Babcock & Wilcox Enterprises, Inc. 10-K

Item 7A. Quantitative and Qualitative Disclosures About Market Risk Our exposure to market risk from changes in interest rates relates primarily to our cash equivalents and our investment portfolio, which primarily consists of investments in U.S. government obligations and highly liquid money market instruments denominated in U.S. dollars. We are averse to principal loss and seek to ensure the safety and preservation of our invested funds by limiting default risk, market risk and reinvestment risk. Our investments are classified as available-for-sale. We have operations in many foreign locations, and our financial results could be significantly affected by factors such as changes in foreign currency exchange rates or weak economic conditions in those foreign markets since the functional currency of our foreign entities is not the U.S. dollar. Foreign currency transaction gains and losses on intercompany loans that are not designated as permanent loans are recorded in earnings. Our primary foreign currency exposures are Canadian dollar, Mexican peso, Euro, Danish krone and British pound. If the balances of these intercompany loans as of December 31, 2025 were to remain constant, a 100-basis point change in foreign currency exchange rates would not materially impact our earnings. ITEM 8. Consolidated Financial Statements and Supplemental Data REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and the Board of Directors of Babcock & Wilcox Enterprises, Inc. Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheet of Babcock & Wilcox Enterprises, Inc. (the "Company") as of December 31, 2025, the related consolidated statements of operations, comprehensive income (loss), stockholders' deficit, and cash flows for the year then ended, and the related notes and schedule listed in Item 15 (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025, and the results of its operations and its cash flows for the year then ended , in conformity with accounting principles generally accepted in the United States of America. We also have audited the adjustments to the 2024 and 2023 consolidated financial statements to retrospectively reflect the operations of the Company's Allen-Sherman-Hoff ("ASH") Division as discontinued operations as discussed in Note 5, and to recast the segment disclosures in Note 6. In our opinion, such adjustments are appropriate and have been properly applied. We were not engaged to audit, review, or apply any procedures to the 2024 or 2023 consolidated financial statements of the Company other than with respect to the adjustments and, accordingly, we do not express an opinion or any other form of assurance on the 2024 and 2023 consolidated financial statements taken as a whole. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and our report dated March 16, 2026, expressed an adverse opinion thereon. Basis for Opinion These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. 45 Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Over Time Revenue Recognition As described in Note 2 to the Company's consolidated financial statements, revenue that the Company recognizes on fixed-price contracts over the contract term ("over time") primarily relates to customized, engineered solutions and construction services. Typically, revenue is recognized over time using the cost-to-cost input method that uses costs incurred to date relative to total estimated costs at completion to measure progress toward satisfying the Company's performance obligations. Substantially all of the Company's revenue recognized over time under the cost-to-cost input method contains a single performance obligation as the interdependent nature of the goods and services provided prevents them from being separately identifiable within the contract. We identified revenue recognition on certain fixed-price contracts as a critical audit matter due to the significant management judgment involved in estimating total costs and profit for measuring progress to completion to recognize revenue for fixed-price contracts. Auditing these elements of revenue recognition involved especially subjective and challenging auditor judgment due to the nature of audit evidence and extent of audit effort required to address these matters. The primary procedures we performed to address this critical audit matter included: ◦ Testing the completeness, existence, and accuracy of estimated costs and progress to completion calculations for certain fixed-price contracts by validating the underlying project data and assumptions used as inputs through the inspection of relevant source documents including contracts, project budgets and activity reports, invoices of costs incurred to date, and inquiry of project managers. ◦ Evaluating management's ability to estimate costs and progress to completion by performing a retrospective review of estimated project costs to actual project costs and investigating variances outside of predetermined thresholds through the inspection of relevant source documents. Effect of Material Weakness in Internal Control over Financial Reporting As disclosed in management's report on internal control over financial reporting, the Company identified material weaknesses as of December 31, 2025. These material weaknesses included ineffective controls across the following components of the Internal Control - Integrated Framework (2013) issued by COSO: (i) Control Environment, (ii) Control Activities, and (iii) Information and Communication. We identified the evaluation of the sufficiency of audit evidence as a critical audit matter. Evaluating the sufficiency of audit evidence obtained was especially challenging as it required an increased audit effort because the pervasiveness of the material weaknesses noted above affected substantially all financial statement account balances and disclosures. The primary procedures we performed to address this critical audit matter included: ◦ Lowering the threshold for investigating differences between recorded amounts and independent expectations developed by us that we would have otherwise used to test certain financial statement accounts. ◦ Increasing the number of selections that we would have otherwise made to test certain financial statement accounts. 46 ◦ Directly testing the completeness and accuracy of information produced by the Company, and increasing the number of selections that we would have otherwise made to test the completeness and accuracy of certain information produced by the Company. /s/ BDO USA, P.C. We have served as the Company's auditor since 2025. Cleveland, Ohio March 16, 2026 47 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and the Board of Directors of Babcock & Wilcox Enterprises, Inc. Opinion on the Financial Statements We have audited, before the effects of the retrospective adjustments to reflect the operations of the Allen-Sherman-Hoff Division ("ASH") as discontinued operations discussed in Note 5 and for a change in the composition of reportable segments discussed in Note 6 to the consolidated financial statements, the consolidated balance sheet of Babcock & Wilcox Enterprises, Inc. and subsidiaries (the "Company") as of December 31, 2024, the related consolidated statements of operations, comprehensive (loss) income, stockholders' equity, and cash flows, for the years ended December 31, 2024 and 2023, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the "financial statements") (the 2024 and 2023 financial statements before the effects of the retrospective adjustments discussed in Notes 5 and 6 to the financial statements are not presented herein). In our opinion, the 2024 and 2023 financial statements, before the effects of the retrospective adjustments to reflect the operations of ASH as discontinued operations discussed in Note 5 and for a change in the composition of reportable segments discussed in Note 6 to the financial statements, present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows for the years ended December 31, 2024 and 2023, in conformity with accounting principles generally accepted in the United States of America. We were not engaged to audit, review, or apply any procedures to the retrospective adjustments to reflect the operations of ASH as discontinued operations discussed in Note 5 or for the change in the composition of reportable segments discussed in Note 6 to the consolidated financial statements, and accordingly, we do not express an opinion or any other form of assurance about whether such retrospective adjustments are appropriate and have been properly applied. Those retrospective adjustments were audited by the successor auditor. Going Concern The 2024 financial statements of the Company were prepared assuming that the Company would continue as a going concern. As of the date of issuance of the Company's 2024 financial statements, the Company had uncertainty regarding its ability to refinance its Credit Agreement by November 30, 2025 and its Senior Notes by February 28, 2026, which raised substantial doubt about its ability to continue as a going concern. Management's plans regarding these matters were also described in the 2024 financial statements. The 2024 financial statements did not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ Deloitte & Touche LLP Cleveland, Ohio March 31, 2025 (January 16, 2026, as to the effects of discontinued operations for Diamond Power discussed in Note 5). We began serving as the Company's auditor in 2014. In 2025 we became the predecessor auditor. 48 BABCOCK & WILCOX ENTERPRISES, INC. CONSOLIDATED STATEMENTS OF OPERATIONS Year ended December 31, (in thousands, except per share amounts) 2025 2024 2023 Revenues $ 587,676 $ 581,039 $ 587,448 Costs and expenses: Cost of operations 443,825 454,326 465,977 Selling, general and administrative expenses 119,481 124,541 134,940 Research and development costs 1,457 5,133 6,462 Impairment of long-lived assets 950 3,729 — Loss (gain) on asset disposals, net 1,226 ( 354 ) 134 Total costs and expenses 566,939 587,375 607,513 Operating income (loss) 20,737 ( 6,336 ) ( 20,065 ) Other (expense) income: Interest expense ( 37,532 ) ( 46,145 ) ( 42,561 ) Interest income 1,486 650 907 Gain (loss) on debt extinguishment 1,836 ( 7,267 ) — Benefit plans, net ( 9,782 ) ( 31,230 ) ( 38,406 ) Foreign exchange 135 237 ( 2,327 ) Other expense, net ( 1,448 ) ( 1,380 ) ( 1,156 ) Total other expense ( 45,305 ) ( 85,135 ) ( 83,543 ) Loss from continuing operations before income tax expense ( 24,568 ) ( 91,471 ) ( 103,608 ) Income tax expense 8,280 12,801 5,604 Loss from continuing operations ( 32,848 ) ( 104,272 ) ( 109,212 ) (Loss) income from discontinued operations, net of tax ( 3,311 ) 44,357 ( 87,996 ) Net loss attributable to stockholders ( 36,159 ) ( 59,915 ) ( 197,208 ) Less: Dividends on Series A Preferred Stock 14,859 14,859 14,858 Net loss attributable to stockholders of common stock $ ( 51,018 ) $ ( 74,774 ) $ ( 212,066 ) Basic and diluted loss per share Continuing operations $ ( 0.45 ) $ ( 1.30 ) $ ( 1.39 ) Discontinued operations ( 0.03 ) 0.48 ( 0.99 ) Basic and diluted loss per share $ ( 0.48 ) $ ( 0.82 ) $ ( 2.38 ) Shares used in the computation of loss per share: Basic and diluted 105,421 91,717 89,011 See accompanying notes to the Consolidated Financial Statements. 49 BABCOCK & WILCOX ENTERPRISES, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) Year ended December 31, (in thousands) 2025 2024 2023 Net loss $ ( 36,159 ) $ ( 59,915 ) $ ( 197,208 ) Other comprehensive income (loss): Currency translation adjustments 973 ( 9,459 ) 5,555 Reclassification of currency translation adjustments to net income (loss) 68,358 ( 11,250 ) — Benefit obligations: Pension and post retirement adjustments, net of tax 1,351 410 870 Other comprehensive income (loss) 70,682 ( 20,299 ) 6,425 Total comprehensive income (loss) 34,523 ( 80,214 ) ( 190,783 ) Comprehensive (income) loss attributable to non-controlling interest ( 23 ) 156 110 Comprehensive income (loss) attributable to stockholders $ 34,500 $ ( 80,058 ) $ ( 190,673 ) See accompanying notes to the Consolidated Financial Statements. 50 BABCOCK & WILCOX ENTERPRISES, INC. CONSOLIDATED BALANCE SHEETS December 31, (in thousands, except per share amounts) 2025 2024 Cash and cash equivalents $ 89,456 $ 23,399 Current restricted cash 84,991 94,167 Accounts receivable – trade, net of allowance for credit losses of $ 2.1 million and $ 1.3 million as of December 31, 2025 and December 31, 2024, respectively 118,383 91,767 Contracts in progress 72,808 79,149 Inventories, net 60,880 58,295 Other current assets 44,158 23,534 Current assets held for sale — 183,155 Total current assets 470,676 553,466 Net property, plant and equipment, and finance leases 65,533 60,860 Goodwill 53,097 51,411 Intangible assets, net 15,267 17,640 Right-of-use assets 17,651 16,902 Long-term restricted cash 26,913 10,042 Deferred tax assets 945 167 Other assets 12,856 16,499 Total assets 662,938 726,987 Accounts payable 69,192 88,291 Accrued employee benefits 4,575 3,830 Advance billings on contracts 111,987 56,381 Accrued warranty expense 3,584 2,654 Financing lease liabilities 1,894 1,644 Operating lease liabilities 3,819 3,204 Other accrued liabilities 40,397 28,006 Current senior notes 83,873 — Current borrowings 67,373 125,137 Current liabilities held for sale — 97,506 Total current liabilities 386,694 406,653 Senior notes, net of current portion — 340,227 Senior Notes due 2030 150,970 — Borrowings, net of current portion 18,865 8,556 Pension and other postretirement benefit liabilities 176,191 192,665 Finance lease liabilities, net of current portion 26,742 28,501 Operating lease liabilities, net of current portion 15,125 13,801 Deferred tax liability 10,666 9,800 Other noncurrent liabilities 9,226 9,956 Total liabilities 794,479 1,010,159 Stockholders' deficit: Preferred Stock, par value $ 0.01 per share, authorized shares of 20,000 ; issued and outstanding shares of 7,669 at both December 31, 2025 and 2024 77 77 Common stock, par value $ 0.01 per share, authorized shares of 500,000 ; issued and outstanding shares of 130,447 and 95,138 at December 31, 2025 and 2024, respectively 5,569 5,208 Capital in excess of par value 1,691,412 1,558,828 Treasury stock at cost, 2,690 and 2,379 shares at December 31, 2025 and 2024, respectively ( 115,886 ) ( 115,500 ) Accumulated deficit ( 1,696,735 ) ( 1,645,716 ) Accumulated other comprehensive loss ( 15,978 ) ( 86,660 ) Stockholders' deficit attributable to shareholders ( 131,541 ) ( 283,763 ) Non-controlling interest — 591 Total stockholders' deficit ( 131,541 ) ( 283,172 ) Total liabilities and stockholders' deficit $ 662,938 $ 726,987 See accompanying notes to the Consolidated Financial Statements. 51 BABCOCK & WILCOX ENTERPRISES, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT Common Stock Preferred Stock Capital In Excess of Par Value Treasury Stock Accumulated Deficit Accumulated Other Comprehensive Loss Non-controlling Interest Total Stockholders' Deficit (in thousands) Shares Par Value Shares Par Value Balance at December 31, 2022 88,700 $ 5,138 7,669 $ 77 $ 1,537,625 $ ( 113,753 ) $ ( 1,358,875 ) $ ( 72,786 ) $ 485 $ ( 2,089 ) Net loss — — — — — — ( 197,208 ) — 237 ( 196,971 ) Currency translation adjustments — — — — — — — 5,555 ( 110 ) 5,445 Pension and postretirement adjustments, net of tax — — — — — — — 870 — 870 Stock-based compensation charges 749 10 — — 8,656 ( 1,411 ) — — — 7,255 Dividends to preferred stockholders — — — — — — ( 14,859 ) — — ( 14,859 ) Dividends to non-controlling interest — — — — — — — — ( 1 ) ( 1 ) Balance at December 31, 2023 89,449 $ 5,148 7,669 $ 77 $ 1,546,281 $ ( 115,164 ) $ ( 1,570,942 ) $ ( 66,361 ) $ 611 $ ( 200,350 ) Net loss — — — — — — ( 59,915 ) — 136 ( 59,779 ) Currency translation adjustments — — — — — — — ( 20,709 ) ( 156 ) ( 20,865 ) Pension and postretirement adjustments, net of tax — — — — — — — 410 — 410 Stock-based compensation charges 701 10 — — 4,608 ( 336 ) — — — 4,282 Dividends to preferred stockholders — — — — — — ( 14,859 ) — — ( 14,859 ) Common stock offering, net 4,988 50 — — 7,939 — — — — 7,989 Balance at December 31, 2024 95,138 $ 5,208 7,669 $ 77 $ 1,558,828 $ ( 115,500 ) $ ( 1,645,716 ) $ ( 86,660 ) $ 591 $ ( 283,172 ) Net loss — — — — — — ( 36,159 ) — 60 ( 36,099 ) Currency translation adjustments — — — — — — — 69,331 23 69,354 Pension and postretirement adjustments, net of tax — — — — — — — 1,351 — 1,351 Stock-based compensation charges 1,140 19 — — 2,796 ( 386 ) — — — 2,429 Dividends to preferred stockholders — — — — — — ( 14,860 ) — — ( 14,860 ) Common stock offering, net 34,169 342 — — 129,788 — — — — 130,130 Divestiture of non-controlling interest — — — — — — — — ( 556 ) ( 556 ) Dividends to non-controlling interest — — — — — — — — ( 118 ) ( 118 ) Balance at December 31, 2025 130,447 $ 5,569 7,669 $ 77 $ 1,691,412 $ ( 115,886 ) $ ( 1,696,735 ) $ ( 15,978 ) $ — $ ( 131,541 ) See accompanying notes to the Consolidated Financial Statements. 52 BABCOCK & WILCOX ENTERPRISES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS Year ended December 31, (in thousands) 2025 2024 2023 Operating Activities: Net loss from continuing operations $ ( 32,848 ) $ ( 104,272 ) $ ( 109,212 ) Net (loss) income from discontinued operations ( 3,311 ) 44,357 ( 87,996 ) Net loss ( 36,159 ) ( 59,915 ) ( 197,208 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization of long-lived assets 10,137 16,709 20,996 Impairment of long-lived assets 9,917 9,567 56,556 Amortization of deferred financing costs and debt premium 3,503 5,820 5,747 Amortization of guaranty fee 108 2,935 935 Non-cash operating lease expense 3,913 7,357 6,754 (Gain) loss on debt extinguishment ( 1,836 ) 7,267 — Gain on sale of business ( 38,864 ) ( 58,947 ) — Loss on asset disposals 5,651 431 200 Provision for (benefit from) deferred income taxes, including valuation allowances 783 7,102 ( 1,464 ) Mark to market, prior service cost amortization for pension and postretirement plans 9,684 34,911 38,904 Stock-based compensation, net of associated income taxes 2,795 4,692 8,695 Foreign exchange ( 6,081 ) 3,079 2,507 Bad debt (recovery) expense ( 6,443 ) ( 1,148 ) 9,042 Changes in operating assets and liabilities: Accounts receivable – trade, net ( 16,466 ) ( 12,245 ) 13,326 Contracts in progress 19,722 ( 41,580 ) 40,173 Other current and noncurrent assets ( 14,365 ) ( 5,729 ) 10,447 Advance billings on contracts 50,698 ( 3,315 ) ( 47,261 ) Inventories, net ( 7,832 ) ( 6,410 ) ( 8,130 ) Income taxes 168 9,663 ( 6,307 ) Accounts payable ( 57,941 ) 8,143 12,930 Accrued and other current liabilities 15,793 ( 28,537 ) ( 2,586 ) Accrued contract loss ( 4,785 ) ( 2,364 ) 838 Pension liabilities, accrued postretirement benefits and employee benefits ( 10,635 ) ( 16,755 ) ( 5,024 ) Other, net ( 355 ) 534 ( 2,340 ) Net cash used in operating activities ( 68,890 ) ( 118,735 ) ( 42,270 ) Investing Activities: Purchase of property, plant and equipment ( 16,769 ) ( 11,205 ) ( 9,800 ) Proceeds from sale of business and assets 216,266 120,906 — Purchases of securities ( 5,991 ) ( 7,133 ) ( 6,087 ) Sales and maturities of securities 3,507 7,357 8,051 Other, net — 34 ( 102 ) Net cash provided by (used in) investing activities 197,013 109,959 ( 7,938 ) 53 Year ended December 31, (in thousands) 2025 2024 2023 Financing Activities: Borrowings on loan payable 84,605 215,615 252,544 Repayments on loan payable ( 138,884 ) ( 121,944 ) ( 226,629 ) Buyback of Senior Notes due 2026 ( 110,744 ) — — Finance lease payments ( 1,674 ) ( 1,359 ) ( 1,195 ) Payment of holdback funds from acquisition — ( 2,950 ) ( 2,798 ) Payment of Preferred Stock dividends ( 14,859 ) ( 18,573 ) ( 11,144 ) Shares of common stock returned to treasury stock ( 386 ) ( 336 ) ( 1,411 ) Issuance of common stock, net 130,130 7,939 — Payment of non-controlling interest dividends ( 118 ) — — Debt issuance costs ( 6,538 ) ( 8,479 ) ( 658 ) Other, net ( 260 ) ( 179 ) ( 153 ) Net cash (used in) provided by financing activities ( 58,728 ) 69,734 8,556 Effects of exchange rate changes on cash 901 ( 1,263 ) ( 439 ) Net increase (decrease) in cash, cash equivalents and restricted cash 70,296 59,695 ( 42,091 ) Cash, cash equivalents and restricted cash, beginning of period 131,064 71,369 113,460 Cash, cash equivalents and restricted cash at end of period $ 201,360 $ 131,064 $ 71,369 Schedule of cash, cash equivalents and restricted cash: Cash and cash equivalents (1) $ 89,456 $ 26,855 $ 65,335 Current restricted cash 84,991 94,167 5,737 Long-term restricted cash 26,913 10,042 297 Cash, cash equivalents and restricted cash at end of period $ 201,360 $ 131,064 $ 71,369 Income taxes paid, net (2) $ 8,714 $ 7,761 $ 6,731 Interest paid 36,377 37,320 23,067 (1) Includes cash held at discontinued operations of $ 3.5 million and $ 27.3 million at December 31, 2024 and 2023, respectively. (2) Includes income taxes paid of $ 6.4 million, $ 1.0 million and $ 1.3 million in Canada, Indonesia and other countries, respectively, at December 31, 2025. See accompanying notes to the Consolidated Financial Statements. 54 BABCOCK & WILCOX ENTERPRISES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2025 NOTE 1 – BASIS OF PRESENTATION The Consolidated Financial Statements of Babcock & Wilcox Enterprises, Inc. have been prepared in accordance with GAAP. We have eliminated all intercompany transactions and accounts. Unless otherwise noted, discussion of our business and results of operations in this Annual Report on Form 10-K refers to our continuing operations. Liquidity and Going Concern As disclosed in our 2024 Form 10‑K, for the financial period ending and as of December 31, 2024, conditions and events were present and management's plan for mitigation were assessed as insufficient, such that we concluded there was substantial doubt about the Company's ability to continue as a going concern. Due to the various actions completed by management during 2025, including debt restructuring activities, repayment of outstanding debt balances, equity raises, and divestitures of non-core businesses, the Company's liquidity, financial condition and capital structure improved as of December 31, 2025 and through the date of this Form 10-K filing. As a result, we have concluded that conditions and events no longer raise substantial doubt about the Company's ability to continue as a going concern. Operations Our operations are assessed based on one reportable segment as described in Note 6. For financial information about our segment see Note 6 to the Consolidated Financial Statements. NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES Use of estimates We use estimates and assumptions to prepare the Consolidated Financial Statements in conformity with GAAP. Our long-term contracts, warranty obligations, valuation of goodwill, intangible assets, other long-lived assets, business combinations, tax assets, pension and postretirement plans, contingencies and litigation require the use of various management estimates and assumptions. These estimates and assumptions affect the amounts we report in the Consolidated Financial Statements and accompanying notes. Our actual results could differ from these estimates. Management reviews our estimates on an on-going basis. Changes in facts and circumstances may alter such estimates and affect our results of operations and financial position in future periods . Cash and cash equivalents and restricted cash Cash equivalents are highly liquid investments, with maturities of three months or less at the time of purchase. We record cash and cash equivalents as current or long-term restricted cash when we are unable to freely use such cash and cash equivalents for general operating purposes. Refer to Note 17 in the Consolidated Financial Statements for further details. Trade accounts receivable and allowance for credit loss Trade accounts receivable are recorded at the point when customers are billed and represent the amount of consideration we expect to receive in exchange for goods and services transferred and do not bear interest. We establish provisions for expected lifetime losses on accounts receivable based on customer credit quality and forecasted economic conditions. We regularly review our accounts receivable balances and the allowance for credit loss and establish or adjust the allowance as necessary using the specific identification method. Bad debt amounts charged to selling, general and administrative expenses were $ 0.2 million, $ 0.0 million and $ 0.5 million for the years ended December 31, 2025, 2024, and 2023, respectively. The following table summarizes the Allowance for credit loss: 55 Year ended December 31, (in thousands) 2025 2024 Balance at beginning of period $ 1,302 $ 1,537 Charges to costs and expenses 208 ( 53 ) Deductions ( 40 ) 38 Currency translation adjustments and other (1) 675 ( 220 ) Balance at end of period $ 2,145 $ 1,302 (1) 2025 balance includes $ 0.8 million of assets no longer held for sale as of December 31, 2025, offset by other reclassifications and adjustments. See Note 5 to the Consolidated Financial Statements for further information. Contract balances Contracts in progress, a current asset in the Consolidated Balance Sheets, includes revenues and related costs, plus accumulated contract costs that exceed amounts invoiced to customers under the terms of the contracts. Advance billings, a current liability in the Consolidated Balance Sheets, includes amounts on contracts invoiced that exceed accumulated contract costs and revenues and costs recognized under the cost-to-cost input method. Those balances are classified as current based on the life cycle of the associated contracts. Most long-term contracts contain provisions for progress payments. Unbilled revenues do not contain an allowance for credit losses as the expectation is to invoice customers and collectively all amounts due are deemed probable. We review contract price and cost estimates each reporting period as the work progresses and reflect adjustments proportionate to the costs incurred to date relative to total estimated costs at completion in income in the period when those estimates are revised. For all contracts, if a current estimate of total contract cost indicates a loss on a contract, the projected contract loss is recognized in full in Costs of operations in the Consolidated Statements of Operations and an accrual for the estimated loss on the uncompleted contract is recorded in Other accrued liabilities in the Consolidated Balance Sheets. In addition, when we determine that an incomplete contract will not be completed on time and the contract has liquidated damages provisions, we recognize the estimated liquidated damages at the most likely amount we will incur as a reduction of the estimated selling price in the period the change in estimate occurs. These amounts are included in Other accrued liabilities in the Consolidated Balance Sheets. Inventories Inventories are carried at the lower of cost or net realizable value on the first-in, first-out basis ("FIFO") basis. The obsolete inventory reserve was $ 4.6 million and $ 3.1 million as of December 31, 2025 and 2024, respectively. The components of inventories can be found in Note 8 to the Consolidated Financial Statements. Property, plant and equipment Property, plant and equipment are reported at depreciated cost, less any impairment provisions. Property, plant and equipment are depreciated using the straight-line method over estimated economic useful lives of eight to 33 years for buildings and three to 28 years for machinery and equipment. Depreciation expense was $ 4.8 million, $ 4.9 million and $ 8.4 million for the years ended December 31, 2025, 2024 and 2023, respectively. The costs of maintenance, repairs and renewals that do not materially prolong the useful life or increase the capacity of an asset are expensed as incurred. Property, plant and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized when the carrying amount of an asset exceeds the estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition. The amount of the impairment loss recorded is calculated by the excess of the asset carrying amount over its fair value. Fair value is generally determined using a discounted cash flow analysis. Our estimates of cash flow may differ from actual cash flow due to, among other things, technological changes, economic conditions or changes in operating performance. Any changes in such factors may result in future asset impairments and negatively affect our financial position and results of operations. We did not have any impairments relating to property, plant and equipment in for the years ended December 31, 2025, 2024 or 2023. We capitalize project costs, including pre-construction costs and other costs directly related and essential to the development, pre-construction, or construction of a project. Capitalization of development, pre-construction, and construction costs is required while activities are ongoing to prepare an asset for its intended use. Fluctuations in our development, pre- 56 construction, and construction activities could result in significant changes to total expenses and net income. Costs incurred after a project is substantially complete and ready for its intended use are expensed as incurred. Expenditures for repairs and maintenance are expensed as incurred. Impairment of $ 3.7 million related primarily to construction in progress asset for the year ended December 31, 2024. Loss (gain) on assets disposals for the years ended December 31, 2025, 2024 and 2023, respectively, were $ 1.2 million, $( 0.4 ) million and $ 0.1 million. Goodwill Goodwill is generally recorded as a result of a business combination and represents the excess of purchase price over the fair value of the tangible and identifiable net assets acquired. We perform impairment testing of goodwill annually on October 1 or if we determine that impairment indicators are present. In assessing goodwill for impairment, we follow ASC 350, Intangibles – Goodwill and Other, which permits a qualitative assessment of whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount, including goodwill. If the qualitative assessment determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill, then no impairment is determined to exist for the reporting unit. However, if the qualitative assessment determines that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, including goodwill, or we choose not to perform the qualitative assessment, then we compare the fair value of that reporting unit with its carrying amount, including goodwill, in a quantitative assessment. If the carrying amount of a reporting unit exceeds its fair value, goodwill is considered impaired with the impairment loss measured as the excess of the reporting unit's carrying amount, including goodwill, over its fair value. The estimated fair value of the reporting unit is derived based on valuation techniques we believe market participants would use for each of the reporting units. The annual quantitative assessment was performed using a combination of the income approach (discounted cash flows), the market approach and the guideline transaction method. The income approach uses the reporting unit's estimated future cash flows, discounted at the weighted-average cost of capital of a hypothetical third-party buyer to account for uncertainties within the projections. The income approach uses assumptions based on the reporting unit's estimated revenue growth, operating margin and working capital turnover. The market approach estimates fair value by applying cash flow multiples to the reporting unit's operating performance. The multiples are derived from comparable publicly traded companies with similar characteristics to the reporting unit. The guideline transaction method estimates fair value by applying recent observed transaction multiples from transactions involving companies with similar characteristics to the reporting unit's business. The Company completed its annual goodwill impairment testing for 2024 and 2025 and determined that the fair value of each reporting unit was substantially in excess of its carrying value. See Note 10 to the Consolidated Financial Statements for further discussion of our assessment. If actual results are not consistent with the Company's estimates and/or other assumptions change, the Company may be exposed to future impairment charges that could materially and adversely impact its financial position and results of operations. Intangible assets Intangible assets are recognized at fair value when acquired, generally as a result of a business combination. Intangible assets with definite lives are amortized to operating expense using the straight-line method over their estimated useful lives and tested for impairment when events or changes in circumstances indicate that their carrying amounts may not be recoverable. Intangible assets with indefinite lives are not amortized and are subject to impairment testing at least annually or in interim periods when impairment indicators are present. We may elect to perform a qualitative assessment when testing indefinite-lived intangible assets for impairment to determine whether events or circumstances affecting significant inputs related to the most recent quantitative evaluation have occurred, indicating that it is more likely than not that the indefinite-lived intangible asset is impaired. Otherwise, we test indefinite-lived intangible assets for impairment by determining the fair value of the indefinite-lived intangible asset and comparing the fair value to its carrying amount. If the carrying amount of the intangible asset exceeds its fair value, an impairment is recognized for the amount of the difference. Leases We determine if an arrangement is a lease at inception. Operating leases are included in Right-of-use ("ROU") assets, Operating lease liabilities and Non-current operating lease liabilities in the Consolidated Balance Sheets. Finance leases are 57 included in Net property, plant and equipment and finance leases, Other accrued liabilities and Other non-current finance liabilities in the Consolidated Balance Sheets. Lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. Since substantially all of our leases do not provide an implicit rate, the incremental borrowing rate based on the information available at lease commencement date is used to determine the present value of future payments. Our incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments, and in economic environments where the leased asset is located. The ROU assets also include any prepaid lease payments made and initial direct costs incurred and exclude lease incentives. Our lease terms may include options to extend or terminate the lease, which are recognized when it is reasonably certain that the option will be exercised. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Leases with an initial term of 12 months or less are not recorded in the Consolidated Balance Sheets. We recorded impairment of $ 1.0 million related to the reduction of our real estate footprint for the year ended December 31, 2025. For leases beginning in 2019 and later, we account for lease components (e.g., fixed payments including rent) together with the non-lease components (e.g., common-area maintenance costs) as a single lease component for all classes of underlying assets. Income taxes Income tax expense for federal, foreign, state and local income taxes are calculated on taxable income based on the income tax law in effect at the latest balance sheet date and includes the cumulative effect of any changes in tax rates from those used previously in determining deferred tax assets and liabilities. We record a valuation allowance to reduce deferred tax assets to the amount that is more likely than not to be realized. For those tax positions where it is more likely than not that a tax benefit will be sustained, we have recorded the amount of tax benefit with a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where it is not more likely than not that a tax benefit will be sustained, no tax benefit has been recognized in the Consolidated Financial Statements. We record interest and penalties (net of any applicable tax benefit) related to income taxes as a component of Income tax expense in the Consolidated Statements of Operations. Assets and liabilities held for sale and discontinued operations We classify assets and liabilities as held for sale when Management, with approval from the Board of Directors, commits to a plan to sell the disposal group, the sale is probable within one year, and the disposal group is available for immediate sale in its present condition. We also consider whether an active program to locate a buyer has been initiated, whether the disposal group is marketed actively for sale at a price that is reasonable in relation to its current fair value, and whether actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. We test for impairment when we classify a disposal group as held for sale in the following order. First, we evaluate for impairment all assets outside the scope of subtopic ASC 360-10 other than goodwill. Next, we evaluate goodwill and then the disposal group in its entirety. An impairment charge is recognized when the carrying value of the disposal group exceeds the estimated fair value, less costs to sell. We also cease depreciation and amortization for assets classified as held for sale. When a decision to sell represents a strategic shift impacting our operations and financial results, the disposal group and related operations are reported as discontinued operations. For further discussion see Note 5 to the Consolidated Financial Statements. Pension plans and postretirement benefits We sponsor various defined benefit pension and postretirement plans covering certain employees of our U.S. and Canadian subsidiaries and use actuarial valuations to calculate the cost and benefit obligations of pension and postretirement benefits. The actuarial valuations use significant assumptions in the