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]

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].

Revenue and Profit - Revenue for 2025 was $14,208,000, an increase of $3,491,000 or 33% compared to $10,717,000 in 2024, driven by sales of Twist & Go smoothies and Pop & Go juice pops [139]. - Gross profit for 2025 was $3,114,000 (22%) compared to $3,668,000 (34%) in 2024, reflecting a decrease due to product mix and increased costs [141]. - Cost of revenue increased by $4,045,000 (57%) in 2025, totaling $11,094,000, primarily due to the inclusion of raw and processed milk operations [140]. Expenses - Selling, marketing, and distribution expenses rose by approximately $43,000 (1%) to $3,182,000 in 2025 from $3,139,000 in 2024 [144]. - General and administrative expenses increased by approximately $143,000 (5%) to $3,186,000 in 2025, with personnel costs decreasing by $37,000 (3%) [147]. - Interest expense increased by $165,000 to $217,000 in 2025, attributed to receivables financing and mortgage debt related to the Acquisition [152]. Net Loss and Financial Position - The company reported net losses of approximately $2,694,000 in 2025, a slight improvement from a net loss of $2,825,000 in 2024 [153]. - For the year ended December 31, 2025, the company reported a net loss adjusted for non-cash operating expenses of $2,839,000, with $1,666,000 used in operations [159]. - As of December 31, 2025, the company had negative working capital of $6,303,000, a significant decline from positive working capital of $606,000 on December 31, 2024 [160]. Financing and Debt - The company executed a $2,000,000 convertible debt offering, with $1,390,000 issued and $1,207,000 converted into approximately 820,000 shares of common stock [154]. - In March 2026, the company raised $7,528,000 through the sale of convertible promissory notes, which were used to retire $2,541,000 in mortgage debt and construction payables [161]. Acquisitions and Operations - The company paid $1,223,000 to acquire 100% of Arps Dairy stock and incurred $518,000 in acquisition costs in 2025 [157]. - Following the acquisition, Arps Dairy secured a receivables-based line of credit of $1,500,000 and the company acquired $728,000 of equipment through leasing transactions in 2025 [158]. - The company anticipates needing to manage construction costs and ramp up sales to achieve manufacturing cost synergies from the acquisition [162]. Product Launch and Market Presence - The company launched the ready-to-eat juice pop "Pop & Go" in Q4 2024, targeting school meal programs [127]. - The company received approval to sell smoothie products to all branches of the U.S. Armed Forces, currently supplying over one hundred military bases [125]. Challenges and Risks - The company faced a negative impact on its financial position and cash flow due to a dispute with the Manufacturer, resulting in a loss of product supply in 2022 [156]. - The company has no off-balance sheet arrangements that materially affect its financial condition [163]. - The company is classified as a smaller reporting company, thus not applicable for certain market risk disclosures [164].

Financial Performance - The order backlog as of January 31, 2026, was $28.2 million, slightly down from $28.3 million in 2025, indicating stable demand[39]. - The company has a total indebtedness of $9.5 million in USD term loan variable-rate debt, $9.6 million in term A-2 loan variable-rate debt, and $15.7 million under the revolving credit facility as of January 31, 2026[241]. - The weighted average interest rate on the company's variable-rate debt was 7.3% during fiscal 2026, while the weighted average interest rate on the revolving credit facility debt was 7.10%[242]. - A hypothetical 10% change in foreign currency exchange rates would result in an increase or decrease in the consolidated net loss of less than $0.1 million for the year ended January 31, 2026[239]. - Foreign exchange losses from transactional exposure amounted to $0.1 million for the year ended January 31, 2026[240]. Market Presence - The company sold products to customers in over 90 countries during fiscal 2026, reinforcing its global market presence[34]. - Over 80% of airborne printers sold by the company were ToughWriter branded by the end of fiscal 2026, with expectations for gradual increase[28]. Product and Technology - The MTEX acquisition enhances the commercial printing segment, providing mid-to-high volume direct-to-package printers and label printers, targeting efficient and cost-saving digital printing solutions[22]. - The Product ID segment offers a variety of digital color label printers and related supplies, catering to brand owners and commercial printers[20]. - The company is a market leader in tabletop digital color label printing technology and flight deck printers, with a strong reputation for quality and service[35]. - The company maintains a diverse technological expertise in data visualization, including electronic, software, and mechanical engineering[31]. - The company has a one-stop shop strategy for brand owners, providing label printers, media, inks, and management software[23]. - The company’s manufacturing strategy includes in-house production of many components, ensuring quality and supply chain reliability[33]. Human Resources - The company employs 398 full-time employees as of January 31, 2026, with a significant presence in the U.S. and Europe[44]. Compliance and Ethics - The company has adopted a Code of Conduct that applies to all directors, officers, and employees, ensuring compliance and ethical operations[58]. - The company intends to disclose any amendments to the Code of Conduct for key executives on its website[58]. Customer Commitment - The company is committed to achieving zero defects and understanding customers' changing needs and expectations[55]. - The company provides access to its Annual Report on Form 10-K and other financial filings on its website and the SEC's website[59]. Foreign Currency Exposure - The company is exposed to foreign currency exchange risk, particularly with subsidiaries using Danish Kroner and Euro as functional currencies[239]. - The cumulative foreign currency translation adjustment is recorded as a component of accumulated other comprehensive income (loss) in shareholders' equity[239].

Company Operations - Cumulus Media operates 393 radio stations across 84 markets, reaching a quarter billion listeners monthly[20] - The company operates 393 owned and operated radio stations across 84 markets, reaching a monthly audience of approximately 250 million listeners[41] - The company operates a total of 81 radio stations across various markets, with the highest concentration in Little Rock, AR (7 stations) and Modesto/Stockton, CA (8 stations) [69] - The company has a workforce of 2,862 employees, with 2,078 employed full-time, and maintains positive relations with employees covered by collective bargaining agreements[57][58] Financial Restructuring - The company emerged from Chapter 11 bankruptcy on June 4, 2018, after transferring assets to a wholly owned subsidiary[21] - The restructuring plan includes issuing $50 million in new convertible notes and new common stock, with 95% allocated to certain debt holders[28] - The Bankruptcy Court has scheduled a hearing for the confirmation of the restructuring plan to begin on April 15, 2026[32] - The company cannot assure that the Bankruptcy Court will confirm the Plan or that modifications will not be required[113] - The Plan aims to reduce the company's debt by approximately $592 million, but there is no assurance that the company will successfully meet its debt service costs post-emergence from Chapter 11 protection[134] - The company expects financial results to remain volatile until it emerges from Chapter 11, as asset impairments and restructuring activities may significantly impact consolidated financial statements[129] - The company may need to raise funds through public or private debt or equity financing after emerging from Chapter 11, and there is no guarantee that sufficient funds will be available on favorable terms[132] - The Company filed for Chapter 11 bankruptcy on March 4, 2026, to implement a restructuring plan[210] - The restructuring plan includes cancellation of existing equity securities and issuance of new common stock to debt holders[213] - The Company plans to continue operations as a debtor-in-possession during the bankruptcy proceedings[217] Revenue Streams - Cumulus Media generates revenue from three streams: broadcast radio, digital advertising, and other revenue sources[34] - Digital revenue includes advertising from podcasts, streaming audio, and various digital marketing services[38] - The advertising exposure is diversified across various industries, with top segments including professional services, home products, entertainment, automotive, and general services[48] - The company’s advertising revenues are seasonal, with generally lower revenue in the first quarter and higher revenue in the fourth quarter, leading to variations in quarterly operating results[136] - A loss of advertising customers or lower advertising rates could materially affect the company's operating results and financial performance[141] Market Position and Competition - The company aims to enhance its competitive position in the audio landscape through strategic market leadership and leveraging local relationships[40] - The company operates in a highly competitive industry, facing competition from other media and large companies like Facebook, Google, and Amazon, which could adversely affect advertising revenues[122] - The competitive environment is highly challenging, with potential decreases in audience ratings and market share adversely affecting revenues[150] Legal and Regulatory Environment - The company faces potential impacts from new laws and regulations that could affect the operation and profitability of its radio stations[89] - The FCC ownership rules may limit the number of stations the company can own in a given market, and future changes to these rules are unpredictable[90] - The broadcasting industry is subject to extensive FCC regulations, which could impact the company's ability to operate and acquire additional stations[169] - The company has been granted a petition by the FCC allowing 100% foreign voting and/or equity ownership, subject to monitoring stockholder citizenship [73] Cybersecurity and Technology - The company faces potential adverse effects on financial performance due to cybersecurity incidents, which could disrupt operations and compromise client information[139] - The company has a layered cybersecurity strategy to manage risks, including ongoing monitoring and employee training on emerging AI-driven threats[183][186] - The company engages third-party service providers and evaluates their cybersecurity risks, particularly as AI capabilities become integrated into their products[187] - The legal and regulatory landscape surrounding AI is uncertain, which may entail significant costs or limit the company's ability to incorporate AI capabilities[147] Employee Relations and Corporate Culture - The company focuses on a corporate culture that supports employee engagement, which is critical for driving performance and attracting new talent[50] - The company may experience increased employee attrition and uncertainty, which could adversely affect business operations and results[128] Financial Risks and Liquidity - The Company projects sufficient liquidity to operate through the Plan Effective Date, but there is no assurance that revenue will meet liquidity requirements[110] - The company has limited access to additional financing during Chapter 11 Cases, raising concerns about liquidity and operational obligations[160] - The company is exposed to credit risk on accounts receivable, which is heightened during uncertain economic conditions, and reserves for bad debts may not be sufficient[167] - Cash flow from operations is critical for funding operations and capital expenditures, and any decrease could result in reduced revenues over time[159] Future Outlook - The company expects to continue operations without adverse impact during the restructuring process[27] - The company cannot predict the timing of the Plan Effective Date, and failure to meet conditions precedent could result in no distributions being made under the Plan[116] - The Company has experienced targeted cybersecurity threats but has not been materially affected by any incidents to date[188]