Financial Performance - For the year ended December 31, 2025, total consolidated revenues reached RMB 4,307,865,000, a significant increase compared to RMB 3,288,296,000 in 2024, reflecting a growth of approximately 31%[43] - The gross profit for the year ended December 31, 2025, was RMB 843,571,000, up from RMB 498,763,000 in 2024, indicating a gross profit margin improvement[43] - Selling and marketing expenses for 2025 totaled RMB 675,769,000, which is a decrease from RMB 489,578,000 in 2024, showing a reduction of about 38%[43] - Research and development expenses for 2025 were RMB 166,452,000, compared to RMB 130,111,000 in 2024, representing an increase of approximately 28%[43] - The net loss for the year ended December 31, 2025, was RMB 39,386,000, a significant improvement from a net loss of RMB 193,201,000 in 2024[43] - As of December 31, 2025, the total operating expenses were RMB 933,185,000, which is an increase from RMB 750,307,000 in 2024, reflecting a rise of about 24%[43] - The company reported interest income of RMB 26,464,000 for 2025, compared to RMB 37,090,000 in 2024, indicating a decrease of approximately 29%[43] - The share of loss from subsidiaries and consolidated VIE for 2025 was RMB 62,369,000, a decrease from RMB 216,807,000 in 2024, showing a reduction of about 71%[43] - The company received government grants totaling RMB 1,367,000 in 2025, compared to RMB 912,000 in 2024, indicating a slight increase[43] - The total consolidated revenues for the year ended December 31, 2023, were RMB 2,651,758,000, reflecting a decrease from RMB 3,288,296,000 in 2024, indicating a decline of approximately 19%[45] Cash Flow and Assets - Cash and cash equivalents rose to RMB 924,738 thousand in 2025, compared to RMB 630,021 thousand in 2024, marking an increase of about 47.5%[48] - Net cash provided by operating activities for the year ended December 31, 2025, was RMB 353,270 thousand, a significant recovery from the previous year's cash used in operations[49] - Total current liabilities decreased to RMB 2,003,132 thousand in 2025 from RMB 1,651,932 thousand in 2024, indicating a reduction of approximately 21.3%[48] - The company reported a net cash increase of RMB 289,185 thousand for the year ended December 31, 2025, compared to the previous year[49] - Total assets increased to RMB 2,950,336 thousand as of December 31, 2025, up from RMB 2,613,158 thousand in 2024, representing a growth of approximately 12.9%[48] Operational Challenges - The company incurred significant costs related to procuring components and raw materials, with fluctuations in prices affecting margins[75] - The company may face challenges in maintaining product quality, which could adversely affect sales and brand reputation[77] - The company faces significant risks related to product liability claims, which could lead to substantial costs and negatively impact its business and operating results[90] - The company must comply with extensive legal and regulatory requirements for manufacturing and selling its products, and failure to do so could materially affect its operations and financial condition[92] - New safety standards for electric bicycles and motorcycles are set to take effect, which the company must meet to avoid prohibitions on sales in the Chinese market[95][96] Market and Competitive Landscape - The electric two-wheeled vehicles industry is facing intense competition, with potential new entrants that may have competitive advantages, impacting market share and pricing strategies[62][64] - The company relies heavily on city partners and franchised stores for sales and distribution, making its success dependent on the effectiveness of its offline distribution network[59] - The brand's strength is critical for retaining and expanding the customer base, and failure to maintain brand value could adversely affect business results[65][66] - The company is focused on promoting its "NIU" brand as a premium smart e-scooter brand globally, which is essential for customer engagement and market positioning[66] Regulatory and Compliance Risks - The PCAOB's ability to inspect auditors in mainland China and Hong Kong may affect trading of Niu Technologies' shares under the HFCAA[28] - The company’s contractual arrangements with the VIE are subject to regulatory scrutiny, which could impact its financial performance if deemed non-compliant[159] - The PRC tax authorities may challenge the VIE contractual arrangements, potentially leading to increased tax liabilities[175] - The legal system in mainland China is evolving, which may limit the enforceability of contractual arrangements[170] - The company must navigate complex customs and trade regulations, which could impose additional compliance costs and operational challenges[146] International Expansion and Trade Relations - International expansion is a core strategy for the company, but it faces challenges such as limited brand recognition and compliance with local laws, which could impact profitability[102][105] - Rising international trade tensions, particularly between the U.S. and China, may adversely affect the company's business and financial condition[135] - The U.S. government has implemented policies that restrict international trade and investment, which could impact the company's operations and capital raising efforts[136] Human Resources and Employee Management - Employee costs, including wages and benefits, are projected to continue increasing, which may adversely affect profitability if not passed on to consumers[120] - The company emphasizes the importance of retaining key personnel for successful implementation of business strategies and future plans[116] - The company faces challenges in attracting and retaining highly skilled personnel, which may lead to significant costs and impact business operations[130] Future Outlook - The company anticipates continued growth in sales, expecting a positive trend into 2026 with the launch of new products[117] - Although there are no current acquisition plans, the company may consider acquiring complementary assets or technologies in the future, subject to regulatory approvals[132]

Financial Performance - For the fiscal year ended December 31, 2025, JD.com, Inc. reported net revenues of RMB 1,309,085 million, a significant increase from RMB 1,158,819 million in 2024, representing a growth of approximately 12.9%[58]. - The company declared a cash dividend of US$0.50 per ordinary share for the year ended December 31, 2024, amounting to approximately US$1.44 billion, reflecting a 20% increase from the previous year's dividend[55]. - JD.com, Inc. reported a net income of RMB 23,142 million for the year ended December 31, 2025, compared to RMB 44,660 million in 2024, indicating a decrease of approximately 48.0%[58]. - The total cost of revenues for the year ended December 31, 2025, was RMB 1,099,057 million, which is an increase from RMB 974,951 million in 2024, reflecting a rise of approximately 12.8%[58]. - The company reported third-party revenues of RMB 1,217,498 million for the year ended December 31, 2025, up from RMB 1,049,575 million in 2024, marking an increase of approximately 16.0%[58]. - The company reported a net cash increase of RMB 33,909 million in cash, cash equivalents, and restricted cash at the end of 2025[63]. - The company has incurred share-based compensation expenses of RMB 1,367 million (US$195 million) in 2025, with total expenses of RMB 4,726 million (US$676 million) recorded for that year[184]. Regulatory and Compliance Risks - The company faces risks related to regulatory approvals, anti-monopoly actions, and cybersecurity oversight, which could materially affect operations and share value[41]. - The PRC government has significant authority to regulate operations, which may impact the company's ability to conduct business and accept foreign investments[41]. - The consolidated variable interest entities are subject to complex and evolving laws and regulations in China, which may change with little notice[42]. - The company anticipates continued legal and regulatory proceedings as it expands into new business areas and jurisdictions, which may adversely affect its operations[112]. - The evolving regulatory landscape in the U.S. and China poses significant risks for cross-border investments and collaborations, potentially affecting business operations and financial conditions[200][202]. - The company may incur additional costs to comply with complex regulations and face penalties for any inadvertent violations, adversely impacting financial performance[202]. Operational and Strategic Initiatives - The company plans to continue investing in technology and expanding its fulfillment infrastructure, including building new warehouses in less developed areas of China[69]. - The company aims to enhance its product and service offerings, which will require efficient collaboration with new suppliers and third-party merchants[69]. - The company is focused on maintaining its brand reputation, as any negative perception could significantly affect customer retention and growth prospects[78]. - The company has invested significant resources in expanding its fulfillment infrastructure and upgrading its technology platform, with expectations to continue these investments for several years[98]. - The company is leveraging AI technologies to provide personalized product recommendations, which is crucial for attracting and retaining customers[82]. Market and Competitive Environment - The company faces intense competition in the online retail industry, which may lead to reduced margins and market share if it fails to compete effectively[84]. - The online retail industry in China is sensitive to macroeconomic changes, which could adversely impact consumer confidence and spending[76]. - The company recognizes the risks associated with managing growth and executing strategies effectively, which could materially affect its business prospects[69]. Cash Management and Financial Position - JD.com, Inc. received repayments of RMB 32.9 billion (US$4.7 billion) from its intermediate holding companies through centralized cash management activities for the year ended December 31, 2025[53]. - The company's centralized cash management policy has improved the efficiency and security of cash transfers among its subsidiaries and consolidated variable interest entities[52]. - Cash and cash equivalents increased to RMB 137,488 million in 2025 from RMB 108,350 million in 2024, representing a growth of approximately 27%[61][62]. - Total liabilities stood at RMB 401,418 million as of December 31, 2025, compared to RMB 384,937 million in 2024, indicating an increase of about 4.3%[61][62]. Supply Chain and Inventory Management - The company has designed its fulfillment infrastructure to meet its operational requirements, but there is no guarantee it will be more effective