JAKKS太平洋次季扭虧為盈 淨銷售額增16.9%至1.39億美元

UNITED
STATES

SECURITIES
AND EXCHANGE COMMISSION

Washington,
D.C. 20549

 

 

 

FORM
10-Q

 

 

 

(Mark
one)

 

☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For
the quarterly period ended June 30, 2026

 

or

 

☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For
the transition period from                            
  to                             

 

Commission
file number: 001-35448

 

JAKKS
Pacific, Inc.

(Exact Name of Registrant as Specified in Its Charter)

 

 Delaware   95-4527222
 (State or Other Jurisdiction of 
 Incorporation or Organization)   (I.R.S. Employer 
 Identification No.)
 

 

 2951
28th Street Santa Monica, California   90405
 (Address of Principal Executive Offices)   (Zip Code)
 

 

Registrant’s
Telephone Number, Including Area Code: (424) 268-9444

 

Indicate
by check mark whether the registrant: (1) has filed all reports required to be filed 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. Yes ☒ No ☐

 

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 during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes ☒ No ☐

 

Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company,
or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “non-accelerated
filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

 Large accelerated filer ☐ Accelerated filer ☒
 Non-accelerated filer ☐ Smaller reporting company ☒
 Emerging growth company ☐    
 

 

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 ☐ No ☒

 

Securities
registered pursuant to Section 12(g) of the Act:

 

 Title of each class   Trading Symbol(s)   Name of each exchange on which registered
 Common Stock $.001 Par Value   JAKK   The NASDAQ Global Select Market
 

 

The
number of shares outstanding of the issuer’s common stock is 11,445,012 as of July 31, 2026.

 

 

 

 

 

 

 

JAKKS
PACIFIC, INC. AND SUBSIDIARIES

TABLE
OF CONTENTS TO QUARTERLY REPORT ON FORM 10-Q

QUARTER
ENDED JUNE 30, 2026

ITEMS
IN FORM 10-Q

 

 Part I FINANCIAL INFORMATION    
 Item 1. Financial Statements (Unaudited)   3
   Condensed Consolidated Balance Sheets   3
   Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)   4
   Condensed Consolidated Statements of Stockholders’ Equity   5
   Condensed Consolidated Statements of Cash Flows   6
   Notes to Condensed Consolidated Financial Statements   7
 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations   19
 Item 3. Quantitative and Qualitative Disclosures About Market Risk   23
 Item 4. Controls and Procedures   23
        
 Part II OTHER INFORMATION    
 Item 1. Legal Proceedings   24
 Item 1A. Risk Factors   24
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds   None
 Item 3. Defaults Upon Senior Securities   None
 Item 4. Mine Safety Disclosures   None
 Item 5. Other Information   None
 Item 6. Exhibits   24
        
 Signatures   25
 Exhibit 31.1    
 Exhibit 31.2    
 Exhibit 32.1    
 Exhibit 32.2    
 

 

 

 
Table of Contents

 

 

PART
I – FINANCIAL INFORMATION

 

Item
1. Financial Statements

 

JAKKS
PACIFIC, INC. AND SUBSIDIARIES

CONDENSED
CONSOLIDATED BALANCE SHEETS

(In
thousands, except share amounts)

 

 
   
 June 30,  
 December 31, 

 
   
 2026  
 2025 

 
   
 (Unaudited)  
   

 
 Assets 
    
   

 
 Current assets 
    
   

 
 Cash and cash equivalents 
 $59,513  
 $52,197 

 
 Restricted cash 
  1,132  
  1,869 

 
 Accounts receivable, net of allowance for credit losses of $5,100 and $5,103 at June 30, 2026 and December 31, 2025, respectively 
  141,272  
  138,341 

 
 Inventory, net 
  58,272  
  59,805 

 
 Prepaid expenses and other assets 
  17,899  
  16,873 

 
 Total current assets 
  278,088  
  269,085 

 
 Property and equipment 
     
    

 
 Office furniture and equipment 
  11,413  
  10,189 

 
 Molds and tooling 
  141,236  
  134,771 

 
 Leasehold improvements 
  7,289  
  7,264 

 
 Total 
  159,938  
  152,224 

 
 Less accumulated depreciation and amortization 
  136,725  
  133,216 

 
 Property and equipment, net 
  23,213  
  19,008 

 
 Operating lease right-of-use assets, net 
  40,890  
  46,776 

 
 Other long-term assets 
  1,751  
  2,682 

 
 Deferred income tax assets, net 
  69,587  
  69,569 

 
 Goodwill 
  34,964  
  35,077 

 
 Total assets 
 $448,493  
 $442,197 

 
 Liabilities and Stockholders’ Equity 
     
    

 
 Current liabilities 
     
    

 
 Accounts payable 
 $69,737  
 $55,558 

 
 Accrued expenses 
  47,145  
  43,076 

 
 Reserve for sales returns and allowances 
  30,849  
  33,569 

 
 Income taxes payable 
  —  
  2,119 

 
 Short-term operating lease liabilities 
  14,406  
  13,784 

 
 Total current liabilities 
  162,137  
  148,106 

 
 Long-term operating lease liabilities 
  32,218  
  39,578 

 
 Accrued expenses – long term 
  5,288  
  4,463 

 
 Income taxes payable 
  975  
  945 

 
 Total liabilities 
  200,618  
  193,092 

 
   
     
    

 
 Stockholders’ Equity 
     
    

 
 Common stock, $0.001 par value; 100,000,000 shares authorized; 11,445,012 and 11,342,981 shares issued and outstanding at June 30, 2026 and December 31, 2025, respectively 
  11  
  11 

 
 Additional paid-in capital 
  307,218  
  302,408 

 
 Accumulated deficit 
  (45,160) 
  (41,021)

 
 Accumulated other comprehensive loss 
  (14,194) 
  (12,293)

 
 Total stockholders’ equity 
  247,875  
  249,105 

 
 Total liabilities and stockholders’ equity 
 $448,493  
 $442,197 

 

 

See
accompanying notes to condensed consolidated financial statements.

