Energy and Sustainability - The Corporation's operations utilize 89% zero-carbon electricity and over 50% renewable energy at its New York State sites[34]. - The Corporation aims to achieve 100% carbon neutrality by the end of 2026, adjusting its timeline from 2025 due to renewable energy deployment delays in New York State[36]. - A community solar project at the North Tonawanda facility will produce approximately 9,500,000 kWh of clean electricity annually, enough to power over 1,000 homes[47]. - The Corporation is developing internal frameworks to track energy sourcing and carbon reduction progress, enhancing environmental accountability[36]. - The Corporation's total available power is 196.7 MW, with 141.7 MW from New York sites and 55 MW from the Alabama site[200]. Mining Operations and Financial Performance - For the year ended December 31, 2025, the Corporation had approximately 9,700 active miners under colocation agreements, with self-mining operations being negligible[27]. - The Corporation's largest operating expense is electricity, primarily for powering mining equipment, with natural gas being the largest cost associated with electricity generation[26]. - The Corporation's revenue is significantly influenced by the market value of bitcoins, which is subject to volatility tied to various factors including halving schedules[35]. - The Corporation's profitability is influenced by the hashrate of its miners and network difficulty, which may increase due to industry upgrades and more efficient mining chips[97]. - The Corporation's bitcoin revenue is recognized based on the average bitcoin price on the day of mining, highlighting the volatility of bitcoin prices[212]. - For the twelve-month period ending December 31, 2025, Digi Power mined approximately 34 bitcoins, representing an 82% decrease from approximately 188 bitcoins mined in the twelve-month period ending December 31, 2024[218]. - The decrease in bitcoins mined was attributed to the expansion of the Corporation's hosting and colocation operations agreements to diversify its operations[219]. - The Corporation began to monetize a portion of mined bitcoin in 2022 to fund operating costs and SG&A expenses, a strategy that has continued into 2025[215]. Regulatory and Compliance Challenges - The Corporation's digital currency mining operations are subject to evolving regulations, with potential impacts anticipated in 2026 and beyond[41]. - The Corporation may incur significant compliance costs if required to register as a Money Services Business (MSB) under FinCEN regulations[74]. - Future regulatory obligations could lead to substantial expenses, potentially requiring the company to alter or cease its bitcoin mining activities, adversely affecting operations[139]. - The evolving regulatory landscape surrounding bitcoin and digital assets may impose additional compliance costs, impacting the company's financial condition[141]. - The company must monitor state-level regulations, such as California's Digital Financial Assets Law, which requires registration for certain digital financial asset activities, with an effective date extended to July 1, 2026[138]. Competition and Market Position - The Corporation faces competition from established data center operators and other bitcoin mining companies, requiring strategic access to land, power, and engineering talent[38]. - The Corporation faces significant competition in the HPC and AI services market, which may adversely affect occupancy and rental rates of its data centers[78]. - The Corporation's expansion into AI and HPC may divert resources from core bitcoin mining operations, potentially limiting power capacity for mining[79]. - The Corporation's business model may need to evolve to stay current within the rapidly changing digital assets industry[75]. Cybersecurity and Operational Risks - The Corporation has implemented an Information Security Management System (ISMS) to monitor and govern its information security[187]. - The Audit Committee oversees cybersecurity risks and is involved in strategic decisions related to cybersecurity initiatives[192]. - The IS Lead, who is also the President, is responsible for assessing and managing cybersecurity risks within the Corporation[193]. - The Corporation has not been materially impacted by cybersecurity threats to date, but acknowledges the evolving nature of cyber risks[196]. - The Corporation's cryptocurrency inventory is exposed to cybersecurity threats, with risks of hacks and unauthorized access to digital wallets[114]. Financial Position and Shareholder Returns - For the year ended December 31, 2025, the Corporation reported a net loss from continuing operations of approximately $28.4 million, indicating challenges in achieving consistent profitability[176]. - The Corporation does not currently pay cash dividends and does not anticipate doing so in the near future, meaning shareholders will not receive returns unless they sell their shares[170]. - The Corporation raised approximately $6.6 million in a private placement on January 31, 2025, issuing 2,503,601 SV Shares and warrants for an exercise price of $3.66 per SV Share[204]. - The Corporation's SV Shares are subject to market volatility influenced by external factors, including government regulation and cryptocurrency market movements[171]. Management and Strategic Direction - The Corporation's management team has experience in the cryptocurrency industry, which is crucial for its growth and success, but conflicts of interest may arise due to their involvement in other ventures[167]. - The Corporation's strategic pivot towards AI-ready infrastructure reflects its belief in long-term value creation driven by ownership of secured power and scalable infrastructure[58]. - The Corporation's growth strategy includes diversification into operating data centers to drive the expansion of sustainable energy assets while maintaining bitcoin mining and hosting activities[75]. - The Corporation's operations and growth depend on its ability to attract and retain key personnel, and failure to do so could negatively impact its competitive position[168]. Market and Economic Factors - Geopolitical events may lead to rapid price fluctuations in cryptocurrencies, impacting the Corporation's inventory value[124]. - Cryptocurrency market prices are subject to momentum pricing, which can lead to increased volatility and affect the value of mined cryptocurrencies[107]. - The Corporation's operations may be impacted by changes in U.S. trade policies, including increased import tariffs on mining equipment[135]. - The Corporation may be subject to evolving tax liabilities and consequences that could reduce profitability, particularly in the rapidly changing cryptocurrency regulatory environment[178].

