XBP Global Holdings (XBP) posts $43.5M loss and works to shore up liquidity
XBP Global Holdings, Inc. reported results for the quarter and six months ended June 30, 2026 as a fresh-start “Successor” entity following its 2025 restructuring and reverse acquisition of XBP Europe. Total assets were $827.8 million and stockholders’ equity was $46.5 million.
For the six months, revenue was $388.4 million and the company generated an operating loss of $18.8 million and a net loss of $43.5 million, or $(3.69) per share. Operating cash flow was an outflow of $15.2 million. Cash and cash equivalents were $18.6 million, with a working capital deficit of $111.2 million.
Management describes ongoing liquidity actions, including new and amended debt facilities, cost-saving initiatives and a restructuring of European operations affecting 245 employees, with $5.0 million in charges accrued and $3.5 million remaining as a restructuring liability. An owned U.K. property with a $2.3 million carrying value was classified as held for sale without impairment.
Positive
- None.
Negative
- Net loss and liquidity pressure: Six-month net loss of $43.5 million, operating cash outflow of $15.2 million and a $111.2 million working capital deficit highlight ongoing pressure on profitability and near-term liquidity despite management’s mitigating actions.
Filing Explained
At June 30, 2026, 11,778,409 shares were outstanding; warrants and awards represented potential additional shares, not current issuance.
Form 10-Q is an unaudited quarterly report. This filing reports
The company had
The Second Lien Note matures on
The named items to monitor are whether the
Key Figures
Key Terms
fresh start accounting financial
reorganization items, net financial
Applied Workflow Automation financial
Successor financial
Super Senior Term Loan financial
July 2030 Notes financial
FAQ
How did XBP (XBP Global Holdings, Inc.) perform financially for the six months ended June 30, 2026?
What is XBP’s liquidity position and working capital as of June 30, 2026?
What restructuring actions is XBP (XBP Global Holdings, Inc.) taking in Europe?
How much revenue did XBP generate by segment and geography in the first half of 2026?
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AI-generated analysis. How Rhea-AI works. Not financial advice.
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number:
(Exact Name of Registrant as Specified in its Charter)
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(State of or other Jurisdiction | | (I.R.S. Employer |
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(Address of Principal Executive Offices) | | (Zip Code) |
Registrant’s Telephone Number, Including Area Code: (
(Former name, former address and former fiscal year, if changed since last report)
Securities Registered Pursuant to Section 12(b) of the Act:
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Title of Each Class | | Trading Symbol | | Name of Each Exchange on Which Registered |
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Indicate by check mark whether the Registrant (1) has filed all reports required by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). ☒
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer ☐ | Accelerated filer ☐ | Smaller reporting company | |
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act).
As of August 14, 2026, the Registrant had
Table of Contents
XBP Global Holdings, Inc.
Quarterly Financial Statements
For the quarterly period ended June 30, 2026
TABLE OF CONTENTS
PART I — FINANCIAL INFORMATION
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Item 1. Financial Statements | |
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Condensed Consolidated and Combined Financial Statements | |
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Condensed Consolidated Balance Sheets as of June 30, 2026 (Successor) (Unaudited) and December 31, 2025 (Successor) | 2 |
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Condensed Consolidated and Combined Statements of Operations for the three and six months ended June 30, 2026 (Successor) and June 30, 2025 (Predecessor) (Unaudited) | 3 |
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Condensed Consolidated and Combined Statements of Comprehensive Profit (Loss) for the three and six months ended June 30, 2026 (Successor) and June 30, 2025 (Predecessor) (Unaudited) | 4 |
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Condensed Consolidated and Combined Statements of Stockholders’ Equity (Deficit) for the three and six months ended June 30, 2026 (Successor) and June 30, 2025 (Predecessor) (Unaudited) | 5 |
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Condensed Consolidated and Combined Statements of Cash Flows for the six months ended June 30, 2026 (Successor) and June 30, 2025 (Predecessor) (Unaudited) | 6 |
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Notes to the Condensed Consolidated and Combined Financial Statements (Unaudited) | 7 |
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 46 |
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Item 3. Quantitative and Qualitative Disclosures about Market Risk | 69 |
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Item 4. Controls and Procedures | 69 |
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PART II — OTHER INFORMATION | 71 |
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Item 1. Legal Proceedings | 71 |
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Item 1A. Risk Factors | 71 |
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 71 |
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Item 3. Defaults Upon Senior Securities | 71 |
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Item 4. Mine Safety Disclosures | 71 |
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Item 5. Other Information | 71 |
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Item 6. Exhibits | 72 |
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Signatures | 73 |
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
XBP Global Holdings, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
As of June 30, 2026 (Successor) and December 31, 2025 (Successor)
(in thousands of United States dollars except share and per share amounts)
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| | June 30, | | | ||
| | 2026 | | December 31, | ||
Assets | | | | | | |
Current assets | | | | | | |
Cash and cash equivalents | | $ | | | $ | |
Restricted cash | |
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Accounts receivable, net of allowance for credit losses of $ | | | | | | |
Related party receivables and prepaid expenses | | | | | | |
Inventories, net | | | | | | |
Assets held for sale | | | | | | |
Prepaid expenses and other current assets | | | | | | |
Total current assets | |
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Property, plant and equipment, net of accumulated depreciation of $ | | | | | | |
Operating lease right-of-use assets, net | | | | | | |
Goodwill | | | | | | |
Intangible assets, net | | | | | | |
Other noncurrent assets | |
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Total assets | | $ | | | $ | |
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Liabilities and Stockholders' Equity | |
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Liabilities | |
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Current liabilities | | | | | | |
Current portion of long-term debt | | $ | | | $ | |
Accounts payable | | | | | | |
Related party payables | | | | | | |
Income tax payable | | | | | | |
Accrued liabilities | | | | | | |
Accrued compensation and benefits | | | | | | |
Accrued interest | | | | | | |
Customer deposits | | | | | | |
Deferred revenue | | | | | | |
Obligation for claim payment | | | | | | |
Current portion of finance lease liabilities | | | | | | |
Current portion of operating lease liabilities | | | | | | |
Total current liabilities | |
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Long-term debt, net of current maturities | | | | | | |
Finance lease liabilities, net of current portion | | | | | | |
Net defined benefit liability | | | | | | |
Deferred income tax liabilities | | | | | | |
Long-term income tax liabilities | | | | | | |
Operating lease liabilities, net of current portion | | | | | | |
Other long-term liabilities | | | | | | |
Total liabilities | | | | | | |
Commitments and Contingencies (Note 9) | |
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Stockholders' Equity | |
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Common stock, par value of $ | | | | | | |
Preferred stock, par value of $ | | | | | | |
Additional paid in capital | | | | | | |
Accumulated deficit | | | ( | | | ( |
Accumulated other comprehensive profit: | | | | | | |
Foreign currency translation adjustment | | | | | | ( |
Unrealized pension actuarial gains, net of tax | | | | | | |
Total accumulated other comprehensive profit | | | | | | |
Total stockholders' equity | | | | | | |
Total liabilities and stockholders' equity | | $ | | | $ | |
The accompanying notes are an integral part of these condensed consolidated and combined financial statements.
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XBP Global Holdings, Inc. and Subsidiaries
Condensed Consolidated and Combined Statements of Operations
For the three and six months ended June 30, 2026 (Successor) and June 30, 2025 (Predecessor)
(in thousands of United States dollars except share and per share amounts)
(Unaudited)
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| | Successor | | | Predecessor | ||||||||
| | Consolidated | | | Combined and Consolidated | ||||||||
| | Three Months Ended June 30, | | Six Months Ended June 30, | | | Three Months Ended June 30, | | Six Months Ended June 30, | ||||
| | 2026 | | 2026 | | | 2025 | | 2025 | ||||
Revenue | | $ | | | $ | | | | $ | | | $ | |
Related party revenue | | | | | | | | | | | | | |
Cost of revenue (exclusive of depreciation and amortization) | |
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Selling, general and administrative expenses (exclusive of depreciation and amortization) | |
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Depreciation and amortization | |
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Related party expense, net | |
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Operating profit (loss) | |
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Other expense (income), net: | |
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Interest expense, net | |
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Debt modification and extinguishment costs, net | |
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Sundry expense, net | |
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Other income, net | |
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Loss before reorganization items and income taxes | |
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Reorganization items, net | |
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Loss before income taxes | |
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Income tax expense (benefit) | |
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Net Loss | | $ | ( | | $ | ( | | | $ | ( | | $ | ( |
Net loss per common share | | | | | | | | | | | | | |
Basic and diluted | | | ( | | | ( | | | | | | | |
The accompanying notes are an integral part of these condensed consolidated and combined financial statements.
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XBP Global Holdings, Inc. and Subsidiaries
Condensed Consolidated and Combined Statements of Comprehensive Profit (Loss)
For the three and six months ended June 30, 2026 (Successor) and June 30, 2025 (Predecessor)
(in thousands of United States dollars except share and per share amounts)
(Unaudited)
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| | Successor | | | Predecessor | ||||||||
| | Consolidated | | | Combined and Consolidated | ||||||||
| | Three Months Ended June 30, | | Six Months Ended June 30, | | | Three Months Ended June 30, | | Six Months Ended June 30, | ||||
| | 2026 | | 2026 | | | 2025 | | 2025 | ||||
Net Loss | | $ | ( | | $ | ( | | | $ | ( | | $ | ( |
Other comprehensive income (loss), net of tax | | | | | | | | | | | | | |
Foreign currency translation adjustments | |
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Unrealized pension actuarial gains, net of tax | | | ( | | | ( | | | | | | | |
Total other comprehensive income (loss), net of tax | | | | | | | | | | ( | | | ( |
Comprehensive loss | | $ | ( | | | ( | | | $ | ( | | $ | ( |
The accompanying notes are an integral part of these condensed consolidated and combined financial statements.
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XBP Global Holdings, Inc. and Subsidiaries
Condensed Consolidated and Combined Statements of Stockholders’ Equity (Deficit)
For the three and six months ended June 30, 2026 (Successor) and June 30, 2025 (Predecessor)
(in thousands of United States dollars except share and per share amounts)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | |
| | Consolidated | ||||||||||||||||||
| | | | | | | | | | Accumulated Other | | | | | | | ||||
| | | | | | | | | | Comprehensive Profit | | | | | | | ||||
| | | | | | | | | | | | | Unrealized | | | | | | | |
| | | | | | | | | | Foreign | | Pension | | | | | | | ||
| | | | | | | | | | Currency | | Actuarial | | | | | | | ||
| | Common Stock | | Additional | | Translation | | Gains, | | Accumulated | | Total stockholders' | ||||||||
| | Shares | | Amount | | Paid in Capital | | Adjustment | | net of tax | | Deficit | | Equity | ||||||
Balances at January 1, 2026 (Successor) |
| | | $ | | | $ | | | $ | ( | | $ | | | $ | ( | | $ | |
Net loss January 1, 2026 to March 31, 2026 |
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Equity-based compensation |
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Foreign currency translation adjustment |
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Net unrealized pension actuarial gains, net of tax |
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RSUs vested | | | | | — | | | — | |
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Withholding of employee taxes on vested RSUs | | — | | | — | | | ( | | | — | | | — | | | — | | | ( |
Balances at March 31, 2026 (Successor) |
| | | $ | | | $ | | | $ | | | $ | | | $ | ( | | $ | |
Net loss April 1, 2026 to June 30, 2026 |
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Equity-based compensation |
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Foreign currency translation adjustment |
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Net unrealized pension actuarial gains, net of tax |
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RSUs vested | | | | | — | | | — | |
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Withholding of employee taxes on vested RSUs | | — | | | — | | | ( | | | — | | | — | | | — | | | ( |
Balances at June 30, 2026 (Successor) |
| | | $ | | | $ | | | $ | | | $ | | | $ | ( | | $ | |
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| | Combined and Consolidated | |||||||
| | | | | Accumulated Other | | | | |
| | | | Foreign | | | | ||
| | | | Currency | | Total | |||
| | Net Parent | | Translation | | Stockholders' | |||
| | Investment | | Adjustment | | Deficit | |||
Balances at January 1, 2025 (Predecessor) | | $ | ( | | $ | ( | | $ | ( |
Net profit January 1, 2025 to March 31, 2025 | | | | | | — | | | |
Foreign currency translation adjustment | | | — | | | ( | | | ( |
Equity-based compensation | | | | | | — | | | |
Net intercompany transactions with parent group entities | | | | | | — | | | |
Balances at March 31, 2025 (Predecessor) | | $ | ( | | $ | ( | | $ | ( |
Net loss April 1, 2025 to June 30, 2025 | | | ( | | | — | | | ( |
Foreign currency translation adjustment | | | — | | | ( | | | ( |
Equity-based compensation | | | | | | — | | | |
Net intercompany transactions with parent group entities | | | ( | | | — | | | ( |
Balances at June 30, 2025 (Predecessor) | | $ | ( | | $ | ( | | $ | ( |
The accompanying notes are an integral part of these condensed consolidated and combined financial statements.
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XBP Global Holdings, Inc. and Subsidiaries
Condensed Consolidated and Combined Statements of Cash Flows
For the six months ended June 30, 2026 (Successor) and June 30, 2025 (Predecessor)
(in thousands of United States dollars except share and per share amounts)
(Unaudited)
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| | Successor | | | Predecessor | ||
| | Consolidated | | | Combined and Consolidated | ||
| | Six Months Ended June 30, | | | Six Months Ended June 30, | ||
| | 2026 | | | 2025 | ||
Cash flows from operating activities | | | | | | | |
Net Loss | | $ | ( | | | $ | ( |
Adjustments to reconcile net loss to cash used in operating activities | | | | | | | |
Depreciation and amortization | | | | | | | |
Original issue discount, debt premium and debt issuance cost amortization | | | | | | | ( |
Reorganization items, net | | | — | | | | ( |
Interest on BR Exar AR Facility | | | — | | | | ( |
Debt modification and extinguishment loss (gain), net | | | — | | | | |
Provision for credit losses | | | ( | | | | ( |
Deferred income tax provision | | | ( | | | | |
Equity-based compensation expense | | | | | | | |
Unrealized foreign currency loss (gain) | |
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Loss (gain) on sale of assets | | | | | | | ( |
Payment-in-kind interest | | | | | | | |
Change in operating assets and liabilities, net of effect from acquisitions | |
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Accounts receivable | |
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Prepaid expenses and other current assets | | | | | | | ( |
Accounts payable and accrued liabilities | | | ( | | | | |
Related party receivables (payables) | | | ( | | | | |
Additions to outsourced contract costs | | | ( | | | | ( |
Net cash used in operating activities | |
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Cash flows from investing activities | |
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Purchase of property, plant and equipment | | | ( | | | | ( |
Additions to internally developed software | | | ( | | | | ( |
Proceeds from sale of assets | | | | | | | |
Net cash used in investing activities | |
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Cash flows from financing activities | |
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Cash paid for debt issuance costs | | | ( | | | | ( |
Cash paid for withholding taxes on vested RSUs | | | ( | | | | — |
Principal payments on finance lease obligations | | | ( | | | | ( |
Borrowings from other loans | | | | | | | |
Proceeds from Issuance of July 2030 Notes | | | | | | | — |
Proceeds from Super Senior Term Loan | | | | | | | — |
Proceeds from ABL Facility | | | | | | | — |
Repayments on ABL Facility | | | ( | | | | — |
Repayment of Second Lien Note | | | ( | | | | — |
Proceeds from DIP New Money Loans | | | — | | | | |
Borrowing under BR Exar AR Facility | | | — | | | | |
Repayments under BR Exar AR Facility | | | ( | | | | ( |
Borrowing under Amended BR Exar AR Facility | | | | | | | — |
Repayments under Amended BR Exar AR Facility | | | ( | | | | — |
Repayments on 2028 Term Loan Facilities | | | ( | | | | — |
Principal repayments on senior secured term loans and other loans | |
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Net cash provided by (used in) financing activities | |
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Effect of exchange rates on cash, restricted cash and cash equivalents | | | ( | | | | |
Net decrease in cash, restricted cash and cash equivalents | |
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Cash, restricted cash and cash equivalents | |
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Beginning of period | | | | | | | |
End of period | | $ | | | | $ | |
Supplemental cash flow data: | |
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Income tax payments, net of refunds received | | $ | | | | $ | |
Interest paid | | | | | | | |
Cash paid for reorganization items | | | — | | | | |
Noncash investing and financing activities: | | | | | | | |
Assets acquired through right-of-use arrangements | | | | | | | |
Amounts reclassified from property, plant, and equipment to fixed assets held-for-sale | | | | | | | — |
Accrued capital expenditures | | | | | | | |
The accompanying notes are an integral part of these condensed consolidated and combined financial statements.
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XBP Global Holdings, Inc. and Subsidiaries
Notes to the Condensed Consolidated and Combined Financial Statements
(in thousands of United States dollars except share and per share amounts or unless otherwise noted)
(Unaudited)
1. General
XBP Global Holdings, Inc. (the “Company” or “XBP Global”) is a multinational technology and services company powering intelligent workflows for organizations worldwide. The Company’s proprietary platforms, agentic AI-driven automation, and domain expertise across industries and the public and private sectors enable its clients’ digital transformations and workflows. The Company’s automation solutions allow global organizations to address challenges resulting from the massive amounts of data obtained and created from their operations. The Company’s solutions address the life cycle of transaction processing and enterprise information management, from enabling payment gateways and data exchanges across multiple systems, to matching inputs against contracts and handling exceptions, to ultimately depositing payments and distributing communications.
The Company conducts its operations through
On July 29, 2025, the Company finalized its acquisition of Exela Technologies BPA, LLC (n/k/a XBP Americas, LLC, collectively with its subsidiaries, “BPA”, and such acquisition, the “Business Combination”) pursuant to a Membership Interest Purchase Agreement dated July 3, 2025 (the “MIPA”). The consideration for the sale was $
The Business Combination was accounted for as a reverse acquisition in accordance with Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification Topic 805, Business Combinations (“ASC 805”). Under this method of accounting, XBP Europe Holdings, Inc. (now XBP Global) was treated as the “acquired” company for financial reporting purposes, even though BPA survives as an indirect wholly-owned subsidiary of XBP Global.
Chapter 11 Reorganization
On March 3, 2025 (the “Petition Date”), BPA along with certain affiliates (the “BPA Debtors”) commenced the Chapter 11 Cases in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”). On April 16, 2025, the BPA Debtors entered into a Plan Support Agreement (as amended, the “Plan Support Agreement”) with an ad hoc group of holders of certain
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On July 29, 2025 (the “Emergence Date”), BPA consummated the Restructuring and emerged from bankruptcy having satisfied or waived all the conditions set forth in the Plan. In accordance with ASC 852, Reorganizations (“ASC 852”), BPA was required to apply fresh start accounting upon its emergence from bankruptcy. The Company evaluated transaction activity of BPA between the Emergence Date and July 31, 2025 and concluded that an accounting convenience date of July 31, 2025 (the “Convenience Date”) was appropriate for the adoption of fresh start accounting which resulted in BPA becoming a new entity for financial reporting purposes as of the Convenience Date.
On the Emergence Date, in connection with the consummation of the Restructuring and pursuant to the Plan:
| ● | The Company’s Third Amended and Restated Certificate of Incorporation was filed with the Delaware Secretary of State and became effective increasing authorized shares to |
| ● | The Company issued |
| ● | The Company entered into a Tax Funding Agreement (the “Tax Funding Agreement”) with the Reorganized Debtors (the BPA Debtors following the Restructuring), as Agent, and the Consenting ETI Parties. The Tax Funding Agreement provides for the Consenting ETI Parties to fund certain Transaction Tax Liabilities (as defined in the Plan) (up to an initial funding obligation of $ |
| ● | The Reorganized Debtors entered into exit financing arrangements (refer to Note 6, Long-term Debt and Credit Facilities), including: |
| o | An Indenture reflecting the issuance of $ |
| o | The Super Senior Term Loan consisting of $ |
| o | An Amended and Restated Credit and Security Agreement with BRF Finance Co. LLC, as Agent, and the lenders party thereto, amending and restating the Second Lien Note, dated February 27, 2023, as described in Note 6, Long-term Debt and Credit Facilities, providing for term loans bearing interest at Term SOFR plus |
| o | The ABL Facility, as described in Note 6, Long-term Debt and Credit Facilities, with MidCap Funding IV Trust as Agent and Lender, providing a $ |
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| by ABL Priority Collateral (as defined therein), with terms including interest at SOFR plus Applicable Margin ( |
In addition, on the Emergence Date, the indenture dated as of December 9, 2021 (as amended, supplemented or otherwise modified from time to time), among Exela Intermediate LLC and Exela Finance Inc., as issuers, the guarantors party thereto (including certain of the Debtors, as defined therein), and U.S. Bank Trust Company, National Association, as trustee and collateral agent, governing the
As a result of the Restructuring and the Business Combination, the Company was no longer considered a “controlled company” under the rules of The Nasdaq Stock Market LLC. Prior to the Restructuring and the Business Combination, an indirect subsidiary of ETI owned approximately
Fresh start accounting
Upon emergence from the Restructuring, the Predecessor met the criteria and was required to adopt fresh start accounting in accordance with ASC 852, Reorganizations, which on the Emergence Date resulted in a new entity, the Successor, for financial reporting purposes, with no beginning retained earnings or deficit as of the fresh start reporting date. In accordance with fresh start accounting requirements new fair values were established for BPA’s assets, liabilities and equity as of the Convenience Date (July 31, 2025, as discussed above), and therefore certain values and operational results of the condensed consolidated financial statements subsequent to July 31, 2025 are not comparable to those in the Company’s condensed consolidated financial statements prior to and including July 31, 2025. The Convenience Date fair values of the Successor’s assets and liabilities differ materially from their recorded values as reflected on the historical balance sheet of the Predecessor as presented in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the SEC on March 31, 2026 (“2025 Form 10-K”).
Reorganization Items, net
Reorganization items represent (i) expenses incurred relating to the Chapter 11 Cases as a direct result of the Plan, (ii) gains or losses from liabilities settled and (iii) fresh start accounting adjustments, and are recorded in “Reorganization items, net” in the Company’s unaudited condensed consolidated and combined statements of operations. Contractual interest expense from the Petition Date through the Emergence Date associated with BPA’s 2026 Indentures was accrued or recorded in the condensed consolidated and combined statements of operations in interest expense, net. Professional service provider charges associated with reorganization that were incurred before the Petition Date are recorded in selling, general and administrative in the condensed consolidated and combined statements of operations. The Company recorded an $
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The following table summarizes the losses (gains) on reorganization items, net:
| | | | | | |
| | Predecessor | ||||
| | Combined and Consolidated | ||||
| | Three Months Ended June 30, | | Six Months Ended June 30, | ||
| | 2025 | | 2025 | ||
Legal and professional fees | | $ | | | $ | |
Derecognition of unamortized debt discount, premium and issuance costs | | | — | | | ( |
Total reorganization items, net | | $ | | | $ | ( |
Basis of Presentation
Financial information prior to the Emergence Date is referred to as “Predecessor” company information, which reflects the combined historical financial statements of BPA prepared using BPA’s previous combined basis of accounting. The financial information beginning August 1, 2025 is referred to as “Successor” company information and reflects the condensed consolidated financial statements of XBP Global, including the financial statement effects of recording fair value adjustments and the capital structure resulting from the Business Combination and fresh start accounting of BPA. Black lines have been drawn to separate the Successor’s financial information from that of the Predecessor since their financial statements are not comparable as a result of the application of acquisition accounting and the Company’s capital structure resulting from the Business Combination and fresh start accounting of BPA.
Successor:
The accompanying condensed consolidated financial statements as of and for the period January 1, 2026 to June 30, 2026 include the condensed consolidated balance sheets, and statements of operations, comprehensive profit (loss), changes in stockholders’ equity, and cash flows of XBP Global. All significant intercompany items and transactions have been eliminated in consolidation. In the opinion of management, the accompanying condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the United States Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles (“GAAP”) have been omitted pursuant to the SEC’s rules and regulations. However, management believes that the disclosures contained herein are adequate to make the information presented not misleading. In the opinion of management, the condensed consolidated financial statements reflect all adjustments (which are of a normal recurring nature) necessary to present fairly the Company’s financial position, results of operations and cash flows. The results of operations and cash flows for the period from January 1, 2026 to June 30, 2026 are not necessarily indicative of the results of operations or cash flows that may be expected for future periods.
