AVD

FORWARD-LOOKING STATEMENTS/RISK FACTORS: The Company, from time-to-time, may discuss forward-looking statements including assumptions concerning the Company’s operations, future results and prospects. Generally, “may,” “could,” “will,” “would,” “expect,” “believe,” “estimate,” “anticipate,” “intend,” “continue” and similar words identify forward-looking statements. Forward-looking statements appearing in this report are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on our current expectations and are subject to risks and uncertainties that can cause actual results and events to differ materially from those set forth in or implied by the forward-looking statements and related assumptions contained in the entire report. Such factors include, but are not limited to: product demand and market acceptance risks; the effect of economic conditions; weather conditions; military activity and other geopolitical activity; changes in regulatory policy; the impact of competitive products and pricing; changes in foreign exchange rates; product development and commercialization difficulties; capacity and supply constraints or difficulties; availability of capital resources given that interest rate and inflation affect the debt market; and general business regulations, including taxes and other risks as detailed from time-to-time in the Company’s reports and filings filed with the U.S. Securities and Exchange Commission (“SEC”). It is not possible to foresee or identify all such factors. We urge you to consider these factors carefully in evaluating the forward-looking statements contained in this report. You should evaluate all forward-looking statements made in this Form 10-Q in the context of the risks and uncertainties disclosed in Part II, Item 1A of this Form 10-Q under the heading "Risk Factors," in Part I, Item 2 "Management's Discussion and Analysis of Financial Condition and Results of Operations," and in Item 3 "Quantitative and Qualitative Disclosures About Market Risk." The forward-looking statements included in this Form 10-Q are made only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law. If we do update one or more forward-looking statements, no inference should be made that we will make additional updates with respect to those or other forward-looking statements. Three Months Ended June 30, 2026 and 2025: Overview of the Company’s Performance With prolonged pressure on the farm economy from higher fuel and fertilizer costs during the second quarter of 2026, distributors, retailers and growers continued to follow conservative procurement practices, buying goods closer to time-of-need and minimizing carrying costs which, in some cases (as with the Company's cotton products) deferring purchases until the third quarter. At the same time, domestic demand for our Specialty products was strong. However, in light of adverse weather and increased raw material costs, International markets have softened. As a consequence, on a consolidated basis, the Company’s financial performance declined with respect to both net sales and profitability in the period. Overall net sales during the quarter declined by 10% over the comparable period last year. This performance included decreases in net sales of both US Crop (down 9%, largely from a shift in sales of cotton products to the third quarter) and International business (down 18%, largely due to weather and higher prices occasioned by increased raw material costs), partially offset by increased net sales in our Specialty business (up 11%). With lower sales, gross profit decreased 14% quarter-over-quarter. Further, with increased freight costs (largely due to fuel prices) and higher net factory costs, gross margin percentages ended at 30% for the second quarter of 2026, as compared to 31% in the same quarter of the prior year. While declining by 3% on an absolute basis quarter-over-quarter, operating expenses as a percentage of net sales increased to 30% from 28% in the same quarter of the prior year. Compared to the same period of the prior year, research, product development and regulatory expenses increased by 12%, selling expenses declined by 5%, and general and administrative expenses declined by 9%. Expenses in the three months ended June 30, 2026, related to continued transformation efforts, primarily focused on transferring manufacturing activities from our LA facility to Axis, amounted to $1,506. Interest expense, net increased by $4,680 due to increased borrowing under the new debt structure (consisting of the First Lien Term Loan and Second Lien Term Loan), that was put into place on March 13, 2026, and the comparatively higher effective interest rate thereunder. The Company recorded an income tax expense of $383 compared to $765 in the same period of last year. The decrease in income tax expense compared to the same period last year is primarily attributed to a reduction in the estimated effective tax rate for the full year for primarily the profitable entities with no established valuation allowance. The Company generated a net loss of $9,868 or $(0.34) per share compared to a net loss of $849 or $(0.03) per share in the same quarter of the prior year. 19 RESULTS OF OPERATIONS For the Three Months Ended June 30, 2026 2025 Change % Change Net sales: U.S. crop $ 48,033 $ 52,674 $ (4,641 ) -9 % U.S. Specialty 21,804 19,585 2,219 11 % Total U.S. 69,837 72,259 (2,422 ) -3 % International 46,917 57,054 (10,137 ) -18 % Total net sales $ 116,754 $ 129,313 $ (12,559 ) -10 % Total cost of sales $ (82,041 ) $ (88,766 ) $ 6,725 -8 % Total gross profit $ 34,713 $ 40,547 $ (5,834 ) -14 % Total gross margin 30 % 31 % Our domestic crop business recorded net sales during the second quarter of 2026 that were 9% lower than those of the second quarter of 2025. The decrease was driven largely by timing of product sales within the cotton portfolio, specifically Bidrin® cotton insecticide and Folex® cotton defoliant, which carried over into the third quarter (in the case of Folex, closer to time of use as a harvest aid). In addition, granular soil insecticide sales declined quarter over quarter, reflecting softer demand for products such as Aztec®, and Thimet® amid variable pest pressure and more cautious grower spending across key corn and row crop markets. The decreases were partially offset by direct business-to-business sales from the US Crop business to certain foreign customers (as part of our organization restructuring) and strong performance in the herbicide and fungicide portfolios, led by continued momentum from Impact® and Envoke®. Soil fumigant sales also rose during the period, supported by steady demand for proven nematode and disease management solutions in high-value crop markets. Our domestic Specialty business posted a 11% increase in net sales over the second quarter with improved sales across the portfolio. Among the drivers were increased sales of turf products (Turfcide® fungicide and Dylox® insecticide), herbicide products (particularly Bromacil and Imazaquin). Net sales of our international businesses decreased by 18% during the period. Within Central America, demand for various products, including Mocap®, Thimet®, and various third-party products, was reduced on account of El Niño weather, which brought drier than normal conditions and either delayed or suspended crop planting. This effect was felt primarily in rice in Panamá and Nicaragua, peanuts in Nicaragua and vegetables in Guatemala. In addition, certain direct business-to-business sales are now managed by the US crop business as part of our drive for improved operational efficiency. Further, product sales to certain banana plantations were paused in light of labor union activity. In addition, in Mexico, Bromacil herbicide sales were down due to reduced demand from the agave market, while sales of soil fumigants declined due to shipping issues. These decreases were partially offset by stronger sales of Counter, K Salt and Gesapax Combi in Mexico. In Brazil, demand for the two main products (Redshield and Argenfrut) declined due, in part, to higher prices occasioned by raw material cost increases. On a consolidated basis, gross profit for the second quarter of 2026 decreased by 14% as compared to the second quarter of 2025, due largely to decreased sales volume. With increased freight costs and higher net factory costs, the Company recorded a gross margin percentage of 30% for the quarter, as compared to 31% for the same period of the prior year. 20 The change in operating expenses by department is as follows: For the Three Months Ended June 30, 2026 2025 Change % Change Operating expenses Selling $ 11,102 $ 11,633 $ (531 ) -5 % General and administrative Other 12,394 13,791 (1,397 ) -10 % Amortization 3,034 3,049 (15 ) 0 % Legal reserves 92 150 (58 ) -39 % Research, product development and regulatory 6,484 5,803 681 12 % Product liability claims 119 — 119 100 % Asset impairments 284 134 150 112 % Transformation 1,506 1,621 (115 ) -7 % Total $ 35,015 $ 36,181 $ (1,166 ) -3 % •Selling expenses decreased for the three months ended June 30, 2026, as compared to the same period of the prior year. This decrease was primarily associated with lower wages, salaries and travel expenses, and lower spending on advertising and promotional activities, as the Company focused on controlling operating expenses