Branch Operations - As of December 31, 2025, the Bank operated eight branch offices, including seven in Connecticut and one in New York[19]. - The company operates 8 branches, primarily in Connecticut and New York, making it vulnerable to economic conditions in these specific regions[128]. Capital Structure and Financial Strategy - In 2025, the Company undertook a substantial transformation of its capital structure, governance, management team, and business strategy, including significant capital raising transactions[20]. - The Bank aims to increase relationship-based deposits from target clients, enhancing deposit pricing and treasury management capabilities[29]. - The Bank's investment strategy emphasizes liquidity, diversification, and capital preservation, aligning with capital and risk management objectives[32]. - The Bank is required to maintain minimum capital ratios of 10.0% common equity Tier 1, 10.0% Tier 1 capital, 11.5% total capital, and 9.0% leverage as per the Formal Agreement with the OCC[98]. - The company has not paid dividends since 2020, and its ability to do so in the future is restricted by regulatory requirements and the need for compliance with capital plans[151][150]. Regulatory Compliance and Risk Management - The Bank entered into a Formal Agreement with the OCC in January 2025, requiring specified actions to strengthen capital, governance, and risk management, which will influence management priorities in 2026[21][49]. - The Bank is subject to a Formal Agreement requiring extensive corrective actions in areas such as capital planning and BSA/AML risk management, which could adversely affect its operations[68]. - The Bank's designation as "troubled condition" may increase supervisory scrutiny and limit its ability to pursue acquisitions or new business activities[72]. - Compliance with evolving consumer privacy and data security regulations may increase costs and affect the Bank's reputation[80]. - The existence of control deficiencies has been identified as a material weakness, which could adversely affect the Bank's ability to report financial information accurately[108]. Financial Performance - For the year ended December 31, 2025, the Company reported a net loss of $12.7 million, an improvement from a net loss of $39.9 million in 2024[205]. - Net interest income decreased to $19.1 million in 2025 from $20.1 million in 2024, with a net interest margin decrease to 2.04% from 2.14%[211]. - Non-interest income increased to $10.5 million in 2025 from $8.4 million in 2024, driven by higher fee income from digital payments[214]. - Non-interest expense rose to $40.8 million in 2025 from $32.1 million in 2024, attributed to higher compensation and transition-related costs[215]. - The provision for credit losses was significantly reduced to $1.5 million in 2025 from $12.5 million in 2024, reflecting lower net charge-offs and reserve requirements[212]. Loan and Deposit Trends - Gross loans receivable decreased by $114.9 million, or 16.2%, to $592.6 million as of December 31, 2025, reflecting reduced loan originations and portfolio runoff[166]. - Total deposits were $965.8 million at December 31, 2025, slightly down from $966.6 million at the end of 2024, with significant reductions in brokered deposits and uninsured deposits[193]. - The net loan-to-deposit ratio was 60.6% as of December 31, 2025, down from 72.4% in 2024, indicating higher liquidity[168]. - Commercial real estate loans represented 58.4% of total gross loans as of December 31, 2025, while commercial and industrial loans increased to 24.8%[167]. Operational Risks and Challenges - The Bank's remediation efforts are complex and ongoing, with potential delays or ineffectiveness posing risks to its financial condition[76]. - The reliance on third-party program managers exposes the Bank to significant risks, including potential negligence or misconduct that could lead to material liabilities[94]. - Cybersecurity threats pose significant risks to the Bank's operations, with potential for financial losses and reputational damage from successful attacks[116]. - The development and use of artificial intelligence (AI) present risks including safety, privacy, compliance, and potential legal liabilities, which could increase costs and impact business operations[118][119]. - The company faces intense competition from various financial institutions, including money-center banks and fintechs, which may affect its growth and profitability if it cannot compete effectively on service and technology[120]. Asset Management - Total assets increased by $75.5 million, or 7.5%, to $1.09 billion as of December 31, 2025, primarily due to a $140.2 million increase in investment securities[162]. - Total investments increased by $140.2 million, or 166.1%, to $224.7 million as of December 31, 2025, reflecting purchases of available-for-sale securities[165]. - Loans held for sale increased to $24.5 million at December 31, 2025, compared to $15.7 million at the end of 2024, primarily consisting of credit card receivables[180]. Employee and Management Changes - As of December 31, 2025, the Company had 107 full-time employees, with significant personnel changes made to support strategic repositioning efforts[36][37]. - The replacement of key leadership roles in 2025 is critical for the execution of the Bank's strategy and remediation efforts[85].

