FTLF 10-Q
Fitlife Brands, Inc. (FTLF)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT |
For the transition period from N/A to N/A
Commission File No.
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(Exact name of registrant as specified in its charter) |
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Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the Registrant (1) has filed all reports required by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days:
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b–2 of the Exchange Act). Yes
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
As of August 12, 2026, a total of
FITLIFE BRANDS, INC.
INDEX TO FORM 10-Q FILING
FOR THE QUARTER ENDED JUNE 30, 2026
TABLE OF CONTENTS
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PAGE |
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PART I - FINANCIAL INFORMATION |
1 | |
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Item 1. |
Financial Statements |
1 |
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Condensed Consolidated Balance Sheets (unaudited) |
1 | |
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Condensed Consolidated Statements of Income and Comprehensive Income (unaudited) |
2 | |
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Condensed Consolidated Statements of Stockholders’ Equity (unaudited) |
3 | |
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Condensed Consolidated Statements of Cash Flows (unaudited) |
4 | |
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Notes to Condensed Consolidated Financial Statements (unaudited) |
5 | |
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Item 2. |
Management’s Discussion & Analysis of Financial Condition and Results of Operations |
18 |
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Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
26 |
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Item 4. |
Controls and Procedures |
27 |
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PART II - OTHER INFORMATION |
28 | |
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Item 1. |
Legal Proceedings |
28 |
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Item 1A. |
Risk Factors |
28 |
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Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
28 |
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Item 3. |
Defaults Upon Senior Securities |
28 |
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Item 5. |
Other Information |
28 |
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Item 6. |
Exhibits |
28 |
Special Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q (“Quarterly Report”), including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 2 of Part I of this Quarterly Report, includes forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by forward-looking statements.
In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential”, “proposed”, “intended”, or “continue” or the negative of these terms or other comparable terminology. You should read statements that contain these words carefully, because they discuss our expectations about our future operating results or our future financial condition or state other “forward-looking” information. There may be events in the future that we are not able to accurately predict or control. Before you invest in our securities, you should be aware that the occurrence of any of the events described in this Quarterly Report could substantially harm our business, results of operations and financial condition, and that upon the occurrence of any of these events, the trading price of our securities could decline and you could lose all or part of your investment. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, growth rates, levels of activity, performance or achievements. We are under no duty to update any of the forward-looking statements after the date of this Quarterly Report to conform these statements to actual results.
FITLIFE BRANDS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
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June 30, 2026 |
December 31, 2025 |
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(Unaudited) |
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ASSETS: |
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CURRENT ASSETS |
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Cash and cash equivalents |
$ | $ | ||||||
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Accounts receivable, net |
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Inventories, net |
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Prepaid expense and other current assets |
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Total current assets |
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Property and equipment, net |
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Right of use asset |
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Intangibles, net |
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Goodwill |
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Deferred tax asset |
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Derivative asset |
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Other assets |
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TOTAL ASSETS |
$ | $ | ||||||
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LIABILITIES AND STOCKHOLDERS' EQUITY: |
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CURRENT LIABILITIES: |
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Accounts payable |
$ | $ | ||||||
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Accrued expense |
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Income taxes payable |
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Product returns |
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Term loan – current portion |
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Lease liability – current portion |
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Total current liabilities |
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Revolving line of credit |
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Term loan, net of current portion and unamortized deferred finance costs |
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Long-term lease liability, net of current portion |
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Derivative liability |
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Deferred tax liability |
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TOTAL LIABILITIES |
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STOCKHOLDERS’ EQUITY: |
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Common stock, $ |
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Additional paid-in capital |
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Retained earnings |
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Accumulated other comprehensive loss |
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TOTAL STOCKHOLDERS' EQUITY |
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
$ | $ | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
FITLIFE BRANDS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026 AND 2025
(In thousands, except per share data)
(Unaudited)
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Three months ended June 30 |
Six months ended June 30 |
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2026 |
2025 |
2026 |
2025 |
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Revenue |
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Cost of goods sold |
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Gross profit |
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OPERATING EXPENSE: |
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Advertising and marketing |
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Selling, general and administrative |
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Merger and acquisition related |
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Depreciation and amortization |
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Total operating expense |
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OPERATING INCOME |
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OTHER EXPENSE (INCOME) |
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Interest expense, net |
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Foreign exchange gain |
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Total other expense, net |
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INCOME BEFORE INCOME TAX PROVISION |
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PROVISION FOR INCOME TAXES |
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NET INCOME |
$ | $ | $ | $ | ||||||||||||
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NET INCOME PER SHARE |
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Basic |
$ | $ | $ | $ | ||||||||||||
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Diluted |
$ | $ | $ | $ | ||||||||||||
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Basic weighted average common shares |
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Diluted weighted average common shares |
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COMPREHENSIVE INCOME: |
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NET INCOME |
$ | $ | $ | $ | ||||||||||||
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Foreign currency translation adjustment |
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Gain on derivatives, net of tax |
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Comprehensive income |
$ | $ | $ | $ | ||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
FITLIFE BRANDS, INC.
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026 AND 2025
(In thousands)
(Unaudited)
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Accumulated other comprehensive income (loss) |
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Common Stock |
Additional |
Retained |
Foreign |
Derivatives (cash flow |
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Shares |
Amount |
capital |
earnings |
adjustment |
hedges) |
Total |
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THREE MONTHS ENDED JUNE 30, 2026 |
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APRIL 1, 2026 |
$ | $ | $ | $ | ( |
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Stock-based compensation |
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Comprehensive income |
- | ( |
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Tax effect of derivative |
- | ( |
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Net income |
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JUNE 30, 2026 |
$ | $ | $ | $ | ( |
) | $ | $ | ||||||||||||||||||||
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SIX MONTHS ENDED JUNE 30, 2026 |
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JANUARY 1, 2026 |
$ | $ | $ | $ | ( |
) | $ | ( |
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Stock-based compensation |
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Comprehensive income |
- | ( |
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Tax effect of derivative |
- | ( |
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Net income |
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JUNE 30, 2026 |
$ | $ | $ | $ | ( |
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THREE MONTHS ENDED JUNE 30, 2025 |
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APRIL 1, 2025 |
$ | $ | $ | $ | ( |
) | $ | $ | ||||||||||||||||||||
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Exercise of stock options |
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Stock-based compensation |
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Comprehensive income |
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Net income |
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JUNE 30, 2025 |
$ | $ | $ | $ | ( |
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SIX MONTHS ENDED JUNE 30, 2025 |
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JANUARY 1, 2025 |
$ | $ | $ | $ | ( |
) | $ | $ | ||||||||||||||||||||
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Exercise of stock options |
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Stock-based compensation |
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Comprehensive income |
- | ) | ||||||||||||||||||||||||||
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Net income |
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JUNE 30, 2025 |
$ | $ | $ | $ | ( |
) | $ | $ | ||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
FITLIFE BRANDS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2026 AND 2025
(In thousands)
(Unaudited)
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Six months ended June 30, |
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2026 |
2025 |
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CASH FLOWS FROM OPERATING ACTIVITIES: |
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Net income |
$ | $ | ||||||
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Adjustments to reconcile net income to net cash provided by operating activities: |
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Depreciation and amortization |
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Allowance for credit losses |
( |
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Allowance for inventory obsolescence |
( |
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Stock-based compensation |
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Amortization of deferred financing costs |
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Changes in operating assets and liabilities: |
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Accounts receivable |
( |
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Inventories |
( |
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Deferred tax asset |
( |
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Prepaid expense and other assets |
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Right of use asset |
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Accounts payable |
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Income taxes payable |
( |
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Lease liability |
( |
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( |
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Accrued expenses and other liabilities |
( |
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Product returns |
( |
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Net cash provided by operating activities |
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CASH FLOWS FROM INVESTING ACTIVITIES: |
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Cash deposit paid for Irwin acquisition |
( |
) | ||||||
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Purchase of property and equipment |
( |
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Net cash used in investing activities |
( |
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CASH FLOWS FROM FINANCING ACTIVITIES: |
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Proceeds from exercise of stock options |
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Payments on 2025 term loan |
( |
) | ||||||
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Payments on 2023 term loan |
( |
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| Borrowings on line of credit | ||||||||
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Payments on line of credit |
( |
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Net cash used in financing activities |
( |
) | ( |
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Foreign currency impact on cash |
( |
) | ||||||
| CHANGE IN CASH AND CASH EQUIVALENTS | ( |
) | ( |
) | ||||
| CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | ||||||||
| CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | $ | ||||||
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Supplemental cash flow disclosure |
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Cash paid for income taxes |
$ | $ | ||||||
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Cash paid for interest, net of amounts capitalized |
$ | $ | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
FITLIFE BRANDS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026 AND 2025
(In thousands, except per share data)
(Unaudited)
NOTE 1 - DESCRIPTION OF BUSINESS
Summary
FitLife Brands, Inc. (the “Company”) is a provider of innovative and proprietary nutritional supplements and wellness products for health-conscious consumers marketed under the following brand names: (i) NDS Nutrition, PMD Sports, SirenLabs, Core Active, Nutrology, and Metis Nutrition (together, the “NDS Products”); (ii) iSatori, BioGenetic Laboratories, and Energize (together, the "iSatori Products"); (iii) Dr. Tobias, All Natural Advice, and Maritime Naturals (together, the “MRC Products"); (iv) MusclePharm; and (v) Irwin Naturals, Applied Nutrition, and Nature’s Secret (together, the “Irwin Products”).
