What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-03-02 compared with 2025-02-19 · 721 added, 549 removed, 562 unchanged (69% of the section changed)

ITEM 8—FINANCIAL STATEMENTS AND SUPPLEMENTARY

8—FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Reports of Independent Registered Public Accounting Firm (PCAOB ID 49 ) 47

Consolidated Balance Sheets at December 31, 2024 and 2023 50

Consolidated Statements of Income and Comprehensive Income for the years ended December 31, 2024, 2023 and 2022 52

Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2024, 2023 and 2022 53

Consolidated Statements of Cash Flows for the years ended December 31, 2024, 2023 and 2022 54

Reports of Independent Registered Public Accounting

Firm (PCAOB ID 49 )

Consolidated Balance Sheets at December 31, 2025

Consolidated Statements of Income and Comprehensive

Income for the years ended December 31, 2025, 2024 and 2023

Consolidated Statements of Stockholders’ Equity

for the years ended December 31, 2025, 2024 and 2023

Consolidated Statements of Cash Flows for the years

ended December 31, 2025, 2024 and 2023

Notes to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm

Report of Independent Registered Public

Accounting Firm

To the Stockholders and the Board of Directors of Sturm, Ruger &

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and Subsidiaries’

(the Company) internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control

— Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013.

In our opinion,

the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on

criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the

Treadway Commission in 2013.

We have also audited, in accordance with the standards of the Public

Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2023

and 2022, and the related consolidated statements of income and comprehensive income, stockholders' equity, and cash flows for each of

the three years in the period ended December 31, 2023, and our report dated February

19, 2025 expressed an unqualified opinion.

(the Company) internal control over financial reporting as of December 31, 2025, based on criteria established in Internal

Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31,

2025, based on criteria established in Internal Control — Integrated Framework issued by

the Committee of Sponsoring Organizations of the Treadway Commission in 2013.

We have also audited, in accordance with the standards of the Public Company

Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 2025 and 2024, the related

consolidated statements of income and comprehensive income, stockholders’ equity, and cash flows for each of the three years in

the period ended December 31, 2025 and the related notes to the consolidated financial statements of the Company and our report dated,

March 2, 2026 expressed an unqualified opinion.

As described in Management’s Report on Internal Control over

Financial Reporting, management has excluded its Hebron operations resulting from the acquisition of Anderson Manufacturing assets from

its assessment of internal control over financial reporting as of December 31, 2025, because it was acquired by the Company in a purchase

business combination in the third quarter of 2025.

We have also excluded Hebron operations resulting from the acquisition of Anderson

Manufacturing assets from our audit of internal control over financial reporting.

The Hebron operations’ total assets and net sales

represent approximately 3% and less than 1%, respectively, of the related consolidated financial statement amounts as of and for the year

ended December 31, 2025.

Basis for Opinion

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Stamford, Connecticut

February 19, 2025

March 2, 2026

Report of Independent Registered Public Accounting

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Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31,

2024, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations

of the Treadway Commission in 2013, and our report dated February 19, 2025 expressed an unqualified opinion on the effectiveness of the

Company's internal control over financial reporting.

2025, based on criteria established in Internal Control — Integrated Framework issued by

the Committee of Sponsoring Organizations of the Treadway Commission in 2013, and our report dated March 2, 2026 expressed an unqualified

opinion on the effectiveness of the Company's internal control over financial reporting.

Basis for Opinion

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We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

Critical Audit Matter

The critical audit matter communicated below is a matter arising from

the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging,

subjective or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements,

taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit

matter or on the accounts or disclosures to which it relates.

the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective

or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken

as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter

or on the accounts or disclosures to which it relates.

Last-In, First-Out Inventory Reserve

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all of the Company’s inventories are valued at the lower of cost, which is principally determined by the last-in, first-out (LIFO)

method, or net realizable value, and the Company’s consolidated net inventories balance of $76.5 million as of December 31, 2024,

included a LIFO inventory reserve of $66.4 million.

The Company records its net inventories under the LIFO method at the end of each year

based on the inventory levels at the measurement date and the prevailing inventory costs existing at that time, which are estimated using

a complex manual calculation.

net realizable value, and the Company’s consolidated net inventories

balance of $42.9 million as of December 31, 2025, included a LIFO inventory reserve of $67.1 million.

The Company records its net inventories

under the LIFO method at the end of each year based on the inventory levels at the measurement date and the prevailing inventory costs

existing at that time, which are estimated using a complex manual calculation.

We identified the LIFO inventory reserve as a critical audit matter

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calculations to estimate current year price level changes through the development of a prior year and a current year cumulative price

Auditing management’s estimate of the LIFO inventory reserve was complex and required a high degree of auditor judgement

and increased audit effort due to the complexities of management’s manual calculations.

Auditing management’s estimate of the LIFO inventory reserve was complex and required a high degree of auditor judgment and

increased audit effort due to the complexities of management’s manual calculations and the impact those manual calculations have

on the accounting estimate.

Our audit procedures related to the Company’s LIFO inventory

reserve included the following, among others:

● We obtained an understanding of the relevant controls

related to the LIFO inventory reserve and tested such controls for design and operating effectiveness, including controls related to

management’s review of the calculations related to the estimate of the current year price level changes, the calculation of

the cumulative price indexes, and the estimate of the LIFO inventory reserve.

● We tested the completeness, accuracy, and relevance of the

significant underlying data used in management’s estimate of the current year price level changes, the calculation of cumulative

price index and the LIFO inventory reserve.

● We tested the mathematical accuracy of the Company’s

calculation to estimate the LIFO inventory reserve.

● We evaluated the appropriateness of management’s methodologies

to develop the estimate of the LIFO inventory reserve.

● We evaluated the reasonableness of management’s estimate

of the current year price level changes by comparing management’s estimate to external market data.

/s/ RSM US LLP

We obtained an understanding of the relevant controls related to the LIFO inventory

reserve and tested such controls for design and operating effectiveness, including controls related to management’s review of the

calculations related to the estimate of the current year price level changes, the calculation of the cumulative price indexes, and the

estimate of the LIFO inventory reserve.

We tested the completeness, accuracy, and relevance of the underlying data used

in management’s estimate of the current year price level changes, the calculation of cumulative price index and the LIFO inventory

We tested the mathematical accuracy of the Company’s calculation to estimate

the LIFO inventory reserve.

We evaluated the appropriateness of management’s methodologies to develop

the estimate of the LIFO inventory reserve.

We evaluated the reasonableness of management’s estimate of the current

year price level changes by comparing management’s estimate to external market data.

We have served as the Company's auditor since 2005.

Stamford, Connecticut

February 19, 2025

March 2, 2026

Consolidated Balance Sheets

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Authorized shares – 40,000,000

2024 – 24,467,983 issued,

16,790,824 outstanding

2023 – 24,437,020 issued,

17,458,620 outstanding

2025 – 24,490,478

2024 – 24,467,983

Additional paid-in capital

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Treasury stock – at cost

2024 – 7,677,159 shares

2023 – 6,978,400 shares

2025 – 8,546,225

2024 – 7,677,159

Total Stockholders’ Equity

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(In thousands, except per share data)

Year ended December 31,

ended December 31,

Net firearms sales

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General and administrative

Other operating income, net

Other operating expense (income), net

Total operating expenses

Operating income

Operating (loss) income

Other income:

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Total other income, net

Income before income taxes

Net income and comprehensive income

Basic Earnings Per Share

Diluted Earnings Per Share

(Loss) income before income taxes

Net (loss) income and comprehensive (loss) income

Basic (Loss) Earnings Per Share

Diluted (Loss) Earnings Per Share

Weighted average number of common shares outstanding – Basic

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Balance at December 31, 2022

$ ( 145,590 )

Dividends paid

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Unpaid dividends accrued

Repurchase of 4,440 shares of common stock

Repurchase of 264,062

shares of common stock

Balance at December 31, 2023

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Unpaid dividends accrued

Repurchase of 264,062 shares of common stock

Repurchase of 835,060

shares of common stock

Balance at December 31, 2024

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Unpaid dividends accrued

Repurchase of 835,060 shares of common stock

Repurchase of 732,765

shares of common stock

Balance at December 31,2025

$ ( 192,031 )

See accompanying notes to consolidated financial statements.

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(In thousands)

Year ended December 31,

Operating Activities

Adjustments to reconcile net income to cash provided by operating activities:

Net (loss) income

Adjustments to reconcile net (loss) income to cash provided by operating activities:

Depreciation and amortization

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Excess and obsolescence inventory reserve

Gain on sale of assets

Inventory write-off

Loss (gain) on disposal of assets

Deferred income taxes

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Property, plant and equipment additions

Purchase of Anderson Manufacturing assets

Purchases of short-term investments

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Repurchase of common stock

Payment of employee withholding tax related to share-based compensation

Payment of employee withholding tax

related to share-based compensation

Cash used for financing activities

(Decrease) increase in cash and cash equivalents

Increase (decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of year

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See accompanying notes to consolidated financial statements.

Notes to Consolidated Financial Statements

to Consolidated Financial Statements

(Dollars in thousands, except per share)

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is principally engaged in the design, manufacture, and sale of firearms to domestic customers.

