Corporate Developments - CervoMed completed a merger with EIP Pharma on August 16, 2023, with EIP becoming a wholly-owned subsidiary[16]. - The company completed a merger on August 16, 2023, which was treated as a "reverse recapitalization" under US GAAP, resulting in the name change from "Diffusion Pharmaceuticals Inc." to "CervoMed Inc."[210]. - The principal corporate office is located at 20 Park Plaza, Suite 424, Boston, Massachusetts 02116, with a contact number of (617) 744-4400[211]. - The company was originally incorporated in Nevada in 1995 and reincorporated in Delaware in 2015, indicating a history of strategic corporate structuring[210]. Financial Activities - The company raised approximately $149.4 million through a private placement of 2,532,285 units on April 1, 2024[17]. - CervoMed's financial outlook includes estimates regarding expenses, future revenues, and capital requirements[22]. - The Vertex Agreement includes potential milestone payment obligations of up to $117.0 million, with $100,000 already paid to Vertex[97]. - The royalty payments to Vertex will be on a sliding scale in the low- to mid-teens percentage of net sales, depending on sales thresholds[96]. Clinical Trials and Research - CervoMed received a $21.3 million grant from the National Institute on Aging to support the RewinD-LB Trial, with $21.0 million awarded in January 2023[19]. - The RewinD-LB Trial is a Phase 2b clinical trial evaluating neflamapimod for treating dementia with Lewy bodies, with final results announced in October 2025[19]. - The company is initiating the RESTORE Trial, a Phase 2a clinical trial for neflamapimod in patients recovering from ischemic stroke, in Q2 2025[19]. - Neflamapimod is the only clinical drug candidate that has shown statistically significant improvements on clinical endpoints and a biomarker of neurodegeneration in both Phase 2a and Phase 2b clinical trials[31]. - The planned Phase 3 trial will enroll approximately 300 patients with DLB without AD co-pathology and will utilize a primary endpoint of mean change in CDR-SB over 32 weeks[46]. - The ongoing RESTORE Trial is evaluating neflamapimod in up to 90 participants recovering from ischemic stroke, with primary outcomes including change in Fugl-Meyer Assessment of Motor Recovery after Stroke[74]. - Neflamapimod has been selected for the EXPERTS-ALS platform to evaluate its impact on NfL levels in approximately 35 ALS participants over 18-24 weeks[77]. Drug Development and Mechanism - Neflamapimod's mechanism of action targets neuroinflammation, which is believed to impair synaptic communication and lead to cognitive and motor dysfunction[30]. - Neflamapimod is positioned as a potential first-in-class treatment for DLB without AD co-pathology, which comprises approximately 50% of all DLB patients[45]. - The AscenD-LB Trial enrolled 91 participants and demonstrated significant improvement in dementia severity (CDR-SB, p=0.023) and functional mobility (TUG test, p=0.044) with neflamapimod compared to placebo[48]. - In the RewinD-LB Trial, treatment improved change in CDR-SB by 1.12 points (p=0.004 vs. placebo) and ADCS-CGIC score by 0.82 points (p=0.004 vs. placebo) in patients without AD co-pathology[69]. Regulatory and Compliance - The FDA granted neflamapimod Fast Track Designation for DLB in October 2019 and Orphan Drug Designation for frontotemporal dementia in November 2024[79]. - Regulatory compliance is crucial, as failure to meet FDA requirements could lead to sanctions that adversely affect the company's operations[123]. - The FDA approval process involves multiple stages, including nonclinical studies, IND submission, and clinical trials, which require substantial time and financial resources[124][126]. - The FDA aims to review NDAs within 10 months after acceptance for filing, or within 6 months for priority review applications[136]. Intellectual Property - The company emphasizes the importance of intellectual property protection for its current and future product candidates[22]. - The company holds a patent for novel co-crystals of neflamapimod, expiring in 2038, which may enhance the drug's solubility and physical properties[101]. - The company holds ten main patent families related to neflamapimod, with expiration dates ranging from 2032 to 2044, ensuring a strong intellectual property position[114][120]. - The company is actively pursuing patent protection in various jurisdictions, including the US, Europe, and Japan, to safeguard its proprietary technologies[113]. Market and Competition - There is increasing competition in the market for treatments of DLB and other neurodegenerative diseases, with established pharmaceutical firms and smaller biotech companies pursuing various therapies[108]. - The company identifies limited competition in later-stage development for DLB, with Cognition Therapeutics, Inc. being a notable competitor focusing on symptomatic treatment rather than the underlying disease[109]. - The company faces potential challenges from competitors with greater financial resources and established market presence, impacting recruitment and clinical trial execution[111]. Employee and Governance - The company has 15 full-time employees as of December 31, 2025, maintaining the same number as the previous year[194]. - The company offers a competitive total rewards package, including a 90% employer contribution to family medical coverage and stock option grants to promote retention[198]. - The company has a highly qualified Scientific Advisory Board comprised of leaders in cell biology, intracellular signal transduction, neurotherapeutics, and translational neuroscience[209]. - The executive team includes John Alam as President and CEO, William Elder as CFO, and other key positions held by experienced professionals in their respective fields[207]. Risks and Challenges - The company emphasizes the importance of considering risk factors that could adversely affect its business and financial condition, which may lead to a decline in the market price of its securities[213]. - The company acknowledges that additional risks not currently known or believed to be immaterial could adversely affect its operations and financial condition[214]. - Significant uncertainty exists regarding the coverage and reimbursement status of FDA-approved products, which can affect sales and financial performance[177]. - Compliance with various healthcare laws and regulations is costly and time-consuming, with potential penalties for violations that could adversely affect operations[176].

