NINE 10-K & 10-Q changes, risk factors and insider trading

Risks Related to the Chapter 11 Cases

During the pendency of the Chapter 11 Cases, trading in our securities (including our common stock) is highly speculative and poses substantial risks, and the Plan contemplates that all shares of our common stock will be canceled for no consideration.

Trading prices for our securities may bear little or no relationship to the actual recovery, if any, by the holders of our securities in the Chapter 11 Cases. We expect that holders of our securities could experience a significant or complete loss on their investment, depending on the outcome of the Chapter 11 Cases. In particular, the Plan contemplates that all shares of our common stock will be canceled for no consideration. We have a substantial amount of indebtedness that is senior to the common stock in our capital structure, and the common stockholders will not receive any recovery unless the holders of more senior claims and interests, such as secured and unsecured indebtedness (which are not expected to recover in full under the Plan), are paid in full. Consequently, we expect that the common stock will become worthless.

We are subject to risks and uncertainties attendant to the bankruptcy process.

While we operate our business as debtors-in-possession, for the duration of the Chapter 11 Cases, our operations and our ability to develop and execute our business plan, as well as our continuation as a going concern, our financial condition and our liquidity, are subject to risks and uncertainties attendant to the bankruptcy process generally, which include the following:

•our ability to consummate a plan of reorganization with respect to the Chapter 11 Cases and the outcome of the Chapter 11 Cases generally;

•the high costs of operating our business while in Chapter 11 bankruptcy and related fees;

•our ability to maintain our relationships with our customers, creditors, suppliers, vendors, employees, and other third parties;

•our ability to operate within the restrictions and the liquidity limitations of the DIP ABL Facility and any related orders entered by the Bankruptcy Court in connection with the Chapter 11 Cases;

•our ability to meet the conditions related to the Exit ABL Facility and obtain sufficient financing to execute our business plan post-emergence;

•our ability to maintain contracts that are important to our operations;

•our ability to retain our current management team and to attract, motivate, and retain key employees; and

•the actions and decisions of our creditors and other third parties who have interests in the Chapter 11 Cases that may be inconsistent with our plans.

Even if and once the Plan is implemented, our operating results may be adversely affected by the possible reluctance of prospective customers, suppliers, vendors, and other counterparties to do business with a company that recently emerged from Chapter 11.

We cannot predict the amount of time spent in bankruptcy for the purpose of implementing the Plan, and a lengthy bankruptcy proceeding could have a material adverse effect on our business, financial condition, results of operations, and liquidity.

Although the prepackaged Plan is designed to minimize the duration of the Chapter 11 Cases, it is impossible to predict with certainty the amount of time that we may spend in bankruptcy. Our future results are dependent upon the successful implementation of the Plan. A lengthy bankruptcy proceeding could have a material adverse effect on our business, financial condition, results of operations, and liquidity. So long as the Chapter 11 Cases continue, our management will be required to spend a significant amount of time and effort managing the bankruptcy process rather than focusing exclusively on our business operations. A lengthy bankruptcy proceeding may also make it more difficult to retain management and other key personnel necessary to the success and growth of our business. Additionally, so long as the Chapter 11 Cases continue, we will be required to incur significant costs for professional fees and other expenses associated with the administration of the Chapter 11 Cases. If emergence is delayed, we may not have sufficient cash available to operate our business. In that case, we may need new or additional post-petition financing, which may increase the cost of consummating a plan of reorganization. There can be no assurance of the terms on which such financing may be available or if such financing will be available. Moreover, the disruption that the bankruptcy process could have on our business could increase with the length of time it takes to complete the Chapter 11 Cases because the Chapter 11 Cases limit the flexibility of our management in running our business. During the pendency of the Chapter 11 Cases, we need the prior approval of the Bankruptcy Court for transactions outside the ordinary course of business. Bankruptcy Court approval of non-ordinary course activities requires, among other things, preparation and filing of appropriate motions with the Bankruptcy Court and therefore may delay transactions and limit our ability to respond timely to certain events or take advantage of certain opportunities. Furthermore, in the event the Bankruptcy Court does not approve a proposed activity or transaction, we would be prevented from engaging in activities and transactions that we believe are beneficial to us. A lengthy bankruptcy proceeding also could increase both the probability and the magnitude of the adverse effects described in the above risk factor.

Material delays in, or negative events during the pendency of, the Chapter 11 Cases increase the risk of us being unable to reorganize our business and successfully emerge from bankruptcy and also increase our costs associated with the bankruptcy process.

Material delays in, or negative events during the pendency of, the Chapter 11 Cases could adversely affect our relationships with our customers, creditors, suppliers, vendors, employees, and other third parties, and our ability to negotiate favorable terms with them. While we expect to continue normal operations during the pendency of the Chapter 11 Cases, public perception of our continued viability may affect, among other things, the desire of new and existing customers, vendors, employees, or other third parties to enter into or continue their agreements or arrangements with us. The failure to maintain any of these important relationships could adversely affect our business, financial condition, and results of operations. Because of the public disclosure of the Chapter 11 Cases and concerns certain vendors may have about our liquidity, our ability to maintain normal credit terms with vendors may be impaired.

We may not be able to satisfy the conditions of the Plan or another Chapter 11 plan of reorganization.

