Financial Performance - For the year ended December 31, 2025, SBC Medical Group generated revenues of $173,607,489, a decrease of 15.48% from $205,415,542 in 2024[473][480]. - Net income attributable to SBC Medical Group for 2025 was $50,985,613, representing a 9.38% increase from $46,614,275 in 2024[473][478]. - Franchising revenue decreased by 24.72% to $45,943,241 in 2025 from $61,033,032 in 2024, primarily due to a revision in the fee structure[480][482]. - Management services revenue saw a significant decline of 44.22%, falling to $29,628,534 in 2025 from $53,113,155 in 2024, attributed to the discontinuation of certain services and a revised fee structure[480][484]. - Procurement revenue increased by 2.26% to $56,053,171 in 2025, up from $54,814,399 in 2024, mainly due to the appreciation of the Japanese Yen[480][483]. - Operating income for 2025 was $67,486,398, a slight decrease of 4.01% from $70,303,710 in 2024[478]. - Gross profit for 2025 was $127,283,722, a decrease of $28,766,785 or 18.43% from $156,050,507 in 2024, attributed to lower franchising and management services revenue[488]. Cash Flow and Liquidity - Cash flows from operating activities increased to $24,668,496 in 2025 from $20,582,933 in 2024[473]. - Cash and cash equivalents increased to $163,773,838 as of December 31, 2025, up by $38,729,746 or 30.97% from $125,044,092 in 2024[502]. - Net cash provided by operating activities was $24,668,496 for 2025, an increase of $4,085,563 or 19.85% from $20,582,933 in 2024[503]. - Net cash provided by financing activities for the year ended December 31, 2025, was $38,292,183, mainly from borrowings of $34.8 million[507]. Expenses and Taxation - Operating expenses decreased to $59,797,324, down by $25,949,473 or 30.26% from $85,746,797 in 2024, mainly due to reduced impairment loss and stock-based compensation[489]. - Income tax expense increased to $31,020,607 for 2025, up by $4,254,682 or 15.90% from $26,765,925 in 2024[493]. - The effective tax rate rose to 37.80% for 2025, an increase of 1.36 percentage points from 36.44% in 2024, primarily due to a deemed contribution related to an aircraft disposal[494]. Strategic Initiatives - SBC Medical Group plans to expand its market presence in Japan, Vietnam, and Singapore while strengthening its brand in the cosmetic medical treatment management market[474]. - The company completed a strategic minority equity investment in OT Midco Holdings, acquiring an approximately 18.2% voting interest for $20 million[514]. - An additional share repurchase program was authorized with a limit of up to $20 million, effective from December 31, 2025, through December 31, 2026[512]. Revenue Recognition - The company generates revenue from franchising, procurement, and management services, with franchising revenue transitioning to a performance-based model starting April 2025[536]. - The Company generates revenue from labor supporting services, primarily IT and administrative services, recognized over time when services are rendered[543]. - Revenue from management consulting services related to cosmetic dermatology operations is also recognized over time when services are rendered[544]. - Rental income is derived from operating and sales-type leases, recognized on a straight-line basis over lease terms[545]. - Other revenues include beauty and health services, leasehold improvement services, and interest income, recognized upon satisfying performance obligations[546]. Investments and Liabilities - Long-term investments in related parties represent payments for equity interests in non-profit medical corporations in Japan, with no profit distribution allowed[547]. - The Company assesses investments for impairment, with no indicators of impairment noted as of December 31, 2025, despite carrying values exceeding net assets[550]. - The Company expects residual values at the dissolution of medical corporations to be at least equal to the carrying values of investments, using discounted cash flow methods for estimation[551]. - Future minimum borrowing payments total $42,833,484, with $9,099,046 due in 2026[522]. - The company holds total lease liabilities of $8,802,690, with $249,473 related to finance leases and $8,553,217 to operating leases[520]. Governance and Compliance - Deficiencies in governance and approval processes related to related party transactions and executive compensation were identified, impacting internal control assessments[515]. - The Company qualifies as an "emerging growth company," allowing it to take advantage of certain exemptions from reporting requirements[552]. - As a "smaller reporting company," the Company benefits from reduced disclosure obligations, including providing only two years of audited financial statements[554]. - The Company is not required to provide quantitative and qualitative disclosures about market risk due to its status as a smaller reporting company[555].

