What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-03-10 compared with 2025-03-11 · 175 added, 150 removed, 722 unchanged (31% of the section changed)

42 unchanged sentences

As disclosed by management, revenue connected with performance obligations related to product delivery and supportive services are recognized at a point in time.

The Company’s revenue related to current research and development performance obligations is recognized over time, because the customer simultaneously receives and consumes the benefits provided by the services as the Company performs these services.

The Company’s revenue related to current research and development performance obligations as well as certain product supportive services are recognized over time, because the customer simultaneously receives and consumes the benefits provided by the services as the Company performs these services.

Management recognizes revenue related to these services based on the progress toward complete satisfaction of the performance obligation and measures this progress under an input method, which is based on the Company’s cost incurred relative to total estimated costs.

3 unchanged sentences

These procedures also included, among others (i) testing the completeness, accuracy and occurrence of product sales and supportive services revenue recognized for a sample of revenue transactions by obtaining and inspecting source documents, such as contracts, invoices, shipping and delivery documents and subsequent cash receipts;

(ii) for research and development revenue, testing management’s process for determining the estimated costs to completely satisfy each performance obligation for a sample of contracts by (a) comparing the underlying cost estimates to approved contracts or modifications;

(ii) for research and development revenue and certain product supportive services, testing management’s process for determining the estimated costs to completely satisfy each performance obligation for a sample of contracts by (a) comparing the underlying cost estimates to approved contracts or modifications;

(b) comparing the underlying transaction price to original contracts or modifications;

74 unchanged sentences

23,702,156 69,983,274 83,621,165

Gain from change in fair value of warrant liability

Other income, net

24 unchanged sentences

— — — 68,068,826 — 68,068,826

Repurchase of common stock

Issuance of common stock upon exercise of stock options

8,672 — — — — —

Issuance of common stock upon vesting of RSUs

Repurchase of common stock (including excise tax)

( 1,736,822 ) ( 174 ) — ( 11,072,337 ) — ( 11,072,511 )

Issuance of common stock upon exercise of warrants

Issuance of common stock upon vesting of RSUs

144,576 15 ( 15 ) — — —

8 unchanged sentences

— — — 59,214,216 — 59,214,216

Issuance of common stock upon exercise of stock options

Issuance of common stock

49,940 5 ( 5 ) — — —

Repurchase of common stock (including excise tax)

Payment of common stock tendered for employee stock-based compensation tax obligations

( 106,029 ) ( 11 ) ( 799,884 ) — — ( 799,895 )

1 unchanged sentence

369,142 37 ( 37 ) — — —

Payment of common stock tendered for employee stock-based compensation tax obligations

— — ( 214,794 ) — — ( 214,794 )

Cash dividend ($ 0.60 per share)

5 unchanged sentences

— — — 23,279,143 — 23,279,143

Issuance of common stock

49,940 5 ( 5 ) — — —

Payment of common stock tendered for employee stock-based compensation tax obligations

17 unchanged sentences

562,607 538,421 538,293

Gain on change in fair value of warrant liability

— — ( 400,663 )

Stock-based compensation

32 unchanged sentences

( 43,550,292 ) ( 43,464,939 ) ( 43,422,423 )

Net increase/(decrease) in cash and cash equivalents

Net (decrease)/increase in cash and cash equivalents

( 433,848 ) 5,254,418 51,355,222

6 unchanged sentences

$ — $ 462,686 $ —

Conversion of warrant to common stock

$ — $ — $ 6,120,778

Issuance of common stock

23 unchanged sentences

Health Canada approved TPOXX® for the treatment of smallpox.

TPOXX® was authorized under “exceptional circumstances” by the EMA and the MHRA, under the brand name Tecovirimat-SIGA.

These regulators granted marketing authorizations under “exceptional circumstances” because it was not possible to obtain complete efficacy and safety information about the product due to the rarity of smallpox and other orthopoxviruses and because ethical considerations prevented conducting the necessary clinical studies.

The Tecovirimat-SIGA marketing authorizations under “exceptional circumstances” are subject to certain specific obligations to gather additional data post-approval to help confirm the product’s safety and efficacy.

All “exceptional circumstances” marketing authorizations are subject to annual reassessments that consider whether data generated pursuant to the specific obligations continue to confirm its positive benefit-risk profile.

These annual reassessments determine whether the product’s marketing authorization should be maintained, changed, suspended, or withdrawn based on its benefit-risk profile.

On July 24, 2025, the EMA’s Committee for Medicinal Products for Human Use (CHMP) closed its third annual reassessment for Tecovirimat-SIGA and initiated a referral procedure for the product following questions over its effectiveness in the treatment of mpox.

These questions were raised following receipt of results from certain non-SIGA sponsored clinical trials evaluating tecovirimat as a potential mpox treatment including the PALM007 and STOMP clinical trials.

In the referral procedure, CHMP reviewed all available data on the safety and efficacy of Tecovirimat-SIGA for all its authorized indications in order to make a recommendation to the European Commission whether the marketing authorization should be maintained, modified, suspended or withdrawn.

The CHMP is expected to meet in March to issue its recommendation.

The Company expects the CHMP will confirm the positive benefit-risk balance of Tecovirimat-SIGA as a treatment for smallpox, cowpox, and vaccinia complications, and maintain those indications in the product label.

Regarding mpox, based on the results of the mpox clinical trials, the Company expects the CHMP will recommend withdrawal of the mpox indication.

In the UK, Tecovirimat-SIGA is undergoing an annual reassessment by the MHRA.

This reassessment, which is ongoing, is substantially similar to the EMA’s annual reassessment process and could result in a similar outcome.

With respect to the regulatory approvals by the EMA, PMDA, MHRA and Health Canada, oral tecovirimat represents the same formulation approved by the FDA in July 2018 under the brand name TPOXX®.

17 unchanged sentences

The Company has not experienced any losses on its cash accounts and no allowance has been provided for potential credit losses because management believes the potential for losses is remote.

Collection of certain receivables from international government sales are coordinated through the International Promotion Agreement with Meridian Medical Technologies ("Meridian") (see Note 3 ), under which Meridian invoices and collects payments from international customers and remits such collections, less Meridian's fees, to the Company under a quarterly process specified in the International Promotion Agreement.

For sales in certain international jurisdictions, collection of certain receivables from international government sales would be coordinated through the International Promotion Agreement with Meridian Medical Technologies ("Meridian") (see Note 3 ), under which Meridian invoices and collects payments from international customers and remits such collections, less Meridian's fees, to the Company under a quarterly process specified in the International Promotion Agreement.

Accounts Receivable

1 unchanged sentence

At December 31, 2025 and 2024 , 75 % and 45 %, respectively, of accounts receivable represent receivables from the U.S.

At December 31, 2024 , most of the remaining balance in accounts receivable represent receivables from international sales, which include sales to two European governments and a government in the Asia Pacific region.

An allowance for doubtful accounts is based on specific analysis of the receivables.

5 unchanged sentences

Inventory is evaluated for impairment periodically to identify inventory that may expire prior to expected sale or has a cost basis in excess of its net realizable value.

If certain batches or units of product do not meet quality specifications or become obsolete due to expiration, the Company records a charge to write down such unmarketable inventory to its net realizable value.

If certain batches or units of product do not meet quality specifications or become obsolete due to expiration or inability to meet customer minimum shelf-life requirements, the Company records a charge to write down such unmarketable inventory to its net realizable value.

Property, Plant and Equipment

Property, plant and equipment are stated at cost, net of accumulated depreciation.

Aside from manufacturing equipment noted below, property, plant and equipment are stated at cost, net of accumulated depreciation.

Depreciation and amortization are provided on a straight-line method over the estimated useful lives of the various asset classes.

5 unchanged sentences

Maintenance, repairs and minor replacements are charged to expense as incurred.

Warrant Liability

The Company accounted for warrants in accordance with the authoritative guidance which requires that free-standing derivative financial instruments with certain cash settlement features be classified as assets or liabilities at the time of the transaction, and recorded at their fair value.

Fair value was estimated using model-derived valuations.

Any changes in the fair value of the derivative instruments were reported in earnings or loss as long as the derivative contracts were classified as assets or liabilities.

During 2022, the warrant was fully exercised and therefore there were no remaining underlying shares as of December 31, 2022.

The following table presents changes in the liability-classified warrant:

Fair Value of liability-classified warrant

Warrant liability at December 31, 2021

Decrease in fair value of warrant liability

Exercise of warrants

( 6,120,778 )

Warrant liability at December 31, 2022

The Company purchased manufacturing equipment during Q3 2025.

Depreciation on the manufacturing equipment will be calculated using the units of production method if and when the Company receives FDA approval for the associated manufacturing site.

Revenue Recognition

4 unchanged sentences

As of December 31, 2025 , the Company's active performance obligations, for the contracts outlined in Note 3 , consist of the following:

four performance obligations relate to research and development services;

and four relate to manufacture and delivery of product.

three performance obligations relate to research and development services;

and one relates to manufacture and delivery of product.

Contract modifications may occur during the course of performance of our contracts.

3 unchanged sentences

A portion of the Company’s revenue is derived from long-term contracts that span multiple years.

All of the Company’s revenue related to current research and development performance obligations is recognized over time, because the customer simultaneously receives and consumes the benefits provided by the services as the Company performs these services.

All of the Company’s revenue related to current research and development performance obligations as well as certain product supportive services are recognized over time, because the customer simultaneously receives and consumes the benefits provided by the services as the Company performs these services.

The Company recognizes revenue related to these services based on the progress toward complete satisfaction of the performance obligation and measures this progress under an input method, which is based on the Company’s cost incurred relative to total estimated costs.

23 unchanged sentences

Generally, amounts are billed as work progresses in accordance with agreed-upon contractual terms either at periodic intervals (monthly) or upon achievement of contractual milestones.

as of December 31, 2024 , the accounts receivable balance in the balance sheet includes approximately $ 0.5 million of unbilled receivables.

Under typical payment terms of fixed price arrangements, the customer pays the Company either performance-based payments or progress payments.

25 unchanged sentences

Share-based Compensation

Stock-based compensation expense for all share-based payment awards made to employees and directors is determined on the grant date;

for option awards, fair value was estimated using the Black-Scholes model.

These compensation costs are recognized net of an estimated forfeiture rate over the requisite service periods of the awards.

Forfeitures are estimated on the date of the respective grant and revised if actual or expected forfeiture activity differs from original estimates.

