What changed in this filing

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Item 1. Financial Statements

2026-08-07 compared with 2026-05-05 · 322 added, 200 removed, 766 unchanged (41% of the section changed)

4 unchanged sentences

Three Months Ended

Six Months Ended

Net operating revenues:

10 unchanged sentences

Selling, general and administrative expenses

Operating loss

Operating income (loss)

Other income (expense):

Interest expense, net

Loss before income taxes

Loss on disposal

Income (loss) before income taxes

Provision for income taxes

Net income (loss)

Less net loss attributable to non-controlling interest in subsidiaries

Net loss attributable to Avalon Holdings Corporation common shareholders

Loss per share attributable to Avalon Holdings Corporation common shareholders:

Basic net loss per share

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

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

Basic net income (loss) per share

Weighted average shares outstanding - basic

14 unchanged sentences

Restricted cash

Noncurrent deferred tax asset, net

Noncurrent deferred tax asset

Other assets, net

28 unchanged sentences

(in thousands, except for share data)

For the Three Months Ended March 31, 2026

For the Three Months Ended June 30, 2026

Non-controlling

Shareholders'

Balance at April 1, 2026

Net Income (loss)

Balance at June 30, 2026

For the Three Months Ended June 30, 2025

Non-controlling

Shareholders'

Balance at April 1, 2025

Net Income (loss)

Balance at June 30, 2025

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 Six Months Ended June 30, 2026

Non-controlling

Shareholders'

Balance at January 1, 2026

Balance at March 31, 2026

For the Three Months Ended March 31, 2025

Balance at June 30, 2026

For the Six Months Ended June 30, 2025

Non-controlling

1 unchanged sentence

Balance at January 1, 2025

Balance at March 31, 2025

Balance at June 30, 2025

See accompanying notes to unaudited condensed consolidated financial statements

2 unchanged sentences

(in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities:

Reconciliation of net loss to cash used in operating activities:

Reconciliation of net loss to cash provided by operating activities:

Depreciation and amortization expense

1 unchanged sentence

Provision for losses on accounts receivable

Loss on disposal

Change in operating assets and liabilities:

8 unchanged sentences

Other liabilities and accrued expenses

Net cash used in operating activities

Net cash provided by operating activities

Cash flows from investing activities:

5 unchanged sentences

Net cash used in financing activities

Decrease in cash, cash equivalents and restricted cash

Increase 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:

Finance lease obligations incurred

Finance lease obligation incurred

Cash paid during the period for interest

3 unchanged sentences

Notes to Unaudited Condensed Consolidated Financial Statements

March 31, 2026

June 30, 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 of Avalon as of March 31, 2026, and the results of its operations and cash flows 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 June 30, 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.

26 unchanged sentences

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 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 Condensed Consolidated Balance Sheets.

Avalon maintains its cash balances in various financial institutions.

3 unchanged sentences

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):

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

Cash, cash equivalents and restricted cash consist of the following at June 30, 2026 and December 31, 2025 (in thousands):

Cash and cash equivalents

6 unchanged sentences

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 as the Company is a pass-through conduit for collecting and remitting sales taxes.

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

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 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.

Due to the suspension of the salt water injection wells, there were no operating revenues for the three and six months ended June 30, 2026 and 2025.

For both the three months ended June 30, 2026 and 2025, the net operating revenues related to waste management services represented approximately 48 % of Avalon’s total consolidated net operating revenues.

Net operating revenues related to waste management services represented approximately 56 % and 53 % of Avalon’s total consolidated net operating revenues for the six months ended June 30, 2026 and 2025, respectively.

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, dermatology services, dining and banquet facilities.

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.

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 and salon and spa services.

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.

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.

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 2026 and 2025.

For both the three months ended June 30, 2026 and 2025, the net operating revenues related to the golf and related operations represented approximately 52 % of Avalon’s total consolidated net operating revenues.