The Company distributes the NDS Products principally through franchised General Nutrition Centers, Inc. (“GNC”) stores located both domestically and internationally. The iSatori Products are sold through retail locations, which include specialty and mass market retailers, as well as online directly to the end consumer. The Company distributes the MRC Products primarily online through e-commerce platforms, such as Amazon, directly to the end consumer. MusclePharm’s products are sold to both wholesale customers as well as online through various e-commerce platforms directly to the end consumer. Irwin Products are sold principally through wholesale channels in mass market and health food store segments, but also online directly to the end consumer.
FitLife Brands is headquartered in Omaha, Nebraska. For more information on the Company, please go to www.fitlifebrands.com. The Company’s common stock, par value $
Acquisition of Irwin Naturals
On August 8, 2025, the Company acquired substantially all of the assets and assumed certain liabilities of Irwin Naturals and its related affiliates (“Irwin”) through an asset purchase transaction under Section 363 of the U.S. Bankruptcy Code. Total consideration for the acquisition was $
NOTE 2 - BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In our opinion, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation are included. Operating results for the three and six months ended June 30, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026. Although management of the Company believes the disclosures presented herein are adequate and not misleading, these interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the footnotes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the Securities and Exchange Commission (the “SEC”) on March 31, 2026.
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company prepares its financial statements in accordance with accounting principles generally accepted in the U.S. (“GAAP”). Significant accounting policies are as follows:
Principles of Consolidation
The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. Intercompany accounts and transactions have been eliminated in the condensed consolidated financial statements.
Foreign Currency
The functional currency of the Company is the U.S. dollar (“USD”). The functional currency of the Company’s Canadian subsidiaries is the Canadian dollar (“CAD”). The assets and liabilities of the Company’s foreign subsidiaries are translated into U.S. dollars using end-of-period exchange rates. Changes in reported amounts of assets and liabilities of foreign subsidiaries that occur as a result of changes in exchange rates between foreign subsidiaries’ functional currencies and the U.S. dollar are included in foreign currency translation adjustment. Foreign currency translation adjustment is included as a component of stockholders’ equity in the accompanying condensed consolidated balance sheets. Revenue and expense transactions use an average rate prevailing during the period of the related transaction. Transaction gains and losses that arise from exchange rate fluctuations denominated in a currency other than the functional currency of each subsidiary are included in the results of operations as incurred.
Use of Estimates and Assumptions
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) the disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and (iii) the reported amount of net sales and expense recognized during the periods presented.
Those estimates and assumptions include estimates for reserves of uncollectible accounts receivable, allowance for inventory obsolescence, product returns, deals and promotions, depreciable lives of property and equipment, allocation of purchase price from business combinations, analysis of impairment of goodwill, realization of deferred tax assets, accruals for potential liabilities and assumptions made in valuing stock instruments issued for services. Management evaluates these estimates and assumptions on a regular basis. Actual results could differ from those estimates.
Revenue Recognition
The Company’s revenue is comprised of sales of nutritional supplements and wellness products to consumers.
The Company accounts for revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic No. 606, Revenue from Contracts with Customers (“ASC 606”). The underlying principle of ASC 606 is to recognize revenue to depict the transfer of goods or services to customers at the amount expected to be collected. ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contract(s), which includes (1) identifying the contract(s) or agreement(s) with a customer, (2) identifying our performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. Under ASC 606, revenue is recognized when performance obligations under the terms of a contract are satisfied, which occurs for the Company upon shipment or delivery of products to our customers based on written sales terms. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring the products to a customer.
All products sold by the Company are distinct individual products and consist of nutritional supplements and wellness products. The products are offered for sale solely as finished goods, and there are no performance obligations required post-shipment for customers to derive the expected value from them.
The Company’s products are also sold on e-commerce platforms including Amazon. For these transactions, the Company evaluated principal versus agent considerations to determine appropriateness of recording distribution and platform fees paid to third-party e-commerce companies as an expense or as a reduction of revenue. The Company records distribution and platform fees to cost of goods sold in the consolidated statements of income and comprehensive income. Distribution and platform fees are not recorded as a reduction of revenue because the Company (1) owns the goods before they are transferred to the customer, (2) can direct Amazon, similar to other third-party logistics providers (“Logistic Providers”), to return the Company’s inventory to any location specified by the Company, (3) has the responsibility to make customers whole following any returns made by customers directly to Logistic Providers and the Company retains the back-end inventory risk, (4) is subject to credit risk (i.e., credit card chargebacks), (5) establishes prices of its products, (6) can determine who fulfills the goods to the customer (Amazon or the Company) and (7) can limit quantities or stop selling the goods at any time. Based on these considerations, the Company is the principal in this arrangement. Advertising fees paid to Amazon are recorded in advertising and marketing expense in the consolidated statements of income and comprehensive income
The Company disaggregates revenue into distribution channels, geographical regions and collections of brands (Legacy FitLife and recently acquired brands). The Company determines that disaggregating revenue into these categories achieves the disclosure objective to depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors.
Online revenue, which consists of revenue generated from sales on the Company’s own websites as well as third-party e-commerce platforms such as Amazon, was approximately
Sales to customers in the U.S. were approximately
The Company provides limited financial performance metrics for two collections of brands—Legacy FitLife (thirteen brands, including MRC and MusclePharm), and Irwin (three brands). These collections of brands do not meet the definition of operating segments and are not managed as such.
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Three months ended |
Six months ended |
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June 30, 2026 |
June 30, 2025 |
June 30, 2026 |
June 30, 2025 |
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(Unaudited) |
(Unaudited) |
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Legacy FitLife |
$ | $ | $ | $ | ||||||||||||
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Irwin |
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Total revenue |
$ | $ | $ | $ | ||||||||||||
Control of products we sell transfers to customers upon shipment from our facilities or delivery to our customers, and the Company’s performance obligations are satisfied at that time. Shipping and handling activities are performed before the customer obtains control of the goods and therefore represent a fulfillment activity rather than promised goods to the customer. Payments for sales are generally made by check, credit card, or wire transfer. Historically the Company has not experienced any significant payment delays from customers.
For direct-to-consumer sales, with the exception of Irwin Products, the Company allows for returns within
A right of return does not represent a separate performance obligation, but because customers are allowed to return products, the consideration to which the Company expects to be entitled is variable. Such elements of variable consideration include, but are not limited to, estimated sales allowances, defective products, product returns and sales incentives, such as markdowns and sales promotions. The Company uses the most likely amount method to quantify the variable consideration. We assess our contracts and the reasonableness of our conclusions on a quarterly basis.
Customer and Vendor Concentration
Total net sales to customer during the three and six months ended June 30, 2026 represented
For the three months ended June 30, 2026, there were vendors who accounted for
As of June 30, 2026, there were vendors who accounted for
As of June 30, 2026, there were customers who accounted for
Cash and Cash Equivalents
The Company considers all highly liquid investments with an original maturity from the date of purchase of three months or less to be cash equivalents.
Leases
We lease certain corporate office space and office equipment under lease agreements with monthly payments over a period of 36 to 84 months. We determine whether an arrangement is a lease at inception. The Company accounts for its leases in accordance with the guidance of ASC 842, Leases. The Company determines whether a contract is, or contains, a lease at inception. Right-of-use assets represent the Company’s right to use an underlying asset during the lease term, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at lease commencement based upon the estimated present value of unpaid lease payments over the lease term. The Company uses its incremental borrowing rate based on the information available at lease commencement in determining the present value of unpaid lease payments.
Goodwill
The Company has determined that it has a single reporting unit for purposes of performing its goodwill impairment test. The Company reviews goodwill for impairment on an annual basis or whenever events or changes in circumstances indicate the carrying value may not be recoverable. The Company first assesses qualitative factors to determine whether it is more-likely-than-not that the fair value of the reporting unit is less than the carrying amount as a basis for determining whether it is necessary to perform an impairment test. If the qualitative assessment warrants further analysis, the Company compares the fair value of the reporting unit to its carrying value. The fair value of the reporting unit is determined using the market approach. The Company determines the amount of a potential goodwill impairment by comparing the fair value of the reporting unit with its carrying amount. To the extent the carrying value of a reporting unit exceeds its fair value, a goodwill impairment charge is recognized.
As the Company uses the market approach to determine fair value of the reporting unit, the price of its Common Stock is an important component of the fair value calculation. If the Company’s stock price experiences significant price fluctuations, this will impact the fair value of the reporting unit, which can lead to potential impairment in future periods.
Management determined there were no indicators of impairment at June 30, 2026 or December 31, 2025. The Company will perform its annual impairment analysis in December 2026.
