What changed in this filing

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Item 1. Financial Statements

2026-05-05 compared with 2025-11-07 · 249 added, 405 removed, 717 unchanged (48% of the section changed)

4 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

Net operating revenues:

10 unchanged sentences

Selling, general and administrative expenses

Operating income

Operating loss

Other income (expense):

Interest expense, net

Other income, net

Income before income taxes

Loss before income taxes

Provision for income taxes

Less net loss attributable to non-controlling interest in subsidiaries

Net income attributable to Avalon Holdings Corporation common shareholders

Income per share attributable to Avalon Holdings Corporation common shareholders:

Basic net income per share

Net loss attributable to Avalon Holdings Corporation common shareholders

Loss per share attributable to Avalon Holdings Corporation common shareholders:

Basic net loss per share

Weighted average shares outstanding - basic

3 unchanged sentences

(in thousands, except per share amounts)

September 30,

Current Assets:

9 unchanged sentences

Restricted cash

Noncurrent deferred tax asset

Noncurrent deferred tax asset, net

Other assets, net

28 unchanged sentences

(in thousands, except for share data)

For the Three Months Ended September 30, 2025

Shareholders'

Balance at July 1, 2025

Net Income (loss)

Balance at September 30, 2025

For the Three Months Ended September 30, 2024

Shareholders'

Balance at July1, 2024

Net Income (loss)

Balance at September 30, 2024

See accompanying notes to unaudited condensed consolidated financial statements

AVALON HOLDINGS CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statement of Shareholders ’ Equity (Unaudited)

(in thousands, except for share data)

For the Nine Months Ended September 30, 2025

For the Three Months Ended March 31, 2026

Non-controlling

Shareholders'

Balance at January 1, 2026

Net Income (loss)

Balance at September 30, 2025

For the Nine Months Ended September 30, 2024

Balance at March 31, 2026

For the Three Months Ended March 31, 2025

Non-controlling

Shareholders'

Balance at January 1, 2025

Net Income (loss)

Balance at September 30, 2024

Balance at March 31, 2025

See accompanying notes to unaudited condensed consolidated financial statements .

2 unchanged sentences

(in thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows from operating activities:

Reconciliation of net loss to cash provided by operating activities:

Reconciliation of net loss to cash used in operating activities:

Depreciation and amortization expense

1 unchanged sentence

Provision for losses on accounts receivable

Gain on disposal of equipment

Change in operating assets and liabilities:

8 unchanged sentences

Other liabilities and accrued expenses

Net cash provided by operating activities

Net cash used in operating activities

Cash flows from investing activities:

Capital expenditures

Proceeds from disposal of equipment

Net cash used in investing activities

3 unchanged sentences

Net cash used in financing activities

Increase in cash, cash equivalents and restricted cash

Decrease in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at beginning of period

4 unchanged sentences

Significant non-cash investing and financing activities:

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

Finance lease obligation incurred

Finance lease obligations incurred

Cash paid during the period for interest

3 unchanged sentences

Notes to Unaudited Condensed Consolidated Financial Statements

September 30, 2025

March 31, 2026

Description of Business

10 unchanged sentences

All significant intercompany accounts and transactions have been eliminated in consolidation.

In the opinion of management, these unaudited condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the financial position and results of operations of Avalon for the interim periods presented.

In the opinion of management, these unaudited condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the financial position of Avalon as of March 31, 2026, and the results of its operations and cash flows for the interim periods presented.

The operating results for the interim periods are not necessarily indicative of the results to be expected for the full year.

1 unchanged sentence

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):

Improvements to Income Tax Disclosures, to improve income tax disclosures around effective tax rates and cash income taxes paid.

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

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):

11 unchanged sentences

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.

The Company adopted ASU 2025-05 effective January 1, 2026 on a prospective basis.

In December 2025, The FASB issued ASU 2025-11, Interim Reporting (Topic 270):

Narrow-Scope Improvements.

The standard does not change the fundamental nature of interim reporting or expand or reduce current interim disclosure requirements which were determined when the disclosure requirements were initially issued.

Instead, its objective is to provide clarity on the current interim reporting requirements by (a) clarifying that the guidance in the ASU applies to all entities that provide interim financial statements and notes in accordance with GAAP;

(b) create a comprehensive list in ASC 270 of interim disclosures that are required in interim financial statements and noted in accordance with GAAP;

(c) incorporate a disclosure principal, which is modelled after the previous SEC guidance, which required entities to disclose events and changes that occur after the end of the most recent fiscal year that have a material impact on the entity;

and (d) improve guidance about the information included in and the format of the interim financial statements.

