a global corporate minimum tax rate of 15% effective from 2024 for companies with revenues of at least €750 million [190]. - The OECD's two-pillar project aims to implement a global minimum tax rate of 15% for multinational corporations with annual revenue of €750 million or more, which could increase the company's tax compliance burden and global effective tax rate [331]. Cybersecurity and Technology - New cybersecurity regulations require vessel owners to implement cybersecurity measures for ships contracted for construction on or after January 1, 2024 [78]. - The company has not experienced any material cybersecurity incidents that would require disclosure under SEC guidelines as of the date of the annual report [337]. - Cybersecurity risks are heightened due to ongoing global conflicts, potentially impacting the company's operations and financial results [336]. - The company has integrated artificial intelligence into its operations and established an AI team to govern its use, but the full impact of AI on the industry remains uncertain [333]. - The company relies on its IT systems for critical operations, and failures or cybersecurity breaches could disrupt business and increase operating costs [332]. Shareholder and Market Dynamics - The company is classified as a "smaller reporting company," which allows for reduced disclosure requirements that may affect the attractiveness of its common shares to investors [304]. - Future sales of common shares could lead to a decline in market price and dilute shareholders' interests [338]. - The market price of common shares could decline due to large sales by shareholders or the perception of such sales, complicating future equity offerings [338]. - The company may issue additional common shares to support growth strategies, which could dilute existing shareholders' ownership [339].