ASCENT INDUSTRIES CO. 10-K

Item 8. Financial Statements and Supplementary Data Index to Financial Statements Page Report of Independent Registered Public Accounting Firm ( Baker Tilly US, LLP ; Irvine, CA ; PCAOB ID: 659 ) 26 Consolidated Balance Sheets as of December 31, 2025 and 2024 28 Consolidated Statements of Income (Loss) for the years ended December 31, 2025 and 2024 29 Consolidated Statements of Cash Flows for the years ended December 31, 2025 and 2024 30 Consolidated Statements of Shareholders' Equity for the years ended December 31, 2025 and 2024 31 Notes to Consolidated Financial Statements 32 Note 1: Summary of Significant Accounting Policies 32 Note 2: Discontinued Operations 37 Note 3: Revenue Recognition 38 Note 4: Fair Value of Financial Instruments 39 Note 5: Property, Plant and Equipment 40 Note 6: Debt 41 Note 7: Leases 42 Note 8: Accrued Expenses & Other Current Liabilities 44 Note 9: Shareholders' Equity 45 Note 10: Accounting for Share-Based Payments 45 Note 11: Income Taxes 48 Note 12: Earnings (Loss) Per Share 48 Note 13: Industry Segments 51 Note 14: Benefit Plans and Collective Bargaining Agreements 53 Note 15: Commitments and Contingencies 54 Note 16: Subsequent Events 54 25 Table of Contents Report of Independent Registered Public Accounting Firm To the Shareholders and Board of Directors of Ascent Industries Co. Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated balance sheets of Ascent Industries Co. (the Company) as of December 31, 2025 and 2024, the related consolidated statements of income (loss), shareholders’ equity, and cash flows for the years then ended, and the related notes and schedule (collectively referred to as the consolidated financial statements). We also have audited the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2025 and 2024, and the consolidated results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, because of the effect of the material weakness identified below on the achievement of the objectives of the control criteria, the Company has not maintained effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by COSO. Basis for Opinions The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting included in Item 9A. Our responsibility is to express an opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures to respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. The following material weaknesses have been identified and included in management’s assessment: • Information Technology - Management did not design and maintain effective information technology (IT) general controls in the areas of user access, change management, segregation of duties, and cyber-security for systems supporting many of the Company’s key financial reporting processes. As a result, IT application controls and business process controls that are dependent on the ineffective IT general controls, or that rely on data produced 26 Table of Contents from systems impacted by the ineffective IT general controls, are also deemed ineffective, which affects substantially all financial statement account balances and disclosures within the Company. • Inventory - Management did not design and maintain effective controls over inventory. • Period-end financial reporting, journal entries, reconciliations, and account analyses - Management did not design and maintain effective controls to detect potential material misstatements to period-end financial statements through review of account reconciliations and account analyses on a timely basis. Additionally, management did not design and maintain effective controls over the review of journal entries. • Complex Accounting - Management did not design and maintain management review controls at a sufficient level of precision around complex accounting areas such as income taxes. We considered the material weaknesses in determining the nature, timing, and extent of audit tests applied in our audit of the Company’s consolidated financial statements as of and for the year ended December 31, 2025, and our opinion on such consolidated financial statements was not affected. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Critical Audit Matter Critical audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters. /s/ Baker Tilly US, LLP Irvine, California March 3, 2026 We have served as the Company's auditor since 2023. 27 Ascent Industries Co. Consolidated Balance Sheets As of December 31, 2025 and 2024 (in thousands, except par value and share data) 2025 2024 Assets Current assets: Cash and cash equivalents $ 57,606 $ 16,098 Accounts receivable, net 10,040 12,232 Advances and other receivables 5,389 52 Inventories Raw materials 5,589 4,654 Finished goods 3,153 1,073 Total inventories 8,742 5,727 Prepaid expenses and other current assets 1,243 1,122 Current assets of discontinued operations — 47,841 Total current assets 83,020 83,072 Property, plant and equipment, net 15,762 17,589 Right-of-use assets, operating leases, net 9,368 28,140 Intangible assets, net 2,833 3,445 Deferred charges, net 401 309 Other non-current assets 553 512 Long-term assets of discontinued operations — 14,183 Total assets $ 111,937 $ 147,250 Liabilities and Shareholders' equity Current liabilities: Accounts payable $ 5,490 $ 6,836 Accrued expenses and other current liabilities 5,389 3,598 Current portion of note payable 433 369 Current portion of operating lease liabilities 712 1,495 Current portion of finance lease liabilities 331 293 Current liabilities of discontinued operations — 9,756 Total current liabilities 12,355 22,347 Long-term portion of operating lease liabilities 11,496 29,972 Long-term portion of finance lease liabilities 808 1,015 Deferred income taxes 241 320 Other long-term liabilities 45 51 Total liabilities $ 24,945 $ 53,705 Commitments and contingencies – see Note 15 Shareholders' equity: Common stock - $ 1 par value: 24,000,000 shares authorized; 9,400,898 and 10,072,590 shares outstanding as of December 31, 2025 and 2024, respectively $ 11,085 $ 11,085 Capital in excess of par value 48,276 47,339 Retained earnings 45,786 44,919 105,147 103,343 Less cost of common stock in treasury - 1,684,205 and 1,012,513 shares, respectively ( 18,155 ) ( 9,798 ) Total shareholders' equity 86,992 93,545 Total liabilities and shareholders' equity $ 111,937 $ 147,250 See accompanying notes to consolidated financial statements . 28 Ascent Industries Co. Consolidated Statements of Income (Loss) For the years ended December 31, 2025 and 2024 (in thousands, except per share data) 2025 2024 Net sales $ 74,942 $ 80,763 Cost of sales 57,730 70,071 Gross profit 17,212 10,692 Selling, general and administrative expense 24,093 20,899 Research and development 71 — Acquisition costs and other 731 662 Asset impairments 1,622 — Gain on lease modification ( 2,278 ) ( 67 ) Operating loss from continuing operations ( 7,027 ) ( 10,802 ) Other (income) and expense Interest (income) expense, net ( 712 ) 417 Other, net ( 753 ) ( 448 ) Loss from continuing operations before income taxes ( 5,562 ) ( 10,771 ) Income tax provision 22 1,806 Loss from continuing operations $ ( 5,584 ) $ ( 12,577 ) Income (loss) from discontinued operations, net of tax 6,451 ( 1,021 ) Net income (loss) $ 867 $ ( 13,598 ) Net loss per common share from continuing operations Basic $ ( 0.58 ) $ ( 1.24 ) Diluted $ ( 0.58 ) $ ( 1.24 ) Net income (loss) per common share from discontinued operations Basic $ 0.67 $ ( 0.11 ) Diluted $ 0.67 $ ( 0.11 ) Net income (loss) per common share Basic $ 0.09 $ ( 1.35 ) Diluted $ 0.09 $ ( 1.35 ) Weighted average number of common shares outstanding: Basic 9,643 10,106 Diluted 9,643 10,106 See accompanying notes to consolidated financial statements . 29 Ascent Industries Co. Consolidated Statements of Cash Flows For the years ended December 31, 2025 and 2024 (in thousands) 2025 2024 Cash flows from operating activities: Net income (loss) $ 867 $ ( 13,598 ) Income (loss) from discontinued operations, net of tax 6,451 ( 1,021 ) Net loss from continuing operations ( 5,584 ) ( 12,577 ) Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: Depreciation expense 3,574 3,884 Amortization expense 612 695 Amortization of debt issuance costs 258 105 Asset impairments 1,622 — Deferred income taxes 22 1,806 (Reduction of) provision for losses on accounts receivable ( 569 ) 51 Loss on disposal of property, plant and equipment 1 289 Non-cash lease expense 128 111 Gain on lease modification ( 2,278 ) ( 67 ) Share-based compensation expense 1,302 760 Changes in operating assets and liabilities: Accounts receivable and advances ( 2,576 ) 2,762 Inventories ( 3,015 ) 5,039 Other assets and liabilities ( 521 ) ( 160 ) Accounts payable ( 1,565 ) ( 3,246 ) Accrued expenses 1,469 40 Accrued income taxes ( 149 ) 1,485 Net cash (used in) provided by operating activities - continuing operations ( 7,269 ) 977 Net cash provided by operating activities - discontinued operations 6,750 13,704 Net cash (used in) provided by operating activities ( 519 ) 14,681 Cash flows from investing activities: Purchases of property, plant and equipment ( 1,544 ) ( 1,120 ) Net cash used in investing activities - continuing operations ( 1,544 ) ( 1,120 ) Net cash provided by investing activities - discontinued operations 52,525 2,025 Net cash provided by investing activities 50,981 905 Cash flows from financing activities: Borrowings from credit facilities 137,075 197,898 Proceeds from note payable 1,085 914 Proceeds from exercise of stock options 415 — Payments on credit facilities ( 137,075 ) ( 197,898 ) Payments on note payable ( 1,021 ) ( 906 ) Principal payments on finance lease obligations ( 287 ) ( 289 ) Repurchase of common stock ( 9,137 ) ( 1,037 ) Net cash used in financing activities - continuing operations ( 8,945 ) ( 1,318 ) Net cash used in financing activities - discontinued operations ( 19 ) ( 11 ) Net cash used in financing activities ( 8,964 ) ( 1,329 ) Increase in cash and cash equivalents 41,498 14,257 Cash and cash equivalents of discontinued operations — 10 Cash and cash equivalents, beginning of period 16,108 1,841 Cash and cash equivalents, end of period $ 57,606 $ 16,108 Supplemental Disclosure of Cash Flow Information Cash paid for: Interest $ 174 $ 277 Noncash Investing Activities: Capital expenditures, not yet paid $ 204 $ 267 See accompanying notes to consolidated financial statements. 30 Ascent Industries Co. Consolidated Statements of Shareholders' Equity For the years ended December 31, 2025 and 2024 (in thousands, except share and per share data) Common Stock Treasury Stock Shares Amount Capital in Excess of Par Value Retained Earnings Shares Amount Total Balance December 31, 2023 11,085 $ 11,085 $ 47,333 $ 58,517 990 $ ( 9,525 ) $ 107,410 Net loss — — — ( 13,598 ) — — ( 13,598 ) Issuance of 79,032 shares of common stock from treasury — — ( 761 ) — ( 79 ) 761 — Share-based compensation — — 767 — — — 767 Repurchase of 101,263 shares of common stock — — — — 101 ( 1,034 ) ( 1,034 ) Balance December 31, 2024 11,085 $ 11,085 $ 47,339 $ 44,919 1,012 $ ( 9,798 ) $ 93,545 Net income — — — 867 — — 867 Issuance of 41,832 shares of common stock from treasury — — ( 436 ) — ( 42 ) 436 — Exercise of stock options for 32,000 shares, net — — 71 — ( 32 ) 344 415 Share-based compensation — — 1,302 — — — 1,302 Repurchase of 745,524 shares of common stock — — — — 746 ( 9,137 ) ( 9,137 ) Balance December 31, 2025 11,085 $ 11,085 $ 48,276 $ 45,786 1,684 $ ( 18,155 ) $ 86,992 See accompanying notes to consolidated financial statements. 