and improving operational efficiency. •Other general and administrative expenses decreased during the three months ended June 30, 2026, as compared to the same period of the prior year. The main drivers were reduced wages and salaries and lower expenses related to outside service providers. •Amortization remained flat during the three months ended June 30, 2026, as compared to the same period of the prior year. •Legal reserves pertain to an EPA matter during the three months ended June 30, 2026, and minor products complaints during the three months ended June 30, 2025. The two matters are unrelated. •Research, product development costs and regulatory expenses increased for the three months ended June 30, 2026, as compared to the same period of the prior year. This increase was driven by higher expenses associated with third-party product development studies. •Product liability claims relate to the Company's Specialty business. •Asset impairments for the three months ended June 30, 2026, relate to the decision to discontinue synthesis operations at the Los Angeles manufacturing facility. During the three months ended June 30, 2025, the Company made the decision to discontinue selling one small volume product and wrote off the remaining intangible asset book value in the amount of $134. •The following table shows the different components of transformation expenses for the three months ended June 30, 2026 and 2025: For the Three Months Ended June 30, 2026 2025 Consulting and strategic advisory services $ — $ 28 Other termination and retention costs 661 642 Transformation related employee costs — — IT implementations 3 240 Plant reorganization costs 682 — Legal and regulatory expense — 711 Other 160 — Total $ 1,506 $ 1,621 Transformation costs related to the Company’s digital and structural transformation project and manufacturing footprint optimization decreased for the three months ended June 30, 2026, as compared to the same period of the prior year. The Company expects that these costs will continue to decrease. The decrease was partially offset by an increase in plant reorganization costs focused primarily on activity in support of the project to transfer production activity from the Los Angeles site to the Axis site. The Los Angeles plant reorganization is expected to be completed by December 31, 2026 and is part of the 21 Company's optimization efforts of its manufacturing footprint, which involves reconfiguring the Los Angeles site by ending synthesis operations on that site and building upon strengths and capabilities at its Axis manufacturing site. The plant reorganization costs incurred relates to a reduction in force of certain personnel, material waste disposal and other related expenses. No such costs were incurred during the three months ended June 30, 2025. Operating expenses excluding the expenses associated with transformation and product liability claims, a non-GAAP measure, which reflects the business focus on managing underlying ongoing expenses, ended at $33,106 or 28% of net sales. In comparison, operating expenses for the same period of the prior year were $34,426 or 27% of net sales. Average Indebtedness and Interest expense Interest costs are summarized in the following table: For the Three Months Ended June 30, 2026 For the Three Months Ended June 30, 2025 Average Debt Interest Expense Interest Rate Average Debt Interest Expense Interest Rate Average indebtedness $ 285,097 $ 8,244 11.6 % $ 196,703 $ 4,110 8.4 % Amortization of deferred loan fees — 1,085 — — 335 — Other interest income — (152 ) — — 16 — Subtotal $ 285,097 $ 9,177 12.9 % $ 196,703 $ 4,461 9.1 % Capitalized interest — (47 ) — — (11 ) — Total $ 285,097 $ 9,130 12.8 % $ 196,703 $ 4,450 9.0 % The Company's borrowings in the three months ended June 30, 2026, were higher compared to the same period of the prior year, mainly as a result of the new debt structure put into place on March 13, 2026. The Company refinanced its revolving credit line with a term loan structure that increased debt and placed additional cash on the Company’s balance sheet. The new debt structure resulted in an increase in the effective interest rate. Income tax expense was $383 for the three months ended June 30, 2026, as compared to $765 for the three months ended June 30, 2025. The effective income tax rate for the three months ended June 30, 2026, was computed based on the estimated effective tax rate for the full year which is approximately 19%, excluding discrete items and entities subject to full valuation allowances against related net deferred tax assets. The Company continues to maintain valuation allowances established against the net