ACME UNITED CORP (ACU)

CIK: 0000002098. SIC: 3420 Cutlery, Handtools & General Hardware. Latest 10-K as of: 2026-03-11.

SIC breadcrumb: Manufacturing > SIC Major Group 34 > SIC 3420 Cutlery, Handtools & General Hardware

SEC company page: https://www.sec.gov/edgar/browse/?CIK=2098. Latest filing source: 0001193125-26-102079.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-03-11. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000002098.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Free cash flow = operating cash flow - capital expenditures. Missing metrics are omitted rather than fabricated.

Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-06. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000002098.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

Quarterly Charts

Macro Cross-References

• CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
• UNRATE - Unemployment Rate
• FEDFUNDS - Federal Funds Effective Rate
• CES0500000003 - Average Hourly Earnings of All Employees, Total Private
• DFEDTARU - Federal Funds Target Range - Upper Limit
• DFEDTARL - Federal Funds Target Range - Lower Limit
• DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
• DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
• DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
• DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
• T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
• CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
• CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
• CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
• CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
• PCEPI - Personal Consumption Expenditures: Chain-type Price Index
• PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
• PPIACO - Producer Price Index by Commodity: All Commodities
• T10YIE - 10-Year Breakeven Inflation Rate
• U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
• PAYEMS - All Employees, Total Nonfarm
• CIVPART - Labor Force Participation Rate
• EMRATIO - Employment-Population Ratio
• UNEMPLOY - Unemployed
• CE16OV - Employment Level
• ICSA - Initial Claims
• JTSJOL - Job Openings: Total Nonfarm
• JTSQUR - Quits: Total Nonfarm
• GDPC1 - Real Gross Domestic Product
• A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
• INDPRO - Industrial Production: Total Index
• TCU - Capacity Utilization: Total Index
• HOUST - New Privately-Owned Housing Units Started: Total Units
• PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
• RSAFS - Advance Retail Sales: Retail Trade
• PCE - Personal Consumption Expenditures
• DSPIC96 - Real Disposable Personal Income
• PSAVERT - Personal Saving Rate
• M2SL - M2
• BOPGSTB - U.S. International Trade in Goods and Services: Balance
• MSPUS - Median Sales Price of Houses Sold for the United States
• HSN1F - New One Family Houses Sold: United States
• RHORUSQ156N - Homeownership Rate in the United States
• TTLCONS - Total Construction Spending: Total Construction in the United States
• RRVRUSQ156N - Rental Vacancy Rate in the United States
• TOTALSL - Total Consumer Credit Owned and Securitized
• REVOLSL - Revolving Consumer Credit Owned and Securitized
• DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
• GDP - Gross Domestic Product
• GPDI - Gross Private Domestic Investment
• GCE - Government Consumption Expenditures and Gross Investment
• PCEC - Personal Consumption Expenditures
• NETEXP - Net Exports of Goods and Services
• GFDEBTN - Federal Debt: Total Public Debt
• GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
• FYFSD - Federal Surplus or Deficit
• FGRECPT - Federal Government Current Receipts
• FGEXPND - Federal Government: Current Expenditures
• MANEMP - All Employees, Manufacturing
• USCONS - All Employees, Construction
• USTRADE - All Employees, Retail Trade
• USFIRE - All Employees, Financial Activities
• USGOVT - All Employees, Government
• AWHAETP - Average Weekly Hours of All Employees, Total Private
• DGORDER - Manufacturers' New Orders: Durable Goods
• NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
• BUSINV - Total Business Inventories
• EXPGS - Exports of Goods and Services
• IMPGS - Imports of Goods and Services
• IR - Import Price Index (End Use): All Commodities
• PPIFIS - Producer Price Index by Commodity: Final Demand

Latest quarter (10-Q)

Latest 10-Q source: 0001193125-26-209010.

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Confidence: high. Filing date: 2026-05-06. Report date: 2026-03-31.

Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Information

The Company may from time to time make written or oral “forward-looking statements” including statements contained in this report and in other communications by the Company, which are made in good faith pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Such statements are based on our beliefs as well as assumptions made by and information currently available to us. When used in this document, words like “may,” “might,” “will,” “expect,” “anticipate,” “believe,” “potential,” and similar expressions are intended to identify forward-looking statements. Actual results could differ materially from our current expectations.