Table of Contents 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 001-41462 SBC Medical Group Holdings Incorporated (Exact name of registrant as specified in its c ...

Financial Performance - BioXcel Therapeutics reported net revenue from IGALMI® of $256,000 for Q4 2025, down from $366,000 in Q4 2024, and $642,000 for the full year 2025, compared to $2.3 million in 2024[8]. - The company reported an operating loss of $10.3 million and a net loss of $12.5 million for Q4 2025, compared to an operating loss of $10.5 million and a net loss of $10.9 million in Q4 2024[14]. - For the full year 2025, BioXcel reported an operating loss of $50.5 million and a net loss of $69.9 million, compared to an operating loss of $67.2 million and a net loss of $59.6 million in 2024[15]. - Total cash used in operating activities for 2025 was approximately $57.6 million, down $14.4 million from $72.0 million in 2024[15]. - Selling, General and Administrative (SG&A) expenses were $3.8 million for Q4 2025, down from $4.1 million in Q4 2024, and $20.5 million for the full year 2025, compared to $34.5 million in 2024[12][13]. - Cost of Goods Sold for Q4 2025 was $32,000, significantly reduced from $832,000 in Q4 2024, and for the full year was $164,000 compared to $2.1 million in 2024[9]. Research and Development - Research and Development (R&D) expenses were $6.7 million for Q4 2025, up from $5.9 million in Q4 2024, primarily due to increased clinical trial expenses[11]. - The company is focused on advancing the clinical evaluation of BXCL501 for Alzheimer's dementia, opioid use disorder, acute stress reaction, and PTSD[29]. - The company is advancing its Alzheimer's dementia program, which represents another significant market opportunity[3]. - The SERENITY At-Home pivotal Phase 3 trial supports the sNDA submission for IGALMI, targeting a total addressable market of up to 86 million annual episodes requiring treatment[4]. Risks and Challenges - The company has identified significant risks including limited operating history, significant losses, and substantial additional funding needs[29]. - The company is dependent on the success and commercialization of its product candidates, including IGALMI, BXCL501, BXCL502, BXCL701, and BXCL702[29]. - The company faces extensive regulatory requirements and obligations for IGALMI, which may impact its market acceptance[29]. - The company acknowledges the risks associated with patent infringement lawsuits and compliance with extensive regulations[29]. - The company is influenced significantly by BioXcel LLC and relies on third parties for various operations[29]. - The company is exposed to potential impacts from data breaches or cyber-attacks[29]. - The company has expressed concerns about the potential overestimation of its total addressable market and the number of episodes of agitation[29]. Environmental, Social, and Governance (ESG) - The company has highlighted the importance of environmental, social, and governance (ESG) matters in its operations[29]. Forward-Looking Statements - The company may not realize its expectations, and actual results could differ materially from forward-looking statements due to various important factors[29].

Revenue and Financial Performance - In 2023, 95.0% of the company's external revenues were derived from its VIE, with projections of 90.7% in 2024 and 85.2% in 2025[25]. - Total consolidated revenues for the year ended December 31, 2025, were RMB 374,847 thousand, an increase from RMB 316,170 thousand in 2024, representing a growth of approximately 18.4%[42]. - The net income for the year ended December 31, 2025, was RMB 2,574 thousand, compared to a net loss of RMB 6,769 thousand in 2024, indicating a significant turnaround in profitability[42]. - The net cash provided by operating activities for the year ended December 31, 2025, was RMB 64,885 thousand, a substantial increase from RMB 8,541 thousand in 2024[45]. - The total assets as of December 31, 2025, amounted to RMB 416,165 thousand, compared to RMB 378,033 thousand as of December 31, 2024, showing a growth of approximately 10.1%[43]. - The total liabilities as of December 31, 2025, were RMB 316,740 thousand, a slight increase from RMB 278,635 thousand in 2024[43]. - The company experienced a net loss of RMB 62,668 thousand for the year ended December 31, 2023, highlighting challenges faced in that fiscal year[42]. - The company incurred net losses of RMB 40.5 million and RMB 62.7 million for the years ended December 31, 2023 and 2024, respectively, but achieved profitability in 2025 with income from operations of RMB 0.7 million (US$0.1 million) and net income of RMB 2.6 million (US$0.4 million)[58]. Regulatory Environment and Compliance - The PRC government has indicated an intent to exert more oversight over overseas offerings, which may affect the company's future operations[32]. - The CSRC's new measures require domestic companies seeking overseas listings to complete filing procedures, with penalties for non-compliance[34]. - Domestic companies must ensure that any overseas offering is classified correctly, particularly if over 50% of their financial metrics come from domestic operations[34]. - The VIE structure requires compliance with various regulatory approvals, including a foreign-related investigation license