On March 4, 2026, the Bankruptcy Court entered the Confirmation Order. While the proposed Plan was confirmed by the Bankruptcy Court and we expect for the Plan to become effective on March 5, 2026, it may not become effective because it is subject to the satisfaction of certain conditions precedent (some of which are beyond our control). There can be no assurance that such conditions will be satisfied and, therefore, that a plan of reorganization will become effective and that we will emerge from the Chapter 11 Cases as contemplated by a plan of reorganization. If the transactions contemplated by the Plan are not completed, it may become necessary to amend the Plan. The terms of any such amendment are uncertain and could result in material additional expense and result in material delays to the Chapter 11 Cases. As a result, there can be no assurance as to whether we will successfully reorganize and emerge from the Chapter 11 Cases or, if we do successfully reorganize, as to when we would emerge from the Chapter 11 Cases. If we are unable to successfully reorganize, we may not be able to continue our operations.

If the Restructuring Support Agreement is terminated, our ability to consummate the Plan may be materially adversely affected.

The Restructuring Support Agreement contains provisions that give the Consenting Stakeholders the ability to terminate the Restructuring Support Agreement if certain conditions are not satisfied or waived, including the failure to achieve certain milestones. Our ability to timely complete certain milestones is subject to risks and uncertainties that may be beyond our control. Termination of the Restructuring Support Agreement could result in protracted Chapter 11 Cases, the risks of which are discussed in the above risk factors. Furthermore, if the Restructuring Support Agreement is terminated, we may be unable to consummate the Plan, and there can be no assurance that we would be able to enter into a new plan or that any new plan would be as favorable to holders of claims as the Plan.

The Plan is based in large part upon assumptions and analyses developed by us. If these assumptions and analyses prove to be incorrect, we may not be able to achieve our stated goals and continue as a going concern.

The Plan will affect both our capital structure and the ownership, structure, and operation of our business and reflects assumptions and analyses based on our experience and perception of historical trends, current conditions, and expected future developments, as well as other factors that we consider appropriate under the circumstances. In addition, the Plan relies upon financial projections developed by us with the assistance of our financial advisor, including with respect to fees, revenues, debt service, and cash flow. Financial forecasts are necessarily speculative, and it is likely that one or more of the assumptions and estimates that are the basis of these financial forecasts will not be accurate. Whether actual future results and developments will be consistent with our expectations and assumptions depends on a number of factors, including, but not limited to, (i) our ability to maintain customers’, vendors’, suppliers’, and other third parties’ confidence in our viability as a continuing enterprise and to attract and retain sufficient business from them, (ii) our ability to retain key employees, and (iii) the overall strength and stability of general economic conditions. The failure of any of these factors could materially adversely affect the successful reorganization of our business and the value of the Company. Consequently, at this time, there can be no assurance that the results or developments that are contemplated in the Plan will occur or, even if they do occur, that they will have the anticipated effects on us or our businesses or operations. The failure of any such results or developments to materialize as anticipated could materially adversely affect the successful execution of the Plan.

Even if the Plan is consummated, we may not be able to achieve our stated goals and continue as a going concern.

Even if the Plan is consummated, we will continue to face a number of risks that are beyond our control, such as changes in economic conditions, changes in the financial markets, changes in investment values or the industry in general, changes in demand for our services and products, and increasing expenses. In addition, even after we emerge from bankruptcy, our having recently filed for bankruptcy could adversely affect our business and relationships with our creditors, customers, suppliers, vendors, employees, and other third parties. Due to uncertainties, many risks exist even after emergence from bankruptcy, including our ability to attract, motivate, and/or retain employees may be adversely affected and our ability to retain customers may be negatively impacted. The occurrence of one or more of these events could have a material and adverse effect on our operations, financial condition and reputation, and we cannot assure you that having been subject to bankruptcy proceedings will not adversely affect our operations in the future. As a result of these and other risks, we cannot guarantee that the Plan will achieve our stated goals.

Finally, even if our current debts are reduced or discharged through the Plan, we expect to have substantial indebtedness following consummation of the Plan, which may limit our operating flexibility going forward. Our indebtedness following consummation of the Plan will also subject us to certain restrictive covenants. Failure by us to comply with these covenants could result in an event of default that, if not cured or waived, could have a material adverse effect on us and result in amounts outstanding thereunder to be immediately due and payable. If we are unable to pay amounts due under our indebtedness or to fund other liquidity needs, such as future capital expenditures or contingent liabilities as a result of adverse business developments, including expenses related to future legal proceedings and governmental investigations or decreased revenues, as well as increased pricing pressures or otherwise, we may need to raise additional funds through one or more public or private debt or equity financings or other means to fund our business after the completion of the Chapter 11 Cases. Our access to additional capital may be limited, if it is available at all, particularly in light of the recent bankruptcy proceedings. Therefore, adequate funds may not be available when needed or may not be available on favorable terms. As a result of these and other risks, we cannot guarantee that the Plan will achieve our stated goals, and, thus, we cannot assure you of our ability to continue as a going concern after our expected emergence from bankruptcy.

Upon our emergence from bankruptcy, the composition of our board of directors (the “Board”) is expected to change.

Under the Plan, the composition of our Board is expected to change. The composition of the initial Board of the Reorganized Company will be determined by the Consenting Stakeholders. Any new directors are likely to have different backgrounds, experiences, and perspectives from those individuals who currently serve or previously served on the Board and thus may have different views on the issues that will determine our future. As a result, our future strategy and plans may differ materially from those of the past. There is no guarantee that the strategic initiatives and plans, whether current or future, of the Board will be implemented in a timely manner or at all and, consequently, there is no guarantee that the operational and financial objectives of the reconstituted Board will be achieved in a timely manner or at all.

The DIP ABL Facility may be insufficient to fund our business operations or may be unavailable to us if we do not comply with certain covenants.

There can be no assurance that the revenue generated by our business operations and the cash made available to us under the DIP ABL Facility will be sufficient to fund our operations. There can be no assurance that additional financing would be available or, if available, offered on terms that are acceptable to us or the Bankruptcy Court. If, for one or more reasons, we need to and are unable to obtain such additional financing, we may cease to continue as a going concern.

