Financial Performance - Q4 2025 preliminary revenue is estimated to be between $18.1 million and $30.0 million, with a GAAP net loss from continuing operations of $37.0 million to $25.1 million[1][6]. - For the three months ended December 31, 2025, Veritone reported total revenue of $18.1 million, a decrease from $22.4 million in the same period of 2024, representing a decline of approximately 19.3%[26]. - The operating loss for the same period was $23.3 million, compared to an operating loss of $11.4 million in Q4 2024, indicating a deterioration of 104.4%[26]. - The net loss from continuing operations for the three months ended December 31, 2025, was $37.0 million, compared to a net loss of $25.1 million in Q4 2024, reflecting a 47.5% increase in losses[27]. - For the year ended December 31, 2025, Veritone, Inc. reported a GAAP net loss of $(110.5) million, compared to a loss of $(98.6) million for the year ended December 31, 2024[29]. - The non-GAAP net loss from continuing operations for 2025 was $(39.5) million, while the non-GAAP net loss for 2024 was $(27.6) million[29]. - The company expects a GAAP net loss range of $(53.8) million to $(43.3) million for the year ended December 31, 2026, with a corresponding non-GAAP net loss range of $(22.5) million to $(13.5) million[34]. Revenue Outlook - FY 2026 revenue outlook is projected to be between $130 million and $145 million, with a Non-GAAP net loss expected to range from $22.5 million to $13.5 million[1][5][13]. Bookings and Contracts - Total new bookings for Veritone Data Refinery exceeded $50.0 million in Q4 2025, representing a 25% increase from November 2025 estimates and a 250% increase from Q4 2024[1][8]. - The company closed 257 enterprise software and licensing contracts, including significant agreements with major clients such as Google and NBC Universal[1][8]. - The company has secured major contract wins to deploy its VDR product solution with leading hyperscalers, enhancing its market presence[1][8]. Debt and Expenses - The company ended fiscal year 2025 with $27.4 million in cash and cash equivalents, and $45.6 million in convertible debt, having paid down 100% of its senior secured term loan[1][5]. - The company has reduced its overall debt by approximately $77.5 million, resulting in annualized debt carrying cost savings of about $13.0 million[1][9]. - Total operating expenses for Q4 2025 were $41.9 million, slightly down from $43.5 million in Q4 2024, showing a decrease of 3.7%[26]. - Interest expense for the year ended December 31, 2025, was $10.2 million, down from $12.1 million in 2024[29]. - Depreciation and amortization expenses for 2025 were $27.2 million, compared to $28.5 million in 2024[29]. - Stock-based compensation expense for 2025 was $6.7 million, slightly lower than $7.7 million in 2024[29]. - Acquisition and due diligence costs for 2025 were $3.1 million, down from $4.1 million in 2024[29]. Strategic Initiatives - A strategic agreement with Oracle was announced to enhance the deployment of enterprise AI and generative AI solutions, positioning Oracle Cloud Infrastructure as a key component of Veritone's offerings[1][3][8]. - Veritone launched a strategic partnership with Armada to improve public safety intelligence through AI capabilities[1][12]. - The company anticipates continued momentum in the public sector and increased demand for its AiWARE platform and Veritone Data Refinery solutions[22]. - Veritone is focusing on expanding its aiWARE SaaS business and enhancing existing products while introducing new products to achieve market acceptance[22]. - The company is also addressing existing material weaknesses in its internal control over financial reporting and has plans for remediation[22]. Data Processing - More than 22.2 trillion tokens were processed in the second half of 2025, indicating a tripling of data volume compared to the first half of the year[1][8]. - The change in fair value of earnout receivable for 2025 was $7.7 million, compared to a loss of $(1.4) million in 2024[29].

FDA Approval Process - On March 25, 2026, the FDA indicated that a single Phase 3 study may be sufficient for marketing approval of QRX003 in the U.S.[72] - The FDA approval process requires rigorous pre-clinical and clinical testing to demonstrate safety and effectiveness[92][98]. - The FDA requires two adequate and well-controlled Phase 3 clinical trials for prevalent diseases to demonstrate safety and efficacy[99]. - An NDA submission must include results from all pre-clinical and clinical testing, along with a substantial application user fee, which typically increases annually[101]. - The FDA's goal for acting on an NDA for a new molecular entity is ten months, but the preliminary review can extend this to twelve months[102]. - The FDA may issue a complete response letter (CRL) if the NDA has deficiencies, requiring the applicant to address these before resubmission[104]. - The FDA may require post-marketing studies to gather additional safety and efficacy data after NDA approval[122]. - The FDA may expedite the review of applications for products intended to treat serious or life-threatening conditions that show substantial improvement over existing therapies[112]. - Orphan drug designation provides a seven-year market exclusivity period for drugs treating rare diseases affecting fewer than 200,000 individuals in the U.S.[113]. Clinical Development - The first clinical site for QRX003 in pediatric patients with Peeling Skin Syndrome opened in December 2024, with significant improvements observed after 12 weeks of treatment[75][76]. - Quoin plans to submit a pre-IND meeting request for QRX009 by the end of Q2 2026 and initiate clinical testing in Proof of Concept studies before the end of 2026[77]. - QRX003 has the potential to be the first approved treatment for NS globally, with plans for self-commercialization in the U.S., Western Europe, and Japan[78][79]. Market and Competition - The company has established nine marketing partnerships for QRX003 covering 61 countries, including Australia, New Zealand, and major Latin American countries[79]. - The company faces competition from other biotechnology firms and research institutions, with several candidates for NS treatment currently in development[84]. - Direct or indirect governmental price regulation may affect the prices charged for product candidates, with ongoing legislative proposals that could significantly impact the pharmaceutical industry[128]. - The Inflation Reduction Act requires the U.S. Department of Health and Human Services to negotiate prices for certain drugs, with the first negotiated prices taking effect in 2026 for 10 high-cost Medicare Part D products[130]. Financial and Regulatory Considerations - A formal pricing analysis for QRX003 has not been concluded, with anticipated influences from FDA negotiations and pharmacoeconomic data[83]. - The ability to commercialize product candidates depends significantly on adequate financial coverage and reimbursement from third-party payors, with significant uncertainty regarding insurance coverage for newly approved products[127]. - The company anticipates ongoing legislative and regulatory interest in drug pricing practices, which may lead to further reductions in coverage and reimbursement levels for pharmaceutical products[129]. - The company is subject to various global privacy and data protection laws, which could result in significant penalties and reputational harm if not complied with[126]. Company Structure and Operations - The company had four full-time employees and two part-time employees as of December 31, 2025, with no collective bargaining agreements in place[136]. - The company is classified as a "smaller reporting company," allowing it to take advantage of reduced disclosure obligations under the Securities Exchange Act[146]. - The company completed a business combination with Quoin Pharmaceuticals, Inc. on October 28, 2021, and subsequently changed its name to Quoin Pharmaceuticals Ltd.[142]. - The company is obligated to file reports with the SEC as a U.S. domestic issuer since January 1, 2023, which requires more detailed disclosures than those for foreign private issuers[142]. - The company’s operations do not produce hazardous waste, and it is not subject to hazardous materials regulations[134]. - The company is classified as a smaller reporting company under Rule 12b-2 of the Exchange Act and is not obligated to provide the disclosures typically required under Item 7A[369]. Intellectual Property and Confidentiality - The company entered into a License Agreement with Skinvisible Pharmaceuticals, paying a one-time fee of $1 million and agreeing to a royalty percentage on net sales[89]. - Quoin relies on trade secret protection and confidentiality agreements to safeguard proprietary know-how not covered by patents[90].

Product Development and Innovation - In December 2025, the company launched the SOLIS™ truck-mounted folding solar array and COR™ portable battery system, marking its entry into the clean-energy market[25]. - The AetherLux Pro heat pump technology received attention from multi-billion dollar corporations and U.S. government entities, indicating strong market interest[25]. - The company has initiated early production of its first hard folding tonneau cover, the Worksport AL3 Pro, which is now in active production for most major light truck models in North America[39]. - The company is developing advanced heat pump technology through its subsidiary, TerraVis Energy, aimed at residential, commercial, and industrial applications[61]. - The introduction of new product lines in 2025 contributed to increased production volume and improved overhead allocation efficiencies[201]. Financial Performance - For the fiscal year ended December 31, 2025, net sales increased by 89.8% to $16,101,738 compared to $8,484,379 in 2024[195]. - Gross profit for 2025 was $4,474,907, representing a 394.1% increase from $905,650 in 2024[195]. - The company experienced a net loss of $19,352,297 in 2025, compared to a net loss of $16,163,789 in 2024, reflecting a 19.7% increase in losses[195]. - The company reported net losses of $19,352,297 in 2025, compared to $16,163,789 in 2024, indicating a worsening financial position[205]. - Cash and cash equivalents increased by $1,062,795 (22%) from $4,883,099 in 2024 to $5,945,894 in 2025[214]. Market Expansion and Partnerships - The company reported a 42% increase in national dealer partnerships over the preceding quarter, expanding its distribution network significantly[25]. - The company announced a strategic partnership with Patriot Automotive Technologies to accelerate nationwide expansion through a network of over 200 dealer locations[25]. - The company is actively pursuing relationships with additional distributors and dealers to expand its market presence in the U.S. and Canada[200]. - The company plans to continue enhancing its business-to-consumer and business-to-business channels while focusing on cost efficiencies and brand awareness[197]. Capital and Funding - The company raised approximately $521,835 through its at-the-market offering program in 2025, with net proceeds of $504,372 after expenses[20]. - A warrant exercise inducement agreement resulted in gross proceeds of approximately $6.4 million from the exercise of 2,194,526 shares at a reduced price of $2.90 per share[21]. - The company conducted a Regulation A offering, generating approximately $10.0 million in gross proceeds between June and October 2025[22]. - The company raised approximately $21.8 million from public and private offerings during the fiscal year[208]. Operational Challenges - The company expects to continue incurring operating losses as it scales operations and invests in product development, manufacturing, and commercialization[75]. - The company relies on one supplier for the production of its outsourced soft tonneau covers, which may hinder growth if there are delays or loss of this supplier[90]. - The company faces risks from tariffs and supply chain issues, which have increased input costs but were offset by higher production volumes and operational efficiencies[175]. - The company has expressed substantial doubt about its ability to continue as a going concern due to a history of operating losses and reliance on equity and debt financings[74]. Intellectual Property and Legal Risks - The company faces challenges in protecting its intellectual property rights globally, which could negatively impact its business operations[93]. - Legal systems in certain countries may not favor the enforcement of patents, making it difficult to stop infringement and protect proprietary rights[94]. - The company’s ability to maintain a strong patent position is crucial for its commercial success, as inadequate protection could harm its profitability[96]. - Much of the company's intellectual property is protected as trade secrets, which must be diligently safeguarded to maintain competitive advantage[99]. Cybersecurity and Risk Management - The company has cybersecurity insurance coverage in the aggregate amount of $1,000,000 per annual policy period to mitigate risks associated with cybersecurity attacks[87]. - The company currently lacks enhanced cybersecurity measures, a dedicated team, and robust protocols to manage cybersecurity risks[142]. - The company plans to invest in cybersecurity improvements, including engaging external experts and developing an incident response strategy[144]. Employee and Operational Structure - The company employs 103 full-time employees and 5 part-time employees in the U.S., with plans to hire additional staff as operations grow[67]. - As of December 31, 2025, the company operates three facilities, with one owned and two leased, totaling 166,339 sq ft[149]. Market Trends and Projections - The U.S. pickup truck market is expected to grow at a compound annual growth rate (CAGR) of 5.3% from 2025 to 2030, with approximately 61 million pickup trucks in operation as of Q3 2024[48]. - The tonneau cover market in the U.S. was estimated to be $2.56 billion in 2024 and is projected to grow at a CAGR of 7.1% from 2025 to 2030[50]. - The electric pickup truck market is expected to grow at a CAGR of 29.86% from 2025 to 2029 in North America, presenting opportunities for partnerships with electric truck manufacturers[49]. - The global Portable Power Station Market is projected to grow at a CAGR of 5.3% between 2025 and 2035[53].

Fleet and Operations - The company has 22 contracted/committed rigs as of December 31, 2023, with an increase to 29 rigs following the acquisition of five new rigs in January 2026[52]. - There are currently 11 newbuild jack-up rigs under construction, which may lead to increased competition and potential oversupply in the market[54]. - The recent acquisition of five new rigs increases the size of the fleet and the associated risks due to industry cyclicality[49]. - The recent acquisition of five rigs increased the fleet from 24 to 29, raising the risk exposure related to the market value of these rigs[70]. - Only three of the five newly acquired rigs are currently contracted, heightening risks related to contracting uncontracted rigs[142]. - The acquisition of the five rigs through a joint venture is valued at $287 million, which may involve significant leverage and operational risks[146]. - Integration activities for the newly acquired rigs may disrupt existing operations and divert management's attention, potentially impacting financial performance[145]. Market Conditions and Risks - The offshore drilling industry is highly cyclical, with periods of low demand and oversupply impacting business operations and financial results[51]. - Oil prices have shown significant volatility, ranging from approximately $70.31 to $93.12 in 2024 and between $58.92 to $80.79 in 2025, affecting drilling activity levels[56]. - The company faces risks related to geopolitical tensions, inflation, and competition in the offshore drilling market, which could adversely affect dayrates and contract renewals[49]. - The company may experience reduced demand if long-term oil prices decline or if rig supply increases above current levels, impacting financial performance[57]. - Advances in onshore exploration and development technologies may lead customers to allocate more capital expenditure to onshore activities, potentially reducing offshore spending[60]. - Global geopolitical tensions, supply chain disruptions, and inflation have created volatility in oil and gas prices, which could adversely affect the company's business and financial condition[63]. - The volatility in oil prices and potential down-cycles in the offshore drilling industry could negatively impact customer demand and the fair market value of the company's rigs[69]. Financial Condition and Debt - The company’s financial condition may be affected by significant debt maturities and liquidity risks in the coming years[50]. - As of December 31, 2025, the company had $2,210.0 million in principal amount of debt outstanding, representing 61.0% of its assets[198]. - The company has scheduled final maturity dates for all its debt between 2028 and 2030, with annual amortization of $101.0 million for the 2028 Notes and $42.6 million for the 2030 Notes[195]. - The company issued $165 million in additional 2030 Notes and incurred $150 million in Seller Financing to partially fund the acquisition of the new rigs, increasing overall indebtedness[143]. - Future cash flows may be insufficient to meet obligations under existing bonds and loans, impacting the company's ability to operate[209]. - The company expects a significant portion of cash flow from operations to be dedicated to debt interest and principal payments, limiting availability for other purposes[211]. - The company has significant debt maturities in 2028 and 2030, which may require raising additional financing[215]. - The company may need to raise funds through additional debt or equity issuance, which could dilute existing shareholders[216]. - The company is subject to restrictive debt covenants that may limit its ability to finance future operations and capital needs[218]. Operational Risks - The company faces risks related to international