than third-party solutions[99]. - Effective inventory management is critical, as mismanagement could lead to inventory obsolescence and negatively impact financial performance[90]. - The company's net inventories were RMB 95,428 million (US$13,646 million) as of December 31, 2025, with annual inventory turnover days increasing from 30.3 days in 2023 to 37.8 days in 2025[89]. Technology and Cybersecurity - The satisfactory performance of the company's technology platform is critical, as any system interruptions could materially affect business and reputation[130]. - The company has adopted security measures, including encryption, to protect customer information, but remains vulnerable to potential breaches and cyber threats[137]. - Compliance with evolving data privacy and cybersecurity regulations in China may require significant resources and could impact operational practices[139]. Shareholder and Governance Matters - JD.com, Inc. does not expect to be identified as a Commission-Identified Issuer under the HFCAA after filing its annual report for the fiscal years 2022, 2023, or 2024[43]. - The company's board of directors has discretion over dividend distributions, which are influenced by factors such as operational results, cash flow, and financial condition[56]. - The chairman, Mr. Richard Qiangdong Liu, holds 73.1% of the aggregate voting power, significantly influencing corporate matters[197]. International Operations and Geopolitical Risks - The company faces risks from fluctuations in the global economy, particularly due to geopolitical tensions and trade policies affecting operations[191]. - Ongoing international trade tensions, particularly between the U.S. and China, may adversely impact the company's business and operating results[198]. - The U.S. government has issued an executive order in August 2023 to restrict U.S. investments in sensitive technologies in China, including advanced computing chips and artificial intelligence[200].

Business Operations and Strategy - TruGolf Holdings, Inc. completed a business combination on January 31, 2024, acquiring TruGolf Nevada, which has been operational since 1995[21] - The company plans to expand into franchise-oriented indoor golf entertainment venues, leveraging the growth in off-course golf participation[48] - TruGolf's current operations focus on increasing adoption of the APOGEE launch monitor and expanding the E6 software ecosystem[34] - The company offers a range of simulator systems, including portable and premium installations, to cater to various customer needs[39] - The company aims to expand the adoption of the RANGE by TruGolf platform, which provides technology-enabled driving range solutions, potentially increasing recurring revenue opportunities[59] - The company maintains a network of resellers and distribution partners to support product marketing and sales across domestic and international markets[60] - The sales strategy focuses on targeted industry verticals, including golf courses, residential construction, and educational institutions, to strengthen customer relationships and support repeat business[57] Market Trends and Participation - The U.S. golf participation reached 48.1 million in 2025, with 29.1 million on-course golfers and 37.9 million off-course participants, indicating a growing market for indoor golf[26] - The global golf simulator market was valued at approximately $1.74 billion in 2024, with a projected compound annual growth rate of 9.4% from 2025 to 2030[31] - The Virtual Golf Association (VGA) aims to facilitate competitive digital golf events, with screen and simulator golf participation reaching approximately 9.2 million in 2025, a 13% year-over-year increase[52] - Approximately 1,700 simulator businesses focused on golf entertainment and 700 commercial simulator locations for instruction and club fitting are projected in the U.S. by year-end 2025[59] - The competitive landscape includes key players such as TrackMan and Foresight, with total off-course golf participation in the U.S. reaching 37.9 million in 2025[63] Financial Performance - Total net revenue decreased by $2,403,652, or 11.3%, to $18,878,997 for the year ended December 31, 2025, compared to $21,282,649 for the year ended December 31, 2024[188] - Golf simulator revenue increased by $973,234, or 7.1%, to $14,681,994 for the year ended December 31, 2025, driven by increased unit volumes in commercial channels and growth in residential installations[189] - Content software subscriptions revenue decreased by $3,566,239, or 49.0%, to $3,710,245 for the year ended December 31, 2025, due to changes in how the company sold its content subscription licenses[190] - Franchise revenue of $13,125 was recognized for the year ended December 31, 2025, representing initial fees from the TruGolf Links Franchising subsidiary[191] - Cost of goods sold increased by $1,957,869, or 26.5%, to $9,359,380 for the year ended December 31, 2025, primarily due to non-recurring inventory adjustments[193] - Gross profit decreased by $4,361,521, or 31.4%, to $9,519,617 for the year ended December 31, 2025, with gross margin declining to 50.4% from 65.2%[194] - Net loss was $15,227,893 for the year ended December 31, 2025, compared to $8,795,419 for 2024, an increase of $6,432,474, driven by the decline in gross profit and loss on extinguishment of debt[205] Operational Challenges and Risks - The company is not profitable as of December 