Revenue Performance - VerifyMe reported Q4 2025 revenue of $2.4 million, a decrease of 68% from $7.7 million in Q4 2024, primarily due to the termination of the agreement with the previous shipping partner[6]. - The annual revenue for 2025 was $16.4 million, down from $24.2 million in 2024, with a net loss of $4.9 million compared to a net loss of $3.8 million in 2024[4]. - Total net revenue for the year ended December 31, 2025, was $16,398,000, a decrease of 32.2% compared to $24,207,000 for the year ended December 31, 2024[27]. Profitability Metrics - Gross profit for Q4 2025 was $1.2 million, representing a gross margin of 49%, compared to $2.4 million and a 32% margin in Q4 2024[7]. - Gross profit for the year ended December 31, 2025, was $6,321,000, down 27.0% from $8,662,000 in 2024[27]. - Adjusted EBITDA for 2025 was $1.0 million, an increase from $0.9 million in 2024, while Q4 2025 adjusted EBITDA was ($0.1) million compared to $0.5 million in Q4 2024[10]. - Adjusted EBITDA for the year ended December 31, 2025, was $1,033,000, an increase of 8.7% from $950,000 in 2024[29]. Operating Loss and Expenses - The operating loss for Q4 2025 was ($0.7) million, compared to an operating loss of ($0.3) million in Q4 2024, reflecting the impact of reduced revenue[8]. - Operating expenses for the year ended December 31, 2025, totaled $11,391,000, down 12.7% from $13,052,000 in 2024[27]. Cash and Assets - As of December 31, 2025, VerifyMe had cash of $4.4 million and a short-term note receivable of $2.0 million[4]. - Cash and cash equivalents rose to $4,353,000 as of December 31, 2025, compared to $2,823,000 as of December 31, 2024, marking a 54.3% increase[24]. - Total current assets increased to $7,727,000 as of December 31, 2025, from $6,362,000 as of December 31, 2024, representing a growth of 21.4%[24]. Liabilities and Shareholder Equity - Total liabilities decreased significantly to $2,025,000 as of December 31, 2025, from $5,853,000 as of December 31, 2024, a reduction of 65.5%[25]. - The weighted average common shares outstanding increased to 12,846,593 for the year ended December 31, 2025, from 10,402,508 in 2024, reflecting a growth of 23.5%[27]. Strategic Moves - The company is in the process of transitioning clients to a new shipping partner, which is expected to enhance service offerings[3]. - VerifyMe entered into an Agreement and Plan of Merger to combine with Open World, Ltd., indicating a strategic move for market expansion[11]. - The company terminated its ATM Sales Agreement with Roth Capital Partners, LLC, as part of its strategic adjustments[11]. Inventory and Other Metrics - The company’s inventory decreased slightly to $37,000 as of December 31, 2025, from $39,000 as of December 31, 2024[24]. - The net loss per diluted share in Q4 2025 was ($0.05), consistent with the loss per diluted share in Q4 2024[9]. - The company reported a net loss of $4,905,000 for the year ended December 31, 2025, compared to a net loss of $3,824,000 in 2024, indicating a worsening of 28.3%[27].

Financial Performance - Total net revenue increased by $219 million to $5.547 billion in Fiscal 2025 compared to $5.329 billion in Fiscal 2024, representing a 4% increase [226]. - Total comparable sales increased by 3%, with Aerie's comparable sales rising by 9% while American Eagle's remained flat year-over-year [226]. - Gross profit decreased by 3% to $2.025 billion, with gross margin declining by 270 basis points to 36.5% as a percentage of revenue [226]. - Operating income fell by 47% to $226.2 million, with a decrease of 390 basis points to 4.1% as a percentage of total revenue [226]. - Net income attributable to AEO decreased by 42% to $192.0 million, with diluted earnings per share dropping to $1.09 from $1.68 in Fiscal 2024 [226]. - Digital revenue increased by 7%, driven by higher transaction volume and increased traffic, while store revenue remained flat compared to Fiscal 2024 [228]. Costs and Expenses - Buying, occupancy, and warehousing costs increased by $34 million year-over-year, primarily due to new store openings and digital sales volume [232]. - The decrease in gross profit was attributed to a $30 million decline in merchandise margin due to increased promotional activity and $70 million in incremental tariffs [231]. - Selling, general and administrative (SG&A) expenses increased by $53.7 million year-over-year, reaching $1,485.5 million, representing 26.8% of net revenue [234]. - Interest expense increased by 153% to $4.1 million, primarily due to a reduction in interest income and increased borrowings [243]. - Depreciation and amortization expense totaled $212.0 million, slightly down by 0.1% from the previous year, accounting for 3.8% of net revenue [238]. Impairment and Restructuring - Total impairment and restructuring charges for Fiscal 2025 amounted to $101.6 million, which is 1.8% of net revenue, primarily due to the closure of the Quiet Platforms business [235]. - The company recorded an impairment charge of $17.6 million, which was added back in the non-GAAP reconciliation [254]. Cash Flow and Capital Expenditures - Cash flow and liquidity are expected to be sufficient to fund anticipated capital expenditures and working capital requirements for the next 12 months and beyond [219]. - Total cash provided by operating activities decreased by $20.6 million from Fiscal 2024 to Fiscal 2025, totaling $456.2 million [259]. - Capital expenditures for Fiscal 2025 amounted to $260.8 million, a 17% increase from $222.5 million in Fiscal 2024 [264]. - Cash returned to shareholders through dividends and share repurchases was $344.0 million in Fiscal 2025, up from $287.4 million in Fiscal 2024 [263]. - The company expects capital expenditures for Fiscal 2026 to be in the range of $250 to $260 million to support expansion and technology upgrades [264]. Tax and Other Income - The effective tax rate for Fiscal 2025 was 25.6%, a slight decrease from 25.7% in Fiscal 2024 [245]. - Other income increased significantly by 482% to $(27.3) million, primarily due to a $26 million gain on equity method investments [244]. - Net income per diluted share for Fiscal 2025 was $1.09, which included $97.9 million of pre-tax impairment and restructuring charges [249]. Shareholder Actions - During Fiscal 2025, the company repurchased 3.0 million shares under its share repurchase program, with a total of 49.0 million shares remaining authorized for repurchase [270]. - The company has a revolving credit facility of up to $700 million, expiring in June 2027, with $12 million outstanding in stand-by letters of credit as of January 31, 2026 [268][269]. Market Risks - The company has market risk exposure related to interest rates and foreign currency exchange rates, with a hypothetical 10% adverse change in rates estimated to impact earnings and cash flows [292]. - A hypothetical 10% movement in the Canadian dollar and Mexican peso exchange rate could result in a foreign currency translation fluctuation of $30 million to $35 million [295]. - An unrealized gain of $40.8 million is included in accumulated other comprehensive loss, primarily related to fluctuations in the U.S. dollar to Mexican peso and Canadian dollar exchange rates [295].

