OSR Health, Inc. 10-K

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited financial statements and the notes related thereto contained elsewhere in this report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those set forth under “Cautionary Note Regarding Forward-Looking Statements,” “Item 1A. Risk Factors” and elsewhere in this report. Overview OSR Holdings, Inc. (the “Company”) is a holding company focused on the development of innovative therapeutic and medical technologies through its subsidiaries, including businesses developing oral immunotherapies for cancer, design-augmented biologics for age-related and other degenerative diseases, and, following the acquisition of Woori IO Co., Ltd. in January 2026, non-invasive biosensing technologies for glucose monitoring and related health parameters. On February 14, 2025, the Company completed its initial business combination, transitioning from a blank check company to an operating company. Since then, the Company has focused on advancing its subsidiaries’ product candidates and expanding its portfolio through strategic transactions. The Company has not generated revenue from product sales and continues to incur significant research and development and operating expenses. Its future performance will depend on the successful development and commercialization of its product candidates, the ability to obtain regulatory approvals, access to additional financing, and the effective management and integration of its subsidiaries. Recent Developments Amended and Restated Certificate of Incorporation As previously reported by the Company on Form 8-K dated February 13, 2025, on that date the Company filed an Amended and Restated Certificate of Incorporation with the Secretary of the State of Delaware. The terms of the Amended and Restated Certificate of Incorporation are described in the proxy statement (the “Proxy Statement”) for the special meeting of stockholders held by the Company on February 13, 2025 (the “Special Meeting”). A copy of the Company’s Amended and Restated Certificate of Incorporation is attached to the Company’s Form 8-K dated February 13, 2025, as Exhibit 3.1 and is incorporated herein by reference. Special Meeting of Stockholders On February 13, 2025, the Company held the Special Meeting of stockholders. There were 2,319,752 shares of Company common stock, par value $0.0001 per share (“Company Common Stock”), outstanding as of the January 27, 2025, record date for the Special Meeting, and a quorum was present. 103 At the Special Meeting, stockholders approved, among other matters, the Business Combination, the Amended and Restated Certificate of Incorporation, certain governance proposals, the adoption of an incentive plan, the election of directors, and the issuance of shares in connection with the Business Combination. A description of the proposals considered at the Special Meeting is set forth in the Company’s Proxy Statement for the Special Meeting, filed with the Securities and Exchange Commission on January 31, 2025, which is incorporated herein by reference. The final voting results for the proposals considered at the Special Meeting are set forth in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 13, 2025, which is incorporated herein by reference. Joinder Agreement for Share Exchange with Non-Participating Shareholders Pursuant to the Business Combination Agreement, the Company entered into a Joinder Agreement with Non-Participating Shareholders, first executed on February 10, 2025. The Joinder contemplates the transfer to OSRH, on or after January 1, 2026 (the “Trigger Date”), of up to 411,857 shares of common stock of OSR Holdings Co., Ltd., a corporation organized under the laws of the Republic of Korea (“OSRK,” and such shares, the “OSRK Shares”) held by the Joined Parties in exchange for up to 5,338,712 shares of the common stock of OSRH (the “OSRH Shares”). As a subsequent event following the end of the period covered by this Form 10-K, certain Non-Participating Shareholders exercised their put options, and an aggregate of 410,721 OSRK Shares were transferred in exchange for 5,323,986 OSRH Shares. The effective date of such exchange was January 30, 2026. Global License Agreement for VXM01 On November 21, 2025, Vaximm AG (“Vaximm”), a wholly owned subsidiary of the Company, entered into a global license agreement term sheet (the “License Agreement”) with BCM Europe AG (“BCME”), the Company’s largest shareholder. Pursuant to the License Agreement, Vaximm granted BCME an exclusive, worldwide, sublicensable license to develop, manufacture, and commercialize the VXM01 oral cancer immunotherapy platform for all indications. BCME is responsible for advancing development and pursuing a potential out-license of VXM01 to a global pharmaceutical partner. In consideration for the license, BCME agreed to pay Vaximm an upfront payment of $20.0 million and up