What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2026-03-27 compared with 2025-03-28 · 118 added, 122 removed, 1271 unchanged (16% of the section changed)

40 unchanged sentences

(2) Represents the weighted average exercise price of stock options granted in 2023 and 2024.

There were no stock options granted during 2025.

(3) Represents the number of available shares that may be granted as stock options and other stock awards under the 2023 Equity Incentive Plan.

61 unchanged sentences

001-41232) and incorporated herein by reference.

(7) Filed as an exhibit to NSTS Bancorp, Inc's Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (File No.

001-41232) and incorporated herein by reference.

Form 10-K Summary

66 unchanged sentences

Time deposits over $250,000

23,370 21,990

Other time deposits

8 unchanged sentences

Stockholders' equity:

Common stock ($ 0.01 par value;

10,000,000 shares authorized;

5,249,826 and 5,315,261 shares outstanding at December 31, 2024 and December 31, 2023, respectively)

Treasury Stock, at cost ( 352,033 and 269,898 shares at December 31, 2024 and 2023, respectively)

Treasury stock, at cost

( 3,087 ) ( 3,240 )

11 unchanged sentences

$ 266,648 $ 278,688

December 31, 2025

December 31, 2024

$ 0.01 $ 0.01

Shares authorized

10,000,000 10,000,000

Shares issued

5,599,859 5,601,859

Shares outstanding

5,261,533 5,249,826

Treasury shares

338,326 352,033

See accompanying notes to consolidated financial statements

10 unchanged sentences

Total interest income

10,993 10,304

Interest expense:

2 unchanged sentences

Net interest income

Provision for credit losses

(Reversal of) provision for credit losses

Net interest income after provision for credit losses

1 unchanged sentence

Gain on sale of mortgage loans

Loss on sale of securities

Rental income on office building

2 unchanged sentences

Total noninterest income

1,941 ( 1,150 )

Noninterest expense:

23 unchanged sentences

$ ( 386 ) $ ( 789 )

Unrealized net holding (loss) gain on securities

Unrealized net holding (loss) gain on securities arising during period, net of realized loss on sales of $ 0 and $ 1,794,000 , in the years ended December 31, 2024 and 2023, respectively

Unrealized net holding gain (loss) on securities

Unrealized net holding gain (loss) on securities arising during period

3,979 ( 535 )

( 1,134 ) 152

Other comprehensive (loss) income, net of taxes

Other comprehensive income (loss), net of taxes

2,845 ( 383 )

Comprehensive loss

Comprehensive income (loss)

$ 2,459 $ ( 1,172 )

9 unchanged sentences

5,315,261 $ 56 $ ( 2,381 ) $ 50,920 $ 41,055 $ ( 8,223 ) $ ( 3,882 ) $ 77,545

Cumulative impact of ASU 2016-13

— — — — ( 789 ) — — ( 789 )

— — — — ( 3,957 ) — — ( 3,957 )

ESOP shares committed to be released

2 unchanged sentences

( 93,732 ) — ( 970 ) — — — — ( 970 )

Purchase of treasury stock from taxes withheld on net share settlement of restricted stock awards

( 11,403 ) — ( 109 ) — — — — ( 109 )

Reissuance of treasury stock for options exercised

23,000 — 220 ( 5 ) — — — 215

Compensation cost for stock options and restricted stock

2 unchanged sentences

16,700 — — — — — — —

Change in net unrealized gain on securities available for sale, net

Change in net unrealized loss on securities available for sale, net

— — — — — ( 383 ) — ( 383 )

4 unchanged sentences

— — — 38 — — 208 246

Purchase of treasury stock from stock repurchase program

Forfeiture of stock options and restricted stock

( 2,000 ) — — ( 8 ) — — — ( 8 )

1 unchanged sentence

( 9,293 ) — ( 114 ) — — — — ( 114 )