obtained in April 2022[36]. - The Holding Foreign Companies Accountable Act may prohibit trading of shares if audit reports are not from PCAOB-inspected firms for two consecutive years[37]. - The PRC government has broad discretion in determining penalties for non-compliance with regulations, which could include revocation of business licenses or restrictions on operations[151]. - The recent regulatory measures require domestic companies seeking to list overseas to complete filing procedures with the China Securities Regulatory Commission (CSRC), which may impact future securities offerings[154]. - The company is subject to potential sanctions from the CSRC if it fails to obtain necessary approvals for future securities offerings, which could materially affect its operations[157]. Data Privacy and Cybersecurity - The regulatory environment in mainland China regarding data privacy and protection is evolving, with various regulatory bodies enforcing laws with differing standards[73]. - The Personal Information Protection Law, effective from November 1, 2021, has increased protection requirements for personal information processing, necessitating adjustments in business practices[75]. - The Data Security Law, effective September 2021, mandates security reviews for data-related activities that may affect national security, impacting companies with over one million users[83]. - Compliance with data privacy laws may incur significant costs and lead to negative publicity, potentially harming the company's reputation and operations[77]. - The company has implemented measures to protect data, including encryption and AI-driven data processing, to comply with privacy regulations[75]. - The company has not faced formal investigations related to cybersecurity reviews as of the date of the annual report[76]. - The company faces challenges in maintaining data security against external attacks and internal misuse, which could lead to reputational damage and regulatory liabilities[79]. Business Operations and Strategy - The company expects to continue making significant future expenditures related to the development and expansion of its business, which may lead to a decline in revenue if costs are not offset[59]. - The company relies on access to mobile data to develop its SAAS Businesses, and any restrictions on data access could materially affect its business and financial condition[67]. - The market for SAAS Businesses is characterized by rapid change, and the company must innovate and adapt its services to meet evolving customer needs to maintain its competitive position[60]. - The company must maintain and enhance its brand to expand its base of app developers and customers, as brand strength is critical to its business[60]. - The company may not be able to successfully identify and develop new SAAS Businesses or respond to market demands, which could adversely affect its competitive position[65]. - The company faces intense competition in the SAAS market, which may require substantial investments in research and development to remain competitive[96]. Intellectual Property and Technology - The company has 9,666,666 ADSs issuable upon exercise of the PAG Warrant at an initial price of US$1.035 per share, which could dilute shareholder ownership[133]. - The company is subject to evolving regulations regarding AI, which may increase compliance costs and expose it to potential infringement claims[88]. - The company owns 225 computer software copyrights related to various aspects of its SAAS Businesses[104]. - The company has established stringent cash management policies to ensure liquidity and monitor cash balances daily[40]. - The company may face reputational harm and financial liabilities if claims of intellectual property infringement are brought against it[110]. Market and Economic Risks - The company may face significant uncertainties regarding the interpretation and enforcement of new cybersecurity review measures that could affect its ability to list securities overseas[156]. - Changes in mainland China's economic, political, or social conditions could materially affect the company's business and operations[178]. - The PRC government extensively regulates the internet industry, and uncertainties in the interpretation of these regulations may adversely impact the company's operations[180]. - The trading price of the ADSs is likely to be volatile, influenced by market and industry factors, potentially leading to substantial losses for investors[222]. - Fluctuations in the Renminbi against the U.S. dollar can significantly impact the company's financial results and investment value[205]. Employee and Operational Challenges - The company has recorded accruals for estimated underpaid employee benefits in its financial statements due to inadequate contributions to employee benefit plans in mainland China[144]. - The company must maintain effective internal controls over financial reporting to ensure investor confidence in its financial statements[125]. - The company anticipates seasonal fluctuations in its operations, which may affect quarterly revenues and operating results, making future forecasts challenging[127]. - The company’s ability to attract and retain qualified personnel is critical for its growth, and competition for such talent is intense[123].