to an additional $815.0 million in clinical, regulatory, and commercial milestone payments. In addition, BCME will pass through to Vaximm any downstream royalties received from an ultimate licensee, subject to a recovery mechanism pursuant to which BCME is entitled to recover certain development and milestone costs prior to such pass-through. As a subsequent event following the end of the period covered by this Form 10-K, on January 13, 2026, Vaximm and BCME entered into a binding term sheet (the “Binding Term Sheet”), which supersedes and replaces the previously executed non-binding term sheet in its entirety. Under the Binding Term Sheet, the upfront payment was increased to $30.0 million, consisting of $15.0 million in cash and $15.0 million in digital assets, while the aggregate milestone payments of up to $815.0 million remain unchanged. The Binding Term Sheet also maintains the royalty pass-through structure, subject to a recovery mechanism whereby BCME is entitled to recover certain development costs and a preferred return prior to such pass-through. The foregoing descriptions are summaries and are qualified in their entirety by reference to (i) the License Agreement, which is filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 25, 2025, and (ii) the Binding Term Sheet, which is filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 14, 2026, each of which is incorporated herein by reference. 104 Acquisition of Woori IO Co., Ltd. On January 26, 2026, OSR Holdings Co., Ltd. (“OSRK”), a subsidiary of the Company, completed the acquisition of Woori IO Co., Ltd. (“WORIO”), a South Korea-based medical device company developing non-invasive biosensing technology for glucose monitoring and related health parameters. The acquisition was effected pursuant to a Share Exchange Agreement, dated October 13, 2025, under which OSRK acquired all of the issued and outstanding shares of WORIO through a comprehensive share exchange, and WORIO became a wholly owned subsidiary of OSRK and an indirect subsidiary of the Company. In connection with the transaction, OSRK issued an aggregate of 84,338 shares to the former shareholders of WORIO in exchange for all outstanding shares of WORIO. No shares of the Company’s common stock were issued in connection with the transaction. The foregoing description is a summary and is qualified in its entirety by reference to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 27, 2026, which is incorporated herein by reference. Compliance with Continued Exchange Listing Requirements As previously disclosed in the Company’s Current Report on Form 8-K filed on February 21, 2024, on February 15, 2024 the Company received a letter (the “Notice”) from the Listing Qualifications Department of Nasdaq notifying the Company that the Company no longer met the minimum 300 public holders requirement for The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(3) (the “Minimum Public Holders Requirement”). On April 1, 2024, the Company submitted to Nasdaq a plan to regain compliance with the Minimum Public Holders Requirement and, on April 17, 2024, the staff of Nasdaq approved the plan and granted the Company an extension until August 13, 2024 to demonstrate compliance with the Minimum Public Holders Requirement (the “Compliance Period”). As previously reported by the Company on Form 8-K dated August 20, 2024, on that date the Company received written notice (the “Second Notice”) from Nasdaq stating that the Company has not regained compliance with the Minimum Public Holders Requirement within the Compliance Period. According to the Second Notice, unless the Company timely requested a hearing before a Hearings Panel (the “Panel”), the Company’s securities would be subject to suspension or delisted from Nasdaq. As previously reported by the Company on Form 8-K dated October 4, 2024, in accordance with the Second Notice, the Company timely requested a hearing before the Nasdaq Hearings Panel (the “Panel”), which automatically stayed any suspension or delisting action of the Company’s securities, and the hearing was held on October 1, 2024. On October 4, 2024, the Panel granted the Company’s request for continued listing on the Nasdaq, subject to the requirement that on or before February 17, 2025, the Company shall demonstrate compliance with Listing Rule 5505, and that during the exception period, the Company shall provide prompt notification of any significant events that occur during this time that may affect the Company’s compliance with Nasdaq requirements. 105 On March 7, 2025, the Hearings Advisor from the Nasdaq Office of General Counsel sent a letter to Donohoe Advisory Associates LLC, who have advised the Company on SEC compliance matters, noting that on February 13, 2025, the Company had completed its business combination with the Company Co., Ltd. and finding that “[t]he post transaction entity demonstrated compliance with the requirements for initial listing under Listing Rule 5505 and the securities of OSRH began trading on the Nasdaq Capital Market February 18, 2025. ... [a]ccordingly, the Panel has determined to continue the listing of the Company’s securities on The Nasdaq Stock Market LLC and is closing this matter.” On September 5, 2025, the Company received a notification from The Nasdaq Stock Market LLC (“Nasdaq”) stating that the Company was not in compliance with Nasdaq Listing Rule 5550(a)(2) after the closing bid price fell below USD 1.00 per share for 30 consecutive business days. The Company has been provided a grace period until March 4, 2026, to regain compliance by maintaining a closing bid price of at least USD 1.00 for ten consecutive business days. The Company did not regain compliance within that period and Nasdaq subsequently granted the Company an additional 180-day compliance period, extending the deadline to August 31, 2026, to regain compliance. If the Company does not regain compliance by that date, the Company’s securities may become subject to delisting from Nasdaq. The Company intends to monitor the closing bid price of its common stock and may pursue available options to regain compliance, including a reverse stock split, although there can be no assurance that such actions would be successful or that the Company will be able to maintain compliance with Nasdaq’s continued listing standards in the future. Status of ELOC Agreement The ELOC Agreement, inclusive of its associated Warrants and Convertible Note, remains in place under the terms referenced in the Company’s Current Report on Form 8-K filed on February 28, 2025, as amended by the amendment to the ELOC Agreement reported on Form 8-K filed on May 12, 2025. From January 1, 2026 to March 20, 2026, the Company has drawn under the ELOC facility to sell an aggregate of 1,373,000 shares of the Company’s common stock to White Lion, and White Lion did not exercise any warrants to purchase shares of the Company’s common stock during the same period. Results of Operations Comparison of the Year Ended December 31, 2024 and 2025 The following tables present OSR Holdings’ statements of operations for the year ended December 31, 2024 and 2025, and percentage change between the two periods: Year Ended December 31, 2024 2025 Change $ Change % Net Sales: 3,530,303 2,905,805 -626,498 -18 % Cost of Sales 2,719,067 2,312,900 -406,167 -15 % Gross Profit 811,236 592,905 -218,331 -27 % Expenses: Selling, general and administrative expenses 12,503,433 18,928,908 6,425,475 51 % Operating income (loss) (11,692,197 ) (18,336,004 ) -6,643,807 57 % Other income (expense) (200,481 ) (10,552,358 ) -10,351,877 5,164 % Profit (loss) before income taxes (11,892,678 ) (28,888,361 ) -16,995,683 143 % 106 Net Sales, Cost of Sales, Gross Profit OSR Holdings’ net sales, cost of sales, and gross profit are primarily derived from RMC, its subsidiary engaged in the distribution of medical devices. RMC’s net sales for the year ended December 31, 2025 decreased by $626,498, or 18%, compared to the prior year. Cost of sales also decreased by $406,167, or 15%, resulting in a decline in gross profit of $218,331, or 27%. The primary driver of these changes was a modification in contractual arrangements with two of RMC’s suppliers. With one supplier, RMC transitioned from a traditional purchase-and-resale model to a consignment-based arrangement under which only commission revenue is recognized. As a result, reported net sales decreased accordingly. With another supplier, the supplier elected to internalize distribution activities in Korea. In connection with this transition, RMC sold its previously held inventory back to the supplier at cost, which materially impacted the gross margin for the period. In addition, the cost of products purchased from certain key customers increased by approximately 5%, which also negatively affected the gross profit margin. Selling, General and Administrative Expenses For the year ended December 31, 2025, OSR Holdings’ selling, general and administrative (SG&A) expenses increased by $6,425,475, or 51%, compared to the prior year. This increase was primarily attributable to a significant rise in professional service fees, including legal, accounting, and disclosure-related expenses incurred in connection with the business combination completed on February 14, 2025. In addition, costs increased as the Company incurred expenses necessary to fulfill its obligations as a public company. The increase was also driven by higher personnel-related expenses, including salaries, severance payments, employee benefits, bonuses, and travel costs. Additional SG&A expenses included amortization of intangible assets, research and development expenses, non-income taxes, insurance premiums, and employee recruiting and training expenses. Research and Development (R&D) Expenses OSR Holdings’ research and development (R&D) expenses consist primarily of development costs associated with product candidates in pre-clinical and clinical trials, as well as related salaries and contractor costs. R&D costs are expensed as incurred. 107 For the year ended December 31, 2025, OSR Holdings incurred $318,446 in R&D expenses, representing an increase of $157,290, or 98%, compared to $161,155 in the prior year. These expenses were primarily related to maintenance of the cGMP facility of Darnatein, one of the Company’s subsidiaries. Beginning in the second half of 2026, OSR Holdings expects to incur and report R&D-related expenses primarily through its subsidiaries actively engaged in research and development at an estimated $2.5 million to $3.0 million per quarter, which could potentially increase to $5.0 million to $6.0 million per quarter. Operating Loss For the year ended December 31, 2025, OSR Holdings’ operating loss increased by $6,643,807, or 57%, compared to the prior year. As discussed in the section titled “Selling, General and Administrative Expenses,” this increase was primarily attributable to higher professional service fees and personnel-related expenses incurred in connection with the Business Combination completed on February 14, 2025. Other Income (Expense) OSR Holdings’ other income (expense) consists of interest income, interest expense, foreign exchange-related gains and losses, and other non-operating items. For the year ended December 31, 2025, net other expenses increased by $10,351,877, from $200,481 in the prior year to $10,552,358. This substantial increase was primarily attributable to approximately $8.5 million of merger-related expenses incurred in connection with the business combination completed on February 14, 2025. These merger-related expenses were one-time in nature and did not involve cash outflows. Loss Before Income Taxes For the year ended December 31, 2025, OSR Holdings’ loss before income taxes increased by $16,995,683, or 143%, compared to the prior year. As discussed in the section on Selling, General and Administrative Expenses, this increase was primarily attributable to higher SG&A expenses incurred in connection with the business combination completed on February 14, 2025, as well as the recognition of approximately $8.5 million in one-time, non-cash merger-related expenses. In addition, the increase in loss before income taxes was further impacted by expenses of approximately $4.8 million related to the warrants and convertible notes issued in connection with the Company’s agreement with White Lion Capital, LLC on May 6, 2025. These expenses primarily consisted of 1) non-cash losses from net changes in the fair value of derivative liabilities, 2) interest expense related to the convertible notes and 3) issuance costs, including commission fees. The warrants and convertible notes were accounted for as a single financial transaction, and the proceeds were allocated between the instruments based on their relative fair values. As of December 31, 2025, the convertible notes had an outstanding principal balance of $265,000; however, such convertible notes were fully repaid on January 12, 2026, and no balance remains as of the date of this report. In addition, the loss recognized from the remeasurement of warrant liabilities may reverse in future periods upon settlement, expiration, or other extinguishment of the warrants, at which point the related liability would be derecognized, and upon exercise, reclassified to equity. For additional information regarding the terms of the warrants and convertible notes, see “Liquidity and Capital Resources.” Liquidity and Capital Resources Since its inception through December 31, 2025, OSR Holdings has incurred significant operating losses and negative cash flows from operating activities. The Company recorded an operating loss of approximately $18.34 million for the year ended December 31, 2025, compared to an operating loss of approximately $11.69 million for the same period in 2024. As of December 31, 2025, OSR Holdings had an accumulated deficit of approximately $37.17 million. 108 To date, OSR Holdings has funded its operations primarily through the issuance of common stock and convertible bonds, bank borrowings, loans from affiliates, and, to a lesser extent, product revenue generated by its subsidiary, RMC. As of December 31, 2025, the Company had cash and cash equivalents of approximately $1.7 million, consisting primarily of bank deposits. The Company incurred significant expenses in connection with the business combination and the filing of its Form S-4 registration statement, which, together with other general operating expenses, reduced the funds available for operations and created an urgent need for additional capital. In response, in February 2025, OSR Holdings entered into an equity line of credit (“ELOC”) agreement with an investor, providing