Financial Performance - Net revenues for the fourth quarter of 2025 were $3,537, a decrease of 12.0% from $4,020 in 2024, primarily driven by a decrease in cigarettes and filtered cigars sales [156]. - Net revenues for the full year 2025 were $17,587, a decrease of 27.9% from $24,382 in 2024 [157]. - Gross loss for the fourth quarter of 2025 improved to a loss of $834 compared to a loss of $1,254 in the prior year period [156]. - Operating loss for the full year 2025 was $11,566, compared to a loss of $13,950 in 2024, representing a 17.1% improvement [157]. - Net loss for the full year 2025 was $13,117, representing a net loss per share of $71.26 compared with a net loss for the full year 2024 of $15,495, representing a net loss per share of $27,812.56 [157]. Cash and Working Capital - As of December 31, 2025, the company had $7,149 in cash and cash equivalents, with working capital from continuing operations of $10,359 [169]. - As of December 31, 2025, cash and cash equivalents increased to $7,149 million from $4,422 million in 2024, while working capital improved to $10,359 million from $1,790 million, representing an increase of $8,569 million [171][174]. - Cash used in operating activities decreased by $6,622 million from $14,345 million in 2024 to $7,723 million in 2025, primarily due to a lower consolidated net loss of $10,110 million [175][176]. - Cash provided by financing activities decreased by $5,893 million from $16,848 million in 2024 to $10,955 million in 2025, attributed to lower net proceeds from common stock issuances and increased payments of long-term debt [178]. Investments and Financing - Cash used in investing activities rose to $505 million in 2025 from $139 million in 2024, driven by a decrease in cash outflows related to acquisitions and an increase in cash inflows from the sale of property, plant, and equipment [177]. - The company received $9,500 million in cash from settling litigation related to a fire at its Grass Valley manufacturing facility in Oregon [181]. - A sales agreement was established allowing the company to sell up to $25,000 million of common stock, although no shares were sold under this agreement during the three months ended December 31, 2025 [182]. - On March 20, 2026, the company entered into a securities purchase agreement for the sale of $20,000 million of Series B Convertible Preferred Stock, with an initial conversion price of $3.57 per share [183]. - The company used net proceeds from the Series B offering to repurchase $9.65 million of outstanding Series A Convertible Preferred Stock issued in August 2025 [185]. Operational Concerns - The company has substantial doubt regarding its ability to continue operations without raising additional capital, which may require liquidation of assets or seeking bankruptcy protection [170]. - No impairment indicators were identified for long-lived assets during 2025 [199]. - The company has not reported any significant manufacturing disruptions that would impact asset valuations [198]. Valuation and Risk Management - The company uses a Monte Carlo valuation model to estimate the fair value of detachable warrants, relying on key assumptions such as expected future volatility and the expected life of the warrants [200]. - Significant management judgment is required for estimating cash flows and useful lives of long-lived assets and definite-lived intangible assets [198]. - Unforeseen changes, such as loss of significant customers or technology obsolescence, could materially affect estimates and assumptions regarding long-lived assets [198]. - The company is required to redeem certain warrants through cash or other assets, which are classified as liabilities [200]. - The fair value of warrants is measured at each issuance and period-end date [200]. - There are no off-balance sheet arrangements as defined by Item 303(a)(4) of Regulation S-K [201]. - The company has not disclosed any off-balance sheet arrangements that could impact financial reporting [201]. - Quantitative and qualitative disclosures about market risk are not required for smaller reporting companies [202].

Financial Performance - Mtron's total revenues for the year ended December 31, 2025, were $54,417,000, an increase from $49,012,000 in 2024, representing an increase of approximately 8.2%[30] - Total revenues increased by $5,405, or 11.0%, from $49,012 in 2024 to $54,417 in 2025, driven by strong defense program product shipments and increased avionics and industrial sector shipments[141] - Net income rose to $8,447,000 in 2025, compared to $7,636,000 in 2024, marking an increase of 10.6%[188] - Operating income improved to $10,291,000 in 2025, up from $9,394,000 in 2024, reflecting a growth of 9.6%[188] - Adjusted EBITDA increased by $1,441 from $11,141 in 2024 to $12,582 in 2025, primarily due to higher revenues and lower incentive compensation[154] - Interest income, net increased by $296, or 121.8%, from $243 in 2024 to $539 in 2025, driven by higher average balances invested in money market mutual funds[145] - Income tax expense increased by $368, or 17.2%, from $2,139 in 2024 to $2,507 in 2025, primarily due to the increase in income before income taxes[146] Revenue Sources and Market Segments - International revenues accounted for $12,635,000, or 23.2% of total revenues in 2025, compared to $11,029,000, or 22.5% in 2024, showing growth in global markets[36] - The aerospace and defense sector remains the largest market segment, contributing 65.2% of total revenues in 2025, down from 67.3% in 2024[28] - A significant portion of the company's revenue is derived from the aerospace and defense industry, which is subject to unpredictable government spending and procurement policies[70] - The top four customers accounted for 61.0% of total revenues in 2025, a decrease from 65.7% in 2024, indicating a slight diversification in the customer base[30] Operational Metrics - The company's order backlog increased significantly to $76,425,000 as of December 31, 2025, compared to $47,239,000 in 2024, indicating strong future demand[38] - Order backlog as of December 31, 2025, was $76,425, an increase of $29,186, or 61.8%, from $47,239 as of December 31, 2024[147] - The company is dependent on a single line of business, with virtually all revenues in 