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

The increasing demand for faster residential internet bandwidth driven by working and learning from home since the outbreak of COVID-19 has increased the availability of capital to fund FTTH and cable overbuilds. Approximately 28%30% of the passings in our incumbent broadband business currently have aan FTTH or cable competitor,competitor. including 23%All of our Glo Fiber passings have an incumbent cable passingscompetitor and 100%approximately of12% ourhave FTTH passings in our Ohioan incumbent telephone market.competitor with FTTH services. Wireless and satellite providers arehave also enteringentered the market for broadband. In some areas, wireless providers have partnered with broadband providers to offer a converged bundle of broadband and wireless. If competitive overbuilds increase in our incumbent cable or Glo Fiber service areas, more of our subscribers may select other providers’ offerings based on price, bandwidth speeds, capabilities or personal preference. Additionally, a recent trend towards convergence of wireless and fiber broadband service offerings has started consolidation in the FTTH segment. If this trend continues, mergers, acquisitions and strategic alliances with large wireless carriers could also increase the level of competition we face. Further, if new competitors offer lower prices, we may need to offer more value to retain our customerscustomers, driving lower revenue per subscriber.

Additionally, our hybrid fiber coaxialHFC cable network will require upgrades in the future in order to meet expected demand from customers and to maintain network parity with potential FTTH competitors. These upgrades will require significant capital investment and management oversight over the next five years.oversight. If we are unable to complete these upgrades, we may lose customers to our competitors and our Incumbent Broadband revenues could be adversely affected in the future.

We have experienced reductions in the number of access lines and DSL subscriptions in our RLEC marketsmarkets, and we anticipate that the long-term trend may continue. Further, competitors in our RLEC markets may receive support under the ConnectBroadband AmericaEquity, Fund, Rural Development Opportunity Fund, American Rescue Plant Act or Infrastructure InvestmentAccess, and JobsDeployment Act(“BEAD”) Program to build broadband facilities to unserved homes that do not meet the minimum broadband speeds in some areas already served by our DSL networks. As a result, new competitors may overbuild these markets and our RLEC revenue decline may accelerate.

Additionally, we must obtain pole attachment agreements, franchise agreements, construction permits and other regulatory approvals to commence operations in these communities. Furthermore, our business growth strategy requires us to leverage third party partners to assist with our planned construction and development of our FTTH networks in new markets. These third party contractors are currently in high demand. Delays in entering into pole attachment agreements, obtaining franchise agreements, obtaining construction permits, procuring needed contractors, materials or supplies at a reasonable cost, and conducting the construction itself could adversely impact our scheduled construction plans and, ultimately, our expansion strategy. Furthermore, attaching the Company’s cables to utility poles governed by the pole attachment agreements requires significant coordination with the owners of the utility poles which may result in delays if the owners of the utility poles cannot dedicate sufficient resources to assist in the attachment process. Similarly, Shentel must coordinate with local utility service providers when installing cables underground to ensure all current infrastructure, such as existing cabling or gas lines, is properly located. Delays related to locate services may result in delays in Shentel’s overall expansion strategy.

Difficulty in obtaining necessary resources may also adversely affect our abilitygo-to-market tostrategy as we expand into new marketsmarkets, as could our ability to adequately market a new brand to customers unfamiliar to us as we expand to markets where we do not currently operate. We may face resistance from competitors who are already in markets we wish to enter. Incumbent telephone competitors may choose to overbuild their copper networks with fiber after we invest. If our expectations regarding our ability to attract customers in these communities are not met, or if the capital requirements to complete the network investment or the time required to attract our expected level of customers are incorrect, our financial performance and returns on investment may be negatively impacted.

Our systems depend on physical facilities, including transmission equipment and miles of fiber and cable. Significant portions of those physical facilities occupy land in the public rights-of-way and are subject to local ordinances and governmental regulations. Other portions occupy private property under express or implied easements, and many miles of the cable are attached to utility poles governed by pole attachment agreements. No assurances can be given that we will be able to maintain and use our facilities in their current locations and at their current costs. Changes in governmental regulations or changes in these relationships could have a material adverse effect on our business and our results of operations. Additionally, lapses in U.S. federal government funding, such as the government shutdown experienced in the U.S. in October 2025, and other disruptions to government agency operations may have an adverse effect on our business and results of operations.

The telecommunications industry is experiencing significant technological change, evolving industry standards, ongoing improvements in the capacity and quality of digital technology, shorter development cycles for new products and enhancements and changes in end-user requirements and preferences. Technological advances, industry changes and changes in the regulatory environment could cause the technology we use to become obsolete. We may not be able to respond to such changes and implement new technology on a timely basis or at an acceptable cost. Additionally, we may be required to select one developing or new technology over another and may not choose the technology that is ultimately determined to be the most economic, efficient or attractive to customers. We may also encounter difficulties in implementing new technologies, products and services and may encounter disruptions in service as a result. Additionally, as adoption of Artificial Intelligence (AI) technologies becomes a critical component of business, our pace of adoption for AI could impact our cost structure relative to peers. Should we be slow or unsuccessful in leveraging AI appropriately, our marginoperating positionmargins may be lower relative to peers. We have started leveraging AI in our operations and, as a result, introduce new risks associated with AI to our operations including AI vulnerabilities and dependence on AI models which could become faulty, biased or operationally unsound if not properly monitored and adjusted. If improperly used or implemented, issues with AI could negatively impact customer interactions or operational efficiency. As a result, AI could negatively impact our financial performance may be negatively impacted.performance.

Our programming costs continue to increaseincrease, and our relative size limits our ability to negotiate more favorable terms, which may have an adverse effect on our business and our results of operations.

As part of our business strategy, we regularly evaluate opportunities to enhance the value of the Company by pursuing acquisitions of other businesses. Although we remain subject to financial and other covenants in our creditfinancing agreementarrangements that may limit our ability to pursue certain strategic opportunities,opportunities without lender approval, we intend to continue to evaluate and, when appropriate, pursue strategic acquisition opportunities as they arise. We cannot provide any assurance, however, with respect to the timing, likelihood, size or financial effect of any potential transaction involving the Company, as we may not be successful in identifying and consummating any acquisition or in integrating any newly acquired business into our operations.

A disruption of our information technology infrastructure or overall operations, or the infrastructure or operations of certain vendors who provide information technology or overall operations services to us or our customers, could be caused by a natural disaster, energypower orfailure, manufacturing failure,defect, telecommunications system failure, ransomware attack, cybersecurity attack,attack or intrusion, terrorist attack, intrusion or incident or defective or improperly installed new or upgraded business management systems.systems, or construction failure, including but not limited to a utility line strike. Although we make significant efforts to maintain the security and integrity of the Company’s operations and information technology infrastructure, there can be no assurance that our security efforts, business impact planning and disaster recovery measures will be effective or that attempted security breaches or catastrophic disruptions would not be successful or damaging, especially in light of the growing sophistication of cyber-attacks and intrusions sponsored by state or other interests. Portions of our information technology infrastructure also may experience interruptions, delays or cessations of service or produce errors in connection with systems integration or migration work that takes place from time to time. In the event of any such disruption, we may be unable to conduct our business in the normal course. Moreover, our business involves the processing, storage and transmission of data, which would also be negatively affected by such an event. A significant disruption of our information technology infrastructure or operations could alsoresult causein usdamage to loseour reputation and credibility, customer dissatisfaction and ultimately a loss of customers andor revenue. Significant loss of customers or revenue, particularlyor duringsignificant aincrease periodin costs of heavyserving demandthose forcustomers, could adversely affect our services.growth, financial condition and results of operations. We also could incur significant expense in repairing system damage and taking other remedial measures. Like many organizations, we increasingly rely on third party software and infrastructure supports to deliver our services. Disruptions, failures, defects, or other security vulnerabilities experienced by those third parties could cause adverse operational impacts, damage our reputation, adversely affect our financial impacts, or harm our business if significant in nature.

