Virtus Investment Partners, Inc.: Form 10-Q for the period ended Jun 30, 2026

Cautionary Statement Regarding Forward Looking Statements

This Quarterly Report on Form 10-Q contains statements that are, or may be considered to be, forward-looking statements within the meaning of federal securities laws, including Section 27A of the Securities Act of 1933, as amended (the "Securities Act"); and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"); and the Private Securities Litigation Reform Act of 1995, as amended. All statements that are not historical facts, including statements about our beliefs or expectations, are "forward-looking statements." These statements may be identified by such forward-looking terminology as "expect," "estimate," "intent," "plan," "intend," "believe," "anticipate," "may," "will," "should," "could," "continue," "project," "opportunity," "predict," "would," "potential," "future," "forecast," "guarantee," "assume," "likely," "target" or similar statements or variations of such terms.

Our forward-looking statements are based on a series of expectations, assumptions and projections about the Company and the markets in which we operate, are not guarantees of future results or performance, and involve substantial risks and uncertainty, including assumptions and projections concerning our assets under management, net asset inflows and outflows, operating cash flows, business plans and ability to borrow, for all future periods. All forward-looking statements contained in this Quarterly Report on Form 10-Q are as of the date of this Quarterly Report on Form 10-Q only.

We can give no assurance that such expectations or forward-looking statements will prove to be correct. Actual results may differ materially. We do not undertake or plan to update or revise any such forward-looking statements to reflect actual results, changes in plans, assumptions, estimates or projections, or other circumstances occurring after the date of this Quarterly Report on Form 10-Q, even if such results, changes or circumstances make it clear that any forward-looking information will not be realized. If there are any future public statements or disclosures by us that modify or impact any of the forward-looking statements contained in or accompanying this Quarterly Report on Form 10-Q, such statements or disclosures will be deemed to modify or supersede such statements in this Quarterly Report on Form 10-Q.

Our business and our forward-looking statements involve substantial known and unknown risks and uncertainties, including those discussed under "Risk Factors" and "Management’s Discussion and Analysis of Financial Condition and Results of Operations" in our 2025 Annual Report on Form 10-K and this Quarterly Report on Form 10-Q, resulting from: (i) reduction in our assets under management; (ii) financial or business risks from strategic transactions; (iii) withdrawal, renegotiation or termination of investment management agreements; (iv) damage to our reputation; (v) inability to satisfy debt covenants and required payments; (vi) lack of sufficient capital on satisfactory terms; (vii) inability to attract and retain key personnel; (viii) challenges from competition; (ix) adverse developments related to unaffiliated subadvisers; (x) negative changes in key distribution relationships; (xi) interruptions, breaches, or failures of technology systems; (xii) loss on our investments; (xiii) adverse regulatory and legal developments; (xiv) failure to comply with investment guidelines or other contractual requirements; (xv) adverse civil litigation, government investigations, or proceedings; (xvi) unfavorable changes in tax laws or unanticipated tax obligations; (xvii) impediments from certain corporate governance provisions; (xviii) losses or costs not covered by insurance; (xix) impairment of goodwill or other intangible assets; and other risks and uncertainties. Any occurrence of, or any material adverse change in, one or more risk factors or risks and uncertainties referred to above, in our 2025 Annual Report on Form 10-K, this Quarterly Report on Form 10-Q and our other periodic reports filed with the Securities and Exchange Commission (the "SEC") could materially and adversely affect our operations, financial results, cash flows, prospects and liquidity.

Certain other factors that may impact our continuing operations, prospects, financial results and liquidity, or that may cause actual results to differ from such forward-looking statements, are discussed or included in the Company’s periodic reports filed with the SEC and are available on our website at www.virtus.com (http://www.virtus.com) under "Investor Relations." You are urged to carefully consider all such factors.

Overview

Our Business

We provide investment management and related services to institutions and individuals. We use a multi-manager, multi-style approach, offering investment strategies from investment managers, each having its own distinct investment style, autonomous investment process and individual brand, as well as from select unaffiliated managers for certain of our retail funds. By offering a broad array of products, we believe we can appeal to a greater number of investors and have offerings across market cycles and through changes in investor preferences. Our earnings are primarily from asset-based fees charged for services relating to these various products, including investment management, fund administration, distribution, and shareholder services.

