Aebi Schmidt Holding AG 10-K

Item 8. Financial Statements and Supplementary Data INDEX TO AEBI SCHMIDT HOLDING AG AUDITED ANNUAL CONSOLIDATED FINANCIAL STATEMENTS RE PORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM [PCAOB ID No. 1358 ] 49 CONSOLIDATED BALANCE SHEETS 51 CONSOLIDATED STATEMENTS OF OPERATIONS 54 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME 55 CONSOLIDATED STATEMENTS OF EQUITY 56 CONSOLIDATED STATEMENTS OF CASH FLOWS 57 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 59 48 Report of Independent Registered Public Accounting Firm To the Board of Directors and shareholders of Aebi Schmidt Holding AG Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Aebi Schmidt Holding AG and its subsidiaries (the “Company”) as of December 31, 2025 and 2024, and the related consolidated statements of operations, of comprehensive income, of equity and of cash flows for each of the three years in the period ended December 31, 2025, including the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025 in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements 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 of these consolidated financial statements 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. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that 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. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below 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 (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Acquisition of The Shyft Group, Inc. – Valuation of Customer Relationships and Brand As described in Notes 1 and 15 to the consolidated financial statements, on July 1, 2025, the Company acquired all outstanding equity of The Shyft Group, Inc. (“Shyft”) for total purchase consideration of approximately $443 million. The Shyft acquisition was accounted for using the acquisition method of accounting with the purchase price allocated to the assets purchased and liabilities assumed based upon their estimated fair values at the date of acquisition. The determination of the estimated fair value of assets acquired and liabilities assumed requires management’s judgment and involves the use of significant estimates and assumptions. Of the total fair value of the acquired identifiable intangible assets of $183 million, approximately $91 million was assigned to customer relationships and approximately $61 million was assigned to brand. The fair value of customer relationships was determined using an income approach methodology, specifically the multi-period excess earnings method. The fair value of brand was determined using an income approach methodology, specifically the relief from royalty method. Significant assumptions used in estimating future cash flows included projected revenue growth rates and discount rate for customer relationships and projected revenue growth rates, royalty rate and discount rate for brand. The principal considerations for our determination that performing procedures relating to the valuation of customer relationships and brand in the acquisition of The Shyft Group, Inc. is a critical audit matter are (i) the significant judgment 49 by management when developing the fair value estimates of the customer relationships and brand acquired, (ii) the high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to projected revenue growth rates and discount rate for customer relationships and projected revenue growth rates, royalty rate and discount rate for brand; and (iii) the audit effort required, including the involvement of professionals with specialized skill and knowledge. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included, among others (i) reading the merger agreement; (ii) testing management’s process for developing the fair value estimate of the customer relationships and brand acquired; (iii) evaluating the appropriateness of the multi-period excess earnings and relief from royalty valuation methods used by management; (iv) testing the completeness and accuracy of the underlying data used in the valuations; and (v) evaluating the reasonableness of significant assumptions used by management related to projected revenue growth rates and discount rate for customer relationships and projected revenue growth rates, royalty rate and discount rate for brand. Evaluating management’s assumptions related to projected revenue growth rates for customer relationships and brand involved considering the consistency with historical performance, the Company’s approved plans, and relevant market information. Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the multi‑period excess earnings and relief from royalty valuation methods and (ii) the reasonableness of the projected revenue growth rates and discount rate for customer relationships and the projected revenue growth rates, royalty rate and discount rate for brand. Goodwill Impairment Assessment– North America Reporting Unit As described in Notes 1 and 4 to the consolidated financial statements, the Company’s goodwill balance associated with the North America reporting unit was $403 million as of December 31, 2025. Management tests goodwill for impairment at the reporting unit level on an annual basis as of year-end, or whenever an event or change in circumstances occurs that would more likely than not reduce the fair value of a reporting unit below its carrying amount. If the carrying amount of the reporting unit exceeds its estimated fair value, an impairment loss is recognized in an amount equal to the excess, up to the carrying value of the goodwill. The fair value of the reporting unit is determined by estimating the future cash flows of the reporting unit to which the goodwill relates and then discounting the future cash flows at a market-participant-derived weighted-average cost of capital (“WACC”). In determining the estimated future cash flows, management considers current and projected future levels of income based on the plans for that business; business trends, prospects and market and economic conditions; and market-participant considerations. Management’s cash flow analyses for the North America reporting unit included significant judgments and assumptions relating to revenue growth rates, EBITDA margins, and the WACC. The principal considerations for our determination that performing procedures relating to the goodwill impairment assessment of the North America reporting unit is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the North America reporting unit; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to revenue growth rates, EBITDA margins, and the WACC; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included, among others (i) testing management’s process for developing the fair value estimate of the North America reporting unit; (ii) evaluating the appropriateness of the discounted cash flow model used by management; (iii) testing the completeness and accuracy of underlying data used in the discounted cash flow model; and (iv) evaluating the reasonableness of the significant assumptions used by management related to revenue growth rates, EBITDA margins, and the WACC. Evaluating management’s assumptions related to revenue growth rates and EBITDA margins, involved evaluating whether the assumptions used by management were reasonable considering (i) relevant industry forecasts and macroeconomic conditions; (ii) the consistency with external market and industry data; and (iii) whether the assumptions were consistent with evidence obtained in other areas of the audit. Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the discounted cash flow model and (ii) the reasonableness of significant assumptions, including revenue growth rates, EBITDA margins, and the WACC. /s/ PricewaterhouseCoopers AG Zurich, Switzerland March 19, 2026 We have served as the Company's auditor since 2014. 50 AEBI SCHMIDT HOLDING AG AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except share data) 51 December 31, 2025 December 31, 2024 Assets Current assets: Cash and cash equivalents $ 98,512 $ 65,173 Accounts receivable, less allowance for credit losses of $ 505 and $ 580 310,755 173,957 Contract assets 82,342 24,145 Inventories 346,423 231,399 Prepaid expense and other current assets 39,698 23,487 Total current assets 877,730 518,161 Property, plant and equipment, net 167,899 68,647 Goodwill 403,147 221,189 Intangible assets, net 334,726 175,324 Deferred tax assets 5,910 5,693 Right of use assets operating leases 167,162 63,066 Other assets 51,705 36,044 TOTAL ASSETS $ 2,008,279 $ 1,088,124 LIABILITIES AND EQUITY Current liabilities: Accounts payable $ 234,642 $ 93,634 Accrued warranty 17,669 8,577 Accrued compensation and related taxes 36,957 23,204 Contract liabilities 19,856 20,044 Operating lease liabilities 18,856 9,241 Other current liabilities and accrued expenses 86,366 89,260 Current portion of long-term debt 46,908 23,259 Total current liabilities 461,254 267,219 Other non-current liabilities 15,308 8,053 Long-term operating lease liabilities 144,401 52,748 Long-term debt, less current portion 488,949 324,612 Long-term loans from shareholders 59,101 51,982 Deferred tax liabilities 24,315 18,335 Total liabilities 1,193,328 722,949 Commitments and contingent liabilities Shareholders' Equity Common stock, $ 1.00 par value: 79,300,000 and 40,365,218 shares authorized as of December 31, 2025, and December 31, 2024, respectively; and 76,998,754 and 40,351,680 shares outstanding as of December 31, 2025, and December 31, 2024, respectively. 76,999 40,352 Additional paid-in capital 652,425 232,281 Treasury shares, at cost ( 257 ) ( 257 ) Retained earnings 57,551 61,247 Accumulated other comprehensive income 28,183 31,469 Total Shareholders’ equity attributable to Aebi Schmidt Holding AG 814,901 365,092 Non-controlling interest 50 83 Total Shareholders' equity 814,951 365,175 TOTAL LIABILITIES AND EQUITY $ 2,008,279 $ 1,088,124 See accompanying Notes to Consolidated Financial Statements. 52 (Reflects the retrospective application of the 1-for- 7.5 forward stock split effective July 1, 2025; see “ Note 1 - Nature of Operations and Basis of Presentation ”) 53 AEBI SCHMIDT HOLDING AG AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) Year Ended December 31, 2025 2024 2023 Sales $ 1,526,625 $ 1,085,958 $ 1,015,572 Cost of products sold ( 1,222,571 ) ( 857,721 ) ( 808,920 ) Gross profit 304,054 228,237 206,652 Operating expenses: Research and development ( 26,494 ) ( 19,556 ) ( 17,125 ) Selling, general and administrative ( 180,647 ) ( 124,660 ) ( 117,057 ) Amortization of purchased intangibles ( 23,316 ) ( 14,088 ) ( 13,892 ) Other operating income (expense) ( 531 ) ( 1,441 ) 456 Total operating expenses ( 230,988 ) ( 159,745 ) ( 147,618 ) Operating income 73,066 68,492 59,034 Other income (expense): Interest expense ( 41,794 ) ( 34,106 ) ( 38,031 ) Other income (expense) ( 20,080 ) 7,278 ( 3,657 ) Total other expense ( 61,874 ) ( 26,828 ) ( 41,688 ) Income before income taxes 11,192 41,664 17,346 Income tax (expense) benefit ( 1,486 ) ( 10,927 ) ( 6,147 ) Net income 9,706 30,737 11,199 Less: Net income (loss) attributable to non-controlling interest ( 33 ) 55 0 Net income attributable to Aebi Schmidt Holding AG $ 9,739 $ 30,682 $ 11,199 Earnings per share Basic earnings per share $ 0.17 $ 0.76 $ 0.28 Diluted earnings per share $ 0.17 $ 0.76 $ 0.28 Basic weighted average common shares outstanding 58,664 40,364 40,342 Diluted weighted average common shares outstanding 58,784 40,364 40,342 See accompanying Notes to Consolidated Financial Statements. (Reflects the retrospective application of the 1-for- 7.5 forward stock split effective July 1, 2025; see “ Note 1 - Nature of Operations and Basis of Presentation ”) 54 AEBI SCHMIDT HOLDING AG AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In thousands) Year Ended December 31, 2025 2024 2023 Net income $ 9,706 $ 30,737 $ 11,199 Other comprehensive income: Foreign currency translation adjustments 612 3 2,829 Pension (benefit) loss, net of tax ( 3,898 ) ( 67 ) ( 3,733 ) Other comprehensive income (loss), net of tax ( 3,286 ) ( 64 ) ( 904 ) Comprehensive income (loss) 6,420 30,673 10,295 Less: Comprehensive income (loss) attributable to non-controlling interests ( 33 ) 55 0 Comprehensive income (loss) attributable to Aebi Schmidt Holding AG $ 6,453 $ 30,618 $ 10,295 See accompanying Notes to Consolidated Financial Statements. (Reflects the retrospective application of the 1-for- 7.5 forward stock split effective July 1, 2025; see “ Note 1 - Nature of Operations and Basis of Presentation ”) 55 AEBI SCHMIDT HOLDING AG AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EQUITY (In thousands, except per share data) Number of shares Common stock Additional Paid-in Capital Treasury shares Retained earnings Accumulated Other Comprehensive Income Total Shareholders’ equity Non- controlling interest Total equity Balance at January 1, 2023 40,340,978 $ 40,352 $ 232,180 $ ( 224 ) $ 24,661 $ 32,437 $ 329,406 $ 3 $ 329,409 Translation adjustments in the reporting period 2,829 2,829 2,829 Pension benefit ( 3,733 ) ( 3,733 ) ( 3,733 ) Net income 11,199 11,199 0 11,199 Purchase of treasury shares ( 76,440 ) ( 1,053 ) ( 1,053 ) ( 1,053 ) Disposal of treasury shares 100,680 101 1,277 1,378 1,378 Dividends declared ($ 0.05 per share) ( 2,070 ) ( 2,070 ) ( 2,070 ) Balance at December 31, 2023 40,365,218 $ 40,352 $ 232,281 $ — $ 33,790 $ 31,533 $ 337,956 $ 3 $ 337,959 Translation adjustments in the reporting period 3 3 3 Capital increase — 25 25 Pension benefit ( 67 ) ( 67 ) ( 67 ) Net income 30,682 30,682 55 30,737 Purchase of treasury shares ( 13,538 ) ( 257 ) ( 257 ) ( 257 ) Dividends declared ($ 0.08 per share) ( 3,225 ) ( 3,225 ) ( 3,225 ) Balance at December 31, 2024 40,351,680 $ 40,352 $ 232,281 $ ( 257 ) $ 61,247 31,469 $ 365,092 $ 83 $ 365,175 Translation adjustments in the reporting period 612 612 612 Pension benefit ( 3,898 ) ( 3,898 ) ( 3,898 ) Net income (loss) 9,739 9,739 ( 33 ) 9,706 Historical AEBI Employee Share Plan Reclassification to Equity 9,144 9,144 9,144 Issuance of common stock related to the Merger 36,591,107 36,591 406,512 443,103 443,103 Issuance of common stock for Aebi Schmidt RSAs and RSUs, net of tax and cancellations 55,967 56 3,983 4,039 4,039 Stock based compensation expense for 2025 Retention Awards, net of cancellations 505 505 505 Dividends declared ($ 0.17 per share) ( 13,435 ) ( 13,435 ) ( 13,435 ) Balance at December 31, 2025 76,998,754 $ 76,999 $ 652,425 $ ( 257 ) $ 57,551 28,183 $ 814,901 $ 50 $ 814,951 See accompanying Notes to Consolidated Financial Statements. (Reflects the retrospective application of the 1-for- 7.5 forward stock split effective July 1, 2025; see “ Note 1 - Nature of Operations and Basis of Presentation ”) 56 AEBI SCHMIDT HOLDING AG AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Year Ended December 31, 2025 2024 2023 Cash flows from operating activities: Net income $ 9,706 $ 30,737 $ 11,199 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 44,200 26,414 27,164 Non-cash stock based compensation expense 7,191 — — Bargain purchase gain — ( 6,780 ) — Foreign exchange (gains) losses on debt 2,961 ( 1,647 ) 1,778 Non-cash financing costs 1,617 — — Changes in valuation of liability for employee share plan ( 6,377 ) 3,446 2,562 Deferred taxes ( 690 ) ( 4,875 ) 690 Pension ( 2,308 ) ( 2,580 ) ( 6,352 ) Other, net 951 ( 885 ) 418 Changes in operating assets and liabilities: Accounts receivable and contract assets ( 53,079 ) 8,317 ( 29,353 ) Inventories ( 4,916 ) 14,019 ( 11,115 ) Accounts payable 55,356 ( 3,556 ) 10,032 Contract liabilities ( 11,711 ) 8,107 7,884 Income tax payable and receivable ( 8,339 ) 3,375 5,278 Accrued compensation and related taxes 16,204 2,189 2,501 Other current liabilities and accrued expenses ( 28,719 ) ( 9,479 ) 1,525 Other assets and liabilities ( 13,075 ) 1,968 5,879 Net cash provided by (used in) operating activities 8,972 68,770 30,090 Cash flows from investing activities: Purchases of property, plant and equipment ( 14,205 ) ( 13,596 ) ( 11,729 ) Purchases of intangible assets ( 36 ) ( 17 ) ( 185 ) Proceeds from sale of property, plant and equipment 699 63 338 Acquisition of businesses, net of cash acquired 19,366 4,438 ( 10,052 ) Net cash provided by (used in) investing activities 5,824 ( 9,112 ) ( 21,628 ) Cash flows from financing activities: Proceeds on long-term debt 612,000 — — Payments on long-term debt ( 573,182 ) ( 23,892 ) ( 19,457 ) Capital increase minority — 25 — Deferred payments related to historical transactions ( 5,694 ) ( 7,161 ) — Payment of finance lease principal ( 1,331 ) ( 918 ) ( 1,047 ) Payments of dividends ( 13,435 ) ( 3,225 ) ( 2,070 ) Exercising and vesting of stock incentive awards ( 2,010 ) — — Purchase and sale of treasury shares — ( 257 ) 224 Net cash provided by (used in) financing activities 16,348 ( 35,428 ) ( 22,350 ) Effect of exchange rate changes on cash and cash equivalents 2,195 ( 1,755 ) 116 Net increase (decrease) in cash and cash equivalents 33,339 22,475 ( 13,772 ) Cash and cash equivalents at beginning of period 65,173 42,698 56,470 57 Cash and cash equivalents at end of period $ 98,512 $ 65,173 $ 42,698 Supplemental disclosures of cash flow information Cash paid during the period for: Interest 40,322 33,799 37,786 Income taxes, net of refunds 16,717 13,400 6,064 On July 1, 2025, the Company reclassified $ 9,144 of ESPP-related liabilities to equity under the employee share plan. Prior to reclassification, the liability was revalued to $ 9,144 , reducing compensation expense by $ 6,377 . This was a non-cash financing activity. See accompanying Notes to Consolidated Financial Statements. (Reflects the retrospective application of the 1-for- 7.5 forward stock split effective July 1, 2025; see “ Note 1 - Nature of Operations and Basis of Presentation ”) 58 AEBI SCHMIDT HOLDING AG AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollar amounts in thousands, except per share data) NOTE 1 – NATURE OF OPERATIONS AND BASIS OF PRESENTATION As used herein, the terms the “Company”, “our,” or "Aebi Schmidt" refer to Aebi Schmidt Holding AG and its subsidiaries unless designated or identified otherwise. Nature of Operations The Company is a provider of innovative technical products for cleaning and clearing traffic areas as well as mowing green spaces in particularly challenging terrain. The range of products include vehicles, attachable and demountable devices for individual vehicle equipment as well as related services. In addition, the Company manufactures and assembles specialty vehicles for commercial and recreational applications, including walk-in vans, truck bodies for last-mile delivery, vocation-specific upfit solutions, and luxury motorhome chassis. It also offers replacement parts, repair, maintenance, and refurbishment services for these vehicles. Aebi Schmidt Holding AG covers the European and North American markets with its own sales organizations while clients outside of these markets are served either directly by the exporting subsidiary or indirectly by the worldwide dealer network. The Shyft Merger On December 16, 2024, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement"), by and among The Shyft Group, Inc., a Michigan corporation (“Shyft”), the Company, ASH US Group, LLC, a Delaware limited liability company and direct, wholly owned subsidiary of Aebi Schmidt (“Holdco”), and Badger Merger Sub, Inc., a Michigan corporation and direct, wholly owned subsidiary of Holdco (“Merger Sub”), pursuant to which, on the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub merged with and into Shyft (the “Merger”, and the time at which the Merger was effective, the “Effective Time”), with Shyft surviving the Merger as a direct, wholly owned subsidiary of Holdco and as an indirect, wholly owned subsidiary of Aebi Schmidt (the transactions contemplated by the Merger Agreement, the “Transactions”). “Combined Company” refers to Aebi Schmidt as of and following the Effective Time. At the Effective Time (July 1, 2025), each share of common stock, no par value, of Shyft (“Shyft Common Stock”) that was issued and outstanding as of immediately prior to the Effective Time (other than any shares of Shyft Common Stock that was held as of immediately prior to the Effective Time by Holdco, Aebi Schmidt, Merger Sub or any of their respective subsidiaries) automatically converted into the right to receive 1.040166432 (the “Exchange Ratio”) shares of fully paid and nonassessable shares of common stock, par value $ 1.00 per share, of Aebi Schmidt (“Aebi Schmidt Common Stock”), on the terms and subject to the conditions set forth in the Merger Agreement. Immediately following the Effective Time, the holders of shares of Shyft Common Stock as of immediately prior to the Effective Time owned approximately 48 % of the issued and outstanding shares of Aebi Schmidt Common Stock and the holders of shares of Aebi Schmidt Common Stock as of immediately prior to the Effective Time owned approximately 52 % of the issued and outstanding shares of Aebi Schmidt Common Stock Immediately following the Effective Time, the Board of Directors of the Combined Company was comprised of eleven members, six of whom were designated by Aebi Schmidt and five of whom were designated by Shyft. James A. Sharman, the Chairman of the Shyft Board of Directors as of immediately prior to the Effective Time, serves as the Chairman of the Board of Directors of the Combined Company (the “Combined Company Board”) following the Effective Time. Barend Fruithof, current Chief Executive Officer of Aebi Schmidt, serves as Vice Chairman and Peter Spuhler, former Chairman of Aebi Schmidt, serves on the Combined Company Board. The Merger is accounted for as a forward merger using the acquisition method of accounting, pursuant to Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 805, Business Combinations (“ASC 805”), with Aebi Schmidt treated as the legal and accounting acquirer and Shyft treated as the legal and accounting acquiree. For further information regarding the Shyft Transaction please refer to “ Note 15 - Business Combination .” Basis of Presentation and Consolidation The accompanying consolidated financial statements include the accounts of Aebi Schmidt Holding AG and its subsidiaries and have been prepared in accordance with accounting principles generally accepted (“GAAP”) in the United 59 States (“U.S.”) and include the accounts of Aebi Schmidt Holding AG and its subsidiaries. All inter-company transactions and balances have been eliminated. Non-Controlling Interest. At December 31, 2025, the Company held an 85 % share in ASH Trading & Services (Beijing) Co., Ltd. and a 99.98 % share in Aebi & Co. AG Maschinenfabrik, Burgdorf. Accordingly, each was reported as a consolidated subsidiary of Aebi Schmidt Holding AG and the portion of the equity of each of these subsidiaries not owned by the Company is presented as non-controlling interest. Use of Estimates . Management must make decisions that impact the reported amounts of assets, liabilities, revenues, expenses, and the related disclosures, including disclosures of contingent assets and liabilities. Such decisions include the selection of the appropriate accounting principles to be applied and the assumptions on which to base accounting estimates. Certain of these estimates including warranty expense, intangible asset valuation and useful life, impairment assessments of tangible and intangible assets, provisions of income taxes, the allowance for credit losses, pension benefit obligations, and incremental borrowing rate in right of use assets and lease liabilities are particularly sensitive. These estimates and assumptions are based on management’s best estimates and judgments at the time they are made and are generally derived from management’s understanding and analysis of the relevant and current circumstances, historical experience, and actuarial and other independent external third-party specialist valuations, when applicable. Management adjusts such estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with certainty, actual amounts could differ significantly from those estimated at the time the Consolidated Financial Statements are prepared. Changes in those estimates will be reflected in the Consolidated Financial Statements in future periods. Forward Stock Split . On July 1, 2025, the Company effected a forward stock split of its issued and outstanding common stock, par value $ 1.00 per share, at a ratio of 1-for- 7.5 (the “2025 Forward Stock Split”). Shares of common stock were proportionately increased. All of the Company’s historical share and per share information related to issued and outstanding common stock in these consolidated financial statements have been adjusted, on a retroactive basis, to reflect the 2025 Forward Stock Split. Revenue Recognition . A contract exists when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of the consideration is probable. Revenue is recognized when performance obligations under the terms of the contract with a customer are satisfied. Essentially all revenue is generated through contracts with the customers. The Company may recognize revenue over time or at a point in time when or as obligations under the terms of a contract with the customer are satisfied, depending on the terms and features of the contract and the products supplied. Our contracts generally do not have any significant variable consideration. The collectability of consideration on the contract is reasonably assured before revenue is recognized. On certain vehicles, payment may be received in advance of the Company’s satisfying the performance obligations. Such payments are recorded within Contract liabilities on the Consolidated Balance Sheets. The corresponding performance obligations are generally satisfied within one year of the contract inception. In such cases, the Company has elected to apply the practical expedient to not adjust the promised amount of consideration for the effects of a significant financing component. The financing impact on contracts that contain performance obligations that are not expected to be satisfied within one year are expected to be immaterial to the Consolidated Financial Statements. The Company has elected to utilize the practical expedient to recognize the incremental costs of obtaining a contract as an expense when incurred because the amortization period for the prepaid costs that would have otherwise been deferred and amortized is one year or less. The Company use an observable price to allocate the stand-alone selling price to separate performance obligations within a contract or a cost-plus margin approach when an observable price is not available. The estimated costs to fulfil the base warranties are recognized as expense when the products are sold (see “Note 8 – Commitments and Contingent Liabilities ” for further information on warranties). Once the customer accepts the products there is no right of return, therefore the contracts with customers do not contain an accrual for product returns, except for contracts related to certain parts sales. Revenue for parts sales for all segments is recognized at the time that control and risk of ownership has passed to the customer. Historically, return rates on parts sales have been immaterial. Our receivables are generally collected in less than three months, in accordance with the underlying payment terms. Distinct revenue recognition policies for sales channels are as follows: New Business New Business revenues arise from the sale of equipment and attachments, including the initial delivery of spare parts if sold in the same contract as the equipment. 60 Certain equipment is built on a chassis that is owned and controlled by the customer. Due to the customer ownership of the chassis, the performance obligation is satisfied as the vehicles are built. Accordingly, the revenue and corresponding cost of products sold associated with these contracts are recognized over time based on the inputs completed for a given performance obligation during the reporting period. Certain contracts include equipment built on a chassis that the Company purchases and subsequently sells to the customer. The revenue for these contracts is recognized at the time that the performance obligation is satisfied, and control and risk of ownership has passed to the customer, which is generally upon shipment of the vehicle from the manufacturing facility to the customer or receipt of the vehicle by the customer, depending on contract terms. The Company has elected to account for shipping and handling costs after control has been transferred as fulfillment costs which are recognized in cost of products sold. After Sales After Sales revenues arise from the sales of spare parts, providing of repair and maintenance services, and proceeds from fixed maintenance and service contracts. The Company recognizes revenue from the rendering of repair and maintenance services when the services are performed, and control of the service is transferred to the customer. Revenue is measured based on the consideration to which the Company expects to be entitled in exchange for those services. For fixed maintenance and services contracts, the Company recognizes revenue over the term of the contract on a straight-line basis, consistent with the pattern of the service being provided. The Company assesses the contract terms and conditions to determine the appropriate period and pattern for revenue recognition. Any payments received in advance of service performance are recorded as contract liabilities and recognized over the period of service delivery. Revenues from spare parts sales are recognized at the time that the performance obligation is satisfied, and control is transferred to the customer, depending on contract terms. Revenues from repair and maintenance services are recognized over time, based on the inputs completed for a given performance obligation, as repairs and maintenance services enhance an asset that the customer controls. Revenues from fixed maintenance and service contracts are recognized over the contract term, based on the inputs completed for a given performance obligation, as the customer consumes the benefits of the contract as the Company perform. Revenues from transactions with external customers for each of the Company’s products would be impracticable to disclose and management does not view its business by product line. For revenue disaggregated by geographic area refer to “Note 2 - Revenue ” and “Note 17 – Segments. ” Cost of Products Sold. Costs of products sold represent costs directly related to the manufacture and distribution of the Company’s products. Such costs include labor, raw materials, manufacturing costs, packaging, shipping and handling, and depreciation of manufacturing and distribution equipment and amortization of leasehold improvements. Business Combinations. When acquiring other businesses, the Company recognizes identifiable assets acquired and liabilities assumed at their acquisition date estimated fair values and separately from any goodwill that may be required to be recognized. Goodwill, when recognizable, is measured as the excess amount of any consideration transferred, which is measured at fair value, over the acquisition date fair values of the identifiable assets acquired and liabilities assumed. Amounts recorded in a business combination may change during the measurement period, which is a period not to exceed one year from the date of acquisition, as additional information about conditions existing at the acquisition date becomes available. Accounting for such acquisitions requires the Company to make significant assumptions and estimates and such amounts are adjusted during the measurement period. Acquired businesses are accounted for using the acquisition method of accounting, which requires, among other things, that most assets acquired, and liabilities assumed be recognized at their estimated fair values as of the acquisition date. The determination of the estimated fair value of assets acquired and liabilities assumed requires management’s judgment and involves the use of significant estimates and assumptions. Costs incurred to effect an acquisition, such as legal, accounting, valuation or other third-party costs, as well as internal general and administrative costs incurred are charged to expense in the periods incurred. Refer to “Note 15 - Business Combinations ” for additional information regarding the Company’s accounting for recent business combinations. Shipping and Handling of Products . Costs incurred related to the shipment and handling of products are classified in cost of products sold. Amounts billed to customers for shipping and handling of products are included in sales. 