What changed in this filing

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Item 1. Financial Statements

2025-05-12 compared with 2024-11-12 · 223 added, 287 removed, 403 unchanged (56% of the section changed)

3 unchanged sentences

(in thousands, except share and per share data)

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

ASSETS (unaudited)

14 unchanged sentences

Total assets $ 515,214 $ 528,365

LIABILITIES AND EQUITY

LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)

Current liabilities:

11 unchanged sentences

Commitments and contingencies

Shareholders’ equity (deficit):

Preferred stock, 500,000 shares authorized, none issued

Common stock, par value $ 0.30 per share, 12,000,000 shares authorized;

4,421,876 and 4,415,147 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively

4,493,391 and 4,493,338 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively

Additional paid-in capital 460,133 460,186

1 unchanged sentence

Accumulated other comprehensive loss ( 42,063 ) ( 44,129 )

Total equity 17,898 45,596

Total liabilities and equity $ 545,366 $ 565,744

Total shareholders’ equity (deficit) ( 25,967 ) 1,738

Total liabilities and shareholders’ equity (deficit) $ 515,214 $ 528,365

See accompanying notes to unaudited condensed consolidated financial statements.

3 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Revenues $ 198,655 $ 199,600

2 unchanged sentences

Selling, general and administrative expenses 53,269 55,117

Operating income (loss) 3,158 ( 1,258 ) 7,931 ( 4,408 )

Operating loss ( 6,003 ) ( 6,386 )

Interest expense, net ( 11,436 ) ( 12,098 )

Loss on debt extinguishment ( 11,853 ) —

Other (expense) income, net ( 2,010 ) 266 ( 1,189 ) 914

Other income (expense), net ( 204 ) 1,362

Loss before income taxes ( 29,496 ) ( 17,122 )

3 unchanged sentences

Basic and diluted $ ( 6.61 ) $ ( 3.89 )

$ ( 2.52 ) $ ( 2.78 ) $ ( 7.04 ) $ ( 12.07 )

Weighted-average number of shares outstanding:

Basic and diluted 4,493 4,415

4,422 4,368 4,418 4,358

See accompanying notes to unaudited condensed consolidated financial statements.

4 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Net loss $ ( 29,718 ) $ ( 17,195 )

5 unchanged sentences

Other comprehensive income (loss), before tax 2,110 ( 2,775 )

Tax benefit (provision) attributable to other comprehensive income (loss) 83 11 78 ( 35 )

Tax provision attributable to other comprehensive income (loss)

Other comprehensive income (loss), net of tax 2,066 ( 2,775 )

2 unchanged sentences

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (DEFICIT)

(in thousands)

Common Stock Additional

Capital Retained

Earnings (Deficit) Accumulated

Capital Accumulated Deficit Accumulated

Comprehensive

Shareholders’

Shareholders’Equity

Shares Amount

1 unchanged sentence

Net loss — — — ( 29,718 ) — ( 29,718 )

Net settlement of vested stock awards — 10 ( 10 ) — — —

Foreign currency translation adjustment, net of tax — — — — 1,971 1,971

Defined benefit pension plans, net of tax — — — — 95 95

— — — — 87 87

Non-cash compensation — — ( 53 ) — — ( 53 )

Balance at March 31, 2025 4,493 $ 1,348 $ 460,133 $ ( 445,385 ) $ ( 42,063 ) $ ( 25,967 )

Net loss — — — ( 2,763 ) — ( 2,763 )

Net settlement of vested stock awards 7 2 ( 19 ) — — ( 17 )

Foreign currency translation adjustment, net of tax — — — — ( 291 ) ( 291 )

Defined benefit pension plans, net of tax

— — — — 43 43

Non-cash compensation — — 612 — — 612

Balance at June 30, 2024 4,422 $ 1,327 $ 459,862 $ ( 397,359 ) $ ( 39,955 ) $ 23,875

Net loss — — — ( 11,126 ) — ( 11,126 )

Foreign currency translation adjustment, net of tax — — — — 4,592 4,592

Defined benefit pension plans, net of tax

— — — — 90 90

Non-cash compensation — — 467 — — 467

Balance at September 30, 2024 4,422 $ 1,327 $ 460,329 $ ( 408,485 ) $ ( 35,273 ) $ 17,898

Balance at December 31, 2023 4,415 $ 1,315 $ 458,614 $ ( 377,401 ) $ ( 36,932 ) $ 45,596

2 unchanged sentences

Foreign currency translation adjustment, net of tax — — — — ( 2,862 ) ( 2,862 )

Defined benefit pension plans, net of tax — — — — 87 87

Non-cash compensation — — 665 — — 665

Balance at March 31, 2024 4,415 $ 1,325 $ 459,269 $ ( 394,596 ) $ ( 39,707 ) $ 26,291

Net loss ( 15,753 ) ( 15,753 )

Net settlement of vested stock awards 11 4 ( 16 ) — — ( 12 )

Foreign currency translation adjustment, net of tax — — — — 1,254 1,254

Non-cash compensation — — 245 — — 245

Balance at June 30, 2023 4,368 $ 1,311 $ 457,692 $ ( 342,143 ) $ ( 36,988 ) $ 79,872

Net loss — — — ( 12,134 ) — ( 12,134 )

Foreign currency translation adjustment, net of tax — — — — ( 3,355 ) ( 3,355 )

Non-cash compensation — — 232 — — 232

Balance at September 30, 2023 4,368 $ 1,311 $ 457,924 $ ( 354,277 ) $ ( 40,343 ) $ 64,615

See accompanying notes to unaudited condensed consolidated financial statements.

2 unchanged sentences

(in thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows from operating activities:

6 unchanged sentences

Paid-in-kind (“PIK”) interest

11,020 10,906

Allowance for credit losses

2 unchanged sentences

Deferred income taxes ( 491 ) ( 626 )

Loss (gain) on asset disposal

Non-cash compensation costs 1,744 859

Loss on asset disposal

Non-cash compensation costs (credit)

Other, net ( 8 ) ( 204 )

3 unchanged sentences

Prepaid expenses and other assets

( 1,418 ) ( 5,207 )

Accounts payable ( 8,877 ) 340

5 unchanged sentences

Capital expenditures ( 1,406 ) ( 3,016 )

Proceeds from disposal of assets 149 414

Net cash used in investing activities ( 1,406 ) ( 3,016 )

2 unchanged sentences

Payments under Revolving Credit Loans ( 5,018 ) ( 9,909 )

Repayment of Convertible Debt — ( 41,161 )

Repayment of APSC Term Loan — ( 37,092 )

Borrowings under ME/RE Loans — 27,398

Payments under Corre Delayed Draw Term Loan

Payments under Corre Uptiered Loan ( 55,894 ) —

Borrowings under First Lien Term Loan

Payments under ME/RE Loans ( 23,427 ) ( 711 )

Payments under Corre Incremental Term Loan ( 48,015 ) ( 356 )

Borrowings under Corre Incremental Term Loan — 42,500

Payments for debt issuance costs ( 8,053 ) ( 1,400 )

Other ( 705 ) 2,542

Net cash used in financing activities

( 9,927 ) ( 7,395 )

Net cash provided by (used) in financing activities 11,188 ( 9,834 )

Effect of exchange rate changes on cash 137 ( 273 )

Net decrease in cash and cash equivalents ( 18,742 ) ( 11,237 )

( 16,340 ) ( 36,592 )

Cash and cash equivalents at beginning of period 35,545 35,427

6 unchanged sentences

Description of Business.

Unless otherwise indicated, the terms “we,” “our,” “us,” “Team,” and “the Company” are used in this report to refer to either Team, Inc., to one or more of our consolidated subsidiaries, or to all of them taken as a whole.

