Crawford & Co: Form 10-Q for the period ended Jun 30, 2026

Cautionary Statement Concerning Forward-Looking Statements

This report contains forward-looking statements within the meaning of that term in the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. Statements contained in this report that are not statements of historical fact are forward-looking statements made pursuant to the "safe harbor" provisions thereof. These statements may relate to, among other things, our expected future operating results and financial condition, our ability to grow our revenues and reduce our operating expenses, expectations regarding our anticipated contributions to our underfunded defined benefit pension plans, collectability of our billed and unbilled accounts receivable, financial results from our recently completed acquisitions, our continued compliance with the financial and other covenants contained in our financing agreements, and our other long-term capital resource and liquidity requirements. These statements may also relate to our business strategies, goals and expectations concerning our market position, future operations, margins, case and project volumes, profitability, contingencies, liquidity position, and capital resources. The words "anticipate", "believe", "could", "would", "should", "estimate", "expect", "intend", "may", "plan", "goal", "strategy", "predict", "project", "will" and similar terms and phrases, or the negatives thereof, identify forward-looking statements contained in this report.

Although we believe the assumptions upon which these forward-looking statements are based are reasonable, any of these assumptions could prove to be inaccurate and the forward-looking statements based on these assumptions could be incorrect. Our operations and the forward-looking statements related to our operations involve risks and uncertainties, many of which are outside our control, and any one of which, or a combination of which, could materially adversely affect our financial condition and results of operations, and whether the forward-looking statements ultimately prove to be correct. Included among the risks and uncertainties we face are risks related to the following:

• a decline in cases referred to us for any reason, including changes in the degree to which property and casualty insurance carriers outsource their claims handling functions,
• changes in global economic conditions, including the impact of tariffs,
• the impact of changing climate conditions,
• changes in interest rates,
• changes in foreign currency exchange rates,
• changes in regulations and practices of various governmental authorities,
• changes in our competitive environment,
• changes in the financial condition of our clients,
• changes in the rate of inflation and our ability to recover increased operating costs,
• the loss of any material customer,
• our ability to successfully integrate the operations of acquired businesses,
• our ability to timely identify and effectively remediate material weaknesses in internal control over financial reporting,
• regulatory changes related to funding of defined benefit pension plans,
• our U.S., U.K. and other international defined benefit pension plans and our future funding obligations thereunder,
• our ability to complete any transaction involving the acquisition or disposition of assets on terms and at times acceptable to us,
• our ability to identify new revenue sources not tied to the insurance underwriting cycle,
• our ability to develop or acquire information technology resources to support and grow our business,
• our ability to attract and retain qualified personnel,
• our ability to renew existing contracts with clients on satisfactory terms,
• our ability to collect amounts due from our clients and others,
• continued availability of funding under our financing agreements,
• general risks associated with doing business outside the U.S., including changes in tax rates,
• our ability to comply with the covenants in our financing or other agreements,
• changes in the frequency or severity of man-made or natural disasters,
• the ability of our third-party service providers, used for certain aspects of our internal business functions, to meet expected service levels,
• our ability to prevent or detect cybersecurity breaches and cyber incidents,
• our ability to achieve targeted integration goals with the consolidation and migration of multiple software platforms,
• proliferation and escalation of international hostilities and geopolitical events, such as the ongoing conflicts in the Middle East and Russia/Ukraine,
• risks associated with our having a controlling shareholder, and
• impairments of goodwill or our other indefinite-lived intangible assets.

As a result, undue reliance should not be placed on any forward-looking statements. Actual results and trends in the future may differ materially from those expressed or implied by the forward-looking statements. Forward-looking statements speak only as of the date they are made and we undertake no obligation to publicly update any of these forward-looking statements in light of new information or future events.

The following Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") should be read in conjunction with (i) our unaudited condensed consolidated financial statements and accompanying notes thereto for the three and six months ended June 30, 2026 and 2025, and as of June 30, 2026, and December 31, 2025, contained in Item 1 of this Quarterly Report on Form 10-Q, and (ii) our Annual Report on Form 10-K for the year ended December 31, 2025. As described in Note 1, "Basis of Presentation," the financial results of our operations outside of the U.S., Canada, the Caribbean, and certain subsidiaries in the Philippines are included in our consolidated financial statements on a two-month delayed basis (fiscal year-end of October 31) as permitted by U.S. generally accepted accounting principles ("GAAP") in order to provide sufficient time for accumulation of their results.

Results of Operations

Consolidated revenues before reimbursements decreased $1.6 million, or (0.5)%, for the three months ended June 30, 2026, compared with the same period of 2025. This decrease was primarily driven by lower volumes in our U.S. Property & Casualty reportable segment, as well as revenue reductions due to the disposal of the Crawford Legal Services businesses in our International Operations reportable segment. Changes in foreign exchange rates increased our consolidated revenues before reimbursements by $7.7 million, or 2.4%, for the three months ended June 30, 2026 and increased revenues by $15.5 million, or 2.5%, for the six months ended June 30, 2026, as compared with the prior year periods. To illustrate this impact, segment revenues are presented below, using a constant exchange rate, for the three and six months ended June 30, 2026.

(in thousands, except percentages)

(in thousands, except percentages)

Excluding foreign currency impacts, consolidated revenues before reimbursements decreased $9.3 million, or (2.9)%, for the three months ended June 30, 2026 and decreased $19.6 million, or (3.1)%, for the six months ended June 30, 2026 compared with the same periods of 2025. Revenues from the U.S. Property & Casualty segment decreased in the 2026 second quarter and year to date period primarily due to a continued decrease in staff augmentation and weather-driven services within our Catastrophe Services and Contractor Connection businesses. Revenues from the Broadspire segment increased for each of the 2026 periods due to an increase in Claims and Medical Management revenues, partially offset by a reduction in Subrogation revenues. Excluding foreign currency impacts, revenues from the International Operations segment decreased in the 2026 second quarter compared with the same period in 2025 due to reductions in the U.K. and Latin America, partially offset by revenue increases in Australia, Canada, and Asia. Excluding foreign currency impacts, revenues from the International Operations segment decreased in the six months ended June 30, 2026 as compared to the same period in 2025 due to reductions in the U.K., Europe, and Latin America, partially offset by revenue increases in Australia, Canada, and Asia.

Overall, there were slight increases in cases received of 0.1% and 0.4% for the three and six months ended June 30, 2026, respectively. Within our U.S. Property & Casualty segment, cases decreased for the three and six months ended June 30, 2026 as a result of a weather-related reduction in all service lines. There was a slight decrease in cases within our Broadspire segment for the three months ended June 30, 2026 as compared to the prior year period due to a decline in Subrogation cases. For the six months ended June 30, 2026, Broadspire cases increased due primarily to increases in new disability clients within our Claims Management service line, partially offset by a decline in Subrogation cases and decreased casualty claims within our Claims Management service line. Cases within our International Operations segment increased for the three and six months ended June 30, 2026, as compared to the prior year period, primarily due to an increase in high-frequency, low-severity cases in Spain.

Cases received are presented below by segment for the three and six months ended June 30, 2026 and 2025:

(whole numbers, except percentages)

To illustrate exposure to the impact of changes in foreign currencies, revenues before reimbursements are presented below by denominated currency for the three and six months ended June 30, 2026:

(in thousands)

(in thousands)

Costs of services provided, before reimbursements, increased $1.7 million, or 0.8%, for the three months ended June 30, 2026 and increased $1.2 million, or 0.3%, for the six months ended June 30, 2026, as compared to the 2025 periods. As a percentage of revenues before reimbursements, costs of services decreased consistent with the decrease in revenues.

Selling, general, and administrative ("SG&A") expenses decreased $8.7 million, or (11.1)%, in the three months ended June 30, 2026 and $7.1 million, or (4.7)%, for the six months ended June 30, 2026 as compared with the 2025 periods. The decrease was primarily due to a $3.1 million one-time indirect tax expense in the 2025 second quarter and lower compensation costs, partially offset by a $2.3 million software impairment charge.

Operating Earnings of our Operating Segments

We believe that a discussion and analysis of the segment operating earnings of our operating segments is helpful in understanding the results of our operations. Operating earnings is our segment measure of profitability presented in conformity with the Financial Accounting Standards Board's ("FASB") Accounting Standards Codification ("ASC") Topic 280 "Segment Reporting." Operating earnings is the primary financial performance measure used by our senior management and CODM to evaluate the financial performance of our operating segments and make resource allocation and certain compensation decisions.

We believe operating earnings is a measure that is useful for others to evaluate segment operating performance using the same criteria used by our senior management and CODM. Segment operating earnings represents segment earnings, including the direct and indirect costs of certain administrative functions required to operate our business, but excludes unallocated corporate and shared costs and credits, net corporate interest expense, stock option expense, amortization of acquisition-related intangible assets, contingent earnout adjustments, non-service pension costs, income taxes, loss on disposal of businesses, net, software impairment, and net (income) loss attributable to noncontrolling interests.

Administrative functions such as finance, human resources, information technology, quality and compliance, exist both in a centralized shared-service arrangement and within certain operations. Each of these functions is managed by centralized management and the costs of those services are allocated to the segments as indirect costs based on usage.

In addition, we believe that a non-GAAP discussion and analysis of segment gross profit is helpful in understanding the results of our segment operations, excluding indirect centralized administrative support costs. Our discussion and analysis of segment gross profit includes the revenues and direct expenses of each segment. Segment gross profit is defined as revenues, less direct costs, which exclude indirect centralized administrative support costs allocated to the business.

Income taxes, net corporate interest expense, stock option expense, amortization of acquisition-related intangible assets, contingent earnout adjustments, and non-service pension costs are recurring components of our net income, but they are not considered part of our segment operating earnings because they are managed on a corporate-wide basis. Income taxes are calculated for the Company on a consolidated basis based on statutory rates in effect in the various jurisdictions in which we provide services, and vary significantly by jurisdiction. Net corporate interest expense results from capital structure decisions made by senior management and the Board of Directors, affecting the Company as a whole. Stock option expense represents the non-cash costs generally related to stock options and employee stock purchase plan expenses which are not allocated to our operating segments. Contingent earnout adjustments represent fair value adjustments of earnout liabilities arising from recent acquisitions. Amortization expense is a non-cash expense for finite-lived customer-relationship and trade name intangible assets acquired in business combinations. Non-service pension costs represent the U.S. and U.K. non-service defined benefit pension costs, which are non-operating in nature as the U.S. plan is frozen and the U.K. plans are closed to new participants. The service cost component of the U.K. plans remains in compensation expense. The exclusion of this measurement is intended to exclude market volatility related to an expense that is non-operating in nature and not related to business performance. None of these costs relate directly to the performance of our services or operating activities and, therefore, are excluded from segment operating earnings in order to better assess the results of each segment's operating activities on a consistent basis.

Unallocated corporate and shared costs and credits include expenses and credits related to our chief executive officer and Board of Directors, certain provisions for bad debt allowances or subsequent recoveries such as those related to bankrupt clients, certain unallocated professional fees, certain payroll tax and benefits, and certain self-insurance costs and recoveries that are not allocated to our individual operating segments.

Additional discussion and analysis of our income taxes, net corporate interest expense, stock option expense, amortization of acquisition-related intangible assets, contingent earnout adjustments, non-service pension costs, and unallocated corporate and shared costs, net follows the discussion and analysis of the results of operations of our three operating segments.

Segment Revenues

In the normal course of business, our segments incur certain out-of-pocket expenses that are thereafter reimbursed by our clients. Under GAAP, these out-of-pocket expenses and associated reimbursements are required to be included when reporting expenses and revenues, respectively, in our consolidated results of operations as we are considered the principal in these transactions. In the discussion and analysis of results of operations which follows, we do not include a gross up of expenses and revenues for these pass-through reimbursed expenses. The amounts of reimbursed expenses and related revenues offset each other in our results of operations with no impact to our net income or operating earnings. A reconciliation of revenues before reimbursements to consolidated revenues determined in accordance with GAAP is self-evident from the face of the accompanying statements of operations. Unless noted in the following discussion and analysis, revenue amounts exclude reimbursements for out-of-pocket expenses.

Our segment results are impacted by changes in foreign exchange rates. We believe that a non-GAAP discussion and analysis of segment revenues before reimbursements by major region, based on actual exchange rates and using a constant exchange rate, is helpful in understanding the results of our segment operations.

Segment Expenses

Our discussion and analysis of segment operating expenses is comprised of two components: "Direct Compensation, Fringe Benefits & Non-Employee Labor" and "Expenses Other Than Direct Compensation, Fringe Benefits & Non-Employee Labor."

"Direct Compensation, Fringe Benefits & Non-Employee Labor" includes direct compensation, payroll taxes, and benefits provided to the employees of each segment, as well as payments to outsourced service providers that augment our staff in each segment. As a service company, these costs represent our most significant and variable operating expenses.

Costs of administrative functions, including direct compensation, payroll taxes, and benefits, are managed centrally and considered indirect costs. The allocated indirect costs of our shared-services infrastructure are allocated to each segment based on usage and reflected within "Expenses Other Than Direct Compensation, Fringe Benefits & Non-Employee Labor" of each segment.

In addition to allocated corporate and shared costs, "Expenses Other Than Direct Compensation, Fringe Benefits & Non-Employee Labor" includes travel and entertainment, office rent and occupancy costs, automobile expenses, office operating expenses, data processing costs, cost of risk, professional fees, and amortization and depreciation expense other than amortization of acquisition-related intangible assets.

Unless noted in the following discussion and analysis, revenue amounts exclude reimbursements for out-of-pocket expenses and expense amounts exclude reimbursed out-of-pocket expenses.

Segment Performance Indicators

We typically earn our revenues on an individual fee-per-claim basis for claims management services we provide to carriers, brokers and corporates. Accordingly, the volume of claim referrals to us is a key driver of our revenues. We believe that a discussion and analysis of the segment unit volumes, as measured by cases received, is helpful in understanding the results of our operations.

Operating results for our U.S. Property & Casualty, Broadspire, and International Operations segments reconciled to net income before income taxes and net income attributable to shareholders of Crawford & Company were follows:

(in thousands, except percentages)

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U.S. PROPERTY & CASUALTY SEGMENT

Operating earnings in our U.S. Property & Casualty segment totaled $7.2 million, or 9.7% of revenues before reimbursements, for the three months ended June 30, 2026, compared with 2025 operating earnings of $7.5 million, or 9.0% of revenues before reimbursements. For the six months ended June 30, 2026, our U.S. Property & Casualty segment reported operating earnings of $14.8 million, or 10.1% of revenues before reimbursements, compared with 2025 operating earnings of $17.2 million, or 10.5% of revenues before reimbursements. The decrease in operating earnings in the three and six months ended June 30, 2026 as compared to the prior year periods was driven by a decline in revenues within the Catastrophe Services and Contractor Connection service lines, offsetting benefits from reduced centralized indirect support costs.

Excluding centralized indirect support costs, gross profit decreased from $21.3 million, or 25.8% of revenues before reimbursements in 2025, to $19.2 million, or 25.9% of revenues before reimbursements, in the three months ended June 30, 2026. For the six months ended June 30, 2026, gross profit decreased from $44.4 million or 26.9% of revenues before reimbursements in 2025 to $39.8 million, or 27.1% of revenues before reimbursements, primarily due to revenue declines within the Catastrophe Services and Contractor Connection service lines.

Operating results for our U.S. Property & Casualty segment, including gross profit, for the three and six months ended June 30, 2026 and 2025 were as follows:

35

Revenues before Reimbursements

U.S. Property & Casualty segment revenues are primarily derived from the property and casualty insurance company markets within the U.S. Revenues before reimbursements by service line for the three and six months ended June 30, 2026 and 2025 were as follows:

(in thousands, except percentages)

(in thousands, except percentages)

Revenues before reimbursements from our U.S. Property & Casualty segment totaled $74.1 million in the three months ended June 30, 2026, compared with $82.5 million in the 2025 period. This decrease was primarily driven by a continued decrease in weather-driven services within our Catastrophe Services and Contractor Connection businesses. There was a decrease in segment unit volume, measured principally by cases received, of (16.5)% for the three months ended June 30, 2026, compared with the 2025 period. This includes a decrease in low value inspection services cases, of 4,150 or (4.5)%. The decrease in revenues in our Catastrophe Services business of $(5.4) million, or (6.6)%, for which there are minimal cases, is primarily due to a continued decrease in staff augmentation and weather-driven services. During the second quarter of 2025, there was an increase in complex claims of 2,250, or 2.4%, within Global Technical Services for which revenue is expected to be recognized in future periods. Changes in product mix and in the rates charged for those services accounted for a 6.0% revenue increase for the three months ended June 30, 2026 compared with the same period in 2025.

Revenues before reimbursements from our U.S. Property & Casualty segment totaled $147.0 million in the six months ended June 30, 2026, compared with $164.7 million in the 2025 period. This decrease was primarily driven by a continued decrease in weather-driven services within our Catastrophe Services, Claims Solutions, and Contractor Connection businesses. There was a decrease in segment unit volume, measured principally by cases received, of (16.7)% for the six months ended June 30, 2026, compared with the 2025 period. This includes a decrease in low value inspection services cases, of 14,900 or (7.8)%. The decrease in revenues in our Catastrophe Services business of $(9.4) million, or (5.7)%, for which there are minimal cases, is primarily due to a continued decrease in staff augmentation and weather-driven services. During the first two quarters of 2025, there was an increase in complex claims of 2,550, or 1.3%, within Global Technical Services for which revenue is expected to be recognized in future periods. Changes in product mix and in the rates charged for those services accounted for a 2.5% revenue increase for the six months ended June 30, 2026 compared with the same period in 2025.

Revenue variance components for our U.S. Property & Casualty segment, for the three and six months ended June 30, 2026 are summarized as follows:

36

Reimbursed Expenses included in Total Revenues

Reimbursements for out-of-pocket expenses incurred in our U.S. Property & Casualty segment, which are included in total Company revenues, were $1.6 million and $1.8 million for each of the three months ended June 30, 2026 and 2025, respectively. Reimbursements were $3.4 million and $3.6 million for the six months ended June 30, 2026 and 2025, respectively.

Case Volume Analysis

U.S. Property & Casualty segment unit volumes by service line, measured by cases received, for the three and six months ended June 30, 2026 and 2025 were as follows:

(whole numbers, except percentages)

Overall, there was a decrease in cases of (16.5)% in the three months ended June 30, 2026, compared to the same period in 2025. Global Technical Services declined primarily due to 2,250 cases received in the prior year for a specific complex event and a decrease in claim referrals from specialized programs. The decrease in Claims Solutions volumes in the 2026 second quarter was primarily due to the decrease in low value inspection services of 4,150 cases. There were decreases in Contractor Connection and Catastrophe Services in the 2026 second quarter primarily due to less weather-driven activity, as compared with the 2025 period.

There was a decrease in cases of (16.7)% for the six months ended June 30, 2026, compared to the same period in 2025. Global Technical Services declined primarily due to 2,550 cases received in the prior year for a specific complex event and a decrease in claim referrals from specialized programs. The decrease in Claims Solutions volumes in the 2026 second quarter was primarily due to the decrease in low value inspection services of 14,900 cases. There were decreases in Contractor Connection and Catastrophe Services for the six months ended June 30, 2026 primarily due to less weather-driven activity, as compared with the 2025 period.

Direct Compensation, Fringe Benefits & Non-Employee Labor

The most significant expense in our U.S. Property & Casualty segment is the compensation of employees, including related payroll taxes and fringe benefits, and the payments to outsourced service providers that augment the functions performed by our employees. As a percentage of revenues before reimbursements, these expenses were 61.2% for the three months ended June 30, 2026 compared with 61.8% for the 2025 period. For the six months ended June 30, 2026, these expenses were 61.9% compared with 61.8% for the 2025 period. The total dollar amount of these expenses decreased to $45.3 million for the three months ended June 30, 2026 from $51.0 million for the comparable 2025 period, and were $91.0 million for the six months ended June 30, 2026, decreasing from $101.8 million in 2025. The decreases were primarily in line with the reduction of revenues, driven by the reduction of costs associated with Catastrophe Services, as well as a reduction of claims within Claims Solution and Global Technical Services for each of the periods presented. There was an average of 1,631 full-time equivalent employees in this segment in the six months ended June 30, 2026 compared with an average of 1,817 in the 2025 period.

Expenses Other than Reimbursements, Direct Compensation, Fringe Benefits & Non-Employee Labor

U.S. Property & Casualty expenses other than reimbursements, direct compensation, fringe benefits, and non-employee labor were $21.6 million for the three months ended June 30, 2026 compared with $24.0 million for the 2025 period. As a percentage of revenues before reimbursements, these expenses were 29.1% for the three months ended June 30, 2026 compared with 29.2% for the 2025 period. For the six months ended June 30, 2026, these expenses were $41.2 million, compared with $45.7 million for the 2025 period. As a percentage of revenues before reimbursements, these expenses were 28.0% for the six months ended June 30, 2026 compared with 27.7% for the 2025 period. The decrease in expenses for the three and six months ended June 30, 2026 as compared to the prior year periods was due to reductions in software amortization and centralized indirect support costs.

BROADSPIRE SEGMENT

Our Broadspire segment reported operating earnings of $15.7 million, or 14.4% of revenues before reimbursements, for the three months ended June 30, 2026 as compared with $14.2 million, or 13.1% of revenues before reimbursements, for the second quarter of 2025. For the six months ended June 30, 2026, our Broadspire segment reported operating earnings $26.6 million, or 12.4% of revenues before reimbursements, compared with 2025 operating earnings of $26.2 million, or 12.4% of revenue before reimbursements. The increase in the 2026 second quarter operating earnings and year-to-date periods was due to growth in disability claim and medical management revenues along with a decline in centralized indirect support expenses.

Excluding centralized indirect support costs, second quarter gross profit increased from $34.2 million, or 31.6% of revenues before reimbursements, in 2025 to $35.1 million, or 32.1% of revenues before reimbursements in 2026. For the six months ended June 30, 2026, gross profit decreased from $66.8 million, or 31.5% of revenues before reimbursements in 2025, to $66.5 million, or 31.0% of revenues before reimbursements. The increase for the 2026 second quarter was due to growth in disability claims and medical management revenues. The slight decrease for the year-to-date period was due to an increase in software amortization.

Operating results for our Broadspire segment, including gross profit, for the three and six months ended June 30, 2026 and 2025 were as follows:

Revenues before Reimbursements

Broadspire revenues are derived from the property, casualty and disability insurance and self-insured markets in the U.S. Revenues before reimbursements by service line for the three and six months ended June 30, 2026 and 2025 were as follows:

(in thousands, except percentages)

(in thousands, except percentages)

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Revenues before reimbursements from our Broadspire segment totaled $109.4 million in the three months ended June 30, 2026 compared with $108.2 million in the 2025 period. This increase was primarily due to an increase in cases in the Claims Management and Medical Management service lines. There was a slight decrease in segment unit volume, measured principally by cases received, of (0.1)% for the three months ended June 30, 2026 compared with the same period of 2025. There was an increase of high-frequency, low-severity claims within our Claims Management service line of 6,300, or 4.2%, primarily related to new disability clients. Revenues were negatively impacted by a $(1.1) million decrease in revenues within our Claims Management service line related to income earned which offsets the costs of managing the funds maintained to administer claims for our customers, for which no cases are received, or (1.0)% decrease in revenues. There was also a $1.4 million increase in revenues within our Medical Management service line for which no cases are received, or a 1.3% increase in revenues. Changes in product mix and in the rates charged for those services accounted for a 5.2% revenue increase for the 2026 second quarter compared with the 2025 period.

For the six months ended June 30, 2026, revenues before reimbursements from our Broadspire segment totaled $214.2 million compared with $211.8 million in the 2025 period. This increase was primarily due to an increase in cases in the Claims Management and Medical Management service lines. There was an increase in segment unit volume, measured principally by cases received, of 4.2% for the six months ended June 30, 2026 compared with the same period of 2025. This was primarily due to an increase of high-frequency, low-severity claims within our Claims Management service line of 21,200, or 7.1%, primarily related to new disability clients. Revenues were negatively impacted by a $(2.1) million decrease in revenues within our Claims Management service line related to income earned which offsets the costs of managing the funds maintained to administer claims for our customers, for which no cases are received, or (1.0)% decrease in revenues. There was also a $1.7 million increase in revenues within our Medical Management service line for which no cases are received, or a 0.8% increase in revenues. Changes in product mix and in the rates charged for those services accounted for a 4.2% revenue increase for the six months ended June 30, 2026 compared with the 2025 period.

Revenue variance components for our Broadspire segment, for the three and six months ended June 30, 2026 are summarized as follows:

Reimbursed Expenses included in Total Revenues

Reimbursements for out-of-pocket expenses incurred in our Broadspire segment were $0.7 million for each of the three months ended June 30, 2026 and 2025. Reimbursements were $1.4 million and $1.5 million for the six months ended June 30, 2026 and 2025, respectively.

Case Volume Analysis

Broadspire unit volumes by service line, as measured by cases received, for the three and six months ended June 30, 2026 and 2025 were as follows:

(whole numbers, except percentages)

Overall case volumes decreased (0.1)% for the three months ended June 30, 2026 due primarily to a decline in Subrogation cases due to the loss of a customer, a reduction in utilization management claims within Medical Management, and decreased casualty claims within our Claims Management service line, offset by increases in new disability clients within our Claims Management service line.

There was an increase in cases of 4.2% in the six months ended June 30, 2026, compared to the same period in 2025, due primarily to increases in new disability clients within our Claims Management service line, partially offset by a decline in Subrogation cases due to the loss of a customer and decreased casualty claims within our Claims Management service line.

Direct Compensation, Fringe Benefits & Non-Employee Labor

The most significant expense in our Broadspire segment is the compensation of employees, including related payroll taxes and fringe benefits, and the payments to outsourced service providers that augment the functions performed by our employees. These expenses totaled $60.6 million for the three months ended June 30, 2026, compared to $60.7 million for the 2025 period. As a percent of the related revenues before reimbursements, these expenses decreased from 56.1% in the 2025 second quarter to 55.4% in the 2026 second quarter. For the six months ended June 30, 2026, these expenses totaled $120.9 million, compared to $119.0 million in 2025. For the six months ended June 30, 2026, these expenses, as a percent of the related revenues before reimbursements, increased from 56.2% for the six months ended June 30, 2025 to 56.5% for the 2026 period. The increase in costs as a percentage of revenues before reimbursements for the 2026 three and six month periods was primarily due to increased employees and average wages related to the increase in revenues, as well as product mix changes. Average full-time equivalent employees in this segment totaled 2,931 in the six months ended June 30, 2026, compared with 2,860 in the 2025 period.

Expenses Other than Reimbursements, Direct Compensation, Fringe Benefits & Non-Employee Labor

Broadspire segment expenses other than reimbursements, direct compensation, fringe benefits, and non-employee labor as a percent of revenues before reimbursements decreased slightly to 30.3% for the three months ended June 30, 2026, from 30.8% in the 2025 period. The amount of these expenses decreased slightly from $33.3 million for the three months ended June 30, 2025 to $33.1 million in 2026. These expenses were $66.6 million for each of the six months ended June 30, 2026 and 2025. As a percentage of revenues before reimbursements, these expenses were 31.1% for the six months ended June 30, 2026, compared with 31.4% for the 2025 period. The slight decrease in the 2026 three and six months ended June 30, 2026 expenses as a percentage of revenues before reimbursements was due to improved operating leverage and lower centralized indirect support costs.

INTERNATIONAL OPERATIONS SEGMENT

Operating earnings in our International Operations segment were $10.9 million, or 7.9% of revenues before reimbursements, for the three months ended June 30, 2026, compared with $7.3 million, or 5.5% of revenues before reimbursements, in the 2025 period. For the six months ended June 30, 2026, our International Operations segment reported operating earnings of $14.9 million, or 5.5% of revenues before reimbursements, compared with operating earnings of $9.6 million, or 3.7% of revenues before reimbursements in 2025. The increase in operating earnings in the three months ended June 30, 2026 as compared to 2025 was primarily due to improved operating results in Canada, Australia and Asia, partially offset by a reduction in operating earnings within the U.K. and Europe. The increase in operating earnings for the six months ended June 30, 2026 as compared to 2025 was primarily due to improved operating results in Canada, Australia, and Asia, partially offset by a reduction in operating earnings within the U.K., Europe, and Latin America.

Excluding centralized indirect support costs, gross profit increased slightly from $27.0 million, or 20.4% of revenues before reimbursements in 2025, to $30.9 million, or 22.4% of revenues before reimbursements, in the three months ended June 30, 2026. For the six months ended June 30, 2026, gross profit increased from $49.3 million, or 19.1% of revenues before reimbursements in 2025, to $53.4 million, or 19.8% of revenues before reimbursements. The increase in gross profit in the three months ended June 30, 2026 as compared to 2025 was primarily due to improved operating results in Canada, Australia and Asia, partially offset by a reduction in operating earnings within the U.K. and Europe. The increase in gross profit for the six months ended June 30, 2026 as compared to 2025 was primarily due to improved operating results in Canada, Australia, and Asia, partially offset by a reduction in earnings within the U.K., Europe, and Latin America.

Operating results for our International Operations segment, including gross profit, for the three and six months ended June 30, 2026 and 2025 were as follows:

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Revenues before Reimbursements

International Operations segment revenues are primarily derived from the global property and casualty insurance company markets in the U.K, Europe, Australia, Canada, Asia and Latin America. Revenues before reimbursements by major region, based on actual exchange rates and using a constant exchange rate, for the three and six months ended June 30, 2026 and 2025 were as follows:

(in thousands, except percentages)

(in thousands, except percentages)

Revenues before reimbursements from our International Operations segment totaled $138.0 million in the three months ended June 30, 2026, compared with $132.3 million in the 2025 period. The change in exchange rates increased our International Operations segment revenues by approximately 5.8%, or $7.7 million, for the three months ended June 30, 2026 as compared with the 2025 period. Absent foreign exchange rate fluctuations, International Operations segment revenues would have been $130.3 million for the three months ended June 30, 2026. There was an increase in segment unit volume, measured principally by cases received, of 11.6% for the three months ended June 30, 2026, compared with the 2025 period. There was a net increase in high-frequency, low-severity cases of 17,900, or 13.2%, primarily in Spain, Canada, and the Netherlands, partially offset by a decreases in Germany and Brazil. In addition, revenues decreased by $(4.2) million or (3.2)% in the current year due to the disposition of Crawford Legal Services businesses. In Australia, storm related cases recorded in the prior year second quarter with revenues recorded in future periods decreased by 6,000, or (4.4)%. Changes in product mix and in the rates charged for those services accounted for a (1.2)% revenue decrease for the three months ended June 30, 2026 compared with the same period in 2025.

Revenues before reimbursements from our International Operations segment totaled $269.8 million in the six months ended June 30, 2026, compared with $258.5 million in the 2025 period. The change in exchange rates increased our International Operations segment revenues by approximately 6.0%, or $15.5 million, for the six months ended June 30, 2026 as compared with the 2025 period. Absent foreign exchange rate fluctuations, International Operations segment revenues would have been $254.3 million for the six months ended June 30, 2026. There was an increase in segment unit volume, measured principally by cases received, of 8.2% for the six months ended June 30, 2026, compared with the 2025 period. There was a net increase in high-frequency, low-severity cases of 21,400, or 7.7%, primarily in Spain, Canada, Finland and the Netherlands, partially offset by a decreases in Germany and Brazil. In addition, revenues decreased by $(7.4) million or (2.9)% in the current year due to the disposition of Crawford Legal Services businesses. In Australia, storm related cases recorded in the prior year second quarter with revenues recorded in future periods decreased by 6,000, or (2.2)%. Changes in product mix and in the rates charged for those services accounted for a (1.4)% revenue decrease for the six months ended June 30, 2026 compared with the same period in 2025.

Excluding the impact of foreign currencies, revenues decreased in the U.K. for the three and six month periods due to a reduction in higher-value third-party administration claims as well as a reduction in legal services. There was an increase in revenues in Europe in the 2026 periods, compared with 2025, due to new clients in Spain, Norway, and the Netherlands, partially offset by a reduction in flood related revenues in the Middle East. There was an increase in Australia in the three and six months ended June 30, 2026, compared with the prior year periods, due to increased weather-related activity, partially offset by the sale of the legal services division. Canada increased in each period due to a new client in third-party administration. There was an increase in revenues in Asia for the three and six month periods, compared with 2025, due to earthquakes in Thailand in 2025 that continue to generate revenues in the current year, as well as improved results in Malaysia. The decrease in revenues in Latin America in the 2026 periods was primarily driven by a reduction in weather-related cases in Chile.

Revenue variance components for our International Operations segment, for the three and six months ended June 30, 2026 are summarized as follows:

Reimbursed Expenses included in Total Revenues

Reimbursements for out-of-pocket expenses incurred in our International Operations segment, which are included in total Company revenues, were $6.3 million and $9.1 million for the three months ended June 30, 2026 and 2025, respectively. Reimbursements were $14.7 million and $17.8 million for the six months ended June 30, 2026 and 2025, respectively.

Case Volume Analysis

International Operations segment unit volumes by geographic region, measured by cases received, for the three and six months ended June 30, 2026 and 2025 were as follows:

(whole numbers, except percentages)

Overall, there was an increase in cases received of 11.6% for the three months ended June 30, 2026, compared with the 2025 period. The increases were primarily related to high-frequency, low-severity cases within Europe, where Spain had an increase of 16,000 cases and the Netherlands increased by 3,000 cases. In addition, Canada volume improved due to the addition of a new client with high-frequency, low-severity cases. Australia had a decrease in claims primarily due to 6,000 storm claims added in the prior year second quarter, offset by additions related to 2026 weather-related activity. U.K had a decline in third-party administration cases. Latin America also had decreased cases due to a reduction in high-frequency, low-value cases received in Brazil of 2,000 cases.

There was an increase in cases received of 8.2% for the six months ended June 30, 2026, compared with the 2025 period. The increases were primarily related to high-frequency, low-severity cases within Europe, where Spain had an increase of 26,000 cases. In addition, Canada volume improved due to the addition of a new client with high-frequency, low-severity cases. Australia had an increase in claims due to an increase in weather-related activity, partially offset by 6,000 storm claims added in the prior year second quarter. U.K had a decline in third-party administration cases. Latin America also had decreased cases due to a reduction in high-frequency, low-value cases received in Brazil of 10,100 cases.

Direct Compensation, Fringe Benefits & Non-Employee Labor

The most significant expense in our International Operations segment is the compensation of employees, including related payroll taxes and fringe benefits, and the payments to outsourced service providers that augment the functions performed by our employees. As a percentage of revenues before reimbursements, these expenses were 64.5% and 66.6% for the three months ended June 30, 2026 and 2025, respectively. The total dollar amount of these expenses was $89.0 million for the three months ended June 30, 2026, compared to $88.2 million for the 2025 period. The fluctuation in exchange rates resulted in an increase to these expenses by $4.9 million. The decrease as a percentage of revenues before reimbursements was due to lower administrative compensation costs and non-employee labor within the region. For the six months ended June 30, 2026, these expenses were 66.5%, compared with 67.6% in 2025, and were $179.3 million for the six months ended June 30, 2026 compared to $174.6 million in 2025. The fluctuation in exchange rates resulted in an increase to these expenses by $10.3 million. The decrease as a percentage of revenues before reimbursements was due to lower administrative compensation costs and non-employee labor within the region. There was an average of 4,195 full-time equivalent employees in this segment in the six months ended June 30, 2026, compared with an average of 4,418 in the comparable 2025 period.

Expenses Other than Reimbursements, Direct Compensation, Fringe Benefits & Non-Employee Labor

International Operations expenses other than reimbursements, direct compensation, fringe benefits, and non-employee labor were $38.1 million for the three months ended June 30, 2026 compared to $36.8 million for the 2025 period. As a percentage of revenues before reimbursements, these expenses were 27.6% for the three months ended June 30, 2026 compared with 27.8% for the 2025 period. For the six months ended June 30, 2026, these expenses were $75.6 million, compared with $74.3 million for the 2025 period. As a percentage of revenues before reimbursements, these expenses were 28.0% for the six months ended June 30, 2026, compared with 28.8% for the 2025 period. The increase in expenses for the three months ended June 30, 2026 as compared to the 2025 period was due to increased professional fees and increased centralized indirect support costs. The increase in expenses for the six months ended June 30, 2026 as compared to the prior period was due to the increased professional fees, an increase in self-insurance costs, partially offset by a reduction in centralized indirect support costs. There was a decrease in the expense as a percentage of revenues before reimbursements for the 2026 periods as compared to 2025 due to the increased revenues of the segment.

EXPENSES AND CREDITS EXCLUDED FROM SEGMENT OPERATING EARNINGS

Income Taxes

The Company's consolidated effective income tax rate may change periodically due to changes in enacted statutory tax rates, changes in tax law or policy, changes in the composition of taxable income from the countries in which it operates, the Company's ability to utilize net operating loss and tax credit carryforwards, changes in permanent reinvestment assertions, and changes in unrecognized tax benefits. We estimate that our effective income tax rate for 2026 will be approximately 33% to 35% after considering known discrete items as of June 30, 2026.

The provision for income taxes on consolidated income before income tax totaled $6.2 million and $5.8 million for the three months ended June 30, 2026 and 2025, respectively. The overall effective tax rate decreased to 31.7% for the three months ended June 30, 2026 compared with 42.8% for the 2025 period primarily due to a one-time expense of $1.3 million relating to administrative guidance issued by a foreign tax authority in 2025.

The provision for income taxes on consolidated income before income tax totaled $8.6 million and $8.3 million for the six months ended June 30, 2026 and 2025, respectively. The overall effective tax rate decreased to 32.0% for the six months ended June 30, 2026 compared with 36.4% for the 2025 period primarily due to a one-time expense of $1.3 million relating to administrative guidance issued by a foreign tax authority in 2025.

Net Corporate Interest Expense

Net corporate interest expense consists of interest expense that we incur on our short- and long-term borrowings, partially offset by any interest income we earn on available cash balances and short-term investments. These amounts vary based on interest rates, borrowings outstanding and the amounts of invested cash. Corporate interest expense totaled $3.6 million and $4.7 million for the three months ended June 30, 2026 and 2025, respectively. Interest income was $0.8 million for each of the three months ended June 30, 2026 and 2025. Corporate interest expense totaled $7.0 million and $9.4 million for the six months ended June 30, 2026 and 2025, respectively. Interest income was $1.5 million and $1.6 million for the six months ended June 30, 2026 and 2025, respectively.

Stock Option Expense

Stock option expense, a component of stock-based compensation, is comprised of non-cash expenses related to stock options granted under our various stock option and employee stock purchase plans. Stock option expense is not allocated to our operating segments. Stock option expense totaled $0.1 million and $0.2 million for the three months ended June 30, 2026 and 2025, respectively. Stock option expense totaled $0.3 million and $0.4 million for the six months ended June 30, 2026 and 2025, respectively.

Amortization of Acquisition-Related Intangible Assets

Amortization of acquisition-related intangible assets represents the non-cash amortization expense for finite-lived customer-relationship and trade name intangible assets. Amortization expense associated with these intangible assets totaled $1.8 million for each of the three months ended June 30, 2026 and 2025. Amortization expense associated with these intangible assets totaled $3.6 million for each of the six months ended June 30, 2026 and 2025. This amortization expense is included in "Selling, general, and administrative expenses" in our unaudited Condensed Consolidated Statements of Operations.

Unallocated Corporate and Shared Costs, Net

Certain unallocated corporate and shared costs are excluded from the determination of segment operating earnings. For the three and six months ended June 30, 2026 and 2025, unallocated corporate and shared costs and credits represented expenses for our chief executive officer and our Board of Directors, certain adjustments to our self-insured liabilities, certain unallocated legal costs and professional fees, and certain adjustments and recoveries to our allowances for estimated credit losses.

Unallocated corporate and shared costs were $4.3 million and $7.0 million for the three months ended June 30, 2026 and 2025, respectively. Unallocated corporate and shared costs were $13.1 million for both six month periods ended June 30, 2026 and 2025. The decrease in the 2026 second quarter was primarily due a one-time $3.1 million indirect tax expense incurred in the 2025 second quarter.

Contingent Earnout Adjustments

Contingent earnout expense represents the fair value adjustment of earnout liabilities arising from recent acquisitions. There was no adjustment for the three months ended June 30, 2026, and a benefit of $0.2 million for the six months ended June 30, 2026, compared to expenses of $0.1 million and $0.4 million for the three and six months ended June 30, 2025. The fair value adjustment is based on changes to projections of acquired entities over the respective earnout periods, which span multiple years.

Non-Service Pension Costs

Non-service pension costs totaled $2.0 million and $3.4 million for the three and six months ended June 30, 2026, compared to $2.4 million and $4.7 million for the three and six months ended June 30, 2025. Non-service pension costs represent the U.S. and U.K. non-service defined benefit pension costs, which are non-operating in nature as the U.S. plan is frozen and the U.K. plans are closed to new participants. The service cost component of the U.K. plans remains in compensation expense.

LIQUIDITY, CAPITAL RESOURCES, AND FINANCIAL CONDITION

At June 30, 2026, our working capital balance (current assets less current liabilities) was approximately $57.4 million, an increase of $14.6 million from the working capital balance at December 31, 2025. Our cash and cash equivalents were $69.4 million at June 30, 2026, compared with $64.1 million at December 31, 2025.

Cash and cash equivalents as of June 30, 2026 consisted of $26.5 million held in the U.S. and $42.9 million held in our foreign subsidiaries. The Company generally does not provide for additional U.S. and foreign income taxes on undistributed earnings of foreign subsidiaries because they are considered to be indefinitely reinvested. The Company maintained its permanent reinvestment assertion on a portion of prior year undistributed earnings for certain foreign operations and accrued deferred taxes attributable to earnings that were not permanently reinvested. The majority of the remaining historical earnings and future foreign earnings are expected to remain permanently reinvested and will be used to provide working capital for these operations, fund defined benefit pension plan obligations, repay non-U.S. debt, fund capital improvements, and fund future acquisitions.

However, if at a future date or time funds that remain permanently reinvested are necessary for our operations in the U.S. or we otherwise believe it is in our best interests to repatriate all or a portion of such funds, we may be required to accrue and pay taxes to repatriate these funds. No assurances can be provided as to the amount or timing thereof, the tax consequences related thereto, or the ultimate impact any such action may have on our results of operations or financial condition.

Cash Provided by Operating Activities

Cash provided by operating activities was $23.1 million for the six months ended June 30, 2026, compared with $21.1 million provided by operating activities in the 2025 period. The increase in cash provided was primarily driven by higher earnings compared to prior year.

Cash Used in Investing Activities

Cash used in investing activities was $9.7 million for the six months ended June 30, 2026, compared with $18.3 million used in the first six months of 2025. The decrease in cash used in 2026 was due to proceeds from business dispositions and the decreases in capital expenditures in 2026 compared to 2025 .

Cash Used in Financing Activities

Cash used in financing activities was $4.6 million for the six months ended June 30, 2026, compared with $1.1 million of cash used in the 2025 period. During the six months of 2026, there was an increase of $9.0 million in net borrowing from our revolving credit facility, compared with a net increase during the 2025 period of $6.6 million. The increase in borrowing in the 2026 period was primarily related to the increase in payments of our accounts payable and accrued liabilities. We added $3.8 million of fiduciary liabilities, due to the timing of fund transfers. We repurchased shares for $9.0 million in the 2026 period, compared with no share repurchases made in the 2025 period. We paid $7.3 million in dividends in the six months ended June 30, 2026 compared with $6.9 million in the 2025 period.

Other Matters Concerning Liquidity and Capital Resources

As a component of our Credit Facility with Bank of America (the "Credit Facility"), we maintain a letter of credit facility to satisfy certain contractual obligations. Including $8.0 million of undrawn letters of credit issued under the letter of credit facility, the available balance under our credit facility totaled $280.9 million at June 30, 2026. Our short-term debt obligations typically peak during the first half of each year due to the annual payment of incentive compensation, contributions to retirement plans, working capital fluctuations, and certain other recurring payments, and generally decline during the balance of the year. The balance of short-term borrowings represents amounts under our credit facility that we expect, but are not required, to repay in the next twelve months. Long- and short-term borrowings outstanding, including current installments and finance leases, totaled $198.1 million as of June 30, 2026 compared with $189.1 million at December 31, 2025.

Our liquidity is defined as cash on hand and borrowing capacity under our Credit Facility based on our trailing twelve month EBITDA, as defined in our Credit Facility. At June 30, 2026, this resulted in total liquidity of $356.6 million.

Defined Benefit Pension Funding and Cost

We sponsor a qualified defined benefit pension plan in the U.S. (the "U.S. Qualified Plan"), three defined benefit pension plans in the U.K., and defined benefit pension plans in the Netherlands, Norway, Germany, and the Philippines. Effective December 31, 2002, we froze our U.S. Qualified Plan. Our frozen U.S. Qualified Plan and U.K. plans were underfunded by $15.4 million and overfunded by $12.0 million, respectively, at December 31, 2025, based on accumulated benefit obligations of $233.4 million and $156.9 million for the U.S. Qualified Plan and the U.K. plans, respectively.

For the six months ended June 30, 2026 we made no contributions to our U.S. defined benefit pension plan and $1.3 million to our U.K defined benefit pension plans, compared with no contributions to the U.S. plan and $1.6 million to the U.K. plans for the six months ended June 30, 2025. We expect to make discretionary contributions of $3.0 million to the U.S. Qualified Plan in 2026 to minimize future funding requirements. Anticipated funding for the other international plans is not significant.

Dividend Payments

Our Board of Directors makes dividend decisions from time to time based in part on an assessment of current and projected earnings and cash flows. During the six months ended June 30, 2026, we paid $7.3 million in dividends. Our ability to pay future dividends could be impacted by many factors including the funding requirements of our defined benefit pension plans, repayments of outstanding borrowings, levels of cash expected to be generated by our operating activities, and covenants and other restrictions contained in any credit facilities or other financing agreements.

Financial Condition

Other significant changes on our unaudited Condensed Consolidated Balance Sheets as of June 30, 2026, compared with our Condensed Consolidated Balance Sheets as of December 31, 2025 were as follows:

• Unbilled revenues increased $16.4 million excluding foreign exchange impacts. The increase is primarily attributable to Global Technical Services in the U.S. Property & Casualty segment and Australia and Asia in the International Operations segment.
• Accounts payable and accrued liabilities decreased $16.9 million excluding foreign currency exchange impacts. The decrease is primarily due to payments for employee incentive compensation earned in 2025.

At June 30, 2026, we were not a party to any off-balance sheet arrangements which we believe could materially impact our operations, financial condition, or cash flows.

As disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025, we have certain material obligations under operating lease agreements to which we are a party. The Company records operating lease-related assets and liabilities on our unaudited Condensed Consolidated Balance Sheets.

We also maintain funds in various trust accounts to administer claims for certain clients. These funds are not available for our general operating activities and, as such, have not been recorded in the accompanying unaudited Condensed Consolidated Balance Sheets. We have concluded that we do not have a material off-balance sheet risk related to these funds.

APPLICATION OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES

There have been no material changes to our critical accounting policies and estimates from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.

New Accounting Standards Adopted

Additional information related to the adoption of recently issued accounting standards is provided in Note 2 to the accompanying unaudited condensed consolidated financial statements contained in this Quarterly Report on Form 10-Q.

Pending Adoption of New Accounting Standards

Additional information related to the pending adoption of new accounting standards is provided in Note 2 to the accompanying unaudited condensed consolidated financial statements in this Quarterly Report on Form 10-Q.

For a discussion of quantitative and qualitative disclosures about the Company's market risk, see Item 7A, "Quantitative and Qualitative Disclosures About Market Risk," of our Annual Report on Form 10-K for the year ended December 31, 2025. Our exposures to market risk have not changed materially since December 31, 2025.

Evaluation of Disclosure Controls and Procedures

The Registrant maintains a set of disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 (the "Exchange Act"), designed to ensure that information required to be disclosed by the Registrant in reports that it files or submits under the Exchange Act is recorded, processed, summarized or reported within the time periods specified in SEC rules and regulations.

Management necessarily applies its judgment in assessing the costs and benefits of such controls and procedures, which, by their nature, can provide only reasonable assurance regarding management's control objectives. The Company's management, including the Chief Executive Officer and the Chief Financial Officer, does not expect that its disclosure controls and procedures can prevent all possible errors or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected. Judgments in decision-making can be faulty and breakdowns can occur because of simple errors or mistakes. Additionally, controls can be circumvented by the individual acts of one or more persons. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and while the Company's disclosure controls and procedures are designed to be effective under circumstances where they should reasonably be expected to operate effectively, there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Because of the inherent limitations in any control system, misstatements due to possible errors or fraud may occur and not be detected.

The Registrant's management, with the participation of the Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Registrant's disclosure controls and procedures as of June 30, 2026. Based on that evaluation, the Registrant's Chief Executive Officer and Chief Financial Officer concluded that the Registrant's disclosure controls and procedures were effective as of June 30, 2026.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the quarter ended June 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

In addition to the other information set forth in this report, the factors discussed in Part I, "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2025 could materially affect our business, financial condition, or results of operations. The risks described in this report and in our Annual Report on Form 10-K are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, or results of operations.