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

Lack of success in recruitment and retention of IT and data and analytics professionals may decrease our revenuesrevenues, impair our ability to service clients and pursue opportunities in the market and increase the costs needed to maintain our workforce.

Our business involves the delivery of professional services and is labor-intensive. Our success depends upon our ability to attract, develop, motivate and retain highly skilled professionals who possess the skills and experience necessary to deliver our services. Qualified IT and data and analytics professionals are in demand worldwide and are likely to remain a limited resource for the foreseeable future. There can be no assurance that these qualified professionals will be available to us in sufficient numbers, or that we will be successful in retaining current or future employees. Failure to attract and retain qualified professionals in sufficient numbers may have a material adverse effect on our business, operating results and financial condition.condition, and could also result in us being unable to meet the demand for our services and materialize opportunities in the market. Historically, we have done much of our recruiting from outside of the country where the client work is performed. Accordingly, any perception among our IT professionals, whether or not well founded, that our ability to assist them in obtaining temporary work visa and permanent residency status has been diminished, could lead to significant employee attrition. Any significant employee attrition will increase expenses necessary to replace and retrain our professionals and could decrease our revenues if we are not able to provide sufficient numbers of these resources to our clients.

We may have difficulty maintaining client relationships if the trend towards utilizing Managed Service Providers (“MSPs”) or setting up Global Capability Centers (GCC's) continues.

Within our IT Staffing Services segment, many large users of staffing services are employing MSP’s or have started utilizing GCC's outside the United States, to manage their contractor expenses in an effort to drive down overall costs. MSP clients that have their own GCC's represented approximately 36%30% of our IT Staffing Services Segment’s 20242025 revenues and increased marginally in recent years.revenues. The general impact of this shift towards the MSP and GCC model has been to lower our gross margins.margins Shouldand thiscreate trenddelivery towardsinefficiencies. utilizingThis theshift MSPhas modelalso continue, it is likely thataffected our grossclient marginssatisfaction willand beretention, pressuredresulted in thea future. In addition, if large usersloss of staffingbusiness services continue to employ MSPs, the relationship between usopportunities and those large users may be primarily conducted through MSPs, in which case we may have difficulty maintaining those client relationships because the MSP model uses the MSP as an intermediary between the staffing service provider and the end-user, and reducesdelayed our directramp-up contactof withGCC the end-user.operations.

Our revenues and operating results have historically been subject to significant variations from quarter to quarter depending on a number of factors, including the timing and number of client projects commenced and completed during the quarter, our client's evaluation of our work progress, the availability and / rescheduling of our client's allocation budgets, the number of working days in a quarter, employee hiring and attrition, and utilization rates during the quarter.

We have mademay in the past,future and may make in the future,complete, acquisitions whichthat could require significant management attention, disrupt our existing business, result in dilution to our shareholders, deplete our cash reserves, increase our debt levels and adversely affect our financial results.

Our revenues are highly dependent on clients located in North America, as well as clients concentrated in certain industries. Economic slowdowns, changes in law and other restrictions or factors that affect the economic health of these industries may affect our business. For the year ended December 31, 2024,2025, approximately 54%58% of our revenues were derived from our top ten clients and approximately 49%54% of revenues came from financial services clients. Consequently, if our clients reduce or postpone their spending significantly, this may lower the demand for our servicesservices, cause operational disruptions and workforce underutilization, impact delivery efficiency, reduce our pricing leverage and bargaining power in future engagements and create negative investor perception. A reduction or postponement in spending by our clients may also reduce our ability to invest in growth and innovation, impact our long-term market relevance and negatively affect our revenues and profitability. Further, any significant decrease in the rate of economic growth may reduce the demand for our services and negatively affect our revenues and profitability.

A significant number of organizations isare attemptingchoosing to migrate their IT business applications to advanced technologies, such as artificial intelligence, cloud services, data science-based solution, mobility, and social analytics. As a result, our ability to remain competitive depends on several factors, including our ability to develop, train and hire employees with skills in advanced technologies. Our failure to hire, train and retain employees with such skills could have a material adverse impact on our future revenues.

In the past years, certainCertain of our existing and potential customers have started to use low-cost offshore outsourcing centers to perform technology-related work. Should this shift towards moving technology-related work to offshore outsourcing centers continue, our business, operating results and financial condition could be adversely affected.

Strict data privacy laws regulating the collection, transmission, storage and use of employee data and consumers’ personally identifying information are evolving in the U.S.U.S, India and other jurisdictions in which we operate. These laws impose compliance obligations for the collection, use, retention, security, processing, transfer and deletion of personally identifiable information of individuals and creates enhanced rights for individuals. These changes in the legal and regulatory environments in the areas of customer and employee privacy, data security, and cross-border data flows could have a material adverse effect on our business, primarily through the impairment of our marketing and transaction processing activities, the limitation on the types of information that we may collect, process and retain, the resulting costs of complying with such legal and regulatory requirements and potential monetary forfeitures and penalties for noncompliance.

WeIn incurredthe anordinary expense chargecourse of $450,000our business, we collect and store sensitive data, including intellectual property, our proprietary business information and that of our customers, suppliers and business partners, and personally identifiable information of our customers and employees, in 2022our relateddata center and on our networks. The secure processing, maintenance and transmission of this information is critical to thisour event,operations whichand includedbusiness thestrategy. costOur hybrid work-from-home business model may heighten risks of engagingsecurity external advisors.breaches. While we have implemented security measures to address risks of security breaches and adopted certain remedialnetwork measuresstrengthening as a result of this incident,measures, our information technology and infrastructure may still be vulnerable to security breaches and other disruptions, including attacks by hackers, or breaches due to employee error, malfeasance or other disruptions. Any such breach or disruption could compromise our networks and the information stored there could be accessed, publicly disclosed, lost or stolen. Any such access, disclosure or other loss of information could result in legal claims or proceedings, liability under laws that protect the privacy of personal information, and regulatory penalties, disrupt our operations and the services we provide to customers, damage our reputation, and cause a loss of confidence in our services, which could adversely affect our operating results and competitive position. We maintain cyber risk insurance, but this insurance may not be sufficient to cover all of our losses from any breaches of our networks.

We are dependent on the proper functioning of information systems in operating our business. Critical information systems are used in every aspect of our daily operations, perhaps most significantly, in the identification and matching of staffing resources to client assignments and in the client billing and consultant or vendor payment functions. Our information systems may not perform as expected and are vulnerable to damage or interruption including natural disasters, fire or casualty theft, technical failures, terrorist acts, cybersecurity breaches, power outages, telecommunications failures, physical or software intrusions, computer viruses, employee errors or other events. Failure or interruption of our critical information systems may require significant additional capital and management resources to resolve, which could have a material adverse effect on our business. Additionally, many of our information technology systems and networks are cloud-based or managed by third parties, whose future performance and reliability we cannot control. The risk of a cyber-attack or security breach on a third party carries the same risks to us as those associated with our internal systems. There can be no assurance that such parties will not experience cybersecurity breaches that could adversely affect our employees, customers and businesses or that our audit or diligence processes will successfully deter or prevent such breach.

WeOur aresuccess highlyis dependent in large part, on our managementability teamto attract and expectdevelop thatfuture leaders, and keep our successsenior will depend largely upon their efforts, expertiseleadership and abilities.key Overoperating employees motivated and aligned with our strategic vision. We must also continue to maintain a senior leadership that, among other things, is effective in executing on our strategic goals and materializing opportunities to grow our service capabilities. The loss of senior executives, or the lastfailure severalto years,attract, weintegrate haveand experiencedretain turnovernew insenior executives to meet the leadershipneeds of our businesses,business and the loss of the services of any of our key executives for any reason, could have a material adverse effect on our business.business and results of operations. To attract and retain executives and other key employees in a competitive marketplace, we must provide a competitive compensation package, including cash-based and equity-based compensation. The loss or any sustained attrition of our key operating employees, or the failure to effectively integrate new members of our management team or key operating employees, could have a material adverse effect on our business, including our ability to establish and maintain client, consultant and candidate, professional and technical relationships.

