What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-07-24 compared with 2025-07-28 · 519 added, 495 removed, 728 unchanged (58% of the section changed)

2 unchanged sentences

CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm ( PCAOB ID :

Report of Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated Balance Sheets as of May 3 0 , 202 6 and May 31 , 202 5

Consolidated Statements of Operations for each of the three years in the period ended May 31 , 20 25

Consolidated Statements of Comprehensive Income (Loss) for each of the three years in the period ended May 31 , 20 25

Consolidated Statements of Stockholders’ Equity for each of the three years in the period ended May 31 , 202 5

Consolidated Statements of Cash Flows for each of the three years in the period ended May 31 , 202 5

Consolidated Statements of Operations for the years ended May 30, 2026, Ma y 31, 2025 and May 25, 2024

Consolidated Statements of Comprehensive Income (Loss) for the years ended May 30, 2026, May 31, 2025 and May 25, 2024

Consolidated Statements of Stockholders’ Equity for the years ended May 30, 2026 , Ma y 31, 2025 and May 25, 2024

Consolidated Statements of Cash Flows for the years e nded May 30, 2026, May 31, 2025 and May 25, 2024

Notes to Consolidated Financial Statements

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Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of Resources Connection, Inc.

Opinions on the Financial Statements and Internal Control Over Financial Reporting

We have audited the accompanying consolidated balance sheets of Resources Connection, Inc.

and its subsidiaries (the Company) as of May 31, 2025 and May 25, 2024, and the related consolidated statements of operations, comprehensive (loss) income, stockholders’ equity and cash flows for each of the three years in the period ended May 31, 2025, and the related notes (collectively, the financial statements).

We also have audited the Company’s internal control over financial reporting as of May 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of May 31, 2025 and May 25, 2024, and the results of its operations and its cash flows for each of the three years in the period ended May 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of May 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013.

Basis for Opinions

The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting.

Our responsibility is to express an opinion on the Company’s financial statements and an opinion on the Company’s internal control over financial reporting based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with U.S.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Resources Connection, Inc.

and its subsidiaries (the Company) as of May 30, 2026, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity and cash flows for the year in the period ended May 30, 2026, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at May 30, 2026, and the results of its operations and its cash flows for the year in the period ended May 30, 2026, in conformity with U.S.

generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of May 30, 2026, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated July 24, 2026 expressed an adverse opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates.

Revenue recognition

Description of the Matter The Company generates substantially all its revenues providing professional consulting services to its clients.

As described in Note 2 to the consolidated financial statements, revenues are recognized when control of the promised service is transferred to the Company’s clients, in an amount that reflects the consideration expected in exchange for the services rendered.

Revenues for the vast majority of the Company’s contracts are recognized over time, based on hours worked by the Company’s professionals.

The performance of the agreed-to service over time is the single performance obligation for revenues.

Auditing revenue recognition was especially challenging due to the high degree of audit effort resulting from the volume of transactions, reliance on data generated from multiple systems, and a greater degree of audit judgement needed to test the underlying data supporting management's revenue calculations.

How We Addressed the Matter in Our Audit Addressing the matter involved audit procedures that included, among others (i) evaluating the recognition of revenue transactions by testing the issuance and settlement of invoices, tracing transactions not settled to a detailed listing of accounts receivable or unbilled receivables, and testing the completeness and accuracy of data that was used in the revenue calculations;

(ii) performing data analytics to evaluate the recognition of revenue;

and (iii) testing a sample of contracts to assess whether revenue recognition terms were appropriately considered, performance obligations were properly identified, and revenue was recognized as services were rendered.

/s/ Ernst & Young LLP

We have served as the Company's auditor since 2025.

Irvine, California

July 24, 2026

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of Resources Connection, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Resources Connection, Inc.

and subsidiaries (the Company) as of May 31, 2025, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity and cash flows, for each of the two years in the period ended May 31, 2025, and the related notes (collectively, the financial statements).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of May 31, 2025, and the results of its operations and its cash flows for each of the two years in the period ended May 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

Our audits also included performing such other procedures as we considered necessary in the circumstances.

We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.

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Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matter

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of this critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

Annual and Interim Goodwill Impairment Assessments

As described in Notes 2 and 5 to the financial statements, the Company’s consolidated net goodwill balance was $28.8 million as of May 31, 2025.

The Company tests for goodwill impairment at the reporting unit level at least annually on the first day of the last quarter of the fiscal year or more frequently if facts, events or circumstances indicate that the carrying amount of goodwill may not be recoverable.

On May 26, 2024, management realigned its reporting units due to a change in organizational structure.

Reporting units under the former structure were tested for impairment prior to the realignment, and no impairment was identified.

As a result of the realignment, the Company reallocated its existing goodwill to its new reporting units which resulted from the change in its operating segments.

Goodwill was reassigned to each of the new reporting units using a relative fair value approach and reconciled to its market capitalization.

Management assessed the goodwill of the new reporting units for impairment as of May 26, 2024 and determined that there was $3.8 million of goodwill impairment in the Europe & Asia Pacific reporting unit.

During the second, third and fourth quarters of 2025, the Company experienced a sustained decline in its stock price resulting in the market capitalization being less than the carrying value of the combined reporting units.

After considering all available evidence in the evaluation of goodwill impairment indicators, management determined it appropriate to perform interim quantitative assessments of the reporting units during those periods.

As a result of these quantitative assessments performed, the Company incurred an aggregate impairment charge of $190.6 million for fiscal year 2025 in the On-Demand Talent, Consulting and Europe & Asia Pacific reporting units.

The Company’s determination of the estimated fair value for each reporting unit was based on a market-based approach, income-based approach or a combination of both approaches.

The market-based approach was based on the guideline public company method, which uses market multiples of revenue and earnings before interest, taxes, depreciation and amortization (EBITDA) for a group of comparable public companies.

The income-based approach was based on the present value of discounted cash flows of each reporting unit, using the Company’s assumptions regarding revenue growth rates, forecasted gross profit margins, forecasted earnings and free cash flows, terminal period growth rates, and other economic and market trends.

Additionally, the present value was based on applying a weighted average cost of capital, which considered long-term interest rates and cost of equity based on the reporting segment’s risk profile.

We identified the valuation of goodwill as a critical audit matter given the significant estimates and assumptions the Company makes to determine the fair value of the reporting unit including revenue growth rates, adjusted EBITDA margin and discount rates.

Auditing the reasonableness of the Company’s estimates and assumptions required a high degree of auditor judgment and an increased audit effort, including the involvement of our valuation specialists.

Our audit procedures related to the valuation of goodwill for each reporting unit included the following, among others:

• We obtained an understanding of the relevant controls related to the Company’s goodwill valuation and tested such controls for design and operating effectiveness, including management’s review of the significant assumptions used in the estimate of fair value.

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• We evaluated the reasonableness of management’s forecasts of revenue growth rates by comparing the forecasts to (1) historical results, and (2) external market data.

• We evaluated the reasonableness of management’s forecasts of adjusted EBITDA margin as a percentage of revenue by comparing the forecasts to the historical results, and comparison to guideline public companies.

• With the assistance of our valuation specialists, we evaluated the reasonableness of the Company’s valuation methodologies and significant assumptions by:

• Evaluating the reasonableness of the discount rates by comparing the underlying source information to publicly available market data and verifying the accuracy of the calculations.

• Evaluating the appropriateness of the valuation methods used by management and testing the mathematical accuracy.

We believe that our audits provide a reasonable basis for our opinion.

/s/ RSM US LLP

We have served as the Company’s auditor since 2012.

We served as the Company’s auditor from 2012 to 2025.

Irvine, California

July 28, 2025

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RESOURCES CONNECTION, INC.

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Prepaid expenses and other current assets 10,551 10,246

Assets held for sale - 8,909

Income taxes receivable 4,708 8,083

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Total current liabilities 67,455 75,402

Long-term debt - -

Operating lease liabilities, non-current 17,956 20,156

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Accumulated other comprehensive loss ( 16,741 ) ( 17,863 )

Retained earnings (Accumulated deficit) ( 121,575 ) 88,595

Accumulated deficit ( 174,256 ) ( 121,575 )

Treasury stock at cost, 3,855 and 3,952 shares as of May 30, 2026 and May 31, 2025, respectively

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The accompanying notes are an integral part of these consolidated financial statements.

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RESOURCES CONNECTION, INC.

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Revenue $ 452,006 $ 551,331 $ 632,801

Direct cost of services 343,907 386,733 462,501

Cost of services 282,326 343,907 386,733

Gross profit 169,680 207,424 246,068

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Income (loss) from operations ( 38,265 ) ( 196,757 ) 28,776

Interest (income) expense, net ( 544 ) ( 1,064 ) 552

Interest income, net ( 615 ) ( 544 ) ( 1,064 )

Other (income) expense 493 ( 138 ) 11

Income (loss) before income tax (benefit) expense ( 196,075 ) 29,829 72,618

Income tax (benefit) expense ( 4,295 ) 8,795 18,259

Income (loss) before income tax expense (benefit) ( 38,143 ) ( 196,075 ) 29,829

Income tax expense (benefit) 2,458 ( 4,295 ) 8,795

Net income (loss) $ ( 40,601 ) $ ( 191,780 ) $ 21,034

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The accompanying notes are an integral part of these consolidated financial statements.

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RESOURCES CONNECTION, INC.

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The accompanying notes are an integral part of these consolidated financial statements.

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RESOURCES CONNECTION, INC.

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Currency translation adjustment - - 3 - - ( 150 ) - ( 147 )

Net income for the year ended May 25, 2024 - - - - - - 21,034 21,034

Net loss for the year ended May 31, 2025 - - - - - - ( 191,780 ) ( 191,780 )

Balances as of May 31, 2025 37,027 $ 370 $ 400,180 3,952 $ ( 54,031 ) $ ( 17,863 ) $ ( 121,575 ) $ 207,081

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- - - - - - ( 9,461 ) ( 9,461 )

Repurchase of common stock - - - 1,383 ( 12,999 ) - - ( 12,999 )

Dividend equivalents on equity awards - - 970 - - - ( 970 ) -

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The accompanying notes are an integral part of these consolidated financial statements.

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RESOURCES CONNECTION, INC.

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Depreciation and amortization expense 5,154 7,748 8,428

Amortization of right-of-use assets 5,178 5,871 6,618

Stock-based compensation expense 11,583 6,754 5,732

Contingent consideration adjustment - - ( 4,400 )

Loss on dissolution of subsidiaries - - 220

Loss on sale of Sitrick 2,450 - -

(Gain) loss on sale of assets - ( 3,687 ) 574

Impairment of goodwill 194,409 - 2,955

Goodwill impairment - 194,409 -

Impairment of right-of-use assets

Adjustment to allowances 1,257 1,239 137

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Cash flows from investing activities:

Proceeds from sale of taskforce

Net proceeds from the sale of assets - 12,309 -

Proceeds from the sale of Sitrick

Acquisition of Reference Point, net of cash acquired - ( 23,169 ) -

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Investments in property and equipment and internal-use software ( 808 ) ( 2,711 ) ( 1,143 )

Net cash (used in) provided by investing activities ( 13,571 ) ( 8,554 ) 3,943

Net cash provided by (used in) investing activities

1,077 ( 13,571 ) ( 8,554 )

Cash flows from financing activities:

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Repurchase of common stock - ( 12,999 ) ( 8,000 )

Proceeds from Revolving Credit Facility - - 15,000

Repayments on Revolving Credit Facility - - ( 69,000 )

Payment of debt issuance costs ( 343 ) - -

Payment of cash dividends ( 9,395 ) ( 18,646 ) ( 18,825 )

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Effect of exchange rate changes on cash 1,247 ( 342 ) ( 548 )

Net (decrease) increase in cash ( 22,745 ) ( 7,892 ) 12,560

Net decrease in cash ( 3,775 ) ( 22,745 ) ( 7,892 )

Cash and cash equivalents at beginning of period 86,147 108,892 116,784

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The accompanying notes are an integral part of these consolidated financial statements.

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RESOURCES CONNECTION, INC.

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The Company’s operating entities provide services primarily under the name Resources Global Professionals (“RGP”).

RGP is a professional services firm focused on delivering consulting execution services that power clients’ operational needs and change initiatives utilizing a combination of bench and on-demand, expert and diverse talent.

As a next-generation human capital partner for its clients, the Company specializes in leadership and co-delivery of enterprise initiatives typically precipitated by business transformation, strategic transactions, or regulatory change.

The Company’s principal markets of operations are North America, Europe, and Asia Pacific.

RGP is a global professional services firm with three decades of experience helping the world’s top organizations navigate change and seize opportunity.

With three integrated offerings—On-Demand Talent, Consulting, and Outsourced Services—the Company provides CFOs and other C-suite leaders with the flexibility to solve today’s most pressing challenges.

The Company’s principal markets of operations are North America, Europe & Asia Pacific.

The Company’s fiscal year consists of 52 or 53 weeks, ending on the Saturday in May closest to May 31.

Fiscal year 2026 consisted of four 13-week quarters for a total of 52 weeks.

Fiscal year 2025 consisted of three 13-week quarters and one 14-week fourth quarter for a total of 53 weeks.

Fiscal years 2024 and 2023 consisted of four 13-week quarters and included a total of 52 weeks of activity in each fiscal year.

Fiscal 2024 consisted of four 13-week quarters for a total of 52 weeks.

Company Management Changes

On October 30, 2025, the Board appointed Roger Carlile, a director of the Company, to succeed Kate W.

Duchene as the Company’s President and Chief Executive Officer ("CEO"), effective November 3, 2025.

Concurrently, in October 2025, the Company's Board of Directors elected not to renew the "Period of Employment" under the Company's existing Employment Agreement, dated February 3, 2020 and as subsequently amended, with Ms.

Duchene (the "Duchene Employment Agreement"), the Company's former President and CEO.

Duchene stepped down as the Company’s President and CEO, and as a member of the Board, on November 2, 2025.

She served as an Executive Advisor through January 3, 2026 to assist the Company and its new President and CEO with the continuity of leadership.

Duchene will continue to provide transition support to the Company as a consultant from January 4, 2026 through December 31, 2028.

In connection with the Board’s determination not to extend the “Period of Employment” under the Duchene Employment Agreement, the Company and Ms.

Duchene entered into a Transition Agreement on October 31, 2025 (the “Duchene Transition Agreement”).

The Company’s non-renewal of the Period of Employment under the Duchene Employment Agreement triggered Ms.

Duchene’s rights to severance benefits under that agreement.

The Duchene Transition Agreement provides that Ms.

Duchene will receive the following severance benefits, to be paid in twelve monthly installments, which began in January 2026, following her execution and delivery of a general release of claims in favor of the Company:

(i) a cash severance benefit of $ 5,325,000 (three times the sum of her annual base salary and annual target bonus opportunity) and (ii) a pro-rated target cash bonus of $ 554,167 for fiscal year 2026.

Duchene also received a lump sum cash payment that approximates Ms.

Duchene’s cost to continue healthcare coverage for two years following her Separation Date and accelerated vesting of all of Ms.