31, 2025, and requires significant funding to achieve profitability and satisfy outstanding payables[95] - The company relies heavily on supply chain reliability, and disruptions could materially impact operations and profitability[99] - Rising costs for raw materials, labor, and freight could negatively impact gross margins and profitability[98] - The company faces intense competition in the sports equipment and technology industry, affecting demand for its products[108] - Legal and regulatory challenges related to intellectual property protection could harm brand reputation and financial performance[131] - Product liability claims could negatively affect the company's financial condition and liquidity if not successfully defended[132] Capital and Funding - As of April 15, 2026, the company had available cash resources of approximately $7.8 million, indicating a need for additional capital to support its growth strategy[95] - The company has approximately $1,749,471 in scheduled debt payments due within the next twelve months, with plans to fund these obligations through unrestricted cash on hand[214] - The company believes its existing resources, including unrestricted cash of $7,849,785 and available borrowing capacity of $1,197,262, will be sufficient to fund operations and meet debt obligations for at least the next twelve months[219] Compliance and Regulatory Issues - The company received a delisting notice from Nasdaq on August 19, 2024, for not meeting the minimum market value of publicly held securities requirement[148] - A hearing was held on May 15, 2025, to present a plan for regaining compliance with Nasdaq's continued listing requirements, resulting in an exception with milestones until July 2025[149] - The company regained compliance with Nasdaq's Bid Price Rule on July 17, 2025, and demonstrated compliance with the Equity Rule by August 1, 2025[150] - If the company fails to maintain compliance with Nasdaq's requirements, it risks being delisted, which could adversely affect liquidity and market price of its common stock[152] Marketing and Brand Strategy - The company’s marketing strategy relies on online advertising and social media, and failure to effectively promote its brand could adversely affect business[103] - The company aims to expand its consumer base by appealing to new demographics, including female and young consumers, which is critical for future growth[101] Technology and Innovation - TruGolf's APOGEE launch monitor is designed for ease of installation and includes features like continuous calibration and voice-enabled operation[38] - The E6 GOLF software platform is the primary focus for TruGolf, providing advanced simulation experiences and supporting a broad library of courses[43] - The company continues to develop commercial tools for indoor golf facilities, enhancing simulator utilization and customer engagement[47] - The company plans to enhance product functionality and user experience through data generated from its software and launch monitor ecosystem[55] - Research and development are crucial for technical innovation, and failure to introduce new products could result in a decline in consumer demand[111] Employee and Operational Structure - The company employs approximately 68 employees, with a focus on maintaining direct oversight of product development and customer support functions[81] - Salaries, wages, and benefits decreased by $4,698,464, or 50.4%, to $4,615,951 for the year ended December 31, 2025, compared to $9,314,415 for 2024, due to increased capitalization of employee compensation as software development costs[196] - Selling, General and Administrative (SG&A) expenses increased by $4,336,336, or 65.0%, to $11,006,020 for the year ended December 31, 2025, compared to $6,669,684 for 2024, driven by higher contractor costs and increased amortization of capitalized software development costs[197] Cash Flow and Investments - Net cash used in operating activities was $(1,698,381) for the year ended December 31, 2025, a decrease of $2,297,225 compared to $(3,995,606) for 2024[209] - Net cash used in investing activities was $(3,436,933) for the year ended December 31, 2025, compared to net cash provided of $741,143 for 2024, reflecting increased investment in capitalized software development costs[211] - Capital expenditures for software development totaled $3,231,490 for the year ended December 31, 2025, compared to $1,701,471 in 2024, indicating an expansion of the development program[218]

Financial Performance - As of December 31, 2025, the Company's revenue was $33,012, a significant increase from $0 in 2024[192] - The Company reported a net income of $24,336 for 2025, compared to a net loss of $130,700 in 2024, marking a 119% improvement[191] - General and administrative expenses decreased by $352,722, from $551,983 in 2024 to $199,261 in 2025, representing a 64% reduction[193] - Net cash used in operating activities for 2025 was $63,226, a decrease from $1,344,037 in 2024[203] - The Company incurred $14,701 in interest expense in 2025, compared to $0 in 2024[196] - The change in fair value of warrant liabilities decreased significantly from $404,250 in 2024 to $10,780 in 2025, a 97% decline[197] Financial Position - The Company had $48,713 in cash and a working capital deficit of $280,160 as of December 31, 2025[198] - The management has expressed substantial doubt about the Company's ability to continue as a going