Unless otherwise indicated, the terms “Team,” “the Company,” “we,” “our” and “us” are used in this report to refer to either Team, Inc., to one or more of our consolidated subsidiaries, or to all of them taken as a whole.

Our stock is traded on the New York Stock Exchange (the “NYSE”) under the symbol “TISI”.

12 unchanged sentences

These services can be offered while facilities are running (onstream), during facility turnarounds or during new construction or expansion activities.

In addition, IHT provides comprehensive non-destructive testing services and metallurgical and chemical processing services to the aerospace industry, covering a range of components including finished machined and in-service components.

In addition, IHT provides comprehensive non-destructive testing services and metallurgical and chemical processing services to the aerospace and other industries covering a range of components including finished machined and in-service components.

IHT also provides advanced digital imaging including remote digital video imaging.

5 unchanged sentences

Asset shutdowns can be planned, such as a turnaround maintenance event, or unplanned, such as those due to component failure or equipment breakdowns.

Our specialty maintenance, turnaround and outage services are designed to minimize customer downtime and are primarily delivered while assets are off-line and often through the use of cross-certified technicians, whose multi-craft capabilities deliver the production needed to achieve tight time schedules.

Our specialty maintenance, turnaround and outage services are designed to minimize customer downtime and are primarily delivered while assets are off-line, often through the use of cross-certified technicians, whose multi-craft capabilities deliver the production needed to achieve tight time schedules.

These critical services include on-site field machining;

6 unchanged sentences

• Midstream (valves, terminals and storage, and pipeline);

• Public Infrastructure (construction and building, roads, dams, amusement parks, bridges, ports, and railways);

• Infrastructure (construction and building, roads, dams, amusement parks, bridges, ports, and railways);

• Aerospace and Defense.

Recent Financing Amendments .

On September 30, 2024, we entered into certain amendments with our lenders.

Recent Refinancing Transactions .

On March 12, 2025, we entered into certain debt refinancing transactions with our existing and new lenders (collectively, the “Refinancing Transactions”).

Refer to Note 10 - Debt to the unaudited condensed consolidated financial statements for additional details.

Compliance with NYSE listing standards.

On March 14, 2025, the Company received notice from the NYSE that the Company had regained compliance with the NYSE continued listing standards.

Specifically, the Company resolved its prior non-compliance with the quantitative listing standards described in Section 802.01B of the NYSE Listed Company Manual.

Basis of presentation.

4 unchanged sentences

Certain disclosures have been condensed or omitted from the interim financial statements included in this report.

These condensed consolidated financial

statements should be read in conjunction with the consolidated financial statements and notes contained in our Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC (“our Annual Report on Form 10-K”).

These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes contained in our Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the SEC (“our Annual Report on Form 10-K”).

Consolidation.

12 unchanged sentences

Geographic area (in thousands):

Three Months Ended September 30, 2024 Three Months Ended September 30, 2023

(unaudited) (unaudited)

United States and Canada Other Countries Total United States and Canada Other Countries Total

Three Months Ended March 31, 2025

United States Canada Other Countries Total

IHT $ 96,397 $ 7,112 $ 2,706 $ 106,215

1 unchanged sentence

Total $ 157,374 $ 12,207 $ 29,074 $ 198,655

Nine Months Ended September 30, 2024 Nine Months Ended September 30, 2023

(unaudited) (unaudited)

United States and Canada Other Countries Total United States and Canada Other Countries Total

Three Months Ended March 31, 2024

United States Canada Other Countries Total

IHT $ 88,575 $ 7,721 $ 3,152 $ 99,448

2 unchanged sentences

Revenue by Operating segment and service type (in thousands):

Three Months Ended September 30, 2024

Non-Destructive Evaluation and Testing Services Repair and Maintenance Services Heat Treating Other Total

IHT $ 83,461 $ 2 $ 18,036 $ 6,105 $ 107,604

MS — 100,780 363 2,011 103,154

Total $ 83,461 $ 100,782 $ 18,399 $ 8,116 $ 210,758

Three Months Ended September 30, 2023

Non-Destructive Evaluation and Testing Services Repair and Maintenance Services Heat Treating Other Total

IHT $ 83,207 $ 39 $ 12,946 $ 7,665 $ 103,857

MS — 101,624 55 1,179 102,858

Total $ 83,207 $ 101,663 $ 13,001 $ 8,844 $ 206,715

Nine Months Ended September 30, 2024

Three Months Ended March 31, 2025

Non-Destructive Evaluation and Testing Services Repair and Maintenance Services Heat Treating Other Total

2 unchanged sentences

Total $ 84,444 $ 91,288 $ 16,561 $ 6,362 $ 198,655

Nine Months Ended September 30, 2023

Three Months Ended March 31, 2024

Non-Destructive Evaluation and Testing Services Repair and Maintenance Services Heat Treating Other Total

3 unchanged sentences

For additional information on our reportable operating segments, refer to Note 14 - Segment Disclosures .

As of September 30, 2024, we received $ 2.3 million of advance payments from a customer for equipment sales.

This amount is recorded as a contract liability and included in Other accrued liabilities.

See Note 8 - Other Accrued Liabilities for additional information.

There was no contract liability as of December 31, 2023.

Remaining performance obligations.

As permitted by ASC 606, Revenue from Contracts with Customers , we have elected not to disclose information about remaining performance obligations where (i) the performance obligation is part of a contract that has an original expected duration of one year or less or (ii) when we recognize revenue from the satisfaction of the performance obligation in accordance with the right-to-invoice practical expedient, which permits us to recognize revenue in the amount to which we have a right to invoice the customer if that amount corresponds directly with the value to the customer of our performance completed to date.

As most of our contracts with customers are short-term in nature and billed on a time and material basis, there were no material amounts of remaining performance obligations as of September 30, 2024 and December 31, 2023.

ACCOUNTS RECEIVABLE

A summary of accounts receivable as of September 30, 2024 and December 31, 2023 is as follows (in thousands):

September 30, 2024 December 31, 2023

A summary of accounts receivable as of March 31, 2025 and December 31, 2024 is as follows (in thousands):

March 31, 2025 December 31, 2024

Trade accounts receivable $ 138,580 $ 145,743

3 unchanged sentences

The following table shows a rollforward of the allowance for credit losses (in thousands):

September 30, 2024 December 31, 2023

March 31, 2025

Balance at beginning of period $ 3,271

4 unchanged sentences

Balance at end of period $ 3,039

A summary of inventory as of September 30, 2024 and December 31, 2023 is as follows (in thousands):

September 30, 2024 December 31, 2023

A summary of inventory as of March 31, 2025 and December 31, 2024 is as follows (in thousands):

March 31, 2025 December 31, 2024

Raw materials $ 9,845 $ 9,098

3 unchanged sentences

PREPAID AND OTHER CURRENT ASSETS

A summary of prepaid expenses and other current assets as of September 30, 2024 and December 31, 2023 is as follows (in thousands):

September 30, 2024 December 31, 2023

A summary of prepaid expenses and other current assets as of March 31, 2025 and December 31, 2024 is as follows (in thousands):

March 31, 2025 December 31, 2024

Insurance receivable $ 39,000 $ 39,000

3 unchanged sentences

The insurance receivable relates to the receivables from our third-party insurance providers for a legal claim that is recorded in other accrued liabilities, refer to Note 8 - Other Accrued Liabilities .

These receivables will be collected from our third-party insurance providers for litigation matters that have been settled, or are pending settlement, and where the deductibles have been satisfied.

Insurance receivables will be collected from our third-party insurance providers for litigation matters that have been settled, or are pending settlement, and where the deductibles have been satisfied.

The prepaid expenses primarily relate to prepaid insurance and other expenses that have been paid in advance of the coverage period.

1 unchanged sentence

PROPERTY, PLANT AND EQUIPMENT

A summary of property, plant and equipment as of September 30, 2024 and December 31, 2023 is as follows (in thousands):

September 30, 2024 December 31, 2023

A summary of property, plant and equipment as of March 31, 2025 and December 31, 2024 is as follows (in thousands):

March 31, 2025 December 31, 2024

Land $ 4,006 $ 4,006

7 unchanged sentences

Total 437,300 433,157

Accumulated depreciation ( 321,771 ) ( 310,775 )

Accumulated depreciation and amortization ( 326,355 ) ( 320,322 )

Property, plant and equipment, net $ 110,945 $ 112,835

Included in the table above are assets under finance leases of $ 8.5 million as of September 30, 2024 and December 31, 2023, and related accumulated amortization of $ 3.8 million and $ 3.3 million as of September 30, 2024 and December 31, 2023, respectively.

Depreciation expense for the three months ended September 30, 2024 and 2023 was $ 5.1 million and $ 5.4 million, respectively, of which $ 3.4 million and $ 3.6 million, respectively, was included in “Operating expenses” and $ 1.7 million and $ 1.8 million, respectively, was included in “Selling, general and administrative expenses” on our Condensed Consolidated Statements of Operations.

Depreciation expense for the nine months ended September 30, 2024 and 2023 was $ 15.7 million and $ 16.5 million, respectively, of which $ 10.5 million and $ 11.0 million, respectively, was included in “Operating expenses” and $ 5.2 million and $ 5.5 million, respectively, was included in “Selling, general and administrative expenses” on our Condensed Consolidated Statements of Operations.

Included in the table above are assets under finance leases of $ 8.3 million and $ 7.7 million as of March 31, 2025 and December 31, 2024, respectively, and related accumulated amortization of $ 3.4 million and $ 3.2 million as of March 31, 2025 and December 31, 2024, respectively.

Depreciation expense for the three months ended March 31, 2025 and 2024 was $ 4.7 million and $ 5.3 million, respectively, of which $ 3.1 million and $ 3.6 million, respectively, was included in “Operating expenses” and $ 1.6 million and $ 1.8 million, respectively, was included in “Selling, general and administrative expenses” on our condensed consolidated statements of operations.

INTANGIBLE ASSETS

A summary of intangible assets as of September 30, 2024 and December 31, 2023 is as follows (in thousands):

September 30, 2024

A summary of intangible assets as of March 31, 2025 and December 31, 2024 is as follows (in thousands):

March 31, 2025

Amount Accumulated

13 unchanged sentences

Intangible assets $ 184,745 $ ( 134,502 ) $ 50,243

Amortization expense of intangible assets for the three months ended September 30, 2024 and 2023 was $ 3.1 million and $ 3.2 million, respectively.

Amortization expense of intangible assets for the nine months ended September 30, 2024 and 2023 was $ 9.3 million and $ 9.6 million, respectively.

Amortization expense of intangible assets are included in “Selling, general and administrative expenses” on our Condensed Consolidated Statements of Operations.

The weighted-average amortization period for intangible assets was 13.8 years as of September 30, 2024 and December 31, 2023.

Amortization expense of intangible assets for the three months ended March 31, 2025 and 2024 was $ 3.1 million and $ 3.1 million, respectively.

Amortization expense of intangible assets is included in “Selling, general and administrative expenses” on our condensed consolidated statements of operations.

The weighted-average amortization period for intangible assets subject to amortization was 13.9 years and 13.8 years, respectively as of March 31, 2025 and December 31, 2024.

The weighted-average amortization period as of March 31, 2025 and December 31, 2024 is 13.9 years for customer relationships, 13.9 years and 13.8 years, respectively for trade names and 10.0 years for technology.

OTHER ACCRUED LIABILITIES

A summary of other accrued liabilities as of September 30, 2024 and December 31, 2023 is as follows (in thousands):

September 30, 2024 December 31, 2023

A summary of other accrued liabilities as of March 31, 2025 and December 31, 2024 is as follows (in thousands):

March 31, 2025 December 31, 2024

Legal and professional accruals $ 44,502 $ 44,285

4 unchanged sentences

Volume discount 1,715 1,902

Contract liabilities

Other accruals 1,996 1,974

Total $ 97,246 $ 105,228

Legal and professional accruals include accruals for legal and professional fees as well as accrued legal claims.

See Note 13 - Commitments and Contingencies for additional information.

Certain legal claims are covered by our third-party insurance providers and the related insurance receivable for these claims is recorded in prepaid expenses and other current assets.

See Note 5 - Prepaid and Other Current Assets for additional information.

Legal and professional accruals include accruals for legal and professional fees as well as accrued legal claims, refer to Note 13 - Commitments and Contingencies for legal claims information.

Certain legal claims are covered by our third-party insurance providers and the related insurance receivable for these claims is recorded in prepaid expenses and other current assets, refer to Note 5 - Prepaid and Other Current Assets.

Payroll and other compensation expenses include all payroll related accruals including, among others, accrued vacation, severance, and bonuses.

Insurance accruals primarily relate to accrued medical and workers compensation costs.

Property, sales and other non-income related taxes include accruals for items such as sales and use tax, property tax, and other related tax accruals.

Insurance accruals primarily relate to workers compensation cost.

Property, sales and other non-income related taxes include accruals for items such as sales and use tax,

property tax, and other related tax accruals.

Accrued interest relates to the interest accrued on our long-term debt.

Contract liabilities represent advance payments received from a customer.

Other accruals include various business expense accruals.

We recorded an income tax provision of $ 0.5 million and $ 2.0 million, respectively, for the three and nine months ended September 30, 2024, compared to a provision of $ 1.1 million and $ 4.0 million, respectively, for the three and nine months ended September 30, 2023.

The effective tax rate, inclusive of discrete items, was a provision of 4.7 % for the three months ended September 30, 2024, compared to a provision of 9.7 % for the three months ended September 30, 2023.

For the nine months ended September 30, 2024, our effective tax rate, inclusive of discrete items, was a provision of 7.1 %, compared to a provision of 8.3 % for the nine months ended September 30, 2023.

The decrease in effective tax rate for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 is due to the mix of pretax income in non-valuation allowance jurisdictions and pretax losses in valuation allowance jurisdictions, along with changes in valuation allowance in 2023.

The impact is a larger decrease in income tax expense as compared to pretax income resulting in a decrease of effective tax rate.

As of September 30, 2024 and December 31, 2023, our total long-term debt and finance lease obligations are summarized as follows (in thousands):

September 30, 2024 December 31, 2023

2022 ABL Credit Facility 1

We recorded an income tax provision of $ 0.2 million for the three months ended March 31, 2025, compared to a provision of $ 0.1 million for the three months ended March 31, 2024.

The effective tax rate, inclusive of discrete items, was a provision of 0.8 % for the three months ended March 31, 2025, compared to a provision of 0.4 % for the three months ended March 31, 2024.

The increase in effective tax rate for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 is due to the mix of pretax income in non-valuation allowance jurisdictions and pretax losses in valuation allowance jurisdictions, along with changes in permanent differences.

The impact is a larger increase in income tax expense as compared to pretax income resulting in an increase in effective tax rate.

Recent Refinancing Transactions.

On March 12, 2025, we entered into the Refinancing Transactions (described in further detail below) that included the entry into a new First Lien Term Loan Credit Agreement (described below) with the initial proceeds therefrom utilized to repay loans (together with any accrued interest and prepayment premium) outstanding under our 2022 ABL Credit Agreement (defined below) and the Existing A&R Term Loan Agreement (defined below).

The completion of the Refinancing Transactions lowered our blended cost of capital, extended our term loan maturities out to 2030 and improved lending covenants.

