Financial Performance and Growth - In 2025, TOMI Environmental Solutions experienced revenue headwinds but achieved significant commercial momentum and new market entries [18]. - The company entered into an equity line of credit allowing the option to sell up to $20 million of common stock over a 24-month period [29]. - In 2025, the company experienced significant growth in the Food Safety industry, particularly with the FDA's new rule allowing hydrogen peroxide as a direct food additive [42]. Contracts and Orders - The company announced a contract valued at approximately $450,000 for a SteraMist iHP Custom Engineered System installation at a leading university in Rhode Island [21]. - TOMI secured a signed purchase order valued at approximately $500,000 from a global biopharmaceutical leader for SteraMist iHP integration into sterile manufacturing [31]. - A custom integration pipeline valued at approximately $3 million was announced, with ten active projects across TOMI's SIS and CES platforms [30]. - Approximately $1.6 million of the $3 million integration pipeline has been awarded, with $800,000 recognized since the announcement [34]. Product Efficacy and Applications - The FDA broadened the permitted use of hydrogen peroxide as a direct food additive, significantly expanding SteraMist iHP's potential applications in the food safety market [26]. - SteraMist demonstrated efficacy in combating Honeybee Colony Collapse, enhancing TOMI's position in supporting global food security [23]. - SteraMist iHP achieves a 6-log (99.9999%) or greater kill rate, significantly outperforming most household and industrial disinfectants [67]. - The SteraMist product line includes mobile and permanently integrated solutions, achieving full room disinfection of spaces up to 103.8 m³ (3,663 ft³) in approximately 45 minutes [51]. Operational and Management Developments - The company appointed Mr. David Vanston as Chief Financial Officer to support operations and internal control improvement initiatives [22]. - The company employs 20 full-time executive, operational, and administrative personnel, operating with a lean, cross-functional team [74]. Market Demand and Trends - Healthcare-associated infections (HAIs) affect 7–10% of hospitalized patients globally each year, driving demand for advanced disinfection solutions [41]. - TOMI's BIT Solution sales remained stable, with increased demand from food safety clients following the FDA's late 2025 announcement [33]. - The BIT Solution's 7.8% hydrogen peroxide concentration allows for DOT transport advantages, as it falls below the threshold prohibiting air shipment of higher concentrations [73]. Intellectual Property and Brand Development - The company maintains over 200 trademarks registered or pending globally, covering chemical formulations, sterilization equipment, services, and training [71]. - The company has established relationships with large franchise networks, including T.A.C.T. (18 U.S. locations) and Steri-Clean (approximately 60 franchises) [43]. Research and Development - Research and development expenses for the years ended December 31, 2025 and 2024 were approximately $290,000 and $291,000, respectively [46]. - SteraMist was honored with the 2025 "Disinfection and Decontamination Products Company of the Year" award from Medtech Outlook [22].

Financial Performance - Tenaris reported an EBITDA of $2.9 billion and net income of $2.0 billion on net sales of $12.0 billion for the year[27]. - Free cash flow amounted to $2.0 billion, all of which was distributed to shareholders through dividends and share buybacks[27]. - The company proposed a 7% increase in the annual dividend per share compared to the previous year[27]. - Tenaris maintained a net cash position of $3.3 billion at year-end[27]. Market Operations - In the U.S. and Canada, Tenaris achieved record production levels, supplying 90% of its U.S. sales through its integrated production and supply chain[29]. - Major oil and gas companies are seeking new production reserves, and Tenaris is actively involved in supporting these projects with advanced coated line pipe solutions[30]. - The company is currently delivering casing for Shell's Sparta 20K project in the U.S. deepwater and extending services for ExxonMobil's operations in Guyana[31]. - In Latin America, Tenaris is investing to expand its fracking and coiled tubing service business, expecting to deploy a third set of equipment by year-end[32]. - Tenaris has consolidated its presence in the Middle East with a long-term agreement for the supply of OCTG to the Northwest Field development in Qatar[35]. Technological Advancements - The company is integrating advanced AI capabilities into its industrial and administrative processes to enhance efficiency and reduce environmental impact[36]. - The Rig Direct® service offering has been expanded globally, integrating digital solutions and supply-chain services to enhance operational efficiency and reduce costs[131]. Economic and Regulatory Challenges - The company is a global steel pipe manufacturer primarily focused on the oil and gas industry, which is sensitive to fluctuations in oil and gas prices, affecting demand for steel pipe products[55]. - The company has significant operations in Argentina and Mexico, facing heightened economic and political risks, including high inflation and regulatory uncertainty, which could adversely affect costs and profitability[59][60]. - The armed conflict in the Middle East has led