The statements contained in this Quarterly Report on Form 10-Q that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical facts contained in or incorporated by reference into this Form 10-Q, including statements regarding our future operating results, future financial position, business strategy, objectives, goals, plans, prospects, and markets, and plans and objectives for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “targets,” “contemplates,” “projects,” “predicts,” “may,” “might,” “plan,” “will,” “would,” “should,” “could,” “can,” “potential,” “continue,” “objective,” or the negative of those terms, or similar expressions intended to identify forward-looking statements. However, not all forward-looking statements contain these identifying words. Specific forward-looking statements in this Form 10-Q include statements regarding the impact, if any, of the adoption of an ASU on our consolidated financial statements; any changes to inflation rates; exposure to significant interest, currency, or credit risks arising from our financial instruments; compliance with our loan covenants; and sufficiency of our cash and cash equivalents, borrowing capacity, and cash generated from operations to fund our operations for the next 12 months. All forward-looking statements included herein are based on information available to us as of the date hereof and speak only as of such date. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements. The forward-looking statements contained in or incorporated by reference into this Form 10-Q reflect our views as of the date of this Form 10-Q about future events and are subject to risks, uncertainties, assumptions, and changes in circumstances that may cause our actual results, performance, or achievements to differ significantly from those expressed or implied in any forward-looking statement. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future events, results, performance, or achievements. A number of factors, including the state of the U.S. economy, general global economic conditions, including tariffs and the potential effect of inflationary pressures and increased interest rates on our cost of doing business, could cause actual results to differ materially from those indicated by the forward-looking statements and other risks detailed from time to time in our reports to the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Annual Report”). Executive Summary Business Overview We are a national provider of waste and recycling management services to customers from across multiple industry sectors that are typically larger, multi-location businesses. We create customer-specific programs and perform the related services for the collection, processing, recycling, disposal, and tracking of waste streams and recyclables to maximize resource utilization. Our programs and services enable our customers to address their business sustainability and environmental, social and governance goals and responsibilities, while also receiving optimized operational efficiencies and lower costs. Our revenue is primarily generated from fees charged for the collection, transfer, disposal and recycling services and from sales of commodities by our recycling operations. We also rent dumpster and compacting equipment to customers. In addition, we offer products such as antifreeze and windshield washer fluid, dumpster and compacting equipment, and other minor ancillary services. This “Management’s Discussion and Analysis of Financial Condition and Results of Operations” is based on and relates primarily to the operations of Quest Resource Holding Corporation and Quest Resource Management Group, LLC (collectively, “we,” “us,” “our,” or “our company”). Recent Developments Goodwill Impairment. During the three months ended June 30, 2026, the Company’s stock price traded below its carrying value per share for a sustained period. As a sustained decline in market capitalization is a potential indicator of goodwill impairment, we performed an interim quantitative goodwill assessment which resulted in a goodwill impairment of $11.0 million as of June 30, 2026. The goodwill impairment charges are reflected in the “Impairment loss” in our condensed consolidated statements of operations. See Note 6 to our condensed consolidated financial statements for further discussion of the quantitative goodwill assessment. Global Economic Trends There has been heightened uncertainty in the macroeconomic environment, especially as it relates to fluctuations in unemployment, inflation, tariffs, consumer and business spending, and government actions or inactions, including government shutdowns. There are also significant geopolitical concerns, including ongoing global conflicts and recent military actions involving Iran and the broader Middle East, which have caused volatility in capital markets and may continue to have further global economic consequences, including disruptions of the global supply chains and energy markets. Any such volatility and disruptions may have adverse consequences on us or the third parties on whom we rely. If the equity and credit markets deteriorate, including as a result of political unrest, war, military actions, or regional conflict, it may make any necessary debt or equity financing more difficult to obtain in a timely manner or on favorable terms, more costly or more dilutive. Inflation can adversely affect us by increasing our operating costs. 