Financial Performance - Total revenue for FY 2025 reached $11.4 million, a 442% increase from $2.1 million in FY 2024[13] - Digital Asset Treasury revenue was $9.2 million, with a net loss of $73.8 million primarily due to unrealized losses on digital assets[14] - The Annualized Organic Yield (AOY) for Q4 was 8.3%, below the 10% guidance target due to a crypto-wide liquidation event[15] - Solana's Q4'25 metrics showed a 52% year-over-year decline in Daily Active Users (DAUs) to 2.9M, and revenue decreased by 89% to $90.5M[42] - DFDV was recognized as the top-performing crypto stock of 2025, delivering a +633% return, outperforming all listed DAT peers[60] User Engagement and Market Growth - Daily active users on Solana surpassed 4.2 million, representing a 56% year-over-year growth[4] - Total Value Locked (TVL) in stablecoins on Solana increased to over $16 billion, up more than 5x from late 2021[4] - Real-world asset (RWA) TVL on Solana grew over 400% year-over-year, reaching approximately $1.7 billion, which is 6% of the total RWA TVL of $27 billion[6] - Five Solana ETFs launched in Q4'25, with total flows reaching approximately $1.0 billion[44] Strategic Investments and Initiatives - The company closed $164 million in convertible debt and $149 million in equity PIPEs while deploying a $5 billion Equity Line of Credit (ELOC)[12] - The company monetized its stake in ZeroStack for approximately $3M, validating its ability to identify asymmetric investment opportunities[38] - A strategic investment in Apyx, a DeFi protocol for dividend-backed stablecoins, was made in Q1'26, reflecting the company's commitment to bridging TradFi and DeFi[39] - Japan and Korea are identified as attractive markets for the Treasury Accelerator, with strong retail and institutional demand for crypto, and ongoing evaluations for market launch[37] Future Outlook and Guidance - The company aims to maintain a long-term target of 1.0 SPS by December 2028, assuming a more favorable crypto environment[25] - The revised June 2026 SPS guidance was lowered from 0.165 to 0.085 due to broad-based mNAV compression across the Digital Asset Treasury space[21] - The company plans to publish additional research in Q2 2026 to quantify demand vectors feeding into its DFDV Model, reinforcing the view that SOL remains undervalued[53] - The company aims to grow SPS and deepen participation in the Solana ecosystem as it enters 2026, focusing on transparency and disciplined capital allocation[61] Risks and Uncertainties - The company anticipates fluctuations in the market price of SOL, which may lead to associated losses[74] - There is uncertainty regarding the demand for SOL and the growth of activity on the SOL network as predicted in the DFDV Model[74] - The company faces volatility in its stock price, which may be influenced by future issuances of common stock[74] - The ongoing volatility in interest rates presents uncertainties that could impact the company's financial condition[74] - Regulatory environment complexities and compliance issues may affect the company's business operations[74] - Changes in accounting treatment related to the company's SOL holdings could impact financial reporting[74] - The company must effectively manage its growth and expectations regarding business development and expansion[74] - Access to capital sources, including debt financing, is crucial for financing operations and growth[74] - The company acknowledges various risks and uncertainties that could affect its actual results compared to forward-looking statements[75]

or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to 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 Commission file number 001-43073 KRAKacquisition Corp (Exact name of registrant as specified in its charter) Cayman Islands 98-1875195 (State or other jurisdict ...

