Freshpet Inc

Previous wording

We started Freshpet with a single-minded mission to bring the power of real, fresh food to our dogs and cats. We were inspired by the rapidly growing view among pet owners that their dogs and cats are a part of their family, leading them to demand healthier pet food choices. Since Freshpet's inception in 2006, we have created a comprehensive business model to deliver wholesome pet food that pet parents can trust, and in the process we believe we have become one of the fastest growing pet food companies in North America. Our business model is difficult for others to replicate and we see significant opportunity for future growth by leveraging the unique elements of our business, including our brand, our product know-how, our Freshpet Kitchens, our refrigerated distribution, our Freshpet Fridges and our culture.

Current wording

Freshpet's mission is to elevate the way we feed our pets with fresh food that nourishes all. We were inspired by the rapidly growing view among pet owners that their dogs and cats are a part of their family, leading them to demand healthier pet food choices. Since Freshpet's inception in 2006, we have created a comprehensive business model to deliver wholesome pet food that pet parents can trust, and in the process, we believe we have become one of the fastest growing pet food companies in North America. Our business model is difficult for others to replicate and we see significant opportunity for future growth by leveraging the unique elements of our business, including our brand, our product know-how, our Freshpet Kitchens, our refrigerated distribution, our Freshpet Fridges and our culture.

Previous wording

Our net sales are derived from the sale of pet food products that are sold to retailers through broker and distributor arrangements. Our products are sold to consumers through a fast-growing network of company-owned branded refrigerators, known as Freshpet Fridges, located in our customers’ stores. We continue to roll out Freshpet Fridges at leading retailers across North America and parts of Europe and have installed Freshpet Fridges in approximately 27,838 retail stores as of September 30, 2024. Our products are sold under the Freshpet brand name with ingredients, packaging and labeling customized by class of retail. Sales are recorded net of discounts, returns and promotional allowances.

Current wording

Our net sales are derived from the sale of fresh pet food products to retailers, through direct sales and distributor arrangements. Our products are sold to consumers through a fast-growing network of company-owned branded refrigerators, known as Freshpet Fridges, located in our customers’ stores. We continue to roll out Freshpet Fridges at leading retailers across North America and parts of Europe and have installed Freshpet Fridges in approximately 28,521 retail stores as of March 31, 2025. Our products are sold under the Freshpet brand name with ingredients, packaging and labeling customized by class of retail. Sales are recorded net of discounts, returns and promotional allowances.

Previous wording

We had federal net operating loss (“NOL”) carry forwards of approximately $420.3 million as of December 31, 2023, of which approximately $175.4 million, generated in 2017 and prior, will expire between 2025 and 2037. The NOLs generated from 2018 through 2023, of approximately $244.9 million, will have an indefinite carryforward period but can generally only be used to offset 80% of taxable income in any particular year. We may be subject to certain limitations in our annual utilization of NOL carry forwards to off-set future taxable income pursuant to Section 382 of the Internal Revenue Code, which could result in NOLs expiring unused. At December 31, 2023, we had approximately $312.8 million of state NOLs, which expire between 2024 and 2043, and had $20.7 million of foreign NOLs in the United Kingdom which do not expire. At December 31, 2023, we had a full valuation allowance against our net deferred tax assets as the realization of such assets was not considered more likely than not.

Current wording

We had federal net operating loss (“NOL”) carry forwards of approximately $391.5 million as of December 31, 2024, of which, approximately $146.7 million, generated in 2017 and prior, will expire between 2028 and 2037. The NOLs generated from 2018 through 2023, of approximately $244.8 million, will have an indefinite carryforward period but, can generally only be used to offset 80% of taxable income in any particular year. We may be subject to certain limitations in our annual utilization of NOL carry forwards to off-set future taxable income pursuant to Section 382 of the Internal Revenue Code, which could result in NOLs expiring unused. At December 31, 2024, we had approximately $278.4 million of state NOLs, which expire between 2025 and 2046, and had $27.6 million of foreign NOLs in the United Kingdom which do not expire. At December 31, 2024, we had a full valuation allowance against our net deferred tax assets as the realization of such assets was not considered more likely than not.

Previous wording

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

Current wording

Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income

Previous wording

Net sales increased $52.7 million, or 26.3%, to $253.4 million for the three months ended September 30, 2024 as compared to $200.6 million in the same period in the prior year. The $52.7 million increase in net sales was driven by growth in the Grocery, Mass, International, and Digital channel of $41.1 million, with the remaining growth in the Pet Specialty and Club channel. The net sales increase was primarily driven by volume gains of 26.1%.

Current wording

Net sales increased $39.4 million, or 17.6%, to $263.2 million for the three months ended March 31, 2025 as compared to $223.8 million in the same period in the prior year. The $39.4 million increase in net sales was driven by growth in the Grocery, Mass, International, and Digital channel of $30.7 million, with the remaining growth in the Pet Specialty and Club channel. The net sales increase was primarily driven by volume gains of 14.9% and favorable price/mix of 2.7%.

Previous wording

Selling, general and administrative expenses ("SG&A") were $90.3 million for the three months ended September 30, 2024, compared to $73.4 million in the prior year period. As a percentage of net sales, SG&A decreased to 35.7% for the three months ended September 30, 2024, compared to 36.6% in the prior year period. The decrease of 90 basis points in SG&A as a percentage of net sales was mainly a result of reduced logistics costs as a percentage of net sales and the non-recurring charges in the prior year, offset by increased media as a percentage of net sales, higher share-based compensation and increased variable compensation accrual.

Current wording

Selling, general and administrative expenses ("SG&A") were $115.3 million for the three months ended March 31, 2025, compared to $79.7 million in the prior year period. As a percentage of net sales, SG&A increased to 43.8% for the three months ended March 31, 2025, compared to 35.6% in the prior year period. The increase in SG&A as a percentage of net sales was primarily due to increased media as a percentage of net sales, higher share-based compensation and non-recurring charges in the current period, including an accounts receivable write-off in connection with the liquidation of one of our pet specialty distributors, an accrual for legal obligations related to the ongoing litigation with Phillips, and termination costs due to a business change in our international go-to-market strategy, partially offset by reduced logistics as a percentage of net sales.

Previous wording

Adjusted SG&A for the three months ended September 30, 2024, was $74.2 million, or 29.3% as a percentage of net sales, compared to $57.4 million, or 28.6% as a percentage of net sales, in the prior year period.

Current wording

Adjusted SG&A for the three months ended March 31, 2025, was $84.7 million, or 32.2% as a percentage of net sales, compared to $70.9 million, or 31.7% as a percentage of net sales, in the prior year period. See “—Non-GAAP Financial Measures” below.

Previous wording

As a result of the factors discussed above, income from operations increased by $19.0 million to an income from operations of $11.9 million for the three months ended September 30, 2024 as compared to a loss from operations of $7.1 million for the same period in the prior year.

Current wording

As a result of the factors discussed above, income from operations decreased by $20.0 million to a loss from operations of $11.5 million for the three months ended March 31, 2025 as compared to an income from operations of $8.5 million for the prior year period.

Previous wording

The Company recorded interest and other income, net of $3.0 million for the three months ended September 30, 2024 as a result of interest income generated from cash and cash equivalents as compared to $4.1 million for the three months ended September 30, 2023.

Current wording

The Company recorded interest and other income, net of $2.4 million for the three months ended March 31, 2025 as a result of interest income generated from cash and cash equivalents as compared to $3.3 million for the three months ended March 31, 2024.

Previous wording

Interest expense decreased $1.2 million to $2.9 million for the three months ended September 30, 2024 as compared to $4.1 million for the same period in the prior year. The decrease was primarily driven by a $1.2 million decrease in interest expense on our Convertible Notes due to an increase in capitalized interest compared to prior period.

Current wording

Interest expense increased $0.4 million to $3.5 million for the three months ended March 31, 2025 as compared to $3.1 million for the same period in the prior year. The increase was primarily driven by a $0.4 million increase in interest expense on our Convertible Notes due to a decrease in capitalized interest compared to prior year period as a result of assets placed into service.

Previous wording

Net income increased $19.1 million to $11.9 million for the three months ended September 30, 2024, as compared to a net loss of $7.2 million for the same period in the prior year due to contribution from higher sales, improved gross margin, and reduced logistics costs as a percentage of net sales, partially offset by increased SG&A expenses.

Current wording

Net income decreased $31.3 million to a net loss of $12.7 million for the three months ended March 31, 2025, as compared to a net income of $18.6 million for the same period in the prior year due to increased SG&A expenses, including increased media spend of $7.7 million and non-recurring charges of $16.9 million, which was partially offset by contributions from higher sales and reduced logistics costs as a percentage of net sales.

Previous wording

Adjusted EBITDA was $43.5 million for the three months ended September 30, 2024, compared to $23.2 million in the prior year period. The increase in Adjusted EBITDA was a result of increased Adjusted Gross Profit, partially offset by higher Adjusted SG&A expenses.

Current wording

Adjusted EBITDA was $35.5 million for the three months ended March 31, 2025, compared to $30.6 million in the prior year period. The increase in Adjusted EBITDA was a result of increased Adjusted Gross Profit, partially offset by higher Adjusted SG&A expenses. See “—Non-GAAP Financial Measures” below.

Previous wording

•Adjusted EBITDA as a percentage of net sales

Current wording

•Adjusted EBITDA as a percentage of net sales (Adjusted EBITDA Margin)

Previous wording

Such financial measures are not financial measures prepared in accordance with U.S. GAAP. We define Adjusted Gross Profit as Gross Profit before depreciation expense, non-cash share-based compensation, and loss on disposal of manufacturing equipment. We define Adjusted SG&A as SG&A expenses before depreciation and amortization expense, non-cash share-based compensation, implementation and other costs associated with the implementation of an ERP system, fees related to the Capped Call Transactions, loss on disposal of equipment, and advisory fees related to shareholder activism defense engagement. EBITDA represents net income (loss) plus interest expense net of interest income, income tax expense and depreciation and amortization expense. Adjusted EBITDA represents EBITDA plus loss on equity method investment, gain on equity investment, non-cash share-based compensation expense, implementation and other costs associated with the implementation of an ERP system, loss on disposal of property, plant and equipment, fees related to the Capped Call Transactions, and advisory fees related to activism engagement.

Current wording

Such financial measures are not financial measures prepared in accordance with U.S. GAAP. We define Adjusted Gross Profit as Gross Profit before depreciation expense, non-cash share-based compensation, and loss on disposal of manufacturing equipment. We define Adjusted SG&A as SG&A expenses before depreciation and amortization expense, non-cash share-based compensation, loss on disposal of equipment, distributor transition costs, legal obligation and international business changes. EBITDA represents net (loss) income plus interest expense net of interest income, income tax expense and depreciation and amortization expense. Adjusted EBITDA represents EBITDA less gain on equity investment, plus non-cash share-based compensation expense, loss on disposal of property, plant and equipment, distributor transition costs, legal obligation, and international business changes.

Previous wording

The following table provides a reconciliation of EBITDA and Adjusted EBITDA to net income (loss), the most directly comparable financial measure presented in accordance with U.S. GAAP:

Current wording

The following table provides a reconciliation of EBITDA and Adjusted EBITDA to net (loss) income, the most directly comparable financial measure presented in accordance with U.S. GAAP:

Previous wording

(a)Includes true-ups to share-based compensation expense compared to prior periods. We have certain outstanding share-based awards with performance-based vesting conditions that require the achievement of certain Adjusted EBITDA and/or Net Sales targets as a condition of vesting. At each reporting period, we reassess the probability of achieving the performance criteria and the performance period required to meet those targets. When the probability of achieving such performance conditions changes, the compensation cost previously recorded is adjusted as needed. When such performance conditions are deemed to be improbable of achievement, the compensation cost previously recorded is reversed.

Current wording

(a)Includes true-ups to share-based compensation expense in prior period. We have certain outstanding share-based awards with performance-based vesting conditions that require the achievement of certain Adjusted EBITDA margins, Adjusted EBITDA and/or Net Sales targets as a condition of vesting. At each reporting period, we reassess the probability of achieving the performance criteria and the performance period required to meet those targets. When the probability of achieving such performance conditions changes, the compensation cost previously recorded is adjusted as needed. When such performance conditions are deemed to be improbable of achievement, the compensation cost previously recorded is reversed.

Previous wording

(a)Includes true-ups to share-based compensation expense compared to prior periods. We have certain outstanding share-based awards with performance-based vesting conditions that require the achievement of certain Adjusted EBITDA and/or Net Sales targets as a condition of vesting. At each reporting period, we reassess the probability of achieving the performance criteria and the performance period required to meet those targets. When the probability of achieving such performance conditions changes, the compensation cost previously recorded is adjusted as needed. When such performance conditions are deemed to be improbable of achievement, the compensation cost previously recorded is reversed.