In recent years, the vast majority of our H1-B hires were not subject to the annual quota limiting H1-B visas because they were already in the U.S. under H1-B visa status with other employers. As a result, the negative impact on recruiting due to the exhaustion of recent H1-B quotas was not substantial. However, the subject of H1-B visas has recently become a political discussion point and the entire H1-B visa program could be significantly overhauled. If a new or revised H1-B visa program is implemented, or there are changes to the rules regarding the existing H1-B visa program, there could be elements of the new/revised H1-B visa program that may not be advantageous to our business model thusand could adversely impactingimpact our business, operating results or financial condition.

Immigration change continuesand the enforcement of immigration laws continue to attract significant attention in the public arena and in the current U.S. administration and Congress. If new immigration legislation is enacted in the U.S. or in the other jurisdictions in which we do business, such legislation may contain provisions that could make it more difficult or costly for us to recruit and retain IT professionals, and to a lesser extent data and analytics professionals. Additionally, there is uncertainty as to the position the U.S. will take with respect to immigration under the current administration or any new administration. As a result, we may incur additional costs to run our business or may have to change the way we conduct our operations, either of which could have a material adverse effect on our business, operating results and financial condition. Also, if the enforcement of immigration laws by governmental authorities is unjustified or discriminatory, such enforcement could have the effect of disrupting our workforce.

In addition to tracking general economic conditions in the markets that we service,serve, a largesignificant portion of our revenuesrevenue is generatedderived from a limited number of clients (see Item 1A, the Risk Factor entitled “Our revenues are highly concentrated, and the loss of a significant client would adversely affect our business and revenues”). Accordingly,As a result, our trendsoperating andresults outlookmay arebe additionallymaterially impactedinfluenced by the prospectsfinancial performance, hiring activity, and well-beingbusiness priorities of these specific clients. ThisChanges “accountin concentration”spending factorlevels or project activity by one or more significant clients may result incause our results ofto operations deviatingvary from the prevailingbroader economic trends fromin timea togiven time.period.

Within our IT Staffing Services segment, a largermeaningful portion of ourrevenue revenuesis hasgenerated come fromthrough strategic relationships with systems integrators. Additionally,In addition, many large end users ofutilize ITmanaged staffingservice servicesproviders are employing MSP’s(“MSPs”) to manage theiroversee contractor spending.engagement Bothand ofpricing. theseThese dynamicsintermediated delivery models may reduce pricing flexibility and could continue to exert pressure on our IT staffing gross margins in the future.margins.

Below is a tabular presentation of operating expenses by sales and marketing, operations, general and administrative, amortization of acquired intangible assets, employment-related claim, net of recoveries, goodwill impairment, severance expense and afinance cybersecurityand breachaccounting transition for the periods discussed:

Our IT Staffing Services segment’s 2024 revenues declined modestly, compared to 2023 revenues due to a lower average level of billable consultants during the first half of 2024 compared to the first half of 2023. However, we ended 2024 with 1,008 billable consultants, compared to 946 billable consultants at the end of 2023, an increase of 6.6%. Our average IT staffing bill rate for 2024 totaled $82.77 per hour compared to $78.84 per hour in 2023. This bill rate increase was due to higher rates on new assignments and was reflective of the type of skill sets that we deployed. Permanent placement / fee revenues totaled $0.9 million in 2024, compared to $0.8 million ain year ago.2023.

In 2024, we had two clients that exceeded 10% of total revenues (CGI = 14.5% and AllegisPopulus = 10.7%). In 2023, we had one client that exceeded 10% of total revenues (CGI = 22.5%). Our top ten clients represented 54% of total revenues in 2024 and 53% of total revenues in 2023. Additionally, our largest industry vertical, financial services, represented approximately 49% of total revenues in 2024, compared to approximately 50% in 2023.

Historically, we have funded our business needs with cash generation from operating activities. In the data and analytics services and IT staffing services industries, investment in operating working capital levels (defined as current assets excluding cash and cash equivalents minus current liabilities, excluding short-term borrowings) is a significant use of cash. Controlling our operating working capital levels by closely managing our accounts receivable balance is an important element of cash preservation. Our accounts receivable “days sales outstanding” measurement (“DSO”) at year-end 20242025 improvedincreased slightly to 54-days compared to 52-days compared to 53-days at year-end 2023.2024.

Cash provided by operating activities, our cash and cash equivalent balances on hand at December 31, 20242025 and current availability under our existing credit facility are expected to be adequate to fund our business needs over the next 12 months, including ourpotential repurchases under the $5.0 million share repurchase program,authorization which was extendedapproved by our Board of Directors throughon February 8,16, 2026, but excluding any majorsignificant acquisition-related activities.

Cash provided by (used in) operating activities for the years ended December 31, 2024,2025, 2024 and 2023 andtotaled 2022$11.1 totaledmillion, $7.2 million, and $16.0 million, respectively. In 2025, cash flows from operating activities included net income of $0.6 million, non-cash charges of $3.2 million and $12.6a million,decrease respectively.in operating working capital of $7.4 million. In 2024, cash flows from operating activities included net income of $3.4 million, non-cash charges of $6.1 million and an increase in operating working capital of ($2.3 million). In 2023, cash flows from operating activities included a net (loss) of ($7.1 million), non-cash charges of $10.6 million and decreases in operating working capital of $12.5 million. InThe 2022,2025 cash flows from operating activities included net income of $8.7 million, non-cash charges of $6.8 million and increasesreduction in operating working capital was primarily due to lower accounts receivable, reflecting decreased revenue levels and the timing of ($2.9billings and collections, as well as decreases in prepaid and other current assets. These favorable working capital changes were partially offset by a $2.0 million). payment of deferred compensation during 2025. The 2024 increase in operating working capital reflected higher activities levels as accounts receivable and prepaid expenses increased. The 2023 reduction in operating working capital was due to lower accounts receivable, reflecting significant revenue declines during the year. The 2022 increase in operating capital largely reflected a $2.3 million repayment of the COVID-19 payroll tax deferment program.

Cash (used in) investing activities for the years ended December 31, 2024,2025, 2024 and 2023 and 2022 totaled $($0.90.5) million, $(0.9) million), ($0.2 million) and $($0.80.2) million, respectively. In 2025, cash (used in) investing activities was primarily comprised of capital expenditures totaling ($0.4) million and payments of ($0.1), respectively.million for non-current deposits. In 2024, cash (used in) investing activities consisted entirely of capital expenditures –totaling ($0.9) million, largely related to computer equipment and cyber-security related expenditures.investments. In 2023, cash (used in) investing activities consisted of ($0.3) million) of capital expenditures and a $0.1 million recovery of non-current office lease deposits. In 2022, cash (used in) investing activities consisted of ($0.8 million) of capital expenditures, primarily related to system upgrade expenditures.

In 2025, cash (used in) financing activities totaled ($1.1 million) and included ($2.2 million) for the repurchase of common stock under the Company’s share repurchase program, partially offset by $1 million of proceeds from the exercise of stock options and $0.1 million of proceeds from the issuance of common shares under our employee stock purchase plan. In 2024, cash provided by financing activities totaled $0.7 million and included $0.2 million of proceeds from the issuance of common shares under our employee stock purchase plan and $0.5 million of proceeds from the exercise of stock options, partially offset by the repurchase of common stock under the Company’s share repurchase program. In 2023, cash (used in) financing activities totaled ($1.6 million) and included ($1.1 million) of debt repayments, ($0.6 million) of common stock repurchases, partially offset by proceeds from our issuance of common shares under our employee stock purchase plan. In 2022, cash (used in) financing activities totaled ($10.4 million) and included debt repayments of ($12.0 million) partially offset by proceeds from the exercise of stock options and the issuance of common stock related to the Company’s employee stock purchase plan of $1.6 million.

On January 12, 2024, the Company entered into a consulting agreement with Primentor, Inc. to provide strategic advisory and management consulting services, as well as any other business and organizational strategy services as the Board of Directors of the Company may reasonably request from time to time. During 2025 and 2024, the Company incurred consulting expenses of approximately $1.1$0.5 million and $0.4 million related to these services. In 2025 andFor 2026, the Company expects to pay Primentor approximately $0.4 million and $0.2 million, respectively.million.

Please refer to Note 1 “Summary of Significant Accounting Policies” of the Consolidated Financial Statements and “Management’s Discussion and Analysis of Financial Condition and Results of Operations–Critical Accounting Policies and Estimates” in our Annual Report on Form 10-K for the year ended December 31, 2025 for a more detailed discussion of our significant accounting policies and critical accounting estimates. There were no material changes to these critical accounting policies during the threesix months ended MarchJune 31,30, 2026.

Results of Operations for the Three Months Ended MarchJune 31,30, 2026 as Compared to the Three Months Ended MarchJune 31,30, 2025:

Revenues for the three months ended MarchJune 31,30, 2026 totaled $41.1$41.4 million, compared to $48.3$49.1 million for the corresponding three-month period in 2025. This 15%15.6% year-over-year revenue decrease reflected a 12%16.2% revenue decrease in our Talent segment and a 21%14.3% decline in our Data & AI segment. For the three months ended MarchJune 31,30, 2026, the Company had one client that had revenues in excess of 10% of total revenues (Fidelity 24.5%26.7%). For the three months ended MarchJune 31,30, 2025, the Company had three clients that each had revenues in excess of 10% of total revenues (Fidelity = 12.9%,15.0%, Populus = 12.4% and CGI = 11.9% and Populus = 11.7%11.0%). The Company’s top ten clients represented approximately 60%61% and 56%58% of total revenues for the three months ended MarchJune 31,30, 2026 and 2025, respectively.

Below is a tabular presentation of revenues by reportable segment for the three months ended MarchJune 31,30, 2026 and 2025, respectively:

Revenues from our Data & AI segment totaled $12.6$13.5 million in the three months ended MarchJune 31,30, 2026, which decreased compared to $16.0$15.7 million in the corresponding period last year. The year-over-year decrease in revenues primarily reflects softerlower demandbookings andduring slowerthe clientsecond decision-makinghalf cyclesof for2025, newwhich projectsresulted in a smaller pipeline of revenue generating engagements entering 2026. New bookings in the firstsecond quarter of 2026 totaled approximately $13.6 million, compared to bookings of $15.3$9.0 million in the firstsecond quarter of 2025, reflecting continuedstronger cautiondemand amongfor clientsData with& respectAI to discretionary spending amid macroeconomic uncertainty.services.

Revenues from our Talent segment totaled $28.5$28.0 million in the three months ended MarchJune 31,30, 2026, compared to $32.3$33.4 million during the corresponding 2025 period. The year-over-year decline in revenue primarily reflects lower billable consultants in 2026. Billable consultants at MarchJune 31,30, 2026 totaled 619-consultants594-consultants compared to 782-consultants764-consultants one year earlier. Our average bill rate during the firstsecond quarter of 2026 was $90.91$92.17 per hour compared to $87.82$88.36 per hour in the corresponding 2025 quarter. The increase in average bill rate was due to higher value assignments during the firstsecond quarter of 2026 and was reflective of the types of skill sets that we deployed to clients.

Gross profits in the firstsecond quarter of 2026 totaled $11.0$12.0 million, which was $1.9$1.8 million lower than the firstsecond quarter of 2025 gross profits. Gross profit as a percentage of revenue wasincreased 26.8%90-basis points to 29.0% for the three-month period ended MarchJune 31,30, 2026, compared to 26.7%28.1% during the same period of 2025.2025, Thisdriven 10-basis point reduction in gross margins reflectedby higher margins in ourboth the Talent segment, offset by lower margins from ourand Data & AI segment during the current quarter.segments.

Below is a tabular presentation of gross margin by reporting segment for the three months ended MarchJune 31,30, 2026 and 2025, respectively:

Gross margins from our Data & AI segment were 37.2%40.4% of revenues during the firstsecond quarter of 2026, which represented aan decreaseincrease of 50-basis140-basis points compared to 37.7%39.0% of revenues during the firstsecond quarter of 2025. The margin reduction wasincrease primarily reflected the resultone-time recognition of previously deferred revenue associated with the completion of a lowerproject utilization rate in the 2026 quarter compared to the first quarter of 2025.milestone.

Gross margins from our Talent segment were 22.2%23.4% in the firstsecond quarter of 2026 compared to 21.2%23.0% during the corresponding quarter of 2025. This 100-basis40-basis point increase was due to higher quality placements and better pricing on new assignments in 2026.

Below is a tabular presentation of operating expenses by expense category for the three months ended MarchJune 31,30, 2026 and 2025, respectively:

SG&A expenses for the three months ended MarchJune 31,30, 2026, totaled $11.0$12.3 million or 26.8%29.7% of total revenues, compared to $14.7$13.8 million or 30.4%28.1% of total revenues for the three months ended MarchJune 31,30, 2025. ExcludingWhen the severance expense in the 2025 period andexcluding the amortization of acquired intangible assets in both2026 periods,and the amortization of acquired intangible assets, severance expense and finance and accounting transition expense in 2025, SG&A expense as a percentage of total revenues wouldwas have been 25.3%28.3% and 26.3%,24.8%, respectively.

Fluctuations within SG&A expense components during the firstsecond quarter of 2026, compared to the firstsecond quarter of 2025, included the following:

Sales and marketing expense wasdecreased $1.5by $0.8 million lower in the 2026 period compared tofrom the corresponding 2025 period. Sales and marketing expense in our Data & AI segment decreasedincreased by $0.6$0.2 million, driven primarily byreflecting lowerhigher payrollmarketing and relatedtravel costs. Sales and marketing expense in our Talent segment decreased by $0.9$1.0 million, resultingprimarily fromdue to lower payroll and related costs,costs as well asand reduced marketing spend.expenditures.

Operations expenses decreasedincreased by $0.4$0.3 million in the 2026 period compared to the corresponding 2025 period. Operations expense increased by $0.3$0.5 million in our Data & AI segment due to AI relatedAI-related personnel investments and decreased by $0.7$0.2 million in our Talent segment due to stafflower reductions.payroll costs, partially offset by higher legal expense.

General and administrative expenses decreased by $0.4$0.1 million in the 2026 period compared to the corresponding 2025 period. General and administrative expenses in ourthe Data & AI segment decreasedremained byunchanged $0.4compared millionwith primarilythe dueprior-year toperiod. lower payrollGeneral and relatedadministrative costsexpense in the 2026 period. In our Talent segment,segment generaldecreased andby administrative$0.1 expensesmillion, remainedprimarily flat.reflecting lower consulting costs.

Amortization of acquired intangible assets wasremained consistent with the prior-year period at $0.6 million in both the 2026 period and the corresponding 2025 period.million.

SeveranceFinance and accounting transition expense includedwas in$0.7 SG&Amillion and severance expense was $1.4$0.2 million in the 2025 period, compared to no severance expense in the firstsecond quarter of 2026. TheThese expensecosts related to the Company's exitingtransition Chiefof Financialits Officer.finance and accounting function to India and consisted primarily of severance, duplicate personnel costs during the transition period, and travel associated with training and knowledge transfer.

Other Income / (Expense) for the three months ended MarchJune 31,30, 2026, consisted of interest income of $288,000$260,000 and foreign exchange gains of $319,000.$63,000. For the three months ended MarchJune 31,30, 2025, Other Income / (Expense) consisted of interest income of $115,000$190,000 and foreign exchange losses of ($24,000$7,000). The higher level of interest income wasprimarily reflective ofreflected higher average cash balances induring the 2026current-year period.

Income tax expense for the threesix months ended MarchJune 31,30, 2026, totaled $393,000,$491,000, representing an effective tax rate on pre-tax income of 59.8%,75.0%, compared to ($323,000)an income tax benefit of ($248,000) for the threesix months ended MarchJune 31,30, 2025, which represented an effective tax rate on a pre-tax loss of 18.3%.(16.0%). The mainhigher driver for the highereffective tax rate in the 2026 period isprimarily thereflected shortfallnon-deductible inexecutive the expected benefit from stock options,compensation and disallowedunfavorable executivetax effects associated with stock-based compensation.

As of MarchJune 31,30, 2026, we had no bank debt, cash balances on hand of $33.6$35.6 million and approximately $21.3$20.4 million of borrowing capacity under our existing credit facility.

Historically, we have funded our organic business needs with cash generated from operating activities. Controlling our operating working capital levels by closely managing our accounts receivable balance is an important element of cash generation. As of MarchJune 31,30, 2026, our accounts receivable “days sales outstanding” (“DSOs”) increased to 60-days,61-days, compared to 56-days53-days reported at MarchJune 31,30, 2025.

Cash (used in) operating activities for the threesix months ended MarchJune 31,30, 2026, totaled ($3.2$0.9) million compared to ($2.9)$0.4 million provided by operating activities during the threesix months ended MarchJune 31,30, 2025. Operating cash flows for the 2026 period were driven by net income of $0.3$0.2 million, non-cash charges of $2.3$4.2 million, and a ($5.7$5.3) million use of cash from changes in operating working capital. The use of cash from working capital was primarily attributable to a decrease in accrued payroll and related costs, reflecting the timing of annual bonus payments, as well as an increase in accounts receivable.receivable, and to a lesser extent decreases in accounts payable and other accrued liabilities and an increase in prepaid and other current assets In the prior year period, cash (usedprovided in)by operating activities reflected a net loss of ($1.4$1.3) million, non-cash charges of $2.0$3.3 million, and and a ($3.5$1.7) million use of cash from changes in operating working capital.capital, Workingprimarily capitalattributable changesto a decrease in 2025accounts werepayable similarlyand drivenaccrued payroll and related costs, partially offset by highera decrease in accounts receivable and theprepaid timingand ofother compensation-relatedcurrent payments.assets and an increase in other accrued liabilities.

Cash (used in) investing activities was ($0.1) million inand both($0.2) million the threesix months ended MarchJune 31,30, 2026 and 2025. Investing activities in both periods consisted primarily of capital expenditures and changes in non-current deposits.

Cash provided by financing activities for the threesix months ended MarchJune 31,30, 2026 totaled $0.7$0.8 million and consisted primarily of proceeds from the exercise of stock options.options of $0.8 million, and a small amount from the issuance of common shares related to our Employee Stock Purchase Plan. Cash provided by financing activities for the threesix months ended MarchJune 31,30, 2025, wastotaled minimal$0.1 million and consisted of proceeds from the exercise of stock options and the issuance of common shares related to our Employee Stock Purchase Plan, partially offset by a small purchase of treasury shares.