Company Operations - The company operates 21 full-service offices across South Carolina and Georgia, focusing on personalized banking services for small to medium-sized businesses and individuals [260]. Income Sources - The primary source of income is net interest income, which is the difference between interest earned on loans and investments and interest paid on deposits and borrowings [261]. - Noninterest income is generated through fees and other charges, which are detailed in the financial statements [264]. Financial Performance - Net income for the year ended December 31, 2025 was $19.2 million, or $2.47 diluted earnings per common share, compared to $14.0 million, or $1.81 diluted earnings per common share for 2024, representing a 37.5% increase in net income [285]. - Net interest income increased by $10.0 million due to a $140.0 million rise in average earning assets and a 31 basis point improvement in net interest margin [285]. - Non-interest income rose by $2.9 million, driven by increases in mortgage banking income ($902 thousand), investment advisory fees ($1.4 million), and other income ($468 thousand) [287]. - Total assets grew to $2,057,732 thousand in 2025 from $1,958,021 thousand in 2024, marking a 5.1% increase [280]. - The efficiency ratio improved to 65.97% in 2025 from 71.56% in 2024, indicating better cost management relative to revenue [280]. - Return on average common equity increased to 12.36% in 2025 from 10.17% in 2024, demonstrating enhanced profitability [284]. - Total common shareholders' equity rose to $167,557 thousand in 2025 from $144,494 thousand in 2024, a 15.9% increase [280]. Credit Losses and Allowances - The company has a critical accounting policy regarding the allowance for credit losses, which could significantly impact future financial results based on economic conditions [271]. - The allowance for credit losses on loans increased by $671 thousand to $13.8 million as of December 31, 2025, compared to $13.6 million at December 31, 2024 [318]. - The provision for credit losses was $770 thousand in 2025, down from $809 thousand in 2024, reflecting improved asset quality [285]. - The allowance for credit losses at period end was $13,806 thousand in 2025, compared to $13,135 thousand in 2024 and $12,267 thousand in 2023 [332]. Asset Management - Total assets increased by $99.7 million, or 5.1%, to $2.1 billion at December 31, 2025, primarily driven by a $90.5 million, or 7.4%, increase in loans [354]. - The company reported a loan portfolio of approximately $1.3 billion and an allowance for credit losses (ACL) of approximately $13.8 million as of December 31, 2025 [416]. Investment Performance - The company’s investment performance for the twelve months ended December 31, 2024 was 17.6%, compared to 23.3% for the S&P 500 [345]. - The remaining pretax unrealized net holding loss on investments was $10.6 million at December 31, 2025, down from $12.3 million at December 31, 2024 [364]. Deposits and Funding - Total deposits increased to $1,749,544 thousand in 2025, a rise of 4.4% from $1,675,901 thousand in 2024 [421]. - Pure deposits rose by $60.1 million, or 4.4%, to $1.44 billion at December 31, 2025, from $1.38 billion at December 31, 2024 [375]. - The loan-to-deposit ratio (including loans held-for-sale) was 75.5% at December 31, 2025, compared to 73.4% at December 31, 2024 [355]. Tax and Regulatory Compliance - The effective tax rate was 21.5% during the twelve months ended December 31, 2024, compared to 21.3% during the twelve months ended December 31, 2023 [291]. - The Bank's Tier 1 capital ratio was 13.1% at December 31, 2025, exceeding the required minimum of 6.0% by 7.1% [391]. Employee and Operational Metrics - The company had 265 full-time employees as of December 31, 2025, compared to 260 the previous year [350]. - Non-interest expense increased to $47.5 million in 2024, up from $43.1 million in 2023, primarily driven by a $3.4 million rise in salaries and employee benefits [351]. Risk Management - Derivative instruments are utilized to manage risks such as interest rate risk, with a policy prohibiting speculative use [277][278]. - The company emphasizes the importance of tracking the sensitivity of assets and liabilities to changes in interest rates, as shown in the "Sensitivity Analysis Table" [262]. Future Outlook - The impact of inflation poses risks such as decreased demand for mortgage loans and increased competition for deposits, which may adversely affect financial performance [403]. - The company maintained adequate liquidity and capital to support operations for at least the next 12 months [397].