Financial Recapitalization and Funding - The company completed a significant recapitalization on March 18, 2025, which included a $46.0 million non-brokered equity private placement and the conversion of a $20.9 million term loan, resulting in successful deleveraging of the balance sheet[27]. - The company received a non-binding letter of interest from the Export-Import Bank of the United States for potential financing of up to $150 million to support the redevelopment of the mines[29]. - The company closed a brokered public offering and a concurrent private placement on November 17, 2025, for gross proceeds of $80.0 million, which will be used for exploration and development activities at the mines[29]. - The Company requires additional capital to fund future activities and maintain operations, with no assurance that such financing will be available on favorable terms[54]. Strategic Direction and Project Development - The company announced a new strategic direction on April 10, 2025, aimed at rapidly demonstrating the size potential of the Selebi North and Selebi Main deposits[27]. - The company outlined its strategy and work programs for 2026, aiming to accelerate resource growth and advance projects toward future economic assessments[29]. - The company commenced a Preliminary Economic Assessment for the Selebi Mines in October 2025, focusing on mine design, process engineering, and cost estimation[31]. - The company advanced metallurgical flowsheet development at the Selebi Mines, demonstrating the potential to produce high-grade saleable copper and nickel-cobalt concentrates[31]. - The company plans to incorporate results from metallurgical work at the Selkirk Mine into an updated Mineral Resource Estimate in the first half of 2026[32]. Employment and Operations - As of December 31, 2025, the company had 204 full-time employees, with 202 located in Botswana[33]. - The Company is dependent on the performance of contractors for timely and cost-effective project completion, with potential risks if contractors fail to meet standards[71]. - The Company has experienced management with extensive knowledge of the regional business landscape and mining regulations in Botswana[127][128]. Risks and Challenges - The Company has negative cash flow from operations and anticipates this will continue until one or both of its material projects enter commercial production[53]. - The exploration and development of mineral deposits involve high financial risk, with substantial expenses required to establish resources and reserves[59]. - The Company's operations are subject to various risks associated with operating outside of the U.S. and Canada, including regulatory changes and political instability[57]. - The Company may face challenges in acquiring additional mineral interests due to competition from other companies with greater resources[64]. - The mining industry is intensely competitive, impacting the Company's ability to acquire desired properties and necessary capital[65]. - The Company may incur significant costs related to reclamation activities for its mining sites, which could exceed current provisions based on internal estimates[74]. - The Company faces foreign currency exchange risks as it operates in multiple countries and conducts transactions in various currencies[100]. - The threat of infectious diseases, as seen during the COVID-19 pandemic, could adversely affect the Company's business and market price of its shares[102]. - The Company may face challenges in obtaining necessary permits and licenses, which could adversely affect its operations[103]. - Changes in tax legislation or accounting rules could result in additional taxation, adversely affecting the Company's profitability[105]. - The Company is subject to environmental regulations that may evolve and impose stricter compliance costs, potentially affecting its operations[110]. - Operations in Botswana expose the Company to increased political and economic risks, which could materially affect its operations[123]. - The Company relies on various legal and regulatory compliance measures, and failure to comply may lead to significant penalties or operational disruptions[114]. Mineral Resources and Project Details - The Selebi Mines have an Indicated Mineral Resource of 3.00 million tonnes with a copper grade of 0.90% and a nickel grade of 0.98%, containing approximately 27.1 thousand tonnes of copper and 29.5 thousand tonnes of nickel[161]. - The Inferred Mineral Resource at the Selebi Main is 18.89 million tonnes with a copper grade of 1.69% and a nickel grade of 0.88%, containing approximately 319.2 thousand tonnes of copper and 165.5 thousand tonnes of nickel[161]. - The total Inferred Mineral Resource for the Selebi Mines is 24.72 million tonnes with an average copper grade of 1.50% and nickel grade of 0.92%, containing approximately 371.7 thousand tonnes of copper and 227.9 thousand tonnes of nickel[161]. - The Company operates under a mining license covering an area of 11,504 hectares, which is valid until May 26, 2032[149][150]. - The Selebi Mines were previously operated by BCL, which ceased operations in 2016 due to weak global commodity prices and subsequent liquidation in 2017[147][155]. - The Selkirk Mine has a Mineral Resource Estimate (MRE) of 44.2 million tonnes with grades of 0.30% Cu and 0.24% Ni, containing approximately 132,000 tonnes of Cu and 108,000 tonnes of Ni[176]. - The Selkirk Mine's historical production from 1989 to 2002 yielded over 1 million tonnes of material grading 2.6% Ni and 1.6% Cu[170]. - The mining license for the Selkirk Mine covers an area of 1,458 hectares and was renewed for ten years, expiring on May 26, 2032[167]. - The Selkirk Mine is located approximately 28 km southeast of Francistown, Botswana, with year-round access via paved and gravel roads[164]. - The Selkirk deposit is characterized by two styles of mineralization: massive sulphides (mined-out) and disseminated sulphides, with the latter averaging 120 m wide and 100 to 150 m thick[172][173]. Cybersecurity and Compliance - The Company has implemented a formal cybersecurity program guided by the NIST CSF 2.0 to manage risks associated with cybersecurity threats[137]. - The Board of Directors is actively involved in overseeing the effectiveness of the cybersecurity risk management program[140]. - The company has incurred significant legal, accounting, and other expenses due to public company reporting obligations, which