The new ASU is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027.

Early adoption is permitted, and entities may apply the ASU either prospectively or retrospectively to any or all prior periods presented in the financial statements.

All other new accounting pronouncements that have been issued, but not yet effective are currently being evaluated and at this time are not expected to have a material impact on the Company’s financial position or results of operations.

Cash, Cash Equivalents and Restricted Cash

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents for purposes of the Condensed Consolidated Balance Sheets.

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents for purposes of the Consolidated Balance Sheets.

Avalon maintains its cash balances in various financial institutions.

1 unchanged sentence

Avalon has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk relating to its cash and cash equivalents.

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.

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 September 30, 2025 and December 31, 2024 (in thousands):

September 30,

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

Restricted cash consists of loan proceeds deposited into a project fund account to fund future costs of remodeling and expanding Avalon’s Mortgaged property and can also be used to renovate and expand the swimming pool at Squaw Creek in accordance with the provisions of the loan and security 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 that sum to the total of the same such amounts shown in the Condensed Consolidated Statements of Cash Flows.

Cash, cash equivalents and restricted cash consist of the following at March 31, 2026 and December 31, 2025 (in thousands):

Cash and cash equivalents

4 unchanged sentences

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

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

generally 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.

Sales and other taxes we collect concurrent with revenue-producing activities are excluded from revenue.

Sales and other taxes we collect concurrent with revenue-producing activities are excluded from revenue as the Company is a pass-through conduit for collecting and remitting sales taxes.

The Company does not incur incremental costs to obtain contracts or costs to fulfill contracts that meet the criteria for capitalization.

12 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 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.

Due to the suspension of the salt water injection wells, there were no operating revenues for the three months ended March 31, 2026 and 2025.

For the three months ended March 31, 2026 and 2025, the net operating revenues related to waste management services represented approximately 65 % and 60 %, respectively, of Avalon’s total consolidated net operating revenues.

For the three months ended March 31, 2026, one customer accounted for 11 % of the consolidated net operating revenues and 17 % of the waste management services segment’s net operating revenues to external customers.

For the three months ended March 31, 2025, one customer accounted for 10 % of the consolidated net operating revenues and 16 % of the waste management services segment’s net operating revenues to external customers.

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.

6 unchanged sentences

The Company applied the standard's practical expedient that permits the omission of disclosures relating to unsatisfied performance obligations as most of the Company’s waste management service contracts (i) have an original expected length of one year or less and (ii) the Company recognizes revenue at the amount to which the Company has the right to invoice for services performed.

Avalon evaluated whether we are the principal (i.e.

report revenues on a gross basis) or agent (i.e.

report revenues on a net basis).

Avalon reports waste management services on a gross basis, that is, amounts billed to our customers are recorded as revenues, and amounts paid to vendors for providing those services are recorded as operating costs.

As principal, Avalon is primarily responsible for fulfilling the promise to provide waste management services for the customer.

Avalon accepts credit risk in the event of nonpayment by the customer and is obligated to pay vendors who provide the service regardless of whether the customer pays the Company.

Avalon does have a level of discretion in establishing the pricing for its service.

Our payment terms vary by the type and location of our customer and the service offered.

7 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, 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.

Revenues for the golf and related operations consists primarily of food, beverage and merchandise sales, membership dues, greens fees and associated cart rentals, room rentals, fitness activities, salon and spa services.

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 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.

The golf and related operations also include the operation of a hotel and its resort related amenities including dining, banquet and conference facilities, fitness center, swimming pools, salon and spa and tennis courts.

Due to adverse weather conditions, net operating revenues relating to the golf courses, which are located in northeast Ohio and Pennsylvania, were minimal during the first three months of 2026 and 2025.

For the three months ended March 31, 2026 and 2025, the net operating revenues related to the golf and related operations represented approximately 35 % and 40 %, respectively, of Avalon’s total consolidated net operating revenues.

For both the three months ended March 31, 2026 and 2025, 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 nine months ended September 30, 2025 and 2024 (in thousands).

The following table presents our net operating revenues disaggregated by revenue source for the three months ended March 31, 2026 and 2025 (in thousands).

Sales and other taxes are excluded from revenues.

Three 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 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.

At March 31, 2026 and December 31, 2025, accounts receivable, net, related to our waste management services segment were approximately $ 8.9 million and $ 8.8 million, respectively.

