Odyssey Marine Exploration, Inc.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis is intended to provide a narrative of our financial results and an evaluation of our results of operations and financial condition. The discussion should be read in conjunction with our consolidated financial statements, the related notes to the financial statements, and our Annual Report on Form 10-K for the year ended December 31, 2024.

In addition to historical information, this discussion contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, regarding the Company’s expectations concerning its future operations, earnings and prospects. On the date the forward-looking statements are made, the statements represent the Company’s expectations, but the expectations concerning its future operations, earnings and prospects may change. The Company’s expectations involve risks and uncertainties and are based on many assumptions that the Company believes to be reasonable, but such assumptions may ultimately prove to be inaccurate or incomplete, in whole or in part. Accordingly, there can be no assurances that the Company’s expectations and the forward-looking statements will be correct. Please refer to Part I, Item 1A (“Risk Factors”) of this Annual Report on Form 10-K for a description of risk factors that could cause actual results to differ from the expectations stated in this discussion. Odyssey disclaims any obligation to update any of these forward-looking statements except as required by law.

Operational Update

Additional information regarding our announced projects can be found in Part I, Item 1 of this Annual Report on Form 10-K for the year ended December 31, 2025. Only projects that are material in nature or with material status updates are discussed below. We may have other projects in various stages of planning or execution that may not be disclosed for security or legal reasons until considered appropriate by management or required by law.

Our subsea project portfolio contains multiple projects in various stages of development throughout the world and across different mineral resources. We regularly evaluate prospective resources to identify new projects. In addition to conducting geological assessments, we also analyze licensing regulations to assure rights can be secured, business development models, and commercial viability factors; all which factor into our decision making on whether and how to pursue opportunities in the best interest of our stockholders.

Subsea Mineral Exploration Projects

Phosagmex Project

On December 23, 2024, the Company, certain of its affiliates and Capital Latinoamericano, S.A. de C.V. (“CapLat”) entered into a Joint Venture Agreement (the “JV Agreement”), pursuant to which Odyssey and CapLat agreed to work together to develop a strategic fertilizer production project in Mexico (the “Phosagmex Project”) building on the work completed by the Company to validate and quantify a high-quality subsea phosphate resource within Mexico’s Exclusive Economic Zone (the “Mexican EEZ”). Pursuant to the JV Agreement, the Company and CapLat agreed to work together to develop the Phosagmex Project and, subject to satisfaction of certain conditions, including certain regulatory approvals from Mexican governmental authorities, to invest through subsidiaries of each party as equal partners, subject to adjustment based on final contributions in a newly formed joint venture entity that will own and continue to develop and operate the Phosagmex Project. CapLat is key as a local partner in Mexico to develop the Phosagmex Project due to its local knowledge of the Mexican business and political environment and its expertise in the food and agricultural industries. Odyssey is a key partner that has expertise critical to the phosphate and fertilizer production project with respect to operations in the Mexican EEZ to extract phosphate ore needed for fertilizer production from the seafloor within the area located in the Gulf of Ulloa of the Baja California Sur Peninsula in the Mexican EEZ, as well as processing phosphate ore into commercially viable products serving the fertilizer industry in Mexican and global markets.

The Phosagmex Project includes a rich deposit of phosphate sands located 70-90 meters deep within the Mexican EEZ. This deposit contains a large amount of high-grade phosphate ore that can be extracted on a commercially viable basis (essentially a standard dredging operation). The product will be attractive to Mexican and other world producers of fertilizers because it can provide important benefits to Mexico’s and the rest of North America’s agricultural development. The deposit lies within exclusive mining concessions described in more detail below.

Pursuant to the JV Agreement, on June 4, 2025, the parties formed Phosagmex as a joint venture entity. On June 6, 2025, in accordance with the JV Agreement, the Company’s subsidiary, Exploraciones Oceánicas S. de R.L. de CV (“ExO”), entered into an agreement to transfer its legal rights to the mining concessions described below that include the phosphate ore for the Phosagmex Project to Phosagmex subject to reinstatement of the concessions.