31 Ascent Industries Co. Notes to Consolidated Financial Statements Notes to Consolidated Financial Statements Note 1: Summary of Significant Accounting Policies Ascent Industries Co. is a specialty chemicals platform focused on the development, production, and distribution of tailored, performance-driven chemical solutions. Ascent Industries Co. was incorporated in 1958 as the successor to a chemical manufacturing business founded in 1945 known as Blackman Uhler Industries, Inc. The Company's executive office is located at 20 N. Martingale Rd, Suite 430, Schaumburg, Illinois 60173. Unless indicated otherwise, the terms "Ascent", "Company," "we" "us," and "our" refer to Ascent Industries Co. and its consolidated subsidiaries. The Company has one reportable segment: Specialty Chemicals. The segment produces critical ingredients and process aids for the oil & gas, household, industrial and institutional ("HII"), personal care, coatings, adhesives, sealants and elastomers ("CASE"), pulp and paper, textile, automotive, agricultural, water treatment, construction specialty formulations and intermediates for use in a wide variety of applications and industries with primary product lines focusing on the production of surfactants, defoamers, lubricating agents, flame retardants and chemical intermediates. Below are those accounting policies considered by the Company to be significant. Principles of Consolidation - The consolidated financial statements include the accounts of the Company and its subsidiaries, all of which are wholly-owned. Intercompany transactions and balances have been eliminated. Use of Estimates - The preparation of the Company's financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates that affect the reported amounts of assets, liabilities, sales and expenses, and related disclosures of contingent assets and liabilities. Significant items subject to such estimates and assumptions include the carrying value of property, plant and equipment; intangible assets; valuation allowances for receivables and deferred income tax assets and liabilities; liabilities for potential tax deficiencies; and, potential litigation claims and settlements. The Company bases these estimates on historical results and various other assumptions believed to be reasonable, all of which form the basis for making estimates concerning the carrying value of assets and liabilities that are readily available from other sources. Actual results may differ from these estimates. Reclassifications - Certain prior period amounts have been reclassified to conform to current period presentation, including the Company's Tubular Products segment, which includes Bristol Metals ("BRISMET") and American Stainless Tubing ("ASTI"), to discontinued operations and provision for (reduction of) inventory losses to inventories on the consolidated statements of cash flows. Cash and Cash Equivalents - The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. The Company maintains cash levels in bank accounts that, at times, may exceed federally-insured limits. Accounts Receivable - Accounts receivable from the sale of products are recorded at net realizable value and the Company generally grants credit to customers on an unsecured basis. Substantially all of the Company's accounts receivable are due from companies located throughout the United States. The Company provides an allowance for credit losses for expected uncollectible amounts. The allowance is based upon an analysis of accounts receivable balances with similar risk characteristics on a collective basis, considering factors such as the aging of receivables balances, historical loss experience, current information, and future expectations. Each reporting period, the Company reassesses whether any accounts receivable no longer share similar risk characteristics and should instead be evaluated as part of another pool or on an individual basis. The Company performs periodic credit evaluations of its customers' financial condition and generally does not require collateral. Receivables are generally due within 30 to 90 days. Delinquent receivables are written off based on individual credit evaluations and specific circumstances of the customer. The opening and closing balances of our accounts receivables from continuing operations are as follows (in thousands): (in thousands) January 1, 2024 December 31, 2024 December 31, 2025 Accounts receivables, net $ 15,097 $ 12,232 $ 10,040 32 Ascent Industries Co. Notes to Consolidated Financial Statements Activity in the allowance for credit losses from continuing operations were as follows: (in thousands) 2025 2024 Balance at beginning of period $ 202 $ 151 Current period provision for expected credit losses 52 378 Deductions from allowance ( 621 ) ( 327 ) Other 1 1,371 — Balance at end of period $ 1,004 $ 202 1 Remaining allowance for credit losses associated with the former Munhall facility. Receivables balance was fully reserved as of December 31, 2025 and 2024. Inventories - Inventories are stated at the lower of cost or net realizable value ("LCNRV"). Cost is determined by either specific identification or weighted average methods. At the end of each quarter, recent sales reports are reviewed to identify sales price trends that would indicate products or product lines that are being sold below our cost. This would indicate that an adjustment would be required. An LCNRV adjustment is recorded when the Company's inventory cost, based upon a historical price, is greater than the current selling price of that product. LCNRV adjustments of $ 0.2 million and $ 0.5 million were required during the years ended December 31, 2025 and 2024, respectively. In addition, the Company establishes inventory reserves for: • Estimated obsolete or unmarketable inventory - The Company identifies aged inventory items with slow or no sales activity for finished goods or slow or no usage for raw materials for a certain period of time. For those inventory items, a reserve is established for a percentage of the inventory cost and is based on our current knowledge with respect to inventory levels, sales trends and historical experience. The Company reserved $ 1.0 million and $ 1.1 million for continuing operations as of December 31, 2025 and 2024, respectively. • Estimated quantity losses - The Company performs an annual physical count of inventory during the fourth quarter each year for all facilities. A reserve is established for the potential quantity losses that could occur subsequent to their physical inventory and is based upon the most recent physical inventory results. The Company had $ 0.1 million reserved for physical inventory quantity losses for continuing operations as of December 31, 2025 and 2024. Property, Plant and Equipment - Property, plant and equipment are stated at cost. Depreciation is determined based on the straight-line method over the estimated useful life of the assets. Substantially all depreciation is recorded within cost of goods sold on the consolidated statements of income (loss). Leasehold improvements are depreciated over the shorter of their useful lives or the remaining non-cancellable lease term, buildings are depreciated over a range of 10 years to 40 years, and machinery, fixtures and equipment are depreciated over a range of three years to 20 years. The costs of software licenses are amortized over five years using the straight-line method. The Company continually reviews the recoverability of the carrying value of long-lived assets. The Company also reviews long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount of such assets may not be recoverable. When the future undiscounted cash flows of the operation to which the assets relate do not exceed the carrying value of the asset, the assets are written down to fair value. Business Combinations - Business combinations are accounted for using the acquisition method of accounting. Under this method, the total consideration transferred to consummate the business combination is allocated to the identifiable tangible and intangible assets acquired and liabilities assumed based on their respective fair values as of the closing date of the transaction. The acquisition method of accounting requires extensive use of estimates and judgments to allocate the consideration transferred to the identifiable tangible and intangible assets acquired, if any, and liabilities assumed. Intangible Assets - Intangible assets consists of customer relationships, trademarks and trade names, and represents the fair value of intellectual, non-physical assets resulting from business acquisitions and are amortized over their estimated useful lives using either an accelerated or straight-line method over a period of 15 years. Amortization expense is recorded in selling, general and administrative expense on the consolidated statements of income (loss). 33 Ascent Industries Co. Notes to Consolidated Financial Statements The gross carrying amount and accumulated amortization of intangible assets from continuing operations consist of the following: 2025 2024 (in thousands) Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Definite-lived intangible assets: Customer related $ 5,100 $ ( 2,779 ) $ 5,100 $ ( 2,167 ) Trademarks and trade names 150 ( 32 ) 150 ( 32 ) Other 500 ( 106 ) 500 ( 106 ) Total definite-lived intangible assets $ 5,750 $ ( 2,917 ) $ 5,750 $ ( 2,305 ) The Company recorded amortization expense related to intangible assets from continuing operations of $ 0.6 million and $ 0.7 million for 2025 and 2024, respectively. Estimated amortization expense for the next five fiscal years based on existing intangible assets is as follows: (in thousands) 2026 $ 468 2027 375 2028 310 2029 278 2030 249 Thereafter 1,153 Total $ 2,833 Deferred Charges - Deferred charges represent debt issuance costs and are amortized over their estimated useful lives using the straight-line method over a period of four years and is recorded in interest expense on the consolidated statements of income (loss). In the year 2025, the Company capitalized $ 0.5 million of debt issuance costs related to its Credit Facility Amendments with BMO Bank N.A. Debt issuance costs remaining related to the Company's previous credit agreements were expensed in 2025. See Note 6 for additional information on the Company's credit facilities. Deferred charges totaled $ 0.4 million and $ 0.3 million as of December 31, 2025 and 2024, respectively. Accumulated amortization of deferred charges as of December 31, 2025 and 2024 totaled $ 0.1 million and less than $ 0.1 million, respectively. Long-Lived Asset Impairment - The carrying amounts of long-lived assets are reviewed whenever certain events or changes in circumstances indicate that the carrying amounts may not be recoverable. A potential impairment has occurred for long-lived assets held-for-use if projected future undiscounted cash flows expected to result from the use and eventual disposition of the assets are less than the carrying amounts of the assets. An impairment loss is recorded for long-lived assets held-for-use when the carrying amount of the asset is not recoverable and exceeds its fair value. Long-lived assets that are expected to be sold within the next 12 months and meet the other relevant held-for-sale criteria are classified as long-lived assets held-for-sale. An impairment loss is recorded for long-lived assets held-for-sale when the carrying amount of the asset exceeds its fair value less cost to sell. A long-lived asset is not depreciated while its classified as held-for-sale. For long-lived assets to be abandoned, the Company considers the asset to be disposed of when it ceases to be used. Until it ceases to be used, the Company continues to classify the asset as held-for-use and test for potential impairment accordingly. If the Company commits to a plan to abandon a long-lived asset before the end of its previously estimated useful life, its depreciable life is re-evaluated. Gains and losses on the disposal of assets are recorded as the difference between the net proceeds received, if any, and net carrying values of the assets disposed and are included in loss on disposal of assets and adjustments to assets held for sale, net in the consolidated statements of income (loss). 