Digital Asset Strategy - In October 2025, the company announced a $58.88 million private placement to initiate a digital asset treasury strategy focused on accumulating Zcash (ZEC) [25]. - The company’s digital asset treasury strategy is designed to capitalize on the growing structural demand for financial privacy in the digital economy [55]. - The company has shifted a significant portion of its business strategy towards a digital asset treasury strategy, focusing on investments in ZEC, with no assurance of successful execution or profitability [164]. - The company relies on Gemini Space Sciences LLC for trading execution and custody of ZEC, leading to concentrated risk with a single custodian [171]. - The digital asset treasury strategy subjects the company to enhanced regulatory oversight, with potential classification of ZEC as a "security" impacting operational compliance [161]. - The company has a history of losses and no source of product revenue, necessitating additional capital to fund operations, which may not be available on acceptable terms [161]. - Any decrease in the market value of ZEC holdings could adversely affect the company's ability to meet financial obligations, including debt [161]. - The company faces significant risks related to the custody of ZEC, including potential bankruptcy of custodians like Gemini, which could treat the company as a general unsecured creditor, adversely affecting ownership rights [176]. - Recent high-profile bankruptcies and regulatory actions in the digital asset industry have negatively impacted the adoption rate and use of digital assets, potentially limiting financing options and increasing counterparty risks [176]. - The company expects to hold substantially all of its ZEC in accounts at Gemini, raising concerns about security breaches and cyberattacks that could lead to loss of assets [184]. - The concentration of ZEC holdings enhances risks inherent in the digital asset treasury strategy, as significant declines in ZEC's price would have a pronounced impact on the company's financial condition [207]. - The liquidity of ZEC is less than cash and cash equivalents, and during market instability, the company may not be able to sell ZEC at favorable prices [206]. - The company’s ability to raise capital for its digital asset treasury strategy may be compromised by market conditions and regulatory uncertainties, potentially harming growth prospects [210]. - The market price of the company's common stock may trade at a substantial premium or discount to the value of ZEC held, leading to increased volatility [213]. - The company faces enhanced regulatory oversight due to its ZEC treasury strategy, which may subject it to additional compliance requirements [214]. - The risks associated with ZEC could lead to restrictions on transactions or dealings if the company is found to have acquired ZEC from bad actors [215]. Regulatory Environment - The U.S. Congress is considering the Digital Asset Market Clarity Act of 2025, which may impact digital asset regulations [58]. - By July 1, 2027, the European Union will prohibit transactions involving anonymous wallets and privacy-focused digital assets like ZEC, potentially affecting Zcash's acceptance and value [59]. - Future regulations, such as the Digital Asset Market Clarity Act of 2025, could impose additional regulatory obligations on the company, affecting its operations and financial strategy [200]. - The company may face significant regulatory scrutiny and legal exposure due to potential violations of sanctions laws, which could harm its reputation and financial standing [181]. - ZEC and other digital assets are subject to significant legal, commercial, tax, technical, and regulatory uncertainty, which could adversely affect the financial position and operations of the company [196]. - The legal framework governing digital asset ownership remains uncertain, which could result in unexpected losses and protracted recovery processes during insolvency proceedings [176]. - The SEC has not publicly stated its view on ZEC's classification, leaving uncertainty regarding regulatory implications [222]. - The potential reclassification of ZEC could lead to changes in how the company conducts its business [222]. Competition and Market Position - The company competes with various entities in the privacy technology and digital asset sectors, including traditional financial firms and venture capital strategies focused on privacy technologies [57]. - The company faces significant competition from major pharmaceutical firms and biotechnology companies, impacting its market position and product development timelines [105][106]. - The company must navigate regulatory compliance and potential legal actions related to manufacturing, which could affect product availability [108]. Research and Development - Leap Therapeutics is developing sirexatamab (DKN-01), a monoclonal antibody targeting DKK1, with a Phase 2 study recently completed for colorectal cancer [60]. - Colorectal cancer is projected to have over 2.3 million new cases globally by 2030, with nearly 1.1 million deaths, highlighting a significant market opportunity [62]. - In the DeFianCe study, the experimental arm using sirexatamab showed an overall response rate (ORR) of 44.0% compared to 15.8% in the control arm, with a median progression-free survival (PFS) of 9.36 months versus 5.88 months [73]. - Sirexatamab demonstrated a disease control rate (DCR) of 93% in patients who had never received prior bevacizumab, with a median duration of response (DoR) of 9.92 months [72]. - FL-501, a monoclonal antibody in preclinical development, targets GDF15 and has shown potential to increase body weight and restore muscle mass in cachexia models [78]. - The company holds rights under 26 issued patents and 1 pending patent application related to sirexatamab, with a base term expiring in 2030 [83]. - The FDA granted orphan drug designation to sirexatamab for gastric and gastroesophageal junction cancer, and Fast Track designation for its combination therapy [67]. - Sirexatamab has shown additive activity with 5-fluorouracil (5-FU) chemotherapy, indicating potential for overcoming resistance in colorectal cancer treatment [70]. - The company owns two issued U.S. patents and additional patents in Australia, Japan, Korea, Mexico, and Israel, with expiration dates set for 2037, pending timely maintenance fee payments [84]. - Two additional patent