Approximately 99 % of sales were from firearms.

Export sales represented approximately 5 % of firearms sales.

The Company’s design and manufacturing operations are located in the

United States and almost all product content is domestic.

The Company’s firearms are sold through a select number of independent

wholesale distributors principally to the commercial sporting market.

The Company manufactures investment castings made

from steel alloys and metal injection molding (“MIM”) parts for internal use in its firearms and utilizes available capacity

Approximately 99 %

of sales were from firearms.

Export sales represented approximately 5 %

of firearms sales.

The Company’s design and manufacturing operations are located in the United States and almost all product content

The Company’s firearms are sold through a select number of independent wholesale distributors principally to the commercial

sporting market.

The Company manufactures investment castings

made from steel alloys and metal injection molding (“MIM”) parts for internal use in its firearms and utilizes available capacity

to manufacture and sell investment castings and MIM parts to unaffiliated, third-party customers.

Castings were less than 1 % of the Company’s

total sales for the year ended December 31, 2024.

Castings were less than 1 %

of the Company’s total sales for the year ended December 31, 2025.

of Financial Statements

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All significant intercompany accounts and transactions have been eliminated.

Revenue Recognition

The Company recognizes revenue in accordance with

the provisions of Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“ASC 606”), which became

effective January 1, 2018.

the provisions of Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”),

which became effective January 1, 2018.

Substantially all product sales are sold FOB (free on board) shipping point.

Customary payment terms are 2%

30 days , net 40 days.

Generally, all performance obligations are satisfied when product is shipped and the customer takes ownership and

assumes the risk of loss.

Customary payment

terms are 2% 30 days, net 40 days.

Generally, all performance obligations are satisfied when product is shipped and the customer takes

ownership and assumes the risk of loss.

In some instances, sales include multiple performance obligations.

The most common of these instances relates

to sales promotion programs under which downstream customers are entitled to receive no charge products based on their purchases of certain

of the Company’s products from the independent distributors.

The most common of these instances

relates to sales promotion programs under which downstream customers are entitled to receive no charge products based on their purchases

of certain of the Company’s products from the independent distributors.

The fulfillment of these no charge products

is the Company’s

responsibility.

In such instances, the Company allocates the revenue of the promotional sales based on the estimated level of participation

in the sales promotional program and the timing of the shipment of all of the firearms included in the promotional program, including

the no charge firearms.

Revenue is recognized proportionally as each performance obligation is satisfied, based on the relative customary

price of each product.

Customary prices are generally determined based on the prices charged to the independent distributors.

change in contract liabilities for a given period is reported as an increase or decrease to sales.

The Company accounts for cash sales

discounts as a reduction in sales.

Amounts billed to customers for shipping and handling fees are included in net sales and costs incurred

by the Company for the delivery of goods are classified as selling expenses.

is the Company’s responsibility.

instances, the Company allocates the revenue of the promotional sales based on the estimated level of participation in the sales promotional

program and the timing of the shipment of all of the firearms included in the promotional program, including the no charge firearms.

is recognized proportionally as each performance obligation is satisfied, based on the relative customary price of each product.

prices are generally determined based on the prices charged to the independent distributors.

The net change in contract liabilities for

a given period is reported as an increase or decrease to sales.

The Company accounts for cash sales discounts as a reduction in sales.

Amounts billed to customers for shipping and handling fees are included in net sales and costs incurred by the Company for the delivery

of goods are classified as selling expenses.

Federal excise taxes are excluded from net sales.

Cash Equivalents

On July 1, 2025, the Company acquired substantially

all of the assets of Anderson Manufacturing (“Anderson”) for a total purchase price of $ 15.8

million in cash, with $ 15

million having been paid in cash at the closing of the transaction and $ 0.8

million having been held back from the purchase price for the purposes described in Note 2 below (the “Anderson Acquisition”).

The Anderson Acquisition was funded by the Company

with cash on hand and has been accounted for in accordance with ASC 805 - Business Combinations, which requires, among other things, an

assignment of the acquisition consideration transferred to the sellers for the assets acquired, using the bottom up approach, to estimate

their fair value at acquisition date.

Any excess of the fair value of the purchase consideration over these identified net assets was

recorded as goodwill.

Our estimates of fair value are based upon assumptions believed to be reasonable, yet are inherently uncertain and,

as a result, may differ from actual performance.

During the measurement period, not to exceed one year from the date of acquisition, the

Company may record adjustments to the estimated fair values of the assets acquired and liabilities assumed with a corresponding adjustment

to goodwill in the period in which such revised estimates are identified.

No such adjustments were recorded as of December 31, 2025.

and Cash Equivalents

The Company considers interest-bearing deposits

with financial institutions with remaining maturities of three months or less at the time of acquisition to be cash equivalents.

Measurements of Short-term Investments

Value Measurements

Fair value is defined as the price that would

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techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.

The carrying amounts of financial instruments,

including cash, short-term investments, accounts receivable, accounts payable and accrued liabilities, approximate fair value due to the

short-term maturity of these items.

of December 31, 2025, the Company’s short-term investments consist of U.S.

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and investments in a bank-managed money market fund that invests exclusively in United States Treasury obligations and is valued

at the net asset value ("NAV") daily closing price, as reported by the fund, based on the amortized cost of the fund’s

securities (Level 2) .

For the bank-managed money market fund, t he NAV

is used as a practical expedient to estimate fair value.

This practical expedient is not used when it is determined to be probable that

the fund will sell the investment for an amount different than the reported NAV .

Such securities are classified as held to maturity, since the Company has the intent and ability to do so, and are carried at cost plus

accrued interest, which approximates fair value.

at the net asset value ("NAV") daily closing price, as reported by the fund, based on the amortized cost of the fund’s securities

For the bank-managed money market fund, t he NAV is used as

a practical expedient to estimate fair value.

This practical expedient is not used when it is determined to be probable that the fund

will sell the investment for an amount different than the reported NAV .

securities are classified as held to maturity, since the Company has the intent and ability to do so, and are carried at cost plus accrued

interest, which approximates fair value.

The fair value of inventory acquired as part of

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Plant and Equipment

Property, plant and equipment are carried at cost.

Depreciation is computed over useful lives using the straight-line and declining balance methods predominately over 15 years for buildings,

7 years for machinery and equipment and 3 years for tools and dies.

When assets are retired, sold or otherwise disposed of, their gross

carrying values and related accumulated depreciation are removed from the accounts and a gain or loss on such disposals is recognized

when appropriate.

Property, plant and equipment are carried at

Depreciation is computed over useful lives using the straight-line and declining balance methods predominately over 15

years for buildings, 7

years for machinery and equipment and 3

years for tools and dies.

When assets are retired, sold or otherwise disposed of, their gross carrying values and related accumulated

depreciation are removed from the accounts and a gain or loss on such disposals is recognized when appropriate.

Maintenance and repairs are charged to operations;

replacements and improvements are capitalized.

Long-lived Assets

The Company evaluates the carrying value of long-lived

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Where quoted market

prices are not available, the Company

estimates fair value using the estimated future cash flows generated by the assets discounted at

prices are not available, the Company estimates fair value using the estimated future cash flows generated by the assets discounted at

a rate commensurate with the risks associated with the recovery of the assets.

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are any indications of impairment related to long-lived assets.

The Company’s goodwill represents the excess

of the purchase price of business combinations over the fair value of the net assets acquired.

We assess goodwill for impairment on an

annual basis during the fourth quarter of each year, and between annual tests whenever events or changes in circumstances indicate that

the carrying amount may not be recoverable.

An impairment exists by the amount the fair value of a reporting unit to which goodwill has

been allocated is less than their respective carrying values.

The impairment for goodwill is limited to the total amount of goodwill allocated

to the reporting unit.

Goodwill impairment testing requires significant judgment and management estimates, including, but not limited

to, the determination of (i) the number of reporting units, (ii) the goodwill and other assets and liabilities to be allocated

to the reporting units and (iii) the fair values of the reporting units.

The estimates and assumptions described above, along with

other factors such as discount rates, will significantly affect the outcome of the impairment tests and the amounts of any resulting impairment

As of December 31, 2024, the Company does not believe there are any indications of impairment related to goodwill.

The Company’s goodwill represents

the excess of the purchase price of business combinations over the fair value of the net assets acquired.

We assess goodwill for impairment

on an annual basis during the fourth quarter of each year, and between annual tests whenever events or changes in circumstances indicate

that the carrying amount may not be recoverable.

An impairment exists by the amount the fair value of a reporting unit to which goodwill

has been allocated is less than their respective carrying values.

The impairment for goodwill is limited to the total amount of goodwill

allocated to the reporting unit.

Goodwill impairment testing requires significant judgment and management estimates, including, but not

limited to, the determination of (i) the number of reporting units, (ii) the goodwill and other assets and liabilities to be

allocated to the reporting units and (iii) the fair values of the reporting units.

The estimates and assumptions described above,

along with other factors such as discount rates, will significantly affect the outcome of the impairment tests and the amounts of any

resulting impairment losses.

December 31, 2025, the Company does not believe

there are any indications of impairment related to goodwill.

Income taxes are accounted for using the asset

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and the tax basis of the Company’s assets and liabilities.

