Xos, Inc.

Previous wording

On May 8, 2026, the Company and Aljomaih further amended the Convertible Note to reduce the conversion price from $71.451 per share to $12.00 per share of Common Stock (subject to customary proportional adjustment), and to add a mandatory conversion feature pursuant to which the Company may compel the conversion of the Convertible Note if the Daily VWAP (as defined in the Convertible Note) of the Common Stock exceeds $16.00 per share (subject to customary proportional adjustment) for at least twenty out of thirty consecutive trading days.

Current wording

On May 8, 2026, the Company and Aljomaih Automotive Co. (“Aljomaih”) amended the Convertible Promissory Note (as amended from time to time, the “Convertible Note”) to reduce the conversion price from $71.451 per share to $12.00 per share of Common Stock (subject to customary proportional adjustment), and to add a mandatory conversion feature pursuant to which the Company may compel the conversion of the Convertible Note if the Daily VWAP (as defined in the Convertible Note) of the Common Stock exceeds $16.00 per share (subject to customary proportional adjustment) for at least twenty out of thirty consecutive trading days.

Previous wording

We expect to derive future revenue from sales of our vehicles, energy-storage systems and other product and service offerings. As many of these products are in development, we will require substantial additional capital to continue developing our products and services and bring them to full commercialization as well as fund our operations for the foreseeable future. Until we can generate sufficient revenue from product sales, we expect to finance a substantial portion of our operations through commercialization and productionand any future capital raising efforts. The amount and timing of our future funding requirements, if any, will depend on many factors, including the pace and results of our commercialization efforts.

Current wording

We expect to derive future revenue from sales of our vehicles, energy-storage systems and other product and service offerings. As many of these products are in development, we will require substantial additional capital to continue developing our products and services and bring them to full commercialization as well as fund our operations for the foreseeable future. Until we can generate sufficient revenue from product sales, we expect to finance a substantial portion of our operations through commercialization and production and any future capital raising efforts. The amount and timing of our future funding requirements, if any, will depend on many factors, including the pace and results of our commercialization efforts.

Previous wording

These overlapping and evolving tariff regimes have introduced significant volatility into our cost structure and procurement planning, particularly with respect to power electronics, battery components, and structural materials. The uncertainty around tariff implementation timelines, the scope of new investigations, and the expiration and potential replacement of the current Section 122 surcharge has necessitated frequent adjustments to sourcing strategies, supplier selection, and contract terms. To mitigate these impacts, we have undertaken the following measures:

Current wording

These overlapping and evolving tariff regimes have introduced significant volatility into our cost structure and procurement planning, particularly for power electronics, batteries and battery components, and structural materials. Uncertainty regarding implementation timelines, product coverage, applicable exemptions, and potential future trade actions has required frequent adjustments to sourcing strategies, supplier selection, inventory planning, and contract terms. To mitigate these impacts, we have undertaken the following measures:

Previous wording

•monitoring pending Section 232 and Section 301 investigations for components in our supply chain and evaluating pre-buy, qualification of alternative sources, and contract re-pricing provisions in anticipation of potential new tariff actions;

Current wording

monitored pending Section 232 and Section 301 investigations and evaluated alternative sources, advance purchases, and contract repricing provisions in anticipation of potential new tariff actions; and

Previous wording

•evaluating the impact of the expiration of the current Section 122 surcharge (anticipated on or around July 24, 2026) and the tariff measures that may replace it on our sourcing and cost assumptions.

Current wording

evaluated the effect of the expiration of the Section 122 surcharge and the Section 301 tariffs effective July 24, 2026, on our sourcing strategies and cost assumptions.

Previous wording

During the three months ended March 31, 2026, we delivered 13 vehicles (including leases) and 82 powertrains & hubs. During the three months ended March 31, 2025, we delivered 22 vehicles and 7 powertrains & hubs. During the three months ended March 31, 2026, we generated $1.6 million in revenue (or 14% of revenue) in vehicle sales, $9.1 million (or 81% of revenue) in powertrain & Hub sales, $0.3 million (or 3% of revenue) in other product revenue, and $0.2 million (or 2% of revenue) in ancillary revenue. During the three months ended March 31, 2025, we generated $3.6 million in revenue (or 61% of revenue) from vehicle sales, $1.6 million (or 27% of revenue) in powertrain & Hub sales, $0.5 million (or 8% of revenue) in other product revenue, and $0.2 million (or 4% of revenue) from ancillary revenue.

Current wording

During the six months ended June 30, 2026, we delivered 20 vehicles (including leases) and 105 powertrains & hubs. During the six months ended June 30, 2025, we delivered 150 vehicles and 14 powertrains & hubs. During the six months ended June 30, 2026, we generated $2.2 million in revenue (or 14% of revenue) in vehicle sales, $12.6 million (or 79% of revenue) in powertrain & hub sales, $0.8 million (or 5% of revenue) in other product revenue, and $0.4 million (or 2% of revenue) in ancillary revenue. During the six months ended June 30, 2025, we generated $20.7 million in revenue (or 85% of revenue) from vehicle sales, $2.5 million (or 10% of revenue) in powertrain & hub sales, $0.6 million (or 3% of revenue) in other product revenue, and $0.5 million (or 2% of revenue) from ancillary revenue.

Previous wording

Cost of goods sold includes materials and other direct costs related to production of our vehicles, including components and parts, batteries, direct labor costs and manufacturing overhead, among others. Cost of goods sold also includes material and other direct costs related to the production and assembly of hubs, powertrains and battery packs as well as materials and other costs incurred related to charging infrastructure installation. Materials include inventory purchased from suppliers, as well as assembly components that are assembled by company personnel, including allocation of stock-based compensation expense. Direct labor costs relate to the wages of those individuals responsible for the assembly of vehicles, powertrain units, hubs and batteries delivered to customers. Cost of goods sold also includes depreciation expense on property and equipment related to cost of goods sold activities, calculated over the estimated useful life of the property and equipment on a straight-line basis. Upon property and equipment retirement or disposal, the cost of the asset disposed, and the related accumulated depreciation from the accounts and any gain or loss is reflected in the unaudited condensed consolidated statements of operations, allocated to cost of goods sold.

Current wording

Cost of goods sold includes materials and other direct costs related to production of our vehicles, including components and parts, batteries, direct labor costs and manufacturing overhead, among others. Cost of goods sold also includes materials and other direct costs related to the production and assembly of hubs, powertrains and battery packs as well as materials and other costs incurred related to charging infrastructure installation. Materials include inventory purchased from suppliers, as well as assembly components that are assembled by company personnel, including the allocation of stock-based compensation expense. Direct labor costs relate to the wages of those individuals responsible for the assembly of vehicles, powertrain units, hubs and batteries delivered to customers. Cost of goods sold also includes depreciation expense on property and equipment related to cost of goods sold activities, calculated over the estimated useful life of the property and equipment on a straight-line basis. Upon property and equipment retirement or disposal, the cost of the asset disposed, and the related accumulated depreciation from the accounts and any gain or loss is reflected in the unaudited condensed consolidated statements of operations, allocated to cost of goods sold.

Previous wording

Costs of goods sold includes the impact of identifiable tariff costs related to the production of our vehicles. Tariffs implemented to date in the United States have caused significant disruption, increased costs (both directly and indirectly), and driven uncertainty in the automotive industry for OEMs, suppliers, and dealers, as well as customers. Additional tariffs implemented in the United States and elsewhere in the future may exacerbate these impacts.

Current wording

Cost of goods sold includes the impact of identifiable tariff costs related to the production of our products. Tariffs implemented to date in the United States have caused significant disruption, increased costs (both directly and indirectly), and driven uncertainty in the automotive industry for OEMs, suppliers, and dealers, as well as customers. Additional tariffs implemented in the United States and elsewhere in the future may exacerbate these impacts.

Previous wording

We are continuing to undertake efforts to find more cost-effective vendors and sources of parts and raw materials to lower our overall cost of production.

Current wording

We continue to undertake efforts to identify more cost-effective vendors and sources of parts and raw materials to lower our overall cost of production.

Previous wording

Other expense, net primarily includes interest expense related to our financing obligations and interest expense for our equipment leases, offset by income from the sublease of our Los Angeles, California, office space.

Current wording

Other income (expense), net primarily includes recoveries associated with previously paid import duties, interest expense related to our financing obligations and interest expense for our equipment leases, offset by income from the sublease of our Los Angeles, California, office space.

Previous wording

Comparison of the Three Months Ended March 31, 2026 and 2025

Current wording

Comparison of the Three and Six Months Ended June 30, 2026 and 2025

Previous wording

Our total revenues increased by $5.3 million, or 91%, from $5.9 million in the three months ended March 31, 2025 to $11.2 million in the three months ended March 31, 2026, primarily driven by an increase in unit sales. During the three months ended March 31, 2026, we sold 13 vehicles and 82 powertrains & hubs, compared to 22 vehicles and 7 powertrains & hubs during the three months ended March 31, 2025.

Current wording

Our total revenues decreased by $13.7 million, or 74%, from $18.4 million in the three months ended June 30, 2025 to $4.7 million in the three months ended June 30, 2026, primarily driven by a decrease in unit sales. During the three months ended June 30, 2026, we sold 6 vehicles and 24 powertrains & hubs, compared to 128 vehicles and 7 powertrains & hubs during the three months ended June 30, 2025.

Previous wording

(1)Amounts are net of returns and allowances. Stepvans & vehicle incentives and powertrains & hubs include revenue generated from operating and sales-type leases.

Current wording

Amounts are net of returns and allowances. Stepvans & vehicle incentives and powertrains & hubs include revenue generated from operating and sales-type leases.

Previous wording

(2)Other product revenue for the three months ended March 31, 2026 includes revenue related to non-recurring powertrain engineering services of $0.1 million. The remaining performance obligations for non-recurring engineering services total $39,000 as of March 31, 2026 and are expected to be satisfied in 2026.

Current wording

Other product revenue for both of the three and six months ended June 30, 2026 includes revenue related to non-recurring powertrain engineering services of $0.1 million and revenue related to software services of $0.1 million. The remaining performance obligations for non-recurring engineering services total $8,000 as of June 30, 2026 and are expected to be satisfied in 2026. The remaining performance obligations for software services total $0.5 million as of June 30, 2026 and $0.2 million are expected to be satisfied in 2026 with the remaining $0.3 million expected to be satisfied in 2027 and beyond.

Previous wording

Cost of goods sold increased by $2.2 million, or 48%, from $4.7 million in the three months ended March 31, 2025 to $6.9 million in the three months ended March 31, 2026. The increase in cost of goods sold is directly attributable to the increase in our product revenue and associated increases of (i) $1.3 million in direct materials, (ii) $0.4 million in identifiable tariff charges, (iii) $0.2 million in direct labor, (iv) $0.2 in manufacturing overhead, (v) $0.2 million related to a smaller favorable adjustment of inventory reserves and (vi) $0.1 million for warranty reserve. These increases were offset by decreases of (i) $0.1 million less in unfavorable physical inventory count and other adjustments and (ii) $0.1 million less in freight costs related to product deliveries.

Current wording

Cost of goods sold decreased by $12.6 million, or 75%, from $16.8 million in the three months ended June 30, 2025 to $4.2 million in the three months ended June 30, 2026. The decrease in cost of goods sold is directly attributable to the decrease in our product revenue and associated decreases of (i) $11.0 million in direct materials, (ii) $2.0 million in manufacturing overhead, (iii) $0.1 million dealer return reserves with no such comparable expense in the three months ended June 30, 2026, (iv) $0.1 million for warranty reserve and (v) $0.1 million for freight costs. These decreases were offset by increases of (i) $0.2 million in physical inventory count and other adjustments, (ii) $0.3 million related to increases in inventory reserves and (iii) $0.2 million in direct labor largely related to the completion of energy service projects.

Previous wording

The increases in direct material, direct labor, and manufacturing overhead costs are driven by an increase in units sold. A significant portion of the overhead costs incurred include freight, tariff charges, indirect salaries, facility rent, utilities, and depreciation of production equipment, which are primarily fixed in nature and allocated based on production levels. Accordingly, these costs increase correspondingly with an increase in production volume and units sold.