We offer investment strategies for institutional and individual investors in different investment products and through multiple distribution channels. Our investment strategies are available in a diverse range of styles and disciplines, managed by differentiated investment managers. We have offerings in various asset classes (equity, fixed income, multi-asset and alternatives), geographies (domestic, global, international and emerging), market capitalizations (large, mid and small), styles (growth, core and value) and investment approaches (fundamental and quantitative). Our institutional products are offered to a variety of institutional clients through institutional separate accounts and commingled accounts, including subadvisory services to other investment advisers as well as collateral management of structured products. Our retail products include open-end funds, closed-end funds and retail separate accounts.

Our institutional distribution resources include investment manager-specific sales teams primarily focused on the U.S. market, supported by shared consultant relations and U.S. and non-U.S. institutional sales distribution. Our institutional products are marketed through relationships with consultants as well as directly to clients. We target key market segments, including foundations and endowments, corporations, public and private pension plans, sovereign wealth funds and subadvisory relationships.

Our retail distribution resources in the U.S. consist of regional sales professionals, a national account relationship group and specialized teams for retirement and exchange traded funds ("ETFs"). Our U.S. retail funds, ETFs and intermediary sold retail separate accounts are distributed through financial intermediaries. We have broad distribution access in the U.S. retail market, with distribution partners that include national and regional broker-dealers, independent broker-dealers and registered investment advisers, banks and insurance companies. In many of these firms, we have a number of products that are on preferred "recommended" lists and on fee-based advisory programs. Our wealth management business is marketed directly to individual clients by financial advisory teams at our investment managers.

Financial Highlights

• Total revenues were $201.4 million in the second quarter of 2026, a decrease of $9.2 million, or 4.4%, compared to total revenues of $210.5 million in the second quarter of 2025.
• Operating income was $27.3 million in the second quarter of 2026, a decrease of $17.9 million, or 39.6%, compared to $45.2 million in the second quarter of 2025.
• Net income per diluted share was $6.68 in the second quarter of 2026, an increase of $0.56, or 9.2%, compared to net income per diluted share of $6.12 in the second quarter of 2025.

Keystone National Group

On March 1, 2026, the Company completed a majority investment in Keystone National Group ("Keystone"), an investment manager specializing in asset-centric private credit with $2.3 billion of assets under management at February 28, 2026.

Assets Under Management

Total sales were $6.1 billion in the second quarter of 2026, an increase of $0.5 billion, or 8.5%, from $5.6 billion in the second quarter of 2025. Net flows were $(5.6) billion in the second quarter of 2026 compared to net flows of $(3.9) billion in the second quarter of 2025.

At June 30, 2026, total assets under management were $152.2 billion, representing a decrease of $18.5 billion, or 10.9%, from June 30, 2025, and a decrease of $7.3 billion, or 4.6%, from December 31, 2025. The decrease in total assets under management from June 30, 2025 primarily included $26.0 billion from net outflows partially offset by $7.6 billion from positive market performance and $2.3 billion from the addition of Keystone. The decrease in total assets under management from December 31, 2025 included $14.1 billion from net outflows partially offset by $5.4 billion from positive market performance and $2.3 billion from the addition of Keystone.

Assets Under Management by Product

The following table summarizes our assets under management by product:

(in millions)

(1) Represents U.S. retail funds, ETFs and global funds.

(2) Consists of traditional closed-end and tender offer funds.

(3) Includes investment models provided to managed account sponsors.

(4) Represents institutional separate and commingled accounts including structured products.

(5) Calculated according to revenue earning basis that includes average daily, weekly, monthly beginning balance, monthly ending balance, or quarter beginning and ending balance, as well as quarter beginning or ending spot balance.

Asset Flows by Product

The following table summarizes asset flows by product:

(in millions)

23

(in millions)

(1) Represents U.S. retail funds, ETFs and global funds.

(2) Represents open-end and closed-end fund distributions net of reinvestments, the impact of non-sales related activities such as asset acquisitions/(dispositions), seed capital investments/(withdrawals), current income or capital returned by structured products and the use of leverage.

(3) Consists of traditional closed-end and tender offer funds.

(4) Primarily represents fund shares repurchased due to tender offers.

(5) Includes investment models provided to managed account sponsors.

(6) Represents institutional separate and commingled accounts including structured products.

Assets Under Management by Asset Class

The following table summarizes assets under management by asset class:

(in millions)

(1) Consists of multi-asset offerings not included in equity, fixed income and alternatives.

(2) Consists of listed real estate, managed futures, infrastructure, event-driven, private markets and other strategies.

Average Assets Under Management and Average Fees Earned

The following tables summarize the average management fees earned in basis points and average assets under management:

(1) Represents U.S. retail funds, ETFs and global funds.

(2) Consists of traditional closed-end and tender offer funds.

(3) Includes investment models provided to managed account sponsors.

(4) Represents institutional separate and commingled accounts including structured products.

(5) Calculated according to revenue earning basis that includes average daily, weekly, monthly beginning balance, monthly ending balance, or quarter beginning and ending balance, as well as quarter beginning or ending spot balance.

Average fees earned represent investment management fees, net of revenue-related adjustments, and excluding the impact of consolidated investment products ("CIP") divided by average net assets. Revenue-related adjustments are based on specific agreements and reflect the portion of investment management fees passed-through to third-party client intermediaries for services to investors in sponsored investment products. Fund fees are calculated based on average daily, weekly, or monthly ending net asset balances. Retail separate account fees, which include fees for wealth management accounts, are calculated based on the end of the preceding or current quarter’s asset values or on an average of month-end balances. Institutional account fees are calculated based on an average of month-end balances, an average of current quarter’s asset values, the end of the preceding quarter or month's net assets or on a combination of the underlying cash flows and the principal value of the product. Average fees earned will vary based on several factors, including the asset mix and expense reimbursements to the funds.

The average fee rate earned increased for the three and six months ended June 30, 2026 compared to the same periods in the prior year primarily due to higher fee rates earned on the assets under management acquired from Keystone partially offset by a shift in the asset mix in our open-end funds to certain strategies, which have a lower fee rate.

Results of Operations

Summary Financial Data

(in thousands)

N/M = Not Meaningful

In the second quarter of 2026, total revenues decreased 4.4% to $201.4 million from $210.5 million in the second quarter of 2025, primarily as a result of decreased average assets under management, partially offset by the addition of Keystone. Operating income decreased by $17.9 million to $27.3 million in the second quarter of 2026 compared to $45.2 million in the second quarter of 2025, due primarily to an increase in amortization expenses as a result of the Keystone acquisition and decreased revenues as mentioned above.

Revenues

Revenues by source were as follows:

(in thousands)

Investment Management Fees

Investment management fees are earned based on a percentage of assets under management and are paid pursuant to the terms of the respective investment management agreements, which generally require monthly or quarterly payments. Investment management fees decreased by $8.6 million, or 4.8%, and $25.6 million, or 7.0%, for the three and six months ended June 30, 2026, respectively, compared to the same periods in the prior year primarily due to decreased average assets under management.

Administration and Shareholder Service Fees

Administration and shareholder service fees represent fees earned for fund administration and shareholder services from our U.S. retail funds, ETFs and traditional closed-end funds. Fund administration and shareholder service fees decreased $0.7 million, or 3.9%, and $1.4 million, or 3.9%, during the three and six months ended June 30, 2026, respectively, compared to the same periods in the prior year primarily due to the decrease in average assets under management of our U.S. retail funds partially offset by increased closed-end fund administration fees.

Distribution and Service Fees

Distribution and service fees are sales- and asset-based fees earned from open-end funds for marketing and distribution services. Distribution and service fees remained consistent and decreased by $1.3 million, or 5.4%, for the three and six months ended June 30, 2026, respectively, compared to the same periods in the prior year. The decrease during the six month period is primarily due to lower sales and average assets under management for open-end funds in share classes that have sales- and asset-based distribution and service fees.

Other Income and Fees

Other income and fees primarily represent fees related to other fee-earning assets and marketing fees earned on certain ETFs. Other income and fees increased $0.4 million, or 36.9%, and $0.8 million, or 35.9%, for the three and six months ended June 30, 2026, respectively, compared to the same periods in the prior year primarily due to increased marketing fees earned on ETFs during the current year periods.