concern for the next twelve months[201] Growth Strategy - The growth strategy focuses on developing modular generation and recovery solutions to produce clean hydrogen and carbon dioxide at competitive prices[187] - The company intends to deploy carbon recovery systems to significantly reduce or eliminate CO2 emissions during hydrogen production[221] - The company plans to own and operate hydrogen generation plants, requiring relevant licensing for production, storage, and sale of gases[220] Regulatory Compliance - Compliance with government regulations is necessary for the construction of hydrogen production facilities, including local zoning and permitting requirements[222] Company Classification and Intellectual Property - The company is classified as an "emerging growth company" under the JOBS Act, allowing it to delay the adoption of certain accounting standards[217] - The company does not hold material intellectual property beyond certain logos and domain names[219] Financing - The Company intends to raise additional financing through equity issuances to support future operations[200]

Agreements and Contracts - The Company entered into a Marketing and Sponsorship Agreement with Buffalo Sports Properties, LLC, for annual consideration of $550,000, consisting of $350,000 in equity and $200,000 in cash over a three-year term[23] - An Exclusive Private Label Manufacturing Agreement was signed with The Grove Collective, LLC, involving an equity commitment of $3.0 million, with shares valued at approximately $2.9 million issued immediately[24] - A Vendor Agreement with MavDB Consulting LLC was established for capital markets advisory services, with a one-time fee of approximately $2.5 million recognized as expense as services are performed[25] - The Company has entered into various agreements that include variable and fixed NIL-related funding arrangements, recognized as expenses as incurred[23] Financial Performance and Market Position - The Company reported stockholders' equity of $19,046, failing to meet the $35,000,000 market value requirement for Nasdaq listing, leading to a delisting notification[27] - The Offering resulted in gross proceeds of approximately $7,500,000, with an 8.0% cash fee paid to the Placement Agent for the aggregate gross proceeds raised[39] - A reverse stock split of 1-for-50 was completed in December 2024, consolidating shares without changing the authorized number or par value[30] Business Strategy and Operations - The Company aims to transition its brands from wholesale to digital direct-to-consumer, enhancing operational efficiencies and cost-saving opportunities[40] - The portfolio consists of five brands, with a focus on cross-merchandising and capturing "closet share" through targeted content[40] - Avo has raised over $17 million for student athletes since its launch in April 2025[42] - Avo currently features products from ten universities and expects to announce significantly more in the coming months[42] - Avo's direct-to-consumer sales model eliminates wholesale mark-ups, allowing for sharper pricing and improved margins[68] - The company plans to actively pursue acquisitions to enhance customer engagement and loyalty, aiming for higher average order values and lower acquisition costs[47] - Avo's omnichannel strategy includes both online and selected wholesale distribution, enhancing brand awareness and customer acquisition[43] - The company consolidates production to lower average production costs per unit, enhancing gross margins[50] - The company currently ships products from suppliers to its distribution center in Los Angeles, CA, which handles warehousing, fulfillment, outbound shipping, and returns processing[78] - The company does not own manufacturing facilities and relies on third-party contract manufacturers primarily in Europe, the United States, and the Asia Pacific region[80] - All garments are produced according to brand specifications, with strict adherence to regulatory compliance and quality control monitored by both internal teams and independent inspectors[81] Marketing and Customer Engagement - The company aims to increase customer lifetime value (LTV) by leveraging data analytics to understand customer preferences and optimize inventory management[45] - Avo's product prices range from $30 to $98, with specific items like t-shirts priced between $30 and $58 and fleece products ranging from $68 to $88[66] - Avo's marketing strategy includes personalized direct customer engagement through email and SMS communications[56] - The company utilizes a multi-pronged marketing strategy, with paid social media marketing as the primary customer acquisition channel, focusing on platforms like Facebook and Instagram[85] - The company plans to develop and launch a company-wide loyalty program to engage and reward customers, allowing them to earn points for purchases[95] Workforce and Compliance - The company emphasizes the importance of a diverse workforce and plans to focus on hiring and retaining underrepresented populations[103] - As of December 31, 2025, the company had 33 full-time employees, with no labor-related work stoppages reported[102] - The company is committed to employee health and wellness, providing access to various health programs and robust compensation packages[104] - The company is subject to evolving domestic and foreign laws and regulations that could impact its operations and compliance costs[97] Competitive Landscape - The competitive landscape includes significant players like Vince, James Perse, and Madewell, which have advantages in brand recognition and resources[96]

