TerrAscend Corp.

Previous wording

This Management’s Discussion and Analysis (“MD&A”) of the financial condition and results of operations of the Company is for the period ended March 31, 2026 and 2025 and the accompanying notes for each respective period.

Current wording

This Management’s Discussion and Analysis (“MD&A”) of the financial condition and results of operations of the Company is for the three and six months ended June 30, 2026 and 2025 and the accompanying notes for each respective period.

Previous wording

On April 23, 2026, the Acting Attorney General issued a Final Order reclassifying cannabis for medical use from Schedule I to Schedule III under the Controlled Substances Act (“CSA”). The order does not apply to adult-use cannabis which remains classified as a Schedule I controlled substance. The Final Order, effective as published in the Federal Register on April 28, 2026, establishes an expedited registration process for state medical licensees and indicates that registered state medical licensees would no longer be subject to Section 280E following the effective date of the order. Additionally, the Order recommends to the Secretary of the Treasury that retrospective 280E relief be granted to licensees in line with their state license start dates. Separately, the Attorney General withdrew the pending hearing related to the proposed rulemaking notice issued in 2024 and instituted a new expedited hearing process starting on June 29, 2026 addressing both medical and adult-use cannabis. The IRS has publicly indicated that, for Section 280E purposes, forthcoming guidance regarding the impact of rescheduling may include a transition rule allowing rescheduling relief to apply beginning with the taxable year that includes the effective date of the Final Order for activities no longer involving Schedule I or II substances; however, formal IRS guidance has not been issued yet. The ultimate impact of these developments, including the potential impact on previously recorded uncertain tax positions, remains uncertain and subject to ongoing evaluation due to the complexity of the evolving regulatory and tax environment. Accordingly, the Company is continuing to assess the potential financial statement impacts and is unable to reasonably estimate the ultimate effect at this time.

Current wording

On April 23, 2026, the Acting Attorney General issued a Final Order reclassifying cannabis for medical use from Schedule I to Schedule III under the Controlled Substances Act. The order does not apply to adult-use cannabis which remains classified as a Schedule I controlled substance. The Final Order, effective as published in the Federal Register on April 28, 2026, establishes an expedited registration process for state medical licensees and indicates that registered state medical licensees would no longer be subject to Section 280E of the Internal Revenue Code following the effective date of the order. Additionally, the Order recommends to the Secretary of the Treasury that retrospective 280E relief be granted to licensees in line with their state license start dates. Separately, the Attorney General withdrew the pending hearing related to the proposed rulemaking notice issued in 2024 and instituted a new expedited hearing process starting on June 29, 2026 addressing both medical and adult-use cannabis, which concluded on July 15, 2026. The IRS has publicly indicated that, for Section 280E purposes, forthcoming guidance regarding the impact of rescheduling may include a transition rule allowing rescheduling relief to apply beginning with the taxable year that includes the effective date of the Final Order for activities no longer involving Schedule I or II substances; however, formal IRS guidance has not been issued yet. The ultimate impact of these developments, including the potential impact on previously recorded uncertain tax positions, remains uncertain and subject to ongoing evaluation due to the complexity of the evolving regulatory and tax environment. Accordingly, the Company is continuing to assess the potential financial statement impacts and is unable to reasonably estimate the ultimate effect at this time.

Previous wording

Amortization and depreciation includes the amortization of intangible assets. Amortization is calculated on a straight-line basis over the following terms:

Current wording

Amortization and depreciation includes the amortization of intangible assets and the depreciation of property and equipment, in each case to the extent not included in the cost of sales. Amortization is calculated on a straight-line basis over the following terms:

Previous wording

Derivative liabilities consist of convertible options, that contains embedded derivative features, that are remeasured to fair value at the end of each reporting period using the Black-Scholes Option Pricing Model (the "Black-Scholes Model"). A gain or loss is recognized as a result of the revaluation.

Current wording

Derivative liabilities consist of convertible options, that contain embedded derivative features, which are remeasured to fair value at the end of each reporting period using the Black-Scholes Option Pricing Model (the "Black-Scholes Model"). A gain or loss is recognized as a result of the revaluation.

