Subscriber and Revenue Trends - Subscriber numbers increased from 925,270 on December 31, 2024, to 1,006,203 on December 31, 2025[133] - Subscription revenue decreased by 60%, or $23,376, to $15,687 for the three months ended December 31, 2025, compared to $39,063 for the same period in 2024[157] - FAST revenue decreased by 26%, or $15,964, to $46,381 for the three months ended December 31, 2025, compared to $62,345 for the same period in 2024[158] - Ad revenue decreased by 99.96%, or $50,110, to $22 for the three months ended December 31, 2025, compared to $50,132 for the same period in 2024[159] - Other revenue decreased by 100% or $5, to $0 in the three months ended December 31, 2025, compared to $5 for the same period in 2024[166] - For the three months ended December 31, 2025, total revenue was $62,090, a decrease from $151,545 in the same period of 2024, representing a decline of approximately 59%[226] - Membership revenue for the three months ended December 31, 2025, was $15,687, down from $39,063 in 2024, indicating a decrease of about 60%[226] - FAST revenue from related parties for the three months ended December 31, 2025, was $46,381, compared to $62,345 in 2024, reflecting a decline of approximately 25.6%[226] - Ad revenue for the three months ended December 31, 2025, was $22, significantly lower than $50,132 in 2024, marking a decrease of about 56.1%[226] - For the six months ended December 31, 2025, total revenue was $257,950, slightly down from $269,952 in 2024, a decrease of approximately 4.4%[226] - Ad revenue for the six months ended December 31, 2025, was $119,036, which included $125,000 recognized as Ad Agency Revenue under the Launch That Experimental Media Plan Agreement[226] Financial Position and Cash Flow - Cash balance as of December 31, 2025, was $433,363, with a working capital deficit of $3,839,068[134] - The company plans to raise additional equity financing to meet obligations for the next 12 months[134] - The company has incurred recurring losses and its ability to continue as a going concern is contingent upon obtaining additional financing[173] - Cash used in operations was $5,232,881 for the six months ended December 31, 2025, compared to $6,663,663 for the same period in 2024[170] - Cash used in operating activities decreased by $1,430,782 or 21.5% for the six months ended December 31, 2025, primarily due to a decrease in net loss[205] - Cash provided by financing activities increased by $1,456,098 or 39.7% for the six months ended December 31, 2025, mainly due to increased proceeds from convertible notes payable[207] - Cash used in investing activities decreased by $13,067 or 60% for the six months ended December 31, 2025, attributed to reduced cash used for purchasing property and equipment[206] Losses and Deficits - The company sustained a net loss of $2,783,982 for the three months ended December 31, 2025, compared to a net loss of $3,929,518 for the same period in 2024[173] - The total accumulated deficit reached $200,881,532 as of December 31, 2025[170] Equity and Financing Activities - The company entered into an Equity Purchase Agreement with a commitment to purchase up to $50 million in shares of Class A common stock[177] - The company may seek additional capital through various means, including private or public equity offerings and debt financings[175] - The company plans to file a registration statement for the resale of shares under the Equity Purchase Agreement within 30 days following the trading day after the Direct Listing date[185] - The total outstanding principal and accrued interest of $118,714 from a loan with Public Wire was converted into 29,679 shares of Class B common stock at a conversion price of $4.00 per share[189] - The company recognized a debt extinguishment loss of $118,714 upon the conversion of the loan with Public Wire[189] - The company received an additional $1,110,000 from Nextelligence between the agreement date and December 31, 2025[188] - As of December 31, 2025, the total outstanding principal on the revolving convertible note payable is $2,425,552, with accrued interest of $21,144, totaling $2,446,696[188] Operational Changes and Strategic Initiatives - The transition to a free registration subscription service has impacted subscription revenue, which is now supported by advertising revenue[157] - The company is strategically reinvesting in its proprietary Platform-as-a-Service (PaaS) infrastructure to enhance long-term enterprise value[160] - The recent decline in advertising revenue is attributed to the migration to the new in-house Zer0Gap Ads platform, which is expected to stabilize and improve revenue performance[162] - Major streaming platforms are expanding their first-party advertising ecosystems, impacting the competitive landscape for advertising revenue[164] - The company discontinued its SelectTV paid subscription service in October 2022 and rebranded to FreeCast.com, launching SmartGuide as a free registration subscription service[212] - Beginning in 2024, the company started recognizing contracts with customers from product sales requiring performance up to delivery, impacting revenue recognition practices[224] Legal and Accounting Considerations - The company assesses loss contingencies related to legal proceedings and unasserted claims, which may result in material losses[237] - If a material loss is probable and can be estimated, the estimated liability will be accrued in the financial statements[238] - Remote loss contingencies are generally not disclosed unless they involve guarantees[239] - Modifications to equity-classified instruments are accounted for based on the fair value difference before and after the modification[240] - Preferred stock subject to mandatory redemption is classified as a liability and measured at fair value, while conditionally redeemable preferred stock is classified as mezzanine equity[241] - The Series A Preferred Stock was reclassified from mezzanine equity to permanent equity after amending its terms on December 26, 2024[242] - The company does not anticipate that recently issued accounting standards will materially impact its financial position or results of operations upon adoption[243] - As a smaller reporting company, the company is not required to provide detailed market risk disclosures[244]

Drug Development and Trials - The FDA cleared the Investigational New Drug application for PAS-004 in December 2023, allowing the initiation of a Phase 1 trial for patients with MAPK pathway-driven advanced tumors[20]. - The Phase 1 Advanced Cancer Study is being conducted at four clinical sites in the U.S. and three in Eastern Europe, with an expected completion date in 2028[20]. - The Phase 1/1b Adult NF1 Trial for symptomatic and inoperable NF1-PNs was initiated in May 2025, with the first patient dosed in July 2025[26][33]. - The company plans to conduct a Phase 1 trial for pediatric NF1-PN patients and may pursue a second IND focused on NF1-CNs[29]. - The strategic focus includes expanding clinical trials for PAS-004 and seeking marketing approval for NF1-PN, with ongoing discussions with the FDA[33]. - The company plans to complete key regulatory-required studies for PAS-004, including non-clinical ADME studies and clinical human ADME studies, prior to initiating registration trials in 2026 and 2027[39]. - The Phase 1 Advanced Cancer Study has enrolled 34 patients, with no dose-limiting toxicities (DLTs) reported to date, indicating a favorable safety and tolerability profile[71]. - The Phase 1/1b Adult NF1 Trial is ongoing, with the first patient dosed in July 2025, aiming to evaluate safety, tolerability, and preliminary efficacy of PAS-004[75]. Pharmacokinetics and Efficacy - PAS-004 has demonstrated a long half-life of approximately 60 hours and a low Cmax to Cmin ratio below 2, indicating favorable pharmacokinetic properties compared to existing MEK inhibitors[25]. - PAS-004 has shown a half-life of 11.5 hours in rats and 52 hours in dogs, indicating favorable pharmacokinetic properties[53]. - In preclinical studies, PAS-004 demonstrated 60-80% growth inhibition in NF1 mutant cell lines, outperforming selumetinib in growth inhibition[55]. - In vivo studies showed PAS-004 reduced tumor volume in a xenograft model, with results comparable to selumetinib at a higher dose[58]. - PAS-004 has exhibited dose-dependent anti-tumor efficacy in various cancer models, showing superior efficacy compared to selumetinib at equivalent doses[62]. - PAS-004 treatment resulted in significant decreases in phosphorylated ERK 1/2 in the heart and liver, with the 6 mg/kg/day group showing a significant decrease in quadricep muscles compared to placebo[64]. - Both doses of PAS-004 led to significant increases in left ventricular fractional shortening, indicating improved left ventricular function compared to placebo[64]. - PAS-004 demonstrated a dose-dependent significant decrease in cardiac fibrosis, as assessed by histologic scoring, compared to placebo[64]. - Median survival for mice treated with PAS-004 (225 days) was statistically significantly longer than that for placebo (202 days) based on Kaplan-Meier plots[64]. - No statistically significant differences in liver, kidney, or pancreatic function indicators were observed between PAS-004 treatment groups and placebo, indicating a favorable safety profile[65]. - PAS-004 showed superior inhibition of ETS2-driven inflammatory responses compared to selumetinib in pre-clinical models, with greater downregulation of ETS2 target genes[67]. - Interim pharmacokinetic results indicated a half-life of approximately 60 hours for PAS-004, with dose proportionality and linear pharmacokinetics observed[73]. Market and Regulatory Considerations - The initial indications for FDA marketing approval of PAS-004 include treatment for symptomatic, inoperable NF1-PNs in both adult and pediatric patients[29]. - The only FDA-approved therapy for inoperable NF1-PNs is MEK inhibitors, with limitations such as known toxicities and high rates of drug discontinuation[49][50]. - The company is expanding formulation development for PAS-004, currently administered orally in capsule and tablet forms, and is evaluating additional formulations, including a liquid formulation for pediatric patients[39]. - The FDA review process for NDAs or BLAs aims for a ten-month review period, or six months for serious indications, following acceptance for filing[134]. - The FDA's Priority Review designation aims to reduce the review time for marketing applications from ten months to six months, enhancing the speed of bringing new drugs to market[141]. - A product may qualify for Accelerated Approval if it shows effects on a surrogate endpoint likely to predict clinical benefit, which may require post-approval confirmatory studies[142]. - The FDA may grant orphan designation to drugs intended for rare diseases, providing a seven-year exclusivity period for the first approved applicant[145][146]. - The Rare Pediatric Disease Priority Review Voucher Program allows sponsors of approved products for rare pediatric diseases to receive a voucher for priority review of a subsequent application[147]. - The company must comply with extensive post-approval requirements, including quality control and reporting of adverse effects, to maintain compliance with FDA regulations[154]. Financial and Operational Risks - The company has incurred a history of operating losses and expects to continue incurring substantial costs for the foreseeable future, indicating it is not currently profitable and may never achieve profitability[197]. - The company will need to raise additional capital to complete the development and commercialization efforts for its product candidates, including PAS-004[197]. - The company is dependent primarily on the successful development and commercialization of PAS-004, which is not yet approved, and its business could be adversely affected if key product candidates do not perform as expected[197]. - The company expects to incur significant additional operating losses for the next several years as it advances product candidates through clinical trials and seeks regulatory approval[203]. - Future net losses and negative cash flows are anticipated to adversely affect stockholders' equity and working capital, with profitability dependent on the ability to generate revenue from product candidates[204]. - The company will require additional capital to fund operations and may need to raise funds sooner to accelerate product development[208]. - Raising additional capital may cause dilution to stockholders and could restrict operations or require relinquishing rights to technologies[210]. - The company faces substantial risks and uncertainties related to the development, clinical testing, and commercialization of product candidates[204]. - Future funding requirements will depend on various factors, including the costs associated with clinical trials and regulatory approvals[209]. Competitive Landscape and Intellectual Property - The biotechnology industry faces intense competition, with larger companies having greater financial resources and expertise[99]. - Key competitive factors for product candidates include efficacy, safety, side effects, convenience, and pricing[100]. - The company actively seeks broad intellectual property protection for its product candidates and proprietary technologies[106]. - The patent portfolio includes issued and pending applications worldwide for each of the company's programs[108]. - PAS-004 has issued patents in multiple countries, expected to expire in October 2030, with pending applications that may extend to 2045[110]. - The company may not be able to secure adequate intellectual property protection for its product candidates, impacting its competitive position in the market[200]. Employment and Compliance - As of December 31, 2025, the company had five full-time employees, with no union representation[118]. - The company provides competitive compensation and benefits to attract and retain qualified personnel, including equity-based grants for key employees[120]. - The company believes that compliance with extensive government regulations is crucial for the successful development and marketing of its pharmaceutical products[125]. - The company has not assessed the capabilities of third-party manufacturers beyond the supply of clinical materials to date[115]. - The company expects to rely on third parties for the production of clinical and commercial quantities of future product candidates, which may lead to compliance issues during FDA inspections[137]. - Non-compliance with U.S. regulations may result in severe penalties, including withdrawal of approvals and product recalls[167].

