Citizens(CIA) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION This section presents the unaudited consolidated financial information, including financial statements and related notes Item 1. Financial Statements This section presents the unaudited consolidated financial statements of Citizens, Inc. and its subsidiaries, including balance sheets, statements of operations and comprehensive income (loss), statements of stockholders' equity, and statements of cash flows, along with detailed notes explaining the basis of presentation, significant accounting policies, and specific financial components Consolidated Balance Sheets This section provides a snapshot of the company's assets, liabilities, and equity at specific points in time | Metric (In thousands) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Total Assets | $1,712,500 | $1,685,325 | | Total Liabilities | $1,483,474 | $1,474,970 | | Total Stockholders' Equity | $229,026 | $210,355 | - Fixed maturity securities available-for-sale increased to $1,242,271 thousand at June 30, 2025, from $1,220,961 thousand at December 31, 2024[9] Consolidated Statements of Operations and Comprehensive Income (Loss) This section details the company's revenues, expenses, net income, and other comprehensive income over specific periods | Metric (In thousands, except per share) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total Revenues | $65,086 | $62,084 | $120,738 | $119,796 | | Net Income (Loss) | $6,459 | $3,959 | $4,836 | $8,501 | | Basic and Diluted EPS (Class A) | $0.13 | $0.08 | $0.10 | $0.17 | | Other Comprehensive Income (Loss) | $3,419 | $(8,154) | $12,310 | $10,231 | Consolidated Statements of Stockholders' Equity This section outlines changes in the company's equity, including net income, comprehensive income, and stock compensation | Metric (In thousands) | December 31, 2024 | June 30, 2025 | | :-------------------- | :---------------- | :------------ | | Total Stockholders' Equity | $210,355 | $229,026 | | Net Income (Loss) (Six Months) | $57,062 (Retained Earnings) | $61,898 (Retained Earnings) | | Other Comprehensive Income (Loss) (Six Months) | $(95,965) | $(83,655) | - Stock-based compensation contributed $1,525 thousand to stockholders' equity during the six months ended June 30, 2025[18] Consolidated Statements of Cash Flows This section reports the cash inflows and outflows from operating, investing, and financing activities over specific periods | Cash Flow Activity (In thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $4,218 | $11,376 | | Net cash used in investing activities | $(6,635) | $(10,201) | | Net cash used in financing activities | $(4,183) | $(1,828) | | Net increase (decrease) in cash and cash equivalents | $(6,600) | $(653) | | Cash and cash equivalents at end of period | $22,671 | $26,344 | Notes to Consolidated Financial Statements (Unaudited) This section provides detailed explanations and disclosures supporting the consolidated financial statements (1) FINANCIAL STATEMENTS This note describes the company's reportable segments and the types of insurance products offered within each - The Company operates through two reportable segments: Life Insurance (CICA Domestic and CICA International) and Home Service Insurance (SPLIC and MGLIC)[31][32][33] - CICA Domestic issues ordinary whole life, final expense, and life products with living benefits in the U.S., while CICA International offers U.S. dollar-denominated endowment and whole life products to non-U.S. residents[31][32] - The Home Service Insurance segment focuses on middle- and lower-income markets in Louisiana, Mississippi, and Arkansas, providing small face amount whole life, industrial life, pre-need policies, and critical illness policies[33] (2) ACCOUNTING PRONOUNCEMENTS This note discusses the impact of new accounting standards on the company's financial disclosures - The Company is evaluating ASU 2024-03, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures," effective for annual periods after December 15, 2026, which will impact disclosures but not financial condition or results of operations[39] (3) INVESTMENTS This note details the company's investment portfolio, including fixed maturity and equity securities | Investment Category (In thousands) | June 30, 2025 (Amount) | June 30, 2025 (%) | December 31, 2024 (Amount) | December 31, 2024 (%) | | :--------------------------------- | :--------------------- | :---------------- | :------------------------- | :-------------------- | | Fixed maturity securities | $1,242,271 | 86.5% | $1,220,961 | 86.0% | | Equity securities | $5,478 | 0.4% | $5,447 | 0.4% | | Policy loans | $69,648 | 4.8% | $71,216 | 5.0% | | Other long-term investments | $96,424 | 6.7% | $93,604 | 6.6% | | Cash and cash equivalents | $22,671 | 1.6% | $29,271 | 2.0% | | Total cash and invested assets | $1,436,492 | 100.0% | $1,420,499 | 100.0% | | Fixed Maturity Securities (In thousands) | June 30, 2025 (Gross Unrealized Losses) | December 31, 2024 (Gross Unrealized Losses) | | :--------------------------------------- | :-------------------------------------- | :------------------------------------------ | | Total fixed maturity securities | $170,242 | $185,741 | - The Company recorded no credit valuation losses on fixed maturity securities for the three and six months ended June 30, 2025 and 2024[48] - As of June 30, 2025, 98.6% of the fair value of the fixed maturity securities portfolio was rated investment grade, with unrealized losses primarily due to noncredit-related factors like changes in credit spreads and rising interest rates[51][52] (4) FAIR VALUE MEASUREMENTS This note explains the methodologies and inputs used to determine the fair value of financial instruments - Fixed maturity securities are primarily classified as Level 2 assets ($1.2 billion, 92.0% of total financial assets at fair value) and valued using third-party pricing sources[67] - Equity securities are classified as Level 1 assets, with fair values based on quoted market prices[68] - Limited partnerships, policy loans, residential mortgage loans, and annuity liabilities are generally classified as Level 3, with fair values estimated using NAV per share or discounted cash flows with unobservable inputs[69][74][75][77] (5) DEFERRED POLICY ACQUISITION COSTS AND COST OF INSURANCE ACQUIRED This note details balances and changes in deferred policy acquisition costs and cost of insurance acquired | Metric (In thousands) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Consolidated DAC balance | $208,944 | $199,635 | | Consolidated COIA balance | $9,269 | $9,446 | - DAC capitalization decreased for the six months ended June 30, 2025, compared to the prior year, mainly due to increased ceding commissions and expenses from a full six months of reinsurance with RGA, partially offset by higher first-year sales[83] (6) POLICYHOLDERS' LIABILITIES This note outlines policyholder obligations, including future policy benefit reserves and policyholder funds | Policy Liabilities (In thousands) | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Total future policy benefit reserves | $1,171,356 | $1,173,105 | | Total policyholders' funds | $255,779 | $245,020 | | Weighted-Average Duration (In years) | June 30, 2025 (Life Insurance) | June 30, 2025 (Home Service Insurance) | | :----------------------------------- | :----------------------------- | :------------------------------------- | | Permanent (current discount rate) | 8.5 | 14.2 | | Permanent Limited Pay (current discount rate) | 7.6 | 13.1 | | Weighted-Average Interest Rate (%) | June 30, 2025 (Life Insurance) | June 30, 2025 (Home Service Insurance) | | :--------------------------------- | :----------------------------- | :------------------------------------- | | Permanent (current discount rate) | 5.12% | 5.62% | | Permanent Limited Pay (current discount rate) | 5.12% | 5.58% | (7) REINSURANCE This note describes reinsurance arrangements and their impact on insurance in force and recoverable amounts - CICA International increased its retention amount for new policies to $250,000 from $100,000 as of April 1, 2025[103] - CICA Domestic entered a coinsurance agreement with RGA Reinsurance Company in Q2 2024, reinsuring 50% of its newly written final expense business[103] | Reinsurance Metric (In thousands) | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Net life insurance in force | $4,500,351 | $4,409,718 | | Reinsurance recoverable | $9,400 | $6,900 | (8) COMMITMENTS AND CONTINGENCIES This note discloses the company's financial commitments and potential contingent liabilities - CICA International is committed to fund investments up to $10.5 million related to limited partnerships as of June 30, 2025[109] - The Company renewed its $20 million senior secured revolving credit facility with Regions Bank, maturing May 5, 2027, and had not borrowed any funds as of June 30, 2025[110][113] (9) STOCKHOLDERS' EQUITY AND RESTRICTIONS This note details stockholders' equity composition and regulatory capital requirements for insurance subsidiaries - As of August 1, 2025, the Registrant had 50,245,367 shares of Class A common stock outstanding[4] | EPS (Class A Common Stock) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------- | :----------------------------- | :----------------------------- | | Basic and diluted | $0.10 | $0.17 | - All domestic insurance subsidiaries exceeded minimum NAIC regulatory capital requirements at June 30, 2025, with CICA Domestic's RBC above 350%[119] - CICA International exceeded Puerto Rico's minimum capital of $750,000 and premium to surplus ratio of 7 to 1 at June 30, 2025[120] (10) SEGMENT AND OTHER OPERATING INFORMATION This note provides financial performance and operational details for the company's distinct business segments - The Life Insurance segment issues endowment and whole life contracts to non-U.S. residents and whole life, final expense, and living benefits products in the U.S.