families are directed towards cancer treatment using DKN-01, with applications pending in multiple jurisdictions including the U.S., China, and Europe, set to expire in 2040 [85][86]. - A patent family for colorectal cancer treatment using combination therapy is pending in various jurisdictions, with U.S. patents expected to expire no earlier than 2043 [87]. - An international patent application under the PCT for colorectal cancer treatment is pending, with potential U.S. patents expiring no earlier than 2045 [88]. - A pending U.S. Provisional application for FL-501, a monoclonal antibody, could lead to patents expiring no earlier than 2046 if non-Provisional applications are filed in 2026 [89]. - The company has a license agreement with Lilly, granting exclusive rights for certain compounds, with royalty payments in the low single digits based on net sales [92][93]. - The Adimab collaboration agreement allows the company to develop monoclonal antibodies, with milestone payments and royalties in the low single digits upon commercialization [99]. - The company relies on third-party contract manufacturers for clinical trial material, ensuring compliance with FDA's cGMP regulations [107][108]. Financial Performance - Total research and development expenses were $25.7 million and $57.2 million for the years ended December 31, 2025 and 2024, respectively [153]. - As of December 31, 2025, the company had 6 full-time employees, with no labor union representation [154]. - The company is subject to ongoing FDA regulations, including requirements for manufacturing, recordkeeping, and adverse experience reporting [146]. - The FDA may impose conditions on product approvals that can materially affect market potential and profitability [135]. - The Biologics Price Competition and Innovation Act grants 12 years of exclusivity for reference biologics from the time of first licensure [138]. - The Orphan Drug Act provides financial incentives for developing products for rare diseases affecting less than 200,000 individuals annually in the U.S. [139]. - The FDA has expedited review programs, such as Fast Track and priority review, to accelerate the approval process for serious conditions [140][142]. - Changes to approved products require prior FDA review and approval, including new indications and labeling claims [147]. - Manufacturers must comply with stringent cGMP regulations to maintain product approvals and avoid regulatory actions [148]. - The Drug Quality and Security Act imposes tracking and tracing obligations on manufacturers to ensure product safety and integrity [149]. - The FDA approval process for product candidates typically takes many years and requires substantial time and financial resources [111]. - An Investigational New Drug application (IND) must be submitted to the FDA before human clinical trials can begin, which becomes effective 30 days after receipt unless safety concerns arise [113]. - Clinical trials are conducted in three phases, with Phase 3 trials generally requiring two adequate and well-controlled studies for FDA approval [126]. - The FDA has set a goal to complete its review of 90% of all applications within ten months from the 60-day filing date for initial BLAs [130]. - The approval process for a Biologics License Application (BLA) is lengthy, and the FDA may refuse approval if regulatory criteria are not satisfied [133]. - The company may consider building or acquiring its own sales and marketing team if products receive FDA approval and it aligns with long-term interests [109]. - The FDA may require a risk evaluation and mitigation strategy (REMS) to ensure that the benefits of a biologic outweigh the risks [128]. - The company must comply with extensive government regulations regarding the research, development, and marketing of biopharmaceutical products [110]. - The manufacturing process for investigational biologics must comply with current Good Manufacturing Practices (cGMP) to ensure product quality and safety [118].

Volume Commitments and Capacity - The company has minimum volume commitments (MVCs) totaling 0.1 Tcfe, with a weighted-average remaining life of 2.0 years and an average throughput of approximately 43 MMcfe/d through 2029[52]. - Aggregate natural gas volume throughput averaged 904 MMcf/d and crude oil and produced water volume throughput averaged 73 Mbbl/d during 2025[53]. - The Double E Pipeline has a capacity of 1.6 Bcf/d and is underpinned by long-term take-or-pay contracts totaling 1.1 Bcf/d, with existing MVCs contractually increasing to 1.0 Bcf/d beginning in November 2024[67][68]. - The Piceance reportable segment has an aggregate throughput capacity of 1,259 MMcf/d and MVCs through 2030 averaging 26 MMcf/d[81]. - The Rockies reportable segment has an aggregate throughput capacity of 335 MMcf/d, with MVCs through 2030 averaging 9 MMcf/d[59]. - The Mid-Con reportable segment has an aggregate throughput capacity of 890 MMcf/d, with a weighted average remaining contract life of 7.1 years[73]. - The Niobrara G&P system has a processing capacity of up to 335 MMcf/d and is supported by long-term, fee-based agreements with key customers[62]. - Grand River system primarily located in Garfield County, Colorado, provides natural gas gathering services under long-term agreements with key customers, including QB Energy and Flywheel Energy[83]. Financial Performance and Revenue - Additional activities tied to commodity price fluctuations accounted for approximately 48% of total revenues during the year ended December 31, 2025[53]. - The company completed the sale of Summit Utica for $625.0 million, which included a natural gas gathering system and condensate stabilization facility[55]. - The company generates most of its revenues through long-term fee-based gathering agreements, which include minimum volume commitments (MVCs) and area of mutual interest (AMI) agreements[438]. Regulatory Environment - FERC regulates the transportation of natural gas and crude oil, affecting rates and terms for gathering and transportation services[86]. - The company’s Double E Pipeline and Epping Pipeline are subject to FERC's jurisdiction, with tariffs filed for regulatory approval[89]. - FERC has proposed to use the producer price index for finished goods minus 1.42% for rate adjustments starting July 1, 2026[91]. - The company is subject to anti-market manipulation rules, with potential fines of up to approximately $1.5 million per day for