Business Segments - Designer Brands Inc. operates in two segments: Retail and Brand Portfolio, with the Retail segment including DSW, The Shoe Co., and Rubino banners[14]. - The acquisition of Rubino Shoes Inc. on April 8, 2024, expanded the Retail segment into Quebec, Canada[16]. - The Retail segment had 347 third-party merchandise suppliers at the end of fiscal year 2025, down from 392 in 2024[21]. - The Brand Portfolio segment's five largest customers represented 38% of its net sales in 2025, indicating a significant reliance on these customers[26]. Sales and Revenue - The Retail segment's net sales from VIP members accounted for 89% in 2025, up from 86% in 2024, with 30 million VIP members at the end of 2025[23]. - For 2025, net sales decreased to $2.9 billion from $3.0 billion last year, representing a decline of 3.9%[143]. - Consolidated net sales for 2025 were $2,892,671, a decrease of $116,591 or 3.9% compared to 2024's $3,009,262[145]. - Retail segment net sales decreased by $92,315 to $2,656,809, representing 88.0% of total segment net sales, while Brand Portfolio segment net sales fell by $36,020 to $362,861, accounting for 12.0%[146]. Profitability and Expenses - Gross profit as a percentage of net sales for 2025 was 43.6%, an increase of 90 basis points compared to 42.7% in 2024[143]. - Operating profit for 2025 was $47,764, an increase of $12,831 or 36.7% from $34,933 in 2024, driven by lower corporate operating expenses and impairments[152]. - The effective tax rate for 2025 was 311.5%, significantly higher than 7.0% in 2024, primarily due to non-deductible compensation and higher state income taxes[154]. - Operating expenses decreased by $26,601 to $1,219,233, with the Retail segment's operating expenses increasing due to higher distribution costs, while the Brand Portfolio segment saw a decrease in marketing expenses[150]. Cash Flow and Financing - Net cash provided by operating activities increased to $109,860,000 in 2025 from $82,236,000 in 2024, a change of $27,624,000[157]. - Cash used in investing activities decreased to $(33,521,000) in 2025 from $(62,673,000) in 2024, reflecting a reduction in capital expenditures of $19,300,000[159]. - Net cash used in financing activities increased to $(72,532,000) in 2025 from $(22,094,000) in 2024, primarily due to net payments on debt of $57,800,000[160]. - The ABL Revolver provides a revolving line of credit of up to $600,000,000, with $289,100,000 in outstanding borrowings as of January 31, 2026[161]. Employee and Community Engagement - The company employed approximately 13,000 associates worldwide as of January 31, 2026, with about 11,000 in the U.S.[34]. - Over 9,100 associates completed more than 98,000 learning experiences through the online learning platform in 2025, highlighting the company's commitment to talent development[41]. - The Designer Brands Foundation has provided over $3 million in grants to charitable organizations since its launch in late 2023, expanding into Canada in 2025[42]. - The company has established the DBI Cares Associate Relief Fund in 2024 to provide financial assistance to associates facing unexpected hardships globally[44]. Market and Economic Conditions - The company is closely monitoring macroeconomic conditions, which have negatively impacted operating results and liquidity during 2025[59]. - Changes in U.S. tariff policies could materially affect the company's business, results of operations, and liquidity[61]. - The company is adjusting its sourcing diversification to mitigate risks associated with tariffs and supply chain disruptions[62]. - The footwear market is highly competitive, and the company's success depends on its ability to remain competitive in terms of assortment, fashion trends, and value[63]. Risks and Compliance - The company faces risks related to customer payment processing, including potential disruptions from third-party vendors, which could materially affect operations[72]. - Cybersecurity threats are prevalent, with the company and its vendors regularly experiencing cyberattacks that could disrupt services and harm reputation[79]. - The regulatory environment for data security is increasingly rigorous, which may lead to higher compliance costs and potential liabilities[80]. - The company is subject to stringent and changing privacy laws, which may impose additional obligations and increase compliance costs[100]. Corporate Governance - The Schottenstein Affiliates control approximately 30% of the company's outstanding common shares, representing 66% of the combined voting power, which may influence corporate decisions[106]. - The company has implemented a comprehensive information security program to manage cybersecurity risks, overseen by the Board and the Technology Committee[111]. - The Director of Information Security, with over 20 years of experience, leads the company's cybersecurity strategy and reports to executive management[116]. Acquisitions and Growth - The company completed the acquisition of Rubino Shoes Inc. on April 8, 2024, expanding its retail segment into Quebec, Canada[204]. - The company acquired Rubino in 2024, but the expected contributions from this and other acquisitions may not materialize, potentially disrupting ongoing business operations[88]. Inventory and Assets - The company’s inventories decreased to $563,547 thousand as of January 31, 2026, from $599,751 thousand, a decline of approximately 6.0%[197]. - Total assets decreased to $1,947,633 thousand as of January 31, 2026, down from $2,009,224 thousand on February 1, 2025, representing a decline of approximately 3.1%[197].