As of March 31, 2025 and December 31, 2024, our total long-term debt and finance lease obligations are summarized as follows (in thousands):

March 31, 2025 December 31, 2024

2022 ABL Credit Agreement

$ 85,886 $ 112,671

First Lien Term Loan 1

2025 Second Lien Term Loan 1

ME/RE Loans 1

22,699 24,061

Uptiered Loan 1

139,206 129,436

Incremental Term Loan 1

39,516 38,758

Corre Uptiered Loan 1

Corre Incremental Term Loan 1

Equipment Finance Loan

7 unchanged sentences

2022 ABL Credit Facility

On February 11, 2022, we entered into a credit agreement, with the lender parties thereto, and Eclipse Business Capital, LLC, a Delaware limited liability company, as agent (the “ABL Agent”) (such agreement, as amended by Amendment No.1 dated as of May 6, 2022, Amendment No.2 dated as of November 1, 2022, Amendment No.3 dated as of June 16, 2023, Amendment No.4 dated as of March 6, 2024 and ABL Amendment No.5 (described below), the “2022 ABL Credit Agreement”).

Available funding commitments under the 2022 ABL Credit Agreement, subject to certain conditions, include a revolving credit line in an amount of up to $ 130.0 million to be provided by certain affiliates of the ABL Agent, with a $ 35.0 million sublimit for swingline borrowings, a $ 26.0 million sublimit for issuances of letters of credit (the “Revolving Credit Loans”), and an incremental delayed draw term loan of up to $ 35.0 million (the “Delayed Draw Term Loan”) provided by Corre Partners Management, LLC (“Corre”) and certain of its affiliates (collectively, the “2022 ABL Credit Facility”).

On September 30, 2024, the Company entered into Amendment No.5 (“ABL Amendment No.5”) to the 2022 ABL Credit Agreement.

On March 12, 2025, using a portion of the proceeds from the Initial First Lien Term Loans (defined below), we fully paid off the delayed draw term loan of $ 35.0 million (the “Corre Delayed Draw Term Loan”) originally provided by Corre Partners Management, LLC (“Corre”) and certain of its affiliates, and the ME/RE Loans (described below) of $ 22.3 million provided by Eclipse (defined below) previously outstanding under the 2022 ABL Credit Agreement (as defined below).

On March 12, 2025, we entered into Amendment No.

6 (“ABL Amendment No.

5 amended the 2022 ABL Credit Agreement to, among other things, to:

(i) extend the scheduled maturity date from August 11, 2025 to September 30, 2027;

(ii) amend the applicable margin for Delayed Draw Term Loans from a flat rate of 10.00 % for SOFR Loans (as defined in the 2022 ABL Credit Agreement) and 9.00 % for Base Rate Loans (as defined in the 2022 ABL Credit Agreement) to a rate based on EBITDA ranging from 8.50 % to 10.00 % for SOFR Loans and 7.50 % to 9.00 % for Base Rate Loans;

(iii) amend the applicable margin for Revolving Credit Loans from a rate based on EBITDA ranging from 4.15 % to 4.65 % for SOFR Loans and 3.15 % to 3.65 % for Base Rate Loans to a rate based on both EBITDA and Average Historical Excess Availability (as defined in the 2022 ABL Credit Agreement) ranging from 3.50 % to 4.25 % for SOFR Loans and 2.50 % to 3.25 % for Base Rate Loans;

(iv) amend the applicable margin for ME/RE Loans (defined below) from a flat rate of 5.75 % for SOFR Loans to a flat rate of 5.00 % for SOFR Loans;

(v) amend the definitions of “Borrowing Base” and “Consolidated Fixed Charge Coverage Ratio” as well as related definitions in order to expand availability under the Revolving Credit Facility (as defined in the 2022 ABL Credit Agreement);

(vi) add a springing financial covenant requiring Excess Availability (as defined in the 2022 ABL Credit Agreement) to be above $ 7,500,000 only if the Consolidated Fixed Charge Coverage Ratio falls below 0.85 x for twelve month periods ending on or prior to December 31, 2024 and 1.00 x for twelve month periods ending after December 31, 2024.

ABL Amendment No.5 was accounted for in accordance with ASC 470-60, Troubled Debt Restructuring, and no gain or loss was recognized.

Amendment fees of $ 0.9 million related to the Revolving Credit Loans were deferred on September 30, 2024.

The amendment fees will be amortized to interest expense over the term of the 2022 ABL Credit Agreement.

The terms of the 2022 ABL Credit Facility are described in the table below (dollar amounts are presented in thousands):

Revolving Credit Loans Delayed Draw Term Loan

Scheduled maturity date 1

9/30/2027 9/30/2027

Stated interest rate SOFR + applicable margin (base + applicable margin) SOFR + applicable margin (base + applicable margin)

6”) to that certain credit agreement dated as of February 11, 2022, with the lender parties thereto and Eclipse Business Capital, LLC, a Delaware limited liability company, as agent (“Eclipse”) (such agreement, as amended by Amendment No.1 dated as of May 6, 2022, Amendment No.2 dated as of November 1, 2022, Amendment No.3 dated as of June 16, 2023 (“ABL Amendment No.3”), Amendment No.4 dated as of March 6, 2024, Amendment No.5 dated as of September 30, 2024 and ABL Amendment No.6, the “2022 ABL Credit Agreement”).

ABL Amendment No.6 amended the 2022 ABL Credit Agreement to, among other things,

(i) permit the entry of the Company into the First Lien Term Loan Agreement (defined below), the borrowing of the First Lien Term Loans thereunder and the granting of liens with respect thereto;

(ii) make conforming changes to align the 2022 ABL Credit Agreement with certain terms of the First Lien Term Loan Agreement and the Second A&R Second Lien Term Loan Agreement (defined below), and

(iii) reflect the payoff of the term loan tranches previously outstanding under the 2022 ABL Credit Agreement prior to March 12, 2025 as described above.

Available funding commitments to us under the 2022 ABL Credit Agreement, subject to certain conditions, include a revolving credit line in an amount of up to $ 130.0 million to be provided by certain affiliates of Eclipse, with a $ 35.0 million sublimit for swingline borrowings, and a $ 26.0 million sublimit for issuances of letters of credit (the “Revolving Credit Loans”).

The terms of the Revolving Credit Loans are described in the table below (dollar amounts are presented in thousands):

Maturity date 9/30/2027

Interest rate SOFR + applicable margin (base + applicable margin)

Actual interest rate:

1 unchanged sentence

3/31/2024 10.09 %

Interest payments monthly monthly

Interest payments monthly

Cash paid for interest

1 unchanged sentence

YTD 3/31/2024 $ 2,000

Balances at 9/30/2024

Principal balance

3/31/2025 $ 85,886

Unamortized balance of debt issuance cost N/A

Net carrying balance

12/31/2024 $ 77,905

Balances at 12/31/2023

Principal balance

Unamortized balance of deferred financing cost

3/31/2025 $ 1,026

Unamortized balance of debt issuance cost N/A

Net carrying balance

12/31/2024 $ 693

Unamortized balance of deferred financing cost

9/30/2024 $ 1,102 N/A

12/31/2023 $ 267 N/A

Available amount at 3/31/2025 $ 6,273

1 Amended maturity date is the earlier of (i) the Scheduled Maturity Date and (ii) the Springing Maturity Date (91 days prior to Scheduled Maturity Date of the A&R Term Loan Credit Agreement (defined below), or October 1, 2026).

2 Available amount following the execution of ABL Amendment No.5.

As of December 31, 2024, the Corre Delayed Draw Term Loan had a net carrying balance of $ 34.8 million, which consisted of the principal balance of $ 35.0 million less the unamortized balance of debt issuance cost of $ 0.2 million.

The actual interest rate at March 31, 2024 was 15.44 % and cash paid for interest was $ 1.4 million during the quarters ended March 31, 2025 and 2024.

The 2022 ABL Credit Agreement contains customary conditions to borrowings and covenants, as described in the 2022 ABL Credit Agreement.

As of September 30, 2024, we are in compliance with the covenants.

As of September 30, 2024, $ 9.5 million in letters of credit were issued under the 2022 ABL Credit Agreement.

As of March 31, 2025, we are in compliance with the covenants.

As of March 31, 2025, $ 9.4 million in letters of credit were issued under the 2022 ABL Credit Agreement.

Such amounts remain undrawn and are off-balance sheet.

On June 16, 2023, we entered into ABL Amendment No.3 which, in addition to making certain other changes to the 2022 ABL Credit Facility, provided us with $ 27.4 million of new term loans (the “ME/RE Loans”).

On September 30, 2024, the Company entered into ABL Amendment No.5.

ABL Amendment No.5 amended the 2022 ABL Credit Agreement to, among other things, provide for the following changes to the ME/RE Loans:

(i) extended the scheduled maturity date from August 11, 2025 to September 30, 2027;

(ii) amended the applicable margin for ME/RE Loans from a flat rate of 5.75 % for SOFR Loans (as defined in the 2022 ABL Credit Agreement) to a flat rate of 5.00 % for SOFR Loans.

The terms of ME/RE Loans are described in the table below (dollar amounts are presented in thousands):

Scheduled maturity date 1

Stated interest rate

SOFR + 5.0 % + 0.11 % credit spread adjustment

Principal payments $ 237 monthly

On March 12, 2025, using a portion of the proceeds from the Initial First Lien Term Loans (defined below), we fully paid off the ME/RE Loans of $ 22.3 million provided to us pursuant to ABL Amendment No.3.

ME/RE Loans were secured by a first priority lien and mortgage on certain real estate and machinery and equipment of the Company.

As of December 31, 2024, the ME/RE Loans had net carrying balance of $ 22.1 million, which consisted of the principal balance of $ 23.0 million less the unamortized balance of debt issuance cost of $ 0.9 million.

The actual and effective interest rates at March 31, 2024 were 11.19 % and 17.38 %, respectively.

Cash paid for interest during the quarters ended March 31, 2025 and 2024 was $ 0.6 million and $ 0.7 million, respectively.

First Lien Term Loan Agreement

On March 12, 2025, we entered into a First Lien Term Loan Credit Agreement (the “First Lien Term Loan Agreement”) with the lenders party thereto and HPS Investment Partners, LLC.

Available funding commitments include a $ 225.0 million senior secured first lien term loan (the “First Lien Term Loan”) consisting of a $ 175.0 million initial term loan tranche (the “Initial First Lien Term Loans”) and a $ 50.0 million delayed draw term loan tranche (the “First Lien Delayed Draw Term Loans”), which is available to be drawn from March 12, 2025 to June 30, 2027, subject to satisfying certain conditions, including pro forma compliance with a First Lien Net Leverage Ratio (as defined in the First Lien Term Loan Agreement) of 3.75 to 1.00 and Liquidity (as defined in the First Lien Term Loan Agreement) of not less than $ 40.0 million.

All outstanding amounts in respect of the First Lien Term Loan mature and become due and payable on March 12, 2030.

The Initial First Lien Term Loans borrowed under the First Lien Term Loan Agreement bear interest at an annual rate of the Secured Overnight Financing Rate (“SOFR”) for interest periods of one-, three- or six-months, at the Company’s election, plus a margin of 6.50 % per annum.

Beginning with the quarter ending September 30, 2025, the interest rate margin may vary from 7.00 % to 6.00 % depending on the First Lien Net Leverage Ratio.

The proceeds of the Initial First Lien Term Loans were used to redeem and repay the Corre Delayed Draw Term Loan and the ME/RE Loans under the 2022 ABL Credit Agreement and a portion of the outstanding balance of the A&R Term Loan Agreement (as defined below).

To the extent borrowed, the proceeds of the First Lien Delayed Draw Term Loans will be used to solely repay the obligations under the Second A&R Second Lien Term Loan Agreement (as defined below).

As of March 31, 2025, we have not drawn on the First Lien Delayed Draw Term Loans.

The terms of the Initial First Lien Term Loans are described in the table below (dollar amounts are presented in thousands):

Maturity date 3/12/2030

Stated interest rate SOFR+applicable margin (base+applicable margin)

Principal payments $ 438 quarterly

Effective interest rate

3/31/2025 12.64 %

9/30/2023 16.75 %

Actual cash interest rate

9/30/2024 10.32 %

Actual interest rate

3/31/2025 10.83 %

Interest payments monthly

Interest payments quarterly

Cash paid for interest

YTD 3/31/2025 $ —

YTD 9/30/2023 $ 640

Balances at 3/31/2025

Principal balance $ 175,000

Unamortized balance of debt issuance cost $( 993 )

Net carrying balance $ 22,699

Balances at 12/31/2023

Principal balance $ 25,823

Unamortized balance of debt issuance cost $( 1,762 )

Unamortized balance of debt discount and issuance cost 1

Net carrying balance $ 167,451

2 The effective interest rate as of September 30, 2024 consisted of 10.32 % variable interest rate paid in cash and an additional 2.79 % due to non-cash amortization of the related debt issuance costs.

The effective interest rate as of September 30, 2023, consisted of 11.19 % variable interest rate paid in cash and an additional 5.56 % due to non-cash amortization of the related debt issuance costs.

The ME/RE Loans are governed by the 2022 ABL Credit Agreement and are subject to the same restrictive covenants as described under the 2022 ABL Credit Facility.

Amended and Restated Term Loan Credit Agreement - Uptiered Loan and Incremental Term Loan

On June 16, 2023, we entered into an amendment and restatement of that certain subordinated term loan credit agreement dated as of November 9, 2021 (such agreement, as amended and restated, and as further amended by Amendment No.1 dated March 6, 2024, the “A&R Term Loan Credit Agreement”) among the Company, as borrower, the guarantors party thereto, the lenders from time-to-time party thereto and Cantor Fitzgerald Securities, as agent (the “A&R Term Loan Agent”).

The A&R Term Loan Credit Agreement included a term loan credit agreement entered into on November 9, 2021, as amended through March 29, 2023 (the “Uptiered Loan”), and an additional funding commitment, subject to certain conditions, consisting of a $ 57.5 million senior secured first lien term loan (the “Incremental Term Loan”) provided by Corre and certain of its affiliates and comprised of a $ 37.5 million term loan tranche and a $ 20.0 million delayed draw tranche.

The A&R Term Loan Credit Agreement contains certain customary conditions to borrowings, events of default and affirmative, negative, and financial covenants (as described in the A&R Term Loan Credit Agreement and further amended by Amendment No.1 dated March 6, 2024).

As of September 30, 2024, we are in compliance with the A&R Term Loan Credit Agreement covenants.

On September 30, 2024 we entered into Amendment No.2 (“ Term Loan Amendment No.2”) to the A&R Term Loan Credit Agreement.

Term Loan Amendment No.2 amended the A&R Term Loan Credit Agreement to, among other things, make conforming changes to the A&R Term Loan Credit Agreement, consistent with the changes being made to the 2022 ABL Credit Agreement by ABL Amendment No.5.

The terms of Uptiered Loan and Incremental Term Loan are described in the table below (dollar amounts are presented in thousands):

Uptiered Loan

Incremental Term Loan

Maturity date 12/31/2027 (12/31/2026 if outstanding balance is greater than $ 50 million)

Stated interest rate

9/30/2024 9.5 % PIK and 4.0 % cash 2

12 % paid in cash

9/30/2023 12 % PIK

12 % paid in cash

Principal payments at maturity $ 356 quarterly

1 Consists of debt discount of $ 3,932 and debt issuance cost of $ 3,617 .

The First Lien Term Loan Agreement contains certain conditions to borrowings, events of default and affirmative and negative covenants and a financial covenant prohibiting the Company from exceeding a maximum First Lien Net Leverage Ratio (as defined in the First Lien Term Loan Agreement), tested as of the end of each fiscal quarter, of 5.50 to 1.00.

Further, the First Lien Term Loan Agreement includes certain events of default, the occurrence of which may require that we pay an additional 2.0 % interest on the outstanding loans and other obligations under the First Lien Term Loan Agreement.

As of March 31, 2025, we are in compliance with the covenants.

A&R Term Loan Credit Agreement / Second A&R Second Lien Term Loan Credit Agreement

On March 12, 2025, we entered into a Second Amended and Restated Second Lien Term Loan Credit Agreement with the lenders party thereto and Cantor Fitzgerald Securities, as Agent, (the “Second A&R Second Lien Term Loan Agreement”), which amended and restated the existing Amended and Restated Term Loan Credit Agreement, dated June 16, 2023 (the “Existing A&R Term Loan Agreement”).

The Existing A&R Term Loan Agreement (prior to the Refinancing Transactions) included a term loan credit agreement entered into on November 9, 2021, as amended through March 29, 2023 (the “Corre Uptiered Loan”), and an additional funding commitment, subject to certain conditions, consisting of a $ 57.5 million senior secured first lien term loan (the “Corre Incremental Term Loan”) provided by Corre and certain of its affiliates and comprised of a $ 37.5 million term loan tranche and a $ 20.0 million delayed draw tranche, of which $ 10.0 million remained undrawn at March 12, 2025.

On March 12, 2025, using a portion of the proceeds from the Initial First Lien Term Loans, we fully paid off the outstanding principal balance on the Corre Incremental Term Loan in the amount of $ 46.3 million and paid down $ 54.1 million of the outstanding principal balance on the Corre Uptiered Loan.

The remaining portion of the Corre Uptiered Loan of $ 93.9 million, together with certain fees and accrued interest, were rolled into the 2025 Second Lien Term Loans (defined below).

The Second A&R Second Lien Term Loan Agreement contains certain conditions to borrowings, events of default and affirmative and negative covenants and a financial covenant prohibiting the Company from exceeding a maximum First Lien Net Leverage Ratio (as defined in the Second A&R Second Lien Term Loan Agreement), tested at the end of each fiscal quarter of 6.00 to 1.00.

Further, the Second A&R Second Lien Term Loan Agreement includes certain events of default, the occurrence of which may require that the Company pay an additional 2.0 % interest on the outstanding loans and other obligations under the Second A&R Second Lien Term Loan Agreement.

As of March 31, 2025, we are in compliance with the covenants.

Available funding commitments to the Company under the Second A&R Second Lien Term Loan Agreement, subject to certain conditions, include a $ 107.4 million second lien term loan (the “Second Lien Term Loans”), provided by Corre and certain of its affiliates, consisting of a $ 97.4 million term loan tranche (the “2025 Second Lien Term Loans”) and a $ 10.0 million delayed draw term loan tranche (the “Second Lien Delayed Draw Term Loans”) which is available to be drawn from March 12, 2025, until April 15, 2026, subject to satisfying certain conditions.

All outstanding amounts in respect of the Second Lien Term Loans mature and become due and payable on June 10, 2030.

To the extent borrowed, the proceeds of the Second Lien Delayed Draw Term Loans are permitted to be used by the Company for general working capital and liquidity purposes.

As of March 31, 2025, we have not drawn on the Second Lien Delayed Draw Term Loans.

The Second Lien Term Loans bear interest at an annual rate of 13.5 % through the earlier of (i) September 30, 2026, and thereafter, if the outstanding principal balance of the Second Lien Term Loans exceeds 50 % of the principal balance at March 12, 2025, the interest rate will increase by 0.25 % quarterly, subject to a maximum rate of 14.5 % per annum, and (ii) the date on which the Second Lien Delayed Draw Term Loan is borrowed in full, in which case the interest rate will increase to the maximum rate of 14.5 % per annum.

Interest is payable quarterly and if the First Lien Net Leverage Ratio (as defined in the Second A&R Second Lien Term Loan Agreement) is greater than or equal to 3.50 to 1.00, then all interest shall be paid in kind;

if the First Lien Net Leverage Ratio is less than 3.50 to 1.00 and greater than or equal to 3.00 to 1.00, 50 % of the interest shall be payable in cash, with the other 50 % to be paid in kind;

and if the First Lien Net Leverage Ratio is less than 3.00 to 1.00, all interest will be payable in cash.

The terms of the 2025 Second Lien Term Loans are described in the table below (dollar amounts are presented in thousands):

Maturity date 6/10/2030

Principal payments $ 244 quarterly

Effective interest rate

3/31/2025 16.01 %

Actual interest rate

3/31/2025 13.50 %

Interest payments cash quarterly/PIK monthly quarterly

Interest payments quarterly

Cash paid for interest

YTD 9/30/2024 $ 2,775 $ 4,267

YTD 9/30/2023 $ — $ —

PIK interest added to principal

YTD 9/30/2024 $ 9,661 N/A

YTD 9/30/2023 $ 10,829 N/A

Balances at 9/30/2024

Principal balance 1

3/31/2025 $ —

Unamortized balance of debt issuance cost $( 542 ) $( 7,467 )

Net carrying balance $ 139,206 $ 39,516

PIK interest added to principal balance

3/31/2025 $ —

Balances at 3/31/2025

Principal balance $ 97,413

$ 130,087 $ 48,052

Unamortized balance of debt issuance cost $( 3,545 )

Net carrying balance $ 93,868

Available amount at 9/30/2024 $ — $ 10,000

1 The principal balance of the Uptiered Loan is made up of $ 22.5 million drawn on November 9, 2021, $ 27.5 million drawn on December 8, 2021, and $ 57.0 million added as part of the exchange agreement on October 4, 2022.

In addition, the principal balance also includes paid-in-kind (“PIK”) interest recorded of $ 31.8 million and $ 22.2 million as of September 30, 2024 and December 31, 2023, respectively, and PIK fees of $ 0.9 million incurred as of December 31, 2022.

2 Cash and PIK split is determined based on the Net Leverage Ratio as defined in the A&R Term Loan Credit Agreement.

3 The effective interest rate on the Uptiered Loan as of September 30, 2024 consisted of 13.50 % stated interest rate paid in PIK and cash, and an additional 1.06 % due to the non-cash amortization of the related debt issuance costs.

The effective interest rate on the Uptiered Loan as of September 30, 2023 consisted of 12.00 % stated interest rate paid in PIK and an additional 0.86 % due to the non-cash amortization of the related debt issuance costs.

4 The effective interest rate on the Incremental Term Loan as of September 30, 2024 consisted of 12.00 % stated interest rate paid in cash and an additional 10.96 % due to the non-cash amortization of the related debt issuance costs.

The effective interest rate on the Incremental Term Loan as of September 30, 2023 consisted of 12.00 % stated interest rate paid in cash and an additional 11.69 % due to the non-cash amortization of the related debt issuance costs.

As of September 30, 2024 and December 31, 2023, APSC Holdco II, L.P.

As of December 31, 2024, the Corre Incremental Term Loan had a net carrying balance of $ 39.8 million, which consisted of the principal balance of $ 46.6 million less the unamortized balance of debt issuance cost of $ 6.8 million.

The stated and effective interest rates at March 31, 2024 were 12.0 % and 22.96 %, respectively.

Cash paid for interest during the quarters ended March 31, 2025 and 2024 was $ 2.5 million and $ 1.4 million, respectively.