to disruptions in global trade flows and increased energy prices, impacting the company's operations and financial condition[61]. - Climate change legislation and evolving ESG regulatory frameworks may reduce demand for the company's products and services, increasing operating costs and capital expenditures[62][64]. - The global market for steel pipe products is highly competitive, with excess capacity leading to pricing pressures and potential loss of market share[68]. - The company is subject to tariffs and international trade regulations, which could materially impact operations and cost structures[72]. - Antidumping and countervailing duty proceedings may affect the company's sales and access to important export markets[70]. - The company anticipates that the transition to a lower-carbon economy will require adaptation in its business strategy to maintain competitiveness[63]. - The physical risks associated with climate change, such as extreme weather events, could disrupt operations and adversely affect financial results[66][67]. - The company maintains a strong relationship with Pemex, a significant customer, but faces credit exposure due to delayed payments, which could impact revenues[60]. - The company faces challenges in profitability due to increases in raw material and energy costs, as well as disruptions in supply chains caused by geopolitical tensions, such as the Russia-Ukraine war and conflicts in the Middle East[73]. - The availability and pricing of critical raw materials are subject to volatility from various factors, including new regulations, natural disasters, and market fluctuations, which could adversely affect production and sales[74]. - Low capacity utilization and inability to attract a qualified workforce may negatively impact profitability, especially during economic downturns or crises like the COVID-19 pandemic[75]. - The adoption of artificial intelligence and automation in manufacturing may require reskilling of employees and could lead to labor relations challenges, affecting productivity and costs[76]. - The company plans to consolidate its position as a leading global supplier by reducing carbon emissions and developing low-carbon energy products, but implementation may face unexpected costs and delays[80]. - Acquisitions and partnerships are subject to scrutiny by regulatory authorities, which could impose conditions that affect the expected benefits and synergies of such transactions[82]. - External factors like market volatility and supply chain disruptions could undermine the anticipated benefits of the company's business strategy[83]. - Manufacturing disruptions from equipment failures or natural disasters could adversely impact operations and financial results[84]. - The company is exposed to foreign exchange rate risks due to its global operations, which could affect financial condition and results[89]. - Compliance with evolving environmental regulations may increase operating costs and impact competitiveness, particularly in jurisdictions with stringent standards[97]. - The company relies heavily on information systems and faces persistent cyber threats, which could materially impact business operations[104]. - Supply chain complexity increases operational risks, including potential disruptions and financial losses if critical third parties are affected[105]. - The company does not maintain standalone cyber insurance, which may leave it vulnerable to unmitigated cyber-related losses[106]. - Dividend payments depend on the financial condition of subsidiaries, which could be restricted by legal and regulatory limitations[108]. Shareholder and Corporate Structure - As of December 31, 2025, the controlling shareholder, San Faustin, owned 66.13% of the company's issued share capital, potentially influencing decisions that may not align with minority shareholders' interests[111]. Workforce and Production Capacity - The company has a workforce of around 25,000 people worldwide, supporting its operations and customer needs[120]. - The effective annual production capacity for seamless tubes is projected to be 4,743 thousand tons in 2025, with actual production expected to be 3,093 thousand tons[149]. - The Bay City seamless mill, a $1.8 billion investment, has a capacity of 823,000 tons per year and is part of Ternium's strategic expansion[153]. - The Veracruz facility in Mexico has an installed annual production capacity of 1,230,000 tons of seamless steel pipes and 1,200,000 tons of steel bars, enhancing Ternium's operational capabilities[161]. - The effective annual production capacity for seamless pipes is 371,000 tons, with an outside diameter range of 3.5 to 9.875 inches[165]. - The effective annual production capacity for welded pipes is 200,000 tons, with an outside diameter range from 4.5 to 12.75 inches[166]. - The principal manufacturing facility in South America has an effective annual production capacity of 794,000 tons of seamless steel pipe and 1,300,000 tons of steel bars[170]. - The welded pipe manufacturing facility in Argentina has an annual production capacity of 620,000 tons, processing steel coils and plates for various applications[172]. - The Confab facility in Brazil has an annual production capacity of 654,000 tons, producing welded steel pipes for oil, petrochemical, and gas applications[173]. - The TuboCaribe facility in Colombia has an estimated annual ERW production capacity of 105,000 tons and a finishing capacity of 250,000 tons for seamless