Business Transformation and Strategy - The company is undergoing a strategic transformation from Bitcoin Mining to HPC Infrastructure, which may not be successful [39] - The company has a limited operating history and a history of operating losses, making it difficult to evaluate its business and prospects [39] - The rapidly evolving regulatory landscape surrounding HPC, AI, and Bitcoin Mining may negatively impact the company's expansion efforts [43] Financial Risks and Performance - The high volatility of Bitcoin prices has significantly affected the profitability of the company's operations [43] - The company anticipates that future capital needs may not be met on acceptable terms, posing a risk to its operations [43] - The company has no current intention of paying cash dividends on its common shares [43] - The market price of the company's common shares has fluctuated significantly and may continue to do so [43] Supply Chain and Customer Dependence - The company relies on a limited number of third-party suppliers and manufacturers, exposing it to supply chain disruptions and trade risks [39] - The company is dependent on significant customers for its HPC data centers, with risks of customer default or late payments [43] Competition - The company faces intense competition from other Bitcoin Mining companies and established HPC data center operators [39]

Business Strategy and Operations - AgEagle has transitioned from manufacturing fixed-wing farm drones to offering a full-stack drone solution, acquiring three market-leading companies in 2021 to enhance its UAS capabilities[20] - The company is focused on evaluating merger and acquisition opportunities to expand its product offerings and improve its cost structure[22] - AgEagle plans to relocate its headquarters to Allen, Texas in 2026, enhancing its operational capabilities[23] - The company plans to establish a new manufacturing facility in Texas, expected to begin operations in 2026, to capitalize on the demand for "Made in America" drones[39] - The company intends to consider additional strategic transactions, including acquisitions, joint ventures, or investments to expand or complement its current business[137] - Future acquisitions may involve substantial investments, which could dilute existing shareholders' interests or lead to increased debt[138] - The company faces challenges in generating sufficient revenue to achieve sustainable profitability and maintaining market share[114] Product Development and Technology - The eBee line of drones has logged over 500,000 flight hours and completed more than one million successful missions, demonstrating significant operational experience[28] - The eBee TAC was the first drone approved for the U.S. Department of War's Blue UAS Cleared List, allowing for immediate procurement by U.S. government agencies[28] - The eBee X can achieve a flight time of up to 90 minutes and cover up to 500 hectares in a single flight, making it suitable for BVLOS operations[30] - AgEagle's eBee VISION has been successfully tested by European Armed Forces, leading to multiple orders for prototypes in late 2023[32] - The Altum-PT sensor, introduced in early 2022, offers twice the spatial resolution of its predecessor, enabling deeper analytical capabilities and broader applications in agriculture[38] - AgEagle's RedEdge-P sensor, launched in early 2022, provides three times the capture speed and twice the spatial resolution of the RedEdge-MX, enhancing data collection efficiency for agricultural and forestry applications[41] - AgEagle's eBee X series drones are the first to comply with Category 3 of the FAA's Operations of Small Uncrewed Aerial Systems Over People rules, facilitating broader commercial applications[50] - AgEagle's new RedEdge-P™ dual sensor was released in May 2023, enhancing analytical capabilities for environmental monitoring and vegetation analysis[208] Financial Performance - Total revenue for 2025 was $12,811,082, a decrease from $13,392,777 in 2024, with drone revenue increasing to $7,857,059 from $6,410,305[55] - As of December 31, 2025, the company reported an accumulated deficit of approximately $231.2 million, with a net loss of approximately $5.3 million for the year ended December 31, 2025, and a net loss of $35.0 million for the year ended December 31, 2024[78] - The company expects to incur significant additional operating expenses as it continues to invest in its business strategy and growth[78] - The company will require additional funding to support ongoing research and development activities and the commercialization of existing and new products[79] - The company has a history of operating losses and cannot guarantee when it will generate sufficient cash flows from operations[78] Market and Industry Trends - The global military drone market is projected to grow from $24.25 billion in 2025 to $56.69 billion by 2033, with a CAGR of 11.20% during the forecast period[36] - The U.S. Department of Transportation plans to award $100 million in grants for drone use in critical infrastructure projects, supporting domestic