Duchene’s then-outstanding and unvested Company equity awards.

Beginning January 3, 2026, the Company began paying Ms.

Duchene a monthly consulting fee of $ 12,500 .

On March 3, 2026, the Company entered into a Separation and General Release Agreement (the "Separation Agreement") with Bhadreskumar Patel, the Company’s Chief Operating Officer ("COO"), that provided the last day of Mr.

Patel’s employment by the Company was May 15, 2026 (the “Separation Date”).

Patel received the following severance benefits in connection with the Separation Agreement:

(i) a lump sum cash payment of $ 1,650,000 ;

(ii) a lump sum cash payment that approximates Mr.

Patel’s cost to continue healthcare coverage under COBRA for eighteen months following the Separation Date;

and (iii) accelerated vesting of all of Mr.

Patel’s then-outstanding and unvested Company equity awards, including restricted stock units and performance-based restricted stock units (with performance-based restricted stock units vesting at the applicable “target” number of shares subject to the award), and the full term to exercise any outstanding Company stock options.

Summary of Significant Accounting Policies

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Reporting Segments

During the first quarter of fiscal 2025, the Chief Executive Officer announced a decision to reorganize the Company’s business by forming multiple discrete operational business units.

To align the new operating model and financial reporting, the Company made management organizational changes and implemented new reporting modules and processes to provide discrete information to manage the business.

During the first quarter of fiscal 2025, the Company completed its assessment of the Company's operating segments and identified the following newly defined operating segments:

• On-Demand Talent – this segment provides businesses with a go-to source for bringing in experts when they need them.

• Consulting – this segment drives transformation across people, processes and technology across domain areas including finance, technology and digital, risk and compliance and supply chain transformation.

• Europe & Asia Pacific – is a geographically defined segment that offers both on-demand and consulting services (excluding the digital consulting business, which is included in our Consulting segment) to clients throughout Europe and Asia Pacific.

• Outsourced Services – operating under the Countsy by RGP TM brand, this segment offers finance, accounting and HR services provided to startups, spinouts and scale-up enterprises, utilizing a technology platform and fractional team.

• Sitrick – a crisis communications and public relations firm that provides corporate, financial, transactional and crisis communication and management services.

Each of these segments reports through a separate segment manager to the Company’s Chief Executive Officer and Chief Operating Officer, who are collectively designated as the Chief Operating Decision Maker (“CODM”) for segment reporting purposes.

The Company's reportable segments are comprised of On-Demand Talent, Consulting, Europe & Asia Pacific, and Outsourced Services.

Sitrick does not individually meet the quantitative thresholds to qualify as a reportable segment.

Therefore, Sitrick is disclosed under the “All Other” segment.

See Note 18 — Segment Information and Enterprise Reporting for additional information on these segments.

Each segment reports through separate segment managers to the Company's CEO, who is designated as the Chief Operating Decision Maker ("CODM") for segment reporting purposes.

Each of these segments represents a reporting unit for the purposes of assessing goodwill for impairment.

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On November 15, 2023, the Company acquired CloudGo Pte Ltd.

and its subsidiaries (collectively, “CloudGo”).

On July 1, 2024, the Company acquired Reference Point LLC (“Reference Point”).

CloudGo and Reference Point are both reported as part of the Consulting operating segment.

See Note 3 – Acquisitions and Dispositions in the Notes to Consolidated Financial Statements for further information.

The Company's previous reportable segments included Sitrick, a crisis communications and public relations firm, which did not individually meet the quantitative thresholds to qualify as a reportable segment (disclosed as "All Other").

On April 7, 2026, the Company entered into a Membership Interest Purchase Agreement (the “Purchase Agreement”) with Sitrick Group, LLC (“Sitrick”) and Sitrick, LLC (the “Buyer”), pursuant to which the Company agreed to sell 100 % of the membership interests of Sitrick to the Buyer.

The sale was completed on May 2, 2026.

See Note 3 — Acquisitions and Dispositions for further information.

As a result of the sale of Sitrick, the Other segment was eliminated as of May 30, 2026.

The sale did not represent a strategic shift in the Company's business and therefore it did not meet the criteria for classification as discontinued operations.

The Company has presented the results of the Other segment through the date the sale was completed for the year ended May 30, 2026.

Following the sale, the Company received no new income from Sitrick and had no further involvement or continuing influence over its operations.

Reclassifications

Certain prior period amounts have been reclassified to conform to current period presentation.

Certain prior period amounts have been reclassified to conform to current period presentation specifically as it relates to reclassification of amortization of right-of-use assets presented in the Company’s Consolidated Statements of Cash Flows.

These reclassifications had no effect on previously reported totals for assets, liabilities, stockholders’ equity, cash flows or net income.

1 unchanged sentence

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Although management believes these estimates and assumptions are adequate, actual results could differ from the estimates and assumptions used.

Although management believes these estimates and assumptions are adequate, actual results could materially differ from the estimates and assumptions used as new information is learned or upon the amounts becoming fixed or determinable.

Revenue Recognition

2 unchanged sentences

Revenue is recorded net of sales or other transaction taxes collected from clients and remitted to taxing authorities.

Revenues for the vast majority of our contracts are recognized over time, based on hours worked by the Company’s professionals.

Revenues for the vast majority of the Company's contracts are recognized over time, based on hours worked by the Company’s professionals.

The performance of the agreed-to service over time is the single performance obligation for revenues.

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Time incurred represents work performed, which corresponds with, and therefore best depicts, the transfer of control to the client.

Management uses significant judgments when estimating the total hours expected to complete the contract performance obligation.

Management uses judgments when estimating the total hours expected to complete the contract performance obligation.

It is possible that updated estimates for consulting engagements may vary from initial estimates with such updates being recognized in the period of determination.

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and d) bears the risk for services provided that are not fully paid for by clients.

The Company recognizes all reimbursements received from clients for “out-of-pocket” expenses as revenue and all such expenses as direct cost of services.

The Company recognizes all reimbursements received from clients for “out-of-pocket” expenses as revenue and all such expenses as cost of services.

Reimbursements received from clients were $ 4.8 million, $ 4.4 million and $ 4.3 million for the years ended May 30, 2026, May 31, 2025, and May 25, 2024, respectively.

4 unchanged sentences

The Company’s clients are contractually obligated to pay the Company for all hours billed.

The Company invoices most of its clients on a weekly basis or, in certain circumstances, on a bi-weekly or monthly basis, and its typical

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arrangement of payment is due within 30 days.

The Company invoices most of its clients on a weekly basis or, in certain circumstances, on a bi-weekly or monthly basis, and its typical arrangement of payment is due within 30 days.

To a much lesser extent, in certain circumstances, the Company also earns revenue if one of its consultants is hired by, or if the Company places an outside candidate with, its client.

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and c) the start date is within the Company’s current quarter.

Conversion fees were 0.2 % of revenue for the year ended May 31, 2025, and 0.3 % of revenue for each of the years ended May 25, 2024 and May 27, 2023.

Permanent placement fees were 0.1 %, 0.2 % and 0.3 % of revenue for the years ended May 31, 2025, May 25, 2024 and May 27, 2023, respectively.

Conversion fees were 0.2 % of revenue for each of the years ended May 30, 2026 and May 31, 2025, and 0.3 % of revenue for the year ended May 25, 2024.

Permanent placement fees were 0.1 % of revenue for each of the years ended May 30, 2026 and May 31, 2025, and 0.2 % of revenue for the year ended and May 25, 2024.

The Company’s contracts generally have termination-for-convenience provisions and do not have termination penalties.

While clients are contractually obligated to pay the Company for all hours billed, the Company does not have long-term agreements with its clients for the provision of services and the Company’s clients may terminate engagements at any time.

All costs of compensating the Company’s professionals for services provided are the responsibility of the Company and are included in direct cost of services.

All costs of compensating the Company’s professionals for services provided are the responsibility of the Company and are included in cost of services.

Foreign Currency Translation

2 unchanged sentences

Gains and losses from foreign currency transactions are included in selling, general and administrative expenses in the Consolidated Statements of Operations.

Per Share Information

The Company presents both basic and diluted earnings (loss) per share (“EPS”).

Basic EPS is calculated by dividing net income (loss) by the weighted-average number of common shares outstanding during the period.

Diluted EPS is based upon the weighted-average number of common shares and potentially dilutive common shares outstanding during the period.

Potentially dilutive shares of common stock include the assumed exercise of outstanding in-the-money stock options, assumed issuance of common stock under the Company's 2019 Employee Stock Purchase Plan, as amended (“ESPP”), assumed release of outstanding restricted stock awards (“RSAs”), restricted stock units (“RSUs”) and performance stock units (“PSUs”) using the treasury stock method.

However, potentially dilutive shares of common stock are excluded from the computation in periods in which they have an anti-dilutive effect.

During the year ended May 31, 2025, the Company incurred a net loss, and as a result potentially dilutive common shares issuable from the assumed exercise of stock options and the assumed release of shares of common stock under the outstanding ESPP, RSAs, RSUs, and PSUs awards were not included in the diluted shares used to calculate net loss per share, as their inclusion would have been anti-dilutive.

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The following table summarizes the calculation of net income (loss) per share for the years ended May 31, 2025, May 25, 2024 and May 27, 2023 (in thousands, except per share amounts):

For the Years Ended

Net income (loss) $ ( 191,780 ) $ 21,034 $ 54,359

Weighted-average shares outstanding:

Basic weighted-average shares 33,063 33,445 33,407

Effect of dilutive shares:

Weighted-average shares — Basic

33,063 33,445 33,407

Potentially dilutive stock options - 48 359

Potentially dilutive employee stock purchase plan - 14 8

Potentially dilutive restricted stock awards - 56 64

Potentially dilutive restricted stock units - 179 233

Potentially dilutive performance stock units - 153 114

Diluted weighted-average shares outstanding 33,063 33,895 34,185

Net income (loss) per common share:

Basic $ ( 5.80 ) $ 0.63 $ 1.63

Dilutive $ ( 5.80 ) $ 0.62 $ 1.59

Anti-dilutive shares not included above 2,730 2,152 704

Cash and Cash Equivalents

The Company considers cash on hand, deposits in banks, and short-term investments purchased with an original maturity date of three months or less to be cash and cash equivalents.

The carrying amounts reflected in the Consolidated Balance Sheets for cash and cash equivalents approximate the fair values due to the short maturities of these instruments.

Restricted Cash

Restricted cash consists of cash and claims to cash that are restricted as to withdrawal or usage.

This includes cash designated for specific use in an acquisition or dissolution.

Financial Instruments

The fair value of the Company’s financial instruments reflects the amounts that the Company estimates it will receive in connection with the sale of an asset in an orderly transaction between market participants at the measurement date (exit price).

The fair value hierarchy prioritizes the use of inputs used in valuation techniques into the following three levels:

Level 1 – Quoted prices in active markets for identical assets and liabilities.

Level 2 – Observable inputs other than quoted prices in active markets for identical assets and liabilities;

quoted prices in markets that are not active;

or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets.

Level 3 – Unobservable inputs.

Contingent consideration liability is for estimated future contingent consideration payments related to the Company’s acquisitions.

Total contingent consideration liabilities related to the acquisition of CloudGo were preliminarily valued at $ 4.4 million as of November 25, 2023 and zero as of May 31, 2025 and May 25, 2024, respectively.

As a result, no further remeasurements or revisions are required.

The fair value measurement of the liability was based on significant inputs not observed in the market and thus represents a Level 3 measurement.

The significant unobservable inputs used in the fair value measurement of the contingent consideration liability at these dates were the Company’s measures of the estimated payouts based on internally generated financial projections and discount rates.

The fair value of contingent

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consideration liability will be remeasured on a quarterly basis until settlement by the Company using additional information as it becomes available, and any change in the fair value estimates will be recorded in selling, general and administrative expenses in the Company’s Consolidated Statements of Operations.

Future revisions to these significant unobservable inputs and the assumptions underlying them could materially change the estimate of the fair value of contingent consideration and therefore could materially affect the Company’s future operating results.

The Company’s remaining financial instruments, including cash and cash equivalents, trade accounts receivable, accounts payable and other accrued expenses, and long-term debt, are carried at cost, which approximates their fair value because of the short-term maturity of these instruments or because their stated interest rates are indicative of market interest rates.

The carrying amounts reflected in the Consolidated Balance Sheets for cash equivalents approximate the fair values due to the short maturities of these instruments.

Allowance for Credit Losses

The Company maintains an allowance for credit losses for estimated losses resulting from its clients’ failure to make required payments for services rendered.

Management estimates this allowance based upon knowledge of the financial condition of the Company’s clients (which may not include knowledge of all significant events), review of historical receivable and reserve trends and other pertinent information.

Management estimates this allowance based upon knowledge of the financial condition of the Company’s clients (which may not include knowledge of all significant events), review of

historical receivable and reserve trends and other pertinent information.

If the financial condition of the Company’s clients deteriorates or there is an unfavorable trend in aggregate receivable collections, additional allowances may be required.

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May 30, 2026 $ 2,603 $ 1,257 $ 4 $ ( 2,240 ) $ ( 285 ) $ 1,339

Assets and Liabilities Held for Sale

Assets and liabilities held for sale primarily represent property and equipment, and other assets and liabilities that have met the criteria of “held for sale” accounting, as specified by Accounting Standards Codification (“ASC”) 360, Property, Plant, and Equipment .

The effect of suspending amortization on noncurrent assets held for sale is immaterial to the results of operations.

The Company records assets and liabilities held for sale at the lower of carrying value or fair value less cost to sell.

Any loss resulting from this measurement is recognized in the period in which the held for sale criteria are met.

Conversely, gains are not recognized on the sale of a long-lived asset or disposal group until the date of sale.

On February 24, 2024, the Company determined the asset groups associated with the Company's former corporate office in Irvine, California met the criteria of held for sale, since the Company intended to complete the sale of these assets within the twelve months following the end of the third quarter of fiscal 2024.

The Company concluded that the offering price of the disposal assets was an approximate fair value.

The Company sold its Irvine, California corporate office in August 2024.

See Note 4 – Assets and Liabilities Held for Sale for further information.

Property and Equipment

Property and equipment is stated at cost, less accumulated depreciation and amortization.

Depreciation is computed using the straight-line method over the following estimated useful lives:

Furniture and fixtures 5 to 10 years

Leasehold improvements Lesser of useful life of asset or term of lease

Computer, equipment and software 3 to 5 years

Costs for normal repairs and maintenance are expensed to operations as incurred, while renewals and major refurbishments are capitalized.

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(1) Other activity for the year ended May 30, 2026 represents the allowance on accounts receivable transferred in connection with the disposal of Sitrick.

Long-lived Assets

The Company evaluates the recoverability of long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

In accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 360, Property, Plant, and Equipment, the Company evaluates the recoverability of long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

The impairment test is comprised of two steps.

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If the sum of expected undiscounted future cash flows is less than the carrying amount of the asset, a second step is warranted and an impairment loss is measured as the amount by which the carrying amount of the asset exceeds its fair value calculated using the present value of estimated net future cash flows.

