What changed in this filing

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Item 1. Financial Statements

2025-11-07 compared with 2025-08-08 · 303 added, 271 removed, 819 unchanged (41% of the section changed)

4 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Net operating revenues:

10 unchanged sentences

Selling, general and administrative expenses

Operating income (loss)

Operating income

Other income (expense):

1 unchanged sentence

Other income, net

Income (loss) before income taxes

Income before income taxes

Provision for income taxes

Net income (loss)

Less net loss attributable to non-controlling interest in subsidiaries

Net income (loss) attributable to Avalon Holdings Corporation common shareholders

Income (loss) per share attributable to Avalon Holdings Corporation common shareholders:

Basic and diluted net income (loss) per share

Weighted average shares outstanding - basic and diluted

Net income attributable to Avalon Holdings Corporation common shareholders

Income per share attributable to Avalon Holdings Corporation common shareholders:

Basic net income per share

Weighted average shares outstanding - basic

See accompanying notes to unaudited condensed consolidated financial statements .

2 unchanged sentences

(in thousands, except per share amounts)

September 30,

Current Assets:

40 unchanged sentences

(in thousands, except for share data)

For the Three Months Ended June 30, 2025

Non-controlling

For the Three Months Ended September 30, 2025

Shareholders'

Balance at April 1, 2025

Balance at July 1, 2025

Net Income (loss)

Balance at June 30, 2025

For the Three Months Ended June 30, 2024

Non-controlling

Balance at September 30, 2025

For the Three Months Ended September 30, 2024

Shareholders'

Balance at April 1, 2024

Balance at July1, 2024

Net Income (loss)

Balance at June 30, 2024

Balance at September 30, 2024

See accompanying notes to unaudited condensed consolidated financial statements

2 unchanged sentences

(in thousands, except for share data)

For the Six Months Ended June 30, 2025

Non-controlling

For the Nine Months Ended September 30, 2025

Shareholders'

Balance at January 1, 2025

Balance at June 30, 2025

For the Six Months Ended June 30, 2024

Non-controlling

Net Income (loss)

Balance at September 30, 2025

For the Nine Months Ended September 30, 2024

Shareholders'

Balance at January 1, 2024

Balance at June 30, 2024

Net Income (loss)

Balance at September 30, 2024

See accompanying notes to unaudited condensed consolidated financial statements

2 unchanged sentences

(in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities:

30 unchanged sentences

Significant non-cash investing and financing activities:

Operating lease right-of-use assets in exchange for lease obligations

Finance lease obligation incurred

4 unchanged sentences

Notes to Unaudited Condensed Consolidated Financial Statements

June 30, 2025

September 30, 2025

Description of Business

14 unchanged sentences

Recent Accounting Pronouncements

From time to time, the Financial Accounting Standards Board (the “FASB”) or other standards setting bodies issue new accounting pronouncements.

The FASB issues updates to new accounting pronouncements through the issuance of an Accounting Standards Update (“ASU”).

The Company does not discuss recent pronouncements that are not anticipated to have an impact on, or are unrelated to, its consolidated financial condition, results of operations, cash flows or disclosures.

In December 2023, The FASB issued ASU 2023-09, Income Taxes (Topic 740):

1 unchanged sentence

ASU 2023-09 is effective for public entities for annual periods beginning after December 15, 2024 (calendar year 2025).

The Company is currently evaluating the adoption of this pronouncement and does not expect the adoption to have a material impact on the Company’s financial position, results of operations or financial disclosures.

The Company does not expect the adoption to have a material impact on the Company’s financial position, results of operations or financial disclosures.

In November 2024, The FASB issued ASU 2024-03 , Income Statement - Reporting Comprehensive Income (Topic 220):

8 unchanged sentences

The Company is currently evaluating the impact of this ASU and has not yet determined its effect on the consolidated financial statements.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets, which allows for a practical expedient election to assume that current conditions as of the balance sheet date do not change for the remaining life of the asset in the development of a reasonable and supportable forecast as part of estimating expected credit losses.

ASU 2025-05 is effective for fiscal years beginning after December 15, 2025, with early adoption permitted.

The Company is currently evaluating the impact of electing the practical expedient under ASU 2025-05.

Cash, Cash Equivalents and Restricted Cash

4 unchanged sentences

Cash and cash equivalents that are restricted as to withdrawal or use under the terms of certain contractual agreements are recorded in restricted cash on the Condensed Consolidated Balance Sheets.

Restricted cash consists of loan proceeds deposited into a project fund account to fund costs associated with the renovation and expansion of The Grand Resort and Avalon Field Club at New Castle in accordance with the provisions of the loan and security agreement (See Note 9).

Restricted cash consists of loan proceeds deposited into a project fund account to fund costs associated with the renovation and expansion of The Grand Resort and Avalon Field Club at New Castle.

The project fund account will also be utilized with necessary remodeling during the term of the loan agreement and is classified as long-term and in accordance with the provisions of the loan and security agreement (See Note 9).

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Condensed Consolidated Balance Sheets of which the sum total equal amounts shown in the Condensed Consolidated Statements of Cash Flows.

Cash, cash equivalents and restricted cash consist of the following at June 30, 2025 and December 31, 2024 (in thousands):

Cash, cash equivalents and restricted cash consist of the following at September 30, 2025 and December 31, 2024 (in thousands):

September 30,

Cash and cash equivalents

4 unchanged sentences

Revenue is recognized when obligations under the terms of the contract with our customer are satisfied;

generally this occurs with the transfer of control of the good or service to the customer.

this occurs with the transfer of control of the good or service to the customer.

Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services.

14 unchanged sentences

Operations of the salt water injection wells have been suspended in accordance with the Chief of the Division of Oil and Gas Resources Management order (See Note 15).

Due to the suspension of the salt water injection wells, there were no operating revenues for the three and six months ended June 30, 2025 and 2024.

For the three months ended June 30, 2025 and 2024, the net operating revenues related to waste management services represented approximately 48 % and 53 %, respectively, of Avalon’s total consolidated net operating revenues.

Net operating revenues related to waste management services represented approximately 53% and 59% of Avalon’s total consolidated net operating revenues for the six months ended June 30, 2025 and 2024, respectively.

Due to the suspension of the salt water injection wells, there were no operating revenues for the three and nine months ended September 30, 2025 and 2024.

For the three months ended September 30, 2025 and 2024, the net operating revenues related to waste management services represented approximately 50 % and 47 %, respectively, of Avalon’s total consolidated net operating revenues.

Net operating revenues related to waste management services represented approximately 52% and 55%, respectively of Avalon’s total consolidated net operating revenues for the nine months ended September 30, 2025 and 2024.

For our waste management services contracts, the customer contracts with us to provide a series of distinct waste management services over time which integrates a set of tasks (i.e.

15 unchanged sentences

Golf and Related Operations

Avalon’s golf and related operations include the operation and management of four golf courses and associated clubhouses, recreation and fitness centers, tennis courts, a dermatology center, salon and spa services along with dining and banquet facilities.

Avalon’s golf and related operations include the operation and management of four golf courses and associated clubhouses, recreation and fitness centers, tennis courts, salon and spa services along with dining and banquet facilities.

The golf and related operations also include the operation of a hotel and its related amenities including dining, banquet and conference facilities, fitness center, indoor junior Olympic size swimming pool and tennis courts.

1 unchanged sentence

Due to adverse weather conditions, net operating revenues relating to the golf courses, which are located in northeast Ohio and western Pennsylvania, were minimal during the first three months of 2025 and 2024.

For the three months ended June 30, 2025 and 2024, the net operating revenues related to the golf and related operations represented approximately 52 % and 47 %, respectively, of Avalon’s total consolidated net operating revenues.

For the six months ended June 30, 2025 and 2024, the net operating revenues related to the golf and related operations represented approximately 47 % and 41 %, respectively of Avalon’s total consolidated net operating revenues.

For the three months ended September 30, 2025 and 2024, the net operating revenues related to the golf and related operations represented approximately 50 % and 53 %, respectively, of Avalon’s total consolidated net operating revenues.

For both of the nine months ended September 30, 2025 and 2024, the net operating revenues related to the golf and related operations represented approximately 48 % and 45 %, respectively of Avalon’s total consolidated net operating revenues.

For both the nine months ended September 30, 2025 and 2024, no one customer individually accounted for 10% or more of Avalon’s golf and related operations segment revenues.

For Avalon’s golf and related operations, the Avalon Golf and Country Club offers membership packages for use of the country club facilities and its related amenities.

19 unchanged sentences

Amounts paid in advance, such as deposits on overnight lodging or for banquet or conferences facilities, are recorded as a liability until the goods or services are provided to the customer (see Contract Liabilities below).

The following table presents our net operating revenues disaggregated by revenue source for the three and six months ended June 30, 2025 and 2024 (in thousands).

The following table presents our net operating revenues disaggregated by revenue source for the three and nine months ended September 30, 2025 and 2024 (in thousands).

Sales and other taxes are excluded from revenues.

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Waste management and brokerage services

14 unchanged sentences

The amounts due are stated at their net realizable value.

At both June 30, 2025 and December 31, 2024, accounts receivable, net, related to our waste management services segment was $ 7.5 million, respectively.

At June 30, 2025, no one customer accounted for more than 10% of the waste management services segment’s receivables or 10% of the consolidated receivables.

At December 31, 2024 one customer accounted for 14 % of the waste management service’s segment and 12 % consolidated net receivables.

Accounts receivable, net, related to our golf and related operations segment were approximately $ 2.4 million and $ 1.1 million at June 30, 2025 and December 31, 2024, respectively.

No one customer of the golf and related operations segment accounted for 10% or more of Avalon’s golf and related operations segment or consolidated net receivables at June 30, 2025 or December 31, 2024.

At September 30, 2025 and December 31, 2024, accounts receivable, net, related to our waste management services segment were approximately $ 10.6 million and $ 7.5 million, respectively.

At September 30, 2025, one customer accounted for 22 % of total consolidated receivables and 26 % of the waste management services segment’s receivables.

At December 31, 2024 one customer accounted for 12 % consolidated receivables and 14 % of the waste management service’s segment’s receivables.

Accounts receivable, net, related to our golf and related operations segment were approximately $ 1.9 million and $ 1.1 million at September 30, 2025 and December 31, 2024, respectively.

No one customer of the golf and related operations segment accounted for more than 10% of consolidated receivables or more than 10% of Avalon’s golf and related operations segment at September 30, 2025 or December 31, 2024.

The Company maintains an allowance for credit losses to provide for the estimated amount of receivables that will not be collected.

3 unchanged sentences

Payments subsequently received on such receivables are credited to the allowance for credit losses, or to income, as appropriate under the circumstances.

Allowance for credit losses was approximately $ 0.3 million at both June 30, 2025 and December 31, 2024.

The following table presents changes in our allowance for credit losses during the three and six months ended June 30, 2025 and 2024 (in thousands):

Allowance for credit losses was approximately $ 0.3 million at both September 30, 2025 and December 31, 2024.

The following table presents changes in our allowance for credit losses during the three and nine months ended September 30, 2025 and 2024 (in thousands):

Beginning of Period

1 unchanged sentence

Allowance for credit losses

Three months ended June 30, 2025

Three months ended June 30, 2024

Six months ended June 30, 2025

Six months ended June 30, 2024

Three months ended September 30, 2025

Three months ended September 30, 2024

Nine months ended September 30, 2025

Nine months ended September 30, 2024

Contract Assets

2 unchanged sentences

Contract assets related to unbilled membership dues are classified as current as revenue related to such agreements is recognized within the annual membership period.

Unbilled membership receivables in our Condensed Consolidated Balance Sheets were approximately $ 1.0 million at June 30, 2025 and $ 0.6 million at December 31, 2024.

The following table presents changes in our contract assets during the three and six months ended June 30, 2025 and 2024 (in thousands):

Unbilled membership receivables in our Condensed Consolidated Balance Sheets were approximately $ 0.8 million at September 30, 2025 and $ 0.6 million at December 31, 2024.

The following table presents changes in our contract assets during the three and nine months ended September 30, 2025 and 2024 (in thousands):

Beginning of Period

2 unchanged sentences

Unbilled membership dues receivable

Three months ended June 30, 2025

Three months ended June 30, 2024

Six months ended June 30, 2025

Six months ended June 30, 2024

Three months ended September 30, 2025

Three months ended September 30, 2024

Nine months ended September 30, 2025

Nine months ended September 30, 2024

Contract Liabilities

2 unchanged sentences

We classify deferred membership dues revenue as current based on the timing of when we expect to recognize revenue for the membership commitment based on the Company satisfying the stand ready performance obligation throughout the annual membership period.

The unrecognized or deferred revenues related to membership dues in our Condensed Consolidated Balance Sheets were approximately $ 5.7 million at June 30, 2025 and $ 3.5 million at December 31, 2024, respectively.

The unrecognized or deferred revenues related to membership dues in our Condensed Consolidated Balance Sheets were approximately $ 4.6 million at September 30, 2025 and $ 3.5 million at December 31, 2024, respectively.

Customer advance deposits are recorded as a liability until the goods or services are provided to the customer.

1 unchanged sentence

The unrecognized revenues related to customer advance deposits are recorded in “Other liabilities and accrued expenses” in our Condensed Consolidated Balance Sheets.

Customer advance deposits were approximately $ 1.6 million at both June 30, 2025 and at December 31, 2024.

The following table presents changes in our contract liabilities during the three and six months ended June 30, 2025 and 2024 (in thousands):

Customer advance deposits were approximately $ 1.5 million at September 30, 2025 and $ 1.6 million at December 31, 2024.

The following table presents changes in our contract liabilities during the three and nine months ended September 30, 2025 and 2024 (in thousands):

Beginning of Period

2 unchanged sentences

Deferred membership dues revenue

Three months ended June 30, 2025

Three months ended June 30, 2024

Six months ended June 30, 2025

Six months ended June 30, 2024

Three months ended September 30, 2025

Three months ended September 30, 2024

Nine months ended September 30, 2025

Nine months ended September 30, 2024

Customer advance deposits

Three months ended June 30, 2025

Three months ended June 30, 2024

Six months ended June 30, 2025

Six months ended June 30, 2024

Three months ended September 30, 2025

Three months ended September 30, 2024

Nine months ended September 30, 2025

Nine months ended September 30, 2024

Property and Equipment

5 unchanged sentences

The cost of assets retired or otherwise disposed of and the related accumulated depreciation is eliminated from the accounts in the year of disposal.

Property and equipment at June 30, 2025 and December 31, 2024 consists of the following (in thousands):

Property and equipment at September 30, 2025 and December 31, 2024 consists of the following (in thousands):

September 30,

Land and land improvements

5 unchanged sentences

Property and equipment, net

At June 30, 2025, the Company did not have any significant fixed contractual commitments for construction projects.

At September 30, 2025, the Company did not have any significant fixed contractual commitments for construction projects.

Avalon reviews the carrying value of its long-lived assets whenever events or changes in circumstances indicate that its carrying amount may not be recoverable.

3 unchanged sentences

or if quoted market prices are not available, Avalon would discount the expected estimated future cash flows.

During the first six months of 2025 and 2024, no triggering events were present.

During the first nine months of 2025 and 2024, no triggering events were present.

Operating Leases

1 unchanged sentence

Our operating leases have remaining lease terms ranging from less than 1 year to 4.0 years.

The weighted average remaining lease term on operating leases was approximately 3.1 years and 4.0 years at June 30, 2025 and December 31, 2024, respectively.

During the first six months of both 2025 and 2024 the Company did not record any new operating lease right-of-use assets or corresponding obligations under operating leases.

Leased property and associated obligations under operating leases at June 30, 2025 and December 31, 2024 consists of the following (in thousands):

The weighted average remaining lease term on operating leases was approximately 2.7 years and 4.0 years at September 30, 2025 and December 31, 2024, respectively.

During the first nine months of 2025, the Company did not record any new operating lease right-of-use assets or corresponding obligations under operating leases.

During the first nine months of 2024, the Company entered into a new operating lease agreement for golf carts and GPS equipment.

During the first nine months of 2024, the Company recorded operating lease right-of-use assets and corresponding obligations under the operating leases of approximately $ 684,000 .

Leased property and associated obligations under operating leases at September 30, 2025 and December 31, 2024 consists of the following (in thousands):

September 30,

Operating lease right-of-use assets

2 unchanged sentences

Total obligations under operating leases

The weighted average discount rate on operating leases was 6.7 % and 6.6 % at June 30, 2025 and December 31, 2024.

The weighted average discount rate on operating leases was 6.7 % and 6.6 % at September 30, 2025 and December 31, 2024, respectively.

Finance Leases

4 unchanged sentences

Based upon the amount of leasehold improvements already made, Avalon expects to exercise all its remaining renewal options.

At June 30, 2025 there were approximately 28.3 years remaining on the golf course and related facilities finance lease.

At September 30, 2025 there were approximately 28.1 years remaining on the golf course and related facilities finance lease.

At December 31, 2024 there were approximately 28.8 years remaining on the golf course and related facilities finance lease.

The net asset value of finance leases, excluding leasehold improvements was $ 1.2 million and $ 0.8 million at June 30, 2025 and December 31, 2024, respectively.

The net asset value of finance leases, excluding leasehold improvements was $ 1.6 million and $ 0.8 million at September 30, 2025 and December 31, 2024, respectively.

In addition, the Company also entered into lease agreements for a vehicle, golf course maintenance equipment and the captive landfill operations entered into lease agreements for equipment which were determined to be finance leases.

At June 30, 2025, the vehicles, golf course maintenance equipment and restaurant equipment and the landfill operations equipment have remaining lease terms ranging from less than 1 year to 4.5 years.

The weighted average remaining lease term on the vehicles and equipment leases was approximately 3.8 years at both June 30, 2025 and December 31, 2024.

Leased property and associated obligations under finance leases at June 30, 2025 and December 31, 2024 consists of the following (in thousands):

At September 30, 2024, the vehicles, golf course maintenance and restaurant equipment and the landfill operations equipment have remaining lease terms ranging from less than 1 year to 4.9 years.

The weighted average remaining lease term on the vehicles and equipment leases was approximately 4.0 and 3.8 years at September 30, 2025 and December 31, 2024.

Leased property and associated obligations under finance leases at September 30, 2025 and December 31, 2024 consists of the following (in thousands):

September 30,

Leased property under finance leases

Less accumulated amortization

Leased property under finace leases, net

Leased property under finance leases, net

Current portion of obligations under finance leases

1 unchanged sentence

Total obligations under finance leases

The weighted average discount rate on finance leases was 7.2 % at June 30, 2025 and 7.8 % at December 31, 2024.

For the three and six months ended June 30, 2025 and 2024, components of lease expense were as follows (in thousands):

The weighted average discount rate on finance leases was 6.7 % at September 30, 2025 and 7.8 % at December 31, 2024.

