What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-08-03 compared with 2026-05-05 · 171 added, 64 removed, 137 unchanged (63% of the section changed)

ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The discussion and analysis below described material changes in financial condition and results of operations as reflected in our condensed consolidated financial statements for the three months ended March 31, 2026 and 2025.

The discussion and analysis below describes material changes in financial condition and results of operations as reflected in our condensed consolidated financial statements for the three and six months ended June 30, 2026 and 2025.

This discussion and analysis should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our 2025 Form 10-K.

13 unchanged sentences

The Company used the net proceeds from the Sale and Leaseback Transaction to prepay a portion of its existing term loan facility, thereby reducing the Company’s leverage profile.

On June 18, 2026, the Company disclosed that it entered into a Capital on Demand™ Sales Agreement (the “Sales Agreement”) with JonesTrading Institutional Services LLC (“Sales Agent”), as sales agent, pursuant to which the Company may offer and sell, from time to time, through or to the Sales Agent, as agent or principal, shares of the Company’s Common Stock, par value $0.01 per share (“Common Stock”), having an aggregate offering price of up to $25,000,000 (the “ATM Program”).

As of June 30, 2026, the Company had sold 2.6 million shares of Common Stock in the ATM Program, generating net cash proceeds of approximately $11.6 million.

As required by the Company’s secured term loan facility, all such net proceeds were used by the Company to pay down outstanding indebtedness and associated prepayment premium under such facility.

We are navigating through several challenging external factors which create uncertainty and volatility in our end markets, including, but not limited to, geopolitical dynamics, new and changing tariff actions and responses, tax regulation and fluctuating foreign exchange rates.

10 unchanged sentences

Consolidated Results of Operations

Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025

The table below sets forth certain consolidated operating data for the three months ended March 31 (dollars are in thousands):

Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025

The table below sets forth certain consolidated operating data for the three months ended June 30 (dollars are in thousands):

2026 2025 $ Change % Change

2 unchanged sentences

Selling, general and administrative expenses 23,171 18,732 4,439 23.7

Gain on sale of assets (13,957) — (13,957) NM 1

Other (income) expense 886 (72) 958 NM 1

Other (income) expense 893 427 466 109.1

Warrant expense 3,443 — 3,443 NM 1

Loss on extinguishment of debt 1,958 — 1,958 NM 1

Loss on extinguishment of debt 1,029 460 569 123.7

Interest expense 2,947 2,291 656 28.6

5 unchanged sentences

• a $21.9 million , or 15.7% , increase in OEM and other sales;

• a $0.4 million, or 1.1%, decrease in aftermarket and OES sales.

The increase in revenues of 1.0% is primarily driven by 14% growth in our Global Electrical Systems segment, offset by softer customer demand in the Global Seats and Trim Systems & Components segments particularly in the North America heavy truck market.

• a $1.4 million , or 4.3% , increase in aftermarket and OES sales.

The increase in r evenues of 13.5% is primarily driven by increased customer demand in international markets and the ramp of previously awarded new business wins across all three of our segments.

Gross Profit .

1 unchanged sentence

The $5.2 million increase in gross profit is primarily attributable to the impact of increased sales volumes and operational efficiency improvements.

Cost of revenues decreased $0.3 million, or 0.2%, as a result of a decrease in raw material and purchased component costs of $0.7 million, or 0.8%, and a increase in labor and overhead expenses of $0.4 million, or 0.7%.

As a percentage of revenues, gross profit margin was 11.6% for the three months ended March 31, 2026 compared to 10.5% for the three months ended March 31, 2025.

The three months ended March 31, 2026 results include charges of $1.2 million associated with restructuring programs, compared to $0.5 million for the three months ended March 31, 2025.

Cost of revenues increased $18.1 million, or 11.9%, as a result of a increase in raw material and purchased component costs of $13.2 million, or 14.6%, and a increase in labor and overhead expenses of $4.9 million, or 7.9%.

As a percentage of revenues, gross profit margin was 12.7% for the three months ended June 30, 2026 compared to 11.4% for the three months ended June 30, 2025.

The three months ended June 30, 2026 results include charges of $0.5 million associated with restructuring programs, compared to $1.1 million for the three months ended June 30, 2025.

Selling, General and Administrative Expenses .

Selling, general and administrative ("SG&A") expenses consist primarily of wages and benefits and other expenses such as marketing, travel, legal, audit, rent and utilities costs, which are not directly or indirectly associated with the manufacturing of our products.

SG&A expenses increased $2.7 million compared to the three months ended March 31, 2025, primarily as a result of increased incentive compensation expense.

As a percentage of revenues, SG&A expense was 11.1% and 9.6% for the three months ended March 31, 2026 and 2025, respectively.

Gain on sale of assets .

During the three months ended March 31, 2026, the Company recognized a gain of $13.7 million related to the Sale and Leaseback Transaction.

SG&A expenses increased $4.4 million compared to the three months ended June 30, 2025, primarily as a result of increased incentive compensation expense and advisory service fees.

As a percentage of revenues, SG&A expense was 11.9% and 10.9% for the three months ended June 30, 2026 and 2025, respectively.

Other (Income) Expense .

Other expense increased $1.0 million in the three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily related to unfavorable change in foreign currency.

Other expense increased $0.5 million in the three months ended June 30, 2026 compared to the three months ended June 30, 2025, primarily related to unfavorable change in foreign currency.

Warrant expense.

Change in fair value of warrant liabilities represents the mark-to-market fair value adjustments to the outstanding warrants issued in connection with entering into the Term Loan due 203 0.

The change in fair value of the outstanding warrants liability during three months ended March 31, 2026 was 5.0 million.

The change in fair value of stock warrants was the result of changes in market prices and other observable inputs deriving the value of the financial instruments.

The change in fair value of the outstanding warrants liability during three months ended June 30, 2026 was $3.4 million.

The cha nge in fair value of stock warrants was the result of changes in market prices and other observable inputs deriving the value of the financial instruments.

Loss on extinguishment of debt .

The loss recognized from the extinguishment of debt includes a non-cash expense of $0.9 million for the write-off of deferred financing costs, as well as a prepayment premium and make-whole interest totaling $1.0 million, both of which are associated with the repayment of the Term Loan following the Sale and Leaseback transaction.

The loss recognized from the extinguishment of debt includes a non-cash expense of $0.5 million for the write-off of deferred financing costs, as well as a prepayment premium and make-whole interest of $0.5 million , both of which are associated with the repayment of the Term Loan.

The prior year loss on extinguishment of debt reflects the write-off of deferred financing fees related to early repayment of the prior revolver $0.5 million.

Interest Expense .

Interest associated with our debt increased $1.6 million in the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

Interest associated with our debt incr eased $0.7 million in the three months ended June 30, 2026 compared to the three months ended June 30, 2025.

The increase in interest expense was primarily attributed to higher interest rates from our refinancing completed during the second quarter of 2025.

Provision for Income Taxes.

Income tax expense of $1.9 million and $2.1 million were recorded for the three months ended March 31, 2026 and 2025, respectively.

The primary driver in the tax expense was the Company's mix of profitable foreign operations and losses in the US while maintaining its full valuation allowance position on U.S.

Income tax expense of $2.0 million and $1.7 million were recorded for the three months ended June 30, 2026 and 2025, respectively.

The primary driver in the tax expense was the Company's mix of profitable foreign operations and losses in the U.S.

while maintaining its full valuation allowance position on U.S.

deferred tax assets.

Net Income (Loss) from continuing operations.

Net income from continuing operations was $0.9 million for the three months ended March 31, 2026 compared to net loss of $3.1 million for the three months ended March 31, 2025.

The increase in net income is attributable to the factors noted above.