Acquisitions and Investments - The Company acquired certain tangible assets and a portfolio of intellectual property from Oceaneering Entertainment Systems for $1.6 million, expanding its attractions services business [379]. - The Company has been engaged in expanding operations through equity method investments and acquiring businesses, despite incurring losses from operations [383]. - The Company has a 50% interest in the PDP joint venture, which operates one hotel resort and theme park in Mallorca, Spain [380]. - The Company recognized a $1.1 million gain on bargain purchase from the OES Acquisition for the year ended December 31, 2025 [432]. - The company recognized an other-than-temporary impairment charge of $5.3 million for its investment in PDP for the year ended December 31, 2025 [476]. - The fair value of the company's investment in Karnival was determined to be $4.2 million, with an impairment charge of $3.0 million recognized for the year ended December 31, 2025 [478]. Financial Performance - Revenue for the year ended December 31, 2025, was $14.896 billion, an increase of $8.151 billion compared to $6.745 billion in 2024 [417]. - The Company’s net income for the year ended December 31, 2025, was $6.312 million, a decrease of $143.169 million compared to $149.481 million in 2024 [417]. - Total segment loss from operations was $1.121 million for 2025, compared to a loss of $134, indicating a deterioration of $987 million [434]. - Falcon's Attractions segment reported a loss of $3.260 million in 2025, reflecting a significant operational challenge [440]. - The Company recognized a gain of $172.3 million related to the change in fair value of earnout liabilities for the year ended December 31, 2024 [413]. - The share of gain from equity method investments increased by $20.08 million for the year ended December 31, 2025, driven by a gain from the sale of a subsidiary [424]. Expenses and Costs - Selling, general and administrative expenses increased by $3.088 million for the year ended December 31, 2025, primarily due to payroll and marketing expenses [420]. - Interest expense increased by $1.486 million for the year ended December 31, 2025, primarily due to rising interest rates on debt [427]. - Project design and build expenses increased by $2.373 million for the year ended December 31, 2025, due to new attractions service contracts [418]. - The Company incurred $8.3 million in impairment losses for equity method investments during the year ended December 31, 2025 [406]. Cash Flow and Financing - Cash used in operating activities for the year ended December 31, 2025, was $24.6 million, an increase of $12.1 million compared to 2024 [459]. - Cash provided by investing activities increased to $24.2 million for the year ended December 31, 2025, primarily due to a $27.0 million dividend distribution from PDP [462]. - Cash provided by financing activities decreased to $3.7 million for the year ended December 31, 2025, compared to $12.9 million in 2024, with net repayments of $6.9 million of debt [463]. - The company issued $32.5 million of preferred stock, raising $11.8 million in cash and exchanging $20.5 million of outstanding debt to fund its attractions division expansion [384]. - The company issued $32.5 million of Series B Preferred Stock during 2025, raising $11.8 million in cash and exchanging $20.7 million of outstanding debt [447]. Working Capital and Debt - As of December 31, 2025, the Company reported a working capital deficiency of $18.1 million, including $0.6 million of matured debt [385]. - Total indebtedness as of December 31, 2025, was approximately $15.6 million, with $1.9 million in cash and $15.5 million available for borrowing [448]. - As of December 31, 2025, the company has $16.4 million in accrued expenses and current liabilities, including $14.4 million in transaction-related fees [450]. - The company has a total outstanding balance of $5.0 million with Infinite Acquisitions as of December 31, 2025 [456]. Future Outlook and Compliance - The Company expects research and development expenses to increase as it continues to invest in new product offerings across various sectors [401]. - The company expects its capital expenditures and working capital requirements to increase materially in the near future due to various operational factors [451]. - The Company is classified as an "emerging growth company" under the JOBS Act, allowing it to delay compliance with new accounting standards until they apply to private companies [482]. - The Company has elected to use the extended transition period for accounting standards under the JOBS Act, which may complicate financial statement comparisons with other public companies [483]. - The Company will maintain its status as an emerging growth company until it meets specific revenue or market value thresholds, including total annual revenue of at least $1.235 billion or a market value exceeding $700 million [484]. - The Company is also classified as a "smaller reporting company," which allows it to provide reduced disclosure obligations, including only two years of audited financial statements [485]. - The Company will retain its smaller reporting company status until it exceeds a market value of $250 million or annual revenue of $100 million, along with a market value exceeding $700 million [485]. - As a smaller reporting company, the Company is not required to provide certain market risk disclosures [486].

