0001493152-26-014105
SEC filingFY2025 marked a challenging year with revenue declining 6.3% to $2.2M and gross profit turning negative at -$350K, as operating losses widened to -$3.7M amid growth investments in aging services outpacing topline stability.
MDwerks faced intensified financial pressures in FY2025, with revenue at $2.2M reflecting a 6.3% year-over-year decline from $2.4M. This topline softness occurred as the company advanced its spirits rapid aging services (SRAS), including beginning to age tanker loads of distillate at its facility for a customer to meet immediate demand for aged spirits. Investors should note these operational steps signal commitment to the patented RF aging technology, though they coincided with revenue contraction.
Gross profitability deteriorated sharply, flipping to a -$350K loss from $874K profit prior year—a -140.1% swing yielding a -15.8% margin. This erosion underscores cost challenges in production and services, particularly within the SRAS model where customers lack cancellation privileges post-shipment beyond customary returns, providing some revenue stability. The negative gross position amplified downstream impacts, contributing to operating income plunging -148.6% to -$3.7M (-168.7% margin) from -$1.5M.
Net results reflected this trajectory, with losses widening -134.3% to -$3.8M and diluted EPS to -$0.02 from -$0.01. A note receivable impairment loss in 2024 had previously pressured results, partially offset by higher 2025 interest expense, illustrating ongoing non-operating drags.
Cash flow dynamics highlighted investment intensity: operating activities consumed -$1.6M, doubling prior year's -$782K outflow, while $872K in capital expenditures—primarily SRAS-related—drove free cash flow to -$2.4M. These outlays support scaling, evidenced by early 2026 completion of higher-capacity SRAS installation at the Two Trees facility to boost aging services and brand production.