violations[98]. - PHMSA has extended pipeline safety requirements to onshore gas gathering pipelines, requiring compliance with incident and annual reporting[102]. - The company must perform ongoing assessments of pipeline integrity and maintain processes for data collection and analysis[105]. - State regulations vary, with Texas requiring the company to file tariffs for its DFW Midstream system assets, while other states have not imposed similar requirements[96]. - The company is subject to stringent federal, state, and local environmental laws and regulations, which can impact business activities significantly[108]. - Non-compliance with environmental regulations may lead to administrative, civil, and criminal penalties, including monetary fines[107]. - The company anticipates future regulatory requirements and plans accordingly to minimize compliance costs[108]. - The EPA has issued a new lower National Ambient Air Quality Standards (NAAQS) for ozone, reducing the standard from 75 ppb to 70 ppb, which may increase regulatory burdens[116]. - In December 2023, the EPA announced final methane rules that impose new emission requirements on the oil and gas industry, potentially increasing compliance costs[117]. - The company believes it is in substantial compliance with the Clean Water Act (CWA) and analogous state laws regarding water discharges[120]. - The Oil Pollution Control Act (OPA) requires the company to prepare a Spill Prevention, Control, and Countermeasure (SPCC) plan for certain facilities, which the company believes is in compliance[121]. - Hydraulic fracturing regulations are becoming more stringent, with some states considering additional permitting and disclosure requirements[122]. - The Department of the Interior (DOI) has updated its onshore oil and gas leasing program, which includes revised royalty rates and bonding requirements[125]. - Future implementation and enforcement of the DOI's April 2024 rule remains uncertain due to executive orders aimed at facilitating domestic energy resource leasing[125]. Employee and Financial Management - As of December 31, 2025, the company employed 296 people, with no employees covered by collective bargaining agreements[135]. - The company has $825.0 million in fixed-rate debt and $230.0 million in variable-rate debt as of December 31, 2025[437]. - A hypothetical 1% increase in interest rates on variable-rate debt would increase interest expense by approximately $2.6 million[437]. Environmental and Safety Considerations - The company is subject to various environmental regulations, including those related to greenhouse gas (GHG) emissions, which could impact operations and costs[130]. - Changes in climate change legislation could affect the desirability of the company's products compared to competing energy sources[134]. - The company has implemented health and safety programs, wellness initiatives, and employee assistance programs to support employee well-being[137]. - The company is committed to fostering an inclusive work environment to strengthen its workforce[137]. - The potential impact of changes to the National Environmental Policy Act (NEPA) regulations remains uncertain and could affect project timelines and operations[128].

Financial Performance - Cypherpunk reported a net income of $4.8 million for the year ended December 31, 2025, compared to a net loss of $67.8 million for 2024, primarily due to $50.4 million in unrealized gains on ZEC treasury holdings [9]. - Total assets increased significantly to $163,182,000 in 2025 from $49,124,000 in 2024, representing a growth of approximately 232% [22]. - Total stockholders' equity increased to $153,506,000 in 2025 from $35,048,000 in 2024, reflecting a growth of about 338% [22]. - The accumulated deficit improved slightly to $(462,549,000) in 2025 from $(467,371,000) in 2024, showing a positive change of approximately 1.6% [22]. Treasury Holdings - The company increased its treasury holdings to 294,743.10 ZEC, representing approximately 1.78% of the total circulating supply of the Zcash network, with an average purchase price of $335.89 [5]. - Cash and cash equivalents totaled $14.0 million, with ZEC treasury holdings valued at $147.4 million as of December 31, 2025 [13]. - Digital assets receivable amounted to $147,404,000 in 2025, indicating a new asset category introduced in the financials [22]. Expenses - Research and development expenses decreased to $25.7 million in 2025 from $57.2 million in 2024, attributed to reduced clinical trial and manufacturing costs [11]. - General and administrative expenses were $10.9 million in 2025, down from $12.8 million in 2024, mainly due to decreased payroll and related expenses [12]. Cash Flow - Cash used in operating activities improved to $(43,902,000) in 2025 from $(60,299,000) in 2024, indicating a reduction of about 27% [24]. - Cash provided by financing activities rose to $107,649,000 in 2025, compared to $37,184,000 in 2024, marking an increase of approximately 189% [24]. - Cash used in investing activities was $97,000,000 in 2025, indicating significant investment activity compared to no recorded amount in 2024 [24]. - Cash and cash equivalents at the end of 2025 were $14,035,000, down from $47,249,000 at the end of 2024, a decrease of approximately 70% [24]. Strategic Investments and Initiatives - Cypherpunk closed a $58.88 million private placement in October 2025, issuing 15,212,311 shares of common stock and warrants for additional shares [5]. - The company made a $5 million strategic investment in Zcash Open Development Lab (ZODL), marking its first technology investment outside of ZEC [6]. - The company appointed several industry leaders as strategic advisors, including Zooko Wilcox, founder of Zcash, to enhance its expertise in digital assets [5]. - Cypherpunk aims to advance the adoption of Zcash and expand its technology portfolio focused on privacy-preserving solutions [4]. Clinical Data - The company presented final clinical data from the DeFianCe study, showing a 44.0% overall response rate in DKK1-high patients treated with sirexatamab compared to 15.8% in the control arm [10]. Liabilities - Total current liabilities decreased to $4,558,000 in 2025 from $14,076,000 in 2024, a reduction of about 68% [22]. Exchange Rate Impact - The effect of exchange rate changes on cash and cash equivalents resulted in a positive adjustment of $39,000 in 2025, contrasting with a negative impact of $(279,000) in 2024 [24].