drone manufacturers[35] - AgEagle aims to capture a significant share of the global drone market, particularly in agriculture, energy/utilities, infrastructure, and government/military sectors[204] - Global economic challenges, including rising inflation and supply-chain disruptions, pose risks to operational and financial performance, impacting the ability to manufacture drones and sensors[213] Compliance and Regulatory Environment - Regulatory approvals for UAV operations are uncertain, and public privacy concerns may restrict the expansion of drone solutions in commercial markets[136] - Compliance with the Foreign Corrupt Practices Act and other anti-bribery laws is critical, as violations could lead to severe penalties and disrupt business operations[152] Risks and Challenges - The company faces significant risks and uncertainties that could materially harm its business and financial condition if not addressed successfully[115] - Product development for UAV systems is costly and time-consuming, with significant investments required in research and development, which may not yield returns for several years[116] - Successful technical development does not guarantee commercialization, as market acceptance depends on demonstrating product capabilities and competition from established players[117] - The company competes with firms that have greater resources, which may allow them to offer superior products or more competitive pricing, potentially impacting the company's margins[118] - The company maintains cash deposits exceeding federally insured limits, which poses liquidity risks if financial institutions face adverse developments[127] - The company relies on subcontractors for performance, and failures in their obligations could compromise contract fulfillment and damage the company's reputation[128] Human Capital and Corporate Governance - As of March 31, 2026, the company employed 58 full-time employees and 1 part-time employee, emphasizing the importance of human capital[63] - The company maintains a focus on employee health and safety, adhering to established safety procedures and regulatory requirements[66] - The company relies heavily on senior management and key employees, and their loss could significantly harm business objectives and customer relationships[156] Shareholder and Market Information - The company does not intend to pay cash dividends, focusing instead on retaining earnings for business development[161] - The market price of the company's securities may be volatile, influenced by factors such as stock sales by executives and announcements related to product developments[159] - The Common Stock reached a high of $3.40 and a low of $0.75 per share during the fiscal year 2025[160] - The quarterly high and low closing sales prices for Common Stock in 2025 were $3.40 and $0.75, respectively[191] - As of March 31, 2026, there were approximately 294 individual shareholders of record for the Common Stock[191]

Transaction and Financial Implications - The Transaction Agreement with Lilly involves the acquisition of the entire issued share capital of the Company at a price of $38.00 per share, plus contingent value rights (CVRs) potentially worth up to $9.00 per share based on specified milestones[198]. - The Company may incur significant costs related to the Transaction, including approximately $63 million in termination fees under certain circumstances, which could adversely affect its financial condition if the Transaction is not completed[202]. - The completion of the Transaction is subject to customary closing conditions, including shareholder approval and regulatory clearances, which are beyond the Company's control[199]. - The announcement of the Transaction may create uncertainty and disrupt business operations, potentially affecting relationships with partners and stakeholders[201]. - The CVRs issued to shareholders may expire valueless if specified milestones are not achieved, limiting potential future benefits from the Transaction[207]. Operational and Personnel Challenges - As of December 31, 2025, the Company had 118 full-time equivalent employees, and future growth may require additional personnel across various functions, impacting management's focus on day-to-day operations[212]. - The Company may face challenges in attracting and retaining key personnel, which could hinder its ability to develop and commercialize product candidates[212]. - The company relies on a small team of 118 full-time equivalent employees across various geographies, which may limit operational capacity[217]. - The transition to a new CEO, effective January 1, 2026, is critical for executing the company's business strategy and may involve inherent risks[216]. Financial Position and Funding Needs - As of December 31, 2025, the company had cash, cash equivalents, and investments totaling $577.1 million, expected to fund operations into mid-2028[233]. - The company has incurred significant net losses since inception and does not anticipate generating revenue from product sales for several years, if ever[223][228]. - The