Forward-looking statements in this report, including without limitation, statements related to the Company’s plans, strategies, objectives, expectations, intentions and adequacy of resources, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties that may impact the Company’s business, operations and financial results.

These risks and uncertainties include, without limitation, the following: (i) changes in the Company’s plans, strategies, objectives, expectations and intentions, which may be made at any time at the discretion of the Company; (ii) the impact of volatility in global economic conditions, including the impact on the Company’s suppliers and customers; (iii) international trade policies of the United States or foreign governments and their impact on demand for our products and our competitive position, including the imposition of new tariffs, changes in existing tariff rates or the threat of any such action; (iv) potential adverse effects on the Company, its customers, and suppliers resulting from the wars in Iran and elsewhere in the Middle East and Ukraine; (v) the continuing adverse impact of inflation, including product costs, transportation costs and interest rates; (vi) additional disruptions in the Company’s supply chains, whether caused by pandemics, natural disasters, including trucker shortages, port closures, port strikes or otherwise; (vii) labor related costs the Company has and may continue to incur, including costs of acquiring and training new employees and rising wages and benefits; (viii) changes in client needs and consumer spending habits; (ix) currency fluctuations; (x) the Company’s ability to effectively manage its inventory in a rapidly changing business environment; (xi) the impact of competition; (xii) the impact of technological changes including, specifically, the growth of online marketing and sales activity; (xiii) the Company’s ability to manage its growth effectively, including its ability to successfully integrate any business it might acquire; ; and (xiv) other risks and uncertainties indicated from time to time in the Company’s filings with the Securities and Exchange Commission.

For a more detailed discussion of these and other factors affecting the Company, see the Risk Factors described in Item 1A included in the Company’s Annual Report on Form 10-K for the fiscal year December 31, 2025 and below under “Financial Condition”. All forward-looking statements in this report are based upon information available to the Company on the date of this report. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by law.

Critical Accounting Estimates

There have been no material changes to the Company’s critical accounting estimates as previously reported in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

Results of Operations

Traditionally, the Company’s sales and profits are stronger in the second and third quarters and weaker in the first and fourth quarters of the fiscal year, due to the seasonal nature of the Westcott back-to-school market.

Net sales

Consolidated net sales for the three months ended March 31, 2026 were $52,301,000 compared to $45,958,000 in the same period in 2025, an increase of 14%. Excluding the incremental sales resulting from the acquisition of the assets of My Medic on January 15, 2026, comparable sales increased 6%.

Net sales in the U.S. for the three months ended March 31, 2026 increased 12% compared to the same period in 2025. The increase in net sales for the three months ended March 31, 2026 was primarily due to increased sales of first aid and medical products and additional sales resulting from the acquisition of the assets of My Medic.

Net sales in Canada for the three months ended March 31, 2026 increased 16% in U.S. dollars and 11% in local currency compared to the same period in 2025 due to higher sales of first aid products.

16

European net sales for the three months ended March 31, 2026 increased 32% in U.S. dollars and 19% in local currency compared to the same period in 2025 primarily due to higher ecommerce sales and additional sales resulting from the acquisition of the cutting and sharpening line of products on October 1, 2025.

Gross profit

Gross profit for the three months ended March 31, 2026 was $20,785,000 (39.7% of net sales) compared to $17,917,000 (39.0% of net sales) in the same period in 2025.

Selling, general and administrative expenses

Selling, general and administrative ("SG&A") expenses for the three months ended March 31, 2026 were $19,039,000 (36.4% of net sales) compared with $15,491,000 (33.7% of net sales) in the same period in 2025, an increase of $3,548,000. The increase in SG&A expenses was primarily due to the acquisition of the assets of My Medic as well as higher personnel related expenses.

Operating income

Operating income for the three months ended March 31, 2026 was $1,746,000 compared with $2,426,000 in the same period of 2025.

Operating income in the U.S. segment decreased by $1,320,000 for the three months ended March 31, 2026 compared to the same period in 2025. The decrease in operating income for the three months ended March 31, 2026 was primarily due to higher cost of sales and increased operating expenses as a result of higher tariff-related costs and investments in enhanced quality assurance protocols at the Med-Nap facility, together with rising employee healthcare expenses. Tariff expenses were recognized during the first quarter as the Company sold inventory that had been subject to the high tariff rates imposed in 2025.

Operating income in the Canadian segment increased by $206,000 for the three months ended March 31, 2026, compared to the same period in 2025. The increase in operating income for the three months ended March 31, 2026 was primarily due to higher sales of first aid products.

Operating income in the European segment increased by $434,000 for the three months ended March 31, 2026, compared to the same period in 2025. The increase in operating income for the three months ended March 31, 2026 was primarily due to higher sales.

Interest expense, net

Interest expense, net for the three months ended March 31, 2026 was $486,000 compared with $397,000 in the same period of 2025, an $89,000 increase. The increase in interest expense for the three months ended March 31, 2026 resulted from higher average outstanding borrowings partially offset by lower average interest rates on the debt outstanding.

Other income (expense), net

Other expense, net was $16,000 in the three months ended March 31, 2026 compared to other income of $90,000 in the same period of 2025.

Income taxes

The effective income tax rate for the three months ended March 31, 2026 was 21% compared to 22% in the same period of 2025.

Financial Condition

Liquidity and Capital Resources

During the first three months of 2026, working capital increased approximately $9.2 million. Inventory turnover, calculated using a twelve-month average inventory balance, was 2.0 at March 31, 2026 and December 31, 2025. Receivables increased approximately $4.4 million at March 31, 2026 compared to December 31, 2025. The average number of days sales outstanding in accounts receivable was 51 days at March 31, 2026 compared to 54 days at December 31, 2025. Accounts payable and other current liabilities increased by approximately $0.3 million at March 31, 2026 compared to December 31, 2025.

17

The Company's working capital, current ratio and long-term debt to equity ratio are as follows (dollar amounts in thousands):

March 31,

December 31,

2026

2025

Working capital

$

82,507

$

73,324

Current ratio

4.57

4.21

Long term debt to equity ratio

36.3

%

18.1

%

Long-term debt consists of (i) borrowings under the Company’s revolving loan agreement with HSBC Bank, N.A. and (ii) amounts outstanding under the fixed rate mortgage on the Company’s manufacturing and distribution facilities in Rocky Mount, NC and Vancouver, WA. Effective as of June 26, 2025, the Company entered into Amendment No. 11 to the Loan Agreement. Amendment No. 11 extends the scheduled maturity of the $65 million dollar secured revolving credit facility under the Loan Agreement to May 31, 2027. The Loan Agreement provides for borrowings of up to $65 million, at an interest rate of SOFR plus 1.75%; interest is payable monthly. The Loan Agreement has an expiration date of May 31, 2027. The Company must pay a facility fee, payable quarterly, in an amount equal to one eighth of one percent (.125%) per annum of the average daily unused portion of the revolving credit line. The facility is intended to provide liquidity for operating activities, growth, acquisitions, dividends share repurchases and other business activities. Under the revolving loan agreement, the Company is required to maintain specific amounts of funded debt to EBITDA, a fixed charge coverage ratio and must have annual net income greater than $0, measured as of the end of each fiscal year. As of March 31, 2026, the Company was in compliance with the covenants under the revolving loan agreement as then in effect.

During the first three months of 2026, total debt outstanding under the Company’s revolving credit facility increased by approximately $21.2 million, compared to total debt thereunder at December 31, 2025. As of March 31, 2026, $33,034,000 was outstanding and $31,966,000 was available for borrowing under the Company’s credit facility.

On January 15, 2026, the Company acquired the assets of SLED Distribution, LLC. (d/b/a "My Medic") a leading supplier of tactical, trauma and emergency response products sold primarily through the direct-to-consumer channel, for approximately $18.7 million,

On July 15, 2025, the Company purchased a manufacturing and distribution center in Mt. Pleasant, TN for approximately $6.0 million. The property consists of 77,000 square feet of manufacturing and warehouse space on 12 acres and is designed to be expanded by up to an additional 60,000 square feet. The facility is used primarily to manufacture our Spill Magic line of bodily fluid and spill clean up solutions.