[122] - The Home Service Insurance segment focuses on lower-income markets in Louisiana, Mississippi, and Arkansas, offering small face amount whole life, industrial life, pre-need policies, and critical illness policies[123] | Income (Loss) Before Federal Income Tax (In thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------------------------- | :----------------------------- | :----------------------------- | | Life Insurance | $8,391 | $13,272 | | Home Service Insurance | $1,727 | $2,034 | | Other Non-Insurance Enterprises | $(4,991) | $(7,079) | | Total Earned Premiums by Country (In thousands) | Six Months Ended June 30, 2025 | | :---------------------------------------------- | :----------------------------- | | United States | $33,483 | | Colombia | $13,015 | | Taiwan | $7,053 | | Venezuela | $6,672 | | Ecuador | $6,566 | | Argentina | $5,019 | (11) INCOME TAXES This note details income tax expense, effective tax rates, and deferred tax assets and liabilities | Effective Tax Rate (%) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------- | :----------------------------- | :----------------------------- | | Tax benefit effective rates | 5.7% | (3.3)% | - CICA International benefits from a Puerto Rico tax exemption decree, freezing the income tax rate at 0% on taxable earnings up to $1.2 million and 4% on earnings exceeding $1.2 million[136] - Valuation allowances on capital deferred tax assets were $4.8 million at June 30, 2025, and $5.0 million at June 30, 2024[137] - The Company is assessing the impact of the newly enacted One Big Beautiful Bill Act (OBBBA) on its consolidated financial statements[138] (12) OTHER COMPREHENSIVE INCOME (LOSS) This note presents components of other comprehensive income (loss) and their impact on accumulated balances | Accumulated Other Comprehensive Income (Loss) (In thousands) | June 30, 2025 | December 31, 2024 | | :----------------------------------------------------------- | :------------ | :---------------- | | Balance, net of tax | $(83,655) | $(95,965) | | Other Comprehensive Income (Loss) Components (In thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------------------------------- | :----------------------------- | :----------------------------- | | Unrealized gains (losses) on fixed maturity securities, net | $18,828 | $(27,027) | | Change in current discount rate for liability for future policy benefits | $(4,586) | $39,517 | (13) RELATED PARTY TRANSACTIONS This note confirms no material changes in routine related party transactions during the reporting period - No material changes occurred in routine related party transactions (management service agreements, tax sharing, inter-company dividends, and capital contributions) during the six months ended June 30, 2025[142] (14) SUBSEQUENT EVENTS This note reports significant events occurring after the balance sheet date but before financial statement issuance - No other significant subsequent events requiring recognition or disclosure were identified through the report issuance date[143] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial condition and results of operations, highlighting key drivers, segment performance, investment strategies, and liquidity management, along with forward-looking statements and critical accounting policies Forward-Looking Statements This section cautions that the report contains statements about future expectations subject to risks and uncertainties - The report contains forward-looking statements subject to risks and uncertainties, and the Company assumes no obligation to revise or update them, except as required by law[145][146] Objective of Our Management's Discussion and Analysis This section outlines the MD&A's purpose: to provide insights into financial changes and future performance trends - The MD&A aims to provide investors with information to assess material changes in financial condition (December 31, 2024, to June 30, 2025) and results of operations (three and six months ended June 30, 2025, compared to 2024), and to discuss trends affecting future performance[148] Overview This section describes Citizens, Inc.'s business, product offerings, and operating segments - Citizens, Inc. provides insurance products with living and death benefits, specializing in individual whole life, endowment, and final expense insurance in niche markets globally[149] - Revenues are primarily derived from life insurance premiums and net investment income, with expenses including sales costs, operating expenses, and income taxes[150] - The Company operates in two segments: Life Insurance (CICA Domestic and CICA International) and Home Service