61 Cash and Cash Equivalents. Cash and cash equivalents include cash on hand, cash on deposit, treasuries and money market funds. The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Certain operating agreements require the Company to post cash as collateral. Accounts Receivable . Our receivables are subject to credit risk, and the Company does not typically require collateral on its accounts receivable. The Company performs periodic credit evaluations of their customers’ financial condition and generally require a security interest in the products sold. Receivables generally are due within 30 to 90 days. The Company maintains an allowance for customer credit losses that reduces receivables to amounts that are expected to be collected. In estimating the allowance for credit losses consistent with it reflecting related lifetime expected credit losses, management considers relevant information about past events, current conditions and reasonable and supportable forecasts that affect the collectability of financial assets. Inventories . The Company utilizes two inventory methods to account for and value its inventories depending upon the business, resulting in inventories that are recorded at the lower of cost or market or net realizable value, as appropriate. • Aebi Schmidt - Inventories are stated at the lower of weighted average cost or net realizable value. • Shyft - Inventories are stated at the lower of first-in, first-out cost or net realizable value. Net realizable value is the estimated selling price in the ordinary course of business less cost to sell and considers the current assessment of general market and economic conditions, slow-moving inventory, and future demands. The acquisition cost includes the purchase price (material costs) and other directly attributable acquisition costs, such as procurement department expenses, transportation costs, import duties, packaging materials, material overhead cost for sourcing, less any reductions in acquisition costs. Refer to “Note 3 - Inventories ” for additional information regarding the Company’s inventory. Contract Assets . Contract assets arise upon the transfer of goods or services to a customer before the customer pays consideration. The Company presents the contract as either a contract asset or as a receivable, depending on the nature of the entity’s right to consideration for its performance. Contract assets are a right to consideration in exchange for goods or services that the Company has transferred to a customer, when the right is conditioned on something other than the passage of time. Refer to “Note 2 - Revenue ” for additional information regarding the Company’s contract assets. Property, Plant and Equipment . Property, plant and equipment is stated at cost and the related assets are depreciated over their estimated useful lives on a straight-line basis. Estimated useful lives range from 15 - 40 years for buildings, 3 - 8 years for plant and office equipment and 5 - 12 years for technical installation and machinery. Leasehold improvements are depreciated over the shorter of the lease term or the estimated useful life of the asset. Maintenance and repair costs are charged to earnings, while expenditures that increase asset lives are capitalized. The Company reviews its property, plant and equipment, along with all other long-lived assets that have finite lives, including finite-lived intangible assets, for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. See “Note 5 - Property, Plant and Equipment ” for further information on its property and equipment. Goodwill and Other Intangible Assets. Goodwill represents the excess of the cost of a business combination over the fair value of the net assets acquired. Goodwill is not amortized but is subject to impairment tests on an annual basis, or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Goodwill is allocated to the reporting unit from which it was created. A reporting unit is an operating segment or sub-segment to which goodwill is assigned when initially recorded. Other intangible assets with finite lives are amortized over their estimated useful lives and are tested for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. During the fourth quarter of 2025, the Company changed its financial reporting structure following the completion of the Merger with Shyft, to align with the executive structure following the Merger. The acquisition of Shyft impacted only the Company's North America business and did not affect the Europe and Rest of World ("ROW") operations accordingly, the Company's two operating segments: (i) North America and (ii) Europe and ROW remain unchanged. This aligns with the approach of the Chief Operating Decision Make ("CODM"), which was determined to be the Board of Directors, in allocating resources and evaluating performance in relation to the Company's key growth strategies. However, the reporting units with Goodwill (Monroe, MB Group, and Shyft), have been aggregated into one reporting unit North America. These reporting units were determined based on the level at which the performance is measured and reviewed by segment management. The North America reporting unit components have been aggregated into a single reporting unit because they have similar economic characteristics, including similarities in financial performance, nature of products or services, nature of production processes and types of customers. If the composition of the Company's reporting changes, goodwill is reassigned using the relative fair value allocation approach. As such, prior period reporting units and related disclosures 62 have been conformed to reflect the Company's current reporting units. Refer to “ Note 4 - Goodwill and Other Intangible Assets ” for additional information regarding this change. The Company performs the annual goodwill and indefinite lived intangible assets impairment test as of year-end and monitor for interim triggering events on an ongoing basis. For goodwill, the Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Under authoritative guidance, the Company is not required to calculate the fair value of a reporting unit unless the Company determines that it is more likely than not that the fair value of the reporting unit is less than its carrying amount. The Company has the option to bypass the qualitative assessment and proceed to a quantitative impairment test. If the Company elects to bypass the qualitative assessment for a reporting unit, or if after completing the assessment the Company determines that it is more likely than not that the fair value of a reporting unit is less than its carrying value, the Company performs a quantitative impairment test, whereby the Company compares the fair value of a reporting unit with its carrying amount, including goodwill. The fair value of the reporting unit is determined by estimating the future cash flows of the reporting unit to which the goodwill relates and then discounting the future cash flows at a market-participant-derived weighted-average cost of capital (“WACC”). In determining the estimated future cash flows, the Company considers current and projected future levels of income based on their plans for that business; business trends, prospects and market and economic conditions; and market-participant considerations. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered to not be impaired. If the carrying amount of the reporting unit exceeds its estimated fair value, an impairment loss is recognized in an amount equal to the excess, up to the carrying value of the goodwill. Significant judgments inherent in these assessments and analyses include assumptions relating to revenue growth rates, EBITDA margins and WACC. The judgments and assumptions used in the estimate of fair value are generally consistent with the projections and assumptions that are used in current operating plans. Such assumptions are subject to change because of changing economic and competitive conditions. The determination of fair value is highly sensitive to differences between estimated and actual cash flows and changes in the related discount rate used to evaluate the fair value of the reporting units. See “Note 4 - Goodwill and Other Intangible Assets ” for further details on goodwill and other intangible assets. Warranties . Our policy is to record an accrual for the estimated cost of warranty-related claims at the time of the sale and periodically adjust the warranty liability to reflect actual experience. The amount of warranty liability accrued reflects management’s best estimate of the expected future cost of honoring their obligations under the warranty agreements. Expense related to warranty liabilities accrued for product sales, as well as adjustments to pre-existing warranty liabilities, are reflected within Cost of products sold on the Consolidated Statements of Operations. The estimates are based on historical experience, the number of units involved, and the extent of features and components included in product models. See “Note 8 - Commitments and Contingent Liabilities ” for further information regarding warranties. Contract Liabilities . The Company sometimes receives advance payments from customers for product orders and records these amounts as liabilities. The Company accepts such deposits when presented by customers seeking improved pricing in connection with orders that are placed for products to be manufactured and sold at a future date. Sales associated with these deposits are recognized over time based on the inputs completed for a given performance obligation during the reporting period or deferred and recognized upon shipment of the related product to the customer depending on the terms of the contract. Refer to “Note 2 - Revenue ” for additional information regarding the Company’s contract liabilities. Research and Development . Our research and development costs, which consist of compensation costs, materials, external support services and overheads related to new product and technology development, are expensed as incurred. Taxes on Income . The Company recognizes deferred income tax assets and liabilities using enacted tax rates for the effect of temporary differences between the book and tax bases of recorded assets and liabilities. Deferred tax liabilities or assets are recognized for the estimated future tax effects attributable to temporary differences and carry forwards that result from events that have been recognized in either the financial statements or the tax returns, but not both. The Company’s domestic tax rates are between 13.9 % and 22.4 % and the applicable foreign tax rates are between 19 % and 30 %. The Company establishes valuation allowances for deferred income tax assets in accordance with U.S. GAAP, which provides that such valuation allowances shall be established unless realization of the income tax benefits is more likely than not. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. At each reporting period, the Company considers the scheduled reversal of deferred tax liabilities, available taxes in carry back periods, tax planning strategies and projected future taxable income in making this assessment. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities. The determination is based on the technical merits of 63 the position and presumes that each uncertain tax position will be examined by the relevant taxing authority that has full knowledge of all relevant information. Although the Company believes the estimates are reasonable, no assurance can be given that the final outcome of these matters will not be different than what is reflected in the historical income tax accruals. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company also records interest and penalties related to unrecognized tax benefits within income tax expense. Interest and penalties attributable to income taxes are recorded as a component of income taxes. See “Note 7 - Income Taxes ” for further details on income taxes. Earnings Per Share . Basic earnings per share is based on the weighted average number of common shares outstanding during the period. Basic earnings per share represents net earnings divided by basic weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated by dividing net earnings by the weighted average number of common shares used in the basic earnings per share calculation plus the number of common shares that would be issued assuming exercise or conversion of all potentially dilutive instruments. Equity instruments are excluded from the calculation of diluted earnings per share if the effect of including such instruments is antidilutive. Stock-Based Compensation . Stock based compensation cost for equity-based awards is measured at fair value on the grant date, and is recognized over the requisite service period, net of estimated forfeitures. For cost for service-based awards with graded vesting, the company has elected a policy to recognize the expense straight line. The grant date fair value of restricted stock awards and restricted stock units is based upon the quoted market price of the common stock on the date of grant. Our stock-based compensation plans are described in more detail in “ Note 13 – Stock Based Compensation ”. Fair Value . A three-level valuation hierarchy, based upon observable and unobservable inputs, is used for fair value measurements. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions based on the best evidence available. These two types of inputs create the following fair value hierarchy: Level 1 – Quoted prices for identical instruments in active markets. Level 2 – Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations whose significant inputs are observable. Level 3 – Instruments whose significant inputs are unobservable. The Company is required to disclose the estimated fair value of its financial instruments. The carrying value at December 31, 2025 and 2024 of cash and cash equivalents, accounts receivable and accounts payable approximate their fair value due to their short-term nature. The carrying value of variable rate debt instruments approximate their fair value based on their relative terms and market rates. Segment Reporting . The Company identifies its reportable segments based on the management structure and the financial data utilized by the chief operating decision maker, which was determined to be the Board of Directors, to assess segment performance and allocate resources among their operating segments. The Company has two reportable segments: (i) North America and (ii) Europe and ROW. More detailed information about the reportable segments can be found in “ Note 17 - Segments ”. Foreign Currency Translation. The functional currency of the Company’s foreign operations is generally the applicable local currency. The functional currency is translated into U.S. dollars using the respective current exchange rate in effect as of the balance sheet date for assets and liabilities and the respective weighted-average exchange rate during the fiscal year for revenue and expense accounts. Equity is translated at historical rates. The resulting translation adjustments are deferred as a component of other comprehensive income within the Consolidated Statements of Comprehensive Income and the Consolidated Statements of Equity. Gains or losses resulting from transactions denominated in foreign currencies are included in Other income (expense), net in the Consolidated Statements of Operations. Leases. The Company enters contracts that are, or contain, lease agreements that convey the Company’s right to direct the use of, and obtain substantially all of the economic benefits from, an identified asset for a defined period of time in exchange for consideration. The lease term begins and is determined upon lease commencement, which is the point in time when the Company takes possession of the identified asset and includes all non-cancellable periods. Renewal and extension options are considered in the lease term to the extent that is reasonably certain that those will be exercised. Lease payments are determined at lease commencement and represent fixed lease payments as defined within the respective lease agreement or, in the case of certain lease agreements, variable lease payments that are measured as of the lease commencement date based on the prevailing index or market rate. Future adjustments to variable lease payments are 64 defined and scheduled within the respective lease agreement and are determined based upon the prevailing market or index rate at the time of the adjustment relative to the market or index rate determined at lease commencement. Certain other lease agreements contain variable lease payments that are determined based upon actual utilization of the identified asset. Such future adjustments to variable lease payments and variable lease payments based upon actual utilization of the identified asset are not included within the determination of lease payments at commencement but rather, are recorded as variable lease expense in the period in which the variable lease cost is incurred. For purposes of determining lease payments, the Company combines lease components and non-lease components. Minimum remaining lease payments are discounted to present value based on the estimated incremental borrowing rate at lease commencement. Right of use assets represent the Company’s right to use an underlying asset throughout the lease term and are measured as the amount of the corresponding lease liability for the respective operating lease agreement, adjusted for prepaid or accrued lease payments, the remaining balance of any lease incentives received, unamortized initial direct costs, and impairment of the operating lease right of use asset, as applicable. Lease expense for the Company’s operating leases is recognized on a straight-line basis over the lease term and is recorded within either cost of products sold or selling, general and administrative expense in the Consolidated Statements of Operations depending on the nature and use of the identified asset underlying the respective operating lease arrangement. For short-term operating leases which have a lease term of 12 months or less and do not include an option to purchase the underlying asset, the Company does not recognize right of use assets and