The DIP Loan and Security Agreement includes affirmative and negative covenants applicable to us, including a minimum excess availability of not less than $5.0 million. There can be no assurance that we will be able to comply with these covenants and meet our obligations as they become due or to comply with the other terms and conditions of the DIP Loan and Security Agreement. Any event of default under the DIP Loan and Security Agreement could imperil our ability to reorganize.

We may fail to enter into the Exit ABL Facility.

The DIP Loan and Security Agreement includes certain terms and conditions providing for the conversion of the DIP ABL Facility into the Exit ABL Facility on the Plan Effective Date or as soon as reasonably practicable thereafter. There can be no assurance that we will meet all such required terms and conditions.

We may be subject to claims that will not be discharged in the Chapter 11 Cases, which could have a material adverse effect on our business, cash flows, liquidity, financial condition, and results of operations.

The Bankruptcy Code provides that the confirmation of a plan of reorganization discharges a debtor from, among other things, substantially all debts arising prior to consummation of a plan of reorganization. Thus, while generally all claims against us that arose prior to the filing of the Chapter 11 Cases or before consummation of the Plan (i) would be subject to compromise and/or treatment under the Plan and/or (ii) would be discharged in accordance with the Bankruptcy Code and the terms of the Plan, certain exceptions may arise. Subject to the terms of the Plan and orders of the Bankruptcy Court, any claims not ultimately discharged pursuant to the Plan could be asserted against us and may have an adverse effect on our business, cash flows, liquidity, financial condition, and results of operations on a post-reorganization basis.

Changes to our capital structure may have a material adverse effect on existing and future debt and security holders and will adversely impact holders of our common stock.

Pursuant to the Plan, our post-bankruptcy capital structure will change significantly. The reorganization of our capital structure pursuant to the Plan includes exchanges of new debt or equity securities for our existing debt and claims against us. Such new debt will be issued at different interest rates, payment schedules and maturities than our existing debt securities. As contemplated under the terms of the Restructuring Support Agreement, no recovery is expected for holders of our common stock in Chapter 11 Cases. There can be no guarantees regarding the success of changes to our capital structure. Holders of our debt or of claims against us may find their holdings no longer have any value or are materially reduced in value, or they may be converted to equity and be diluted or may be modified or replaced by debt with a principal amount that is less than the outstanding principal amount, longer maturities, and reduced interest rates. Our existing equity securities will no longer have any value and holders of such existing equity securities will receive no recovery under the Plan. There can be no assurance that any new debt or equity securities will maintain their value at the time of issuance.

The negotiations regarding the Restructuring have consumed and will continue to consume a substantial portion of the time and attention of our management, which may have an adverse effect on our business and results of operations, and we may face increased levels of employee attrition.

Our management has spent, and continues to be required to spend, a significant amount of time and effort focusing on the Restructuring. This diversion of attention may have a material adverse effect on the conduct of our business, and, as a result, on our financial condition and results of operations, particularly if the Restructuring and the Chapter 11 Cases are protracted. During the pendency of the Restructuring, our employees will face considerable distraction and uncertainty, and we may experience increased levels of employee attrition. A loss of key personnel or material erosion of employee morale could have a materially adverse effect on our ability to meet customer expectations, thereby adversely affecting our business and results of operations. The failure to retain or attract members of our management team and other key personnel could impair our ability to execute our strategy and implement operational initiatives, thereby having a material adverse effect on our financial condition and results of operations. Likewise, we could experience losses of customers, vendors, suppliers, and aircraft lessors who may be concerned about our ongoing long-term viability.

Our long-term liquidity requirements and the adequacy of our capital resources are difficult to predict at this time.

We face uncertainty regarding the adequacy of our liquidity and capital resources. In addition to the cash requirements necessary to fund ongoing operations, we have incurred significant professional fees and other costs in connection with preparation for the Chapter 11 Cases and expect that we will continue to incur significant professional fees and costs throughout the Chapter 11 Cases. In addition, we must comply with the covenants of our DIP ABL Facility in order to continue to access our borrowings thereunder. We cannot assure that cash on hand, cash flow from operations and the DIP ABL Facility will be sufficient to continue to fund our operations and allow us to satisfy our obligations related to the Chapter 11 Cases until we are able to emerge from the Chapter 11 Cases.

Our liquidity, including our ability to meet our ongoing operational obligations, is dependent upon, among other things: (i) our ability to comply with the terms and conditions of the DIP Loan and Security Agreement, (ii) our ability to comply with the terms and conditions of any cash collateral order that may be entered by the Bankruptcy Court in connection with the Chapter 11 Cases, (iii) our ability to maintain adequate cash on hand, (iv) our ability to generate cash flow from operations, (v) our ability to consummate a Chapter 11 plan or other alternative restructuring transaction, and (vi) the cost, duration, and outcome of the Chapter 11 Cases.

Upon emergence from Chapter 11 bankruptcy, the Reorganized Company will be subject to risks related to its substantial indebtedness.

On the Plan Effective Date, on a consolidated basis, it is expected that the Reorganized Company will have total secured, outstanding indebtedness of approximately $82.6 million, which is expected to consist of borrowings under the Exit ABL Facility. This level of expected indebtedness and the funds required to service such debt could, among other things, make it difficult for the Reorganized Company to satisfy its obligations under such indebtedness, increasing the risk that it may default on such debt obligations. A range of economic, competitive, business, and industry factors will affect the Reorganized Company’s future financial performance and, as a result, its ability to generate cash flow from operations and to pay its debt. Many of these factors are beyond its control. If the Reorganized Company does not generate enough cash flow from operations to satisfy its debt obligations, it may have to undertake alternative financing plans, such as refinancing or restructuring debt, selling assets, reducing or delaying capital investments, or seeking to raise additional capital. It cannot be assured, however, that undertaking alternative financing plans, if necessary, would be possible on commercially reasonable terms, or at all, and allow the Reorganized Company to meet its debt obligations.

