# Ultralife Corp: Form 10-Q for the period ended Mar 31, 2026

- Company: [Ultralife Corp](/companies/ulbi.md) (CIK 875657)
- Form: 10-Q
- Filed: 2026-05-08
- Accepted by EDGAR: May 8, 2026, 07:31 ET
- Period: 2026-03-31
- Accession: 0001437749-26-015750
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/875657/000143774926015750/ulbi20260331_10q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/875657/000143774926015750/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2026-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2026-01-01 to 2026-03-31 | $47.4m | us-gaap:Revenues |
| Cost of revenue | 3 months, 2026-01-01 to 2026-03-31 | $37.3m | us-gaap:CostOfRevenue |
| Gross profit | 3 months, 2026-01-01 to 2026-03-31 | $10.1m | us-gaap:GrossProfit |
| Research and development | 3 months, 2026-01-01 to 2026-03-31 | $3.0m | us-gaap:ResearchAndDevelopmentExpense |
| Selling, general and administrative | 3 months, 2026-01-01 to 2026-03-31 | $7.4m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2026-01-01 to 2026-03-31 | −$215.0k | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2026-01-01 to 2026-03-31 | −$192.0k | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2026-01-01 to 2026-03-31 | −$451.0k | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2026-01-01 to 2026-03-31 | −$3.00 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2026-01-01 to 2026-03-31 | −$3.00 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2026-01-01 to 2026-03-31 | 16,657,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2026-01-01 to 2026-03-31 | $2.3m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 3 months, 2026-01-01 to 2026-03-31 | $770.0k | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | at 2026-03-31 | $8.9m | us-gaap:Cash |
| Current assets | at 2026-03-31 | $110.1m | us-gaap:AssetsCurrent |
| Total assets | at 2026-03-31 | $220.6m | us-gaap:Assets |
| Current liabilities | at 2026-03-31 | $43.1m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2026-03-31 | $90.9m | us-gaap:Liabilities |
| Long-term debt | at 2026-03-31 | $44.2m | us-gaap:LongTermDebtNoncurrent |
| Current portion of debt | at 2026-03-31 | $3.4m | us-gaap:LongTermDebtCurrent |
| Shareholders' equity | at 2026-03-31 | $129.6m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 32,209 characters.

#### Forward-Looking Statements

The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. This report contains certain forward-looking statements and information that are based on the beliefs of management as well as assumptions made by management and information currently available to management. The statements contained in this report relating to matters that are not historical facts are forward-looking statements that involve risks and uncertainties, including, but not limited to, uncertain global economic conditions including the impact of inflation, tariffs, interest rates and supply chain disruptions affecting our business, revenues and earnings adversely; our reliance on certain key customers for a significant portion of our revenues; reductions or delays in U.S. and foreign military spending; our efforts to develop new products or new commercial applications for our products could be prolonged; potential disruptions or delays in our supply of raw materials and components or material increases in their costs due to business conditions, new or additional tariffs, global conflicts, weather, sourcing requirements or other factors not under our control; our resources being overwhelmed by our growth; our ability to recruit and retain top management and key personnel; breaches in information systems security and other disruptions in our information technology systems; fluctuations in the price of oil and the resulting impact on the demand for downhole drilling; the unique risks associated with our China operations; possible future declines in demand for the products that use our batteries or communications systems; safety risks, including the risk of fire inherent in the manufacture, use and transportation of Lithium batteries; variability in our quarterly and annual results and the price of our common stock; purchases by our customers of product quantities not meeting the volume expectations in our supply agreements; rising interest rates increasing the cost of our variable borrowings; our inability to comply with changes to the regulations for the shipment of our products; our entrance into new end-markets which could lead to additional financial exposure; litigation or claims resulting in negative optics in the markets we serve and increased costs; the potential of future pandemics that may arise, causing delays in the manufacture and delivery of our mission critical products to end customers; potential costs attributable to the warranties we supply with our products and services; negative publicity concerning Lithium-ion batteries; rules and procedures regarding contracting with the U.S. and foreign governments; our exposure to foreign currency fluctuations; our ability to utilize our net operating loss carryforwards; the risk that we are unable to protect our proprietary and intellectual property; our ability to comply with government regulations including the use of “conflict minerals”; possible impairments of our goodwill and other intangible assets; known and unknown environmental matters; possible audits of our contracts by the U.S. and foreign governments and their respective defense agencies; exposure to possible violations of the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act or other anti-corruption laws; and other risks and uncertainties, certain of which are beyond our control. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may differ materially from those forward-looking statements described herein. When used in this report, the words “anticipate,” “believe,” “estimate,” “expect,” “seek,” “project,” “intend,” “plan,” “may,” “will,” “should,” “foresee,” “could,” “likely,” or words of similar import are intended to identify forward-looking statements. For further discussion of certain of the matters described above and other risks and uncertainties, see Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025.

Although we base these forward-looking statements on assumptions that we believe are reasonable when made, we caution you that forward-looking statements do not guarantee future performance and that our actual results of operations, financial condition and liquidity and developments in the industries in which we operate may differ materially from those made in or suggested by the forward-looking statements contained herein. In addition, even if our results of operations, financial condition and liquidity and the development of the industries in which we operate are consistent with the forward-looking statements contained in this document, those results or developments may not be indicative of results or developments in subsequent periods. Given these risks and uncertainties, you are cautioned not to place undue reliance on these forward-looking statements. Any forward-looking statements that we make herein speak only as of the date of those statements, and we undertake no obligation to update those statements or to publicly announce the results of any revisions to any of those statements to reflect future events or developments. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless expressed as such, and should only be viewed as historical data.

Undue reliance should not be placed on our forward-looking statements. Except as required by law, we disclaim any obligation to update any risk factors or to publicly announce the results of any revisions to any of the forward-looking statements to reflect new information or risks, future events or other developments.

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) should be read in conjunction with the consolidated financial statements and notes thereto in Part I, Item 1 of this Form 10-Q, and the consolidated financial statements and notes thereto and risk factors in our Annual Report on Form 10-K for the year ended December 31, 2025.

The financial information in this MD&A is presented in thousands of dollars, except for share and per share amounts, unless otherwise specified.

#### General

We offer products and services ranging from power solutions to communications and electronics systems to customers across the globe in the government, defense and commercial sectors. With an emphasis on strong engineering and a collaborative approach to problem solving, we design and manufacture power and communications systems including rechargeable and non-rechargeable batteries, charging systems, communications and electronics systems and accessories, and custom engineered systems related to those product lines. We continually evaluate ways to grow, including the design, development and sale of new products, expansion of our sales force to penetrate new markets and territories, and seeking opportunities to expand through acquisitions.

We sell our products worldwide through a variety of trade channels, including original equipment manufacturers (“OEMs”), industrial and defense supply distributors, and directly to U.S. and foreign defense departments. Historically, we utilized the following brands, tradenames and trademarks (“sub-brands”) to promote our products in the markets we serve: Ultralife®, Ultralife Thin Cell®, Ultralife HiRate®, Ultralife & design®, LithiumPower®, LithiumPower & Design®, SMART CIRCUIT®, SMARTCIRCUIT®, SMART CIRCUIT & design®, SODIUMPOWER®, SODIUMPOWER (design)®, WE. ARE. POWER®, AMTI®, ABLE™, ACCUTRONICS™, ACCUPRO™, ENTELLION™, McDowell Research®, SWE DRILL-DATA®, SWE SEASAFE (& DESIGN)®, SWE SEASAFE DIRECT®, SWE SOUTHWEST ELECTRONIC ENERGY CORP®, SWE Southwest Electronic Energy Group®, Excell Battery Group™ and Criterion Gauge™, POW-R BMS®, POW-R-BMS®, POW-R TOTE® and Electrochem®. As explained below, our rebranding initiative will eliminate or de-emphasize our reference to the sub-brands going forward. We have sales, operations and product development facilities in North America, Europe and Asia.

As part of our strategic evolution, in October 2025, Ultralife decided to undergo a comprehensive rebranding initiative that consolidates all sub-brands under a singular, unified master brand – Ultralife. This move reflects our commitment to clarity, consistency and amplified brand equity across all markets. By streamlining our global identity, we aim to strengthen customer recognition, enhance operational efficiency and better align to our customers’ needs with a singular, powerful brand narrative. To this end, the Accutronics, Southwest Electronic Energy, Excell Battery, McDowell Research and AMTI brands will no longer be emphasized. The Electrochem brand will remain, but as a product brand on select primary cells. This transformation positions Ultralife for ongoing growth and stronger market impact as we continue to lead in mission critical battery and RF power solutions. This rebranding initiative had a non-cash impact of $12,181 to reduce the value of our tradename and trademark intangible assets recorded during our 2025 fourth quarter.

We report our results in two operating segments: Battery & Energy Products and Communications Systems. The Battery & Energy Products segment includes Lithium 9-volt, cylindrical, thin cell and other non-rechargeable batteries, in addition to rechargeable batteries, uninterruptable power supplies, charging systems and accessories. The Communications Systems segment includes RF amplifiers, power supplies, cable and connector assemblies, amplified speakers, equipment mounts, case equipment, man-portable systems, integrated communication systems for fixed or vehicle applications and communications and electronics systems design. We believe that segment contribution, defined as gross profit less direct selling, general and administrative (“SG&A”) and research and development expenses, is the best indicator of segment performance. As such, we report segment results at the segment contribution level. (See Note 10 in the notes to consolidated financial statements contained in Item 1 of this Form 10-Q.)

Our website address is www.ultralifecorporation.com. We make available free of charge via a hyperlink on our website (see Investors link on the website) our annual reports on Form 10-K, proxy statements, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports and statements as soon as reasonably practicable after such material is electronically filed with or furnished to the Securities and Exchange Commission (“SEC”). We will provide copies of these reports upon written request to the attention of Philip A. Fain, CFO, Treasurer and Secretary, Ultralife Corporation, 2000 Technology Parkway, Newark, New York, 14513. Our filings with the SEC are also available through the SEC website at www.sec.gov or at the SEC Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549 or by calling 1-800-SEC-0330.

#### Overview

Consolidated revenues of $47,445 for the three-month period ended March 31, 2026, decreased by $3,301 or 6.5%, over $50,746 for the three-month period ended March 31, 2025, reflecting a 5.5% decline in commercial sales and an 8.2% decline in government/defense sales.

Gross profit was $10,110 or 21.3% of revenue, for the three-month period ended March 31, 2026, compared to $12,745, or 25.1% of revenue, for the same quarter a year ago. The 380-basis point decline primarily resulted from sales product mix impacting tariffs, higher utility costs and certain one-time events impacting production delays and operating efficiencies.

Operating expenses were $10,325 for the three-month period ending March 31, 2026, compared to $9,346 for the three-month period ended March 31, 2025, reflecting an increase in new product development costs related to continued investment in our product offering and certain one-time, non-recurring costs. Operating expenses for the 2026 period were 21.8% of revenue compared to 18.4% of revenue for the year-earlier period.

Operating (loss) income for the three-month period ended March 31, 2026, was ($215), or (0.5)% of revenues, compared to $3,399, or 6.7% of revenues, for the year-earlier period. The decrease in operating income primarily resulted from the declines in revenue and gross margin and the increase in operating expenses, including $847 in one-time, non-recurring costs.

Net (loss) income attributable to Ultralife Corporation was ($451), or ($0.03) per share – basic and diluted, for the three-month period ended March 31, 2026, compared to $1,865, or $0.11 per share – basic and diluted, for the three-month period ended March 31, 2025.

Adjusted EBITDA, defined as net (loss) income attributable to Ultralife Corporation before net interest expense, (benefit) provision for income taxes, depreciation and amortization, and stock-based compensation expense, plus/minus expenses/income that we do not consider reflective of our ongoing operations, amounted to $3,209, or 6.8% of revenues, for the first quarter of 2026, compared to $5,448, or 10.7% of revenues, for the first quarter of 2025. See the section “Adjusted EBITDA” on page 20 for a reconciliation of adjusted EBITDA to net income attributable to Ultralife Corporation.

