FTLF 10-K & 10-Q changes, risk factors and insider trading

We are currently dependent on sales to GNC for a significantsubstantial portion of our sales.

Sales to GNC’s centralized distribution platform, including indirect distribution of product to domestic and international franchisees, accounted for approximately 23%14% and 33%23% of our total sales for the years ended December 31, 20242025 and 2023,2024, respectively.respectively, although we anticipate that the percentage of sales to GNC to continue to decrease in the fiscal year ending December 31, 2026 due to the acquisition of Irwin and the recognition of a full year of sales attributable to those brands. GNC’s franchisees are not required to carry our products. In the event GNC ceases purchasing products from us, or otherwise reduces its purchases, our total revenue will be negatively impacted, and such impact could be material. Moreover, the transition to GNC’s centralized distribution system had the effect of concentrating a significant portion of our accounts receivable with a single payor. Prior to the transition, we collected receivables from individual franchisees. We anticipate that GNC will continue to represent a substantial portion of all accounts receivable for the foreseeable future. In the event that our sales to GNC decrease, our results from operations will be negatively affected, and such effect may be material.

We currently are focusing our marketing efforts on increasing the sale of products to GNC,our wholesale customers, both domestically and internationally, as well as increasing the number of retailers selling MusclePharmour products.other brands, which represent a growing percentage of our revenue. In addition, we are focused on increasing our direct-to-consumer revenue through e-commerce platforms such as Amazon. We may not be able to successfully increase sales through these channels. Moreover, unilateral decisions could be taken by our distributors or customers to discontinue all or any of our products that they are carrying or selling at any time, which would cause our business to suffer. Further, the inability to sell our products through e-commerce platforms, including Amazon, would materially impact our sales and operating results.

Consumers are increasingly shopping through e-commerce websites and mobile commerce applications, and this trend is anticipated to continue, significantly altering the retail landscape in our category. If we are unable to compete effectively in the expanding e-commerce market or develop the data analytics capabilities needed to generate actionable commercial insights, our business performance may be impacted, which may negatively impact our financial condition, results of operations and cash flows.

We are dependent on Dayton Judd, our Chair and Chief Executive Officer, for the continued performance of our business. There can be no assurance that he will continue to be employed by us for a particular period of time. The loss of Mr. Judd or andJudd, other executive officerofficers, key personnel, or keya personnelcombination of the three, could harm our business, financial condition, cash flow and results of operations. We have not purchased any insurance policies with respect to Mr. Judd or any other executive officer in the event of the death or disability of Mr. Judd or any other executive officer. Therefore, if Mr. Judd or any of the member of our executive management team dies or becomes disabled, we will not receive any compensation to assist in their absence.

As a result of economic conditions, we may be unable to raise our prices sufficiently to protect profit margins. We have previously experienced inflationary headwinds across our business, and although inflationary pressures have abated, any increase in inflation from current levels may result in our inability to achieve price increases or cost savings. And uncertain or unfavorable economic conditions have and could continue to negatively impact the financial stability of our customers or suppliers, which could lead to increased uncollectible receivables or non-performance. Current global geopolitical tensions, including related to Ukraine and the Middle East, may exacerbate any economic downturn and inflation. Any of these events could have an adverse effect on our business, financial condition, results of operations and cash flows.flow.

We mayhave incurincurred substantial debt in conjunction with our acquisitions and may incur additional debt in connection with our M&A strategy, which could have a negative impact on our liquidity position and which could adversely affect our business.

We completed the acquisition of Mimi’s Rock Corp. on February 28, 2023 and2023, the acquisition of substantially all of the assets of MusclePharm on October 10, 2023.2023 and the acquisition of substantially all of the assets of Irwin on August 8, 2025. From time to time, we may evaluate and pursue additional potential acquisitions or other strategic transactions. Evaluating potential transactions, including divestitures, requires additional expenditures (including legal, accounting and due diligence expenses, higher administrative costs to support the acquired entities and information technology, personnel and other integration expenses), and may divert the attention of our management from day-to-day operating matters. Companies or operations we acquire or joint ventures we enter into may not be profitable or may not achieve the anticipated profitability that justifies our investments.

In measuring revenue and determining the consideration the Company is entitled to as part of a contract with a customer, the Company takes into account the related elements of variable consideration. Such elements of variable consideration include, but are not limited to, estimated sales allowances, defective products, product returns and sales incentives, such as markdowns and marginsales adjustments.promotions. For these types of arrangements, the adjustments to revenue are recorded at the later of when (i) the Company recognizes revenue for the transfer of the related products to the customers, or (ii) the Company pays, or promises to pay, the consideration.

