SNFI 10-K & 10-Q changes, risk factors and insider trading

We currently have no revenues and limited operationsrevenues, operations, and assets, which makes it difficult for us to evaluate our future business prospects and there is a risk we may eventually exhaust the capital resources we had when we emerged from bankruptcy.

We are a company with a limited operating history and very limited revenuerevenue. prior to commencing the Chapter 11 Cases. Shortly after the Petition Date, we ceased production of the Endurance and new program development. On August 8, 2023, the Bankruptcy Court approved our procedures for conducting a comprehensive marketing and sale process for some, all, or substantially all of our operating assets. On September 29, 2023, we entered into the LandX Asset Purchase Agreement. As a result, weWe do not hold assets that are of the type that were previously used in our operations.operations prior to the bankruptcy proceedings. We cannot provide assurances as to the value of our assets, including potential recoveries in the Foxconn litigation Litigation and other retained causes of action or our NOLs.

As the Company currently has limited operations and assets the value of which is uncertain, there is a risk that we will exhaust the assets we had when we emerged from bankruptcy. We have no significant income-generating assets and limited financial resources. We anticipate relying upon the interest received from our short-term investments and our notes receivable, as well as the allowed funds allocated by the Bankruptcy Court to sustain operating expenses, unless or until the consummation of a business combination or we are able to successfully prosecute claims and causes of action or secure additional funding, if at all. We cannot provide any assurance that we will identify a suitable business opportunity, consummate a business combination or that our choice of business combination will result in profitable operations, operations,or the ability to generate cash. Moreover, there can be no assurance that financing will be available to us on favorable terms and timing or at all.

Our only material assets are cash on hand, short-term investments, the loans receivable with Foxpoint Florida, the claims asserted in the Foxconn Litigation, claims that the Company may have against other parties, and NOLs.

AsOur a shell company (as defined in Rule 12b-2 of the Exchange Act), our only material assets are cash on handhand, short-term investments, the loans receivable with Foxpoint Florida, and intangible assets, including including the claims asserted in the Foxconn Litigation, claims the Company may have against other parties and NOLs. As of December 31, 2024,2025, we had $29.5$39.2 million cash and cash equivalents and short-term investments, excluding restricted short-term investments. For the foreseeable future, our principal source of revenue and cash flow will be investment income from our investment portfolio, if any.any, and income from interest receivable on the Foxpoint Florida loans. We anticipate relying upon such liquid assets to sustain operating expenses, unless or until the consummation of a business combination or we are able to secure additional funding, if at all. We cannot provide any assurance of the timing or amount, if any, of proceeds received on account of our causes of action and claims, or that we will identify a suitable business opportunity, consummate a business combination or that our choice of business combination will result in profitable operations, the ability to generate cash or preserve the value of our NOLs. Moreover, there can be no assurance that financing will be available to us on favorable terms and timing or at all.

Due to the Company’s actions to cut costs and preserve cash,cash and the Chapter 11 CasesCases, and consummation of the LandX Asset Purchase Agreement, the nature of our business activities upon emergence is materially different from those prior to filing the Chapter 11 Cases on June 27, 2023. We expect our operating losses to continue to be significant, as restructuring activities, operating expenses, the claims administration process, the Foxconn Litigation and other retained causes of action, among other activities, significantly impact our consolidated financial results. Pursuant to the terms of the Plan, which includes certain exceptions, the Claims Ombudsman will have the authority to settle, litigate or otherwise resolve general unsecured Claims against the Debtors. We cannot provide any assurances regarding what our total actual liabilities based on such claims will be, and our historical financial performance is not indicative of our financial performance after the Effective Date.

We depend on the newour Board of Directors and newly appointed management to continue navigating our emergence from the Chapter 11 Cases and contribute to our ability to realize future value of our remaining assets, and if we are unable to attract, retain, manage, and appropriately compensate our officers and Board of Directors, our ability to meet our financial reporting obligations, achieve our anticipated operating costs, and to realize value from our remaining assets and litigation claims could be adversely affected.

Our ability to realize the value of our remaining assets is based on the service of our new Board of Directors and newly appointed management. We may not be able to attract, appropriately compensate, incentivize or retain our newnewly officersappointed management and theBoard newof Board.Directors. As of the Effective Date, the employment by the Company of our remaining executive officers and employees remaining on that date ended. Some of our former employees were, and others may be, subject to claims and risks of litigation for which indemnification may be uncertain. We may not be able to attract and retain the services of such individuals, who work for us on an at-will basis and will provide limited support after the Effective Date.