Financial Performance - Braskem S.A. reported a net loss of R$ 10,961 million in the consolidated financial statements for the year ended December 31, 2025[10]. - Consolidated net revenue for 2025 was R$70,717 million, a decrease of 8.9% from R$77,411 million in 2024[35]. - Gross profit for 2025 was R$1,556 million, down 74.0% from R$5,997 million in 2024[35]. - The company reported a loss for the year of R$10,961 million in 2025, compared to a loss of R$12,052 million in 2024, showing an improvement of 9.1%[37]. - Total comprehensive loss for the year was R$12,190 million in 2025, compared to R$9,643 million in 2024, indicating a worsening of 26.0%[37]. - The company’s accumulated losses increased to R$23,902 million in 2025 from R$14,034 million in 2024[34]. - The company recorded a loss before income tax of R$2,845 million in 2025, compared to a loss of R$17,733 million in 2024[42]. - The net profit from Braskem Holanda decreased to R$ 1,065 million in 2025 from R$ 1,519 million in 2024, a decline of 29.8%[159]. Assets and Liabilities - The company's current liabilities exceeded total assets by R$ 9,770 million in the consolidated balance sheet as of December 31, 2025[10]. - Total assets decreased to R$81,879 million in 2025 from R$101,575 million in 2024, representing a decline of 19.4%[34]. - Total liabilities increased to R$58,163 million in 2025 from R$77,581 million in 2024, a decrease of 25.0%[34]. - The company has a negative equity of R$ 16,502 million in the consolidated financial statements as of December 31, 2025[10]. - As of December 31, 2025, Braskem Idesa's outstanding bond liabilities were reclassified to current liabilities, totaling R$ 12,083 million, due to default on interest payments[58]. - The total liabilities for Braskem S.A. were R$ 44,385 million at December 31, 2025, a decrease from R$ 44,755 million at December 31, 2024[144]. Impairment and Asset Valuation - The impairment tests for the Petrochemical complex Braskem Idesa resulted in an impairment loss of R$ 1,287 million for property, plant, and equipment, R$ 49 million for intangible assets, and R$ 100 million for right-of-use assets[15]. - The company performed impairment tests at least annually for cash-generating units containing goodwill related to future profitability[14]. - The impairment testing revealed a total impairment loss of R$2,097 million, with significant losses in the Braskem Idesa segment amounting to R$1,366 million[197]. - The company recognized an impairment loss of R$ 1,468 million due to the recoverable amounts of its assets being lower than their carrying amounts[66]. - The company recognized impairment losses totaling R$781 million due to mothballing assets related to chlorine and caustic soda production[91]. Cash Flow and Liquidity - The company’s cash and cash equivalents decreased to R$10,501 million in 2025 from R$14,986 million in 2024, a decline of 29.8%[32]. - Cash generated from operating activities decreased to R$442 million in 2025 from R$7,331 million in 2024[42]. - Braskem's net cash used in investing activities was R$2,947 million in 2025, compared to R$3,485 million in 2024[42]. - Total debt payments amounted to R$1,685 million in 2025, down from R$4,994 million in 2024[42]. - The company is facing a prolonged downturn in the petrochemical industry, with cash consumption associated with debt service and recurring interest payments impacting liquidity[74]. Regulatory and Market Environment - In December 2025, the Brazilian government enacted Law No. 15,294/25, establishing the PRESIQ program to support the chemical industry, effective from January 1, 2027, to December 31, 2031[70]. - A provisional antidumping duty was approved in August 2025 for polyethylene resins imported from the U.S. and Canada, aimed at protecting the domestic industry[71]. - The Brazilian tax reform, effective from 2026, introduces a dual VAT model, with the company preparing for compliance adjustments[92]. - The company is monitoring geopolitical tensions affecting energy markets, which have led to increased volatility in international prices of resins and chemical products[95]. Corporate Governance and Management - Management's plans regarding the company's ability to continue as a going concern are detailed in the financial statements[10]. - The auditor's report indicates that the financial statements present fairly the financial position and performance of Braskem S.A. in accordance with Brazilian and IFRS standards[9]. - The company engaged financial and legal advisors in September 2025 to explore economic and financial alternatives for capital structure reorganization[67]. - The company is in negotiations regarding a potential corporate transaction involving its controlling shareholder, with approvals pending from competition authorities in Mexico and the EU[82]. Research and Development - Research and development expenses were R$460 million in 2025, a marginal decrease from R$463 million in 2024[35]. - The company has initiated steps to convert its chlor-alkali plant in Alagoas to handle ethylene dichloride, enhancing competitiveness in PVC production[88]. Inventory and Receivables - Finished goods inventory decreased to R$ 6,093 million in 2025 from R$ 7,586 million in 2024, reflecting a reduction of 19.6%[137]. - Total inventories amounted to R$ 10,421 million in 2025, down from R$ 13,688 million in 2024, indicating a decline of 23.5%[137]. - Trade accounts receivable as of December 31, 2025, totaled R$ 3,455 million, a slight decrease from R$ 3,562 million in 2024[132]. - The expected credit losses (ECL) for trade accounts receivable increased to R$ 173 million in 2025 from R$ 70 million in 2024[135]. Investments and Divestitures - The total investments in subsidiaries decreased to R$ 22,570 million in 2025 from R$ 29,164 million in 2024, a reduction of 22.5%[164]. - Braskem Netherlands divested its entire interest in B&TC and ER Plastics, resulting in a loss of R$96 million recorded under other expenses[105]. - The company divested its entire stake in B&TC and ER Plastics in June 2025, aligning with its strategic direction[160]. Financial Reporting and Standards - The financial statements are presented in Brazilian Reais (R$), with all amounts rounded to the nearest million[112]. - The company identified recurring EBITDA as a management performance measure to be disclosed upon initial adoption, impacting the presentation of the Statement of Cash Flows[120]. - New standards effective from January 1, 2025, include amendments to IAS 21 and OCPC 10, which do not affect the company as it does not conduct operations in non-convertible currencies[113]. - The amendments to IFRS 18/CPC 51 will require the presentation of operating profit and profit before financing and income taxes, improving clarity and comparability of disclosed information[114].

Financial Condition - As of December 31, 2025, the company had cash and cash equivalents of $57.1 million and an accumulated deficit of $475.4 million, with a net loss of $60.8 million for the fiscal year ended December 31, 2025[223][230]. - The company expects to incur substantial operating losses and negative cash flows from operations for the foreseeable future, indicating a need for additional funding to continue operations[224][225]. - The company anticipates that its existing cash resources will not be sufficient to fund operations for at least twelve months from the issuance of the consolidated financial statements[225][236]. - The company has incurred significant operating losses since its inception in 2017 and expects these losses to increase as product candidates advance through development[228][230]. - The company has federal and state net operating loss carryforwards of $215.3 million and $153.7 million, respectively, as of December 31, 2025[248]. Product Development - The company has only two product candidates, WTX-124 and WTX-330, currently in development, with all other programs in discovery or preclinical stages[229]. - The company is early in its development efforts, with lead product candidates in the early stages of clinical trial development and no current revenue from product sales[249]. - The success of the company's business is highly dependent on obtaining regulatory approval and successfully launching its initial product candidates, WTX-124 and WTX-330[250]. - The company has not previously submitted a Biologics License Application (BLA) or a new drug application (NDA) to the FDA, which may impede its ability to obtain timely approval for its products[253]. - Development efforts are currently focused on lead product candidates WTX-124 and WTX-330 for advanced solid tumors and relapsed or refractory tumors, respectively, limiting exploration of potentially more profitable opportunities[264]. Regulatory and Compliance Risks - The company is subject to regulatory uncertainties that could delay or limit its ability to obtain necessary approvals for its product candidates[257]. - The regulatory approval process for novel product candidates can be more expensive and time-consuming compared to established technologies, potentially impacting the ability to initiate clinical trials and obtain approvals[260]. - Changes in regulatory requirements, such as the FDA's new diversity action plan for clinical trials, may impact development plans and timelines[273]. - The company must comply with