For the three and nine months ended September 30, 2025 and 2024, components of lease expense were as follows (in thousands):

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Operating lease cost:

4 unchanged sentences

Total finance lease cost

For the twelve months ending June 30, future commitments under long-term, operating and finance leases are as follows (in thousands):

For the twelve months ending September 30, future commitments under long-term, operating and finance leases are as follows (in thousands):

Total lease payments

2 unchanged sentences

Long-term portion of obligations under leases

Basic and Diluted Net Income (Loss) per Share

Basic net income (loss) per share attributable to Avalon Holdings Corporation common shareholders is computed by dividing the net income (loss) by the weighted average number of common shares outstanding.

For both the three and six months ended June 30, 2025 and 2024, the weighted average number of common shares outstanding was 3,899,431 .

Diluted net loss per share attributable to Avalon Holdings Corporation common shareholders is computed by dividing net loss attributable to Avalon Holdings Corporation common shareholders by the weighted average number of common shares outstanding plus any weighted common equivalent shares determined to be outstanding during the period using the treasury method.

Basic and Diluted Net Income per Share

Basic net income per share attributable to Avalon Holdings Corporation common shareholders is computed by dividing the net income by the weighted average number of common shares outstanding.

For both the three and nine months ended September 30, 2025 and 2024, the weighted average number of common shares outstanding was 3,899,431 .

Diluted net income per share attributable to Avalon Holdings Corporation common shareholders is computed by dividing net income attributable to Avalon Holdings Corporation common shareholders by the weighted average number of common shares outstanding plus any weighted common equivalent shares determined to be outstanding during the period using the treasury method.

Weighted common equivalent shares, if any, included in the calculation are related to stock options granted by Avalon where the weighted average market price of Avalon’s common stock for the period presented is greater than the option exercise price of the stock option.

For the both the three and six months ended June 30, 2025 and 2024 there were no outstanding options.

For the both the three and nine months ended September 30, 2025 and 2024 there were no outstanding options.

Therefore, no weighted common equivalent shares are included in the calculation, thus, no dilution.

4 unchanged sentences

The remaining proceeds of approximately $ 10.4 million were deposited into a project fund account for which those proceeds are to fund future costs of renovating and expanding both The Grand Resort and Avalon Field Club at New Castle.

The balance of “Restricted Cash” is $ 9.0 million at both June 30, 2025 and December 31, 2024, respectively, and presented in the Consolidated Balance Sheets.

The balance of “Restricted Cash” is $ 8.7 million and $ 9.0 million at September 30, 2025 and December 31, 2024, respectively, and presented in the Consolidated Balance Sheets.

The monies are earning nominal interest.

10 unchanged sentences

The 2022 Term Loan also contains other nonfinancial covenants, customary representations, warranties and events of default.

Avalon was in compliance with the 2022 Term Loan Agreement covenants at June 30, 2025 and December 31, 2024.

Avalon was in compliance with the 2022 Term Loan Agreement covenants at September 30, 2025 and December 31, 2024.

The Company capitalized approximately $ 0.6 million of debt issuance costs in connection with the 2022 Term Loan Agreement in accordance with ASC Subtopic 470-50, Debt-Modifications and Extinguishments .

5 unchanged sentences

Under the Line of Credit Agreement, borrowings in excess of $1.0 million are subject to a borrowing base which is calculated based off a specific level of eligible accounts receivable of the waste management business as defined in the agreement.

At June 30, 2025 and December 31, 2024, approximately $ 3.2 million was outstanding under the Line of Credit Agreement.

At June 30, 2025 and December 31, 2024, approximately $ 1.8 million was available under the Line of Credit Agreement.

At September 30, 2025 and December 31, 2024, approximately $ 3.2 million was outstanding under the Line of Credit Agreement.

At September 30, 2025 and December 31, 2024, approximately $ 1.8 million was available under the Line of Credit Agreement.

Outstanding borrowings under the Line of Credit Agreement bear interest at Prime Rate plus .25 %.

At June 30, 2025, the interest rate on the Line of Credit Agreement was 7.75 %.

At September 30, 2025, the interest rate on the Line of Credit Agreement was 7.50 %.

Borrowings under the Line of Credit Agreement are secured by certain business assets of the Company including accounts receivable, inventory and equipment.

1 unchanged sentence

The Line of Credit Agreement also contains other nonfinancial covenants, customary representations, warranties and events of default.

Avalon was in compliance with the Line of Credit Agreements covenants at June 30, 2025 and December 31, 2024.

During the six months ended June 30, 2025 and 2024, the weighted average interest rate on outstanding borrowings was 6.17 % and 6.27 %, respectively.

Obligations under the Company’s debt agreements at June 30, 2025 and December 31, 2024 consist of the following (in thousands):

June 30, 2025

Avalon was in compliance with the Line of Credit Agreements covenants at September 30, 2025 and December 31, 2024.

During the nine months ended September 30, 2025 and 2024, the weighted average interest rate on outstanding borrowings was 6.17 % and 6.26 %, respectively.

Obligations under the Company’s debt agreements at September 30, 2025 and December 31, 2024 consist of the following (in thousands):

September 30, 2025

Debt Issuance Costs

7 unchanged sentences

Long-term debt

For the twelve months ending June 30, future maturities of long-term debt are as follows (in thousands):

During the three months ended June 30, 2025, net income attributable to Avalon Holdings Corporation shareholders was $ 0.3 million compared to net income attributable to Avalon Holdings Corporation shareholders of $ 1.0 million during the three months ending June 30, 2024.

During the six months ended June 30, 2025, a net loss attributable to Avalon Holdings Corporation shareholders was $ 1.2 million compared to a net loss attributable to Avalon Holdings Corporation shareholders of $ 25,000 during the six months ended June 30, 2024.

Avalon recorded a state income tax provision in both the three and six month periods ended June 30, 2025 and 2024, which was related entirely to the waste management and brokerage operations.

For the twelve months ending September 30, future maturities of long-term debt and the line of credit are as follows (in thousands):

During the three months ended September 30, 2025, net income attributable to Avalon Holdings Corporation shareholders was $ 1.9 million compared to net income attributable to Avalon Holdings Corporation shareholders of $ 1.8 million during the three months ending September 30, 2024.

During the nine months ended September 30, 2025, net income attributable to Avalon Holdings Corporation shareholders was $ 0.7 million compared to a net income attributable to Avalon Holdings Corporation shareholders of $ 1.8 million during the nine months ended September 30, 2024.

Avalon recorded a state income tax provision in both the three and nine month periods ended September 30, 2025 and 2024, which was related entirely to the waste management and brokerage operations.

Due to the recording of a full valuation allowance against the Company’s federal and state net deferred tax assets, the overall effective tax rate in both periods reflects taxes owed in certain U.S state jurisdictions.

Avalon’s income tax on the income (loss) before taxes was offset by a change in the valuation allowance.

Avalon’s income tax on the income before taxes was offset by a change in the valuation allowance.

A valuation allowance is provided when it is more likely than not that deferred tax assets relating to certain federal and state loss carryforwards will not be realized.

2 unchanged sentences

The OBBBA contains significant tax law changes with various effective dates after its enactment date.

The Company does not expect the tax law changes will have a material impact on its financial position, results of operations or financial disclosure.

The Company accounted for the tax effects of the change in tax law in the period of enactment, which is the third quarter of calendar year 2025.

The net impact of these tax law changes was not material to the consolidated financial statements.

Long-Term Incentive Plan

26 unchanged sentences

Additionally, all remaining shares previously granted expired.

At June 30, 2025 and 2024 there are no outstanding options.

At September 30, 2025 and 2024 there are no outstanding options.

The stock options vest and become exercisable based upon achieving two critical metrics as follows:

15 unchanged sentences

96 months after Grant Dates

There were no compensation costs for the three and six months ending June 30, 2025 and 2024.

As of June 30, 2025, there were no unrecognized compensation costs related to non-vested share-based compensation arrangements granted under the Plan.

Legal Matters

11 unchanged sentences

Avalon does not have operations located outside the United States and, accordingly, geographical segment information is not presented.

For the three and six months ending June 30, 2025 and 2024, no one customer accounted for more than 10% of the consolidated net operating revenues to external customers.

For the three and nine months ending September 30, 2025 and 2024, no one customer accounted for more than 10% of the consolidated net operating revenues to external customers.

The accounting policies of the segments are consistent with those described for the consolidated financial statements in the summary of significant accounting policies included in Avalon’s 2024 Annual Report to Shareholders.

6 unchanged sentences

Business segment information including the reconciliation of segment income (loss) to consolidated income (loss) before taxes is as follows (in thousands):

Three months ending June 30, 2025

Three months ending September 30, 2025

Waste Management Services

Golf and Related Operations

Income (loss) before income taxes:

4 unchanged sentences

Income (loss) before taxes

Three months ending June 30, 2024

Three months ending September 30, 2024

Waste Management Services

Golf and Related Operations

Income (loss) before income taxes:

4 unchanged sentences

Income (loss) before taxes

Six months ending June 30, 2025

Nine months ending September 30, 2025

Waste Management Services

Golf and Related Operations

Income (loss) before income taxes:

4 unchanged sentences

Income (loss) before taxes

Six months ending June 30, 2024

Nine months ending September 30, 2024

Waste Management Services

Golf and Related Operations

Income (loss) before income taxes:

4 unchanged sentences

Income (loss) before taxes

September 30,

Identifiable assets:

2 unchanged sentences

Elimination of intersegment receivables

In comparing total assets at June 30, 2025 with those at December 31, 2024, the increase in the total assets of the waste management services segment of approximately $ 1.5 million was primarily a result intersegment transactions, which are eliminated in consolidation.

The increase in total assets of the golf and related operations segment of $ 1.1 million was primarily due to an increase in accounts receivable, inventory and capital expenditures associated with The Grand Resort, partially offset by current year depreciation on property and equipment.

The increase in corporate total assets of approximately $ 1.3 million was primarily due to an increase in both operating cash and intersegment transactions, which are eliminated in consolidation.