Net loss from continuing operations was $8.7 million for the three months ended June 30, 2026 compared to net loss of $4.1 million for the three months ended June 30, 2025.

The change in net income was attributable to the factors noted above.

Segment Results

Global Seating Segment Results

Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025

The table below sets forth certain Global Seating Segment operating data for the three months ended March 31 (dollars are in thousands):

Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025

The table below sets forth certain Global Seating Segment operating data for the three months ended June 30 (dollars are in thousands):

2026 2025 $ Change % Change

2 unchanged sentences

Selling, general & administrative expenses 8,155 7,219 936 13.0

Gain on sale of assets (13,716) — (13,716) NM 1

Operating income 2,978 2,711 267 9.8

Not meaningful

The increase in Global Seating Segment revenues of $5.6 million primarily resulted from higher international volumes, offset by decreased customer demand in North America.

1 unchanged sentence

The increase in 2026 gross profit of $1.2 million was primarily due to the impact of increased sales volumes and operational efficiency improvements.

The decrease in cost of revenues was driven by a decrease in raw material and purchased component costs of $0.9 million, or 2.4%, and a increase in labor and overhead expenses of $0.7 million, or 2.8%.

As a percentage of revenues, gross profit margin was 14.0% for the three months ended March 31, 2026 compared to 12.4% for the three months ended March 31, 2025.

The three months ended March 31, 2026 results include charges of $0.5 million associated with restructuring programs, compared to zero for the three months ended March 31, 2025.

The increase in cost of revenues was driven by a increase in raw material and purchased component costs of $3.1 million, or 7.8%, and a increase in labor and overhead expenses of $1.4 million, or 5.5%.

As a percentage of revenues, gross profit margin was 13.9% for the three months ended June 30, 2026 compared to 13.3% for the three months ended June 30, 2025.

The three months ended June 30, 2026 results include charges of $0.7 million associated with restructuring programs, compared to $0.4 million for the three months ended June 30, 2025.

Selling, General and Administrative Expenses .

SG&A expenses increased $1.0 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily as a result of increased incentive compensation expense.

Gain on sale of assets .

During the three months ended March 31, 2025, the Company recognized a gain of $13.7 million related to the Sale and Leaseback Transaction.

SG&A expenses increased $0.9 million for the three months ended June 30, 2026 compared to the three months ended June 30, 2025, primarily as a result of increased incentive compensation expense.

Global Electrical Systems Segment Results

Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025

The table below sets forth certain Global Electrical Systems Segment operating data for the three months ended March 31 (dollars are in thousands):

Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025

The table below sets forth certain Global Electrical Systems Segment operating data for the three months ended June 30 (dollars are in thousands):

2026 2025 $ Change % Change

5 unchanged sentences

Gross Profit.

The increase in gross profit of $1.8 million was primarily attributable to volume and mix.

The increase in gross profit of $1.0 million was primarily attributable to volume and product mix.

The increase in cost of revenues was driven by an increase in raw material and purchased component costs of $4.6 million, or 18.1%, and an increase in labor and overhead expenses of $2.8 million, or 12.7%.

As a percentage of revenues, gross profit margin was 10.0% for the three months ended March 31, 2026 compared to 7.9% for the three months ended March 31, 2025.

The increase in gross profit margin was primarily due to mix and improved operational efficiency.

The three months ended March 31, 2026 results include charges of $0.5 million associated with restructuring programs, compared to $0.5 million for the three months ended March 31, 2025.

As a percentage of revenues, gross profit margin was 11.1% for the three months ended June 30, 2026 compared to 11.0% for the three months ended June 30, 2025.

The increase in gross profit margin was primarily due to mix.

The three months ended June 30, 2026 results include no charges associated with restructuring programs, compared to $0.5 million for the three months ended June 30, 2025.

Selling, General and Administrative Expenses .

SG&A expenses increased $1.5 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily as a result of increased incentive compensation expense.

SG&A expenses were flat for the three months ended June 30, 2026 compared to the three months ended June 30, 2025.

Trim Systems and Components Segment Results

Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025

The table below sets forth certain Trim Systems and Components Segment operating data for the three months ended March 31 (dollars are in thousands):

Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025

The table below sets forth certain Trim Systems and Components Segment operating data for the three months ended June 30 (dollars are in thousands):

2026 2025 $ Change % Change

2 unchanged sentences

Selling, general & administrative expenses 4,472 3,583 889 24.8

Operating income (loss) (100) 1,535 (1,635) NM 1

Operating income (loss) 2,223 105 2,118 2,017.1

The increase in the Trim Systems and Components Segment revenues of $9.3 million was primarily driven by higher sales volume as a result of increased customer demand in North America, including improved product mix.

Gross Profit.

The increase in gross profit of $3.0 million was primarily attributable to higher sales volume.

The cost of revenues increased in line with the sales increase of 21.1%, driven by a increase in labor and overhead expenses of $0.9 million, or 5.9%;

and a increase in raw material and purchased component costs of $5.4 million, or 21.8%.

As a percentage of revenues, gross profit margin was 12.6% for the three months ended June 30, 2026 compared to 8.4% for the three months ended June 30, 2025.

The increase in gross profit margin was primarily due to volume leverage.

The three months ended June 30, 2026 results include no charges associated with restructuring programs, compared to $0.2 million for the three months ended June 30, 2025.

Selling, General and Administrative Expenses .

SG&A expenses increased $0.9 million for the three months ended June 30, 2026 compared to the three months ended June 30, 2025, primarily as a result of increased incentive compensation expense.

Consolidated Results of Operations

Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025

The table below sets forth certain consolidated operating data for the six months ended June 30, (dollars are in thousands):

2026 2025 $ Change % Change

Revenues $ 366,733 $ 341,751 $ 24,982 7.3%

Gross profit 44,543 37,322 7,221 19.3

Selling, general and administrative expenses 42,230 35,117 7,113 20.3

Gain on sale of assets (13,957) — (13,957) NM 1

Other (income) expense 1,782 355 1,427 402.0

Warrant expense 8,420 — 8,420 NM 1

Loss on extinguishment of debt 2,987 460 2,527 549.3

Interest expense 7,041 4,794 2,247 46.9

Provision (benefit) for income taxes 3,880 3,841 39 1.0

Net income (loss) from continuing operations

(7,840) (7,245) (595) 8.2

Not meaningful

The decrease in the Trim Systems and Components Segment revenues of $6.4 million was primarily driven by lower sales volume as a result of softening customer demand in North America.

The increase in consolidated revenues resulted from:

• a $24.0 million , or 8.6% , increase in OEM and other revenues;

• a $1.0 million , or 1.6% , increase in aftermarket and OES sales.

T he increase in revenues of $25.0 million was primarily driven by an increase in customer demand across all segments.

Gross Profit .

The decrease in gross profit of $1.1 million was primarily attributable to lower sales volume.

The cost of revenues decreased in line with the sales decrease of 13.9%, driven by a decrease in labor and overhead expenses of $1.4 million, or 9.3%;

and a decrease in raw material and purchased component costs of $3.9 million, or 14.8%.

As a percentage of revenues, gross profit margin was 9.1% for the three months ended March 31, 2026 compared to 10.3% for the three months ended March 31, 2025.

The decrease in gross profit margin was primarily due to lower sales volume.

The three months ended March 31, 2026 results include charges of $0.2 million associated with restructuring programs, compared to zero for the three months ended March 31, 2025.

The $7.2 million increase in gross profit is primarily attributable to the impact of increased sales volumes and operational efficiency improvements.

Cost of revenues increased $17.8 million, or 5.8%, as a result of a increase in raw material and purchased component costs of $12.4 million, or 6.9%, and a increase in labor and overhead expenses of $5.4 million, or 4.3%.

As a percentage of revenues, gross profit margin was 12.1% for the six months ended June 30, 2026 compared to 10.9% for the six months ended June 30, 2025.

The six months ended June 30, 2026 results include charges of $1.9 million associated with restructuring programs, compared to $1.6 million for the six months ended June 30, 2025.

Selling, General and Administrative Expenses .

SG&A expenses increased $0.5 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

SG&A expenses increased $7.1 million compared to the six months ended June 30, 2025, primarily as a result of an increase in incentive compensation expense and advisory service fees.

As a percentage of revenues, SG&A expense was 11.5% for the six months ended June 30, 2026 compared to 10.3% for the six months ended June 30, 2025.

The six months ended June 30, 2026 results include charges of $0.3 million associated with the restructuring programs, compared to $0.2 million for the six months ended June 30, 2025.

Gain on sale of assets .

During the six months ended June 30, 2026, the Company recognized a gain of $13.7 million related to the Sale and Leaseback Transaction.

Other (Income) Expense .

Other expense increased $1.4 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily related to unfavorable change in foreign currency..

Warrant expense.

Change in fair value of warrant liabilities represents the mark-to-market fair value adjustments to the outstanding warrants issued in connection with entering into the Term Loan due 203 0.

The change in fair value of the outstanding warrants liability during three months ended June 30, 2026 was $3.4 million.

The cha nge in fair value of stock warrants was the result of changes in market prices and other observable inputs deriving the value of the financial instruments.

Loss on extinguishment of debt.

The loss recognized from the extinguishment of debt includes a non-cash expense of $1.6 million for the write-off of deferred financing costs, as well as a prepayment premium and make-whole interest of $1.4 million , both of which are associated with the repayment of the Term Loan.

The prior year loss on extinguishment of debt reflects the write-off of deferred financing fees related to early repayment of the prior revolver $0.5 million.

Interest Expense .

Interest associated with our debt was $7.0 million and $4.8 million for the six months ended June 30, 2026 and 2025, respectively.

The increase in interest expense was primarily attributed to higher interest rates from our refinancing completed during the second quarter of 2025.

Provision (benefit) for Income Taxes.

Income tax expense of $3.9 million and $3.8 million were recorded for the six months ended June 30, 2026 and 2025, respectively.

The primary driver in the tax expense was the Company's mix of profitable foreign operations and losses in the U.S.

while maintaining its full valuation allowance position on U.S.

deferred tax assets.

Net Income (loss) from continuing operations.

Net loss from continuing operations was $7.8 million for the six months ended June 30, 2026 compared to net loss of $7.2 million for the six months ended June 30, 2025.

The change is attributable to the factors noted above.

Segment Results

Global Seating Segment Results

Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025

The table below sets forth certain Global Seating Segment operating data for the six months ended June 30, (dollars are in thousands):

2026 2025 $ Change % Change

Revenues $ 154,519 $ 147,866 $ 6,653 4.5%

Gross profit 21,565 19,023 2,542 13.4

Selling, general & administrative expenses 15,521 13,608 1,913 14.1

Gain on sale of assets (13,716) — (13,716) NM 1

Operating income 19,760 5,415 14,345 264.9

Not meaningful

The increase in Global Seating Segment revenues of $6.7 million was primarily driven by higher international volume, offset by customer demand in North America.

Gross Profit.

The increase in gross profit of $2.5 million was primarily attributable to increased sales volumes and operational efficiency improvements.

The increase in cost of revenues was driven by a increase in raw material and purchased component costs of $2.2 million, or 2.7%, and a increase in labor and overhead expenses of $2.0 million, or 4.0%.

As a percentage of revenues, gross profit margin was 14.0% for the six months ended June 30, 2026 compared to 12.9% for the six months ended June 30, 2025.

The six months ended June 30, 2026 results include charges of $1.3 million associated with restructuring programs, compared to $0.4 million for the six months ended June 30, 2025.

Selling, General and Administrative Expenses .

SG&A expenses increased $1.9 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily as a result of increased incentive compensation expense.

Gain on sale of assets .

During the six months ended June 30, 2026, the Company recognized a gain of $13.7 million related to the Sale and Leaseback Transaction.

Global Electrical Systems Segment Results

Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025

The table below sets forth certain Global Electrical Systems Segment operating data for the six months ended June 30, (dollars are in thousands):

2026 2025 $ Change % Change

Revenues $ 119,478 $ 104,037 $ 15,441 14.8%

Gross profit 12,669 9,900 2,769 28.0

Selling, general & administrative expenses 10,996 9,511 1,485 15.6

Operating income (loss) 1,673 389 1,284 330.1

The increase in Global Electrical Systems Segment revenues of $15.4 million was primarily driven by new business wins.

Gross Profit.

The increase in gross profit of $2.8 million is primarily attributable to volume and product mix.

The increase in cost of revenues was driven by a increase in raw material and purchased component costs of $8.7 million, or 17.6%;

and a increase in labor and overhead expenses of $3.9 million, or 8.8%.

As a percentage of revenues, gross profit margin was 10.6% for the six months ended June 30, 2026 compared to 9.5% for the six months ended June 30, 2025, driven by mix and volume leverage.

The six months ended June 30, 2026 results include charges of $0.5 million associated with restructuring programs, compared to $1.0 million for the six months ended June 30, 2025.

Selling, General and Administrative Expenses .

SG&A expenses increased $1.5 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily as a result of increased incentive compensation expense.

Trim Systems and Components Segment Results

Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025

The table below sets forth certain Trim Systems and Components Segment operating data for the six months ended June 30, (dollars are in thousands):

2026 2025 $ Change % Change

Revenues $ 92,736 $ 89,848 $ 2,888 3.2%

Gross profit 10,309 8,399 1,910 22.7

Selling, general & administrative expenses 8,186 6,761 1,425 21.1

Operating income (loss) 2,123 1,638 485 29.6

The increase in Trim Systems and Components Segment revenues of $2.9 million was primarily driven by increased customer demand in North America.

Gross Profit.

The increase in gross profit of $1.9 million is primarily attributable to higher sales volume.

The increase in cost of revenues was driven by a increase in raw material and purchased component costs of $1.5 million, or 2.9%, and a decrease in labor and overhead expenses of $0.5 million, or 1.7%.

As a percentage of revenues, gross profit margin was 11.1% for the six months ended June 30, 2026 compared to 9.3% for the six months ended June 30, 2025.

This was primarily due to volume leverage.

The six months ended June 30, 2026 results include charges of $0.2 million associated with restructuring programs, compared to $0.2 million for the six months ended June 30, 2025.

Selling, General and Administrative Expenses .

SG&A expenses increased $1.4 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily as a result of increased incentive compensation expense.

Liquidity and Capital Resources

Our primary sources of liquidity as of March 31, 2026 were operating income, cash and availability under our credit facility.

Our primary sources of liquidity as of June 30, 2026 were operating income, cash and availability under our credit facility.

We believe that these sources of liquidity will provide adequate funds for our working capital needs, capital expenditures and debt service throughout the next twelve months.

1 unchanged sentence

We also rely on the timely collection of receivables as a source of liquidity.

As of March 31, 2026, we had outstanding letters of credit of $3.5 million and borrowing availability of $99.7 million from our U.S.

As of June 30, 2026, we had outstanding letters of credit of $3.5 million and borrowing availability of $91.2 million from our U.S.

and China credit facilities (subject to customary borrowing base and other conditions), in addition to $36.0 million of cash.

As of March 31, 2026, cash of $28.7 million was held by foreign subsidiaries.

The Company had a $0.2 million d eferred tax liability as of March 31, 2026 for the expected future income tax implications of repatriating cash from the foreign subsidiaries for which indefinite reinvestment is not expected.

