Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations.

​

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995

​

Certain statements contained in this section and elsewhere in this Form 10-Q constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve a number of known and unknown risks, uncertainties and other factors which may cause our actual results, performance, or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Please see "Note Regarding Forward-Looking Statements" and "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2025, for more information. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statements were made and are not guarantees of future performance.

​

Overview

​

Sterling Real Estate Trust d/b/a Sterling Multifamily Trust ("Sterling," "the "Trust" or the "Company") is a registered, but unincorporated business trust organized in North Dakota in December 2002. Sterling has elected to be taxed as a Real Estate Investment Trust ("REIT") under Sections 856-860 of the Internal Revenue Code, which requires that 75% of the assets of a REIT must consist of real estate assets and that 75% of its gross income must be derived from real estate. The net income of the REIT is allocated in accordance with stock ownership in the same fashion as a regular corporation. Our real estate portfolio consisted of 176 properties containing 12,389 apartment units and approximately 1,159,000 square feet of leasable commercial space as of March 31, 2026. The portfolio has a net book value of real estate investments (cost less accumulated depreciation) of approximately $928,284, which includes construction in progress. Sterling's current acquisition strategy and focus is on multifamily apartment properties.

​

Critical Accounting Estimates

​

Below are accounting policies and estimates that management believes are critical to the preparation of the unaudited consolidated financial statements included in this Report. Certain accounting policies used in the preparation of these consolidated financial statements are particularly important for an understanding of the financial position and results of operations presented in the historical consolidated financial statements included in this Report. A summary of significant accounting policies is also provided in the aforementioned notes to our consolidated financial statements (see note 2 to the unaudited consolidated financial statements). These policies require the application of judgment and assumptions by management and, as a result, are subject to a degree of uncertainty. Due to this uncertainty, actual results could differ materially from estimates calculated and utilized by management.

​

Impairment of Real Estate Investments

​

The Trust's investment properties are reviewed for potential impairment at the end of each reporting period or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. To assess potential impairment of the real estate portfolio, the Trust initially performs a screen test and reviews the net book value (NBV) of each property, compares the trailing twelve months (T12) net operating income (NOI) against the prior year's T12 NOI, and evaluates key assumptions, including the anticipated hold period and applicable capitalization rates, to determine whether any indicators of impairment exist.

​

​

Examples of situations considered to be impairment indicators include, but are not limited to:

​

If the presence of one or more impairment indicators as described above is identified with respect to an investment property, the asset is tested for recoverability by comparing its carrying value to the estimated future undiscounted cash flows. An investment property is considered to be impaired when the estimated future undiscounted cash flows are less than its current carrying value. When performing a test for recoverability or estimating the fair value of an impaired investment property, the Trust makes complex or subjective assumptions which include, but are not limited to:

​

To the extent impairment has occurred, the Trust will record an impairment charge calculated as the excess of the carrying value of the asset over its fair value. Based on evaluation, there were no impairment losses during the three months ended March 31, 2026 and 2025.

​

There have been no material changes in our Critical Accounting Policies as disclosed in Note 2 to our financial statements for the three months ended March 31, 2026 included elsewhere in this report.

​

Acquisition of Real Estate Investments

​

The Company allocates the purchase price of properties that meet the definition of an asset acquisition to net tangible and identified intangible assets acquired based on their relative fair values. In making estimates of relative fair values for purposes of allocating purchase price, the Company utilizes a number of sources, including independent appraisals that may be obtained in connection with the acquisition or financing of the respective property, our own analysis of recently acquired and existing comparable properties in our portfolio and other market data. The Company also considers information obtained about each property as a result of its pre-acquisition due diligence, marketing, and leasing activities in estimating the relative fair value of the tangible and intangible assets acquired.

​

REIT Status

​

We operate in a manner intended to enable us to continue to qualify as a REIT under Sections 856-860 of the Internal Revenue Code. Under those sections, a REIT which distributes at least 90% of its REIT taxable income, excluding net capital gains, as a distribution to its shareholders each year and which meets certain other conditions will not be taxed on that portion of its taxable income which is distributed to its shareholders. We intend to distribute to our shareholders 100% of our taxable income. Therefore, no provision for Federal income taxes is required. If we fail to distribute the required amount of income to our shareholders, we would fail to qualify as a REIT and substantial adverse tax consequences may result.