lease liabilities but does recognize lease expense on a straight-line basis. Finance Leases: Finance leases are initially recorded at the net present value of future minimum lease payments, which includes certain lease and non-lease components. A lease is classified as a finance lease if any one of the following criteria are met: the lease transfers ownership of the asset by the end of the lease term, the lease contains an option to purchase the asset that is reasonably certain to be exercised, the lease term is for a major part of the remaining useful life of the asset or the present value of the lease payments equals or exceeds substantially all of the fair value of the asset. Finance Lease Assets are presented separately on the Consolidated Balance Sheets. The Company depreciates Finance Lease Assets consistent with its useful life policy within Property, plant and equipment. Sale and Leaseback transactions: The Company accounts for sale and leaseback transactions by evaluating whether control of the asset has been transferred to the buyer-lessor, thus qualifying as a sale. Upon a sale being recognized, the seller-lessee derecognizes the asset, records any gain or loss on the sale, and recognizes a lease liability and right of use asset for the leaseback arrangement, with subsequent expense recognition depending on whether the leaseback is classified as an operating or finance lease. If the sale criteria are not met, the transaction is accounted for as a financing arrangement. Refer to “Note 6 - Leases ” for additional information regarding the Company’s leases. Defined Benefit Pension Plan. Attribution, Methods and Assumptions: The cost of benefits provided by defined benefit pension plans is recorded in the period employees provide service. The cost of pension plan amendments that provide for benefits already earned by plan participants is amortized over the expected period of benefit which may be the duration of the applicable collective bargaining agreement specific to the plan, the expected future working lifetime or the life expectancy of the plan participants. Expected return on plan assets represents the portion of net benefit cost attributable to the expected increase in the value of plan assets over the course of the year. The discount rate assumption is established for each of the defined benefit plans at their respective measurement dates. It results from a sample set of cash-flows and a yield curve fitted from a bond basket in the currency of the defined benefit plan. The cash-flows are modelled to match the duration of plan liabilities. Plan Asset Valuation : Plan assets are measured at fair value on the measurement date. Refer to “Note 10 - Defined Benefit Pension Plans ” for additional information regarding the Company’s defined benefit pension plans. New Accounting Standards. Recently Adopted Accounting Pronouncements: In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures . The Company adopted ASU 2023-09 as of January 1, 2025 on a prospective basis. Adoption did not impact the Company's consolidated results of operations, financial position, or cash flows, but resulted in expanded disclosures, including disaggregation of the effective tax rate reconciliation and additional information regarding income taxes paid (e.g., by jurisdiction). The enhanced annual disclosures are included in these Consolidated Financial Statements; related interim disclosures will begin in 2026. 65 Recently Issued Accounting Pronouncements Not Yet Adopted: In November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses (Subtopic 220-40) (“ASU 2024-03”). The ASU requires the disaggregated disclosure of specific expense categories, including purchases of inventory, employee compensation, depreciation, and amortization, within relevant income statement captions. This ASU also requires disclosure of the total amount of selling expenses along with the definition of selling expenses. The ASU is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Adoption of this ASU can either be applied prospectively to Consolidated Financial Statements issued for reporting periods after the effective date of this ASU or retrospectively to any or all prior periods presented in the Consolidated Financial Statements. Early adoption is also permitted. This ASU will result in the required additional disclosures being included in the Consolidated Financial Statements, once adopted. The Company is currently evaluating the impact of the adoption of ASU 2024-03 on the Consolidated Financial Statements. In January 2025, the FASB issued ASU 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date ("ASU 2025-01"). ASU 2024-03 requires additional disclosure of the nature of expenses included in the income statement as well as disclosures about specific types of expenses included in the expense captions presented in the income statement. ASU 2024-03, as clarified by ASU 2025-01, is effective for the fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of these statements on the Consolidated Financial Statements. In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurements of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”). The amendments in this update provide a practical expedient related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under ASC 606. Under ASU 2025-05, an entity is required to disclose whether it has elected to use the practical expedient. An entity that makes the accounting policy election is required to disclose the date through which subsequent cash collections are evaluated. ASU 2025-05 is effective for the Company beginning in the fiscal year ending December 31, 2026. The Company is currently evaluating the impacts of the adoption of ASU 2025-05 on the Consolidated Financial Statements. In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40), Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”). ASU 2025-06 clarified and modernizes the accounting for costs related to internal-use software. The amendments in ASU 2025-06 remove all references to project stages throughout Subtopic 350-40 and clarify the threshold entities apply to begin capitalizing costs. Entities must evaluate whether there is “significant development uncertainty,” such as unresolved novel functionality or substantially revised performance requirements, before meeting this capitalization threshold. ASU 2025-06 is effective for the Company for fiscal years beginning after December 15, 2027 and interim periods within those fiscal years. The Company is currently evaluating the impact of adoption of ASU 2025-06 on the consolidated Financial Statements. 66 NOTE 2 – REVENUE Contract Assets and Liabilities The tables below disclose changes in contract assets and liabilities for the years ended December 31, 2025 and 2024. Contract Assets December 31, 2025 December 31, 2024 Contract assets, beginning of period $ 24,145 $ 9,654 Reclassification of contract assets to receivables, as the result of rights to consideration becoming unconditional (1) ( 60,527 ) ( 8,263 ) Contract assets recognized, net of reclassification to receivables (1) 118,724 22,754 Contract assets, end of period $ 82,342 $ 24,145 Contract Liabilities Contract liabilities, beginning of period $ 20,044 $ 12,979 Reclassification of contract liabilities to revenue, as the result of performance obligations satisfied (2) ( 14,619 ) ( 4,689 ) Cash received in advance and not recognized in revenue (2) 14,431 11,754 Contract liabilities, end of period $ 19,856 $ 20,044 (1) Includes contract assets acquired in the Merger with Shyft in 2025. Refer to “ Note 15 - Business Combination .” (2) Includes contract liabilities acquired in the Merger with Shyft in 2025. Refer to “ Note 15 - Business Combination .” The aggregate amount of the transaction price allocated to remaining performance obligations in existing contracts that are yet to be completed in the North America and Europe and ROW segments are $ 1,031,200 and $ 180,600 respectively, with substantially all revenue expected to be recognized within one year as of December 31, 2025. For performance obligations that are satisfied over time, revenue is expected to be recognized over the period to complete the contract. For performance obligations that are satisfied at a point in time, revenue is expected to be recognized when the customer obtains control of the product, which is generally upon shipment from our facility. No amounts have been excluded from the transaction prices above related to the guidance on constraining estimates of variable consideration. 67 In the following tables, revenue is disaggregated by primary geographical market and timing of revenue recognition. The tables also include a reconciliation of the disaggregated revenue with the reportable segments. Year Ended December 31, 2025 New Business After Sales Total Primary geographical markets North America $ 876,108 $ 98,994 $ 975,102 Europe and ROW 428,874 122,649 551,523 Total Sales $ 1,304,982 $ 221,643 $ 1,526,625 Timing of revenue recognition Products transferred at a point in time $ 703,797 $ 194,044 $ 897,841 Products and services transferred over time 601,185 27,599 628,784 Total Sales $ 1,304,982 $ 221,643 $ 1,526,625 Year Ended December 31, 2024 New Business After Sales Total Primary geographical markets North America $ 538,576 $ 54,865 $ 593,441 Europe and ROW 380,157 112,360 492,517 Total Sales $ 918,733 $ 167,225 $ 1,085,958 Timing of revenue recognition Products transferred at a point in time $ 674,207 $ 142,629 $ 816,836 Products and services transferred over time 244,526 24,596 269,122 Total Sales $ 918,733 $ 167,225 $ 1,085,958 Year Ended December 31, 2023 New Business After Sales Total Primary geographical markets North America $ 493,931 $ 47,938 $ 541,869 Europe and ROW 365,173 108,530 473,703 Total Sales $ 859,104 $ 156,468 $ 1,015,572 Timing of revenue recognition Products transferred at a point in time $ 667,431 $ 132,988 $ 800,419 Products and services transferred over time 191,673 23,480 215,153 Total Sales $ 859,104 $ 156,468 $ 1,015,572 NOTE 3 – INVENTORIES Inventories are summarized as follows: As of December 31, 2025 2024 Finished goods $ 113,716 $ 105,481 Work in process 49,713 34,334 Raw materials and purchased components 182,994 91,584 Total Inventories $ 346,423 $ 231,399 68 NOTE 4 – GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill The Company tests goodwill for impairment at the reporting unit level on an annual basis as of year-end, or whenever an event or change in circumstances occurs that would more likely than not reduce the fair value of a reporting unit below its carrying amount. See “Goodwill and Other Intangible Assets” within “ Note 1 - Nature of Operations and Basis of Presentation ” for a description of the accounting policies regarding goodwill and other intangible assets and “ Note 15 - Business Combination ” for additional information regarding the assets acquired and liabilities assumed from the Shyft Transaction. During the fourth quarter of 2025, the Company changed its reporting units. Under accounting standards, the Company is required to perform an impairment assessment of its prior reporting units immediately prior to the change and immediately after the change on its new reporting units. To the extent that a prior reporting unit was separated into more than one reporting unit, the allocation of goodwill between the components of the old reporting units was determined based on their relative fair value. As of December 31, 2025, the most recent annual goodwill impairment assessment date, the Company performed a quantitative assessment of the fair value of its prior and new reporting units and concluded there was no impairment. As discussed in “ Note 1 - Nature of Operations and Basis of Presentation, ” there are significant judgments inherent in the impairment assessments and discounted cash flow analyses. These discounted cash flow analyses for the North America reporting unit included significant judgment and assumptions relating to revenue growth rates, EBITDA margins, and the WACC. No goodwill impairment was recorded in connection with the Company's annual impairment assessment as of December 31, 2025. The changes in the carrying amount of goodwill by reportable segment for years ended December 31, 2025 and 2024, were as follows (in thousands): North America Europe and ROW Total Balance at December 31, 2023 $ 221,189 $ — $ 221,189 Acquisition and measurement period adjustment — — — Balance at December 31, 2024 $ 221,189 $ — $ 221,189 Acquisition and measurement period adjustment 181,958 — 181,958 Balance at December 31, 2025 $ 403,147 $ — $ 403,147 Other Intangible Assets As of December 31, 2025 and 2024, the Company had other intangible assets for the following: Concessions, rights and licenses, Customer relationships, Brands, Technology and Order backlog. These other intangible assets are amortized utilizing a straight-line approach over the estimated useful lives. The following table provides information regarding other intangible assets: December 31, 2025 December 31, 2024 Gross carrying amount Accumulated amortization Net Gross carrying amount Accumulated amortization Net Concessions, rights, and licenses $ 895 $ ( 390 ) $ 505 $ 602 $ ( 305 ) $ 297 Customer relationships 249,129 ( 53,568 ) 195,561 158,637 ( 39,901 ) 118,736 Brands 126,505 ( 17,292 ) 109,213 65,612 ( 11,799 ) 53,813 Technology 30,945 ( 3,973 ) 26,972 4,549 ( 2,071 ) 2,478 Order backlog 4,949 ( 2,474 ) 2,475 — — — Total intangible assets $ 412,423 $ ( 77,697 ) $ 334,726 $ 229,400 $ ( 54,076 ) $ 175,324 The Company recorded intangible asset amortization expense of $ 23,621 , $ 14,325 , and $ 14,285 during the years ended December 31, 2025, 2024 and 2023, respectively.. 69 The estimated remaining amortization associated with finite-lived intangible assets is expected to be expensed as follows: Amount 2026 $ 30,081 2027 27,607 2028 27,436 2029 27,236 2030 25,440 Thereafter 196,926 Total intangible assets $ 334,726 NOTE 5 – PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment are summarized by major classifications as follows: As of December 31, 2025 2024 Land and Building $ 135,760 $ 69,119 Technical installation and machinery 91,843 53,851 Plant and office equipment 55,871 44,395 Assets under construction 8,474 2,346 Subtotal 291,948 169,711 Less: accumulated depreciation ( 124,049 ) ( 101,064 ) Total Property, plant and equipment, net $ 167,899 $ 68,647 The Company recorded depreciation expense of $ 19,903 , $ 12,089 , and $ 12,879 during the years ended December 31, 2025, 2024 and 2023, respectively. NOTE 6 – LEASES The Company has both operating and finance leases for land, buildings, machinery, vehicles and certain equipment. Our leases have remaining lease terms of 1 to 25 years, some of which include options to extend the lease agreements for up to 12 years. Our leases do not contain residual value guarantees. As of December 31, 2025, and 2024, assets recorded under finance leases were immaterial. Lease expense totaled $ 22,790 , $ 13,180 and $ 11,343 for the years ended December 31, 2025, 2024 and 2023, respectively. Operating lease expenses are classified as cost of products sold and selling, general and administrative on the Consolidated Statements of Operations. The components of lease expense were as follows: Years Ended December 31, 2025 2024 2023 Operating leases $ 22,805 $ 12,777 $ 11,290 Finance leases Amortization of right of use assets 676 436 441 Interest on lease liabilities 61 33 32 Short-term leases 622 213 61 Variable lease expense 467 579 314 Sublease income ( 1,841 ) ( 858 ) ( 795 ) Total lease expense $ 22,790 $ 13,180 $ 11,343 70 The weighted average remaining lease term and weighted average discount rate were as follows: Years Ended December 31, 2025 2024 Weighted average remaining lease term (in years) Finance leases 3 3 Operating leases 11 12 Weighted average discount rate Finance leases 3.62 % 1.47 % Operating leases 5.86 % 5.49 % Supplemental cash flow information related to leases was as follows: Years Ended December 31, 2025 2024 2023 Cash paid for amounts included in the measurement of lease liabilities: Finance leases - Financing cash flows $ 1,331 $ 918 $ 1,047 Finance leases - Operating cash flows 61 33 32 Operating leases - Operating cash flows 22,090 12,178 11,060 Right of use assets obtained in exchange for lease obligations: Operating leases 112,507 5,887 27,338 Finance leases 1,380 212 179 $ 113,887 $ 6,099 $ 27,517 Maturities of lease liabilities as of December 31, 2025, are as follows: Years ending December 31: Finance Operating 2026 $ 1,275 $ 27,496 2027 467 24,390 2028 343 21,573 2029 257 19,650 2030 119 17,757 Thereafter 41 121,569 Total lease payments 2,502 232,435 Less: imputed interest ( 148 ) ( 69,178 ) Total lease liabilities $ 2,354 $ 163,257 NOTE 7 – INCOME TAXES Income from continuing operations before income taxes for Swiss and foreign operations are as follows: Year Ended December 31, 2025 2024 2023 Swiss income $ ( 7,871 ) $ 9,977 $ 11,639 Foreign income 19,063 31,687 5,707 $ 11,192 $ 41,664 $ 17,346 71 Income taxes (expense) benefit from continuing operations consist of the following: Year Ended December 31, 2025 2024 2023 Current tax: Swiss - Federal $ 193 $ 117 $ 239 Swiss - Cantonal 273 292 318 Foreign 650 15,381 6,875 Total current $ 1,116 $ 15,790 $ 7,432 Deferred tax (benefit): Swiss - Federal $ ( 709 ) $ ( 74 ) $ 658 Swiss - Cantonal 625 654 999 Foreign 454 ( 5,443 ) ( 2,942 ) Total deferred 370 ( 4,863 ) ( 1,285 ) Total taxes on income $ 1,486 $ 10,927 $ 6,147 A reconciliation of income tax expense computed at the statutory Swiss federal corporate income tax rate of 7.83% to the effective income tax rate after the adoption of ASU 2023-09 for the year ended December 31, 2025 is as follows (amounts in thousands): 72 Year Ended December 31, 2025 % Profit before tax $ 11,192 Swiss federal statutory income tax rate 876 7.8 % Increase (decrease) in income taxes resulting from: Cantonal and communal income taxes, net of federal income tax effect 871 7.8 % Foreign tax effects: United States US state taxes 1,553 13.9 % Non-deductible executive compensation charges 786 7.0 % Non-deductible transaction costs 617 5.5 % R&D tax credits ( 620 ) ( 5.5 ) % Changes in unrecognized tax benefits ( 1,322 ) ( 11.8 ) % Return-to-provision 573 5.1 % Other ( 291 ) ( 2.6 ) % Germany Statutory tax rate difference between Germany and Switzerland 555 5.0 % German trade tax ( 1,871 ) ( 16.7 ) % Changes in unrecognized tax benefits ( 3,188 ) ( 28.5 ) % Other 109 1.0 % Netherlands Statutory tax rate difference between the Netherlands and Switzerland 766 6.8 % Other ( 115 ) ( 1.0 ) % United Kingdom Statutory tax rate difference between the UK and Switzerland 481 4.3 % Other ( 2 ) — % Italy Statutory tax rate difference between Italy and Switzerland 326 2.9 % Other 237 2.1 % Other jurisdictions * 703 6.3 % Changes in valuation allowances (Switzerland) 1,012 9.0 % Change of applicable tax rate ( 354 ) ( 3.2 ) % Tax impacts relating to different functional statutory currency ( 797 ) ( 7.1 ) % Other 581 5.2 % Total tax expense / (benefit) $ 1,486 13.3 % * This line item predominantly includes tax rate differences between the statutory Swiss federal corporate income tax rate of 7.83% and the national income tax rate of the corresponding jurisdiction. On an individual jurisdictional basis, the differences are immaterial. The Company is subject to cantonal and communal taxes in Berne, Thurgovia and Zurich. The majority of cantonal and communal income taxes are due in the canton of Zurich. A reconciliation of income tax expense computed at the statutory corporate income tax rate of 13.9% to the effective income tax rate prior to the adoption of ASU 2023-09 for the years ended December 31, 2024 and 2023 is as follows: 73 Year Ended December 31, 2024 2023 Income tax expense computed at the Swiss statutory rate of 13.9 % $ 5,791 $ 2,411 Increase (decrease) in income taxes resulting from: Tax rate differences 3,778 2,255 Change in valuation allowance 1,789 959 Non-deductible expenses 155 1,509 U.S. state taxes 553 ( 506 ) Foreign exchange impacts 1,044 561 Tax credits ( 60 ) ( 60 ) Tax deductible impairment of subsidiaries ( 2,363 ) — Other impacts 240 ( 982 ) Total $ 10,927 $ 6,147 74 Temporary differences which give rise to deferred income tax assets (liabilities) are as follows: As of December 31, 2025 2024 Deferred income tax assets: Current assets $ 11,850 $ 1,746 Net pension liabilities — 1,438 Short-term liabilities and accruals 14,452 7,227 Long-term liabilities 6,533 4,428 Property, plant and equipment 1,935 127 Lease liabilities 39,892 15,721 Intangible assets 10,307 12,766 Inventories 18,324 3,793 Capitalized R&D costs 15,701 — Carry-forwards 8,064 — Tax losses 18,352 6,970 Other items 4,094 9,831 Total deferred income tax assets $ 149,504 $ 64,047 Less: Valuation allowance ( 14,274 ) ( 8,916 ) Total deferred income tax assets 135,230 55,131 Netting of DTA and DTLs ( 129,320 ) ( 49,438 ) Total deferred income tax assets after valuation allowance $ 5,910 $ 5,693 Deferred income tax liabilities: Property, plant and equipment $ 16,236 $ 5,186 Right of use assets 41,786 15,721 Short-term liabilities 14,007 1,344 Other liabilities 287 1,859 Current assets 6,782 — Net pension assets 7,257 6,245 Intangible assets 67,280 37,418 Total deferred income tax liabilities $ 153,635 $ 67,773 Netting of DTAs and DTLs ( 129,320 ) ( 49,438 ) Total deferred income tax liabilities 24,315 18,335 Net deferred tax liability $ 18,405 $ 12,642 The following table presents the changes in the valuation allowance for deferred tax assets for the periods indicated: As of December 31, 2025 2024 2023 Changes in the valuation allowance of deferred tax assets: Balance at beginning of period $ ( 8,916 ) $ ( 8,135 ) $ ( 7,596 ) Charged to income tax provision $ ( 3,758 ) ( 1,789 ) ( 959 ) Charged to other accounts ( 1,600 ) 1,008 420 Balance at end of period $ ( 14,274 ) $ ( 8,916 ) $ ( 8,135 ) As of December 31, 2025 and 2024, the Company had Swiss tax loss carry-forwards of $ 39,720 and $ 11,787 , respectively, which expire between years 2026 to 2032. As of December 31, 2025 and 2024, the Company had foreign tax loss carry forwards of $ 36,649 and $ 18,633 , respectively, which expire starting in year 2029. 75 No income taxes have been provided on indefinitely reinvested earnings of foreign subsidiaries at December 31, 2025. Only dividend payments from the United States and Canada to the Swiss parent company would lead to material income tax consequences. As of December 31, 2025, undistributed earnings in Canada and the United States are planned to be reinvested indefinitely. Quantification of the deferred tax liability, if any, associated with indefinitely reinvested earnings is not practicable. The Organization for Economic Co-operation and Development (the “OECD”) Pillar Two global corporate minimum tax rate of 15% has been in effect since 2024 and applies for companies with revenues of at least €750 million. The Company is subject to the Pillar Two regulations. The Company has continued to evaluate the effect of this through the year-end 2025 and determined that it did not have any material impacts for 2025. The Company will continue to assess the impact of the Pillar Two minimum tax regulations, including the impact from additional clarifications that are published by OECD and local tax authorities. A reconciliation of the change in the unrecognized tax benefits (“UTB”) for the years ended December 31, 2025 and 2024 is as follows: Year Ended December 31, 2025 2024 Balance at beginning of year $ 6,101 $ 6,490 Increase due to tax positions taken during the current year 1,089 — Increase due to tax positions taken during a prior year 88 — Decrease due to settlements with the tax authorities ( 6,900 ) — Reduction as a result of a lapse of the applicable statute of limitations ( 1,955 ) — Increase due to change of scope of consolidation 5,364 — Foreign exchange implications 858 ( 389 ) Balance at end of year $ 4,645 $ 6,101 As of December 31, 2025, the Company had an ending UTB balance of $ 4,645 along with $ 1,131 of interest and penalties, for a total liability of $ 5,776 which $ 5,062 is recorded as a non-current liability and $ 714 as a reduction of deferred tax assets. The change in interest and penalties amounted to a decrease of $ 667 in 2025 and an increase of $ 113 in 2024 and an increase of $ 103 in 2023, which were reflected in interest expense within the Consolidated Statements of Operations. A summary of income taxes paid by jurisdiction, net of refunds, after the adoption of ASU 2023-09 for the year ended December 31, 2025 is as follows (in thousands): Year Ended December 31, 2025 Swiss federal taxes $ 726 Cantonal taxes 565 Foreign United States - Federal and State 9,281 Germany - Federal and Trade tax 4,039 Netherlands 1,331 Other 775 Total Foreign 15,426 Total income tax payments $ 16,717 The cantonal taxes were predominantly paid in the canton of Zurich. On July 4, 2025, the United States enacted the One Big Beautiful Bill Act of 2025 (the “OBBBA”) into law. The OBBBA includes provisions allowing accelerated tax deductions for qualified property and research expenditures and limitations on business interest deductions. The OBBBA has multiple effective dates, with certain provisions effective in 2025 and others being implemented through 2027. The enactment of the OBBBA did not have a material impact on the Company’s effective tax rate for the year ended December 31, 2025. Administrative guidance interpreting the OBBBA will be released, which the Company will continue to monitor. 76 NOTE 8 – COMMITMENTS AND CONTINGENT LIABILITIES Warranty Related We provide limited warranties against assembly or construction defects. These warranties generally provide for the replacement or repair of defective parts or workmanship for a specified period following the date of sale. The end users also may receive limited warranties from suppliers of components that are incorporated into our chassis and vehicles. Certain warranty and other related claims involve matters of dispute that ultimately are resolved by negotiation, arbitration or litigation. Infrequently, a material warranty issue can arise which is beyond the scope of our historical experience. We provide for any such warranty issues as they become known and are estimable. It is reasonably possible that additional warranty and other related claims could arise from disputes or other matters beyond the scope of our historical experience. An estimate of possible penalty or loss, if any, cannot be made at this time. Changes in the warranty liability during the years ended December 31, 2025 and 2024 were as follows: 2025 2024 Balance of warranty liability, beginning of period $ 10,205 $ 8,022 Accruals for current period sales 7,191 5,875 Cash settlements ( 4,643 ) ( 3,226 ) Changes in liability for pre-existing warranties ( 244 ) ( 293 ) Acquisition 6,782 278 Translation adjustment 1,012 ( 451 ) Balance of warranty liability, end of period $ 20,303 $ 10,205 Long-term warranty provision amounting to $ 2,634 and $ 1,628 as of December 31, 2025 and 2024 respectively is included within the Other non-current liabilities in the Consolidated Balance Sheets. Chassis Pool Agreements The Company has relationships with chassis manufacturers to obtain vehicle chassis for its walk-in vans, service bodies and specialty vehicles under chassis or bailment pool agreements. Chassis are obtained directly from the manufacturers based on orders from customers, and in some cases, for unallocated orders. The Company receives an allocation of chassis and pays interest expense on the allocated value of chassis based on the duration of the time they are on the Company’s premises. Bailment, which is the non-ownership transfer of chassis from the manufacturer to the Company, ends when the chassis is sold to an authorized dealer, or upon authorized return of the chassis to the manufacturer. The manufacturer transfers the chassis to the Company on a “restricted basis”, with the condition that the Company will store such chassis and will not move, sell, or otherwise dispose of such chassis except under the terms of the agreement. In addition, the manufacturer typically retains the sole authority to authorize commencement of work on the chassis and to make certain other decisions with respect to the chassis including the terms and pricing of sales of the chassis to the manufacturer’s dealers. The manufacturer also does not transfer the certificate of origin to the Company nor permit the Company to sell or transfer the chassis to anyone other than the manufacturer (for ultimate resale to a dealer). As the Company does not control the chassis and does not pay a cash deposit to obtain the chassis, it does not recognize an asset, or a liability related to these chassis. Interest payments made to manufacturer-affiliated finance companies are classified as operating activities in the Consolidated Statements of Cash Flows. Although the Company is party to related finance agreements with manufacturers, the Company has not historically settled related obligations in cash, except as required under the credit agreement. Instead, the obligation is settled by the manufacturer upon reassignment of the chassis to an accepted dealer, and the dealer is invoiced for the chassis by the manufacturer. Accordingly, the Company accounts for the chassis as consigned inventory belonging to the manufacturer. As of December 31, 2025 and 2024, chassis consigned inventory was approximately $ 119,091 and $ 36,573 , respectively. The Company incurred $ 2,436 , $ 1,847 and $ 2,209 of interest expense related to the chassis on hand during the years ended December 31, 2025, 2024 and 2023 respectively. 77 NOTE 9 – DEFINED CONTRIBUTION PLANS The Company sponsors defined contribution retirement plans that cover all employees who meet length of service and minimum age requirements or are entitled based on the applicable legal regulations. Our matching contributions were $ 12,476 , $ 8,381 and $ 7,701 for the years ended December 31, 2025, 2024 and 2023, respectively. These amounts are expensed as incurred. NOTE 10 – DEFINED BENEFIT PENSION PLANS The Company has various defined benefit pension plans covering personnel being based largely in Switzerland. These plans provide benefits in the event of retirement, death, disability or termination of employment. Retirement benefits under the plans depend on age, contributions and salary. For its employees in Switzerland the Company sponsors defined benefit plans (the “Swiss Plans”) for retirement, death and long-term disability benefits, whereby the employee and the Company contribute a portion of the employee’s compensation to the plan. The Swiss Plans are set up in two independent pension foundations - “BVG Kasse der Firma Aebi & Co. AG” and “Vorsorgefonds für die Mitarbeiter der Firma Aebi & Co. AG” - and in one collective pension foundation - “Sammelstiftung Zusatzvorsorge Swiss Life’’. The Company-owned pension foundations are autonomous pension foundations. The underlying investment, longevity, disability and death risks are born by the pension foundations themselves. The collective pension foundation (Sammelstiftung Zusatzvorsorge Swiss Life) is fully reinsured. All risks of this foundation are reinsured with a life insurer. The Company’s liability in respect of the Swiss Plans is the projected benefit obligation (“PBO”) calculated using the projected unit credit method. The PBO as of December 31, 2025, represents the actuarial present value of the estimated future payments required to settle the obligation that is attributable to employee service rendered before that date. The assets of the Swiss Plans are recorded at fair value. Pension expenses are presented in payroll expenses in the various functions in which the employees are engaged. Actuarial gains and losses arising from differences between the actual and the expected return on the Swiss Plans’ assets are recognized in accumulated other comprehensive income and amortized over the average remaining service period. 78 The Company’s defined benefit plans outside Switzerland are located in the United Kingdom, Germany, Italy and Austria. A reconciliation of the benefit obligations, plan assets, accrued benefit cost and the amounts recognized in the Consolidated Financial Statements for pension plans is as follows: Year Ended December 31, 2025 2024 Change in Benefit Obligation: Benefit Obligation at beginning of year $ 122,663 $ 129,849 Net service cost 2,625 2,561 Employee contributions 1,815 1,747 Interest cost 1,550 1,932 Benefits paid ( 12,756 ) ( 12,315 ) Employer direct benefit payments ( 10 ) ( 9 ) Past service cost — 1 Actuarial loss projected benefit obligation 3,905 7,053 Currency translation adjustment 16,856 ( 8,156 ) Benefit Obligation at end of year $ 136,648 $ 122,663 Change in plan assets: Fair value of plan assets at beginning of year $ 152,173 $ 157,821 Employer contributions 3,988 3,789 Employer direct benefit payments 157 144 Employee contributions 1,815 1,747 Interest income 4,344 3,873 Benefits paid ( 12,756 ) ( 12,315 ) Administration expenses ( 248 ) ( 225 ) Return on assets excl. interest income 1,945 8,808 Currency translation adjustment 21,321 ( 11,469 ) Fair value of plan assets at end of year 172,739 152,173 Funded Status at end of year $ 36,091 $ 29,510 Total amount recognized: Assets 38,604 32,430 Liabilities 2,513 2,920 Net amount recognized in the Consolidated Balance Sheets $ 36,091 $ 29,510 Accumulated Benefit Obligation at end of year (excluding estimated future salary increases) $ 133,757 $ 120,519 The net actuarial loss included in the PBO for 2025 was primarily due to changes in insured population. The net actuarial loss included in the PBOs for 2024 was primarily due to lower discount rates. Net pension assets are recorded within Other assets in the Consolidated Balance Sheets. The unfunded plans are not material. 79 The following table summarizes the changes in accumulated other comprehensive income: Year Ended December 31, 2025 2024 2023 Balance at beginning of year $ ( 21,830 ) $ ( 24,703 ) $ ( 32,352 ) Net actuarial gain amortized during the year 959 1,088 2,244 Effect of settlement 1,456 1,709 — Net prior service cost — 1 — Net actuarial loss/(gain) 1,960 ( 1,756 ) 8,535 Currency translation adjustment ( 3,076 ) 1,831 ( 3,130 ) Balance at end of year $ ( 20,531 ) $ ( 21,830 ) $ ( 24,703 ) Net periodic pension costs include the following components: Year Ended December 31, 2025 2024 2023 Service cost $ 2,625 $ 2,561 $ 1,891 Interest cost 1,578 1,932 2,542 Interest income ( 4,344 ) ( 3,873 ) ( 3,622 ) Amortization of net gain ( 959 ) ( 1,088 ) ( 2,244 ) Administrative expenses 248 225 230 Gain due to settlement ¹ ( 1,456 ) ( 1,709 ) — Total Benefit cost $ ( 2,308 ) $ ( 1,952 ) $ ( 1,203 ) 1 The settlement gain results from benefit payments, excluding pension payments, and primarily relates to employee turnover in Switzerland where savings accruals are transferred from the current pension foundation to the pension foundation of the new employer. Net periodic pension cost for 2025 included a settlement gain of $ 1,456 due to benefit payments in Switzerland that exceeded the threshold values in accordance with ASC 715-30-35-82 (sum of Service cost and Interest cost). Net periodic pension cost for 2024 included a settlement gain of $ 1,709 due to benefit payments in Switzerland that exceeded the threshold values in accordance with ASC 715-30-35-82 (sum of Service cost and Interest cost). The weighted average assumptions used in the valuation of pension benefits were as follows: Assumptions used to determine benefit obligations as of December 31: 2025 2024 2023 Discount rate 1.50 % 1.00 % 1.45 % Expected return on assets 2.74 % 2.60 % 2.60 % Salary increase 0.69 % 0.80 % 0.80 % Pension increase 0.12 % 0.00 % 0.00 % Prior service cost is initially deferred and subsequently amortized as a component of net periodic pension cost. The amortization of prior service cost is determined using a straight-line amortization of the cost over the average remaining Service period of employees expected to receive benefits under the plans. The discount rate reflects the current rate at which pension liabilities could be effectively settled at the end of the year. The discount rate used considers a yield derived from matching projected pension payments with maturities of a portfolio of available bonds that receive the highest rating given from recognized investments ratings agencies. The changes in the discount rates in 2025 and 2024 are due to changes in yields for these types of investments as a result of the economic environment. In determining the expected return on plan assets using the calculated value of plan assets, the Company considers both historical performance and an estimate of future long-term rates of return on assets similar to those in the plans. The Company consults with and consider the opinions of financial and other professionals in developing appropriate return assumptions. The rate of salary increase is based on management’s estimates using historical experience and expected increases in rates. Net actuarial gains or losses are amortized to expense when exceeding the accounting corridor, which is set at 10 percent of the greater of the plan assets or benefit obligations. Gains or losses within the corridor remain in other 80 comprehensive income and are retested in subsequent measurements. Gains or losses outside of the corridor are subject to amortization over the average remaining service period. The allocation of pension plan assets as of December 31, 2025 and 2024 is as follows: 2025 2024 Asset category: Equity 23.76 % 23.76 % Bonds 43.49 % 43.57 % Liquidity 5.91 % 5.83 % Real estate 26.14 % 26.14 % Other 0.70 % 0.70 % Total 100.00 % 100.00 % The fair values of the pension plan assets at December 31, 2025 and 2024, by asset category are in the table below: 2025 2024 $ Total Level 1 Level 2 Level 3 $ Total Level 1 Level 2 Level 3 Equities 41,050 41,050 — — 36,160 36,160 — — Bonds 75,127 — 75,127 — 66,300 — 66,300 — Liquidity 10,216 10,216 — — 8,874 8,874 — — Other 1,191 — 1,191 — 1,066 — 1,066 — Real estate collective funds 45,155 — — 45,155 39,773 — — 39,773 Total $ 172,739 51,266 76,318 45,155 $ 152,173 45,034 67,366 39,773 The following valuation methodologies were used to measure these assets: (1) Equity securities (equities) - Common Stocks and mutual funds are valued at the closing price reported on the active market on which the individual securities are traded and are classified as Level 1. (2) Fixed income securities (bonds)- Debt securities include government and corporate bonds which are generally quoted in active markets or as units in mutual funds are classified as Level 1. Debt securities for which market prices are not available are valued based on yields reflecting the perceived risk of the issuer and the maturity of the security, recent disposals in the market or other modelling techniques, which may involve judgment. Units in mutual funds which are not directly quoted on a public stock exchange and/or for which a fair value is not readily determinable are measured at fair value using NAV. They are therefore classified as Level 2. (3) Cash and cash equivalents (liquidity) - Cash and cash equivalents include money market instruments and commingled funds. Valuations are generally based on observable inputs. They are categorized as Level 1. (4) Real estate – Real estate investments are classified as Level 2 and are measured at fair value using discounted cash flow. The change in the fair value of the Company's Level 3 pension assets for the years ended December 31, 2025 and 2024 was as follows: Real estate collective funds Balance at January 1, 2024 $ 41,175 Unrealized gains/(losses) 1,663 Impact of foreign currency ( 3,065 ) Balance at December 31, 2024 $ 39,773 Unrealized gains/(losses) ( 264 ) Impact of foreign currency 5,646 Balance at December 31, 2025 $ 45,155 81 Contributions to pension plans for 2026 are estimated to be approximately $ 3,321 . Retiree pension benefit payments, which include expected future service, are anticipated to be paid as follows: Amount 2026 $ 4,267 2027 4,711 2028 5,010 2029 3,549 2030 4,151 2031 - 2035 23,480 NOTE 11– DEBT Debt consists of the following: December 31, 2025 2024 Revolving credit facility, due 2030 $ 191,819 $ — Term loan, Facility A, due 2030 328,377 — Revolving credit facility, due 2026 — 152,787 Term loan: Facility A, due 2026 — 20,778 Facility B, due 2026 — 40,000 Facility C, due 2026 — 119,715 Shareholder loan 59,101 51,982 Other debt 15,661 14,591 Total debt 594,958 399,853 Less current portion of long-term debt ( 46,908 ) ( 23,259 ) Total long-term debt $ 548,050 $ 376,594 Refinancing Transaction On March 10, 2025, the Company entered into the New Credit Facilities Agreement comprising: • Term loan, Facility A, due 2030 • Revolving Credit Facility, due 2030 The New Credit Facilities Agreement became effective with the closing of the Merger. As of July 1, 2025, the proceeds obtained ($ 572,050 ) were utilized to fully repay the outstanding amounts of: • Term loan, Facility A, B and C, due 2026 ($ 186,961 ) • Revolving Credit Facility, due 2026 ($ 185,639 ) • Bilaterial Credit Lines ($ 21,096 ) • Revolving Credit Facility of Shyft ($ 120,000 ) Following a creditor-by-creditor assessment, the Company determined that the New Credit Facilities Agreement constitutes a modification for continuing creditors and an extinguishment for leaving creditors, in accordance with ASC 470-50. Term Loan Facility A, due 2030 Term Loan, Facility A is a multicurrency senior secured amortizing term loan facility with a total commitment amount of $ 350,000 . The interest rate is variable defined based on the applicable reference rate (SOFR, SARON, EURIBOR), plus 82 a margin. The margin increases with the Company's leverage ratio. The average interest rate for the six months ended December 31, 2025 was 6.633 %. As of December 31, 2025, debt issuance costs of $ 4,800 are deferred and amortized based on the effective interest method and $ 1,161 have been written off in the year ended December 31, 2025 due to the debt modification accounting. The Company is subject to certain customary covenants that prohibit the Company from incurring additional indebtedness, limit certain acquisitions, investments, advances or loans and restrict substantial asset sales (all subject to certain exceptions and baskets). In addition, the New Credit Facilities Agreement also requires the Company to maintain certain financial ratios. For the period ended December 31, 2025, the Company was required to maintain a leverage ratio that did not exceed 3.25 x. The Company was in compliance with all covenants as of December 31, 2025. Revolving Credit Facility, due 2030 The revolving credit facility is a multicurrency senior secured revolving loan facility with a total commitment amount of up to $ 250,000 . The interest rate is variable and based on the applicable reference rate (SOFR, SARON, EURIBOR), plus a margin. The margin increases with the Company's leverage ratio. The average interest rate for the six months ended December 31, 2025 was 6.496 %. As of December 31, 2025, debt issuance costs of $ 3,428 are deferred and amortized based on a straight-line basis over the term of the debt and $ 829 have been written off for the year ended December 31, 2025 due to the debt modification accounting. The Company is subject to certain customary covenants that prohibit the Company from incurring additional indebtedness, limit certain acquisitions, investments, advances or loans and restrict substantial asset sales (all subject to certain exceptions and baskets). In addition, the New Credit Facilities Agreement also requires the Company to maintain certain financial ratios. For the period ended December 31, 2025, the Company was required to maintain a leverage ratio that did not exceed 3.25 x. The Company was in compliance with all covenants as of December 31, 2025. Term Loan In November 2021, the Company entered a syndicated loan agreement with various banks for financing acquisitions. The prior term loan was split into the following facilities: Facility A - A senior amortizing term loan facility with a total commitment of EUR 45,000 ($ 52,875 ). Facility B - A senior amortizing term loan facility with a total commitment of $ 60,000 . Facility C - A senior non-amortizing term loan facility with a total commitment of $ 90,000 and EUR 28,602 ($ 33,607 ). The interest rate was variable defined based on EURIBOR (EUR) compounded with SOFR (USD) plus a given interest margin. The average interest margin of Facility A and B was 2.183 % for the six months ended June 30, 2025, and 2.300 % and 3.688 % during the years ended December 31, 2024 and 2023, respectively. The average interest rate margin for Facility C was 2.675 % for six months ended June 30, 2025, and 2.800 % and 3.688 % for the years ended December 31, 2024 and 2023, respectively. On July 1, 2025, the Company repaid the outstanding amount of $ 186,961 with the proceeds obtained under the Term loan, Facility A, due 2030 and each of Facility A, Facility B and Facility C were terminated. The Company has been committed to fulfill certain financial covenants throughout the credit contract period and was in compliance with all covenants. Revolving Credit Facility, due 2026 The aggregate of the revolving credit facility commitment of EUR 165,000 ($ 193,875 ) was primarily used for refinancing existing debt obligations, excluding those related to Facility A. In addition, the revolving credit facility supported the broader financial needs of the Company, including general corporate purposes and working capital requirements, as well as funding permissible acquisitions aligned with the Company’s strategic objectives. On July 1, 2025, the Company repaid the outstanding amount of $ 185,639 with the proceeds obtained under the revolving credit facility, and the revolving credit facility was terminated. Shareholder loans As of December 31, 2025, and December 31, 2024, there were subordinated shareholder loans totaling CHF 13,563 (2025: $ 17,110 , 2024: $ 14,970 ) and EUR 15,000 (2025: $ 17,626 , 2024: $ 15,584 ) from PCS Holding AG, as well as subordinated shareholder loans totaling CHF 10,000 (2025: $ 12,615 , 2024: $ 11,038 ) and EUR 10,000 (2025: $ 11,750 , 2024: $ 10,390 ) from Gebuka AG. The loans are originally granted for a fixed term, but the term will be extended if the loan agreement is not terminated 90 days prior to the end date or if an extension agreement is signed. The change in the loan 83 balance as of December 31, 2025, and 2024 is solely due to foreign exchange rate fluctuations. These shareholder loans were renewed and amended in connection with the New Credit Facilities Agreement. Total principal payments by maturity Scheduled maturities of the Company’s debt portfolio are summarized below: Succeeding fiscal year Principal payments 2026 $ 46,908 2027 36,121 2028 35,444 2029 36,366 2030 380,318 Thereafter 59,801 Total principal payments $ 594,958 Off-balance sheet arrangements The contingent liabilities include guarantees amounting to $ 20,246 and $ 13,202 as of December 31, 2025, and 2024, respectively. Through the normal course of bidding for and executing certain projects, the Company has entered into bid/performance bonds and surety bonds (collectively “performance bonds”) with various financial institutions. Customers can draw on such performance bonds if the Company does not fulfil its contractual obligations. If a performance bond is drawn the Company would have an obligation to reimburse the financial institution for amounts paid. There have been no significant amounts reimbursed to financial institutions under these types of arrangements for the years ended December 31, 2025 and 2024. NOTE 12 – ACCUMULATED OTHER COMPREHENSIVE INCOME The components of AOCI, net of tax are as follows: As of December 31, 2025 2024 Foreign currency translation adjustments $ 9,676 $ 9,064 Pension benefits 18,507 22,405 Total accumulated other comprehensive income $ 28,183 $ 31,469 NOTE 13 – STOCK BASED COMPENSATION AND EQUITY We assumed the Shyft Stock Incentive Plan in connection with the Merger with Shyft. There were outstanding awards under that plan, and we may make additional awards under that plan to certain employees and non-employee directors. In addition, shortly prior to our acquisition of Shyft we made restricted stock grants in the form of “Retention Awards” to certain employees and non-employee directors as described below. Shares reserved for outstanding awards under these plans total 5,856,250 . Total shares remaining for stock incentive grants under these plans totaled 1,073,984 at December 31, 2025. Restricted Stock - Retention Awards On June 24, 2025, the Company granted 250,000 equity classified restricted stock awards (“2025 Retention Awards”) with a grant date fair value of $ 11.72 that cliff vest upon the satisfaction of both a three-year service condition and a performance condition based upon the Merger, which was satisfied at the Effective Time. At the Effective Time, the Company recorded a cumulative catch-up adjustment and will recognize remaining cost over the remaining requisite service period. The grant date fair value of Aebi's stock was calculated using the Shyft share price on June 24, 2025, adjusted by the Exchange Ratio. The 2025 Retention Award expense, net of forfeitures, and associated tax benefit for all outstanding awards for the year ended December 31, 2025 was $ 505 and $ 0 , respectively, for the year ended December 31, 2024, was $ 0 and $ 0 , respectively and for the year ended December 31, 2023 was $ 0 and $ 0 , respectively. 84 Total Number of Non-vested Shares (000) Weighted-Average Grant Date Fair Value per Award Non-vested as of December 31, 2024 — $ — Granted 250 11.72 Vested — — Forfeited — — Non-vested as of December 31, 2025 250 $ 11.72 As of December 31, 2025, there was $ 2,425 of remaining unrecognized compensation cost related to non-vested RSAs, which is expected to be recognized over a weighted-average period of 2.5 years. 2025 Restricted Stock Awards and Restricted Stock Units At the Effective Time, each Shyft restricted stock award (“Shyft RSA”) and each Shyft restricted stock unit (“Shyft RSU”) that was held by an employee and did not vest on or prior to the Effective Time by its terms, was assumed by Aebi Schmidt and exchanged for a time-vested Aebi Schmidt restricted stock award (“Aebi Schmidt RSAs”) or a time-vesting Aebi Schmidt restricted stock unit (“Aebi Schmidt RSU”) of equivalent value and subject to substantially the same terms and conditions, including vesting and settlement terms, as applied to the corresponding Shyft RSA or Shyft RSU immediately prior to the Effective Time. The number of shares of Aebi Schmidt Common Stock subject to such Aebi Schmidt RSAs or Aebi Schmidt RSUs was equal to the product of (i) the total number of shares of Shyft Common Stock underlying each Shyft RSA or Shyft RSU prior to the Effective Time, multiplied by (ii) the Exchange Ratio. Pursuant to ASC 805, the acquisition date fair-value-based measured of the Shyft RSA or Shyft RSU being replaced was allocated to consideration transferred based on the ratio of pre-combination service over the greater of the total service period or the original service period. Post-combination compensation cost, which will be recognized straight line over the remaining requisite service period of the replacement awards following the Transactions, was calculated as the difference between the acquisition date fair-value-based measure of the replacement Aebi Schmidt RSAs and Aebi Schmidt RSUs and the amount allocated to consideration transferred. Each Shyft performance stock unit (“Shyft PSU”) was similarly converted to an Aebi Schmidt equity classified RSU at the Effective Time based on the Exchange Ratio. Shares awarded entitle the shareholder to all rights of common stock ownership except for RSU's, which do not entitle the shareholder the right to vote and dividends are accrued, and all shares are subject to the risk of forfeiture and may not be sold, transferred, pledged, exchanged or otherwise disposed of during the vesting period, which is three years . We received tax deductions during the period the restricted shares vested. The excess tax benefit (or tax shortfall) is determined by the excess (shortfall) of the market price of the stock on date of vesting over (under) the acquisition date fair value used to amortize the awards to compensation expense. As required, any excess tax benefits or shortfalls are reported in the Consolidated Statements of Cash Flows as operating cash flows. The Aebi Schmidt RSA expense, net of forfeitures, and associated tax benefit for all outstanding awards for the year ended December 31, 2025, was $ 1,702 and $ 0 , respectively, for the year ended December 31, 2024 was $ 0 and $ 0 , respectively, and for the year ended December 31, 2023, was $ 0 and $ 0 , respectively. The Aebi Schmidt RSU expense, net of forfeitures, and associated tax benefit for all outstanding awards for the year ended December 31, 2025 was $ 4,984 and $ 1,086 , respectively, for the year ended December 31, 2024 was $ 0 and $ 0 , respectively, and for the year ended December 31, 2023, was $ 0 and $ 0 , respectively. The Aebi Schmidt RSA activity for the year ended December 31, 2025, is as follows: Total Number of Non-vested Shares (000) Weighted-Average Grant Date Fair Value per share Award Non-vested as of December 31, 2024 — $ — Granted 336 12.06 Vested ( 148 ) 12.06 Forfeited ( 94 ) 12.06 Non-vested as of December 31, 2025 94 $ 12.06 85 As of December 31, 2025, there was $ 715 of remaining unrecognized compensation cost related to Aebi Schmidt RSAs, which is expected to be recognized over a weighted-average period of 2.5 years. The Aebi Schmidt RSU activity for the year ended December 31, 2025, is as follows: Total Number of Non-vested RSUs (000) Weighted-Average Grant Date Fair Value per Unit Non-vested as of December 31, 2024 — $ — Granted 1,170 12.06 Vested ( 680 ) 12.06 Forfeited ( 49 ) 12.06 Non-vested as of December 31, 2025 441 $ 12.06 As of December 31, 2025, there was $ 3,482 of remaining unrecognized compensation cost related to Aebi Schmidt RSUs, which is expected to be recognized over a weighted-average period of 1.7 years. Aebi Schmidt Historical Employee Share Plan Prior to the Transaction, we offered an employee share plan (the “Aebi Schmidt Historical Employee Share Plan”) whereby certain employees who met certain service requirements could purchase shares of the Company. Under the Aebi Schmidt Historical Employee Share Plan, the Human Resources and Compensation Committee granted participants stock awards (2025: — , 2024: — , 2023: 13,424 ). Awards of shares of the Company were granted and vested under the plan in exchange for consideration and the shares carried dividend and voting rights effective as of the grant date of the awards. The Human Resources and Compensation Committee had sole discretion in determining whether any shares were allocated to the Plan for purchase in any given year. In a year where the Human Resources and Compensation Committee had allocated shares for the Plan, plan participants purchased shares in the Company at a discount of 40 % to the fair value. As there are no post-purchase service requirements, the Company historically recognized the compensation cost for the awards at the time the participant purchased the shares, because the discount made it compensatory in nature, in scope of ASC 718. The final purchase window for the Aebi Schmidt Historical Employee Share Plan ended on July 1, 2025, and the plan is no longer in effect. Under the Aebi Schmidt Historical Employee Share Plan, the Company, prior to its Common Stock being listed on an active stock exchange, had the right to repurchase all shares held by the participant using the last fair value calculated prior to termination if a participant terminated for any reason other than death or retirement. Therefore, the Company historically recognized a liability based on the repurchase provisions of the award. Upon successful completion of the Transaction, the repurchase right terminated, accordingly the awards under the employee share plan were re-valued using the share price of $ 12.06 on July 1, 2025 to fair value and reclassified from liability to equity. The liability as of June 30, 2025 was $ 13,734 , representing 757,140 shares following the 2025 Forward Stock Split; refer to “ Note 1 – Nature of Operations and Basis of Presentation ” for further information regarding the forward stock split. The revaluation of the liability, immediately prior to reclassification to equity, resulted in a reduction in compensation cost of $ 6,377 recognized in selling, general and administrative in our Consolidated Statement of Operations. Treasury shares Treasury shares generally consist of shares of the Company’s common stock repurchased under the Company’s Board authorized stock repurchase program. As of December 31, 2025, the Company had a total of 13,538 treasury shares at a total average cost of $ 257 . As of December 31, 2024, the Company had a total of 13,538 treasury shares at a total average cost of $ 257 . NOTE 14– EARNINGS PER SHARE Basic earnings per share is computed using the weighted-average number of outstanding shares of common stock during the period. Diluted earnings per share is computed using the weighted-average number of outstanding shares of common stock and, when dilutive, potential outstanding shares of common stock during the period. Potential shares of common stock are calculated using the treasury-stock method and consist of incremental shares issuable upon the vesting of the 2025 Retention Awards, Aebi Schmidt RSAs and the Aebi Schmidt RSUs. The computation of both earnings per share is as follows: 86 Year Ended December 31, 2025 2024 2023 ( in thousands, except per share data) Basic earnings per share: Net income $ 9,739 $ 30,682 $ 11,199 Shares used in computation: Weighted-average shares of common stock outstanding 58,664 40,364 40,342 Basic earnings per share $ 0.17 $ 0.76 $ 0.28 Diluted earnings per share: Net income $ 9,739 $ 30,682 $ 11,199 Shares used in computations: Weighted-average share of common stock outstanding 58,664 40,364 40,342 Effect of dilutive stock-based awards 120 — — Weighted-average number of shares 58,784 40,364 40,342 Diluted earnings per share $ 0.17 $ 0.76 $ 0.28 NOTE 15 – BUSINESS COMBINATION 2025 Acquisition On July 1, 2025 (the “Acquisition Date”), the Company acquired all outstanding equity of Shyft, a niche market leader in specialty vehicle manufacturing and assembly for the commercial and recreational vehicle industries, pursuant to the Merger Agreement. For further information regarding the Merger, please refer to “ Note 1- Nature of Operations and Basis of Presentation. ” The Company acquired 100 % of Shyft’s voting equity interests, with the primary motivation being to enhance the Company’s product offerings in specialty vehicle solutions, expand market share in North America, and leverage Shyft’s innovative design and manufacturing capabilities. Shyft will expand the Company’s ability to provide customized vehicle solutions, including walk-in vans, truck bodies, and luxury Class A diesel motorhome custom chassis to a diverse clientele, including commercial users, original equipment manufacturers, dealers, and governmental entities, thereby providing a diversified portfolio that mitigates risk across various market cycles. Shyft was headquartered in Novi, Michigan, and is integrated into the North America Segment. Shyft’s annual sales in 2024 were $ 786,176 . The total consideration transferred was approximately $ 443,103 . The Company will record the assets acquired and liabilities assumed at their fair values as of the Acquisition Date. The Shyft acquisition was accounted for using the acquisition method of accounting with the purchase price allocated to the assets purchased and liabilities assumed based upon their estimated fair values at the date of acquisition. Identifiable intangible assets include Brand, Technology, Customer relationships and Order backlog. The excess of the purchase price over the estimated fair values of assets acquired and liabilities assumed was recorded as goodwill. In accordance with ASC 805-30-50-1(a), the goodwill recognized in this acquisition is attributed to several qualitative factors, including expected synergies from the integration of the operations of the acquiree and the acquirer, intangible assets that do not qualify for separate recognition, and other relevant factors. All of the goodwill has been provisionally assigned to the Shyft reporting unit, which has been recognized as part of the acquisition, and is included in the North America reportable segment. Goodwill totaled $ 181,958 and is not deductible for tax purposes. In accordance with ASC 805, the allocation of the purchase price for the acquisition of Shyft is preliminary and subject to adjustment during the measurement period, which may extend up to one year from the Acquisition Date. The initial allocation of assets acquired and liabilities assumed is based on preliminary estimates and assumptions, and as such, the values assigned to certain working capital balances, identifiable intangible assets, property, plant and equipment, taxes, and contingent liabilities may be adjusted as additional information becomes available. These adjustments could result in changes to the amounts recognized in the Consolidated Financial Statements, including potential adjustments to the goodwill recognized. The Company will continue to refine its estimates and assumptions as it obtains more information, and any adjustments identified during the measurement period will be recognized in the reporting period in which the adjustments are determined. 87 The Company (i) issued and delivered to Shyft shareholders an aggregate of 36,350,634 shares of Aebi Schmidt Common Stock at $ 12.06 per share, (ii) paid to Shyft fractional shareholders an aggregate amount in cash equal to $ 2 (the “Cash Consideration”) and (iii) replaced Shyft equity awards amounting to $ 4,866 that are allocated to consideration transferred as they relate to the pre-acquisition period. The $ 443,103 of common stock was entirely comprised of Aebi Schmidt Common Stock, par value $ 1.00 . The purchase price was comprised of the following: Purchase price: Aebi shares issued to Shyft shareholders on July 01, 2025 (1) 36,350,634 Shyft stock price on June 30, 2025 (2) $ 12.54 Exchange ratio 1.04 Share consideration ( 36,350,634 number of shares issued at the Fair Value of $ 12.06 per share) $ 438,235 Add: Cash paid for fractional shares 2 Add: Fair value of Shyft Equity awards allocated to pre-acquisition period (3) 4,866 Total purchase price $ 443,103 (1) Includes vested Shyft Director RSU awards. (2) The fair value of the share consideration and the replacement awards issued to Shyft employees was determined using Shyft's stock price, as it was considered more reliably measurable than the stock price of Aebi Schmidt. The measurement was based on Shyft's stock price as of June 30, 2025, the last trading day prior to delisting, which occurred on the Acquisition Date. (3) Represents the estimated fair value of Shyft RSAs, Shyft RSUs (other than Shyft Director RSUs), and Shyft PSUs attributable to pre-combination services. $ 501 of Shyft RSAs, $ 1,585 of Shyft RSUs, and $ 2,780 of Shyft PSUs are attributed to pre-combination service. The total number of shares of Aebi Schmidt Common Stock issued as consideration, after adjusting for unvested RSAs, vested Director RSUs, and excluding fractional shares settled in cash, was 36,696,981 shares. This total comprises 36,350,634 shares issued to Shyft shareholders, of which 105,874 relating to Aebi Schmidt RSA exchanged for Shyft RSA that have not fully vested, and 346,347 shares that accelerated vesting upon a termination and change in control (double trigger provision). For further information regarding stock based compensation please refer to “ Note 13 - Stock Based Compensation and Equity .” Acquisition costs in connection with the Merger incurred by the Company include acquisition-related legal and other professional fees in the total amount of $ 19,169 as of the Acquisition Date, which are recognized as $ 14,765 and $ 4,404 in the income statement for the year ended December 31, 2025 and 2024, respectively. All amounts were recorded within other income (expense) for the respective periods. The table below presents the preliminary purchase price allocation to the estimated fair value of identifiable assets acquired and liabilities assumed as of the Acquisition Date. Measurement period adjustments were based upon information obtained about facts and circumstances that existed at the acquisition date that, if known, would have affected the measurement of the amounts recognized at that date. In the fourth quarter of 2025, the Company recorded measurement period adjustments to cash and cash equivalents, other current liabilities and accrued expenses, and intangible assets. We also adjusted deferred tax liabilities to reflect measurement‑period refinements to our estimated deferred tax calculation. The offset to these adjustments were recorded as a net decrease to goodwill. The purchase price allocation to the fair value of assets acquired and liabilities assumed is as follows: 88 Purchase Price Allocation Measurement Period Adjustments Purchase Price Allocation (As Adjusted) Fair value of identifiable assets and liabilities: Cash and cash equivalents $ 19,905 $ ( 539 ) $ 19,366 Accounts receivable 84,121 84,121 Contract assets 44,559 44,559 Inventories 91,117 91,117 Prepaid expenses and other current assets 8,191 8,191 Total current assets 247,893 ( 539 ) 247,354 Property, plant and equipment 101,832 101,832 Goodwill 193,960 ( 12,002 ) 181,958 Intangible assets 181,104 1,682 182,786 Right of use assets operating leases 47,347 47,347 Other assets 1,317 1,317 Total Assets $ 773,453 $ ( 10,859 ) $ 762,594 Accounts payable $ 80,844 $ 80,844 Accrued warranty 6,782 6,782 Accrued compensation and related taxes 11,174 11,174 Contract liabilities 9,123 9,123 Operating lease liability 9,221 9,221 Other current liabilities and accrued expenses 25,574 3,511 29,085 Current portion of long-term debt 452 452 Current liabilities $ 143,170 $ 3,511 $ 146,681 Other non-current liabilities 12,205 12,205 Long-term operating lease liability 34,346 34,346 Long-term debt, less current portion 120,344 120,344 Deferred tax liabilities 20,285 ( 14,370 ) 5,915 Total liabilities 330,350 ( 10,859 ) 319,491 Total fair value allocation of purchase price $ 443,103 — $ 443,103 The value of accounts receivables acquired approximates the gross contractual amount of accounts receivable. The contractual amount not expected to be collected is immaterial. As part of the business combination, the Company recognized contingent liabilities of $ 7,535 related to certain commitments. The Company measured these contingencies at fair value and the liabilities reflect management's best estimate of future payments related to these arrangements, which depends on final negotiated terms following the acquisition. The valuation incorporates probability-weighted scenarios based on expected outcomes. The Company continues to monitor these arrangements and will adjust the fair value as necessary in future reporting periods. Intangible assets totaling $ 182,786 have provisionally been assigned to Brand, Technology, Customer relationships and Order backlog as a result of the acquisition. The fair value of Customer relationships was determined using an income approach methodology, specifically the multi-period excess earnings method. The fair value of Brand and Technology was determined using an income approach methodology, specifically the relief from royalty method. Significant assumptions used in estimating future cash flows included projected revenue growth rates and discount rate for customer relationships and projected revenue growth rates, royalty rate and discount rate for brand. Intangible assets consist of the following (in thousands): 89 Amount Useful life (in years) Weighted average amortization period (in years) Brand $ 60,858 5 - 20 18 Technology 26,097 10 10 Customer relationships 90,882 15 15 Order backlog 4,949 1 1 $ 182,786 15 The Company amortizes the Brand, Technology, Customer relationships and Order backlog utilizing a straight-line approach. Shyft had revenue of $ 377,983 and generated an operating loss of ($ 2,202 ) for the period from the Acquisition Date through December 31, 2025, which is included in the accompanying consolidated financial statements. The Company has applied the practical expedient in ASC 805-20-30-29 for contract assets and contract liabilities acquired in the business combination. Acquired contract assets and liabilities in the scope of ASC 606 are an exception to the ASC 805 fair value measurement principle and were measured as if Aebi Schmidt had originated the acquired contract. For each contract Aebi Schmidt reassessed the identification of performance obligations, determination of transaction price, allocation of transaction price, and measure of progress for each performance obligation as if Aebi Schmidt has been party to the original contract and recognized the resulting contract asset or liability as an asset acquired or a liability assumed. The application of this expedient aligns with the acquiree’s historical accounting and is not expected to materially affect the consolidated financial statements. The Company continues to evaluate the impact of these items in subsequent periods as part of its ongoing revenue recognition processes. Supplemental Pro Forma (unaudited) The following table summarizes the unaudited supplemental pro forma financial information for the years ended December 31, 2025 and 2024, as if the acquisition was completed on January 1, 2024. The unaudited pro forma information was prepared in accordance with the requirements of ASC 805. Pro forma adjustments have been made to reflect the impact of incremental non-recurring acquisition-related adjustments, including transaction costs of $ 14,765 , cash retention awards of $ 1,465 , share-based compensation of $ 6,674 , employee severance of $ 15,140 and adjustment related to fair value step-up to inventory of $ 936 . The adjustments also include the interest expense related to the debt modification, amortization of acquired intangible assets and lease remeasurement, depreciation of the fair-valued tangible assets, and the related tax effects of these adjustments. (In thousands amounts) Year Ended December 31, 2025 2024 Revenue $ 1,905,316 $ 1,868,039 Net income (loss) $ 19,688 $ ( 9,317 ) The unaudited supplemental pro forma financial information is presented for illustration purposes only and is not necessarily indicative of the operating results that would have occurred had the transaction been completed on January 1, 2024, nor is it necessarily indicative of future operating results of the combined entity. The unaudited pro forma financial information for years ended December 31, 2025 and 2024, is a result of combining the consolidated income statement of the Company with the results of the net assets acquired from Shyft. The pro forma results do not include any cost savings and synergies anticipated as a result of the transaction. We believe the estimates and assumptions are reasonable, and the relative effects of the transaction are properly reflected. 2024 Acquisition On November 21, 2024, the Company acquired 100 % of the outstanding membership interests of LADOG - Fahrzeugbau- und Vertriebs-GmbH (“Ladog”) for cash consideration of EUR 5,000 ($ 5,441 ) and up to an additional EUR 3,400 ($ 3,700 ) earn-out amount subject to Ladog shareholders remaining as employees of the Company for two - and three-years post-acquisition. In the event the Ladog shareholders do not remain with the Company, the amount would be forfeited for the respective employee that leaves before the contractual vesting date. Accordingly, the Company has 90 classified the earn-out amount as compensation expense for post-combination services. Ladog is a manufacturer of municipal narrow-track vehicles and commercial vehicles based in Germany with $ 15,474 in revenue for 2023. Ladog’s products seamlessly fit into the Company’s product portfolio and expands the Companies business in Germany. The Ladog acquisition was accounted for using the acquisition method of accounting with the purchase price allocated to the assets purchased and liabilities assumed based upon their estimated fair values at the date of acquisition. Identifiable intangible assets include brands, customer relationships and technology. The excess of the estimated fair values of assets acquired and liabilities assumed over the purchase price of $ 6,780 was recorded as bargain purchase within Other income (expense) in the 2024 Consolidated Statements of Operations. Major factors leading to the bargain purchase include the Acquiree’s motivation for a strategic business partner rather than to maximize price and the lack of consideration for intangible assets in negotiations. These elements collectively support the recognition of a bargain purchase gain. The purchase price was comprised of the following: Purchase price: Cash paid $ 5,441 Total purchase price $ 5,441 The Company did not record a contingent consideration liability for the earn out at the opening balance sheet date. Instead, the Company will recognize compensation expense over the two - and three-year period in which the amounts are earned. As of December 31, 2025, the purchase price allocation to the fair value of assets acquired and liabilities assumed is as follows: Fair value of identifiable assets and liabilities: Cash and cash equivalents $ 9,879 Accounts receivable 2,191 Prepaid expenses and other current assets 8 Inventories 9,544 Intangible assets 1,369 Property, plant and equipment 506 Total Assets $ 23,497 Accounts payable 430 Other current liabilities and accrued expenses 8,859 Accrued compensation and related taxes 119 Accrued warranty 287 Other non-current liabilities 1,128 Deferred tax liabilities 407 Total Liabilities $ 11,230 Total fair value allocation of purchase price $ 12,267 Intangible assets totaling $ 1,369 have provisionally been assigned to Brands, Concessions, rights and licenses, Technology and Customer relationships, as a result of the acquisition, and consist of the following: Amount Useful life (in years) Weighted average amortization period (in years) Brands $ 420 5 5 Concessions, rights and licenses 79 5 5 Technology 235 10 10 Customer relationships 635 5 5 $ 1,369 5.86 91 The Company amortizes the brands, concessions, rights and licenses, customer relationships and technology utilizing a straight-line approach. Amortization expense, as a part of Amortization of purchased intangibles as presented on the Consolidated Statements of Operations, was $ 248 and $ 24 for 2025 and 2024, respectively. Ladog had revenue of $ 23,085 and generated operating income of $ 1,754 for the year ended December 31, 2025, which is included in the accompanying consolidated financial statements. Due to its insignificant size relative to the Company, supplemental pro forma financial information of the combined entity for the prior reporting period is not provided. Furthermore, the Company evaluated the revenues generated by Ladog from the acquisition date through December 31, 2024, and concluded that these revenues were not material. NOTE 16 – RELATED PARTY TRANSACTIONS The tables below show the financial statement line items and amounts included in the Consolidated Statements of Operations and on the Consolidated Balance Sheets under various related party agreements or relationships: Year Ended December 31, 2025 2024 Assets: Accounts receivable on account of sales to related party $ 358 $ 64 Liabilities: Accounts payable of related party $ 254 $ 143 Long-term shareholder loans (subordinated) $ 59,101 $ 51,982 Year Ended December 31, 2025 2024 2023 Sales: $ 6,794 $ 4,156 $ 5,421 Sales to related parties Other expense: Interest expense from shareholder loans $ 1,420 $ 1,359 $ 1,341 Other expenses $ 915 $ 608 $ 305 Terms and conditions of transactions with related parties Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. Subordinated Shareholder Loans As of December 31, 2025, and 2024, there were subordinated shareholder loans totaling CHF 13,563 (2025: $ 17,110 , 2024:$ 14,970 ) and EUR 15,000 (2025: $ 17,626 , 2024: $ 15,584 ) from PCS Holding AG, as well as subordinated shareholder loans totaling CHF 10,000 (2025: $ 12,615 , 2024: $ 11,038 ) and EUR 10,000 (2025: $ 11,750 , 2024: $ 10,390 ) from Gebuka AG with a fixed interest rate of 2.5 % per annum. The change in the loan balance as of December 31, 2025, and 2024 is solely due to foreign exchange rate fluctuations. NOTE 17– SEGMENTS The Company identifies their operating and reportable segments based on the management structure and the financial data utilized by the CODM, which was determined to be the Board of Directors, to assess segment performance and allocate resources among the operating units. The Company’s segment reporting policy identifies two operating segments, North America and Europe and ROW as reportable segments. Financial results for each segment are presented separately to provide transparency and insight into the performance and resources of each geographic area, consistent with how the CODM reviews and assesses the Company’s operations. 92 The CODM evaluates the performance of their reportable segments based on Segment Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization), which is defined as net income before interest, taxes, depreciation and amortization, adjusted for non-recurring or unusual foreign exchange gains and losses on external debt, restructuring and other related expenses, transaction related expenses, bargain purchase gains on acquisitions, changes in repurchase liabilities for Aebi Schmidt's employee share plan, non-service cost related pension expenses, legacy legal matters, sales executive transition costs, changes in provisions for contingencies, and other non-recurring items. Interest expense and taxes on income are not included in the information utilized by the CODM to assess segment performance and allocate resources, and accordingly, are excluded from the segment results presented below. The Company’s Board of Directors assesses the Segment Adjusted EBITDA to compare to historical trends and the forecast to assess segment results, allocate capital, make strategic decisions and identify areas of opportunity. Sales and other financial information by reportable segment are as follows: Year Ended December 31, 2025 North America Europe and ROW Total New Business $ 876,108 $ 428,874 $ 1,304,982 After Sales 98,994 122,649 221,643 Segment sales $ 975,102 $ 551,523 $ 1,526,625 Depreciation and amortization expense $ 37,923 $ 6,277 $ 44,200 Segment assets $ 1,524,478 $ 483,801 $ 2,008,279 Capital expenditures $ 9,690 $ 4,551 $ 14,241 Segment Adjusted EBITDA for the year ended December 31, 2025, is as follows: North America Europe and ROW Sales $ 975,102 $ 551,523 Cost of products sold 786,813 435,758 Research and development 7,753 18,741 Selling, general and administrative 117,618 63,029 Other segment items 1 ( 36,473 ) 546 Adjusted EBITDA $ 99,391 $ 33,449 _________________ 1. Other segment items include, other operating income and expenses, other income and expenses, depreciation and amortization, transaction related expenses, non-service cost related pension expense and legacy plan, foreign exchange gain on external debts and other non-recurring items. 93 The reconciliation of total Segment Adjusted EBITDA to income before income taxes for the year ended December 31, 2025, is as follows: Total Segment Adjusted EBITDA $ 132,840 Interest expense ( 41,794 ) Foreign exchange gains/losses on external debt ( 2,961 ) Depreciation and amortization ( 44,200 ) Restructuring and other related expenses ( 17,725 ) Transaction related expenses ( 14,765 ) Integration costs ( 3,856 ) Settlement of acquisition ( 1,697 ) Changes in valuation of liability for legacy Aebi Schmidt employee share plan 6,377 Non-service cost related pension expense and legacy plan 5,055 Legal matters ( 1,281 ) Change in provision for contingencies 1,291 Non-cash stock-based compensation expenses ( 1,473 ) Other non-operating one-off items ( 4,619 ) Income before income taxes $ 11,192 Year Ended December 31, 2024 North America Europe and ROW Total New Business $ 538,576 $ 380,157 $ 918,733 After Sales 54,865 112,360 167,225 Segment sales $ 593,441 $ 492,517 $ 1,085,958 Depreciation and amortization expense $ 20,702 $ 5,712 $ 26,414 Segment assets $ 695,715 $ 392,409 $ 1,088,124 Capital expenditures $ 7,445 $ 6,168 $ 13,613 Segment Adjusted EBITDA for the year ended December 31, 2024, is as follows: North America Europe and ROW Sales $ 593,441 $ 492,517 Cost of products sold 472,217 385,504 Research and development 2,979 16,577 Selling, general and administrative 55,253 69,407 Other segment items 1 ( 5,708 ) ( 9,268 ) Segment Adjusted EBITDA $ 68,700 $ 30,297 _________________ 1. Other segment items include, other operating income and expenses, other income and expenses, depreciation and amortization, transaction related expenses, non-service cost related pension expense and legacy plan, foreign exchange gain on external debts and other non-recurring items. 94 The reconciliation of total Segment Adjusted EBITDA to income before income taxes for the year ended December 31, 2024, is as follows: Total Segment Adjusted EBITDA $ 98,997 Interest expense ( 34,106 ) Foreign exchange gains/losses on external debt 1,647 Depreciation and amortization ( 26,414 ) Restructuring and other related expenses ( 819 ) Transaction related expenses ( 4,404 ) Bargain purchase gain on acquisition 6,780 Settlement of acquisition — Changes in evaluation of liability for legacy Aebi Schmidt employee share plan ( 3,446 ) Non-service cost related pension expense and legacy plan 4,290 Legal matters ( 180 ) Sales executive transition ( 266 ) Change in provision for contingencies 98 Non-cash stock-based compensation expenses — Other non-operating one-off items ( 513 ) Income before income taxes $ 41,664 Year Ended December 31, 2023 North America Europe and ROW Total New Business $ 493,931 $ 365,173 $ 859,104 After Sales 47,938 108,530 156,468 Segment sales $ 541,869 $ 473,703 $ 1,015,572 Depreciation and amortization expense $ 21,017 $ 6,147 $ 27,164 Segment assets $ 701,842 $ 408,941 $ 1,110,783 Capital expenditures $ 4,850 $ 7,064 $ 11,914 Segment Adjusted EBITDA for the year ended December 31, 2023, is as follows: North America Europe and ROW Sales $ 541,869 $ 473,703 Cost of products sold 436,987 371,933 Research and development 2,268 14,857 Selling, general and administrative 51,880 65,177 Other segment items 1 ( 3,647 ) ( 10,291 ) Segment Adjusted EBITDA $ 54,381 $ 32,027 _________________ 1. Other segment items include, other operating income and expenses, other income and expenses, depreciation and amortization, transaction related expenses, non-service cost related pension expense and legacy plan, foreign exchange gain on external debts and other non-recurring items. The reconciliation of total Segment Adjusted EBITDA to income before income taxes for the year ended December 31, 2023, is as follows: 95 Total Segment Adjusted EBITDA $ 86,408 Interest expense ( 38,031 ) Foreign exchange gains/losses on external debt ( 1,778 ) Depreciation and amortization ( 27,164 ) Restructuring and other related expenses 253 Transaction related expenses — Bargain purchase gain on acquisition — Settlement of acquisition — Changes in evaluation of liability for legacy Aebi Schmidt employee share plan ( 2,562 ) Non-service cost related pension expense and legacy plan 2,502 Legal matters ( 501 ) Sales executive transition — Change in provision for contingencies ( 1,569 ) Non-cash stock-based compensation expenses — Other non-operating one-off items ( 212 ) Income before income taxes $ 17,346 The following table presents sales disaggregated by geography that exceed 10% of total sales: Years Ended December 31, 2025 2024 2023 U.S. $ 934,137 $ 549,492 $ 500,522 Switzerland 54,304 59,451 63,809 Other 538,184 477,015 451,241 Total sales $ 1,526,625 $ 1,085,958 $ 1,015,572 Years Ended December 31, 2025 2024 2023 U.S. 61.2 % 50.6 % 49.3 % Switzerland 3.6 % 5.5 % 6.3 % Other 35.3 % 43.9 % 44.4 % Total sales 100.0 % 100.0 % 100.0 % 96 The following table presents assets disaggregated by geography that exceeds 10% of total assets: As of December 31, 2025 2024 U.S. $ 1,495,145 $ 669,230 Switzerland 177,549 140,528 Other 335,585 278,366 Total assets $ 2,008,279 $ 1,088,124 As of December 31, 2025 2024 U.S. 74.4 % 61.5 % Switzerland 8.8 % 12.9 % Other 16.8 % 25.6 % Total assets 100.0 % 100.0 % 97 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosures None.