The expected borrowings under the Exit ABL Facility could have significant adverse consequences on our business and future prospects, including in the following ways:

Borrowings under the Exit ABL Facility will bear interest at variable rates, which will expose us to interest rate risk. Under the Exit ABL Facility, if interest rates increased, our debt service obligations on the variable rate indebtedness would increase even though the amount borrowed remains the same, and our net income and cash available to finance our operations and other business activities would decrease.

Restrictions in the Exit ABL Facility could limit our growth and our ability to engage in certain activities.

The Exit ABL Facility will have restrictive covenants that could restrict our ability to finance future operations or capital needs or to expand or pursue our business activities. For example, it will contain restrictive covenants that limit our ability to, among other things:

The restrictions in the Exit ABL Facility could also impact our ability to obtain capital to withstand a downturn in our business or the economy in general, or to otherwise conduct necessary corporate activities. We may also be prevented from taking advantage of business opportunities that arise because of the limitations that the restrictive covenants under our debt arrangements may impose on us.

Our actual financial results after emergence from bankruptcy may not be comparable to our projections filed with the Bankruptcy Court in the course of the Chapter 11 Cases.

In connection with the disclosure statement relating to the Plan that we filed with the Bankruptcy Court, we prepared projected financial information to demonstrate to the Bankruptcy Court the feasibility of the Plan and our ability to continue operations upon our emergence from the Chapter 11 Cases. Those projections were prepared solely for the purpose of the Chapter 11 Cases and have not been and will not be updated and should not be relied upon by investors. At the time they were prepared, the projections reflected numerous assumptions concerning our anticipated future performance with respect to then prevailing and anticipated market and economic conditions that were and remain beyond our control and that may not materialize. We have not updated the projections prepared solely for the purpose of the Chapter 11 Cases or the assumptions on which they were based after our emergence. Projections are inherently subject to substantial and numerous uncertainties and to a wide variety of significant business, economic and competitive risks, and the assumptions underlying the projections or valuation estimates may prove to be wrong in material respects. Actual results may vary significantly from those contemplated by the projections. As a result, investors should not rely on these projections.

As a result of the Chapter 11 Cases, our financial results may not reflect historical trends, and our historical financial results may not be indicative of our future financial performance.

During the Chapter 11 Cases, we have incurred and will continue to incur significant fees and expenses. As a result, our historical financial performance is likely not indicative of our financial performance after the Petition Date. In addition, if we emerge from Chapter 11, the amounts reported in subsequent consolidated financial statements may materially change relative to historical consolidated financial statements due to, among other things, cancellation of indebtedness. We also expect to adopt fresh start accounting upon our emergence from Chapter 11, in which case our assets and liabilities will be recorded at fair value as of the fresh start reporting date. These fair values may differ materially from the recorded values of assets and liabilities on our historical consolidated balance sheets, and as a result, our financial condition and results of operations following our emergence from Chapter 11 may not be comparable to the financial condition and results of operations reflected in our historical financial statements.

We may experience increased levels of employee attrition as a result of the Chapter 11 Cases.

As a result of the Chapter 11 Cases, we may experience increased levels of employee attrition, and our employees have faced, and likely will continue to face, considerable distraction and uncertainty. A loss of key personnel or material erosion of employee morale could adversely affect our business and results of operations. Our ability to engage, motivate and retain key employees or take other measures intended to motivate and incentivize key employees to remain with us through the pendency of the Chapter 11 Cases may be limited by restrictions on implementation of incentive programs under the Bankruptcy Code. The loss of services of members of our management team and other employees could impair our ability to execute our strategy and implement operational initiatives, which would be likely to have a material adverse effect on our business, financial condition and results of operations.

Our ability to use net operating loss carryforwards (“NOLs”) may become subject to limitation, or may be reduced or eliminated, in connection with the implementation of the Plan. The Bankruptcy Court has entered an order that is designed to protect our NOLs until the Plan is consummated.

Under U.S. federal income tax law, a corporation is generally permitted to deduct from taxable income NOLs carried forward from prior years. To date, we have generated a significant amount of U.S. federal NOLs.

Our ability to utilize our NOLs to offset future taxable income and to reduce our U.S. federal income tax liability is subject to certain requirements and restrictions. If a corporation with NOLs undergoes an “ownership change” within the meaning of Section 382 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), then such corporation’s use of such “pre-change” NOLs to offset income incurred following such ownership change generally will be subject to an annual limitation specified in Section 382 of the Code. Such limitation also may apply to certain losses or deductions that are “built-in” (i.e., attributable to periods prior to the ownership change, but not yet taken into account for tax purposes) as of the date of the ownership change that are subsequently recognized. An ownership change generally occurs when there is either (i) a shift in ownership involving one or more “5% shareholders,” or (ii) an “equity structure shift” and, as a result, the percentage of stock of the corporation owned by one or more 5% shareholders (based on value) has increased by more than 50 percentage points over the lowest percentage of stock of the corporation owned by such shareholders during the “testing period” (generally the three years preceding the testing date). If we experience an “ownership change,” our ability to use our NOLs may be substantially limited, which could increase the taxes paid by us. Although we are taking steps to limit risk of an ownership change before consummation of the Plan, there can be no assurance that these steps will be successful. Moreover, we expect to undergo an ownership change under Section 382 of the Code in connection with the consummation of the Plan.