Previous wording

EBITDA from continuing operations as net loss, adjusted to exclude provision for income taxes, finance expenses, depreciation and amortization, share-based compensation, unrealized and realized (gain) loss on investments, (gain) loss from revaluation of contingent consideration, unrealized and realized foreign exchange (gain) loss, gain on fair value of derivative liabilities, gain on lease terminations, and certain other items, which management believes is not reflective of the ongoing operations and performance of the Company. Such information is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP.

Current wording

Loss (gain) on fair value of derivative liabilities

Previous wording

Loss from discontinued operations for the three months ended March 31, 2026 primarily relates to disposal and exit activities, including costs associated with the disposition of certain assets and liabilities. In contrast, loss from discontinued operations for the three months ended March 31, 2025 primarily reflects operating losses incurred prior to the classification as discontinued operations.

Current wording

Income from discontinued operations for the three months ended June 30, 2026 primarily reflects the gain recognized in connection with the deconsolidation of the Michigan Receivership Entities following the appointment of the Receiver. In contrast, the loss from discontinued operations for the three months ended June 30, 2025 primarily reflects impairment charges and operating losses incurred prior to the classification of the Company's Michigan operations as discontinued operations.

Previous wording

The increase of $348 in general and administrative expense for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025, was primarily due to operational expenses related to the Ratio and Union acquisitions, slightly offset by a reduction in share-based compensation.

Current wording

The increase of $2,220 in general and administrative expense for the six months ended June 30, 2026 as compared to the six months ended June 30, 2025, was primarily due to operational expenses related to the Ratio Cannabis, LLC and Union Chill acquisitions and an increase in the provision for expected credit losses.

Previous wording

The increase of $992 in finance and other expenses for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025, was primarily due to an increase of interest and accretion related the FG Loan.

Current wording

The increase of $1,053 in finance and other expenses for the six months ended June 30, 2026 as compared to the six months ended June 30, 2025, was primarily due to an increase of interest and accretion related to the FG Loan.

Previous wording

The gain on derivative liabilities of $1,403 for the three months ended March 31, 2026 compared with a gain of $97 for the three months ended March 31, 2025, was primarily driven by the Company’s stock price remaining below the exercise price for the Private Placement Convertible Debentures as the conversion option approaches expiration this year.

Current wording

The gain on derivative liabilities of $232 for the six months ended June 30, 2026 compared with a gain of $376 for the six months ended June 30, 2025, was primarily driven by the decrease in fair value of private placement convertible debentures that expired during the second quarter of 2026.

Previous wording

The calculation of working capital provides additional information and is not defined under GAAP. The Company defines working capital as current assets less current liabilities. This measure should not be considered in isolation or as a substitute for any standardized measure under GAAP.

Current wording

The calculation of working capital provides additional information and is not defined under GAAP. The Company defines working capital as current assets less current liabilities. Management believes that working capital provides useful information to investors because it reflects the Company’s short-term financial health and its ability to meet current obligations with current assets. This measure should not be considered in isolation or as a substitute for any standardized measure under GAAP.

Previous wording

Management assesses the Company's liquidity in terms of its ability to generate cash to fund its operating, investing, and financing activities. The Company remains in a strong financial position, with resources available for reinvesting in existing businesses, conducting acquisitions, and managing its capital structure on a short and long-term basis. The Company believes its existing cash balances will be sufficient to meet its anticipated cash requirements from the date of this Annual Report through at least the next 12 months

Current wording

Management assesses the Company's liquidity in terms of its ability to generate cash to fund its operating, investing, and financing activities. The Company remains in a strong financial position, with resources available for reinvesting in existing businesses, conducting acquisitions, and managing its capital structure on a short and long-term basis. The Company believes its existing cash balances will be sufficient to meet its anticipated cash requirements from the date of this Quarterly Report on Form 10-Q through at least the next 12 months

Previous wording

Since its inception, the Company's primary sources of capital have been through the issuance of equity securities or debt facilities, and the Company has received aggregate net proceeds from such transactions totaling $861,332 as of March 31, 2026.

Current wording

Since its inception, the Company's primary sources of capital have been through the issuance of equity securities or debt facilities, and the Company has received aggregate net proceeds from such transactions totaling $880,299 as of June 30, 2026.

Previous wording

As of March 31, 2026, the Company had $219,950 in principal outstanding under its loans payable, excluding any prepayment or exit fees, of which $916 is due in the next twelve months. The Company also had $19,355 in principal outstanding under its convertible debt, of which $10,355 is due within the next twelve months. In addition, accrued interest in the aggregate amount of $2,406 related to the Company's convertible debt is due in the next twelve months.

Current wording

As of June 30, 2026, the Company had $209,682 in principal outstanding under its loans payable, excluding any prepayment or exit fees, of which $6,570 is due in the next twelve months. The Company also had $31,085 in principal outstanding under its convertible debt, none of which is due within the next twelve months.

Previous wording

The Company has entered into leases for certain premises and offices for which it owes monthly lease payments. The Company has $59,322 in lease obligations. Of this amount, $4,632 of lease payments are due in the next twelve months.

Current wording

The Company has entered into leases for certain premises and offices for which it owes monthly lease payments. The Company has $58,703 in lease obligations. Of this amount, $4,383 of lease payments are due in the next twelve months.

Previous wording

As of March 31, 2026, the Company had accounts payable and accrued liabilities of $39,979 and corporate income taxes payable of $4,075

Current wording

As of June 30, 2026, the Company had accounts payable and accrued liabilities of $40,133 and corporate income taxes payable of $2,290.

Previous wording

The Company is subject to a financial covenant as a result of its loan payable with its primary lender. The Company was in compliance with its debt covenant as of March 31, 2026. In the event that, in future periods, the Company’s financial results are below levels required to maintain compliance with it covenant, the Company will assess and undertake appropriate corrective initiatives with a view to allowing it to continue to comply with its covenant. Other than the covenant related to loans payable, the Company is not subject to externally imposed capital requirements.

Current wording

The Company is subject to a financial covenant as a result of its loan payable with its primary lender. The Company was in compliance with its debt covenant as of June 30, 2026. In the event that, in future periods, the Company’s financial results are below levels required to maintain compliance with its covenant, the Company will assess and undertake appropriate corrective initiatives with a view to allowing it to continue to comply with its covenant. Other than the covenant related to loans payable, the Company is not subject to externally imposed capital requirements.

Previous wording

On August 1, 2024, the Issuer and TerrAscend USA, Inc., as guarantors, and each of WDB Holding CA, Inc., WDB Holding PA, Inc., Moose Curve Holdings, LLC, Hempaid, LLC and pursuant to a joinder agreement dated September 30, 2024, WDB Holding MI, Inc., including certain of each of their respective subsidiaries, as borrowers (collectively, the “Borrowers”), and FG Agency Lending LLC, as the Administrative Agent (the "Agent") entered into a Loan Agreement (the “FG Loan”) for a four-year, $140,000 senior-secured term loan.

Current wording

On August 1, 2024, the Issuer and TerrAscend USA, Inc., as guarantors, and certain subsidiaries and affiliates of the Company, as borrowers (collectively, the “Borrowers”), and FG Agency Lending LLC, as the administrative agent for the lenders (the "Agent"), entered into a Loan Agreement (the “Initial FG Loan Agreement”) for a four-year, $140,000 senior-secured term loan.

Previous wording

On July 8, 2025, TerrAscend, TerrAscend USA, Inc., TerrAscend NJ LLC, TER Holding MD, Inc., and WDB Holding MD, Inc., including certain of each of their respective subsidiaries, and other borrowers, all of which are entities that are consolidated in the financial statements of the Company (the "Incremental Amendment Borrowers"), became parties to the FG Loan as borrowers pursuant to a joinder agreement (the "FG Loan Amendment") which provided for a $79,000 upsize to the existing FG Loan. Funds from the FG Loan and FG Loan Amendment were used to retire certain Company indebtedness, in addition to being used for future growth initiatives.

Current wording

On July 8, 2025, additional subsidiaries of the Company (the "Incremental Amendment Borrowers"), became parties to the Initial FG Loan Agreement as borrowers pursuant to a joinder agreement (the "FG Loan Amendment") and, together with the Initial FG Loan Agreement and such other amendments to the Initial FG Loan Agreement, the “FG Loan Agreement”), which provided for a $79,000 upsize to the Initial FG Loan Agreement, and following which TerrAscend USA, Inc. no longer served as guarantor. Funds received pursuant to the FG Loan Agreement were used to retire certain Company indebtedness, in addition to being used for future growth initiatives.