We do not have any full-timeemployees employeesother than our Chief Executive Officer and we have engaged third parties to perform the work needed to run and support our operations and meet our financial reporting requirements as a public company as well as other regulatory requirements. Our business operations depend on the efforts of consultants and professional service providers to execute our business plan, operations and internal controls, including all of our financial reporting and claims reconciliation. If our key consultants become unable or unwilling to continue providing their services to us, we might not be able to replace them in a timely manner, or at all. It is impossible to predict what, if any, errors, delays, breaches or system disruptions might occur as the result of changes in third party consultants or a reduced workforce. We may incur additional expenses to recruit and retain qualified replacements. As a result, our business may be severely disrupted and our financial condition and results of operations may be materially and adversely affected. Any failure of such third parties to work effectively and to execute our plans following emergence from the Chapter 11 Cases, including our efforts to realize value from our remaining assets including through resolving and pursuing litigation and other claims, could adversely affect the Company.

At December 31, 2024,2025, the Company had approximately $1,087.6$1.1 millionbillion and $843.4$0.8 millionbillion of federal and state and local NOLs, respectively. The Company’s ability to use some or all of these NOLs is subject to certain limitations. Under Section 382 of the Internal Revenue Code, if a corporation (or a consolidated group) undergoes an “ownership change,” the use of its NOLs may be subject to certain limitations. In general, an ownership change occurs if the aggregate stock ownership of certain shareholders (generally five percent shareholders, applying certain look-through and aggregation rules) increases by more than 50% over such shareholders’ lowest percentage ownership during the testing period (generally three years).

InThe the future, the Company expects to investigate and, if such investigation warrants, enter into a business combination, acquire a target company or business or enter into strategic alliances, including joint ventures, minority equity investments or other transactions and arrangements with one or more third parties seeking the perceived advantages of being a publicly traded corporation.parties. These business opportunities may be complex and could subject us to a number of risks. The time and costs required to select and evaluate a target business and to structure and complete a business combination cannot presently be ascertained. We may not have sufficient resources to consummate a business combination. It is also impossible to predict the manner in which the Company may participate in a business opportunity. Potentially available business combinations may occur in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities difficult and complex. There can be no assurance that an attractive business opportunity will be identified, be available on acceptable terms, that financing will be available to consummate any transaction or that it would result in profitable operations, generation of cash flow, or preserve the value of our NOLs.

The Company is subject to significant contingent liabilities, including the settled Ohio Securities Class Action in which the Company is to distribute 25% up to $7 million to stockholders when received, in accordance with the terms of that settlement.received. See Note 98 - Commitments and Contingencies for additional information. Although we intend to pay all allowed claims, including general unsecured claims, in full with interest as provided by the Plan, there can be no assurance that the Claims Reserve, our other assets, or our remaining cash will be sufficient to do so given the uncertainties and risks of the claims dispute and settlement process. If the amount of allowed claims exceeds our estimates, this could have a material adverse effect on our financial condition, results of operations and prospects.

As long as Foxconn, subject to the outcome of the Foxconn Litigation, or another party or concentrated group owns or controls a significant percentage of our Preferred Stock or outstanding voting power, they have the ability to have a significant influence on our actions and operation of the Board of Directors and to influence certain corporate actions requiring stockholder approval, including the election of directors, any amendment of our charter and the approval of significant corporate transactions. On a pro forma basis, after giving effect to the conversion of its Preferred Stock and accrued dividends (but not the exercise of the Foxconn Warrants as they are currently substantially out of the money),dividends, Foxconn would hold shares of Class A common stock representing approximately 7%15% of our outstanding Class A common stock as of December 31, 2024.2025. This concentration of voting power and other rights could have the effect of delaying or preventing a change of control or changes in management and would make the approval of certain transactions difficult or impossible without the support of these significant stockholders. Any of the foregoing could impact our ability to run our business and may adversely affect the influence of the holders and market price of our Class A common stock.

Our charter provides for 462 million462,000,000 authorized shares of capital stock, consisting of (i) 450 million450,000,000 shares of Class A common stock and (ii) 12 million12,000,000 shares of preferred stock, of which 1 million1,000,000 shares has been designated as Series A Convertible Preferred Stock.