We remain intently focused on improving manufacturing efficiencies at our Newark, NY facility, particularly as we ramp up production of new products, in order to increase the gross margin of Battery & Energy Products, and on driving Communications Systems orders. These improvements, along with execution and replenishment of our backlog, position Ultralife to restore profitability and generate incremental cash flow for 2026 to reduce debt, support strategic capital expenditures, continue our investment in new product development and maximize the value of our global brand.

#### Results of Operations

### Three-Month Periods Ended March 31, 2026, and March 31, 2025

**Revenues.** Consolidated revenues for the three-month period ending March 31, 2026, were $47,445, a decrease of $3,301, or 6.5%, from $50,746 for the three-month period ended March 31, 2025. Overall, commercial sales decreased 5.5% and government/defense sales decreased 8.2%.

Battery & Energy Products revenues decreased $2,166, or 4.7%, from $46,321 for the three-month period ended March 31, 2025, to $44,155 for the three-month period ended March 31, 2026. The revenue decline was primarily attributable to a 5.5% decrease in commercial sales due to a 22.1% decrease in industrial and other commercial sales and a 5.9% decrease in oil & gas, offsetting a 5.9% increase in medical battery sales. The overall decline in commercial sales was in large part a result of lost production days due to the failure of the substation providing power to our Newark, NY facility and winter blizzards and a prolonged shutdown to conduct a comprehensive physical inventory at our Raynham, MA facility. Government/Defense sales declined 2.7% due to the shipment of a very large charger order for an allied country in the 2025 period.

Communications Systems sales decreased $1,135, or 25.7%, from $4,425 for the three-month period ended March 31, 2025, to $3,290 for the three-month period ended March 31, 2026. The decrease was primarily attributable to shipments in the prior year to a major international defense contractor and the timing of expected orders in the current period.

**Cost of Products Sold / Gross Profit.** Cost of products sold totaled $37,335 for the quarter ended March 31, 2026, a decrease of $666, or 1.8%, from the $38,001 reported for the same three-month period a year ago. Cost of products sold as a percentage of total revenue increased from 74.9% for the three-month period ended March 31, 2025, to 78.7% for the three-month period ended March 31, 2026. Correspondingly, consolidated gross margin decreased from 25.1% for the three-month period ended March 31, 2025, to 21.3% for the three-month period ended March 31, 2026, primarily reflecting sales product mix impacting tariffs, higher utility costs and certain one-time events impacting production days and operating efficiencies.

For our Battery & Energy Products segment, gross profit for the first quarter of 2026 was $9,358, a decrease of $2,082 or 18.2% from gross profit of $11,440 for the first quarter of 2025. Battery & Energy Products’ gross margin of 21.2% decreased by 350-basis points from the 24.7% gross margin for the year-earlier period, primarily due to sales product mix impacting tariffs, higher utility costs and certain one-time events impacting production days and operating efficiencies.

For our Communications Systems segment, gross profit for the first quarter of 2026 was $752 or 22.9% of revenues, compared to gross profit of $1,305 or 29.5% of revenues for the first quarter of 2025. The 660-basis point decrease in gross margin was primarily due to unfavorable sales mix and the 25.7% revenue decline reducing factory volume.

**Operating Expenses.** Operating expenses for the three-month period ended March 31, 2026, were $10,325, an increase of $979 or 10.5% from the $9,346 for the three-month period ended March 31, 2025. The increase is primarily attributable to a 23.2% increase in new product development costs related to continued investment in our product offerings and certain one-time, non-recurring expenses of $847 primarily related to consulting costs to help expedite gross margin improvement at our two largest manufacturing facilities and litigation expenses incurred for our cyber-insurance claim. Both periods reflected continued tight control over discretionary spending.

Overall, operating expenses were 21.8% of revenue for the quarter ending March 31, 2026, compared to 18.4% of revenue for the quarter ended March 31, 2025. Amortization expense associated with intangible assets related to our acquisitions was $267 for the first quarter of 2026 ($262 in selling, general and administrative expenses and $5 in research and development costs), compared with $405 for the first quarter of 2025 ($376 in selling, general, and administrative expenses and $29 in research and development costs). The year-over-year decline in amortization expenses resulted from our decision in the 2025 fourth quarter to undergo a comprehensive rebranding initiative that consolidates all sub-brands under a singular, unified master brand – Ultralife, and the ensuing write-down of tradenames and trademarks associated with out sub-brands during that period. Research and development costs were $2,961 for the three-month period ended March 31, 2026, an increase of $557 or 23.2%, from $2,404 for the three-month period ended March 31, 2025. The increase is attributable to an increase in new product development costs related to continued investment in our product offering as we aggressively pursue both government/defense and commercial opportunities. Selling, general, and administrative expenses were $7,364 for the three-month period ended March 31, 2026, an increase of $422 or 6.1% from $6,942 for the first quarter of 2025. The period-over-period increase was primarily attributable to the inclusion of certain one-time, non-recurring expenses of $847 primarily related to consulting costs to help expedite gross margin improvement at our two largest manufacturing facilities and litigation expenses incurred for our cyber-insurance claim.

**Other Expense.** Other expense totaled $448 for the three-month period ended March 31, 2026, compared to $953 for the three-month period ended March 31, 2025. Interest and financing expense decreased $164, or 15.9%, from $1,032 for the first quarter of 2025 to $868 for the comparable period in 2026 resulting from the financing of the Electrochem acquisition on October 31, 2024. Miscellaneous income amounted to $420 for the first quarter of 2026 compared to $79 for the first quarter of 2025, primarily attributable to refundable tax credits for certain qualifying battery cells and packs we manufacture under the 45X Advanced Manufacturing Production Credit, established by the Inflation Reduction Act which runs through 2032. The year-earlier period reflects interest income recognized on the Employee Retention Credit under the Coronavirus Aid, Relief and Economic Security Act filed on June 22nd, 2023, and approved for payment by the Internal Revenue Service on March 31, 2025. In addition, both periods reflect foreign exchange gains and losses due to fluctuations in foreign currency exchange rates.

**Income Taxes.** For the three-month period ended March 31, 2026, Ultralife recognized an income tax (benefit) provision of ($192), comprised of a current (benefit) provision of $136 expected to be paid on income primarily in foreign jurisdictions and a deferred tax (benefit) of $(328). This compares to a provision of $567 comprised of a current provision of $223 and a deferred tax provision of $344 for the three-month period ended March 31, 2025. Our effective tax rate was 29.0% for the first quarter of 2026 as compared to 23.2% for the first quarter of 2025, primarily attributable to the geographic mix of our operating results and other income recognized on the nontaxable refundable tax credits under the 45X Advanced Manufacturing Production Credit. See Note 6 to the consolidated financial statements in Item 1 of Part I of this Form 10-Q for additional information regarding our income taxes.

**Net (Loss) Income Attributable to Ultralife Corporation.** Net (loss) income attributable to Ultralife Corporation was ($451), or ($0.03) per share – basic and diluted, for the three-month period ended March 31, 2026, compared to $1,865, or $0.11 per share – basic and diluted, for the three-month period ended March 31, 2025. Weighted average shares outstanding used to compute diluted earnings per share decreased from 16,679,758 for the first quarter of 2025 to 16,656,503 for the first quarter of 2026.

#### Adjusted EBITDA

In evaluating our business, we consider and use adjusted EBITDA, a non-GAAP financial measure, as a supplemental measure of our operating performance. We define adjusted EBITDA as net (loss) income attributable to Ultralife Corporation before interest expense, provision for income taxes, depreciation and amortization, and stock-based compensation expense, plus/minus expense/income that we do not consider reflective of our ongoing continuing operations. We also use adjusted EBITDA as a supplemental measure to review and assess our operating performance and to enhance comparability between periods. We believe the use of adjusted EBITDA facilitates investors’ understanding of operating performance from period to period by backing out potential differences caused by variations in such items as capital structures (affecting relative interest expense and stock-based compensation expense), the amortization of intangible assets acquired through our business acquisitions (affecting relative amortization expense and provision (benefit) for income taxes), the age and book value of facilities and equipment (affecting relative depreciation expense) and one-time charges/benefits relating to income taxes. We also present adjusted EBITDA from operations because we believe it is frequently used by securities analysts, investors and other interested parties as a measure of financial performance. We reconcile adjusted EBITDA to net (loss) income attributable to Ultralife Corporation, the most comparable financial measure under GAAP.

We use adjusted EBITDA in our decision-making processes relating to the operation of our business together with GAAP financial measures such as operating (loss) income. We believe that adjusted EBITDA permits a comparative assessment of our operating performance, relative to our performance based on our GAAP results, while eliminating the effects of depreciation and amortization, which may vary from period to period without any correlation to underlying operating performance, and of stock-based compensation, which is a non-cash expense that varies widely among companies. We believe that by presenting adjusted EBITDA, we assist investors in gaining a better understanding of our business on a going forward basis. We provide information relating to our adjusted EBITDA so that securities analysts, investors and other interested parties have the same data that we employ in assessing our overall operations. We believe that trends in our adjusted EBITDA are a valuable indicator of our operating performance on a consolidated basis and of our ability to produce operating cash flows to fund working capital needs, to service debt obligations and to fund capital expenditures.

The term adjusted EBITDA is not defined under GAAP and is not a measure of operating (loss) income, operating performance or liquidity presented in accordance with GAAP. Our adjusted EBITDA has limitations as an analytical tool, and when assessing our operating performance, adjusted EBITDA should not be considered in isolation or as a substitute for net income attributable to Ultralife Corporation or other consolidated statement of operations data prepared in accordance with GAAP. Some of these limitations include, but are not limited to, the following:

- Adjusted EBITDA does not reflect (1) our cash expenditures or future requirements for capital expenditures or contractual commitments; (2) changes in, or cash requirements for, our working capital needs; (3) the interest expense, or the cash requirements necessary to service interest or principal payments, on our debt; (4) income taxes or the cash requirements for any tax payments; and (5) all of the costs associated with operating our business;
- Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized often will have to be replaced in the future, and adjusted EBITDA from continuing operations does not reflect any cash requirements for such replacements;
- While stock-based compensation is a component of cost of products sold and operating expenses, the impact on our consolidated financial statements compared to other companies can vary significantly due to such factors as assumed life of the stock-based awards and assumed volatility of our common stock; and
- Other companies may calculate adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure.

We compensate for these limitations by relying primarily on our GAAP results and using adjusted EBITDA only on a supplemental basis. Neither current nor potential investors in our securities should rely on adjusted EBITDA as a substitute for any GAAP measures and we encourage investors to review the following reconciliation of adjusted EBITDA to net loss attributable to Ultralife Corporation.

Adjusted EBITDA is calculated as follows for the periods presented:

|  | Three-Month Period Ended March 31, 2026 | March 31, 2025 |
| --- | ---: | ---: |
| Net (loss) income attributable to Ultralife Corporation | $(451) | $1,865 |
| Adjustments: |  |  |
| Interest expense | 868 | 1,032 |
| Income tax (benefit) provision | (192) | 567 |
| Depreciation expense | 1,054 | 950 |
| Amortization of intangible assets | 267 | 405 |
| Stock-based compensation expense | (1) | 227 |
| Severance costs for plant closure | - | 150 |
| Non-Recurring and acquisition costs | 847 | 192 |
| One-Time Events Impacting Production | 817 | - |
| Non-cash purchase accounting adjustments | - | 60 |
| Adjusted EBITDA | $3,209 | $5,448 |

#### Liquidity and Capital Resources

As of March 31, 2026, cash totaled $8,890, as compared to $9,345 at December 31, 2025. The decrease largely reflects decreased revenue by our operations during the period, as well as a reduction in our outstanding debt.

For the three-month period ended March 31, 2026, cash generated from operations was $2,256, as compared to $3,368 generated for the three-month period ended March 31, 2025. For the 2026 period, cash generated from operations was comprised of net loss of $471 plus non-cash items totaling $1,058 for depreciation, amortization, stock-based compensation, and deferred taxes, as well as $1,669 attributable to working capital.

Cash used in investing activities for the three months ended March 31, 2026, was $770 for capital expenditures, primarily reflecting investments in equipment for new products transitioning to higher-volume manufacturing.

Cash used in financing activities for the three months ended March 31, 2026, was $2,063, representing a $2,063 reduction in our outstanding debt.

We continue to have significant U.S. net operating loss carryforwards available to utilize as an offset to future taxable income. See Note 6 to the consolidated financial statements in Item 1 of Part 1 of this Form 10-Q for additional information.

Going forward, we expect positive operating cash flow and the availability of borrowings under our Revolving Credit Facility will be sufficient to meet our general funding requirements for the foreseeable future.

To provide flexibility in accessing the capital markets, on March 30, 2021, the Company filed a shelf registration statement on Form S-3 (File No. 333-254846) (the “Prior Registration Statement”) registering securities in an aggregate amount of $100,000,000. None of the $100,000,000 of registered securities were sold under the Prior Registration Statement (the “Unsold Securities”). Under the rules of the Securities and Exchange Commission (the “SEC”) the Prior Registration Statement was set to expire on April 2, 2024. Therefore, on March 29, 2024, the Company filed a new shelf registration statement on Form S-3 (File No. 333-278360) (the “New Registration Statement”) to replace the Prior Registration Statement. The New Registration Statement includes all $100,000,000 of the Unsold Securities registered on the Prior Registration Statement. The SEC declared the New Registration Statement effective May 7, 2024. Pursuant to Rule 415(a)(6) under Securities Act of 1933, as amended (the “Securities Act”), the offering of the Unsold Securities under the Prior Registration Statement was deemed terminated as of the date of effectiveness of the New Registration Statement. Upon the filing of an appropriate prospectus supplement or supplements under the New Registration Statement, we may offer and sell our securities from time to time in one or more offerings, at our discretion. We intend to use the net proceeds resulting from any sales of these securities for general corporate purposes which may include, but are not limited to, potential acquisitions of complementary businesses or technologies, strategic capital expenditures to expand and protect our competitive position, and investments in the development of transformational, competitively differentiated products for attractive growth markets.

#### Commitments

As of March 31, 2026, the Company had $48,188 outstanding on the Term Loan and no amounts outstanding on the Revolving Credit Facility. The Company was in full compliance with its debt covenants under the Revolving Credit Facility and Term Loan as of March 31, 2026.

As of March 31, 2026, we have made commitments to purchase approximately $545 of production machinery and equipment.

#### Critical Accounting Policies

Management exercises judgment in making important decisions pertaining to choosing and applying accounting policies and methodologies in many areas. Not only are these decisions necessary to comply with GAAP, but they also reflect management’s view of the most appropriate manner in which to record and report our overall financial performance. All accounting policies are important, and all policies described in Note 1 to the consolidated financial statements in our 2025 Annual Report on Form 10-K should be reviewed for a greater understanding of how our financial performance is recorded and reported.

During the first three months of 2026, there were no significant changes in the manner in which our significant accounting policies were applied or in which related assumptions and estimates were developed.

## Controls and procedures

As filed, 7,770 characters.

#### Evaluation of Disclosure Controls and Procedures

Management, under the supervision and with the participation of our President and Chief Executive Officer (principal executive officer) and our Chief Financial Officer and Treasurer (principal financial officer), has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) as of the end of the period covered by this quarterly report. Management has concluded that our disclosure control and procedures were not effective as of March 31, 2026, because of the existing material weakness in our internal control over financial reporting as previously reported in our Annual Report on Form 10-K for the year ended December 31, 2025.

Notwithstanding the material weakness identified, management believes that the Consolidated Financial Statements included in this Quarterly Report on Form 10-Q are fairly stated in all material respects in accordance with U.S. generally accepted accounting principles for each of the periods presented.

#### Material Weakness in Internal Control over Financial Reporting

Management conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2025, using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control - Integrated Framework (2013). Based on our evaluation, management concluded that there is a material weakness in our internal control over financial reporting. As a result of the material weakness identified, management has concluded that our internal control over financial reporting was not effective as of December 31, 2025. The material weakness was not yet fully remediated as of March 31, 2026.

A material weakness is defined as a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our financial statements will not be prevented or detected on a timely basis.

A material weakness has been identified because remediation efforts initiated during the year ended December 31, 2025 relating to the material weakness identified during the year ended December 31, 2024 attributable to the need for additional personnel to provide a full complement of accounting and reporting expertise had not been in place and adequately documented for a sufficient period of time to allow management to conclude that the related controls were operating effectively. In addition, information technology general controls (ITGC) were not operating effectively to ensure that (i) access to applications and data, including the ability to make changes, was appropriately restricted to authorized personnel, and (ii) the activities of individuals with such access were adequately monitored. As a result, business process controls (automated and manual) that are dependent on the affected ITGCs were also deemed ineffective because they could have been adversely impacted.

#### Remediation Efforts to Address Material Weakness

Over the course of 2025, management implemented a remediation plan designed to address the material weakness identified during the year ended December 31, 2024, attributable to the need for additional personnel to provide a full complement of accounting and reporting expertise commensurate with the growth of the Company. The Company has significantly strengthened its finance and accounting team by adding a new oversight role and hiring additional highly experienced personnel including certified public accountants. The personnel actions taken include the naming of a Chief Accounting Officer with a backfill to the Corporate Controller role and filling the following positions: Director – Internal Audit & SOX Compliance, Manager – Corporate Accounting, Manager – Corporate Reporting & Consolidations, Controller – Electrochem, and Senior Management Accountant – Electrochem. Significant improvements in the design, execution and documentation of business process controls were implemented across our locations pursuant to our remediation plan during the second half of 2025 once the additional oversight was in place and additional personnel were hired; however, it was determined that certain business process controls were not in place and adequately documented for a sufficient period of time to allow management to conclude that the previously identified material weakness was fully remediated as of December 31, 2025.

During the first quarter of 2026 and through the date of this Quarterly Report on Form 10-Q, management continues to develop and is actively implementing corrective actions to remediate the identified ITGC deficiencies. The Company is conducting a comprehensive risk-based evaluation of user access to our key IT applications to ensure that access is appropriately administered. Access will be restricted to the extent possible, and monitoring or other mitigating controls will be implemented to address instances, if any, where system-level segregation may not be feasible. Steps have been taken to restrict certain user access and to evaluate activity logs through the period that such access was deemed to have not been appropriately restricted. Additionally, we are in the process of formalizing our user access reviews and requiring that they are performed on a more frequent and timely basis.

Remediation will be deemed complete once all corrective actions are fully implemented and in place for a sufficient period of time and further evaluation is performed, including testing, to conclude that our internal control over financial reporting is effective.

#### Changes in Internal Control Over Financial Reporting

Other than the remedial actions described above, there were no changes in our internal control over financial reporting (as defined in Securities Exchange Act Rule 13a-15(f)) that occurred during the fiscal quarter covered by this quarterly report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

#### Limitations of Effectiveness of Controls

Management, including our Chief Executive Officer and Chief Financial Officer, does not expect that the Company’s disclosure controls and procedures or its internal control over financial reporting will prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that its objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Furthermore, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons or by the collusion of two or more persons. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of the effectiveness of controls to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

Filed May 8, 2026.
Source: SEC EDGAR, the filing index for accession 0001437749-26-015750. Last ingested by Listed: Nov 5, 2026, 19:58 ET. No prices; not investment advice.