The Company recorded an impairment against its right of use (“ROU”) assets and leasehold improvements of zero , $ 0.2 million and zero for the years ended May 31, 2025, May 25, 2024 and May 27, 2023, respectively, primarily associated with exiting certain real estate leases as part of its restructuring initiatives.

The Company recorded an impairment against its right of use (“ROU”) assets of $ 2.4 million , zero and $ 0.2 million for the years ended May 30, 2026, May 31, 2025 and May 25, 2024, respectively, primarily associated with exiting certain real estate leases as part of its restructuring initiatives.

The impairment charges are included in selling, general and administrative expense in the Company’s Consolidated Statements of Operations.

During fiscal 2026, the Company entered into subleases at certain of its office locations in connection with its restructuring activities and the sale of Sitrick.

Due to the change in future use of the impacted office spaces, management assessed recoverability of the related ROU assets in accordance with the Company's policy on impairment of long-lived assets.

Based on an analysis of future undiscounted cash flows associated with the sublease of the right-of-use assets, management determined that the carrying value of the assets was not recoverable.

The fair value was based on observable market rates of the assets in the area of the office locations.

The Company recorded an impairment charge on right-of-use assets of $ 2.4 million, of which $ 1.5 million related to the sale of Sitrick and $ 0.9 million related to restructuring activities, to selling, general and administrative expenses in the accompanying Consolidated Statements of Operations in connection with the recoverability assessments.

The Company did not record any impairment of long-lived assets during the year ended May 31, 2025.

During the year ended May 25, 2024, the Company recorded an impairment charge on long-lived assets of approximately $ 0.2 million

Goodwill and Intangible Assets

Goodwill is recorded at the time of an acquisition and is calculated as the difference between the aggregate consideration paid for an acquisition and the fair value of the net tangible and intangible assets acquired.

Goodwill is not subject to amortization but the carrying value is tested for impairment on an annual basis or more frequently if the Company believes indicators of impairment exist.

During the fourth quarter of fiscal 2024, the Company voluntarily changed the date of the annual impairment test from the last day of the fourth quarter to the first day of the fourth quarter to better align with our internal operations.

This change was applied prospectively and was not material to the Company’s consolidated financial statements as it did not delay, accelerate or avoid an impairment charge.

Goodwill is not subject to amortization but the carrying value is tested for impairment on an annual basis, as of the first day of the fourth quarter, or more frequently if the Company believes indicators of impairment exist.

Impairment testing is conducted at the reporting unit level.

Under ASC 350, Intangibles - Goodwill and Other , the qualitative assessment requires the consideration of factors such as recent market transactions, macroeconomic conditions, and changes in projected future cash flows or planned revenue or earnings of the reporting unit as potential indicators when determining the need for a quantitative assessment of impairment.

There were no impairment indicators within the operating segment where goodwill resides during fiscal 2026 and as such, the Company performed its annual qualitative assessment on the carrying value of goodwill as of the first day of the fourth quarter and determined that it is more likely than not that no impairment of goodwill existed at such date.

During fiscal 2025, there were indicators of potential impairment in each of the fiscal quarters related to a combination of business performance and decline in share price.

As a result, the Company performed interim quantitative goodwill impairment assessments for its reporting units, each of which

is also a reporting segment.

The Company recorded an aggregate impairment charge of $ 194.4 million in connection with the impairment assessments.

See Note 4 – Goodwill and Intangible Assets for further information.

Under the quantitative analysis, the fair value of the reporting units is determined by using a market-based approach, an income-based approach or a combination thereof.

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The Company reviewed its intangible assets and did not identify any impairment during the years ended May 30, 2026, May 31, 2025, and May 25, 2024.

See Note 5 — Goodwill and Intangible Assets for a further description of the Company’s goodwill and intangible assets, including information about the Company’s goodwill impairment assessment.

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The Company currently leases office space, vehicles and certain equipment under operating leases expiring through 2034.

At May 31, 2025, the Company had no finance leases.

See Note 4 – Goodwill and Intangible Assets for further information.

The Company currently leases office space, vehicles and certain equipment under operating lease agreements.

All of the Company's leases are operating leases.

The Company’s operating leases are primarily for real estate, which include fixed payments plus, in some cases, scheduled base rent increases over the term of the lease.

Certain leases require variable payments of common area maintenance, operating expenses and real estate taxes applicable to the property.

Variable payments are excluded from the measurements of lease liabilities and are expensed as incurred.

Certain leases require variable payments, which are excluded from the measurements of lease liabilities and are expensed as incurred.

Any tenant improvement allowances received from the lessor are recorded as a reduction to rent expense over the term of the lease.

None of the Company’s lease agreements contained residual value guarantees or material restrictive covenants.

The Company has not entered into any real estate lease arrangements where it occupies the entire building.

As such, the Company does not have any separate land lease components embedded within any of its real estate leases.

The Company determines if an arrangement is a lease at the inception of the contract.

Specifically, the Company considers whether it can control the underlying asset and have the right to obtain substantially all of the economic benefits or outputs from the assets.

The ROU assets represent the right to use the underlying assets for the lease term and the lease liabilities represent the Company’s obligation to make lease payments arising from the leases.

The Company’s lease liability is recognized as of the lease commencement date at the present value of the lease payments over the lease term.

The Company’s ROU asset is recognized as of the lease commencement date at the amount of the corresponding lease liability, adjusted for prepaid lease payments, lease incentives received, and initial direct costs incurred.

The Company evaluates its ROU assets for impairment consistent with its policy for evaluating long-lived assets for impairment.

See “Long-lived Assets” above.

ROU assets are presented as operating ROU assets in the Company’s Consolidated Balance Sheets.

Operating lease liabilities are presented as operating lease liabilities, current or operating lease liabilities, noncurrent in the Company’s Consolidated Balance Sheets based on their contractual due dates.

Operating lease expense is recognized on a straight-line basis over the lease term, and is recognized in selling, general and administrative expenses in the Company’s Consolidated Statements of Operations.

Most of the Company’s leases do not provide an implicit rate that can be readily determined.

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Sublease income is included in selling, general and administrative expenses in the Company’s Consolidated Statements of Operations.

The Company has elected the practical expedient that allows lessees to choose to not separate lease and non-lease components by class of underlying asset and is applying this expedient to all real estate asset classes.

Additionally, the Company has also made an accounting policy election to recognize the lease payments under short-term leases as an expense on a straight-line basis over the lease term without recognizing the lease liability and the ROU asset.

The Company accounts for lease and non-lease components in its contracts as a single lease component.

The non-lease components typically represent additional services transferred to the Company, such as common area maintenance for real estate, which are variable in nature and recorded in variable lease expense in the period incurred.

Additionally, the

Company has also made an accounting policy election to recognize the lease payments under short-term leases as an expense on a straight-line basis over the lease term without recognizing the lease liability and the ROU asset.

See Note 6 — Leases for further information on the Company’s leases.

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Capitalized hosting arrangements are stated at historical cost and amortized on a straight-line basis over an estimated useful life of the expected term of the hosting arrangement, taking into consideration several other factors such as, but not limited to, options to extend the hosting arrangement or options to terminate the hosting arrangement.

The amortization of capitalized

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implementation costs for hosting arrangements will commence when the systems are ready for their intended use and will be presented as operating expenses on the Company’s Consolidated Statements of Operations consistent with the presentation for expensing the fees for the associated hosting arrangement.

As of May 31, 2025 and May 25, 2024, the capitalized costs related to hosting arrangements incurred during the application development stage were $ 20.8 million and $ 16.1 million, respectively.

These capitalized hosting arrangements are included in current and other non-current assets on the Consolidated Balance Sheets.

During the years ended May 31, 2025 and May 25, 2024, amortization was $ 1.8 million and less than $ 0.2 million, respectively.

No costs were amortized during the year ended May 27, 2023.

The amortization of capitalized implementation costs for hosting arrangements will commence when the systems are ready for their intended use and are presented in selling, general and administrative expenses in the Company’s Consolidated Statements of Operations on the Company’s Consolidated Statements of Operations consistent with the presentation for expensing the fees for the associated hosting arrangement.

As of May 30, 2026 and May 31, 2025, the capitalized costs related to hosting arrangements, net of accumulated amortization, were $ 15.7 million and $ 19.0 million, respectively.

These capitalized hosting arrangements are included in prepaid expenses and other non-current assets on the Consolidated Balance Sheets.

The Company incurred $ 3.3 million, $ 1.8 million, and $ 0.2 million of amortization expense during the years ended May 30, 2026, May 31, 2025, and May 25, 2024 respectively, related to these arrangements.

Stock-Based Compensation

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The tax benefits recognized in the financial statements from such positions are measured based on the largest benefit that has a greater than 50 percent likelihood of being realized upon settlement.

The Company records a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return.

The Company records a

liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return.

Any change in judgment related to the expected ultimate resolution of uncertain tax positions is recognized in earnings in the period in which such change occurs.

The Company recognizes interest and penalties related to income tax matters, if applicable, in income tax expense.

Share Repurchases and Retirement of Treasury Shares

The Company’s stock repurchase programs authorize the Company to repurchase shares at the discretion of the Company’s senior executives based on numerous factors, including, without limitation, share price and other market conditions, the Company’s ongoing capital allocation planning, the levels of cash and debt balances, and other demands for cash.

The Company records the shares repurchased as treasury stock based on the amount paid to repurchase its shares.

Direct costs incurred to acquire treasury stock are treated like stock issue costs and added to the cost of the treasury stock.

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The Company accounts for the retirement of treasury shares using the par-value method under which the cost of repurchased and retired treasury shares in excess of the par value is allocated between additional paid-in capital and retained earnings.

When the repurchase price is greater than the original issue proceeds, the excess is charged to retained earnings.

The Company uses the weighted-average cost flow assumption to identify and assign the original issue proceeds to the cost of the repurchased and retired treasury shares.

The Company believes that this allocation method is preferable because it more accurately reflects its paid-in capital balances by allocating the cost of the repurchased and retired treasury shares to paid-in capital in proportion to paid-in capital associated with the original issuance of those shares.

See Note 12 — Stockholders’ Equity for further information on the repurchase of shares.

Restructuring Charges

Restructuring charges incurred by the Company are associated with cost optimization initiatives and consist primarily of severance costs for reductions in force and professional fees incurred in connection with the initiative.

The Company evaluates the natur e of the severance costs to determine if they relate to ongoing benefit arrangements, which are accounted for under ASC 712, Compensation - Nonretirement Postemployment Benefits ("ASC 712"), or one-time benefit arrangements, which are accounted for under ASC 420, Exit or Disposal Cost Obligations.

The Company records a liability for ongoing employee termination benefits when it is probable that an employee is entitled to them and the amount of the benefit can be reasonably estimated.

One-time employee termination costs are recognized when management has communicated the termination plan to employees, unless future service is required, in which case the costs are recognized ratably over the future service period.

All other related costs are recognized when incurred.

Restructuring charges are recorded in selling, general and administrative expenses in the Consolidated Statements of Operations.

See Note 14 — Restructuring and Transformation Initiative , for additional information on restructuring charges.

Recent Accounting Pronouncements

Recently Issued Accounting Guidance

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses requiring disaggregated disclosure of certain expense captions into specified categories in the notes to financial statements on an annual and interim basis.

The ASU is effective for fiscal years beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, with updates to be applied on a prospective basis with the option to apply the standard retrospectively.

In December 2025, the FASB issued Accounting Standards Update ("ASU") 2025-11, Interim Reporting (Topic 270):

Narrow-Scope Improvements ("ASU 2025-11"), which clarifies interim disclosure requirements by improving the navigability of the required interim disclosures and clarifying when that guidance is applicable.

The standard is intended to help entities determine whether disclosures not specified in Topic 270 should be provided in interim reporting periods.

ASU 2025-11 is effective for interim reporting periods within annual reporting period beginning after December 15, 2027.

Early adoption is permitted.

The Company is currently evaluating the impact of ASU 2025-11 on its financial statements and disclosures.

In September 2025, the FASB issued ASU 2025-06, Intangibles — Goodwill and Other — Internal-Use Software ("ASU 2025-06"), which removes all references to prescriptive and sequential software development stages (referred to as "project stages").

An entity will be required to start capitalizing software costs when (i) management has authorized and committed to funding the software project and (ii) it is probable that the project will be completed and the software will be used to perform the function intended (referred to as the "probable-to-complete recognition threshold").

ASU 2025-06 is effective for fiscal years beginning after December 15, 2027, and interim reporting periods within those annual periods.

Early adoption is permitted as of the beginning of the annual reporting period.

The Company does not expect this guidance to have a material impact on its financial statements and disclosures.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments – Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets ("ASU 2025-05").

ASU 2025-05 provides a practical expedient that all entities can use when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC 606, Revenue from Contracts with Customers .

Under this practical expedient, an entity is allowed to assume that the current conditions it has applied in determining credit loss allowances for current accounts receivable and current contract assets remain unchanged for the remaining life of those assets.

ASU 2025-05 is effective for fiscal years beginning after December 15, 2025, and interim reporting periods in those years.

Entities that elect the practical expedient and, if applicable, make the accounting policy election are required to apply the amendments prospectively.

The Company currently expects to adopt this guidance in its fiscal year beginning May 31, 2026.

The Company is currently evaluating the impact of ASU 2025-05 on its financial statements and disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, with updates to be applied on a prospective basis with the option to apply the standard retrospectively.

Early adoption is permitted.

The Company expects to adopt this guidance in its fiscal year beginning May 30, 2027.

The Company is evaluating the potential impact of this guidance on its financial statement disclosures.

In December 2023, FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.

The guidance is intended to expand the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid.

The guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted.

The Company has adopted ASU 2023-09 for fiscal year 2026, which began on June 1, 2025, and is in the process of implementing the related disclosure requirements.

Recently Adopted Accounting Guidance

In November 2023, FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.

The guidance is intended to improve reportable segment disclosure requirements for public entities primarily through enhanced disclosures about significant segment expenses that are regularly provided to the CODM and included within each reported measure of segment profit.

This guidance is effective for annual periods beginning after December 15, 2023, and for interim periods beginning after December 15, 2024.

The Company adopted this guidance in the fiscal year ending May 31, 2025.

For additional information, refer to Note 18 – Segment Information and Enterprise Reporting .

Other recent changes in authoritative accounting pronouncements did not, or are not expected to, have a materially significant effect on the Company’s consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures ("ASU 2023-09").

ASU 2023-09 is intended to expand the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid.

The guidance was effective for annual periods beginning after December 15, 2024.

The Company adopted this guidance in the fiscal year ended May 30, 2026 and applied the guidance prospectively.

Acquisitions and Dispositions

Acquisition of Reference Point

On July 1, 2024, the Company entered into an Amended and Restated Membership Interest Purchase Agreement (the “Reference Point MIPA”) with Reference Point LLC (“Reference Point”) and the holder of all the outstanding membership interests of Reference Point LLC, in which the Company acquired 100 % of the membership interests of Reference Point.

On July 1, 2024, the Company entered into an Amended and Restated Membership Interest Purchase Agreement with Reference Point LLC ("Reference Point") and the holder of all the outstanding membership interests of Reference Point, in which the Company acquired 100 % of the membership interests of Reference Point.

Reference Point is a strategy, management, and technology consulting firm serving the financial services sector across four areas of focus:

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Results of operations of Reference Point are included within the Consulting Services operating segment in the Consolidated Statements of Operations from the date of acquisition.

Reference Point contributed $ 16.1 million of revenue and $ 1.9 million of operating income to the Consolidated Statements of Operations during the year ended May 31, 2025.

During the year ended May 31, 2025, the Company recognized approximately $ 2.8 million of acquisition-related costs in connection with the acquisition of Reference Point that were recorded in selling, general and administrative expenses in the Consolidated Statements of Operations.

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Reference Point contributed $ 16.3 million of revenue and $ 16.1 million of operating income to the Consolidated Statements of Operations during the years ended May 30, 2026 and May 31, 2025, respectively.

During the years ended May 30, 2026 and May 31, 2025, the Company recognized approximately $ 1.7 million and $ 2.8 million, respectively, of acquisition-related costs in connection with the acquisition of Reference Point that were recorded in selling, general and administrative expenses in the Consolidated Statements of Operations.

In accordance with ASC 805 Business Combinations , the Company made an initial provisional allocation of the purchase price for Reference Point based on the fair value of the assets acquired and liabilities assumed, with the residual amount recorded as goodwill.

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Cash $ 23,417

Recognized provisional amounts of identifiable assets acquired and liabilities assumed (in thousands):

The following table summarizes the amounts of identifiable assets acquired and liabilities assumed that were recognized at the acquisition date (in thousands):

Cash and cash equivalents $ 248

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Net assets acquired $ 23,417

(1) As of the acquisition date, the gross contractual amount of accounts receivable of $ 2.0 million was expected to be fully collected, and was fully collected during fiscal 2025.

The weighted-average useful life of all Reference Point's intangible assets is 11.3 years.

(1) The gross contractual amount of accounts receivable of $ 2.0 million was fully collected during fiscal 2025.

The weighted-average useful life of all Reference Point's intangible assets is 11.3 years as of the date of acquisition.

Acquisition of CloudGo

On November 15, 2023, the Company acquired 100 % of the equity interests in CloudGo pursuant to the terms of a Share Purchase Agreement entered into by and between the Company, CloudGo, and the shareholders of CloudGo (the “CloudGo SPA”).

On November 15, 2023, the Company acquired 100 % of the equity interests in CloudGo Pte Ltd.

and its subsidiaries (collectively, "CloudGo") pursuant to the terms of a Share Purchase Agreement entered into by and between the Company, CloudGo, and the shareholders of CloudGo (the “CloudGo SPA”).

Headquartered in Singapore, CloudGo is a digital transformation firm primarily focused on technology implementation through the ServiceNow platform.

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The estimate of fair value of contingent consideration liability requires assumptions to be made of various levels of potential revenue and operating profit performance as well as discount rates.

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Future revisions to these assumptions could materially change the estimate of the fair value of contingent consideration and therefore could materially affect the Company’s future operating results.

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CloudGo contributed $ 3.4 million and $ 6.5 million of revenue to the consolidated results of operations during the years ended May 30, 2026 and May 31, 2025, respectively.

During the year ended May 25, 2024, the Company recognized approximately $ 2.0 million of acquisition-related costs in connection with the acquisition of CloudGo .

During the year ended May 25, 2024, the Company recognized approximately $ 2.0 million of acquisition-related costs in

connection with the acquisition of CloudGo .

Such costs were recorded in selling, general and administrative expenses in the Consolidated Statements of Operations.

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The weighted-average useful life of CloudGo’s customer relationships and intangible assets is approximately 10.9 years.

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During fiscal 2023, the Company completed the dissolution of the following three foreign subsidiaries:

Compliance.co.uk Ltd, Resources Compliance (UK) Ltd and RGP Poland spolka z ograniczona odpowiedzialnoscia.

The Company recognized a total net loss on dissolutions of $ 0.5 million during fiscal 2023.

This net loss was primarily related to the recognition of the accumulated translation adjustment associated with the foreign subsidiaries, which was reclassified from accumulated other comprehensive loss in the Company’s Consolidated Balance Sheet and included in selling, general and administrative expenses in the Company’s Consolidated Statement of Operations for the year ended May 27, 2023.

None of the markets sold or exited in fiscal 2023 were considered strategic components of the Company’s operations.

Assets and Liabilities Held for Sale

As of February 24, 2024, the Company determined the asset groups associated with its former corporate office in Irvine, California met the criteria of held for sale, since the Company intended to complete the sale of these assets within the twelve months following the end of the third quarter of fiscal 2024.

Accordingly, the related assets classified as held for sale are separately presented in our Consolidated Balance Sheets as of May 25, 2024.

In addition, such assets are presented at the lower of carrying value or fair value less any costs to sell.

The Company concluded that the offering price of the disposal assets was an approximate fair value, which exceeded the carrying value of the related assets as of May 25, 2024.

As such, the assets held for sale are reported at their carrying value.

The following table presents information related to the major classes of assets that were classified as held for sale in our Consolidated Balance Sheets (in thousands):

Assets Held for Sale As of

Irvine Office Building May 25, 2024

Building and land $ 14,309

Leasehold improvements 321

Furniture and fixtures 1,565

Total assets held for sale, gross 16,195

accumulated depreciation and amortization ( 7,286 )

Total assets held for sale, net $ 8,909

The Company entered into a Purchase and Sale Agreement dated May 15, 2024, and as amended and restated as of May 20, 2024, with a third-party buyer for the sale of its Irvine building.

In August 2024, the Company completed the sale for total consideration of $ 13.0 million, resulting in a net gain of $ 3.4 million.

The sale does not constitute a discontinued operation.

As such, the gain has been recorded as a reduction of selling, general, and administrative expenses in the Consolidated Statement of Operations for the year ended May 31, 2025.

Sitrick Disposition

The Company entered into the Purchase Agreement to sell Sitrick on April 7, 2026 (the "Purchase Agreement") and completed the sale on May 2, 2026.

The sale was initiated in connection with the Company's broader transformation initiative to simplify its business portfolio.

The purchase price amounted to $ 1.9 million, and the Company recognized a loss of approximately $ 2.4 million in connection with the sale.

The loss on sale is recorded in selling, general and administrative expenses in the Consolidated Statements of Operations.

The Purchase Agreement also provided that the Company shall retain certain assets and liabilities of Sitrick, including all assets and liabilities related to certain office space lease agreements.

The Company entered into subleases with Sitrick for the office space retained in connection with the Purchase Agreement.

See Note 6 — Leases for additional information on the subleases.

The Company also agreed to pay Michael Sitrick, Sitrick’s chief executive officer, a cash payment of $ 4.0 million, which is equivalent to the cash severance that would have been payable under the terms of the employment agreement with Sitrick.

The cash payment is recorded in selling, general and administrative expenses in the Consolidated Statements of Operations.

In connection with the closing of the transaction, the Company also agreed to accelerate the vesting of any equity awards granted by the Company to continuing employees of Sitrick that are unvested and outstanding immediately prior to the closing.

Sitrick was the only employee of Sitrick whose equity was accelerated.

The Company will receive no new income from Sitrick as a result of the disposal.

Pre-tax loss from Sitrick amounted to $ 5.6 million, $ 2.3 million, and $ 0.8 million during the years ended May 30, 2026, May 31, 2025, and May 25, 2024.

Other Dispositions

During fiscal 2026, the Company completed the dissolution of its foreign subsidiary, Resources Global Professionals Sweden AB.

No gain/loss was recognized in connection with the dissolution.

The Company recognized an approximately $ 0.6 million loss related to the recognition of the accumulated translation adjustment associated with the subsidiary, which was reclassified from accumulated other comprehensive loss in the Company’s Consolidated Balance Sheet and included in other expense (income) in the Company’s Consolidated Statements of Operations for the year ended May 30, 2026.

Goodwill and Intangible Assets

As described in Note 2 – Summary of Significant Accounting Policies , the Company performs its annual impairment test for goodwill impairment in the fourth quarter, unless indicators of impairment exist, the Company will perform interim quantitative goodwill impairment analysis more frequently.

As a result of impairment indicators related to business performance and decline in share price throughout the fiscal year, the Company performed four interim quantitative goodwill impairment assessments for its reporting units, each of which is also a reporting segment, and recorded an aggregate impairment charge of $ 194.4 million for fiscal 2025.

As described in Note 2 – Summary of Significant Accounting Policies , the Company performs its annual impairment test for goodwill impairment in the fourth quarter, unless indicators of impairment exist, at which point the Company may perform interim quantitative goodwill impairment analysis.

There were no impairment indicators during fiscal year 2026 and as such, the Company performed its qualitative annual goodwill impairment analysis in the fourth quarter of fiscal 2026.

There were no changes in the carrying amount of goodwill during fiscal year 2026 and all goodwill on the Company's Consolidated Balance Sheet is allocated to the Outsourced Services segment.

During the year ended May 31, 2025, there were indicators of potential impairment in each of the fiscal quarters related to a combination of business performance and decline in share price.

As a result, the Company performed four interim quantitative goodwill impairment assessments for its reporting units, each of which is also a reporting segment.

The Company used a combination of income-based and market-based approaches to determine the fair value of its reporting units with goodwill and recorded an aggregate non-cash impairment charge of $ 194.4 million for fiscal 2025 in connection with its assessments.

During the year ended May 25, 2024, the Company performed an annual goodwill impairment on its reporting units and elected to perform a quantitative goodwill impairment analysis.

As a result of the quantitative impairment test performed on February 25, 2024, the Company concluded that there was no goodwill impairment.

There were no changes in facts, circumstances or events from February 25, 2024 through May 25, 2024, the end of the fiscal year, that would give rise to modifying the conclusion regarding goodwill impairment assessment or require further testing,

During the year ended May 27, 2023, the Company completed an interim goodwill impairment analysis in the third fiscal quarter for Sitrick, which is included in Other Segments.

Many of Sitrick’s target clients were impacted by the

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initial closures of U.S.

courts during the COVID-19 pandemic and the continued lingering impact on the court system despite the reopening, resulting in less opportunities and a slower revenue conversion typically provided by Sitrick.

The Company determined that the carrying value of Sitrick, also a reporting unit, was in excess of its fair value and recorded a non-cash impairment charge of $ 3.0 million.

This impairment reduced the goodwill within the Other Segments to zero as of May 27, 2023.

The Company’s determination of the estimated fair value may be based on the market-based approach, the income-based approach or a combination of both approaches.

Additionally, the present value was based on applying a weighted average cost of capital, which considered long-term interest rates and cost of equity based on the reporting segment’s risk profile.

The Company’s determination of the estimated fair value may be based on the market-based approach, the income-based approach or a combination of both approaches as described in Note 2 — Summary of Significant Accounting Policies .

As part of the goodwill impairment test, the Company reconciled the aggregated estimated fair value of the Company's operating segments to the Company’s market capitalization, including consideration of any asymmetry in information, and control premium representing the estimated amount a market participant would pay to obtain a controlling interest in the Company.

Fourth Quarter 2025 Interim Impairment Assessments

During the fourth quarter of fiscal 2025, and subsequent to the Company's annual impairment test date, a decrease in market capitalization and slow business recovery in the Consulting segment triggered a goodwill impairment assessment.

Using a combination of income-based and market-based approaches to determine the fair value of its reporting units with associated goodwill, the Company determined that the carrying value of the Consulting segment exceeded its fair value by $ 58.8 million.

In addition to recording this excess as a goodwill impairment charge, the Company also recorded a $ 10.2 million charge related to the deferred tax impacts from the excess carrying value.

The Company therefore recorded an aggregate of $ 69.0 million in goodwill impairment charges for the Consulting segment.

Third Quarter 2025 Interim Impairment Assessments

During the third quarter of fiscal 2025, slow business recovery in the On-Demand Talent and Consulting segments triggered a goodwill impairment assessment.

Using a combination of income-based and market-based approaches to determine the fair value of its reporting units with associated goodwill, the Company determined that the carrying values of On-Demand Talent and Consulting segments exceeded their fair values.

As a result, a non-cash goodwill impairment charge of $ 42.0 million was recorded, comprised of excess in carrying value over fair value of $ 12.4 million for On-Demand Talent and $ 24.8 million for Consulting, as well as a $ 4.8 million related to deferred tax impacts from the charge recorded in the Consulting segment.

Second Quarter 2025 Interim Impairment Assessments

During the second quarter of fiscal 2025, a decrease in market capitalization and slower-than-expected recovery in the On-Demand Talent and Europe and Asia Pacific segments triggered a goodwill impairment assessment.

Using a combination of income-based and market-based approaches to determine the fair value of its reporting units with goodwill, the Company determined that the carrying values of On-Demand Talent and Europe and Asia Pacific segments exceeded their fair values.

As a result, a non-cash goodwill impairment charge of $ 79.5 million was recorded, comprised of the excess in carrying value over fair value of $ 48.4 million for On-Demand Talent and $ 21.7 million for Europe and Asia Pacific, as well as $ 9.3 million related to deferred tax impacts from the charges recorded in the On-Demand Talent segment.

First Quarter 2025 Interim Impairment Assessments

During the first quarter of fiscal 2025, concurrent with the change in the Company’s operating segments, which were aligned to the Company’s reporting units and reportable segments, the Company allocated goodwill to each of its reporting units under the new organizational structure on a relative fair value basis.

The Company estimated the fair values of the reporting units based on the income-based approach.

As a result, a non-cash goodwill impairment charge of $ 3.9 million was recorded for the excess in carrying value over fair value of the Europe and Asia Pacific segment.

In performing the goodwill impairment assessments, the Company considers the assumptions used in determining the estimated fair values of its reporting units to be reasonable and appropriate.

However, the assumptions are complex and

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subjective, and additional adverse changes in a key assumption or a combination of key assumptions may significantly affect the Company’s assessment of the fair value and goodwill impairment.

These assumptions include, among other things, a failure to meet expected earnings or other financial plans;

changes in the discount rate, the terminal growth rate or tax rates;

or significant changes in industry or economic trends.

If the assumptions noted above adversely change, negative macroeconomic conditions worsen or the Company’s market capitalization decreases for a sustained period of time, the Company may be required to perform an additional impairment analysis that could result in additional impairment charges and materially adversely affect the Company’s financial condition and results of operations.

The following table summarizes the activity in the Company’s goodwill balance.