As of December 31, 2024, the Corre Uptiered Loan had a net carrying balance of $ 144.0 million, which consisted of the principal balance of $ 144.5 million less the unamortized balance of debt issuance cost of $ 0.5 million.

The stated and effective interest rates at March 31, 2024 were 13.5 % and 14.56 %, respectively.

Cash paid for interest during the quarters ended March 31, 2025 and 2024 was $ 2.7 million and $ 0.3 million, respectively.

As of March 31, 2025 and December 31, 2024, APSC Holdco II, L.P.

held 500,000 warrants and certain affiliates of Corre collectively held 500,000 warrants, in each case providing for the purchase of one share of the Company’s common stock per warrant at an exercise price of $ 15.00 .

10 unchanged sentences

1970 Group Substitute Insurance Reimbursement Facility

On September 16, 2024, we entered into an amended and restated substitute insurance reimbursement facility agreement with 1970 Group Inc.

On September 16, 2024, we entered into an amended and restated substitute insurance reimbursement facility agreement with the 1970 Group Inc.

(“1970 Group”) (such agreement, the “Substitute Insurance Reimbursement Facility Agreement”).

Under the Substitute Insurance Reimbursement Facility Agreement, the 1970 Group extended credit to us in the form of a substitute reimbursement facility (the “Substitute Reimbursement Facility”) to provide up to approximately $ 19.0 million of letters of credit on our behalf in support of our workers’ compensation, commercial automotive and general liability insurance policies.

As of September 30, 2024, we have $ 19.0 million of letters of credit outstanding under the Substitute Reimbursement Facility.

As of March 31, 2025, we have $ 19.0 million of letters of credit outstanding under the Substitute Reimbursement Facility.

According to the provisions of ASC 470, Debt , the arrangement is a “Substitute Insurance Reimbursement Facility” limited to the amounts drawn under the letters of credit.

Therefore, until we use or there is a draw on such Substitute Insurance Reimbursement Facility, the letters of credit are treated as an off-balance sheet credit arrangement.

Therefore, until we use or draw on the Substitute Insurance Reimbursement Facility, the letters of credit are treated as an off-balance sheet credit arrangement.

The fees paid by us periodically under this arrangement are deferred and amortized to interest expense over the term of the arrangement.

As of September 30, 2024, we had approximately $ 2.2 million of unamortized deferred fees.

As of September 30, 2024, we had $ 14.9 million of unrestricted cash and cash equivalents and $ 4.2 million of restricted cash, including $ 2.9 million of restricted cash held as collateral for letters of credit and commercial card programs.

International cash balances as of September 30, 2024 were $ 6.2 million, and approximately $ 0.6 million of such cash is located in countries where currency or regulatory restrictions exist.

As of September 30, 2024, we had approximately $ 28.0 million of available borrowing capacity under our various credit agreements, consisting of $ 18.0 million available, following the execution of ABL Amendment No.5, under the Revolving Credit Loans and $ 10.0 million available under the Incremental Term Loan.

As of September 30, 2024, we had $ 30.8 million in letters of credit and $ 2.5 million in surety bonds outstanding and $ 1.3 million in miscellaneous cash deposits securing other required obligations.

As of December 31, 2023, our cash and cash equivalents consisted of $ 30.4 million of unrestricted cash and cash equivalents and $ 5.0 million of restricted cash, including $ 3.4 million of restricted cash held as collateral for letters of credit and commercial card programs.

International cash balances as of December 31, 2023 were $ 12.0 million, including $ 0.6 million of cash located in countries where currency or regulatory restrictions existed.

As of March 31, 2025, we had approximately $ 1.0 million of unamortized deferred fees.

As of March 31, 2025, we had $ 12.8 million of unrestricted cash and cash equivalents and $ 4.0 million of restricted cash, including $ 2.8 million of restricted cash held as collateral for letters of credit and commercial card programs.

International cash balances included in total cash as of March 31, 2025 were $ 4.8 million, and approximately $ 1.1 million of such cash is restricted.

As of March 31, 2025, we had approximately $ 16.3 million of available borrowing capacity under our various credit agreements, consisting of $ 6.3 million available under the Revolving Credit Loans and $ 10.0 million available under the Incremental Delayed Draw Term Loan under the Second A&R Second Lien Term Loan Credit Agreement.

As of March 31, 2025, we had $ 30.5 million in letters of credit and $ 1.6 million in surety bonds outstanding.

EMPLOYEE BENEFIT PLANS

1 unchanged sentence

Net periodic pension credit includes the following components (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

(unaudited) (unaudited) (unaudited) (unaudited)

Three Months Ended March 31,

(unaudited) (unaudited)

Interest cost $ 672 $ 652

2 unchanged sentences

Unrecognized net actuarial loss

82 70 240 212

Net periodic pension credit $ ( 51 ) $ ( 108 )

4 unchanged sentences

SHAREHOLDERS’ EQUITY

Shareholders’ Equity and Preferred Stock

As of September 30, 2024 there were 4,421,876 shares of our common stock outstanding and 12,000,000 shares authorized at $ 0.30 par value per share.

As of September 30, 2024 we had 500,000 authorized shares of preferred stock, none of which had been issued.

Shareholders’ Equity (Deficit) and Preferred Stock

As of March 31, 2025 there were 4,493,391 shares of our common stock outstanding and 12,000,000 shares authorized at $ 0.30 par value per share.

As of March 31, 2025 we had 500,000 authorized shares of preferred stock, none of which had been issued.

Accumulated Other Comprehensive Income (loss)

A summary of changes in accumulated other comprehensive loss included within shareholders’ equity is as follows (in thousands):

Nine Months Ended

September 30, 2024 Nine Months Ended

September 30, 2023

Three Months Ended

March 31, 2025 Three Months Ended

March 31, 2024

(unaudited) (unaudited)

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We accrue for contingencies where the occurrence of a material loss is probable and can be reasonably estimated, based on our best estimate of the expected liability.

We may increase or decrease our legal accruals in the future, on a matter-by-matter basis, to account for developments in such matter.

We may increase or decrease our legal accruals in the future, on a matter-by-matter basis, to account for developments in such matters.

Because such matters are inherently unpredictable and unfavorable developments or outcomes can occur, assessing contingencies is highly subjective and requires judgments about future events.

5 unchanged sentences

On January 25, 2022, the trial court signed a final judgment in favor of the plaintiff and against Team Industrial Services, Inc.

Post-judgment motions challenging the judgment were filed on February 24, 2022 and were denied by the trial court on

April 22, 2022.

We appealed the trial court’s judgment to the Texas First Court of Appeals by timely filing a notice of appeal on April 25, 2022 and filed our initial appellate brief on December 23, 2022.

We appealed the trial court’s judgment to the Texas First Court of Appeals.

On May 16, 2024, the Texas First Court of Appeals issued a decision which vacated the trial court’s judgment and dismissed the case, holding that the trial court erred in refusing to dismiss the case on forum non conveniens grounds.

The plaintiff filed a motion with the Texas First Court of Appeals for rehearing and a motion for en banc reconsideration, which was denied by the Court of Appeals on October 3, 2024.

The plaintiff has 45 days to seek review with the Texas Supreme Court.

After any further appellate review is exhausted, the plaintiff will be permitted to re-file the lawsuit in Kansas.

We currently have accrued a liability of $ 39.0 million as of September 30, 2024 in other accrued liabilities, and have recorded a related receivable from our third-party insurance providers in other current assets in the same amount.

The plaintiff did not seek review with the Texas Supreme Court.

On March 5, 2025, the plaintiff re-filed a lawsuit against the Company in the U.S.

District Court, Kansas District in Kansas City.

We currently have accrued a liability of $ 39.0 million as of March 31, 2025 in other accrued liabilities, and have recorded a related receivable from our third-party insurance providers in other current assets in the same amount.

Such amounts are treated as non-cash operating activities.

2 unchanged sentences

We will continue to evaluate the possible outcomes of this case in light of future developments and their potential impact on factors relevant to our assessment of any possible loss.

Notice of repayment of pandemic related government subsidies - In response to widespread health crises, epidemics and pandemics, certain of our entities based in foreign jurisdictions received governmental funding assistance to compensate for a portion of employee wages between March 2020 and March 2022.

Notice of repayment of pandemic related government subsidies - In response to widespread COVID-19 health pandemics, certain of our entities based in foreign jurisdictions received governmental funding assistance to compensate for a portion of employee wages between March 2020 and March 2022.

Following ongoing compliance reviews of these funding assistance programs, we received notices stating noncompliance with the requirements of one of these funding assistance programs.

Accordingly, based on the assessments completed by the government appointed administrative authority, previously we had accrued $ 5.5 million to be repaid over an extended period related to this noncompliance.

However, during the quarter ended September 30, 2024, we successfully appealed against $ 2.0 million of the assessment, which resulted in the reduction of the accrued liability from $ 5.5 million to $ 3.5 million as of September 30, 2024.

Accordingly, for all matters discussed within this Note 13 - Commitments and Contingencies , we have accrued in the aggregate approximately $ 42.5 million as of September 30, 2024, of which approximately $ 3.5 million is not covered by our various insurance policies.

Accordingly, based on the assessments completed by the government appointed administrative authority, we previously had accrued $ 5.5 million as of December 31, 2023, to be repaid over an extended period related to this noncompliance.

However, during the year ended December 31, 2024, we successfully appealed $ 3.8 million of the assessment, which resulted in the reduction of the accrued liability to $ 1.7 million as of March 31, 2025.

Accordingly, for all matters discussed within this Note 13 - Commitments and Contingencies , we have accrued in the aggregate approximately $ 40.7 million as of March 31, 2025, of which approximately $ 1.7 million is not covered by our various insurance policies.

In addition to legal matters discussed above, we are subject to various lawsuits, claims and proceedings encountered in the normal conduct of business (“Other Proceedings”).

Management believes that based on its current knowledge and after consultation with legal counsel that the Other Proceedings, individually or in the aggregate, will not have a material effect on our condensed consolidated financial statements.

Management believes that based on its current knowledge and after

consultation with legal counsel that the Other Proceedings, individually or in the aggregate, will not have a material effect on our condensed consolidated financial statements.

SEGMENT DISCLOSURES

ASC 280, Segment Reporting , requires us to disclose certain information about our operating segments.

Operating segments are defined as “components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance.” We conduct operations in two segments:

We conduct operations in two segments:

Management’s determination of our reporting segments was made on the basis of our strategic priorities within each segment and the differences in the services we offer.

The reportable segments results are reviewed regularly by the chief operating decision maker (“CODM”), who is our Chief Executive Officer, in deciding how to allocate resources and assess performance.

Our CODM evaluates the segments’ operating performance based on adjusted EBITDA defined as net income (loss) before income taxes, interest expense, depreciation and amortization, and other non-recurring and non-operational items.

Our CODM uses adjusted EBITDA as a measure to make resource allocation decisions for each segment for the budgeting process and reviews budget-to-actual variances to access performance and allocate capital.

Segment data for our two operating segments are as follows (in thousands):

Three Months Ended

September 30, Nine Months Ended

September 30,

March 31, 2025

(unaudited) (unaudited) (unaudited)

Revenues $ 106,215 $ 92,440 $ 198,655

Adjusted operating expenses 1

79,695 68,552 148,247

(unaudited) (unaudited) (unaudited) (unaudited)

IHT $ 107,604 $ 103,857 $ 320,286 $ 322,426

MS 103,154 102,858 318,690 326,058

Total revenues

Adjusted selling, general and administrative expenses 2

14,896 20,394 35,290

Adjusted EBITDA

$ 11,624 $ 3,494 $ 15,118

Three Months Ended

September 30, Nine Months Ended

September 30,

March 31, 2024

(unaudited) (unaudited) (unaudited)

Revenues $ 99,448 $ 100,152 $ 199,600

Adjusted operating expenses 1

76,133 71,163 147,296

(unaudited) (unaudited) (unaudited) (unaudited)

Operating income (loss):

Adjusted selling, general and administrative expenses 2

14,966 19,842 34,808

Adjusted EBITDA

$ 8,349 $ 9,147 $ 17,496

_____________

1 Represent operating expenses excluding indirect depreciation and amortization, and severance cost.

2 Represent segment selling, general and administrative expenses excluding depreciation and amortization, noncash share-based compensation, professional, legal and other non-recurring costs.

Reconciliation of segment adjusted EBITDA to consolidated loss before income taxes:

Three Months Ended

(unaudited) (unaudited)

IHT $ 11,624 $ 8,349

MS 3,494 9,147

Corporate and shared support services ( 11,162 ) ( 14,152 ) ( 38,761 ) ( 44,486 )

Total operating income (loss) $ 3,158 $ ( 1,258 ) $ 7,931 $ ( 4,408 )

Three Months Ended

September 30, Nine Months Ended

September 30,

Segment adjusted EBITDA

15,118 17,496

(unaudited) (unaudited) (unaudited) (unaudited)

Segment depreciation and amortization

( 7,087 ) ( 7,678 )

Segment professional fees, severance and other

( 449 ) ( 542 )

Corporate and shared support cost ( 13,585 ) ( 15,662 )

Consolidated operating loss ( 6,003 ) ( 6,386 )

Interest expense ( 11,436 ) ( 12,098 )

Loss on debt extinguishment ( 11,853 ) —

Other income/(expense) ( 204 ) 1,362

Loss before income taxes $ ( 29,496 ) $ ( 17,122 )

Three Months Ended

(unaudited) (unaudited)

Capital expenditures 1 :

IHT $ 1,458 $ 536

MS 932 988 2,577 2,263

Corporate and shared support services 14 —

2 unchanged sentences

1 Excludes finance leases.

Capital expenditures presented in the table above are on accrual basis and differ from the amounts presented in the Condensed Consolidated Statements of Cash Flows.

Totals may vary from amounts presented in the consolidated statements of cash flows due to the timing of cash payments.

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

(unaudited) (unaudited) (unaudited) (unaudited)

(unaudited) (unaudited)

Depreciation and amortization:

4 unchanged sentences

$ 8,402 $ 9,640

1 Breakdown of depreciation and amortization included in the unaudited Condensed Consolidated Statements of Operations .

1 Breakdown of depreciation and amortization included in the Consolidated Statements of Operations described below:

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Depreciation and amortization:

2 unchanged sentences

Total depreciation and amortization $ 8,402 $ 9,640

Separate measures of our assets by operating segment are not produced or utilized by our CODM to evaluate segment performance.

RELATED PARTY TRANSACTIONS

In connection with the Company’s debt transactions, the Company engaged in transactions with Corre to provide funding as described in Note 10 - Debt .

In connection with the Company’s debt transactions, the Company engaged in transactions with Corre to provide and/or repay funding as described in Note 10 - Debt .

SUBSEQUENT EVENTS

As of November 12, 2024, the filing date of this Quarterly Report on Form 10-Q, management evaluated the existence of events occurring subsequent to the quarter ended September 30, 2024 and determined that there were no events or transactions that would have a material impact on the Company’s results of operations or financial position .

As of May 12, 2025, the filing date of this Quarterly Report on Form 10-Q, management evaluated the existence of events occurring subsequent to the quarter ended March 31, 2025 and determined that there were no events or transactions that would have a material impact on the Company’s results of operations or financial position .

T able of Contents

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

What changed 10-Q

Item 1. Financial Statements