Financial Performance - Ampco-Pittsburgh reported net sales of $108.8 million for Q4 2025, up from $100.9 million in Q4 2024, and $434.2 million for the full year 2025, compared to $418.3 million in 2024, driven by higher shipment volumes in the Air and Liquid Processing segment [2]. - Total net sales for Q4 2025 reached $108.8 million, a 7.3% increase from $100.9 million in Q4 2024 [20]. - For the full year 2025, total net sales were $434.2 million, a 3.5% increase from $418.3 million in 2024 [20]. - The adjusted margin from operations for the year ended December 31, 2025, was 8.32%, compared to 6.72% in 2024, indicating an improvement of 2.6 percentage points [29]. - The adjusted margin from operations for the three months ended December 31, 2025, was 3.17%, compared to 2.92% in the same period of 2024, showing a positive trend in operational efficiency [29]. Loss and Charges - The company recorded a net loss of $57.7 million, or $2.85 per share, for Q4 2025, which included a $42.4 million deconsolidation charge and a $11.9 million non-cash asbestos revaluation charge [3]. - Net loss attributable to Ampco-Pittsburgh for Q4 2025 was $57.7 million, compared to a net income of $3.1 million in Q4 2024 [22]. - The net loss attributable to Ampco-Pittsburgh for the year 2025 was $66.1 million, compared to a net income of $438,000 in 2024 [24]. - The company incurred an asbestos-related charge of $11.9 million in 2025, which was a significant factor in the adjusted net loss [24]. - The company reported a deconsolidation charge of $41.4 million in Q4 2025, which significantly impacted the financial results [20]. - The company incurred a deconsolidation charge of $41.424 million for the year ended December 31, 2025, which may affect future financial stability [29]. - The company reported a loss from operations of $54.479 million for the year ended December 31, 2025, compared to a loss of $14.183 million in 2024, highlighting challenges in operational profitability [29]. Operational Efficiency - Adjusted EBITDA for Q4 2025 was $3.2 million, down from $6.0 million in Q4 2024, while full year adjusted EBITDA increased by 4% to $29.2 million compared to the previous year [4]. - The adjusted EBITDA has risen by 54% over the last three years, indicating a positive trend in operational performance [6]. - The adjusted EBITDA for Q4 2025 was $3.2 million, with an adjusted EBITDA margin of 2.92%, down from 5.96% in Q4 2024 [26]. - Income from operations, as adjusted (Non-GAAP), for the year ended December 31, 2025, was $29.161 million, a significant increase from a loss of $10.594 million in 2024 [29]. - The company is focusing on restructuring efforts to enhance its operational footprint and improve earnings power moving forward [6]. - The company plans to continue focusing on operational efficiency and cost management to improve future performance [21]. Costs and Expenses - The cost of products sold (excluding depreciation and amortization) increased to $93.5 million in Q4 2025, up from $80.2 million in Q4 2024, reflecting a 16.4% rise [20]. - The company reported a depreciation and amortization expense of $21.785 million for the year ended December 31, 2025, compared to $18.611 million in 2024, reflecting an increase of 11.6% [29]. - Severance and other exit costs for the year ended December 31, 2025, amounted to $7.463 million, which is a notable expense impacting the overall financial performance [29]. - Stock-based compensation for the year ended December 31, 2025, was $1.351 million, slightly lower than $1.478 million in 2024, suggesting a potential reduction in equity-based incentives [29]. Market Conditions - The company experienced lower demand due to tariff impacts on the steel market and a ramp-up of the Sweden facility, which affected overhead absorption [5]. - Ampco-Pittsburgh's Air and Liquid Processing business showed growth potential, with full year revenue increasing for the fourth consecutive year and adjusted operating income reaching a record high in 2025 [4]. - Other income for Q4 2025 declined due to lower pension income and foreign exchange gains compared to the previous year [7]. - Interest expenses for Q4 2025 were $2.8 million, consistent with the previous year, while total interest expenses for the full year were $11.4 million [6]. - The exit from the UK cast roll facility is expected to yield an annual positive EBITDA improvement of $7 million to $8 million [4].