The balance as of May 25, 2024 was recast to reflect the impact of the Company's change in segment reporting and the final fair value allocation of the reporting units that became effective during the first quarter of fiscal 2025 (in thousands):

The following table summarizes the activity in the Company’s goodwill balance (in thousands):

On-Demand Talent Consulting Europe & Asia Pacific Outsourced Services All Other Total

Balance as of May 25, 2024 $ 70,202 $ 91,770 $ 25,850 $ 28,757 $ - $ 216,579

$ 70,202 $ 82,115 $ 25,648 $ 28,757 $ - $ 206,722

Acquisition (see Note 3)

- 6,855 - - - 6,855

Impact of foreign currency exchange rate changes - 18 202 - - 220

Balance as of May 25, 2024 $ 70,202 $ 91,770 $ 25,850 $ 28,757 $ - $ 216,579

Acquisition (see Note 3) - 6,855 - - - 6,855

Goodwill Impairment

( 70,202 ) ( 98,625 ) — ( 25,582 ) - - ( 194,409 )

Impact of foreign currency exchange rate changes - - ( 268 ) - - ( 268 )

Balance as of May 31, 2025 $ - $ - $ - $ 28,757 $ - $ 28,757

Balance as of May 30, 2026

$ - $ - $ - $ 28,757 $ - $ 28,757

The following table presents details of the Company’s intangible assets, estimated lives and related accumulated amortization (in thousands, except for estimated useful life):

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$ 39,500 $ ( 24,794 ) $ 14,706 $ 39,500 $ ( 21,160 ) $ 18,340

Computer software 3 - 3.5 years

- - - 7,870 ( 6,539 ) 1,331

Trade names 1 year

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Total $ 40,820 $ ( 25,670 ) $ 15,150 $ 40,820 $ ( 21,842 ) $ 18,978

The remaining weighted-average useful life of all of the Company’s intangible assets is approximately 4.7 years.

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The remaining weighted-average useful life of all of the Company’s intangible assets was approximately 4.1 years and 4.7 years as of May 30, 2026 and May 31, 2025, respectively.

For the year ended May 31, 2025, the Company determined that the computer software component of its intangible assets no longer provides future economic benefit and recorded a $ 0.4 million charge to write-off the unamortized asset.

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Property and equipment, net $ 3,441 $ 4,423

On February 24, 2024, the Company determined the asset groups associated with its former corporate office in Irvine, California met the criteria of held for sale.

As a result, the Company transferred such asset groups previously used in operations to assets held for sale in its Consolidated Balance Sheet as of May 25, 2024.

The Company's corporate office in Irvine, California was subsequently sold in August 2024.

See Note 4 - Assets and Liabilities Held for Sale for more information.

The Company recorded depreciation expense of $ 1.3 million, $ 1.9 million, and $ 3.1 million for the years ended May 30, 2026, May 31, 2025 and May 25, 2024, respectively.

Property and equipment is stated at cost, less accumulated depreciation and amortization.

Depreciation is computed using the straight-line method over the following estimated useful lives:

Furniture and fixtures 5 to 10 years

Leasehold improvements Lesser of useful life of asset or term of lease

Computer, equipment and software 3 to 5 years

Costs for normal repairs and maintenance are expensed to operations as incurred, while renewals and major refurbishments are capitalized.

The Company currently leases office space, vehicles and certain equipment under operating leases expiring through 2034.

At May 30, 2026, the Company had no finance leases.

The Company determines if an arrangement is a lease at the inception of the contract, which is the date on which the terms of the contract are agreed, and if the arrangement creates enforceable rights and obligations.

Specifically, the Company considers whether it can control the underlying asset and have the right to obtain substantially all of the economic benefits or outputs from the assets.

The Company evaluates its ROU assets for impairment consistent with its policy for evaluating long-lived assets for impairment.

Lease cost components included within selling, general and administrative expenses in the Consolidated Statements of Operations were as follows (in thousands):

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(1) Sublease income represents rental income received by the Company as sublessor.

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Following the sale of the building in Irvine, California, on August 1, 2024, the Company entered into a lease agreement for an office space in Irvine.

The lease commenced on November 1, 2024 and has an expiration date of June 30, 2032.

See Note 4 – Assets Held for Sale for further discussion.

The average annual rent for the lease term will be $ 0.7 million.

On December 20, 2023, the Company entered into a lease agreement for an office space in New York that commenced on July 1, 2024 with an expiration date of July 31, 2034.

The annual fixed rent for the first five years and the last five years are $ 1.2 million and $ 1.3 million respectively.

In the fourth quarter of 2026, the Company entered into subleases with Sitrick for the office locations in Los Angeles and New York that were utilized by Sitrick prior to the sale.

The subleases of the retained office locations terminate on September 30, 2029 and July 31, 2031, unless terminated sooner as provided in the sublease agreements.

Sitrick may elect to terminate the subleases on either the second or third anniversary of the sublease effective dates.

Due to the change in future use of the office space, management assessed recoverability of the related ROU assets for the offices in accordance with the Company's policy on impairment of long-lived assets and recorded an impairment

charge of $ 1.5 million to selling, general and administrative expenses in the accompanying Consolidated Statements of Operations.

See Note 2 — Summary of Significant Accounting Policies for additional information.

The weighted-average lease terms and discount rates for operating leases are presented in the following table:

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Present value of operating lease liabilities $ 22,522

The Company owned no assets that it leases to third-parties, as a lessor, at May 31, 2025.

Prior to the sale of the company-owned building located in Irvine, California to independent third parties, as described in Note 4 – Assets Held for Sale, the Company, as lessor, had operating lease agreements for office space with independent third parties for which it received rental income during the years ended May 31, 2025, May 25, 2024 and May 27, 2023 totaling $ 8,000 , $ 142,000 and $ 195,000 , respectively.

The terms of those operating lease agreements were terminated upon the sale of the building.

Long-Term Debt

Prior to July 2, 2025, the Company had a revolving credit facility with Bank of America, pursuant to the terms of the credit Agreement dated November 12, 2021 by the Company and Resources Connection LLC, as borrowers, and all of the Company’s domestic subsidiaries, as guarantors, with the lenders that are party thereto and Bank of America, N.A.

as administrative agent for the lenders (the “2021 Credit Facility”).

The 2021 Credit Facility provided for a $ 175.0 million senior secured revolving loan, which included a $ 10.0 million sublimit for the issuance of standby letters of credit and a swingline sublimit of $ 20.0 million.

The 2021 Credit Facility also included an option to increase the amount of the revolving loan up to an additional $ 75.0 million, subject to the terms of the 2021 Credit Facility.

The 2021 Credit Facility was originally set to mature on November 12, 2026;

however it was terminated on July 2, 2025 in connection with a new credit agreement entered into between the Company, and Resources Connection LLC, as borrowers, and all of the

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Company’s domestic subsidiaries, as guarantors, with the lenders that are party thereto and Bank of America, N.A.

as administrative agent for the lenders (the “New Credit Facility”).

See Note 19 - Subsequent Events for further discussion.

On July 2, 2025, the Company, Resources Connection LLC, as borrowers, and all of the Company’s domestic subsidiaries, as guarantors, entered into a credit agreement with the lenders party thereto and Bank of America, N.A.

as administrative agent, L/C issuer and the swingline lender (the “2025 Credit Facility”), and concurrently terminated the 2021 Credit Facility (as defined below).

The 2025 Credit Facility provided for a secured revolving loan, available in an amount up to the lesser of $ 50.0 million and a borrowing base formula tied to eligible receivables, which included a $ 10.0 million sublimit for the issuance of standby letters of credit.

The 2025 Credit Facility also included an option to increase the amount of the revolving loan up to an additional $ 15.0 million.

The 2025 Credit Facility was scheduled to mature on November 30, 2029.

The obligations under the 2025 Credit Facility were secured by substantially all assets of the Company, Resources Connection LLC and all of the Company’s domestic subsidiaries.

On December 31, 2024 and March 28, 2025, the parties then entered into amendments to the 2021 Credit Agreement (collectively, the “Fiscal 2025 Amendments”) to waive the Company's non-compliance with a financial covenant related to the consolidated interest coverage ratio under the Credit Agreement due to the goodwill impairment recognized during the second and third quarters of fiscal 2025, respectively.

The Fiscal 2025 Amendments also amended certain definitions under the Credit Agreement to exclude the impact of goodwill impairments recognized in the first, second, and third quarters of fiscal 2025.

As of May 31, 2025 and May 25, 2024, the Company had no debt outstanding under the 2021 Credit Facility.

In addition, the Company had $ 1.0 million and $ 1.4 million of outstanding letters of credit issued under the 2021 Credit Facility as of May 31, 2025 and May 25, 2024, respectively.

As of May 31, 2025, there was $ 174.0 million of remaining capacity under the 2021 Credit Facility.

Prior to July 2, 2025, the Company had a revolving credit facility with Bank of America, N.A., pursuant to the terms of the credit agreement dated November 12, 2021 by and among the Company and Resources Connection LLC, as borrowers, all of the Company’s domestic subsidiaries, as guarantors, the lenders that are party thereto and Bank of America, N.A.

as administrative agent for the lenders (the “2021 Credit Facility”).

The 2021 Credit Facility, which was originally set to mature on November 12, 2026, was terminated on July 2, 2025 in connection with entering into the 2025 Credit Facility.

Borrowings under the 2025 Credit Facility bore interest at a rate per annum of either, at the Company's election (i) Term SOFR (as defined in the 2025 Credit Facility) plus a margin ranging from 1.25 % to 2.50 % or (ii) the Base Rate (as defined in the 2025 Credit Facility), plus a margin of 0.25 % to 1.50 %, in either case, with the applicable margin depending

on the Company's Consolidated EBITDA (as defined in the 2025 Credit Facility).

The Company was also obligated to pay other customary facility fees for a credit facility of this size and type.

The 2025 Credit Facility contained customary covenants, including covenants that limited or restricted the Company’s and its subsidiaries’ ability to incur liens, incur indebtedness, make certain restricted payments, merge or consolidate and make dispositions of assets and financial covenants to maintain a certain consolidated total net leverage ratio and a consolidated fixed charge coverage ratio.

Upon the occurrence of an event of default under the 2025 Credit Facility, the lender may cease making loans, terminate the 2025 Credit Facility, and declare all amounts outstanding to be immediately due and payable.

The 2025 Credit Facility specified a number of events of default (some of which were subject to applicable grace or cure periods), including, among other things, non-payment defaults, covenant defaults, cross-defaults to other material indebtedness, bankruptcy and insolvency defaults and material judgment defaults.

On January 30, 2026, the Company, Resources Connection LLC, as borrowers, and all of the Company’s domestic subsidiaries, as guarantors, entered into a first amendment to the 2025 Credit Facility (the "First Amended Credit Facility").

The purpose of the First Amended Credit Facility was to amend certain covenants related to the Company's definition of Consolidated EBITDA, as such term is defined in the 2025 Credit Facility.

Except as expressly modified and amended in the First Amended Credit Facility, all terms, provisions, and conditions of the 2025 Credit Facility remained unchanged and in full force and effect.

The Company had no debt outstanding under the 2025 Credit Facility as of May 30, 2026 and no debt outstanding under the 2021 Credit Facility as of May 31, 2025.

However, the Company had $ 0.7 million and $ 1.0 million of outstanding letters of credit issued as of May 30, 2026 and May 31, 2025, respectively, under the 2025 Credit Facility and the 2021 Credit Facility, respectively.

As of May 30, 2026, there was up to $ 49.3 million of potential remaining capacity under the 2025 Credit Facility subject to the terms of the 2025 Credit Facility and related financial covenants.

On November 2, 2022 , Resources Global Enterprise Consulting (Beijing) Co., Ltd.

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The availability of proceeds under the Beijing Revolver is at the lender's absolute discretion and may be terminated at any time by the lender, with or without prior notice to the borrower.

As of May 30, 2026, the Company was not in compliance with all financial covenants under the 2025 Credit Facility.

On July 13, 2026, the Company terminated the 2025 Credit Facility and the Beijing Revolver.

Subsequently, on July 15, 2026, the Company entered into a new credit agreement with PNC Bank (the "2026 Credit Facility").

See Note 19 — Subsequent Events for additional information regarding the 2026 Credit Facility.

The following table represents the current and deferred income tax expense (benefit) for federal, state and foreign income taxes attributable to operations (in thousands):

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Income tax expense (benefit) $ 2,458 $ ( 4,295 ) $ 8,795

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Income (loss) before income tax expense (benefit) is as follows (in thousands):

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Income (loss) before income tax expense (benefit) $ ( 38,143 ) $ ( 196,075 ) $ 29,829

The income tax expense (benefit) differs from the amount that would result from applying the federal statutory rate as follows:

The Company adopted ASU 2023-09, “Income Taxes (Topic 740):

Improvements To Income Tax Disclosures”, ("ASU 2023-09") on a prospective basis beginning with the year ended May 30, 2026.

The following table presents the required disclosures pursuant to ASU 2023-09 and reconciles the provision for income taxes to the amount that would result from applying the statutory U.S.

federal income tax rate for the year ended May 30, 2026 (in thousands, except for percentages):

For the Year Ended

Amount Percent

Federal Statutory Tax Rate

$ ( 8,010 ) 21.0 %

Domestic state and local income taxes, net of federal benefit (1)

204 ( 0.5 ) %

Foreign tax effects

United Kingdom

Changes in valuation allowances

566 ( 1.5 ) %

Other ( 114 ) 0.3 %

Changes in valuation allowances ( 1,488 ) 3.9 %

Removal of tax attribute due to sale of the entity

1,488 ( 3.9 ) %

443 ( 1.2 ) %

Singapore 433 ( 1.1 ) %

Other foreign jurisdictions

1,306 ( 3.5 ) %

( 146 ) 0.4 %

Nontaxable and nondeductible items

Share-based payment awards 1,745 ( 4.6 ) %

Section 162(m)

1,879 ( 4.9 ) %

Other 421 ( 1.1 ) %

Cross-border tax laws 44 ( 0.1 ) %

Changes in tax laws or rates enacted in the current period - - %

Changes in valuation allowances

4,082 ( 10.7 ) %

Other adjustments

( 486 ) 1.3 %

Changes in unrecognized tax benefits

Total $ 2,458 ( 6.4 ) %

(1) State taxes in Texas and New York for the year ended May 30, 2026 made up the majority (greater than 50%) of the tax effect in this category.

The following table presents the required disclosures prior to the Company’s adoption of ASU 2023-09 and reconciles the U.S.

federal statutory income tax rate to the worldwide effective income tax rate for the years ended May 31, 2025 and May 25, 2024 (in thousands):

For the Years Ended

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international tax impact, net of credits

( 0.3 ) 0.9 0.4

Contingent consideration

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rates fluctuates year over year due to the changes in the mix of operating income and losses amongst the various states and foreign jurisdictions in which we operate.

Our accounting policy is to recognize the U.S.

The Company's accounting policy is to recognize the U.S.

tax effects of global intangible low-taxed income as a component of income tax expense in the period it arises.

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Income Taxes Paid

The Company included the following table as a result of the adoption of ASU 2023-09, which represents income taxes paid (net of refunds received) for the year ended May 30, 2026 (in thousands):

For the Year Ended

Federal $ ( 3,207 )

Total $ ( 1,206 )

The components of the net deferred tax asset (liability) consist of the following (in thousands):

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Capital loss carryforwards

State taxes - 113

Property and equipment 517 520

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ROU asset ( 4,343 ) ( 5,834 )

Outside basis difference - Sweden investment - ( 262 )

Goodwill and intangibles - ( 19,830 )

Deferred tax on foreign earnings ( 186 ) -

Net deferred tax asset $ 9,154 $ 9,188

The Organisation for Economic Co-operation and Development ( “ OECD ” ) has released an Inclusive Framework on Base Erosion and Profit Shifting including Pillar Two Model Rules to reform international corporate taxation and introduce a new 15% global minimum tax applicable to large multinational corporations.

