AMC Robotics Corp 10-Q

Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations References to the “Company,” “our,” “us” or “we” refer to AMC Robotics Corporation. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited financial statements and the notes related thereto. Certain information contained in the discussion and analysis set forth below includes forward-looking statements. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors. Overview Our Company and our Business Overview AMC Robotics Corporation became publicly listed through its business combination with AlphaVest Acquisition Corp. in December 2025. The transaction was accounted for as a reverse recapitalization, with AMC Corporation deemed the accounting acquirer. Accordingly, the historical financial statements of AMC Corporation form the basis of the Company’s consolidated financial statements. The Company distributes security camera products through e-commerce platforms across the United States, Canada, and Europe. Its product offerings are primarily focused on residential and small business applications, including indoor and outdoor smart cameras. Prior to December 2025, certain e-commerce platform accounts were operated through arrangements with third-party entities, including Ants, Xiaoyun, and Yishijue, pursuant to authorization agreements. As of December 1, 2025, the Company terminated the contractual arrangements with Xiaoyun and Yishijue, resulting in the deconsolidation of these variable interest entities. Following such termination, the Company operates its business without reliance on VIE structures. Recent Development and Future Objectives Business Combination In December 2025, the Company completed its business combination with AlphaVest Acquisition Corp., as a result of which AMC Corporation became a wholly owned subsidiary of AMC Robotics Corporation. The transaction was accounted for as a reverse recapitalization, with AMC Corporation deemed the accounting acquirer for financial reporting purposes. Private Investment in Public Equity (“PIPE”) Financing In connection with the Business Combination, the Company completed a PIPE financing that generated gross proceeds of $8.0 million. The PIPE financing closed concurrently with the Business Combination, and the Company issued warrants to investors as part of the transaction. Revenue Streams During 2025, the Company’s revenue mix shifted, with a decline in product sales and the introduction of a revenue-sharing arrangement with its related party, Kami Vision Inc.. Under this arrangement, the Company is entitled to a percentage of revenue generated from intelligent information services. This revenue stream continued during the three months ended March 31, 2026. Business Outlook The Company intends to continue generating revenue from its existing product lines while advancing its strategy to develop and deploy autonomous robotic systems and intelligent security solutions. Management expects that continued execution of this strategy may improve margins and support long-term growth, although the timing and extent of such improvements remain subject to market conditions and execution risks. 34 Executive Summary of Financial Performance Three months ended March 31, (in USD) 2026 2025 $ change % Change Total Revenue 1,184,616 1,792,525 (607,909 ) (34 )% Cost of Revenue (163,960 ) (1,304,195 ) 1,140,235 87 % Gross Profit 1,020,656 488,330 532,326 109 % Operating Income (Loss) 128,539 (747,753 ) 876,292 NM Net Income (Loss) 145,601 (77,177 ) 222,778 NM The Company’s financial performance for the three months ended March 31, 2026 reflects a shift in operating focus toward profitability, cost efficiency, and higher-margin revenue streams. Total revenue decreased by $607,909, or 34%, to $1,184,616 for the three months ended March 31, 2026, compared to $1,792,525 for the same period in 2025. The decline was primarily attributable to a reduction in lower-margin product sales and decreased e-commerce volume. Correspondingly, cost of revenue decreased by $1,140,235, or 87%, to $163,960, reflecting improved cost discipline, reduced inventory-related inefficiencies, and a shift in revenue mix. As a result, gross profit increased by $532,326, or 109%, to $1,020,656, compared to $488,330 in the prior-year period. Gross margin expanded significantly from approximately 27% for the three months ended March 31, 2025 to approximately 86% for the three months ended March 31, 2026. This improvement was primarily driven by reduced inventory impairment, improved procurement and cost controls, and a higher contribution from revenue-sharing and service-based revenue streams. Operating results improved from a loss of $747,753 for the three months ended March 31, 2025 to operating loss of $128,539 for the three months ended March 31, 2026, representing an improvement of approximately $876,292. This improvement was primarily attributable to higher gross profitability and significantly reduced discretionary spending, particularly in sales and marketing expenses, while general and administrative expenses remained relatively consistent between periods. For the three months ended March 31, 2026, the Company reported net income of $145,601, compared to a net loss of $77,177 for the three months ended March 31, 2025, representing an improvement of approximately $222,778. The improvement in net results reflects enhanced cost efficiency and improved gross margins, partially offset by changes in other income and expense items. Liquidity remained strong, with cash and cash equivalents of $6,632,619 as of March 31, 2026, compared to $7,004,601 as of December 31, 2025, a decrease of $371,982. The decrease was primarily attributable to operating cash outflows during the period, partially offset by proceeds from warrant exercises. Compared to March 31, 2025, cash and cash equivalents increased $6.4 million, reflecting proceeds received in connection with the Business Combination and related financing activities completed in December 2025. The Company’s strengthened liquidity position has enhanced its ability to support working capital needs and execute its operational strategy. During the three months ended March 31, 2026, the Company continued to focus on improving profitability, enhancing cost efficiency, and maintaining a disciplined approach to managing its balance sheet. Revision of Previously Issued Financial Statements During the preparation of the Company’s unaudited condensed consolidated financial statements for the quarter ended March 31, 2026, management identified certain immaterial prior period errors primarily related to omitted accruals for professional service fees in the Company’s previously issued consolidated financial statements for the year ended December 31, 2025. Management concluded that the errors were not material to the previously issued annual financial statements for the year ended December 31, 2025 and, therefore, restatement of the previously issued financial statements was not required. However, management further concluded that recording the correction entirely within the quarter ended March 31, 2026 would materially misstate the Company’s results for the interim period. Accordingly, the Company revised the comparative balance sheet as of December 31, 2025 included in the unaudited condensed financial statements to correct such immaterial prior period errors. Results of Operations The Company’s results of operations for the three months ended March 31, 2026 were characterized by declining revenue but significantly improved profitability, driven by changes in revenue composition, cost structure, and operational discipline. The most significant drivers of the year-over-year changes include: ● A shift away from inventory-intensive product sales toward higher-margin revenue-sharing arrangements ● A substantial reduction in inventory impairment and excess stock ● Improved cost alignment with revenue levels, particularly in logistics and marketing ● Continued reliance on related-party transactions as a key component of both revenue and profitability These changes reflect a broader strategic repositioning of the Company toward a more sustainable and capital-efficient operating model. 35 Revenue Three months ended March 31, Revenue Component 2026 2025 $ Change % Change Product revenue 102,018 1,221,803 (1,119,785 ) (92 )% Product revenue – related party 136,548 134 136,414 1,018 % Revenue share – related party 946,050 570,588 375,462 66 % Total Revenue 1,184,616 1,792,525 (607,909 ) (34 )% Total revenue for the three months ended March 31, 2026 was $1,184,616, a decrease of $607,909, or 34%, compared to $1,792,525 for the same period in 2025. The decline was primarily attributable to a significant reduction in third-party product revenue, partially offset by increases in revenue derived from related party arrangements. Product revenue decreased by $1,119,785, or 92%, to $102,018 for the three months ended March 31, 2026, compared to $1,221,803 in the prior-year period. The decrease reflects reduced sales volume and a strategic shift away from lower-margin product lines, resulting in a contraction of traditional inventory-based sales activities. Product revenue from related parties increased by $136,414 to $136,548 for the three months ended March 31, 2026, compared to $134 in the prior-year period. While the increase is significant on a percentage basis, related party product revenue remains a relatively small portion of total revenue. The increase reflects expanded transactions with affiliated entities as part of the Company’s evolving commercial relationships. Revenue share from related parties increased by $375,462, or 66%, to $946,050 for the three months ended March 31, 2026, compared to $570,588 in the prior-year period. This category represents the Company’s participation in revenue-sharing arrangements, including cloud-based services and intelligent information services introduced in 2025. Revenue share has become the largest contributor to total revenue in the current period, reflecting continued growth in these collaborative arrangements. The overall change in revenue composition reflects a shift from traditional product sales toward revenue-sharing and service-based models. These arrangements generally involve lower direct costs and reduced working capital requirements compared to inventory-based sales. Management believes this transition supports a more scalable and potentially higher-margin revenue structure over time, although total revenue declined in the current period due to the reduction in product sales. 36 Cost of Revenue and Gross Profit Three months ended March 31, 2026 2025 $ Change Cost of Revenue (163,960 ) (1,304,195 ) 1,140,235 Gross Profit 1,020,656 488,330 532,326 Gross Margin 86 % 27 % 59 pts Cost of revenue for the three months ended March 31, 2026 was $163,960, compared to $1,304,195 in the prior-year period, a decrease of $1,140,235. Gross profit increased to $1,020,656 from $488,330, resulting in gross margin improving to 86% from 27%. The decrease in cost of revenue was primarily driven by significantly lower product-related costs, including reduced inventory-related charges and lower sales volume. In addition, logistics, fulfillment, and platform costs declined in line with reduced inventory-based sales activity. The improvement in gross margin also reflects a shift in revenue mix toward revenue-sharing and service-based arrangements, which generally carry lower direct costs compared to product sales. Overall, the results indicate a more favorable cost structure in the current period. Operating Expenses Three months ended March 31, Expense Category 2026 2025 $ Change % Change General & Administrative 854,786 817,412 37,374 5 % Sales & Marketing 14,332 404,112 (389,780 ) (96 )% Research & Development 22,999 14,559 8,440 58 % Total Operating Expenses 892,117 1,236,083 (343,966 ) (28 )% Total operating expenses for the period were $892,117, compared to $1,236,083 in the prior-year period, representing a decrease of $343,966, or 28%. The overall reduction was primarily driven by a significant decrease in sales and marketing expenses. General and administrative expenses were $854,786, compared to $817,412 in the prior-year period, an increase of $37,374, or 5%. The increase was primarily attributable to higher professional fees and other administrative costs associated with operating as a public company following the Business Combination. Sales and marketing expenses decreased to $14,332 from $404,112, a decline of $389,780, or 96%, primarily due to reduced promotional activities. Research and development expenses increased to $22,999 from $14,559, an increase of $8,400, or 58%, reflecting continued investment in product and technology development. Overall, the decrease in total operating expenses was mainly attributable to lower sales and marketing spending, partially offset by increased general and administrative expenses and continued investment in research and development. 37 Other Income (Expense) Three months ended March 31, 2026 2025 $ Change Other income – related party - 683,898 (683,898 ) Other income (expense), net (9,490 ) 7,185 (16,675 ) Interest income 28,651 318 28,333 Interest expense – related party - (16,502 ) 16,502 Total Other Income (loss), Net 19,161 674,899 (655,738 ) Total other income, net was $19,161 for the three months ended March 31, 2026, compared to $674,899 in the prior-year period, a decrease of $655,738. The decrease was primarily due to the absence of other income from related parties in the current period, compared to $683,898 recognized in the prior-year period. Interest income increased to $28,651 from $318, reflecting higher cash balances during the period. Other income (expense), net decreased by $16,675, and no related party interest expense was recognized in the current period compared to $16,502 in the prior-year period. Liquidity and Capital Resources Liquidity Overview As of March 31, 2026, the Company had cash and cash equivalents of approximately $6.6 million, compared to approximately $7.0 million as of December 31, 2025, representing a decrease of approximately $0.4 million. The decrease was primarily attributable to operating cash outflows during the period, partially offset by proceeds from warrant exercises. Compared to March 31, 2025, cash and cash equivalents increased significantly, primarily reflecting proceeds received in connection with the Business Combination and related financing activities completed in December 2025. The Company’s liquidity position continues to be influenced by several key factors: ● Operating performance, including gross margin and expense management ● Working capital dynamics, particularly receivables and payables, including those with related parties ● Access to external financing, including equity financing and capital markets transactions ● Inventory management, which affects cash utilized in operations Management believes that the Company’s current cash position, together with expected operating cash flows, will be sufficient to meet its working capital requirements and capital expenditure needs for at least the next twelve months from the issuance date of these financial statements. However, the Company’s future liquidity will depend on its ability to sustain profitability, manage working capital efficiently, and maintain access to capital markets if needed. Cash Flow Analysis Three months ended March 31, 2026 2025 $ Change Net cash (used in)/provided by operating activities (391,580 ) 203,985 (595,565 ) Net cash provided by (used in) investing activities - (305,624 ) 305,624 Net cash provided by (used in) financing activities 20,085 - 20,085 38 Operating Activities Net cash used in operating activities was $391,580 for the three months ended March 31, 2026, compared to net cash provided by operating activities of $203,985 in the prior-year period, representing a decrease of $595,565. The use of cash in the current period was primarily driven by changes in working capital, including the timing of collections and payments. Investing Activities Net cash provided by investing activities was nil for the three months ended March 31, 2026, compared to net cash used of $305,624 in the prior-year period. The prior-year activity primarily related to transactions involving financial assets, while there were no significant investing activities in the current period. Financing Activities Net cash provided by financing activities was $20,085 for the three months ended March 31, 2026, compared to no financing activity in the prior-year period. The current period activity primarily reflects proceeds from financing-related transactions. Capital Resources The Company’s capital resources consist primarily of cash on hand and, to a lesser extent, cash generated from operations. Following the Business Combination completed in December 2025, the Company significantly improved its liquidity and capital structure through the receipt of trust proceeds and PIPE financing. The Company may continue to rely on related-party transactions and financing arrangements, as well as external financing sources, to support its working capital needs and growth initiatives as necessary. The Company’s capital requirements are driven primarily by working capital needs, operating expenses (including public company costs), and potential investments in product development and service offerings. The Company currently does not maintain a revolving credit facility or other committed borrowing arrangements. Management expects that the Company’s current cash position and anticipated operating cash flows will be sufficient to meet its short-term liquidity needs. However, the Company may seek additional financing to support future growth initiatives or respond to changing market conditions. Contractual Obligations and Commitments The Company’s contractual obligations consist primarily of lease obligations, and other operating liabilities, as disclosed in Note 9 - Lease and Note 14 – Commitments and Contingencies. Lease Obligations (ASC 842) The Company has operating lease arrangements for office space and facilities. As of March 31, 2026, lease liabilities totaled $96,051, representing the present value of future lease payments. The Company’s undiscounted future minimum lease payments total approximately $100,060. These obligations are not considered a significant liquidity burden. Purchase Commitments The Company enters into purchase commitments with suppliers in the normal course of business. These commitments are generally short-term in nature and aligned with expected sales demand. The Company continues to manage inventory levels conservatively, limiting exposure to long-term procurement commitments. 39 Related Party Obligations Historically, the Company had obligations to related parties, which were reduced during 2025 through settlement using proceeds from financing activities (see Note 6). As of March 31, 2026, the Company continues to have transactions and balances with related parties in the ordinary course of business; however, outstanding related-party obligations are not material to the Company’s consolidated financial statements. Other Commitments and Contingencies The Company may be subject to contingencies, including legal or contractual matters, in the ordinary course of business. Management does not believe that any such matters will have a material adverse effect on the Company’s financial position as of March 31, 2026. Overall Liquidity Assessment As of March 31, 2026, the Company’s liquidity position remains strong following the financing activities completed in December 2025. While operating cash flows for the three months ended March 31, 2026 were negative, such usage was primarily driven by working capital timing and does not necessarily reflect a deterioration in underlying operating performance. The Company’s current liquidity, combined with improved operating performance and reduced reliance on related-party financing, provides a solid financial foundation. However, future liquidity will depend on the Company’s ability to sustain operating performance, effectively manage working capital, and access external financing if needed. Management believes the Company is well-positioned to meet its near-term obligations and support its ongoing operations and strategic initiatives. Critical Accounting Policies and Estimates The preparation of the Company’s unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses, as well as related disclosures. These estimates are based on historical experience, current conditions, and various other assumptions that management believes are reasonable under the circumstances. Because of the inherent uncertainty involved in making these estimates, actual results could differ materially from those estimates. The Company’s most critical accounting policies are those that involve significant judgment and have a material impact on the financial statements. There have been no material changes to the Company’s critical accounting policies and estimates from those disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. 40 Revenue Recognition (ASC 606) The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers , when control of goods or services is transferred to customers in an amount that reflects the consideration to which the Company expects to be entitled. A significant area of judgment involves determining whether the Company acts as a principal or an agent in its revenue arrangements, particularly in transactions involving: ● E-commerce platform sales ● Related-party revenue-sharing arrangements (see Note 6 – Related Party Transactions) This assessment requires evaluation of factors such as control over goods or services, inventory risk, pricing discretion, and responsibility for fulfillment. If the Company is determined to be the principal, revenue is recognized on a gross basis; if the Company is an agent, revenue is recognized on a net basis. Changes in this assessment could materially affect reported revenue and cost of revenue. In addition, revenue-sharing arrangements require judgment in identifying performance obligations and determining the appropriate allocation of transaction price. Variability in contract terms or interpretation could impact the timing and amount of revenue recognized. Inventory Valuation (ASC 330) Inventory is stated at the lower of cost or net realizable value. Cost is determined using standard costing methods, which approximate actual costs. The Company evaluates inventory for excess quantities, obsolescence, and slow-moving items. This evaluation requires significant judgment regarding forecasted demand, product lifecycle and technological obsolescence, and pricing trends and competitive conditions. During 2025, the Company improved its inventory management practices, resulting in reduced inventory levels and lower impairment charges compared to prior periods. These practices continued during the three months ended March 31, 2026. However, inventory valuation remains sensitive to changes in demand patterns, product innovation cycles, and market conditions, which could result in additional write-downs in future periods. Allowance for Expected Credit Losses (ASC 326) The Company accounts for expected credit losses under ASC 326 using a loss-rate methodology based on historical credit loss experience, current economic conditions, and forward-looking information. A significant portion of the Company’s accounts receivable is due from related parties (see Note 8), which introduces concentration risk. Management evaluates collectability on an ongoing basis, considering factors such as the financial condition of counterparties, payment history, and contractual terms. While historical credit losses have been limited, changes in the financial condition of related parties or business relationships could result in increased credit loss provisions in future periods. 41 Warranty Liabilities The Company provides warranties on certain products and recognizes a liability for estimated warranty costs at the time of sale. Warranty liabilities are estimated based on historical claim rates, product failure trends, and estimated repair or replacement costs. These estimates require judgment and may be affected by changes in product design, manufacturing quality, or customer usage patterns. Actual warranty costs may differ from estimates, resulting in adjustments in future periods. Variable Interest Entity (VIE) Consolidation (ASC 810) The Company evaluates its involvement with variable interest entities in accordance with ASC 810. A VIE is consolidated if the Company is determined to be the primary beneficiary. Historically, the Company consolidated certain VIEs that held e-commerce platform accounts. In December 2025, the Company terminated the underlying contractual arrangements and deconsolidated these entities (see Note 1). As of March 31, 2026, the Company does not consolidate these entities. The evaluation of VIE relationships requires judgment, particularly in assessing contractual arrangements and decision-making authority. Changes in such arrangements or in the Company’s level of involvement could result in future consolidation or deconsolidation. Related Party Transactions (ASC 850) The Company engages in transactions with related parties, including revenue-sharing arrangements and product sourcing (see Note 6). Accounting for related-party transactions requires judgment in determining the appropriate revenue recognition treatment, classification, and presentation. Because these transactions may not be conducted on an arm’s-length basis, there is an increased risk of misstatement if terms are not properly evaluated. The Company monitors related-party balances and transactions on an ongoing basis to ensure appropriate recognition and disclosure. Forward Purchase Agreement In connection with the Business Combination completed in December 2025, the Company entered into a Forward Purchase Agreement (“FPA”) with Harraden Circle Investments. Under the terms of the arrangement, the Company funded prepayments in exchange for the future settlement of shares of its common stock. During 2025, the Company funded prepayments under the arrangement and received partial settlements. As of December 31, 2025 and March 31, 2026, an FPA subscription receivable of $1,678,678 remained outstanding. The Company evaluated the FPA and determined that it is appropriately accounted for as an equity transaction. Accordingly, the outstanding balance is presented as a reduction to additional paid-in capital within stockholders’ equity. There were no material changes to the terms of the FPA during the three months ended March 31, 2026. Refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 for additional details regarding the FPA. Income Taxes (ASC 740) The Company accounts for income taxes under ASC 740, Income Taxes , which requires recognition of deferred tax assets and liabilities for temporary differences between financial reporting and tax bases. Management evaluates the realizability of deferred tax assets, including net operating loss carryforwards, and establishes a valuation allowance when it is more likely than not that such assets will not be realized. 42 This assessment requires judgment regarding: ● Future taxable income ● Timing of reversals of temporary differences ● Tax planning strategies Changes in these assumptions could result in adjustments to valuation allowances and income tax expense. Sensitivity of Estimates and Judgments The Company’s financial results are particularly sensitive to changes in estimates related to: ● Revenue recognition (principal vs. agent) ● Inventory valuation and impairment ● Collectability of related-party receivables ● VIE consolidation conclusions A change in any of these assumptions could materially affect reported revenue, gross profit, net income, and financial position. For example: ● A change in principal vs. agent conclusion could significantly alter reported revenue and cost of revenue ● A modest increase in inventory obsolescence assumptions could materially reduce gross margin ● Delays in collection of related-party receivables could increase credit loss provisions Management continuously reviews these estimates and assumptions and adjusts them as necessary based on evolving business conditions. Recently Issued Accounting Pronouncements For a discussion of our new or recently adopted accounting pronouncements, see Note 2, Recent issued accounting pronouncements, to our consolidated financial statements included elsewhere in this annual report. Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the consolidated financial statements and notes thereto included elsewhere in this annual report. Off-Balance Sheet Arrangements As of March 31, 2026, the Company does not have any material off-balance sheet arrangements as defined under Item 303 of Regulation S-K. Historically, the Company utilized variable interest entities (“VIEs”) to conduct certain e-commerce operations. These VIEs were consolidated in prior periods; however, following the termination of the underlying contractual arrangements in December 2025, the Company deconsolidated these entities. As a result, the Company does not have exposure to the assets, liabilities, or operations of these entities, other than any residual contractual relationships, which are not material. 43 The Company does not have any material guarantees, retained interests in transferred assets, special purpose entities, or other undisclosed commitments that would be considered off-balance sheet arrangements. Management believes that the absence of material off-balance sheet arrangements reduces the Company’s exposure to contingent liabilities and supports transparency in its financial reporting. Quantitative and Qualitative Disclosures About Market Risk The Company is exposed to certain market risks in the normal course of business, including foreign currency risk, interest rate risk, and general economic risk. Foreign Currency Risk A portion of the Company’s transactions are denominated in currencies other than the U.S. dollar, particularly Renminbi (RMB). As a result, fluctuations in exchange rates may affect revenue, cost of revenue, and operating expenses when translated into U.S. dollars. A strengthening of the U.S. dollar relative to foreign currencies may reduce reported revenue and margins, while a weakening of the U.S. dollar may have the opposite effect. The Company does not currently use derivative instruments to hedge foreign currency risk. Interest Rate Risk The Company’s exposure to interest rate risk is limited due to the absence of significant interest-bearing debt. Interest income is earned on cash balances, and changes in interest rates may affect the amount of interest income recognized. However, this exposure is not considered material. Concentration Risk The Company is exposed to concentration risk due to its reliance on related-party transactions for both revenue and procurement. Changes in the financial condition or operating performance of these related parties could materially affect the Company’s results. Sensitivity Analysis A hypothetical 10% change in foreign exchange rates would not have a material impact on the Company’s financial position based on current exposure levels; however, this may change as the Company expands its international operations. Inflation and Economic Conditions The Company’s operations are subject to the impact of inflation and broader economic conditions, which may affect both costs and demand. Cost Impacts Inflation may increase the cost of components, manufacturing, logistics, and labor. These cost increases may not be fully recoverable through price adjustments, particularly in a competitive market environment where pricing pressure is significant. Demand Impacts The Company’s products are generally considered discretionary consumer purchases. As a result, economic downturns, reduced consumer confidence, or higher interest rates may negatively impact demand for the Company’s products. Supply Chain Considerations Global supply chain conditions, including component availability and shipping costs, may also affect the Company’s ability to procure inventory and maintain margins. The Company actively monitors these factors and seeks to mitigate their impact through pricing strategies, cost management initiatives, and supply chain optimization. 44 Item 3 – Quantitative and Qualitative Disclosures About Market Risk We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.