What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-11-06 compared with 2025-08-07 · 142 added, 118 removed, 288 unchanged (47% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations describes the principal factors affecting the results of operations, financial condition, and changes in financial condition for the three and six months ended June 30, 2025.

This discussion should be read in conjunction with the accompanying Condensed Consolidated Financial Statements, and the notes thereto set forth in Part I, Item 1 of this Quarterly Report on Form 10-Q and our December 31, 2024 Audited Consolidated Financial Statements and notes thereto included in our Annual Report on Form 10-K filed with the U.S.

20 unchanged sentences

The Company contributed its ownership interest in Rwanda Trading Company (“RTC”) and $100,000 in cash in exchange for a 49.9% ownership interest in the Rwandan JV.

At June 30, 2025, the Company’s investment and maximum exposure to loss is $1.6 million, which is recorded in other long-term assets on the Condensed Consolidated Balance Sheets.

As a result of the transaction, the Company has de-consolidated RTC, de-recognizing $9.3 million of assets, including approximately $2.9 million of cash and cash

equivalents, and $10.3 million of liabilities that were previously reported within our Sustainable Sourcing & Traceability segment.

Upon de-consolidation, the Company recognized a $2.3 million gain during the three months ended June 30, 2025, which is recorded in other, net on the Condensed Consolidated Statements of Operations.

As a result of the transaction, the Company de-consolidated RTC, de-recognizing $9.3 million of assets, including approximately $2.9 million of cash and cash equivalents, and $10.3 million of liabilities that were previously reported

within our Sustainable Sourcing & Traceability segment.

Upon de-consolidation, the Company recognized a $2.3 million gain, which is recorded in other, net on the Condensed Consolidated Statements of Operations.

Falcon Credit Agreement Amendment

On July 23, 2025, Falcon Coffees Limited (“Falcon”) amended its working capital trade finance facility with multiple institutions.

The facility size was increased from $8 5.0 million to $ 102.5 million and remains uncommitted and repayable on demand, with certain of Falcon’s assets pledged as collateral against the facility.

Convertible Notes Offering and Credit Agreement Amendment

On November 4, 2025, the Company sold and issued in a private placement $30.0 million in aggregate principal amount of 5.00% convertible senior notes due 2031 (the “2031 Convertible Notes”).

The 2031 Convertible Notes will be unsecured and senior obligations of the Company and will accrue interest at a rate of 5.00% per annum.

The purchasers of the 2031 Convertible Notes include, among others, HF Direct Investments Pool, LLC (a holder of more than 10% of the outstanding Common Stock), Jeffrey H.

Fox Revocable Trust (an affiliate of Jeffrey H.

Fox, a member of the board of directors of the Company), and an affiliate of The Stephens Group, LLC (a holder of more than 5% of the outstanding Common Stock).

On November 4, 2025, the Company entered into Amendment No.

5 (the “Fifth Amendment”) to the Credit Agreement (as defined below).

The Fifth Amendment modified the existing Covenant Relief Period (as defined below), which commenced on June 30, 2023, and will end on the earlier to occur of (i) October 1, 2026 and (ii) any date following June 30, 2024, on which the Borrower (as defined below) elects to terminate the Covenant Relief Period subject to satisfaction of certain conditions.

For additional information on the 2031 Convertible Notes and Fifth Amendment, see Note 21, “Subsequent Events” to the Condensed Consolidated Financial Statements included in Item I of Part 1 of this Quarterly Report on Form 10-Q and the section below titled “Liquidity and Capital Resources.”

Results of Operations

Comparison of the Three Months Ended June 30, 2025 and 2024

Comparison of the Three Months Ended September 30, 2025 and 2024

The following table sets forth our results of operations expressed as dollars and as a percentage of total revenues for the periods indicated:

(Dollars in Thousands)

June 30, 2025

June 30, 2024

September 30, 2025

September 30, 2024

Costs of sales

2 unchanged sentences

Impairment charges

Loss on disposal of property, plant and equipment

Loss (gain) on disposal of property, plant and equipment

Total operating expenses

8 unchanged sentences

Net loss attributable to common shareholders

Three Months Ended June 30,

Three Months Ended September 30,

Beverage Solutions

2 unchanged sentences

(1) Net of intersegment revenues.

Net Sales from our Beverage Solutions segment were $208.8 million for the three months ended June 30, 2025, increasing 27.9% compared to $163.3 million for the three months ended June 30, 2024.

The increase was primarily due to a $38.9 million increase in the sale of coffee and tea products, driven by a 21.1% increase in single serve cup volumes and a 13.7% increase in core roast and ground coffee volumes, and the year over year growth in coffee commodity prices, which are passed through to our customers.

In addition, sales of flavors, extracts & ingredients products increased $6.6 million, driven by the ramp up in operations of our Conway, Arkansas extract and ready-to-drink manufacturing facility (the “Conway Facility”).

Net Sales from our SS&T segment, net of intersegment revenues, were $72.0 million for the three months ended June 30, 2025, increasing 59.6% compared to $45.1 million for the three months ended June 30, 2024.

The increase is driven by an increase in the average sales price per pound, which increased 50.1% for the three months ended June 30, 2025, compared to the three months ended June 30, 2024.

Net Sales from our Beverage Solutions segment were $263.0 million for the three months ended September 30, 2025, increasing 60.4% compared to $164.0 million for the three months ended September 30, 2024.

The increase was primarily due to a $70.9 million increase in the sale of coffee and tea products, driven by an 84.8% increase in single serve cup volumes and a 4.1% increase in core roast and ground coffee volumes, and the year over year growth in coffee commodity prices and the impact of tariffs, which are both passed through to our customers.

In addition, sales of flavors, extracts & ingredients products increased $28.5 million, driven by a 59.6% increase in multi-serve bottle volumes and the ramp up in can production at our Conway, Arkansas extract and ready-to-drink manufacturing facility (the “Conway Facility”).

The Company notes that single serve volumes have increased during 2025 in part due to the onboarding of a new customer.

This customer is currently involved in a pending transaction in which it would be acquired by a competitor of ours within the coffee industry, which has created uncertainty around this customer’s near-term single serve cup commitments.

As a result, there can be no assurances that single serve cup volumes reported during the three months ended September 30, 2025 will be achieved in future quarters, which could negatively impact net sales from our Beverage Solutions segment.

Net Sales from our SS&T segment, net of intersegment revenues, were $91.8 million for the three months ended September 30, 2025, increasing 61.5% compared to $56.9 million for the three months ended September 30, 2024.

The increase is driven by an increase in the average sales price per pound, which increased 43.1% for the three months ended September 30, 2025, compared to the three months ended September 30, 2024.

The increase in the average sales price per pound is directly correlated to the global commodities price.

SS&T sales volume increased 10.3% for the three months ended June 30, 2025 compared to the three months ended June 30, 2024.

SS&T sales volume increased 15.3% for the three months ended September 30, 2025 compared to the three months ended September 30, 2024.

Costs of Sales

Three Months Ended June 30,

Three Months Ended September 30,

Beverage Solutions

1 unchanged sentence

Total costs of sales

In our Beverage Solutions segment, costs of sales increased $47.9 million to $174.5 million for the three months ended June 30, 2025, compared to the three months ended June 30, 2024.

The increase in costs of sales was primarily driven by an increase in sales volumes and an increase in the coffee commodity prices for the three months ended June 30, 2025, compared to the three months ended June 30, 2024.

In our SS&T segment, costs of sales increased $24.6 million to $64.9 million for the three months ended June 30, 2025, compared to the three months ended June 30, 2024.

In our Beverage Solutions segment, costs of sales increased $94.1 million to $225.8 million for the three months ended September 30, 2025, compared to the three months ended September 30, 2024.

The increase in costs of sales was primarily driven by an increase in sales volumes and the year over year growth in coffee commodity prices and tariffs for the three months ended September 30, 2025, compared to the three months ended September 30, 2024.

In our SS&T segment, costs of sales increased $35.6 million to $87.6 million for the three months ended September 30, 2025, compared to the three months ended September 30, 2024.

This increase is primarily due to an increase in green coffee costs driven by an increase in underlying commodities pricings.

Costs of sales in our SS&T segment for the three months ended June 30, 2025 included $1.4 million of net unrealized gains on forward sales and purchase contracts and mark-to-market adjustments on green coffee inventory compared to $1.5 million of net unrealized gains for the three months ended June 30, 2024.

Costs of sales in our SS&T segment for the three months ended September 30, 2025 included $2.5 million of net unrealized losses on forward sales and purchase contracts and mark-to-market adjustments on green coffee inventory compared to $0.5 million of net unrealized losses for the three months ended September 30, 2024.

Selling, General and Administrative Expense

Three Months Ended June 30,

Three Months Ended September 30,

(Dollars in Thousands)

2 unchanged sentences

Total selling, general and administrative expense

Total selling, general and administrative expenses in our Beverage Solutions segment increased $2.9 million to $51.7 million for the three months ended June 30, 2025, compared to the three months ended June 30, 2024.

The increase is primarily due to an increase in operating costs associated with the Conway Facility.

In our SS&T segment, selling, general and administrative costs were relatively unchanged compared to the three months ended June 30, 2024.

Total selling, general and administrative expenses in our Beverage Solutions segment increased $1.0 million to $44.1 million for the three months ended September 30, 2025, compared to the three months ended September 30, 2024.

The increase is primarily due to a $5.4 million increase in employee related costs, which include short-term cash incentive compensation, partially offset by a $2.6 million decrease in start-up costs related to our Conway Facility, and a $1.0 million decrease in service expenses.

In our SS&T segment, selling, general and administrative costs were relatively unchanged compared to the three months ended September 30, 2024.

Transaction, Restructuring and Integration Expense

Transaction, restructuring and integration expenses for the three months ended June 30, 2025 were $2.5 million, approximately $1.9 million of which related to severance costs and $0.4 million of which related to fees related to the establishment of our accounts receivable factoring agreement.

During the three months ended June 30, 2024, we incurred $4.4 million of transaction, restructuring and integration expenses, approximately $4.1 million of which related to severance and other employee termination and benefit costs associated with the elimination of various positions as part of cost reduction objectives.

Transaction, restructuring and integration expenses for the three months ended September 30, 2025 were $3.0 million, approximately $2.3 million of which related to severance.

During the three months ended September 30, 2024, we incurred $2.5 million of transaction, restructuring and integration expenses, approximately $1.4 million of which related to professional and legal costs associated with the Westrock warrant exchange.

Interest Expense

Three Months Ended June 30,

Three Months Ended September 30,

Interest expense

11 unchanged sentences

Total interest expense

Interest expense for the three months ended June 30, 2025 was $13.1 million compared to $7.5 million for the three months ended June 30, 2024.

Interest expense for the three months ended September 30, 2025 was $14.0 million compared to $6.9 million for the three months ended September 30, 2024.

Interest expense associated with our term loan and delayed draw term loan decreased $0.6 million due to decreased outstanding balances, while interest on our revolving credit facility increased $1.7 million, primarily due to higher outstanding borrowings.

During the three months ended June 30, 2025, the Company capitalized approximately $0.4 million of interest costs associated with the build-out of our Conway Facility, compared to $4.3 million of such interest costs for the three months ended June 30, 2024.

During the three months ended September 30, 2025, the Company capitalized approximately $0.2 million of interest costs associated with the build-out of our Conway Facility, compared to $4.0 million of such interest costs for the three months ended September 30, 2024.

Income Tax Expense (Benefit)

Income tax benefit for the three months ended June 30, 2025 was $0.4 million, resulting in an effective tax rate of 1.7%.

Income tax benefit for the three months ended September 30, 2025 was $0.1 million, resulting in an effective tax rate of 0.6%.

The effective tax rate for the current period differs from the federal statutory rate primarily due to an increase in the valuation allowance against domestic deferred tax assets.

Income tax benefit for the three months ended June 30, 2024 was $4.6 million, resulting in an effective tax rate of 20.7%.

Comparison of the Six Months Ended June 30, 2025 and 2024

Income tax expense for the three months ended September 30, 2024 was $0.1 million, resulting in an effective tax rate of (0.6)%.

Comparison of the Nine Months Ended September 30, 2025 and 2024

The following table sets forth our results of operations expressed as dollars and as a percentage of total revenues for the periods indicated:

Six Months Ended

Nine Months Ended

(Dollars in Thousands)

June 30, 2025

June 30, 2024

September 30, 2025

September 30, 2024

Costs of sales

13 unchanged sentences

Net loss attributable to common shareholders

Six Months Ended June 30,

Nine Months Ended September 30,

Beverage Solutions

2 unchanged sentences

(1) Net of intersegment revenues.

Net Sales from our Beverage Solutions segment were $372.9 million for the six months ended June 30, 2025, increasing 16.1% compared to $321.3 million for the six months ended June 30, 2024.

The increase was primarily due to a $40.8 million increase in the sale of coffee and tea products, driven by a 10.7% increase in roast and ground coffee volumes and the year over year growth in coffee commodity prices, which are passed through to our customers.

In addition, sales

of flavors, extracts & ingredients products increased $11.4 million, driven by the ramp up in operations of the Conway Facility.

Net Sales from our SS&T segment, net of intersegment revenues, were $121.8 million for the six months ended June 30, 2025, increasing 53.0% compared to $79.6 million for the six months ended June 30, 2024.

The increase is primarily driven by an increase in the average sales price per pound, which increased 52.3% for the six months ended June 30, 2025, compared to the six months ended June 30, 2024.

Net Sales from our Beverage Solutions segment were $635.9 million for the nine months ended September 30, 2025, increasing 31.0% compared to $485.3 million for the nine months ended September 30, 2024.

The increase was primarily due to a $111.7 million increase in the sale of coffee and tea products, driven by a 17.5% increase in single serve cup volumes, an 8.4% increase in core roast and ground coffee volumes and the year over year growth in coffee commodity prices and tariffs, both of which are passed through to our customers.

In addition, sales of flavors, extracts

& ingredients products increased $39.9 million, driven by the ramp up in operations of the Conway Facility.

The Company notes that single serve volumes have increased during 2025 in part due to the onboarding of a new customer.

As a result, there can be no assurances that single serve cup volumes reported during the nine months ended September 30, 2025 will be achieved in future quarters, which could negatively impact net sales from our Beverage Solutions segment.

Net Sales from our SS&T segment, net of intersegment revenues, were $213.6 million for the nine months ended September 30, 2025, increasing 56.5% compared to $136.4 million for the nine months ended September 30, 2024.

The increase is primarily driven by an increase in the average sales price per pound, which increased 44.4% for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.

The increase in the average sales price per pound is directly correlated to the global commodities price.

Costs of Sales

Six Months Ended June 30,

Nine Months Ended September 30,

Beverage Solutions

1 unchanged sentence

Total costs of sales

In our Beverage Solutions segment, costs of sales increased to $315.9 million for the six months ended June 30, 2025, from $251.7 million for the six months ended June 30, 2024.

The increase in costs of sales was primarily driven by an increase in the sales volumes, and the year over year growth in coffee commodity prices for the six months ended June 30, 2025 compared to the six months ended June 30, 2024.

In our SS&T segment, costs of sales increased $37.8 million to $108.3 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024.

In our Beverage Solutions segment, costs of sales increased to $541.7 million for the nine months ended September 30, 2025, from $383.5 million for the nine months ended September 30, 2024.

The increase in costs of sales was primarily driven by an increase in the sales volumes, and the year over year growth in coffee commodity prices and tariffs for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

In our SS&T segment, costs of sales increased $73.4 million to $195.9 million for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

This increase is primarily due to an increase in coffee commodity prices.

Costs of sales in our SS&T segment for the six months ended June 30, 2025 included $3.5 million of net unrealized gains on forward sales and purchase contracts and mark-to-market adjustments on green coffee inventory compared to $3.2 million of net unrealized gains for the six months ended June 30, 2024.

Costs of sales in our SS&T segment for the nine months ended September 30, 2025 included $1.0 million of net unrealized gains on forward sales and purchase contracts and mark-to-market adjustments on green coffee inventory compared to $2.7 million of net unrealized gains for the nine months ended September 30, 2024.

Selling, General and Administrative Expense

Six Months Ended June 30,

Nine Months Ended September 30,

(Dollars in Thousands)

2 unchanged sentences

Total selling, general and administrative expense

Total selling, general and administrative expenses in our Beverage Solutions segment and our SS&T segment were relatively unchanged compared to the six months ended June 30, 2024.

Total selling, general and administrative expenses in our Beverage Solutions segment and our SS&T segment were relatively unchanged compared to the nine months ended September 30, 2024.

Transaction, Restructuring and Integration Expense

Transaction, restructuring and integration expenses for the six months ended June 30, 2025 were $4.3 million, approximately $2.4 million of which related to severance and other employee termination and benefit costs associated with the elimination of various positions as part of cost reduction objectives, $0.8 million of plant closure costs and $0.4 million of which related to fees related to the establishment of our accounts receivable factoring agreement.

During the six months ended June 30, 2024, we incurred $7.4 million of transaction, restructuring and integration expenses, approximately $4.1 million of which related to severance and other employee termination and benefit costs associated with the elimination of various positions as part of cost reduction objectives and $2.2 million of which related to the establishment of our at-the-market common stock offering program.

Transaction, restructuring and integration expenses for the nine months ended September 30, 2025 were $7.3 million, approximately $5.0 million of which related to severance and other employee termination and benefit costs associated with the elimination of various positions as part of cost reduction objectives, $0.8 million of plant closure costs and $0.3 million of which related to fees related to the establishment of our accounts receivable factoring agreement.

During the nine months ended September 30, 2024, we incurred $9.9 million of transaction, restructuring and integration expenses, approximately $3.5 million of which related to severance and other employee termination and benefit costs associated with the elimination of various positions as part of cost reduction objectives, $2.4 million of which related to the establishment of our at-the-market common stock offering program and $1.4 million of which related to professional and legal costs associated with the Westrock warrant exchange.

Interest Expense

Six Months Ended June 30,

Nine Months Ended September 30,

Interest expense

11 unchanged sentences

Total interest expense

Interest expense for the six months ended June 30, 2025 was $25.7 million compared to $15.0 million for the six months ended June 30, 2024.

Interest expense associated with our term loan and delayed draw term loan facilities decreased due to a decrease in outstanding balances, while interest on our revolving credit facility increased $5.3 million, primarily due to higher outstanding borrowings.

During the six months ended June 30, 2025, the Company capitalized approximately $0.6 million of interest costs associated with the build-out of our Conway Facility, compared to $7.2 million of such interest costs for the six months ended June 30, 2024.

Interest expense for the nine months ended September 30, 2025 was $39.7 million compared to $21.9 million for the nine months ended September 30, 2024.

Interest expense associated with our term loan and delayed draw term loan facilities decreased $2.3 million due to a decrease in outstanding balances, while interest on our revolving credit facility increased $7.0 million, primarily due to higher outstanding borrowings.

During the nine months ended September 30, 2025, the Company capitalized approximately $0.8 million of interest costs associated with the build-out of our Conway Facility, compared to $11.1 million of such interest costs for the nine months ended September 30, 2024.

Income Tax Expense (Benefit)

Income tax expense for the six months ended June 30, 2025 was $1.5 million, resulting in an effective tax rate of (3.1)%.

Income tax expense for the nine months ended September 30, 2025 was $1.3 million, resulting in an effective tax rate of (2.0)%.

The effective tax rate for the current period differs from the federal statutory rate primarily due to an increase in the valuation allowance against domestic deferred tax assets.

Income tax expense for the six months ended June 30, 2024 was $1.2 million, resulting in an effective tax rate of (2.9)%.

Income tax expense for the nine months ended September 30, 2024 was $1.3 million, resulting in an effective tax rate of (2.3)%.

Critical Accounting Estimates

4 unchanged sentences

For further information on our critical accounting estimates, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the notes to our audited financial statements included in our Annual Report on Form 10-K filed with the SEC on March 12, 2025.

As of June 30, 2025, there have been no material changes to these estimates.

As of September 30, 2025, there have been no material changes to these estimates.

Key Business Metrics

9 unchanged sentences

Further, our computations of EBITDA and Consolidated Adjusted EBITDA may not be comparable to that reported by other companies that define EBITDA and Consolidated Adjusted EBITDA differently than we do.

The reconciliation of our net (loss) income to EBITDA and Consolidated Adjusted EBITDA for the three and six months ended June 30, 2025 and 2024 is as follows:

Three Months Ended June 30,

Six Months Ended June 30,

The reconciliation of our net (loss) income to EBITDA and Consolidated Adjusted EBITDA for the three and nine months ended September 30, 2025 and 2024 is as follows:

Three Months Ended September 30,

Nine Months Ended September 30,

Interest expense

7 unchanged sentences

Mark-to-market adjustments

(Gain) loss on disposal of property, plant and equipment

Loss (gain) on disposal of property, plant and equipment

Consolidated Adjusted EBITDA

The Company presents Consolidated Adjusted EBITDA as excluding certain Conway extract and ready-to-drink facility start-up costs (“Conway Start-up Costs”).

Prior to the third quarter of 2024, Conway Start-up Costs included two categories:

(i) non-capitalizable costs necessary to place production and packaging capabilities into commercial production (“pre-production costs”), and (ii) recurring operating costs incurred once a capability is placed into commercial production but before completion of the production scale up (“scale up operating costs”).

Beginning in the third quarter of 2024, the Company no longer excludes scale up operating costs in the determination of Consolidated Adjusted EBITDA.

Consolidated Adjusted EBITDA for the three and six months ended June 30, 2024 has been revised to exclude the impact of scale up operating costs, as follows:

Three Months Ended

Six Months Ended

June 30, 2024

Consolidated Adjusted EBITDA, as presented

Conway extract and ready-to-drink facility scale-up operating costs

Consolidated Adjusted EBITDA, as revised

Liquidity and Capital Resources

4 unchanged sentences

Green coffee, which is our primary raw material, is an exchange traded agricultural commodity that is subject to price fluctuations, the reasons for which are outside of the control of the Company.

During the year ended December 31, 2024, the exchange traded “C” market price of green coffee increased approximately 70%, and from January 1, 2025

through the date of this Quarterly Report on Form 10-Q, the “C” market price has continued to fluctuate, at times surpassing $4.00 per pound of green coffee, reaching all-time highs.

During the year ended December 31, 2024, the exchange traded “C” market price of green coffee increased approximately 70%, and from January 1, 2025 through the date of this Quarterly Report on Form 10-Q, the “C” market price has continued to fluctuate, at times surpassing $4.00 per pound of green coffee, reaching all-time highs.

This increase impacts the entire coffee supply chain, as exporters, traders, suppliers, and roasters require increased working capital to fund rising green coffee costs, and without having access to sufficient working capital, supply chain disruptions may emerge.

5 unchanged sentences

The uncertainty could also cause disturbances in ocean shipping capacity that could affect our ability to secure ocean freight containers for our products, and create inflationary effects on our costs, in addition to the direct impact of tariffs.

For example, recent tariffs targeting Brazil and other coffee-producing nations could negatively impact our ability and the ability of competitors to source coffee and could lead to an increase in the cost of commodities and adversely affect our profitability.

For example, recent tariffs targeting Brazil and other coffee-producing nations are currently impacting our ability and the ability of competitors to source coffee and

have led to increases in the cost of commodities, adversely affecting our profitability.

A persistent increase in coffee costs or tariff-impacted equipment or material costs, could adversely affect consumer demand as producers attempt to pass higher costs down the supply chain.

9 unchanged sentences

Borrowings under the Revolving Credit Facility, the Term Loan Facility and the Delayed Draw Term Loan Facility will bear interest, at the Borrower’s option, initially at an annual rate equal to (a) term SOFR plus a credit spread adjustment of 0.10% for loans with an interest period of one month, 0.15% for loans with an interest period of three months and 0.25% for loans with an interest period of six months, as applicable, (the “Adjusted Term SOFR”) or (b) the base rate (determined by reference to the greatest of (i) the rate of interest last quoted by The Wall Street Journal in the United States as the prime rate in effect, (ii) the NYFRB Rate from time to time plus 0.50% and (iii) the Adjusted Term SOFR for a one month interest period plus 1.00%, (the “Base Rate”)), in each case plus an applicable margin.

At June 30, 2025, we had $172.5 million of outstanding borrowings under the Revolving Credit Facility, with a weighted average interest rate of 8.2% and we had $2.6 million of standby letters of credit outstanding.

At June 30, 2025, the

interest rate applicable to our Term Loan Facility was 8.2%, and the interest rate applicable to our Delayed Draw Term Loan Facility was 8.3%.

At September 30, 2025, we had $182.5 million of outstanding borrowings under the Revolving Credit Facility, with a weighted average interest rate of 8.1% and we had $2.0 million of standby letters of credit outstanding.

At September 30, 2025, the interest rate applicable to our Term Loan Facility was 7.9%, and the interest rate applicable to our Delayed Draw Term Loan Facility was 8.2%.

On February 15, 2024, the Borrower entered into Amendment No.

10 unchanged sentences

The Company believes that its secured net leverage under the Credit Agreement is important to the understanding of the Company’s financial condition and liquidity.

At June 30, 2025, the Company’s secured net leverage ratio was 4.75:1.00, compared to a maximum allowable ratio of 6.00:1.00, with such calculation set forth below:

At September 30, 2025, the Company’s secured net leverage ratio was 4.58:1.00, compared to a maximum allowable ratio of 5.50:1.00, with such calculation set forth below:

(Thousands, except leverage ratio)

11 unchanged sentences

Beverage Solutions Credit Agreement secured net leverage ratio

1 – Primarily consists of $8.8 million of pro forma run-rate impact of cost savings initiatives, as permitted by the Credit Agreement.

(1) – Consists primarily of pro forma run-rate impact of cost savings initiatives, as permitted by the Credit Agreement.

A reconciliation of trailing twelve-months Beverage Solutions Adjusted EBITDA is as follows:

Year ended December 31, 2024

Six months ended June 30, 2025

Six months ended June 30, 2024

Nine months ended September 30, 2025

Nine months ended September 30, 2024

Trailing Twelve-Months Beverage Solutions Adjusted EBITDA

The Term Loan Facility and Delayed Draw Term Loan Facility require quarterly principal payments totaling approximately $2.8 million (1.25% of the original principal balance).

Quarterly payments increase to approximately $4.2 million and $5.6 million (1.875% and 2.5% of the original principal balance) during the final two years of the agreements, respectively.

The Term Loan Facility and Delayed Draw Term Loan Facility require quarterly principal payments totaling approximately $4.2 million (1.875% of the original principal balance), increasing to approximately $5.6 million (2.5% of the original principal balance) during the final year of the agreements.

On January 15, 2025, the Company entered into an Incremental Assumption Agreement and Amendment No.

4 (the “Fourth Amendment”) to the Credit Agreement.

The Fourth Amendment expanded the syndicate to include member banks from the Farm Credit System and increased the amount of revolving facility commitments (the “Existing Revolving Facility Commitments”, and any loans thereunder, the “Existing Revolving Loans”) available to the Borrower under the Credit Agreement by $25.0 million (the “Incremental Revolving Facility Commitments” and any loans thereunder, the “Incremental Revolving Loans”).

under the Credit Agreement by $25.0 million (the “Incremental Revolving Facility Commitments” and any loans thereunder, the “Incremental Revolving Loans”).

The amount of revolving facility commitments available to the Borrower under the Credit Agreement, as amended, is $200.0 million.

The Incremental Revolving Facility Commitments and the Incremental Revolving Loans are subject to the same interest rates, commitment fees, maturity dates and other terms as the Existing Revolving Facility Commitments and the Existing Revolving Loans.

The proceeds from any Incremental Revolving Loans will be used by the Company to fund the previously announced installation of a second ready-to-drink can line at the Conway Facility, and for general corporate purposes.

The Fourth Amendment also modified the secured net leverage ratio that the Company must comply with during the Covenant Relief Period to increase the maximum secured net leverage ratio to (a) 6.00x for the test period ending June 30, 2025, (b) 5.50x for the test period ending September 30, 2025, and (c) 5.25x for the test period ending December 31, 2025.

3 unchanged sentences

The fees were allocated to the Revolving Credit Facility, are reported within other long-term assets on the Condensed Consolidated Balance Sheets and are being amortized ratably over the remaining term of the Revolving Credit Facility.

On November 4, 2025, the Company entered into Amendment No.

5 (the “Fifth Amendment”) to the Credit Agreement.

The Fifth Amendment modified the existing Covenant Relief Period, which commenced on June 30, 2023, and will end on the earlier to occur of (i) October 1, 2026 and (ii) any date following June 30, 2024, on which the Borrower elects to terminate the Covenant Relief Period subject to satisfaction of certain conditions.

During the Covenant Relief Period, the Borrower’s ability to incur additional indebtedness and make investments, restricted payments and junior debt restricted payments is more limited.

The Fifth Amendment will permit the Borrower to issue convertible notes, including the 2031 Convertible Notes (as discussed below).

The Fifth Amendment modified the secured net leverage ratio that the Company must comply with during the Covenant Relief Period to increase the maximum secured net leverage ratio to (a) 5.50x for the test period ending December 31, 2025, (b) 5.25x for the test period ending March 31, 2026, (c) 5.00x for the test period ending June 30, 2026, (d) 4.50x for the test period ending September 30, 2026 and (e) 4.00x for the test period ending December 31, 2026.

In addition, the Fifth Amendment lowered the interest coverage ratio that the Company must comply with to permit the interest coverage ratio as of the last day of any test period to be less than (a) on and prior to December 31, 2025, 1.50x, (b) on January 1, 2026 and on or prior to September 30, 2026, 1.75x and (z) on October 1, 2026 and thereafter, 2.00x.

Convertible Notes

2 unchanged sentences

The Convertible Notes are carried at amortized cost and are recorded in long-term debt, net and convertible notes payable – related party, net on the Condensed Consolidated Balance Sheets.

At June 30, 2025, the carrying value of the Convertible Notes was $71.6 million, of which $49.7 million was from related parties.

At September 30, 2025, the carrying value of the Convertible Notes was $71.7 million, of which $49.8 million was from related parties.

We incurred a total of $0.5 million of financing fees in connection with the Convertible Notes, which were ratably allocated to the convertible notes payable and the convertible notes payable – related party, respectively, and are being amortized into interest expense over the remaining term of the Convertible Notes utilizing the effective interest rate method.

Pursuant to the terms of the Convertible Notes, noteholders may convert their Convertible Notes at their option only in the following circumstances:

(i) during the period commencing on August 15, 2024, and prior to the close of business on the trading day immediately preceding August 15, 2028, if the closing price for at least 20 trading days (whether or not consecutive) during the period of any 30 consecutive trading days in the immediately preceding calendar quarter is equal

to or greater than 130% of the conversion price;

(ii) during the period commencing on August 15, 2028, and prior to the close of business on the second scheduled trading day immediately preceding February 15, 2029, at any time;

and (iii) during the 35 trading days following the effective date of certain fundamental change transactions that occur prior to the close of business on the trading day immediately preceding August 15, 2028.

during the 35 trading days following the effective date of certain fundamental change transactions that occur prior to the close of business on the trading day immediately preceding August 15, 2028.

The Company will settle conversions by paying or delivering, as applicable, at the Company’s election, cash, common stock, par value $0.01 per share (“Common Shares”), or a combination of cash and Common Shares.

2 unchanged sentences

The conversion price and conversion rate are subject to customary adjustments.

On November 4, 2025, the Company sold and issued in a private placement $30.0 million in aggregate principal amount of 5.00% convertible senior notes due 2031 (the “2031 Convertible Notes”).

The 2031 Convertible Notes will be unsecured and senior obligations of the Company and will accrue interest at a rate of 5.00% per annum.

Noteholders may convert their 2031 Convertible Notes at their option only in the following circumstances:

(A) during the period commencing on May 4, 2026, and prior to the close of business on the trading day immediately preceding August 15, 2030, if the closing price for at least 20 trading days (whether or not consecutive) during the period of any 30 consecutive trading days in the immediately preceding calendar quarter is equal to or greater than 130% of the conversion price;

(B) during the period commencing on August 15, 2030, and prior to the close of business on the second scheduled trading day immediately preceding February 15, 2031, at any time;

and (C) during the 35 trading days following the effective date of certain fundamental change transactions that occur prior to the close of business on the trading day immediately preceding August 15, 2030.

The Company will settle conversions by paying or delivering, as applicable, at the Company’s election, cash, Common Shares or a combination of cash and Common Shares.

The initial conversion price of the 2031 Convertible Notes is $5.25, which corresponds to an initial conversion rate of approximately 190.48 Common Shares per $1,000 principal amount of 2031 Convertible Notes.

At this initial conversion price, the 2031 Convertible Notes are convertible into approximately 5.7 million Common Shares.

The conversion price and conversion rate are subject to customary adjustments, provided that the Company may not issue more than 19.99% of the issued and outstanding Common Shares immediately prior to the issuance of the 2031 Convertible Notes in respect of the conversion of the 2031 Convertible Notes.

The 2031 Convertible Notes do not contain any financial or operating covenants or restrictions on the payments of dividends, the incurrence of indebtedness or the issuance or repurchase of securities by the Company or any of its subsidiaries.

The 2031 Convertible Notes contain customary terms regarding events of default.

If any event of default (other than certain events of bankruptcy, insolvency or reorganization involving the Company) occurs and is continuing, then each noteholder may, by written notice to the Company, declare the principal amount of, and all accrued and unpaid interest on, such noteholder’s 2031 Convertible Notes to become due and payable immediately.

If an event of default involving certain events of bankruptcy, insolvency or reorganization occurs, then the principal amount of, and all accrued and unpaid interest on, all of the 2031 Convertible Notes then outstanding will immediately become due and payable without any further action or notice by any person.

International Debt and Lending Facilities

9 unchanged sentences

Borrowings under the facility will bear interest at the borrower’s option at a rate equal to (a) Term SOFR plus a margin of 4.00% plus a liquidity premium set by the lender at the time of borrowing or (b) the Base Rate (determined by reference to the greatest of (i) the Prime Rate, as defined in the facility, at such time, (ii) one-half of 1.00% in excess of the Federal Funds Effective Rate, as defined in the facility, at such time, and (iii) Term SOFR for a one-month tenor in effect at such time plus 1.00%).

At June 30, 2025, there was $75.2 million of outstanding borrowings under the facility, which is recorded in short-term debt in the Condensed Consolidated Balance Sheets.

Falcon’s facility contains certain restrictive financial covenants which require Falcon to maintain certain levels of working capital, debt, and net worth.

Falcon was in compliance with these financial covenants as of June 30, 2025.

On July 23, 2025, Falcon amended its working capital trade finance facility with multiple institutions.

The facility size was increased from $8 5.0 million to $ 102.5 million and remains uncommitted and repayable on demand, with certain of Falcon’s assets pledged as collateral against the facility.

At September 30, 2025, there was $84.1 million of outstanding borrowings under the facility, which is recorded in short-term debt in the Condensed Consolidated Balance Sheets.

Falcon’s facility contains certain restrictive financial covenants which require Falcon to maintain certain levels of working capital, debt, and net worth.

Falcon was in compliance with these financial covenants as of September 30, 2025.

On September 28, 2023, we entered into a $5.0 million unsecured working capital trade finance facility with responsAbility Climate Smart Agriculture & Food Systems Fund through Falcon.

3 unchanged sentences

or (b) the most recent applicable Term SOFR (as of the Quotation Day) for the shortest period (for which Term SOFR is available) which exceeds the applicable interest period of that loan, in each case plus the applicable margin.

At June 30, 2025, there was $4.5 million of outstanding borrowings under the facility, of which $3.5 million and $1.0 million is recorded in long-term debt, net and current maturities of long-term debt, respectively, on the Condensed Consolidated Balance Sheets.

Falcon’s facility

contains certain restrictive financial covenants which require Falcon to maintain certain levels of working capital, debt, and tangible net worth.

Falcon was in compliance with these financial covenants as of June 30, 2025.

At September 30, 2025, there was $4.5 million of outstanding borrowings under the facility, of which $3.5 million and $1.0 million is recorded in long-term debt, net and current maturities of long-term debt, respectively, on the Condensed Consolidated Balance Sheets.

Falcon’s facility contains certain restrictive financial covenants which require Falcon to maintain certain levels of working capital, debt, and tangible net worth.

Falcon was in compliance with these financial covenants as of September 30, 2025.

Supply Chain Finance Program

4 unchanged sentences

Due to the extension of payment terms beyond the original due date of approved invoices, obligations under the Program are recorded outside of accounts payable, within our supply chain finance program, on our Condensed Consolidated Balance Sheets.

As of June 30, 2025, there were $98.3 million obligations outstanding under the Program.

As of September 30, 2025, there were $98.7 million obligations outstanding under the Program.

Receivables Purchase Agreement

2 unchanged sentences

As a part of the Factoring Agreement, we perform certain collection and administrative functions for the receivables sold.

During the six months ended June 30, 2025, the Company received $35.0 million of proceeds under the Factoring Agreement, and approximately $0.4 million of fees were incurred associated with these sales, which are recorded within selling, general and administrative expense on the Condensed Consolidated Statements of Operations.

During the nine months ended September 30, 2025, the Company received gross cash proceeds of $113.4 million related to the sale of receivables under the Factoring Agreement, remitted approximately $78.5 million of customer payments to the Factor, and incurred approximately $1.0 million of fees associated with these sales, which are recorded within selling, general and administrative expense on the Condensed Consolidated Statements of Operations.

At September 30, 2025, the Company held $7.9 million of customer payments that have yet to be remitted to the Factor, which is recorded within restricted cash on the Condensed Consolidated Balance Sheets.

Green Coffee Repurchase Program

1 unchanged sentence

The Commodity Program is uncommitted and may be canceled by the financing provider at any time.

At June 30, 2025 and December 31, 2024, the Company had a right, or obligation, to repurchase $9.9 million and $0, respectively, of green coffee from the financing provider.

At September 30, 2025 and December 31, 2024, the Company had a right, or obligation, to repurchase $11.8 million and $0, respectively, of green coffee from the financing provider.

The liability for Repo Transactions is recorded within accrued expenses and other current liabilities on the Company’s Condensed Consolidated Balance Sheets.

3 unchanged sentences

Under the Registration Statement, we have established an at-the-market common stock offering program (the “ATM Program”) to sell shares of common stock not to exceed 5,000,000 Common Shares in the aggregate.

During the three and six months ended June 30, 2025, the Company had no sales of Common Shares under the ATM Program.

This program is intended to provide additional financial flexibility and an alternative mechanism to access the capital markets at an efficient cost as and when we need financing, including for acquisitions.

During the three and nine months ended September 30, 2025, the Company sold 1,909,676 Common Shares under the ATM Program, generating gross proceeds of $12.1 million.

As of September 30, 2025, there were 3,030,324 of remaining shares authorized to be sold under ATM Program.

Current and Long-Term Liquidity

Our liquidity needs are to fund operating expenses, meet debt service obligations, and fund both current and long-term investment activities, which include capital expenditures.

A key component of our long-term growth strategy is to

complete the commercialization of our Conway Facility, which utilizes state-of-the-art equipment specifically designed to efficiently manufacture and package a wide range of beverages, such as canned or bottled cold brew coffees, lattes, assorted teas, and juice-based products.

We are continuing to build out the remaining portions of the facility and expect that the material capital expenditures will be completed by the end of the third quarter of 2025.

We have completed the majority of the capital expenditures related to the Conway Facility and have approximately $15.0 million to expenditures remaining.

We believe cash from operations, and borrowings available under the Revolving Credit Facility will provide sufficient cash on-hand to fund our operating expenses, debt service, near-term investment activities and near-term growth strategies, which include, (i) extending and enhancing product offerings through innovation, (ii) expanding our customer base and (iii) continuing to drive margin expansion.

3 unchanged sentences

Redemptions of Series A Preferred Shares

After February 26, 2028, any holder of Series A Preferred Shares may require Westrock to redeem all or any whole number of such holder’s Series A Preferred Shares in cash, subject to applicable law and the terms of any credit agreement or similar arrangement pursuant to which a third-party lender provides debt financing to Westrock or its subsidiaries, at a redemption price per share equal to the greater of (a) the liquidation preference and (b) the product of (i) the number of Common Shares that would have been obtained from converting one Series A Preferred Share on the redemption notice date and (ii) the simple average of the daily volume-weighted average price per Common Share for the ten (10) trading days ending on and including the trading day immediately preceding the redemption notice date.

agreement or similar arrangement pursuant to which a third-party lender provides debt financing to Westrock or its subsidiaries, at a redemption price per share equal to the greater of (a) the liquidation preference and (b) the product of (i) the number of Common Shares that would have been obtained from converting one Series A Preferred Share on the redemption notice date and (ii) the simple average of the daily volume-weighted average price per Common Share for the ten (10) trading days ending on and including the trading day immediately preceding the redemption notice date.

Assuming that the liquidation preference of the Series A Preferred Shares remains $11.50 per share and all 23,510,527 Series A Preferred Shares remain outstanding after February 26, 2028, we estimate an aggregate redemption payment of at least approximately $270.4 million.

5 unchanged sentences

Our material contractual and other obligations include the payment of principal and interest under our debt obligations and future purchase of inventory obligations.

Our Term Loan Facility and Delayed Draw Term Loan Facility require quarterly principal payments of 1.25% of the original principal balance.

Quarterly payments increase to 1.875% and 2.5% of the original principal balance during the final two years of the Credit Facility, respectively.

We have no other material obligations to pay principal amounts of our long-term debt obligations prior to their maturity.

Future purchase obligations of $422.1 million as of June 30, 2025 consist of commitments for the purchase of inventory over the next 12 months.

Future purchase obligations of $218.5 million as of September 30, 2025 consist of commitments for the purchase of inventory over the next 12 months.

These obligations represent the minimum contractual obligations expected under the normal course of business.

There are no material purchase obligations beyond 12 months.

We have future obligations to repurchase $0.5 million of inventory associated with repurchase agreements in which the Company’s SS&T segment has sold inventory to a third party and from whom the Company’s Beverage Solutions segment has an obligation to repurchase.

At June 30, 2025, we had a right or obligation to repurchase $9.9 million of inventory associated with Repo Transactions, for which the liability is recorded within accrued expenses and other current liabilities on the Company’s Condensed Consolidated Balance Sheets.

We have no future obligations to repurchase inventory associated with repurchase agreements in which the Company’s SS&T segment has sold inventory to a third party and from whom the Company’s Beverage Solutions segment has an obligation to repurchase.

At December 31, 2024, the Company had $0.6 million of such obligations.

At September 30, 2025, we had a right or obligation to repurchase $11.8 million of inventory associated with Repo Transactions, for which the liability is recorded within accrued expenses and other current liabilities on the Company’s Condensed Consolidated Balance Sheets.

Capital Expenditures

3 unchanged sentences

Customer beverage equipment represents Company-owned equipment that is deployed in our customers’ locations.

Capital expenditures for the six months ended June 30, 2025 and 2024 were as follows:

Six months ended June 30, 2025

Six months ended June 30, 2024

We expect that the material capital expenditures will be complete by the end of the third quarter of 2025.

Capital expenditures for the nine months ended September 30, 2025 and 2024 were as follows:

Nine months ended September 30, 2025

Nine months ended September 30, 2024

We have completed the majority of the capital expenditures related to the Conway Facility and have approximately $15.0 million to expenditures remaining.

If circumstances warrant, we may need to take measures to conserve cash, which may include a suspension, delay, or reduction in growth and/or maintenance capital expenditures.

7 unchanged sentences

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