17 Any significant increases in inflation and related increases in interest rates could have a material adverse effect on our business, results of operations and financial condition. Results of Operations The following discussion focuses on our results of operations and our liquidity and capital resources. You should read this discussion in conjunction with the condensed consolidated financial statements and notes thereto for the six months ended June 30, 2026 included in Part I, Item 1 of this Quarterly Report on Form 10-Q. The following table summarizes our operating results for the three and six months ended June 30, 2026 and 2025 (in thousands): Three Months Ended Six Months Ended June 30, Change June 30, Change 2026 2025 $ % 2026 2025 $ % (Unaudited) (Unaudited) Revenue $ 64,069 $ 59,540 $ 4,529 7.6 % $ 125,804 $ 127,970 $ (2,166 ) (1.7 )% Cost of revenue 53,639 48,503 5,136 10.6 % 105,709 106,002 (293 ) (0.3 )% Gross profit 10,430 11,037 (607 ) (5.5 )% 20,095 21,968 (1,873 ) (8.5 )% Operating expenses: Selling, general, and administrative 8,246 9,295 (1,049 ) (11.3 )% 16,635 20,707 (4,072 ) (19.7 )% Depreciation and amortization 1,059 1,299 (240 ) (18.5 )% 2,104 2,842 (738 ) (26.0 )% Loss on sale of assets, net 88 61 27 44.3 % 77 4,491 (4,414 ) (98.3 )% Impairment loss 11,000 — 11,000 * 11,000 1,707 9,293 * Total operating expenses 20,393 10,655 9,738 91.4 % 29,816 29,747 69 0.2 % Operating (loss) income (9,963 ) 382 (10,345 ) * (9,721 ) (7,779 ) (1,942 ) 25.0 % Interest expense (2,208 ) (2,375 ) 167 (7.0 )% (4,258 ) (4,642 ) 384 (8.3 )% Loss on extinguishment of debt — — — * (488 ) — (488 ) * Loss before taxes (12,171 ) (1,993 ) (10,178 ) * (14,467 ) (12,421 ) (2,046 ) 16.5 % Income tax expense (benefit) 46 (22 ) 68 * 68 (44 ) 112 * Net loss $ (12,217 ) $ (1,971 ) $ (10,246 ) * $ (14,535 ) $ (12,377 ) $ (2,158 ) 17.4 % * Indicates calculation is not meaningful or results are greater than 100% for comparison Three and Six Months Ended June 30, 2026, Compared to Three and Six Months Ended June 30, 2025 Revenue For the three months ended June 30, 2026, revenue was $64.1 million, an increase of $4.6 million, or 7.6%, compared to $59.5 million for the three months ended June 30, 2025. For the six months ended June 30, 2026, revenue was $125.8 million, a decrease of $2.2 million, or 1.7%, compared to $128.0 million for the six months ended June 30, 2025. The increase in revenue for the three months ended June 30, 2026 was primarily driven by volume improvements from certain clients in the industrial end-market, which increased revenue by approximately $3.3 million compared to the prior year period and by new business, net of customer attrition, of approximately $1.2 million resulting from new client wins and wallet share expansion with existing customers. For the six months ended June 30, 2026, the decrease in revenue was primarily attributable to the divestiture of an underperforming business operation, which was sold on March 31, 2025 and reduced revenue by approximately $3.0 million (see Note 3 to our condensed consolidated financial statements for further discussion of the sale). Additionally, continued softness experienced in the first quarter of 2026 from certain clients in the industrial end-market led to a $0.7 million decrease in revenues for the six months ended June 30, 2026 compared to the prior year period. These declines were partially offset by net growth of $1.5 million within our remaining business during the six months ended June 30, 2026 compared to the prior year period. Cost of Revenue/Gross Profit Cost of revenue increased $5.1 million, or 10.6%, to $53.6 million for the three months ended June 30, 2026 from $48.5 million for the three months ended June 30, 2025. This increase in cost of revenue for the three months ended June 30, 2026 was primarily attributable to the higher revenue volumes described above. Cost of revenue decreased $0.3 million to $105.7 million for the six months ended June 30, 2026 compared to $106.0 million for the six months ended June 30, 2025, primarily resulting from the changes in