ENERGY FOCUS, INC/DE

Previous wording

Our mission is to enable our customers to run their facilities with greater energy efficiency, productivity, and human health and wellness through advanced LED retrofit solutions. Our goal is to be a market leader for the most demanding applications where performance, quality, value, environmental impact and health are considered paramount. We specialize in energy efficient LED lighting retrofit product, replacing fluorescent, high-intensity discharge lighting and other types of lamps in institutional buildings for primarily indoor lighting applications with our innovative, high-quality commercial and military-grade tubular LED (“TLED”) products, as well as other LED and lighting control products for commercial and consumer applications. In addition to our lighting products, we also offer UPS systems and other power management solutions. We are also evaluating additional adjacent technologies, including Gallium Nitride (“GaN”) based power supplies and other energy solution products that support sustainability in our existing channels.

Current wording

Our mission is to enable our customers to run their facilities with greater energy efficiency, productivity, and human health and wellness through advanced LED retrofit solutions. Our goal is to be a market leader for the most demanding applications where performance, quality, value, environmental impact and health are considered paramount. We specialize in energy efficient LED lighting retrofit product, replacing fluorescent, high-intensity discharge lighting and other types of lamps in institutional buildings for primarily indoor lighting applications with our innovative, high-quality commercial and military-grade tubular LED (“TLED”) products, as well as other LED and lighting control products for commercial and consumer applications. We are also evaluating additional adjacent technologies, including Gallium Nitride (“GaN”) based power supplies and other energy solution products that support sustainability in our existing channels.

Previous wording

In addition to continuously pursuing cost reductions, our strategy to combat these trends is to innovate both our technology and product offerings with differentiated products and solutions that offer greater, distinct value. Specific examples of these products we have developed include the RedCap®, our patented emergency backup battery integrated TLED, as well as our robust MMM product offering. The Company has enhanced the performance of our RedCap® product providing a more user- friendly experience. We continue to evaluate our sales strategy and believe our go-to-market strategy that focuses more on direct-sales marketing, selectively expanding our channel partner network to cover territories across the country, and listening to the voice of the customer will lead to better and more impactful product development efforts that we believe will eventually translate into larger addressable markets and greater sales growth.

Current wording

In addition to continuously pursuing cost reductions, our strategy to combat these trends is to innovate both our technology and product offerings with differentiated products and solutions that offer greater, distinct value. Specific examples of these products we have developed include the RedCap®, our patented emergency backup battery integrated TLED, as well as our robust MMM product offering. The Company has enhanced the performance of our RedCap® product by providing a more user friendly experience. We continue to evaluate our sales strategy and believe our go-to-market strategy that focuses more on direct-sales marketing, selectively expanding our channel partner network to cover territories across the country, and listening to the voice of the customer will lead to better and more impactful product development efforts that we believe will eventually translate into larger addressable markets and greater sales growth.

Previous wording

We have taken steps to strengthen our financial structure through capital increases and cost reduction measures. As a result, we have fully eliminated all external high-interest debt, which we believe has improved our financial position. Our business expansion plans are supported by financial strategies that we expect will provide funding for our planned growth initiatives, although there can be no assurance that such funding will be adequate. During 2024, our MMM business faced ongoing challenges due to delays in government funding and the timing of U.S. Navy awards. Several anticipated projects encountered repeated postponements, further complicated by the long sales cycles typical in this sector. The timeline from bid submission to order placement often exceeds six months, and many MMM products are build-to-order, resulting in extended lead times before revenue recognition. To mitigate this volatility, we continue to actively pursue new opportunities with the U.S. Navy and other government sectors. We have undertaken efforts to reduce costs, which we believe have contributed to our competitiveness, and may have helped us secure new contracts and expand our sales pipeline in the first half of 2025.

Current wording

We have taken steps to strengthen our financial structure through capital increases and cost reduction measures. As a result, we have fully eliminated all external high-interest debt, which we believe has improved our financial position. Our business expansion plans are supported by financial strategies that we expect will provide funding for our planned growth initiatives, although there can be no assurance that such funding will be adequate. During 2024, our MMM business faced ongoing challenges due to delays in government funding and the timing of U.S. Navy awards. Several anticipated projects encountered repeated postponements, In addition, we face challenges from long sales cycles, which is typical in this sector. The timeline from bid submission to order placement often exceeds six months, and many MMM products are build-to-order, resulting in extended lead times before revenue recognition. To mitigate this volatility, we continue to actively pursue new opportunities with the U.S. Navy and other government sectors. We have undertaken efforts to reduce costs, which we believe have contributed to our competitiveness, and may have helped us secure new contracts and expand our sales pipeline in the remainder of 2025 and beyond.

Previous wording

We are actively expanding our commercial product offerings, including our newly introduced UPS systems for data centers. We also continue to develop the development of additional product lines such as Energy Storage Systems (“ESS”) and GaN based power supplies, while leveraging the stability and opportunities within our MMM business. In 2024, we conducted a comprehensive review of our commercial pricing strategy and reassessed key partnerships within the energy-related market. These strategic adjustments have improved our market position, offering a more competitive pricing structure and a stronger value proposition for our customers. We believe that these initiatives, if successfully implemented, and if our financial position continues to improve, may contribute to growth across both our MMM and commercial business sectors, although there can be no assurance that such growth will occur.

Current wording

We are actively expanding our commercial product offerings, including our newly introduced UPS systems for data centers. We also continue to advance the expansion of product lines such as Energy Storage Systems (“ESS”) and GaN based power supplies, while leveraging the stability and opportunities within our MMM business. In 2024, we conducted a comprehensive review of our commercial pricing strategy and reassessed key partnerships within the energy-related market. These strategic adjustments have improved our market position, offering a more competitive pricing structure and a stronger value proposition for our customers. We believe that these initiatives, if successfully implemented, and if our financial position continues to improve, may contribute to growth across both our MMM and commercial business sectors, although there can be no assurance that such growth will occur.

Previous wording

Despite continuing progress on cost reduction throughout 2024 and 2025, the Company’s results reflect the challenges due to long and unpredictable sales cycles, unexpected delays in MMM and commercial customer retrofit budgets and project starts, and supply chain issues. There has also been continuing aggressive price competition in the lighting industry. We continue to incur losses and have a substantial accumulated deficit, which continues to raise substantial doubt about our ability to continue as a going concern at June 30, 2025.

Current wording

Despite continuing progress on cost reduction throughout 2024 and 2025, the Company’s results reflect the challenges due to long and unpredictable sales cycles, unexpected delays in MMM and commercial customer retrofit budgets and project starts, and supply chain issues. There has also been continuing aggressive price competition in the lighting industry. We continue to incur losses and we have a substantial accumulated deficit, which continues to raise substantial doubt about our ability to continue as a going concern at September 30, 2025.

Previous wording

Net sales of $1.1 million for the second quarter of 2025 decreased $0.4 million, or 26%, compared to second quarter of 2024 net sales of $1.6 million, driven by a 71% decrease in MMM sales , partially offset by a 118% increase in commercial sales. The net sales decrease of MMM products sales in the second quarter was primarily due to a significant reduction in military demand, driven by ongoing federal budget uncertainties and delays in new defense contract activity. The increase in commercial sales was primarily driven by a high-dollar UPS project delivered to a new customer in Taiwan.

Current wording

Net sales of $0.8 million for the third quarter of 2025 decreased $0.4 million, or 31%, compared to third quarter of 2024 net sales of $1.2 million, primarily driven by a 27% decrease in MMM sales and a 42% decrease in commercial sales. The net sales decrease of MMM products sales in the third quarter was primarily due to a significant reduction in military demand, driven by ongoing federal budget uncertainties. The decrease in commercial sales was primarily driven by the effects of weakened economy and high inflation, which reflected the weakened market demand and the market trend of fluctuations.

Previous wording

Net sales of $1.8 million for the first six months of 2025 decreased $0.6 million, or 26%, compared to the same period in 2024, primarily driven by a 56% decrease in MMM sales, partially offset by a 49% increase in commercial sales. The net sales increase for the first six months of 2025 was primarily due to a significant reduction in military demand, driven by ongoing federal budget uncertainties and delays in new defense contract activity.

Current wording

Net sales of $2.6 million for the first nine months of 2025 decreased $1.0 million, or 28%, compared to the same period in 2024, primarily driven by a 46% decrease in MMM sales, partially offset by a 17% increase in commercial sales. The net sales decrease for the first nine months of 2025 was primarily due to a significant reduction in military demand, driven by ongoing federal budget uncertainties.

Previous wording

Gross profit was $0.1 million, representing 13% of net sales, for the second quarter of 2025. This compares with gross profit of $0.1 million, or 8% of net sales, in the second quarter of 2024. The period-over-period increase in gross profit was driven mainly by a decrease in fixed costs, such as rent expense for production and reduced use of temporary outside labor.

Current wording

Gross profit was $0.1 million, representing 18% of net sales, for the third quarter of 2025. This compares with gross profit of $0.2 million, or 16% of net sales, in the third quarter of 2024. The period-over-period change in gross profit was driven mainly by a more favorable product mix, partially offset by higher tariff charges on imported goods, resulting in a slight decrease in gross profit dollars while improving gross margin.

Previous wording

Gross profit was $0.3 million, representing 19% of net sales, for the first six months of 2025 compared to $0.2 million, or 10% of net sales, for the first six months of 2024. The year-over-year increase in gross profit was driven mainly by a decrease in fixed costs such as subscription fee and rent expense for production and reduced use of temporary outside labor.

Current wording

Gross profit was $0.5 million, representing 19% of net sales, for the first nine months of 2025 compared to $0.4 million, or 12% of net sales, for the first nine months of 2024. The year-over-year improvement in gross profit was driven mainly by a reduced use of temporary outside labor and decrease in fixed costs such as subscription fee and rent expense for production.

Previous wording

Product development expenses include salaries and related benefits, testing and related costs, travel, supplies, as well as overhead items, such as depreciation and facility costs. Product development costs are expensed as they are incurred.

Current wording

Product development expenses include salaries and related benefit, testing and related cost, travel expenses, cost of supplies, as well as overhead items, such as depreciation and facility costs. Product development costs are expensed as they are incurred.

Previous wording

Product development expenses were $0.1 million for the second quarter of 2025, down 47% from the second quarter of 2024. The $0.1 million decrease is primarily resulted from lower payroll-related expenses due to reduction in the headcount and product testing fees.

Current wording

Product development expenses were $0.1 million for the third quarter of 2025, down 40% from the third quarter of 2024. The $0.1 million decrease is primarily due to lower payroll-related expenses resulting from structure optimization, as well as lower product testing and R&D supplies expenses.

Previous wording

Product development expenses were $0.1 million for the first six months of 2025, a $0.1 million decrease compared to $0.3 million for the first six months of 2024. The decrease primarily resulted from lower payroll-related expenses due to reduction in headcount and product testing fees.

Current wording

Product development expenses were $0.2 million for the first nine months of 2025, a $0.2 million decrease compared to $0.4 million for the first nine months of 2024. The decrease primarily resulted from lower payroll-related expenses due to reduction in headcount and product testing fees.

Previous wording

Selling, general and administrative expenses were $0.3 million for the second quarter of 2025, down 45% from $0.5 million in the second quarter of 2024. The decrease is primarily due to a reduction in insurance fees of $0.1 million.

Current wording

Selling, general and administrative expenses were $0.2 million for the third quarter of 2025, down 47% from $0.4 million in the third quarter of 2024. The decrease is primarily due to a reduction in consultant fees of $0.1 million.

Previous wording

Selling, general and administrative expenses were $0.7 million for the first six months of 2025, compared to $1.1 million for the first six months of 2024. The decrease is primarily due to reductions in consultant fees of $0.2 million and reduction of $0.1 million in software fees.

Current wording

Selling, general and administrative expenses were $0.9 million for the first nine months of 2025, compared to $1.6 million for the first nine months of 2024. The decrease is primarily due to reductions in consultant fees of $0.3 million, reduction of $0.1 million in insurance fees, reduction of $0.1 million in software fees, and reduction of $0.1 million in director fees.

Previous wording

There was no interest expense for the second quarter of 2025 and 2024.

Current wording

There was no interest expense for the third quarter of 2025 and 2024.

Previous wording

There was no interest expense for the first six months of 2025, compared to interest expense of $5 thousand for the first six months of 2024. The decrease is primarily related to the early termination of the 2022 Streeterville Note. There was no actual cash interest paid for the six months ended June 30, 2025 compared to $5 thousand in the first six months of 2024.

Current wording

There was no interest expense for the first nine months of 2025, compared to interest expense of $5 thousand for the first nine months of 2024. The decrease is primarily related to interest attributable to the 2022 Streeterville Note. There was no actual cash interest paid for nine months ended September 30, 2025 compared to $5 thousand in the first nine months of 2024.

Previous wording

We recognized a $187 thousand gain on debt extinguishment for the first quarter of 2024, which was related to the early termination of the 2022 Streeterville Note. There was no such gain recognized for the first six months of 2025.

Current wording

We recognized a $187 thousand gain on debt extinguishment for the first quarter of 2024, which was related to the early termination of the 2022 Streeterville Note. There was no such gain recognized for the first nine months of 2025.

Previous wording

Other expenses were $8 thousand for the second quarter of 2025, compared to other expenses of $1 thousand for the second quarter of 2024. Other expenses were $8 thousand for the six months ended June 30, 2025, compared to other expenses of $2 thousand for the six months ended June 30, 2024. Other expenses are mainly composed of bank and collateral management fees. We recognized a non-cash loss of approximately $8 thousand on the settlement of returning inventory, cancelling prepayments made to the vendor, and settlement of outstanding accounts payables in the second quarter of 2025.

Current wording

Other expenses were less than a thousand for the third quarter of 2025, compared to other expenses of $7 thousand for the third quarter of 2024. Other expenses were $8 thousand for the nine months ended September 30, 2025, compared to other expenses of $9 thousand for the nine months ended September 30, 2024. Other expenses are mainly composed of bank and collateral management fees. We recognized a non-cash loss of approximately $8 thousand on the settlement of returning inventory, cancelling prepayments made to the vendor, and settlement of outstanding accounts payables in the second quarter of 2025.

Previous wording

Other income was less than a thousand for the second quarter and first six months of 2025, compared to other income of $4 thousand for the second quarter and the first six months of 2024. Such other income is related to tax refunds.

Current wording

Other income was less than a thousand for the third quarter and first nine months of 2025, compared to other income of $26 thousand and $30 thousand for the third quarter and the first nine months of 2024. Such other income is related to receipts of unclaimed property from vendors for previous payments.

Previous wording

Due to the operating losses incurred during the three and six months ended June 30, 2025 and 2024, and after application of the annual limitation set forth under Section 382 of the Internal Revenue Code of 1986, as amended, it was not necessary to record a provision for U.S. federal income tax or various state income taxes as income tax benefits are fully offset by a valuation allowance recorded.

Current wording

Due to the operating losses incurred during the three and nine months ended September 30, 2025 and 2024, and after application of the annual limitation set forth under Section 382 of the Internal Revenue Code of 1986, as amended, it was not necessary to record a provision for U.S. federal income tax or various state income taxes as income tax benefits are fully offset by a valuation allowance recorded.

Previous wording

For the three months ended June 30, 2025, our net loss of $0.2 million decreased 58% from the net loss for the three months ended June 30, 2024 of $0.6 million. The decrease is primarily due to lower fixed costs in the second quarter of 2025 compared to the second quarter of 2024.

Current wording

For the three months ended September 30, 2025, our net loss of $0.2 million decreased 46% from $0.3 million net loss for the three months ended September 30, 2024. The decrease is primarily due to a decrease in operating expenses in the third quarter of 2025 from the third quarter of 2024.

Previous wording

For the six months ended June 30, 2025, our net loss of $0.5 million decreased 49% from the net loss for the six months ended June 30, 2024 of $1.0 million. The decrease is primarily due to a decrease in lower fixed costs in the first six months of 2025 compared to the first six months of 2024.

Current wording

For the nine months ended September 30, 2025, our net loss of $0.7 million decreased 48% from $1.3 million net loss for the nine months ended September 30, 2024. The decrease is primarily due to a decrease in operating expenses in the first nine months of 2025 from the first nine months of 2024.

Previous wording

As of June 30, 2025, we had $0.5 million in cash and no outstanding debt. We have historically incurred substantial losses, and as of June 30, 2025, we had an accumulated deficit of $155.4 million. Additionally, our sales have been concentrated among a few major customers and for the six months ended June 30, 2025, with four customers accounting for approximately 76% of net sales.

Current wording

At September 30, 2025, we had $0.9 million in cash and no outstanding debt. We have historically incurred substantial losses, and as of September 30, 2025, we had an accumulated deficit of $155.6 million. Additionally, our sales have been concentrated among a few major customers and for the nine months ended September 30, 2025, with three customers accounted for approximately 53% of net sales.

Previous wording

In 2025 and 2024, we remain committed to building upon the transformation activities started during 2019 that sought to stabilize and regrow our business. These efforts include the following key developments that occurred during 2025 and 2024:

Current wording

In 2025 and 2024, we remain committed to building upon the initiatives started during 2019 that sought to stabilize and regrow our business. These efforts include the following key developments that occurred during 2025 and 2024:

Previous wording

We continue to closely monitor our cost control efforts to streamline our operations by closely managing all spending throughout the Company, while carefully investing in new products and strategies that sought to reenergize sales.

Current wording

We continue to closely monitor our cost control efforts to streamline our operations by closely managing all spending done throughout the Company, while carefully investing in new products and strategies that sought to reenergize sales.

Previous wording

We will seek to remain agile as an organization to respond to potential or continuing weakness in the macroeconomic environment and in the meantime seek to expand sales channels and enter new markets that we believe will provide additional growth opportunities. We plan to achieve profitability through developing and launching new, innovative products, UPS systems, our Redcap® emergency battery backup tubular TLEDs, evaluating new growth opportunities such as GaN-based power supply circuitry and other energy solution products, as well as executing on our multi-channel sales strategy that targets key verticals, such as government, healthcare, education and commercial and industrial, complemented by our marketing outreach campaigns and expanding channel partnerships. In addition, we intend to continue to apply rigorous financial discipline in our organizational structure, decision-making, business processes and policies, strategic sourcing activities and supply chain practices to help accelerate our path towards profitability.

Current wording

We will seek to remain agile as an organization to respond to potential or continuing weakness in the macroeconomic environment and in the meantime seek to expand sales channels and enter new markets that we believe will provide additional growth opportunities. We plan to improve profitability through developing and launching new, innovative products, UPS systems, our Redcap® emergency battery backup tubular TLEDs, evaluating new growth opportunities such as GaN-based power supply circuitry and other energy solution products, as well as executing on our multi-channel sales strategy that targets key verticals, such as government, healthcare, education and commercial and industrial, complemented by our marketing outreach campaigns and expanding channel partnerships. In addition, we intend to continue to apply rigorous financial discipline in our organizational structure, decision-making, business processes and policies, strategic sourcing activities and supply chain practices to help accelerate our path towards profitability.

Previous wording

As of June 30, 2025, our cash balance was approximately $0.5 million, compared to approximately $0.6 million as of December 31, 2024.

Current wording

At September 30, 2025, our cash balance was approximately $0.9 million, compared to approximately $0.6 million at December 31, 2024.

Previous wording

•As of June 30, 2025, we held total cash and cash equivalents of $0.5 million, of which approximately $85 thousand was maintained in a bank account in Taiwan. These funds support the operations of our wholly owned Taiwanese subsidiary and are denominated in NTD.

Current wording

•As of September 30, 2025, we held total cash of $0.9 million, of which approximately $0.5 million was maintained in a bank account in Taiwan. These funds support the operations of our wholly owned Taiwanese subsidiary and are denominated in NTD.

Previous wording

Net cash used in operating activities was $0.5 million for the six months ended June 30, 2025. The net loss for the six months ended June 30, 2025 was $0.5 million and was adjusted for non-cash items, including depreciation and amortization, stock-based compensation, provisions for inventory, warranty, and accounts receivable reserves and working capital changes. During the six months ended June 30, 2025, major adjustments included a $0.2 million change in accounts receivable caused by specific timing of collecting accounts receivable and a $0.1 million change in accounts payable.

Current wording

Net cash used in operating activities was $0.5 million for the nine months ended September 30, 2025. The net loss for the nine months ended September 30, 2025 was $0.7 million and was adjusted for non-cash items, including depreciation and amortization, stock-based compensation, provisions for inventory, warranty, and accounts receivable reserves and working capital changes. During the nine months ended September 30, 2025, minor adjustments included a $0.1 million change in accounts receivable caused by specific timing of collecting accounts receivable and a $0.2 million change in inventory.

Previous wording

Net cash used in operating activities was $0.8 million for the six months ended June 30, 2024. The net loss for the six months ended June 30, 2024 was $1.0 million and was adjusted for non-cash items, including depreciation and amortization, stock-based compensation, provisions for inventory, warranty, and accounts receivable reserves and working capital changes. During the six months ended June 30, 2024, major adjustments included cash generated from $1.2 million from collection of accounts receivable, and $0.4 million from inventory and $0.1 million from accounts payable, which is offset by a $1.4 million change in related party accounts payable due to timing of inventory receipts and payments.

Current wording

Net cash used in operating activities was $1.0 million for the nine months ended September 30, 2024. The net loss for the nine months ended September 30, 2024 was $1.3 million and was adjusted for non-cash items, including depreciation and amortization, stock-based compensation, provisions for inventory, warranty, and accounts receivable reserves and working capital changes. During the nine months ended September 30, 2024, major adjustments included cash generated from $1.1 million from collection of accounts receivable, and $0.4 million from inventory and $0.2 million from accounts payable. which is offset by a $1.2 million change in related party accounts payable due to timing of inventory receipts and payments.

Previous wording

Net cash used in investing activities was $5 thousand for the six months ended June 30, 2025, primarily from the acquisition of property and equipment.

Current wording

Net cash used in investing activities was $41 thousand and $19 thousand for the nine months ended September 30, 2025 and 2024, respectively, primarily from the acquisition of property and equipment partially offset by proceeds from the sale of property and equipment.

Previous wording

Net cash provided by financing activities was $0.4 million during the six months ended June 30, 2025, related to proceeds from the private placements of common stock.

Current wording

Net cash provided by financing activities was $0.9 million during the nine months ended September 30, 2025, related to proceeds from the private placements of common stock.

Previous wording

Net cash used in financing activities was $0.1 million during the six months ended June 30, 2024, primarily related to $0.9 million of net proceeds from the issuance of common stock, offset by $1.0 million related to net payments of the 2022 Streeterville Note.

Current wording

Net cash used in financing activities was $0.1 million during the nine months ended September 30, 2024, primarily related to $0.9 million of net proceeds from the issuance of common stock, offset by $1.0 million related to net payments of the 2022 Streeterville Note.

Previous wording

Our business operations in Taiwan expose us to foreign currency risk from fluctuations in the New Taiwan dollars (NTD) exchange rate relative to the U.S. dollar. As of June 30, 2025, we had a net NTD exposure of approximately $573 thousand, consisting primarily of NTD-denominated accounts receivable of $604 thousand, partially offset by NTD cash of $85 thousand and accounts payable of $116 thousand.

Current wording

Our business operations in Taiwan expose us to foreign currency risk from fluctuations in the New Taiwan dollars (NTD) exchange rate relative to the U.S. dollar. As of September 30, 2025, we had a net NTD exposure of approximately $527 thousand, consisting primarily of NTD-denominated accounts receivable of $130 thousand, partially offset by NTD cash of $499 thousand and accounts payable of $102 thousand.

Previous wording

For the six months ended June 30, 2025, we recognized a net foreign currency transaction gain of approximately $45 thousand. We do not currently employ financial instruments to hedge our foreign currency exposure. We continue to monitor our NTD exposure and may consider hedging strategies in the future if our foreign currency risk increases materially.

Current wording

For the nine months ended September 30, 2025, we recognized a net foreign currency transaction gain of approximately $43 thousand. We do not currently employ financial instruments to hedge our foreign currency exposure. We continue to monitor our NTD exposure and may consider hedging strategies in the future if our foreign currency risk increases materially.

Previous wording

We have certain customers whose net sales individually represented 10% or more of our total net sales, or whose net trade accounts receivable balance individually represented 10% or more of our total net trade accounts receivable; we have certain suppliers, which individually represent 10% or more of our total purchases, or whose trade accounts payable balance individually represented 10% or more of our total trade accounts payable balance. Please refer to Note 2, “Basis of Presentation and Summary of Significant Accounting Policies,” included under Part I, Item 1, “Financial Statements,” of this Quarterly Report.

Current wording

We have certain customers whose net sales individually represented 10% or more of our total net sales, or whose net trade accounts receivable balance individually represented 10% or more of our total net trade accounts receivable; and we have certain suppliers, which individually represent 10% or more of our total purchases, or whose trade accounts payable balance individually represented 10% or more of our total trade accounts payable balance. Please refer to Note 2, “Basis of Presentation and Summary of Significant Accounting Policies,” included under Part I, Item 1, “Financial Statements,” of this Quarterly Report.