WeWith the exception of Irwin, we currently have a 30-day product return policy for direct-to-consumer sales, which allows for a 100% sales price refund for the return of unopened and undamaged products purchased from us online through one of our websites or e-commerce platforms. Irwin allows for returns within 60 days of purchase for direct-to-consumer sales. Product sold to certain wholesale customers may be returned from store shelves or the distribution center in the event product is damaged, short dated, expired or recalled.

Information for product returns is received on a regular basis and adjusted for accordingly. Adjustments for returns are based on factual information and historical trends for all Company Productsproducts and are specific to each distribution channel. We monitor, among other things, remaining shelf life and sell-through data on a weekly basis. If we determine there are any risks or issues with any specific products, we accrue sales return allowances based on management’s assessment of the overall risk and likelihood of returns in light of all information available.

Sales to customers in the U.S. were approximately 95% and 93% for the yearyears ended December 31, 20242025 and 2023, respectively,2024, with the balance of sales to customers primarily in Canada.

For direct-to-consumer sales, with the exception of Irwin Products, the Company allows for returns within 30 days of purchase. Irwin allows for returns within 60 days of purchase for direct-to-consumer sales. Our wholesale customers, such as GNC,customers may return purchased products to the Company under certain circumstances, which include expired or soon-to-be-expired products located in GNC corporateretail stores or at any of its distribution centers, and products that are subject to a recall or that contain an ingredient or ingredients that are subject to a recall by the U.S. Food and Drug Administration.Administration (“FDA”).

A right of return does not represent a separate performance obligation, but because customers are allowed to return products, the consideration to which the Company expects to be entitled is variable. UponSuch evaluationelements of returns,variable theconsideration Companyinclude, determinedbut thatare not limited to, estimated sales allowances, defective products, product returns areand immaterial,sales incentives, such as markdowns and thereforesales believespromotions. itThe isCompany probable that such returns will not cause a significant reversal of revenue inuses the future.most likely amount method to quantify the variable consideration. We assess our contracts and the reasonableness of our conclusions on a quarterly basis.

The Company periodically issues restricted share units (“RSUs”), stock options and warrants to employees and non-employees in non-capital raising transactions for services rendered. Such issuances vest and expire according to the terms established at the issuance date.

Stock-based payments to officers, directors, employeesdirectors and consultants for acquiring goods and services from non-employees,employees, which include grants of employee stock options, are recognized in the financial statements based on their grant date fair values in accordance with ASC 718, Compensation-Stock Compensation. Stock-based payments to officers, directors, and employees that are time vested are measured at the grant date fair value and compensation cost is recognized on a straight-line basis over the vesting period. Recognition of compensation expense for non-employees is in the same period and manner as if the Company had paid cash for the services. The fair value of stock-based payments is estimated using the Black-Scholes option-pricing model or other applicable valuation model such as the Monte Carlo valuation pricing model, which uses certain assumptions related to risk-free interest rates, expected volatility, expected life, and future dividends. The assumptions used could materially affect compensation expense recorded in future periods.

Revenue. Revenue for the year ended December 31, 20242025 increased 22%26% to $64,469$81,458 as compared to $52,700$64,469 for the year ended December 31, 2023.2024. The increased revenue for the year ended December 31, 20242025 compared to the prior year is primarily due to the acquisition of MRC and the MusclePharm assets,Irwin, partially offset by a decline in Legacy FitLife revenue. MRC was acquired February 28, 2023, and as such, only ten months of MRCdeclining revenue werefrom included in the Company’s financial statements for the year ended December 31, 2023.MRC. The MusclePharmIrwin assets were acquired on OctoberAugust 10,8, 2023.2025.

Legacy FitLife revenue for the year ended December 31, 20242025 was $25,387,$61,993, a 10%4% decrease compared to $64,469 for the previousyear year,ended December 31, 2024, driven by a 16%7% declinedecrease in wholesaleonline revenue, partially offset by a 3%2% increase in online revenue. The Company’s wholesale revenue continues(MRC toand beMusclePharm challengedare bynow declining customer countsincluded in theLegacy brick-and-mortar stores of our wholesale partners.FitLife).

Online revenue during the year ended December 31, 20242025 was approximately 67%51% of total revenue, compared to roughly 63%67% of total revenue during the same twelve-month period in 2023.2024. The decline in the percentage of revenue coming from online sales is due to the acquisition of Irwin, which had minimal online revenue at the time of the acquisition.

Sales to customers in the U.S. were approximately 95% and 93% for the year ended December 31, 20242025 and 2023, respectively,2024, with the balance of sales primarily to customers in Canada.

Cost of Goods Sold. Cost of goods sold for the year ended December 31, 20242025 increased 16%37% to $36,389$50,005 as compared to $31,268$36,389 for the year ended December 31, 2023.2024. The increase of $5,121$13,616 is primarily due to anthe increase in revenue attributable tofrom the acquisitionsacquisition of MRCIrwin, andwhich includes $1,045 from the MusclePharmamortization assets.of the inventory step-up.

Gross Profit. Gross profit for the year ended December 31, 20242025 increased to $28,080$31,453 as compared to $21,432$28,080 for the year ended December 31, 2023.2024. This 31%12% increase in gross profit is principally attributable to higherthe MRCacquisition grossof profitIrwin, aspartially welloffset asby incrementallower gross profit from MusclePharm.Legacy FitLife.

Gross Margin. Gross margin for the year ended December 31, 20242025 increaseddecreased to 43.6%38.6% from 40.7%43.6% for the year ended December 31, 2023.2024. The increasedecrease in gross margin is primarily attributable to higherthe marginsacquisition fromof MRCIrwin, andwhich Legacyhistorically FitLifegenerated lower gross margin than FitLife. Gross margin was also adversely affected by $1,045 of amortization of the inventory step-up, as well as continued MusclePharm promotional investment. Excluding the amortization of the fair value step-up to MRC inventory acquired in the first quarter of 2023. Excluding the $323 impact of the step-up amortization,step-up, gross margin would have been 41.3%39.9% during the year ended December 31, 2023.2025.

Advertising and Marketing. Advertising and marketing expense for the year ended December 31, 20242025 increased to $4,626$4,860 as compared to $4,276$4,626 for the same period of the prior year. The 8%5% increase is primarily due to the full-period impactresult of MRC advertising and marketing as well as incremental advertising and marketing expense followingfor the acquisition of the MusclePharm assets.Irwin.

SG&A. SG&A expense for the year ended December 31, 20242025 increased by $2,087$4,064 to $9,972$14,036 as compared to $7,885$9,972 for the year ended December 31, 2023.2024. The 41% increase wasin SG&A is primarily due to the full-period impactacquisition of MRC SG&A as well as higher personnel costs (including salaries and benefits) and higher professional fees. In addition, the Company incurred non-recurring severance costs of $184 during the year ended December 31, 2024.Irwin.

Merger and Acquisition Related Expense. Merger and acquisition related expense decreasedincreased to $255$2,075 for the year ended December 31, 20242025 compared to $1,627$255 for the same period of 2023,2024, driven primarily by transaction costs related to the Irwin acquisition ofduring MRC and the MusclePharm assets in 2023.2025.

Net Income. We generated a net income of $6,326 for the year ended December 31, 2025, a 30% decrease compared to net income of $8,984 for the year ended December 31, 2024, an increase of 70% compared to net income of $5,296 for the year ended December 31, 2023.2024. The increasedecrease in net income for the year ended December 31, 20242025 compared to the same period in 20232024 was primarily attributable to higheran revenue and gross profit from MRC, incremental revenue and gross profit from MusclePharm, as well as a reductionincrease in acquisition-related expense due to the acquisitions of MRC and the MusclePharm assets that closed during 2023, partially offset by incremental SG&A expense and higher interest expense due to the debt borrowed in conjunction with theIrwin acquisition ofas thewell MusclePharmas assets.lower gross profit from certain Legacy FitLife brands.

One of the primary metrics used by management to evaluate the performance of the Company’s brands is contribution, a non-GAAP financial measure which management defines as gross profit less advertising and marketing expenditures. Other companies may also report contribution as a performance metric, but their definition or calculation of contribution may differ from the Company’s. Management believes that contribution, as defined by the Company, is a particularly relevant performance metric since it incorporates the gross profit associated with a specific brand or collection of brands as well as the advertising and marketing expenditures associated with the same brand or brands. With limited exceptions, other operating expenses incurred by the Company are generally not allocable to a specific brand or collection of brands. Management intends to provide this level of disclosure for no more than two years following a transaction, after which the performance of acquired brands will be reported as part of Legacy FitLife results.

Other than for MusclePharm,Irwin Products, the numbers in the contribution tables presented below represent the performance of a collection of brands. Legacy FitLife consists of nine brands and MRC consists of threethirteen brands. These collections of brands do not meet the definition of operating segments and are not managed as such.

Gross margin increasedfor Legacy FitLife decreased to 40.7% during the fourth quarter of 2025 compared to 41.4% during the fourth quarter of 2024last year. Contribution as a percentage of revenue decreased to 32.5% compared to 40.3%34.9% during the fourth quarter of last year.

Contribution as a percentage of revenue increaseddecreased to 34.9%29.6% compared to 33.4%34.9% during the fourth quarter of last year. Excluding the effect of the inventory step-up amortization of $653, gross margin and contribution as a percentage of revenue would have been 37.0% and 32.2%, respectively, during the fourth quarter.

As of December 31, 2024,2025, the Company had positive working capital of $6,832$11,459, compared to $4,356$6,832 at December 31, 2023.2024. Our principal sources of liquidity at December 31, 20242025 consisted of $4,468$1,646 of cash and $1,626$8,765 of accounts receivable. The increase in working capital is principally attributable to positivehigher operatingaccounts cashreceivable flowsand duringinventory balances subsequent to the year ended December 31, 2024, partially offset by a voluntary paydownacquisition of $2,500Irwin, which occurred on theAugust Term8, Loans as well as the three scheduled amortization payments totaling $4,500.2025.

On September 24, 2019, the Company entered into a line of credit agreement with Mutual of Omaha Bank (the “Lender”), subsequently acquired by CIT Bank N.A., then acquired by First Citizens Bank & Trust Company, providing the Company with a $2.5 million revolving line of credit (the “Line of Credit”). The Line of Credit allowsallowed the Company to request advances thereunder and to use the proceeds of such advances for working capital purposes until the maturity date, or unless renewed at maturity upon approval by the Company’s Board and the Lender. The Line of Credit iswas secured by all assets of the Company.

On February 23, 2023, the Company and the Lender amended the Line of Credit Agreement (the “Prior2023 Credit Agreement”) providing the Company with a term loan for the principal amount of $12.5 million (“Term Loan A”). All other terms of the Credit Agreement remain unchanged. All of the proceeds from Term Loan A were used for the acquisition of MRC.

On October 10, 2023, the Company entered into a Second Amended and Restated Credit Agreement (the “Prior Credit Agreement”) with the Lender, amending and restating the 2023 Credit Agreement between the Company and the Lender. Pursuant to the Prior Credit Agreement, the Lender provided the Company with an additional term loan (“Term Loan B”, and together with Term Loan A, the “Term Loans”) for the principal amount of $10,000 and extended the maturity date of the Line of Credit of $3.5 million to December 23, 2024. The Company used the proceeds from Term Loan B to fund the acquisition of the MusclePharm assets.

On December 19, 2024, the Company entered into the First Amendment to the AmendedPrior Credit Agreement (the “Amended Prior Credit Agreement”) to extend the maturity date of the $3.5 million Line of Credit to April 30, 2026. Pursuant to the Amended Prior Credit Agreement, the Line of Credit accruesaccrued interest at an annual rate equal to the greater of 3.50% or the one-month secured overnight financing rate (“SOFR”) rate plus 2.75%, and each advance will bewas payable on the maturity date with the interest on outstanding advances payable monthly. The Company may,was permitted, at its option, to prepay any borrowings under the Line of Credit, in whole or in part at any time prior to the maturity date, without premium or penalty.

Our results of operations and financial condition are subject to numerous risks and uncertainties described in our comprehensive Annual Report on Form 10-K for our fiscal year ended December 31, 2025, filed with the SEC on MarchJune 31,30, 2026. Management is not aware of any material changes to the risk factors discussed in Part 1, Item 1A, of the Annual Report on Form 10-K for the year ended December 31, 2025. You should carefully consider these risk factors in conjunction with the other information contained in this Quarterly Report. Should any of these risks materialize, our business, financial condition and future prospects could be negatively impacted.

The Company distributes the NDS Products principally through franchised General Nutrition Centers, Inc. (“GNC”) stores located both domestically and internationally. The iSatori Products are sold through retail locations, which include specialty and mass market retailers, as well as online directly to the end consumer. The Company distributes the MRC Products primarily online through e-commerce platforms, such as Amazon.com (“Amazon”), directly to the end consumer. MusclePharm’s products are sold to both wholesale customers as well as online through various e-commerce platforms directly to the end consumer. Irwin Products are sold principally through wholesale channels in mass market and health food store segments.segments, but also online directly to the end consumer.

Comparison of the three months ended MarchJune 31,30, 2026 to the three months ended MarchJune 31,30, 2025

Revenue. Revenue for the three months ended MarchJune 31,30, 2026 increased 59%65% to $25,325$26,549 compared to $15,936$16,127 for the three months ended MarchJune 31,30, 2025. The increase in revenue for the three months ended MarchJune 31,30, 2026 compared to the prior period is primarily due to the acquisition of Irwin, partially offset by declining revenue from Legacy FitLife, as discussed below. The Irwin assets were acquired on August 8, 2025.

Legacy FitLife revenue for the three months ended MarchJune 31,30, 2026 was $12,476,$12,414, a 22%23% decrease compared to the previous year, driven by ana 18%19% decline in online revenue primarily attributable to MRC as well as a 28%31% decrease in wholesale revenue attributable to lower sales to certain retail partners, primarily GNC.

Wholesale revenue during the quarter ended MarchJune 31,30, 2026 was approximately 56%55% of net revenue, compared to 44%45% for online channels for the same period.channels. Wholesale revenue during the quarter ended MarchJune 31,30, 2025 was 33%34% of net revenue compared to 67%66% for online channels during the same period. The decline in the percentage of revenue coming from online sales is primarily due to the acquisition of Irwin, which had minimal online revenue at the time of the acquisition.

Sales to customers in the U.S. were approximately 95% and 96% during the quarters ended MarchJune 31,30, 2026 and 2025, respectively, with the balance of sales to customers primarily in Canada.

Cost of Goods Sold. Cost of goods sold for the three months ended MarchJune 31,30, 2026 increased to $15,808$16,738 as compared to $9,062$9,223 for the three months ended MarchJune 31,30, 2025. This 74%81% increase is primarily due to the increase in revenue from the acquisition of Irwin.

Gross Profit. Gross profit for the three months ended MarchJune 31,30, 2026 increased to $9,517$9,811 as compared to $6,874$6,904 for the three months ended MarchJune 31,30, 2025. This 38%42% increase in gross profit is principally attributable to the acquisition of Irwin, partially offset by lower gross profit from Legacy FitLife.

Gross Margin. Gross margin for the three months ended MarchJune 31,30, 2026 decreased to 37.6%37.0% from 43.1%42.8% for the comparable prior period. The decrease in gross margin is primarily attributable to the acquisition of Irwin, which has historically generated a lower gross margin than FitLife.

Advertising and Marketing. Advertising and marketing expense for the three months ended MarchJune 31,30, 2026 increased to $1,245$1,449 as compared to $1,053$1,191 for the same period of the prior year. The 18%22% increase is primarily the result of advertising and marketing expense attributable to Irwin, partially offset by lower advertising and marketing expense attrinutableattributable to Legacy FitLife.

SG&A. SG&A expense for the three months ended MarchJune 31,30, 2026 increased 98%91% to $4,963$4,755 as compared to $2,512$2,485 for the three months ended MarchJune 31,30, 2025. The 98%91% increase in SG&A is primarily due to the acquisition of Irwin.

Merger and Acquisition Related. Merger and acquisition related expense decreased by $332$696 during the quarter ended MarchJune 31,30, 2026 compared to $332$696 for the same period in 2025, driven by non-recurring transaction costs related to the Irwin acquisition during 2025.

Net Income. We generated net income of $1,720$1,950 for the three months ended MarchJune 31,30, 2026 as compared to net income of $2,018$1,747 for the three months ended MarchJune 31,30, 2025. The decreaseincrease in net income for the three months ended MarchJune 31,30, 2026 compared to the same period in 2025 was primarily attributable to an increase in SG&A due to the Irwin acquisition asof wellIrwin, aspartially offset by lower gross profit attributable to Legacy FitLife.

For the firstsecond quarter of 2026, revenue for Legacy FitLife (which now includes MusclePharm as well asand MRC) declined 22%23% compared to the same period last year due to declines in both online and wholesale revenue.

Online revenue decreased by 18%19% compared to the firstsecond quarter of last year, primarily driven by lower online sales from MRC. Wholesale revenue decreased 28%31% compared to the firstsecond quarter of last year attributable to lower sales to certain retail partners, primarily GNC.

Gross margin for Legacy FitLife decreased to 41.2%41.7% during the firstsecond quarter of 2026, compared to 43.1%42.8% during the firstsecond quarter of last year. Contribution as a percentage of revenue decreased to 34.1% compared to 36.5%35.4% during the firstsecond quarter of last year.

During the quarter,second quarter of 2026, Irwin generated 80%76% of its revenue from the wholesale channel and 20%24% from online sales.

Online revenue during the second quarter of 2026 represents transactions through Irwin’s websites as well as through Amazon and other e-commerce platforms. The Company began selling Irwin products on Amazon in mid-October of 2025, and sales have continued to increase since launch in October to an annual revenue run rate of approximately $9.5$11 million of revenue by the end of the firstsecond quarter of 2026.

Total revenue for Irwin increased approximately10% 2%sequentially in the firstsecond quarter of 2026 compared to the fourthfirst quarter of 2025.2026, primarily due to continued online revenue growth. Irwin generated gross margin of 34.0%32.8% and contribution as a percentage of revenue of 31.3%29.2% during the firstsecond quarter of 2026.

For the firstsecond quarter of 2026 for the Company overall, revenue increased 59%,65%, gross profit increased 38%,42%, and contribution increased 42%46% compared to the firstsecond quarter of 2025.

Gross margin decreased to 37.6%37.0% during the firstsecond quarter of 2026 compared to 43.1%42.8% during the firstsecond quarter of last year, with the decline in gross margin primarily attributable to the acquisition of Irwin, which historically operated at a lower gross margin than Legacy FitLife.

Contribution as a percentage of revenue for the firstsecond quarter of 2026 decreased to 32.7%31.5% compared to 36.5%35.4% during the firstsecond quarter of last year.

As of MarchJune 31,30, 2026, the Company had positive working capital of $10,828,$9,637, compared to $11,459 at December 31, 2025. Our principal sources of liquidity at MarchJune 31,30, 2026 consisted of $1,192$1,089 of cash and $7,778$6,977 of accounts receivable. The decrease in working capital is principally attributable to lower accounts receivable balances as of MarchJune 31,30, 2026 as compared to December 31, 2025.

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

As of MarchJune 31,30, 2026, the borrowings outstanding on the Irwin Term Loan and the Credit Line were $37,578$36,055 and $4,200,$2,000, respectively.respectively, and $8,000 was available to borrow on the Credit Line.

The Company has historically financed its operations primarily through cash flow from operations and equity and debt financings. The Company currently anticipates that cash derived from operations and existing cash reserves, along with available borrowings under the Line of Credit, will be sufficient to provide for the Company’s liquidity for the next twelve months. The Company’s material cash requirements over this period consist primarily of scheduled principal and interest payments under the Credit Agreement and working capital needs.

Cash Provided by Operating Activities. Cash provided by operating activities for the threesix months ended MarchJune 31,30, 2026 was $2,484$6,119 compared to cash provided by operating activities of $2,328$3,523 for the threesix months ended MarchJune 31,30, 2025. The increase in cash provided by operating activities was primarily due to working capital fluctuations compared to the same period of 2025.

Cash Used in Investing Activities. Cash used in investing activities for the threesix months ended MarchJune 31,30, 2026 and 2025 was $0 and $24,$5,029, respectively. The decrease in cash used in investing activities was primarily due to lowerthe capitaldeposit expenditures fortowards the threeIrwin acquisition that occurred during the six months ended MarchJune 31,30, 2026.2025.

Cash Used in Financing Activities. Cash used in financing activities for the threesix months ended MarchJune 31,30, 2026 was $2,924$6,647 compared to $866$1,568 during the threesix months ended MarchJune 31,30, 2025. The increase in cash used in financing activities for the three months ended March 31, 2026 increasedwas primarily due to higher repayment of debt.

Management concluded that a triggering event did not occur during the three months ended MarchJune 31,30, 2026. We will continue to review for impairment indicators as necessary in future periods.

Wholesale revenue during the quarter ended MarchJune 31,30, 2026 was approximately 56%55% of net revenue, compared to 44%45% for online channels for the same period. Wholesale revenue during the quarter ended MarchJune 31,30, 2025 was approximately 33%34% of net revenue, compared to 67%66% for online channels during the same period in 2025.

Sales to customers in the U.S. were approximately 95% and 96% during the three and six months ended MarchJune 31,30, 2026 and 2025, respectively, with the balance of sales for the same respective periods being to customers primarily in Canada.