revenue. Gross profit for the three months ended June 30, 2026 was $10.4 million, compared to $11.0 million for the three months ended June 30, 2025. Our gross profit margin was 16.3% for the three months ended June 30, 2026, compared with 18.5% for the three months ended June 30, 2025. Gross profit for the six months ended June 30, 2026 was $20.1 million, compared to $22.0 million for the six months ended June 30, 2025. The gross profit margin was 16.0% for the six months ended June 30, 2026, compared to 17.2% 18 for the six months ended June 30, 2025. The declines in both gross profit and gross margin for the three and six months ended June 30, 2026, compared to the prior year periods, were isolated to margin pressure with certain industrial customers. These gross profit and margin declines were partially offset by improved gross profit and gross margin across the remainder of our business, where operating initiatives and wallet share expansion continued to take hold. Operating Expenses For the three months ended June 30, 2026 and 2025, operating expenses were $20.4 million and $10.7 million, respectively. Operating expenses were $29.8 million and $29.7 million for the six months ended June 30, 2026 and 2025, respectively. The increase in operating expenses for the three months ended June 30, 2026, compared to the prior year period, was primarily due to an $11.0 million non-cash goodwill impairment charge, partially offset by lower selling, general and administrative expenses (“SG&A expenses”) and depreciation and amortization. See “Critical Accounting Estimates—Goodwill Impairment” below and Note 6 to our condensed consolidated financial statements for further discussion on the goodwill impairment. For the six months ended June 30, 2026, operating expenses increased $0.1 million, as the $9.3 million increase in impairment loss was offset by a $4.4 million lower loss on sale of assets and decreases of $4.1 million in SG&A expenses and $0.7 million in depreciation and amortization. SG&A expenses were $8.2 million for the three months ended June 30, 2026, compared to $9.3 million for the same period in 2025. SG&A expenses were $16.6 million and $20.7 million for the six months ended June 30, 2026 and 2025, respectively. The decrease of $1.1 million in SG&A expenses for the three months ended June 30, 2026, compared to the prior year period, is primarily due to reductions of approximately $0.4 million in professional fees, $0.3 million in labor related costs, and $0.1 million in facility rent. All other SG&A expenses for the three months ended June 30, 2026 were down approximately $0.3 million resulting from the accumulation of cost savings initiatives across multiple departments, compared to the prior year period. For the six months ended June 30, 2026, total SG&A expenses decreased by approximately $4.1 million compared to the prior year period. This decline in SG&A expenses during the six months ended June 30, 2026, was primarily due to a decrease of $2.1 million in labor related costs resulting from prior year headcount reductions related to operational efficiency initiatives, which includes a reduction in severance costs of $0.6 million. The decrease in SG&A expenses for the six months ended June 30, 2026, compared to the prior year period also included a decrease of approximately $0.9 million in professional fees and marketing related costs, resulting from our cost savings initiatives, and a reduction in bad debt expense of $0.3 million. All other SG&A expenses for the six months ended June 30, 2026 were down approximately $0.8 million resulting from the accumulation of cost savings initiatives across multiple departments, compared to the prior year period. Operating expenses for the three months ended June 30, 2026 and 2025 included depreciation and amortization of $1.1 million and $1.3 million, respectively. Operating expenses for the six months ended June 30, 2026 and 2025 included depreciation and amortization of $2.1 million and $2.8 million, respectively. The decrease in depreciation and amortization expense for the six months ended June 30, 2026, compared to the prior year period, is primarily due to a lower customer relationship intangible balance. During the first quarter of 2025, as a result of certain client attrition, we determined a customer relationship intangible was impaired and recorded an impairment charge of $1.7 million, which reduced the intangible value. See Note 6 to our condensed consolidated financial statements for further discussion. On March 31, 2025, we completed the sale of substantially all of the assets used in an underperforming business operation. The selling price of the assets was approximately $5.0 million and we recognized a $4.5 million loss on sale of assets for the