Financial Performance - Total revenue for the year ended December 31, 2025 was $537,080, a decrease of 40% compared to $893,991 in 2024[103] - Cost of revenue decreased by 54% to $147,288 in 2025 from $319,108 in 2024[104] - Gross profit decreased to $389,792 in 2025, with an improved gross margin of 73% compared to 64% in 2024[105] - Research and development expenses were $4,960,566 in 2025, down 15% from $5,839,033 in 2024[106] - Sales and marketing expenses decreased by 42% to $3,820,509 in 2025 from $6,581,333 in 2024[107] - General and administrative expenses were $5,107,535 in 2025, a decrease of 23% from $6,650,561 in 2024[108] Impairment and Losses - The company recorded an impairment loss on intangible assets of $2,640,280 in 2025 due to the closure of its subsidiary in Germany[110] Cash Flow and Liquidity - Cash used in operating activities improved to $10,979,587 in 2025 from $17,329,254 in 2024, a reduction of $6,349,667[114] - As of December 31, 2025, the company had $889,091 in cash and cash equivalents, down from $6,235,670 in 2024[112] - The company plans to fund its cash flow needs through current cash on hand and future debt and/or equity financings, including a completed $6 million preferred stock offering[120] Accounting and Estimates - The cumulative effect of the transition from IFRS to U.S. GAAP resulted in an adjustment to the opening accumulated deficit from $69,328,021 to $67,092,885, with a total adjustment of $2,235,136[134] - The Company prepares its financial statements in accordance with U.S. GAAP, requiring ongoing evaluation of estimates and judgments[124] - The provision for expected credit losses on trade receivables is estimated based on historical information and current economic trends, indicating sensitivity to changes in circumstances[130][131] - Significant estimates in the impairment test for indefinite-lived intangible assets include discount rates and revenue growth rates, which could materially affect the assessment of fair value[129] - The estimated useful lives of property and equipment are reviewed annually and may be adjusted based on physical wear and tear or obsolescence[125] - The Company applies judgment in estimating the fair value of financial instruments when there is no active market, which may impact the reported values[128] - The Company uses a Black-Scholes model to estimate the fair value of share-based payments, relying on historical stock price volatility[127] Going Concern and Financial Condition - The assessment of the Company's ability to continue as a going concern is critical, considering events or conditions that may create significant uncertainty[136] - The Company does not have any off-balance sheet arrangements that could materially affect its financial condition[132]

Business Transition and Market Focus - Smart Powerr Corp. is transitioning to an energy storage integrated solution provider, targeting high-growth potential industries such as large-scale photovoltaic and wind power stations[19][25]. - The company is exploring opportunities in new market segments, including smart energy cities and remote islands without electricity[19][25]. - The company plans to pursue disciplined expansion strategies in market areas it currently does not serve, focusing on energy storage technologies[19][25]. - The company targets mid- to large-size enterprises in high energy-consuming sectors, including steel and nonferrous metal mills with over 3 million tons of production capacity per year[122]. - The company is transforming into an energy storage integrated solution provider, focusing on high growth potential markets[113]. Financial Performance and Capital Structure - The company has a registered capital of $29.80 million for its subsidiary Shanghai TCH, which is involved in energy-saving solutions[24]. - The company relies on dividends from its PRC subsidiaries for cash needs, and any limitations on these payments could restrict its ability to meet financial obligations[39]. - The company does not anticipate paying dividends in the foreseeable future, as it intends to retain earnings for business operations and expansion[42]. - The PRC government may impose stricter capital controls, affecting the ability to remit foreign currency for dividends and other distributions[44]. - The company may require additional financing to support operations, which could lead to unfavorable terms or dilution of stockholder equity[142][151]. Regulatory Environment and Compliance - The company is not subject to cybersecurity review as it does not collect personal information from over one million users, mitigating certain regulatory risks[28]. - Recent regulatory changes in China require domestic companies to fulfill filing procedures with the CSRC for overseas listings, which may impact future offerings[30][29]. - The company has not faced inquiries or sanctions from the CSRC regarding previous offerings, indicating a stable regulatory standing[28][30]. - The company has obtained requisite licenses and permits from PRC government authorities that are material for business operations, and is not currently required to seek approval from the CSRC or CAC for offering securities to foreign investors[63]. - The CSRC's recent regulations emphasize the need for stricter administration over illegal securities activities and supervision of overseas listings by Chinese companies[53]. Market and Industry Trends - The waste energy recycling industry is focused on power-intensive manufacturing, with significant demand from sectors like steel and cement due to China's rapid industrialization[93]. - China is the world's largest consumer of energy, leading to increased electricity demand and environmental challenges, prompting government action plans for pollution control[96]. - The output value of China's energy conservation and environmental protection industry is expected to exceed RMB 12.3 trillion by 2023[101]. - The scale of China's energy conservation and environmental protection industry is expected to exceed RMB 19 trillion by 2027[103]. - The electrochemical energy storage market is expected to expand from 3.28GW at the end of 2020 to over 30GW by 2025, with a compound annual growth rate of more than 55%[117]. Operational Risks and Challenges - The company faces risks from natural disasters, economic changes, and competition that could adversely affect demand for its projects and overall financial performance[37]. - The company relies on the availability of waste energy from customers, which directly impacts its power generation capacity and revenue[140]. - The company may face risks related to natural disasters and health epidemics, which could disrupt operations and adversely affect financial results[169][170]. - The PRC waste energy recycling market is currently fragmented but competitive, with increasing competition expected, which may adversely affect revenue and profitability[156]. - Manufacturing delays in assembling waste energy recycling projects could harm the company's reputation and result in lost sales[155]. Legal and Tax Considerations - The company is subject to income taxes in the U.S. and foreign jurisdictions, with potential changes in tax laws that could adversely affect after-tax income and overall financial condition[162]. - If classified as a "resident enterprise," the company could face a 25% tax rate on worldwide income, affecting net income and dividends[215]. - PRC regulations may delay or prevent the company from making loans or additional capital contributions to its PRC operating companies, adversely affecting liquidity and business expansion[216]. - Loans to PRC operating companies are subject to statutory limits and must be registered with SAFE, impacting the company's ability to finance activities[216]. - The company's ability to capitalize its PRC operations may be negatively affected if government approvals for capital contributions are not received[216]. Strategic Partnerships and Projects - The company has established a partnership with Jiangsu Tianyu Energy and Chemical Group Co., Ltd. for the construction of waste heat power generation stations[79]. - Xi'an TCH has entered into a lease agreement for a 12MW Biomass Power Generation system with Pucheng, generating a minimum monthly revenue of $279,400 (RMB 1,900,000) for a term of 15 years[71]. - Zhonghong entered into a Cooperative Agreement to design, build, and maintain a 25 MW CDQ system for Chengli, with energy saving fees to be paid by Chengli[81]. - The Tianyu Project involves two 25 MW CDQ systems, with an energy saving fee of RMB 0.534 ($0.087) per kilowatt hour, and the construction of the Xuzhou Tian'an Project was completed by Q2 2020[83]. - The Transfer Agreement with Zhongtai involved a payment of RMB 167,360,000 ($25.77 million) for the CDQ Waste Heat Power Generation Project, with a recorded loss of $2.82 million in 2016[90].

Uranium Sales and Revenue - enCore Energy Corp. completed uranium sales totaling 655,000 pounds of U3O8 for an average sales price of $65.89 per pound during the year ended December 31, 2025[548]. - Revenue from uranium sales for the year ended December 31, 2025, was $43,155, a decrease of 26% from $58,334 in 2024[563]. - The company sold 655,000 lbs of uranium in 2025, a 9% decrease from 720,000 lbs in 2024[565]. - The realized sales price per pound of uranium decreased by 19% to $65.89 in 2025 from $81.02 in 2024[565]. - Cost of sales for uranium decreased to $33,463, related to the sale of 655,000 pounds at a weighted average cost of $51.09 per pound, compared to $65,541 for 720,000 pounds at $91.03 per pound in 2024[566]. - Total sales commitments for uranium are projected at 7,950,000 pounds from 2026 to 2030[581]. Extraction Operations and Capacity - The company commenced uranium extraction at the Rosita and Alta Mesa projects in South Texas in 2023, focusing on building extraction capacity[535]. - The company commenced uranium extraction operations at the Rosita project in 2024, with a production capacity of 800,000 lbs U3O8 per year[552]. - The Alta Mesa project has a production capacity of 1.5 million lbs U3O8 per year, with a total elution, precipitation, drying, and packaging capacity of 2.0 million lbs U3O8 per year[552]. - The company’s strategy includes developing a series of uranium extraction facilities in South Texas and future exploration projects in South Dakota and Wyoming[535]. - The company increased its active drill rigs in South Texas from 6 at the beginning of 2024 to 30 by December 31, 2025[555]. Financial Performance and Expenses - Operating expenses, excluding stock option expense, increased by 18% to $71,254 in 2025 from $60,188 in 2024[563]. - Operating expenses increased to $71,254 in 2025 from $60,188 in 2024, driven by increased extraction activities and professional fees[566]. - Interest income decreased to $1,715 in 2025 from $2,476 in 2024, primarily due to a decrease in cash held[566]. - Interest expense increased to $3,392 in 2025 from $1,735 in 2024, mainly due to expenses related to Convertible Senior Notes[566]. - The company recognized a loss of $5,681 on unrealized marketable securities in 2025, compared to a loss of $2,711 in 2024[566]. - Cash and cash equivalents increased to $52,403 as of December 31, 2025, from $39,701 in 2024, with working capital rising to $96,134 from $57,334[572]. - Net cash used in operating activities decreased by $20,212 to $24,992 in 2025, compared to $45,204 in 2024[577]. - Net cash used in investing activities increased to $46,224 in 2025 from $29,990 in 2024, driven by purchases of marketable securities and property[578]. - The company issued $115,000 in Convertible Senior Notes on August 22, 2025, with a 5.5% annual interest rate[574]. Market and Regulatory Environment - The global demand for uranium is projected to require approximately 180 to 225 million pounds annually, with a significant gap between demand and primary supply[536]. - The U.S. Department of Energy announced approximately $2.7 billion in contract awards to expand domestic uranium enrichment capacity for both low-enriched uranium and high-assay low-enriched uranium[540]. - The U.S. Government has entered into a strategic partnership with Westinghouse Electric Company and others to accelerate nuclear power deployment, supported by an expected $80 billion investment[541]. - The U.S. Senate is preparing to vote on the Sanctioning Russia Act of 2025, which could impact uranium supply chains[540]. - The U.S. Army has identified nine military installations as potential sites for microreactor power plants, indicating a growing interest in nuclear energy solutions[540]. Mineral Resources - Total measured and indicated mineral resources are 30.94 million lbs U3O8, while total inferred mineral resources are 20.54 million lbs U3O8[552].