Previous wording

The FG Loan bears interest at 12.75% per annum with a maturity date of August 1, 2028 (the "FG Loan Maturity Date"). The FG Loan is guaranteed by the Issuer and TerrAscend USA, Inc. and is secured by substantially all of the assets of the Borrowers. Depending on the timing of repayment, an exit fee of between 2.0% and 4.0% of the FG Loan (the "Exit Fee") will be due upon either the prepayment, in part or in full, of the FG Loan or the FG Loan Maturity Date.

Current wording

The FG Loan bears interest at 12.75% per annum with a maturity date of August 1, 2028 (the "FG Loan Maturity Date"). The FG Loan is guaranteed by the Issuer and is secured by substantially all of the assets of the Borrowers and the Incremental Amendment Borrowers. Depending on the timing of repayment, an exit fee of between 2.0% and 4.0% of the FG Loan (the "Exit Fee") will be due upon either the prepayment, in part or in full, of the FG Loan or the FG Loan Maturity Date.

Previous wording

The FG Loan includes negative covenants that are usual for facilities and transactions of this type. The FG Loan contains covenants that limit the Borrowers’ ability to, among other things: (i) incur additional indebtedness or guarantee indebtedness; (ii) create liens; (iii) pay dividends; (iv) make investments; (v) enter into transactions with affiliates; and (vi) consolidate, merge, sell or otherwise dispose of all or substantially all of their respective assets. The FG Loan also includes a minimum liquidity covenant with respect to the Borrowers. If an event of default occurs and is not cured within an applicable grace period or waived, the principal amount, any accrued interest and any other obligations outstanding under the FG Loan may become immediately due and payable.

Current wording

The FG Loan Agreement contains covenants that limit the Borrowers’ and the Incremental Amendment Borrowers' ability to, among other things: (i) incur additional indebtedness or guarantee indebtedness; (ii) create liens; (iii) pay dividends; (iv) make investments; (v) enter into transactions with affiliates; and (vi) consolidate, merge, sell or otherwise dispose of all or substantially all of their respective assets. The FG Loan Agreement also includes a minimum liquidity covenant with respect to the Borrowers and the Incremental Amendment Borrowers. If an event of default occurs and is not cured within an applicable grace period or waived, the principal amount, any accrued interest and any other obligations outstanding under the FG Loan Agreement may become immediately due and payable.

Previous wording

The FG Loan also provides for an uncommitted term loan facility of up to $35,000 (the "Uncommitted Term Loan Facility"). The terms of the FG Loan Amendment and the Uncommitted Term Loan Facility are consistent with the initial FG Loan. As of March 31, 2026, the Company has drawn $3,105 of the Uncommitted Term Loan Facility with a remaining availability of $31,895.

Current wording

The FG Loan Agreement also provides for an uncommitted term loan facility of up to $35,000 (the "Uncommitted Term Loan Facility"). The terms of the Uncommitted Term Loan Facility are consistent with the FG Loan. As of June 30, 2026, the Company has drawn $3,105 of the Uncommitted Term Loan Facility with a remaining availability of $31,895.

Previous wording

In the first quarter of 2026, the Company made prepayments in aggregate of $5,500 on the FG Loan, including a 3% prepayment fee.

Current wording

During the six months ended June 30, 2026, the Company made aggregate prepayments of $15,590 on the FG Loan, including applicable 3% prepayment fees.

Previous wording

As part of the Ratio Acquisition, the Company entered into a promissory note bearing interest at 6.0% with a maturity date of May 7, 2027.

Current wording

In connection with the acquisition of the assets of Ratio Cannabis, LLC on May 7, 2025 ("Ratio") the Company entered into a promissory note with Ratio bearing interest at 6.0% with a maturity date of May 7, 2027.

Previous wording

In connection with the 2023 Reorganization (see Note 3), TerrAscend issued $1,000 of Class A shares with a 20% guaranteed annual dividend ("Class A Shares") to an investor (the “Investor”) pursuant to the terms of a subscription agreement between TerrAscend and the Investor dated April 20, 2023 (the “Subscription Agreement”). Pursuant to the terms of the Subscription Agreement, TerrAscend holds a call right to repurchase all of the Class A Shares issued to the Investor for an amount equal to the sum of: (a) the Repurchase/Put Price (as defined in the Subscription Agreement); plus (b) the amount equal to 40% of the subscription amount less the aggregate dividends paid to the Investor as of the date of the exercise of the repurchase right. In addition, the Investor holds a put right that is exercisable at any time after four months’ advanced written notice following June 28, 2028 to put all (and only all) of the Class A Shares owned by the Investor to TerrAscend at the Repurchase/Put Price, payable in cash or shares. The instrument is considered as a debt for accounting purposes due to the economic characteristics and risks.

Current wording

In connection with the 2023 Reorganization (see Note 3), TerrAscend issued $1,000 of Class A shares with a 20% guaranteed annual dividend ("Class A Shares") to an investor. TerrAscend holds a call right and the investor holds a put right (exercisable after June 28, 2028) with respect to the Class A Shares. The instrument is accounted for as debt. See Note 10 to the Consolidated Financial Statements for additional detail.

Previous wording

During the first quarter of 2026, the Company repurchased 115,000 common shares under the Share Repurchase Program for total consideration of $77. As of March 31, 2026, the Company had a total of 9,810,000 Common Shares remaining that can be authorized for repurchase.

Current wording

During the second quarter of 2026, the Company repurchased 463,500 common shares under the Share Repurchase Program for total consideration of $311. As of June 30, 2026, the Company had a total of 9,346,500 Common Shares remaining that can be authorized for repurchase.

Previous wording

The decrease of $2,526 in net cash provided by operating activities for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 was primarily driven by changes in net working capital, including increased inventory.

Current wording

The decrease of $2,442 in net cash provided by operating activities for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 was primarily driven by changes in net working capital, including increased inventory.

Previous wording

Net cash used in operating activities for the three months ended March 31, 2026 primarily relates to disposal and exit activities, including costs associated with the disposition of certain assets and liabilities. In contrast, net cash used in operating activities for the three months ended March 31, 2025 primarily reflects operating losses incurred prior to the classification as discontinued operations.

Current wording

Net cash used in operating activities for the six months ended June 30, 2026 primarily relates to costs associated with the disposition of certain assets and liabilities and entering into the Michigan Receivership. In contrast, net cash used in operating activities for the six months ended June 30, 2025 was primarily driven by unfavorable changes in working capital.

Previous wording

The decrease of $1,765 in net cash used in investing activities for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 was primarily driven by a decrease of investments in capital expenditures. The change was also attributable to cash consideration, net of cash acquired of $3,722 paid in connection with the Union Chill acquisition, and a $3,400 refund of the deposit for a potential business acquisition.

Current wording

The decrease of $7,364 in net cash used in investing activities for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 was primarily driven by a decrease of $2,146 for investments in capital expenditures. The change was also attributable to cash consideration, net of cash acquired of $3,722 paid in connection with the Union Chill acquisition, and a $3,400 refund of the deposit for a potential business acquisition.

Previous wording

The increase of $1,523 in net cash provided by investing activities for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 was primarily driven by the sale of property and equipment related to the continued exit of Michigan.

Current wording

The increase of $2,030 in net cash provided by (used in) investing activities for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 was primarily driven by the sale of property and equipment related to the exit of Michigan.

Previous wording

The net cash used in financing activities for the three months ended March 31, 2026 was primarily driven by the increase in net loan principal paid of $5,502 and exit fees of $165, and higher distributions to non-controlling interests during 2026.

Current wording

The increase of $8,550 in net cash used in financing activities for the six months ended June 30, 2026, compared to the six months ended June 30, 2025, was primarily attributable to higher loan principal paid, including exit fees, of $14,270, repayments of existing private placement convertible debentures of $8,630, and higher distributions to non-controlling interests during 2026. This was partially offset by $18,967 net of proceeds received from the issuance of the 2026 Private Placement Convertible Debentures. In contrast, financing activities during the prior-year period included $5,000 of loan proceeds, net of transaction costs.

Previous wording

The net cash used in financing activities for the three months ended March 31, 2026 was primarily driven by the finance lease termination fee paid.

Current wording

The net cash used in financing activities for the six months ended June 30, 2026 was primarily driven by the finance lease termination fee paid.

Previous wording

In addition to reporting the financial results in accordance with GAAP, the Company reports certain financial results that differ from what is reported under GAAP. Non-GAAP measures used by management do not have any standardized meaning prescribed by GAAP and may not be comparable to similar measures presented by other companies. The Company believes that certain investors and analysts use these measures to measure a company’s ability to meet other payment obligations or as a common measurement to value companies in the cannabis industry, and the Company calculates: (i) Free cash flow from net cash provided by operating activities from continuing operations less capital expenditures for property and equipment which management believes is an important measurement of the Company's ability to generate additional cash from its business operations, and (ii) EBITDA from continuing operations and Adjusted

Current wording

In addition to reporting the financial results in accordance with GAAP, the Company reports certain financial results that differ from what is reported under GAAP. Non-GAAP measures used by management do not have any standardized meaning prescribed by GAAP and may not be comparable to similar measures presented by other companies. The Company believes that certain investors and analysts use these measures to measure a company’s ability to meet other payment obligations or as a common measurement to value companies in the cannabis industry, and the Company calculates: (i) Free cash flow from net cash provided by operating activities from continuing operations less capital expenditures for property and equipment which management believes is an important measurement of the Company's ability to generate additional cash from its business operations, and (ii) EBITDA from continuing operations and Adjusted EBITDA from continuing operations as net loss, adjusted to exclude provision for income taxes, finance expenses, depreciation and amortization, share-based compensation, unrealized and realized (gain) loss on investments, (gain) loss from revaluation of contingent consideration, unrealized and realized foreign exchange (gain) loss, loss (gain) on fair value of derivative liabilities, (gain) loss on lease terminations, and certain other items, which management believes is not reflective of the ongoing operations and performance of the Company. Such information is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP.

Previous wording

The table below reconciles net loss to EBITDA from continuing operations and Adjusted EBITDA from continuing operations for the period ended March 31, 2026 and 2025:

Current wording

The table below reconciles net loss to EBITDA from continuing operations and Adjusted EBITDA from continuing operations for the three and six months ended June 30, 2026 and 2025:

Previous wording

Includes one-time fees incurred primarily in connection with the Company's acquisitions and other costs considered one-time in nature, such as expenses related to professional, consulting, legal, and accounting fees. These fees are not indicative of the Company's ongoing costs.

Current wording

Includes one-time items incurred primarily in connection with the Company's acquisitions and other costs considered one-time in nature, such as expenses related to professional, consulting, legal, and accounting fees. These fees are not indicative of the Company's ongoing costs.

Previous wording

Adjusted EBITDA from continuing operations decreased by $782 for the three months ended March 31, 2026 as compared to three months ended March 31, 2025 primarily driven by gross margin compression.

Current wording

Adjusted EBITDA from continuing operations increased by $1,773 and $991 for the three and six months ended June 30, 2026 as compared to three and six months ended June 30, 2025, respectively. These increases were primarily driven by gross profit margin expansion.

Previous wording

The table below reconciles net cash provided by operating activities from continuing operations to free cash flow for the period ended March 31, 2026 and 2025:

Current wording

The table below reconciles net cash provided by operating activities from continuing operations to free cash flow for the six months ended June 30, 2026 and 2025:

Previous wording

Additionally, as of June 30, 2025, the market value of the Common Shares held by non-affiliates decreased to below $60,000, which triggered the Company being classified as a smaller reporting company and non-accelerated filer with respect to SEC regulations and filing requirements effective December 31, 2025. The Company will remain a smaller reporting company until the last day of the fiscal year in which (i) the market value of our common stock held by non-affiliates exceeds $250,000 as of the last business day of our second fiscal quarter, or (ii) our annual revenue exceeded $100,000 during such completed fiscal year and the market value of our common stock held by non-affiliates exceeds $700,000 as of the last business day of our second fiscal quarter.

Current wording

Additionally, as of June 30, 2025, the market value of the Common Shares held by non-affiliates decreased to below $60,000, which triggered the Company being classified as a smaller reporting company and non-accelerated filer with respect to SEC regulations and filing requirements effective December 31, 2025. The Company will remain a smaller reporting company until the last day of the fiscal year in which (i) the market value of our Common Shares held by non-affiliates exceeds $250,000 as of the last business day of our second fiscal quarter, and (ii) either our annual revenue exceeded $100,000 during such completed fiscal year or the market value of our Common Shares held by non-affiliates exceeds $700,000 as of the last business day of our second fiscal quarter. As the market value of the Common Shares held by non-affiliates remained below $250,000 as of June 30, 2026, the Company will continue to qualify as a smaller reporting company.