Public Policy Holding Company, Inc. 10-Q

Item 1. Financial Statements CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in thousands, except share and per share data) June 30, 2026 December 31, 2025 (Unaudited) ASSETS: Current assets: Cash and cash equivalents $ 36,923 $ 20,436 Contract receivables, net 30,905 21,851 Notes receivable - related parties, current portion 350 750 Income taxes receivable — 2,068 Prepaid post-combination compensation, current portion 6,705 3,585 Prepaid expenses and other current assets 5,006 9,598 Amounts due from related parties — 266 Total current assets 79,889 58,554 Property and equipment at cost, less accumulated depreciation 1,143 598 Notes receivable - related parties, long term 900 900 Operating lease right of use asset 27,594 18,829 Goodwill 57,153 56,990 Other intangible assets, net of accumulated amortization 35,002 37,113 Deferred income tax asset 29,759 24,600 Prepaid post-combination compensation, long term 8,869 4,692 Other long-term assets 447 276 TOTAL ASSETS $ 240,756 $ 202,552 LIABILITIES AND EQUITY: Current liabilities: Accounts payable and accrued expenses $ 20,828 $ 30,819 Income taxes payable 2,880 — Amounts owed to related parties 14 — Deferred revenue 6,245 3,310 Operating lease liability, current portion 5,271 5,070 Contingent consideration, current portion 2,098 3,134 Other liability, current portion 2,595 1,441 Notes payable, current portion, net 9,867 9,082 Total current liabilities 49,798 52,856 Notes payable, long term, net 32,286 37,906 Contingent consideration, long term 14,601 9,864 Other liability, long term 8,296 10,553 Operating lease liability, long term 24,832 16,469 Total liabilities $ 129,813 $ 127,648 Shareholders' equity: Common stock, $ 0.001 par value, 1,000,000,000 shares authorized, 29,895,289 and 25,174,492 shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively 28 24 Additional paid-in capital 295,734 237,075 Accumulated deficit ( 185,653 ) ( 163,381 ) Accumulated other comprehensive income (loss) 834 1,186 Total shareholders’ equity 110,943 74,904 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 240,756 $ 202,552 The accompanying notes to the consolidated financial statements are an integral part of these statements 2 PUBLIC POLICY HOLDING COMPANY, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) (Amounts in thousands, except share and per share data) Three Months ended June 30, Six months ended June 30, 2026 2025 2026 2025 Revenue $ 52,143 $ 48,588 $ 102,266 $ 87,899 Operating expenses: Salaries and other personnel costs 38,784 38,783 77,986 72,665 Office and other direct costs 2,008 1,812 3,767 3,286 Cost of services 40,792 40,596 81,753 75,951 Salaries, general and administrative 12,077 9,537 21,363 17,026 Mergers and acquisitions expense 802 82 1,054 276 Depreciation and amortization expense 1,466 1,577 2,971 2,768 Change in fair value of contingent consideration 892 1,693 7,195 2,676 Total operating expenses 56,029 53,484 114,336 98,697 Loss from operations ( 3,886 ) ( 4,896 ) ( 12,070 ) ( 10,798 ) Gain on bargain purchase 846 — 898 — Interest income 255 29 267 62 Interest expense ( 725 ) ( 865 ) ( 1,527 ) ( 1,500 ) Other income (expense), net 128 ( 22 ) 294 ( 22 ) Net loss before income taxes ( 3,382 ) ( 5,754 ) ( 12,138 ) ( 12,258 ) Income tax benefit (expense) ( 352 ) 24 ( 3,092 ) ( 4,088 ) Net loss $ ( 3,734 ) $ ( 5,730 ) $ ( 15,230 ) $ ( 16,346 ) Net loss per share attributable to common shareholders, basic and diluted $ ( 0.19 ) $ ( 0.44 ) $ ( 0.68 ) $ ( 1.06 ) Weighted average basic and diluted shares outstanding 24,951,184 17,183,129 24,130,718 17,044,164 Net loss $ ( 3,734 ) $ ( 5,730 ) $ ( 15,230 ) $ ( 16,346 ) Foreign currency translation gain (loss) ( 29 ) 1,520 ( 353 ) 2,242 Total comprehensive loss $ ( 3,763 ) $ ( 4,210 ) $ ( 15,583 ) $ ( 14,104 ) The accompanying notes to the consolidated financial statements are an integral part of these statements 3 PUBLIC POLICY HOLDING COMPANY, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited) (Amounts in thousands, except share and per share data) Common Stock Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive Income (Loss) Total Shareholders' Equity Shares Amount Balance as of December 31, 2025 25,174,492 $ 24 $ 237,075 $ ( 163,381 ) $ 1,186 $ 74,904 Long term incentive program charges — — 1,530 — — 1,530 Issuance of unvested legally outstanding shares 16,579 — — — — — 2026 U.S. IPO Issuance, net of underwriting discounts and offering expenses 3,742,500 4 35,945 — — 35,949 Post-combination compensation charge-shares — — 1,042 — — 1,042 Forfeiture, Retained Pre-UK IPO shares ( 4,794 ) — — — — — Share-Based Accounting Charge — — 7,282 — — 7,282 Foreign currency translation gain (loss) — — — — ( 323 ) ( 323 ) Net loss — — — ( 11,497 ) — ( 11,497 ) Balance as of March 31, 2026 28,928,777 $ 28 $ 282,874 $ ( 174,878 ) $ 863 $ 108,887 Long term incentive program charges — — 2,018 — — 2,018 Offering cost reclassification — — ( 148 ) — — ( 148 ) Related to acquisitions Issuance of common stock for settlement of other liability — — 1,211 — — 1,211 Issuance of common stock for settlement of contingent consideration — — 1,727 — — 1,727 Issuance of unvested legally outstanding shares 713,380 — — — — — Vesting of restricted stock units 254,017 — — — — — Forfeiture of unvested restricted stock awards ( 885 ) — — — — — Post-combination compensation charge-shares — — 690 — — 690 Dividends — — — ( 7,041 ) — ( 7,041 ) Share-Based Accounting Charge — — 7,362 — — 7,362 Foreign currency translation gain (loss) — — — — ( 29 ) ( 29 ) Net loss — — — ( 3,734 ) — ( 3,734 ) Balance as of June 30, 2026 29,895,289 $ 28 $ 295,734 $ ( 185,653 ) $ 834 $ 110,943 The accompanying notes to the consolidated financial statements are an integral part of these statements 4 PUBLIC POLICY HOLDING COMPANY, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (Unaudited) (Amounts in thousands, except share and per share data) Common Stock Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive Income (Loss) Total Shareholders' Equity Shares Amount Balance as of December 31, 2024 24,017,599 $ 23 $ 197,489 $ ( 115,721 ) $ ( 536 ) $ 81,255 Long term incentive program charges — — 1,179 — — 1,179 Vesting of stock issued from acquisitions — — 1 ( 1 ) — — Repayment of note receivable by related party ( 63,356 ) — ( 532 ) — — ( 532 ) Post-combination compensation charge-shares — — 605 — — 605 Share-Based Accounting Charge — — 7,444 — — 7,444 Foreign currency translation gain (loss) — — — — 721 721 Net loss — — — ( 10,614 ) — ( 10,614 ) Balance as of March 31, 2025 23,954,243 $ 23 $ 206,186 $ ( 126,336 ) $ 185 $ 80,058 Long term incentive program charges — — 1,148 — — 1,148 Issuance of unvested legally outstanding shares 719,547 — — — — — Forfeiture of unvested restricted stock ( 2,630 ) — — — — — Dividends — — — ( 5,765 ) — ( 5,765 ) Vesting of restricted stock awards — — 1 ( 1 ) — — Vesting of restricted stock units 100,333 — 1 ( 1 ) — — Issuance of common stock for acquisition 134,915 — 1,190 — — 1,190 Post-combination compensation charge-shares — — 893 — — 893 Issuance of common stock for settlement of other liability — — 342 — — 342 Share-based accounting charge — — 7,394 — — 7,394 Foreign currency translation gain — — — — 1,520 1,520 Net loss — — — ( 5,730 ) — ( 5,730 ) Balance as of June 30, 2025 24,906,408 $ 23 $ 217,155 $ ( 137,833 ) $ 1,705 $ 81,050 The accompanying notes to the consolidated financial statements are an integral part of these statements 5 PUBLIC POLICY HOLDING COMPANY, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Amounts in thousands) Six months ended June 30, 2026 2025 Cash Flows from Operating Activities: Net loss $ ( 15,230 ) $ ( 16,346 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation 98 93 Amortization expense - intangibles 3,154 2,956 Amortization of right of use assets 2,490 2,247 Amortization of prepaid post-combination compensation 2,395 4,218 Accretion of other liability 2,913 3,055 Amortization of debt discount 72 95 Provision for deferred income taxes ( 4,613 ) ( 1,388 ) Share-based accounting charge 14,644 14,838 Stock-based compensation 2,033 2,651 Post-combination compensation charge-shares 1,732 1,498 Change in fair value of contingent consideration 7,195 2,676 Gain on bargain purchase ( 898 ) — Expected credit losses 1,371 1,021 Decrease in: Contract and unbilled receivables ( 10,267 ) ( 7,899 ) Prepaid post-combination expense ( 9,566 ) ( 10,306 ) Prepaid expenses and other assets ( 1,767 ) ( 1,578 ) Increase (decrease) in: Accounts payable and accrued expenses ( 6,315 ) ( 4,169 ) Income taxes payable and receivable 4,687 5,594 Deferred revenue 2,939 3,362 Contingent consideration ( 1,447 ) ( 3 ) Operating lease liability ( 2,146 ) ( 2,511 ) Other liabilities ( 2,804 ) ( 1,722 ) Transactions with members and related parties 