​

​

Principal Business Activity

​

Sterling currently directly owns 176 properties. The Trust's 142 residential properties are located in North Dakota, Minnesota, Missouri, Nebraska, and Texas and are principally multifamily apartment buildings. The Trust owns 34 commercial properties primarily located in North Dakota with others located in Arkansas, Colorado, Iowa, Louisiana, Michigan, Minnesota, Mississippi, Nebraska, and Wisconsin. The commercial properties include retail, office, industrial, and medical properties. The Trust's mix of properties is 84.4% residential and 15.6% commercial (based on cost) with a total carrying value of $928,284 at March 31, 2026. Currently our focus is limited to multifamily apartment properties. We will consider unsolicited offers for purchase of commercial properties on a case-by-case basis.

​

The following table represents the number of properties the Trust owns in each state as of March 31, 2026

​

​

​

Results of Operations

​

Management Highlights

​

​

Results of Operations for the Three Months Ended March 31, 2026 and 2025

​

​

Revenues

​

Property revenues of $44,147 for the three months ended March 31, 2026 increased $1,967 or 4.7% in comparison to the same period in 2025. Residential property revenues increased $2,108 and commercial property revenues decreased ($141).

​

The following table illustrates the occupancy percentage for the periods ended indicated:

​

​

Residential revenues for the three months ended March 31, 2026 increased $2,108 or 5.7% in comparison to the same period for 2025. The increase is primarily due to the acquisition of three multi-family properties offset by the sale of one multi-family property during the 12 months ended March 31, 2026. Residential revenues comprised 89.0% of total revenues for the three months ended March 31, 2026 compared to 88.2% of total revenues for the three months ended March 31, 2025. The residential occupancy rates for the three months ended March 31, 2026 increased 0.5%. This increase

in occupancy was primarily driven by enhanced property-level execution including proactive resident engagement and retention strategies, targeted leasing initiatives, and strengthened digital marketing and online reputation management across the portfolio.

For the three months ended March 31, 2026, total commercial revenues decreased ($141) or (2.8%) in comparison to the same period for 2025. The decrease was primarily attributed to the disposition of three commercial properties in 2025. The commercial occupancy rates for the three months ended March 31, 2026 increased 0.7%.

​

Expenses

​

Residential expenses from operations of $21,934 during the three months ended March 31, 2026 increased $1,778, or 8.8% in comparison to the same period in 2025. The increase in expenses is primarily attributable to property acquisitions during the 12 months ended March 31, 2026.

​

Commercial expenses from operations of $1,421 during the three months ended March 31, 2026 decreased ($119) or (7.7%) in comparison to the same period in 2025. The decrease is primarily attributable to the disposition of three commercial properties in 2025.

​

Interest expense of $7,083 during the three months ended March 31, 2026 increased $813 or 13.0% in comparison to the same period in 2025. Interest expense increased due to the increase in the debt balance as a result of acquisitions and refinances as well as elevated interest rates. Interest expense as a percentage of rental income for the three months ended March 31, 2026 and 2025 was 16.0% and 14.9%, respectively.

​

Depreciation and amortization expense of $7,755 during the three months ended March 31, 2026 increased $730 or 10.4% in comparison to the same period in 2025. Amortization expense will continue to decrease as lease intangibles become fully amortized but will increase upon acquisitions of intangible assets. Depreciation and amortization expense as a percentage of rental income for the three months ended March 31, 2026 and 2025 was 17.6% and 16.8%, respectively.

​

REIT administration expenses of $1,601 during the three months ended March 31, 2026 increased $101 or 6.7% compared to the same period in 2025. The increase is primarily attributable to the increase in assets due to the acquisitions closed during the twelve months ended March 31, 2026.

