Financial Performance - Revenues for the year ended December 31, 2025, were $30,541,443, an increase of $7,453,558 or 32.3% compared to $23,087,885 in 2024[245]. - Cost of revenues increased to $27,391,163 in 2025, up by $9,337,839 or 51.7% from $18,053,324 in 2024[245]. - Gross profit decreased to $3,150,280 in 2025, a decline of $1,884,281 or 37.4% compared to $5,034,561 in 2024[245]. - Net income for 2025 was a loss of $5,272,551, a decrease of $5,391,556 from a net income of $119,005 in 2024[245]. - Income from operations was a loss of $5,654,567 in 2025, worsening by $5,621,063 compared to a loss of $33,504 in 2024[245]. - Net loss for the year ended December 31, 2025, was $(5,272,551), compared to a net income of $119,005 in 2024, indicating a significant downturn[290]. - The Company reported total sales of $30,541,443 for the year ended December 31, 2025, with a gross profit of $3,150,280, indicating a gross margin of approximately 10.3%[375]. Operating Expenses - Total operating expenses rose to $8,804,847 in 2025, an increase of $3,736,782 or 73.6% from $5,068,065 in 2024[245]. - Selling and marketing expenses surged to $1,011,092 in 2025, an increase of $959,457 or 1855.5% from $51,635 in 2024[245]. - General and administrative expenses increased to $7,373,892 in 2025, up by $2,537,111 or 52.5% from $4,836,781 in 2024[245]. - The Company’s operating expenses totaled $8,804,847 for the year ended December 31, 2025, with general and administrative expenses accounting for $7,373,892[375]. Cash Flow and Financing - Net cash used in operating activities was $(11,789,888) in 2025, a 439% decrease from cash provided in 2024, primarily due to increased operational expenses related to IPO preparations[260]. - Net cash provided by financing activities was $35,568,844 in 2025, compared to net cash used of $(1,204,877) in 2024, attributed to a PIPE transaction completed in October 2025[262]. - The company reported a net increase in cash of $22,512,201, bringing total cash and restricted cash to $25,208,384 at the end of 2025, compared to $2,696,183 at the end of 2024[295]. - Cash balance increased to $22,208,384 in 2025 from $2,696,183 in 2024, a growth of 724%[287]. - Total cash balance in excess of FDIC limits was $21,862,085 as of December 31, 2025, compared to $2,196,183 in 2024[304]. Assets and Equity - Total assets increased to $40,033,702 as of December 31, 2025, compared to $8,965,038 in 2024, representing a growth of 346%[287]. - Total current assets rose to $37,300,878 in 2025 from $7,123,579 in 2024, marking an increase of 424%[287]. - Shareholder's equity increased to $37,834,838 in 2025 from $6,329,759 in 2024, a growth of 497%[287]. - The company has a total deferred tax asset of $1,413,983, with a valuation allowance of $1,361,081, resulting in a net deferred tax asset of $0[391]. Revenue Segmentation - The Commercial Construction segment accounted for 78% of total revenue in 2025, down from 89% in 2024, while the Residential Construction segment increased to 22% from 11%[326][327]. - The commercial construction segment accounted for approximately 50% of total revenue for the year ending December 31, 2025, down from 78% in 2024, suggesting a shift in revenue sources[352]. - The residential construction segment represented 22% of total revenues in 2025, reflecting the growing demand for housing in Florida due to population growth[359]. Project and Development - The Company has 24 ongoing projects, with four of them being real estate development projects, focusing on larger multi-family residential developments to drive revenue growth[362]. - The Company aims to invest in real estate development projects directly or through joint ventures, which could secure substantial returns and generate revenue from property sales, leasing income, and management fees[363]. - Management anticipates continued expansion in the franchise construction division, particularly in the Southeast, which is projected to grow by 3.5%[358]. - The Company recognizes the inherent risks in real estate development, including market fluctuations and project delays, but aims to mitigate these through an integrated investment and construction strategy[366]. Tax and Compliance - The effective tax rate for the year ended December 31, 2025, was reported at (21.1)%[390]. - The company has not accrued any penalties or interest related to uncertain tax positions as of December 31, 2025[389]. Related Party Transactions - The company has recorded $4,468,064 in related party sales and $4,245,041 in related party cost of goods sold associated with a project with Rare Capital Partners LLC[403]. - One franchise accounted for 26% of sales during the year ended December 31, 2025, while two customers represented 18% and 47% of accounts receivable[397].

Loan Portfolio - As of December 31, 2025, Catalyst Bancorp's loan portfolio totaled $170.2 million, representing 60.2% of total assets[23] - Single-family residential mortgage loans accounted for $80.1 million, or 47.1% of the total loan portfolio, with an average outstanding balance of $75,000 per loan[29] - Commercial real estate and multi-family residential loans totaled $38.2 million, or 22.4% of the total loan portfolio[33] - The commercial real estate loan portfolio was $32.9 million, or 19.3% of the total loan portfolio, with the largest loans being $6.1 million, $2.9 million, and $2.7 million[34] - The Bank's multi-family residential mortgage loans amounted to $5.3 million, or 3.1% of the total loan portfolio, with an average outstanding balance of $885,000 per loan[35] - At December 31, 2025, commercial and industrial loans totaled $31.2 million, accounting for 18.3% of the total loan portfolio[45] - Consumer loans totaled $1.9 million, or 1.2% of the total loan portfolio, with $1.2 million secured by deposits at the Bank[49] Non-Performing Loans - At December 31, 2025, non-performing loans totaled $2.6 million, with 94.6% being one- to four-family residential mortgages[29] - Loans classified as "substandard" totaled $5.0 million at December 31, 2025, up from $2.8 million in 2024[58] - Loans with modifications for borrowers experiencing financial difficulty totaled $719,000 at December 31, 2025, compared to $583,000 in 2024[63] - The company recorded zero charge-offs of commercial real estate or multi-family residential loans during the year ended December 31, 2025[39] - Non-accrual loans as a percent of total loans outstanding increased to 1.32% in 2025 from 0.94% in 2024[191] - Total non-performing loans increased to $2,643 thousand at the end of 2025, compared to $1,631 thousand in 2024, reflecting a rise of 62.0%[207] Credit Losses - The provision for credit losses totaled $60,000 in 2025, down from $531,000 in 2024, with the allowance for credit losses on loans as a percentage of total loans at 1.39% in 2025 compared to 1.51% in 2024[64] - The allowance for credit losses on loans totaled $2.4 million, or 1.39% of total loans, at December 31, 2025, down from $2.5 million, or 1.51% of total loans, at December 31, 2024[185] - The total provision for credit losses on loans and unfunded commitments was $60,000 for 2025, down from $531,000 in 2024[205] - The allowance for credit losses on unfunded commitments increased to $211,000, up $90,000 from December 31, 2024[202] Investment Securities - The investment securities portfolio amounted to $65.4 million, representing 23.1% of total assets as of December 31, 2025, with $48.9 million in pass-through mortgage-backed securities[68] - The company sold 50 available-for-sale investment securities in 2024, incurring a pre-tax loss of $5.5 million, with proceeds of $42.6 million reinvested into cash and higher-yielding assets[68] - Total investment securities reached $65.4 million at December 31, 2025, up $23.2 million, or 55.1%, from $42.2 million in 2024[209] - Net unrealized losses on securities available-for-sale decreased to $3.1 million at December 31, 2025, from $4.5 million at December 31, 2024[211] Deposits and Funding - Total deposits averaged $179.5 million in 2025, an increase from $172.1 million in 2024, influenced by economic conditions and competition[74] - Outstanding advances from the FHLB increased to $14.7 million in 2025 from $9.6 million in 2024, indicating a reliance on alternative funding sources[76] - Public fund deposits decreased to $26.4 million in 2025 from $35.6 million in 2024, reflecting changes in local government deposit activities[75] - Deposits totaled $185.3 million, a slight decrease of $400,000 or 0.2%[179] Financial Performance - Net interest income rose by $245,000 or 2.6% to $9.8 million, with net interest margin increasing by 27 basis points to 3.92%[179] - Net income for 2025 was $2.1 million, translating to $0.56 per diluted common share[179] - Total non-interest income turned positive at $1.36 million in 2025, compared to a loss of $3.84 million in 2024[190] - The efficiency ratio improved to 76.99% in 2025 from 160.51% in 2024, indicating better cost management[191] - Return on average assets improved to 0.75% in 2025 from a loss of 1.10% in 2024, reflecting enhanced profitability[191] Company Strategy and Operations - Catalyst Bancorp's strategy has shifted to focus on attracting small- to mid-sized businesses and increasing holdings of commercial and multi-family residential real estate loans[19] - The company plans to expand its franchise through potential acquisitions of other financial institutions in south Louisiana[181] - The company has implemented a new core processing system to enhance technology tools and online services for customers[181] - Catalyst Bancorp has not entered into any definitive agreement to acquire other financial institutions but may consider such