Our primary operations during the year ended December 31, 20242025 have consisted of actions and related expenditures associated with completing the Chapter 11 Cases and emerging from bankruptcy, resolving substantial litigation, claims reconciliation, financial reporting and regulatory compliance. Our assets consist of cash,cash and cash equivalents, short-term investments, the Foxconn Litigation claims, claims the Company may have against other parties, and restrictedNOLs. short-termIn investments.addition, we have funded certain loans receivable as part of our ongoing post-emergence financial activities. Additional potential assets, such as the Foxconn Litigation claims, claims the Company may have against other parties, and NOLs, are not reflected in the financial statements.

In light of our emergence from bankruptcy on March 14, 2024, our results for the yearyears ended December 31, 2025 and 2024, reflect the accounting assumptions assumptions and treatment caused by the Chapter 11 Cases and the Plan and may not be representative of our operations and results going forward. forward. See Part I - Item 1A. Risk Factors for further discussion of the risks associated with our emergence from bankruptcy, our liquidity, capital resources and financial condition, and the use of estimates and resulting uncertainty in establishing our presented financial results, among other risks.

LegalFor the years ended December 31, 2025 and 2024, legal settlement and litigation benefit, net totaling $3.0 and $6.0 millionmillion, respectively, represents adjustments to accrued liabilities subject to compromise from claims as a result of the final settlement of claims. Given that claims began to be settled in 2024, no legal settlement and litigation benefit, net was recorded for the year ended December 31, 2023.

Reorganization items represent the expenses directly and incrementally resulting from the Chapter 11 Cases filed on June 27, 2023. For the year ended December 31, 2024, reorganization items consisted of $3.1 million in legal fees and $0.9 million in consulting fees. The reorganization items include costs incurred by us as well as those incurred by the official Unsecured Creditors Committee and official Equity Committee, for which we are responsible. Given that the company emerged from bankruptcy in 2024, no reorganization costs were incurred for the year ended December 31, 2025.

The Company had cash and cash equivalents of approximately $23.1 million, short-term investments of approximately $6.4 million, excluding restricted short-term investments of approximately $23.4$34.4 million, an accumulated deficit of $1.2 billion at December 31, 2024,2025, and a net loss of $8.1$0.6 million for the year ended December 31, 2024.2025.

We have incurred significant professional fees and other costs in connection with preparation for andthe prosecution of the Chapter 11 Cases and expect to continue to incur significant professional fees and costs. In addition, we are subject to significant contingent unliquidated liabilities, the full scope of which is uncertain at this time (see Note 98 - Commitments and Contingencies). Furthermore, under the Plan, we are conducting a process to reconcile the claims asserted that has resulted in approximately $23.4$5.1 million of the Company’s short-term investments being restricted for settling outstanding claims against the Company, including litigation and indemnification claims. Pursuant to the Bankruptcy Code, the Company is first required to pay all administrative claims in full. Under the Plan, the Company established an escrow for the payment of certain professional fees incurred in connection with the Chapter 11 Cases (“Professional Fee Escrow”), which was fully paid out as of September 30, 2024. The Professional Fee Escrow was established based upon estimates and assumptions as of the date the Company emerged from bankruptcy. The Plan also required the Company to establish a $45 million reserve for allowed and disputed claims of general unsecured creditors (the “Claims Reserve”), including interest (although there can be no assurance the Company will be able to pay such claims in full, with interest). As of December 31, 2024,2025, $22.6$5.1 million was included in restricted short-term investments, which represents the initial Claims Reserve of $45 million, less $22.4$40.4 million which was released from the Claims Reserve related to the claims reconciliation process including $13.8 million of payments to creditors in connection with the Plan and $8.6 million released from the Claims Reserve as a result of claim settlements that were less than the Claims Reserve.process. Pursuant to the Plan (which includes certain exceptions), upon emergence (i) the Claims Ombudsman was appointed to oversee the administration of claims asserted against the Company by general unsecured creditors and (ii) a trustee was appointed to oversee the litigation claims held by the trust, which may be funded with certain retained causes of action of the Company, as determined by the Board.Board of Directors. Holders of certain unsecured claims are expected to be entitled to receive post-petition interest on their claim amount as of the later of the date the claim was due to be paid, or the petition date. Therefore, if the claims resolution process takes longer than anticipated, the total liability to settle claims will increase to reflect the increased interest expense.

