Financial Viability - The company has received a delisting determination from Nasdaq due to the closing bid price of its common stock being below the $1.00 minimum requirement for 30 consecutive business days [252]. - The company has substantial doubt regarding its ability to continue as a going concern, as existing cash and cash equivalents are insufficient to fund operating expenses and capital expenditures for the next 12 months [257]. - The company expects to need significant additional capital in the future to fund operations, which may lead to dilution for existing shareholders [374]. - The company has approximately $54.4 million of gross federal and $8.5 million of gross state net operating loss carry-forwards as of December 31, 2025 [369]. - Federal net operating losses incurred after December 31, 2017, may be carried forward indefinitely, while those incurred prior to 2018 may be carried forward for twenty years [369]. - The company has approximately $3.5 million of federal research and development credits and $0.4 million of state research and development credits, which will begin to expire in 2040 if not utilized [369]. Product Development and Clinical Trials - The company has never generated revenue from product sales and all potential product candidates are currently in the pre-clinical stage, with no expectation of revenue generation for several years [259]. - The company plans to begin a Phase 1 clinical trial for DCOY-101 potentially in the first half of 2027, contingent on raising sufficient capital [257]. - The company has invested significantly in the identification and preclinical development of potential product candidates targeting diseases such as viral diseases and colon cancer, with revenue generation expected to take many years [292]. - Clinical trials are expensive and can take many years to complete, with the outcome of early trials not necessarily predictive of later success [294]. - The company must demonstrate safety and efficacy to regulatory authorities, with the potential for additional costs and delays if trials do not yield positive results [294]. - The company has not advanced any potential product candidates to clinical trials, which may hinder its ability to commercialize products [317]. - Delays in clinical trial processes, such as patient recruitment and regulatory approvals, could significantly impact the company's ability to commercialize its products [300]. Regulatory and Compliance Risks - The company is subject to a Mandatory Panel Monitor for a period of one year due to non-compliance with the Minimum Bid Price Requirement, which could lead to delisting if not resolved [255]. - The evolving regulatory environment for AI, including the EU's AI Act set to take effect in August 2026, may increase compliance costs and operational burdens for the company [281]. - The company faces unique risks related to its reliance on AI for drug development, including potential regulatory changes and competition from other entities using similar technologies [280]. - The company is subject to various federal and state healthcare fraud and abuse laws, and non-compliance could result in significant penalties and reputational harm [358]. - Changes in regulatory requirements and policies could affect the commercial viability of the company's products and create revenue uncertainty [352]. - Disruptions at regulatory agencies like the FDA could hinder the timely review and approval of new products, negatively impacting the company's business and timelines [348]. Competition and Market Risks - The company faces significant competition from major companies developing vaccines or treatments for targeted diseases, which could adversely affect its market share [314]. - The biotechnology and pharmaceutical industries are intensely competitive, with competitors having greater financial and technical resources, which could negatively impact the company's operating results [336]. - The company's potential product candidates are in preclinical stages and will face competition from existing approved products, affecting its ability to compete successfully [338]. - The commercial success of potential product candidates will depend on various factors, including regulatory approvals, market needs, and effective commercialization strategies [293]. - The company may face significant competition from established companies with extensive marketing and sales operations, which could hinder its ability to generate sufficient product revenue [355]. Intellectual Property and Legal Risks - The company relies on a combination of patents, trade secret protection, and confidentiality agreements to protect its intellectual property, which may not be sufficient [320]. - The company may face challenges in obtaining or maintaining necessary rights to drug compounds and processes through acquisitions and in-licenses [311]. - If third-party intellectual property infringement claims are asserted, it may delay or prevent the company's development and commercialization efforts [325]. - The company may encounter significant problems in protecting and defending its intellectual property both domestically and internationally [323]. - The company may face expensive and time-consuming lawsuits to protect its patents, which could adversely affect its business if patents are invalidated or interpreted narrowly [328]. - The company may need to obtain additional licenses from third parties to advance research or commercialize potential product candidates, which could significantly harm its business if not acquired at reasonable terms [332]. Operational Risks - The company relies on third-party vendors for operational functions, which may delay research and development efforts and increase costs [271]. - The company relies on third-party CROs for clinical trials, which may impact the quality and timeliness of clinical data, potentially delaying regulatory approvals and increasing costs [277]. - Business interruptions from natural disasters could delay research and development efforts, and the company does not carry insurance for such events [371]. - Cybersecurity threats pose risks to the company's proprietary data and technology, which could disrupt operations and harm its business [341]. - The company is highly dependent on key personnel, including its CEO and other executives, and losing any of them could adversely impact its business [357]. Financial and Stock Market Considerations - The company's stock price may fluctuate significantly due to various factors, including market conditions and investor confidence [372]. - The company does not currently intend to pay dividends on its common stock, with any potential return to investors expected only from increases in stock price [377]. - The company is classified as a "smaller reporting company," which allows it to utilize reduced disclosure requirements, potentially making its common stock less attractive to investors [380]. - The company is subject to significant legal, accounting, and compliance costs as a publicly traded entity, which may impact financial performance [385]. - Changes in tax laws, such as the TCJA and the Inflation Reduction Act, could materially affect the company's financial condition and results of operations [389]. - The company has the ability to issue up to 10 million shares of preferred stock, which could adversely affect the rights of common stockholders [383]. - The company is not deemed an "investment company" under the Investment Company Act of 1940, which allows it to continue its business operations as planned [378].

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: 001-40492 Femasys Inc. (Exact Name of Registrant as Specified in its Charter) | Delaware | | 11-3713499 | | --- | --- | --- | | (State o ...

Financial Performance - Total revenue for the full year 2025 increased by 10.7% year-over-year to $187.1 million[6] - Net income for the full year 2025 was $2.3 million, compared to a net loss of $4.6 million in 2024[6] - EBITDA for the full year increased to $5.4 million from $1.9 million in the prior year[7] - GAAP diluted EPS for the full year was $0.04, compared to $(0.39) in the prior year[6] - Total revenue for Q4 2025 was $50.512 million, a 13.5% increase from $44.608 million in Q4 2024[19] - Net income for Q4 2025 was $167, compared to a net loss of $1.095 million in Q4 2024[19] - Net income for the twelve months ended December 31, 2025, was $2.308 million, a significant improvement from a net loss of $4.562 million in 2024[19] Assets and Management - Assets Under Management (AuM) grew by 11% year-over-year to $29.9 billion as of December 31, 2025[6] - Total advisory and brokerage assets as of December 31, 2025, grew 11% year-over-year to $29.9 billion[6] Expenses and Cost Management - Total annual operating expenses decreased to $35.2 million from $36.8 million in 2024, reflecting improved cost management[6] - Total expenses for Q4 2025 were $50.748 million, up from $45.178 million in Q4 2024[19] - Employee compensation and benefits for Q4 2025 totaled $4.929 million, compared to $4.556 million in Q4 2024[19] EBITDA Adjustments - Adjusted EBITDA for the full year increased to $6.5 million, compared to $6.3 million in 2024[7] - Adjusted EBITDA for Q4 2025 was $0.8 million, compared to $2.2 million in Q4 2024[22] - Adjusted EBITDA for the twelve months ended December 31, 2025, was $6.5 million, slightly up from $6.3 million in 2024[22] Cash and Debt - Cash and cash equivalents as of December 31, 2025, were $10.7 million, with outstanding long-term debt of $17.7 million[9] Share Information - The weighted average shares outstanding for diluted shares in Q4 2025 was 16,813, compared to 16,593 in Q4 2024[19]

Drug Development and Clinical Trials - The company is in the clinical stage of drug development with no products approved for commercial sale and has not generated any revenue since its inception in June 2009[141]. - The company has conducted Phase 3 pivotal clinical trials for its product candidates, including tarcocimab, KSI-501, and KSI-101, but has not yet demonstrated the ability to successfully overcome risks associated with drug development[143]. - In July 2023, the Phase 3 GLEAM and GLIMMER clinical trials of tarcocimab did not meet their primary efficacy endpoints, leading to a pause in further development pending review of additional clinical data[148]. - The company resumed development of tarcocimab in November 2023 after reviewing Year 1 data from the Phase 3 BEACON study and the Phase 3 GLOW1 study[149]. - The company has never submitted a Biologics License Application (BLA) and may face delays in submission and approval processes, which could impact its ability to commercialize its product candidates[146]. - Preliminary and ongoing data from clinical trials are subject to change and may not be indicative of future results, which poses risks for the company's development strategies[150]. - The company acknowledges that investment in biopharmaceutical product development involves significant risks, including the potential failure to demonstrate adequate efficacy or safety profiles[159]. - Regulatory approval is necessary before the company can market any of its product candidates, and there is no assurance that such approvals will be granted[155]. - The company may need to conduct additional clinical studies to obtain regulatory approval, which could further delay commercialization efforts[158]. - Clinical trials are subject to significant delays and uncertainties, which may impair the ability to generate revenue[160]. - The company’s most advanced product candidate, tarcocimab, did not meet the primary efficacy endpoint in the Phase 2b/3 DAZZLE clinical trial[175]. - Delays in clinical trials could lead to increased costs and jeopardize the ability to commence product sales[164]. - Adverse events observed in clinical trials may halt development or limit regulatory approval, impacting commercial potential[165]. - The company faces challenges in patient enrollment for clinical trials, which could result in significant delays or abandonment of trials[173]. - Regulatory authorities may require additional studies or impose clinical holds, affecting the timeline for product development[162]. - The company’s ABC Platform may not yield viable product candidates, posing risks to future product development[180]. - Changes in manufacturing processes or formulation may necessitate additional studies, further delaying timelines[162]. Market and Competitive Landscape - The company faces significant competition from major pharmaceutical and biotechnology companies, including Roche, Regeneron, and Novartis, which have established therapies for retinal diseases[182]. - Roche's Vabysmo and Regeneron's Eylea HD have gained rapid market share, with Vabysmo approved for wet AMD and DME in January 2022 and RVO in October 2023, while Eylea HD received approval for wet AMD, DME, and DR in August 2023[183]. - The market for the company's product candidates may change, affecting the commercial viability of ongoing development efforts[156]. - Market acceptance of product candidates is uncertain, and factors such as pricing, distribution channels, and competition could hinder commercial success[199]. - The company may face challenges in negotiating reimbursement arrangements and obtaining formulary access, impacting product profitability[200]. - The company faces significant risks related to the acceptance and commercialization of its product candidates, which may not generate substantial revenue if they do not achieve adequate market acceptance[202]. - The company may face competition from biosimilar products sooner than anticipated, which could impact market share and revenue[207]. Regulatory and Compliance Risks - Regulatory approval processes for the company's product candidates are lengthy and unpredictable, potentially delaying market entry and impacting revenue generation[212]. - The company may encounter unfavorable pricing regulations and reimbursement practices that could harm its business and limit the commercial viability of its products[203]. - Reimbursement availability from government and private payors is critical for the company's product candidates, and any limitations could hinder successful commercialization[204]. - The company must comply with extensive ongoing regulatory requirements post-approval, which may result in significant additional expenses[219]. - The company may incur substantial liabilities from product liability lawsuits, which could limit the commercialization of its product candidates[209]. - Delays in obtaining reimbursement for newly approved drugs may occur, and coverage may be more limited than the approved uses of the drugs[206]. - Regulatory approvals for product candidates may come with limitations on marketing and promotion, potentially leading to costly post-marketing testing[221]. - The company may face significant penalties, including fines and withdrawal of regulatory approvals, if it fails to comply with applicable regulatory requirements[228]. - Legislative changes, such as the One Big Beautiful Bill Act, are expected to reduce the number of Americans with health insurance and impact Medicaid spending[230]. - Disruptions at regulatory agencies like the FDA due to funding shortages or government shutdowns could hinder timely product approvals[226]. - The U.S. Supreme Court's Loper Bright decision may increase regulatory uncertainty and legal challenges affecting the company's operations[225]. - Legislative measures aimed at controlling healthcare costs may adversely affect the company's ability to sell products profitably[229]. - The company may face challenges in maintaining regulatory compliance, which is critical for sustaining marketing approvals and profitability[225]. - Future healthcare legislation could impact the drug approval process and the company's overall business strategy[232]. Data Privacy and Cybersecurity - The company is subject to stringent data privacy and security obligations, including U.S. and foreign laws, which could lead to regulatory investigations and significant penalties if not complied with[240]. - The California Consumer Privacy Act (CCPA) imposes specific obligations on businesses regarding personal data, including civil penalties for noncompliance, which could significantly impact the company's operations[242]. - Under the EU GDPR, companies face fines of up to €20 million or 4% of annual global revenue for violations, highlighting the financial risks associated with data processing noncompliance[243]. - The company utilizes generative AI and automated decision-making technologies, which are subject to various privacy laws, potentially increasing compliance costs and regulatory scrutiny[244]. - Data localization laws in Europe restrict the transfer of personal data to the U.S., which could materially impact the company's ability to conduct clinical trials and collaborate with partners[245]. - The U.S. Department of Justice has issued rules that impose additional restrictions on data transactions involving certain countries, which could affect the company's business activities[246]. - The company is contractually bound by industry standards related to data privacy and security, and failure to comply could result in investigations and enforcement actions[248]. - Compliance with evolving data privacy laws requires significant resources, potentially necessitating changes to the company's business model and operations[249]. - The company faces risks from cybersecurity threats, including cyberattacks and data breaches, which could disrupt operations and harm its reputation[319]. - The company’s insurance coverage may not be adequate for cybersecurity liabilities, potentially leading to significant financial repercussions[331]. - The company has implemented security measures to protect against cybersecurity incidents, but there is no assurance these measures will be fully effective[326]. Manufacturing and Supply Chain Risks - The manufacturing of biologics is complex and costly, with significant lead times required, making it more expensive than traditional small molecule drugs[185]. - The company relies on third parties for raw materials, which are sourced from single suppliers in multiple countries, increasing supply chain risks[189]. - The company has limited experience in commercial-scale manufacturing, which could delay clinical trials and regulatory approvals if production issues arise[190]. - The Ursus Facility, built for the production of tarcocimab, may not be fully utilized due to changes in the development plan, potentially leading to additional costs[194]. - The company relies on third-party manufacturers for clinical trial materials and commercialization, which increases risks related to supply availability and cost[259]. - There is a potential for delays in obtaining marketing approvals if third parties do not meet contractual obligations or regulatory requirements[257]. - The company faces risks from reliance on third-party suppliers for key raw materials, which could impact manufacturing capabilities and timelines[265]. - Collaborations with third parties for research and development may not yield expected market potential if not successful[266]. - The company may incur additional costs and delays if current contract manufacturers fail to perform as agreed, as there are no arrangements for redundant supply[263]. - International operations expose the company to economic and regulatory risks, including tariffs and trade restrictions that could increase costs and disrupt supply chains[336]. - The company anticipates that future tariffs may lead to increased research and development expenses and complicate supply chain management[339]. Intellectual Property Risks - Patent protection is critical for the company's product candidates, and failure to secure patents could adversely affect competitive positioning[273]. - The patent prosecution process is complex and costly, which may hinder the ability to maintain necessary patent protections[276]. - The patent protection for the ABC Platform and product candidates is uncertain, with potential challenges to validity and enforceability that could adversely affect competitive positioning[277]. - Patent applications may not result in meaningful protection, and competitors could develop similar technologies, impacting business prospects[278]. - Legal proceedings could challenge patent rights, leading to potential loss of exclusivity and increased costs for the company[279]. - The time required for product development may result in patents expiring before commercialization, limiting intellectual property protection[280]. - Global patent protection is costly and may not be as effective as in the U.S., allowing competitors to exploit technologies in jurisdictions without patent coverage[281]. - Enforcement of intellectual property rights in foreign jurisdictions can be difficult, leading to potential infringement issues and increased costs[282]. - Compulsory licensing laws in some countries may force the company to grant licenses to third parties, impairing competitive position[283]. - Compliance with patent agency requirements is critical; non-compliance could result in loss of patent rights and market entry for competitors[284]. - Changes in U.S. patent laws could increase uncertainties and costs related to patent prosecution and enforcement, impacting the company's patent portfolio[290]. - Failure to obtain patent term extensions could harm the business, as competitors may launch similar products post-expiration of patents[291]. - The company may face claims regarding the wrongful use or disclosure of trade secrets by employees or advisors, which could lead to litigation and substantial costs[295]. - There is a risk that the company may not successfully execute agreements for the assignment of intellectual property rights, potentially leading to adverse effects on business and financial condition[296]. - The competitive landscape in retinal disease treatment is dynamic, with potential litigation related to intellectual property that could delay product development and commercialization[298]. - The company is at risk of infringing on third-party patents, which could impede the commercialization of its ABC Platform and product candidates[300]. - If third parties claim patent infringement, the company may face significant litigation expenses and potential injunctions that could delay product commercialization[304]. Human Resources and Organizational Risks - The company is highly dependent on key personnel, and the loss of any executive or key employee could delay product development and harm business[312]. - Competition for skilled personnel in the biotechnology sector is intense, which may limit the company's ability to hire and retain qualified staff[313]. - The company faces significant challenges in recruiting and retaining quality personnel, which could impact its operational effectiveness[321]. - As of December 31, 2025, the company had 124 employees and plans to significantly increase its workforce to support future growth[316]. - The company relies heavily on independent organizations, advisors, and consultants for critical services, which may impact clinical trials and regulatory approvals if not managed effectively[317]. Business Continuity Risks - Business disruptions from natural disasters or geopolitical events could adversely affect the company's operations and financial condition[333]. - The company’s enterprise resource planning (ERP) system is crucial for maintaining accurate financial records, and any issues with it could negatively impact financial results[335].

Financial Performance - The company generated a net loss of $(7,966,366) for the year ended December 31, 2025, with an accumulated deficit of $(10,260,014) as of the same date[55]. - In 2025, the company experienced a revenue reduction of approximately $835,878 due to a significant customer temporarily suspending orders[76]. - For the year ended December 31, 2025, three customers accounted for approximately 79% of total revenues, with Customer 1 contributing 58%[76]. - The company does not intend to pay dividends for the foreseeable future, focusing on retaining earnings for business expansion[135]. Capital Requirements - The company may need to raise substantial additional capital in the future to execute its business plan and fund product development[59]. - The company may need to raise substantial additional capital in the future to execute its business plan, which could lead to dilution for stockholders[79]. - The business is capital intensive, requiring ongoing cash outlays that may strain available capital and necessitate selling assets or incurring debt[58]. Operational Risks - The company faces risks related to cold chain logistics services, including environmental, health, safety, and quality control issues[64]. - Delays or increased costs in procuring components from third-party manufacturers could adversely affect business operations and financial performance[69]. - The company relies on third-party shipment services, and any delays could harm customer satisfaction and the company's reputation[78]. - The company relies on third-party agents for importation and delivery, and their failure could lead to customer dissatisfaction and liability[96]. - Cybersecurity threats and data breaches pose risks to business operations, potentially leading to significant costs and reputational damage[102]. Competition and Market Position - The company may face significant competition from larger firms with greater resources, which could adversely affect its market position[85]. - The company faces intense competition and must innovate to maintain market share, as failure to introduce new products could lead to revenue decline[106]. - Strategic alliances with global shipping providers like FedEx, DHL, and UPS may not guarantee increased revenues or cash flow[110]. Regulatory and Compliance Issues - The company is subject to regulation by the FDA and similar state agencies, and failure to comply could adversely affect its business and financial condition[94]. - Compliance with various governmental regulations may increase operational costs and limit activities, potentially affecting financial results[96]. - The company is subject to complex laws, including the U.S. Foreign Corrupt Practices Act, which could result in fines and operational restrictions if violated[98]. - Significant changes in regulations could require costly adjustments to solutions and services, impacting marketability and financial condition[97]. Management and Governance - The management team has limited experience managing a public company, which could divert attention from day-to-day operations[82]. - The company is classified as a "controlled company," with Mr. Williams and Dr. Croyle controlling 62% of the voting power, exempting it from certain corporate governance requirements[86]. - The company is classified as an emerging growth company, allowing it to take advantage of reduced reporting requirements[131]. Financial Risks - The company’s liability exposure may exceed current insurance coverage, potentially impacting financial condition and results of operations[72]. - Product liability claims may lead to significant costs, management distraction, and potential loss of revenue[116]. - Changes in trade policy and tariffs could adversely affect business operations and financial results[119]. - The company is exposed to market risks, primarily interest rate risks and inflation risks[200]. - Cash consists of readily available checking accounts and may include short-term money market fund investments, which carry interest rate risk[201]. - Historical fluctuations in interest income have not been significant, indicating limited impact from interest rate risk[201]. - Inflation has generally increased the cost of facilitating business, but it has not had a material effect on the company's results of operations during the reported periods[202]. Sales and Marketing - The company plans to enhance sales, marketing, and distribution capabilities in the Americas, EMEA, and APAC, which will be expensive and time-consuming[70]. - Establishing effective sales and marketing capabilities is crucial for revenue growth, but challenges in this area could hinder expansion efforts[108]. - The company must accurately forecast customer demand to avoid excess inventory or missed revenue opportunities, which could harm operating results[77]. Product and Liability Issues - Product errors or defects could result in reputational damage, increased costs, and potential litigation, particularly in sensitive applications like human reproductive medicine[113]. - The company maintains product liability coverage, but claims exceeding this coverage could materially impact liquidity and financial condition[115]. - Damage to the company's reputation could significantly harm its business and financial condition[118]. Accounting and Tax Considerations - The Tax Cuts and Jobs Act of 2017 reduced the corporate tax rate, impacting future tax benefits of deferred tax assets[124]. - The company may face challenges related to indirect tax audits and potential liabilities from tax authorities[126]. - Changes in accounting principles could result in unfavorable effects on financial statements and stock price[138]. Market Value and Stock Considerations - The market value of the company's stock held by non-affiliates is less than $700 million, qualifying it as a smaller reporting company[134]. - Future sales of substantial amounts of common stock could negatively impact stock price and market perception[136].

Revenue and Profitability - Revenue for the year ended December 31, 2025 was $69,262,124, a decrease of $11,816,740 or 14.6% compared to $81,078,864 for 2024, primarily due to unfavorable contract adjustments related to the Boeing A-10 program[175]. - Revenue from prime government contracts decreased by $4,261,718 or 36.5% to $7,415,434 for 2025, reflecting lower revenue from the T-38 Pacer Classic program[176]. - Revenue from government subcontracts decreased by $9,156,691 or 14.2% to $55,547,679 for 2025, mainly due to the Boeing A-10 program termination[177]. - Revenue from commercial contracts increased by $1,601,669 or 34.1% to $6,299,011 for 2025, driven by new production on Embraer and Collins programs[178]. - Gross profit for 2025 was $10,556,069, a decrease of $6,681,992 or 38.8% from $17,238,061 in 2024, with a gross margin of 15.2% compared to 21.3%[183]. - Net loss for 2025 was $(843,361), a decrease of $4,142,695 or 125.6% compared to a net income of $3,299,334 in 2024, driven by reduced gross margin[189]. Financial Position and Cash Flow - Total assets increased to $75.24 million as of December 31, 2025, from $67.98 million in 2024, representing an increase of approximately 10.5%[250]. - Current liabilities decreased to $23.02 million in 2025 from $26.47 million in 2024, a reduction of about 13.5%[250]. - The company’s cash position decreased to $899,199 in 2025 from $5.49 million in 2024, a decline of approximately 83.7%[250]. - Cash flows from operating activities showed a net cash used of $5,200,025 in 2025 compared to a net cash provided of $3,558,935 in 2024, highlighting a negative shift in operational cash flow[258]. - The company made repayments on its line of credit totaling $17,390,000 in 2025, compared to $2,650,000 in 2024, indicating a substantial increase in debt repayment efforts[258]. Working Capital and Financing - The company may experience liquidity constraints if unable to finance working capital requirements, as significant working capital is needed to support production before receiving customer payments[92]. - The company relies on borrowings under its credit facility to support working capital requirements, and insufficient cash flows may necessitate obtaining additional financing[97]. - The Company entered into a Loan and Security Agreement with Western Alliance Bank on December 12, 2025, providing a revolving line of credit and a term loan, both totaling $10.0 million[165]. - The Company utilized $6,220,722 from the Credit Facilities to fully repay obligations under the previous BankUnited Credit Agreement, terminating it without incurring early termination penalties[166]. - The obligations under the Loan and Security Agreement are secured by a first priority security interest in substantially all of the Company's assets, limiting financing flexibility[141]. Risks and Compliance - Changes in government funding and program priorities can lead to variations in production levels for aerospace and defense programs, adversely affecting revenues[90]. - Contracts with the U.S. Government are subject to audit and oversight, which could lead to unfavorable findings and affect the company's financial condition[98]. - The company faces risks associated with new programs, including design changes and the ability to meet customer specifications, which could materially affect financial results[108]. - Disruptions in the supply chain, including supplier financial difficulties and transportation delays, could adversely affect the company's ability to fulfill contracts[110]. - The funding of U.S. Government programs is subject to congressional budget authorization, which can lead to delays or reductions in appropriations, adversely impacting future sales[99]. - The company faces risks related to subcontractor performance, which could adversely impact contract fulfillment and profitability[111]. Internal Controls and Reporting - Effective internal control over financial reporting is necessary for reliable financial reports; past material weaknesses have been identified[133]. - The Company identified a material weakness in internal control over financial reporting related to ASC-470 – Debt, specifically regarding the classification of debt as short-term due to non-compliance with financial covenants for the Boeing A-10 program[212]. - Management evaluated the effectiveness of internal control over financial reporting and concluded it was effective at the reasonable assurance level as of December 31, 2025[211]. - The Company’s disclosure controls and procedures were deemed effective, providing reasonable assurance that required information is recorded and reported within specified time periods[208]. - There were no changes in internal control over financial reporting during the quarter ended December 31, 2025, that materially affected the controls[219]. Environmental and Regulatory Compliance - The company is subject to strict environmental regulations, which could result in fines and remediation expenses for non-compliance[120]. - The company may face increased scrutiny regarding environmental practices and sustainability initiatives, potentially impacting its reputation and operations[125]. - The company must maintain certain approvals and certifications to manufacture products for aerospace and defense applications; failure to do so could result in loss of business[121]. Tax and NOLs - The company has approximately $68.2 million in federal net operating loss carryforwards (NOLs) as of December 31, 2025, which could reduce future taxable income[136]. - Federal NOLs arising prior to January 1, 2018, totaling about $51.6 million, will expire between 2034 and 2037 if not utilized[137]. - The Company’s ability to utilize NOLs may be limited by ownership changes, which could significantly reduce the value of these tax attributes[138]. Competition and Labor - Intense competition for skilled technicians may increase labor costs, affecting the company's financial condition and operations[112].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Exact name of registrant as specified in its charter) | NEVADA | 47-3892903 | | --- | --- | | State or other jurisdiction | (I.R.S. Employer | | of incorporation or organization | Identification No.) | 218 3 Avenue North, #400 Nashville, Tennessee 37201 (Address of principal executive offices) FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2025 ☐ T ...

Regulatory Approvals and Permits - The company has submitted applications for a commercial recovery permit and two exploration licenses covering a total area of 212,177 square kilometers in the Clarion Clipperton Zone (CCZ), estimated to contain approximately 1.639 billion wet tonnes of mineral resources, including 15.5 million tonnes of nickel, 12.8 million tonnes of copper, 2.0 million tonnes of cobalt, and 345 million tonnes of manganese [612][619]. - The U.S. Executive Order 14825 aims to expedite permitting processes under the Deep Seabed Hard Mineral Resources Act (DSHMRA) to support domestic supply chains for critical minerals derived from seabed resources [613][623]. - NOAA determined that TMC USA's consolidated application is in substantial compliance with applicable requirements, marking a key step in the regulatory process [636]. - The company maintains two ISA exploration contracts in the CCZ, ensuring compliance with contractual obligations while pursuing U.S. regulatory pathways for commercial production [614]. - The company is currently a pre-revenue entity and does not anticipate generating revenue until it receives a commercial recovery permit [650][663]. Financial Performance - The company reported a net loss of $319.8 million for the year ended December 31, 2025, compared to a net loss of $81.9 million in 2024, representing a 290% increase in losses [660]. - General and administrative expenses surged to $99.8 million in 2025, up 226% from $30.6 million in 2024, largely driven by a $63.7 million increase in share-based compensation [673][676]. - Exploration and evaluation expenses for 2025 were $40.3 million, a decrease of 20% from $50.6 million in 2024, primarily due to reduced mining and technological costs [673][674]. - The company has an accumulated deficit of approximately $951.3 million from inception through December 31, 2025 [660]. - Interest income rose to $2.8 million in 2025, compared to $0.2 million in 2024, due to a higher cash balance [681]. Capital and Financing Activities - The company secured a strategic investment of approximately $85.2 million from Korea Zinc, acquiring 19.6 million common shares at $4.34 per share [632]. - The company announced a registered direct offering for $37 million, selling 12,333,333 common shares at $3.00 per share [631]. - The company filed a registration statement to sell up to $100 million of securities, with an additional $100 million registration filed in November 2023 [689]. - The company entered into a 2024 Credit Facility allowing borrowing of up to $25 million, with interest rates based on the 6-month SOFR plus 4.0% per annum [693]. - The company raised gross proceeds of $19.9 million from the sale of 19,900,000 common shares and Class B Warrants in November 2024 [695]. Exploration and Resource Development - The NORI-D Prefeasibility Study declared the world's first mineral reserves for a seafloor polymetallic nodule project, demonstrating economic viability, while the TOML and NORI Initial Assessment provided a concept-level valuation for additional resources [610][618]. - The company holds exploration rights to polymetallic nodule areas in the CCZ through subsidiaries NORI and TOML, covering a total of 149,543 square kilometers [647][648][649]. - TMC USA submitted a consolidated application for an exploration license and commercial recovery permit, increasing the expected commercial recovery area from ~25,000 km² to ~65,000 km², with an estimated resource of 619 million tonnes of wet nodules [635]. - The company is working on developing a commercial offshore nodule collection system and assessing environmental impacts to initiate commercial production [616]. - The pilot nodule collection system is expected to have a targeted production capacity of up to 3.0 million tonnes of wet nodules per year, with costs expected to decrease as production scales up [716]. Environmental and Biodiversity Considerations - A peer-reviewed study confirmed that biodiversity impacts from test mining were confined to mined areas, with a 37% reduction in organisms and a 32% reduction in species richness [629]. - A peer-reviewed study indicated that the seafloor plume from test mining remains low and settles quickly, returning to background levels within 1-2 kilometers [630]. - The company is committed to reducing emissions and is exploring renewable energy options for its operations [654]. - Global inflation has increased exploration expenses, particularly due to high marine fuel prices and offshore labor costs [658]. Strategic Partnerships and Agreements - The company has strategic partnerships with key industry players, including Allseas and PAMCO, to advance the development of nodule processing and refining technologies [615]. - The revised Sponsorship Agreements with Nauru and Tonga ensure continuity benefits for both nations upon the commencement of commercial production under the U.S. regulatory regime [624][625]. - The Exclusive Vessel Use Agreement with Allseas grants exclusive use of the vessel "Hidden Gem" until December 31, 2026, with 4.15 million Common Shares issued in consideration [720]. - DGE has agreed to deliver 50% of the annual quantity of copper and nickel produced from nodules derived from the NORI Area to Glencore at London Metal Exchange referenced market pricing [721]. Management and Organizational Changes - Rutger Bosland joined the company as Chief Innovation and Offshore Technology Officer to lead offshore innovation and scale technologies for commercial production [626]. - The company appointed Michael Hess and Alex Spiro to its Board of Directors to strengthen its strategy for commercial recovery of polymetallic nodules [633].

Results for fiscal year 2025 include the consolidated financial performance of WhiteFiber Inc. (Nasdaq: WYFI), which was a wholly- owned subsidiary prior to its initial public offering on August 6, 2025 and continues to be consolidated following the IPO due to its majority ownership. Following the IPO, Bit Digital continues to hold a majority ownership stake in WhiteFiber, a separately managed public company, with a portion of net income attributable to non-controlling interests. To supplement our consolida ...

Market Conditions - The Baltic Dry Index (BDI) has shown significant volatility, declining from an all-time high of 11,793 in May 2008 to a low of 290 in February 2016, representing a decline of approximately 98%[33]. - As of March 25, 2026, the BDI was reported at 2,001, indicating ongoing fluctuations in the dry bulk charter market[33]. - The dry bulk market remains significantly below historic highs, adversely affecting earnings, revenue, and profitability, as well as compliance with loan covenants[33]. - Recent geopolitical events, including the war in Ukraine, have resulted in increased freight market volatility and uncertainty in shipping operations[34]. - The company faces risks from an oversupply of dry bulk vessel capacity, which may depress charter rates and vessel values[29]. - Demand for dry bulk vessels has decreased, leading to limited employment opportunities and charterers seeking to renegotiate existing time charter rates[35]. - The dry bulk shipping industry is facing widespread loan covenant defaults due to a substantial decrease in vessel values, with some operators declaring bankruptcy[35]. - The global economy is impacted by various geopolitical tensions, including the wars in Ukraine and Israel, which may adversely affect shipping demand and operations[48]. - The market supply of dry bulk vessels has increased due to high levels of new deliveries, with the orderbook extending up to 12.6% of the existing fleet as of March 2026[44]. Financial Risks - The company is almost entirely dependent on index-linked charters, making it vulnerable to decreases in spot freight charter rates[29]. - Rising fuel prices and worldwide inflationary pressures could negatively impact the company's results of operations and cash flows[29]. - Seasonal fluctuations in revenues could affect the company's operating results and ability to service debt or pay dividends[29]. - The company is exposed to U.S. dollar and foreign currency fluctuations, which could harm reported revenue and results of operations[30]. - Economic conditions, including rising inflation and higher interest rates, could negatively impact the company's financial condition and ability to pay dividends[47]. - The volatility of spot charter rates and dry bulk charter indices poses a risk to the company's financial performance, as rates may decline below operating costs[42]. - An oversupply of dry bulk vessel capacity could materially decline charter rates, adversely affecting the company's profitability and cash flows[46]. - The company may incur significant costs due to sulfur regulations aimed at reducing air pollution from ships[30]. - The company may incur impairment losses if vessel values decline, impacting financial results and compliance with loan covenants[113]. - Significant debt levels may impair the company's ability to obtain additional financing for working capital, capital expenditures, or acquisitions[119]. Geopolitical and Regulatory Challenges - The U.S. government announced a baseline tariff of 10% on products imported from all countries in April 2025, with additional tariffs on countries with significant trade deficits, impacting shipping demand[53]. - The U.S. Trade Representative enacted fees targeting Chinese-owned vessels entering U.S. ports, starting at $50 per net ton in October 2025 and increasing to $140 per net ton by 2028[56]. - A separate fee for Chinese-built vessels entering U.S. ports will start at $18 per net ton in October 2025, increasing to $33 per net ton by 2028[57]. - The implementation of new port fees by the U.S. and retaliatory fees by China could significantly increase operating costs for vessels calling at U.S. or Chinese ports[60][62]. - Political instability and international conflicts, including the war in Ukraine, have disrupted supply chains and caused volatility in shipping freight rates, potentially affecting financial conditions[65]. - The ongoing geopolitical tensions may lead to further economic sanctions and trade tariffs, impacting the markets in which the company operates[66]. - Increased operational costs due to rerouting vessels away from conflict zones, such as the Red Sea, may result in higher revenues but also increased insurance costs[69]. - Ongoing geopolitical conflicts, including the war in Ukraine and tensions in the Middle East, may lead to increased economic instability and adversely affect the company's financial condition[70]. Environmental and Compliance Issues - Regulatory measures aimed at reducing greenhouse gas emissions, such as the IMO's sulfur cap and the EU's Emissions Trading Scheme, may impose substantial compliance costs on the company[79][81]. - The EU's FuelEU Maritime Regulation requires a 2% reduction in greenhouse gas intensity of fuel used by covered vessels starting January 1, 2025, with further reductions planned[82]. - Climate change and public concern about its impact may reduce demand for certain cargoes, such as coal, which could adversely affect the company's operations[83]. - The company has implemented measures to improve energy efficiency and reduce CO2 emissions, including trials of biofuels and installation of scrubbers on vessels[89]. - Compliance with sulfur regulations has required retrofitting vessels, with nine vessels equipped with scrubbers and twelve using low sulfur fuel, potentially incurring significant costs[96]. - The company is subject to various environmental laws and regulations that could require significant expenditures and affect cash flows and net income[97]. - Compliance with ballast water discharge regulations may incur substantial costs, impacting profitability, as all vessels have installed treatment systems[99]. - Future climate-related disclosure rules could impose significant compliance costs, adversely affecting future performance and financial position[90]. Operational Challenges - The company faces inherent risks in operating ocean-going vessels, which could result in increased costs or lower revenues due to various factors such as crew illness, environmental accidents, and litigation[71]. - Fuel price increases significantly impact profitability, with recent geopolitical tensions causing volatility in energy markets and potential future cost increases due to new regulations[73]. - Worldwide inflationary pressures have led to increased operating costs and could adversely affect cash flows and the ability to raise charter rates to offset these costs[76]. - Seasonal fluctuations in demand for shipping services may result in quarter-to-quarter volatility in operating results, particularly affecting vessels employed on index-linked charters[78]. - Labor disruptions due to collective bargaining agreement failures could adversely affect operations and earnings[109]. - The company relies on third-party managers for technical and crew management, and any failure in their performance could negatively impact operations[154]. - The operation of vessels carries inherent risks, including damage or loss due to various unforeseen events, which could adversely affect cash flow[141]. - The company may face unexpected repair costs for vessels, which could decrease earnings and reduce future dividends[142]. Financial Management and Shareholder Issues - The company generates all revenues and incurs most operating expenses in U.S. dollars, but general and administrative expenses are incurred in other currencies, primarily the euro, which may affect net income due to currency fluctuations[143]. - The company maintains cash with a limited number of financial institutions, primarily in Europe, which exposes it to credit risk[144]. - The company is a holding company and relies on subsidiaries to distribute funds for financial obligations and dividends, which may be affected by loan covenants and local laws[146]. - The company operates in a highly competitive international shipping industry, facing competition from larger companies with greater resources, which could adversely affect operational results[148]. - The company has been involved in legal proceedings, including a shareholder lawsuit that was dismissed, but such litigation can be costly and time-consuming, potentially affecting financial condition[150]. - Management fees are payable to managers regardless of profitability, which could adversely affect the company's financial condition[159]. - The company may issue additional common shares or equity securities without shareholder approval, potentially diluting existing shareholders' ownership interests[178]. - The company has entered into an ATM Sales Agreement to issue and sell up to $25.1 million of common shares, which could impact share value[179]. - The company may not have the surplus or net profits required by law to pay dividends, and the declaration of dividends is at the discretion of the board of directors[188]. - The Series B Preferred Shares have superior voting rights, allowing their holders to control 49.99% of the voting power, which may limit common shareholders' influence[190][191]. Strategic Developments - The company currently owns or finances 18 Capesize vessels and two Newcastlemax dry bulk vessels, with five newbuilding vessels under construction[127]. - The company has five newbuilding vessels under construction, including four Capesize and one Newcastlemax, while agreeing to sell one Capesize vessel[208]. - The company agreed to acquire two Capesize bulk carriers in 2024 for $33.7 million and $35.6 million, funded with cash on hand and leaseback arrangements[219][220]. - A strategic partnership was established under the SAFeCRAFT Project to utilize Sustainable Alternative Fuels, aiming for a 26% reduction of CO2eq emissions over 48 months[214]. - The board authorized a repurchase plan allowing for the purchase of up to $25.0 million of common shares, convertible notes, and warrants until December 31, 2025[216]. - An ATM Sales Agreement was entered into to issue and sell up to $30 million of common shares, with 577,219 shares sold at an average price of $8.57 per share, resulting in gross proceeds of $4.9 million[217].