operations, including political uncertainties and compliance with various laws and regulations, which could impact its ability to operate effectively[71]. - The company is exposed to risks related to contract renewals and potential cancellations by customers, particularly in unfavorable market conditions[49]. - The company has experienced contract terminations and suspensions due to unfavorable market conditions, which may lead to significant revenue loss[84]. - The company may face challenges in securing favorable contracts for its jack-up rigs as existing contracts expire, potentially leading to idle rigs and associated costs[85]. - The company incurs significant activation and reactivation costs for its rigs, which may not be fully recouped from customers, affecting cash flow[100]. - The company may incur liabilities exceeding contractual agreements due to enforceability issues of indemnities in certain jurisdictions[126]. - The company may face significant operational hazards, including blow-outs and equipment defects, which could lead to liability claims and financial losses[124]. - The company’s insurance policies may not adequately cover all risks, potentially resulting in substantial costs from uncovered incidents[130]. - Severe weather conditions, particularly in the Gulf of America and the North Sea, could materially affect the company's operations and financial performance[131]. - The company is exposed to risks associated with public health crises, which could disrupt operations and impact demand for services[113]. Compliance and Regulatory Risks - Compliance with evolving regulations related to low or zero carbon alternatives may result in increased operational costs and impact the company's reputation[67]. - The company is subject to complex and evolving tax laws, which may lead to increased tax liabilities and affect financial results[177]. - Global tax reforms, including a 15% global minimum tax effective January 1, 2024, could significantly impact the company's effective tax rate and cash flow[178]. - Future government regulations related to climate change may increase operational costs and require significant financial expenditures for compliance[184]. - Growing public concern about climate change may adversely affect demand for the company's services and restrict access to capital[185]. - Compliance with complex cybersecurity laws and regulations poses significant challenges and potential penalties for the company[139]. - The company faces risks related to compliance with anti-bribery and anti-corruption laws, which could result in substantial fines and operational curtailments[190]. Shareholder and Governance Issues - The company has 307,701,075 common shares outstanding, with Related Parties owning approximately 24.7% of total shares[238]. - Future sales of equity securities may dilute ownership and negatively impact the market price of common shares[237]. - The company has commercial relationships with Drew Holdings Ltd, including ongoing advisory arrangements[240]. - Directors Mr. Thiago Mordehachvili and Mr. Tor Olav Trøim also serve as directors of related parties, potentially leading to conflicts of interest[241]. - The resolution of conflicts of interest may not always align with the best interests of the company or its shareholders[241]. - The company maintains fiduciary duties to both itself and the related parties, which may complicate decision-making[241]. - Additional details on related party transactions can be found in the section "Item 7.B. Related Party Transactions"[242]. Labor and Cost Pressures - Inflation and the limited availability of qualified personnel may lead to higher operating costs, impacting overall profitability[50]. - The limited availability of qualified personnel in operational regions may lead to higher operating costs and impact the company's ability to staff rigs effectively[102]. - Inflationary pressures, including increases in labor and material costs, may adversely affect the company's operating results and overall demand for drilling services[101]. - Local content requirements in various jurisdictions may increase operational costs and affect the ability to hire experienced personnel[152].

Revenue and Profitability - Revenue for Q4 2025 decreased by 4.5% to $2.85 million compared to $2.99 million in Q4 2024, driven by lower shipments of force-sensing products [4]. - Gross profit for Q4 2025 was $905,000, down 23.5% from $1.18 million in the same quarter last year, resulting in a gross margin of 31.7% compared to 39.6% [5]. - Net loss for Q4 2025 increased to $574,000 from a net loss of $413,000 in Q4 2024, attributed to lower revenue and gross margin [6]. - Adjusted EBITDA for Q4 2025 was $(511,000), worsening from $(233,000) in the prior-year period [8]. - For the three months ended December 31, 2025, the net loss was $574,000 compared to a net loss of $413,000 for the same period in 2024 [24]. - The EBITDA for the three months ended December 31, 2025, was $(519,000), an increase in loss from $(240,000) in the same period of 2024 [24]. - Adjusted EBITDA for the year ended December 31, 2025, was $(885,000), compared to $(1,072,000) for the year ended December 31, 2024 [24]. - The company reported a total net loss of $1,615,000 for the year ended December 31, 2025, compared to a net loss of $1,984,000 for the year ended December 31, 2024 [24]. Expenses - Engineering, research and development expenses for Q4 2025 were $353,000, down from $480,000 in Q4 2024 [21]. - The company incurred a depreciation expense of $49,000 for the three months ended December 31, 2025, up from $32,000 in the same period of 2024 [24]. - Amortization expense for the year ended December 31, 2025, was $717,000, slightly down from $753,000 in 2024 [24]. - Stock-based compensation expense for the three months ended December 31, 2025, was $8,000, compared to $7,000 in the same period of 2024 [24]. - The income tax expense for the three months ended December 31, 2025, was $169,000, compared to a benefit of $33,000 in the same period of 2024 [24]. - Interest income for the three months ended December 31, 2025, was $(2,000), down from $(8,000) in the same period of 2024 [24]. - The total adjustments to arrive at EBITDA included a depreciation expense of $190,000 for the year ended December 31, 2025, compared to $143,000 in 2024 [24]. Assets and Liabilities - Total assets decreased to $11.74 million in 2025 from $13.12 million in 2024, with total liabilities slightly reduced to $2.52 million [19]. Business Development and Strategy - The company began volume production of a custom piezoelectric sensor solution for the autonomous vehicle market and is shipping a second-generation custom FSR solution for robotic-assisted surgery [7]. - The company successfully converted preferred stock into common stock, eliminating $400,000 in annual preferred stock dividends [7]. - The company is actively pursuing acquisitions and is optimistic about organic growth in 2026 and 2027 [4]. - The company added two Senior Business Development Directors in January 2026 to enhance growth in North America and Europe [7].

Financial Performance - Vivani Medical reported a net loss of $26.6 million for the full year 2025, an increase of 13.2% compared to a net loss of $23.5 million in 2024[18]. - Net loss for 2025 was $26,609 thousand, compared to a net loss of $23,486 thousand in 2024, indicating a worsening of approximately 13.0%[27]. - Net loss per common share remained at $0.43 for both 2024 and 2025, indicating consistent performance in terms of loss per share[27]. Expenses - Research and development expenses for the year ended December 31, 2025, were $18.1 million, reflecting a 15% increase from $15.7 million in 2024[15]. - General and administrative expenses for the full year 2025 were $9.4 million, a 6% increase from $8.9 million in 2024[16]. - Total operating expenses increased from $24,677 thousand in 2024 to $27,556 thousand in 2025, representing an increase of about 11.5%[27]. - Research and development expenses rose from $15,745 thousand in 2024 to $18,126 thousand in 2025, an increase of about 15.1%[27]. - General and administrative expenses increased from $8,932 thousand in 2024 to $9,430 thousand in 2025, reflecting a rise of approximately 5.6%[27]. Cash and Assets - As of December 31, 2025, Vivani had cash and cash equivalents of $16.2 million, down from $18.4 million at the end of 2024[11]. - Total current assets decreased from $20,442 thousand in 2024 to $17,898 thousand in 2025, a decline of approximately 12.5%[25]. - Cash and cash equivalents decreased from $18,352 thousand in 2024 to $16,232 thousand in 2025, a decline of approximately 11.6%[25]. Liabilities and Equity - Total liabilities decreased slightly from $23,951 thousand in 2024 to $23,663 thousand in 2025, a reduction of about 1.2%[25]. - Total stockholders' equity decreased from $17,610 thousand in 2024 to $15,730 thousand in 2025, a decline of approximately 10.7%[25]. Financing and Future Plans - The company raised $41.5 million in gross proceeds through multiple financing activities in 2025 and 2026, supporting operations into mid-2027[8]. - The company plans to transition Cortigent into an independent publicly traded company, exploring both a spin-off and an IPO[20]. Clinical Studies and Product Development - The Phase 1 clinical study for NPM-139, a semaglutide implant for chronic weight management, is projected to begin in mid-2026, with results expected by the end of 2026[4]. - The LIBERATE-1 study demonstrated over 20% sham-adjusted weight loss sustained for a full year with a single administration of the semaglutide implant[2]. - Significant progress has been made in manufacturing capabilities to prepare for commercial-scale production of the semaglutide implant[4].

Financial Performance - The company reported a revenue increase of 10% year-over-year, reaching $1.2 billion in Q3 2023[5]. - The company reported a revenue of $1.2 billion for the last quarter, representing a 15% increase year-over-year[1]. - The company provided a forward guidance of 12% revenue growth for the next quarter, projecting revenues between $1.35 billion and $1.4 billion[5]. - The company expects revenue growth of 10-12% for the next fiscal year, driven by new product launches and market expansion[3]. - The gross margin improved to 45%, up from 42% in the previous quarter, due to cost optimization strategies[7]. - The company has set a target to reduce operational costs by 15% over the next year through efficiency improvements[8]. - The company is committed to ESG initiatives, allocating $50 million towards environmental and social governance projects[5]. - Liquidity remains strong with cash reserves of $500 million, ensuring financial stability for future investments[5]. Market and User Growth - User data showed a growth of 15% in active users, totaling 5 million by the end of the quarter[5]. - User data showed a growth of 25% in active users, reaching 5 million by the end of the quarter[2]. - New product launches contributed to a 20% increase in sales, with the latest product line accounting for $250 million in revenue[5]. - Market expansion efforts have led to a 25% increase in market share in the Asia-Pacific region[5]. - The company plans to expand its market presence in Asia, targeting a 30% increase in market share within the next two years[5]. Strategic Initiatives - The company completed a strategic acquisition of a competitor for $300 million, expected to enhance its product offerings[5]. - A strategic acquisition was completed, adding $300 million in annual revenue and enhancing the company's product portfolio[6]. - The company is investing $100 million in R&D for new technologies aimed at enhancing user experience[5]. - The company is exploring partnerships to enhance its distribution network, aiming for a 25% increase in delivery efficiency[10]. Operational Risks and Challenges - The company is exposed to operational risks