deferred tax assets of the U.S. and certain international entities, primarily in Brazil, for the three months ended June 30, 2026. During the three months ended June 30, 2026, several of the Company’s international businesses outside of Brazil were profitable resulting in an income tax expense. Our overall net loss for the three months ended June 30, 2026 was $9,868 or ($0.34) per basic and diluted share, as compared to net loss of $849 or ($0.03) per basic and diluted share in the same quarter of 2025. Six Months Ended June 30, 2026 and 2025: Overview of the Company’s Performance The domestic crop protection market for the first half of 2026 was stable; channel inventories were low, and demand was generally consistent with seasonal need. With the farm economy continuing to feel the effects of high cost of capital coupled and higher costs of fuel and fertilizer (largely due to military activity in the Middle East), the distribution channel persisted in following conservative procurement practices, buying goods closer to time-of-need and minimizing carrying costs. The domestic Specialty market was strong during the six-month period with stable sales performance across multiple segments (ornamental, pest control, turf and landscape). However, in the face of adverse weather and increased raw materials prices, the International markets were not as strong. Thus, on a consolidated basis, the Company’s net sales performance for the first half of 2026 was flat to slightly down, operating profit was up, and, with substantially higher interest expense, net income declined. The Company’s consolidated net sales for the first half of 2026 were slightly less (2%) than those of the prior year period. This performance included US Crop sales that were up 5%, Specialty net sales up 10%, and International net sales down 13%. Gross profit improved by 3%, and, despite a slightly weaker overall factory performance, the gross margin percentage ended at 30% for the first half of 2026, as compared to 29% to the prior year period. 22 Operating expenses increased by approximately 1% and, when expressed as a percentage of net sales, increased to 30% compared to 29% during the same period a year ago. Within operating expenses, selling expenses were down 3%, general and administrative expenses decreased by approximately 1%, and research, product development and regulatory expenses were up 2%. Interest expense, net increased by about $6,705 due to increased borrowing, driven by the two term loans, put in place on March 13, 2026, and increased effective interest rates compared to the revolving line of credit that was refinanced. The Company recorded an income tax expense of $507 as compared to $1,152 in the same period of last year. The decrease in the income tax expense compared to the same period last year primarily arises from a reduction in the estimated effective tax rate for the full year for profitable entities with no established valuation allowance. The Company generated a net loss of $14,014 or ($0.49) per share compared to a net loss of $9,311 or ($0.33) per share in the same period a year ago. RESULTS OF OPERATIONS For the Six Months Ended June 30, 2026 2025 Change % Change Net sales: U.S. crop $ 115,193 $ 110,201 $ 4,992 5 % U.S. Specialty 38,174 34,834 3,340 10 % Total U.S. 153,367 145,035 8,332 6 % International 86,955 100,078 (13,123 ) -13 % Total net sales $ 240,322 $ 245,113 $ (4,791 ) -2 % Total cost of sales $ (167,192 ) $ (174,375 ) $ 7,183 -4 % Total gross profit $ 73,130 $ 70,738 $ 2,392 3 % Total gross margin 30 % 29 % Our domestic crop business recorded net sales during the first half of 2026 that were 5% higher than those of the first half of 2025, due to improved industry demand for the Company’s Impact herbicide, Counter nematicide, Smartchoice granular soil insecticide and soil fumigants. The performance included direct business-to-business sales from the US Crop business to certain foreign customers (as part of our organization restructuring). These increases were partially offset by lower sales of cotton defoliant, Folex, and cotton insecticide, Bidrin, due to a seasonal shift in orders. All in all, performance across the US Crop portfolio saw strong improvements, as compared to the same period of 2025. Our domestic Specialty business posted a 10% increase in net sales in the first half of 2026 compared to the first half of 2025, with improvement over multiple market segments, as the Company began to see the effects of a more focused go-to-market strategy within the context of just-in-time procurement practices. Specifically, the Company recorded strong sales of OHP’s ornamental products, as a result of increased demand for its biological product solutions (namely, its hallmark Botanigard® biological brand). While cooler weather in key areas of the country delayed the traditional start of the pest control business, the turf business performed better than forecasted, driven primarily by a significant increase in demand for our Turfcide® fungicide, our Bromacil herbicide, our Basamid® soil fumigant product (which supports the construction of new golf courses across the US) and our Dylox insecticide. These gains were partially offset by reduced sales of our mosquito adulticide. Net sales of our international businesses decreased by 13% during the first half of 2026 compared to the first half of 2025. The business experienced lower sales in Brazil relative to the same period of the prior year, primarily due to the delayed delivery of goods from the final quarter of 2024 into the first quarter of 2025 (which delay did not repeat in 2026). Further, certain direct business-to-business sales are now managed by the US crop business as part of our drive for improved operational efficiency. In addition, our Agrinos business in India experienced lower sales. Drier weather in Central America slowed sales (for example, Counter, Aztec and Impact as well as various third-party products) late in the six-month period, which was partially offset by improved sales in Ecuador, arising from the Company’s launch of Mocap for use on bananas, as well as in Mexico, by higher sales of non-crop vegetation control products and more normalized channel inventories. On a consolidated basis, gross profit for the first six months of 2026 improved by 3%, as compared to the same period of the prior year. Increased sales volume of higher-margin domestic products contributed to the increase. This performance, along with a continued strong factory efficiency, resulted in gross margin for the first half of 2026 of 30%, as compared to 29% during the same period of the prior year. 23 24 The change in operating expenses by department is as follows: For the Six Months Ended June 30, 2026 2025 Change % Change Operating expenses Selling $ 21,685 $ 22,356 $ (671 ) -3 % General and administrative Other 26,496 26,630 (134 ) -1 % Amortization 6,062 6,115 (53 ) -1 % Legal reserves 92 150 (58 ) -39 % Research, product development and regulatory 11,755 11,485 270 2 % Product liability claims 201 — 201 100 % Asset impairments 943 134 809 604 % Transformation 4,310 3,812 498 13 % Total $ 71,544 $ 70,682 $ 862 1 % •Selling expenses decreased during the six months ended June 30, 2026, as compared to the same period of the prior year. This decrease was primarily associated with lower wages, salaries and travel expenses, partially offset by slightly higher spending on advertising and promotions. •Other general and administrative expenses declined slightly during the six months ended June 30, 2026, as compared to the same period of the prior year. •Amortization declined slightly during the six months ended June 30, 2026, as compared to the same period of the prior year, as a result of the retirement of fully written down assets in the prior year. •Legal reserves pertain to an immaterial amount related to an EPA matter during the six months ended June 30, 2026, and an immaterial amount for a minor product complaint during the six months ended June 30, 2025. The two matters are unrelated. •Research, product development costs and regulatory expenses slightly increased during the six months ended June 30, 2026, as compared to the same period of the prior year. This increase was driven by slightly higher expenses associated with third-party product development studies. •Product liability claims relate to the Company's Specialty business. •Asset impairments for the six months ended June 30, 2026, relate to the decision to discontinue synthesis operations at the Los Angeles manufacturing facility. In the same period of 2025, the Company made the decision to discontinue selling one small volume product and wrote off the remaining intangible asset book value in the amount of $134. •The following table shows the different components of transformation expenses for the six months ended June 30, 2026 and 2025: For the Six Months Ended June 30, 2026 2025 Consulting and strategic advisory services $ 87 $ 1,149 Other termination and retention costs 877 1,167 Transformation related employee costs 63 — IT implementations 8 693 Plant reorganization costs 3,115 — Legal and regulatory expense — 711 Other 160 92 Total $ 4,310 $ 3,812 Transformation costs related to the Company’s digital and structural transformation project and manufacturing footprint optimization increased during the six months ended June 30, 2026, as compared to the same period of the prior year. The Company expects that these costs will decrease. The increase in plant reorganization costs focused primarily on activity in support of the project to transfer production activity from the Los Angeles site to the Axis site. The Los Angeles plant reorganization is expected to be completed by December 31, 2026 and is part of the Company's optimization efforts of its 25 manufacturing footprint, reconfiguring the Los Angeles site by ending synthesis operations on that site and building upon strengths and capabilities at its Axis manufacturing site. The plant reorganization costs incurred relate to a reduction in force of certain personnel, material waste disposal and other related expenses. No such costs were incurred during the six months ended June 30, 2025. Operating expenses excluding the expenses associated with transformation, asset impairments and product liability claims, a non-GAAP measure which reflects the business focus on managing underlying ongoing expenses, ended at $66,090 or 28% of net sales. In comparison, operating expenses for the same period of the prior year were $66,736 or 27% of net sales. Average Indebtedness and Interest expense Interest costs are summarized in the following table: For the Six Months Ended June 30, 2026 For the Six Months Ended June 30, 2025 Average Debt Interest Expense Interest Rate Average Debt Interest Expense Interest Rate Average indebtedness $ 249,182 $ 13,363 10.7 % $ 179,710 $ 7,659 8.5 % Amortization of deferred loan fees — 1,798 — — 570 — Other interest income — (154 ) — — 15 — Subtotal $ 249,182 $ 15,007 12.0 % $ 179,710 $ 8,244 9.2 % Capitalized interest — (87 ) — — (29 ) — Total $ 249,182 $ 14,920 12.0 % $ 179,710 $ 8,215 9.1 % The Company’s borrowings during the six months ended June 30, 2026 were higher when compared to the same period of the prior year, mainly as a result of the new debt structure put into place on March 13, 2026. That resulted in the refinancing of a previous revolving credit line with a term loan structure that increased debt and placed additional cash on the Company’s balance sheet. Our effective interest rate increased as a result of the change in debt structure. Income tax expense was $507 for the six months ended June 30, 2026, as compared to $1,152 for the six months ended June 30, 2025. The effective income tax rate for the six months ended June 30, 2026 was computed based on the estimated effective tax rate for the full year which is approximately 19%, excluding discrete items and entities subject to full valuation allowances against related net deferred tax assets. The Company continues to maintain valuation allowances established against the net deferred tax assets of the U.S. and certain international entities, primarily in Brazil, for the six months ended June 30, 2026. During the six months ended June 30, 2026, several of the Company’s international businesses outside of Brazil were profitable resulting in an income tax expense. Our overall net loss for the six months ended June 30, 2026 was $14,014 or ($0.49) per basic and diluted share, as compared to net loss of $9,311 or ($0.33) per basic and diluted share in the six months ended June 30, 2025. LIQUIDITY AND CAPITAL RESOURCES The following table presents selected data from our condensed consolidated statements of cash flows for the periods presented: For the Six Months Ended June 30, 2026 2025 Net cash used in operating activities $ (60,460 ) $ (39,836 ) Net cash used in investing activities (2,419 ) (1,057 ) Net cash provided by financing activities 94,371 41,479 Net increase in cash 31,492 586 Effect of exchange rate changes on cash and cash equivalents (16 ) 1,382 Cash at beginning of period 12,425 12,514 Cash at end of period $ 43,901 $ 14,482 26 The Company used cash of $60,460 in operating activities during the six months ended June 30, 2026, as compared to $39,836 during the six months ended June 30, 2025. Included in the $60,460 are net loss of $14,014, plus non-cash depreciation, amortization of intangibles and other assets in the amount of $9,026, provision for bad debts in the amount of $1,327, stock compensation in the amount of $574, amortization of deferred loan fees in the amount of $1,786 and leases in the amount of $140. Also included are a net change in deferred income taxes of $690, and change in liabilities for uncertain tax positions or unrecognized tax benefits of $50. These together resulted in a cash inflow of $268, as compared to an inflow of $2,575 for the same period of 2025. During the six months ended June 30, 2026, the Company increased net working capital by $129,494, as compared to an increase of $21,381 during the same period of the prior year. The biggest driver of the increase was the restructuring of the Company’s debt which resulted in a cash inflow of $68,766 which is included in the change in working capital. In addition, accounts receivable increased by $16,225, as compared to an increase by $3,293 in the same period of 2025. This change resulted from receiving lower customer prepayments at the end of 2025. Inventories increased by $4,280, as compared to an increase of $9,785 during the same period of 2025. Customer prepayments decreased by $32,353, as compared to a decrease of $46,187 in the same period of 2025, driven by lower prepayments from customers during December 2025. Accrued program costs decreased by $3,967, as compared to an increase of $10,267 in the prior year, as a result of timing of customers purchases, program simplification, and the mix of sales. Our accounts payable balances decreased by $459, as compared to an increase of $24,547 in the same period of 2025. Prepaid expenses and other assets increased by $339, as compared to an increase of $1,863 in the same period of 2025. Income tax receivable/payable, net changed by $2,506 as compared to $1,024 in the prior year. Finally, other payables and accrued expenses decreased by $5,611, as compared to a decrease of $15,073 in the prior year. With regard to our program accrual, the decrease (as noted above) primarily reflects our initiatives to simplify customer programs, and as a result of the level and mix of sales and customers in the first half of 2026, as compared to the prior year. The Company accrues programs in line with the growing season upon which specific products are targeted. Typically crop products have a growing season that ends on September 30th of each year. During the first half of 2026, the Company made accruals for programs in the amount of $24,309 and made payments in the amount of $28,230. During the first half of the prior year, the Company made accruals in the amount of $41,451 and payments in the amount of $31,032. Cash used for investing activities was $2,419 for the six months ended June 30, 2026, as compared to $1,057 for the six months ended June 30, 2025. The Company spent $2,322 on fixed assets purchases primarily focused on its manufacturing infrastructure. During the six months ended June 30, 2026, financing activities provided $94,371, as compared to $41,479 during the same period of the prior year. Net borrowings under the Company's debt structure amounted to $110,437 in the first half of 2026, as compared to $42,169 in the same period of the prior year. As previously noted, this was driven by the retirement of the pre-existing revolving line of credit and replacement by two term loans. The Company made payments in the amount of $16,234 relating to loan fees. Lastly, in exchange for shares of common stock returned by employees, we paid $95 and $142 for tax withholdings on stock-based compensation awards during the six months ended June 30, 2026 and 2025, respectively. As of June 30, 2026 our debt structure includes two term loans. As of December 31, 2025, our debt structure included a senior credit facility. The debt structure are summarized in the following table: Long-term indebtedness June 30, 2026 December 31, 2025 Current portion of long-term debt $ 2,250 $ — Long-term debt, net of current portion 282,775 174,000 Unamortized debt discount and debt issuance costs (17,406 ) (3,015 ) Total indebtedness $ 267,619 $ 170,985 As of June 30, 2026, the Company was in compliance with its financial covenants. We believe that anticipated cash flow from operations and existing cash balances will be sufficient to provide us with liquidity necessary to fund our working capital and cash requirements for the next twelve months. 27 RECENTLY ISSUED ACCOUNTING GUIDANCE Please refer to Note 1 in the accompanying Notes to the Condensed Consolidated Financial Statements for recently issued and adopted accounting standards. CRITICAL ACCOUNTING POLICIES AND ESTIMATES The Company continually re-assesses the critical accounting policies used in preparing its financial statements. In the Company’s Form 10-K filed with the SEC for the year ended December 31, 2025, the Company provided a comprehensive statement of critical accounting policies. These policies have been reviewed in detail as part of the preparation work for this Form 10-Q. After our review of these matters, we have determined that, during the subject reporting period there has been no material change to the critical accounting policies that are listed in the Company’s Form 10-K for the year ended December 31, 2025.