Intangible Assets
The Company has certain intangible assets that were recorded at their fair value at the time of acquisition. The finite-lived intangible assets consist of customer relationships, formulations, and websites. Intangible assets with finite useful lives are amortized using the straight-line method over their estimated useful life. Intangible assets with indefinite lives, which consist of brands and trademarks, are not amortized but are tested for impairment annually or when indicators of impairment exist. Factors that management considers in this assessment include macroeconomic conditions, industry and market considerations, overall financial performance (both current and projected), changes in management and strategy, and changes in the composition and carrying amounts of net assets. If this qualitative assessment indicates that it is more likely than not that the fair value of a reporting unit is less than it’s carrying value, a quantitative assessment is then performed.
The Company noted indicators of impairment for intangible assets as of June 30, 2026, and December 31, 2025. Intangible asset amortization expense is expected to be approximately $
Acquisitions and Business Combinations
The Company allocates the fair value of purchase consideration to the tangible assets acquired, liabilities assumed, and separately identified intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from acquired trademarks and trade names, useful lives, and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement period, which is the period needed to gather all information necessary to make the purchase price allocation, not to exceed one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings.
Income Taxes
Provision for income taxes consists of current and deferred tax expense. Current tax expense is the expected tax payable on the taxable income for the year using tax rates enacted in the countries where the Company and its subsidiaries operate and generate taxable income. The Company accounts for income taxes using the asset and liability method, whereby deferred tax assets are recognized for deductible temporary differences and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets may also result from unused losses and other deductions carried forward. An assessment of the probability that a deferred tax asset will be recovered is made prior to any deferred tax asset being recognized. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized, or that future deductibility is uncertain.
There is potential for volatility of the effective tax rate due to several factors, including changes in the mix of the pre-tax income and the jurisdictions to which it relates. The effective income tax rate was
Net Income Per Share
Basic net income per share is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted earnings per share is computed by dividing the net income available to common stockholders by the weighted average number of common shares outstanding plus the number of additional common shares that would have been outstanding if all dilutive potential common shares had been issued using the treasury stock method. Potential common shares are excluded from the computation when their effect is antidilutive. The dilutive effect of potentially dilutive securities is reflected in diluted net income per share if the exercise prices were lower than the average fair market value of common shares during the reporting period.
Basic and diluted weighted-average shares outstanding and antidilutive options that were excluded from diluted weighted average shares outstanding are as follows:
|
Three months ended June 30, |
Six months ended June 30, |
|||||||||||||||
|
2026 |
2025 |
2026 |
2025 |
|||||||||||||
|
Basic weighted average shares outstanding |
||||||||||||||||
|
Dilutive effect of potential common shares |
||||||||||||||||
|
Diluted weighted average shares outstanding |
||||||||||||||||
|
Antidilutive options |
||||||||||||||||
Fair Value Measurements
The Company uses various inputs in determining the fair value of its investments and measures these assets on a recurring basis. Financial assets recorded at fair value in the balance sheets are categorized by the level of objectivity associated with the inputs used to measure their fair value. FASB ASC Topic 820, Fair Value, establishes a three-level valuation hierarchy for the use of fair value measurements based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date:
|
● |
Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. |
|
● |
Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means. |
|
● |
Level 3 – Inputs that are both significant to the fair value measurement and unobservable. These inputs rely on management’s own assumptions about the assumptions that market participants would use in pricing the asset or liability. The unobservable inputs are developed based on the best information available in the circumstances and may include the Company’s own data. |
The carrying amounts of financial assets and liabilities, such as cash and cash equivalents, accounts receivable and accounts payable, approximate their fair values because of the short maturity of these instruments. The carrying value of the Company’s debt approximate their fair value based on the market interest rates of these notes.
Segment
The Company’s Chief Executive Officer is the chief operating decision maker (“CODM”) and evaluates performance and makes operating decisions about allocating resources based on financial data presented on a consolidated basis. Because the CODM evaluates financial performance on a consolidated basis, the Company has determined that it operates as a reportable segment composed of the financial results of the Company.
Recently Issued Accounting Pronouncements
In November 2024, FASB issued ASU 2024-03 Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) Disaggregation of Income Statement Expenses (“ASU 2024-03”). The guidance in ASU 2024-03 requires public business entities to disclose in the notes to the financial statements, among other things, specific information about certain costs and expenses including purchases of inventory; employee compensation; and depreciation and amortization expense for each caption on the income statement where such expenses are included. The update is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted, and the amendments may be applied prospectively to reporting periods after the effective date or retrospectively to all periods presented in the financial statements. We are currently evaluating the provisions of this guidance and assessing the potential impact on our financial statement disclosures.
Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the SEC did not or are not believed by management to have a material impact on the Company’s present or future financial statements.
NOTE 4 – INVENTORIES
The Company’s inventory is carried at the lower of cost or net realizable value using the first-in, first-out (“FIFO”) method. The Company evaluates the need to record adjustments for inventory on a regular basis. Company policy is to evaluate all inventories including components and finished goods for all of its product offerings across all of the Company’s operating subsidiaries.
The Company recognizes an allowance for obsolescence for expiring, excess, and slow-moving inventory. To calculate the allowance, the Company analyzes sales projections for each stock-keeping unit (“SKU”) relative to the remaining shelf life of the product. The value of any finished goods inventory projected to expire prior to sale is included in the allowance.
The total allowance for expiring, excess and slow-moving inventory items as of June 30, 2026 and December 31, 2025 amounted to $
| June 30, 2026 |
December 31, 2025 |
|||||||
|
(Unaudited) |
||||||||
|
Finished goods |
$ | $ | ||||||
|
Components |
||||||||
|
Allowance for obsolescence |
( |
) |
( |
) |
||||
|
Total |
$ | $ | ||||||
NOTE 5 - PROPERTY AND EQUIPMENT
The Company had property and equipment as of June 30, 2026 and December 31, 2025 as follows:
| June 30, 2026 |
December 31, 2025 |
|||||||
|
(Unaudited) |
||||||||
|
Equipment |
$ | $ | ||||||
|
Accumulated depreciation |
( |
) |
( |
) |
||||
|
Total |
$ | $ | ||||||
Depreciation expense for the three months ended June 30, 2026 and 2025 was $
NOTE 6 – DEBT
Company debt consisted of the following as of June 30, 2026 and December 31, 2025:
|
June 30, 2026 |
December 31, 2025 |
|||||||
|
Term loan – 2025 Credit Agreement |
$ | $ | ||||||
|
Unamortized debt issuance costs |
( |
) | ( |
) | ||||
|
Revolving line of credit |
||||||||
|
Total |
||||||||
|
Current portion of term loan |
( |
) | ( |
) | ||||
|
Long-term debt |
$ | $ | ||||||
Credit Agreements – First Citizens Bank
On February 23, 2023, the Company entered into an Amended and Restated Credit Agreement (the “2023 Credit Agreement”) with First Citizens Bank, amending and restating that certain Credit Agreement, dated September 24, 2019, between the Company and the Bank. Pursuant to the 2023 Credit Agreement, the Bank provided the Company with a term loan for the principal amount of $
Second Amended and Restated Credit Agreement
On October 10, 2023, the Company entered into a Second Amended and Restated Credit Agreement (the “Prior Credit Agreement”) with the Bank, amending and restating the 2023 Credit Agreement between the Company and the Bank. Pursuant to the Prior Credit Agreement, the Bank provided the Company with an additional term loan (“Term Loan B”, and together with Term Loan A, the “Term Loans”) for the principal amount of $
First Amendment to Second Amended and Restated Credit Agreement
On December 19, 2024, the Company entered into the First Amendment to the Prior Credit Agreement (the “Amended Prior Credit Agreement”) to extend the Line of Credit to April 30, 2026.
Term Loans A and B – Pursuant to the Amended Prior Credit Agreement, the Term Loans accrued interest at a per annum rate equal to the greater of
Line of Credit – Also pursuant to the Amended Prior Credit Agreement, outstanding advances under the Line of Credit (“Advances”) accrued interest at a per annum rate equal to the greater of
Current Credit Agreement
On August 8, 2025 (the “Closing Date”), the Company entered into a Loan, Security and Guarantee Agreement (the “Credit Agreement”) with the Bank. Pursuant to the Credit Agreement, the Bank provided the Company with a -year term loan in the amount of $
Pursuant to the Credit Agreement the Loan accrues interest at a per annum rate equal to
Outstanding advances under the revolving line of credit will accrue interest at the Applicable Rate, and the Company shall make payments of accrued interest on such advances at the end of each interest period and on the repayment of any advance with all remaining principal and accrued interest on the advances being due and payable in full on August 8, 2028.
The Credit Agreement contains customary affirmative and negative covenants, including, without limitation, financial covenants: (i) to maintain a Senior Funded Debt to EBITDA Ratio (as defined in the Credit Agreement) of not more than
To secure satisfaction of the Obligations, pursuant to the Credit Agreement, (i) NDS Nutrition Products, Inc., iSatori, Inc., MP Acquisition Corp., and IN Acquisition Corp. (collectively, the “Subsidiaries”) guaranteed the satisfaction of the Obligations by the Company in favor of the Bank and (ii) each of the Subsidiaries and the Company granted a security interest in substantially all of their respective assets in favor of the Bank.
The borrowings outstanding on the Irwin Term Loan were $
The borrowings outstanding on the Credit Line were $
As of June 30, 2026, the amount available to borrow on the Credit Line was $
Maturities of the Company's Irwin Term Loan are as follows:
|
Year ending |
||||
|
2026 |
$ | |||
|
2027 |
||||
|
2028 |
||||
|
2029 |
||||
|
2030 |
||||
|
Total balance outstanding as of June 30, 2026 |
$ |
NOTE 7 - EQUITY
The Company is authorized to issue
Share Repurchase Program
On May 13, 2025, the Board approved the extension of the Company’s previously authorized share repurchase program, initially approved by the Board on August 16, 2019, as amended on September 23, 2019, November 6, 2019, February 1, 2021 and March 17, 2023 (“Share Repurchase Program”). Under the extended and amended Share Repurchase Program, the Board authorized management to repurchase up to $
During the three and six months ended June 30, 2026 and 2025, the Company did repurchase any Common Stock under its share repurchase programs. As of June 30, 2026, the Company retained authorization to purchase $
Options
Information regarding options outstanding as of June 30, 2026 is as follows:
|
Number of |
Weighted average |
Weighted average remaining life |
||||||||||
|
options |
exercise price |
(years) |
||||||||||
|
Outstanding, December 31, 2024 |
||||||||||||
|
Issued |
||||||||||||
|
Exercised |
( |
) | ||||||||||
|
Forfeited |
||||||||||||
|
Outstanding, December 31, 2025 |
$ | |||||||||||
|
Issued |
||||||||||||
|
Exercised |
||||||||||||
|
Forfeited |
||||||||||||
|
Outstanding, June 30, 2026 |
$ | |||||||||||
|
Outstanding |
Exercisable |
||||||||||||||||||||||
|
Exercise price per share |
Total number of options |
Weighted average remaining life (years) |
Weighted average exercise price |
Number of vested options |
Weighted average exercise price |
||||||||||||||||||
| $ |
- |
$ |
$ |
||||||||||||||||||||
| $ |
- |
$ |
$ |
||||||||||||||||||||
|
$ |
$ |
||||||||||||||||||||||
The closing stock price for the Company’s Common Stock on June 30, 2026 was $
During the six months ended June 30, 2026, the Company granted stock options to purchase
During the three-month periods ended June 30, 2026 and 2025, the Company recognized stock-based compensation of $
During the six months ended June 30, 2025,
Performance Stock Units
In May 2025, the Company granted Mr. Ryan Hansen, President,
The Company recorded $
Warrants
The Company issued warrants to purchase shares of Common Stock during three and six months ended June 30, 2026 and 2025. There are outstanding warrants to purchase shares of Common Stock as of June 30, 2026 and December 31, 2025.
NOTE 8. ACQUISITION OF IRWIN NATURALS
On August 8, 2025 (“the Closing Date”), the Company acquired substantially all of the assets and assumed certain liabilities of Irwin through an asset purchase transaction under Section 363 of the US Bankruptcy Code. Total consideration for the acquisition was $
During the six months ended June 30, 2026, the Company did not incur any transaction-related costs for the acquisition of Irwin.
The Company accounted for the acquisition as a business combination under Accounting Standards Codification (“ASC”) 805, Business Combinations. The following table summarizes the fair value of the assets acquired and liabilities assumed on the date of acquisition, and is as follows:
|
August 8, 2025 |
||||
|
Accounts receivable |
$ | |||
|
Inventories |
||||
|
Prepaid expense and other current assets |
||||
|
Right of use asset |
||||
|
Property and equipment |
||||
|
Intangible assets |
||||
|
Goodwill |
||||
|
Other non-current assets |
||||
|
Accounts payable and accrued expense |
( |
) | ||
|
Accrued expense and other current liabilities |
( |
) | ||
|
Product returns |
( |
) | ||
|
Lease liabilities |
( |
) | ||
|
Net assets acquired |
$ | |||
The purchase was intended to augment and diversify the Company’s product offerings and lineup. Key factors that contributed to the recorded intangible assets and goodwill were the opportunity to complement existing operations of the Company and the opportunity to generate future synergies within the nutritional supplement and wellness business.
Pro Forma Condensed Combined Financial Information (Unaudited) (In thousands)
The following presents the Company’s unaudited pro forma financial information for the three and six months ended June 30, 2025, giving effect to the acquisition of Irwin as if it had occurred at January 1, 2025. Included in the pro forma information is: removal of Irwin revenue and cost of sales from the three and six months ended June 30, 2025 for Irwin business no longer in place as of the closing date (Costco US) as well as removal of CBD revenue due to the Company’s decision to exit the CBD business, fair value adjustment to inventory acquired, transaction-related costs related to the acquisition of Irwin moved from the three and six months ended June 30, 2025 to 2024, removal of the interest costs from the Company’s debt prior to the closing of the acquisition, and interest on borrowings made by the Company based on the projected balance of the Irwin Term Loan and revolving line of credit for the respective periods in this pro forma presentation.
| Three months ended June 30, 2025 |
Six months ended June 30, 2025 |
|||||||
|
Revenue |
$ | $ | ||||||
|
Net income |
$ | $ | ||||||
|
Diluted net income per share |
$ | $ | ||||||
The pro forma adjustments do not reflect adjustments for anticipated operating efficiencies that the Company expects to achieve as a result of this acquisition. The pro forma financial information is for informational purposes only and does not purport to present what the Company’s results would actually have been had the transaction actually occurred on the dates presented or to project the combined Company’s results of operations or financial position for any future period.
Irwin revenue for the three and six months ended June 30, 2026 was $
NOTE 9 – COMMITMENTS AND CONTINGENCIES
We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of the Company or any of its subsidiaries, threatened against or affecting the Company, our Common Stock, any of our subsidiaries or of the Company’s or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.
NOTE 10 – SEGMENT INFORMATION
The Company operates and manages its business as reportable operating segment dedicated to providing innovative and proprietary nutritional supplements and wellness products for health-conscious consumers. The measure of segment assets is reported on the condensed consolidated balance sheet as total assets. In addition, the Company manages its business activities on a consolidated basis.
The Company’s CODM allocates resources and assesses financial performance based upon financial data presented at the consolidated level. The CODM uses net income as the sole measure of segment profit.
Significant segment expense categories include cost of goods sold, advertising and marketing, merger and acquisition related and other expense, which are all presented on the condensed consolidated statements of income and comprehensive income. Employee compensation and benefits is also a significant segment expense. Operating expense includes all remaining costs necessary to operate our business, including external professional services, insurance and other administrative expenses. The following table presents the significant segment expenses and other segment items regularly reviewed by our CODM:
|
Three months ended June 30, |
Six months ended June 30, |
|||||||||||||||
|
2026 |
2025 |
2026 |
2025 |
|||||||||||||
|
Cost of goods sold |
$ | $ | $ | $ | ||||||||||||
|
Employee compensation and benefits |
||||||||||||||||
|
Advertising and marketing |
||||||||||||||||
|
Operating expense |
||||||||||||||||
|
Merger and acquisition related |
||||||||||||||||
|
Total operating expense |
$ | $ | $ | $ | ||||||||||||
|
Interest and other expense |
$ | $ | $ | $ | ||||||||||||
The following table summarizes sales to customers by geographic regions:
|
Three months ended June 30, |
Six months ended June 30, |
|||||||||||||||
|
2026 |
2025 |
2026 |
2025 |
|||||||||||||
|
United States |
$ | $ | $ | $ | ||||||||||||
|
Rest of world |
||||||||||||||||
|
Total revenue |
$ | $ | $ | $ | ||||||||||||
NOTE 11 – DERIVATIVE ASSET (INTEREST RATE SWAP)
On September 5, 2025, the Company entered into an interest rate swap agreement to hedge exposure to variability in cash flows associated with its variable-rate term loan (Note 6). The swap effectively converts approximately
The agreement had a notional amount of $
The Company designated the swap as a cash flow hedge under ASC 815, Derivatives and Hedging. The effective portion of changes in the fair value of the derivative is recorded in Other Comprehensive Income and reclassified into interest expense as payments occur under the hedged debt. Any ineffective portion is recognized in current period earnings.
The fair value of the swap was an asset of $
NOTE 12 – SUBSEQUENT EVENTS
The Company evaluated subsequent events for their potential impact on the condensed consolidated financial statements and disclosures through the date the condensed consolidated financial statements were issued and determined that no subsequent events occurred that were reasonably expected to impact the condensed consolidated financial statements presented herein.
|
ITEM 2. |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes appearing elsewhere in this Quarterly Report on Form 10-Q (this "Quarterly Report"). This discussion and analysis may contain forward-looking statements based on assumptions about our future business. Unless otherwise stated, all dollar amounts are in thousands, except per share data.
Overview
FitLife Brands, Inc. (the “Company”) is a provider of innovative and proprietary nutritional supplements and wellness products for health-conscious consumers marketed under the following brand names: (i) NDS Nutrition, PMD Sports, SirenLabs, Core Active, Nutrology, and Metis Nutrition (together, the “NDS Products”); (ii) iSatori, BioGenetic Laboratories, and Energize (together, the "iSatori Products"); (iii) Dr. Tobias, All Natural Advice, and Maritime Naturals (together, the “MRC Products"); (iv) MusclePharm; and (v) Irwin Naturals, Applied Nutrition, and Nature’s Secret (together, the “Irwin Products”).
The Company distributes the NDS Products principally through franchised General Nutrition Centers, Inc. (“GNC”) stores located both domestically and internationally. The iSatori Products are sold through retail locations, which include specialty and mass market retailers, as well as online directly to the end consumer. The Company distributes the MRC Products primarily online through e-commerce platforms, such as Amazon.com (“Amazon”), directly to the end consumer. MusclePharm’s products are sold to both wholesale customers as well as online through various e-commerce platforms directly to the end consumer. Irwin Products are sold principally through wholesale channels in mass market and health food store segments, but also online directly to the end consumer.
FitLife Brands is headquartered in Omaha, Nebraska. For more information on the Company, please go to www.fitlifebrands.com. The Company’s common stock, par value $0.01 per share (“Common Stock”), trades under the symbol “FTLF” on the Nasdaq Capital Market.
Recent Developments
Acquisition of Irwin Naturals
On August 8, 2025, the Company acquired substantially all of the assets and assumed certain liabilities of Irwin Naturals and its related affiliates (“Irwin”) through an asset purchase transaction under Section 363 of the U.S. Bankruptcy Code. Total consideration for the acquisition was $42.5 million. Of this amount, $29.75 million was funded using proceeds from a new term loan provided by First-Citizens Bank & Trust Company (the “Bank”), $6.0 million was funded from a new $10.0 million revolving line of credit from the Bank, and the remainder was funded from the Company’s available cash balances.
Stock Split
On February 7, 2025, the Company effected a 2-for-1 stock split of its Common Stock and proportionately increased the number of authorized shares of Common Stock. The shares of Common Stock retain a par value of $0.01 per share. Accordingly, an amount equal to the par value of the additional shares issued in the stock split was reclassified from additional paid-in capital in excess of par value to Common Stock.
Results of Operations
Comparison of the three months ended June 30, 2026 to the three months ended June 30, 2025
|
Three months ended |
||||||||||||||||
|
June 30, 2026 |
June 30, 2025 |
Change ($) |
Change (%) |
|||||||||||||
|
(Unaudited) |
||||||||||||||||
|
Revenue |
$ | 26,549 | $ | 16,127 | $ | 10,422 | 65 | % | ||||||||
|
Cost of goods sold |
16,738 | 9,223 | 7,515 | 81 | % | |||||||||||
|
Gross profit |
9,811 | 6,904 | 2,907 | 42 | % | |||||||||||
|
Gross margin |
37.0 | % | 42.8 | % | (5.8 | )% | ||||||||||
|
Advertising and marketing |
1,449 | 1,191 | 258 | 22 | % | |||||||||||
|
Selling. general and administrative (“SG&A”) |
4,755 | 2,485 | 2,270 | 91 | % | |||||||||||
|
Merger and acquisition related |
- | 696 | (696 | ) | (100 | )% | ||||||||||
|
Depreciation and amortization |
252 | 14 | 238 |
n/m |
||||||||||||
|
Total operating expense |
6,456 | 4,386 | 2,070 | 47 | % | |||||||||||
|
Operating income |
3,355 | 2,518 | 837 | 33 | % | |||||||||||
|
Other expense (income), net |
671 | 140 | 531 | 379 | % | |||||||||||
|
Provision for income tax |
734 | 631 | 103 | 16 | % | |||||||||||
|
Net income |
$ | 1,950 | $ | 1,747 | $ | 203 | 12 | % | ||||||||
Revenue. Revenue for the three months ended June 30, 2026 increased 65% to $26,549 compared to $16,127 for the three months ended June 30, 2025. The increase in revenue for the three months ended June 30, 2026 compared to the prior period is primarily due to the acquisition of Irwin, partially offset by declining revenue from Legacy FitLife, as discussed below. The Irwin assets were acquired on August 8, 2025.
Legacy FitLife revenue for the three months ended June 30, 2026 was $12,414, a 23% decrease compared to the previous year, driven by a 19% decline in online revenue primarily attributable to MRC as well as a 31% decrease in wholesale revenue attributable to lower sales to certain retail partners, primarily GNC.
Wholesale revenue during the quarter ended June 30, 2026 was approximately 55% of net revenue, compared to 45% for online channels. Wholesale revenue during the quarter ended June 30, 2025 was 34% of net revenue compared to 66% for online channels during the same period. The decline in the percentage of revenue coming from online sales is primarily due to the acquisition of Irwin, which had minimal online revenue at the time of the acquisition.
Sales to customers in the U.S. were approximately 95% and 96% during the quarters ended June 30, 2026 and 2025, respectively, with the balance of sales to customers primarily in Canada.
Cost of Goods Sold. Cost of goods sold for the three months ended June 30, 2026 increased to $16,738 as compared to $9,223 for the three months ended June 30, 2025. This 81% increase is primarily due to the increase in revenue from the acquisition of Irwin.
Gross Profit. Gross profit for the three months ended June 30, 2026 increased to $9,811 as compared to $6,904 for the three months ended June 30, 2025. This 42% increase in gross profit is principally attributable to the acquisition of Irwin, partially offset by lower gross profit from Legacy FitLife.
Gross Margin. Gross margin for the three months ended June 30, 2026 decreased to 37.0% from 42.8% for the comparable prior period. The decrease in gross margin is primarily attributable to the acquisition of Irwin, which historically generated a lower gross margin than FitLife.
Advertising and Marketing. Advertising and marketing expense for the three months ended June 30, 2026 increased to $1,449 as compared to $1,191 for the same period of the prior year. The 22% increase is primarily the result of advertising and marketing expense attributable to Irwin, partially offset by lower advertising and marketing expense attributable to Legacy FitLife.
SG&A. SG&A expense for the three months ended June 30, 2026 increased 91% to $4,755 as compared to $2,485 for the three months ended June 30, 2025. The 91% increase in SG&A is primarily due to the acquisition of Irwin.
Merger and Acquisition Related. Merger and acquisition related expense decreased by $696 during the quarter ended June 30, 2026 compared to $696 for the same period in 2025, driven by non-recurring transaction costs related to the Irwin acquisition during 2025.
Net Income. We generated net income of $1,950 for the three months ended June 30, 2026 as compared to net income of $1,747 for the three months ended June 30, 2025. The increase in net income for the three months ended June 30, 2026 compared to the same period in 2025 was primarily attributable to the acquisition of Irwin, partially offset by lower gross profit attributable to Legacy FitLife.
Comparison of the six months ended June 30, 2026 to the six months ended June 30, 2025
|
Six months ended |
||||||||||||||||
|
June 30, 2026 |
June 30, 2025 |
Change ($) |
Change (%) |
|||||||||||||
|
(Unaudited) |
||||||||||||||||
|
Revenue |
$ | 51,874 | $ | 32,063 | $ | 19,811 | 62 | % | ||||||||
|
Cost of goods sold |
32,546 | 18,285 | 14,261 | 78 | % | |||||||||||
|
Gross profit |
19,328 | 13,778 | 5,550 | 40 | % | |||||||||||
|
Gross margin |
37.3 | % | 43.0 | % | (5.7 | )% | ||||||||||
|
Advertising and marketing |
2,694 | 2,244 | 450 | 20 | % | |||||||||||
|
Selling. general and administrative (“SG&A”) |
9,718 | 4,997 | 4,721 | 94 | % | |||||||||||
|
Merger and acquisition related |
- | 1,028 | (1,028 | ) | (100 | )% | ||||||||||
|
Depreciation and amortization |
500 | 33 | 467 |
n/m |
||||||||||||
|
Total operating expense |
12,912 | 8,302 | 4,610 | 56 | % | |||||||||||
|
Operating income |
6,416 | 5,476 | 940 | 17 | % | |||||||||||
|
Other expense (income), net |
1,385 | 379 | 1,006 | 265 | % | |||||||||||
|
Provision for income tax |
1,361 | 1,332 | 29 | 2 | % | |||||||||||
|
Net income |
$ | 3,670 | $ | 3,765 | $ | (95 | ) | (3 | )% | |||||||
Revenue. Revenue for the six months ended June 30, 2026 increased 62% to $51,874 compared to $32,063 for the six months ended June 30, 2025. The increase in revenue for the six months ended June 30, 2026 compared to the prior period is primarily due to the acquisition of Irwin, partially offset by declining revenue from Legacy FitLife, as discussed below. The Irwin assets were acquired on August 8, 2025.
Legacy FitLife revenue for the six months ended June 30, 2026 was $24,890, a 22% decrease compared to the previous year, driven by an 18% decline in online revenue primarily attributable to MRC as well as a 30% decrease in wholesale revenue attributable to lower sales to certain retail partners, primarily GNC.
Wholesale revenue during the six months ended June 30, 2026 was approximately 55% of net revenue, compared to 45% for online channels for the same period in 2026. Wholesale revenue during the six months ended June 30, 2025 was 34% of net revenue compared to 66% for online channels during the same period. The decline in the percentage of revenue coming from online sales is primarily due to the acquisition of Irwin, which had minimal online revenue at the time of the acquisition.