The Company’s manufacturing and distribution facilities in Rocky Mount, NC and Vancouver, WA were financed by a fixed rate mortgage with HSBC Bank, N.A. at a rate of 3.8%. The Company entered into the mortgage loan agreement on December 1, 2021. Payments of principal and interest are due monthly, with all amounts outstanding due on maturity on December 1, 2031. At March 31, 2026, there was approximately $9.9 million outstanding on the mortgage.

Our operations, supply chains, and financial performance are impacted by evolving global trade policies and tariffs, and geopolitical tensions and wars, including ongoing conflicts and instability in the Middle East. In particular, our global operations and international sales expose us to risks associated with trade co

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted from Item 7 to the first post-MD&A boundary after HTML sanitization. Confidence: high. Filing date: 2026-03-11. Report date: 2025-12-31.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Information

The Company may from time to time make written or oral “forward-looking statements” including statements contained in this report and in other communications by the Company, which are made in good faith pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Such statements are based on our beliefs as well as assumptions made by and information currently available to us. When used in this document, words like “may,” “might,” “will,” “expect,” “anticipate,” “believe,” “potential,” and similar expressions are intended to identify forward-looking statements. Actual results could differ materially from our current expectations.

Forward-looking statements in this report, including without limitation, statements related to the Company’s plans, strategies, objectives, expectations, intentions and adequacy of resources, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties that may impact the Company’s business, operations and financial results.

These risks and uncertainties include, without limitation, the following: (i) changes in the Company’s plans, strategies, objectives, expectations and intentions, which may be made at any time at the discretion of the Company; (ii) the impact of uncertainties in global economic conditions, including the impact on the Company’s suppliers and customers; (iii) international trade policies and their impact on demand for our products and our competitive position, including the imposition of new tariffs or changes in existing tariff rates by the United States and retaliatory actions by other governments; (iv) the continuing adverse impact of inflation, including product costs, and interest rates; (v) potential adverse effects on the Company, its customers, and suppliers resulting from the conflicts in Ukraine and the Middle East; (vi) additional disruptions in the Company’s supply chains, whether caused by pandemics, natural disasters, or otherwise, including trucker shortages, port closures and delays, and delays with container ships themselves; (vii) labor related costs the Company has and may continue to incur, including costs of acquiring and training new employees and rising wages and benefits; (viii) currency fluctuations; (ix) the Company’s ability to effectively manage its inventory in a rapidly changing business environment; (x) changes in client needs and consumer spending habits; (xi) the impact of competition; (xii) the impact of technological changes including, specifically, the growth of online marketing and sales activity; (xiii) the Company’s ability to manage its growth effectively, including its ability to successfully integrate any business it might acquire; and (xiv) other risks and uncertainties indicated from time to time in the Company’s filings with the Securities and Exchange Commission.

For a more detailed discussion of these and other factors affecting the Company, see the Risk Factors described in Item 1A included in this Annual Report on Form 10-K for the fiscal year December 31, 2025 and below under “Financial Condition”. All forward-looking statements in this report are based upon information available to the Company on the date of this report. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by law.

Critical Accounting Estimates

We prepare our consolidated financial statements in accordance with U.S. generally accepted accounting principles, which require our management to make estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the balance sheet dates, as well as the reported amounts of revenues and expenses during the reporting periods. To the extent that there are material differences between these estimates and actual results, our financial condition or results of operations would be affected. We base our estimates on our own historical experience and other assumptions that we believe are reasonable after taking account of our circumstances and expectations for the future based on available information. We evaluate these estimates on an ongoing basis.

We consider an accounting estimate to be critical if: (i) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from period to period or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations. There are items within our financial statement that require estimation but are not deemed critical, as defined above.

For a detailed discussion of our significant accounting policies and related judgments, see Note 2 of the Notes to Consolidated Financial Statements in "Item 8. Financial Statements and Supplementary Data" of this report.

