Store Operations - Torrid operates 483 stores across the U.S., Puerto Rico, and Canada, primarily located in premium malls and shopping centers[38] - The average store size is approximately 3,200 square feet, designed to enhance customer experience with comfortable fitting rooms[38] - As of January 31, 2026, Torrid employed approximately 1,530 full-time and 4,155 part-time employees, with a focus on creating a supportive work environment[42] - The distribution facility in West Jefferson, Ohio, spans 750,000 square feet and supports omni-channel capabilities for e-Commerce and retail store order fulfillment[54] - The company leases a 750,000 square foot distribution facility in West Jefferson, Ohio, with the lease expiring in 2030[199] Customer Demographics and Engagement - The typical customer is a woman aged 30 to 44, wearing sizes 10 to 30, with approximately half under 40 years old[29] - Torrid's loyalty program, Torrid Rewards, allows customers to earn one point for every dollar spent, with significant contributions from top-tier members accounting for a large share of net sales[30] - The company emphasizes inclusivity in its marketing, targeting curvy women and promoting confidence through its brand messaging[49] - The target market consists of approximately 30 to 44-year-old plus- and mid-size women, with changing stylistic preferences that could lead to inventory markdowns if not effectively managed[80] Product Strategy - The company introduces new merchandise approximately 16 times per year, maintaining a consistent flow of fresh products to engage customers[27] - Torrid employs a data-driven approach to product development, utilizing customer feedback and sales data to inform design and inventory decisions[26] - The e-Commerce platform is central to Torrid's strategy, providing a seamless shopping experience and expanding product offerings beyond in-store availability[35] - Torrid's unified commerce platform integrates e-Commerce and retail stores, enhancing customer acquisition and retention across channels[34] Financial Performance and Risks - In fiscal year 2025, no single quarter contributed more than 27% of the company's net sales, indicating reduced seasonality in sales[58] - The company is sensitive to consumer spending and general economic conditions, with potential adverse effects on financial performance during economic slowdowns or inflationary periods[76] - Recent inflationary pressures have increased the cost of energy and raw materials, which may negatively impact sales and results of operations if costs cannot be passed on to customers[78] - The company has substantial indebtedness and lease obligations, which could strain resources and impact financial flexibility[79] - The company has significant lease obligations, with all store locations, corporate headquarters, and distribution centers leased under operating leases with initial terms of up to ten years[94] Competition and Market Environment - The company faces competition from various players in the apparel industry, including specialty retailers and direct-to-consumer brands, emphasizing its unique focus on plus- and mid-size customers[59] - The company faces substantial competition in the plus- and mid-size women's apparel industry, which could adversely affect net sales and margins[83] - The growth strategy, including retail store optimization, is dependent on effective e-Commerce operations and the ability to secure desirable store locations[90] Supply Chain and Vendor Management - The company has a diversified vendor base, with no single supplier accounting for more than 10% of merchandise purchased in fiscal year 2025[53] - The company plans to continue diversifying its vendor bases by both vendor and geography, reducing exposure to factories located within China[53] - Approximately 19% of the company's products were sourced from China in fiscal year 2025, decreasing to about 11% as of March 2026, indicating a diversification strategy[123] - Disruptions in the supply chain due to trade restrictions or natural disasters could adversely affect inventory levels and operational efficiency[121] Regulatory and Compliance Issues - The current U.S. trade environment has introduced significant uncertainty, with increased tariffs impacting the cost of goods sold and gross margins[65] - The company is actively monitoring the tariff environment and taking steps to mitigate the impact of higher duties on its business[65] - The company is subject to evolving governmental regulations aimed at reducing greenhouse gas emissions, which may lead to increased operational costs[116] - Compliance with privacy and data protection laws is becoming increasingly complex, potentially leading to higher operational costs and legal risks[130] Cybersecurity and Operational Risks - The company is vulnerable to cybersecurity risks, and breaches could lead to financial losses and reputational damage[106] - The company recognizes the critical importance of cybersecurity and has implemented multiple layers of processes, technologies, and controls to manage risks[188] - The Board oversees the overall risk assessment process, with cybersecurity remaining a top priority[196] - The company has a written incident response plan to address cybersecurity events, outlining steps for coordination among various corporate functions[192] Financial Obligations and Shareholder Matters - As of January 31, 2026, the outstanding indebtedness under the Amended Term Loan Credit Agreement is $272.4 million, net of unamortized original issue discount and debt financing costs[158] - The company has never declared nor paid any cash dividends, and future dividend payments will depend on various factors including financial condition and contractual restrictions[176] - The company may issue securities in the future to raise capital, which could lead to dilution of existing stockholders[172] - The concentration of ownership by Sycamore Partners may conflict with the interests of other stockholders and could impede favorable corporate transactions[166]

