Revenue and Sales - Total revenue increased to $62,064 in 2025, compared to $52,347 in 2024, driven primarily by consumer products[81] - Product revenue rose to $61,794 in 2025 from $51,890 in 2024, with a notable increase in sales from consumer products[81] Costs and Expenses - Cost of revenue increased to $46,001 in 2025 from $36,159 in 2024, primarily due to higher materials and direct labor costs[81] - Research and development expense increased to $4,090 in 2025 from $3,837 in 2024, with higher labor and legal costs contributing to the rise[86] - Selling, general and administrative expense rose to $10,401 in 2025 from $7,219 in 2024, largely due to increased legal costs and labor[87] - Net interest expense increased to $931 in 2025 from $670 in 2024, attributed to higher usage of debt facilities[88] Cash Flow and Operating Activities - Cash used in operating activities was $(8,567,000) in 2025 compared to $1,971,000 provided in 2024, reflecting a significant year-over-year increase in cash outflow[90] Debt and Financing - The company maintained a credit agreement with Libertyville Bank & Trust, with no outstanding borrowings as of December 31, 2025[91] - A new Promissory Note was entered into on November 13, 2023, with a maximum borrowing amount of $2,000,000[95] - The company issued 15,000 shares of Series X Preferred Stock for total consideration of $6,000,000 under a Securities Purchase Agreement[97] - The Company extended the maturity date of its loan agreements from March 31, 2025, to October 1, 2025, through multiple amendments[102] - As of December 31, 2025, the balance on the Term Loan was $1,000,000, the A/R Revolver Facility was $4,767,397, and the Inventory Facility was $9,500,000[104] - The balance on the A/R Revolver Facility increased from $0 to $4,767,397 from December 31, 2024, to December 31, 2025[104] - The limit on the A&R Loan Agreement was expanded from $8,000,000 to $12,000,000, and the Business Loan Agreement limit was increased from $5,200,000 to $10,000,000[103] Future Projections and Tax Considerations - The Company expects capital spending for 2026 to be between $1 million and $3 million, depending on project success and funding availability[106] - The Company has federal net operating loss carryforwards of approximately $36.9 million as of December 31, 2025, with $30.7 million potentially expiring between 2026 and 2038[107] - Illinois net loss deduction carryforwards amount to approximately $20 million as of December 31, 2025, expiring between 2029 and 2039[107] - Future capital requirements will depend on customer acceptance of products and the success of research and development activities[106] - The Company may face limitations on the utilization of net operating loss carryforwards due to potential "ownership changes" as defined by the U.S. Internal Revenue Code[107] - The Company acknowledges that some portion of the net operating loss carryforwards may expire before being utilized[108]
Solesence Inc(SLSN) - 2025 Q4 - Annual Report