What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-10 compared with 2026-05-13 · 142 added, 77 removed, 222 unchanged (50% of the section changed)

42 unchanged sentences

(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.

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

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

3 unchanged sentences

Our onstream services include our range of standard to custom-engineered leak repair and composite solutions;

emissions control and compliance;

hot tapping and line stopping;

13 unchanged sentences

Results of Operations

Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025

The following is a comparison of our results of operations for the three months ended March 31, 2026 to the three months ended March 31, 2025 (in thousands).

Three Months Ended March 31, Favorable (Unfavorable)

The following is a comparison of our results of operations for the three and six months ended June 30, 2026 to the three and six months ended June 30, 2025.

Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025

The following is a comparison of our results of operations for the three months ended June 30, 2026 to the three months ended June 30, 2025 (in thousands):

Three Months Ended June 30, Favorable (Unfavorable)

2026 2025 $ %

8 unchanged sentences

Corporate and shared support services (13,468) (13,814) 346 2.5 %

Total operating loss $ (3,371) $ (6,003) $ 2,632 43.8 %

Total operating income $ 2,173 $ 12,103 $ (9,930) (82.0) %

Interest expense, net $ (9,280) $ (11,896) $ 2,616 22.0 %

Other income (expense), net 193 (3,490) 3,683 105.5 %

Loss before income taxes $ (6,914) $ (3,283) $ (3,631) (110.6) %

Benefit (provision) for income taxes 102 (983) 1,085 110.4 %

Net loss $ (6,812) $ (4,266) $ (2,546) (59.7) %

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

Total revenues decreased by $19.3 million, or 7.8%, compared to the prior year period, partially offset by a favorable foreign exchange impact of $1.0 million.

IHT segment revenue decreased by $6.9 million, or 5.0%, in comparison to the prior year period.

This decrease was primarily driven by lower turnaround activity in the U.S.

and Canada, which accounted for decreases of $5.0 million and $2.6 million, respectively, partially offset by a $0.7 million increase across other international regions.

MS segment revenue decreased by $12.4 million, or 11.3%, relative to the prior year period, reflecting lower turnaround and project activities across all the operating regions.

Operating income (loss).

Overall operating income totaled $2.2 million in the 2026 period, representing a decline of $9.9 million, or 82.0%, relative to operating income of $12.1 million in the prior year period, driven primarily by a reduction in revenue.

IHT reported a decrease in operating income of $4.6 million, or 25.8%, in comparison to the prior year period, driven by unfavorable project mix impacting margins and higher benefit costs.

MS reported a decrease in operating income of $5.6 million, or 71.0%, in comparison to the prior year period, driven by lower activity levels across all the segment’s operating regions.

The decrease in operating income was further driven by unfavorable project mix impacting margins and higher benefit costs.

Corporate operating loss improved by $0.3 million compared to the prior year period, attributable primarily to reduced professional services and legal costs, partially offset by higher personnel costs including severance charges in the current period .

For the three months ended June 30, 2026 and 2025, operating income includes net expenses totaling $1.8 million and $3.5 million, respectively, that we do not believe are indicative of our core operating activities, as detailed in the table below (in thousands):

Three Months Ended June 30,

(unaudited) (unaudited)

Operating income $ 2,173 $ 12,103

Professional fees and other 686 2,301

Legal costs and litigation reserves — 799

Severance charges 1,129 375

Total non-core items

Operating income, excluding non-core items $ 3,988 $ 15,578

Excluding the impact of these identified non-core items in both periods, operating income decreased by $11.6 million from $15.6 million in the three months ended June 30, 2025 to $4.0 million in the three months ended June 30, 2026.

See our non-GAAP reconciliation for additional details of our non-core expenses.

Interest expense, net.

Interest expense decreased by $2.6 million compared to the prior year period.

The decrease was primarily attributable to lower interest expense on the Second Lien Term Loan following a partial paydown in September 2025 using a potion of the proceeds from the issuance of preferred stock, as well as reduced interest rates on the ABL Credit Facility and First Lien Term Loan, also effective September 2025.

Cash interest paid during the quarter ended June 30, 2026 and 2025 was $5.5 million and $3.9 million, respectively.

Other income (expense), net.

The favorable change in other income (expense) was primarily attributable to a foreign currency gain of $3.9 million.

The benefit for income tax was $0.1 million on the pre-tax loss of $6.9 million in the current year quarter, compared to a $1.0 million income tax provision on a pre-tax loss of $3.3 million in the prior year quarter.

The effective tax rate, inclusive of discrete items, was 1.5% for the three months ended June 30, 2026, compared to 29.9% for the three months ended June 30, 2025.

The effective tax rate differs from the prior year period due to changes in the valuation allowance.

Results of Operations

Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025

The following is a comparison of our results of operations for the six months ended June 30, 2026 to the six months ended June 30, 2025 (in thousands).

Six Months Ended June 30, Favorable (Unfavorable)

2026 2025 $ %

(unaudited) (unaudited)

Revenues by business segment 1 :

IHT $ 254,674 $ 251,843 $ 2,831 1.1 %

MS 189,060 194,838 (5,778) (3.0) %

Total revenues $ 443,734 $ 446,681 $ (2,947) (0.7) %

Operating income (loss) 1 :

IHT $ 24,251 $ 28,696 $ (4,445) (15.5) %

MS 819 4,803 (3,984) (82.9) %

Corporate and shared support services (26,268) (27,399) 1,131 4.1 %

Total operating income (loss) $ (1,198) $ 6,100 $ (7,298) (119.6) %

Interest expense, net $ (18,162) $ (23,332) $ 5,170 22.2 %

Loss on debt extinguishment — (11,853) 11,853 NM

2 unchanged sentences

Loss before income taxes $ (18,242) $ (32,779) $ 14,537 44.3 %

Provision for income taxes (5) (222) 217 97.7 %

Benefit (provision) for income taxes 97 (1,205) 1,302 108.0 %

Net loss $ (18,145) $ (33,984) $ 15,839 46.6 %

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

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

NM - not meaningful

Total revenues increased by $16.4 million, or 8.3%, from the prior year period and were favorably impacted by $3.2 million attributable to foreign exchange rates movements.

R evenue for the IHT segment increased by $9.8 million, or 8.6%, compared to the prior year period, primarily driven by an increase in U.S.

revenue of $6.5 million attributable to higher turnaround and capital projects activity, as well as increase in year-over-year callout and turnaround activities in Canada and other international regions of $3.3 million.

MS segment revenue increased by $6.6 million, or 7.8%, compared to the prior year period, mainly due to higher turnaround activities and callout projects in the U.S., and higher revenue from projects in Canada and international areas.

Total revenues decreased by $2.9 million, or 0.7%, compared to the prior year period, and were favorably impacted by $4.2 million a ttributable to foreign exchange rate movements.

IHT segment revenue increased by $2.8 million, or 1.1%, in comparison to the prior year period, driven primarily by a $1.4 million increase in U.S.

revenue attributable to higher turnaround and capital projects activities experienced in the first quarter, as well as a $1.8 million increase resulting from year-over-year growth in callout and turnaround activities across other international regions, partially offset by a $0.4 million decrease in Canada.

MS segment revenue decreased by $5.8 million, or 3.0%, relative to the prior year period, attributable primarily to lower turnaround and project activities throughout the segment’s operating regions.

Operating income (loss).

Overall operating loss was $3.4 million in the 2026 period, a $2.6 million, or 43.8%, improvement compared to an operating loss of $6.0 million in the prior year period.

This improvement was primarily driven by the increased revenue and cost management.

IHT reported an increase in operating income of $0.2 million, or 1.7%, as compared to prior year due to job mix.

MS operating loss decreased by $1.7 million, or 52.7%, as compared to the prior year period, primarily driven by the increased revenue in the U.S.

and a reduction in operating losses in the U.S.

Corporate operating loss decreased by $0.8 million compared to the prior year period, primarily due to lower legal and professional services costs, partially offset by higher personnel costs in the current period .

For the three months ended March 31, 2026 and 2025, operating loss includes net expenses totaling $1.7 million and $3.0 million, respectively, that we do not believe are indicative of our core operating activities, as detailed in the table below (in thousands):

Three Months Ended March 31,

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

Overall operating loss totaled $1.2 million in the 2026 period, representing a decline of $7.3 million, or 119.6%, compared to operating income of $6.1 million in the prior year period, driven primarily by a reduction in revenue.

IHT segment reported a decrease in operating income of $4.4 million, or 15.5%, in comparison to the prior year period, driven by unfavorable project mix impacting margins and higher benefit costs.

MS segment operating income decreased by $4.0 million, or 82.9%, compared to the prior year period, driven primarily by reduced revenue across the segment’s operating regions, as well as unfavorable project mix impacting margins and higher benefit costs.

Corporate operating loss improved by $1.1 million compared to the prior year period, attributable primarily to reduced legal and professional services costs, partially offset by higher personnel costs, including severance charges, and non-cash share-based compensation costs in the current period .

For the six months ended June 30, 2026 and 2025, operating income (loss) includes net expenses totaling $3.5 million and $6.4 million, respectively, that we do not believe are indicative of our core operating activities, as detailed in the table below (in thousands):

Six Months Ended June 30,

(unaudited) (unaudited)

Operating income (loss) $ (1,198) $ 6,100

Professional fees and other 2,292 4,308

Legal costs (refunds) and litigation reserves (1,560) 1,289

Severance charges, net 1,629 467

Severance charges 2,758 842

Total non-core expenses 3,490 6,439

Operating loss, excluding non-core expenses $ (1,696) $ (3,039)

Excluding the impact of these identified non-core items in both periods, operating loss decreased year over year by $1.3 million, from $3.0 million to $1.7 million.

Operating income, excluding non-core expenses $ 2,292 $ 12,539

Excluding the impact of these identified non-core items in both periods, operating income decreased year over year by $10.2 million, from $12.5 million to $2.3 million.

See our non-GAAP reconciliation for additional details of our non-core expenses.

Interest expense, net.

Interest expense, net decreased by $2.6 million for the three months ended March 31, 2026, compared to the same period in 2025.

The decrease was primarily attributable to the refinancing completed in March 2025, in which we replaced our existing credit facilities with new facilities at lower interest rates.

In addition, we renegotiated the terms of our ABL Revolving Credit Loans, resulting in further reductions in applicable interest rates.

The decrease was also due to lower overall debt balances compared to the prior period.

Cash interest paid for the three months ended March 31, 2026 and 2025 was $2.5 million and $8.9 million, respectively.

Interest expense, net decreased by $5.2 million for the six months ended June 30, 2026, compared to the same period in 2025.

The decrease was primarily attributable to the refinancing completed in March 2025, in which we replaced our existing credit facilities with new facilities at lower interest rates, as well as lower interest expense on the Second Lien Term Loan following a partial paydown in September 2025 using a potion of the proceeds from the issuance of preferred stock and the related reduction in interest rates on the ABL Credit Facility and First Lien Term Loan, also effective September 2025.

Cash interest paid for the six months ended June 30, 2026 and 2025 was $8.0 million and $12.8 million, respectively.

Loss on debt extinguishment.

During the three months ended March 31, 2025, we completed refinancing transactions that resulted in the repayment of our existing loans.

In March 2025, we completed refinancing transactions that resulted in the repayment of our existing loans.

As a result, we recognized a loss on debt extinguishment of $11.9 million which included the write-off of unamortized debt issuance costs.

Other income (expense), net .

The overall change of $1.1 million in other income (expense), net, was primarily driven by foreign currency transaction losses in the current year period reflecting the effects of positive fluctuations in the value of the U.S.

dollar relative to the foreign currencies to which we have exposure.

The provision for income tax was $0.0 million on the pre-tax loss of $11.3 million in the current year period compared to income tax expense o f $0.2 million o n the pre-tax loss of $29.5 million in the prior year period.

The effective tax rate 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 overall change of $4.8 million in other income (expense), net, was primarily attributable to foreign currency transaction gains of $5.0 million, reflecting the favorable impact of U.S.

dollar strengthening against the currencies of our international operations.

The benefit for income tax was $0.1 million on the pre-tax loss of $18.2 million in the current year period compared to income tax provision o f $1.2 million o n the pre-tax loss of $32.8 million in the prior year period.

The effective tax rate was 0.5% for the six months ended June 30, 2026, compared to 3.7% for the six months ended June 30, 2025.

The effective tax rate differs from the prior year period due to changes in the valuation allowance.

28 unchanged sentences

(unaudited, in thousands except per share data)

Three Months Ended March 31,

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

2026 2025 2026 2025

Adjusted Net Loss:

1 unchanged sentence

Professional fees and other 1

Write-off of software cost

686 2,301 2,292 4,308

Write-off of assets 167 — 167 45

Legal costs and litigation reserves (refunds)

Severance charges, net 2

— 799 (1,560) 1,289

Severance charges 2

1,129 375 2,758 842

Loss on debt extinguishment — — — 11,853

9 unchanged sentences

Net loss $ (6,812) $ (4,266) $ (18,145) $ (33,984)

Provision for income taxes 5 222

(Benefit) provision for income taxes (102) 983 (97) 1,205

Loss (gain) on equipment sale

1 unchanged sentence

Professional fees and other 1

Write-off of software cost

686 2,301 2,292 4,308

Write-off of assets 167 — 167 45

Legal costs and litigation reserves (refunds)

Severance charges, net 2

— 799 (1,560) 1,289

Severance charges 2

1,129 375 2,758 842

Foreign currency loss (gain)

(373) 3,544 (1,290) 3,749

Pension cost (credit) 3

4 (54) 9 (105)

Loss on debt extinguishment — — — 11,853

1 unchanged sentence

Depreciation and amortization 8,466 8,527 16,919 16,929

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

Non-cash share-based compensation cost 312 366 1,266 313

Consolidated Adjusted EBITDA $ 12,766 $ 24,471 $ 20,477 $ 29,781

Free Cash Flow:

Cash used in operating activities

$ (9,095) $ (28,661)

Cash provided by (used in) operating activities $ 680 $ (3,344) $ (8,415) $ (32,005)

Capital expenditures (3,982) (2,910) (6,406) (4,316)

1 unchanged sentence

____________________________________

1 For the three months ended March 31, 2026, consists of $1.6 million related to support costs.

For the three months ended March 31, 2025, consists of $2.0 million related to refinancing transactions.

2 For the three months ended March 31, 2026, includes $1.4 million related to customary severance costs associated with executive departures.

1 For the three and six months ended June 30, 2026, professional fees and other included $0.7 million and $2.3 million, respectively, related to executive search and third party support costs.

For the three and six months ended June 30, 2025, professional fees and other included $2.3 million and $3.0 million, respectively, related to executive search and third party support costs, and f or the six months ended June 30, 2025, professional fees and other included $1.3 million related to debt financing .

2 For the three and six months ended June 30, 2026, severance charges included $0.6 million and $2.1 million related to customary severance costs associated with executive departures.

3 Represents pension cost (credit) for the U.K.

4 unchanged sentences

(unaudited, in thousands)

Three Months Ended March 31,

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

2026 2025 2026 2025

Segment Adjusted EBIT and Adjusted EBITDA:

1 unchanged sentence

Professional fees and other 1

Severance charges, net — 115

— 750 1,054 750

Severance charges 390 62 390 177

Adjusted EBIT 13,724 18,777 25,695 29,623

1 unchanged sentence

Adjusted EBITDA $ 17,120 $ 21,675 $ 32,407 $ 35,337

Operating loss $ (1,488) $ (3,149)

Operating income $ 2,307 $ 7,952 $ 819 $ 4,803

Professional fees and other 1

Severance charges, net 177 334

Legal costs and litigation reserves — 251 — 251

Severance charges 100 313 277 647

Adjusted EBIT 2,407 8,516 1,165 5,701

3 unchanged sentences

Net loss $ (22,453) $ (30,183) $ (43,215) $ (67,483)

Provision for income taxes 5 222

(Benefit) provision for income taxes (102) 983 (97) 1,205

Loss (gain) on equipment sale 9 — (4) 5

2 unchanged sentences

Professional fees and other 1

Write-off of software cost — 45

686 1,551 1,169 3,558

Write-off of assets 167 — 167 45

Legal costs and litigation reserves (refunds)

Severance charges, net 2

— 548 (1,560) 1,038

Severance charges 2

639 — 2,091 18

Pension cost (credit) 3

4 (54) 9 (105)

Loss on debt extinguishment — — — 11,853

1 unchanged sentence

Depreciation and amortization 1,357 1,344 2,697 2,659

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

Non-cash share-based compensation cost 312 366 1,266 313

Adjusted EBITDA $ (10,474) $ (10,005) $ (20,605) $ (19,813)

1 unchanged sentence

___________________

1 For the three months ended March 31, 2026, consists of $1.6 million related to support costs.

For the three months ended March 31, 2025, consists of $2.0 million related to refinancing transactions.

2 For the three months ended March 31, 2026, includes $1.4 million related to customary severance costs associated with executive departures.

1 For the three and six months ended June 30, 2026, professional fees and other included $0.7 million and $2.3 million, respectively, related to executive search and third party support costs.

2 For the three and six months ended June 30, 2026, severance charges included $0.6 million and $2.1 million related to customary severance costs associated with executive departures.

3 Represents pension cost (credit) for the U.K.

1 unchanged sentence

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

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

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

Liquidity and Capital Resources

8 unchanged sentences

See Item 1A “Risk Factors” in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K and risk factors included within Cautionary Note Regarding Forward-Looking Statements above, for additional information.

As of March 31, 2026, we had approximately $40.5 million of available borrowing capacity under our various credit facilities, consisting of $30.5 million available under the 2022 ABL Credit Agreement and $10.0 million available under the Second A&R Second Lien term Loan Agreement (the availability period for the Second Lien Delayed Draw Term Loan expired on April 15, 2026 with no amounts drawn prior to the expiration date).

As of June 30, 2026, we had approximately $28.9 million of available borrowing capacity under the 2022 ABL Credit Agreement.

In connection with the issuance of the Series B Preferred Stock and related warrants, we have access to up to $30.0 million in additional liquidity through September 2027 through a delayed draw mechanism, subject to certain conditions under the Purchase Agreement.

Our principal uses of cash and liquidity are for working capital needs, capital expenditures and operations.

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

As of June 30, 2026, we were in compliance with our debt covenants.

Our ability to maintain compliance with the financial covenants contained in our credit agreements is dependent upon our future operating performance and future financial condition, both of which are subject to various risks and uncertainties, as described elsewhere herein.

As of May 11, 2026, we had consolidated cash and cash equivalents of $11.2 million, excluding $4.2 million of restricted cash used mainly as collateral for letters of credit and commercial card programs, and approximately $24.8 million of undrawn availability under our various credit facilities, resulting in total liquidity of $36.0 million.

As of August 6, 2026, we had consolidated cash and cash equivalents of $6.4 million, excluding $4.0 million of restricted cash used mainly as collateral for letters of credit and commercial card programs, and approximately $48.0 million of undrawn availability under our various credit facilities, resulting in total liquidity of $54.4 million.

We also have $30.0 million of Series B Delayed Draw availability as described above.

1 unchanged sentence

The following table summarizes cash flows from Operating, Investing and Financing activities (in thousands):

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows provided by (used in):

1 unchanged sentence

(Unfavorable)

(unaudited) (unaudited)

Operating activities $ (8,415) $ (32,005) $ 23,590

4 unchanged sentences

Cash and cash equivalents.

Our cash and cash equivalents as of March 31, 2026 totaled $12.8 million, consisting of $8.7 million of unrestricted cash on hand, and $4.1 million of restricted cash.

International cash balances as of March 31, 2026 were $6.5 million, and approximately $1.2 million of such cash is located in countries where currency or regulatory restrictions exist.

As of December 31, 2025, our cash and cash equivalents were $18.1 million, consisting of $14.1 million of unrestricted cash on hand and $4.0 million of restricted cash.

International cash balances as of December 31, 2025 were $4.4 million, and approximately $1.2 million of such cash is restricted.

Our total debt and finance obligations were $306.5 million, of which $3.9 million was classified as current at March 31, 2026, compared to total debt of $297.2 million at December 31, 2025.

Our cash and cash equivalents as of June 30, 2026 totaled $26.0 million, consisting of $22.3 million of unrestricted cash, and $3.7 million of restricted cash.

International cash balances as of June 30, 2026 were $4.6 million, and approximately $0.7 million of such cash is restricted.

As of December 31, 2025, our cash and cash equivalents were $18.1 million, consisting of $14.1 million of unrestricted cash and $4.0 million of restricted cash.

International cash balances as of December 31, 2025 were $4.4 million, and approximately $1.2 million of such cash was restricted.

Our total debt and finance obligations were $326.3 million, of which $4.1 million was classified as current at June 30, 2026, compared to total debt of $297.2 million at December 31, 2025.

Cash flows attributable to our operating activities.

2 unchanged sentences

Cash flows from operating activities are primarily generated from net income or loss adjusted for certain non-cash items which include depreciation and amortization, PIK interest, and amortization of debt issuance costs.

For the three months ended March 31, 2026, net cash used in operating activities was $9.1 million, an improvement of $19.6 million as compared to net cash used in operating activities of $28.7 million in the 2025 period.

Changes in working capital items - such as the growth of receivables and payment of operating payables - are significant factors affecting operating cash flows and can represent significant uses of cash, particularly during periods of increasing revenue and activity levels.

During the three months ended March 31, 2026, changes in working capital items used $8.6 million in cash flows, a $15.1 million decrease compared to the $23.7 million in cash flows used by working capital in the corresponding 2025 period.

For the six months ended June 30, 2026, net cash used in operating activities totaled $8.4 million, reflecting an improvement of $23.6 million relative to $32.0 million in the 2025 period.

During the six months ended June 30, 2026, changes in working capital items utilized $12.7 million, representing a favorable variance of $27.3 million in comparison to the $40.0 million utilized by working capital in the corresponding 2025 period.

This favorable variance is attributable to reduction in accounts receivable resulting from fluctuations in activity levels, as well as reduction in other accrued liabilities arising primarily from timing of payroll payments during the period.

Cash flows attributable to our investing activities.

For the three months ended March 31, 2026, net cash used in investing activities consisted primarily of capital expenditures of $2.4 million as compared to $1.4 million for the three months ended March 31, 2025.

For the six months ended June 30, 2026, net cash used in investing activities consisted primarily of capital expenditures of $6.4 million as compared to $4.3 million for the six months ended June 30, 2025.

Cash flows attributable to our financing activities.

For the three months ended March 31, 2026, net cash provided by financing activities was $6.2 million, consisting primarily of the net borrowings under the Revolving Credit Loans of $7.2 million, partially offset by the principal payments under the First Lien Term Loan and equipment financing loans.

For the three months ended March 31, 2025, net cash used in financing activities was $11.2 million, consisting primarily of borrowings under the First Lien Term Loan of $175.0 million, net borrowings under the Revolving Credit Loans of $8.0 million, and borrowings under the 2025 Second Lien Term Loan.

These inflows were partially offset by the payments of the total outstanding balances under the Corre Delayed Draw Term Loan, Corre Incremental Term Loan and ME/RE Loans, and a partial pay down of the Corre Uptiered Loan.

In addition, we paid $8.1 million of debt issuance costs for the refinancing transactions at March 12, 2025.

For the six months ended June 30, 2026, net cash provided by financing activities was $22.7 million, consisting primarily of the net borrowings under the Revolving Credit Loans of $24.7 million, partially offset by the principal payments under the First Lien Term Loan and equipment financing loans.

For the six months ended June 30, 2025, net cash used in financing activities was $21.2 million, consisting primarily of borrowings under the First Lien Term Loan of $175.0 million and the net borrowings under the Revolving Credit Loans of $20.0 million.

In addition, we paid $8.9 million of debt issuance costs for the debt refinancing transactions executed with our existing and new lenders at March 12, 2025.

Effect of exchange rate changes on cash and cash equivalents.

For the three months ended March 31, 2026 and 2025, the effect of foreign exchange rate changes on cash was $0.0 million and $0.1 million, respectively.

For the six months ended June 30, 2026 and 2025, the effect of foreign exchange rate changes on cash was $0.1 million and $0.3 million, respectively.

The impact of exchange rates on cash and cash equivalents is primarily attributable to fluctuations in U.S.

5 unchanged sentences

A discussion of our critical accounting policies and estimates is included in our Annual Report on Form 10-K.

There were no material changes to our critical accounting policies during the three months ended March 31, 2026.

There were no material changes to our critical accounting policies during the six months ended June 30, 2026.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

1 unchanged sentence

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 2. Management’s Discussion and Analysis