For the six months ended June 30, 2026 and 2025, the net operating revenues related to the golf and related operations represented approximately 44 % and 47 %, respectively of Avalon’s total consolidated net operating 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 months ended March 31, 2026 and 2025 (in thousands).

The following table presents our net operating revenues disaggregated by revenue source for the three and six months ended June 30, 2026 and 2025 (in thousands).

Sales and other taxes are excluded from revenues.

Three Months Ended

Six Months Ended

Waste management and brokerage services

14 unchanged sentences

The amounts due are stated at their net realizable value.

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.

At both June 30, 2026 and December 31, 2025, accounts receivable, net, related to our waste management services segment was $ 8.1 million and $ 8.8 million, respectively.

At June 30, 2026 two customers accounted for 22 % of consolidated and 28 % of waste management service’s segments net receivables.

At December 31, 2025 two customers accounted for 24 % of consolidated and 26 % of waste management service’s segments net receivables.

Accounts receivable, net, related to our golf and related operations segment were approximately $ 2.1 million and $ 1.0 million at June 30, 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 June 30, 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 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):

Allowance for credit losses was approximately $ 0.3 million and $ 0.2 million at June 30, 2026 and December 31, 2025, respectively.

The following table presents changes in our allowance for credit losses during the three and six months ended June 30, 2026 and 2025 (in thousands):

Beginning of Period

1 unchanged sentence

Allowance for credit losses

Three months ended March 31, 2026

Three months ended March 31, 2025

Three months ended June 30, 2026

Three months ended June 30, 2025

Six months ended June 30, 2026

Six months ended June 30, 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 $ 0.7 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):

Unbilled membership receivables in our Condensed Consolidated Balance Sheets were approximately $ 1.0 million at June 30, 2026 and $ 0.5 million at December 31, 2025.

The following table presents changes in our contract assets during the three and six months ended June 30, 2026 and 2025 (in thousands):

Beginning of Period

2 unchanged sentences

Unbilled membership dues receivable

Three months ended March 31, 2026

Three months ended March 31, 2025

Three months ended June 30, 2026

Three months ended June 30, 2025

Six months ended June 30, 2026

Six months ended June 30, 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 $ 5.1 million at March 31, 2026 and $ 3.5 million at December 31, 2025, respectively.

The unrecognized or deferred revenues related to membership dues in our Condensed Consolidated Balance Sheets were approximately $ 5.8 million at June 30, 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.

Generally, customer advances, and corresponding performance obligation are satisfied within 12 months of the date of receipt of advance payment.

Generally, customer advances, and corresponding performance obligations are satisfied within 12 months of the date of receipt of advance payment.

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 $ 1.7 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):

Customer advance deposits were approximately $ 1.7 million at both June 30, 2026 and at December 31, 2025.

The following table presents changes in our contract liabilities during the three and six months ended June 30, 2026 and 2025 (in thousands):

Beginning of Period

2 unchanged sentences

Deferred membership dues revenue

Three months ended March 31, 2026

Three months ended March 31, 2025

Three months ended June 30, 2026

Three months ended June 30, 2025

Six months ended June 30, 2026

Six months ended June 30, 2025

Customer advance deposits

Three months ended March 31, 2026

Three months ended March 31, 2025

Three months ended June 30, 2026

Three months ended June 30, 2025

Six months ended June 30, 2026

Six months ended June 30, 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 March 31, 2026 and December 31, 2025 consists of the following (in thousands):

Property and equipment at June 30, 2026 and December 31, 2025 consists of the following (in thousands):

Land and land improvements

5 unchanged sentences

Property and equipment, net

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

As of June 30, 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.

As of June 30, 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 three months of 2026 and 2025, no triggering events were present.

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

Operating Leases

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

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 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):

The weighted average remaining lease term on operating leases was approximately 3.6 years and 3.9 years at June 30, 2026 and December 31, 2025, respectively.

During the first six months of both 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 June 30, 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 7.0 % at both March 31, 2026 and December 31, 2025.

The weighted average discount rate on operating leases was 7.0 % at both June 30, 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 March 31, 2026 there were approximately 27.6 years remaining on the golf course and related facilities finance lease.

At June 30, 2026 there were approximately 27.3 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 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):

The net asset value of finance leases, excluding leasehold improvements was $ 1.5 million and $ 1.6 million at June 30, 2026 and December 31, 2025, respectively.

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

At June 30, 2026, the vehicles, golf course maintenance equipment and restaurant equipment and the landfill operations equipment have remaining lease terms ranging from less than 1 year to 5.0 years.

The weighted average remaining lease term on the vehicles and equipment leases was approximately 3.6 and 3.8 years at both June 30, 2025 and December 31, 2025, respectively.

Leased property and associated obligations under finance leases at June 30, 2026 and December 31, 2025 consists of the following (in thousands):

Leased property under finance leases

4 unchanged sentences

Total obligations under finance leases

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):

The weighted average discount rate on finance leases was 6.7 % at both June 30, 2026 and December 31, 2025.

For the three and six months ended June 30, 2026 and 2025, components of lease expense were as follows (in thousands):

Three Months Ended

Six Months Ended

Operating lease cost:

4 unchanged sentences

Total finance lease cost

For the twelve months ending March 31, future commitments under long-term, operating and finance leases are as follows (in thousands):

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

Total lease payments

2 unchanged sentences

Long-term portion of obligations under leases

Basic 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 .

Basic Net Income (Loss) per Share

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

For both the three and six months ended June 30, 2026 and 2025, the weighted average number of common shares outstanding was 3,899,431 .

Term Loans and Line of Credit Agreements

3 unchanged sentences

The remaining proceeds of approximately $ 10.4 million were deposited into a project fund account for which those proceeds are to fund future costs of 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.

At June 30, 2026 and December 31, 2025 the balance of “Restricted Cash” is $ 8.2 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 March 31, 2026 and December 31, 2025.

Avalon was in compliance with the 2022 Term Loan Agreement covenants at June 30, 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 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.

At both June 30, 2026 and December 31, 2025, approximately $ 3.2 million was outstanding under the Line of Credit Agreement.

At June 30, 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 March 31, 2026, the interest rate on the Line of Credit Agreement was 7.00 %.

At June 30, 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 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

Avalon was in compliance with the Line of Credit Agreements covenants at June 30, 2026 and December 31, 2025.

During the six months ended June 30, 2026 and 2025, the weighted average interest rate on outstanding borrowings was 6.10 % and 6.17 %, respectively.

Obligations under the Company’s debt agreements at June 30, 2026 and December 31, 2025 consist of the following (in thousands):

June 30, 2026

Debt Issuance Costs

7 unchanged sentences

Long-term debt

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.

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

During the three months ended June 30, 2026, net income attributable to Avalon Holdings Corporation shareholders was $ 0.9 million compared to net income attributable to Avalon Holdings Corporation shareholders of $ 0.3 million during the three months ending June 30, 2025.

During the six months ended June 30, 2026, a net loss attributable to Avalon Holdings Corporation shareholders was $ 0.4 million compared to a net loss attributable to Avalon Holdings Corporation shareholders of $ 1.2 million during the six months ended June 30, 2025.

Avalon recorded a state income tax provision in both the three and six month periods ended June 30, 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 and state net deferred tax assets, the overall effective tax rate in both periods reflects taxes owed in certain U.S state jurisdictions.

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

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.

26 unchanged sentences

Treasury securities over a period consistent with the expected term.

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

At June 30, 2026 and 2025 there are no outstanding options.

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

25 unchanged sentences

Avalon’s primary business segment, the waste management services segment, provides hazardous and nonhazardous brokerage and management services to industrial, commercial, municipal and governmental customers, captive landfill management for an industrial customer and salt water injection well operations.