opportunities in the future[13] Regulatory Compliance - Catalyst Bank's capital exceeded all applicable regulatory requirements as of December 31, 2025, ensuring compliance with federal capital standards[95] - Catalyst Bank is in compliance with the loans-to-one borrower limitations as of December 31, 2025[101] - Catalyst Bank received an "outstanding" Community Reinvestment Act rating in its most recent federal examination[106] - As of December 31, 2025, Catalyst Bank met the criteria for being considered "well capitalized" under federal regulations[121] - The FDIC's risk-based assessment system charges lower assessments to institutions deemed less risky of failure[122] - The FDIC finalized an increase in initial base deposit insurance assessment rates by 2 basis points effective January 1, 2023, to help maintain the Deposit Insurance Fund[123] Taxation and Capital Requirements - The Corporation Income Tax for 2024 in Louisiana applies at graduated rates from 3.5% on the first $50,000 of taxable income to 7.5% on income exceeding $150,000[157] - Catalyst Bancorp is classified as an emerging growth company, allowing it to take advantage of exemptions from various reporting requirements[148] - The Dodd-Frank Act mandates that the FRB implement consolidated capital requirements for bank holding companies that are no less stringent than those for banks[140] - Federal regulations limit capital distributions if the institution does not hold a capital conservation buffer of 2.5% of common equity Tier 1 capital[99]

Financial Performance - Total revenue for the fiscal year ended December 31, 2025, was $1,566,631, compared to $438,292 for 2024, reflecting significant growth driven by the GPU cloud services segment [394]. - Cost of revenue increased to $1,465,824 in 2025 from $719,993 in 2024, primarily due to expenses related to GPU cloud computing operations [397]. - The net loss for the fiscal year 2025 was $39,815,021, compared to a net loss of $3,923,998 in 2024, reflecting ongoing investments and operational challenges [394]. Expenses - Share-based compensation expenses rose to $1,761,785 in 2025 from $253,728 in 2024, as part of efforts to attract and retain key talent [398]. - Selling, general, and administrative expenses (SG&A) increased to $12,116,600 in 2025 from $2,368,745 in 2024, largely due to employee-related costs and professional fees [399]. Capital and Financing Activities - The company completed a US$103 million pre-IPO capital raising in January 2026, introducing new institutional and strategic shareholders [383]. - The company listed on NASDAQ in February 2026, raising US$125 million before costs, enhancing access to capital markets [386]. - Net cash provided by financing activities was $83.044 million for the year ended December 31, 2025, mainly from the issuance of convertible notes [415]. - The Company is actively engaged in capital raising discussions with existing and prospective investors to ensure sufficient liquidity for operations [411]. Investments and Cash Flow - Net cash used in operating activities was $2.639 million for the year ended December 31, 2025, compared to $2.206 million in 2024, indicating increased operational expenditures [412]. - Net cash used in investing activities was $13.806 million for the year ended December 31, 2025, primarily for capital expenditures related to servers and infrastructure [414]. - The Company expects to continue investing in scaling its infrastructure and operations, indicating a need for additional capital to support ongoing activities [410]. Strategic Changes - The company transitioned to a pure-play neocloud operator, divesting its 50% interest in a joint venture for US$70 million in January 2026 [384]. - The change in fair value of convertible notes resulted in a loss of $26,030,635 in 2025, reflecting the accounting treatment of newly issued notes [405]. - The Company has entered into colocation agreements for data center facilities under non-cancellable operating leases, which could impact future cash flows [422]. - The Company has obligations under managed service agreements totaling approximately $34,000 per month, affecting operating expenses and liquidity [424]. Research and Development - The Company is focused on research and development to enhance data storage software and system architecture, with ongoing projects in Australia under the R&D Tax incentive scheme [418][419]. - Goodwill of $18.0 million arose from the acquisition of Distributed Storage Solutions Pty Ltd in June 2024, with annual impairment assessments conducted [433]. Future Outlook - The company anticipates capturing increased revenue from the growing demand for AI and HPC compute resources as its GPU deployments become fully operational [390]. - As of December 31, 2025, the Company held cash of $71.07 million and closed approximately $104 million of pre-IPO funding through convertible notes, enhancing its liquidity position [409].

Revenue Growth - Revenues for 2025 increased by 26.5% to $50.5 million from $40 million in 2024, driven by heightened geopolitical tensions in Israel and Europe [165] - Revenues of the Supply Chain division increased by 37.6% to $35.5 million in 2025 from $25.8 million in 2024 [165] Profitability - Gross profit for 2025 was $12.1 million with a gross profit margin of 23.9%, compared to $9.3 million and 23.5% in 2024 [166] - Gross profit for the Supply Chain division was $8.7 million with a gross profit margin of 24.6% in 2025, up from $5.4 million and 21% in 2024 [166] - Net profit for 2025 was $3.6 million compared to $2.3 million in 2024, with basic and diluted net income per share of $0.59 and $0.57 respectively [172] Cash Flow and Working Capital - The Company generated a positive cash flow from operating activities amounting to $5 million in 2025, compared to $1.3 million in 2024 [179] - As of December 31, 2025, the Company had cash and cash equivalents of $11.9 million and positive working capital of $22.4 million [179] - Net cash provided by operating activities increased to $5 million in 2025 from $1.3 million in 2024, mainly due to a decrease in trade payables [190] - Net cash used in investment activities in 2025 amounted to $452,000, a decrease from $519,000 in 2024 and $772,000 in 2023, primarily for the purchase of property and equipment [191] - Net cash provided by financing activities in 2025 amounted to $3.8 million, significantly higher than $217,000 in 2024, mainly due to proceeds from the exercise of options and warrants [192] Expenses and Impairments - General and administrative expenses increased to $2.5 million in 2025 from $2.1 million in 2024, partly due to costs related to a sales agreement [169] - The Company recorded an impairment of intangible assets and goodwill of $1.2 million in 2025 due to a cumulative revenue decline of 12% in the RFID division from 2022 to 2025 [170] - Goodwill impairment charges totaled $1.2 million in 2025, following a $700,000 charge in 2024, due to adverse effects from geopolitical tensions [198] - The company recorded an impairment loss of goodwill of $700,000 on June 30, 2025, and an additional $500,000 on December 31, 2025, related to the RFID Division [209] Research and Development - Research and development expenses were $178,000 for the year ended December 31, 2025, compared to $175,000 for 2024, focusing on custom-made automation concepts [193] Market Position and Future Plans - The Intelligent Robotics division has 90% of its backlog serving the defense sector, indicating a strong market position [197] - A significant portion of revenues is derived from the defense sector, which is experiencing strong and sustained expansion, positioning the company for future growth [195] - The company plans to invest in expanding into more stable regulated sectors, including medical and defense, with revenue contributions expected to begin in 2027 [198] - The company operates through three divisions: Supply Chain, RFID, and Intelligent Robotics, with a focus on comprehensive technological solutions [194]

Revenue and Income - Total revenue for the fiscal year ended December 31, 2025, was $2,011,783, a decrease from $3,049,875 in 2024, primarily due to a $785,000 reduction in rental income from related parties [308]. - Rental income for 2025 was $927,376, with direct financing lease income of $915,000 and other income of $169,407 [308]. - Approximately 93% of rental income and lease income for 2025 came from two tenants: Norfolk Southern Railway (50%) and Regulus Solar LLC (43%) [309]. - Other income increased by $845,608 in 2025, driven by a gain on extinguishment of debt of $1,092,670 [312]. - Revenue for the year ended December 31, 2025, was $2,011,783, a decrease from $3,049,875 in 2024 [346]. Expenses and Losses - Total expenses decreased by $22,708,143 in 2025, mainly due to an $18,795,056 reduction in impairment expense and a $1,807,694 decrease in interest expense following the settlement of the Greenhouse Loan [310]. - Net loss attributable to common shareholders for 2025 was $2,847,910, significantly improved from a net loss of $25,363,569 in 2024 [313]. - Net loss for the year ended December 31, 2025, was $(2,195,082), significantly improved from a net loss of $(24,710,741) in 2024 [346]. - Core FFO available to common shares for 2025 was $(1,024,487), compared to $(3,884,098) in 2024, indicating a reduction in losses [346]. - Core FFO per common share improved to $(0.30) in 2025 from $(1.15) in 2024 [346]. Debt and Financing - The balance of the Greenhouse Loan was reduced from approximately $16,720,000 in 2024 to $0 in 2025 after settling obligations through deeds-in-lieu of foreclosure [298]. - Current loan liabilities decreased significantly to approximately $760,000 as of December 31, 2025, down from $17,400,000 as of December 31, 2024, primarily due to a settlement agreement [315][333]. - Total consolidated debt as of December 31, 2025, was $20,421,152, with principal payments remaining for future years outlined in a detailed schedule [340]. - The Trust's long-term debt, net of unamortized discount, was approximately $19,213,071 as of December 31, 2025, down from $19,965,043 in 2024 [333]. - The company recognized approximately $554,000 and $850,000 in late charges and related fees for the fiscal years ended December 31, 2025, and 2024, respectively [339]. Cash Flow and Activities - As of December 31, 2025, cash, cash equivalents, and