Our sales, general and administrative (“SG&A”) costs, including corporate overhead, are a higher percentage of revenue than larger broadband companies due to a lack of relative scale. We anticipate it willmay take multiple years of growth to reduce our SG&A as a percentage of revenue to be comparable to our broadband peers. If we cannot further grow our revenues at a faster pace than our expenses, our earnings and margins may be lower than our peers which may affect the value of our stock price.

Our success depends on consistent supply of physical goods and services to build and sustain services to customers. Significant disruptions to the supply chainchain, including increased tariffs, could adversely impact our growth, operations and revenue projections.

The supply of critical supplies, such as modems, consumer Wi-Fi equipment, energy, optical equipment and fiber is important to our business operations. These materials form the core components needed to deliver both video and data services to our customers. We work to ensure we have a forward-looking supply of these items and redundancy of supply types and suppliers. However, global impacts to supply chainschains, including cost increases as a result of changes to federal tariffs or retaliatory tariffs by the U.S. or foreign governments, across some or all suppliers and manufacturers could result in significant supply issues.issues and/or increased cost. If supplies toof these items became severely impacted, our plans to build out new networks could be adversely impacted. Additionally, the lack of certain equipment and/or supplies could limit our ability to service existing customers. Significant impact to supply chains could materially and adversely affect our business, including reduced revenues, loss of customerscustomers, significantly increased costs, and limitations on future growth. Additionally, at times we choose to leverage third-party suppliers to help us deliver services to customers because of efficiency reasons or because third-parties provide a service we cannot replicate easily. Should those third-party suppliers be impacted by a shortage of materials, equipment or resources, their inability to provide services to us could also negatively impact our ability to deliver network services or build out future network.

Our historical operational and financial results have depended, and our future results will depend, upon the retention and continued performance of our management team, as well as the attraction and retention of relevant key roles across our organization. Specifically, the highly-competitive market for talent for key roles in our industry, including executive officers and key personnel to support our engineering, sales, service delivery, information technology, finance and accounting functions, is highly competitive and could adversely impact our ability to retain and hire new key employees and contractors. The loss of the services of key members of executive management or other employees or contractors in critical roles, and the inability or delay in hiring new key employees and contractors could materially and adversely affect our ability to manage and expand our business and our future operational and financial results. Moreover, an inability to retain sufficient qualified personnel throughout our organization or to attract new personnel as we grow our business could adversely affect our ability to achieve our operational, sales and financial goals impacting our financial results, financial condition and our stock price.

We utilize our information technology infrastructure to manage and store various proprietary information and sensitive or confidential data relating to our operations. We routinely process, store and transmit large amounts of data for our customers, including sensitive and personally identifiable information. We depend on our information technology infrastructure to conduct business operations and provide customer services. We may be subject to data breaches and disruptions of the information technology systems we use for these purposes. Our industry has witnessed an increase in the frequency, intensity and sophistication of cybersecurity incidents caused by threat actors such as foreign governments, criminals, hacktivists, terrorists and insider threats. Threat actors may be able to penetrate our network security and misappropriate or compromise our confidential, sensitive, personal or proprietary information, or that of third parties, and engage in the unauthorized use or dissemination of such information. They may be able to create system disruptions, or cause shutdowns. Threat actors may be able to develop and deploy viruses, worms,malware, ransomware and other malicious software programs that attack our products or otherwise exploit security vulnerabilities of our systems causing operational damage that could impact our ability to serve customers and result in financial losses. In addition, sophisticated hardware and operating system software and applications that we procure from third parties may contain defects in design or manufacture, including “bugs,” cybersecurity vulnerabilities and other problems that could unexpectedly interfere with the operation or security of our systems.

Like many other companies, we increasingly leverage third-party Software as a Service (“SaaS”) solutions and external service providers to help us deliver services to our customers. In the delivery of these services, we are dependent on the security infrastructure of those third-party providers. These providers are also vulnerable to the myriad of cyber-attacks possible in today’s environment.cyber-attacks. In the case where a third-party provider becomes victim to an attackattack, it could have an impact on our operations or ability to service customers.

Our distribution networks may be subject to weather-related events that could damage our networks and impact service delivery, such as downed transmission lines, flooded facilities, power outages, fuel shortages, network congestion, delay or failure, damaged or destroyed property and equipment, and work interruptions.interruptions, or network congestion, delays or failures, . It is predicted that warming global temperatures will increase the frequency and severity of such weather-related events. If there are more weather-related events, and should such events impact the region covered by our networks more frequently or more severely than in the past, our revenues and expenses could be materially adversely impacted. Concern over climate change or other environmental, social and governance (ESG) matters may result in new or increased legal and regulatory requirements to reduce or mitigate the effects of climate change. Further, climate change regulations may require us to alter our proposed business plans or increase our operating costs due to increased regulation or environmental considerations, and could adversely affect our business and reputation.

Service Level Agreements (“SLAs”) with Horizon’sour largest customers may cause material fluctuations in the combined companies’our financial results.

32%Approximately 28% of Horizon’scommercial revenues are with the national wireless service providers who have carrier grade SLAs for network reliability and mean time to restore outages. If Horizon,the Company and theirits network vendors providing off-network backhaul circuits to certain cellular towers,towers do not meet the SLAs, contractual monetary penalties may be incurred which would have an adverse effect on revenues and profitability. Network investments may be required to remediate the issues.

Changes to the FCC’s Universal Service Fund (“USF”) framework may adversely impact our Broadband revenue, which may have a material adverse effect on our financial performance and our results of operations.

The FCC’s USF provides regulatory support to rural local exchange carriers to promote universal service and to eligible schools and libraries through the e-rate program and to regional healthcare providers and hospitals through the Rural Healthcare Program to obtain subsidized internet access and telecommunication services. RecentAlthough unsuccessful, recent lawsuits have askedagainst the courtsUSF tohave declareraised questions in Congress regarding future funding for the universal service framework illegal.USF. Any reduction in the USF from thesesimilar successful lawsuits, or otherfunding means,changes by Congress, could negatively impact the regulatory support revenue received by the Company’s RLEC business and the ability for schoolsschools, libraries, and librarieshealthcare providers to pay the Company for internet access and telecommunication services.

Federal law strictly limits the scope of permissible cable rate regulation, and none of our local franchising authorities currently regulate our rates for video services. Our rates for broadband services have historically not been subject to rate regulation. However, as broadband service is increasingly viewed as an essential service, governments could adopt new laws or regulations related to the prices we charge for our services that could adversely impact our existing business model, revenues, earnings and the value of our and cable industry stock prices.

The Company operatesprovides data services and operates cable television systems in largely rural areas of Virginia, West Virginia, Maryland, Pennsylvania, Kentucky, Delaware, Ohio and Indiana pursuant to local franchise agreements. These franchises are not exclusive, and other entities may secure franchise authorizations in the future, thereby increasing direct competition to the Company.

Many franchises establish comprehensive facilities and service requirements, as well as specific customer service standards and monetary penalties for non-compliance. In many cases, franchises are terminable if the franchisee fails to comply with significant provisions set forth in the franchise agreement governing system operations. Franchises are generally granted for fixed terms and must be periodically renewed. Franchising authorities may resist granting a renewal if either past performance or the prospective operating proposal is considered inadequate. Franchise authorities often demand concessions or other commitments as a condition to renewal. If our local franchises are not renewed at expirationexpiration, we would have to cease operations or,or operate under either temporary operating agreements or without a franchise while negotiating renewal terms with the local franchising authorities. Although we have historically renewed our franchises without incurring significant costs, we cannot offer assurance that we will be able to renew, or to renew as favorably, our franchises in the future. A termination of or a sustained failure to renew a franchise in one or more key marketsmarkets, or obtaining such franchise on unfavorable termsterms, could adversely affect our business in the affected geographic area.

Pole attachments are wires and cables that are attached to utility poles. Cable and fiber system attachments to investor-owned public utility poles historically have been regulated at the federal or state level, generally resulting in reasonable pole attachment rates for attachments used to provide cable service. In contrast, utility poles owned by municipalities or cooperatives are not subject to federal regulation and are, with exceptions, generally exempt from state regulation and their attachment rates tend to be higher. Future regulatory changes in this area could impact the pole attachment rates we pay utility companies.

In partnership with counties in the respective states, Shentel has been awarded grants through various broadband infrastructure grant programs in Virginia, Maryland, West VirginiaVirginia, Ohio and Ohio.through the federal National Telecommunications and Information Administration (“NTIA”). As of December 31, 2024,2025, the Company has been awarded grants totaling approximately $149.8$151.2 million. Most of the grants awarded under the above programs are funded through the American Rescue Plan Act. As the recipient of these grants, the Company has committed to expand its broadband network and improve broadband services to approximately 27,20026,900 unserved homes in the states of Virginia, Maryland, West Virginia and Ohio and upgrade our middle mile network in Ohio within a specified period, as agreed to by the Company and each municipality. In the event the Company does not fulfill its commitment to extend its existing broadband network within the time frame allotted, the performance of the broadband network is inadequate, the Company is considered insolvent or the Company fails to meets its funding requirements of the grant projects, the Company may be declared in default of the grant contract. If the default is not cured in a timely manner, the grant contract could be terminated, grant reimbursements maybe withheld by the municipalities and the Company may be required to repay grant monies previously received, as well as additional penalties and liquidated damages. Furthermore, the Company may be liable to pay interest, administrative charges, collection costs, attorneys’ fees, expert fees, consultant fees, and other applicable fees, and interest on any outstanding repayment, all of which could lead to higher Company capital requirementsrequirements, which may not be available, lower homes passed and unfavorable financial results for the Company.

Regulatory and technology constraints could impact our ability to adequately address increases in broadband usage and may cause network capacity limitations, resulting in service disruptions, reduced capacity or slower transmission speeds for our customers.

Video streaming services, gaming andgaming, peer-to-peer file sharing applicationsapplications, and increased AI use requires significantly more bandwidth than other internet activity such as web browsing and email. As use of these services continues to grow, our broadband customers will likely use much more bandwidth than in the past. If this occurs, we could be required to make significant capital expenditures to increase network capacity in order to avoid service disruptions, service degradation or slower transmission speeds for our customers. Alternatively, we could choose to implement network management practices to reduce the network capacity available to bandwidth-intensive activities during certain times in market areas experiencing congestion, which could negatively affect our ability to retain and attract customers in affected markets. Competitive or regulatory constraints may preclude us from recovering costs of network investments designed to address these issues, which could adversely impact our operating margins, results of operations, financial condition and cash flows.

The Company provides broadband Internetinternet access services to its fiber, cablefiber and telephonecable customers. As the Internetinternet has matured, it has become the subject of increasing regulatory interest. Congress and Federal regulators have adopted a wide range of measures directly or potentially affecting Internetinternet use. The adoption of new Internetinternet regulations or policies could adversely affect our business.

The FCC imposes obligations on telecommunications service providers, including broadband Internetinternet access service providers, and multichannel video program distributors, like our cable company.Company. We cannot predict the nature and pace these requirements and other developments, or the impact they may have on our operations.

We may not have sufficient capital to fund our expansion plans and may not be able to repay future indebtedness.

Failure to comply with financial and operating covenants or make scheduled payments underrelated to our CreditNotes Agreementand the RCF may restrict our ability to borrow and could accelerate repayment of outstanding debt.

Under the CreditRCF Agreement,credit weagreement, areShentel Broadband is required to comply with specified financial and operating covenants in addition to making scheduled payments.covenants. Our failure to comply with any of these covenants or to meet any payment obligations under the RCF credit agreement could result in an event of default which, if not cured or waived, would result in any amounts outstanding, including any accrued interest and unpaid fees, becoming immediately due and payable. WeShentel Broadband might not have sufficient working capital or liquidity to satisfy any repayment obligations in the event of an acceleration of those obligations. In addition, if we are not in compliance with the financial and operating covenants at the time we wish to borrow funds, we will be unable to borrow RCF funds.

Shenandoah Telecommunications Company (“Shentel”, “we”, “our”, “us”, or the “Company”), provides broadband services through its high speed, state-of-the-art fiber-optic and cable networks to customers in eight contiguous states in the eastern United States. The Company’s services include: broadband internet, video and voice; high-speed Ethernet, dedicated internet access and dark fiber leasing; and managed network services. The Company owns an extensive regional network with approximately 16,80019,000 route miles of fiber.

HorizonManagement TransactionTransitions

Residential & SMB - Incumbent Broadband Markets revenue increaseddecreased by $0.6$0.1 million,million. orShentel 0.3%,recognized in the year ended December 31, 2024 as compared with the year ended December 31, 2023 primarily due to $5.6$5.2 million of revenues earned in the newly acquired Horizon markets. TheseThe revenuesremaining weredecrease offsetof by a $5.0$5.3 million declinewas in the legacy Shentel marketsprimarily due to lower video revenue from a 16.9%15.3% decline in video revenue generating units (“RGUs”) and lower voice revenue from a 1.6%21.5% decline in datavoice RGUs with the majority of the decline due to the end of the ACP program.ARPU.

Residential & SMB - Glo Fiber Expansion Markets revenue increased by $22.8 million, or 65.0%,64.9%. inShentel the year ended December 31, 2024 as compared with the year ended December 31, 2023 due torealized a $21.4 million increase in legacy Shentel markets and recognized $1.4 million of revenues earned in the newly acquired Horizon markets. The increase in legacy Shentel markets revenue was primarily due to 50.9% year-over-year growth in data RGUs associated with the Company’s investment in expanded geographies for Glo Fiber and a 7.3% increase in data average revenue per unit (“ARPU”).ARPU.

We discuss in our Annual Report on Form 10-K various risks that may materially affect our business. We use this section to update this discussion to reflect material developments since our Form 10-K was filed. As of MarchJune 31,30, 2026, the Company has identified an additional risk factorfactor, included below, due to ongoing global geopolitical conflicts, including conflicts impacting energy‑producing regions, contributing to increased volatility in global oil and fuel markets. Actionsactions taken by governments globally in response to such conflicts,conflicts including sanctions and trade restrictions, have increased uncertainty regarding global oil and fuel supply and pricing.restrictions.

Three Months Ended MarchJune 31,30, 2026 Compared with the Three Months Ended MarchJune 31,30, 2025

The Company’s unaudited condensed consolidated results from operations are summarized as follows:

Residential & SMB - Incumbent Broadband Markets revenue decreased by $2.2$2.6 million, or 5.1%.6.0%. The decrease was primarily due to lower video and data revenue. Video revenue declined due to a 14.6%14.1% declinedecrease in video RGUs andas customers switched to streaming video services. Data revenue declined due to a 1.6%2.6% decline in data ARPUARPU, driven in part by the Company’s newour rate card in markets where we face a portion of its passings with anotherfixed broadband provider.competitor and in part due to our recently implemented rate card in lower demographic markets experiencing softer demand.

Commercial Fiber revenue increased by $0.9$1.9 million, or 4.7%.9.8%. The increase was primarily due to increasesa incombination of recurring revenue fromin additionalthe circuitenterprise servicesand soldcarrier toverticals, existinga customers.non-cash sales-type lease of customer equipment and a negative non-cash deferred revenue adjustment for one of our national wireless carrier customers in the second quarter of 2025.

RLEC & Other revenue decreased by $0.8$0.9 million, or 13.0%.14.7%. The decrease was primarily due to a 28.0%the decrease in DSL RGUs and $0.3to milliona lesser extent a decrease in government support revenue.

Cost of services primarily consist of costs to acquire and deliver video programming, internal labor to maintain our network and service our customers, third party network maintenance, and line expenses Cost of services decreasedincreased by $1.2$0.1 million, or 3.7%.0.2%. The decreaseincrease was primarily due to governmentincreased grantfleet reimbursements of certain indirect operating costsmaintenance and afuel decrease in video programming costs driven by declining video RGUs.expenses.

Selling, general and administrative expense increased by $2.4$1.3 million, or 7.7%.4.3%. The increase was primarily due to anhigher increaseoperating inand property taxes, higher advertising coststo andsupport payrollRGU costs driven by expansion of the Glo Fiber homes passedgrowth and higher stocksoftware compensation.maintenance expenses.

Restructuring, integration and acquisition expense increaseddecreased by $1.9$0.1 million, or 378.4% and35.0%, primarily relatesdue to accruedfees severanceincurred costs associated within the previouslyprior announcedyear reductionto inamend force.debt terms.

Depreciation and amortization increaseddecreased by $5.5$4.5 million, or 18.7%.12.8%. The increasedecrease was primarily due to the Company’s expansion of its Glo Fiber network and a $2.8$4.2 million write-off ofin projectthe costsprior underyear constructionrelated forto marketsinventory assets that constructionwere wasno cancelledlonger dueplanned to higherbe costs to build.used.

Interest expense increased by $4.5$3.7 million, or 92.9%.61.5%. The increase was primarily due to an increase in the Company’s outstanding debt.debt as well as less capitalized interest due to less plant under construction than in prior year.

Other income, net decreased by $0.7$2.5 million, or 93.9%.84.3%. The decrease was primarily due to a favorable settlement of the Horizon acquisition related escrow claim in the prior year that did not recur in 2026, as well as lower patronage income.

Income tax benefit increaseddecreased by $3.0$0.5 million, or 267.1%.16.6%. The increasedecrease was primarily due to higherlower pre-tax loss.loss than in the prior year.

Sources and Uses of Cash: Shentel’s principal sources of liquidity are our cash and cash equivalents, restricted cash, cash generated from operations, government grants and borrowing capacity available under the Company’s VFN and RCF.

In 2021, Congress passed the American Rescue Plan Act and the Infrastructure Investment and Jobs Act to subsidize the deployment of high-speed broadband internet access in unserved areas. We have been awarded approximately $152.3$151.2 million in grants to serve approximately 27,900 unserved homes in the states of Virginia, Ohio, Maryland and West Virginia and to upgrade the capacity of the Ohio middle mile network. The grants will be paid to the Company as certain milestones are completed. As of MarchJune 31,30, 2026, the Company had received a total of $114.5$123.9 million in cash receipts and had $37.8$27.4 million in remaining reimbursements available under these grant programs. The Company expects to fulfill the majority of its obligations under these programs by the end of 2026.

As of MarchJune 31,30, 2026, the Company’s total available liquidity was $194.5$158.9 million, consisting of (i) unrestricted cash and cash equivalents totaling $43.8$23.9 million; (ii) restricted cash as required by the ABS indentureIndenture totaling $27.3$30.9 million (iii) $67.8$74.8 million of availability under Shentel Broadband’s RCF; (iv) $17.8$1.9 million under Shentel Issuer’s VFN; and (v) an aggregate of $37.8$27.4 million remaining reimbursements available under government grants, which reimbursements are subject to fulfilling the terms of the underlying agreements. In addition, the Company has $117.2$105.1 million of VFN commitments that are not available to draw as of MarchJune 31,30, 2026. The available capacity of the VFN will increase based on the secured fiber network revenue growth from the ABS Entities multiplied by (i) a margin as defined in the ABS Indenture and (ii) a 6.25x multiple.

Net cash provided by operating activities from operations was approximately $24.4$48.8 million during the threesix months ended MarchJune 31,30, 2026, representing an increase of $3.8$5.1 million compared with the prior year period, primarily driven by increases in revenue and timing of changes in working capital.

Net cash used in investing activities from operations was approximately $64.1$124.8 million during the threesix months ended MarchJune 31,30, 2026, representing a decrease of $12.2$27.1 million compared with the prior year period,period. primarilyThe driven by a $7.4$23.2 million decrease in capital expenditures aswas Shentelprimarily approachesdriven theby completionlower ofcapital itsexpenditures majoron Glogovernment Fibergrant marketconstruction expansionprojects projectin andIncumbent Broadband Markets, offset by a $4.6$3.3 million increase in cash receipts from government grant programs.

Net cash provided by financing activities from operations was approximately $62.6$82.6 million during the threesix months ended MarchJune 31,30, 2026, representing a decrease of $34.4$10.6 million compared with the prior year period,period. This decrease was primarily driven by aan decreaseincrease in borrowingspayments undermade on the various debt facilities.facilities, and partially offset by increases in debt borrowings and payments on financing arrangements.

Indebtedness: As of MarchJune 31,30, 2026, the Company’s net indebtedness was approximately $693.9$715.0 million, including $707.4$728.4 million in outstanding ABS Notes, the VFN, and the RCF, net of unamortized loan fees of $13.5$13.4 million. The borrowed Class A-2 Notes and the Class B Notes incur interest at 5.64% and 6.03%, respectively. The borrowed VFN and RCF bear interest at a variable rate determined by one-month term SOFR, plus a margin based on net leverage. The weighted-average interest rate was 5.74%5.73% for the ABS Notes, VFN, and RCF at MarchJune 31,30, 2026.

Shentel’s ABS Notes, which include Class A-2 Notes and Class B Notes, have outstanding balances of $489.1 million and $78.3 million, respectively. Shentel Issuer’s VFN has an outstanding balance of $40.0$68.0 million. Shentel’s RCF has an outstanding balance of $100.0$93.0 million. The ABS Notes have a contractually stated anticipated repayment date (“ARD”) of December 2030 with the exception of the VFN. The initial anticipated repayment date for the VFN is December 2029 which may be extended, at the option of Shentel, to December 2030, subject to the satisfaction of certain conditions. Shentel has not made any borrowings under its LFN as of MarchJune 31,30, 2026. Amounts borrowed under the LFN do not have an anticipated repayment date. The legal final maturity date of each class of the ABS Notes is in December 2055. If Shentel has not repaid or refinanced any Series 2025-1 Notes prior to the relevant ARD, additional interest will accrue on outstanding principal. Shentel Broadband’s RCF matures on December 5, 2030. No principal payments on Shentel Broadband’s RCF are required prior to the final maturity date.

As of MarchJune 31,30, 2026, the Company was in compliance with the financial covenants related to our outstanding debt.

During the threesix months ended MarchJune 31,30, 2026, our capital expenditures of $75.8$146.2 million exceeded our net cash provided by operating activities by $51.5$97.4 million, and we expect our capital expenditures to exceed the cash flows provided from operations through 2026, as we expand our Glo Fiber broadband network.

Our cash flows from operations could be adversely affected by events outside our control, including, without limitation, changes in overall economic conditionsconditions, including rising inflation, regulatory requirements, changes in technologies, changes in competition, demand for our products and services, availability of labor resources and capital, natural disasters, pandemics and other adverse public health developments, such as COVID-19, and other conditions. Our ability to attract and maintain a sufficient customer base, particularly in our Broadband markets,base is critical to our ability to maintain a positive cash flow from operations. The foregoing events individually or collectively could affect our results.

During 2025, Shentel formed Shentel Guarantor LLC, Shentel Issuer LLC, Shentel Asset Entity I LLC and Shentel Asset Entity II LLC (collectively, the “ABS Entities”), each a bankruptcy-remote subsidiary of the Company. The ABS Entities were formed as part of a securitization transaction, pursuant to which certain of the Company’s fiber network assets and related customer contracts primarily in Virginia, Ohio, Pennsylvania, Indiana, Maryland and West Virginia were contributed to Shentel Asset Entity I LLC and Shentel Asset Entity II LLC (collectively, the “ABS Asset Entities”). As of MarchJune 31,30, 2026, all of the Company’s commercial fiber network assets and approximately 307,000312,000 Glo Fiber passings were contributed to the ABS Asset Entities. The cash flow from these contributed assets are used to service the obligations under Shentel’s ABS Notes.

Our RCF requires consolidated financial statements of restricted subsidiaries under the RCF (the “Non-ABS Entities” or the “Restricted Subsidiaries”) and unrestricted subsidiaries (the “ABS Entities” or the “Unrestricted Subsidiaries”). Below isare the unaudited condensed consolidating balance sheetsheets as of MarchJune 31,30, 2026 and December 31, 2025, and the unaudited condensed consolidating statementstatements of operations for the three and six months ended MarchJune 31,30, 2026.