Product Liability

The Company provides for product liability claims

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products sold.

Advertising Costs

The Company includes advertising costs in selling

expenses and these costs are expensed as incurred.

Advertising costs for 2024, 2023, and 2022, were $ 3.4 million, $ 3.1 million, and $ 2.4

Advertising costs for 2025, 2024, and 2023, were $ 3.3

million, $ 3.4

million, and $ 3.1

million, respectively.

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are included in selling expense.

Such costs totaled $ 4.3 million, $ 4.4 million, and $ 4.7 million in 2024, 2023, and 2022, respectively.

Research and Development

Such costs totaled $ 3.8

million, $ 4.3

million, and $ 4.4

million in 2025, 2024, and 2023, respectively.

and Development

In 2025, 2024, and 2023, the Company spent approximately

$ 8.2 million, $ 9.8 million, and $ 9.6 million, respectively, on research and development activities relating to new products and the improvement

of existing products.

These costs are included in costs of products sold and are expensed as incurred.

These costs are capitalized for

tax purposes under the provisions of the Tax Cuts and Jobs Act of 2017 that relate to IRS Code Section 174, as discussed in Note 13.

Earnings per Share

million, $ 8.2

million, and $ 9.8

million, respectively, on research and development activities relating to new products and the improvement of existing products.

costs are included in costs of products sold and are expensed as incurred.

These costs are capitalized for tax purposes under the provisions

of the Tax Cuts and Jobs Act of 2017 that relate to IRS Code Section 174, as discussed in Note 13.

Basic earnings per share is based upon the weighted-average

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and deferred stock outstanding using the treasury stock method.

Recent Accounting Pronouncements

In November of 2023, the FASB issued ASU 2023-07,

“Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.” The updated accounting guidance requires

enhanced reportable segment disclosures, primarily related to significant segment expenses which are regularly provided to the chief operating

decision maker.

The guidance is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning

after December 15, 2024.

The Company adopted ASU 2023-07, beginning with the current filing.

The adoption of the new guidance required

additional disclosures, but did not have a material impact to the Company.

Refer to Note 17, Operating Segment Information, for the updated

presentation.

In December of 2023, the FASB issued ASU 2023-09,

“Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.” The updated accounting guidance requires expanded income

tax disclosures, including the disaggregation of existing disclosures related to the effective tax rate reconciliation and income taxes

The guidance is effective for fiscal years beginning after December 15, 2024.

Prospective application is required, with retrospective

application permitted.

The Company is currently evaluating the effect the updated guidance will have on its financial statement disclosures.

Accounting Pronouncements

In December of 2023, the FASB issued Accounting Standards

Update (“ASU”) 2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.” The updated accounting

guidance requires expanded income tax disclosures, including the disaggregation of existing disclosures related to the effective tax rate

reconciliation and income taxes paid.

The guidance is effective for

fiscal years beginning after December 15, 2024.

application is required, with retrospective application permitted.

Refer to Note 13, Income Taxes, for the updated presentation.

In November 2024, the FASB issued ASU No.

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Early adoption is permitted.

Company is currently evaluating the effect the updated guidance will have on its financial statement disclosures.

is currently evaluating the effect the updated guidance will have on its financial statement disclosures.

In December 2025, the FASB issued its final ASU

which makes improvements to the Accounting Standards Codification in response to feedback from stakeholders.

This standard, issued as

ASU 2025-12, specifically updates the Codification for a broad range of Topics arising from technical corrections, unintended application

of the Codification, clarifications, and other minor improvements.

This update is effective for annual reporting periods beginning after

December 15, 2026, including interim reporting periods within those annual reporting periods.

The Company is currently evaluating the

impact of adopting ASU 2025-12.

In September 2025, the FASB issued ASU No.

“Intangibles - Goodwill and Other - Internal Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal

Use Software.” The standard modernizes and simplifies guidance for internal-use software costs.

This guidance is effective for annual

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

is evaluating the impact of this guidance on its Consolidated Financial Statements.

Acquisition of Anderson Manufacturing Assets

As described in Note 1, the

Company closed on the Anderson Acquisition on July 1, 2025.

The Company paid $ 15.0

million dollars in cash for Anderson assets at the closing of the transaction, with an additional $ 0.8

million held back for the purposes described below.

The Anderson Acquisition included, among other things, property, equipment, inventory,

and all intellectual property related to Anderson, including the Anderson trademarks and tradenames, and all derivatives thereof.

The primary purpose of the

Anderson Acquisition was to increase the Company’s production capabilities.

The Anderson Acquisition was accounted for in accordance

with ASC Topic 805, Business Combinations.

Accordingly, the total purchase price has been allocated to the assets based on their fair

value at the date of acquisition.

The Company assumed no debt or long-term liabilities in this transaction.

These allocations reflect

various provisional estimates that were based on the information available at the time and are subject to change during the purchase price

allocation period.

The following table summarizes

the Company's preliminary fair value of the assets acquired, as of July 1, 2025, for the Company’s Anderson Acquisition.

Purchase Price

Cash paid to sellers

Total Purchase Price

Purchase Price Allocation

Assets Acquired

Land and building

Machinery and equipment

Net Assets Acquired

Identifiable assets acquired

were recorded at their estimated fair values based on the methodology described under “Fair Value Measurements” in Note 1

- Significant Accounting Policies.

The Fair Value of any intangible

assets acquired in the Anderson Acquisition were considered negligible.

The Company held back $ 0.8

million from their purchase payment for potential repair mediation costs, which will either be applied to repair costs or paid to Anderson.

This holdback was included in trade accounts payable and accrued expenses on the Company’s Condensed Consolidated Balance Sheet

at December 31, 2025.

The excess purchase price

over the fair value of the assets acquired was recorded as goodwill in the amount of $ 0.4

million, primarily related to assembled workforce and increased manufacturing capacity.

The goodwill is expected to be deductible for

tax purposes.

The Company incurred acquisition related costs of approximately $ 0.5

million, which are included in selling, general and administrative expenses in the Company’s Consolidated Statements of Income and

Comprehensive Income.

The pro forma impact of the

acquisition and the results of operations attributable to Anderson in 2024 and 2025 have not been presented, as they are not material

to the Company’s consolidated results of operations.

Revenue Recognition and Contracts with Customers

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Revenue deferred

Contract liabilities with customers at December 31,

During the year ended December 31, 2024, the Company

did not defer any revenue and recognized $ 0.1 million of revenue previously deferred as the performance obligations relating to the shipment

of free products were satisfied.

This resulted in a net increase in firearms sales for the year ended December 31, 2024 of $ 0.1 million

and there being no deferred contract revenue liability at December 31, 2024.

During the year ended December 31, 2023, the Company

deferred $ 3.2 million of revenue, offset by the recognition of $ 4.1 million of revenue previously deferred as the performance obligations

relating to the shipment of free products were satisfied.

This resulted in a net increase in firearms sales for the year ended December

31, 2023 of $ 0.9 million and a deferred contract revenue liability at December 31, 2023 of $ 0.1 million.

During the year ended December 31, 2022, the Company

deferred $ 1.0 million of revenue.

There was no offset for the recognition from previously deferred revenue as the Company did not satisfy

any performance obligations relating to the shipment of free products during the year.

This resulted in a net decrease in firearms sales

for the year ended December 31, 2022 of $ 1.0 million and a deferred contract revenue liability at December 31, 2022 of $ 1.0 million.

Practical Expedients and Exemptions

Contract liabilities with customers

at December 31,

During the year ended December 31, 2025, the

Company deferred $ 1.7

million of revenue, completely offset by the recognition of $ 1.7

million of revenue previously deferred as the performance obligations relating to the shipment of free products were all satisfied during

This resulted in there being no change in firearms sales for the year ended December 31, 2025 and there being no

deferred contract revenue liability at December 31, 2025.

During the year ended December 31, 2024, the

Company did not defer any revenue and recognized $ 0.1

million of revenue previously deferred as the performance obligations relating to the shipment of free products were satisfied.

This resulted

in a net increase in firearms sales for the year ended December 31, 2024 of $ 0.1

million and there being no deferred contract revenue liability at December 31, 2024.

During the year ended December 31, 2023, the

Company deferred $ 3.2

million of revenue, offset by the recognition of $ 4.1

million of revenue previously deferred as the performance obligations relating to the shipment of free products were satisfied.

This resulted

in a net increase in firearms sales for the year ended December 31, 2023 of $ 0.9

million and a deferred contract revenue liability at December 31, 2023 of $ 0.1

Expedients and Exemptions

The Company has elected to account for shipping

and handling activities that occur after control of the related product transfers to the customer as fulfillment activities that are

recognized upon shipment of the goods.

and handling activities that occur after control of the related product transfers to the customer as fulfillment activities that are recognized

upon shipment of the goods.

Trade Receivables, Net

4 unchanged sentences

In 2025, the largest individual trade receivable

balances accounted for 26 %, 20 %, 14 %, and 11 % of total trade receivables, respectively.

balances accounted for 28 %,

of total trade receivables, respectively.

In 2024, the largest individual trade receivable

balances accounted for 22 %, 20 %, and 17 % of total trade receivables, respectively.

balances accounted for 26 %,

of total trade receivables, respectively.

