OPGN Opgen Inc - 10-K

Item 1A. Risk Factors

The following are significant factors known to us that could materially harm our business, financial condition or operating results or could cause our actual results to differ materially from our anticipated results or other expectations, including those expressed in any forward-looking statement made in this Annual Report. The risks described are not the only risks we face. Additional risks and uncertainties not currently known to us, or that we currently deem to be immaterial, may also adversely affect our business, financial condition and operating results. If any of these risks actually occur, our business, financial condition, and operating results could suffer significantly.

Risks Related to Our Business

We are a new entrant in our industry and have limited operating experience, which may limit our ability to execute effectively.

We recently repositioned our business and are still in the early stages of developing our operations in this sector. Our limited operating history can make it difficult for investors to assess our prospects. We may face unforeseen challenges in adapting to market dynamics, executing our business model, and establishing our presence, which could adversely affect our results of operations and financial condition.

If we fail to effectively manage our growth, our business, financial condition and results of operations could be adversely affected.

We have repositioned into a new industry and are working to grow our business. This repositioning and expansion increase the complexity of our business and has placed, and will continue to place, strain on our management, personnel, operations, systems, technical performance, financial resources and internal financial control and reporting functions. Our ability to manage our transition and growth effectively, including navigating unfamiliar market dynamics and competitive pressures in the new industry and integrating new employees, technologies and acquisitions into our existing business, will require us to continue to expand our operational and financial infrastructure and to continue to retain, attract, train, motivate and manage employees. Our ability to manage our growth effectively will require us to implement and improve our operational, financial, and management systems and to expand, train, manage, and motivate our employees. These demands will require the hiring of additional management and operational personnel. Continued growth could strain our ability to develop and improve our operational, financial and management controls, enhance our reporting systems and procedures, recruit, train and retain highly skilled personnel and maintain user satisfaction. Additionally, if we do not effectively manage the transition or growth of our business and operations, the quality of our offerings could suffer, which could negatively affect our reputation and brand, business, financial condition and results of operations. Failure to successfully adapt to the demands of the new industry and effectively scale our operations could jeopardize our market position and long-term viability.

Our operations within the securities and capital markets ecosystem subject us to complex and evolving regulatory requirements that could materially adversely affect our business.

We provide technology, data, and advisory solutions that support securities offerings, listing readiness, and cross-border capital markets activities. While we are not registered as a broker-dealer or securities exchange in the United States or other jurisdictions, certain aspects of our services may be subject to regulation by securities authorities in the United States and in foreign jurisdictions.

Regulatory frameworks applicable to technology-enabled platforms in the securities industry are evolving and, in some cases, may be unclear or subject to differing interpretations. As a result, we may be required to obtain additional licenses or approvals, adjust our business practices, or limit certain activities in particular jurisdictions.

Our cross-border activities may also subject us to multiple and potentially conflicting regulatory regimes, including requirements relating to investor solicitation, data handling, and capital flows. Compliance with these regulations may increase our costs and operational complexity and could limit our ability to expand our platform. Any such developments could have a material adverse effect on our business, financial condition, and results of operations.

Our operations in Malaysia and our personnel in Singapore subject us to economic, political, and regulatory risks that could adversely affect our business.

We operate in Malaysia and maintain personnel in Singapore, and may further expand internationally. As a result, we are subject to risks associated with conducting business outside the United States, including changes in laws and regulations, currency controls, and differing governance and disclosure standards. Regulatory frameworks in these jurisdictions, particularly for capital markets and financial services activities, may continue to evolve and may limit or condition our operations. In addition, legal protections and enforcement mechanisms may be more limited or uncertain than in the United States. These factors may increase our compliance costs and operational complexity and could limit our ability to operate effectively or expand in these markets, which could have a material adverse effect on our business, financial condition, and results of operations.

Global economic and geopolitical conditions could adversely affect our business and the capital markets environment in which we operate.

Our business depends, in part, on the stability of global financial markets. Geopolitical developments, including conflicts, sanctions, or instability in regions such as the Middle East, may result in market volatility, reduced investor confidence, and disruptions to cross-border capital flows. Such conditions may also contribute to inflation, currency volatility, and tighter financial conditions, which could reduce demand for capital markets transactions, including public offerings and cross-border listings. In addition, sanctions or export controls could restrict our ability to engage with certain counterparties or jurisdictions. Any such developments could adversely affect our business, financial condition, and results of operations.

We may not realize the anticipated benefits of our acquisition of iCapX, and integration and development of the platform may present challenges.

The integration of iCapX into our platform and its continued development involve risks, including potential difficulties in combining systems, data, and product offerings, as well as maintaining data integrity and security. We may also face challenges in scaling the platform and supporting new functionalities. The anticipated benefits of the acquisition, including enhanced capabilities and business opportunities, may not be realized within expected timeframes or at all. In addition, we may incur ongoing costs related to development and maintenance. If integration of the platform into our other offerings is not successful or proves more costly than expected, it could adversely affect our business, financial condition, and results of operations.

Our reliance on data and advanced computational model-enabled analytics presents risks related to data quality, regulatory oversight, and performance.