2025 and 2024 derived from sales of electronic components[61] - Four customers represented approximately 71.4% of the gross accounts receivable balance as of December 31, 2025[66] Costs and Expenses - Total costs and expenses rose by $4,508, or 11.4%, from $39,618 in 2024 to $44,126 in 2025, primarily due to increased manufacturing costs and higher engineering, selling, and administrative expenses[143] - Manufacturing cost of sales increased by $3,897, or 14.8%, from $26,372 in 2024 to $30,269 in 2025, driven by increased production of new products and tariff impacts[149] - Engineering, selling, and administrative expenses rose by $611, or 4.6%, from $13,246 in 2024 to $13,857 in 2025, reflecting continued investment in research and development[149] - Gross margin decreased by 180 basis points from 46.2% in 2024 to 44.4% in 2025, reflecting product mix and higher tariff-related costs[144] Cash Flow and Liquidity - Cash and cash equivalents increased to $20,891 thousand as of December 31, 2025, up from $12,641 thousand in 2024, representing a growth of 65.5%[158] - Cash provided by operating activities rose to $10,659 thousand in 2025, an increase of 41.7% from $7,521 thousand in 2024[160] - Working capital improved significantly to $56,326 thousand in 2025, compared to $24,536 thousand in 2024, reflecting a 129.0% increase[160] - The current ratio improved to 12.5 in 2025 from 5.7 in 2024, indicating stronger liquidity[160] - Cash used in investing activities increased to $2,551 thousand in 2025 from $1,898 thousand in 2024, marking a rise of 34.4% due to equipment purchases for growth[161] - Cash provided by financing activities decreased to $142 thousand in 2025, down 95.4% from $3,105 thousand in 2024, primarily due to lower stock option exercises[164] Strategic Initiatives - The company aims to enhance its product portfolio through strategic partnerships and acquisitions, focusing on multi-component integrated offerings[20] - The company intends to explore acquisitions to enhance or expand its business, but may face challenges in finding and integrating such opportunities[71] - The company has implemented generative AI technologies, which may introduce operational and cybersecurity risks despite potential innovation opportunities[99] Compliance and Regulatory Risks - The company is subject to various procurement regulations and must comply with the Cybersecurity Maturity Model Certification (CMMC) program in the coming years[82] - The company has not experienced material effects from compliance with current environmental laws and regulations, but future regulations may impose additional costs[46] - Macroeconomic fluctuations and geopolitical risks could adversely affect the company's financial performance and global operations[59] - Future tariffs and trade restrictions may increase vendor product prices, adversely impacting demand and financial results[95] Employee Relations and Workforce - As of December 31, 2025, the company employed a total of 415 people, including 239 full-time, 20 part-time employees, and 156 contractors[47] - The company considers its relationships with employees to be good, with no employees represented by a labor union[49] Cybersecurity and IT Risks - Cybersecurity risks could negatively impact the company's operations and financial results due to potential data breaches and operational disruptions[100] - The company faces various cybersecurity threats, including malware and ransomware attacks, which are increasingly sophisticated and evolving[101] - The company maintains an internal IT team that participates in industry information sharing groups to enhance its cybersecurity efforts[120] - The Audit Committee oversees cybersecurity and information technology risks, ensuring sufficient resources are allocated for these functions[119] - The company relies on third-party providers for critical services, which may lead to operational disruptions and increased costs if these providers experience failures[97] Stock and Equity - The company's common stock price fluctuated between $59.64 and $35.00 from January 1, 2025, to December 31, 2025, indicating significant volatility[108] - The company does not expect to pay cash dividends for the foreseeable future due to long-term growth objectives and credit facility covenants[131] - The company maintains a policy of not paying cash dividends to support long-term growth objectives and potential acquisitions[166] Financial Position - Total assets increased to $68,383,000 in 2025 from $36,560,000 in 2024, representing an increase of 87.2%[191] - Total stockholders' equity reached $63,215,000 in 2025, up from $31,272,000 in 2024, indicating a growth of 102.5%[191] - Basic income per share increased to $2.94 in 2025 from $2.78 in 2024, a rise of 5.8%[188] - The company has a $10.0 million revolving credit facility and a $10.0 million delayed draw term loan facility, with interest rates based on SOFR plus a margin of 2.00% to 3.00%[169] - Total contractual obligations amount to $256 thousand, with payments due primarily in 2026 and 2027[167]

Financial Performance - Expected consolidated revenues for Q4 2025 are at least $261 million, up from $248 million in Q4 2024, representing a growth of approximately 5.2%[3] - Expected Adjusted EBITDA for Q4 2025 is at least $63 million, an increase from $53.7 million in Q4 2024, reflecting a growth of about 17.5%[3] - Expected full year 2026 consolidated revenues are projected to be between $1.045 billion and $1.097 billion, compared to $948.9 million in 2025, indicating a growth of at least 10.2%[11] - Expected Adjusted EBITDA for 2026 is projected to be between $234 million and $242 million, which includes approximately $7 million of public company costs not incurred in 2025[11] - Expected net loss for 2025 is not larger than $25.4 million, compared to a net loss of $25.1 million in 2024[3] Operational Metrics - Total outpatient procedures for 2025 reached 2,418,096, a 4.6% increase from 2,312,645 in 2024[5] - System-wide total procedures for Q4 2025 were 1,027,590, a 6.8% increase from 962,520 in Q4 2024[5] - Full year PET imaging volumes increased by 17.0% on a consolidated basis, supported by the adoption of radiopharmaceuticals[9] - The percentage of advanced procedures increased to 30.1% in 2025 from 29.2% in 2024, reflecting a 90 basis points improvement[5] Expansion Activities - The company opened 9 de novo centers in 2025, including 6 wholly owned and 3 through joint ventures, and completed one acquisition[6]