At March 31, 2026, two customers accounted for approximately 28 % of consolidated and 36 % of the waste management services segment’s receivables.

At March 31, 2025, one customer accounted for approximately 13 % of consolidated and 18 % of the waste management services segment’s receivables.

Accounts receivable, net, related to our golf and related operations segment were approximately $ 2.9 million and $ 1.0 million at March 31, 2026 and December 31, 2025, 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 March 31, 2026 or December 31, 2025.

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 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):

Allowance for credit losses was approximately $ 0.3 million and $ 0.2 million at March 31, 2026 and December 31, 2025, respectively.

The following table presents changes in our allowance for credit losses during the three months ended March 31, 2026 and 2025 (in thousands):

Beginning of Period

1 unchanged sentence

Allowance for credit losses

Three months ended September 30, 2025

Three months ended September 30, 2024

Nine months ended September 30, 2025

Nine months ended September 30, 2024

Three months ended March 31, 2026

Three months ended March 31, 2025

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 $ 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):

Unbilled membership receivables in our Condensed Consolidated Balance Sheets were approximately $ 0.7 million at March 31, 2026 and $ 0.5 million at December 31, 2025.

The following table presents changes in our contract assets during the three months ended March 31, 2026 and 2025 (in thousands):

Beginning of Period

2 unchanged sentences

Unbilled membership dues receivable

Three months ended September 30, 2025

Three months ended September 30, 2024

Nine months ended September 30, 2025

Nine months ended September 30, 2024

Three months ended March 31, 2026

Three months ended March 31, 2025

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 $ 4.6 million at September 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 $ 5.1 million at March 31, 2026 and $ 3.5 million at December 31, 2025, 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 $ 1.5 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):

Customer advance deposits were approximately $ 1.7 million at both March 31, 2026 and December 31, 2025, respectively.

The following table presents changes in our contract liabilities during the three months ended March 31, 2026 and 2025 (in thousands):

Beginning of Period

2 unchanged sentences

Deferred membership dues revenue

Three months ended September 30, 2025

Three months ended September 30, 2024

Nine months ended September 30, 2025

Nine months ended September 30, 2024

Three months ended March 31, 2026

Three months ended March 31, 2025

Customer advance deposits

Three months ended September 30, 2025

Three months ended September 30, 2024

Nine months ended September 30, 2025

Nine months ended September 30, 2024

Three months ended March 31, 2026

Three months ended March 31, 2025

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

September 30,

Property and equipment at March 31, 2026 and December 31, 2025 consists of the following (in thousands):

Land and land improvements

5 unchanged sentences

Property and equipment, net

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

As of March 31, 2026, the Company entered into one significant contractual construction project commitment.

The agreed upon commitment with the contractor is intended to renovate and expand the swimming pool area at Squaw Creek Country Club.

The commitment is estimated to be approximately $ 1.8 million.

As of March 31, 2026, amounts paid on the commitment were approximately $ 0.2 million.

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

During the first three months of 2026 and 2025, no triggering events were present.

Operating Leases

Avalon leases golf carts, machinery and equipment for the landfill operations, furniture and fixtures for The Grand Resort and office copiers under operating leases.

Avalon leases golf carts and associated GPS equipment, furniture and fixtures for The Grand Resort and office copiers under operating leases.

Our operating leases have remaining lease terms ranging from less than 1 year to 5.0 years.

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,

The weighted average remaining lease term on operating leases was approximately 3.8 years and 3.9 years at March 31, 2026 and December 31, 2025, respectively.

During the first three months of 2026 and 2025 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 March 31, 2026 and December 31, 2025 consists of the following (in thousands):

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 September 30, 2025 and December 31, 2024, respectively.

The weighted average discount rate on operating leases was 7.0 % at both March 31, 2026 and December 31, 2025.

Finance Leases

4 unchanged sentences

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

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

At March 31, 2026 there were approximately 27.6 years remaining on the golf course and related facilities finance lease.

At December 31, 2025 there were approximately 27.8 years remaining on the golf course and related facilities finance lease.

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 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,

The net asset value of finance leases, excluding leasehold improvements was $ 1.6 million at both March 31, 2026 and December 31, 2025.

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

At March 31, 2026, the vehicle, golf course maintenance and restaurant equipment have remaining lease terms ranging from less than 1 year to 5.0 years.

The weighted average remaining lease term on the vehicles and equipment leases was approximately 3.6 years and 3.8 years at March 31, 2026 and December 31, 2025, respectively.

Leased property and associated obligations under finance leases at March 31, 2026 and December 31, 2025 consists of the following (in thousands):

Leased property under finance leases

Less accumulated amortization

Leased property under finance leases, net

Leased property under finace 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 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):

The weighted average discount rate on finance leases was 6.7 % at both March 31, 2026 and December 31, 2025.

For the three months ended March 31, 2026 and 2025, components of lease expense were as follows (in thousands):

Three Months Ended

Nine Months Ended

September 30,

Operating lease cost:

4 unchanged sentences

Total finance lease cost

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

For the twelve months ending March 31, 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 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 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.

Basic Net Loss per Share

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

For both the three months ended March 31, 2026 and 2025, the weighted average number of common shares outstanding was 3,899,431 .

Term Loans and Line of Credit Agreements

2 unchanged sentences

At closing, $ 20.2 million of the proceeds were used to pay off and refinance amounts outstanding and associated interest under our 2019 Term Loan Agreement with Laurel Capital Corporation and $ 0.4 million of the proceeds were utilized to pay transaction costs.

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 $ 8.7 million and $ 9.0 million at September 30, 2025 and December 31, 2024, respectively, and presented in the Consolidated Balance Sheets.

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 remodeling and expanding Avalon’s Mortgaged property and can also be used to renovate and expand the swimming pool at Squaw Creek.

At March 31, 2026 and December 31, 2025 the balance of “Restricted Cash” is $ 8.5 million and $ 8.7 million, 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 September 30, 2025 and December 31, 2024.

Avalon was in compliance with the 2022 Term Loan Agreement covenants at March 31, 2026 and December 31, 2025.

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 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.

At both March 31, 2026 and December 31, 2025, approximately $ 3.2 million was outstanding under the Line of Credit Agreement.

At March 31, 2026 and December 31, 2025, 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 September 30, 2025, the interest rate on the Line of Credit Agreement was 7.50 %.

At March 31, 2026, the interest rate on the Line of Credit Agreement was 7.00 %.

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 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

Avalon was in compliance with the Line of Credit Agreements covenants at March 31, 2026 and December 31, 2025.

During the three months ended March 31, 2026 and 2025, the weighted average interest rate on outstanding borrowings was 6.10 % and 6.17 %, respectively.

Obligations under the Company’s term loan agreement at March 31, 2026 and December 31, 2025 consist of the following (in thousands):

March 31, 2026

Debt Issuance Costs

7 unchanged sentences

Long-term debt

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 before taxes was offset by a change in the valuation allowance.

For the twelve months ending March 31, future maturities under the Company’s 2022 Term Loan and Line of Credit Agreements are as follows (in thousands):

During the three months ended March 31, 2026 and 2025, net loss attributable to Avalon Holdings Corporation shareholders was $ 1.2 million and $ 1.5 million, respectively.

Avalon recorded a state income tax provision in both the three month periods ended March 31, 2026 and 2025, 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 reflects 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.

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.

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.

The One Big Beautiful Bill Act (the “OBBBA”) was signed into law on July 4, 2025.

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

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

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Treasury securities over a period consistent with the expected term.

At March 31, 2024, all options to purchase shares granted were cancelled as the options did not meet the predetermined stock price within the three years following the contractual vesting period.

Additionally, all remaining shares previously granted expired.

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

At March 31, 2026 and 2025 there are no outstanding options.

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

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

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 2025 Annual Report to Shareholders.

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

Three months ending September 30, 2025

Waste Management Services

Golf and Related Operations

Income (loss) before income taxes:

Cost of operations

Selling, general and administrative

Depreciation and amortization

Interest expense, net

Income (loss) before taxes

Three months ending September 30, 2024

Waste Management Services

Golf and Related Operations

Income (loss) before income taxes:

Cost of operations

Selling, general and administrative

Depreciation and amortization

Interest expense, net

Income (loss) before taxes

Nine months ending September 30, 2025

Waste Management Services

Golf and Related Operations

Three months ending March 31, 2026

Income (loss) before income taxes:

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Income (loss) before taxes

Nine months ending September 30, 2024

Waste Management Services

Golf and Related Operations

Three months ending March 31, 2025

Income (loss) before income taxes:

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Income (loss) before taxes

September 30,

Identifiable assets:

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Elimination of intersegment receivables

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.

In comparing total assets at March 31, 2026 with those at December 31, 2025, the increase in the total assets of the waste management services segment of approximately $ 0.8 million was primarily a result of an increase in accounts receivable and intersegment transactions, which are eliminated in consolidation.