Current Bankruptcy Proceedings

On February 1, 2026, the Company Parties filed the Chapter 11 Cases in the Bankruptcy Court to implement the prepackaged Plan to effectuate a financial restructuring of the Company Parties’ existing indebtedness. Prior to filing the Chapter 11 Cases, on February 1, 2026, the Company Parties entered into the Restructuring Support Agreement with the Consenting Stakeholders, which includes certain holders of the 2028 Notes and the Prepetition ABL Lenders. Pursuant to the Restructuring Support Agreement, the Consenting Stakeholders agreed, subject to certain terms and conditions, to support the Plan. The material terms of the Plan include, among other things:

•the Prepetition ABL Lenders providing the Company Parties with the DIP ABL Facility, including a roll-up or refinancing of all obligations under the Prepetition ABL Loan and Security Agreement, which will, upon the satisfaction of customary closing conditions, convert into the Exit ABL Facility on the Plan Effective Date or as soon as reasonably practicable thereafter;

•on the Plan Effective Date, the Reorganized Company issuing 100% of a single class of common equity interests to the holders of the 2028 Notes and the 2028 Notes being canceled; and

•on the Plan Effective Date, our currently existing common stock being canceled.

On February 3, 2026, the Bankruptcy Court, on an interim basis, approved the DIP ABL Facility, and the Company Parties entered into the DIP Loan and Security Agreement with the DIP Agent and the DIP Lenders. The DIP ABL Facility is a senior secured super-priority asset-based debtor-in-possession credit facility consisting of up to $125.0 million in aggregate principal amount of revolving credit commitments, including a roll-up or refinancing of all obligations under the Prepetition ABL Loan and Security Agreement. The DIP Loan and Security Agreement includes certain terms and conditions (including the Plan becoming effective) providing for the conversion of the DIP ABL Facility into an exit senior secured asset-based revolving credit facility consisting of up to $135.0 million in aggregate principal amount of revolving commitments on the Plan Effective Date or as soon as reasonably practicable thereafter.

Since the Petition Date, the Company Parties have been operating their businesses as debtors-in-possession under the jurisdiction of the Bankruptcy Court in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. The Company Parties have requested and obtained relief from the Bankruptcy Court that enables them to continue their ordinary course operations during the Chapter 11 Cases and uphold their commitments to their stakeholders, including employees, customers, and vendors, during the restructuring process, subject to the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code.

Subject to certain exceptions under the Bankruptcy Code, pursuant to Section 362 of the Bankruptcy Code, the filing of the Chapter 11 Cases automatically stayed the continuation of most legal proceedings and the filing of other actions against or on behalf of the Company Parties or their property to recover on, collect or secure a claim arising prior to the Petition Date or to exercise control over property of the Company Parties’ bankruptcy estate unless and until the Bankruptcy Court modifies or lifts the automatic stay as to any such claim. In particular, although the filing of the Chapter 11 Cases constituted an event of default that accelerated our obligations under the indenture governing the 2028 Notes (the “Indenture”) and the Prepetition ABL Loan and Security Agreement (together with the Indenture, the “Debt Instruments”) and caused the principal and interest due thereunder to be immediately due and payable, any efforts to enforce such payment obligations are automatically stayed as a result of the Chapter 11 Cases, and the creditors’ rights of enforcement in respect of the Debt Instruments are subject to the applicable provisions of the Bankruptcy Code. Notwithstanding the general application of the automatic stay described above and other protections afforded by the Bankruptcy Code, governmental authorities may determine to continue actions brought under their police and regulatory powers.

On March 4, 2026, the Bankruptcy Court entered the Confirmation Order. The Company Parties anticipate emerging from the Chapter 11 Cases, and the Plan Effective Date occurring, on March 5, 2026; however, consummation of the Restructuring pursuant to the Plan is subject to the satisfaction or waiver of certain conditions set forth in the Plan. Accordingly, no assurance can be given that such transactions will be consummated. See “Risk Factors – Risks Related to the Chapter 11 Cases” in Item 1A of Part I of this Annual Report for a discussion of the risks related to the Chapter 11 Cases.

As for oil prices, towards the end of 2024, we began to see WTI oil prices decline, which was exacerbated by the announcement of new tariffs by the Trump Administration in April 2025 and OPEC communicating they would be increasing production. In the second quarter of 2025, WTI price fell below $60 per barrel for the first time in four years. Because of the decline in oil prices, as well as increased costs and market uncertainty, our customers began to decrease activity. According to Baker Hughes, from the end of the first quarter of 2025 through the end of 2025, 46 rigs, most of which were in the Permian Basin, came out of the U.S. market, a decline of approximately 8% compared to the number of rigs at the end of the first quarter of 2025. During the first quarter of 2025, the average WTI price was $71.78 per barrel as compared to $59.62 per barrel in the fourth quarter of 2025, a decline of approximately 17%.

Due to the spot-market nature of our business, our revenue and profitability generally move very similarly to U.S. rig, frac, and stage counts, and starting in the second quarter of 2025, we began to experience activity declines as well as receive pricing pressure across all of our service lines, especially in the oil-levered basins. During the third quarter and continuing into the fourth quarter of 2025, we had full quarter realizations of these activity declines, as well as continued pricing pressure on our services, which negatively impacted both revenue and earnings. In addition to negative market impacts, our completion tools division had market share losses, which were due mostly to customer consolidation and a change in certain of our customers’ completion designs, during the quarter that negatively impacted revenue and earnings. Lastly, as anticipated, during the fourth quarter we had typical seasonal slowdowns related to weather, holidays and budget exhaustion, which negatively impacted revenue and earnings.

The macro-outlook is uncertain, especially with recent geopolitical events, but with what we know today, we anticipate that U.S. activity levels will be relatively flat compared to 2025 exit levels. For the first quarter, we have seen operational inefficiencies and downtime due to weather and frac delays. Additionally, during the first quarter, we will incur costs related to our restructuring. Because of this, we anticipate first quarter 2026 revenue and earnings will be down compared to the fourth quarter of 2025.

Revenues increased $7.8 million, or 1%, to $561.9 million in 2025. The increase in comparison to 2024 was primarily due to an increase in cementing revenue (including pump downs) of $11.3 million, or 6%, as total cement job count increased 8%. In addition, wireline revenue increased $4.5 million, or 4%, as total completed wireline stages increased 23%, which was partially offset by pricing pressure, in comparison to 2024. The overall increase in revenue was partially offset by a decrease in coiled tubing revenue of $6.3 million, or 6%, as total days worked decreased 6%, in comparison to 2024. The overall increase was also partially offset by a decrease in tools revenue of $1.7 million, or 1% due to a change in product mix in comparison to 2024.

We recorded approximately $11.2 million in amortization of intangibles expense (comprised of technology and customer relationships) in both 2025 and 2024.

(Gain) Loss on Sale of Property and Equipment

We recorded a gain on sale of property and equipment of $2.1 million in 2025 compared to a $0.3 million loss on sale of equipment in 2024. The $2.4 million change was primarily attributed to gains on the disposal of certain coiled tubing equipment in 2025 that did not occur in 2024.

Non-operating expenses increased $4.0 million to $53.8 million in 2025. The increase was primarily attributed to a $1.9 million increase in the amortization of deferred financing costs associated with certain debt instruments in comparison to 2024. The increase was also partly attributed to the write-off of $1.5 million of deferred financing costs associated with the 2018 ABL Credit Facility (as described and defined in Note 9 – Debt Obligations) in 2025 that did not occur in 2024, as well as an increase of $0.5 million in interest expense associated with revolving credit facilities in comparison to 2024.

(2) For the year ended December 31, 2025, amounts primarily relate to the Chapter 11 Cases, including $4.5 million in employee retention payments approved by the Board and $2.7 million in professional fees and expenses. For the year ended December 31, 2024, amounts primarily relate to professional fees and expenses in connection with procurement and supply chain restructuring and other initiatives.

(1) For the year ended December 31, 2025, amounts primarily relate to the Chapter 11 Cases, including $4.5 million in employee retention payments approved by the Board and $2.7 million in professional fees and expenses. For the year ended December 31, 2024, amounts primarily relate to professional fees and expenses in connection with procurement and supply chain restructuring and other initiatives.

The filing of the Chapter 11 Cases constituted events of default that accelerated our obligations related to the 2028 Notes and the Prepetition ABL Facility (as defined and described in Note 9 – Debt Obligations). As a result, the principal and interest due under our outstanding 2028 Notes and Prepetition ABL Facility became immediately due and payable. However, any efforts to enforce such payment obligations are automatically stayed as a result of the filing of the Chapter 11 Cases, and the creditors’ rights of enforcement are subject to the applicable provisions of the Bankruptcy Code. We do not have sufficient cash on hand or available liquidity to repay such outstanding debt. As of December 31, 2025, we had $18.4 million of cash and cash equivalents and $21.0 million of availability under the Prepetition ABL Facility, which resulted in a total liquidity position of $39.4 million.

Ability to Continue as a Going Concern

As a result of the current bankruptcy proceedings and our financial condition, substantial doubt exists that we will be able to continue as a going concern for one year from the date of this Annual Report. The consolidated financial statements in Part II, Item 8 of this Annual Report were prepared on a going concern basis of accounting, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. However, as a result of the Chapter 11 Cases, the realization of assets and the satisfaction of liabilities are subject to uncertainty. Our liquidity requirements and the availability to us of adequate capital resources are difficult to predict at this time. In addition, we have incurred, and continue to incur, material reorganization and administrative expenses in connection with the Chapter 11 Cases and the Plan. Notwithstanding the protections available to us under the Bankruptcy Code, if our future sources of liquidity are insufficient, we will face substantial liquidity constraints and will likely be required to significantly reduce, delay, or eliminate capital expenditures, implement further cost reductions, seek other financing alternatives or cease operations as a going concern and liquidate. We can give no assurance that we will be able to secure additional sources of funds to support our operations, or, if such funds are available to us, that such additional financing will be sufficient to meet our needs. Based on such evaluation and management’s current plans, which are subject to change, management believes there is substantial doubt about our ability to continue as a going concern.

Our ability to continue as a going concern is contingent upon our ability to successfully implement the Plan and successfully emerge from Chapter 11, and generate sufficient liquidity to meet our obligations and operating needs, among other factors. The consolidated financial statements in Part II, Item 8 of this Annual Report do not include any adjustments that might be necessary should we be unable to continue as a going concern or as a consequence of the Chapter 11 Cases. Further, any plan of reorganization could materially change the amount of assets and liabilities reported in the accompanying consolidated financial statements. There are substantial risks and uncertainties related to (i) our ability to successfully emerge from the Chapter 11 Cases, and (ii) the effects of disruption from the Chapter 11 Cases making it more difficult to maintain business, financing, and operational relationships. For more information about the risks and uncertainties related to the Chapter 11 Cases, see “Risk Factors – Risks Related to the Chapter 11 Cases” in Item 1A of Part I of this Annual Report.