Mergers and Acquisitions - United Security Bancshares announced a merger with Community West Bancshares, expected to complete in Q2 2026[13]. - The Company signed a definitive merger agreement with Community West Bancshares on December 16, 2025, expected to close in the second quarter of 2026[133]. Branch and Market Presence - As of December 31, 2025, United Security Bank operates 3 branches and 1 construction lending office in Fresno, California, with a total of 12 locations[14]. - The Bank's deposit market share in Fresno County is 4.75%, ranking 9th among 53 FDIC-insured institutions[29]. - The Bank's primary market areas include Fresno, Madera, Kern, and Santa Clara Counties, with a competitive landscape for loans and deposits[27][28]. - The Company has 13 branches and two loan production offices located primarily throughout California's Central Valley[117]. Financial Performance - Net income decreased to $12.3 million for the year ended December 31, 2025, compared to $14.8 million during the year ended December 31, 2024[138]. - Total deposits increased 2.9% to $1.09 billion, compared to $1.06 billion at December 31, 2024[138]. - Net interest margin increased to 4.41% at December 31, 2025, compared to 4.26% at December 31, 2024[138]. - Interest expense decreased 13.38% to $12.0 million for the year ended December 31, 2025, compared to $13.9 million for the year ended December 31, 2024[138]. - Noninterest income increased $373,000 to $5.1 million for the year ended December 31, 2025, compared to $4.7 million for the year ended December 31, 2024[138]. - Provision for credit losses was $5.6 million for the year ended December 31, 2025, compared to $3.0 million for the previous year[138]. - Noninterest expense increased 11.70% to $31.6 million, compared to $28.3 million for the year ended December 31, 2024[138]. - Total assets increased to $1.25 billion at year-end 2025, up from $1.21 billion in 2024[147]. - Return on average assets decreased to 1.01% in 2025 from 1.22% in 2024[148]. - Return on average equity fell to 9.02% in 2025, down from 11.52% in 2024[148]. Capital and Regulatory Compliance - The Company is a bank holding company regulated by the Federal Reserve System and subject to SEC regulations[37]. - The Dodd-Frank Act requires the Company to act as a source of financial strength to the Bank, committing resources to support it[38]. - The Company must rely on its own resources to pay operating expenses and dividends, with potential restrictions on dividend payments from the Bank[39]. - The Company and the Bank are subject to capital adequacy guidelines, requiring minimum capital ratios to avoid regulatory actions[55]. - As of December 31, 2025, the Company and the Bank were classified as "well capitalized" under applicable standards[58]. - The Federal Deposit Insurance Corporation Improvement Act mandates prompt corrective action for banks falling below minimum capital ratios[59]. - The Company must obtain Federal Reserve approval for significant acquisitions or mergers, limiting its business expansion[43]. - The Company is subject to the Bank Merger Act, which grants regulatory agencies authority to review proposed bank mergers[102]. Loan Portfolio and Credit Losses - Total loans, net of unearned fees, decreased 1.4% to $915.4 million, compared to $928.5 million at December 31, 2024[138]. - The provision for credit losses rose to $5.6 million in 2025, compared to $3.0 million in 2024, reflecting increased risk[147]. - The allowance for credit losses decreased to 1.62% of total loans at December 31, 2025, from 1.72% at December 31, 2024[161]. - The reserve against the student loan portfolio totaled $7.7 million at December 31, 2025, an increase from $7.0 million at December 31, 2024[176]. - The company charged off or had partial charge-offs on 104 loans to 34 borrowers in 2025, compared to 52 loans to 20 borrowers in 2024[205]. - Management believes the current allowance for credit losses is adequate to absorb known and inherent risks in the loan portfolio[207]. Deposits and Funding - Core deposits represented 90.00% of the total deposit portfolio at December 31, 2025, up from 87.38% in 2024[187]. - Total deposits increased by $31.2 million, or 2.94%, from $1,057.6 million in 2024 to $1,088.8 million in 2025[188]. - Noninterest-bearing deposits rose by 17.14%, from $360.2 million in 2024 to $421.9 million in 2025[188]. - Interest-bearing deposits decreased by $30.6 million, or 4.39%, from $697.5 million in 2024 to $666.9 million in 2025[188]. - The Bank held no short-term borrowings as of December 31, 2025, maintaining lines of credit totaling $480.8 million with the FRB[194]. Compliance and Risk Management - The Company has adopted a customer information security program to comply with regulatory requirements regarding the safeguarding of customer information[99]. - The Company has implemented privacy policies addressing restrictions on the disclosure of non-public personal information[101]. - The Company must comply with the USA PATRIOT Act, requiring policies and procedures for anti-money laundering and suspicious activity reporting[81]. - The Bank is subject to various federal and state consumer protection laws, which can result in significant liabilities for violations[77]. - The Anti-Money Laundering Act of 2020 represents significant changes to anti-money laundering laws, enhancing government oversight and compliance requirements[83]. - The AML Act expands federal AML laws to a broader range of industries, including cryptocurrency and precious metals[85]. Employee and Community Engagement - The Company employed 113 full-time equivalent staff as of December 31, 2025[108]. - The Company received a Community Reinvestment Act rating of "Satisfactory" as of its most recent examination[97]. - The Company provides a comprehensive benefits package including 100% matching contributions up to 4% of salary for retirement plans[110]. - The Company has a code of ethics that prohibits discrimination or harassment and requires annual training for employees[111].