Inventories consist of the following:

14 unchanged sentences

Net property, plant and equipment

Depreciation expense totaled $ 21.1 million, $ 21.1

million, and $ 24.4 million in 2024, 2023, and 2022, respectively.

Depreciation expense totaled $ 22.0

million, $ 21.1

million, and $ 21.1

million in 2025, 2024, and 2023, respectively.

Other assets consist of the following:

3 unchanged sentences

Accumulated amortization

The capitalized cost of patents is amortized using

the straight-line method over their useful lives.

Expenses related to patent amortization was $ 0.5 million in 2024, $ 0.4 million in 2023,

and $ 0.4 million in 2022.

The estimated annual patent amortization expense for each of the next five years is $ 0.4 million.

Costs incurred

to maintain existing patents are charged to expense in the year incurred.

The Marlin trade name will be amortized using the straight-line

The capitalized cost of patents is amortized

using the straight-line method over their useful lives.

Expenses related to patent amortization was $ 0.4

million in 2025, $ 0.5

million in 2024, and $ 0.4

million in 2023.

The estimated annual patent amortization expense for each of the next five years is $ 0.4

Costs incurred to maintain existing patents are charged to expense in the year incurred.

The Marlin trade name will be amortized

using the straight-line method over its useful life.

The estimated annual trade name amortization cost for each of the next five years

The intangible asset related to Marlin customer relationships are included in Other above and will be amortized using the straight-line

method over its useful life.

The estimated annual trade name amortization cost for each of the next five years is $ 0.4 million.

The intangible

asset related to Marlin customer relationships are included in Other above and will be amortized using the straight-line method over its

The estimated annual customer relationship name amortization expense for each of the next five years is $ 0.1 million.

The estimated annual customer relationship name amortization expense for each of the next five years is $ 0.1

Leased Assets

1 unchanged sentence

and equipment.

The Company has evaluated all its leases and determined that all are operating leases under the definitions of the guidance

of ASU 2016-02.

The Company’s lease agreements generally do not require material variable lease payments, residual value guarantees

or restrictive covenants.

The Company has evaluated all its leases and determined that all are operating

leases under the definitions of the guidance of ASU 2016-02.

The Company’s lease agreements generally do not require

material variable lease payments, residual value guarantees or restrictive covenants.

The Company uses the effective interest method

2 unchanged sentences

the right-of-use assets and related lease liabilities recognized on the condensed consolidated balance sheet as of December 31, 2025:

Balance Sheet Line

Item December 31,

2024 December 31,

Right-of-use assets Other assets $ 2,345 $ 2,781

Right-of-use assets

Operating lease liabilities

Current portion Trade accounts payable and accrued expenses $ 598 $ 611

Noncurrent portion Lease liabilities 1,747 2,170

Current portion

Trade accounts payable

and accrued expenses

Noncurrent portion

Lease liabilities

Total operating lease liabilities

4 unchanged sentences

lease liabilities.

The table below includes cash

paid for our operating lease liabilities, other non-cash information, our weighted average remaining lease term and weighted average discount

2024 December 31,

The table below includes cash paid for our operating

lease liabilities, other non-cash information, our weighted average remaining lease term and weighted average discount rate:

Cash paid for amounts included in the measurement of lease liabilities

3 unchanged sentences

Weighted average discount rate

The following table reconciles the undiscounted future minimum lease

payments to the total operating lease liabilities recognized on the condensed consolidated balance sheet as of December 31, 2024:

The following table reconciles the undiscounted

future minimum lease payments to the total operating lease liabilities recognized on the condensed consolidated balance sheet as of December

Total undiscounted future minimum lease payments

Difference between undiscounted lease payments & the present value of future lease payments

Difference between

undiscounted lease payments & the present value of future lease payments

Total operating lease liabilities

5 unchanged sentences

The Company’s weighted average remaining lease term for operating

leases as of December 31, 2024 is 7.7 years.

leases as of December 31, 2025 is 6.3

Trade Accounts Payable and Accrued Expenses

4 unchanged sentences

Accrued other

Accrued Dividends

On November 30, 2022, the Company’s Board

of Directors declared a $ 5.00 per share special dividend payable on January 5, 2023 to stockholders of record as of December 15, 2022 .

The dividend, which totaled $ 88.3 million, was paid on January 5, 2023 .

Line of Credit

On January 7, 2022, the Company entered into a

three-year, $ 40 million unsecured revolving line of credit agreement with a bank.

On June 6, 2024, the Company amended its existing line

of credit agreement, which now expires January 7, 2028 .

Borrowings under this new facility bear interest at the applicable Secured Overnight

Financing Rate (SOFR), plus 150 basis points, plus an additional adjustment of eight basis points.

The Company is also charged one-quarter

On January 7, 2022, the Company entered into

a three-year, $ 40

million unsecured revolving line of credit agreement with a bank.

On June 6, 2024, the Company amended its existing line of credit agreement,

which now expires January

Borrowings under this new

facility bear interest at the applicable Secured Overnight Financing Rate (SOFR), plus 150 basis points, plus an additional adjustment

of eight basis points .

The Company is also charged one-quarter of a percent ( 0.25 %)

per year on the unused portion.

At December 31, 2024, the Company was in compliance with the terms and covenants

of the credit facility.

At December 31, 2025, the Company was in compliance with the terms and covenants of the credit facility.

Employee Benefit Plans

2 unchanged sentences

Under the terms of the 401(k) plan, the Company matches a certain portion

of employee contributions to their individual 401(k) accounts using the “safe harbor” guidelines provided in the Internal

Revenue Code.

Expenses related to matching employee contributions to the 401(k) plan were $ 4.1 million, $ 4.7 million, and $ 4.1 million

in 2024, 2023, and 2022, respectively.

employee contributions to their individual 401(k)

accounts using the “safe harbor” guidelines provided in the Internal Revenue Code.

Expenses related to matching employee contributions

to the 401(k) plan were $ 4.2

million, $ 4.1

million, and $ 4.7

million in 2025, 2024, and 2023, respectively.

Additionally, in 2025, 2024, and 2023 the Company

2 unchanged sentences

a supplemental contribution to their account based on a uniform percentage of qualifying compensation established annually.

these supplemental contributions totaled $ 7.0 million, $ 6.9 million, and $ 7.4 million in 2024, 2023, and 2022, respectively.

these supplemental contributions totaled $ 7.0

million, $ 7.0

million, and $ 6.9

million in 2025, 2024, and 2023, respectively.

Other Operating Income, Net

Other operating income, net consists of the following:

Year ended December 31,

Gain on sale of operating assets

ended December 31,

(Loss) gain on disposal of operating assets

The Company files income tax returns in the U.S.

3 unchanged sentences

income tax examinations by tax authorities for years before 2018.

Our (loss) income before income taxes is derived solely from within

the United States.

The federal and state income tax provision consisted of the following:

Year ended December 31,

The effective income tax rate varied from the statutory federal income

tax rate as follows:

Year ended December 31,

ended December 31,

Total current tax expense

Total deferred tax expense

Provision for income taxes

The reconciliation of the U.S.

federal income

tax provision at the statutory federal income tax rate of 21 %

for the year ended December 31, 2025, to our provision for income taxes was as follows:

The table reflects the ASU 2023-09, Income

Taxes (Topic 740):

Improvements to Income Tax Disclosures (ASU 2023-09), which was adopted prospectively for the year ended December

Organization and Summary of Significant Accounting Policies — Recently

Adopted Accounting Pronouncements ”

for additional information on the adoption of ASU 2023-09.

ended December 31, 2025

Statutory federal income tax rate

State and local income taxes, net of federal tax benefit

Research and development tax credits

Nontaxable or nondeductible items

Share based compensation

Officers compensation – 162(M)

Other nontaxable or nondeductible items

Effective income tax rate

State taxes in New Hampshire made up the majority

(greater than 50 %)

of the tax effect in the state and local income taxes, net of federal income tax effect category for 2025.

The reconciliation of the U.S.

federal income

tax provision at the statutory federal income tax rate of 21 %

for each of the years ended December 31, 2024 and 2023, respectively, to our provision for income taxes, as previously disclosed, prior

to the adoption of ASU 2023-09, were as follows:

ended December 31,

Statutory federal income tax rate

State income taxes, net of federal tax benefit

1 unchanged sentence

Effective income tax rate

The Company estimates that its effective tax rate

in 2025 will approximate 20.3 %.

Significant components of the Company’s

deferred tax assets and liabilities are as follows:

The Company made income tax payments of approximately

million, $ 10.6

million, and $ 26.0

million, during 2025, 2024, and 2023, respectively.

amounts of cash paid for income taxes, for the year ended December 31, 2025, were as follows:

ended December 31, 2025

Federal income taxes paid

State and local income taxes paid

New Hampshire

North Carolina

Other immaterial state taxes paid

Total cash paid for income taxes

Deferred tax assets and liabilities reflect the

net tax effects of net operating loss and tax credit carryforwards and temporary differences between the carrying amounts of assets and

liabilities for financial reporting and the amounts used for income tax purposes.

components of the Company’s deferred tax assets and liabilities are as follows:

Deferred tax assets

Net Operating Loss Carryforwards

Research and development tax credits

Capitalized research and development costs

2 unchanged sentences

Stock-based compensation

ASC 842 lease liabilities

Total deferred tax assets

Deferred tax liabilities:

ASC 842 right-of-use asset

Total deferred tax liabilities

Net deferred tax assets

In 2022, the Company adopted the provisions of

the Tax Cuts and Jobs Act of 2017 that relate to IRS Code Section 174.

