What changed in this filing

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Item 1. Financial Statements

2025-08-14 compared with 2025-05-15 · 262 added, 177 removed, 462 unchanged (49% of the section changed)

3 unchanged sentences

(In thousands, except per share data)

March 31, 2025

June 30, 2025

December 31, 2024

2 unchanged sentences

Restricted cash

Accounts receivable, net of allowance for credit losses of $ 38 and $ 41 , respectively

Accounts receivable, net of allowance of doubtful accounts of $ 19 and $ 41 , respectively

Inventories, net of allowance for obsolescence of $ 78 and $ 100 , respectively

Deposit for Irwin acquisition

Prepaid expense and other current assets

7 unchanged sentences

Accounts payable

Accrued liabilities

Accrued expense

Income taxes payable

8 unchanged sentences

STOCKHOLDERS’ EQUITY:

Preferred stock, $ 0.01 par value, 10,000 shares authorized, none outstanding as of March 31, 2025 and December 31, 2024

Preferred stock, $ 0.01 par value, 10,000 shares authorized, none outstanding as of June 30, 2025 and December 31, 2024

Common stock, $ 0.01 par value, 120,000 shares authorized;

9,383 and 9,210 issued and outstanding as of March 31, 2025 and December 31, 2024, respectively

9,391 and 9,210 issued and outstanding as of June 30, 2025 and December 31, 2024

Additional paid-in capital

6 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024

(In thousands, except per share data)

Three months ended March 31,

Three months ended June 30

Six months ended June 30

Cost of goods sold

9 unchanged sentences

Interest expense

Foreign exchange loss

Total other expense, net

Foreign exchange (gain) loss

Total other expense

INCOME BEFORE INCOME TAX PROVISION

8 unchanged sentences

FITLIFE BRANDS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024

(In thousands)

THREE MONTHS ENDED MARCH 31, 2025

JANUARY 1, 2025

Retained earnings (accumulated

THREE MONTHS ENDED JUNE 30, 2025

APRIL 1, 2025

Exercise of stock options

1 unchanged sentence

Comprehensive income

MARCH 31, 2025

THREE MONTHS ENDED MARCH 31, 2024

JUNE 30, 2025

SIX MONTHS ENDED JUNE 30, 2025

JANUARY 1, 2025

Exercise of stock options

Stock-based compensation

Comprehensive income

MARCH 31, 2024

JUNE 30, 2025

THREE MONTHS ENDED JUNE 30, 2024

APRIL 1, 2024

Stock-based compensation

Comprehensive loss

JUNE 30, 2024

SIX MONTHS ENDED JUNE 30, 2024

JANUARY 1, 2024

Stock-based compensation

Comprehensive loss

JUNE 30, 2024

The accompanying notes are an integral part of these condensed consolidated financial statements.

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2025 AND 2024

(In thousands)

Three months ended March 31,

Six months ended June 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

1 unchanged sentence

Depreciation and amortization

Allowance for credit losses

Allowance for doubtful accounts

Allowance for inventory obsolescence

2 unchanged sentences

Changes in operating assets and liabilities:

Accounts receivable

Deferred taxes

Accounts receivable - trade

Deferred tax asset

Prepaid expense and other current assets

3 unchanged sentences

Lease liability

Accrued liabilities

Accrued expense

Product returns

1 unchanged sentence

CASH FLOWS FROM INVESTING ACTIVITIES:

Cash deposit paid for Irwin acquisition

Purchase of property and equipment

10 unchanged sentences

Cash paid for income taxes

Cash paid for interest

Cash paid for interest, net of amounts capitalized

The accompanying notes are an integral part of these condensed consolidated financial statements.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2025 and 2024

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024

(In thousands, except per share data)

5 unchanged sentences

Tobias, All Natural Advice, and Maritime Naturals (together, the “ MRC Products ");

and (iv) MusclePharm (“ MusclePharm ”).

and (iv) MusclePharm.

The Company distributes the NDS Products principally through franchised General Nutrition Centers, Inc.

10 unchanged sentences

In our opinion, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation are included.

Operating results for the three-month period ended March 31, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025.

Operating results for the three- and six-month periods ended June 30, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025.

Although management of the Company believes the disclosures presented herein are adequate and not misleading, these interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the footnotes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the Securities and Exchange Commission (the “ SEC ”) on March 27, 2025.

32 unchanged sentences

For these transactions, the Company evaluated principal versus agent considerations to determine appropriateness of recording distribution and platform fees paid to third-party e-commerce companies as an expense or as a reduction of revenue.

The Company records distribution and platform fees to cost of goods sold in the consolidated statements of income and comprehensive income.

Distribution and platform fees are not recorded as a reduction of revenue because the Company (1) owns the goods before they are transferred to the customer, (2) can direct Amazon, similar to other third-party logistics providers, to return the Company’s inventory to any location specified by the Company, (3) has the responsibility to make customers whole following any returns made by customers directly to Logistic Providers and the Company retains the back-end inventory risk, (4) is subject to credit risk (i.e., credit card chargebacks), (5) establishes prices of its products, (6) can determine who fulfills the goods to the customer (Amazon or the Company) and (7) can limit quantities or stop selling the goods at any time.

The Company records distribution and platform fees to cost of goods sold in the condensed consolidated statements of income and comprehensive income.

Distribution and platform fees are not recorded as a reduction of revenue because the Company (1) owns the goods before they are transferred to the customer, (2) can direct Amazon, similar to other third-party logistics providers (“ Logistic Providers ”), to return the Company’s inventory to any location specified by the Company, (3) has the responsibility to make customers whole following any returns made by customers directly to Logistic Providers and the Company retains the back-end inventory risk, (4) is subject to credit risk (i.e., credit card chargebacks), (5) establishes prices of its products, (6) can determine who fulfills the goods to the customer (Amazon or the Company) and (7) can limit quantities or stop selling the goods at any time.

Based on these considerations, the Company is the principal in this arrangement.

Advertising fees paid to Amazon are recorded in advertising and marketing expense in the consolidated statements of income and comprehensive income.

Advertising fees paid to Amazon are recorded in advertising and marketing expense in the condensed consolidated statements of income and comprehensive income.

The Company disaggregates revenue into distribution channels, geographical regions and collections of brands (Legacy FitLife and recently acquired brands).

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

Online revenue, which consists of revenue generated from sales on the Company’s own websites as well as third-party e-commerce platforms such as Amazon, for the quarter ended March 31, 2025 was approximately 67 % of net revenue, compared to 65 % of net revenue during the same period in the prior year.

Wholesale revenue for the quarter ended March 31, 2025 was approximately 33 % of net revenue compared to 35 % during the same period in the prior year.

Online revenue, which consists of revenue generated from sales on the Company’s own websites as well as third-party e-commerce platforms such as Amazon, was approximately 65 % of net revenue for the quarter ended June 30, 2025, compared to 66 % of net revenue during the same period in the prior year.

Wholesale revenue was approximately 35 % of net revenue for the quarter ended June 30, 2025 compared to 34 % during the same period in the prior year.

Online revenue was approximately 66 % of net revenue for the six months ended June 30, 2025 and 2024.

Wholesale revenue was approximately 34 % of net revenue for the six months ended June 30, 2025 and 2024.

Sales to customers in the U.S.

were approximately 96 % during the three months ended March 31, 2025 and 2024, with the balance of sales for the same respective periods being to customers primarily in Canada.

were approximately 96 % during the three and six months ended June 30, 2025 and 2024, with the balance of sales for the same respective periods being to customers primarily in Canada.

The Company provides limited financial performance metrics for three collections of brands—Legacy FitLife (consists of nine brands), MRC (consists of three brands) and MusclePharm (one brand).

These collections of brands do not meet the definition of operating segments and are not managed as such.

Three months ended March 31,

Three months ended

Six months ended

June 30, 2025

June 30, 2024

June 30, 2025

June 30, 2024

Legacy FitLife

11 unchanged sentences

Customer and Vendor Concentration

Total net sales to GNC during the three months ended March 31, 2025 and 2024 were 16 % and 25 % of total revenue for the three months ended March 31, 2025 and 2024, respectively.

Accounts receivable attributable to GNC as of March 31, 2025 and December 31, 2024 represented 43 % and 35 % of the Company’s total accounts receivable balance, respectively.

As of March 31, 2025 and December 31, 2024, there was one vendor who accounted for 65 % and 59 % of the Company's consolidated accounts payable, respectively.

For the three months ended March 31, 2025 , there were two vendors who accounted for 54 % and 12 % of the Company's inventory-related purchases.

For the three months ended March 31, 2024 , there were two vendors who accounted for 42 % and 27 % of the Company's inventory-related purchases.

Cash, Cash Equivalents, and Restricted Cash

Net sales to GNC during the three-month periods ended June 30, 2025 and 2024 represented 22 % and 23 % of total net revenue, respectively.

Net sales to GNC during the six-month periods ended June 30, 2025 and 2024 represented 19 % and 24 % of total net revenue, respectively.

Gross accounts receivable attributable to GNC represented 28 % and 35 % of the Company’s total accounts receivable balance as of June 30, 2025 and December 31, 2024, respectively.

As of June 30, 2025 and December 31, 2024, there was one vendor who accounted for more than 10 % of the Company's consolidated accounts payable.

During the six months ended June 30, 2025 and 2024, there were two vendors who each accounted for over 10 % of the Company’s inventory-related purchases.

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity from the date of purchase of three months or less to be cash equivalents.

The Company has approximately $ 53 in short-term interest-earning accounts pledged as collateral for financing arrangements at March 31, 2025, currently limited to business credit cards.

The Company has approximately $ 55 in short-term interest-earning accounts pledged as collateral for financing arrangements at June 30, 2025, currently limited to business credit cards.

We lease certain corporate office space and office equipment under lease agreements with monthly payments over a period of 36 to 84 months.

10 unchanged sentences

If the Company’s stock price experiences significant price fluctuations, this will impact the fair value of the reporting unit, which can lead to potential impairment in future periods.

Based on management’s assessment, there were no indicators of impairment at March 31, 2025 or December 31, 2024.

Intangible and Long-lived Assets

Intangible assets are recorded at cost and amortized using the straight-line method over their estimated useful lives.

The Company regularly reviews the carrying value and estimated lives of its long-lived assets and intangible assets to determine whether indicators of impairment may exist which warrant adjustments to carrying values or estimated useful lives.

The determinants used for this evaluation include management’s estimate of the asset’s ability to generate positive income from operations and positive cash flow in future periods as well as the strategic significance of the assets to the Company’s business objectives.

Should an impairment exist, the impairment loss would be measured based on the excess of the carrying amount of the long-lived asset group over the asset’s fair value.

Based on management’s assessment, there were no indicators of impairment for intangible assets as of March 31, 2025, and December 31, 2024.

Management determined there were no indicators of impairment at June 30, 2025 or December 31, 2024.

The Company will perform its next impairment analysis in December 2025.

Intangible Assets

The Company has certain intangible assets that were recorded at their fair value at the time of acquisition.

The finite-lived intangible assets consist of client relationships, formulations, and website.

Intangible assets with finite useful lives are amortized using the straight-line method over their estimated useful life.

Intangible assets with indefinite lives, which consist of brands and trademarks, are not amortized but are tested for impairment annually or when indicators of impairment exist.

Factors that management considers in this assessment include macroeconomic conditions, industry and market considerations, overall financial performance (both current and projected), changes in management and strategy, and changes in the composition and carrying amounts of net assets.

If this qualitative assessment indicates that it is more likely than not that the fair value of a reporting unit is less than it’s carrying value, a quantitative assessment is then performed.

The Company noted no indicators of impairment for intangible assets as of June 30, 2025, and December 31, 2024.

Acquisitions and Business Combinations

13 unchanged sentences

Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized, or that future deductibility is uncertain.

The income tax provision for interim periods is determined using an estimate of the annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period.

Each quarter, the estimate of the annual effective tax rate is updated, and if the estimated effective tax rate changes, a cumulative adjustment is made.

There is potential for volatility of the effective tax rate due to several factors, including changes in the mix of the pre-tax income and the jurisdictions to which it relates.

The effective income tax rate was 25.8 % and 27.2 % for the three months ended March 31, 2025 and 2024, respectively.

The effective income tax rate was 26.1 % and 24.3 % for the six months ended June 30, 2025 and 2024, respectively.

Net Income Per Share

3 unchanged sentences

The dilutive effect of potentially dilutive securities is reflected in diluted net income per share if the exercise prices were lower than the average fair market value of common shares during the reporting period.

Basic and diluted weighted-average shares outstanding and antidilutive options that were excluded from diluted weighted average shares outstanding are as follows:

Three months ended March 31,

For the three and six months ended June 30, 2025 and 2024, there were no antidilutive options.

Basic and diluted weighted-average shares outstanding are as follows:

Three months ended June 30,

Six months ended June 30,

Basic weighted average shares outstanding

14 unchanged sentences

The carrying amounts of financial assets and liabilities, such as cash and cash equivalents, restricted cash, accounts receivable and accounts payable, approximate their fair values because of the short maturity of these instruments.

The carrying value of the term loans approximate their fair value based on the market interest rates of these loans.

Segment Information

The carrying value of our notes payable approximate their fair value based on the market interest rates of these notes.

The Company’s Chief Executive Officer is the chief operating decision maker (“ CODM ”) and evaluates performance and makes operating decisions about allocating resources based on financial data presented on a consolidated basis.

22 unchanged sentences

The value of any finished goods inventory projected to expire prior to sale is included in the allowance.

The total allowance for expiring, excess and slow-moving inventory items as of March 31, 2025 and December 31, 2024 amounted to $ 76 and $ 100 , respectively.

The Company’s inventories as of March 31, 2025 and December 31, 2024 were as follows:

March 31, 2025

The total allowance for expiring, excess and slow-moving inventory items as of June 30, 2025 and December 31, 2024 amounted to $ 78 and $ 100 , respectively.

The Company’s inventories as of June 30, 2025 and December 31, 2024 were as follows:

June 30, 2025

December 31, 2024

2 unchanged sentences

NOTE 5 - PROPERTY AND EQUIPMENT

The Company had property and equipment as of March 31, 2025 and December 31, 2024 as follows:

March 31, 2025

The Company had property and equipment as of June 30, 2025 and December 31, 2024 as follows:

June 30, 2025

December 31, 2024

Accumulated depreciation

Depreciation expense for the three months ended March 31, 2025 and 2024 was $ 10 and $ 26 , respectively.

NOTE 6 – CREDIT AGREEMENT

Debt obligations consisted of the following:

March 31,2025

Depreciation expense for the three months ended June 30, 2025 and 2024 was $ 13 and $ 16 , respectively.

Depreciation expense for the six months ended June 30, 2025 and 2024 was $ 23 and $ 42 , respectively.

NOTE 6 – NOTES PAYABLE

Notes payable consisted of the following:

June 30, 2025

December 31, 2024

Line of Credit

Unamortized debt issuance costs

Credit Agreements – First Citizens Bank

On February 23, 2023, the Company entered into an Amended and Restated Credit Agreement (the “ Prior Credit Agreement ”) with First Citizens Bank (the “ Bank ”), amending and restating that certain Credit Agreement, dated September 24, 2019, between the Company and the Bank.

Pursuant to the Prior Credit Agreement, the Bank provided the Company with a term loan for the principal amount of $ 12,500 (“ Term Loan A ”), and a revolving line of credit of $ 3,500 (the “ Line of Credit ”, and collectively with the Term Loans, the “ Loan ”).

On February 23, 2023, the Company entered into an Amended and Restated Credit Agreement (the “ 2023 Credit Agreement ”) with First Citizens Bank (the “ Bank ”), amending and restating that certain Credit Agreement, dated September 24, 2019, between the Company and the Bank.

Pursuant to the 2023 Credit Agreement, the Bank provided the Company with a term loan for the principal amount of $ 12,500 (“ Term Loan A ”), and a revolving line of credit of $ 3,500 (the “ Line of Credit ”, and collectively with the Term Loans, the “ Loan ”).

The Company used the proceeds from the Loan to fund the acquisition of MRC and for general working capital purposes.

Second Amended and Restated Credit Agreement

On October 10, 2023, the Company entered into a Second Amended and Restated Credit Agreement (the “ Credit Agreement ”) with the Bank, amending and restating the Credit Agreement between the Company and the Bank.

Pursuant to the Credit Agreement, the Bank provided the Company with an additional Term Loan (“ Term Loan B ”, and together with Term Loan A, the “ Term Loans ”) for the principal amount of $ 10,000 and extended the Line of Credit of $ 3.5 million to December 23, 2024.

On October 10, 2023, the Company entered into a Second Amended and Restated Credit Agreement (the “ Prior Credit Agreement ”) with the Bank, amending and restating the 2023 Credit Agreement between the Company and the Bank.

Pursuant to the Prior Credit Agreement, the Bank provided the Company with an additional Term Loan (“ Term Loan B ”, and together with Term Loan A, the “ Term Loans ”) for the principal amount of $ 10,000 and extended the Line of Credit of $ 3.5 million to December 23, 2024.

The Company used the proceeds from Term Loan B to fund the acquisition of the MusclePharm assets and for general working capital purposes.

First Amendment to Second Amended and Restated Credit Agreement

On December 19, 2024, the Company entered into the First Amendment to the Amended Credit Agreement (the “ Amended Credit Agreement ”) to extend the Line of Credit to April 30, 2026.

Term Loans A and B – Pursuant to the Amended Credit Agreement, the Term Loans accrue interest at a per annum rate equal to the greater of 3.50 % or 2.75 % above the one-month secured overnight financing rate (" SOFR ") published for such day by the Federal Reserve Bank of New York.

On December 19, 2024, the Company entered into the First Amendment to the Amended Credit Agreement (the “ Amended Prior Credit Agreement ”) to extend the Line of Credit to April 30, 2026.

Term Loans A and B – Pursuant to the Amended Prior Credit Agreement, the Term Loans accrue interest at a per annum rate equal to the greater of 3.50 % or 2.75 % above the one-month secured overnight financing rate (" SOFR ") published for such day by the Federal Reserve Bank of New York.

The Company shall make quarterly payments of principal plus accrued interest on the Term Loans until the principal balances are fully amortized.

3 unchanged sentences

Term Loan B will fully amortize in October 2028.

Line of Credit – Also pursuant to the Amended Credit Agreement, outstanding advances under the Line of Credit (“ Advances ”) will accrue interest at a per annum rate equal to the greater of 3.50 % or 2.75 % above the one-month SOFR, and the Company will pay the interest on the Advances monthly, with all principal and any accrued interest on outstanding Advances being due and payable in full on the Line of Credit maturity date.

Line of Credit – Also pursuant to the Amended Prior Credit Agreement, outstanding advances under the Line of Credit (“ Advances ”) will accrue interest at a per annum rate equal to the greater of 3.50 % or 2.75 % above the one-month SOFR, and the Company will pay the interest on the Advances monthly, with all principal and any accrued interest on outstanding Advances being due and payable in full on the Line of Credit maturity date.

The Company may prepay amounts borrowed under the Line of Credit, in whole or in part with accrued interest to the date of such prepayment on the amount prepaid, by written notice to Bank at least one business day prior to the proposed prepayment.

The Amended Credit Agreement contains customary events of default (each an “ Event of Default ”), which upon the occurrence of an Event of Default, among other things, interest will accrue at the Applicable Rate plus 2 % per annum, and the Bank may declare all obligations, with interest thereon, immediately due and payable.

The Amended Credit Agreement further contains customary representations and warranties of the Company;

The Amended Prior Credit Agreement contains customary events of default (each an “ Event of Default ”), which upon the occurrence of an Event of Default, among other things, interest will accrue at the Applicable Rate plus 2 % per annum, and the Bank may declare all obligations, with interest thereon, immediately due and payable.

The Amended Prior Credit Agreement further contains customary representations and warranties of the Company;

and customary affirmative and negative covenants, including covenants to maintain a Fixed Charge Coverage Ratio (as defined in the Amended Credit Agreement) of not less than 1.25 to 1.00 as tested quarterly on a trailing twelve-month basis, a Funded Debt to EBITDA Ratio (as defined in the Amended Credit Agreement) of not more than 2.50 to 1.00 as tested quarterly on a trailing twelve-month basis, and to the extent the Term Loans still have a balance as of June 30, 2025 and a Cash Flow Leverage threshold (as defined in the Amended Credit Agreement) of at least 1.15 is not met, the Company will be required to make a prepayment on the Term Loans equal to 50 % of the Excess Cash Flow (as defined in the Amended Credit Agreement).

The Company was in compliance with all covenants as of March 31, 2025 and December 31, 2024.

The borrowings outstanding on the Term Loans were $ 12,000 and $ 13,125 as of March 31, 2025 and December 31, 2024, respectively.

There was no outstanding balance on the Line of Credit as of March 31, 2025 and December 31, 2024.

Maturities of the Company's Term Loans are as follows:

2025 (nine months)

Total balance outstanding as of March 31, 2025

and customary affirmative and negative covenants, including covenants to maintain a Fixed Charge Coverage Ratio (as defined in the Amended Prior Credit Agreement) of not less than 1.25 to 1.00 as tested quarterly on a trailing twelve-month basis, a Funded Debt to EBITDA Ratio (as defined in the Amended Prior Credit Agreement) of not more than 2.50 to 1.00 as tested quarterly on a trailing twelve-month basis, and to the extent the Term Loans still have a balance as of June 30, 2025 and a Cash Flow Leverage threshold (as defined in the Amended Prior Credit Agreement) of at least 1.15 is not met, the Company will be required to make a prepayment on the Term Loans equal to 50 % of the Excess Cash Flow (as defined in the Amended Prior Credit Agreement).

The Company was in compliance with all covenants as of June 30, 2025 and December 31, 2024.

The borrowings outstanding on the Term Loans were $ 10,875 and $ 13,125 as of June 30, 2025 and December 31, 2024, respectively.

There was no outstanding balance on the Line of Credit as of June 30, 2025 and December 31, 2024.

Subsequent to the end of the quarter, on August 8, 2025, the Company entered into a Loan and Security and Guarantee Agreement (“ Credit Agreement ”) with the bank, as further described in Note 10.

Subsequent Event to the condensed consolidated financial statements.

NOTE 7 - EQUITY

The Company is authorized to issue 120,000 shares of Common Stock, $ 0.01 par value per share, of which 9,383 and 9,210 shares of Common Stock were issued and outstanding as of March 31, 2025 and December 31, 2024, respectively.

The Company is authorized to issue 120,000 shares of Common Stock, $ 0.01 par value per share, of which 9,391 and 9,210 shares of Common Stock were issued and outstanding as of June 30, 2025 and December 31, 2024, respectively.

On February 7, 2025, the Company effected a 2 -for-1 stock split of its Common Stock and proportionately increased the number of authorized shares of Common Stock to 120,000 .

3 unchanged sentences

Share Repurchase Program

On March 17, 2023, the Board approved the extension of the Company’s previously authorized share repurchase program, initially approved by the Board on August 16, 2019, as amended on September 23, 2019, November 6, 2019 and February 1, 2021 (“ Share Repurchase Program ”).

On May 13, 2025, the Board approved the extension of the Company’s previously authorized share repurchase program, initially approved by the Board on August 16, 2019, as amended on September 23, 2019, November 6, 2019, February 1, 2021 and March 17, 2023 (“ Share Repurchase Program ”).

Under the extended and amended Share Repurchase Program, the Board authorized management to repurchase up to $ 5,000 of the Company's Common Stock over a period of 24 months, at a purchase price equal to the fair market value of the Company's Common Stock on the date of purchase, with the exact date and amount of such purchases to be determined by management (the “ 2025 Share Repurchase Program ”).

During the three months ended March 31, 2025 and 2024, the Company did not repurchase any Common Stock under the 2023 Share Repurchase Program.

As of March 31, 2025 , the Company may purchase $ 5,000 of Common Stock under the 2023 Share Repurchase Program.

Information regarding options outstanding as of March 31, 2025 is as follows:

Outstanding, December 31, 2023

During the six months ended June 30, 2025 and 2024, the Company did not repurchase any Common Stock under its share repurchase programs.

As of June 30, 2025 , the Company may purchase $ 5,000 of Common Stock under the 2025 Share Repurchase Program.

Information regarding options outstanding as of June 30, 2025 is as follows:

average exercise

remaining life

Outstanding, December 31, 2024

Outstanding, March 31, 2025

Outstanding, June 30, 2025

Exercise price

remaining life

2 unchanged sentences

exercise price

The closing stock price for the Company’s stock on March 31, 2025 was $ 12.10 , resulting in an intrinsic value of outstanding options of $ 6,812 .

During the three months ended March 31, 2025, 173 stock options were exercised pursuant to the terms of the option agreements.

As a result, the Company received cash proceeds of $ 638 , of which $ 259 was received in March 2025 and the remaining $ 379 was received in April 2025 and reported as part of Prepaid and Other Current Assets in the accompanying Balance Sheet.

During the three-month periods ended March 31, 2025 and 2024, the Company recognized stock-based compensation expense of $ 107 and $ 102 , respectively, related to stock options.

As of March 31, 2025, there is $ 334 of unamortized compensation expense related to stock options.

The closing stock price for the Company’s stock on June 30, 2025 was $ 13.02 , resulting in an intrinsic value of outstanding options of $ 7,475 .

During the three-month periods ended June 30, 2025 and 2024, the Company recognized stock-based compensation of $ 99 and $ 101 , respectively, related to stock options.

During the six-month periods ended June 30, 2025 and 2024, the Company recognized stock-based compensation of $ 206 and $ 203 , respectively, related to stock options.

As of June 30, 2025 there is $ 234 of unamortized stock-based compensation related to stock options.

NOTE 8 – COMMITMENTS AND CONTINGENCIES

We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations.

We currently are not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations.

There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of the Company or any of its subsidiaries, threatened against or affecting the Company, our Common Stock, any of our subsidiaries or of the Company’s or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

1 unchanged sentence

The Company operates and manages its business as one reportable operating segment dedicated to providing innovative and proprietary nutritional supplements and wellness products for health-conscious consumers.

The measure of segment assets is reported on the consolidated balance sheet as total assets.

The measure of segment assets is reported on the condensed consolidated balance sheet as total assets.

In addition, the Company manages its business activities on a consolidated basis.

1 unchanged sentence

The CODM uses net income as the sole measure of segment profit.

Significant segment expenses include cost of goods sold, advertising and marketing, merger and acquisition related and other expense, which are all presented on the consolidated statements of income and comprehensive income.

Significant segment expenses include cost of goods sold, advertising and marketing, merger and acquisition related and other expense, which are all presented on the condensed consolidated statements of income and comprehensive income.

Employee compensation and benefits is also a significant segment expense.

1 unchanged sentence

The following table presents the significant segment expenses and other segment items regularly reviewed by our CODM:

Three months ended March 31,

Three months ended June 30,

Six months ended June 30,

Cost of goods sold

6 unchanged sentences

The following table summarizes sales to customers by geographic regions:

Three months ended March 31,

Three months ended June 30,

Six months ended June 30,

United States

2 unchanged sentences

NOTE 10 – SUBSEQUENT EVENTS

Share Repurchase Program

On August 16, 2019, the Company approved a share repurchase program, pursuant to which the Board authorized management to repurchase up to $ 500,000 of the Company's Common Stock over the subsequent 24 months (the " Share Repurchase Program ").

The Share Repurchase Program was amended September 23, 2019 to increase the repurchase amount to $ 1,000,000 ;

further amended on November 6, 2019 to increase the repurchase amount to $ 2,500,000 over the subsequent 24 months;

further amended on February 1, 2021 to increase the repurchase amount to up to $ 5,000,000 over the subsequent 24 months;

and extended on March 17, 2023 to repurchase up to $ 5,000,000 of the Company's Common Stock over the subsequent 24 months.

On May 13, 2025, the Board approved a further extension of the Share Repurchase Program.

Under the extended and amended Share Repurchase Program, the Board authorized management to repurchase up to $ 5,000,000 of the Company's Common Stock over the subsequent 24 months, at a purchase price equal to the fair market value of the Company's Common Stock on the date of purchase, with the exact date and amount of such purchases to be determined by management.

Acquisition - Irwin Naturals

On August 8, 2025 (“ the Closing Date ”), the Company acquired substantially all of the assets of Irwin Naturals and its related affiliates (“ Irwin ”) through an asset purchase transaction under Section 363 of the US Bankruptcy Code.

The Company acquired substantially all of the assets and assumed certain liabilities of Irwin.

Total consideration for the acquisition before any post-closing adjustments was approximately $ 42,500 .

Of this amount, $ 29,750 was funded using proceeds from a new term loan provided by the Bank, $ 6,000 was funded from a new $ 10,000 revolving line-of-credit from the Bank, with the remainder funded from the Company’s available cash balances.

The Company is in the process of determining the fair value of the tangible and intangible assets of Irwin.

The Company is in the process of determining the appropriate accounting for this acquisition.

Loan Security and Guarantee Agreement – First Citizens Bank

On the Closing Date, the Company entered into the Credit Agreement with the Bank.

Pursuant to the Credit Agreement, the Bank provided the Company with a five-year term loan in the amount of $ 40,625 (“ Term Loan ”) and a three-year revolving line of credit of up to $ 10,000 (the “ Credit Line ”, and collectively with the Term Loan, the “ Loan ”).

The Company used $ 29,750 from the Term Loan to complete the purchase of substantially all of the assets of Irwin, and its related affiliates, pursuant to an Asset Purchase and Sale Agreement (“ APA ”), and $ 10,875 to pay off, retire and replace all existing debt of the Company as of the Closing Date.

Pursuant to the Credit Agreement, the Term Loan accrues interest at a per annum rate equal to 2.50 % to 3.00 %, based on leverage, above a forward-looking term rate, based on the secured overnight financing rate published by the Federal Reserve Bank of New York for the applicable selected interest period of one, three or six months (“ Term SOFR Rate ”, the Term SOFR Rate together with the aforementioned margin, the “ Applicable Rate ”), and the Company shall make payments of accrued interest on the Term Loan at the end of each interest period and shall make payments on March 31, June 30, September 30 and December 31, of each calendar year, commencing on December 31, 2025, of principal on the Term Loan in amounts equal to 3.75 % of the then-outstanding principal balance of the Term Loan for the first eight such payment dates and 5.00 % thereafter, in each case plus accrued interest, with all remaining principal and accrued interest on the Term Loan being due and payable in full on August 8, 2030;

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

The Credit Agreement contains customary events of default, which upon the occurrence of an Event of Default, among other things, interest will accrue at the Applicable Rate plus 2 % per annum, and the Bank may declare all Obligations (as defined in the Credit Agreement) immediately due and payable.

The Credit Agreement further contains customary representations and warranties of the Company, customary indemnification provisions whereby the Company will indemnify Bank for certain losses arising out of inaccuracies in, or breaches of, the representations, warranties and covenants of the Company, and certain other matters, and customary affirmative and negative covenants, including covenants to maintain a Senior Funded Debt to EBITDA Ratio (as defined in the Credit Agreement) of not more than 2.75 to 1.00 as tested quarterly on a trailing twelve-month basis, starting with the fiscal quarter ending December 31, 2025 and ending with the fiscal quarter ended June 30, 2026 and a Senior Funded Debt to EBITDA Ratio (as defined in the Credit Agreement) of not more than 2.50 to 1.00 as tested quarterly on a trailing twelve-month basis, starting with the fiscal quarter ending September 30, 2026, and to maintain a Fixed Charge Coverage Ratio (as defined in the Credit Agreement) of at least 1.25 to 1.00 as tested on the last day of each fiscal quarter, commencing with the quarter ending December 31, 2025.

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

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The Company’s common stock, par value $0.01 per share (“ Common Stock ”), trades under the symbol “FTLF” on the Nasdaq Capital Market.

Recent Acquisitions

Acquisition of Irwin Naturals

Subsequent to the end of the quarter, on August 8, 2025 (“ the Closing Date ”), the Company acquired substantially all of the assets of Irwin Naturals and its related affiliates (“ Irwin ”) through an asset purchase transaction under Section 363 of the US Bankruptcy Code.

The Company acquired substantially all of the assets and assumed certain liabilities of Irwin.

Total consideration for the acquisition before any post-closing adjustments was approximately $42,500 in cash.

Of this amount, $29,750 was funded using proceeds from a new term loan provided by the Bank, $6,000 was funded from a new $10,000 revolving line-of-credit from the Bank, with the remainder funded from the Company’s available cash balances.

Recent Developments

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Results of Operations

Comparison of the three months ended March 31, 2025 to the three months ended March 31, 2024

Comparison of the three months ended June 30, 2025 to the three months ended June 30, 2024

Three months ended

March 31, 2025

March 31, 2024

June 30, 2025

June 30, 2024

Cost of goods sold

Advertising and marketing

Selling, general and administrative (“S G&A ”)

general and administrative (“S G&A ”)

Merger and acquisition related

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Operating income

Other expense, net

Other expense (income), net

Provision for income tax

Revenue for the three months ended March 31, 2025 decreased 4% to $15,936 as compared to $16,549 for the three months ended March 31, 2024.

The decrease in revenue for the three months ended March 31, 2025 compared to the prior period is primarily due to lower MRC sales, partially offset by an increase in Legacy FitLife revenue.

Legacy FitLife revenue for the three months ended March 31, 2025 was $7,299, a 5% increase compared to $6,961 for the three months ended March 31, 2024, driven by an 11% increase in online revenue and a 2% increase in wholesale revenue..

MRC revenue for the three months ended March 31, 2025 was $6,674, an 11% decrease compared to $7,493 for the three months ended March 31, 2024.

MusclePharm revenue for the three months ended March 31, 2025 was $1,963, a 6% decrease compared to $2,095 for the three months ended March 31, 2024.

Online revenue for the quarter ended March 31, 2025 was approximately 67% of total net revenue, compared to 65% of total net revenue for the quarter ended March 31, 2024.

Revenue for the three months ended June 30, 2025 decreased 5% to $16,127 compared to $16,930 for the three months ended June 30, 2024.

The decrease in revenue for the three months ended June 30, 2025 compared to the prior period is primarily due to declining revenue from MRC, partially offset by an increase in Legacy FitLife revenue.

Legacy FitLife revenue for the three months ended June 30, 2025 was $7,303, a 7% increase compared to the previous year, primarily driven by a 17% increase in online revenue as well as a 1% increase in wholesale revenue.

MRC revenue for the three months ended June 30, 2025 was $6,269, a 16% decrease from the same period of last year due primarily to a drop in traffic to its product listing pages on Amazon.

During the three months ended June 30, 2025, MusclePharm generated revenue of $2,555, a 4% decrease compared to the same quarter last year, with small decreases in both online and wholesale revenue.

Online revenue during the quarter ended June 30, 2025 was approximately 65% of net revenue, compared to 35% for wholesale channels for the same period.

Online revenue during the quarter ended June 30, 2024 was 66% of net revenue compared to 34% for wholesale channels during the same period.

Sales to customers in the U.S.

were approximately 96% during the quarters ended March 31, 2025 and 2024, respectively, with the balance of sales to customers primarily in Canada.

were approximately 96% during the quarters ended June 30, 2025 and 2024, with the balance of sales to customers primarily in Canada.

Cost of Goods Sold.

Cost of goods sold for the three months ended March 31, 2025 decreased to $9,062 as compared to $9,262 for the three months ended March 31, 2024.

This 2% decrease is primarily due to a decrease in revenue attributable to MRC.

Cost of goods sold for the three months ended June 30, 2025 decreased to $9,223 as compared to $9,350 for the three months ended June 30, 2024.

This 1% decrease is primarily due to the decrease in revenue.

Gross Profit.

Gross profit for the three months ended March 31, 2025 decreased to $6,874 as compared to $7,287 for the three months ended March 31, 2024.

This 6% decrease in gross profit is principally attributable to lower gross profit from MRC and MusclePharm, partially offset by an increase from Legacy FitLife.

Gross profit for the three months ended June 30, 2025 decreased to $6,904 as compared to $7,850 for the three months ended June 30, 2024.

The decrease in gross profit is principally attributable to lower gross profit from MRC and MusclePharm, partially offset by a 6% increase in gross profit from Legacy FitLife.

Gross Margin .

Gross margin for the three months ended March 31, 2025 decreased to 43.1% from 44.0% for the comparable prior period.

The decrease in gross margin is primarily attributable to lower margins from both MRC and MusclePharm, partially offset by higher margins from Legacy FitLife.

Gross margin for the three months ended June 30, 2025 decreased to 42.8% from 44.8% for the comparable prior period.

The decrease in gross margin is primarily attributable due to product mix, continued MusclePharm promotional investment, and the impact of tariffs on the Company’s skin care products being sold in Canada.

Advertising and M arketing.

Advertising and marketing expense for the three months ended June 30, 2025 decreased to $1,191 as compared to $1,326 for the same period of the prior year.

The 10% decrease is the result of targeted efforts to rationalize the Company’s advertising spend on less effective advertising campaigns.

SG&A expense for the three months ended June 30, 2025 decreased 2% to $2,485 as compared to $2,528 for the three months ended June 30, 2024.

Merger and Acquisition Related.

Merger and acquisition related expense increased to $696 during the quarter ended June 30, 2025 compared to $24 for the same period in 2024, driven by transaction costs related to the Irwin acquisition.

We generated net income of $1,747 for the three months ended June 30, 2025 as compared to net income of $2,628 for the three months ended June 30, 2024.

The decrease in net income for the three months ended June 30, 2025 compared to the same period in 2024 was primarily attributable to lower revenue and gross profit as well as an increase in merger and acquisition related expense.

Comparison of the six months ended June 30, 2025 to the six months ended June 30, 2024

Six months ended

June 30, 2025

June 30, 2024

Cost of goods sold

Advertising and marketing

Advertising and marketing expense for the three months ended March 31, 2025 decreased to $1,053 as compared to $1,228 for the same period of the prior year.

The 14% decrease is the result of targeted efforts to optimize the efficiency of the Company’s advertising spend.

SG&A expense for the three months ended March 31, 2025 was essentially flat relative to the same period of 2024.

Selling, general and administrative (“S G&A ”)

Merger and acquisition related

Merger and acquisition related expense increased to $332 during the quarter ended March 31, 2025 compared to $134 for the same period of 2024.

We generated net income of $2,018 for the three months ended March 31, 2025 as compared to net income of $2,160 for the three months ended March 31, 2024.

The decrease in net income for the three months ended March 31, 2025 compared to the same period in 2024 was primarily attributable to lower revenue and gross profit from MRC and MusclePharm, partially offset by higher revenue and gross profit from Legacy FitLife, as well as a decrease in operating expense driven by lower advertising spend and lower interest expense due to the lower debt balances carried by the Company.

Depreciation and amortization

Total operating expense

Operating income

Other expense, net

Provision for income tax

Revenue for the six months ended June 30, 2025 decreased 4% to $32,063 as compared to $33,479 for the six months ended June 30, 2024.

The decrease in revenue for the six months ended June 30, 2025 compared to the prior period is primarily due to lower MRC sales, partially offset by an increase in Legacy FitLife revenue.

Legacy FitLife revenue for the six months ended June 30, 2025 was $14,602, a 6% increase compared to the previous year, driven by a 14% increase in online revenue as well as a 2% increase in wholesale revenue.

MRC revenue for the six months ended June 30, 2025 was $12,943, a 13% decrease compared to the same period of last year, driven by a 13% decrease in online sales.

MusclePharm revenue for the six months ended June 30, 2025 was $4,518, a 5% decrease compared to the same period of last year, driven by a 21% decrease in wholesale revenue, partially offset by a 13% increase in online revenue.

Online revenue and wholesale revenue for the six months ended June 30, 2025 and 2024, remained the same at approximately 66% and 34% of total net revenue, respectively.

Sales to customers in the U.S.

were approximately 96% during the six months ended June 30, 2025 and 2024, with the balance of sales to customers primarily in Canada.

Cost of Goods Sold.

Cost of goods sold for the six months ended June 30, 2025 decreased to $18,285 as compared to $18,612 for the six months ended June 30, 2024.

This 2% decrease is primarily due to the decrease in revenue.

Gross Profit.

Gross profit for the six months ended June 30, 2025 decreased to $13,778 as compared to $14,867 for the six months ended June 30, 2024.

The decrease in gross profit is principally attributable to lower gross profit from MRC and MusclePharm, partially offset by higher gross profit from Legacy FitLife.

Gross Margin .

Gross margin for the six months ended June 30, 2025 decreased to 43.0% from 44.4% for the comparable prior period.

The decrease in gross margin is primarily attributable to lower margins from both MRC, in part due to tariffs and changing product mix, and MusclePharm, partially offset by higher margins from Legacy FitLife.

Advertising and M arketing.

Advertising and marketing expense for the six months ended June 30, 2025 decreased to $2,244 as compared to $2,554 for the same period of the prior year.

The 12% decrease is primarily the result of targeted efforts to rationalize the Company’s advertising spend on less effective advertising campaigns.

SG&A expense for the six months ended June 30, 2025 decreased to $4,997 as compared to $5,036 for the six months ended June 30, 2024.

Merger and A cquisition R elated.

Merger and acquisition related expense increased to $1,028 during the six months ended June 30, 2025 compared to $158 for the same period of 2024, driven primarily by transaction costs related to the Irwin acquisition during the first six months of 2025.

We generated net income of $3,765 for the six months ended June 30, 2025 as compared to net income of $4,788 for the six months ended June 30, 2024.

The decrease in net income for the six months ended June 30, 2025 compared to the same period in 2024 was primarily attributable to lower revenue and gross profit for MRC and an increase in acquisition-related expense due to the Irwin acquisition.

Supplemental Discussion of Performance of Acquired Brands

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With limited exceptions, other operating expenses incurred by the Company are generally not allocable to a specific brand or collection of brands.

Management intends to provide this level of disclosure for no more than two years following a transaction, after which the performance of acquired brands will be reported as part of Legacy FitLife results.

Management intends to provide this level of disclosure for approximately two years following a transaction, after which the performance of acquired brands will be reported as part of Legacy FitLife results.

Other than for MusclePharm, the numbers in the contribution tables presented below represent the performance of a collection of brands.

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Contribution as a % of revenue

For the first quarter of 2025, Legacy FitLife revenue increased 5% compared to the same period last year, driven by an 11% increase in online revenue and a 2% increase in wholesale revenue compared to the first quarter of 2024.

For the second quarter of 2025, Legacy FitLife revenue increased 7% compared to the same period last year, driven by a 17% increase in online revenue as well as a 1% increase in wholesale revenue.

As previously disclosed, during the fourth quarter of 2024, a commercial dispute with GNC, the Company’s largest customer, resulted in the Company rejecting all purchase orders from GNC beginning on December 1, 2024.

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Subsequent to the distribution centers being restocked during February 2025, in the event GNC distribution centers do not have adequate inventory to fulfill franchisee orders of the Company’s products, the Company may make shipments directly to GNC franchisees in order to ensure continued availability of the Company’s products on store shelves.

For the first quarter of 2025, gross margin increased to 44.6% from 42.1% during the same period last year.

Contribution as a percentage of revenue increased to 43.4% from 40.9% over the same time period.

For the second quarter of 2025, gross margin decreased to 43.8% from 44.2% during the same period last year.

Contribution as a percentage of revenue decreased to 42.0% from 42.8% over the same time period.

Mimi's Rock (MRC)

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Contribution as a % of revenue

For the first quarter of 2025, MRC revenue decreased 11% compared to the same period in 2024.

For the second quarter of 2025, MRC revenue decreased 16% compared to the same period in 2024.

Over the same time period, gross profit decreased 19% and contribution decreased 17%.

For the first quarter of 2025, MRC gross margin decreased to 45.4% from 47.0% during the same period last year.

For the second quarter of 2025, gross margin decreased to 46.5% from 48.2% during the same period last year, primarily due product mix and the impact of tariffs on certain of the Company’s skin care products.

Revenue for the largest MRC brand, Dr.

Tobias, decreased 11% in the first quarter of 2025 while revenue for the skin care brands, Maritime Naturals and All Natural Advice, declined 14%, or 9% on a constant currency basis, in the same period compared to the first quarter of 2024.

The decrease in gross profit for the MRC brands is primarily the result of lower sales.

The decrease in gross margin is primarily driven by the change in product mix within the Dr.

Tobias brand.

The year-over-year increase in contribution as a percentage of revenue for the MRC brands is a function of the optimization of the advertising spend across all MRC brands.

Tobias, decreased 16% in the second quarter of 2025 while revenue for the skin care brands, Maritime Naturals and All Natural Advice, declined 20% in the same period compared to the second quarter of 2024.

The decrease in gross profit for the MRC brands is primarily due to lower revenue.

The decrease in gross margin is primarily driven by changes in product mix within the Dr.

Tobais brand and tariffs affecting the skin care brands.

The year-over-year decrease in contribution as a percentage of revenue for the MRC brands is primarily due to lower gross profit, partially offset by reduced advertising spend.

Wholesale revenue

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Contribution as a % of revenue

For the first quarter of 2025, MusclePharm revenue decreased 6% compared to the same period in 2024, with wholesale revenue decreasing 41% and online revenue increasing 33%.

For the second quarter of 2025, MusclePharm revenue decreased 4% compared to the same period in 2024, with wholesale revenue decreasing 6% and online revenue decreasing 3%.

As previously disclosed, in an effort to drive revenue growth, the Company is making targeted investments in advertising and promotion in both the wholesale and online channels.

During the fourth quarter of 2024, the Company offered additional promotional incentives to certain wholesale partners in an effort to drive incremental growth for the MusclePharm brand.

The decrease in wholesale revenue during the first quarter was primarily due to one of our wholesale customers that took advantage of the Company’s promotional investment during the fourth quarter of 2024 without increasing their sell-through of the product, which has affected their reorder volumes.

Beginning in the fourth quarter of 2024, the Company offered additional promotional incentives to certain wholesale partners in an effort to drive incremental growth for the MusclePharm brand.

The decrease in wholesale revenue that occurred during the first quarter was primarily due to one of our wholesale customers that took advantage of the Company’s promotional investment during the fourth quarter of 2024 without increasing their sell-through of the product, which affected their reorder volumes during the first quarter of 2025.

The Company anticipates that the increased promotional efforts will continue for the foreseeable future.

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In mid-March 2025, the Company launched the new MusclePharm Pro Series, a collection of premium sports nutrition products, in a pilot in high-volume Vitamin Shoppe stores (consisting of approximately 60% of Vitamin Shoppe’s nationwide store base).

If the pilot effort is successful, the Pro Series is anticipated to be added to the assortment in all Vitamin Shoppe stores and will be exclusive to Vitamin Shoppe for a period of 12 months.

In addition, the Company is exploring additional new product launches and continues to have productive discussions with a number of potential new wholesale partners.

Following the pilot, some of the MusclePharm Pro Series products will continue to be sold in Vitamin Shoppe, while others will be discontinued.

The Company has begun selling the MusclePharm Pro Series products online as well as through international wholesale partners.

FitLife Consolidated

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Contribution as a % of revenue

For the first quarter of 2025 for the Company overall, revenue decreased 4%, gross profit decreased 6%, and contribution decreased 4% compared to the first quarter of 2024.

Gross margin decreased to 43.1% during the first quarter of 2025 compared to 44.0% during the first quarter of last year.

Contribution as a percentage of revenue decreased slightly to 36.5% compared to 36.6% during the first quarter of last year

For the second quarter of 2025 for the Company overall, revenue decreased 5%, gross profit decreased 9%, and contribution decreased 9% compared to the second quarter of 2024.

Gross margin decreased to 42.8% during the second quarter of 2025 compared to 44.8% during the second quarter of last year.

Contribution as a percentage of revenue decreased to 35.4% compared to 36.9% during the first quarter of last year

Non-GAAP Measures

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The Company believes that the inclusion of non-GAAP measures in the financial presentation below allows investors to compare the Company’s financial results with the Company’s historical financial results and is an important measure of the Company’s comparative financial performance.

For the three months ended March 31,

For the three months ended June 30,

For the six months ended June 30,

Interest expense

Interest income

Foreign exchange loss

Foreign exchange (gain) loss

Provision for income taxes

1 unchanged sentence

Non-cash and non-recurring adjustments

Stock compensation expense

Merger and acquisition related expense

Stock-based compensation

Merger and acquisition related

Adjusted EBITDA

Liquidity and Capital Resources

As of March 31, 2025, the Company had positive working capital of $8,463 compared to $6,832 at December 31, 2024.

Our principal sources of liquidity at March 31, 2025 consisted of $5,994 of cash and $2,693 of accounts receivable.

The increase in working capital is principally attributable to positive operating cash flows during the three months ended March 31, 2025.

As of June 30, 2025, the Company had positive working capital of $9,209, compared to $6,832 at December 31, 2024.

Our principal sources of liquidity at June 30, 2025 consisted of $1,585 of cash and $2,488 of accounts receivable.

The increase in working capital is principally attributable to positive operating cash flows during the six months ended June 30, 2025.

On September 24, 2019, the Company entered into a line of credit agreement with Mutual of Omaha Bank (the “ Lender ”), subsequently acquired by CIT Bank N.A., then acquired by First Citizens Bank & Trust Company, providing the Company with a $2.5 million revolving line of credit (the “ Line of Credit ”).

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

On February 23, 2023, the Company and the Lender amended the Line of Credit Agreement (the “ Prior Credit Agreement ”) providing the Company with a term loan for the principal amount of $12.5 million (“ Term Loan A ”).

On February 23, 2023, the Company and the Lender amended the Line of Credit Agreement (the “ 2023 Credit Agreement ”) providing the Company with a term loan for the principal amount of $12.5 million (“ Term Loan A ”).

All other terms of the Credit Agreement remain unchanged.

All of the proceeds from Term Loan A were used for the acquisition of MRC.

On October 10, 2023, the Company entered into a Second Amended and Restated Credit Agreement (the “ Credit Agreement ”) with the Lender, amending and restating the Credit Agreement between the Company and the Lender.

Pursuant to the Credit Agreement, the Lender provided the Company with an additional term loan (“ Term Loan B ”, and together with Term Loan A, the “ Term Loans ”) for the principal amount of $10,000 and extended the Line of Credit of $3.5 million to December 23, 2024.

On October 10, 2023, the Company entered into a Second Amended and Restated Credit Agreement (the “ Prior Credit Agreement ”) with the Lender, amending and restating the 2023 Credit Agreement between the Company and the Lender.

Pursuant to the Prior Credit Agreement, the Lender provided the Company with an additional term loan (“ Term Loan B ”, and together with Term Loan A, the “ Term Loans ”) for the principal amount of $10,000 and extended the Line of Credit of $3.5 million to December 23, 2024.

The Company used the proceeds from Term Loan B to fund the acquisition of the MusclePharm assets.

On December 19, 2024, the Company entered into the First Amendment to the Amended Credit Agreement (the “ Amended Credit Agreement ”) to extend the $3.5 million Line of Credit to April 30, 2026.

Pursuant to the Amended Credit Agreement, the Line of Credit accrues interest at an annual rate equal to the greater of 3.50% or the one-month secured overnight financing rate (“ SOFR ”) rate plus 2.75%, and each advance will be payable on the maturity date with the interest on outstanding advances payable monthly.

On December 19, 2024, the Company entered into the First Amendment to the Amended Credit Agreement (the “ Amended Prior Credit Agreement ”) to extend the $3.5 million Line of Credit to April 30, 2026.

Pursuant to the Amended Prior Credit Agreement, the Line of Credit accrues interest at an annual rate equal to the greater of 3.50% or the one-month secured overnight financing rate (“ SOFR ”) rate plus 2.75%, and each advance will be payable on the maturity date with the interest on outstanding advances payable monthly.

The Company may, at its option, prepay any borrowings under the Line of Credit, in whole or in part at any time prior to the maturity date, without premium or penalty.

Also pursuant to the Amended Credit Agreement, the Term Loans accrue interest at an annual rate equal to the greater of 3.50% or the one-month SOFR rate plus 2.75%, and principal plus accrued interest will be payable quarterly in June, September, December, and March, in amounts sufficient to fully amortize the Term Loans through February 28, 2028 in the case of Term Loan A and through October 10, 2028 in the case of Term Loan B.

The Company may prepay amounts borrowed under the Term Loans, in whole or in part with accrued interest to the date of such prepayment on the amount prepaid, by written notice to the Lender at least one business day prior to the proposed prepayment.

The Amended Credit Agreement contains customary events of default (each an “ Event of Default ”), which upon the occurrence of an Event of Default, as defined in the Amended Credit Agreement, among other things, interest will accrue at the applicable rate plus 2% per annum, and the Lender may declare all obligations, with interest thereon, immediately due and payable.

The Amended Credit Agreement further contains customary representations and warranties of the Company;

customary indemnification provisions whereby the Company will indemnify Lender for certain losses arising out of inaccuracies in, or breaches of, the representations, warranties and covenants of the Company, and certain other matters;

and customary affirmative and negative covenants, including covenants to maintain a Fixed Charge Coverage Ratio (as defined in the Amended Credit Agreement) of not less than 1.25 to 1.00 as tested quarterly on a trailing twelve-month basis, starting with the fiscal quarter ending December 31, 2023, a Funded Debt to EBITDA Ratio (as defined in the Amended Credit Agreement) of not more than 2.50 to 1.00 as tested quarterly on a trailing twelve-month basis, starting with the fiscal quarter ending March 31, 2024, and to the extent the Term Loans still have a balance as of June 30, 2025 and a Cash Flow Leverage threshold (as defined in the Amended Credit Agreement) of at least 1.15 is not met, the Company will be required to make a prepayment on the Term Loans equal to 50% of the Excess Cash Flow (as defined in the Amended Credit Agreement).

The Company was in compliance with all covenants as of March 31, 2025.

As of March 31, 2025, the borrowings outstanding on the Term Loans and the Line of Credit were $12,000 and $0, respectively.

On August 8, 2025 (the “ Closing Date ”), the Company entered into the Credit Agreement with First-Citizens Bank & Trust Company (the “ Bank ”).

Pursuant to the Credit Agreement, the Bank provided the Company with a five-year term loan in the amount of $40,625 (“ Term Loan ”) and a three-year revolving line of credit of up to $10,000 (the “ Credit Line ”, and collectively with the Term Loan, the “ Loan ”).

The Company used $29,750 from the Term Loan to complete the purchase of substantially all of the assets of Irwin, and its related affiliates, pursuant to an Asset Purchase and Sale Agreement (“ APA ”), and $10,875 to pay off, retire and replace all existing debt of the Company as of the Closing Date.

Pursuant to the Credit Agreement, the Term Loan accrues interest at a per annum rate equal to 2.50% to 3.00%, based on leverage, above a forward-looking term rate, based on the secured overnight financing rate published by the Federal Reserve Bank of New York for the applicable selected interest period of one, three or six months (“ Term SOFR Rate ”), the Term SOFR Rate together with the aforementioned margin, the “ Applicable Rate ”), and the Company shall make payments of accrued interest on the Term Loan at the end of each interest period and shall make payments on March 31, June 30, September 30 and December 31, of each calendar year, commencing on December 31, 2025, of principal on the Term Loan in amounts equal to 3.75% of the then-outstanding principal balance of the Term Loan for the first eight such payment dates and 5.00% thereafter, in each case plus accrued interest, with all remaining principal and accrued interest on the Term Loan being due and payable in full on August 8, 2030;

The Credit Agreement contains customary events of default, which upon the occurrence of an Event of Default, among other things, interest will accrue at the Applicable Rate plus 2% per annum, and the Bank may declare all Obligations (as defined in the Credit Agreement) immediately due and payable.

The Credit Agreement further contains customary representations and warranties of the Company;

customary indemnification provisions whereby the Company will indemnify Bank for certain losses arising out of inaccuracies in, or breaches of, the representations, warranties and covenants of the Company, and certain other matters, and customary affirmative and negative covenants, including covenants to maintain a Senior Funded Debt to EBITDA Ratio (as defined in the Credit Agreement) of not more than 2.75 to 1.00 as tested quarterly on a trailing twelve-month basis, starting with the fiscal quarter ending December 31, 2025 and ending with the fiscal quarter ended June 30, 2026 and a Senior Funded Debt to EBITDA Ratio (as defined in the Credit Agreement) of not more than 2.50 to 1.00 as tested quarterly on a trailing twelve-month basis, starting with the fiscal quarter ending September 30, 2026, and to maintain a Fixed Charge Coverage Ratio (as defined in the Credit Agreement) of at least 1.25 to 1.00 as tested on the last day of each fiscal quarter, commencing with the quarter ending December 31, 2025.

As of June 30, 2025, the borrowings outstanding on the Term Loans and the Line of Credit were $10,875 and $0, respectively.

The Company has historically financed its operations primarily through cash flow from operations and equity and debt financings.

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Cash Provided by Operating Activities.

Cash provided by operating activities for the three months ended March 31, 2025 was $2,328 compared to cash provided by operating activities of $5,036 for the three months ended March 31, 2024.

The decrease in cash provided by operating activities was primarily due to increases in working capital.

Cash provided by operating activities for the six months ended June 30, 2025 was $3,523 compared to cash provided by operating activities of $6,606 for the six months ended June 30, 2024.

The decrease in cash provided by operating activities was primarily due to increased use of cash in working capital and lower net income compared to the same period of 2024.

Cash Used in Investing Activities.

Cash used in investing activities for the three months ended March 31, 2025 and 2024 was $24 and $10, respectively.

Cash used in investing activities for the six months ended June 30, 2025 and 2024 was $5,029 and $10, respectively.

The increase in cash used in investing activities was primarily due to a $5,000 deposit the Company paid for the Irwin acquisition.

Cash Used in Financing Activities.

Cash used in financing activities for the three months ended March 31, 2025 was $866 compared to cash used in financing activities of $3,625 during the three months ended March 31, 2024.

The decrease in cash used in financing activities is primarily due to the voluntary debt repayment made by the Company during the first quarter of 2024.

Cash used in financing activities for the six months ended June 30, 2025 was $1,568 compared to cash used in financing activities of $4,750 during the six months ended June 30, 2024.

The decrease in cash used in financing activities was primarily due to the voluntary debt repayment made by the Company during the first quarter of 2024.

Critical Accounting Policies and Estimates

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Actual results could differ from those estimates.

Goodwill and Intangibles

In accordance with FASB ASC 350 , Intangibles-Goodwill and Other , we review goodwill and indefinite lived intangible assets for impairment at least annually or whenever events or circumstances indicate a potential impairment.

2 unchanged sentences

If the fair value of a reporting unit is determined to be less than the carrying value of its net assets, goodwill is deemed impaired and an impairment loss is recognized to the extent that the carrying value of goodwill exceeds the difference between the fair value of the reporting unit and the fair value of its other assets and liabilities.

Management concluded that a triggering event did not occur during the three months ended March 31, 2025.

Management concluded that a triggering event did not occur during the six months ended June 30, 2025.

We will continue to review for impairment indicators as necessary in future periods.

9 unchanged sentences

The Company’s products are also sold on e-commerce platforms including Amazon.

The Company records distribution and platform fees to cost of goods sold in the condensed consolidated statements of income and comprehensive income.

For these transactions, the Company evaluated principal versus agent considerations to determine appropriateness of recording platform fees paid to Amazon as an expense or as a reduction of revenue.

The Company records platform fees paid to Amazon for distribution of Company products to cost of goods sold in the condensed consolidated statements of income and comprehensive income.

Distribution and platform fees are not recorded as a reduction of revenue because the Company (1) owns the goods before they are transferred to the customer, (2) can direct Amazon, similar to other third-party logistics providers (“ Logistic Providers ”), to return the Company’s inventory to any location specified by the Company, (3) has the responsibility to make customers whole following any returns made by customers directly to Logistic Providers and the Company retains the back-end inventory risk, (4) is subject to credit risk (i.e., credit card chargebacks), (5) establishes prices of its products, (6) can determine who fulfills the goods to the customer (Amazon or the Company) and (7) can limit quantities or stop selling the goods at any time.

Based on these considerations, the Company is the principal in this arrangement.

2 unchanged sentences

Online revenue during the three months ended March 31, 2025 was approximately 67% of total revenue, compared to 65% for the three months ended March 31, 2024.

Online revenue during the quarter ended June 30, 2025 was approximately 65% of net revenue, compared to 35% for wholesale channels for the same period.

Online revenue during the quarter ended June 30, 2024 was 66% of net revenue compared to 34% for wholesale channels during the same period in 2024.

Online revenue during the six months ended June 30, 2025 and 2024 was approximately 66% of net revenue, compared to 34% for wholesale channels for the same periods.

Sales to customers in the U.S.

were approximately 96% during the three months ended March 31, 2025 and 2024, respectively, with the balance of sales for the same respective periods being to customers primarily in Canada.

were approximately 96% during the three and six months ended June 30, 2025 and 2024, with the balance of sales for the same respective periods being to customers primarily in Canada.

Control of products we sell transfers to customers upon shipment from our facilities or delivery to our customers, and the Company’s performance obligations are satisfied at that time.

10 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements