Wright Investors Service Holdings, Inc. 10-K

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. Index to the Consolidated Financial Statements Financial Statements of Wright Investors’ Service Holdings, Inc. Page Report of Independent Registered Public Accounting Firm – (PCAOB ID: 274 ) 12 Consolidated Balance Sheets - December 31, 2025 and 2024 13 Consolidated Statements of Operations - Years ended December 31, 2025 and 2024 14 Consolidated Statements of Comprehensive Loss – Years ended December 31, 2025 and 2024 15 Consolidated Statements of Changes in Stockholders’ Equity – Years ended December 31, 2025 and 2024 16 Consolidated Statements of Cash Flows - Years ended December 31, 2025 and 2024 17 Notes to Consolidated Financial Statements 18 11 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Wright Investors' Service Holdings, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Wright Investors' Service Holdings, Inc. (the “Company”) as of December 31, 2025 and 2024, and the related consolidated statements of operations, comprehensive loss, changes in stockholders’ equity, and cash flows for each of the years then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2025 and 2024, and the consolidated results of their operations and their cash flows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America. Going Concern The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has incurred recurring operating losses and negative cash flows from operating activities that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters. We have served as the Company’s auditor since 2004. EISNERAMPER LLP Coral Gables, Florida March 30, 2026 12 Table of Contents WRIGHT INVESTORS' SERVICE HOLDINGS, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share amounts) December 31, 2025 2024 Assets Current assets Cash and cash equivalents $ 33 $ 1,440 Investments 1,267 914 Prepaid expenses and other current assets 78 84 Total current assets 1,378 2,438 Other assets 8 8 Total assets $ 1,386 $ 2,446 Liabilities and stockholders’ equity Current liabilities Accounts payable and accrued expenses $ 79 $ 115 Total current liabilities 79 115 Total liabilities 79 115 Commitments and Contingencies – Note 8 Stockholders’ equity Preferred stock, par value $ 0.01 per share, authorized 10,000,000 shares; none issued Common stock, par value $ 0.01 per share, authorized 30,000,000 shares; issued 21,628,680 as of December 31, 2025 and 2024; outstanding 20,620,711 as of December 31, 2025 and 2024. 216 216 Additional paid-in capital 34,392 34,392 Accumulated deficit ( 31,554 ) ( 30,530 ) Treasury stock, at cost ( 1,007,969 shares at December 31, 2025 and 2024) ( 1,747 ) ( 1,747 ) Total stockholders' equity 1,307 2,331 Total liabilities and stockholders’ equity $ 1,386 $ 2,446 See accompanying notes to consolidated financial statements. 13 Table of Contents WRIGHT INVESTORS' SERVICE HOLDINGS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) Years Ended December 31, 2025 2024 Expenses Compensation and benefits $ 462 $ 452 Other operating 634 627 Total operating expenses 1,096 1,079 Loss from operations ( 1,096 ) ( 1,079 ) Interest and other income, net 72 159 Net loss $ ( 1,024 ) $ ( 920 ) Basic and diluted weighted average common shares outstanding 20,620,711 20,620,711 Basic and diluted loss per share $ ( 0.05 ) $ ( 0.04 ) See accompanying notes to consolidated financial statements. 14 Table of Contents WRIGHT INVESTORS' SERVICE HOLDINGS, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (in thousands) Years Ended December 31, 2025 2024 Net loss $ ( 1,024 ) $ ( 920 ) Other comprehensive loss Unrealized holding gain on available for sale securities - 23 Reclassification adjustment for gains realized in net loss - ( 63 ) Total other comprehensive loss - ( 40 ) Comprehensive loss $ ( 1,024 ) $ ( 960 ) See accompanying notes to consolidated financial statements. 15 Table of Contents WRIGHT INVESTORS' SERVICE HOLDINGS, INC. CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY YEARS ENDED DECEMBER 31, 2025 AND 2024 (in thousands, except per share data) Additional Accumulated other Treasury Total stock- Common stock (Issued) paid – in Accumulated comprehensive stock, at holders shares amount capital deficit income cost equity Balance at December 31, 2023 21,628,680 $ 216 $ 34,392 $ ( 29,610 ) $ 40 $ ( 1,747 ) $ 3,291 Net loss - - - ( 920 ) - - ( 920 ) Other comprehensive loss - - - - ( 40 ) - ( 40 ) Balance at December 31, 2024 21,628,680 $ 216 $ 34,392 $ ( 30,530 ) $ - $ ( 1,747 ) $ 2,331 Net loss - - - ( 1,024 ) - - ( 1,024 ) Balance at December 31, 2025 21,628,680 $ 216 $ 34,392 $ ( 31,554 ) $ - $ ( 1,747 ) $ 1,307 See accompanying notes to consolidated financial statements. 