Under these provisions, research and development costs must be

capitalized and amortized over five years for income tax purposes.

The Company continues to expense these costs in the period incurred

for financial accounting purposes.

The Company made income tax payments of approximately

$ 10.6 million, $ 26.0 million, and $ 28.7 million, during 2024, 2023, and 2022, respectively.

The Company expects to realize its deferred

tax assets through tax deductions against future taxable income .

The Company does not believe it has included

any “uncertain tax positions” in its federal income tax return or any of the state income tax returns it is currently filing.

The Company expects to realize its deferred tax

assets through tax deductions against future taxable income .

The Company does not believe it has included any

“uncertain tax positions” in its federal income tax return or any of the state income tax returns it is currently filing.

The Company has made an evaluation of the potential impact of additional state taxes being assessed by jurisdictions in which the Company

5 unchanged sentences

and denominator for the basic and diluted earnings per share calculations for the periods indicated:

Year ended December 31,

ended December 31,

Net (loss) income

Weighted average number of common shares outstanding – Basic

Dilutive effect of options and restricted stock units outstanding under the Company’s employee compensation plans

Weighted average number of common shares outstanding – Diluted

Dilutive effect of options and restricted

stock units outstanding under the Company’s employee compensation plans

Weighted average number of common shares outstanding –

Stock Repurchases

3 unchanged sentences

of Shares that

Third Quarter 2022

July 3 to July 30

July 31 to August 27

August 28 to October 1

Fourth Quarter 2023

2 unchanged sentences

November 26 to December 31

Fourth Quarter 2023

October 1 to October 28

October 29 to November 25

November 26 to December 31

First Quarter 2024

14 unchanged sentences

November 23 to December 31

First Quarter 2025

January 1 to January 25

January 26 to February 22

February 23 to March 29

Second Quarter 2025

March 30 to April 26

April 27 to May 24

May 25 to June 28

Third Quarter 2025

June 29 to July 26

July 27 to August 23

August 24 to September 27

All of these purchases were made with cash held

by the Company and no debt was incurred

At December 31, 2024, approximately $ 40.3 million

remained authorized for share repurchases.

At December 31, 2025, approximately $ 14.3

million remained authorized for share repurchases.

Compensation Plans

4 unchanged sentences

Vesting requirements are determined by the Compensation Committee of the Board of Directors .

The Company has reserved 750,000 shares for issuance under the 2017 SIP.

In June 2023, the Company’s shareholders

approved the 2023 Stock Incentive Plan (the “2023 SIP”) under which employees, independent contractors, and non-employee directors

The Company has reserved 750,000

shares for issuance under the 2017 SIP.

In June 2023, the Company’s shareholders approved

the 2023 Stock Incentive Plan (the “2023 SIP”) under which employees, independent contractors, and non-employee directors

may be granted stock options, restricted stock, deferred stock awards, and stock appreciation rights, any of which may or may not require

1 unchanged sentence

Vesting requirements are determined by the Compensation Committee of the Board of Directors.

The Company reserved 1,000,000 shares for issuance under the 2023 SIP, of which 845,000 shares remain available for future grants as of

December 31, 2023.

Approximately 150,000 shares remaining from the 2017 SIP will be available for future grants under the terms of

the 2023 SIP.

Since the shareholder approval of the 2023 SIP, no additional awards have been or will be granted under the 2017 SIP.

granted and outstanding awards under the 2017 SIP will remain subject to the terms of the 2017 SIP.

Compensation expense related to deferred stock,

restricted stock, and restricted stock units is recognized based on the grant-date fair value of the Company’s common stock, using

either the actual share price or an estimated value using the Monte Carlo valuation model.

The total stock-based compensation cost included

in the Statements of Income was $ 5.8 million, $ 6.2 million, and $ 5.7 million in 2024, 2023, and 2022, respectively.

Deferred Stock

The Company reserved 1,000,000

shares for issuance under the 2023 SIP, of which 418,000

shares remain available for future grants as of December 31, 2025.

Approximately 120,000

shares remaining from the 2017 SIP will be available for future grants under the terms of the 2023 SIP.

Since the shareholder approval

of the 2023 SIP, no additional awards have been or will be granted under the 2017 SIP.

Previously granted and outstanding awards under

the 2017 SIP will remain subject to the terms of the 2017 SIP.

Compensation expense related to deferred stock, restricted

stock, and restricted stock units is recognized based on the grant-date fair value of the Company’s common stock, using either the

actual share price or an estimated value using the Monte Carlo valuation model.

The total stock-based compensation cost included in the

Statements of Income was $ 7.4

million, $ 5.8

million, and $ 6.2

million in 2025, 2024, and 2023, respectively.

Deferred stock awards vest based on the passage

1 unchanged sentence

Upon vesting, these awards convert one-for-one to common stock.

In 2024, 9,291 deferred stock awards were issued

to non-employee directors that will vest in June 2025 and 11,992 deferred stock awards were issued to non-employee directors that will

vest in June 2027

In 2023, 7,566 deferred stock awards were issued

to non-employee directors that vested in June 2024 and 9,760 deferred stock awards were issued to non-employee directors that will

vest in June 2026.

In 2022, 5,953 deferred stock awards were issued

to non-employee directors that vested in May 2023, 7,688 deferred stock awards were issued to non-employee directors that will vest in

May 2025 and a 1,478 deferred stock award was issued to a non-employee director that will vest in June 2027.

Compensation expense related to these awards is

amortized ratably over the vesting period.

Compensation expense related to these awards was $ 0.9 million in 2024, $ 0.9 million in 2023,

and $ 0.8 million in 2022.

At December 31, 2024, there was $ 1.0 million of

unrecognized compensation cost related to deferred stock that is expected to be recognized over a period of three years.

In 2025, 12,341

deferred stock awards were issued to non-employee directors that will vest in June 2026, 15,888

deferred stock awards were issued to non-employee directors that will vest in June 2028 and a 2,786

deferred stock award was issued to a non-employee director that will vest in June 2030.

In 2024, 9,291

deferred stock awards were issued to non-employee directors that will vest in June 2025 and 11,992

deferred stock awards were issued to non-employee directors that will vest in June 2027.

In 2023, 7,566

deferred stock awards were issued to non-employee directors that vested in June 2024 and 9,760

deferred stock awards were issued to non-employee directors that will vest in June 2026.

Compensation expense related to these awards

is amortized ratably over the vesting period.

Compensation expense related to these awards was $ 1.0

million in 2025, $ 0.9

million in 2024, and $ 0.9

million in 2023.

At December 31, 2025, there was $ 1.2

million of unrecognized compensation cost related to deferred stock that is expected to be recognized over a period of 4.5

Restricted Stock Units

5 unchanged sentences

the Compensation Committee of the Board of Directors, including return on net operating assets, stock performance, and the passage of

During 2024, 153,000 restricted stock units were

Compensation costs related to these restricted stock units was $ 6.8 million, of which $ 1.9 million was recognized in 2024.

costs are being recognized ratably over the remaining periods required before the units vest, which range from 24 to 26 months.

During 2023, 114,000 restricted stock units were

Compensation costs related to these restricted stock units was $ 6.1 million, of which $ 1.3 million was recognized in 2023.

are being recognized ratably over the remaining periods required before the units vest, which range from 24 to 26 months.

During 2022, 82,000 restricted stock units were

Compensation costs related to these restricted stock units was $ 6.0 million, of which $ 1.7 million was recognized in 2022.

costs are being recognized ratably over the remaining periods required before the units vest, which range from 24 to 26 months.

At December 31, 2024, there was $ 7.8 million of

unrecognized compensation cost related to restricted stock units that is expected to be recognized over a period of 3.3 years.

During 2025, 248,000

restricted stock units were issued.

Compensation costs related to these restricted stock units was $ 9.5

million, of which $ 2.6

million was recognized in 2025.

are being recognized ratably over the remaining

periods required before the units vest, which range from 24

During 2024, 153,000

restricted stock units were issued.

Compensation costs related to these restricted stock units was $ 6.8

million, of which $ 1.9

million was recognized in 2024.

The costs are being recognized ratably over the remaining periods required before the units vest, which

ranged from 24

During 2023, 114,000

restricted stock units were issued.

Compensation costs related to these restricted stock units was $ 6.1

million, of which $ 1.3

million was recognized in 2023.

The costs are being recognized ratably over the remaining periods required before the units vest, which

ranged from 24

At December 31, 2025, there was $ 9.9

million of unrecognized compensation cost related to restricted stock units that is expected to be recognized over a period of 3.3

Operating Segment Information

The Company has two reportable operating segments:

The Company has two

reportable operating segments:

firearms and castings.

The firearms segment manufactures and sells rifles, pistols, and revolvers principally to a number of federally-licensed,

independent wholesale distributors primarily located in the United States.

The castings segment manufactures and sells steel investment

castings and metal injection molding parts.