Capital Resources Prior to and During the Chapter 11 Cases

At December 31, 2025, we had $63.3 million of outstanding borrowings under the Prepetition ABL Facility. We also had $300.0 million aggregate principal amount of 2028 Notes outstanding as of December 31, 2025. For additional information on the Prepetition ABL Facility and the 2028 Notes, see Note 9 – Debt Obligations included in Item 8 of Part II of this Annual Report. As noted above, the filing of the Chapter 11 Cases constituted an event of default that accelerated our obligations related to the 2028 Notes and the Prepetition ABL Facility. As a result, the principal and interest due under our outstanding 2028 Notes and Prepetition ABL Facility became immediately due and payable. However, any efforts to enforce such payment obligations are automatically stayed as a result of the filing of the Chapter 11 Cases, and the creditors’ rights of enforcement are subject to the applicable provisions of the Bankruptcy Code.

On February 3, 2026, the Bankruptcy Court, on an interim basis, approved the DIP ABL Facility, and the Company Parties entered into the DIP Loan and Security Agreement with the DIP Agent and the DIP Lenders, which provides the Company Parties with a senior secured super-priority asset-based debtor-in-possession credit facility consisting of up to $125.0 million in aggregate principal amount (the “DIP Maximum Revolving Facility Amount”) of revolving credit commitments, including a roll-up or refinancing of all obligations under the Prepetition ABL Loan and Security Agreement (which totaled approximately $67.3 million as of February 3, 2026). A portion of the DIP ABL Facility not in excess of $5.0 million is available for the issuance of standby letters of credit. Our obligations under the DIP ABL Facility are secured by a first-priority security interest in substantially all our tangible and intangible assets and all of our current domestic and Canadian subsidiaries, subject to, among other things, customary bankruptcy-related exceptions including certain carve-outs for administrative and professional fee payments arising in connection with the Chapter 11 Cases.

Borrowings under the DIP ABL Facility are subject to a borrowing base. The outstanding balance of the borrowings under the DIP ABL Facility may not exceed in the aggregate at any time the lesser of (i) the DIP Maximum Revolving Facility Amount reduced by certain customary reserves and (ii) the borrowing base, which is calculated on the basis of eligible accounts and inventory. In particular, the borrowing base is equal to (a) 92.5% of the aggregate amount of eligible U.S. and Canadian billed accounts receivable, plus (b) the lesser of (x) 85% of the aggregate amount of eligible U.S. and Canadian unbilled accounts receivable and (y) $6.0 million, plus (c) the lesser of (x) 50% of the aggregate amount of eligible billed non-U.S. and non-Canadian accounts receivable and (y) $3.0 million, plus (d) the lower of cost or market value of eligible inventory, multiplied by the lessor of (x) 70% and (y) 85% of the appraised net orderly liquidation value divided by the book value in respect of such inventory, and, in the case of inventory consisting raw materials, not to exceed a maximum sublimit of $1.0 million, plus (e) the lesser of (x) $10.0 million and (y) an amount equal to 10% of the borrowing base, minus (f) the aggregate amount of reserves, if any, established by the DIP Agent.

Borrowings under the DIP ABL Facility bear interest at a per annum rate equal to the term-specific Secured Overnight Financing Rate (“SOFR”) for an interest period of one month, subject to a 1.50% floor, plus an applicable margin of 4.00%.

The maturity date of the DIP ABL Facility is the earlier of the Plan Effective Date and 120 days after the Petition Date, subject to earlier termination upon the occurrence of certain events specified in the DIP Loan and Security Agreement. The proceeds of the DIP ABL Facility are for (i) working capital and corporate purposes of the Company Parties, (ii) bankruptcy-related costs and expenses in respect of the Chapter 11 Cases, (iii) costs and expenses related to the DIP ABL Facility, and (iv) refinancing of obligations under the Prepetition ABL Loan and Security Agreement.

The DIP Loan and Security Agreement contains certain representations and warranties, events of default, and various affirmative and negative covenants that are customary for debtor-in-possession loan agreements of this type, including limitations on indebtedness, liens, mergers, consolidations, liquidations and dissolutions, sales of assets, dividends and other restricted payments and investments (including acquisitions). In addition, the DIP Loan and Security Agreement contains certain financial covenants, including a minimum excess availability of not less than $5.0 million.

Except as set forth in “Risk Factors” in Item 1A of Part II of our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2026, there have been no material changes to the risk factors disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025. For a detailed discussion of known material factors which could materially affect our business, financial condition, or future results, refer to “Risk Factors” in Item 1A of Part I of our Annual Report on Form 10-K for the year ended December 31, 2025 and in Item 1A of Part II of our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2026.

Our business depends, to a significant extent, on the level of unconventional resource development activity and corresponding capital spending of oil and natural gas companies. These activity and spending levels are strongly influenced by current and expected oil and natural gas prices. In recent years, commodity prices have been extremely volatile and unpredictable. During the second quarter of 2026, oil prices remained elevated relative to 2025 (during which the average West Texas Intermediate (“WTI”) price was $65.39 per barrel), driven in large part by geopolitical events and uncertainty surrounding global supply. WTI prices averaged $100.32 and $102.13 per barrel for April 2026 and May 2026, respectively; however, WTI prices declined to an average of $84.81 per barrel for June 2026 following the memorandum of understanding between the U.S. and Iran to end the conflict and reopen the Strait of Hormuz. Despite the elevated oil price environment during much of the second quarter of 2026, U.S. activity levels increased only modestly. At the end of the first quarter of 2026 (during which the average WTI price was $72.74 per barrel), the U.S. rig count was 543 rigs, and at the end of the second quarter of 2026, the U.S. rig count was 573 rigs. The increase in rig count during the second quarter was concentrated primarily in the latter part of the quarter, and operators continued to remain disciplined with capital spending despite higher commodity prices.

Due to the spot-market nature of our business, revenue and profitability generally move closely with U.S. rig, frac, and stage counts. While industry activity improved modestly during the second quarter of 2026 compared to the first quarter of 2026, our profitability was negatively impacted by significant margin compression within our coiled tubing business. During the quarter, two of our large-diameter coiled tubing units were taken out of service due to maintenance-related issues. At the same time, we experienced meaningful inflationary pressures across several cost categories, including consumables, labor, and repairs and maintenance. Our cementing business also faced inflationary cost pressures during the quarter, which further impacted margins.

The macro-outlook is uncertain, especially with recent geopolitical events. With what we know today, we anticipate that the average U.S. rig count during the third quarter of 2026 will be relatively flat to slightly up compared to the second quarter, with any incremental activity likely to be measured and dependent on the sustainability of commodity prices. One of our coiled tubing units that was out of service returned to service at the beginning of the third quarter; however, the second unit remains under repair and is expected to return near the end of the year. With the sustained revenue loss from this unit, combined with cost inflation, we expect third quarter revenue and profitability to be flat to modestly lower compared to the second quarter of 2026.

Results for the 2026 Successor Quarter and the 2025 Predecessor Quarter

For the three months ended June 30, 2026 (the “2026 Successor Quarter”), revenues were $141.8 million. For the 2026 Successor Quarter, total cementing revenue (including pump downs) was $55.3 million, with utilization at 96%; tools revenue was $37.1 million, with completion tools stages of approximately 28,000 stages; coiled tubing revenue was $26.4 million, with total days worked of approximately 785 days; and wireline revenue was $23.0 million, with total completed wireline stages of approximately 6,400 stages.

For the three months ended June 30, 2025 (the “2025 Predecessor Quarter”), revenues were $147.3 million. For the 2025 Predecessor Quarter, total cementing revenue (including pump downs) was $52.2 million, with utilization at 88%; tools revenue was $37.0 million, with completion tools stages of approximately 30,300; wireline revenue was $33.0 million, with total completed wireline stages of approximately 8,600 stages; and coiled tubing revenue was $25.1 million, with total days worked of approximately 515 days.

Cost of Revenues (Exclusive of Depreciation and Amortization)

Cost of revenues for the 2026 Successor Quarter was $121.9 million. These costs included $67.0 million in costs related to materials installed and consumed while performing services, $38.0 million in employee-related costs, and $16.9 million in vehicle, repair and maintenance, travel, facility, and other costs.

Cost of revenues for the 2025 Predecessor Quarter was $121.4 million. These costs included $65.8 million in costs related to materials installed and consumed while performing services, $40.0 million in employee-related costs, and $15.6 million in vehicle, repair and maintenance, travel, facility, and other costs.

General and Administrative Expenses

General and administrative expenses for the 2026 Successor Quarter was $15.6 million. These expenses included $9.4 million in employee-related costs, $3.9 million in professional fees, and $2.3 million in communications, vehicle, travel, and other costs.

General and administrative expenses for the 2025 Predecessor Quarter was $13.9 million. These expenses primarily included $9.5 million in employee-related costs, $1.9 million in professional fees, and $2.5 million in communications, vehicle, travel, marketing, and other costs.

Depreciation

Depreciation expense for the 2026 Successor Quarter and the 2025 Predecessor Quarter was $7.0 million and $5.8 million, respectively. As a result of our revaluation of our property and equipment due to the application of fresh start accounting, depreciation expense increased during the 2026 Successor Quarter in comparison to the 2025 Predecessor Quarter.

Amortization of Intangibles

Amortization expense for the 2026 Successor Quarter and the 2025 Predecessor Quarter was $0.2 million and $2.8 million, respectively. As a result of our revaluation of our intangible assets due to the application of fresh start accounting, amortization expense decreased during the 2026 Successor Quarter in comparison to the 2025 Predecessor Quarter.

Interest Expense

For the 2026 Successor Quarter, we recorded $1.9 million in interest expense primarily related to interest associated with the Exit ABL Facility.

For the 2025 Predecessor Quarter, we recorded $14.7 million in interest expense, which was primarily related to $11.7 million in interest and amortized deferred financing costs associated with the 2028 Notes, $1.5 million in the write-off of unamortized deferred financing costs associated with a prior revolving credit facility, and $1.4 million in interest and amortized deferred financing costs associated with revolving credit facilities.

Provision (Benefit) for Income Taxes

We recorded a $0.4 million income tax provision for the 2026 Successor Quarter and a $0.5 million income tax benefit for the 2025 Predecessor Quarter. The $0.4 million income tax provision for the 2026 Successor Quarter was primarily related to our income tax position and state foreign tax jurisdictions. The $0.5 million income tax benefit for the 2025 Predecessor Quarter was primarily related to a discrete income tax benefit.

Net Income (Loss)

For the 2026 Successor Quarter and the 2025 Predecessor Quarter, we recorded a net loss of $4.9 million and a net loss of $10.4 million, respectively. These net losses were primarily due to the revenues and expenses discussed above.

We recorded a $0.3 million income tax provision for the 2026 Successor Period, a $0.1 million income tax provision for the 2026 Predecessor Period, and a $0.3 million income tax benefit for the 2025 Predecessor Period. The $0.3 million income tax provision for the 2026 Successor Period and the $0.1 million income tax provision for the 2026 Predecessor Period was primarily related to our income tax position and state foreign tax jurisdictions. The $0.3 million income tax benefit for the 2025 Predecessor Period was primarily related to a discrete income tax benefit.