On February 27, 2026, the Company, certain of its affiliates, CapLat, and Phosagmex entered into an amended and restated JV

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Agreement (the “Restated JV Agreement”). The Restated JV Agreement:

In 2012, ExO was granted the first of three 50-year mining licenses by Mexico (extendable for another 50 years) for the deposit that lies 25-40 km offshore in Baja California Sur. In October 2024, the Company discovered that the Mexican mining authority unlawfully cancelled ExO’s mining concessions in June and August 2024. ExO challenged the cancellation in November 2024. In September and October 2025, the Tribunal Federal de Justicia Administrativa (“TFJA”) issued orders annulling the 2024 cancellations of the concessions, thereby restoring the legal validity of the concessions. Certain issues relating to concession fees remain under review before a Federal Circuit Tribunal (“Tribunal”). Once the concession fee issues are resolved by the Tribunal, the assignment of the concessions to Phosagmex will be effective.

After the concessions have been reinstated and the assignment to Phosagmex is effective, Phosagmex will submit an application for an environmental permit to move forward with the Phosagmex project. Although the permit application will be based on the underlying exploration work and environmental research by ExO described below, the application will include certain significant changes to reflect the Phosagmex Project plan.

ExO Permit Application

We spent more than three years preparing an environmentally sustainable development plan with the assistance of experts in marine dredging and leading environmental scientists from around the world.

In 2015, ExO applied for a permit to move forward with the project. Notwithstanding the factors stated above, in April 2016 the Mexican Ministry of the Environment and Natural Resources (“SEMARNAT”) unlawfully rejected the permit application. ExO challenged the decision in Mexican federal court and in March 2018, the TFJA, an 11-judge panel, ruled unanimously that SEMARNAT denied the application in violation of Mexican law and ordered the agency to re-take its decision. Just prior to the change in the Mexican administration later in 2018, SEMARNAT denied the permit a second time in defiance of the court. ExO challenged the decision again before the TFJA. On October 25, 2024, the TFJA announced its ruling in favor of SEMARNAT. ExO appealed the TFJA’s ruling. On November 5, 2025, the Tribunal denied ExO’s appeal of the TFJA’s ruling. Because ExO has transferred the concessions to Phosagmex and does not intend to pursue the project, the Tribunal’s decision does not impact our business or strategic plan to advance this project. As described above, Phosagmex will submit its own environmental permit application when the concessions are reinstated.

ExO NAFTA Arbitration

In addition, in April 2019, we filed an arbitration claim under the North American Free Trade Agreement (“NAFTA”) against Mexico on behalf of Odyssey and ExO to protect our stockholders’ interests and significant investment in the project. Our claim sought compensation on the basis that SEMARNAT’s wrongful repeated denial of authorization has destroyed the value of our investment in violation of NAFTA.

On June 14, 2019, Odyssey and ExO executed an agreement that provided up to $6.5 million in funding for prior, current and future costs of the NAFTA action. On January 31, 2020, this agreement was amended and restated, as a result of which the availability increased to $10.0 million. In December 2020, Odyssey announced it secured an additional $10.0 million from the funder to aid in our NAFTA case. On June 14, 2021, the funder agreed to fund up to an additional $5.0 million for arbitration costs. The funder will not have any right of recourse against us unless the environmental permit is awarded or if proceeds are received (See Note 10 – Derivative Financial Instruments).

On September 17, 2024, the Company received notification from the International Centre for Settlement of Investment Disputes (“ICSID”) of the arbitral award (the “Arbitral Award”) on the claims brought by the Company on behalf of itself and ExO, against the United Mexican States under NAFTA. The arbitral tribunal issued an award in favor of the Company and ExO. The award orders Mexico to pay $37.1 million for breaching its obligations under NAFTA, plus interest (the “Award Interest”) at the one-year Mexico Treasury bond rate, compounded annually, from October 12, 2018, until the award is paid in full, plus the arbitrators’ fees and ICSID administrative costs. The amounts awarded are net of Mexican taxes, and Mexico may not tax the award. The case filings and the award are available on the ICSID website.