pipes[174]. - The seamless steel pipe manufacturing facility in Romania has an annual production capacity of 258,000 tons[182]. - The facility in Saudi Arabia has an annual capacity of 390,000 tons for welded pipes, covering a diameter range from 2 to 20 inches[185]. - The threading facility in the United Arab Emirates has an annual finishing capacity of 70,000 tons, catering to premium technology demand[188]. - The total annual manufacturing capacity of sucker rods across various facilities is approximately 3.1 million units[194]. Sales and Market Trends - Total net sales for 2025 were $11,981 million, a decrease from $12,524 million in 2024 and $14,869 million in 2023[197]. - The Tubes segment accounted for 95% of total net sales in 2025, with net sales of $11,400 million, down from $11,907 million in 2024[197]. - North America represented 49% of Tubes sales in 2025, an increase from 46% in 2024, while South America accounted for 18%[198][199]. - U.S. crude oil production rose to 13.5 million b/d in 2025, up from 5.6 million b/d in 2011, making the U.S. the largest global producer of crude oil[202]. - The U.S. government extended a 25% tariff on steel imports to 50% in June 2025, impacting market prices and supply chains[205]. - The final antidumping duty rate for Tenaris's imports from Argentina was reduced to 6.76% in June 2025, down from 78.30%[209]. - In Canada, the government applied a 50% tariff on steel imports exceeding established quotas starting August 2025[216]. - The Canadian government initiated an antidumping investigation on OCTG from Mexico and other countries, with preliminary dumping rates of 26.2% for Mexico[217]. - Tenaris has been negotiating the renewal of its long-term agreement with Pemex, which has faced financial difficulties leading to reduced investments in drilling[219].

Revenue Performance - Consolidated revenue for the full year 2025 was approximately $54.3 million, a decrease of 18% from approximately $66.1 million in 2024[3] - Healthcare Operations revenue decreased by approximately $12.6 million to $39.7 million, attributed to a decline in total prescriptions filled by approximately $11.3 million[3] - Total e-Commerce revenues increased to approximately $14.6 million in 2025, up from $13.8 million in 2024, primarily due to increased sales of airtime and hardware[3] Gross Margin and Operating Expenses - Overall gross margin for 2025 declined to approximately 20%, down from 26% in 2024, with Healthcare Operations gross margin decreasing to approximately 19%[3] - Total operating expenses for 2025 were approximately $19.9 million, a significant decrease of 50% from approximately $40.0 million in the prior year[3] Net Loss and Cash Position - The net loss attributable to common stockholders for 2025 was approximately $11.7 million, or ($0.44) per diluted share, compared to a net loss of approximately $13.4 million, or ($0.65) per diluted share in 2024[11] - The company ended 2025 with approximately $13.7 million in cash and no meaningful unsecured debt, alongside approximately $15.0 million in working capital[11] Cost Reduction and Business Focus - The company successfully cut over $2 million in annualized costs and reduced staff headcount by more than 25%[11] - The company is focusing on higher margin healthcare business development and has secured new high-volume contracted medication fulfillment services[11] - Future growth opportunities include potential acquisitions and joint ventures to expand mail order medication fulfillment offerings nationwide[11] Asset and Liability Changes - Total assets decreased from $37,077 million in 2024 to $27,465 million in 2025, a decline of approximately 26%[17] - Total current assets fell from $32,079 million in 2024 to $24,156 million in 2025, representing a decrease of about 25%[17] - Cash reserves decreased significantly from $19,960 million in 2024 to $13,709 million in 2025, a reduction of approximately 31%[17] - Accounts payable and accrued expenses increased from $7,230 million in 2024 to $8,265 million in 2025, an increase of about 14%[17] - Total liabilities rose from $9,680 million in 2024 to $10,043 million in 2025, marking an increase of approximately 4%[17] Equity and Deficit Changes - The accumulated deficit widened from $48,351 million in 2024 to $60,063 million in 2025, an increase of about 24%[17] - Total equity decreased from $27,397 million in 2024 to $17,422 million in 2025, a decline of approximately 36%[17] - Additional paid-in capital increased from $75,697 million in 2024 to $77,586 million in 2025, an increase of about 2%[17] Inventory and Lease Liabilities - Inventory decreased from $4,881 million in 2024 to $3,396 million in 2025, a reduction of approximately 30%[17] - Operating lease liabilities decreased significantly from $404 million in 2024 to $158 million in 2025, a decline of about 61%[17]