34 Ascent Industries Co. Notes to Consolidated Financial Statements Fair value measurements associated with long-lived asset impairments are included in Note 4 of the notes to the consolidated financial statements. Discontinued Operations - The Company accounts for and classifies a business as a discontinued operation when the following criteria are met: the disposal group is a component of an entity, the component of the entity meets the held for sale criteria in accordance with our policy described above and the component of the entity represents a strategic shift in the entity's operating and financial results. See Note 2 for discussion on the Company's discontinued operations. Leases - The Company determines whether an arrangement is a lease at contract inception. For leases in which the Company is the lessee, the Company recognizes a right-of-use asset and corresponding lease liability on the consolidated balance sheets equal to the present value of the fixed lease payments over the lease term. Lease liabilities represent an obligation to make lease payments arising from a lease while right-of-use assets represent a right to use an underlying asset during the lease term. The Company does not separate lease and non-lease components for its underlying assets. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheets. If readily determinable, the rate implicit in the lease is used to discount lease payments to present value; however, the Company's leases generally do not provide a readily determinable implicit rate. When the implicit rate is not determinable, the Company's estimated incremental borrowing rate is utilized, determined on a fully collateralized and fully amortizing basis, to discount lease payments based on information available at lease commencement. The Company determines the appropriate incremental borrowing rate by identifying a reference rate and making adjustments that take into consideration financing options and certain lease-specific circumstances. Lease costs are recognized on a straight-line basis over the lease term. Right-of-use assets and operating lease liabilities are remeasured upon certain modifications to leases using the present value of the remaining lease payments and estimated incremental borrowing rate upon lease modification. The difference between the remeasured right-of-use asset and the operating lease liabilities are recognized as a gain or loss within operating expenses. The Company reviews any changes to its lease agreements for potential modifications and/or indicators of impairment of the respective right-of-use asset. Operating leases are included in right-of-use assets, current portion of operating lease liabilities and long-term portion of operating lease liabilities on the accompanying consolidated balance sheets. Finance leases are included in property, plant and equipment, current portion of finance lease liabilities and long-term portion of finance lease liabilities. See Note 7 for additional information on the Company's leases. The Company subleases portions of certain properties that are not used in its operations. Sublease income was $ 0.6 million and $ 0.4 million for 2025 and 2024, respectively. Revenue Recognition - Revenues are recognized when control of the promised goods or services is transferred to our customers upon shipment, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. The Company's revenues are derived from contracts with customers where performance obligations are satisfied at a point-in-time or over-time. For certain contracts under which the Company produces product with no alternative use and for which the Company has an enforceable right to payment during the production cycle, product in which the material is customer owned or in which the customer simultaneously consumes the benefits throughout the production cycle, progress toward satisfying the performance obligation is measured using an output method of units produced. Certain customer arrangements consist of bill-and-hold characteristics under which transfer of control has been met (including the passing of title and significant risk and reward of ownership to the customers). Therefore, the customers can direct the use of the bill-and-hold inventory while we retain physical possession of the product until it is shipped to a customer at a point in time in the future. Our contracts with customers may include multiple performance obligations. For such arrangements, revenue for each performance obligation is based on its standalone selling price and revenue is recognized as each performance obligation is satisfied. The Company generally determines standalone selling prices based on the prices charged to customers using the adjusted market assessment approach or expected cost plus margin. Deferred revenues are recorded when cash payments are received in advance of satisfying the performance obligation, including amounts which are refundable. See Note 3 for additional information on the Company's revenue. Shipping Costs - Shipping costs are treated as fulfillment activities at the time control and title of the promised good and services rendered are transferred to the customer. Shipping costs from continuing operations of approximately $ 0.5 million and $ 0.3 million in 2025 and 2024, respectively, are recorded in cost of goods sold on the consolidated statements of income (loss). 35 Ascent Industries Co. Notes to Consolidated Financial Statements Share-Based Compensation - Share-based payments to employees, including grants of employee stock options, are recognized in the consolidated statements of income (loss) as compensation expense (based on their estimated fair values at grant date) generally over the vesting period of the awards using the straight-line method. Any forfeitures of share-based awards are recorded as they occur. See Note 10 for additional information on the Company's accounting for share-based payments. Income Taxes - Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing accounts and their respective tax basis and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded to reduce the carrying amounts of deferred tax assets unless it is more likely than not that such assets will be realized. Additionally, the Company maintains reserves for uncertain tax provisions, if necessary. See Note 11 for additional information on the Company's income taxes. Earnings Per Share - Earnings per share of common stock are computed based on the weighted average number of basic and diluted shares outstanding during each period. See Note 12 for additional information on the Company's earnings per share. Concentrations of Credit Risk - Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash deposits and trade accounts receivable. The Company monitors the financial institutions where it invests its cash and cash equivalents as well as performs credit reviews of potential customers when extending credit to purchase and periodic reviews of existing customers to mitigate exposure and risk. The Company has five customers that accounted for approximately 51 % of revenues for 2025 and 35 % of revenues for 2024. Accounting Pronouncements Recently Adopted - In December 2025, the Company adopted Accounting Standards Update (ASU) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The ASU requires consistent categories and greater disaggregation of information in the rate reconciliation and income taxes paid disaggregated by jurisdiction. The amendments also require that all entities disclose more detailed information about income taxes paid, including by jurisdiction; pretax income (or loss) from continuing operations; and income tax expense (or benefit). The Company adopted this standard on a prospective basis and the adoption did not have a material effect on the consolidated financial statements or footnote disclosures. In December 2024, the Company adopted Accounting Standards Update (ASU) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The ASU expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets. All disclosure requirements under ASU 2023-07 are also required for public entities with a single reportable segment. The adoption of this standard by the Company did not have a material effect on the consolidated financial statements or footnote disclosures. Accounting Pronouncements Not Yet Adopted - In November 2024, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures . The ASU requires updated disclosures, in the notes to the financial statements, of specified information about certain costs and expenses. The amendments require that at each interim and annual reporting period an entity disclose the amounts of purchases of inventory, employee compensation, depreciation, intangible asset amortization and depreciation, depletion, and amortization recognized as part of oil and gas producing activities included in relevant expense captions. The amendments also require disclosure of qualitative descriptions of amounts remaining in relevant expense captions that are not separately disaggregated and to disclose the total amount of selling expenses as well as the entity's definition of selling expenses. The ASU is effective for the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2027, and subsequent interim periods, with early adoption permitted. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and footnote disclosures. Recent accounting pronouncements pending adoption not discussed in this Form 10-K are either not applicable to the Company or are not expected to have a material impact on the Company. 