280 1,340 Net Cash Used in Operating Activities ( 9,050 ) ( 278 ) Cash Flows from Investing Activities: Purchases of property and equipment ( 632 ) ( 93 ) Proceeds received for notes receivable - related parties 400 — Cash paid for acquisitions, net of cash acquired ( 611 ) ( 18,522 ) Net Cash Used in Investing Activities ( 843 ) ( 18,615 ) Cash Flows from Financing Activities: Proceeds from initial public offering, net of underwriting fees of $ 3.0 million 42,866 — Proceeds from notes payable — 24,000 Payment of debt issuance costs — ( 82 ) Payment of deferred equity offering costs ( 4,151 ) — Principal payment of note payable ( 4,909 ) ( 4,040 ) Payment of contingent considerations ( 306 ) — Dividends paid ( 7,041 ) ( 5,765 ) Net Cash Provided by Financing Activities 26,459 14,113 Effect of foreign exchange rate changes on cash and cash equivalents ( 79 ) 36 Net Change in Cash and Cash Equivalents 16,487 ( 4,744 ) Cash and Cash Equivalents as of Beginning of Period 20,436 14,536 Cash and Cash Equivalents at the End of Period $ 36,923 $ 9,792 The accompanying notes to the consolidated financial statements are an integral part of these statements CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Amounts in thousands) Six months ended June 30, 2026 2025 Supplemental disclosure of cash flow information: Cash paid for interest $ 1,454 $ 1,392 Cash paid for income taxes 3,018 2,412 Common stock received for repayment of note receivable with Alpine Group — 532 Right of use assets obtained with lease liabilities 11,270 2,067 Contingent consideration issued for acquisitions — 2,483 Common stock issued for acquisitions — 1,190 Stock issued for settlement of other liability 1,211 342 Stock issued for settlement of contingent consideration 1,727 — The accompanying notes to the consolidated financial statements are an integral part of these statements 6 Table of Contents PUBLIC POLICY HOLDING COMPANY, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Amounts in thousands, except share and per share data) NOTE 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared by Public Policy Holding Company, Inc. ("PPHC", "the Company", "we", "us", and "our") in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and Article 10 of Regulation S-X of the Securities and Exchange Commission (the "SEC"). Accordingly, certain information and footnote disclosures have been condensed or omitted. All intercompany balances and transactions have been eliminated. In our opinion, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation, in all material respects, of the information contained herein. These unaudited condensed consolidated financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2025 ("2025 Form 10-K"). Results for the interim periods are not necessarily indicative of results that may be expected for the year. 2026 U.S. Initial Public Offering On January 26, 2026, we completed our U.S. initial public offering (“2026 U.S. IPO”) of 4,150,000 shares of common stock. The offering comprised 3,400,000 newly issued shares of common stock sold by the Company and 750,000 shares of existing common stock sold by certain shareholders, at a price of $ 12.25 per share. On March 2, 2026, the Company announced the issuance of 342,500 additional shares of common stock, pursuant to the partial exercise of the over-allotment option granted to the underwriters in connection with the Company's 2026 U.S. IPO and admission to the Nasdaq Global Market. We received net proceeds from the 2026 U.S. IPO of $ 35.8 million after deducting underwriting discounts and offering fees. Use of Estimates The preparation of the condensed consolidated financial statements in accordance with GAAP requires the Company’s management to make estimates and assumptions relating to the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting periods. Significant items subject to such estimates and assumptions include, but are not limited to, the allowance for credit losses, useful lives of intangible assets, recoverability of the carrying amounts of intangible assets, share-based compensation, business acquisitions, valuation of contingent considerations, post-combination liabilities and income tax provisions. These estimates are often based on complex judgments and assumptions that management believes to be reasonable but are inherently uncertain and unpredictable. Actual results could differ from these estimates. Unless otherwise noted, dollars in tables are in thousands, except per share amounts. Certain monetary amounts, percentages, and other figures included elsewhere in this Form 10-Q have been subject to rounding adjustments. Accordingly, figures shown as totals in certain tables or charts may not be the arithmetic aggregation of the figures that precede them, and figures expressed as percentages in the text may not total 100% or, as applicable, when aggregated may not be the arithmetic aggregation of the percentages that precede them. Significant Accounting Policies There have been no material changes to the significant accounting policies discussed in Note 1 - Organization And Significant Accounting Policies included in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2025. New Accounting Pronouncements Recently Adopted Accounting Pronouncements 7 Table of Contents PUBLIC POLICY HOLDING COMPANY, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Amounts in thousands, except share and per share data) In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which expands annual disclosures in an entity’s income tax rate reconciliation table and requires annual disclosures regarding cash taxes paid both in the United States (federal, state and local) and foreign jurisdictions. The amendments in this ASU are effective for annual periods beginning after December 15, 2024, although early adoption is permitted. The Company has adopted ASU 2023-09 for the year ended December 31, 2025, and has applied the new disclosure requirements prospectively to the current annual period. See Note 8. Income Taxes, in the accompanying notes to the consolidated financial statements for further details. In June 2024, the FASB issued ASU 2024-01, Compensation - Stock Compensation (Topic 718), which provides guidance on the scope application of profits interest and similar awards. This guidance is effective for public business entities for annual reporting periods beginning after December 15, 2024, and interim reporting periods beginning after December 15, 2025. The Company has determined that there is no impact of this guidance on its consolidated financial statement disclosures, as the Company's stock compensation does not allow for profits interest and similar awards. Recently Issued Accounting Pronouncements Not Yet Adopted In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This guidance requires public companies to disclose, in the notes to financial statements, specified information about certain costs and expenses at each interim and annual reporting period. This guidance is effective for public business entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. The Company expects to adopt this guidance in its fiscal year beginning January 1, 2027, and is evaluating the potential impact of this guidance on its consolidated financial statement disclosures. In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, which clarifies the guidance in Topic 270 to improve the consistency of interim financial reporting. The ASU provides a comprehensive list of required interim disclosures and introduces a disclosure principle requiring entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. ASU 2025-11 is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years, with early adoption permitted. The Company is evaluating the potential impact of this guidance on its consolidated financial statement disclosures. NOTE 2. REVENUE Revenue recognition: The Company generates the majority of its revenue by providing consulting services through fixed-fee arrangements related to Government Relations Consulting, Corporate Communications & Public Affairs Consulting and Compliance and Insights Services. Types of Contract Arrangements: Most of the consulting service contracts are based on one of the following types of contract arrangements: 1) Fixed-fee arrangements (“Retainer Revenue” and “Subscription Services Revenue”): these require the client to pay a fixed fee in exchange for a predetermined set of professional services. Retainer contracts generally comprise of a single stand-ready performance obligation for consulting services. The Company recognizes retainer revenue over time by measuring the progress toward complete satisfaction of the performance obligation. Subscription services generally comprise of a single performance obligation recognized over time with a straight-line pattern. The Company’s standard practice for retainer revenue is to enter into agreements with clients that stipulate a fixed monthly fee, payable at the beginning of each month, for the services to be rendered. These agreements may also include provisions for the reimbursement of pre-approved, reasonable expenses incurred in fulfilling the performance obligations. Member companies typically invoice clients in advance, and the amounts billed are initially recorded as deferred revenue. Revenue is then recognized from deferred revenue as performance obligations are achieved. A significant portion of the Company’s contracts with customers have termination clauses that give the customer the right to terminate the contract without cause with one month's notice without any substantial penalty. As such, the Company believes such contracts should be treated as a month-to-month contract as this reflects the non-cancelable period 8 Table of Contents PUBLIC POLICY HOLDING COMPANY, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Amounts in thousands, except share and per share data) of performance. The parties do not have enforceable rights and obligations beyond the month (or months) of services already performed. The Company's contracts generally do not contain a material right. 2) Project Revenue includes additional services such as 1) advertisement placement and management, 2) video production, 3) website development and 4) research services, in which third-party companies may be engaged to achieve specific business objectives. These services are either in a separate contract or within the fixed-fee consulting contract, in which the Company usually receives a markup on the cost incurred. Generally, these contracts are less than 12 months in length. The Company recognizes revenue earned to date in an amount that is probable and not likely to reverse. The Company utilizes an output method to measure progress toward complete satisfaction of the performance obligation, recognizing revenue based on the services delivered to the customer to date as a proportion of the total services promised in the contract. This approach reflects the transfer of control to the customer, as the customer receives and consumes the benefits of each service as it is performed. Any out-of-pocket administrative expenses incurred are billed at cost. Revenue is recognized when control of services provided is transferred to customers and in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services, using the following steps: 1) identify the contract, 2) identify the performance obligations, 3) determine the transaction price, 4) allocate the transaction price to the performance obligations in the contract, and 5) recognize revenue as or when the Company satisfies the performance obligations. In determining the method and amount of revenue to recognize, the Company must make judgments and estimates. Specifically, complex arrangements with nonstandard terms and conditions may require management's judgment in interpreting the contract to determine the appropriate accounting, including whether the promised services specified in an arrangement are distinct performance obligations and should be accounted for separately, and how to allocate the transaction price, including any variable consideration, to the separate performance obligations. When a contract contains multiple performance obligations, the Company allocates the transaction price to each performance obligation based on its estimate of the stand-alone selling price. Other judgments include determining whether performance obligations are satisfied over time or at a point in time, and the selection of the method to measure progress towards completion. The Company has considered the guidance of combining contracts in accordance with ASC 606-10-25-9, Combining Contracts. The Company has noted that its customers occasionally execute multiple orders for services, add-ons and professional services within a short period of time. The Company evaluates multiple orders to determine if the services across multiple orders relate directly to the same retainer service or project and will combine contracts if deemed to be related, as they are packaged within a single commercial objective. For any contracts that meet one or more of the requirements of ASC 606-10-25-9, the Company will account for the contracts as a single contract. The majority of contracts entered into with customers are entered into with multiple commercial objectives, and the consideration of one contract is determined independently from the price or performance of other contracts. Certain services provided by the Company include the utilization of a third party in the delivery of those services. These services are primarily related to the production of an advertising campaign or media buying services. The Company has determined that it acts as an agent and is solely arranging for the third parties to provide services to the customer. Specifically, the Company does not control the specified services before transferring those services to the customer, is not primarily responsible for the performance of the third-party services, nor can the Company redirect those services to fulfill any other contracts. The Company does not have discretion in establishing the third-party pricing in its contracts with customers. For these performance obligations for which the Company acts as an agent, the Company records revenue as the net amount of the gross billings less amounts remitted to the third party. The following table provides disaggregated revenue by revenue type: Three months ended June 30, Six months ended June 30, 2026 2025 2026 2025 Government Relations Consulting revenue $ 30,369 $ 27,301 $ 58,727 $ 53,465 Corporate Communications & Public Affairs Consulting revenue 18,166 18,144 36,459 28,156 Compliance and Insights Services revenue 3,608 3,143 7,080 6,277 Total revenue $ 52,143 $ 48,588 $ 102,266 $ 87,899 9 Table of Contents PUBLIC POLICY HOLDING COMPANY, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Amounts in thousands, except share and per share data) Revenue by geographic region: Three months ended June 30, Six months ended June 30, 2026 2025 2026 2025 United States $ 48,139 $ 46,298 $ 95,492 $ 84,002 International 4,003 2,290 6,774 3,897 Revenue by geographic market $ 52,143 $ 48,588 $ 102,266 $ 87,899 NOTE 3. BASIC AND DILUTED EARNINGS (LOSS) PER SHARE The Company presents both basic and diluted earnings per share on the face of the consolidated statements of operations and other comprehensive loss. Basic earnings (loss) per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of outstanding shares during the period. Diluted earnings (loss) per share gives effect to all dilutive potential common shares outstanding during the period. Due to their anti-dilutive effect, the calculation of diluted net loss per share for the three and six months ended June 30, 2026 and the year ended December 31, 2025, does not include the common stock equivalent shares and nonvested shares. The Company’s weighted average shares utilized for its calculation of earnings (loss) per share included the common shares outstanding and 181,822 RSUs that were fully vested on June 30, 2026 as there were no remaining contingencies for these shares to be issued as of June 30, 2026. There were no such RSUs as of June 30, 2025. The following table includes the number of shares outstanding and potentially dilutive stock options and Restricted Stock Units ("RSU's") as of June 30, 2026, and December 31, 2025, respectively: June 30, 2026 December 31, 2025 Common shares outstanding 25,269,937 20,821,959 Nonvested shares outstanding 4,625,352 4,352,533 Legally outstanding shares 29,895,289 25,174,492 Stock options and RSUs outstanding (1)(2) 2,123,025 1,693,734 Total fully diluted shares 32,018,314 26,868,226 (1) The holders of Restricted Stock Units and Stock Options are not entitled to dividends or to vote (2) Includes 181,822 RSUs that were fully vested on June 30, 2026 as there were no remaining contingencies for these shares to be issued The following table includes the weighted average shares outstanding and potentially dilutive stock options and RSUs for the three and six months ended June 30, 2026 and 2025, respectively: Three months ended Six months ended June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025 Common shares, weighted average 24,951,184 17,183,129 24,130,718 17,044,164 Nonvested shares, weighted average 4,482,734 7,404,992 4,396,374 7,240,670 Legally outstanding shares, weighted average 29,433,918 24,588,121 28,527,092 24,284,834 Stock options and RSUs outstanding, weighted average 1,802,829 1,584,707 1,743,974 1,553,948 Total securities on a fully diluted basis, weighted average 31,236,747 26,172,828 30,271,066 25,838,782 