Financial Performance - The company has incurred losses totaling €400.8 million since inception, with a net loss of €24.0 million for the year ended December 31, 2025[101]. - As of December 31, 2025, the company had cash and cash equivalents of €52.8 million[101]. - The company anticipates ongoing significant losses for the foreseeable future due to its focus on research and development[96]. - The company has not yet established a source of revenues sufficient to cover its operating costs[103]. - The company may encounter difficulties in raising additional funding, which could adversely affect its business and financial position[104]. Development and Clinical Trials - The company expects to continue incurring significant expenses related to the development and manufacturing of nanotechnology product candidates and conducting clinical studies[102]. - The company’s product candidates are in various phases of development, with a high rate of attrition expected[112]. - Clinical trials for product candidates, including JNJ-1900 (NBTXR3), may encounter substantial delays or fail to demonstrate safety and efficacy[120]. - Patient enrollment challenges could delay or prevent clinical studies, impacting the timeline for regulatory approval[133]. - The company faces potential delays in patient enrollment for clinical trials, which could increase costs and affect the timing of analyses and outcomes[137]. - Undesirable side effects from product candidates may halt clinical development, delay regulatory approval, or limit commercial potential[138]. - Limited clinical trial applications may reveal high incidence of side effects, impacting the development of product candidates[139]. Strategic Partnerships and Licensing - The company relies on its strategic licensee, Janssen, for the clinical development and commercialization of its lead product candidate JNJ-1900 (NBTXR3)[92]. - The global exclusive licensing agreement with Janssen is critical, as future payments from this agreement are expected to contribute significantly to revenue[159]. - The company transferred the sponsorship of the NANORAY-312 clinical trial to JJEI, increasing reliance on Janssen for oversight[160]. - The company relies on third-party partners for the development and commercialization of JNJ-1900 (NBTXR3), increasing operational risks[157]. - The company may face significant disruptions if Janssen terminates the licensing agreements, impacting expected revenue and operational stability[163]. Regulatory and Compliance Risks - The approval processes for product candidates, such as JNJ-1900 (NBTXR3), are lengthy and costly, with no guarantee of success[212]. - Regulatory changes could significantly increase costs and complexity in drug development, impacting the economic value of product candidates[211]. - Ongoing regulatory requirements will apply even after obtaining marketing authorization, affecting manufacturing, labeling, and post-market safety[217]. - Compliance with healthcare laws is essential to avoid significant penalties and reputational harm, impacting future earnings[221]. - The company is subject to numerous environmental, health, and safety laws, and failure to comply could result in substantial costs and impair research and development efforts[191]. Intellectual Property Risks - The company's competitive position may decline if it fails to adequately protect its intellectual property rights, including patents and trade secrets[237]. - Patent protection is uncertain due to potential challenges from third parties and the lengthy process of obtaining patents, which may affect the commercialization of product candidates[238]. - The lifespan of patents is limited, with issued patents and applications expiring between 2029 and 2045, potentially impacting the company's competitive advantage[250]. - The company may not seek patent protection in all jurisdictions, limiting its ability to enforce intellectual property rights globally[252]. - The company’s success depends on its ability to operate without infringing on third-party intellectual property rights, which could lead to costly litigation or licensing fees[263]. Operational and Management Risks - The company expects its employee base to continue to grow as it manages development and expansion, which includes operating manufacturing facilities and commercializing product candidates[181]. - The management identified no material weaknesses in internal control over financial reporting as of December 31, 2025, but future weaknesses could limit the ability to prevent or detect misstatements[196]. - The company relies heavily on key management personnel, and losing them could have a material adverse effect on its operations[272]. - Attracting and retaining qualified personnel is critical, and failure to do so could negatively impact the company’s ability to develop its product candidates[273]. Market and Competitive Environment - The company faces substantial competition in the biotechnology and oncology industries from companies with greater resources and experience[98]. - Pricing pressures are expected to continue and may increase, making it difficult for the company to sell future products at acceptable prices[233]. - Political and legislative uncertainty may harm the company's ability to market products and generate revenues, potentially increasing compliance and operating expenses[232]. - Cost-containment measures by governments and payors may adversely affect the company's ability to set fair prices for its products[226]. Cybersecurity and Data Privacy Risks - Cybersecurity threats, including ransomware attacks, pose significant risks to the company's information technology systems and could disrupt operations and clinical trials[198]. - Data privacy regulations, including GDPR and HIPAA, impose requirements on the collection and use of personally identifiable information, and non-compliance could adversely affect the company's operations and financial condition[203]. - The company faces potential civil and criminal penalties if it fails to comply with applicable privacy laws, including GDPR and HIPAA[206].

Revenue and Growth - Revenue for the year ended December 31, 2025, increased by approximately 5% year-over-year to $48,450,000, up from $46,028,000 in 2024[4] - Revenue for the year ended December 31, 2025, was $48,450,000, an increase from $46,028,000 in 2024, representing a growth of approximately 5.2%[24] - Revenue from the Public Safety product line increased to $17,401,000 in 2025, up from $14,807,000 in 2024, primarily due to higher perpetual license sales[8] Financial Performance - Gross margins expanded to 56% in 2025, compared to 49% in 2024, driven by a focus on higher-value, recurring revenue streams[4] - Adjusted EBITDA loss was reduced by approximately 38%, improving from a loss of $29,103,000 in 2024 to a loss of $18,101,000 in 2025[14] - Loss from operations improved by 47%, decreasing from $54,323,000 in 2024 to $28,886,000 in 2025[11] - The net loss for 2025 was $31,460,000, compared to a net loss of $61,410,000 in 2024, reflecting an improvement of about 48.7%[24] - Loss per common share for 2025 was $0.26, significantly better than the loss per share of $0.71 in 2024[24] Cash Flow and Expenses - The company achieved positive operating cash flow in Q4 2025, marking its first quarter of cash inflow from operations[4] - Total operating expenses for 2025 were $55,957,000, down from $77,007,000 in 2024, indicating a decrease of approximately 27.4%[24] - Cost of revenue decreased to $21,379,000 in 2025 from $23,344,000 in 2024, a reduction of about 8.5%[24] - Research and development expenses decreased to $14,596,000 in 2025 from $18,766,000 in 2024, a decline of approximately 22.4%[24] Assets and Liabilities - Total assets increased to $85,387,000 as of December 31, 2025, compared to $82,475,000 in 2024[20] - Total liabilities decreased to $42,517,000 in 2025, down from $48,334,000 in 2024, reflecting improved financial health[20] - Total stockholders' equity increased to $42,870,000 as of December 31, 2025, up from $34,141,000 in 2024, a growth of approximately 25.5%[22] - Accumulated deficit increased to $291,553,000 in 2025 from $260,093,000 in 2024, indicating a rise of about 12.1%[22] Strategic Initiatives - The company on-shored Rekor Command® engineering and product operations to the United States, enhancing customer service and product responsiveness[4] - Rekor announced plans to launch Rekor Labs, a new subsidiary focused on developing patented products for identifying synthetically created and modified media[4] Shareholder Information - The weighted average shares outstanding increased to 119,667,774 in 2025 from 86,717,724 in 2024, reflecting an increase of about 37.9%[24]

Financial Performance - 76.1% of the underlying properties in the portfolio are stabilized with a weighted average occupancy of 90.5%[41] - The portfolio-wide weighted average debt service coverage ratio (DSCR) is 1.24x, and the weighted average loan to value (LTV) is 63.6%[41] - The average debt service coverage ratio (DSCR) indicates a strong ability to cover debt obligations, supporting investment stability[41] - The weighted average maturity of investments is 3.1 years as of December 31, 2025, indicating a relatively short-term investment horizon[41] Investment Strategy - The primary investment objective is to generate attractive, risk-adjusted returns for stockholders over the long term[42] - The company targets investments in first-lien mortgage loans, mezzanine loans, preferred equity, and multifamily properties, focusing on top 50 MSAs[44] - The expected leverage ratio will not exceed 3-to-1, which is considered prudent given the asset-level leverage typically present[46] - The company actively monitors and stress-tests each investment to make informed and proactive investment decisions[43] Competitive Landscape - The company competes with various institutional investors, including other REITs and specialty finance companies, which may affect its ability to acquire target assets at attractive prices[60] Management and Fees - The management fee paid to the Manager is 1.5% of Equity, paid