Financial Performance - Net income for 2025 was $863 million, a decrease of 30.8% from $1.2 billion in 2024, primarily due to unfavorable fair value movements in fixed index annuity reserves [461]. - Revenues for the year ended December 31, 2025, were $75.1 billion, a decrease from $86.0 billion in 2024 and $95.9 billion in 2023 [552]. - Net income attributable to Brookfield shareholders for 2025 was $1.3 billion, compared to $641 million in 2024 [552]. - Distributable earnings before realizations for 2025 were $5.4 billion, up from $4.9 billion in 2024 [552]. - Net income for 2025 was $863 million, a decrease from $1,247 million in 2024, while Distributable Operating Earnings (DOE) increased to $1,699 million from $1,374 million in 2024 [589]. Asset and Equity Growth - Total assets increased to $157.2 billion in 2025 from $140.0 billion in 2024, representing a growth of 12.8% [458]. - Total equity increased by $4.8 billion to $17.9 billion, primarily due to the issuance of incremental Class C shares and comprehensive income of $1.8 billion [493]. - Total equity as of December 31, 2025, was $17,917 million, up from $13,076 million in 2024, with Adjusted Equity at $16,837 million compared to $11,760 million in 2024 [590]. - Cash and cash equivalents rose by $771 million to $13.0 billion, primarily due to annuity sales not yet deployed into investments [484]. - Total investments increased by $17.1 billion to $110.0 billion, attributed to annuity sales and favorable fair value movements [485]. Premiums and Sales - Net premiums and other policy revenue decreased to $5.3 billion in 2025 from $9.0 billion in 2024, a decline of 41.1% driven by fewer jumbo deals in the PRT business [462]. - For the year ended December 31, 2025, total net premiums were $4.5 billion, a decrease of $3.8 billion from $8.3 billion in 2024, primarily due to fewer jumbo deals in the Pension Risk Transfer (PRT) business [520]. - Total gross annuity sales for 2025 reached $19.8 billion, an increase of $4.0 billion from $15.8 billion in 2024, driven by higher sales in fixed index retail products and the launch of funding agreement programs [524]. - Total net premiums for the Annuities segment increased by $3.3 billion in 2024, contributing to the overall growth in net premiums [521]. Investment Income and Expenses - Net investment income rose by $1.6 billion to $5.8 billion in 2025, reflecting growth in the investment portfolio and higher yielding investment strategies [463]. - Interest expense increased by $17 million to $379 million in 2025, primarily due to additional borrowings for investment purchases [471]. - Cash outflows from investing activities in 2025 were $9.7 billion, reflecting the deployment of cash into higher yielding investments, compared to inflows of $1.4 billion in 2024 [538]. Operating Expenses and Liabilities - Operating expenses rose to $1.4 billion in 2025, a slight increase of 0.4% compared to $1.4 billion in 2024, driven by costs to support business growth [470]. - Interest sensitive contract benefits increased by $198 million to $2.1 billion in 2025, primarily due to the full year impact from AEL's PAB liabilities [466]. - The change in fair value of market risk benefits resulted in a loss of $725 million in 2025, primarily due to the assumption of AEL's market risk benefit liabilities [469]. - Amortization of deferred policy acquisition costs, deferred sales inducements, and value of business acquired increased to $1.4 billion in 2025 from $1.2 billion in 2024, driven by growth in DAC and DSI from new sales [467]. Risk and Compliance - The company is in compliance with all capital requirements as of December 31, 2025, and 2024 [551]. - The company is involved in various legal actions, but does not expect these to materially affect its financial condition or results of operations [571]. - The company has established disaster recovery and business continuity plans to manage operational risks under adverse conditions [573]. Market and Economic Sensitivity - If interest rates were to increase by 50 basis points, the fair value of fixed maturity securities would decrease by approximately $1.7 billion in 2025 [563]. - A hypothetical 10% decline in public equity market prices would result in an estimated net decrease of $545 million in net income for 2025 [566]. - Fair value assessments of investments involve significant management judgment, particularly for Level 3 investments, which are subject to unobservable inputs [575]. Liquidity and Commitments - As of December 31, 2025, total liquidity was $62.6 billion, including $120 million in unrestricted cash and cash equivalents [531]. - The company maintained $2.0 billion of undrawn equity commitment from Brookfield to fund future growth as of December 31, 2025 [529]. - The company reported a total of $1.5 billion in undrawn commitments related to Federal Home Loan Bank programs as of December 31, 2025 [530]. - Total unfunded investment commitments amounted to $12.3 billion as of December 31, 2025, an increase from $10.3 billion in 2024 [545].

