What changed in this filing

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Item 1. Financial Statements

2025-11-12 compared with 2025-08-12 · 263 added, 129 removed, 557 unchanged (41% of the section changed)

3 unchanged sentences

(in thousands, except share and per share data)

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

ASSETS (unaudited)

14 unchanged sentences

Total assets $ 531,047 $ 528,365

LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)

LIABILITIES, REDEEMABLE PREFERRED STOCK AND SHAREHOLDERS’ EQUITY (DEFICIT)

Current liabilities:

11 unchanged sentences

Commitments and contingencies

Redeemable preferred stock, par value $ 100.00 per share, 75,000 and 0 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively

Shareholders’ equity (deficit):

Preferred stock, 500,000 shares authorized, none issued

Preferred stock, 500,000 shares authorized, 75,000 (included in redeemable preferred stock) and 0 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively

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

4,498,932 and 4,493,338 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively

4,498,854 and 4,493,338 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively

Additional paid-in capital 479,119 460,186

2 unchanged sentences

Total shareholders’ equity (deficit) ( 17,653 ) 1,738

Total liabilities and shareholders’ equity (deficit) $ 548,361 $ 528,365

Total liabilities, redeemable preferred stock and shareholders’ equity (deficit) $ 531,047 $ 528,365

See accompanying notes to unaudited condensed consolidated financial statements.

3 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

4 unchanged sentences

Operating income

1,342 3,158 7,442 7,931

Interest expense, net ( 11,855 ) ( 11,770 ) ( 35,187 ) ( 35,777 )

4 unchanged sentences

Net loss $ ( 11,447 ) $ ( 11,126 ) $ ( 45,431 ) $ ( 31,084 )

Dividend and accretion to redemption value on redeemable preferred stock ( 610 ) — ( 610 ) —

Net loss attributable to common shareholders $ ( 12,057 ) $ ( 11,126 ) $ ( 46,041 ) $ ( 31,084 )

Loss per common share:

8 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

7 unchanged sentences

Other comprehensive income (loss) before tax ( 1,971 ) 4,599 7,253 1,581

Tax provision attributable to other comprehensive income (loss)

Tax provision (benefit) attributable to other comprehensive income (loss)

4 83 ( 148 ) 78

Other comprehensive income (loss), net of tax ( 1,967 ) 4,682 7,105 1,659

Total comprehensive income (loss) $ 2,740 $ ( 3,011 ) $ ( 24,912 ) $ ( 22,981 )

Total comprehensive loss $ ( 13,414 ) $ ( 6,444 ) $ ( 38,326 ) $ ( 29,425 )

See accompanying notes to unaudited condensed consolidated financial statements.

19 unchanged sentences

Balance at June 30, 2025 4,499 $ 1,350 $ 460,434 $ ( 449,651 ) $ ( 35,057 ) $ ( 22,924 )

Net loss — — — ( 11,447 ) — ( 11,447 )

Net settlement of vested stock awards — — ( 1 ) — — ( 1 )

Dividend and accretion to redemption value on redeemable preferred stock — — ( 610 ) — — ( 610 )

Issuance of warrants in connection with Series B Transactions

— — 18,943 — — 18,943

Foreign currency translation adjustment, net of tax — — — — ( 2,069 ) ( 2,069 )

Defined benefit pension plans, net of tax — — — — 102 102

Non-cash compensation — — 353 — — 353

Balance at September 30, 2025 4,499 $ 1,350 $ 479,119 $ ( 461,098 ) $ ( 37,024 ) $ ( 17,653 )

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

11 unchanged sentences

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

See accompanying notes to unaudited condensed consolidated financial statements.

2 unchanged sentences

(in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities:

2 unchanged sentences

Depreciation and amortization 25,676 27,934

Write-off of software cost 45 —

Loss on debt extinguishment

2 unchanged sentences

Allowance for credit losses

Foreign currency loss (gain)

3,749 ( 623 )

Foreign currency loss 2,613 1,504

Deferred income taxes ( 494 ) ( 754 )

Loss on asset disposal

Loss (gain) on asset disposal

Non-cash compensation costs 665 1,744

4 unchanged sentences

Prepaid expenses and other assets

( 2,376 ) ( 1,418 )

Accounts payable ( 5,666 ) 7,590

1 unchanged sentence

Income taxes 169 1,517

Net cash used in operating activities ( 32,005 ) ( 4,466 )

Net cash provided by (used in) operating activities ( 28,122 ) 1,143

Cash flows from investing activities:

9 unchanged sentences

Payments under First Lien Term Loan ( 875 ) —

Payments under 2025 Second Lien Term Loan ( 41,803 ) —

Payments under ME/RE Loans ( 23,427 ) ( 2,131 )

1 unchanged sentence

Payments for debt issuance costs ( 11,412 ) ( 7,371 )

Proceeds from issuance of Series B Preferred Stock and warrants

Issuance cost related to Series B Preferred Stock and warrants

Other ( 1,657 ) 1,153

44 unchanged sentences

• Aerospace and Defense.