​

Other (income) expense was ($1,418) for the three months ended March 31, 2026, compared to expense of $782 for the same period in 2025, a favorable change of $2,200, or 281.3%. The change was primarily driven by $1,280 of income recognized in the current quarter resulting from the correction of depreciation expense that had been recorded using an incorrect methodology in prior periods. Management evaluated the cumulative impact of the depreciation error on previously issued financial statements and concluded that the effects on those prior periods were not material; accordingly, the cumulative correction was recorded in the current period. The Company also recognized a gain of $239 from an insurance claim during the quarter and a $181 favorable adjustment from the refund of previously accrued real estate taxes following the successful contest of valuations for certain properties. The remainder of the favorable change was attributable to lower miscellaneous non-operating expenses in the current period, none of which were individually significant. Each of the items described above was non-recurring in nature.

​

Construction in Progress and Development Projects

​

The Trust capitalizes direct and certain indirect project costs incurred during the development period such as construction, insurance, architectural, legal, interest and other financing costs, and real estate taxes. At such time as the development is considered substantially complete, the capitalization of certain indirect costs such as real estate taxes and interest and financing costs cease, and all project-related costs included in construction in process are reclassified to land and building and other improvements.

​

Construction in progress as of March 31, 2026, consists primarily of construction at several residential properties located in North Dakota and Minnesota. The Rosedale Estates has a project for a parking structure and parking lot. The current project budgeted is $7,827, of which $6,782 has been incurred. Stony Brook has an ongoing exterior remodel project with a budget of $4,278 of which $4,061 has been incurred. Both of these projects are expected to be completed and placed in

service during the third quarter of 2026. Remaining construction in progress projects are primarily related to building and roof system, roof replacements on multiple residential properties, residential exterior window systems, and new deck systems on multiple residential properties.

​

The Trust has one on-going development through ventures in unconsolidated affiliates.

​

Emory North Liberty is a development project that is underway in North Liberty, Iowa. As of March 31, 2026, phase II is in process and anticipated to be completed in Q4 2026. Phase II has a budget of $41,724 of which $21,888 has been incurred.

​

SE Rosemount, LLC is a development project that is underway in Rosemount, MN. The current project budget approximates $64,200, of which $17,376 has been incurred as of March 31, 2026.

​

Funds From Operations (FFO)

​

Funds From Operations (FFO) applicable to common shares and limited partnership units means net income (computed in accordance with GAAP), excluding gains (or losses) from sales of property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect funds from operations on the same basis.

​

Historical cost accounting for real estate assets implicitly assumes the value of real estate assets diminishes predictably over time. Since real estate values have historically risen or fallen with market conditions, many industry investors have considered presentations of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. The term Funds From Operations (FFO) was created to address this problem. It was intended to be a standard supplemental measure of REIT operating performance that excluded historical cost depreciation from - or "added back" to - GAAP net income.

​

Our management believes this non-GAAP measure is useful to investors because it provides supplemental information that facilitates comparisons to prior periods and for the evaluation of financial results. Management uses this non-GAAP measure to evaluate our financial results, develop budgets and manage expenditures. The method used to produce non-GAAP results is not computed according to GAAP, is likely to differ from the methods used by other companies and should not be regarded as a replacement for corresponding GAAP measures. Management encourages the review of the reconciliation of this non-GAAP financial measure to the comparable GAAP results.

​

Since the introduction of the definition of FFO, the term has come to be widely used by REITs. In the view of National Association of Real Estate Investment Trusts ("NAREIT"), the use of the definition of FFO (combined with the primary GAAP presentations required by the Securities and Exchange Commission) has been fundamentally beneficial, improving the understanding of operating results of REITs among the investing public and making it easier to compare the results of one REIT with another.

​

While FFO applicable to common shares and limited partnership units are widely used by REITs as performance metrics, all REITs do not use the same definition of FFO or calculate FFO in the same way. The FFO reconciliation presented here is not necessarily comparable to FFO presented by other real estate investment trusts. FFO should also not be considered as an alternative to net income as determined in accordance with GAAP as a measure of a real estate investment trust's performance, but should be considered as an additional, supplemental measure, and should be viewed in conjunction with net income as presented in the consolidated financial statements included in this report. FFO applicable to common shares and limited partnership units does not represent cash generated from operating activities in accordance with GAAP and is not necessarily indicative of sufficient cash flow to fund a real estate investment trust's need or its ability to service indebtedness or to pay dividends to shareholders.