Current wording

The decreases in direct material and manufacturing overhead costs are driven by a decrease in units sold. A significant portion of the overhead costs incurred include freight, tariff charges, indirect salaries, facility rent, utilities, and depreciation of production equipment, which are primarily fixed in nature and allocated based on production levels. Accordingly, these costs decrease correspondingly with a decrease in production volume and units sold.

Previous wording

General and administrative expenses decreased by $1.8 million, or 23%, from $7.9 million in the three months ended March 31, 2025 to $6.1 million in the three months ended March 31, 2026, attributable to decreases of (i) $1.9 million in financed equipment lease expense with no such comparable expense for the three months ended March 31, 2026, (ii) $0.5 million in facility expenses connected to the termination of the Mesa Lease (as defined below), and (iii) $0.1 million in insurance costs. These decreases were offset by increases of (i) $0.4 million in stock-based compensation expense, (ii) in $0.1 million in personnel costs for legal, finance, accounting, information technology and general and administrative functions (iii) $0.1 million in other operating expenses including professional services and computer software costs, and (iv) $0.1 million in depreciation expense due to the allocation of more overhead costs.

Current wording

General and administrative expenses decreased by $0.1 million, or 2%, from $5.9 million in the three months ended June 30, 2025 to $5.8 million in the three months ended June 30, 2026, attributable to decreases of (i) $0.6 million in facility expenses connected to the termination of the Mesa Lease (as defined below) with no such comparable expense in the three months ended June 30, 2026, (ii) $0.2 million in insurance costs, and (iii) $0.3 million in other operating expenses including travel, recruiting, and computer software costs. These decreases were offset by increases of (i) $0.4 million in stock-based compensation expense, (ii) $0.3 million in personnel costs for legal, finance, accounting, information technology and general and administrative functions, and (iii) $0.3 million in professional fees.

Previous wording

Research and development expenses increased by $0.1 million, or 5%, from $1.9 million in the three months ended March 31, 2025 to $2.0 million in the three months ended March 31, 2026. The change was primarily due to increases of (i) $0.2 million from expenses related to software subscriptions, certifications and professional services, and (ii) $0.1 million in materials purchases related to Hub development. These increases were offset by a decrease of $0.2 million in allocation of personnel costs, including stock-based compensation expense.

Current wording

Research and development expenses decreased by $0.2 million, or 9%, from $2.1 million in the three months ended June 30, 2025 to $1.9 million in the three months ended June 30, 2026. The change was primarily due to decreases of (i) $0.1 million personnel costs and (ii) $0.1 million in materials purchases related to Hub development.

Previous wording

The gain on the change in fair value of derivative instruments increased by $63,000, or 117%, from a loss of $54,000 in the three months ended March 31, 2025 to a gain of $9,000 in the three months ended March 31, 2026. The change in fair value in both periods is primarily attributable to the change in our stock price and the resulting valuation at the respective reporting period.

Current wording

The loss on the change in fair value of derivative instruments increased by $9,000, or 150%, from a loss of $6,000 in the three months ended June 30, 2025 to $15,000 in the three months ended June 30, 2026. The change in fair value in both periods is primarily attributable to the change in our stock price and the resulting valuation at the respective reporting period.

Previous wording

The Company recorded an income tax provision of $5,000 and $12,000 during the three months ended March 31, 2026 and 2025, respectively.

Current wording

The Company recorded an income tax provision of $27,000 and $13,000 during the three months ended June 30, 2026 and 2025, respectively.

Previous wording

As of March 31, 2026, our principal sources of liquidity were our cash and cash equivalents of$9.8 million with an accumulated deficit of approximately$233.7 million. Our short-term uses of cash are for working capital and to pay the principal of our indebtedness. During thethree months ended March 31, 2026, we incurred a net loss of approximately$5.0 million and had net cash used in operating activities of$1.6 million.

Current wording

As of June 30, 2026, our principal sources of liquidity were our cash and cash equivalents of $13.2 million with an accumulated deficit of approximately $239.9 million. Our short-term uses of cash are for working capital and to pay the principal of our indebtedness. During the six months ended June 30, 2026, we incurred a net loss of approximately $11.8 million and had net cash used in operating activities of $4.3 million.

Previous wording

On August 14, 2025, we entered into a Sales Agreement (the “Sales Agreement”) with Roth Capital Partners, LLC (the “Agent”). Pursuant to the terms of the Sales Agreement, we may offer and sell shares of our common stock having an aggregate offering amount of up to $20 million from time to time through the Agent (the “ATM Offering”). Pursuant to General Instruction I.B.6 of Form S-3, the prospectus setting forth the offer and sale of securities pursuant to the ATM Offering is limited to an aggregate of $5.4 million during any 12-month period pursuant to the Sales Agreement. Any sales of common stock pursuant to the Sales Agreement would be made in sales deemed to be an “at-the-market offering” as defined in Rule 415 under the Securities Act of 1933, as amended. The Agent is entitled to a commission of 3.0% of the gross proceeds from the sale of common stock sold under the Sales Agreement. During 2025, we sold an aggregate of 730,400 shares of common stock in the ATM Offering, resulting in net proceeds of approximately $2.4 million. As of March 31, 2026, we had$2.5 million of shares of Common Stock available for future issuance under the ATM Offering pursuant to our prospectus supplement with respect to the ATM Offering, and$17.2 million remaining under the terms of the Sales Agreement.

Current wording

On August 14, 2025, we entered into a Sales Agreement (the “Sales Agreement”) with Roth Capital Partners, LLC (the “Agent”). Pursuant to the terms of the Sales Agreement, we may offer and sell shares of our common stock having an aggregate offering amount of up to $20 million from time to time through the Agent (the “ATM Offering”), subject to the limitations of General Instruction I.B.6 of Form S-3, which limits the amount the Company may sell, together with any other primary offerings on Form S-3, during any 12-month period pursuant to the Sales Agreement. Any sales of Common Stock pursuant to the Sales Agreement would be made in sales deemed to be an “at-the-market offering” as defined in Rule 415 under the Securities Act of 1933, as amended. The Agent is entitled to a commission of 3.0% of the gross proceeds from the sale of Common Stock sold under the Sales Agreement. During 2025, we sold an aggregate of 730,400 shares of common stock in the ATM Offering, resulting in net proceeds of approximately $2.4 million. In the six months ended June 30, 2026, we sold 378,700 shares of common stock in the ATM Offering, resulting in net proceeds of approximately $2.2 million. During the 12 calendar month period ending August 12, 2026, we have sold an aggregate of $11,366,932 of securities pursuant to General Instruction I.B.6 of Form S-3. As of June 30, 2026, we had $8.8 million of shares of Common Stock available for future issuance under the ATM Offering pursuant to our prospectus supplement with respect to the ATM Offering, and $14.6 million remaining under the terms of the Sales Agreement.

Previous wording

The following table provides a summary of cash flow data for the three months ended March 31, 2026 and 2025(in thousands):

Current wording

The following table provides a summary of cash flow data for the six months ended June 30, 2026 and 2025(in thousands):

Previous wording

Netcash used in opera ting activities was$1.6 million for the three months ended March 31, 2026, primarily consisting of a cash-basis net lossof$1.7 million from normal operations of the Company (after non-cash adjustments of$3.3 million), partially offset by favorable net working capital changes of $0.1 million, primarily driven by lower inventories due to improved inventory turns and other assets, partially offset by higher accounts receivable and prepaid expenses and other current assets.

Current wording

Netcash used in opera ting activities was$4.3 million for the six months ended June 30, 2026, primarily consisting of a cash-basis net lossof$5.8 million from normal operations of the Company (after non-cash adjustments of$6.0 million), partially offset by favorable net working capital changes of $1.5 million, primarily driven by lower inventories due to improved inventory turns and lower accounts receivable due to collections, partially offset by lower other liabilities, accounts payable, and higher prepaid expenses and other current assets.

Previous wording

Net cash used in operating activities was $4.8 million for the three months ended March 31, 2025, primarily consisting of a cash-basis net loss of$7.1 million from normal operations of the Company (after non-cash adjustments of$3.1 million), partially offset by favorable net working capital changes of $2.3 million, primarily driven by lower accounts receivable and other liabilities, partially offset by lower accounts payable and purchases of inventory for production build-up.

Current wording

Net cash used in operating activities was $0.1 million for the six months ended June 30, 2025, primarily consisting of a cash-basis net loss of$13.1 million from normal operations of the Company (after non-cash adjustments of$4.6 million), partially offset by favorable net working capital changes of $13.0 million, primarily driven by lower accounts receivable due to collections, inventories due to improved inventory turns, partially offset by lower accounts payable and higher prepaid expenses and other current assets.

Previous wording

Net cash provided by investing activities was$0.3 million for the three months ended March 31, 2026 due to proceeds from the disposal of assets held for sale, partially offset by $19,000 in purchases of property and equipment.

Current wording

Net cash provided by investing activities was$0.3 million for the six months ended June 30, 2026 due to proceeds from the disposal of assets held for sale, partially offset by $38,000 in purchases of property and equipment.

Previous wording

Net cash provided by investing activities was $0 million for the three months ended March 31, 2025.

Current wording

Net cash provided by investing activities was $0 for the six months ended June 30, 2025.

Previous wording

Net cash used in financing activitieswas $2.9 million for the three months ended March 31, 2026, which primarily related to (i) $1.5 million for payments of principal on Convertible Notes, (ii) payments for short-term insurance financing notes of $0.7 million, (iii) taxes paid relating to net-settlement of stock-based awards of $0.6 million, and (iv) equipment lease principal paymentsof $0.1 million.

Current wording

Net cash provided by financing activitieswas $3.2 million for the six months ended June 30, 2026, which primarily related to (i) net proceeds of $5.4 million in the Registered Direct Offering, (ii) net proceeds of $2.2 million in sales under the ATM Offering program, and (iii) proceeds of $1.0 million from short-term insurance financing notes, partially offset by (i) $3.0 million for payments of principal on Convertible Notes, (ii) payments for short-term insurance financing notes of $1.3 million, (iii) taxes paid relating to net-settlement of stock-based awards of $1.0 million, and (iv) equipment lease principal paymentsof $0.1 million.

Previous wording

Net cash used in financing activities was $1.5 million for the three months ended March 31, 2025, primarily related to (i)net short-term insurance financing note activity of $0.8 million, (ii) equipment lease principal payments of $0.6 million and (iii) taxes paid relating to net-settlement of stock-based awards of $0.1 million.

Current wording

Net cash used in financing activities was $2.1 million for the six months ended June 30, 2025, primarily related to (i)net short-term insurance financing note activity of $0.2 million, (ii) equipment lease principal payments of $1.2 million and (iii) taxes paid relating to net-settlement of stock-based awards of $0.7 million.

Previous wording

As a result of the termination of the lease on the Company’s manufacturing facility in Mesa, Arizona (“Mesa Lease”), future lease commitments have been reduced. We did not have any additional material contractual obligations or other commitments as of March 31, 2026, other than as disclosed in the 2025 Form 10-K, and in Note 13— Commitments and Contingencies.

Current wording

As a result of the termination of the lease on the Company’s manufacturing facility in Mesa, Arizona (“Mesa Lease”), future lease commitments have been reduced. Effective June 30, 2026, the Company entered a lease termination agreement for the lease on the Company's office in Huntington Beach, California, reducing outstanding and future lease commitments by $0.4 million. We did not have any additional material contractual obligations or other commitments as of June 30, 2026, other than as disclosed in the 2025 Form 10-K, and in Note 13 — Commitments and Contingencies.

Previous wording

Our unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) which requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the balance sheet date, as well as reported amounts of revenues and expenses during the reporting periods. Our most significant estimates and judgments involve inventory valuation, incremental borrowing rates for assessing operating and financing lease liabilities, useful lives of property and equipment, earn-out shares liability, stock-based compensation, common stock warrant liability, product warranty liability and valuations utilized in connection with acquisitions. We base our estimates on historical experience and on various other assumptions believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ from those estimates, and such differences could be material to our financial statements.

Current wording

Our unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) which requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the balance sheet date, as well as reported amounts of revenues and expenses during the reporting periods. Our most significant estimates and judgments involve inventory valuation, incremental borrowing rates for assessing operating and financing lease liabilities, useful lives of property and equipment, earn-out shares liability, stock-based compensation, common stock warrant liability, and product warranty liability. We base our estimates on historical experience and on various other assumptions believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ from those estimates, and such differences could be material to our financial statements.