Fitlife Brands, Inc.: Form 10-Q for the period ended Mar 31, 2026

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes appearing elsewhere in this Quarterly Report on Form 10-Q (this "Quarterly Report"). This discussion and analysis may contain forward-looking statements based on assumptions about our future business. Unless otherwise stated, all dollar amounts are in thousands, except per share data.

Overview

FitLife Brands, Inc. (the “Company”) is a provider of innovative and proprietary nutritional supplements and wellness products for health-conscious consumers marketed under the following brand names: (i) NDS Nutrition, PMD Sports, SirenLabs, Core Active, Nutrology, and Metis Nutrition (together, the “NDS Products”); (ii) iSatori, BioGenetic Laboratories, and Energize (together, the "iSatori Products"); (iii) Dr. Tobias, All Natural Advice, and Maritime Naturals (together, the “MRC Products"); (iv) MusclePharm; and (v) Irwin Naturals, Applied Nutrition, and Nature’s Secret (together, the “Irwin Products”).

The Company distributes the NDS Products principally through franchised General Nutrition Centers, Inc. (“GNC”) stores located both domestically and internationally. The iSatori Products are sold through retail locations, which include specialty and mass market retailers, as well as online directly to the end consumer. The Company distributes the MRC Products primarily online through e-commerce platforms, such as Amazon.com (“Amazon”), directly to the end consumer. MusclePharm’s products are sold to both wholesale customers as well as online through various e-commerce platforms directly to the end consumer. Irwin Products are sold principally through wholesale channels in mass market and health food store segments.

FitLife Brands is headquartered in Omaha, Nebraska. For more information on the Company, please go to www.fitlifebrands.com (http://www.fitlifebrands.com). The Company’s common stock, par value $0.01 per share (“Common Stock”), trades under the symbol “FTLF” on the Nasdaq Capital Market.

Recent Developments

Acquisition of Irwin Naturals

On August 8, 2025, the Company acquired substantially all of the assets and assumed certain liabilities of Irwin Naturals and its related affiliates (“Irwin”) through an asset purchase transaction under Section 363 of the U.S. Bankruptcy Code. Total consideration for the acquisition was $42.5 million. Of this amount, $29.75 million was funded using proceeds from a new term loan provided by First-Citizens Bank & Trust Company (the “Bank”), $6.0 million was funded from a new $10.0 million revolving line of credit from the Bank, and the remainder was funded from the Company’s available cash balances.

Stock Split

On February 7, 2025, the Company effected a 2-for-1 stock split of its Common Stock and proportionately increased the number of authorized shares of Common Stock. The shares of Common Stock retain a par value of $0.01 per share. Accordingly, an amount equal to the par value of the additional shares issued in the stock split was reclassified from additional paid-in capital in excess of par value to Common Stock.

Results of Operations

Comparison of the three months ended March 31, 2026 to the three months ended March 31, 2025

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Revenue. Revenue for the three months ended March 31, 2026 increased 59% to $25,325 compared to $15,936 for the three months ended March 31, 2025. The increase in revenue for the three months ended March 31, 2026 compared to the prior period is primarily due to the acquisition of Irwin, partially offset by declining revenue from Legacy FitLife, as discussed below. The Irwin assets were acquired on August 8, 2025.

Legacy FitLife revenue for the three months ended March 31, 2026 was $12,476, a 22% decrease compared to the previous year, driven by an 18% decline in online revenue primarily attributable to MRC as well as a 28% decrease in wholesale revenue attributable to lower sales to certain retail partners, primarily GNC.

Wholesale revenue during the quarter ended March 31, 2026 was approximately 56% of net revenue, compared to 44% for online channels for the same period. Wholesale revenue during the quarter ended March 31, 2025 was 33% of net revenue compared to 67% for online channels during the same period. The decline in the percentage of revenue coming from online sales is primarily due to the acquisition of Irwin, which had minimal online revenue at the time of the acquisition.

Sales to customers in the U.S. were approximately 95% and 96% during the quarters ended March 31, 2026 and 2025, respectively, with the balance of sales to customers primarily in Canada.