36 Ascent Industries Co. Notes to Consolidated Financial Statements Note 2: Discontinued Operations Divestiture of Bristol Metals On March 12, 2025, the Company and its wholly-owned subsidiaries Synalloy Metals, Inc. ("Synalloy Metals") and Bristol Metals, LLC. ("BRISMET"), entered into an Asset Purchase Agreement (the “Purchase Agreement”) pursuant to which they sold substantially all of the assets related to BRISMET to Bristol Pipe and Tube, Inc., a Delaware corporation and wholly-owned subsidiary of Ta Chen International, Inc. (the “Purchaser”). Ascent and Purchaser also entered into a Transition Services Agreement (the “TSA”) dated March 12, 2025, pursuant to which Ascent has agreed to provide certain transition services to Purchaser immediately after the closing for certain agreed upon transition periods. On April 4, 2025, the Company and Purchaser completed the transaction contemplated by the Purchase Agreement. The consideration for the transaction was approximately $ 45 million of cash proceeds, of which $ 4.5 million was placed in an escrow account to be received in 18 months from the closing date. The escrow amount is presented within "Advances and other receivables" on the consolidated balance sheets. During the three months ended September 30, 2025, the Company and Purchaser completed the measurement period closing adjustments under the terms of the Purchase Agreement resulting in a pretax gain on sale of $ 2.5 million. As a result of the sale, BRISMET results of operations are classified under discontinued operations for all periods presented. Prior to the divestiture, BRISMET was reported under the Company's former Tubular Products segment. Divestiture of American Stainless Tubing On June 23, 2025, the Company and its wholly-owned subsidiary American Stainless Tubing, Inc. ("ASTI"), entered into an Asset Purchase Agreement (the “Purchase Agreement”) pursuant to which they sold substantially all of the assets related to ASTI to First Tube, LLC., a Texas limited liability company and wholly-owned subsidiary of Triple-S Steel Holdings, Inc (the “Purchaser”). On June 30, 2025, the Company and Purchaser completed the transaction contemplated by the Purchase Agreement. The consideration for the transaction was approximately $ 16 million of cash proceeds, of which $ 0.8 million was placed in an escrow account to be received in 12 months from the closing date. The escrow amount is presented within "Advances and other receivables" on the condensed consolidated balance sheets. The sale resulted in a pretax gain on sale of $ 4.6 million. ASTI's results of operations are classified under discontinued operations for all periods presented. Prior to the divestiture, ASTI was reported under the Company's former Tubular Products segment. The financial results of the Company's discontinued operations are presented as income from discontinued operations, net of tax on the consolidated statements of income (loss). The following table summarizes the results of the Company's discontinued operations: (Unaudited) Three months ended December 31, Year Ended December 31, (in thousands) 2025 2024 2025 2024 Net sales $ — $ 22,549 $ 34,460 $ 97,398 Cost of sales — 19,227 29,770 88,210 Gross profit — 3,322 4,690 9,188 Selling, general and administrative expense — 1,543 1,887 5,658 Acquisition costs and other — 242 3,421 395 Loss (gain) on sale of assets — 228 ( 7,094 ) ( 1,313 ) Asset impairments — — — 1,115 Income from discontinued operations before income taxes — 1,309 6,476 3,333 Income tax provision 32 2,491 25 4,354 Net income (loss) from discontinued operations $ ( 32 ) $ ( 1,182 ) $ 6,451 $ ( 1,021 ) 37 Ascent Industries Co. Notes to Consolidated Financial Statements The following table presents the aggregate carrying amounts of the classes of assets and liabilities of the Company's discontinued operations: (in thousands) December 31, 2025 December 31, 2024 Carrying amounts of assets included as part of discontinued operations: Cash and cash equivalents $ — $ 10 Accounts receivable, net — 11,597 Inventories — 35,236 Prepaid expenses and other current assets — 998 Current assets classified as discontinued operations — 47,841 Property, plant and equipment, net — 7,873 Right-of-use assets, operating leases, net — 85 Intangible assets, net — 3,564 Other non-current assets, net — 2,661 Long-term assets classified as discontinued operations — 14,183 Total assets classified as discontinued operations $ — $ 62,024 Carrying amounts of liabilities included as part of discontinued operations: Accounts payable — 6,252 Deferred revenue — 1,360 Accrued expenses and other current liabilities — 2,019 Current portion of operating lease liabilities — 84 Current portion of finance lease liabilities 41 Current liabilities classified as discontinued operations — 9,756 Total liabilities classified as discontinued operations $ — $ 9,756 Note 3: Revenue Recognition Revenue is generated primarily from contracts to produce, ship and deliver specialty chemical products. Revenues are recognized when control of the promised goods or services is transferred to our customers upon shipment, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. The Company's revenues are derived from contracts with customers where performance obligations are satisfied at a point-in-time or over-time. For certain contracts under which the Company produces product with no alternative use and for which the Company has an enforceable right to payment during the production cycle, product in which the material is customer owned or in which the customer simultaneously consumes the benefits throughout the production cycle, progress toward satisfying the performance obligation is measured using an output method of units produced. Certain customer arrangements consist of bill-and-hold characteristics under which transfer of control has been met (including the passing of title and significant risk and reward of ownership to the customers). Therefore, the customers can direct the use of the bill-and-hold inventory while we retain physical possession of the product until it is shipped to a customer at a point in time in the future. Sales tax and other taxes we collect with revenue-producing activities are excluded from revenue. Shipping costs charged to customers are treated as fulfillment activities and are recorded in both revenue and cost of sales at the time control is transferred to the customer. Costs related to obtaining sales contracts are incidental and are expensed when incurred. Because customers are invoiced at the time title transfers and the Company’s right to consideration is unconditional at that time, the Company does not maintain contract asset balances. Additionally, the Company does not maintain material contract liability balances, as performance obligations for substantially all contracts are satisfied prior to customer payment for product. The Company offers industry standard payment terms. 38 Ascent Industries Co. Notes to Consolidated Financial Statements The following table presents the Company's revenues, disaggregated by product group from continuing operations: (in thousands) 2025 2024 Custom Manufacturing 1 $ 52,643 $ 58,920 Core Technology 2 22,299 21,843 Net sales $ 74,942 $ 80,763 1 Custom Manufacturing includes tolling, dedicated manufacturing and other manufacturing in which the customer formulation or intellectual property is owned by the customer 2 Core technology includes product groups in which Ascent owns the right to the formulation or the intellectual property used in the manufacturing process The Company's revenues are derived from contracts with customers where performance obligations are satisfied at a point-in-time or over-time. Performance obligations are supported by contracts with customers, providing a framework for the nature of the distinct goods, services or bundle of goods and services. The timing of satisfying the performance obligation is typically indicated by the terms of the contract. The following table represents the Company's revenue recognized at a point- in-time and over-time. (in thousands) 2025 2024 Point-in-time $ 54,256 $ 58,440 Over-time $ 20,686 $ 22,323 Note 4: Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. To measure fair value, we use a three-tier valuation hierarchy based upon observable and non-observable inputs: Level 1 - Unadjusted quoted prices that are available in active markets for identical assets or liabilities at the measurement date. Level 2 - Significant other observable inputs available at the measurement date, other than quoted prices included in Level 1, either directly or indirectly, including: • Quoted prices for similar assets or liabilities in active markets; • Quoted prices for identical or similar assets or liabilities in non-active markets; • Inputs other than quoted prices that are observable for the asset or liability; and • Inputs that are derived principally from or corroborated by other observable market data. Level 3 - Significant unobservable inputs that cannot be corroborated by observable market data and reflect the use of significant management judgment. These values are generally determined using model-based techniques, including option pricing models, discounted cash flow models, probability weighted models, and Monte Carlo simulations. The Company's financial instruments include cash and cash equivalents, accounts receivable, accounts payable, notes payable and revolving line of credit. Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis For the fiscal year ended December 31, 2025 the Company's only significant measurements of assets and liabilities at fair value on a non-recurring basis subsequent to their initial recognition were certain right-of-use assets. For the fiscal year ended December 31, 2024, the Company's only significant measurements of assets and liabilities at fair value on a non-recurring basis subsequent to their initial recognition were certain long-lived assets and certain assets held for sale. Right-of-use assets During the second quarter of 2025, the Company incurred impairment charges of $ 1.6 million related to the write down of the right-of-use asset for the Company's Master lease associated with the former Munhall facility. Fair value was estimated by using a discounted cash flow method. The discounted future cash flows were determined based on future sublease rental rates, future sublease market conditions and a discount rate based on the Company's incremental borrowing rate. In the fourth 39 Ascent Industries Co. Notes to Consolidated Financial Statements quarter of 2025, the Company and its sale leaseback partner, Store, completed a lease assignment of the former Munhall facility to an unaffiliated third party and entered into Seventh Amended and Restated Master Lease agreement to reduce Ascent's rent with STORE. As a result of the assignment and associated lease modification, the Company recognized a gain on modification of $ 1.7 million in the fourth quarter of 2025. See Note 7 for additional information on the Company's leases. Long-lived assets The Company reviews the carrying amounts of long-lived assets whenever certain events or changes in circumstances indicate that the carrying amounts may not be recoverable. The Company assesses performance quarterly against historical patterns, projections of future profitability, and whether it is more likely than not that the assets will be disposed of significantly prior to the end of their estimated useful life for evidence of possible impairment. An impairment loss is recognized when the carrying amount of the asset (disposal) group is not recoverable and exceeds fair value. The Company estimates the fair values of assets subject to long-lived asset impairment based on the Company's own judgments about the assumptions market participants would use in pricing the assets and observable market data, when available. During the second quarter of 2023, the Board of Directors of the Company made the decision to permanently cease operations at the Munhall facility. The Company ceased operations effective August 31, 2023. As a result of this decision, it was determined to be more likely than not that the assets of Munhall would be sold or otherwise disposed of significantly before the end of their previously estimated useful lives, and therefore, experienced a triggering event and were evaluated for recoverability. During the first quarter of 2024, the Company incurred asset impairment charges of $ 1.1 million related to the write down of the remaining long-lived assets at the facility. Assets Held-for-Sale During the third quarter of 2024, the Company entered into a purchase agreement to sell the remaining assets at the Munhall facility for approximately $ 2.8 million. The Company recognized a $ 1.5 million gain on the sale in the third quarter of 2024. Fair Value of Financial Instruments The fair values of cash and cash equivalents, accounts receivable, accounts payable and the Company's note payable approximated their carrying value because of the short-term nature of these instruments. The Company's revolving line of credit, which is based on a variable interest rate, are also reflected in the financial statements at carrying value which approximates fair value as of December 31, 2025. The carrying amount of cash and cash equivalents are considered Level 1 measurements. The carrying amounts of accounts receivable, accounts payable, note payable and revolving line of credit are considered Level 2 measurements. See Note 6 for further information on the Company's debt. Note 5: Property, Plant and Equipment Property, plant and equipment consist of the following: (in thousands) 2025 2024 Land $ 518 $ 665 Leasehold improvements 2,624 2,220 Buildings 1,830 1,475 Machinery, fixtures and equipment 40,120 39,038 Construction-in-progress 332 875 45,424 44,273 Less accumulated depreciation and amortization ( 29,662 ) ( 26,684 ) Property, plant and equipment, net $ 15,762 $ 17,589 The following table sets forth depreciation expense related to property, plant and equipment: (in thousands) 2025 2024 Cost of sales $ 3,312 $ 3,643 Selling, general and administrative 262 241 Total depreciation $ 3,574 $ 3,884 40 Ascent Industries Co. Notes to Consolidated Financial Statements Note 6: Debt Short-term debt On June 21, 2025, the Company entered into a note payable in the amount of $ 1.1 million with an interest rate of 3.68 % maturing April 1, 2026. The agreement is associated with the financing of the Company's insurance premium in the current year. As of December 31, 2025, the outstanding balance was $ 0.4 million. Credit Facilities On April 4, 2025, Ascent entered into a Limited Consent, Fourth Amendment to Credit Agreement to Loan Documents with BMO Bank N.A. under Ascent’s credit facility (the “Fourth Credit Facility Amendment”) which released the lien on the assets of BRISMET and removed BRISMET as a loan party and reduced the maximum revolving loan commitment under the credit facility from $ 60 million to $ 30 million. On June 30, 2025, Ascent entered into a Limited Consent, Fifth Amendment to Credit Agreement to Loan Documents with BMO Bank N.A. under Ascent’s credit facility (the “Fifth Credit Facility Amendment”) which released the lien on the assets of ASTI and removed ASTI as a loan party. On December 10, 2025, Ascent Industries Co. (“Ascent”) entered into a Limited Waiver, Consent and Sixth Amendment to Credit Agreement and Omnibus Amendment to Loan Documents with BMO Bank N.A. and the other lenders under Ascent’s credit facility (the “Sixth Credit Facility Amendment”). The Sixth Credit Facility Amendment contained a consent for (a) Ascent entering into the assignment of the lease for Ascent’s former Munhall facility to a new tenant, and (b) certain organizational changes relating to an internal restructuring of Ascent’s chemical manufacturing businesses, including (i) updates to the names of Ascent’s chemical manufacturing businesses designed to provide for more consistent branding across its manufacturing locations and (ii) the formation of a new holding company named Ascent Chemicals, LLC (“Ascent Chemicals”) to own all of Ascent’s chemical manufacturing businesses. The Sixth Credit Facility Amendment also added Ascent Chemicals as a loan party to the credit facility. In addition, the Credit Facility Amendment provided a limited waiver of an event of default that occurred under the credit facility due to Ascent’s repurchase of shares in an aggregate amount that exceeded the threshold set forth in Section 8.06(c) of the credit facility. The lenders under the credit facility have not accelerated any obligations of Ascent as a result of such event of default and will no longer have any such acceleration rights as a result of the limited waiver. The maximum revolving loan commitment under the credit facility remains $ 30 million with an interest rate between 1.85 % and 2.35 %, depending on average availability under the credit facility and the Company's consolidated fixed charge coverage ratio. The term of the credit facility remains through December 31, 2027. We have pledged all of our accounts receivable, inventory, and certain machinery and equipment as collateral for the Credit Agreement. Availability under the Credit Agreement is subject to the amount of eligible collateral as determined by the lenders' borrowing base calculations. Amounts outstanding under the revolving line of credit currently bear interest at (a) the Base Rate (as defined in the Credit Agreement) plus 0.75 %, or (b) SOFR plus 1.75 %. The Credit Agreement also provides an unused commitment fee based on the daily used portion of the credit facility. Pursuant to the Sixth Credit Facility Amendment, the Company was required to pledge all of its tangible and intangible properties, including the stock and membership interests of its subsidiaries. The Sixth Credit Facility Amendment contains covenants requiring the maintenance of a minimum consolidated fixed charge coverage ratio if excess availability falls below the greater of (i) $ 4.5 million and (ii) 15 % of the revolving credit facility. As of December 31, 2025, the Company was in compliance with all financial debt covenants. The revolving line of credit interest rate was 0.35 % as of December 31, 2025 and 2024, respectively. The interest rate in 2025 and 2024 consisted solely of the Company's unused commitment fee under the Credit Facility. The Company had no average borrowings under the revolving line of credit during 2025 or 2024. The Company made interest payments on all credit facilities of $ 0.2 million and $ 0.3 million in 2025 and 2024, respectively. The Company had no debt outstanding under its credit facilities as of December 31, 2025 and 2024. As of December 31, 2025, the Company had $ 11.4 million of remaining availability under its credit facility. 41 Ascent Industries Co. Notes to Consolidated Financial Statements Note 7: Leases The Company's portfolio of leases contains both finance and operating leases that relate to real estate and manufacturing equipment. Substantially all of the value of the Company's leased plants and facilities relate to the Master Lease with Store Master Funding XII, LLC (“Store”), an affiliate of Store Capital Corporation ("Store Capital"), that was entered into in 2016 and since amended, with the latest amendment occurring in 2025. During the third quarter of 2024, the Company and Store closed on a transaction pursuant to which Store sold to a third party approximately 20,200 square feet of warehouse space located at Ascent’s facility in Cleveland, Tennessee. As a result of the sale, the Company and Store entered into a Fourth Amended and Restated Master Lease Agreement (the “Fourth Master Lease”) to reduce the Company's rent at the Cleveland facility pursuant to the terms and conditions of the Third Amended and Restated Master Lease Agreement between the parties dated September 10, 2020. The Fourth Master Lease was determined to be a lease modification that qualified for a remeasurement of the existing lease and not a separate contract. Upon modification of the Fourth Master Lease, the right-of-use asset and operating lease liability were remeasured using an incremental borrowing rate determined on the date of modification. As such, the Company recognized an increase in the right-of-use asset and operating lease liability related to the Fourth Master Lease of $ 1.3 million and recognized a gain on the modification of $ 0.1 million, which is reported within operating expenses on the consolidated statements of income (loss). On April 4, 2025, Ascent and Store entered into a Fifth Amended and Restated Master Lease Agreement (the "Fifth Master Lease") to remove the BRISMET facility and reduce the Company's rent pursuant to the Fourth Amended and Restated Master Lease Agreement between the parties dated August 28, 2024. The Fifth Master Lease was determined to be a lease modification that qualified for a remeasurement of the existing lease and not a separate contract. Upon modification of the Fifth Master Lease, the right-of-use asset and operating lease liability were remeasured using an incremental borrowing rate determined on the date of modification. As such, the Company recognized a decrease in the right-of-use asset and operating lease liability related to the Fifth Master Lease of $ 6.5 million and $ 7.0 million, respectively, and recognized a gain on the modification of $ 0.5 million, which is reported within operating expenses on the consolidated statements of income (loss). On June 30, 2025, Ascent and Store entered into a Sixth Amended and Restated Master Lease Agreement (the "Sixth Master Lease") to remove the ASTI facility and reduce the Company's rent pursuant to the Fifth Amended and Restated Master Lease Agreement between the parties dated April 4, 2025. The Sixth Master Lease was determined to be a lease modification that qualified for a remeasurement of the existing lease and not a separate contract. Upon modification of the Sixth Master Lease, the right-of-use asset and operating lease liability were remeasured using an incremental borrowing rate determined on the date of modification. As such, the Company recognized