Financial Performance - Total revenues for the year ended December 31, 2025 were $109.2 million, a 19.6% decrease from $135.9 million in 2024, primarily due to lower global demand for interactive flat panel displays [298]. - Cost of revenues decreased by 15.0% to $75.6 million in 2025 from $89.0 million in 2024, attributed to a decrease in units sold, despite increases in tariffs [299]. - Gross profit for 2025 was $33.6 million, with a gross profit margin of 30.8%, down from $46.9 million and 34.5% in 2024, impacted by product mix changes and a $1.5 million increase in tariffs [300]. - Net loss attributable to common shareholders was $25.1 million in 2025, an improvement from a net loss of $29.6 million in 2024 [305]. Expenses - General and administrative expenses for 2025 were $35.5 million, representing 32.5% of revenue, down from $41.8 million and 30.7% in 2024, mainly due to reduced personnel-related expenses [301][302]. - Research and development expenses increased to $4.3 million or 3.9% of revenue in 2025, compared to $4.1 million or 3.0% in 2024, reflecting ongoing investment in proprietary technology [304]. Cash Flow and Working Capital - As of December 31, 2025, cash and cash equivalents were $9.4 million, with a working capital balance of $26.6 million and a current ratio of 1.62, compared to $8.0 million, $1.3 million, and 1.02 in 2024, respectively [313]. - For the year ended December 31, 2025, the company had net cash used in operating activities of $3.3 million, an increase from $0.4 million in 2024, primarily due to changes in working capital management [314]. Debt and Financing - As of December 31, 2025, the company had approximately $32.2 million of indebtedness outstanding under its Credit Agreement [318]. - The company completed a registered direct offering in September 2025, generating approximately $4.0 million in gross proceeds, which were used for working capital and debt reduction [321]. - The Eleventh Amendment to the Credit Agreement extended the final maturity date of the loans to April 1, 2027, and suspended mandatory quarterly amortization payments through June 30, 2026 [320]. - The company raised approximately $0.66 million of net proceeds through its "at the market" offering program during the year ended December 31, 2025 [331]. - The company entered into an amended inventory finance agreement allowing financing of up to $9.0 million for finished goods inventory purchases [334]. - As of December 31, 2025, the aggregate outstanding obligation under the inventory financing arrangement was $3.7 million, recorded as related party accounts payable [338]. Market and Operational Strategy - The company has sold solutions into over 70 countries and over 1.5 million classrooms and meeting spaces, indicating strong market penetration [285]. - The company aims to become a single source solution for educators globally, focusing on integrating technology into modern classrooms [287]. - The company continues to assess and adapt to seasonal trends, with inventory levels peaking before the school year starts [311]. - Management's focus on operational efficiency and revenue diversification into corporate and government markets is expected to support future growth [329]. Inventory and Impairment - As of December 31, 2025, the reserve for inventory obsolescence was $2.5 million, down from $3.2 million as of December 31, 2024 [353]. - The Company recorded goodwill impairment charges that fully eliminated the goodwill balances of its Americas and EMEA reporting units, resulting in no remaining goodwill as of December 31, 2025 [356]. - The Company accelerated amortization of approximately $12.3 million for certain intangible assets during the year ended December 31, 2024, due to revised useful lives reflecting current expected economic conditions [360]. - The Company performed interim impairment testing on finite-lived intangible assets and concluded that no impairment losses were necessary during the year ended December 31, 2025 [361]. Revenue Recognition and Taxation - Revenue from software maintenance, hardware maintenance, and subscription services is recognized ratably over time as the services are provided [348]. - The Company continuously reviews inventory levels to identify slow-moving merchandise, which impacts the cost of inventories [352]. - The Company allocates revenue to distinct performance obligations based on their relative stand-alone selling prices [350]. - The Company assesses the classification of its freestanding derivatives at each reporting date to determine if a change in classification between equity and liabilities is required [365]. - Deferred income taxes are recorded to reflect estimated future tax effects of differences between financial statement and tax basis of assets, with valuation allowances recorded for deferred tax assets not expected to be realized [367]. Legal and Regulatory - The Supreme Court ruling on February 20, 2026, invalidated IEEPA-based tariffs, which is expected to reduce input cost pressures and improve the purchasing environment for the company's customers [323]. - The company has acknowledged a history of operating losses and recurring negative cash flows, raising concerns about its ability to continue as a going concern [325].

Sales and Market Performance - The Company recognized over 98% of its net sales in markets outside the United States in 2025, with initial sales in the U.S. through the Sky Premium Life nutraceutical brand[113]. - Changes in consumer behavior have shifted towards basic necessities and digital channels, impacting the Company's sales performance[111]. Economic Factors - The annual inflation rate in the European Union was approximately 2.3% in December 2025, reflecting a moderation compared to previous years[121]. - Inflationary pressures have led to higher costs for raw materials and increased overall operating costs, despite moderation in inflation during 2024 and 2025[122]. - The significant increase in global benchmark interest rates has adversely affected the Company, as most loan facilities carry floating interest rates, resulting in higher financing costs[123]. Regulatory and Legal Risks - The U.S. Inflation Reduction Act of 2022 may impact the Company by reducing out-of-pocket spending caps for Medicare beneficiaries and imposing new financial liabilities on certain drugs[124]. - Regulatory and litigation risks may restrict the Company's ability to sell products in certain markets or require changes to its business model[109]. Operational Challenges - The Company has been expanding its range of products and acquiring advanced technology for drug storage systems to ensure quality and accuracy in distribution[112]. - Cybersecurity risks pose a threat to the integrity of data, which could lead to significant legal and financial exposure for the Company[120]. - Geopolitical issues and conflicts, such as the war in Ukraine, could adversely affect the Company's operations and financial condition[114].

Financing Activities - The company issued Convertible Notes totaling $12.8 million with an interest rate of 12.5% per annum, maturing on December 2, 2027[758]. - The company has entered into an At-the-Market Issuance Sales Agreement for Series D Preferred Stock with an aggregate offering price of up to $35.4 million[761]. - The company anticipates completing the planned divestiture of Ault Capital in 2027, focusing on AI data center and Bitcoin infrastructure[755]. - The company plans to maximize stockholder value through various initiatives, including public offerings and sales of partner companies[774]. Revenue Performance - Total revenue for the year ended December 31, 2025, was $102.1 million, a decrease of 4% from $106.7 million in 2024[782]. - Revenue from crypto assets mining decreased by $9.3 million, or 30%, to $21.3 million, primarily due to a decline in mined crypto assets and increased mining difficulty[783]. - Crane operations revenue declined by $2.0 million, or 4%, to $45.5 million, reflecting reduced demand from oil and gas customers amid market uncertainty[784]. - AGREE's hotel operations revenue increased by $0.9 million, or 5%, to $19.0 million, indicating improvements in occupancy and average daily rates[785]. - TurnOnGreen's revenue increased by $2.3 million, or 47%, to $7.2 million, driven by new and existing defense customers[786]. Expenses and Losses - General and administrative expenses rose by $14.8 million to $50.0 million, primarily due to higher salaries and performance-based bonuses[794]. - Selling and marketing expenses increased by $4.3 million, or 31%, to $18.3 million, attributed to higher advertising and promotional activities[795]. - Net loss attributable to common stockholders was $75.0 million for the year ended December 31, 2025, compared to a loss of $61.5 million in 2024[782]. - A total net loss on extinguishment of convertible notes of $3.4 million was recognized for the year ended December 31, 2025, which included a $1.4 million gain on extinguishment of debt from the conversion of senior secured convertible notes[804]. - A loss of $2.6 million was recognized in connection with the issuance of an amended and restated convertible promissory note with a principal amount of $3.5 million[806]. Cash Flow and Financial Position - As of December 31, 2025, cash and cash equivalents increased to $13.1 million from $4.5 million as of December 31, 2024, with total cash and cash equivalents rising to $49.2 million[814]. - Net cash used in operating activities totaled $62.5 million for the year ended December 31, 2025, compared to $19.4 million for the year ended December 31, 2024[815]. - Net cash used in investing activities was $70.2 million for the year ended December 31, 2025, compared to net cash provided by investing activities of $3.2 million for the year ended December 31, 2024[816]. - Net cash provided by financing activities was $156.3 million for the year ended December 31, 2025, compared to $25.8 million for the year ended December 31, 2024[819]. Gains and Impairments - The company recognized a gain of approximately $2.0 million upon the deconsolidation of Gresham, which was included in net gain from discontinued operations for the year ended December 31, 2024[764]. - The company recorded a loss on impairment of property and equipment related to AGREE's real estate assets amounting to $8.0 million during the year ended December 31, 2024[769]. - The company recognized a gain of $10.0 million in connection with the deconsolidation of AVLP for the year ended December 31, 2025[771]. - A gain of $10.0 million was recognized due to the deconsolidation of AVLP, which filed for liquidation under Chapter 7 of the U.S. Bankruptcy Code[809]. Tax and Market Sensitivity - The effective tax rate from continuing operations was a provision of 0.4% for the year ended December 31, 2025, compared to 0.1% for the year ended December 31, 2024[813]. - A hypothetical 10% change in the price of Bitcoin as of December 31, 2025, would have resulted in a change in the carrying value of approximately $4.6 million[827].

Revenue Expectations - Q1 2026 revenue is expected to be approximately $4.2 million, generated from defense-related orders across all subsidiaries [6]. - T3 Defense reaffirms full-year 2026 revenue guidance of $26 million, reflecting expectations for strong organic growth and operational momentum [9]. Backlog and Demand - The company ended Q1 2026 with a backlog of over $12.1 million, providing solid revenue visibility for the remainder of 2026 [10]. - Rimon, a wholly owned subsidiary, secured approximately $4.1 million in new multi-year contracts during Q1 2026, with a backlog of $4.8 million [13]. - Tiltan, another wholly owned subsidiary, received RFPs totaling $5.4 million during Q1 2026, driven by demand for training environments and navigation solutions [16]. - ITS, which holds a 51% controlling stake, has a backlog of $2.1 million, indicating demand for advanced electro-mechanical manufacturing capabilities [17]. - Positech, a wholly owned subsidiary, has a backlog of $4.6 million and is targeting the growing demand for robotic solutions on the modern battlefield [17]. Requests for Proposals (RFPs) - Incoming Requests for Proposals (RFPs) across all subsidiaries reached $12.0 million, driven by escalating global defense spending and heightened geopolitical tension [11]. - The company is experiencing heightened demand across the defense sector, with a significant surge in RFP activity across all subsidiaries [12]. Strategic Initiatives - T3 Defense's strategic initiatives have strengthened its position in critical segments of the defense sector, enhancing technological capabilities and operational integration [4].

Financial Performance - Total sales increased by $66.9 million, or 8.9%, to $820.0 million in fiscal 2025 compared to $753.1 million in fiscal 2024, driven by a 9.7% increase in comparable store sales [159]. - Comparable store sales increased by 9.7% in fiscal 2025, with the majority of growth attributed to increased transactions [159]. - Net income for fiscal 2025 was $5.2 million, a significant improvement from a net loss of $43.2 million in fiscal 2024 [166]. Cost and Expenses - Cost of sales increased by $24.3 million, or 5.2%, to $495.3 million in fiscal 2025, with cost of sales as a percentage of net sales decreasing to 60.4% from 62.5% [160]. - Selling, general and administrative (SG&A) expenses rose by $13.0 million, or 4.3%, to $313.2 million in fiscal 2025, with SG&A expenses leveraging to 38.2% of sales from 39.9% [161]. Store Operations - The company ended fiscal 2025 with 590 stores, having opened 3 new stores, remodeled 62, and closed 4 [147]. - Capital expenditures in fiscal 2025 were $22.7 million, an increase of $10.6 million from the prior year, with expectations of $35 million to $40 million in fiscal 2026 for opening approximately 25 new stores and remodeling about 50 stores [170]. Cash Flow and Liquidity - Year-end cash and cash equivalents were $66.1 million, with no debt and no drawings on the $75 million line of credit [167]. - Cash provided by operating activities was $21.0 million in fiscal 2025, compared to cash used of $3.8 million in fiscal 2024, driven by an increase in net income and an $8.8 million reduction in inventory [173]. - Cash used in investing activities was $8.5 million in fiscal 2025, down from $10.1 million in fiscal 2024, with sources including $11.2 million from the sale of a building [175]. - Cash used in financing activities was $7.5 million in fiscal 2025, compared to $4.7 million in fiscal 2024, including $6.3 million for share repurchases [176]. - The company returned $6.3 million to shareholders through share repurchases in fiscal 2025 [171]. - Significant uses of cash in fiscal 2025 included a $55.2 million decrease in accrued expenses and other long-term liabilities due to payments of operating lease liabilities [173]. - The company had no borrowings under its $75 million revolving credit facility at the end of fiscal 2025 [172]. Inventory Management - Year-end inventory decreased to $113.5 million from $122.6 million at the end of fiscal 2024, reflecting ongoing inventory efficiency initiatives [169]. Technology and Marketing - The company completed the implementation of an AI-based allocation system and began developing an AI-based merchandise planning system [147]. - The company launched a holiday marketing campaign that garnered over 55 million views and engagements [147]. Commitments and Accounting - As of January 31, 2026, the company's contractual commitments for operating leases totaled $309.9 million, with $63.5 million due within 12 months [177]. - The company is currently evaluating the impact of new accounting standards on its consolidated financial statements and disclosures [182][183][184]. Currency Exposure - The company sources all products in U.S. Dollars and is not directly subject to foreign currency exchange rate fluctuations [185].