The fair value of restricted stock unit ("RSU") awards is determined by the value of our common stock and is recognized based on the portion of the requisite service period satisfied as of each valuation date.

The Company measures all stock-based awards granted to employees and directors based on the fair value on the date of the grant and recognizes the corresponding compensation expense of those awards over the requisite service period, which is generally the vesting period of the respective award.

Over the past three years, the Company has issued stock options, restricted stock units (“RSU’s”) and performance or market condition share awards ("PSU’s").

Stock options and RSUs only have service-based vesting conditions, and the Company records the expense for these awards using the straight-line method.

PSUs may have multiple tranches, each with certain performance conditions or market capitalization or stock price milestones and service-based vesting conditions.

In the event a performance condition for a specific tranche is unknown, the Company will not consider the awards associated with that specific tranche granted until the performance condition is known.

Once a performance condition is known for a PSU, the Company will record expense for these awards over the remaining service period once it is estimated that at least a portion of the performance condition will be met.

The fair value of each stock option grant is determined using the Black-Scholes option-pricing model, which uses as inputs the fair value of our common stock and assumptions we make for the volatility of its common stock, the expected term of the stock options, the risk-free interest rate for a period that approximates the expected term of the stock options and the expected dividend yield.

The fair value of RSU awards is determined by the value of our common stock and is recognized based on the portion of the requisite service period satisfied as of each valuation date.

The fair valuation of the cash-settled awards changes based on changes in our common stock price.

1 unchanged sentence

Increases (or decreases) in accrued expenses result in adjustments to earnings for the associated valuation updates.

The fair value of performance based restricted stock unit (“PSU”) awards are based on targets of our stock price.

The Company uses a Monte Carlo simulation through a third party on the date of grant to estimate the fair value of the PSUs that are based on market conditions, or market-based PSUs.

The compensation expense for PSUs is recognized using an accelerated amortization model.

The fair value of the PSUs is estimated based on the conditions of the award.

Market based awards are valued using a Monte-Carlo valuation simulation through a third party.

Similar to stock options, the Company makes assumptions for the volatility of its common stock, the expected term of the PSUs, the risk-free interest rate for a period that approximates the expected term of the PSUs and the expected dividend yield.

The compensation expense for these types of PSUs is recognized using an accelerated amortization model.

Performance based PSU awards, once the performance condition is known, are valued at each reporting period, and the amount of stock-based compensation expense is based on the probability of achievement against the pre-established performance measures and if necessary, a cumulative catch-up adjustment for expense is recorded to reflect any revised estimates regarding the probability of achievement.

The Company recognizes income taxes utilizing the asset and liability method of accounting for income taxes.

11 unchanged sentences

Basic earnings per share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding during the period.

Diluted earnings per share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding during the period, assuming potentially dilutive common shares from option exercises, RSUs, warrants and other incentives had been issued and any proceeds received in respect thereof were used to repurchase common stock at the average market price during the period.

The assumed proceeds used to repurchase common stock is the sum of the amount to be paid to the Company upon exercise of options and warrants and the amount of compensation cost attributed to future services not yet recognized.

Diluted earnings per share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding during the period, assuming potentially dilutive common shares from option exercises, RSUs, and other incentives had been issued and any proceeds received in respect thereof were used to repurchase common stock at the average market price during the period.

The assumed proceeds used to repurchase common stock is the sum of the amount to be paid to the Company upon exercise of options and the amount of compensation cost attributed to future services not yet recognized.

Fair Value of Financial Instruments

24 unchanged sentences

Recent Accounting Pronouncements

In December 2023, the FASB issued ASU 2023 - 09, which requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation, and modifies other income tax-related disclosures.

ASU 2023 - 09 is effective for fiscal years beginning after December 15, 2024, may be applied prospectively or retrospectively, and allows for early adoption.

These requirements are not expected to have an impact on our consolidated financial statements, but will impact our income tax disclosures.

In December 2023, the FASB issued ASU No.

2023 - 09, “Income Taxes (Topic 740 ):

Improvements to Income Tax Disclosures” (“ASU 2023 - 09” ).

ASU 2023 - 09 requires more disaggregated income tax disclosures, including (i) the income tax rate reconciliation using both percentages and reporting currency amounts;

(ii) specific categories within the income tax rate reconciliation;

(iii) additional information for reconciling items that meet a quantitative threshold;

(iv) the composition of state and local income taxes by jurisdiction;

and (v) the amount of income taxes paid disaggregated by jurisdiction.

ASU 2023 - 09 became effective for our fiscal year ending December 31, 2025 and the Company applied the amendments retrospectively to all prior periods presented in our consolidated financial statements.

See Note 10 – Income Taxes.

In November 2024, the FASB issued ASU 2024 - 03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220 - 40 ):

9 unchanged sentences

In addition to the delivery of TPOXX® courses, the contract includes funding from BARDA for a range of activities, including:

advanced development of IV TPOXX®, post-marketing activities for oral and IV TPOXX®, development for a pediatric formulation, and procurement activities.

advanced development of IV TPOXX®, post-marketing activities for oral and IV TPOXX®, development of a pediatric formulation, support for manufacturing activities, and procurement activities.