six months ended June 30, 2025. See Note 3 to our condensed consolidated financial statements for further discussion. Interest Expense and Loss on Debt Extinguishment Interest expense was $2.2 million and $2.4 million for the three months ended June 30, 2026 and 2025, respectively. Interest expense was $4.3 million and $4.6 million for the six months ended June 30, 2026 and 2025, respectively. The decrease in expense is primarily due to lower borrowings on our TCB ABL Facility (as defined below) for the three and six months ended June 30, 2026 compared to borrowings on our PNC ABL Facility in the prior year periods. During the three months ended March 31, 2026, we entered into a Loan and Security Agreement with Texas Capital Bank (the “TCB Loan Agreement”). In connection with the execution and delivery of the TCB Loan Agreement, which provides for an asset-based revolving credit facility (the “TCB ABL Facility”), the PNC Loan Agreement was terminated, and all outstanding amounts were paid in full. The termination of the PNC Loan Agreement resulted in a loss on debt extinguishment of $488 thousand, attributable to the write-off of unamortized debt issuance costs. Additionally, in March 2026, we amended our Credit Agreement (the “Credit Agreement”) with Monroe Capital Management Advisors LLC (“Monroe”) to, among other things, modify its financial covenants, which resulted in overall favorable terms for us. As a result of this modification, we entered into a fee arrangement with Monroe for the payment of an exit fee upon the occurrence of certain triggering events, which include a change in control, a debt refinancing, or the maturity of the Credit Agreement. The calculation of the exit fee is dependent upon the financial performance of our business at the time of the triggering event, and the fee has a minimum value of $2.0 million. While the exit fee does not include a limit on the maximum fee to be paid, we do not believe that any amount paid by us will be materially different from the $2.0 million. Therefore, as of June 30, 2026, the estimated exit fee of 19 $2.0 million is recorded as an other long-term liability, and the fee has been included in our debt issuance costs which is amortized to interest expense over the remaining term of the Credit Agreement. The value of the estimated liability for the exit fee will be adjusted, in addition to interest expense, if there is a material change in our estimate prior to a triggering event. As previously disclosed, on October 19, 2020, we granted a warrant to purchase 500,000 shares exercisable immediately and subsequently issued a warrant to purchase 350,000 shares on October 19, 2021 to affiliates of Monroe (the “Holders”) in connection with the financing (the “Warrants”). On March 12, 2026, we and the Holders entered into an Amendment to Warrant to Purchase Common Stock to each of the Warrants to extend the expiration date of the Warrants from March 19, 2028 to June 28, 2030. We calculated the change in estimated fair value of the warrants resulting from the modification using the Black-Scholes option pricing model, and recorded a debt discount of $198 thousand, which is being amortized to interest expense over the remaining term of the Credit Agreement. We also incurred approximately $914 thousand in additional debt issuance costs resulting from the March 2026 financing transactions. As a result of these transactions, as of June 30, 2026, our unamortized debt issuance costs and debt discount is $4.4 million. See Note 8 to our condensed consolidated financial statements for further discussion. Income Taxes We recorded a provision for income taxes of $46 thousand and an income tax benefit of $(22) thousand for the three months ended June 30, 2026 and 2025, respectively. We recorded a provision for income taxes of $68 thousand and an income tax benefit of $(44) thousand for the six months ended June 30, 2026 and 2025, respectively. The provision/(benefit) for income tax is primarily attributable to state tax obligations based on current estimated state tax income/(loss) multiplied by the state tax apportionment percentage for states with no net operating loss carryforwards. We continued to record a full valuation allowance against all our deferred tax assets (“DTAs”) as of both June 30, 2026 and December 31, 2025. We intend on maintaining a full valuation allowance on our DTAs until there is sufficient evidence to support the reversal of all or some portion of these allowances. Over the near term, we do not anticipate reversing a significant portion of this allowance. Release of the valuation allowance would result in the recognition of certain DTAs and a decrease to income tax expense for the period the release is recorded. However, the exact timing and amount of the valuation allowance release are subject to change based on the level of profitability that we are able to actually achieve. Net Loss Net loss for the three months ended June 30, 2026 was $(12.2) million, compared to a net loss of $(2.0) million for the three months ended June 30, 2025. Net loss for the six months ended June 30, 2026 was $(14.5) million, compared to net loss of $(12.4) million for the six months ended June 30, 2025. The discussions above explain the majority of the changes which contributed to the change in net results year-over-year. Our operating results, including revenue, operating expenses, and operating margins, vary from period to period depending on commodity prices of recyclable materials, the volumes and mix of services provided, as well as customer mix during the reporting period, and the timing of acquisitions, divestitures, and impairments. Loss per Share Net loss per basic and diluted share attributable to common stockholders was $(0.57) and $(0.09) for the three months ended June 30, 2026 and 2025, respectively. Net loss per basic and diluted share attributable to common stockholders was $(0.68) and $(0.59) for the six months ended June 30, 2026 and 2025, respectively. The basic and diluted weighted average number of shares of common stock outstanding was approximately 21.3 million for the three and six months ended June 30, 2026 and 20.9 million for the three and six months ended June 30, 2025. Adjusted EBITDA For the three months ended June 30, 2026, Adjusted EBITDA (as defined below), a non-GAAP financial measure, increased 4.0% to $2.8 million from $2.7 million for the three months ended June 30, 2025. For the six months ended June 30, 2026, Adjusted EBITDA increased 8.1% to $4.6 million from $4.2 million for the same period in 2025. We use the non-GAAP measurement of earnings before interest, taxes, depreciation, amortization, stock-related compensation charges, and certain other adjustments, or “Adjusted EBITDA”, to evaluate our performance. Adjusted EBITDA is a non-GAAP measure that is frequently used by analysts, investors and other interested parties to evaluate the market value of companies considered to be in similar businesses. We suggest that Adjusted EBITDA be viewed in conjunction with our reported financial results or other financial information prepared in accordance with GAAP. 20 The following table reflects the reconciliation of net loss to Adjusted EBITDA for the three and six months ended June 30, 2026 and 2025 (in thousands): As Reported As Reported Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (Unaudited) (Unaudited) Net loss $ (12,217 ) $ (1,971 ) $ (14,535 ) $ (12,377 ) Depreciation and amortization 1,218 1,500 2,426 3,246 Interest expense 2,208 2,375 4,258 4,642 Stock-based compensation expense 357 533 745 1,195 Loss on sale of assets, net 88 61 77 4,491 Impairment loss 11,000 — 11,000 1,707 Loss on extinguishment of debt — — 488 — Other adjustments 92 208 57 1,379 Income tax expense (benefit) 46 (22 ) 68 (44 ) Adjusted EBITDA $ 2,792 $ 2,684 $ 4,584 $ 4,239 For the three and six months ended June 30, 2026, other adjustments result primarily from severance costs. For the three and six months ended June 30, 2025, other adjustments primarily related to severance and retirement costs, certain loan amendment costs, and other professional fees. Liquidity and Capital Resources As of June 30, 2026, we had working capital of $7.9 million, including $1.0 million of cash and cash equivalents, compared with working capital of $11.7 million, including $1.0 million of cash and cash equivalents as of December 31, 2025. We derive our primary sources of funds for conducting our business activities from operating revenues; borrowings under our credit facilities; and the placement of our equity securities to investors. We require working capital primarily to carry accounts receivable, service debt, purchase capital assets, fund operating expenses, address unanticipated competitive threats or technical problems, withstand adverse economic conditions, fund potential acquisition transactions, and pursue goals and strategies. We believe our existing cash and cash equivalents of $1.0 million, our borrowing availability under our $40.0 million TCB ABL Facility (as defined and discussed in Note 8 to our condensed consolidated financial statements), and cash expected to be generated from operations will be sufficient to fund our operations for the next 12 months and thereafter for the foreseeable future. Our known current- and long-term uses of cash include, among other possible demands, capital expenditures, lease payments and repayments to service debt and other long-term obligations. We have no agreements, commitments, or understandings with respect to any