Financial Position - As of December 31, 2025, the company has an accumulated deficit of $124.6 million and has raised $36.7 million in additional capital since December 31, 2024, including a $25.8 million preferred stock private placement[46]. - The company has a history of operating losses and negative cash flows since inception, funded through a series of private placements[46]. - The IMSR Plant development has received approximately $30 million in non-dilutive funding support from the U.S., Canada, and the U.K. for licensing, engineering, and fuel supply activities[164]. - The U.S. Department of Energy's Loan Programs Office has accepted a loan guarantee application for up to $890 million to support project financing of an IMSR Plant in the U.S.[165]. IMSR Plant Design and Technology - The IMSR Plant is designed to achieve a Levelized Cost of Electricity (LCOE) of approximately $69/MWh and a Levelized Cost of Heat (LCOH) of approximately $8.60/MMBtu, positioning it competitively in the market[60]. - The IMSR Plant is expected to supply industrial-grade heat at 585 °C, suitable for over two-thirds of industrial thermal applications, addressing a major decarbonization challenge[57]. - The IMSR Plant's net electrical output is designed at 390 MW, capable of meeting utility-scale needs for dispatchable zero-carbon electric energy supply[59]. - The IMSR Plant is positioned to provide reliable, high-temperature thermal energy without greenhouse gas emissions, allowing it to replace fossil combustion systems in industrial facilities[57]. - The IMSR Plant design has progressed to a Preliminary Safety Analysis Report (PSAR) standard, which is a recognized development status in the nuclear industry[104]. - The IMSR Plant's design incorporates high inherent safety features due to the use of MSR technology, which mitigates risks associated with the nuclear fission process[124]. - The IMSR's primary cooling system operates at near atmospheric pressure, potentially reducing manufacturing and construction complexity and costs[139]. - The IMSR Core-unit integrates primary reactor components into a sealed, replaceable vessel, addressing maintenance challenges associated with limited component lifetimes[153]. Revenue Model and Projections - The company’s revenue model includes four principal revenue streams, leveraging its proprietary nuclear plant design and technology throughout the 56-year operating lifecycle of an IMSR Plant[73]. - Total projected revenue from the IMSR Plant lifecycle is estimated at $2.098 billion, with a cumulative gross margin of 22%[74]. - Pre-construction services are expected to generate $75 million, representing 4% of total revenues, with a gross margin of 31%[76]. - Construction services and component supply are anticipated to contribute $486 million, accounting for 23% of total revenues, with a gross margin of 27%[77]. - Post-construction IMSR Core-unit supply is projected to generate $1.148 billion, making up 55% of total revenues, with a gross margin of 20%[78]. - IMSR Fuel Salt supply is expected to yield $389 million, representing 18% of total revenues, also with a gross margin of 20%[79]. - The IMSR Plant has a projected operational life of 56 years, with core-unit replacements occurring every seven years, ensuring recurring revenue streams[80]. Regulatory and Compliance - The company has been selected for the DOE's Advanced Reactor Pilot Program, which aims to fast-track commercial licensing activities for small and modular nuclear plants[49]. - The CNSC completed its Vendor Design Review (VDR) of the IMSR Plant design in April 2023, confirming that it meets expectations in 19 focus areas for licensing, with no fundamental barriers identified[113]. - The regulatory strategy aims to establish the IMSR Plant as licensable and deployable in key global markets, starting with the United States and Canada, to reduce commercial and development risks[105]. - The company is engaging with the IAEA to ensure compliance with international safeguards for non-proliferation and security of nuclear materials, supporting its goal of establishing the IMSR Plant in export markets[122]. Research and Development - The R&D and testing program has been ongoing since 2020, focusing on qualifying materials such as the graphite moderator and IMSR Fuel Salt, with many tests already completed[101]. - The company has developed a comprehensive code validation and verification strategy, supported by U.S. DOE-funded projects, to validate key models for IMSR fission power control and heat transport[102]. - The first phase of graphite irradiation tests has yielded substantial data demonstrating the performance of preferred graphite grades at high temperatures under irradiation[133]. Market and Competitive Landscape - The company anticipates that more than 80% of U.S. coal plant sites are suitable for conversion to advanced nuclear, representing a potential market of 198.5 GWe installed base, much of which is slated for retirement by 2035[67]. - Approximately 83% of global primary energy demand is forecasted to be met by coal, natural gas, petroleum, and large-scale nuclear in 2025, highlighting the competitive landscape[168]. - The IMSR technology utilizes readily obtained SALEU fuel instead of HALEU, enhancing its commercial viability[136]. - The IMSR Plant's distinct operating characteristics are expected to improve affordability and cost-competitiveness compared to legacy and other Gen IV nuclear technologies[151]. Company Operations and Workforce - The company employs 74 full-time employees as of December 31, 2025, with a focus on talent development and performance tracking[184]. - The company has established a consortium of over 50 collaborative industry relationships to support the growth of its project pipeline[161]. - The company was originally a special purpose acquisition company and changed its name to "Terrestrial Energy Inc." on October 23, 2025[185]. - The company anticipates that its U.S. operation will provide a substantial part of the remaining engineering work for IMSR design deployment[182].