Revenue and Sales Performance - Full Year 2025 revenue increased by 15.8% to $58.6 million, driven by a 33.8% growth in OEM sales to $36.9 million[12] - Fourth Quarter 2025 net sales were $13.1 million, a 6.9% increase year-over-year, with OEM sales growing 30.1% to $8.1 million[7] - For the year ended December 31, 2025, net sales increased to $58.63 million, up 15.5% from $50.65 million in 2024[35] - DTC sales declined by 8.5% to $20.7 million for the full year 2025, reflecting ongoing macroeconomic pressures[12] Profitability and Losses - The company reported a net loss of $(69.9) million for the full year 2025, compared to a net loss of $(40.6) million in the previous year[14] - Gross profit for the full year 2025 was $15.6 million, reflecting a gross margin of 26.7%, an increase of 370 basis points year-over-year[13] - The company reported a net loss of $69.38 million for the year, compared to a net loss of $40.62 million in 2024, indicating a 70.8% increase in losses[35] - EBITDA for the year ended December 31, 2025, was $(47,849) thousand, a decrease from $(17,739) thousand in 2024[40] - Adjusted EBITDA for the full year 2025 was $(11.8) million, an improvement from $(18.5) million in the prior year[14] - Adjusted EBITDA for the year ended December 31, 2025, was $(11,795) thousand, compared to $(18,500) thousand in 2024[40] Expenses and Cost Management - Operating expenses for the fourth quarter 2025 were $12.6 million, up from $9.7 million, primarily due to one-time expenses[8] - Operating expenses for the year totaled $38.82 million, an increase of 3.8% from $37.39 million in 2024[35] - Research and development expenses were $2.98 million for the year, down 45.5% from $5.45 million in 2024[35] - Strategic cost realignment is expected to generate approximately $8.9 million in annualized savings[4] Cash Flow and Assets - Cash and cash equivalents at the end of the period were $18.27 million, significantly up from $4.85 million at the end of 2024[37] - Total current assets rose to $50.18 million as of December 31, 2025, compared to $32.93 million in 2024, reflecting a 52.5% increase[32] - The company experienced a net cash used in operating activities of $25.97 million, compared to $7.19 million in 2024[37] Debt and Liabilities - Total liabilities decreased to $52.76 million from $84.62 million in 2024, a reduction of 37.6%[32] - Interest expense for the year ended December 31, 2025, was $20,265 thousand, slightly down from $21,504 thousand in 2024[40] - The company recognized a debt extinguishment expense of $31,285 thousand during the reporting period[40] - The company incurred $1,938 thousand in debt restructure expenses for the three months ended December 31, 2025[40] Shareholder Information - The weighted average number of shares outstanding increased to 4,783,337 for the year ended December 31, 2025, from 686,683 in 2024[35] - Net loss attributable to common shareholders for the three months ended December 31, 2025, was $45,355 thousand, compared to a loss of $9,842 thousand for the same period in 2024[40] Other Financial Metrics - Depreciation and amortization for the year ended December 31, 2025, totaled $2,236 thousand, compared to $1,372 thousand in 2024[40] - Stock-based compensation for the three months ended December 31, 2025, was $135 thousand, while it was $714 thousand for the year ended December 31, 2024[40] - The company recognized $891 thousand in ChEF Equity Facility termination fees during the reporting period[40] - The company reported a loss on impairment of assets of $873 thousand for the three months ended December 31, 2024[40]

Revenue Generation - Direct-to-Consumer segment generated $70.9 million in revenue and $0.3 million in operating income for the year ended December 31, 2025[31] - Licensing segment contributed $46.4 million in revenue and $31.8 million in operating income for the year ended December 31, 2025[36] - Byborg was the largest licensee in 2025, contributing $20.0 million, or 17%, of consolidated revenues[33] - The top five active license agreements generated approximately $32.4 million in revenue for the year ended December 31, 2025, with future royalty revenue of approximately $343.1 million through 2034[36] - Approximately 67% of the company's revenue for the year ended December 31, 2025, was derived from international customers, with 44% of that revenue denominated in foreign currency[386] Joint Ventures and Partnerships - The new joint venture with UTG Brands Management Group involves a total purchase price of $45 million for a 50% interest in Playboy's China licensing business[54] - The initial closing of the joint venture is expected by March 31, 2026, with total aggregate consideration of $15.003 million at the first closing[55] Business Strategy and Focus - The company aims to expand into three high-potential verticals: licensing, media and experiences, and hospitality, focusing on high-margin revenue[39] - In 2025, the company focused on stabilizing its businesses and improving profitability, with a capital-light model emphasizing higher margins and lower working capital[38] - The company has shifted to a licensing model for its digital businesses, significantly improving margins and reducing working capital requirements[51] Employee and Financial Overview - As of December 31, 2025, the company had a total of 588 employees, including 199 full-time and 389 part-time employees[64] - The company had cash of $37.8 million and restricted cash of $5.0 million as of December 31, 2025, compared to $30.9 million and $2.4 million, respectively, in 2024[383] - Outstanding debt obligations were $159.9 million as of December 31, 2025, with an interest rate of 10.08% for A&R Term Loans[385] Currency and Interest Rate Exposure - The company recorded an unrealized gain of $0.7 million related to foreign currency translation for the year ended December 31, 2025[387] - A 10% change in interest rates could increase or decrease annual interest expense by $0.8 million or $1.6 million, respectively[385] - The company has not entered into any interest rate swap contracts as of December 31, 2025, to mitigate interest rate fluctuations[384] Regulatory Compliance and Economic Factors - The company is in material compliance with various federal, state, local, and foreign regulatory requirements applicable to its business[72] - Inflationary factors may adversely affect the company's operating results, although no material impact has been observed in recent periods[388] - The company expects the percentage of revenue from outside the United States to increase in future periods as it continues to expand globally[386]

