What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-08-05 compared with 2026-05-06 · 249 added, 139 removed, 394 unchanged (50% of the section changed)

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integrated care platform.

of March 31, 2026, LifeMD served over 365,000 active patient subscribers across a range of healthcare needs, including primary care,

men’s and women’s health, hormone health, weight management, insomnia, dermatology and cardiology.

We provide virtual clinical

services as well as prescription and over-the-counter (“OTC”) treatments, when medically appropriate.

of June 30, 2026, LifeMD served approximately 356,000 active patient subscribers across a range of healthcare needs, including primary

care, men’s and women’s health, hormone health, weight management, insomnia, dermatology and cardiology.

We provide virtual

clinical services as well as prescription and over-the-counter (“OTC”) treatments, when medically appropriate.

virtual primary care services are primarily offered through a subscription model.

Since inception, we have served approximately 1,492,000

Since inception, we have served more than 1,552,000

patients and customers, expanding access to convenient, and high-quality healthcare.

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care for medically qualified patients.

As of March 31, 2026, our network covered approximately 112 million lives, including approximately

30 million Medicare Fee-for-Service beneficiaries.

By June 1, 2026, we expect to expand coverage to approximately 230 million lives,

representing approximately 80% of commercially insured lives in the U.S., 70% of Medicare Advantage beneficiaries, and Medicare Fee-for-Service

beneficiaries.

As of June 30, 2026, our network covers approximately 175 million lives including commercially

insured lives, Medicare Advantage beneficiaries, and Medicare Fee-for-Service beneficiaries.

Provider Network

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operate three consumer healthcare brands focused on largely unaddressed or underserved healthcare needs.

LifeMD brand is our flagship virtual primary care and specialty platform, having served over 514,000 customers and patients to date.

LifeMD brand is our flagship virtual primary care and specialty platform, having served approximately 559,000 customers and patients

This brand provides patients with access to affiliated high-quality providers for their urgent care and chronic care needs.

brand is a mobile-first full-service destination that provides seamless access to comprehensive virtual medical care including on-demand

consultations and treatment, prescription medications, diagnostics and imaging, wellness coaching, integration with in-home tools and

This offering is also supported by partnerships that provide our patients with benefits such as substantial discounts on lab work

and direct integrations and collaborations with pharmaceutical manufacturers that offer patients convenient and affordable access to

important medications.

The LifeMD brand addresses high-growth and historically underserved healthcare verticals through defined specialty

care programs as noted below.

The LifeMD brand is a mobile-first full-service destination that provides seamless access to comprehensive virtual medical care including

on-demand consultations and treatment, prescription medications, diagnostics and imaging, wellness coaching, integration with in-home

tools and more.

This offering is also supported by partnerships that provide our patients with benefits such as substantial discounts

on lab work and direct integrations and collaborations with pharmaceutical manufacturers that offer patients convenient and affordable

access to important medications.

The LifeMD brand addresses high-growth and historically underserved healthcare verticals through defined

specialty care programs as noted below.

Weight Management Program, launched in April 2023 with a focus on GLP-1 medications, provides primary care, metabolic coaching, lab work

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Since inception, our Weight

Management Program has grown exponentially to over 98,000 patient subscribers as of March 31, 2026.

Management Program has grown exponentially to approximately 108,000 patient subscribers as of June 30, 2026.

part of our commitment to increasing access to branded prescription GLP-1 medications, we have developed an electronic benefits verification

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to address the unmet needs of healthcare product companies as they relate to digital patient awareness, access to care, adherence, and

June 22, 2026, the Company announced a strategic co-marketing collaboration supporting a

direct-to-patient self-pay program for XYOSTED® (testosterone enanthate) injection, the

only FDA-approved once-weekly subcutaneous testosterone auto-injector.

The program launched

in July 2026 and is initially available in 37 states.

Company entered into a Master Services Agreement and Statement of Work, as well as Specialty Pharmacy Services Agreements, with Antares

Pharma, Inc., a subsidiary of Halozyme, Inc., in furtherance of the strategic co-marketing collaboration.

Under these agreements,

the Company will serve as the exclusive telehealth co-marketing partner for the XYOSTED self-pay program.

The Company and Antares

each co-fund fifty percent of all marketing spend covering the services as set forth in the agreements.

Patients accessing

the program will be evaluated by licensed clinicians through the Company’s affiliated medical group, and the Company’s

pharmacy will serve as the preferred dispensing pharmacy for the program, shipping XYOSTED directly to patients’ homes.

parties will collaborate on, and jointly invest in, consumer education and promotional initiatives designed to expand awareness of

testosterone deficiency and of the program itself.

executed its integration with LillyDirect’s (“Lilly”) pharmacy provider, Gifthealth, to provide eligible patients

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Information presented in the tables

below for the three months ended March 31, 2025 has been revised to reflect these corrections.

below for the three and six months ended June 30, 2025 has been revised to reflect these corrections.

See Note 3—Revisions to Previously

Issued Financial Statements for more details.

financial results for the three months ended March 31, 2026 are summarized as follows in comparison to the three months ended March 31,

March 31, 2026

March 31, 2025

of the Three Months Ended June 30, 2026 to the Three Months Ended June 30, 2025

financial results for the three months ended June 30, 2026 are summarized as follows in comparison to the three months ended June 30,

Telehealth revenue, net

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Development costs

Total expenses

Operating loss from continuing operations

Interest income (expense), net

Loss from continuing operations before income taxes

Interest income (expense),

Loss from continuing operations before income

Income tax provision

Net loss from continuing operations

Net income from discontinued operations

Net (loss) income

Net income attributable to non-controlling interest of discontinued operations

Net income from discontinued

income attributable to non-controlling interest of discontinued operations

Net loss attributable to LifeMD, Inc.

Preferred stock dividends

Net loss attributable to common stockholders

Net loss attributable

to common stockholders

$ (7,860,503 )

$ (2,396,226 )

revenue, net.

Telehealth revenues for the three months ended March 31, 2026 decreased by approximately 1% to approximately $50.2 million

compared to approximately $50.9 million for the three months ended March 31, 2025.

The decrease in revenues was attributable to a decrease

in telehealth product revenue of approximately $1.0 million due to a decrease in online sales demand partially offset by an increase

in telehealth subscription revenue which experienced an increase of approximately $280 thousand during the three months ended March 31,

2026 compared to the three months ended March 31, 2025 primarily due to an increase in online sales demand.

Revenues for the three months ended June 30, 2026 were approximately $47.3 million, a decrease of 4% compared to approximately

$49.0 million for the three months ended June 30, 2025.

The decrease in revenues was attributable to a decrease in telehealth product

revenue of approximately $2.0 million during the three months ended June 30, 2026 compared to the three months ended June 30, 2025 primarily

due to a decrease in online sales demand.

of telehealth revenue.

Cost of telehealth revenue, which primarily include product costs, pharmacy fulfilment costs, physician consult

Cost of telehealth revenue, which primarily includes product costs, pharmacy fulfilment costs, physician consult

fees, and shipping costs directly attributable to our prescription and OTC products decreased by approximately 23% to approximately $5.3

million for the three months ended March 31, 2026 compared to approximately $8.1 million for the three months ended March 31, 2025.

million for the three months ended June 30, 2026 compared to approximately $6.8 million for the three months ended June 30, 2025.

cost of telehealth revenue decrease was due to product mix, decreased telehealth product sales volume and decreased shipping costs during

the three months ended March 31, 2026 when compared to the three months ended March 31, 2025.

Telehealth costs were 12% of associated

telehealth revenues during the three months ended March 31, 2026 compared to 16% of associated telehealth revenues during the three months

ended March 31, 2025.

Gross profit increased by 3% to approximately $44.2 million for the three months ended March 31, 2026 compared to approximately

$42.8 million for the three months ended March 31, 2025.

the three months ended June 30, 2026 when compared to the three months ended June 30, 2025.

Telehealth costs were 11% of associated telehealth

revenues during the three months ended June 30, 2026 compared to 14% of associated telehealth revenues during the three months ended

June 30, 2025.

Gross profit decreased by 0.4% to approximately $42.0 million for the three months ended June 30, 2026 compared to approximately

$42.2 million for the three months ended June 30, 2025.

Gross profit as a percentage of revenues was approximately 89% for the three

months ended March 31, 2026 as compared to approximately 84% for the three months ended March 31, 2025.

The increase in gross profit

as a percentage of revenues was primarily due to product mix and decreased shipping costs on telehealth product revenues in the three

months ended March 31, 2026.

Operating expenses for the three months ended March 31, 2026 were approximately $53.2 million, as compared to approximately

$43.9 million for the three months ended March 31, 2025.

months ended June 30, 2026 as compared to approximately 86% for the three months ended June 30, 2025.

The increase in gross profit as

a percentage of revenues was primarily due to product mix and decreased shipping costs on telehealth product revenues in the three months

ended June 30, 2026.

Operating expenses for the three months ended June 30, 2026 were approximately $49.1 million, as compared to approximately

$44.5 million for the three months ended June 30, 2025.

This represents an increase of 10%, or approximately $4.6 million.

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This mainly consists of online marketing and advertising expenses.

During the three months ended March 31,

During the three months ended June 30,

2026, the Company had an increase of approximately $5.9 million, or 27%, in selling and marketing costs resulting from additional

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based on the Company’s recurring revenue subscription-based sales model.

operating expenses:

This consists of rent and lease expense, insurance, office supplies and software subscriptions, royalty expense

and bank charges.

During the three months ended June 30, 2026, the Company had an increase of approximately $157 thousand, or 5%,

primarily related to increases in travel expenses, information technology and cybersecurity expenses and depreciation expense partially

offset by a reduction in software subscriptions.

above increases in operating expenses were partially offset by the following decreases in operating expenses:

and administrative expenses:

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During the three months

ended March 31, 2026, the Company had an increase of approximately $836 thousand in general and administrative expenses, primarily

related to an increase in compensation costs of $1.1 million, an accounts receivable reserve adjustment of $450 thousand recorded

during the three months ended March 31, 2026, and an increase in legal and professional fees of $200 thousand.

These increases were

partially offset by a decrease in stock-based compensation expense of $1.1 million.

ended June 30, 2026, the Company had a decrease of approximately $793 thousand, or 5%, in general and administrative expenses, primarily

related to a decrease in stock-based compensation expense of $1.3 million and a decrease in legal and professional fees of $737 thousand.

These decreases were partially offset by an increase in compensation costs of $792 thousand and accounts receivable reserve and inventory

adjustments of $397 thousand recorded during the three months ended June 30, 2026.

service expenses:

This consists of rent, insurance, payroll and benefit expenses related to the Company’s patient care center

in South Carolina.

During the three months ended June 30, 2026, the Company had a decrease of approximately $618 thousand, or 19%,

primarily related to a decrease in compensation costs.

This mainly relates to third-party technology services for developing and maintaining our online platforms.

During the three

months ended June 30, 2026, the Company had a decrease of approximately $32 thousand, or 2%, primarily due to lower third-party service

provider costs.

income (expense), net.

Interest income (expense), net consists of interest income on the Company’s cash account balances for the

three months ended June 30, 2026 and interest expense on the Avenue Facility, partially offset by interest income on the Company’s

cash account balances for the three months ended June 30, 2025.

Interest income was approximately $46 thousand for the three months ended

June 30, 2026 compared to interest expense of $661 thousand for the three months ended June 30, 2025.

The Company extinguished the Avenue

Facility on August 5, 2025.

of the Six Months Ended June 30, 2026 to the Six Months Ended June 30, 2025

financial results for the six months ended June 30, 2026 are summarized as follows in comparison to the six months ended June 30, 2025:

Telehealth revenue, net

Cost of telehealth revenue

Selling and marketing expenses

General and administrative expenses

Other operating expenses

Customer service expenses

Development costs

Operating loss from continuing operations

(16,058,673 )

Interest income (expense),

Loss from continuing operations before income

(15,956,537 )

Income tax provision

Net loss from continuing operations

(15,956,537 )

Net income from discontinued

(15,956,537 )

income attributable to non-controlling interest of discontinued operations

Net loss attributable to LifeMD, Inc.

(15,956,537 )

Preferred stock dividends

Net loss attributable

to common stockholders

$ (17,509,662 )

$ (3,356,567 )

revenue, net.

Revenues for the six months ended June 30, 2026 were approximately $97.4 million, a decrease of 2% compared to approximately

$99.9 million for the six months ended June 30, 2025.

The decrease in revenues was attributable to a decrease in telehealth product revenue

of approximately $3.0 million primarily due to a decrease in online sales demand, partially offset by an increase in telehealth subscription

revenue, primarily for LifeMD virtual primary care which experienced an increase of approximately $534 thousand during the six months

ended June 30, 2026 compared to the six months ended June 30, 2025 primarily due to an increase in online sales demand.

of telehealth revenue.

Cost of telehealth revenue, which primarily include product costs, pharmacy fulfilment costs, physician consult

fees, and shipping costs directly attributable to our prescription and OTC products decreased by approximately 25% to approximately $11.2

million for the six months ended June 30, 2026 compared to approximately $15.0 million for the six months ended June 30, 2025.

of telehealth revenue decrease was due to product mix, decreased telehealth product sales volume and decreased shipping costs during

the six months ended June 30, 2026 when compared to the six months ended June 30, 2025.

Telehealth costs were 11% of associated telehealth

revenues during the six months ended June 30, 2026 compared to 15% of associated telehealth revenues during the six months ended June

Gross profit increased by 2% to approximately $86.2 million for the six months ended June 30, 2026 compared to approximately

$84.9 million for the six months ended June 30, 2025.

Gross profit as a percentage of revenues was approximately 89% for the six months

ended June 30, 2026 as compared to approximately 85% for the six months ended June 30, 2025.

The increase in gross profit as a percentage

of revenues was primarily due to product mix and decreased shipping costs on telehealth product revenues in the six months ended June

Operating expenses for the six months ended June 30, 2026 were approximately $102.3 million, as compared to approximately $88.5

million for the six months ended June 30, 2025.

This represents an increase of 16%, or approximately $13.8 million.

The increase is primarily

attributable to:

and marketing expenses:

This mainly consists of online marketing and advertising expenses.

During the six months ended June 30, 2026,

the Company had an increase of approximately $13.5 million, or 30%, in selling and marketing costs resulting from additional sales

and marketing initiatives to drive the current and future periods’ sales growth primarily for telehealth subscription revenue

and new telehealth offerings.

This ramp up is expected to both increase and maintain sustained revenue growth in future years, based

on the Company’s recurring revenue subscription-based sales model.

and administrative expenses:

This category mainly consists of stock-based compensation expense, merchant processing fees, payroll

expenses for corporate employees, taxes and licenses, amortization expense and legal and professional fees.

During the six months

ended June 30, 2026, the Company had an increase of approximately $43 thousand, or 0.1%, in general and administrative expenses,

primarily related to an increase in compensation costs of $1.8 million, accounts receivable reserve and inventory adjustments of

$896 thousand recorded during the six months ended June 30, 2026, and an increase in taxes and licenses of $150 thousand.

These increases

were partially offset by a decrease in stock-based compensation expense of $2.4 million, a decrease in legal and professional fees

of $529 thousand and a decrease in merchant processing fees of $42 thousand.

operating expenses:

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and bank charges.

During the three months ended March 31, 2026, the Company had an increase of approximately $790 thousand, or 33%,

primarily related to increases in software subscriptions to support the Company’s growth and compliance initiatives and an

increase in depreciation expense.

During the six months ended June 30, 2026, the Company had an increase of approximately $948 thousand, or 18%,

primarily related to increases in depreciation expense, travel expenses, software subscriptions and information technology and cybersecurity

expenses to support the Company’s growth and compliance initiatives.

above increases in operating expenses were partially offset by the following decreases in operating expenses:

service expenses:

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in South Carolina.

During the three months ended March 31, 2026, the Company had an increase of approximately $68 thousand, or 2%,

primarily related to increases in compensation costs.

above increases in expenses were partially offset by the following decrease in expenses:

During the six months ended June 30, 2026, the Company had a decrease of approximately $550 thousand, or 9%, primarily

related to decreases in compensation costs.

This mainly relates to third-party technology services for developing and maintaining our online platforms.

During the three

months ended March 31, 2026, the Company had a decrease of approximately $63 thousand, or 3%, primarily due to lower third-party

service provider costs.

During the six

months ended June 30, 2026, the Company had a decrease of approximately $95 thousand, or 3%, primarily due to lower third-party service

provider costs.

income (expense), net.

Interest income (expense), net consists of interest income on the Company’s cash account balances for the

three months ended March 31, 2026 and interest expense on the Avenue Facility, partially offset by interest income on the Company’s

cash account balances for the three months ended March 31, 2025.

Interest income was approximately $56 thousand for the three months

ended March 31, 2026 compared to interest expense of $464 thousand for the three months ended March 31, 2025.

The Company extinguished

the Avenue Facility on August 5, 2025.

March 31, 2026

December 31, 2025

six months ended June 30, 2026 and interest expense on the Avenue Facility, partially offset by interest income on the Company’s

cash account balances for the six months ended June 30, 2025.

Interest income was approximately $102 thousand for the six months ended

June 30, 2026 compared to interest expense of $1.1 million for the six months ended June 30, 2025.

The Company extinguished the Avenue

Facility on August 5, 2025.

Current assets

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Working capital

capital decreased by approximately $8.1 million during the three months ended March 31, 2026.

$ (4,524,351 )

capital decreased by approximately $14.8 million during the six months ended June 30, 2026.

The decrease in current assets is primarily

attributable to a decrease in cash of $2.3 million, partially offset by an increase in other current assets of $1.2 million and an increase

in accounts receivable of $550 thousand.

Current liabilities increased by $8.0 million, which was primarily attributable to an increase

in accounts payable and accrued expenses of $6.8 million and an increase in deferred revenue of $1.2 million.

attributable to a decrease in cash of $11.6 million, partially offset by an increase in accounts receivable of $2.0 million.

liabilities increased by $5.0 million, which was primarily attributable to an increase in accounts payable and accrued expenses of $5.0

and Capital Resources

Three Months Ended March 31,

Net cash provided by operating activities

Months Ended June 30,

Net cash (used in) provided by

operating activities

$ (6,481,023 )

Net cash used in investing activities

Net cash used in financing activities

Net decrease in cash

cash provided by operating activities was approximately $445 thousand for the three months ended March 31, 2026, as compared with approximately

$3.1 million for the three months ended March 31, 2025.

The significant factors contributing to the net cash provided by operating activities

during the three months ended March 31, 2026, include:

(1) an increase in accounts payable and accrued expenses of $6.8 million, (2)

$2.0 million in non-cash depreciation and amortization, (3) $1.4 million in non-cash stock-based compensation charges, and (3) an increase

in deferred revenue of $1.2 million.

These increases were partially offset by:

(1) the Company’s net loss of $8.9 million for the

three months ended March 31, 2026, (2) an increase in other current assets of $1.2 million, and (3) an increase in accounts receivable

of $550 thousand.

The significant factors contributing to the net cash provided by operating activities during the three months ended

March 31, 2025, include:

(1) $2.5 million in non-cash stock-based compensation charges and (2) $1.8 million in non-cash depreciation

and amortization.

Net (decrease) increase in cash

(11,644,703 )

cash used in operating activities was approximately $6.5 million for the six months ended June 30, 2026, as compared with net cash provided

by operating activities of approximately $11.7 million for the six months ended June 30, 2025.

The significant factors contributing to

the net cash used in operating activities during the six months ended June 30, 2026, include:

(1) the Company’s net loss of $16.0

million and (2) an increase in accounts receivable of $2.0 million.

These decreases were partially offset by:

(1) an increase in accounts

payable and accrued expenses of $5.0 million, (2) $4.0 million in non-cash depreciation and amortization and (3) $2.2 million in non-cash

stock-based compensation charges.

The significant factors contributing to the net cash provided by operating activities during the six

months ended June 30, 2025, include:

(1) $4.6 million in non-cash stock-based compensation charges, (2) $3.7 million in non-cash depreciation

and amortization, (3) an increase in accounts payable and accrued expenses of $3.2 million and (4) a decrease in accounts receivable

of $1.5 million.

These increases were partially offset by:

(1) a decrease in accounts payable and accrued expenses of $2.3 million and

(2) the Company’s net loss of $1.6 million for the three months ended March 31, 2025.

Net cash provided by operating activities

of discontinued operations was $2.8 million for the three months ended March 31, 2025.

cash used in investing activities for the three months ended March 31, 2026 was approximately $2.1 million, as compared with approximately

$2.9 million for the three months ended March 31, 2025.

Net cash used in investing activities for the three months ended March 31, 2026,

was due to cash paid for capitalized software costs of approximately $2.0 million, and cash paid for the purchase of equipment of approximately

(1) the Company’s net loss of $4.7 million and (2) a decrease in deferred

revenue of $2.6 million.

Net cash provided by operating activities of discontinued operations was $5.3 million for the six months ended

June 30, 2025.

cash used in investing activities for the six months ended June 30, 2026 was approximately $3.7 million, as compared with approximately

$6.6 million for the six months ended June 30, 2025.

Net cash used in investing activities for the six months ended June 30, 2026, was

due to cash paid for capitalized software costs of approximately $3.5 million, and cash paid for the purchase of equipment of approximately

$173 thousand.

Net cash used in investing activities for the three months ended March 31, 2025, was due to cash paid for capitalized software

Net cash used in investing activities for the six months ended June 30, 2025, was due to cash paid for capitalized software

costs of approximately $3.9 million, and cash paid for the purchase of equipment of approximately $894 thousand.

Net cash used in investing

activities of discontinued operations was $863 thousand for the three months ended March 31, 2025.

cash used in financing activities for the three months ended March 31, 2026 was approximately $696 thousand as compared with approximately

$813 thousand for the three months ended March 31, 2025.

Net cash used in financing activities for the three months ended March 31, 2026,

consisted of preferred stock dividends of $777 thousand partially offset by $81 thousand of cash proceeds received from the exercise

Net cash used in financing activities for the three months ended March 31, 2025, consisted of preferred stock dividends of

$777 thousand.

Net cash used in financing activities of discontinued operations was $36 thousand for the three months ended March 31,

activities of discontinued operations was $1.7 million for the six months ended June 30, 2025.

cash used in financing activities for the six months ended June 30, 2026 was approximately $1.5 million as compared with approximately

$3.9 million for the six months ended June 30, 2025.

Net cash used in financing activities for the six months ended June 30, 2026, consisted

of preferred stock dividends of $1.6 million partially offset by $81 thousand of cash proceeds received from the exercise of options.

Net cash used in financing activities for the six months ended June 30, 2025, consisted of:

(1) principal repayments on the Avenue Credit

Agreement of approximately $2.1 million and (2) preferred stock dividends of $1.6 million.

Net cash used in financing activities of discontinued

operations was $312 thousand for the six months ended June 30, 2025.

and Capital Resources Outlook

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which provides for a senior secured revolving credit facility in an aggregate outstanding amount not exceeding $30 million (the “Credit

Facility”) to support potential corporate development and/or shareholder value creation initiatives.

The Credit Facility may be

increased in the aggregate principal amount of up to $20 million on the terms and subject to the conditions described in the Credit Agreement.

In connection with the Credit Agreement, among other things, the Company issued a revolving loan note to Citizens for any loans that

may be made under the Credit Facility.

Additionally, among other things, the Company and its subsidiaries entered into a pledge and security

agreement and a guarantee agreement to provide credit support for the Credit Facility.

The Credit Facility requires the Company to maintain

(i) a Consolidated Leverage Ratio not to exceed 2.50 to 1.00 and (ii) a Consolidated Interest Coverage Ratio of at least 3.00 to 1.00.

As of March 31, 2026, the Company was in compliance with the Consolidated Leverage Ratio covenant and was out of compliance with the

Consolidated Interest Coverage Ratio covenant contained in the Credit Facility, which is the ratio of (a) the Consolidated EBIT of the

Company and its Subsidiaries for the most recently completed four consecutive fiscal quarters ended March 31, 2026, to (b) Consolidated

Interest Expense of the Company and its Subsidiaries for the most recently completed four consecutive fiscal quarters ended March 31,

2026, as those capitalized terms are defined in the Credit Agreement.

Compliance with the Consolidated

Interest Coverage Ratio was adversely impacted by an increase of approximately $7.6 million, or 34%, in selling and marketing costs

during the three months ended March 31, 2026, resulting from additional sales and marketing initiatives to drive the current and future

periods’ sales growth.

Among its remedies, Citizens could determine that there has been an Event of Default, deny access

to funds under the Credit Facility, and/or it could terminate the Credit Facility.

Discussions on the terms of an amendment to the Credit

Agreement or waiver of compliance with the covenant are ongoing.

As of March 31, 2026 and to date, the Company had not drawn any amounts

under the Credit Facility.

Facility”) for general corporate purposes.

The Credit Facility may be increased in the aggregate principal amount of up to $20

million on the terms and subject to the conditions described in the Credit Agreement.

In connection with the Credit Agreement, among

other things, the Company issued a revolving loan note to Citizens for any loans that may be made under the Credit Facility.

Additionally,

among other things, the Company and its subsidiaries entered into a pledge and security agreement and a guarantee agreement to provide

credit support for the Credit Facility.

The Credit Agreement required the Company to maintain (i) a Consolidated Leverage Ratio not to

exceed 2.50 to 1.00 and (ii) a Consolidated Interest Coverage Ratio of at least 3.00 to 1.00, in each case commencing with the quarter

ended March 31, 2026.

As of March 31, 2026, the Company was in compliance with the Consolidated Leverage Ratio covenant and was out of

compliance with the Consolidated Interest Coverage Ratio covenant contained in the Credit Agreement.

On June 30, 2026, the Company entered

into the Waiver and First Amendment to the Credit Agreement (“Credit Agreement Waiver and First Amendment”) with Citizens.

Under the terms of the Credit Agreement Waiver and First Amendment, the Company received a waiver of any Event of Default which has occurred

as a result of the Company’s non-compliance with the Consolidated Interest Coverage Ratio covenant as of March 31, 2026.

Additionally,

the Credit Agreement Waiver and First Amendment further amends the Credit Agreement by removing the Consolidated Interest Coverage Ratio

test and requiring the Company to maintain (i) a Consolidated Leverage Ratio not to exceed 2.50 to 1.00, (ii) a Consolidated Fixed Charge

Coverage Ratio of at least 1.25 to 1.00, and (iii) the sum of its Cash on Hand and Unused Availability of at least $40 million, in each

case, commencing with the quarter ended September 30, 2026, with those capitalized terms as defined in the Credit Agreement Waiver and

First Amendment.

As of June 30, 2026 and to date, the Company had not drawn any amounts under the Credit Facility.

Refer to Note 8—Indebtedness

for additional information.

Company entered into an At Market Issuance Sales Agreement (the “ATM Sales Agreement”) with B.

11 unchanged sentences

and units including $53.3 million of its common stock under the ATM Sales Agreement.

As of March 31, 2026, the Company had $44.6 million

As of June 30, 2026, the Company had $44.6 million

available under the ATM Sales Agreement.

Company expects that its existing cash as of March 31, 2026 of $34.5 million and net proceeds from the sale of common stock under the

Company expects that its existing cash as of June 30, 2026 of $25.1 million and net proceeds from the sale of common stock under the

ATM Sales Agreement will be sufficient to fund our planned operating expenses and capital expenditure requirements for at least the next

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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 2. Management’s Discussion and Analysis