including supply chain interruptions and natural disasters, which could significantly impact production levels and financial results[31]. - The company’s financial performance is highly dependent on international market prices of metals, which are cyclical and volatile, potentially affecting revenues and cash flow[35]. - The company faces risks related to regulatory changes, including new trade restrictions and tariff escalations, which could adversely affect operations and financial performance[31]. - The company’s operations are subject to various compliance risks, including potential litigation and administrative proceedings that could materially impact financial performance[38]. - The company is exposed to operational risks that may result in increased costs or delays in project implementation, affecting growth prospects and profitability[86]. - The company is vulnerable to cyber events and IT system failures, which could disrupt business continuity and operational efficiency[31]. Compliance and Regulatory Environment - The company is classified as a non-accelerated filer under the SEC regulations[3]. - Nexa Resources S.A. has confirmed compliance with all reporting requirements under the Securities Exchange Act of 1934 for the past 12 months[3]. - The company is required to comply with the EU Corporate Sustainability Reporting Directive, which will apply to it starting in 2027 due to its employee and revenue thresholds[153]. - The company is subject to anti-corruption and anti-bribery laws across various jurisdictions, with potential violations leading to material adverse effects on its reputation and financial position[151]. Environmental and Social Governance (ESG) - The company is committed to meeting ESG standards, with failure to do so potentially affecting its reputation and financial condition[35]. - The company faces significant risks and uncertainties in achieving its ESG goals, including potential increases in operational costs related to monitoring and reporting[67]. - The company may incur additional expenses due to failures in its environmental control equipment, which could adversely affect its reputation and operations[147]. Production and Mining Operations - The company operates five polymetallic mines and three zinc smelters, with zinc as the main product, highlighting its extensive operational footprint in Latin America[18]. - In 2025, the company produced 315.6 thousand tonnes of zinc contained in concentrates, a decrease of 3.5% compared to 2024, primarily due to mining in lower-grade areas at the Vazante mine[171]. - Total smelting production in 2025 decreased by 5.1% compared to 2024, with smelters producing 564.4 thousand tonnes of zinc metal and oxide available for sale[174]. - The company was ranked among the top six global zinc producers in 2025, with zinc accounting for 46.9% of mined metal production on a zinc equivalent basis[171]. - The company has interests in three greenfield projects in Peru and owns 12.15% of Tinka Resources Limited, which holds the Ayawilca zinc-silver development project[189]. Financial Position and Debt - As of December 31, 2025, Nexa Resources S.A. had 132,438,611 common shares outstanding, each with a par value of US$1.00[3]. - The company’s ability to pay dividends is subject to various factors, including cash flow and earnings, with no current contractual restrictions on dividend payments[83]. - As of December 31, 2025, 21.2% of the company's total debt was subject to variable/floating interest rates, exposing it to interest rate fluctuations[132]. - The company’s access to capital markets may be limited by potential downgrades in its credit ratings, which could increase borrowing costs and trigger default clauses[136]. Tax and Legal Matters - The company faces a tax assessment totaling approximately $17.5 million from the Peruvian tax authority due to challenges regarding the deductibility of losses from hedge transactions[134]. - The company is engaged in ongoing tax-related matters with the Peruvian tax authority, which may impact its results, cash flow, and liquidity[164]. - The company has reclassified its derivative instruments as speculative for tax purposes since fiscal year 2019 to mitigate future deductibility challenges[134]. Community and Political Factors - Recent political instability in Peru, including the impeachment of President José Jeri, has increased uncertainty regarding economic policies, potentially impacting investor confidence[72]. - Protests and disputes with local communities have led to production losses, with an estimated zinc production loss of approximately 1.2kt due to a seven-day suspension at the Atacocha and El Porvenir mines[75]. - The establishment of the REINFO program in Peru has increased informal mining activities, potentially adversely affecting the company's operations and projects[157].

Revenue and Profitability - Revenue for 2025 was $11,890,000, representing a 1.8% increase from $11,679,000 in 2024[165] - Gross profit decreased to $4,630,000 in 2025, with a gross margin of 38.9%, down from $4,846,000 and 41.5% in 2024[168] - The company reported a net loss of $1,615,000 in 2025, compared to a net loss of $1,984,000 in 2024[165] - Revenue from the industrial market increased by 52.3% to $4,009,000 in 2025, while revenue from the medical market decreased by 7.6% to $3,629,000[166][167] Expenses - Engineering, research and development expenses were $1,504,000 in 2025, a decrease of 26.7% from $2,052,000 in 2024[169] - Selling, general and administrative expenses increased to $4,955,000 in 2025, up 2.3% from $4,844,000 in 2024[170] Cash Flow and Working Capital - Cash and cash equivalents as of December 31, 2025, were $2.7 million, with working capital of $4.6 million and no indebtedness[176] - For the year ended December 31, 2025, net cash used in operating activities was $112,000, attributed to a net loss of $1,615,000, adjusted for non-cash charges of $519,000 and cash provided by changes in operating assets and liabilities of $984,000[179] - Net cash used in investing activities for 2025 was $56,000, compared to $491,000 in 2024, which included $314,000 for acquiring assets of Conductive Transfers[181] - Net cash used in financing activities for 2025 was $91,000, consisting of $242,000 from the issuance of Common Stock, offset by $333,000 in dividends on Preferred Stock[182] Strategic Initiatives - The company expanded its capabilities through acquisitions, including Calman in 2023 and Conductive Transfers Limited in 2024, enhancing its product offerings and market presence[160] - The company prioritizes revenue growth in strategic markets and aims for gross margin expansion through favorable product mix and operational efficiencies[162] Tax and Financial Reporting - The effective tax rate is expected to remain higher than the U.S. statutory rate of 21% due to earnings in higher-rate jurisdictions[174] - The company recognizes revenue when goods or services are transferred to customers, following a five-step process as per ASC Topic 606[187] - The company evaluates the collectability of accounts receivable at each balance sheet date, using historical experience and economic conditions[190] - Goodwill is tested for impairment at least annually, with assessments requiring management judgment on qualitative and quantitative factors[191] Balance Sheet Items - Accounts receivable decreased from $1,612,000 at December 31, 2024 to $1,542,000 at December 31, 2025, reflecting changes in shipment timing and cash collections[180] - Inventories decreased from $2,009,000 at December 31, 2024 to $1,801,000 at December 31, 2025, primarily due to variability in material purchases and customer demand[180] - The company did not have any off-balance sheet arrangements as of December 31, 2025 and 2024, indicating no exposure to related financial risks[184] Financial Instruments - The conversion of Series A Convertible Preferred Stock into Common Stock resulted in annual cash savings of $400,000 by eliminating an 8.0% cumulative cash dividend[177]

Store Operations and Expansion - Ulta U.S. operates over 1,500 retail stores, with plans to grow to more than 1,800 stores, targeting a market valued at approximately $126 billion in 2025[26][30]. - As of January 31, 2026, the company operated a total of 1,591 retail stores, with 1,505 located in the United States and 86 internationally[183]. - The company operates 84 Space NK stores in the U.K. and two in Ireland, with additional locations in Mexico, Kuwait, and the UAE[52]. - The company expanded internationally in 2025 through the acquisition of Space NK and established a joint venture in Mexico, indicating a strategic move towards market expansion[128]. - The company’s retail stores are predominantly located in high-traffic areas, with typical store sizes around 10,000 square feet[181]. Loyalty Program and Customer Engagement - In fiscal 2025, 73% of Ulta U.S.'s loyalty members transacted solely in physical stores, highlighting the preference for in-store shopping[28]. - The loyalty program has over 46 million members, contributing approximately 95% of total sales in fiscal 2025, with loyalty members historically spending over three times as much as store-only guests[42][32]. - Digital channels accounted for 19% of loyalty members shopping both in-store and online, emphasizing the importance of omnichannel engagement[32]. - The company’s loyalty program provides insights into customer preferences, enhancing its ability to deliver personalized experiences[206]. Product Offerings and Marketplace - Ulta U.S. offers approximately 30,000 products from around 600 brands, with top ten brand partners accounting for approximately 51% of total net sales in fiscal 2025[36][37]. - The launch of UB MarketplaceTM in fiscal 2025 allows Ulta U.S. to expand its product assortment with minimal inventory risk, earning commissions on sales from marketplace brands[47][49]. - The Company’s private label and exclusive products represented approximately 4% of net sales in fiscal 2025, with exclusive products contributing to 11% of total net sales[38]. Digital and Technological Advancements - Ulta U.S. is enhancing its digital capabilities, including faster online order fulfillment and features like virtual try-on, to improve customer experience[35][34]. - The Company has made significant investments in technology infrastructure, including upgrading its enterprise resource planning platform and POS systems[72]. - The company is expanding and upgrading its information systems to support growth, which is critical for managing operations and e-commerce[141]. - The development and effective use of AI technologies are critical, as failure to adapt could negatively impact competitive positioning and financial results[112]. Financial Performance and Market Conditions - The company’s business is subject to seasonal fluctuations, with significant net sales and profits realized during the fourth quarter due to the holiday selling season[86]. - Macroeconomic conditions, including inflation and elevated interest rates, have negatively impacted the company's financial condition and profitability, with expectations of continued pressure into 2026[90]. - Consumer purchases of discretionary items, including beauty products, may decline due to economic uncertainty, adversely affecting the company's financial performance[92]. - Operating profit is anticipated to increase due to revenue growth, leveraging fixed costs, and improving operating efficiencies, despite incremental investments in guest experience and advertising[210]. Risks and Challenges - The company faces risks from geopolitical events, which could have a greater impact on its international operations compared to when it was solely U.S.-based[91]. - The company must manage inventory effectively to avoid excess stock or shortages, as miscalculations could harm financial performance[105]. - The company is increasingly vulnerable to cybersecurity risks, which could compromise sensitive information and negatively impact business operations[143]. - The company is subject to various regulatory requirements affecting its product offerings, including labeling and safety standards[81]. Marketing and Brand Strategy - The company is directing a growing percentage of its marketing expenses towards digital and social media to enhance brand awareness and attract new customers[43]. - The company believes its trademarks, especially those related to the Ulta Beauty brand, have significant value for brand recognition[79]. - The company aims to drive core business growth through operational excellence and an elevated go-to-market approach, focusing on three strategic priorities: core business growth, scaling new businesses, and aligning for future success[207]. Supply Chain and Distribution - The Company operates four regional distribution centers and two market fulfillment centers to support both stores and e-commerce demand[70]. - The company operates four regional distribution centers and one fast fulfillment center, with plans for future growth and optimization of its distribution infrastructure to support anticipated growth[123]. - Increased costs or interruptions in third-party vendors' overseas sourcing operations could disrupt production and shipment, potentially leading to lost sales and increased costs[124]. Corporate Governance and Compliance - The company has established science-based targets to reduce Scope 1, 2, and 3 greenhouse gas emissions as part of its sustainability strategy[75]. - The company is subject to litigation and regulatory proceedings that could materially adversely affect its business and financial condition, with potential losses exceeding accrued liabilities[152]. - The company maintains a stock repurchase program that may affect stock price but does not guarantee enhanced shareholder value[139].

Product Development - Vivani Medical is developing miniature, ultra long-acting subdermal drug implants using its proprietary NanoPortal™ technology, aimed at improving medication adherence for chronic diseases [453]. - Vivani's lead program, NPM-139, a six-month GLP-1 (semaglutide) implant, demonstrated approximately 20% weight loss in preclinical studies, maintained for over six months after a single administration [456]. - The NPM-115 exenatide implant showed comparable weight loss results of approximately 20% in preclinical studies with obese mice, indicating potential for effective chronic weight management [459]. - The FDA lifted the clinical hold on NPM-119, allowing for the initiation of a first-in-human study for the treatment of type 2 diabetes [465]. - Vivani plans to initiate a Phase 1 clinical study for NPM-139 in the first half of 2026, pending regulatory clearance [472]. - The LIBERATE-1 clinical trial for NPM-115 demonstrated a positive safety and tolerability profile, with top-line data released in August 2025 [463]. Financial Performance - The company has experienced recurring operating losses and negative cash flows since inception, with expectations to continue this trend for the foreseeable future [492]. - Net loss for the year ended December 31, 2025 was $26.6 million, an increase of $3.1 million compared to a net loss of $23.5 million in 2024 [512]. - Cash used in operating activities during 2025 was $24.3 million, compared to $20.8 million in 2024 [514][515]. - Net cash used in investing activities was $1.2 million in 2025, up from $0.6 million in 2024 [516]. - Financing activities provided $23.3 million of cash in 2025, primarily from a registered direct offering and securities purchase agreements [516]. Capital and Funding - On March 1, 2024, the company raised $15 million through a registered direct offering of 3,947,368 shares at $3.80 per share, resulting in net proceeds of $13.7 million after issuance costs [478]. - On April 22, 2024, the company entered into an Open Market Sale Agreement to offer up to $75 million in common stock through Jefferies LLC [479]. - In 2025, the company issued 7,480,158 shares under private sales transactions, generating gross proceeds of $8.6 million, with an expected additional $12.6 million from remaining shares in 2026 [486]. - On October 26, 2025, the company completed a private placement of 3,703,703 shares at $1.62 per share, resulting in gross proceeds of $6 million [487]. - Concurrently, the company raised approximately $9.7 million from a registered direct offering of 6,000,000 shares, netting $8.7 million after fees [489]. - The company received $35,000 in grants during the twelve months ended December 31, 2025, compared to $200,000 in the previous year, reflecting a decrease in grant funding [491]. Research and Development - Research and development expense for the year ended December 31, 2025 was $18.1 million, an increase of $2.4 million or 15% compared to $15.7 million in 2024 [509]. - The company expects research and development expenses to increase in the future as it pursues enhancements of existing products and develops new technologies [513]. Strategic Initiatives - Vivani is exploring strategic options for its neurostimulation technology through its subsidiary Cortigent, including a potential spin-off or IPO [474]. - If Cortigent successfully completes an IPO, it will repay Vivani $1.5 million from the proceeds and issue a promissory note for $2 million [475]. - The strategic goal of the potential spin-off or IPO is to create two focused companies to enhance value in their respective therapeutic areas [476]. - On April 12, 2025, Okava Pharmaceuticals expanded its collaboration with Vivani to include the development of a long-acting GLP-1 therapy for dogs, adding $5 million in regulatory milestone payments for obesity treatment [477]. Operational Outlook - The company estimates that available cash will meet its obligations into mid-2027, but additional capital will be necessary for ongoing operations [493]. - The company is subject to risks associated with developing pharmaceutical products, including significant increases in operating expenses as clinical trials and research activities expand [496]. - General and administrative expense for the year ended December 31, 2025 was $9.4 million, up $0.5 million or 6% from $8.9 million in 2024 [510]. - The company has not declared or paid dividends and has no plans to do so in the foreseeable future [507]. - As of December 31, 2025, the company had no off-balance sheet arrangements [518]. - The majority of operating expenses were denominated in U.S. dollars, with no foreign currency forward contracts currently in place [520].