Financial Performance and Position - As of December 31, 2025, SmartBank's net loan and lease portfolio totaled approximately $4.3 billion, representing about 74% of total assets[21]. - SmartBank's investment policy emphasizes high-quality, investment-grade securities, primarily backed by U.S. government guarantees[30]. - SmartBank's net interest income is highly sensitive to interest rate changes, with a potential increase of approximately $3.4 million if rates rise by 200 basis points[126]. - Conversely, a decrease of 200 basis points could lead to a reduction in net interest income by approximately $4.06 million over the next 12 months[126]. - The company reported total loans for construction and land development at 100% or more of its total risk-based capital, indicating significant exposure in this area[111]. - As of December 31, 2025, the Company's CLD and CRE ratios were 71.45% and 277.30%, respectively, both below regulatory guidelines[153]. - Approximately 80% of the Company's loans and leases had real estate as a primary or secondary component of collateral, including 10% secured by construction and development[165]. - The Company’s 10 largest borrowing relationships totaled approximately $303 million, representing about 7% of the total loan portfolio, indicating significant concentration risk[168]. - The company may recognize losses on securities held in its portfolio due to interest rate increases or deteriorating market conditions, which could adversely affect financial results[181]. Regulatory Environment - The company is extensively regulated under federal and state law, which may impact its operations and earnings[54]. - The company and its affiliates must undergo regular on-site examinations by regulatory agencies to ensure compliance with legal and regulatory responsibilities[55]. - The company is required to maintain certain minimum capital levels based on ratios of capital to total average assets and risk-weighted assets[72]. - The capital rules require a capital conservation buffer of 2.5% above each minimum capital ratio requirement to absorb losses during economic stress[76]. - The company is subject to oversight by various regulatory bodies, including the SEC and the Public Company Accounting Oversight Board[70]. - The Dodd-Frank Act mandates that public companies provide shareholders with advisory votes on executive compensation at least every three years[69]. - The company is subject to various regulatory policies regarding dividend payments, which are limited by capital adequacy and regulatory minimums[88]. - The Company is required to submit capital restoration plans for regulatory approval if it fails to meet capital requirements, with holding companies guaranteeing these plans[79]. - SmartBank is subject to comprehensive supervision and regulation by the Federal Reserve and the Tennessee Department of Financial Institutions (TDFI)[90]. - The company’s ability to declare and pay dividends is limited and subject to regulatory restrictions, with future dividends dependent on various factors[191][192]. Competition and Market Conditions - The company faces strong competition from both bank and non-bank competitors, including national banks, fintech companies, and other financial intermediaries[50]. - Competition from fintechs is increasing, with these companies often operating under fewer regulatory restrictions, allowing for greater flexibility and lower costs[51]. - The company encounters strong pricing competition and may not offer the same range of products as larger national and super-regional banks[52]. - Economic conditions in the company's concentrated market areas, including East and Middle Tennessee, Alabama, and the Florida Panhandle, significantly impact loan origination and borrower repayment ability[144]. - Increased competition from various financial institutions may pressure the company to raise deposit rates or lower loan rates, potentially reducing profitability[148]. Growth Strategy - The company is focused on organic growth in loans and deposits, alongside disciplined merger and acquisition activities[19]. - SmartBank's strategic plan includes evaluating business combination opportunities, which may involve significant assets and liabilities[19]. - Future acquisitions are expected to be a key growth strategy, but the Company may face challenges in identifying suitable targets and realizing anticipated benefits[161]. - The Company anticipates an increase in loans to small to medium-sized businesses during 2026, focusing on this segment as a substantial part of its strategy[169]. Risk Management - The company has a comprehensive credit risk management process to monitor and manage credit quality across its loan portfolio[27]. - The company maintains allowances for credit losses based on credit risk analysis, but incorrect assumptions could lead to insufficient allowances and negatively impact net income[140]. - The company faces risks related to interest rate adjustments by the Federal Reserve, which could adversely affect deposit levels and loan demand[122]. - An increase in interest rates may lead to higher payment requirements for borrowers, increasing the potential for defaults and nonperforming assets[124]. - The company faces risks related to mortgage banking activities, particularly in higher interest rate environments, which could negatively impact net income and profitability[182]. - The company is exposed to risks from employee misconduct, which could lead to significant legal liability and reputational harm[188]. - The company may face challenges in retaining senior management and attracting experienced financial services professionals, impacting growth and customer relationships[187]. Cybersecurity - The company's risk management program emphasizes cybersecurity as a critical component, with the Information Security Officer (ISO) responsible for its development and monitoring[207]. - The information security program is based on the NIST Cybersecurity Framework and FFIEC guidelines, leveraging third-party benchmarking and threat intelligence to enhance effectiveness[208]. - The company employs a layered defensive strategy focused on prevention, identification, response, and rapid remediation of cyber threats[208]. - An Incident Response Plan is in place, evaluated and tested at least annually, to coordinate responses to cybersecurity incidents[210]. - The ISO has 18 years of experience in the financial services industry, providing substantial expertise in overseeing the information security program[212]. - The information security department consists of professionals with diverse technical expertise, ensuring compliance with industry expectations for education and certification[214]. - The company actively monitors email gateways for phishing campaigns and remote connections due to a significant portion of the workforce working remotely[208]. - Cybersecurity incidents experienced in the past have not materially affected the company's business strategy or financial condition[211]. - The ISO collaborates with peer banks and industry groups to discuss cybersecurity trends and ensure program effectiveness[208]. - The company maintains a third-party risk management program to assess and manage risks associated with external service providers[208]. Employee and Workplace Culture - SmartBank's employee base includes 581 full-time and 8 part-time associates, with over 66% of associates being women and 10% being minorities[41]. - The company achieved certification as a Great Place to Work® in 2025 and was recognized as the 28th best Financial and Insurance Services Company to work for[45]. - The company has adopted an updated clawback policy in October 2023 to ensure that incentive compensation plans do not encourage inappropriate risks[68].

