Bold Eagle agrees to $1.25B REDLattice merger
The transaction pairs $335 million of committed capital with potential trust-account proceeds, while closing remains subject to shareholder and other conditions.
Rhea-AI Filing Summary
Bold Eagle Acquisition Corp. (BEAG) agreed on September 25, 2026, to combine with REDL Intermediate Holdings, LLC (REDLattice), at a stated $1.25 billion pre-money enterprise value. Bold Eagle would first domesticate as a Delaware corporation, then its merger subsidiary would merge into REDLattice, which would become a wholly owned subsidiary of the combined company. Closing is expected around year-end 2026, subject to Bold Eagle shareholder approval and other conditions.
The transaction is expected to provide up to approximately $610 million in gross proceeds, including $335 million of committed capital and up to approximately $275 million from Bold Eagle’s trust account assuming no redemptions. Subscription agreements cover $60 million of common stock at $10.00 per share and up to $275 million of 4.00% Convertible Senior Notes due 2031. Proceeds are expected to refinance all of REDLattice’s existing debt, fund a final cash earnout payment related to its prior Paragon Solutions acquisition, and provide working capital for organic growth, product expansion and disciplined M&A. REDLattice reported $267 million in revenue for the twelve months ended June 30, 2026, representing 29% year-over-year growth.
Positive
- 29% year-over-year revenue growth for the twelve months ended June 30, 2026.
Negative
- None.
Filing Explained
The proposed deal remains unclosed; if completed, convertible notes and an equity-plan reserve of ten percent, with five-percent annual increases, could add PubCo shares.
The agreement provides for former REDLattice owners to receive PubCo common shares; the final amount depends on closing indebtedness and the fully diluted REDLattice units and options used in the agreement’s formula. This is a proposed issuance, not shares already issued; issuing the shares would reduce existing holders’ percentage ownership absent offsetting changes.
The PIPE investors agreed, subject to conditions, to buy
At closing, PubCo is to reserve
Bold Eagle says it will file a registration statement containing a proxy statement and prospectus; effectiveness of that registration statement and shareholder approval are among the conditions to closing.
8-K Event Classification
Key Figures
Key Terms
pre-money enterprise value financial
Aggregate Merger Consideration financial
PIPE Investment financial
make-whole increase financial
Sponsor Earn-Out Arrangement financial
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
How much gross proceeds could BEAG’s proposed REDLattice transaction provide?
How much revenue did REDLattice report for the twelve months ended June 30, 2026?
What are the conversion terms for BEAG’s proposed convertible notes?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date
of earliest event reported):
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Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
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Item 1.01 Entry into a Material Definitive Agreement
Business Combination Agreement
On September 25, 2026, Bold Eagle Acquisition Corp., a Cayman Islands exempted company (“Bold Eagle”, and following the Domestication described below, “PubCo”), REDL Intermediate Holdings, LLC, a Delaware limited liability company (“REDLattice”), BEAC Merger Sub, LLC, a Delaware limited liability company and wholly-owned subsidiary of Bold Eagle (“Merger Sub”), and, solely for the purposes of Section 6.9(e) thereof, REDL Ultimate Holdings, LP, a Delaware limited partnership (“Ultimate Holdings”), entered into a Business Combination Agreement (the “Business Combination Agreement”). Ultimate Holdings is the direct parent of REDLattice. Pursuant to the Business Combination Agreement, (i) Bold Eagle will de-register in the Cayman Islands and transfer by way of continuation out of the Cayman Islands and into the State of Delaware, migrating to and domesticating as a Delaware corporation (the “Domestication”), and (ii) following the Domestication, Merger Sub will merge with and into REDLattice (the “Merger”, and together with the Domestication and the other transactions contemplated by the Business Combination Agreement, the “Business Combination”), with REDLattice surviving the Merger as a wholly-owned subsidiary of PubCo.
REDLattice, together with its subsidiaries, is in the business of providing design, development, research, implementation, engineering, exploitation, maintenance and support services for cyber intelligence platforms and software services, tools, solutions, and products, as well as other related government services, in each case, to government, intelligence, and defense customers.
The Business Combination Agreement and the Business Combination were unanimously approved by the board of directors of Bold Eagle, the board of managers of REDLattice, and the board of supervisors of Ultimate Holdings. The closing of the Business Combination (the “Closing”) is expected to occur following the receipt of the required approval by Bold Eagle’s shareholders and the satisfaction of the closing conditions described below.
Conversion of Securities
Immediately prior to the Domestication, the following will occur in the following order: (1) to the extent any units of Bold Eagle (“Bold Eagle Units”) remain outstanding and unseparated, the Class A ordinary shares and public rights comprising each such Bold Eagle Unit will automatically separate (the “Unit Separation”); (2) each holder of each issued and outstanding Class B ordinary share of Bold Eagle, par value $0.0001 per share (the “Bold Eagle Class B Shares” or the “Founder Shares”), will irrevocably and unconditionally elect to convert, on a one-for-one basis, each Bold Eagle Class B Share held by it into one Class A ordinary share of Bold Eagle, par value $0.0001 per share (the “Bold Eagle Class A Shares,” and together with the Bold Eagle Class B Shares, the “Bold Eagle Ordinary Shares”) (the “Class B Share Conversion”); (3) each issued and outstanding public right of Bold Eagle will automatically convert into one-twentieth (1/20th) of one Bold Eagle Class A Share, with any fractional shares rounded down (the “Rights Conversion”); and (4) Bold Eagle will effect the redemption of the Bold Eagle Class A Shares initially issued in Bold Eagle’s initial public offering (the “Public Shares” and the holders of Public Shares, the “Public Shareholders”) that are validly submitted for redemption and not withdrawn.
At the effective time of the Domestication, each outstanding Bold Eagle Class A Share (excluding Public Shares validly submitted for redemption, but including Bold Eagle Class A Shares issued upon the Class B Share Conversion and the Rights Conversion) will be reclassified as one share of common stock, par value $0.0001 per share, of PubCo (the “PubCo Common Stock”). Immediately following the Domestication and immediately prior to the effective time of the Merger, Eagle Equity Partners IV, LLC, the sponsor of Bold Eagle (the “Sponsor”), will cause 2,035,000 shares of PubCo Common Stock held by it (the “Sponsor Earn-Out Shares”) to become subject to vesting and forfeiture conditions tied to the trading price of PubCo Common Stock during the period commencing on the Closing Date and expiring on the fifth (5th) anniversary of the Closing Date (the “Earn-Out Period”) (the “Sponsor Earn-Out Arrangement”). Pursuant to the Sponsor Earn-Out Arrangement, the Sponsor Earn-Out Shares will vest in three tranches, with 767,500 shares vesting if the trading price of PubCo Common Stock equals or exceeds $12.50 per share, 767,500 shares vesting if the trading price of PubCo Common Stock equals or exceeds $15.00 per share and 500,000 shares vesting if the trading price of PubCo Common Stock equals or exceeds $17.50 per share, respectively, for any twenty (20) trading days within any thirty (30) consecutive trading day period during the Earn-Out Period, and will otherwise be forfeited to PubCo for no consideration upon expiration of the Earn-Out Period. In the event of a PubCo Sale during the Earn-Out Period, the Sponsor Earn-Out Shares will vest on an accelerated basis depending on the PubCo Sale Price (as defined in the Business Combination Agreement), including on a pro rata basis if the PubCo Sale Price is at least $12.50 but less than $15.00 per share or at least $15.00 per share but less than $17.50 per share.
Immediately prior to the effective time of the Merger and as a condition to the consummation of the Merger, Ultimate Holdings will effect a redemption of the Ultimate Holdings Class B Units in exchange for an equivalent number of REDLattice Class B Units and, immediately following such redemption, REDLattice’s outstanding Class V Units, Class P Units, Class A Units, vested Class B Units, and Class S Units will be reclassified into REDLattice Class A-1 Units and REDLattice’s unvested Class B Units will be recapitalized into REDLattice Class A-2 Units (collectively, the “REDLattice Recapitalization”).
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In accordance with the terms and subject to the conditions set forth in the Business Combination Agreement, at the effective time of the Merger (the “Merger Effective Time”), each REDLattice Class A-1 Unit issued and outstanding as of immediately prior to the Merger Effective Time (excluding treasury units) will automatically be cancelled and converted into the right to receive a number of shares of PubCo Common Stock equal to the Consideration Ratio (as defined below), and each REDLattice Class A-2 Unit issued and outstanding as of immediately prior to the effective time of the Merger will automatically be cancelled and converted into a corresponding number of restricted shares of PubCo Common Stock equal to the Consideration Ratio, containing the same vesting and other provisions as applied to such REDLattice Class A-2 Unit immediately prior to the Merger Effective Time. Following the Merger, there will be a single class of PubCo Common Stock outstanding. Additionally, at the Merger Effective Time, each outstanding and unexercised option to purchase REDLattice Units (each, a “REDLattice Option”) will be assumed by PubCo and become an option of PubCo (each, a “PubCo Option”) containing the same terms, conditions, vesting, and other provisions as are applicable to such REDLattice Option immediately prior to the Merger Effective Time, provided that each PubCo Option will be exercisable for the number of shares of PubCo Common Stock equal to the Consideration Ratio multiplied by the number of REDLattice Units subject to the REDLattice Option as of immediately prior to the Merger Effective Time, rounded down to the nearest whole share, at an exercise price equal to the per unit exercise price of the REDLattice Option divided by the Consideration Ratio, rounded up to the nearest whole cent.
The “Aggregate Merger Consideration” to be issued to the holders of REDLattice Units (the “REDLattice Unitholders”) in connection with the Merger will be a number of shares of PubCo Common Stock determined by dividing (a) the Equity Value (as defined below) by (b) $10.00. “Equity Value” means an amount equal to the sum of (x) $1,250,000,000 minus Closing Indebtedness (as defined below) (the “Base Equity Value”), plus (y) the aggregate exercise price that would be paid to REDLattice in respect of all REDLattice Options if exercised in full immediately prior to the Merger Effective Time. The “Closing Indebtedness” includes all Indebtedness outstanding as of the Closing. The “Consideration Ratio” is the number of shares of PubCo Common Stock to be issued in exchange for each issued and outstanding REDLattice Unit upon the Merger, and is equal to the quotient obtained by dividing (i) the Aggregate Merger Consideration by (ii) the Aggregate Fully Diluted REDLattice Units. The “Aggregate Fully Diluted REDLattice Units” means the sum, without duplication, of (1) the aggregate number of REDLattice Units issued and outstanding immediately prior to the Merger Effective Time, plus (2) the aggregate number of REDLattice Units that are issuable upon, or subject to, the exercise or settlement of REDLattice Options (whether or not then vested or exercisable), in each case, that are outstanding immediately prior to the effective time of the Merger.
Representations, Warranties and Covenants
The Business Combination Agreement contains customary representations and warranties by the parties thereto. The Business Combination Agreement also contains customary pre-Closing covenants of the parties, including the obligation of Bold Eagle and REDLattice and their respective subsidiaries to conduct their businesses in the ordinary course and to refrain from taking certain specified actions, subject to certain exceptions, without the prior written consent of each other.
The Business Combination Agreement also provides that Bold Eagle will use its reasonable best efforts to cause PubCo’s securities to be approved for listing on the New York Stock Exchange, NYSE American LLC, or the Nasdaq Stock Market (collectively, the “Stock Exchange”).
Indemnification and Insurance
The Business Combination Agreement provides that all existing rights to indemnification in favor of directors, officers and managers of Bold Eagle, Merger Sub, and REDLattice will survive the consummation of the Business Combination and will remain in full force and effect for a period of six (6) years following the Closing. PubCo’s certificate of incorporation and bylaws (as adopted at the Domestication) will also contain provisions with respect to indemnification, exculpation and advancement of expenses no less favorable than comparable provisions within Bold Eagle’s and REDLattice’s organizational documents.
The Business Combination Agreement also provides that, at or prior to the Closing, each of Bold Eagle and REDLattice will purchase a separate “tail” directors’ and officers’ liability insurance policy (the “D&O Tail”) in respect of acts or omissions occurring prior to the Closing, covering each person currently covered by their respective existing directors’ and officers’ liability insurance policies, on terms no less favorable than those currently in effect, for a six (6)-year period following the Closing; provided that neither Bold Eagle nor REDLattice will be required to expend on the premium in excess of 300% of the aggregate annual premiums currently payable under their respective current policies.
Following the date of the Closing (the “Closing Date”), the exculpation, indemnification and advancement of expenses provisions currently in effect for the benefit of directors, officers and managers of Bold Eagle, Merger Sub, and REDLattice, including under any existing indemnification agreements between such persons and Bold Eagle, Merger Sub, or REDLattice, will continue in effect on the terms described above. Additionally, at the effective time of the Domestication and the effective time of the Merger, respectively, PubCo and REDLattice will assume Bold Eagle’s existing rights and obligations under indemnification agreements between Bold Eagle and the Parent Indemnitees, including the Administrative Services and Indemnification Agreement, dated as of October 23, 2024, by and among Bold Eagle, the Sponsor and Eagle Equity Partners, LLC, and such assumed obligations, including with respect to indemnification, exoneration, exculpation, advancement and expense reimbursement, will continue to be effective following the Closing.
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Registration Statement / Proxy Statement
As promptly as reasonably practicable after the date of the Business Combination Agreement, Bold Eagle will prepare and file a registration statement on Form S-4 relating to the Business Combination and certain other matters (the “Registration Statement”) with the Securities and Exchange Commission (“SEC”), which will contain a combined proxy statement/prospectus relating to a special meeting of Bold Eagle’s shareholders to approve the Business Combination (the “Bold Eagle Shareholder Meeting”).
Governance
The Business Combination Agreement provides that PubCo’s board of directors will initially consist of nine (9) directors where: (i) six (6) directors will be designated by REDLattice (at least two (2) of whom will qualify as independent directors); (ii) one (1) director will be REDLattice’s Chief Executive Officer; (iii) one (1) independent director will be nominated by the Sponsor and approved by REDLattice; and (iv) one (1) independent director will be mutually agreeable to the Sponsor and REDLattice. The officers of REDLattice immediately prior to the effectiveness of the Merger are expected to be the officers of PubCo as of immediately after the effectiveness of the Merger, until their respective successors are duly elected or appointed and qualified, or until their earlier death, resignation or removal.
PubCo Certificate of Incorporation and Bylaws
Pursuant to the Business Combination Agreement, concurrently with Closing, Bold Eagle will file a certificate of incorporation with the Secretary of State of the State of Delaware (the “PubCo COI”) and adopt bylaws (the “PubCo Bylaws”), in each case, in a form to be mutually agreed upon by Bold Eagle and REDLattice, which will govern the rights, privileges, and preferences of the holders of PubCo securities after the Closing.
Equity Incentive Plan and Employee Stock Purchase Plan
The Business Combination Agreement provides that, in connection with the consummation of the Business Combination, PubCo will adopt a customary equity incentive plan in a form to be mutually agreed by Bold Eagle and REDLattice, including an Israeli sub-plan to be submitted to the Israeli Tax Authority (the “PubCo Equity Incentive Plan”). The number of shares of PubCo Common Stock initially reserved for issuance under the PubCo Equity Incentive Plan will equal ten percent (10%) of PubCo Common Stock on a fully-diluted basis. The PubCo Equity Incentive Plan will also include an “evergreen” provision providing for an automatic increase on the first day of each fiscal year equal to five percent (5%) of PubCo Common Stock on a fully-diluted basis.
The Business Combination Agreement also provides that PubCo will adopt a customary employee stock purchase plan in a form to be mutually agreed by Bold Eagle and REDLattice (the “PubCo Employee Stock Purchase Plan”). None of the equity awards or PubCo Common Stock issued under the PubCo Equity Incentive Plan or the PubCo Employee Stock Purchase Plan will result in any deduction to the Equity Value.
PubCo Common Stock Financing Cooperation
The Business Combination Agreement also provides that, during the Interim Period, Bold Eagle and REDLattice will work diligently and use collective commercially reasonable efforts to locate and secure additional financing that, together with the Subscription Agreements for Equity Securities exchangeable for PubCo Common Stock executed on or prior to the date of the Business Combination Agreement, will be sufficient to satisfy the $100,000,000 minimum aggregate common stock closing cash condition set forth in the Business Combination Agreement, with such additional financing to be in the form of PubCo Common Stock, on terms and conditions substantially consistent, in all material respects, with the Subscription Agreement, unless otherwise mutually agreed by each of Bold Eagle and REDLattice.
Conditions to the Parties’ Obligations to Consummate the Business Combination
Under the Business Combination Agreement, the obligations of the parties to consummate the Business Combination are subject to certain conditions, including, among others: (i) delivery of the written consent of Ultimate Holdings, REDLattice’s sole member, approving the Business Combination Agreement and the transactions contemplated thereby and the requisite approval of Bold Eagle’s shareholders; (ii) the absence of adverse laws, rules, regulations, judgments, decrees, executive orders or awards making the Business Combination illegal or otherwise prohibiting its consummation; (iii) the Registration Statement having been declared effective by the SEC under the Securities Act of 1933, as amended (the “Securities Act”), with no stop order in effect and no proceedings to suspend its effectiveness initiated or threatened by the SEC; (iv) the PubCo Common Stock having been approved for listing on the Stock Exchange; and (v) the expiration or receipt of applicable antitrust and other regulatory approvals.
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The obligations of Bold Eagle and Merger Sub to consummate the Business Combination are further subject to additional conditions, including, among others: (i) the truth and accuracy of the representations and warranties of REDLattice, subject to the materiality standards contained in the Business Combination Agreement; (ii) material compliance by REDLattice with its pre-Closing agreements and covenants under the Business Combination Agreement; (iii) no Material Adverse Effect (as defined in the Business Combination Agreement) having occurred since the signing of the Business Combination Agreement that is continuing; (iv) receipt of a customary officer’s certificate of REDLattice certifying satisfaction of the foregoing conditions; (v) Ultimate Holdings having executed the Registration Rights Agreement (as defined below) and the Lock-Up Agreement (as defined below); (vi) receipt, in a form and substance reasonably acceptable to Bold Eagle, of evidence of the termination of certain contracts as set forth in the schedules to the Business Combination Agreement; (vii) certain employment agreements between certain of REDLattice’s executive employees and Bold Eagle (or one of its subsidiaries) having been entered into; and (viii) the REDLattice Recapitalization having been completed.
The obligations of REDLattice to consummate the Business Combination are further subject to additional conditions, including, among others: (i) the truth and accuracy of the representations and warranties of Bold Eagle, subject to the materiality standards contained in the Business Combination Agreement; (ii) material compliance by Bold Eagle with its pre-Closing agreements and covenants under the Business Combination Agreement; (iii) receipt of a customary officer’s certificate of Bold Eagle certifying satisfaction of the foregoing conditions; (iv) the PubCo Charter having been filed with, and declared effective by, the Delaware Secretary of State; (v) the Registration Rights Agreement, Lock-Up Agreement, and the Director Nomination Agreement (as defined below) having been entered into; (vi) the aggregate cash actually received or deemed received by Bold Eagle at Closing or during the Interim Period (as defined in the Business Combination Agreement) in respect of the portion of the PIPE Investment in and for convertible notes of PubCo being greater than $250,000,000; (vii) the aggregate cash actually received or deemed received by Bold Eagle or REDLattice at the Closing or during the Interim Period in respect of the issuance and sale of PubCo Common Stock or equity interests that will convert into shares of PubCo Common Stock at the Closing, plus the aggregate cash proceeds actually received by Bold Eagle on the Closing Date pursuant to each of the AE Subscription Agreement and Sponsor Subscription Agreement, plus the aggregate cash proceeds available for release to Bold Eagle from the trust account in connection with the transaction contemplated by the Business Combination Agreement (net of redemptions, but for the avoidance of doubt, prior to the payment of Transaction Expenses (as defined in the Business Combination Agreement), being greater than or equal to $100,000,000; (viii) Merger Sub having delivered to REDLattice a copy of Merger Sub’s Internal Revenue Service Form 8832 election to be treated as a corporation for U.S. federal income tax purposes, effective as of a date no later than the Closing Date; (ix) the size and composition of PubCo’s board of directors being as set forth in the Business Combination Agreement, as described above under “Governance”; (x) the Domestication having been consummated; and (xi) Ultimate Holdings having received a valid tax certificate, in form and substance reasonably acceptable to Bold Eagle, confirming that no withholding of Israeli tax is required with respect to the portion of the Per Unit Merger Consideration (as defined in the Business Combination Agreement) payable to Ultimate Holdings that is attributable to its non-Israeli-resident equityholders.
Termination Rights
The Business Combination Agreement may be terminated under certain customary and limited circumstances (1) at any time prior to the Closing: (i) by mutual written consent of Bold Eagle and REDLattice; (ii) by either Bold Eagle or REDLattice if the Closing has not occurred on or prior to the date that is nine (9) months following the date of the Business Combination Agreement (the “Outside Closing Date”) (subject to certain automatic extensions and cure periods set forth in the Business Combination Agreement); provided, that, in the event that, as of the date that is eight (8) months following the date of the Business Combination Agreement, Aggregate Parent Common Committed Cash (as defined in the Business Combination Agreement) is less than $100,000,000 (which, for the avoidance of doubt, is not subject to cure), REDLattice shall have the right, at its sole option, to terminate the Business Combination Agreement without liability to any other party; (iii) by either Bold Eagle or REDLattice if the consummation of the Business Combination is permanently enjoined or prohibited by the terms of a final, non-appealable government order or other law; (2) at any time prior to the Domestication: (iv) by either Bold Eagle or REDLattice if Bold Eagle’s shareholder approvals are not obtained at the Bold Eagle Shareholder Meeting; (v) by Bold Eagle if REDLattice is in material breach of its representations, warranties or obligations that would render certain of the conditions to the obligations of Bold Eagle and Merger Sub incapable of being satisfied and such breach is not cured, or cannot be cured, within thirty (30) days following notice of such breach, or if written consent of Ultimate Holdings, is not obtained and delivered to Bold Eagle within two (2) business days after the date of the Business Combination Agreement; (vi) by REDLattice if Bold Eagle is in material breach of its representations, warranties or obligations that would render certain of the conditions to the obligations of REDLattice incapable of being satisfied and such breach is not cured, or cannot be cured, within thirty (30) days following notice of such breach; or (vii) by REDLattice if (x) REDLattice reasonably believes, upon its receipt of tangible evidence, that the aggregate cash actually received by Bold Eagle at Closing or during the Interim Period in respect of the portion of the PIPE Investment in and for convertible notes of PubCo is not reasonably expected to meet or exceed $250,000,000, and (y) within thirty (30) days following receipt by Bold Eagle of a written notice from REDLattice describing such anticipated shortfall in reasonable detail, Bold Eagle has failed to secure commitments for the funding of an additional amount of cash to satisfy such threshold. The right to terminate the Business Combination Agreement under clauses (ii), (iii), (iv) and (vii) above will not be available to a party if the failure of such party to fulfill any obligation under the Business Combination Agreement has been the primary cause of, or primarily resulted in, the failure of the Closing to occur.
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No party will have any liability after the termination of the Business Combination Agreement, except for liability arising out of, or incurred as a result of, a party’s willful breach of the Business Combination Agreement or such party’s Fraud (as defined in the Business Combination Agreement) occurring prior to such termination.
A copy of the Business Combination Agreement is filed with this Current Report on Form 8-K as Exhibit 2.1 and is incorporated herein by reference. The foregoing description of the Business Combination Agreement and the Business Combination does not purport to be complete and is qualified in its entirety by reference to the full text of the Business Combination Agreement filed with this Current Report on Form 8-K. The Business Combination Agreement is included to provide security holders with information regarding its terms. It is not intended to provide any other factual information about Bold Eagle, REDLattice, PubCo, or Merger Sub. In particular, the assertions embodied in representations and warranties by Bold Eagle, REDLattice, PubCo, and Merger Sub contained in the Business Combination Agreement are subject to important qualifications and limitations agreed to by the parties in connection with negotiating such agreement, including being qualified by confidential information in the disclosure schedules provided by the parties in connection with the execution of the Business Combination Agreement, and are subject to standards of materiality applicable to the contracting parties that may differ from those applicable to security holders. The confidential disclosures contain information that modifies, qualifies and creates exceptions to the representations and warranties set forth in the Business Combination Agreement. Moreover, certain representations and warranties in the Business Combination Agreement were used for the purpose of allocating risk between the parties, rather than establishing matters as facts. Accordingly, security holders should not rely on the representations and warranties in the Business Combination Agreement as characterizations of the actual state of facts about Bold Eagle, REDLattice, PubCo, and Merger Sub. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Business Combination Agreement, which subsequent information may or may not be fully reflected in Bold Eagle’s public disclosures.
Other Agreements
The Business Combination Agreement contemplates the execution of various additional agreements and instruments, on or before the Closing, including, among others, the following:
Subscription Agreement
Contemporaneously with the execution of the Business Combination Agreement, Bold Eagle entered into subscription agreements (the “Subscription Agreements”) with certain qualified institutional buyers, institutional accredited investors, and other accredited investors (the “PIPE Investors”), pursuant to which the PIPE Investors have agreed, subject to the terms and conditions therein, to subscribe for and purchase, immediately prior to the Closing, (i) shares of PubCo Common Stock at a purchase price equal to $10.00 per share (the “PIPE Shares”) and/or (ii) 4.00% Convertible Senior Notes due 2031 (“Convertible Notes”), for an aggregate investment amount of (x) up to $275,000,000 of Convertible Notes and (y) $60,000,000 of PIPE Shares (the transactions described in clauses (i) and (ii), collectively, the “PIPE Investment”). The common stock PIPE Investment includes participation by (i) an affiliate of AE Industrial Partners, an existing investor in REDLattice, and (ii) an affiliate of the Sponsor. The Convertible Notes will have the terms set forth in the indenture in respect of the Convertible Notes to be entered into in connection with the Closing between PubCo and U.S. Bank Trust Company, NA, as trustee (the “Trustee”), in substantially the form attached to the Subscription Agreement (the “Indenture”). The Convertible Notes are convertible into shares of PubCo Common Stock (the “Underlying Shares”) at an initial conversion rate equal to approximately 80 shares of PubCo Common Stock per $1,000 of principal amount of the Convertible Notes (subject to customary adjustment provisions set forth in the Indenture), and will mature on the fifth-year anniversary of the Closing Date. PIPE Investors may assign their Subscription Agreement or their rights thereunder to certain affiliated funds or accounts without consent, or to a third-party with the prior written consent of both Bold Eagle and REDLattice.
PubCo may elect to redeem the Convertible Notes, in whole or in part (subject to certain limitations), in cash only if the last reported sale price per share of the PubCo Common Stock is equal to or greater than 130% of the product of the then-applicable conversion price and the accretion ratio for a specified period of time. Following delivery of a redemption notice by PubCo, holders of the Convertible Notes will have the right, at their option, to convert their Convertible Notes prior to the redemption date based on the then-applicable conversion rate per original principal amount of Convertible Notes. Holders who convert Convertible Notes called for redemption in connection with such redemption will be entitled to a make-whole increase to the conversion rate.