In comparing total assets at September 30, 2025 with those at December 31, 2024, the increase in the total assets of approximately $4.5 million is attributed to an increase in cash and cash equivalents coupled with an increase in accounts receivable generated from improved business activity in both the waste management services and golf and related operations segments, partially offset by a decrease in net property and equipment associated with the golf and related operations segment.

Certain Relationships and Related Transactions

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As a result of a private placement offering, Avalon is not the majority owner of AWMS Holdings, LLC.

At June 30, 2025 and December 31, 2024, respectively, Avalon owns approximately 47 % of AWMS Holdings, LLC.

At September 30, 2025 and December 31, 2024, respectively, Avalon owns approximately 47 % of AWMS Holdings, LLC.

In accordance with ASC 810-10 and related amendment , due to the managerial control of American Water Solutions, LLC, AWMS Holdings, LLC is a VIE, and the financial statements of AWMS Holdings, LLC and subsidiaries are included in Avalon’s consolidated financial statements.

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The amount of net loss attributable to the noncontrolling interest is recorded in “net loss attributable to noncontrolling interest” in our Condensed Consolidated Statements of Operations.

During the three months ended June 30, 2025 and 2024, net loss attributable to the noncontrolling interest in AWMS Holdings, LLC was $22,000 and $11,000, respectively.

During the six months ended June 30, 2025 and 2024, net loss attributable to the noncontrolling interest in AWMS Holdings, LLC was $90,000 and $37,000, respectively.

During both the three months ended September 30, 2025 and 2024, net loss attributable to the noncontrolling interest in AWMS Holdings, LLC was $36,000 and $11,000, respectively.

During the nine months ended September 30, 2025 and 2024, net loss attributable to the noncontrolling interest in AWMS Holdings, LLC was $126,000 and $49,000, respectively.

Avalon Med Spa, LLC

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An outside director of Avalon, who qualified as an accredited investor, invested less than 10 % of the total investment in Avalon Med Spa, LLC.

Avalon is the majority owner of Avalon Med Spa, LLC owning 50.1 % of the company at both June 30, 2025 and December 31, 2024.

Avalon is the majority owner of Avalon Med Spa, LLC owning 50.1 % of the company at both September 30, 2025 and December 31, 2024.

In accordance with ASC 810-10 and related amendment , Avalon Med Spa, LLC is a VIE, and the financial statements of Avalon Med Spa, LLC are included in Avalon’s consolidated financial statements.

1 unchanged sentence

The amount of net loss attributable to the noncontrolling interest is recorded in “net loss attributable to noncontrolling interest” in our Condensed Consolidated Statements of Operations.

During the three months ended June 30, 2025 and 2024, net loss attributable to the noncontrolling interest in Avalon Med Spa, LLC was approximately $ 4,000 and $ 36,000 , respectively.

During the six months ended June 30, 2025 and 2024, net loss attributable to the noncontrolling interest in Avalon Med Spa, LLC was approximately $ 67,000 and $ 85,000 , respectively.

During the three months ended September 30, 2025 and 2024, net loss attributable to the noncontrolling interest in Avalon Med Spa, LLC was approximately $ 51,000 and $ 71,000 , respectively.

During the nine months ended September 30, 2025 and 2024, net loss attributable to the noncontrolling interest in Avalon Med Spa, LLC was approximately $ 118,000 and $ 155,000 , respectively.

Avalon Dermatology, LLC

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The amount of net loss attributable to the noncontrolling interest is recorded in “net loss attributable to noncontrolling interest” in our Condensed Consolidated Statements of Operations.

During the three months ended June 30, 2025 and 2024, net loss attributable to the noncontrolling interest in Avalon Dermatology, LLC was approximately $ 37,000 and $ 24,000 , respectively.

During the six months ended June 30, 2025 and 2024, net loss attributable to the noncontrolling interest in Avalon Dermatology, LLC was approximately $ 93,000 and $ 24,000 , respectively

During the three months ended September 30, 2025 and 2024, net loss attributable to the noncontrolling interest in Avalon Dermatology, LLC was approximately $ 26,000 and $ 28,000 , respectively.

During the nine months ended September 30, 2025 and 2024, net loss attributable to the noncontrolling interest in Avalon Dermatology, LLC was approximately $ 119,000 and $ 52,000 , respectively

Injection Wells Suspension

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The Chief of the Division also cross-appealed the Appellate Court’s decision to the Supreme Court.

Oral arguments are scheduled for August 20, 2025.

Oral arguments were held on August 20, 2025 and the Company is awaiting a decision from the high court.

On May 24, 2021, the Company received Chief’s Orders from the Division vacating the September 3, 2014 suspension orders for AWMS #2 and setting conditions for restart of that well.

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On June 30, 2022, the Oil and Gas Commission rendered their decision for the Division in this matter, once again deferring to the Division in their decision.

The Company appealed the decision to the Franklin County Ohio Court of Common Pleas on August 3, 2022.

The Company instructed its counsel to appeal the decision to the Franklin County Ohio Court of Common Please no later than August 3, 2022.

The Company’s former counsel did not file a copy of notice to appeal to the Franklin County Court within 30-days of the Commission’s decision.

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On May 23, 2025, the Appellate Court affirmed the dismissal.

On July 2, 2025, the Company appealed the Appellate Court’s decision to the Supreme Court of Ohio, and awaits proceedings.

On July 2, 2025, the Company appealed the Appellate Court’s decision to the Supreme Court of Ohio.

The Supreme Court declined to hear the appeal.

The Company filed a complaint in the Trumbull County Court of Common Pleas on August 4, 2025 seeking damages from the malpractice of the Company’s former legal counsel.

MANAGEMENT ’ S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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Liquidity and Capital Resources

For the six months ended June 30, 2025, Avalon utilized existing cash and cash provided by operations to meet operating needs, fund capital expenditures and make required monthly payments on our term loan facility.

For the nine months ended September 30, 2025, Avalon utilized existing cash and cash provided by operations to meet operating needs, fund capital expenditures and make required monthly payments on our term loan facility.

Cash in our project fund was also utilized to fund capital expenditures.

2022 Term Loan Agreement

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The remaining proceeds of approximately $10.4 million were deposited into a project fund account for which those proceeds are to fund future costs of renovating and expanding both The Grand Resort and Avalon Field Club at New Castle.

The balance of “Restricted Cash” is $9.0 million at both June 30, 2025 and December 31, 2024, respectively, and presented in the Consolidated Balance Sheets.

The balance of “Restricted Cash” is $8.7 million and $9.0 million at September 30, 2025 and December 31, 2024, respectively, and presented in the Consolidated Balance Sheets.

The monies are earning nominal interest.

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The 2022 Term Loan also contains other nonfinancial covenants, customary representations, warranties and events of default.

Avalon was in compliance with the 2022 Term Loan Agreement covenants at June 30, 2025 and December 31, 2024.

Avalon was in compliance with the 2022 Term Loan Agreement covenants at September 30, 2025 and December 31, 2024.

The Company capitalized approximately $0.6 million of debt issuance costs in connection with the 2022 Term Loan Agreement in accordance with ASC Subtopic 470-50, Debt-Modifications and Extinguishments .

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At June 30, 2025 and December 31, 2024, approximately $3.2 million was outstanding under the Line of Credit Agreement.

At June 30, 2025 and December 31, 2024, approximately $1.8 million was available under the Line of Credit Agreement.

At September 30, 2025 and December 31, 2024, approximately $3.2 million was outstanding under the Line of Credit Agreement.

At September 30, 2025 and December 31, 2024, approximately $1.8 million was available under the Line of Credit Agreement.

Outstanding borrowings under the Line of Credit Agreement bear interest at Prime Rate plus .25%.

At June 30, 2025, the interest rate on the Line of Credit Agreement was 7.75%.

At September 30, 2025, the interest rate on the Line of Credit Agreement was 7.50%.

Borrowings under the Line of Credit Agreement are secured by certain business assets of the Company including accounts receivable, inventory and equipment.

1 unchanged sentence

The Line of Credit Agreement also contains other nonfinancial covenants, customary representations, warranties and events of default.

Avalon was in compliance with the Line of Credit Agreements covenants at June 30, 2025 and December 31, 2024.

During the six months ended June 30, 2025 and 2024, the weighted average interest rate on outstanding borrowings was 6.17% and 6.27%, respectively.

Avalon was in compliance with the Line of Credit Agreements covenants at September 30, 2025 and December 31, 2024.

During the nine months ended September 30, 2025 and 2024, the weighted average interest rate on outstanding borrowings was 6.17% and 6.26%, respectively.

Squaw Creek Country Club Lease Agreement

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Capital Expenditures

During both the six months ended June 30, 2025 and 2024, Avalon incurred and paid to vendors capital expenditures in the amount of $0.7 million.

For the six months ended June 30, 2025 expenditures primarily related to the remodeling of The Grand Resort.

For the six months ended June 30, 2024 expenditures primarily relate to the continued renovation of The Grand Resort and Avalon Dermatology, LLC.

In 2025 and 2024, certain hotel rooms at The Grant Resort and other areas of the facility were in the process of being remodeled.

During the nine months ended September 30, 2025, Avalon incurred capital expenditures of $1.4 million of which $1.3 million of such expenditures was paid to vendors during the period.

During the nine months ended September 30, 2024, Avalon incurred and paid to vendors capital expenditures in the amount of $1.7 million.

For the nine months ended September 30, 2024 expenditures primarily related to the continued remodeling of The Grand Resort.

For the nine months ended September 30, 2024 expenditures primarily related to The Grand Resort and Avalon Dermatology, LLC.

In 2025, all hotel rooms at The Grant Resort and other areas of the facility were in the process of being remodeled.

Avalon’s aggregate capital expenditures in 2025 are expected to be in the range of $1.5 million to $2.5 million.

Capital expenditures principally relate to hotel room remodeling at The Grand Resort, building improvements and equipment purchases.

Capital expenditures primarily relate to hotel room remodeling at The Grand Resort, parking lot paving and resealing along with other building improvements and equipment purchases.

Such capital expenditures are expected to be funded with cash from our project fund account and cash generated from operations.

Working Capital

At June 30, 2025 and December 31, 2024, there was a working capital deficit of approximately $1.7 million and $0.9 million, respectively.

Working capital was negatively impacted by an increase in deferred membership dues revenue, accounts payable and accrued payroll.

The negative impact was partially offset by an increase in cash, accounts receivable, unbilled membership dues receivable and inventory.

Accounts receivable increased to $9.9 million at June 30, 2025 compared with $8.6 million at December 31, 2024.

Accounts receivable related to the golf and related operations segment increased approximately $1.3 million at June 30, 2025 compared to December 31, 2024 due to the associated timing of annual membership renewals.

Accounts receivable related to our waste management services segment remained the same at June 30, 2025 compared with December 31, 2024.

Unbilled membership dues receivable was approximately $1.0 million at June 30, 2025 compared to $0.6 million at December 31, 2024.

At September 30, 2025 working capital was approximately $0.3 million.

At December 31, 2024, there was a working capital deficit of approximately $0.9 million.

Working capital was positively impacted by an increase in cash and cash equivalents along with an increase in accounts receivable.

The positive impact was partially offset by increases in accounts payable, deferred membership dues and accrued payroll and other compensation.

Accounts receivable increased to $12.5 million at September 30, 2025 compared with $8.6 million at December 31, 2024.

Accounts receivable related to the golf and related operations segment increased approximately $0.8 million at September 30, 2025 compared to December 31, 2024 due to the associated timing of annual membership renewals.

Additionally, accounts receivable related to our waste management services segment increased by approximately $3.1 million at September 30, 2025 compared with December 31, 2024 as a result of an increase in net operating revenues in the third quarter of 2025 compared to the fourth quarter of 2024.

Unbilled membership dues receivable was approximately $0.8 million at September 30, 2025 compared to $0.6 million at December 31, 2024.

The increase was primarily due to the timing of annual membership renewals related to the Avalon Golf and Country Club and associated monthly billing over the course of the annual agreement.

Inventory was approximately $1.8 million at June 30, 2025 compared to $1.6 million at December 31, 2024.

Inventory was approximately $1.7 million at September 30, 2025 compared to $1.6 million at December 31, 2024.

The increase is related to merchandise, food and beverage inventory as a result of the increase in business operations for our golf and related operations segment.

Accounts payable was approximately $7.7 million at June 30, 2025 compared to $7.1 million at December 31, 2024.

Accounts payable related to our golf and related operations increased $1.1 million at June 30, 2025 compared to December 31, 2024, due to an increase in golf operations along with associated timing of vendor payments in the ordinary course of business.

Accounts payable related to the waste management segment decreased $0.5 million due to a decrease in business along with the associated timing of vendor payments in the ordinary course of business.

Deferred revenue relating to membership dues was approximately $5.7 million at June 30, 2025 compared to $3.5 million at December 31, 2024.

Accounts payable was approximately $9.6 million at September 30, 2025 compared to $7.1 million at December 31, 2024.

Approximately $2.0 million of the increase in accounts payable between periods was due to the waste management segment.

Accounts payable related to our waste management segment increased as a result of the associated timing of vendor payments in the ordinary course of business.

Accounts payable related to our golf and related operations increased $0.5 million at September 30, 2025 compared to December 31, 2024, due to associated timing of vendor payments in the ordinary course of business.

Deferred revenue relating to membership dues was approximately $4.6 million at September 30, 2025 compared to $3.5 million at December 31, 2024.

The increase in deferred revenues was primarily due to the associated timing of annual membership renewals.

Accrued payroll and other compensation was approximately $1.5 million at June 30, 2025 compared to $1.1 million at December 31, 2024.

The increase is primarily due to the associated timing of employee payroll payments in the ordinary course of business related to our golf and related operations.

Accrued payroll and other compensation was approximately $1.7 million at September 30, 2025 compared to $1.1 million at December 31, 2024.

The increase is primarily due to the associated timing of employee payroll payments in the ordinary course of business related to our waste management services segment.

Management believes that anticipated cash provided from future operations will be sufficient to meet operating requirements and make required monthly payments under our term loan facility.

32 unchanged sentences

The golf and related operations segment includes the operation and management of four golf courses and related country clubs and facilities, a hotel and its associated resort amenities and a multipurpose recreation center.

Performance in the second quarter of 2025 compared with the second quarter of 2024

Performance in the third quarter of 2025 compared with the third quarter of 2024

Overall Performance

Net operating revenues decreased to $20.3 million in the second quarter of 2025 compared with $23.1 million in the second quarter of 2024.

Net operating revenues of the waste management services segment were approximately $9.7 million in the second quarter of 2025 compared to $12.2 million in the second quarter of 2024.

The decrease in net operating revenues of the waste management services segment was primarily a result of a decrease event work projects during the second quarter of 2025 compared to the second quarter of 2024.

Net operating revenues of the golf and related operations segment were approximately $10.5 million in the second quarter of 2025 compared to $10.8 million in the second quarter of 2024.

The decrease in net operating revenues of the golf and related operations was a result of poor weather conditions which adversely affected both The Grand Resort and the country clubs during the second quarter of 2025 compared to the second quarter of 2024.

Total cost of operations related to the waste management services segment decreased to $7.5 million in the second quarter of 2025 compared with $9.5 million in the second quarter of 2024.

The decrease in the cost of operations between periods for the waste management services segment is primarily due to a decrease in net operating revenues as these costs vary directly with the associated revenues.

Total cost of operations related to the golf and related operations segment increased to $8.6 million in the second quarter of 2025 compared to $8.4 million in the second quarter of 2024.

The increase in costs is primarily a result of an increase in utility costs and overall operating expenditures compared to the prior period.

Depreciation and amortization expense was approximately $1.0 million in both the second quarter of 2025 and 2024, respectively.

Consolidated selling, general and administrative expenses were approximately $2.5 million in the second quarter of 2025 compared to $2.7 million in the second quarter of 2024.

The decrease was primarily a result of a decrease in certain earned employee incentives relating to our waste management services segment

Interest expense was approximately $0.5 million in both the second quarter of 2025 and 2024, respectively.

During the three months ended June 30, 2025 and 2024, the weighted average interest rate on outstanding borrowings was 6.17% and 6.26%, respectively.

Net income attributable to Avalon Holdings Corporation common shareholders was $0.3 million, or $0.07 per share, in the second quarter of 2025 compared with net income attributable to Avalon Holdings Corporation common shareholders of $1.0 million, or $0.24 per share, in the second quarter of 2024.

Avalon recorded a state income tax provision in both the second quarters of 2025 and 2024, which was related entirely to the waste management and brokerage operations.

Net operating revenues increased to $25.7 million in the third quarter of 2025 compared with $24.2 million in the third quarter of 2024.

Net operating revenues of the waste management services segment were approximately $12.9 million in the third quarter of 2025 compared to $11.5 million in the third quarter of 2024.

The increase in net operating revenues of the waste management services segment was mainly attributed to an increase in event work projects during the third quarter of 2025 compared to the third quarter of 2024.

Net operating revenues of the golf and related operations segment were approximately $12.8 million in both the third quarter of 2025 and 2024.

Total cost of operations related to the waste management services segment increased to $10.3 million in the third quarter of 2025 compared with $8.9 million in the third quarter of 2024.

The increase in the cost of operations between periods for the waste management services segment is primarily due to an increase in net operating revenues as these costs vary directly with the associated revenues.

Total cost of operations related to the golf and related operations segment increased to $9.4 million in the third quarter of 2025 compared to $9.3 million in the third quarter of 2024.

The increase in costs is primarily a result of an increase in employee related and utility costs compared to the prior period.

Depreciation and amortization expense was approximately $0.9 million in the third quarter of 2025 compared to $1.0 million in the third quarter of 2024.

The slight decrease is due to a lower depreciable basis compared to the prior period.

Consolidated selling, general and administrative expenses were approximately $2.8 million in the third quarter of 2025 compared to $2.7 million in the third quarter of 2024.

The slight increase was primarily a result of increases in certain earned employee incentives relating to our waste management services segment

Interest expense was approximately $0.5 million in both the third quarter of 2025 and 2024, respectively.

During the three months ended September 30, 2025 and 2024, the weighted average interest rate on outstanding borrowings was 6.17% and 6.23%, respectively.

Net income attributable to Avalon Holdings Corporation common shareholders was $1.9 million, or $0.49 per share, in the third quarter of 2025 compared with net income attributable to Avalon Holdings Corporation common shareholders of $1.8 million, or $0.47 per share, in the third quarter of 2024.

Avalon recorded a state income tax provision in both the third quarters of 2025 and 2024, which was related entirely to the waste management and brokerage operations.

Due to the recording of a full valuation allowance against the Company’s federal net deferred tax assets, the overall effective tax rate in both periods reflect taxes owed in certain U.S state jurisdictions.

Avalon’s income tax benefit on the loss before taxes was offset by a change in the valuation allowance.

Avalon’s income tax provision on the income before taxes was offset by a change in the valuation allowance.

A valuation allowance is provided when it is more likely than not that deferred tax assets relating to certain federal and state loss carryforwards will not be realized.

3 unchanged sentences

Waste Management Services Segment

The net operating revenues of the waste management services were approximately $9.7 million in the second quarter of 2025 compared with $12.2 million in the second quarter of 2024.

The net operating revenues of the waste management services were approximately $12.9 million in the third quarter of 2025 compared with $11.5 million in the third quarter of 2024.

The waste management services segment includes waste disposal brokerage and management services, captive landfill management operations and salt water injection well operations.

The net operating revenues of the waste disposal brokerage and management services business were approximately $8.9 million in the second quarter of 2025 compared to $11.4 million in the second quarter of 2024.

Continuous work in the waste disposal brokerage business increased by approximately $0.4 million between periods.

Net operating revenues related to continuous work were approximately $6.6 million in the second quarter of 2025 compared with $6.2 million in the second quarter of 2024.

In addition, event work net operating revenues related to multiple projects decreased by approximately $2.9 million during second quarter of 2025 when compared to second quarter of 2024.

The net operating revenues of the waste disposal brokerage and management services business were approximately $12.2 million in the third quarter of 2025 compared to $10.8 million in the third quarter of 2024.

Continuous work in the waste disposal brokerage business decreased by approximately $0.2 million between periods.

Net operating revenues related to continuous work were approximately $6.9 million in the third quarter of 2025 compared with $7.1 million in the third quarter of 2024.

Event work net operating revenues related to multiple projects increased by approximately $1.6 million during third quarter of 2025 when compared to third quarter of 2024.

Event work is defined as bid projects under contract that occurs on a one-time basis over a short period of time.

Such work can fluctuate significantly from period to period.

Event work net operating revenues were approximately $2.3 million in the second quarter of 2025 compared with $5.2 million in the second quarter of 2024.

The net operating revenues of the captive landfill management operations were approximately $0.8 million in both the second quarter of 2025 and 2024.

Event work net operating revenues were approximately $5.3 million in the third quarter of 2025 compared with $3.7 million in the third quarter of 2024.

The net operating revenues of the captive landfill management operations were approximately $0.7 million in the third quarter of both 2025 and 2024.

The net operating revenues of the captive landfill operations are almost entirely dependent upon the volume of waste generated by the owner of the landfill for whom Avalon manages the facility.

Costs of operations related to the waste management services segment were approximately $7.5 million in the second quarter of 2025 compared with $9.5 million in the second quarter of 2024.

The decrease in the cost of operations between periods for the waste management segment is primarily due to a decrease in net operating revenues as these costs vary directly with the associated revenues.

The overall gross margin percentage of the waste brokerage and management services business was approximately 23% in the second quarter of 2025 compared to 22% in the second quarter of 2024.

The increase in the overall gross margin percentage was primarily attributable to the higher gross profit generated from event work projects during second quarter of 2025.

Income before income taxes for the waste management services segment was approximately $1.0 million in the second quarter of 2025 compared to $1.3 million in the second quarter of 2024.

Income before income taxes of the waste brokerage and management services business was approximately $1.0 million in the second quarter of 2025 compared to $1.3 million in the second quarter of 2024.

The decrease in income before income taxes was primarily attributable to an decrease in net operating revenues during the second quarter of 2025 compared to the second quarter of 2024.

Income before income taxes of the captive landfill operations were approximately $0.1 million in both the second quarter of 2025 and 2024.

During both the second quarter of 2025 and 2024, the salt water injection wells incurred a loss before income taxes of less than $0.1 million primarily due to legal and professional costs incurred relating to Avalon’s appeal and mandamus processes.

Costs of operations related to the waste management services segment were approximately $10.3 million in the third quarter of 2025 compared with $8.9 million in the third quarter of 2024.

The increase in the cost of operations between periods for the waste management segment is primarily due to an increase in net operating revenues as these costs vary directly with the associated revenues.

The overall gross margin percentage of the waste brokerage and management services business was approximately 20% in the third quarter of 2025 compared to 22% in the third quarter of 2024.

The decrease in the overall gross margin percentage was primarily attributable to a lower gross profit generated from event work projects during third quarter of 2025.

Income before income taxes for the waste management services segment was approximately $1.3 million in the third quarter of 2025 compared to $1.2 million in the third quarter of 2024.

Income before income taxes of the waste brokerage and management services business was approximately $1.3 million in the third quarter of 2025 compared to approximately $1.2 million in the third quarter of 2024.

Income before income taxes of the captive landfill operations were approximately $0.1 million in both the third quarter of 2025 and 2024.

During both the third quarter of 2025 and 2024, the salt water injection wells incurred a loss before income taxes of less than $0.1 million primarily due to legal and professional costs incurred relating to Avalon’s appeal and mandamus processes.

Golf and Related Operations Segment

Net operating revenues of the golf and related operations segment were approximately $10.5 million in the second quarter of 2025 compared to $10.8 million in the second quarter of 2024.

Avalon’s golf and related operations segment consists of the operation and management of four golf courses and related country clubs which provide dining and banquet facilities, a hotel which provides lodging, dining, banquet and conference facilities and other resort related amenities and a multipurpose recreation center.

Food, beverage and merchandise sales were approximately $3.8 million in the second quarter of 2025 compared to $4.0 million in the second quarter of 2024.

Food, beverage and merchandise sales decreased between periods as a result of a decrease in business activity at both The Grand Resort and country clubs.

Other golf and related operation revenues was approximately $6.8 million in both the second quarter of 2025 and second quarter of 2024.

Membership dues revenue was approximately $1.8 million in both the second quarter of 2025 and 2024.

Net operating revenues related to room rental were approximately $2.0 million in the second quarter of 2025 compared to $2.1 million in the second quarter of 2024.

The decrease in room revenue was a result of lower occupancy when compared to the prior period.

Greens fees and associated cart rentals were approximately $1.1 million in the second quarter of 2025 compared to $1.2 million in the second quarter of 2024.

The decrease in green fees and associated cart rental was a result of fewer rounds played due to poor weather conditions in the second quarter of 2025 compared to the second quarter of 2024.

Other revenues consisting of athletic, fitness, salon dermatology and spa related activities were approximately $1.9 million in the second quarter of 2025 compared to $1.7 million in the second quarter of 2024.

Total cost of operations for the golf and related operations segment were $8.6 million in the second quarter of 2025 compared with $8.4 million in the second quarter of 2024.

Cost of food, beverage and merchandise was approximately $1.7 million in both the second quarter of 2025 and second quarter of 2024.

The cost of food, beverage and merchandise sales was approximately 46% of associated revenue in the second quarter of 2025 compared to 42% in the second quarter of 2024.

Golf and related operations operating costs increased to approximately $6.9 million in the second quarter of 2025 compared with $6.7 million in the second quarter of 2024.

The increase in operating costs between periods is primarily related to an increase in utility and operating costs in the second quarter of 2025 compared to the second quarter of 2024.

The golf and related operations recorded income before income taxes of $0.6 million in the second quarter of 2025 compared with income before income taxes of $1.0 million in the second quarter of 2024.

The change between periods was primarily a result of a decrease in business activity mainly attributed to adverse weather condition in the second quarter of 2025 compared to the second quarter of 2024.

Net operating revenues of the golf and related operations segment were approximately $12.8 million in both the third quarter of 2025 and 2024, respectively.

Avalon’s golf and related operations segment consists of the operation and management of four golf courses and related country clubs which provide dining and banquet facilities, a hotel, The Grand Resort, which provides lodging, dining, banquet and conference facilities and other resort related amenities along with a multipurpose recreation center.

Food, beverage and merchandise sales were approximately $4.6 million in both the third quarter of 2025 and in the third quarter of 2024.

Other golf and related operation revenues were approximately $8.2 million in both the third quarter of 2025 and 2024, respectively.

Membership dues revenue was approximately $1.8 million in both the third quarter of 2025 and 2024.

Net operating revenues related to room rental was approximately $2.9 million in the third quarter of 2025 compared to $2.8 million in the third quarter of 2024.

The increase in room revenue was a result of a slight increase in average room rates when compared to the prior period.

Greens fees and associated cart rentals were approximately $1.9 million the third quarter of 2025 compared to $1.8 million in the third quarter of 2024.

Other revenues consisting of athletic, fitness, salon and spa related activities were approximately $1.6 million in the third quarter of 2025 compared to $1.8 million in the third quarter of 2024.

The decrease between periods was primarily due to a decrease in salon and spa revenue.

Total cost of operations for the golf and related operations segment were $9.4 million in the third quarter of 2025 compared with $9.3 million in the third quarter of 2024.

Cost of food, beverage and merchandise was approximately $2.0 million in both the third quarter of 2025 and 2024.

The cost of food, beverage and merchandise sales was approximately 43% of associated revenue in the third quarter of 2025 compared to 44% in the third quarter of 2024.

Golf and related operations operating costs increased to approximately $7.4 million in the third quarter of 2025 compared with $7.3 million in the third quarter of 2024.

The slight increase in operating costs between periods is primarily related to an increase in employee related costs in the third quarter of 2025 compared to the third quarter of 2024.

The golf and related operations recorded income before income taxes of $1.9 million in both the third quarter of 2025 and 2024, respectively.

General Corporate Expenses

General corporate expenses were $0.9 million in both the second quarter of 2025 and second quarter of 2024.

The decrease is mainly attributed to lower corporate overhead compared to the prior period.

General corporate expenses were $0.9 million in both the third quarter of 2025 and 2024, respectively.

Interest Expense

Interest expense was approximately $0.5 million in both second quarter of 2025 and second quarter of 2024.

During the three months ended June 30, 2025 and 2024, the weighted average interest rate on outstanding borrowings was 6.17% and 6.26%, respectively.

Net income attributable to Avalon Holdings Corporation common shareholders was $0.3 million in the second quarter of 2025 compared to net income attributable to Avalon Holdings Corporation common shareholders of $1.0 million in the second quarter of 2024.