​

The following tables include calculations of FFO and the reconciliations to net income, the three months ended March 31, 2026 and 2025, respectively. We believe these calculations are the most comparable GAAP financial measure:

​

Reconciliation of Net Income Attributable to Sterling to FFO Applicable to Common Shares and Limited Partnership Units

​

​

​

​

Liquidity and Capital Resources

​

Evaluation of Liquidity

​

We continually evaluate our liquidity and ability to fund future operations, debt obligations, and any repurchase requests. As part of our analysis, we consider among other items, the credit quality of tenants, and current lease terms and projected expiration dates.

​

Our principal demands for funds will be for the: (i) acquisition of real estate and real estate-related investments, (ii) payment of acquisition related expenses and operating expenses, (iii) payment of dividends/distributions, (iv) payment of principal and interest on current and any future outstanding indebtedness, (v) redemptions of our securities under our redemption plans and (vi) capital improvements, development projects, and property related expenditures. Generally, we expect to meet cash needs for the payment of operating expenses and interest on outstanding indebtedness from cash flow from operations. We expect to pay dividends/distributions and any repurchase requests to our shareholders and the unit holders of our Operating Partnership from cash flow from operations; however, we may use other sources to fund dividends/distributions and repurchases, as necessary.

​

At March 31, 2026, our unrestricted cash resources consisted of cash and cash equivalents totaling approximately $5,337. Our unrestricted cash reserves can be used for working capital needs and other commitments. In addition, we had unencumbered properties with a gross book value of $69,748, which could potentially be used as collateral to secure additional financing in future periods.

​

The Trust maintains a $4,915 variable rate (floating SOFR plus 2.00%) line of credit agreement with Old National Bank (formerly Bremer Bank), which expires in December 2026; and a $3,500 variable rate (floating SOFR plus 2.00%) line of credit agreement with Old National Bank (formerly Bremer Bank), which expires December 2026. We also have a $20,000 variable rate (Prime minus 1.50%) line of credit agreement with Gate City Bank, which expires in November 2028, and a $20,000 variable rate (Prime minus 0.75%) line of credit agreement with Gate City Bank, which expires in November 2028. The lines of credit are secured by specific properties. The sale of our securities and issuance of limited partnership units of the Operating Partnership in exchange for property acquisitions and sale of additional common or preferred shares is also expected to be a source of long-term capital for us.

​

The sale of our securities and issuance of limited partnership units of the Operating Partnership in exchange for property acquisitions and sale of additional common or preferred shares is also expected to be a source of long-term capital for us.

​

During the three months ended March 31, 2026, we did not sell any common shares in private placements. During the three months ended March 31, 2026, we issued 86,000 and 39,000 common shares under the dividend reinvestment plan and optional share purchases, respectively, which raised gross proceeds of $3,062. During the three months ended March 31, 2025, we did not sell any common shares in private placements. During the three months ended March 31, 2025, we issued 91,000 and 22,000 common shares under the dividend reinvestment plan and as optional share purchases, respectively, which raised gross proceeds of $2,595.

​

Additionally, to reduce our cash investment and liquidity needs, the Trust utilizes the UPREIT structure whereby we can acquire property in whole or in part by issuing partnership units in lieu of cash payments. During the three months ended March 31, 2026, the Operating Partnership issued approximately 335,000 limited partnership units of the Operating Partnership valued at $25.50 per unit for an aggregate consideration of approximately $8,551 for the purchase of real estate investments. During the three months ended March 31, 2025, no limited partnership units were issued.

​

The Board of Trustees, acting as general partner for the Operating Partnership, determined an estimate of fair value for the limited partnership units exchanged through the UPREIT structure. In determining this value, the Board relied upon their experience with, and knowledge about, the Trust's real estate portfolio and debt obligations. The Board typically determines the fair value on an annual basis. The Trustees determine the fair value, in their sole discretion and use data points to guide their determination which is typically based on a consensus of opinion. Thus, the Trust does not employ any specific valuation methodology or formula. Rather, the Board looks to available data and information, which is often adjusted and weighted to comport more closely with the assets held by the Trust at the time of valuation. The principal valuation methodology utilized is the NAV calculation/direct capitalization method. The information made available to the Board is assembled by the Trust's Advisor. In addition, the Board considers how the price chosen will affect existing share and unit values, redemption prices, dividend coverage ratios, yield percentages, dividend reinvestment factors, and future UPREIT transactions, among other considerations and information. The fair value was not determined based on, nor intended to comply with, fair value standards under US GAAP and the value may not be indicative of the price we would get for selling our assets in their current condition. At this time, no shares are held in street name accounts and the Trust is not subject to FINRA's specific pricing requirements set out in Rule 2340 or otherwise.

​

As with any valuation methodology, the methodologies utilized by the Board in reaching an estimate of the value of the shares and limited partnership units are based upon a number of estimates, assumptions, judgments, or opinions that may, or may not, prove to be correct. The use of different estimates, assumptions, judgments, or opinions would likely have resulted in significantly different estimates of the value of the shares and limited partnership units. In addition, the Board's estimate of share and limited partnership unit value is not based on the book values of our real estate, as determined by GAAP, as our book value for most real estate is based on the amortized cost of the property, subject to certain adjustments.

​

Cash on hand, together with cash from operations and access to the lines of credit, is expected to provide sufficient capital to meet the Company's needs for at least the next 12 months and as appropriate, we will use cash flows from operations, net proceeds from share offerings, debt proceeds, and proceeds from the disposition of real estate investments to meet long term liquidity demands.

​

Credit Quality of Tenants

​

We are exposed to credit risk within our tenant portfolio, which can reduce our results of operations and cash flow from operations if our tenants are unable to pay their rent. Tenants experiencing financial difficulties may become delinquent on their rent or default on their leases and, if they file for bankruptcy protection, may reject our lease in bankruptcy court, resulting in reduced cash flow. This may negatively impact net asset values and require us to incur impairment charges. Even if a default has not occurred and a tenant is continuing to make the required lease payments, we may restructure or renew leases on less favorable terms, or the tenant's credit profile may deteriorate, which could affect the value of the leased asset and could in turn require us to incur impairment charges.

​

To mitigate credit risk on commercial properties, we have historically looked to invest in assets that we believe are critically important to our tenants' operations and have attempted to diversify our portfolio by tenant, tenant industry and geography. We also monitor all of our property's performance through review of rent delinquencies as a precursor to a potential default, meetings with tenant management and review of tenants' financial statements and compliance with financial covenants. When necessary, our asset management process includes restructuring transactions to meet the evolving needs

of tenants, refinancing debt and selling properties, as well as protecting our rights when tenants default or enter into bankruptcy.

​

Lease Expirations and Occupancy

​

Our residential leases are for a term of one year or less. With the assistance of our property managers, we actively manage our real estate portfolio and begin discussing options with tenants in advance of scheduled lease expirations. In certain cases, we may obtain lease renewals from our tenants; however, tenants may elect to move out at the end of their term. In cases where tenants elect not to renew, we may seek replacement tenants or try to sell the property.

​

Cash Flow Analysis

​

Our objectives are to generate sufficient cash flow over time to provide shareholders with increasing dividends and to seek investments with potential for strong returns and capital appreciation throughout varying economic cycles. We have funded 100% of the dividends from operating cash flows. In setting a dividend rate, we focus primarily on expected returns from investments we have already made to assess the sustainability of a particular dividend rate over time.

​

​

Operating Activities

​

Our real estate properties generate cash flow in the form of rental revenues, which is reduced by interest payments, direct lease costs and property-level operating expenses. Property-level operating expenses consist primarily of property management fees including salaries and wages of property management personnel, utilities, cleaning, repairs, insurance, security and building maintenance cost, and real estate taxes. Additionally, we incur general and administrative expenses, advisory fees, acquisition and disposition expenses and financing fees.

​

Net cash provided by operating activities was $12,819 and $3,325 the three months ended March 31, 2026 and 2025, respectively, which consists primarily of net income from property operations adjusted for non-cash depreciation and amortization.

​

Investing Activities

​

Our investing activities generally consist of real estate-related transactions (purchases and sales of properties) and payments of capitalized property-related costs such as intangible assets and reserve escrows.

​

Net cash used in investing activities was $ (26,347) and $ (5,171) for the three months ended March 31, 2026 and 2025, respectively (this does not include the value of UPREIT units issued in connection with investing activities). For the three months ended March 31, 2026 and 2025, cash flows used in investing activities related to the acquisition of properties and capital expenditures was $27,117 and $4,469, respectively. During the three months ended March 31, 2026 and 2025, respectively, there were no proceeds from the maturity of securities. During the three months ended March 31, 2026 and 2025, respectively, there were no proceeds from the sale of real estate investments.

​

Financing Activities

​

Our financing activities generally consist of funding property purchases by raising proceeds and securing mortgage notes payable as well as paying dividends, paying syndication costs, and making principal payments on mortgage notes payable.

​

Net cash used in financing activities was $11,612 and provided by financing activities was $2,319 for the three months ended March 31, 2026 and 2025. During the three months ended March 31, 2026, we paid $7,509 in dividends and distributions, redeemed $1,925 of shares and units, received no proceeds from new mortgage notes, and made mortgage principal payments of $11,955. For the three months ended March 31, 2025, we paid $6,973 in dividends and distributions, redeemed $2,580 of shares and units, received no proceeds from new mortgage notes, and made mortgage principal payments of $6,528.

​

Dividends and Distributions

​

Common Stock

​

We declared cash dividends to our shareholders during the three months ended March 31, 2026 totaling $4,224 or $0.3188 per share, of which $1,982 were cash dividends and $2,242 were reinvested under the dividend reinvestment plan. The cash dividends were paid from our $12,819 of net cash flows from operations.

​

We declared cash dividends to our shareholders during the three months ended March 31, 2025 totaling $3,867 or $0.3000 per share, of which $1,737 were cash dividends and $2,131 were reinvested under the dividend reinvestment plan. The cash dividends were paid from our $3,325 of net cash flows from operations.

​

We continue to provide cash dividends to our shareholders from cash generated by our operations. The following chart summarizes the sources of our cash used to pay dividends. Our primary source of cash is cash flow provided by operating activities from our investments as presented in our cash flow statement. We also include distributions from unconsolidated affiliates to the extent that the underlying real estate operations in these entities generate cash and the gain on sale of properties relates to net profits from the sale of certain properties. Our presentation is not intended to be an alternative to our consolidated statement of cash flows and does not present all sources and uses of our cash.

​

The following table presents certain information regarding our dividend coverage:

​

​

​

Limited Partnership Units

​

The Operating Partnership agreement provides that our Operating Partnership will distribute to the partners (subject to certain limitations) cash from operations on a quarterly basis (or more frequently, if we so elect) in accordance with the percentage interests of the partners. Through the role of general partner of the Operating Partnership, we determine the amounts of such distributions in our sole discretion.

​

For the three months ended March 31, 2026, we declared quarterly distributions totaling $6,089 to holders of limited partnership units in our Operating Partnership, which we paid on April 15, 2026. Distributions were paid at a rate of $0.3188 per unit per quarter, which is equal to the per share distribution rate paid to the common shareholders.

​

For the three months ended March 31, 2025, we declared quarterly distributions totaling $5,565 to holders of limited partnership units in our Operating Partnership, which we paid on April 15, 2025. Distributions were paid at a rate of $0.3000 per unit per quarter, which is equal to the per share distribution rate paid to the common shareholders.

​

Sources of Dividends and Distributions

​

For the three months ended March 31, 2026, aggregate dividends and distributions of $3,942, were funded with cash flows provided by operating activities and distributions from unconsolidated affiliates. Our Funds From Operations (FFO), was $13,778 for the three months ended March 31, 2026; therefore, we believe our dividend and distribution policy is sustainable over time. For the three months ended March 31, 2025, we paid aggregate dividends and distributions of $3,867 with cash flows provided by operating activities and distributions from unconsolidated affiliates. Our FFO was $14,009 as of the three months ended March 31, 2025. For a further discussion of FFO, including a reconciliation of FFO to net income, see "Funds from Operations" above.

​

Recently Issued Accounting Pronouncements

​

For a discussion of recently issued accounting pronouncements, see Note 2, Principal Activity and Significant Accounting Policies- Recently Issued Accounting Pronouncements, to the consolidated financial statements that are a part of this Annual Report on Form 10-Q.

​