monthly in cash or shares[51] Regulatory Compliance - The company has elected to be treated as a REIT for U.S. federal income tax purposes, starting from the taxable year ended December 31, 2020[62] - The company must continuously meet various requirements under the Code to maintain its REIT status, including income sources, asset composition, and distribution levels[62] - The company intends to conduct operations to avoid registration as an investment company under the Investment Company Act, ensuring that investment securities do not exceed 40% of total assets[64] - Certain subsidiaries are expected to meet the exclusion requirements under Section 3(c)(5)(C) of the Investment Company Act, which necessitates at least 55% of assets to be qualifying assets[66] - The company is classified as a "smaller reporting company" and may utilize scaled disclosures available to such companies[67] - As of December 31, 2025, the company had no employees, as it is externally managed by its Manager[68]

Revenue Segmentation - For the year ended December 31, 2025, approximately 27% of revenue was generated by the e-Commerce segment and 73% by the healthcare segment[15]. - e-Commerce operations generated revenue from two primary sources: product sales and recurring service revenue, with recurring service revenue representing an increasing proportion of total revenue[19]. - Amazon accounted for approximately 31% of total e-Commerce revenue in 2025, highlighting the importance of third-party marketplaces[19]. - The company operates three proprietary global e-Commerce websites and approximately 25 third-party marketplace storefronts, with over 10,000 product listings[20][31]. - The company has a diverse customer base, with no single customer representing more than 3% of annual gross e-Commerce revenue[45]. Strategic Plans and Acquisitions - The company plans to target US government sales, which historically have not represented a significant part of revenue, aiming to become an approved seller on the US Government's GSA Schedule[37]. - The company intends to pursue future acquisitions to increase scale, expand revenue, and access new markets[38]. - The company aims to expand its product offerings and open new global e-commerce storefronts to develop revenue in new markets[36]. - There are opportunities for geographic expansion of dispensing operations throughout the U.S., supported by investments in sales and marketing efforts[66]. - The specialty pharmacy industry is highly fragmented, presenting opportunities for strategic acquisitions to enhance competitive positioning[67]. Healthcare Operations - Pharmco, a subsidiary, achieved a Five Stars performance score from EQuIPP® for the year ended December 31, 2025, ranking among the top pharmacies in the U.S.[50]. - ClearMetrX offers data management and reporting services, including Third-Party Administration (TPA) services for 340B covered entities, pharmacy data analytics, and HEDIS Quality Measures management[51]. - Pharmco pharmacies provide contracted pharmacy services under the 340B Drug Discount Pricing Program, acting as a pass-through for reimbursements on prescription claims[52]. - Pharmco utilizes a unit-of-dose packaging system for long-term care facilities, enhancing distribution efficiency and patient care[54]. - The average adherence rate for patients to prescribed medication protocols is 50%, with the company employing proactive patient engagement strategies to improve this metric[69]. - The company plans to grow its healthcare operations by focusing on data management services, which are expected to drive growth due to their higher margins and diverse monetization pathways[65]. - The healthcare operations face substantial competition from large companies like CVS Caremark and Walgreens, which have significant market share and resources[75]. - The healthcare segment focuses on improving medication adherence and expanding long-term care pharmacy services[214]. - The healthcare segment participates in the federal 340B Drug Pricing