Our platform will depend on the accuracy and completeness of underlying data, including data provided by third parties. If such data is inaccurate or incomplete, our outputs may be less reliable, which could affect customer confidence. Since we do not control third party providers of data, we may have limited ability to ensure or verify the accuracy and completeness of such data. The use of advanced computational model-enabled tools in financial and regulatory contexts may also be subject to evolving regulatory requirements, which could increase compliance obligations or limit certain applications. In addition, our models may not perform as expected in all circumstances.

We may pursue joint ventures or strategic partnerships in the future, which could involve risks that adversely affect our business.

We have established a framework for a joint venture with the European Credit Investment Bank (“ECIB”), and we may enter into such joint venture in the future. We may also pursue and enter into joint ventures or alternative strategic partnerships with other parties. These arrangements, if consummated, would involve risks that are not present in wholly owned operations, including shared control, reliance on third parties, and the potential for disagreements regarding strategy or execution. We may have limited ability to influence partners’ actions, and their performance may not align with our expectations. In addition, such arrangements may require management attention and resources and could involve operational or financial risks. If we enter into joint ventures or similar arrangements and they are not successful, they could adversely affect our business, financial condition, and results of operations.

We have a history of losses and uncertain future profitability due to business repositioning.

We have incurred significant net losses since our inception. Although we have generated revenue since the repositioning of our business and are presenting net income in the current reporting period, we cannot assure you that we will achieve or sustain profitability in the future. We underwent a strategic repositioning of our business, and our long-term success depends on our ability to effectively implement and adapt this evolving strategy in a dynamic and competitive market. This repositioning involves uncertainties related to operational changes, market adoption, and execution risks, and we may not realize the intended benefits or efficiencies. As a result, we may experience operating losses, and we cannot guarantee that our business model will succeed or that we will achieve positive financial results.

We depend on our key personnel and other highly skilled personnel, and if we fail to attract, retain, motivate or integrate our personnel, our business, financial condition and results of operations could be adversely affected.

Our success depends, in part, on the service of our senior management team, key technical employees, and other highly skilled personnel and service providers upon whom we rely, as well as on our ability to identify, hire, develop, motivate, retain and integrate highly qualified personnel for all areas of our organization. In order to effectively execute our strategy, we will need to hire employees for various roles in the development, operations, sales, and compliance parts of our business. We may not be successful in attracting and retaining qualified personnel to fulfill our current or future needs. Our competitors may be successful in recruiting and hiring members of our management team or other key employees, and it may be difficult for us to find suitable replacements on a timely basis, on competitive terms or at all. If we are unable to attract and retain the necessary personnel, particularly in critical areas of our business, we may not achieve our strategic goals.

We rely, in part, on consultants and personnel affiliated with our controlling stockholder, which may present operational and other risks.

We utilize fractional consultants and, in certain cases, personnel affiliated with our controlling stockholder to support aspects of our operations and service delivery. These individuals are not our full-time employees. We may therefore have limited control over their availability, performance, and continued engagement. Our reliance on such personnel may reduce our ability to ensure consistent service quality, maintain institutional knowledge, and scale our operations efficiently. In addition, personnel affiliated with our controlling stockholder may have competing responsibilities or potential conflicts of interest. If we are unable to retain these consultants or access such personnel on acceptable terms, or if their services are reduced or terminated, we may need to incur additional costs to replace them or transition functions internally.

Our concentration of revenues from one client contract may have a material adverse effect on our financial condition and results of operations.

We currently derive a substantial amount of our total revenue through one client contract. If we are unable to identify additional clients, or if our client fails to fulfill its obligations to us, it could have a material adverse effect on our business, financial condition, results of operations and cash flows.

There is a concentration of ownership of our common stock by AEI Capital Ltd., or AEI, and AEI may exert substantial influence over the Company’s business, and the interest of AEI may conflict with those interests of other stockholders.

As of December 31, 2025, AEI and its affiliates own approximately 76.1% of our outstanding common stock. AEI has appointed 5 directors to the board. Based on AEI’s representation on the board and ownership position, AEI is able to exert substantial influence over the Company’s business. Additionally, the interests of AEI may be different from or conflict with the interests of the other stockholders. This concentration of voting power with AEI could delay, defer, or prevent a change of control, entrench management and the board, or delay or prevent a merger, consolidation, takeover, or other business combination involving the Company on terms that other stockholders may desire. In addition, conflicts of interest could arise in the future between the Company, on the one hand, and AEI, on the other hand, concerning potential competitive business activities, business opportunities, the issuance of additional securities and other matters.

Security breaches, loss of data and other disruptions could compromise sensitive information related to our business or prevent us from accessing critical information and expose us to liability, which could adversely affect our business and our reputation.

In the ordinary course of our business, we collect and store sensitive data. We also store sensitive intellectual property and other proprietary business information, including that of our customers. We will manage and maintain our applications and data utilizing a combination of on-site systems and cloud-based data center systems. These applications and data encompass a wide variety of business-critical information, including commercial information and business and financial information. We face four primary risks in relation to protecting this critical information: loss of access risk, unauthorized disclosure risk, unauthorized modification risk and the risk of our being unable to identify and audit our controls over the first three risks.