The firearms segment manufactures and sells rifles, pistols, and revolvers principally

to a number of federally-licensed, independent wholesale distributors primarily located in the United States.

The castings segment manufactures

and sells steel investment castings and metal injection molding parts.

Corporate segment income relates to interest income,

19 unchanged sentences

The Company’s CODM periodically reviews cost of goods sold by segment and treats it as a significant segment expense.

Year ended December 31,

ended December 31,

Costs of Goods Sold

Gross Profit (Loss)

Operating Income (Loss)

Income (Loss) Before Income Taxes

Year ended December 31,

Gross (Loss) Profit

Operating (Loss) Income

(Loss) Income Before Income Taxes

ended December 31,

Identifiable Assets

8 unchanged sentences

Lipsey’s - 28 %;

Davidson’s - 19 %;

and Sports South - 15 %.

Sports South - 18 %;

and Davidson’s - 16 %.

In 2023, the Company’s largest customers

4 unchanged sentences

The Company’s assets are located entirely

in the United States and domestic sales represented at least 94 % of total sales in 2024, 2023, and 2022.

in the United States and domestic sales represented at least 94 %

of total sales in 2025, 2024, and 2023.

Quarterly Results of Operations (Unaudited)

1 unchanged sentence

quarterly results of operations for the two years ended December 31, 2025:

Three Months Ended

Net income (loss)

Basic earnings per share

Diluted earnings per share

Three Months Ended

Basic earnings per share

4 unchanged sentences

The Company paid the NRA $ 0.7

million, $ 0.5 million and $ 0.7 million in 2024, 2023, and 2022, respectively.

One of the Company’s Directors also serves as a Director

on the Board of the NRA.

million, $ 0.5

million and $ 0.5

million in 2025, 2024, and 2023, respectively.

One of the Company’s Directors served as a Director on the Board of the NRA until

October 27, 2025.

The Company is a member of the National Shooting

Sports Foundation (“NSSF”), the firearm industry trade association.

Company paid the NSSF $ 0.4 million, $ 0.3 million and $ 0.3 million in 2024, 2023, and 2022, respectively.

One of the Company’s

Directors also serves on the Board of the NSSF.

Company paid the NSSF $ 0.3

million, $ 0.4

million and $ 0.3

million in 2025, 2024, and 2023, respectively.

One of the Company’s Directors also serves on the Board of the NSSF.

Contingent Liabilities

of December 31, 2024, the Company was a defendant in eight (8) lawsuits and is aware of cert ain other such claims.

generally fall into four (4) categories:

municipal litigation, breach of contract, unfair trade practices, and trademark litigation.

is discussed in turn below.

Municipal Litigation

As of December 31, 2025, the Company was a defendant

in nine (9) lawsuits and is aware of certain other claims.

The lawsuits generally fall into the categories of municipal litigation, unfair

trade practices, product liability, employment, and trademark litigation.

One (1) breach of contract matter was fully and finally resolved

during the quarter.

Material matters and developments are discussed in turn below.

Municipal litigation generally includes those

cases brought by cities or other governmental entities against firearms manufacturers, distributors and retailers seeking to recover damages

allegedly arising out of the criminal misuse of firearms by third parties.

There are four (4) lawsuits of this type, as follows.

In City of Gary v.

Smith & Wesson Corp.,

et al , filed in Indiana State Court in 1999, the City of Gary, Indiana seeks damages, among other things, for the costs of medical

care, police and emergency services, public health services, and other services as well as punitive damages.

In addition, nuisance abatement

and/or injunctive relief is sought to change the design, manufacture, marketing and distribution practices of the various Defendants.

The Complaint alleges, among other claims, negligence in the design of products, public nuisance, negligent distribution and marketing,

negligence per se and deceptive advertising.

The case does not allege a specific injury to a specific individual as a result of the misuse

or use of any of the Company's products.

After a long procedural history, during the quarter ended April 3, 2021, the City initiated discovery

and the manufacturer Defendants reciprocated.

On March 15, 2024, Indiana Governor Eric Holcomb

signed into law HB 1235, which reserves to the State of Indiana the right to bring an action on behalf of a political subdivision against

a firearm or ammunition manufacturer, trade association, seller, or dealer, concerning certain matters.

The new law also prohibits a political

subdivision from bringing or maintaining such an action.

Following passage of this new law, the Company and other Defendants filed a Motion

for Judgment on the Pleadings on March 18, 2024.

On August 12, 2024, the Court denied Defendants’ motion.

The Court granted Defendants’

subsequent request to certify the Order for appeal.

On October 2, 2024, Defendants filed a motion with the Indiana Court of Appeals to

accept jurisdiction over the interlocutory appeal, which was granted over Plaintiff’s objection on November 1, 2024.

16, 2024, the trial court entered an Order staying all proceedings pending the interlocutory appeal.

Briefing of the appeal is underway.

Estados Unidos Mexicanos v.

Smith & Wesson

Brands, Inc., et al.

was filed by the Country of Mexico and names seven Defendants, mostly U.S.-based firearms manufacturers, including

The Complaint advances a variety of legal theories including negligence, public nuisance, unjust enrichment, restitution,

Plaintiff essentially alleges that Defendants design, manufacture, distribute, market and sell firearms in a way that they

know results in the illegal trafficking of firearms into Mexico, where they are used by Mexican drug cartels for criminal activities.

Plaintiff seeks injunctive relief and monetary damages.

On November 22, 2021, Defendants jointly filed

a motion to dismiss the Complaint, which was granted on September 30, 2022.

Several defendants, including the Company, also filed Rule

12(b)(2) motions to dismiss for lack of personal jurisdiction, which the Court declined to rule on in light of its dismissal.

appealed the dismissal to the First Circuit Court of Appeals and, on January 22, 2024, the Court of Appeals reversed the District Court’s

dismissal and remanded the case for further proceedings.

The Defendants filed a Petition for Writ of

Certiorari seeking review by the

United States Supreme Court while the case moved forward at the District Court.

On June 17, 2024, the District Court heard argument

on the pending Rule 12(b)(2) motions to dismiss.

On August 7, 2024, the Court granted the motions, dismissing the Company and some of

the other Defendants from the case, but has not yet entered judgement in favor of these Defendants.

Because judgment has not entered in

favor of the Company, the 30-day period in which Plaintiff may appeal the Court’s August 7, 2024 ruling has not yet begun to run.

Subsequently, the Supreme Court granted the Defendants’ Petition for Writ of Certiorari.

Oral argument at the Supreme Court is scheduled

for March 4, 2025.

On December 20, 2022, the City of Buffalo, New

York filed a lawsuit captioned The City of Buffalo v.

Smith & Wesson Brands, Inc., et al.

in the New York State Supreme Court

for Erie County, New York.

The suit names a number of firearm manufacturers, distributors, and retailers as Defendants, including the

Company, and purports to state causes of action for violations of Sections 898, 349 and 350 of the New York General Business Law, as well

as common law public nuisance.

Generally, Plaintiff alleges that the criminal misuse of firearms in the City of Buffalo is the result

of the manufacturing, sales, marketing, and distribution practices of the Defendants.

The Defendants timely removed the matter to the

District Court for the Western District of New York.

On December 21, 2022, the City of Rochester, New

York filed a lawsuit captioned The City of Rochester v.

Smith & Wesson Brands, Inc., et al.

in the New York State Supreme Court

for Monroe County, New York.

The suit names the same defendants and makes essentially the same allegations raised in Buffalo , discussed

in the preceding paragraph.

Defendants timely removed the matter to the U.S.

District Court for the Western District of New York.

Defendants moved to consolidate the Buffalo

and Rochester cases for pretrial purposes only and also moved to stay the cases pending a decision by the Second Circuit Court

of Appeals in National Shooting Sports Foundation, Inc.

James , which challenges the constitutionality of the recently

LAW §§ 898-a–e.

On June 8, 2023, the Court granted Defendants’ motions and the cases were

consolidated for pretrial purposes and stayed.

Breach of Contract

The Company is a defendant in Jones v.

Ruger & Co., a purported class action lawsuit arising out of a data breach at Freestyle Solutions, Inc., the vendor who was hosting

the Company’s ShopRuger.com website at the time of the breach.

On January 20, 2023, five Plaintiffs filed an Amended Complaint naming

the Company and Freestyle Solutions, Inc.

as Defendants.

The Complaint alleged causes of action for negligence, breach of implied warranties,

and unjust enrichment.

The Company moved to dismiss the Amended Complaint,

and on March 27, 2024, the Court dismissed Plaintiffs’ negligence and unjust enrichment claims against the Company.

The Court denied

the motion with respect to Plaintiffs’ breach of contract claim, concluding that development

of additional information is required

to assess the applicability of the limitation of liability clause contained in the Company’s terms and conditions of use.

is proceeding accordingly.

Unfair Trade Practices

allegedly arising out of the misuse of firearms by third parties.

There are three pending lawsuits of this type:

the City of Gary ,

filed in Indiana State Court in 1999;

The City of Buffalo , filed in the Supreme Court of the State of New York for Erie County

on December 20, 2022;

and The City of Rochester , filed in the Supreme Court for the State of New York for Monroe County on December

21, 2022, each of which is described in more detail below.