Our assets consist of cash and cash equivalents, short-term investments, the Foxconn Litigation claims, claims the Company may have against other partiesparties, and NOLs. In addition, we have funded certain loan receivables as part of our ongoing post-emergence financial activities.

The following table provides a summary of the Company’s cash flow data for the period indicated (in thousands):

Net cash used in operating activities decreased by $102.1$27.9 million for the year ended December 31, 20242025 compared to 2023.2024. The decrease of cash cash used in operating activities, was principally due to the cessation of operations as a resultdecrease ofin thenet Chapterloss 11and Cases.change in operating assets and liabilities. The Company’s net loss, as adjusted to reconcile cash used by operating activities was $343.1$8.1 million for the year ended December 31, 2023,2024, compared to $8.1$0.6 million for same period of 2024.2025. The net loss, as adjusted to reconcile cash used by operating activities for the year ended December 31, 20232025 included non-cash$1.3 impairmentmillion chargesrealized gain on debt securities available for sale, $0.6 million in accreted investment income, $5.0 million of $140.7changes million,in $24.1operating million related to the write down of inventoryassets and prepaid inventory,liabilities, $0.9partially millionoffset forby the loss on disposal of fixed assets, $7.4$0.4 million of stock-based compensation, and $54.4 million in depreciation of property, plant and equipment and intangible assets, partially offset by $2.2 million of other non-cash charges.compensation. The $35.1 million million of cash used in operating activities for the year ended December 31, 2024 was comprised of the $8.1 million net loss for the period, period, a $34.9 million increase in accounts payable and accrued expenses, and $0.3 million realized gain on debt securities available for sale, partially offset by stock-based compensation of $3.5 million and a decrease in prepaid expenses of $4.7 million.

Net Cash Provided by (Used in) Provided by Investing Activities

Cash usedprovided forby investing activities was $18.6 million for the year ended December 31, 2025 compared to cash used in investing activities of $28.8 million for the year ended December 31, 20242024. comparedThe tonet inflow of cash provided byfrom investing activities of $102.9 million for the year ended December 31, 2025 2023.included $50.0 million in maturities of short-term investments, partially offset by $29.2 million in the purchase of short-term investments and $2.2 million of cash disbursed for the loan receivable. The increase of cash used in investing activities included $38.8 million in the purchase purchase of short-term investments, offset by $10.0 million in maturities of short-term investments for the year ended December 31, 2024. Investing activities for the year ended December 31, 2023, included $134.2 million in maturities of short-term investments, offset by $32.1 million in purchases of short-term investments and $10.2 million in purchases of property, plant, and equipment.

For the year ended December 31, 2025, the Company did not incur any cash activity related to financing activities. For the year ended December 31, 2024, financing activities were limited to tax withholding payments related to net-settled restricted stock compensation associated with the Company’s 2020 Equity Incentive Plan. The Company did not engage in any financing activities during the year ended December 31, 2023.

Our primary operations during the three and six months ended MarchJune 31,30, 2026 have consisted of actions and related expenditures associated with completing the Chapter 11 Cases and emerging from bankruptcy, resolving substantial litigation, claims reconciliation, financial reporting and regulatory compliance. Our assets consist of cash and cash equivalents, short-term investments, the Foxconn Litigation claims, claims the Company may have against other parties, and net operating loss carryforwards (“NOLs”). In addition, we have funded certain loans receivable as part of our ongoing post-emergence financial activities. Additional potential assets, such as the Foxconn Litigation claims, claims the Company may have against other parties, and NOLs, are not reflected in the financial statements.

In light of our emergence from bankruptcy on March 14, 2024, our results for the three and six months ended MarchJune 31,30, 2026 and 2025, reflect the the accounting assumptions and treatment caused by the Chapter 11 Cases and the Plan and may not be representative of our operations and and results going forward. See the risks and factors described in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2025 for further discussion of the risks associated with our emergence from bankruptcy, our liquidity, capital resources and financial condition, and the use of estimates and resulting uncertainty in establishing our presented financial financial results, among other risks.

Results of Operations for the three months ended MarchJune 31,30, 2026 and 2025

Selling, general, and administrative expenses (“SG&A”) decreased by $0.4$0.2 million to $1.5 million for the three months ended MarchJune 31,30, 2026 compared to $1.9$1.7 million for the three months ended MarchJune 31,30, 2025.

SG&A for the three months ended MarchJune 31,30, 2026 and 2025 consisted of personnel and professional fees and was lower than last year mainly due to lower legal and professional fees as the bankruptcy claims paymentspayment areand resolution process is winding down.

