What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-08-20 compared with 2025-09-17 · 395 added, 336 removed, 125 unchanged (85% of the section changed)

7 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

discussion should be read in conjunction with the Consolidated Financial Statements and Notes thereto contained in this Annual Report

on Form 10-K.

Some of the statements contained in the following discussion of the Company’s financial condition and results of

operations refer to future expectations or include other “forward-looking” information.

Those statements are subject to known

and unknown risks, uncertainties and other factors that could cause the actual results to differ materially from those contemplated,

including, but not limited to, those discussed in Part I, Item 1A of this report under the heading “Risk Factors,” which

are incorporated herein by reference.

See “Special Note regarding Forward-Looking Statements” included in this Report on

Form 10-K for a discussion of factors to be considered when evaluating forward-looking information detailed below.

These factors could

cause our actual results to differ materially from the forward-looking statements.

discussion should be read in conjunction with the Consolidated Financial Statements and Notes thereto contained in this Form.

the statements contained in the following discussion of the Company’s financial condition and results of operations refer to future

expectations or include other “forward-looking” information.

Those statements are subject to known and unknown risks, uncertainties

and other factors that could cause the actual results to differ materially from those contemplated, including, but not limited to, those

discussed in Part I, Item 1A of this Form under the heading “Risk Factors,” which are incorporated herein by reference.

“Special Note regarding Forward-Looking Statements” included in this Form for a discussion of factors to be considered when

evaluating forward-looking information detailed below.

These factors could cause our actual results to differ materially from the forward-looking

design, develop, manufacture and sell a portfolio of advanced lithium-ion energy storage solutions for electrification of a range of

industrial and commercial sectors which include material handling, airport ground support equipment (“GSE”).

We believe our

mobile energy storage solutions provide our customers a reliable, high performing, cost effective, and more environmentally friendly

alternative as compared to traditional lead acid and propane-based solutions.

Our modular and scalable design allows different configurations

of lithium-ion energy storage solutions to be paired with our proprietary wireless battery management system to provide the level of

energy storage required and “state of the art” real time monitoring of pack performance.

We believe that the increasing demand

for lithium-ion energy storage solutions and more environmentally friendly energy storage solutions in the material handling sector should

continue to drive our revenue growth.

long-term strategy is to meet the rapidly growing demand for lithium-ion energy solutions and to be the supplier of choice, targeting

large companies having energy storage needs.

We have established selling relationships with customers with large fleets of forklifts

We intend to reach this goal by investing in research and development to expand our product mix, by expanding our sales and

marketing efforts, improving our customer support efforts and improving production efficiencies.

Our research and development efforts

will continue to focus on providing adaptable, reliable and cost-effective energy storage solutions for our customers.

We have filed

three new patents on advanced technology related to lithium-ion energy storage solutions.

The technology behind these pending patents

is designed to:

industrial and commercial sectors which include material handling and airport ground support equipment (“GSE”).

believe our mobile energy storage solutions provide our customers with a reliable, high performing, cost effective, and more

environmentally friendly alternative as compared to traditional lead acid and propane-based solutions.

Our modular and scalable

design allows different configurations of lithium-ion energy storage solutions to be paired with our proprietary wireless battery

management system to provide the level of energy storage required and “state of the art” real-time monitoring of battery

pack performance.

We believe that the growing demand for lithium-ion energy storage solutions and more environmentally friendly

energy storage solutions across a range of industrial and commercial sectors should continue to drive growth in the markets we

long-term strategy is to meet the rapidly growing demand for lithium-ion energy solutions and to be the supplier of choice,

targeting large companies having energy storage needs.

We have established selling relationships with customers with large fleets of

forklifts and GSE.

We intend to reach this goal by investing in research and development to expand our product mix, by expanding our

sales and marketing efforts, improving our customer support efforts and improving production efficiencies.

Our research and

development efforts will continue to focus on providing adaptable, reliable and cost-effective energy storage solutions for our

We have received three patents on advanced technology related to lithium-ion energy storage solutions.

The technology

behind these patents is designed to:

battery life by optimizing the charging cycle,

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artificial intelligence to predictively balance the cells for optimal performance.

largest sector of penetration thus far has been the material handling sector which we believe is a multi-billion-dollar addressable market.

We believe the sector will provide us with an opportunity to grow our business as we enhance our product mix and service levels and grow

our sales to large fleets of forklifts and GSEs.

Applications of our modular packs for other industrial and commercial uses, such as

mobile energy storage systems, are providing additional current growth and further opportunities.

We intend to continue to expand our

supply chain and customer partnerships and seek further partnerships and/or acquisitions that provide synergy to meeting our growth and

“building scale” objectives.

following table summarizes the new orders, shipments, and backlog activities for the following fiscal quarters:

Fiscal Quarter Ended

Beginning Backlog

Ending Backlog

March 31, 2024

June 30, 2024

September 30, 2024

December 31, 2024

March 31, 2025

June 30, 2025

represents the amount of anticipated revenues we may recognize in the future from existing contractual orders with customers that are

in progress and have not yet shipped.

Backlog values may not be indicative of future operating results as orders may be cancelled, modified

or otherwise altered by customers.

In addition, our ability to realize revenue from our backlog will be dependent on the delivery of

key parts from our suppliers and our ability to manufacture and ship our products to customers in a timely manner.

There can be no assurance

that outstanding customer orders will be fulfilled as expected and that our backlog will result in future revenues.

of September 12, 2025, our order backlog was approximately $7.5 million.

We have recently experienced

some delays in new orders for our energy storage solutions, reflecting corresponding deferrals of new forklift purchases by selected

large customer fleets due to lower capital spending and interest rate variability, and more recently, global tariff uncertainties.

While we have had very few cancellations of existing purchase orders, some customers have revised their order terms to fiscal 2026.

Some customers have attributed lower capital spending to concerns over the economy and the uncertainty of higher interest rates, as

well as broader geopolitical uncertainty.

More recently, the economic impacts and costs of higher global tariffs implemented by the U.S government have affected

new purchase orders.

The impact of order deferrals has required additional selling strategies to support our

targeted sales trajectory.

We have seen improvements in our

sourcing and purchasing activity, reflecting our efforts to expand and optimize our vendor strategy.

Additional improvements include more

secondary sources to minimize stock-outs, lower costs from increasing sources, and controlled delivery times, as reflected in our current

inventory levels.

With strategic supply chain and profitability improvement initiatives, lower costs and higher volume purchasing, we

are targeting gross margin improvement to continue.

We are highly focused on expanding sales and marketing initiatives to secure new customer

relationships and support continued migration to lithium of current customers.

We recently have added our second tier one OEM private

label battery program to supplement our strong OEM relationships and approvals.

This collaboration marks a a significant milestone for

our S-Series line, which now includes products with the UL Type EE certification, which provides added safety and durability capabilities.

We are also working with our distribution network to expand customer acquisition with direct-to-customer initiatives.

We also announced a new partnership

aimed at enhancing the recycling process for end-of-life lithium-ion batteries with the largest critical battery components recycling

company in the U.S.

This collaboration represents a significant step forward in our ongoing commitment to environmental responsibility.

Business Trends and Uncertainties

In 2025, the U.S.

increased certain existing tariffs and implemented new tariffs on imported products.

In April 2025, the U.S.

government increased

import tariffs across a wide range of countries at various rates, including on product imports from almost all countries, and

individualized higher tariffs on certain countries, notably China.

Some of these tariff announcements have since been followed by

announcements of limited exemptions and temporary pauses.

Due to the uncertainties pertaining to tariffs and tariff levels, it is

difficult for us to reliably forecast the ongoing impact to our business or that of our customers but is expected that

tariffs would negatively impact our revenues, profitability and cash flows.

Management is actively evaluating ways to mitigate

potential impacts of tariffs.

a portion of our raw materials and components from countries that are subject to import tariffs imposed by the U.S.

government, in particular

materials and components that are from China.

We expect to be able to offset some of the impact of the enacted tariffs with supply chain

adjustments, alternative manufacturing locations and cost reduction actions.

However, at current and anticipated tariff levels, we will

also need to increase the selling prices of our products in order to achieve an acceptable profit margin.

In response to business uncertainties

resulting from tariffs and increased tariff levels imposed by the U.S.

government on goods imported into the U.S., we temporarily paused

imports from our battery cell supplier in China.

The pause was short-lived as both parties quickly agreed to modified terms.

At this time,

neither the pause in shipments nor the modified terms have materially affected the Company’s operations.

However, further escalation

of tariffs between the U.S.

and China could have a material effect on our ability to cost-effectively source from our supplier in China.

Trade-related disruptions can

create further uncertainty and supply chain interruptions, which may result in last-minute procurement efforts at elevated cost.

closely monitoring the fluid nature of proposed tariffs and any impact they may have on our operations and will continue to monitor macroeconomic

conditions and evaluate the financial and operational impact of ongoing trade policy shifts.

These risks could intensify depending on

future developments and we are actively incorporating these considerations into our future operation planning, including assessing pricing

actions, cost-control measures, and long-term sourcing strategies.

If tariffs escalate or global

inflationary trends persist, our customers may face greater economic strain, which could in turn affect demand for our products.

focused on maintaining operational flexibility and adapting our supply chain to navigate these uncertainties and support long-term business

See “Risk Factors” under Part II, Item 1A for additional information.

largest sector of penetration thus far has been the material handling sector, which we believe is a multi-billion-dollar addressable

We believe the sector will provide us with an opportunity to grow our business as we enhance our product mix and service levels

and grow our sales to large fleets of forklifts and GSE.

Applications of our modular packs for other industrial and commercial uses,

such as mobile energy storage systems, are providing additional current growth and further opportunities.

We intend to continue to expand

our supply chain and customer partnerships and seek further partnerships and/or acquisitions that provide synergy in order to meet our

growth and “building scale” objectives.

useful measure of our relative financial condition consists of the analysis of our historical backlog in comparison to the current period.

“Backlog” represents the amount of anticipated revenues we may recognize in the future from existing contractual orders with

customers that are in progress and have not yet shipped.

Backlog values may not be indicative of future operating results as orders may

be cancelled, modified or otherwise altered by customers.

In addition, our ability to realize revenue from our backlog will be dependent

on the delivery of key parts from our suppliers and our ability to manufacture and ship our products to customers in a timely manner.

There can be no assurance that outstanding customer orders will be fulfilled as expected and that our backlog will result in future revenues.

of June 30, 2026 our order backlog was approximately $3.7 million.

The following table presents our order, shipment and backlog history

for the current and last five quarters:

the second half of fiscal 2025, we began experiencing a slowdown in new orders for our energy storage solutions.

The slowdown reflected

deferrals of new forklift purchases by selected large customer fleets due to lower capital spending and interest rate variability, and

it continued throughout fiscal 2026.

Some customers attributed their lower capital spending to concerns over the economy, uncertainty

of higher interest rates, as well as broader geopolitical uncertainty.

More recently, the economic impacts and costs of higher global

tariffs implemented by the U.S.

government have negatively impacted new purchase orders.

The impact of order deferrals by our customers

required us to implement new selling strategies and to focus on cost controls and expense reduction.

have seen improvements in our sourcing and purchasing activity, reflecting our efforts to expand and optimize our vendor strategy.

improvements include more secondary sources to minimize stock-outs, lower costs from increasing sources and controlled delivery times,

as are now reflected in our current inventory levels.

With strategic supply chain and profitability improvement initiatives, lower costs

and higher volume purchasing, we are lowering the cost of our products in order to improve our competitive position.

We are highly focused

on expanding selling and marketing initiatives to secure new customer relationships and support continued migration to lithium of current

We have two private label battery programs and recently hired a Director of OEM Business Development to further strengthen

our OEM relationships and to assist with OEM certifications and approvals.

We are also working with our distribution network to expand

customer acquisition with direct-to-customer initiatives.

Trends and Uncertainties

January 2025, the U.S.

government has increased certain existing import tariffs and has implemented new import tariffs across a wide

range of countries at various rates, including on product imports from almost all countries, and individualized higher tariffs on certain

countries, notably China.

While we have been able to offset some of the impact of the enacted tariffs with supply chain adjustments,

alternative manufacturing locations, cost reduction actions and by increasing the selling prices of our products, we believe that tariffs

have negatively impacted our revenues, profitability and cash flows.

Some of these tariff announcements have since been followed by announcements

of limited exemptions and temporary pauses, and all have been affected by various circuit court decisions and a key decision by the U.S.

Supreme Court, which invalidated certain tariffs.

In response to the U.S.

Supreme Court ruling, the current administration debuted a

system for repaying importers for tariffs struck down by the U.S.

Supreme Court while also announcing the implementation of new tariffs

under an alternative statutory authority.

Upon the expiration of such tariffs, the current administration announced new tariffs under

a different statutory authority.

continues to actively evaluate ways to mitigate the impacts of tariffs on our business and financial results, however, due to the uncertainties

pertaining to tariffs and tariff levels, it is difficult for us to reliably forecast the extent of the ongoing impact to our business

or customers.

Trade-related

disruptions can create further uncertainty and supply chain interruptions, which may result in last-minute procurement efforts at elevated

We are closely monitoring the fluid nature of proposed tariffs and any further impact they may have on our operations, and will

continue to monitor macroeconomic conditions and evaluate the financial and operational impact of ongoing trade policy shifts.

risks could intensify depending on future developments and we are actively incorporating these considerations into our future operation

planning, including assessing pricing actions, cost-control measures and long-term sourcing strategies.

tariffs continue to escalate or global inflationary trends persist, our customers may face greater economic strain, which could in turn

affect demand for our products.

We remain focused on maintaining operational flexibility and adapting our supply chain to navigate these

uncertainties to support long-term business performance.

See Part I, Item 1A – Risk Factors for additional information.

and Related Information

operate as a single reportable segment.

Accounting Pronouncements

Issued Accounting Pronouncements

November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No.

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See Note 14 – Segment Information included in the notes to

our consolidated financial statements included in this Annual Report.

Issued Accounting Pronouncements

Management has considered

all recent accounting pronouncements not yet adopted in our consolidated financial statements.

In November 2024, the FASB issued Accounting

Standards Update (“ASU”) 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation

Disclosures (Topic 220):

Disaggregation of Income Statement Expenses , which requires additional disclosure of certain amounts included

in the expense captions presented on the statement of operations, as well as disclosures about selling expenses.

The ASU is effective

on a prospective basis, with the option for retrospective application, for our fiscal year ending June 30, 2028 and interim periods thereafter.

our consolidated financial statements included in this Form.

has considered all recent accounting pronouncements not yet adopted in our consolidated financial statements.

In December 2025, the FASB

issued ASU 2025-11, Interim Reporting (Topic 270):

Narrow-Scope Improvements .

The ASU is effective for public business entities

for interim reporting periods within annual reporting periods beginning after December 15, 2027.

Early adoption is allowed.

October 2023, the FASB issued ASU 2023-06, Disclosure Improvements:

Codification Amendments in Response to the SEC’s Disclosure

Update and Simplification Initiative , to incorporate several SEC disclosure requirements into a variety of Topics in the FASB Codification.

When effective, ASU 2023-06 will not significantly affect the disclosure requirements for entities subject to SEC’s existing disclosure

requirements, given those entities’ requirement to comply with Regulation S-X.

The effective date of each amendment of the ASU

will be the date of the SEC’s removal of the related disclosure from its regulations, to prevent duplication.

Early adoption is

November 2024, the FASB issued Accounting Standards Update (“ASU”) 2024-03, Income Statement – Reporting Comprehensive

Income – Expense Disaggregation Disclosures (Topic 220):

Disaggregation of Income Statement Expenses , which requires additional

disclosure of certain amounts included in the expense captions presented on the statement of operations, as well as disclosures about

selling expenses.

The ASU is effective on a prospective basis, with the option for retrospective application, for our fiscal year ending

June 30, 2028 and interim periods thereafter.

Early adoption is permitted for annual financial statements that have not yet been issued.

We are evaluating the disclosure requirements

related to the new standard.

In December 2023, the FASB issued Accounting Standards Update 2023-09,

Income Taxes (Topic 740), Improvements to Income Tax Disclosures , which requires more detailed income tax disclosures.

requires entities to disclose disaggregated information about their effective tax rate reconciliation as well as expanded information

on income taxes paid by jurisdiction.

The disclosure requirements will be applied on a prospective basis, with the option to apply them

retrospectively.

The standard is effective for our fiscal year ending June 30, 2026, with early adoption permitted.

We are evaluating

the disclosure requirements related to the new standard.

Accounting Policies and Estimates

We are evaluating the disclosure requirements related to the new standard.

Adopted Accounting Pronouncements

December 2023, the FASB issued Accounting Standards Update 2023-09, Income Taxes (Topic 740), Improvements to Income Tax Disclosures ,

which requires more detailed income tax disclosures.

The standard is effective for this fiscal year ending June 30, 2026 and the financial

statements contained herein.

Accounting Policies and Estimates updates

discussion and analysis of our financial condition and results of operations are based upon our Financial Statements, which have been

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On an ongoing basis, we evaluate our estimates based on

its historical experience and on various other assumptions that are believed 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

historical experience and on various other assumptions that are believed 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 under different assumptions or conditions.

believe the following critical accounting policies and estimates affect the preparation of our financial statements:

addition, adjustments were made to our previously reported Financial Statements for the period ended June 30, 2025 in accordance with

FASB ASC 250 – Accounting Changes and Error Corrections.

Such reclassifications consist of certain previously reported amounts

in order to conform on a comparable basis with our current Financial Statement presentation.

The reclassifications had no effect on previously

reported net income, total assets, stockholders’ equity or cash flows.

Management presents current and comparative results of operations

with a disaggregation of intangible assets from other fixed assets and a disaggregation of interest expense from other expense.

follows is a discussion of key areas where critical accounting policies and estimates affect the preparation of our financial statements.

Values of Financial Instruments

carrying amount of our cash, accounts payable, accounts receivable, and accrued liabilities approximate their estimated fair values due

to the short-term maturities of those financial instruments.

The carrying amount of the line of credit approximates fair value as interest

approximates current market interest rates for similar instruments.

Management has concluded that it is not practical to determine the

estimated fair value of subordinated debt due to related parties because the transactions cannot be assumed to have been consummated

at arm’s length, the terms are not deemed to be market terms, there are no quoted values available for these instruments, and an

independent valuation would not be practical due to the lack of data regarding similar instruments, if any, and the associated potential

do not have any other assets or liabilities that are measured at fair value on a recurring or non-recurring basis.

receivable are evaluated according to the Financial Accounting Standards Board ASC 326-20 and Accounting Standards Update No.

of Current Expected Credit Losses (“CECL”).

Under the CECL model, we estimate expected credit losses over the lifetime of

accounts receivable using forward-looking data.

receivable are carried at their estimated collectible amounts.

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respectively.

recognize revenue in accordance to the Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with

Customers (“ASC 606”) for all contracts.

and equipment, office equipment and furniture and equipment are stated at cost, net of accumulated depreciation.

Depreciation and amortization

are expensed using the straight-line method over the estimated useful lives of the related assets ranging from three to five years.

Improvements are amortized over the lesser of the useful life of the related asset or the lease term.

consists primarily of internally developed software incorporated into manufactured product, is stated at capitalized cost and is amortized

over five years.

of Long-lived Assets

accordance with authoritative guidance for the impairment or disposal of long-lived assets, if indicators of impairment exist, we

assess the recoverability of the affected long-lived assets by determining whether the carrying value of such assets can be recovered

through the undiscounted future operating cash flows.

impairment is indicated, we measure the amount of such impairment by comparing the carrying value of the asset to the present value of

the expected future cash flows associated with the use of the asset.

Management determined that no impairment indicators were present

and, accordingly, no impairment losses were recognized during the fiscal years ended June 30, 2026 and 2025.

report leases on our consolidated financial statements in conformance with ASC 842 - Leases, which are classified as operating leases

and finance leases.

We have two operating leases for our warehouse facilities and three finance leases for a vehicle and manufacturing

We evaluate our exposure to product warranty obligations based on historical experience.

Our products, primarily lift equipment

packs, are warrantied for five years unless modified by a separate agreement.

As of June 30, 2026 and 2025, we carried warranty

liability of approximately $2.8 million and $3.4 million, respectively, included in accrued expenses on our consolidated

balance sheets.

recognize revenue in accordance to the ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”) for all contracts.

We derive our revenue from the sale of products to customers.

We sell our products

primarily through a distribution network of equipment dealers, OEMs and battery distributors in primarily North America.

revenue for the products when all significant risks and rewards have been transferred to the customer, there is no continuing managerial

involvement associated with ownership of the goods sold is retained, no effective control over the goods sold is retained, the amount

of revenue can be measured reliably, it is probable that the economic benefits associated with the transactions will flow to us and the

costs incurred or to be incurred with respect to the transaction can be measured reliably.

revenue is recognized as a distinct single performance obligation which occurs at the point in time that title passes to the customer.

Our customers do have a right to return product, but our returns have historically been minimal.

evaluate our exposure to product warranty obligations based on historical experience.

Our products, primarily forklift equipment packs, are

warrantied for five years unless modified by a separate agreement.

As of June 30, 2025 and 2024, we carried warranty liability of approximately

$3,377,000 and $3,018,000, respectively, which is included in accrued expenses on our consolidated balance sheets.

We sell our products primarily through a distribution network of equipment

dealers, OEMs and battery distributors located primarily in North America.

We recognize revenue for the products when all significant

risks and rewards have been transferred to the customer, there exists no continuing managerial involvement associated with ownership

of the goods sold is retained, no effective control over the goods sold is retained, the amount of revenue can be measured reliably,

it is probable that the economic benefits associated with the transactions will flow to us and the costs incurred or to be incurred with

respect to the transaction can be measured reliably.

revenue is recognized as a distinct single performance obligation which represents the point in time that a customer receives delivery

Customers do have a right to return product, but returns have historically been minimal.

to the provisions of the Financial Accounting Standards Board (“FASB”) ASC Topic No.

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paid-in-capital.

to FASB ASC Topic No.

740, Income Taxes, deferred tax assets or liabilities are recorded to reflect the future tax consequences

of temporary differences between the financial reporting basis of assets and liabilities and their tax basis at each year-end.

amounts are adjusted, as appropriate, to reflect enacted changes in tax rates expected to be in effect when the temporary differences

We have analyzed filing positions in all of the federal and state jurisdictions where we are required to file income tax returns,

as well as all open tax years in these jurisdictions.

As a result, no unrecognized tax benefits have been identified as of June 30, 2026

and 2025, and, accordingly, no additional tax liabilities were recorded.

record deferred tax assets and liabilities based on the differences between the financial statement and tax bases of assets and liabilities

and on operating loss carry forwards using enacted tax rates in effect for the year in which the differences are expected to reverse.

A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized.

of Operations

of Results of Operations of the Fiscal Years Ended June 30, 2025 and 2024

following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this

Annual Report.

following table represents our statement of operations for the fiscal years ended June 30, 2025 (“fiscal 2025”) and June

of the Fiscal Years Ended June 30, 2026 and 2025

discussions that follow should be read in conjunction with our financial statements and the related notes that appear in this Form.

table below represents our statement of operations for the fiscal years ended June 30, 2026 (“fiscal 2026”) and June 30,

2025 (“fiscal 2025”).

year ended June 30,

Year ended June 30, 2024

% of Revenues

Cost of sales

Operating expenses:

Selling and administrative

Research and development

Selling, general and administrative

and development

Total operating expenses

Operating loss

Other income (expense):

Interest income (expense), net

Other expense, net

Interest expense, net

$ (7,448,000 )

2 unchanged sentences

1, 2, and 3 forklifts.

Over the past two years, we expanded our product offering into adjacent applications, including airport GSE.

launch of larger packs over the past two years has shifted our portfolio mix to include packs with higher average selling prices as compared

to our historical mix.

We believe that we are well positioned to address the needs of many segments within the material handling sector

in light of our modular and scalable energy storage solution design coupled with our proprietary battery management system that can be

coupled with our telemetry based “SkyBMS” product offering.

Over the past three years, we expanded our product offering into adjacent applications, including airport ground

support equipment.

The launch of larger packs over the past three years has shifted our portfolio mix to include packs with higher average

selling prices as compared to our historical mix.

We believe that we are well positioned to address the needs of many segments within

the material handling sector in light of our modular and scalable energy storage solution design coupled with our proprietary battery

management system “SkyBMS” that can be coupled with our telemetry based product offering.

sell our products through several different channels including OEMs, lift equipment dealers and battery distributors as well as directly

3 unchanged sentences

solutions directly to other accounts including industrial equipment manufacturers and end users.

for fiscal 2025 increased $5,610,000 or 9%, to $66,434,000, compared to $60,824,000 for fiscal 2024.

increase in revenues was driven by increased demand in both the material handling and GSE markets.

The material handling revenue increase

was attributed to increased unit demand for our private label walkie packs.

The GSE revenue increase was attributed to new customer acquisition

and higher average selling prices.

of sales for fiscal 2025 increased $1,103,000, or 3%, to $44,694,000, compared to $43,591,000 for fiscal 2024.

increase in cost of sales was directly associated with higher sales of energy storage solutions, partially offset by lower average cost

of sales per unit achieved during the current year as a result of our gross margin improvement initiatives, including design enhancements

to lower cost, improve serviceability, simplify bill of materials and supply chain initiatives to improve inventory turns and create

part commonality across multiple product lines.

Cost of sales as a percentage of revenues for fiscal 2025 was 67%, a decrease

of five percentage points, compared to 72% for fiscal 2024.

profit for fiscal 2025 increased $4,507,000 or 26%, to $21,740,000, compared to $17,233,000 for fiscal 2024.

The increase in

profitability is primarily due to the impact of manufacturing efficiencies, cost savings initiatives and lower warranty-related expense.

profit margin (gross profit expressed as a percentage of revenues) increased to 33% for fiscal 2025 compared to 28 %

for fiscal 2024.

and Administrative

and administrative expenses for fiscal 2025 increased $3,372,000 or 18%, to $23,304,000, compared to $18,932,000 for fiscal 2024.

expenses consist primarily of salaries and personnel-related expenses, sales force commissions, consulting fees, facilities-related expenses,

for fiscal 2026 decreased $24,302,000 or 37%, to $42,132,000, compared to $66,434,000 for fiscal 2025.

The decrease in revenues was driven

by our largest customer within material handling significantly cutting their capital expense budget, an increasing number of competitive

market participants within the GSE market, and overall pricing pressures which were driven by cost increases from tariffs.

of sales for fiscal 2026 decreased $15,279,000, or 34%, to $29,415,000, compared to $44,694,000 for fiscal 2025.

The decrease was mostly

attributed to lower sales volume, lower labor costs from a lower headcount and lower warranty related costs.

Cost of sales as a percent

of revenues increased 2.5% from higher per unit costs due to tariffs and a loss in operating leverage within labor and overhead due to

lower revenue, but were slightly offset by lower warranty related costs per unit.

profit for fiscal 2026 decreased $9,023,000 or 42%, to $12,717,000, compared to $21,740,000 for fiscal 2025 primarily due to lower sales

Gross profit margin decreased 254 basis points year over year as a result of higher per unit costs due to tariffs, a loss in

operating leverage within labor and overhead due to lower revenue, but were slightly offset by lower warranty related costs per unit.

General and Administrative

general and administrative expenses for fiscal 2026 decreased $5,927,000 or 27%, to $16,377,000, compared to $22,304,000 for fiscal 2025.

Such expenses consist primarily of personnel-related expenses, sales force commissions, consulting fees, facilities-related expenses,

outbound shipping costs, insurance premiums, marketing expenses, travel expenses, public relations expenses and bad debt expenses.

increase was primarily attributable to professional fees related to the restatement of previously issued financial statements, legal

settlements, bonuses, and severance, while slightly offset by lower stock-based compensation driven by forfeitures.

decrease was primarily due to reductions in salaries and wages from a lower headcount and reductions in bonuses, executive severance,

commission expenses, shipping expenses and professional fees, and the prior year included the cost of the multi-year restatement of previously

filed financial statements.

and Development

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with revisions to existing product designs and new product development.

The decrease was primarily attributable to payroll and related

benefits as well as stock-based compensation driven from reduced headcount and related stock award forfeitures.

Income (Expense), net

expense (expense), net for fiscal 2025 decreased $72,000 or 4%, to $1,646,000, compared to $1,718,000 for fiscal 2024.

The decrease in

interest expense was due to lower average balances outstanding on our GBC Credit Facility.

loss during fiscal 2025 decreased $1,659,000 or 20%, to a net loss of $6,674,000 compared to a net loss of $8,333,000 for fiscal

The lower net loss for fiscal 2025 was primarily attributable to the increase in gross profit while slightly offset by higher

general and administrative costs.

The decrease was primarily attributable to decreased salaries

and wages from a lower headcount, lower bonuses, and a lower level of research and development project activity.

expense, net for fiscal 2026 and 2025 were $121,000 and $81,000, respectively, and consisted primarily of discount charged on accounts

receivable that are factored through a financial institution.

expense, net for fiscal 2026 decreased $712,000 or 45%, to $853,000, compared to $1,565,000 for fiscal 2025.

The decrease in interest

expense was primarily due to lower average borrowings under our credit facilities during the twelve months ended June 30, 2026 as compared

to the same period a year ago.

loss for fiscal 2026 increased $774,000 or 12%, to a net loss of $7,448,000 compared to a net loss of $6,674,000 for fiscal 2025.

increase in net loss was primarily attributable to the decrease in revenue while slightly offset by a decline in operating expenses.

EBITDA is a non-GAAP financial measure.

Adjusted EBITDA is calculated taking net loss and adding back the expenses related to interest,

income taxes, depreciation, amortization and stock-based compensation, each of which has been calculated in accordance with GAAP.

Additionally, costs to restate prior periods, as presented in our Annual Report on Form 10-K filed for the year ended

June 30, 2024, and litigation resulting from such restatements are also added back.

EBITDA was a loss of approximately $147,000 for fiscal 2025 compared to a loss of $3,999,000 for fiscal 2024.

Adjusted EBITDA is calculated by taking net loss and adding back the expenses related to

interest, income taxes, depreciation, amortization, stock-based compensation and financing costs, each of which has been calculated

in accordance with GAAP.

Additionally, costs to restate prior periods as presented in our Annual Report on Form 10-K filed for the

fiscal year ended June 30, 2024 and litigation resulting from such restatements are also added back.

Adjusted EBITDA was a loss of

approximately $4,506,000 for fiscal 2026 compared to a loss of $146,000 for fiscal 2025.

believes that Adjusted EBITDA, when viewed with our results under GAAP and the accompanying reconciliations, provides useful information

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Income tax provision

Depreciation and amortization

and amortization

Add/Subtract:

Restatement and related costs

Restatement and related

Stock-based compensation

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and Capital Resources

fiscal 2025, we generated positive cash flows from operations of $0.6 million.

As of June 30, 2025, we had an accumulated deficit of

$106.4 million.

To date, our business has not generated sufficient cash to fund our operations.

However, given our existing backlog,

we anticipate that revenue growth coupled with improvement in our gross margin and lower operating expenses will move us closer to

profitability and improve our cash flow.

Our gross margin improvement plan includes, but is not limited to, efforts to reduce

product costs.

of June 30, 2026, we had an accumulated deficit of $113.8 million.

To date, our business has not generated sufficient cash to fund our

However, given our existing backlog, we anticipate that revenue growth coupled with improvement in our gross margin and lower

operating expenses will move us closer to profitability and improve our cash flow.

Our gross margin improvement plan includes, but is

not limited to, efforts to reduce product costs.

We received new orders during fiscal 2026 of approximately $35.9 million.

of June 30, 2025, we had an existing cash balance of $1.3 million and $2.4 million remaining available under our $16.0 million GBC

Credit Facility subject to borrowing base limitations.

However, if the Company were to experience an event of default, as

defined by the loan agreements, as amended, such additional funds may not be made available.

of June 30, 2026, we had an existing cash balance of $0.3 million and $9.7 million remaining available under our $16.0 million GBC Credit

Facility subject to borrowing base limitations.

As discussed in Note 7 – Line of Credit, on March 31, 2026, we notified GBC that

we failed to comply with the minimum EBITDA financial covenant for the trailing three-month period ended February 28, 2026 under the

GBC Credit Facility, which resulted in an “event of default” under the GBC Credit Facility.

We are working with GBC to negotiate

an amendment to the GBC Credit Facility or otherwise obtain a waiver from GBC, however, there can be no assurance that we will be able

to do so or that we will be able to obtain a waiver from GBC on terms favorable to us or at all.

GBC has allowed us to continue to use

our line of credit under the GBC Credit Facility while negotiations continue, however, GBC can choose to limit or discontinue availability

and/or call the debt at any time.

April 2024 we notified GBC of a certain event of default with respect to our failure to maintain the EBITDA covenant for the trailing

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May 31, 2024, we entered into Amendment No.

3 to the Loan and Security Agreement (the “Third Amendment”) with GBC,

which amended certain terms including but not limited to amending the EBITDA Minimum financial covenant.

In consideration for the

Third Amendment, we agreed to pay GBC a non-refundable amendment fee of $50,000 in cash.

See Note 7 – Notes Payable

in the notes to our consolidated financial statements included in this

Annual Report.

3 to the Loan and Security Agreement (the “Third Amendment”) with GBC, which

amended certain terms including but not limited to amending the EBITDA Minimum financial covenant.

In consideration for the Third Amendment,

we agreed to pay GBC a non-refundable amendment fee of $50,000 in cash.

See Note 7 – Line of Credit in the notes to our consolidated

financial statements included in this Form.

August 30, 2024, GBC agreed to waive our non-compliance with, and the effects of our non-compliance under, various representations, financial

covenants and non-financial covenants relating to our financial restatements.

On January 17, 2025,

GBC agreed to waive our non-compliance with, and the effects of our non-compliance under, various representations, financial covenants

and non-financial covenants relating to our financial restatements and our failure to maintain the EBITDA Minimum for certain financial

January 22, 2025, we entered into Amendment No.

4 to the Loan Agreement (the “Fourth Amendment”) which amended certain

terms relating to the EBITDA Minimum financial covenant of the Company.

In consideration for the Fourth Amendment, paid GBC a

non-refundable amendment fee of $50,000 in cash.

July 16, 2025, we entered into Amendment No.

5 to the Loan Agreement (the “Fifth Amendment”) which

amended the definition of the maturity date to August 31, 2025, unless otherwise

extended pursuant to the terms of the Loan Agreement, provided however, upon the occurrence of either (i) an extension of the due date

of our Subordinated Unsecured Promissory Note, as amended, with Cleveland Capital, L.P.

(“the Cleveland Note”) to a date

no earlier than September 29, 2027, or (ii) the conversion of all of the outstanding obligations under the Cleveland Note into equity

of the Registrant, the maturity date will automatically extend to July 31, 2027.

In consideration for the Fifth Amendment, we agreed

to pay GBC a non-refundable amendment fee of $112,500.

September 4, 2025, we entered into Amendment No.

6 to Loan Agreement (the “Sixth Amendment”), with the effective date of

August 31, 2025, which amended certain terms of the Loan Agreement, including (i) modifications to the EBITDA minimum financial

covenant of the Company, and (ii) an extension of the maturity date from August 31, 2025 to September 15, 2025, subject to

acceleration or further extension pursuant to the terms of the Loan Agreement.

the closing of the Private Placement on September 15, 2025, all the outstanding obligations under the Cleveland Note was applied in

full towards satisfaction of the subscription by Cleveland in the Private Placement.

Upon the conversion of all of the outstanding

obligations under the Cleveland Note into equity of the Company, the Maturity Date of the Revolving Note was automatically extended

to July 31, 2027.

believe that our existing cash of $1.1 million, together with $6.7 million that currently remains available under our $16.0 million

GBC Credit Facility, subject to borrowing base limitations, as of July 31, 2025, along with the $3.8 million cash proceeds portion

from our recent private placement , which closed on September 15, 2025, will not be sufficient to meet our anticipated capital resources to fund planned operations for the next twelve months.

“Future Liquidity Needs” below and Liquidity and Financial Condition in Note 2 – Summary of Significant

Accounting Policies to the audited consolidated financial statements for additional information.

On January 17, 2025, GBC agreed to waive our non-compliance

with, and the effects of our non-compliance under, various representations, financial covenants and non-financial covenants relating

to our financial restatements and our failure to maintain the EBITDA Minimum for certain financial periods.

January 22, 2025, we entered into the Fourth Amendment which amended certain terms relating to the EBITDA Minimum financial covenant

of the Company.

In consideration for the Fourth Amendment, paid GBC a non-refundable amendment fee of $50,000 in cash.

July 16, 2025, we entered into the Fifth Amendment which amended the definition of the maturity date to August 31, 2025, unless otherwise

extended pursuant to the terms of the Loan and Security Agreement, provided however, upon the occurrence of either (i) an extension of

the due date of the Cleveland Note to a date no earlier than September 29, 2027, or (ii) the conversion of all of the outstanding obligations

under the Cleveland Note into equity of the Registrant, the maturity date will automatically extend to July 31, 2027.

In consideration

for the Fifth Amendment, we agreed to pay GBC a non-refundable amendment fee of $112,500.

September 4, 2025, we entered into the Sixth Amendment, with the effective date of August 31, 2025, which amended certain terms of the

Loan and Security Agreement, including (i) modifications to the EBITDA minimum financial covenant of the Company, and (ii) an extension

of the maturity date from August 31, 2025 to September 15, 2025, subject to acceleration or further extension pursuant to the terms of

the Loan and Security Agreement.

Upon the closing of the Private Placement on September 15, 2025, all the outstanding obligations under

the Cleveland Note was applied in full towards satisfaction of the subscription by Cleveland in the Private Placement.

Upon the conversion

of all of the outstanding obligations under the Cleveland Note into equity of the Company, the Maturity Date of the Revolving Note was

automatically extended to July 31, 2027.

September 15, 2025, we completed a private placement (the “Private Placement”) in which we sold 258,144 Preferred Stock Warrants

and 1,214,766 warrants to purchase shares of our common stock (the “Common Stock Warrants”) pursuant to a securities purchase

agreement, dated July 18, 2025 (the “Private Placement Purchase Agreement”), which we amended and restated on September 15,

2025 (as amended and restated, the “Amended and Restated Private Placement Purchase Agreement”), for proceeds of approximately

$4,348,000, net of offering costs of $652,000, and the satisfaction of any and all of our obligations due to Cleveland under the Cleveland

Note pursuant to the Debt Satisfaction Agreement.

November 3, 2025, we completed an underwritten public offering (the “Public Offering”) of 3,840,000 shares of our common

stock at a public offering price of $2.50 per share.

In addition, we granted the underwriter a 30-day option to purchase up to an additional

576,000 shares of common stock at the public offering price, less underwriting discounts and commissions, to cover over-allotments, which

was subsequently exercised in full.

In total, proceeds received were approximately $9,760,000, net of offering costs of approximately

May 15, 2026, we entered into the CEF Purchase Agreement and related CEF Registration Rights Agreement with Roth Principal Investments,

providing a discretionary Committed Equity Facility of up to $40.0 million.

Beginning June 4, 2026, we may, at our option over 36 months,

sell shares of common stock to Roth Principal Investments at a price based on the VWAP during a specific valuation period, less a fixed

3.0% discount in the case of a Market Open Purchase or an Intraday Purchase or less a fixed 5.25% discount in the case of a Pre-Market

Purchase or a Post-Market Purchase, subject to ownership and other limitations set forth in the CEF Purchase Agreement, including the

requirement that the closing sale price of our common stock on the trading day immediately prior to the applicable purchase date is not

less than the Threshold Price of $0.50.

On August 14, 2026, the closing price of our common stock on the Nasdaq Capital Market was $0.595

per share and we can provide no assurances that our common stock will continue to trade above the Threshold Price.

As of June 30, 2026,

we issued and sold 19,609 shares of common stock at an average price of $0.98 per share under the CEF Purchase Agreement and received

net proceeds of approximately $17,000, after offering costs of approximately $2,000.

See Note 10 – Stockholders’ Equity (Deficit)

to the consolidated financial statements for additional information pertaining to the Private Placement, the Public Offering and the

Committed Equity Facility.

has evaluated our expected cash and working capital requirements, which include, but are not limited to, investments in additional selling

and marketing, research and development and capital equipment, as well as our expected funding sources, which include, but are not limited

to, our existing cash, forecasted gross margin, proceeds we believe are available under the Committed Equity Facility, and funding we

believe is available under the GBC Credit Facility, subject to certain restrictions, covenants and borrowing base limitations.

Our borrowing

base changes as qualified collateral fluctuates and, therefore, available funding under the GBC Credit Facility could be substantially

As discussed in Note 7 – Line of Credit, on March 31, 2026, we notified GBC that we failed to comply with the minimum EBITDA

financial covenant for the trailing three-month period ended February 28, 2026 under the GBC Credit Facility, which resulted in an “event

of default” under the GBC Credit Facility.

We are working with GBC to negotiate an amendment to the GBC Credit Facility or otherwise

obtain a waiver from GBC, however, there can be no assurance that we will be able to do so or that we will be able to obtain a waiver

from GBC on terms favorable to us or at all.

GBC has allowed us to continue to use our line of credit under the GBC Credit Facility while

negotiations continue, however, GBC can choose to limit or discontinue availability at any time.

In addition, due to our event of default

under the GBC Credit Facility, GBC may, at its option, declare its commitments to us terminated and all of our obligations under the

GBC Credit Facility immediately due and payable, all without demand, notice or further action of any kind required on the part of GBC,

and/or exercise other remedies available to it, which include, among other things, its rights as a secured party under the GBC Credit

believe that our existing cash of $0.3 million as of June 30, 2026 will not be sufficient to meet our anticipated capital requirements

to fund planned operations for the next twelve months following the filing date of this Report, and since GBC can choose to limit our

access to our line of credit under the GBC Credit Facility and/or call the debt at any time, substantial doubt exists about our ability

to continue as a going concern over the 12 months following the filing date of this Report.

See “Future Liquidity Needs”

below and Liquidity and Financial Condition in Note 2 – Summary of Significant Accounting Policies to the consolidated

financial statements included in this Report for additional information.

following table represents a summary of our consolidated statement of cash flows for the fiscal year ended June 30, 2026 and 2025.

year ended June 30,

Net cash provided by (used in) operating activities

Net cash (used in) provided by

operating activities

$ (5,919,000 )

Net cash used in investing activities

Net cash provided by financing activities

Net change in cash

Net cash provided by financing

change in cash

$ (1,029,000 )

cash used in operating activities was $5,918,000 during fiscal 2026.

The primary uses of cash were the net loss of $7,448,000.

in operating assets and liabilities were reductions in accounts receivable and inventories, partially offset by a decrease in accounts

payable and accrued liabilities combined, office lease payments and an increase in other assets.

cash provided by operating activities was $610,000 during fiscal 2025.

The primary sources of cash were an increase in accounts payable

and accrued expenses combined and non-cash operating

The primary uses of cash were the net loss of $6,674,000, an increase in accounts receivable and an increase in other current

cash used in operating activities was $4,798,000 during fiscal 2024.

The primary uses of cash were the net loss of $8,333,000 and increases

in inventory and accounts receivable, that were partially offset by non-cash operating costs and an increase in accounts payable and

accrued expenses combined .

and accrued expenses combined and non-cash operating costs.

The primary uses of cash were the net loss of $6,674,000, an increase in

accounts receivable and an increase in other current assets.

cash used in investing activities during fiscal 2026 was $509,000, primarily due to purchases of furniture and office equipment, warehouse

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of furniture and office equipment, warehouse equipment and other related costs.

cash provided by financing activities during fiscal 2025 was $734,000, primarily due to drawing $1,000,000 under the Cleveland

Subordinated Line of Credit, partially offset by $207,000 in net repayments under the GBC Credit.

Net cash provided by financing

activities during fiscal 2024 was $3,915,000, primarily due to $3,922,000 in net borrowings under the GBC Credit Facility and SVB

Credit Facility.

cash provided by financing activities during fiscal 2026 was $5,398,000, primarily due to $12,952,000 net cash proceeds from the Public

Offering, the Private Placement and the Committed Equity Facility, partially offset by $7,324,000 of net repayments under the working

capital line of credit.

Net cash provided by financing activities during fiscal 2025 was $734,000, primarily due to drawing $1,000,000

under the Cleveland Subordinated Line of Credit, partially offset by $207,000 in net repayments under the GBC Credit Facility.

Liquidity Needs

have evaluated our expected cash requirements over the next twelve months, which include, but are not limited to, investments in additional

sales and marketing and research and development, capital expenditures, and working capital requirements and have determined that our

existing cash resources are not sufficient to meet our anticipated needs during the next twelve months, from the filing of this annual

See Liquidity and Financial Condition in Note 2 – Summary of Significant Accounting Policies to the audited consolidated

financial statements for additional information.

of July 31, 2025, we had a cash balance of $1.1 million and funding available under our GBC Credit Facility under which up to $6.7

million is currently available, subject to borrowing base limitations.

Additionally, the cash portion of the proceeds in connection

with the closing of a $5.0 million private placement on September 15, 2025 is approximately $3.8 million.

ability to draw funds from the GBC Credit Facility is subject to certain restrictions, covenants and borrowing base limitations.

of the Default under the GBC Credit Facility, the financial covenants in the Agreement were modified to help prevent future defaults.

If we are unable to meet the conditions provided in the loan documents, the funds may not be available to us.

In addition, our operations

have been impacted by delays in new orders of its energy storage solutions due to corresponding deferrals of new forklift purchases mainly

caused by lower capital spending in the market sector that we serve and interest rate variability affecting selected large customer fleets

which have impacted its ability to meet projected revenue targets and generate cash from operations.

Further, these events have placed

pressure on our cash resources and raise substantial doubt about our ability to continue as a going concern for the next twelve months

following the filing date of this Annual Report on Form 10-K.

should there be any delays in the receipts of key component parts, due in part to supply change disruptions, our ability to fulfill the

backlog of sales orders will be negatively impacted resulting in lower availability of cash resources from operations.

In that event,

we may be required to raise additional funds by issuing equity or convertible debt securities.

If such funds are not available when required,

management will be required to curtail investments in new product development, which may have a material adverse effect on future cash

flows and results of operations and our ability to continue operating as a going concern.

See Liquidity and Financial Condition

in Note 2 – Summary of Significant Accounting Policies to the audited consolidated financial statements for additional information.

There is no guarantee that additional funds will be available on a timely basis

or on acceptable terms.

Our failure to timely file our fiscal 2024 annual report on form 10-K and subsequent fiscal 2025 interim quarterly

reports on Form 10-Q means that we currently are ineligible to use a registration statement on Form S-3.

We will not be eligible to use

a registration statement on Form S-3 again until we have timely filed all materials and reports required to be filed pursuant to Section

13, 14 or 15(d) of the Securities Exchange Act of 1934 for a period of at least twelve (12) calendar months immediately preceding the

filing of a new registration statement on Form S-3.

The inability to use a Form S-3 registration statement will limit our ability to

raise capital through sales of our securities in a timely and cost-efficient manner.

To the extent that we raise additional funds by

issuing equity, equity-linked or convertible debt securities, our stockholders may experience additional dilution and such financing

may involve restrictive covenants.

Historically,

our revenues and operating cash flows have not been sufficient to sustain our operations and we have relied on debt and equity financing

for additional funds.

We have incurred an accumulated deficit of $113.8 million through June 30, 2026, and for the twelve months ended

June 30, 2026 incurred a net loss of $7.4 million and utilized $5.9 million of cash in operating activities.

As of June 30, 2026, we

had a cash balance of $0.3 million.

addition, our ability to meet projected revenue targets and generate cash from operations has been impacted by delays in new orders for

our energy storage solutions, reflecting corresponding deferrals of new forklift purchases by selected large customer fleets due to lower

capital spending and interest rate variability and, more recently, global tariff uncertainties.

import a portion of our raw materials and components parts from other countries, including China.

Recently, many of the countries where

we source raw materials and component parts have become subject to import tariffs upon entry into the United States.

The selling prices

of our finished products have been increased due to increased tariff levels in effect, which may have a negative impact on our revenues

and cash flows.

have implemented reductions in labor and overhead costs and have increased selling prices of energy storage solutions, however, management

is evaluating strategies to further improve profitability of operations.

Gross margin improvement tasks include, but are not limited

to, a plan to drive bill of material costs down.

We continue to execute cost reduction, sourcing and pricing recovery initiatives in

efforts to increase gross margins and improve cash flow from operations.

Unforeseen factors beyond management’s control, including

economic uncertainty and the impact of global tariff initiatives, could potentially have a negative impact on the gross margin improvement

Management is continuing to evaluate other sources of capital to fund its operations and growth.

However, there can be no assurance

that we will be able to realize our plans for improved operations.

7A - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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What changed 10-K

Item 7. Management’s Discussion and Analysis