Program, contributing to pharmacy segment margins[210]. Financial Performance and Risks - For the year ended December 31, 2025, the company incurred a net loss of approximately $10.5 million, compared to a net loss of $22.5 million for the year ended December 31, 2024[110]. - As of December 31, 2025, the company had an accumulated deficit of approximately $60.1 million[110]. - The primary supplier accounted for 98% of pharmaceutical purchases for the year ended December 31, 2025, with McKesson being the main supplier[109]. - The company has experienced inventory shortages due to supply chain constraints, manufacturing, and logistical issues[108]. - The company expects to incur additional losses prior to recording sufficient revenue from operations due to costs associated with maintaining public company status and expanding revenue sources[110]. - The company is subject to various risks, including the ability to obtain sufficient funding and retain market share in the industry[111]. - The company faces risks related to inventory and receivables, as significant working capital is required for purchasing inventory, which may lead to write-downs if demand is overestimated[145]. - A significant portion of the pharmacy segment's gross profit is derived from the federal 340B Drug Pricing Program, and adverse changes to this program could materially affect profitability[164]. - The company is exposed to cybersecurity risks, and any significant incident could adversely affect operations and financial condition[168]. - The company incurs substantial legal and compliance costs as a public entity, which may affect investor confidence and stock price[175]. Compliance and Regulatory Issues - The company emphasizes compliance with federal and state regulations, ensuring adherence to legal requirements in its operations[81]. - The company operates under significant regulatory scrutiny, particularly regarding compliance with healthcare laws and regulations[99]. - The company has been notified by Nasdaq of its failure to comply with certain continued listing requirements, including maintaining a minimum bid price of $1.00 per share[129]. - The company received a letter from Nasdaq notifying it of its eligibility for a second 180-day period to regain compliance with the minimum bid price requirement, which ends on April 27, 2026[131]. - A reverse stock split proposal was approved by shareholders to increase the stock price and regain compliance with Nasdaq listing requirements[132]. - If the stock price falls below $1.00 for ten consecutive trading days following the reverse stock split, the company will be subject to immediate delisting from Nasdaq[138]. - The company may face challenges in maintaining compliance with Nasdaq listing rules even after a successful reverse stock split, potentially impacting its ability to attract financing partners[138]. - The Reverse Stock Split aims to help regain compliance with Nasdaq's Minimum Bid Price Requirement and enhance liquidity, but its long-term effectiveness is uncertain[139]. - The company expects the Reverse Stock Split to increase the market price of its common stock, but it may also reduce the total number of outstanding shares, potentially decreasing liquidity[141]. - If the Reverse Stock Split leads to a decrease in the market price of the common stock, the overall market capitalization of the company may decline[143]. Corporate Structure and Operations - The company had 121 full-time employees and 9 part-time employees as of December 31, 2025[107]. - The company relocated its corporate office to a 11,000 sq. ft. facility in Hallandale Beach, Florida, in August 2025[184]. - The company operates through two primary segments: e-Commerce Operations and Healthcare Operations, focusing on global distribution and healthcare analytics[208]. - The company has never paid cash dividends and does not anticipate doing so in the foreseeable future[199]. - A $2.0 million share repurchase program was authorized on December 16, 2024, which expired on December 16, 2025[200].