LegalThe Company had no legal settlement and litigation benefit,benefit net increased by $0.6 million to $0.8 million(expense) for the three months ended MarchJune 31,30, 2026 compared to $0.2$1.3 million for the three months ended MarchJune 31,30, 2025. This represents adjustments to accrued liabilities subject to compromise from claims as a result of the final settlement of claims.

The Company had cash and cash equivalents of approximately $25.1$21.5 million, short-term investments of $7.3$7.4 million and restricted short-term investments of approximately $2.6 million, an accumulated deficit of $1.2 billion at MarchJune 31,30, 2026, and a net loss of $0.1$1.2 million for the threesix months ended MarchJune 31,30, 2026.

We have incurred significant professional fees and other costs in connection with the prosecution of the Chapter 11 Cases and expect to continue to incur significant professional fees and costs. In addition, we are subject to significant contingent unliquidated liabilities, the full scope of which is uncertain at this time (see Note 7 - Commitments and Contingencies). Furthermore, under the Plan, we are conducting a process to reconcile the claims asserted that has resulted in approximately $2.6 million of the Company’s short-term investments being restricted for settling outstanding claims against the Company, including litigation and indemnification claims. Pursuant to the Bankruptcy Code, the Company is first required to pay all administrative claims in full. Under the Plan, the Company established an escrow for the payment of certain professional fees incurred in connection with the Chapter 11 Cases (“Professional Fee Escrow”), which was fully paid out as of September 30, 2024. The Professional Fee Escrow was established based upon estimates and assumptions as of the date the Company emerged from bankruptcy. The Plan also required the Company to establish a $45 million reserve for allowed and disputed claims of general unsecured creditors (the “Claims Reserve”), including interest (although there can be no assurance the Company will be able to pay such claims in full, with interest). As of March 31,June 30, 2026, $2.6 million was included in restricted short-term investments, which represents the initial Claims Reserve of $45 million, less $42.4 million which was released from the Claims Reserve related to the claims reconciliation process. Pursuant to the Plan (which includes certain exceptions), upon emergence (i) the Claims Ombudsman was appointed to oversee the administration of claims asserted against the Company by general unsecured creditors and (ii) a trustee was appointed to oversee the litigation claims held by the trust, which may be funded with certain retained causes of action of the Company, as determined by the Board of Directors. Holders of certain unsecured claims are expected to be entitled to receive post-petition interest on their claim amount as of the later of the date the claim was due to be paid, or the petition date. Therefore, if the claims resolution process takes longer than anticipated, the total liability to settle claims will increase to reflect the increased interest expense.

Net cash used in operating activities increaseddecreased by $0.8$0.5 million to $2.6$3.5 million for the threesix months ended MarchJune 31,30, 2026 compared to $1.8$4.0 million million for the threesix months ended MarchJune 31,30, 2025. The $2.6$3.5 million of cash used in operating activities for the threesix months ended March 31,June 30, 2026 was comprised of the $0.1 million net loss for the period, as adjusted to reconcile cash used by operating activities for the three months ended March 31, 2026 which included $2.7 million of changes in operating assets and liabilities, partially offset by $0.2 million of stock-based compensations. The $1.8 million of cash used in operating activities for the three months ended March 31, 2025 was comprised of the $1.2 million net loss for the period, as adjusted to reconcile cash used by operating activities for the threesix months months ended MarchJune 31,30, 20252026 which included $0.2$2.7 million of changes in operating assets and liabilities, partially offset by $0.4 million of stock-based compensations. The $4.0 million of cash used in operating activities for the six months ended June 30, 2025 was comprised of the $0.5 million net loss for the period, as adjusted to reconcile cash used by operating activities for the six months ended June 30, 2025 which included $0.9 million of realized gain on debt securities available for sale, $0.5$2.7 million of changes in operating assets and liabilities, partially offset by $0.1$0.2 million of stock-based compensation.compensations.

Net cash providedused byin investing activities was $10.0$9.4 million for the threesix months ended MarchJune 31,30, 2025,2026, which was entirely relateddue to maturitiesour issuance of loans receivable of short-term$9.4 investments.million.

For the threesix months ended MarchJune 31,30, 2026 and 2025, the Company had no financing activities.

The Company has no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of MarchJune 31,30, 2026. The Company does not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. The Company has not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.