Avalon’s golf and related operations segment consists of four golf courses and associated clubhouses which provide dining and banquet facilities, a hotel which provides lodging and resort related amenities including dining, banquet and conference facilities, a multipurpose recreation center, a med spa and dermatology center.

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

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

For the three and six months ending June 30, 2026 and 2025, 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.

6 unchanged sentences

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

Three months ending March 31, 2026

Three months ending June 30, 2026

Income (loss) before income taxes:

4 unchanged sentences

Income (loss) before taxes

Three months ending March 31, 2025

Three months ending June 30, 2025

Income (loss) before income taxes:

4 unchanged sentences

Income (loss) before taxes

Six months ending June 30, 2026

Income (loss) before income taxes:

Cost of operations

Selling, general and administrative

Depreciation and amortization

Interest expense, net

Income (loss) before taxes

Six months ending June 30, 2025

Income (loss) before income taxes:

Cost of operations

Selling, general and administrative

Depreciation and amortization

Interest expense, net

Income (loss) before taxes

Identifiable assets:

2 unchanged sentences

Elimination of intersegment receivables

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.

In comparing total assets at June 30, 2026 with those at December 31, 2025, the increase in the total assets of the waste management services segment of approximately $ 0.3 million was primarily a result intersegment transactions, which are eliminated in consolidation.

The increase in total assets of the golf and related operations segment of $ 1.0 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.

The increase in corporate total assets of approximately $ 1.4 million was primarily due to an increase in cash, receivables and intersegment transactions, which are eliminated in consolidation.

Certain Relationships and Related Transactions

8 unchanged sentences

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

At March 31, 2026 and December 31, 2025, respectively, Avalon owns approximately 47 % of AWMS Holdings, LLC.

At June 30, 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.

1 unchanged sentence

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

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.

During the three months ended June 30, 2026 and 2025, net loss attributable to the noncontrolling interest in AWMS Holdings, LLC was $ 36,000 and $ 22,000 , respectively.

During the six months ended June 30, 2026 and 2025, net loss attributable to the noncontrolling interest in AWMS Holdings, LLC was $ 54,000 and $ 90,000 , 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 $ 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.

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.

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 March 31, 2026 and December 31, 2025.

Avalon is the majority owner of Avalon Med Spa, LLC owning 50.1 % of the company at both June 30, 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.

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.

During the three months ended June 30, 2026 and 2025, net loss attributable to the noncontrolling interest in Avalon Med Spa, LLC was approximately $ 39,000 and $ 4,000 , respectively.

During the six months ended June 30, 2026 and 2025, net loss attributable to the noncontrolling interest in Avalon Med Spa, LLC was approximately $ 66,000 and $ 67,000 , respectively.

Avalon Dermatology, LLC

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

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.

During the three months ended June 30, 2026 net income attributable to noncontrolling interest in Avalon Dermatology, LLC was approximately $ 200 .

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

During the six months ended June 30, 2026 and 2025, net loss attributable to the noncontrolling interest in Avalon Dermatology, LLC was approximately $ 600 and $ 93,000 , respectively

Injection Wells Suspension

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Liquidity and Capital Resources

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.

For the six months ended June 30, 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 as further described below.

2022 Term Loan Agreement

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.

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The remaining proceeds of approximately $10.4 million were deposited into a project fund account for which those proceeds are to fund future costs of 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.

At June 30, 2026 and December 31, 2025 the balance of “Restricted Cash” is $8.2 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 March 31, 2026 and December 31, 2025.

Avalon was in compliance with the 2022 Term Loan Agreement covenants at June 30, 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 .

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.

Line of Credit Agreement

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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 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.

At both June 30, 2026 and December 31, 2025, approximately $3.2 million was outstanding under the Line of Credit Agreement.

At June 30, 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 March 31, 2026, the interest rate on the Line of Credit Agreement was 7.00%.