Financial Overview - As of December 31, 2025, the company has an accumulated deficit of $124.6 million and has raised $36.7 million in additional capital since December 31, 2024, including a $25.8 million preferred stock private placement[46]. - Total cumulative revenue from IMSR Plant lifecycle is estimated at $2.098 billion, with a gross margin of 22%[74]. - Pre-construction services are expected to generate $75 million, representing 4% of total revenue, with a gross margin of 31%[76]. - Construction services and component supply are projected to contribute $486 million, accounting for 23% of total revenue, with a gross margin of 27%[77]. - Post-construction IMSR Core-unit supply is anticipated to generate $1.148 billion, making up 55% of total revenue, with a gross margin of 20%[78]. - IMSR Fuel Salt supply is expected to yield $389 million, representing 18% of total revenue, with a gross margin of 20%[79]. IMSR Plant Design and Capabilities - The IMSR Plant is designed to achieve a Levelized Cost of Electricity (LCOE) of approximately $69/MWh and a Levelized Cost of Heat (LCOH) of approximately $8.60/MMBtu, positioning it competitively in the energy market[60]. - The IMSR Plant is capable of providing industrial-grade heat at 585 °C, suitable for over two-thirds of industrial thermal applications, addressing a significant decarbonization challenge[57]. - The IMSR Plant's net electrical output is designed at 390 MW, providing dispatchable zero-carbon electric energy supply, which is crucial for grid reliability[59]. - The IMSR Plant's operational design allows for long-term revenue visibility and durable cash flows, supported by ongoing operations and maintenance contracts[80]. - The IMSR Plant utilizes SALEU as nuclear fuel, which aligns with existing fuel supply frameworks and may reduce development risks associated with HALEU[91]. - The IMSR Plant design has progressed to a Preliminary Safety Analysis Report (PSAR) standard, which is a recognized development status in the nuclear industry[104]. - The IMSR's primary cooling system operates at near atmospheric pressure, potentially reducing manufacturing and construction complexity and costs[139]. - The IMSR Core-unit is designed for a "plug-and-play" replacement process every seven years, streamlining maintenance and enhancing operational efficiency[146]. Market Potential and Strategy - The company anticipates that more than 80% of U.S. coal plant sites are suitable for conversion to advanced nuclear, representing a potential market of 198.5 GWe installed base, much of which is slated for retirement by 2035[67]. - The company is focused on three key market verticals for deployment: data center electricity supply, industrial thermal and electric energy supply, and repowering coal plants[63]. - The IMSR Plant has a pipeline of over ten early-stage projects across various industrial sectors, including mining and chemical production[160]. - The company has established a consortium of over 50 collaborative industry relationships to support the growth of its project pipeline[161]. Regulatory and Development Milestones - The company has been selected for the DOE's Advanced Reactor Pilot Program, which aims to fast-track commercial licensing activities for small and modular nuclear plants[49]. - The CNSC completed its Vendor Design Review (VDR) of the IMSR Plant design in April 2023, confirming that it meets expectations in 19 focus areas for licensing, with no fundamental barriers identified[113]. - The company anticipates a five-year pre-construction period followed by a five-year construction period for the FCP IMSR Plant project, leading to the issuance of a Construction Permit and an Operating License by the USNRC[117]. - The regulatory strategy aims to establish the IMSR Plant as licensable and deployable in key global markets, starting with the United States and Canada, to reduce commercial and development risks[105]. - The insights gained from the VDR process will be incorporated into future licensing applications, enhancing the completeness and defensibility of submissions[115]. Research and Development - The R&D and testing program has been ongoing since 2020, focusing on qualifying materials such as the graphite moderator and IMSR Fuel Salt, with many tests already completed[101]. - The company has developed a comprehensive code validation and verification strategy, supported by U.S. DOE-funded projects, to validate key models for IMSR fission power control and heat transport[102]. - The company collaborates with multiple national laboratories and universities to support R&D and testing activities critical to IMSR technological advancement[132]. Company Structure and Employment - The company employs 74 full-time employees as of December 31, 2025, with a focus on recruitment and talent development[184]. - The company was originally a special purpose acquisition company incorporated on April 4, 2024, and domesticated into a Delaware corporation on October 23, 2025[185]. - The company expects to retain its emerging growth company status until its annual revenues exceed $1.2 billion or other specified conditions are met[432].

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 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 No. 001-39642 CXApp Inc. (Exact name of registrant as specified in its charter) | Delaware | 85-2104918 | | --- | --- | | (State or other jurisd ...

Product and Technology - CXApp's flagship product, the CXAI Platform, integrates AI, automation, and real-time analytics to enhance workplace engagement and operational efficiency [25] - The company has filed 37 patents, with 17 granted, focusing on technologies such as indoor navigation and real-time analytics [37] - The company is integrating artificial intelligence into its product offerings, which may incur substantial costs and present legal and regulatory challenges [139] - CXApp's AI-driven platform integrates real-time analytics, behavioral insights, and predictive modeling to support agile decision-making for distributed workforces [216] - CXAI's platform operates within existing enterprise technology environments and is deployed across physical, hybrid, and digital workplace settings [220] Financial Performance - CXApp reported recurring net losses of approximately $13,473 thousand and $19,408 thousand for the fiscal years ended 2025 and 2024, respectively [73] - Gross profit totaled $4,005 thousand for the year ended December 31, 2025, compared to $5,857 thousand in the same period of 2024, with gross margin improving to 87% [208] - Total operating expenses increased to $21,582 thousand for the year ended December 31, 2025, compared to $19,598 thousand for the year ended December 31, 2024, primarily due to a $2,148 thousand goodwill impairment charge [215] - In fiscal year 2025, recurring revenue increased to 98% from 87%, driven by the transition to a SaaS-based model focused on AI-enabled services [209] Business Model and Strategy - CXApp's revenue model is based on recurring SaaS licensing fees and one-time implementation costs, typically involving multi-year contracts [43] - The company completed its Initial Public Offering on December 17, 2020, raising gross proceeds of $276 million from the sale of 27,600,000 units at $10.00 per unit [57] - CXApp's growth strategy includes potential future acquisitions, which may disrupt operations and lead to dilution of stockholder equity [79] - Future revenue growth is dependent on increasing sales to existing customers and acquiring new customers, which may be challenging [81] - The company aims to enhance operational efficiency and profitability through ongoing cost optimization and customer retention strategies [216] Market and Competition - The market for CXApp's products is highly competitive, facing challenges from both established vendors and emerging niche providers [39] - The company operates in a highly competitive market, facing significant price competition which may require price reductions for products and services [146] - Organizations are increasingly adapting to distributed and hybrid work models, leading to higher demand for software that enhances employee engagement and operational efficiency [221] - The global employee experience and workplace technology market is expected to grow at a compound annual growth rate (CAGR) exceeding 20% [216] Risks and Challenges - The company may face significant risks related to cybersecurity threats, which could compromise customer data and impact operations [70] - The company faces risks from defects or vulnerabilities in products, which could harm reputation and operational results [85] - The company may need additional cash financing to support growth and operations, indicating potential limitations if financing is not secured [83] - The uncertain regulatory environment regarding data privacy may inhibit sales and limit the adoption of the company's cloud-based solutions [169] - The company is exposed to numerous legal and regulatory requirements, which can be costly and time-consuming to comply with, particularly in growth areas like health information technology and energy [154] Human Resources and Management - CXApp's workforce consists of approximately 35 full-time employees, with a focus on software engineering, product development, and customer success [53] - The company offers competitive compensation packages and flexible work arrangements to attract and retain top talent [54] - Attracting and retaining skilled personnel is crucial for business success; failure to do so may hinder project completion and increase costs [91] - The company must enhance management and operational controls to manage growth effectively, or risk operational inefficiencies [89] Compliance and Governance - The company is required to comply with SEC and Nasdaq regulations, which increases operational costs and management distraction [117] - The company identified material weaknesses in internal control over financial reporting as disclosed in the Annual Report for the fiscal year ended December 31, 2024 [130] - Management implemented enhanced controls and processes to address these weaknesses, concluding that they have been fully remediated as of December 31, 2025 [131] Customer Base - CXApp's customer base includes Fortune 1000 enterprises across various industries, with deployments globally [46] - The top three customers accounted for approximately 40% of gross revenue in 2025, with one customer alone contributing 16% [142] - The company focuses on high-value enterprise accounts, particularly in financial services, healthcare, and technology sectors [208] International Operations and Economic Factors - The company operates four subsidiaries, including CXApp US, CXApp Canada, and CXApp Philippines, indicating a broad operational footprint [61] - Ongoing international conflicts, such as the Russia-Ukraine war and tensions in the Middle East, may adversely affect the company's operations and financial condition due to geopolitical instability and economic sanctions [156] - Changes in U.S. administrative policy, including trade agreements and tariffs, have created heightened uncertainty, particularly regarding imports from China, which could adversely affect the company's supply chain and financial performance [164]