Clinical Trials and Regulatory Status - NurOwn® has completed Phase 3 clinical trials for ALS and Phase 2 trials for PMS, with top-line data announced on November 17, 2020, and March 24, 2021, respectively[14]. - The FDA issued a refusal to file (RTF) letter for the Biologics License Application (BLA) for NurOwn® on November 10, 2022, prompting a Type A meeting to discuss the RTF content[15]. - The Advisory Committee voted on September 27, 2023, with 17 voting no, one yes, and one abstention, indicating that NurOwn® did not demonstrate substantial evidence of effectiveness for mild to moderate ALS[15]. - The BLA for NurOwn® was withdrawn on November 3, 2023, in coordination with the FDA, and is considered a withdrawal without prejudice[15]. - A Special Protocol Assessment (SPA) request for a planned Phase 3b clinical trial was submitted to the FDA on February 23, 2024, and written agreement on the trial design was received on April 9, 2024[32]. - The FDA issued a Refusal to File (RTF) letter regarding the BLA for NurOwn®, citing insufficient evidence of effectiveness and CMC-related items[50]. - Following the RTF, the company requested a Type A meeting with the FDA to discuss the letter's contents and potential pathways for regulatory review[52]. - The company plans to file the BLA for NurOwn® over Protest to expedite the review process[54]. - The Phase 3 trial enrolled a broad set of participants, including those with advanced ALS, which may have impacted the sensitivity of the ALSFRS-R[51]. - The FDA's Advisory Committee voted 17 against, 1 in favor, and 1 abstention regarding the effectiveness of NurOwn® for treating mild to moderate ALS on September 27, 2023[66]. - The company announced the withdrawal of the BLA for NurOwn® on November 3, 2023, which was coordinated with the FDA and considered a withdrawal without prejudice[66]. - The company received written agreement from the FDA on April 9, 2024, under a Special Protocol Assessment (SPA) for the design of a Phase 3b trial of NurOwn® in ALS[66]. Clinical Efficacy and Safety - Completed two Phase 1/2 open-label trials of NurOwn® in ALS patients, demonstrating tolerability and preliminary signs of activity[33]. - Phase 2 trial involved 48 patients randomized 3:1 to receive NurOwn® or placebo, with no discontinuations due to adverse events[36]. - NurOwn® treatment showed a higher response rate in the ALS functional rating scale compared to placebo, with significant improvements in muscle volume and pulmonary function[35]. - In the Phase 3 trial, 32.6% of NurOwn® participants met the primary endpoint of at least a 1.25 points per month improvement in ALSFRS-R slope, compared to 27.7% for placebo[48]. - A statistically significant treatment difference (p=0.050) was observed in a pre-specified subgroup with ALSFRS-R baseline scores of at least 35, showing an average change of -1.56 on NurOwn® versus -3.65 on placebo[51]. - Clinical analyses indicated that NurOwn® treatment resulted in significant increases in neurotrophic factors and reductions in inflammatory markers, correlating with functional improvements[44]. - The Phase III trial for NurOwn® did not meet its overall primary endpoint, but patients with ALSFRS scores above 35 showed a two-point higher score than those on placebo at the trial's end[166]. - The Phase 2 clinical trial of NurOwn® for PMS showed that 80% of the 20 enrolled patients completed the study, with no deaths or serious adverse events related to MS worsening[77]. - 38% of NurOwn® treated patients demonstrated at least a 10-point improvement in the MS Walking Scale (MSWS-12) from baseline to week 28[81]. - 67% of NurOwn® treated patients exhibited at least a 3-point improvement in the Symbol Digit Modality Test (SDMT), indicating enhanced cognitive processing[81]. Technology and Manufacturing - The NurOwn® technology platform utilizes autologous bone marrow-derived mesenchymal stem cells (MSCs) to secrete neurotrophic factors, promoting neuronal survival and improving neurological function[22]. - The proprietary technology and manufacturing process for NurOwn® are conducted in compliance with current Good Manufacturing Practice[24]. - The company has developed a validated cryopreservation process for MSC, allowing multiple doses of NurOwn® from a single bone marrow harvest[56]. - The company contracted with City of Hope and Dana Farber Cancer Institute for the manufacturing of clinical supplies of NurOwn® for the Phase 3 clinical study[57]. - The company announced a partnership with Catalent for the manufacturing of NurOwn® if FDA approval is received, with technology transfer completed in December 2021[58][59]. - The company has improved the efficiency and stability of NurOwn® production, allowing centralized manufacturing and distribution to clinical trial sites[106]. Financial and Funding - The company received a total of $15,912,390 in non-dilutive funding from the California Institute for Regenerative Medicine (CIRM) for its Phase 3 study of NurOwn® for ALS[85]. - The company employs 20 individuals across the United States and Israel, with a focus on recruiting and retaining talent to support its clinical development goals[20]. - The company holds approximately 30 granted patents and has pending applications across key global markets, including the U.S., Europe, and South America[88]. - The U.S. Patent & Trademark Office granted a Notice of Allowance for a patent covering proprietary exosome technology, expected to provide protection until April 10, 2039[89]. - The company maintains a commercial relationship with Ramot at Tel Aviv University, paying royalties of 3%-5% on net sales derived from licensed intellectual property[132]. Market and Regulatory Environment - The company aims to secure regulatory approval for NurOwn® in ALS, with a potential Biologics License Application (BLA) submission following the completion of its Phase 3b clinical trial[113]. - NurOwn® has been designated as an Advanced Therapy Medicinal Product (ATMP) by the European Medicines Agency (EMA)[129]. - The FDA regulates the approval process for biological products, which requires substantial time and financial resources, with no certainty of timely approvals for stem cell therapies[138]. - The FDA has 60 days from receipt of a Biologics License Application (BLA) to determine if the application will be accepted for filing, which is based on whether it is sufficiently complete for substantive review[147]. - The FDA targets ten months for the initial review of standard applications for original BLAs and six months for applications granted priority review, although these timelines are not always met[150]. - The approval process may require additional clinical data or other information, and the FDA may issue a Complete Response Letter detailing deficiencies in