Advertising and Revenue - The company expects to achieve over $1.4 billion in advertising spend by 2025, positioning itself as one of the largest Open Internet advertising platforms[45]. - In 2025, 93% of the company's revenue was derived directly from advertisers, leveraging proprietary digital buying platforms[48]. - The company had approximately 50 Joint Business Partnerships (JBPs) in process as of December 31, 2025, representing an average annual spend of $4 million each[49]. - The company serves approximately 10,000 media owners across CTV, online, and in-app environments, reaching over 2 billion consumers per month[54]. - Revenue from the company's CTV offering experienced consistent year-over-year quarterly growth in 2025, indicating strong demand in this segment[51]. - The company expects revenue fluctuations based on seasonal factors, with the fourth quarter historically reflecting the highest level of advertising activity[80]. Financial Management and Strategy - The company plans to maintain financial discipline by focusing on growing free cash flow and lowering debt leverage while investing in long-term growth[66]. - The company processes over one billion new data events per minute to support its high-performance integrated demand and supply platforms[69]. - The company aims to deepen relationships with media owners to maintain and grow access to premium, exclusive inventory, which is a cornerstone of its business strategy[61]. - The company plans to continue innovating across new and existing ad formats and user engagement tools, particularly in high-growth media environments like CTV and online video[62]. Employee and Organizational Structure - The company has approximately 1,700 employees, with 17% located in Israel, 17% in France, 13% in the United States, and 53% in other global offices[79]. - The company is committed to fostering employee engagement and development, which is seen as critical to innovation and productivity[78]. Compliance and Security - The company is certified under the E.U.-U.S. Data Privacy Framework, which became effective in July 2023, allowing for the transfer of personal data from the E.U. to the U.S.[88]. - The company maintains a robust privacy and security compliance program, adhering to various self-regulatory principles and industry standards[90]. - The company has implemented advanced security measures, including encryption of personal data and integration of third-party technology to scan ads for potential security violations[94]. - The company anticipates increased compliance costs and potential liability due to evolving laws and regulations related to data privacy and AI technologies[84]. Financial Position and Risks - Cash and cash equivalents amount to $128.2 million, with investments in marketable securities totaling $10.5 million[480]. - A 100-basis point change in interest rates would result in a change in the fair value of the investment portfolio of less than $0.1 million[481]. - The company assumed an Overdraft Facility with outstanding borrowings of $17.6 million as of December 31, 2025, carrying a variable interest rate based on the three-month EURIBOR plus a margin of 1.8%[482]. - Long-term debt as of December 31, 2025, includes Notes with a carrying value of $605.1 million, bearing a fixed interest rate[483]. - The company is monitoring inflation risks that could negatively impact business operations and financial condition[484]. - Credit risk is managed by monitoring the financial condition of customers and requiring prepayment from those with higher potential credit risk[485]. - The company may enter into foreign currency forward exchange contracts to manage foreign currency risk and reduce adverse impacts from exchange rate movements[479]. - The acquisition of Legacy Teads will increase foreign currency exposure, particularly to the Euro and other currencies, starting February 3, 2025[475].

Operating Expenses - For the three months ended January 31, 2026, total operating expenses were approximately $5,347,000, an increase of $256,000 compared to $5,090,000 for the same period in 2025[145] - For the nine months ended January 31, 2026, total operating expenses were approximately $13,540,000, an increase of $3,714,000 compared to $9,826,000 for the same period in 2025[146] Net Loss - The company reported a net loss of approximately $5,284,000 for the three months ended January 31, 2026, compared to a net loss of $6,362,000 for the same period in 2025[151] - The company incurred net losses of approximately $11,844,000 for the nine months ended January 31, 2026, compared to $12,790,000 for the same period in 2025[155] Working Capital - As of January 31, 2026, the company had working capital of $35,398,396, an increase of $27,382,951 from $8,015,445 as of April 30, 2025[153] Cash Flow - Net cash used in operating activities totaled approximately $12,132,000 for the nine months ended January 31, 2026, compared to $7,153,000 for the same period in 2025[156] - Net cash provided by financing activities totaled approximately $41,975,000 for the nine months ended January 31, 2026, primarily due to proceeds from the sale of common stock of approximately $31,695,000[158] Interest Income - The company reported interest income of approximately $191,000 for the nine months ended January 31, 2026, compared to $100,000 for the same period in 2025[149] Financing Activities - The company completed a financing in December 2025 for gross proceeds of $31.2 million through a private placement of shares and warrants[142] Project Development - The company is conducting engineering studies towards the completion of a feasibility study for the CK Gold Project[142]