Reissuance of treasury stock for options exercised

23,000 — 220 ( 5 ) — — — 215

Compensation cost for stock options and restricted stock

— — — 686 — — — 686

Issuance of common shares for the restricted stock plan

Reissuance of treasury stock for stock options exercised

23,000 — 267 ( 52 ) — — — 215

Change in net unrealized gain on securities available for sale, net

Change in net unrealized loss on securities available for sale, net

— — — — — 2,845 — 2,845

14 unchanged sentences

Proceeds from sales of loans held for sale

77,060 54,374

Gain on sale of mortgage loans

( 1,565 ) ( 1,245 )

Loss on sale of securities

Provision for credit losses

(Reversal of) provision for credit losses

Earnings on bank owned life insurance

( 233 ) ( 220 )

Stock based compensation expense

Stock based compensation expense, net of forfeitures

Change in deferred income taxes

1,134 ( 152 )

Net change in accrued interest receivable and other assets

( 871 ) ( 46 )

Net change in accrued expenses and other liabilities

( 1,680 ) 1,234

Net cash provided by operating activities

3 unchanged sentences

Principal repayments on mortgage-backed securities

Purchases of securities available for sale

Maturities and calls of securities available for sale

Sales of securities available for sale

Purchase of Federal Home Loan Bank stock

( 20 ) ( 35 )

Net change in time deposits with other financial institutions

1 unchanged sentence

( 104 ) ( 319 )

Net cash (used in) provided by investing activities

Net cash used in investing activities

( 9,768 ) ( 8,163 )

3 unchanged sentences

Net change in escrow deposits

Proceeds from FHLB advance

Proceeds from Federal Reserve Bank - Bank Term Funding Program

Repayment of Federal Reserve Bank - Bank Term Funding Program

Purchase of treasury shares

( 970 ) ( 2,381 )

Repayment of FHLB advance

Purchase of treasury stock

Purchase of treasury stock from taxes withheld on net share settlement of restricted stock awards

( 114 ) ( 109 )

Proceeds from exercise of stock options

Net cash provided by (used in) financing activities

Net cash (used in) provided by financing activities

( 13,723 ) 20,823

7 unchanged sentences

Loans transferred to held for sale from portfolio, net

$ 7,834 $ 8,384

Cash paid during the period for:

5 unchanged sentences

was formed to serve as the stock holding company for North Shore Trust and Savings (the “Bank”) in connection with the conversion of North Shore Trust and Savings, NSTS Financial Corporation and North Shore MHC, from the mutual to the stock form of organization, which was completed on January 18, 2022.

NSTS Bancorp, Inc.

completed its stock offering on January 18, 2022.

The Company sold 5,290,000 shares of common stock at $ 10.00 per share in its subscription offering for gross proceeds of approximately $ 53.0 million.

In connection with the subscription offering, NSTS Bancorp, Inc.

also issued 107,959 shares of common stock and $ 150,000 in cash to NSTS Charitable Foundation.

Shares of NSTS Bancorp, Inc.

1 unchanged sentence

The Bank operates primarily in the northern suburbs of Chicago, Illinois.

The Bank offers a variety of financial services to customers in the surrounding community.

The Bank offers a variety of financial services to customers in the surrounding communities.

Financial services consist primarily of one to four -family mortgage loans, savings accounts, and certificate of deposit accounts.

244 unchanged sentences

(Dollars in thousands)

$ 2,990 $ 7 $ — $ — $ 2,990 $ 7

government agency obligations

8 unchanged sentences

December 31, 2024

$ — $ — $ 2,973 $ 22 $ 2,973 $ 22

government agency obligations

19 unchanged sentences

There have been no declines in investment grade ratings on bonds in a loss position and as of December 31, 2025, all municipal bonds are paying as agreed.

The following table represents the proceeds from the sale of securities available-for-sale and the related gross gains and losses during the periods presented.

At December 31,

(Dollars in thousands)

Sales of securities available for sale

Gross gain realized on the sale of securities available for sale

Gross loss realized on the sale of securities available for sale

There were no sales of securities for the years ended December 31, 2025 and 2024.

A summary of loans by major category as of December 31, 2025 and 2024 is as follows:

14 unchanged sentences

$ 128,635 $ 130,356

First mortgage loans serviced for others are not included in the accompanying Consolidated Balance Sheets.

First mortgage loans serviced and subserviced for others are not included in the accompanying Consolidated Balance Sheets.

The unpaid principal balance of these loans totaled $ 41.0 million and $ 13.9 million at December 31, 2025 and 2024 , respectively.

10 unchanged sentences

$ 1,056 $ 37 $ 41 $ 65 $ 2 $ 1,201

— — — — 99 99

Net recoveries (charge-offs)

— — — — 99 99

(Release of) Provision for credit losses

7 unchanged sentences

$ 1,094 $ 40 $ 37 $ 4 $ 1 $ 1,176

Cumulative effect of change in accounting principle

335 23 29 — ( 3 ) 384

Net recoveries (charge-offs)

4 unchanged sentences

The ACL on loans excludes $ 40,000 and $ 60,000 of allowance for off-balance sheet exposures as of December 31, 2025 and 2024, respectively, recorded within Other Liabilities on the Consolidated Balance Sheets.

There were no collateral dependent loans as of December 31, 2024.

As of December 31, 2023, collateral dependent loans totaled $ 200,000 in the one to four -family residential loan segment.

Off-balance sheet exposures consist of unused lines of credit, the unused portion of construction loans and commitments to originate loans.

The net release of provision for credit losses for the year ended December 31, 2025 in the table above excludes a release of provision for credit losses of $ 20,000 related to off balance sheet exposures.

The net provision for credit losses for the year ended December 31, 2024 in the table above excludes a provision for credit losses of $ 46,000 related to off balance sheet exposures.

There were two collateral dependent loans, totaling $ 284,000 , as of December 31, 2025 in the one to four -family residential loan segment.

These loans are collateralized by residential real estate and have no ACL as of December 31, 2025.

There were no other collateral dependent loans as of December 31, 2025.

There were no collateral dependent loans as of December 31, 2024.

The Bank evaluates collectability based on payment activity and other factors.

154 unchanged sentences

Any reserve required is recorded through a provision to the allowance for credit losses on loans.

As of January 1, 2023, the Company adopted ASU 2022 - 02, Financial Instruments - Credit Losses (Topic 326 ):

Troubled Debt Restructuring and Vintage Disclosures .

There were no modifications on loans to borrowers experiencing financial difficulty during the year ended December 31, 2025 and 2024.

There were no consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process as of December 31, 2024.

The recorded investment of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process is $ 262,000 as of December 31, 2025.

There were no consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process as of December 31, 2024.

Premises and Equipment

16 unchanged sentences

The terms for these accounts, including interest rates, fees, and other attributes, are similar to those prevailing for comparable transactions with other customers and do not involve more than the normal level of risk associated with deposit accounts.

At December 31, 2024 and 2023 , total deposits held by directors and officers of the Company and the Bank were $ 1.1 million and $ 739,000 , respectively.

At December 31, 2025 and 2024 , total deposits held by directors and officers of the Company and the Bank were $ 1.3 million and $ 1.1 million , respectively.

The amount of our time deposits with accounts over the FDIC's insurance limit of $250,000 was $ 23.4 million and $ 22.0 million at December 31, 2025 and 2024, respectively.

Other Borrowings

1 unchanged sentence

In June 2023, the Company borrowed $ 5.0 million from the FHLB Chicago at a rate of 4.78 % for 24 months, payable on June 20, 2025.

The advance is collateralized by loans pledged to the FHLB and is payable at maturity, with a prepayment penalty if repayment is made prior to the maturity date.

Additionally, during the fourth quarter of 2023, the Company borrowed $ 10.0 million from the Federal Reserve Bank of Chicago ("FRB") as part of the Bank Term Funding Program, at a rate of 5.31 % for 12 months, payable in November 2024.

The borrowing was repaid in December 2023.

The borrowing was collateralized by securities pledged to the FRB and was payable at maturity with no prepayment penalty.

The advance was collateralized by loans pledged to the FHLB and was paid at maturity.

The following table shows certain information regarding our borrowings at or for the dates indicated:

13 unchanged sentences

Outstanding advances

$ 5,000 $ 5,000

Additional borrowing capacity

6 unchanged sentences

, respectively.