16 Table of Contents WRIGHT INVESTORS' SERVICE HOLDINGS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Years Ended December 31, 2025 2024 Cash flows from operating activities Net loss $ ( 1,024 ) $ ( 920 ) Adjustments to reconcile net loss to net cash used in operating activities: Realized gain on investments - ( 63 ) Changes in other operating items: Prepaid expenses and other current assets 6 13 Accounts payable and accrued expenses ( 36 ) 32 Net cash used in operating activities ( 1,054 ) ( 938 ) Cash flows from investing activities Proceeds from redemptions of investments 248 4,257 Purchase of investments ( 601 ) ( 2,004 ) Net cash (used in) provided by investing activities ( 353 ) 2,253 Net (decrease) increase in cash and cash equivalents ( 1,407 ) 1,315 Cash and cash equivalents at the beginning of the year 1,440 125 Cash and cash equivalents at the end of the year $ 33 $ 1,440 Supplemental disclosures of cash flow information Unrealized loss on available for sale securities $ - $ ( 40 ) See accompanying notes to consolidated financial statements. 17 Table of Contents WRIGHT INVESTORS’ SERVICE HOLDINGS, INC. Notes to Consolidated Financial Statements December 31, 2025 1. Description of activities Wright Investors’ Service Holdings, Inc. (the “Company”) has nominal operations and nominal assets aside from its cash and cash equivalents and investments in money market mutual funds, and is therefore considered a shell company, as defined in U.S. securities laws and regulations. The Company is not engaged in the business of investing, reinvesting, or trading in securities, and it does not hold itself out as being engaged in those activities. The Company intends to evaluate and explore all available strategic options. The Company will continue to work to maximize stockholder value. Such strategic options may include acquisition of an investment advisory business, acquisition of a financial services business, creating partnerships or joint ventures for those or other businesses and investing in other businesses that provide attractive opportunities for growth. The directors will also consider alternatives for distributing some or all of the Company’s cash and cash equivalents, and investments to stockholders. Until such time as a decision is made as to how the liquid assets of the Company are so deployed, the Company intends to invest its liquid assets in high-grade, short- term investments (such as cash and cash equivalents and investments in money market mutual funds) consistent with the preservation of principal, maintenance of liquidity and avoidance of speculation. The Company may be classified as an inadvertent investment company if the Company acquires investment securities in excess of 40% of its total assets (exclusive of government securities, and cash and certain cash equivalents). As of December 31, 2025, the Company is not considered an inadvertent investment company. The Company is not engaged in the business of investing, reinvesting, or trading in securities, and it does not hold itself out as being engaged in those activities. However, under the Investment Company Act of 1940, as amended (the “Investment Company Act”), a company may fall within the scope of being an “inadvertent investment company” under section 3(a)(1)(C) of such Act if the value of the Company’s investment securities (as defined in the Investment Company Act) is more than 40% of the Company’s total assets (exclusive of government securities, and cash and certain cash equivalents). The investment Company Act of 1940 Rule 3a-2 provides a one-year safe harbor from the definition of “investment company” under Section 3(a)(1) for issuers that are temporarily engaged in investing, reinvesting, owning, holding, or trading in securities while they transition to an operating business. The Company is relying on Rule 3a-2 under the Investment Company Act of 1940, which provides a one-year safe harbor from being deemed an “investment company” for issuers that have a bona fide intent to be engaged primarily in a non-investment business as soon as reasonably possible. Going Concern The accompanying financial statements have been prepared on a basis which assumes that the Company will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments in the normal course of business. The Company has suffered recurring losses from operations and negative cash flows from operating activities. At December 31, 2025, the Company had working capital of approximately $ 1,299,000 . At December 31, 2025, the Company had an accumulated deficit of approximately $ 31,554 ,000. The Company held cash and cash equivalents of approximately $ 33 ,000, and investments in money market mutual funds of $ 1,267 ,000, respectively, as of December 31, 2025. The Company believes that its cash resources at December 31, 2025 may not meet its operating expenditure requirements through the first quarter of 2027. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company continues to face significant challenges and uncertainties and intends to evaluate and explore all available strategic options. The Company will continue to work to maximize stockholder value, including a continued evaluation of possible business ventures deemed to provide attractive opportunities for growth. The directors will also consider alternatives for distributing some or all of the Company’s cash and cash equivalents and investments. Until such time as a decision is made as to how its liquid assets are so deployed, the Company intends to invest its liquid assets in high-grade, short-term investments consistent with the preservation of principal, maintenance of liquidity and avoidance of speculation. During the period in which we are seeking to complete such a transaction, substantially all of our assets consist of cash, cash equivalents and/or short-term investments. 2. Summary of significant accounting policies Principles of consolidation . The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, all of which are inactive. All significant intercompany accounts and transactions have been eliminated in consolidation. Use of estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”), requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates. Cash and cash equivalents Cash equivalents represent short-term, highly liquid investments, which are readily convertible to cash and have maturities of three months or less at time of purchase. Cash equivalents do not include money market mutual funds which are classified as investments. Cash and cash equivalents amounted to approximately $ 33 ,000 and $ 1,440 ,000 at December 31, 2025 and 2024, respectively. 18 Table of Contents WRIGHT INVESTORS’ SERVICE HOLDINGS, INC. Notes to Consolidated Financial Statements December 31, 2025 Investment Valuation The Company’s investments in marketable securities consist of investments in equity securities which are money market mutual funds. The Company carries its investments at fair value. Fair value is an estimate of the exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants (i.e., the exit price at the measurement date). Fair value measurements are not adjusted for transaction costs. A fair value hierarchy provides for prioritizing inputs to valuation techniques used to measure fair value into three levels: Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 Inputs other than quoted market prices that are observable, either directly or indirectly, and reasonably available. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the Company. Level 3 Unobservable inputs. Unobservable inputs reflect the assumptions that the Company develops based on available information about what market participants would use in valuing the asset or liability. An asset or liability's level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Availability of observable inputs can vary and is affected by a variety of factors. The Company uses judgment in determining fair value of assets and liabilities and Level 3 assets and liabilities involve greater judgment than Level 1 or Level 2 assets or liabilities. As of December 31, 2025 and December 31, 2024, the Company held investments in equity securities which consist of a money market mutual fund of $ 1,267 ,000 and $ 914 ,000, respectively. Money market mutual funds are valued at the closing price reported by the fund sponsor from an actively traded exchange. Money market mutual funds are categorized in Level 1 of the fair value hierarchy, depending on the unadjusted quoted prices in active markets for identical assets. The Company follows the guidance in ASC 321, “Investments – Equity Securities” (“ASC 321”) for its investments in equity securities with unrealized and realized gains and losses recorded as Interest and other income, net, on the Consolidated Statements of Operations. The following table presents the Company’s financial instruments measured at fair value (in thousands): Fair Value Measurements as of December 31, 2025 Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Investments in Money Market Mutual Funds $ 1,267 $ 1,267 $ - $ - Fair Value Measurements as of December 31, 2024 Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Investments in Money Market Mutual Funds $ 914 $ 914 $ - $ - 19 Table of Contents WRIGHT INVESTORS’ SERVICE HOLDINGS, INC. Notes to Consolidated Financial Statements December 31, 2025 Investments in equity securities as of December 31, 2025 and 2024 are summarized by type below (in thousands). Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Money Market Mutual Funds $ 1,267 - - $ 1,267 Total $ 1,267 $ - $ - $ 1,267 Amortized Cost / Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Money Market Mutual Funds $ 914 - - $ 914 Total $ 914 $ - $ - $ 914 Investment in undeveloped land The Company owns certain non-strategic assets, including an investment in land and certain flowage rights in undeveloped property (the “properties”) primarily located Killingly, Connecticut. The properties were fully impaired as of December 31, 2018. Per share data Loss per share for the year ended December 31, 2025 and 2024, respectively, is calculated based on 20,620,711 weighted average outstanding shares of common stock. Income taxes Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to carryforwards and to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The accounting for uncertain tax positions guidance requires that the Company recognize the financial statement benefit of a tax position only after determining that the Company would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. The Company recognizes interest and penalties on income taxes, including those related to uncertain tax positions as interest and other expenses. The Company had no income tax uncertainties at December 31, 2025 and 2024. Effective January 1, 2025, the Company adopted ASU 2023-09, Improvements to Income Tax Disclosures, which expanded income tax disclosure requirements, including disaggregation of pretax income (loss) and income tax expense (benefit) by jurisdiction and disclosure of income taxes paid (net of refunds received). The Company adopted the standard on January 1, 2025 on a retrospective basis. Accordingly, the tax rate reconciliation and income taxes paid disclosures for the year ended December 31, 2024 has been recast to conform to the current year’s presentation. The adoption affected disclosures only and did not impact the Company’s consolidated financial position, results of operations, or cash flows. In July 2025, the One Big Beautiful Bill Act (Public Law 119-21) was enacted. The Company recognized the income tax effects of the legislation in the period of enactment in accordance with ASC 740. The legislation did not have a material impact on the Company’s consolidated financial statements for the year ended December 31, 2025. The Company will continue to evaluate the impact of the legislation on future periods. 20 Table of Contents WRIGHT INVESTORS’ SERVICE HOLDINGS, INC. Notes to Consolidated Financial Statements December 31, 2025 Concentrations of credit risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and investments. Cash holdings and investments in money market mutual funds are insured up to $ 250,000 per depositor, per insured bank. For the years ended December 31, 2025 and 2024, a substantial portion of the Company’s investments in cash and money market mutual funds are in excess of these limits. Segment Disclosure The Company's operations are reported within one reportable segment and constitutes the Company and its wholly-owned subsidiaries, all of which are inactive, which are reported in the consolidated financial statements. The Company currently has no or nominal operations, no revenues from operations and is considered a shell company, as defined in the U.S. securities laws and regulations. The Company's chief operating decision maker (“CODM”) is the Chief Executive Officer . The CODM evaluates the results and performance of the reporting segment and decides how to allocate resources based on consolidated net loss which is reported on the Consolidated Statements of Operations. Additionally, the measure of segment assets is reported on the Consolidated Balance Sheets as total assets. The accounting policies for the reportable segment are the same as those described above in the summary of significant accounting policies. The expenses and net loss for the one reportable segment are the same as those presented on the Consolidated Statements of Operations. Significant expense categories, including compensation and benefits, other operating expenses, and interest and other income, net are included on the Company's Consolidated Statements of Operations. 