the BLA[154]. - The company must incur significant expenditures in training, record keeping, production, and quality control to ensure compliance with current Good Manufacturing Practice (cGMP) requirements[152]. - Fast Track designation allows the FDA to review sections of the marketing application on a rolling basis if certain conditions are met, potentially expediting the approval process[161]. - The company must submit annual safety reports detailing adverse events identified during clinical trials to the FDA[143]. - The FDA may require Phase 4 testing to further assess a biologic's safety and effectiveness after BLA approval[156]. - The company must develop methods for testing the identity, strength, quality, and purity of the final product during the manufacturing process[144]. - The FDA may grant orphan designation to a drug intended to treat a rare disease affecting fewer than 200,000 individuals in the U.S., providing benefits such as grant funding and tax credits[158]. Legislative and Market Challenges - The Act for ALS, signed into law on December 23, 2021, authorized up to $100 million per year for 5 years, totaling $500 million for research on neurodegenerative diseases like ALS[165]. - The FDA's Action Plan for Rare Neurodegenerative Diseases, released on June 23, 2022, outlines a five-year strategy to enhance scientific achievement and innovation in ALS drug development[166]. - Increased funding through government programs, such as ACT for ALS, has elevated focus on ALS research and expedited therapy development[169]. - The company faces uncertainty regarding insurance coverage and reimbursement for newly approved products, which could limit marketability and revenue generation[179]. - Legislative changes focused on cost containment and price transparency may impact the company's ability to sell stem cell therapies profitably[182]. - The pharmaceutical industry is expected to face pricing pressures due to managed healthcare trends and legislative proposals, which could adversely affect the company's operations[184]. - Third-party payors increasingly require pre-approval for new therapies and may demand predetermined discounts, impacting the reimbursement landscape for stem cell therapies[185]. - In the EU, pricing and reimbursement rules significantly influence pharmaceutical product pricing, with some countries requiring clinical trials to demonstrate cost-effectiveness[186]. - The downward pressure on healthcare costs has created high barriers for new product entry, with cross-border imports from low-priced markets affecting local pricing[189]. - Compliance with various healthcare laws, including the federal Anti-Kickback Statute and False Claims Act, is critical to avoid penalties and ensure operational integrity[190]. - The Patient Protection and Affordable Care Act has increased minimum Medicaid rebates and imposed mandatory discounts for Medicare Part D beneficiaries, affecting reimbursement for medical products[207]. - The Budget Control Act of 2011 mandates up to 2% reductions in Medicare payments to providers annually, effective through 2031 unless Congress intervenes[208]. - The Inflation Reduction Act of 2022 introduces a $2,000 out-of-pocket cap for Medicare Part D beneficiaries starting in 2025 and allows the government to negotiate price caps for certain high-cost drugs[212]. - Legislative changes may lead to additional reductions in Medicare funding and affect pricing for product candidates awaiting regulatory approval[208]. - The company is monitoring developments related to the 340B drug pricing program, which may expand patient access to discounted medications[211]. - Increased scrutiny on specialty drug pricing practices may lead to new transparency requirements and cost control measures in the healthcare industry[209]. - The company may incur financial liabilities under the new provisions of the Inflation Reduction Act, particularly regarding drug price increases[212]. - Ongoing litigation challenges the constitutionality of the Medicare drug price negotiation program, with uncertain implications for the company's operations[212].

Company Overview - The company develops AI-powered laboratory-based blood tests for early detection and prevention of cancers and chronic diseases [280]. - The OneTest brand includes two test families: OneTest for Cancer (MCED) and OneTest for Longevity, launched in February 2026 [281]. Financing Activities - On February 9, 2026, the company completed a second closing of bridge financing, issuing a secured convertible promissory note of $275,000 and a warrant for 62,500 shares [283]. - The company raised additional funding of $5 million through a private placement and $275,000 in convertible debt and bridge financing after December 31, 2025 [308]. - The company entered into a Note Purchase Agreement on November 17, 2025, for a secured convertible promissory note of $295,000 and a warrant for 62,500 shares of common stock, totaling a purchase price of $250,000 [313]. - The company also entered a Preferred Purchase Agreement on November 17, 2025, to sell up to $40,000,000 in series E convertible preferred stock at $1,000 per share [322]. - The company issued convertible promissory notes totaling $712,256 in May and November 2025, with net proceeds of approximately $668,472 [331]. - The company has a most favored nation provision in both agreements, ensuring that any more favorable terms offered to other investors will also be extended to the current investors [320][330]. Stock and Equity - The series E convertible preferred stock has a stated value of $1,098.90 per share, with a preferred return of 9% per annum, increasing to 15% upon an event of default [285]. - On February 19, 2026, the company issued 5,000 shares of series E convertible preferred stock for $5,000,000, net of fees [287]. - A total of 846,368 shares of series A preferred stock were converted into common stock on February 19, 2026 [288]. - The Preferred Warrant can be exercised until November 30, 2026, at an exercise price of $11.42 [326]. Financial Performance - The company’s financial performance is influenced by factors such as capital access, technology acquisition costs, and marketing expenses [291]. - Total revenues increased by $292,790, or 16.71%, to $2,045,133 for the year ended December 31, 2025, compared to $1,752,343 for the year ended December 31, 2024 [296]. - Revenues from OneTest increased by $312,826, or 20.98%, to $1,803,707 for the year ended December 31, 2025, driven by a 35% increase in Premium Tests sold [296]. - Gross profit increased by $244,230, or 67.78%, to $604,541 for the year ended December 31, 2025, with a gross margin of 29.56% compared to 20.56% in 2024 [301]. - Sales, general and administrative expenses decreased by $1,416,744, or 29.77%, to $3,342,843 for the year ended December 31, 2025, resulting in a significant improvement in efficiency [302]. - Research and development expenses decreased by $669,212, or 53.04%, to $592,569 for the year ended December 31, 2025, as a result of reduced spending on major studies conducted in 2024 [303]. - Net loss decreased by $1,812,846, or 32.65%, to $3,738,821 for the year ended December 31, 2025, compared to a net loss of $5,551,667 in 2024 [306]. Cash Flow - Cash and cash equivalents at the end of the year were $1,025,987, down from $1,784,009 at the beginning of the year [310]. - Net cash used in operating activities was $1,919,720 for the year ended December 31, 2025, an improvement from $2,598,785 in 2024 [310]. - Net cash provided by financing activities was $1,161,698 for the year ended December 31, 2025, compared to $293,333 in 2024, reflecting successful capital-raising efforts [312]. Regulatory and Compliance - The company qualifies as an "emerging growth company" under the JOBS Act, allowing it to rely on certain disclosure exemptions [292]. - The company will remain an emerging growth company until it meets specific revenue or market capitalization thresholds [293]. - The company is required to file a registration statement with the SEC within 15 days of the first closing, registering at least 5,050,000 shares of common stock [327]. - The company has no off-balance sheet arrangements that could impact its financial condition or results of operations [339]. Revenue Recognition - Revenue recognition follows ASC Topic 606, with revenue recognized when customers obtain control of goods or services, reflecting expected consideration [340]. - Revenue from OneTest is recognized upon analysis of returned serum specimens, with minimal adjustments for returns or refunds due to their rarity [340]. Derivative Liabilities - The company evaluated convertible notes with embedded conversion features, which are classified as derivative liabilities under ASC 815 due to their variable conversion price [342]. - Warrants are assessed for equity or liability classification based on specific terms, with those meeting equity criteria recorded as additional paid-in capital [343]. - Changes in fair value of liability-classified warrants are recognized in the statement of operations each period [344].

Business Operations and Strategy - Spruce Power operates approximately 84,000 home solar assets and customer contracts, generating revenues primarily through long-term customer agreements[18]. - The company completed the acquisition of approximately 2,400 home solar assets from a regulated utility company, with an average remaining contract life of about 11 years[22]. - Following the NJR Acquisition, Spruce Power's portfolio includes 14 portfolios of home solar assets with a combined capacity of approximately 509 MWdc[24]. - Spruce Power's corporate strategy focuses on subscription-based solutions for distributed energy resources, aiming to leverage its existing customer base and servicing platform[25]. - The company aims to grow customer revenues by focusing on channels with the lowest customer acquisition costs, including acquiring existing systems and selling additional services[26]. - The company has a dedicated M&A team that focuses on acquiring high-quality portfolios of solar energy systems with existing long-term contracts[29]. - The company completed the SEMTH Acquisition in March 2023, acquiring approximately 22,500 customer contracts, and the Tredegar Acquisition in August 2023, acquiring 2,400 home solar assets and contracts[80]. Financial Performance - Revenues increased by $29.7 million, or 36%, to $111.8 million in 2025 compared to 2024, driven by SREC revenue and incremental SLA revenue from the NJR Acquisition[187]. - Net loss attributable to stockholders decreased to $26.0 million in 2025 from $70.5 million in 2024, representing a 63% improvement[186]. - Cost of revenues for operations and maintenance decreased by $6.8 million, or 41%, to $9.8 million in 2025 due to operational efficiencies[189]. - Interest expense increased by $10.7 million, or 27%, to $50.9 million in 2025, primarily due to higher outstanding non-recourse debt[194]. - The company reported net losses of $26.0 million for the year ended December 31, 2025, compared to $70.5 million for 2024, indicating ongoing financial challenges[131]. - The company has $695.5 million of long-term debt outstanding as of December 31, 2025, primarily consisting of variable rate debt, which may increase interest expenses if rates rise[94]. - The company had negative working capital of $122.9 million as of December 31, 2025, primarily due to the maturity of the SP1 Facility with Silicon Valley Bank[130]. Market and Competitive Environment - The company faces competition from traditional energy companies and other renewable energy firms, which could impact market share[57]. - The company competes with traditional energy companies and other solar firms, which may have greater financial and operational resources, impacting its competitive position[75]. - A material reduction in the retail price of traditional utility-generated electricity could harm the company's ability to offer competitive pricing and maintain customer growth[79]. - The company is exposed to risks related to the creditworthiness of customers, which may lead to payment delinquencies on accounts receivable[59]. - The company is subject to regulatory risks that could impact the purchase and use of solar energy systems[59]. Risks and Challenges - The company has a history of losses and anticipates incurring significant expenses and continuing losses in the future[59]. - The company may not realize anticipated benefits from past or future investments and acquisitions, which could disrupt operations[57]. - The company is subject to evolving data privacy and security laws, which could result in increased operational costs and potential liability[123]. - The company is exposed to legal risks, including potential claims related to product liability and regulatory compliance, which could result in substantial costs[108]. - The company may incur unforeseen costs for maintenance, repair, and removal of solar energy systems, especially if they are damaged by natural disasters beyond its control[70]. - The company faces challenges in attracting and retaining qualified personnel, which is crucial for executing its global business strategy[93]. - The company is subject to the risks of climate change, which could adversely affect solar energy production and overall business operations[69]. Regulatory and Compliance Issues - Federal, state, and local government incentives, including the Investment Tax Credit (ITC), support Spruce Power's business model by lowering customer costs[47]. - The Inflation Reduction Act, enacted in August 2022, includes initiatives that enhance the clean energy industry, although potential adverse actions could impact the business[48]. - Changes in laws and regulations regarding rebates, tax incentives, and net metering could adversely affect the demand for solar energy systems and the company's financial performance[115]. - The company has received subpoenas from state attorneys general regarding sales, marketing, billing, and operations practices, which may result in fines or penalties[125]. - The company is not currently regulated as a utility but may face future regulatory challenges that could increase operating costs and restrict business operations[116]. Cybersecurity and Operational Risks - Cybersecurity incidents pose a risk to the company, as unauthorized access or data breaches could harm its reputation and financial condition[101]. - The company has established a comprehensive cybersecurity risk management program integrated into its overall enterprise risk management framework[151]. - The Audit Committee of the Board of Directors receives regular updates on cybersecurity matters and oversees the company's cybersecurity policies and practices[152]. - The company maintains cybersecurity insurance, but costs related to cybersecurity threats may not be fully insured[157]. - The company recognizes the importance of managing material risks associated with cybersecurity threats, including operational risks and data privacy violations[150]. Shareholder and Stock Performance - The average closing price of the company's common stock was below $1.00 per share for 30 consecutive trading days in 2022 and 2023, leading to potential delisting risks from the NYSE[137]. - The company may issue additional shares of common stock without stockholder approval, which could dilute existing shareholders' interests[140]. - The company has provisions in its Certificate of Incorporation that could limit stockholder rights and discourage third-party acquisition attempts[142]. - The company has not paid any cash dividends on its common stock to date and does not anticipate declaring any cash dividends in the foreseeable future[164]. - The company approved a share repurchase program for up to $50 million of its outstanding common stock, which was extended to expire on May 15, 2027[167].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-41015 VSee Health, Inc. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or orga ...

Business Combination and Company Overview - VSee Health completed a Business Combination on June 24, 2024, merging with VSee Lab and iDoc, and changed its name to VSee Health, Inc. following the merger [243]. - VSee Lab's telehealth platform offers end-to-end encrypted video streaming and integrates with medical device data and electronic medical records, positioning the company uniquely in the healthcare ecosystem [244]. - iDoc provides high acuity patient care solutions, including neuro-critical care services, to a diverse range of customers, including large hospital systems and correctional facilities [247]. - The telehealth market is rapidly transforming, with significant growth expected as hospital systems seek to enhance their capabilities, indicating a strong future growth potential for VSee Health [253]. - The company aims to leverage industry relationships to expand its customer base, particularly within hospital systems, as telehealth utilization is still in its infancy [254]. - Telehealth solutions currently represent less than 1% of total healthcare spending, indicating substantial room for growth and adoption in the market [256]. - VSee Health's technology solutions are designed to meet healthcare performance and compliance standards, enhancing patient engagement and care integration [257]. - The company is classified as an "emerging growth company," allowing it to take advantage of certain exemptions from reporting requirements applicable to other public companies [250]. Revenue Recognition and Financial Reporting - The Company recognizes revenue in accordance with ASC 606, ensuring that revenue reflects the expected consideration received for goods and services [260]. - Revenue from third-party payors is presented net of an estimated provision for contractual adjustments, with patient revenues net of service credits and expected credit losses [281]. - The Company recognizes revenue for telemedicine services when performance obligations are met, primarily through reimbursement from Medicare, Medicaid, and commercial insurance providers [283][284][285]. - The Company treats each subscription to a specific module as a distinct performance obligation, with revenue recognized over time as services are delivered [271]. - Deferred revenue consists of the unamortized balance of nonrefundable upfront fees, classified as current and non-current based on expected revenue recognition timing [270]. - The Company evaluates the nature of each professional services arrangement to determine the appropriate timing of revenue recognition, ensuring it reflects the transfer of goods or services to the customer [276]. - Performance obligations for telemedicine care services include administrative support and are recognized when the Company provides the required services [286]. - The Company monitors revenue and receivables from third-party payors and records estimated contractual allowances to account for differences between billed and collected amounts [280]. - The Company recognizes revenue upon completion of implementation services, with start-up fees recorded as revenue when the service is completed over time [289]. Financial Performance - Revenue for the year ended December 31, 2025, was $14,618,184, an increase of $4,196,832 or 40% compared to $10,421,352 for 2024 [303]. - The iDoc acquisition completed in June 2024 contributed $5,084,931 to revenue, representing a 229% increase over the prior year [305]. - Cost of revenues for 2025 was $7,262,219, an increase of $4,018,447 or 124% compared to $3,243,772 for 2024 [308]. - Operating expenses for 2025 were $16,938,858, a decrease of $52,389,567 or 76% compared to $69,328,425 for 2024 [310]. - Net loss for 2025 was $14,735,984, representing an improvement of $42,966,031 or 74% compared to a net loss of $57,702,015 for 2024 [314]. - Cash used in operating activities for 2025 was $3,445,733, compared to $5,789,542 for 2024 [322]. - Cash provided by financing activities for 2025 was $8,415,832, an increase from $6,023,067 in 2024 [326]. - The Company had an accumulated deficit of $82,416,723 as of December 31, 2025 [316]. - The Company had cash of $5,266,286 and a working capital deficit of $7,879,201 as of December 31, 2025 [317]. - Future capital requirements will depend on growth rate, contract renewal activity, and market acceptance of telehealth [321].