such placements of our securities and any such placements could be dilutive to our stockholders. Cash Flows The following table presents a summary of our cash flows for the six months ended June 30, 2026 and 2025 (in thousands): Six months ended June 30, 2026 2025 Change Net cash provided by operating activities $ 4,651 $ 2,845 $ 1,806 Net cash (used in) provided by investing activities (665 ) 4,234 (4,899 ) Net cash used in financing activities (3,977 ) (7,026 ) 3,049 Net increase in cash and cash equivalents $ 9 $ 53 $ (44 ) Cash Flows from Operating Activities For the six months ended June 30, 2026, our net loss of $(14.5) million included a non-cash goodwill impairment loss of $11.0 million and loss on debt extinguishment of $488 thousand. Other non-cash items included in our net loss for the six months ended June 30, 2026 totaled approximately $3.8 million and related primarily to depreciation, amortization of intangible assets and debt issuance costs and discounts, a provision for doubtful accounts, and stock-based compensation. For the six months ended June 30, 2025, our net loss of $(12.4) million included a non-cash net loss on sale of $4.5 million and a non-cash intangible asset impairment loss of $1.7 million. Other non-cash items included in our net loss for the six months ended June 30, 2025 totaled approximately $5.3 million and related primarily to depreciation, amortization of intangible assets and debt issuance costs and discounts, a provision for doubtful accounts, and stock-based compensation. The favorable change in our net cash provided by operating activities primarily results from improved working capital management, especially related to our continued focus on strong collection efforts and improved billing cycle times, which contributed to an 21 improvement in days sales outstanding. Days sales outstanding (defined as “Accounts receivable, less allowance for doubtful accounts” at quarter end divided by “Revenue” for the most recent quarter multiplied by 91.25 days) decreased from 75.9 days at December 31, 2025 to 70.5 days at June 30, 2026. During the six months ended June 30, 2026, we also recognized decreased spending for operating expenses as a result of our cost savings initiatives. These positive impacts to our cash provided by operating activities were partially offset by the net decline in client activity during the six months ended June 30, 2026. See Management’s Discussion and Analysis of Financial Condition: Results of Operations for further discussion of our cost savings initiatives and client activity. Cash Flows from Investing Activities Cash used in investing activities for the six months ended June 30, 2026 was $(0.7) million and primarily relates to software development costs. Cash provided by investing activities for the six months ended June 30, 2025 was $4.2 million and primarily related to the sale of our divested business operations, which generated cash proceeds of approximately $5.0 million. These proceeds were used to repay a portion of our outstanding debt in 2025. Cash Flows from Financing Activities Net cash used in financing activities for the six months ended June 30, 2026 was $(4.0) million, primarily due to the repayment of $4.3 million on our notes payable and payments for debt issuance costs of $0.2 million resulting from the March 2026 debt refinancing transactions, partially offset by net borrowings of $0.5 million from our credit facilities. Net cash used in financing activities for the six months ended June 30, 2025 was $(7.0) million, primarily due to the repayment of $3.5 million on our notes payable using proceeds from the sale of certain divested business operations as further discussed in Note 3 to our condensed consolidated financial statements. Other financing activities included net repayment of $2.8 million on our credit facility. See Note 8 to our condensed consolidated financial statements for further discussion. Inflation Although the overall economy has experienced some inflationary pressures, we do not believe that inflation had a material impact on us during the six months ended June 30, 2026 and 2025. We believe our flexible pricing structures and cost recovery fees may help mitigate volatility in costs, such as fuel, labor, and certain capital items, by allowing us to recover certain inflation-related cost increases from our customer base. Ongoing geopolitical conflicts, including recent military actions involving Iran and the broader Middle East, may contribute to further volatility in energy markets and fuel costs, which could increase inflationary pressure on our business or create timing delays in our ability to recover such costs from customers. However, consistent with industry practice, we believe many of our contracts