On April 8, 2025, total payments contemplated under the contract with BARDA were increased by $ 14.3 million to add funding for activities supporting manufacturing.

On June 3, 2025, total payments contemplated under the contract with BARDA were increased by $ 13.2 million in connection with the development of the pediatric formulation of TPOXX®.

As of December 31, 2025 , the contract with BARDA (as amended, modified, or supplemented from time to time, the "19C BARDA Contract") contemplates up to approximately $ 630 million of payments, of which approximately $ 79.2 million of payments are included within the base period of performance, approximately $ 545.2 million of payments are related to exercised options, and up to approximately $ 5.6 million of payments are currently specified as unexercised options.

13 unchanged sentences

payments up to $ 450.2 million for the manufacture and delivery of up to 1.5 million courses of oral TPOXX®;

payments up to $ 51.2 million for the manufacture of courses of IV FDP, of which $ 20.5 million of payments relate to the manufacture of IV BDS to be used in the manufacture of IV FDP;

payments up to $ 76.8 million for the manufacture of courses of IV FDP;

payments of up to approximately $ 3.6 million to fund post-marketing activities for IV TPOXX®;

and payments of up to $ 14.6 million for funding of post-marketing activities for oral TPOXX®.

As of December 31, 2024 , a cumulative total of $ 396.9 million of oral TPOXX® has been delivered to the Strategic Stockpile and accepted, of which approximately $ 15 million was delivered in the first quarter of 2024, approximately $ 8 million was delivered in the third quarter of 2024, and approximately $ 51 million was delivered in the fourth quarter of 2024;

a cumulative total of $ 25.4 million of IV FDP has been delivered to the Strategic Stockpile and accepted, of which approximately $ 17 million of revenue (including recognition of deferred revenue) was recorded in the second quarter of 2024 and approximately $ 8 million of revenue (including recognition of deferred revenue) was recorded in the fourth quarter of 2024;

$ 10.3 million has been received for the manufacture of IV BDS (such amount is recorded as deferred revenue);

As of December 31, 2025 , a cumulative total of $ 450.2 million of oral TPOXX® has been delivered to the Strategic Stockpile and accepted;

a cumulative total of $ 61.4 million of IV BDS or IV FDP has been either set aside in inventory or delivered to the Strategic Stockpile and accepted (IV BDS that has been set aside has been recorded as deferred revenue and will be recognized as revenue when the IV BDS is manufactured as IV FDP and delivered);

and the Company has been cumulatively reimbursed $ 10.9 million in connection with post-marketing activities for oral and IV TPOXX®.

Unexercised options specify potential payments up to approximately $ 31.2 million in total (if all such options are exercised), of which approximately $ 5.6 million relates to supportive activities that we currently do not expect to be required.

The remaining unexercised options specify payments of up to $ 25.6 million for the manufacture of courses of IV FDP, of which up to $ 10.2 million of payments would be paid upon the manufacture of IV BDS to be used in the manufacture of IV FDP.

The options related to IV TPOXX® are divided into two primary manufacturing steps.

There are options related to the manufacture of bulk drug substance (“IV BDS Options”), and there are corresponding options (for the same number of IV courses) for the manufacture of final drug product (“IV FDP Options”).

BARDA may choose to exercise any, all, or none of these options in its sole discretion.

The 19C BARDA Contract includes:

Unexercised options specify potential payments up to approximately $ 5.6 million in total (if all such options are exercised), all of which relates to supportive activities that we currently do not expect to be required.

The options related to IV TPOXX® were divided into two primary manufacturing steps.

There were options related to the manufacture of bulk drug substance (“IV BDS Options”), and there were corresponding options (for the same number of IV courses) for the manufacture of final drug product (“IV FDP Options”).

BARDA had the sole discretion to choose to exercise any, all, or none of these options.

The 19C BARDA Contract included:

three separate IV BDS Options, each providing for the bulk drug substance equivalent of 32,000 courses (as currently defined within the contract) of IV TPOXX®;

and three separate IV FDP Options, each providing for 32,000 courses of final drug product of IV TPOXX®.

BARDA has the sole discretion as to whether to simultaneously exercise IV BDS Options and IV FDP Options, or whether to exercise options at different points in time (or alternatively, to only exercise the IV BDS Option but not the IV FDP Option).

To date, BARDA has exercised two of the three IV BDS options and two of the three IV FDP options.

If BARDA decides only to exercise the remaining IV BDS Option, then the Company would receive payments up to $ 10.2 million;

alternatively, if BARDA decides to exercise the remaining IV BDS Option and IV FDP Option, then the Company would receive payments up to $ 25.6 million.

BARDA may also decide not to exercise either remaining option.

For each set of options relating to a specific group of courses (for instance, the IV BDS and IV FDP options that reference the same 32,000 courses), BARDA has the option to independently purchase IV BDS or IV FDP.

BARDA had the sole discretion as to whether to simultaneously exercise IV BDS Options and IV FDP Options, or whether to exercise options at different points in time (or alternatively, to only exercise the IV BDS Option but not the IV FDP Option).

To date, BARDA has exercised all three IV BDS options and all three IV FDP options.

Revenues in connection with the 19C BARDA Contract are recognized either over time or at a point in time.

5 unchanged sentences

In 2024, the Company had sales of approximately $ 10 million with the U.S.

