Business Context and Reporting Period
Company: GAXOS.AI INC. (Nasdaq: GXAI)
Filing Type: Form 10-K (Annual Report)
Period Ended: December 31, 2025
Business Overview: GAXOS.AI is a technology company developing AI-powered solutions across defense, health, wellness, entertainment, and productivity. Key segments include Gaxos Labs (AI applications for game developers and content creation), Gaxos Health (AI-driven wellness optimization), RNK Health (non-clinical administrative services for telehealth), and Gaxos Gaming (AI-integrated gaming platform with NFT capabilities). The company is classified as an Emerging Growth Company and a Smaller Reporting Company.
Key Financial Metrics
| Metric | 2025 | 2024 |
|---|---|---|
| Total Revenue | $1,933,030 | $4,027 |
| Net Loss | $(4,282,247) | $(3,424,283) |
| Net Loss Attributable to Common Shareholders | $(3,900,583) | $(3,418,197) |
| Loss Per Share (Basic & Diluted) | $(0.55) | $(1.92) |
| Operating Cash Flow | $(3,853,757) | $(3,280,397) |
| Cash and Cash Equivalents (Year End) | $840,799 | $14,398,099 |
| Short-Term Investments | $11,345,187 | $2,167,419 |
| Working Capital | $11,919,230 | $16,427,618 |
Note: The filing text does not provide explicit gross margin or operating margin percentages; however, the company reported a loss from operations of $4,916,526 for 2025.
Material Changes vs. Prior Period
- Revenue Surge: Revenue increased by approximately 47,800% year-over-year, driven primarily by the launch of RNK Health administrative services ($1.51M) and Gaxos Labs subscription services ($422K).
- Expense Growth: Operating expenses rose 84.7% to $6.85M. This was largely due to a 739.2% increase in advertising and marketing expenses ($3.08M vs. $367K) to support RNK Health and Gaxos Labs, and a 45.5% increase in compensation costs.
- Liquidity Shift: While cash on hand decreased significantly from $14.4M to $0.84M, the company aggressively deployed capital into short-term investments, increasing this balance from $2.17M to $11.35M.
- Net Loss: Net loss increased by 25.1% to $4.28M, though the loss per share improved significantly due to a substantial increase in the weighted average shares outstanding (from 1.78M to 7.09M) following capital raises and warrant exercises.
Guidance, Outlook, Risks, and Unusual Items
Outlook and Capital Strategy: The company expects to continue generating operating losses in the foreseeable future due to corporate overhead, R&D, and public company costs. Management believes existing working capital and cash on hand are sufficient for the next 12 months. To support growth, the company entered into an "At-The-Market" (ATM) offering agreement in January 2026 to sell up to $5.6M of common stock. Between January and March 2026, the company issued approximately 3.1M shares for net proceeds of ~$5.4M.
Recent Strategic Moves: On March 2, 2026, the company agreed to purchase a 19.99% membership interest in America First Defense.AI LLC for $2.9M, closing on March 5, 2026.
Key Risks:
- Limited Operating History: The company has not generated sustainable revenue since inception and faces significant risks in commercializing new products.
- Liquidity Dependence: Future operations depend on obtaining additional debt or equity financing, which may not be available on acceptable terms.
- Regulatory and AI Risks: Exposure to evolving AI regulations (e.g., EU AI Act), data privacy laws (HIPAA, GDPR), and cybersecurity threats.
- Competition: Intense competition in AI, gaming, and health sectors from well-funded incumbents.
Investor Verification Checklist
- Revenue Sustainability: Verify the recurring nature of RNK Health revenue and the retention rates for Gaxos Labs subscriptions.
- Cash Burn Rate: Assess the runway provided by the $12.2M in liquid assets (cash + short-term investments) against the $3.85M annual operating cash burn.
- Dilution Impact: Review the impact of the recent ATM offering and the 3.1M shares issued in Q1 2026 on existing shareholder equity.
- Investment Portfolio: Confirm the liquidity and valuation of the $11.35M short-term investment portfolio (corporate bonds and equity funds).
- Acquisition Integration: Monitor the integration and financial impact of the $2.9M investment in America First Defense.AI LLC.