On December 12, 2024, Mexico commenced an application before the Ontario Superior Court of Justice seeking to set-aside the

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Arbitral Award. The set-aside application remains pending as of the date of this report.

CIC Project:

CIC Limited (“CIC”) is a deep-sea mineral exploration company. CIC is supported by a consortium of companies providing expertise and financial contributions in support of development of a project in the Cook Islands. Odyssey is a member of the consortium, which also includes Royal Boskalis Westminster.

In February 2022, the Cook Islands Seabed Minerals Authority (“SBMA”) awarded CIC a five-year exploration license beginning June 2022 within the Cook Islands’ exclusive economic zone. Offshore explorations and research commenced in the third quarter of 2022 with positive results in early sampling and testing of vessels and equipment, which informed requirements for ongoing viable operational functions as the basis for a longer-term operation over the license period. The early operations also resulted in preliminary resource sampling, that ultimately will accrue to the resource evaluation and regional environmental assessment.

Through a wholly owned subsidiary, we have earned and now hold approximately 13.4% of the current outstanding equity units of CIC issued in exchange for the provision of services by the Company. We achieved our current equity position through the provision of services rendered to CIC (see Note 5 – Investment in Unconsolidated Entities).

Ocean Minerals, LLC Project:

Ocean Minerals, LLC (“OML”) is a deepwater critical minerals exploration and development company incorporated in the Cayman Islands. Moana Minerals Limited (“Moana Minerals”) is a wholly owned subsidiary of OML and is a deepwater critical metals exploration and development company incorporated in the Cook Islands with offices and operations based in Rarotonga, Cook Islands. In February 2022, the SBMA awarded Moana Minerals a five-year exploration license (“EL3”) for a 23,630 square kilometer area in the Cook Islands’ exclusive economic zone.

Moana Minerals has validated vast polymetallic nodule resources in its exploration license area and, pursuant to the SBMA’s standards and guidelines, it is conducting further exploration activities to increase confidence in the reported mineral resource and size of the reported mineral resources and to secure environmental approvals to perform commercial operations. OML and its project partners are also advancing work to develop recovery systems to harvest these high-quality seafloor polymetallic nodules and processing solutions to convert them into commercial grade metals.

On June 4, 2023, Odyssey entered into a purchase agreement to acquire an approximately 13% interest in OML in exchange for a contribution by Odyssey of its interest in its then wholly owned subsidiary, ORI, whose sole asset was a 6,000-meter remotely operated vehicle (“ROV”), cash contributions of up to $10.0 million in a series of transactions over the following year, a Contribution Agreement and an Equity Exchange Agreement. On July 3, 2023, the parties consummated the initial closing of the purchase agreement, pursuant to which Odyssey’s wholly owned subsidiary obtained approximately 6.28% of OML’s outstanding equity interests. On October 18, 2024, Odyssey and OML entered into a Termination Agreement pursuant to which the parties terminated the OML Purchase Agreement. The Termination Agreement terminated the parties’ rights and obligations relating to the purchase of additional equity interests in OML, but did not affect Odyssey’s ownership of the Initial OML Units or its obligation to pay the lease payments for the ROV (see Note 5 – Investment in Unconsolidated Entities). The Termination Agreement also did not affect the Equity Exchange Agreement or Contribution Agreement.

The 6,000-meter rated ROV contributed to OML by Odyssey provides OML with an additional tool to advance the project toward eventual applications for an environmental permit and harvesting license when exploration and feasibility studies are completed and demonstrate how harvesting can be done without serious environmental harm. OML has obtained a Joint Ore Reserve Committee (“JORC”) compliant report that substantially increases resources reporting to inferred and indicated confidence levels, and continues to advance toward completing its preliminary Feasibility Study, among other important project milestones it is working to achieve. The summary of OML’s resource assessment is available on its website: www.omlus.com. Information available on OML’s website, including its technical report summary, is not incorporated into this Annual Report.