Insurance (Security Plan Life Insurance Company)[151] Events That Impacted Our Business This section highlights significant events and factors that have influenced the company's business operations - The business has been impacted by factors described in the 2024 Form 10-K Risk Factors and events in the Form 10-Q for Q1 2025, including a BlackRock write-down[152] Financial Highlights This section summarizes key financial performance indicators and significant changes during the reporting period | Metric (In millions) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :------------------- | :------ | :------ | :------- | :------- | | Net income before federal income tax | $6.9 | $3.3 | $5.1 | $8.2 | - The increase in Q2 net income before tax was driven by a $0.8 million increase in total premium revenue, a $2.7 million increase in investment-related gains, and a $3.2 million decrease in general expenses (due to a prior-year legal fee), partially offset by increased insurance benefits and stock unit grant expenses[153] - The decrease in YTD net income before tax was due to a $1.2 million decrease in investment-related gains (BlackRock write-down) and a $4.8 million increase in insurance benefits, partially offset by a $2.0 million increase in total premium revenue and a $1.8 million decline in other general expenses[153] - As of June 30, 2025, total assets were $1.7 billion, total direct insurance in force was $5.35 billion, and diluted earnings per share of Class A common stock for the six months was $0.10[155] The Factors that Drive our Operating Results This section identifies primary elements influencing financial performance, including sales, investments, and expenses - Primary drivers of operating results include sales and product mix, premium revenues, investments, claims and surrenders, operating expenses, and actuarial assumptions[163] - Product mix is trending towards newer whole life products (international and domestic) with smaller margins, replacing higher-margin endowment products, a trend expected to continue[158] - Direct first-year premiums increased 32% for the six months ended June 30, 2025, driven by sales of newer products and an increased number of producing agents, primarily in CICA Domestic final expense business[161] - Net investment income decreased slightly due to lower income from limited partnership investments[166] - Matured endowments increased as expected, while death claim benefits decreased due to lower volume and the RGA coinsurance agreement[167] - Operating expenses decreased due to a $3.5 million legal fee expense incurred in the prior year, despite continued investment in growth and higher equity compensation costs[169] Our Operating Segments This section provides an overview of the company's distinct business segments and their performance drivers | Segment | Six Months Ended June 30, 2025 (Amount of Insurance Issued) | Six Months Ended June 30, 2024 (Amount of Insurance Issued) | | :-------------------- | :------------------------------------------ | :------------------------------------------ | | Life Insurance | $393,859,068 | $446,188,231 | | Home Service Insurance | $123,403,197 | $123,431,074 | | Total | $517,262,265 | $569,619,305 | - CICA International benefited from increased sales of its whole life product, accounting for 67% of total insurance issued in that segment, leading to higher policy face amounts[176] - Home Service Insurance segment's growth is impacted by inflation on the cost of living, affecting new sales among lower-income individuals[177] - Overall insurance in force growth is impacted by persistency rates, policy maturities, and surrenders[180] Consolidated Results of Operations This section analyzes the company's overall financial performance, including revenues, benefits, and expenses Revenues This section details sources and changes in total revenues, including premiums and investment income | Revenue (In thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total Revenues | $65,086 | $62,084 | $120,738 | $119,796 | | Total Life and A&H premiums | $43,388 | $42,559 | $83,185 | $81,234 | | Net investment income | $17,169 | $17,540 | $34,546 | $35,027 | | Investment related gains (losses), net | $2,408 | $(253) | $(486) | $710 | - Direct first-year premiums increased 20% and 32% for the three and six months ended June 30, 2025, respectively, driven by sales of newer products and expanded domestic distribution[183] - Investment related losses for the six months ended June 30, 2025, were primarily due to a non-cash write-down of the BlackRock ESG investment[185] Benefits and Expenses This section analyzes the company's insurance benefits paid, claims, surrenders, and operating expenses | Benefits and Expenses (In thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total benefits and expenses | $58,172 | $58,782 | $115,611 | $111,569 | | Claims and surrenders | $40,220 | $34,530 | $80,318 | $67,643 | | Other general expenses | $13,459 | $16,639 | $26,152 | $27,977 | | Amortization of deferred policy acquisition costs | $4,613 | $4,273 | $9,260 | $8,311 | - Matured endowment benefits significantly increased for both three and six months ended June 30, 2025, as many endowment policies reached contractual maturity dates, with continued increases expected throughout 2025[188][189] - Death claim benefits decreased due to lower volume and the coinsurance agreement with RGA[188] - Other general expenses decreased due to a $3.5 million legal fee incurred in the prior year, despite ongoing costs for strategic growth initiatives and equity compensation[193] Segment Operations This section provides a detailed analysis of financial performance and key drivers for each operating segment Life Insurance This section analyzes the Life Insurance segment's financial performance, including income, revenues, and benefits | Metric (In thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :----------------------------- | :----------------------------- | | Income before federal income tax | $8,391 | $13,272 | | Total Revenues | $92,080 | $90,495 | | Total Benefits and Expenses | $83,689 | $77,223 | - Income before federal income tax decreased for the six months ended June 30, 2025, primarily due to a $0.9 million decrease in investment-related gains (BlackRock write-down) and a $5.0 million increase in insurance benefits paid (matured endowments)[203] - Direct premiums increased by $6.1 million for the six months ended June 30, 2025, driven by sales of newer products and an increased number of producing agents, primarily in CICA Domestic[205] - Sales in Taiwan are declining due to distribution agency difficulties, regulatory challenges, and geopolitical shifts, while Venezuela faces headwinds from the strength of the US dollar[208] | Claims and Surrenders (In thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :----------------------------- | :----------------------------- | | Matured endowment benefits | $35,531 | $21,476 | | Death claim benefits | $2,177 | $3,184 | Home Service Insurance This section analyzes the Home Service Insurance segment's financial performance, including income, revenues, and premiums | Metric (In thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :----------------------------- | :----------------------------- | | Income before federal income tax | $1,727 | $2,034 | | Total Revenues | $28,295 | $28,784 | | Total Benefits and Expenses | $26,568 | $26,750 | - Income before federal income tax decreased for the six months ended June 30, 2025, due to investment-related losses, partially offset by lower insurance benefits paid[216] | Premiums (In thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------- | :----------------------------- | :----------------------------- | | Total life and A&H premiums | $21,388 | $21,768 | - Life and A&H premiums slightly declined due to strategic actions to improve sales quality and persistency (leading to a decrease in agent sales force) and external economic pressures like inflation[218] - Death claim benefits decreased slightly due to lower volume of reported claims[219] Other Non-Insurance Enterprises This section analyzes other non-insurance enterprises' financial performance, focusing on income or loss before tax | Metric (In thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :----------------------------- | :----------------------------- | | Loss before federal income tax | $(4,991) | $(7,079) | - The decreased loss was primarily due to lower other general expenses, specifically a $3.5 million legal fee expense incurred in the prior year, partially offset by increased equity incentive compensation costs[220] Investments This section discusses the company's investment portfolio, including fixed maturity securities, cash, and other investments | Investment Category (In thousands) | June 30, 2025 (Amount) | June 30, 2025 (%) | December 31, 2024 (Amount) | December 31, 2024 (%) | | :--------------------------------- | :--------------------- | :---------------- | :------------------------- | :-------------------- | | Total fixed maturity securities | $1,242,271 | 86.5% | $1,220,961 | 86.0% | | Cash and cash equivalents | $22,671 | 1.6% | $29,271 | 2.0% | | Other investments | $171,550 | 11.9% | $170,267 | 12.0% | | Total cash, cash equivalents and invested assets | $1,436,492 | 100.0% | $1,420,499 | 100.0% | - The carrying value of fixed maturity securities increased to $1.24 billion at June 30, 2025, from $1.22 billion at December 31, 2024, primarily due to interest rate sensitivity on fair value[224] - The weighted average credit rating of the fixed maturity securities portfolio remained 'A' at both June 30, 2025, and December 31, 2024[224] - The municipal fixed maturity security portfolio totaled $271.3 million at June 30, 2025, with significant concentrations in Texas (21%) and California (16%) issuers[226][230] - Gross unrealized losses on available-for-sale fixed maturity securities decreased to $170.2 million at June 30, 2025, from $185.7 million at December 31, 2024, due to a decrease in average market interest rates[236] Liquidity and Capital Resources This section assesses the company's ability to meet financial obligations and manage capital, including cash flows and credit facilities | Capital Resources (In thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------- | :------------ | :---------------- | | Fixed maturity securities | $1,242,271 | $1,220,961 | | Cash and cash equivalents | $22,671 | $29,271 | - Cash provided by operating activities was $4.2 million for the six months ended June 30, 2025[240] - The Company has a $20 million senior secured revolving credit facility with Regions Bank, which was undrawn as of June 30, 2025, providing additional liquidity[244] - Approximately 19% of endowments in force (6% of total in force business) will mature in the next five years, with the highest level in 2025, posing a liquidity risk if policyholders elect lump sum distributions[249] - High levels of surrenders persist due to factors like expired surrender charges, increasing interest rates, and inflationary pressures[250] - Rapid growth in first-year sales of products with advance commissions creates liquidity strain, partially offset by the RGA coinsurance agreement[252] - All domestic insurance subsidiaries exceeded minimum NAIC RBC levels, and CICA International exceeded Puerto Rico's minimum capital requirements at June 30, 2025[255][257] Critical Accounting Policies This section identifies the accounting policies that require significant judgment and estimation by management - The critical accounting policies remain consistent with those described in the 2024 Form 10-K[260] Item 3. Quantitative and Qualitative Disclosures about Market Risk As a smaller reporting company, Citizens, Inc. is not required to provide quantitative and qualitative disclosures about market risk - The Company is not required to provide information for this item as it is a smaller reporting company[261] Item 4. Controls and Procedures This section details the evaluation of the company's disclosure controls and procedures and reports on any changes in internal control over financial reporting Evaluation of Disclosure Controls and Procedures This section reports on management's assessment of the effectiveness of disclosure controls and procedures - Management, including the principal executive officer and principal financial officer, concluded that the Company's disclosure controls and procedures were effective as of June 30, 2025[263] Changes in Internal Control Over Financial Reporting This section reports any material changes in internal control over financial reporting during the period - No material changes in the Company's internal control over financial reporting occurred during the three months ended June 30, 2025[264] PART II. OTHER INFORMATION This section includes additional disclosures not covered in financial information, such as legal proceedings and exhibits Item 1. Legal Proceedings This section confirms that there have been no material developments in legal proceedings during the three months ended June 30, 2025, from those previously disclosed - No material developments in legal proceedings occurred during the three months ended June 30, 2025[268] Item 1A. Risk Factors This section states that there have been no material changes in the company's risk factors during the three months ended June 30, 2025 - No material changes in risk factors occurred during the three months ended June 30, 2025[269] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section reports that there were no unregistered sales of equity securities or use of proceeds to disclose - None[270] Item 3. Defaults Upon Senior Securities This section indicates that there are no defaults upon senior securities to report - Not applicable[271] Item 4. Mine Safety Disclosures This section states that mine safety disclosures are not applicable to the company - Not applicable[272] Item 5. Other Information This section reports no other information, specifically noting that no directors or executive officers adopted or terminated Rule 10b5-1 trading arrangements - No directors or executive officers adopted or terminated any Rule 10b5-1(c) trading arrangements during the three months ended June 30, 2025[275] Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including corporate governance documents, certifications, and XBRL documents - Exhibits include Restated and Amended Articles of Incorporation, Amended and Restated Bylaws, CEO and CFO certifications (Sarbanes-Oxley Act), and Inline XBRL documents[277]