 

 
3

 
Table of Contents

 

 

JAKKS
PACIFIC, INC. AND SUBSIDIARIES

CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(In thousands, except per share data)

 

 
   
 Three Months Ended 

June 30, 
 (Unaudited)  
 Six Months Ended 
 June 30, 
 (Unaudited) 

 
   
 2026  
 2025  
 2026  
 2025 

 
 Net sales 
 $139,238  
 $119,094  
 $245,914  
 $232,347 

 
 Cost of sales: 
     
     
     
    

 
 Cost of goods 
  68,773  
  58,784  
  120,960  
  113,410 

 
 Royalty expense 
  23,072  
  19,509  
  39,985  
  37,677 

 
 Amortization of tools and molds 
  2,432  
  1,778  
  4,402  
  3,224 

 
 Cost of sales 
  94,277  
  80,071  
  165,347  
  154,311 

 
 Gross profit 
  44,961  
  39,023  
  80,567  
  78,036 

 
 Direct selling expenses 
  8,500  
  6,710  
  16,664  
  15,406 

 
 General and administrative expenses 
  36,442  
  34,974  
  69,306  
  68,935 

 
 Depreciation and amortization 
  161  
  122  
  313  
  235 

 
 Selling, general and administrative expenses 
  45,103  
  41,806  
  86,283  
  84,576 

 
 Loss from operations 
  (142) 
  (2,783) 
  (5,716) 
  (6,540)

 
 Other income (expense), net 
  6,976  
  25  
  7,001  
  30 

 
 Loss on debt extinguishment 
  —  
  (417) 
  —  
  (417)

 
 Interest income 
  788  
  395  
  1,268  
  757 

 
 Interest expense 
  (55) 
  (145) 
  (115) 
  (300)

 
 Income (loss) before provision for (benefit from) income taxes 
  7,567  
  (2,925) 
  2,438  
  (6,470)

 
 Provision for (benefit from) income taxes 
  1,704  
  (606) 
  855  
  (1,769)

 
 Net income (loss) 
  5,863  
  (2,319) 
  1,583  
  (4,701)

 
 Earnings (loss) per share - basic 
 $0.51  
 $(0.21) 
 $0.14  
 $(0.42)

 
 Shares used in earnings (loss) per share - basic 
  11,445  
  11,146  
  11,444  
  11,146 

 
 Earnings (loss) per share - diluted 
 $0.49  
 $(0.21) 
 $0.13  
 $(0.42)

 
 Shares used in earnings (loss) per share - diluted 
  11,872  
  11,146  
  11,803  
  11,146 

 
 Comprehensive income (loss) 
 $5,763  
 $1,318  
 $(318) 
 $(436)

 

 

See
accompanying notes to condensed consolidated financial statements.

 

 
4

 
Table of Contents

 

 

JAKKS
PACIFIC, INC. AND SUBSIDIARIES

CONDENSED
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY 

(In
thousands)

 

 
 Three and Six Months Ended June 30, 2026

 
 (Unaudited)

 
   
    
    
    
 Accumulated  
 JAKKS  
    
   

 
   
    
 Additional  
    
 Other  
 Pacific, Inc.  
 Non-  
 Total 

 
   
 Common  
 Paid-in  
 Accumulated  
 Comprehensive  
 Stockholders’  
 Controlling  
 Stockholders’ 

 
   
 Stock  
 Capital  
 Deficit  
 Loss  
 Equity  
 Interests  
 Equity 

 
 Balance, December 31, 2025 
 $11  
 $302,408  
 $(41,021) 
 $(12,293) 
 $249,105  
 $—  
 $249,105 

 
 Share-based compensation expense 
  —  
  3,081  
  —  
  —  
  3,081  
  —  
  3,081 

 
 Repurchase of common stock for employee tax withholding 
  —  
  (1,260) 
  —  
  —  
  (1,260) 
  —  
  (1,260)

 
 Cash dividend declared, $0.25 per share 
  —  
  —  
  (2,861) 
  —  
  (2,861) 
  —  
  (2,861)

 
 Net loss 
  —  
  —  
  (4,280) 
  —  
  (4,280) 
  —  
  (4,280)

 
 Foreign currency translation adjustment 
  —  
  —  
  —  
  (1,801) 
  (1,801) 
  —  
  (1,801)

 
 Balance, March 31, 2026 
  11  
  304,229  
  (48,162) 
  (14,094) 
  241,984  
  —  
  241,984 

 
 Share-based compensation expense 
  —  
  2,998  
  —  
  —  
  2,998  
  —  
  2,998 

 
 Repurchase of common stock for employee tax withholding 
  —  
  (9) 
  —  
  —  
  (9) 
  —  
  (9)

 
 Cash dividend declared, $0.25 per share 
  —  
  —  
  (2,861) 
  —  
  (2,861) 
  —  
  (2,861)

 
 Net income 
  —  
  —  
  5,863  
  —  
  5,863  
  —  
  5,863 

 
 Foreign currency translation adjustment 
  —  
  —  
  —  
  (100) 
  (100) 
  —  
  (100)

 
 Balance, June 30, 2026 
 $11  
 $307,218  
 $(45,160) 
 $(14,194) 
 $247,875  
 $—  
 $247,875 

 

 

 
 Three and Six Months Ended June 30, 2025

 
 (Unaudited)

 
   
    
    
    
 Accumulated  
 JAKKS  
    
   

 
   
    
 Additional  
    
 Other  
 Pacific, Inc.  
 Non-  
 Total 

 
   
 Common  
 Paid-in  
 Accumulated  
 Comprehensive  
 Stockholders’  
 Controlling  
 Stockholders’ 

 
   
 Stock  
 Capital  
 Deficit  
 Loss  
 Equity  
 Interests  
 Equity 

 
 Balance, December 31, 2024 
 $11  
 $297,198  
 $(39,692) 
 $(17,184) 
 $240,333  
 $500  
 $240,833 

 
 Share-based compensation expense 
  —  
  2,552  
  —  
  —  
  2,552  
  —  
  2,552 

