What changed in this filing

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Item 1. Financial Statements

2026-05-13 compared with 2025-11-12 · 192 added, 402 removed, 418 unchanged (59% of the section changed)

3 unchanged sentences

(in thousands, except share and per share data)

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

ASSETS (unaudited)

28 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

Redeemable preferred stock, par value $ 100.00 per share, 75,000 shares issued and outstanding at March 31, 2026 and December 31, 2025

54,832 51,951

Shareholders’ equity (deficit):

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

Preferred stock, 500,000 shares authorized, 75,000 shares (included in redeemable preferred stock) issued and outstanding at March 31, 2026 and December 31, 2025

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

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

4,571,382 and 4,532,240 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively

Additional paid-in capital 473,730 475,829

8 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

Revenues $ 215,056 $ 198,655

Operating expenses 161,912 148,287

Depreciation and amortization

Gross margin 50,155 47,266

Selling, general and administrative expenses

Operating income

48,062 47,969

Depreciation and amortization

Operating loss ( 3,371 ) ( 6,003 )

Interest expense, net ( 8,882 ) ( 11,436 )

13 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF

COMPREHENSIVE INCOME (LOSS)

COMPREHENSIVE LOSS

(in thousands)

Three Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

Net loss $ ( 11,333 ) $ ( 29,718 )

4 unchanged sentences

Amortization of net actuarial loss

93 82 274 240

Other comprehensive income (loss) before tax ( 1,488 ) 2,110

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

Tax provision attributable to other comprehensive income (loss)

( 29 ) ( 44 )

12 unchanged sentences

Net loss — — — ( 11,333 ) — ( 11,333 )

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

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

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

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

Net loss — — — ( 4,266 ) — ( 4,266 )

Net settlement of vested stock awards 6 2 ( 65 ) — — ( 63 )

Foreign currency translation adjustment, net of tax — — — — 6,904 6,904

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

Non-cash compensation — — 366 — — 366

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 — — ( 2,874 ) — — ( 2,874 )

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

Net loss — — — ( 17,195 ) — ( 17,195 )

Net settlement of vested stock awards 39 11 ( 179 ) — — ( 168 )

3 unchanged sentences

Balance at March 31, 2026 4,571 $ 1,371 $ 473,730 $ ( 476,210 ) $ ( 38,310 ) $ ( 39,419 )

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

Balance at December 31, 2024 4,493 $ 1,348 $ 460,186 $ ( 415,667 ) $ ( 44,129 ) $ 1,738

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

2 unchanged sentences

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

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

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

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

Allowance for credit losses

Foreign currency loss 2,613 1,504

Foreign currency loss (gain)

Deferred income taxes ( 796 ) ( 491 )

Loss (gain) on asset disposal

Non-cash compensation costs 665 1,744

Non-cash compensation cost (credit) 954 ( 53 )

Other, net ( 74 ) 37

7 unchanged sentences

Income taxes 377 127

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

Net cash used in operating activities ( 9,095 ) ( 28,661 )

Cash flows from investing activities:

9 unchanged sentences

Payments under First Lien Term Loan ( 438 ) —

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

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

1 unchanged sentence

Payments for debt issuance costs — ( 8,053 )

Proceeds from issuance of Series B Preferred Stock and warrants

Issuance cost related to Series B Preferred Stock and warrants

Other ( 525 ) ( 705 )

Net cash provided by (used) in financing activities 14,176 ( 9,927 )

Net cash provided by financing activities 6,237 11,188

Effect of exchange rate changes on cash ( 38 ) 137

20 unchanged sentences

We also believe that we are unique in our ability to provide these services in three distinct customer demand profiles:

(i) turnaround or project services, (ii) callout services, and (iii) nested or run-and-maintain services.

(i) turnaround or project services, (ii) call-out services, and (iii) nested or run-and-maintain services.

IHT provides conventional and advanced non-destructive testing services primarily for the process, pipeline and power sectors, pipeline integrity management services, and field heat-treating services, as well as associated engineering and condition assessment services.

19 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.

These condensed consolidated financial statements have been prepared in accordance with U.S.

Generally Accepted Accounting Principles (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (the “SEC”).

Generally Accepted Accounting Principles (“U.S.

GAAP”) and the rules and regulations of the Securities and Exchange Commission (the “SEC”).

In the opinion of management, these unaudited condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of results for such periods.

6 unchanged sentences

Reclassifications.

Certain amounts in prior periods have been reclassified to conform to the current year presentation.

Certain amounts in prior periods have been reclassified to conform to the current year presentation, including the separate presentation of depreciation and amortization expense on the condensed consolidated statements of operations.

Such reclassifications did not have any effect on our financial condition or results of operations as previously reported.

3 unchanged sentences

Since the date of our Annual Report on Form 10-K, there have been no material changes to our significant accounting policies.

Newly Adopted Accounting Standards.

In July 2025, the FASB issued ASU 2025-05, Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ ASU 2025-05”).

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

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

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

T he Company has elected to apply the practical expedient in its assessment of an allowance for credit losses as of March 31, 2026.

The adoption did not have a material impact on the Company’s condensed consolidated financial statements.

Disaggregation of revenue.

1 unchanged sentence

A disaggregation of our revenue from customer contracts by geographic region, by reportable operating segment and by service type is presented below:

Geographic area (in thousands):

Three Months Ended September 30, 2025

United States Canada Other Countries Total

IHT $ 99,374 $ 10,525 $ 3,879 $ 113,778

MS 71,127 8,656 31,415 111,198

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

Three Months Ended September 30, 2024

United States Canada Other Countries Total

IHT $ 94,375 $ 10,103 $ 3,126 $ 107,604

MS 63,192 5,201 34,761 103,154

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

Nine Months Ended September 30, 2025

Revenue by geographic area (in thousands):

Three Months Ended March 31, 2026

United States Canada Other Countries Total

2 unchanged sentences

Total $ 166,323 $ 16,557 $ 32,176 $ 215,056

Nine Months Ended September 30, 2024

Three Months Ended March 31, 2025

United States Canada Other Countries Total

2 unchanged sentences

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

Operating segment and service type (in thousands):

Three Months Ended September 30, 2025

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

IHT $ 89,064 $ — $ 15,665 $ 9,049 $ 113,778

MS — 103,824 77 7,297 111,198

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

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

MS — 100,780 363 2,011 103,154

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

Nine Months Ended September 30, 2025

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

1 As of January 1, 2026, Emission Control Services (ECS), previously included in the MS segment, was moved to the IHT segment, refer to Note 15 - Segment Disclosures for more information.

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

Three Months Ended March 31, 2026

Non-Destructive Evaluation and Testing Services Repair and Maintenance Services

Heat-Treating Other Total

IHT $ 104,076 $ 8 $ 16,653 $ 2,654 $ 123,391

1 unchanged sentence

Total $ 104,076 $ 90,435 $ 16,672 $ 3,873 $ 215,056

Nine Months Ended September 30, 2024

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

Three Months Ended March 31, 2025

Non-Destructive Evaluation and Testing Services Repair and Maintenance Services

Heat-Treating Other Total

IHT $ 94,644 $ 1 $ 16,374 $ 2,602 $ 113,621

1 unchanged sentence

Total $ 94,644 $ 83,882 $ 16,563 $ 3,566 $ 198,655

For additional information on our reportable segments, refer to Note 15 - Segment Disclosures .

1 As of January 1, 2026, ECS, previously included in the MS segment, was moved to the IHT segment, refer to Note 15 - Segment Disclosures for more information.

For additional information on our reportable operating segments, refer to Note 15 - Segment Disclosures .

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, 2025 and December 31, 2024.

ACCOUNTS RECEIVABLE

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

A summary of accounts receivable as of March 31, 2026 and December 31, 2025 is as follows (in thousands):

March 31, 2026 December 31, 2025

Trade accounts receivable $ 132,979 $ 143,923

3 unchanged sentences

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

September 30, 2025

March 31, 2026

Balance at beginning of period $ 4,585

4 unchanged sentences

Balance at end of period $ 4,395

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

September 30, 2025 December 31, 2024

A summary of inventory as of March 31, 2026 and December 31, 2025 is as follows (in thousands):

March 31, 2026 December 31, 2025

Raw materials $ 10,040 $ 9,781

3 unchanged sentences

PREPAID EXPENSES AND OTHER CURRENT ASSETS

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

A summary of prepaid expenses and other current assets as of March 31, 2026 and December 31, 2025 is as follows (in thousands):

March 31, 2026 December 31, 2025

Insurance receivables $ 10,000 $ 10,000

Prepaid expenses 15,603 14,039

Other current assets 2,682 3,911

Total $ 59,523 $ 58,643

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 .

Prepaid expenses and other current assets $ 28,285 $ 27,950

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

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.

Other current assets include other receivables, current portion of software implementation costs, and deferred financing charges.

PROPERTY, PLANT AND EQUIPMENT

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

A summary of property, plant and equipment as of March 31, 2026 and December 31, 2025 is as follows (in thousands):

March 31, 2026 December 31, 2025

Land $ 4,006 $ 4,006

9 unchanged sentences

Property, plant and equipment, net $ 108,512 $ 110,628

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

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

Depreciation expense:

Amount included in operating expenses $ 3,006 $ 3,420 $ 9,185 $ 10,467

Amount included in SG&A expenses 1,622 1,718 4,900 5,205

Total depreciation expense $ 4,628 $ 5,138 $ 14,085 $ 15,672

Included in the table above are assets under finance leases of $ 13.3 million and $ 13.0 million as of March 31, 2026 and December 31, 2025, respectively, and related accumulated amortization of $ 5.3 million and $ 4.8 million as of March 31, 2026 and December 31, 2025, respectively.

Depreciation expense for the three months ended March 31, 2026 and 2025 was $ 4.5 million and $ 4.7 million, respectively.

INTANGIBLE ASSETS

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

September 30, 2025

A summary of intangible assets as of March 31, 2026 and December 31, 2025 is as follows (in thousands):

March 31, 2026

Amount Accumulated

13 unchanged sentences

Intangible assets $ 184,833 $ ( 146,984 ) $ 37,849

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 September 30, 2025 and December 31, 2024.

Amortization expense of intangible assets was $ 3.1 million for the three months ended March 31, 2026 and 2025.

The weighted-average amortization period for intangible assets subject to amortization was 14.0 years as of March 31, 2026 and December 31, 2025.

OTHER ACCRUED LIABILITIES

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

A summary of other accrued liabilities as of March 31, 2026 and December 31, 2025 is as follows (in thousands):

March 31, 2026 December 31, 2025

Payroll and other compensation expenses $ 33,275 $ 28,647

Legal and professional accruals 12,829 13,502

Insurance accruals 3,576 3,782

1 unchanged sentence

Accrued interest 4,333 1,633

Volume discount 1,885 1,902

Volume discounts

Other accruals 2,240 1,596

Total $ 61,953 $ 56,724

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

Legal and professional accruals include accruals for legal and professional fees as well as accrued legal claims, refer to Note 14 - 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 workers compensation cost.

Insurance accruals primarily relate to 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.

1 unchanged sentence

Other accruals include various business expense accruals.

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.

The Act includes changes to U.S.

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

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 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

$ 67,886 $ 112,671

We recorded an income tax provision of $ 0.0 million for the three months ended March 31, 2026, compared to a provision of $ 0.2 million for the three months ended March 31, 2025.

The effective tax rate, inclusive of discrete items, was a provision of 0.0 % for the three months ended March 31, 2026, compared to a provision of 0.8 % for the three months ended March 31, 2025.

The decrease in effective tax rate for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 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.

As of March 31, 2026 and December 31, 2025, our total long-term debt and finance lease obligations are summarized as follows (in thousands):

March 31, 2026 December 31, 2025

2022 ABL Credit Facility $ 65,986 $ 58,786

First Lien Term Loan 1

166,142 166,241

2025 Second Lien Term Loan 1

ME/RE Loans 1

Corre Uptiered Loan 1

Corre Incremental Term Loan 1

Equipment Finance Loans 666 1,399

64,393 62,063

Equipment Financing Loans 1,362 1,436

Total 297,883 288,526

5 unchanged sentences

See below for additional information.

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, 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”).

2022 ABL Credit Agreement

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, Amendment No.4 dated as of March 6, 2024, Amendment No.5 dated as of September 30, 2024, Amendment No.6 dated as of March 12, 2025 and Amendment No.7 dated as of September 11, 2025, 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 $ 150.0 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):

15 unchanged sentences

Available amount at 3/31/2026 $ 30,495

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.

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 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 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.

As of March 31, 2026, we were in compliance with the covenants.

As of March 31, 2026, $ 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 (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 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 (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.

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).

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).

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 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):

On March 12, 2025, we entered into a First Lien Term Loan Credit Agreement (such agreement, as amended by Amendment No.1 dated as of September 11, 2025, the “First Lien Term Loan Agreement”) with the lenders party thereto and HPS Investment Partners, LLC.

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 (or base+applicable margin)

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

Principal payments $ 438 quarterly

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3/31/2026 11.21 %

3/31/2025 12.64 %

Actual interest rate

3/31/2026 9.42 %

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

3/31/2025 10.83 %

Interest payments variable 1

Cash paid for interest

YTD 3/31/2026 $ 1,494

YTD 3/31/2025 $ —

Balances at 3/31/2026

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Net carrying balance $ 166,142

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

Balances at 12/31/2025

Principal balance $ 173,688

Unamortized balance of debt discount and issuance cost 2

Net carrying balance $ 166,241

1 Interest payment dates may be monthly or quarterly based on the Company’s election (subject to availability), adjusted to the nearest business day.

The First Lien Term Loan Agreement contains certain conditions to borrowings, events of default and affirmative and negative covenants as described in the First Lien Term Loan Agreement.

As of March 31, 2026, we were 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 (“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.

On March 12, 2025, using a portion of the proceeds from the Initial First Lien Term Loan, 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, was rolled into the 2025 Second Lien Term Loans (defined below).

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 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 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.

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.

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 (as amended by Amendment No.1 dated as of September 11, 2025, 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.

Available funding commitments to the Company under the Second A&R Second Lien Term Loan Agreement, subject to certain conditions, included a $ 107.4 million second lien term loan (the “Second Lien Term Loans”), initially provided by Corre Partners Management, LLC and certain of its affiliates (“Corre and 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 was available to be drawn from March 12, 2025, until April 15, 2026, subject to satisfying certain conditions.

The amount currently outstanding under the Second A&R Second Lien Term Loan Agreement is a $ 65.8 million second lien term loan, including certain interest payments paid in kind.

As of April 15, 2026, the availability period for the Second Lien Delayed Draw Term Loans expired.

No amounts were drawn under the Second Lien Delayed Draw Term Loans prior to the expiration date.

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

3 unchanged sentences

3/31/2026 16.32 %

3/31/2025 16.01 %

Actual interest rate

3/31/2026 13.50 %

3/31/2025 13.50 %

Interest payments quarterly 2

Cash paid for interest

9/30/2025 $ 1,129

YTD 3/31/2026 $ —

YTD 3/31/2025 $ —

PIK interest added to principal balance

9/30/2025 $ 5,990

YTD 3/31/2026 $ 2,120

YTD 3/31/2025 $ —

Balances at 3/31/2026

2 unchanged sentences

Net carrying balance $ 64,393

Balances at 12/31/2025

Principal balance $ 63,696

Unamortized balance of debt issuance cost $( 1,633 )

Net carrying balance $ 62,063

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 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 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 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).

As of March 31, 2026 we are not making quarterly principal payments.

2 Interest payments are based on the First Lien Net Leverage Ratio and may be paid in cash or PIK.

As of March 31, 2026, all interest is PIK.

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 as described in the agreement.

As of March 31, 2026, we were in compliance with the covenants.

Equipment Financing Loans

Equipment financing 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;

2 unchanged sentences

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.

As of March 31, 2026 and December 31, 2025, the outstanding balance of equipment financing loans was $ 1.4 million.

Fair Value of Debt

1 unchanged sentence

1970 Group Substitute Insurance Reimbursement Facility

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 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 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.

As of March 31, 2026, the Company maintains $ 19.1 million of letters of credit outstanding under its Substitute Insurance Collateral Facility Program Agreement (the “Collateral Facility Agreement”) with 1970 Group Originator, Inc.

The collateral facility agreement remains off-balance sheet unless drawn upon.

Deferred facility fees are amortized to interest expense;

the unamortized balances as of March 31, 2026 and December 31, 2025, were $ 1.0 million and $ 1.5 million, respectively.

For additional details, refer to Note 11 in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

EMPLOYEE BENEFIT PLANS

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The pension plan was frozen in 1994 and no new participants have been added since that date.

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

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

2025 2024 2025 2024

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

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

Three Months Ended March 31,

(unaudited) (unaudited)

Interest cost $ 713 $ 672

1 unchanged sentence

Amortization of prior service cost 8 8

Amortization of net actuarial loss 93 82 274 240

Net periodic pension credit $ ( 55 ) $ ( 111 ) $ ( 160 ) $ ( 326 )

Net pension credit is included in “Other income (expense), net” on our condensed consolidated statements of operations.

Unrecognized net actuarial loss

Net periodic pension cost (credit) $ 5 $ ( 51 )

Net pension cost (credit) is included in “Other income (expense), net” on our condensed consolidated statements of operations.

The expected long-term rate of return on invested assets is determined based on the weighted average of expected returns on asset investment categories for the U.K.

1 unchanged sentence

5.7 % overall, 8.2 % for equities and 5.6 % for debt securities.

SHAREHOLDERS’ EQUITY

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.

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 .

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 (deficit) is as follows (in thousands):

Nine Months Ended

September 30, 2025 Nine Months Ended

September 30, 2024

Shareholders’ Equity (Deficit)

As of March 31, 2026 there were 4,571,382 shares of our common stock outstanding and 12,000,000 shares authorized at $ 0.30 par value per share.

As of March 31, 2026 there were 75,000 shares of preferred stock outstanding, designated as Series B Preferred Stock, and we had 500,000 authorized shares at $ 100.00 par value per share of preferred stock (see Note 13 - Redeemable Preferred Stock for more detail).

As of March 31, 2026, the Company had the following warrants issued and outstanding:

Holder Issuance date Number of warrants/ shares issuable Exercise price Expiration date

APSC Holdco II, LP 12/18/2020, 11/9/2021, 12/8/2021 500,000 $ 15.00 12/8/2028

Corre and affiliates

12/8/2021 500,000 $ 15.00 12/8/2028

Stellex Holder:

Tranche A 9/11/2025 982,371 $ 23.00 9/11/2035

Tranche B 9/11/2025 470,889 $ 50.00 9/11/2035

Total warrants 2,453,260

Accumulated Other Comprehensive Income (loss)

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

Three Months Ended

March 31, 2026 Three Months Ended

March 31, 2025

(unaudited) (unaudited)

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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:

On September 11, 2025, the Company issued 75,000 shares of Series B Preferred Stock and 1,453,260 warrants to InspectionTech Holdings LP (the “Stellex Holder”) pursuant to a securities purchase agreement (the “Purchase Agreement”).

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 at the holder’s option beginning December 31, 2030, and under certain other events outside the Company’s control.

The Company continues to have the option to access (the “Series B Delayed Draw”) up to $ 30.0 million in additional proceeds through the issuance of up to 30,000 shares of Series B Preferred Stock and 581,304 related warrants prior to September 11, 2027, subject to the terms and conditions of the Purchase Agreement.

No Series B Delayed Draws were made during the quarter.

During the three-months ended March 31, 2026, the Company accrued a 10.5 % paid-in-kind (PIK) dividend on the outstanding Series B Preferred Stock.

The dividend was non-cash and was settled by increasing the carrying value of the preferred stock.

The accrued PIK dividend totaled $ 2.0 million for the period, equivalent to $ 27 per share of redeemable preferred stock.

The following table presents the change in carrying value of the redeemable preferred stock during the period ended March 31, 2026 (in thousands):

Balance at December 31, 2025 $ 51,951

Additions 49,034

Accrued paid-in-kind dividend 2,036

1 unchanged sentence

Accretion to redemption value 763

Balance at September 30, 2025 $ 49,644

Balance at March 31, 2026 $ 54,832

For further information regarding the terms, classification, fair value allocation, and accretion accounting for the Series B Preferred Stock and warrants, refer to Note 16 - Redeemable Preferred Stock in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

COMMITMENTS AND CONTINGENCIES

Certain conditions may exist as of the date the financial statements are issued which may result in a loss to the Company and which will only be resolved when one or more future events occur or fail to occur.

Team’s management and its legal counsel assess such contingent liabilities, and such assessment inherently involves an exercise of judgment.

In assessing loss contingencies related to legal proceedings that are pending against us or unasserted claims that may result in such proceedings, Team’s legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in our financial statements.

If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed.

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed.

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.

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 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”).

The complaint asserted claims against Team for negligence resulting in the wrongful death of Jesse Henson.

A jury trial commenced on this matter on May 4, 2021.

On June 1, 2021, the jury rendered a verdict against Team for $ 222.0 million in compensatory damages.

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

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 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 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.

The Most litigation is covered by our general liability and excess insurance policies which are occurrence based and subject to an aggregate $ 3.0 million self-insured retention and deductible.

All retentions and deductibles have been met, and accordingly, we believe pending the final settlement, all further claims will be fully funded by our insurance policies.

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 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, 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 September 30, 2025.

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”).

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.

As of March 31, 2026, the Company continues to assess potential loss contingencies, including legal proceedings and government compliance matters, in consultation with legal counsel.

Liabilities are accrued when it is probable that a material loss has been incurred and the amount can be reasonably estimated;

otherwise, the nature and possible range of loss are disclosed if reasonably possible.

During the quarter ended March 31, 2026, the Company remained involved in the Kelli Most litigation, a wrongful death case that was previously subject to a $ 222 million judgment, which was subsequently vacated and dismissed in Texas.

The plaintiff has since refiled the case in federal court in Kansas.

Based on an updated assessment of the case under Kansas jurisdiction, the Company has accrued a $ 10.0 million liability as of March 31, 2026, which is fully offset by a receivable from

the Company’s insurance providers.

All insurance retentions and deductibles have been met, and the Company expects that any further claims will be fully funded by its insurance policies.

In total, the Company has accrued approximately $ 11.0 million for this and other matters as of March 31, 2026.

Management, after consultation with legal counsel, believes that the resolution of these matters, as well as other routine legal proceedings, will not have a material adverse effect on the Company’s condensed consolidated financial statements.

SEGMENT DISCLOSURES

3 unchanged sentences

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.

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 assess performance and allocate capital.

During the current period, service type Emission Control Services, previously included within the MS segment, was moved to the IHT segment.

This change by the Company to the composition of its reportable segments was completed to better align with how the CODM evaluates segment performance.

Prior period segment information was recast to conform to the current period presentation.

The recasting of the prior period segment information did not have any impact on the Company’s previously reported consolidated revenue or consolidated adjusted EBITDA.

The impact of this change was to decrease previously reported revenue and adjusted EBITDA for the MS segment with a similar increase to the IHT segment by approximately $ 7.4 million and $ 2.0 million, respectively, for the three months ended March 31, 2025.

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

Three Months Ended

September 30, 2025

March 31, 2026

(unaudited) (unaudited) (unaudited)

5 unchanged sentences

Adjusted EBITDA

Three Months Ended

September 30, 2024

(unaudited) (unaudited) (unaudited)

Revenues $ 107,604 $ 103,154 $ 210,758

Adjusted operating expenses 1

$ 15,287 $ 2,555 $ 17,842

Adjusted selling, general and administrative expenses 2

15,038 19,864 34,902

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

Nine Months Ended

September 30, 2025

Three Months Ended

March 31, 2025

(unaudited) (unaudited) (unaudited)

5 unchanged sentences

Adjusted EBITDA

Nine Months Ended

September 30, 2024

(unaudited) (unaudited) (unaudited)

Revenues $ 320,286 $ 318,690 $ 638,976

Adjusted operating expenses 1

$ 13,662 $ 1,456 $ 15,118

Adjusted selling, general and administrative expenses 2

_____________

Adjusted EBITDA $ 36,936 $ 33,553 $ 70,489

_____________

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

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

1 Represent operating expenses including direct depreciation and amortization but excluding severance cost.

2 Represent segment selling, general and administrative expenses excluding 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

September 30, Nine Months Ended

September 30,

Segment adjusted EBITDA:

2025 2024 2025 2024

(unaudited) (unaudited)

IHT $ 15,287 $ 13,662

MS 2,555 1,456

Total segment adjusted EBITDA 25,065 22,054 74,659 70,489

Segment adjusted EBITDA

17,842 15,118

Segment depreciation and amortization

3 unchanged sentences

Corporate and shared support cost ( 12,800 ) ( 13,585 )

Consolidated operating income

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

Consolidated operating loss ( 3,371 ) ( 6,003 )

Interest expense ( 8,882 ) ( 11,436 )

Loss on debt extinguishment — ( 11,853 )

( 1,283 ) — ( 13,136 ) —

Other income (expense), net

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

Other income/(expense) 925 ( 204 )

Loss before income taxes $ ( 11,328 ) $ ( 29,496 )

Three Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

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

(unaudited) (unaudited)

Capital expenditures 1 :

IHT $ 1,432 $ 1,458

MS 873 932 2,817 2,577

Corporate and shared support services 214 14

2 unchanged sentences

1 Excludes finance leases.

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

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,

2025 2024 2025 2024

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

(unaudited) (unaudited)

Depreciation and amortization:

4 unchanged sentences

$ 8,453 $ 8,402

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

Three Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

Depreciation and amortization:

Amount included in operating expenses 3,283 3,429 9,497 10,520

Amount included in SG&A expenses 5,464 5,605 16,179 17,414

Total depreciation and amortization $ 8,747 $ 9,034 $ 25,676 $ 27,934

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 and affiliates to provide and/or repay funding as described in Note 10 - Debt.

In connection with the issuance of Series B Preferred Stock on September 11, 2025, the Company entered into a Purchase Agreement with the Stellex Holder, see Note 13 - Redeemable Preferred Stock for further details.

On the same date, the Stellex

Holder acquired $ 10.0 million of the Company’s outstanding loan under the Second A&R Second Lien Term Loan Agreement.

The terms of the loan remain unchanged following the acquisition.

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.

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

The terms of the loan remain unchanged.

SUBSEQUENT EVENTS

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.

As of May 13, 2026, 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, 2026 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