We are highly dependent on information technology networks and systems, including the Internet, to securely process, transmit and store this critical information. Security breaches of this infrastructure, including physical or electronic break-ins, computer viruses, phishing attempts, ransomware attacks or other attacks by hackers and similar breaches, can create system disruptions, shutdowns or unauthorized disclosure or modification of confidential information. The secure processing, storage, maintenance, and transmission of this critical information is vital to our operations and business strategy, and we will devote significant resources to protecting such information. Although we take measures to protect sensitive information from unauthorized access or disclosure, our information technology and infrastructure may be vulnerable to attacks by hackers or viruses or breached due to employee error, malfeasance or other disruptions. Any such incident could result in substantial remediation costs, reputational damage, loss of competitive advantage, adverse regulatory actions, significant fines, litigation, and ultimately, a material adverse effect on company’s business, financial condition, and results of operations.

A security breach or privacy violation that leads to disclosure or modification of or prevents access to consumer information could harm our reputation, compel us to comply with disparate state breach notification laws, require us to verify the correctness of database contents and otherwise subject us to liability under laws that protect personal data, resulting in increased costs or loss of revenue. If we are unable to prevent such security breaches or privacy violations or implement satisfactory remedial measures, our operations could be disrupted, and we may suffer loss of reputation, financial loss and other regulatory penalties because of lost or misappropriated information, including sensitive consumer data. In addition, these breaches and other inappropriate access can be difficult to detect, and any delay in identifying them may lead to increased harm, as described above.

Any such breach or interruption could compromise our networks, and the information stored there could be inaccessible or could be accessed by unauthorized parties, publicly disclosed, lost or stolen. Any such interruption in access, improper access, disclosure or other loss of information could result in legal claims or proceedings, liability under laws that protect the privacy of personal information, and regulatory penalties. Unauthorized access, loss or dissemination could also disrupt our operations, including our ability to collect, process, and prepare Company financial information as well as manage the administrative aspects of our business, all of which could adversely affect our business.

In addition, the interpretation and application of consumer, privacy and data protection laws in the United States and elsewhere are often uncertain, contradictory and in flux. It is possible that these laws may be interpreted and applied in a manner that is inconsistent with our practices. If so, this could result in government-imposed fines or orders requiring that we change our practices, which could adversely affect our business. Complying with these various laws could cause us to incur substantial costs or require us to change our business practices and compliance procedures in a manner adverse to our business.

Systems failures and resulting interruptions in the availability of our platform or offerings could adversely affect our business, financial condition and results of operations.

Our systems, or those of third parties upon which we rely, may experience service interruptions or degradation because of hardware and software defects or malfunctions, distributed denial-of-service and other cyberattacks, human error, earthquakes, hurricanes, floods, fires, natural disasters, power losses, disruptions in telecommunications services, fraud, military or political conflicts, terrorist attacks, computer viruses, ransomware, malware or other events. Our systems also may be subject to break-ins, sabotage, theft and intentional acts of vandalism, including by our own employees. Some of our systems are not fully redundant and our disaster recovery planning may not be sufficient for all eventualities. Our business interruption insurance may not be sufficient to cover all our losses that may result from interruptions in our service as a result of systems failures and similar events.

We have not experienced any system failures or other events or conditions that have interrupted the availability or reduced or effected the speed or functionality of our offerings. These events, were they to occur in the future, could adversely affect our business, reputation, results of operations and financial condition.

The successful operation of our business depends upon the performance and reliability of the Internet, mobile, and other infrastructures that are not under our control.

Our business depends on the performance and reliability of the Internet, mobile and other infrastructures that are not under our control. Disruptions in Internet infrastructure or the failure of telecommunications network operators to provide us with the bandwidth we need to provide our services and offerings could interfere with the speed and availability of our platform. If our platform is unavailable when platform users attempt to access it, or if our platform does not load as quickly as platform users expect, platform users may not return to our platform as often in the future, or at all, and may use our competitors’ products or offerings more often. In addition, we have no control over the costs of the services provided by national telecommunications operators. If mobile Internet access fees or other charges to Internet users increase, consumer traffic may decrease, which may in turn cause our revenue to significantly decrease.

We are subject to risks with respect to counterparties, and failure of such counterparties to meet their obligations could cause us to suffer losses or negatively impact our results of operations and cash flows.

We enter into various contracts that are material to the operation of our business that subject us to counterparty risks. The ability and willingness of our counterparties to perform their obligations under any contract will depend on a number of factors that are beyond our control and may include, among other things, general economic conditions, the condition of such counterparty’s industry and the overall financial condition of the counterparty. A prolonged period of difficult industry conditions could lead to changes in a counterparty’s liquidity and increase our exposure to counterparty risk. If our counterparties are unable or unwilling to perform, it could negatively impact our results of operations and cash flows.

Risks Related to Our Securities and Public Company Status

If we are unable to maintain effective internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our reported financial information and the market price of our common stock may be negatively affected.

As a public company, we are required to maintain internal control over financial reporting and to report any material weaknesses in such internal control. Section 404 of the Sarbanes-Oxley Act of 2002 requires that we evaluate and determine the effectiveness of our internal control over financial reporting and provide a management report on internal control over financial reporting. If we have a material weakness in our internal control over financial reporting, we may not detect errors on a timely basis and our financial statements may be materially misstated. While no material weaknesses in our internal control over financial reporting as of the date of this filing have been identified, we cannot assure you that material weaknesses will not be identified in the future.