Lihir Gold Project:

The exploration license for the Lihir Gold Project covers a subsea area that contains several prospective gold exploration targets in two different mineralization types: seamount-related epithermal and modern placer gold. Two subaqueous debris fields within the area are adjacent to the terrestrial Ladolam Gold Mine and are believed to have originated from the same volcanogenic source. The resource lies 500-2,000 meters deep in the Papua New Guinea Exclusive Economic Zone off the coast of Lihir Island, adjacent to the location of one of the world’s largest known terrestrial gold deposits. We have an 85.6% interest in Bismarck Mining Corporation, Ltd, the Papua New Guinea company that holds the exploration license (the “Bismarck Exploration License”) for the project.

Previous exploration expeditions in the license area, including research conducted by Odyssey, indicate it is highly prospective for commercially viable gold content.

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In 2021 and again in 2023, Papua New Guinea issued permit extensions allowing Odyssey to continue with our exploration program. We have developed an exploration program for the Lihir Gold Project to validate and quantify the precious and base metal content of the prospective resource. The Company has met with local regulatory authorities, specialists in local mining, environmental legal experts, and logistics support service companies in Papua New Guinea to establish baseline business functions essential for a successful program to support upcoming marine exploration operations in the license area. This offshore work began in late 2021 and is ongoing. Bismarck and Odyssey value the environment and respect the interests and people of Papua New Guinea and Lihir and are committed to transparent sharing of all environmental data collected during the exploration program.

Offshore survey and mapping operations commenced in December 2021 in the Papua New Guinea, Lihir license area and was completed in 2022. This work produced a high-resolution acoustic terrain model of the seafloor in the area, as well as acquiring acoustic images of subseafloor sediments and lithology. This allowed characterization of the geologic setting of the area and essentially created a “snapshot” of the environment. These activities will help us to further characterize the value of this project and allow informed decision making on how to proceed with environmentally sensitive direct geologic sampling. In the first half of 2023, a comprehensive project plan was designed identifying specific target areas for geological and environmental samples to be collected in future offshore operations. No timetable has been set for operations to commence, as operational plans are currently being developed. In March 2026, Bismarck received a seventh term renewal for the Bismarck Exploration License.

During 2023, Odyssey continued exploration in the exploration license area to continue to validate the geological prospectivity of the property. In addition to examining the regional geological and tectonic settings of the region, additional multibeam data and 127 geological samples were collected, and seven ROV dives were conducted. These activities increased Bismarck’s confidence in the presence of enriched mineral targets within the exploration license area. Likewise, two target sites were identified for future resource sampling. Future exploration will focus on continued sampling in these locations while working towards a defined resource assessment and gathering environmental baseline data to compile an environmental impact assessment.

Odyssey’s multi-year exploration program is planned to focus on robust environmental surveys and studies that will accrue to environmental permitting in compliance with Papua New Guinea’s requirements as well as the development of an Environmental Impact Assessment (“EIA”). During the exploration phase, steps to validate and quantify the precious and base metal content of the prospective resource would also be carried out. Once completed, if the data shows extraction can be carried out responsibly, Odyssey will apply for a mining license.

Further development of this project is dependent on the characterization of any resources during exploration.

United States Critical Minerals

On April 24, 2025, the President of the United States issued Executive Order 14285, titled “Unleashing America’s Offshore Critical Minerals and Resources.” This directive mandates federal agencies to expedite the responsible exploration and development of seabed mineral resources on the outer continental shelf (the “OCS”) of the United States, quantify the nation’s offshore mineral endowment, and reinvigorate domestic leadership in extraction and processing technologies. The order further prioritizes the establishment of secure domestic supply chains for critical inputs essential to U.S. national security, energy transition, infrastructure modernization, and food security.

Odyssey is well positioned to benefit from the regulatory momentum and policy priorities laid out in the executive order. Our projects focus on ocean mineral resources that are essential for both agricultural resilience and emerging clean energy technologies. Our subsea mineral exploration experience is directly applicable to all of the projects being considered by the U.S. government.

Since 2021, Odyssey has been qualified by the U.S. Department of the Interior’s Bureau of Ocean Energy Management (“BOEM”) to acquire and hold a marine minerals lease. Lease applications are subject to agency review and public process, but recent regulatory actions in response to the executive order are expected to accelerate timelines and enhance the transparency and predictability of the permitting process. We are considering areas with significant mineral prospectivity as determined through our proprietary Global Prospectivity Program. We have high confidence that these areas within the OCS that align directly with the country’s stated goals of producing a sustainable supply of critical minerals that are sourced and processed in the U.S.

Virginia Strategic Minerals project

On November 6, 2025, we submitted an Unsolicited Request for Lease Sale of Marine Mineral Exploration and Development Rights to BOEM. Odyssey’s request is among the first under the Outer Continental Shelf Lands Act (OCSLA) of 1953 in U.S. jurisdiction under BOEM’s oversight.

The proposed lease area, located within the U.S. OCS off the Mid-Atlantic coast, is highly prospective for heavy mineral sands rich in titanium, zirconium and rare earth elements. Together, these materials are critical to U.S. national defense, and domestic manufacturing, underpinning U.S. manufacturing and agriculture—from aerospace alloys and smartphones to medical devices.

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Additionally, offshore sand and gravel resources from the recovery process can support coastal resiliency efforts.

If BOEM grants the requested lease sale at the conclusion of its process and Odyssey obtains the development rights, Odyssey’s project will commence with the collection of comprehensive environmental and geological data to inform responsible resource assessment and project design. If the project advances to recovery, operations will utilize shallow-water dredging, a well-established and extensively studied method already used regularly worldwide for navigation and coastal resilience, implemented in ways that mitigate potential impacts. Odyssey carefully selected the proposed lease area to avoid sensitive habitats, marine protected areas, and active maritime zones, as well as to respect conservation areas.

If Odyssey obtains the requested lease, its capability to advance a project will be enhanced by an October 2025 collaboration agreement with Great Lakes Dredge & Dock Corporation (NASDAQ: GLDD), the nation’s largest dredging contractor and a trusted federal partner for coastal restoration and resilience projects.

Going Concern Consideration

We have experienced several years of net losses and may continue to do so. Our ability to generate net income or positive cash flows for the next twelve months is dependent upon financings, our success in developing and monetizing our interests in mineral exploration entities, and generating income from contracted services and exploration charters.

Our 2026 business plan requires us to generate new cash inflows to effectively allow us to perform our planned projects. We continually plan to generate new cash inflows through the monetization of our equity stakes in seabed mineral companies, financings, syndications or other partnership opportunities. If cash inflow ever becomes insufficient to meet our projected business plan requirements, we would be required to follow a contingency business plan based on curtailed expenses and fewer cash requirements.