allow us to pass through certain costs to our customers or adjust pricing. While we believe that we should be able to offset many cost increases that result from inflation in the ordinary course of business, we may be required to absorb at least part of these cost increases due to competitive pressures or delays in timing of rate increases. Although we have not been materially affected by inflation to date, we can provide no assurance that we will not be affected in the future by higher rates of inflation, increases in interest rates, or continued volatility in energy and fuel costs. Critical Accounting Estimates and Policies Our discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of our condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue, expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to areas that require a significant level of judgment or are otherwise subject to an inherent degree of uncertainty. These areas include carrying amounts of accounts receivable, goodwill and other intangible assets, the liability for estimated exit fees, stock-based compensation expense, and deferred taxes. We base our estimates on historical experience, our observance of trends in particular areas, and information or valuations and various other assumptions that we believe to be reasonable under the circumstances and which form the basis for making judgments about the carrying value of assets and liabilities that may not be readily apparent from other sources. Actual amounts could differ significantly from amounts previously estimated. For a discussion of our critical accounting policies, refer to Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2025 Annual Report. There have been no significant changes in our critical accounting policies during the six months ended June 30, 2026, except as follows: Goodwill Impairment During the three months ended June 30, 2026, the Company’s stock price traded below its book value per share for a sustained period. As a sustained decline in market capitalization is a potential indicator of goodwill impairment, we performed an interim quantitative goodwill assessment. Management engaged a third-party to perform the assessment as of May 31, 2026, which estimated the fair value of the Company using the discounted cash flow method and guideline public company method. We considered the relationship between estimated fair value and market capitalization when evaluating the goodwill impairment analysis. The results of these assessments indicated that the 22 Company's fair value was less than the Company’s carrying value and therefore we recognized a goodwill impairment of $11.0 million as of June 30, 2026. The goodwill impairment charges are reflected in the “Impairment loss” in our condensed consolidated statements of operations. The remaining goodwill value as of June 30, 2026 was $70.1 million. We will continue to monitor for any additional indicators of impairment in future periods. Goodwill is tested for impairment at least annually and between annual tests whenever there is an indication of impairment. Monroe Term Loan Exit Fee Liability Upon the amendment of our Credit Agreement with Monroe Capital, we entered into a fee arrangement with Monroe for the payment of an exit fee upon the occurrence of certain triggering events, which include a change in control, a debt refinancing, or the maturity of the Credit Agreement. The calculation of the exit fee is dependent upon the financial performance of our business at the time of the triggering event. The fee has a minimum value of $2.0 million, and there is not a limit to the maximum fee that could be paid. As of June 30, 2026, we believe the estimated fee to be paid approximates the minimum value of $2.0 million. As a result, we recorded the estimated exit fee as an other long-term liability, and the fee has been included in debt issuance costs which is amortized to interest expense over the remaining term of the Credit Agreement. The variable portion of the estimated fee, or the estimated amount exceeding the minimum value, will be reassessed each reporting period by taking into consideration the probability of the triggering event occurring and our estimated value at that time. Any changes to the estimated value of the variable portion of the fee will increase other long-term liabilities and increase our interest expense. Recent Accounting Pronouncements See Note 2 to our condensed consolidated financial statements. Off-Balance Sheet Arrangements We have no off-balance sheet debt or similar obligations. We have no transactions or obligations with related parties that are not disclosed, consolidated into, or reflected in our reported results of operations or financial position. We do not guarantee any third-party debt.