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Holders of the Convertible Notes have the right to require PubCo to repurchase all or a portion of their Convertible Notes upon the occurrence of a fundamental change (as defined in the Indenture), subject to certain exceptions. The cash repurchase price will be 100% of the accreted principal amount of the Convertible Notes at the time, plus accrued and unpaid interest, if any, to, but excluding, the applicable repurchase date.
PIPE Investors purchasing PIPE Shares may elect to satisfy their PIPE Investment by using Currently Owned Shares (as defined below) and/or Open-Market Purchase Shares (as defined below) no later than one (1) business day prior to the redemption deadline for the Bold Eagle Shareholder Meeting subject to the satisfaction of certain conditions set forth in the Subscription Agreement. The use of either Currently Owned Shares and/or Open-Market Purchase Shares would reduce the number of PIPE Shares that such PIPE Investor is obligated to purchase pursuant to the Subscription Agreement on a one-for-one basis (the “Reduction Right”). “Currently Owned Shares” means Bold Eagle Class A Shares that the PIPE Investor or its affiliates beneficially own as of the date of the Subscription Agreement. “Open-Market Purchase Shares” means Bold Eagle Class A Shares purchased by the PIPE Investor or its affiliates for their own accounts pursuant to open-market transactions with third parties at a per share price less than the final per share redemption price payable to holders of Public Shares who validly redeem their shares in connection with the Business Combination.
Bold Eagle has agreed to endeavor to, on or prior to Closing, and will in no event later than thirty (30) calendar days after the Closing date, file a shelf registration statement to register the resale of the PIPE Shares and Underlying Shares.
The closing of the PIPE Investment is expected to occur immediately prior to the Closing. The closing of the PIPE Investment is conditioned on (i) the PubCo Common Stock having been approved for listing on the Stock Exchange; (ii) all conditions precedent to the closing of the Business Combination set forth in Article IX of the Business Combination Agreement having been satisfied or waived; (iii) the absence of specified adverse laws, rules, regulations, judgments, decrees, executive orders or awards making the PIPE Investment illegal or otherwise prohibiting its consummation; and (iv) Bold Eagle and the Trustee having executed the Indenture. The obligations of Bold Eagle to consummate the PIPE Investments are further subject to additional conditions, including, among other things: (i) the truth and accuracy of the representations and warranties of the PIPE Investors, subject to customary bring-down standards; and (ii) material compliance by the PIPE Investors with their agreements and covenants under the Subscription Agreement. The obligations of the PIPE Investors to consummate the PIPE Investments are further subject to additional conditions, including, among other things: (i) the truth and accuracy of the representations and warranties of Bold Eagle in the Subscription Agreement, subject to customary bring-down standards; (ii) material compliance by Bold Eagle with its agreements and covenants under the Subscription Agreement; (iii) the Business Combination Agreement shall not have been amended, modified, or supplemented, and no condition waived thereunder, in a manner that would reasonably be expected to materially and adversely affect the economic benefits that a PIPE Investor would reasonably expect to receive under the Subscription Agreement; (iv) receipt of a customary officer’s certificate of Bold Eagle certifying Bold Eagle’s organizational documents and providing a good standing certificate and (v) Bold Eagle and REDLattice, collectively, having received an aggregate of not less than $100 million of gross equity proceeds from (x) the issuance and sale of shares of PubCo Common Stock or securities that will convert into shares of PubCo Common Stock at the Closing funded following the date of the Subscription Agreement up to concurrently with Closing and (y) cash available for release from the Trust Account, net of amounts required to satisfy redemptions properly made and not withdrawn, but prior to the payment of any transaction expenses.
The Subscription Agreements will terminate upon the earlier to occur of (i) the termination of the Business Combination Agreement, (ii) the mutual written agreement of the parties thereto, (iii) the failure of the conditions to the consummation of the PIPE Investment as of the Closing Date of the Business Combination; and (iv) the date that is nine (9) months after the date of the applicable Subscription Agreement, provided that a PIPE Investor will not be entitled to terminate its Subscription Agreement pursuant to clause (iv) for so long as the Closing has not occurred as a result of a breach by such PIPE Investor, or an affiliate of such PIPE Investor, of its obligations under the applicable Subscription Agreement.
The foregoing description of the Subscription Agreements is not complete and is qualified in its entirety by reference to the Subscription Agreements, a form of which is attached as Exhibit 10.1 to this Current Report, and the Indenture, a form of which is attached as Exhibit 4.1 to this Current Report, and incorporated herein by reference.
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Sponsor Support Agreement
In connection with the execution of the Business Combination Agreement, on September 25, 2026, the Sponsor and members of Bold Eagle’s board of directors and management team (collectively with the Sponsor, the “Sponsor Parties”) entered into the Sponsor Support Agreement with Bold Eagle and REDLattice, pursuant to which the Sponsor Parties agreed (i) to vote, at any meeting of the Bold Eagle shareholders, and in any action by written consent of the Bold Eagle shareholders, all Bold Eagle Ordinary Shares in favor of the Business Combination Agreement and each of the proposals presented by Bold Eagle in the Registration Statement, and against any alternative proposal or transactions, or any other transactions that would materially impede the consummation of the Business Combination, (ii) to certain non-solicitation limitations with respect to alternative proposals, (iii) to waive, conditioned upon the occurrence of Closing, any adjustment or other anti-dilution rights with respect to the rate at which Bold Eagle Class B Shares convert into Bold Eagle Class A Shares in connection with the Bold Eagle Class B Share Conversion, such that the Bold Eagle Class B Shares shall convert into Bold Eagle Class A Shares on a one-to-one basis, which waiver is effective only in connection with the Business Combination and will lapse if the Restricted Period (as defined in the Sponsor Support Agreement) ends for a reason other than the Closing, (iv) to waive any dissenters’, appraisal, or other similar rights with respect to the Business Combination Agreement and each of the proposals presented by Bold Eagle in the Registration Statement, and (v) to refrain from transferring, or exercising any redemption rights with respect to, or entering into certain hedging, swap or voting arrangements with respect to, the Bold Eagle Class B Shares (including the Bold Eagle Class A Shares and shares of PubCo Common Stock issued upon conversion thereof) and the 358,000 Class A ordinary shares of Bold Eagle issued to the Sponsor in a private placement concurrently with the closing of Bold Eagle’s initial public offering (including shares of PubCo Common Stock issued upon conversion thereof) (collectively, the “Sponsor Lock-Up Shares”), except to certain permitted transferees who execute a joinder agreeing to be bound by the Sponsor Support Agreement, until the earlier of (A) 180 days after the Closing Date and (B) the date on which a PubCo Sale is consummated (the “Lock-Up Period”). Permitted transfers of the Sponsor Lock-Up Shares include, among others, transfers to officers, directors or affiliates of Bold Eagle, PubCo or the Sponsor, transfers to members, managers, officers or directors of the Sponsor or their affiliates, transfers to affiliates of a Sponsor Party or entities under common investment management, transfers by a natural person by gift, by will or intestate succession, or pursuant to a qualified domestic relations order, transfers by operation of law upon dissolution of the Sponsor, and entry into a Rule 10b5-1 trading plan that does not permit any sales of Sponsor Lock-Up Shares during the Lock-Up Period, in certain cases, subject to the transferee’s execution of a joinder agreeing to be bound by the Sponsor Support Agreement.
Additionally, the Sponsor agreed to the vesting and forfeiture terms of the Sponsor Earn-Out Arrangement applicable to the Sponsor Earn-Out Shares, as described above under “Business Combination Agreement.” The Sponsor further agreed that, if Bold Eagle Transaction Expenses (as defined in the Business Combination Agreement) as of immediately prior to the Merger Effective Time exceed $20,000,000 (or such higher amount as may be mutually agreed by Bold Eagle and REDLattice), the Sponsor will waive repayment of any indebtedness owed to the Sponsor or its affiliates to the extent necessary to ensure that Bold Eagle Transaction Expenses do not exceed such limit.
The Sponsor Support Agreement will automatically terminate upon the earlier of (i) the termination of the Lock-Up Period, (ii) the termination of the Business Combination Agreement in accordance with its terms and (iii) the liquidation of Bold Eagle prior to the Closing, or upon the mutual written agreement of Bold Eagle and REDLattice.
The foregoing description of the Sponsor Support Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Sponsor Support Agreement, a copy of which is included as Exhibit 10.2 to this Current Report on Form 8-K and is incorporated herein by reference.
Lock-Up Agreement
In connection with the Closing, PubCo, REDLattice and Ultimate Holdings will enter into the Lock-Up Agreement, pursuant to which Ultimate Holdings will agree not to transfer, whether by sale, assignment, pledge, hypothecation, hedge or other disposition, or through the establishment or increase of a put equivalent position or the liquidation or decrease of a call equivalent position (each, a “Transfer”), or enter into certain hedging, swap or voting arrangements with respect to, any shares of PubCo Common Stock issued to it upon conversion of its Company Class A-1 Units in connection with the Business Combination, or any shares of PubCo Common Stock that Ultimate Holdings acquires following the Closing (the “Lock-Up Shares”), during the Lock-Up Period. Permitted Transfers during the Lock-Up Period include, among others, Transfers to officers, directors or affiliates of REDLattice, PubCo or Ultimate Holdings, Transfers to limited partners or affiliates of Ultimate Holdings, Transfers by operation of law upon dissolution of Ultimate Holdings, and entry into a Rule 10b5-1 trading plan that does not permit any sales of Lock-Up Shares during the Lock-Up Period, in certain cases, subject to the transferee’s execution of a joinder agreeing to be bound by the Lock-Up Agreement. The Lock-Up Agreement also provides that any amendment or waiver of its terms requires that PubCo concurrently amend or waive the corresponding terms of the Sponsor Support Agreement. Following the Closing, PubCo will place appropriate legends on the Lock-Up Shares and deliver stop transfer instructions to the Transfer Agent reflecting the restrictions set forth in the Lock-Up Agreement.
The Lock-Up Agreement will automatically terminate upon the earlier of (i) the termination of the Lock-Up Period or (ii) the mutual written agreement of each of the Parties, provided that such termination will not relieve any party from liability for any willful and material breach of, or actual fraud in connection with, the Lock-Up Agreement occurring prior to termination, and certain customary provisions of the Lock-Up Agreement will survive such termination.
The foregoing description of the Lock-Up Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the form of Lock-Up Agreement, a copy of which is included as Exhibit 10.3 to this Current Report on Form 8-K and is incorporated herein by reference.
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Registration Rights Agreement
In connection with the Closing, REDLattice, Ultimate Holdings, the Sponsor, and certain directors and officers of PubCo and other shareholders will enter into a Registration Rights Agreement with PubCo (the “Registration Rights Agreement”), which will supersede the registration rights agreement, dated as of October 23, 2024, entered into by Bold Eagle, the Sponsor and the Bold Eagle Insiders in connection with Bold Eagle’s initial public offering (the “BEAC Registration Rights Agreement”). Pursuant to the Registration Rights Agreement, among other things, PubCo will agree that, within 30 calendar days following Closing, PubCo will file with the SEC (at PubCo’s sole cost and expense) a registration statement registering the resale of certain shares of PubCo Common Stock held by or issuable to the parties thereto, and PubCo will use its commercially reasonable efforts to have the resale registration statement declared effective as soon as reasonably practicable after filing. Such holders will be entitled to customary piggyback registration rights and each of Ultimate Holdings and the Sponsor will be entitled to request underwritten shelf takedowns off of such resale registration statement, in each case at PubCo’s sole cost and expense; provided that the Sponsor will be entitled to initiate up to two underwritten shelf takedowns under the Registration Rights Agreement, subject to a minimum expected offering size threshold. In addition, each Holder will also be entitled to conduct block trades and other coordinated offerings, in each case subject to minimum offering size thresholds and other customary conditions set forth in the Registration Rights Agreement.
The Registration Rights Agreement supersedes and terminates the BEAC Registration Rights Agreement, effective as of the Closing, and no party thereto will have any further rights under the BEAC Registration Rights Agreement from and after such time. The Registration Rights Agreement will terminate with respect to any holder party thereto on the date that such holder no longer holds any Registrable Securities (as defined therein).
The foregoing description of the Registration Rights Agreement is qualified in its entirety by reference to the full text of the form of Registration Rights Agreement, a copy of which is included as Exhibit 10.4 to this Current Report on Form 8-K, and incorporated herein by reference.
Director Nomination Agreement
In connection with the Closing, PubCo and Ultimate Holdings will enter into a director nomination agreement (the “Director Nomination Agreement”), pursuant to which PubCo will agree to permit Ultimate Holdings and its permitted transferees, the right to designate six individuals for appointment to PubCo’s board of directors, subject to certain conditions. The Director Nomination Agreement provides Ultimate Holdings the right to designate (i) six nominees for so long as Ultimate Holdings beneficially owns 80% or more of the voting interests held by Ultimate Holdings immediately after the effective time of the Business Combination (the “Original Amount”); (ii) five nominees for so long as Ultimate Holdings beneficially owns at least 65% and less than 80% of the Original Amount; (iii) four nominees for so long as Ultimate Holdings beneficially owns at least 50% and less than 65% of the Original Amount; (iv) three nominees for so long as Ultimate Holdings beneficially owns at least 35% and less than 50% of the Original Amount; (v) two nominees for so long as Ultimate Holdings beneficially owns at least 20% and less than 35% of the Original Amount; and (vi) one nominee for so long as Ultimate Holdings beneficially owns at least 5% and less than 20% of the Original Amount. In each case, any applicable nominee must comply with applicable law and stock exchange rules. PubCo’s board of directors will initially consist of nine (9) directors divided into three classes serving staggered three-year terms.
The foregoing description of the Director Nomination Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the form of Director Nomination Agreement, a copy of which is included as Exhibit 10.5 to this Current Report on Form 8-K and is incorporated herein by reference.
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Item 3.02. Unregistered Sales of Equity Securities.
The disclosure set forth above in Item 1.01 of this Current Report with respect to the issuance of PubCo Common Stock in connection with the transactions contemplated by the Business Combination Agreement and the Subscription Agreements is incorporated by reference herein. The shares of PubCo Common Stock issuable to Ultimate Holdings pursuant to the Business Combination Agreement and the PIPE Shares, Convertible Notes, and Underlying Shares (if any) issuable pursuant to the Subscription Agreements will not be registered under the Securities Act, in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act.
Item 7.01. Regulation FD Disclosure.
On September 28, 2026, Bold Eagle and REDLattice issued a joint press release announcing their entry into the Business Combination Agreement. The press release is furnished hereto as Exhibit 99.1 and incorporated by reference into this Item 7.01.
In addition, furnished as Exhibit 99.2 hereto is an investor presentation, dated September 2026, that will be used by Bold Eagle and REDLattice with respect to the Business Combination.
Furnished hereto as Exhibit 99.3 are audited consolidated financial statements of REDL Intermediate Holdings, LLC and its subsidiaries as of and for the years ended December 31, 2025 and 2024.
The foregoing (including Exhibits 99.1, 99.2 and 99.3) is being furnished pursuant to Item 7.01 and will not be deemed to be filed for purposes of Section 18 of the Exchange Act, or otherwise be subject to the liabilities of that section, nor will it be deemed to be incorporated by reference in any filing under the Securities Act or the Exchange Act.
Additional Information about the Business Combination and Where to Find it
In connection with the Business Combination, Bold Eagle and REDLattice will prepare, and Bold Eagle will file, the Registration Statement with the SEC, which will include a preliminary proxy statement and preliminary prospectus of Bold Eagle with respect to the securities to be offered in the Business Combination. After the Registration Statement is declared effective, Bold Eagle will mail a definitive proxy statement/final prospectus to its shareholders as of a record date to be established for voting on the Business Combination. The Registration Statement, including the proxy statement/prospectus contained therein, will contain important information about the Business Combination and the other matters to be voted upon at the Bold Eagle Shareholder Meeting. This Current Report on Form 8-K does not contain all the information that should be considered concerning the Business Combination and other matters and is not intended to provide the basis for any investment decision or any other decision in respect of such matters. Bold Eagle and REDLattice may also file other documents with the SEC regarding the Business Combination. Bold Eagle’s shareholders and other interested persons are advised to read, when available, the Registration Statement, including the preliminary proxy statement/preliminary prospectus contained therein, the amendments thereto and the definitive proxy statement/final prospectus and other documents filed in connection with the Business Combination, as these materials will contain important information about Bold Eagle, REDLattice, PubCo, and the Business Combination. The documents filed by Bold Eagle and REDLattice with the SEC also may be obtained free of charge upon written request to Bold Eagle at Bold Eagle Acquisition Corp., 955 Fifth Avenue, New York, NY 10075.
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Participants in the Solicitation
REDLattice, PubCo and Bold Eagle and their respective directors, managers and executive officers may be deemed under SEC rules to be participants in the solicitation of proxies of Bold Eagle’s shareholders in connection with the Business Combination. Investors and security holders may obtain more detailed information regarding the names and interests of Bold Eagle’s directors and officers in Bold Eagle’s filings with the SEC, including Bold Eagle’s Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 23, 2026, and which is available at: https://www.sec.gov/ix?doc=/Archives/edgar/data/0001852207/000121390026032983/ea0276711-10k_bold.htm, under the headings “Directors, Executive Officers and Corporate Governance”, “Executive Compensation”, “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” and “Certain Relationships and Related Transactions, and Director Independence.” Information regarding the persons who may, under SEC rules, be deemed participants in the solicitation of proxies of Bold Eagle’s shareholders in connection with the Business Combination will be set forth in the Registration Statement, when available. Investors, shareholders and other interested persons are urged to read the Registration Statement, the proxy statement/prospectus included therein, and other relevant documents that will be filed with the SEC carefully and in their entirety when they become available because they will contain important information about the Transactions. Investors, shareholders and other interested persons will be able to obtain free copies of the proxy statement/prospectus and other documents containing important information about REDLattice, PubCo and Bold Eagle through the website maintained by the SEC at www.sec.gov.
Disclaimer
Past performance by Bold Eagle, REDLattice, and their respective management teams, is not a guarantee of future performance. Therefore, you should not place undue reliance on the historical record of the performance of Bold Eagle, REDLattice, and their respective management teams, or businesses associated with them as indicative of future performance of an investment or the returns that the parties will, or are likely to, generate going forward.
Cautionary Note Regarding Forward-Looking Statements
This Current Report on Form 8-K contains certain forward-looking statements that are based on REDLattice’s and our management’s beliefs and assumptions and on information currently available to management with respect to Bold Eagle and REDLattice and the Business Combination, including expectations, hopes, beliefs, intentions, plans, prospects, financial results or strategies regarding REDLattice and statements regarding the anticipated benefits and timing of the completion of the Business Combination, and REDLattice’s expectations, intentions, strategies, assumptions or beliefs about future events, results of operations or performance or that do not solely relate to historical or current facts. These forward-looking statements generally are identified by the words “believe,” “expect,” “anticipate,” “create,” “strategy,” “opportunity,” “provide,” “expand,” “will,” “would,” “will be,” “will continue,” “will likely result,” “will accelerate” and similar expressions. Forward-looking statements are predictions, projections and other statements about future events or conditions that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties, including: uncertainties as to the timing of the Business Combination; the risk that the Business Combination may not be completed in a timely manner or at all; the risk that the Business Combination may not be completed by prior to Bold Eagle’s business combination deadline; the failure by the parties to satisfy the conditions to the consummation of the Business Combination, including the approval of Bold Eagle’s shareholders; the occurrence of any event, change or other circumstance that could give rise to the termination of the negotiations or definitive agreements related to the Business Combination; changes to the proposed structure of the Business Combination that may be required or appropriate as a result of applicable laws or regulations; changes in business, market, financial, political and regulatory conditions; the effect of the announcement or pendency of the Business Combination on REDLattice’s business; the risk factors discussed in Bold Eagle’s Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 23, 2026, the Registration Statement related to the Business Combination which is expected to be filed with the SEC, and the other documents filed, or to be filed by REDLattice or Bold Eagle with the SEC from time to time. The actual results could differ materially from those expressed in, or implied by, these forward-looking statements, and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur. In addition, many factors could cause actual future events to differ materially from the forward-looking statements in this Current Report on Form 8-K. There may also be additional risks that REDLattice and Bold Eagle do not presently know or that REDLattice and Bold Eagle currently believe are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Recipients are cautioned not to put undue reliance on forward-looking statements, and none of REDLattice, Bold Eagle, or any of their respective representatives assumes any obligation and does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise. None of REDLattice or Bold Eagle, or any of their respective representatives gives any assurance that these expectations will be achieved on the time periods expected or at all.
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No Offer or Solicitation
This Current Report on Form 8-K and the exhibits hereto shall not constitute a solicitation of a proxy, consent, or authorization with respect to any securities or in respect of the transaction. This Current Report on Form 8-K also does not constitute an offer to sell or the solicitation of an offer to buy any securities, nor will there be any sale of securities in any jurisdictions in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities will be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits. The following exhibits are filed or furnished with this Current Report on Form 8-K:
| Exhibit Number |
Description | |
| 2.1† | Business Combination Agreement, dated as of September 25, 2026, by and among Bold Eagle Acquisition Corp., REDL Intermediate Holdings, LLC, BEAC Merger Sub, LLC, and, solely for the purposes of Section 6.9(e) thereof, REDL Ultimate Holdings, LP. | |
| 4.1 | Form of Indenture. | |
| 10.1 | Form of Subscription Agreement. | |
| 10.2† | Sponsor Support Agreement, dated as of September 25, 2026, by and among Bold Eagle Acquisition Corp., Eagle Equity Partners IV, LLC, REDL Intermediate Holdings, LLC, and the other parties thereto. | |
| 10.3† | Form of Lock-Up Agreement. | |
| 10.4 | Form of Registration Rights Agreement. | |
| 10.5 | Form of Director Nomination Agreement. | |
| 99.1 | Press Release, dated September 28, 2026. | |
| 99.2 | Investor Presentation, dated September 2026. | |
| 99.3 | Audited Consolidated Financial Statements of REDL Intermediate Holdings, LLC and subsidiaries as of and for the years ended December 31, 2025 and 2024. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
| † | Certain of the schedules and similar attachments to this Exhibit have been omitted in accordance with Regulation S-K Item 601(a)(5). The Registrant agrees to furnish a copy of all omitted exhibits and schedules to the SEC upon its request. |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| BOLD EAGLE ACQUISITION CORP. | |||
| By: | /s/ Eli Baker | ||
| Name: | Eli Baker | ||
| Title: | Chief Executive Officer | ||
Dated: September 28, 2026
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Exhibit 99.1
REDLattice, Worldwide Leading Operational Intelligence Platform for the U.S. and its Allies, to Become Public Company
Scaled Defense Technology Leader Provides Mission-Critical Cyber Capabilities
Transaction Values REDLattice at a Pre-Money Enterprise Value of $1.25 Billion
$335 Million of Committed Capital Anchored
by Loomis, Sayles & Co., Including
$60 Million Common Stock Investment Led by Existing Investor AE Industrial and Eagle Equity Partners
Transaction Enabled by Business Combination
with Bold Eagle Acquisition Corp.
(NASDAQ: BEAG, BEAGU, BEAGR)
CHANTILLY, Va. and NEW YORK, N.Y., September 28, 2026 – REDL Intermediate Holdings, LLC (together with its subsidiaries, “REDLattice” or the “Company”), the leading operational cyber intelligence platform providing integrated technology solutions to support critical national security and intelligence missions, and Bold Eagle Acquisition Corp. (Nasdaq: BEAG) (“Bold Eagle”), a publicly listed special purpose acquisition company, today announced that they have entered into a definitive agreement for a business combination that would result in REDLattice becoming a publicly traded company listed on the Nasdaq under the ticker symbol “REDL” upon closing of the transaction, which is anticipated around year-end 2026.
Founded in 2012, REDLattice delivers lawful intercept, vulnerability research and intelligence acquisition solutions that help U.S. and allied government agencies facilitate national security operations and anticipate, detect and neutralize threats from terrorism and other adversarial activity globally. The Company sells exclusively to government agencies at the nation-state or federal level and is a trusted partner to more than 100 customers across 23 countries. For the twelve months ended June 30, 2026, the Company generated $267 million of revenue, representing 29% year-over-year growth.
As artificial intelligence increases the speed, scale, and sophistication of cyber threats, governments are increasingly turning to specialized technology partners to maintain their technical advantage. This dynamic is creating significant near-term opportunities for REDLattice to execute its proven land-and-expand strategy, particularly across the U.S. defense and intelligence ecosystem. As of June 30, 2026, the Company had contracted backlog of $200 million and an active pipeline of $1.5 billion.
“REDLattice was built to provide the U.S. and its allies with a decisive technical edge against the world’s most sophisticated adversaries, at a moment when artificial intelligence has fundamentally accelerated the pace of cyber conflict,” said Andy Boyd, Chief Executive Officer of REDLattice. “This transaction provides the capital and public market currency to accelerate our organic growth, expand our product portfolio and pursue disciplined M&A across adjacent mission-critical capabilities, while continuing to deliver for our government customers who depend on us every day.”
“The demand for mission-critical cyber capabilities across the U.S. and allied governments has never been stronger, and REDLattice has consistently outpaced that market with strong retention and growth,” said Kirk Konert, Managing Partner at AE Industrial. “We believe REDLattice is the category leader in operational cyber intelligence with unmatched technical capabilities. This transaction lets us deepen our conviction, and we’re proud to continue as REDLattice’s largest shareholder.”
Eli Baker, Chief Executive Officer of Bold Eagle, added “we were attracted to REDLattice because they are well positioned to capitalize on the growing need for integrated tech capabilities across the national security community. REDLattice is one of the only companies of scale and purpose built to meet this requirement. We look forward to supporting Andy and his team as REDLattice enters its next phase of growth as a public company.”
Transaction Overview
The transaction values REDLattice at a pre-money enterprise value of $1.25 billion and is expected to provide up to approximately $610 million of gross proceeds, including $335 million of committed capital from new and existing mutual fund and institutional investors, and up to approximately $275 million from Bold Eagle’s trust account assuming no redemptions. The committed capital consists of:
| ● | $275 million of convertible notes anchored by Loomis Sayles, featuring a 4% coupon and $12.50 fixed conversion price; and |
| ● | $60 million of common stock PIPE including affiliates of existing investor AE Industrial Partners, LP (“AE Industrial”) and Eagle Equity Partners, priced at $10.00 per share |
Proceeds from the transaction will be used to refinance all of REDLattice’s existing debt and to fund the final cash earnout payment from the Company’s previously consummated acquisition of Paragon Solutions Ltd. Additional remaining proceeds are expected to provide working capital to fund organic growth, product expansion, and disciplined M&A.
REDLattice’s existing management team, including CEO Andy Boyd, former Director of the CIA’s Center for Cyber Intelligence, will continue to lead the combined company following the close of the transaction. Under the terms of the agreement, existing REDLattice shareholders will roll over 100% of their equity, and AE Industrial will remain the largest shareholder of the pro forma company.
The transaction has been unanimously approved by the boards of directors of both REDLattice and Bold Eagle and is expected to close around year-end 2026, subject to approval by Bold Eagle’s shareholders, effectiveness of the registration statement to be filed with the SEC, and other customary closing conditions.
Goldman Sachs & Co. LLC is serving as exclusive financial advisor and exclusive capital markets advisor to Bold Eagle. Jefferies LLC is serving as exclusive financial advisor and exclusive capital markets advisor to REDLattice. Goldman Sachs & Co. LLC and Jefferies LLC also served as placement agents. Kirkland & Ellis LLP is serving as legal advisor to REDLattice, White & Case LLP is serving as legal advisor to Bold Eagle, and Davis Polk & Wardwell LLP is serving as legal advisor to the placement agents.
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Additional information about the proposed transaction, including a copy of the business combination agreement and the investor presentation, will be provided in a Current Report on Form 8-K to be filed by Bold Eagle with the U.S. Securities and Exchange Commission (“SEC”), which will be available at www.sec.gov.
About REDLattice
REDLattice is a U.S.-based global defense tech company delivering preeminent digital access for its customers within the global intelligence community, law enforcement and military. A world leader in cyber superiority, REDLattice delivers foundational expertise and provides unrivaled technical and engineering depth.
Built on a foundation of commercial innovation and customer trust, REDLattice provides customers with a decisive technical edge to secure and dominate tomorrow’s mission environment. Learn more at redlattice.com.
About Bold Eagle Acquisition Corp.
Bold Eagle Acquisition Corp. (Nasdaq: BEAG) is a blank check company incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. Bold Eagle is led by Co-Chairmen Harry Sloan and Jeff Sagansky and Chief Executive Officer Eli Baker, the team behind Eagle Equity Partners’ prior public acquisition vehicles. For more information, visit Bold Eagle’s website.
Additional Information About the Transaction and Where to Find It
In connection with the business combination, Bold Eagle and REDLattice will prepare, and Bold Eagle will file, a registration statement with the SEC, which will include a preliminary proxy statement and preliminary prospectus of Bold Eagle with respect to the securities to be offered in the business combination. After the registration statement is declared effective, Bold Eagle will mail a definitive proxy statement/final prospectus to its shareholders as of a record date to be established for voting on the business combination. The registration statement, including the proxy statement/prospectus contained therein, will contain important information about the business combination and the other matters to be voted upon at a meeting of Bold Eagle’s shareholders. This press release does not contain all the information that should be considered concerning the business combination and other matters and is not intended to provide the basis for any investment decision or any other decision in respect of such matters. Bold Eagle and REDLattice may also file other documents with the SEC regarding the business combination. Bold Eagle’s shareholders and other interested persons are advised to read, when available, the registration statement, including the preliminary proxy statement/preliminary prospectus contained therein, the amendments thereto and the definitive proxy statement/final prospectus and other documents filed in connection with the business combination, as these materials will contain important information about Bold Eagle, REDLattice, and the business combination. The documents filed by Bold Eagle and REDLattice with the SEC also may be obtained free of charge upon written request to Bold Eagle at Bold Eagle Acquisition Corp., 955 Fifth Avenue, New York, NY 10075.
No Offer or Solicitation
This press release shall not constitute a solicitation of a proxy, consent, or authorization with respect to any securities or in respect of the transaction. This press release also does not constitute an offer to sell or the solicitation of an offer to buy any securities, nor will there be any sale of securities in any jurisdictions in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities will be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.
3
Participants in the Solicitation
REDLattice and Bold Eagle and their respective directors, managers and executive officers may be deemed under SEC rules to be participants in the solicitation of proxies of Bold Eagle’s shareholders in connection with the business combination. Investors and security holders may obtain more detailed information regarding the names and interests of Bold Eagle’s directors and officers in Bold Eagle’s filings with the SEC, including Bold Eagle’s Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 23, 2026, and which is available at: https://www.sec.gov/ix?doc=/Archives/edgar/data/0001852207/000121390026032983/ea0276711-10k_bold.htm, under the headings “Directors, Executive Officers and Corporate Governance”, “Executive Compensation”, “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” and “Certain Relationships and Related Transactions, and Director Independence.” Information regarding the persons who may, under SEC rules, be deemed participants in the solicitation of proxies of Bold Eagle’s shareholders in connection with the business combination will be set forth in the registration statement, when available. Investors, shareholders and other interested persons are urged to read the registration statement, the proxy statement/prospectus included therein, and other relevant documents that will be filed with the SEC carefully and in their entirety when they become available because they will contain important information about the transactions. Investors, shareholders and other interested persons will be able to obtain free copies of the proxy statement/prospectus and other documents containing important information about REDLattice and Bold Eagle through the website maintained by the SEC at www.sec.gov.
Forward-Looking Statements
This press release contains certain forward-looking statements that are based on REDLattice’s and Bold Eagle’s management’s beliefs and assumptions and on information currently available to management with respect to Bold Eagle and REDLattice and the business combination, including expectations, hopes, beliefs, intentions, plans, prospects, financial results or strategies regarding REDLattice and statements regarding the anticipated benefits and timing of the completion of the business combination, and REDLattice’s expectations, intentions, strategies, assumptions or beliefs about future events, results of operations or performance or that do not solely relate to historical or current facts. These forward-looking statements generally are identified by the words “believe,” “expect,” “anticipate,” “create” “strategy,” “opportunity,” “provide” “expand” “will,” “would,” “will be,” “will continue,” “will likely result,” “will accelerate” and similar expressions. Forward-looking statements are predictions, projections and other statements about future events or conditions that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties, including: uncertainties as to the timing of the business combination; the risk that the business combination may not be completed in a timely manner or at all; the risk that the business combination may not be completed by prior to Bold Eagle’s business combination deadline; the failure by the parties to satisfy the conditions to the consummation of the business combination, including the approval of Bold Eagle’s shareholders; the occurrence of any event, change or other circumstance that could give rise to the termination of the negotiations or definitive agreements related to the business combination; changes to the proposed structure of the business combination that may be required or appropriate as a result of applicable laws or regulations; changes in business, market, financial, political and regulatory conditions; the effect of the announcement or pendency of the business combination on the REDLattice’s business; the risk factors discussed in Bold Eagle’s Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 23, 2026, the registration statement related to the business combination which is expected to be filed with the SEC, and the other documents filed, or to be filed by the REDLattice or Bold Eagle with the SEC from time to time. The actual results could differ materially from those expressed in, or implied by, these forward-looking statements, and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur. In addition, many factors could cause actual future events to differ materially from the forward-looking statements in this press release. There may also be additional risks that REDLattice and Bold Eagle do not presently know or that REDLattice and Bold Eagle currently believe are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Recipients are cautioned not to put undue reliance on forward-looking statements, and none of REDLattice, Bold Eagle, or any of their respective representatives assumes any obligation and does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise. None of REDLattice or Bold Eagle, or any of their respective representatives gives any assurance that these expectations will be achieved on the time periods expected or at all.
Contact
Media and Investors:
REDLattice@icrinc.com
roconnor@eaglesinvest.com
5
Exhibit 99.2
Investor Presentation
2 Disclaimer This presentation (the "Presentation") has been prepared solely for the purpose of furnishing information on a confidential basis to interested parties to assist them in making their own evaluation with respect to the contemplated private capital raise and related transactions involving Bold Eagle Acquisition Corp. ("Bold Eagle") (collectively, the "Transactions") and REDL Intermediate Holdings, LLC (the "Company" or "REDLattice") and is being delivered solely to recipients that are (i) "qualified institutional buyers" as defined in Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), (ii) sophisticated institutional "accredited investors" within the meaning of Rule 501(a) under the Securities Act or (iii) if located in the United Kingdom or European Union, "qualified investors" (within the meaning of the UK or EU Prospectus Regulations, as applicable) (any such recipient, together with its subsidiaries and affiliates, the "Recipient") on behalf of the Company and Bold Eagle by Goldman Sachs & Co. LLC ("Goldman Sachs") and Jefferies LLC ("Jefferies"), as financial advisors and/or placement agents to Bold Eagle and the Company, as the case may be, in connection with the Transactions. This information is strictly confidential and proprietary, and its disclosure to an unauthorized recipient could cause significant harm to the Company. By accepting this Presentation, you and your affiliates agree to maintain this information in the strictest confidence and to protect and safeguard this Presentation against any unauthorized publication or disclosure. Without the express prior written consent of the Company and Bold Eagle, this Presentation and any information contained within it may not be (i) reproduced (in whole or in part), (ii) copied at any time, (iii) used for any purpose other than your evaluation of the Company and the Transactions or (iv) provided to any person except your employees and advisors with a need to know who are advised of the confidentiality of the information, except to the extent required by law. You acknowledge that you are (a) aware that the United States securities laws prohibit any person who has material non-public information concerning a company from purchasing or selling securities of such company or from communicating such information to any other person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell such securities and (b) familiar with the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (collectively, the "Exchange Act"), and that you will neither use, nor cause any third party to use, this Presentation or any information contained herein in contravention of the Exchange Act, including, without limitation, Rule 10b-5 thereunder. You also acknowledge and agree that this Presentation may contain material non-public information concerning the Company and/or Bold Eagle. By accepting this Presentation and the information contained herein, you and your institution expressly agree to use this Presentation and the information contained herein in accordance with your compliance policies, contractual obligations and applicable laws, including United States federal and state securities laws and comply with the confidentiality obligations and other requirements set forth herein. This Presentation supersedes and replaces all previous oral or written communications between the the Company and Bold Eagle, on the one hand, and you and your representatives, on the other hand, hereto relating to the subject matter hereof. This Presentation and any oral statements made in connection with this Presentation shall not constitute an offer to buy or sell or a solicitation of an offer to buy or sell securities or an invitation or inducement to engage in investment activity, nor shall there be any sale of securities, in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification of such securities under the securities law of any such jurisdiction. This Presentation does not constitute either advice or a recommendation regarding any securities. Any offer of securities, if made, may be made only through definitive offering documents, including, but not limited to, a subscription agreement and related documentation, and will be made in reliance on an exemption from registration under the Securities Act for offers and sales of securities that do not involve a public offering. The information contained herein is qualified in its entirety by reference to the definitive offering documents. The Company and Bold Eagle reserve the right to withdraw or amend the proposed offering for any reason and to reject any subscription agreement for any reason or no reason. Notwithstanding anything contained herein, there can be no assurance that the Transactions will be consummated on the terms described herein, within the time periods contemplated hereby, or at all. Any securities to be offered by the Company in connection with the Transactions to which this Presentation relates have not been registered under the Securities Act or applicable state or foreign securities laws. The opportunity to participate in the Transactions is being offered only to a limited group of sophisticated institutional investors, including "qualified institutional buyers" within the meaning of Rule 144A under the Securities Act and "accredited investors" within the meaning of Rule 501(a) under the Securities Act that are also "institutional accounts" (as defined in Rule 4512(c) of the Financial Industry Regulatory Authority) or, if located in the United Kingdom or European Union, are "qualified investors" (within the meaning of the UK or EU Prospectus Regulations, as applicable) and are understood to be experienced in and have a potential interest in investments of the kind described herein. The securities of the Company may not be offered or sold in the United States absent a registration statement or an applicable exemption from the registration requirements of the Securities Act. The securities of the Company have not been approved or disapproved by the Securities and Exchange Commission (the "SEC"), any state securities commission or other United States or foreign regulatory authority. No representations or warranties, express or implied, are given in, or in respect of, this Presentation. This Presentation is subject to updating, completion, revision, verification and further amendment. None of the Company, Bold Eagle, Goldman Sachs or Jefferies, or their respective affiliates has authorized anyone to provide interested parties with additional or different information. No securities regulatory authority has expressed an opinion about the securities discussed in this Presentation or determined if this Presentation is truthful, accurate or complete, and it is an offense to claim otherwise. None of the Company, Bold Eagle, Goldman Sachs, Jefferies or any of their respective subsidiaries, equity holders, affiliates, representatives, partners, members, directors, officers, employees, advisers or agents (collectively, "Representatives") makes any representation or warranty, express or implied, as to the accuracy or completeness of the information contained herein or any other written, oral or other communications transmitted or otherwise made available to the recipient in the course of its evaluation of the Transactions, and nothing contained herein shall be relied upon as a promise or representation whether as to the past or future performance. To the fullest extent permitted by law, none of the Company, Bold Eagle, Goldman Sachs, Jefferies or any of their respective Representatives shall be responsible or liable for any direct, indirect or consequential loss or loss of profit arising from the use of this Presentation, its contents, its accuracy or sufficiency, its omissions, its errors, reliance on the information contained within it, or on opinions communicated in relation thereto or otherwise arising in connection therewith. The information contained in this Presentation is provided as of the date hereof and may change, and none of the Company, Bold Eagle, Goldman Sachs, Jefferies or any of their respective Representatives undertakes any obligation to update such information, including in the event that such information becomes inaccurate or incomplete. The general explanations included in this Presentation cannot address, nor are intended to address, your specific investment objectives, financial situations or financial needs. Portions of the information contained herein may have been generated using artificial intelligence, which is primarily used to gather general market or industry data and to compile company specific information to facilitate the recipient's preliminary review. Any pro forma financial information, capitalization, ownership percentages or other post-Transactions information included herein is presented for illustrative purposes only, is based on assumptions and estimates deemed reasonable by management as of the date hereof, and is subject to change, which may be material. In addition, this presentation includes historical financial information that has been audited and/or reviewed under private company generally accepted accounting principles in the United States ("GAAP") standards but that has not yet been audited or reviewed under the PCAOB standards that will be used when Bold Eagle and REDLattice file a registration statement on Form S-4 with the SEC in connection with the Transactions (the "Registration Statement"). There can be no assurance that there will not be changes to the historical financial information being included in such Registration Statement as a result of such audit or review or otherwise, and any such changes may be material. Recipients of this Presentation are not to construe its contents, or any prior or subsequent communications from or with the Company, Bold Eagle, Goldman Sachs, Jefferies or any of their respective Representatives, as investment, legal or tax advice. In addition, this Presentation does not purport to be all inclusive or to contain all of the information that may be required to make a full analysis of the Company, Bold Eagle and the Transactions. Recipients of this Presentation should read the definitive documents for the Transactions and make their own evaluation of the Company, Bold Eagle and the Transactions and of the relevance and adequacy of the information and should make such other investigations as they deem necessary. You are urged to request any additional information you may consider necessary or desirable in making an informed investment decision. None of Goldman Sachs, Jefferies or any of their respective Representatives is acting as a financial advisor, placement agent or in any other advisory capacity to you with respect to the Transactions or owes such recipient any duty of loyalty or care (whether in contract, in tort or otherwise) with respect to this Presentation or the Transactions (and each of Goldman Sachs and Jefferies, on behalf of itself and its respective Representatives, expressly disclaims any such advisory, fiduciary or similar relationship). You (and your representative, if any) are invited, prior to the entry into any definitive documentation with respect to the Transactions, to ask questions of, and receive answers from, the Company and Bold Eagle concerning the Transactions and to obtain additional information regarding the Transactions, to the extent the same can be acquired without unreasonable effort or expense, in order to verify the accuracy of the information contained herein. If you decide not to participate in the Transactions, or if the Company, Bold Eagle, Goldman Sachs or Jefferies so requests at any time, you will promptly return to the Company, Bold Eagle, Goldman Sachs or Jefferies all materials furnished to you in connection with the Transactions, including this Presentation, without retaining any copies thereof (except copies retained for bona fide legal or compliance purposes). Past performance by Bold Eagle, the Company, and their respective management teams, is not a guarantee of future performance. Therefore, you should not place undue reliance on the historical record of the performance of Bold Eagle, the Company, and their respective management teams, or businesses associated with them as indicative of future performance of an investment or the returns that the parties will, or are likely to, generate going forward.
3 Disclaimer (Cont'd) Forward-Looking Statements This Presentation (and any oral statements regarding the subject matter of this Presentation) contains certain forward-looking statements that are based on our management's beliefs and assumptions and on information currently available to management with respect to the Company and the Transactions, including the proposed transactions involving Bold Eagle, including expectations, hopes, beliefs, intentions, plans, prospects, financial results or strategies regarding the Company and statements regarding the anticipated benefits and timing of the completion of the Transactions, and the Company's expectations, intentions, strategies, assumptions or beliefs about future events, results of operations or performance or that do not solely relate to historical or current facts. These forward-looking statements generally are identified by the words "believe," "project," "expect," "anticipate," "estimate," "intend," "strategy," "future," "opportunity," "potential," "plan," "may," "should," "will," "would," "will be," "will continue," "will likely result," and similar expressions. Forward-looking statements are predictions, projections and other statements about future events or conditions that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties, including: uncertainties as to the timing of the Transactions; the risk that the Transactions may not be completed in a timely manner or at all; the risk that the Transactions may not be completed by prior to Bold Eagle's business combination deadline; the failure by the Parties to satisfy the conditions to the consummation of the Transactions, including the approval of Bold Eagle's shareholders; the occurrence of any event, change or other circumstance that could give rise to the termination of the negotiations or definitive agreements related to the Transactions; changes to the proposed structure of the Transactions that may be required or appropriate as a result of applicable laws or regulations; changes in business, market, financial, political and regulatory conditions; the effect of the announcement or pendency of the Transactions on the Company's business; the risk factors set forth in the Appendix hereto; and those risk factors discussed in Bold Eagle's Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 23, 2026, the Registration Statement related to the Transactions which is expected to be filed with the SEC, and the other documents filed, or to be filed by the Parties with the SEC from time to time. The actual results could differ materially from those expressed in, or implied by, these forward-looking statements, and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur. In addition, many factors could cause actual future events to differ materially from the forward-looking statements in this Presentation. There may also be additional risks that the Company does not presently know or that the Company currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Recipients are cautioned not to put undue reliance on forward-looking statements, and none of the Company, Bold Eagle, Goldman Sachs, Jefferies or any of their respective Representatives assumes any obligation and does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise. None of the Company, Bold Eagle, Goldman Sachs, Jefferies or any of their respective Representatives gives any assurance that these expectations will be achieved on the time periods expected or at all. To the extent this Presentation includes projected financial information or operating metrics, such projections and metrics are based on assumptions that are inherently subject to significant business, economic, regulatory, market and competitive uncertainties, and actual results may differ materially from those expressed in, or implied by, such projections or metrics. Inclusion of any such projections or metrics should not be regarded as a representation by the Company, Bold Eagle or any other person that such results will be achieved, and recipients should not place undue reliance on such projections or metrics. Industry and Market Data This Presentation has been prepared by Bold Eagle, the Company and their respective Representatives and includes market data and other statistical information from third-party industry publications and sources as well as from research reports prepared for other purposes. Additionally, certain third-party market data and other statistical data included in this presentation was specifically prepared for and at the expense of the Company. Although the Company believes these third-party sources are reliable as of their respective dates, none of the Company, Bold Eagle, Goldman Sachs, Jefferies or any of their respective Representatives has independently verified the accuracy or completeness of this information and cannot assure you of the data's accuracy or completeness. Some data are also based on the Company's good faith estimates, which are derived from both internal sources and the third-party sources. None of the Company, Bold Eagle, Goldman Sachs, Jefferies or any of their respective Representatives makes any representation or warranty with respect to the accuracy of such information. Non-GAAP Measures This Presentation includes certain non-GAAP financial measures that management believes provide useful supplemental information regarding the performance of the business. Such measures should not be considered in isolation or as a substitute for measures prepared in accordance with GAAP. Other companies may calculate such measures differently, and therefore such measures may not be comparable to similarly titled measures presented by other companies. See the appendix for further information regarding these non-GAAP metrics. See appendix for further information regarding these non-GAAP metrics. Trademarks and Intellectual Property All trademarks, service marks, and trade names of a person or its affiliates used herein are trademarks, service marks, or registered trade names of such person or its affiliate, as noted herein. Any other product, company names, or logos mentioned herein are the trademarks and/or intellectual property of their respective owners, and their use is not alone intended to, and does not alone imply, a relationship with any person, or an endorsement or sponsorship by or of any party. Solely for convenience, the trademarks, service marks and trade names referred to in this Presentation may appear without the ®, TM or SM symbols, but such references are not intended to indicate, in any way, that any person or the applicable rights owner will not assert, to the fullest extent under applicable law, their rights or the right of the applicable owner or licensor to these trademarks, service marks and trade names. Risk Factors Certain factors may have a material adverse effect on the business, financial condition and results of operations of Bold Eagle, REDLattice or any combined company created pursuant to the Transactions (the "Combined Company" and, together with Bold Eagle and REDLattice, the "Parties") and your proposed investment through the Transactions. Additional risks that the Parties are unaware of, or that the Parties currently believe are not material, may also become important factors that materially adversely affect any of the Parties. If any of the following risks actually occur, the business, financial condition, results of operations and future prospects of the Parties could be materially and adversely affected. In that event, the trading price of the Combined Company's securities following the Transactions could decline, and you could lose all or part of your investment. Many of the risks and uncertainties affecting the Combined Company below are also relevant to an investment in Bold Eagle, and investors in Bold Eagle may be affected by such risks and uncertainties. See the Appendix to this presentation for certain other risk factor headings relating to the parties and the transaction. Important Information and Where to Find It In connection with the Transactions, the Parties intend to file relevant materials with the SEC, including the Registration Statement, and after the Registration Statement is declared effective, Bold Eagle will mail the prospectus/proxy statement included therein to holders of Bold Eagle's ordinary shares in connection with Bold Eagle's solicitation of proxies for the vote of the Bold Eagle shareholders with respect to the Transactions. This Presentation is not a substitute for the Registration Statement or any other document that may be filed by the Parties with the SEC. INVESTORS AND SHAREHOLDERS OF BOLD EAGLE ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED BY EACH OF THE PARTIES WITH THE SEC IN CONNECTION WITH THE TRANSACTIONS, INCLUDING THE REGISTRATION STATEMENT (WHEN THEY ARE AVAILABLE), BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PARTIES AND THE TRANSACTIONS AND RELATED MATTERS. Investors and shareholders are or will be able to obtain these documents (when they are available) free of charge from the SEC's website at www.sec.gov. Participants in Solicitation The Parties and their respective directors, managers and executive officers may be deemed under SEC rules to be participants in the solicitation of proxies of Bold Eagle's shareholders in connection with the Transactions. Investors and security holders may obtain more detailed information regarding the names and interests of Bold Eagle's directors and officers in Bold Eagle's filings with the SEC, including Bold Eagle's Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 23, 2026, under the headings "Directors, Executive Officers and Corporate Governance", "Executive Compensation", "Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters" and "Certain Relationships and Related Transactions, and Director Independence", which is available at https://www.sec.gov/ix?doc=/Archives/edgar/data/1852207/000121390026032983/ea0276711-10k_bold.htm. Information regarding the persons who may, under SEC rules, be deemed participants in the solicitation of proxies of Bold Eagle's shareholders in connection with the Transactions will be set forth in the Registration Statement, when available. Investors, shareholders and other interested persons are urged to read the Registration Statement, the proxy statement/prospectus included therein, and other relevant documents that will be filed with the SEC carefully and in their entirety when they become available because they will contain important information about the Transactions. Investors, shareholders and other interested persons will be able to obtain free copies of the proxy statement/prospectus and other documents containing important information about the Parties through the website maintained by the SEC at www.sec.gov.
4 Leading Intelligence Prime for National Security We provide integrated technology solutions that support mission-critical national security and intelligence operations 4
5 Enables Customers to Extract Intelligence From Adversaries Across Counter- Terrorism, Counter-Trafficking, and Other National Security Missions Operational Intelligence Integrated Technology Solutions Support the Full Mission Lifecycle, From Vulnerability Discovery Through Operational Access, and Intelligence Collection Capabilities Trusted Partner to Allied Governments, Embedded in Mission-Critical Operations Mission Partners Led By Domain Experts and Elite Technical Specialists Who Understand the Customer Need Specialists Strong Growth Profile With Proven Land & Expand Capabilities Growth Engine $14bn+ Total Addressable Market1 23 Countries Served 200+ VR Experts 30%+ Market Growth Rate2 $260mm Q1'26 LTM Revenue3 44% Q1'26 YoY Revenue Growth3 8 Core Products 100% Federal-level Government Sales $1.3bn+ Total Gross Pipeline4 24% 2025A Mgmt. Adj. EBITDA Margin5 Purpose-Built Platform for National Security and Intelligence Operations Note: 1 Aprio Advisory Group, LLC Report dated May 27, 2026. 2 2026-2029. 3 As of 31-Mar-2026. 4 All revenue-generating opportunities not yet under contract, from initial identification through contract execution; this includes prospects, leads, active pursuits, submitted proposals, and post-submittal awards pending adjudication. 5 Management Adjusted EBITDA is a non-GAAP Measure. Refer to Appendix for a definition of Management Adjusted EBITDA, and a reconciliation to the most comparable GAAP measure.
6 The REDLattice Team Today's Speakers Andy Boyd Chief Executive Officer Dave Mathews Chief Financial Officer Ehud Schneorson Executive Chairman, Paragon Former IDF Major General and Commander of Unit 8200 Idan Nurick CEO, Paragon Former IDF Cyber Commander of Unit 8200 Harry Sloan Co-Chairman Jeff Sagansky Co-Chairman Eli Baker CEO Bold Eagle Go-Public Execution • 30+ years of national security, intelligence, and cyber operations experience • Former Director of the CIA's Center for Cyber Intelligence • 10+ years in the US Department of State and as an Intelligence Officer in the US Air Force • 30+ years of financial, accounting, and executive experience across industries • Formerly served as CFO at Veranex, Omniplex and President of National Security Operations at Constellis Deeply Technical Management Team Kevin Rummel COO Former GM and VP of RAI Government Services Introduction Market Financials Transaction Solutions
7 Critical Operating System and Infrastructure for National Security Missions Vulnerability Research Discovering security weaknesses in adversary systems to facilitate access and observation Detection Identify intelligence threats and targets Intelligence Acquisition Collect and analyze data to anticipate, detect and neutralize threats Target Enumeration Zero-click technology supports the remote monitoring of adversary activity Introduction Market Financials Transaction Solutions V ul ne ra bil ity Re se ar ch a n d C y b e r Ca pa bil ity De ve lo p m e n t To ol De ve lo p m en t O p er at io n s O p ti m iz at io n I n t e ll ig e n c e D ri v e r s & R e q ui re m e n t s E x p e rt D e pl o y m e nt S u p p o r t Intelligence & security platform providing lawful intercept to prevent terrorism, trafficking, and other criminal activities Operational Intelligence Platform
8 23 Countries Currently Served 35 Countries Potentially Served $1.5T+ Combined Defense Spend1 Who We Serve Introduction Market Financials Transaction Solutions Defining the Domain & Leading With Tech Shape Policy and Doctrine Build Trust Through Mission Wins Trusted Partner to US and National Defense Agencies Around the Globe Source: Atlantic Council. Note: 1 Of Nato countries. Threat Anticipation Intelligence Support Federal Law Enforcement Military Planning & Force Protection Our Missions
9 AI Has Accelerated The Emerging Theater of Modern Conflict Volt Typhoon's long shadow - ISS, Jan-2026 U.S. and Allies Declare Salt Typhoon Hack A National Defense Crisis - Forbes, Aug-2025 Cyber attack shuts down U.S. fuel pipeline 'jugular', Biden briefed - Reuters, May-2021 Increasing the importance of REDLattice's mission infrastructure Heightened Near-Peer Threats... ...With Evolving Capabilities... ...Require Solutions That Keep Pace Adversary tooling evolves faster than any human-paced research cycle Nation-states use AI to accelerate exploit development, phishing, and malware mutation The attack surface is no longer static Point-solution vendors respond reactively; the mission demands a proactive posture AI-Assisted Detection Signature Deployment AI-Assisted VR Legacy Nation-State Adversary Exploit Speed Legacy VR Minutes Minutes to Hours Days to Weeks Days Introduction Market Financials Transaction Solutions Not to scale and illustrative
10 Global Defense Budgets are Rising Significantly... Recent geopolitical events have prompted a secular increase in defense spending posture with more growth to come driven by further NATO commitments across the globe "United in the face of profound security threats and challenge...Allies commit to invest 5% of GDP annually on core defence requirements...Allies will account for up to 1.5% of GDP annually to inter alia protect our critical infrastructure, defend our networks, ensure our civil preparedness and resilience, unleash innovation, and strengthen our defence industrial base." – The Hague Summit Declaration, June 25, 2025 $512 $821 $1,336 2025E 2025E at 3% GDP 2025E at 5% GDP Bridging to Non-US NATO Defense Spending Targets 1.9% 3.0% 5.0% Defense Spend as % of GDP +60% +161% ($ in billions) Introduction Market Financials Transaction Solutions Source: NATO and third-party market study report.