When we are no longer a smaller reporting company, our independent registered public accounting firm will be required to issue an attestation report on the effectiveness of our internal control over financial reporting. Even if our management concludes that our internal control over financial reporting is effective, our independent registered public accounting firm may conclude that there are material weaknesses with respect to our internal controls or the level at which our internal controls are documented, designed, implemented, or reviewed.

When we are no longer a smaller reporting company, if our auditors were to express an adverse opinion on the effectiveness of our internal control over financial reporting because we had one or more material weaknesses, investors could lose confidence in the accuracy and completeness of our financial disclosures, which could cause the price of our common stock to decline. Internal control deficiencies could also result in a restatement of our financial results in the future.

The market price of our common stock and the trading volume of our common stock has been, and may continue to be, highly volatile, and such volatility could cause the market price of our common stock to decrease.

During 2025, the market price of our common stock fluctuated from a low of $0.00 per share to a high of $15.90 per share, and our stock price continues to fluctuate. The market price and trading volume of our common stock may continue to fluctuate significantly in response to numerous factors, some of which are beyond our control, such as:

the trading volume of our common stock;

variations in our and our competitors’ results of operations;

changes in earnings estimates or recommendations by securities analysts, if our common stock is covered by analysts;

successes or challenges in our collaborative arrangements or alternative funding sources;

adverse effects on our business condition and results of operations from general economic and market conditions and overall fluctuations in the United States and international markets, including deteriorating market conditions due to investor concerns regarding inflation;

adverse developments affecting the financial services industry, including events or concerns involving liquidity, defaults or non-performance by financial institutions that could adversely affect our business, financial condition or results of operations;

future issuances of common stock or other securities;

the addition or departure of key personnel;

announcements by us or our competitors of acquisitions, investments or strategic alliances; and

general market conditions and other factors, including factors unrelated to our operating performance.

Further, the stock market in general has recently experienced extreme price and volume fluctuations. The volatility of our common stock is further exacerbated due to its low trading volume. Continued market fluctuations could result in extreme volatility in the price of our common stock, which could cause a decline in the value of our common stock and the loss of some or all of your investment.

There is presently no active market for our common stock, which is currently on the OTC Expert Market, which may make it difficult for investors to buy or sell our stock.

Our common stock is currently on the OTC Markets Group Expert Market. As such, our common stock is not eligible for proprietary broker-dealer quotations. All quotes in our stock reflect unsolicited customer orders. Such stocks have a higher risk of wider spreads, increased volatility, and price dislocations. Quotations in Expert Market securities are restricted from public viewing. As a result of our stock being on the Expert Market, there are no market makers in our common stock and, unless you are a broker or are an expert, you will not be able to obtain a quote for our common stock. Accordingly, there is no trading market for our common stock. Even if a market for our common stock develops, as to which we can give no assurance, there can be no assurance as to the liquidity of our common stock, the ability of holders of our common stock to sell our common stock, or the prices at which holders may be able to sell our common stock. Further, if a market develops, it is likely that there will not be any significant float, with the result that the reported bid and ask prices may have little relationship to the price you would pay if you wanted to buy shares or the price you would receive if you wanted to sell shares. We expect that our common stock will remain on the Expert Market as long as we are delinquent in our SEC filings, although we can give no assurance that we will cease to be on the Expert Market once we are current in our filings.

The market price of our Common Stock is likely to be highly volatile and you could lose all or part of your investment in our securities.

There is limited trading activity for our Common Stock on the OTC market. An investment in our securities is risky, and stockholders could lose their investment in our securities or suffer significant losses and wide fluctuations in the market value of their investment. Even with the commencement of trading of our Common Stock on the OTC market, the market price of our Common Stock is likely to be highly volatile. Given the continued uncertainty surrounding many variables that may affect our business, and the industry in which we operate, our ability to foresee results for future periods is limited. This variability could affect our operating results and thereby adversely affect our stock price. Many factors that contribute to this volatility are beyond our control and may cause the market price of our Common Stock to change, regardless of our operating performance.

Financial Industry Regulatory Authority (“FINRA”) sales practice requirements may also limit a stockholder’s ability to buy and sell our shares of common stock, which could depress the price of our shares of common stock.

FINRA rules require broker-dealers to have reasonable grounds for believing that the investment is suitable for a customer before recommending that investment to the customer. Prior to recommending speculative low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives, and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low-priced securities will not be suitable for at least some customers. Thus, if our shares of common stock become speculative low-priced securities, the FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our shares of common stock, which may limit your ability to buy and sell our shares of common stock, have an adverse effect on the market for our shares of common stock, and thereby depress our price per share of common stock.

The exercise of outstanding common stock purchase warrants and stock options will have a dilutive effect on the percentage ownership of our capital stock by existing stockholders.

As of December 31, 2025, we had outstanding warrants to acquire a total of 1,092,569 shares of our common stock, and stock options to purchase 138 shares of our common stock. While many of these warrants were not in the money based on recent trading prices, they were in the money at certain points during the year, and holders may elect cashless exercise. To the extent these warrants and options are exercised, whether for cash or on a cashless basis, existing stockholders’ ownership percentages will be diluted.

We have never paid dividends on our capital stock. While we may consider the payment of dividends in the future, we do not currently have any declared dividend policy and any such determination will be made at the discretion of our Board of Directors.

We have never paid dividends on any of our capital stock. While we may, in the future, consider the payment of dividends as part of our asset allocation strategy, we have no current dividend policy or commitment to pay dividends. Any decision to pay dividends will depend on our financial condition, results of operations, capital requirements, contractual restrictions, and other factors deemed relevant by our Board of Directors.

Unstable market and economic conditions may have serious adverse consequences on our business, financial condition and stock price.

The global credit and financial markets have recently experienced extreme volatility and disruptions, including severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, instability in inflation in U.S. and foreign markets, increases in unemployment rates and uncertainty about economic stability. The financial markets and the global economy may also be adversely affected by the current or anticipated impact of military conflict, including the conflicts between (i) Russia and Ukraine, (ii) Israel and Hamas, (iii) Iran and the United States and Israel, terrorism or other geopolitical events. Sanctions imposed by the United States and other countries in response to such conflicts may also adversely impact the financial markets and the global economy, and any economic countermeasures by affected countries and others could exacerbate market and economic instability. There can be no assurance that further deterioration in credit and financial markets and confidence in economic conditions will not occur. Our general business strategy may be adversely affected by any such economic downturn, volatile business environment or continued unpredictable and unstable market conditions, including instability in inflation. If the current equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult, more costly and more dilutive. Failure to secure any necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance, and stock price.

We may be subject to litigation or government investigations for a variety of claims, which could adversely affect our operating results, harm our reputation, or otherwise negatively impact our business.

We may be subject to litigation or government investigations. These may include claims, lawsuits, and proceedings involving securities laws, fraud and abuse, product liability, labor and employment, wage and hour, commercial and other matters. Any such litigation or investigations could result in substantial costs and a diversion of management’s resources and attention. In addition, any adverse determination could expose us to significant liabilities, which could have a material adverse effect on our business, financial condition, and results of operations.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our audited consolidated financial statements and the accompanying notes thereto included elsewhere in this Annual Report. This discussion contains forward-looking statements, based on current expectations and related to future events and our future financial performance, that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many important factors, including those set forth in the section titled “Risk Factors” included under Part I, Item 1A of this Annual Report.

Overview

CapForce Inc. (“CapForce” or the “Company”, formerly known as OpGen, Inc.) was incorporated in Delaware in 2001. From inception through November 2023, the Company operated as a precision medicine company harnessing the power of molecular diagnostics and informatics to help combat infectious disease. The Company, along with its subsidiaries, Curetis GmbH (“Curetis”) and Ares Genetics GmbH (“Ares Genetics”), developed and commercialized molecular microbiology solutions helping to guide clinicians with more rapid and actionable information about life-threatening infections to improve patient outcomes and decrease the spread of infections caused by multidrug-resistant microorganisms, or MDROs.

In November 2023, the Company implemented certain cash management initiatives, including restructuring its U.S. operations by reducing headcount and scaling down operations at the Company’s U.S. headquarters to the core functions of a U.S. Nasdaq listed company, allowing the Company to conserve cash and focus on the functions needed to pursue potential strategic alternatives. Subsequently, Curetis and Ares Genetics filed petitions for insolvency, and, as a result of such proceedings, the respective insolvency administrators assumed control over the assets and liabilities of Curetis and Ares Genetics, which eliminated the authority and power of the Company and its officers to act on behalf of the subsidiaries. The loss of control required that the Company no longer include Curetis and Ares Genetics in its consolidated financial statements and consequently, the subsidiaries were deconsolidated from the Company’s consolidated financial statements. As part of the insolvency proceedings, in April 2024, all of Curetis’ assets were sold to Camtech Pte Ltd., a Singaporean family office (“Camtech”). and all of Ares Genetics’ assets were sold to bioMerieux S.A.

In March 2024, as a result of the Company’s efforts to explore a strategic transaction, the Company entered into a securities purchase agreement (the “March 2024 Purchase Agreement”) with David E. Lazar. In connection with the transactions contemplated by the March 2024 Purchase Agreement, the members of the Board of Directors, prior to the closing of such transactions, resigned, a new Board of Directors was appointed, of which Mr. Lazar was appointed Chairman, and Mr. Lazar was appointed Chief Executive Officer.

In July 2024, Mr. Lazar consummated a transaction pursuant to which he sold 550,000 shares of Series E Convertible Preferred Stock (“Series E Preferred Stock”) together with his rights to purchase the additional 2,450,000 shares of Series E Preferred Stock under the March 2024 Purchase Agreement to AEI Capital Ltd., a private limited company incorporated under the laws of the British Virgin Islands, which forms part of AEI Capital Group, with groupwide assets under management exceeding $3.0 billion. In conjunction with the transaction, Mr. Lazar resigned as Chief Executive Officer, Chairman and a director of the Company effective August 2024, and he resigned as President of the Company effective December 23, 2025. Subsequently, AEI Capital Ltd. paid the Company $2.45 million in August 2024 in exchange for the remaining 2,450,000 shares of Series E Preferred Stock under the terms of the March 2024 Purchase Agreement. All 3,000,000 shares of Series E Preferred Stock were subsequently converted into 7,200,000 shares of the Company’s common stock in August 2024.

Following the sale of control to AEI Capital Ltd., the Company further scaled down legacy operations while repositioning itself to operate in the financial services and technology industry. In furtherance of such shift, the Company established a wholly-owned subsidiary, CapForce International Holdings Ltd., which launched a new business line offering listing sponsorship and consultancy services to international companies seeking to list their securities on securities exchanges. Additionally, CapForce is entering the financial technology industry supporting digital investment banking activities and capital table management.

As part of the Company’s strategic focus on capital markets advisory, in December 2025, the Company acquired all the issued and outstanding ordinary shares of Sun Investment Enterprises Limited, a company incorporated under the laws of the British Virgin Islands (the “Holding Company”) from AEI Capital Ltd. The Holding Company is the owner of all the equity interests of iCapX Sdn. Bhd., a private company limited by shares incorporated under the laws of Malaysia (“iCapX”) providing cap table management fintech platform services to customers. The iCapX platform will provide customers with proprietary datasets of structured private company equity information, enhancing due diligence capabilities, improving listing readiness assessments, and supporting pricing accuracy. The platform will also function as a pipeline for business development by engaging private companies ahead of potential listing events. Ongoing development initiatives include AI-driven analytics for identifying structural risks, optimizing exchange selection, and supporting predictive insights related to post-listing performance.

On May 20, 2024, the Company effected a 1-for-10 reverse stock split of its issued and outstanding shares of common stock. All share amounts and per share prices in this Annual Report have been adjusted to reflect the reverse stock split.

Financing Transactions

Since inception, the Company has incurred significant losses from operations and negative operating cash flows. Historically, the Company has funded its operations primarily through external investor financing arrangements and strategic actions taken by the Company, but going forward, the Company anticipates funding its operations primarily through financing arrangements with AEI Capital Ltd.

The following financing transactions generating gross proceeds of $5.5 million took place during 2024 and 2025:

In March 2024, we entered into a securities purchase agreement with David E. Lazar, pursuant to which we agreed to sell 3,000,000 shares of Series E Convertible Preferred Stock to Mr. Lazar at a price of $1.00 per share for aggregate gross proceeds of $3.0 million. Pursuant to the agreement, Mr. Lazar paid a total of $550,000 in exchange for 550,000 shares of Series E Preferred Stock. In July 2024, Mr. Lazar consummated a transaction pursuant to which he sold the 550,000 shares of Series E Preferred Stock together with his rights to purchase the additional 2,450,000 shares of Series E Preferred Stock under the March 2024 Purchase Agreement to AEI Capital Ltd. Subsequently, AEI Capital Ltd. paid the Company $2.45 million in August 2024 in exchange for the remaining 2,450,000 shares of Series E Preferred Stock under the terms of the March 2024 Purchase Agreement.

In August 2024, we entered into a securities purchase agreement (the “August 2024 Securities Purchase Agreement”) with AEI Capital Ltd., which was subsequently amended in October 2024, pursuant to which we have the right, in our sole discretion, to sell to AEI Capital Ltd., at any time prior to December 31, 2025, shares of common stock, par value $0.01 per share, of the Company having an aggregate value of up to $9.0 million. During the 2024 fiscal year, the Company sold 1,079,109 shares of common stock to AEI Capital Ltd. for gross proceeds of $2.0 million before deducting offering expenses, and, during the 2025 fiscal year, the Company sold 78,125 shares of common stock to AEI Capital Ltd. for gross proceeds of $0.5 million before deducting offering expenses. In December 2025, the Company and AEI Capital Ltd. further amended the August 2024 Securities Purchase Agreement to provide that the Company may sell shares of common stock to AEI Capital Ltd. thereunder until December 31, 2026.

In the near term, we anticipate funding our operations primarily through financing arrangements with AEI Capital Ltd., including the August 2024 Securities Purchase Agreement noted above, until our operating business is able to sustain our operations or until we are able to monetize our investments in equity securities.

Financial Overview

Revenue

Prior to the repositioning of our business, we generated revenues from sales of our products, including sales of our products through our distribution partners, such as our Unyvero instruments and consumables. We also generated revenue from sales by Ares Genetics of its AI-powered prediction models and solutions. Revenues generated from our laboratory services related to services that we and our subsidiaries provided to customers.

Following the acquisition of a controlling interest in the Company by AEI Capital Ltd., we generate revenues from CapForce’s listing sponsorship and consulting services, and we anticipate generating revenues from CapForce’s other business ventures including cross-border securities trading, advanced computational model-enabled investment banking advisory and asset management services, and fintech-enabled capital table management solutions via iCapX, CapForce’s next generation global digital investment banking platform.

Cost of Products, Cost of Services, and Operating Expenses

Prior to the repositioning of our business, our cost of products consisted of product and inventory costs, including materials costs and overhead, and other costs related to the recognition of revenue. Cost of services relates to the material and labor costs associated with providing our services. Research and development expenses consist primarily of expenses incurred in connection with our clinical and pre-clinical research activities. Selling, general and administrative expenses consist of public company costs, salaries, and related costs for administrative, sales, and business development personnel.

Following the acquisition of a controlling interest in the Company by AEI Capital Ltd., the Company’s cost of sales are primarily subcontractor and advisor fees and technology infrastructure costs associated with providing our services. Research and development expenses consist of fees to develop, expand and innovate CapForce’s digital investment banking platform, and selling, general, and administrative expenses continue to consist of public company costs, salaries, and related costs for administrative and business development purposes.

Results of Operations for the Years Ended December 31, 2025 and 2024

Revenues

Years ended

December 31,

$ Change

% Change

Revenue

Product sales

Laboratory services

Listing sponsorship services

Total revenue

The Company’s total revenue for the year ended December 31, 2025 increased $25.0 million. This increase is attributable to the recognition of additional listing sponsorship services revenues in 2025, partially offset by a decrease in product sales and laboratory services as the Company scaled down its legacy operations. The breakdown of total revenues is as follows:

Product Sales: the decrease during the year ended December 31, 2025 compared to the same period in 2024 is attributable to the scaling down of legacy operations at the Company in connection with the Company repositioning its business;

Laboratory Services: the decrease during the year ended December 31, 2025 compared to the same period in 2024 is attributable to the scaling down of legacy operations at the Company in connection with the Company repositioning its business; and

Listing Sponsorship Service: the increase during the year ended December 31, 2025 compared to the same period in 2024 is due to the Company’s continued performance and completion of the remaining performance obligations pursuant to its listing sponsorship and consulting services contract with the Company’s client.

Operating expenses

Years Ended

December 31,

$ Change

% Change

Cost of products sold

Cost of services

Research and development

General and administrative

Sales and marketing

Loss on deconsolidation of subsidiaries

Total operating expenses

The Company’s total operating expenses for the year ended December 31, 2025 increased from $4.9 million to $6.2 million, when compared to the same period in 2024. This increase is primarily attributable to:

Cost of products sold: cost of products sold for the year ended December 31, 2025 decreased when compared to the same period in 2024. The decrease in cost of products sold aligns with scaling down of legacy operations at the Company in connection with the Company repositioning its business;

Cost of services: cost of services for the year ended December 31, 2025 increased when compared to the same period in 2024. The increase in cost of services aligns with the repositioning of the Company’s business. In 2024, cost of services related to the Company’s laboratory services, while in 2025, cost of services relates to services performed for the Company’s listing sponsorship business;

Research and development, general and administrative, and sales and marketing: research and development, general and administrative, and sales and marketing expenses decreased for the year ended December 31, 2025 compared to the same period in 2024. The decreases are primarily attributable to the Company scaling down its legacy operations in connection with the Company repositioning its business; and

Loss on deconsolidation of subsidiaries is the result of the Company deconsolidating its Colombia and Denmark subsidiaries in 2024.

Other income (expense)

Years Ended

December 31,

Interest and other income

Interest expense

Gain on extinguishment of debt

Gain on impairment adjustment

Gain on settlement of compensation expenses

Change in fair value of EIB loan guaranty

Foreign currency transaction gains

Total other income

The Company’s decrease in total other income for the year ended December 31, 2025 compared to the same period of 2024 is primarily due to several one-time income items in 2024 including the recognition of a gain on extinguishment of debt of $9.7 million following the Company’s settlement of its loan guaranty with its former lender, the European Investment Bank (“EIB”), in August 2024, the recording of a gain on impairment adjustment of $2.1 million in March 2024 following the Company’s identification of a subtenant for its Rockville, Maryland office, and the recognition of a gain on settlement of compensation expenses of $0.6 million following the Company’s settlement of deferred and accrued compensation and severance expenses with the Company’s former CEO. These were partially offset by a $0.9 million change in the fair value of the Company’s EIB loan guaranty.

Liquidity and Capital Resources

As of December 31, 2025, we had cash and cash equivalents of $0.5 million compared to $1.3 million at December 31, 2024. Historically, we have funded our operations primarily through external investor financing arrangements and strategic actions taken by us, but going forward, we anticipate funding our operations primarily through financing arrangements with AEI Capital Ltd. We generated $0.5 million and $5.0 million of gross proceeds from the sale of our securities in 2025 and 2024, respectively.

In the near term, we anticipate funding our operations primarily through financing arrangements with AEI Capital Ltd., including the August 2024 Securities Purchase Agreement noted above, until our operating business is able to sustain our operations or until we are able to monetize our investments in equity securities. As of December 31, 2025, we have the right, in our sole discretion, to sell to AEI Capital Ltd., at any time and from time to time prior to December 31, 2026, up to $6.5 million worth of additional shares of common stock under the August 2024 Securities Purchase Agreement.

Sources and uses of cash

The following table summarizes the net cash (used in) provided by operating activities, investing activities and financing activities for the periods indicated:

Years ended

December 31,

Net cash (used in) provided by

Operating activities

Investing activities

Financing activities

Net (decrease) increase in cash and cash equivalents

Net cash used in operating activities

Net cash used in operating activities for the year ended December 31, 2025 consisted primarily of our net income of $23.6 million, adjusted for certain non-cash items, including the net change in operating assets and liabilities of $25.3 million, stock compensation expense of $0.3 million, and depreciation and amortization of $0.2 million.

Net cash used in operating activities for the year ended December 31, 2024 consisted primarily of our net income of $12.0 million, adjusted for certain non-cash items, including the change in fair value of the EIB loan guaranty of $10.9 million, the gain on impairment adjustment of $2.1 million, and the net change in operating assets and liabilities of $4.1 million.

Net cash used in investing activities

Net cash used in investing activities for the year ended December 31, 2025 consisted primarily of our purchase of intangible assets of approximately $50,000.

We used no cash in investing activities during the year ended December 31, 2024.

Net cash provided by financing activities

Net cash provided by financing activities for the year ended December 31, 2025 of $0.5 million consisted primarily of proceeds from the issuance of common stock in connection with the August 2024 Securities Purchase Agreement with AEI Capital Ltd.

Net cash provided by financing activities for the year ended December 31, 2024 of $5.0 million consisted primarily of proceeds from the issuance of preferred stock and common stock.

Contractual Commitments

Other than the continuing liability under our former headquarters’ office lease, which lease was assigned to a third party in April 2024 but for which we still remain liable to the landlord, the Company has no other material contractual commitments as of December 31, 2025.

Funding requirements

Going forward, our primary use of cash is to fund the Company’s revenue growth and operating expenses, including those costs for general administrative, digital investment banking platform development and maintenance and corporate purposes. Our future funding requirements will depend on the costs associated with repositioning our business and complying with our obligations as a public company. We cannot provide any assurances that additional financing will not be required in the future to support our operations, but we intend to use financing opportunities strategically to continue strengthening our financial position and, in the near term, we anticipate funding our operations primarily through financing arrangements with AEI Capital Ltd., our controlling shareholder, until our operating business is able to sustain our operations.

Critical Accounting Estimates

This Management’s Discussion and Analysis of Financial Condition and Results of Operations is based on our audited consolidated financial statements, which have been prepared in accordance with United States General Accepted Accounting Principles (“GAAP”). The preparation of financial statements in conformity with GAAP requires us 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 amount of revenues and expenses during the reporting period. In our audited consolidated financial statements, estimates are used for, but not limited to, liquidity assumptions, revenue recognition, stock-based compensation, allowances for credit losses and inventory obsolescence, discount rates used to discount unpaid lease payments to present values, deferred tax assets and liabilities and related valuation allowance, the estimated useful lives of long-lived assets, and the recoverability of long-lived assets. Actual results could differ from those estimates.

A summary of our significant accounting policies is included in Note 3 of the accompanying audited consolidated financial statements. Certain of our accounting policies are considered critical, as these policies require significant, difficult or complex judgments by management, often requiring the use of estimates about the effects of matters that are inherently uncertain. The accounting policies considered critical are discussed below.

Revenue Recognition

The Company derives revenues primarily from offering listing sponsorship and consultancy services to international companies seeking to list their securities on securities exchanges. Prior to its repositioning, the Company derived revenues from (i) the sale of Unyvero Application cartridges, Unyvero Systems, Acuitas AMR Gene Panel systems and test products, and SARS CoV-2 tests, (ii) providing laboratory services, and (iii) providing collaboration services.

The Company analyzes its contracts to determine the appropriate revenue recognition using the following steps: (i) identification of contracts with customers, (ii) identification of distinct performance obligations in the contract, (iii) determination of contract transaction price, (iv) allocation of contract transaction price to the performance obligations, and (v) determination of revenue recognition based on timing of satisfaction of the performance obligations. The Company recognizes revenues upon the satisfaction of its performance obligations (upon transfer of control of promised goods or services to our customers) in an amount that reflects the consideration to which it expects to be entitled in exchange for those goods or services.

The Company defers incremental costs of obtaining a customer contract and amortizes the deferred costs over the period that the goods and services are transferred to the customer. The Company had no material incremental costs to obtain customer contracts in any period presented.

Deferred revenue results from amounts billed in advance to customers or cash received from customers in advance of services being provided.

Long-Lived Assets

Property and equipment is stated at cost and depreciated on a straight-line basis over the estimated useful lives of the related assets. The estimated service lives range from three to ten years. Property and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. Recoverability measurement and estimation of undiscounted cash flows is performed at the lowest possible level for which the Company can identify assets. If such assets are considered to be impaired, impairment is recognized as the amount by which the carrying amount of the assets exceeds the fair value of the assets.

Intangible assets represent costs incurred related to the Company’s proprietary platform during the application development stage that are capitalized as finite-lived intangible assets. These costs include external direct costs for infrastructure and services, as well as personnel and related costs for consultants directly involved in the development effort. Once the project is substantially complete and available for use, capitalized costs will be amortized on a straight-line basis over the asset’s estimated useful life. Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.

Share-Based Compensation

Stock-based compensation expense is recognized at fair value. The fair value of stock-based compensation to employees and directors is estimated on the date of grant using the Black-Scholes model for stock options. The resulting fair value is recognized ratably over the requisite service period, which is generally the vesting period of the award. For all time-vesting awards granted, expense is amortized using the straight-line attribution method. The Company accounts for forfeitures as they occur.

Option valuation models, including the Black-Scholes model, require the input of highly subjective assumptions, and changes in the assumptions used can materially affect the grant-date fair value of an award. These assumptions include the risk-free rate of interest, expected dividend yield, expected volatility and the expected life of the award.

Recent Accounting Pronouncements

We have reviewed all recently issued standards and have determined that, other than as disclosed in Note 3 to our consolidated financial statements appearing elsewhere in this filing, such standards will not have a material impact on our consolidated financial statements or do not otherwise apply to our operations.

Off-Balance Sheet Arrangements

As of December 31, 2025 and 2024, the Company did not have any off-balance sheet arrangements.