company expects to incur significant expenses as it continues research and clinical development, with potential fluctuations in net losses from quarter to quarter[223][227]. - The company may need to seek additional funding sooner than planned due to uncertainties in capital consumption and operational needs[233]. - The company will seek additional funding through public or private equity offerings, debt financings, or a combination of these sources, with potential dilution for shareholders if equity securities are issued[237]. Product Development and Regulatory Risks - The Company faces risks related to the successful development of its product pipeline, which is critical for generating future revenue and maintaining its financial position[208]. - The company has three product candidates in clinical development, with the remainder in preclinical stages, emphasizing the need for regulatory approvals for commercialization[253]. - Delays in clinical trials due to various factors could significantly impact development timelines and costs, affecting the company's ability to bring products to market[253]. - The company may encounter delays in obtaining Investigational New Drug applications (INDs) or face suspensions of clinical trials due to safety concerns or regulatory issues[258]. - The company has limited experience in managing clinical trials necessary for regulatory approvals, which typically take many years[279]. Intellectual Property and Legal Challenges - The company faces risks related to intellectual property, including the need to obtain licenses from third parties, which could harm business if not secured on reasonable terms[336]. - The patent prosecution process is expensive and time-consuming, and failure to file necessary applications could hinder the ability to secure patent protection[342]. - The company may face challenges regarding the validity and enforceability of its patents, which could adversely affect its ability to commercialize product candidates[357]. - Legal proceedings to enforce patents could lead to counterclaims of invalidity, which are common in patent litigation and could result in loss of patent protection[358]. - The company may incur significant expenses from intellectual property claims, which could harm its financial condition and operational results[362]. Market and Competitive Environment - The company faces significant competition in a rapidly changing technological environment, which may adversely affect its ability to market or commercialize product candidates[289]. - Competitors may develop therapies that are safer, more effective, or less expensive, potentially limiting the company's market opportunities[291]. - Market opportunities for future oncology products may be limited, as they target patients ineligible for or who have failed prior treatments[311]. - Estimates of patient populations for future oncology products may be inaccurate, potentially leading to lower than expected eligible patients[312]. Manufacturing and Supply Chain Risks - Manufacturing processes are complex and subject to disruptions, which could materially impact development and commercialization[323]. - The company relies on third-party manufacturers for product candidates, exposing it to risks such as supply chain shortages and quality control issues[328]. - Problems in the supply chain or manufacturing processes could restrict the ability to meet future market demand for products[327]. - Legislative proposals in the U.S. could negatively impact funding for biotechnology providers, potentially causing supply chain disruptions[332].

Financial Performance - DSS, Inc. reported year-over-year revenue growth and increased printed product sales within the Product Packaging segment for Q1 2025[19]. - Total revenue for the year ended December 31, 2025, increased by 9% to approximately $20.8 million compared to $19.1 million in 2024[134]. - Revenue from printed products rose by approximately 12% to $18.1 million, driven by new and existing customer orders[134]. - Commercial lending revenue fell by approximately 80% to $45,000, attributed to loans going on non-accrual[134]. - Total costs and expenses decreased by 43% to $35.2 million from $61.7 million in 2024[135]. - Interest income decreased by 92% year-over-year to $19,000 in 2025, primarily due to several notes being put on non-accrual as borrowers showed inability to pay timely[145]. - The loss on investments was $807,000 in 2025, a significant decline compared to a gain of $224,000 in 2024, primarily due to the performance of True Partners Capital Holdings Limited[150]. - Net cash used by operating activities was approximately $9.1 million in 2025, compared to $8.8 million in 2024, reflecting a decrease in net loss adjustments[157]. - Net cash provided by investing activities increased to approximately $18.1 million in 2025 from $12.1 million in 2024, including $15.7 million from real estate sales[158]. - Net cash used by financing activities was approximately $14.1 million in 2025, primarily due to payments toward long-term debt[159]. Strategic Initiatives - DSS aims to reduce costs by 15-20% in the upcoming fiscal year to improve profitability and strengthen its financial position[23]. - The Company is strategically expanding key business units, such as Premier Packaging, to drive growth and contribute to long-term revenue generation[22]. - DSS is committed to exploring untapped markets to create scalable and recurring revenue streams across multiple sectors[23]. - The Company is focusing on advancing research and development in emerging sectors, such as biomedical technologies and sustainable packaging[23]. - The Company is implementing metrics-driven accountability systems across all business units to ensure consistent execution of high-priority opportunities[23]. Intellectual Property and Innovation - Impact BioMedical announced the issuance of a U.S. patent related to its 3F™ intellectual property portfolio, expanding its patent protection[21]. - DSS holds nine issued patents and over forty pending patents worldwide, with expiration dates ranging from 2029 to 2040, enhancing its competitive position[48]. - Key products in development include LineBacker for various diseases, Equivir for antiviral treatments, and Laetose, a sugar alternative believed to lower glycemic index by 30%[46]. - The company plans to develop additional new inventions and intellectual property, which will require significant capital and time, with risks of not yielding viable results[88]. - Patent application delays could hinder revenue recognition from internally generated patents and may result in missed licensing opportunities[91]. Market and Customer Concentration - As of December 31, 2025, one customer accounted for approximately 29% of consolidated revenue, indicating a significant reliance on key clients[58]. - The company reported that five customers accounted for 19%, 18%, 13%, 12%, and 11% of its trade accounts receivable balance as of December 31, 2025, highlighting customer concentration risk[73]. - The company emphasizes sustainability in its packaging operations, working closely with suppliers to meet rigorous sustainability standards[60]. Financial Health and Risks - The company has outstanding indebtedness totaling approximately $37.0 million under the LifeCare Agreement, which is currently in default[72]. - The company faces risks related to intellectual property infringement, which could result in costly litigation and negatively affect financial condition[74]. - Future business expansion may strain management and financial resources, requiring additional controls and personnel[83]. - The company is subject to unique risks in its investments in Asia, including regulatory changes and trade restrictions, which could adversely affect earnings[82]. - The company has identified weaknesses in its internal control over financial reporting, which may lead to errors in financial statements and potential restatements, impacting investor confidence and stock price[86]. - The company incurred significant marketing and development costs for bio-health related products, with no assurance of commercial acceptance impacting financial results[76]. Operational Overview - The Company completed the sale of its Plano, Texas facility for $9.5 million, using a portion of the proceeds to reduce outstanding debt[19]. - The Company received FINRA approval for Sentinel Brokers Company to act as an underwriter for corporate securities offerings, including IPOs[18]. - The Company reported four operating segments for 2025, focusing on innovation and diversification, with Premier Packaging and Commercial Lending adapting to market demands[42]. - The Securities and Investment Management segment is a key growth pillar, expanding into real estate investment, digital securities, and wealth management solutions[42]. - Premier Packaging provides custom packaging services across various industries, including pharmaceuticals and consumer goods, and is involved in security printing and brand protection technologies[42]. - American Pacific Financial, the commercial lending arm, focuses on providing commercial loans and acquiring equity positions in undervalued financial entities across the U.S. and Asia[43]. - The Biotechnology segment is dedicated to addressing urgent medical needs, with ongoing research in drug discovery for neurological, oncology, and immuno-related diseases[44]. Compliance and Governance - The Company has been audited by Grassi & Co., CPAs, P.C. from 2022 to 2025, ensuring compliance with PCAOB standards[210]. - The Company’s financial statements for the year ended December 31, 2024, present fairly its financial position in conformity with GAAP[199]. - The valuation of real estate properties is a critical audit matter due to the complexity of valuation models and sensitivity to key assumptions[205]. - The Company is subject to numerous laws and regulations, and changes in these could significantly increase compliance costs[92]. Employee Relations - DSS has 102 employees as of December 31, 2025, and maintains good relations with its workforce, which is not covered by collective bargaining agreements[66].

Financial Performance - Net income attributable to the Company for 2025 was $16.4 million, or $4.89 per diluted share, an increase from $11.9 million, or $3.57 per diluted share in 2024[244]. - Net income attributable to the Company for the year ended December 31, 2025, was $16.4 million, an increase of 37.0% from $11.9 million in 2024, resulting in earnings per share of $4.89 compared to $3.57[262]. - The total annual shareholder return was 87.3% for 2025, significantly higher than 19.6% in 2024[244]. Operational Efficiency - The efficiency ratio decreased to 58.4% in 2025 from 64.1% in 2024, indicating improved operational efficiency[244]. - Return on average assets improved to 1.34% in 2025 from 1.02% in 2024, while return on average equity increased to 13.18% from 10.97%[244]. Asset and Loan Growth - Total assets grew to $1,271.995 million in 2025, up from $1,187.523 million in 2024[258]. - Net loans increased to $654.1 million in 2025, compared to $631.2 million in 2024[258]. - Net loans receivable increased by $22.9 million from $631.2 million at December 31, 2024 to $654.1 million at December 31, 2025, driven by increases in multifamily residential, commercial real estate, and home equity loans[288]. - Total deposits increased by $56.6 million to $1.12 billion at December 31, 2025, with time deposits and non-interest bearing deposits rising by $37.5 million and $22.1 million, respectively[291]. Income and Expenses - Net interest income rose by $6.4 million, or 17.8%, from $35.8 million in 2024 to $42.2 million in 2025, driven by an increase in the average tax-equivalent yield on interest-earning assets[263]. - Noninterest income rose to $8.465 million in 2025, up from $7.656 million in 2024[258]. - Noninterest expenses increased by $1.7 million in 2025, primarily due to higher compensation and benefits, and occupancy and equipment expenses[270]. - Provision for credit losses decreased from $1.4 million in 2024 to $1.1 million in 2025, reflecting a lower incremental change in estimated lifetime expected credit losses[268]. Interest Rates and Yield - The average yield on total loans increased from 6.05% in 2024 to 6.29% in 2025, reflecting improved interest income[282]. - The interest rate spread improved to 3.12% in 2025 compared to 2.70% in 2024, indicating better management of interest-earning assets[282]. - The effective tax rate increased to 17.7% in 2025 from 15.6% in 2024, resulting in an increase in income tax expense of $1.3 million[271]. Capital and Shareholder Equity - Total stockholders' equity attributable to the Company increased by $23.2 million from $114.6 million at December 31, 2024, to $137.8 million at December 31, 2025[293]. - The community bank leverage ratio improved to 11.01% in 2025 from 10.57% in 2024, indicating stronger capital position[261]. Strategic Plans and Growth Opportunities - The Company plans to enhance profitability by expanding product offerings and leveraging technology investments[247]. - Management intends to focus on growth in the loan portfolio and secondary market lending programs in 2026[247]. - The Company is evaluating growth opportunities through acquisitions to expand its market area and market share[247]. Risk Management - The Company has developed strategies to manage liquidity and reduce exposure to interest rate fluctuations by emphasizing short-term commercial and consumer loans[302]. - The Company does not engage in hedging activities or maintain a trading account for any class of financial instrument, thus avoiding foreign currency exchange rate risk[303]. - Management evaluated and adjusted deposit rate betas and key interest rate index ties during the year ended December 31, 2025, to reflect the current interest rate environment[312]. Market and Regulatory Compliance - The Bank maintained a CBLR of 11.01% as of December 31, 2025, in compliance with all regulatory capital requirements[299]. - Recent accounting pronouncements impact is discussed in Note 1 of the accompanying Notes to Consolidated Financial Statements[314]. - Market risk analysis is detailed in "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations – Market Risk Analysis" in the Annual Report on Form 10-K[315].

Financial Performance - Alpha Modus reported royalty revenue of $7,138 for the year ended December 31, 2025, compared to $0 in 2024[305]. - The company experienced a net loss of $8,021,235 for the year ended December 31, 2025, a decline from a net income of $4,103,067 in 2024[308]. - Total other expenses for 2025 amounted to $2,777,047, including $3,981,641 in interest expense, contrasting with total other income of $4,938,162 in 2024[307]. Operating Expenses - Operating expenses increased significantly to $5,251,326 in 2025 from $834,895 in 2024, primarily due to higher professional fees and consulting costs[306]. - Cash used in operations was $3,210,182 for the year ended December 31, 2025, compared to $1,676,499 in 2024[310]. Cash Reserves and Financing - As of December 31, 2025, Alpha Modus had cash reserves of $68,000 and indicated a need to raise at least $2,500,000 to support ongoing operations[309]. - The company had net cash provided by financing activities of $2,550,418 in 2025, slightly down from $2,664,610 in 2024[311]. Strategic Plans - Alpha Modus plans to enhance consumer in-store experiences through data-driven technologies, including smart planograms and inventory management solutions[298]. - The company is classified as an emerging growth company and intends to utilize the benefits of the JOBS Act for financial reporting[314]. Off-Balance Sheet Arrangements - Alpha Modus does not have any off-balance sheet arrangements that could materially affect its financial condition[304].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ 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: 001-40775 ALPHA MODUS HOLDINGS, INC. (Exact name of registrant as specified in its charter) Delaware 86-3386030 ...

Financial Performance and Capital Needs - As of December 31, 2025, the company had unrestricted cash of approximately $78 thousand and net losses of approximately $2.8 million for the year [127]. - The company has generated limited revenues since inception and may never achieve long-term profitability [117]. - The company has a history of losses and uncertainty regarding future earnings and cash flows, which may be volatile [119]. - The company must raise significant capital to conduct its current and proposed businesses, including the purchase of the Property from Sportech [135]. - The company plans to raise additional capital through equity or debt financings, with a potential drawdown of $1 million under the Sportech Loan facility [128]. - The company may not receive all anticipated proceeds from private placements, which could necessitate seeking additional capital under unfavorable terms [251]. Agreements and Funding - The company has entered into a Contribution Agreement with Sportech, which includes up to $10 million in funding for operations through 2027, contingent on the company's listing on a U.S. national stock exchange [123]. - Sportech has agreed to provide up to $10 million to fund the business and operations of the company through 2027, contingent on the company's listing on a U.S. national stock exchange [137]. - The company has entered into a Lease Agreement with Sportech for an initial term of three years, with an option to purchase the Property at €29.17 (approximately $34) per m² [135]. - The company has entered into a subscription agreement to sell up to $5.4 million of class A common stock at a price of $3.65 per share, representing the issuance of up to 1,480,937 shares [139]. - The company has entered into a Standby Equity Purchase Agreement (SEPA) with Yorkville, allowing for the purchase of up to $30 million of common stock over a period of 36 months [238]. - The company has entered into private placement agreements for an aggregate of approximately $7.13 million, having received approximately $3.85 million to date [251]. Operational Risks and Challenges - The company is dependent on the performance and popularity of Cádiz CF's men's first team, which could materially impact business results [116]. - The company may face challenges in attracting and retaining students for its programs, which could adversely affect business prospects [116]. - The company is subject to risks associated with international expansion and operations in foreign markets, which may impact overall business performance [116]. - The company faces intense competition in the sports merchandise industry, which is highly fragmented and includes both large companies and private labels [157]. - The company faces risks related to the infringement of its intellectual property rights, which could adversely affect its brand value and financial condition [176]. - The company may struggle to manage and adapt to technological changes, which could adversely affect its competitive position and financial results [208]. Construction and Development - The construction of JP Financial Arena is projected to be completed in the 2031 calendar year, involving over 26,600 m² of public open space and 1,800 parking spots [131]. - The total funding required for the development of JP Financial Arena and its associated infrastructure is estimated to be €285 million (approximately $334.1 million) [136]. - The development of JP Financial Arena is expected to be capital intensive and require more human resources than currently available [175]. - Public health issues, such as a pandemic, could negatively affect operations and visitor traffic towards JP Financial Arena [141]. - There is a risk of personal injury claims at events held at JP Financial Arena, which could increase operational expenses despite existing insurance coverage [198]. Market and Economic Factors - Economic and political risks associated with international operations may adversely affect profitability and growth prospects [152]. - Fluctuations in raw material costs and supply chain expenses could negatively impact profit margins and overall financial condition [162]. - The popularity of soccer, particularly in Spain, is crucial for the company's revenue streams, including ticket sales and sponsorships [186]. - Injuries to Cádiz CF players could adversely affect team performance and, consequently, the company's financial results [187]. - The company's financial success is expected to depend on Cádiz CF's popularity and competitive success, which cannot be guaranteed [188]. Governance and Compliance - The company is classified as an "emerging growth company," allowing it to take advantage of reduced disclosure requirements, which may affect investor attractiveness [218]. - As of December 31, 2025, executive officers and directors, along with major stockholders, own approximately 92.74% of the voting power, enabling significant control over corporate decisions [222]. - The company may face challenges in enforcing civil liabilities against its directors and management due to their non-resident status in the U.S. [215]. - Compliance with La Liga's financial and operational disclosure requirements may increase administrative burdens and costs for the company [212]. - Changes in laws and regulations regarding corporate governance are creating uncertainty and increasing compliance costs for the company [232]. Financial Reporting and Internal Controls - Material weaknesses in internal control over financial reporting have been identified, which could adversely affect the company's ability to accurately report financial results [233]. - The company is actively working to remediate identified material weaknesses, but there is no assurance that these efforts will be successful [234]. - The company may not be able to maintain effective internal controls, which could lead to restatements of financial statements and negatively impact investor confidence [235]. - Compliance with the Sarbanes-Oxley Act and other regulations increases legal and financial compliance costs, impacting overall business operations [230]. Strategic Initiatives - The company may pursue acquisitions and strategic transactions to expand its business, which could involve significant risks and capital commitments [174]. - The company plans to hire between four to six employees in Spain and two to four in the United States to support operations, particularly for the JP Financial Arena project [175]. - The success of the Nomadar HPT depends on student enrollment and the ability to develop and market training programs effectively [206]. - Nomadar has entered into an exclusive 20-year license agreement with Cádiz CF for the Mágico González brand, with Cádiz CF entitled to 15% of net sales from this brand [156]. - The company has entered into a 20-year HPT License Agreement with Cádiz CF, entitling Cádiz CF to 15% of net sales from the commercialization of the Nomadar HPT [203].

Financial Performance - The Company incurred significant losses and experienced negative cash flows, raising substantial doubt about its ability to continue as a going concern[29]. - Net loss for 2025 was $26,084,000, compared to a net loss of $8,983,000 in 2024, representing an increase in losses of approximately 190%[191]. - Loss from continuing operations for 2025 was $4,624,000, compared to a loss of $1,850,000 in 2024, an increase of approximately 150%[191]. - Total operating expenses increased from $1,941,000 in 2024 to $4,068,000 in 2025, an increase of approximately 109%[191]. - The company reported no revenue for 2025, consistent with the previous year[191]. - Discontinued operations reported a revenue of $6,009,000 for the year ended December 31, 2025, a decrease from $11,386,000 in 2024[95]. - The loss from discontinued operations, net of tax, was $21,460,000 for the year ended December 31, 2025, compared to a loss of $7,076,000 in 2024[95]. Cash and Liquidity - As of December 31, 2025, the Company had approximately $0.74 million in cash and cash equivalents and restricted cash, which is insufficient to fund ongoing operating costs[28]. - Cash and cash equivalents decreased from $1,417,000 at the beginning of 2025 to $739,000 at the end of 2025, a decrease of approximately 48%[195]. - The Company did not have committed sources of financing during 2025, which may impact its liquidity position[102]. - If unable to complete a special transaction or obtain additional capital, management may need to significantly curtail operations or pursue an orderly wind-down[107]. - The Company has contractual obligations totaling $513,000 due within one year, including operating lease obligations[108]. Strategic Alternatives - The Company is actively evaluating strategic alternatives to enhance stockholder value, including potential acquisitions and additional asset sales[19]. - Management is actively evaluating strategic alternatives to enhance stockholder value and improve liquidity, which may include special transactions[106]. - Global economic conditions and capital market volatility may adversely affect the Company's ability to obtain financing or complete a strategic transaction[42]. Shareholder and Stockholder Information - As of March 16, 2026, the largest stockholder beneficially owned approximately 61.3% of the outstanding common stock, giving them significant influence over corporate matters[53]. - As of March 31, 2026, First Finance Ltd. owned 1,641,162 shares, representing 61.3% of the outstanding common stock[157]. - The total number of shares beneficially owned by directors and executive officers as of March 31, 2026, was 2,789, representing 0.01% of the total[157]. Corporate Governance - The Audit and Compliance Committee includes Eric L. Robinson as Chairman, who is recognized as an "audit committee financial expert"[139]. - The Board of Directors determined that three directors are independent according to NASDAQ standards, ensuring no conflicts of interest[164]. - The Company has established insider trading policies that include quarterly blackout periods for trading in the company's securities[137]. - The company’s Code of Ethics is available on its website, ensuring compliance among directors, executive officers, and employees[136]. - The Audit and Compliance Committee will review transactions exceeding $120,000 involving directors or executives to ensure they align with the best interests of the Company[160]. Asset Sales and Transformations - The Company completed the sale of certain intellectual property and product inventory to Biamp Systems for gross cash consideration of $3.0 million on October 24, 2025[17]. - The Company completed the sale of substantially all of its operating intellectual property and related assets in October 2025, reporting these as discontinued operations[185]. - The Company completed the sale of a significant portion of its operating assets on October 24, 2025, leading to a shift in business focus[199]. - The Company incurred a loss on the sale of assets of $11,143,000 in the fourth quarter of 2025, primarily due to inventory write-downs[94]. Internal Controls and Compliance - The effectiveness of the Company's internal control over financial reporting was evaluated as effective as of December 31, 2025[120]. - The Company has no off-balance sheet arrangements that are likely to affect its financial condition or results of operations[110]. - The Audit and Compliance Committee reviewed all non-audit services provided by the independent registered public accounting firm and concluded they were compatible with maintaining independence[166]. Compensation and Employment - For the year ended December 31, 2025, Derek Graham's total compensation was $249,749, while Simon Brewer's was $307,477[142]. - The company terminated Derek Graham and Simon Brewer on December 31, 2025, with Graham receiving a severance of $57,500 and Brewer receiving no material severance[145][146]. - Simon Brewer was appointed Chief Financial Officer in April 2024, bringing over 25 years of experience in finance and operations[134]. Accounting and Fees - Audit fees for 2025 amounted to $217,655, a decrease of 11.3% from $245,493 in 2024[165]. - Tax fees increased to $68,527 in 2025 from $53,956 in 2024, reflecting a rise of 27%[165]. - Total accounting fees for 2025 were $286,182, down from $299,449 in 2024, representing a decrease of 4.4%[165]. - The Company paid $50,000 in consulting fees to Edward D. Bagley in 2025, with no stock options granted during that year[161].

Financial Performance - Turn Therapeutics Inc. reported net losses of approximately $3.19 million and $1.77 million for the years ended December 31, 2025 and 2024, respectively, with an accumulated deficit of approximately $22.39 million as of December 31, 2025[317]. - Total operating expenses increased by $4.06 million from $1.80 million in 2024 to $5.86 million in 2025, primarily due to legal and advisory services related to the company's direct listing[330][332]. - General and administrative expenses rose to $5.59 million in 2025, up from $1.55 million in 2024, driven by increased payroll costs and professional fees[332]. - Research and development expenses remained relatively stable, with a slight increase from $245,956 in 2024 to $265,570 in 2025[330][333]. - Net cash used in operating activities for the year ended December 31, 2025, was $2.56 million, primarily due to a net loss of $3.19 million[343]. - The company recognized stock-based compensation expenses of $0.42 million for the year ended December 31, 2025[343]. Liquidity and Capital Resources - The company had cash and cash equivalents of approximately $5.08 million as of December 31, 2025, compared to $0.87 million in 2024, indicating improved liquidity[318]. - As of December 31, 2025, the company has approximately $5.08 million in cash and cash equivalents to fund operations for the next 12 months[341]. - The company expects to incur significant additional costs, including research and development, general and administrative expenses, and marketing expenses, and plans to fund operations through equity and debt financing[342]. - The company plans to engage in additional debt and/or equity financing as necessary to fund operations and planned research and development activities[342]. - Net cash provided by financing activities for the year ended December 31, 2025, was $6.92 million, mainly from proceeds of common stock issuance[346]. - The company issued an initial draw-down notice to GEM for 1,235,200 shares, resulting in gross proceeds of $4.07 million at approximately $3.29 per share[341]. Assets and Liabilities - Total assets as of December 31, 2025, were reported at $12.16 million, with total liabilities of $7.48 million[338][339]. - The company had federal cumulative net operating loss (NOL) carryforwards of approximately $14.5 million and state NOL carryforwards of approximately $7.3 million as of December 31, 2025[355]. - The company has established a full valuation allowance against its net deferred tax assets, indicating it is unlikely to recognize these benefits in the near future[355]. Clinical Development and Future Plans - GX-03 is currently being evaluated in a randomized, double-blind clinical study for moderate-to-severe eczema, with topline results expected in the first half of 2026[314][319]. - The company anticipates requiring approximately $60.0 to $65.0 million to complete planned Phase 3 trials for eczema and onychomycosis, and $1.5 million to $2.5 million for its vaccine program[340]. - The company has licensed the K183681 medical device to Medline Industries, which is expected to contribute to future revenue streams[315]. Derivative Liabilities - The change in fair value of derivative liability instruments resulted in a net gain of $2.57 million for the year ended December 31, 2025[334]. - Net cash used in investing activities for the year ended December 31, 2025, was $152.99 thousand, primarily for capitalization of patent-related legal costs[345].