3. New accounting standard In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Improvements to Income Tax Disclosures, which requires entities to disclose disaggregated information about their effective tax rate reconciliations as well as expanded information on income taxes by jurisdiction. The standard is effective for fiscal years beginning after December 15, 2024, on a prospective basis. The Company discloses its income tax rate reconciliation in its annual consolidated financial statements only and the adoption, effective January 1, 2025, did not have a material impact on its consolidated financial statements. In November 2024, the FASB issued ASU 2024-03, Income Statement Reporting-Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The standard update improves the disclosures about a public business entity’s expenses by requiring more detailed information about the types of expenses (including compensation and benefits and other operating expenses) included within income statement expense captions. The guidance will be effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The standard will be applied on a prospective basis, with retrospective application permitted. The Company is currently evaluating the impact of adoption of the standard on its financial statement disclosures. 4. Accounts payable and accrued expenses Accounts payable and accrued expenses consist of the following (in thousands): Year Ended December 31, 2025 2024 Accrued professional fees $ 34 $ 15 Other 45 100 Total $ 79 $ 115 5. Income taxes For the years ended December 31, 2025 and 2024, the Company recorded no income tax expense. ASU 2023-09 requires disaggregation of pretax income (loss), income tax expense (benefit), and income taxes paid by jurisdiction. The Company has no foreign operations; accordingly, all pretax income (loss) is domestic (United States). The following table shows the components of loss before income taxes and the related current tax provision benefits (in thousands): Year ended December 31, 2025 2024 Loss before income taxes U.S. operations $ ( 1,024 ) $ ( 920 ) Income tax expense U.S federal - - State - - Total income tax expense $ - $ - 21 Table of Contents WRIGHT INVESTORS’ SERVICE HOLDINGS, INC. Notes to Consolidated Financial Statements December 31, 2025 For the years ended December 31, 2025 and 2024 there were no income taxes paid. As no income taxes were paid, disaggregation by U.S. federal, state, or foreign jurisdictions was not applicable for the period presented. The following table provides a reconciliation of the U.S. statutory federal income tax rate to the Company’s effective income tax rate for the years ended December 31, 2025 and 2024 (in thousands): Year ended December 31, 2025 2024 U.S. federal statutory income tax $ ( 215 ) 21.0 % $ ( 193 ) 21.0 % Change in U.S. federal valuation allowance 210 ( 20.5 )% 180 ( 19.6 )% Nontaxable or nondeductible items: Meals and entertainment 5 ( 0.5 )% 12 ( 1.3 )% Other adjustments: Deferred tax asset adjustments - 0.0 % 1 ( 0.1 )% Income tax expense - 0.0 % - 0.0 % Deferred income taxes reflect the tax effects of the differences between the amounts recorded as assets and liabilities for financial statement purposes and the comparable amounts recorded for income tax purposes. The following table depicts the significant components of the deferred tax assets (liabilities) (in thousands): December 31, 2025 December 31, 2024 Deferred tax assets: Net operating loss carryforwards $ 5,728 $ 5,530 Unrealized loss on investments 93 93 Other 3 3 Gross deferred tax assets 5,824 5,626 Less: valuation allowance ( 5,824 ) ( 5,626 ) Deferred tax assets after valuation allowance - - Net deferred tax assets $ - - The Company accounts for income taxes in accordance with ASC 740, Income Taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial reporting and tax bases of existing assets and liabilities and for net operating loss carryforwards. Deferred tax assets are reduced by a valuation allowance when, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. A valuation allowance is provided when it is more likely than not that some portion of deferred tax assets will not be realized. The valuation allowance increased / (decreased) by approximately $ 198,000 during the year ended December 31, 2025, related to the U.S. federal and New York State jurisdictions in the amounts of $ 210,000 and $( 12,000 ), respectively. The valuation allowance increased by $ 224,000 during the year ended December 31, 2024, related to the U.S. federal and New York State jurisdictions in the amounts of $ 180,000 and $ 44,000 , respectively. The increases in the valuation allowance during the years ended December 31, 2025 and 2024 were mainly due to increases in the net operating loss carryforward. 