11 The US and its allies are accelerating investment in cyber capabilities • Geopolitical conflict is driving sustained government demand for cyber products • CYBERCOM funding is growing and interest in commercial products to defend is also growing • End-to-end encrypted messaging boosts demand for advanced access tools • Regulatory scrutiny favors compliant Western cyber vendors ... and Cyber Tools are a Disproportionate Priority "The One Big Beautiful Bill Act ("OBBBA") (Publ. Law 119-21), enacted in July 2025, is a sweeping piece of legislation that addresses many issues. Among them, it allocates $1 billion over four years to boost US offensive cyber operations. These funds primarily will be used to strengthen the capabilities of US Indo- Pacific Command (INDOPACOM) amid sustained tensions with China." – MaynardNexsen, August 8, 2025 "The forthcoming 2026 US Cybersecurity Strategy is widely expected to reflect a significant policy shift in favor of offensive cyber operations and more a traditional deterrence by punishment approach as part of a seemingly more assertive overall cyber posture. The digital dimension of the recent US operation in Venezuela and the consideration of cyber tactics in Iran are reinvigorating interest in how Washington views and employs digital technologies in pursuit of interests." – Stimson, January 28, 2026 Introduction Market Financials Transaction Solutions 2.5x+ Increase in US DoW Cyber Funding1 Source: SSTI.Org. Note: 1 Since 2015
12 $14 $15 $17 $19 $20 $22 $25 $27 2018 2019 2020 2021 2022 2023 2024 2025 The US Has Dramatically Scaled Its Budget and Focus to Cyber Intelligence PBR, 2018-2025, ($ in billions) Federal Civil Agencies Department of Defense US Government Cyberspace Activities Budget Introduction Market Financials Transaction Solutions Cyber intelligence spending growing nearly 3x faster than broader US DoW spending1 Source: Aprio Advisory Group, LLC Report dated May 27, 2026; US Department of War. Note: 1 From 2018-2025, total Department of War spending vs. US government cyberspace activities budget. C.I.A. Reorganization Prioritizes Cyberoperations "The C.I.A. director announced on Tuesday that the agency was reorganizing to ensure that it can adopt technology faster and further develop an offensive cyberoperations division." – The New York Times June 30, 2026
13 Critical Growth in Global Cyber Budgets Driving $14bn TAM Total Addressable Market Critical Growth in Cyber Budgets • An increasingly complex cybersecurity environment dictated by rising geopolitical tension • Large, critical and growing need among governments and public safety officials globally to gain lawful access to E2EE platforms to fight malign actors • Data explosion and proliferation of E2E encryption generating demand for agile solution capable of navigating the modern digital infrastructure while ensuring consumer privacy & data protection • Lack of access to consumer data offered by operating system and content aggregators • Limited in-house capabilities within government agencies Introduction Market Financials Transaction Solutions $14bn TAM +30% Growth1 Source: Aprio Advisory Group, LLC Report dated May 27, 2026. Note: 1 2026 - 2029. US 63% Rest of World 37%
14 Creating a Category-Defining Intelligence and Security Platform Solutions for Critical Intelligence Applications Key Products From Portfolio of Technology Solutions Providing lawful intercept to prevent terrorism, trafficking, and other criminal activities Modular, scalable stack delivering both productized and tailored solutions for complex cyber challenges ✓Digital forensics ✓AI-assisted vulnerability research ✓Designed to operate on mobile devices and other infrastructure with minimal trace and detection risk ✓Functionality is not impacted by device reboots or device OS upgrades ✓Requires legal warrants, enforces geofencing controls, and excludes all US mobile devices Product Alpha Stealthy, zero-interaction mobile device data extraction with non-attributable encrypted exfiltration Product Echo Secure, low-attribution access to global infrastructure with rapid deployment Product Charlie Stealthy, zero-interaction intelligence collection from mobile devices, including E2EE messaging Product Golf Mobile intelligence platform that enables instantaneous, zero- interaction remote access Product Bravo Purpose-built mobile intelligence platform for close-access reconnaissance and data collection Foxtrot Bravo Golf Product Foxtrot Secure, vetted access to a maintained exploit and cyber tool catalog Product Delta Discreet, zero-interaction data collection from Android devices in restricted environments Product Hotel Unified cyber capability linking malware analysis, intrusion forensics, and post-incident hardening Introduction Market Financials Transaction Solutions
15 Comprehensive Suite of Integrated Technology Solutions Customizable Architecture Independently Verified Fully Accredited Agile and Burnable Accessed using simple browser-based application while using AI for network recovery and maintenance Software for secure remote access to infrastructure anywhere in the world Introduction Market Financials Transaction Solutions Secure, close-access data acquisition with an intuitive UI for streamlined mission execution Portable and Adaptive Comprehensive Data Acquisition Instantaneous Access Operational Agility Purpose-built mobile device intelligence collection and reconnaissance product Bravo Durable and Persistent Unparalleled Access Minimal Footprint Novel Exfiltration Uses AI to maintain and develop new access vectors Remote, zero-interaction, agentless mobile data acquisition software for at-the-edge tactical access Product Alpha Product Bravo Product Echo
16 AI Is at the Core of REDLattice's Capabilities Wealth of vulnerability & access library underpins differentiated AI capabilities Proprietary Data Advantage Scaling Our World-Class Vulnerability Research Engineers With AI AI-led increase in access points creates more vulnerabilities & drives demand Expanding Attack Surface Faster path from discovery to deployable access capabilities Scaled Output Offline agentic AI workflows accelerate vulnerability research & access development Accelerated Discovery Additional Advantages • Offline LLM Research – removes the commercial, cloud-based LLM guiderails while providing for additional protections to ensure developed IP remains protected • Commercial LLMs – standard LLMs provide opportunities to smooth out development pipelines allowing researchers to focus more on the hardest problems • Backoffice Integration – automation of tasks such as proposal and whitepaper generation along with analytics to assist with technology assessment Introduction Market Financials Transaction Solutions
17 • Custom, integrated platforms • Classified systems • Long-cycle, programmatic contracts Competitive Landscape – Our Differentiated Position Introduction Market Financials Transaction Solutions Forensics Federal Contractors Product Offerings Landscape • Tactical, user-facing tools • Productized / standardized • Shorter sales cycles, budget driven Source: Aprio Advisory Group, LLC Report dated May 27, 2026; Company websites.
18 Immediate M&A and Product Expansion of REDLattice's Operational Capabilities Introduction Market Financials Transaction Solutions Note: 1 All targets in initial stages of diligence. Collect Operate Protect & Sustain PRIORITY OT Security Open-Source Intelligence IoT Device Intelligence Threat Intelligence Full-Spectrum Cyber Ops + others Immediate Cross-Sell Adjacencies Finding & acquiring intelligence Executing offensive actions Identity, resilience & visibility Select Illustrative M&A Targets1 Managed Attribution ~$25mm est. rev. AI-Enabled Analytics $25mm+ est. rev. Open-Source Intelligence ~$100mm est. rev. IoT Device Intelligence <$20mm est. rev. OT Security $100mm+ est. rev.
19 Key Financials at a Glance Scale Operating Leverage Predictable 44% Q1'26 YoY Revenue Growth1 24% 2025A Management Adjusted EBITDA Margin2 $225mm+ Backlog4 $260mm Q1'26 LTM Revenue1 $1.3bn+ Total Gross Pipeline3 80% 2025A Gross Margin Introduction Market Financials Transaction Solutions Note: Metrics as of 31-Dec-2025 unless otherwise specified. 1 As of 31-Mar-2026. 2 Management Adjusted EBITDA is a non-GAAP Measure. Refer to Appendix for a definition of Management Adjusted EBITDA, and a reconciliation to the most comparable GAAP measure. 3 All revenue-generating opportunities not yet under contract, from initial identification through contract execution; this includes prospects, leads, active pursuits, submitted proposals, and post-submittal awards pending adjudication. 4 Total contract value awarded to the Company less total revenue recognized inception to date for each contract.
20 The REDLattice Business Model 100% Federal-level Government Sales Sale to Government Agencies 72% Annual / 28% Multi-Year Length of Contract 96% Gross Revenue Retention2 High-Retention Customer Base Introduction Market Financials Transaction Solutions 98% Renewal Rate3 Re-Occurring Revenue Model 87% (Mgmt. Adj. EBITDA – Adj. Capex) / Mgmt. Adj. EBITDA1 High Capital Efficiency Note: Metrics as of 31-Dec-2025 unless otherwise specified. 1 Based on (Management Adjusted EBITDA – Adjusted Capex) / Management Adjusted EBITDA; REDLattice CY2025 capex adjusted to exclude $4.3mm leasehold improvements. Refer to Appendix for a reconciliation to Capex. 2 GRR reflects product revenue only. 3 Customer renewal rate.
21 Exciting Platform Growth Opportunity $246mm $480mm $45mm ~$770mm Existing Customers Purchasing New Products 2025A Revenue Existing Customers Increasing Wallet Share of Existing Products ~$525mm Embedded Opportunity1 by selling current products to existing customer base Current Platform Opportunity With Existing Customers Merger of REDLattice and Paragon has opened new markets and products that are being rapidly adopted Introduction Market Financials Transaction Solutions Growth Vectors Upsell to Existing Customers 1 Cross-sell to Existing Customers 2 New Products / Innovation 3 New Customers / Agencies 4 M&A 5 ~$525mm Embedded Opportunity Existing Near-Term Opportunity Note: 1 Embedded Opportunity estimated by the Company on an account-by-account basis.
22 Deeply Embedded Customer Relationships Enable Substantial Expansion Introduction Market Financials Transaction Solutions Land & Expand Growing customers via cross-sell of comprehensive product suite Long-Term Customers Delivering mission-critical solutions embedded in our customers' workflows Operationally Proven Mission-tested capabilities operational in 23 countries among 30+ customers Case Study: International Customer #1 $1.1 $2.0 $5.4 $6.7 $15.2 Year 1 Year 2 Year 3 Year 4 Year 5 Revenue ($ in millions, Actuals) Note: 1 Recently signed agreement, $5mm per year on 5-year contract with Total Contract Value of $25mm. Case Study: US Customer #1 $1.8 $2.5 $2.9 $4.3 $25.0 Year 1 Year 2 Year 3 Year 4 Year 5+ Revenue ($ in millions, Actuals) $5mm revenue per year1 1
23 Robust Historical Pipeline Growth... Introduction Market Financials Transaction Solutions Demonstrated Track Record of Pipeline Growth (TCV, $mm) $235 $838 $1,199 $1,305 Q4'23 Q4'24 Q4'25 Q1'26 130 180 227 # of Opportunities 5.3x 2025 Revenue Robust Pipeline Qualification & Validation • Highly qualified pipeline: Opportunities are added only after relevant agency-specific funding is identified or budgeted • Direct agency validation: Each opportunity reflects active conversations with the government agency expected to buy • Procurement-based opportunities: Pipeline inclusion requires a defined need, buying path, and alignment to a real acquisition process • Credible revenue visibility: The pipeline is conservative and high-confidence, with real budget, buyer, and procurement momentum 248
24 ...With Proven High Win Rates Providing Strong Visibility to Near-Term Growth Momentum Introduction Market Financials Transaction Solutions Note: 1 Close rate calculated as closed pipeline / beginning pipeline. 2 Win rate calculated as closed-won pipeline / (closed-won + closed-lost) pipeline. $1,199 Q4'25 Pipeline 2026 TCV Awarded 2026 Revenue $838 $303 $246 Q4'24 Pipeline 2025 TCV Awarded 2025 Revenue ($ in millions) +43% YoY $838mm of YE 2024 pipeline converted to $246mm of 2025 Revenue 40%+ Close Rate1 X 80%+ Win Rate2
25 Strong Q1 Performance Supports Path to Long-Term Operating Objectives Introduction Market Financials Transaction Solutions Capitalize on strong growth opportunities in global defense and intelligence Increase margins through efficiency and operating leverage Optimize capital efficiency and FCF conversion Opportunistic M&A $45mm Q1'26 Revenue 28% Q1'26 LTM Revenue Growth 70% Q1'26 YoY Pipeline Growth Note: Metrics as of 31-Mar-2026 unless otherwise specified. Seasonally the lowest revenue quarter (~15% of full year), Q1 showing early indications of a strong 2026 $260mm Q1'26 LTM Revenue 44% Q1'26 YoY Revenue Growth
26 26
27 Appendix
28 ($ in Millions, Except per Share Data) Transaction Overview Planned Sources & Uses Sources of Funds Use of Funds Cash from BEAG Trust1 $275 45.1% Trx. Proceeds to PF Balance Sheet $197 32.4% Cash from Common Stock PIPE 60 9.8% Debt Repayment2 213 34.9% Cash from Convertible Note 275 45.1% Cash Earnout to Paragon 119 19.5% Goldman Sachs Facility Repayment 20 3.3% Estimated Transaction Expenses 61 10.0% Total Sources of Funds $610 100.0% Total Uses of Funds $610 100.0% Expected Pro Forma Ownership3 Ownership Shares (mm) Ownership (%) REDLattice Consideration Shares4 91.5 71.4% Common Stock PIPE Shares5 6.0 4.7% Public SPAC Shares6 27.4 21.4% Upfront Sponsor Shares7 3.1 2.4% Total 128.1 100.0% 71.4% 4.7% 21.4% 2.4% RedLattice Investors Public SPAC Shares Upfront Sponsor Shares Common Stock PIPE Shareholders Introduction Market Financials Transaction Solutions Note: 1 Cash in trust is subject to redemptions. Assumes no redemptions and trust balance as of 6/30/2026. 2 Estimated figure assuming a 12/31/2026 closing; to be finalized at closing. 3 Excluding the shares underlying Convertible Notes. 4 Reflects a $1.25bn pre-money enterprise value for REDLattice, less $209.8mm net debt as of 06/30/2026, earnout payout of $6.2mm in Jul-26 and $118.8mm of remaining cash earnout. Assumes $10 per share transaction price. 5 Assumes no Common Stock PIPE discount relative to transaction pricing. 6 Includes 1.3 million underlying rights issued to BEAG. 7 The sponsor has 2.035mm of earnout shares at a vesting price of $12.50-$17.50. Key Transaction Terms • Pre-money enterprise value of $1.25B • Business combination and Common Stock PIPE priced at $10.00 per share, and Convertible Notes issued with a $12.50 fixed conversion price • $60mm Common Stock PIPE and $275mm Convertible Note
29 The Company believes that the use of Adjusted EBITDA, Adjusted Capex, Management Adjusted EBITDA, Management Adjusted EBITDA – Adjusted Capex1, and Management Adjusted EBITDA – Adjusted Capex / Management Adjusted EBITDA1 as non-GAAP financial measures provides an additional tool for investors to use in comparing the Company's financial condition and results of operations with other similar companies, many of which present similar non-GAAP financial measures to investors, and to assess certain financial and business trends relating to the Company's financial condition and results of operations. Among other things, the Company's management uses Adjusted EBITDA, Adjusted Capex, and Management Adjusted EBITDA for trend analyses and for budgeting and planning purposes. Management does not consider Adjusted EBITDA, Adjusted Capex, Management Adjusted EBITDA, Management Adjusted EBITDA less Adjusted Capex or Management Adjusted EBITDA less Adjusted Capex / Management Adjusted EBITDA in isolation or as an alternative to financial measures determined in accordance with GAAP. Adjusted EBITDA is defined as net income before interest, taxes, depreciation / amortization and certain other items that the Company considers to be non-recurring in nature and that it believes is not indicative of future performance. Management Adjusted EBITDA is defined as Adjusted EBITDA further adjusted for additional items that the Company believes is not indicative of future performance (see Note 6 to the table below for more information). Adjusted Capex is defined as capital expenditures after adding back leasehold improvement, which the Company considers to be non-recurring in nature and not indicative of future performance. Management Adjusted (EBITDA - Capex) is defined as Management Adjusted EBITDA after removing Adjusted Capex. Management Adjusted (EBITDA - Capex) / EBITDA is defined as Management Adjusted EBITDA after removing Adjusted Capex, divided by Management Adjusted EBITDA. The principal limitation of Adjusted EBITDA, Management Adjusted EBITDA, Adjusted Capex, Adjusted EBITDA less Capex, , Management Adjusted (EBITDA - Capex) or Management Adjusted (EBIDA - Capex) / EBITDA is that each excludes significant items that are (or will be) required by GAAP to be recorded in the Company's financial statements. In addition, Adjusted EBITDA, Management Adjusted EBITDA and Adjusted EBITDA less Capex are subject to inherent limitations as each reflects the exercise of judgments by management about which expenses and income are excluded and included in determining such non-GAAP financial measure. In order to compensate for these limitations, management presents (or on go-forward basis will present) non- GAAP financial measures in connection with GAAP results. You should review the Company's audited financial statements, which will be included in its registration statement to be filed with the SEC as part of this transaction. Non-GAAP financial measures have limitations as analytical tools, and you should not consider them in isolation or as a substitute for analysis of the Company's results as reported under GAAP. Other companies may calculate similarly titled non-GAAP financial measures differently, and therefore the Company's non-GAAP financial measures may not be comparable to similarly titled measures used by other companies. Non-GAAP Reconciliation: Management Adjusted EBITDA & Adjusted Capital Expenditures1 Note: 1 Management Adjusted EBITDA, Management Adjusted EBITDA – Adjusted Capex, and (Management Adjusted EBITDA – Adjusted Capex) / Management Adjusted EBITDA are non-GAAP measures. 2 Includes change in Paragon earnout amount. 3 Includes consulting, legal, bonuses and other third-party and transaction- specific costs associated with the acquisition of Paragon. 4 Includes severance, lease abandonment, and reorganization-related costs associated with the consolidation of Paragon's US operations. 5 Management fees paid to PE sponsor that will cease upon close of the transaction. 6 Includes consulting fees ($2.1mm), discreet bonus/compensation arrangements ($0.6mm), and other adjustments permitted pursuant to the Company's credit agreement. These adjustments are solely used for the purpose of determining compliance with the financial covenants in the Company's credit agreement. ($ in millions) Year Ended December 31, 2025 Net Income (Loss) $(33.1) (+) Other Income – Other2 (27.8) (+) Interest expense, net 29.3 (+) Taxes 0.9 (+) Depreciation and amortization 63.7 EBITDA $ 33.1 (+) Share-based compensation expense 5.9 (+) Transaction related costs3 9.3 (+) Restructuring costs4 2.5 (+) Management fees5 2.3 (+) FV of Warrants 1.4 Adjusted EBITDA $ 54.4 (+) Other Adjustments6 3.5 Management Adjusted EBITDA $ 57.9 Management Adjusted EBITDA Margin 24% Capital Expenditures $12.1 (-) Leasehold improvement (4.3) Adjusted Capital Expenditures $7.8 (Management Adjusted EBITDA – Adjusted Capex) / Management Adjusted EBITDA 87%
30 Deep Technology and Intelligence Expertise Andy Boyd Chief Executive Officer Former Director of the CIA's Center for Cyber Intelligence Ehud Schneorson Paragon Executive Chairman Former IDF Major General and Commander of Unit 8200 Idan Nurick CEO, Paragon Business Unit Former IDF Cyber Commander of Unit 8200 Kevin Rummel President & Chief Operating Officer Former GM and VP of RAI Government Services Kirk Konert Chairman Pam Braden Board Member Gen. James Mingus Board Member Florent Groberg Board Member John Ayers Vice Chairman Deep Technical Expertise Combined with Leadership Forged on the Front Lines of Modern Cyber Conflict With Long-Term Support From a Deeply Experienced Board Team Experience Syed Ali Technical Account Manager Christopher Roberts Software Engineer Jim Maroulis Senior Software Engineer Reginald Brothers Board Member
31 $81 $246 $102 - $105 1H'25A FY'25A 1H'26E Strong 1H 2026 Revenue Growth, Contract Wins, and Pipeline Expansion Highlight Acceleration of U.S. Intelligence/Defense Cyber Priorities • Largest contract in company history: In Q2, REDLattice signed a new EMEA customer with an annual contract value of approximately $26mm covering 3 products • REDLattice's U.S. pipeline growth continues to accelerate, with the U.S. pipeline increasing 59% YoY as of June 30, 20262 • Pipeline growth of +23% through the first half of the year2,3 • Growing emphasis on offensive cyber capabilities across the U.S. intelligence community Note: 1 1H 2026 financial information presented herein is preliminary, based on management's current estimates, and subject to change pending completion of the Company's quarter-end financial close and review procedures. 2 All revenue-generating opportunities not yet under contract, from initial identification through contract execution; this includes prospects, leads, active pursuits, submitted proposals, and post-submittal awards pending adjudication. 3 Pipeline growth is from December 31, 2025 to June 30, 2026. 4 Based on mid-point of the range. Preliminary Unaudited Est. Revenue for 1H 20261 – 27%4 YoY Growth 1H'26E Business Highlights1 ($ in millions) C.I.A. Reorganization Prioritizes Cyberoperations "The C.I.A. director announced on Tuesday that the agency was reorganizing to ensure that it can adopt technology faster and further develop an offensive cyberoperations division." – The New York Times June 30, 2026 33% of FY25 revenue Government contracting creates a seasonally back-end loaded revenue profile
32 Risk Factors Risks Related to Bold Eagle and the Transactions • There is no assurance that the Transactions will be completed • Bold Eagle's sponsor and its directors and officers and their affiliates have interests in the Transactions that are different from, or in addition to and/or in conflict with, those of Bold Eagle's shareholders generally • Bold Eagle's sponsor holds a significant number of Bold Eagle's ordinary shares and will lose its entire investment in Bold Eagle if an initial business combination is not completed • The ability of Bold Eagle's public shareholders to exercise redemption rights with respect to a large number of shares could deplete Bold Eagle's trust account prior to the Transactions and thereby diminish the amount of working capital available to the combined company • Bold Eagle's public shareholders who do not redeem their shares will experience immediate dilution as a consequence of the Transactions • There is no assurance that the contemplated private capital rise (the "PIPE Investment") or any other additional financing will be completed • There can be no assurance that the Company and Bold Eagle will be able to raise sufficient capital in the PIPE Investment to satisfy any minimum cash conditions of the business combination • Bold Eagle may be targeted by securities class action and derivative lawsuits that could result in substantial costs and may delay or prevent the Transactions from being completed • The PIPE Investment will only be consummated if the business combination closes, and the closing of the business combination may be subject to a number of closing conditions, some of which may be outside of Bold Eagle's and the Company's control • The securities to be issued in the PIPE Investment will not be registered with the SEC and, prior to such registration cannot be transferred or resold except in a transaction exempt from or not subject to the requirements of the Securities Act and applicable state securities laws • An active trading market for the combined company's securities may not be available to provide shareholders with adequate liquidity. The market price of the combined company's securities may be volatile, and shareholders could lose all or a significant part of their investment • Bold Eagle's sponsor, officers and directors and others may purchase shares from Bold Eagle public shareholders or take other actions, which may influence a vote on the Transactions and reduce the public "float" of Bold Eagle ordinary shares • If the expected benefits of the Transactions do not materialize, or do not meet the expectations of investors or securities analysts, the market price of Bold Eagle's securities or, following the closing, the combined company's securities, may decline • If Bold Eagle is unable to complete an initial business combination by October 25, 2026 (or such later date as may be approved by Bold Eagle's shareholders in accordance with its organizational documents), Bold Eagle will cease all operations except for the purpose of winding up, redeem 100% of the outstanding public shares and, subject to the approval of the remaining shareholders and Bold Eagle's board of directors, dissolve and liquidate. If the Transactions are not completed prior to such date, there can be no assurance that Bold Eagle will obtain shareholder approval to extend such date • The combined company will have discretion in how it uses the proceeds of the Transactions and may not use these proceeds effectively, which could affect its results of operations and cause the market price of its securities to decline
33 Risk Factors (Cont'd) Risks Related to the Company's Business and Operations • If we do not continue to develop new and technologically advanced solutions and enhance our products, our future revenue, financial and operating results may be adversely affected • If law enforcement and other government agencies do not continue to purchase, accept and use our solutions, our revenue will be adversely affected • Cyber-attacks and security vulnerabilities can disrupt our business and harm our competitive position • If customers do not properly implement our solutions, they may achieve less favorable outcomes than expected • We may not successfully develop and deploy new technologies • Real or perceived errors, failures, defects or bugs in our solutions could adversely affect our results of operations, financial results, growth prospects and reputation • Our reputation and business may be harmed by news or social media coverage or other external scrutiny • We may not enter into relationships with potential customers if we consider their activities to be inconsistent with our organizational mission or values, which may adversely affect revenue growth • We may be unable to hire, retain, train, and motivate qualified personnel and senior management • We face intense competition, including as a result of consolidation in our industry • Fluctuations in foreign currency exchange rates could materially affect our financial results • The security of our operations and the integrity of our software solutions are critical to our operations • Our platforms are complex and may have a lengthy implementation process • Our platforms must operate with third-party products and services • In order to remain effective, we must keep pace with technological advances made on third-party products and services on which our platforms operate • We have invested in, and may in the future acquire or invest in, companies and technologies and we may not be able to successfully integrate such companies and technologies or achieve anticipated efficiencies • The use of certain of our solutions may be perceived as, or determined by the courts to be, in violation of privacy rights and related laws • Some of our solutions may be used by customers in a way that is, or that is perceived to be, incompatible with human rights • Customers may seek to use our solutions in a manner inconsistent with applicable laws • We have identified certain material weaknesses in our internal control over financial reporting. If remediation of these material weakness is not effective, if we experience additional material weaknesses, or if we otherwise fail to maintain an effective system of internal controls in the future, we may not be able to accurately report our financial condition or results of operations
34 Risk Factors (Cont'd) Risks Related to the Company's Customers • Our sales to government customers expose us to business volatility and risks, including government budgeting cycles and appropriations, early termination, audits, investigations, sanctions and penalties • Evolving government procurement policies and increased emphasis on cost over performance could adversely affect our business Risks Related to the Company's Intellectual Property • Failure to adequately obtain, maintain, protect and enforce our intellectual property and other proprietary rights could adversely affect our business • We may be subject to information technology system breaches, failures, or disruptions that could harm our operations, financial condition or reputation • We may be subject to intellectual property rights claims • There may be real or perceived errors, failures, defects, or bugs in our platforms Risks Related to the Company's Legal and Regulatory Environment • Our business is subject to complex and evolving U.S. and non-U.S. laws regarding privacy, data protection and security • We are subject to export laws, regulations and governmental trade controls • Our non-U.S. sales and operations subject us to additional risks and regulations • We may encounter unfavorable outcomes in legal, regulatory, and administrative proceedings • Many of our customer contracts may be terminated for convenience • Our business could be adversely affected if employees cannot obtain security clearances
Exhibit 99.3
| REDL Intermediate | |
| Holdings, LLC and | |
| Subsidiaries | |
| Consolidated Financial Statements | |
| December 31, 2025 and 2024 |
REDL Intermediate Holdings, LLC and Subsidiaries
Table of Contents
December 31, 2025 and 2024
| Report of Independent Registered Accounting Firm | 1 |
| Consolidated Balance Sheets | 3 |
| Consolidated Statements of Operations | 4 |
| Consolidated Statements of Redeemable Preferred Units and Members’ Equity | 5 |
| Consolidated Statements of Cash Flows | 6 |
| Notes to the Consolidated Financial Statements | 8 |
i
Report of Independent Registered Accounting Firm
[Placeholder for Independent Registered Accounting Firm Report]
1
Report Of Independent Registered Accounting Firm
[Placeholder for Independent Registered Accounting Report]
2
REDL Intermediate Holdings, LLC and Subsidiaries
Consolidated Balance Sheets
As of December 31, 2025, and 2024
(Dollars in thousands except unit and per unit data)
| December 31,
2025 | December 31, 2024 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 41,046 | $ | 48,525 | ||||
| Restricted cash | 365 | 254 | ||||||
| Accounts receivable | 72,631 | 57,686 | ||||||
| Contract assets | 15,313 | - | ||||||
| Prepaid expenses | 2,644 | 2,468 | ||||||
| Other current assets | 2,413 | 1,176 | ||||||
| Total current assets | 134,412 | 110,109 | ||||||
| Noncurrent assets | ||||||||
| Property and equipment, net | 17,080 | 10,737 | ||||||
| Goodwill | 353,685 | 353,685 | ||||||
| Technology, net | 172,727 | 217,087 | ||||||
| Customer relationships, net | 250,742 | 264,122 | ||||||
| Trade name, net | 496 | 736 | ||||||
| Right-of-use assets, net | 13,455 | 15,241 | ||||||
| Other assets | 4,017 | 1,358 | ||||||
| Total assets | $ | 946,614 | $ | 973,075 | ||||
| Liabilities, redeemable preferred units and members’ equity | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 11,129 | $ | 2,428 | ||||
| Accrued expenses | 8,947 | 7,028 | ||||||
| Related party payable | 1,855 | 7,606 | ||||||
| Accrued employee bonuses | 12,218 | 6,393 | ||||||
| Income taxes payable | 3,739 | 4,906 | ||||||
| Operating lease liabilities, current | 7,106 | 2,140 | ||||||
| Deferred revenue, current | 23,292 | 18,788 | ||||||
| Long-term debt, net current | 24,052 | 9,635 | ||||||
| Earnout obligation, current | 238,300 | - | ||||||
| Other current liabilities | 10,060 | 8,995 | ||||||
| Total current liabilities | 340,698 | 67,919 | ||||||
| Noncurrent liabilities | ||||||||
| Operating lease liabilities, noncurrent | 8,180 | 13,245 | ||||||
| Deferred revenue, noncurrent | 89 | 737 | ||||||
| Long-term debt, net of current portion | 207,756 | 211,066 | ||||||
| Deferred tax liability, net | 53,547 | 55,833 | ||||||
| Earnout obligation, noncurrent | - | 269,600 | ||||||
| Warrant liability | 2,700 | 1,350 | ||||||
| Total liabilities | 612,970 | 619,750 | ||||||
| Commitments and contingencies (Note 15) | ||||||||
| Redeemable preferred units | ||||||||
| Class P (252,402,492 issued and outstanding at December 31, 2025 and 2024) | 378,604 | 378,604 | ||||||
| Members’ equity | ||||||||
| Class A (81,917,797 issued and outstanding, no par value at December 31, 2025 and 2024) | - | - | ||||||
| Class S (78,038,677 issued and outstanding, no par value at December 31, 2025 and 73,038,677 issued and outstanding, no par value at December 31, 2024) | - | - | ||||||
| Additional paid-in capital | 13,416 | - | ||||||
| Accumulated deficit | (58,376 | ) | (25,279 | ) | ||||
| Total members’ equity | (44,960 | ) | (25,279 | ) | ||||
| Total liabilities, redeemable preferred units and members’ equity | $ | 946,614 | $ | 973,075 | ||||
The accompanying notes are an integral part of these consolidated financial statements.
3
REDL Intermediate Holdings, LLC and Subsidiaries
Consolidated Statements of Operations
Years Ended December 31, 2025, and 2024
(Dollars in thousands except unit and per unit data)
| For
the year ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Revenue | ||||||||
| Product | $ | 148,095 | $ | 35,991 | ||||
| Maintenance | 54,278 | 2,087 | ||||||
| Services | 43,905 | 24,206 | ||||||
| Total revenue | 246,278 | 62,284 | ||||||
| Cost of revenue | ||||||||
| Product and maintenance cost (exclusive of depreciation and amortization) | 36,828 | 4,161 | ||||||
| Services cost (exclusive of depreciation and amortization) | 13,252 | 17,314 | ||||||
| Total cost of revenue (exclusive of depreciation and amortization) | 50,080 | 21,475 | ||||||
| Selling, general and administrative | 76,491 | 14,302 | ||||||
| Related party expenses | 2,299 | 760 | ||||||
| Research and development | 82,916 | 3,455 | ||||||
| Depreciation and amortization | 63,732 | 6,182 | ||||||
| Change in fair value of earnout obligation | (31,300 | ) | - | |||||
| Transaction costs | - | 13,696 | ||||||
| Transaction costs, related party | - | 15,000 | ||||||
| Total operating expenses | 194,138 | 53,395 | ||||||
| Operating income (loss) | 2,060 | (12,586 | ) | |||||
| Change in warrant liability fair value | 1,350 | - | ||||||
| Foreign currency loss | 3,415 | 377 | ||||||
| Interest expense, net | 29,320 | 2,460 | ||||||
| Other expenses | 135 | - | ||||||
| Loss before income tax expense (benefit) | (32,160 | ) | (15,423 | ) | ||||
| Income tax expense (benefit) | 937 | (418 | ) | |||||
| Net loss | $ | (33,097 | ) | $ | (15,005 | ) | ||
| Net loss available to common unitholders | $ | (33,097 | ) | $ | (149,869 | ) | ||
| Weighted-average common units outstanding – Basic and diluted | 157,456,474 | 85,499,732 | ||||||
| Net loss per unit – Basic and diluted | $ | (0.21 | ) | $ | (1.75 | ) | ||
The accompanying notes are an integral part of these consolidated financial statements.
4
REDL Intermediate Holdings, LLC and Subsidiaries
Consolidated Statements of Redeemable Preferred Units and Members’ Equity
Years Ended December 31, 2025, and 2024
(Dollars in thousands except unit and per unit data)
| Redeemable
Preferred Units Class P | Member’s Equity | Class A | Class S | Additional
Paid-In Capital | Accumulated Deficit | Total Members’ Equity | ||||||||||||||||||||||||||
| Units | Amount | Amount | Units | Units | Amount | Amount | Amount | |||||||||||||||||||||||||
| Balances at December 31, 2023 | - | $ | - | $ | 77,635 | - | - | $ | - | $ | (3,683 | ) | $ | 73,952 | ||||||||||||||||||
| Reorganization (Note 1) | - | - | (77,635 | ) | 81,755,797 | - | 77,635 | - | - | |||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | (15,005 | ) | (15,005 | ) | ||||||||||||||||||||||
| Rollover equity (Note 3) | - | - | - | - | 73,038,677 | 47,000 | - | 47,000 | ||||||||||||||||||||||||
| Issuance of units | 252,402,492 | 243,740 | - | 162,000 | - | 105 | - | 105 | ||||||||||||||||||||||||
| Fair value of replacement awards | - | - | - | - | - | 3,533 | - | 3,533 | ||||||||||||||||||||||||
| Accretion of redeemable preferred units to redemption value | - | 134,864 | - | - | - | (128,273 | ) | (6,591 | ) | (134,864 | ) | |||||||||||||||||||||
| Balances at December 31, 2024 | 252,402,492 | 378,604 | - | 81,917,797 | 73,038,677 | - | (25,279 | ) | (25,279 | ) | ||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | (33,097 | ) | (33,097 | ) | ||||||||||||||||||||||
| Equity-based compensation | - | - | - | - | - | 5,916 | - | 5,916 | ||||||||||||||||||||||||
| Equity contribution | - | - | - | - | - | 2,500 | - | 2,500 | ||||||||||||||||||||||||
| Issuance of units | - | - | - | - | 5,000,000 | 5,000 | - | 5,000 | ||||||||||||||||||||||||
| Balances at December 31, 2025 | 252,402,492 | $ | 378,604 | $ | - | 81,917,797 | 78,038,677 | $ | 13,416 | $ | (58,376 | ) | $ | (44,960 | ) | |||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
5
REDL Intermediate Holdings, LLC and Subsidiaries
Consolidated Statements of Cash Flows
Years Ended December 31, 2025 and 2024
(Dollars in thousands except unit and per unit data)
| 2025 | 2024 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | (33,097 | ) | $ | (15,005 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | 63,732 | 6,182 | ||||||
| Loss on disposal of property and equipment | - | 143 | ||||||
| Deferred Taxes | (2,286 | ) | (3,268 | ) | ||||
| Amortization of debt issuance costs | 1,684 | 692 | ||||||
| Paid-in-kind interest | 552 | - | ||||||
| Equity compensation | 5,916 | - | ||||||
| Non-cash operating lease expense | (1,230 | ) | - | |||||
| Amortization of warrant debt issuance costs | - | 7 | ||||||
| Change in earnout obligation fair value | (31,300 | ) | - | |||||
| Change in warrant fair value | 1,350 | - | ||||||
| Foreign currency (gain) loss, net | 3,415 | 377 | ||||||
| Changes in operating assets and liabilities, net of effects of business acquired | ||||||||
| Accounts receivable | (17,173 | ) | (13,152 | ) | ||||
| Contract assets | (15,783 | ) | - | |||||
| Prepaid expenses and other current assets | (1,413 | ) | (1,304 | ) | ||||
| Other assets | (2,659 | ) | (398 | ) | ||||
| Accounts payable | 8,360 | (898 | ) | |||||
| Accrued expenses | 1,919 | 3,517 | ||||||
| Accrued employee bonuses | 5,450 | 6,352 | ||||||
| Transaction expenses payable, related party | (7,606 | ) | 7,606 | |||||
| Income taxes payable | (1,167 | ) | 4,906 | |||||
| Deferred revenue | 3,856 | 5,423 | ||||||
| Right-of-use assets | 3,311 | 764 | ||||||
| Operating Lease liabilities | (439 | ) | (360 | ) | ||||
| Related party payable | 1,855 | - | ||||||
| Other current liabilities | 1,109 | (13,323 | ) | |||||
| Net cash used in operating activities | (11,644 | ) | (11,739 | ) | ||||
| Business acquisition, net of cash and restricted cash acquired (Note 3) | - | (389,708 | ) | |||||
| Purchase of property & equipment | (12,095 | ) | (485 | ) | ||||
| Net cash used in investing activities | (12,095 | ) | (390,193 | ) | ||||
The accompanying notes are an integral part of these consolidated financial statements.
6
REDL Intermediate Holdings, LLC and Subsidiaries
Consolidated Statements of Cash Flows
Years Ended December 31, 2025 and 2024
(Dollars in thousands except unit and per unit data)
| Cash flows from financing activities: | ||||||||
| Equity Contribution | 2,500 | - | ||||||
| Cash received from issuing stock | 5,000 | 243,740 | ||||||
| Payment of seller note, related party | - | (17,500 | ) | |||||
| Retirement of promissory note, related party | (12,000 | ) | - | |||||
| Proceeds from promissory notes, related party | 12,000 | - | ||||||
| Payments on term loan | (11,500 | ) | - | |||||
| Proceeds from issuance of long term debt, net | 12,000 | 230,000 | ||||||
| Proceeds from revolver credit facility | 10,000 | - | ||||||
| Payment of debt issuance costs | (1,629 | ) | (8,648 | ) | ||||
| Net cash provided by financing activities | 16,371 | 447,592 | ||||||
| Change in cash, cash equivalents and restricted cash | (7,368 | ) | 45,660 | |||||
| Cash, cash equivalents and restricted cash | ||||||||
| Beginning of year | 48,779 | 3,119 | ||||||
| End of year | $ | 41,411 | $ | 48,779 | ||||
| Reconciliation to the consolidated balance sheet | ||||||||
| Cash and cash equivalents | 41,046 | 48,525 | ||||||
| Restricted cash | 365 | 254 | ||||||
| Total cash, cash equivalents and restricted cash | $ | 41,411 | $ | 48,779 | ||||
| Supplemental cash flow information | ||||||||
| Cash paid for interest | 27,804 | - | ||||||
| Cash paid for income taxes | 4,843 | 44 | ||||||
| Non-cash investing and financing activities | ||||||||
| Business acquisition - Earnout obligation (Note 3) | (31,300 | ) | 269,600 | |||||
| Business acquisition - Rollover equity (Note 3) | - | 47,000 | ||||||
| Business acquisition - Replacement awards (Note 3) | - | 3,533 | ||||||
| Issuance of warrants (Note 9) | - | 1,350 | ||||||
| Operating lease right-of-use assets obtained in exchange for operating lease liabilities | 1,534 | 4,254 | ||||||
| Accretion of redeemable preferred units | - | 134,864 | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
7
REDL Intermediate Holdings, LLC and Subsidiaries
Notes to Consolidated Financial Statements
As of and For the Years Ended December 31, 2025 and 2024
| 1. | Business Description |
AE Industrial Partners Fund III, LP (“AE”), a private equity fund affiliated with AE Industrial Partners, LP, a private equity firm focused on aerospace, defense, and government services, formed REDL Intermediate Holdings I, LLC (“Holdings I”) and REDL Ultimate Holdings, LP (the “Parent”) on December 21, 2022, to facilitate the acquisition of REDLattice, Inc., which owns a 100% equity interest in the operating entities (“REDLattice operating entities”). In connection with the Paragon acquisition and related internal reorganization, the Parent formed REDL Intermediate Holdings, LLC (“the Company”) on October 7, 2024, as a Delaware limited liability company. The Parent contributed its ownership interest in Holdings I to the Company in exchange for equity interests of the Company (the “Reorganization”). As a result of the Reorganization, the Company became the direct parent company of Holdings I. The reorganization transactions were treated as a combination of entities under common control as if the entities were combined at the beginning of the earliest period presented, with assets and liabilities transferred at their carrying amounts in a manner similar to a pooling of interests.
The Company’s headquarters are in Chantilly, Virginia. The Company is a mission-focused provider of technology and service solutions for non-kinetic effects primarily serving government customers. The Company delivers advanced cybersecurity and technology solutions to support mission-critical operations for customers in the U.S. and global national security, defense, intelligence and law enforcement communities. The Company’s offerings include proprietary products, advanced cyber tools and engineering services, with core capabilities in AI-assisted vulnerability research, reverse engineering, malware analysis, intelligence collection and offensive cyber operations. These solutions support the full lifecycle of cyber and intelligence operations, from data access and collection to analysis and operational deployment.
| 2. | Summary of Significant Accounting Policies |
Basis of Presentation and Consolidation
The accompanying consolidated financial statements are presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
In the notes to the consolidated financial statements, all dollar amounts in tables are in thousands of dollars unless otherwise indicated. Certain columns and rows in the consolidated financial statements and notes thereto may not add due to the use of rounded numbers.
Liquidity
[Placeholder for liquidity disclosure]
Use of Estimates
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, assumptions and judgements in certain circumstances that affect the reported amounts of assets, liabilities and contingencies as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates under different assumptions or conditions. The most significant of these estimates relate to the fair value of acquired assets and liabilities through business combinations, contingent liabilities related to earnout payments, warrants, equity compensation awards, incremental borrowing rate used in the measurement of lease liabilities, income taxes, costs to be incurred for certain Firm-Fixed-Price revenue arrangements, recoverability of long-lived assets and goodwill, and estimated standalone selling price of performance obligations for certain revenue arrangements. Estimates are based on past experience and other factors, including expectations of future events that we believe are reasonable under the circumstances. Actual results may differ from these estimates.
8
Cash, Cash Equivalents and Restricted Cash
The Company maintains cash, cash equivalents, and restricted cash in bank deposit accounts which at times may exceed the United States Federal Deposit Insurance Corporation (“FDIC”) coverage of $0.3 million per depositor. Restricted cash is required pursuant to the terms of certain lease arrangements. The Company considers all highly liquid instruments with a maturity of three months or less at the date of purchase to be cash equivalents.
Foreign Currency
The reporting and functional currency of the Company and all its subsidiaries is the U.S. dollar (“USD”). Transactions denominated in currencies other than the U.S. dollar are recorded at the exchange rate in effect at the date of the transaction. Gains and losses resulting from settlement and remeasurement of the foreign currency transactions into functional currency are included under Foreign currency loss in the Consolidated Statements of Operations.
Warrants
The Company evaluates warrants issued in connection with financing transactions to determine whether such instruments should be classified as liabilities or equity. Warrants are assessed under the applicable guidance in Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity, and ASC 815-40, Contracts in an Entity’s Own Equity. The warrants do not meet the requirements for equity classification and are recorded as liabilities at fair value on the issuance date and are subsequently remeasured to fair value at each reporting date, with changes in fair value recognized in the earnings.
Accounts Receivable
The Company generally records a receivable when revenue is recognized as the timing of revenue recognition may differ from the timing of payment from customers. Payment terms and conditions vary by contract, although terms generally include a requirement of payment within 0 to 90 days. The Company’s accounts receivable do not bear interest, and they are recorded at the invoiced amount less an allowance for any potentially uncollectable accounts under the current expected credit loss (“CECL”) impairment model (ASC Topic 326, Financial Instruments — Credit Losses). The Company presents the net amount of the financial instrument expected to be collected. The Company separately presents Contract assets (those with conditional rights to consideration based on anything other than the passage of time) from its Accounts receivable (those with unconditional rights to consideration) in Note 13.
The CECL impairment model requires an estimate of expected credit losses, measured over the contractual life of an instrument, which considers forecasts of future economic conditions in addition to information about past events and current conditions. Based on this model, the Company considers many factors, including the age of the balance, collection history, and current economic trends. Bad debts are written off after all collection efforts have ceased. Allowances for credit losses are recorded as a direct reduction from an asset’s amortized cost basis. Credit losses and recoveries are recorded in Selling, general and administrative in the Consolidated Statements of Operations. Recoveries of financial assets previously written off, if any, are recorded when received. As of December 31, 2025 and 2024, there was no allowance for credit losses, as its customer base consists primarily of government agencies and management does not expect material credit losses.
9
Concentration of Credit Risk
Financial instruments which potentially subject the Company to concentrations of credit risk consist primarily of Cash and cash equivalents, Contract assets and Accounts receivable. The Company’s cash is primarily held with major banks and financial institutions throughout the world. At times, cash balances may be in excess of the amount insured.
Refer to Note 13 for concentration of credit risk for Contract assets and Accounts receivable.
Property and Equipment, Net
Property and equipment is recorded at cost, except in the case of an acquisition of a business when it is recorded at fair value. Property and equipment is presented net of accumulated depreciation on the Consolidated Balance Sheets. Depreciation is calculated using the straight-line method over the following estimated useful lives:
| Asset Classification | Useful Life | |
| Computer equipment and software | 3–7 years | |
| Leasehold improvements | Term of the related lease or the life of the asset, whichever is shorter | |
| Office furniture and equipment | 3–14 years |
Betterments, renewals, and extraordinary repairs that extend the life of an asset are capitalized. Expenditures for repairs and maintenance are expensed as incurred and recorded within Selling, general and administrative in the Consolidated Statements of Operations.
When assets are retired or otherwise disposed of, the cost and related accumulated depreciation and amortization are removed from the consolidated balance sheet and the resulting gain or loss is reflected in profit or loss.
Intangible Assets, Net
Intangible assets consist of assets acquired as part of business combinations and purchased in the course of normal business operations of the Company.
Intangible assets with definite useful lives are amortized as the Company consumes economic benefit over the estimated useful lives of the intangible assets. As of December 31, 2025 and 2024, intangible assets included in the Consolidated Balance Sheets are as follows:
| Asset Classification | Useful Life | |
| Technology | 5 years | |
| Customer relationships | 20 years | |
| Trade name | 5 years |
The Company has no intangible assets with indefinite lives.
Long-Lived Asset Impairment
In accordance with ASC Topic 360 Accounting for Impairment or Disposal of Long-Lived Assets (“ASC Topic 360”), long-lived assets (e.g., Property and equipment, Intangible assets, and Right-of-use assets) are reviewed for impairment, whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. An estimate of the related undiscounted cash flows over the remaining life of the long-lived asset is utilized in assessing whether an asset has been impaired with an impairment measured based upon the amount by which the carrying amount of the asset exceeds the fair value.
10
Leases
The Company is a lessee and recognizes its leases in accordance with ASU 2016-02, Leases (Topic 842). The Company determines if an arrangement is a lease at inception. Leases are classified at lease commencement as either operating or finance leases. The Company uses leases to obtain the use of office space and has determined all of its leases are operating in nature. Leases are recorded in Right-of-use assets, net and Lease liabilities (current and noncurrent) on the Consolidated Balance Sheets.
Operating lease liabilities are calculated as the present value of the future minimum lease payments as of the commencement date. Since most lease agreements do not provide an implicit rate, the Company uses its IBR as of the commencement date in estimating the present value of future payments. The IBR is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. The IBR is determined considering macro-economic factors such as the specific interest rate curve based on the relevant term, as well as specific factors contributing to the Company’s credit spread. Lease terms, for the purpose of determining each lease’s present value, include options to extend or terminate the lease if it is reasonably certain that the Company will exercise that option. The Company has lease agreements with lease and non-lease components but has elected not to separate non-lease components of a contract from the lease component to which they relate. Operating lease costs are recognized on a straight-line basis over the expected lease term and included in Selling, general and administrative expense on the Consolidated Statements of Operations.
Short-term leases less than twelve months in length are not included in the determination of lease liabilities. Lease payments for short-term leases are recognized on a straight-line basis over the lease term and are included in Selling, general and administrative expense on the Consolidated Statements of Operations.
Operating right-of-use assets are initially measured based on the initial amount of the lease liability, adjusted for lease payments made at or before commencement, lease incentives received, and qualifying initial direct costs. Right-of-use assets are evaluated for impairment periodically whenever events or changes in circumstances indicate that related carrying amounts may not be recoverable from undiscounted cash flows.
Deferred Revenue
The Company structures its contracts with a mix of upfront and periodic billing (e.g., product revenue billed at inception, maintenance billed in advance or overtime, and services billed as performed). Contract liabilities (Deferred revenue) arise when the Company bills or receives payment before transferring goods or services. This is common for advance billing for maintenance, which is recognized as revenue as the related performance obligations are satisfied (e.g., straight-line over the support term).
Contract liabilities are recorded as Deferred revenue, current and Deferred revenue, non-current in the Consolidated Balance Sheets and recognized as revenue as the Company satisfies the underlying performance obligation.
Fair Value Measurements
Fair value is the price that would be received if an asset were sold or the price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants at the measurement date.
ASC 820, Fair Value Measurements, establishes a framework for measuring fair value. That framework specifies a fair value hierarchy that prioritizes the inputs used in valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions.
11
Certain of the Company’s accounting policies and disclosures require fair value measurements, for both financial and non-financial assets and liabilities, including:
| (a) | Warrant liability |
| (b) | Acquisition of a business |
| (c) | Rollover equity |
| (d) | Earnout Obligation |
When measuring the fair value of an asset or a liability, the Company maximizes use of relevant observable inputs and minimizes use of unobservable inputs. Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows.
| Level 1 | Quoted prices for identical instruments in active markets; |
| Level 2 | Inputs other than Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability; and |
| Level 3 | Unobservable inputs for the asset or liability used to measure fair value that are supported by little or no market activity and that are significant to the fair value of the asset or liability at measurement date. |
If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.
Cash and cash equivalents, Restricted cash, Accounts receivable, Contract assets, Accounts payable, and Accrued expenses are reflected on the Consolidated Balance Sheets at amounts that approximate fair value because of the short-term nature of these financial assets and liabilities.
Equity Participation Plans
The Company’s equity participation plans (Note 11) are accounted for in accordance with ASC Topic 718, Compensation – Stock Compensation (“ASC Topic 718”). The Company’s awards are classified as equity awards, therefore the grant date fair value is amortized ratably over the applicable vesting period as equity-based compensation expense within Selling, general and administrative, Product and maintenance cost and Service cost in the consolidated financial statements. Forfeitures are recognized as they occur.
Revenue Recognition
The Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC Topic 606”), when control of the promised goods or services is transferred to the Company’s customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. For payment terms of one year or less, as a practical expedient, the Company does not adjust the transaction price for the effects of financing. The Company presents revenues net of sales taxes collected.
12
In determining how revenue should be recognized, the Company follows a five-step process:
| ● | identification of the contract, or contracts, with a customer; |
| ● | identification of the performance obligations in the contract; |
| ● | determination of the transaction price; |
| ● | allocation of the transaction price to the performance obligations in the contract; and |
| ● | recognition of revenue when, or as, the Company satisfies a performance obligation. |
The Company generates revenue from Product, Maintenance and Services as described below:
Product
Product revenue represents the sale of the Company’s intellectual property to customers. Product revenue includes term-based (typically one year) and perpetual licenses sold to customers. These licenses provide customers with a right to use the product that has significant standalone functionality and is capable of performing designated functions independently. Accordingly, management has determined that such licenses represent functional intellectual property.
Revenue from licenses that provide customers with a right to use the Company’s functional intellectual property is generally recognized at a point in time when control of the license transfers to the customer and the customer is able to use and benefit from the license. For certain arrangements containing termination-for-convenience provisions, the Company evaluates the enforceable rights and obligations of the parties in determining the contract term and the resulting timing of revenue recognition.
The Company sells its licenses to its customers directly, or indirectly through distribution channels. The Company sells third-party products to customers for which the Company acts as a reseller. The Company has determined that it is the principal in these transactions and therefore recognizes revenue on a gross basis, as the Company is primarily responsible for fulfillment and obtains control of the product before transferring it to the customer.
Maintenance
Maintenance revenue consists of maintenance services provided in connection with the Company’s product. These services represent a distinct stand-ready performance obligation and primarily include technical support, as well as unspecified product updates, upgrades, vulnerability enhancements, and remediation activities provided throughout the contractual support period. Revenue from maintenance is recognized ratably over the contractual support period as the services are provided.
Services
Services revenue primarily consists of consulting and professional services, training services, installation and implementation activities. Consulting and professional services include deployment, configuration, customization, cyber operations support, and other services provided under customer contracts that are dependent on the Company’s personnel, expertise, and knowledge. For consulting services, the Company is usually paid a fixed amount over the period of the contract (“Firm-Fixed-Price”) or paid an amount per hour as specified in the contract (“Time and Material”). Revenue from these service performance obligations is recognized over time because the customer simultaneously receives and consumes the benefits provided by the Company as the services are performed.
For Firm Fixed Price contracts, revenue is recognized over time using a cost-to-cost input method based on cost incurred to date relative to total estimated costs-at-completion. The Company believes this method faithfully depicts its performance because costs incurred generally correspond with the transfer of services to the customer. For Time and Materials contracts, in which the Company’s right to consideration corresponds directly with the value to the customer of the Company’s performance completed to date, the Company applies the right-to-invoice practical expedient and recognizes revenue in the amount it has a right to invoice.
13
Significant Judgments
The Company applies significant judgment in the application of ASC Topic 606, particularly in identifying performance obligations, determining the transaction price, assessing the timing of revenue recognition, evaluating principal versus agent considerations, and allocating transaction consideration among performance obligations.
Identification of Performance Obligations
The Company applies judgment in determining whether promised goods and services are distinct and therefore should be accounted for as separate performance obligations. Certain arrangements include combinations of Product, maintenance, and Services. The Company evaluates whether each promised good or service is capable of being distinct and separately identifiable within the context of the contract.
Transaction Price Determination
The Company applies judgment in determining the transaction price for customer contracts, including the evaluation of fixed and variable consideration and the assessment of whether a significant financing component exists. Certain contracts may include variable consideration, such as incentive payments. The Company estimates variable consideration using the expected value or most likely amount method, as appropriate, and includes such amounts in the transaction price only to the extent that it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty is subsequently resolved. Variable consideration related to incentive payments is typically constrained until earned.
Allocation of Transaction Price
The Company applies judgment in determining standalone selling prices (“SSP”) for performance obligations when observable standalone sales are not available. For certain Product and maintenance arrangements, SSP is estimated using observable renewal pricing, historical pricing, and other information available to the Company.
Timing of Revenue Recognition
The Company exercises judgment in determining whether performance obligations are satisfied at a point in time or over time. For Product revenue, the Company evaluates the nature of the underlying intellectual property to determine whether revenue should be recognized upon transfer of control or over the period in which customers receive access to the intellectual property. Certain contracts contain termination-for-convenience provisions, and the Company evaluates to determine the period over which enforceable rights and obligations exist, including consideration of termination penalties, notice requirements, and termination effectiveness. For fixed-price arrangements recognized over time, the Company applies judgment in selecting an appropriate measure of progress and assessing whether the selected method faithfully depicts the transfer of services to the customer.
14
Principal vs. Agent Considerations
The Company sells certain third-party products to customers and applies judgment in determining whether it acts as a principal or an agent in such arrangements. In making this determination, the Company evaluates whether it obtains control of the underlying product or service before transfer to the customer, including consideration of primary responsibility for fulfillment, inventory risk, and discretion in establishing pricing. Where the Company concludes it controls the product or service before transfer, revenue is recognized on a gross basis.
Cost of Revenue
Product and Maintenance Cost
Cost of revenues consists primarily of subcontractor costs and labor costs, which include salaries, bonuses, and benefits directly attributable to fulfilling the Company’s obligations under customer contracts, as well as costs associated with third-party products purchased for resale. Costs associated with Product revenue and maintenance are presented as a combined category because the same personnel and resources are utilized to support both the delivery of Product and maintenance and the related costs are not separately tracked or managed.
Services Cost
Cost of revenues consists primarily of subcontractor costs and labor costs, which include salaries, bonuses, and benefits directly attributable to fulfilling the Company’s obligations under customer contracts.
Selling, General, and Administrative Expenses
Selling, general and administrative expenses consist of employee-related expenses for personnel in the Company’s executive, finance and accounting, facilities, legal, human resources, and information technology and information security functions, as well as other administrative employees. In addition, selling, general and administrative expenses include fees for legal, accounting, tax and audit services, software subscriptions, facilities, sales commissions, other corporate costs, and marketing and advertising.
Advertising Costs
The Company expenses advertising costs as incurred. The Company incurred immaterial advertising costs for the years ended December 31, 2025 and 2024, which are included in Selling, general and administrative in the Consolidated Statements of Operations.
Research and Development
Research and development expenses are primarily comprised of costs of the Company’s research and development personnel and other development related expenses. Research and development costs are expensed as incurred.
Loss per Unit
The Company computes basic and diluted loss per unit in accordance with ASC Topic 260, Earnings Per Share using the two-class method when participating securities are outstanding. Under the two-class method, earnings are allocated among common units and participating securities based on their respective rights to receive distributions and participate in undistributed earnings. Net losses are not allocated to participating securities that do not have a contractual obligation to share in the Company’s losses.
15
Basic loss per unit is determined by dividing net loss attributable to members by the weighted-average number of units outstanding during the period. Net loss available to common unitholders includes adjustments to the carrying amount of redeemable preferred units that are treated in a manner similar to dividends for purposes of determining income or loss available to common unitholders.
Diluted loss per unit reflects potential dilution and is computed by dividing net loss by the weighted average number of units outstanding during the period increased by the numbers of additional units that would have been outstanding if all potential units had been issued and were dilutive. However, potentially dilutive securities are excluded from the computation of diluted loss per unit to the extent that their effect is anti-dilutive.
Business Combination
The Company accounts for business combinations in accordance with ASC Topic 805, Business Combinations (“ASC Topic 805”). Business combinations are recorded using the acquisition method, whereby the consideration transferred is measured at fair value as of the acquisition date.
The Company allocates the consideration transferred to the identifiable assets acquired and liabilities assumed based on their estimated fair values at the acquisition date. Identifiable intangible assets acquired in a business combination are recognized separately from goodwill if they arise from contractual or legal rights or are separable. In determining the fair value of acquired intangible assets, the Company uses the multi-period excess earnings method to value customer relationships and the relief-from-royalty method to developed technology. The determination of the fair value of identifiable intangible assets involves the use of significant estimates and assumptions, including discount rates, obsolescence rates, revenue growth rates, projected margins, royalty rates, and customer attrition rates.
The excess of the purchase consideration over the estimated fair value of the identifiable net assets acquired is recorded as goodwill. Goodwill represents the expected synergies, assembled workforce, and other economic benefits arising from the acquisition that do not qualify for separate recognition. Goodwill is not amortized and is tested for impairment at the reporting-unit level annually as of November 1, or more frequently if events or changes in circumstances indicate that it may be impaired. The Company may first perform a qualitative assessment to determine whether a quantitative impairment test is necessary.
Contingent consideration is measured at fair value on the acquisition date and classified as either a liability or equity based on the terms of the arrangement and applicable U.S. GAAP. The Company may use valuation techniques incorporating significant unobservable inputs, including probability-weighted methods or Monte Carlo simulation techniques. Liability-classified contingent consideration is remeasured at fair value each reporting period, with changes in fair value recognized in earnings and is included in the Consolidated statement of operations under Change in fair value of earnout obligation. Contingent consideration associated with the Paragon acquisition (the “Earnout Obligation”) is presented within Earnout obligation in the Consolidated Balance Sheets.
Transaction costs associated with business combinations are expensed as incurred.
The Company uses significant judgment in estimating the fair values of assets acquired and liabilities assumed, including the selection of valuation methodologies and key assumptions. These estimates are primarily based on Level 3 inputs.
16
Income Taxes
The Company accounts for income taxes using the asset and liability approach in accordance with ASC Topic 740, Income Taxes (“ASC Topic 740”). Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on the deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company records valuation allowances against deferred tax assets as deemed necessary.
The Company accounts for the uncertainty in income taxes as prescribed by the minimum probability threshold that a tax position must meet before a financial statement benefit is recognized. The minimum threshold is defined as a tax position that is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit to be recognized is measured as the largest amount of benefit that is greater than likely of being realized upon ultimate settlement.
The Tax Cuts and Jobs Act enacted on December 22, 2017 subjects a United States shareholder to tax on its Global Intangible Low-Taxed Income (“GILTI”) earned by certain of their foreign subsidiaries. The Financial Accounting Standards Board issued guidance stating that an entity can make an accounting policy election to either recognize deferred taxes for temporary basis differences expected to reverse as GILTI in future years or to provide for the tax expense related to GILTI in the year the tax is incurred as a period expense. Management has elected to account for GILTI as a period expense for the years ended December 31, 2025, and 2024.
The Company recognizes interest and penalties accrued on any unrecognized tax exposures as a component of income tax expense. The Company does not have any amounts accrued relating to interest and penalties as of December 31, 2025, and 2024.
Recently issued accounting pronouncements
Accounting Pronouncements Adopted in 2025
Improvements to Income Tax Disclosures (“ASU 2023-09”)
ASU 2023-09 improves the transparency and decision-usefulness of income tax disclosures, particularly in the rate reconciliation table and disclosures about income taxes paid. The amendments from ASU 2023-09 are effective for annual periods beginning after December 15, 2024. The Company adopted the standard for the year ended December 31, 2025, on a prospective basis. Refer to Note 12 for additional information. The adoption of this ASU only impacted disclosures and did not have a material impact on the Company’s consolidated financial statements.
Improvements to Reportable Segments Disclosures (“ASU 2023-07”)
ASU 2023-07 introduces enhanced disclosures about significant segment expenses along with other enhanced segment disclosures. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company adopted the standard for the year ended December 31, 2024, retrospectively for all periods presented. Refer to Note 16 for additional information. The adoption of this ASU only impacted disclosures and did not have a material impact on the Company’s consolidated financial statements.
Stock Compensation Scope Application of Profit Interest and Similar Awards, effective for public companies for the fiscal year beginning after December 15, 2024 (“ASU 2024-01”)
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ASU 2024-01 improves the clarity and operability in the guidance by adding an illustrative example that includes four fact patterns to demonstrate how an entity should apply the scope guidance to determine whether a profits interest award should be accounted for in accordance with Topic 718. The illustrative example is intended to reduce (1) complexity in determining whether a profits interest award is subject to the guidance in Topic 718 and (2) existing diversity in practice. ASU 2024-01 is effective for fiscal years beginning after December 15, 2024, and interim periods within those fiscal years, with early adoption permitted. The Company adopted the standard for the year ended December 31, 2025, on a prospective basis. The adoption of this ASU did not have a material impact on its consolidated financial statements.
Accounting Pronouncements Issued But Not Yet Adopted in 2025
Income Statement – Reporting Comprehensive Income - Expense Disaggregation Disclosures (“ASU 2024-03”)
ASU 2024-03 introduces new requirements to disclose, in the notes to financial statements, more detailed information about certain costs and expenses, including employee compensation, depreciation, and intangible asset amortization included in each relevant expense caption. Additionally, the amendment requires a qualitative description of the amounts remaining in the relevant expense captions that are not separately disaggregated quantitatively, and to disclose the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. An entity may apply the amendments prospectively for reporting periods after the effective date or retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating the impact of adoption, which is expected to have an impact on disclosures only with no impact on the Company’s results.
Business Combinations and Consolidation: Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity (“ASU 2025-03”)
ASU 2025-03 amends the guidance for determining the accounting acquirer in certain transactions. The guidance should be applied prospectively. The amendments in this update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods, with early adoption permitted. The adoption of this guidance will affect acquisition transactions of variable interest entities that occur after the initial application date. The Company has elected to early adopt his guidance as of January 1, 2026. The adoption did not have an impact on our consolidated financial statements.
Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”)
ASU 2025-05 introduces a practical expedient that all entities can use when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC Topic 606, Revenue from Contracts with Customers. Under this practical expedient, an entity is allowed to assume that the current conditions it has applied in determining credit loss allowances for current accounts receivable and current contract assets remain unchanged for the remaining life of those assets. ASU 2025-05 is effective for fiscal years beginning after December 15, 2025, and interim reporting periods in those years. Entities that elect the practical expedient and, if applicable, make the accounting policy election are required to apply the amendments prospectively. The amendment is intended to simplify the application of the current expected credit loss model by reducing the need to develop forward-looking forecasts for short-term trade receivables and contract assets. The Company is currently evaluating the impact of ASU 2025-05 and does not expect adoption will have a material impact on its consolidated financial statements.
Intangibles - Goodwill and Other - Internal-Use Software (“ASU 2025-06”)
ASU 2025-06 introduces targeted Improvements to the accounting for Internal-Use Software which removes references to prescriptive and sequential development stages, requiring companies to capitalize internal-use software costs when management commits to funding the software project and it is probable the project will be completed. ASU 2025-06 is effective for annual and interim reporting periods beginning after December 15, 2027, and can be applied prospectively, modified prospectively, or retrospectively. The Company is currently evaluating the impact of ASU 2025-06 on the consolidated financial statements and related disclosures.
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| 3. | Business Combinations |
On December 13, 2024 (the “Acquisition Date”), the Company completed the acquisition of Paragon Solutions, Ltd. and its subsidiaries (“Paragon”) which develops and sells a cyber intelligence platform for governmental agencies that enable them to collect and analyze data which is crucial to maintain public safety. This acquisition was completed to expand the Company’s global reach and range of products and services offered. As a result of the acquisition, the Company owns 100% of Paragon.
The total fair value of the purchase consideration was $740.5 million. Consideration transferred consisted of $420.4 million cash consideration paid at closing, Parent Synthetic Interests to certain Paragon sellers as rollover consideration, with an acquisition-date fair value of $47.0 million (the “Rollover Equity”), the portion of the fair value of replacement share-based payment awards attributable to pre-combination service of $3.5 million and contingent consideration with an estimated fair value of $269.6 million related to an earnout tied to Paragon’s future performance (“Earnout Obligation”).
In connection with the issuance of the Rollover Equity, the Company issued a corresponding number of Class S Units to the Parent pursuant to the Company’s limited liability company agreement to mirror the economic rights associated with the Parent Synthetic Interests.
The acquisition was recorded as a business combination. The identifiable assets acquired and liabilities assumed were recognized and measured as of the Acquisition Date in accordance with ASC 805. Certain identifiable assets acquired, including developed technology and customer relationships, and certain elements of consideration transferred were measured at fair value using significant Level 3 inputs. The excess of the total purchase price over the fair value of assets acquired and liabilities assumed was allocated to goodwill.
The purchase price allocation was as follows (in thousands):
| Assets | ||||
| Cash and cash equivalents | $ | 30,689 | ||
| Restricted cash | 728 | |||
| Accounts receivable | 42,095 | |||
| Prepaid expenses and other assets | 2,743 | |||
| Property and equipment | 10,114 | |||
| Right-of-use assets | 10,303 | |||
| Customer relationships | 237,700 | |||
| Developed technology | 215,100 | |||
| Total assets acquired | 549,472 | |||
| Liabilities | ||||
| Accounts payable and accrued expenses | (5,679 | ) | ||
| Deferred revenue | (12,704 | ) | ||
| Deferred tax liability | (55,418 | ) | ||
| Other liabilities | (22,358 | ) | ||
| Operating lease liabilities | (10,159 | ) | ||
| Total liabilities assumed | (106,318 | ) | ||
| Fair value of net identifiable assets acquired | 443,154 | |||
| Goodwill | $ | 297,376 | ||
The goodwill from the acquisition consists largely of expected benefits, expanded solutions, geographical footprint, and the capabilities and expertise of the acquired workforce. Goodwill is not deductible for tax purposes. The entire value of goodwill was assigned to the Paragon reporting unit.
As part of the purchase price allocation, the Company determined the identifiable intangible assets to be Developed technology and Customer relationships.
Developed technology
The fair value of the Developed technology was estimated using a variation of the income approach known as the relief from royalty method. The discounted cash flows were based on management’s future projections of revenue, and the discount rate applied was benchmarked with reference to the applied rate of return from the transaction model and the weighted average cost of capital. Key assumptions used to value the Developed technology were (1) a pre-tax royalty rate of 40%, (2) a discount rate equal to 19%, (3) an obsolescence rate of 20%, and (4) management’s future projections of revenue. This nonrecurring fair value measurement is primarily determined using unobservable inputs. Accordingly, the fair value measurement of the Developed technology is classified within Level 3 of the fair value hierarchy.
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Customer Relationships
The fair value of the Customer relationships was estimated using a variation of the income approach known as the multi-period excess earnings method. The discounted cash flows were based on management’s future projections of revenue, and the discount rate applied was benchmarked with reference to the applied rate of return from the transaction model and the weighted average cost of capital. Key assumptions used to value the Customer relationships were (1) a discount rate equal to 20%, (2) an attrition rate of 5%, and (3) management’s future projections of revenue. This nonrecurring fair value measurement is primarily determined using unobservable inputs. Accordingly, the fair value measurement of the Customer relationships is classified within Level 3 of the fair value hierarchy.
Rollover Equity
As part of the consideration transferred in the Paragon acquisition, the Parent issued Synthetic Interests to certain Paragon sellers with an acquisition-date fair value of $47.0 million (the “Rollover Equity”). The Synthetic Interests do not represent legal ownership interests or voting rights in the Parent but are designed to provide economic participation substantially similar to the Parent’s Class A Units.
Pursuant to the Company’s limited liability company agreement, upon the issuance of Synthetic Interests by the Parent, the Company issues an equivalent number of corresponding Class S Units to the Parent. Accordingly, in connection with the Rollover Equity issued to the Paragon sellers, the Company issued corresponding Class S Units to the Parent on a one-for-one basis. The Class S Units are legal equity interests in the Company and are designed to mirror the economic rights associated with the corresponding Parent Synthetic Interests.
The fair value of the Rollover Equity issued was determined using Option Pricing Method. Key significant Level 3 inputs not observable in the market include (1) a term of 5 years, (2) an equity value of $353.9 million, (3) expected equity volatility of 65%, and (4) a risk-free interest rate of 4.2%.
Earnout Obligation
The Company recorded contingent consideration of $269.6 million resulting from an earnout arrangement. This requires additional consideration to be paid by the Company to Paragon sellers based on gross profit targets during 2025 and EBITDA targets during 2024. The undiscounted estimated amounts for the various outcomes ranged from $0 to $375.0 million. The fair value of the earnout on the Acquisition Date was estimated using a Monte Carlo Simulation. The Earnout Obligation is based on significant Level 3 inputs not observable in the market.
Key significant Level 3 inputs not observable in the market include the earnout payment discount rate, weighted average cost of capital, Risk-free interest rate, asset volatility, revenue discount rate, and expected revenue volatility.
The significant unobservable inputs used in measuring the fair value of the Earnout Obligation were as follows:
| Assumption | December 31,
2024 | |||
| Earnout payment discount rate | 6.5 | % | ||
| Weighted average cost of capital | 16.4 | % | ||
| Risk-free interest rate | 4.2 | % | ||
| Asset volatility | 50.0 | % | ||
| Revenue discount rate | 11.5 | % | ||
| Expected revenue volatility | 29.0 | % | ||
As the Earnout Obligation is based on financial metrics of Paragon for 2025 and 2024, management estimated the fair value of the Earnout Obligation as of December 31, 2025 to be $238.3 million, inclusive of third-party fees to be paid to an advisor who advised Paragon. The change in the Earnout Obligation during 2025 was driven by the actual results achieved by Paragon during 2025. The associated gain of $31.3 million recognized on the change in the fair value of the Earnout Obligation was recognized in Change in earnout obligation fair value in the Consolidated Statements of Operations.
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The Company could settle the Earnout Obligation by paying the earnout recipients 50% of the Earnout Obligation in cash, subject to certain adjustments that allow the cash portion of the Earnout Obligation to be reduced (and Synthetic Interests in the Parent and options in the Company portion to be increased) by $20.0 million at the option of the Parent in accordance with the Share Purchase Agreement dated October 10, 2024, which was later reduced to $15.0 million in a side letter, dated July 2, 2025, to the Share Purchase Agreement. The remainder of the Earnout Obligation not paid in cash will be settled in Synthetic Interests in the Parent and options in the Company.
Other
The Paragon acquisition was financed through borrowings and equity contributions from AE and certain co-investors. The consideration transferred also included Rollover Equity issued to certain Paragon sellers.
Results of operations of Paragon are included in the consolidated financial statements of the Company from the Acquisition Date.
The Company recognized transaction expenses of $28.7 million during the year ended December 31, 2024. These costs primarily consisted of legal, advisory, accounting, and other professional fees incurred in connection with evaluating, negotiating, and completing the acquisition. Of these costs, $13.7 million was recognized within Transaction costs and $15.0 million was recognized within Transaction costs, related party in the Consolidated Statements of Operations. In accordance with ASC 805, these costs were expensed as incurred and were not included in the consideration transferred for the acquisition.
The following table presents the revenue and net income of the Paragon acquisition on the Company’s Consolidated Statements of Operations for the year ended December 31, 2024 (in thousands):
| 2024 | ||||
| Revenue | $ | 27,941 | ||
| Net income | $ | 20,308 | ||
Supplemental Pro Forma Information (Unaudited)
Supplemental information of unaudited pro forma operating results assuming the Paragon acquisition had been consummated as of January 1, 2023 is as follows (in thousands):
| 2024 | ||||
| (unaudited) | ||||
| Pro forma revenue | $ | 210,148 | ||
| Pro forma net income | $ | 23,339 | ||
The unaudited pro forma supplemental information has been prepared using estimates and assumptions that the Company believes are reasonable and reflects the impact of the acquisition as if it had occurred at the beginning of the earliest period presented. The pro forma information includes adjustments for additional amortization related to the fair value of acquired intangible assets and for the impact of transaction-related costs, including legal, advisory and due diligence fees. The unaudited pro forma information is presented for comparative purposes only and is not necessarily indicative of the results of operations that would have been achieved had the acquisition been completed on the dates indicated, nor does it purport to project the Company’s future results of operations.
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| 4. | Property and Equipment, Net |
Property and equipment, net consisted of the following as of December 31:
| (in thousands) | 2025 | 2024 | ||||||
| Computer equipment and software | $ | 16,740 | $ | 9,697 | ||||
| Leasehold improvements | 7,412 | 3,045 | ||||||
| Office furniture and equipment | 4,420 | 3,929 | ||||||
| Property and equipment, gross | 28,572 | 16,671 | ||||||
| Accumulated depreciation | (11,492 | ) | (5,934 | ) | ||||
| Property and equipment, net | $ | 17,080 | $ | 10,737 | ||||
Depreciation expense from property and equipment for the years ended December 31, 2025, and 2024 was $5.8 million and $0.4 million, respectively.
The Company did not identify any indicators of impairment of property and equipment during the years ended December 31, 2025, and 2024. Accordingly, no impairment losses were recognized.
| 5. | Goodwill |
The following table summarizes the changes in the carrying value of goodwill by segment:
| (in thousands) | REDLattice | Paragon | Total | |||||||||
| Balance as of December 31, 2023 | $ | 56,309 | $ | - | $ | 56,309 | ||||||
| Acquisition | - | 297,376 | 297,376 | |||||||||
| Balance as of December 31, 2024 | $ | 56,309 | $ | 297,376 | $ | 353,685 | ||||||
| Balance as of December 31, 2025 | $ | 56,309 | $ | 297,376 | $ | 353,685 | ||||||
The Company completed its annual goodwill impairment assessment as of November 1, 2025 and no impairment was identified.
| 6. | Intangible Assets, Net |
The intangible assets gross carrying amount and accumulated amortization as of December 31, 2025 and 2024 are detailed below (in thousands).
| December 31, 2025 | December 31, 2024 | |||||||||||||||||||||||||
| Useful Life | Gross carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||||||||||||
| Technology | 5 years | $ | 221,800 | $ | (49,073 | ) | $ | 172,727 | $ | 221,800 | $ | (4,713 | ) | $ | 217,087 | |||||||||||
| Customer relationships | 20 years | 267,600 | (16,858 | ) | 250,742 | 267,600 | (3,478 | ) | 264,122 | |||||||||||||||||
| Trade name | 5 years | 1,200 | (704 | ) | 496 | 1,200 | (464 | ) | 736 | |||||||||||||||||
| Total | $ | 490,600 | $ | (66,635 | ) | $ | 423,965 | $ | 490,600 | $ | (8,655 | ) | $ | 481,945 | ||||||||||||
Intangible asset amortization expense for the years ended December 31, 2025, and 2024 was $58.0 million and $5.8 million, respectively.
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Estimated future amortization expense of finite-lived intangible assets is presented below as of December 31, 2025 (in thousands):
| Year Ended December 31, | Amortization expense | |||
| 2026 | $ | 57,980 | ||
| 2027 | 57,980 | |||
| 2028 | 56,504 | |||
| 2029 | 54,278 | |||
| 2030 | 13,380 | |||
| Thereafter | 183,843 | |||
| Total future amortization expense on intangible assets | $ | 423,965 | ||
The Company did not identify any indicators of impairment of finite lived intangible assets during the years ended December 31, 2025, and 2024. Accordingly, no impairment losses were recognized.
| 7. | Leases |
The Company leases its office space under non-cancelable operating leases. The Company does not have any finance leases. Payments due under the lease contracts include fixed payments plus, for many of the Company’s leases, variable payments. In addition to base rent, the leases generally require additional payments to cover common area maintenance charges incurred and to pass along increases in real estate taxes.
Most leases include one or more options to renew, with renewal terms that can extend the lease term from 2.5 to 12 years. The leases expire at various times through 2032, and certain leases may be extended at the Company’s option. Escalation terms on leases generally include fixed rent escalations. Certain leases also include options to terminate the lease early. As of December 31, 2025, leases have remaining terms of less than 1 year up to 7 years. The Company’s leases do not contain any material restrictive covenants.
The following table presents lease expense recognized during the years ended December 31, 2025, and 2024, respectively:
| (in thousands) | 2025 | 2024 | ||||||
| Operating lease expense | $ | 6,619 | $ | 1,171 | ||||
| Variable lease expense | 201 | 8 | ||||||
| Short-term lease expense (other) | 593 | 32 | ||||||
| Total lease expense | $ | 7,413 | $ | 1,211 | ||||
Total lease costs are included in Selling, general and administrative expenses in the Consolidated Statements of Operations.
Supplemental balance sheet information related to operating leases is as follows:
| 2025 | 2024 | |||||||
| Weighted average remaining lease term (in years) | 4.1 | 5.4 | ||||||
| Weighted average IBR | 11.47 | % | 11.46 | % | ||||
As of December 31, 2025, the Company has no additional operating leases that have not yet commenced.
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Minimum lease payments for the Company’s ROU assets over the remaining lease periods as of December 31, 2025, are as follows (in thousands):
| Fiscal Years Ending December 31, | ||||
| 2026 | $ | 5,702 | ||
| 2027 | 4,318 | |||
| 2028 | 4,180 | |||
| 2029 | 2,754 | |||
| 2030 | 910 | |||
| Thereafter | 1,413 | |||
| Total lease payments | 19,277 | |||
| Less: imputed interest | (3,991 | ) | ||
| Operating lease, net | $ | 15,286 | ||
| Less: Operating lease, current | (7,106 | ) | ||
| Operating lease, noncurrent | $ | 8,180 | ||
| 8. | Other Current Liabilities |
Other current liabilities consisted of the following as of December 31:
| (in thousands) | 2025 | 2024 | ||||||
| Employees and related accrued expenses | $ | 6,565 | $ | 7,235 | ||||
| Income tax withholdings | 2,265 | 1,433 | ||||||
| Other current liabilities | 1,230 | 327 | ||||||
| $ | 10,060 | $ | 8,995 | |||||
| 9. | Debt, Net |
Debt consisted of the following as of December 31:
| (in thousands) | 2025 | 2024 | ||||||
| Credit Facility | $ | 218,500 | $ | 230,000 | ||||
| Revolver | 10,000 | – | ||||||
| Goldman Credit Agreement | 12,552 | – | ||||||
| Debt, gross | 241,052 | 230,000 | ||||||
| Unamortized debt issuance costs | (9,244 | ) | (9,299 | ) | ||||
| Debt, net | 231,808 | 220,701 | ||||||
| Less: Long-term debt, net current | (24,052 | ) | (9,635 | ) | ||||
| Long-term debt, net of current portion | $ | 207,756 | $ | 211,066 | ||||
Scheduled future minimum principal payments on debt are as follows (in thousands):
| Years Ended December 31, | ||||
| 2026 | $ | 24,052 | ||
| 2027 | 11,500 | |||
| 2028 | 11,500 | |||
| 2029 | 194,000 | |||
| Total | $ | 241,052 | ||
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Credit Facility
During December 2024, REDL Holdings, LLC, a wholly owned subsidiary of the Company executed a financing agreement (“Credit Facility”) with Cyber Lending Vehicle LLC (“Lender”). The Credit Facility is guaranteed by certain affiliated entities, including REDL Intermediate Holdings, LLC. The Credit Facility consists of a $230.0 million term loan facility (“Term Loan”) and a revolver of up to $15.0 million (“Revolver”). Upon closing of the Credit Facility, the Company received net proceeds of $222.1 million from the Term Loan, which is net of total lender and third-party lending fees of $7.9 million. An additional $0.8 million of lending fees were paid in cash at settlement. The Credit Facility bears interest at a rate either equal to the Secured Overnight Financing Rate (“SOFR”) plus a range of 650 basis points to 725 basis points or equal to the Reference Rate plus a range of 550 basis points to 625 basis points. The range of additional basis points is dependent on the Company’s calculated leverage ratio, as defined within the Credit Facility. The Reference Rate is the greatest of: (a) 3%, (b) the Federal Funds Rate plus 0.5%, (c) Adjusted 1-month SOFR plus 1% or (d) the Prime Rate, which is defined as the rate last quoted by The Wall Street Journal, or if unavailable, the highest per annum interest rate published by the Federal Reserve Board in their Statistical Release H.15 as the “bank prime loan” rate or any similar release by the Federal Reserve Board.
Principal payments on the Credit Facility are required each quarter through the maturity date in December 2029. Prepayments are permitted subject to certain conditions as defined in the Credit Facility. The Credit Facility contains an excess cash flow provision that requires accelerated payment of outstanding borrowings if excess cash flows, as defined in the Credit Facility, exceed certain levels beginning for the year ending December 31, 2025. The excess cash flow provision was not triggered for the year ending December 31, 2025. The Credit Facility also calls for mandatory prepayments if certain conditions are met related to dispositions, debt issuance, extraordinary receipts, permitted cure equity, and excess net cash proceeds from casualty insurance proceeds, as defined in the Credit Facility.
The Credit Facility matures in December 2029, at which time all remaining outstanding principal and interest is required to be repaid.
The Company is a holding company and depends on distributions from its subsidiaries to fund its obligations. Pursuant to the Company’s Credit Facility and related agreements, certain restrictions limit the ability of subsidiaries to transfer funds to the Company through dividends, loans, or advances. As of December 31, 2025, the restricted net assets of the Company’s consolidated subsidiaries that may not be transferred to the Company in the form of dividends, loans, or advances were approximately $[XX.X] million.
In conjunction with entering the Credit Facility, Parent issued 2,102,633 Class A warrants to the Lender. The warrants have an exercise price of $0.001 per unit and are exercisable into Class A Units of the Parent. Pursuant to the Company’s limited liability company agreement, the issuance of the Parent warrant resulted in the Company issuing to the Parent a corresponding warrant with substantially similar terms and conditions that is designed to mirror the economic rights of the Parent warrant. These warrants expire after 10 years, are exercisable at any time and automatically exercise upon an approved sale, public offering or subsidiary IPO. Unexercised warrants do not participate in distributions. The warrants contain anti-dilution provisions whereby the number of Class A Units issuable upon exercise is proportionally adjusted to maintain the warrant holder’s percentage ownership of Class A Units on a fully diluted basis in the event the Company issues additional Class A Units. Based on the terms of these adjustment provisions, the Company concluded that the warrants do not qualify for equity classification under ASC 815-40, Contracts in Entity’s Own Equity, and therefore accounts for the warrants as liabilities. Warrants were recorded at their issuance-date fair value and subsequent changes in the fair value are recorded in the Consolidated Statement of Operations in Changes in fair value of warrant liability.
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The following table presents the changes in the Company’s recurring Level 3 warrant liability (in thousands):
| Warrant Liability | ||||
| Balance at December 31, 2023 | $ | - | ||
| Issuance of warrants | 1,350 | |||
| Change in fair value recognized in earnings | - | |||
| Balance at December 31, 2024 | $ | 1,350 | ||
| Change in fair value recognized in earnings | 1,350 | |||
| Balance at December 31, 2025 | $ | 2,700 | ||
The fair value of Warrant liability was determined using an option pricing model. The key unobservable Level 3 inputs included are equity value, expected equity volatility, risk-free interest rate and term.
Key assumptions for the Warrant liability were as follows for the years ended December 31:
| Assumption | 2025 | 2024 | ||||||
| Equity value | 675,000 | 353,908 | ||||||
| Expected equity volatility | 65.0 | % | 65.0 | % | ||||
| Risk-free interest rate | 3.7 | % | 4.2 | % | ||||
| Expected term (years) | 4.2 | 5.0 | ||||||
As the warrants were issued to the Lender in conjunction with the Credit Facility, the warrants were determined to represent debt issuance cost. The issuance-date fair value of the warrants was recorded as a debt issuance cost associated with the Term Loan and amortized as interest over the term of the related debt. Subsequent changes in the fair value of the warrant liability are not adjustments to the debt issuance cost and are recognized separately in earnings. Amortization expense for the years ended December 31, 2025 and 2024 was $0.1 million and less than $0.1 million, respectively and was recorded within Interest expense in the Consolidated Statement of Operations.
Total interest expense for the Credit Facility for the years ended December 31, 2025, and 2024 was $29.6 million and $1.3 million, respectively. The effective interest rate on the Term Loan at December 31, 2025, and 2024 was 11.1% and 11.8%, respectively.
On January 6, 2025, the Company entered into Amendment No. 1 to the Credit Facility. This amendment refined terms and definitions within the Credit Facility. On June 14, 2025, the Company entered into Amendment No. 2 to the Credit Facility. This amendment adjusts minimum liquidity requirements to $20.0 million and increases this minimum liquidity requirement over 9 months to $30.0 million for the duration of the Credit Facility term. The Company incurred and paid an aggregate debt issuance costs of $1.0 million related to the amendments to the Credit Facility during 2025, consisting of $0.1 million in fees for Amendments No. 1 and No. 2 and a $0.9 million amendment fee for Amendment No. 3 which was entered into on December 31, 2025. This amendment required the Company’s investors to make a $3.0 million equity infusion on or before March 31, 2026, provide additional monthly reporting to the lender and further adjusted minimum liquidity requirements to $17.5 million as of December 31, 2025, $20.0 million from January 2026 through September 2026, and $25.0 million thereafter. The Company assessed Amendments No. 1, No. 2, and No. 3 in accordance with ASC 470-50 and determined these amendments to be debt modifications.
As of December 31, 2025, the Company breached its total debt ratio covenant under the Credit Facility. The Credit Facility includes financial covenants requiring the Company to maintain a maximum Total Leverage Ratio of 3.75 to 1.00 and minimum liquidity of $17.5 million. As of December 31, 2025, the Company was not in compliance with the leverage ratio covenant. The Company cured this break in covenants within the grace period specified in the credit agreement through an equity contribution received subsequent to year-end (see Note 19). This cure resulted in debt payments not being accelerated for the Credit Facility. Subsequent to year-end, on April 14, 2026, the Company entered into Amendment No. 4 to the Credit Facility and further adjusted minimum liquidity requirements to $15.0 million. AE and other investors made a capital contribution of $3.2 million in form Class V Units May 2026 (see Note 19). The Company incurred an amendment fee of $2.0 million in 2026, which has been recorded as additional deferred financing costs and is amortized over the remaining term of the Credit Facility.
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On July 1, 2025, the Company drew $10.0 million under its Revolver for which the repayment is due at the Credit Facility’s maturity on December 2029, subject to the mandatory prepayment provisions of the Credit Facility. Amounts outstanding on the Revolver as of December 31, 2025, and 2024 were $10.0 million and $0 million, respectively. The effective interest rate on the Revolver at December 31, 2025, was 11.1%. Accrued interest for the Credit Facility of $0.7 million and $1.3 million is recorded within Accrued expenses within the Consolidated Balance Sheets as of December 31, 2025, and 2024, respectively.
Debt issuance cost activity was as follows (in thousands):
| Balance at December 31, 2023 | $ | – | ||
| Additions | 9,386 | |||
| Amortization | (87 | ) | ||
| Balance at December 31, 2024 | 9,299 | |||
| Additions | 1,629 | |||
| Amortization | (1,684 | ) | ||
| Balance at December 31, 2025 | $ | 9,244 |
Estimated future debt issuance cost amortization is presented below (in thousands):
| Years Ended December 31, | ||||
| 2026 | $ | 2,164 | ||
| 2027 | 2,273 | |||
| 2028 | 2,404 | |||
| 2029 | 2,403 | |||
| $ | 9,244 | |||
Goldman Credit Agreement
The Company was party to an amended and restated credit agreement entered on September 10, 2024 (the “Goldman Credit Agreement”), for which Goldman Sachs Bank USA serves as an administrative agent. Although the Goldman Credit Agreement was entered into on September 10, 2024, no amounts were drawn under the facility until October 2025. The Company’s wholly owned subsidiary, REDL Intermediate Holdings I, LLC, is included as a borrower under the facility through a promissory note. As of December 31, 2025, the Company had an outstanding balance of approximately $12.5 million representing amounts guaranteed by AE (see Note 18).
Borrowings under the facility bear interest at a variable rate based on SOFR plus 2.65% (approximately 6.3% on an all-in basis as of December 31, 2025). The facility provides for a contractual maturity of up to three years from issuance. However, the borrowings are callable at the discretion of the administrative agent, and upon such demand, the Company may be required to repay outstanding amounts within 360 days. As a result, the timing of repayment may be accelerated.
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In addition, the Credit Agreement permits the capitalization of accrued interest (payment-in-kind or “PIK” interest), whereby unpaid interest may be added to the principal balance through the issuance of additional loan amounts. Amounts of $0.1 million and $0 were capitalized and added to the principal balance during the years ended December 31, 2025, and 2024, respectively.
Line of Credit
During 2024, the Company had a $5.0 million line of credit (“LOC”) with a bank. The Company did not draw upon this LOC at any time during the year ended December 31, 2024. As part of the acquisition of Paragon, the Company terminated the LOC agreement. There were no outstanding balances under this credit facility at the time of its termination.
| 10. | Redeemable Preferred Units and Equity |
The Company’s capital structure is designed to mirror the capital structure of the Parent. For each class of interest issued by the Parent, the Company issues a corresponding class of units having substantially equivalent economic rights and preferences. Accordingly, issuances, conversions, forfeitures, repurchases and other changes in ownership interests at the Parent are generally reflected through corresponding changes in the Company’s interests on a one-for-one basis. The Company’s distribution rights, liquidation preferences and conversion features are intended to be consistent with the economic rights applicable to the corresponding interests issued by the Parent.
Class P Units
On December 13, 2024, in connection with the financing of the acquisition of Paragon, the Company issued 252,402,492 Class P Redeemable Preferred Units (“Class P Units”). As of December 31, 2025 and 2024, the Company had 252,402,492 Class P Units issued and outstanding, respectively.
During the year ended December 31, 2025, the Company recognized accretion of $0 related to the Class P Units as the carrying amount had previously been adjusted to the Class P Units’ maximum redemption value as of December 31, 2024. During the year ended December 31, 2024, the Company recognized accretion of $134.9 million related to the Class P Units, which reflects the adjustment of the carrying amount to their maximum redemption value.
Distributions are made in the following order of priority: (i) first, to the holders of Class P Units until such holders have received distributions equal to their unreturned capital contributions; (ii) second, to the holders of Class P Units until such holders have received their contractual preferred return; and (iii) thereafter, to the holders of Class A, Class S and then Class B Units. The Class P Units are senior to all other classes of units with respect to distributions and liquidation proceeds and provide holders with a 1.5x multiple on invested capital (“MOIC”).
Distributions
The Board may declare distributions in such amounts and at such times as it determines in its discretion. Distributions may be made in cash or in-kind property. No distributions may be made to any other class of units until the applicable 1.5x MOIC has been satisfied in full. Thereafter, any remaining distributable amounts are distributed to holders of Class A Units, Class S Units and participating Class B Units in accordance with the LLC Agreement.
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Voting
Holders of Class P Units do not possess voting, approval or consent rights with respect to the governance of the Company. The business and affairs of the Company are managed by the Board.
Conversion Features
Holders of Class P Units may elect to convert all or a portion of their outstanding Class P Units into Class A Units at any time. In addition, all of the Class P Units become convertible on a one-for-one basis to Class A units upon a public offering or an initial public offering of a subsidiary.
The Class P Units do not contain a fixed or determinable redemption date or a contractual right permitting the holder to require cash redemption upon written notice. However, management concluded that the Class P Units are in substance currently redeemable because the Parent, as the Company’s sole member, controls the Company’s Board and may cause the Company to make distributions that satisfy the 1.5x MOIC and result in cancellation of the Class P Units without any additional consideration payable upon cancellation. Accordingly, settlement of the Class P holders’ economic entitlement is not solely within the Company’s control, and the Class P Units are classified as temporary equity and presented outside permanent members’ equity. The Class P Units were initially recognized at fair value upon issuance and are subsequently measured at their maximum redemption value.
Class A Units
As of December 31, 2025, and 2024, the Company had 81,917,797 Class A units issued and outstanding with no par value. Class A Units participate in distributions and share in the net assets of the Company. Class A Units, together with Class S Units, represent the most subordinated equity interests of the Company. Distributions to Class A Units are subject to a distribution waterfall, whereby holders participate only after the 1.5x Multiple on Invested Capital (“MOIC”) liquidation preference attributable to Redeemable Preferred Units has been satisfied. Thereafter, Class A Units participate pro-rata with Class S Units in achieving the common unit preference and continue to share proportionately in subsequent distributions.
Class S Units
As of December 31, 2025, and 2024, the Company had 78,038,677 and 73,038,677 non- voting Class S Units issued and outstanding, respectively with no par value. The number of Class S Units outstanding mirrors the number of Synthetic Interests issued at the REDL Ultimate Parent LP level. At the Company level, Class S Units represent substantive equity interests with economic rights substantially identical to Class A Units; however, unlike Class A Units, Class S Units do not possess voting rights.
Class S Units participate in distributions and share in the net assets of the Company and, together with Class A Units, constitute the most subordinated common equity. Similar to Class A Units, participation in distributions is subject to the satisfaction of the Redeemable Preferred Units’ 1.5x MOIC. Thereafter, Class S Units participate proportionately with Class A Units in all subsequent distributions.
| 11. | Equity-Based Compensation |
Incentive Equity Plan (Class B Units)
The Parent approved an Incentive Equity Plan (the “Plan”), including subsequent amendments, to reserve and approve the issuance of up to 7,950,000 Class B Units. Class B Units may be granted to certain employees providing services to the Company, pursuant to approval of the Parent. The Parent may increase the number of issued Class B Units based upon capital investments made by the investors of the Parent, at the Board’s discretion. Underlying terms and conditions of the Class B Units may be determined and approved by the Company prior to granting to the recipient. Such discretionary terms include but are not limited to: (a) exercise price or threshold value and; (b) vesting criteria. Vesting is generally contingent upon service requirements and achievement of specified performance thresholds, including internal rate of return (“IRR”) metrics and change-in-control conditions. Any Class B Units forfeited or repurchased shall be available for future grants under the Plan.
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In accordance with the Parent’s Limited Partnership Agreement, prior to sale or liquidation of the Company, the Class B Units are entitled to distributions only to the extent such distributions represent distributions of Company operating profits that the holder of Class B Units would be entitled to immediately prior to the liquidation date, or as determined at the discretion of the Company. Class B Units do not have voting rights. The Class B Units granted during the years ended December 31, 2025, and 2024 are subject to service, performance and market conditions. The Class B Units contain 40% time-vesting criteria over a service requisite 5-year period from date of grant and achieving a performance threshold of an IRR, as defined in the Plan, that equals or exceeds 8% at time of change in control, respectively. Another 40% vest at the time of change in control if the investor inflows, as defined in the Plan, are at least two times the investor outflows, as defined in the Plan, through the change in control date. The remaining 20% vest at the time of the change in control if the IRR, as defined in the Plan, equals or exceeds 15%. Accordingly, such Class B Units do not vest until a change of control event occurs and the applicable vesting conditions are satisfied.
Participating Class B Units, upon vesting, may participate in distributions in the later stages of the distribution waterfall, subject to defined participation thresholds. Unvested Class B Units do not participate in distributions or share in losses of the Company, and the vested Class B Units also do not share in losses of the Company. Accordingly, until vested, the Class B Units are compensatory instruments that are contingent upon the satisfaction of service and performance conditions and do not represent substantive ownership interests in the Company. As of December 31, 2025, and 2024, no Class B Units were vested.
No share-based compensation expense related to the Class B Units was recognized during the years ended December 31, 2025, and 2024 because the applicable performance condition had not been considered probable of achievement. As of December 31, 2025, total unrecognized compensation cost related to nonvested Class B Units was $3.9 million.
Award activity for the years ended December 31, 2025, and 2024 was as follows:
| Number of Class B Units | Weighted Average Grant-Date Fair Value | |||||||
| Outstanding at December 31, 2023 | 4,200,000 | $ | 0.48 | |||||
| Granted | 450,000 | 0.48 | ||||||
| Forfeited | (1,050,000 | ) | 0.48 | |||||
| Outstanding at December 31, 2024 | 3,600,000 | 0.48 | ||||||
| Granted | 4,550,000 | 0.51 | ||||||
| Forfeited | (200,000 | ) | 0.51 | |||||
| Outstanding at December 31, 2025 | 7,950,000 | $ | 0.49 | |||||
Determining Fair Value
The Company assessed the fair value of Class B Units with service, performance and market conditions as of the various grant dates in accordance with ASC Topic 718. The Company estimates the grant-date fair value of these Class B Units based on a Black-Scholes option pricing model. Significant assumptions used in the valuation include expected volatility, expected distribution yield, the risk-free interest rate, expected term and the applicable participation threshold.
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Key assumptions used in the Black-Scholes option pricing model as the method of valuation are summarized as follows:
Expected volatility: The Company estimates the volatility of its awards at the grant date based on the historical volatility of similar publicly traded companies.
Dividend yield: The dividend yield assumption was $0 based on the Company’s historical and projected dividend payouts.
Risk-free interest rate: The risk-free interest rate is based on the observed interest rates appropriate for the term of the awards.
Expected term: The average period of time an option is expected to remain outstanding before being exercised or otherwise settled.
Participation threshold: The participation threshold represents the unit value that must be achieved before the Class B Units are entitled to participate in distributions alongside Class A Unit holders.
Significant assumptions used to estimate the grant-date fair value of Class B units were as follows for the years ended December 31:
| Assumption | 2025 | 2024 | ||||||
| Expected volatility | 65 | % | 65 | % | ||||
| Dividend yield | 0 | % | 0 | % | ||||
| Risk-free interest rate | 3.7 | % | 3.6 | % | ||||
| Expected term (years) | 4.2 | 4.6 | ||||||
| Participation threshold | $ | 1.00 | $ | 1.00 | ||||
Interest Option Plan (Class B Options)
In August 2025, the Company established the 2025 Interest Option Plan (the “Option Plan”), which provides for the grant of options to employees, consultants, directors and other service providers to acquire Class B Units of the Company (the “Class B Options”). Class B Options vest over periods ranging from six months to four years, subject to continuous service through the vesting date. Awards may include vesting acceleration provisions upon the occurrence of certain events or transactions (each as defined in the applicable award agreement). The Class B Options expire up to 10 years after date of issuance. The option vesting accelerates to 100% upon a change in control.
In October 2025, the Company issued 40,136,613 Class B Options with exercise price varying from $0 to $0.64. As of December 31,2025, these included 12,340,444 fully vested Class B Options, 27,537,059 partially vested Class B Options and 259,110 forfeited Class B Options for a total of 39,877,503 Class B Options. The fair value attributable to precombination services of these awards was included in acquisition accounting, while the fair value attributable to postcombination services is recognized as compensation expense over the requisite service period. Equity compensation expense for the year ended December 31, 2025 was $5.9 million, with $5.3 million recognized in Selling, general and administrative expenses and $0.6 million recognized in Cost of revenue, respectively, in the Consolidated Statements of Operations. As of December 31, 2025, the unrecognized compensation expense related to Class B Options is $14.9 million. This expense will be recognized over a weighted-average number of years of 2.8 based on the average remaining service periods for the awards.
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The following table summarizes unit option award activity during fiscal 2025:
| Unit Options | ||||||||||||
| Units | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (In years) | ||||||||||
| Outstanding as of December 31, 2024 | - | $ | - | - | ||||||||
| Granted | 40,136,613 | 0.10 | ||||||||||
| Options exercised | - | - | ||||||||||
| Forfeited | (259,110 | ) | 0.22 | |||||||||
| Outstanding as of December 31, 2025 | 39,877,503 | 0.09 | 9.3 | |||||||||
| Exercisable options as of December 31, 2025 | 13,191,477 | $ | 0.08 | 8.7 | ||||||||
The weighted average fair values at grant date of options granted for the year ended December 31, 2025 is $0.66.
The aggregate intrinsic value of the outstanding options at December 31, 2025 represents the amount of $22.4 million, which are in-the-money as of December 31, 2025.
Determining Fair Value
The Company assessed the fair value of Class B Options with service and market conditions in accordance with ASC Topic 718. The fully vested and partially vested Class B Options granted in connection with the acquisition were measured at fair value as of the acquisition date. The remainder of the Class B Options granted were measured at fair value as of their respective grant dates.
The Company assessed the fair value of these Class B Options based on a Black-Scholes option pricing model, adjusted for the volatility of similar companies.
Key assumptions used in the Black-Scholes option pricing model as the method of valuation are summarized as follows:
Expected volatility: The Company estimates the volatility of its Awards at the grant date based on the historical volatility of similar publicly traded companies.
Dividend yield: The dividend yield assumption was $0 based on the Company’s historical and projected dividend payouts.
Risk-free interest rate: The risk-free interest rate is based on the observed interest rates appropriate for the term of the Awards.
Expected term: The average period of time an option is expected to remain outstanding before being exercised or otherwise settled.
Exercise price: The exercise price represents the amount payable by the option holder to exercise the Class B Options.
Key assumptions for the class B options were as follows for the years ended December 31:
| Assumption | 2025 | |||
| Expected volatility | 65 | % | ||
| Dividend yield | 0 | % | ||
| Risk-free interest rate | 3.7 | % | ||
| Expected term (years) | 4.2 years | |||
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| 12. | Income Taxes |
The components of income before taxes are as follows for the years ended December 31:
| (in thousands) | 2025 | 2024 | ||||||
| Loss before income taxes | ||||||||
| United States | $ | (47,660 | ) | $ | (35,368 | ) | ||
| Foreign | 15,500 | 19,945 | ||||||
| Loss before income taxes | $ | (32,160 | ) | $ | (15,423 | ) | ||
Income tax expense is comprised of the following for the years ended December 31:
| (in thousands) | 2025 | 2024 | ||||||
| Current: | ||||||||
| Federal | $ | 835 | $ | 43 | ||||
| State and local | 95 | 5 | ||||||
| Foreign | 1,900 | 2,343 | ||||||
| Total current income tax expense | 2,830 | 2,391 | ||||||
| Deferred: | ||||||||
| Federal | (2,866 | ) | (1,892 | ) | ||||
| State and local | 457 | (816 | ) | |||||
| Foreign | 516 | (101 | ) | |||||
| Total deferred income tax benefit | (1,893 | ) | (2,809 | ) | ||||
| Total income tax expense (benefit), net | $ | 937 | $ | (418 | ) | |||
The provision for income tax using statutory U.S. federal tax rate of 21% is reconciled to the Company’s effective tax rate as follows, pursuant to the disclosure requirements of ASU 2023-09 for the year ended:
| (in thousands) | December 31, 2025 | |||||||
| U.S. federal statutory tax rate | $ | (6,354 | ) | 21.0 | % | |||
| State and local income taxes, net of federal tax effect1 | 436 | (1.4 | )% | |||||
| Foreign tax effects | ||||||||
| Israel | ||||||||
| Statutory tax rate difference between Israel and United States | (797 | ) | 2.6 | % | ||||
| Preferred tax benefit regimes | 3,891 | (12.9 | )% | |||||
| Withholding taxes | 224 | (0.7 | )% | |||||
| Share based compensation | 1,390 | (4.6 | %) | |||||
| Currency gain/loss | (778 | ) | 2.6 | % | ||||
| Nontaxable or Nondeductible Items | 284 | |||||||
| Other | 79 | (0.3 | )% | |||||
| Other foreign tax effects | 46 | (0.2 | )% | |||||
| Tax credits | ||||||||
| Foreign tax credits | (1,263 | ) | 4.2 | % | ||||
| Effect of cross-border tax laws | ||||||||
| Global Intangible Low-Taxed Income (“GILTI”) | 7,881 | (26.0 | )% | |||||
| Nontaxable or nondeductible items | ||||||||
| Earnout liability | (6,573 | ) | 21.7 | % | ||||
| Transaction costs | (788 | ) | 2.6 | % | ||||
| Other | 133 | (0.4 | )% | |||||
| Changes in valuation allowances | 2,963 | (9.8 | )% | |||||
| Other | ||||||||
| Other, net | 163 | (1.5 | )% | |||||
| $ | 937 | (3.2 | )% | |||||
| 1 | State taxes in Virginia for 2025 made up the majority (greater than 50%) of the tax effect in this category. |
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The provision for income tax using statutory U.S. federal tax rate of 21.0% is reconciled to the Company’s effective tax rate as follows for the years ended December 31, 2024:
| (in thousands) | ||||
| Income tax benefit at statutory rate | 21 | % | ||
| State and local income taxes, net of federal tax effect | 4 | % | ||
| Statutory tax rate difference | (2 | )% | ||
| Preferred tax benefit regimes | 12 | % | ||
| Withholding taxes | (5 | )% | ||
| GILTI | (9 | )% | ||
| Transaction costs | (19 | )% | ||
| Effective income tax rate | 2 | % | ||
Temporary differences and carryforwards that gave rise to significant portions of deferred taxes were as follows as of December 31:
| (in thousands) | 2025 | 2024 | ||||||
| Deferred tax assets | ||||||||
| Accrued paid-time off | $ | 682 | $ | 479 | ||||
| Leases | 2,161 | 2,263 | ||||||
| Depreciation | – | 63 | ||||||
| Research and experimental expenditures | – | 540 | ||||||
| Business interest expense limitation | 5,866 | 658 | ||||||
| Equity compensation | – | – | ||||||
| Federal net operating loss | 210 | 5,452 | ||||||
| State net operating loss | 1,074 | 1,433 | ||||||
| Other | 158 | – | ||||||
| 10,151 | 10,888 | |||||||
| Valuation allowance | (4,298 | ) | – | |||||
| Total deferred tax assets | $ | 5,853 | $ | 10,888 | ||||
| Deferred tax liabilities | ||||||||
| Intangible assets | (54,890 | ) | (62,349 | ) | ||||
| Withholding taxes | (2,372 | ) | (2,148 | ) | ||||
| Depreciation | (112 | ) | – | |||||
| Right-of-use lease assets | (2,026 | ) | (2,224 | ) | ||||
| Total deferred tax liabilities | (59,400 | ) | (66,721 | ) | ||||
| Net deferred tax liability | $ | (53,547 | ) | $ | (55,833 | ) | ||
The Company has provided foreign withholding taxes on the undistributed earnings of its foreign subsidiary as of December 31, 2025 and 2024 because it does not intend to reinvest such earnings outside of the U.S. permanently.
The Company has generated net operating loss carryforwards for tax purposes of approximately $4.8 million pre-tax as of the year ended December 31, 2025 and $26.0 million pre-tax as of the year ended December 31, 2024 at the U.S. Federal level and $20.8 million pre-tax as of the year ended December 31, 2025 and $29.3 million pre-tax as of the year ended December 31, 2024 at the State level, which can be carried forward to offset future taxable income. The U.S. Federal net operating loss carryover does not expire. The State net operating loss carryover contains $20.7 million which does not expire and $34 thousand which expire in 2044 if not utilized.
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Management assesses the available positive and negative evidence to estimate the future realization of deferred tax assets. On the basis of this evaluation, as of December 31, 2025, a valuation allowance of ($4.3) million has been recorded to recognize only the portion of the deferred tax asset that is more likely than not to be realized. The valuation allowance recorded is primarily related to U.S. federal deferred tax assets that are not expected to be realized. The amount of the deferred tax asset considered realizable, however, could be adjusted if additional objectively verifiable positive evidence materializes in future reporting periods, such as a demonstrated operating profitability.
The following table presents a summary of the valuation allowance roll forward:
| Charged to income tax expense | ||||||||||||||||
| (in thousands) | Beginning of Period | Additions | Deductions | End
of Period | ||||||||||||
| Year ended December 31, 2024 | ||||||||||||||||
| Deducted from asset accounts: | ||||||||||||||||
| Valuation allowance on deferred tax assets | ||||||||||||||||
| Total | – | – | – | – | ||||||||||||
| Year ended December 31, 2025 | ||||||||||||||||
| Deducted from asset accounts: | ||||||||||||||||
| Valuation allowance on deferred tax assets | 4,298 | 4,298 | ||||||||||||||
| Total | – | 4,298 | – | 4,298 | ||||||||||||
Income taxes paid (net of refunds) exceeded 5 percent of total income taxes paid (net of refunds) in the following jurisdictions for the years ended December 31:
| (in thousands) | 2025 | 2024 | ||||||
| U.S. Federal | $ | 1,404 | $ | – | ||||
| U.S. State and Local | ||||||||
| Other | 8 | 1 | ||||||
| Foreign | ||||||||
| Israel | 3,431 | 43 | ||||||
| Total | $ | 4,843 | $ | 44 | ||||
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the United States. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the United States Tax Cuts and Jobs Act and amends other provisions of the Internal Revenue Code. The legislation has multiple effective dates, with certain provisions effective in 2025 and others through 2027. The OBBBA did not have a material impact on the Company’s consolidated financial statements.
The Company accounts for uncertainty in income taxes in accordance with Accounting Standards Codification 740-10. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained upon examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. The Company did not have unrecognized tax benefits as of December 31, 2025 and 2024.
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The Company files tax returns in U.S. federal and state jurisdictions. The Company is no longer subject to U.S. federal examinations by the Internal Revenue Service for years before 2021 and is no longer subject to examinations by state authorities before 2020. The Company is no longer subject to Israel or Germany examinations before 2020.
| 13. | Revenue |
The Company generates revenue from the sale of product licenses, maintenance & support services and consulting services. Revenue is originated in the United States for REDLattice and in Israel for Paragon.
The following table presents revenue disaggregated by timing of revenue recognition for the years ended December 31:
| (in thousands) | 2025 | 2024 | ||||||
| Revenue recognized over time | $ | 97,545 | $ | 26,293 | ||||
| Revenue recognized at a point in time | 148,733 | 35,991 | ||||||
| Total | $ | 246,278 | $ | 62,284 | ||||
Concentration
The Company’s customers are primarily comprised of governmental entities. For the purposes of assessing concentration risk, the Company considers each entity and agency to be discrete customers. One customer represented 14% of revenue for the year ended December 31, 2025, which was attributable to the Paragon segment. Three customers represented 16%, 15% and 15% of revenue for the year ended December 31, 2024, of which the customers representing 16% and 15% were attributable to the REDLattice segment and the remaining customer representing 15% was attributable to the Paragon segment. Four customers represented 27%, 20%, 15%, and 14% of accounts receivables as of December 31, 2025. Two customers represented 32% and 19% of accounts receivable as of December 31, 2024.
The contract assets as of December 31, 2025 are associated with one customer. There were no contract assets as of December 31, 2024.
Contract Assets and Contract Liabilities
Contract assets are the rights to consideration in exchange for goods or services that the Company has transferred to a customer when that right is conditional on something other than the passage of time. Contract assets were $15.3 million as of December 31, 2025. Contract assets were not present as of December 31, 2024. Contract assets are classified as current due to the short time period between recognition and collection and are recorded separately in the Consolidated Balance Sheets. The changes in contract assets are primarily due to timing differences between the Company’s performance of services or a sale of licenses and the related right for consideration to become unconditional (i.e., timing of contract assets being reclassified to a receivable).
Contract liabilities are recorded for any services billed to customers and not yet recognizable if the contract period has commenced or for the amount collected from customers in advance of the contract period commencing. Contract liabilities are classified as current and noncurrent and are presented as Deferred revenue in the Consolidated Balance Sheets.
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Deferred revenue consisted of the following as of December 31:
| (in thousands) | 2025 | 2024 | ||||||
| Deferred revenue - beginning of the year | $ | 19,525 | $ | 1,398 | ||||
| Additions (advance received) | 21,986 | 12,374 | ||||||
| Acquired deferred revenue (Paragon acquisition - Note 3) | - | 12,704 | ||||||
| Revenue recognized | (18,130 | ) | (6,951 | ) | ||||
| Deferred revenue - end of the year | 23,381 | 19,525 | ||||||
| Less: Deferred revenue, current | (23,292 | ) | (18,788 | ) | ||||
| Deferred revenue, noncurrent | $ | 89 | $ | 737 | ||||
Deferred revenue during the years ended December 31, 2025 and 2024 mainly changed due to (1) the acquisition of Paragon (Note 3) and (2) revenue recognized in the period from amounts included in contracts liability as of January 1, 2025 or 2024. Deferred revenue is primarily maintenance revenue paid up front which is recognized over the contract term.
Remaining Performance Obligations
The Company’s remaining performance obligations are comprised of product and services revenue not yet delivered. As of December 31, 2025, the aggregate amount of the transaction price allocated to remaining performance obligations was $137.9 million. The Company expects to recognize $62.6 million and $36.2 million over months 13-24, and the remainder over the four years thereafter.
Accounts Receivable
Accounts receivable consisted of the following as of December 31:
| (in thousands) | 2025 | 2024 | ||||||
| Billed receivables | $ | 19,397 | $ | 27,220 | ||||
| Unbilled receivables | 53,234 | 30,466 | ||||||
| Total | $ | 72,631 | $ | 57,686 | ||||
The Company’s accounts receivables do not bear interest, and they are recorded at the invoiced amount less an allowance for any potentially uncollectable accounts under the CECL model. As of December 31, 2025 and 2024, there was no allowance for credit losses.
The Company’s unbilled receivables against revenues recognized prior to receipt of payment, and these amounts are generally billed and collected within one year. Unbilled receivables are classified as current due to the short time period between recognition and collection and are included in Accounts receivable in the Consolidated Balance Sheets.
Contract costs
The Company pays bonuses to business development personnel and fees to third-party in-country representatives; however, these costs are expensed because they are not directly attributable to obtaining specific individual customer contracts.
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The Company defers costs to fulfill its contractual obligations if those costs meet all of the following criteria: (i) the costs relate directly to the contract, (ii) the costs generate or enhance resources of the Company that will be used in satisfying performance obligations in the future, and (iii) the costs are expected to be recovered. The Company did not defer any material costs as of December 31, 2025, and 2024.
Loss Contracts
The Company evaluates its contracts for expected losses and recognizes such losses when they are probable and estimable. No material losses on contracts were identified for the periods presented.
| 14. | Loss per Unit |
The computation of loss per unit and weighted-average units outstanding for the periods presented is as follows. The Company applies the two-class method for computing and presenting loss per unit, which allocates current period net loss between common units and participating securities based on dividends declared and participation rights in undistributed earnings or losses.
The Company has issued Class A, Class S, Class B and Redeemable Preferred Units, as described in Notes 10-11. The Class A and Class S Units of the Company have the same economic rights, participate in losses of the Company, and are the Company’s most subordinated equity. As the economic rights between the two units are identical, the presentation of net income (loss) per unit is shown on a combined basis.
The Class B and Redeemable Preferred Units of the Company are considered participating securities. Under the two-class method, net losses are not allocated to the Class B and Redeemable Preferred Units as the holders of these units do not have a contractual obligation to share in the Company’s losses.
Basic net loss per unit is computed by dividing net loss allocated to Class A and Class S Units by the weighted-average units outstanding during the period. Further, for the Company’s Redeemable Preferred Units, consistent with ASC 480-10-S99-3A(20), any adjustment to the maximum redemption amount as of each balance sheet date is treated in the same manner as dividends when calculating income available to common unitholders (i.e., increase or decrease the loss per unit numerator). Diluted net loss per unit reflects the potential dilution that would occur if securities or other contracts to issue common units were exercised or converted into common units.
For the years ended December 31, 2025 and 2024, the Company was in a net loss position. Accordingly, all potentially dilutive securities, including warrants, Redeemable Preferred Units, Class B Units, options, and earnout-related units, were excluded from the computation of diluted net loss per unit as their inclusion would have been anti-dilutive. Therefore, basic and diluted net loss per unit are the same for all periods presented.
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The following table sets forth the computation of the Company’s basic and diluted net loss per unit for the years ended December 31:
| (in thousands except unit and per unit data) | 2025 | 2024 | ||||||
| Numerator (basic and diluted): | ||||||||
| Net loss | $ | (33,097 | ) | $ | (15,005 | ) | ||
| Accretion of Redeemable Preferred Units | - | (134,864 | ) | |||||
| Net loss per unit | (33,097 | ) | (149,869 | ) | ||||
| Denominator (basic and diluted): | ||||||||
| Total weighted average units outstanding - Basic and diluted | 157,456,474 | 85,499,732 | ||||||
| Loss per unit: | ||||||||
| Basic and diluted EPU - Common Units | $ | (0.21 | ) | $ | (1.75 | ) | ||
For the years ended December 31, 2025 and 2024, 439 million and 413 million units, respectively, were excluded from the calculation of diluted weighted average units outstanding as the inclusion of these units would have an anti-dilutive effect. The antidilutive units noted relate to the potentially dilutive securities above.
| 15. | Commitments and Contingencies |
The Company is subject to litigation and claims arising from time to time in the ordinary course of business. These matters may include, among others, commercial disputes, intellectual property matters, employment-related claims, and regulatory inquiries. The Company reviews the status of each matter and assesses its potential financial exposure. The Company will accrue a liability for such matters when it is probable that liability has been incurred, and the amount can be reasonably estimated. Legal costs associated with such matters are expensed as incurred. When only a range of possible loss can be established, the most probable amount in the range is accrued. If no amount within the range is a better estimate than any other amount within the range, the minimum amount in the range is accrued.
Although legal proceedings are inherently unpredictable, the Company believes that it has valid defenses with respect to any matters currently pending against the Company and intends to defend itself vigorously. The outcome of these matters, individually and in aggregate, is not expected to have a material impact on the Company’s consolidated financial statements.
As of December 31, 2025 and 2024, the Company has recorded no accruals related to legal contingencies.
The Earnout Obligation will be paid out in cash, equity, or a combination of the two. Refer to Note 2 and Note 3.
The Company’s commitments related to operating leases are disclosed in Note 7.
As of December 31, 2025, the Company has bank guarantees in the amount of $0.8 million which are mainly issued for securing lease payments.
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Government Business
The Company provides products and services to agencies of governments and, accordingly, is subject to various risks associated with government contracting, including changes in funding, contract modifications or terminations, and compliance with applicable procurement laws and regulations. Such contracts may be subject to audits, investigations, and reviews by governmental authorities.
From time to time, the Company may be involved in claims, disputes, or legal proceedings arising in the ordinary course of business, including matters related to its government contracts. The Company is unable to predict the outcome of such matters or estimate the range of potential loss, if any. Management continues to evaluate these matters and will update disclosures, as appropriate.
| 16. | Segment Information |
The company operates through two reportable segments: REDLattice and Paragon, which reflect the manner in which the Company’s Chief Operating Decision Maker (“CODM”), the Chief Executive Officer, evaluates performance and allocates resources.
REDLattice represents the Company’s legacy U.S. based operations and derives revenue from the sale of cybersecurity products, licenses, maintenance and support services, and consulting services. Paragon represents the Company’s international operations acquired in December 2024 and derives revenue from the development and sale of cyber intelligence platform solutions to governmental customers.
The CODM evaluates the performance of the Company’s reportable segments based on segment gross profit, which is defined as segment revenue less cost of revenue, excluding related depreciation and amortization expense. The CODM uses segment gross profit to assess each segment’s operating performance by comparing actual results to budgeted and forecasted results and evaluating period-over-period changes in revenue and cost of revenue. The CODM considers these results in identifying operating trends and assessing whether each segment is achieving its financial and operational objectives. The CODM uses budgeted segment gross profit versus actual results, as well as periodic forecasting analyses, in assessing the performance of the segments and making decisions regarding the allocation of personnel, financial, and other operating resources between the REDLattice and Paragon segments. The CODM does not receive or review asset information by segment.
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The following tables present revenue and cost of revenue, excluding related depreciation and amortization expense, by segment for the years ended December 31, 2025, and 2024.
| (in thousands) | For
the year ended December 31, 2025 | |||||||
| REDLattice | Paragon | |||||||
| Product | $ | 32,568 | $ | 115,527 | ||||
| Maintenance | 1,493 | 52,785 | ||||||
| Services | 23,555 | 20,350 | ||||||
| Total revenue | $ | 57,616 | $ | 188,662 | ||||
| Product and maintenance cost (exclusive of depreciation and amortization) | (14,295 | ) | (22,533 | ) | ||||
| Services cost (exclusive of depreciation and amortization) | (13,252 | ) | - | |||||
| Cost of revenue (exclusive of depreciation and amortization) | $ | (27,547 | ) | (22,533 | ) | |||
| Segment gross profit | $ | 30,069 | $ | 166,129 | ||||
| (in thousands) | For
the year ended December 31, 2024 | |||||||
| REDLattice | Paragon | |||||||
| Product | $ | 10,493 | $ | 25,498 | ||||
| Maintenance | - | 2,087 | ||||||
| Services | 23,850 | 356 | ||||||
| Total revenue | $ | 34,343 | $ | 27,941 | ||||
| Product and maintenance cost (exclusive of depreciation and amortization) | (3,086 | ) | (1,075 | ) | ||||
| Services cost (exclusive of depreciation and amortization) | (16,716 | ) | (598 | ) | ||||
| Cost of revenue (exclusive of depreciation and amortization) | $ | (19,802 | ) | (1,673 | ) | |||
| Segment gross profit | $ | 14,541 | $ | 26,268 | ||||
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The following table reconciles segment gross profit to loss before income tax expense (benefit) for the years ended December 31:
| (in thousands) | 2025 | 2024 | ||||||
| Segment gross profit | $ | 196,198 | $ | 40,809 | ||||
| Selling, general and administrative | (76,491 | ) | (14,302 | ) | ||||
| Related party expenses | (2,299 | ) | (760 | ) | ||||
| Research and development | (82,916 | ) | (3,455 | ) | ||||
| Depreciation and Amortization | (63,732 | ) | (6,182 | ) | ||||
| Change in earnout obligation fair value | 31,300 | - | ||||||
| Transaction costs | - | (13,696 | ) | |||||
| Transaction costs, related party | - | (15,000 | ) | |||||
| Other expense, net | (135 | ) | - | |||||
| Foreign currency loss (gain), net | (3,415 | ) | (377 | ) | ||||
| Change in warrant liability fair value | (1,350 | ) | - | |||||
| Interest expense | (29,320 | ) | (2,460 | ) | ||||
| Loss before income tax expense (benefit) | $ | (32,160 | ) | $ | (15,423 | ) | ||
Geographical information
Revenue is attributed to geographic areas based on where the entity which generated the revenue is domiciled. The following table presents the country where the entity that generated the revenue is domiciled for the years ended December 31:
| (in thousands) | 2025 | 2024 | ||||||
| United States | $ | 57,616 | $ | 34,343 | ||||
| Israel | 188,662 | 27,941 | ||||||
| Total Revenue | $ | 246,278 | $ | 62,284 | ||||
The following table presents long-lived assets for the years presented, based on geographical areas which consist of property and equipment, net and operating lease right-of-use assets for the years ended December 31:
| (in thousands) | 2025 | 2024 | ||||||
| United States | $ | 4,701 | $ | 5,567 | ||||
| Israel | 25,834 | 20,411 | ||||||
| Total long-lived assets | $ | 30,535 | $ | 25,978 | ||||
| 17. | Benefit Plan |
The Company has a 401(k) plan covering substantially all full-time employees in the United States who have completed required minimum lengths of service and are at least twenty-one years of age. Participants may make voluntary contributions up to the maximum amount allowable by law. The Company contributes on a discretionary and nondiscretionary basis with such contributions vesting over varying lengths of time. Matching contributions for the years ended December 31, 2025 and 2024 were $1.6 million and $1.3 million, respectively, and are included in Selling, general and administrative in the Consolidated Statements of Operations.
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Pursuant to Section 14 of Israel’s Severance Compensation Law, 1963 (“Section 14”), all of the Company’s Israeli employees are included under Section 14 and entitled only to monthly deposits, at a rate of 8.33% of their monthly salary, made in their name with insurance companies. Payments in accordance with Section 14 release the Company from any future severance payments in respect of those employees. As a result, the related obligation and amounts deposited on behalf of such obligation are not stated on the Consolidated Balance Sheets as the Company is legally released from severance obligation to employees once the amounts have been deposited and the Company has no further legal ownership on the amounts deposited. For the years ended December 31, 2025 and 2024, Section 14 expense amounted to $5.6 million and $0.2 million, respectively, and are included in Selling, general and administrative in the Consolidated Statements of Operations.
Additionally, the Company’s Israeli employees participate in pension plans administered by third-party insurance companies and pension fund providers selected by the employees. The Company’s obligation is limited to making the required contributions under Israeli law, and the Company does not administer or manage the pension plans. Once the required contributions are deposited with the pension provider of the employee’s choice, the Company has no further funding obligation with respect to the pension plans. As such, these pension arrangements are accounted for as defined contribution plans. For the years ended December 31, 2025 and 2024, pension contribution expenses amounted to $4.4 million and $0.2 million, respectively, and are included in Selling, general and administrative, in the Consolidated Statements of Operations.
| 18. | Related Party Transactions |
The Company engages in transactions with related parties, including AE and board member of the Company as follows:
Related party expenses
In connection with the acquisition of Paragon in 2024 (Note 3), the Company paid AE $15.0 million in transaction costs.
The following table sets forth a summary of transactions and balances with AE as of December 31:
| (in thousands) | 2025 | 2024 | ||||||
| Expense reimbursements | $ | 131 | $ | 160 | ||||
| Transaction costs | - | 15,000 | ||||||
| Management fees | 2,168 | 600 | ||||||
| Total | $ | 2,299 | $ | 15,760 | ||||
Related party lease
The Company leased two office spaces from a board member with lease term expiring in December 2025 and March 2026. Refer to Note 19 for subsequent events related to this lease. The Company recognized $0.3 million and $0.3 million in lease expense for the years ended December 31, 2025 and 2024, respectively.
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Related party payable
The following table presents a reconciliation of the Company’s related party payable balance for the year ended December 31, 2025:
| (in thousands) | Related
party payable | |||
| Outstanding as at December 31, 2023 | $ | - | ||
| Management fees and related party expenses incurred | 760 | |||
| Management fees and related party expenses paid during the year | (760 | ) | ||
| Jefferies fee | 7,606 | |||
| Outstanding as at December 31, 2024 | $ | 7,606 | ||
| Management fees and related party expenses incurred | 2,299 | |||
| Management fees and related party expenses paid | (444 | ) | ||
| Jefferies fee paid | (7,606 | ) | ||
| Outstanding as December 31, 2025 | $ | 1,855 | ||
Related party note payable
As part of the Company’s acquisition of REDLattice on January 25, 2023, the Company issued a note payable to the seller, and a current board member of the Company, for $17.5 million (“Related Party Note Payable”). The Related Party Note Payable was to become due as a lump sum payment on the loan’s maturity date of January 25, 2028, with interest paid quarterly at an annual rate of 6.50%. During 2024 the Company fully paid off the Related Party Note Payable.
Total interest expense for the Note Payable for the years ended December 31, 2025, and 2024 was $0 and $1.1 million, respectively.
Related party promissory note
On June 16, 2025, the Company issued a $6.0 million promissory note with AE (the “June 2025 Note”). The June 2025 Note had a term of one year with a June 15, 2026 maturity date and carried an interest rate of 15.0% per annum. Interest was due and payable in arrears on an annual basis.
In addition, on October 1, 2025, the Company issued a $6.0 million promissory note with AE (the “October 2025 Note”, together with the June 2025 Note, “AE Notes”). The October 2025 Note was payable on demand and carried an interest at 15.0% per annum.
Total interest expense recognized on the AE Notes during the year ended December 31, 2025 was approximately $0.4 million.
On October 30, 2025, the Company drew the total outstanding obligation of the AE Notes under the Goldman Sachs Credit Agreement to settle the balance of the AE Notes. As the Goldman Sachs Credit Agreement is a revolving facility with a different lender, the Company accounted for the transaction as a debt extinguishment. Accordingly, the AE Notes were derecognized and the borrowings under the Goldman Sachs Credit Agreement were recognized as incremental debt under the Goldman Sachs Credit Agreement as of October 30, 2025.
The Company determined that the reacquisition price of the new debt approximated the net carrying amount of the AE Notes immediately prior to the exchange. As a result, no gain or loss was recognized upon extinguishment.
The Company’s debt agreement with Goldman Sachs (Note 9) includes a guarantee provided by AE.
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| 19. | Subsequent Events |
In preparing these consolidated financial statements, the Company evaluated events and transactions for potential recognition or disclosure through September [X], 2026, the date on which the consolidated financial statements were available to be issued.
Leases
In January 2026, the Company entered into an additional lease for certain office space from a board member of the Company which expires in March 2036. Total future minimum lease payments related to the lease are $3.7 million.
Amendments to the Credit Facility
On April 14, 2026, the Company entered into Amendment No. 4 to the Credit Facility (Note 9). Amendment No. 4 provided the Company with a waiver of the financial covenant under the Credit Facility. Among other matters, Amendment No. 4 waived certain specified events of default related to the Company’s compliance with certain financial covenants and related notice requirements for the fiscal quarter ended March 31, 2026.
Amendment No. 4 also established certain milestones related to a potential deSPAC transaction and related private investment in public equity (“PIPE”) financing. The milestones include requirements related to the execution of transaction and financing arrangements and the consummation of the deSPAC transaction and PIPE financing by December 31, 2026. Failure to satisfy an applicable milestone, following a 14-day grace period and unless otherwise extended by the Collateral Agent, may result in an event of default under the Credit Facility.
[As of the date the consolidated financial statements were available to be issued, the Company [had satisfied all applicable milestones / had obtained extensions of the applicable milestones / was in compliance with the applicable requirements].
Issuance of Class B Options
On April 24, 2026, the Company granted 1,648,616 Class B Options under the 2025 Interest Option Plan, with an exercise price of $0.25 per unit.
Draws and repayment under the Goldman Credit Agreement
The Company drew $18.3 million, $9.0 million, and $23.0 million on March 4, 2026, March 31, 2026, and April 17, 2026, respectively, under the Goldman Credit Agreement. The Company repaid $3.2 million and $60.8 million, including accrued interest, on May 7, 2026 and June 26, 2026, respectively. Following the repayment, the Company drew $19.7 million under the Goldman Credit Agreement and as of June 30, 2026, the outstanding balance was $20.0 million.
Issuance of Class V Units
In May and June 2026, the Company issued 32,002,817 Class V Units to certain investors for aggregate cash proceeds of $64 million, of which $60.8 million was used to repay the outstanding balance under the Goldman Credit Agreement on June 26, 2026.
The Class V Units represent a preferred equity interest that accrues a 12% annual yield and has a distribution preference designed to provide holders with a minimum 1.5x multiple on invested capital before distributions are made to other equity classes, except for Class P Units. Upon the occurrence of a qualified initial public offering or qualifying equity financing, the Class V Units automatically convert into Class A Units at a valuation-based conversion discount. In addition, upon a sale of the Company, holders are entitled to receive the greater of (i) the amount payable pursuant to the Class V distribution waterfall or (ii) the amount they would receive on an as-converted basis. The Class V Units do not provide governance or voting rights.
Business Combination Agreement
On [Date of Execution], 2026, the Company entered into a business combination agreement with Bold Eagle Acquisition Corp. (“BEAC”) and BEAC Merger Sub, LLC (“Merger Sub”) (the “Agreement”). Pursuant to the Agreement, BEAC will domesticate as a Delaware corporation and Merger Sub will merge with and into the Company, with the Company surviving the merger as a wholly owned subsidiary of the post-combination publicly traded company (the “Merger”). The Agreement contemplates an enterprise value of the Company to be approximately $2.0 billion, subject to adjustments for closing indebtedness and other customary items. In connection with the Merger, BEAC has entered into subscription agreements with certain investors to provide additional financing through a PIPE.
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