a decrease in the right-of-use asset and operating lease liability related to the Fifth Master Lease of $ 4.0 million. See Note 2 for additional information on the Company's divestitures of BRISMET and ASTI. In the fourth quarter of 2025, the Company and Store completed a lease assignment of the former Munhall facility to a unaffiliated third party. As a result, on November 14, 2025, Ascent and Store entered into a Seventh Amended and Restated Master Lease Agreement (the "Seventh Master Lease") to remove the former Munhall facility and reduce the Company's rent pursuant to the Sixth Amended and Restated Master Lease Agreement between the parties dated June 30, 2025. The Seventh Master Lease was determined to be a lease modification that qualified for a remeasurement of the existing lease and not a separate contract. Upon modification of the Sixth Master Lease, the right-of-use asset and operating lease liability were remeasured using an incremental borrowing rate determined on the date of modification. As such, the Company recognized a decrease in the right-of-use asset and operating lease liability related to the Seventh Master Lease of $ 5.5 million and $ 7.2 million, respectively, resulting in a gain on modification of $ 1.7 million in the fourth quarter of 2025. As of December 31, 2025, operating lease liabilities related to the master lease agreement with Store Capital totaled $ 11.7 million, or 88 % of the total lease liabilities on the consolidated balance sheet. During the year ended December 31, 2025, the Company entered into new finance lease agreements resulting in an additional $ 0.3 million of finance lease assets and lease liabilities. The Company did not enter into any new operating lease agreements for the year ended December 31, 2025. 42 Ascent Industries Co. Notes to Consolidated Financial Statements Balance Sheet Presentation Operating and finance lease amounts from continuing operations are as follows (in thousands): Year Ended December 31, Classification Financial Statement Line Item 2025 2024 Operating lease assets Right-of-use assets, operating leases $ 9,368 $ 28,140 Finance lease assets Property, plant and equipment, net 1,060 1,227 Current liabilities Current portion of lease liabilities, operating leases 712 1,495 Current liabilities Current portion of lease liabilities, finance leases 331 293 Non-current liabilities Non-current portion of lease liabilities, operating leases 11,496 29,972 Non-current liabilities Non-current portion of lease liabilities, finance leases $ 808 $ 1,015 Total Lease Cost Individual components of the total lease cost incurred by the Company are as follows: Year Ended December 31, (in thousands) 2025 2024 Operating lease cost 1 $ 2,423 $ 3,924 Finance lease cost: Reduction in carrying amount of right-of-use assets 226 311 Interest on finance lease liabilities 53 85 Sublease income ( 552 ) ( 419 ) Total lease cost $ 2,150 $ 3,901 1 Includes short term leases, which are immaterial Reduction in carrying amounts of right-of-use assets held under finance leases is included in depreciation expense. Minimum rental payments under operating leases are recognized on a straight-line method over the term of the lease including any periods of free rent and are included in selling, general, and administrative expense on the consolidated statements of income (loss). Maturity of Leases The amounts of undiscounted future minimum lease payments under leases as of December 31, 2025 are as follows: (in thousands) Operating Finance 2026 $ 1,557 $ 387 2027 1,589 387 2028 1,622 387 2029 1,655 86 2030 1,589 65 Thereafter 9,566 — Total undiscounted minimum future lease payments 17,578 1,312 Imputed Interest ( 5,370 ) ( 174 ) Total lease liabilities $ 12,208 $ 1,138 43 Ascent Industries Co. Notes to Consolidated Financial Statements Lease Term and Discount Rate Year Ended December 31, 2025 2024 Weighted-average discount rate Operating leases 7.18 % 7.15 % Finance leases 5.94 % 5.75 % Weighted-average remaining lease term Operating leases 10.50 years 11.59 years Finance leases 3.23 years 4.03 years Subleases During the second quarter of 2024, the Company entered into a sublease agreement with a third party to sublease the former Specialty Pipe and Tube, Inc. facilities in Mineral Ridge, Ohio and Houston, Texas. The sublease agreement continues through the remaining term of the Master Lease Agreement and will expire on September 30, 2036, unless terminated in accordance with the sublease agreement. The sublease provides for an annual base rent of approximately $ 0.1 million in the first year, which increases on an annual basis by 2.0 %. The sublessee is responsible for taxes and all operating expenses related to the subleased space The Company also currently subleases the former Palmer facility and records cash receipts related to the subleases in other expense (income) on the consolidated statements of income (loss). Sublease payments offset the amounts the Company incurs in the Master Lease related to sublet facilities. Future expected cash receipts from the Company's subleases as of December 31, 2025 are as follows: (in thousands) Sublease Receipts 2026 $ 594 2027 606 2028 618 2029 631 2030 643 Thereafter 3,954 Total sublease receipts $ 7,046 Note 8: Accrued Expenses & Other Current Liabilities Accrued expenses for continuing operations consist of the following: (in thousands) 2025 2024 Salaries, wages, and commissions $ 2,934 $ 1,636 Income taxes 115 — Taxes, other than income taxes 988 350 Insurance 384 964 Professional fees 127 303 Benefit plans 10 17 Waste disposal 355 — Other accrued items 476 328 Total accrued expenses $ 5,389 $ 3,598 44 Ascent Industries Co. Notes to Consolidated Financial Statements Note 9: Shareholders' Equity Authorized shares of common stock were $ 24.0 million ($ 1.00 par value) at December 31, 2025 and 2024. Share Repurchase Program The Company's previous share repurchase program allowed for repurchase of up to 790,383 shares of the Company's outstanding common stock and expired on February 17, 2025. On February 17, 2025, the Board of Directors authorized a new share repurchase program allowing for repurchase of up to 1.0 million shares of the Company's outstanding common stock over 24 months. On December 19, 2025, the Board of Directors authorized a new share repurchase program allowing for repurchase of up to 2.0 million shares of the Company's outstanding common stock over 24 months. The shares will be purchased from time to time at prevailing market prices, through open market or privately negotiated transactions, depending on market conditions. Under the program, the purchases will be funded from available working capital, and the repurchased shares will be returned to the status of authorized, but unissued shares of common stock or held in treasury. There is no guarantee as to the exact number of shares that will be repurchased by the Company, and the Company may discontinue purchases at any time that management determines additional purchases are not warranted. As of December 31, 2025, the Company had 1,998,504 shares of its share repurchase authorization remaining. The Company may also withhold shares from employees to satisfy either the exercise price of stock options exercised or the statutory withholding tax liability resulting from the vesting of share-based awards. Shares repurchased for the year ended December 31, 2025 and 2024 were as follows: Year Ended December 31, 2025 2024 Share repurchase program 1 740,683 101,263 Shares withheld from employees 4,841 — Total shares repurchased 745,524 101,263 Average price per share $ 12.26 $ 10.21 Total cost of shares repurchased 2 $ 9,159,661 $ 1,037,346 1 Includes 745 shares repurchased under previous share repurchase program which expired on February 17, 2025 and 743,283 shares repurchased under the repurchase program authorized on February 17, 2025 2 Includes broker fees incurred as part of repurchase transactions Dividends At the end of each fiscal year the Board reviews the financial performance and capital needed to support future growth to determine the amount of cash dividend, if any, which is appropriate. In 2025 and 2024, no dividends were declared or paid by the Company. Note 10: Accounting for Share-Based Payments Overview of Share-Based Payment Plans The Company has a number of active and inactive equity incentive plans (the "Incentive Plans") under which the Company has been authorized to grant share-based awards to key employees and non-employee directors. A total of 0.8 million shares have been authorized for grant to key employees and non-employee directors under the Company's currently active Incentive Plans. As of December 31, 2025, there were 0.4 million shares remaining available for grants under the currently active equity Incentive Plans. The Company recognized share-based compensation expense within SG&A expense on the consolidated statements of income (loss) of $ 1.3 million and $ 0.8 million in 2025 and 2024, respectively. Total unrecognized share-based payment expense for all share-based payment plans was $ 1.0 million at December 31, 2025, of which $ 0.6 million is expected to be recognized in 2026 and $ 0.4 million thereafter. This results in these amounts being recognized over a weighted-average period of 2.34 years. 45 Ascent Industries Co. Notes to Consolidated Financial Statements Stock Options Stock options have terms of 10 years and vest in 20 % or 33 % increments annually on a cumulative basis, beginning one year after the date of grant, and are assigned an exercise price equal to the average of the high and low common stock price on the day prior to the date of grant. Options are expensed on a straight-line basis over the grant vesting period, which is considered to be the requisite service period. There was no compensation expense charged against income for options in 2025 or 2024. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model. When determining expected volatility, the Company considers the historical volatility of the Company’s stock price. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant, based on the options’ expected term. The Company granted no new options in 2025 or 2024. Transactions related to stock options for the year ended December 31, 2025 are summarized as follows: Weighted Average Exercise Price Options Outstanding Weighted Average Contractual Term (in years) Intrinsic Value of Options Outstanding at December 31, 2024 $ 13.56 98,088 4.2 $ — Exercised 13.00 ( 32,000 ) Canceled, forfeited, or expired 15.37 ( 23,421 ) Outstanding at December 31, 2025 $ 13.00 42,667 4.1 $ 136,321 Vested and expected to vest at December 31, 2025 $ — — — $ — Exercisable options $ 13.00 42,667 4.1 $ 136,321 Restricted Stock Awards Restricted stock awards are valued based on the average of the high and low common stock price on the day prior to the date of grant. In general, these awards vest in 33 % increments annually on a cumulative basis, beginning one year after the date of grant. In order for the awards to vest, the employee must be in the continuous employment of the Company since the date of the award. Except for death, disability, or qualifying retirement, any portion of an award that has not vested is forfeited upon termination of employment. An employee is not entitled to any voting rights with respect to any shares not yet vested, and the shares are not transferable. All awards are expensed on a straight-line basis over the grant vesting period, which is considered to be the requisite service period. The weighted average period over which the restricted stock awards compensation expense is expected to be recognized is 2.53 years. Transactions related to restricted stock awards for the year ended December 31, 2025 are summarized as follows: Shares Weighted Average Grant Date Fair Value Nonvested at December 31, 2024 29,865 $ 9.49 Granted 69,448 12.72 Vested ( 11,590 ) 9.98 Nonvested at December 31, 2025 87,723 $ 10.68 Performance Stock Units The Company issues performance stock units classified as equity awards. In order for the awards to vest, the employee must be in the continuous employment of the Company since the date of the award. Except for death, disability, or qualifying retirement, any portion of an award that has not vested is forfeited upon termination of employment. An employee is not entitled to any voting rights with respect to any shares not yet vested, and the shares are not transferable. 46 Ascent Industries Co. Notes to Consolidated Financial Statements The Company issues performance stock units which contain performance and service conditions that must be satisfied for an employee to earn the right to benefit from the award. Expense is recognized on a straight-line basis over the requisite service period, based on the probability of achieving the performance condition, with changes in expectations recognized as an adjustment to earnings in the period of the change. Compensation cost is not recognized for performance share units that do not vest because service or performance conditions are not satisfied, and any previously recognized compensation cost is reversed. The performance condition for these awards is based on the achievement of specified Adjusted EBITDA targets. In general, 0 % to 150 % of the Company’s performance share units vest at the end of a specified service period from the date of grant based upon achievement of the performance condition, with both the service period and performance condition specified in the performance share unit agreement. Transactions related to performance share units which have a performance and service condition for the year ended December 31, 2025 are as follows: Shares Weighted Average Grant Date Fair Value Nonvested at December 31, 2024 — $ — Granted 69,541 12.44 Nonvested at December 31, 2025 69,541 $ 12.44 The weighted-average grant-date price per unit of performance stock units granted with a performance and service condition was $ 12.44 in 2025. The Company did not grant performance stock units granted with a performance and service condition in 2024. The Company also issues performance stock units which contain market conditions that must be satisfied for an employee to earn the right to benefit from the award. Performance stock units vest upon the achievement of specific thirty-day volume-weighted average price targets of a share of the Company's common stock over a period of three years . The performance stock units are divided into tranches, each one vesting on the date the thirty-day volume-weighted average price of the Company's common stock meets or exceeds the price target are summarized in the table below: Shares Volume Weighted Average Price Target Tranche I 11,589 16.00 Tranche II 11,588 19.00 The fair value of the performance stock units granted with a market performance condition are determined using a Monte Carlo simulation considering historical performance of the Company's stock as well as the probability of attaining the market performance condition determined on the date of grant. Expense is recognized on a straight-line method over the requisite service period. Performance stock units do not have dividend rights. The weighted average period over which the performance stock units compensation expense is expected to be recognized is 2.27 years. Transactions related to performance stock units which have a market condition for the year ended December 31, 2025 are as follows: Units Weighted-Average Grant Date Fair Value Outstanding at December 31, 2024 184,767 $ 3.49 Vested ( 11,590 ) 2.64 Forfeited ( 150,000 ) 3.64 Outstanding at December 31, 2025 23,177 $ 2.94 47 Ascent Industries Co. Notes to Consolidated Financial Statements The Company did not grant performance stock units with a market condition in 2025. The weighted-average grant-date fair value per unit of performance stock units granted with a market condition was $ 2.61 in 2024. There were 11,590 shares of performance stock units with a market condition vested in 2025. There were no performance stock units with a market condition vested in 2024. Non-Employee Director Compensation Plan Non-employee directors are paid an annual retainer of $ 115,000 . Each non-employee director appointed to serve as a chairperson of a standing board committee receives the following annual retainer: Audit Committee: $ 10,000 ; Compensation Committee: $ 7,500 ; Nominating and Corporate Governance Committee: $ 6,000 . The committee chairperson retainer is in addition to the board retainer. Each director has the opportunity to elect to receive 100 % of the retainer in restricted stock with a minimum of $ 30,000 of the retainer in restricted stock. The amount of the retainer elected to be paid in restricted stock vests quarterly over a one year period. The number of restricted shares is determined by the average of the high and low sale price of the Company's stock on the day prior to the Annual Meeting of Shareholders. In 2025, the Company issued an aggregate of 13,498 shares of restricted stock to non-employee directors in lieu of $ 0.2 million of their annual cash retainer fees. The weighted average period over which the non-employee director award compensation expense is expected to be recognized is 0.48 years. Note 11: Income Taxes As discussed in Note 1 , in December 2023, the FASB issued ASU 2023-09, which established new income tax disclosure requirements in addition to modifying and eliminating certain existing requirements. Under the new guidance, entities must consistently categorize and provide greater disaggregation of information in the rate reconciliation while also further disaggregating income taxes paid. In the fourth quarter of 2025, the company adopted ASU 2023-09. On July 4, 2025, the legislation commonly referred to as the One Big Beautiful Bill Act ("OBBBA") was enacted in the United States. The OBBBA includes several significant changes in the U.S. tax law, including the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act and the restoration of favorable tax treatment for specific business provisions, including domestic research cost expensing and the business interest expense limitation. This legislation was enacted during the third quarter of 2025 and at this time, the Company does not expect the effects of this legislation to have a material impact on its financial results. The Company's loss from continuing operations before income taxes is domestic-sourced only, and was as follows for the periods presented: (in thousands) 2025 2024 Loss from continuing operations before income taxes $ ( 5,562 ) $ ( 10,771 ) The Company's income tax expense from continuing operations consisted of the following: (in thousands) 2025 2024 Current income taxes: Federal $ ( 26 ) $ ( 39 ) State 134 ( 144 ) Total current income taxes 108 ( 183 ) Deferred tax expense: Federal ( 98 ) 1,653 State 12 336 Total deferred income taxes ( 86 ) 1,989 Income tax expense $ 22 $ 1,806 48 Ascent Industries Co. Notes to Consolidated Financial Statements The reconciliation of the statutory federal income tax rate to the effective tax rate for the current year in comparison of prior year in accordance with the adoption of ASU 2023-09 is as follows: (in thousands) 2025 2024 Amount % Amount % Tax at U.S. statutory rates $ ( 1,168 ) 21.0 % $ ( 2,262 ) 21.0 % State income taxes, net of federal tax benefit 1 340 ( 6.1 ) % ( 7 ) 0.1 % State valuation allowance ( 225 ) 4.0 % 158 ( 1.5 ) % Federal valuation allowance 966 ( 17.3 ) % 4,095 ( 38.0 ) % Stock option compensation 104 ( 1.9 ) % 37 ( 0.3 ) % Other nondeductible expenses 5 ( 0.1 ) % ( 12 ) 0.1 % Other, net — — % ( 203 ) 1.8 % Total $ 22 ( 0.4 ) % $ 1,806 ( 16.8 ) % 1 The state that contributes the majority (greater than 50%) of the tax effect in this category is South Carolina.. A summary of total income taxes paid (net of refunds), in accordance with the adoption of ASU 2023-09 for the year ended December 31, 2025 is as follows: (in thousands) 2025 U.S. Federal $ ( 20 ) U.S. State total $ ( 73 ) Income taxes paid (net of refunds) exceeded five percent of total income taxes paid (net of refunds) in the following jurisdictions: (in thousands) 2025 Georgia $ 77 South Carolina 12 Illinois ( 143 ) Virginia ( 17 ) 49 Ascent Industries Co. Notes to Consolidated Financial Statements Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The components of the Company's deferred tax assets and liabilities from continuing operations are as follows at the respective year ends: (in thousands) 2025 2024 Deferred income tax assets: Inventory valuation reserves $ 306 $ 1,570 Inventory capitalization 96 550 Accrued bonus 483 318 State net operating loss carryforwards 1,911 2,055 Federal net operating loss carryforwards 5,813 4,075 Lease liabilities 3,037 7,484 Interest limitation carryforwards 1,302 1,488 Intangible asset basis differences ( 671 ) 781 Other 752 1,444 Total deferred income tax assets 13,029 19,765 State valuation allowance ( 1,757 ) ( 2,026 ) Federal valuation allowance ( 6,681 ) ( 7,040 ) Total net deferred income tax assets 4,591 10,699 Deferred income tax liabilities: Fixed asset basis differences 2,163 4,010 Prepaid expenses 293 300 Lease assets 2,376 6,709 Total deferred income tax liabilities 4,832 11,019 Deferred income taxes, net $ ( 241 ) $ ( 320 ) The Company's effective tax rate for 2025 was less than the U.S. statutory rate of 21% primarily driven by adjustments to the valuation allowance in the period and increases in stock compensation. The Company's effective tax rate for 2024 was less than the U.S. statutory rate of 21% primarily due to discrete tax charges associated with recording a valuation allowance on cumulative US Federal and state deferred tax assets. The Company made no income tax payments in 2025 or 2024. The Company has $ 27.7 million of U.S. Federal net operating loss carryforwards and $ 6.2 million of interest limitation carryforwards at the end of 2025 compared to $ 19.4 million of U.S. Federal net operating loss carryforwards and $ 7.1 million of interest limitation carryforwards at the end of 2024. During the period, the Company determined that these carryforwards are unrealizable and not more likely than not to be utilized in future periods. The majority of these carryforwards are not subject to expiration. In addition, on a gross basis the Company had state net operating loss carryforwards of $ 41.8 million and $ 46.2 million at the end of 2025 and 2024, respectively. As of the end of 2025, the Company had recognized a state valuation allowance of $ 1.8 million, representing approximately a $ 0.3 million decrease year-over-year primarily driven by net operating loss carryforward expiration in jurisdictions for which we believe it is not more likely than not to be utilized in future periods. The majority of these losses will expire between the years of 2026 and 2044, while certain losses are not subject to expiration. The Company and its subsidiaries are subject to U.S. federal income tax as well as income tax of multiple state jurisdictions. The Company is no longer subject to U.S. federal examinations for years before 2020 or state examinations for years before 2019. The Company had no uncertain tax position activity during 2025 or 2024. The Company's continuing practice is to recognize interest and/or penalties related to income tax matters in the provision for income taxes. The Company had no accruals for uncertain tax positions including interest and penalties at the end of 2025. 