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

Our business, financial condition and operating results can be affected by a number of factors, including but not limited to those described as risk factors, any one or more of which could, directly or indirectly, cause our actual operating results and financial condition to vary materially from past, or anticipated future, operating results and financial condition. In addition to the other information set forth in this Quarterly Report and in other documents that we file with the SEC, you should carefully consider the factors described in the section entitled “Risk Factors” in our Proxy Statement/Prospectus, which risk factors are incorporated herein by reference. Other than as disclosed below, there have been no material changes to the risk factors described in the Proxy Statement/Prospectus. If any of the risk factors described in the Proxy Statement/Prospectus actually materializes, our business, financial condition and results of operations could be materially adversely affected. In such an event, the market price of our Common Stock could decline and you may lose all or part of your investment. We may disclose changes to such risk factors or disclose additional risk factors from time to time in our future filings with the SEC.

The Company’s independent registered public accounting firm’s report contains an explanatory paragraph that expresses substantial doubt regarding the Company’s ability to continue as a going concern, and the Company’s unaudited interim financial statements for the period ended June 30, 2026 contain a similar disclosure.

Teamshares’ historical financial statements have each been prepared under the assumption that we will continue as a going concern. The independent auditor for Teamshares issued a report on the audited financial statements for the periods ended December 31, 2025 and 2024 that includes an explanatory paragraph expressing substantial doubt in its ability to continue as a going concern for one year from the date of such report. The unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report contain a similar disclosure with respect to the period ended June 30, 2026, concluding that substantial doubt exists regarding the Company’s ability to continue as a going concern for the twelve-month period following the issuance of such financial statements. The condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the discharge of liabilities in the normal course of business without any adjustments that might result from the outcome of this uncertainty.

If the Company is not able to refinance, extend, or repay the i80 Facility or its other near-term debt maturities on reasonable terms or at all, this may impair Teamshares’ ability to execute its business strategies, including, without limitation, potentially deferring or delaying the timelines or ability to consummate additional Operating Subsidiary acquisitions in accordance with Teamshares management’s current plans, forecasts and estimates with regard to such acquisitions. Teamshares may experience shortages of operating and acquisition capital if required to repay the principal and interest amounts outstanding under its existing indebtedness when currently scheduled to come due, and may, in such circumstances, be forced to accept alternative or supplemental financing, if any such financing is available, which may not be on terms favorable to Teamshares relative to its existing indebtedness or generally, and which could result in significant dilution to existing stockholders. If Teamshares cannot continue as a viable entity, investors, including holders of Common Stock, may lose some or all of their investment.

The following discussion and analysis of the financial condition and results of operations of Teamshares includes information that Teamshares’ management believes is relevant to an assessment and understanding of Teamshares’ consolidated results of operations and financial condition. You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed consolidated financial statements included in this Quarterly Report, our unaudited pro forma financial statements filed as Exhibit 99.1 to our Current Report on Form 8-K filed with the SEC on June 25, 2026 (the “Super 8-K”) and our audited financial statements included in the definitive proxy statement and final prospectus included in the Registration Statement on Form S-4 (File No. 333-294869), dated May 27, 2026, filed with the SEC on May 27, 2026 and declared effective by the SEC on May 27, 2026, (as supplemented on June 3, 2026, the “Proxy Statement/Prospectus”). This discussion may contain forward-looking statements based upon current expectations that involve risks and uncertainties. Teamshares’ actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in the section titled “Cautionary Note Regarding Forward-Looking Statements” in this Quarterly Report and the section titled “Risk Factors” in the definitive proxy statement and final prospectus included in the Proxy Statement/Prospectus, as updated by the factors disclosed in the section titled “Risk Factors” in our Super 8-K and in this Quarterly Report.

On November 14, 2025, Live Oak Acquisition Corp. V, a Cayman Islands exempted company (“Live Oak”) entered into an Agreement and Plan of Merger, dated as of November 14, 2025 (as amended by the First Amendment dated April 1, 2026 and the Second Amendment dated May 13, 2026, the “Merger Agreement”) by and among Live Oak, Catalyst Sub Inc., a Delaware corporation and a direct, wholly-owned subsidiary of Live Oak (“Merger Sub”), Catalyst Sub 2 LLC, a Delaware limited liability company and a direct, wholly-owned subsidiary of Live Oak (“Merger Sub II”), Live Oak Sponsor V LLC, in its capacity as SPAC Representative (the “Sponsor”), Brian Gaebe, in his capacity as Seller Representative, and Teamshares Inc., a Delaware corporation (referred to herein prior to the SPAC Merger as “Legacy Teamshares” and subsequent to the SPAC Merger as “Teamshares”). On June 18, 2026 (the “Closing Date”), as contemplated by the Merger Agreement, Live Oak, Merger Sub, Merger Sub II and Legacy Teamshares consummated the transactions contemplated by the Merger Agreement and its related agreements, pursuant to which, among other things, Merger Sub merged with and into Legacy Teamshares, with Legacy Teamshares continuing as the surviving corporation (the “Surviving Corporation”) (the date and time of such merger, the “First Effective Time”) as a wholly-owned subsidiary of Live Oak (the “First Merger”), and immediately thereafter, the Surviving Corporation merged with and into Merger Sub II, with Merger Sub II (renamed as “Teamshares LLC”) continuing as the surviving entity (the “Surviving Entity”) and as a wholly-owned subsidiary of Live Oak (the “Second Merger” and together with the First Merger, the “Mergers”, and together with the other transactions contemplated by the Merger Agreement and the related agreements, the “SPAC Merger”).

Unless the context otherwise requires, all references in this section to “we”, “us”, “our”, “Teamshares”, or the “Company” refer to Teamshares Inc. and its subsidiaries prior to the consummation of the SPAC Merger, and after the consummation of the SPAC Merger, Teamshares Inc. and its subsidiaries.

Teamshares is a technology-enabled acquirer and operator of SMEs. Our acquisition criteria is primarily focused on companies for sale by retiring owners with approximately $0.5 million to $5.0 million of earnings before interest, taxes, depreciation and amortization (“EBITDA”). We leverage proprietary software to source and evaluate thousands of SME acquisition opportunities annually. The purchase multiples for our acquisitions typically range from 4x to 6x EBITDA and acquisitions are partially funded with debt financing. The Company’s acquisition strategy intentionally targets a diversified mix of businesses across industries and geographies, which is intended to create resilient financial performance across different economic conditions.

We derive revenue and generate cash flow from the financial performance of our subsidiaries. Excess cash flow is systematically upstreamed to the platform and redeployed for new acquisitions and organic growth opportunities across our Operating Subsidiaries, which is expected to create a self-funding flywheel that compounds over time while continuing to diversify industry and geographic exposure. While our Operating Subsidiaries have historically generated positive cash flow, our consolidated free cash flow has been negative due to our investment in corporate platform capabilities, technology, and growth initiatives. As the scale of our Operating Subsidiaries increases relative to these platform-level expenses, we expect the cash flow generated by our Operating Subsidiaries to increasingly fund acquisitions and other growth initiatives over time. We believe our ability to deploy capital towards highly accretive acquisition opportunities, successfully transition and operate acquired companies, and scale overhead through our tech-enabled infrastructure will allow us to create significant value for our stakeholders.

Key Factors Affecting Our Business and Results of Operations

The growth and future success of our business depend on many factors. While each of these factors presents significant opportunities for our business, they also pose important challenges that we must successfully address in order to sustain our growth, improve our results of operations and achieve and maintain our long-term profitability. Key factors include:

•Ability to complete acquisitions and effect on comparability. Acquisitions are a core driver of our growth, and our pace depends on our ability to source and integrate transactions through our proprietary technology-enabled platform and our availability of capital. Under accounting principles generally accepted in the United States of America (“U.S. GAAP”), the results of acquired companies are included in our condensed consolidated financial statements from the acquisition date. As a result, the timing of acquisition closings can affect period-to-period comparability. Newly acquired businesses may have revenue models, cost structures, working capital dynamics and seasonality profiles that differ from our existing operations. Shifts in the relative contribution of recently acquired companies, particularly those with financial characteristics that differ meaningfully from our existing base, may drive period-to-period fluctuations that reflect portfolio mix rather than organic changes in underlying performance.

•Ability to retain key personnel and recruit new leaders into our platform. Our growth depends on attracting, developing and retaining high-caliber presidents and employee owners, particularly during transitions from retiring founders. Newly acquired companies may experience near-term variability in results during such transitions, including from turnover, wage inflation or elevated hiring activity, which may not be indicative of future performance.

•Ability to scale our platform efficiently. Our success depends largely on our ability to expand our platform without proportionately increasing our corporate cost structure as we grow both organically and through acquisitions. We rely on proprietary software and technology to support scalable growth. We expect that continued investment in our technology platform, shared services and operating playbooks will increase automation, reduce unit costs and improve selling, general and administrative leverage as revenue scales.

•Ability to balance third-party debt and seller notes to optimize cost of capital. Our acquisition cadence and cash flow compounding depend on continued access to debt on sustainable terms and our ability to lower our overall cost of funds. We are pursuing opportunities to refinance these borrowings on improved terms and Teamshares management believes that progress on potential refinancing plans, together with the deployment of proceeds from the SPAC Merger into accretive acquisitions, will strengthen our credit profile, reduce cash interest, and increase capacity to reinvest operating cash flows. However, there can be no assurances that additional debt financing can be secured on terms more favorable than the terms of our current credit facilities or at all. If we are unable to refinance our existing credit facilities and secure additional debt financing for acquisitions, this could impair Teamshares’ ability to pursue programmatic acquisition plans on the currently anticipated timelines and terms.

•Seasonality and Impact on Comparability. Our consolidated results are subject to seasonal patterns and other periodic variability arising from the diversified nature of our subsidiaries across industries and geographies, as well as from the timing and mix of our acquisitions. Historically, SME Segment EBITDA has been lowest in our first fiscal quarter, representing 10% to 15% of full fiscal year total, reflecting lighter seasonal consumer spending and winter weather-related operating constraints. In addition, certain subsidiaries maintain inventories or advance purchase commitments to support peak seasonal demand; building inventory ahead of such periods or drawing down inventory thereafter can impact interim gross margins and operating cash flows. Because we acquire companies throughout the year and the resulting portfolio mix continues to evolve, the contribution of recently acquired subsidiaries may reflect only a partial seasonal cycle or a different seasonal profile than our existing base, which can affect period-to-period comparability. As a result, fluctuations in our consolidated revenue, profitability and cash flows between periods may reflect seasonal dynamics, acquisition timing and portfolio mix rather than changes in the underlying performance of our businesses and investors should avoid drawing conclusions about underlying trends based solely on short-term movements in our reported results.

Components of Operations

Revenue

Our revenue consists of both product sales and service revenue from our operating subsidiaries. Our operating subsidiaries operate across a broad range of industries and revenues are generated from a diverse mix of product and service offerings. In addition, our operating subsidiaries are located in numerous geographies primarily across the United States. This geographic and industry diversity reduces reliance on any particular customer segment, economic cycle, or local market and is expected to result in a more stable and resilient consolidated revenue profile. Future acquisitions are expected to continue to expand the industry and geographic diversity of our revenue streams.

Cost of Revenue

Cost of revenue includes the direct cost of products and services sold. The direct cost of products sold primarily includes purchases of raw materials and finished goods from suppliers, adjusted for supplier rebates, personnel costs for employees that directly contribute to the production of goods, packaging materials, shipping costs and depreciation of assets associated with the distribution and delivery of products. Amounts billed to customers for shipping and handling are recorded in revenue, with the related shipping and handling costs recognized in cost of revenue. The direct cost of services sold primarily includes personnel cost for employees that directly contribute to the execution of the services being sold. The personnel costs included in cost of revenue include salaries, wages, benefits and contractor fees.

We expect cost of revenue to increase in future periods as we continue to grow through acquisitions of new businesses. However, the Company’s gross margins may not change proportionally with increases in cost of revenue, as the mix of acquired businesses can differ from the Company’s historical operations. Acquisitions may include businesses with higher or lower gross margins, which could result in changes to overall consolidated gross margin percentages. Consequently, future gross margins may fluctuate based on the types of businesses acquired and the relative contribution of their revenues and costs to total operations.

Depreciation

Depreciation expense is computed using the straight-line method over the estimated useful life of the related asset. Depreciation expense includes amounts related to vehicles, computers, machinery, and equipment, furniture and fixtures, third-party software, buildings and leasehold improvements used in the Company’s operations.

Amortization

Amortization expense is computed using the straight-line method over the estimated useful life of the related asset. We amortize definite-lived intangible assets, including trade names, customer related intangible assets and internally developed software. Amortization expense also includes the impairment of definite-lived intangibles.

Selling, General and Administrative Expenses

Selling, General, and Administrative expenses (“SG&A”) include personnel costs for employees that support corporate initiatives, and for employees at our operating subsidiaries that are involved in selling and marketing functions, management, accounting, administration and human resources. The personnel costs included in selling, general and administrative expenses includes salaries, wages, benefits and contractor fees. Selling, general and administrative expenses also include rent, professional service fees, stock compensation, advertising and marketing costs, and allocated overhead.

The Company took actions to reduce our corporate headcount in 2025, and therefore, the current corporate headcount level is below the average for 2025. Furthermore, there was $1.0 million of severance included in SG&A expenses related to these reduction actions for the years ended December 31, 2025. Excluding the impact of other factors, the reductions in corporate headcount would result in decreases in SG&A expenses compared to recent historical periods. However, we expect SG&A expenses to increase in the near term due to increased compliance and reporting costs associated with being a public company, including increased legal, accounting, compliance and investor relations related costs. Additionally, we expect SG&A expenses to increase in the future due to additional personnel and operational costs from newly acquired businesses as the Company continues its growth through acquisitions. However, we expect the incremental earnings from acquisitions and organic growth to materially exceed the increases in corporate overhead.

Goodwill Impairment

Goodwill impairment is recognized when the carrying amount of the reporting unit’s net assets exceeds the estimated fair value of the reporting unit. Goodwill impairment primarily relates to persistent declines in the financial performance of certain operating subsidiaries.

See Note 2, “Summary of Significant Accounting Policies—Goodwill and Intangible Assets” of the audited consolidated financial statements of the Company for the fiscal year ended December 31, 2025 in the Proxy Statement/Prospectus for a more detailed discussion of our goodwill impairment policy

Interest Expense, Net

Interest expense, net consists primarily of interest expense related to our long term debt as well as interest income related to our cash and cash equivalents. This includes both cash-based interest expense and income, as well as non-cash interest expense such as PIK Interest, amortization of discounts on debt instruments, and the amortization of deferred debt issuance costs. Historically, our interest expense primarily related to borrowings under the i80 Facility and Sound Point facility. These instruments have elevated interest rates compared to recently issued single company term loans and seller notes, and we are in the process of attempting to refinance the i80 Facility. We expect the refinanced debt instrument to have a lower interest rate than these historical credit facilities given the anticipated improvement in our credit profile since issuance as well as the positive impact on our credit profile as a result of the equity proceeds from the SPAC Merger.

Change in Fair Value of Earnout Share and Deferred Founder Share Liabilities

Change in fair value of earnout share and deferred founder share liabilities consists of the change in fair value of the contingent right of Legacy Teamshares security holders to receive up to 5,170,903 additional shares of Common Stock (the “Earnout Shares”), and the 1,674,781 shares of Company Common Stock that were issued to the Sponsor that are subject to vesting and forfeiture during a five-year period (the “Deferred Founder Shares”). The calculation of the fair value and the nature of these instruments is discussed in Note 11 of the Condensed Consolidated Financial Statements.

Change in Fair Value of Forward Purchase Agreement Liability

Change in fair value of forward purchase agreement liability consists of the change in fair value of the liability associated with the agreement dated June 1, 2026 with a fund sub-advised by JBA Asset Management LLC (the “FPA Investor”) for an over-the-counter equity prepaid forward transaction (the “Forward Purchase Agreement”). The calculation of the fair value and the nature of this instrument is discussed in Note 11 of the Condensed Consolidated Financial Statements.

Loss on the Conversion of SAFE Notes

Loss on the conversion of SAFE Notes consists of the loss on the conversion of the Simple Agreements for Future Equity Legacy Teamshares entered into between December 2025 and May 2026 (the “SAFE Notes”). The nature of these instruments is discussed in Note 11 of the Condensed Consolidated Financial Statements.

Income Tax Expense

The Company is subject to U.S. federal and state income taxes and foreign taxes and files its U.S. federal income tax return on a consolidated basis. Income tax expense consists of current and deferred components, reflecting taxes payable or refundable for the current year and the expected future tax effects of temporary differences between the financial statement and tax bases of assets and liabilities. We aggregate certain tax attributes when calculating consolidated taxable income for federal and state purposes. The Company’s primary current tax exposure relates to state and foreign income taxes, which are recorded as a component of current income tax expense.

We currently have significant net operating loss (“NOL”) carryforwards, which are reflected as deferred tax assets. The realizability of these deferred tax assets is evaluated periodically and is dependent on the generation of future taxable income. Management establishes valuation allowances as necessary to reduce deferred tax assets to the amounts expected to be realized. The Company is in the process of evaluating the extent to which any such NOLs may be available to the Company to offset tax liabilities after the Closing; as of the date hereof, this analysis is ongoing.

Three Months Ended June 30, 2026 compared to Three Months Ended June 30, 2025

The following table sets forth our consolidated results of operations of Teamshares Inc. and its subsidiaries for the periods presented. All intercompany balances and transactions have been eliminated in consolidation.

Revenue