Cost of Goods Sold. Cost of goods sold for the three months ended March 31, 2026 increased to $15,808 as compared to $9,062 for the three months ended March 31, 2025. This 74% increase is primarily due to the increase in revenue from the acquisition of Irwin.

Gross Profit. Gross profit for the three months ended March 31, 2026 increased to $9,517 as compared to $6,874 for the three months ended March 31, 2025. This 38% increase in gross profit is principally attributable to the acquisition of Irwin, partially offset by lower gross profit from Legacy FitLife.

Gross Margin. Gross margin for the three months ended March 31, 2026 decreased to 37.6% from 43.1% for the comparable prior period. The decrease in gross margin is primarily attributable to the acquisition of Irwin, which has historically generated a lower gross margin than FitLife.

Advertising and Marketing. Advertising and marketing expense for the three months ended March 31, 2026 increased to $1,245 as compared to $1,053 for the same period of the prior year. The 18% increase is primarily the result of advertising and marketing expense attributable to Irwin, partially offset by lower advertising and marketing expense attrinutable to Legacy FitLife.

SG&A. SG&A expense for the three months ended March 31, 2026 increased 98% to $4,963 as compared to $2,512 for the three months ended March 31, 2025. The 98% increase in SG&A is primarily due to the acquisition of Irwin.

Merger and Acquisition Related. Merger and acquisition related expense decreased by $332 during the quarter ended March 31, 2026 compared to $332 for the same period in 2025, driven by non-recurring transaction costs related to the Irwin acquisition during 2025.

Net Income. We generated net income of $1,720 for the three months ended March 31, 2026 as compared to net income of $2,018 for the three months ended March 31, 2025. The decrease in net income for the three months ended March 31, 2026 compared to the same period in 2025 was primarily attributable to an increase in SG&A due to the Irwin acquisition as well as lower gross profit attributable to Legacy FitLife.

Supplemental Discussion of Performance of Acquired Brands

One of the primary metrics used by management to evaluate the performance of the Company’s brands is contribution, a non-GAAP financial measure which management defines as gross profit less advertising and marketing expenditures. Other companies may also report contribution as a performance metric, but their definition or calculation of contribution may differ from the Company’s. Management believes that contribution, as defined by the Company, is a particularly relevant performance metric since it incorporates the gross profit associated with a specific brand or collection of brands as well as the advertising and marketing expense associated with the same brand or brands. With limited exceptions, other operating expense incurred by the Company is generally not allocable to a specific brand or collection of brands. Management intends to provide this level of disclosure for approximately two years following a transaction, after which the performance of acquired brands will be reported as part of Legacy FitLife results.

Other than for Irwin Products, the numbers in the contribution tables presented below represent the performance of a collection of brands. Legacy FitLife consists of thirteen brands. These collections of brands do not meet the definition of operating segments and are not managed as such.

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For the first quarter of 2026, revenue for Legacy FitLife (which now includes MusclePharm as well as MRC) declined 22% compared to the same period last year due to declines in both online and wholesale revenue.

Online revenue decreased by 18% compared to the first quarter of last year, primarily driven by lower online sales from MRC. Wholesale revenue decreased 28% compared to the first quarter of last year attributable to lower sales to certain retail partners, primarily GNC.

Gross margin for Legacy FitLife decreased to 41.2% during the first quarter of 2026, compared to 43.1% during the first quarter of last year. Contribution as a percentage of revenue decreased to 34.1% compared to 36.5% during the first quarter of last year.

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During the quarter, Irwin generated 80% of its revenue from the wholesale channel and 20% from online sales.

Online revenue during the quarter represents transactions through Irwin’s websites as well as through Amazon and other e-commerce platforms. The Company began selling Irwin products on Amazon in mid-October of 2025, and sales have continued to increase since launch in October to an annual run rate of approximately $9.5 million of revenue by the end of the first quarter of 2026.

Total revenue for Irwin increased approximately 2% in the first quarter of 2026 compared to the fourth quarter of 2025. Irwin generated gross margin of 34.0% and contribution as a percentage of revenue of 31.3% during the first quarter of 2026.

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For the first quarter of 2026 for the Company overall, revenue increased 59%, gross profit increased 38%, and contribution increased 42% compared to the first quarter of 2025.

Gross margin decreased to 37.6% during the first quarter of 2026 compared to 43.1% during the first quarter of last year, with the decline in gross margin primarily attributable to the acquisition of Irwin, which historically operated at a lower gross margin than Legacy FitLife.

Contribution as a percentage of revenue for the first quarter of 2026 decreased to 32.7% compared to 36.5% during the first quarter of last year.

Non-GAAP Measures

The financial presentation below contains certain financial measures not in accordance with GAAP, defined by the SEC as “non-GAAP financial measures”, including EBITDA and adjusted EBITDA. These measures may be different from non-GAAP financial measures used by other companies. The presentation of this financial information, which is not prepared under any comprehensive set of accounting rules or principles, is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in this Quarterly Report in accordance with GAAP.

As presented below, EBITDA excludes interest, foreign exchange gains and losses, income taxes, and depreciation and amortization. Adjusted EBITDA excludes—in addition to interest, foreign exchange losses, taxes, depreciation and amortization—stock-based compensation, merger and acquisition related expense and other non-recurring items. The Company believes the non-GAAP measures provide useful information to both management and investors by excluding certain expense and other items that may not be indicative of its core operating results and business outlook. The Company believes that the inclusion of non-GAAP measures in the financial presentation below allows investors to compare the Company’s financial results with the Company’s historical financial results and is an important measure of the Company’s comparative financial performance.

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21

Liquidity and Capital Resources

As of March 31, 2026, the Company had positive working capital of $10,828, compared to $11,459 at December 31, 2025. Our principal sources of liquidity at March 31, 2026 consisted of $1,192 of cash and $7,778 of accounts receivable. The decrease in working capital is principally attributable to lower accounts receivable balances as of March 31, 2026 as compared to December 31, 2025.

On September 24, 2019, the Company entered into a line of credit agreement with Mutual of Omaha Bank (the “Lender”), subsequently acquired by CIT Bank N.A., then acquired by First Citizens Bank & Trust Company, providing the Company with a $2.5 million revolving line of credit (the “Line of Credit”). The Line of Credit allowed the Company to request advances thereunder and to use the proceeds of such advances for working capital purposes until the maturity date, or unless renewed at maturity upon approval by the Company’s Board and the Lender. The Line of Credit was secured by all assets of the Company.

On September 20, 2022, the Company and the Lender amended the Line of Credit Agreement to extend the maturity date to December 23, 2022. On December 19, 2022, the Company and the Lender amended the Line of Credit agreement to increase the Line of Credit to $3.5 million and extend the maturity date to December 23, 2023.

On February 23, 2023, the Company and the Lender amended the Line of Credit Agreement (the “2023 Credit Agreement”) providing the Company with a term loan for the principal amount of $12.5 million (“Term Loan A”). All other terms of the Credit Agreement remain unchanged. All of the proceeds from Term Loan A were used for the acquisition of MRC.

On October 10, 2023, the Company entered into a Second Amended and Restated Credit Agreement (the “Prior Credit Agreement”) with the Lender, amending and restating the 2023 Credit Agreement between the Company and the Lender. Pursuant to the Prior Credit Agreement, the Lender provided the Company with an additional term loan (“Term Loan B”, and together with Term Loan A, the “Term Loans”) for the principal amount of $10,000 and extended the maturity date of the Line of Credit of $3.5 million to December 23, 2024. The Company used the proceeds from Term Loan B to fund the acquisition of the MusclePharm assets.

On December 19, 2024, the Company entered into the First Amendment to the Prior Credit Agreement (the “Amended Prior Credit Agreement”) to extend the maturity date of the $3.5 million Line of Credit to April 30, 2026. Pursuant to the Amended Prior Credit Agreement, the Line of Credit accrued interest at an annual rate equal to the greater of 3.50% or the one-month secured overnight financing rate (“SOFR”) rate plus 2.75%, and each advance was payable on the maturity date with the interest on outstanding advances payable monthly. The Company was permitted, at its option, to prepay any borrowings under the Line of Credit, in whole or in part at any time prior to the maturity date, without premium or penalty.

On August 8, 2025 (the “Closing Date”), the Company entered into a new credit agreement (the “Credit Agreement”) with First-Citizens Bank & Trust Company (the “Bank”). Pursuant to the Credit Agreement, the Bank provided the Company with a five-year term loan in the amount of $40,625 (the “Irwin Term Loan”) and a three-year revolving line of credit of up to $10,000 (the “Credit Line”, and collectively with the Irwin Term Loan, the “Loan”). The Company used $29,750 from the Irwin Term Loan to complete the purchase of substantially all of the assets of Irwin, and its related affiliates, pursuant to an Asset Purchase and Sale Agreement, and $10,875 to pay off, retire and replace all existing debt of the Company as of the Closing Date.

Pursuant to the Credit Agreement, the Irwin Term Loan accrues interest at a per annum rate equal to 2.50% to 3.00%, based on leverage, above the secured overnight financing rate published by the Federal Reserve Bank of New York for the applicable selected interest period of one, three or six months (“Term SOFR Rate”, the Term SOFR Rate together with the aforementioned margin, the “Applicable Rate”). The Company shall make payments of accrued interest on the Irwin Term Loan at the end of each interest period and shall make payments on March 31, June 30, September 30 and December 31, of each calendar year. The Company began making quarterly payments of principal plus accrued interest on the Irwin Term Loan on December 31, 2025. Principal payments of $1,523 will be made quarterly through September 30, 2025, and each quarterly payment thereafter will be $2,031, in each case plus accrued interest. All remaining principal and accrued interest on the Irwin Term Loan will be due and payable in full on August 8, 2030.

Outstanding advances under the Credit Line (“Advances”) will accrue interest at the Applicable Rate, and the Company shall make payments of accrued interest on such Advances at the end of each interest period and on the repayment of any Advance with all remaining principal and accrued interest on the Advances being due and payable in full on August 8, 2028.

The Credit Agreement contains customary covenants to maintain a Senior Funded Debt to EBITDA Ratio (as defined in the Credit Agreement) of not more than 2.75 to 1.00 as tested quarterly on a trailing twelve-month basis, starting with the fiscal quarter ending December 31, 2025 and ending with the fiscal quarter ended June 30, 2026, and a Senior Funded Debt to EBITDA Ratio (as defined in the Credit Agreement) of not more than 2.50 to 1.00 as tested quarterly on a trailing twelve-month basis, starting with the fiscal quarter ending September 30, 2026, and to maintain a Fixed Charge Coverage Ratio (as defined in the Credit Agreement) of at least 1.25 to 1.00 as tested on the last day of each fiscal quarter, commencing with the quarter ending December 31, 2025.

As of March 31, 2026, the borrowings outstanding on the Irwin Term Loan and the Credit Line were $37,578 and $4,200, respectively.

The Company has historically financed its operations primarily through cash flow from operations and equity and debt financings. The Company currently anticipates that cash derived from operations and existing cash reserves, along with available borrowings under the Line of Credit, will be sufficient to provide for the Company’s liquidity for the next twelve months.

Cash Provided by Operating Activities. Cash provided by operating activities for the three months ended March 31, 2026 was $2,484 compared to cash provided by operating activities of $2,328 for the three months ended March 31, 2025. The increase in cash provided by operating activities was primarily due to working capital fluctuations compared to the same period of 2025.

Cash Used in Investing Activities. Cash used in investing activities for the three months ended March 31, 2026 and 2025 was $0 and $24, respectively. The decrease in cash used in investing activities was due to lower capital expenditures for the three months ended March 31, 2026.

Cash Used in Financing Activities. Cash used in financing activities for the three months ended March 31, 2026 was $2,924 compared to $866 during the three months ended March 31, 2025. The cash used in financing activities for the three months ended March 31, 2026 increased primarily due to higher repayment of debt.