Operating Expenses

Operating expenses by category were as follows:

(in thousands)

N/M = Not Meaningful

Employment Expenses

Employment expenses consist of fixed and variable compensation and related employee benefit costs. Employment expenses increased by $4.4 million, or 4.5%, and $0.6 million, or 0.3%, for the three and six months ended June 30, 2026, respectively, primarily due to the addition of Keystone employees and an increase in stock-based compensation expense partially offset by a decrease in incentive compensation.

Distribution and Other Asset-Based Expenses

Distribution and other asset-based expenses consist primarily of payments to third-party client intermediaries for providing services to investors in sponsored investment products. These payments are primarily based on assets under management. Distribution and other asset-based expenses decreased $1.7 million, or 7.7%, and $4.1 million, or 9.0%, for the three and six months ended June 30, 2026, respectively, primarily due to decreases in assets under management in share classes that have asset-based distribution and other asset-based expenses.

Other Operating Expenses

Other operating expenses consist primarily of investment research and technology costs, software application and development expenses, professional fees, travel and distribution-related costs, rent and occupancy expenses, and other business costs. Other operating expenses remained consistent for the three months ended June 30, 2026 and 2025, and increased $2.8 million, or 4.2%, for the six months ended June 30, 2026 compared to the same periods in the prior year primarily due to transaction costs and ongoing costs associated with the Keystone acquisition partially offset by decreased rent associated with lease terminations in the prior year.

Other Operating Expenses of CIP

Other operating expenses of CIP were consistent for the three months ended June 30, 2026 and 2025, and increased by $1.1 million, or 62.5%, for the six months ended June 30, 2026, compared to the same periods in the prior year primarily due to refinancing activities associated with one CLO in the current year.

Change in Fair Value of Contingent Consideration

Contingent consideration related to the Company's acquisitions are fair valued on each reporting date incorporating changes in various estimates, including underlying performance estimates, discount rates and amount of time until the conditions of the contingent payments are achieved. The change in fair value is recorded in the current period as a gain or loss. The change in fair value of contingent consideration for the three and six months ended June 30, 2026 was primarily attributable to changes in underlying performance estimates and the passage of time.

Restructuring Expense

During the three and six months ended June 30, 2026, the Company incurred $0.8 million and $3.7 million, respectively, in restructuring expense related to severance costs.

Depreciation Expense

Depreciation expense consists primarily of the straight-line depreciation of furniture, equipment and leasehold improvements. Depreciation expense decreased by $0.3 million, or 16.3%, for the three months ended June 30, 2026 primarily due to computer equipment in the current year becoming fully depreciated. Depreciation expense decreased $1.0 million, or 23.1%, for the six months ended June 30, 2026, compared to the same period in the prior year primarily due to the prior year acceleration of depreciation on leasehold improvements associated with a terminated lease and a decrease in depreciation expense on computer equipment in the current year due to these assets becoming fully depreciated.

Amortization Expense

Amortization expense consists of the amortization of definite-lived intangible assets over their estimated useful lives. Amortization expense increased by $7.1 million, or 54.9%, and $9.3 million, or 36.1%, for the three and six months ended June 30, 2026, respectively, compared to the same periods in the prior year, primarily due to the additional amortization associated with the Keystone acquisition.

Other Income (Expense)

Other Income (Expense), net by category were as follows:

(in thousands)

N/M = Not Meaningful

Realized and unrealized gain (loss) on investments, net

Realized and unrealized gain (loss) on investments, net changed during the three and six months ended June 30, 2026 by $0.6 million and $2.4 million compared to the same periods in the prior year. The change for the three and six months ended June 30, 2026 is primarily attributable to an increase in realized gains due to changes in market values of our investments.

Realized and unrealized gain (loss) of CIP, net

Realized and unrealized gain (loss) of CIP, net changed by $19.6 million and $12.9 million for the three and six months ended June 30, 2026, respectively, compared to the same periods in the prior year. The change for the three months ended June 30, 2026 consisted primarily of changes in net unrealized and realized gains of $39.8 million due to changes in market values of leveraged loans, partially offset by net unrealized losses of $20.2 million related to the value of the notes payable. The change for the six months ended June 30, 2026 consisted primarily of changes in net unrealized and realized gains of $20.3 million due to changes in market values of leveraged loans, partially offset by net unrealized losses of $7.4 million related to the value of the notes payable.

Other income (expense), net

Other income (expense) changed by $(1.9) million and $(2.2) million for the three and six months ended June 30, 2026, respectively, compared to the same periods in the prior year primarily due to noncontrolling interest liability distributions partially offset by changes in the gains on our equity method investments.

Interest Income (Expense)

Interest Income (Expense), net by category were as follows:

(in thousands)

Interest Expense

Interest expense increased $2.6 million, or 56.0%, and $4.8 million, or 52.1%, for the three and six months ended June 30, 2026, primarily due to increased average debt outstanding during the current year periods.

Interest and Dividend Income

Interest and dividend income is earned on cash equivalents and marketable securities. Interest and dividend income decreased $0.7 million, or 33.2%, and $0.8 million, or 14.8%, for the three and six months ended June 30, 2026, compared to the same periods in the prior year primarily due to lower average interest rates.

Interest and Dividend Income of Investments of CIP

Interest and dividend income of investments of CIP increased $0.7 million, or 1.5%, and $1.8 million, or 1.9%, for the three and six months ended June 30, 2026, respectively, compared to the same periods in the prior year, primarily due to the addition of a CLO in the fourth quarter of 2025 partially offset by lower interest rates.

Interest Expense of CIP

Interest expense of CIP represents interest expense on the notes payable of CIP. Interest expense of CIP remained consistent and decreased by $0.5 million, or 0.7%, for the three and six months ended June 30, 2026, respectively, compared to the same periods in the prior year. The decrease during the six months ended June 30, 2026 is primarily due to lower interest rates partially offset by the addition of a CLO in the fourth quarter of 2025.

Income Tax Expense (Benefit)

The provision for income taxes reflected U.S. federal, state and local taxes at an estimated effective tax rate of 23.5% and 25.9% for the six months ended June 30, 2026 and 2025, respectively. The lower estimated effective tax rate for the six months ended June 30, 2026 was primarily due to a change in valuation allowances in the current year related to the tax effects of higher realized and unrealized gains on Company investments compared to the prior year.

Liquidity and Capital Resources

Certain Financial Data

The following table summarizes certain financial data relating to our liquidity and capital resources:

(in thousands)

N/M = Not Meaningful

N/M = Not Meaningful

Overview

At June 30, 2026, we had $176.2 million of cash and cash equivalents and $139.9 million of investments, which included $49.7 million of investment securities, compared to $386.5 million of cash and cash equivalents and $157.5 million of investments, which included $76.5 million of investment securities, at December 31, 2025.

Uses of Capital

Our operating expenses consist of employee compensation and related benefit costs and other operating expenses, which primarily consist of costs related to distribution, investment research and data, occupancy, software application and development and professional fees, as well as interest on our indebtedness and income taxes. Annual incentive compensation, our largest annual operating cash expenditure, is paid in the first quarter of the year. In 2026 and 2025, we paid $144.8 million and $158.4 million, respectively, in incentive compensation earned during the years ended December 31, 2025 and 2024, respectively.

In addition to operating activities, other uses of cash could include: (i) investments in organic growth, including seeding or launching new products and expanding distribution; (ii) debt principal payments through scheduled amortization or additional paydowns; (iii) dividend payments to common stockholders; (iv) repurchases of our common stock, or withholding obligations for the net settlement of employee share transactions; (v) investments in our technology infrastructure; (vi) investments in inorganic growth opportunities that may require upfront and/or future payments; (vii) integration costs, including restructuring and severance, related to acquisitions, if any; and (viii) purchases of investment manager equity interests.

Capital and Reserve Requirements

Certain of our subsidiaries are registered with the SEC, Central Bank of Ireland, Financial Conduct Authority or other regulators that subject them to certain rules regarding minimum net capital. Failure to meet these requirements could result in adverse consequences to us, including additional reporting requirements, or interruption of our business. At June 30, 2026, our broker-dealer net capital was significantly greater than the required minimum.

Balance Sheet

Cash and cash equivalents consist of cash in banks and money market fund investments. Investments consist primarily of investments in our sponsored funds. CIP represent investment products for which we provide investment management services and where we have either a controlling financial interest or are considered the primary beneficiary of an investment product that is considered a variable interest entity.

Operating Cash Flow

Net cash provided by operating activities of $93.3 million for the six months ended June 30, 2026 increased by $21.4 million from net cash provided by operating activities of $72.0 million for the same period in the prior year primarily due to an increase of $20.4 million in net sales of investments by CIP and $20.0 million in net sales of investments by us, partially offset by a $20.0 million decrease in net income in the current year period.

Investing Cash Flow

Cash flows from investing activities consist primarily of acquisitions of businesses, capital expenditures and other investing activities related to our business operations. Net cash used in investing activities of $199.8 million for the six months ended June 30, 2026 increased by $195.8 million from net cash used in investing activities of $4.0 million for the same period in the prior year primarily due to the acquisition of Keystone.

Financing Cash Flow

Cash flows from financing activities consist primarily of transactions related to our common shares, issuance and repayment of debt by us and CIP, payments of contingent consideration and purchases and sales of noncontrolling interests. Net cash used in financing activities of $84.4 million for the six months ended June 30, 2026 decreased by $142.1 million from net cash used of $226.5 million for the same period in the prior year primarily due to an increase of $96.1 million in net borrowings of CIP and $29.4 million in net borrowings by us, and a $29.5 million decrease in repurchases of common shares during the current year period.

Credit Agreement

The Company's credit agreement (the "Credit Agreement") provides for (i) a $400.0 million term loan for the Company with a seven-year term (the "Term Loan") expiring in September 2032, and (ii) a $250.0 million revolving credit facility (the "Revolver") with a five-year term expiring in September 2030. The Company borrowed $50.0 million under the Revolver during the six months ended June 30, 2026. During the six months ended June 30, 2026, the Company repaid $20.0 million and $2.0 million outstanding under the Revolver and Term Loan, respectively. At June 30, 2026, the Company had $30.0 million and $397.0 million outstanding under the Revolver and Term Loan, respectively. In accordance with ASC 835, Interest, the amounts outstanding under the Company's Term Loan are presented on the Condensed Consolidated Balance Sheets net of related debt issuance costs, which were $8.4 million as of June 30, 2026.

Critical Accounting Policies and Estimates

Our financial statements and the accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America, which require the use of estimates. Actual results will vary from these estimates. A discussion of our critical accounting policies and estimates is included in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2025 Annual Report on Form 10-K. A complete description of our significant accounting policies is included in our 2025 Annual Report on Form 10-K. There were no material changes in our critical accounting policies and estimates in the three months ended June 30, 2026.

Recently Issued Accounting Pronouncements

For a discussion of accounting standards, see Note 2 in our condensed consolidated financial statements.

The Company is primarily exposed to market risk associated with unfavorable movements in interest rates and securities prices. During the three and six months ended June 30, 2026, there were no material changes to the information contained in Part II, Item 7A of the Company's 2025 Annual Report on Form 10-K.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures designed to ensure that information required to be disclosed in reports filed or submitted under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q. Consistent with guidance issued by the Securities and Exchange Commission that an assessment of internal controls over financial reporting of a recently acquired business may be omitted from management's evaluation of disclosure controls and procedures, management is excluding an assessment of the internal controls of Keystone, which was acquired by the Company on March 1, 2026, from its evaluation of the effectiveness of the Company's disclosure controls and procedures. Keystone represented approximately 12.3% of the Company's consolidated total assets at June 30, 2026 and 6.9% and 4.8% of the Company's consolidated total revenues as of and for the three and six months ended June 30, 2026, respectively.

Based on their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2026, the end of the period covered by this Quarterly Report on Form 10-Q.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) or 15d-15(f) under the Exchange Act) identified in connection with the evaluation required by Rules 13a-15(d) or 15d-15(d) of the Exchange Act that occurred during the period covered by this Quarterly Report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

There have been no material changes to the Company’s risk factors from those previously reported in our 2025 Annual Report on Form 10-K.