Economic Conditions - The Brazilian economy has shown moderate GDP growth alongside rising inflation and tighter monetary policy, which may adversely affect the company's results of operations and cash flows [195]. - Inflation increased during 2024 and remained above the official target for part of 2025, prompting the Central Bank to raise interest rates, which could lead to reduced consumer spending on telecommunications services [196]. - Higher inflation and interest rates may lead to increased debt service burdens for consumers, potentially resulting in downgrades to lower-priced plans and increased churn rates [196]. - Geopolitical risks, including conflicts in Europe and the Middle East, may contribute to volatility in commodity prices and affect inflation, interest rates, and global growth, impacting the company's financial stability [201]. Financial Market Exposure - The company is exposed to global financial market volatility, which can affect the market price and liquidity of its securities, as well as access to international capital markets [199]. - Any deterioration in global financial conditions could lead to capital outflows from Brazil, exchange rate depreciation, and tighter funding conditions, adversely affecting the company's operations [207]. Shareholder Influence - The controlling shareholder, Telecom Italia, has significant influence over the company's strategic decisions, which may conflict with the interests of other shareholders [208]. Currency and Tax Implications - Cash dividends and other distributions are payable only in Brazilian reais, meaning exchange rate fluctuations can affect the dollar amounts received by holders of American Depositary Shares (ADSs) [212]. - Non-Brazilian holders of ADSs may be subject to Brazilian income tax on capital gains from sales, with rates varying between 15% and 22.5%, and potentially up to 25% for those in Low or Nil Tax Jurisdictions [213]. - Gains realized through transactions on Brazilian stock exchanges are exempt from Brazilian income tax if conducted according to CMN regulations and the investor is not in a Low or Nil Tax Jurisdiction [213]. - Resolution CMN 4,373 was replaced by Resolution No. 13 in December 2024, which is expected to maintain the current tax treatment for non-Brazilian holders [214]. - Holders of ADSs who exchange them for common shares risk losing certain foreign currency remittance and Brazilian tax advantages [215]. - If holders of ADSs do not qualify under Resolution No. 13, they will face less favorable tax treatment on distributions related to common shares [217]. Regulatory Risks - Brazilian law allows the government to impose temporary restrictions on remittances to foreign investors during significant balance of payments imbalances [218]. - Future restrictions could adversely affect the market price of shares and ADSs, hindering the ability to remit dividends abroad [219]. - A more restrictive policy could increase the cost of servicing foreign currency-denominated debt obligations, potentially leading to default [220].

Financial Performance - The company reported a loss from operations of $17.3 million for the year ended December 31, 2025, a 20% decrease from a loss of $21.6 million in 2024[378]. - Net loss applicable to common shareholders was $17.3 million in 2025, compared to $19.8 million in 2024, reflecting a reduction in losses[406]. - Cash balance at December 31, 2025, was $5.2 million, with an accumulated deficit of $264.5 million[407]. - The company expects existing cash to fund operations into April 2026 but will need to raise additional capital to continue operations[433]. - The Company has substantial doubt regarding its ability to continue as a going concern within one year due to recurring losses and the need for additional capital[438]. Research and Development - Research and development expenses decreased by 60% to $2.8 million in 2025, down from $7.0 million in 2024[378]. - The company aims to establish AKTX-101 as a best-in-class Trop-2-targeting ADC for treating various solid tumors[361]. - The company is focused on advancing its lead program, AKTX-101, through IND-enabling activities, with a projected timeline to enter clinical trials by Q1 2027[367]. - Total research and development expenses decreased by approximately $4.2 million, or 60%, from $6.983 million in 2024 to $2.815 million in 2025[381]. - ADC preclinical development expenses increased by $1.238 million, or 100%, from $47,000 in 2024 to $1.285 million in 2025[381]. - HSCT-TMA clinical development expenses decreased by $1.817 million, or 96%, from $1.896 million in 2024 to $79,000 in 2025 due to the suspension of the AK901 clinical program[383]. - Chemistry, manufacturing and control expenses decreased by $3.281 million, or 94%, from $3.497 million in 2024 to $216,000 in 2025, also due to the suspension of the AK901 program[384]. - The company plans to invest in additional ADC-related discovery and pre-clinical development activities following the strategic prioritization of its ADC technology[382]. Financing Activities - In December 2025, the company completed equity-related transactions totaling approximately $8.7 million in gross cash proceeds[376]. - The Company closed its 2025 Registered Direct Offering on October 16, 2025, issuing 3,125,000 ADSs with gross proceeds of $2.5 million[416]. - The company entered into a securities purchase agreement on December 16, 2025, for the issuance of 10,043,774 ADSs, raising approximately $5 million in gross proceeds[413]. - The Placement Agent received a cash commission of 8.0% and a management fee of 0.5% from the December 2025 Offerings[415]. - The Company issued August 2025 Notes with an aggregate purchase price of $3,011,000 and a principal amount of $3,763,750[428]. - The company recognized $14.2 million in net proceeds from debt and equity securities issuance in 2025, compared to $11.8 million in 2024[446]. Management Changes - The company appointed a new President and CEO, Mr. Abizer Gaslightwala, in April 2025, and an Interim CFO, Mr. Kameel Farag, in October 2025[374][375]. Impairment and Valuation - An impairment charge of $5.18 million was recorded for the PHP 303 IPR&D asset due to resource reprioritization and lack of further development plans[460]. - As of December 31, 2025, the company performed its annual impairment test and concluded that the fair values of the AKTX 101 IPR&D asset and reporting unit exceeded their carrying values[461]. - The estimated fair value of Adjusted Warrants at the acquisition closing date was $1.8 million, calculated using the Black Scholes Option Pricing Model[450]. Currency and Interest Rate Risks - The company's operations are subject to currency transactional risk, particularly with fluctuations in the U.S. dollar against the British Pound, Euro, Swiss Franc, and Korean Won, which may impact profitability and shareholders' equity[466]. - The functional currency is the U.S. dollar, with activities predominantly executed in U.S. dollars, Euros, and British Pounds, and no significant operational exposures to currency fluctuations have been identified[467]. - The company has short-term promissory notes and a short-term insurance premium financing arrangement initiated in January 2026, with no current plans to hedge against interest rate risks[468]. - A hypothetical ten percent adverse movement in interest rates would result in immaterial potential losses in future earnings and cash flows, although actual effects may differ[469].

Oncology Product Development - The company is focused on developing targeted radiotherapies for oncology, with a pipeline including two novel solid tumor product candidates, ATNM-400 and Actimab-A, and two targeted conditioning agents, Iomab-B and Iomab-ACT[16]. - ATNM-400 has demonstrated pre-clinical efficacy across multiple solid tumors, with a combined patient population exceeding 800,000 in the U.S., outperforming leading therapies by 3-5 fold in tumor growth inhibition[23]. - Actimab-A targets myeloid-derived suppressor cells (MDSCs) and is positioned to expand the $40+ billion PD-1 inhibitor market by addressing resistance mechanisms in solid tumors[24]. - The hematology franchise, including Iomab-B, has been validated in over 500 patients and is aligned with FDA for a Phase 2/3 trial, targeting approximately 150,000 patients in relapsed/refractory AML[25]. - Actimab-A is set to undergo a basket trial in combination with PD-1 inhibitors across four solid tumor types, with initial data expected in 2H:2026[35]. - Actimab-A aims to address a combined patient population in AML and MDS estimated at over $2 billion, with potential for mutation-agnostic therapy[91]. - Iomab-ACT is being developed as a universal conditioning agent for cell and gene therapies, improving access and outcomes while reducing toxicities associated with traditional conditioning methods[92]. - Actimab-A is being evaluated as a backbone therapy in combination with venetoclax and a hypomethylating agent for newly diagnosed AML patients, potentially benefiting a broad patient population[93]. - Iomab-B has been evaluated in over 500 patients, demonstrating successful donor cell engraftment in elderly R/R AML patients who are ineligible for conventional conditioning[99]. - The Phase 3 SIERRA trial met its primary endpoint of durable complete remission (dCR) but did not meet the secondary endpoint of overall survival (OS) due to patient crossover[99]. - Iomab-B has composition of matter patents extending to 2038 and has potential market expansion beyond R/R AML, addressing approximately 150,000 patients across multiple disease indications[101]. Clinical Trials and Regulatory Strategy - The company has established a comprehensive end-to-end supply chain for clinical trials, successfully executing multiple Phase 1-3 trials across its programs[28]. - The company is actively seeking strategic partnerships to advance its late-stage hematology programs, leveraging existing relationships to support cost-effective clinical development[38]. - The FDA has a standard goal to review applications within 10 months of filing, or 6 months for priority review drugs[150]. - The FDA requires a randomized head-to-head trial to demonstrate overall survival (OS) benefit for Iomab-B, which is necessary for a Biologics License Application (BLA) filing[200]. - The FDA requires a Biologics License Application (BLA) to include results from product development, laboratory and animal studies, and human trials before commercial marketing can begin[213]. - The FDA may grant deferrals for submission of data or full/partial waivers, but there is no assurance that the BLA will be accepted or approved in a timely manner[213]. - The FDA may ultimately deny approval of a BLA if it does not meet regulatory criteria, regardless of submitted data[214]. - The clinical trial process is lengthy and requires substantial resources, making it difficult to predict the timing of BLA submissions[214]. Manufacturing and Supply Chain - The company is investing in a radiopharmaceutical manufacturing facility expected to be operational by 2H:2026, enhancing its clinical supply capabilities[29]. - The internal cGMP radiopharmaceutical manufacturing facility is expected to be operational in 2H:2026, designed to manufacture Ac-225 based radioconjugates for clinical trials[39]. - The company has developed proprietary technology for commercial-scale production of Ac-225, which may represent a significant competitive advantage in radiopharmaceutical development[106]. - A radiopharmaceutical manufacturing facility is expected to be operational in the second half of 2026, designed for Ac-225-based final drug products[107]. - The company maintains a comprehensive supply chain for isotope production and patient administration, ensuring reliable service to approximately 50 leading cancer centers[108]. - The company’s manufacturing strategy combines internal capabilities with external partnerships to create a flexible and cost-effective supply chain[139]. Intellectual Property and Competitive Landscape - The intellectual property portfolio includes approximately 250 patents, providing extensive protection for product candidates and creating barriers to entry for competitors[30]. - The company’s intellectual property portfolio includes patents that provide market exclusivity in major territories such as the U.S., Europe, and Japan[136]. - The competitive landscape includes large pharmaceutical companies and clinical-stage radiopharmaceutical companies, with a focus on novel, first-in-class targets to differentiate from competitors[115]. Financial Performance and Risks - The company has incurred net losses every year since inception and anticipates continuing to incur net losses in the future[170]. - The company has generated no revenue from commercial sales to date, highlighting its status as a clinical-stage biopharmaceutical company[171]. - The company is highly dependent on the clinical, regulatory, and commercial success of its pipeline candidates, including ATNM-400, Actimab-A, and Iomab-ACT[170]. - The company has incurred net losses every year since inception, with an accumulated deficit of $409.7 million as of December 31, 2025, and a net loss of $33.9 million for the year ended December 31, 2025[173]. - The company expects to continue operating at a net loss due to ongoing research and development efforts, clinical trials, and the development of manufacturing and marketing capabilities[173]. - The company has limited access to capital markets, making it difficult to secure funding on favorable terms, which could adversely affect its business and operations[179]. - The company is highly dependent on the clinical, regulatory, and commercial success of its drug candidates, including ATNM-400, Actimab-A, and Iomab-ACT, none of which have received regulatory approval yet[180]. Workforce and Operational Challenges - The company employs 25 full-time employees, with 12 holding Ph.D. or M.D. degrees, focusing on research and development activities[144]. - The company has reduced its workforce by approximately 20% in the third quarter of 2024, primarily from clinical and CMC groups, but does not expect this to materially impact operations[186]. - Future health epidemics could adversely affect clinical trial operations, including recruitment and retention of patients and investigators[192]. - The company may need to establish commercial sales and marketing capabilities if its product candidates are approved, which would be expensive and time-consuming[191]. Cybersecurity and Regulatory Compliance - The company faces risks related to cybersecurity, which could adversely affect its business operations[170]. - The company has cybersecurity insurance, but it may not be sufficient to cover losses from cyberattacks[197]. - The company must comply with various regulatory requirements, including the Drug Supply Chain Security Act (DSCSA), which affects product distribution and tracing[157]. - The company is subject to foreign regulations governing clinical trials and commercial sales, which can vary significantly from U.S. regulations[160]. - Regulatory disruptions, such as government shutdowns, could delay clinical development and regulatory approvals, impacting business strategy[205]. - The FDA's evolving regulatory policies and potential changes in leadership could create challenges for the company's development efforts[205].

Financial Performance - The company incurred net losses of $100.0 million and $98.3 million for the years ended December 31, 2025, and December 31, 2024, respectively, with an accumulated deficit of $380.1 million as of December 31, 2025[213]. - The company has no products approved for commercialization and has never generated any revenue from product sales[213]. - The company may need to raise additional capital to meet its financial obligations and pursue its business objectives, which could lead to dilution of stockholder equity[221]. - The total addressable market for product candidates may be smaller than projected, affecting potential revenue and profitability[310]. Cash and Funding - As of December 31, 2025, the company had cash, cash equivalents, and investments in U.S. Treasury securities of $246.6 million, expected to fund operations into 2028[219]. Product Development and Regulatory Challenges - The company is in the early clinical stages of development for its lead product candidates and anticipates significant increases in expenses related to clinical trials and regulatory approvals[214]. - The company has received Rare Pediatric Disease designation from the FDA for LX2006 for the treatment of FA, which may provide certain benefits if Congress extends the priority review program[211]. - The company expects to incur significant expenses related to product sales, medical affairs, marketing, manufacturing, and distribution if any product candidates receive marketing approval[218]. - The success of the company's product candidates will depend on timely completion of preclinical studies and regulatory approvals, which may take several years[226]. - The regulatory landscape for gene therapy is complex and subject to change, impacting the time and cost of obtaining approvals[232]. - The company has not successfully completed any internally sponsored clinical trials to date, indicating a high risk of failure in clinical development[238]. - The company may experience significant delays in clinical trials due to various unforeseen events, including regulatory approvals and patient recruitment challenges[240]. - The company must demonstrate that its product candidates are safe and effective, which involves extensive and rigorous review by regulatory authorities[237]. - Regulatory requirements may necessitate additional preclinical studies or trials, leading to increased development costs and delays in commercialization[236]. - The regulatory approval processes of the FDA and EMA are lengthy and unpredictable, typically taking many years following the commencement of clinical trials[246]. - The company has not obtained regulatory approval for any product candidate, and it is possible that it may never obtain such approvals in the future[246]. - Adverse side effects identified during the development of product candidates could prevent or delay regulatory approval and commercialization[258]. - Changes in regulatory policies or additional requirements imposed by authorities could delay the approval process and increase compliance costs[251]. - The company may need to conduct additional clinical trials or studies as required by regulatory agencies, which could further delay the approval process[247][250]. - The company faces significant uncertainty regarding the impact of government regulations and potential changes in FDA operations on its clinical programs[252]. Clinical Trials and Patient Recruitment - The company may face challenges in enrolling patients for clinical trials due to the low prevalence of some diseases it aims to treat[211]. - Approximately 6,600 individuals in the U.S. are estimated to have FA, with around 80% expected to develop FA cardiomyopathy, complicating patient recruitment for clinical trials[265]. - The company may face challenges in patient enrollment due to the low prevalence of targeted diseases and competition from other clinical trials[265]. - Delays in patient enrollment could lead to increased development costs and negatively impact the company's valuation and financing capabilities[269]. - The company relies on CROs and clinical trial sites for timely conduct of trials, which may affect enrollment and trial completion[269]. Manufacturing and Supply Chain Risks - The company relies on third-party suppliers for materials used in manufacturing its product candidates, and any loss of these suppliers could harm its business[211]. - The company faces challenges in achieving sustainable and scalable production of its product candidates[231]. - Gene therapy products are complex to manufacture, requiring substantial expertise and capital investment, which may lead to delays in development or commercialization[296]. - The company relies on third-party manufacturers for clinical trials, and any failure to comply with regulatory requirements could result in significant delays or sanctions from authorities like the FDA or EMA[297]. - If third-party manufacturers fail to meet obligations, the company may face delays in clinical trials and commercialization due to the need to establish alternative supply sources[298]. - Manufacturing processes for gene therapy products are technically complex, and any shortages or contamination of critical raw materials could lead to delays in clinical development[300][303]. - Regulatory authorities may require additional testing or studies if manufacturing methods change, potentially delaying approval and commercialization of product candidates[304]. - Disruptions in supply from manufacturers could significantly impact commercial operations and timelines[295]. Competition and Market Dynamics - The company faces significant competition in the gene therapy field, with many competitors having greater resources and experience in drug development and commercialization[312][315]. - The company faces competition from existing and future drugs in the cardiac and neurology fields, impacting its ability to develop and commercialize differentiated products[316]. - Established pharmaceutical companies may invest heavily in novel compounds, potentially making the company's product candidates less competitive[318]. - The reimbursement structure for gene therapies by competitors may affect the anticipated reimbursement for the company's own gene therapies, influencing its financial condition and prospects[317]. - The Biologics Price Competition and Innovation Act (BPCIA) allows for abbreviated approval pathways for biosimilars, which could lead to competition sooner than expected for the company's biologic product candidates[319]. Intellectual Property and Legal Risks - The company relies on a combination of patents and trade secrets to protect its intellectual property, which is crucial for competitive positioning[345]. - The patent prosecution process is expensive and time-consuming, and failures in this process could impair the company's ability to prevent competition[349]. - The uncertainty surrounding patent rights and potential litigation could adversely affect the company's business and financial condition[350]. - The company relies on trade secret protection and confidentiality agreements to safeguard proprietary know-how, but cannot guarantee that all agreements are enforceable, which may lead to unauthorized use or disclosure of trade secrets[353]. - Enforcing claims against third parties for illegal use of trade secrets is costly and unpredictable, potentially resulting in inadequate remedies for breaches[354]. - The company is focused on maintaining the physical and electronic security of its information systems to protect trade secrets, but acknowledges that breaches may occur[355]. - The company in-licenses key intellectual property necessary for product development, and failure to comply with licensing obligations could result in loss of rights critical to the business[358]. - The company faces risks related to the protection of licensed intellectual property, which could impact the ability to commercialize product candidates if not adequately maintained[368]. - The company may face costly and time-consuming litigation to protect its patents, which could distract management and impact operations[379]. - The company may face patent infringement claims from third parties, which could lead to litigation and impact its ability to commercialize products[385]. - Legal proceedings related to intellectual property could result in substantial costs and divert management's attention from core business activities[390]. - The potential for compulsory licensing laws in some countries could impair the company's competitive position by forcing it to grant licenses to third parties[403]. Collaborations and Partnerships - The company relies on collaborations with Cornell University and UCSD for research and development, and any failure in these partnerships could adversely affect its pipeline[332][334]. - Collaborations with third parties for product development may not be successful, impacting the company's ability to capitalize on market potential[340]. - The company faces significant competition in securing collaborations, which may affect the timing and terms of agreements[342]. - If the company cannot negotiate collaborations on acceptable terms, it may need to curtail development programs or increase expenditures, potentially requiring additional capital[343].

Company Overview - Siebert Financial Corp. operates through two reportable segments: Financial Services and Media, Sports and Entertainment [19]. - As of March 24, 2026, the company had 166 full-time employees and its common stock trades on the Nasdaq Capital Market under the symbol "SIEB" [20]. - Muriel Siebert & Co., LLC (MSCO) has been providing brokerage services for over 55 years and offers a wide range of investment services, including self-clearing capabilities [22][25]. - The company established an Investment Banking division in Q1 2025 to serve middle-market clients, staffed with experienced professionals [41][42]. - Siebert AdvisorNXT, LLC (SNXT) offers proprietary robo-advisory technology that utilizes trading algorithms to provide automated wealth management solutions [43]. Business Developments - In May 2022, MSCO received approval to expand its clearing services, enhancing its core competencies and diversifying its business [23]. - Gebbia Media, LLC (GM) acquired Big Machine Rock in May 2025, expanding its presence in the music and media sectors [51]. - GM launched Gebbia Sports in June 2025, focusing on the needs of elite college and professional athletes, signing several NCAA athletes [52]. - Siebert Technologies, LLC (STCH) is dedicated to advancing technology for clients and business operations, including the development of a mobile trading application [45][46]. - Siebert Crypto, LLC (SCRYP) was formed in December 2025 and is in the preliminary stages of seeking registration as a Money Services Business [53]. Regulatory Environment - The company faces significant competition from various brokerage firms, including zero commission firms, and other financial institutions, which may impact its market share [55]. - The company is registered as a broker-dealer in 50 states, the District of Columbia, and Puerto Rico, indicating a broad operational footprint [56]. - The company has experienced significant changes in regulations due to the Dodd-Frank Act, affecting compliance, risk management, and capital requirements [58]. - The company is required to provide protection for customer accounts up to $500,000 per customer under SIPC, with an additional $50 million in coverage purchased [62]. - The company must comply with Regulation Best Interest, which mandates acting in the best interest of retail customers during securities transactions [59]. - The company is subject to extensive regulations that may impact its profitability and operational practices, including potential changes in laws and regulations [79]. - The company has implemented thorough training for employees to comply with regulatory requirements, including anti-money laundering and insider trading [77]. - The company is subject to minimum net capital requirements under the SEC Uniform Net Capital Rule, which is crucial for financial stability [70]. - The company is actively monitoring compliance costs associated with new regulations, which may affect its financial performance [82]. - The company is subject to extensive government regulation, including oversight by the SEC, NYSE, and FINRA, which could materially affect its business operations and financial condition [84]. - The company faces significant litigation and regulatory risks that could result in substantial costs and reputational harm, impacting its ability to retain clients and key personnel [87]. - The company is required to maintain net capital requirements, which could limit its operational capabilities and growth strategies [88]. Financial Performance - In 2025, earnings per share were $0.13, down from $0.33 in 2024, with net revenues of $94.2 million compared to $83.9 million in 2024 [154]. - Retail customer net worth increased by 9% to $19.5 billion compared to 2024 [157]. - Revenue from stock borrow/stock loan increased by 51% to $29.0 million compared to 2024 [157]. - Revenue from principal transactions and proprietary trading rose by 20% to $17.5 million compared to 2024 [157]. - In 2025, Siebert recognized a total realized gain of $2.4 million from the sale of restricted shares of a privately held U.S. company [155]. - Siebert acquired certain assets from BMLG for $441,000, enhancing its music masters portfolio [156]. - The company purchased the remaining 32% ownership interest in RISE for $3.7 million, making it a wholly-owned subsidiary [159]. - A one-time business development credit of $4.8 million was received following the amendment of the clearing agreement with NFS [160]. - Total revenue for the Financial Services segment was $92.99 million in 2025, up from $83.90 million in 2024 [162]. - Operating income for the Financial Services segment decreased to $6.75 million in 2025 from $17.57 million in 2024 [164]. Operational Challenges - The company faces significant competition in the brokerage industry, with competitors offering zero commission trades potentially impacting revenue [129]. - Economic slowdowns and market volatility could lead to financial losses for customers, adversely affecting the company's revenues and operating results [128]. - Interest rate changes significantly impact profitability, with lower rates compressing net interest margins and affecting overall revenue [126]. - The company is exposed to risks from operational failures of financial intermediaries, which could affect transaction execution and client service [133]. - Cybersecurity threats are increasing, with the company exposed to potential breaches that could lead to significant remediation costs and reputational damage [96]. - The company has purchased liability and cybersecurity insurance with a coverage limit of $15 million, but this may not be sufficient to cover all potential claims [95]. - The company is investing in technology enhancements to avoid obsolescence and meet evolving client needs, which entails significant technical and business risks [102]. - Strategic acquisitions are being considered as part of the growth strategy, but these come with risks such as integration difficulties and potential loss of key personnel [105]. - The company relies on third-party platforms for critical operations, which poses risks related to system failures and data security [90]. - The company must continuously adapt to changing regulations and market conditions, which could materially impact its business operations [86]. - The company is dependent on key personnel for success, and the loss of any significant individuals could adversely affect its financial condition and operating results [111]. Shareholder Information - 14,441,440 shares of common stock, approximately 35.3% of outstanding shares, are held by non-affiliates as of March 24, 2026, indicating potential volatility due to limited float [116]. - Gloria E. Gebbia and family control approximately 42% of common stock, allowing significant influence over shareholder votes [117]. - On April 27, 2023, the company issued 8,075,607 shares to Kakaopay, representing 20% of outstanding equity, which could adversely affect stock price if sold [119]. - The average daily trading volume from January 1, 2025, to December 31, 2025, was approximately 64,709 shares, reflecting thin trading conditions [120]. - The company did not pay any dividends in 2024 or 2025, with future payments dependent on earnings and cash flow generation [123]. Cash Flow and Financial Obligations - Cash and cash equivalents decreased to $22.4 million from $32.6 million [192]. - As of December 31, 2025, the company has $4.1 million outstanding on its mortgage with East West Bank and an unutilized line of credit of up to $25 million with BMO Harris [196]. - For the year ended December 31, 2025, cash provided by operating activities increased by $0.2 million compared to 2024, primarily driven by net changes in securities loaned and borrowed, receivables, and payables [206]. - Cash used in investing activities increased by $0.6 million compared to 2024, primarily due to the investment in IQvestment Holdings, LLC, partially offset by a decrease in investments in software development costs [207]. - Cash flows provided by financing activities increased by $1.4 million compared to 2024, primarily driven by a short-term bank loan [208]. - The company is obligated to pay Kakaopay a fee of $5 million in ten quarterly installments starting in Q1 2024 [198]. - The company filed a shelf registration statement for the potential offering of up to $100 million of common stock, with $50 million utilized for the At the Market program as of May 30, 2025 [200]. - As of December 31, 2025, the company recorded an uncertain tax position of $63,000 related to various tax matters, down from $1,354,000 in 2024 [214]. - The company has operating lease commitments totaling $2.744 million due over the next five years [198]. - The company received a one-time business development credit of $4.8 million as part of an amendment to its clearing agreement with NFS effective September 29, 2025 [210]. - The total minimum expense for the service agreement with Broadridge Securities Processing Solutions is estimated at approximately $1.2 million over the contract duration ending June 2028 [211].

Financial Performance - In 2025, total sales amounted to $2,453,000, with the top four customers contributing 53.9% of revenue[44]. - International revenues were $897,000, representing 36.6% of total sales, a decrease from 43.2% in 2024[49]. - The order backlog increased to $625,000 in 2025 from $336,000 in 2024, indicating a growing demand for products[51]. - Total revenues decreased by $123, or 2.9%, from $4,292 in 2024 to $4,169 in 2025, primarily due to an $374, or 18.1%, decrease in net investment income[181]. - Net sales increased by $227, or 10.2%, from $2,226 in 2024 to $2,453 in 2025, driven by higher product shipments within the Electronic Instruments segment[182]. - Net income attributable to LGL Group common stockholders increased by $256, or 59.3%, from $432 in 2024 to $688 in 2025[180]. - Cash provided by operating activities was $70 in 2025, a decrease of $804 from $874 in 2024[200]. - Cash and cash equivalents at the end of 2025 were $41,514, slightly down from $41,585 at the end of 2024[198]. - The current ratio improved to 50.6 in 2025 from 47.2 in 2024, indicating better liquidity management[203]. - Income tax expense decreased by $683, or 385.9%, from $177 in 2024 to ($506) in 2025 due to the reversal of a previously recorded uncertain tax position[186]. Business Strategy and Operations - LGL Group has acquired 32 businesses since 1985, with a focus on identifying undervalued companies for potential acquisition[13][21]. - The company aims to maximize shareholder value by developing businesses into independent entities[17]. - LGL Group's strategy includes opportunistic acquisitions to expand operations and enhance returns[22][24]. - The company launched Lynch Capital International, LLC in 2023 to facilitate its Merchant Investment business[29]. - The company is exploring acquisition opportunities to enhance or expand its business, but may face challenges in finding suitable targets or securing necessary financing[116]. - The company relies on single or limited sources for key components and raw materials, which poses a risk to operations if these sources fail to meet needs[124]. Market and Economic Conditions - Inflation in the United States decreased from 2.9% as of December 31, 2024, to 2.7% as of December 31, 2025, remaining above the Federal Reserve's long-term target of 2.0%[103]. - The U.S. Federal Reserve decreased the federal funds rate a total of three times throughout 2025, resulting in a range from 3.50% to 3.75% as of December 31, 2025[104]. - Macroeconomic fluctuations, including geopolitical risks and inflationary pressures, may adversely affect the financial performance of the Merchant Investment business[100]. - Changes in U.S. trade policies and tariffs may impact the financial condition and results of operations of the Merchant Investment business[101]. Investment and Risks - The Merchant Investment business may face significant risks, including the potential loss of entire investments in special purpose vehicles (SPVs) if business combinations are not completed within 24 months of the SPAC's IPO[76]. - The historical financial performance of the Merchant Investment business is not indicative of future results, as future performance will be influenced by market conditions and investment decisions[77]. - The Merchant Investment business's revenue is dependent on the performance of its investments, which may be illiquid and subject to significant risks, including concentration in specific companies or industries[79]. - The use of leverage in the Merchant Investment business may enhance potential returns but also magnify losses, with no assurance that leverage will be available on acceptable terms[88]. - The company may enter into repurchase and reverse repurchase agreements, which involve risks such as potential losses if the seller defaults on repurchase obligations[90]. - The regulatory environment for the Merchant Investment business is subject to change, which could increase operational costs and adversely impact profitability[93]. - The company may utilize financial instruments for hedging purposes, but the effectiveness of these strategies is not guaranteed and may result in poorer overall performance[96]. - The Merchant Investment business may invest in distressed securities, which involve substantial financial, legal, and business risks that can lead to significant losses[97]. - Investments in non-U.S. issuers expose the Merchant Investment business to additional risks, including currency exchange risks and less regulatory oversight compared to U.S. markets[98]. Corporate Governance and Structure - As of March 16, 2026, approximately 36.7% of the voting power of the company's common stock is controlled by officers, directors, and major stockholders, which may affect corporate governance[139]. - The company is classified as a "smaller reporting company," which allows for reduced disclosure requirements, potentially making it more challenging for investors to analyze financial prospects[141]. - The company has a cash dividend policy of not paying cash dividends, with no dividends paid since January 30, 1989, focusing on long-term growth objectives[166]. - The company’s Board of Directors has ultimate oversight of its risk management, including cybersecurity risks, with regular updates from senior management[153]. Spin-off and Separation - LGL Group completed the spin-off of M-tron Industries, Inc. on October 7, 2022, distributing 100% of MtronPTI's common stock to LGL's shareholders[30]. - Following the spin-off, MtronPTI became an independent publicly traded company listed under the symbol "MPTI" on the NYSE American[209]. - MtronPTI entered into several agreements with LGL to govern their relationship post-separation, including a Separation and Distribution Agreement[210]. - The Tax Indemnity and Sharing Agreement includes covenants related to tax matters for both companies before and after the Distribution[210]. - The spin-off is expected to allow both companies to focus on their core operations and enhance shareholder value[209]. - The distribution of MtronPTI common stock is intended to be tax-free under Section 355 of the Internal Revenue Code, but there is no guarantee that it will qualify for such treatment[145]. - The company may not achieve the expected benefits from its separation into a stand-alone entity, which could adversely affect its business and financial condition[142]. - The Separation may lead to substantial tax liabilities for the company and its stockholders if it is determined to be taxable, potentially treating the distribution as a taxable dividend[143].