determination of benefit cost and obligations, including assumptions regarding discount rates, expected returns on plan assets, mortality and health care cost trends. Included in our significant assumptions, we determine the discount rate based on a review of published financial data and discussions with our actuary regarding rates of return on high-quality, fixed-income investments currently available and expected to be available during the period to maturity of our pension and postretirement plan obligations. We use an alternative spot rate method for discounting the benefit obligation rather than a single equivalent discount rate because it more accurately applies each year's spot rates to the projected cash flows. The components of benefit cost related to service cost, interest cost, expected return on plan assets and prior service cost amortization are recorded on a quarterly basis based on actuarial assumptions. In the fourth quarter of each year, or as interim remeasurements are required, we recognize net 58 actuarial gains or losses into earnings as a component of net periodic benefit cost (MTM pension adjustment). Recognized net actuarial gains and losses consist primarily of reported actuarial gains and losses and the difference between the actual return on plan assets and the expected return on plan assets. We recognize the funded status of each plan as either an asset or a liability in the Consolidated Balance Sheets. The funded status is the difference between the fair value of plan assets and the present value of the benefit obligation, determined on a plan-by-plan basis. See Note 14 to the Consolidated Financial Statements for a detailed description of our pension plans and postretirement benefits. Loss per share We have computed loss per common share on the basis of the weighted average number of common shares, and, where dilutive, common share equivalents, outstanding during the indicated periods. We have a number of forms of stock-based compensation, including incentive and non-qualified stock options, restricted stock and restricted stock units. We include the shares applicable to these plans in dilutive loss per share when related performance criteria have been met. The computation of basic and diluted loss per share is included in Note 3 to the Consolidated Financial Statements. Revenue recognition A performance obligation is a contractual promise to transfer a distinct good or service to the customer. A contract's transaction price is allocated to each distinct performance obligation and is recognized as revenue when (point in time) or as (over time) the performance obligation is satisfied. Revenue from goods and services transferred to customers at a point in time, which includes certain aftermarket parts and services, accounted for 3 % of our revenue for the years ended December 31, 2025, 2024, and 2023, respectively. Revenue on these contracts is recognized when the customer obtains control of the asset, which is generally upon shipment or delivery and acceptance by the customer. Standard commercial payment terms generally apply to these sales. Revenue from products and services transferred to customers over time accounted for 97 % of our revenue for the years ended December 31, 2025, 2024, and 2023, respectively. Revenue recognized over time primarily relates to customized, engineered solutions and construction services. Typically, revenue is recognized over time using the cost-to-cost input method that uses costs incurred to date relative to total estimated costs at completion to measure progress toward satisfying our performance obligations. Incurred cost represents work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer. Contract costs include labor, material, overhead and, when appropriate, SG&A expenses. Variable consideration in these contracts includes estimates of contractual bonuses and penalties, contract modifications and liquidated damages. Substantially all of our revenue recognized over time under the cost-to-cost input method contains a single performance obligation as the interdependent nature of the goods and services provided prevents them from being separately identifiable within the contract. Generally, we try to structure contract milestones to mirror its expected cash outflows over the course of the contract; however, the timing of milestone receipts can greatly affect the overall cash position. Refer to Note 6 to the Consolidated Financial Statements for details of disaggregation of revenue. As of December 31, 2025, we have estimated the costs to complete all in-process contracts in order to estimate revenues using a cost-to-cost input method. However, it is possible that current estimates could change in the future due to unforeseen events, which could result in adjustments to overall contract costs and revenue recognition. Variations from estimated contract performance could result in material adjustments to operating results for any fiscal period. Contract modifications are routine in the performance of our contracts. Contracts are often modified to account for changes in the contract specifications or requirements. In most instances, contract modifications are for goods or services that are not distinct and, therefore, are accounted for as part of the existing contract, with cumulative adjustment to revenue. We recognize accrued claims in contract revenues for additional work or changes in the scope of work to the extent of costs incurred when we believe we have an enforceable right to the modification or claim, the amount can be reasonably estimated and its realization is probable. In evaluating these criteria, we consider the contractual/legal basis for enforcing the claim, the cause of any additional costs incurred and whether those costs are identifiable or otherwise determinable, the nature and reasonableness of those costs, the objective evidence available to support the amount of the claim, and the relevant history with the counterparty that supports expectations about their willingness and ability to pay for the additional cost along with a reasonable margin. 59 We generally recognize sales commissions in equal proportion as revenue is recognized. Our sales agreements are structured such that commissions are only payable upon receipt of payment, thus no amount is recorded at contract inception as a liability has not been incurred at that point. Warranty expense We record an estimated expense in Cost of operations in the Consolidated Statements of Operations to satisfy contractual warranty requirements when we recognize the associated revenues on the related contracts, or in the case of a loss contract, the full amount of the estimated warranty costs is recognized when the contract becomes a loss contract. In addition, we record specific adjustments when we expect the actual warranty costs to significantly differ from the initial estimates. Factors that impact our estimate of warranty costs include prior history of warranty claims and our estimate of future costs of materials and labor. Such changes could have a material effect on our consolidated financial position, results of operations and cash flows. Loss contingencies We estimate liabilities for loss contingencies when it is probable that a liability has been incurred and the amount of loss is reasonably estimable. Disclosures are provided when there is a reasonable possibility that the ultimate loss will exceed the recorded provision or if such probable loss is not reasonably estimable. Currently we do not expect that any of our litigation proceedings, disputes and claims will have a material adverse effect on our consolidated financial position, as discussed in Note 20 to the Consolidated Financial Statements. Consequently, it is possible future earnings could be affected by changes in our assessment of the probability that a loss has been incurred in material pending litigation against us and/or changes in estimates related to such matters. Loss recoveries Loss recoveries are recognized and disclosed only when receipt of the recovery is probable and can be reasonably estimated. These matters are typically resolved over long periods of time and are often difficult to assess and estimate due to, among other reasons, the possibility of multiple actions by third parties, multiple complex unresolved procedural and substantive issues; and the wide-ranging outcomes reached in similar cases, including the variety of losses incurred. Consequently, it is possible future earnings could be affected by changes in our assessment of the probability that a loss recovery has been recognized and/or changes in estimates related to such matters. Research and development Research and development activities are related to improving our products through innovations to reduce cost and increase competitiveness and/or improve performance to better meet customers' expectations. Research and development expenses totaled $ 1.5 million, $ 5.1 million, and $ 6.5 million in the years ended December 31, 2025, 2024 and 2023, respectively. Contingent consideration The fair value of earn-out arrangements are included as part of the purchase price of the acquired companies on their respective acquisition dates. For each transaction, we estimate the fair value of contingent earn-out payments as part of the initial purchase price and record the estimated fair value of contingent consideration as a liability in the Consolidated Balance Sheets. We review and reassess the estimated fair value of contingent consideration on a quarterly basis, and the updated fair value could differ materially from the initial estimates. Changes in the estimated fair value of our contingent earn-out liabilities related to the time component of the present value calculation are reported in Interest expense in the Consolidated Statements of Operations. Adjustments to the estimated fair value related to changes in all other unobservable inputs are reported in Other - net in the Consolidated Statements of Operations. 60 Self-insurance We have a wholly owned insurance subsidiary that provides workers' compensation, employer's liability, commercial general, and automotive liability and, from time to time, builder's risk insurance (within certain limits) to our operating companies. We may also, in the future, have this insurance subsidiary accept other risks that we cannot or do not wish to transfer to outside insurance companies. Included in Other non-current liabilities in the Consolidated Balance Sheets are reserves for self-insurance totaling $ 6.8 million and $ 7.5 million as of December 31, 2025 and 2024, respectively. Stock-based compensation The fair value of equity-classified awards, such as restricted stock, performance shares and stock options, is determined on the date of grant and is not remeasured. The fair value of liability-classified awards, such as cash-settled stock appreciation rights, restricted stock units and performance units, is determined on the date of grant and is remeasured at the end of each reporting period through the date of settlement. Fair values for restricted stock, restricted stock units, performance shares and performance units are determined using the closing price of our common stock on the date of grant. Fair values for stock options are determined using a Black-Scholes option-pricing model. For performance shares or units that contain a Relative Total Shareholder Return vesting criteria and for stock appreciation rights, we utilize a Monte Carlo simulation to determine the fair value, which determines the probability of satisfying the market condition included in the award. The determination of the fair value of a share-based payment award using an option-pricing model or a Monte Carlo simulation requires the input of significant assumptions, such as the expected life of the award and stock price volatility. We recognize expense for all stock-based awards granted on a straight-line basis over the requisite service periods of the awards, which is generally equivalent to the vesting term. For liability-classified awards, changes in fair value are recognized through cumulative catch-ups each period. Excess tax benefits on stock-based compensation are classified along with other income tax cash flows as an operating activity. These excess tax benefits result from tax deductions in excess of the cumulative compensation expense recognized for options exercised and other equity-classified awards. Forfeitures are expensed as incurred. See Note 18 to the Consolidated Financial Statements for further discussion of stock-based compensation. Foreign currency translation We translate assets and liabilities of our foreign operations into U.S. dollars at current exchange rates, and we translate items in the Consolidated Statements of Operations at average exchange rates for the periods presented. We record adjustments resulting from the translation of foreign currency amounts as a component of AOCI. We report foreign currency transaction gains (losses) in the Consolidated Statements of Operations. We have included transaction gains (losses) of $ 0.1 million, $ 0.2 million and $( 2.3 ) million in the years ended December 31, 2025, 2024 and 2023, respectively, in Foreign exchange in the Consolidated Statements of Operations. These foreign exchange net gains and losses are primarily related to transaction gains or losses from unhedged intercompany loans when the loan is denominated in a currency different than the participating entity's functional currency. Recently adopted accounting standards We adopted the following accounting standards during the year ended December 31, 2025: In December 2023, FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09") , which requires disclosure of specific categories in the effective tax rate reconciliation and additional information for reconciling items that meet a quantitative threshold. The standard is intended to benefit investors by providing more detailed income tax disclosures to assess how an entity's operations and related tax risks, tax planning and operational opportunities affect its tax rate and prospects for future cash flows. ASU 2023-09 is effective for annual periods beginning after December 15, 2024 and has been applied prospectively. Refer to Note 19 in the Consolidated Financial Statements for further details. 61 In May 2025, FASB issued ASU 2025-04, Compensation-Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Clarifications to Share-Based Consideration Payable to a Customer ("ASU 2025-04").The key components of ASU 2025-04 are 1) the revision of the definition of performance condition to identify that performance targets based on a customer's purchases is an example of a performance condition for an award granted to a customer; 2) elimination of the accounting policy election to account for forfeitures as they occur for customer awards with service conditions; and 3) clarification that guidance on constraining estimates of variable consideration in ASC 606 does not apply to share-based payment issued to a customer measured in accordance with ASC 718. While adoption of ASU 2025-04 is not required until financial reporting periods starting after December 15, 2026, we have early adopted ASU 2025-04 effective for the full fiscal period beginning January 1, 2025 using the modified retrospective approach. While ASU 2025-04 did not result in any adjustments to the financial results presented, it will continue to be applied to any future agreements we have with customers in which we provide stock-based compensation. New accounting standards to be adopted We consider the applicability and impact of all issued ASUs. Certain recently issued ASUs were assessed and determined to not be applicable. New accounting standards not yet adopted that could affect the Consolidated Financial Statements in the future are summarized as follows: In October 2023, FASB issued ASU 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative ("ASU 2023-06"). The new guidance is intended to align GAAP and SEC requirements while facilitating the application of GAAP for all entities. The effective date of ASU 2023-06 depends on (1) whether an entity is already subject to the SEC's current disclosure requirements and (2) whether and, if so, when the SEC removed related requirements from its regulations. For entities that are already subject to the SEC's current disclosure requirements, the effective date for each amendment will be the date on which the SEC's removal of that related disclosure requirement from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. If the SEC has not removed the related requirements from its regulations by June 30, 2027, the amendments made by ASU 2023-06 will be removed from the Codification and will not become effective for any entity. The impact of this standard on the Company's Consolidated Financial Statements is contingent upon future transactions. In November 2024, FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses ("ASU 2024-03") . The new guidance is intended to improve financial reporting by requiring all public business entities to disclose additional information about specific expense categories. ASU 2024-03 is effective for annual periods beginning after December 15, 2026. Early adoption is permitted. Further, in January 2025, FASB issued ASU 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date ("ASU 2025-01"). ASU 2025-01 is clarifying the effective dates outlined in ASU 2024-03 which is effective for annual periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027, and may be applied either prospectively or retrospectively. We are currently evaluating the impact of this standard on the Consolidated Financial Statements. In December 2025, FASB issued ASU 2025-10, Government Grants: Accounting for Government Grants Received by Business Entities ("ASU 2025-10"). The new guidance is intended to help business entities in determining how to recognize, measure and present these grants. ASU 2025-10 is effective for annual periods beginning after December 15, 2028. Early adoption is permitted. We are currently evaluating the impact of this standard on the Consolidated Financial Statements. 