stringent EU pharmacovigilance rules, which may impose post-authorization studies and additional monitoring obligations[414]. - Failure to comply with regulatory requirements could lead to withdrawal of marketing approvals and adversely affect the company's ability to achieve or sustain profitability[415]. Clinical Trials and Development Challenges - Clinical trials are expensive and time-consuming, with unpredictable outcomes that may not align with earlier preclinical results, posing risks to future product candidates[267]. - Delays in clinical trials can result from various factors, including regulatory issues, patient enrollment challenges, and unforeseen events, which could increase costs and limit revenue generation[270]. - The company faces significant risks in successfully initiating and completing clinical trials, which could harm its business and delay regulatory approval for its product candidates[277]. - Delays in patient enrollment for clinical trials may lead to increased development costs and jeopardize the ability to seek marketing approval, potentially harming the company's financial condition[281]. - The company is developing WTX-124 in combination with third-party drugs, which may present challenges related to safety, supply, and regulatory approval[287]. Competition and Market Risks - The company faces substantial competition in the development and commercialization of new drug products, particularly in the immunotherapy segment for cancer treatment[300]. - The lead product candidate, WTX-124, may face competition from existing IL-2 based therapies, including Proleukin, which is already approved for metastatic renal cell carcinoma and melanoma[303]. - There are currently no approved IL-12 therapies for cancer, but WTX-330 may encounter competition from various IL-12 programs in clinical and preclinical development[304]. - The potential market sizes for the company's product candidates are difficult to estimate, and actual markets may be smaller than initial estimates if assumptions prove inaccurate[308]. - Successful commercialization will depend on obtaining favorable coverage and adequate reimbursement from third-party payors, which is essential for patient affordability[309]. Intellectual Property Risks - The company must secure and maintain patent protection for its technologies, as inadequate protection could allow competitors to erode its market position[336]. - The validity and enforceability of patent rights are uncertain, and pending applications cannot be enforced until patents are issued[344]. - The company relies on the Harpoon Agreement for patent rights, which imposes obligations that, if not met, could result in loss of important rights[347]. - The company may face significant royalty obligations on future product sales, which could impact profitability[354]. - The strength of patents in the biotechnology field is uncertain, and challenges to patent validity could threaten commercialization efforts[359]. Third-Party Reliance and Collaboration Risks - The company relies on third parties for conducting preclinical studies and clinical trials, which may impact timelines and costs if these parties do not meet their obligations[319]. - The company relies on third-party contract manufacturers for the production of preclinical, clinical, and commercial supplies, as it does not have its own clinical manufacturing capabilities[325]. - The company is exploring collaborations to enhance product development and commercialization, including a partnership with Jazz Pharmaceuticals for the development of products containing Interferon alpha[332]. - Collaborations may pose risks such as insufficient resource allocation by partners and potential misappropriation of proprietary information[333]. - Regulatory actions against CMOs could lead to interruptions in clinical or commercial supply, adversely affecting the company's business[330]. Legal and Litigation Risks - The company may incur substantial costs in defending against third-party claims of patent infringement, which could affect financial condition[372]. - If a third party claims infringement, the company may be required to pay significant damages, including potential treble damages for willful infringement[372]. - Legal proceedings related to intellectual property rights could divert management's attention and resources, impacting business operations[370]. - The company may face disputes regarding the inventorship or ownership of its patents, which could be costly and time-consuming[388]. - The company may be subject to claims regarding the wrongful use or disclosure of confidential information, which could lead to litigation and distract management[390].

Revenue Performance - Total revenue for the year ended December 31, 2025, was $56,699,389, an increase of approximately $5 million, or 9.7%, compared to $51,684,984 for 2024[134]. - Revenue from the entertainment publicity and marketing segment increased by approximately $8.1 million, or 16.9%, for the year ended December 31, 2025, compared to the previous year[136]. - The entertainment publicity and marketing segment accounted for 99.5% of total revenue in 2025, up from 93.4% in 2024[131]. - The content production segment generated $285,707 in revenue for 2025, a significant decrease from $3,412,141 in 2024[134]. - Revenue for the year ended December 31, 2025 increased due to contributions from Elle ($1.8 million) and Always Alpha ($0.3 million), offset by a $0.6 million decrease from Viewpoint, resulting in organic growth across most subsidiaries[137]. - Content production revenues decreased by approximately $3.1 million for the year ended December 31, 2025, primarily due to the absence of revenue from The Blue Angels documentary film released in 2024[138]. - The company recorded revenues of $0.2 million from the Amazon Agreement for the year ended December 31, 2025, compared to $3.4 million in 2024[207]. Operating Expenses and Financial Performance - Total operating expenses decreased to $56.7 million in 2025 from $62.2 million in 2024, with direct costs down by $1.0 million and no impairment of goodwill compared to $6.7 million in 2024[139][142]. - Payroll and benefits expenses increased by approximately $3.8 million, mainly due to additional payroll for Elle and Always Alpha, netting a $2.2 million increase related to headcount and commissions[140]. - Net loss for the year ended December 31, 2025 was approximately $3.1 million or $0.27 per share, compared to a net loss of $12.6 million or $1.22 per share in 2024[152]. - Cash flows used in operating activities were approximately $2.0 million for the year ended December 31, 2025, a change of $1.9 million from 2024, primarily due to increased working capital needs[155]. Debt and Financing - Total debt increased to $24.5 million as of December 31, 2025, up from $22.4 million in 2024, primarily due to a $3.8 million increase in convertible and nonconvertible promissory notes[159]. - The company entered into a purchase agreement with Lincoln Park Capital Fund, allowing the sale of up to $15 million of shares over a 36-month term[160]. - The company may direct Lincoln Park to purchase up to 20,000 shares of common stock at a minimum closing price of $0.10, with potential increases based on higher price thresholds[161]. - The maximum commitment for any single Regular Purchase is capped at $500,000, and the total shares that can be sold under the 2025 LP Purchase Agreement is limited to 2,346,371 shares, approximately 19.99% of the outstanding shares prior to the agreement[164]. - Shareholder approval was obtained on November 10, 2025, allowing the issuance of up to $15 million in shares under the 2025 LP Purchase Agreement[166]. - The company issued 244,698 shares to Lincoln Park as an initial fee under the 2025 LP Purchase Agreement, incurring $281,403 in equity issuance costs[167]. - The company entered into a loan agreement with BankUnited for a total of $6.95 million, including a $5.8 million secured term loan and a $750,000 revolving line of credit[197]. - As of December 31, 2025, the company had current liabilities of $1,813,760 and noncurrent liabilities of $2,976,930 related to the First and Second BKU Term Loans[202]. Asset Management and Goodwill - Goodwill on the consolidated balance sheets was $21.5 million as of December 31, 2025, with no impairment recorded for the year[210]. - An impairment of goodwill amounting to $6.5 million was recorded during the third quarter of 2024 due to a decline in stock price and adjusted revenue projections[213]. - The company acquired an estimated $23.4 million of intangible assets with useful lives ranging from 2 to 13 years, primarily consisting of customer relationships, trade names, and non-compete agreements[214]. - During the years ended December 31, 2025 and 2024, the company amortized $2.3 million related to intangible assets, recorded under depreciation and amortization in the consolidated statement of operations[216]. Investment and Acquisition Strategy - The company has established an acquisition strategy to identify and acquire complementary businesses, although no active negotiations are currently in progress[119]. - The investment strategy "Ventures" aims to develop internally owned assets or acquire stakes in entertainment content, live events, and consumer products, with plans to enter into investments during 2026[120]. - The company has completed development on several feature films and is seeking financing through various means, including third-party financing and sales of common stock[127]. - The Blue Angels documentary generated $3.4 million from an acquisition agreement with Amazon Content Services LLC, with additional revenue expected from IMAX theatres[128]. Financial Instruments and Valuation - The company evaluates convertible debt agreements to determine if they contain both liability and equity components, classifying them as compound financial instruments if applicable[220]. - Fair values of convertible debt are estimated using pricing models such as the Monte Carlo Simulation, which requires significant judgment and is subject to risk of error[221]. - Fair values of net assets acquired in business combinations are calculated using expected cash flows and industry-standard valuation techniques, with contingent consideration estimated using income approaches[217]. - The company has a "measurement period" of up to one year to finalize fair value determinations for acquisitions, allowing for adjustments based on new information[218]. - Significant changes in assumptions or estimates used in valuations could materially affect the company's operating results in the period such changes are recognized[219].

Financial Performance - As of December 31, 2025, cash and cash equivalents were $57.1 million, down from $65.7 million as of September 30, 2025[5] - Research and development expenses for Q4 2025 were $6.9 million, a decrease of 56% compared to $15.7 million in Q4 2024; for the full year 2025, R&D expenses totaled $44.8 million, down from $56.4 million in 2024[5] - General and administrative expenses for Q4 2025 were $2.5 million, a decrease of 46% compared to $4.6 million in Q4 2024; for the full year 2025, these expenses were $15.8 million, down from $19.0 million in 2024[5] - The net loss for Q4 2025 was $8.4 million, significantly reduced from $20.4 million in Q4 2024; the full year net loss for 2025 was $60.8 million, compared to $70.5 million in 2024[5] - Total operating expenses for Q4 2025 were $9.4 million, down from $20.3 million in Q4 2024; for the full year 2025, total operating expenses were $60.7 million, compared to $75.5 million in 2024[10] Strategic Initiatives - The company is exploring strategic alternatives to maximize shareholder value, which may include a sale, merger, or other strategic transactions[2] - The company has engaged Piper Sandler & Co. as an exclusive financial advisor to assist in the strategic evaluation process[2] Asset and Equity Status - The company's total assets as of December 31, 2025, were $69.4 million, down from $126.9 million as of December 31, 2024[12] - Total stockholders' equity decreased to $24.8 million as of December 31, 2025, from $73.4 million in the previous year[12] Clinical Development - The company’s most advanced clinical candidates include WTX-124 and WTX-330, targeting solid tumors with conditionally activated IL-2 and IL-12 molecules[4]

Financial Reporting and Obligations - The company is permitted to provide only two years of audited financial statements, along with reduced disclosure obligations regarding executive compensation[298]. - The effective tax rate may fluctuate, and the company may incur tax obligations in excess of accrued amounts due to various factors[314]. - The company has significant federal and state net operating loss carryforwards, which could expire unused and may be limited by ownership changes[315]. - Non-U.S. holders of the company's common stock may be subject to U.S. federal income tax if the company is considered a United States real property holding corporation[322]. Market Conditions and Stock Performance - The market value of the company's common stock held by non-affiliates exceeded $700 million as of the last business day of the second fiscal quarter[299]. - The company does not anticipate paying any cash dividends on its common stock in the foreseeable future, with capital appreciation being the sole source of gains[302]. - Unfavorable global economic and political conditions could negatively impact the company's financial condition and results of operations[321]. Business Operations and Risks - The company has broad discretion over the use of its cash and cash equivalents, which may not yield any return on investment[301]. - The company's business activities could be subject to the Foreign Corrupt Practices Act, which may result in fines or sanctions if violated[316]. - Disruptions at the FDA and other government agencies could hinder the timely review and approval of new products, adversely affecting the business[320].

Financial Position - As of December 31, 2025, Instil Bio had a total cash position of $76.3 million, down from $115.1 million as of December 31, 2024[4]. - Instil Bio's total assets decreased to $203.5 million as of December 31, 2025, from $263.6 million in 2024, a decline of 23%[17]. - Instil Bio's total stockholders' equity decreased to $113.9 million as of December 31, 2025, down from $169.4 million in 2024, a decrease of 33%[17]. - The company expects its cash position to fund its current operating plan beyond 2027[6]. Expenses - Research and development expenses for the fourth quarter of 2025 were $3.5 million, compared to $1.1 million in the same quarter of 2024, representing a 218% increase[7]. - General and administrative expenses decreased to $6.1 million in Q4 2025 from $10.4 million in Q4 2024, a reduction of 41%[8]. - The company reported restructuring and impairment charges of $16.6 million for the full year 2025, compared to $7.5 million in 2024, marking a 121% increase[9]. Net Loss - The net loss for the fourth quarter of 2025 was $8.2 million, an improvement from a net loss of $11.9 million in Q4 2024, reflecting a 31% reduction[10]. - Non-GAAP net loss per share for the full year 2025 was $6.91, compared to $7.59 for the full year 2024, indicating a 9% improvement[10]. Strategic Development - Instil Bio plans to pursue potential acquisitions and in-licensing opportunities to enhance its strategic development and pipeline[3].