The following table shows the computation of basic and diluted loss per share for the three and six months ended June 30, 2026 and 2025, respectively: 10 Table of Contents PUBLIC POLICY HOLDING COMPANY, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Amounts in thousands, except share and per share data) Three months ended Six months ended June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025 Numerator Net loss $ ( 3,734 ) $ ( 5,730 ) $ ( 15,230 ) $ ( 16,346 ) Less unvested common stock dividends under the two - class method ( 1,082 ) ( 1,748 ) ( 1,082 ) ( 1,748 ) Net loss attributable to common shareholders ( 4,816 ) ( 7,478 ) ( 16,312 ) ( 18,094 ) Denominator Weighted average basic and diluted shares outstanding 24,951,184 17,183,129 24,130,718 17,044,164 Basic and diluted loss per share $ ( 0.19 ) $ ( 0.44 ) $ ( 0.68 ) $ ( 1.06 ) NOTE 4. GOODWILL AND INTANGIBLE ASSETS Goodwill Goodwill is an indefinite lived asset with balances as follows: As of December 31, 2024 $ 64,308 Impairment ( 6,219 ) Other adjustment ( 2,527 ) Foreign currency translation 1,428 As of December 31, 2025 $ 56,990 Additions 346 Foreign currency translation ( 183 ) As of June 30, 2026 $ 57,153 We monitor our reporting units for indicators of impairment throughout the year to determine if a change in facts or circumstances warrants a re-evaluation of our goodwill. No goodwill impairment charges were recognized for the three and six months ended June 30, 2026. We incurred a non-cash impairment charge of $ 6.2 million in 2025 related to our Pagefield Communications Limited (“Pagefield”) Government Relations Consulting reporting unit and Pagefield Corporate Communications & Public Affairs reporting unit. There was no goodwill impairment for the three and six months ended June 30, 2025. Intangible assets We did not recognize any impairment charges on indefinite-lived intangible assets during the three and six months ended June 30, 2026. We incurred non-cash impairment charges of $ 0.3 million and $ 2.6 million respectively, within our Pagefield Government Relations Consulting and Pagefield Corporate Communications & Public Affairs Consulting reporting units in 2025. The Company has not recorded any impairment charges related to long-lived assets for the three and six months ended June 30, 2025. 11 Table of Contents PUBLIC POLICY HOLDING COMPANY, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Amounts in thousands, except share and per share data) The following presents the Company’s gross and net amounts of intangible assets, other than goodwill, as reported on the Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025: June 30, 2026 Weighted Average Useful Life (in Years) Gross Book Value Accumulated Amortization Net Book Value Customer relationships 7.1 $ 41,319 $ ( 22,780 ) $ 18,539 Developed technology 7.0 3,938 ( 1,875 ) 2,063 Noncompete agreements 4.8 3,531 ( 1,658 ) 1,873 Total definite lived assets 48,788 ( 26,313 ) 22,475 Trade names 12,527 12,527 Total intangible assets $ 61,315 $ ( 26,313 ) $ 35,002 December 31, 2025 Weighted Average Useful Life (in Years) Gross Book Value Accumulated Amortization Net Book Value Customer relationships 7.1 $ 40,760 $ ( 20,283 ) $ 20,477 Developed technology 7.0 3,938 ( 1,594 ) 2,344 Noncompete agreements 4.7 3,111 ( 1,309 ) 1,802 Total definite lived assets 47,809 ( 23,186 ) 24,623 Trade names 12,490 — 12,490 Total intangible assets 60,299 $ ( 23,186 ) $ 37,113 Amortization expense for customer relationships, noncompete agreement and developed technology assets was approximately $ 1.6 million, $ 3.2 million, $ 1.7 million, and $ 3.0 million for the three and six months ended June 30, 2026 and 2025, respectively. NOTE 5. LEASES The Company leases office space and equipment under non-cancelable operating leases, which may include renewal or termination options that are reasonably certain of exercise. Most leases include one or more options to renew, and the exercise of lease renewal options is at the Company’s sole discretion. Certain of the Company’s lease agreements include rental payments that are adjusted periodically for inflation. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company also subleases office space to third parties under separate sublease agreements, which are generally month-to-month leases. In accordance with ASC 842 - Leases , the Company uses its incremental borrowing rate on the commencement date to determine the present value of its lease payments. The discount rate used to measure the lease asset, and the liability is determined at the beginning of the lease term, using the rate implicit in the lease if readily determinable, or otherwise using the Company's collateralized credit-adjusted borrowing rate. The following table presents lease costs and other quantitative information: 12 Table of Contents PUBLIC POLICY HOLDING COMPANY, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Amounts in thousands, except share and per share data) Three months ended June 30, Six months ended June 30, 2026 2025 2026 2025 Operating lease cost (cost resulting from lease payments) $ 1,760 $ 1,474 $ 3,247 $ 2,807 Variable lease cost (cost excluded from lease payments) 146 138 244 221 Sublease income ( 114 ) ( 98 ) ( 217 ) ( 176 ) Net lease cost $ 1,792 $ 1,514 $ 3,274 $ 2,852 Cash paid for amounts included in the measurement of lease liabilities $ 1,390 $ 1,609 $ 2,760 $ 3,071 Weighted average lease term - operating leases 5.9 years 4.1 years 5.9 years 4.1 years Weighted average discount rate - operating leases 6.2 % 5.3 % 6.2 % 5.3 % As of June 30, 2026, the current and long term operating lease liabilities are $ 5.3 million and $ 24.8 million, respectively. Future payments of operating leases as of June 30, 2026 are listed in the table below: Year Amount 2026 (Excluding the six months ended June 30, 2026) $ 3,193 2027 6,534 2028 7,234 2029 5,574 2030 3,871 Thereafter 10,515 Total future minimum lease payments 36,921 Amount representing interest ( 6,818 ) Present value of net future minimum lease payments $ 30,103 NOTE 6. NOTES PAYABLE On February 28, 2023, PPHC entered into a $ 17.0 million credit agreement with Bank of America (as amended, the “Credit Agreement”), providing for a senior secured line of credit of up to $ 3.0 million (the “2023 Facility 1”) and a senior secured term loan of $ 14.0 million (the “2023 Facility 2,” and, together with the 2023 Facility 1, the “2023 Facilities”). In April 2024 and June 2024, we executed two separate amendments to our Credit Agreement. These amendments provided for two additional term loans: a $ 6.0 million facility (“2024 Term Loan A”) and a $ 19.0 million facility (“2024 Term Loan B”). Collectively, these loans, are referred to as the “2024 Term Loans.” In January 2025, we entered into a third amendment to our Credit Agreement, which established an additional term loan facility of up to $ 24.0 million (the “2025 Term Loan C”). The 2025 Term Loan C, together with the 2023 Facilities and the 2024 Term Loans, are collectively referred to as the “Bank Credit Facilities.” The interest rate applicable to the 2023 Facilities is the Secured Overnight Financing Rate (“SOFR”), as administered by the Federal Reserve Bank of New York, plus 2.25 % per annum. The 2024 Term Loans and the 2025 Term Loan C each bear interest at SOFR plus 2.60 % per annum. Interest on all Bank Credit Facilities is payable monthly. The Bank Credit Facilities are collateralized by substantially all of our assets. The 2023 Facility 2 loan matures on March 31, 2029, with monthly principal payments of $ 0.2 million plus interest. The 2024 Term Loans require monthly principal payments of $ 0.3 million plus interest until their maturity date of April 30, 2028. The 2025 Term Loan C required monthly principal payments of $ 0.2 million per month plus interest through March 1, 2026, increasing to $ 0.3 million per month plus interest through the maturity date of March 31, 2029. 13 Table of Contents PUBLIC POLICY HOLDING COMPANY, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Amounts in thousands, except share and per share data) The Company's total debt consists of the following as of: Original Loan Amount June 30, 2026 December 31, 2025 2023 Facility 2 $ 14,000 $ 2,567 $ 4,083 2024 Term Loan A 6,000 4,500 4,950 2024 Term Loan B 19,000 14,250 15,675 2025 Term Loan C 24,000 20,909 22,407 Total Bank Credit Facilities 63,000 42,226 47,115 Other debt — 106 124 Less: unamortized debt issuance costs 748 179 251 Total debt, net of unamortized issuance costs $ 62,252 42,153 46,988 Less: current portion ( 9,867 ) ( 9,082 ) Total debt, long-term $ 32,286 $ 37,906 As of June 30, 2026, the future principal maturities of the Bank Credit Facilities are as follows: 2023 Facility 2 2024 Term Loan A 2024 Term Loan B 2025 Term Loan C Total 2026 (excluding the six months ended June 30, 2026) $ 1,050 $ 450 $ 1,425 $ 1,800 $ 4,725 2027 1,517 900 2,850 3,600 8,867 2028 — 3,150 9,975 3,600 16,725 2029 — — — 11,909 11,909 Total $ 2,567 $ 4,500 $ 14,250 $ 20,909 $ 42,226 Total approximate interest expense incurred was as follows: Three months ended June 30, Six months ended June 30, 2026 2025 2026 2025 Cash interest on Bank Credit Facilities $ 702 $ 801 $ 1,450 $ 1,378 Cash interest on other debt 2 7 5 14 Debt discount amortization 21 57 72 108 Total interest expense $ 725 $ 865 $ 1,527 $ 1,500 The Credit Agreement and Amended Credit Agreements for the Bank Credit Facilities contain certain non-financial and financial covenants with which the Company is required to comply. The Company must submit a compliance certificate to the bank on a quarterly basis. The financial covenants include a total leverage ratio and fixed coverage ratio. The Company was in compliance with all covenants as of June 30, 2026 and December 31, 2025. NOTE 7. SEGMENT REPORTING The Company has determined that its business is conducted across three reportable segments as of June 30, 2026, as follows: Government Relations Consulting, Corporate Communications & Public Affairs Consulting and Compliance and Insights Services. • Government Relations Consulting services (also commonly referred to as “lobbying”) include advocacy, strategic guidance, political intelligence and issue monitoring at the U.S. federal and state levels, and in the United Kingdom through our offices in London; • Corporate Communications & Public Affairs Consulting services include policy communications, crisis communications, financial communications and investor relations, litigation support, community relations, social and digital media, public opinion research, branding and messaging, and relationship marketing, across the United States and internationally through our offices in London, Shanghai, Abu Dhabi, and Dubai; and 14 Table of Contents PUBLIC POLICY HOLDING COMPANY, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Amounts in thousands, except share and per share data) • Compliance and Insights Services include lobbying compliance services and legislative tracking. The Chief Operating Decision Maker ("CODM"), who is the Company's Chief Executive Officer, utilizes segment revenues, significant expenses consisting of staff costs and non-staff costs by segment and Adjusted Pre-Bonus EBITDA by segment (as described in the MD&A) to evaluate the Company’s financial performance, allocate resources, and make key operating decisions. The CODM is not regularly provided asset information on a segment basis, as it is not used to allocate resources or assess performance for each segment. Therefore, total segment assets have not been disclosed. In addition, for the three and six months ended June 30, 2026 and 2025, revenues in each of the three segments were primarily attributable the United States operations, as there were no other countries from which the Company derived segment revenues that exceeded 10% of that segment's total. The following tables present key segment information and a reconciliation to the consolidated net loss after income taxes for each of the three and six months ended June 30, 2026, and 2025. Three months ended June 30, 2026 Government Relations Consulting Corporate Communications & Public Affairs Consulting Compliance and Insights Services Total Revenue $ 30,369 $ 18,166 $ 3,608 $ 52,143 Costs and expenses: Staff costs 13,143 10,886 1,530 25,560 Non-staff costs 2,713 3,014 265 5,992 Segment Adjusted Pre-Bonus EBITDA 14,513 4,265 1,813 20,592 Reconciliation to net loss before income taxes: Unallocated bonuses ( 4,039 ) Unallocated corporate level expenses ( 5,317 ) Depreciation ( 56 ) Share-based accounting charge ( 7,362 ) Post-combination compensation charges ( 4,191 ) Long term incentive program charges ( 1,070 ) Change in contingent consideration ( 892 ) Amortization of intangibles ( 1,551 ) Loss from operations ( 3,886 ) Gain on bargain purchase 846 Interest, net ( 470 ) Other expense 128 Net loss before income taxes ( 3,382 ) Income tax expense 352 Net loss after income taxes $ ( 3,734 ) 15 Table of Contents PUBLIC POLICY HOLDING COMPANY, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Amounts in thousands, except share and per share data) Three months ended June 30, 2025 Government Relations Consulting Corporate Communications & Public Affairs Consulting Compliance and Insights Services Total Revenue $ 27,301 $ 18,144 $ 3,143 $ 48,588 Costs and expenses: Staff costs 12,297 10,408 1,264 23,969 Non-staff costs 2,259 2,731 147 5,137 Segment Adjusted Pre-Bonus EBITDA 12,745 5,005 1,732 19,482 Reconciliation to net loss before income taxes: Unallocated bonuses ( 3,745 ) Unallocated corporate level expenses ( 2,964 ) Depreciation ( 53 ) Share-based accounting charge ( 7,394 ) Post-combination compensation charges ( 5,336 ) Long term incentive program charges ( 1,528 ) Change in contingent consideration ( 1,693 ) Amortization of intangibles ( 1,665 ) Loss from operations ( 4,896 ) Gain on bargain purchase - Interest, net ( 836 ) Other income, net ( 22 ) Net loss before income taxes ( 5,754 ) Income tax benefit ( 24 ) Net loss after income taxes $ ( 5,730 ) 16 Table of Contents PUBLIC POLICY HOLDING COMPANY, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Amounts in thousands, except share and per share data) Six months ended June 30, 2026 Government Relations Consulting Corporate Communications & Public Affairs Consulting Compliance and Insights Services Total Revenue $ 58,727 $ 36,459 $ 7,080 $ 102,266 Costs and expenses: Staff costs by segment 26,046 21,866 3,004 50,916 Non-staff costs by segment 5,272 5,535 518 11,325 Segment Adjusted Pre-Bonus EBITDA $ 27,409 $ 9,058 $ 3,558 40,025 Reconciliation to net loss before income taxes: Unallocated bonuses ( 7,928 ) Unallocated corporate level expenses ( 10,006 ) Depreciation ( 98 ) Share-based accounting charge ( 14,644 ) Post-combination compensation charges ( 7,037 ) Long term incentive program charges ( 2,033 ) Change in contingent consideration ( 7,195 ) Amortization of intangibles ( 3,154 ) Loss from operations ( 12,070 ) Gain on bargain purchase 898 Interest, net ( 1,260 ) Other income (expense), net 294 Net loss before income taxes ( 12,138 ) Income tax expense 3,092 Net loss after income taxes $ ( 15,230 ) 17 Table of Contents PUBLIC POLICY HOLDING COMPANY, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Amounts in thousands, except share and per share data) Six months ended June 30, 2025 Government Relations Consulting Corporate Communications & Public Affairs Consulting Compliance and Insights Services Total Revenue $ 53,465 $ 28,156 $ 6,277 $ 87,899 Costs and expenses: Staff costs by segment 24,898 16,728 2,586 44,212 Non-staff costs by segment 4,325 4,186 286 8,797 Segment Adjusted Pre-Bonus EBITDA $ 24,242 $ 7,242 $ 3,405 34,889 Reconciliation to net loss before income taxes: Unallocated bonuses ( 6,883 ) Unallocated corporate level expenses ( 6,814 ) Depreciation ( 93 ) Share-based accounting charge ( 14,838 ) Post-combination compensation charges ( 8,776 ) Long term incentive program charges ( 2,651 ) Change in contingent consideration ( 2,676 ) Amortization of intangibles ( 2,956 ) Loss from operations ( 10,798 ) Gain on bargain purchase — Interest, net ( 1,438 ) Other income, net ( 22 ) Net loss before income taxes ( 12,258 ) Income tax expense 4,088 Net loss after income taxes $ ( 16,346 ) NOTE 8. INCOME TAXES The Company uses the asset and liability method of accounting for income taxes. Deferred tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that such tax rate changes are enacted. The measurement of a deferred tax asset is reduced, if necessary, by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized. As of June 30, 2026, and June 30, 2025, no material valuation allowance has been recorded against the Company’s deferred tax assets. The Company applies a recognition threshold and measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For a tax benefit to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company has not identified any uncertain income tax positions that could have a material impact on the condensed consolidated financial statements. The Company recognizes interest and penalties accrued on any unrecognized tax exposures as a component of income tax expense; the Company did not have any such amounts accrued as of June 30, 2026, and December 31, 2025. Tax years from 2022 to 2025 remain subject to examination. For interim periods, the Company recognizes an income tax expense or benefit based on an estimated annual effective tax rate ("EAETR"), calculated on a worldwide consolidated basis, expected for the full fiscal year. The EAETR is based on the statutory tax rates then in effect and adjusted for estimated permanent differences. Discrete items, when material, are excluded from the EAETR and are recognized in the interim period in which they occur. These changes in permanent differences and discrete items result in variances to the effective tax rate from period to period. The Company’s EAETR changes throughout the year as on-going estimates of pre-tax income, and changes in permanent differences are revised. 18 Table of Contents PUBLIC POLICY HOLDING COMPANY, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Amounts in thousands, except share and per share data) For the three and six months ended June 30, 2026, the Company recognized an income tax expense of approximately $ 0.4 million and $ 3.1 million on a net loss before income taxes of $ 3.4 million and $ 12.1 million, respectively. Income tax expense for the six month period included a discrete tax benefit of approximately $ 1.7 million related to a one‑time transaction that resulted in the recognition of a deferred tax asset. This discrete benefit was recognized in the period incurred and was excluded from the Company’s estimated annual effective tax rate. The Company’s effective tax rate for the three months ended June 30, 2026, was ( 10.4 )%, The Company’s effective tax rate for the six months ended June 30, 2026, was ( 25.5 )%, which was significantly impacted by the discrete item described above. For the three and six months ended June 30, 2025, the Company recognized an income tax expense (benefit) of approximately less than $(0.1) million and $ 4.1 million on a net loss before income taxes of $ 5.8 million and $ 12.3 million, respectively. The effective tax rate for the three and six months ended June 30, 2025 was 0.4 % and ( 33.5 )%, respectively. The effective tax rates for the periods differed from the federal statutory rate of 21% primarily due to state taxes, GAAP compensation incurred that is not deductible for tax purposes, as well as other items related to prior periods’ business combinations that generate permanent book/tax differences. The Company does not expect that any law changes enacted during the period will have a material impact on the provision for income taxes. NOTE 9. FAIR VALUE MEASUREMENT The following table presents a summary of the Company’s liabilities that are measured at fair value on a recurring basis by their respective fair value hierarchy level as of June 30, 2026: Level 1 Level 2 Level 3 Other liabilities $ — $ — $ 10,928 Contingent consideration — — 16,699 Total liabilities $ — $ — $ 27,627 The following table presents a summary of the Company’s liabilities that are measured at fair value on a recurring basis by their respective fair value hierarchy level as of December 31, 2025: Level 1 Level 2 Level 3 Other liabilities $ — $ — $ 12,030 Contingent consideration — — 12,998 Total liabilities $ — $ — $ 25,028 The carrying values of cash, contract receivables, and accounts payable and accrued expenses on June 30, 2026 and December 31, 2025 approximated their fair value due to the short maturity of these instruments. Financial Instruments that are Measured at Fair Value on a Recurring Basis Contingent Consideration The fair value of contingent consideration from the Company's acquisitions were measured using Level 3 inputs. The following table summarizes the change in fair value, as determined by Level 3 inputs, for the contingent consideration using the unobservable Level 3 inputs for the six months ended June 30, 2026 as follows: Balance as of December 31, 2025 $ 12,998 Cash and stock payout of contingent consideration ( 3,480 ) Change in fair value 7,195 Effect of currency translation adjustment ( 15 ) Balance as of June 30, 2026 $ 16,699 19 Table of Contents PUBLIC POLICY HOLDING COMPANY, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Amounts in thousands, except share and per share data) The following table summarizes the change in fair value, as determined by Level 3 inputs, for the contingent consideration using the unobservable Level 3 inputs for the six months ended June 30, 2025 as follows: Balance as of December 31, 2024 $ 10,896 Other adjustment ( 729 ) Change in fair value 5,159 Effect of currency translation adjustment 100 Balance as of June 30, 2025 $ 15,426 The estimated fair value of contingent consideration is calculated using Monte Carlo simulations with inputs such as expected volatility of future operating results, discount rates applicable to future results, and expected growth rates. Other Liabilities The fair value of other liabilities, comprising of post-combination compensation obligations of the Company, relates to various acquisitions. The estimated fair value of other liabilities is calculated by Monte Carlo simulations, which utilize estimates including expected volatility of future operating results, discount rates applicable to future results, and expected growth rates. The following table summarizes the change in fair value, as determined by Level 3 inputs, for the other liabilities using the Level 3 inputs for the six months ended June 30, 2026 as follows: Balance as of December 31, 2025 $ 12,030 Accretion of liability 2,913 Change in other liabilities ( 2,804 ) Stock issued for settlement of other liability ( 1,211 ) Balance as of June 30, 2026 $ 10,928 The following table summarizes the change in fair value, as determined by Level 3 inputs, for the other liabilities using the Level 3 inputs for the six months ended June 30, 2025 as follows: Balance at December 31, 2024 $ 4,880 Accretion of other liability 3,055 Change in other liabilities ( 1,722 ) Stock issued for settlement of other liability ( 342 ) Effect of currency translation adjustment 6 Other adjustment 731 Balance at June 30, 2025 $ 6,608 20 Table of Contents PUBLIC POLICY HOLDING COMPANY, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Amounts in thousands, except share and per share data) The Monte Carlo assumptions and inputs (which are Level 3 inputs) are as follows: June 30, 2026 Significant Input Weighted Average Input (1) Input Range Discount rate for credit risk and time value 4.9 % 4.7 % to 4.9 % Discount rate for future profit after tax 15.6 % 11.8 % to 19.6 % Expected volatility of future annual profit after tax 32.4 % 31.0 % to 35.0 % Discount Rate Applicable to Future Annual EBITDA 15.5 % 15.0 % to 16.0 % Expected Volatility of Future Annual EBITDA 32.5 % 32.0 % to 33.0 % Expected Volatility of Future Annual Revenue 9.8 % 9.7 % to 10.1 % Discount Rate Applicable to Future Annual Revenue 11.8 % 8.0 % to 12.5 % Forecasted growth rate 8.9 % ( 20.1 )% to 31.6 % June 30, 2025 Significant Input Weighted Average Input (1) Input Range Discount rate for credit risk and time value 5.5 % 5.2 % to 5.9 % Discount rate for future profit after tax 15.9 % 11.7 % to 21.4 % Expected volatility of future annual profit after tax 31.5 % 30.0 % to 34.0 % Discount Rate Applicable to Future Annual EBITDA 15.4 % 14.9 % to 16.2 % Expected Volatility of Future Annual EBITDA 33.7 % 30.0 % to 35.0 % Forecasted growth rate 13.4 % 3.9 % to 55.6 % (1) The weighted average is calculated using the estimated fair values Financial Instruments Not Measured at Fair Value on a Recurring Basis The Company's Notes Payable are subject to a variable interest rate. As a result, the carrying amount of these instruments closely approximates their fair value. Non-financial Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis Certain non-financial assets are measured at fair value on a nonrecurring basis, primarily goodwill and intangible assets, which are classified as Level 3 fair value measurements, and right-of-use lease assets, which are classified as Level 2 fair value measurements. These assets are not measured and adjusted to fair value on an ongoing basis but are subject to periodic evaluations for potential impairment. NOTE 10. CONTRACT BALANCES AND ALLOWANCE FOR EXPECTED CREDIT LOSSES The following table provides information about accounts and unbilled receivables, contract receivables and contract liabilities from contracts with customers as of: June 30, 2026 December 31, 2025 Contract receivable $ 32,632 $ 23,831 Unbilled receivables 1,185 512 Allowance for expected credit losses ( 2,912 ) ( 2,492 ) Total contract receivables, net 30,905 21,851 Contract Liabilities / (Deferred revenue) $ ( 6,245 ) $ ( 3,310 ) Contract liabilities represent advance consideration received from customers under the terms of the Company's contracts, primarily related to retainer fees and reimbursements of third-party expenses. These amounts are generally recognized as revenue shortly after billing, as the related services are performed or expenses are incurred. Deferred revenue totaled $ 6.2 million as of June 30, 2026, and $ 3.3 million as of December 31, 2025. The Company expects that these amounts will be recognized as revenue within one year of the respective balance sheet dates. 21 Table of Contents PUBLIC POLICY HOLDING COMPANY, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Amounts in thousands, except share and per share data) The following table summarizes information about the activity in the allowance for expected credit losses as follows: Balance as of December 31, 2024 $ 1,102 Provision for expected credit losses 2,353 (Write-off)/Recoveries ( 963 ) Balance as of December 31, 2025 $ 2,492 Provision for expected credit losses 1,371 (Write-off)/Recoveries ( 950 ) Balance as of June 30, 2026 $ 2,912 As of June 30, 2026 and December 31, 2025 the balance of the allowance for credit losses approximated $ 2.9 million and $ 2.5 million, respectively . NOTE 11. ACQUISITIONS Westminster Policy Partners Limited On March 20, 2026, the Company entered into a binding agreement to acquire all of the outstanding shares of Westminster Policy Partners Limited ("WPI") from the owners of WPI (“WPI Sellers”), a leading UK public affairs and economics consultancy. The acquisition was completed on April 1, 2026, for a combination of cash and shares. At the closing of the transaction, the Company paid the WPI Sellers cash in the amount of £ 3.0 million, which was approximately $ 4.0 million and issued 46,937 shares of the Company's common stock to the WPI Sellers at an aggregate fair value of approximately $ 0.6 million. The purchase included WPI's cash balance of approximately £ 1.0 million, which was approximately $ 1.4 million, at closing. In addition, there are additional contingent payments that the WPI Sellers can earn in the future depending on certain operating results that are achieved. The total additional amount of consideration that the Company could be required to pay to the WPI Sellers is £ 6.0 million. No contingent consideration was recorded in connection with the acquisition, as all future payments are linked to future employment. Although the Company remitted the funds to the Seller on March 31 2026, the effective date of the transaction was April 1, 2026. Reasons for the acquisition The Company acquired WPI to expand the Company's capabilities in economics-led analysis and research-driven advocacy communications, and evidence-based policy strategy. The acquisition of WPI will enhance the Company's footprint and depth in both the UK and Europe. Accounting for the acquisition The acquisition of WPI was accounted for as a business combination and reflects the application of acquisition accounting in accordance with ASC 805, Business Combinations ("ASC 805"). The acquired assets, including identifiable intangible assets and liabilities assumed, have been recorded at their estimated fair values. Purchase consideration The Company determined that certain consideration provided to the WPI Sellers does not qualify as purchase consideration in accordance with the guidance of ASC 805. The Company determined that the purchase consideration consists of the amount of cash and share payments owed to WPI Sellers that are not subject to a vesting or claw back provision that is directly linked to the continued employment of the WPI Sellers. The total purchase consideration consisted of a cash payment of approximately $ 2.0 million. Preliminary Purchase price allocation The purchase price allocation is preliminary and subject to change during its measurement period. The Company has not yet completed its evaluation and determination of (i) the acquired net working capital balance, and (ii) the final assessment of deferred tax assets. The adjustments will be recorded as soon as practical and within the measurement period. Although not expected to be significant, the adjustments may result in a change in the acquired goodwill. 22 Table of Contents PUBLIC POLICY HOLDING COMPANY, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Amounts in thousands, except share and per share data) The preliminary allocation of the purchase consideration resulted in the following amounts being allocated to the assets acquired and liabilities assumed as of the purchase date April 1, 2026, based on their respective estimated fair values is summarized below: Cash acquired $ 1,380 Contract receivable 718 Other current assets 31 Property and equipment 11 Customer relationships 350 Tradename 57 Noncompete agreements 322 Goodwill 346 Accounts payable and accrued expenses ( 1,226 ) Total preliminary purchase price $ 1,992 The fair value of the identified definite-lived intangible assets was as follows: Definite-lived Weighted average useful life intangible assets (in years) Amount Customer relationship 7.0 $ 350 Noncompete agreements 5.0 $ 322 The fair value of noncompete agreements was determined based on the difference between the projected cash flows of the business assuming the agreement is in place, and an alternative cash flow projection which assumes an adverse impact resulting from competition. The difference between these two projections effectively represents the “cost” of competition from the perspective of the acquirer. The fair value of the trade names was determined using the relief from royalty method. The fair value of customer relationships was determined using the multi-period excess earnings method. TrailRunner On January 24, 2025, the Company entered into a binding agreement ("TrailRunner Agreement") to acquire TrailRunner International LLC and its wholly-owned subsidiaries (collectively, the “TrailRunner Seller” or "TrailRunner"), a Texas headquartered global strategic communications advisory firm. At the closing of the transaction, the Company agreed to pay the TrailRunner Seller cash in the amount of approximately $ 28.2 million and issue 593,228 shares of the Company’s common stock to the TrailRunner Seller at an aggregate fair value of approximately $ 5.2 million. In addition, there are additional contingent payments that the TrailRunner Seller can earn in the future depending on certain operating results that are achieved. The total additional amount of consideration that the Company could be required to pay to the TrailRunner Seller is $ 37.0 million. Although the Company remitted the funds to the TrailRunner Seller on March 31 2025, the effective date of the transaction was April 1, 2025. Reasons for the acquisition The Company acquired TrailRunner to expand the Company's ability to provide a distinct suite of corporate communication capabilities and enhance its global footprint. TrailRunner has eight office locations across the United States, United Kingdom, Middle East, and Asia. Accounting for the acquisition The acquisition of TrailRunner was accounted for as a business combination and reflects the application of acquisition accounting in accordance with ASC 805, Business Combinations ("ASC 805"). The acquired assets, including identifiable intangible assets and liabilities assumed, have been recorded at their estimated fair values. Purchase consideration 23 Table of Contents PUBLIC POLICY HOLDING COMPANY, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Amounts in thousands, except share and per share data) The Company determined that certain consideration provided to TrailRunner does not qualify as purchase consideration in accordance with the guidance of ASC 805. The Company determined that the purchase consideration consists of the amount of cash and share payments owed to TrailRunner that are not subject to a vesting or claw back provision that is directly linked to the continued employment of the TrailRunner Seller. The total purchase consideration consisted of the following amounts: Cash paid $ 18,607 Common stock issued 1,190 Total $ 19,797 Purchase price allocation The Company recognized a bargain purchase gain of $ 1.3 million in connection with the acquisition of TrailRunner, representing the excess of the fair value of identifiable net assets acquired over the aggregate amount transferred. In accordance with ASC 805 - business combinations, the Company reassessed the identification and measurement of the assets acquired and liabilities assumed prior to recognizing the gain. The primary factors that contributed to the gain on bargain purchase recognized from the TrailRunner acquisition include the requirement for the key employees of TrailRunner to remain employees of the Company for a significant period of time. The purchase price allocation was finalized as of December 31, 2025. The allocation of the purchase consideration resulted in the following amounts being allocated to the assets acquired and liabilities assumed as of the purchase date of April 1, 2025, based on their respective estimated fair values is summarized below: Cash acquired $ 85 Contract receivable 758 Other current assets 172 Property and equipment 27 Right of use asset 1,806 Customer relationships 7,796 Tradename 2,760 Noncompete agreements 786 Deferred tax asset 9,118 Accounts payable and accrued expenses ( 372 ) Operating lease liability ( 1,806 ) Net assets acquired 21,130 Less estimated purchase price ( 19,797 ) Gain on bargain purchase $ 1,333 The fair value of the identified definite-lived intangible assets was as follows: Definite-lived Weighted average useful life intangible assets (in years) Amount Customer relationship 7.0 $ 7,796 Noncompete agreements 5.0 $ 786 The fair value of customer relationships was determined using the income approach, which requires management to estimate a number of factors for each reporting unit, including projected future operating results and discount rates. The fair value of the trade names was determined using the relief from royalty method. The fair value of noncompete agreements was determined using an income approach method, which requires management to estimate a number of factors related to 24 Table of Contents PUBLIC POLICY HOLDING COMPANY, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Amounts in thousands, except share and per share data) the expected future cash flows of TrailRunner and the potential impact and probability of competition, assuming such noncompete agreements were not in place. NOTE 12. O MNIBUS I NCENTIVE P LAN In 2021, we adopted the Public Policy Holding Company, Inc. 2021 Omnibus Incentive Plan (the "Omnibus Incentive Plan"), under which Options (both nonqualified options, and incentive stock options), stock appreciation rights, restricted stock units, restricted stock, unrestricted stock, cash-based awards and dividend equivalent rights may be issued. On September 29, 2025, our board of directors approved an amendment (the "2025 Amendment") to the Omnibus Incentive Plan, which became effective on January 26, 2026. As of June 30, 2026, the total amount of shares authorized by the Board of Directors under the Omnibus Plan was 5,719,005 , with a total of 1,615,112 shares available for issuance. During the six months ended June 30, 2026 and 2025, the Company granted 43,987 and 62,588 Options to employees, respectively. During the same periods, the Company granted 669,879 and 498,532 Restricted Stock Units ("RSUs"), respectively, as well as 302,080 and 195,588 Restricted Stock Awards ("RSAs"). The stock options have a contractual term of ten years and vest three years after their issuance. The RSUs vest over a three-year period with one-third vesting each year after the grant date. The amortization of the fair value of share-based awards is recorded as an expense in long-term incentive program charges in the statement of operations. The total long-term incentive program expense, net of forfeitures, is detailed in the following table: Three months ended June 30, Six months ended June 30, 2026 2025 2026 2025 Options $ 15 $ 106 $ 54 $ 194 RSUs 1,295 682 2,178 1,264 RSAs 708 360 1,316 869 SARs ( 948 ) 380 ( 1,515 ) 324 Total $ 1,070 $ 1,528 $ 2,033 $ 2,651 The table below represents the total expense relating to the long-term incentive program recognized in the consolidated statements of operations and comprehensive loss as follows: Three months ended June 30, Six months ended June 30, 2026 2025 2026 2025 Cost of services $ 315 $ 1,302 $ 1,031 $ 2,165 General and administrative expense 755 226 1,002 486 Total $ 1,070 $ 1,528 $ 2,033 $ 2,651 As of June 30, 2026, total unrecognized compensation expense and the applicable weighted average period for that expense to be recognized is as follows: Unrecognized compensation Weighted average period Options $ 270 0.4 years RSUs 9,931 4.9 years RSAs 3,805 1.2 years Total $ 14,006 25 Table of Contents PUBLIC POLICY HOLDING COMPANY, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Amounts in thousands, except share and per share data) Options The following summarizes the stock option activity for the three and six months ended June 30, 2026 and 2025: Number of Shares Weighted Average Exercise Price- (USD) (1) Weighted Average Exercise Price-(GBP) Weighted Average Contractual Term (in years) Outstanding as of December 31, 2025 702,002 $ 11.33 £ 8.42 6.9 Granted 43,987 10.41 7.85 9.9 Exercised — — — — Cancelled/Forfeited ( 11,078 ) 11.38 8.58 Outstanding as of June 30, 2026 734,911 11.21 8.46 6.7 Exercisable as of June 30, 2026 598,016 10.74 8.10 5.3 Vested and expected to vest as of June 30, 2026 734,911 $ 11.21 £ 8.46 6.7 Number of Shares Weighted Average Exercise Price- (USD) (1) Weighted Average Exercise Price-(GBP) Weighted Average Contractual Term (in years) Outstanding as of December 31, 2024 676,709 $ 10.75 £ 8.60 7.8 Granted 62,588 11.50 8.35 — Exercised — — — — Cancelled/Forfeited ( 23,897 ) 11.90 8.65 — Outstanding as of June 30, 2025 715,400 11.80 8.60 7.6 Exercisable as of June 30, 2025 433,392 12.15 8.85 — Vested and expected to vest as of June 30, 2025 715,400 $ 11.80 £ 8.60 7.6 (1) The applicable exercise prices have been adjusted based on the applicable exchange rate of GBP to USD at the end of each period presented. The weighted average intrinsic value of stock options was zero as of June 30, 2026. Restricted Stock Units ("RSUs") Activity in the Company's non-vested RSUs was as follows for the three and six months ended June 30, 2026 and 2025, respectively: Number of RSUs Weighted Average Grant Date Fair Value Nonvested as of December 31, 2025 991,732 $ 7.70 Granted 669,879 9.10 Vested ( 435,839 ) 7.76 Cancelled/Forfeited ( 19,480 ) 8.69 Nonvested as of June 30, 2026 1,206,292 $ 8.85 Nonvested as of December 31, 2024 869,330 7.00 Granted 498,532 8.75 Vested ( 285,804 ) 7.00 Cancelled/Forfeited ( 27,600 ) 7.60 Nonvested as of June 30, 2025 1,054,458 $ 7.65 26 Table of Contents PUBLIC POLICY HOLDING COMPANY, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Amounts in thousands, except share and per share data) Restricted Stock Awards ("RSAs") Activity in the Company's non-vested RSAs was as follows: Number of RSAs Weighted Average Grant Date Fair Value Nonvested as of December 31, 2025 408,284 $ 7.91 Granted 302,080 10.45 Vested ( 195,033 ) 9.45 Cancelled/Forfeited — — Nonvested as of June 30, 2026 515,331 $ 8.82 Nonvested as of December 31, 2024 479,491 6.15 Granted 195,588 9.45 Vested ( 134,177 ) 7.15 Cancelled/Forfeited ( 61,005 ) 5.65 Nonvested as of June 30, 2025 479,897 $ 9.30 Stock Appreciation Rights ("SARs") SARs are not issued shares or committed shares to be issued and therefore do not count against the total number of shares that can be issued under the Omnibus Plan. Upon exercise of a SAR, the Company shall pay the grantee in cash an amount equal to the excess of the fair market value of a share of stock on the effective date of exercise in excess of the exercise price of the SAR. This cash settlement feature requires the SARs to be classified as a liability and remeasured at each reporting period. The SARs vest over a three-year period with one-third vesting each year after the grant date. The fair value of each SAR granted is estimated using a Black-Scholes option-pricing model and the fair value is adjusted at each reporting period. As of June 30, 2026 and December 31, 2025, the total liability recorded was $ 0.4 million and $ 2.0 million, respectively. The fair value of the SARs was calculated as follows as of: June 30, 2026 December 31, 2025 Estimated dividend yield 3.0 % 4.0 % Expected stock price volatility 45.0 % 42.0 % Risk-free interest rate 4.1 % to 4.2 % 3.5 % to 3.6 % Expected life of instrument (in years) 1.4 to 2.8 years 1.9 to 3.3 years Weighted average fair value per share $ 1.64 $ 6.60 Activity in the Company's SARs was as follows for the year ended June 30, 2026 and year ended December 31, 2025: Number of Shares Weighted Average Exercise Price Outstanding as of December 31, 2024 341,000 $ 8.05 Granted — — Exercised — — Cancelled/Forfeited ( 30,000 ) 8.98 Outstanding as of December 31, 2025 311,000 $ 8.97 Granted — — Exercised ( 30,000 ) ( 8.85 ) Cancelled/Forfeited ( 10,000 ) ( 8.83 ) Outstanding as of June 30, 2026 271,000 8.79 Exercisable as of June 30, 2026 269,333 8.84 Vested and expected to vest as of June 30, 2026 271,000 $ 8.79 27 Table of Contents PUBLIC POLICY HOLDING COMPANY, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Amounts in thousands, except share and per share data) The amount of the future expense for all SARs issued will depend upon the value of the Company's common stock and other factors at each future reporting date. NOTE 13. SUBSEQUENT EVENTS On July 1, 2026, the Company acquired Tancredi Intelligent Communication Ltd, a strategic communications and advisory firm headquartered in London. The acquisition was paid for through a combination of cash and shares. On August 1, 2026, the Company acquired The Advocacy Partners, one of Florida’s pre-eminent government relations firms. The acquisition was paid for through a combination of cash and shares. 28