ULTRALIFE CORP

Evaluation of Disclosure Controls and Procedures – Disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) are designed to provide reasonable assurance that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to management, including the principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosures.

Management, under the supervision and with the participation of our President & Chief Executive Officer (principal executive officer) and our Chief Financial Officer & Treasurer (principal financial officer), has evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this annual report. Management has concluded that our disclosure control and procedures were not effective as of December 31, 2025, as a result of a material weakness in our internal control over financial reporting, as described below.

Notwithstanding the material weakness identified, management believes that the Consolidated Financial Statements included in this Annual Report on Form 10-K present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024 and the consolidated results of operations and cash flows for each of the years then ended in conformity with U.S. generally accepted accounting principles

Management’s Report on Internal Control Over Financial Reporting – Management, under the supervision and with the participation of our President & Chief Executive Officer and Chief Financial Officer & Treasurer, is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Management conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2025, using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control - Integrated Framework (2013). Based on our evaluation, we have concluded that there is a material weakness in our internal control over financial reporting. As a result of the material weakness identified, management has concluded that our internal control over financial reporting was not effective as of December 31, 2025.

A material weakness has been identified because remediation efforts initiated during the year ended December 31, 2025 relating to the material weakness identified during the year ended December 31, 2024 attributable to the need for additional personnel to provide a full complement of accounting and reporting expertise have not been in place and adequately documented for a sufficient period of time to allow management to conclude that the related controls are operating effectively. In addition, information technology general controls (ITGC) were not operating effectively to ensure that (i) access to applications and data, including the ability to make changes, was appropriately restricted to authorized personnel, and (ii) the activities of individuals with such access were adequately monitored. As a result, business process controls (automated and manual) that are dependent on the affected ITGCs were also deemed ineffective because they could have been adversely impacted.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company's annual or interim financial statements will not be prevented or detected on a timely basis.

The effectiveness of our internal control over financial reporting as of December 31, 2025 has been audited by WithumSmith+Brown, PC, our independent registered public accounting firm, as stated in their report included in Part II, Item 8 of this Annual Report on Form 10-K.

Remediation Efforts to Address the Material Weakness – As previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024, management identified a material weakness in internal control over financial reporting attributable to the need for additional personnel to provide a full complement of accounting and reporting expertise commensurate with the growth of the Company both organically and through acquisitions.

Over the course of 2025, management implemented a remediation plan designed to address the previously identified material weakness. The Company significantly strengthened its finance and accounting team by adding a new oversight role and hiring additional highly experienced personnel including certified public accountants. The personnel actions taken include the naming of a Chief Accounting Officer with a backfill to the Corporate Controller role and filling the following positions: Director – Internal Audit & Sox Compliance, Manager – Corporate Accounting, Manager – Corporate Reporting & Consolidations, and Controller – Electrochem. Significant improvements in the design, execution and documentation of business process controls were implemented across our locations as part of our remediation plan during the second half of 2025 once the additional oversight was in place and the additional personnel were hired; however, all remedial actions were not in place and adequately documented for a sufficient period of time to allow management to conclude that controls were effective. It was also concluded that information technology general controls (ITGC) were not operating effectively to ensure that (i) access to applications and data, including the ability to make changes, was appropriately restricted, and (ii) the activities of individuals with such access were adequately monitored. Management has developed and is actively implementing corrective actions to remediate the identified ITGC deficiencies. As of the date of this Annual Report on Form 10-K, a comprehensive evaluation of all access rights of all users of our IT applications is being conducted to identify where access is not appropriately restricted. Access will be restricted to the extent possible, and mitigating controls will be implemented to address instances, if any, where system-level segregation may not be feasible due to personnel constraints or otherwise. Additionally, we will formalize our policies and procedures regarding user access reviews to require that they are performed on a more frequent and timely basis.

Remediation will be deemed complete once all corrective actions are fully implemented and in place for a sufficient period of time and further evaluation is performed, including testing, to conclude that our internal control over financial reporting is effective.

Changes in Internal Controls Over Financial Reporting – Other than the remedial actions described above, there were no changes in our internal control over financial reporting during the fourth quarter of the fiscal year covered by this report that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations of Effectiveness of Controls – Management, including our Chief Executive Officer and Chief Financial Officer, does not expect that the Company’s disclosure controls and procedures or its internal control over financial reporting will prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that its objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Furthermore, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons or by the collusion of two or more persons. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of the effectiveness of controls to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures