What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2024-08-02 compared with 2024-05-03 · 133 added, 53 removed, 186 unchanged (50% of the section changed)

13 unchanged sentences

Our highly engineered products include capital equipment and consumable products.

FET’s customers include oil and natural gas operators, land and offshore drilling contractors, oilfield service companies, pipeline and refinery operators, and renewable energy and new energy companies.

FET’s customers include oil and natural gas operators, land and offshore drilling contractors, oilfield service companies, pipeline and refinery operators, and renewable and new energy companies.

Consumable products are used by our customers in drilling, well construction and completion activities and at processing centers and refineries.

Our capital products are directed at drilling rig equipment for constructing new or upgrading existing rigs, subsea construction and development projects, pressure pumping equipment, the placement of production equipment on new producing wells, downstream capital projects and capital equipment for renewable energy projects.

For the three months ended March 31, 2024, approximately 80% of our revenue was derived from consumable products and activity-based equipment, while the balance was primarily derived from capital products with a small amount from rental and other services.

For the six months ended June 30, 2024, approximately 80% of our revenue was derived from consumable products and activity-based equipment, while the balance was primarily derived from capital products with a small amount from rental and other services.

We expect that the world’s long-term energy demand will continue to rise for many decades.

2 unchanged sentences

We are continuing to develop products to help oil and gas operators lower expenses, increase production and reduce their emissions while also deploying our technologies in renewable energy applications.

In the first quarter 2024, following the Variperm Acquisition, we aligned our reportable segments with business activity drivers, our customer base, and the manner in which we review and evaluate operating performance.

In the first quarter 2024, following the Variperm Acquisition, we aligned our reportable segments with business activity drivers, our customer base, and the manner in which management reviews and evaluates operating performance.

FET now operates in the following two reportable segments:

23 unchanged sentences

Utilization is a function of equipment capacity and durability in demanding environments.

Compared to fourth quarter 2023, oil and natural gas prices have remained relatively flat despite tightened supply from OPEC+ production cuts and continued geopolitical tensions in Ukraine and the Middle East.

Compared to 2023 full year average prices, oil and natural gas average prices have remained relatively flat despite tightened supply from OPEC+ production cuts and continued geopolitical tensions in Ukraine and the Middle East.

These tensions could lead to a disruption to world energy markets and international supply chains.

1 unchanged sentence

We expect that hydrocarbons will continue to play a vital role in meeting the world’s long-term energy needs while renewable energy sources become increasingly prominent.

The price of oil has varied dramatically over the last several years.

Average West Texas Intermediate (“WTI”) and United Kingdom Brent (“Brent”) oil prices were slightly higher in the first quarter 2024 compared to the first quarter 2023.

In addition, average natural gas prices were 18.6% lower in the first quarter 2024 compared to the first quarter 2023.

Our revenues, over the long-term, are highly correlated to the global drilling rig count, which decreased 5.3% during the first quarter 2024 compared to average global rig count during first quarter 2023.

The decrease was driven by decline in North America rig count of 15.3%, offset by growth in international rig count of 5.5% compared to first quarter 2023.

Average West Texas Intermediate (“WTI”) and Brent oil prices were higher in the second quarter 2024 compared to the second quarter 2023.

In addition, average natural gas prices were lower in the second quarter 2024 compared to the second quarter 2023.

Our revenues, over the long-term, are highly correlated to the global drilling rig count, which decreased 5.3% during the second quarter 2024 compared to average global rig count during second quarter 2023.

The decrease was mainly driven by a decline in North America rig count of 11.6%.

International markets are expected to continue to outpace the U.S.

2 unchanged sentences

Three Months Ended

March 31, December 31, March 31,

June 30, March 31, June 30,

2024 2024 2023

1 unchanged sentence

West Texas Intermediate $ 82.79 $ 77.50 $ 73.54

United Kingdom Brent $ 82.92 $ 84.01 $ 81.07

Brent $ 84.68 $ 82.92 $ 77.99

Average North American Natural Gas, $/Mcf

2 unchanged sentences

Three Months Ended

March 31, December 31, March 31,

June 30, March 31, June 30,

2024 2024 2023

18 unchanged sentences

The table below shows the amount of total inbound orders by segment:

Three Months Ended

March 31, December 31, March 31,

Three Months Ended Six Months Ended

June 30, March 31, June 30, June 30, June 30,

(in millions of dollars) 2024 2024 2023 2024 2023

3 unchanged sentences

Results of operations

Three months ended March 31, 2024 compared with three months ended March 31, 2023

Three Months Ended March 31, Change

Three months ended June 30, 2024 compared with three months ended June 30, 2023

Three Months Ended June 30, Change

(in thousands of dollars, except per share information) 2024 2023 $ %

12 unchanged sentences

Transaction expenses 1,228 — 1,228 *

Gain on disposal of assets and other (28) (260) 232 *

Loss on disposal of assets and other 220 542 (322) *

Operating income 7,934 6,407 1,527 23.8 %

1 unchanged sentence

Foreign exchange losses and other, net 3,006 6,436 (3,430) *

Loss on extinguishment of debt 463 — 463 *

Total other expense 12,128 11,125 1,003 9.0 %

9 unchanged sentences

* not meaningful

Our revenue for the three months ended March 31, 2024 was $202.4 million, an increase of $13.4 million, or 7.1%, compared to the three months ended March 31, 2023.

For the three months ended March 31, 2024, our Drilling and Completions and Artificial Lift and Downhole segments comprised 58.8% and 41.2% of our total revenue, respectively, which compared to 67.1% and 32.9% of our total revenue, respectively, for the three months ended March 31, 2023.

The overall increase in revenue is primarily related to the revenue contributed from the acquired Variperm business, partially offset by the decline in overall global drilling and completions activities in 2024 compared to 2023.

Our revenue for the three months ended June 30, 2024 was $205.2 million, an increase of $19.8 million, or 10.7%, compared to the three months ended June 30, 2023.

For the three months ended June 30, 2024, our Drilling and Completions and our Artificial Lift and Downhole segments comprised 57.0% and 43.0% of our total revenue, respectively, compared to 70.3% and 29.7% of our total revenue, respectively, for the three months ended June 30, 2023.

The overall increase in revenue is primarily related to the revenue contributed from the acquired Variperm business, partially offset by the decline in U.S.

drilling and completions activity in the second quarter 2024 compared to the second quarter 2023.

The changes in revenue by operating segment consisted of the following:

Drilling and Completions segment — Revenue was $119.1 million for the three months ended March 31, 2024, a decrease of $7.7 million, or 6.1%, compared to the three months ended March 31, 2023.

Due to the decline in overall global drilling and completions activities, the decrease in revenue was led by an $8.8 million, or 18.5%, decrease in the Stimulation & Intervention product line, a $4.1 million, or 15.7%, decrease in the Coiled Tubing product line, and a $3.8 million, or 9.5%, decrease in the Drilling product line.

Drilling and Completions segment — Revenue was $117.0 million for the three months ended June 30, 2024, a decrease of $13.3 million, or 10.2%, compared to the three months ended June 30, 2023.

This decrease was driven by a $9.4 million, or 20.9%, decrease in our Drilling product line and a $9.2 million, or 19.8%, decrease in our Stimulation & Intervention product line, primarily due to the decline in U.S.

drilling and completions activity.

Partially offsetting this reduction was an increase of $3.5 million, or 25.9%, in our Subsea product line from higher project revenue recognized from ROVs and an increase of $1.8 million, or 7.0%, in our Coiled Tubing product line from higher international activity.

Artificial Lift and Downhole segment — Revenue was $88.2 million for the three months ended June 30, 2024, an increase of $33.1 million, or 60.0%, compared to the three months ended June 30, 2023.

Revenue for our Downhole product line increased by $31.0 million, or 140.5%, primarily due to revenue contributed from the acquired Variperm business and an increase in casing equipment sales from increased international activity.

Additionally, revenue in our Valve Solutions product line increased $1.7 million, or 10.8%, from higher international activity.

Segment operating income (loss) and segment operating margin percentage

Segment operating income for the three months ended June 30, 2024 was $9.4 million, a $2.4 million increase compared to an income of $6.9 million for the three months ended June 30, 2023.

For the three months ended June 30, 2024, segment operating margin percentage was 4.6% compared to 3.7% for the three months ended June 30, 2023.

Segment operating margin percentage is calculated by dividing segment operating income (loss) by revenue for the period.

The change in operating income (loss) for each segment is explained as follows:

Drilling and Completions segment — Segment operating income was $2.9 million, or 2.5%, for the three months ended June 30, 2024 compared to operating income of $6.6 million, or 5.1%, for the three months ended June 30, 2023.

The $3.8 million decrease in segment operating results is primarily attributable to decreased operating leverage on lower sales volumes of capital equipment and well stimulation products, partially offset by higher coiled tubing sales and higher project revenue in our Subsea product line.

Artificial Lift and Downhole segment — Segment operating income was $13.5 million, or 15.3%, for the three months ended June 30, 2024 compared to an income of $7.0 million, or 12.6%, for the three months ended June 30, 2023.

The $6.5 million increase was primarily driven by the acquisition of Variperm.

Corporate — Selling, general and administrative expenses for Corporate were $7.0 million for the three months ended June 30, 2024 compared to $6.6 million for the three months ended June 30, 2023.

Corporate costs include, among other items, payroll related costs for management, administration, finance, legal, and human resources personnel;

professional fees for legal, accounting and related services;

and marketing costs.

Other items not included in segment operating income (loss)

Transaction expenses, gain (loss) on the disposal of assets and other are not included in segment operating income, but are included in total operating income.

Other income and expense

Other income and expense includes interest expense, foreign exchange gains (losses) and other, and loss on extinguishment of debt.

We incurred $8.7 million of interest expense during the three months ended June 30, 2024, an increase of $4.0 million compared to the three months ended June 30, 2023, due to the increased borrowings under our revolving Credit Facility and borrowings under the Seller Term Loan entered into in connection with the Variperm Acquisition.

See Note 7 Debt for further details related to the Credit Facility and Seller Term Loan.

The foreign exchange gains (losses) are primarily the result of movements in the British pound, Euro and Canadian dollar relative to the U.S.

These movements in exchange rates create foreign exchange gains or losses when applied to monetary assets or liabilities denominated in currencies other than the location’s functional currency, primarily U.S.

dollar denominated cash, trade account receivables and net intercompany receivable balances for our entities using a functional currency other than the U.S.

During the three months ended June 30, 2024, we repurchased an aggregate $13.0 million of principal amount of our 9.00% convertible secured notes due August 2025 (“2025 Notes”) at approximately par value.

The net carrying value of the extinguished debt, including unamortized debt discount and debt issuance costs, was $12.5 million, resulting in a $0.5 million loss on extinguishment of debt.

We recorded tax expense of $2.5 million and $1.9 million for the three months ended June 30, 2024 and 2023, respectively.

The estimated annual effective tax rates for the three months ended June 30, 2024 and 2023 were impacted by losses in jurisdictions where the recording of a tax benefit is not available.

Furthermore, the tax expense or benefit recorded can vary from period to period depending on the Company’s relative mix of earnings and losses by jurisdiction.

Results of operations

Six months ended June 30, 2024 compared with six months ended June 30, 2023

Six Months Ended June 30, Change

(in thousands of dollars, except per share information) 2024 2023 $ %

Drilling and Completions $ 236,096 $ 257,106 $ (21,010) (8.2) %

Artificial Lift and Downhole 171,511 117,324 54,187 46.2 %

Eliminations (6) (24) 18 *

Total revenue 407,601 374,406 33,195 8.9 %

Segment operating income

Drilling and Completions 7,434 11,615 (4,181) (36.0) %

Operating margin % 3.1 % 4.5 %

Artificial Lift and Downhole 25,247 15,602 9,645 61.8 %

Operating margin % 14.7 % 13.3 %

Corporate (14,206) (13,677) (529) (3.9) %

Total segment operating income 18,475 13,540 4,935 36.4 %

Operating margin % 4.5 % 3.6 %

Transaction expenses 7,149 — 7,149 *

Loss on disposal of assets and other 192 282 (90) *

Operating income 11,134 13,258 (2,124) (16.0) %

Interest expense 17,419 9,238 8,181 88.6 %

Foreign exchange losses and other, net 4,233 9,408 (5,175) *

Loss on extinguishment of debt 463 — 463 *

Total other expense 22,115 18,646 3,469 18.6 %

Loss before income taxes (10,981) (5,388) (5,593) (103.8) %

Income tax expense 6,030 4,677 1,353 28.9 %

Net loss $ (17,011) $ (10,065) $ (6,946) (69.0) %

Weighted average shares outstanding

Basic 12,266 10,195

Diluted 12,266 10,195

Loss per share

Basic $ (1.39) $ (0.99)

Diluted $ (1.39) $ (0.99)

* not meaningful

Our revenue for the six months ended June 30, 2024 was $407.6 million, an increase of $33.2 million, or 8.9%, compared to the six months ended June 30, 2023.

For the six months ended June 30, 2024, our Drilling and Completions and our Artificial Lift and Downhole segments comprised 57.9% and 42.1% of our total revenue, respectively, compared to 68.7% and 31.3% of our total revenue, respectively, for the six months ended June 30, 2023.

The overall increase in revenue is primarily related to the revenue contributed from the acquired Variperm business, partially offset by the decline in U.S.

drilling and completions activity in 2024 compared to 2023.

The changes in revenue by operating segment consisted of the following:

Drilling and Completions segment — Revenue was $236.1 million for the six months ended June 30, 2024, a decrease of $21.0 million, or 8.2%, compared to the six months ended June 30, 2023.

The decrease in segment revenue included a $17.9 million, or 19.1%, decrease from the Stimulation & Intervention product line, a $13.2 million, or 15.5%, decrease from the Drilling product line, and a $2.3 million, or 4.5%, decrease from the Coiled Tubing product line, all primarily the result of declining U.S.

drilling and completions activity.

The decrease was partially offset by an increase of $12.5 million, or 47.8%, in our Subsea product line due to higher project revenue recognized from ROVs and cable management systems.

Artificial Lift and Downhole segment — Revenue was $83.3 million for the three months ended March 31, 2024, an increase of $21.1 million, or 34.0%, compared to the three months ended March 31, 2023.

Revenue for our Downhole product line increased by $29.0 million, or 125.1%, primarily due to revenue contributed from the acquired Variperm business and an increase in casing equipment sales.

This increase was partially offset by an $6.5 million, or 33.9% decrease, in sales of our valve products, and $1.4 million, or 7.1%, decrease in sales within our Production Equipment product line.

Artificial Lift and Downhole segment — Revenue was $171.5 million for the six months ended June 30, 2024, an increase of $54.2 million, or 46.2%, compared to the six months ended June 30, 2023.

Revenue for our Downhole product line increased by $60.0 million, or 132.6%, primarily due to revenue contributed from the acquired Variperm business and an increase in casing equipment sales from increased international activity.

This increase was partially offset by a $4.8 million, or 14.0% decrease, in sales of our valve products, and $1.0 million, or 2.7%, decrease in sales within our Production Equipment product line.

Segment operating income (loss) and segment operating margin percentage

Segment operating income for the three months ended March 31, 2024 was $9.1 million, a $2.5 million increase compared to $6.6 million for the three months ended March 31, 2023.

For the three months ended March 31, 2024, segment operating margin percentage was 4.5% compared to 3.5% for the three months ended March 31, 2023.

Segment operating income for the six months ended June 30, 2024 was $18.5 million, a $4.9 million increase compared to $13.5 million for the six months ended June 30, 2023.

For the six months ended June 30, 2024, segment operating margin percentage was 4.5% compared to 3.6% for the six months ended June 30, 2023.

Segment operating margin percentage is calculated by dividing segment operating income by revenue for the period.

The change in operating income for each segment is explained as follows:

Drilling and Completions segment — Segment operating income was $4.6 million, or 3.8%, for the three months ended March 31, 2024 compared to $5.0 million, or 3.9%, for the three months ended March 31, 2023.

The $0.4 million decrease in segment operating results is primarily attributable to lower demand for capital equipment that was nearly offset by higher project revenue in Subsea product line.

Artificial Lift and Downhole segment — Segment operating income was $11.8 million, or 14.1%, for the three months ended March 31, 2024 compared to $8.6 million, or 13.9%, for the three months ended March 31, 2023.

The $3.2 million increase in segment operating results was primarily driven by the acquisition of Variperm and an increase in project revenue recognized from process oil treatment equipment, partially offset by the decline in sales of our valve products.

Corporate — Selling, general and administrative expenses for Corporate were $7.3 million for the three months ended March 31, 2024 compared to $7.0 million for the three months ended March 31, 2023.

Drilling and Completions segment — Segment operating income was $7.4 million, or 3.1%, for the six months ended June 30, 2024 compared to $11.6 million, or 4.5%, for the six months ended June 30, 2023.

The $4.2 million decrease in segment operating results is primarily attributable to decreased operating leverage from lower sales volumes for capital equipment that was partially offset by higher project revenue in Subsea product line and lower freight costs.

Artificial Lift and Downhole segment — Segment operating income was $25.2 million, or 14.7%, for the six months ended June 30, 2024 compared to $15.6 million, or 13.3%, for the six months ended June 30, 2023.

The $9.6 million increase in segment operating results was primarily driven by the acquisition of Variperm.

Corporate — Selling, general and administrative expenses for Corporate were $14.2 million for the six months ended June 30, 2024 compared to $13.7 million for the six months ended June 30, 2023.

Corporate costs include, among other items, payroll related costs for management, administration, finance, legal, and human resources personnel;

4 unchanged sentences

Other income and expense

Other income and expense includes interest expense and foreign exchange gains (losses) and other.

We incurred $8.8 million of interest expense during the three months ended March 31, 2024, an increase of $4.2 million compared to the three months ended March 31, 2023, due to the increased borrowings under our revolving Credit Facility and borrowings under the Seller Term Loan entered into in connection with the Variperm Acquisition.

Other income and expense includes interest expense, foreign exchange gains (losses) and other, and loss on extinguishment of debt.

We incurred $17.4 million of interest expense during the six months ended June 30, 2024, an increase of $8.2 million compared to the six months ended June 30, 2023, due to the increased borrowings under our revolving Credit Facility and borrowings under the Seller Term Loan entered into in connection with the Variperm Acquisition.

See Note 7 Debt for further details related to the Credit Facility and Seller Term Loan.

2 unchanged sentences

dollar denominated cash, trade account receivables and net intercompany receivable balances for our entities using a functional currency other than the U.S.

We recorded tax expense of $3.5 million and $2.8 million for the three months ended March 31, 2024 and 2023, respectively.

The estimated annual effective tax rates for the three months ended March 31, 2024 and 2023 were impacted by losses in jurisdictions where the recording of a tax benefit is not available.

During the six months ended June 30, 2024, we repurchased an aggregate $13.0 million of principal amount of our 2025 Notes at approximately par value.

The net carrying value of the extinguished debt, including unamortized debt discount and debt issuance costs, was $12.5 million, resulting in a $0.5 million loss on extinguishment of debt.

We recorded tax expense of $6.0 million and $4.7 million for the six months ended June 30, 2024 and 2023, respectively.

The estimated annual effective tax rates for the six months ended June 30, 2024 and 2023 were impacted by losses in jurisdictions where the recording of a tax benefit is not available.

Furthermore, the tax expense or benefit recorded can vary from period to period depending on the Company’s relative mix of earnings and losses by jurisdiction.

5 unchanged sentences

Our future success and growth will be highly dependent on our ability to generate positive operating cash flow and access outside sources of capital.

As of March 31, 2024, we had $134.2 million principal amount of 2025 Notes outstanding, $96.5 million of borrowings under our revolving Credit Facility and $59.7 million principal amount of the Seller Term Loan outstanding.

The 2025 Notes mature in August 2025 and, subject to certain exceptions, the Credit Facility matures in September 2028 a nd the Seller Term Loan matures in December 2026.

As of June 30, 2024, we had $121.2 million principal amount of 2025 Notes outstanding, $72.8 million of borrowings under our revolving Credit Facility and $59.7 million principal amount of the Seller Term Loan outstanding.

During the six months ended June 30, 2024, we repurchased an aggregate $13.0 million of principal amount of our 2025 Notes.

Subsequent to June 30, 2024, we issued a notice of redemption for $60.0 million aggregate principal amount of our 2025 Notes with a redemption date of August 16, 2024.

The 2025 Notes mature in August 2025.

The Credit Facility matures on the earliest of (a) September 8, 2028, (b) the date that is 91 days prior to the maturity of 2025 Senior Notes (which will not apply if the 2025 Senior Notes are repaid prior to to such 91st day) and (c) the date that is 91 days prior to the maturity of the Seller Term Loan if the outstanding aggregate principal amount thereunder is equal to or greater than $30 million.

The Seller Term Loan matures in December 2026.

See Note 7 Debt for further details related to the terms for our debt arrangements.

As of March 31, 2024, we had cash and cash equivalents of $48.5 million and $71.6 million of availability under the Credit Facility.

As of June 30, 2024, we had cash and cash equivalents of $31.8 million and $103.1 million of availability under the Credit Facility.

We anticipate that our future working capital requirements for our operations will fluctuate directionally with revenues.

5 unchanged sentences

Shares may be repurchased under the program from time to time, in amounts and at prices that the company deems appropriate, subject to market and business conditions, applicable legal requirements and other considerations.

During the three months ended March 31, 2024 , we did not repurchase shares of our common stock and the remaining authorization under this program is $2.4 million.

During the six months ended June 30, 2024 , we did not repurchase shares of our common stock and the remaining authorization under this program is $2.4 million.

In January 2024, we completed the Variperm Acquisition for consideration of approximately $150.0 million of cash (subject to customary purchase price adjustments) and 2.0 million shares of our common stock.

We may pursue additional acquisitions in the future, which may be funded with cash and/or equity.

Our cash flows for the three months ended March 31, 2024 and 2023 are presented below (in millions):

Three Months Ended March 31,

Our cash flows for the six months ended June 30, 2024 and 2023 are presented below (in millions):

Six Months Ended June 30,

Net cash provided by (used in) operating activities $ 28.1 $ (29.5)

2 unchanged sentences

Effect of exchange rate changes on cash (2.8) 0.8

Net increase (decrease) in cash, cash equivalents and restricted cash $ 2.3 $ (4.3)

Net decrease in cash, cash equivalents and restricted cash $ (14.3) $ (26.3)

Net cash provided by (used in) operating activities

Net cash provided by operating activities was $5.0 million for the three months ended March 31, 2024 compared to net cash used in operating activities of $23.1 million for the three months ended March 31, 2023.

This improvement in operating cash flow usage is primarily attributable to an increase in cash provided from working capital, mainly accounts receivable and inventories.

It was offset by an increase in cash used for accounts payable and accrued liabilities of $24.1 million for the three months ended March 31, 2024 compared to $5.5 million for the three months ended March 31, 2023.

Net cash provided by operating activities was $28.1 million for the six months ended June 30, 2024 compared to net cash used in operating activities of $29.5 million for the six months ended June 30, 2023.

This improvement in operating cash flow usage is primarily attributable to changes in working capital which provided cash of $10.7 million for the six months ended June 30, 2024 compared to a use of cash of $43.8 million for the six months ended June 30, 2023.

Net cash used in investing activities

Net cash used in investing activities was $152.8 million for the three months ended March 31, 2024, mainly related to Variperm Acquisition of $150.1 million and $2.9 million of capital expenditures, partially offset by $0.2 million of proceeds from the sale of property and equipment.

Net cash used in investing activities was $0.8 million for the three months ended March 31, 2023, including $1.1 million of capital expenditures, partially offset by $0.3 million of proceeds from the sale of property and equipment.

Net cash used in investing activities was $154.5 million for the six months ended June 30, 2024, mainly related to Variperm Acquisition of $150.1 million and $4.4 million of capital expenditures.

Net cash used in investing activities was $1.7 million for the six months ended June 30, 2023, including $2.8 million of capital expenditures, partially offset by $1.1 million of proceeds from the sale of property and equipment.

Net cash provided by financing activities

Net cash provided by financing activities was $151.8 million for the three months ended March 31, 2024 compared to $19.4 million of cash provided by financing activities for the three months ended March 31, 2023, respectively.

The change in net cash provided by financing activities primarily resulted from $96.5 million in borrowings from the revolving Credit Facility and net $59.7 million from the Seller Term Loan during the three months ended March 31, 2024 compared to a net $25.0 million of borrowings on the revolving Credit Facility during the three months ended March 31, 2023.

Net cash provided by financing activities was $114.9 million for the six months ended June 30, 2024 compared to $4.1 million of cash provided by financing activities for the six months ended June 30, 2023, respectively.

The change in net cash provided by financing activities primarily resulted from $72.8 million in borrowings from the revolving Credit Facility and $59.7 million from the Seller Term Loan, partially offset by repurchase of 2025 Notes of $13.0 million, during the six months ended June 30, 2024 compared to a net $10.0 million of borrowings on the revolving Credit Facility during the six months ended June 30, 2023.

Supplemental Guarantor Financial Information

17 unchanged sentences

Summarized financial information for the year-to-date interim period and the most recent annual period was as follows (in thousands):

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

Summarized Statements of Operations 2024 2023 2024 2023

3 unchanged sentences

Net loss (6,696) (6,579) (17,011) (10,065)

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Summarized Balance Sheet

5 unchanged sentences

Critical accounting policies and estimates

There have been no material changes in our critical accounting policies and procedures during the three months ended March 31, 2024.

There have been no material changes in our critical accounting policies and procedures during the six months ended June 30, 2024.

For a detailed discussion of our critical accounting policies and estimates, refer to our 2023 Annual Report on Form 10-K.

3 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