Market Overview - ROC's total addressable market (TAM) is projected to be approximately $106 billion globally by 2025, with segments including Vision AI at $23.7 billion, Biometrics at $60.3 billion, Video Analytics at $12.3 billion, and Digital Evidence at $9.4 billion[41]. - The global Vision AI market is estimated to grow from $15.8 billion in 2024 to $108.9 billion by 2033, reflecting a compound annual growth rate (CAGR) of approximately 24.1%[42]. - The global biometrics market reached an estimated $50.08 billion in revenue in 2024, projected to grow to approximately $307.24 billion by 2034, expanding at a CAGR of 19.89% from 2025 to 2034[49]. - The video analytics market was valued at around $10.25 billion in 2024 and is projected to reach approximately $48.94 billion by 2032, with a CAGR of 21.8% from 2025 to 2032[55]. - The global digital evidence management market was valued at around $7.5–7.7 billion in 2023, with forecasts predicting growth to approximately $13–15 billion by 2028–2029 and around $19 billion by the early 2030s, indicating a CAGR in the 10–12% range[62]. Technology and Product Efficiency - ROC's latent fingerprint algorithm is capable of searching a database more than 500 times faster than competitors, showcasing significant algorithmic efficiency[33]. - ROC's face recognition algorithm ranked 61st out of 338 in hardware efficiency, outperforming all key competitors who did not rank within the top 150[33]. - ROC's biometric algorithms are routinely ranked by NIST as among the most accurate and computationally efficient globally, providing a competitive advantage in the market[34]. - ROC's products are designed for operational AI, focusing on accuracy, speed, and auditability, which are critical for applications in law enforcement and national security[32]. - ROC's edge analytics solutions align with the trend of integrating video analytics with cloud and edge computing architectures, projected to reach approximately $75 billion by 2030[59]. Market Trends and Growth Drivers - The U.S. Vision AI market is expected to account for about 30.6% of global revenue in 2024, driven by strong investments in AI across government and commercial sectors[43]. - The edge-enabled portion of the video analytics market is projected to grow at approximately 34% annually, significantly outpacing overall market growth[46]. - The video analytics market is driven by the proliferation of video data, with estimates suggesting tens of millions of surveillance cameras are active globally, necessitating AI analytics for effective monitoring[58]. - The adoption of multimodal biometric solutions is increasing, from 16% of organizations in 2023 to 22% in 2024, enhancing accuracy and reliability[56]. Regulatory and Compliance Factors - Regulatory factors are influencing the biometrics and video analytics markets, with increasing scrutiny on privacy and data protection driving demand for compliant solutions[53][61]. - The company faces regulatory challenges related to privacy and data protection laws, which could impact operations and compliance costs[130]. - The EU's GDPR imposes penalties of up to €20 million or 4% of annual global revenues for noncompliance, affecting operational changes[124]. - The California Consumer Privacy Act (CCPA) took effect on January 1, 2020, requiring businesses to disclose data collection and sharing practices[227]. - The California Privacy Rights Act (CPRA), effective January 1, 2023, expands the CCPA, providing California residents with greater control over sensitive personal information[227]. Financial Performance and Risks - ROC has achieved organic growth without venture capital, allowing it to remain lean and cost-effective, delivering enterprise-grade systems at a fraction of the cost of legacy vendors[77]. - ROC's revenue has primarily come from smaller contracts, leading to unpredictable and non-recurring revenue streams[83]. - As of December 31, 2025, two customers accounted for 43% of total revenue, highlighting customer concentration risks[141]. - The company anticipates that existing cash and cash equivalents will be sufficient to meet cash needs for at least the next twelve months[186]. - The company may not successfully execute its strategy to increase sales to larger customers, which involves greater risks and longer sales cycles[183]. Operational Challenges - The complexity of software implementation may lead to customer dissatisfaction if not properly managed, potentially resulting in contract terminations or non-renewals[149]. - The company faces challenges in hiring and retaining qualified personnel, particularly in competitive markets, which could hinder growth and operational efficiency[158][160]. - Rapid growth since 2015 has strained resources, and failure to manage this growth effectively could harm business operations and financial condition[156][157]. - Increased customer demand may strain service teams, making it difficult to provide timely support and potentially hindering growth[165]. Cybersecurity and Data Protection - The company faces risks related to cybersecurity threats, which could materially impact its business and financial results[201]. - Unauthorized access to information technology systems could result in significant remediation costs and reputational damage[203]. - The company maintains cybersecurity insurance, but it may not be sufficient to cover all costs or liabilities associated with data security incidents, which could harm its financial condition[204]. Research and Development - The company invests heavily in research and development, with approximately 50% of its technical workforce holding advanced degrees in relevant fields[117]. - ROC's R&D efforts focus on proprietary Vision-AI technology, achieving top-tier rankings in independent evaluations by NIST[118]. - The company plans to significantly grow its R&D team to accelerate innovation and expand its AI-driven technology portfolio[120].

UNITED STATES SECURITIES AND EXCHANGE 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 OR ☐ 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 001-41304 VALUENCE MERGER CORP. I (Exact name of registrant as specified in its charter) | Cayman Islands | N/A | | --- | --- | | ...

UNITED STATES SECURITIES AND EXCHANGE 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 OR ☐ 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 001-41304 VALUENCE MERGER CORP. I (Exact name of registrant as specified in its charter) | Cayman Islands | N/A | | --- | --- | | ...