restricted cash totaled $2,235,306, a decrease of $3,720 from December 31, 2024, with cash used in operating activities decreasing to $68,316 from $1,393,709 in 2024 [314][322]. - Cash provided by investing activities decreased to $542,861 in 2025 from $1,759,142 in 2024, mainly due to lower proceeds from property sales [324]. - Cash used in financing activities was $470,825 in 2025, a decrease of $1,767,906 compared to $2,238,731 in 2024, attributed to lower principal payments on long-term debt [326]. - The Trust generated approximately $239,000 of cash from debt service related to seller financing in 2024, with a remaining balance of seller financing agreements totaling $981,035 as of December 31, 2025 [319][325]. Asset Management and Strategy - The company completed asset sales for total gross proceeds of approximately $325,000 in 2025, including $105,000 of seller financing [304]. - The company is focused on improving its portfolio by selling underperforming assets and seeking to re-lease vacant properties [305]. - Future growth strategies include opportunistic acquisitions of properties with better operating metrics than the current portfolio [307]. - The company plans to realize value from retained assets by leasing and/or selling after resolving the Greenhouse Loan issues [339]. - The Trust is exploring a shift in focus to evaluate distressed real estate situations, including properties, loans, and companies [321]. Accounting and Equity - The Trust's stockholders' equity was reported at $322,626 as of June 30, 2024, below the NYSE American requirement of greater than $2 million, prompting a review of the accounting treatment for Series A Preferred Stock [330]. - The Trust's Series A Preferred Stock was reclassified to equity, correcting previous misclassifications and eliminating the accrual of undeclared dividends [338]. - Power REIT resolved issues with the Greenhouse Loan, resulting in a non-cash gain of approximately $1,093,000 from the write-off of properties valued at approximately $17,083,000 and associated loan obligations totaling approximately $17,997,000 [339]. - The balance of the Greenhouse Loan was approximately $0 as of December 31, 2025, down from approximately $16,720,000 as of December 31, 2024, which included approximately $13.3 million of principal and $2.1 million of interest and default interest [339].

Clinical Trials and Studies - The colorectal study testing LB-100 in combination with atezolizumab was paused for enrollment due to Serious Adverse Events (SAEs) but reopened as of Q4 2025 after addressing IRB questions[45] - LB-100 is in Phase 2 clinical trials aimed at evaluating its potential to enhance anti-cancer therapies, with plans to delay partnering decisions until clinical usefulness is demonstrated[72] - A new preclinical study will be conducted to test whether "initiated" cells with cancer mutations can be eliminated by LB-100[52] - The company is exploring the potential of combining proton therapy with immune checkpoint inhibition to enhance anti-tumor responses[88] Intellectual Property and Patents - A Patent License Agreement was entered into with the National Institute of Health effective February 23, 2024, focusing on anti-cancer activity and extending to checkpoint inhibitors and immunotherapy[46] - LB-100 is covered by U.S. Patent Nos. 8,822,461 and 7,998,957, projected to expire in 2030 and 2028 respectively, with counterpart patents expiring in 2028[60] - LB-100 combination therapy with checkpoint inhibitors is covered by U.S. Patent No. 12,168,008, projected to expire in 2037[61] - LB-100 combination therapy with doxorubicin is covered by U.S. Patent No. 12,343,342, projected to expire in 2034[62] - The company has filed patent applications for LB-100 in the United States and internationally under the Patent Cooperation Treaty, with several patents issued in key markets[56] - The company relies on a combination of patents, licenses, trade secrets, and other forms of intellectual property protection to safeguard its products[54] - The success of the company will depend on its ability to maintain patent protection and defend its intellectual property rights[57] Technology and Equipment - The LiGHT machine, a proton linear accelerator, offers superior treatment efficiency and cost-effectiveness compared to existing cyclotrons, with the potential to reduce side effects of oncology therapy[88] - The LiGHT system can deliver ultra-high dose rates of radiation at 40-60 Gy/sec, significantly improving treatment efficiency and patient experience by potentially reducing treatment visits from 25-35 to a single session[93] - The LiGHT system achieves a proton delivery efficiency of 98-99%, compared to only 1-2% in circular accelerators, enhancing the effectiveness of FLASH therapy[94] - The LiGHT machine has demonstrated the ability to generate a 230 MeV proton beam, recognized as the clinical gold standard for proton therapy[95] - The LiGHT system is the first Linac system in the market, offering applications not possible with current cyclotron technology and increased patient throughput[100] - The marketing plan positions the LiGHT system as a functional prototype asset, valued for its intellectual property and engineering work, without immediate clinical operability[103] - The LiGHT machine offers cost advantages, including reduced radiation shielding and lower replacement rates of electronics[105] - The company is focused on developing smaller, more compact proton therapy systems to meet increasing market demand[106] Regulatory and Market Considerations - The company is subject to FDA regulations for clinical trials, which are essential for determining the safety and efficacy of new therapies[79] - Regulatory approvals are required for marketing products in international markets, and approval by the FDA does not guarantee success in other jurisdictions[84] - The company intends to pursue regulatory clearance based on substantial equivalence to existing proton therapy systems, which does not require new scientific principles[108] Financial and Operational Aspects - The Development Collaboration Agreement with the Netherlands Cancer Institute was modified to extend the term by two years to October 8, 2026, with an additional funding of 500,000 Euros[50] - The annual rent for the company's facilities is approximately $787,278[107] - As of March 31, 2026, the company had three key officers and relies significantly on outside consultants for technical expertise[109] - The company settled a legal claim with FX Group Inc. for a one-time amount of $100,000[110] - The life sciences industry is highly competitive, with major pharmaceutical companies and specialized firms having greater resources, posing challenges for the company's product development[74] - The company does not operate or lease any facilities for LB-100, outsourcing research, development, and production to commercial laboratories[78]

Credit Risk and Loan Performance - As of December 31, 2025, the company's allowance for credit losses on loans was 0.85% of total loans and 126.56% of non-performing loans [192]. - The company's non-performing assets totaled $11.4 million, representing 0.55% of total assets as of December 31, 2025 [194]. - The company may face increased loan delinquencies and foreclosures due to deteriorating economic conditions [207]. - As of December 31, 2025, the company has approximately $86.5 million, or 5.1% of total loans, in New York multifamily loans affected by rent stabilization or rent control [235]. Interest Rate Risk - A 200 basis point increase in market interest rates would decrease the company's net portfolio value by $65.2 million [190]. - A 100 basis point increase in interest rates would result in a 14.1% decrease in the net present value (NPV) of the company's assets, while a 100 basis point decrease would lead to a 13.5% increase in NPV [294]. - The company's net interest income sensitivity analysis indicates a potential increase of $54,941 thousand (3.8%) with a 200 basis point increase in interest rates [293]. - The company has entered into derivative financial instruments with an aggregate notional amount of $526.0 million as of December 31, 2025, to manage interest rate volatility [288]. - The company utilizes a third-party modeling program to evaluate sensitivity to changing interest rates and assess liquidity requirements on a quarterly basis [285]. - The company has implemented strategies to manage interest rate risk, including growing target deposit accounts and diversifying its loan portfolio with more commercial loans [286]. Economic and Operational Risks - The company is vulnerable to local economic downturns due to its loan portfolio being primarily concentrated in New Jersey [203]. - Inflationary pressures may lead to increased costs and reduced purchasing power, adversely affecting the company's financial condition [206]. - The company relies heavily on deposits as its primary source of funds, which can be influenced by external economic factors [205]. - Construction loans involve risks due to uncertainties in estimating costs and the value of projects before completion [199]. - The company faces significant operational risks due to a high volume of transactions, which includes risks of fraud, unauthorized transactions, and compliance failures [212]. - The company relies on third-party vendors for essential services, exposing it to operational and information security risks [221]. - The company is subject to extensive regulation, which may increase operational costs and affect business operations [229]. - Non-compliance with regulations such as the USA PATRIOT Act could result in fines or sanctions, affecting the company's operations [232]. Management and Strategic Risks - The company’s management team is relatively new, and its effectiveness is crucial for implementing the business strategy and operations [223]. - The company’s risk management framework may not effectively mitigate risks, potentially leading to significant losses [228]. - Changes in management's estimates and assumptions can materially impact the company's consolidated financial statements and financial condition [233]. - The company expects increased expenses due to public company reporting requirements following its stock offering [226]. - Certain provisions in the company's bylaws may make takeover attempts more difficult, potentially affecting the market price of its common stock [234]. Financial Performance - The company had approximately $328.2 million in its investment portfolio, with $301.2 million designated as available-for-sale [202]. - The company's non-interest expense totaled $57.0 million for the year ended December 31, 2025, compared to $52.6 million for 2024, indicating a rising cost structure [225]. - The efficiency ratio was 116.11% for the year ended December 31, 2025, down from 133.71% in 2024, reflecting improvements in operational efficiency [225].

Revenue Recognition - Revenue from Data Normalization and Professional Services is recognized as services are rendered and when contractual milestones are achieved[167]. - SaaS and Maintenance revenues are recognized ratably over the contract terms starting from the commencement date of each contract[168]. - Revenue for the year ended December 31, 2025 was $2,877,629, a decrease of $111,970 or approximately 3.75% compared to $2,989,599 in 2024, primarily due to the expiration and non-renewal of certain customer contracts[192]. Customer Information - Significant customers include Customer A (15% revenue, 32% accounts receivable), Customer B (14% revenue, 0% accounts receivable), Customer C (19% revenue, 8% accounts receivable), and Customer D (7% revenue, 11% accounts receivable) for the year ended December 31, 2025[156]. Financial Performance - Cost of revenues decreased by $285,691 to $1,957,923 for the year ended December 31, 2025, resulting in an overall gross profit increase of approximately 23% from the prior year[193]. - Operating expenses decreased by $126,986 to $1,878,425 for the year ended December 31, 2025, primarily due to reductions in legal and professional fees[194]. - Other expense for the year ended December 31, 2025 was $3,485,390, which included non-cash interest expense and amortization of debt discounts of approximately $2,985,000[195]. Cash Flow - The company experienced negative cash flows from operations of $1,543,610 for the year ended December 31, 2025, but had a net increase in cash of $1,537,785, resulting in cash of $1,644,439 at year-end[198]. - For the year ended December 31, 2025, cash used in operating activities was approximately $1,544,000, primarily due to a net loss of approximately $4,444,000[200]. - Net cash used in operating activities for the year ended December 31, 2024, was approximately $1,084,000, mainly related to a net loss of approximately $1,136,000[201]. - Net cash used in investment activities was approximately $31,000 for the year ended December 31, 2025, due to capitalization of internal development costs related to new software assets[202]. - Net cash provided by financing activities was approximately $3,112,000 for the year ended December 31, 2025, consisting of proceeds from loans payable of $1,385,000 and warrant exercises of $1,822,000[204]. - Net cash provided by financing activities was approximately $1,100,000 for the year ended December 31, 2024, primarily from proceeds of loans payable of $995,000[205]. Deferred Revenue and Performance Obligations - As of December 31, 2025, the company had remaining performance obligations recorded as deferred revenue of $158,750, expected to be recognized throughout 2026[170]. - As of December 31, 2025, there were no contract assets recorded, and deferred revenue for contract liabilities decreased from $354,083 in 2024 to $158,750[175]. Impairment and Valuation - Management reviews goodwill for impairment annually, with qualitative assessments determining the necessity of quantitative tests[161]. - The company has established a valuation allowance for deferred tax assets due to the likelihood of not realizing all benefits[178]. Strategic Focus and Future Plans - SCWorx's solutions aim to improve supply chain cost reductions, decrease accounts receivables aging, and accelerate billing processes[144]. - The company focuses on data interoperability issues faced by healthcare providers, utilizing a combination of direct sales and strategic partnerships[145]. - The company plans to utilize available funds to pursue growth through the expansion of its sales force, product offerings, and project capabilities[196]. - The company intends to use current cash reserves to acquire new customers and aims to generate positive operating cash flows by the end of 2026, though there is no assurance of achieving this[199]. - The company anticipates using approximately $600,000 in cash over the next twelve months based on its current business plan[197]. Insurance and Risk - The company maintains cash deposits insured by the Federal Deposit Insurance Corporation up to $250,000 per institution[153]. - As of December 31, 2025, the company did not have any off-balance sheet arrangements[207]. - The company is classified as a smaller reporting company and is not required to provide certain market risk disclosures[208]. Software Solutions - SCWorx's software solutions are typically delivered through a three-to-five-year contracted term, hosted in data centers like AWS or RackSpace[146]. - SCWorx's software platform enables data normalization and interoperability, facilitating big data analytics for healthcare providers[144].

Financial Performance - As of December 31, 2025, First Guaranty Bancshares had consolidated total assets of $4.1 billion, total deposits of $3.6 billion, and total shareholders' equity of $226.2 million[19]. - For the year ended December 31, 2025, net interest income totaled $86.9 million, significantly higher than total noninterest income of $8.5 million[163]. - The investment securities portfolio generated $66.8 million of pre-tax income over the last five years, with no allowance for credit losses on available-for-sale securities as of December 31, 2025[72]. - As of December 31, 2025, the company had a loan to deposit ratio of 57.0% and invested 24.5% of total assets in investment securities[177]. - The carrying value of the company's securities portfolio was $999.3 million as of December 31, 2025[177]. Loan Portfolio and Credit Risk - The company has reduced its loan portfolio size in 2025 to align with risk-based capital levels, particularly decreasing exposure to commercial real estate loans[37]. - Non-performing assets decreased in 2025 compared to December 31, 2024, as the company implemented proactive credit risk management measures[41]. - Loans secured by non-farm non-residential properties totaled $0.9 billion, or 45.7% of the total loan portfolio as of December 31, 2025[43]. - The allowance for credit losses was 1.97% of total loans and 67.50% of total non-performing loans, highlighting potential risks in the loan portfolio[139]. - The company has increased its allowance for credit losses and tightened internal credit standards in 2025[41]. Market Position and Growth Strategy - First Guaranty has supplemented organic growth with four acquisitions, enhancing its geographic footprint and adding stable deposits[22]. - The company aims to expand its market share along key interstate corridors in Louisiana, including I-12, I-55, I-10, I-49, and I-20[35]. - The Hammond MSA accounts for approximately 60% of First Guaranty's deposits, with a market share of 52.3% as of June 30, 2025[25]. - The company has a deposit market share of 52.3% in the Hammond MSA as of June 30, 2025, indicating strong market dominance[40]. Regulatory Compliance and Risks - The bank's lending activities are subject to extensive regulation by the Louisiana Office of Financial Institutions and the FDIC, impacting its operational framework[81]. - First Guaranty Bank exceeded all regulatory capital requirements and was considered well-capitalized as of December 31, 2025[93]. - The bank is subject to CRA and fair lending laws, with potential penalties for non-compliance, including damages and restrictions on mergers and acquisitions[186]. - The company is subject to extensive regulation, and any changes in laws or regulations could materially impact operations and financial results[181]. Staffing and Community Engagement - First Guaranty has reduced staffing by 21%, from 399 full-time equivalent employees at the end of 2024 to 330 at the end of 2025[38]. - Employees volunteered approximately 4,439 hours of service in 2025 and the bank contributed over $214,000 to charitable organizations[77]. - At December 31, 2025, the bank employed 326 full-time and 20 part-time employees, with no collective bargaining agreements in place[79]. Cybersecurity and Technology - First Guaranty Bank emphasizes the importance of cybersecurity in its operations and has implemented risk management strategies aligned with SEC guidance[211]. - The Chief Information Security Officer (CISO) is responsible for the Information Security Program, reporting quarterly on cybersecurity metrics and emerging risks[212]. - An Incident Response Plan (IRP) has been developed to manage cybersecurity incidents, with annual testing conducted to ensure effectiveness[214]. Economic and Market Conditions - The rapid increase in interest rates during 2022 and 2023 has led to increased competition for deposits, impacting liquidity and funding costs[155]. - Market conditions have led to increased volatility and uncertainty in the U.S. banking system, particularly regarding liquidity and uninsured deposits, following the failures of Silicon Valley Bank and Signature Bank in March 2023[187]. - The FDIC imposed a special assessment in 2023 to recover losses from bank failures, which may lead to increased deposit insurance costs and reduced profitability for the company[189]. Shareholder and Capital Structure - The principal shareholders own approximately 60% of the outstanding common stock, which may lead to voting outcomes that do not align with the interests of other shareholders[195]. - The Series A Preferred Stock ranks junior to all existing and future indebtedness, meaning holders may not receive payments until all liabilities are settled in the event of liquidation[199]. - The Series A Preferred Stock dividends are non-cumulative and discretionary, meaning the company is not obligated to pay dividends if not declared by the board[202].

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: 001-37621 FIRST GUARANTY BANCSHARES, INC. (Exact name of registrant as specified in its charter) Louisiana 26-051355 ...