Department of Defense ("DoD").

Sales consist mostly of delivery of oral TPOXX®, with a minor amount of IV TPOXX® delivered.

In 2023, the Company had sales of approximately $ 11 million with the DoD.

Sales consist of delivery of oral TPOXX®.

Over the past three years, the Company has received three procurement contracts from the DoD, including a $ 9 million contract in August 2024, which has been fulfilled.

Department of Defense ("DoD") (also known as the Department of War).

Sales consisted mostly of delivery of oral TPOXX®, with a minor amount of IV TPOXX® delivered.

Over the past four years, the Company has received three procurement contracts from the DoD, totaling $ 28 million in value, mostly in connection with the manufacture and delivery of oral TPOXX®.

All deliveries specified under these contracts have been fulfilled.

International Sales Activity

In the year ended December 31, 2024 , the Company had international sales of $ 23.0 million consisting of deliveries of oral TPOXX® to 13 countries.

For international sales in the first and second quarters, Meridian was the counterparty to contracts under which the sales were made (see discussion and definition below regarding International Promotion Agreement).

For international sales in the third and fourth quarters, the Company was the counterparty to the contracts under which the sales were made.

In the year ended December 31, 2023 , the Company delivered, and received acceptance for, approximately $ 21.3 million of oral TPOXX® to five European countries, one Middle Eastern country, and one Asia Pacific country.

Meridian was the counterparty to international contracts under which these sales were made (see discussion and definition below regarding International Promotion Agreement).

Revenue in connection with international procurement contracts for the delivery of product are recognized at a point in time on a gross basis, as the Company acts as the principal in the transaction.

During the year ended December 31, 2024 , the Company recognized $ 23.0 million of sales in connection with international contracts.

During the year ended December 31, 2025 , the Company recognized $ 5.8 million of sales in connection with international contracts for which the Company was the counterparty to the contract.

During the year ended December 31, 2024 , the Company recognized $ 23.0 million of sales in connection with international contracts.

For international sales in the first and second quarters of 2024, Meridian was the counterparty to contracts under which the sales were made.

For international sales in the third and fourth quarters of 2024, the Company was the counterparty to the contracts under which the sales were made.

International Promotion Agreement

10 unchanged sentences

Subsequent to June 1, 2024, only specified procurement contracts for the Current Territory entered into prior to June 1, 2024, continue to involve Meridian invoicing and collecting proceeds, and retaining a fee pursuant to the International Promotion Agreement.

Research Agreements and Grants

In July 2019, the Company was awarded a multi-year research contract ultimately valued at approximately $ 27 million from the DoD to support work in pursuit of a potential label expansion for oral TPOXX® that would include post-exposure prophylaxis ("PEP") of smallpox (such work known as the "PEP Label Expansion Program" and the contract referred to as the "PEP Label Expansion R&D Contract").

As of December 31, 2023 , the Company invoiced the full amount of available funding, and as a result, there is no remaining revenue to be recognized in the future under the PEP Label Expansion R&D Contract.

Revenue from the performance obligation under the PEP Label Expansion R&D Contract was recognized over time using an input method using costs incurred to date relative to total estimated costs at completion.

For the year ended December 31, 2023 , the Company, under the PEP Label Expansion R&D Contract, recognized revenue of $ 6.4 million on an over time basis.

Contracts and grants include, among other things, options that may or may not be exercised at the U.S.

Government’s discretion.

Moreover, contracts and grants contain customary terms and conditions including the U.S.

Government’s right to terminate or restructure a contract or grant for convenience at any time.

As such, the Company may not be eligible to receive all available funds.

Inventory consisted of the following:

8 unchanged sentences

$ 49,054,873 $ 49,563,880

During the years ended December 31, 2025, 2024 and 2023 , the Company wrote down approximately $ 1.8 million, $ 0.5 million, and $ 0.5 million, respectively, of inventory.

In addition, during the years ended December 31, 2025 and 2024 , the Company recognized recoveries of approximately $ 0.5 million, and $ 0.2 million, respectively, from a contract manufacturing organization associated with previous losses of inventory.

The Company did not recognize any recoveries for previous losses of inventory during the year ended December 31, 2023 .

Property, Plant and Equipment

8 unchanged sentences

314,434 347,045

Manufacturing Equipment

Operating lease right-of-use asset

5 unchanged sentences

$ 1,090,824 $ 1,298,423

Depreciation and amortization expense on property, plant, and equipment was $ 0.5 million for each of the years ended December 31, 2024 , 2023 , and 2022 .

Depreciation and amortization expense on property, plant, and equipment was $ 0.6 million for the year ended December 31, 2025 , and $ 0.5 million for each of the years ended December 31, 2024 and 2023 .

Accrued Expenses

3 unchanged sentences

$ 3,302,176 $ 637,750

Professional fees

696,110 2,160,177

Accrued dividends on unvested equity property

674,865 269,720

Lease liability , current portion

2 unchanged sentences

583,055 446,412

Professional fees

423,803 1,473,956

10 unchanged sentences

$ 23,279,143 $ 59,214,216 $ 68,068,826

Change in fair value of warrants

Net income, adjusted for change in fair value of warrants for diluted earnings per share

$ 59,214,216 $ 68,068,826 $ 33,504,143

Weighted-average shares

9 unchanged sentences

For the years ended December 31, 2025 , December 31, 2024 and December 31, 2023 , weighted-average diluted shares include the dilutive effect of in-the-money options and stock-settled RSUs.

For the year ended December 31, 2022 , the diluted earnings per share calculation also reflects the effect of the exercise or assumed exercise of outstanding warrants and any corresponding elimination of the impact included in operating results from the change in fair value of the warrants.

The dilutive effect of warrants, stock-settled RSUs and options is calculated based on the average share price for each fiscal period using the treasury stock method.

The dilutive effect of stock-settled RSUs and options is calculated based on the average share price for each fiscal period using the treasury stock method.

Under the treasury stock method, the amount the employee must pay for exercising stock options, the average amount of compensation cost for future service that the Company has not yet recognized, and the amount of tax benefits that would be recorded in additional paid-in capital when the award becomes deductible, are collectively assumed to be used to repurchase shares.

Cash-settled RSUs were presumed to be cash-settled and therefore excluded from the diluted earnings per share calculations for the years ended December 31, 2025, 2024 and 2023 because the net effect of their inclusion, including the elimination of the impact in the operating results of the change in fair value of these RSUs, would have been anti-dilutive.

For the years ended December 31, 2024, 2023 and 2022 , the weighted average number of shares under the cash-settled RSUs excluded from the calculation of diluted earnings per share was 48,642 , 32,660 , and 17,388 , respectively.

Performance-based RSUs were excluded from the diluted earnings per share calculations for the year ended December 31, 2025 , as a result of the associated metrics/contingencies not being achieved.

For the years ended December 31, 2025, 2024 and 2023 , the weighted average number of shares under the cash-settled RSUs and performance-based RSUs excluded from the calculation of diluted earnings per share was 284,205 , 48,642 , and 32,660 , respectively.

Stockholders’ Equity

13 unchanged sentences

On December 31, 2023, the Repurchase Authorization expired.

As a result, during the year ended December 31, 2024 , the Company did not repurchase any shares.

During the year ended December 31, 2023 , the Company repurchased approximately 1.7 million shares of common stock under the Repurchase Authorization for approximately $ 11.0 million.

In addition, during the year ended December 31, 2023 , the Company recorded approximately $ 0.1 million of excise tax associated with the repurchase of common stock.

On March 12, 2024, the Board of Directors declared a special dividend of $ 0.60 per share on the common stock of the Company, which resulted in an overall dividend payment of approximately $ 43 million.

The special dividend was paid on April 11, 2024 to shareholders of record at the close of business on March 26, 2024.

On April 8, 2025, the Board of Directors declared a special dividend of $ 0.60 per share on the common stock of the Company, which resulted in an overall dividend payment of approximately $ 43 million.

The special dividend was paid on May 15, 2025 to shareholders of record at the close of business on April 29, 2025.

Stock Compensation Plans

6 unchanged sentences

however, stock options may not be exercisable more than ten years after the date of grant as the maximum term of equity awards issued under the 2010 Plan is ten years.

For the years ended December 31, 2024, 2023 and 2022 , the Company recorded stock-based compensation expense, including stock options and RSUs, of approximately $ 3.6 million, $ 2.1 million and $ 1.8 million, respectively.

For the years ended December 31, 2025, 2024 and 2023 , the Company recorded stock-based compensation expense, including stock options, PSUs, and RSUs, of approximately $ 3.7 million, $ 3.6 million and $ 2.1 million, respectively.

Stock Options

9 unchanged sentences

Risk-free Interest Rate

4.1 % - 4.2 %

75.3 % - 75.8 %

Dividend Yield

4 unchanged sentences

Canceled/Expired

( 29,049 ) 7.99

Outstanding at December 31, 2025

12 unchanged sentences

Restricted Stock Units

RSUs (including PSUs) awarded to employees vest on schedules of between one year and three years, and RSUs awarded to directors of the Company vest over a one -year period.

RSUs awarded to employees vest on schedules of between one year and three years, and RSUs awarded to directors of the Company vest over a one -year period.

A summary of the Company’s RSU activity is as follows:

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The weighted average fair value at the date of grant for restricted stock awards granted during the years ended December 31, 2025 , 2024 and 2023 was $ 5.66 , $ 5.51 and $ 6.14 per share, respectively.

Based on the grant date, the total fair value of restricted stock and restricted stock units vested and released during the years ended December 31, 2024, 2023 and 2022 was approximately $ 2.6 million, $ 1.9 million and $ 1.2 million, respectively.

The Company's provision (benefit) for income taxes comprises the following:

The total fair value of restricted stock and restricted stock units vested and released during the years ended December 31, 2025, 2024 and 2023 was approximately $ 2.0 million, $ 2.6 million and $ 1.9 million, respectively.

Restricted Stock Units with a Performance or Market Condition

In the year ended December 31, 2025 , the Company issued PSUs to certain executives, which provided the right to receive shares of common stock, upon achievement of performance milestones to be determined and service over a three -year performance period ending March 2027.

A total of 387,762 PSUs were awarded with 1/3 being based on the achievement of a performance condition within the period of one year from issuance.

The performance conditions for the remaining 2/3 of the 2025 award will be determined at a future date.

The PSUs that are conditionally earned will become vested if the executive remains in service with the Company through the third anniversary of the issuance date.

The annual performance conditions are established in March of each year.

Therefore, in accordance with ASC 718, Compensation – Stock compensation, the grant date (and fair value measurement date) for each Tranche Year is the date in March of each year when a mutual understanding of the key terms and conditions are reached.

At each reporting period, the amount of stock-based compensation is determined based on the probability of achievement against the pre-established performance measures and if necessary, a cumulative catch-up adjustment is recorded to reflect any revised estimates regarding the probability of achievement.

The following table summarizes the unvested performance or market condition stock unit activity for the year ended December 31, 2025:

Outstanding at January 1, 2025

139,338 $ 3.54

Vested and released

( 6,920 ) 7.20

Canceled/Expired

Outstanding at December 31, 2025 (1)

261,672 $ 4.39

( 1 ) excludes 258,508 awards which were not considered granted as the performance condition is not known.

As of December 31, 2025 , there is no remaining unrecognized stock-based compensation cost related to PSUs outstanding to be recognized.

The weighted average fair value at the date of grant for PSUs granted during the years ended December 31, 2025 and 2024 was $ 5.45 and $ 3.35 per share, respectively.

There were no PSUs granted during the year ended December 31, 2023 .

The total fair value of PSUs vested and released during the years ended December 31, 2025 and 2024 was approximately $ 0.1 million, and $ 0.4 million, respectively.

The components of income before provision for income taxes are as follows:

For the year ended December 31,

$ 30,332,374 $ 76,037,694 $ 87,700,647

49,646 32,696 76,026

Income before income taxes

$ 30,382,020 $ 76,070,390 $ 87,776,673

The provision for income taxes consists of the following:

For the year ended December 31,

Current Tax Expense:

$ 401,196 $ 16,526,685 $ 23,698,658

State and local

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10,924 4,260 14,445

Total current provision

Total current tax expense

$ 676,695 $ 16,662,758 $ 24,505,580

Deferred Tax Expense (Benefit):

$ 6,423,013 $ 294,028 $ ( 4,711,556 )

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3,169 ( 100,612 ) ( 86,177 )

Total deferred provision (benefit)

Total deferred tax expense (benefit)

$ 6,426,182 $ 193,416 $ ( 4,797,733 )

Total provision

Total provision for income taxes

$ 7,102,877 $ 16,856,174 $ 19,707,847

The Company’s deferred tax assets and liabilities comprise the following:

As of December 31,

Deferred income tax assets:

The effective income tax rate differs from the federal statutory income tax rate of 21 % as follows:

For the year ended December 31,

Amount Percent Amount Percent Amount Percent

Federal Statutory Rate

$ 6,380,224 21.0 % $ 15,974,780 21.0 % $ 18,433,101 21.0 %

State Income Taxes, net of Federal Effect (1)

129,342 0.4 % 75,573 0.1 % 53,680 0.1 %

Nontaxable or nondeductible items:

Executive compensation

701,870 2.3 % 1,122,154 1.5 % 389,494 0.4 %

( 57,828 ) -0.2 % 203,399 0.3 % 279,437 0.3 %

Effect of cross-border tax laws

( 134,354 ) -0.4 % ( 466,620 ) -0.6 % — 0.0 %

Changes in unrecognized tax benefits

82,826 0.3 % ( 50,506 ) -0.1 % 504,052 0.6 %

299 0.0 % — 0.0 % 49,604 0.1 %

Foreign Tax Effects

498 0.0 % ( 2,606 ) 0.0 % ( 1,521 ) 0.0 %

$ 7,102,877 23.4 % $ 16,856,174 22.2 % $ 19,707,847 22.5 %

( 1 ) State income taxes in Oregon and Texas comprise the majority (greater than 50% ) of the tax effect in this category.

Deferred income taxes reflect the net tax effects of loss and credit carryforwards and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

Significant components of our deferred tax assets for federal and state income taxes are as follows:

For the year ended December 31,

Deferred Tax Assets:

State Net operating losses

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687,598 85,716

Amortization of intangible assets

Share-based compensation

Shared-based compensation

461,581 539,738

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522,739 500,726

Deferred income tax assets

Deferred tax assets before valuation allowance

$ 5,855,380 $ 12,276,619

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( 918,818 ) ( 921,456 )

Deferred income tax assets, net of valuation allowance

Total deferred tax assets, net of valuation allowance

$ 4,936,562 $ 11,355,163

Deferred income tax liabilities:

Deferred Tax Liabilities:

Amortization of goodwill

( 203,042 ) ( 194,093 )

Property, plant and equipment

( 305,001 ) ( 306,368 )

Deferred income tax asset, net

Total deferred tax liabilities

$ ( 508,043 ) $ ( 500,461 )

The recognition of a valuation allowance for deferred taxes requires management to make estimates and judgments about the Company’s future profitability which is inherently uncertain.

The Company assesses all available positive and negative evidence to determine if its existing deferred tax assets are realizable on a more-likely-than- not basis.

In making such assessment, the Company considered the reversal of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operating results.

The ultimate realization of a deferred tax asset is ultimately dependent on the Company's generation of sufficient taxable income within the available net operating loss carryback and/or carryforward periods to utilize the deductible temporary differences.

As of December 31, 2024 , the Company maintains a full valuation on its state and local net operating losses which the Company determined were not realizable on a more-likely-than- not basis.

The Company's valuation allowance decreased by approximately $ 22,000 during the year ended December 31, 2024 .

The benefit for income taxes differs from the expected amount calculated by applying the Company's statutory rate to the income or loss before benefit for income taxes as follows:

As of December 31,

Statutory federal income tax rate

Net deferred tax assets (liabilities)

$ 4,428,519 $ 10,854,702

State and local taxes

The Company's valuation allowance decreased by $ 2,638 during the year ended December 31, 2025 .

Income taxes paid, net of refunds received consisted of the following:

For the year ended December 31,

$ 8,000,300 $ 30,254,812 $ 3,347,492

Change in fair value of common stock warrant

Section 162(m) limitation

State and Local

187,836 94,579 145,032

12,837 8,356 8,349

Effective tax rate

Net cash paid for income taxes

$ 8,200,973 $ 30,357,747 $ 3,500,873

For the years ended December 31, 2024, 2023 and 2022 , the Company’s effective tax rate differs from the statutory rate of 21 % primarily as a result of certain permanent differences including non-deductible executive compensation under IRC Section 162 (m), stock-based compensation related items, state and local taxes, and other items.

A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding interest and penalties, is as follows:

For the year ended December 31,

Balance at beginning of year

Beginning Balance

$ 4,692,629 $ 5,081,610 $ 5,103,548

Tax positions related to the current and prior years:

4,133 51,227 —

Lapses in applicable statutes of limitation

— — ( 17,096 )

Balance at the end of the year

Lapses in statutes of limitations

( 998,649 ) ( 440,208 ) ( 4,842 )

Included in the balance of unrecognized tax benefits as of December 31, 2024 , are potential benefits of $ 4.7 million that, if recognized, would affect the effective tax rate.

The total amount accrued for interest and penalties as of December 31, 2024 and December 31, 2023 , was $ 315,000 and $ 214,000 , respectively.

For the years ended December 31, 2024 and December 31, 2023 , the Company recorded an income tax expense of $ 101,000 and $ 142,000 , respectively, related to the accrual of interest and penalties.

There are no uncertain tax positions for which it is reasonably possible that the total amounts of unrecognized benefits will significantly increase or decrease within twelve months from December 31, 2024 .

The Company files federal income tax returns and income tax returns in various state and local tax jurisdictions.

Ending Balance

$ 3,698,113 $ 4,692,629 $ 5,081,610

During the years ended December 31, 2025 and 2024 , the Company recorded an income tax expense of $ 431,000 and $ 101,000 , respectively, related to the accrual of interest and penalties.

On July 4, 2025, President Trump signed OBBBA into law.

The OBBBA makes permanent many of the provisions previously enacted as part of the 2017 Tax Cut and Jobs Act that were set to expire at the end of 2025 and includes other changes to certain U.S.

corporate tax provisions including the restoration of immediate expensing for domestic research and development expenditures and the reinstatement of 100% bonus depreciation for qualified property.

In accordance with the authoritative guidance under ASC 740, the Company is required to recognize the effects of the enacted tax law changes in its income tax provision in the period enacted.

Although the OBBBA had many taxpayer-favorable provisions, the OBBBA did not have a material impact on the Company’s effective tax rate.

The Company files income tax returns in the U.S.

federal jurisdiction and various state and local tax jurisdictions.

The federal tax years open to examination are 2022 to 2025.

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$ 23,279,143 $ 59,214,216 $ 68,068,826

( 1 ) Other segment items include insurance, regulatory and consultant expenses, as well as various general corporate costs.

( 1 ) Other segment items include insurance, business development costs, regulatory and consultant expenses, as well as various general corporate costs.

Revenues by geographic region were as follows:

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Effective June 13, 2023, an individual was elected to the Company's Board of Directors who was already providing and continued to provide consulting services to the Company.

Under a consulting agreement, the director received a monthly fee of $ 20,000 in 2023 and 2024.

During the year ended December 31, 2024 , the Company incurred $ 240,000 under this agreement.

The Company had no outstanding payables or accrued expenses related to the services performed by this vendor as of December 31, 2024 .

Effective September 26, 2024, the consulting agreement was amended;

Under a consulting agreement, the director received a monthly fee of $ 20,000 in 2023, 2024 and two months in 2025.

In September 2024, the consulting agreement was amended;

the amendment specifies that the director would receive a payment of between $ 120,000 and $ 240,000 in the event that the Company receives a request for proposal ("RFP") or request for information ("RFI") from the Administration of Strategic Preparedness and Response within the U.S.

Government before July 1, 2025.

Because the Company did not receive an RFI or an RFP before January 1, 2025, the maximum payment now available is $ 180,000 .

In addition, pursuant to the amendment the director is entitled to receive the monthly fee through March 31, 2026, unless the director resigns as a consultant, or the Company terminates the director for cause.

On March 6, 2025, the director resigned from the Company’s Board of Directors, See Item 9B (Other Information).

On March 6, 2025, the director resigned from the Company’s Board.

In connection with the September 2024 consulting agreement amendment, the Company did not obtain an RFP or RFI before July 1, 2025, thus no additional payment was required.

Real Estate Leases

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data