Results of Operations 2025 Compared with 2024

Traditionally, the Company’s sales and profits are stronger in the second and third quarters and weaker in the first and fourth quarters of the fiscal year, due to the seasonal nature of the Westcott back-to-school market.

21

Net Sales

In 2025, sales increased by $2,051,825, or 1%, to $196,541,816 compared to $194,489,991 in 2024.

The U.S. segment sales decline by 1% in 2025 compared to 2024. Sales of first aid and medical products were strong. However, sales of school and office products were lower mainly due to the cancellation of customer orders in the third and fourth quarters as a result of tariff uncertainty.

European net sales for the year ended December 31, 2025, increased 8% in U.S. dollars (4% in local currency), compared with the same period in 2024. On October 1, 2025, the Company's German subsidiary acquired a line of cutting and sharpening tools that contributed $0.5 million in sales during the year ended December 31, 2025.

Net sales in Canada for the year ended December 31, 2025, increased 14% in U.S. dollars (16% in local currency) compared to the same period in 2024. The increase in sales for the year ended December 31, 2025 was due to strong sales of first aid products.

Gross Profit

Gross profit was $77,409,848 (39.4% of net sales) in 2025 compared to $76,350,824 (39.3% of net sales) in 2024.

Selling, General and Administrative

Selling, general and administrative (“SG&A”) expenses were $62,685,334 in 2025 compared with $62,210,882 in 2024, an increase of $474,452, or 0.8%. SG&A expenses were 31.9% of net sales in 2025 compared to 32.0% in 2024.

Operating Income

Operating income was $14,724,514 in 2025 compared with $14,139,942 in 2024, an increase of $584,572.

Operating income in the U.S. segment increased in 2025 by approximately $117,000 compared to 2024.

Operating income in the European segment increased in 2025 by $143,000 compared to 2024. The increase in operating income was primarily due to higher sales as well as improved gross margins.

Operating income in Canada increased in 2025 by approximately $326,000 compared to 2024. The increase in operating income was primarily due to higher sales as well as improved gross margins.

Interest Expense, net

Net interest expense for 2025 was $1,559,920 compared with $1,942,643 for 2024, a decrease of $382,723. The decrease in net interest expense resulted from lower average outstanding borrowings as well as lower average interest rates on the debt outstanding.

Total Other (Expense) Income, net

Total other (expense), net was $46,972 in 2025 compared to other income, net of $95,110 in 2024. The change in total other expense, net was primarily related to higher losses from foreign currency transactions.

Income Tax Expense

Income tax expense was $2,933,201 in 2025, resulting in an effective tax rate of 22% compared to $2,270,058 in 2024, an effective tax rate of 18%. In 2025, the Company recorded a tax credit of approximately $300,000 related to employee exercise of stock options, compared to $600,000 in 2024.

Off-Balance Sheet Transactions

The Company did not engage in any off-balance sheet transactions during 2025.

Liquidity and Capital Resources

During 2025, working capital increased by approximately $0.7 million compared to December 31, 2024. Inventory increased by approximately $3.6 million, or 6%. Inventory turnover, calculated using a twelve-month average inventory balance, was 2.1 at December 31, 2025 as compared to 2.1 at December 31, 2024. The reserve for slow moving and obsolete inventory was $1,477,849 at December 31, 2025 compared to $1,254,121 at December 31, 2024. We do not anticipate material increases in the allowance for slow moving and obsolete inventory in the ordinary course of business during 2026. Receivables increased by approximately $0.9 million at December 31, 2025 compared to December 31, 2024. The average number of days sales outstanding in accounts receivable was 55 days in 2025 compared to 54 days in 2024.

