Financial Performance - For the year ended December 31, 2025, the company generated $151.8 million in revenue, a decline of approximately 15.8% compared to $180.4 million in 2024[19] - For the year ended December 31, 2025, the company reported approximately $152 million in revenue, a decline of approximately 15.8% compared to $180 million in 2024[34] - Average revenue per case in 2025 was $12,809, with a requirement for 100% private pay upfront, eliminating reimbursement risk[32] - Selling expenses for 2025 were approximately $36.9 million, representing about 24.3% of total revenue[52] - Customer acquisition costs were approximately $3,114 per customer in 2025[52] - Total advertising costs for 2025 were $27.3 million, with approximately 90% allocated to digital advertising[51] Market Dynamics - The addressable market for body fat reduction procedures was estimated to be $11 billion in 2022, with a projected compound annual growth rate of 9% through 2027[20] - The increasing use of weight-loss drugs may lead to higher demand for body contouring and skin tightening procedures, indicating a shift in market dynamics[21] - Increased market acceptance of weight-loss drugs may lead to higher demand for body contouring and skin tightening procedures, although long-term impacts remain uncertain[21] - The company aims to enhance brand awareness and attract new patients, capitalizing on the growing acceptance of body contouring and cosmetic treatments[35] Operational Scale and Innovation - The company performed 11,852 body contouring procedures in 2025, showcasing its operational scale and market presence[18] - The introduction of new procedures, such as AirSculpt + and AirSculpt Smooth, reflects the company's commitment to innovation in body contouring[18] - In fiscal year 2025, the company focused on new product innovation, including the introduction of new services like the skin tightening procedure and the Hip Flip® and CankCure®[35] - The proprietary AirSculpt method allows for minimally invasive fat removal and skin tightening, differentiating the company from traditional procedures[25] - The AirSculpt procedure is designed to be minimally invasive, requiring no needle, scalpel, stitches, or general anesthesia, which differentiates it from traditional liposuction[38] Geographic Presence - The company operates 31 centers across 20 U.S. states and Canada, enhancing its geographical reach and patient access[18] - As of March 31, 2026, the company operates 31 centers across 20 U.S. states and Canada, generating an average revenue per case of $12,809 in 2025[32] - The company aims to expand its footprint with over 200 potential locations identified in North America, although new center openings are currently on hold to improve liquidity[37] - The company’s centers typically range from 3,000 to 5,000 square feet and are staffed by independent surgeons and support personnel, operating six days a week[49] Human Resources and Talent Acquisition - Surgeons at the company are compensated competitively, often earning more than the average full-time salary in private practice, which aids in attracting top talent[30] - The company employs approximately 330 full-time employees and 33 part-time employees, with contracts with about 90 surgeons as of December 31, 2025[74] - Each Professional Association contracts with surgeons, who are paid a percentage of the professional fees collected, typically ranging from 40% to 60%[62] - The company faces competition for high-quality surgeons and professionals in the body contouring and cosmetic surgery industry[64] Compliance and Regulatory Environment - The company has structured its operations to comply with healthcare laws and regulations, but acknowledges potential risks from evolving interpretations of these laws[67] - The company acknowledges the potential impact of regulatory changes on its business structure and operations[67] - The company operates under strict state laws that prohibit non-physicians from practicing medicine, which could impact its operational structure[71] - The company emphasizes the importance of maintaining necessary licenses and accreditations for its centers to operate profitably[69] - The company seeks accreditation from The Joint Commission for all its centers, demonstrating its commitment to safety and quality in patient care[69] Marketing and Customer Engagement - The company plans to optimize marketing investments to enhance efficiency and drive sustainable revenue growth through data-driven insights[53] - The company generated over 625,000 monthly website visits through optimized digital marketing efforts[37] - Approximately 50% of cases in 2025 involved patients securing third-party financing, enhancing affordability and customer accessibility[54] - Approximately 50% of cases in 2025 involved patients securing third-party financing, indicating a focus on expanding consumer financing options[54] Intellectual Property - The company's patent portfolio includes multiple issued and pending patents, underscoring its focus on protecting innovative technologies in body contouring[28] - The company has a patent portfolio consisting of two issued U.S. utility patents and one pending application, with expectations for patents to expire in 2033 or later[55] - The company’s patent portfolio includes two issued U.S. utility patents and several pending applications, supporting its proprietary technology in body contouring[28] Business Structure and Agreements - The company has entered into long-term Management Services Agreements (MSAs) with Professional Associations, typically with an initial term of 10 years, which automatically renew for successive 5-year terms[63] - The company has established Continuity Agreements with Surgeon Owners to ensure operational stability and continuity within its Professional Associations[65] - The company has entered into Continuity Agreements to ensure the stability of Professional Associations, which include provisions for ownership transfer under specific circumstances[65] Company History - The company was founded in 2012 and reorganized in 2018, completing its IPO on October 28, 2021[77]

Table of Contents UNITED STATES SECURITIES AND COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended: December 31, 2025 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission File Number: 001-41214 Cycurion, Inc. (Exact name of registrant as specified in its charter) Delaware 86-3720717 (State or other ju ...