As of June 30, 2026, cash of $35.6 million was primarily held by foreign subsidiaries.

The Company had a $0.1 million defer red tax liability as of June 30, 2026 for the expected future income tax implications of repatriating cash from the foreign subsidiaries for which indefinite reinvestment is not expected.

We intend to allocate resources consistent with the following priorities:

11 unchanged sentences

Sources and Uses of Cash

Three Months Ended March 31,

Six Months Ended June 30,

(In thousands)

10 unchanged sentences

Operating activities.

For the three months ended March 31, 2026, net cash used in operating activities was $1.6 million compared to net cash provided by operating activities of $15.2 million for the three months ended March 31, 2025.

Net cash used in operating activities is primarily attributable an increase in trade working capital for the three months ended March 31, 2026 as compared to a decrease in trade working capital for the three months ended March 31, 2025.

For the six months ended June 30, 2026 , net cash provided by operating activities was $0.1 million compared to net cash provided by operating activities of $34.0 million for the six months ended June 30, 2025.

The decrease in net cash provided by operating activities is primarily attributable an increase in trade working capital for the six months ended June 30, 2026 as compared to a decrease in trade working capital for the six months ended June 30, 2025.

Investing activities.

For the three months ended March 31, 2026, net cash provided by investing activities was $13.2 million compared to cash used in investing activities of $3.8 million for the three months ended March 31, 2025.

For the six months ended June 30, 2026, ne t cash provided by investing activities was $10.2 million compared to cash used in investing activities of $5.3 million for the six months ended June 30, 2025.

The change was mainly due to $15.9 million in proceeds from the sale of assets in the current year.

1 unchanged sentence

Financing activities.

For the three months ended March 31, 2026, net cash used in financing activities was $15.7 million compared to net cash used in financing activities of $18.1 million for the three months ended March 31, 2025.

Use of cash in financing activities during the three months ended March 31, 2026 was primarily attributable to the pay down of our debt which totaled $14.9 million, of which $14.6 million was a mandatory paydown from the Sale and Leaseback Transaction .

For the six months ended June 30, 2026, net c ash used in financing activities was $7.1 million compared to net cash used in financing activities of $12.2 million for the six months ended June 30, 2025.

Use of cash in financing activities during the six months ended June 30, 2026 was primarily attributable to the prepayment of term loan debt which totaled $26.2 million, related to mandatory paydowns from the Sale and Leaseback Transaction and at-the-market equity offering proceeds.

Debt and Credit Facilities

The debt and credit facilities descriptions in Note 4, Debt are incorporated in this section by reference.

On June 18, 2026, the Company entered into the Sales Agreement with Sales Agent for the ATM Program which enables the Company to issue and sell shares of Common Stock in transactions that are deemed to be "at the market" offerings as defined in Rule 415 under the Securities Act of 1933, as amended, for a maximum aggregate offering amount of up to $25.0 million.

During the three and six months ended June 30, 2026, we issue and sold 2.6 million shares of our Common Stock under the ATM program for net proceeds (after sales commissions and direct offering expenses) of $11.6 million.

The direct costs of $0.2 million incurred in connection with the ATM program during the quarter ended June 30, 2026 were charged against the proceeds from the sale of Common Stock and reflected as a reduction of paid-in -capital.

As of June 30, 2026, approximately $13.0 million remained available for sale under the ATM Program.

Critical Accounting Policies and Estimates

7 unchanged sentences

Management's Discussion and Analysis of Financial Condition and Results of Operations" in our 2025 Form 10-K.

At March 31, 2026, there have been no material changes to our critical accounting estimates from those disclosed in our 2025 Form 10-K.

At June 30, 2026, there have been no material changes to our critical accounting estimates from those disclosed in our 2025 Form 10-K.

Forward-Looking Statements

9 unchanged sentences

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis