What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-05-01 compared with 2024-10-31 · 167 added, 265 removed, 397 unchanged (52% of the section changed)

3 unchanged sentences

(Dollars in thousands, except share and per share amounts)

Quarter Ended September 30, Year to Date Ended September 30,

2024 2023 2024 2023

Quarter Ended March 31,

Sales $ 121,653 $ 170,563

5 unchanged sentences

Change in fair value of contingent consideration 14,700 4,100

Operating income 32,564 19,839 104,868 105,541

Operating income (loss) ( 747 ) 28,917

Interest expense, net ( 1,854 ) ( 2,019 )

Other income (expense), net 215 ( 52 )

Income before income taxes 31,416 17,461 100,387 100,916

Income (loss) before income taxes ( 2,386 ) 26,846

Income tax expense 671 6,262

Net income 23,862 13,088 76,463 76,084

Net income (loss) ( 3,057 ) 20,584

Net loss attributable to noncontrolling interest 33 51

Net income attributable to MGP Ingredients, Inc.

Net income (loss) attributable to MGP Ingredients, Inc.

( 3,024 ) 20,635

Income attributable to participating securities ( 257 ) ( 129 ) ( 828 ) ( 760 )

Net income used in earnings per common share calculation $ 23,648 $ 13,082 $ 75,797 $ 75,648

Income (loss) attributable to participating securities 30 ( 239 )

Net income (loss) used in earnings per common share calculation $ ( 2,994 ) $ 20,396

Weighted average common shares

8 unchanged sentences

(Dollars in thousands)

Quarter Ended September 30, Year to Date Ended September 30,

2024 2023 2024 2023

Net income attributable to MGP Ingredients, Inc.

Quarter Ended March 31,

Net income (loss) attributable to MGP Ingredients, Inc.

$ ( 3,024 ) $ 20,635

Other comprehensive income (loss), net of tax:

Unrealized gain (loss) on foreign currency translation adjustment 573 ( 317 ) 497 ( 6 )

Unrealized gain on foreign currency translation adjustment 317 —

Change in Company-sponsored post-employment benefit plan ( 21 ) ( 40 )

Other comprehensive income (loss) 296 ( 40 )

Comprehensive income attributable to MGP Ingredients, Inc.

Comprehensive income (loss) attributable to MGP Ingredients, Inc.

( 2,728 ) 20,595

Comprehensive loss attributable to noncontrolling interest ( 33 ) ( 51 )

Comprehensive income $ 24,396 $ 12,779 $ 76,841 $ 75,910

Comprehensive income (loss) $ ( 2,761 ) $ 20,544

See accompanying notes to unaudited condensed consolidated financial statements

2 unchanged sentences

(Unaudited) (Dollars in thousands)

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Current Assets

Cash and cash equivalents $ 20,112 $ 25,273

Receivables (less allowance for credit loss, $ 1,475 at both September 30, 2024, and December 31, 2023)

Receivables (less allowance for credit loss, $ 1,875 at both March 31, 2025, and December 31, 2024)

107,827 148,488

7 unchanged sentences

Operating lease right-of-use assets, net 16,294 15,540

Investment in joint ventures 6,643 5,197

Investment in joint venture 7,281 7,024

Intangible assets, net 267,638 268,451

5 unchanged sentences

Accounts payable 54,400 66,336

Contingent consideration, current 100,000 —

Federal and state excise taxes payable 5,260 5,358

17 unchanged sentences

authorized 40,000,000 shares;

issued 23,125,166 shares at September 30, 2024 and December 31, 2023;

and 21,952,581 and 22,016,113 shares outstanding at September 30, 2024 and December 31, 2023, respectively

issued 23,125,166 shares at March 31, 2025 and December 31, 2024;

and 21,270,343 and 21,194,707 shares outstanding at March 31, 2025 and December 31, 2024, respectively

Additional paid-in capital 328,935 332,195

1 unchanged sentence

Accumulated other comprehensive loss ( 362 ) ( 658 )

Treasury stock, at cost, 1,172,585 and 1,109,053 shares at September 30, 2024 and December 31, 2023, respectively

Treasury stock, at cost, 1,854,823 and 1,930,459 shares at March 31, 2025 and December 31, 2024, respectively

( 65,270 ) ( 68,019 )

8 unchanged sentences

(Dollars in thousands)

Year to Date Ended September 30,

Quarter to Date Ended March 31,

Cash Flows from Operating Activities

Net income $ 76,463 $ 76,084

Net income (loss) $ ( 3,057 ) $ 20,584

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 5,808 5,289

Impairment of long-lived assets and other 137 18,334

Share-based compensation 742 1,116

3 unchanged sentences

Other, net 73 157

Changes in operating assets and liabilities, net of effects of acquisition:

Changes in operating assets and liabilities:

Receivables, net 40,594 11,257

10 unchanged sentences

Additions to property, plant, and equipment ( 19,926 ) ( 27,026 )

Purchase of business, net of cash acquired — ( 103,712 )

Other, net — ( 240 )

14 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

For Year to Date Ended September 30, 2024

For Quarter to Date Ended March 31, 2025 and 2024

(Dollars in thousands)

7 unchanged sentences

$ 4 $ 6,715 $ 332,195 $ 563,929 $ ( 658 ) $ ( 68,019 ) $ ( 1,623 ) $ 832,543

Comprehensive income:

Net income (loss) — — — 20,635 — — ( 51 ) 20,584

Other comprehensive loss — — — — ( 40 ) — — ( 40 )

Dividends and dividend equivalents of $ 0.12 per common share and per restricted stock unit, net of estimated forfeitures

— — — ( 2,670 ) — — — ( 2,670 )

Share-based compensation — — 5,563 — — — — 5,563

Stock shares awarded, forfeited or vested — — ( 1,556 ) — — 1,556 — —

Stock shares repurchased — — — — — ( 6,961 ) — ( 6,961 )

Balance, March 31, 2024

4 6,715 329,460 557,848 ( 437 ) ( 26,571 ) ( 1,476 ) 865,543

Comprehensive income:

Net income (loss) — — — 32,085 — — ( 68 ) 32,017

Other comprehensive loss — — — — ( 116 ) — — ( 116 )

Dividends and dividend equivalents of $ 0.12 per common share and per restricted stock unit, net of estimated forfeitures

— — — ( 2,668 ) — — — ( 2,668 )

Share-based compensation — — 911 — — — — 911

Stock shares awarded, forfeited or vested — — ( 658 ) — — 658 — —

Stock shares repurchased — — — — — ( 2,774 ) — ( 2,774 )

Balance, June 30, 2024

4 6,715 329,713 587,265 ( 553 ) ( 28,687 ) ( 1,544 ) 892,913

Comprehensive income:

Net income (loss) — — — 23,905 — ( 43 ) 23,862

Comprehensive loss:

Net loss — — — ( 3,024 ) — — ( 33 ) ( 3,057 )

Other comprehensive income — — — — 296 — — 296

4 unchanged sentences

Stock shares repurchased — — — — — ( 1,035 ) — ( 1,035 )

Balance, September 30, 2024

Balance, March 31, 2025

$ 4 $ 6,715 $ 328,935 $ 558,327 $ ( 362 ) $ ( 65,270 ) $ ( 1,656 ) $ 826,693

See accompanying notes to unaudited condensed consolidated financial statements

MGP INGREDIENTS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

For Year to Date Ended September 30, 2023

(Dollars in thousands)

Preferred Issued Common Additional

8 unchanged sentences

Net income (loss) — — — 20,635 — — ( 51 ) 20,584

Other comprehensive income — — — — 68 — — 68

Other comprehensive loss — — — — ( 40 ) — — ( 40 )

Dividends and dividend equivalents of $ 0.12 per common share and per restricted stock unit, net of estimated forfeitures

5 unchanged sentences

$ 4 $ 6,715 $ 329,460 $ 557,848 $ ( 437 ) $ ( 26,571 ) $ ( 1,476 ) $ 865,543

Comprehensive income:

Net income (loss) — — — 32,126 — — ( 162 ) 31,964

Other comprehensive income — — — — 67 — — 67

Dividends and dividend equivalents of $ 0.12 per common share and per restricted stock unit, net of estimated forfeitures

— — — ( 2,664 ) — — — ( 2,664 )

Share-based compensation — — 1,808 — — — — 1,808

Stock shares awarded, forfeited, or vested — — ( 538 ) — — 538 — —

Balance, June 30, 2023

4 6,715 322,267 500,933 ( 169 ) ( 21,347 ) ( 1,281 ) 807,122

Comprehensive income:

Net income (loss) — — — 13,211 — ( 123 ) 13,088

Other comprehensive loss — — — — ( 309 ) — ( 309 )

Dividends and dividend equivalents of $ 0.12 per common share and per restricted stock unit, net of estimated forfeitures

— — — ( 2,664 ) — — — ( 2,664 )

Share-based compensation — — 949 — — — — 949

Stock shares awarded, forfeited, or vested — — ( 87 ) — — 87 — —

Balance, September 30, 2023

$ 4 $ 6,715 $ 323,129 $ 511,480 $ ( 478 ) $ ( 21,260 ) $ ( 1,404 ) $ 818,186

See accompanying notes to unaudited condensed consolidated financial statements

5 unchanged sentences

(the “Company” or “MGP”) is a Kansas corporation headquartered in Atchison, Kansas and is a leading producer of branded and distilled spirits, as well as food ingredient solutions.

Distilled spirits include premium bourbon, rye, and other whiskeys (“brown goods”) and grain neutral spirits (“GNS”), including vodka and gin (“white goods and other co-products”).

The Company’s distilled spirits are either sold directly or indirectly to manufacturers of other branded spirits.

The Company has a portfolio of its own high quality branded spirits which are produced through its distilleries and bottling facilities and sold to distributors.

The Company’s branded spirits products account for a range of price points from value products through premium plus brands.

The Company’s protein and starch food ingredients provide a host of functional, nutritional, and sensory benefits for a wide range of food products to serve the consumer packaged goods industry.

The ingredients products are sold directly, or through distributors, to manufacturers and processors of finished packaged goods or to bakeries.

Distilled spirits include premium bourbon, rye, and other American whiskeys (“brown goods”) and grain neutral spirits (“GNS”), including vodka and gin.

The Company’s distilled spirits are either sold directly or indirectly to manufacturers of other branded spirits.

The Company’s protein and starch food ingredients are predominately wheat based and provide a host of functional, nutritional, and sensory benefits for a wide range of food products to serve the consumer packaged goods industry.

The ingredient products are sold directly, or through distributors, to manufacturers and processors of finished packaged goods or to bakeries.

The Company reports three operating segments:

Distilling Solutions, Branded Spirits, and Ingredient Solutions.

Certain amounts in the Company’s 2023 condensed consolidated financial statements have been reclassified to conform to the 2024 presentation.

Branded Spirits, Distilling Solutions, and Ingredient Solutions.

Basis of Presentation and Principles of Consolidation.

1 unchanged sentence

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

These unaudited condensed consolidated financial statements as of and for the quarter and year to date ended September 30, 2024, should be read in conjunction with the consolidated financial statements and notes thereto in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission (the “SEC”).

These unaudited condensed consolidated financial statements as of and for the quarter ended March 31, 2025, should be read in conjunction with the consolidated financial statements and notes thereto in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission (the “SEC”).

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

16 unchanged sentences

Inventory consists of the following:

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Finished goods $ 45,076 $ 43,952

10 unchanged sentences

This is a faithful depiction of the satisfaction of the performance obligation because, at the point control passes to the customer, the customer has legal title and the risk and rewards of ownership have transferred, and the customer has a present obligation to pay.

The Distilling Solutions segment routinely enters into bill and hold arrangements, whereby the Company produces and sells aged and unaged distillate to customers, and the product is barreled at the customer’s request and warehoused at a Company location for an extended period of time in accordance with directions received from the Company’s customers.

The Distilling Solutions segment routinely enters into bill and hold arrangements, whereby the Company produces and sells aged and unaged distillate to customers, and the product is barreled at the customer’s request and warehoused by the Company for an extended period of time in accordance with directions received from the Company’s customers.

Even though the aged and unaged distillate remains in the Company’s possession, a sale is recognized at the point in time when the customer obtains control of the product.

31 unchanged sentences

Adjustments resulting from the translation process are included as a component of accumulated other comprehensive income.

Business Combinations.

Assets acquired and liabilities assumed during a business combination are generally recorded at fair market value as of the acquisition date.

Goodwill is recognized to the extent that the purchase consideration, including contingent consideration, exceeds the value of the assets acquired and liabilities assumed.

The Company uses its internal estimates and third-party valuation specialists to assist in determining the fair value of the assets acquired and liabilities assumed.

During the measurement periods, which can be up to one year after the acquisition date, the Company can make adjustments to the fair value of the assets acquired and liabilities assumed, with the offset being an adjustment to goodwill.

Goodwill and Other Intangible Assets.

The Company records goodwill and other indefinite-lived intangible assets in connection with various acquisitions of businesses and allocates the goodwill and other indefinite-lived intangible assets to its respective reporting units.

Goodwill and Indefinite-Lived Intangible Assets.

The Company records goodwill and indefinite-lived intangible assets in connection with various acquisitions of businesses and allocates the goodwill and indefinite-lived intangible assets to its respective reporting units.

All goodwill and indefinite-lived intangible assets included in the Condensed Consolidated Balance Sheets are related to the Branded Spirits reporting unit.

The Company evaluates goodwill for impairment at least annually, in the fourth quarter, or on an interim basis if events and circumstances occur that would indicate it is more likely than not that the fair value of a reporting unit is less than the carrying value.

2 unchanged sentences

The Company separately evaluates indefinite-lived intangible assets for impairment.

As of September 30, 2024, the Company determined that goodwill and indefinite-lived intangible assets were not impaired.

As of March 31, 2025, Company determined that goodwill and indefinite-lived intangible assets were not impaired.

The Company will continue to evaluate its goodwill and indefinite-lived intangible assets in future quarters.

Any significant decline in the Company’s market capitalization or changes in discount rates, even if due to macroeconomic factors, could put pressure on the carrying value of its goodwill.

In addition, if future revenues and contributions to the Company’s operating results for any of its indefinite-lived intangible assets or Branded Spirits reporting unit perform at levels below its current projections, the Company may be required to record additional impairment charges to certain intangible assets.

A determination that a portion or all of the Company’s goodwill or indefinite-lived intangible assets are impaired could have a material adverse effect on its business, consolidated financial condition, and results of operations.

Fair Value of Financial Instruments.

11 unchanged sentences

The fair value of the Company’s debt is estimated based on current market interest rates for debt with similar maturities and credit quality.

Excluding the impact of the conversion feature of the Convertible Senior Notes, the fair value of the Company’s debt was $ 207,827 and $ 194,440 at September 30, 2024 and December 31, 2023, respectively.

The financial statement carrying value of total debt (net of unamortized loan fees) was $ 289,968 and $ 287,249 at September 30, 2024 and December 31, 2023, respectively.

Excluding the impact of the conversion feature of the Convertible Senior Notes, the fair value of the Company’s debt was $ 226,124 and $ 249,672 at March 31, 2025 and December 31, 2024, respectively.

The financial statement carrying value of total debt (net of unamortized loan fees) was $ 297,114 and $ 323,541 at March 31, 2025 and December 31, 2024, respectively.

These fair values are considered Level 2 under the fair value hierarchy.

2 unchanged sentences

The inputs used in the calculation of the contingent consideration liability are considered Level 3 under the fair value hierarchy due to the lack of relevant market activity.

See Note 3, Business Combination, for more information.

The contingent consideration liability is measured on a quarterly basis and recorded at fair value.

The changes in fair value of the obligation resulted from changes in the key assumptions between measurement dates, such as actual net sales, projected net sales, discount rates, and volatility rates.

During the quarters ended March 31, 2025 and 2024, there were $ 14,700 and $ 4,100 , respectively, in adjustments to the fair value measurement of the contingent consideration obligation, which were included in the change of fair value of contingent consideration on the Condensed Consolidated Statements of Income.

The fair value of the Company’s contingent consideration liability was $ 100,000 and $ 85,300 at March 31, 2025 and December 31, 2024, respectively.

The amount payable is based upon achievement of certain net sales targets between the Acquisition date and December 31, 2025.

The possible payments range from zero to a maximum payout of $ 110,800 .

Fair value disclosure for deferred compensation plan investments is included in Note 8, Employee and Non-Employee Benefit Plans.

3 unchanged sentences

(“Agricola” and together with DGL, “LMX”), which are accounted for as equity method investments and are considered affiliates of the Company.

The investment in LMX, which is recorded in investment in joint ventures on the Condensed Consolidated Balance Sheets, was $ 6,643 and $ 5,197 at September 30, 2024 and December 31, 2023, respectively.

During the quarter and year to date ended September 30, 2024, the Company recorded a gain of $ 832 and $ 1,446 , respectively, from its equity method investments, which is recorded in other income (expense), net on the Condensed Consolidated Statements of Income.

During the quarter and year to date ended September 30, 2023, the Company recorded a gain of $ 388 and a loss of $ 191 , respectively, which is recorded in other income (expense), net on the Condensed Consolidated Statements of Income.

During the quarters ended September 30, 2024 and 2023, the Company purchased $ 7,606 and $ 10,223 , respectively, of finished goods from LMX and bulk beverage alcohol from the other 50 percent owner of DGL.

During the year to date ended September 30, 2024 and 2023, the Company purchased $ 22,604 and $ 30,178 , respectively, of finished goods from LMX and bulk beverage alcohol from the other 50 percent owner of DGL.

Related Party Transaction.

The Company leased bottling and warehousing facilities in St.

Louis, Missouri from Kemper-Themis, L.L.C.

(“Kemper”), which was owned by Donn Lux, a member of the Company’s Board of Directors.

On October 31, 2023, the Company’s Audit Committee and Board of Directors approved the purchase of the Kemper bottling and warehousing facilities from Kemper for $ 9,000 .

The purchase and sales agreement was entered into by both parties subsequent to Board approval and the transaction closed in February 2024.

The transaction was entered into at fair value based on two independent appraisers’ valuations;

therefore, the transaction is deemed to have been conducted at an arm’s length.

The investment in LMX, which is recorded in investment in joint venture on the Condensed Consolidated Balance Sheets, was $ 7,281 and $ 7,024 at March 31, 2025 and December 31, 2024, respectively.

During the quarter ended March 31, 2025, the Company recorded income of $ 257 from its equity method investments, which is recorded in other income (expense), net on the Condensed Consolidated Statements of Income.

During the quarter ended March 31, 2024, the Company recorded a loss of $ 296 which is recorded in other income (expense), net on the Condensed Consolidated Statements of Income.

During the quarters ended March 31, 2025 and 2024, the Company purchased $ 4,042 and $ 8,092 , respectively, of finished goods from LMX and bulk beverage alcohol from the other 50 percent owner of DGL.

Recently Adopted Accounting Standard Updates.

The Company did not adopt any new Accounting Standard Updates (“ASUs”) during the quarter ended September 30, 2024.

The Company did not adopt any new Accounting Standard Updates (“ASUs”) during the quarter ended March 31, 2025.

Recently Issued Accounting Pronouncements.

ASU 2023-07, Improvements to Reportable Segment Disclosures , which requires improved disclosures related to significant segment expenses.

This ASU requires companies to disclose significant segment expenses provided to the chief operating decision maker (“CODM”), a description of other segment items and all existing annual disclosures must be provided on an interim basis.

This ASU is effective for annual periods beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted and must be applied retrospectively to all prior periods presented in the financial statements.

The Company does not expect to early adopt this guidance and is currently evaluating the impact to the Company’s financial statements.

ASU 2023-09, Improvements to Income Tax Disclosures, requires improved disclosures related to the rate reconciliation and income taxes paid.

4 unchanged sentences

The Company is currently evaluating the impact to the Company’s financial statements.

The Company generates revenue from the Distilling Solutions segment by the sale of products and by providing warehouse services related to the storage and aging of customer products.

ASU 2024-03, Disaggregation of Income Statement Expenses , requires disaggregated disclosures in the notes to the consolidated financial statements of certain categories of expenses that are included in expense line items on the Consolidated Statement of Income.

This ASU is effective for annual periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027, with early adoption permitted.

The guidance is required to be applied on a prospective basis with the option to apply retrospectively to all prior periods presented in the consolidated financial statements.

The Company is currently evaluating the impact to the Company’s consolidated financial statements.

ASU 2024-04, Induced Conversions of Convertible Debt Instruments , clarifies the requirement for determining whether certain settlements of convertible debt instruments should be accounted for as induced conversions or extinguishments.

This ASU is effective for annual periods beginning after December 15, 2025.

Early adoption is permitted and can be applied either on a prospective basis or retrospective basis.

The Company is currently evaluating the impact of this ASU to the Company’s consolidated financial statements, however the Company does not anticipate this guidance having a material impact to the consolidated financial statements.

The Company generates revenue from the Branded Spirits segment by the sale of products and by providing contract bottling services.

The Company generates revenue from the Distilling Solutions segment by the sale of products and by providing warehouse services related to the storage and aging of customer products.

The Company generates revenue from the Ingredient Solutions segment by the sale of products.

3 unchanged sentences

The following table presents the Company’s sales disaggregated by segment and major products and services:

Quarter Ended September 30, Year to Date Ended September 30,

2024 2023 2024 2023

Distilling Solutions

Brown goods $ 57,110 $ 73,409 $ 198,884 $ 214,857

Warehouse services 8,264 7,353 24,612 20,958

White goods and other co-products

6,545 31,091 26,663 106,126

Total Distilling Solutions 71,919 111,853 250,159 341,941

Quarter Ended March 31,

Branded Spirits

4 unchanged sentences

Total Branded Spirits 48,227 50,146

Distilling Solutions

Brown goods 33,656 66,331

Warehouse services 8,077 7,956

White goods and other co-products

Total Distilling Solutions 46,943 84,852

Ingredient Solutions

5 unchanged sentences

Total sales $ 121,653 $ 170,563

Business Combination

Description of the Transaction .

On May 8, 2023, the Company entered into a definitive agreement to acquire 100 percent of the equity of Penelope, and subsequently completed the acquisition on June 1, 2023 (the “Acquisition”).

Penelope, prior to the Acquisition, was a family and founder-owned and operated American whiskey company with a diverse portfolio of high-quality whiskeys in the premium plus price tier.

As a result of the Acquisition, the Company enhanced its presence in the growing American whiskey category and expanded its portfolio of premium plus price tier brands.

Following the Acquisition, Penelope became a wholly owned subsidiary of the Company and its financial results are included within the Branded Spirits segment.

The aggregate consideration paid by the Company in connection with the Acquisition was $ 105,000 in cash paid at closing, with further additional potential earn-out consideration of up to a maximum cash payout of $ 110,800 if certain performance conditions, measured through December 31, 2025, are met.

The consideration is subject to customary purchase price adjustments related to, among other things, net working capital and acquired cash.

The consideration paid at closing included a preliminary estimated purchase price adjustment.

During the year ended December 31, 2023, the Company finalized the net working capital adjustments, which decreased the cash consideration from $ 105,000 at closing to $ 104,638 at December 31, 2023.

The cash portion of the consideration and transaction-related expenses were paid using both

cash on hand and borrowings under the Company’s existing credit agreement.

See Note 5, Corporate Borrowings, for further details.

For tax purposes, the Acquisition was structured as an asset purchase which created additional tax basis in the assets acquired as a result of valuing the assets at fair market value and the purchase price will be accounted for in accordance with U.S.

federal tax law.

Indefinite-lived intangible assets and goodwill is deductible for U.S.

income tax purposes.

Purchase Price Allocation.

The Acquisition was accounted for as a business combination in accordance with Accounting Standard Codification 805, Business Combinations (“ASC 805”), and as such, assets acquired, liabilities assumed, and consideration transferred were recorded at their estimated fair values on the acquisition date.

The following table summarizes the allocation of the consideration paid for Penelope to the estimated fair value of the assets acquired and liabilities assumed at the acquisition date, with the excess recorded to goodwill.

Consideration:

Cash $ 104,638

Contingent consideration 62,100

Fair value of total consideration transferred $ 166,738

Recognized amounts of identifiable assets acquired and liabilities assumed:

Receivables 2,323

Inventory 12,454

Prepaid expenses and other assets 77

Property, plant and equipment, net 253

Intangible assets (a)

Operating lease right-of-use assets, net 426

Other assets 44

Total assets 74,203

Accounts payable 2,242

Accrued expenses and other 205

Long-term operating lease liabilities 268

Total liabilities 2,715

Goodwill 95,250

Total $ 166,738

(a) Intangible assets acquired included trade names with an estimated fair value of $ 34,000 and distributor relationships with an estimated fair value of $ 23,700 .

In accordance with ASC 805, assets acquired, liabilities assumed, and consideration transferred were recorded at their estimated fair values on the Acquisition date.

The fair value measurements of tangible and intangible assets and liabilities were based on significant inputs not observable in the market and represent Level 3 measurements within the fair value hierarchy.

Level 3 inputs include discount rates that would be used by a market participant in valuing these assets and liabilities, projections of revenues and cash flows, distributor attrition rates, royalty rates, and market comparables, among others.

The fair value of work-in-process and finished goods inventory was determined using the comparative sales method and raw materials was determined using the replacement cost method.

Goodwill of $ 95,250 , all of which is deductible for tax purposes, represents the excess of the consideration transferred over the estimated fair value of assets acquired net of liabilities assumed.

Additionally, the goodwill is representative of the strength of the Penelope brand within the American whiskey category, and the synergies expected to be achieved by the combined company.

The intangible assets acquired included indefinite-lived intangible assets, trade names, with an estimated fair value of $ 34,000 , and definite-lived intangible assets, distributor relationships, with an estimated fair value of $ 23,700 and a useful life of 20 years.

The trade names and distributor relationships acquired by the Company have been recorded at estimated fair values using the relief from royalty method and multi-period excess earnings method, respectively.

Management engaged a third party valuation specialist to assist in the valuation analysis of certain acquired assets including trade names and distributor relationships.

The operating results of Penelope have been included in the Company’s condensed consolidated financial statements since the

June 1, 2023 acquisition date.

The operating results and pro forma results are not disclosed due to the immaterial impact to the Company’s Condensed Consolidated Statements of Income.

During the quarter and year to date ended September 30, 2024, the Company incurred $ 15 and $ 101 , respectively, of costs related to the Acquisition, which are included in selling, general, and administrative expenses on the Condensed Consolidated Statements of Income.

Contingent Consideration.

The estimated fair value of the contingent consideration obligation at the Acquisition date was $ 62,100 , which was determined using a Monte Carlo simulation approach.

This approach requires significant assumptions, including projected net sales, discount rates, and volatility rates.

The inputs used in the calculation of the contingent consideration liability are considered Level 3 under the fair value hierarchy due to the lack of relevant market activity.

The contingent consideration liability is measured on a quarterly basis and recorded at fair value.

The changes in fair value of the obligation resulted from changes in the key assumptions between measurement dates, such as projected net sales, discount rates, and volatility rates.

During the quarter and year to date ended September 30, 2024, there were $ 6,400 and $ 15,900 , respectively, in adjustments to the fair value measurement of the contingent consideration obligation, which were included in the change of fair value of contingent consideration on the Condensed Consolidated Statements of Income.

The amount payable is based upon achievement of certain net sales targets between the Acquisition date and December 31, 2025.

The possible payments range from zero to a maximum payout of $ 110,800 .

Goodwill and Intangible Assets

Definite-Lived Intangible Assets.

The Company acquired definite-lived intangible assets in connection with various acquisitions of businesses.

The Company acquired definite-lived intangible assets in connection with various acquisitions of businesses prior to 2025.

The distributor relationships have a carrying value of $ 54,648 , net of accumulated amortization of $ 10,452 .

The distributor relationships have a useful life of 20 years.

The amortization expense for the quarter and year to date ended September 30, 2024 was $ 814 and $ 2,441 , respectively.

The amortization expense for the quarter and year to date ended September 30, 2023 was $ 820 and $ 1,948 , respectively.

As of September 30, 2024, the expected future amortization expense related to definite-lived intangible assets is as follows:

The amortization expense for the quarters ended March 31, 2025 and 2024 was $ 813 .

As of March 31, 2025, the expected future amortization expense related to definite-lived intangible assets is as follows:

Remainder of 2025 $ 2,442

3 unchanged sentences

The carrying amount of goodwill, which relates to the Branded Spirits segment, was $ 321,544 at both September 30, 2024 and December 31, 2023.

The carrying amount of trade name indefinite-lived intangible assets, which relates to the Branded Spirits segment, was $ 212,990 at both September 30, 2024 and December 31, 2023.

The carrying amount of goodwill, which relates to the Branded Spirits segment, was $ 247,789 at both March 31, 2025 and December 31, 2024.

The carrying amount of trade name indefinite-lived intangible assets, which relates to the Branded Spirits segment, was $ 212,990 at both March 31, 2025 and December 31, 2024.

Corporate Borrowings

1 unchanged sentence

Description (a)

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Credit Agreement - Revolver, 5.42 % (variable rate) due 2026

12 unchanged sentences

Long-term debt $ 290,714 $ 317,141

(a) Interest rates are as of September 30, 2024.

(a) Interest rates are as of March 31, 2025.

(b) Loan fees are being amortized over the life of the debt agreements.

4 unchanged sentences

On August 31, 2022, the Credit Agreement was amended to change the interest rate benchmark from LIBOR to SOFR.

The Credit Agreement includes certain requirements and covenants with which the Company was in compliance at September 30, 2024.

Part of the cash portion of the consideration paid to acquire Penelope and transaction-related expenses were financed with $ 105,000 borrowings under the Credit Agreement during 2023.

As of September 30, 2024, the Company had $ 70,000 outstanding borrowings under the Credit Agreement, leaving $ 330,000 available.

The Credit Agreement includes certain requirements and covenants with which the Company was in compliance at March 31, 2025.

As of March 31, 2025, the Company had $ 80,000 outstanding borrowings under the Credit Agreement, leaving $ 320,000 available.

Convertible Senior Notes.

12 unchanged sentences

During 2019, the Company issued $ 20,000 of additional Senior Secured Notes with a maturity date of April 30, 2029.

The Note Purchase Agreement includes certain requirements and covenants with which the Company was in compliance at September 30, 2024 .

As of September 30, 2024, the Company had $ 9,600 of Series A Senior Secured Notes and $ 15,200 of additional Senior Secured Notes outstanding under the Note Purchase Agreement, leaving $ 225,200 available under the Note Purchase Agreement.

The Note Purchase Agreement includes certain requirements and covenants with which the Company was in compliance at March 31, 2025 .

As of March 31, 2025, the Company had $ 8,000 of Series A Senior Secured Notes and $ 13,600 of additional Senior Secured Notes outstanding under the Note Purchase Agreement, leaving $ 228,400 available under the Note Purchase Agreement.

The Company’s tax provision for interim periods is determined using an estimated annual effective tax rate, adjusted for discrete items arising in that quarter.

1 unchanged sentence

The Company’s quarterly effective tax rate can be subject to significant change due to the effect of discrete items arising in a given quarter.

Income tax expense for the quarter and year to date ended September 30, 2024 was $ 7,554 and $ 23,924 , respectively, for an effective tax rate of 24.0 percent and 23.8 percent, respectively.

The effective tax rate for the quarter and year to date ended September 30, 2024 differed from the 21 percent U.S.

federal statutory rate on pretax income primarily due to state income taxes and income taxes on foreign subsidiaries, partially offset by U.S.

state and federal tax credits and the deduction applicable to export activity.

Income tax expense for the quarter and year to date ended September 30, 2023 was $ 4,373 and $ 24,832 , respectively, for an effective tax rate of 25.0 percent and 24.6 percent, respectively.

The effective tax rate for the quarter and year to date ended September 30, 2023 differed from the 21 percent U.S.

Income tax expense for the quarter ended March 31, 2025 was $ 671 for an effective tax rate of ( 28.1 ) percent.

The effective tax rate for the quarter ended March 31, 2025 differed from the 21 percent U.S.

federal statutory rate on pretax income primarily due to the discrete tax impact related to vesting of share based awards, state income tax, and income tax on foreign subsidiaries, partially offset by federal and state tax credits.

The tax rate was negative due to the net loss position and the discrete tax impact of the vesting of share based awards granted in the prior years during periods of higher stock prices.

Income tax expense for the quarter ended March 31, 2024 was $ 6,262 for an effective tax rate of 23.3 percent.

The effective tax rate for the quarter ended March 31, 2024 differed from the 21 percent U.S.

federal statutory rate on pretax income primarily due to state income taxes and income taxes on foreign subsidiaries, partially offset by U.S.

2 unchanged sentences

The following table presents computations of basic and diluted EPS:

Quarter Ended September 30, Year to Date Ended September 30,

2024 2023 2024 2023

Net income (a)

Quarter Ended March 31,

Net income (loss) (a)

$ ( 3,057 ) $ 20,584

Net loss attributable to noncontrolling interest 33 51

Income attributable to participating securities (unvested shares and units) (b)

( 257 ) ( 129 ) ( 828 ) ( 760 )

Income (loss) attributable to participating securities (unvested shares and units) (b)

Net income used in EPS calculation $ ( 2,994 ) $ 20,396

7 unchanged sentences

(a) Net income attributable to all stockholders.

(b) Participating securities included 243,243 and 226,410 unvested restricted stock units (“RSUs”) at September 30, 2024 and 2023, respectively.

(b) Participating securities included 213,290 and 260,651 unvested restricted stock units (“RSUs”) at March 31, 2025 and 2024, respectively.

5 unchanged sentences

The repurchase program has no expiration date and may be modified, suspended, or discontinued at any time by the Company without prior notice.

During the quarter and year to date ended September 30, 2024, the Company repurchased 35,913 and 128,360 shares, respectively, of Common Stock for approximately $ 2,500 and $ 10,000 , respectively.

As of September 30, 2024, there was approximately $ 90,000 remaining under the share repurchase program.

During the quarter ended March 31, 2025, the Company repurchased no shares under the share repurchase program.

During the quarter ended March 31, 2024, the Company repurchased approximately 59,084 shares of Company Stock for approximately $ 5,000 .

As of March 31, 2025, there was approximately $ 53,412 remaining under the share repurchase program.

Common Stock Share Activity.

4 unchanged sentences

Issuance of Common Stock — 107,267

Repurchase of Common Stock (a)

Repurchase of Common Stock (b)

Balance, March 31, 2025 437 21,270,343

Issuance of Common Stock — 14,627

Repurchase of Common Stock (a)

Balance, June 30, 2024 437 21,987,685

Issuance of Common Stock — 809

Repurchase of Common Stock (a)

Balance, September 30, 2024 437 21,952,581

Shares Outstanding

2 unchanged sentences

Issuance of Common Stock — 74,913

Repurchase of Common Stock (b)

Repurchase of Common Stock (a)

Balance, March 31, 2024 437 22,009,057

Issuance of Common Stock — 5,445

Balance, June 30, 2023 437 22,014,374

Issuance of Common Stock — 822

Balance, September 30, 2023 437 22,015,196

(a) 59,084 , 33,363 and 35,913 shares that were repurchased during the quarters ended March 31, 2024, June 30, 2024, and September 30, 2024, respectively, pursuant to the Company’s share repurchase program.

(a) 59,084 shares that were repurchased during the quarter ended March 31, 2024, pursuant to the Company’s share repurchase program.

The remaining shares repurchased were related to the tax withholding on equity-based compensation.

3 unchanged sentences

The Company accrues estimated costs for a contingency when management believes that a loss is probable and can be reasonably estimated.

On December 16, 2024, a putative securities class action, captioned Operating Engineers Construction Industry Miscellaneous Pension Fund v.

MGP Ingredients, Inc.

et al., was filed in the United States District Court for the Southern District of New York against the Company, two of its former Chief Executive Officers and its current Interim Chief Executive Officer and Chief Financial Officer (the “Operating Engineers Action”).

The Operating Engineers Action was brought on behalf of a putative class who acquired publicly traded MGP common stock between May 4, 2023 and October 30, 2024.

On February 13, 2025, a second putative securities class action, captioned Bronstein v.

MGP Ingredients, Inc.

et al., was filed in the United States District Court for the Southern District of New York against the same defendants (the “Bronstein Action”).

The Bronstein Action was brought on behalf of a putative class who acquired publicly traded MGP securities between May 4, 2023 and October 30, 2024.

Both actions assert securities fraud claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, in connection with statements made in the Company’s quarterly earnings releases and on earnings calls during the alleged class period.

The Operating Engineers Action and Bronstein Action have been consolidated and transferred to the United States District Court for the District of Kansas, now captioned In re MGPI Ingredients, Inc.

Securities Litigation.

A Lead Plaintiff has been appointed in the securities action and the Court has ordered the Amended Complaint to be filed by May 15, 2025.

The Company believes there are substantial defenses to the claims asserted and intends to defend the lawsuits vigorously.

On January 23, 2025, a putative derivative lawsuit captioned Sebald v.

Colo, et al., Case No.

2:25-cv-02034, was filed in the United States District Court for the District of Kansas against two of the Company’s former Chief Executive Officers, its current Interim Chief Executive Officer and Chief Financial Officer, and the members of its Board of Directors (the “Sebald

On March 17, 2025, a second putative derivative lawsuit captioned Reid v.

Bratcher, et al., Case No.

2:25-cv-02127, was filed in the United States District Court for the District of Kansas against the same defendants (the “Reid Action”).

The Company is a “Nominal Defendant” in the lawsuits, which reflects the fact that the lawsuits are maintained by the respective named plaintiffs on behalf of the Company and that the plaintiffs seek damages on the Company’s behalf.

Both complaints allege, among other things, that the defendants breached their fiduciary duties and violated federal securities laws by causing the Company to make false and/or misleading statements and/or omissions in public filings during the class period alleged in the securities actions and also allege breaches of fiduciary duties by failing to maintain internal controls.

The Sebald complaint also alleges breaches of fiduciary duties by seeking shareholder approval of an equity incentive plan, and causing the Company to repurchase its own stock at artificially inflated prices.

The complaints bring additional claims for unjust enrichment, abuse of control, gross mismanagement, aiding and abetting breaches of fiduciary duties, and waste of corporate assets and seek indemnity and contribution from the named current and former officers.

The Court has consolidated the Sebald Action and Reid Action for discovery purposes.

The Company believes there are substantial defenses to the claims asserted and intends to defend the lawsuits vigorously.

Employee and Non-Employee Benefit Plans

Share-Based Compensation Plans .

The Company had two equity-based compensation plans, the 2014 Equity Incentive Plan and the 2014 Non-Employee Director Equity Incentive Plan, both of which expired in April 2024.

At the Company’s annual meeting in May 2024, the stockholders of the Company approved a new equity-based compensation plan, the 2024 Equity Incentive Plan (the “2024 Plan”), which initially authorized 1,319,320 shares for issuance, subject to the adjustment and add-back provision of the 2024 Plan.

Similar to the prior plans, the 2024 Plan provides for the awarding of stock options, stock appreciation rights, shares of restricted stock, RSUs, and other stock-based awards for executive officers and other employees, as well as non-employee directors and certain consultants and advisors.

As of September 30, 2024, 1,329,232 shares remain available for issuance under the 2024 Plan.

The Company has one equity-based compensation plan, the 2024 Equity Incentive Plan (the “2024 Plan”), which authorized 1,319,320 shares for issuance, subject to the adjustment and add-back provision of the 2024 Plan.

The 2024 Plan provides for the awarding of stock options, stock appreciation rights, shares of restricted stock, RSUs, performance stock units (“PSUs”), and other stock-based awards for executive officers and other employees, as well as non-employee directors and certain consultants and advisors.

As of March 31, 2025, 1,174,393 shares remain available for issuance under the 2024 Plan, with PSUs counted at the target level established on the award’s grant date.

Deferred Compensation Plan.

2 unchanged sentences

Realized and unrealized gains (losses) on deferred compensation plan investments were included as a component of other income (expense), net on the Company’s Condensed Consolidated Statements of Income.

For the quarter and year to date ended September 30, 2024, the Company had a gain on deferred compensation plan investments of $ 196 and $ 482 , respectively, and for the quarter and year to date ended September 30, 2023, the Company had a loss on deferred compensation plan investments of $ 118 and a gain on deferred compensation plan investments of $ 272 , respectively.

For the quarter ended March 31, 2025 and 2024 the Company had a loss on deferred compensation plan investments of $ 44 and a gain on deferred compensation plan investments of $ 252 , respectively.

EDC Plan investments are classified as Level 1 in the fair value hierarchy since the investments trade with sufficient frequency and volume to enable the Company to obtain pricing information on an ongoing basis.

Participants were able to direct the deferral of a portion of their base salary and a portion of their estimated accrued short-term incentive plan (“STI Plan”) amounts that were paid during the first quarter of the following year.

Base salary amounts elected for deferral are deposited into the EDC Plan by the Company on a weekly basis and allocated by participants among Company-determined investment options.

STI Plan deferral amounts are deposited, at the time of payment, into the EDC Plan by the Company and allocated by participants among Company-determined investment options.

At September 30, 2024 and December 31, 2023, the EDC Plan investments were $ 3,659 and $ 2,916 , respectively, which were recorded in other assets on the Company’s Condensed Consolidated Balance Sheets.

The EDC Plan current liabilities were $ 1,796 and $ 74 at September 30, 2024 and December 31, 2023, respectively, which were included in accrued expenses and other on the Company’s Condensed Consolidated Balance Sheets.

The EDC Plan non-current liabilities were $ 2,003 and $ 3,314 at September 30, 2024 and December 31, 2023, respectively, and were included in other noncurrent liabilities on the Company’s Condensed Consolidated Balance Sheets.

At March 31, 2025 and December 31, 2024, the EDC Plan investments were $ 2,058 and $ 3,653 , respectively, which were recorded in other assets on the Company’s Condensed Consolidated Balance Sheets.

The EDC Plan current liabilities were $ 661 and $ 1,520 at March 31, 2025 and December 31, 2024, respectively, which were included in accrued expenses and other on the Company’s Condensed Consolidated Balance Sheets.

The EDC Plan non-current liabilities were $ 1,398 and $ 2,132 at March 31, 2025 and December 31, 2024, respectively, and were included in other noncurrent liabilities on the Company’s Condensed Consolidated Balance Sheets.

Operating Segments

At September 30, 2024, the Company had three segments:

Distilling Solutions, Branded Spirits, and Ingredient Solutions.

The Company’s reportable segments are based on the financial information the chief operating decision maker, the Company’s Chief Executive Officer, uses to allocate resources and evaluate performance of the business.

At March 31, 2025, the Company had three segments:

Branded Spirits, Distilling Solutions, and Ingredient Solutions.

The Company’s reportable segments are based on the financial information the chief operating decision maker uses to allocate resources and evaluate performance of the business.

The Branded Spirits segment consists of a portfolio of high quality branded spirits which are produced through distilleries and bottling facilities.

The Distilling Solutions segment consists of food grade alcohol (primarily brown goods) and distillery co-products, such as distillers feed (commonly called dried distillers grain in the industry).

The Distilling Solutions segment also includes warehouse services, such as barrel put away, barrel storage, and barrel retrieval services.

The Branded Spirits segment consists of a portfolio of high quality branded spirits which are produced through the distilleries and bottling facilities.

The Ingredient Solutions segment consists of specialty starches and proteins as well as commodity starches and proteins.

5 unchanged sentences

All other assets are considered as Corporate.

The following table presents summarized financial information for each segment:

Quarter Ended September 30, Year to Date Ended September 30,

2024 2023 2024 2023

Sales to Customers

Distilling Solutions $ 71,919 $ 111,853 $ 250,159 $ 341,941

Branded Spirits 62,624 66,819 176,811 181,318

Ingredient Solutions 26,918 32,952 95,859 98,376

Total $ 161,461 $ 211,624 $ 522,829 $ 621,635

Distilling Solutions $ 28,644 $ 33,280 $ 105,200 $ 104,986

Branded Spirits 32,446 29,040 88,611 79,636

Ingredient Solutions 4,725 11,128 18,031 34,945

Total $ 65,815 $ 73,448 $ 211,842 $ 219,567

The following tables present summarized financial information for each segment:

Quarter Ended March 31, 2025

Branded Spirits Distilling Solutions Ingredient Solutions Corporate Total

Sales $ 48,227 $ 46,943 $ 26,483 $ — $ 121,653

Cost of Goods Sold 26,029 28,263 24,031 — 78,323

Gross Profit 22,198 18,680 2,452 — 43,330

Advertising and promotion expense 7,654 146 320 52 8,172

SG&A expense 8,990 652 1,124 10,439 21,205

Change in fair value of contingent consideration 14,700 — — — 14,700

Operating income $ ( 9,146 ) $ 17,882 $ 1,008 $ ( 10,491 ) $ ( 747 )

Depreciation and amortization $ 2,140 $ 2,055 $ 1,271 $ 342 $ 5,808

Distilling Solutions $ 1,975 $ 3,082 $ 5,900 $ 8,803

Branded Spirits 2,192 1,914 5,867 5,063

Ingredient Solutions 1,178 619 3,517 1,899

Corporate 335 167 1,014 507

Total $ 5,680 $ 5,782 $ 16,298 $ 16,272

Income (loss) before Income Taxes

Distilling Solutions $ 27,631 $ 13,930 $ 102,228 $ 84,187

Branded Spirits 7,391 7,199 15,534 25,577

Ingredient Solutions 3,277 9,408 13,781 30,255

Corporate ( 6,883 ) ( 13,076 ) ( 31,156 ) ( 39,103 )

Total $ 31,416 $ 17,461 $ 100,387 $ 100,916

Quarter Ended March 31, 2024

Branded Spirits Distilling Solutions Ingredient Solutions Corporate Total

Sales $ 50,146 $ 84,852 $ 35,565 $ — $ 170,563

Cost of Goods Sold 27,614 50,769 29,385 — 107,768

Gross Profit 22,532 34,083 6,180 — 62,795

Advertising and promotion expense 7,754 319 472 138 8,683

SG&A expense 9,770 579 988 9,642 20,979

Impairment of long-lived assets and other — 116 — — 116

Change in fair value of contingent consideration 4,100 — — — 4,100

Operating income $ 908 $ 33,069 $ 4,720 $ ( 9,780 ) $ 28,917

Depreciation and amortization $ 1,823 $ 1,957 $ 1,169 $ 340 $ 5,289

The following table allocates assets to each segment as of:

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Identifiable Assets

Distilling Solutions $ 361,553 $ 369,241

Branded Spirits $ 851,708 $ 862,458

Distilling Solutions 365,340 382,432

Ingredient Solutions 128,239 132,003

2 unchanged sentences

Subsequent Events

On October 31, 2024, the Company announced a quarterly dividend payable to stockholders of record of the Company’s common stock, resulting in dividend equivalents payable to RSU holders, of $ 0.12 per share and per RSU.

The dividend and dividend equivalents are payable on November 29, 2024 to stockholders of record and RSU holders on November 15, 2024.

On May 1, 2025, the Company announced a quarterly dividend payable to stockholders of record of the Company’s common stock, resulting in dividend equivalents payable to RSU holders, of $ 0.12 per share and per RSU.

The dividend and dividend equivalents are payable on May 30, 2025 to stockholders of record and certain RSU holders as of May 16, 2025.

Credit Agreement.

On April 24, 2025, the Company entered into an Amended and Restated Credit Agreement (the “A&R Credit Agreement”) with Wells Fargo Bank, National Association, as administrative agent, swingline lender, and issuing lender, and the other lenders and parties thereto.

The A&R Credit Agreement amends and restates the Company’s existing credit agreement, dated as of February 14, 2020.

The A&R Credit Agreement increases the size of the revolving credit facility from $ 400,000 to $ 500,000 and extends the maturity date from May 14, 2026 to April 24, 2030.

The A&R Credit Agreement also increased the amount of the revolving credit facility by up to an additional $ 200,000 , subject to certain conditions.

Note Purchase Agreements.

In connection with entering into the A&R Credit Agreement, the Company also entered into a Sixth Amendment to the Note Purchase Agreement and Private Shelf Agreement (the “Sixth Amendment”), among the Company, Prudential, and certain noteholders affiliated with Prudential.

The Sixth Amendment amends the Note Purchase Agreement to extend the period for issuing up to $ 250,000 senior secured promissory notes from August 31, 2026 to April 24, 2028.

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

What changed 10-Q

Item 1. Financial Statements