 
 Repurchase of common stock for employee tax withholding 
  —  
  (3,819) 
  —  
  —  
  (3,819) 
  —  
  (3,819)

 
 Cash dividend declared, $0.25 per share 
  —  
  —  
  (2,786) 
  —  
  (2,786) 
  —  
  (2,786)

 
 Net loss 
  —  
  —  
  (2,382) 
  —  
  (2,382) 
  —  
  (2,382)

 
 Foreign currency translation adjustment 
  —  
  —  
  —  
  628  
  628  
  —  
  628 

 
 Balance, March 31, 2025 
  11  
  295,931  
  (44,860) 
  (16,556) 
  234,526  
  500  
  235,026 

 
 Share-based compensation expense 
  —  
  3,188  
  —  
  —  
  3,188  
  —  
  3,188 

 
 Repurchase of common stock for employee tax withholding 
  —  
  (9) 
  —  
  —  
  (9) 
  —  
  (9)

 
 Cash dividend declared, $0.25 per share 
  —  
  —  
  (2,786) 
  —  
  (2,786) 
  —  
  (2,786)

 
 Net loss 
  —  
  —  
  (2,319) 
  —  
  (2,319) 
  —  
  (2,319)

 
 Foreign currency translation adjustment 
  —  
  —  
  —  
  3,637  
  3,637  
  —  
  3,637 

 
 Balance, June 30, 2025 
 $11  
 $299,110  
 $(49,965) 
 $(12,919) 
 $236,237  
 $500  
 $236,737 

 

 

See
accompanying notes to condensed consolidated financial statements.

 

 
5

 
Table of Contents

 

 

JAKKS
PACIFIC, INC. AND SUBSIDIARIES

CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS

(In
thousands)

 

 
   
 Six Months Ended
 June 30, 

 
   
 (Unaudited) 

 
   
 2026  
 2025 

 
 Cash flows from operating activities 
    
   

 
 Net income (loss) 
 $1,583  
 $(4,701)

 
 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: 
     
    

 
 Provision for credit losses 
  137  
  422 

 
 Depreciation and amortization 
  4,715  
  3,459 

 
 Write-off and amortization of debt issuance costs 
  40  
  450 

 
 Share-based compensation expense 
  6,079  
  5,740 

 
 Loss on disposal of property and equipment 
  —  
  31 

 
 Deferred income taxes 
  (18) 
  — 

 
 Changes in operating assets and liabilities: 
     
    

 
 Accounts receivable 
  (3,068) 
  6,718 

 
 Inventory 
  1,533  
  (19,031)

 
 Prepaid expenses and other assets 
  406  
  (6,826)

 
 Accounts payable 
  15,363  
  6,252 

 
 Accrued expenses 
  4,215  
  (2,878)

 
 Reserve for sales returns and allowances 
  (2,720) 
  (6,701)

 
 Income taxes payable 
  (2,089) 
  (2,610)

 
 Other liabilities 
  (27) 
  3,744 

 
 Total adjustments 
  24,566  
  (11,230)

 
 Net cash provided by (used in) operating activities 
  26,149  
  (15,931)

 
 Cash flows from investing activities 
     
    

 
 Purchases of property and equipment 
  (10,104) 
  (4,470)

 
 Investments in employee deferred compensation trusts 
  (428) 
  (1,545)

 
 Net cash used in investing activities 
  (10,532) 
  (6,015)

 
 Cash flows from financing activities 
     
    

 
 Repurchase of common stock for employee tax withholding 
  (1,269) 
  (3,828)

 
 Cash dividend paid 
  (5,722) 
  (5,572)

 
 Payments for deferred issuance costs 
  (146) 
  — 

 
 Net cash used in financing activities 
  (7,137) 
  (9,400)

 
 Net increase (decrease) in cash, cash equivalents and restricted cash 
  8,480  
  (31,346)

 
 Effect of foreign currency translation 
  (1,901) 
  4,265 

 
 Cash, cash equivalents and restricted cash, beginning of period 
  54,066  
  70,137 

 
 Cash, cash equivalents and restricted cash, end of period 
 $60,645  
 $43,056 

 
 Supplemental disclosures of cash flow information: 
     
    

 
 Cash paid for income taxes, net 
 $(3,314) 
 $2,199 

 
 Cash paid for interest 
 $7  
 $— 

 

 

The Company received income tax refunds of $7.1 million and $6
thousand during the six months ended June 30, 2026 and 2025, respectively, and has included these amounts in cash paid during the period
for income taxes, net.

 

Supplemental
disclosures of non-cash activities:

 

During
the six months ended June 30, 2026 and 2025, the lease liability increased by $0.1 million and $2.5 million respectively, with a corresponding
increase to the ROU asset.

 

As
of June 30, 2026 and 2025, there was $5.9 million and $6.1 million, respectively, of property and equipment purchases included in accounts
payable.

 

See
accompanying notes to condensed consolidated financial statements.

 

 
6

 
Table of Contents

 

 

JAKKS
PACIFIC, INC. AND SUBSIDIARIES

NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

June
30, 2026

 

Note
1 — Basis of Presentation

 

The accompanying unaudited interim condensed consolidated financial
statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared
in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to
such rules and regulations. However, the Company believes that the disclosures are adequate to prevent the information presented from
being misleading. These financial statements should be read in conjunction with the financial statements and the notes thereto included
in the Company’s Annual Report on Form 10-K, which contains audited financial information for each of the three years in the period
ended December 31, 2025.

 

The
information provided in this report reflects all adjustments (consisting solely of normal recurring items) that are, in the opinion of
management, necessary to present fairly the financial position and the results of operations for the periods presented. Interim results
are not necessarily, especially given seasonality, indicative of results to be expected for a full year.

 

The
condensed consolidated financial statements include the accounts of JAKKS Pacific, Inc. and its wholly-owned subsidiaries (collectively,
“the Company”).

 

In
November 2024, the FASB issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation
Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.” The new guidance improves disclosures about a public
business entity’s expenses by requiring disaggregated disclosures of certain types of expenses, including purchases of inventory,
employee compensation, depreciation, intangible amortization and depletion, as applicable, for each income statement caption that includes
those expenses. In addition, the standard will require entities to define and disclose total selling expenses. The standard is effective
for public business entities such as the Company for annual periods beginning after December 15, 2026, and interim periods beginning
after December 15, 2027. Early adoption is permitted, and entities may apply the standard prospectively or retrospectively. The Company
is currently evaluating the impact of adopting this standard on its condensed consolidated financial statements and related disclosures.

 

In
July 2025, the FASB issued ASU 2025-05, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for
Accounts Receivable and Contract Assets.” The new guidance provides a practical expedient in developing reasonable and supportable
forecasts when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions
accounted for under Topic 606. Entities that elect the practical expedient may assume that current conditions as of the balance sheet
date do not change for the remaining life of the respective assets. The amendments will be effective for annual reporting periods beginning
after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption was permitted in both interim
and annual reporting periods in which financial statements have not yet been issued or made available for issuance. The Company adopted
this standard as of January 1, 2026. The adoption of this standard did not have a material impact on its condensed consolidated financial
statements and related disclosures.

 

In
September 2025, the FASB issued ASU 2025-06, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40):
Targeted Improvements to the Accounting for Internal-Use Software.” The new guidance removes all references to prescriptive and
sequential software development stages (referred to as “project stages”) throughout Subtopic 350-40. Therefore, an entity
is required to start capitalizing software costs when both of the following occur: 1. Management has authorized and committed to funding
the software project and 2. It is probable that the project will be completed and the software will be used to perform the function intended
(referred to as the “probable-to-complete recognition threshold”). In evaluating the probable-to-complete recognition threshold,
an entity is required to consider whether there is significant uncertainty associated with the development activities of the software
(referred to as “significant development uncertainty”). The amendments will be effective for all entities for annual reporting
periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted
as of the beginning of an annual reporting period. The Company is currently evaluating the impact of adopting this standard on its condensed
consolidated financial statements and related disclosures.

 

No
other accounting pronouncements were issued or adopted for the three and six months ended June 30, 2026 that materially impacted the
Company.

 

 
7

 
Table of Contents

 

 

JAKKS
PACIFIC, INC. AND SUBSIDIARIES

NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

June
30, 2026

 

Note
2 — Business Segments, Geographic Data and Sales by Major Customers

 

The
Company is a worldwide producer and marketer of children’s toys and other consumer products, principally engaged in the design,
development, production, marketing and distribution of its diverse portfolio of products. The Company’s segments are (i) Toys/Consumer
Products (“TCP”) and (ii) Costumes.

 

The
Toys/Consumer Products segment includes action figures, vehicles, play sets, plush products, dolls, electronic products, construction
toys, infant and pre-school toys, child-sized and hand-held role play toys and everyday costume play, foot-to-floor ride-on vehicles,
wagons, novelty toys, seasonal and outdoor products, kids’ indoor and outdoor furniture, and related products.

 

The
Costumes segment, under its Disguise branding, designs, develops, markets and sells a wide range of every-day and special occasion dress-up
costumes and related accessories in support of Halloween, Carnival, Children’s Day, Book Day/Week, and every-day/any-day costume
play.

 

The
Company’s Chief Executive Officer and Chief Financial Officer have been identified jointly as the Chief Operating Decision Maker
(“CODM”). The CODM manages and allocates resources on a segment basis. The determination of the two segments is consistent
with the financial information regularly reviewed by the CODM for purposes of evaluating performance. Results are regularly reviewed
in comparison with current budget, prior forecast, prior year and recent years’ performance in that quarter.

 

Segment performance is measured at the gross profit and operating
income (loss) level. All sales are made to external customers and general corporate expenses have been attributed to the segments based
upon relative sales volumes. Segment assets are primarily comprised of accounts receivable and inventories, net of applicable reserves
and allowances, goodwill and other assets. Certain assets which are not tracked by operating segment and/or that benefit multiple operating
segments have been allocated on the same basis.

 

Results
are not necessarily those which would be achieved if each segment was an unaffiliated business enterprise. Information by segment and
a reconciliation to reported amounts for the three and six months ended June 30, 2026 and 2025 and as of June 30, 2026 and December 31,
2025 are as follows (in thousands):

 

 
   
 Three Months Ended June 30, 

 
   
 2026  
 2025 

 
   
 TCP  
 Costumes  
 Total  
 TCP  
 Costumes  
 Total 

 
 Net Sales 
 $97,507  
 $41,731  
 $139,238  
 $80,379  
 $38,715  
 $119,094 

 
 Cost of Sales (A) 
  64,006  
  30,271  
  94,277  
  53,293  
  26,778  
  80,071 

 
 Gross Profit 
  33,501  
  11,460  
  44,961  
  27,086  
  11,937  
  39,023 

 
   
     
     
     
     
     
    

 
 Direct selling expenses 
  6,226  
  2,274  
  8,500  
  4,987  
  1,723  
  6,710 

 
 Product development and testing expenses 
  2,305  
  958  
  3,263  
  2,180  
  889  
  3,069 

 
 Divisional general and administrative expenses (A), (B) 
  5,845  
  2,993  
  8,838  
  5,805  
  2,956  
  8,761 

 
 Allocated headquarter general & administrative expenses (A), (C) 
  17,037  
  7,465  
  24,502  
  15,782  
  7,484  
  23,266 

 
 Income (loss) from operations 
  2,088  
  (2,230) 
  (142) 
  (1,668) 
  (1,115) 
  (2,783)

 
 Other income (expense), net 
     
     
  6,976  
     
     
  25 

 
 Loss on debt extinguishment 
     
     
  —  
     
     
  (417)

 
 Interest income 
     
     
  788  
     
     
  395 

 
 Interest expense 
     
     
  (55) 
     
     
  (145)

 
 Income (loss) before provision for (benefit from) income taxes 
     
     
 $7,567  
     
     
 $(2,925)

 
   
     
     
     
     
     
    

 (A)
 Includes depreciation and amortization
  
 $
 2,538
  
  
 $
 55
  
  
 $
 2,593
  
  
 $
 1,858
  
  
 $
 42
  
  
 $
 1,900
  

 
 

 (B) Consist mainly of payroll and related expenses, rent, depreciation and other general and administrative expenses.

 

 (C) Consist mainly of payroll related expenses, rent, depreciation and other general and administrative expenses.

 

 
8

 
Table of Contents

 

 

JAKKS
PACIFIC, INC. AND SUBSIDIARIES

NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

June
30, 2026

 

 
   
 Six Months Ended June 30, 

 
   
 2026  
 2025 

 
   
 TCP  
 Costumes  
 Total  
 TCP  
 Costumes  
 Total 

 
 Net Sales 
 $197,602  
 $48,312  
 $245,914  
 $187,817  
 $44,530  
 $232,347 

 
 Cost of Sales (A) 
  130,119  
  35,228  
  165,347  
  122,532  
  31,779  
  154,311 

 
 Gross Profit 
  67,483  
  13,084  
  80,567  
  65,285  
  12,751  
  78,036 

 
   
     
     
     
     
     
    

 
 Direct selling expenses 
  13,181  
  3,483  
  16,664  
  12,954  
  2,452  
  15,406 

 
 Product development and testing expenses 
  4,309  
  1,096  
  5,405  
  4,195  
  1,273  
  5,468 

 
 Divisional general and administrative expenses (A), (B) 
  11,143  
  5,640  
  16,783  
  11,362  
  6,188  
  17,550 

 
 Allocated headquarter general & administrative expenses (A), (C) 
  38,468  
  8,963  
  47,431  
  37,522  
  8,630  
  46,152 

 
 Income (loss) from operations 
  382  
  (6,098) 
  (5,716) 
  (748) 
  (5,792) 
  (6,540)

 
 Other income (expense), net 
     
     
  7,001  
     
     
  30 

 
 Loss on debt extinguishment 
     
     
  —  
     
     
  (417)

 
 Interest income 
     
     
  1,268  
     
     
  757 

 
 Interest expense 
     
     
  (115) 
     
     
  (300)

 
 Income (loss) before provision for (benefit from) income taxes 
     
     
 $2,438  
     
     
 $(6,470)

 
   
     
     
     
     
     
    

 (A)
 Includes depreciation and amortization
  
 $
 4,645
  
  
 $
 70
  
  
 $
 4,715
  
  
 $
 3,409
  
  
 $
 50
  
  
 $
 3,459
  

 
 

 (B) Consist mainly of payroll and related expenses, rent, depreciation and other general and administrative expenses.

 

 (C) Consist mainly of payroll related expenses, rent, depreciation and other general and administrative expenses.

 

 
   
 June 30,  
 December 31, 

 
   
 2026  
 2025 

 
 Assets 
    
   

 
 Toys/Consumer Products 
 $381,647  
 $419,064 

 
 Costumes 
  66,846  
  23,133 

 
   
 $448,493  
 $442,197 

 

 

 
9

 
Table of Contents

 

 

JAKKS
PACIFIC, INC. AND SUBSIDIARIES

NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

June
30, 2026

 

Net
revenues are categorized based upon location of the customer, while long-lived assets are categorized based upon the location of the
Company’s assets. The following tables present information about the Company by geographic area as of June 30, 2026 and December
31, 2025 and for the three and six months ended June 30, 2026 and 2025 (in thousands):

 

 
   
 June 30,  
 December 31, 

 
   
 2026  
 2025 

 
 Long-lived Assets 
    
   

 
 United States 
 $38,486  
 $42,788 

 
 China 
  19,935  
  16,659 

 
 United Kingdom 
  2,903  
  3,073 

 
 Hong Kong 
  1,489  
  1,853 

 
 Others combined 
  1,290  
  1,411 

 
   
 $64,103  
 $65,784 

 

 

 
   
 Three Months Ended  
 Six Months Ended 

 
   
 June 30,  
 June 30, 

 
   
 2026  
 2025  
 2026  
 2025 

 
 Net Sales by Customer Area 
    
    
    
   

 
 United States 
 $108,251  
 $86,990  
 $182,887  
 $175,934 

 
 Europe 
  16,021  
  14,657  
  33,400  
  26,467 

 
 Canada 
  7,080  
  8,826  
  10,072  
  12,105 

 
 Latin America 
  4,137  
  6,047  
  11,099  
  13,506 

 
 Asia 
  2,216  
  1,448  
  4,151  
  2,199 

 
 Australia & New Zealand 
  1,533  
  886  
  4,002  
  1,499 

 
 Middle East & Africa 
  —  
  240  
  303  
  637 

 
   
 $139,238  
 $119,094  
 $245,914  
 $232,347 

 

 

Major
Customers

 

Net
sales to major customers globally for the three and six months ended June 30, 2026 and 2025 were as follows (in thousands, except for
percentages):

 

 
   
 Three Months Ended June 30,  
 Six Months Ended June 30, 

 
   
 2026  
 2025  
 2026  
 2025 

 
   
    
 Percentage  
    
 Percentage  
    
 Percentage  
    
 Percentage 

 
   
 Amount  
 of Net Sales  
 Amount  
 of Net Sales  
 Amount  
 of Net Sales  
 Amount  
 of Net Sales 

 
 Walmart (*) 
 $47,700  
  34.3% 
 $33,320  
  28.0% 
 $74,807  
  30.4% 
 $69,999  
  30.1%

 
 Target 
  32,760  
  23.5  
  30,630  
  25.7  
  59,405  
  24.2  
  60,074  
  25.9 

 
   
 $80,460  
  57.8% 
 $63,950  
  53.7% 
 $134,212  
  54.6% 
 $130,073  
  56.0%

 

 

(*)During
the year ended December 31, 2025, the Company determined that, in prior periods, net sales to two subsidiaries of Walmart Inc., were
not aggregated with net sales to Walmart Inc. in the major customer disclosure under ASC 280-10-50-42. Because these entities are under
common control, such sales should be presented as revenues from a single customer. Accordingly, prior-period amounts have been revised
to aggregate these net sales amounts to Walmart Inc. and its subsidiaries. This revision affected only the major customer disclosure
and had no impact on the Company’s condensed consolidated financial statements for any period presented. The Company concluded
that the revision was not material to previously issued financial statements.

 

No
other customer accounted for more than 10% of the Company’s total net sales.

 

The
concentration of the Company’s business with a relatively small number of customers may expose the Company to material adverse
effects if one or more of its large customers were to experience financial difficulty. The Company performs ongoing credit evaluations
of its top customers and maintains an allowance for potential credit losses.

 

 
10

 
Table of Contents

 

 

JAKKS
PACIFIC, INC. AND SUBSIDIARIES

NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

June
30, 2026

 

Note
3 — Inventory

 

Inventory,
which includes the ex-factory cost of goods, capitalized warehouse costs, and in-bound freight and duty, is valued at the lower of cost
or net realizable value, net of inventory obsolescence reserve, and consists of the following (in thousands):

 

 
   
 June 30,  
 December 31, 

 
   
 2026  
 2025 

 
 Finished goods 
 $58,272  
 $59,805 

 

 

The
inventory obsolescence reserve was $1.8 million and $2.4 million as of June 30, 2026 and December 31, 2025, respectively.

 

Note
4 — Revenue Recognition and Reserve for Sales Returns and Allowances

 

The
Company’s contracts with customers only include one performance obligation (i.e., sale of the Company’s products). Revenue
is recognized in the gross amount at a point in time when delivery is completed and control of the promised goods is transferred to the
customers. Revenue is measured as the amount of consideration the Company expects to be entitled to in exchange for those goods. The
Company’s contracts do not involve financing elements as payment terms with customers are less than one year. Further, because
revenue is recognized at the point in time goods are sold to customers, there are no contract assets or contract liability balances.

 

The
Company disaggregates its revenues from contracts with customers by reporting segment: Toys/Consumer Products and Costumes. The Company
further disaggregates revenues by major geographic regions (See Note 2 - Business Segments, Geographic Data and Sales by Major Customers,
for further information).

 

The
Company offers various discounts, pricing concessions, and other allowances to customers, all of which are considered in determining
the transaction price. Certain discounts and allowances are fixed and determinable at the time of sale and are recorded at the time of
sale as a reduction to revenue. Other discounts and allowances can vary and are determined at management’s discretion (variable
consideration). Specifically, the Company occasionally grants discretionary credits to facilitate markdowns and sales of slow-moving
merchandise, and consequently accrues an allowance based on historic credits and management estimates. The Company also participates
in cooperative advertising arrangements with some customers, whereby it allows a discount from invoiced product amounts in exchange for
customer-purchased advertising that features the Company’s products. Generally, these allowances range from 1% to 30% of gross
sales and are generally based upon product purchases or specific advertising campaigns. Such allowances are accrued when the related
revenue is recognized. To the extent these cooperative advertising arrangements provide a distinct benefit at fair value, they are accounted
for as direct selling expenses, otherwise they are recorded as a reduction to revenue. Further, while the Company generally does not
allow product returns, the Company does make occasional exceptions to this policy and consequently records a sales return allowance based
upon historic return amounts and management estimates. These allowances (variable consideration) are estimated using the expected value
method and are recorded at the time of sale as a reduction to revenue. The Company adjusts its estimate of variable consideration at
least quarterly or when facts and circumstances used in the estimation process may change. The variable consideration is not constrained
as the Company has sufficient history on the related estimates and does not believe there is a risk of significant revenue reversal.

 

Sales
commissions are expensed when incurred as the related revenue is recognized at a point in time and therefore the amortization period
is less than one year. As a result, these costs are recorded as direct selling expenses, as incurred. For the three and six months ended
June 30, 2026 sales commissions were $0.5 million and $1.0 million, respectively. For the three and six months ended June 30, 2025 sales
commissions were $0.5 million and $0.9 million, respectively.

 

Shipping
and handling activities are considered part of the Company’s obligation to transfer the products and therefore are recorded as
direct selling expenses, as incurred. For the three and six months ended June 30, 2026, shipping and handling costs were $1.6 million
and $3.4 million, respectively. For the three and six months ended June 30, 2025, shipping and handling costs were $1.7 million and $3.9
million, respectively.

 

 
11

 
Table of Contents

 

 

JAKKS
PACIFIC, INC. AND SUBSIDIARIES

NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

June
30, 2026

 

Note
5 — Credit Facilities

 

JPMorgan
Chase

 

On
June 2, 2021, the Company and certain of its subsidiaries, as borrowers, entered into a Credit Agreement (the “JPMorgan ABL Credit
Agreement”) with JPMorgan Chase Bank, N.A., as agent and lender, providing a $67.5 million senior secured revolving credit facility
(the “JPMorgan ABL Facility”) maturing in June 2026.

 

On
June 24, 2025, in connection with the execution of a new credit facility with BMO Bank N.A., the Company voluntarily terminated the JPMorgan
ABL Facility. At the time of termination, there were no borrowings outstanding under the JPMorgan ABL Facility. The termination of the
JPMorgan ABL Facility did not result in any prepayment penalties or early termination fees. Unamortized debt issuance costs associated
with the JPMorgan ABL Facility were written off and recorded as a loss on extinguishment of debt in the amount of $0.4 million.

 

The
JPMorgan ABL Facility was replaced with a new senior secured revolving credit facility with BMO Bank N.A., as described below.

 

BMO
Bank

 

On
June 24, 2025, the Company and certain of its subsidiaries entered into a new Credit Agreement (the “BMO Credit Agreement”)
with BMO Bank N.A., as administrative agent, and a syndicate of lenders. The BMO Credit Agreement provides for a senior secured revolving
credit facility (the “Revolving Facility”) with aggregate commitments of up to $70.0 million, including a $10.0 million
sublimit for swingline loans and a $25.0 million sublimit for letters of credit. The Revolving Facility matures on June 24, 2030, unless
extended pursuant to its terms. Capitalized terms used below have the meanings assigned to them in the BMO Credit Agreement.