Financial Performance - The company reported net losses of $75.8 million and $71.3 million for the years ended December 31, 2025 and 2024, respectively, with accumulated deficit reaching $316.7 million[462]. - Net loss increased by $4.5 million, from $71.3 million in 2024 to $75.8 million in 2025, a 6% increase[475]. - Interest income decreased by $3.3 million, from $5.1 million in 2024 to $1.7 million in 2025, a 66% decline[475]. - Total operating expenses rose by $7.6 million, from $76.2 million in 2024 to $83.9 million in 2025, a 10% increase[475]. - Net cash used in operating activities was $77.2 million for the year ended December 31, 2025, compared to $62.6 million in 2024[501]. - The accumulated deficit as of December 31, 2025, was $316.7 million, raising concerns about the company's ability to continue as a going concern[492]. - The company has significant future funding requirements to support ongoing operations and R&D initiatives[491]. Cash and Financing - Cash and cash equivalents stood at $28.7 million as of December 31, 2025, which is insufficient to fund ongoing operations for at least twelve months from the date of the report[463]. - Cash provided by financing activities was $34.2 million in 2025, primarily from stock issuance[505]. - The company raised approximately $27.5 million from an underwritten public offering, issuing 11,670,707 shares of common stock[489]. - The company filed a universal shelf registration statement allowing the sale of up to $263.5 million in various securities[487]. - As of December 31, 2025, the company had cash and cash equivalents of $28.7 million, with no outstanding debt[521]. - The company intends to maintain its portfolio of cash equivalents in institutional market funds composed of U.S. Treasury securities[521]. Research and Development - The Phase 1b/2a BEACON study in Chronic Spontaneous Urticaria (CSU) showed that 100% of participants at the 240mg dose level achieved complete responses through 8 weeks[449]. - In the updated data from the BEACON study, 89% of participants in the 240mg and 360mg single-dose cohorts achieved a complete response[451]. - The Phase 1b/2a SPOTLIGHT study in Chronic Inducible Urticaria (CIndU) reported that 93% of participants in the 40mg and 120mg cohorts achieved a clinical response[452]. - The ETESIAN study in asthma demonstrated a reduction in allergen-induced Late Asthmatic Response (LAR) with improvements of 10.4% at 6 weeks and 8.7% at 12 weeks compared to baseline[454]. - The company plans to focus exclusively on mast cell driven diseases, discontinuing other development programs including those related to severe combined immunodeficiency (SCID)[456]. - The company aims to become a fully integrated discovery, development, and commercial entity in the field of mast cell therapeutics, with plans to broaden its pipeline[457]. Expenses and Costs - Research and development expenses increased by $7.3 million, from $55.8 million in 2024 to $63.1 million in 2025, representing a 13% increase[476]. - Program costs rose by $7.3 million, from $34.3 million in 2024 to $41.6 million in 2025, a 21% increase, driven by higher costs in clinical programs[479]. - Clinical program expenses increased by $3.5 million for CRO expenses, from $13.9 million in 2024 to $17.4 million in 2025[481]. - General and administrative expenses increased by $0.4 million, from $20.4 million in 2024 to $20.8 million in 2025, a 2% increase[482]. - Personnel-related costs in research and development increased by $0.2 million, from $14.9 million in 2024 to $15.1 million in 2025[477]. - General and overhead costs in research and development decreased by $0.3 million, from $6.6 million in 2024 to $6.3 million in 2025[478]. - Stock-based compensation expense was $6.7 million and $6.6 million for the years ended December 31, 2025 and 2024, respectively[517]. Other Financial Information - The company has not declared or paid any dividends to date[516]. - The company is classified as a "smaller reporting company," allowing for reduced disclosure obligations[520]. - The company has not experienced material foreign currency transaction gains or losses to date[522]. - Inflation has not had a material effect on the company's consolidated financial statements[523]. - The company has not had a formal hedging program with respect to foreign currency[522]. - The change in fair value of warrant liability increased by $8.5 million, from $0 in 2024 to $8.5 million in 2025[475]. - Total other income increased by $3.1 million, from $5.0 million in 2024 to $8.1 million in 2025[483]. - Interest income decreased by $3.4 million, from $5.1 million in 2024 to $1.7 million in 2025, due to lower cash balances[483]. - The company expects to recognize $9.1 million of total unrecognized compensation expense over a remaining weighted-average period of 2.50 years[517].

Financial Performance - Revenue for the year ended December 31, 2025, was $2,056,000, a substantial increase from $456,000 in 2024[18] - The net loss for the year ended December 31, 2025, was $475,350,000, with a basic and diluted loss per share of $5.39[18] - The company reported a net loss of $475.35 million for the year ended December 31, 2025, compared to a net loss of $70.09 million for the period through December 31, 2024[20] - Stock-based compensation increased to $27.87 million for the year ended December 31, 2025, up from $16.34 million for the previous period[20] - The company reported an adjusted EBITDA of $(78.76) million for the year ended December 31, 2025, compared to $(17.15) million for the previous period[24] Cash Flow and Liquidity - Cash, cash equivalents, and restricted cash increased to $60,449,000 as of December 31, 2025, up from $11,119,000 in 2024[17] - The company had a net cash increase of $54.33 million for the year ended December 31, 2025, compared to an increase of $11.07 million for the previous period[22] - Net cash used in operating activities was $80.68 million for the year ended December 31, 2025, compared to $29.21 million for the period through December 31, 2024[20] - Cash flows provided by financing activities totaled $139.14 million for the year ended December 31, 2025, compared to $33.47 million for the period through December 31, 2024[22] - The company reported a net cash used in investing activities of $4.13 million for the year ended December 31, 2025, compared to a net cash provided of $6.82 million for the previous period[22] Expenses and Impairments - Total operating expenses for 2025 were $466,755,000, compared to $40,753,000 in 2024, primarily due to a goodwill impairment of $346,557,000[18] - The company recognized a goodwill impairment of $346.56 million due to a decline in its publicly quoted share price and market capitalization[28] - Consolidated general and administrative expenses declined by 61% in Q4 2025 compared to Q4 2024, reflecting effective cost management[1] - The company incurred a loss on extinguishment of debt amounting to $16.06 million for the year ended December 31, 2025[29] Strategic Goals and Initiatives - Innventure reported over $50 million in bookings in early 2026, indicating a significant commercial inflection point[1] - The company aims to achieve cash-flow positivity in 2026, with Accelsius scaling operations and AeroFlexx entering anchor-customer adoption[2] - Innventure's approach focuses on building billion-dollar valuations through the commercialization of breakthrough technology solutions[5] - The company is actively reducing reliance on its balance sheet by advancing independent capital formation among its operating companies[1] Asset Management - Total assets decreased to $599,187,000 in 2025 from $905,289,000 in 2024, largely due to a reduction in goodwill[17] - The company made an investment of $2.71 million in available-for-sale debt securities for the year ended December 31, 2025[22]