62 NOTE 3 – LOSS PER SHARE The following table sets forth the computation of basic and diluted loss per share of our common stock, net of non-controlling interest and dividends on Preferred Stock: Year ended December 31, (in thousands, except per share amounts) 2025 2024 2023 Net loss from continuing operations $ ( 32,848 ) $ ( 104,272 ) $ ( 109,212 ) Less: Dividend on Series A Preferred Stock 14,859 14,859 14,858 Loss from continuing operations attributable to stockholders of common stock ( 47,707 ) ( 119,131 ) ( 124,070 ) (Loss) income from discontinued operations, net of tax ( 3,311 ) 44,357 ( 87,996 ) Net loss attributable to stockholders of common stock $ ( 51,018 ) $ ( 74,774 ) $ ( 212,066 ) Weighted average shares used to calculate basic and diluted loss per share 105,421 91,717 89,011 Basic and diluted loss per share Continuing operations $ ( 0.45 ) $ ( 1.30 ) $ ( 1.39 ) Discontinued operations ( 0.03 ) 0.48 ( 0.99 ) Basic and diluted loss per share $ ( 0.48 ) $ ( 0.82 ) $ ( 2.38 ) In accordance with GAAP, dilution is assessed on the basis of continuing operations. We incurred a net loss from continuing operations for the years ended December 31, 2025, 2024 and 2023, therefore the basic and diluted shares are the same for those periods. If we had net income in the years ended December 31, 2025, 2024 and 2023, diluted shares would include an additional 1.0 million, 0.3 million and 0.3 million shares, respectively. We exclu ded 11.2 million , 2.2 million and 2.3 million shares related to stock options and warrants from the diluted share calculation for the years ended December 31, 2025, 2024 and 2023 respectively, because their effect would have been anti-dilutive. NOTE 4 – DIVESTITURES 2025 Divestitures Vølund On April 29, 2025, Babcock & Wilcox A/S ("BWAS"), a subsidiary of the Company, sold substantially all of its assets, including intellectual property, specific project contracts as well as related agreements with suppliers and certain tangible assets, to Kanadevia Inova Denmark A/S (the "Buyer"). The sale was comprised of a simultaneous transfer of assets from BWAS to a newly incorporated BWAS subsidiary (the "NewCo") pursuant to a business transfer agreement ("BTA"), and sale of NewCo by BWAS to the Buyer pursuant to a share purchase agreement (together with the BTA, the "Purchase Agreements"). The Purchase Agreements provide for a base purchase price equal to $ 15.0 million plus $ 0.1 million ( 400,000 Danish krone), subject to certain offsets and adjustments, including additional payments to BWAS if the Buyer enters into a certain prospective project agreement within five years . In addition, BWAS and the Buyer entered into an agreement under which the Buyer loaned BWAS $ 5.0 million which will be considered repaid when BWAS transfers to NewCo certain retained intellectual property usage rights. The Purchase Agreements also include representations and warranties regarding BWAS and the transferred business and assets, as well as certain indemnities with respect thereto. The proceeds were used to reduce outstanding debt and support working capital needs. We recorded a net loss of $ 36.8 million which included a write off of CTA of $ 52.6 million. 63 Diamond Power On June 4, 2025, we through our wholly owned subsidiaries, The Babcock & Wilcox Company, Babcock & Wilcox International Sales and Service Corporation, and Babcock & Wilcox Canada Corp. (collectively, the "Sellers") entered into an agreement (the "Purchase Agreement") to sell to certain legal entities affiliated with Andritz AG the equity interests of Diamond Power and related legal entities together with assets related to the Diamond Power business (the "Sale"). We closed on the sale on July 31, 2025. The Purchase Agreement provided for a base purchase price equal to $ 177 million, subject to certain offsets and adjustments. The Purchase Agreement also included representations and warranties regarding the Sale, as well as certain indemnities with respect thereto. The Purchase Agreement also included an undertaking for the Sellers and their affiliates not to compete with the Diamond Power business or to solicit customers or employees with respect to the Diamond Power business for a period of four years . Additionally, we entered into an agreement to provide transition services to the Diamond Power business for a period of 12 months, or until earlier agreed upon with respect to certain services. The proceeds are being used to support working capital needs and reduce outstanding debt. We recorded a gain of $ 53.2 million on the sale. ASH On October 31, 2025, we completed a sale of the net assets comprising our ASH business to Andritz AG for $ 29 million, subject to customary fees and adjustments. In conjunction with the transaction, we and Andritz AG, through certain wholly-owned subsidiaries, have signed sales representative agreements under which we will continue to market ASH and Diamond Power products and services to customers in the utility power sectors. We recorded a gain of $ 21.5 million on the sale. 2024 Divestitures BWRS On June 28, 2024, we, through our B&W PGG Luxembourg Finance Sárl subsidiary, sold all issued and outstanding share capital of our Denmark-based renewable parts and services subsidiary, BWRS, to Hitachi Zosen Inova AG. We received net cash proceeds of $ 83.5 million and recorded a gain on the sale of the business of $ 44.9 million. The proceeds were used to reduce outstanding debt and support working capital needs. During the year ended December 31, 2025, we recorded a gain of $ 1.0 million as part of the final settlement. SPIG and GMAB On October 30, 2024, we, through our B&W PGG Luxembourg Finance Sárl subsidiary and Babcock & Wilcox A/S subsidiary, sold the entire issued and outstanding share capital of our Italy-based SPIG and Sweden-based GMAB subsidiaries to Auctus Neptune Holding S.p.A. We received net cash proceeds of $ 33.7 million and recorded a gain of $ 14.1 million, solely related to currency translation adjustments that were realized upon sale of the businesses. We recorded an impairment of $ 5.8 million as of September 30, 2024, as the disposal group carrying value exceeded the expected net proceeds from the sale. The proceeds were used to support working capital needs and reduce outstanding debt. NOTE 5 – ASSETS AND LIABILITIES HELD FOR SALE AND DISCONTINUED OPERATIONS During 2024, we engaged in a strategy and developed a formalized plan to divest certain non-core businesses to reduce our debt, improve our balance sheet and increase liquidity. As of December 31, 2025, we have divested our BWRS, SPIG, GMAB, Vølund, Diamond Power and ASH businesses as part of this plan. With the Diamond business becoming classified as held for sale during the second quarter of 2025 and since parts of our Diamond Power businesses were within each of our historical reporting units, we allocated a portion of the goodwill associated with those reporting units to discontinued operations. The allocation was based upon the fair value of our Diamond Power business compared to the fair value of each of the reporting units. This resulted in a triggering event that required us to immediately perform valuations of the remaining fair value of our historical reporting units. These valuations determined that the fair values for each of the reporting units exceeded their carrying value and no impairment was identified. 64 Results of operations and the financial position of the divested subsidiaries are reported as discontinued operations for all periods presented and the notes to the financial statement have been adjusted on a retrospective basis. Our sales are described further in Note 4 to the Consolidated Financial Statements. We previously committed to a plan to sell our B&W Solar business and classified the assets and liabilities of this business as held for sale as of December 31, 2024. During the fourth quarter of 2025, we discontinued marketing B&W Solar for sale due to lack of potential buyers and terminated our broker arrangement with a third party provider. As of December 31, 2025, the B&W Solar business was disposed of through abandonment, as we ceased all business operations and either transferred or wrote off its remaining assets. As a result, the B&W Solar business no longer meets the criteria of held for sale as of December 31, 2025, but met the criteria for discontinued operations for all prior periods presented. The following table summarizes the operating results of the disposal groups included in discontinued operations on the Consolidated Statements of Operations: Year ended December 31, 2025 (in thousands) Solar BWRS Vølund Diamond Power ASH Total Revenues $ 12,227 $ — $ 3,605 $ 63,053 $ 25,002 $ 103,887 Cost of operations 28,539 — 17,179 40,595 15,626 101,939 Selling general and administrative expenses 2,722 — 7,875 16,503 3,570 30,670 Research and development costs — — 488 367 19 874 Impairment of long-lived assets 7,846 — 1,121 — — 8,967 Loss on asset disposals, net 2,245 — 2,180 — — 4,425 Total costs and expenses 41,352 — 28,843 57,465 19,215 146,875 Operating (loss) income ( 29,125 ) — ( 25,238 ) 5,588 5,787 ( 42,988 ) Other (expense) income ( 718 ) — 2,799 1,067 1,580 4,728 (Loss) income from discontinued operations before tax ( 29,843 ) — ( 22,439 ) 6,655 7,367 ( 38,260 ) (Benefit) expense from income taxes ( 315 ) — 552 3,448 170 3,855 Gain (loss) on divestiture — 1,014 ( 36,787 ) 53,166 21,471 38,864 (Loss) income from discontinued operations, net of tax ( 29,528 ) 1,014 ( 59,778 ) 56,373 28,668 ( 3,251 ) Less: Net income attributable to non-controlling interest from discontinued operations — — — 60 — 60 (Loss) income attributable to stockholders from discontinued operations $ ( 29,528 ) $ 1,014 $ ( 59,778 ) $ 56,313 $ 28,668 $ ( 3,311 ) Included in the Solar SG&A expenses for the year ended December 31, 2025 is a $ 6.5 million gain related to a bad debt expense recovery due to a settlement of a claim with a customer and vendor. 65 Year ended December 31, 2024 (in thousands) Solar BWRS SPIG GMAB Vølund Diamond Power ASH Total Revenues $ 68,371 $ 43,255 $ 60,413 $ 10,512 $ 34,500 $ 98,238 $ 38,057 $ 353,346 Cost of operations 87,137 31,434 47,791 7,606 35,272 62,248 24,416 295,904 Selling general and administrative expenses 1,956 6,783 9,459 1,187 16,030 14,661 2,888 52,964 Restructuring expenses 64 — 49 — 766 — — 879 Research and development costs — — 276 54 605 603 57 1,595 Impairment of long-lived assets — — 5,838 — — — — 5,838 Loss on asset disposals, net — — 47 — 374 — — 421 Total costs and expenses 89,157 38,217 63,460 8,847 53,047 77,512 27,361 357,601 Operating (loss) income ( 20,786 ) 5,038 ( 3,047 ) 1,665 ( 18,547 ) 20,726 10,696 ( 4,255 ) Other (expense) income ( 481 ) 177 ( 724 ) ( 138 ) ( 4,735 ) ( 510 ) ( 231 ) ( 6,642 ) (Loss) income from discontinued operations before tax ( 21,267 ) 5,215 ( 3,771 ) 1,527 ( 23,282 ) 20,216 10,465 ( 10,897 ) Expense (benefit) from income taxes — 4,972 1,554 407 ( 2,747 ) ( 632 ) 3 3,557 Gain (loss) on divestiture — 44,876 15,891 ( 1,820 ) — — — 58,947 (Loss) income from discontinued operations, net of tax ( 21,267 ) 45,119 10,566 ( 700 ) ( 20,535 ) 20,848 10,462 44,493 Less: Net income attributable to non-controlling interest from discontinued operations — — — — — 136 — 136 (Loss) income attributable to stockholders from discontinued operations $ ( 21,267 ) $ 45,119 $ 10,566 $ ( 700 ) $ ( 20,535 ) $ 20,712 $ 10,462 $ 44,357 Included in the Solar SG&A expenses for the year ended December 31, 2024 is a $ 6.8 million gain related to a settlement of an insurance claim on the representations and warranty policy obtained when B&W Solar was acquired. Included in Vølund SG&A expense we recorded $ 4.9 million relating to the payment of a break fee by B&W and various other payments between the parties in settlement of certain claims under the O&M. In the third quarter of 2024, we entered into an agreement to terminate our final existing O&M service contract which terminated on October 31, 2024. 66 Year ended December 31, 2023 (in thousands) Solar BWRS SPIG GMAB Vølund Diamond Power ASH Total Revenues $ 34,725 $ 96,411 $ 84,884 $ 9,388 $ 81,359 $ 102,612 $ 37,255 $ 446,634 Cost of operations 80,794 69,517 68,278 5,835 81,021 64,262 22,064 391,771 Selling general and administrative expenses 15,168 13,219 12,287 1,341 14,478 14,075 2,061 72,629 Restructuring expenses — — 76 — 1,527 — — 1,603 Research and development costs — — 300 132 812 689 46 1,979 Loss (gain) on asset disposals, net 143 ( 30 ) 1 — ( 46 ) — — 68 Impairment of long-lived assets 56,556 — — — — — — 56,556 Total costs and expenses 152,661 82,706 80,942 7,308 97,792 79,026 24,171 524,606 Operating (loss) income ( 117,936 ) 13,705 3,942 2,080 ( 16,433 ) 23,586 13,084 ( 77,972 ) Other (expense) income ( 402 ) 76 ( 1,481 ) 393 ( 6,452 ) 925 37 ( 6,904 ) (Loss) income from discontinued operations before tax ( 118,338 ) 13,781 2,461 2,473 ( 22,885 ) 24,511 13,121 ( 84,876 ) Expense (benefit) from income taxes — 1,647 742 511 ( 4,231 ) 3,951 263 2,883 (Loss) income from discontinued operations, net of tax ( 118,338 ) 12,134 1,719 1,962 ( 18,654 ) 20,560 12,858 ( 87,759 ) Less: Net income attributable to non-controlling interest from discontinued operations — — — — — 237 — 237 (Loss) income attributable to stockholders from discontinued operations $ ( 118,338 ) $ 12,134 $ 1,719 $ 1,962 $ ( 18,654 ) $ 20,323 $ 12,858 $ ( 87,996 ) 67 The following table provides the major classes of assets and liabilities of the disposal groups included in assets held for sale and liabilities held for sale in the Consolidated Balance Sheets: December 31, 2024 (in thousands) Solar Vølund Diamond Power ASH Total Cash $ 1,255 $ 2,200 $ — $ — $ 3,455 Accounts receivable – trade, net 2,814 7,202 18,168 2,742 30,926 Contracts in progress 4,157 10,023 3,011 243 17,434 Inventories, net — 2,365 44,087 6,507 52,959 Other current assets 90 371 1,519 43 2,023 Total current assets 8,316 22,161 66,785 9,535 106,797 Net property, plant and equipment and finance leases 3,246 124 8,672 61 12,103 Intangible assets, net 7,833 211 352 1,058 9,454 Goodwill — — 30,727 — 30,727 Deferred income taxes — — 40 ( 167 ) ( 127 ) Right-of-use assets 53 1,358 15,887 — 17,298 Other assets 9 243 6,651 — 6,903 Total assets held for sale (1) $ 19,457 $ 24,097 $ 129,114 $ 10,487 $ 183,155 Accounts payable $ 30,365 $ 5,980 $ 8,958 $ 3,777 $ 49,080 Accrued employee benefits — 518 1,029 — 1,547 Advance billings on contracts 961 5,855 664 1,433 8,913 Accrued warranty expense 1,176 845 699 94 2,814 Operating lease liabilities 26 288 346 — 660 Other accrued liabilities 4,504 190 7,227 725 12,646 Current borrowings 511 — — — 511 Total current liabilities 37,543 13,676 18,923 6,029 76,171 Borrowings, net of current portion 874 — — — 874 Operating lease liabilities, net of current portion 29 1,075 16,514 — 17,618 Deferred tax liability — — 1,228 — 1,228 Other noncurrent liabilities 1,199 — 416 — 1,615 Total liabilities held for sale (1) $ 39,645 $ 14,751 $ 37,081 $ 6,029 $ 97,506 Reported as: Current assets held for sale (1) $ 19,457 $ 24,097 $ 129,114 $ 10,487 $ 183,155 Current liabilities held for sale (1) 39,645 14,751 37,081 6,029 97,506 (1) BWRS, SPIG and GMAB were sold in 2024, therefore, no balances are left to disclose. 68 The depreciation, amortization, capital expenditures and significant operating and investing noncash items of the discontinued operations are as follows: Year ended December 31, 2025 (in thousands) Solar BWRS Vølund Diamond Power ASH Total Depreciation and amortization of long-lived assets $ 37 $ — $ — $ 397 $ 13 $ 447 Impairment of long-lived assets 7,846 — 1,121 — — 8,967 Gain (loss) on divestiture — 1,014 ( 36,787 ) 53,166 21,471 38,864 Changes in operating assets and liabilities: Accounts receivable - trade, net 2,816 — 5,092 18,168 2,742 28,818 Contracts in progress 1,446 — 9,101 3,011 243 13,801 Accounts payable ( 26,471 ) — ( 3,389 ) ( 8,957 ) ( 3,777 ) ( 42,594 ) Advance billings on contracts ( 212 ) — ( 4,461 ) ( 664 ) ( 1,433 ) ( 6,770 ) Purchase of property, plant and equipment ( 499 ) — ( 2 ) ( 271 ) — ( 772 ) Year ended December 31, 2024 (in thousands) Solar BWRS SPIG GMAB Vølund Diamond Power ASH Total Depreciation and amortization of long-lived assets $ — $ 948 $ 3,014 $ 4 $ 495 $ 1,049 $ 2 $ 5,512 Impairment of long-lived assets — — 5,838 — — — — 5,838 Gain (loss) on divestiture — 44,876 15,891 ( 1,820 ) — — — 58,947 Purchase of property, plant and equipment ( 690 ) ( 352 ) ( 964 ) ( 26 ) ( 128 ) ( 1,170 ) — ( 3,330 ) Year ended December 31, 2023 (in thousands) Solar BWRS SPIG GMAB Vølund Diamond Power ASH Total Depreciation and amortization of long-lived assets $ 952 $ 1,856 $ 3,570 $ 4 $ 916 $ 419 $ 1 $ 7,718 Impairment of long-lived assets 56,556 — — — — — — 56,556 Purchase of property, plant and equipment ( 1,857 ) ( 1,355 ) ( 774 ) ( 7 ) ( 43 ) ( 1,178 ) — ( 5,214 ) NOTE 6 – SEGMENT REPORTING Our operations are assessed as one reportable segment, B&W. In the fourth quarter of 2025, we reassessed our segment structure as a result of the completion of our strategic shift to streamline and simplify the business. This transformation included the divestiture of certain non-core assets, as described in Note 4 to the Consolidated Financial Statements. As a result of this transformation, we have determined we have one operating and reportable segment, labeled as B&W. The revised segment presentation has been applied retrospectively to all periods presented. 69 The Company's CODM is the chief executive officer and chairman of the Board of Directors. The CODM assesses performance on a consolidated basis, using the segment's Loss from continuing operations as its profitability metric. The CODM considers budget-to-actual and forecast-to-actual variances on a quarterly basis when making decisions about our operating and capital resources. The measure of segment assets is reported on the Consolidated Balance Sheets as Total assets. An analysis of our operations by revenue type is as follows: Year ended December 31, (in thousands) 2025 2024 2023 Revenues: B&W Parts $ 241,580 $ 206,406 $ 202,700 Projects 186,914 196,725 173,660 Construction 159,182 177,908 211,088 Total Revenue $ 587,676 $ 581,039 $ 587,448 The following table presents Revenues, significant expenses and Loss from continuing operations for our consolidated segment: Year ended December 31, (in thousands) 2025 2024 2023 Revenues $ 587,676 $ 581,039 $ 587,448 Less: Cost of operations (1) 438,686 449,389 459,953 Selling, general and administrative expenses (1) 114,943 119,403 127,083 Depreciation and amortization (2) 9,677 10,075 13,881 Interest expense, net 36,046 45,495 41,654 Benefit plans, net 9,782 31,230 38,406 Other expense, net (3) 3,110 16,918 10,079 Income tax expense 8,280 12,801 5,604 Loss from continuing operations $ ( 32,848 ) $ ( 104,272 ) $ ( 109,212 ) (1) Excludes depreciation and amortization. (2) Depreciation and amortization is included in Cost of operations and Selling, general and administrative expenses on the Consolidated Statement of Operations. (3) Other expense, net includes Research and development costs, Impairment of long-lived assets, Loss (gain) on asset disposals, net, Gain (loss) on debt extinguishment and Foreign exchange as presented on the Consolidated Statement of Operations. 70 Information about our consolidated operations in different geographic areas: Year ended December 31, (in thousands) 2025 2024 2023 REVENUES (1) United States $ 418,002 $ 388,193 $ 420,836 Canada 90,610 69,905 80,861 United Kingdom 15,467 49,674 35,723 Indonesia 16,272 13,197 11,507 Philippines 10,947 10,483 2,478 Aggregate of all other countries, each with less than $10 million in revenues 36,378 49,587 36,043 $ 587,676 $ 581,039 $ 587,448 (1) We allocate geographic revenues based on the location of the customer's operations. Year ended December 31, (in thousands) 2025 2024 NET PROPERTY, PLANT AND EQUIPMENT AND FINANCE LEASES United States $ 52,173 $ 46,127 Mexico 11,478 13,974 Aggregate of all other countries 1,882 759 $ 65,533 $ 60,860 NOTE 7 – REVENUE RECOGNITION AND CONTRACTS Revenue Recognition We generate the vast majority of our revenues from the supply of, and aftermarket services for, steam-generating, environmental and auxiliary equipment. We had one customer that comprised more than 10 % of our consolidated revenues as of December 31, 2025 and no single customer comprised 10% or more of our consolidated revenues in 2024 or 2023. Our revenue recognition accounting policy is described in more detail in Note 2. Contract Balances The following represents the components of Accounts receivable - trade, net, Contracts in progress and Advance billings on contracts included in the Consolidated Balance Sheets. We are also including accrued contract losses included in Other accrued liabilities in the Consolidated Balance Sheets: (in thousands) December 31, 2025 December 31, 2024 $ Change % Change Accounts receivable - trade, net $ 118,383 $ 91,767 $ 26,616 29 % Contracts in progress 72,808 79,149 ( 6,341 ) ( 8 ) % Advance billings on contracts 111,987 56,381 55,606 99 % Accrued contract losses 469 217 252 116 % 71 (in thousands) December 31, 2024 December 31, 2023 $ Change % Change Accounts receivable - trade, net $ 91,767 $ 77,467 $ 14,300 18 % Contracts in progress 79,149 46,014 33,135 72 % Advance billings on contracts 56,381 52,085 4,296 8 % Accrued contract losses 217 46 171 372 % For the years ended December 31, 2025, 2024 and 2023, we recognized 92 %, 92 % and 85 % of the revenue related to amounts that were included in advance billings on contracts as of December 31, 2024, 2023 and 2022, respectively. The following amounts represent retainage on contracts: (in thousands) December 31, 2025 December 31, 2024 $ Change % Change Retainage expected to be collected within one year $ 957 $ 3,781 $ ( 2,824 ) ( 75 ) % Retainage expected to be collected after one year 579 193 386 200 % Total retainage $ 1,536 $ 3,974 $ ( 2,438 ) ( 61 ) % Retainage is a holdback of final payment from a customer upon completion of a contract for a set period of time. Retainage is included in advance billings on contracts or contracts in progress in the Consolidated Balance Sheets as of December 31, 2025 and 2024. All long-term retainage at December 31, 2025 is expected to be collected by the end of 2027. Backlog At December 31, 2025 we had $ 423.6 million of remaining performance obligations, which we also refer to as total backlog. We expect to recognize approximately 90 %, 9 % and 1 % of its remaining performance obligations as revenue in 2026, 2027 and thereafter, respectively. NOTE 8 – INVENTORIES, NET Inventories are stated at the lower of cost or net realizable value. Certain raw material inventory is sold to our customers directly and without further processing. The components of Inventories, net included in the Consolidated Balance Sheets are as follows: (in thousands) December 31, 2025 December 31, 2024 Raw materials and supplies $ 58,337 $ 54,673 Work in progress 2,361 2,978 Finished goods 182 644 Total inventories, net $ 60,880 $ 58,295 72 NOTE 9 – PR OPERTY, PLANT & EQUIPMENT AND FINANCE LEASES The following table indicates the carrying value of land and each of the major classes of depreciable assets in the Consolidated Balance Sheets: (in thousands) December 31, 2025 December 31, 2024 Land $ 1,493 $ 1,493 Buildings 16,557 16,813 Machinery and equipment 100,937 94,798 Property under construction 19,520 13,129 138,507 126,233 Less accumulated depreciation 94,612 89,954 Net property, plant and equipment 43,895 36,279 Finance leases 33,960 34,920 Less finance lease accumulated amortization 12,322 10,339 Net property, plant and equipment and finance leases $ 65,533 $ 60,860 NOTE 10 – GOODWILL Goodwill represents the excess of the consideration transferred over the fair value of net assets, including identifiable intangible assets, at the acquisition date. Goodwill is assessed for impairment annually on October 1 or more frequently if events or changes in circumstances indicate a potential impairment exists. In July 2025, we allocated $ 30.8 million of goodwill to our Diamond Power business in connection with its sale, as discussed further in Note 5 to the Consolidated Financial Statements. We did not identify any impairment in the retained goodwill balances subsequent to the allocation of goodwill to the Diamond Power business. In the fourth quarter of 2025, our reporting units changed as part of our reassessment of our reportable segment structure. See Note 6 to the Consolidated Financial Statements for further discussion of our assessment. The annual quantitative assessment was performed using a combination of the income approach (discounted cash flows), the market approach and the guideline transaction method. The income approach uses the reporting unit's estimated future cash flows, discounted at the weighted-average cost of capital of a hypothetical third-party buyer to account for uncertainties within the projections. The income approach uses assumptions based on the reporting unit's estimated revenue growth, operating margin, and working capital turnover. The market approach estimates fair value by applying cash flow multiples to the reporting unit's operating performance. The multiples are derived from comparable publicly traded companies with similar characteristics to the reporting unit. The guideline transaction method estimates fair value by applying recent observed transaction multiples from transactions involving companies with similar characteristics to the reporting unit's business. The fair market value calculated in the quantitative assessment exceeded the carrying amount of each of the reporting units by more than 100 % at October 1, 2025. The following summarizes the changes in the net carrying amount of goodwill in the Consolidated Balance Sheets: (in thousands) Balance at December 31, 2023 $ 54,297 Currency translation adjustments ( 2,886 ) Balance at December 31, 2024 $ 51,411 Currency translation adjustments 1,686 Balance at December 31, 2025 $ 53,097 73 NOTE 11 – INTANGIBLE ASSETS, NET Intangible assets are as follows: (in thousands) December 31, 2025 December 31, 2024 Definite-lived intangible assets Customer relationships $ 26,406 $ 25,461 Unpatented technology 3,701 3,703 Patented technology 1,912 1,912 Trade names 1,828 1,792 All other 275 275 Gross value of definite-lived intangible assets 34,122 33,143 Customer relationships amortization ( 14,367 ) ( 11,717 ) Unpatented technology amortization ( 1,470 ) ( 1,128 ) Patented technology amortization ( 1,441 ) ( 1,159 ) Trade names amortization ( 1,302 ) ( 1,224 ) All other amortization ( 275 ) ( 275 ) Accumulated amortization ( 18,855 ) ( 15,503 ) Total intangible assets, net $ 15,267 $ 17,640 The following summarizes the changes in the carrying amount of intangible assets, net: Year ended December 31, (in thousands) 2025 2024 Balance at beginning of period $ 17,640 $ 22,146 Amortization expense ( 2,947 ) ( 3,054 ) Currency translation adjustments 574 ( 1,452 ) Balance at end of the period $ 15,267 $ 17,640 Amortization of intangible assets is included in Cost of operations and SG&A in the Consolidated Statement of Operations. Estimated future intangible asset amortization expense, during the year ended December 31, 2025 is as follows: (in thousands) Amortization Expense Year ending December 31, 2026 $ 2,876 Year ending December 31, 2027 2,876 Year ending December 31, 2028 2,618 Year ending December 31, 2029 2,618 Year ending December 31, 2030 2,618 Thereafter 1,661 NOTE 12 – LEASES The Company leases property, plant and equipment, which primarily includes real estate and vehicles. We determine if an arrangement is a lease at inception. Operating leases are included in Right-of-use assets, Operating lease liabilities and Operating lease liabilities, net of current portion in the Consolidated Balance Sheets. Finance leases are included in Net property, plant and equipment and finance leases, financing lease liabilities and financing lease liabilities, net of current portion in the Consolidated Balance Sheets. 74 Amounts relating to leases are presented in the Consolidated Balance Sheets in the following line items: (in thousands) Assets: Classification December 31, 2025 December 31, 2024 Operating lease assets Right-of-use assets $ 17,651 $ 16,902 Finance lease assets Net property, plant and equipment and finance leases 21,638 24,581 Total non-current lease assets $ 39,289 $ 41,483 Liabilities: Current Operating lease liabilities Operating lease liabilities $ 3,819 $ 3,204 Finance lease liabilities Financing lease liabilities 1,894 1,644 Non-current Operating lease liabilities Operating lease liabilities, net of current portion 15,125 13,801 Finance lease liabilities Financing lease liabilities, net of current portion 26,742 28,501 Total lease liabilities $ 47,580 $ 47,150 75 The components of lease expense included in the Consolidated Statements of Operations are as follows: Year ended December 31, (in thousands) Classification 2025 2024 2023 Operating lease expense: Operating lease expense Selling, general and administrative expenses $ 4,930 $ 4,561 $ 3,751 Short-term lease expense Selling, general and administrative expenses 1,358 1,940 2,122 Variable lease expense (1) Selling, general and administrative expenses 69 396 300 Total operating lease expense 6,357 6,897 6,173 Finance lease expense: Amortization of right-of-use assets Cost of operations 2,132 2,116 2,080 Interest on lease liabilities Interest expense 2,427 2,037 2,813 Total finance lease expense 4,559 4,153 4,893 Net lease cost $ 10,916 $ 11,050 $ 11,066 (1) Variable lease expense primarily consists of common area maintenance expenses paid directly to lessors of real estate leases. We incurred an impairment of $ 1.0 million related to the reduction of our real estate footprint for the year ended December 31, 2025. Other information related to leases is as follows: Year ended December 31, (in thousands) 2025 2024 2023 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows - operating leases $ 6,039 $ 4,543 $ 3,788 Operating cash flows - finance leases 2,343 2,155 2,235 Financing cash flows - finance leases 1,674 1,369 1,195 (dollars in thousands) December 31, 2025 December 31, 2024 Right-of-use assets obtained in exchange for lease liabilities: Operating leases $ 3,778 $ 10,403 Finance leases 41 4,333 Weighted-average remaining lease term: Operating leases (in years) 7.4 8.2 Finance leases (in years) 8.5 9.5 Weighted-average discount rate: Operating leases 7.1 % 8.3 % Finance leases 8.0 % 8.0 % 76 Future minimum lease payments required under non-cancellable leases as of December 31, 2025 are as follows: (in thousands) Operating Leases Finance Leases Total 2026 $ 4,940 $ 4,096 $ 9,036 2027 4,349 4,154 8,503 2028 3,729 4,212 7,941 2029 2,601 6,732 9,333 2030 1,900 3,942 5,842 Thereafter 7,688 17,035 24,723 Total 25,207 40,171 65,378 Less imputed interest ( 6,263 ) ( 11,535 ) ( 17,798 ) Lease liability $ 18,944 $ 28,636 $ 47,580 NOTE 13 – ACCRUED WARRANTY EXPENSE We may offer assurance type warranties on products and services sold to customers. Changes in the carrying amount of our accrued warranty expense are as follows: Year ended December 31, (in thousands) 2025 2024 2023 Balance at beginning of period $ 2,654 $ 3,521 $ 5,813 Additions 1,221 2,651 3,089 Expirations and other changes ( 1,498 ) ( 3,069 ) ( 3,621 ) Payments ( 98 ) ( 467 ) ( 1,767 ) Translation and other (1) 1,305 18 7 Balance at end of period $ 3,584 $ 2,654 $ 3,521 (1) 2025 balance includes $ 1.3 million of liabilities no longer held for sale as of December 31, 2025. See Note 5 to the Consolidated Financial Statements for further information. We record estimated expense in Cost of operations in the Consolidated Statements of Operations to satisfy contractual warranty requirements when we recognize the associated revenues on the related contracts, or in the case of a loss contract, the full amount of the estimated warranty costs is recognized when the contract becomes a loss contract. In addition, we record specific adjustments when we expect the actual warranty costs to significantly differ from the initial estimates. Factors that impact our estimate of warranty costs include prior history of warranty claims and our estimate of future costs of materials and labor. Such changes could have a material effect on our consolidated financial position, results of operations and cash flows. NOTE 14 – PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS We have historically provided defined benefit retirement benefits to domestic U.S. employees under the U.S. Plan, a noncontributory plan. As of 2006, the U.S. Plan was closed to new salaried plan entrants. Effective December 31, 2015, benefit accruals for those salaried employees covered by, and continuing to accrue service and salary adjusted benefits under the U.S. Plan, ceased. Effective January 1, 2012, a defined contribution component was adopted applicable to Babcock & Wilcox Canada, Ltd. (the "Canadian Plans"). Any employee with less than two years of continuous service as of December 31, 2011 was required to enroll in the defined contribution component of the Canadian Plans as of January 1, 2012 or upon the completion of 6 months of continuous service, whichever was later. These and future employees are not eligible to enroll in the defined benefit component of the Canadian Plans. Effective January 1, 2015, benefit accruals under certain hourly Canadian pension plans ceased. As part of the spin-off transaction, we split the Canadian defined benefit plans from BWXT, which was completed in 2017. We did not present these plans as multi-employer plans because our portion was separately identifiable, and we were able to assess the assets, liabilities and periodic expense in the same manner as if it were a separate plan in each period. 77 We do not provide retirement benefits to certain non-resident alien employees of foreign subsidiaries. Retirement benefits for salaried employees who accrue benefits in a defined benefit plan are based on final average compensation and years of service, while benefits for hourly employees are based on a flat benefit rate and years of service. Our funding policy is to fund the plans as recommended by the respective plan actuaries and in accordance with the Employee Retirement Income Security Act of 1974, as amended, or other applicable law. Funding provisions under the Pension Protection Act accelerate funding requirements to ensure full funding of benefits accrued. We make available other benefits including postretirement health care and life insurance benefits to certain salaried and union retirees based on their contracts, and on a limited basis, to future retirees. 78 Obligations and funded status Pension Benefits Year Ended December 31, Other Benefits Year Ended December 31, (in thousands) 2025 2024 2025 2024 Change in benefit obligation: Benefit obligation at beginning of period $ 798,366 $ 870,018 $ 5,414 $ 6,343 Service cost 317 353 19 17 Interest cost 40,337 40,819 248 274 Plan participants' contributions — — 85 99 Settlements ( 541 ) — — — Amendment — 461 — — Actuarial loss (gain) 19,138 ( 37,856 ) 156 ( 318 ) Spin-off transfer ( 7,523 ) — — — Foreign currency exchange rate changes 871 ( 1,537 ) 50 ( 90 ) Benefits paid ( 73,012 ) ( 73,892 ) ( 956 ) ( 911 ) Benefit obligation at end of period $ 777,953 $ 798,366 $ 5,016 $ 5,414 Change in plan assets: (1) (2) Fair value of plan assets at beginning of period $ 613,343 $ 705,203 $ — $ — Actual return on plan assets 50,434 ( 27,522 ) — — Employer contribution 24,366 11,392 871 812 Spin-off transfer ( 7,523 ) — — — Plan participants' contributions — — 85 99 Foreign currency exchange rate changes 1,076 ( 1,838 ) — — Benefits paid ( 73,012 ) ( 73,892 ) ( 956 ) ( 911 ) Fair value of plan assets at the end of period 608,684 613,343 — — Funded status $ ( 169,269 ) $ ( 185,023 ) $ ( 5,016 ) $ ( 5,414 ) Amounts recognized in the balance sheet consist of: Accrued employee benefits $ ( 1,063 ) $ ( 1,105 ) $ ( 769 ) $ ( 806 ) Accumulated postretirement benefit obligation — — ( 4,247 ) ( 4,608 ) Pension liability ( 171,944 ) ( 188,057 ) — — Prepaid pension 3,738 4,139 — — Accrued benefit liability, net $ ( 169,269 ) $ ( 185,023 ) $ ( 5,016 ) $ ( 5,414 ) Amount recognized in accumulated comprehensive income (before taxes): Prior service cost $ — $ 1,067 $ — $ 283 Supplemental information: Plans with accumulated benefit obligation in excess of plan assets Projected benefit obligation $ 761,161 $ 781,793 $ — $ — Accumulated benefit obligation 761,161 781,793 — — Fair value of plan assets 588,154 592,630 — — Plans with plan assets in excess of accumulated benefit obligation Projected benefit obligation $ 16,792 $ 16,574 $ — $ — Accumulated benefit obligation 16,792 16,574 — — Fair value of plan assets 20,531 20,713 — — (1) We had $ 28.6 million and $ 15.3 million in Fixed Income and Equity, respectively, as of December 31, 2025 relating to securities of the employer. (2) We had $ 12.3 million and $ 4.0 million in Fixed Income and Equity, respectively, as of December 31, 2024 relating to securities of the employer. 79 Components of net periodic benefit cost included in net loss are as follows: Pension Benefits Other Benefits Year ended December 31, Year ended December 31, (in thousands) 2025 2024 2023 2025 2024 2023 Interest cost $ 40,337 $ 40,819 $ 44,165 $ 248 $ 274 $ 360 Expected return on plan assets ( 37,701 ) ( 43,543 ) ( 45,867 ) — — — Amortization of prior service cost 273 180 180 283 691 691 Recognized net actuarial loss (gain) 6,186 33,127 39,680 156 ( 318 ) ( 803 ) Benefit plans, net 9,095 30,583 38,158 687 647 248 Service cost included in COS (1) 317 353 339 19 17 17 Net periodic benefit cost $ 9,412 $ 30,936 $ 38,497 $ 706 $ 664 $ 265 (1) Service cost related to a small group of active participants is presented within Cost of operations in the Consolidated Statement of Operations. Recognized net actuarial loss (gain) consists primarily of reported actuarial loss/gain and the difference between the actual return on plan assets and the expected return on plan assets. Total net MTM adjustments for our pension and other postretirement benefit plans were losses of $ 6.3 million, $ 32.8 million and $ 38.9 million in the years ended, December 31, 2025, 2024 and 2023, respectively. The recognized net actuarial loss (gain) was recorded in Benefit plans, net in the Consolidated Statements of Operations. Assumptions Pension Benefits Other Benefits Year ended December 31, Year ended December 31, 2025 2024 2023 2025 2024 2023 Weighted average assumptions used to determine net periodic benefit obligations: Comparative single equivalent discount rate 5.31 % 5.57 % 5.03 % 4.82 % 5.21 % 4.94 % Rate of compensation increase 0.07 % 0.07 % 0.07 % — — — Weighted average assumptions used to determine net periodic benefit cost: Comparative single equivalent discount rate 5.50 % 5.03 % 5.40 % 4.82 % 5.21 % 4.94 % Expected return on plan assets 6.41 % 6.47 % 6.45 % — — — Rate of compensation increase 0.07 % 0.07 % 0.07 % — — — The expected rate of return on plan assets is based on the long-term expected returns for the investment mix of assets currently in the portfolio. In setting this rate, we use a building-block approach. Historic real return trends for the various asset classes in the plan's portfolio are combined with anticipated future market conditions to estimate the real rate of return for each asset class. These rates are then adjusted for anticipated future inflation to determine estimated nominal rates of return for each asset class. The expected rate of return on plan assets is determined to be the weighted average of the nominal returns based on the weightings of the asset classes within the total asset portfolio. We use an expected return on plan assets assumption of 6.5 % for the majority of our pension plan assets (approximately 97 % of our total pension assets at December 31, 2025). Investment goals The overall investment strategy of the pension trusts is to achieve long-term growth of principal, while avoiding excessive risk and to minimize the probability of loss of principal over the long term. The specific investment goals that we set for the pension trusts in the aggregate are (1) to ensure that plan liabilities are met when due and (2) to achieve an investment return on trust assets consistent with a reasonable level of risk. 80 Allocations to each asset class for both domestic and foreign plans are reviewed periodically and rebalanced, if appropriate, to assure the continued relevance of the goals, objectives and strategies. The pension trusts for both domestic and foreign plans employ a professional investment advisor and a number of professional investment managers whose individual benchmarks are, in the aggregate, consistent with the plans' overall investment objectives. The goals of each investment manager are (1) to meet (in the case of passive accounts) or exceed (for actively managed accounts) the benchmark selected and agreed upon by the manager and the trust and (2) to display an overall level of risk in its portfolio that is consistent with the risk associated with the agreed upon benchmark. The investment performance of total portfolios, as well as asset class components, is periodically measured against commonly accepted benchmarks, including the individual investment manager benchmarks. In evaluating investment manager performance, consideration is also given to personnel, strategy, research capabilities, organizational and business matters, adherence to discipline and other qualitative factors that may impact the ability to achieve desired investment results. Domestic plans: We sponsor the U.S. Plan, which is a domestic defined benefit plan. The assets of this plan are held by the Trustee in The Babcock & Wilcox Company Master Trust (the "Master Trust"). For the years ended December 31, 2025 and 2024, the investment return on domestic plan assets of the Master Trust (net of deductions for management fees) was approximately 8.6 % and ( 4.5 )%, respectively. The following is a summary of the asset allocations for the Master Trust by asset category: Year ended December 31, 2025 2024 Asset category: United States government securities 14 % 13 % Equity 4 % 2 % Private credit 48 % 45 % Hedge funds 22 % 25 % Cash and cash equivalents 12 % 15 % The target asset allocation for the Master Trust as of both December 31, 2025 and 2024 was 70 % of alternative, liquid credit and direct lending funds, 20 % of fixed income securities, and 10 % of equity and other investments. We routinely reassess the target asset allocation with a goal of better aligning the expected cash flows from those assets to the anticipated benefit payments. Foreign plans: We sponsor the Canadian Plans through certain of our foreign subsidiaries. The combined weighted average asset allocations of these plans by asset category were as follows: Year ended December 31, 2025 2024 Asset category: Fixed income 99 % 99 % Other 1 % 1 % The target allocation for 2025 for the foreign plans, by asset class, is as follows: Canadian Plans Asset class: Fixed income and other 100 % 81 Fair value of plan assets See Note 22 below in the Consolidated Financial Statements for a detailed description of fair value measurements and the hierarchy established for valuation inputs. In accordance with ASC 820, Fair Value Measurements and Disclosures , certain investments that are measured at fair value using the net asset value ("NAV") per share practical expedient have not been classified in the fair value hierarchy. The investments that are measured at fair value using NAV per share included in the tables below are intended to permit reconciliation of the fair value hierarchy to the fair value of plan assets at the end of each period, which is presented in the first table above titled "Obligations and funded status" . The following is a summary of total investments of our plans measured at fair value: (in thousands) Year ended December 31, 2025 Level 1 Level 2 Level 3 United States government securities $ 79,424 $ — $ 79,424 $ — Fixed income 72,066 — 48,906 23,160 Equity 15,319 15,319 — — Private credit 174,913 — — 174,913 Private equity 8,152 — — 8,152 Hedge fund 37,806 — — 37,806 Cash and accrued items 69,903 69,903 — — Investments measured at fair value $ 457,583 $ 85,222 $ 128,330 $ 244,031 Investments measured at net asset value 151,101 Pending trades — Total pension and other postretirement benefit assets $ 608,684 (in thousands) Year ended December 31, 2024 Level 1 Level 2 Level 3 United States government securities $ 77,641 $ 77,641 $ — $ — Fixed income 56,691 12,292 20,456 23,943 Equity 5,807 5,516 — 291 Private credit 213,304 — — 213,304 Private equity 6,718 — — 6,718 Hedge fund 57,410 — — 57,410 Cash and accrued items 52,767 51,928 — 839 Investments measured at fair value $ 470,338 $ 147,377 $ 20,456 $ 302,505 Investments measured at net asset value 143,084 Pending trades ( 79 ) Total pension and other postretirement benefit assets $ 613,343 A reconciliation of Level 3 plan assets are as follows: (in thousands) Level 3 Balance at December 31, 2024 $ 302,505 Unrealized losses on assets held ( 619 ) Realized gains on assets sold 14,256 Purchases, sales, issuances and settlements, net ( 72,111 ) Balance at December 31, 2025 $ 244,031 82 Expected cash flows Domestic Plans Foreign Plans (in thousands) Pension Benefits Other Benefits Pension Benefits Other Benefits Expected employer contributions to trusts of defined benefit plans: 2026 $ 27,015 $ 649 $ 10 $ 131 Expected benefit payments (1) : 2026 70,994 649 1,308 131 2027 69,614 589 1,281 116 2028 68,241 533 1,284 96 2029 66,591 481 1,255 87 2030 64,837 431 1,207 82 2031-2035 293,686 1,517 5,694 319 (1) Pension benefit payments are made from their respective plan's trust. We made contributions to our pension and other postretirement benefit plans totaling $ 25.2 million and $ 12.2 million during the years ended December 31, 2025 and 2024, respectively. Additionally, during the third quarter of 2024, we were granted a waiver of required minimum contributions to the U.S. Plan by the PBGC, which was subject to us providing acceptable collateral to the PBGC. The waiver reduced cash funding requirements in 2024 by $ 15.0 million and increased contributions annually over the subsequent 5 -year period. Defined contribution plans We provide benefits under The B&W Thrift Plan (the "Thrift Plan"), after minimum service requirements are met. The Thrift Plan generally provides for matching employer contributions. Employer matching contributions are typically made in cash. Amounts charged to expense for employer contributions under the Thrift Plan total approximately $ 4.4 million, $ 4.5 million and $ 4.0 million in the years ended December 31, 2025, 2024 and 2023, respectively. Also, our salaried Canadian employees are eligible to participate in a defined contribution plan, after minimum service requirements are met. The amount charged to expense for employer contributions was approximately $ 0.3 million in each of the years ended December 31, 2025, 2024 and 2023. Multi-employer plans One of our subsidiaries contributes to various multi-employer plans. Multi-employer plan assets are commingled among employers; therefore, unlike a single‑employer plan, we are exposed to funding shortfalls arising from other employers' participation and may face higher future contributions or withdrawal assessments. The plans generally provide defined 83 benefits to substantially all unionized workers in this subsidiary. The following table summarizes our contributions to multi-employer plans for the years ended December 31, 2025, 2024 and 2023: (in millions) Pension Protection Act Zone Status FIP/RP Status Pending/ Implemented Contributions Surcharge Imposed Expiration Date Of Collective Bargaining Agreement Pension Fund EIN/PIN 2025 2024 2023 2025 2024 2023 Boilermaker-Blacksmith National Pension Trust 48-6168020/ 001 Red Red Red Yes $ 7.3 $ 10.1 $ 13.4 No Described Below All other 1.8 1.5 1.2 $ 9.1 $ 11.6 $ 14.6 Our collective bargaining agreements with the Boilermaker-Blacksmith National Pension Trust ("Boilermaker Plan") is under a National Maintenance Agreement platform which is evergreen in terms of expiration. However, the agreement allows for termination by either party with a 90-day written notice. Our contributions to the Boilermaker Plan constitute less than 5% of total contributions to the Boilermaker Plan. All other contributions included above represents multiple amounts to various plans that, individually, are deemed to be insignificant. NOTE 15 – DEBT AND CREDIT FACILITIES Senior Notes Due 2026 The components of our Senior Notes due 2026 at December 31, 2025 are as follows: (in thousands) 6.50 % (1) Senior Notes due 2026 $ 84,792 Unamortized deferred financing costs ( 919 ) Net debt balance $ 83,873 The components of our Senior Notes due 2026 at December 31, 2024 are as follows: Senior Notes (in thousands) 8.125 % (2) 6.50 % (1) Total Senior Notes due 2026 $ 193,035 $ 151,440 $ 344,475 Unamortized deferred financing costs ( 1,659 ) ( 2,757 ) ( 4,416 ) Unamortized premium 168 — 168 Net debt balance $ 191,544 $ 148,683 $ 340,227 (1) The 6.50 % Senior Notes mature in December 2026 and is included in current liabilities in the Consolidated Balance Sheets at December 31, 2025 and noncurrent liabilities in the Consolidated Balance Sheets at December 31, 2024. As of December 31, 2025 the 6.50 % Senior Notes bear an effective interest rate of 7.6 %. (2) The 8.125 % Senior Notes had a maturity date of February 2026, and were fully redeemed at December 31, 2025. $ 191.5 million is included in noncurrent liabilities in the Consolidated Balance Sheets at December 31, 2024. During the second quarter of 2025, $ 84.0 million aggregate principal amount of our 8.125 % Senior Notes and $ 47.8 million aggregate principal amount of our 6.50 % Senior Notes (collectively, the "Exchanged Notes") were repurchased and cancelled in connection with the privately negotiated exchange described below. During the third quarter of 2025, we completed a cash tender offer for $ 8.3 million of our 8.125 % Senior Notes and 6.50 % Senior Notes. A gain of $ 1.7 million was recognized as part of this transaction and is included in Gain (loss) on debt extinguishment on the Consolidated Statement of Operations. 84 During the third quarter of 2025, $ 5.0 million of our 8.125 % Senior Notes and $ 10.0 million of our 6.50 % Senior Notes were exchanged for $ 15.0 million of our 8.75 % Senior Notes. During the fourth quarter of 2025 we completed the redemption of our 8.125 % Senior Notes in the amount of $ 98.4 million, settling the debt obligation in full. We also repurchased $ 6.1 million of our 6.50 % Senior Notes in the fourth quarter of 2025. Senior Notes Due 2030 The components of our Senior Notes due 2030 at December 31, 2025 are as follows: (in thousands) 8.75 % (1) Senior Notes due 2030 $ 129,473 Unamortized deferred financing costs ( 5,867 ) Unamortized premium 27,364 Net debt balance $ 150,970 (1) The 8.75 % Senior Notes mature in June 2030 and is included in noncurrent liabilities in the Consolidated Balance Sheets at December 31, 2025. As of December 31, 2025 the 8.75 % Senior Notes bear an effective interest rate of 4.6 %. In May 2025, we completed privately negotiated exchange transactions (the "Exchanges") in which we issued $ 100.7 million aggregate principal amount of newly-issued 8.75 % Senior Secured Second Lien Notes due 2030 (the "Senior Secured Notes Due 2030") as consideration for the Exchanged Notes. The Senior Secured Notes Due 2030 are unconditionally guaranteed jointly and severally by all of our direct and indirect wholly-owned restricted subsidiaries, subject to certain excluded subsidiaries (collectively, the "Guarantors"). The Senior Secured Notes Due 2030 are secured by substantially all of our assets and the assets of the Guarantors. The security interests in our assets are subject to an intercreditor agreement pursuant to which the Senior Secured Notes Due 2030 are subordinated in right of payment and lien priority to the satisfaction in full of (i) the obligations and satisfaction of the liens under our Credit Agreement (described below), (ii) the obligations and lien under the junior secured promissory note with B. Riley and (iii) certain obligations secured by a lien in favor of the Pension Benefit Guaranty Corporation (a wholly owned United States government corporation and agency acting on behalf of the B&W Pension Plan (as defined below)) in connection with its waiver of required minimum contributions to the Retirement Plan for Employees of Babcock & Wilcox Commercial Operations (the "B&W Pension Plan"). The Senior Secured Notes Due 2030 accrue interest a rate of 8.75 % per annum, payable semi-annually in arrears on June 30 and December 30, starting December 30, 2025, and mature on June 30, 2030. Subject to the intercreditor arrangements discussed above, we may redeem the Senior Secured Notes Due 2030 at any time, on or after May 16, 2026, for cash, at a redemption price equal to 100 % of the applicable principal amount being redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. The indenture governing the Senior Secured Notes Due 2030 contains certain affirmative and negative covenants that, among other things, limit our and our subsidiaries' ability to incur additional indebtedness or liens, and certain events of default, including with respect to a failure to make payments under the Senior Secured Notes Due 2030 and certain bankruptcy and insolvency events. As a result of the Company's financial situation as a going concern entity at the time of refinancing, and the fact the creditors have granted concessions, the Exchanges were accounted for as a troubled debt restructuring. Therefore, the Company recognized the difference between the face value of the original 8.125 % Senior Notes and 6.50 % Senior Notes and the face value of the 8.75 % Senior Notes as debt premium, which it amortizes using the effective interest method over the new 5-year term through May 2030. During the year ended December 31, 2025, we made $ 13.8 million of in-kind contributions of our Senior Secured Notes Due 2030 to settle Company obligations. 85 Credit Agreement with Axos We entered into the Credit Agreement in January 2024, with certain of our subsidiaries as guarantors, the lenders party thereto from time to time and Axos, as administrative agent, swingline lender and letter of credit issuer. The Credit Agreement provides for an up to $ 150.0 million asset-based Credit Facility, including a $ 100.0 million letter of credit sublimit. Our obligations under the Credit Agreement are guaranteed by certain of our domestic and foreign subsidiaries. B. Riley originally provided a guaranty of payment with regard to our obligations under the Credit Agreement, however this guaranty is no longer in place (refer to Note 24 to the Consolidated Financial Statements which outlines that the guaranty was cancelled in February 2026 under the Tenth Amendment to the Credit Agreement - "the Tenth Amendment"). We used and expect to use the proceeds and letter of credit availability under the Credit Agreement to (i) provide for working capital needs, (ii) provide cash collateral to secure letters of credit to be issued under the Credit Agreement, and (iii) provide for general corporate purposes. The Credit Agreement has a maturity date of January 18, 2028, provided that by November 30, 2026, the 6.50 % Senior Notes have not been repaid, defeased, or otherwise satisfied in full or refinanced, or the maturity date has not otherwise been extended to a date on or after July 18, 2028, then November 30, 2026, as amended by the Tenth Amendment. The interest rates applicable under the Credit Agreement are: (i) with respect to SOFR Loans, (a) SOFR plus 5.25 % if the outstanding principal amount of loans is equal to or less than $ 100.0 million or (b) SOFR plus 4.00 % if the outstanding principal amount of loans is greater than $ 100.0 million; (ii) with respect to Base Rate Loans, the greater of (a) the Federal Funds Rate plus 2.00 % plus the Applicable Margin, (b) the prime rate as designated by Axos plus the Applicable Margin, and (c) Daily Simple SOFR plus 1.00 % plus the Applicable Margin; and (iii) with respect to the default rate under the Credit Agreement, the then-existing interest rate plus 2.00 %. In connection with the Credit Agreement, we are required to pay (i) a commitment fee equal to 0.50 % per annum multiplied by the positive difference by which the Aggregate Revolving Commitments exceed the Total Revolvings Outstanding (as defined in the Credit Agreement), subject to adjustment, (ii) a facility fee equal to the Applicable Margin for SOFR Loans multiplied by the positive difference by which the actual daily amount of L/C Obligations the Administrative Agent is then holding Specified Cash Collateral exceeds the actual daily Outstanding Amount of Revolving Loans, and (iii) a collateral monitoring fee of $ 1,000 per month. We are permitted to prepay all or any portion of the loans under the Credit Agreement prior to maturity subject to the payment of an early termination fee. The Credit Agreement requires mandatory prepayments under certain circumstances, including in the event of an overadvance. The obligations under the Credit Agreement are secured by substantially all assets of B&W and each of the guarantors, in each case subject to intercreditor arrangements. The Credit Agreement contains certain representations and warranties, affirmative covenants, negative covenants and conditions that are customarily required for similar financings. The Credit Agreement requires us to comply with certain financial maintenance covenants, including a quarterly fixed charge coverage test, a quarterly total net leverage ratio test, a cash repatriation covenant, a minimum liquidity covenant, an annual cap on maintenance capital expenditures and a limit on unrestricted cash. The Credit Agreement also contains customary events of default (subject, in certain instances, to specified grace periods) including, but not limited to, the failure to make payments of interest or premium, if any, on, or principal under the Credit Agreement, the failure to comply with certain covenants and agreements specified in the Credit Agreement, defaults in respect of certain other indebtedness, and certain events of insolvency. If any event of default occurs, Axos may declare the principal, premium, if any, interest and any other monetary obligations on all the then outstanding amounts under the Credit Agreement may become due and payable immediately. At December 31, 2025, after giving consideration to the Amendments to the Credit Agreement, we are in compliance with all financial and other covenants contained in the Credit Agreement. The key terms of the Credit Agreement described above reflect the various amendments completed since the original Credit Agreement was entered into and reflect changes in the Company's capital structure, borrowing base, collateral requirements and financial covenant levels. These amendments addressed, among other items, (i) authorization of specified asset dispositions, (ii) adjustments to borrowing base components, including increases in inventory valuation percentages and changes to PBGC reserve requirements, (iii) temporary and permanent modifications to minimum liquidity thresholds, (iv) deferral or modification of certain covenant ratios, (v) add‑backs related to discontinued operations and capital expenditures for covenant calculations and (vi) updates to maturity provisions tied to the refinancing or repayment of other outstanding debt instruments. 86 On February 25, 2026, the Company with certain subsidiaries of the Company as guarantors, B. Riley, and the lenders party to the Credit Agreement with Axos, as administrative agent, entered into the Tenth Amendment to the Credit Agreement. Pursuant to the Tenth Amendment, Axos and the Lenders party to the Credit Agreement consented to amend certain provisions of the Credit Agreement to, among other things, (i) increase the amounts available to be borrowed based on inventory and receivables in the borrowing base under the Credit Agreement; (ii) extend the maturity date of the Credit Agreement to January 18, 2028; (iii) suspend the PBGC Reserve (provided that the PBGC Reserve shall be re-imposed in the amount of $ 3.0 million on January 1, 2027 unless the Company has provided evidence to Axos that the $ 3.0 million installment due to the PBGC on or prior to September 15, 2026 has been paid); (iv) modify the covenants relating to deposit account control agreements and institutions to allow for certain holdings in foreign currencies; and (v) release B. Riley as a specified guarantor thereunder (see Note 24 to the Consolidated Financial Statements). At December 31, 2025, we had a total of $ 66.8 million outstanding on the Credit Agreement, which includes $ 0.0 million drawn on the revolving credit portion of the facility and $ 66.8 million drawn on the letter of credit portion. At December 31, 2025, cash collateralizing the letters of credit totaling $ 66.8 million is classified as Current restricted cash and Long-term restricted cash included in the Consolidated Balance Sheets. The weighted average interest rate on short-term obligations outstanding as of December 31, 2025 and 2024 was 9.1 % and 9.5 %, respectively. Revolving and Letter of Credit Agreements In June 2021, we entered into the Revolving Credit Agreement with PNC as administrative agent, and the Letter of Credit Agreement, pursuant to which PNC agreed to issue up to $ 110.0 million in letters of credit that were secured in part by cash collateral provided by MSD, as well the Reimbursement Agreement and the Debt Facilities. Our obligations under the Debt Facilities were guaranteed by certain of our existing and future domestic and foreign subsidiaries. B. Riley, a related party, provided a guaranty of payment with regard to our obligations under the Reimbursement Agreement. The Debt Facilities were effectively replaced by our Credit Agreement with Axos that began in January 2024. The Revolving Credit Agreement with PNC was terminated in connection with our entry into the Credit Agreement and we transitioned letters of credit outstanding under the Letter of Credit Agreement and Reimbursement Agreement to the Credit Agreement. All outstanding letters of credit were transitioned to the Credit Agreement by September 30, 2024, and the Letter of Credit Agreement and Reimbursement Agreement were terminated at that time. We recognized a loss on debt extinguishment of $ 7.3 million in the year ended December 31, 2024 related to the write-off of unamortized deferred financing fees and other costs incurred to exit the Debt Facilities. A summary of usage of letters of credit under domestic facilities is as follows: December 31, (in thousands) 2025 2024 Letters of credit under domestic facilities: Performance letters of credit $ 45,236 $ 22,421 Financial letters of credit 14,365 18,550 Total outstanding $ 59,601 $ 40,971 Backstopped letters of credit $ 7,194 $ 750 Surety backstopped letters of credit 16,452 15,742 Letters of credit subject to currency revaluation 27,105 4,126 Other Letters of credit, bank guarantees and surety bonds Certain of our subsidiaries, that are primarily outside of the United States, have credit arrangements with various commercial banks and other financial institutions for the issuance of letters of credit and bank guarantees in association with contracting activity. We have posted surety bonds to support contractual obligations to customers relating to certain contracts. We utilize bonding facilities to support such obligations, but the issuance of bonds under those facilities is typically at the surety's discretion. 87 These bonds generally indemnify customers should we fail to perform our obligations under our applicable contracts. We, and certain of our subsidiaries, have jointly executed general agreements of indemnity in favor of surety underwriters relating to surety bonds the underwriters issue in support of some of our contracting activity. The following table provides a summary of outstanding letters of credit issued outside of the domestic facilities, and outstanding surety bonds: December 31, (in thousands) 2025 2024 Letters of credit under non-domestic facilities $ 6,545 $ 477 Surety Bonds 253,407 177,766 Our ability to obtain and maintain sufficient capacity under our current Debt Facilities is essential to allow us to support the issuance of letters of credit, bank guarantees and surety bonds. Without sufficient capacity, our ability to support contract security requirements in the future will be diminished. Other Loans Payable As of December 31, 2025, we had loans payable of approximately $ 8.4 million, net of debt issuance costs of $ 0.5 million, related to sale-leaseback financing transactions. The remaining future cash payments related to the sale-leaseback financing transactions for each year ending December 31 are as follows: (in thousands) 2026 $ 765 2027 782 2028 800 2029 818 2030 836 Thereafter 11,677 Total minimum liability requirements 15,678 Imputed interest ( 6,744 ) Total $ 8,934 As of December 31, 2024, we had loans payable of approximately $ 9.3 million, net of debt issuance costs of $ 0.5 million, related to sale-leaseback financing transactions. During the year ended December 31, 2025, we received a payment of $ 5.0 million from the State of West Virginia relating to our BrightLoop ™ project which is considered a forgivable loan. The loan will be forgiven in full when certain employment and capital expenditure milestones are met during the course of project. 88 Interest expense in the Consolidated Financial Statements consisted of the following components: Year ended December 31, (in thousands) 2025 2024 2023 Components associated with borrowings from: Senior Notes due 2026 $ 16,961 $ 25,512 $ 25,601 Senior Notes due 2030 6,729 — — Revolving Credit Agreement 2,961 4,892 1,494 26,651 30,404 27,095 Components associated with amortization or accretion of: Revolving Credit Agreement 4,585 6,149 4,643 Senior Notes due 2026 2,035 2,606 2,525 Senior Notes due 2030 ( 3,075 ) — — 3,545 8,755 7,168 Components associated with interest from: Lease liabilities 2,427 2,037 2,813 Letter of Credit interest and fees 4,498 3,942 3,519 Other interest expense 1,018 1,007 1,966 Capitalized interest ( 607 ) — — 7,336 6,986 8,298 Total interest expense $ 37,532 $ 46,145 $ 42,561 NOTE 16 – CAPITAL STOCK Preferred Stock During the twelve months ending December 31, 2025, our Board of Directors approved dividends tot aling $ 14.9 million to holders of the Preferred Stock. There were no cumulative undeclared dividends of the Preferred Stock at December 31, 2025, and all declared dividends have been paid as of December 31, 2025. Common Stock In April 2024, we entered into the Sales Agreement with the Agents, in connection with an at-the-market offering. As of December 31, 2025 and 2024, 15.0 million and 5.0 million shares, respectively, have been sold pursuant to the Sales Agreement, for net proceeds of $ 32.5 million and $ 7.9 million, respectively. In November 2025, we entered into the 2025 Sales Agreement with the 2025 Agents, in connection with the offer and sale from time to time by us of shares of our common stock, having an aggregate offering price of up to $ 200.0 million through the 2025 Agents. As of December 31, 2025, 18.7 million shares have been sold pursuant to the 2025 Sales Agreement for net proceeds of $ 95.7 million. Applied Digital On November 4, 2025, we entered into a limited notice to proceed ("LNTP") with Applied Digital for a project to design and install four 300 -megawatt natural gas-fired power plants consisting of boilers and associated steam turbines to deliver power for an AI factory. As further discussed in Note 24 to the Consolidated Financial Statements, we and Base Electron, an IPP backed by Applied Digital, entered into a definitive written agreement in relation to the project (the "Definitive Agreement") which outlined additional terms and conditions for the project. The plant is targeted to begin operation in 2028. In connection with the entry into the LNTP, we issued to Applied Digital, in a private placement, (i) 0.5 million shares of common stock, par value $ 0.01 per share for a purchase price of $ 2 million and (ii) a warrant (the "Initial Warrant") exercisable to purchase 2.6 million shares of our common stock at an exercise price of $ 4.11 , subject to registration rights. 89 Under the terms of the Initial Warrant, it is classified as a liability-based award which requires calculation of fair value for each reporting period until settled or expired. As of December 31, 2025, we calculated a fair value of the Initial Warrant of $ 8.3 million which is recorded in Other accrued liabilities in the Condensed Balance Sheets. We used the following assumptions to determine the fair value of the Initial Warrant granted as of December 31, 2025: Risk-free interest rate 3.84 % Expected volatility 105 % Exercise price $ 4.11 Remaining term of warrant 7 years In making these assumptions, we based risk-free rates on the corresponding U.S. Treasury spot rates for the remaining duration of the grant, which we convert to a continuously compounded rate. We based estimated volatility on the historical returns of our stock price and selected guideline companies over the remaining term of the grant. The LNTP also granted to Applied Digital additional warrants to purchase up to 7.86 million shares of our common stock, on the same terms as the Initial Warrant, which was unvested as of December 31, 2025, but vested as a result of the execution of the Definitive Agreement as outlined in Note 24 to the Consolidated Financial Statements. NOTE 17 – SUPPLEMENTAL CASH FLOW INFORMATION The following table provides a reconciliation of cash and cash equivalents and current and long-term restricted cash reported within the Consolidated Balance Sheets and in the Consolidated Statements of Cash Flows: December 31, (in thousands) 2025 2024 2023 Held by foreign entities $ 9,048 $ 20,790 $ 44,388 Held by U.S. entities 80,408 6,065 20,947 Cash and cash equivalents 89,456 26,855 65,335 Reinsurance reserve requirements 2,407 2,024 380 Project indemnity collateral (1) 32,264 12,878 — Bank guarantee collateral — — 1,823 Letters of credit collateral (2) 66,801 89,265 584 Hold-back for acquisition purchase price — — 2,950 Escrow for long-term project 10,432 42 297 Current and Long-term restricted cash and cash equivalents 111,904 104,209 6,034 Total Cash, cash equivalents and restricted cash shown in the Consolidated Statements of Cash Flows (3) $ 201,360 $ 131,064 $ 71,369 (1) We released $ 5.7 million in project indemnity restricted cash collateral for the Letter of Credit Agreement in 2023. (2) Balance drawn on Axos Credit Agreement to serve as collateral on our letters of credit. This is reflected in Current restricted cash and Long-term restricted cash in the Consolidated Balance Sheets. (3) Includes cash held at discontinued operations of $ 3.5 million and $ 27.3 million at December 31, 2024 and 2023, respectively. NOTE 18 – STOCK-BASED COMPENSATION Stock options There were no stock options awarded in 2025. As of December 31, 2025, there were nominal shares outstanding and exercisable, at a weighted average exercise price of $ 63.57 and $ 63.55 , respectively, and a weighted average remaining contractual term of 1.7 years. 90 Restricted stock units Non-vested restricted stock units activity for the year ended December 31, 2025 is as follows: (in thousands, except share amounts) Number of shares Weighted-average grant date fair value Non-vested at beginning of period 1,740 $ 2.33 Granted 1,808 1.29 Vested ( 1,422 ) 2.06 Cancelled/forfeited ( 125 ) 1.63 Non-vested at end of period 2,001 1.31 As of December 31, 2025, total compensation expense not yet recognized related to non-vested restricted stock units was $ 2.2 million and the weighted-average period in which the expense is expected to be recognized is 2.0 years. As of December 31, 2025, total compensation expense was $ 2.6 million. Restricted stock units with market conditions In July 2022, we granted market-based RSUs to certain members of management. The number of market-based RSUs granted was 0.96 million. The RSUs will vest if our closing stock price on the NYSE is equal to or higher than the Stock Price Goal of $ 12.00 per share during the performance period, which expires on the 5th anniversary of the Grant Date. The $ 6.70 grant date fair value per market-based RSU was determined using a Monte Carlo simulation approach. There was no compensation expense for the year ended December 31, 2025. Restricted stock units with market conditions activity for the year ended December 31, 2025 was as follows: (in thousands, except share amounts) Number of shares Weighted-average grant date fair value Non-vested at beginning of period 595 $ 6.70 Cancelled/forfeited ( 75 ) 6.70 Non-vested at end of period 520 6.70 Stock Appreciation Rights (SARs) In December 2018, we granted stock appreciation rights to certain employees ("Employee SARs") and to a non-employee related party, BRPI Executive Consulting, LLC ("Non-employee SARs"). The SARs expire ten years after the grant date and primarily vest 100 % upon completion after the required years of service. Upon vesting, SARs may be exercised within 10 business days following the end of any calendar quarter during which the volume weighted average share price is greater than the share price goal. Upon exercise of the SARs, holders receive a cash-settled payment equal to the number of SARs that are being exercised multiplied by the difference between the stock price on the date of exercise minus the SARs base price. Employee SARs were issued under the Fourth Amended and Restated 2015 LTIP, and Non-employee SARs were issued under a Non-employee SARs agreement. The liability method was used to recognize the accrued compensation expense with cumulatively adjusted revaluations to the then current fair value at each reporting date through final settlement. In September 2024, the former Non‑employee SAR holder became an employee of the Company. As of December 31, 2025, there were two holders of Employee SARs, as all other SARs terminated upon the holders departure from the Company. 91 We used the following assumptions to determine the fair value of the SARs granted as of December 31, 2025 and 2024: December 31, 2025 2024 Risk-free interest rate 3.70 % 4.30 % Expected volatility 80 % 46 % Expected life in years 3.25 3.75 Suboptimal exercise factor 2.0 x 2.0 x In making these assumptions, we based estimated volatility on the historical returns of our stock price and selected guideline companies. We based risk-free rates on the corresponding U.S. Treasury spot rates for the expected duration at the date of grant, which we convert to a continuously compounded rate. We relied upon a suboptimal exercise factor, representing the ratio of the base price to the stock price at the time of exercise, to account for potential early exercise prior to the expiration of the contractual term. With consideration to the executive level of the SARs holders, a suboptimal exercise multiple of 2.0 x was selected. Subject to vesting conditions, should the stock price achieve a value of 2.0 x above the base price, we assume the holders will exercise prior to the expiration of the contractual term of the SARs. The expected term for the SARs is an output of the valuation model in estimating the time period that the SARs are expected to remain unexercised. The valuation model assumes the holders will exercise their SARs prior to the expiration of the contractual term of the SARs. As of December 31, 2025 and 2024, the SARs are fully vested and their total intrinsic value is zero . NOTE 19 – INCOME TAXES Loss from continuing operations before income tax expense is comprised of the following: Year ended December 31, (in thousands) 2025 2024 2023 United States $ ( 484,927 ) $ ( 101,182 ) $ ( 108,484 ) Other than the United States 460,359 9,711 4,876 Loss from continuing operations before income tax expense $ ( 24,568 ) $ ( 91,471 ) $ ( 103,608 ) Significant components of the provision for income taxes from continuing operations are as follows: Year ended December 31, (in thousands) 2025 2024 2023 Current: Federal $ 111 $ ( 739 ) $ 383 State 116 ( 298 ) 540 Foreign 8,316 7,505 5,025 Total current provision 8,543 6,468 5,948 Deferred: Federal 126 3,346 132 State — 2,900 ( 70 ) Foreign ( 389 ) 87 ( 406 ) Total deferred provision ( 263 ) 6,333 ( 344 ) Provision for income taxes $ 8,280 $ 12,801 $ 5,604 The provision for income taxes attributable to continuing operations differs from the amount computed by applying the statutory federal income tax rate to income (loss) before the provision (benefit) for income taxes. 92 The sources and tax effects of the differences are as follows: (in thousands, except for percentages) Year ended December 31, 2025 U.S. Federal Statutory Tax Rate $ ( 5,159 ) 21 % State and Local Income Taxes, Net of Federal Income Tax Effect (1) 92 — % Foreign Tax Effects Canada Statutory tax rate difference ( 1,067 ) 4 % Provincial tax 2,763 ( 11 ) % Prior period adjustment ( 773 ) 3 % Other 632 ( 3 ) % Luxembourg Statutory tax rate difference 14,179 ( 58 ) % Nontaxable income ( 104,965 ) 427 % Taxable gain from sale of subsidiary 36,211 ( 147 ) % Change in valuation allowance ( 204,133 ) 831 % Write-off of net operating losses 155,012 ( 631 ) % Other ( 4 ) — % Panama Statutory tax rate difference ( 2,204 ) 9 % Nondeductible bad debt expense 14,229 ( 58 ) % Other nontaxable items ( 456 ) 2 % Indonesia Withholding Tax 592 ( 2 ) % Other 289 ( 1 ) % Other Foreign Jurisdiction Other 1,831 ( 8 ) % Effect of Cross-Border Tax Laws Subpart F 1,344 ( 5 ) % Other ( 160 ) — % Effect of Changes in Tax Laws or Rates Enacted in the Current Period — — % Nontaxable or Nondeductible Items IRC Section 162(m) limitation 821 ( 3 ) % Stock-based compensation 270 ( 1 ) % Meals and entertainment 226 ( 1 ) % Parking lot expenses 514 ( 2 ) % Loss on dissolution ( 7,175 ) 29 % Other 8 — % Tax Credits Research and development credit ( 601 ) 2 % Foreign tax credit 1,826 ( 7 ) % Changes in Valuation Allowances 104,540 ( 426 ) % Changes in Unrecognized Tax Benefits — — % Other Adjustments Prior period adjustments ( 519 ) 2 % Other 117 — % Income tax expense $ 8,280 ( 34 ) % (1) State and local taxes in Tennessee, Louisiana, Kentucky and California comprise the majority of this category. 93 Year ended December 31, (in thousands) 2024 2023 Income tax benefit at federal statutory rate $ ( 19,209 ) $ ( 21,758 ) State and local income taxes 2,557 105 Foreign rate differential 533 284 Non-deductible (non-taxable) items ( 344 ) 860 Tax credits ( 37 ) 514 Valuation allowances 17,529 19,558 Unrecognized tax benefits — 278 Withholding taxes 999 826 Change in indefinite reinvestment assertion 2,432 — Return to provision and prior year true-up 6,304 4,360 Other 2,037 577 Income tax expense $ 12,801 $ 5,604 Deferred income taxes reflect the tax effects of differences between the financial and tax bases of assets and liabilities. 94 Significant components of deferred tax assets and liabilities are as follows: Year ended December 31, (in thousands) 2025 2024 Deferred tax assets: Pension liability $ 41,469 $ 45,581 Accruals 6,445 8,058 Long-term contracts 896 2,636 Net operating loss carryforward 237,164 354,656 State net operating loss carryforward 34,425 21,945 Capital loss carryforward 9,740 — Interest limitation carryforward 64,864 63,670 Foreign tax credit carryforward — 1,826 Other tax credits 2,894 2,292 Lease liability 11,167 15,437 Capitalized R&D 1,835 2,299 Property, plant and equipment 1,044 1,036 Other 12,667 4,707 Total deferred tax assets 424,610 524,143 Valuation allowance for deferred tax assets ( 406,931 ) ( 499,749 ) Total deferred tax assets, net 17,679 24,394 Deferred tax liabilities: Pension liability — ( 815 ) Property, plant and equipment ( 1,081 ) ( 1,238 ) Right-of-use assets ( 12,436 ) ( 16,262 ) Unremitted earnings ( 4,118 ) ( 3,943 ) Intangibles ( 7,725 ) ( 11,534 ) Other ( 2,040 ) ( 235 ) Total deferred tax liabilities ( 27,400 ) ( 34,027 ) Net deferred tax liabilities $ ( 9,721 ) $ ( 9,633 ) At December 31, 2025 we have foreign NOL carryforward DTAs of approximately $ 101.4 million available to offset future taxable income in certain foreign jurisdictions. These foreign NOL carryforwards do not expire. At December 31, 2025, we have U.S. federal NOL carryforward DTAs of approximately $ 135.8 million. Of this amount, $ 18.1 million will expire in 2036 and 2037. The remaining amount of U.S. NOL carryforward does not expire. A portion of the net operating loss carryforward is limited under IRC Section 382. Approximately $ 109.7 million of our U.S. federal NOL carryforward is not subject to the IRC Section 382 limitation. At December 31, 2025, we have state NOL carryforward DTAs of $ 34.4 million available to offset future taxable income in various jurisdictions. Of this amount, $ 21.1 million will expire between 2026 and 2045. At December 31, 2025, we have U.S. general business and R&D tax credit DTAs of approximately $ 2.9 million available to offset future taxable income which will begin to expire in 2034. At December 31, 2025, we have valuation allowances of $ 406.9 million for deferred tax assets, which we expect will not be realized through carry-backs, reversals of existing taxable temporary differences, estimates of future taxable income or tax-planning strategies. Deferred tax assets are evaluated for realizability under ASC 740, considering all positive and negative evidence. At December 31, 2025, our weighting of positive and negative evidence included an assessment of historical income by jurisdiction adjusted for nonrecurring items, as well as an evaluation of other qualitative factors such as the length 95 and magnitude of pretax losses. The valuation allowances may be reversed in the future if sufficient positive evidence exists. Any reversal of our valuation allowance could be material to the income or loss for the period in which our assessment changes. The net change during the year in the total valuation allowance is as follows: Year ended December 31, (in thousands) 2025 2024 2023 Balance at beginning of period $ ( 499,749 ) $ ( 535,256 ) $ ( 507,493 ) Charges to costs and expenses 104,125 30,513 ( 25,166 ) Charges to other accounts ( 11,307 ) 4,994 ( 2,597 ) Balance at end of period $ ( 406,931 ) $ ( 499,749 ) $ ( 535,256 ) Sections 382 and 383 of the IRC limits, for U.S. federal income tax purposes, the annual use of NOL carryforwards (including previously disallowed interest carryforwards) and tax credit carryforwards, respectively, following an ownership change. Under IRC Section 382, an ownership change occurs if shareholders owning at least 5% of our common stock have increased their collective holdings by more than 50% during the prior three-year period. Based on information that is publicly available, we determined that a Section 382 ownership change occurred in July 2019. As a result of this change in ownership, we estimated that the future utilization of our federal NOLs (and certain credits and previously disallowed interest deductions) will become limited to approximately $ 1.2 million annually ($ 0.3 million tax effected) We maintain a full valuation allowance on the majority of its U.S. deferred tax assets, including the deferred tax assets associated with the federal NOLs, credits and disallowed interest carryforwards. Undistributed earnings of certain foreign subsidiaries amounted to approximately $ 127.4 million. We do not intend to assert indefinite reinvestment with respect to all of the undistributed earnings in foreign subsidiaries. We have recognized a deferred tax liability in the amount of $ 4.1 million. We recognize the benefit of a tax position when we conclude that a tax position, based solely on its technical merits, is more-likely-than-not to be sustained upon examination. A recognized tax benefit is measured as the largest amount of benefit, on a cumulative probability basis, which is more likely-than-not to be realized upon settlement. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. Below is a tabular roll-forward of the beginning and ending aggregate unrecognized tax benefits on a continuing operations basis: Year ended December 31, (in thousands) 2025 2024 2023 Balance at beginning of period $ 34,866 $ 37,329 $ 36,196 Increases based on tax positions taken in prior years 9,740 — — Decreases based on tax positions taken in prior years — — ( 9 ) Decreases due to lapse of applicable statute of limitation — ( 512 ) — Currency translation adjustments 4,054 ( 1,951 ) 1,142 Balance at end of period $ 48,660 $ 34,866 $ 37,329 Unrecognized tax benefits of $ 2.5 million would, if recognized, impact the effective tax rate. The remaining balance of unrecognized tax benefits relates to deferred tax assets that, if recognized, would require a full valuation allowance. We recognize interest and penalties related to unrecognized tax benefits in our provision for income taxes; however, such amounts are not significant to any period presented. Tax years 2016 through 2024 remain open to assessment by the United States Internal Revenue Service and various state and international tax authorities. We are currently under audit in the Philippines for tax year 2023 and do not expect the outcome of the audit to have a material impact on the financial statements. We do not have any returns under examination in any other jurisdictions. 96 NOTE 20 – CONTINGENCIES Russian Invasion of Ukraine We utilize a restricted party screening process completed by a third party to monitor compliance with applicable trade restrictions, including those trade restrictions implemented in response to the Russian invasion of Ukraine. Other Due to the nature of our business, from time to time, we are involved in routine litigation or subject to disputes or claims related to our business activities, including, among other things: performance or warranty-related matters under our customer and supplier contracts and other business arrangements; and workers' compensation, premises liability and other claims. Based on prior experience, we do not expect that any of these other litigation proceedings, disputes and claims will have a material adverse effect on our consolidated financial position, results of operations or cash flows. NOTE 21 – ACCUMULATED OTHER COMPREHENSIVE LOSS Gains and losses deferred in AOCI are generally reclassified and recognized in the Consolidated Statements of Operations once they are realized. The changes in the components of AOCI, net of tax, for the years ended December 31, 2025, 2024, and 2023 were as follows: (in thousands) Currency translation loss Net unrecognized loss related to benefit plans (net of tax) Total Balance at December 31, 2022 $ ( 70,333 ) $ ( 2,453 ) $ ( 72,786 ) Other comprehensive income before reclassifications 5,555 — 5,555 Amounts reclassified from AOCI to net income — 870 870 Net other comprehensive income 5,555 870 6,425 Balance at December 31, 2023 $ ( 64,778 ) $ ( 1,583 ) $ ( 66,361 ) Other comprehensive loss before reclassifications ( 9,459 ) — ( 9,459 ) Amounts reclassified from AOCI to net (loss) income ( 11,250 ) 410 ( 10,840 ) Net other comprehensive (loss) income ( 20,709 ) 410 ( 20,299 ) Balance at December 31, 2024 $ ( 85,487 ) $ ( 1,173 ) $ ( 86,660 ) Other comprehensive income before reclassifications 973 — 973 Amounts reclassified from AOCI to net income 68,358 1,351 69,709 Net other comprehensive income 69,331 1,351 70,682 Balance at December 31, 2025 $ ( 16,156 ) $ 178 $ ( 15,978 ) The amounts reclassified out of AOCI by component and the affected Consolidated Statements of Operations line items are as follows (in thousands): AOCI component Line items in the Consolidated Statements of Operations affected by reclassifications from AOCI Year ended December 31, 2025 2024 2023 Release of currency translation adjustment with the sale of business (Loss) income from discontinued operations $ ( 68,358 ) $ 11,250 $ — Pension and post retirement adjustments, net of tax Benefit plans, net ( 1,351 ) ( 410 ) ( 870 ) Net (loss) income $ ( 69,709 ) $ 10,840 $ ( 870 ) 97 NOTE 22 – FAIR VALUE MEASUREMENTS The accounting guidance established by ASC 820, Fair Value Measurements and Disclosures , establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (known as "Level 1") and the lowest priority to unobservable inputs (known as "Level 3"). Where observable inputs are available for substantially the full term of the asset or liability, the instrument is categorized in Level 2. The following tables summarize financial assets carried at fair value, all of which were valued from readily available prices (Level 1). Securities Level 1 (in thousands) December 31, 2025 December 31, 2024 Corporate notes and bonds $ 5,334 $ 5,196 United States Government and agency securities 1,806 1,598 Total fair value of securities $ 7,140 $ 6,794 Investments in securities are presented as $ 6.5 million in Other current assets and $ 0.6 million Other assets as of December 31, 2025 in the Consolidated Balance Sheets with contractual maturities ranging from 0 to 2 years. Senior Notes due 2026 See Note 15 to the Consolidated Financial Statements for a discussion of our Senior Notes due 2026. The fair value of the Senior Notes due 2026 is based on readily available quoted market prices (known as "Level 1") as of December 31, 2025. December 31, 2025 December 31, 2024 (in thousands) 8.125 % Senior Notes ("BWSN") (1) 6.50 % Senior Notes ("BWNB") 8.125 % Senior Notes ("BWSN") 6.50 % Senior Notes ("BWNB") Carrying Value $ — $ 84,792 $ 193,035 $ 151,440 Estimated Fair Value — 83,435 170,643 120,546 (1) We redeemed the 8.125 % Senior Notes at December 31, 2025. See Note 15 to the Consolidated Financial Statements for further information. Senior Notes due 2030 The fair value of the Senior Notes due 2030 is based on present value of future cash flows discounted at estimated borrowing rates for similar debt instruments or on estimated prices based on current yields for debt issues of similar quality and terms (known as Level 2) as of December 31, 2025. December 31, 2025 (in thousands) Carrying Value Estimated Fair Value 8.75 % Senior Notes $ 129,473 $ 127,359 98 Other Financial Instruments We used the following methods and assumptions in estimating fair value amounts for other financial instruments: • Cash and cash equivalents and restricted cash and cash equivalents . The carrying amounts reported in the accompanying Consolidated Balance Sheets for cash and cash equivalents and restricted cash and cash equivalents approximate their fair value due to their highly liquid nature and are classified as Level 1. • Revolving Debt . We base the fair value of debt instruments on quoted market prices. Where quoted prices are not available, we base the fair value on Level 2 inputs such as the present value of future cash flows discounted at estimated borrowing rates for similar debt instruments or on estimated prices based on current yields for debt issues of similar quality and terms. The fair value of Revolving Debt was calculated at $ 65.5 million, which is $ 1.3 million less than its carrying amount at December 31, 2025. NOTE 23 – RELATED PARTY TRANSACTIONS Transactions with B. Riley Based on Schedule 13D filings with the SEC, B. Riley beneficially owns approxim ately 22.1 % of our outstanding common stock as of December 31, 2025. B. Riley currently has the right to nominate one member of our Board of Directors pursuant to the investor rights agreement we entered into with B. Riley in April 2019. The investor rights agreement also provides pre-emptive rights to B. Riley with respect to certain future issuances of our equity securities. As described in Note 15 to the Consolidated Financial Statements, in connection with our entry into the Credit Agreement in January 2024, we entered into a guaranty agreement and related fee and reimbursement agreement with B. Riley. The guaranty covered all of our obligations under the Credit Agreement, and the fee agreement required us to pay an annual fee to B. Riley equal to 2.00 % of Aggregate Revolving Commitments under the Credit Agreement (or approximately $ 3 million) as consideration for B. Riley's agreements and commitments under the guaranty. In June 2025, the B. Riley Guaranty, as well as the associated B. Riley Guaranty fees, were suspended until January 1, 2027. In February 2026, the guaranty and fee agreement were cancelled. See Note 24 to the Consolidated Financial Statements for further information. As described in Note 16 to the Consolidated Financial Statements, in April 2024 and November 2025, we entered into sales agreements with B. Riley, among others, in connection with the offer and sale from time to time of shares of our common stock. B. Riley will be entitled to compensation equal to 3.0 % of the gross proceeds from each sale of the shares sold through it as the designated Agent. We entered into an Advisory Services Agreement with B. Riley in December 2024 to provide financial advisory services to the Company relating to the Company's evaluation of debt financing alternatives. Under this agreement, payments are a cash fee equal to 1.75 % of the total financing value, due and payable immediately upon the closing of each debt financing. During the year ended December 31, 2025, we paid a total of $ 2.3 million in connection with this agreement. NOTE 24 – SUBSEQUENT EVENTS Buybacks of Senior Notes We repurchased $ 12.3 million our 6.50 % Senior Notes from January 1, 2026 through March 6, 2026. Sales of Common Stock We sold 3.8 million shares of our common stock pursuant to the 2025 Sales Agreement, described in Note 16 to the Consolidated Financial Statements, from January 1, 2026 through March 6, 2026 for net proceeds of $ 31.7 million. Tenth Amendment to Credit Agreement On February 25, 2026, the Company with certain subsidiaries of the Company as guarantors, B. Riley, and the lenders party to the Credit Agreement with Axos, as administrative agent, entered into the Tenth Amendment to the Credit Agreement. Pursuant to the Tenth Amendment, Axos and the Lenders party to the Credit Agreement consented to amend certain 99 provisions of the Credit Agreement to, among other things, (i) increase the amounts available to be borrowed based on inventory and receivables in the borrowing base under the Credit Agreement; (ii) extend the maturity date of the Credit Agreement to January 18, 2028; (iii) suspend the PBGC Reserve (provided that the PBGC Reserve shall be re-imposed in the amount of $ 3.0 million on January 1, 2027 unless the Company has provided evidence to Axos that the $ 3.0 million installment due to the PBGC on or prior to September 15, 2026 has been paid); (iv) modify the covenants relating to deposit account control agreements and institutions to allow for certain holdings in foreign currencies; and (v) release B. Riley as a specified guarantor thereunder. Applied Digital Agreement Effective February 26, 2026, we entered into the Definitive Agreement with Base Electron, an IPP backed by Applied Digital, to complete the design and installation of four 300 -megawatt natural gas-fired power plants. The total consideration in exchange for completion of this project is up to $ 2.4 billion, of which $ 2.0 billion is variable and the remaining is fixed. The variable fee is based on time and materials expended and subject to change orders agreed upon by Base Electron and the Company. As a result of the signing of the Definitive Agreement, the warrant to purchase up to 7.86 million shares of our common stock is fully vested on the same terms as the Initial Warrant. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None