Financial Performance - Net income for 2025 was $863 million, a decrease of 30.8% from $1.2 billion in 2024, primarily due to unfavorable fair value movements in fixed index annuity reserves [461]. - Revenues for the year ended December 31, 2025, were $75.1 billion, down from $86.0 billion in 2024 and $95.9 billion in 2023 [552]. - Net income attributable to Brookfield shareholders for 2025 was $1.3 billion, compared to $641 million in 2024 [552]. - Distributable earnings before realizations for 2025 were $5.4 billion, an increase from $4.9 billion in 2024 [552]. - Net income for 2025 was $863 million, a decrease from $1,247 million in 2024, while DOE increased to $1,699 million from $1,374 million in the same period [589]. Assets and Investments - Total assets increased to $157.2 billion in 2025 from $140.0 billion in 2024, representing a growth of 12.8% [458]. - Total assets increased by $17.2 billion to $157.2 billion, driven by net annuity inflows and favorable fair value movements in equity securities [483]. - Total investments increased by $17.1 billion to $110.0 billion, attributed to annuity sales and favorable fair value movements [485]. - Cash and cash equivalents rose by $771 million to $13.0 billion, primarily due to annuity sales not yet deployed into investments [484]. - The company had total corporate borrowings of $628 million and non-recourse borrowings of $4.9 billion as of December 31, 2025 [546]. Earnings and Operating Metrics - Distributable operating earnings (DOE) increased to $1.7 billion in 2025, up 23.7% from $1.4 billion in 2024 [471]. - Annuities segment DOE increased by $443 million to $1.7 billion, driven by an increased asset base and higher yielding investment strategies [496]. - P&C segment DOE increased by $136 million to $399 million, primarily due to improved loss experience from underwriting actions [497]. - Life Insurance segment DOE decreased by $41 million to $153 million, driven by lower retained business due to a reinsurance agreement [497]. - Corporate and Other segment DOE decreased by $213 million to -$516 million, impacted by increased tax expenses and operating costs [498]. Cash Flow and Liquidity - Cash generated from operating activities in 2025 was $2.6 billion, down from $4.6 billion in 2024, mainly due to fewer jumbo deals in the PRT business [536]. - Total liquidity as of December 31, 2025, was $62.6 billion, an increase from $53.0 billion in 2024, with 91% held by U.S. insurance subsidiaries [532][533]. - Cash and cash equivalents at the end of 2025 were $13.0 billion, up from $12.2 billion in 2024 [535]. - The company experienced cash outflows of $9.7 billion from investing activities in 2025, compared to inflows of $1.4 billion in 2024, as it deployed cash into higher yielding investments [538]. - Net cash inflow from financing activities in 2025 was $7.8 billion, significantly higher than $1.9 billion in 2024, driven by deposits on policyholders' accounts [540]. Fair Value and Risk Management - The change in fair value of market risk benefits resulted in a loss of $725 million in 2025, primarily due to the assumption of AEL's market risk benefit liabilities [469]. - If interest rates were to increase by 50 basis points, the fair value of fixed maturity securities would decrease by approximately $1.7 billion in 2025 [563]. - A hypothetical 10% decline in public equity market prices would result in an estimated net decrease of $545 million in net income for 2025 [566]. - The company had a notional $11.2 billion in foreign exchange forward and cross currency forward contracts to hedge against foreign currency risk, up from $6.7 billion in 2024 [542]. Policy and Regulatory Matters - The effective tax rate for 2025 was recorded at 10.8%, compared to (2.8)% in 2024 and 2.2% in 2023, influenced by the mix of earnings across jurisdictions [526]. - The company is in compliance with all capital requirements as of December 31, 2025, and 2024 [551]. - The company has established disaster recovery and business continuity plans to manage operations under adverse conditions [573]. Accounting and Estimation - Management's critical accounting estimates include fair value assessments of investments and the valuation of business acquired (VOBA), which may materially impact financial condition [576]. - The company reviews and updates cash flow assumptions for future policy benefits at least annually, with significant assumptions including longevity and mortality rates [577]. - Embedded derivatives in policyholders' account balances are estimated using projected contract values and minimum guaranteed values, with significant assumptions including option budget and lapse rates [578]. - Liabilities for unpaid claims and claim adjustment expenses involve significant estimation uncertainty, particularly for claims with long reporting lags [580]. - The company utilizes Non-GAAP measures such as DOE and Adjusted Equity to provide additional insights into operating performance and liquidity [583].