Recent financing transaction.

On September 11, 2025, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with InspectionTech Holdings LP (the “Stellex Holder”), an affiliate of Stellex Capital Management LLC (“Stellex”), resulting in the issuance of (i) 75,000 shares of Series B Preferred Stock and (ii) warrants to purchase an aggregate of 1,453,260 shares of common stock for total consideration of $ 75.0 million (such issuance, along with the use of proceeds therefrom and the other transactions contemplated thereby, the “Series B Transactions”).

The proceeds of the Series B Transactions were used to repay a portion of the outstanding loans under the Company’s 2022 ABL Credit Agreement and Second A&R Second Lien Term Loan Agreement, as well as to cover transaction expenses.

Through September 11, 2027, subject to certain conditions, the Purchase Agreement also provides the Company with the option to draw upon (a “Series B Delayed Draw”) up to $ 30.0 million as a delayed draw, and concurrently issue up to an

additional 30,000 shares of Series B Preferred Stock and 581,304 additional warrants.

Each draw must be at least $ 5.0 million and is subject to satisfying certain conditions, including pro forma compliance with a First Lien Net Leverage Ratio (as defined in the First Lien Term Loan Credit Agreement (as defined below)) of 6.50 to 1.00.

For each $ 5.0 million draw, the Company will issue 5,000 shares of Series B Preferred Stock and grant an additional 65,491 Tranche A and an additional 31,393 Tranche B warrants.

For draws before December 10, 2025, the applicable Tranche A warrants will have an initial exercise price of $ 23.00 per share.

For draws on or after December 10, 2025, the applicable Tranche A warrants will have an initial exercise price equal to the lesser of $ 30.00 or 110 % of the 30-day volume weighted average price of the Company’s common stock, subject to adjustment.

Any additional Tranche B warrants will have an initial exercise price of $ 50.00 per share, subject to adjustment.

The Stellex Holder is not required to participate in more than one draw per calendar quarter.

Pursuant to the Purchase Agreement, the proceeds from the Series B Delayed Draw may be used only for the following purposes:

(i) to finance permitted acquisitions and certain growth initiatives (including the costs of expansion into new markets), (ii) to repay loans outstanding under the Company’s First Lien Term Loan Agreement (as defined herein), and (iii) for up to 20 % of such net proceeds, to finance the Company’s transformation plan as mutually agreed between the Company and Stellex.

Any undrawn amounts under this option are subject to a 1.0 % annual commitment fee.

The warrants issued in connection with these transactions are exercisable for 10 years and include customary anti-dilution and participation rights.

Further details regarding the terms, accounting treatment, and features of the Series B Preferred Stock and warrants are provided in Note 12 - Shareholders’ Equity and Note 13 - Redeemable Preferred Stock .

In connection with the Series B Transactions, the Company entered into amendments to its First Lien Term Loan Agreement, Second A&R Second Lien Term Loan Agreement, and 2022 ABL Credit Agreement.

These amendments provided the Company with increased flexibility to complete the equity issuance and related transactions, including reductions to interest rate margins, and increased flexibility regarding leverage ratio thresholds, covenants, and mandatory prepayment requirements.

Additional information regarding the related debt amendments is provided in Note 10 - Debt.

Basis of presentation.

19 unchanged sentences

Geographic area (in thousands):

Three Months Ended June 30, 2025

Three Months Ended September 30, 2025

United States Canada Other Countries Total

2 unchanged sentences

Total $ 170,501 $ 19,181 $ 35,294 $ 224,976

Three Months Ended June 30, 2024

Three Months Ended September 30, 2024

United States Canada Other Countries Total

2 unchanged sentences

Total $ 157,567 $ 15,304 $ 37,887 $ 210,758

Six Months Ended June 30, 2025

Nine Months Ended September 30, 2025

United States Canada Other Countries Total

2 unchanged sentences

Total $ 512,161 $ 56,812 $ 102,684 $ 671,657

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

United States Canada Other Countries Total

3 unchanged sentences

Operating segment and service type (in thousands):

Three Months Ended June 30, 2025

Three Months Ended September 30, 2025

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

2 unchanged sentences

Total $ 89,064 $ 103,824 $ 15,742 $ 16,346 $ 224,976

Three Months Ended June 30, 2024

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

Three Months Ended September 30, 2024

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

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

1 unchanged sentence

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

Six Months Ended June 30, 2025

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

Nine Months Ended September 30, 2025

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

IHT $ 274,145 $ 52 $ 53,959 $ 22,233 $ 350,389

1 unchanged sentence

Total $ 274,145 $ 312,217 $ 54,374 $ 30,921 $ 671,657

Six Months Ended June 30, 2024

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

Nine Months Ended September 30, 2024

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

IHT $ 254,584 $ 149 $ 48,979 $ 16,574 $ 320,286

4 unchanged sentences

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 June 30, 2025 and December 31, 2024.

ACCOUNTS RECEIVABLE

A summary of accounts receivable as of June 30, 2025 and December 31, 2024 is as follows (in thousands):

June 30, 2025 December 31, 2024

A summary of accounts receivable as of September 30, 2025 and December 31, 2024 is as follows (in thousands):

September 30, 2025 December 31, 2024

Trade accounts receivable $ 150,756 $ 145,743

3 unchanged sentences

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

June 30, 2025

September 30, 2025

Balance at beginning of period $ 3,271

4 unchanged sentences

Balance at end of period $ 4,379

A summary of inventory as of June 30, 2025 and December 31, 2024 is as follows (in thousands):

June 30, 2025 December 31, 2024

A summary of inventory as of September 30, 2025 and December 31, 2024 is as follows (in thousands):

September 30, 2025 December 31, 2024

Raw materials $ 10,038 $ 9,098

3 unchanged sentences

PREPAID EXPENSES AND OTHER CURRENT ASSETS

A summary of prepaid expenses and other current assets as of June 30, 2025 and December 31, 2024 is as follows (in thousands):

June 30, 2025 December 31, 2024

A summary of prepaid expenses and other current assets as of September 30, 2025 and December 31, 2024 is as follows (in thousands):

September 30, 2025 December 31, 2024

Insurance receivable $ 39,000 $ 39,000

7 unchanged sentences

PROPERTY, PLANT AND EQUIPMENT

A summary of property, plant and equipment as of June 30, 2025 and December 31, 2024 is as follows (in thousands):

June 30, 2025 December 31, 2024

A summary of property, plant and equipment as of September 30, 2025 and December 31, 2024 is as follows (in thousands):

September 30, 2025 December 31, 2024

Land $ 4,006 $ 4,006

9 unchanged sentences

Property, plant and equipment, net $ 111,018 $ 112,835

Included in the table above are assets under finance leases of $ 10.8 million and $ 7.7 million as of June 30, 2025 and December 31, 2024, respectively, and related accumulated amortization of $ 3.7 million and $ 3.2 million as of June 30, 2025 and December 31, 2024, respectively.

Depreciation expense for the three and six months ended June 30, 2025 and 2024 is included in the table below (in thousands):

Included in the table above are assets under finance leases of $ 12.1 million and $ 7.7 million as of September 30, 2025 and December 31, 2024, respectively, and related accumulated amortization of $ 4.4 million and $ 3.2 million as of September 30, 2025 and December 31, 2024, respectively.

Depreciation expense for the three and nine months ended September 30, 2025 and 2024 is included in the table below (in thousands):

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

4 unchanged sentences

INTANGIBLE ASSETS

A summary of intangible assets as of June 30, 2025 and December 31, 2024 is as follows (in thousands):

June 30, 2025

A summary of intangible assets as of September 30, 2025 and December 31, 2024 is as follows (in thousands):

September 30, 2025

Amount Accumulated

13 unchanged sentences

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

Amortization expense of intangible assets for the three months ended June 30, 2025 and 2024 was $ 3.1 million and $ 3.1 million, respectively.

Amortization expense of intangible assets for the six months ended June 30, 2025 and 2024 was $ 6.2 million and $ 6.2 million, respectively.

Amortization expense of intangible assets for the three months ended September 30, 2025 and 2024 was $ 3.1 million and $ 3.1 million, respectively.

Amortization expense of intangible assets for the nine months ended September 30, 2025 and 2024 was $ 9.3 million and $ 9.3 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 June 30, 2025 and December 31, 2024.

The weighted-average amortization period for intangible assets subject to amortization was 13.9 years and 13.8 years, respectively as of September 30, 2025 and December 31, 2024.

OTHER ACCRUED LIABILITIES

A summary of other accrued liabilities as of June 30, 2025 and December 31, 2024 is as follows (in thousands):

June 30, 2025 December 31, 2024

A summary of other accrued liabilities as of September 30, 2025 and December 31, 2024 is as follows (in thousands):

September 30, 2025 December 31, 2024

Legal and professional accruals $ 44,875 $ 44,285

13 unchanged sentences

Other accruals include various business expense accruals.

We recorded an income tax provision of $ 1.0 million and $ 1.2 million for the three and six months ended June 30, 2025, compared to a provision of $ 1.5 million and $ 1.5 million for the three and six months ended June 30, 2024.

The effective tax rate, inclusive of discrete items, was a provision of 29.9 % for the three months ended June 30, 2025, compared to a provision of 114.0 % for the three months ended June 30, 2024.

For the six months ended June 30, 2025, our effective tax rate, inclusive of discrete items, was a provision of 3.7 %, compared to a provision of 8.4 % for the six months ended June 30, 2024.

The decrease in effective tax rate for the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 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 smaller increase in income tax expense as compared to pretax income resulting in a decrease in effective tax rate.

We recorded an income tax provision of $ 0.9 million and $ 2.2 million for the three and nine months ended September 30, 2025, compared to a provision of $ 0.5 million and $ 2.0 million for the three and nine months ended September 30, 2024.

The effective tax rate, inclusive of discrete items, was a provision of 9.1 % for the three months ended September 30, 2025, compared to a provision of 4.7 % for the three months ended September 30, 2024.

For the nine months ended September 30, 2025, our effective tax rate, inclusive of discrete items, was a provision of 5.0 %, compared to a provision of 7.1 % for the nine months ended September 30, 2024.

The change in effective tax rate for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 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.

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

1 unchanged sentence

tax law with varying effective dates, with certain provisions effective in 2025 and others implemented through 2027.

currently assessing its impact on our consolidated financial statements.

initial assessment, we do not anticipate the Act will have a material impact on our consolidated financial statements.

Additional disclosures may be provided in future periods as the impact of the legislation is determined.

As of June 30, 2025 and December 31, 2024, our total long-term debt and finance lease obligations are summarized as follows (in thousands):

June 30, 2025 December 31, 2024

As of September 30, 2025 and December 31, 2024, our total long-term debt and finance lease obligations are summarized as follows (in thousands):

September 30, 2025 December 31, 2024

2022 ABL Credit Agreement

5 unchanged sentences

Corre Incremental Term Loan 1

Equipment Finance Loan

Equipment Finance Loans 666 1,399

Total 294,707 319,968

6 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 (“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 Amendment No.6 dated as of March 12, 2025, the “2022 ABL Credit Agreement”).

On March 12, 2025, using a portion of the proceeds from the Initial First Lien Term Loan (defined below), we fully repaid 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 and previously outstanding under the 2022 ABL Credit Agreement.

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”).

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 (“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, Amendment No.6 (“ABL Amendment No.6”) dated as of March 12, 2025, and ABL Amendment No.7 (defined below), the “2022 ABL Credit Agreement”).

On September 11, 2025, we entered into ABL Amendment No.7 to the 2022 ABL Credit Agreement with the lenders party thereto, and Eclipse Business Capital LLC, as agent (“ABL Amendment No.7”).

This amendment modified the 2022 ABL Credit Agreement (as amended through ABL Amendment No.6), to provide the Company and its subsidiaries with enhanced financial flexibility.

Key terms of ABL Amendment No.7 include:

• an extension of the maturity date from September 30, 2027 to October 2, 2028;

• the increase in the aggregate amount of commitments under the 2022 ABL Credit Agreement from $ 130.0 million to $ 150.0 million;

• lender consent for the consummation of the Series B Transactions;

• a reduction in the applicable interest rate margin on loans under the 2022 ABL Credit Agreement by a range of 0.25 % to 0.375 % per annum, as contingent upon the Company’s performance regarding EBITDA and Average Historical Excess Availability for the most recently ended calendar month, with such reductions effective beginning January 1, 2026.

• the modification of certain affirmative and negative covenants, in each case, to permit greater financial flexibility for the Company and its subsidiaries.

In connection with and as a condition to the effectiveness of ABL Amendment No.7, the Company prepaid loans outstanding under the ABL Credit Agreement in an aggregate principal amount equal to $ 25.0 million (without a corresponding commitment reduction).

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 $ 150.0 million 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 10/2/2028

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

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

Actual interest rate

12 unchanged sentences

Available amount at 9/30/2025 $ 36,459

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 June 30, 2024 was 15.44 % and cash paid for interest was $ 1.4 million and $ 2.7 million, respectively, during the six months ended June 30, 2025 and 2024.

The actual interest rate as of September 30, 2024 was 15.32 % and cash paid for interest was $ 1.4 million and $ 4.1 million, respectively, during the nine months ended September 30, 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 June 30, 2025, we are in compliance with the covenants.

As of June 30, 2025, $ 9.4 million in letters of credit were issued under the 2022 ABL Credit Agreement.

As of September 30, 2025, we are in compliance with the covenants.

As of September 30, 2025, $ 9.5 million in letters of credit were issued under the 2022 ABL Credit Agreement.

Such amounts remain undrawn and are off-balance sheet.

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

On March 12, 2025, using a portion of the proceeds from the Initial First Lien Term Loan (defined below), we fully repaid 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 June 30, 2024 were 11.19 % and 17.38 %, respectively.

Cash paid for interest during the six months ended June 30, 2025 and 2024 was $ 0.6 million and $ 1.4 million, respectively.

The actual and effective interest rates at September 30, 2024 were 10.32 % and 13.11 %, respectively.

Cash paid for interest during the nine months ended September 30, 2025 and 2024 was $ 0.6 million and $ 2.1 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.

On March 12, 2025, we entered into a First Lien Term Loan Credit Agreement (as amended by Amendment No.1 (defined below), 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 Loan”) and a $ 50.0 million delayed draw term loan tranche (the “First Lien Delayed Draw Term Loan”), 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 Loan 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 Loan 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 Existing A&R Term

Loan Agreement (as defined below).

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 an additional margin.

The additional margin was fixed at 6.50 % per annum for the quarter ending March 31, 2025, and thereafter contingent on the First Lien Net Leverage Ratio (as defined in the First Lien Term Loan Agreement) with a potential range of 7.00 % to 6.00 % for the quarter ending September 30, 2025, and 5.75 % to 6.75 % thereafter (pursuant to Amendment No.1 as described below).

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

As of June 30, 2025, we have not drawn on the First Lien Delayed Draw Term Loan.

As of September 30, 2025, we have not drawn on the First Lien Delayed Draw Term Loan.

On September 11, 2025, we entered into Amendment No.1 to the First Lien Term Loan Agreement ("Amendment No.1") with the lenders and HPS Investment Partners, LLC, as agent.

Amendment No.1 modified the First Lien Term Loan Agreement to provide the Company and its subsidiaries with enhanced financial flexibility.

Key terms of Amendment No.1 include:

• lender consent for the consummation of the Series B Transactions;

• a reduction of the interest rate margin applicable to the loans under the First Lien Term Loan Agreement by 0.25 % per annum, with such reduction commencing October 1, 2025;

• an increase of the maximum permitted First Lien Net Leverage Ratio (as defined in the First Lien Term Loan Agreement), tested as of the end of each fiscal quarter, to 6.00 to 1.00 from 5.50 to 1.00 through and including the fiscal quarter ending December 31, 2026, with a subsequent reversion to 5.50 to 1.00 for the fiscal quarters ending thereafter;

• the modification of certain affirmative and negative covenants and mandatory prepayment requirements, in each case, to permit greater financial flexibility for the Company and its subsidiaries.

The terms of the Initial First Lien Term Loan 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)

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

Principal payments $ 438 quarterly

3 unchanged sentences

9/30/2025 10.73 %

Interest payments quarterly

Interest payments Last day of borrower-selected interest period, but no later than quarterly

Cash paid for interest

5 unchanged sentences

1 Consists of debt discount of $ 3,644 and debt issuance cost of $ 4,130 .

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.

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

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 June 30, 2025, we are in compliance with the covenants.

As of September 30, 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”).

On March 12, 2025, we entered into a Second Amended and Restated Second Lien Term Loan Credit Agreement with the lenders party thereto (“Corre and affiliates”) and Cantor Fitzgerald Securities, as Agent (as amended by the Second Lien Amendment (defined below) , 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 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.

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The remaining portion of the Corre Uptiered Loan of $ 93.9 million, together with certain fees and accrued interest, was 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.

On September 11, 2025, we entered into Amendment No.1 to the Second A&R Second Lien Term Loan Agreement, with the lenders party thereto, and Cantor Fitzgerald Securities, as Agent, (the “Second Lien Amendment”).

As a condition to the effectiveness of the Second Lien Amendment, the Company prepaid approximately $ 42.9 million of principal and accrued and unpaid interest on loans outstanding under the Second A&R Second Lien Term Loan Agreement.

The unamortized debt issuance cost associated with the prepayment totaling approximately $ 1.3 million was written off and recorded as a loss on debt extinguishment in the consolidated statements of operations.

The Second Lien Amendment modifies the Second A&R Second Lien Term Loan Agreement to provide the Company and its subsidiaries with enhanced financial flexibility.

Key terms of the Second Amendment include:

• lender consent for the consummation of the Series B Transactions;

• increase the maximum permitted First Lien Net Leverage Ratio (as defined in the Second A&R Second Lien Term Loan Agreement), tested as of the end of each fiscal quarter, to 6.50 to 1.00 from 6.00 to 1.00 through and including the fiscal quarter ending December 31, 2026, with a subsequent reversion to 6.00 to 1.00 for the fiscal quarters ending thereafter;

• the modification of certain affirmative and negative covenants and mandatory prepayment requirements, in each case, to permit greater financial flexibility for the Company and its subsidiaries.

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

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 June 30, 2025, we are in compliance with the covenants.

Available funding commitments 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.

As of September 30, 2025, we are in compliance with the covenants.

Current available funding commitment under the Second A&R Second Lien Term Loan Agreement, subject to certain conditions, include a $ 71.6 million second lien term loan (the “Second Lien Term Loans”), originally provided by Corre and certain of its affiliates, consisting of a $ 61.6 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”) available until April 15, 2026 (the “Delayed Draw Availability Period”), subject to satisfying certain conditions.

At our request and with applicable lender consent, the Delayed Draw Availability Period may also be extended or reinstated following the expiration thereof.

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 June 30, 2025, we have not drawn on the Second Lien Delayed Draw Term Loans.

As of September 30, 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.

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1 Principal payments represent a percentage (ranges between 0 % and 0.25 % based on the First Lien Net Leverage Ratio) of the outstanding principal balance.

As of June 30, 2025 we are not making principal payments.

As of September 30, 2025 we are not making quarterly principal payments.

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 June 30, 2024 were 12.0 % and 22.96 %, respectively.

Cash paid for interest during the six months ended June 30, 2025 and 2024 was $ 2.5 million and $ 2.9 million, respectively.

The stated and effective interest rates at September 30, 2024 were 12.0 % and 22.96 %, respectively.

Cash paid for interest during the nine months ended September 30, 2025 and 2024 was $ 2.5 million and $ 4.3 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 June 30, 2024 were 13.5 % and 14.56 %, respectively.

Cash paid for interest during the six months ended June 30, 2025 and 2024 was $ 2.7 million and $ 1.4 million, respectively.

As of June 30, 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 .

The warrants will expire on December 8, 2028.

The exercise price and the number of shares of our common stock issuable on exercise of the warrants are subject to certain antidilution adjustments, including for stock dividends, stock splits, reclassifications, noncash distributions, cash dividends, certain equity issuances and business combination transactions.

The warrants can be exercised by rendering cash or by means of a cashless option as set forth in the agreement.

The stated and effective interest rates at September 30, 2024 were 13.5 % and 14.56 %, respectively.

Cash paid for interest during the nine months ended September 30, 2025 and 2024 was $ 2.7 million and $ 2.8 million, respectively.

Equipment Finance Loans

Equipment finance loans consist of secured borrowings used to acquire machinery and equipment (including office equipment).

Under some of the arrangements, the lender pays the equipment vendor directly on behalf of the Company;

as a result, no cash proceeds are received by the Company.

The loans are secured by the financed equipment and are repaid over fixed terms through scheduled installments.

The related assets are recorded in property, plant, and equipment, net of accumulated depreciation.

As of September 30, 2025 and December 31, 2024, the outstanding balance of equipment finance loans was $ 0.7 million and $ 1.4 million, respectively.

Fair Value of Debt

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(“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”) of 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 June 30, 2025, we have $ 19.0 million of letters of credit outstanding under the Substitute Reimbursement Facility.

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

On August 25, 2025, we entered into a new agreement with 1970 Group Originator, Inc., an affiliate of 1970 Group, titled the Substitute Insurance Collateral Facility Program Agreement (the “Collateral Facility Agreement”), which replaced the Substitute Insurance Reimbursement Facility Agreement.

The Collateral Facility Agreement establishes a revised framework

for collateral and credit support related to our insurance programs, superseding the prior reimbursement facility.

As of September 30, 2025, we have $ 19.1 million of letters of credit outstanding under the Collateral Facility Agreement.

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

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 June 30, 2025, we had approximately $ 0.5 million of unamortized deferred fees.

As of June 30, 2025, we had $ 16.6 million of unrestricted cash and cash equivalents and $ 4.1 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 June 30, 2025 were $ 6.4 million, and approximately $ 1.1 million of such cash is restricted.

As of June 30, 2025, we had approximately $ 32.7 million of available borrowing capacity under our various credit agreements, consisting of $ 22.7 million available under the Revolving Credit Loans and $ 10.0 million available under the Second Lien Delayed Draw Term Loan under the Second A&R Second Lien Term Loan Credit Agreement.

As of June 30, 2025, we had $ 30.5 million in letters of credit and $ 2.0 million in surety bonds outstanding.

The fees in the amount of $ 2.3 million paid by us under this arrangement are deferred and amortized to interest expense over the term of the arrangement.

As of September 30, 2025, we had approximately $ 2.1 million of unamortized deferred fees.

As of September 30, 2025, we had $ 10.6 million of unrestricted cash and cash equivalents and $ 4.2 million of restricted cash, including $ 2.8 million of restricted cash held as collateral for certain letters of credit and commercial card programs.

International cash balances included in total cash as of September 30, 2025 were $ 6.1 million, and approximately $ 1.2 million of such cash is restricted.

As of September 30, 2025, we had approximately $ 46.5 million of available borrowing capacity under our various credit agreements, consisting of $ 36.5 million available under the Revolving Credit Loans and $ 10.0 million available under the Second Lien Delayed Draw Term Loan under the Second A&R Second Lien Term Loan Agreement.

As of September 30, 2025, we had $ 30.6 million in letters of credit and $ 1.9 million in surety bonds outstanding.

EMPLOYEE BENEFIT PLANS

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

Three Months Ended June 30, Six Months Ended June 30,

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

2025 2024 2025 2024

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SHAREHOLDERS’ EQUITY

Shareholders’ Equity (Deficit) and Preferred Stock

As of June 30, 2025 there were 4,498,932 shares of our common stock outstanding and 12,000,000 shares authorized at $ 0.30 par value per share.

As of June 30, 2025 we had 500,000 authorized shares of preferred stock, none of which had been issued.

Shareholders’ Equity (Deficit)

As of September 30, 2025 there were 4,498,854 shares of our common stock outstanding and 12,000,000 shares authorized at $ 0.30 par value per share.

As of September 30, 2025 there were 75,000 shares of preferred stock outstanding, designated as Series B Preferred Stock, and 500,000 shares authorized at $ 100.00 par value per share (see Note 13 - Redeemable Preferred Stock for more detail).

As of September 30, 2025, and December 31, 2024, APSC Holdco II, L.P.

If not exercised, the warrants will expire on December 8, 2028.

The warrants were evaluated and classified as equity, with their fair value recorded in Additional Paid-In Capital.

On September 11, 2025, in connection with the issuance of the Series B Preferred Stock, the Company issued warrants to the Stellex Holder to purchase:

• 982,371 shares of the Company’s common stock at an initial exercise price of $ 23.00 per share (Tranche A), and

• 470,889 shares of the Company’s common stock at an initial exercise price of $ 50.00 per share (Tranche B).

The warrants are classified as equity and were initially recorded in Additional Paid-In Capital at their estimated fair value of $ 20.9 million as of the issuance date with no subsequent remeasurement.

The warrants are exercisable at any time during the ten-year period following issuance.

The exercise price and the number of shares of our common stock issuable on exercise of the warrants are subject to certain antidilution adjustments, including for stock dividends, stock splits, reclassifications, non-cash distributions, cash dividends, certain equity issuances and business combination transactions.

The warrants can be exercised by rendering cash or by means of a cashless option as set forth in the agreement.

Accumulated Other Comprehensive loss

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

Six Months Ended

June 30, 2025 Six Months Ended

June 30, 2024

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

Nine Months Ended

September 30, 2025 Nine Months Ended

September 30, 2024

(unaudited) (unaudited)

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Balance, end of period $ ( 26,295 ) $ ( 10,652 ) $ ( 77 ) $ ( 37,024 ) $ ( 24,536 ) $ ( 10,777 ) $ 40 $ ( 35,273 )

REDEEMABLE PREFERRED STOCK

On September 11, 2025, the Company entered into the Purchase Agreement with the “Stellex Holder” which provided for, among other things, the issuance of 75,000 shares of preferred stock, $ 100.00 par value per share, of the Company designated as Series B Preferred Stock (the “Series B Preferred Stock”), for aggregate gross proceeds of $ 75.0 million.

In connection with the transaction, the Company also issued the Stellex Holder 1,453,260 warrants (see Note 12 - Shareholders’ Equity for additional detail).

Classification and fair value allocation .

The Series B Preferred Stock is classified as temporary equity in the mezzanine section of the consolidated balance sheets, as it is potentially redeemable for cash if required by the holder beginning December 31, 2030, and under certain other events outside the Company’s control.

The proceeds from the Series B Transactions were allocated based on relative fair value of the warrants and the Series B Preferred Stock:

$ 20.9 million was allocated to warrants and $ 54.1 million was allocated to the Series B Preferred Stock.

Total issuance costs of $ 7.0 million were allocated to the Series B Preferred Stock and warrants based on their relative fair values.

Of the total, $ 5.1 million was allocated to the Series B Preferred Stock and recorded as a reduction to the initial carrying value with the remaining $ 1.9 million, allocated to the warrants and recorded as a reduction to Additional Paid-In Capital.

Delayed Draw Rights .

Pursuant to the Purchase Agreement, the Company has the option, from time to time prior to September 11, 2027, to draw up to $ 30.0 million in aggregate additional proceeds through the issuance of up to 30,000 shares of Series B Preferred Stock (the “Delayed Draw Preferred Shares”).

Each “Series B Delayed Draw” must be for a minimum of $ 5.0 million, and is subject to certain conditions, including pro forma compliance with a First Lien Net Leverage Ratio of 6.50 to 1.00, as defined in the Company’s First Lien Term Loan Agreement.

The Stellex Holder is not obligated to fund more than one Series B Delayed Draw per calendar quarter.

If the Company exercises its option to issue all of the Delayed Draw Preferred Shares available to be issued under the Purchase Agreement, an aggregate of, 581,304 warrants will be issued in connection with such draw.

Undrawn amounts under the Series B Delayed Draw commitment are subject to a 1.0 % per annum undrawn commitment fee, payable quarterly in-kind, by adding the fee amount to the Stated Value of the Series B Preferred Stock.

These fees are subject to quarterly compounding and are included in the accreted value of the Series B Preferred Stock.

Terms of the Series B Preferred Stock .

The Series B Preferred Stock does not have a maturity date and ranks senior to the Company’s common stock with respect to both dividends and liquidation preferences.

Dividends on the Series B Preferred Stock accrue at an annual rate of 10.5 % and are payable quarterly.

At the sole discretion of the Company, these dividends may be paid either in cash or in-kind (“PIK”).

When paid in-kind, dividends are compounded quarterly and added to the Stated Value of the shares.

The term “Stated Value” refers to the Initial Stated Value of $ 1,000 per share, which is increased by any accrued (including compounded) PIK dividends and undrawn commitment fees.

The Series B Preferred Stock is redeemable at the Company’s option, from time to time, at the then-applicable Redemption Price (as defined herein) (x) commencing after March 11, 2029, in whole or in part, or (y) after certain change of control transactions or other corporate events, in whole but not in part.

Additionally, holders of the Series B Preferred have the right to request the Company to redeem all (but not part) of their shares on or after December 31, 2030, at the then-applicable Redemption Price.

Upon redemption, the Company is required to pay the greater of two amounts:

either 140 % of the Initial Stated Value (applicable only during the first 42 months after issuance and net of any cash returns made), or the Stated Value plus all accrued but uncompounded dividends and undrawn commitment fees.

Accretion Accounting.

Since the Series B Preferred Stock is redeemable at the request of the holder beginning December 31, 2030, the Company is accreting the carrying value of the Series B Preferred Stock to its expected redemption value on that date using the effective interest method, specifically Method 2 under ASC 480-10-S99-3A.

The redemption value encompasses all compounded PIK dividends and undrawn commitment fees, as well as any accrued but uncompounded returns as of the redemption date.

The initial carrying value of the Series B Preferred Stock was $ 49.0 million, net of allocated issuance costs.

The estimated redemption value as of December 31, 2030, assuming all dividends are PIK, is approximately $ 132.0 million, which includes approximately $ 57.0 million of PIK dividends and commitment fees.

The difference between the initial carrying value and the estimated redemption value is being accreted over the estimated 5.31-year period leading up to the earliest redemption date.

The accretion premium is treated as a deemed dividend and is recognized through adjustments to additional paid-in capital.

The following table represents the change in carrying value of the redeemable preferred stock during the period ended September 30, 2025:

Balance at December 31, 2024 $ —

Additions 49,034

Accrued paid-in-kind dividend 437

Accrued paid-in-kind commitment fees 17

Accretion to redemption value 156

Balance at September 30, 2025 $ 49,644

COMMITMENTS AND CONTINGENCIES

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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 matters.

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.

Notwithstanding the uncertainty as to the outcome and while our insurance coverage might not be available or adequate to cover these claims, based upon the information currently available, we do not believe that any uninsured losses that might arise from these lawsuits and proceedings will have a materially adverse effect on our condensed consolidated financial statements.

Notwithstanding the uncertainty as to the outcome and while our insurance coverage might not be available or adequate to cover these claims, based upon the information currently available, we do not believe that any uninsured losses that might arise from our ongoing lawsuits and proceedings will have a materially adverse effect on our condensed consolidated financial statements.

Kelli Most Litigation - On November 13, 2018, Kelli Most filed a lawsuit against Team Industrial Services, Inc., individually and as a personal representative of the estate of Jesse Henson, in the 268th District Court of Fort Bend County, Texas (the “Most litigation”).

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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 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 did not seek review with the Texas Supreme Court.

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District Court, Kansas District in Kansas City.

We currently have accrued a liability of $ 39.0 million as of June 30, 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.

We currently have accrued a liability of $ 39.0 million as of September 30, 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.

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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 potentially repaid over an extended period related to this alleged 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, subject to appeal, as of June 30, 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 June 30, 2025, of which approximately $ 1.7 million is not covered by our various insurance policies.

Accordingly, for all matters discussed within this Note 14 - Commitments and Contingencies , we have accrued in the aggregate approximately $ 40.7 million as of September 30, 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”).

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Three Months Ended

June 30, 2025

September 30, 2025

(unaudited) (unaudited) (unaudited)

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Three Months Ended

June 30, 2024

September 30, 2024

(unaudited) (unaudited) (unaudited)

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Adjusted EBITDA $ 12,998 $ 9,056 $ 22,054

Six Months Ended

June 30, 2025

Nine Months Ended

September 30, 2025

(unaudited) (unaudited) (unaudited)

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Adjusted EBITDA $ 45,984 $ 28,675 $ 74,659

Six Months Ended

June 30, 2024

Nine Months Ended

September 30, 2024

(unaudited) (unaudited) (unaudited)

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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.

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

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

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

Segment adjusted EBITDA:

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Consolidated operating income

1,342 3,158 7,442 7,931

Interest expense ( 11,855 ) ( 11,770 ) ( 35,187 ) ( 35,777 )

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( 1,283 ) — ( 13,136 ) —

Other income (expense) ( 3,490 ) ( 541 ) ( 3,694 ) 821

Other income (expense), net

1,298 ( 2,010 ) ( 2,396 ) ( 1,189 )

Loss before income taxes $ ( 10,498 ) $ ( 10,622 ) $ ( 43,277 ) $ ( 29,035 )

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

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1 Excludes finance leases.

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

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

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

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$ 8,747 $ 9,034 $ 25,676 $ 27,934

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

1 Breakdown of depreciation and amortization included in the condensed consolidated statements of operations described below:

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

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RELATED PARTY TRANSACTIONS

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 .

In September 2025, $ 15.0 million of the Company’s outstanding loan under the Second A&R Second Lien Term Loan Agreement was acquired by JFL Credit Opportunities Fund II, L.P.

and affiliates, in which one of the Company’s independent director is an equity partner.

The terms of the loan remain unchanged.

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

In connection with the Series B Transactions as discussed in Note 1 - Discussion of Business and Basis of preparation, on September 11, 2025, the Company entered into the Purchase Agreement with the Stellex Holder.

In addition, $ 10.0 million of the Company’s outstanding loan under the Second A&R Second Lien Term Loan Agreement was acquired by the Stellex Holder on September 11, 2025.

The terms of the loan remain unchanged.

SUBSEQUENT EVENTS

As of August 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 June 30, 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 .

As of November 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 September 30, 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.

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