Certain jurisdictions have enacted or substantively enacted the Pillar Two legislations.

We have considered the applicability of such global implementations and determined that it does not have a material impact on our consolidated financial statements in fiscal 2025.

We will continue to monitor and evaluate global implementation of Pillar Two legislations.

Additionally, we are continuing to monitor new guidance with regard to the new corporate alternative minimum tax ( “ CAMT ” ) and its applicability.

We have considered the applicability of the CAMT and determined that it does not have a material impact on our consolidated financial statements in fiscal 2025.

The Company recognized a tax benefit of approximately $ 1.5 million, $ 1.3 million and $ 2.1 million for the years ended May 31, 2025, May 25, 2024 and May 27, 2023, respectively, associated with the exercise of nonqualified stock options, vesting of restricted stock awards, restricted stock units, performance-based stock units, and disqualifying dispositions by employees of shares acquired under the Company's Employee Stock Purchase Plan.

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On July 4, 2025, One Big Beautiful Bill Act (“OBBBA”) was signed into law.

Among other changes, OBBBA makes permanent several expiring provisions from the Tax Cuts and Jobs Act of 2017, restores favorable tax treatment of various business provisions, and modifies the international tax regime.

The legislation has varying effective dates, with certain provisions effective in fiscal 2026 and others implemented through fiscal 2027.

The tax effects of the enacted legislation are reflected in the year of enactment ended May 30, 2026, and there was no material impact on the Company's income tax provision.

The Company will continue to monitor and assess the impact of OBBBA on its consolidated financial statements.

The Company has tax-effected foreign net operating loss carryforwards of $ 19.2 million ($ 76.6 million on a gross basis), tax-effected federal net operating loss carryforwards of $ 6.1 million, tax-effected state net operating loss carryforwards of $ 1.9 million, capital loss carryforwards of $ 1.6 million, and foreign tax credit carryforwards of $ 0.5 million.

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Given the current economic outlook, management believes there is a reasonable possibility that within the next 12 months, sufficient evidence may become available to allow it to reach a conclusion to establish or release a valuation allowance on the deferred tax assets of certain foreign entities.

We repatriated $ 2.9 million from our Japan subsidiary during the year ended May 31, 2025.

Remaining unremitted earnings as of May 31, 2025 in our Japan subsidiary are intended to be indefinitely reinvested in our Japan subsidiary's operations and growth.

Going forward, the indefinite reversal criteria will apply only to the portion of our Japan subsidiary’s unremitted earnings that are needed for its ongoing operations and growth.

Deferred income taxes have not been provided on the undistributed earnings of approximately $ 30.4 million from the Company's foreign subsidiaries as of May 31, 2025 since these amounts are intended to be indefinitely reinvested in foreign operations.

If the earnings of the Company's foreign subsidiaries were to be distributed, management estimates that the income tax impact would be immaterial as a result of the transition tax and federal dividends received deduction for foreign source earnings provided under the US Tax Cuts and Jobs Act of 2017.

As of May 30, 2026, the Company recorded an estimated deferred tax liability of approximately $ 0.2 million in relation to the portion of undistributed earnings that are expected to be repatriated in the foreseeable future.

Deferred income taxes have not been provided on the remaining undistributed earnings of approximately $ 27.0 million from the Company's foreign subsidiaries since these amounts are intended to be indefinitely reinvested in foreign operations.

If the earnings of the Company's foreign subsidiaries were to be distributed, management estimates that the income tax impact would primarily be related to foreign withholding taxes.

The following table summarizes the activity related to the gross unrecognized tax benefits (in thousands):

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Unrecognized tax benefits, end of year $ 1,195 $ 1,115 $ 1,033

The Company’s total liability for unrecognized gross tax benefits was $ 1.1 million, $ 1.0 million and $ 1.0 million as of May 31, 2025, May 25, 2024 and May 27, 2023, respectively, which, if ultimately recognized, any differences in assessment or non-assessment would impact the effective tax rate in future periods.

The unrecognized tax benefits are

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included in long-term liabilities in the Consolidated Balance Sheets.

The Company’s total liability for unrecognized gross tax benefits, including accrued interest and penalties, was $ 1.2 million, $ 1.1 million and $ 1.0 million as of May 30, 2026, May 31, 2025 and May 25, 2024, respectively, which, if ultimately recognized, any differences in assessment or non-assessment would impact the effective tax rate in future periods.

The unrecognized tax benefits are included in long-term liabilities in the Consolidated Balance Sheets.

None of the unrecognized tax benefits are short-term liabilities as management does not anticipate any cash payments within 12 months to settle the liability.

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The Company recognizes interest and penalties related to unrecognized tax benefits as a part of its provision for income taxes.

During the fiscal years ended May 31, 2025, May 25, 2024 and May 27, 2023, the Company accrued interest of $ 82,000 , $ 71,000 and $ 54,000 , respectively, as a component of the liability for unrecognized tax benefits.

During the years ended May 30, 2026, May 31, 2025 and May 25, 2024, the Company accrued interest of $ 80,000 , $ 82,000 and $ 71,000 , respectively, as a component of the liability for unrecognized tax benefits.

The Company's cumulative accrued interest was $ 348,000 , $ 267,000 and $ 185,000 as of May 30, 2026, May 31, 2025 and May 25, 2024, respectively.

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Stockholders' Equity

Summary of Rights and Key Provisions

As of May 30, 2026, the authorized capital stock of the Company consists of 70,000 shares of common stock, par value $ 0.01 per share, and 5,000 shares of undesignated preferred stock, par value $ 0.01 per share.

The holders of common stock are entitled to one vote per share on all matters to be voted on by the stockholders.

After payment of any dividends due and owing to the holders of preferred stock, holders of common stock are entitled to receive dividends declared by the Company's Board of Directors out of funds legally available for dividends.

In the event of the Company's liquidation, dissolution or winding up, holders of common stock are entitled to share in all assets remaining after payment of liabilities and liquidation preferences of outstanding shares of preferred stock.

Holders of common stock have no preemptive, conversion, subscription or other rights.

There are no redemption or sinking fund provisions applicable to the common stock.

All outstanding shares of common stock are fully paid and nonassessable.

Preferred Stock

The Company's Board of Directors may, without further action by the Company’s stockholders, to issue up to 5,000,000 shares of preferred stock.

The Company's Board of Directors may issue preferred stock in one or more series and may determine the rights, preferences, privileges, qualifications and restrictions granted to or imposed upon the preferred stock, including dividend rights, conversion rights, voting rights, rights and terms of redemption, liquidation preferences and sinking fund terms, any or all of which may be greater than the rights of the common stock.

The issuance of preferred stock could adversely affect the voting power of holders of common stock and reduce the likelihood that common stockholders will receive dividend payments and payments upon liquidation.

The issuance of preferred stock could also have the effect of decreasing the market price of the common stock and could delay, deter or prevent a change in control of the Company.

However, it is not possible to state the actual effect of the issuance of any shares of the Company's preferred stock on the rights of holders of the Company's common stock until the Company's Board of Directors determines the specific rights attached to that class or series of preferred stock.

Stock Repurchase Program

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Repurchases under the programs may take place in the open market or in privately negotiated transactions and may be made pursuant to a Rule 10b5-1 plan.

During the years ended May 31, 2025 and May 25, 2024, respectively, the Company purchased 1,382,820 and 606,254 shares of its common stock on the open market at an average price of $ 9.40 and $ 13.20 per share, for an aggregate total purchase price of approximately $ 13.0 million and $ 8.0 million.

Pursuant to the Stock Repurchase Programs, the Company may repurchase shares at the discretion of the Company’s senior executives based on numerous factors, including, without limitation, share price and other market conditions, the Company’s ongoing capital allocation planning, the levels of cash and debt balances, and other demands for cash.

The Company records the shares repurchased as treasury stock based on the amount paid to repurchase its shares.

Direct costs incurred to acquire treasury stock are treated like stock issue costs and added to the cost of the treasury stock.

When the repurchase price is greater than the original issue proceeds, the excess is charged to retained earnings.

The Company uses the weighted-average cost flow assumption to identify and assign the original issue proceeds to the cost of the repurchased and retired treasury shares.

No shares of the Company's common stock were purchased under the Stock Repurchase Programs during the year ended May 30, 2026.

During the year ended May 31, 2025, the Company purchased 1,382,820 shares of its common stock on the open market at an average price of $ 9.40 per share, for an aggregate total purchase price of approximately $ 13.0 million.

As of May 30, 2026, approximately $ 79.2 million remained available for future repurchases of the Company’s common stock under the Stock Repurchase Programs.

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Quarterly Dividend

Subject to approval each quarter by its Board of Directors, the Company pays a regular dividend.

Subject to approval each quarter by the Company's Board of Directors, the Company pays a regular dividend.

On April 28, 2026, the Board of Directors approved a regular quarterly dividend of $ 0.07 per share of the Company’s common stock.

The dividend was paid on July 21, 2025 to stockholders of record at the close of business on June 23, 2025.

As of May 31, 2025 and May 25, 2024, approximately $ 2.3 million and $ 4.7 million was accrued and recorded in other current liabilities in each of the Company’s Consolidated Balance Sheets for dividends declared but not yet paid.

Continuation of the quarterly dividend is at the discretion of the Board of Directors and depends upon the Company’s financial condition, results of operations, capital requirements, general business condition, contractual restrictions contained in the Company’s current credit agreements and other agreements, and other factors deemed relevant by the Board of Directors.

The dividend was paid on June 19, 2026 to stockholders of record at the close of business on May 21, 2026.

As of May 30, 2026 and May 31, 2025, approximately $ 2.4 million and $ 2.3 million, respectively, was accrued and recorded in other current liabilities in the Company’s Consolidated Balance Sheets for dividends declared but not yet paid.

Continuation of the quarterly dividend is at the discretion of the Board of Directors and depends upon the Company’s financial condition, results of operations, capital requirements, general business condition, contractual restrictions contained in the 2026 Credit Facility and other agreements, and other factors deemed relevant by the Board of Directors.

Loss Per Common Share

The Company presents both basic and diluted earnings (loss) per share (“EPS”).

Basic EPS is calculated by dividing net income (loss) by the weighted-average number of common shares outstanding during the period.

Diluted EPS is based upon the weighted-average number of common shares and potentially dilutive common shares outstanding during the period.

Potentially dilutive shares of common stock include the assumed exercise of outstanding in-the-money stock options, assumed issuance of common stock under the ESPP, assumed release of outstanding restricted stock awards (“RSAs”), restricted stock units (“RSUs”) and performance stock units (“PSUs”) using the treasury stock method.

However, potentially dilutive shares of common stock are excluded from the computation in periods in which they have an anti-dilutive effect.

During the year ended May 30, 2026, the Company incurred a net loss, and as a result potentially dilutive common shares issuable from the assumed exercise of stock options and the assumed release of shares of common stock under the outstanding ESPP, RSAs, RSUs, and PSUs awards were not included in the diluted shares used to calculate net loss per share, as their inclusion would have been anti-dilutive.

The following table summarizes the calculation of net loss per common share for the years ended May 30, 2026, May 31, 2025 and May 25, 2024 (in thousands, except per share amounts):

For the Years Ended

Net income (loss)

$ ( 40,601 ) $ ( 191,780 ) $ 21,034

Weighted average shares outstanding:

Basic weighted-average shares outstanding

33,551 33,063 33,445

Potentially dilutive stock options

Potentially dilutive employee stock purchase plan

Potentially dilutive restricted stock awards

Potentially dilutive restricted stock units

Potentially dilutive performance stock units

Diluted weighted-average shares outstanding

33,551 33,063 33,895

Net income (loss) per common share:

$ ( 1.21 ) $ ( 5.80 ) $ 0.63

$ ( 1.21 ) $ ( 5.80 ) $ 0.62

Anti-dilutive shares not included above 2,283 2,730 2,152

Revenue Recognition

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Contract assets represent the Company’s rights to consideration for completed performance under the contract (e.g., unbilled receivables), in which the Company has transferred control of the product or services before there is an unconditional right to payment.

Contract assets were $ 30.7 million, $ 29.3 million, and $ 35.4 million as of May 31, 2025, May 25, 2024, and May 27, 2023, respectively, which were included in trade accounts receivable in the Consolidated Balance Sheets.

Contract liabilities represent deferred revenue when cash is received in advance of performance and are presented in other liabilities in the Consolidated Balance Sheets.

Contract liabilities were $ 4.3 million, $ 3.5 million, and $ 3.1 million as of May 31, 2025, May 25, 2024, and May 27, 2023, respectively.

Contract assets were $ 21.3 million and $ 30.7 million as of May 30, 2026 and May 31, 2025, respectively, which were included in trade accounts receivable in the Consolidated Balance Sheets.

Contract liabilities represent deferred revenue when cash is received in advance of performance and are presented in other current liabilities in the Consolidated Balance Sheets.

Contract liabilities were $ 4.3 million as of both May 30, 2026 and May 31, 2025.

Revenues recognized during the year ended May 30, 2026 that were included in deferred revenues as of May 31, 2025 were $ 3.2 million.

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Revenues recognized during the year ended May 25, 2024 that were included in deferred revenues as of May 27, 2023 were $ 2.5 million.

Restructuring Activities

During fiscal 2024, the Company initiated a cost reduction plan, including a reduction in force (the “U.S.

Restructuring Plan”) intended to reduce costs and streamline operations, which resulted in a reduction of approximately 12 % of the Company’s U.S.

management and administrative workforce.

The Company incurred employee termination costs of $ 4.1 million associated with the U.S.

Restructuring Plan within its RGP segment during the year ended May 25, 2024, which were recorded in selling, general and administrative expenses in its Consolidated Statements of Operations.

Restructuring Plan was substantially completed during the year ended May 25, 2024.

The Restructuring adjustments and costs of $( 0.4 ) million for the year ended May 27, 2023 related to restructuring efforts in previous fiscal years.

In December, 2024, the Company authorized a global cost reduction plan, including a reduction in force (the “2025 Restructuring Plan”) intended to reduce costs and streamline operations.

In May 2025, the Company authorized additional global cost reductions.

Restructuring and Transformation Initiative

In fiscal 2026, the Company engaged in a transformation initiative to redesign and streamline its operating model to achieve a reduced cost structure, as well as integrate Reference Point's consulting capabilities into the existing consulting business to form a more cohesive consulting segment (the "2026 Transformation Initiative").

As part of this initiative, the Company conducted a comprehensive review of its global operations.

In connection with this effort, the Company executed workforce reductions in October 2025 (the "October RIF") and January 2026 (the "January RIF") affecting management and administrative roles, aimed at improving efficiency, reducing costs and streamlining operations.