22 Table of Contents WRIGHT INVESTORS’ SERVICE HOLDINGS, INC. Notes to Consolidated Financial Statements December 31, 2025 The Company files a consolidated U.S. federal tax return and a combined New York State tax return with its subsidiaries. For U.S. federal and New York State income tax purposes, the Company’s 2022 through 2025 tax years remain open for examination by the tax authorities under the normal statute of limitations. As of December 31, 2025, the Company has a U.S. federal net operating loss carryforward of approximately $ 25,335,000 , of which $ 15,177,000 expires from 2031 through 2037 , and $ 10,158,000 does not expire. The Company also has a New York State net operating loss carryforward totaling approximately $ 7,933,000 , which expires between 2026 and 2046 . Approximately $ 1,249,000 of the New York State net operating loss carryforward expired in 2025. Sections 382 and 383 of the Internal Revenue Code, and similar New York State regulations, contain provisions that may limit the net operating loss carryforwards available to be used to offset income in any given year upon the occurrence of certain events, including changes in the ownership interests of significant stakeholders. In the event of a cumulative change in ownership in excess of 50 % over a three-year period, the amount of the net operating loss carryforwards that the Company may utilize in any one year may be limited. The company follows guidance on accounting for uncertainty in income taxes which prescribes a minimum threshold a tax provision is required to meet before being recognized in the financial statements. The Company does not have any liabilities as of December 31, 2025 and 2024 to account for potential income tax exposure. The Company classifies interest expense related to unrecognized tax benefits as components of the income tax expense or benefit. There were no interest and penalties recognized in the consolidated statements of operations. 6. Capital Stock The Company’s Board of Directors, without any vote or action by the holders of common stock, is authorized to issue preferred stock from time to time in one or more series and to determine the number of shares and to fix the powers, designations, preferences and relative, participating, optional or other special rights of any series of preferred stock. The Board of Directors authorized the Company to repurchase up to 5,000,000 outstanding shares of common stock from time to time either in open market or privately negotiated transactions. The Company did not repurchase any common stock during the year ended December 31, 2025 and 2024. At December 31, 2025 and 2024, the Company had repurchased an aggregate of 2,234,721 shares of its common stock and a total of 2,765,279 remained available for repurchase at December 31, 2025 and 2024. 7. Incentive stock plans and stock-based compensation Common stock options The Company adopted a stock-based compensation plan for employees and non-employee members of its Board of Directors in November 2003 (the “2003 Plan”), and the National Patent Development Corporation 2007 Incentive Stock Plan in December 2007 (the “2007 NPDC Plan”). The periods during which additional awards may be granted under the plans have expired and no further awards may be granted under any of these plans after December 20, 2017. As a consequence, any equity compensation awards issued after that time will be on terms determined by the Board of Directors or the Compensation Committee of the Board of Directors and pursuant to exemptions from the registration requirements of the securities laws. As of December 31, 2025 and 2024, all options were vested and there were no outstanding options under the 2007 NPDC Plan. There were no grants, forfeitures or exercises of options during the years ended December 31, 2025 and 2024. 8. Commitments, Contingencies, and Other The Company has interests in land and certain flowage rights in undeveloped property (the “properties”) primarily located in Killingly, Connecticut. The properties were fully impaired as of December 31, 2018. In September 2014, the Connecticut Department of Energy and Environmental Protection (“DEEP”) issued two Consent Orders requiring the investigation and repair of two dams, Acme Pond Dam and Killingly Pond Dam, in which the Company and its subsidiaries have certain ownership interests. Both matters have been fully resolved. In February 2020 and May 2020, DEEP issued to the Company Certificates of Compliance for the Consent Orders relating to Acme Pond Dam and Killingly Pond Dam, respectively. 23 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. None.