Current wording

(a)Includes true-ups to share-based compensation expense in prior period. We have certain outstanding share-based awards with performance-based vesting conditions that require the achievement of certain Adjusted EBITDA margins, Adjusted EBITDA and/or Net Sales targets as a condition of vesting. At each reporting period, we reassess the probability of achieving the performance criteria and the performance period required to meet those targets. When the probability of achieving such performance conditions changes, the compensation cost previously recorded is adjusted as needed. When such performance conditions are deemed to be improbable of achievement, the compensation cost previously recorded is reversed.

Previous wording

To meet our capital needs, we issued approximately $402.5 million in convertible notes in March 2023 (the “Convertible Notes”), used $66.2 million of the proceeds to enter into capped call transactions, and used $11.0 million of the proceeds on debt issuance related costs. Further, on March 13, 2023, in connection with the proposed offering of the Convertible Notes, the Company notified City National Bank of Freshpet's intent to terminate the Credit Agreement, and such termination became effective as of March 15, 2023 (the "Termination Date"). The Company had no borrowings outstanding under the Credit Agreement as of the Termination Date.

Current wording

To meet our capital needs, we issued approximately $402.5 million in convertible notes in March 2023 (the “Convertible Notes”), used $66.2 million of the proceeds to enter into capped call transactions, and used $11.0 million of the proceeds on debt issuance related costs.

Previous wording

We expect to make future capital expenditures in connection with the completion of our planned development of Freshpet Kitchens Ennis Phase 2 and 3. During the nine months ended September 30, 2024, we spent approximately $128.8 million of capital to meet our capacity needs as well as recurring capital expenditures. We expect to spend an additional $51.2 million in the remainder of fiscal 2024.

Current wording

We expect to make future capital expenditures in connection with the completion of our planned development of Freshpet Kitchens Ennis Phase 2 and 3. During the three months ended March 31, 2025, we spent approximately $26.5 million of capital to meet our capacity needs as well as recurring capital expenditures. We expect to spend an additional $223.5 million in the remainder of fiscal year 2025.

Previous wording

Our primary cash needs, in addition to our plant expansions, are for purchasing ingredients, operating expenses, marketing expenses and capital expenditures to procure Freshpet Fridges. We believe that cash and cash equivalents, expected cash flow from operations, amounts previously raised through the issuance of the Convertible Notes and our ability to access the capital markets, if appropriate, are adequate to fund our debt service requirements, operating and finance lease obligations, capital expenditures and working capital obligations for the foreseeable future. We believe our sources of liquidity and capital will be sufficient to finance our continued operations, growth strategy and additional expenses we expect to incur for at least the next twelve months. However, our ability to continue to meet these requirements and obligations will depend on, among other things, our ability to achieve anticipated levels of revenue and cash flow from operations and our ability to manage costs and working capital successfully. Additionally, our cash flow generation ability is subject to general economic factors, including but not limited to increasing interest rates and inflation, financial, competitive, legislative and regulatory factors and other factors that are beyond our control. We cannot assure you that our business will generate cash flow from operations in an amount sufficient to enable us to fund our liquidity needs. Expanding certain of our Freshpet Kitchens primarily comprises our material future cash requirement. However, our capital requirements, including our cash requirements, may vary materially from those currently planned if, for example, our revenues do not reach expected levels, or we have to incur unforeseen capital expenditures and make investments to maintain our competitive position. If this is the case, we may seek alternative financing, such as issuing additional debt or equity securities, and we cannot assure you that we will be able to do so on favorable terms, if at all. Moreover, if we issue new debt securities, the debt holders would have rights senior to common stockholders to make claims on our assets, and the terms of any debt could restrict our operations, including our ability to pay dividends on our common stock. If we issue additional equity or if the Convertible Notes are converted to common shares, existing stockholders may experience dilution, and such new securities could have rights senior to those of our common stock. These factors may make the timing, amount, terms and conditions of additional financing unattractive. Our inability to raise capital could impede our growth or otherwise require us to forego growth opportunities and could materially adversely affect our business, financial condition and results of operations.

Current wording

Expanding certain of our Freshpet Kitchens primarily comprises our material future cash requirement. However, our capital requirements, including our cash requirements, may vary materially from those currently planned if, for example, our revenues do not reach expected levels, or we have to incur unforeseen capital expenditures and make investments to maintain our competitive position. If this is the case, we may seek alternative financing, such as issuing additional debt or equity securities, and we cannot assure you that we will be able to do so on favorable terms, if at all. Moreover, if we issue new debt securities, the debt holders would have rights senior to common stockholders to make claims on our assets, and the terms of any debt could restrict our operations, including our ability to pay dividends on our common stock. If we issue additional equity or if the Convertible Notes are converted to common shares, existing stockholders may experience dilution, and such new securities could have rights senior to those of our common stock. These factors may make the timing, amount, terms and conditions of additional financing unattractive. Our inability to raise capital could impede our growth or otherwise require us to forego growth opportunities and could materially adversely affect our business, financial condition and results of operations.

Previous wording

Working capital consists of current assets net of current liabilities. Working capital decreased $6.0 million to $332.1 million as of September 30, 2024 compared with working capital of $338.1 million as of December 31, 2023. The decrease was primarily a result of a decrease of $22.3 million in cash and cash equivalents, a decrease of $1.8 million in prepaid expenses, and an increase in accrued expenses of $0.6 million due to timing. The decrease was partially offset by an increase of $8.3 million in accounts receivable, an increase of $9.6 million in inventories, net, and a decrease of $0.6 in accounts payable as a result of timing.

Current wording

Working capital consists of current assets net of current liabilities. Working capital decreased $15.3 million to $322.8 million as of March 31, 2025 compared with working capital of $338.1 million as of December 31, 2024. The decrease was primarily a result of a decrease of $24.9 million in cash and cash equivalents, a decrease of $5.8 million in accounts receivable, a decrease of $2.1 million in prepaid expenses and an increase of $3.6 million in accounts payable as a result of timing. The decrease was partially offset by an increase of $1.2 million in inventories, net. and a decrease of $20.0 million in accrued expenses due to timing.

Previous wording

We normally carry three to four weeks of finished goods inventory and less than 30 days of accounts receivable.

Current wording

We normally carry three to five weeks of finished goods inventory and less than 30 days of accounts receivable.

Previous wording

As of September 30, 2024, our capital resources consisted primarily of $274.6 million of cash and cash equivalents on hand.

Current wording

As of March 31, 2025, our capital resources consisted primarily of $243.7 million of cash and cash equivalents on hand.

Previous wording

As of December 31, 2023, our capital resources consisted primarily of $296.9 million of cash and cash equivalents on hand.

Current wording

As of December 31, 2024, our capital resources consisted primarily of $268.6 million of cash and cash equivalents on hand.

Previous wording

Net cash provided by operating activities consists primarily of net income (loss) adjusted for certain non-cash items (i.e., provision for loss on accounts receivable, loss on disposal of property, plant and equipment, share-based compensation, change in reserve for inventory obsolescence, depreciation and amortization, write-off and amortization of deferred financing costs and loan discount, change in operating lease right of use asset, loss on equity method investment, and gain on equity investment).

Current wording

Net cash provided by operating activities consists primarily of net (loss) income adjusted for certain non-cash items (i.e., provision for loss on accounts receivable, loss on disposal of property, plant and equipment, share-based compensation, change in reserve for inventory obsolescence, depreciation and amortization, amortization of deferred financing costs, change in operating lease right of use asset, and gain on equity investment).

Previous wording

•$28.8 million of net income, adjusted for reconciling non-cash items, which excludes $77.7 million of non-cash items related to $45.4 million of depreciation and amortization, $25.0 million of share-based compensation including amortization of warrants, $3.5 million of write-off and amortization of deferred financing costs and loan discount, $1.9 million of loss on investments in equity method investment, $1.2 million of change in operating lease right of use asset and $0.7 million of loss on disposal of property, plant and equipment.

Current wording

•$31.0 million of net income, adjusted for reconciling non-cash items, which excludes $43.7 million of non-cash items related to $21.8 million of depreciation and amortization, $11.5 of provision for loss on accounts receivable, $8.8 million of share-based compensation, $0.5 million of amortization of deferred financing costs, $0.7 million of loss on disposal of property, plant and equipment, and $0.3 million of change in operating lease right of use asset.

Previous wording

•$10.2 million increase due to changes in operating assets and liabilities. The increase was primarily due to the change in accrued expenses, accounts receivable, and accounts payable, primarily offset by the change in other assets, operating lease liability, inventories, and prepaid expenses and other current assets,

Current wording

•$26.2 million decrease due to changes in operating assets and liabilities. The decrease was primarily due to the change in accrued expenses, accounts receivable, inventories, and other assets, partially offset by the change in accounts payable and prepaid expenses and other current assets.

Previous wording

•$113.4 million of net income, adjusted for reconciling non-cash items, which excludes $84.6 million of non-cash items related to $52.2 million of depreciation and amortization, $37.9 million of share-based compensation including amortization of warrants, $1.6 million of write-off and amortization of deferred financing costs and loan discount, $1.1 million of loss on disposal of property, plant and equipment, $0.7 million of a reserve for inventory obsolescence, $1.0 million of change in operating lease right of use asset, partially offset by $9.9 million of gain on equity investment.

Current wording

•$32.6 million of net income, adjusted for reconciling non-cash items, which excludes $14.0 million of non-cash items related to $15.9 million of depreciation and amortization, $6.2 million of share-based compensation including amortization of warrants, $0.7 million of reserve for inventory obsolescence, $0.5 million of amortization of deferred financing costs, $0.4 million of change in operating lease right of use asset and $0.2 million of loss on disposal of property, plant and equipment, partially offset by $9.9 million of gain on equity investment

Previous wording

•$9.5 million decrease due to changes in operating assets and liabilities. The decrease was primarily due to the change in inventories, accounts receivable, other assets, operating lease liability, and prepaid expenses and other current assets, , partially offset by the change in accounts payable and accrued expenses.

Current wording

•$27.2 million decrease due to changes in operating assets and liabilities. The decrease was primarily due to the change in accrued expenses, accounts receivable, inventories, other assets, and operating lease liability, primarily offset by the change in accounts payable and prepaid expenses and other current assets.

Previous wording

•$128.8 million of capital expenditures related to Freshpet Kitchens, plant recurring capital expenditures, expenditures relating to investment in fridges, and other capital spend.

Current wording

•$26.5 million of capital expenditures related to Freshpet Kitchens, plant recurring capital expenditures, expenditures relating to investment in fridges, and other capital spend.

Previous wording

•$161.6 million of capital expenditures related to Freshpet Kitchens, plant recurring capital expenditures, expenditures relating to investment in fridges, and other capital spend.

Current wording

•$46.5 million of capital expenditures related to Freshpet Kitchens, plant recurring capital expenditures, expenditures relating to investment in fridges, and other capital spend.

Previous wording

•$1.4 million for tax withholdings related to net share settlements of restricted stock units

Current wording

•$2.9 million for tax withholdings related to net share settlements of restricted stock units; and

Previous wording

•$5.5 million cash proceeds from the exercise of stock options.

Current wording

•$0.2 million cash proceeds from the exercise of stock options.

Previous wording

•$4.2 million cash proceeds from the exercise of stock options.

Current wording

•$2.8 million cash proceeds from the exercise of stock options.

Previous wording

•$0.9 million for tax withholdings related to net share settlements of restricted stock units.

Current wording

•$0.2 million for tax withholdings related to net share settlements of restricted stock units; and

Previous wording

•$1.4 million for principal payments under finance lease obligations.

Current wording

•$0.5 million for principal payments under finance lease obligations.

Previous wording

For a discussion of our material indebtedness, see Notes 5 and 6 to our (unaudited) condensed consolidated financial statements included in this report.

Current wording

For a discussion of our material indebtedness, see Note 5 to our (unaudited) condensed consolidated financial statements included in this report.

Previous wording

There were no material changes to our commitments under contractual obligations, as disclosed in our Annual Report, except as noted in Note 8 - Leases and Note 13 - Commitments and Contingencies of our (unaudited) condensed consolidated financial statements.

Current wording

There were no material changes to our commitments under contractual obligations, as disclosed in our Annual Report, except as noted in Note 7 - Leases and Note 11 - Commitments and Contingencies to our (unaudited) condensed consolidated financial statements.