50 Ascent Industries Co. Notes to Consolidated Financial Statements Note 12: Earnings (Loss) Per Share The following table sets forth the computation of basic and diluted earnings (loss) per share: (in thousands, except per share data) 2025 2024 Numerator: Net loss from continuing operations $ ( 5,584 ) $ ( 12,577 ) Net income (loss) from discontinued operations 6,451 ( 1,021 ) Net income (loss) $ 867 $ ( 13,598 ) Denominator: Weighted average common shares outstanding 9,643 10,106 Denominator for diluted earnings per share - weighted average shares 9,643 10,106 Net loss per share from continuing operations: Basic $ ( 0.58 ) $ ( 1.24 ) Diluted $ ( 0.58 ) $ ( 1.24 ) Net income (loss) per share from discontinued operations: Basic $ 0.67 $ ( 0.11 ) Diluted $ 0.67 $ ( 0.11 ) Net income (loss) per share: Basic $ 0.09 $ ( 1.35 ) Diluted $ 0.09 $ ( 1.35 ) The diluted earnings (loss) per share calculations exclude the effect of potentially dilutive shares when the inclusion of those shares in the calculation would have an anti-dilutive effect. The Company's dilutive securities have been excluded from the computation of diluted net loss share. Therefore, the weighted average number of common shares used to calculate the basic and diluted net loss per share is identical. The Company had 0.1 million shares of common stock that were anti-dilutive in 2025 and 2024. Note 13: Industry Segments Ascent Industries Co. has one reportable segment: Specialty Chemicals. The Specialty Chemicals segment includes the operating results of the Company’s plants involved in the production of specialty chemicals and produces critical ingredients and process aids for the oil & gas, household, industrial and institutional ("HII"), personal care, coatings, adhesives, sealants and elastomers (CASE), pulp and paper, textile, automotive, agricultural, water treatment, construction and other industries. The chief executive officer, who is also the chief operating decision maker (CODM), evaluates performance and determines resource allocations based on a number of factors, the primary measures being gross margin and segment net income (loss). The accounting principles applied at the operating segment level are the same as those applied at the consolidated financial statement level. The significant expense categories and amounts below align with the segment-level information that is regularly provided to the CODM. Intersegment sales and transfers are eliminated at the corporate consolidation level. 51 Ascent Industries Co. Notes to Consolidated Financial Statements The following tables summarize certain information regarding segments of the Company's continuing operations: Year Ended December 31, 2025 (in thousands) Specialty Chemicals Corporate & Other 1 Continuing Operations Net sales $ 74,942 $ — $ 74,942 Cost of goods sold - material 34,068 — 34,068 Cost of goods sold - other 2 20,350 — 20,350 Depreciation 3,312 — 3,312 Gross profit 17,212 — 17,212 Research and development — 71 71 Selling, general and administrative expense 3 12,590 10,371 22,961 Depreciation & amortization 779 353 1,132 Acquisition costs and other 92 639 731 Asset impairments — 1,622 1,622 Gain on lease modification — ( 2,278 ) ( 2,278 ) Interest (income) expense, net 52 ( 764 ) ( 712 ) Income taxes — 22 22 Other (income) expense, net ( 1 ) ( 752 ) ( 753 ) Net income (loss) $ 3,700 $ ( 9,284 ) $ ( 5,584 ) Identifiable assets $ 37,303 $ 74,634 $ 111,937 Capital expenditures $ 1,385 $ 159 $ 1,544 Geographic sales 4 United States $ 70,495 $ — $ 70,495 Mexico 1,186 — 1,186 Canada 785 — 785 Honduras 711 — 711 Colombia 627 — 627 The Netherlands 597 — 597 Costa Rica 266 — 266 Japan 90 — 90 Guatemala 53 — 53 Singapore 44 — 44 Bahamas 37 — 37 Taiwan 31 — 31 Thailand $ 20 $ — $ 20 1 Other includes corporate overhead expenses and ongoing expenses for properties under the Master Lease not assigned to a segment in which the Company is the responsible party. 2 Cost of good sold - other includes manufacturing labor and overhead expenses, repair and maintenance expense, shipping expense, scrap and shrinkage expense, and other operational manufacturing overhead expenses. 3 Selling, general and administrative expenses include sales and administrative salaries, wages and benefits and overhead expenses, professional fees, corporate overhead allocation expense and other administrative overhead expenses. 4 Geographic sales are attributed to countries based on the location of the customer. 52 Ascent Industries Co. Notes to Consolidated Financial Statements Year Ended December 31, 2024 (in thousands) Specialty Chemicals Corporate & Other 1 Continuing Operations Net sales $ 80,763 $ — $ 80,763 Cost of goods sold - material 40,903 — 40,903 Cost of goods sold - other 2 25,040 485 25,525 Depreciation 3,631 12 3,643 Gross profit 11,189 ( 497 ) 10,692 Selling, general and administrative expense 3 8,672 11,185 19,857 Depreciation & amortization 874 168 1,042 Acquisition costs and other 476 186 662 Gain on lease modification — ( 67 ) ( 67 ) Interest expense, net 75 342 417 Income taxes — 1,806 1,806 Other (income) expense, net ( 1 ) ( 447 ) ( 448 ) Net income (loss) $ 1,093 $ ( 13,670 ) $ ( 12,577 ) Identifiable assets $ 38,928 $ 46,298 $ 85,226 Capital expenditures $ 1,120 $ — $ 1,120 Geographic sales United States $ 75,564 $ — $ 75,564 Mexico 1,880 — 1,880 Canada 1,750 — 1,750 Honduras 1,212 — 1,212 Costa Rica 194 — 194 Argentina 47 — 47 Singapore 44 — 44 Taiwan 30 — 30 Guatemala 22 — 22 Brazil 11 — 11 Other $ 9 $ — $ 9 1 Other includes corporate overhead expenses and ongoing expenses for properties under the Master Lease not assigned to a segment in which the Company is the responsible party. 2 Cost of good sold - other includes manufacturing labor and overhead expenses, repair and maintenance expense, shipping expense, scrap and shrinkage expense, and other operational manufacturing overhead expenses. 3 Selling, general and administrative expenses include sales and administrative salaries, wages and benefits and overhead expenses, professional fees, corporate overhead allocation expense and other administrative overhead expenses. 4 Geographic sales are attributed to countries based on the location of the customer. Note 14: Benefit Plans and Collective Bargaining Agreements The Company has a 401(k) Employee Stock Ownership Plan (the "401(k)/ESOP Plan") covering all non-union employees. Employees can contribute to the 401(k)/ESOP Plan up to 100 % of their wages with a maximum of $ 23,500 for 2025. Under the Economic Growth and Tax Relief Reconciliation Act, employees who are age 50 or older could contribute an additional $ 7,500 per year for a maximum of 31,000 for 2025. Contributions by the employees are invested in one or more funds at the direction of the employee; however, employee contributions cannot be invested in Company stock. Contributions by the Company are made in accordance with the investment elections made by each participant for his or her deferral contributions. The Company contributes on behalf of each eligible participant a matching contribution equal to a percentage determined 53 Ascent Industries Co. Notes to Consolidated Financial Statements each year by the Board of Directors. For 2025 and 2024 the maximum was 100 % of employee contributions up to a maximum of 4 % of their eligible compensation. The matching contribution is applied to the employee accounts after each payroll. Matching contributions of approximately $ 0.6 million and $ 1.0 million were made for 2025 and 2024, respectively. The Company may also make a discretionary contribution, which if made, would be distributed to all eligible participants regardless of whether they contribute to the 401(k)/ESOP Plan. No discretionary contributions were made to the 401(k)/ESOP Plan in 2025 or 2024. The Company also maintains a Collective Bargaining Agreement (the "Virginia CBA") with the United Food and Commercial Workers, Local Union 400 (the "Virginia Union"), which represents employees at the Virginia facility and is required to make additional quarterly contributions for hourly employees who had a hire date prior to June 1, 2013. Additional quarterly matching contributions of approximately $ 29,629 were made for 2025 and $ 30,358 for 2024 . Note 15: Commitments and Contingencies In August of 2023, the Company was named as a defendant in a lawsuit filed with the Court of Common Pleas for Delaware County, Ohio, asserting various claims for breach of contracts resulting in losses to the plaintiff and seeking damages in the amount of $ 0.7 million plus prejudgment interest and attorney's fees. In December 2024, the Company entered into mediation with the plaintiff subject to negotiation of a mutually agreeable settlement. The Company had an estimated liability of $ 0.4 million related to the lawsuit as of December 31, 2024. In January of 2025, the Company resolved the case through a settlement agreement and no longer has funds reserved for the matter. In addition, from time to time, we are involved in various legal proceedings arising from the normal course of business activities. We are not presently a party to any other such litigation the outcome of which, we believe, if determined adversely to us, would individually, or taken together, have a material adverse effect on our business, operating results, cash flows, or financial condition. Defending such proceedings is costly and can impose a significant burden on management and employees. We may receive unfavorable preliminary or interim rulings in the course of litigation, and there can be no assurances that favorable final outcomes will be obtained. Note 16: Subsequent Events The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the financial statements were available to be issued. Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements. 54 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.