 

Borrowings
under the Revolving Facility bear interest, at the Company’s election, at either (i) the Adjusted Term Secured Overnight Financing
Rate (“SOFR”) plus an applicable margin or (ii) the Base Rate plus an applicable margin. The applicable margin varies based
on the Company’s Total Net Leverage Ratio and ranges from 1.50% to 2.00% for SOFR loans and from 0.50% to 1.00% for Base Rate loans.
The Company is also subject to a commitment fee on the unused portion of the Revolving Facility ranging from 0.20% to 0.30%, and a fee
on outstanding letters of credit ranging from 1.50% to 2.00%.

 

The
BMO Credit Agreement contains customary affirmative and negative covenants, including limitations on indebtedness, liens, investments,
asset sales, and dividends. Financial covenants include a minimum Consolidated Interest Coverage Ratio of 3.00 to 1.00, and maximum Total
Net Leverage Ratio of 2.00 to 1.00, tested quarterly.

 

The
obligations under the BMO Credit Agreement are guaranteed by certain of the Company’s U.S., Canadian and Hong Kong subsidiaries
and are secured by substantially all of the assets of the Company and certain of its subsidiaries, including equity interests in certain
subsidiaries, subject to certain customary exclusions.

 

As
of June 30, 2026, the amount of outstanding borrowings was nil and the total excess borrowing availability was $68.7 million.

 

As
of June 30, 2026, off-balance sheet arrangements include letters of credit issued by BMO of $1.3 million and JPMorgan of $0.9 million.

 

As
of June 30, 2026, the Company was in compliance with the financial covenants under the BMO Credit Agreement.

 

 
12

 
Table of Contents

 

 

JAKKS
PACIFIC, INC. AND SUBSIDIARIES

NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

June
30, 2026

 

Note
6 — Income Taxes

 

The
Company’s income tax expense of $1.7 million for the three months ended June 30, 2026, reflects an effective tax rate of 22.5%.
The Company’s income tax benefit of $0.6 million for the three months ended June 30, 2025, reflects an effective tax rate of 20.7%.
The increase in tax expense for the quarter ended June 30, 2026 compared to the corresponding period in 2025 was primarily attributable
to higher pretax earnings and an increase in tax expense from discrete items recognized during the current-year period.

 

The
Company’s income tax expense of $0.9 million for the six months ended June 30, 2026 reflects an effective tax rate of 35.1%. The
Company’s income tax benefit of $1.8 million for the six months ended June 30, 2025 reflects an effective tax rate of 27.3%. The
increase in tax expense during the six months ended June 30, 2026 compared to the corresponding period in 2025 was primarily attributable
to higher pretax earnings and an increase in tax expense from discrete items recognized during the current-year period.

 

From
time to time, in the normal course of business, the Company may be audited by federal, state and foreign tax authorities. At this time,
the Company has at least one audit underway. The Company currently cannot assess the impact of the outcome on its condensed consolidated
financial statements.

 

Note
7 — Earnings (Loss) Per Share

 

The following table is a reconciliation of the
weighted average shares used in the computation of earnings (loss) per share for the periods presented (in thousands, except per share
data):

 

 
   
 Three Months Ended
 June 30,  
 Six Months Ended
 June 30, 

 
 Earnings (loss) per share - basic and diluted 
 2026  
 2025  
 2026  
 2025 

 
 Net income (loss) 
 $5,863  
 $(2,319) 
 $1,583  
 $(4,701)

 
 Weighted average common shares outstanding - basic 
  11,445  
  11,146  
  11,444  
  11,146 

 
 Earnings (loss) per share - basic 
 $0.51  
 $(0.21) 
 $0.14  
 $(0.42)

 
 Weighted average common shares outstanding - diluted 
  11,872  
  11,146  
  11,803  
  11,146 

 
 Earnings (loss) per share - diluted 
 $0.49  
 $(0.21) 
 $0.13  
 $(0.42)

 

 

Basic earnings (loss) per share is calculated using
the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per share is calculated using the
weighted average number of common shares and common share equivalents outstanding during the period (which consist of restricted stock
units to the extent they are dilutive). Potentially dilutive restricted stock units of 6,117 and 49,837 for the three and six months ended
June 30, 2026, respectively, were excluded from the computation of diluted loss per share since they would have been anti-dilutive.

 

Potentially dilutive restricted stock units of
250,349 and 340,270 for the three and six months ended June 30, 2025, respectively, were excluded from the computation of diluted loss
per share since they would have been anti-dilutive.

 

 
13

 
Table of Contents

 

 

JAKKS
PACIFIC, INC. AND SUBSIDIARIES

NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

June
30, 2026

 

Note
8 — Common Stock 

 

Common
Stock

 

All
issuances of common stock, including those issued pursuant to restricted stock or unit grants, are issued from the Company’s authorized
but not issued and outstanding shares.

 

During
2026, certain employees, including one executive officer, surrendered an aggregate of 75,051 shares of restricted stock units for $1.3
million to cover income taxes due for the vesting of restricted shares. Additionally, an aggregate of 30,511 shares of restricted stock
granted in 2023, 2024 and 2025 with a value of approximately $0.6 million was forfeited during 2026.

 

During
2025, certain employees, including two executive officers, surrendered an aggregate of 136,071 shares of restricted stock units for $3.8
million to cover income taxes due for the vesting of restricted shares. Additionally, an aggregate of 3,549 shares of restricted stock
granted in 2022, 2023 and 2024 with a value of approximately $0.1 million was forfeited during 2025.

 

A
quarterly dividend of $0.25 per share for owners of record as of May 29, 2026 was declared on April 29, 2026 and paid on June 29, 2026.

 

At
the Market Offering

 

On
July 1, 2022, the Company entered into an At the Market Issuance Sales Agreement (“ATM Agreement”) with B. Riley, as agent
pursuant to which the Company may, from time to time, sell shares of its common stock, up to $75 million of common stock, in one or more
offerings in amounts, prices and at terms that the Company will determine at the time of the offering.

 

As
of June 30, 2026, the Company did not sell any shares of common stock under the ATM Agreement.

 

On April 30, 2026, the Company filed with the SEC a shelf registration
statement pursuant to which it may issue, from time to time, up to $150.0 million of securities (which will be reduced by any amount of
securities sold pursuant to the ATM Agreement) consisting of, or any combination of, common stock, preferred stock, debt securities, warrants,
rights and/or units, in one or more offerings in amounts, prices and at terms that the Company will determine at the time of the offering.
This registration statement replaced an essentially similar one filed in October 2022, which expired by law on its three-year anniversary.
No shares were sold under such prior registration statement.

 

As
of June 30, 2026, the Company has not sold any securities pursuant to its shelf registration statement.

 

Note
9 — Goodwill

 

The
Company applies a fair value-based impairment test to the carrying value of goodwill and indefinite-lived intangible assets on an annual
basis and on an interim basis, if certain events or circumstances indicate that an impairment loss may have been incurred. Goodwill impairment
exists when the estimated fair value of goodwill is less than its carrying value. For the three months ended June 30, 2026, there were
no events or circumstances that indicated that an impairment loss may have been incurred.

 

Based on the Company’s April 1 annual assessment,
it determined that the fair value of the reporting unit containing goodwill exceeded its carrying amount.

 

No goodwill impairment was determined to have occurred
for the six months ended June 30, 2026 and 2025.

 

 
14

 
Table of Contents

 

 

JAKKS
PACIFIC, INC. AND SUBSIDIARIES

NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

June
30, 2026

 

Note
10 — Comprehensive Income (Loss)

 

The
table below presents the components of the Company’s comprehensive income (loss) for the three and six months ended June 30, 2026
and 2025 (in thousands):

 

 
   
 Three Months Ended  
 Six Months Ended 

 
   
 June 30,  
 June 30, 

 
   
 2026  
 2025  
 2026  
 2025 

 
 Net income (loss) 
 $5,863  
 $(2,319) 
 $1,583  
 $(4,701)

 
 Other comprehensive income (loss): 
     
     
     
    

 
 Foreign currency translation adjustment 
  (100) 
  3,637  
  (1,901) 
  4,265 

 
 Comprehensive income (loss) 
 $5,763  
 $1,318  
 $(318) 
 $(436)

 

 

Note
11 — Litigation and Contingencies

 

The
Company is a party to, and certain of its property is the subject of, various pending claims and legal proceedings that routinely arise
in the ordinary course of its business. The Company accrues for losses when the loss is deemed probable and the liability can reasonably
be estimated. Where a liability is probable and there is a range of estimated loss with no best estimate in the range, the Company records
the minimum estimated liability related to the claim. As additional information becomes available, the Company assesses the potential
liability related to its pending litigation and revises its estimates.

 

In
the normal course of business, the Company may provide certain indemnifications and/or other commitments of varying scope to a) its licensors,
customers and certain other parties, including against third-party claims of intellectual property infringement, and b) its officers,
directors and employees, including against third-party claims regarding the periods in which they serve in such capacities with the Company.
The duration and amount of such obligations is, in certain cases, indefinite. The Company’s director’s and officer’s
liability insurance policy may, however, enable it to recover a portion of any future payments related to its officer, director or employee
indemnifications. For the past five years, costs related to director and officer indemnifications have not been significant. Other than
certain liabilities recorded in the normal course of business related to royalty payments due to the Company’s licensors, no liabilities
have been recorded for indemnifications and/or other commitments.

 

 
15

 
Table of Contents

 

 

JAKKS
PACIFIC, INC. AND SUBSIDIARIES

NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

June
30, 2026

 

Note
12 — Share-Based Payments

 

The
Company’s 2002 Stock Award and Incentive Plan (the “Plan”), as amended, provides for the awarding of stock options,
restricted stock and restricted stock units to certain key employees, executive officers and non-employee directors. Current awards under
the Plan include grants to executive officers and certain key employees of restricted stock units, with vesting contingent upon the completion
of specified service periods ranging from one to four years and/or (b) meeting certain financial performance and/or market-based metrics.
Shares for the restricted stock units are not issued until they vest.

 

The
following table summarizes the total share-based compensation expense recognized for the three and six months ended June 30, 2026 and
2025 (in thousands):

 

 
   
 Three Months Ended  
 Six Months Ended 

 
   
 June 30,  
 June 30, 

 
   
 2026  
 2025  
 2026  
 2025 

 
 Share-based compensation expense 
 $2,998  
 $3,188  
 $6,079  
 $5,740 

 

 

Restricted
Stock Units

 

The
following table summarizes the RSU award activity for awards with service conditions for the six months ended June 30, 2026:

 

 
   
 2026 

 
   
 Number of 
 Shares  
 Weighted 
 Average
 Grant Date 

Fair 
 Value 

 
 Outstanding, December 31, 2025 
  1,117,068  
 $21.03 

 
 Granted 
  263,556  
  16.88 

 
 Vested 
  (177,082) 
  24.83 

 
 Forfeited 
  (30,511) 
  18.27 

 
 Outstanding, June 30, 2026 
  1,173,031  
  19.59 

 

 

The
following table summarizes the RSU award activity for awards with market conditions for the six months ended June 30, 2026:

 

 
   
 2026 

 
   
 Number of 
 Shares  
 Weighted 
 Average
 Grant Date 

Fair 
 Value 

 
 Outstanding, December 31, 2025 
  112,500  
 $20.79 

 
 Granted 
  —  
  — 

 
 Vested 
  —  
  — 

 
 Forfeited 
  —  
  — 

 
 Outstanding, June 30, 2026 
  112,500  
  20.79 

 

 

As
of June 30, 2026, there was $16.3 million of total unrecognized compensation cost related to non-vested restricted stock units, which
is expected to be recognized over a weighted-average period of 1.9 years.

 

As
of June 30, 2026, the fair market value of non-vested restricted stock units was $29.9 million.

 

 
16

 
Table o