Financial Performance - Net income for 2025 was $863 million, a decrease of 30.8% from $1.2 billion in 2024, primarily due to unfavorable fair value movements[461] - Revenues for the year ended December 31, 2025, were $75.1 billion, down from $86.0 billion in 2024 and $95.9 billion in 2023[552] - Net income attributable to Brookfield shareholders for 2025 was $1.3 billion, compared to $641 million in 2024[552] - Distributable earnings before realizations for 2025 were $5.4 billion, an increase from $4.9 billion in 2024[552] - Net income for 2025 was $863 million, a decrease from $1,247 million in 2024 and an increase from $797 million in 2023[589] Assets and Investments - Total assets increased to $157.2 billion in 2025 from $140.0 billion in 2024, representing a growth of 12.8%[458] - Total investments increased by $17.1 billion to $110.0 billion, attributed to annuity sales and favorable fair value movements[485] - Cash and cash equivalents rose by $771 million to $13.0 billion, primarily due to annuity sales not yet deployed into investments[484] - Future policy benefits and policyholders' account balances increased by $12.1 billion to $109.2 billion, driven by annuity sales and fair value movements[492] - Total equity increased by $4.8 billion to $17.9 billion, primarily due to the issuance of incremental Class C shares and comprehensive income of $1.8 billion[493] Revenue Sources - Net premiums and other policy revenue decreased to $5.3 billion in 2025 from $9.0 billion in 2024, a decline of 41.1% driven by fewer jumbo deals in the PRT business[462] - For the year ended December 31, 2025, total net premiums were $4.5 billion, a decrease of $3.8 billion from $8.3 billion in 2024, primarily due to fewer jumbo deals in the Pension Risk Transfer (PRT) business[520] - Total gross annuity sales for 2025 reached $19.8 billion, an increase of $4.0 billion from $15.8 billion in 2024, driven by higher sales in fixed index retail products and the launch of funding agreement programs[524] Operating Expenses and Earnings - Operating expenses rose to $1.4 billion in 2025, a slight increase of 0.4% from $1.36 billion in 2024, driven by costs to support business growth[470] - Distributable operating earnings (DOE) increased to $1.7 billion in 2025, up 23.7% from $1.4 billion in 2024[471] - Annuities segment DOE increased by $443 million to $1.7 billion, driven by an increased asset base and higher yielding investment strategies[496] - P&C segment DOE increased by $136 million to $399 million, primarily due to improved loss experience from underwriting actions[497] - Life Insurance segment DOE decreased by $41 million to $153 million, mainly due to lower retained business from a reinsurance agreement[497] Financial Liabilities and Risks - The change in fair value of market risk benefits resulted in a loss of $725 million in 2025, primarily due to movements in interest rates and equity markets[469] - Interest sensitive contract benefits increased by $198 million in 2025, primarily due to the full year impact from AEL's policyholder account balances[466] - The company had total corporate borrowings of $628 million and non-recourse borrowings of $4.9 billion as of December 31, 2025[546] - The company’s liabilities for unpaid claims and claim adjustment expenses are subject to significant estimation uncertainty, impacting financial results[580] - Future policy benefits (FPB) assumptions include longevity, mortality, and lapse rates, which require significant judgment and can materially impact liability valuations[577] Tax and Compliance - The effective tax rate for 2025 was 10.8%, compared to (2.8)% in 2024 and 2.2% in 2023, influenced by the mix of earnings across different jurisdictions[526] - The company is in compliance with all capital requirements as of December 31, 2025, and 2024[551] Liquidity and Cash Flow - Cash generated from operating activities in 2025 was $2.6 billion, down from $4.6 billion in 2024, mainly due to fewer jumbo deals in the PRT business[536] - Cash outflows from investing activities in 2025 were $9.7 billion, reflecting the deployment of cash into higher yielding investments, compared to inflows of $1.4 billion in 2024[538] - Net cash inflow from financing activities in 2025 was $7.8 billion, significantly higher than $1.9 billion in 2024, driven by deposits on policyholders' accounts and net borrowings[540] - As of December 31, 2025, total liquidity was $62.6 billion, including $120 million in unrestricted cash and cash equivalents[531] - The company maintained $1.5 billion in undrawn commitments related to Federal Home Loan Bank programs as of December 31, 2025[530] Market and Investment Risks - If interest rates were to increase by 50 basis points, the fair value of fixed maturity securities would decrease by approximately $1.7 billion in 2025[563] - A hypothetical 10% decline in public equity market prices would result in an estimated net decrease of $545 million in net income for 2025[566] - The company had a notional $11.2 billion in foreign exchange forward and cross currency forward contracts to hedge against foreign currency risk, up from $6.7 billion in 2024[542] Operational Resilience - The company has established disaster recovery and business continuity plans to manage operational risks under adverse conditions[573] - The company utilizes Non-GAAP measures such as DOE and Adjusted Equity to provide additional insights into operating performance and liquidity[583] - Total Corporate Liquidity includes cash, undrawn credit facilities, and liquid financial assets, reflecting the company's liquidity position[588]

Technology and Products - The XTRAC excimer laser technology is FDA-cleared and has been shown to have an 89% efficacy rate in treating psoriasis, with minimal side effects[26] - The XTRAC Momentum Excimer Laser System platform received FDA clearance in January 2020, marking the first full platform clearance since 2008[23] - The FDA has granted 510(k) clearance for the XTRAC and VTRAC systems for treating psoriasis, vitiligo, atopic dermatitis, and leukoderma[46] - The TheraClear device has also received FDA clearance through the 510(k) process[48] - The company acquired the TheraClear Acne Therapy System in January 2022, which combines a vacuum and broadband light for effective acne treatment[36] Market and Revenue Model - The XTRAC excimer laser is marketed under a recurring revenue model, generating revenue on a per-use basis[24] - As of December 31, 2025, there are over 1,000 XTRAC lasers in use in the U.S., with 842 systems included in the dermatology recurring procedures revenue model[24] - The reimbursement rates for excimer laser treatments under Medicare range from $137 to $183 per treatment for 2025, with changes expected in 2026[26] - The national payment rates for treatments in 2025 were $137 for areas less than 250 square centimeters, $146 for areas between 250 to 500 square centimeters, and $183 for areas over 500 square centimeters[77] - The updated national payment rates for 2026 are $138, $148, and $176 for the respective treatment areas[77] Insurance and Coverage - Approximately 58% of the insured population in the U.S. is covered by insurance policies that reimburse XTRAC treatments for vitiligo as of December 31, 2025[34] - The company faces challenges with third-party reimbursement, which may deny coverage if treatments are deemed experimental or unnecessary[70] Compliance and Regulations - The company is subject to compliance with various fraud and abuse laws, including the Anti-Kickback Statute and the False Claims Act[53][58] - Compliance with HIPAA and state privacy regulations incurs significant costs for the company, despite not being classified as a covered entity[65] - The HITECH Act has increased civil penalties for HIPAA violations to a maximum of $1.5 million for uncorrected violations[66] - The California Consumer Privacy Act (CCPA) provides specific privacy protections for California residents, impacting how the company handles personal data[63] Manufacturing and Operations - The manufacturing facility in Carlsbad, California, spans 17,000 sq. ft. and is ISO 13485 compliant, sufficient to meet foreseeable product demand[39] - The company has sufficient in-house knowledge to manufacture the TheraClear device if needed, as current inventory meets demand[52] - The research and development team consists of two employees focused on the XTRAC system for treating inflammatory skin disorders[40] International Expansion - The company transitioned to a direct distribution model for international dermatology procedures equipment sales, signing distributor contracts in various countries from 2019 to 2023[25] - The company has signed distributor contracts in various countries, including Mexico and India in 2023, transitioning to a direct distribution model[76] - International reimbursement systems vary significantly, with many markets lacking approval for the company's products[72] Workforce - As of December 31, 2025, the company had 114 full-time employees, including three executive officers and 44 sales and marketing staff[75] - The company has 842 partner clinics in the United States, primarily in dermatology procedures[76] Intellectual Property - As of December 31, 2025, there are 16 issued U.S. patents in force or pending, with several having foreign counterparts[41]

Financial Performance - Total revenues for the year ended December 31, 2025, were $20.1 million, a decrease of 60.7% compared to $51.1 million in 2024, primarily due to the deconsolidation of certain funds [274]. - Total expenses for the year ended December 31, 2025, were $27.7 million, down 57.1% from $64.4 million in 2024, largely due to reduced expenses from deconsolidated funds [275]. - The net loss for the year ended December 31, 2025, was $23.0 million, compared to a net loss of $21.5 million in 2024, reflecting a 7.3% increase in losses [274]. - Asset management revenues decreased by 14.7% to $14.4 million in 2025 from $16.9 million in 2024 [274]. - Performance allocations dropped significantly by 92.5%, from $358,000 in 2024 to $27,000 in 2025 [274]. - Total revenues for the Platform (unconsolidated) were $15.2 million in 2025, a decrease of 27.5% from $20.9 million in 2024 [278]. - Fund management fees decreased by 8.4% to $11.3 million in 2025, down from $12.3 million in 2024, due to no new funds being created [279]. - Development and construction fees fell by 63.8% to $2.4 million in 2025, compared to $6.8 million in 2024, attributed to fewer pre-construction milestones reached [280]. - Fee-Related Earnings for 2025 was $(3,944) thousand, an improvement from $(5,386) thousand in 2024, indicating a reduction in operating losses [312]. - Distributable Earnings for 2025 was $(10,272) thousand, compared to $(9,893) thousand in 2024, reflecting ongoing challenges in profitability [312]. - Total revenues for the asset management platform in 2025 were $15,188 thousand, down from $20,942 thousand in 2024, primarily due to decreased asset management fees [315][316]. - Total expenses increased to $21,737 thousand in 2025 from $33,070 thousand in 2024, driven by higher payroll and operating costs [315][316]. - The company reported a net loss attributable to CaliberCos Inc. of $(21,798) thousand in 2025, compared to $(19,777) thousand in 2024, highlighting continued financial strain [312][316]. Asset Management and Investments - The company has over $2.6 billion in Managed Assets, including $0.8 billion of AUM and $1.9 billion of AUD [236]. - The company estimates aggregate unrealized performance allocations of approximately $104.0 million as of December 31, 2025, which represents projected profits after preferred returns and return of capital [254]. - A 5% increase or decrease in projected exit values across the managed portfolio would result in an approximate $5.2 million increase or decrease in estimated performance allocations [256]. - The company plans to stake a portion of its LINK holdings, potentially earning an annualized yield of 3% to 9% [241]. - The company has raised a total of $769.3 million in capital through December 31, 2025, indicating strong investor interest in alternative assets [260]. - The company operates a Private Equity Real Estate platform focused on middle-market investment funds, with projects ranging in value between $5.0 million and $50.0 million [250]. - The company is exploring additional products or investment offerings related to digital assets, which could expand AUM and generate recurring management and performance fees [243]. - Managed capital rose to $517,186,000 by December 31, 2025, compared to $492,542,000 in 2024, reflecting an increase of approximately 5.0% [290]. - Managed capital for residential investment funds increased by $7.3 million in 2025, driven by $6.7 million in capital raised and $1.4 million from diversified funds [293]. - Managed capital for commercial investment funds increased by $9.7 million in 2025, with $5.2 million raised into commercial assets [294]. Development Projects - As of December 31, 2025, the company is actively developing 1,796 multifamily units, 697 single-family units, and 3.7 million square feet of commercial and industrial space, with total estimated costs of $1.9 billion for these projects [249]. - The company expects to earn up to $104.2 million in performance allocations if all assets under development are completed [299]. - The company has discretion over asset sales, allowing it to avoid selling during market disruptions, which is critical for preserving asset value [288]. Digital Assets and Technology - The company anticipates continued volatility in the fair value of its digital asset holdings, which may materially affect reported results in future periods [240]. - The company is evaluating potential applications of blockchain technology within its real estate investment platform to improve operational efficiency and investor accessibility [244]. - The company experienced a significant change in the fair value of digital assets, reporting $(5,793) thousand in 2025 [315]. - The company adopted ASU 2023-08 for accounting digital assets, requiring them to be measured at fair value, effective September 9, 2025 [344]. - The market risk associated with financial instruments arises primarily from volatility in the digital asset market and interest rate risk from variable-rate borrowings [359]. Financial Position and Liquidity - Total assets increased to $69,987,000 as of December 31, 2025, up from $57,077,000 in 2024, representing a growth of approximately 22.5% [285]. - Total liabilities decreased to $63,941,000 in 2025 from $65,521,000 in 2024, a reduction of about 2.4% [285]. - As of December 31, 2025, the company had an aggregate principal balance of $29.6 million in unsecured notes, with a weighted average interest rate of 11.14% [324]. - Management plans to reduce operating costs and collect $10.7 million in receivables to address near-term liquidity challenges [320]. - The company raised $33.8 million in new equity during 2025 to support its LINK strategy, investing $12.6 million in LINK [321]. - The company successfully refinanced $6.4 million of 12-month term corporate notes into a new 36-month term corporate note program [325]. - A note conversion program allowed for the conversion of $1.9 million of corporate notes into 564,731 shares of common stock, with conversion prices ranging from $3.14 to $3.72 per share [325]. - The company generated $37.7 million in net cash from equity issuances across all sources by March 25, 2026 [325]. - Net cash used in operating activities increased to $(12,065) thousand in 2025 from $555 thousand in 2024, a change of $(12,620) thousand [327]. - Net cash used in investing activities rose to $(23,721) thousand in 2025 from $(19,629) thousand in 2024, a change of $(4,092) thousand [327]. - Net cash provided by financing activities increased to $36,905 thousand in 2025 from $6,331 thousand in 2024, a change of $30,574 thousand [327]. - The company reported a net change in cash and cash equivalents of $1,119 thousand in 2025, compared to $(12,743) thousand in 2024, a change of $13,862 thousand [327]. Debt and Interest Rates - The company had fixed-rate debt with a fair value of $60.2 million and a carrying value of $65.6 million as of December 31, 2025 [363]. - The company’s variable-rate debt had a fair value and carrying value of $14.8 million as of December 31, 2025 [364]. - A 100 basis point increase in variable interest rates would increase annual interest expense by $0.1 million [364]. Revenue Recognition - The company recognizes revenue from food and beverage services upon transfer of products or services, typically at the time of sale [353]. - Deposits for events and rooms are deferred and recognized as revenue when the specific event occurs [354]. - Consolidated funds recognized rental revenue of $0.6 million for the year ended December 31, 2025, compared to $1.4 million for 2024, indicating a decline of 57.1% [355]. - Interest income for the year ended December 31, 2024, was $5.9 million, while there was no interest income for 2025, representing a decrease of 100% [356].

Financial Performance - For the year ended December 31, 2025, the company reported a net income of $1,822,212, driven by interest income of $2,298,371 and offset by share-based compensation expense of $108,750 and operating costs of $367,996[219]. - Cash used in operating activities for the year ended December 31, 2025, was $475,975, influenced by compensation expenses and changes in operating assets and liabilities[223]. Initial Public Offering - The company completed its Initial Public Offering on July 2, 2025, raising gross proceeds of $100,000,000 from the sale of 10,000,000 Units at $10.00 per Unit[220]. - An additional 1,500,000 Units were sold on July 11, 2025, generating gross proceeds of $15,000,000, along with 30,000 Private Placement Units for total proceeds of $300,000[221]. - The company incurred total offering costs of $6,741,773, which includes a cash underwriting fee of $2,300,000 and a deferred underwriting fee of $4,025,000[222]. Assets and Securities - As of December 31, 2025, the company held marketable securities in the Trust Account amounting to $117,298,371, which includes approximately $2,298,371 of interest income[226]. - The company plans to utilize funds from the Trust Account primarily for completing its Business Combination and financing operations of the target business[226]. Debt and Liquidity - The company has no long-term debt or off-balance sheet arrangements as of December 31, 2025, and incurs monthly fees of $10,000 for office space and administrative services[230][231]. - The company has a liquidity concern, as it must complete a Business Combination by April 2, 2027, or face mandatory liquidation[229]. - Up to $1,500,000 of working capital loans may be convertible into private placement units at the lender's option, priced at $10.00 per unit[228].