Avalon recorded a state income tax provision in both the second quarter of 2025 and 2024, which was related entirely to the waste management and brokerage operations.

Interest expense was approximately $0.5 million in both third quarter of 2025 and third quarter of 2024.

During the three months ended September 30, 2025 and 2024, the weighted average interest rate on outstanding borrowings was 6.17% and 6.23%, respectively.

Net income attributable to Avalon Holdings Corporation common shareholders was $1.9 million in the third quarter of 2025 compared to net income attributable to Avalon Holdings Corporation common shareholders of $1.8 million in the third quarter of 2024.

Avalon recorded a state income tax provision in both the third quarter of 2025 and 2024, which was related entirely to the waste management and brokerage operations.

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Avalon continues to maintain a valuation allowance against the majority of its deferred tax amounts until it is evident that the deferred tax asset will be utilized in the future.

Performance in the first six months of 2025 compared with the first six months of 2024

Performance in the first nine months of 2025 compared with the first nine months of 2024

Overall Performance

Net operating revenues decreased to $36.3 million in the first six months of 2025 compared with $41.9 million in the first six months of 2024.

Net operating revenues of the waste management services segment were approximately $19.4 million in the first six months of 2025 compared to $24.7 million in the first six months of 2024.

The decrease in net operating revenues of the waste management services segment was a primarily a result of a decrease in event work during the first six months of 2025 compared to the first six months of 2024.

Net operating revenues of the golf and related operations segment were approximately $16.9 million in the first six months of 2025 compared to $17.2 million in the first six months of 2024.

The decrease in net operating revenues of the golf and related operations was a result of poor weather conditions which adversely affected both The Grand Resort and the country clubs during the first six months of 2025 compared to the first six months of 2024.

Total cost of operations related to the waste management services segment decreased to $15.1 million in the first six months of 2025 compared with $19.4 million in the first six months of 2024.

Net operating revenues decreased to $62.1 million in the first nine months of 2025 compared with $66.2 million in the first nine months of 2024.

Net operating revenues of the waste management services segment were approximately $32.3 million in the first nine months of 2025 compared to $36.2 million in the first nine months of 2024.

The decrease in net operating revenues of the waste management services segment was a result of decreases in both event work projects and continuous work during the first nine months of 2025 compared to the first nine months of 2024.

Net operating revenues of the golf and related operations segment were approximately $29.7 million in the first nine months of 2025 compared to $30.0 million in the first nine months of 2024.

The decrease in net operating revenues of the golf and related operations was a result of a decrease in membership dues revenue coupled with a decrease in business activity at the country clubs.

Total cost of operations related to the waste management services segment decreased to $25.3 million in the first nine months of 2025 compared with $28.4 million in the first nine months of 2024.

Total cost of operations related to the golf and related operations segment increased to $14.7 million in the first six months of 2025 compared to $14.3 million in the first six months of 2024.

The increase in costs is primarily a result of an increase in utility costs and overall operating expenditures compared to the prior period.

Depreciation and amortization expense was approximately $1.9 million in the first six months of 2025 compared to $2.0 million in the first six months of 2024.

The decrease is due to the lower depreciable asset base compared to the prior period.

Consolidated selling, general and administrative expenses were approximately $5.0 million in the first six months of 2025 compared to $5.3 million in the first six months of 2024.

The decrease was primarily a result of a decrease in certain earned employee incentives relating to our waste management services segment

Interest expense was approximately $1.0 million in both the first six months of 2025 and the first six months of 2024.

During the six months ended June 30, 2025 and 2024, the weighted average interest rate on outstanding borrowings was 6.17% and 6.27%, respectively.

Net loss attributable to Avalon Holdings Corporation common shareholders was $1.2 million, or $0.31 per share, in the first six months of 2025 compared with a net loss attributable to Avalon Holdings Corporation common shareholders of $25,000, or $0.01 per share, in the first six months of 2024.

Total cost of operations related to the golf and related operations segment increased to $24.1 million in the first nine months of 2025 compared to $23.6 million in the first nine months of 2024.

The increase in operating costs between periods is primarily related to an increase in utility and operating costs in the first nine months of 2025 compared to the first nine months of 2024.

Depreciation and amortization expense was approximately $2.9 million in the first nine months of 2025 compared to $3.0 million in the first nine months of 2024.

The decrease is due to a lower depreciable asset base compared to the prior period.

Consolidated selling, general and administrative expenses were approximately $7.8 million in the first nine months of 2025 compared to $8.0 million in the first nine months of 2024.

The decrease is mainly attributed to a decrease in incentive compensation for salesman of waste management services segment.

Interest expense was approximately $1.5 million in both the first nine months of 2025 and the first nine months of 2024.

During the nine months ended September 30, 2025 and 2024, the weighted average interest rate on outstanding borrowings was 6.17% and 6.26%, respectively.

Net income attributable to Avalon Holdings Corporation common shareholders was $0.7 million, or $0.17 per share, in the first nine months of 2025 compared with a net income attributable to Avalon Holdings Corporation common shareholders of $1.8 million, or $0.47 per share, in the first nine months of 2024.

Segment Performance

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Waste Management Services Segment

The net operating revenues of the waste management services segment decreased to $19.4 million in the first six months of 2025 compared with $24.7 million in the first six months of 2024.

The net operating revenues of the waste disposal brokerage and management services business were approximately $17.7 million in the first six months of 2025 compared to $23.2 million in the first six months of 2024.

The net operating revenues of the waste management services segment decreased to $32.3 million in the first nine months of 2025 compared with $36.2 million in the first nine months of 2024.

The net operating revenues of the waste disposal brokerage and management services business were approximately $29.8 million in the first nine months of 2025 compared to $34.0 million in the first nine months of 2024.

Continuous work of the waste disposal brokerage business decreased by approximately $0.6 million between periods.

Net operating revenues related to continuous work were approximately $12.4 million in the first six months of 2025 compared with $12.8 million in the first six months of 2024.

Event work net operating revenues related to multiple projects decreased by approximately $5.1 million during first six months of 2025 when compared to first six months of 2024.

Net operating revenues related to continuous work were approximately $19.3 million in the first nine months of 2025 compared with $19.9 million in the first nine months of 2024.

Event work net operating revenues decreased by approximately $3.6 million during first nine months of 2025 when compared to first nine months of 2024.

Event work is defined as bid projects under contract that occurs on a one-time basis over a short period of time.

Such work can fluctuate significantly from year to year.

Event work net operating revenues were approximately $5.3 million in the first six months of 2025 compared with $10.4 million in the first six months of 2024.

The net operating revenues of the captive landfill management operations were approximately $1.7 million in the first six months of 2025 compared to $1.5 million in the first six months of 2024.

Event work net operating revenues were approximately $10.5 million in the first nine months of 2025 compared with $14.1 million in the first nine months of 2024.

The net operating revenues of the captive landfill management operations were approximately $2.5 million in the first nine months of 2025 compared to $2.2 million in the first nine months of 2024.

The net operating revenues of the captive landfill operations are almost entirely dependent upon the volume of waste generated by the owner of the landfill for whom Avalon manages the facility.

Costs of operations related to the waste management services segment increased to $15.1 million in the first six months of 2025 compared with $19.4 million in the first six months of 2024.

Costs of operations related to the waste management services segment decreased to $25.3 million in the first nine months of 2025 compared with $28.4 million in the first nine months of 2024.

The overall gross margin percentage of the waste brokerage and management services business was approximately 22% in the first six months of 2025 compared to 21% in the first six months of 2024.

The increase in the overall gross margin percentage was primarily attributable to the increase in gross profit generated from continuous work during first six months of 2025.

Income before income taxes for the waste management services segment was approximately $1.8 million in the first six months of 2025 compared to $2.5 million in the first six months of 2024.

Income before income taxes of the waste brokerage and management services business was approximately $1.6 million in the first six months of 2025 compared to $2.4 million in the first six months of 2024.

The decrease in income before income taxes was primarily attributable to a decrease in event work projects during the first six months of 2025 compared to the first six months of 2024.

Income before income taxes of the captive landfill operations were approximately $0.3 million for the first six months of both 2025 compared to $0.2 million for the first six months of 2024.

During both the first six months of 2025 and 2024, the salt water injection wells incurred a loss before income taxes of approximately $0.1 million primarily due to legal and professional costs incurred relating to Avalon’s mandamus processes.

The overall gross margin percentage of the waste brokerage and management services business was approximately 21% in both the first nine months of 2025 and 2024, respectively.

Income before income taxes for the waste management services segment were approximately $3.2 million in the first nine months of 2025 compared to $3.8 million in the first nine months of 2024.

Income before income taxes of the waste brokerage and management services business was approximately $3.2 million in the first nine months of 2025 compared to $3.7 million in the first nine months of 2024.

The decrease in income before income taxes was primarily attributable to decreases in both continuous and event work projects during the first nine months of 2025 compared to the first nine months of 2024.

Income before income taxes of the captive landfill operations were approximately $0.2 million for the first nine months of both 2025 and 2024, respectively.

During the first nine months of 2025 the salt water injection wells incurred a loss before income taxes of approximately $0.2 million compared with a loss before income taxes of approximately $0.1 million during the first nine months of 2024.

The increase is primarily due to legal and professional costs incurred relating to Avalon’s mandamus processes.

Golf and Related Operations Segment

Net operating revenues of the golf and related operations segment were approximately $16.9 million in the first six months of 2025 compared to $17.2 million in the first six months of 2024.

Food, beverage and merchandise sales were approximately $5.8 million in both the first six months of 2025 compared to $6.0 million in the first six months of 2024.

Food, beverage and merchandise sales decreased between periods as a result of a decrease in business activity at both The Grand Resort and country clubs.

Other net operating revenues related to the golf and related operations were approximately $11.1 million in the first six months of 2025 compared to $11.2 million in the first six months of 2024.

Membership dues revenue was approximately $3.7 million in the first six months of 2025 compared to $3.8 million in the first six months of 2024.

The decrease in membership dues revenue was attributable to a decrease in members compared to the prior period.

Net operating revenues related to room rental was approximately $3.1 million in the first six months of 2025 compared to $3.0 million in the first six months of 2024.

The increase in room revenue was a result of an increase in average room rates when compared to the prior period.

Other revenues consisting of athletic, fitness, salon, dermatology and spa related activities were approximately $3.2 million in both the first six months of 2025 and first six months of 2024.

Greens fees and associated cart rentals were approximately $1.1 million in the first six months of 2025 compared to $1.2 million in the first six months of 2024.

The decrease in green fees and associated cart rental was a result of fewer rounds played due to poor weather conditions during the first six months of 2025 compared to the first six months of 2024.

Net operating revenues of the golf and related operations segment were approximately $29.7 million in the first nine months of 2025 compared to $30.0 million in the first nine months of 2024.

Food, beverage and merchandise sales were approximately $10.3 in the first nine months of 2025 compared to $10.6 million in the first nine months of 2024, respectively.

Food, beverages and merchandise sales decreased between periods as a result of a decrease in business activity at the country clubs.

Other net operating revenues related to the golf and related operations were approximately $19.4 million in both the first nine months of 2025 and 2024, respectively.

Membership dues revenue was approximately $5.4 million in the first nine months of 2025 compared to $5.6 million in the first nine months of 2024.

The decrease in membership dues revenue was attributable to a decrease in the ability to attract and retain members.

Net operating revenues related to room rental was approximately $6.0 million in the first nine months of 2025 compared to $5.9 million in the first nine months of 2024.

The increase in room revenue was a result of higher occupancy when compared to the prior period.

Other revenues consisting of athletic, fitness, salon and spa related activities were approximately $5.0 million in the first nine months of 2025 compared to $4.9 million in the first nine months of 2024.

The increase between periods was primarily due to an increase in salon and spa revenue associated with The Grand Resort.

Greens fees and associated cart rentals were approximately $3.0 million in both the first nine months of 2025 and the first nine months of 2024, respectively.

Total cost of operations for the golf and related operations segment were $14.7 million in the first six months of 2025 compared with $14.3 million in the first six months of 2024.

Cost of food, beverage and merchandise was approximately $2.7 million in both the first six months of 2025 and the first six months of 2024.

The cost of food, beverage and merchandise sales was approximately 47% of associated revenue in the first six months of 2025 compared to 45% in the first six months of 2024.

Golf and related operations operating costs increased to approximately $12.0 million in the first six months of 2025 compared with $11.6 million in the first six months of 2024.

The increase in operating costs between periods, primarily related to an increase in utility and operating costs in the first six months of 2025 compared to the first six months of 2024.

The golf and related operations recorded a net loss before income taxes of $0.7 million in the first six months of 2025 compared with a net loss before income taxes of $13,000 in the first six months of 2024.

Total cost of operations for the golf and related operations segment were $24.1 million in the first nine months of 2025 compared with $23.6 million in the first nine months of 2024.

Cost of food, beverage and merchandise was approximately $4.7 million in both the first nine months of 2025 and 2024, respectively.

The cost of food, beverage and merchandise sales was approximately 45% of associated revenue in the first nine months of 2025 compared to 44% in the first nine months of 2024.

Golf and related operations operating costs increased to approximately $19.4 million in the first nine months of 2025 compared with $18.9 million in the first nine months of 2024.

The increase in costs is primarily a result of an increase in utility costs and overall operating expenditures compared to the prior period.

The golf and related operations recorded income before income taxes of $1.4 million in the first nine months of 2025 compared with a net income before income taxes of $2.1 million in the first nine months of 2024.

The change between periods was primarily a result of a decrease in membership dues revenue, food beverage and merchandise revenue, coupled with an increase in utility and overall operating costs.

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General Corporate Expenses

General corporate expenses were $1.5 million in both the first six months of 2025 and the first six months of 2024.

The decrease is mainly attributed to lower corporate overhead compared to the prior period.

General corporate expenses were $2.7 million in both the first nine months of 2025 and 2024, respectively.

Interest Expense

Interest expense was approximately $1.0 million for both the first six months in 2025 and the first six months of 2024.

During the six months ended June 30, 2025 and 2024, the weighted average interest rate on outstanding borrowings was 6.17% and 6.27%, respectively.

Net loss attributable to Avalon Holdings Corporation common shareholders was $1.2 million in the first six months of 2025 compared to a net loss attributable to Avalon Holdings Corporation common shareholders of $25,000 in the first six months of 2024.

Avalon recorded a state income tax provision in both the first six months of 2025 and 2024, which was related entirely to the waste management and brokerage operations.

Interest expense was approximately $1.5 million for both the first nine months in 2025 the first nine months of 2024.

During the nine months ended September 30, 2025 and 2024, the weighted average interest rate on outstanding borrowings was 6.17% and 6.26%, respectively.

Net income attributable to Avalon Holdings Corporation common shareholders was $0.7 million in the first nine months of 2025 compared to a net income attributable to Avalon Holdings Corporation common shareholders of $1.8 million in the first nine months of 2024.

Avalon recorded a state income tax provision in both the first nine months of 2025 and 2024, which was related entirely to the waste management and brokerage operations.

Avalon’s income tax on the income (loss) before taxes was offset by a change in the valuation allowance.

Avalon’s income tax on the income before taxes was offset by a change in the valuation allowance.

A valuation allowance is provided when it is more likely than not that deferred tax assets relating to certain federal and state loss carryforwards will not be realized.

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Unfavorable general economic conditions could adversely affect our business and financial results

Our operations are substantially affected by economic conditions, including inflation, which can impact consumer disposable income levels and spending habits.

Economic conditions can also be impacted by a variety of factors including epidemics, pandemics and actions taken by governments to manage economic matters, whether through initiatives intended to control wages, unemployment, inflation, taxation and other economic drivers.

Our operations are substantially affected by economic conditions, including inflationary pressures, which can impact consumer disposable income levels and spending habits.

Economic conditions can also be impacted by a variety of factors including epidemics, pandemics and actions taken by governments to manage economic matters, whether through initiatives intended to control wages, increase in the Federal minimum wage, unemployment, inflation, taxation and other economic drivers.

Adverse economic conditions could pressure Avalon’s business and operating performance and financial results may suffer.

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We continuously monitor supply and cost trends of these commodities.

Volatility in certain commodity prices and fluctuations in labor could adversely affect Avalon’s operating results.

We will continuously monitor labor and commodity prices in order to maintain margins and overall profitability

During the first nine months of 2024 and 2023, we experienced high commodity costs compared to the prior years.

These increases are primarily driven by overall market demand and inflationary pressures.

Volatility in certain commodity prices and fluctuations in labor costs have adversely affected, and in the future, could adversely affect Avalon’s operating results.

We anticipate commodity costs to continue to remain elevated throughout 2025 due to inflationary pressures.

An increase in commodity costs could have an adverse impact on our profitability.

Effective succession planning is important to our continued success

14 unchanged sentences

Our ability to comply with the financial and other covenants in our loan and security agreement may be affected by worsening economic or business conditions, or other events that may be beyond our control.

Although the Company believes that cash generated from operations will be sufficient to meet obligations under our loan and security agreement, we cannot provide assurance that our business will generate cash flow from operating activities in amounts sufficient to enable us to service debt and meet these covenants.

We cannot provide assurance that our business will generate sufficient cash flow from operating activities in amounts sufficient to enable us to service debt and meet these covenants.

We may need to refinance all or a portion of our indebtedness, on or before maturity.

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The Chief of the Division also cross-appealed the Appellate Court’s decision to the Supreme Court.

Oral arguments are scheduled for August 20, 2025.

Oral arguments were held on August 20, 2025 and the Company is awaiting a decision from the high court.

On May 24, 2021, the Company received Chief’s Orders from the Division vacating the September 3, 2014 suspension orders for AWMS #2 and setting conditions for restart of that well.

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On June 30, 2022, the Oil and Gas Commission rendered their decision for the Division in this matter, once again deferring to the Division in their decision.

The Company appealed the decision to the Franklin County Ohio Court of Common Pleas on August 3, 2022.

The Company instructed its counsel to appeal the decision to the Franklin County Ohio Court of Common Please no later than August 3, 2022.

The Company’s former counsel did not file a copy of notice to appeal to the Franklin County Court within 30-days of the Commission’s decision.

3 unchanged sentences

On May 23, 2025, the Appellate Court affirmed the dismissal.

On July 2, 2025, the Company appealed the Appellate Court’s decision to the Supreme Court of Ohio, and awaits proceedings.

On July 2, 2025, the Company appealed the Appellate Court’s decision to the Supreme Court of Ohio.

The Supreme Court declined to hear the appeal.

The Company filed a complaint in the Trumbull County Court of Common Pleas on August 4, 2025 seeking damages from the malpractice of the Company’s former legal counsel.

Golf memberships and liquor licenses

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The ability to retain current members and attract new members has been an ongoing challenge.

Although Avalon was able to increase the number of members of the Avalon Golf and Country Club, as of June 30, 2024, Avalon has not attained its membership goals.

Although Avalon was able to increase the number of members of the Avalon Golf and Country Club, as of September 30, 2024, Avalon has not attained its membership goals.

There can be no assurance as to when such goals will be attained.

12 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements