Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis together with our condensed consolidated financial statements and the related notes included elsewhere in this Form 10-Q. Among other things, the condensed consolidated financial statements include more detailed information regarding the basis of presentation for the financial data than included in the following discussion. Amounts in thousands of United States dollars.

Unless otherwise indicated or the context otherwise requires, references in this section to "we," "our," "us," "XBP Global", "the Company" and similar terms are to Exela Technologies BPA, LLC (collectively with its subsidiaries and affiliates, the "BPA") before the Business Combination, and to XBP Global Holdings, Inc. following consummation of the Business Combination.

Forward Looking Statements

Certain statements included in this Management's Discussion and Analysis of Financial Condition and Results of Operations and elsewhere in this quarterly report are not historical facts but are forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Forward-looking statements generally are accompanied by words such as "may", "should", "would", "plan", "intend", "anticipate", "believe", "estimate", "predict", "potential", "seem", "seek", "continue", "future", "will", "expect", "outlook" or other similar words, phrases or expressions. These forward-looking statements include statements regarding our industry, future events, estimated or anticipated future results and benefits, future opportunities for XBP Global, and other statements that are not historical facts. These statements are based on the current expectations of XBP Global management and are not predictions of actual performance. These statements are subject to a number of risks and uncertainties regarding XBP Global's businesses and actual results may differ materially. The factors that may affect our results include, among others: the impact of the Restructuring, including but not limited to any realization of the benefits from the Business Combination, the future financial performance, expenditures and mix of revenue and effect on gross margins of the Company following the Business Combination, expectations concerning the relationships and actions of XBP Global as a combined entity with third parties, the impact of political and economic conditions on the demand for our services, our ability to meet the continued listing standards of Nasdaq or another securities exchange, the impact of a data or security breach; the impact of competition or alternatives to our services on our business pricing and other actions by competitors, our ability to address technological development and change in order to keep pace with our industry and the industries of our customers, the impact of terrorism, natural disasters or similar events on our business; the effect of legislative and regulatory actions in the United States and internationally, the impact of operational failure due to the unavailability or failure of third-party services on which we rely, and, the effect of any intellectual property infringement, and other factors discussed in this quarterly report and our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (the "2024 Form 10-K") under the heading "Risk Factors", any updates in our subsequently filed Quarterly Reports on Form 10-Q for the quarter ended March 31, 2025, filed with the SEC on May 15, 2025, and for the quarter ended June 30, 2025 filed with the SEC on August 14, 2025, and our Definitive Proxy Statement on Schedule 14A filed with the SEC on July 15, 2025, and any other risks and uncertainties we identify in other reports and information that we file with the SEC and or otherwise identified or discussed in this quarterly report. You should consider these factors carefully in evaluating forward-looking statements and are cautioned not to place undue reliance on such statements, which speak only as of the date of this quarterly report. It is impossible for us to predict new events or circumstances that may arise in the future or how they may affect us. We undertake no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this quarterly report. We are not including the information provided on any websites that may be referenced herein as part of, or incorporating such information by reference into, this quarterly report. In addition, forward-looking statements provide our expectations, plans or forecasts of future events and views as of the date of this quarterly report. We anticipate that subsequent events and developments may cause our assessments to change. These forward-looking statements should not be relied upon as representing our assessments as of any date subsequent to the date of this quarterly report.

Overview

XBP Global is a multinational technology and services company powering intelligent workflows for organizations worldwide. Our proprietary platforms, agentic AI-driven automation, and deep domain expertise across industries and the public and private sectors enable our clients to entrust us with their most impactful digital transformations and workflows. Our automation solutions containing proprietary software suites and deep domain expertise allow global organizations to address critical challenges resulting from the massive amounts of data obtained and created from their mission critical operations. Our solutions address the life cycle of transaction processing and enterprise information management, from enabling payment gateways and data exchanges across multiple systems, to matching inputs against contracts and handling exceptions, to ultimately depositing payments and distributing communications. Our Applied Workflow Automation segment provides services powered by intelligent, AI-enabled workflows that generate outcomes for clients' mission critical systems. Revenue primarily stems from transactions processed and includes payment processing, data capture, analysis, decisioning, distribution and transformation across industries and the public and private sectors, primarily in Americas and Europe, and increasingly in Asia. Our Technology segment primarily focuses on sales of recurring software licenses and related maintenance, hardware solutions and related maintenance and professional services. Through cloud-enabled platforms, built on a configurable stack of automation modules, and approximately 11,000 employees operating in 20 countries, including many of the Fortune 100, we rapidly deploy integrated technology and operations as an end-to-end hyper-automation partner.

We believe our process expertise, information technology capabilities and operational insights enable our customers' organizations to more efficiently and effectively execute transactions, make decisions, drive revenue and profitability, and communicate critical information to their employees, customers, partners, and vendors. Our solutions are location agnostic, and we believe the combination of our hybrid hosted solutions and global work force in the Americas, EMEA and Asia offers meaningful differentiation in the industries we serve and services we provide. By combining innovation with execution excellence, XBP Global helps organizations reimagine how they work, transact, and unlock value.

History

XBP Global Holdings, Inc. was originally incorporated as CF Acquisition Corp. VIII, a blank check company formed under the laws of the State of Delaware on July 8, 2020. On March 16, 2021, the Company consummated its initial public offering. The Company's initial purpose was to effect a business combination with one or more businesses. On October 9, 2022, CF Acquisition Corp. VIII entered into a merger agreement with XBP Europe, Inc., a direct wholly owned subsidiary of BTC International Holdings, Inc. ("BTC", and at the time a subsidiary of Exela Technologies, Inc. ("ETI")). The business combination was completed on November 30, 2023, at which time the Company was renamed XBP Europe Holdings, Inc., reflecting the purchase of ETI's historical European operations, and the Company's shares and public warrants started trading on The Nasdaq Stock Market LLC under the ticker symbols "XBP" and "XBPEW," respectively.

On July 29, 2025, the Company finalized its acquisition of Exela Technologies BPA, LLC (n/k/a XBP Americas, LLC)(collectively with its subsidiaries, "BPA," and such acquisition, the "Business Combination") pursuant to a Membership Interest Purchase Agreement dated July 3, 2025 (the "MIPA"). The consideration for the sale was $1.00, reflecting the encumbered nature of BPA which at the time of entry into the MIPA was involved in voluntary bankruptcy proceedings under the caption In re DocuData Solutions, L.C., Case No. 25-90023 (CML) (the "Chapter 11 Cases"). The Business Combination was subject to certain conditions subsequent including emergence of BPA and certain of its affiliates from the Chapter 11 Cases, which occurred on July 29, 2025. Prior to the Business Combination, the Company and BPA had both been indirect subsidiaries of ETI. In connection with the Business Combination, the Company changed its name from "XBP Europe Holdings, Inc." to "XBP Global Holdings, Inc."

BPA is comprised of the assets and operations of (i) the following wholly-owned and indirect subsidiaries of BPA: DocuData Solutions, L.C., Exela Intermediate, LLC, Exela Finance, Inc., BancTec (Canada), Inc., BancTec (Philippines), Inc., BancTec (Puerto Rico), Inc., BancTec Group LLC, BancTec India Pvt. Ltd., BancTec Intermediate Holding, Inc., BancTec, Inc., BillSmart Solutions LLC, BTC Ventures, Inc., Charter Lason, Inc., CorpSource Holdings, LLC, Deliverex, LLC, DFG2 Holdings, LLC, DFG2, LLC, Digital Mailroom LLC, DrySign, LLC, Economic Research

Services, Inc., Exela BR SPV, LLC, Exela Receivables 3 Holdco, LLC, Exela Receivables 3, LLC, Exela Technologies India Private Ltd., Exela XBP, LLC, ExelaPay, LLC, FTS Parent Inc., Glo-X, Inc., HOV Enterprise Services, Inc., HOV Services, Inc., HOV Services, LLC, HOVG, LLC, Ibis Consulting, Inc., Imagenes Digitales S.A. de C.V., J & B Software, Inc., Kinsella Media, LLC, Lason International, Inc., LexiCode Healthcare, Inc., Managed Care Professionals, LLC, Meridian Consulting Group, LLC, Novitex Government Solutions, LLC, Novitex Intermediate, LLC, Pacific Northwest United Information Services, LLC, Pangea Acquisitions, Inc., PCH Subscription Services, LLC, Plexus Global Finance, LLC, Promotora de Tecnologia, S.A. de C.V., RC4 Capital, LLC, Recognition de Mexico S.A. de C.V., Recognition Mexico Holding, Inc., Regulus America LLC, Regulus Group II LLC, Regulus Group LLC, Regulus Holding Inc., Regulus Integrated Solutions LLC, Regulus West LLC, Rust Consulting, Inc., Rustic Canyon III, LLC, S-Corp Philippines, Inc., Services Integration Group, L.P., SIG-G.P., L.L.C., SourceCorp BPS, Inc., Sourcecorp de Mexico S.A. de C.V., SourceCorp Legal, Inc., SourceCorp Management, Inc., Sourcecorp, Incorporated, SourceHOV Canada Company, SourceHOV HealthCare, Inc., SourceHOV Holdings, Inc., SourceHOV India Pvt. Ltd., SourceHOV LLC, TRAC Holdings, LLC, TransCentra, Inc., and United Information Services, Inc. and (ii) the following affiliates of BPA: Exela Enterprise Solutions, Inc., NEON Acquisition, LLC, Novitex Enterprise Solutions Canada, Inc. and Reaktr LLC.

The Business Combination was accounted for as a reverse acquisition in accordance with Financial Accounting Standards Board's ("FASB") Accounting Standards Codification Topic 805, Business Combinations ("ASC 805"). Under this method of accounting, XBP Europe Holdings, Inc. (now XBP Global) was treated as the "acquired" company for financial reporting purposes even though BPA survives as an indirect wholly-owned subsidiary of XBP Global.

Chapter 11 Reorganization

On March 3, 2025 (the "Petition Date"), BPA along with certain affiliates (the "BPA Debtors") commenced the Chapter 11 Cases in the United States Bankruptcy Court for the Southern District of Texas (the "Bankruptcy Court"). On April 16, 2025 the BPA Debtors entered into a Plan Support Agreement (as amended, the "Plan Support Agreement") with an ad hoc group of holders (the "Ad Hoc Group") of certain 11.5% secured notes issued pursuant to the 2026 Indentures (as defined below), ETI, certain non-BPA Debtor subsidiaries of ETI (together with ETI, the "Consenting ETI Entities"), and certain other parties thereto. In the Plan Support Agreement such parties agreed, subject to certain conditions, to support the BPA Debtors' reorganization plan in the Chapter 11 Cases and to take all commercially reasonable actions necessary and appropriate to facilitate the restructuring of the BPA Debtors' indebtedness and to complete the restructuring transactions contemplated under the Plan Support Agreement (the "Restructuring"). On May 7, 2025, the BPA Debtors filed a plan of reorganization (the "Plan") reflecting the proposed Restructuring. The Plan was confirmed by the Bankruptcy Court on June 23, 2025.

On July 29, 2025 (the "Emergence Date"), BPA consummated the Restructuring and emerged from bankruptcy having satisfied or waived all the conditions set forth in the Plan. In accordance with ASC 852, Reorganizations ("ASC 852"), BPA was required to apply fresh-start accounting upon its emergence from bankruptcy. The Company evaluated transaction activity of BPA between July 31, 2025 and the Emergence Date and concluded that an accounting convenience date of July 31, 2025 (the "Convenience Date") was appropriate for the adoption of fresh-start accounting which resulted in BPA becoming a new entity for financial reporting purposes as of the Convenience Date.

On the Emergence Date, in connection with the consummation of the Restructuring and pursuant to the Plan:

●

The Company's Third Amended and Restated Certificate of Incorporation was filed with the Delaware Secretary of State and became effective increasing authorized shares to 400,000,000 shares of common stock, par value $0.0001 per share ("Common Stock") and 20,000,000 shares of preferred stock of the Company, and changing the Company's name to XBP Global Holdings, Inc.

●

The Company issued 81,799,821 shares of Common Stock to holders of Allowed Notes Claims (claims based on the 2026 Indentures (as defined below), and as further defined in the Plan) and for backstop and funding fees, resulting in 117,515,972 shares of Common Stock issued and outstanding, and new warrants to purchase 6,632,418 shares of Common Stock to GP 3XCV LLC and XCV-STS, LLC (two subsidiaries of ETI). The issuances reflected a value of $4.98 per share for purposes of the Plan ("Plan Equity Value") based on a valuation of BPA equity at $407.0 million and an overall implied equity valuation of the combined Company of $585.7 million) and were exempt from

registration under Section 1145 of the U.S. Bankruptcy Code. The warrants have standard terms and are exercisable immediately at Plan Equity Value.

●

The Company entered into a Tax Funding Agreement (the "Tax Funding Agreement") with the Reorganized Debtors (the BPA Debtors following the Restructuring), as Agent, and the Consenting ETI Parties. The Tax Funding Agreement provides for the Consenting ETI Parties to fund certain Transaction Tax Liabilities (as defined in the Plan) (up to an initial funding obligation of $15 million and any excess over $25 million), with security over Blocked ETI Shares (as defined therein) and provisions for release upon payment.

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The Reorganized BPA Debtors entered into certain exit financing arrangements (refer to the description of "Indebtedness" below), including:

o

An Indenture reflecting the issuance of $183.0 million of the July 2030 Notes as defined and described further in the description of "Indebtedness" below, in a cashless rollover of a comparable amount of debtor-in-possession obligations from the Chapter 11 Cases, plus $18.0 million in additional funding provided by the Company in exchange for July 2030 Notes issued by BPA (the "XBP Funding"), with the remaining $10.0 million of debtor-in-possession obligations from the Chapter 11 Cases being cancelled and replaced with $6.0 million of loans under the Super Senior Term Loan as defined and described further in the description of "Indebtedness" below.

o

The Super Senior Term Loan consisting of $40.0 million of new loans used to refinance the BPA Debtors' prepetition senior secured term loan facility, which was in the aggregate principal amount of approximately $38.9 million, plus accrued interest, fees, and expenses, and $6.0 million of take-back loans, secured by Term Loan Priority Collateral (as defined therein).

o

An Amended and Restated Credit and Security Agreement with BRF Finance Co. LLC, as Agent, and the lenders party thereto, amending and restating the Second Lien Note, dated February 27, 2023, as defined and described further in the description of "Indebtedness" below, providing for term loans bearing interest at Term SOFR plus 7.5%, and other terms as set forth therein.

o

The ABL Facility, as defined and described further in the description of "Indebtedness" below, with MidCap Financial Trust as Agent and Lender, providing a $150 million revolving credit facility, secured by ABL Priority Collateral (as defined therein), with terms including interest at SOFR plus Applicable Margin (3.75%-4.25% based on EBITDA), maturity 36 months from closing, financial covenants (e.g., Fixed Charge Coverage Ratio), and other customary provisions.

In addition, on the Emergence Date, the indenture dated as of December 9, 2021 (as amended, supplemented or otherwise modified from time to time), among Exela Intermediate LLC and Exela Finance Inc., as issuers, the guarantors party thereto (including certain of the Debtors, as defined therein), and U.S. Bank Trust Company, National Association, as trustee and collateral agent, governing the 11.500% first-priority senior secured notes due 2026, and the indenture dated as of July 11, 2023 (as amended, supplemented or otherwise modified from time to time), among Exela Intermediate LLC and Exela Finance Inc., as issuers, the guarantors party thereto (including certain of the Debtors), and U.S. Bank Trust Company, National Association, as trustee and collateral agent, governing the 11.500% first-priority senior secured notes due 2026 (together, the "2026 Indentures"), were terminated, and all obligations thereunder were cancelled and discharged, with holders of claims thereunder receiving distributions of Common Stock as described above. The ABL Facility also replaced BPA's then existing securitization arrangements with PNC Bank.

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As a result of the Restructuring and the Business Combination, the Company was no longer considered a "controlled company" under the rules of The Nasdaq Stock Market. Prior to the Restructuring and the Business Combination, BTC International Holdings, Inc. ("BTC"), an indirect subsidiary of ETI, owned approximately 60.7% of the Company's Common Stock. Pursuant to the Plan, BTC's shares were distributed to holders of Allowed Notes Claims (including ETI). Post-issuance of new shares under the Plan, beneficial ownership is dispersed, with no beneficial holder owning

more than 50% of the voting securities of the Company. As of September 30, 2025 ETI held approximately 29.1%, Gates Capital Management approximately 25.7%, and Avenue Capital approximately 9.8%, in each case, assuming the exercise of all warrants held by the Consenting ETI Parties. The Restructuring and the Business Combination represent a dissipation of control, not a "change of control" in the traditional sense, because no new third party acquired control of XBP Europe Holdings, Inc. as a result of the Restructuring of the BPA Debtors and the subsequent Business Combination. As of the date of this quarterly report, there are no known arrangements that may result in a further change in control.

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Predecessor and Successor

The "Predecessor" company information refers to the financial information prior to the Emergence Date, which reflects the combined historical financial statements of BPA prepared using BPA's previous combined basis of accounting. The "Successor" company information financial refers to the financial information beginning August 1, 2025 and reflects the consolidated financial statements of XBP Global, including the financial statement effects of recording fair value adjustments and the capital structure resulting from the Business Combination and fresh start accounting of BPA. Black lines have been drawn to separate the Successor's financial information from that of the Predecessor since their financial statements are not comparable as a result of the application of acquisition accounting and the Company's capital structure resulting from the Business Combination and fresh start accounting of BPA.

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Our Segments

Our two reportable segments are Applied Workflow Automation and Technology. These segments are comprised of significant strategic business units that align our products and services with how we manage our business, approach our key markets and interact with our clients based on their respective industries.

Applied Workflow Automation: the Applied Workflow Automation segment provides services powered by intelligent, AI-enabled workflows that generate outcomes for clients' mission critical systems. Revenue primarily stems from transactions processed and includes payment processing, data capture, analysis, decisioning, distribution and transformation across industries and the public and private sectors, primarily in Americas and Europe, and increasingly in Asia. The Applied Workflow Automation segment includes the Company's Bills & Payments, healthcare industry solutions, on-site enterprise solutions, integrated communications and enterprise legal management business units which serve leading banks, payers and providers, utilities as well as federal, regional and local government entities.

Technology: the Technology segment focuses on the sale of recurring and perpetual software licenses, software maintenance and professional services, as well as hardware solutions and maintenance. The Company offers an industry-agnostic and cross-departmental suite of products, with primary focus on scalable workflows leveraging AI through neural networks together with deep domain expertise. The Company also offers industry specific platforms for the banking and healthcare industries.

Key Performance Indicators

We use a variety of operational and financial measures to assess our performance. Among the measures considered by our management are the following:

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Revenue by segment;

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Gross profit by segment; and

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Adjusted EBITDA (which is a non-GAAP financial measure).

Revenue by segment

We analyze our revenue by comparing actual monthly revenue to internal projections and prior periods across our operating segments in order to assess performance, identify potential areas for improvement, and determine whether segments are meeting management's expectations.

Gross profit by segment

The Company defines Gross Profit as revenue less cost of revenue (exclusive of depreciation and amortization). The Company uses Gross Profit by segment to assess financial performance at the segment level.

Non-GAAP Financial Measures

To supplement its financial data presented on a basis consistent with GAAP, this report contains certain non-GAAP financial measures, including EBITDA and Adjusted EBITDA. The Company has included these non-GAAP financial measures because they are financial measures used by management to evaluate the Company's core operating performance and trends, to make strategic decisions regarding the allocation of capital and new investments. These measures exclude certain expenses that are required under GAAP. The Company excludes these items because they are non-recurring or non-cash expenses that are determined based in part on the Company's underlying performance.

EBITDA and Adjusted EBITDA

We define EBITDA as net income (loss), plus taxes, interest expense, and depreciation and amortization. We define Adjusted EBITDA as EBITDA plus non-recurring transaction costs, non-cash equity compensation, restructuring and related expenses, loss/(gain) on sale of assets, impairment of goodwill and other non-recurring items such as reorganization items.

Results of Operations

Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 2024:

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​

​

​

​

​

​

​

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​

​

​

​

​

​

​

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​

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Successor

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Predecessor

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Combined (Non-GAAP)

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Predecessor

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​

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​

​

​

​

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Period from August 1, 2025 through September 30,

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Period from July 1, 2025 through July 31,

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Three Months Ended September 30,

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Three Months Ended September 30,

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2025

2025

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2025

2024

Change

% Change

Revenue (including related party revenue):

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​

​

​

​

​

​

​

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Applied Workflow Automation

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$

136,534

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​

$

52,874

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$

189,408

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$

220,337

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$

(30,929)

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​

(14.0)%

Technology

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15,873

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​

3,804

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19,677

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13,089

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6,588

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50.3%

Total revenue

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152,407

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​

56,678

​

209,085

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233,426

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(24,341)

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(10.4)%

Cost of revenue (exclusive of depreciation and amortization):

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​

​

​

​

​

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Applied Workflow Automation

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113,420

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42,413

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155,833

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185,187

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(29,354)

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(15.9)%

Technology

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5,904

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1,387

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7,291

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4,200

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3,091

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73.6%

Total cost of revenues (exclusive of depreciation and amortization)

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119,324

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43,800

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163,124

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189,387

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(26,263)

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(13.9)%

Selling, general and administrative expenses

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17,980

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10,966

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28,946

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26,824

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2,122

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7.9%

Depreciation and amortization

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9,142

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​

3,196

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12,338

​

12,100

​

238

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2.0%

Impairment of goodwill

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​

295,800

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​

​

-

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​

295,800

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​

343

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​

295,457

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86139.1%

Related party expense

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2,327

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​

599

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2,926

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2,667

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259

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9.7%

Operating profit (loss)

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(292,166)

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​

(1,883)

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(294,049)

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2,105

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(296,154)

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(14069.1)%

Interest expense, net

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9,709

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​

4,551

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14,260

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26,388

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(12,128)

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(46.0)%

Debt modification and extinguishment costs (gain), net

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​

-

​

​

​

-

​

​

-

​

​

256

​

​

(256)

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​

(100.0)%

Sundry expense (income), net

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684

​

​

(361)

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323

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(563)

​

886

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(157.4)%

Other income, net

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(923)

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(28)

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(951)

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(23)

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(928)

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4034.8%

Loss before reorganization items and income taxes

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​

(301,636)

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​

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(6,045)

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(307,681)

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(23,953)

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(283,728)

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1184.5%

Reorganization items

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​

831

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​

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(1,519,485)

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​

(1,518,654)

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​

-

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​

(1,518,654)

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​

100.0%

Net profit (loss) before income taxes

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(302,467)

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​

1,513,440

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1,210,973

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(23,953)

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1,234,926

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(5155.6)%

Income tax expense

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3,371

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​

33,347

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36,718

​

4,364

​

32,354

​

741.4%

Net profit (loss)

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$

(305,838)

​

​

$

1,480,093

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$

1,174,255

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$

(28,317)

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$

1,202,572

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(4246.8)%

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Revenue

For the three months ended September 30, 2025, our net revenue on a consolidated basis decreased by $24.3 million, or 10.4%, to $209.08 million (including related party revenue of $0.2 million) from $233.4 million (including related party revenue of $1.5 million) for the three months ended September 30, 2024.

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Applied Workflow Automation and Technology segments constituted 90.6%, and 9.4%, respectively, of our total net revenue for the three months ended September 30, 2025, compared to 94.4%, and 5.6%, respectively, for the three months ended September 30, 2024. The revenue changes by reporting segment were as follows:

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Applied Workflow Automation - Net revenue attributable to Applied Workflow Automation segment was $189.4 million for the three months ended September 30, 2025, compared to $220.3 million for the three months ended September 30, 2024. The revenue decline of $30.9 million, or 14.0%, is primarily attributable to lower postage revenue, lower one time projects and client contract ends, offset by the inclusion of newly acquired entity in the successor period and revenue from newly won business.

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Technology - For the three months ended September 30, 2025, net revenue attributable to the Technology segment increased by $6.6 million or 50.3%, to $19.7 million from $13.1 million for the three months ended September 30, 2024. The revenue increase in the Technology segment was largely due to inclusion of newly acquired entity in the successor period.

Cost of revenue

For the three months ended September 30, 2025, the cost of revenue decreased by $26.2 million, or 13.9%, compared to the three months ended September 30, 2024.

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In the Applied Workflow Automation segment, the decrease was primarily attributable to reduced cost resulting from completed projects and optimization efforts. Cost of revenue to the Applied Workflow Automation segment decreased by $29.4 million, or 15.9%.

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The cost of revenue in the Technology segment increased by $3.1 million, or 73.6%, primarily due to the inclusion of the newly acquired entity in the successor period within the Technology segment.

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The decrease in cost of revenues as a percentage of revenue on a consolidated basis was primarily due to a change in the revenue mix and executed optimization efforts. Cost of revenue for the three months ended September 30, 2025 was 78.0% of revenue compared to 81.1% of revenue for the three months ended September 30, 2024.

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Selling, general and administrative expenses

Selling, general and administrative expenses ("SG&A expenses") increased by $2.1 million, or 7.9%, to $28.9 million for the three months ended September 30, 2025, compared to $26.8 million for the three months ended September 30, 2024. The increase was primarily attributable to inclusion of newly acquired entity in successor period, asset disposal costs in relation to facility closure, receipt of insurance claim payment in 2024 offset by decrease in legal and professional fees. SG&A expenses increased as a percentage of revenues to 13.8% for the three months ended September 30, 2025 as compared to 11.5% for the three months ended September 30, 2024.

Depreciation and amortization

Total depreciation and amortization expenses were $12.3 million for the three months ended September 30, 2025 compared to $12.1 million for the three months ended September 30, 2024.

Impairment of goodwill

Impairment of goodwill for the three months ended September 30, 2025 was $295.8 million. During the period August 1, 2025 to September 30, 2025, the Company experienced a sustained and significant decline in its market capitalization causing the market capitalization to fall below the Company's book value after the application of fresh start accounting at Emergence Date. Management concluded that this sustained decline, combined with revised long-term projections compared to those used to compute enterprise value of the reconstituted Successor as set forth in the Disclosure Statement for Joint Plan of Reorganization approved by the Bankruptcy Court, represented a triggering event under ASC 350. In connection with the completion of the interim impairment test, the Company recorded an impairment charge of $215.8 million and $80.0 million to goodwill relating to the reporting units reported under the Applied Workflow Automation segment and Technology segment, respectively, during the period August 1, 2025 to September 30, 2025.

Related party expenses

Related party expense was $2.9 million for the three months ended September 30, 2025 compared to $2.7 million for the three months ended September 30, 2024.

Interest expense, net

Interest expense, net was $14.3 million for the three months ended September 30, 2025 compared to expense of $26.4 million for the three months ended September 30, 2024.

Debt modification and extinguishment costs (gain), net

There was no debt modification and extinguishment cost for the three months ended September 30, 2025 while there was $0.3 million of debt modification and extinguishment cost for the three months ended September 30, 2024.

Sundry expense (income), net

The increase in sundry expense, net of $0.9 million over the prior year period, was primarily attributable to exchange rate fluctuations on foreign currency transactions.

Other expense (income), net

Other income, net, was a gain of $0.9 million for the three months ended September 30, 2025 compared to other income, net, was a gain of $0.02 million for the three months ended September 30, 2024.

Reorganization items

Reorganization items for the three months ended September 30, 2025 includes a material net reorganization gain of $1.52 billion. This gain was predominantly from two principal accounting mandates: the gain realized from the settlement of pre-petition liabilities subject to compromise, and the gain recognized under fresh start accounting, reflecting the mandated revaluation of the balance sheet to fair value upon emergence. These substantial, positive adjustments were partially offset by the operational costs required to execute the plan, including essential legal and professional fees.

Income Tax Expense

We recorded an income tax expense of $36.7 million for the three months ended September 30, 2025 and an income tax expense of $4.4 million for the three months ended September 30, 2024. The tax expense for the three months ended September 30, 2025 is higher than the three months ended September 30, 2024 due to permanent adjustments relating to goodwill impairment and reorganization items as well as an increase in deferred tax expense relating to establishment of deferred tax liabilities on fresh start adjustments. Our estimated annual effective tax rate of 3.0% for the three months ended September 30, 2025 differed from the expected U.S. statutory tax rate of 21.0% and was primarily impacted by permanent tax adjustments including goodwill impairment and reorganization items; state and local current tax expense, foreign operations and valuation allowances.

Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Successor

​

​

Predecessor

​

Combined (Non-GAAP)

​

Predecessor

​

​

​

​

​

​

​

​

Period from August 1, 2025, through September 30,

​

​

Period from January 1, 2025, through July 31,

​

Nine Months Ended September 30,

​

Nine Months Ended September 30,

​

​

​

​

​

​

​

2025

2025

2025

2024

Change

% Change

Revenue (including related party revenue):

​

​

​

​

​

​

​

​

​

Applied Workflow Automation

​

$

136,534

​

​

$

401,593

​

$

538,127

​

$

623,490

​

$

(85,363)

​

​

(13.7)%

Technology

​

15,873

​

​

30,068

​

45,941

​

40,527

​

5,414

​

13.4%

Total revenue

​

152,407

​

​

431,661

​

584,068

​

664,017

​

(79,949)

​

(12.0)%

Cost of revenue (exclusive of depreciation and amortization):

​

​

​

​

​

​

​

Applied Workflow Automation

​

113,420

​

​

329,433

​

442,853

​

506,762

​

(63,909)

​

(12.6)%

Technology

​

5,904

​

​

10,548

​

16,452

​

13,620

​

2,832

​

20.8%

Total cost of revenues

​

119,324

​

​

339,981

​

459,305

​

520,382

​

(61,077)

​

(11.7)%

Selling, general and administrative expenses (exclusive of depreciation and amortization)

​

17,980

​

​

53,946

​

71,926

​

94,392

​

(22,466)

​

(23.8)%

Depreciation and amortization

​

9,142

​

​

22,313

​

31,455

​

38,709

​

(7,254)

​

(18.7)%

Impairment of goodwill

​

​

295,800

​

​

​

-

​

​

295,800

​

​

343

​

​

295,457

​

​

86139.1%

Related party expense

​

2,327

​

​

5,750

​

8,077

​

8,488

​

(411)

​

(4.8)%

Operating profit (loss)

​

(292,166)

​

​

9,671

​

(282,495)

​

1,703

​

(284,198)

​

(16688.1)%

Interest expense, net

​

9,709

​

​

75,226

​

84,935

​

75,339

​

9,596

​

12.7%

Debt modification and extinguishment costs (gain), net

​

​

-

​

​

​

121

​

​

121

​

​

256

​

​

(135)

​

​

(52.7)%

Sundry expense (income), net

​

684

​

​

1,644

​

2,328

​

(422)

​

2,750

​

(651.7)%

Other income, net

​

(923)

​

​

(28)

​

(951)

​

(54)

​

(897)

​

1661.1%

Loss before reorganization items and income taxes

​

​

(301,636)

​

​

​

(67,292)

​

​

(368,928)

​

​

(73,416)

​

​

(295,512)

​

​

402.5%

Reorganization items

​

​

831

​

​

​

(1,557,825)

​

​

(1,556,994)

​

​

-

​

(1,556,994)

​

​

100.0%

Net profit (loss) before income taxes

​

(302,467)

​

​

1,490,533

​

1,188,066

​

(73,416)

​

1,261,482

​

(1718.3)%

Income tax expense

​

3,371

​

​

35,875

​

39,246

​

9,410

​

29,836

​

317.1%

Net profit (loss)

​

$

(305,838)

​

​

$

1,454,658

​

$

1,148,820

​

$

(82,826)

​

$

1,231,646

​

(1487.0)%

​

Revenue

For the nine months ended September 30, 2025, our net revenue on a consolidated basis decreased by $79.9 million, or 12.0%, to $584.1 million (including related party revenue of $2.5 million) from $664.0 million (including related party revenue of $3.7 million) for the nine months ended September 30, 2024.

Applied Workflow Automation and Technology segments constituted 92.1%, and 7.9%, respectively, of our total net revenue for the nine months ended September 30, 2025, compared to 93.9%, and 6.1%, respectively, for the nine months ended September 30, 2024. The revenue changes by reporting segment were as follows:

Applied Workflow Automation - Net revenue attributable to Applied Workflow Automation segment was $538.1 million for the nine months ended September 30, 2025, compared to $623.5 million for the nine months ended September 30, 2024. The revenue decline of $85.4 million, or 13.7%, is primarily attributable to lower postage revenue, lower one time projects and client contract ends, offset by the inclusion of newly acquired entity in the successor period and revenue from newly won business.

​

Technology - For the nine months ended September 30, 2025, net revenue attributable to the Technology segment increased by $5.4 million, or 13.4%, to $45.9 million from $40.5 million for the nine months ended September 30, 2024. The revenue increase in the Technology segment was largely due to inclusion of newly acquired entity in the successor period.

Cost of revenue

For the nine months ended September 30, 2025, the cost of revenue decreased by $61.1 million, or 11.7%, compared to the nine months ended September 30, 2024.

​

In the Applied Workflow Automation segment, the decrease was primarily attributable to reduced cost resulting from completed projects and optimization efforts. Cost of revenue to the Applied Workflow Automation segment decreased by $63.9 million, or 12.6%.

​

The cost of revenue in the Technology segment increased by $2.8 million, or 20.8%, primarily due to the inclusion of the newly acquired entity in the successor period within the Technology segment.

​

Cost of revenue for the nine months ended September 30, 2025 was 78.6% of revenue compared to 78.4% of revenue for the nine months ended September 30, 2024. The marginal increase in cost of revenues as a percentage of revenue on a consolidated basis was primarily due to changes in revenue mix during the current period.

​

Selling, general and administrative expenses

Selling, general and administrative expenses ("SG&A expenses") decreased $22.5 million, or 23.8%, to $71.9 million for the nine months ended September 30, 2025, compared to $94.4 million for the nine months ended September 30, 2024. The decrease was primarily attributable to a lower provision for bad debts, decrease in legal and professional fees, and a one-time benefit from the write-off of certain aged liabilities, these favorable impacts were partially offset by an increase in government penalties, higher severance payouts associated with restructuring initiatives, receipt of insurance claim payment in 2024 and the inclusion of incremental SG&A expenses from the newly acquired entity. SG&A expenses decreased as a percentage of revenue to 12.3% for the nine months ended September 30, 2025 as compared to 14.2% for the nine months ended September 30, 2024.

Depreciation and amortization

Total depreciation and amortization expenses were $31.5 million for the nine months ended September 30, 2025 compared to $38.7 million for the nine months ended September 30 2024.

Impairment of goodwill

Impairment of goodwill for the nine months ended September 30, 2025 was $295.8 million. During the period August 1, 2025 to September 30, 2025, the Company experienced a sustained and significant decline in its market capitalization causing the market capitalization to fall below the Company's book value after the application of fresh start accounting at Emergence Date. Management concluded that this sustained decline, combined with revised long-term projections compared to those used to compute enterprise value of the reconstituted Successor as set forth in the Disclosure Statement for Joint Plan of Reorganization approved by the Bankruptcy Court, represented a triggering event under ASC 350. In connection with the completion of the interim impairment test, the Company recorded an impairment charge of $215.8 million and $80.0 million to goodwill relating to the reporting units reported under the Applied Workflow Automation segment and Technology segment, respectively, during the period August 1, 2025 to September 30, 2025.

Related party expenses

Related party expense was $8.1 million for the nine months ended September 30, 2025 compared to $8.5 million for the nine months ended September 30, 2024.

Interest expense, net

Interest expense, net was $85.0 million for the nine months ended September 30, 2025 compared to $75.3 million for the nine months ended September 30, 2024.

Debt modification and extinguishment costs (gain), net

There was $0.1 million of debt modification and extinguishment cost for the nine months ended September 30, 2025 while there was $0.3 million debt modification and extinguishment cost for the nine months ended September 30, 2024.

Sundry expense (income), net

The increase in sundry expense, net of $2.8 million over the prior year period, was primarily attributable to exchange rate fluctuations on foreign currency transactions.

Other expense (income), net

Other income, net was a gain of $0.9 million for the nine months ended September 30, 2025 compared to other income, net was a gain of $0.1 million for the nine months ended September 30, 2024.

Reorganization items

Reorganization items for the nine months ended September 30, 2025 includes a material net reorganization gain of $1.56 billion. This gain was predominantly non-cash, stemming from two principal accounting mandates: the gain realized from the settlement of pre-petition liabilities subject to compromise, the gain recognized under Fresh Start Accounting, further augmented by a non-cash gain resulting from the mandatory derecognition of unamortized debt discount, premium and issuance costs associated with the extinguishment of the prior capital structure, reflecting the mandated revaluation of the balance sheet to fair value upon emergence. These substantial, positive adjustments were partially offset by the operational costs required to execute the plan, including essential legal and professional fees.

Income Tax Expense

We recorded an income tax expense of $39.2 million for the nine months ended September 30, 2025 and an income tax expense of $9.4 million for the nine months ended September 30, 2024. The tax expense for the nine months ended September 30, 2025 is higher than the nine months ended September 30, 2024 due to permanent adjustments relating to goodwill impairment and reorganization items as well as an increase in deferred tax expense relating to establishment of deferred tax liabilities on Fresh Start adjustments. Our estimated annual effective tax rate of 3.3% for the nine months ended September 30, 2025 differed from the expected U.S. statutory tax rate of 21.0% and was primarily impacted by permanent tax adjustments including goodwill impairment and reorganization items; state and local current tax expense, foreign operations and valuation allowances.

Other Financial Information (Non-GAAP Financial Measures)

We view EBITDA and Adjusted EBITDA as important indicators of performance. We define EBITDA as net (loss) income, plus income tax expenses, interest expense, net and depreciation and amortization.

We present EBITDA and Adjusted EBITDA because we believe they provide useful information regarding the factors and trends affecting our business in addition to measures calculated under GAAP.

Note Regarding Non-GAAP Financial Measures

EBITDA and Adjusted EBITDA are not financial measures presented in accordance with GAAP. We believe that the presentation of these non-GAAP financial measures will provide useful information to investors in assessing our financial performance and results of operations as our board of directors and management use EBITDA and Adjusted EBITDA to assess our financial performance, because it allows them to compare our operating performance on a consistent basis across periods by removing the effects of our capital structure (such as varying levels of interest expense), asset base (such as depreciation and amortization) and items outside the control of our management team. Net income/loss is the GAAP measure most directly comparable to EBITDA and Adjusted EBITDA. Our non-GAAP

financial measures should not be considered as alternatives to the most directly comparable GAAP financial measure. Each of these non-GAAP financial measures have important limitations as analytical tools because they exclude some but not all items that affect the most directly comparable GAAP financial measures. These non-GAAP financial measures are not required to be uniformly applied, are not audited and should not be considered in isolation or as substitutes for results prepared in accordance with GAAP. Because EBITDA and Adjusted EBITDA may be defined differently by other companies in our industry, our definitions of these non-GAAP financial measures may not be comparable to similarly titled measures of other companies, thereby diminishing their utility. We define Pro forma Adjusted EBITDA as Adjusted EBITDA plus management's estimates of the impact of the acquisition of XBP Europe Holdings, Inc. and reorganization of BPA, had such transactions occurred at the beginning of the earliest period presented.

Three Months Ended September 30, 2025 Compared to the Three Months Ended September 30, 2024

The following table presents a reconciliation of EBITDA, Adjusted EBITDA and Pro forma Adjusted EBITDA to our net profit (loss), the most directly comparable GAAP measure, for the periods August 1, 2025 to September 30, 2025 (Successor), July 1, 2025 to July 31, 2025 (Predecessor) and the three months ended September 30, 2024 (Predecessor).

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Successor

​

​

Predecessor

​

Combined (Non-GAAP)

​

Predecessor

​

​

Period from August 1, 2025 through September 30,

​

​

Period from July 1, 2025 through July 31,

​

Three Months Ended September 30,

​

Three Months Ended September 30,

​

2025

2025

2025

2024

Net profit (loss)

​

$

(305,838)

​

​

$

1,480,093

​

$

1,174,255

​

$

(28,317)

Income tax expense

​

3,371

​

​

33,347

​

36,718

​

4,364

Interest expense, net

​

9,709

​

​

4,551

​

14,260

​

26,388

Depreciation and amortization

​

9,142

​

​

3,196

​

12,338

​

12,100

EBITDA

​

(283,616)

​

​

1,521,187

​

1,237,571

​

14,535

Transactions costs (1)

​

2,615

​

​

-

​

2,615

​

-

Non-cash equity compensation (2)

​

258

​

​

-

​

258

​

92

Restructuring and related expenses (3)

​

​

888

​

​

​

-

​

​

888

​

​

-

Loss/(gain) on sale of assets (4)

​

​

190

​

​

​

1,967

​

​

2,157

​

​

(25)

Debt modification and extinguishment costs (gain), net

​

​

-

​

​

​

-

​

​

-

​

​

256

Network outage event related insurance recoveries

​

​

-

​

​

​

-

​

​

-

​

​

(3,550)

Reorganization items

​

​

831

​

​

​

(1,519,485)

​

​

(1,518,654)

​

​

-

Impairment of goodwill

​

295,800

​

​

-

​

295,800

​

343

Adjusted EBITDA

​

​

16,966

​

​

​

3,669

​

​

20,635

​

​

11,651

Impact of acquisition and reorganization (5)

​

​

​

​

​

​

​

​

​

(1,252)

​

​

2,526

Pro forma Adjusted EBITDA

​

​

​

​

​

​

​

​

$

19,383

​

$

14,177

​

(1)

Represents non-recurring legal, consulting and other fees and expenses incurred in connection with acquisitions, dispositions, debt-exchanges and other extraordinary transactions and events during the applicable period.

(2)

Represents the non-cash charges related to stock-based compensation.

(3)

Represents one-time costs associated with restructuring, including employee severance, legal, and lease termination costs.

(4)

Represents a loss/(gain) recognized on the disposal of property, plant, and equipment and other assets.

(5)

Represents management's estimates of the impact of the acquisition of XBP Europe Holdings, Inc. and reorganization of BPA, had such transactions occurred at the beginning of fiscal 2024.

​

Nine Months Ended September 30, 2025 Compared to the Nine Months Ended September 30, 2024

The following table presents a reconciliation of EBITDA, Adjusted EBITDA and Pro forma Adjusted EBITDA to our net profit (loss), the most directly comparable GAAP measure, for the periods August 1, 2025 to September 30,

2025 (Successor), January 1, 2025 to July 31, 2025 (Predecessor) and the nine months ended September 30, 2024 (Predecessor).

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Successor

​

​

​

Predecessor

​

​

Combined (Non-GAAP)

​

​

Predecessor

​

​

​

Period from August 1, 2025 through September 30,

​

​

​

Period from January 1, 2025 through July 31,

​

​

Nine Months Ended September 30,

​

​

Nine Months Ended September 30,

​

2025

2025

2025

2024

Net profit (loss)

​

$

(305,838)

​

​

$

1,454,658

​

$

1,148,820

​

$

(82,826)

Income tax expense

​

3,371

​

​

35,875

​

39,246

​

9,410

Interest expense, net

​

9,709

​

​

75,226

​

84,935

​

75,339

Depreciation and amortization

​

9,142

​

​

22,313

​

31,455

​

38,709

EBITDA

​

(283,616)

​

​

1,588,072

​

1,304,456

​

40,632

Transactions costs (1)

​

2,615

​

​

-

​

2,615

​

151

Non-cash equity compensation (2)

​

258

​

​

204

​

462

​

1,491

Restructuring and related expenses (3)

​

​

888

​

​

​

-

​

​

888

​

​

-

Loss/(gain) on sale of assets (4)

​

​

190

​

​

​

1,967

​

​

2,157

​

​

(558)

Debt modification and extinguishment costs (gain), net

​

​

-

​

​

​

121

​

​

121

​

​

256

Network outage event related insurance recoveries

​

​

-

​

​

​

-

​

​

-

​

​

(3,550)

Reorganization items

​

​

831

​

​

​

(1,557,825)

​

​

(1,556,994)

​

​

-

Impairment of goodwill

​

295,800

​

​

-

​

295,800

​

343

Adjusted EBITDA

​

​

16,966

​

​

​

32,539

​

​

49,505

​

​

38,765

Impact of acquisition and reorganization (5)

​

​

​

​

​

​

​

​

​

2,937

​

​

1,678

Pro forma Adjusted EBITDA

​

​

​

​

​

​

​

​

$

52,442

​

$

40,443

​

(1)

Represents non-recurring legal, consulting and other fees and expenses incurred in connection with acquisitions, dispositions, debt-exchanges and other extraordinary transactions and events during the applicable period.

(2)

Represents the non-cash charges related to stock-based compensation.

(3)

Represents one-time costs associated with restructuring, including employee severance, legal, and lease termination costs.

(4)

Represents a loss/(gain) recognized on the disposal of property, plant, and equipment and other assets.

(5)

Represents management's estimates of the impact of the acquisition of XBP Europe Holdings, Inc. and reorganization of BPA, had such transactions occurred at the beginning of fiscal 2024.

Liquidity and Capital Resources

Overview

Our primary source of liquidity is principally cash generated from operating activities supplemented as necessary on a short-term basis by borrowings. We believe our current level of cash and short term financing capabilities along with future cash flows from operations are sufficient to meet the needs of the business.

Liquidity is the availability of adequate amounts of cash with an enterprise to meet its needs for cash requirements. At September 30, 2025 and December 31, 2024 cash, restricted cash, and cash equivalents totalled $64.2 million and $64.1 million, respectively, including restricted cash of $29.7 million and $52.4 million, respectively.

In the ordinary course of business, we enter into contracts and commitments that obligate us to make payments in the future. These obligations include borrowings, interest obligations, purchase commitments, operating and finance lease commitments, employee benefit payments and taxes. The current maturities under the Second Lien Note, the secured borrowings under the BR Exar AR Facility, 2028 Term Loan Facilities (as defined and further described in "Indebtedness" below) and the other debts are $17.5 million, $8.2 million, $3.9 million and $6.8 million, respectively. See Note 7, Long-Term Debt and Credit Facilities, Note 9, Employee Benefit Plans, and Note 10, Commitments and Contingencies, to our condensed consolidated and combined financial statements herein for further information on material cash requirements from known contractual and other obligations.

The Predecessor recently emerged from the Chapter 11 Cases. As a result, near-term liquidity is expected to be negatively impacted due to the requirement to satisfy all pre-petition liabilities pursuant to the Plan. This constrained liquidity is expected to continue until such time as these liabilities are fully settled.

We plan to spend approximately 1.0% of total revenue on total capital expenditures over the next twelve months. Our business model has evolved to leverage cloud hosted platforms. This has reduced our capital expenditures and increased our operating expenses. This is the primary driver of changes in our capital expenditures when compared with historical periods. Our future cash requirements will depend on many factors, including our rate of revenue growth, our investments in strategic initiatives, applications or technologies, operation centers and acquisition of complementary businesses, which may require the use of significant cash resources and/or additional equity or debt financing. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all, which may adversely impact our business, operating results and financial condition.

The Company utilized COVID-19 relief measures in various European jurisdictions, including permitted deferrals of certain payroll, social security and value added taxes. At the end of the third quarter 2024, the Company paid a significant portion of these deferred payroll taxes, social security and value added taxes. The remaining balance of deferred payroll taxes, social security and value added taxes is expected to be paid by April 2027, or later, as per deferment timelines as established by local laws and regulations.

The Company believes the current cash, cash equivalents and cash flows from operating and financing activities are sufficient to meet the Company's working capital and capital expenditure requirements for a period of at least twelve months. To the extent existing cash, cash from operations, and amounts available for borrowing are insufficient to fund future activities, the Company may need to raise additional capital. The Company may require funding for a variety of reasons, including, but not limited to, cost overruns for reasons outside of its control and it may experience slower sales than anticipated. If the Company's current cash on hand is not sufficient to meet its financing requirements for the next twelve months, it may have to raise funds to allow it to continue to operate its business and execute on its business plan. The Company cannot be certain that funding will be available on acceptable terms or at all particularly given the amount of Company securities being offered, the terms of such securities and the potential duration of any offering. To the extent that the Company raises additional funds by issuing equity securities, its stockholders may experience significant dilution. Any debt financing, if available, may involve restrictive covenants that may impact the Company's ability to conduct business or return capital to investors. If the Company is unable to raise additional capital on acceptable terms, it may have to significantly scale back, delay or discontinue certain businesses, restrict its operations or obtain funds by entering into agreements on unattractive terms.

​

Cash Flows

The following table summarizes our cash flows for the periods indicated:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Successor

​

​

Predecessor

​

Combined (Non-GAAP)

​

Predecessor

​

​

​

​

​

Period from August 1 through September 30,

​

​

Period from January 1 2025 through July 31,

​

Nine Months Ended September 30,

​

Nine Months Ended September 30,

​

​

​

​

2025

2025

2025

2024

Change

Net cash provided by (used in) operating activities

​

$

13,866

​

​

$

(159,942)

​

$

(146,076)

​

$

(7,009)

​

$

(139,067)

Net cash used in investing activities

​

(3,266)

​

​

(2,690)

​

(5,956)

​

(4,275)

​

​

(1,681)

Net cash provided by (used in) financing activities

​

9,978

​

​

145,264

​

155,242

​

(3,428)

​

158,670

Subtotal

​

$

20,578

​

​

$

(17,368)

​

$

3,210

​

(14,712)

​

$

17,922

Effect of exchange rates on cash, restricted cash and cash equivalents

​

(234)

​

​

(2,806)

​

(3,040)

​

(1,129)

​

(1,911)

Net increase (decrease) in cash, restricted cash and cash equivalents

​

$

20,344

​

​

$

(20,174)

​

$

170

​

$

(15,841)

​

$

16,011

​

Analysis of Cash Flow Changes between the nine months ended September 30, 2025 and September 30, 2024

Operating Activities- The increase of $139.1 million in net cash used in operating activities for the nine months ended September 30, 2025 was primarily due to increase in accounts receivable of approximately $94.5 million as collections slowed post-emergence, and a noncash reorganization gain related to our reorganization of $1.6 billion recorded in 2025. These factors were partially offset by lower cost of revenue of $61.1 million, lower selling, general

and administrative expenses of $22.5 million, and a $7.6 million reduction in depreciation and amortization expense reflecting cost optimization following emergence from Chapter 11 Cases.

Investing Activities- The increase of $1.7 million in net cash used in investing activities for the nine months ended September 30, 2025 was primarily due to a $1.3 million increase in purchase of property, plant and equipment and $2.8 million decrease in sale of assets partially offset by a $1.0 million reduction in additions to internally developed software.

Financing Activities- Cash provided by financing activities during the nine months ended September 30, 2025 was $155.2 million, primarily as a result of $33.8 million of proceeds from borrowings under the BR Exar AR Facility, $18.0 million of proceeds from the Revolving Credit Facility, $80 million from DIP New Money, $40.0 million of proceeds from the Super Senior Secured Term Loan, $81.9 million of proceeds from the ABL Facility and $5.2 million of net proceeds from other loans. These inflows were partially offset by $32.7 million of repayments under the BR Exar AR Facility, $44.9 million of principal repayments on BPA's prepetition senior secured financing agreement and other loans, $8.0 million of repayments on the Second Lien Note, $9.6 million of repayment under the ABL Facility, $3.7 million of principal payments on finance lease obligations, and $4.7 million for debt issuance costs.

Cash used in financing activities during the nine months ended September 30, 2024 was $3.4 million. This was primarily due to $45.4 million in borrowings under the BR Exar AR Facility and $7.1 million in proceeds from other loans, which were offset by $37.5 million in repayments under the BR Exar AR Facility, $4.0 million of repayments on the Second Lien Note, $8.6 million in principal repayments on BPA's prepetition senior secured financing agreement and other loans, $5.5 million of principal repayments on finance lease obligations, and $0.4 million for debt issuance costs.

Indebtedness

Following is a description of the Company's key indebtedness.

July 2030 Notes

On July 29, 2025, Exela Technologies BPA, LLC and Exela Finance Inc., wholly-owned subsidiaries of the Company (for this purpose, together, the "2030 Notes Issuers"), certain guarantors and U.S. Bank Trust Company, National Association, as trustee, entered into an indenture (the "July 2030 Notes Indenture") governing the Company's 12.0% First-Priority Senior Secured Notes due 2030 (the "July 2030 Notes"). The Company issued approximately $183.0 million aggregate principal amount of the July 2030 Notes pursuant to the Plan, which may be supplemented by additional issuances in accordance with the July 2030 Notes Indenture. The July 2030 Notes bear interest at a fixed rate of 12.0% per annum, payable quarterly on January 15, April 15, July 15 and October 15 of each year, commencing January 15, 2026, and mature on July 15, 2030. Interest on overdue amounts accrues at the stated rate plus 2.0% per annum. $183.0 million aggregate principal amount of the July 2030 Notes remained outstanding as of September 30, 2025.

The July 2030 Notes may be redeemed, in whole or in part, at the 2030 Notes Issuers' option at any time, upon not less than 10 nor more than 30 days' prior notice, at a redemption price equal to 100% of the principal amount redeemed plus accrued and unpaid interest to, but excluding, the redemption date. In addition, the July 2030 Notes are subject to repurchase requirements upon the occurrence of certain specified events, including upon a change of control event at 101% of principal plus accrued and unpaid interest and on certain asset sales or debt proceeds at 100% of principal plus accrued and unpaid interest.

The July 2030 Notes Indenture limits the ability of the 2030 Notes Issuers and the guarantors to incur additional debt, pay dividends or make other restricted payments, make certain investments, create or permit liens on assets, sell or dispose of assets, and enter into transactions with affiliates, in each case subject to specified exceptions. Events of default include the failure to pay principal, interest or other amounts when due, the failure to comply with covenants or other agreements in the July 2030 Notes Indenture, defaults on other material indebtedness of the 2030 Notes Issuers or the guarantors, certain bankruptcy or insolvency events, and the entry of material judgments against the 2030 Notes

Issuers or the guarantors. If an event of default occurs and is continuing, the July 2030 Notes may be declared immediately due and payable, and in the case of bankruptcy or insolvency events, the July 2030 Notes automatically become immediately due and payable.

The obligations under the July 2030 Notes are fully and unconditionally guaranteed on a senior secured basis by the 2030 Notes Issuers' U.S. subsidiary guarantors, and are secured by liens on the collateral of the 2030 Notes Issuers and such guarantors, subject to permitted liens and the terms of the Super Senior and Equal Priority Intercreditor Agreements. Under these agreements, the ABL Lenders (as described below) hold first-priority liens on receivables, inventory, cash and related assets, while the Super Senior Term Loan Lenders (as described below) and July 2030 Noteholders hold junior liens on such assets. With respect to fixed assets, equity interests, intellectual property and related assets, the Super Senior Term Loan Lenders and July 2030 Noteholders share equal first-priority liens on a pari passu basis, while the ABL Lenders hold junior liens.

Super Senior Term Loan

On July 29, 2025, Exela Technologies BPA, LLC and Exela Finance Inc. (for this purpose, together, the "Super Senior Term Loan Borrowers"), each subsidiary of the Exela Technologies BPA, LLC as guarantors, Ankura Trust Company, LLC, as administrative agent and collateral agent, and certain lenders (the "Super Senior Term Loan Lenders") entered into a Financing Agreement (the "Super Senior Term Loan"), in accordance with the Plan. The Super Senior Term Loan provides for an aggregate principal amount of up to $46.0 million in senior secured term loans, consisting of (i) $40.0 million in new-money term loans, used to refinance obligations under BPA's prepetition senior secured financing agreement and pay related fees and expenses, and (ii) $6.0 million in term loans issued to DIP lenders in exchange for and in full satisfaction of $10.0 million of DIP claims as contemplated by the Plan. Interest on the Super Senior Term Loan accrues, at the Super Senior Term Loan Borrowers' election, either (a) at the Reference Rate, meaning the greatest of 4.0% per annum, the Federal Funds Effective Rate plus 0.5% per annum, one-month Term SOFR plus 1.0% per annum, or the Wall Street Journal Prime Rate plus 10.7% per annum, stepping down to 7.3% per annum upon the establishment of an Incremental Facility, or (b) at Term SOFR, subject to a 4.0% floor, plus 11.7% per annum, stepping down to 8.3% per annum upon the establishment of an Incremental Facility. Interest on Reference Rate Loans is payable monthly in arrears, while interest on SOFR Loans is payable at the end of each applicable interest period. Upon the occurrence of an event of default, all outstanding amounts bear interest at the applicable rate plus 2.0% per annum, payable on demand.

As of September 30, 2025, there were borrowings of $46.0 million outstanding under the Super Senior Term Loan. The Super Senior Term Loan is scheduled to mature on July 28, 2028. Voluntary prepayments are permitted at any time with five business days' notice, provided accrued interest is paid and, if applicable, a prepayment premium is payable at a rate of 2.0% if prepaid prior to the first anniversary of the Emergence Date, 1.0% if prepaid on or after the first anniversary but prior to the second anniversary, and 0% thereafter. In addition, the Super Senior Term Loan is subject to mandatory prepayments of principal with accrued interest in certain circumstances, including (a) 25.0% of annual Excess Cash Flow (beginning with the fiscal year ending December 31, 2026, payable within ten business days after delivery of annual financial statements), (b) 100% of net cash proceeds from non-permitted asset sales in excess of $0.5 million in any fiscal year subject to reinvestment rights, (c) 100% of net cash proceeds from the issuance of indebtedness or equity securities (other than permitted issuances), and (d) certain extraordinary receipts, such as insurance recoveries and condemnation awards, subject to reinvestment rights. Upon the occurrence of an event of default such as payment defaults, covenant breaches, bankruptcy or insolvency, cross-defaults to other significant indebtedness, and judgment defaults etc., the obligations under the Super Senior Term Loan may be accelerated and become immediately due and payable.

The obligations under the Super Senior Term Loan are guaranteed on a joint and several basis by substantially all of the Super Senior Term Loan Borrowers' subsidiaries and are secured by a first-priority lien on substantially all of the assets of the Super Senior Term Loan Borrowers' and the guarantors, subject to permitted liens and the terms of the ABL Intercreditor Agreement (as described below) and that certain Super Senior Intercreditor Agreement. The Super Senior Term Loan contains customary affirmative and negative covenants, including limitations on additional indebtedness, the granting of liens, asset sales, restricted payments, affiliate transactions, and changes in business. It also includes a financial covenant requiring the Issuer to maintain the ratio of (a) Indebtedness to (b) Covenant Consolidated

EBITDA of no greater than 1.00 to 1.00 based on the trailing 12 months ended as of the last day of the most recently ended fiscal quarter. The Super Senior Term Loan Borrowers are also required to maintain liquidity of at least $2.0 million (or $10.0 million after the incurrence of any Incremental Facility). The Super Senior Term Loan Borrowers were in compliance with all financial covenants as of September 30, 2025.

Second Lien Note

On February 27, 2023, BPA, through its subsidiary Exela Receivables 3, LLC, and BRF Finance Co., LLC had entered into a new Secured Promissory Note pursuant to which BPA borrowed $31.5 million from BRF Finance Co., LLC secured by a second lien pledge of Exela Receivables 3, LLC, a subsidiary of BPA (the "Second Lien Note"). The Second Lien Note was originally scheduled to mature on June 17, 2025 and bears interest at a per annum rate of one-month Term SOFR plus 7.5%. On July 29, 2025, the Company entered into an Amended and Restated Second Lien Credit Agreement with BRF Finance Co., LLC. The amendment was executed in connection with BPA's emergence from the Chapter 11 Cases to align the terms of the Second Lien Note with the Company's new capital structure and intercreditor arrangements. The revised agreement extended the maturity of the Second Lien Note to March 30, 2026.

The obligations under the Second Lien Note are fully and unconditionally guaranteed by certain subsidiaries of BPA and are secured by liens on BPA's and certain guarantors' assets, including accounts receivable, inventory, cash and deposit accounts, equipment, real property, equity interests in subsidiaries, intercompany obligations, general intangibles, and other related assets. Pursuant to the ABL Intercreditor Agreement, BRF Finance Co., LLC's liens are subordinated to the liens securing the Company's senior debt facilities specifically, the ABL Facility with respect to receivables, inventory, cash, and related assets, and the Super Senior Term Loan and July 2030 Notes with respect to fixed assets, equity interests, and other non-ABL assets. As a result, the obligations under the Second Lien Note are effectively second-priority liens behind the senior secured debt. The Second Lien Notes requires the borrowers to maintain a minimum fixed charge coverage ratio, calculated on a trailing twelve-month basis. The minimum required ratio varies depending on the period: for the defined periods tested quarterly through December 31, 2025, and monthly from January 1, 2026, through June 30, 2026, the fixed charge coverage ratio must be not less than 0.85 to 1.00. Thereafter, for the defined periods tested monthly from July 1, 2026, through the maturity date, the fixed charge coverage ratio must be not less than 1.00 to 1.00. The Company was in compliance with all financial covenants as of September 30, 2025.

During 2024 (Predecessor), the Company had repaid $6.0 million principal amount of the Second Lien Note. During the periods January 1, 2025 to July 31, 2025 (Predecessor) and August 1, 2025 to September 30, 2025 (Successor), the Company repaid $6.0 million and $2.0 million, respectively, in principal amount of the Second Lien Note. The loss on early extinguishment of debt during the period July 1, 2025 to July 31, 2025 and January 1, 2025 to July 31, 2025 totaled $0 and $0.1 million, respectively and represents write off of debt issuance costs. Loss on the early extinguishment of debt is reported within debt modification and extinguishment costs (gain), net within the Company's condensed consolidated and combined statements of operations. As of September 30, 2025, there were borrowings of $17.5 million outstanding under the Second Lien Note included in the current portion of long-term debt in the condensed consolidated balance sheet.

ABL Facility

On July 29, 2025, Exela Technologies BPA, LLC and certain of its subsidiaries (collectively, the "ABL Borrowers") entered into a $150.0 million Asset-Based Lending Credit and Security Agreement (the "ABL Facility") with MidCap Funding IV Trust, as administrative and collateral agent, and a syndicate of lenders (the "ABL Lenders"). The ABL Facility was executed in connection with the BPA's emergence from the Chapter 11 Cases and provides for revolving commitments of up to $150.0 million, with an option to increase to $175.0 million through an additional tranche. The borrowing availability under the ABL Facility is limited to the lesser of (i) the aggregate revolving commitments and (ii) the borrowing base, which is calculated by reference to eligible billed and unbilled receivables, certain other receivables, eligible cash, and related assets, reduced by reserves established by the Agent. Borrowings under the ABL Facility bear an interest at Term SOFR plus an applicable margin ranging from 3.8% to 4.3%, depending on the ABL Borrowers' trailing twelve-month EBITDA, subject to a 1.0% SOFR floor. Interest is payable monthly, with a 2.0% default premium. In addition to interest, the ABL Borrowers are required to pay an unused commitment fee of 0.5% per annum on the average daily unused portion of the commitments, customary letter of credit fees on the face amount of each outstanding letter of credit, a collateral management fee payable to the Agent, and a minimum balance fee if borrowings under the ABL Facility fall below 20.0% of the Borrowing Base.

As of September 30, 2025, there were borrowings of $72.1 million outstanding under the ABL Facility. The ABL Facility matures on July 29, 2028, and may be prepaid at any time without penalty (other than breakage costs). Mandatory repayments are required from proceeds of dispositions of the ABL Priority Collateral, insurance proceeds, or upon acceleration following an event of default. The events of default include failure to pay principal, interest or fees when due; breaches of covenants or other material contractual obligations; materially inaccurate representations or warranties; failure to pay specified other indebtedness above $25.0 million; bankruptcy or insolvency; final unsatisfied judgments; ERISA-related defaults; and a change in control.

The obligations under the ABL Facility are guaranteed on a joint and several basis by substantially all of the ABL Borrowers' U.S. subsidiaries. The liens securing the ABL Facility are subject to an Intercreditor Agreement (the "ABL Intercreditor Agreement") dated July 29, 2025, among MidCap Funding IV Trust, Ankura Trust Company, LLC, as Term Agent, BRF Finance Co., LLC, as Riley Agent, and U.S. Bank Trust Company, National Association, as July 2030 Notes Trustee. The ABL Intercreditor Agreement governs lien priorities including (i) relative priorities for the collateral securing the ABL Facility obligations, the Super Senior Term Loan obligations, the July 2030 Notes Indenture obligations and the Second Lien Note obligations; (ii) collateral priorities securing (a) any Second Lien Note obligations, (b) any Super Senior Term Loan obligations, (c) any July 2030 Notes Indenture obligations, or (d) any Excess ABL Debt; and (iii) prohibition on contesting liens. The ABL Facility is secured by a first-priority lien on certain ABL Priority Collateral (including receivables, cash, inventory, deposit accounts, and related assets) and a junior lien on certain Term Priority Collateral, subject to the ABL Intercreditor Agreement.

The ABL Facility includes customary affirmative covenants such as reporting, collateral maintenance, insurance, and inspections, and negative covenants, including restrictions on additional indebtedness, liens, asset sales, investments, affiliate transactions, and changes in business, with a minimum fixed charge coverage ratio, tested if excess availability falls below a defined threshold. The ABL Facility requires the ABL Borrowers to maintain a minimum fixed charge coverage ratio, calculated on a trailing twelve-month basis. The fixed charge coverage ratio is defined as the ratio of EBITDA less Unfinanced Capital Expenditures less Capitalized Software Expenditures, to Fixed Charges (as such terms are defined in the ABL Facility). The minimum required ratio varies depending on the period: for the defined periods tested quarterly through December 31, 2025, and monthly from January 1, 2026, through June 30, 2026, the fixed charge coverage ratio must be not less than 0.85 to 1.00.

Thereafter, for the defined periods tested monthly from July 1, 2026, through the maturity date, the fixed charge coverage ratio must be not less than 1.00 to 1.00. The ABL Facility also requires maintaining minimum excess availability of not less than $7.5 million at any time for three (3) or more consecutive business days through June 30, 2026. The Company was in compliance with all financial covenants as of September 30, 2025.

Senior Credit Facilities Agreement

In June 2024, XBP Europe, Inc. a wholly-owned subsidiary of the Company, together with certain other subsidiaries, entered into a Facilities Agreement (the "Facilities Agreement") with HSBC UK Bank plc (the "HSBC") for a £15.0 million and €10.5 million secured credit facility consisting of (i) a single draw, secured Term Loan A facility in an aggregate principal amount of £3.0 million (the "2028 Term Loan A Facility"), (ii) a single draw, secured Term Loan B facility in an aggregate principal amount of €10.5 million (the "2028 Term Loan B Facility", collectively with the 2028 Term Loan A Facility, the "2028 Term Loan Facilities") and (iii) a multi-draw, multi-currency secured revolving credit facility in an aggregate principal amount of £12.0 million (the "Revolving Credit Facility"), and, together with the 2028 Term Loan Facilities, (the "Senior Credit Facilities"). The 2028 Term Loan Facilities mature on June 26, 2028 and the Revolving Credit Facility matures on June 26, 2027, with certain extension rights at the discretion of HSBC. Borrowings under the 2028 Term Loan A Facility, the 2028 Term Loan B Facility and Revolving Credit Facility bear interest at a rate per annum equal to the SONIA plus the applicable margin of 3.25%, Euro Interbank Offered Rate ("EURIBOR") plus the applicable margin of 3.25% and Reference Rate plus the applicable margin of 3.25%, respectively. "Reference Rate" for any period means (i) Secured Overnight Financing Rate ("SOFR") for funds extended in U.S. Dollars; (ii) the EURIBOR, for funds extended in Euros; (iii) the SONIA, for funds extended in Pounds Sterling; and the Stockholm Interbank Offered Rate ("STIBOR") for funds extended in Swedish Krona.

On July 25, 2025, an amendment to the Facilities Agreement was executed to permit the borrowing of an additional sum of €16.1 million, equivalent of £14.0 million, under the Revolving Credit Facility. The drawdowns were made in Euro and used for general corporate purposes. This amendment extended the maturity of the Revolving Credit Facility to June 26, 2028 and updated certain definitions and covenants reflecting the Company's new corporate structure following the Business Combination as discussed in Note 5, Business Combination.

The Secured Credit Facilities continue to be secured by first-ranking security interests over substantially all assets of XBP Europe, Inc. and other borrower and guarantor subsidiaries, including cash, receivables, inventory, intercompany receivables, shares in subsidiaries, and related assets. The amendment added a new covenant restricting XBP Global, as the parent of XBP Europe, Inc., from providing certain guarantees or other credit support. Except as otherwise provided by applicable law, all obligations under the Facilities Agreement are jointly and severally unconditionally guaranteed by the European subsidiaries of XBP Europe, Inc.

The outstanding principal amount of the 2028 Term Loan A Facility is scheduled to be repaid in fifteen (15) equal quarterly instalments of £150 thousand which commenced September 30, 2024, with the remaining outstanding principal amount of £750 thousand payable at maturity along with accrued and unpaid interest. The outstanding principal amount of the 2028 Term Loan B Facility is scheduled to be repaid in fifteen (15) equal quarterly instalments of €525 thousand which commenced September 30, 2024, with the remaining outstanding principal amount of €2.6 million payable at maturity along with accrued and unpaid interest. The Company may, at any time, prepay the principal of the Senior Credit Facilities. Each prepayment shall be accompanied by the payment of accrued interest, without any premium or penalty. However, the Company is limited to a maximum of four voluntary prepayments of the Revolving Credit Facility within any consecutive twelve-month period. During the period August 1, 2025 to September 30, 2025, the Company repaid $0.2 million of outstanding principal amount under the 2028 Term Loan A Facility and 2028 Term Loan B Facility. As of September 30, 2025, the outstanding balance of the 2028 Term Loan A Facility, the 2028 Term Loan B Facility, and the Revolving Credit Facility was approximately $2.9 million, $9.4 million, and $35.6 million, respectively.

The Facilities Agreement contains financial covenants including, but not limited to, (i) requiring the maintenance of a consolidated total leverage ratio of not greater than 2.50 to 1.00 (with step-downs to (a) 2.25 to 1.00 starting January 1, 2025 and (b) 2.00 to 1.00 starting January 1, 2026); (ii) a cash flow coverage ratio of at least 1.10:1.00; and (iii) a consolidated interest coverage ratio of not less than 4.00 to 1.00. The Facilities Agreement and indenture governing the Secured Credit Facilities contains certain affirmative and negative covenants limiting the ability of the XBP Europe, Inc. to effect mergers and change of control events as well as certain other limitations, including limitations on (i) incurrence of additional indebtedness or liens, (ii) dispositions of assets, (iii) substantial changes of the general nature of the business, (iv) entering into restrictive agreements, (v) making certain investments, loans, advances, guarantees and acquisitions, (vi) prepaying certain indebtedness, (vii) the declaration and payment of dividends or other restricted payments, (viii) engaging in transactions with affiliates, or (ix) amending certain material documents. As of September 30, 2025, the Company was in compliance with all affirmative and negative covenants under the Facilities Agreement, including any financial covenants, pertaining to its financing arrangements.

BR Exar AR Facility

On February 12, 2024, certain of the Company's subsidiaries entered into a receivables purchase agreement with BR Exar, LLC ("BREL"), an affiliate of B. Riley Commercial Capital, LLC (as subsequently amended on various dates in connection which each monthly sale of certain existing receivables, up to and including September 30, 2025 (the "BR Exar AR Facility")). The Company received an aggregate of $9.0 million and $22.1 million, net of legal and other fees of $1.0 million and $1.6 million, respectively, under the BR Exar AR Facility during the periods August 1, 2025 to September 30, 2025 (Successor) and January 1, 2025 to July 31, 2025 (Predecessor), respectively. Under the terms of the BR Exar AR Facility during the periods August 1, 2025 to September 30, 2025 (Successor) and January 1, 2025 to July 31, 2025 (Predecessor), certain of the Company's subsidiaries agreed to sell certain existing receivables and all of their future receivables to BREL until such time as BREL shall have collected $10.0 million and $25.5 million, respectively, net of any costs, expenses or other amounts paid to or owing to the buyer under the agreement. BREL collected $9.0 million and $22.1 million under the BR Exar AR Facility during the periods August 1, 2025 to September 30, 2025 (Successor) and January 1, 2025 to July 31, 2025 (Predecessor), respectively. As of September 30, 2025, and December 31, 2024, there was a $8.2 million and $7.8 million of outstanding balance, respectively, under the BR Exar AR Facility included in the current portion of long-term debt in the condensed consolidated and combined balance sheets.

Amended Factoring Agreement

On September 15, 2023, certain European subsidiaries of the Company had entered into an amendment to a secured borrowing facility (the "Amended Factoring Agreement") for a non-recourse factoring program pursuant to which an unrelated third party (the "Factor") purchases certain approved and partially approved accounts receivables (as defined in the Amended Factoring Agreement) from certain subsidiaries of the Company (the "Relevant Entities") up to a maximum amount of €15.0 million while assuming the risk of non-payment on the purchased accounts receivables up to the level of approval. The Relevant Entities have no continuing involvement in the transferred accounts receivable, other than collection and administrative responsibilities and, once sold, the accounts receivable are no longer available to satisfy creditors of the relevant entities.

The Company accounts for the transactions under the Amended Factoring Agreement as a sale under ASC 860, Transfers and Servicing, and as an off-balance sheet arrangement. Net funds received from the transfers reflect the face value of the account less a fee, which is recorded as an increase to cash and a reduction to accounts receivable outstanding in the condensed consolidated balance sheets. The Company reports the cash flows attributable to the sale of account receivables to the Factor and the cash receipts from collections made on behalf of and paid to the Factor under the Amended Factoring Agreement, on a net basis as trade accounts receivables in cash flows from operating activities in the Company's condensed consolidated statements of cash flows.

As of September 30, 2025, the Company's outstanding factored accounts receivable totaled approximately $6.8 million pursuant to the Amended Factoring Agreement, representing the face value of the factored invoices. The Company recognizes factoring costs upon disbursement of funds. The Company incurred a loss on sale of accounts receivables including expenses pursuant to the Amended Factoring Agreement totaling approximately $0.1 million for the period August 1, 2025 to September 30, 2025, which is presented in selling, general and administrative expenses (exclusive of depreciation and amortization) on the condensed consolidated statements of operations and comprehensive loss.

Additional Information with Respect to the Super Senior Term Loan Borrowers

Under the terms of the Super Senior Term Loan, the Company is required to present additional information that reflects the consolidated and combined financial condition, results of operations and cash flows of the Super Senior Term Loan Borrowers separate from the consolidated financial condition, results of operations and cash flows of the rest of the Company as of and for the periods presented. This additional information for 2025 is presented below.

Consolidated and Combined Balance Sheets as of September 30, 2025:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Successor (1)

​

Non-Super Senior Term Loan Borrower Subsidiaries (2)

​

Eliminations (3)

​

Super Senior Term Loan Borrowers (4)=(1)-(2)-(3)

​

​

Consolidated

​

Non-GAAP

​

Non-GAAP

​

Non-GAAP

​

​

September 30,

​

​

​

​

​

​

​

​

2025

​

September 30,

​

September 30,

​

September 30,

​

(Unaudited)

2025

2025

2025

Assets

​

​

​

​

​

​

​

​

Current assets

​

​

​

​

​

​

​

​

​

Cash and cash equivalents

​

$

34,534

​

$

6,768

​

$

-

​

$

27,766

Restricted cash

​

29,705

​

-

​

-

​

29,705

Accounts receivable, net

​

​

136,586

​

​

26,497

​

​

-

​

​

110,089

Related party receivables and prepaid expenses

​

​

515

​

​

-

​

​

(2,267)

​

​

2,782

Inventories, net

​

​

11,680

​

​

4,614

​

​

-

​

​

7,066

Prepaid expenses and other current assets

​

​

28,960

​

​

5,688

​

​

-

​

​

23,272

Total current assets

​

241,980

​

43,567

​

(2,267)

​

200,680

Property, plant and equipment, net

​

​

88,534

​

​

14,031

​

​

-

​

​

74,503

Operating lease right-of-use assets, net

​

​

31,304

​

​

4,514

​

​

-

​

​

26,790

Goodwill

​

​

214,264

​

​

55,847

​

​

-

​

​

158,417

Intangible assets, net

​

​

352,686

​

​

37,852

​

​

-

​

​

314,834

Other noncurrent assets

​

19,164

​

36,971

​

(36,000)

​

18,193

Total assets

​

$

947,932

​

$

192,782

​

$

(38,267)

​

$

793,417

​

​

​

​

​

​

​

​

​

​

​

​

​

Liabilities and Stockholders' Equity (Deficit)

​

​

​

​

​

​

​

​

Liabilities

​

​

​

​

​

​

​

​

Current liabilities

​

​

​

​

​

​

​

​

​

​

​

​

Current portion of long-term debt

​

$

34,863

​

$

6,200

​

$

-

​

$

28,663

Accounts payable

​

​

67,626

​

​

23,966

​

​

-

​

​

43,660

Related party payables

​

​

5,568

​

​

6,806

​

​

(2,267)

​

​

1,029

Income tax payable (receivable)

​

​

3,114

​

​

(1,503)

​

​

-

​

​

4,617

Accrued liabilities

​

​

56,389

​

​

23,070

​

​

-

​

​

33,319

Accrued compensation and benefits

​

​

55,798

​

​

22,472

​

​

-

​

​

33,326

Accrued interest

​

​

7,433

​

​

(167)

​

​

-

​

​

7,600

Customer deposits

​

​

16,853

​

​

389

​

​

-

​

​

16,464

Deferred revenue

​

​

13,138

​

​

6,092

​

​

-

​

​

7,046

Obligation for claim payment

​

​

53,902

​

​

-

​

​

-

​

​

53,902

Current portion of finance lease liabilities

​

​

5,464

​

​

-

​

​

-

​

​

5,464

Current portion of operating lease liabilities

​

​

10,215

​

​

1,785

​

​

-

​

​

8,430

Total current liabilities

​

330,363

​

89,110

​

(2,267)

​

243,520

Long-term debt, net of current maturities

​

​

346,603

​

​

62,144

​

​

(36,000)

​

​

320,459

Finance lease liabilities, net of current portion

​

​

6,684

​

​

-

​

​

-

​

​

6,684

Net defined benefit liability

​

​

12,693

​

​

11,610

​

​

-

​

​

1,083

Deferred income tax liabilities

​

​

50,368

​

​

184

​

​

-

​

​

50,184

Long-term income tax liabilities

​

​

8,057

​

​

-

​

​

-

​

​

8,057

Operating lease liabilities, net of current portion

​

​

23,195

​

​

2,876

​

​

-

​

​

20,319

Other long-term liabilities

​

​

39,466

​

​

1,879

​

​

-

​

​

37,587

Total liabilities

​

​

817,429

​

​

167,803

​

​

(38,267)

​

​

687,893

​

​

​

​

​

​

​

​

​

​

​

​

​

Total stockholder's equity

​

130,503

​

24,979

​

-

​

105,524

​

​

​

​

​

​

​

​

​

​

​

​

​

Total liabilities and stockholder's equity (deficit)

​

$

947,932

​

$

192,782

​

$

(38,267)

​

$

793,417

​

​

Consolidated and Combined Income Statements for the three months ended September 30, 2025:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Successor (1)

​

Predecessor (2)

​

Total ((3)=(1)+(2))

​

Non-Super Senior Term Loan Borrower Subsidiaries (4)

​

Eliminations (5)

​

Super Senior Term Loan Borrowers ((6)=(3)-(4)-(5))

​

​

Consolidated

​

Consolidated and Combined

​

Non-GAAP

​

Non-GAAP

​

Non-GAAP

​

Non-GAAP

​

Period from August 1, 2025 through September 30,

Period from July 1, 2025 through July 31,

For the Three Months Ended September 30,

For the Three Months Ended September 30,

For the Three Months Ended September 30,

For the Three Months Ended September 30,

​

2025

2025

2025

2025

2025

2025

Revenue

​

$

152,403

​

$

56,527

​

$

208,930

​

$

26,437

​

$

-

​

$

182,493

Related party revenue

​

​

4

​

​

151

​

​

155

​

​

82

​

​

(335)

​

​

408

Cost of revenue (exclusive of depreciation and amortization)

​

119,324

​

43,800

​

163,124

​

19,130

​

-

​

143,994

Selling, general and administrative expenses (exclusive of depreciation and amortization)

​

17,980

​

10,966

​

28,946

​

7,529

​

-

​

21,417

Depreciation and amortization

​

9,142

​

3,196

​

12,338

​

942

​

-

​

11,396

Impairment of goodwill

​

295,800

​

-

​

295,800

​

-

​

-

​

295,800

Related party expense

​

2,327

​

599

​

2,926

​

1,354

​

(335)

​

1,907

Operating loss

​

(292,166)

​

(1,883)

​

(294,049)

​

(2,436)

​

-

​

(291,613)

Other expense (income), net:

​

​

​

​

​

​

​

​

​

​

​

​

Interest expense, net

​

9,709

​

4,551

​

14,260

​

1,107

​

-

​

13,153

Sundry expense (income), net

​

684

​

(361)

​

323

​

936

​

-

​

(613)

Other income, net

​

(923)

​

(28)

​

(951)

​

(866)

​

-

​

(85)

Loss before reorganization items and income taxes

​

(301,636)

​

(6,045)

​

(307,681)

​

(3,613)

​

-

​

(304,068)

Reorganization items

​

831

​

(1,519,485)

​

(1,518,654)

​

-

​

-

​

(1,518,654)

Profit (loss) before income taxes

​

(302,467)

​

1,513,440

​

1,210,973

​

(3,613)

​

-

​

1,214,586

Income tax expense

​

3,371

​

33,347

​

36,718

​

1,254

​

-

​

35,464

Net profit (loss)

​

$

(305,838)

​

$

1,480,093

​

$

1,174,255

​

$

(4,867)

​

$

-

​

$

1,179,122

​

Consolidated and Combined Income Statements for the nine months ended September 30, 2025:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Successor (1)

​

Predecessor (2)

​

Total ((3)=(1)+(2))

​

Non-Super Senior Term Loan Borrower Subsidiaries (4)

​

Eliminations (5)

​

Super Senior Term Loan Borrowers ((6)=(3)-(4)-(5))

​

​

Consolidated

​

Consolidated and Combined

​

Non-GAAP

​

Non-GAAP

​

Non-GAAP

​

Non-GAAP

​

Period from August 1, 2025 through September 30,

Period from January 1, 2025 through July 31,

For the Nine Months Ended September 30,

For the Nine Months Ended September 30,

For the Nine Months Ended September 30,

For the Nine Months Ended September 30,

​

2025

2025

2025

2025

2025

2025

Revenue

​

$

152,403

​

$

429,187

​

$

581,590

​

$

26,437

​

$

-

​

$

555,153

Related party revenue

​

​

4

​

​

2,474

​

​

2,478

​

​

82

​

​

(335)

​

​

2,731

Cost of revenue (exclusive of depreciation and amortization)

​

119,324

​

339,981

​

459,305

​

19,130

​

-

​

440,175

Selling, general and administrative expenses (exclusive of depreciation and amortization)

​

​

17,980

​

53,946

​

71,926

​

7,529

​

-

​

64,397

Depreciation and amortization

​

​

9,142

​

22,313

​

31,455

​

942

​

-

​

30,513

Impairment of goodwill

​

​

295,800

​

-

​

295,800

​

-

​

-

​

295,800

Related party expense

​

​

2,327

​

5,750

​

8,077

​

1,354

​

(335)

​

7,058

Operating profit (loss)

​

​

(292,166)

​

9,671

​

(282,495)

​

(2,436)

​

-

​

(280,059)

Other expense (income), net:

​

​

​

​

​

​

​

​

​

​

​

​

​

Interest expense, net

​

​

9,709

​

75,226

​

84,935

​

1,107

​

-

​

83,828

Debt modification and extinguishment costs, net

​

​

-

​

121

​

121

​

-

​

-

​

121

Sundry expense (income), net

​

​

684

​

1,644

​

2,328

​

936

​

-

​

1,392

Other income, net

​

​

(923)

​

(28)

​

(951)

​

(866)

​

-

​

(85)

Loss before reorganization items and income taxes

​

​

(301,636)

​

(67,292)

​

(368,928)

​

(3,613)

​

-

​

(365,315)

Reorganization items

​

​

831

​

(1,557,825)

​

(1,556,994)

​

-

​

-

​

(1,556,994)

Profit (loss) before income taxes

​

​

(302,467)

​

1,490,533

​

1,188,066

​

(3,613)

​

-

​

1,191,679

Income tax expense

​

​

3,371

​

35,875

​

39,246

​

1,254

​

-

​

37,992

Net profit (loss)

​

$

(305,838)

​

$

1,454,658

​

$

1,148,820

​

$

(4,867)

​

$

-

​

$

1,153,687

​

​