The City of Gary seeks damages, among other

things, for the costs of medical care, police and emergency services, public health services, and other services as well as punitive damages

as well as nuisance abatement and/or injunctive relief to change the design, manufacture, marketing and distribution practices of the

various Defendants.

The Complaint alleges, among other claims, negligence in the design of products, public nuisance, negligent distribution

and marketing, negligence per se and deceptive advertising.

The case does not allege a specific injury to a specific individual as a result

of the misuse or use of any of the Company's products.

After a long procedural history, the Indiana Court of Appeals recently reversed

the trial court and ordered dismissal of the case.

The Indiana Court of Appeals denied the City’s request for rehearing, and the

parties are awaiting remand to the trial court for dismissal.

The City of Buffalo v.

Smith & Wesson Brands,

and The City of Rochester v.

Smith & Wesson Brands, Inc., et al were filed on consecutive days in New York

State Court, naming a number of firearm manufacturers, distributors, and retailers as Defendants, including the Company.

The complaints

are virtually identical and, relying primarily on New York’s General Business Law §898-b, generally allege that the criminal

misuse of firearms in their cities is the result of the manufacturing, sales, marketing, and distribution practices of the Defendants.

These matters seek unspecified compensatory damages, creation of an abatement fund, punitive damages and other relief.

Both matters were

timely removed to federal court and were consolidated for pretrial purposes only.

Those matters were stayed pending the outcome of a different

matter that challenges New York’s law, which was decided earlier this year.

The Defendants have moved to dismiss the cases and are

vigorously defending these matters.

As reported in prior periods, the Company was

a defendant in Jones v.

Sturm, Ruger & Co., a purported class action lawsuit arising out of a data breach at Freestyle Solutions,

Inc., the vendor

who was hosting the Company’s eCommerce

website at the time of the breach.

The settlement was finalized during the quarter and the matter is now closed.

Trade Practices

Estate of Suzanne Fountain v.

& Co., Inc., was filed in Connecticut Superior Court and arises out of the criminal shooting at the King Soopers supermarket in

Boulder, Colorado on March 22, 2021.

On that date, Plaintiff’s decedent, Suzanne Fountain, was murdered by 21-year-old Ahmad

Al Aliwi Al-Issa.

The Complaint alleged that the Company’s advertising and marketing of the Ruger AR-556 pistol violate the Connecticut

Unfair Trade Practices Act and were a substantial factor in bringing about the wrongful death of Suzanne Fountain.

Estate of Neven Stanisic et al.

& Co., Inc., was filed in Connecticut Superior Court on behalf of five Plaintiffs.

Like Estate of Suzanne Fountain , the

claims arise from the criminal shooting at the King Soopers supermarket in Boulder, Colorado on March 22, 2021.

Plaintiffs’ decedents

were murdered by Ahmad Al Aliwi Al-Issa and Plaintiffs alleged that the Company’s advertising

and marketing of the Ruger AR-556 pistol violate the Connecticut Unfair Trade Practices Act and were a substantial factor in causing the

wrongful death of Plaintiffs’ decedents.

& Co., Inc., and Estate of Nevin Stanisic v.

Sturm, Ruger & Co., Inc.

are pending in Connecticut state court and arise

out of the criminal shootings at the King Soopers supermarket in Boulder, Colorado on March 22, 2021.

Complaints allege that the Company’s advertising and marketing of the Ruger AR-556 pistol violate the Connecticut Unfair Trade Practices

Act and seek damages for the alleged wrongful death of the victims.

and Stanisic cases were consolidated for discovery purposes only and transferred by the court to the Complex Litigation Docket.

Plaintiffs then sought leave to file an Amended Complaint, essentially abandoning their negligent marketing allegations and advancing

a new theory predicated upon alleged violations of the Gun Control Act and National Firearms Act.

Over the Company’s objections,

Plaintiffs were permitted to file the Amended Complaint.

was timely removed to the U.S.

District Court for the District of Connecticut based upon the new allegations and federal question jurisdiction.

Plaintiffs moved to remand the case to state court and, following briefing and oral argument, the matter was remanded on April 25, 2024.

On June 12, 2024, Ruger filed Motions to Dismiss

the Connecticut state court cases based upon the doctrine of forum non conveniens .

Following oral argument on September 9, 2024,

the Court allowed Plaintiffs limited, additional discovery and requested further briefing on the matter.

The briefing has been completed

and the parties are awaiting a decision from the Court.

12, 2024, the Company was named as a defendant in FN Herstal, et al.

Oral argument on the Company’s pending Motion to Strike was held on July 21, 2025 and the court stayed discovery pending the outcome

of that motion.

The court denied the motion during the quarter, the stay was lifted and the parties have commenced discovery.

Company is a defendant in two unrelated traditional product liability matters, both of which were filed during the quarter.

Sturm, Ruger & Company, Inc.

, which is pending

District Court for the Middle District of North Carolina.

T he Complaint alleges that

the Company’s use of the initialism “SFAR” in connection with the marketing of its Small Frame Autoloading Rifle infringes

the Plaintiffs’ SCAR trademark.

The Complaint alleges violations of the Lanham Act and the North Carolina Unfair and Deceptive Trade

Practices Act, as well as trademark infringement under North Carolina common law.

The Company believes that the allegations are meritless

and is defending the action accordingly.

Summary of Claimed Damages and Explanation

of Product Liability Accruals

Punitive damages, as well as compensatory damages,

are demanded in certain of the lawsuits and claims.

In many instances, the plaintiff does not seek a specified amount of money, though

was served on July 11, 2025 and is pending in the Circuit Court of Arkansas County, Arkansas Northern

District, Civil Division.

This complaint alleges a product design defect in an “old model” Ruger Single-Six revolver and seeks

damages for the death of the plaintiff’s decedent.

Sturm, Ruger & Company, Inc.

is a product liability matter in which the plaintiff alleges personal injuries resulting from

a manufacturing defect in his SR22 pistol.

This matter was served on November 13, 2025 and was withdrawn in January 2026 when the plaintiff

filed a stipulation of dismissal with prejudice.

the quarter, Willeford v.

Sturm, Ruger & Company, Inc., a product liability case that was filed on July 25, 2025 was withdrawn

when the plaintiff filed a stipulation of dismissal without prejudice.

Company was also named in Thompson v.

Sturm, Ruger & Company, Inc.

, an employment matter that was filed in the Superior Court

for the State of Arizona, in and for the County of Yavapai, which was filed on August 21, 2025.

The plaintiff seeks damages for alleged

employment discrimination.

The Company disputes the allegations of the complaint and has responded accordingly.

Company is a defendant in FN Herstal, et al.

Sturm, Ruger & Company, Inc.

, which is pending in North Carolina.

Complaint alleges that the Company’s use of the initialism

in connection with the marketing of its Small Frame Autoloading Rifle infringes the Plaintiffs’ SCAR trademark.

The Complaint alleges

violations of the Lanham Act and the North Carolina Unfair and Deceptive Trade Practices Act, as well as trademark infringement

under North Carolina common law.

The parties are awaiting decision on dispositive motions.

of Claimed Damages and Explanation of Product Liability Accruals

Punitive damages ,

as well as compensatory damages, are demanded in certain of the lawsuits and claims.

In many instances ,

the plaintiff does not seek a specified amount of money , though

aggregate amounts ultimately sought may exceed product liability accruals and applicable insurance coverage.

For product liability claims made between July

10, 2000 and August 31, 2024, insurance coverage was provided on an annual basis for losses exceeding $ 5 million per claim, with an aggregate

maximum loss of $ 10 million annually, except for certain claims brought by governments or municipalities, which are excluded from coverage.

Insurance coverage was not renewed with incumbent carriers effective September 1, 2024.

Rather, the Company established a wholly-owned

captive insurance company for claims made on or after September 1, 2024.

Company management monitors the status of known

claims and the product liability accrual, which includes amounts for asserted and unasserted claims.

While it is not possible to forecast

the outcome of litigation or the timing of costs, in the opinion of management, after consultation with special and corporate counsel,

it is not probable and is unlikely that litigation, including punitive damage claims, will have a material adverse effect on the financial

position of the Company, but may have a material impact on the Company’s financial results for a particular period.

For product liability

claims made between July 10, 2000 and August 31, 2024 , insurance coverage

was provided on an annual basis for losses exceeding $ 5

million per claim , with an aggregate maximum loss of $ 10

million annually , except for certain claims brought by governments

or municipalities , which are excluded from coverage.

coverage was not renewed with incumbent carriers effective September 1, 2024.

Rather, the Company established a wholly-owned captive insurance

company for claims made on or after September 1, 2024.

Company management

monitors the status of known claims and the product liability accrual , which

includes amounts for asserted and unasserted claims.

While it is not possible to forecast the outcome of litigation or the timing of costs ,

in the opinion of management , after

consultation with special and corporate counsel, it is not probable and is unlikely that litigation ,

including punitive damage claims , will

have a material adverse effect on the financial position of the Compan y, but

may have a material impact on the Company’ s financial results

for a particular period.

Product liability claim payments are made when

21 unchanged sentences

The amount claimed at December 31,

2021 was $ 1.1 million and is set forth as an indication of possible maximum liability the Company might be required to incur in these

cases (regardless

of the likelihood or reasonable probability of any or all of this amount being awarded to claimants) as a result of

adverse judgments that are sustained on appeal.

During 2024, one ( 1 ) trademark lawsuit was filed

against the Company, one ( 1 ) negligence lawsuit was resolved, and one ( 1 ) traditional product liability lawsuit was resolved.

municipal lawsuit was dismissed, however the time period in which to file an appeal has been stayed by the Court and the Company considers

this matter still open.

As of December 31, 2024, the Company was a defendant in eight ( 8 ) lawsuits involving its products, including four

( 4 ) municipal lawsuits, two ( 2 ) lawsuits based upon unfair trade practices, one (1) breach of contract, and one (1) trademark litigation.

During 2023, one ( 1 ) traditional product liability

lawsuit was filed against the Company and one ( 1 ) was resolved.

As of December 31, 2023, the Company was a defendant in seven ( 7 ) lawsuits

involving its products, including one ( 1 ) traditional product liability lawsuit, four ( 4 ) municipal lawsuits and two ( 2 ) lawsuits based

upon alleged unfair trade practices.

The Company was also a defendant in two ( 2 ) negligence lawsuits.

During 2022, no traditional product liability

lawsuits were filed against the Company and one ( 1 ) was resolved.

As of December 31, 2022, the Company was a defendant five lawsuits involving

its products, including one ( 1 ) traditional product liability lawsuit and four ( 4 ) municipal lawsuits.

The Company also was a defendant

in three ( 3 ) negligence lawsuits though, as discussed above, that number has since been reduced to two (2) lawsuits with the consolidation

of the Jones and Copeland matters.

2021 was $ 1.1

million and is set forth as an indication of possible maximum liability the Company might be required to incur in these cases (regardless

of the likelihood or reasonable probability of any or all of this amount being awarded to claimants) as a result of adverse judgments

that are sustained on appeal.

During 2025, three ( 3 )

traditional product liability cases were filed and one ( 1 )

employment case was filed.

municipal lawsuit was resolved and one (1) breach of contract lawsuit was resolved.

As of December 31, 2025, the Company was a defendant

in eight ( 8 )

lawsuits involving its products, including three ( 3 )

municipal lawsuits, two ( 2 )

lawsuits alleging unfair trade practices, two ( 2 )

traditional product liability cases, and one ( 1 )

trademark case.

During 2024, one ( 1 )

trademark lawsuit was filed against the Company, one ( 1 )

negligence lawsuit was resolved, and one ( 1 )

traditional product liability lawsuit was resolved.

One (1) municipal lawsuit was dismissed, however the time period in which to file

an appeal has been stayed by the Court and the Company considers this matter still open.

As of December 31, 2024, the Company was a defendant

in eight ( 8 )

lawsuits involving its products, including four ( 4 )

municipal lawsuits, two ( 2 )

lawsuits based upon unfair trade practices, one (1) breach of contract, and one (1) trademark litigation.

During 2023, one ( 1 )

traditional product liability lawsuit was filed against the Company and one ( 1 )

was resolved.

As of December 31, 2023, the Company was a defendant in seven ( 7 )

lawsuits involving its products, including one ( 1 )

traditional product liability lawsuit, four ( 4 )

municipal lawsuits and two ( 2 )

lawsuits based upon alleged unfair trade practices.

The Company was also a defendant in two ( 2 )

negligence lawsuits.

The Company’s product liability expense

was $ 0.7 million in 2024, $ 1.5 million in 2023, $ 1.3 million in 2022.

This expense includes the cost of outside legal fees, and other

expenses incurred in the management and defense of product liability matters.

million in 2025, $ 0.7

million in 2024, $ 1.5

million in 2023.

This expense includes the cost of outside legal fees, and other expenses incurred in the management and defense of product

liability matters.

A roll-forward of the product liability reserve and detail of product

1 unchanged sentence

Balance Sheet Roll-forward for Product Liability

Cash Payments

Income Statement Detail for Product Liability

(a) The beginning and ending liability balances represent accrued legal fees only.

The beginning and ending liability balances represent accrued legal fees only.

Settlements and administrative

1 unchanged sentence

Only in rare instances is an accrual established for settlements.

(b) The expense accrued in the liability is for legal fees only.

In 2022, the costs incurred related

to cases that were settled or dismissed were less than the amounts accrued for these cases in prior years.

(d) Settlements represent payments made to plaintiffs or allegedly injured parties in exchange for a full

The expense accrued in the liability is for legal fees only.

Legal fees represent payments to outside counsel related to product liability matters.

Settlements represent payments made to plaintiffs or allegedly injured parties in exchange for a full

and complete release of liability.

(e) Insurance expense represents the cost of insurance premiums.

Insurance expense represents the cost of insurance premiums.

There were no insurance recoveries during any

5 unchanged sentences

sheets approximate carrying values at those dates.

Stockholder Rights Plan

On October 14, 2025, the Company’s Board

of Directors (the “Board”) approved the adoption of a limited-duration stockholder rights plan (the “Rights Plan”).

The Rights Plan is effective October 14, 2025 (“Effective Date”) and will expire on October 13, 2026.

The Board, in consultation

with its advisors, adopted the Rights Plan in response to the public announcement by Beretta Holding S.A.

(“Beretta”) that

it had accumulated a significant economic interest in Ruger’s common stock and intends to engage in discussions with the Company

regarding “potential areas of operational and strategic collaborations.” The Rights Plan is intended to ensure that the Board

remains in the best position to perform its fiduciary duties and to enable all stockholders to receive fair and equal treatment.

also designed to allow all stockholders to realize the long-term value of their investment by reducing the likelihood that Beretta would

gain control through open market accumulation or other coercive tactics without appropriately compensating the Company’s stockholders

or allowing the Board sufficient time to make informed judgments.

The Rights Plan is a temporary measure to give the Board time to understand

Beretta’s intentions and evaluate options.

Pursuant to the Rights Plan, the Company has

authorized and declared a dividend of one common share purchase right (a “Right”) for each share of Common Stock that is outstanding

at the close of business on October 24, 2025 and that may become outstanding between such date and the Distribution Date (as defined below)

or the earlier Expiration Date (as defined in the Rights Plan).

The Rights are not exercisable until after the Distribution Date.

the Distribution Date, each Right will be exercisable to purchase from the Company one share of Common Stock at a purchase price of $ 200

per share of Common Stock, subject to adjustment.

The “ Distribution

Date ” means the close of business on the business day immediately following the earlier of (i) the Flip-In Date (as defined

in the Rights Plan) or (ii) 10

business days after the date (prior to such time as any person becomes an Acquiring Person), if any, as may be determined by action of

the Board, in its sole discretion, following the commencement of, or public announcement of an intention to commence, a tender or exchange

offer the consummation of which would result in any person or group of affiliated or associated persons becoming an Acquiring Person.

An “ Acquiring

Person ” means any person who becomes the beneficial owner of 10 %

or more of the outstanding shares of Common Stock of the Company, subject to certain specified exceptions set forth in the Rights Plan,

including passive institutional investors.

The Rights Plan also provides that any person who would otherwise be deemed an Acquiring Person

as of the date of the adoption of the Rights Plan will not be deemed to be an Acquiring Person for so long as such person does not acquire,

subject to certain specified exceptions, beneficial ownership of any additional shares of Common Stock following adoption of the Rights

If the Rights become exercisable, all holders

of Rights (other than the person or group triggering the Rights Plan, whose Rights would become void) will be entitled to acquire shares

of Common Stock at a 50 %

discount to the then-current market price or the Company may exchange each Right held by such holders for one share of Common Stock.

The Rights will expire at the close of business

on the day before the first anniversary of the date of the Rights Plan, unless the Rights Plan is amended to change the Final Expiration

Date (as defined in the Rights Plan) or the Rights are earlier redeemed or exchanged by the Company

Subsequent Events

On February 14, 2025, the Company’s Board

of Directors authorized a dividend of 24 ¢ per share to shareholders of record on March 14, 2025 .

On January 17, 2025, the Company announced the

appointment of Mr.

Seyfert as its next President & Chief Executive Officer, effective March 1, 2025.

Christopher J.

will step down as President & Chief Executive Officer on that date and then serve as a Special Advisor through his planned retirement

from the Company in May 2025.

will step down as Vice

President, General Counsel, and Corporate Secretary on June 30, 2025 and then serve as Senior Counsel to the Company until his planned

retirement from the Company on June 30, 2026.

On March 2, 2026, the Company’s Board of

Directors authorized a dividend of 8 ¢

per share to shareholders of record on March

On February 22, 2026, the Company announced that

each of Sandra Froman, Christopher Killoy and Rebecca Halstead retired from the Board of Directors.

Following such retirements, on February 22, 2026,

the Board of Directors elected each of Aaron Rivers, Stephen Timm and Lorin Cassidy Wolfe to fill the vacancies on the Board of Directors

created through such retirements, effective immediately.

The Company’s management has evaluated transactions

1 unchanged sentence

have a material impact on the Company’s results of operations or financial position.

ITEM 9—CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING

AND FINANCIAL DISCLOSURE

9—CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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 8. Financial Statements and Supplementary Data