Financial Performance - In 2025, the company reported a revenue increase of 36.5% compared to 2024, while the cost of revenue increased by 29.6%, resulting in a gross margin expansion of 2.1%[311]. - The operating loss increased by 12% to approximately $2.8 million in 2025 from about $2.5 million in 2024, primarily due to a $320K impairment of intangible assets and a $290K increase in amortization of intangibles[312]. - The company reported a net loss of $2,540,368 for the year ended December 31, 2025, compared to a net loss of $1,773,942 for 2024, reflecting an increase in non-cash expenses[338]. - Total revenue increased by $2,868,141, or 36%, for the year ended December 31, 2025, driven by acquisitions and increased digital product sales[339]. - B2B revenue increased by $2,688,302, or 62%, during the year ended December 31, 2025, primarily due to the Eastern Standard acquisition[350]. - B2C revenue increased by $179,839, or 5%, during the year ended December 31, 2025, mainly from digital product sales in the Proofread Anywhere subsidiary[353]. - Total cost of revenue increased by $982,820, or 30%, due to recent acquisitions and increased service costs[341]. - General and administrative expenses rose by $1,748,926, or 31%, during the year ended December 31, 2025, primarily due to higher advertising and contractor costs[342]. - The company recognized total impairment charges of approximately $440,000 for the year ended December 31, 2025, compared to $121,000 for 2024[346]. Cash Flow and Financing - The company ended 2025 with $2.17 million in cash, up from $0.47 million at the end of 2024, and utilized approximately $500K for regular business operations post-year-end[314]. - The company raised approximately $1,700,000 from private offerings of Series A preferred stock and $1,000,000 from common stock offerings through December 31, 2025[355]. - The company entered into a securities purchase agreement to sell $6,000,000 in Senior Secured Convertible Notes, maturing on November 17, 2027[356]. - As of December 31, 2025, the company received $2,322,500 in cash proceeds and $2,447,500 in digital assets from the Senior Secured Notes[357]. - Cash used in investing activities was $2,480,759 for the year ended December 31, 2025, primarily related to investments in digital assets, compared to cash provided of $451,000 in 2024[361]. - Cash flows from financing activities increased significantly to $5,094,351 in 2025 from $326,336 in 2024, indicating improved financing conditions[362]. - The company received $4,770,000 from convertible notes payable and $993,356 from common stock units sales during 2025, highlighting successful capital raising efforts[363]. Digital Assets and Investments - The company acquired approximately $2.4 million in digital assets, including Bitcoin, Ether, and Solana, during Q4 2025, with a total fair value of approximately $2.3 million as of December 31, 2025[308]. - The company holds digital assets including Bitcoin, Ether, and Solana, with fair value changes recognized in income, reflecting the company's engagement in cryptocurrency markets[372]. - The company utilizes a third-party asset manager for staking ETH and SOL, retaining these assets on its balance sheet measured at fair value[375]. Future Plans and Strategy - The company plans to pursue growth through acquisitions in 2026, having reviewed several promising opportunities in its pipeline[332]. - The company aims to create a unified "AgencyCo" structure to enhance alignment across its agencies, adapting to changes brought by AI in the industry[317]. - The company anticipates balancing the need to reinvent parts of its agency while ensuring continued reliable cash flow across its portfolio in 2026[319]. Non-GAAP Measures and Financial Metrics - The company presents EBITDA and EBITDA As Defined as non-GAAP financial measures to evaluate operating performance and liquidity, although these measures have limitations[384]. - EBITDA As Defined for 2025 was $151,207, a significant improvement from $(587,651) in 2024, attributed to the acquisition of Eastern Standard[313]. - EBITDA for the year ended December 31, 2025, was $(823,408), while for the year ended December 31, 2024, it was $(765,538)[391]. - Depreciation and amortization expense increased to $1,201,161 in 2025 from $906,737 in 2024[391]. - Interest expense, net, rose to $498,409 in 2025 from $101,667 in 2024[391]. - Impairment losses were reported at $733,962 for 2025, significantly higher than $121,000 in 2024[391]. - Stock-based compensation increased to $240,653 in 2025 from $56,887 in 2024[391]. - The company did not provide quantitative and qualitative disclosures about market risk, indicating a focus on internal financial metrics[392].

Operations and Production - The Eagle Springs Refinery has been operational since September 30, 2022, and is producing diesel, vacuum gas oil (VGO), naphtha, and liquid paving asphalt from crude oil suppliers in the Uintah basin [20]. - The Eagle Springs refinery experienced a shutdown during Q4 2025 for boiler repairs, negatively impacting financial results for Q3 and Q4 2025, with expectations to resume operations by the end of Q2 2026 [24]. - The Eagle Springs Refinery has a nameplate production capacity of approximately 80,000 barrels per month, with an anticipated operational output of around 45,000 barrels per month in 2026 [66]. - The PR Spring Facility is expected to produce asphalt paving aggregate from remediated asphalt shingles and mined bitumen sands [70]. - The company aims to increase production output, driven by nearby refinery shutdowns that reduce diesel supply and increase margins [89]. Financial Condition and Risks - The company has experienced recurring losses from operations, raising substantial doubt regarding its ability to continue as a going concern, and has outstanding debt that is past due [13]. - The company reported operational losses of $9,248,500 and $7,523,186 for the years ended December 31, 2025, and 2024, respectively, raising substantial doubt about its ability to continue as a going concern [113]. - As of the date of the report, the company has approximately $7,618,831 in outstanding debt that is currently past due, with reduced payments being made to lenders [115]. - The company anticipates an increase in operating expenses in the near future, with no assurance of profitability soon [118]. - The company is exploring partnerships to optimize supply costs for crude oil and petroleum inputs, which are critical for pricing products [77]. - The company faces significant environmental liabilities due to stringent regulations, which could lead to substantial costs exceeding current expectations [174]. - The company may incur substantial decommissioning costs for abandoning and reclaiming oil sands facilities, which could divert resources from other projects [164]. Technology and Innovation - The proprietary ECOSolv technology has demonstrated oil separation rates of up to 95% in bench testing, utilizing a closed-loop distillation and evaporation circuit [21]. - The ECOSolv process has demonstrated a hydrocarbon recovery factor of up to 95% from waste asphalt shingles, with less than 1% solvent remaining in the final product [61]. - The PR Spring Facility has seen an investment of approximately $6.3 million for retrofitting to utilize the ECOSolv process for recycling waste asphalt shingles into crude oil [59]. - The viability of the company's ECOSolv technology for recycling waste asphalt shingles is uncertain, and failure to perform as expected could jeopardize the business plan [147]. Market and Industry Trends - The U.S. crude oil production reached an estimated 13.6 million barrels per day in 2025, representing the highest annual output in U.S. history, with projections to remain near record levels in 2026 [31]. - The U.S. refining capacity supports high levels of refined product output, with strong refinery utilization rates, particularly during peak driving seasons [53]. - The U.S. residential and commercial roofing materials market is projected to grow at a compound annual growth rate of 4.5%, reaching an estimated size of $16 billion by 2024 [36]. - The asphalt paving market is driven by infrastructure development, with significant federal investments of $110 billion allocated for roads and bridges under the bipartisan infrastructure package [48]. - The use of reclaimed asphalt pavement (RAP) has increased by 75.2% since 2009, reducing the need for approximately 26.9 million barrels of asphalt binder [37]. Customer and Supplier Relationships - The company has a limited operating history and depends on several significant customers and suppliers, which poses risks to its financial condition and results of operations [13]. - For the year ended December 31, 2025, three customers accounted for approximately 33%, 31%, and 24% of total net sales, indicating a concentration risk [82]. - Three significant customers accounted for approximately 31%, 33%, and 24% of total net sales for the year ended December 31, 2025, indicating a reliance on a limited customer base [119]. - The company relies on a limited number of suppliers for crude oil, with one vendor accounting for 17% of its supply for the year ended December 31, 2025 [122]. - The company has identified tipping fees for waste asphalt shingles ranging from $45 to $150 per ton, with processing costs around $25 per ton [86]. Regulatory and Compliance Issues - The company is subject to various U.S. government regulations, including those from the EPA and OSHA, impacting operational compliance [102]. - The company is subject to stringent environmental regulations, which may impose substantial costs and liabilities on its operations [130]. - The company has entered into financing arrangements with covenants that could limit its ability to engage in certain transactions, potentially affecting its operational flexibility [125]. - The company received a notice of noncompliance with Nasdaq's minimum bid price requirement, risking delisting if compliance is not regained by March 23, 2026 [181]. Stock and Investment Considerations - A reverse stock split of one-for-eight (1-for-8) was effective on March 15, 2026, to comply with Nasdaq listing requirements [25]. - The market price of the company's common stock is expected to be highly volatile, potentially leading to significant investment losses for shareholders [188]. - The company does not anticipate paying any cash dividends in the foreseeable future, requiring investors to rely on stock price appreciation for returns [194]. - Future issuances of common stock or convertible securities may dilute existing shareholders' holdings and negatively impact stock price [196]. - The trading market for the company's common stock may be less active and liquid, making it difficult for shareholders to sell their shares at favorable prices [191]. - The company is classified as an emerging growth company, allowing it to take advantage of certain reporting exemptions that may result in less information available to investors [201]. Economic and Market Risks - The overall economic decline and factors such as recessionary conditions may adversely affect consumer demand for the company's products, potentially harming its financial condition and results of operations [133]. - The Consumer Price Index increased by 2.4% from January 2025 to January 2026, indicating rising inflation that could negatively impact the company's operating expenses, particularly in labor and fuel costs [136]. - The company is exposed to rising inflation rates and trade disputes that could further increase operational costs and affect cash flow [135]. - Oil prices are historically volatile, significantly impacting cash flows and capital expenditures [160]. - The U.S. Energy Information Administration projects a 5% decline in domestic motor gasoline consumption by 2026 compared to 2019 levels, driven by efficiency improvements and EV market penetration [171]. Operational Challenges - The company is currently addressing material weaknesses in its internal control over financial reporting, which, if not remediated, could lead to significant financial misstatements and loss of investor confidence [139]. - The company faces risks related to its asphalt shingle recycling operations, including price fluctuations and regulatory challenges that could impact profitability [145]. - The company does not have proven oil reserves in its bitumen deposit, which poses a risk to its planned oil sands operations and could adversely affect operating results [159]. - The company lacks supply agreements for waste asphalt shingles, which are critical for its recycling operations, potentially impacting business continuity [158]. - The company’s operations are subject to various risks, including equipment failure and cybersecurity threats, which could adversely affect business performance [168].

Financial Performance - BrainStorm reported a net loss of approximately $10.3 million for the year ended December 31, 2025, a decrease from a net loss of approximately $11.6 million in 2024, representing a 11.3% improvement [8]. - General and administrative expenses decreased to approximately $5.8 million in 2025 from $7.0 million in 2024, reflecting a 17.1% decrease [8]. - The total liabilities as of December 31, 2025, were approximately $11.0 million, an increase from $9.6 million in 2024, indicating a 14.6% rise in liabilities [14]. Research and Development - Research and development expenditures for 2025 were $4.2 million, down from $4.7 million in 2024, indicating a 10.6% reduction in R&D spending [8]. - The Phase 3b ENDURANCE study of NurOwn is expected to enroll approximately 200 participants and is designed as a two-part trial to assess long-term safety and efficacy [3]. - The primary efficacy endpoint for the Phase 3b trial will be the change from baseline to Week 24 on the ALSFRS-R scale [3]. Cash and Financing - As of December 31, 2025, cash, cash equivalents, and restricted cash totaled approximately $0.3 million, with an additional $2 million secured in early 2026 through strategic financing [8][5]. - BrainStorm's stock has experienced a significant re-rating following the $2 million financing, which is expected to support operational activities and the Phase 3b trial [2]. Clinical Outcomes - In the Expanded Access Program, 50% of patients (5 out of 10) remained alive, with an estimated mean survival of approximately 84 months, significantly exceeding the historical 5-year survival rate of ~20% [4]. Regulatory Actions - The company has filed a Citizen Petition with the FDA, requesting a renewed regulatory review of the data supporting NurOwn, highlighting ongoing interest in the therapy's potential [3].

Financial Performance - The net loss from continuing operations for the year ended December 31, 2025, was $3,595,000, a decrease of $724,000, or 17%, compared to the previous year [286]. - Total net loss for the year ended December 31, 2025, was $4,156,000, a decrease of $1,191,000, or 22%, compared to $5,347,000 for the year ended December 31, 2024 [289]. - The accumulated deficit as of December 31, 2025, was $38,557,000, indicating ongoing financial challenges and reliance on external financing [307]. - The company expects to incur losses for the foreseeable future and has substantial doubt about its ability to continue as a going concern [309]. Expenses - Research and development expenses for the year ended December 31, 2025, were $179,000, compared to $0 for the year ended December 31, 2024, reflecting increased activities following the acquisition of MitoCareX [280]. - General and administrative expenses increased by $1,826,000, or 56%, to $5,109,000 for the year ended December 31, 2025, primarily due to higher share-based compensation and professional services [281]. - Financing expenses, net for the year ended December 31, 2025, were $1,545,000, an increase of $1,293,000, or 513%, compared to the previous year [284]. Cash Flow - As of December 31, 2025, the company had cash and cash equivalents of $3,832,000, an increase from $1,923,000 as of December 31, 2024 [295]. - The company reported a net cash used in operating activities of $3,808,000 for 2025, compared to $3,419,000 for 2024, reflecting an increase in cash outflows [296]. - Net cash used in investing activities rose to $3,233,000 in 2025 from $1,889,000 in 2024, primarily due to investments in renewable energy projects and the acquisition of MitoCareX [298]. - The company generated net cash provided by financing activities of $8,856,000 in 2025, up from $3,047,000 in 2024, largely due to proceeds from standby equity purchase agreements [299]. Shareholder Information - The weighted average number of shares of common stock outstanding (basic) increased to 1,132,707 for the year ended December 31, 2025, compared to 187,215 for the previous year [279]. Strategic Agreements and Operations - The company entered into a Services Agreement with Voice Assist, which includes deferred cash consideration of up to $1,000,000 and ongoing royalty consideration based on gross profits from new projects [268]. - The company completed the sale of its NTWO OFF Ltd. operations in April 2025, impacting the financial results for the year [263]. - The company classified its Save Foods operations as held for sale and discontinued operations during 2025, affecting the overall financial performance [263]. Future Financing - Existing capital resources are projected to support operations through the first quarter of 2027, but additional capital may be needed for growth initiatives [308]. - The company entered into a purchase agreement with an investor for up to $20 million in common stock over 36 months, with shares priced at 94% of the lowest VWAP [301]. - A facility agreement was established with L.I.A. Pure Capital for a credit facility of up to EUR 6,000,000, including a five-year warrant for shares [304]. - The company raised approximately $1,500,000 in a private placement, issuing 6,250,000 units at a price of $0.24 per unit [305].