22

Long-term debt consists of (i) borrowings under the Company’s revolving loan agreement with HSBC Bank, N.A. and (ii) amounts outstanding under the fixed rate mortgage on the Company’s manufacturing and distribution facilities in Rocky Mount, NC and Vancouver, WA. Effective as of June 26, 2025, Acme United Corporation (the “Company”) entered into Amendment No. 11 to the Revolving Loan Agreement dated as of April 5, 2012, as amended (the ”Loan Agreement”), between the Company and HSBC Bank, N.A. Amendment No. 11 extends the scheduled maturity of the $65 million dollar secured revolving credit facility under the Loan Agreement to May 31, 2027. The revolving loan agreement provides for borrowings of up to $65 million, which presently bears interest at SOFR plus 1.70%; interest is payable monthly. The loan agreement has an expiration date of May 31, 2027. The Company must pay a facility fee, payable quarterly, in an amount equal to one eighth of one percent (.125%) per annum of the average daily unused portion of the revolving credit line. The facility is intended to provide liquidity for growth, share repurchases, dividends, acquisitions, and other business activities. Under the revolving loan agreement, the Company is required to maintain specific amounts of funded debt to EBITDA, a fixed charge coverage ratio and must have annual net income greater than $0, measured as of the end of each fiscal year. As of December 31, 2025, the Company was in compliance with the covenants under the revolving loan agreement as then in effect.

At December 31, 2025, total debt outstanding under the Company’s revolving credit facility decreased by approximately $5.8 million compared to total debt outstanding at December 31, 2024. As of December 31, 2025, $11,863,085 was outstanding, and $53,136,915 was available for borrowing under the Company’s revolving credit facility.

On July 15, 2025, the Company purchased a manufacturing and distribution center in Mt. Pleasant, TN for approximately $6.0 million using funds available under its revolving credit facility. The property consists of 77,000 square feet of manufacturing and warehouse space on 12 acres and is designed to be expanded by up to an additional 60,000 square feet. The facility will primarily be used to manufacture our Spill Magic line of bodily fluid and spill clean up solutions.

The Company’s manufacturing and distribution facilities in Rocky Mount, NC and Vancouver, WA were financed by a fixed rate mortgage with HSBC Bank, N.A. at a fixed interest rate of 3.8%. The Company entered into the agreement on December 1, 2021. Payments of principal and interest are due monthly, with all amounts outstanding due on maturity on December 1, 2031. The outstanding principal on December 31, 2025, was $9,975,587.

On May 23, 2024, the Company acquired the assets of Elite First Aid, Inc ("Elite First Aid") for approximately $7.1 million of which $1.0 million is subject to holdbacks as follows: (a) $500,000, the payment of which is contingent upon certain revenue milestones during an consecutive 12-month period from May 31, 2024 to December 31, 2025. The acquired business did not meet the required milestones within the allowable period; therefore, the contingent amount was not payable. Accordingly, the Company reversed the related $500,000 liability.

An additional holdback of (b) $500,000, was subject to a 13 month holdback as a non-exclusive source of recovery primarily to satisfy certain types of indemnification claims under the Asset Purchase Agreement; the Company paid this amount in July 2025.

Capital expenditures during 2025 and 2024 were $10,651,913 and $7,148,648, respectively, which were, in part, financed with borrowings under the Company’s revolving credit facility. The increase in capital expenditures is primarily related to the purchase of the manufacturing facility in Mt. Pleasant, TN as discussed above.

The Company believes that cash on hand, and cash generated from operating activities, together with funds available under its revolving credit facility, are expected, under current conditions, to be sufficient to finance the Company’s planned operations for at least the next twelve months from the issuance of this Form 10-K.

Recently Issued Accounting Standards

Standards not yet Adopted

In November 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This ASU requires more detailed information about specified categories of expenses (purchases of inventory, employee compensation, depreciation, intangible asset amortization and depletion) included in certain expense captions presented on the face of the income statement. The ASU is effective for fiscal years beginning after December 15, 2026 and for interim periods beginning after December 15, 2027. The ASU may be applied either prospectively to financial statements issued for reporting periods after the effective date of this ASU or retrospectively to all prior periods presented in the financial statements and early adoption is permitted. The Company is currently evaluating the impact of adopting this ASU on our consolidated financial statements and related disclosures.

Standards Adopted

23

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”). ASU 2023-09 requires additional categories of information about federal, state and foreign income taxes to be included in effective tax rate reconciliation disclosure. Additionally, the newly added categories also apply to the income taxes paid disclosure. Implementation of said additions are subject to quantitative thresholds. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. The adoption of ASU 2023-09 did not have a material impact on the financial statements.