Sales to customers in the U.S. were approximately 95% and 96% during the six months ended June 30, 2026 and 2025, respectively, with the balance of sales to customers primarily in Canada.
Cost of Goods Sold. Cost of goods sold for the six months ended June 30, 2026 increased to $32,546 as compared to $18,285 for the six months ended June 30, 2025. This 78% increase is primarily due to the increase in revenue from the acquisition of Irwin.
Gross Profit. Gross profit for the six months ended June 30, 2026 increased to $19,328 as compared to $13,778 for the six months ended June 30, 2025. This 40% increase in gross profit is principally attributable to the acquisition of Irwin, partially offset by lower gross profit from Legacy FitLife.
Gross Margin. Gross margin for the six months ended June 30, 2026 decreased to 37.3% from 43.0% for the comparable prior period. The decrease in gross margin is primarily attributable to the acquisition of Irwin, which historically generated a lower gross margin than FitLife.
Advertising and Marketing. Advertising and marketing expense for the six months ended June 30, 2026 increased to $2,694 as compared to $2,244 for the same period of the prior year. The 20% increase is primarily the result of advertising and marketing expense attributable to Irwin, partially offset by lower advertising and marketing expense attributable to Legacy FitLife.
SG&A. SG&A expense for the six months ended June 30, 2026 increased 94% to $9,718 as compared to $4,997 for the six months ended June 30, 2025. The increase in SG&A is primarily due to the acquisition of Irwin.
Merger and Acquisition Related. Merger and acquisition related expense decreased by $1,028 during the six months ended June 30, 2026 compared to $1,028 for the same period in 2025, driven by non-recurring transaction costs related to the Irwin acquisition during 2025.
Net Income. We generated net income of $3,670 for the six months ended June 30, 2026 as compared to net income of $3,765 for the six months ended June 30, 2025. Net income for the six months ended June 30, 2026 compared to the same period in 2025 declined by 3%, with the acquisition of Irwin being offset by lower gross profit attributable to Legacy FitLife.
Supplemental Discussion of Performance of Acquired Brands
One of the primary metrics used by management to evaluate the performance of the Company’s brands is contribution, a non-GAAP financial measure which management defines as gross profit less advertising and marketing expenditures. Other companies may also report contribution as a performance metric, but their definition or calculation of contribution may differ from the Company’s. Management believes that contribution, as defined by the Company, is a particularly relevant performance metric since it incorporates the gross profit associated with a specific brand or collection of brands as well as the advertising and marketing expense associated with the same brand or brands. With limited exceptions, other operating expense incurred by the Company is generally not allocable to a specific brand or collection of brands. Management intends to provide this level of disclosure for approximately two years following a transaction, after which the performance of acquired brands will be reported as part of Legacy FitLife results.
Other than for Irwin Products, the numbers in the contribution tables presented below represent the performance of a collection of brands. Legacy FitLife consists of thirteen brands. These collections of brands do not meet the definition of operating segments and are not managed as such.
|
Legacy FitLife |
||||||||||||||||||||
|
(Unaudited) |
2025 |
2026 |
||||||||||||||||||
|
Q2 |
Q3 |
Q4 |
Q1 |
Q2 |
||||||||||||||||
|
Wholesale revenue |
$ | 5,696 | $ | 6,686 | $ | 4,238 | $ | 3,798 | $ | 3,913 | ||||||||||
|
Online revenue |
10,431 | 9,978 | 9,028 | 8,678 | 8,501 | |||||||||||||||
|
Total revenue |
16,127 | 16,664 | 13,266 | 12,476 | 12,414 | |||||||||||||||
|
Gross profit |
6,904 | 6,542 | 5,395 | 5,143 | 5,177 | |||||||||||||||
|
Gross margin |
42.8 | % | 39.3 | % | 40.7 | % | 41.2 | % | 41.7 | % | ||||||||||
|
Advertising and marketing |
1,191 | 1,285 | 1,077 | 887 | 941 | |||||||||||||||
|
Contribution |
$ | 5,713 | $ | 5,257 | $ | 4,318 | $ | 4,256 | $ | 4,236 | ||||||||||
|
Contribution as a % of revenue |
35.4 | % | 31.5 | % | 32.5 | % | 34.1 | % | 34.1 | % | ||||||||||
For the second quarter of 2026, revenue for Legacy FitLife (which includes MusclePharm and MRC) declined 23% compared to the same period last year due to declines in both online and wholesale revenue.
Online revenue decreased by 19% compared to the second quarter of last year, primarily driven by lower online sales from MRC. Wholesale revenue decreased 31% compared to the second quarter of last year attributable to lower sales to certain retail partners, primarily GNC.
Gross margin for Legacy FitLife decreased to 41.7% during the second quarter of 2026, compared to 42.8% during the second quarter of last year. Contribution as a percentage of revenue decreased to 34.1% compared to 35.4% during the second quarter of last year.
|
Irwin Naturals |
||||||||||||||||
|
(Unaudited) |
2025 |
2026 |
||||||||||||||
|
Q3 |
Q4 |
Q1 |
Q2 |
|||||||||||||
|
Wholesale revenue |
$ | 6,510 | $ | 11,216 | $ | 10,295 | $ | 10,695 | ||||||||
|
Online revenue |
311 | 1,428 | 2,554 | 3,440 | ||||||||||||
|
Total revenue |
6,821 | 12,644 | 12,849 | 14,135 | ||||||||||||
|
Gross profit |
2,194 | 3,544 | 4,374 | 4,634 | ||||||||||||
|
Gross margin |
32.2 | % | 28.0 | % | 34.0 | % | 32.8 | % | ||||||||
|
Advertising and marketing |
72 | 182 | 358 | 508 | ||||||||||||
|
Contribution |
$ | 2,122 | $ | 3,362 | $ | 4,016 | $ | 4,126 | ||||||||
|
Contribution as a % of revenue |
31.1 | % | 26.6 | % | 31.3 | % | 29.2 | % | ||||||||
During the second quarter of 2026, Irwin generated 76% of its revenue from the wholesale channel and 24% from online sales.
Online revenue during the second quarter of 2026 represents transactions through Irwin’s websites as well as through Amazon and other e-commerce platforms. The Company began selling Irwin products on Amazon in mid-October of 2025, and sales have continued to increase since launch in October to an annual revenue run rate of approximately $11 million by the end of the second quarter of 2026.
Total revenue for Irwin increased 10% sequentially in the second quarter of 2026 compared to the first quarter of 2026, primarily due to continued online revenue growth. Irwin generated gross margin of 32.8% and contribution as a percentage of revenue of 29.2% during the second quarter of 2026.
|
FitLife Consolidated |
||||||||||||||||||||
|
(Unaudited) |
2025 |
2026 |
||||||||||||||||||
|
Q2 |
Q3 |
Q4 |
Q1 |
Q2 |
||||||||||||||||
|
Wholesale revenue |
$ | 5,696 | $ | 13,196 | $ | 15,454 | $ | 14,093 | $ | 14,608 | ||||||||||
|
Online revenue |
10,431 | 10,289 | 10,456 | 11,232 | 11,941 | |||||||||||||||
|
Total revenue |
16,127 | 23,485 | 25,910 | 25,325 | 26,549 | |||||||||||||||
|
Gross profit |
6,904 | 8,736 | 8,939 | 9,517 | 9,811 | |||||||||||||||
|
Gross margin |
42.8 | % | 37.2 | % | 34.5 | % | 37.6 | % | 37.0 | % | ||||||||||
|
Advertising and marketing |
1,191 | 1,357 | 1,259 | 1,245 | 1,449 | |||||||||||||||
|
Contribution |
$ | 5,713 | $ | 7,379 | $ | 7,680 | $ | 8,272 | $ | 8,362 | ||||||||||
|
Contribution as a % of revenue |
35.4 | % | 31.4 | % | 29.6 | % | 32.7 | % | 31.5 | % | ||||||||||
For the second quarter of 2026 for the Company overall, revenue increased 65%, gross profit increased 42%, and contribution increased 46% compared to the second quarter of 2025.
Gross margin decreased to 37.0% during the second quarter of 2026 compared to 42.8% during the second quarter of last year, with the decline in gross margin primarily attributable to the acquisition of Irwin, which historically operated at a lower gross margin than Legacy FitLife.
Contribution as a percentage of revenue for the second quarter of 2026 decreased to 31.5% compared to 35.4% during the second quarter of last year.
Non-GAAP Measures
The financial presentation below contains certain financial measures not in accordance with GAAP, defined by the SEC as “non-GAAP financial measures”, including EBITDA and adjusted EBITDA. These measures may be different from non-GAAP financial measures used by other companies. The presentation of this financial information, which is not prepared under any comprehensive set of accounting rules or principles, is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in this Quarterly Report in accordance with GAAP.
As presented below, EBITDA excludes interest, foreign exchange gains and losses, income taxes, and depreciation and amortization. Adjusted EBITDA excludes—in addition to interest, foreign exchange losses, taxes, depreciation and amortization—stock-based compensation, merger and acquisition related expense and other non-recurring items. The Company believes the non-GAAP measures provide useful information to both management and investors by excluding certain expense and other items that may not be indicative of its core operating results and business outlook. The Company believes that the inclusion of non-GAAP measures in the financial presentation below allows investors to compare the Company’s financial results with the Company’s historical financial results and is an important measure of the Company’s comparative financial performance.
|
For the three months ended June 30, |
For the six months ended June 30, |
|||||||||||||||
|
2026 |
2025 |
2026 |
2025 |
|||||||||||||
|
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
|||||||||||||
|
Net income |
$ | 1,950 | $ | 1,747 | $ | 3,670 | $ | 3,765 | ||||||||
|
Interest expense, net |
679 | 175 | 1,414 | 393 | ||||||||||||
|
Foreign exchange gain |
(8 | ) | (35 | ) | (29 | ) | (14 | ) | ||||||||
|
Provision for income taxes |
734 | 631 | 1,361 | 1,332 | ||||||||||||
|
Depreciation and amortization |
252 | 14 | 500 | 33 | ||||||||||||
|
EBITDA |
3,607 | 2,532 | 6,916 | 5,509 | ||||||||||||
|
Non-cash and non-recurring adjustments |
||||||||||||||||
|
Stock-based compensation |
58 | 99 | 75 | 206 | ||||||||||||
|
Merger and acquisition related |
- | 696 | - | 1,028 | ||||||||||||
|
Adjusted EBITDA |
$ | 3,665 | $ | 3,327 | $ | 6,991 | $ | 6,743 | ||||||||
Liquidity and Capital Resources
As of June 30, 2026, the Company had positive working capital of $9,637, compared to $11,459 at December 31, 2025. Our principal sources of liquidity at June 30, 2026 consisted of $1,089 of cash and $6,977 of accounts receivable. The decrease in working capital is principally attributable to lower accounts receivable balances as of June 30, 2026 as compared to December 31, 2025.
On September 24, 2019, the Company entered into a line of credit agreement with Mutual of Omaha Bank (the “Lender”), subsequently acquired by CIT Bank N.A., then acquired by First Citizens Bank & Trust Company, providing the Company with a $2.5 million revolving line of credit (the “Line of Credit”). The Line of Credit allowed the Company to request advances thereunder and to use the proceeds of such advances for working capital purposes until the maturity date, or unless renewed at maturity upon approval by the Company’s Board and the Lender. The Line of Credit was secured by all assets of the Company.
On September 20, 2022, the Company and the Lender amended the Line of Credit Agreement to extend the maturity date to December 23, 2022. On December 19, 2022, the Company and the Lender amended the Line of Credit agreement to increase the Line of Credit to $3.5 million and extend the maturity date to December 23, 2023.
On February 23, 2023, the Company and the Lender amended the Line of Credit Agreement (the “2023 Credit Agreement”) providing the Company with a term loan for the principal amount of $12.5 million (“Term Loan A”). All other terms of the Credit Agreement remain unchanged. All of the proceeds from Term Loan A were used for the acquisition of MRC.
On October 10, 2023, the Company entered into a Second Amended and Restated Credit Agreement (the “Prior Credit Agreement”) with the Lender, amending and restating the 2023 Credit Agreement between the Company and the Lender. Pursuant to the Prior Credit Agreement, the Lender provided the Company with an additional term loan (“Term Loan B”, and together with Term Loan A, the “Term Loans”) for the principal amount of $10,000 and extended the maturity date of the Line of Credit of $3.5 million to December 23, 2024. The Company used the proceeds from Term Loan B to fund the acquisition of the MusclePharm assets.
On December 19, 2024, the Company entered into the First Amendment to the Prior Credit Agreement (the “Amended Prior Credit Agreement”) to extend the maturity date of the $3.5 million Line of Credit to April 30, 2026. Pursuant to the Amended Prior Credit Agreement, the Line of Credit accrued interest at an annual rate equal to the greater of 3.50% or the one-month secured overnight financing rate (“SOFR”) rate plus 2.75%, and each advance was payable on the maturity date with the interest on outstanding advances payable monthly. The Company was permitted, at its option, to prepay any borrowings under the Line of Credit, in whole or in part at any time prior to the maturity date, without premium or penalty.
On August 8, 2025 (the “Closing Date”), the Company entered into a new credit agreement (the “Credit Agreement”) with First-Citizens Bank & Trust Company (the “Bank”). Pursuant to the Credit Agreement, the Bank provided the Company with a five-year term loan in the amount of $40,625 (the “Irwin Term Loan”) and a three-year revolving line of credit of up to $10,000 (the “Credit Line”, and collectively with the Irwin Term Loan, the “Loan”). The Company used $29,750 from the Irwin Term Loan to complete the purchase of substantially all of the assets of Irwin, and its related affiliates, pursuant to an Asset Purchase and Sale Agreement, and $10,875 to pay off, retire and replace all existing debt of the Company as of the Closing Date.
Pursuant to the Credit Agreement, the Irwin Term Loan accrues interest at a per annum rate equal to 2.50% to 3.00%, based on leverage, above the secured overnight financing rate published by the Federal Reserve Bank of New York for the applicable selected interest period of one, three or six months (“Term SOFR Rate”, the Term SOFR Rate together with the aforementioned margin, the “Applicable Rate”). The Company shall make payments of accrued interest on the Irwin Term Loan at the end of each interest period and shall make payments on March 31, June 30, September 30 and December 31, of each calendar year. The Company began making quarterly payments of principal plus accrued interest on the Irwin Term Loan on December 31, 2025. Principal payments of $1,523 will be made quarterly through September 30, 2027, and each quarterly payment thereafter will be $2,031, in each case plus accrued interest. All remaining principal and accrued interest on the Irwin Term Loan will be due and payable in full on August 8, 2030.
Outstanding advances under the Credit Line (“Advances”) will accrue interest at the Applicable Rate, and the Company shall make payments of accrued interest on Advances at the end of each interest period and on the repayment of any Advance, with all remaining principal and accrued interest on the Advances being due and payable in full on August 8, 2028.
The Credit Agreement contains customary covenants to maintain a Senior Funded Debt to EBITDA Ratio (as defined in the Credit Agreement) of not more than 2.75 to 1.00 as tested quarterly on a trailing twelve-month basis, starting with the fiscal quarter ending December 31, 2025 and ending with the fiscal quarter ended June 30, 2026, and a Senior Funded Debt to EBITDA Ratio (as defined in the Credit Agreement) of not more than 2.50 to 1.00 as tested quarterly on a trailing twelve-month basis, starting with the fiscal quarter ending September 30, 2026, and to maintain a Fixed Charge Coverage Ratio (as defined in the Credit Agreement) of at least 1.25 to 1.00 as tested on the last day of each fiscal quarter, commencing with the quarter ending December 31, 2025.
As of June 30, 2026, the borrowings outstanding on the Irwin Term Loan and the Credit Line were $36,055 and $2,000, respectively, and $8,000 was available to borrow on the Credit Line.
The Company has historically financed its operations primarily through cash flow from operations and equity and debt financings. The Company currently anticipates that cash derived from operations and existing cash reserves, along with available borrowings under the Line of Credit, will be sufficient to provide for the Company’s liquidity for the next twelve months. The Company’s material cash requirements over this period consist primarily of scheduled principal and interest payments under the Credit Agreement and working capital needs.
Cash Provided by Operating Activities. Cash provided by operating activities for the six months ended June 30, 2026 was $6,119 compared to cash provided by operating activities of $3,523 for the six months ended June 30, 2025. The increase in cash provided by operating activities was primarily due to working capital fluctuations compared to the same period of 2025.
Cash Used in Investing Activities. Cash used in investing activities for the six months ended June 30, 2026 and 2025 was $0 and $5,029, respectively. The decrease in cash used in investing activities was primarily due to the deposit towards the Irwin acquisition that occurred during the six months ended June 30, 2025.
Cash Used in Financing Activities. Cash used in financing activities for the six months ended June 30, 2026 was $6,647 compared to $1,568 during the six months ended June 30, 2025. The increase in cash used in financing activities was primarily due to higher repayment of debt.
Critical Accounting Policies and Estimates
Our discussion and analysis of financial condition and results of operations is based upon our condensed consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these condensed consolidated financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, expense, and related disclosure of contingent assets and liabilities. We evaluate, on an on-going basis, our estimates and judgments, including those related to the useful life of the assets. We base our estimates on historical experience and assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.
The methods, estimates and judgments we use in applying our most critical accounting policies have a significant impact on the results that we report in our condensed consolidated financial statements. The SEC considers an entity’s most critical accounting policies to be those policies that are both most important to the portrayal of a company’s financial condition and results of operations and those that require management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about matters that are inherently uncertain at the time of estimation. For a more detailed discussion of the accounting policies of the Company, see Note 3 of the Notes to the Condensed Consolidated Financial Statements included in this Quarterly Report, “Summary of Significant Accounting Policies”.
We believe the following critical accounting policies, among others, require significant judgments and estimates used in the preparation of our consolidated financial statements.
Use of Estimates and Assumptions
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) the disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and (iii) the reported amount of net sales and expense recognized during the periods presented.
Those estimates and assumptions include estimates for reserves of uncollectible accounts receivable, allowance for inventory obsolescence, product returns, depreciable lives of property and equipment, allocation of purchase price from business combinations, analysis of impairment of goodwill, realization of deferred tax assets, accruals for potential liabilities and assumptions made in valuing stock instruments issued for services. Management evaluates these estimates and assumptions on a regular basis. Actual results could differ from those estimates.
Goodwill
In accordance with FASB ASC 350, Intangibles-Goodwill and Other, we review goodwill and indefinite lived intangible assets for impairment at least annually or whenever events or circumstances indicate a potential impairment. Our impairment testing is performed annually at December 31 (our fiscal year end). Impairment of goodwill and indefinite lived intangible assets is determined by comparing the fair value of our reporting units to the carrying value of the underlying net assets in the reporting units. If the fair value of a reporting unit is determined to be less than the carrying value of its net assets, goodwill is deemed impaired and an impairment loss is recognized to the extent that the carrying value of goodwill exceeds the difference between the fair value of the reporting unit and the fair value of its other assets and liabilities.
Management concluded that a triggering event did not occur during the three months ended June 30, 2026. We will continue to review for impairment indicators as necessary in future periods.
Revenue Recognition
The Company’s revenue is comprised of sales of nutritional supplements and wellness products to consumers.
The Company accounts for revenue in accordance with FASB ASC 606. The underlying principle of ASC 606 is to recognize revenue to depict the transfer of goods or services to customers at the amount expected to be collected. ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contract(s), which includes (1) identifying the contract(s) or agreement(s) with a customer, (2) identifying our performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. Under ASC 606, revenue is recognized when performance obligations under the terms of a contract are satisfied, which occurs for the Company upon shipment or delivery of products to our customers based on written sales terms. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring the products to a customer.
All products sold by the Company are distinct individual products and consist of nutritional supplements and wellness products. The products are offered for sale solely as finished goods, and there are no performance obligations required post-shipment for customers to derive the expected value from them.
The Company’s products are also sold on e-commerce platforms including Amazon. For these transactions, the Company evaluated principal versus agent considerations to determine appropriateness of recording platform fees paid to Amazon as an expense or as a reduction of revenue. The Company records platform fees paid to Amazon for distribution of Company products to cost of goods sold in the condensed consolidated statements of income and comprehensive income. Distribution and platform fees are not recorded as a reduction of revenue because the Company (1) owns the goods before they are transferred to the customer, (2) can direct Amazon, similar to other third-party logistics providers (“Logistic Providers”), to return the Company’s inventory to any location specified by the Company, (3) has the responsibility to make customers whole following any returns made by customers directly to Logistic Providers and the Company retains the back-end inventory risk, (4) is subject to credit risk (i.e., credit card chargebacks), (5) establishes prices of its products, (6) can determine who fulfills the goods to the customer (Amazon or the Company) and (7) can limit quantities or stop selling the goods at any time. Based on these considerations, the Company is the principal in this arrangement.
The Company disaggregates revenue into geographical regions and distribution channels. The Company determines that disaggregating revenue into these categories achieves the disclosure objective to depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors.
Wholesale revenue during the quarter ended June 30, 2026 was approximately 55% of net revenue, compared to 45% for online channels for the same period. Wholesale revenue during the quarter ended June 30, 2025 was approximately 34% of net revenue, compared to 66% for online channels during the same period in 2025.
Wholesale revenue during the six months ended June 30, 2026 and 2025 was approximately 55% and 34% of net revenue, respectively, compared to 45% and 66% for online channels for the same periods.
Sales to customers in the U.S. were approximately 95% and 96% during the three and six months ended June 30, 2026 and 2025, respectively, with the balance of sales for the same respective periods being to customers primarily in Canada.
Control of products we sell transfers to customers upon shipment from our facilities or delivery to our customers, and the Company’s performance obligations are satisfied at that time. Shipping and handling activities are performed before the customer obtains control of the goods and therefore represent a fulfillment activity rather than promised goods to the customer. Payments for sales are generally made by check, credit card, or wire transfer. Historically the Company has not experienced any significant payment delays from customers.
For direct-to-consumer sales, with the exception of Irwin Products, the Company allows for returns within 30 days of purchase. Irwin allows for returns within 60 days of purchase for direct-to-consumer sales. Our wholesale customers, such as GNC, may return purchased products to the Company under certain circumstances, which include expired or soon-to-be-expired products located in GNC corporate stores or at any of its distribution centers, and products that are subject to a recall or that contain an ingredient or ingredients that are subject to a recall by the FDA.
A right of return does not represent a separate performance obligation, but because customers are allowed to return products, the consideration to which the Company expects to be entitled is variable. Upon evaluation of returns, the Company determined that product returns are immaterial and therefore believes it is probable that such returns will not cause a significant reversal of revenue in the future. We assess our contracts and the reasonableness of our conclusions on a quarterly basis.
Recent Accounting Pronouncements
See Note 3 of the Condensed Consolidated Financial Statements included in this Quarterly Report for a description of recent accounting pronouncements believed by management to have a material impact on our present or future financial statements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Our business is conducted principally in the U.S. However, due to the MRC acquisition in 2023, the Company now has more exposure to fluctuations in foreign currencies. As a result, our financial results may be materially affected by factors such as changes in foreign currency exchange rates or economic conditions in foreign markets.
Foreign Currency
The Company has not entered into any foreign currency hedging transactions during the three months ended June 30, 2026 or years ended December 31, 2025 or 2024.
Interest Rates
Our exposure to risk for changes in interest rates relates primarily to borrowings under the Credit Agreement (which includes the Irwin Term Loan as well as our Credit Line), and our investments in short-term financial instruments. As of June 30, 2026 the Company had $36,055 outstanding on the Irwin Term Loan (of which $17,750 was swapped for a fixed rate, thereby eliminating interest rate variability on that portion of the loan) and $2,000 outstanding under its Credit Line.
Investments of our cash balances in both fixed-rate and floating-rate interest-earning instruments carry some interest rate risk. The fair value of fixed-rate securities may fall due to a rise in interest rates, while floating-rate securities may produce less income than expected if interest rates fall. Partly as a result of this, our future interest income will vary due to changes in interest rates and we may suffer losses in principal if we are forced to sell securities that have fallen in estimated fair value due to changes in interest rates. However, as substantially all of our cash equivalents consist of bank deposits and short-term money market instruments, we do not expect any material change with respect to our net income as a result of an interest rate change.
ITEM 4. CONTROLS AND PROCEDURES
|
a. |
Evaluation of disclosure controls and procedures.
Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, an evaluation of the effectiveness of the design and operations of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as of June 30, 2026 was completed. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer believe that our disclosure controls and procedures are effective to ensure that information required to be disclosed in the reports submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, including to ensure that information required to be disclosed by the Company is accumulated and communicated to management, including the principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. |
|
b. |
Changes in Internal Control Over Financial Reporting
There were no additional changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended June 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. |
|
c. |
Inherent Limitations on the Effectiveness of Controls
Management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control systems are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in a cost-effective control system, no evaluation of internal control over financial reporting can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been or will be detected. |
These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of a simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We currently are not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of the Company or any of its subsidiaries, threatened against or affecting the Company, our Common Stock, any of our subsidiaries or of the Company’s or our subsidiaries’ directors or officers in their capacities as such, in which an adverse decision could have a material adverse effect.
ITEM 1A. RISK FACTORS
Our results of operations and financial condition are subject to numerous risks and uncertainties described in our comprehensive Annual Report on Form 10-K for our fiscal year ended December 31, 2025, filed with the SEC on June 30, 2026. Management is not aware of any material changes to the risk factors discussed in Part 1, Item 1A, of the Annual Report on Form 10-K for the year ended December 31, 2025. You should carefully consider these risk factors in conjunction with the other information contained in this Quarterly Report. Should any of these risks materialize, our business, financial condition and future prospects could be negatively impacted.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
There were no defaults upon senior securities during the three-month period ended June 30, 2026.
ITEM 5. OTHER INFORMATION
In the three months ended June 30, 2026, directors or officers adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.
ITEM 6. EXHIBITS
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31.1 |
Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act. |
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31.2 |
Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act. |
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32.1 |
Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act. |
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32.2 |
Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act. |
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101.INS |
Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
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101.SCH |
Inline XBRL Taxonomy Extension Schema Document |
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101.CAL |
Inline XBRL Taxonomy Extension Calculation Linkbase Document |
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101.DEF |
Inline XBRL Taxonomy Extension Definition Linkbase Document |
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101.LAB |
Inline XBRL Taxonomy Extension Label Linkbase Document |
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101.PRE |
Inline XBRL Taxonomy Extension Presentation Linkbase Document |
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104 |
Cover Page Interactive Data File (embedded within the Inline XBRL Document and included in Exhibit 101) |
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934 the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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Registrant |
FitLife Brands, Inc. |
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Date: August 13, 2026 |
By: |
/s/ Dayton Judd |
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Dayton Judd |
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Chief Executive Officer and Chair (Principal Executive Officer) |
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Registrant |
FitLife Brands, Inc. |
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Date: August 13, 2026 |
By: |
/s/ Jakob York |
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Jakob York |
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Chief Financial Officer (Principal Financial Officer) |
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