At June 30, 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.

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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 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.

Avalon was in compliance with the Line of Credit Agreements covenants at June 30, 2026 and December 31, 2025.

During the six months ended June 30, 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 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.

During the six months ended June 30, 2026, Avalon incurred capital expenditures in the amount of $1.3 million of which $1.2 million was paid to vendors.

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

For the six months ended June 30, 2026 expenditures primarily related to the remodeling of The Grand Resort, the initial phase of the Squaw Creek pool renovation and a new roof on the clubhouse at the Squaw Creek property.

For the six months ended June 30, 2025 expenditures primarily relate to the continued renovation of The Grand Resort.

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

Avalon’s aggregate capital expenditures in 2026 are expected to be in the range of $3.5 million to $4.5 million.

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

Capital expenditures principally relate to 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 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.

At June 30, 2026 and December 31, 2025, there was a working capital surplus of approximately $0.4 million and $0.1 million, respectively.

Working capital was positively impacted by an increase in cash, accounts receivable, inventory and a decrease in accounts payable.

Accounts receivable increased to $10.2 million at June 30, 2026 compared with $9.8 million at December 31, 2025.

Accounts receivable related to the golf and related operations segment increased approximately $1.1 million at June 30, 2026 compared to December 31, 2025 due to the associated timing of annual membership renewals.

Accounts receivable related to our waste management services segment decreased approximately $0.7 million at June 30, 2026 compared to December 31, 2025 as a result of a decrease in billings and the timing of receipts on receivables.

Unbilled membership dues receivable was approximately $1.0 million at June 30, 2026 compared to $0.5 million at December 31, 2025.

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

Inventory was approximately $1.8 million at June 30, 2026 compared to $1.6 million at December 31, 2025.

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 $6.6 million at June 30, 2026 compared to $8.0 million at December 31, 2025.

Accounts payable related to our golf and related operations increased $1.0 million at June 30, 2026 compared to December 31, 2025, due to an increase in golf operations along with associated timing of vendor payments in the ordinary course of business.

Accounts payable related to the waste management segment decreased $2.4 million due to a decrease in business along with the associated timing of vendor payments in the ordinary course of business.

Deferred revenue relating to membership dues was approximately $5.8 million at June 30, 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.

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.

Accrued payroll and other compensation was approximately $1.6 million at June 30, 2026 compared to $1.2 million at December 31, 2025.

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

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 Segment

Waste Management Services 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.

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.

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, as of June 30, 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;

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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 first quarter of 2026 compared with the first quarter of 2025

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

Overall Performance

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.

Net operating revenues increased to $20.9 million in the second quarter of 2026 compared with $20.3 million in the second quarter of 2025.

Net operating revenues of the waste management services segment were approximately $10.1 million in the second quarter of 2026 compared to $9.7 million in the second quarter of 2025.

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

Net operating revenues of the golf and related operations segment were approximately $10.8 million in the second quarter of 2026 compared to $10.5 million in the second quarter of 2025.

The increase in net operating revenues of the golf and related operations was a result of increased sales related to food and beverage during the second quarter of 2026 compared to the second quarter of 2025.

Total cost of operations related to the waste management services segment increased to $7.7 million in the second quarter of 2026 compared with $7.5 million in the second 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 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.

Total cost of operations related to the golf and related operations segment decreased to $8.3 million in the second quarter of 2026 compared to $8.6 million in the second quarter of 2025.

The decrease in the cost of operations between periods was primarily a result of cost cutting efforts implemented with specific focus on increasing profit margins.

Depreciation and amortization expense was approximately $0.9 million and $1.0 million in the second quarter of 2026 and 2025, respectively.

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

Consolidated selling, general and administrative expenses were approximately $2.6 million in the second quarter of 2026 compared to $2.5 million in the second quarter of 2025.

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

Interest expense was approximately $0.5 million in both the second quarter of 2026 and 2025, respectively.

During the three months ended June 30, 2026 and 2025, the weighted average interest rate on outstanding borrowings was 6.10% and 6.17%, respectively.

Net income attributable to Avalon Holdings Corporation common shareholders was $0.9 million, or $0.23 per share, in the second quarter of 2026 compared with net income attributable to Avalon Holdings Corporation common shareholders of $0.3 million, or $0.07 per share, in the second quarter of 2025.

Avalon recorded a state income tax provision in both the second quarters of 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 reflect taxes owed in certain U.S state jurisdictions.

Avalon’s income tax benefit 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.

Segment Performance

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Waste Management Services Segment

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 net operating revenues of the waste management services were approximately $10.1million in the second quarter of 2026 compared with $9.7 million in the second 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 $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.

The net operating revenues of the waste disposal brokerage and management services business were approximately $9.3 million in the second quarter of 2026 compared to $8.9 million in the second quarter of 2025.

Continuous work in the waste disposal brokerage business increased by approximately $0.3 million between periods.

Net operating revenues related to continuous work were approximately $6.9 million in the second quarter of 2026 compared with $6.6 million in the second quarter of 2025.

In addition, event work net operating revenues related to multiple projects increased by approximately $0.1 million during second quarter of 2026 when compared to second 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 $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.

Event work net operating revenues were approximately $2.4 million in the second quarter of 2026 compared with $2.3 million in the second quarter of 2025.

The net operating revenues of the captive landfill management operations were approximately $0.8 million in both the second quarter of 2026 and 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 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.

Costs of operations related to the waste management services segment were approximately $7.7 million in the second quarter of 2026 compared with $7.5 million in the second quarter of 2025.

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 24% in the second quarter of 2026 compared to 23% in the second quarter of 2025.

The increase in the overall gross margin percentage was primarily attributable to the higher gross profit generated from event work projects during second quarter of 2026.

Income before income taxes for the waste management services segment was approximately $1.0 million in both the second quarter of 2026 and 2025.

Income before income taxes of the waste brokerage and management services business was approximately $1.0 million in both the second quarter of 2026 and 2025.

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

During both the second quarter of 2026 and 2025, the salt water injection wells incurred a loss before income taxes of less than $0.1 million primarily due to legal and professional costs incurred relating to Avalon’s appeal and mandamus processes.

Golf and Related Operations Segment

Net operating revenues of the golf and related operations segment were approximately $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.

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

Net operating revenues of the golf and related operations segment were approximately $10.8 million in the second quarter of 2026 compared to $10.5 million in the second 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 hotel which provides lodging, dining, banquet and conference facilities and other resort related amenities and a multipurpose recreation center.

Food, beverage and merchandise sales were approximately $4.1 million in the second quarter of 2026 compared to $3.8 million in the second quarter of 2025.

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

Other golf and related operation revenues was approximately $6.7 million in the second quarter of 2026 compared to $6.8 million in the second quarter of 2025.

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

Net operating revenues related to room rental were approximately $2.2 million in the second quarter of 2026 compared to $2.0 million in the second quarter of 2025.

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

Greens fees and associated cart rentals were approximately $1.2 million in the second quarter of 2026 compared to $1.1 million in the second quarter of 2025.

The increase in green fees and associated cart rental was a result of an increase in rounds played in the second quarter of 2026 compared to the second quarter of 2025.

Other revenues consisting of athletic, fitness, salon and spa related activities were approximately $1.5 million in the second quarter of 2026 compared to $1.9 million in the second quarter of 2025.

Total cost of operations for the golf and related operations segment were $8.3 million in the second quarter of 2026 compared with $8.6 million in the second quarter of 2025.

Cost of food, beverage and merchandise was approximately $1.8 million in the second quarter of 2026 compared to $1.7 million in the second quarter of 2025.

The increase in cost of food is a result of increased food, beverage and merchandise sales in the second quarter of 2026 compared to the second quarter of 2025.

The cost of food, beverage and merchandise sales was approximately 43% of associated revenue in the second quarter of 2026 compared to 46% in the second quarter of 2025.

Golf and related operations operating costs decreased to approximately $6.6 million in the second quarter of 2026 compared with $6.9 million in the second quarter of 2025.

The decrease in operating costs between periods is primarily related to a decrease in employee related costs in the second quarter of 2026 compared to the second quarter of 2025.

The golf and related operations recorded income before income taxes of $1.2 million in the second quarter of 2026 compared with income before income taxes of $0.6 million in the second quarter of 2025.

The change between periods was primarily a result of a increase in business activity in the second quarter of 2026 compared to the second quarter of 2025.

General Corporate Expenses

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

Interest Expense

Interest expense was approximately $0.5 million in both second quarter of 2026 and second quarter of 2025.

During the three months ended June 30, 2026 and 2025, the weighted average interest rate on outstanding borrowings was 6.10% and 6.17%, respectively.

Net income attributable to Avalon Holdings Corporation common shareholders was $0.9 million in the second quarter of 2026 compared to net income attributable to Avalon Holdings Corporation common shareholders of $0.3 million in the second quarter of 2025.

Avalon recorded a state income tax provision in both the second 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.

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 six months of 2026 compared with the first six months of 2025

Overall Performance

Net operating revenues increased to $38.6 million in the first six months of 2026 compared with $36.3 million in the first six months of 2025.

Net operating revenues of the waste management services segment were approximately $21.6 million in the first six months of 2026 compared to $19.4 million in the first six months of 2025.

The increase in net operating revenues of the waste management services segment was a primarily a result of an increase in both continuous and event work during the first six months of 2026 compared to the first six months of 2025.

Net operating revenues of the golf and related operations segment were approximately $16.9 million in both the first six months of 2026 and 2025.

Total cost of operations related to the waste management services segment increased to $16.6 million in the first six months of 2026 compared with $15.1 million in the first six months of 2025.

Total cost of operations related to the golf and related operations segment decreased to $14.2 million in the first six months of 2026 compared to $14.7 million in the first six months of 2025.

The decrease in costs as a percentage of revenue was primarily a result of cost cutting efforts implements with specific focus on increasing profit margins.

Depreciation and amortization expense was approximately $1.9 million in both the first six months of 2026 and 2025.

Consolidated selling, general and administrative expenses were approximately $5.3 million in the first six months of 2026 compared to $5.0 million in the first six months of 2025.

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

Interest expense was approximately $1.0 million in both the first six months of 2026 and the first six months of 2025.

During the six months ended June 30, 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 $0.3 million, or $0.09 per share, in the first six months of 2026 compared with a net loss attributable to Avalon Holdings Corporation common shareholders of $1.2 million, or $0.31 per share, in the first six months of 2025.

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 increased to $21.6 million in the first six months of 2026 compared with $19.4 million in the first six months of 2025.

The net operating revenues of the waste disposal brokerage and management services business were approximately $20.0 million in the first six months of 2026 compared to $17.7 million in the first six months of 2025.

Continuous work of the waste disposal brokerage business increased by approximately $1.5 million between periods.

Net operating revenues related to continuous work were approximately $13.9 million in the first six months of 2026 compared with $12.4 million in the first six months of 2025.

Event work net operating revenues related to multiple projects increased by approximately $0.8 million during first six months of 2026 when compared to first six months 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 year to year.

Event work net operating revenues were approximately $6.1 million in the first six months of 2026 compared with $5.3 million in the first six months of 2025.

The net operating revenues of the captive landfill management operations were approximately $1.6 million in the first six months of 2026 compared to $1.7 million in the first six months 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 increased to $16.6 million in the first six months of 2026 compared with $15.1 million in the first six months of 2025.

The overall gross margin percentage of the waste brokerage and management services business was approximately 23% in the first six months of 2026 compared to 22% in the first six months of 2025.

The increase in the overall gross margin percentage was primarily attributable to the increase in gross profit generated from event work projects during first six months of 2026.

Income before income taxes for the waste management services segment was approximately $2.2 million in the first six months of 2026 compared to $1.8 million in the first six months of 2025.

Income before income taxes of the waste brokerage and management services business was approximately $2.1 million in the first six months of 2026 compared to $1.6 million in the first six months of 2025.

The increase in income before income taxes was primarily attributable to a increase in event work projects during the first six months of 2026 compared to the first six months of 2025.

Income before income taxes of the captive landfill operations were approximately $0.2 million for the first six months of 2026 compared to $0.3 million for the first six months of 2025.

During both the first six months 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 incurred relating to Avalon’s mandamus processes.

Golf and Related Operations Segment

Net operating revenues of the golf and related operations segment were approximately $16.9 million in both the first six months of 2026 and 2025.

Food, beverage and merchandise sales were approximately $6.1 million in both the first six months of 2026 compared to $5.8 million in the first six months of 2025.

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

Other net operating revenues related to the golf and related operations were approximately $10.8 million in the first six months of 2026 compared to $11.1 million in the first six months of 2025.

Membership dues revenue was approximately $3.7 million in both the first six months of 2026 and 2025.

Net operating revenues related to room rental was approximately $3.3 million in the first six months of 2026 compared to $3.1 million in the first six months of 2025.

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

Greens fees and associated cart rentals were approximately $1.2 million in the first six months of 2026 compared to $1.1 million in the first six months of 2025.

The increase in green fees and associated cart rental was a result of an increase in rounds played during the first six months of 2026 compared to the first six months of 2025.

Other revenues consisting of athletic, fitness, salon and spa related activities were approximately $2.6 million in the first six months of 2026 compared to $3.2 million the first six months of 2025.

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.

Total cost of operations for the golf and related operations segment were $14.2 million in the first six months of 2026 compared with $14.7 million in the first six months of 2025.

Cost of food, beverage and merchandise was approximately $2.8 million in the first six months of 2026 compared to $2.7 million in the first six months of 2025.

The increase in cost of food is a result of increased food, beverage and merchandise sales in the first six months of 2026 compared to the first six months of 2025 The cost of food, beverage and merchandise sales was approximately 45% of associated revenue in the first six months of 2026 compared to 47% in the first six months of 2025.

Golf and related operations operating costs decreased to approximately $11.4 million in the first six months of 2026 compared with $12.0 million in the first six months of 2025.

The decrease in operating costs between periods is primarily related to a decrease in employee related costs in the first six months of 2026 compared to the first six months of 2025

The golf and related operations recorded net income before income taxes of $24,000 in the first six months of 2026 compared with a net loss before income taxes of $0.7 million in the first six months of 2025.

The change between periods was primarily a result of an increase in room rental, food beverage and merchandise revenue, coupled with cost cutting efforts implemented with a specific focus on reducing employee related 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.

General Corporate Expenses

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

General corporate expenses were $1.6 million in the first six months of 2026 compared to $1.5 million in the first six months of 2025.

The change between periods was primarily a result of a slight increase in professional fees.

Interest Expense

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.

Interest expense was approximately $1.0 million for both the first six months in 2026 and the first six months of 2025.

During the six months ended June 30, 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 $0.4 million in the first six months of 2026 compared to a net loss attributable to Avalon Holdings Corporation common shareholders of $1.2 million in the first six months of 2025.

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

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

Avalon’s income tax on the income (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.

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

Although Avalon was able to retain and attract a large number of members of the Avalon Golf and Country Club, as of June 30, 2026, Avalon has not attained its membership goals.

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

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

11 unchanged sentences

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

What changed 10-Q

Item 1. Financial Statements