Financial Performance - The net loss from continuing operations for the year ended December 31, 2025, was $3,595,000, a decrease of $724,000, or 17%, compared to $4,319,000 for the year ended December 31, 2024 [286]. - Total net loss for the year ended December 31, 2025, was $4,156,000, a decrease of $1,191,000, or 22%, compared to $5,347,000 for the year ended December 31, 2024 [289]. - The company has an accumulated deficit of $38,557,000 as of December 31, 2025, indicating ongoing financial challenges [307]. - The company expects to incur losses for the foreseeable future and is dependent on external financing to support operations [308]. - The company has substantial doubt about its ability to continue as a going concern if sufficient additional capital is not obtained [309]. Expenses - Research and development expenses for the year ended December 31, 2025, were $179,000, compared to $0 for the year ended December 31, 2024, reflecting increased activities following the acquisition of MitoCareX [280]. - General and administrative expenses for the year ended December 31, 2025, were $5,109,000, an increase of $1,826,000, or 56%, compared to $3,283,000 for the year ended December 31, 2024, primarily due to higher share-based compensation and professional services [281]. - Financing expenses, net for the year ended December 31, 2025, were $1,545,000, an increase of $1,293,000, or 513%, compared to $252,000 for the year ended December 31, 2024 [284]. Cash Flow - As of December 31, 2025, the company had cash and cash equivalents of $3,832,000, an increase from $1,923,000 as of December 31, 2024 [295]. - The company reported a working capital of $4,580,000 as of December 31, 2025, compared to $2,560,000 in the previous year [295]. - Net cash used in operating activities was $3,808,000 for the year ended December 31, 2025, compared to $3,419,000 for 2024, reflecting an increase in cash outflows [297]. - Net cash used in investing activities increased to $3,233,000 in 2025 from $1,889,000 in 2024, primarily due to investments in renewable energy projects and the acquisition of MitoCareX [298]. - Net cash provided by financing activities rose to $8,856,000 in 2025 from $3,047,000 in 2024, driven by proceeds from standby equity purchase agreements and other financing arrangements [299]. Corporate Actions - The company completed the sale of its NTWO OFF Ltd. operations in April 2025, impacting the financial results for the year [263]. - The company classified its Save Foods operations as held for sale and discontinued operations during 2025, impacting the financial reporting [263]. - The company entered into a Services Agreement with Voice Assist, which includes deferred cash consideration of up to $1,000,000 and ongoing royalty considerations [268]. - The company entered into a purchase agreement for up to $20 million of common stock over 36 months, with shares priced at 94% of the lowest volume-weighted average price [301]. Shareholder Information - The weighted average number of shares of common stock outstanding (basic) increased to 1,132,707 for the year ended December 31, 2025, compared to 187,215 for the year ended December 31, 2024 [279]. - The change in fair value of contingent consideration for the year ended December 31, 2025, was a gain of $1,136,000, related to the acquisition of MitoCareX [282].

Technology and Innovation - As of March 2026, the company's SpotlightAI system has processed over 2.4 million drone images and detected more than 45,000 real-world explosive threats in Ukraine [20]. - Safe Pro AI's technology is being applied to identify, classify, and clear landmines, significantly improving the speed and safety of remediation efforts compared to traditional methods [29]. - Safe Pro AI's SPOTD technology enables rapid detection and identification of threats in drone imagery, enhancing situational awareness for military and first responders [29]. - The Company has developed the "Safe Pro Object Threat Detection" (SPOTD) technology, which provides real-time threat alerts to soldiers, enhancing situational awareness in hazardous environments [39]. - Safe Pro AI's software can create detailed, high-resolution orthomosaic maps and real-time visual threat indications, supporting various applications beyond demining [31]. - The company has entered multiple Memoranda of Understanding (MOUs) with Ukrainian entities for research and development of new technologies, including applications in demining and environmental safety [37]. - In 2025, the Company signed Memoranda of Understanding (MOUs) with Ondas Holdings Inc., Unusual Machines Inc., and Red Cat Holdings, aiming to integrate AI-powered drone imagery analysis into their offerings [40]. - Safe Pro Group's growth strategy focuses on integrating advanced technologies in AI, personal protective gear, and drone-based services to enhance operational effectiveness for government and military sectors [32]. - Safe Pro Group is focused on innovative security solutions, particularly in AI/ML software technology and personal protective equipment [193]. Financial Performance - Total revenues for the year ended December 31, 2025, were $606,681, a decrease of $1,562,497 or 72.0% compared to $2,169,178 in 2024 [208]. - Product sales decreased by $668,236 or 64.9% to $361,266 in 2025, while service revenues decreased by $894,261 or 78.5% to $245,415 [208]. - Gross profit for 2025 was $202,178, down from $906,146 in 2024, reflecting a decrease of $703,968 or 77.7% [208]. - Total operating expenses increased by $6,689,560 or 83.0% to $14,747,707 in 2025, compared to $8,058,147 in 2024 [214]. - Research and development expenses surged by $303,835 or 336.2% to $394,207 in 2025, compared to $90,372 in 2024 [208]. - Cash increased significantly by $14,822,369 or 752.1% to $16,793,088 as of December 31, 2025, compared to $1,970,719 in 2024 [209]. - Total assets rose by $14,164,861 or 286.2% to $19,114,804 in 2025, compared to $4,949,943 in 2024 [209]. - The accumulated deficit increased by $14,322,779 or 100.5% to $(28,573,530) in 2025, compared to $(14,250,751) in 2024 [209]. - Stock-based compensation for wages increased to $2,826,396 in 2025 from $2,015,178 in 2024, representing a 40.3% increase [216]. - The increase in stock-based compensation was attributed to contingencies in officers' employment contracts and options granted for the year ended December 31, 2025 [216]. Market and Customer Dependency - The company targets multiple markets, including government, military, law enforcement, and humanitarian aid sectors, leveraging its AI and drone-based services [32]. - A significant portion of revenue is expected to come from U.S. Government contracts, making the company vulnerable to changes in government funding and appropriations [106]. - The company’s UAS services revenue from Florida Power & Light represented approximately 22.9% and 49.0% of overall revenue for the years ended December 31, 2025 and 2024, respectively, indicating dependency on a key customer [110]. - Approximately 17.0% and 19.3% of the company's revenues were derived from international sales in 2025 and 2024, respectively [113]. - The company plans to expand its international operations through agreements with third-party resellers and distributors [113]. - The company faces various risks in international markets, including regulatory, economic, and political risks [113]. Risks and Challenges - The company maintains a supplier concentration risk, with 68.0% of inventory sourced from four suppliers in 2025, which could adversely affect operations if these suppliers are lost [54]. - The company is exposed to risks related to competition from larger firms with greater resources, which may impact its market position [89]. - The company faces risks from rapid technological changes and evolving customer demands, which could render existing products obsolete and adversely affect business and financial condition [92]. - Successful technical development does not guarantee commercialization, as various factors such as competition and funding challenges may impede success [96]. - The company relies on a limited number of suppliers for raw materials, and any shortages could delay manufacturing and delivery, impacting business operations [103]. - Geopolitical events, such as the Russia-Ukraine conflict, have disrupted global supply chains and increased security concerns [116]. - Heightened inflation and macroeconomic conditions could adversely affect profits, margins, and cash flows, particularly for fixed-price contracts [117]. - The company faces significant risks and uncertainties related to product liability claims, which could result in substantial financial liabilities and harm its business [138]. - The company has not experienced material product liability claims to date, but the risk remains high due to the critical applications of its products [138]. Corporate Structure and Governance - The company has established SPAI Ventures LLC to pursue strategic collaborations and investments with international tech developers, although no investments have been made yet [24]. - The company has a limited operating history as a consolidated entity since its formation in 2022, which may impact its ability to execute its business plan [84]. - The company is classified as an "emerging growth company" under the JOBS Act, allowing it to rely on certain exemptions from disclosure requirements [166]. - The Audit Committee oversees cybersecurity risk, with the CEO responsible for managing cybersecurity practices [179]. - Control deficiencies in internal financial reporting may lead to errors in financial statements, requiring remediation by the second quarter of 2026 [142]. - The company has never declared or paid cash dividends and does not anticipate doing so in the foreseeable future, intending to retain earnings for growth [147]. - The company may need to raise additional capital in the future, which could lead to dilution of existing stockholders' interests [150]. - The company’s bylaws and Delaware law may discourage changes in management or control, potentially affecting stockholder interests [152]. Employment and Operations - The company employs fifteen full-time employees and twenty-nine independent contractors, with no work stoppages reported [80]. - The company operates without owning any real property, renting office space in Aventura, Florida, and a manufacturing facility in Hialeah, Florida [82]. - The company needs to attract and retain qualified personnel to succeed, facing competition for skilled labor that may increase costs [139]. - The company may incur additional costs if independent contractors are reclassified as employees, impacting its financial condition and operations [140]. - The company has limited insurance coverage for various risks, which may not be sufficient to cover potential losses [133]. - The company intends to reevaluate insurance purchases and terms annually, with potential future increases in costs and deductibles, which may restrict operations in certain jurisdictions [134].

Financial Performance - The company has incurred operating losses of approximately $7.5 million and $10.3 million for the years ended December 31, 2024, and 2025, respectively, with an accumulated deficit of $210.8 million as of December 31, 2025[39]. - The company has recurring losses and negative cash flows, raising substantial doubt about its ability to continue as a going concern, which may hinder obtaining new financing[52]. - As of December 31, 2025, the company had a net working capital of $15.8 million and cash and cash equivalents of $4.0 million, indicating a need for substantial additional capital to fund operations and development of Aramchol[49]. - The public float was approximately $3.8 million as of March 25, 2026, limiting the amount of funds that can be raised through primary public offerings under the Baby Shelf Rule until the public float exceeds $75 million[50]. - The company may need substantial additional capital in the future, and if it is unable to secure this capital, it may have to delay or cease operations[30]. Product Development and Regulatory Challenges - The company has not yet commercialized any products and may never be able to do so, with significant uncertainty regarding the regulatory approval process for its lead product candidate, Aramchol[47]. - The company expects to continue incurring significant research and development expenses, particularly if it re-initiates its ARMOR Study or initiates other clinical trials[44]. - The company is substantially dependent on the success of its lead product candidate, Aramchol, and has not yet received regulatory approval for commercialization[64]. - The approval process for Aramchol or any product candidate is lengthy, expensive, and uncertain, with potential delays or denials from regulatory agencies[90]. - Regulatory approval processes are expensive and can take many years, with substantial discretion given to regulatory agencies, which may delay or deny approvals[89]. Clinical Trials and Market Acceptance - The ARMOR Study has faced significant delays due to slower than expected recruitment and regulatory authorization issues, impacting the timeline for clinical trials[75]. - The market acceptance of Aramchol or any other product candidate is uncertain and will depend on various factors, including regulatory approvals and competitive environment[48]. - Seven clinical trials of Aramchol have been completed, with no safety concerns reported to date, but future trials may reveal adverse effects that could halt development[93]. - The design of clinical trials can significantly impact their outcomes, and flaws may not be apparent until trials are well advanced, leading to potential abandonment of product candidates[80]. - Challenges in recruiting patients for clinical trials include eligibility criteria, competition from other trials, and the nature of the patient population[76]. Competition and Market Risks - Intense competition exists in the market, with larger pharmaceutical companies having significantly greater resources and experience, potentially rendering the company's product candidates non-competitive[156]. - Key competitors in the NASH field include Novo Nordisk, Madrigal Pharmaceuticals, and Viking Therapeutics, which have advanced clinical programs and marketed products[158]. - If Aramchol receives marketing approval, its commercial success will depend on broad market acceptance and the medical community's perception[106]. - The commercial success of any approved product will depend on factors such as clinical safety, efficacy, and ease of administration compared to existing therapies[108]. Financial and Operational Risks - The company has no committed external sources of funds, and additional financing may not be available on favorable terms, potentially leading to delays or termination of clinical trials[51]. - The company may incur substantial liabilities from product liability claims if adverse events occur with its product candidates, impacting financial conditions[161]. - The company must comply with extensive regulatory requirements even after obtaining approval, which could affect financial performance[101]. - Delays in regulatory approval could materially adversely affect the company's ability to out-license product candidates[102]. Intellectual Property and Compliance - The company has issued patents and pending applications for Aramchol salts, but the scope and enforceability of these patents remain uncertain[187]. - The company’s commercial success is heavily dependent on avoiding infringement of third-party patents, which could lead to increased costs or delays in product development[201]. - Legal disputes regarding intellectual property rights could be costly and time-consuming, potentially diverting management's attention and resources[204]. - Non-compliance with patent agency requirements could lead to the abandonment of patents, allowing competitors to enter the market earlier[218]. Regulatory and Legislative Environment - The company is subject to extensive environmental, health, and safety regulations, which could result in substantial capital costs and liabilities[114]. - The Affordable Care Act increased the minimum rebate for innovator drugs from 15.1% to 23.1% of average manufacturer price, impacting pricing strategies[120]. - The Inflation Reduction Act allows CMS to negotiate directly with drug manufacturers to lower prices for costly drugs under Medicare, potentially affecting revenue[122]. - Compliance with healthcare and data privacy laws is critical, as violations could lead to enforcement actions and penalties[132]. Economic and Market Conditions - The company’s business may be adversely affected by unfavorable economic conditions, including geopolitical events like the war between Russia and Ukraine[220]. - Inflation increases have raised costs for commodities, labor, materials, and services, potentially impacting financial condition[221]. - Economic uncertainty due to inflation, geopolitical developments, and supply chain disruptions may complicate securing additional financing[221]. - The market price of the company's ordinary shares has been volatile since the initial public offering, with trading volume also being relatively illiquid[223].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from Commission file number 001-41034 SYNTEC OPTICS HOLDINGS, INC. (Exact name of registrant as specified in its charter) Delaware 87-0816957 (State or other jurisdicti ...

Financial Performance - Net sales decreased by $0.4 million, or 1.3%, to $28.1 million for the year ended December 31, 2025, compared to $28.5 million for 2024, with increases in Consumer, Defense, and Medical industries offset by a decrease in the Communications industry [232]. - Cost of goods sold decreased by $1.2 million, or 5%, to $21.5 million for the year ended December 31, 2025, primarily due to reductions in subcontractor use, repairs and maintenance, and materials [233]. - Gross profit increased by $0.8 million, or 15%, to $6.5 million for the year ended December 31, 2025, attributed to a decrease in cost of goods sold despite a decrease in sales [234]. - General and administrative expenses decreased by approximately $1.3 million, or 15%, to $7.0 million for the year ended December 31, 2025, due to reductions in wages, commissions, R&D, and business insurance [235]. - Net loss decreased by $0.7 million to $1.8 million for the year ended December 31, 2025, compared to $2.5 million for 2024 [238]. - Adjusted EBITDA increased to $3,016,865 for the year ended December 31, 2025, compared to $2,198,941 for 2024 [246]. Cash Flow and Debt Management - Net cash provided by operating activities was $672,635 for the year ended December 31, 2025, compared to a net cash used of $942,830 for 2024 [258]. - Net cash used in investing activities was $644,292 for the year ended December 31, 2025, compared to $930,866 for 2024 [261]. - As of December 31, 2025, the company had $6,763,863 outstanding under its $7.5 million revolving credit facility, with approximately $736,000 of remaining availability [248]. - The company expects cash generated from operations and availability under its revolving credit facility to be sufficient to fund operations for at least the next twelve months [255]. - The company repaid approximately $1.37 million of term and equipment debt during the reporting period [252]. Inventory and Taxation - The reserve for excess and obsolete inventory was approximately $0.6 million as of December 31, 2025, compared to $0.5 million as of December 31, 2024 [268]. - Income tax benefit decreased by $1.0 million to a provision of $0.4 million for the year ended December 31, 2025, compared to a benefit of $0.5 million for 2024 [237]. - The Company recognizes uncertain income tax positions when it is more likely than not that the position will be sustained upon examination [271]. Business Strategy and Market Position - The company plans to further consolidate and add bolt-on acquisitions for inorganic growth in the fragmented photonics industry, expanding its portfolio of advanced manufacturing processes [216]. - Syntec Optics launched new products including low weight night vision optics, hybrid light-weight magnifiers, and biomedical mirrors in the defense and medical markets [212]. - The company is engaged in a research and development project funded by the U.S. Department of Commerce's NIST for the sensing end market, which is characterized by optics and photonics applications [216]. - Three customers accounted for 48% of revenues for the year ended December 31, 2025, indicating a significant reliance on a few key clients [219]. - Syntec Optics focuses on four end markets: defense, medical, consumer, and communications, all with strong mission-critical applications [211]. - The company operates a nearly 90,000 square foot manufacturing facility in Rochester, New York, which supports its production capacity and advanced manufacturing processes [220]. Accounting Standards and Compliance - The Company adopted ASU 2023-09 on January 1, 2025, which requires disaggregated information about effective tax rate reconciliation, effective for the annual period ended December 31, 2025 [273]. - The Company is currently evaluating the impact of ASU 2025-05 on its consolidated financial statements, which is effective for annual reporting periods beginning after December 15, 2025 [275]. - ASU 2024-03, effective for fiscal years beginning after December 15, 2026, requires additional disclosures about specific types of expenses in the income statement [274]. - The adoption of ASU 2023-09 did not have a material impact on the Company's financial statements but resulted in additional disclosures in the income tax footnote [273]. - The Company is evaluating the impact of ASU 2025-11, which clarifies interim reporting requirements and is effective for public business entities for interim periods within fiscal years beginning after December 15, 2027 [277]. - Syntec Optics has elected to delay the adoption of certain accounting standards under the JOBS Act, which may affect comparability with other public companies [279]. - The Company is assessing the provisions of ASU 2025-12, which addresses minor improvements to the Codification and is effective for interim reporting periods beginning after December 15, 2026 [278].