In addition to the reductions in force, the Company identified additional cost savings through exiting and subleasing a certain office space, resulting in an impairment charge of $ 0.9 million.

See Note 2 – Summary of Significant Accounting Policies for further information.

Activity under the 2026 Transformation Initiative represents ongoing benefit arrangements, which are accounted for under ASC 712.

All costs associated with the 2026 Transformation Initiative were recorded in selling, general and

administrative expenses in the Company's Consolidated Statements of Operations.

The components of the restructuring charges related to the 2026 Transformation Initiative are included in the table below (in thousands):

For the Years Ended

Severance and benefits (1)

Professional fees 1,071

Right-of-use asset impairment 942

(1) Severance and benefits include costs of $ 2.1 million and $ 4.3 million related to the October RIF and the January RIF, respectively.

The liability for restructuring charges as of May 30, 2026 under the 2026 Transformation Initiative was related to severance and benefits costs incurred for the January RIF and was recorded in accounts payable and other accrued expenses on the Company's Consolidated Balance Sheets.

The table below summarizes the restructuring liability (in thousands):

Employee Termination Costs

Balance as of May 31, 2025 $ -

Restructuring charges (Severance and benefits) 4,343

Payments ( 2,085 )

Balance as of May 30, 2026

The Company currently expects its transformation efforts to be substantially complete in the first half of fiscal 2027, though the scope, timing, and impact of such actions may evolve as the review progresses.

On December 2, 2024, the Company authorized a global cost reduction plan, including a reduction in force (the “2025 Restructuring Plan”) intended to reduce costs and streamline operations.

The 2025 Restructuring Plan resulted in a reduction of force of the Company’s global management and administrative workforce.

The Company incurred employee termination costs associated with the 2025 Restructuring Plan, which were recorded in selling, general and administrative expenses in its Consolidated Statements of Operations.

Restructuring costs were $ 5.1 million for the year ended May 31, 2025 .

The restructuring liability was nominal and $ 0.8 million as of May 31, 2025 and May 25, 2024, respectively.

The Company incurred employee termination costs of $ 5.1 million associated with the 2025 Restructuring Plan for the year ended May 31, 2025, which were recorded in selling, general and administrative expenses in the Company's Consolidated Statements of Operations.

The restructuring liability related to the 2025 Restructuring Plan was nominal as of May 31, 2025.

Stock-Based Compensation Plans

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The maximum number of shares of the Company’s common stock that may be issued or transferred pursuant to awards under the 2020 Plan equals:

(1) 815,000 shares, plus (2) 1,797,440 (which represents the number of shares that were available for additional award grant

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purposes under the 2014 Plan immediately prior to the termination of the authority to grant new awards under the 2014 Plan as of October 22, 2020), plus (3) the number of any shares subject to stock options granted under the 2014 Plan or the Resources Connection, Inc.

2004 Performance Incentive Plan (together with the 2014 Plan, the “Prior Plans”) and outstanding as of October 22, 2020 which expire, or for any reason are cancelled or terminated, after that date without being exercised, plus (4) the number of any shares subject to restricted stock and restricted stock unit awards granted under the Prior Plans that are outstanding and unvested as of October 22, 2020 which are forfeited, terminated, cancelled, or otherwise reacquired after that date without having become vested.

(1) 815,000 shares, plus (2) 1,797,440 (which represents the number of shares that were available for additional award grant purposes under the 2014 Plan immediately prior to the termination of the authority to grant new awards under the 2014 Plan as of October 22, 2020), plus (3) the number of any shares subject to stock options granted under the 2014 Plan or the Resources Connection, Inc.

2004 Performance Incentive Plan (together with the 2014 Plan, the “Prior Plans”) and outstanding as of October 22, 2020 which expire, or for any reason are cancelled or terminated, after that date without being exercised, plus (4) the number of any shares subject to RSA and RSU awards granted under the Prior Plans that are outstanding and unvested as of October 22, 2020 which are forfeited, terminated, cancelled, or otherwise reacquired after that date without having become vested.

Awards under the 2020 Plan may include, but are not limited to, stock options, stock appreciation rights, restricted stock, performance stock, stock units, stock bonuses and other forms of awards granted or denominated in shares of common stock or units of common stock, as well as certain cash bonus awards .

Historically, the Company has granted restricted stock, restricted stock units and stock option awards under the 2020 Plan that typically vest in equal annual installments, and performance stock unit awards under the 2020 Plan that vest upon the achievement of certain Company-wide performance targets at the end of the defined performance period.

Historically, the Company has granted RSA, RSUs and stock option awards under the 2020 Plan that typically vest in equal annual installments, and PSU awards under the 2020 Plan that vest upon the achievement of certain Company-wide performance targets at the end of the defined performance period.

Stock option grants typically terminate ten years from the date of grant.

Vesting periods for restricted stock, restricted stock units and stock option awards range from three years to four years .

The performance period for the performance stock unit awards is three years .

As of May 31, 2025, there were 1,308,213 shares available for further award grants under the 2020 Plan.

Vesting periods for RSA, RSU and stock option awards range from three to four years .

The performance period for the PSU awards is three years .

As of May 30, 2026, there were 927,662 shares available for further award grants under the 2020 Plan (with outstanding PSUs counted for this purpose based on the target number of shares granted).

Stock-Based Compensation Expense

Stock-based compensation expense included in selling, general and administrative expenses was $ 6.8 million, $ 5.7 million and $ 9.5 million for the years ended May 31, 2025, May 25, 2024 and May 27, 2023, respectively.

These amounts consisted of stock-based compensation expense related to employee stock options, restricted stock awards, restricted stock unit awards and performance stock unit awards under the 2020 Plan and Prior Plans, employee stock purchases made via the ESPP, and stock units credited under the Directors Deferred Compensation Plan.

The Company recognized a tax benefit of approximately $ 1.6 million, $ 1.1 million, and $ 2.0 million, associated with such stock-based compensation expense for the years ended May 31, 2025, May 25, 2024, and May 27, 2023, respectively.

The Company recognizes stock-based compensation expense on time-vesting equity awards ratably over the applicable vesting period based on the grant date fair value, net of estimated forfeitures.

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Any resulting changes to stock compensation expense are adjusted in the period in which the change in estimates occur.

Stock-based compensation expense included in selling, general and administrative expenses was $ 11.6 million, $ 6.8 million and $ 5.7 million for the years ended May 30, 2026, May 31, 2025 and May 25, 2024, respectively.

These amounts consisted of stock-based compensation expense related to employee stock options, RSAs, RSU awards and PSU awards under the 2020 Plan and Prior Plans, employee stock purchases made via the ESPP, and stock units credited under the Directors Deferred Compensation Plan.

Stock-based compensation expense for the year ended May 30, 2026 also included the impact of accelerated expense recognition of stock awards related to the separation of the Company's former CEO pursuant to ASC 718.

Stock-Based Award Acceleration

In connection with the separation of the Company's former CEO, Ms.

Duchene's then-outstanding and unvested equity awards accelerated and vested upon her termination date of January 3, 2026.

Her outstanding PSUs vested based on the applicable “target” number of shares subject to the award.

The Company recognized all remaining fair value of Ms.

Duchene's unvested equity awards in the second quarter of fiscal 2026, which totaled $ 3.1 million and is recorded in selling, general and administrative expenses in the Consolidated Statements of Operations.

In connection with the separation of the Company's former COO, Mr.

Patel's then-outstanding and unvested equity awards accelerated and vested upon his termination date of May 15, 2026.

His outstanding PSUs vested based on the applicable “target” number of shares subject to the award.

The Company recognized all remaining fair value of Mr.

Patel's unvested equity awards in the fourth quarter of fiscal 2026, which totaled $ 1.5 million and is recorded in selling, general and administrative expenses in the Consolidated Statements of Operations.

Stock Options

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Awards outstanding at May 31, 2025 1,527 $ 16.89 2.62 $ -

2,185 $ 16.36 3.21 $ -

Exercised - -

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Awards outstanding at May 30, 2026 1,050 $ 17.18 2.01 $ -

1,527 $ 16.89 2.62 $ -

Exercisable at May 30, 2026 1,050 $ 17.18 2.01 $ -

1,527 $ 16.89 2.62 $ -

Vested and expected to vest as of May 30, 2026 (1)

1,050 $ 17.18 2.01 $ -

(1) The expected to vest options are the result of applying the pre-vesting forfeiture rate assumptions to options not yet vested.

As of May 31, 2025, all outstanding options have met the vesting requirement.

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(1) As of May 30, 2026, all outstanding options have vested, and there was no unrecognized compensation cost related to unvested and outstanding employee stock options.

The aggregate intrinsic value represents the total pre-tax intrinsic value, based on the Company’s closing stock price of $ 4.52 as of May 29, 2026 (the last trading day of fiscal 2026), which would have been received by the option holders had all option holders exercised their options as of that date.

The total pre-tax intrinsic value related to stock options exercised during the years ended May 25, 2024 and May 27, 2023 was $ 0.5 million and $ 11.9 million, respectively.

The total estimated fair value of stock options that vested during the years ended May 25, 2024 and May 27, 2023 was $ 0.3 million and $ 1.2 million, respectively.

There were no stock options exercised during the year ended May 31, 2025.

As of May 31, 2025, there was no unrecognized compensation cost relate d to unvested and outstanding employee stock options.

The total pre-tax intrinsic value related to stock options exercised during the years ended May 25, 2024 was $ 0.5 million.

The total estimated fair value of stock options that vested during the years ended May 25, 2024 was $ 0.3 million.

There were no stock options exercised during the year ended May 30, 2026 and May 31, 2025, respectively.

Valuation and Expense Information for Stock Based Compensation Plans

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Restricted Stock Awards

The following table summarizes the activities for the unvested restricted stock awards for the year ended May 31, 2025 (in thousands, except weighted average grant-date fair value):

The following table summarizes the activities for the RSAs for the year ended May 30, 2026 (in thousands, except weighted average grant-date fair value):

Shares Weighted-Average Grant-Date Fair Value

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Expected to vest as of May 30, 2026 169 $ 6.73

As of May 31, 2025, there was $ 2.3 million of total unrecognized compensation cost related to unvested restricted stock awards.

As of May 30, 2026, there was $ 0.9 million of total unrecognized compensation costs related to RSAs.

The cost is expected to be recognized over a weighted-average period of 1.63 years.

The weighted average estimated fair value per share of restricted stock awards granted during the years ended May 31, 2025, May 25, 2024 and May 27, 2023 was $ 8.91 , $ 13.79 and $ 18.31 , respectively.

Restricted Stock Units (“RSUs”)

The weighted average estimated fair value per share of RSA granted during the years ended May 30, 2026, May 31, 2025 and May 25, 2024 was $ 5.12 , $ 8.91 and $ 13.79 , respectively.

In 2018, the Company adopted the amended and restated Directors Deferred Compensation Plan, which provides the non-employee members of the Company’s Board of Directors with the opportunity to defer certain cash compensation and equity awards earned or granted for their service in the form of stock units (“Stock Units”).

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Stock Units credited to a director pursuant to an election to defer cash compensation (and any dividend equivalents credited thereon) are fully vested at all times.

Stock Units credited to a director pursuant to an election to defer an equity award are subject to the vesting conditions applicable to the equity award, except that dividend equivalents credited to a director with respect to

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such Stock Units are vested at all times.

These liability-classified awards are re-measured at each reporting date and on settlement using the closing price of the Company’s common stock on that date.

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The Company recognizes stock-based compensation expense on these Stock Units using the straight-line method over the requisite service period.

The Company also grants RSUs to its employees under the 2020 Plan, which are classified as equity awards.

The following table summarizes the activities for the unvested RSUs, including both equity- and liability-classified RSUs, for the year ended May 31, 2025 (in thousands, except weighted average grant-date fair value):

Equity-Classified RSUs Liability-Classified RSUs Total RSUs

The Company may issue stock units that are either equity-classified, which are awards of RSUs granted to employees under the 2020 Plan that settle in shares of the Company’s common stock, or liability-classified, which are awards of Stock Units credited to Board of Director members under the Directors Deferred Compensation Plan that settle in cash.

The following table summarizes the activities for the unvested stock units, including both equity-classified RSUs and liability-classified Stock Units, for the year ended May 30, 2026 (in thousands, except weighted average grant-date fair value):

Equity-Classified RSUs Liability-Classified Stock Units Total

Shares Weighted-Average Grant-Date Fair Value Shares Weighted-Average Grant-Date Fair Value Shares Weighted-Average Grant-Date Fair Value

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Expected to vest as of May 30, 2026 2,245 $ 5.11 67 $ 7.50 2,312 $ 5.18

(1) The dividend equivalents are included in the granted shares.

As of May 31, 2025, there was $ 8.8 million of total unrecognized compensation cost related to unvested RSUs (which are the RSUs granted under the 2020 Plan that settle in shares of the Company’s common stock).

(1) Dividend equivalents are included in the granted shares.

As of May 30, 2026, there was $ 8.8 million of total unrecognized compensation costs related to unvested equity-classified RSUs.

The cost is expected to be recognized over a weighted-average period of 1.67 years.

As of May 31, 2025, there was $ 0.6 million of total unrecognized compensation cost related to unvested liability-classified RSUs (which are the stock units credited under the Directors Deferred Compensation Plan that settle in cash).

That cost is expected to be recognized over a weighted average period of 1.78 years.

The weighted average estimated fair value per share of RSUs granted during the years ended May 31, 2025, May 25, 2024 and May 27, 2023 was $ 9.90 , $ 13.54 and $ 18.27 , respectively.

Performance Stock Units (“PSUs”)

As of May 30, 2026, there was $ 0.4 million of total unrecognized compensation costs related to unvested liability-classified Stock Units.

The cost is expected to be recognized over a weighted average period of 1.15 years.

The weighted average estimated fair value per share of RSUs and Stock Units granted during the years ended May 30, 2026, May 31, 2025 and May 25, 2024 was $ 4.42 , $ 9.90 and $ 13.54 , respectively.

Performance Stock Units

The Company granted PSUs to certain members of management and other select employees.

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(1) Shares are presented at the stated target, which represents the base number of shares that would vest.

Actual shares that vest may be 0 - 150 % of the target based on the achievement of the specific company-wide performance targets.

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(2) The dividend equivalents are included in the granted shares.

As of May 31, 2025, there was no unrecognized compensation cost related to unvested PSUs.

Actual shares that vest may be zero - 150 % of the target based on the achievement of the specific company-wide performance targets.

(2) Dividend equivalents are included in the granted shares.

As of May 30, 2026, there was no unrecognized compensation costs related to unvested PSUs.

The Company maintains the Resources Global Professionals 401(k) Savings Plan, a defined contribution plan (the “401(k) Plan”) which generally covers all employees in the U.S.

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Segment Information and Enterprise Reporting

During the first quarter of fiscal 2025, the Company reorganized its business segments to better align with changes in its internal operating model and financial reporting, which is used for performance assessment and resource allocation by the CODMs.

All prior year periods presented were recast to reflect the impact of the preceding segment changes.

See Note 2 – Summary of Significant Accounting Policies for further discussion about the Company’s operating and reportable segments.

For fiscal 2026, the Company's operating segments were as follows:

• On-Demand Talent – provides businesses with a go-to source for bringing in experts when they need them, serving predominantly the office of the CFO.

• Consulting – drives transformation across people, processes and technology across domain areas including finance, technology and digital, risk and compliance and operational performance.

• Europe & Asia Pacific – geographically defined segment that offers both on-demand and consulting services (excluding the digital consulting business, which is included in our Consulting segment) to clients throughout Europe & Asia Pacific.

• Sitrick – a crisis communications and public relations firm that provides corporate, financial, transactional and crisis communication and management services.

Each of these operating segments reports through separate segment managers to the Company's Chief Executive Officer, who is designated as the CODM for segment reporting purposes.

The Company's reportable segments are comprised of On-Demand Talent, Consulting, Europe & Asia Pacific, and Outsourced Services.

Sitrick did not individually meet the quantitative thresholds to qualify as a reportable segment.

Therefore, Sitrick is disclosed under the “All Other” segment.

As a result of the sale of Sitrick, the “All Other” segment was eliminated as of May 30, 2026.

The sale did not represent a strategic shift in the Company's business and therefore it did not meet the criteria for classification as discontinued operations.

The Company has presented the results of the All Other segment through the date the sale was completed for the year ended May 30, 2026.

Following the sale, the Company received no new income from Sitrick, other than rent for sub-lease of office buildings, and had no further involvement or continuing influence over its operations.

The tables below reflect the operating results of the Company’s segments consistent with the management and performance measurement system utilized by the Company.

Performance measurement is based on segment Adjusted EBITDA, a non-GAAP measure.

Adjusted EBITDA is defined as net income (loss) before amortization expense, depreciation expense, interest and income taxes excluding stock-based compensation expense, amortized Enterprise Resource Planning (“ERP”) system costs, technology transformation costs, goodwill impairment, acquisition costs, gain on sale of assets, and restructuring costs.

Performance measurement is based on segment Adjusted EBITDA.

Adjusted EBITDA at the segment level excludes certain shared corporate administrative costs that are not practical to allocate.

The Company’s CODMs do not evaluate segments using asset information.

The Company’s CODM does not evaluate segments using asset information.

See Note 2 — Summary of Significant Accounting Policies for a description of the Company's CODM.

The table below represents a reconciliation of the Company’s net income (loss) to Adjusted EBITDA for all periods presented (in thousands):

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For the Years Ended

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Gain on sale of assets (6)

Restructuring cost (7)

Restructuring costs (7)

( 8,446 ) ( 5,061 ) ( 4,087 )

Executive transition costs (8)

( 12,232 ) - -

Sitrick related transaction costs (9)

( 7,142 ) - -

Contingent consideration adjustment (10)

Amortization expense ( 3,829 ) ( 5,880 ) ( 5,378 )

Depreciation expense ( 1,325 ) ( 1,868 ) ( 3,050 )

Contingent consideration adjustment (8)

Interest income, net 615 544 1,064

Income (loss) before income tax benefit (expense)

Income (loss) before income tax expense (benefit)

( 38,143 ) ( 196,075 ) 29,829

Income tax benefit (expense)

Income tax expense (benefit)

( 2,458 ) 4,295 ( 8,795 )

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$ ( 40,601 ) $ ( 191,780 ) $ 21,034

(1) Unallocated items are generally comprised of unallocated corporate administrative costs, including management and board compensation, corporate support function costs and other general corporate costs that are not allocated to segments.

(2) Amortized ERP system costs represent the amortization of capitalized technology transformation costs related to newly implemented ERP system, which was recorded within selling, general, and administrative expenses on the Consolidated Statement of Operations.

(1) Unallocated items are generally comprised of u nallocated corporate administrative costs, including management and board compensation, corporate support function costs and other general corporate costs that are not allocated to segments.

(2) Amortized ERP system costs represent the amortization of capitalized technology transformation costs related to newly implemented ERP system, which was recorded within SG&A expenses on the Consolidated Statements of Operations.

(3) Technology transformation costs represent costs included in net income (loss) related to the Company’s initiative to upgrade its technology platform globally, including a cloud-based ERP system and talent acquisition and management systems.

Such costs primarily include hosting and certain other software licensing costs, third-party consulting fees and costs associated with dedicated internal resources that are not capitalized.

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(4) Acquisition costs primarily represent costs included in net income (loss) related to the Company’s business acquisition.

(4) Acquisition costs primarily represent costs included in net income (loss) related to the Company’s business acquisition of Reference Point.

These costs include transaction bonuses, cash retention bonus accruals, and fees paid to the Company's broker, legal counsel, and other professional services firms.

See Note 3 – Acquisitions and Dispositions for further discussion.

(5) The effect of the goodwill impairment charge recognized during the year ended May 31, 2025 was related to the On-Demand Talent, Consulting, and Europe and Asia Pacific segments and during the year ended May 27, 2023 related to the Sitrick segment.

(5) Goodwill impairment charges recognized during the year ended May 31, 2025 were related to the On-Demand Talent, Consulting and Europe & Asia Pacific segments.

See Note 4 – Goodwill and Intangible Assets for further discussion.

(6) Gain on sale of assets was related to the Company’s sale of its Irvine office building, which was completed on August 15, 2024.

(7) Restructuring costs for the year ended May 31, 2025 related to the 2025 Restructuring Plan, which were authorized in December 2024 and May 2025.

Restructuring costs for the year ended May 25, 2024 related to U.S.

Restructuring Plan, which was authorized in October 2023, and was substantially completed during fiscal 2024.

The restructuring credits for the year ended May 27, 2023 related to the release of accrued restructuring liabilities upon completion of the global restructuring and business transformation plans from fiscal 2021.

(8) Contingent consideration adjustment related to the remeasurement of contingent liabilities related to the CloudGo acquisition.

The tables below disclose the Company’s revenue, gross profit, significant expenses, Adjusted EBITDA, gross margin and Adjusted EBITDA margin by segment (amount in thousands):

(7) Restructuring costs during the year ended May 30, 2026 include employee termination costs incurred in workforce reductions, impairment of ROU asset in connection with reduction in office footprint, and non-recurring third-party consulting costs associated with the 2026 Transformation Initiative.

Restructuring costs for the year ended May 31, 2025 related to the 2025 Restructuring Plan.

Restructuring costs for the year ended May 25, 2024 related to the Company's cost reduction plan, including a reduction in force, which was authorized in October 2023, and was substantially completed during fiscal 2024.

(8) Executive transition costs represent non-recurring costs incurred in connection with the separation of the Company's former CEO and former COO.

These costs include $ 7.6 million of cash severance and $ 4.6 million of non-cash stock compensation expense reflecting the acceleration of equity awards pursuant to ASC 718.

(9) Sitrick related transaction costs represent $ 4.1 million of severance expense incurred in connection with the sale of Sitrick, $ 2.4 million of loss on the sale of Sitrick , consisting of a $ 1.5 million non-cash impairment on right-of-use assets and a $ 0.9 million loss, and $ 0.6 million of non-cash stock compensation expense reflecting the acceleration of equity awards.

(10) Contingent consideration adjustment related to the remeasurement of contingent liabilities related to the acquisition of CloudGo Pte Ltd.

and its subsidiaries (collectively, "CloudGo").

The tables below disclose the Company’s revenue, gross profit, significant expenses, and Adjusted EBITDA by segment (amount in thousands):

Year Ended May 30, 2026

On-Demand Talent Consulting Europe and Asia Pacific Outsourced Services All Other

On-Demand Talent Consulting Europe & Asia Pacific

Outsourced Services All Other

Revenue $ 168,796 $ 159,796 $ 75,139 $ 39,206 $ 9,069

6 unchanged sentences

Adjusted EBITDA $ 14,415 $ 13,502 $ 3,470 $ 7,568 $ ( 519 )

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Gross Margin 38.2 % 37.2 % 35.3 % 40.3 % 41.4 %

Adjusted EBITDA margin (3)

8.3 % 14.5 % 5.8 % 19.1 % ( 20.6 ) %

Year Ended May 31, 2025

On-Demand Talent Consulting Europe and Asia Pacific Outsourced Services All Other

On-Demand Talent Consulting Europe & Asia Pacific

Outsourced Services All Other

Revenue $ 205,976 $ 219,215 $ 77,602 $ 39,618 $ 8,920

6 unchanged sentences

Adjusted EBITDA $ 17,116 $ 31,718 $ 4,478 $ 7,581 $ ( 1,838 )

Gross Margin 38.4 % 39.4 % 36.8 % 41.7 % 46.0 %

Adjusted EBITDA margin (3)

11.6 % 16.9 % 6.3 % 20.0 % ( 6.8 ) %

Year Ended May 25, 2024

On-Demand Talent Consulting Europe and Asia Pacific Outsourced Services All Other

On-Demand Talent Consulting Europe & Asia Pacific

Outsourced Services All Other

Revenue $ 272,600 $ 227,967 $ 84,207 $ 38,122 $ 9,905

6 unchanged sentences

Adjusted EBITDA $ 31,673 $ 38,420 $ 5,289 $ 7,641 $ ( 675 )

Gross Margin 40.3 % 41.2 % 37.1 % 41.0 % 50.4 %

Adjusted EBITDA margin (3)

16.2 % 20.6 % 10.6 % 19.0 % 10.4 %

(1) The significant expense category and amounts align with the segment-level information that is regularly provided to the CODMs.

(1) The significant expense category and amounts align with the segment-level information that is regularly provided to the CODM.

(2) Other segment expenses include occupancy expenses, business expenses, marketing expenses, recruiting expenses and other operating expenses.

(3) Segment Adjusted EBITDA Margin is calculated by dividing segment Adjusted EBITDA by segment revenue.

The table below represents the Company’s revenue and long-lived assets by geographic location (in thousands):

Revenue for the Years Ended Long-Lived Assets (1) as of

The table below represents the Company’s revenue by geographic location (in thousands):

Revenue for the Years Ended

United States $ 361,226 $ 451,228 $ 519,869

1 unchanged sentence

Total $ 452,006 $ 551,331 $ 632,801

(1) Long-lived assets are comprised of property and equipment and ROU assets .

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The table below presents the Company's long-lived assets, which consist of property and equipment and ROU assets, by geographic location (in thousands):

Long-Lived Assets as of

May 30, 2026 May 31, 2025

Long-lived assets:

United States $ 18,530 $ 25,297

International 2,200 1,677

Total $ 20,729 $ 26,974

Subsequent Events

On July 2, 2025, the Company, Resources Connection LLC, as borrowers, and all of the Company’s domestic subsidiaries, as guarantors, entered into the New Credit Facility, and concurrently terminated the 2021 Credit Facility.

The New Credit Facility provides for a secured revolving loan, available in an amount up to the lesser of $ 50.0 million and a borrowing base formula tied to eligible receivables, which includes a $ 10.0 million sublimit for the issuance of standby letters of credit.

The New Credit Facility also includes an option to increase the amount of the revolving loan up to an additional $ 15.0 million.

The New Credit Facility will mature on November 30, 2029.

The obligations under the New Credit Facility are secured by substantially all assets of the Company, Resources Connection LLC and all of the Company’s domestic subsidiaries.

Borrowings under the New Credit Facility bear interest at a rate per annum of either, at the Company's election (i) Term SOFR (as defined in the New Credit Facility) plus a margin ranging from 1.25 % to 2.50 % or (ii) the Base Rate (as defined in the New Credit Facility), plus a margin of 0.25 % to 1.50 %, in either case, with the applicable margin depending on the Company's Consolidated EBITDA (as defined in the New Credit Facility).

On July 15, 2026, the Company entered into the 2026 Credit Facility.

The 2026 Credit Facility provides for secured revolving loans, available in an amount up to the lesser of $ 30.0 million and a borrowing base formula tied to eligible receivables and eligible unbilled receivables and subject to established reserves, which includes a $ 5,000,000 sublimit for the issuance of standby letters of credit and a $ 15,000,000 sublimit for swing loans.

The 2026 Credit Facility also includes an uncommitted option at any time prior to the third anniversary of the closing date to increase the amount of the revolving loans up to an additional $ 20.0 million;

provided that the Company may not increase the 2026 Credit Facility more than two times during the term of the 2026 Credit Facility.

The proceeds of the 2026 Credit Facility may be used to pay fees and expenses in connection with the transaction, provide for the Company’s working capital needs and reimburse drawings under letters of credit, finance a portion of future capital expenditures, and finance permitted dividends and distributions.

The 2026 Credit Facility is scheduled to mature July 15, 2031.

The obligations under the 2026 Credit Facility are secured by substantially all assets of the Company and the Company’s domestic subsidiaries.

Borrowings under the 2026 Credit Facility will bear interest at a rate per annum of either, at the Company’s election, (i) Term SOFR (as defined in the 2026 Credit Facility) plus a margin ranging from 1.75 % to 2.25 % or (ii) the Alternate Base Rate (as defined in the 2026 Credit Facility), plus a margin of 0.75 % to 1.25 %, in either case, with the applicable margin depending on the Company’s Consolidated EBITDA (as defined in the 2026 Credit Facility).

The Company is also obligated to pay other customary facility fees for a credit facility of this size and type.

The New Credit Facility contains customary covenants, including covenants that limit or restrict the Company’s and its subsidiaries’ ability to incur liens, incur indebtedness, make certain restricted payments, merge or consolidate and make dispositions of assets and financial covenants to maintain a certain consolidated total net leverage ratio and a consolidated fixed charge coverage ratio.

Upon the occurrence of an event of default under the New Credit Facility, the lender may cease making loans, terminate the New Credit Facility, and declare all amounts outstanding to be immediately due and payable.

The New Credit Facility specifies a number of events of default (some of which are subject to applicable grace or cure periods), including, among other things, non-payment defaults, covenant defaults, cross-defaults to other material indebtedness, bankruptcy and insolvency defaults and material judgment defaults.

On July 4, 2025, One Big Beautiful Bill Act (“OBBBA”) was signed into law.

These changes were not reflected in the income tax provision for fiscal 2025, as enactment occurred after the balance sheet date.

We are currently evaluating the potential impact of OBBBA on our consolidated financial statements going forward.

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The 2026 Credit Facility contains customary covenants, including covenants that limit or restrict the Company’s and its subsidiaries’ ability to incur liens, incur indebtedness, make certain dividends and distributions, merge or consolidate and make dispositions of assets and financial covenants to maintain a certain fixed charge coverage ratio and a certain minimum liquidity.

Upon the occurrence of an event of default under the 2026 Credit Facility, the lenders may cease making loans, terminate the 2026 Credit Facility, and declare all amounts outstanding to be immediately due and payable.

The 2026 Credit Facility specifies a number of events of default (some of which are subject to applicable grace or cure periods), including, among other things, non-payment defaults, covenant defaults, cross-defaults to other material indebtedness, bankruptcy and insolvency defaults and material judgment defaults.

In connection with entry into the 2026 Credit Facility, on July 13, 2026 the Company terminated the 2025 Credit Facility.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

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-K

Item 8. Financial Statements and Supplementary Data