for up to $80 million in potential capital. As of December 31, 2025, the Company had issued a total of 1,692,500 shares under the ELOC, raising gross proceeds of $1,259,753. In addition, the Company has executed or is exploring various financing initiatives through the issuance of warrants and notes. OSR Holdings expects to continue utilizing the ELOC until the end of the Commitment Period (December 31, 2026) as set forth by the ELOC Agreement with White Lion, however we intend to exercise a higher level of prudence and control in the execution of ELOC in order to minimize the dilution and price impact it might have on our equity’s market. Also, we plan to institute new equity facilities which are generally considered as less dilutive and more controllable than ELOC, such as At-the-Market (ATM) offering following our submission of this Form 10-K. Duksung Promissory Note As previously reported by the Company on Form 8-K dated October 22, 2024, on October 16, 2024, the Company issued an unsecured promissory note to Duksung Co., LTD. (“Duksung”) in the principal amount of $800,000 (the “Duksung Promissory Note”). The Duksung Promissory Note originally bore interest at a simple rate of 5% per annum and, unless earlier converted or prepaid, was scheduled to mature on October 15, 2025. Under the original terms, in the event of a Qualified PIPE Financing (as defined in the Duksung Promissory Note), the note would automatically convert into shares of the Company’s common stock at a conversion price of $8.10 per share. As of the Business Combination on February 14, 2025, a Qualified PIPE Financing had not occurred. On October 16, 2025, the Company and Duksung entered into an addendum to the Duksung Promissory Note pursuant to which (i) the outstanding principal amount was reduced to $650,000 reflecting a partial repayment of $150,000, (ii) the maturity date was extended to October 15, 2026, (iii) the interest rate was set at 7% per annum for the remaining term, and (iv) certain terms of the note were amended, including the removal of conditions previously required for conversion, such that the note is convertible in accordance with its amended terms. The outstanding principal balance of $650,000 is convertible into 80,246 shares of the Company’s common stock. The foregoing description of the Duksung Promissory Note is qualified in its entirety by reference to the full text of the Promissory Note, a copy of which is filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 22, 2024 and incorporated herein by reference. The foregoing description of the addendum to the Duksung Promissory Note is qualified in its entirety by reference to the full text of such addendum, a copy of which is filed as Exhibit 10.39 to this Annual Report on Form 10-K and incorporated herein by reference. ELOC Agreement As previously disclosed on the Company’s Current Report on Form 8-K filed on February 28, 2025, on February 25, 2025 the Company entered into a common stock purchase agreement (the “Common Stock Purchase Agreement”) and a related registration rights agreement with White Lion GBM Innovation Fund (“White Lion”), which agreements were subsequently amended, as disclosed in the Company’s Current Report on Form 8-K filed on May 12, 2025. Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Common Stock Purchase Agreement, as amended. 109 Pursuant to the Common Stock Purchase Agreement, as amended, the Company has the right, but not the obligation, to require White Lion to purchase, from time to time, shares of its common stock for aggregate gross proceeds of up to approximately $80,000,000, subject to certain limitations and conditions set forth therein. In connection with the foregoing, the Company agreed to issue commitment shares and a warrant to White Lion as part of the commitment fee, including a warrant to purchase up to approximately $4,000,000 of shares of the Company’s common stock. The amendment also updated the Company’s registration obligations to require the filing of a resale registration statement covering all shares issuable under the arrangement, including shares issued pursuant to purchase notices, commitment shares, and shares issuable upon exercise of the warrant. The foregoing description of the Common Stock Purchase Agreement, as amended, is qualified in its entirety by reference to the full text of such agreement and the related amendment, copies of which are filed as exhibits to the Company’s Current Reports on Form 8-K filed on February 28, 2025 and May 12, 2025, respectively, and are incorporated herein by reference. Off-Balance Sheet Arrangements We have no obligations, assets or liabilities which would be considered off-balance sheet arrangements as of December 31, 2025. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets. Contractual Obligations We do not have any long-term debt, capital lease obligations, operating lease obligations, purchase obligations or long-term liabilities, other than an agreement to pay an affiliate of our Sponsor a monthly fee of $7,500, for office space, utilities and secretarial and administrative support. We began incurring these fees on March 1, 2023 and will continue to incur these fees monthly through and after our initial business combination to the extent that our corporate administrative needs are served through the facilities and assets of our Sponsor. Chardan is entitled to a deferred underwriting commission of $2,070,000. Also, we have incurred deferred legal fees payable upon consummation of our initial business combination of approximately $1.25 million. The holders of the founder shares, equity participation shares, placement units, and units that may be issued upon conversion of working capital loans (and in each case holders of their component securities, as applicable) are entitled to registration rights pursuant to the registration rights agreement. These holders are entitled to make up to two demands, excluding short form registration demands, that we register such securities for sale under the Securities Act. In addition, these holders will have “piggyback” registration rights to include their securities in other registration statements filed by us. We will bear the expenses incurred in connection with the filing of any such registration statements. Chardan may not exercise its demand and “piggyback” registration rights after five and seven years, respectively, after the date of our prospectus issued in connection with our IPO and may not exercise its demand rights on more than one occasion. 110 Critical Accounting Policies and Estimates The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have not identified any critical accounting estimates. Recent Accounting Standards Accounting Pronouncements Adopted In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , which provides an exception to fair value measurement for contract assets and contract liabilities related to revenue contracts acquired in a business combination. The ASU requires an entity (acquirer) to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. At the acquisition date, an acquirer should account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts. The ASU is effective for the Company for annual and interim periods in fiscal years beginning after December 15, 2023. The ASU is applied to business combinations occurring on or after the effective date. The Company adopted this ASU as of January 1, 2024 and there is no impact on the Company’s consolidated financial statements. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures , which requires enhanced disclosure of significant segment expenses on an annual and interim basis. This ASU will be effective for the annual periods beginning the year ended December 31, 2024, and for interim periods beginning January 1, 2025. Early adoption is permitted. Upon adoption, this ASU should be applied retrospectively to all prior periods presented in the financial statements. The Company adopted this ASU as of January 1, 2025 and there is not impact on the Company’s consolidated financial statements. Accounting Pronouncements Issued but Not Yet Adopted In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements – Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative . The ASU modifies the disclosure or presentation requirements of a variety of Topics in the Codification to align with the SEC’s regulations. The ASU also makes those requirements applicable to entities that were not previously subject to the SEC’s requirements. The ASU is effective for the Company two years after the effective date to remove the related disclosure from Regulation S-X or S-K. As of the date these financial statements have been made available for issuance, the SEC has not yet removed any related disclosure. The Company does not expect the adoption of ASU 2023-06 to have a material effect on its consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , which improves the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the effective tax rate reconciliation and income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. This ASU will be effective for the annual periods beginning the year ended December 31, 2026. Early adoption is permitted. Upon adoption, this ASU can be applied prospectively or retrospectively. The Company is currently evaluating the impact this ASU will have on the Company’s consolidated financial statements. Item 7A. Quantitative and Qualitative Disclosures about Market Risk We are a smaller reporting company as defined in Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item. Item 8. Financial Statements and Supplementary Data This information appears following Item 16 of this Annual Report on Form 10-K and is included herein by reference. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.