Critical Accounting Policies and Estimates

Our discussion and analysis of financial condition and results of operations is based upon our condensed consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these condensed consolidated financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, expense, and related disclosure of contingent assets and liabilities. We evaluate, on an on-going basis, our estimates and judgments, including those related to the useful life of the assets. We base our estimates on historical experience and assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The methods, estimates and judgments we use in applying our most critical accounting policies have a significant impact on the results that we report in our condensed consolidated financial statements. The SEC considers an entity’s most critical accounting policies to be those policies that are both most important to the portrayal of a company’s financial condition and results of operations and those that require management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about matters that are inherently uncertain at the time of estimation. For a more detailed discussion of the accounting policies of the Company, see Note 3 of the Notes to the Condensed Consolidated Financial Statements included in this Quarterly Report, “Summary of Significant Accounting Policies”.

We believe the following critical accounting policies, among others, require significant judgments and estimates used in the preparation of our consolidated financial statements.

Use of Estimates and Assumptions

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) the disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and (iii) the reported amount of net sales and expense recognized during the periods presented.

Those estimates and assumptions include estimates for reserves of uncollectible accounts receivable, allowance for inventory obsolescence, product returns, depreciable lives of property and equipment, allocation of purchase price from business combinations, analysis of impairment of goodwill, realization of deferred tax assets, accruals for potential liabilities and assumptions made in valuing stock instruments issued for services. Management evaluates these estimates and assumptions on a regular basis. Actual results could differ from those estimates.

Goodwill

In accordance with FASB ASC 350, Intangibles-Goodwill and Other, we review goodwill and indefinite lived intangible assets for impairment at least annually or whenever events or circumstances indicate a potential impairment. Our impairment testing is performed annually at December 31 (our fiscal year end). Impairment of goodwill and indefinite lived intangible assets is determined by comparing the fair value of our reporting units to the carrying value of the underlying net assets in the reporting units. If the fair value of a reporting unit is determined to be less than the carrying value of its net assets, goodwill is deemed impaired and an impairment loss is recognized to the extent that the carrying value of goodwill exceeds the difference between the fair value of the reporting unit and the fair value of its other assets and liabilities.

Management concluded that a triggering event did not occur during the three months ended March 31, 2026. We will continue to review for impairment indicators as necessary in future periods.

Revenue Recognition

The Company’s revenue is comprised of sales of nutritional supplements and wellness products to consumers.

The Company accounts for revenue in accordance with FASB ASC 606. The underlying principle of ASC 606 is to recognize revenue to depict the transfer of goods or services to customers at the amount expected to be collected. ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contract(s), which includes (1) identifying the contract(s) or agreement(s) with a customer, (2) identifying our performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. Under ASC 606, revenue is recognized when performance obligations under the terms of a contract are satisfied, which occurs for the Company upon shipment or delivery of products to our customers based on written sales terms. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring the products to a customer.

All products sold by the Company are distinct individual products and consist of nutritional supplements and wellness products. The products are offered for sale solely as finished goods, and there are no performance obligations required post-shipment for customers to derive the expected value from them.

The Company’s products are also sold on e-commerce platforms including Amazon. For these transactions, the Company evaluated principal versus agent considerations to determine appropriateness of recording platform fees paid to Amazon as an expense or as a reduction of revenue. The Company records platform fees paid to Amazon for distribution of Company products to cost of goods sold in the condensed consolidated statements of income and comprehensive income. Distribution and platform fees are not recorded as a reduction of revenue because the Company (1) owns the goods before they are transferred to the customer, (2) can direct Amazon, similar to other third-party logistics providers (“Logistic Providers”), to return the Company’s inventory to any location specified by the Company, (3) has the responsibility to make customers whole following any returns made by customers directly to Logistic Providers and the Company retains the back-end inventory risk, (4) is subject to credit risk (i.e., credit card chargebacks), (5) establishes prices of its products, (6) can determine who fulfills the goods to the customer (Amazon or the Company) and (7) can limit quantities or stop selling the goods at any time. Based on these considerations, the Company is the principal in this arrangement.

The Company disaggregates revenue into geographical regions and distribution channels. The Company determines that disaggregating revenue into these categories achieves the disclosure objective to depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors.

Wholesale revenue during the quarter ended March 31, 2026 was approximately 56% of net revenue, compared to 44% for online channels for the same period. Wholesale revenue during the quarter ended March 31, 2025 was approximately 33% of net revenue, compared to 67% for online channels during the same period in 2025.