The increase in total assets of the golf and related operations segment of $ 2.1 million was primarily due to an increase in accounts receivable, inventory and capital expenditures associated with The Grand Resort and country club locations, partially offset by current year depreciation on property and equipment.

The decrease in corporate total assets of approximately $ 2.8 million was primarily due to a decrease in both operating cash and intersegment transactions, which are eliminated in consolidation.

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

At March 31, 2026 and December 31, 2025, 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 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’s net loss attributable to the noncontrolling interest in AWMS Holdings, LLC was $ 18,000 and $ 68,000 during each of the three months ending March 31, 2026 and 2025, respectively.

Avalon Med Spa, LLC

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Avalon operates and manages all decisions regarding the medical spa operations for a percentage of the gross revenues.

In 2021, Avalon made a capital contribution totaling $ 0.4 million, which included cash and certain equipment, in exchange for membership units of Avalon Med Spa, LLC.

Through a private placement offering for the purchase of membership units, Avalon Med Spa, LLC raised $ 0.4 million from accredited investors in August 2021.

In March 2022, both Avalon and accredited investors made additional capital contributions of $ 0.1 million, respectively.

In 2021, Avalon made a capital contribution totaling $ 359,000 , which included cash and certain equipment, in exchange for membership units of Avalon Med Spa, LLC.

Through a private placement offering for the purchase of membership units, Avalon Med Spa, LLC raised $ 358,000 from accredited investors in August 2021.

In March 2022, Avalon and accredited investors made additional capital contributions of $ 143,000 and $ 142,000 , respectively.

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 September 30, 2025 and December 31, 2024.

Avalon is the majority owner of Avalon Med Spa, LLC owning 50.1 % of the company at both March 31, 2026 and December 31, 2025.

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.

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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 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’s net loss attributable to the noncontrolling interest in Avalon Med Spa, LLC was $ 27,000 and $ 64,000 during each of the three months ending March 31, 2026 and 2025, 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 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

For the three months ending March 31, 2026 and 2025, net loss attributable to the noncontrolling interest in Avalon Dermatology, LLC was approximately $ 1,000 and $ 55,000 during each of the three months ending March 31, 2026 and 2025, respectively.

Injection Wells Suspension

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The Supreme Court of Ohio remanded to the Court again for a decision on the mandamus complaint as to whether the Company suffered a total or partial taking.

On September 9, 2024 the 11 th Appellate District Court in Trumbull County rendered a non-unanimous decision on remand.

The decision denied the Company’s categorical regulatory takings claim, but found for the Company on its partial regulatory takings claim.

The decision limited damages due to the Company, and the Company subsequently appealed the Appellate Court’s decision to the Supreme Court of Ohio based on errors regarding the court’s interpretation of Ohio law and abuse of discretion grounds.

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

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

On September 9, 2024, the Court of Appeals issued a decision in accordance with the remand from the Supreme Court of Ohio.

The Court of Appeals found that there was no categorical ‘taking’ of the Company’s property, but that there was a partial regulatory ‘taking’, and ordered the ODNR to commence appropriations procedures for paying AWMS damages.

The decision by the Court of Appeals also found that the seismicity for which AWMS #2 was suspended did not represent imminent threat or harm, and that Division had prevented the Company’s attempts to reach a resolution of the matter.

Because of the limits on damages set in the decision by the Court of Appeals, the Company again appealed the Court of Appeals decision to the Supreme Court of Ohio on October 11, 2024.

On April 29, 2026 the Supreme Court of Ohio ruled against the Company and determined that no taking occurred.

The Company is evaluating the ruling and conducting strategic planning on the future of the site.

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 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.

The Division motioned that court for dismissal of the appeal on August 19, 2022 for not perfecting the appeal.

The Franklin County Court of Common Pleas granted that motion on October 31, 2024.

On November 26, 2024, the Company appealed that dismissal to the 10 th Appellate District Court in Franklin County.

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.

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

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

On October 31, 2024 the Franklin County Ohio Court of Common Pleas dismissed the appeal.

The Company appealed the dismissal to the Ohio 10 th District Court of Appeals on November 26, 2024, which affirmed the decision.

The Company has filed a complaint in the Trumbull County Court of Common Pleas against the law firm and their attorneys responsible for missing the deadline for appeal of the Commission’s decision, causing the dismissal.

MANAGEMENT ’ S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion provides information which management believes is relevant to an assessment and understanding of the operations and financial condition of Avalon Holdings Corporation and its subsidiaries.

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Liquidity and Capital Resources

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

For the three months ended March 31, 2026, 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 account were also utilized to fund capital expenditures which included the continued remodeling of The Grand Resort as further described below.

On August 5, 2022, Avalon and certain direct and indirect wholly owned subsidiaries entered into a loan and security agreement (the “2022 Term Loan Agreement”) with Laurel Capital Corporation which provided for a $31.0 million term loan.

At closing, $20.2 million of the proceeds were used to pay off and refinance amounts outstanding and associated interest under our 2019 Term Loan Agreement with Laurel Capital Corporation and $0.4 million of the proceeds were utilized to pay transaction costs.

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 $8.7 million and $9.0 million at September 30, 2025 and December 31, 2024, respectively, and presented in the Consolidated Balance Sheets.

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 remodeling and expanding Avalon’s Mortgaged property and can also be used to renovate and expand the swimming pool at Squaw Creek.

At March 31, 2026 and December 31, 2025 the balance of “Restricted Cash” is $8.5 million and $8.7 million, 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 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 .

The Company is amortizing these costs over the life of the 2022 Term Loan Agreement.

In accordance with ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs , these costs are presented in the Condensed Consolidated Balance Sheets as a direct reduction from the carrying amount of the term loan liability

Avalon was in compliance with the 2022 Term Loan Agreement covenants at March 31, 2026 and December 31, 2025.

Line of Credit Agreement

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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.

At both March 31, 2026 and December 31, 2025, approximately $3.2 million was outstanding under the Line of Credit Agreement.

At March 31, 2026 and December 31, 2025, 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 September 30, 2025, the interest rate on the Line of Credit Agreement was 7.50%.

At March 31, 2026, the interest rate on the Line of Credit Agreement was 7.00%.

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 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.

Avalon was in compliance with the Line of Credit Agreements covenants at March 31, 2026 and December 31, 2025.

During the three months ended March 31, 2026 and 2025, the weighted average interest rate on outstanding borrowings was 6.10% and 6.17%, respectively.

Squaw Creek Country Club Lease Agreement

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Capital Expenditures

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.

During the three months ended March 31, 2026, Avalon incurred capital expenditures in the amount of $0.6 million of which $0.5 million was paid to vendors during the year.

During the three months ended March 31, 2025, Avalon incurred capital expenditures in the amount of $0.5 million of which $0.4 million was paid to vendors during the year.

For the three months ended March 31, 2026, expenditures primarily related to the continued renovation of The Grand Resort and the initial phase of the Squaw Creek pool renovation.

For the three months ended March 31, 2025, expenditures primarily related to the continued renovation of The Grand Resort.

In 2026 and 2025, all hotel rooms at The Grant Resort and other areas of the facility were in the process of being renovated.

Avalon’s aggregate capital expenditures in 2026 are expected to be in the range of $4.0 million to $5.0 million.

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.

Capital expenditures principally relate to hotel room renovations at The Grand Resort, 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 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 $1.7 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 $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.

At March 31, 2026 there was a working capital deficit of approximately $0.7 million.

At December 31, 2025, there was a working capital surplus of approximately $0.1 million.

Working capital was negatively impacted primarily by an increase in accrued payroll, deferred membership dues revenue and other accrued liabilities.

The negative impact was partially offset by an increase in accounts receivable, unbilled membership dues receivables, inventory and prepaid assets

Accounts receivable increased to $11.8 million at March 31, 2026 compared with $9.8 million at December 31, 2025.

Accounts receivable related to our waste management services segment increased approximately $0.1 million at March 31, 2026 compared with December 31, 2025 as a result of increased billings and the timing of receipt on the receivables.

Accounts receivable related to the golf and related operations segment increased approximately $1.9 million at March 31, 2026 compared to December 31, 2025 due to the associated timing of annual membership renewals.

Unbilled membership dues receivable was approximately $0.7 million at March 31, 2026 compared to $0.5 million at December 31, 2025.

The increase was primarily due to an increase in dues and 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 March 31, 2026 compared to $1.6 million at December 31, 2025.

The increase is related to merchandise, food and beverage inventory related to our golf and related operations segment.

Accounts payable was approximately $7.7 million at March 31, 2026 compared to $8.0 million at December 31, 2025.

The waste management segment decreased accounts payable by approximately $1.0 million between periods.

Accounts payable related to our waste management segment decreased 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 $0.7 million at March 31, 2026 compared to December 31, 2025, due to the associated timing of vendor payments in the ordinary course of business.

Deferred revenue relating to membership dues was approximately $5.1 million at March 31, 2026 compared to $3.5 million at December 31, 2025.

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

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.

The number of members at March 31, 2026 was 4,616 compared to 4,500 at December 31, 2025.

Accrued payroll and other compensation was approximately $1.5 million at March 31, 2026 compared to $1.2 million at December 31, 2025.

The increase is primarily due to the associated timing of payment of certain earned employee incentives relating 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.

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Growth Strategy

Waste Management Services Segment

Waste Management Segment

Our growth strategy for the waste management services segment focuses on increasing revenue, gaining market share and enhancing shareholder value through internal growth.

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The Grand Resort is open year-round and provides a consistent, comfortable environment where our guests can enjoy our various amenities and activities.

Avalon believes that the combination of its four golf facilities and The Grand Resort will result in additional memberships in the Avalon Golf and Country Club.

In addition, several private country clubs in the northeast Ohio area are experiencing economic difficulties.

Avalon believes some of these clubs may represent an attractive investment opportunity.

While Avalon has not entered into any pending agreements for acquisitions, it may do so at any time and will continue to consider acquisitions that make economic sense.

In addition, as of March 31, 2026, the company has entered into a contractual construction project commitments intended to renovate and expand the swimming pool area at Squaw Creek Country Club.

The construction will consist of multiple luxurious;

Las Vegas style pools.

Avalon believes that the combination of its four golf facilities, The Grand Resort and the new luxurious pools at Squaw Creek will result in additional memberships in the Avalon Golf and Country Club.

Results of Operations

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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 third quarter of 2025 compared with the third quarter of 2024

Performance in the first quarter of 2026 compared with the first quarter of 2025

Overall Performance

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.

Net operating revenues increased to $17.7 million in the first quarter of 2026 compared with $16.1 million in the first quarter of 2025.

Net operating revenues of the waste management services segment were approximately $11.5 million in the first quarter of 2026 compared to $9.7 million in the first quarter of 2025.

The increase in net operating revenues of the waste management services segment was a result of increases in both continuous work and event work projects during the first quarter of 2026 compared to the first quarter of 2025.

Net operating revenues of the golf and related operations segment were approximately $6.2 million in the first quarter of 2026 compared to $6.4 million in the first quarter of 2025.

The decrease in net operating revenues of the golf and related operations segment was a result of a decrease in spa, salon and other revenue.

Total cost of operations related to the waste management services segment increased to $8.9 million in the first quarter of 2026 compared with $7.6 million in the first quarter of 2025.

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 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.

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.

Total cost of operations related to the golf and related operations segment were $5.9 million in the first quarter of 2026 compared to $6.1 million in the first quarter of 2025.

The decreases in costs are mainly attributed to a decrease in wages compared to the previous period.

Depreciation and amortization expense decreased to $0.9 million in the first quarter of 2026 compared to $1.0 million in the first quarter of 2025.

Consolidated selling, general and administrative expenses were approximately $2.7 million in both the first quarter of 2026 compared to $2.6 million in the first quarter of 2025.

The 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 for both the first quarter of 2026 and the first quarter of 2025.

During the three months ended March 31, 2026 and 2025, the weighted average interest rate on outstanding borrowings was 6.10% and 6.17%, respectively.

Net loss attributable to Avalon Holdings Corporation common shareholders was $1.2 million, or $0.32 per share, in the first quarter of 2026 compared with a net loss attributable to Avalon Holdings Corporation common shareholders of $1.5 million, or $0.38 per share, in the first quarter of 2025.

Segment Performance

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Waste Management Services Segment

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 net operating revenues of the waste management services segment increased to $11.5 million in the first quarter of 2026 compared with $9.7 million in the first quarter of 2025.

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 $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.

The net operating revenues of the waste disposal brokerage and management services business were approximately $10.7 million in the first quarter of 2026 compared to $8.8 million in the first quarter of 2025.

Event work net operating revenues increased by approximately $0.7 million during first quarter of 2026 when compared to first quarter of 2025.

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 $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.

Event work net operating revenues were approximately $3.7 million in the first quarter of 2026 compared with $3.0 million in the first quarter of 2025.

In addition, continuous work of the waste disposal brokerage business increased approximately $1.2 million between periods as a result of an increase in work from multiple customers.

Net operating revenues related to continuous work were approximately $7.0 million in the first quarter of 2026 compared with $5.8 million in the first quarter of 2025.

The net operating revenues of the captive landfill management operations were approximately $0.8 million in the first quarter of 2026 compared to $0.9 million in the first quarter of 2025.

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 $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.

Costs of operations related to the waste management services segment decreased to $8.9 million in the first quarter of 2026 compared with $7.6 million in the first quarter of 2025.

The increase in the cost of operations between periods for the waste management segment is primarily due to the 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 23% in the first quarter of 2026 compared to 22% in the first quarter of 2025.

The increase in the overall gross margin percentage was primarily attributable to the increased gross profit associated with both continuous and event work performed during first quarter of 2026.

Income before income taxes for the waste management services segment were approximately $1.2 million in the first quarter 2026 compared with $0.9 million in the first quarter 2025.

Income before income taxes of the waste brokerage and management services business was approximately $1.2 million for the first quarter of 2026 compared to $0.9 million in the first quarter of and 2025.

The increase in income before income taxes was primarily attributable to the increase in revenue and associated gross profit in the first quarter of 2026 compared to the first quarter of 2025.

Income before income taxes of the captive landfill operations were approximately $0.1 million in both the first quarter of 2026 and 2025.

During both the first quarter of 2026 and 2025, the salt water injection wells incurred a loss before income taxes of approximately $0.1 million primarily due to legal and professional costs.

Golf and Related Operations Segment

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.

Net operating revenues of the golf and related operations segment were approximately $6.2 million in the first quarter of 2026 compared to $6.4 million in the first quarter of 2025.

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 medical spa, dermatology center, 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 $2.0 million in both the first quarter of 2026 and 2025.

Other net operating revenues related to the golf and related operations were approximately $4.1 million in the first quarter of 2026 compared to $4.4 million in the first quarter of 2025.

Membership dues revenue was approximately $1.8 million in both the first quarter of 2026 and 2025.

Net operating revenues related to room rental was approximately $1.1 million in both the first quarter of 2026 and 2025.

Other revenues consisting of athletic, fitness, salon and spa related activities were approximately $1.1 million in the first quarter of 2026 compared to $1.4 million in the first quarter of 2025.

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 third quarter of 2025 and 2024, respectively.

Interest Expense

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.

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.

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

Overall Performance

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.

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 $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

Segment performance should be read in conjunction with Note 13 to the Condensed Consolidated Financial Statements.

Waste Management Services Segment

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 $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 $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 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 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 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 $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.

Greens fees and associated cart rentals were approximately $0.1 million in both the first quarter of 2026 and 2025.

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.

The ability to attract new members and retain members is very important to the success of the golf and related operations segment.

Avalon is continually using different marketing strategies to attract and retain members, such as local television advertising and/or various membership promotions.

A significant decline in members could adversely impact the financial results of the golf and related operations segment.

Total cost of operations for the golf and related operations segment were $5.9 million in the first quarter of 2026 compared to $6.1 million in the first quarter of 2025.

Cost of food, beverage and merchandise was approximately $1.0 million in both the first quarter of and 2026 and 2025.

The cost of food, beverage and merchandise sales was approximately 49% of associated revenue in the first quarter of 2026 compared to 50% in the first quarter of 2025.

Golf and related operations operating costs was approximately $4.9 million in both the first quarter of 2026 compared to $5.1 million in the first quarter of 2025.

The decreases in costs are mainly attributed to a decrease in wages compared to the previous period.

The golf and related operations recorded a loss before income taxes of $1.0 million in the first quarter of 2026 compared with a loss before income taxes of $1.1 million in the first quarter of 2025.

The change between periods was primarily a result of a decrease in costs related to employee wages.

General Corporate Expenses

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

General corporate expenses were $0.9 million in both the first quarter of 2026 and 2025.

Interest Expense

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.

Interest expense was approximately $0.5 million for both the first quarter of 2026 and 2025.

During the three months ended March 31, 2026 and 2025, the weighted average interest rate on outstanding borrowings was 6.10% and 6.17%, respectively.

Net loss attributable to Avalon Holdings Corporation common shareholders was $1.2 million in the first quarter of 2026 compared to a net loss attributable to Avalon Holdings Corporation common shareholders of $1.5 million in the first quarter of 2025.

Avalon recorded a state income tax provision in both the first quarter of 2026 and 2025, which was related entirely to the waste management and brokerage operations.

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

Avalon’s income tax benefit on the loss 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.

18 unchanged sentences

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

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.

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.

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

20 unchanged sentences

We continuously monitor supply and cost trends of these commodities.

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.

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

Effective succession planning is important to our continued success

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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.

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.

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

53 unchanged sentences