may continue to increase[83]. - The company has limited experience managing as a U.S. public company, which could divert management's attention from day-to-day operations[81]. - The company may face challenges in maintaining effective internal controls over financial reporting, which could impact investor confidence[89]. - The company's internal control systems are designed to provide reasonable assurance regarding financial reporting reliability, but inherent limitations exist[88]. Market and Share Performance - The company's common shares are subject to volatility influenced by global macroeconomic developments and market perceptions[90]. - Future sales of substantial amounts of the company's securities could adversely affect the trading price of its common shares and warrants[93]. - The company does not intend to pay cash dividends in the near future, depending on future earnings and financial condition[94]. - The company may face delisting from Nasdaq and TSXV if it fails to meet continued listing requirements, which could negatively impact share price and capital raising efforts[95]. - The company's projects' economic viability is dependent on the future prices of minerals and metals, affecting profitability[96]. - The Company is exposed to volatile prices of base and precious metals, which can significantly impact its financial condition and operations[97]. - Global economic conditions, including consumer spending and inflation, may adversely affect the Company's growth and financial condition[98]. - Rising operating costs and supply chain constraints due to economic disruptions and inflationary pressures could negatively impact the Company's financial results[99].

Financial Performance - For fiscal 2025, the company reported an additional $45.1 million in revenue due to the 53rd week, contributing an estimated $12 million to adjusted EBITDA[207]. - Total revenue for fiscal 2025 was $2,733.3 million, an increase of $70.3 million or 2.6% compared to fiscal 2024[225]. - Adjusted EBITDA for fiscal 2025 was $300.1 million, compared to $298.1 million in fiscal 2024[243]. - Net loss for fiscal 2025 was $112.9 million, compared to a net loss of $92.8 million in fiscal 2024[243]. - Adjusted net income for fiscal year ended January 3, 2026, was $82.5 million, compared to $38.8 million for the fiscal year ended December 28, 2024, representing a 113% increase[245]. Enrollment and Capacity - As of January 3, 2026, the company operated 1,601 early childhood education centers, an increase from 1,574 centers in the previous year, with a total capacity for 214,803 children[215]. - Average weekly ECE full-time enrollment (FTEs) decreased by 2,901, or 2.0%, to 142,248 for fiscal 2025 compared to fiscal 2024[218]. - ECE same-center occupancy declined by 200 basis points to 67.8% for fiscal 2025, primarily due to lower enrollment at same-centers[220]. Revenue Sources - Revenue from early childhood education centers increased by $51.6 million, or 2.1%, primarily due to the impact of the 53rd week in fiscal 2025[226]. - ECE same-center revenue increased by $61.2 million, or 2.5%, to $2,488,829 for fiscal 2025, driven by the impact of the 53rd week[221]. - Revenue from before- and after-school sites increased by $18.7 million, or 9.5%, primarily due to the opening of new sites[227]. Expenses and Costs - Cost of services (excluding depreciation and impairment) rose by $95.6 million, or 4.7%, driven by higher personnel costs and rent expenses[228]. - Selling, general, and administrative expenses decreased by $125.8 million, or 29.7%, primarily due to lower stock-based compensation and bonus expenses[231]. - Stock-based compensation expense increased by $113.1 million due to modifications in stock-based award plans in conjunction with the IPO[209]. - Impairment losses surged by $193.5 million, or 1836.9%, due to a significant goodwill impairment related to market capitalization decline[232]. Cash Flow and Liquidity - Cash provided by operating activities increased by $122.6 million in fiscal 2025, driven by a change in net loss adjusted for non-cash items and higher accrued compensation[266]. - Cash used in investing activities increased by $7.2 million in fiscal 2025, primarily due to a $12.2 million increase in payments for acquisitions[267]. - The company had cash, cash equivalents, and restricted cash of $133.3 million at the end of fiscal year 2026, up from $62.4 million at the end of fiscal year 2024[265]. - The company expects to meet its liquidity requirements for at least the next 12 months through cash generated from operations and available borrowings[250]. Debt and Obligations - Long-term debt obligations, including interest, total $1.2 billion, with expected payments of $71.1 million in fiscal 2026 and $1.0 billion in four to five years[270]. - Total lease obligations amount to $2.4 billion, with expected payments of $285.8 million in fiscal 2026, $576.3 million in two to three years, $497.0 million in four to five years, and $1.0 billion thereafter[269]. - The First Lien Term Loan Facility bears interest at a variable rate equal to SOFR plus 2.75% per annum following a repricing amendment in July 2025[253]. - As of January 3, 2026, the company had no outstanding borrowings under the First Lien Revolving Credit Facility, with an available borrowing capacity of $189.7 million[257]. Interest Rate Management - The weighted average interest rate for the First Lien Term Loan Facility during fiscal 2025 was 7.24%[259]. - An estimated increase of 100 basis points in average interest rates on variable rate borrowings would result in an approximate $1.7 million increase in interest expense for fiscal 2025[305]. - The company entered into two forward starting pay-fixed-receive-float interest rate swap contracts in March 2025 with a combined notional amount of $500.0 million, one at 3.72% and the other at 3.74% fixed interest rates[306]. - The interest rate swap contracts are designed to hedge interest rate risk on a portion of the variable rate debt under the Credit Agreement[306]. Tax and Deferred Tax - The effective tax rate for fiscal 2025 was (20.9)%, compared to (18.7)% for fiscal 2024[236]. - The company does not anticipate the need for a valuation allowance against deferred tax assets as of January 3, 2026[301]. - The company reevaluates uncertain tax positions on a quarterly basis, which may result in recognition of a tax benefit or additional charge to the tax provision[302].

Financial Performance - Net Income for the twelve months ended December 31, 2025, was $61.6 million, representing an increase of 19.5% compared to $51.6 million for the same period in 2024[24]. - Adjusted EBITDA for the twelve months ended December 31, 2025, was $109.2 million, a decrease of 5.0% from $115.0 million in 2024[29]. - For the three months ended December 31, 2025, the Partnership generated net cash from operating activities of $21.4 million, a decrease of $11.1 million or 34.2% compared to $32.5 million in the same period in 2024[35]. - Net income for Q4 2025 was $15,711,000, representing a 12% increase compared to $14,079,000 in Q4 2024, and for the full year, net income rose to $61,645,000 from $51,591,000, a 19% increase[63]. - Adjusted Net Income attributable to common unitholders for Q4 2025 was $12,428,000, compared to $11,753,000 in Q4 2024, reflecting an increase of 6%[77]. - Common unitholders' interest in Adjusted Earnings per common unit for 2025 was $1.26, up from $1.12 in 2024, indicating a growth of 12.5%[77]. Revenue and Backlog - Estimated contracted revenue backlog as of December 31, 2025, was $0.84 billion with an average remaining contract term of 5.1 years[20]. - Voyage revenues for the three months ended December 31, 2025, were $40.0 million, a decrease of 4.1% from $41.7 million in the same period of 2024[26]. - Voyage revenues for Q4 2025 were $40,013,000, a decrease of 4% from $41,664,000 in Q4 2024, while total revenues for the year increased slightly to $156,624,000 from $156,403,000[59]. - Approximately $0.10 billion of the revenue backlog estimate relates to variable hire contracts with Yamal Trade Pte. Ltd., subject to yearly adjustments based on actual operating costs[41]. - For the year ended December 31, 2025, Yamal Trade Pte. Ltd. accounted for 36% of the Partnership's total revenues[45]. Fleet and Utilization - Fleet utilization for the twelve months ended December 31, 2025, was 99.3%, compared to 100% in 2024[12]. - The Partnership's fleet consists of six LNG carriers with an aggregate carrying capacity of approximately 914,000 cubic meters[50]. - The number of vessels remained stable at 6 throughout the periods reported[65]. - The fleet utilization rate was 98.8% in Q4 2025, slightly down from 100% in Q4 2024, while the average time charter equivalent rate increased to $68,547 from $68,408[65]. Costs and Liabilities - Net Interest and finance costs decreased to $4.7 million for the three months ended December 31, 2025, a reduction of 14.5% from $5.5 million in 2024[30]. - Total liabilities decreased to $313,014,000 in 2025 from $362,352,000 in 2024, reflecting a reduction in financial liabilities[61]. - Net interest and finance costs for the twelve months ended December 31, 2025, were $20,044,000, down from $28,629,000 in 2024, a reduction of approximately 30%[71]. Cash and Distributions - The Partnership declared a quarterly cash distribution of $0.050 per common unit for the quarter ended December 31, 2025, paid on February 27, 2026[19]. - As of December 31, 2025, the Partnership reported total cash of $41.0 million and outstanding financial liabilities under Sale and Leaseback agreements totaling $278.7 million[36]. - Cash and cash equivalents at the end of Q4 2025 were $41,039,000, down from $68,156,000 at the end of Q4 2024[64]. - The company repurchased common units costing $530,000 in Q4 2025, compared to $247,000 in Q4 2024[64]. Market and Regulatory Environment - The Clean Energy vessel is expected to enter a new time charter with Rio Grande LNG at a higher daily rate in early April 2026, which is anticipated to be accretive to revenues[21]. - The Partnership closely monitors the impact of sanctions and geopolitical events on its operations and financial condition[46]. - The full impact of the Russian war with Ukraine and related sanctions on the Partnership's business remains uncertain[56]. - The New E.U. Sanctions Regulations, effective January 1, 2027, may restrict the Partnership's ability to transport LNG from Russia, impacting the Yamal Charters[43]. - The Partnership had estimated contracted time charter coverage for 100% of its fleet's Available Days for 2026 and 2027, and 64% for 2028[37]. Management Insights - The partnership's management believes that Adjusted EBITDA provides useful information for comparing operating performance across periods and with other companies in the industry[74]. - Adjusted Net Income is defined as net income before non-recurring expenses and other adjustments, which aids in evaluating operating performance[79].

Revenue and Fleet Performance - Time charter revenues decreased by $14.7 million, or 6%, to $213.5 million in 2025 compared to $228.2 million in 2024, primarily due to a reduction in fleet size from the sale of two vessels[362]. - Operating days declined to 12,969 in 2025 from 14,009 in 2024, reflecting the impact of the reduced fleet size[362]. - Average time charter equivalent (TCE) rate increased to $15,454 in 2025 from $15,267 in 2024, indicating higher average daily earnings despite lower operating days[362]. - The average number of vessels in the fleet was 36.7 in 2025, down from 38.9 in 2024 and 41.1 in 2023, indicating a trend of fleet reduction[344]. - Ownership days decreased to 13,406 in 2025 from 14,219 in 2024, reflecting the impact of the reduced fleet size[344]. - Fleet utilization remained stable at 99.7% for 2025, consistent with the previous two years[344]. Expenses and Costs - Voyage expenses decreased by $1.2 million, or 9%, to $12.4 million in 2025, mainly due to lower commissions and reduced voyage and port expenses[363]. - Daily vessel operating expenses increased to $5,986 in 2025 from $5,808 in 2024, indicating rising operational costs[344]. - Vessel operating expenses decreased by $2.4 million, or 3%, to $80.2 million in 2025 compared to $82.6 million in 2024, primarily due to fewer ownership days following the sale of two vessels[364]. - Depreciation and amortization of deferred charges increased by $1.8 million, or 4%, to $46.5 million in 2025, driven by higher amortization of deferred drydock costs[365]. - General and administrative expenses rose by $0.7 million, or 2%, to $34.1 million in 2025, mainly due to higher payroll and legal expenses[366]. - Interest expense and finance costs decreased by $4.5 million, or 9%, to $43.0 million in 2025, attributed to lower average interest rates[368]. Cash Flow and Financing Activities - Net cash provided by operating activities decreased by $36.0 million, or 43%, to $47.5 million in 2025 compared to $83.5 million in 2024[385]. - Net cash used in investing activities was $32.0 million for 2025, including $1.5 million for vessels under construction and $118.3 million for investments[386]. - Net cash used in financing activities was $36.9 million for 2025, primarily due to $55.0 million from long-term debt issuance and $58.2 million in repayments[389]. - Working capital increased to $155.3 million as of December 31, 2025, from $126.4 million in 2024, driven by a $118.2 million increase in investments in equity securities[383]. - As of December 31, 2025, the company had $529.2 million of long-term debt[396]. - The company has outstanding commitments of $73.6 million for the construction of two newbuilding vessels expected to be delivered in 2027 and 2028[392]. - The company entered into a $100 million term loan facility with Danish Ship Finance A/S on April 12, 2023, to refinance outstanding loan balances and for working capital[399]. - A loan agreement of $100 million was established with DNB Bank ASA on June 26, 2023, with quarterly repayments of $3.8 million until December 27, 2029, and a margin reset provision[400]. - As of December 31, 2025, the company had drawn down $55 million under a loan agreement with the National Bank of Greece, with repayments of $1.3 million quarterly and a balloon payment of $25 million due on September 29, 2031[401]. Market Conditions and Valuation - The Baltic Dry Index (BDI) ranged from a low of 715 to a high of 2,845 in 2025, closing at 1,972 on March 12, 2026, indicating market volatility[411]. - Approximately 81% of the company's fleet ownership days in 2026 are fixed in time charter agreements at rates above the break-even rate[411]. - The average estimated daily time charter equivalent rate for Ultramax vessels is $16,309, which is significantly above the average break-even rate of $13,276, indicating a healthy margin[421]. - For Panamax/Kamsarmax/Post-Panamax vessels, the average estimated daily time charter equivalent rate is $13,596, compared to a break-even rate of $9,960, suggesting strong profitability potential[421]. - The Capesize/Newcastlemax vessels have an average estimated daily time charter equivalent rate of $17,517, exceeding the break-even rate of $12,954, reflecting favorable market conditions[421]. - The estimated charter-free market value of certain vessels is believed to be lower than their carrying value by approximately $37 million in 2025 and $22 million in 2024[418]. - The total carrying value plus unamortized deferred cost of the vessels is approximately $805 million for 2025 and $851 million for 2024, indicating a decrease of about 5.4% year-over-year[418]. - The aggregate carrying value of 10 vessels exceeded their charter-free market value by approximately $37 million as of December 31, 2025[416]. Impairment and Risks - Ten vessels are indicated to have impairment risks if time charter rates fall below the average break-even rate as of December 31, 2025[423]. - The impairment analysis indicates that a 15% reduction in time charter rates could trigger impairment of individual long-lived assets[420]. - The company has not recorded any impairment charges for the 1-year, 3-year, and 5-year average blended rates for its vessel types[423]. - The company relies on various industry sources for estimating vessel values, which are subject to high volatility and uncertainty[420]. Regulatory and Operational Challenges - The Company is facing changes in operating expenses, including bunker prices, crew costs, drydocking, and insurance costs[23]. - The Company's financial condition and liquidity are impacted by the availability of financing and refinancing, affecting its ability to fund capital expenditures and acquisitions[23]. - The Company is subject to compliance with governmental, tax, environmental, and safety regulations, including the U.S. Foreign Corrupt Practices Act[23]. - The Company relies on key personnel, which may affect its operational stability[23]. - The volatility of the Company's common shares may impact investor confidence and market performance[23]. - The Company is incorporated under the laws of the Marshall Islands, which may present different rights to relief compared to other jurisdictions[23]. - Global or regional pandemics have an impact on the dry-bulk shipping industry, affecting operational performance[23]. - Potential disruptions in shipping routes due to accidents, climate-related reasons, or political events may affect the Company's operations[23]. - The Company may face potential liabilities from pending or future litigation, which could impact financial results[23]. - The Company must navigate general domestic and international political conditions or labor disruptions that may affect its business[23].

Financial Performance - Total assets increased to $2,239,018,000 in 2025 from $2,197,841,000 in 2024, reflecting a growth of 1.8%[132]. - Net income for 2025 was $21,226,000, up from $11,099,000 in 2024, representing an increase of 91.1%[132]. - Loans, net rose to $1,540,583,000 in 2025, compared to $1,380,424,000 in 2024, marking a growth of 11.6%[132]. - Interest income increased to $114,371,000 in 2025 from $101,451,000 in 2024, a rise of 12.9%[132]. - The efficiency ratio improved to 66.48% in 2025 from 73.36% in 2024, showing enhanced operational efficiency[132]. - Diluted earnings per share reached $4.74 in 2025, up from $2.51 in 2024, reflecting an increase of 88.5%[132]. - The market value/book value ratio was 128.36% in 2025, compared to 91.47% in 2024, indicating a stronger market perception[132]. - Franklin Financial Services Corporation reported consolidated earnings of $21.2 million ($4.74 per diluted share) for 2025, a 91.2% increase from $11.1 million ($2.51 per diluted share) in 2024[141]. - Noninterest income for 2025 was $19.2 million, a 40.2% increase from $13.7 million in 2024, excluding a $4.3 million pre-tax securities loss in 2024[142]. Asset and Loan Management - As of December 31, 2025, approximately 85% ($1.326 billion) of the Bank's loans were secured by real estate[65]. - The Bank's commercial loan portfolio accounts for 78% ($1.224 billion) of the total loan portfolio, with commercial real estate loans secured by real estate totaling $998.4 million[66]. - The loan portfolio increased by 11.7% ($163.2 million) in 2025, driven by a $100.2 million increase in commercial real estate loans and a $45.6 million increase in residential real estate loans[188]. - Total gross loans reached $1.505 billion in 2025, with a yield of 5.84%, compared to $1.323 billion and a yield of 5.65% in 2024[154]. - The total interest-earning assets increased to $2.172 billion in 2025, generating interest income of $115.275 million, compared to $1.982 billion and $102.389 million in 2024[154]. - The allowance for credit losses increased by 17.0% to $20.655 million in 2025 from $17.653 million in 2024[191]. - The provision for credit losses on loans was $3.0 million for 2025, up from $2.0 million in 2024, primarily due to a specific reserve established for a commercial loan[142]. Market Position and Competition - The Bank's market share in Franklin County, PA is 34.15%, with total deposits of $1,270,316 thousand[26]. - In Cumberland County, PA, F&M Trust holds a market share of 3.81% with deposits of $443,912 thousand[26]. - The Bank faces strong competition in its primary market areas, which may adversely affect its financial condition and results of operations[71]. Employee Engagement and Retention - The total voluntary turnover rate for F&M Trust in 2025 was 7.03%, indicating strong employee retention[33]. - F&M Trust's compensation program aims to align employee pay with the Bank's performance and industry standards[32]. - The Bank's employee engagement score reached 85% in 2025, reflecting strong employee commitment[29]. Community Involvement - F&M Trust donated over $785 thousand to 324 organizations and funded 341 scholarships totaling $318 thousand in 2025[34]. - The Bank's Community Reinvestment Act rating is currently "satisfactory," which is important for receiving approval for new activities[46]. Regulatory Compliance and Risk Management - The Bank is classified as "well capitalized" under applicable regulations as of December 31, 2025[50]. - The Ability to Repay/Qualified Mortgages rules were effective January 10, 2014, impacting the Bank's mortgage lending practices[55]. - The Bank did not opt-in to the Community Bank Leverage Ratio despite meeting the criteria as a Qualifying Community Banking Organization[49]. - Cybersecurity risks have increased, and any breaches could result in significant costs and reputational damage[73]. - The Corporation has developed a comprehensive information security program to protect sensitive data and mitigate cybersecurity risks, which includes regular training and testing[102][104]. - The Corporation's cybersecurity framework is based on industry standards and best practices, ensuring robust protection against various cyber threats[103]. Financial Risks and Economic Conditions - Changes in trade policies and tariffs could negatively affect economic conditions for the Corporation's customers, potentially leading to lower revenues and increased loan delinquencies[94]. - The financial services industry has faced negative developments, including bank failures and liquidity concerns, which may adversely impact the Corporation's financial condition and stock price[92]. - The Bank's profitability is influenced by interest rate spreads, and changes in interest rates could adversely impact net interest income[72]. Shareholder Information - The Corporation's common stock trades on the Nasdaq Capital Market under the system FRAF, with 1,493 shareholders of record as of December 31, 2025[116]. - The Corporation's ability to pay dividends is subject to regulatory limitations, which may affect its capacity to distribute dividends to shareholders[98].

Revenue and Financial Performance - Revenue from the Remote Power Patent exceeded $188 million from May 2007 through December 31, 2025, but constituted 100% of revenue for 2025 ($150,000), 2024 ($100,000), and 2023 ($2,601,000) as the patent expired in March 2020 [58]. - The company has invested $7 million in ILiAD, a clinical stage biotechnology company, with uncertain future outcomes [57]. - The company's financial results are difficult to predict and may fluctuate significantly due to various external factors [61]. - The company may not be able to continue its semi-annual cash dividends of $0.05 per share, which have been paid since December 2016 [65]. - The market price of the company's common stock may be highly volatile, influenced by various factors beyond its control [86]. Patent and Intellectual Property - The company has established a patent portfolio of 119 U.S. patents and 15 foreign patents, generating $47.15 million from the Mirror Worlds Patent Portfolio [59]. - Patent litigation outcomes are uncertain, with ongoing cases against Citadel Securities, Jump Trading, Optiver, and Samsung, which could materially impact future revenue and net income [56]. - The patent monetization cycle is long and costly, with significant time lags between acquiring patents and recognizing revenue [60]. - Changes in patent law and increased litigation costs may adversely impact the company's ability to enforce its patents [66][70]. - Ongoing litigations involving patents within the HFT Patent Portfolio and M2M/IoT Patent Portfolio could impact the company's financial performance [87]. Corporate Governance and Structure - The corporate charter allows the Board of Directors to issue up to 10,000,000 shares of preferred stock, which may adversely affect common stockholders if issued [82]. - The company is subject to "anti-takeover" provisions that could prevent business combinations with stockholders owning 15% or more for three years without board or stockholder approvals [83]. - The company's By-laws require advance notice for director nominations and new business at stockholder meetings, which could limit stockholder participation [84]. - Provisions in the corporate charter could deter unsolicited takeovers and limit stockholders' ability to approve transactions they deem beneficial [85]. Competition and Market Conditions - The company faces intense competition for acquiring intellectual property and entering strategic relationships, with competitors having greater financial resources [72][73]. - The CEO's personal efforts are crucial to the company's success, and his potential departure could have a material adverse effect [64]. - The company is subject to inherent uncertainties in estimates, judgments, and assumptions used in financial statement preparation, which could materially affect its business and financial condition [81]. - The common stock of the company is traded on the NYSE American exchange under the symbol "NTIP" and may face delisting if it fails to comply with continued listing standards [80].

Financial Performance - Net sales for the third quarter were $265 million, a slight decrease from $267 million in the same period last year[4] - Net income increased to $41.2 million, up from $39.6 million year-over-year, reflecting a growth of approximately 4%[8] - Earnings per share rose by 5% to $0.44 compared to $0.42 in the prior year[4] - Gross profit was $100 million, indicating a 60 basis point year-over-year margin improvement[4] - Operating cash flow for the quarter was $136 million, with quarter-end cash growing to $314 million[4] - The company reported a trailing twelve-month net income of $188.1 million, with earnings per share of $2.01[8] Market Trends and Innovations - January shipments increased by 7% despite disruptions from winter storm Fern, indicating a positive trend in volume[3] - The company is focusing on innovation, with new products like PineApple CocoNut and Strawberry Peach gaining favorable market responses[5] - LaCroix, the company's largest brand, aligns with consumer trends favoring low-sugar and natural ingredient beverages, positioning it for continued leadership[5] Strategic Focus - National Beverage Corp. emphasizes its strong balance sheet and commitment to healthy, innovative products for future growth[5]

Financial Performance - Total net revenues for the year ended December 31, 2025, were $164.872 million, a 52% increase from $108.488 million in 2024[314]. - Gain on loans, net increased to $136.148 million in 2025, representing 82% of total revenue, up from $78.098 million (72%) in 2024[314]. - Funded Loan Volume for the year ended December 31, 2025 was $4,744 million, a 32% increase from $3,594 million in 2024[339]. - D2C Loan Volume increased by 14% to $2,928 million for the year ended December 31, 2025, up from $2,562 million in 2024[340]. - B2B Loan Volume decreased by 91% to $95 million for the year ended December 31, 2025, down from $1,032 million in 2024[341]. - Total Loans funded increased by 31% to 15,386 for the year ended December 31, 2025, compared to 11,755 in 2024[343]. - Total net revenues for the year ended December 31, 2025 were $164,872 thousand, compared to $108,488 thousand in 2024[367]. - Gain on loans, net increased by 74% to $136,148 thousand for the year ended December 31, 2025, from $78,098 thousand in 2024[368]. - Total Expenses for the year ended December 31, 2025 were $330,691 thousand, compared to $313,928 thousand in 2024[367]. - Net loss for the year ended December 31, 2025 was $165,872 thousand, compared to a net loss of $206,290 thousand in 2024[367]. - Adjusted Net Loss for the year ended December 31, 2025, was $131.7 million, improving from a loss of $162.8 million in 2024[408]. - Adjusted EBITDA for the year ended December 31, 2025, was a loss of $115.8 million, compared to a loss of $121.0 million in 2024[408]. Loan Volume and Types - Refinance loan volume surged by approximately 119% to $1.015 billion in 2025 from $463 million in 2024[336]. - Purchase loan volume rose by approximately 8% to $2.875 billion in 2025 from $2.652 billion in 2024[337]. - HELOC loan volume increased by approximately 78% to $854 million in 2025 from $479 million in 2024[338]. - The average loan amount increased slightly to $308,321 in 2025 from $305,757 in 2024[335]. - Average Loan Amount increased by approximately 1% to $308,321 for the year ended December 31, 2025, from $305,757 in 2024[346]. Operational Changes and Strategy - The company plans to continue investing in technology to enhance customer experience and reduce operational costs through automation[313]. - The company aims to expand its homeownership product offerings, providing a comprehensive solution for customers[331]. - The company is winding down its non-core international operations, with plans to complete several entity sales by 2026[319]. - The company intends to use net proceeds from the ATM Program for general corporate purposes, including working capital and increasing warehouse line capacity[431]. Financial Position and Assets - Total assets increased by $592.4 million, or 65%, to $1.5 billion as of December 31, 2025, compared to $913.1 million as of December 31, 2024[390]. - Cash and cash equivalents decreased by $111.3 million, or 53%, to $99.8 million as of December 31, 2025, compared to $211.1 million as of December 31, 2024[390]. - Customer deposits increased by $628.9 million, or 469%, to $763.0 million as of December 31, 2025, compared to $134.1 million as of December 31, 2024[390]. - Loans held for investment increased by $611.9 million, or 549%, to $723.3 million as of December 31, 2025, compared to $111.5 million as of December 31, 2024[393]. - Senior notes carrying value was $198.8 million as of December 31, 2025, following the exchange of Convertible Notes for Senior Notes in April 2025[396]. - Additional paid-in capital rose by $246.5 million, or 13%, to $2,109.8 million as of December 31, 2025, from $1,863.3 million as of December 31, 2024[398]. - Accumulated deficit increased by $165.9 million, or 9%, to $2,076.2 million as of December 31, 2025, compared to $1,910.4 million as of December 31, 2024[399]. Cash Flow and Financing Activities - Net cash used in operating activities decreased by $213 million, or 56%, to $167 million for the year ended December 31, 2025, compared to $380 million in 2024[433]. - Net cash used in investing activities increased by $518 million, or 360%, to $662 million for the year ended December 31, 2025, primarily due to loan originations[434]. - Net cash provided by financing activities increased by $475 million, or 199%, to $714 million for the year ended December 31, 2025, driven by increased customer deposits[435]. - The company raised approximately $568 million in gross proceeds from the Business Combination in August 2023, including $528.6 million in Convertible Notes[414]. - The company has an aggregate available amount of $575.0 million from warehouse lines of credit as of December 31, 2025[412]. - The company entered into a Note Exchange Agreement to exchange $532.5 million of existing Convertible Notes for $155.0 million in Senior Notes and a cash payment of $110.0 million[422]. Risk Management - The company expects to face fluctuations in performance due to interest rate changes, impacting loan origination volumes[320]. - The company manages interest rate risk through hedging instruments, expecting these to reduce earnings volatility[466]. - The company anticipates that interest rates will remain the primary market risk for the foreseeable future, impacting production volume and revenue[461]. - The company is classified as an emerging growth company (EGC) and will cease to be an EGC when total annual gross revenue exceeds $1.235 billion or by March 8, 2026[459]. - The company has limited exposure to foreign currency exchange risk, primarily generating revenue in U.S. dollars, but expects this exposure to increase due to expansion in the United Kingdom[476][477]. - The company employs stringent underwriting standards to mitigate credit risk, which includes monitoring loan performance through subservicing agents[471]. - As of December 31, 2025, the company was exposed to interest rate risk on $466.7 million of loans held for sale (LHFS) and $4.0 million of net interest rate lock commitments (IRLCs)[467]. - A hypothetical decrease in interest rates by 100 basis points would result in a $6.6 million increase in the combined fair value of LHFS and IRLCs[468]. Lease and Operational Costs - Operating lease costs decreased from $10 million in 2024 to $5 million in 2025 due to real estate footprint reduction initiatives[437]. - As of December 31, 2025, the company had lease liabilities of $4.6 million, reflecting remaining contractual obligations for future lease payments[438]. - The average holding period of loans from funding to sale was approximately 30 days in 2025[464].

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ________________________________________ FORM 10-K ________________________________________ x 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 o 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 001-40143 ________________________ ...