Sales to customers in the U.S. were approximately 95% and 96% during the three months ended March 31, 2026 and 2025, respectively, with the balance of sales for the same respective periods being to customers primarily in Canada.

Control of products we sell transfers to customers upon shipment from our facilities or delivery to our customers, and the Company’s performance obligations are satisfied at that time. Shipping and handling activities are performed before the customer obtains control of the goods and therefore represent a fulfillment activity rather than promised goods to the customer. Payments for sales are generally made by check, credit card, or wire transfer. Historically the Company has not experienced any significant payment delays from customers.

For direct-to-consumer sales, with the exception of Irwin Products, the Company allows for returns within 30 days of purchase. Irwin allows for returns within 60 days of purchase for direct-to-consumer sales. Our wholesale customers, such as GNC, may return purchased products to the Company under certain circumstances, which include expired or soon-to-be-expired products located in GNC corporate stores or at any of its distribution centers, and products that are subject to a recall or that contain an ingredient or ingredients that are subject to a recall by the FDA.

A right of return does not represent a separate performance obligation, but because customers are allowed to return products, the consideration to which the Company expects to be entitled is variable. Upon evaluation of returns, the Company determined that product returns are immaterial and therefore believes it is probable that such returns will not cause a significant reversal of revenue in the future. We assess our contracts and the reasonableness of our conclusions on a quarterly basis.

Recent Accounting Pronouncements

See Note 3 of the Condensed Consolidated Financial Statements included in this Quarterly Report for a description of recent accounting pronouncements believed by management to have a material impact on our present or future financial statements.

Our business is conducted principally in the U.S. However, due to the MRC acquisition in 2023, the Company now has more exposure to fluctuations in foreign currencies. As a result, our financial results may be materially affected by factors such as changes in foreign currency exchange rates or economic conditions in foreign markets.

Foreign Currency

The Company has not entered into any foreign currency hedging transactions during the three months ended March 31, 2026 or years ended December 31, 2025 or 2024.

Interest Rates

Our exposure to risk for changes in interest rates relates primarily to borrowings under the Credit Agreement (which includes the Irwin Term Loan as well as our Credit Line), and our investments in short-term financial instruments. As of March 31, 2026 the Company had $37,578 outstanding on the Irwin Term Loan (of which $18,500 was swapped for a fixed rate, thereby eliminating interest rate variability on that portion of the loan) and $4,200 under its Credit Line.

Investments of our cash balances in both fixed-rate and floating-rate interest-earning instruments carry some interest rate risk. The fair value of fixed-rate securities may fall due to a rise in interest rates, while floating-rate securities may produce less income than expected if interest rates fall. Partly as a result of this, our future interest income will vary due to changes in interest rates and we may suffer losses in principal if we are forced to sell securities that have fallen in estimated fair value due to changes in interest rates. However, as substantially all of our cash equivalents consist of bank deposits and short-term money market instruments, we do not expect any material change with respect to our net income as a result of an interest rate change.

a. Evaluation of disclosure controls and procedures. Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, an evaluation of the effectiveness of the design and operations of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as of March 31, 2026 was completed. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer believe that our disclosure controls and procedures are effective to ensure that information required to be disclosed in the reports submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, including to ensure that information required to be disclosed by the Company is accumulated and communicated to management, including the principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

b. Changes in Internal Control Over Financial Reporting There were no additional changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

c. Inherent Limitations on the Effectiveness of Controls Management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control systems are met. Further, 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. Because of the inherent limitations in a cost-effective control system, no evaluation of internal control over financial reporting 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 or will be detected.

These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of a simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. 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 controls effectiveness 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.

PART II

OTHER INFORMATION

Our results of operations and financial condition are subject to numerous risks and uncertainties described in our comprehensive Annual Report on Form 10-K for our fiscal year ended December 31, 2025, filed with the SEC on March 31, 2026. Management is not aware of any material changes to the risk factors discussed in Part 1, Item 1A, of the Annual Report on Form 10-K for the year ended December 31, 2025. You should carefully consider these risk factors in conjunction with the other information contained in this Quarterly Report. Should any of these risks materialize, our business, financial condition and future prospects could be negatively impacted.