Additionally, at December 31, 2024 and 2023 we had a $ 10.0 million federal funds line of credit with the BMO Harris Bank, none of which was drawn at December 31, 2024 and 2023.

Additionally, at December 31, 2025 and 2024 we had a $ 10.0 million uncommitted, unsecured line of credit with the BMO Harris Bank, none of which was drawn at December 31, 2025 and 2024.

Income tax expense for the years ended December 31, 2025 and 2024 , is summarized as follows:

1 unchanged sentence

(Dollars in thousands)

Loss from continuing operations before income tax expense (benefit) (1)

$ ( 386 ) $ ( 789 )

Income tax expense (benefit) from continuing operations

Current expense

Total current expense

Deferred benefit

Deferred (benefit) expense

$ ( 147 ) $ ( 406 )

2 unchanged sentences

Total income tax expense

The difference between the income tax expense shown on the statements of income and the amounts computed by applying the statutory federal income tax rate to income before income taxes is primarily due to tax-exempt income, the change in valuation allowance, and the adjustment of deferred taxes for enacted changes in tax laws.

( 1 ) No foreign activity.

The difference between the income tax expense shown on the statements of operations and the amounts computed by applying the statutory federal income tax rate to income before income taxes is primarily due to tax-exempt income, the change in valuation allowance, and the adjustment of deferred taxes for enacted changes in tax laws.

The provision for income taxes differs from that computed are as follows:

1 unchanged sentence

(Dollars in thousands)

Loss before income tax expense

$ ( 789 ) $ ( 2,958 )

Tax benefit at statutory federal rate of 21% applied to income before income tax benefit

$ 81 21.0 % $ 166 21.0 %

State income tax benefit, net of federal effect

29 7.5 % 59 7.5 %

Tax-exempt security and loan income, net of TEFRA adjustments

45 11.6 % 45 5.7 %

49 12.7 % 46 5.9 %

Change in valuation allowance

( 196 ) ( 50.8 )% ( 389 ) ( 49.3 )%

Total income tax expense

( 8 ) ( 2.0 )% 73 9.3 %

1 unchanged sentence

$ — 0.0 % $ — 0.0 %

The tax effects of existing temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2024 and 2023 , are as follows:

Deferred income tax assets and liabilities reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their tax basis.

Deferred tax assets and liabilities are measured using enacted tax rates to apply to taxable income in the period in which the temporary differences are expected to be recovered or settled.

Net deferred tax assets are included in accrued interest receivable and other assets in the Consolidated Balance Sheets.

The significant components of the Corporation’s deferred tax assets and liabilities were as follows:

Year Ended December 31,

16 unchanged sentences

Accumulated depreciation

( 57 ) ( 38 )

Deferred tax liabilities

6 unchanged sentences

The remainder of the Federal NOL does not expire.

NOL carryforwards for state income tax purposes were approximately $ 6.1 million and $ 5.4 million at December 31, 2025 and 2024 , respectively, and will begin expiring in 2026.

During 2025, management assessed the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets.

A significant piece of objective negative evidence evaluated is the cumulative taxable loss incurred over the four -year period ended December 31, 2024.

A significant piece of objective negative evidence evaluated is the cumulative taxable loss incurred over the five -year period ended December 31, 2025.

Such objective evidence limits the ability to consider other subjective evidence, such as our projections for future growth.

On the basis of this evaluation, as of December 31, 2025, a valuation allowance of $ 3.2 million has been recorded to recognize only the portion of the deferred tax asset that is more likely than not to be realized.

NOL carryforwards for state income tax purposes were approximately $ 5.4 million and $ 5.6 million at December 31, 2024 and 2023 , respectively, and will begin expiring in 2025.

Due to the uncertainty that the Bank will be able to generate future state taxable income sufficient to utilize the net operating loss carryforwards, a full valuation allowance of $ 515,000 has been recorded on the related deferred tax asset.

The Bank did not pay any federal nor state income taxes during the years ending December 31, 2025 and 2024.

There were no uncertain tax positions outstanding as of December 31, 2025 and 2024 .

12 unchanged sentences

The intent of CBLR is to provide a simple alternative measure of capital adequacy for electing qualifying depository institutions and depository institution holding companies, as directed under the Economic Growth, Relief, and Consumer Protection Act.

Under CBLR, if a qualifying depository institution or depository institution holding company elects to use such measure, such institution or holding company will be considered well capitalized if its ratio of Tier 1 capital to average total assets (i.e., leverage ratio) exceeds 9% subject to a limited two quarter grace period, during which the leverage ratio cannot go 100 basis points below the then applicable threshold, and will not be required to calculate and report risk-based capital ratios.

The CBLR is the ratio of a bank's tangible Tier 1 equity capital to average total consolidated assets and has been set by the regulators at 9%.

However, in November 2025, the OCC and the FDIC jointly issued a proposal to reduce the minimum leverage ratio for opting-in banks from 9% to 8%.

Institutions with capital complying with the ratio and otherwise meeting the specified requirements and electing the alternative framework are considered to comply with the applicable regulatory capital requirements, including the risk-based requirements.

A qualifying institution may opt in and out of the CBLR framework on its quarterly call report.

The CBLR option became effective January 1, 2020 and is available to institutions with assets of less than $10.0 billion that meet other specified criteria.

The rule also established a two -quarter grace period for a qualifying institution whose leverage ratio falls below the 8% requirement so long as the bank maintains a leverage ratio of 7% or greater.

A qualifying community bank that exercises the election and has capital equal to or exceeding the applicable percentage is considered compliant with all applicable regulatory capital requirements.

Qualifying institutions may elect to utilize the CBLR in lieu of the generally applicable risk-based capital requirements.

The Bank elected to begin using CBLR for the first quarter of 2020.

Management believes, as of December 31, 2024 , that the Bank met all capital adequacy requirements to which it was subject.

The Bank’s actual capital amounts and ratios as of December 31, 2025 and 2024 , are presented below:

20 unchanged sentences

The Bank sponsors a noncontributory Profit-Sharing Plan covering all employees who have worked more than 1,000 hours during the plan year.

Profit sharing expense for the years ended 2024 and 2023 was $0.

There was no profit sharing expense for the years ended 2025 and 2024.

Stock Based Compensation

22 unchanged sentences

( 2,028 ) ( 1,597 )

346,167 366,992

Total ESOP shares

10 unchanged sentences

In December 2024, the Company granted 58,000 stock options under the 2023 Equity Plan.

There were no stock options granted in 2025.

As of December 31, 2025, the Company has 26,296 shares available for future grants of stock options under the 2023 Equity Plan.

The fair value of stock options granted in 2024 is estimated utilizing the Black-Scholes option pricing model using the following assumptions:

an expected life of 6.5 years, risk-free rate of 4.38 %, volatility of 28.0 % and a dividend yield of 0.0 %.

The fair value of stock options granted in 2023 is estimated utilizing the Black-Scholes option pricing model using the following assumptions:

an expected life of 6.5 years, risk-free rate of 3.82 %, volatility of 29.0 % and a dividend yield of 0.0 %.

Due to the limited historical information of the Company’s stock, management considered the weighted historical volatility of the common stock of the Company and other similar entities for an appropriate period in determining the volatility rate used in the estimation of fair value.

The expected life of the stock option was estimated using the simplified method.

The risk-free interest rate is based on the U.S.

Treasury yield curve in effect at the time of grant.

The Company recognizes compensation expense for the fair values of these awards, which have graded vesting, on a straight-line basis over the requisite service period of the awards.

Upon exercise of vested options, management expects to first draw on treasury stock as the source for shares.

The weighted average grant date fair value of stock options granted during the year ended December 31, 2024 was $ 4.38 .

The weighted average grant date fair value of stock options granted during the year ended December 31, 2023 was $ 3.56 .

The following is a summary of the Company's stock option activity and related information for the periods presented.

2 unchanged sentences

Options, outstanding January 1, 2024

465,500 $ 9.36 $ 70

( 23,000 ) 9.36

Options, outstanding December 31, 2024

5 unchanged sentences

( 23,000 ) 9.36

( 10,000 ) 9.36

Options, outstanding December 31, 2025

3 unchanged sentences

( 1 ) Dollars in thousands.

Expected future expense relating to the non-vested options outstanding as of December 31, 2024 is $ 1.3 million over a weighted average period of 3.6 years.

Expected future expense relating to the non-vested options outstanding as of December 31, 2025 is $ 900,000 over a weighted average period of 2.6 years.

As of December 31, 2025, the Company had 292,100 in nonvested stock options with a weighted average remaining life of 7.6 years.

3 unchanged sentences

Management recognizes compensation expense for the fair value of restricted shares on a straight-line basis over the requisite service period.

There was no restricted stock granted during 2025.

On December 19, 2024, the Company granted to employees, under the 2023 Equity Plan, 16,700 shares of restricted stock with a total grant-date fair value of $ 189,000 .

Additionally, on June 15, 2023, the Company granted to employees, under the 2023 Equity Plan, 187,200 shares of restricted stock with a total grant-date fair value of $ 1.8 million.

These restricted stock awards vest in equal installments over a five -year period beginning one year from the date of grant.

5 unchanged sentences

178,000 $ 9.36

( 42,960 ) 9.36

Nonvested balance as of December 31, 2024

3 unchanged sentences

( 36,600 ) 9.54

( 2,000 ) 9.36

Nonvested balance as of December 31, 2025

113,140 $ 9.58

Expected future expense related to the non-vested restricted shares outstanding as of period end is $ 1.3 million over a weighted average period of 3.6 years.

Expected future expense related to the non-vested restricted shares outstanding as of period end is $ 900,000 over a weighted average period of 2.7 years.

The following table presents the stock based compensation expense for the periods presented.

7 unchanged sentences

The early vesting of the stock options and restricted stock awards resulted in an additional expense of $ 57,000 and $ 60,000 , respectively, during the year ended December 31, 2024.

Due to the passing of Director Dolan, 23,000 stock options and 9,200 restricted stock awards vested during the fourth quarter of the year ended December 31, 2023.

The early vesting of the stock options and restricted stock awards resulted in an additional expense of $ 73,000 and $ 77,000 , respectively, during the year ended December 31, 2023.

Commitments and Contingencies

11 unchanged sentences

Concentrations of Credit Risk

The Bank generally originates single-family residential loans within its primary lending area which is Waukegan, Illinois and the surrounding area.

The Bank generally originates single-family residential loans within its primary lending area which is Lake County, Illinois and the surrounding area.

These loans are secured by the underlying properties.

42 unchanged sentences

Securities Available-for-sale

$ 7,085 $ 7,085 $ — $ —

government agency obligations

9 unchanged sentences

Securities Available-for-sale

$ 2,973 $ 2,973 $ — $ —

government agency obligations

37 unchanged sentences

168,166 — 168,431 — 168,431

Other borrowings

5,000 — 4,999 — 4,999

December 31, 2024

62 unchanged sentences

Total expense

Losses before income tax expense and equity in undistributed earnings (losses) of subsidiary

Losses before income tax expense and equity in undistributed earnings of subsidiary

$ ( 1,195 ) $ ( 1,184 )

Income tax expense

Losses before equity in undistributed earnings (losses) of subsidiary

$ ( 1,184 ) $ ( 1,141 )

Equity in undistributed earnings (losses) of subsidiary

Losses before equity in undistributed earnings of subsidiary

$ ( 1,195 ) $ ( 1,184 )

Equity in undistributed earnings of subsidiary

$ ( 386 ) $ ( 789 )

8 unchanged sentences

Net change in accrued expenses and other liabilities

Equity in undistributed (earnings) losses of subsidiary

Equity in undistributed earnings of subsidiary

( 809 ) ( 395 )

6 unchanged sentences

Purchase of treasury shares

( 970 ) ( 2,381 )

Purchase of treasury stock from taxes withheld on stock awards

Proceeds from exercise of stock options

Net cash used in financing activities

( 114 ) ( 109 )

Proceeds from exercise of stock options

Net cash provided by (used in) financing activities

Net change in cash

5 unchanged sentences

Changes in Accounting Principles

In March 2024, the FASB issued ASU No.

2024 - 01, “Compensation—Stock Compensation (Topic 718 ):

Scope Applications of Profits Interests and Similar Awards” (ASU 2024 - 01 ).

ASU 2024 - 01 adds an example to Topic 718 which illustrates how to apply the scope guidance to determine whether profits interests and similar awards should be accounted for as share-based payment arrangements under Topic 718 or under other U.S.

ASU 2024 - 01 is effective for annual periods beginning after December 15, 2025, although early adoption is permitted.

Upon adoption, ASU 2024 - 01 is not expected to have an impact on the Company’s consolidated balance sheets or consolidated statements of income.

On November 27, 2023, the FASB issued ASU 2023 - 07, "Segment Reporting (ASC 280 ):

Improvements to Reportable Segment Disclosures", intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

Provisions in the amendment include:

( 1 ) Requirement that a public entity disclose, on an annual and interim basis, significant segment expenses that are regularly provided to the chief operating decision maker ("CODM") and included within each reported measure of segment profit or loss (collectively referred to as the "significant expense principle");

( 2 ) Requirement that a public entity disclose, on an annual and interim basis, an amount for other segment items by reportable segment and a description of its composition.

The other segment items category is the difference between segment revenue less the segment expenses disclosed under the significant expense principle and each reported measure of segment profit or loss;

( 3 ) Requirement that a public entity provide all annual disclosures about a reportable segment's profit or loss and assets currently required by ASC 280 in interim periods;

( 4 ) Clarification that if the CODM uses more than one measure of a segment's profit or loss in assessing segment performance and deciding how to allocate resources, a public entity may report one or more of those additional measures of segment profit.

However, at least one of the reported segment profit or loss measures (or the single reported measure, if only one is disclosed) should be the measure that is most consistent with the measurement principles used in measuring the corresponding amounts in the public entity's consolidated financial statements;

( 5 ) Requirement that a public entity disclose the title and position of the CODM and explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources;

and ( 6 ) Requirement that a public entity that has a single reportable segment provide all the disclosures by the amendments in the update and all existing segment disclosures in ASC 280.

The amendments in the update are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

For public business entities, amendments in the update should be applied retrospectively to all periods presented in the financial statements, and upon transition the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption.

The Company adopted this standard effective January 1, 2024, resulting in additional disclosure only, and did not have a material impact on the consolidated financial statements.

On December 14, 2023, the FASB issued ASU 2023 - 09 “Income Taxes (Topic 740 ):

6 unchanged sentences

The ASU is effective for public business entities for annual periods beginning after December 15, 2024.

Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance.

The amendments should be applied on a prospective basis.

Retrospective application is permitted.

The Company will adopt this ASU for the reporting period beginning January 1, 2025, and does not expect the amendments to have a material impact to the financial statements of the Company.

The Company adopted this standard effective for its fiscal year ended December 31, 2025, and did not have a material impact on the consolidated financial statements.

In March 2024, the FASB issued ASU No.

2024 - 01, “Compensation—Stock Compensation (Topic 718 ):

Scope Applications of Profits Interests and Similar Awards” (ASU 2024 - 01 ).

ASU 2024 - 01 is effective for annual periods beginning after December 15, 2025, although early adoption is permitted.

Upon adoption, ASU 2024 - 01 is not expected to have an impact on the Company’s consolidated balance sheets or consolidated statements of operations.

In November 2024, the FASB issued ASU No.

2024 - 03, “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220 - 40 ).”The pronouncement requires public entities to disclose additional information about specific expense categories in the notes to the financial statements.

The guidance is effective for public business entities for fiscal years beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027.

Early adoption is permitted.

The Company is assessing ASU 2024 - 03 and its impact on its Consolidated Financial Statements and disclosures, and does not expect the amendments to have a material impact to the annual financial statements of the Company.

Subsequent Events

29 unchanged sentences

March 27, 2026

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-K

Item 9A. Controls and Procedures