Financial Performance - For the year ended December 31, 2025, net revenues decreased by $2.6 million, or 14.8%, to $15.1 million compared to $17.8 million in 2024, attributed to delayed start dates of new contracts and a focus on more profitable business[209] - The cost of revenues for 2025 was approximately $13.5 million, a decrease from $14.1 million in 2024, driven by lower service delivery costs due to decreased revenues[210] - Gross profit for 2025 was $1.6 million, with a gross profit percentage of 10.7%, down from $3.6 million and 20.5% in 2024[208] - Total operating expenses surged to $25.0 million in 2025, compared to $1.2 million in 2024, primarily due to business combination expenses and increased SG&A costs[208] - The company reported an operating loss of $23.4 million for 2025, contrasting with an operating income of $2.4 million in 2024[208] - Interest income increased to $27,538 in 2025 from $20,211 in 2024, reflecting changes in the balance of interest-earning assets[215] - Interest expense rose to $1.8 million in 2025 from $1.2 million in 2024, attributed to underlying debt instruments[216] - A net gain of $1.2 million on debt settlement was recorded in 2025 due to the conversion of debt to equity instruments at a lower fair market value[217] - As of December 31, 2025, the company had $5.3 million in cash and cash equivalents, indicating sufficient liquidity for operating requirements in the coming fiscal years[218] Business Growth and Strategy - As of December 31, 2025, Cycurion reported a committed backlog of approximately $80.0 million, up from $16.0 million in 2024, indicating significant growth in contractually committed orders[56] - The company has integrated SLG Innovation, Inc. to expand its footprint in public-sector IT modernization, enhancing its service offerings[21] - The company emphasizes organic growth through business solutions and strategic acquisitions of cybersecurity services and technology providers[24] - Cycurion's cybersecurity solutions target federal government agencies and commercial clients, driving growth through organic solutions and strategic acquisitions[190] - The integration of technology assets from Sabres into the Cycurion Security Platform is expected to enhance service offerings and support commercial business expansion[205] Client and Revenue Concentration - Purchases from the four largest end-customers accounted for approximately 64.5% of total revenue in 2025, compared to 63.8% in 2024, highlighting a strong reliance on key clients[55] - The company serves a diverse range of industries, including government, healthcare, and higher education, with a focus on providing tailored IT solutions[55] Contracts and Backlog - The company has a current backlog of $69 million, with an additional $4.6 million in new contracts expected to generate revenue over the next year, totaling $73.6 million[69][70] - The company was awarded a $22 million multi-year contract for a criminal justice case management system and a $6 million contract by a major municipal agency[64][65] - The company has been awarded a $1.1 million contract to modernize legacy data systems for a large county-level public guardian office[73] Operational Challenges - The company has experienced a decline in revenue due to the conclusion of certain key government contracts during fiscal year 2025[81] - The government contracting process is lengthy and complex, with delays due to funding uncertainties and protests, making revenue difficult to predict[88] - Government contracts are often structured as indefinite delivery/indefinite quantity (IDIQ) contracts, which do not guarantee minimum service orders, leading to unpredictability in revenue streams[89] - Approximately half of U.S. states have proposed state-level efficiency initiatives that could impact existing contracts and new engagements, leading to potential delays in contracting backlog[85] Financial Health and Risks - The company has a net working capital deficit and accumulated deficit, raising substantial doubt about its ability to continue as a going concern[100] - The company has significant indebtedness, which could adversely affect its financial condition and limit operational flexibility[102] - The company may need to increase compensation levels to attract and retain qualified personnel, which could adversely affect operating margins[110] - The company does not maintain key-person life insurance on its executive officers, which poses a risk if key personnel leave[110] - The company may experience immediate and substantial dilution of ownership due to future equity issuances[125] - The company may not have adequate insurance coverage, exposing it to significant uninsured liabilities that could adversely affect cash position and operations[133] Market and Competitive Landscape - The competitive landscape for cybersecurity solutions remains intense, with Cycurion facing established and emerging vendors in the market[51] - The competitive landscape for cybersecurity and IT services is intense, with competition from large defense contractors and specialized firms, which may affect revenue and operating results[86] - Changes in government contracting regulations could reduce contract opportunities, impacting competitive dynamics in the market[131] Cybersecurity and Compliance - Cycurion's managed security services include 24/7 monitoring, threat detection, and incident response, which are critical for safeguarding clients against cyber threats[34] - The company is subject to various data privacy and security obligations, including compliance with the CCPA and EU GDPR[58] - The company is subject to heightened data protection obligations due to its provision of cybersecurity services to government clients, with potential penalties for compliance failures[129] - The company's cybersecurity program aligns with industry standards and includes measures for risk assessment, incident response, and employee training[145][148] - The Board of Directors receives periodic updates on cybersecurity risks and management activities, integrating cybersecurity oversight into broader risk management processes[165] Stock and Shareholder Matters - The company plans to distribute a special dividend valued at $500,000 in the form of its common stock to shareholders of record as of December 15, 2025[68] - The company has entered into a stock-for-stock exchange agreement with iQSTEL, involving $1 million worth of common stock from each party[68] - The company has received deficiency notices from Nasdaq regarding its failure to meet minimum bid price and market value requirements, which could lead to delisting[111] - The common stock price has experienced substantial volatility since trading began on Nasdaq, which may continue to fluctuate significantly due to various external factors[121] - A reverse stock split was executed on October 27, 2025, reducing the number of outstanding shares from approximately 86.5 million to about 2.9 million[115] - The company regained compliance with Nasdaq's minimum bid price requirement on November 11, 2025, allowing its securities to continue trading without interruption[117] - Future sales by existing stockholders under registration rights may depress the market price of the company's shares[123] - FINRA's sales practice requirements may limit stockholders' ability to buy and sell common stock, potentially adversely affecting the market for shares[130] Strategic Partnerships and Innovations - The company has partnered with AgileBlue, an AI-powered security operations platform provider, to enhance its service offerings[66] - Cycurion Crypto was formed in July 2025 to position the company within the digital asset ecosystem[192] - The company announced a strategic business reorganization aimed at enhancing operational agility and long-term growth[76] - The integration of artificial intelligence introduces new risks, including regulatory compliance challenges and potential operational impacts[98] - The company’s growth strategy relies on acquisitions, which involve integration risks and the potential for unforeseen liabilities[106] - Strategic partnerships and international expansion expose the company to various business risks, including regulatory challenges and geopolitical instability[108] Legal and Regulatory Risks - Accusations of intellectual property infringement could result in significant costs and harm the company's reputation, diverting management's attention[132] - The company incurs significant costs related to legal, accounting, and compliance obligations as a public company, which may increase over time[137] - Changes in effective tax rates or adverse outcomes from tax audits could negatively impact the company's financial condition and operating results[139] - Macroeconomic conditions, including inflation and rising interest rates, could adversely affect the company's revenue, margins, and overall financial performance[142]

Exhibit 99.1 Catheter Precision Reports 2025 Results and Updates on Strategic Expansion Clinical, Commercial and Regulatory Milestones Achieved in 2025 Establish a Strong Foundation in Life Sciences as Revenue Increases 95% Year Over Year Acquisition of Flyte and Strengthened Capital Position Unlock Multi-Segment Growth Strategy with Multiple Near-Term Catalysts FORT MILL, S.C., March 31, 2026 – Catheter Precision, Inc. (NYSE American: VTAK) ("VTAK" or the "Company"), a U.S.- based innovative medical device ...

Exhibit 99.1 Catheter Precision Reports 2025 Results and Updates on Strategic Expansion Clinical, Commercial and Regulatory Milestones Achieved in 2025 Establish a Strong Foundation in Life Sciences as Revenue Increases 95% Year Over Year Acquisition of Flyte and Strengthened Capital Position Unlock Multi-Segment Growth Strategy with Multiple Near-Term Catalysts FORT MILL, S.C., March 31, 2026 – Catheter Precision, Inc. (NYSE American: VTAK) ("VTAK" or the "Company"), a U.S.- based innovative medical device ...

Financial Performance - Kodiak Sciences reported a net loss of $56.7 million for Q4 2025, compared to a net loss of $44.1 million in Q4 2024, with a loss per share of $1.04[14]. - The net loss for the year ended December 31, 2025, was $230.0 million, compared to a net loss of $176.2 million in 2024[35]. - Cash and cash equivalents as of December 31, 2025, were $209.9 million, an increase from $168.1 million in 2024, indicating improved liquidity[36]. - Total assets increased to $351.5 million as of December 31, 2025, compared to $335.6 million in 2024, reflecting growth in the company's financial position[36]. - Kodiak's accumulated deficit reached $1.56 billion as of December 31, 2025, up from $1.33 billion in 2024, highlighting ongoing investment in R&D[36]. Research and Development - Research and development (R&D) expenses for Q4 2025 were $45.5 million, up from $31.8 million in Q4 2024, driven by increased clinical activities[15]. - R&D expenses for the full year 2025 totaled $182.4 million, compared to $126.1 million in 2024, reflecting increased clinical activities[16]. - Research and development expenses for the year ended December 31, 2025, were $182.4 million, up from $126.1 million in 2024, reflecting increased investment in clinical programs[35]. - KSI-501 is designed to provide high immediacy and durability in treating retinal vascular diseases, with a focus on addressing unmet needs in the market[27]. Clinical Trials and Studies - The GLOW2 Phase 3 study showed that 62.5% of Zenkuda-treated patients achieved a ≥2-step improvement in diabetic retinopathy severity score (DRSS), compared to 3.3% in the sham group[9]. - Zenkuda demonstrated an 85% risk reduction in developing sight-threatening complications, with 2.4% of Zenkuda patients versus 15.8% of sham patients experiencing such complications[9]. - The Phase 3 DAYBREAK study for Zenkuda and KSI-501 aims to demonstrate non-inferiority in visual acuity gains compared to aflibercept, with topline data expected in Q3 2026[29][30]. - The company is advancing KSI-101 in Phase 3 studies, with topline results expected in Q4 2026 and Q2 2027[4]. Equity and Funding - Kodiak completed an equity offering in December 2025, issuing 8 million shares at $23.00 per share, resulting in net proceeds of $173.0 million[10]. Technology and Innovation - Kodiak's digital health initiatives include the development of an AI-powered wearable headset for retina care, reflecting a long-term strategy to integrate therapeutics and vision technologies[6]. - The company is exploring the development of an AI-powered wearable headset for applications in retina care, indicating a diversification of its technology portfolio[33]. - Kodiak aims to accelerate the timeline for a multi-indication BLA submission for Zenkuda, with expectations for future regulatory applications[33]. General and Administrative Expenses - General and administrative (G&A) expenses for Q4 2025 were $12.0 million, down from $14.4 million in Q4 2024, aided by sublease income[17].

Financial Performance - ZyVersa Therapeutics reported a net loss of $25.0 million for the year ended December 31, 2025, compared to a net loss of $9.4 million for the previous year, representing a 165.1% increase in losses[187][202]. - The company incurred a net loss of $25.0 million for the year ended December 31, 2025, with an accumulated deficit of $137.6 million as of the same date[212]. - Total operating expenses for 2025 were $25.5 million, a significant increase of 179.0% compared to $9.1 million in 2024[202]. - Future operating losses are expected to continue for several years as the company develops its product candidates and seeks marketing approval[219]. Research and Development - Research and development expenses decreased by approximately $0.7 million or 37.4% to $1.1 million in 2025, primarily due to fewer consultants and a pause in the VAR200 clinical trial[203]. - The impairment of in-process research and development was $18.6 million in 2025, a significant decline from the previous year when no impairment was recorded[205]. - The company recorded an $18.6 million impairment charge for in-process research and development, reflecting a full impairment of the intangible asset due to a decline in market capitalization[229]. Cash and Financing - As of December 31, 2025, ZyVersa had an accumulated deficit of approximately $137.6 million and cash of $0.1 million, indicating a critical need for additional financing[187][211]. - Current assets as of December 31, 2025, were $0.348 million, while current liabilities were $12.735 million, resulting in a working capital deficiency of $12.387 million[210]. - Cash requirements for current liabilities as of December 31, 2025, are approximately $12.7 million for accounts payable and accrued expenses[214]. - The company expects to continue incurring significant expenses related to the development of its product candidates VAR 200 and IC 100, and will seek additional financing through equity or debt[188][189]. - The company plans to raise additional capital through equity, equity-linked securities, or debt to fund continued development of its product candidates[216]. - The company’s cash on hand is only sufficient to fund operations on a month-to-month basis, indicating a need for additional financing[215]. Corporate Governance and Compliance - The company expects to incur significant costs related to corporate governance and compliance as a public company[219]. - The company is classified as an "emerging growth company" under the JOBS Act, allowing it to delay compliance with certain accounting standards[223]. - The company does not have any off-balance sheet arrangements that could materially affect its financial conditions[225]. Stock and Market Activity - ZyVersa's common stock was delisted from Nasdaq on October 6, 2025, and began trading on the OTCQB under the symbol "ZVSA" on July 28, 2025[190]. - The company has no arrangements in place for acquisitions or in-licensing but continues to evaluate strategic transactions to enhance its product pipeline[220].

Financial Performance - Aqua Metals reported cash and cash equivalents of approximately $10.8 million as of December 31, 2025, up from $4.1 million in 2024, indicating a significant improvement in liquidity [18]. - Total assets decreased to $19.7 million as of December 31, 2025, from $26.4 million in 2024, primarily due to reductions in property, plant, and equipment [18]. - Aqua Metals reported a net loss of $22.6 million for the year ended December 31, 2025, compared to a net loss of $24.6 million in 2024, reflecting a reduction in losses year-over-year [19]. Production and Quality Achievements - The company achieved a major milestone by producing the first cathode active material made from 100% domestically sourced, recycled nickel, which is currently undergoing qualification by a tier-one battery manufacturer [6]. - The company produced lithium carbonate with fluorine content below 30 ppm, representing best-in-class quality in the recycling sector, and generated significant volumes of mixed hydroxide product for partner qualification [6]. Strategic Initiatives - Aqua Metals refined its commercialization strategy for its first AquaRefining™ Campus, prioritizing battery-grade lithium carbonate and mixed hydroxide precipitate, which is expected to more than double initial lithium output and improve margins [6]. - Aqua Metals advanced the design of a scalable AquaRefining™ Campus facility capable of processing 10,000 to 60,000 metric tons per year of black mass [7]. - The company signed a multi-year supply agreement with 6K Energy for future supply of battery-grade nickel metal and lithium carbonate, supporting domestic cathode active material production [15]. - Aqua Metals expects to provide an update on its potential transaction with Lion Energy, which could materially expand its commercial platform and strategic reach across the battery value chain [6]. Funding and Investment - The company raised $13.0 million in October 2025 from a leading institutional investor, contributing to total new funding of approximately $17.1 million to advance engineering and site selection for its first commercial-scale facility [15].

Financial Performance and Projections - As of December 31, 2025, the company reported U.S. federal net operating loss carryforwards (NOLs) of approximately $160.7 million and state NOLs of approximately $94.6 million, which may begin to expire in 2037 and 2038 respectively [256]. - The company expects to incur additional costs to remediate material weaknesses and improve internal controls, which may impact financial performance [250]. - The company’s financial reporting relies on estimates and judgments that may change, potentially affecting reported results and market perceptions [261]. - The company may face significant legal, accounting, and compliance costs as a public entity, which could impact profitability if revenue does not increase accordingly [255]. - The company does not expect to declare or pay any dividends on its Common Stock for the foreseeable future, relying on share price appreciation for investor returns [339]. - The company faces risks related to economic conditions, including recession and inflation, which may impact customer demand and financial performance [349]. - The company has limited operating history selling connected fitness hardware products, making it difficult to predict the impact of current economic conditions on sales [352]. Internal Controls and Compliance - The company has identified material weaknesses in its internal control over financial reporting, including inadequate segregation of duties and system limitations in accounting software [246][258]. - The company plans to implement measures to improve internal control over financial reporting, including hiring additional qualified personnel and engaging financial consultants [247][248]. - The company has not assured that efforts to remediate internal control weaknesses will be successful or timely, which could lead to restatements of financial statements [249]. - Being a public company has resulted in increased costs and regulatory requirements, which could adversely affect the company's operations and financial condition [313]. - The company intends to hire additional accounting and finance personnel to comply with the Sarbanes-Oxley Act, but may face challenges in recruiting qualified professionals [314]. Tax and Regulatory Risks - The company is subject to indirect taxes in the U.S. and various foreign jurisdictions, which may lead to substantial tax liabilities if tax authorities challenge its tax calculations [265]. - Changes in U.S. and international tax laws could materially impact the company's effective tax rates and increase compliance costs [270]. - The company may incur significant costs to comply with new tax reporting and collection obligations imposed by taxing authorities [266]. - Changes in U.S. or foreign trade policies, including tariffs, could materially impact the company's financial condition and operations [307]. - The company is exposed to international trade risks, including tariffs and trade restrictions, which could increase operating costs and reduce margins [280]. Market and Economic Conditions - Uncertainty in global economic conditions may adversely affect demand for the company's products and services [272]. - Economic uncertainty may adversely affect consumer discretionary spending, leading to reduced demand for the company's products and services [352]. - Ongoing inflationary pressures in the United States could increase operating costs, including employee compensation and manufacturing costs, negatively affecting the company's financial condition and results of operations [351]. - The company has not implemented specific measures to mitigate inflationary pressures but may consider price increases or changes to its pricing model in the future [351]. Competition and Operational Challenges - Increased competition and the need to adapt products for international markets could negatively impact the company's operations and financial results [272]. - Competition for qualified personnel is intense, particularly in Southern California, which may hinder the company's ability to attract and retain skilled employees [366]. - The company relies heavily on its executive officers and key personnel, and the loss of these individuals could adversely affect business operations [362]. Acquisitions and Integration - The company entered into an Asset Purchase Agreement in October 2023 to acquire substantially all assets of CLMBR, which may involve integration challenges and impact financial results [359]. - Acquisitions may result in the recording of goodwill and other intangible assets, which could be subject to impairments and harm financial results [360]. Legal and Compliance Risks - Legal proceedings related to various matters could adversely affect the company's financial condition and operations [370]. - Non-compliance with U.S. export controls and economic sanctions could lead to significant penalties and harm the company's revenue [296]. - Compliance with UK GDPR and the Data Protection Act 2018 may create additional complexities and compliance burdens for the company [288]. - The company has begun implementing an anti-corruption compliance program to mitigate risks associated with violations of anti-corruption laws [303]. Environmental and Social Governance - Increasing scrutiny regarding environmental, social, and governance (ESG) practices may impose additional costs and risks, potentially harming the company's reputation and financial performance [354]. - Climate change poses long-term risks that could disrupt business operations and increase costs, impacting the company's financial condition and results [358]. - The company may face increased costs and operational restrictions due to compliance with environmental, health, and safety laws, which could materially affect its business and financial condition [312]. Currency and Interest Rate Risks - Fluctuations in exchange rates could impair the ability of members to purchase products, adversely affecting demand and financial condition [259]. - Foreign currency risk exists as a portion of operating expenses is incurred in foreign currencies, potentially impacting gross margins [484]. - Substantially all outstanding debt instruments have fixed interest rates, minimizing the impact of interest rate fluctuations on cash flows [486].

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]