Financial Performance - Gross profit increased 11% to $27.9 million in Q4 2025, with a gross margin improvement of 640 basis points to 44.3% compared to Q4 2024[8] - Net revenue for Q4 2025 was $63.0 million, a 5% decrease year-over-year, driven by an 11% decrease in total orders placed, partially offset by a 6% increase in average order value from $129 to $137[8] - The company achieved a net loss of $0.4 million in Q4 2025, significantly improved from a net loss of $31.9 million in the same period last year[8] - Adjusted EBITDA for Q4 2025 was $2.6 million, compared to a loss of $(3.3) million in Q4 2024[8] - For fiscal year 2025, net revenue was $282.3 million, an 11% decrease compared to 2024, with a 15% decrease in total orders placed[8] - For the fiscal year ended December 28, 2025, the net loss was $13,713,000, a significant improvement from the net loss of $55,286,000 for the fiscal year ended December 29, 2024[21] - Adjusted EBITDA for the fiscal year ended December 28, 2025, was $(1,196,000), compared to $(9,738,000) for the fiscal year ended December 29, 2024, indicating a positive trend in operational performance[37] - The net loss margin for the fiscal year ended December 28, 2025 was (4.9)%, compared to (17.5)% for the fiscal year ended December 29, 2024[39] - For the thirteen weeks ended December 28, 2025, the net loss was $403,000, compared to a net loss of $31,875,000 for the same period in 2024[39] - Adjusted EBITDA for the thirteen weeks ended December 28, 2025 was $2,628,000, while it was $(3,300,000) for the same period in 2024, indicating a significant improvement[39] Customer Metrics - Active customers decreased by 11% to 2.3 million in fiscal year 2025 compared to 2.6 million in 2024[8] - Active Customers remained stable at 2,620 for the fiscal year ended December 28, 2025, consistent with the previous year[37] Debt and Cash Flow - Total debt as of December 28, 2025, was $14.4 million, with net debt at $11.7 million[14] - Net Debt as of December 28, 2025, was $(11,729,000), an increase from $(8,630,000) as of December 29, 2024[38] - Net cash provided by operating activities was $1,379,000 for the fiscal year ended December 28, 2025, down from $2,601,000 for the fiscal year ended December 29, 2024[21] - Net cash used in investing activities was $2,131,000 for the fiscal year ended December 28, 2025, compared to $2,874,000 for the fiscal year ended December 29, 2024[21] - The company reported a net cash used in operating activities of $(3,768,000) for the thirteen weeks ended December 28, 2025, compared to $(2,532,000) for the same period in 2024[40] Future Outlook - The company expects first quarter 2026 revenue trends to be sequentially lower than Q4 2025, with negative Adjusted EBITDA anticipated for the first quarter[12] - Lulus forecasts a positive Adjusted EBITDA for the full year 2026, improving from a negative $(1.2) million in 2025[15] - The company aims to enhance profitability through margin optimization and a more curated assortment mix in 2026[11] - The company plans to continue focusing on strategic priorities and business initiatives to drive long-term growth, as indicated in their forward-looking statements[25] Operational Expenses - The company incurred $1,225,000 in depreciation and amortization for the thirteen weeks ended December 28, 2025, compared to $1,378,000 for the same period in 2024[39] - Interest expense for the thirteen weeks ended December 28, 2025 was $487,000, up from $313,000 in the same period in 2024[39] - Capitalized software development costs for the thirteen weeks ended December 28, 2025 were $(463,000), compared to $(430,000) for the same period in 2024[40] - The company recognized $902,000 in equity-based compensation expense for the thirteen weeks ended December 28, 2025, down from $1,940,000 in the same period in 2024[39] - Other non-routine expenses for the thirteen weeks ended December 28, 2025 amounted to $270,000, with no such expenses reported in the same period in 2024[39] Average Order Value - Average Order Value (AOV) increased to $137 for the fiscal year ended December 28, 2025, compared to $129 for the fiscal year ended December 29, 2024[37]

Financial Performance - Consolidated revenue grew by 7.8% and system-wide revenue increased by 8.2% from the year ended December 31, 2024, to the year ended December 31, 2025[27]. - For the year ended December 31, 2025, consolidated revenues reached $1.023 billion, a 7.8% increase from $948.9 million in 2024[83]. - Adjusted EBITDA for the year ended December 31, 2025, was $230.2 million, representing an Adjusted EBITDA margin of 22.5%[83]. - 58% of consolidated revenues came from commercial payors, with government payors contributing 29% and self-pay, liens, and other payors making up the remainder[69]. Market Overview - The U.S. market for diagnostic imaging services was approximately $140 billion as of December 31, 2024, with a CAGR of 4.2% from 2019 to 2024[30]. - Management estimates that the diagnostic imaging services market will continue to grow at a mid-single digit rate between 2024 and 2030, driven by increasing utilization of advanced imaging and an aging population[31]. - The outpatient diagnostic imaging services market is highly fragmented, with approximately 6,000 independent diagnostic testing facilities (IDTFs) in the U.S. as of December 31, 2025[35]. Advanced Imaging - Advanced imaging accounted for 52% of consolidated revenue and 63% of system-wide revenue for the year ended December 31, 2025[50]. - Advanced imaging payments per procedure were approximately 330% of routine imaging payments per procedure as of December 31, 2025[41]. Operational Efficiency - The company has implemented third-party AI solutions, resulting in faster scan times and improved clinical efficiency[29]. - AI implementation is expected to reduce consolidated expenses related to third-party radiologist salaries, which totaled approximately $40 million in 2025[81]. - Investments in technology and workflow design aim to enhance operational performance and reduce administrative burdens, focusing on standardized protocols and scheduling optimization[146]. Growth Strategy - The company opened 13 de novo centers since December 31, 2023, including nine in 2025, to expand its presence in underserved areas[90]. - The average initial capital investment for de novo centers is $4.0 million, targeting an annual Adjusted EBITDA contribution of $1.0 million to $3.0 million[88]. - The company has a disciplined acquisition strategy, averaging an Adjusted EBITDA multiple of eight to nine times for medium to large imaging center companies[92]. Patient Satisfaction - The company’s patient Net Promoter Score (NPS) was 91, with an overall patient satisfaction rate of 97% as of December 31, 2025[57]. - The company received referrals from over 32,000 physician practices for imaging services in 2025, indicating a broad referral base[71]. Regulatory Environment - The company must comply with stringent federal and state regulatory requirements to participate in Medicare and Medicaid programs, which may affect service costs and payment timing[100]. - The Stark Law prohibits physicians from referring Medicare patients to entities in which they have a financial interest, with penalties including exclusion from Medicare and civil monetary penalties[106]. - The Patient Protection and Affordable Care Act increased the equipment utilization factor for advanced diagnostic imaging services, leading to reduced federal reimbursement rates for medical imaging[118]. - Increased enforcement activities regarding Medicare and Medicaid fraud regulations could adversely affect the company's financial performance[113]. - Future changes in healthcare reform legislation may lead to higher uninsured populations and reduced reimbursement rates, stressing healthcare institution finances[120]. Workforce and Compliance - The company employs 4,064 full-time, 271 part-time, and 684 as-needed employees as of December 31, 2025, including 322 full-time and 10 part-time radiologists[142]. - The company focuses on building sustainable pipelines for critical clinical roles, particularly radiologists and imaging technologists, to expand access to care[143]. - The company has implemented competitive compensation and performance-aligned incentives to attract and retain skilled professionals[144]. - The company maintains a compliance program to adhere to federal and state laws applicable to healthcare entities, including a Chief Compliance Officer and audit committee[137]. Financial Risks - Negative changes in governmental capitation or fee-for-service rates could significantly adversely impact the company's revenue and financial results[102]. - The company faces potential scrutiny from government audits, which could result in significant repayment obligations and penalties[112]. - Interest expense is affected by changes in short-term interest rates due to fixed and variable interest rate debt instruments[414]. - A hypothetical 1% increase in adjusted SOFR rates would result in an increase of approximately $8.3 million in annual interest expense[416].

Acquisition and Growth - Xos completed the acquisition of ElectraMeccanica, converting 1,766,388 shares of common stock at a ratio of 0.0143739 per share[30]. - The acquisition of ElectraMeccanica is expected to create growth and operational enhancement opportunities, but realization of these benefits is uncertain[217]. - Significant costs have been incurred and are expected in connection with the acquisition and integration of ElectraMeccanica[218]. - Blue Bird Corporation has ordered over 100 powertrain units from Xos between Q2 2025 and Q1 2026, highlighting the growth in the electric school bus market[55]. Product Development and Technology - The Xos Hub product line includes configurations with energy storage capacities of 210 kWh, 420 kWh (50% increase from 280 kWh), and 630 kWh, designed for various fleet applications[37]. - Xos vehicles utilize lithium iron phosphate (LFP) batteries, which can support 3,000 to 5,000 charge cycles, significantly outperforming nickel manganese cobalt (NMC) alternatives[44]. - The Xosphere™ fleet management platform allows operators to monitor vehicle performance in real-time, optimize energy usage, and manage maintenance[52]. - Xos is designing a next-generation chassis aimed at reducing production costs and improving total cost of ownership for fleet operators[39]. - The Company has eight awarded U.S. patents and one patent pending as of December 31, 2025, with a focus on protecting its Hub mobile charging business[87]. Manufacturing and Operations - The company has reconfigured its production facility in Tennessee to increase powertrain manufacturing capacity, expecting to build hundreds of powertrain kits during the 2026 fiscal year[62]. - The Company operates from an 85,142 square foot facility in Los Angeles, with a lease agreement effective until January 31, 2027[89]. - The Company has a manufacturing facility in Byrdstown, Tennessee, utilizing Fitzgerald Manufacturing Partners, with leases expiring in 2026 and 2027[90]. - The Company has implemented new quality management systems and inventory management practices to enhance manufacturing efficiency and service parts availability[62]. - The company relies on complex machinery for manufacturing, which poses risks of unexpected malfunctions and operational inefficiencies[153]. Financial Performance and Risks - The company experienced an operating loss of $33.1 million for the year ended December 31, 2025[180]. - The company achieved positive cash flow from operating activities of $5.4 million for the first time for the fiscal year ended December 31, 2025[183]. - The Company has cash and cash equivalents totaling $14.0 million as of December 31, 2025, which includes cash acquired from the ElectraMeccanica acquisition[108]. - The Company faces substantial doubt about its ability to continue as a going concern for the next 12 months due to uncertainties regarding capital access and operational funding[104]. - The company has incurred total indebtedness of approximately $20.6 million as of December 31, 2025, which includes convertible notes, equipment notes, finance lease liabilities, and insurance financing notes[210]. Market and Competitive Landscape - The automotive industry typically experiences higher revenue in spring and summer, with a peak season for commercial vehicle sales between Thanksgiving and Christmas[85]. - The company faces intense competition in the commercial vehicle market from established OEMs and new entrants, which may have greater resources and capabilities[121]. - The growth of the company is highly dependent on the adoption of electric vehicles by last-mile delivery fleets, which may not develop as expected[123]. - The market for electric vehicles is characterized by rapidly changing technologies and evolving customer demands, which could affect competitiveness[123]. Regulatory and Compliance Issues - The Company is subject to extensive environmental regulations, which are becoming increasingly stringent, impacting its operations[75]. - The Company has received the necessary EPA Certificate of Conformity and CARB approval for its vehicles sold in California[78]. - The current U.S. presidential administration's policy changes may reduce or eliminate government subsidies for electric vehicles, adversely affecting product affordability and demand[192]. - Changes in U.S. trade policy, including tariffs, could adversely affect business, financial condition, and operating results[219]. Customer and Supplier Relationships - The Company has established a diverse customer base, including major clients like Waymo, Caltrans, and Xcel Energy, for its Xos Hub products[54]. - One customer accounted for 54% of the Company's revenue during the year ended December 31, 2025, highlighting significant customer concentration risk[112]. - The Company relies on key suppliers such as Gotion and CATL for batteries, and maintains safety inventory for critical components to mitigate production risks[64]. - The company is dependent on third-party suppliers for key components, including battery packs, which could adversely affect its business if suppliers fail to meet specifications or timelines[142]. Workforce and Human Capital - As of December 31, 2025, the Company had 101 employees, a decrease from 114 employees the previous year, including 99 full-time employees[99]. - The Company aims to enhance its human capital strategy to strengthen its workforce and adapt to the evolving commercial vehicle landscape[92]. - The company intends to expand operations and hire personnel, but may face difficulties in attracting qualified employees in a competitive labor market[163]. Risks and Uncertainties - The company has experienced delays in battery production, resulting in a manufacturing backlog that could adversely affect growth prospects[133]. - The company may incur significant costs and delays in acquiring necessary approvals for future acquisitions, impacting business strategy[131]. - The company may face significant product liability claims, which could adversely affect its financial condition and brand image[170]. - The company has identified material weaknesses in internal controls over financial reporting, particularly in revenue recognition and inventory management, which could affect financial reporting reliability[202][204].

Clinical Trials and Regulatory Pathways - The company has initiated patient recruitment for the Phase 1/2 clinical trial of ST-503 for small fiber neuropathy (SFN) after FDA clearance of the IND in November 2024, with six clinical sites activated [22]. - Isaralgagene civaparvovec (ST-920) for Fabry disease is on a clear regulatory pathway to Accelerated Approval from the FDA, following a completed Phase 1/2 STAAR clinical study [48]. - The Phase 1/2 STAAR study for ST-920 included a diverse patient population and aimed to assess treatment-emergent adverse events and changes in disease severity over a one-year period [50]. - The clinical study for prion disease (ST-506) is expected to utilize a Bayesian optimal interval design to assess safety and efficacy, aiming to delay disease progression [47]. - The FDA granted multiple designations to isaralgagene civaparvovec, including Orphan Drug and Fast Track status, which supports its regulatory pathway [53]. - A successful interaction with the FDA in October 2024 confirmed that data from the ongoing Phase 1/2 STAAR study can serve as the primary basis for Accelerated Approval, using eGFR slope at 52 weeks as an intermediate clinical endpoint [54]. - The company continues to engage with the EMA regarding the approval pathway for isaralgagene civaparvovec in Europe [60]. - The company must complete extensive preclinical testing and obtain an IND application approval to initiate human clinical trials [181]. - The company is subject to significant regulatory controls in both the U.S. and EU for its clinical trials and product development [186]. - The FDA reviews a Biologics License Application (BLA) within 60 days to determine if it is substantially complete before filing, with a standard review goal of 10 months and priority review goal of 6 months [207][212]. - The centralized procedure for marketing authorization (MA) in the EU is compulsory for specific products, including those derived from biotechnological processes and orphan medicinal products, with a maximum evaluation timeframe of 210 days [214][215]. - The EMA can grant accelerated assessment, reducing the evaluation time to 150 days in exceptional cases [215]. - Innovative products targeting unmet medical needs may qualify for expedited development programs like PRIME designation, providing benefits such as early regulatory dialogue and potentially accelerated assessment [219]. Financials and Collaborations - The company has received approximately $911 million in upfront license fees and milestone payments, with the potential to earn up to $4.8 billion in future milestone payments from ongoing collaborations [31]. - The company has collaborations with major partners including Genentech and Astellas, focusing on developing therapies for various neurological targets [23]. - Under the Genentech Agreement, the company received an upfront license fee of $50.0 million and is eligible for up to $1.9 billion in development and commercial milestones [148]. - The Astellas Agreement provided the company with a $20.0 million upfront license payment and potential earnings of up to $1.3 billion in additional licensed target fees and milestone payments [150]. - The Lilly Agreement resulted in an $18.0 million upfront license payment, with potential earnings of up to $1.4 billion in additional licensed target fees and milestone payments [152]. - The company has entered into strategic collaborations with larger biopharmaceutical companies to fund internal research and development activities and assist in product development and commercialization [146]. Clinical Study Results and Efficacy - Positive topline results from the STAAR study were announced in June 2025, showing a positive mean eGFR slope of 1.965 mL/min/1.73m²/year at 52 weeks across all dosed patients [56]. - As of April 10, 2025, 33 patients were treated in the STAAR study, with 32 achieving at least 52 weeks of follow-up, demonstrating the treatment's tolerability and safety profile [60]. - Significant improvements in disease severity and quality of life were observed, with nine patients improving their total FOS-MSSI score at 12 months [61]. - The study reported a maximum mean eGFR slope of 3.016 mL/min/1.73m²/year at 18 months post-treatment for 22 patients [61]. - 64.0% of participants experienced no bleeding events, and 88.0% had no treated bleeds during the follow-up period [89]. - A single infusion of giroctocogene fitelparvovec resulted in a 99.8% reduction in annualized infusion rate (AIR) compared to the pre-infusion period, with a mean AIR of 0.21 vs 124.39 [89]. - At Month 15, 84% of participants maintained FVIII activity levels >5%, with 82.8% continuing to do so at 2 years post-infusion [89]. - The primary endpoint was assessed in participants with ≥15 months follow-up post-infusion, demonstrating a statistically significant decrease in total ABR [89]. Safety and Adverse Events - A total of 624 adverse events (AEs) were reported, with 98.7% of participants experiencing mostly mild or moderate AEs, and 26 serious AEs in 20% of participants [89]. - The most common treatment-related AEs included pyrexia (54.7%), increased alanine aminotransferase (46.7%), and headache (38.7%) [89]. - Immunogenicity issues with enzyme replacement therapy (ERT) were noted, with 80% of patients showing decreased antibody titers post-treatment [61]. - 62.7% of participants experienced treatment-related AEs related to hepatotoxicity, with 61.3% showing ALT increases above the upper limit of normal (ULN) [109]. Technology and Development Platforms - The company is developing STAC-BBB, a proprietary engineered neurotropic AAV capsid, which has shown the ability to cross the blood-brain barrier and mediate robust transgene expression [24]. - The Modular Integrase (MINT) platform is being developed to enable large-scale genome editing, potentially treating multiple patients with unique mutations in the same gene [28]. - The proprietary AAV capsid variant STAC-BBB demonstrated a 700-fold increase in transgene expression compared to the benchmark capsid AAV9 in non-human primates (NHPs) [133]. - STAC-BBB showed robust transduction and expression throughout the brain and spinal cord, targeting key regions associated with neurological diseases [134]. - The SIFTER platform has identified new capsids, STAC-102 and STAC-103, that exhibit improved delivery to the CNS compared to AAV9 [129]. - The MINT platform has achieved transgene integration and expression in up to 45% of T cells through zinc finger targeting and activity-enhancing amino acid substitutions in Bxb1 [144]. - The company has developed a flexible approach to genome editing that is cell-type agnostic and simpler to manufacture than most other targeted integration technologies [143]. Manufacturing and Compliance - The company is substantially reliant on external partners for manufacturing clinical supply for its neurology portfolio while retaining in-house analytical capabilities [30]. - The company utilizes a distinct manufacturing platform for AAV vector production, including both insect-based and mammalian platforms [177]. - Manufacturers of biologics must comply with current Good Manufacturing Practice (cGMP) regulations, ensuring quality control and documentation, and must register with the FDA and relevant EU authorities [202]. - The FDA will inspect manufacturing facilities and clinical sites before approving a BLA to ensure compliance with cGMP and GCP requirements [209]. - The company must ensure compliance with Good Manufacturing Practices (GMP) for its biologic products [188]. Market Competition and Challenges - The company faces intense competition from various biopharmaceutical companies and academic institutions in gene therapy and genome engineering [171]. - The company anticipates that competitors may succeed in obtaining patent protection and FDA approval before it does [172].

IPO and Fundraising - The company completed its Initial Public Offering (IPO) on May 29, 2025, raising gross proceeds of $253 million from the sale of 25,300,000 Public Units at a price of $10.00 per unit[20]. - An additional $5.24 million was raised through the sale of 524,050 Private Placement Units at the same price of $10.00 per unit[21]. - A total of $253 million from the IPO and Private Placement has been placed in a Trust Account[22]. - As of December 31, 2025, the company has $259,039,707 available for a Business Combination, excluding redemptions and taxes[61]. - The Trust Account holds $253 million, which can only be invested in U.S. government securities or money market funds until the Business Combination is completed[169]. - The company raised gross proceeds of $253 million from the Initial Public Offering by selling 25,300,000 Public Units at $10.00 each[167]. - The company completed the sale of 524,050 Private Placement Units at $10.00 each, generating additional gross proceeds of $5,240,500[168]. Business Combination Plans - The company must complete its initial Business Combination by November 29, 2026, with a possible extension to May 29, 2027[23]. - The company has until November 29, 2026, to complete its Business Combination, with the option to extend this period by an additional six months[170]. - The company must complete one or more Business Combinations with an aggregate fair market value of at least 80% of the assets held in the Trust Account[55]. - The company intends to structure its initial Business Combination to acquire 100% of the equity interests or assets of the target business, but may acquire less than 100% under certain conditions[56]. - The company may pursue Business Combination opportunities with targets that are financially unstable or in early stages of development, which carries inherent risks[50]. - The company may only complete one Business Combination with the proceeds from the Initial Public Offering and Private Placement, leading to dependency on a single business and potential limited product offerings[132]. Management and Strategy - The management team is focused on acquiring businesses in the defense and aerospace sectors, which are believed to have substantial growth potential[27]. - The company aims to acquire established companies with strong financial performance and free cash flow potential[35]. - The management team believes there is a backlog of companies interested in going public, which may lead to attractive acquisition opportunities[26]. - The management team plans to leverage their extensive network to identify and evaluate potential acquisition opportunities[31]. - The company has developed a broad network of contacts and corporate relationships globally, which provides substantial potential initial Business Combination targets[63]. - The company anticipates receiving proprietary deal flow opportunities due to the track record and business relationships of its management team[65]. Competition and Risks - The company may face intense competition from other SPACs and private investors in identifying suitable acquisition targets[28]. - The company may face increased competition for attractive target businesses, which could lead to higher financial terms demanded by those targets[49]. - The company is subject to competition from other SPACs, private equity groups, and public companies, which may limit its ability to acquire larger target businesses[115]. - The company may face challenges in completing its initial Business Combination due to increased competition for attractive targets and potential negative public perception of SPAC mergers[127]. - The company may not be able to complete an initial Business Combination due to regulatory review and approval requirements, including foreign investment regulations[131]. - The company may face conflicts of interest due to the management team's obligations to other entities[136]. Financial Performance and Projections - The company generated a net income of $5,535,163 from January 7, 2025, to December 31, 2025, primarily from dividends earned on investments held in the Trust Account[173]. - Total fees incurred during the Initial Public Offering amounted to $11,024,267, including a cash underwriting fee of $3,415,500[174]. - The company has not generated any operating revenues to date and expects to incur increased expenses as a public company[172]. - For the period from January 7, 2025, through December 31, 2025, cash used in operating activities was $490,102[175]. - Cash held outside the Trust Account was approximately $709,887, with a working capital surplus of $694,188[178]. - Management has determined that the company currently lacks the liquidity to sustain operations for at least one year, raising substantial doubt about its ability to continue as a going concern[182]. Shareholder Rights and Redemption - Public Shareholders can redeem their shares either through a general meeting or a tender offer, with the decision made at the company's discretion[87]. - If the initial Business Combination is not completed, Public Shareholders who elected to redeem their shares will not receive any redemption for their shares[103]. - A Public Shareholder is restricted from redeeming more than 15% of the Public Shares sold in the Initial Public Offering without prior consent, to prevent accumulation of large blocks of shares[98]. - The company will not complete the initial Business Combination if the cash required for redemptions exceeds the available cash, and all submitted shares will be returned[97]. - The Redemption Price upon dissolution is estimated to be approximately $10.24 per Public Share as of December 31, 2025[109]. - The company has not guaranteed that the actual per-share redemption amount will not be substantially less than the Redemption Price due to potential creditor claims[109]. Governance and Compliance - The Board of Directors consists of six members, divided into three classes, with each class serving a three-year term[210]. - The Audit Committee is composed of independent directors Doron Dovrat, Yair Ramati, and Gill Zaphrir, ensuring compliance with Nasdaq and SEC rules[213]. - The Audit Committee is chaired by Gill Zaphrir, who qualifies as an "audit committee financial expert" under SEC rules[214]. - The Compensation Committee includes independent directors Doron Dovrat, Yair Ramati, and Gill Zaphrir, with Mr. Ramati serving as chair[216]. - The Compensation Committee has the authority to retain external advisers while ensuring their independence according to Nasdaq and SEC standards[217]. - The company is classified as an "emerging growth company," allowing it to take advantage of certain exemptions from reporting requirements[121].

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 number: 001-42670 Kochav Defense Acquisition Corp. (Exact name of registrant as specified in its charter) | Cayman Islands | 98-1836086 | | --- ...

Merger and Acquisition Risks - The pending merger with Merck Sharp & Dohme LLC involves a tender offer to purchase all outstanding shares at a price of $53.00 per share[204]. - If the merger is not completed, the company may face a significant decline in stock price and could incur a termination fee of $235 million[207][217]. - The company has incurred substantial costs related to the pending transaction, which will continue regardless of whether the merger is completed[218]. - The merger agreement restricts the company's ability to pursue alternative transactions, potentially deterring other acquisition proposals[219]. - The completion of the merger would result in stockholders receiving cash for their shares, eliminating their opportunity to benefit from future growth[222]. - The announcement of the merger may disrupt business operations and relationships with third parties, adversely affecting financial results[210]. - Executive officers and directors may have interests in the merger that differ from those of stockholders, potentially influencing their support for the transaction[221]. Financial Performance and Projections - The net loss attributable to common stockholders for the years ended December 31, 2025 and 2024 was approximately $96.2 million and $88.9 million, respectively, with an accumulated deficit of $517.7 million as of December 31, 2025[224]. - The company anticipates continuing to incur significant losses for the foreseeable future, complicating assessments of its viability[223]. - The company expects to continue incurring losses for the foreseeable future, particularly as it develops its lead candidate, TERN-701, and conducts clinical trials[224]. - As of December 31, 2025, the company had capital resources of $1,019.0 million, which are expected to fund planned operating expenses into 2031[226]. - The company will require substantial additional funding to finance operations and product development, with potential delays or limitations if funding is not secured[225]. Product Development and Regulatory Challenges - The success of the company heavily depends on the successful development, regulatory approval, and commercialization of TERN-701, which is still in early clinical development[234]. - The company has not previously submitted a new drug application (NDA) to the FDA, and the approval process requires extensive preclinical and clinical data[235]. - The company may face significant delays or inability to obtain regulatory approvals or commercialize TERN-701 or other product candidates due to various factors beyond its control[237]. - Clinical drug development is lengthy and expensive, with uncertain timelines and outcomes, and previous successes do not guarantee future results[239]. - The company faces significant challenges in conducting clinical trials, including regulatory disagreements and the need for extensive negotiations with contract research organizations[241]. - Delays in clinical trial completion could harm the commercial prospects of the company's product candidates and increase costs[243]. - The company must adapt to new regulatory requirements, such as the Diversity Action Plan mandated by the Food and Drug Omnibus Reform Act, which may impact clinical development[244]. - Patient enrollment difficulties could adversely affect clinical trial timelines and outcomes, potentially delaying product development[245]. Competition and Market Dynamics - The company competes with numerous pharmaceutical and biotechnology firms, many of which have greater resources and established market positions[249]. - The company may face significant competition from alternative treatments that could be available at lower prices or with better efficacy[254]. - Regulatory approval processes are lengthy and uncertain, with a small percentage of drugs successfully completing these processes[267]. - Regulatory approval does not guarantee market acceptance, and various factors such as physician preference and reimbursement will influence the commercial success of product candidates[335]. - The company faces challenges in achieving broad market acceptance for its product candidates, which is essential for commercial success[334]. Intellectual Property Risks - The company operates in a highly competitive industry with extensive intellectual property litigation risks, which could impact its ability to commercialize products[357]. - The company may face legal proceedings related to intellectual property, which could divert management attention and financial resources[358]. - There is uncertainty regarding third-party patents that could block the commercialization of the company's product candidates[359]. - The patent application process is complex and may not guarantee the issuance of patents, affecting the company's competitive position[370]. - The enforcement of intellectual property rights may not be successful, and third parties may independently develop competitive technologies[375]. - The company may incur significant expenses from litigation related to intellectual property claims, impacting financial resources[365]. - The outcome of any future litigation is unpredictable and could materially affect the company's business and financial condition[366]. - The company seeks to maintain a competitive position through patents and other intellectual property rights, but these protections may not be adequate[369]. Regulatory Compliance and Legal Risks - Compliance with healthcare regulatory laws may expose the company to penalties and could constrain business operations and financial arrangements[337]. - The company faces potential penalties for non-compliance with various healthcare laws, which could adversely affect its financial condition and operations[339]. - Future healthcare legislation may increase the difficulty and cost of obtaining marketing approval and could affect pricing strategies[343]. - The Inflation Reduction Act requires manufacturers to engage in price negotiations with Medicare, which could impact future revenue[348]. - The company may be subject to significant civil monetary penalties for errors in reporting product and pricing data if it participates in governmental pricing programs[342]. Manufacturing and Supply Chain Risks - The company relies on third parties for manufacturing clinical drug supplies, and any failure by these parties could halt or delay commercialization efforts[312]. - Changes in manufacturing partners may require extensive effort and could lead to delays in drug development[315]. - The company relies on third-party suppliers for raw materials necessary for clinical trials, with potential supply disruptions impacting product candidate development and commercialization[317]. - There is a risk that manufacturing capacity for product candidates may not be increased in a timely or cost-effective manner, potentially delaying clinical trials and marketing approval[318]. - The company has not entered into long-term agreements with contract manufacturers, which may adversely affect the supply of finished drug products[319]. Collaboration and Partnership Risks - The company depends on third parties to conduct preclinical and clinical trials, and any failure by these parties to meet regulatory standards could delay regulatory approval[320]. - Collaborations with third parties for product development, such as TERN-701, are crucial, and failure in these collaborations could adversely affect commercialization efforts[323].

Financial Performance - Spruce Power achieved record full-year Operating Income of $17.9 million in 2025, a significant improvement from a loss of $50.4 million in 2024[4]. - Revenues for the fourth quarter of 2025 were $24.0 million, representing a 19% year-over-year increase, and a 36% increase for the full year[4]. - Operating EBITDA for 2025 was $80.1 million, up 49% year-over-year, demonstrating strong operating leverage[4]. - The company generated $31.6 million in Adjusted Cash Flow from Operations for the full year 2025[4]. - Revenues for the three months ended December 31, 2025, were $24.028 million, an increase from $20.226 million in the same period of 2024, representing a growth of approximately 8.9%[36]. - Adjusted EBITDA for the three months ended December 31, 2025, was $8.715 million, compared to $1.882 million in the same period of 2024, indicating a significant increase of approximately 362.5%[42]. - Operating EBITDA for the three months ended December 31, 2025, reached $16.995 million, up from $10.806 million in the same period of 2024, reflecting a growth of about 57.2%[42]. - The net loss attributable to stockholders for the year ended December 31, 2025, was $26.026 million, compared to a net loss of $70.489 million in 2024, showing an improvement of approximately 63.1%[36]. - Adjusted Cash Flow from Operations for the year ended December 31, 2025, was $31.555 million, a significant increase from $7.144 million in 2024[40]. - Net loss for 2025 was $25,706 thousand, an improvement compared to a net loss of $70,053 thousand in 2024, representing a reduction of approximately 63.3%[47]. Cost Management - Spruce Power reduced total operating expenses to $21.8 million in Q4 2025, down from $26.7 million in Q4 2024, primarily due to lower operations and maintenance costs[8]. - Core Operating Expenses decreased to $14.9 million in Q4 2025 from $20.7 million in the prior year, reflecting effective cost management[9]. - The total operating expenses for the year ended December 31, 2025, were $93.872 million, a decrease from $132.500 million in 2024, indicating a reduction of approximately 29.2%[36]. - Core Operating Expenses for the three months ended December 31, 2025, totaled $14.859 million, down from $20.748 million in the same period of 2024, representing a decrease of approximately 28.5%[38]. Debt and Equity - The company repaid $35.1 million in debt during 2025, enhancing equity value and reducing leverage[5]. - Total stockholders' equity decreased from $146,152 thousand in 2024 to $121,252 thousand in 2025, a decrease of approximately 17.0%[45]. - Non-recourse debt decreased from $705,331 thousand in 2024 to $676,968 thousand in 2025, a reduction of approximately 4.0%[44]. - Cash paid for interest increased from $35,060 thousand in 2024 to $42,978 thousand in 2025, an increase of approximately 22.5%[48]. Cash Flow and Liquidity - Total cash at year-end 2025 was $93.1 million, equating to $5.13 per share, providing substantial liquidity[6][13]. - The company reported a net cash used in operating activities of $(3.302) million for the three months ended December 31, 2025, compared to $(13.458) million in the same period of 2024[40]. - Net cash used in operating activities improved from $41,811 thousand in 2024 to $3,530 thousand in 2025, a reduction of approximately 91.6%[47]. - Cash and cash equivalents decreased from $109,148 thousand at the beginning of the period to $93,145 thousand at the end of the period, a decline of approximately 14.7%[48]. Asset Management - Spruce Power owned cash flows from approximately 84,000 home solar assets across 18 U.S. states as of December 31, 2025[16]. - The gross portfolio value was $848.0 million as of December 31, 2025, indicating strong asset growth[14]. - The Contracted Portfolio Value as of December 31, 2025, was $729 million, while the Gross Portfolio Value was $848 million[30]. - Total assets decreased from $898,479 thousand in 2024 to $837,273 thousand in 2025, a decline of approximately 6.8%[44].

Financial Performance - Aptera reported a Q4 2025 GAAP net loss of $15.5 million, compared to a net loss of $8.9 million in Q4 2024, representing a 74.8% increase in losses year-over-year[3] - The full year 2025 GAAP net loss was $43.9 million, up from $34.9 million in 2024, indicating a 25.0% increase in annual losses[3] - Adjusted net loss for Q4 2025 was $8.7 million (Non-GAAP), compared to $5.3 million in Q4 2024, reflecting a 64.2% increase[3] - For the full year 2025, the adjusted net loss was $18.5 million (Non-GAAP), down from $20.1 million in 2024, showing a 7.9% improvement[3] Operating Expenses - Operating expenses for Q4 2025 were $15.1 million, significantly higher than $10.0 million in Q4 2024, marking a 50.8% increase[3] Cash Position - As of December 31, 2025, Aptera had $9.6 million in cash and cash equivalents, a decrease from $13.2 million at the end of 2024[3] Fundraising and Capital - In Q1 2026, Aptera raised approximately $17.1 million in gross proceeds, including $9.0 million from a public offering and $8.1 million from warrant exercises[5] Operational Developments - The company received Foreign-Trade Zone designation for its Carlsbad assembly facility in February 2026, which may enhance operational efficiency[5] - Aptera is focused on completing durability testing and ramping up to low-volume production, with plans to secure long-lead components using the newly raised capital[2] Other Income - The company recognized $4.2 million in other income for the full year 2025, primarily from a California Energy Commission grant[7]

Financial Performance - Gross written premiums decreased by 41.9% year-over-year in Q4 2025, totaling $7.9 million compared to $13.7 million in Q4 2024[7] - Net income allocable to common shareholders for Q4 2025 was a loss of $17.0 million, or $1.39 per share, compared to a loss of $25.4 million, or $2.08 per share in Q4 2024[19] - Adjusted operating loss for Q4 2025 was $15.2 million, or $1.24 per share, compared to a loss of $25.8 million, or $2.11 per share in Q4 2024[20] - Net income for Q4 2025 was $(17,041) thousand, a decrease from $(25,382) thousand in Q4 2024[28] - The diluted loss per common share for Q4 2025 was $(1.39), compared to $(2.08) for Q4 2024, showing an improvement[28] Premiums and Revenue - Personal lines premium increased by 12.7% for the year, while commercial lines premiums declined by 67%[2] - Net earned premiums for Q4 2025 were $5.7 million, down 55.2% from $12.7 million in Q4 2024[7] - Gross earned premiums for Q4 2025 were $15,111 thousand, down from $19,721 thousand in Q4 2024, reflecting a decline of approximately 23%[33] - Net earned premiums for the year ended December 31, 2025, were $32,387 thousand, compared to $60,862 thousand in 2024, a decrease of about 47%[33] - Total revenue and other income for the year ended December 31, 2025, was $43,304 thousand, down from $67,271 thousand in 2024, representing a decline of approximately 36%[33] Underwriting and Loss Ratios - The combined ratio for Q4 2025 was 333.5%, significantly higher than 292.9% in Q4 2024, indicating an underwriting loss[15] - The loss ratio for personal lines was 107.3% in Q4 2025, compared to 55.2% in Q4 2024[14] Assets and Liabilities - Total assets decreased to $239,283 thousand as of December 31, 2025, from $281,656 thousand in 2024, a reduction of about 15%[31] - Total liabilities decreased to $230,317 thousand as of December 31, 2025, from $260,131 thousand in 2024, a decline of approximately 12%[31] Investment and Taxation - The company reported a net investment income of $1.1 million for Q4 2025, down from $1.4 million in the prior year[17] - The company has recorded a full valuation allowance against its deferred tax assets as of December 31, 2025, resulting in no taxable impacts to adjusted operating income[29] Business Focus - Personal lines production comprised 100% of gross written premiums in Q4 2025, with commercial lines generating zero premium production[5] - The company is focusing on select personal lines homeowners' business to align with underwriting goals and reduce exposure to legacy commercial lines[3] Discontinued Operations - The company reported a net loss from discontinued operations of $(186) thousand in Q4 2024, with no such losses reported in Q4 2025[33]