In December 2024, we amended the March 2023 Notes (as defined below) and the December 2023 Notes (as defined below) to, among other items, extend the maturity date of our obligations, and add a conversion feature, thereby deferring a material cash need. The holders of March 2023 Notes and the December 2023 Notes have exercised their right to convert the notes in full, which alleviated our need for cash to repay the notes on their December 31, 2025 and April 1, 2026 maturity dates. In addition, on December 23, 2024, we entered into a Securities Purchase Agreement (the “SPA”) pursuant to which the Company issued and sold an aggregate of 7,377,912 shares of Common Stock to certain accredited investors at a purchase price of $0.55 per share. The aggregate purchase price for the shares, before deduction of the Company’s expenses associated with the transaction, was approximately $4.1 million. The proceeds of that sale of Common Stock, together with other anticipated cash inflows, provided sufficient operating funds into the second quarter of 2025. The SPA further provided the investors with the right, but not the obligation, to purchase an additional 7,220,141 shares of Common Stock at a purchase price of $1.10 per share at a subsequent closing to be held on July 31, 2025, or such later date agreed by the Company and the purchasers who purchased at least a majority of the initial shares under the SPA. During the year ended December 31, 2025, purchasers exercised their options to purchase 6,975,488 additional shares of Common Stock under the SPA at $1.10 per share, for an aggregate purchase price of $7.7 million. During the year ended December 31, 2025, holders of the Company’s warrants to purchase Common Stock exercised their warrants to purchase 1,318,391 shares of Common Stock at a weighted-average price per share of $1.11, for an aggregate purchase price of $1.5 million. Sales of Common Stock pursuant to exercises of warrants and stock options are expected to provide sufficient operating funds through the short term.

Our consolidated non-restricted cash balance at December 31, 2025, was $3.5 million. We had a working capital deficit at December 31, 2025, of $7.3 million. The total consolidated book value of our assets was approximately $15.8 million at December 31, 2025, which included the cash balance of $3.5 million.

The factors noted above raise doubt about our ability to continue as a going concern. Although the steps taken by management, as outlined above, provide liquidity to the Company and position the Company to continue operating, the doubt about our ability to continue as a going concern has not been alleviated. These consolidated financial statements do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary should we be unable to continue as a going concern.

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Results of Operations

The dollar values discussed in the following tables, except as otherwise indicated, are approximations to the nearest thousands and therefore do not necessarily sum in columns or rows. For more detail refer to the Financial Statements and Supplementary Data in Item 8.

Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024

Revenue

Revenue in each period was generated from marine research and project administration for our customers and related parties. Total revenue for the year ended December 31, 2025 was $0.4 million, a decrease of $0.4 million compared to the year ended December 31, 2024. The decrease was primarily due to the expiration of the Services Agreement with CIC in the second quarter of 2025.

Two companies to which we provided these services in both periods are deep-sea mineral exploration companies, CIC and OML, which we consider to be related parties (see Note 15 – Related Party Transactions).

Operating Expenses

Marketing, general and administrative expenses for the year ended December 31, 2025 were $11.0 million, an increase of $1.3 million as compared to the year ended December 31, 2024. The increase primarily resulted from $2.4 million of director fees in connection with the Mexican Corporate Transactions, as well as increases of $1.1 million in employee bonus and other compensation, $0.6 million increase in legal fees, $0.2 million in investor relations, and $0.1 in other professional services. These increases were partially offset by a $1.8 million decrease in share-based compensation and a $1.4 million reduction in audit fees, as 2024 included significant audit fees related to the 2023 restatement of previously issued financial statements.

Operations and research expenses are primarily focused on deep-sea mineral exploration, including mineral research, scientific services, marine operations and project management. Operations and research expenses for the year ended December 31, 2025 were $2.8 million, a decrease of $0.3 million as compared to the year ended December 31, 2024, primarily as a result of decreases of $1.2 million in licenses and permits, partially offset by a $0.9 million increase in other professional fees.

Total Other (Expense)/Income

Total other (expense)/income was a $35.0 million expense and $18.3 million income for the year ended December 31, 2025 and 2024, respectively, resulting in a net change of $53.3 million.

The increase in expense or reductions in income were attributable to:

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The above increases in expense were offset by increases in income or reductions in expense attributable to:

Taxes

Due to losses in the periods and a full valuation allowance established on our net operating loss carryforwards, we did not accrue any taxes in either the year ended December 31, 2025 or 2024.

Non-Controlling Interest

The non-controlling interest adjustment for the year ended December 31, 2025 was $5.4 million as compared to $9.4 million for the year ended December 31, 2024. This primarily resulted from lower permit fees and other standard operating costs.

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Liquidity and Capital Resources

Discussion of Cash Flows

Operating Activities

Net cash used in operating activities for the year ended December 31, 2025, was $8.8 million. This represented an increase in cash used of approximately $9.5 million when compared to cash provided of $0.6 million for the year ended December 31, 2024. Cash flows used in operating activities for the year ended December 31, 2025 reflected a net income before non-controlling interest of $48.5 million and is adjusted primarily by non-cash items of $37.7 million, including: (i) $28.2 million in changes in fair value of derivative liabilities, relating primarily to the change in fair value of warrants, OML Put Option, and Litigation financing liability, (ii) $2.2 million of an Equity Exchange in connection with Mexican Corporate Transactions, (iii) amortization of deferred discount $1.9 million, (iv) note payable accretion of $1.6 million, (v) share-based compensation of $0.2 million, (vi) $1.8 million of PIK interest, and (vii) $1.6 million loss on equity method investment. Other operating activities increased working capital by $1.9 million, which included a $26,927 decrease in accounts payable, a $1.7 million decrease in accrued expenses, and a $0.2 million decrease in accounts receivable, partially offset by a $88,990 increase in other working capital accounts.

Cash flows provided by operating activities for the year ended December 31, 2024, were $0.6 million. This represents an approximate $10.8 million increase in cash provided when compared to the use of $10.2 million for the year ended December 31, 2023. Cash flows used in operating activities for the year ended December 31, 2024, reflected a net income before non-controlling interest of $6.2 million and is adjusted primarily by non-cash items of $3.7 million, which includes other income of $9.8 million from our residual economic interest in a salvaged shipwreck. Cash used in operating activities is adjusted primarily by non-cash items of $3.7 million, including: (i) $18.9 million in changes in fair value of derivative liabilities, relating primarily to the change in fair value of warrants, the OML Put Option, and the Litigation Financing liability, (ii) $4.2 million of a loss on Termination Agreement, (iii) amortization of deferred discount $3.3 million, (iv) note payable accretion of $2.3 million, (v) share-based compensation of $2.0 million, and (vi) $1.8 million of PIK interest. Other operating activities increased working capital by $1.9 million. This $1.9 million increase included a $0.4 million decrease to accounts payable and a $2.1 million increase to accrued expenses, partially offset by a $0.2 million increase in other working capital accounts.

Investing Activities

Cash flows used in investing activities for the year ended December 31, 2025, were $0.2 million. This represented an approximate $90,000 increase from cash flows used in investing activities of $0.1 million for the year ended December 31, 2024. During the year ended December 31, 2025, the net cash used in investing activities was $157,508 of cash paid for investment in an unconsolidated subsidiary and $16,098 for the purchase of property and equipment.

During the year ended December 31, 2024, the net cash used in investing activities was solely for the purchase of property and equipment.

Financing Activities

Cash flows provided by financing activities for the year ended December 31, 2025, were $7.7 million and primarily consisted of $7.7 million of proceeds from the issuance of common stock and $1.5 million of proceeds from exercised warrants, partially offset by $0.8 million of debt obligation payments, $0.5 million payments on sale-leaseback financing and $0.1 million of proceeds from the issuance of common stock.

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Cash flows provided by financing activities for the year ended December 31, 2024, were $0.2 million and primarily consisted of $3.9 million from proceeds from the issuance of common stock, partially offset by $3.0 million of debt obligation payments, $0.5 million of sale-leaseback payments and $0.1 million of offering costs paid on financing.

Other Cash Flow and Equity Areas

General Discussion

At December 31, 2025, we had cash of $3.5 million, a decrease of $1.3 million from the December 31, 2024 balance of $4.8 million. Financial debt of the company was $5.0 million and $22.9 million at December 31, 2025 and 2024, respectively.

Financings

Debt Financing

The Company’s consolidated loans payable consisted of the following carrying values at: