Financial Performance - Tenaris reported an EBITDA of $2.9 billion and net income of $2.0 billion on net sales of $12.0 billion for the year[27]. - Free cash flow amounted to $2.0 billion, all of which was distributed to shareholders through dividends and share buybacks[27]. - The company proposed a 7% increase in the annual dividend per share compared to the previous year[27]. - Tenaris maintained a net cash position of $3.3 billion at year-end[27]. Market Operations - In the U.S. and Canada, Tenaris achieved record production levels, supplying 90% of its U.S. sales through its integrated production and supply chain[29]. - Major oil and gas companies are seeking new production reserves, and Tenaris is actively involved in supporting these projects with advanced coated line pipe solutions[30]. - The company is currently delivering casing for Shell's Sparta 20K project in the U.S. deepwater and extending services for ExxonMobil's operations in Guyana[31]. - In Latin America, Tenaris is investing to expand its fracking and coiled tubing service business, expecting to deploy a third set of equipment by year-end[32]. - Tenaris has consolidated its presence in the Middle East with a long-term agreement for the supply of OCTG to the Northwest Field development in Qatar[35]. Technological Advancements - The company is integrating advanced AI capabilities into its industrial and administrative processes to enhance efficiency and reduce environmental impact[36]. - The Rig Direct® service offering has been expanded globally, integrating digital solutions and supply-chain services to enhance operational efficiency and reduce costs[131]. Economic and Regulatory Challenges - The company is a global steel pipe manufacturer primarily focused on the oil and gas industry, which is sensitive to fluctuations in oil and gas prices, affecting demand for steel pipe products[55]. - The company has significant operations in Argentina and Mexico, facing heightened economic and political risks, including high inflation and regulatory uncertainty, which could adversely affect costs and profitability[59][60]. - The armed conflict in the Middle East has led to disruptions in global trade flows and increased energy prices, impacting the company's operations and financial condition[61]. - Climate change legislation and evolving ESG regulatory frameworks may reduce demand for the company's products and services, increasing operating costs and capital expenditures[62][64]. - The global market for steel pipe products is highly competitive, with excess capacity leading to pricing pressures and potential loss of market share[68]. - The company is subject to tariffs and international trade regulations, which could materially impact operations and cost structures[72]. - Antidumping and countervailing duty proceedings may affect the company's sales and access to important export markets[70]. - The company anticipates that the transition to a lower-carbon economy will require adaptation in its business strategy to maintain competitiveness[63]. - The physical risks associated with climate change, such as extreme weather events, could disrupt operations and adversely affect financial results[66][67]. - The company maintains a strong relationship with Pemex, a significant customer, but faces credit exposure due to delayed payments, which could impact revenues[60]. - The company faces challenges in profitability due to increases in raw material and energy costs, as well as disruptions in supply chains caused by geopolitical tensions, such as the Russia-Ukraine war and conflicts in the Middle East[73]. - The availability and pricing of critical raw materials are subject to volatility from various factors, including new regulations, natural disasters, and market fluctuations, which could adversely affect production and sales[74]. - Low capacity utilization and inability to attract a qualified workforce may negatively impact profitability, especially during economic downturns or crises like the COVID-19 pandemic[75]. - The adoption of artificial intelligence and automation in manufacturing may require reskilling of employees and could lead to labor relations challenges, affecting productivity and costs[76]. - The company plans to consolidate its position as a leading global supplier by reducing carbon emissions and developing low-carbon energy products, but implementation may face unexpected costs and delays[80]. - Acquisitions and partnerships are subject to scrutiny by regulatory authorities, which could impose conditions that affect the expected benefits and synergies of such transactions[82]. - External factors like market volatility and supply chain disruptions could undermine the anticipated benefits of the company's business strategy[83]. - Manufacturing disruptions from equipment failures or natural disasters could adversely impact operations and financial results[84]. - The company is exposed to foreign exchange rate risks due to its global operations, which could affect financial condition and results[89]. - Compliance with evolving environmental regulations may increase operating costs and impact competitiveness, particularly in jurisdictions with stringent standards[97]. - The company relies heavily on information systems and faces persistent cyber threats, which could materially impact business operations[104]. - Supply chain complexity increases operational risks, including potential disruptions and financial losses if critical third parties are affected[105]. - The company does not maintain standalone cyber insurance, which may leave it vulnerable to unmitigated cyber-related losses[106]. - Dividend payments depend on the financial condition of subsidiaries, which could be restricted by legal and regulatory limitations[108]. Shareholder and Corporate Structure - As of December 31, 2025, the controlling shareholder, San Faustin, owned 66.13% of the company's issued share capital, potentially influencing decisions that may not align with minority shareholders' interests[111]. Workforce and Production Capacity - The company has a workforce of around 25,000 people worldwide, supporting its operations and customer needs[120]. - The effective annual production capacity for seamless tubes is projected to be 4,743 thousand tons in 2025, with actual production expected to be 3,093 thousand tons[149]. - The Bay City seamless mill, a $1.8 billion investment, has a capacity of 823,000 tons per year and is part of Ternium's strategic expansion[153]. - The Veracruz facility in Mexico has an installed annual production capacity of 1,230,000 tons of seamless steel pipes and 1,200,000 tons of steel bars, enhancing Ternium's operational capabilities[161]. - The effective annual production capacity for seamless pipes is 371,000 tons, with an outside diameter range of 3.5 to 9.875 inches[165]. - The effective annual production capacity for welded pipes is 200,000 tons, with an outside diameter range from 4.5 to 12.75 inches[166]. - The principal manufacturing facility in South America has an effective annual production capacity of 794,000 tons of seamless steel pipe and 1,300,000 tons of steel bars[170]. - The welded pipe manufacturing facility in Argentina has an annual production capacity of 620,000 tons, processing steel coils and plates for various applications[172]. - The Confab facility in Brazil has an annual production capacity of 654,000 tons, producing welded steel pipes for oil, petrochemical, and gas applications[173]. - The TuboCaribe facility in Colombia has an estimated annual ERW production capacity of 105,000 tons and a finishing capacity of 250,000 tons for seamless pipes[174]. - The seamless steel pipe manufacturing facility in Romania has an annual production capacity of 258,000 tons[182]. - The facility in Saudi Arabia has an annual capacity of 390,000 tons for welded pipes, covering a diameter range from 2 to 20 inches[185]. - The threading facility in the United Arab Emirates has an annual finishing capacity of 70,000 tons, catering to premium technology demand[188]. - The total annual manufacturing capacity of sucker rods across various facilities is approximately 3.1 million units[194]. Sales and Market Trends - Total net sales for 2025 were $11,981 million, a decrease from $12,524 million in 2024 and $14,869 million in 2023[197]. - The Tubes segment accounted for 95% of total net sales in 2025, with net sales of $11,400 million, down from $11,907 million in 2024[197]. - North America represented 49% of Tubes sales in 2025, an increase from 46% in 2024, while South America accounted for 18%[198][199]. - U.S. crude oil production rose to 13.5 million b/d in 2025, up from 5.6 million b/d in 2011, making the U.S. the largest global producer of crude oil[202]. - The U.S. government extended a 25% tariff on steel imports to 50% in June 2025, impacting market prices and supply chains[205]. - The final antidumping duty rate for Tenaris's imports from Argentina was reduced to 6.76% in June 2025, down from 78.30%[209]. - In Canada, the government applied a 50% tariff on steel imports exceeding established quotas starting August 2025[216]. - The Canadian government initiated an antidumping investigation on OCTG from Mexico and other countries, with preliminary dumping rates of 26.2% for Mexico[217]. - Tenaris has been negotiating the renewal of its long-term agreement with Pemex, which has faced financial difficulties leading to reduced investments in drilling[219].

Revenue Performance - Consolidated revenue for the full year 2025 was approximately $54.3 million, a decrease of 18% from approximately $66.1 million in 2024[3] - Healthcare Operations revenue decreased by approximately $12.6 million to $39.7 million, attributed to a decline in total prescriptions filled by approximately $11.3 million[3] - Total e-Commerce revenues increased to approximately $14.6 million in 2025, up from $13.8 million in 2024, primarily due to increased sales of airtime and hardware[3] Gross Margin and Operating Expenses - Overall gross margin for 2025 declined to approximately 20%, down from 26% in 2024, with Healthcare Operations gross margin decreasing to approximately 19%[3] - Total operating expenses for 2025 were approximately $19.9 million, a significant decrease of 50% from approximately $40.0 million in the prior year[3] Net Loss and Cash Position - The net loss attributable to common stockholders for 2025 was approximately $11.7 million, or ($0.44) per diluted share, compared to a net loss of approximately $13.4 million, or ($0.65) per diluted share in 2024[11] - The company ended 2025 with approximately $13.7 million in cash and no meaningful unsecured debt, alongside approximately $15.0 million in working capital[11] Cost Reduction and Business Focus - The company successfully cut over $2 million in annualized costs and reduced staff headcount by more than 25%[11] - The company is focusing on higher margin healthcare business development and has secured new high-volume contracted medication fulfillment services[11] - Future growth opportunities include potential acquisitions and joint ventures to expand mail order medication fulfillment offerings nationwide[11] Asset and Liability Changes - Total assets decreased from $37,077 million in 2024 to $27,465 million in 2025, a decline of approximately 26%[17] - Total current assets fell from $32,079 million in 2024 to $24,156 million in 2025, representing a decrease of about 25%[17] - Cash reserves decreased significantly from $19,960 million in 2024 to $13,709 million in 2025, a reduction of approximately 31%[17] - Accounts payable and accrued expenses increased from $7,230 million in 2024 to $8,265 million in 2025, an increase of about 14%[17] - Total liabilities rose from $9,680 million in 2024 to $10,043 million in 2025, marking an increase of approximately 4%[17] Equity and Deficit Changes - The accumulated deficit widened from $48,351 million in 2024 to $60,063 million in 2025, an increase of about 24%[17] - Total equity decreased from $27,397 million in 2024 to $17,422 million in 2025, a decline of approximately 36%[17] - Additional paid-in capital increased from $75,697 million in 2024 to $77,586 million in 2025, an increase of about 2%[17] Inventory and Lease Liabilities - Inventory decreased from $4,881 million in 2024 to $3,396 million in 2025, a reduction of approximately 30%[17] - Operating lease liabilities decreased significantly from $404 million in 2024 to $158 million in 2025, a decline of about 61%[17]

Financial Performance - The company has incurred losses totaling €400.8 million since inception, with a net loss of €24.0 million for the year ended December 31, 2025[101]. - As of December 31, 2025, the company had cash and cash equivalents of €52.8 million[101]. - The company anticipates ongoing significant losses for the foreseeable future due to its focus on research and development[96]. - The company has not yet established a source of revenues sufficient to cover its operating costs[103]. - The company may encounter difficulties in raising additional funding, which could adversely affect its business and financial position[104]. Development and Clinical Trials - The company expects to continue incurring significant expenses related to the development and manufacturing of nanotechnology product candidates and conducting clinical studies[102]. - The company’s product candidates are in various phases of development, with a high rate of attrition expected[112]. - Clinical trials for product candidates, including JNJ-1900 (NBTXR3), may encounter substantial delays or fail to demonstrate safety and efficacy[120]. - Patient enrollment challenges could delay or prevent clinical studies, impacting the timeline for regulatory approval[133]. - The company faces potential delays in patient enrollment for clinical trials, which could increase costs and affect the timing of analyses and outcomes[137]. - Undesirable side effects from product candidates may halt clinical development, delay regulatory approval, or limit commercial potential[138]. - Limited clinical trial applications may reveal high incidence of side effects, impacting the development of product candidates[139]. Strategic Partnerships and Licensing - The company relies on its strategic licensee, Janssen, for the clinical development and commercialization of its lead product candidate JNJ-1900 (NBTXR3)[92]. - The global exclusive licensing agreement with Janssen is critical, as future payments from this agreement are expected to contribute significantly to revenue[159]. - The company transferred the sponsorship of the NANORAY-312 clinical trial to JJEI, increasing reliance on Janssen for oversight[160]. - The company relies on third-party partners for the development and commercialization of JNJ-1900 (NBTXR3), increasing operational risks[157]. - The company may face significant disruptions if Janssen terminates the licensing agreements, impacting expected revenue and operational stability[163]. Regulatory and Compliance Risks - The approval processes for product candidates, such as JNJ-1900 (NBTXR3), are lengthy and costly, with no guarantee of success[212]. - Regulatory changes could significantly increase costs and complexity in drug development, impacting the economic value of product candidates[211]. - Ongoing regulatory requirements will apply even after obtaining marketing authorization, affecting manufacturing, labeling, and post-market safety[217]. - Compliance with healthcare laws is essential to avoid significant penalties and reputational harm, impacting future earnings[221]. - The company is subject to numerous environmental, health, and safety laws, and failure to comply could result in substantial costs and impair research and development efforts[191]. Intellectual Property Risks - The company's competitive position may decline if it fails to adequately protect its intellectual property rights, including patents and trade secrets[237]. - Patent protection is uncertain due to potential challenges from third parties and the lengthy process of obtaining patents, which may affect the commercialization of product candidates[238]. - The lifespan of patents is limited, with issued patents and applications expiring between 2029 and 2045, potentially impacting the company's competitive advantage[250]. - The company may not seek patent protection in all jurisdictions, limiting its ability to enforce intellectual property rights globally[252]. - The company’s success depends on its ability to operate without infringing on third-party intellectual property rights, which could lead to costly litigation or licensing fees[263]. Operational and Management Risks - The company expects its employee base to continue to grow as it manages development and expansion, which includes operating manufacturing facilities and commercializing product candidates[181]. - The management identified no material weaknesses in internal control over financial reporting as of December 31, 2025, but future weaknesses could limit the ability to prevent or detect misstatements[196]. - The company relies heavily on key management personnel, and losing them could have a material adverse effect on its operations[272]. - Attracting and retaining qualified personnel is critical, and failure to do so could negatively impact the company’s ability to develop its product candidates[273]. Market and Competitive Environment - The company faces substantial competition in the biotechnology and oncology industries from companies with greater resources and experience[98]. - Pricing pressures are expected to continue and may increase, making it difficult for the company to sell future products at acceptable prices[233]. - Political and legislative uncertainty may harm the company's ability to market products and generate revenues, potentially increasing compliance and operating expenses[232]. - Cost-containment measures by governments and payors may adversely affect the company's ability to set fair prices for its products[226]. Cybersecurity and Data Privacy Risks - Cybersecurity threats, including ransomware attacks, pose significant risks to the company's information technology systems and could disrupt operations and clinical trials[198]. - Data privacy regulations, including GDPR and HIPAA, impose requirements on the collection and use of personally identifiable information, and non-compliance could adversely affect the company's operations and financial condition[203]. - The company faces potential civil and criminal penalties if it fails to comply with applicable privacy laws, including GDPR and HIPAA[206].

Revenue and Growth - Revenue for the year ended December 31, 2025, increased by approximately 5% year-over-year to $48,450,000, up from $46,028,000 in 2024[4] - Revenue for the year ended December 31, 2025, was $48,450,000, an increase from $46,028,000 in 2024, representing a growth of approximately 5.2%[24] - Revenue from the Public Safety product line increased to $17,401,000 in 2025, up from $14,807,000 in 2024, primarily due to higher perpetual license sales[8] Financial Performance - Gross margins expanded to 56% in 2025, compared to 49% in 2024, driven by a focus on higher-value, recurring revenue streams[4] - Adjusted EBITDA loss was reduced by approximately 38%, improving from a loss of $29,103,000 in 2024 to a loss of $18,101,000 in 2025[14] - Loss from operations improved by 47%, decreasing from $54,323,000 in 2024 to $28,886,000 in 2025[11] - The net loss for 2025 was $31,460,000, compared to a net loss of $61,410,000 in 2024, reflecting an improvement of about 48.7%[24] - Loss per common share for 2025 was $0.26, significantly better than the loss per share of $0.71 in 2024[24] Cash Flow and Expenses - The company achieved positive operating cash flow in Q4 2025, marking its first quarter of cash inflow from operations[4] - Total operating expenses for 2025 were $55,957,000, down from $77,007,000 in 2024, indicating a decrease of approximately 27.4%[24] - Cost of revenue decreased to $21,379,000 in 2025 from $23,344,000 in 2024, a reduction of about 8.5%[24] - Research and development expenses decreased to $14,596,000 in 2025 from $18,766,000 in 2024, a decline of approximately 22.4%[24] Assets and Liabilities - Total assets increased to $85,387,000 as of December 31, 2025, compared to $82,475,000 in 2024[20] - Total liabilities decreased to $42,517,000 in 2025, down from $48,334,000 in 2024, reflecting improved financial health[20] - Total stockholders' equity increased to $42,870,000 as of December 31, 2025, up from $34,141,000 in 2024, a growth of approximately 25.5%[22] - Accumulated deficit increased to $291,553,000 in 2025 from $260,093,000 in 2024, indicating a rise of about 12.1%[22] Strategic Initiatives - The company on-shored Rekor Command® engineering and product operations to the United States, enhancing customer service and product responsiveness[4] - Rekor announced plans to launch Rekor Labs, a new subsidiary focused on developing patented products for identifying synthetically created and modified media[4] Shareholder Information - The weighted average shares outstanding increased to 119,667,774 in 2025 from 86,717,724 in 2024, reflecting an increase of about 37.9%[24]

Financial Performance - 76.1% of the underlying properties in the portfolio are stabilized with a weighted average occupancy of 90.5%[41] - The portfolio-wide weighted average debt service coverage ratio (DSCR) is 1.24x, and the weighted average loan to value (LTV) is 63.6%[41] - The average debt service coverage ratio (DSCR) indicates a strong ability to cover debt obligations, supporting investment stability[41] - The weighted average maturity of investments is 3.1 years as of December 31, 2025, indicating a relatively short-term investment horizon[41] Investment Strategy - The primary investment objective is to generate attractive, risk-adjusted returns for stockholders over the long term[42] - The company targets investments in first-lien mortgage loans, mezzanine loans, preferred equity, and multifamily properties, focusing on top 50 MSAs[44] - The expected leverage ratio will not exceed 3-to-1, which is considered prudent given the asset-level leverage typically present[46] - The company actively monitors and stress-tests each investment to make informed and proactive investment decisions[43] Competitive Landscape - The company competes with various institutional investors, including other REITs and specialty finance companies, which may affect its ability to acquire target assets at attractive prices[60] Management and Fees - The management fee paid to the Manager is 1.5% of Equity, paid monthly in cash or shares[51] Regulatory Compliance - The company has elected to be treated as a REIT for U.S. federal income tax purposes, starting from the taxable year ended December 31, 2020[62] - The company must continuously meet various requirements under the Code to maintain its REIT status, including income sources, asset composition, and distribution levels[62] - The company intends to conduct operations to avoid registration as an investment company under the Investment Company Act, ensuring that investment securities do not exceed 40% of total assets[64] - Certain subsidiaries are expected to meet the exclusion requirements under Section 3(c)(5)(C) of the Investment Company Act, which necessitates at least 55% of assets to be qualifying assets[66] - The company is classified as a "smaller reporting company" and may utilize scaled disclosures available to such companies[67] - As of December 31, 2025, the company had no employees, as it is externally managed by its Manager[68]

Revenue Segmentation - For the year ended December 31, 2025, approximately 27% of revenue was generated by the e-Commerce segment and 73% by the healthcare segment[15]. - e-Commerce operations generated revenue from two primary sources: product sales and recurring service revenue, with recurring service revenue representing an increasing proportion of total revenue[19]. - Amazon accounted for approximately 31% of total e-Commerce revenue in 2025, highlighting the importance of third-party marketplaces[19]. - The company operates three proprietary global e-Commerce websites and approximately 25 third-party marketplace storefronts, with over 10,000 product listings[20][31]. - The company has a diverse customer base, with no single customer representing more than 3% of annual gross e-Commerce revenue[45]. Strategic Plans and Acquisitions - The company plans to target US government sales, which historically have not represented a significant part of revenue, aiming to become an approved seller on the US Government's GSA Schedule[37]. - The company intends to pursue future acquisitions to increase scale, expand revenue, and access new markets[38]. - The company aims to expand its product offerings and open new global e-commerce storefronts to develop revenue in new markets[36]. - There are opportunities for geographic expansion of dispensing operations throughout the U.S., supported by investments in sales and marketing efforts[66]. - The specialty pharmacy industry is highly fragmented, presenting opportunities for strategic acquisitions to enhance competitive positioning[67]. Healthcare Operations - Pharmco, a subsidiary, achieved a Five Stars performance score from EQuIPP® for the year ended December 31, 2025, ranking among the top pharmacies in the U.S.[50]. - ClearMetrX offers data management and reporting services, including Third-Party Administration (TPA) services for 340B covered entities, pharmacy data analytics, and HEDIS Quality Measures management[51]. - Pharmco pharmacies provide contracted pharmacy services under the 340B Drug Discount Pricing Program, acting as a pass-through for reimbursements on prescription claims[52]. - Pharmco utilizes a unit-of-dose packaging system for long-term care facilities, enhancing distribution efficiency and patient care[54]. - The average adherence rate for patients to prescribed medication protocols is 50%, with the company employing proactive patient engagement strategies to improve this metric[69]. - The company plans to grow its healthcare operations by focusing on data management services, which are expected to drive growth due to their higher margins and diverse monetization pathways[65]. - The healthcare operations face substantial competition from large companies like CVS Caremark and Walgreens, which have significant market share and resources[75]. - The healthcare segment focuses on improving medication adherence and expanding long-term care pharmacy services[214]. - The healthcare segment participates in the federal 340B Drug Pricing Program, contributing to pharmacy segment margins[210]. Financial Performance and Risks - For the year ended December 31, 2025, the company incurred a net loss of approximately $10.5 million, compared to a net loss of $22.5 million for the year ended December 31, 2024[110]. - As of December 31, 2025, the company had an accumulated deficit of approximately $60.1 million[110]. - The primary supplier accounted for 98% of pharmaceutical purchases for the year ended December 31, 2025, with McKesson being the main supplier[109]. - The company has experienced inventory shortages due to supply chain constraints, manufacturing, and logistical issues[108]. - The company expects to incur additional losses prior to recording sufficient revenue from operations due to costs associated with maintaining public company status and expanding revenue sources[110]. - The company is subject to various risks, including the ability to obtain sufficient funding and retain market share in the industry[111]. - The company faces risks related to inventory and receivables, as significant working capital is required for purchasing inventory, which may lead to write-downs if demand is overestimated[145]. - A significant portion of the pharmacy segment's gross profit is derived from the federal 340B Drug Pricing Program, and adverse changes to this program could materially affect profitability[164]. - The company is exposed to cybersecurity risks, and any significant incident could adversely affect operations and financial condition[168]. - The company incurs substantial legal and compliance costs as a public entity, which may affect investor confidence and stock price[175]. Compliance and Regulatory Issues - The company emphasizes compliance with federal and state regulations, ensuring adherence to legal requirements in its operations[81]. - The company operates under significant regulatory scrutiny, particularly regarding compliance with healthcare laws and regulations[99]. - The company has been notified by Nasdaq of its failure to comply with certain continued listing requirements, including maintaining a minimum bid price of $1.00 per share[129]. - The company received a letter from Nasdaq notifying it of its eligibility for a second 180-day period to regain compliance with the minimum bid price requirement, which ends on April 27, 2026[131]. - A reverse stock split proposal was approved by shareholders to increase the stock price and regain compliance with Nasdaq listing requirements[132]. - If the stock price falls below $1.00 for ten consecutive trading days following the reverse stock split, the company will be subject to immediate delisting from Nasdaq[138]. - The company may face challenges in maintaining compliance with Nasdaq listing rules even after a successful reverse stock split, potentially impacting its ability to attract financing partners[138]. - The Reverse Stock Split aims to help regain compliance with Nasdaq's Minimum Bid Price Requirement and enhance liquidity, but its long-term effectiveness is uncertain[139]. - The company expects the Reverse Stock Split to increase the market price of its common stock, but it may also reduce the total number of outstanding shares, potentially decreasing liquidity[141]. - If the Reverse Stock Split leads to a decrease in the market price of the common stock, the overall market capitalization of the company may decline[143]. Corporate Structure and Operations - The company had 121 full-time employees and 9 part-time employees as of December 31, 2025[107]. - The company relocated its corporate office to a 11,000 sq. ft. facility in Hallandale Beach, Florida, in August 2025[184]. - The company operates through two primary segments: e-Commerce Operations and Healthcare Operations, focusing on global distribution and healthcare analytics[208]. - The company has never paid cash dividends and does not anticipate doing so in the foreseeable future[199]. - A $2.0 million share repurchase program was authorized on December 16, 2024, which expired on December 16, 2025[200].

Market Overview - ROC's total addressable market (TAM) is projected to be approximately $106 billion globally by 2025, with segments including Vision AI at $23.7 billion, Biometrics at $60.3 billion, Video Analytics at $12.3 billion, and Digital Evidence at $9.4 billion[41]. - The global Vision AI market is estimated to grow from $15.8 billion in 2024 to $108.9 billion by 2033, reflecting a compound annual growth rate (CAGR) of approximately 24.1%[42]. - The global biometrics market reached an estimated $50.08 billion in revenue in 2024, projected to grow to approximately $307.24 billion by 2034, expanding at a CAGR of 19.89% from 2025 to 2034[49]. - The video analytics market was valued at around $10.25 billion in 2024 and is projected to reach approximately $48.94 billion by 2032, with a CAGR of 21.8% from 2025 to 2032[55]. - The global digital evidence management market was valued at around $7.5–7.7 billion in 2023, with forecasts predicting growth to approximately $13–15 billion by 2028–2029 and around $19 billion by the early 2030s, indicating a CAGR in the 10–12% range[62]. Technology and Product Efficiency - ROC's latent fingerprint algorithm is capable of searching a database more than 500 times faster than competitors, showcasing significant algorithmic efficiency[33]. - ROC's face recognition algorithm ranked 61st out of 338 in hardware efficiency, outperforming all key competitors who did not rank within the top 150[33]. - ROC's biometric algorithms are routinely ranked by NIST as among the most accurate and computationally efficient globally, providing a competitive advantage in the market[34]. - ROC's products are designed for operational AI, focusing on accuracy, speed, and auditability, which are critical for applications in law enforcement and national security[32]. - ROC's edge analytics solutions align with the trend of integrating video analytics with cloud and edge computing architectures, projected to reach approximately $75 billion by 2030[59]. Market Trends and Growth Drivers - The U.S. Vision AI market is expected to account for about 30.6% of global revenue in 2024, driven by strong investments in AI across government and commercial sectors[43]. - The edge-enabled portion of the video analytics market is projected to grow at approximately 34% annually, significantly outpacing overall market growth[46]. - The video analytics market is driven by the proliferation of video data, with estimates suggesting tens of millions of surveillance cameras are active globally, necessitating AI analytics for effective monitoring[58]. - The adoption of multimodal biometric solutions is increasing, from 16% of organizations in 2023 to 22% in 2024, enhancing accuracy and reliability[56]. Regulatory and Compliance Factors - Regulatory factors are influencing the biometrics and video analytics markets, with increasing scrutiny on privacy and data protection driving demand for compliant solutions[53][61]. - The company faces regulatory challenges related to privacy and data protection laws, which could impact operations and compliance costs[130]. - The EU's GDPR imposes penalties of up to €20 million or 4% of annual global revenues for noncompliance, affecting operational changes[124]. - The California Consumer Privacy Act (CCPA) took effect on January 1, 2020, requiring businesses to disclose data collection and sharing practices[227]. - The California Privacy Rights Act (CPRA), effective January 1, 2023, expands the CCPA, providing California residents with greater control over sensitive personal information[227]. Financial Performance and Risks - ROC has achieved organic growth without venture capital, allowing it to remain lean and cost-effective, delivering enterprise-grade systems at a fraction of the cost of legacy vendors[77]. - ROC's revenue has primarily come from smaller contracts, leading to unpredictable and non-recurring revenue streams[83]. - As of December 31, 2025, two customers accounted for 43% of total revenue, highlighting customer concentration risks[141]. - The company anticipates that existing cash and cash equivalents will be sufficient to meet cash needs for at least the next twelve months[186]. - The company may not successfully execute its strategy to increase sales to larger customers, which involves greater risks and longer sales cycles[183]. Operational Challenges - The complexity of software implementation may lead to customer dissatisfaction if not properly managed, potentially resulting in contract terminations or non-renewals[149]. - The company faces challenges in hiring and retaining qualified personnel, particularly in competitive markets, which could hinder growth and operational efficiency[158][160]. - Rapid growth since 2015 has strained resources, and failure to manage this growth effectively could harm business operations and financial condition[156][157]. - Increased customer demand may strain service teams, making it difficult to provide timely support and potentially hindering growth[165]. Cybersecurity and Data Protection - The company faces risks related to cybersecurity threats, which could materially impact its business and financial results[201]. - Unauthorized access to information technology systems could result in significant remediation costs and reputational damage[203]. - The company maintains cybersecurity insurance, but it may not be sufficient to cover all costs or liabilities associated with data security incidents, which could harm its financial condition[204]. Research and Development - The company invests heavily in research and development, with approximately 50% of its technical workforce holding advanced degrees in relevant fields[117]. - ROC's R&D efforts focus on proprietary Vision-AI technology, achieving top-tier rankings in independent evaluations by NIST[118]. - The company plans to significantly grow its R&D team to accelerate innovation and expand its AI-driven technology portfolio[120].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ________ TO ________ COMMISSION FILE NUMBER 001-41304 VALUENCE MERGER CORP. I (Exact name of registrant as specified in its charter) | Cayman Islands | N/A | | --- | --- | | ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ________ TO ________ COMMISSION FILE NUMBER 001-41304 VALUENCE MERGER CORP. I (Exact name of registrant as specified in its charter) | Cayman Islands | N/A | | --- | --- | | ...

Debt and Financial Obligations - The company has an outstanding debt of $2.316 billion as of February 1, 2026, with €408 million in senior unsecured term loans and €600 million in senior unsecured notes maturing in 2027[159] - The company recorded a net leverage ratio that must remain below a maximum level under its senior unsecured credit facilities, with potential non-compliance leading to defaults[161] - The company has significant obligations under defined benefit pension plans, with volatility in market conditions potentially increasing pension costs and liabilities[167] Impairment and Asset Valuation - The company recorded $480 million in noncash impairment charges due to a significant increase in discount rates, representing a material impact on its financial results[171] - As of February 1, 2026, the company has $2.022 billion in goodwill and $3.096 billion in other intangible assets, which together account for 44% of total assets[171] Risk Management and Compliance - The company utilizes foreign currency forward contracts to mitigate cash flow risks associated with inventory transactions, but cannot eliminate these risks entirely[157] - The company is subject to adverse tax authority decisions and changes in tax laws, which could materially affect its operations and cash flow[163] - The company is engaged in various intercompany transactions that may be scrutinized by local tax authorities, potentially leading to additional tax liabilities[165] - The company is subject to increasing data privacy and security laws globally, which may require changes in operations and could lead to significant costs and reputational damages if compliance issues arise[182] - The company has established a global data privacy program with guidelines and training to ensure compliance with various data protection laws, including the General Data Protection Regulation and the California Consumer Privacy Act[182] Technology and Operational Risks - The company relies on information technology systems for operations, and disruptions could significantly impact its business and reputation[176] - The company announced a partnership with OpenAI to integrate an enterprise ChatGPT platform, which poses risks related to data exposure and privacy[177] - The company is currently undertaking a major multi-year SAP S/4 implementation to upgrade its platforms and systems worldwide, which involves risks and uncertainties that could adversely affect business operations and financial condition[181]