The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Predecessor:
The condensed consolidated and combined BPA financial statements (the “BPA financial statements”) include the accounts of the wholly-owned direct and indirect subsidiaries and affiliates of BPA. For the period January 1, 2025 to June 30, 2025 that is covered by the BPA financial statements, BPA operated as part of ETI. The accompanying condensed consolidated and combined financial statements have been prepared from ETI’s historical accounting records and are presented on a stand-alone basis as if BPA’s operations had been conducted independently from ETI. The operations of BPA are in various legal entities either with a direct ownership relationship or affiliate relationship through ETI. Accordingly, ETI and its subsidiaries’ net parent investment in these operations is shown in lieu of a statement of member’s equity in the condensed consolidated and combined financial statements. The condensed consolidated and
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combined financial statements and related notes to the condensed consolidated and combined financial statements have been prepared in accordance with GAAP.
The condensed consolidated and combined statements of operations and comprehensive profit (loss) include all revenues and costs directly attributable to BPA, including costs for facilities, functions and services used by BPA. Costs for certain functions and services delivered by ETI are directly charged to BPA based on specific identification when possible or based on a reasonable allocation driver or other allocation methods. Current and deferred income taxes have been determined based on the stand-alone results of BPA. However, because BPA filed as part of ETI’s tax group in certain jurisdictions, BPA’s actual tax balances may differ from those reported. BPA’s portion of its domestic and certain income taxes for jurisdictions outside the United States are deemed to have been settled in the period the related tax expense was recorded.
All intercompany transactions and balances within BPA have been eliminated. The Predecessor financial statements include assets and liabilities that have been determined to be specifically identifiable or otherwise attributable to BPA. Transactions with affiliated companies owned by ETI or its subsidiaries which are not a part of BPA are reflected as related party transactions.
All of the allocations and estimates in the condensed consolidated and combined financial statements are based on assumptions that management believes are reasonable. However, the condensed consolidated and combined financial statements included herein may not be indicative of the financial position, results of operations, and cash flows of BPA if BPA had been a separate, stand-alone entity during the period presented.
Actual costs that would have been incurred if BPA had been a stand-alone business would depend on multiple factors, including organizational structure and strategic decisions.
As described above, as a result of the application of fresh start accounting and the effects of the implementation of the Plan, the condensed consolidated financial statements after the Emergence Date are not comparable with the condensed consolidated and combined financial statements on or before the Emergence Date.
As part of the Business Combination, the Company reevaluated its segment reporting, resulting in the presentation of two businesses: Applied Workflow Automation and Technology.
Prior periods have been recast to reflect the Company’s current segment presentation. See Note 14, Segment Information.
Certain prior period amounts have been reclassified to conform to the 2026 presentation.
Liquidity
The Company incurred a net loss of $
In response to these conditions impacting liquidity, management has taken, and plans to take, actions intended to enhance the Company’s liquidity. The Company has executed cost savings initiatives across its operations, including a payroll reduction program and the restructuring of its European operations described below. On July 1, 2026, the Company sold $
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| • | an equity financing, although the Company had not entered into any agreement with respect to such financing as of the date these condensed consolidated financial statements were issued, |
| • | sale of its Baronsmede property in Egham, United Kingdom, which was classified as held for sale as of June 30, 2026 and is described below, and other real properties, |
| • | evaluation of strategic alternatives intended to accelerate value realization and optimize its capital structure, see Note 15, Subsequent Events, and |
| • | refinancing of the existing debt facilities on more favorable terms. |
Management has evaluated the Company’s forecasted cash flows from operations, its cash and cash equivalents on hand, amounts available for borrowing under its financing arrangements and the actions and initiatives described above, and believes that the Company will have sufficient liquidity to fund its operations and to meet its obligations as they become due for at least twelve months from the date these condensed consolidated financial statements were issued. The Company’s liquidity assessment reflects estimates and assumptions regarding future operating results, the timing and amount of proceeds from the actions described above and the Company’s continued compliance with, or its ability to obtain waivers or amendments of, the financial covenants in its financing agreements. These estimates and assumptions are subject to risks and uncertainties, many of which are outside the Company’s control, and actual results may differ materially from those currently expected. There can be no assurance that the actions described above will be completed on the anticipated timeline or on acceptable terms, or at all, or that they will generate the liquidity benefits currently expected
Net Profit (Loss) per Share
Earnings per share (“EPS”) is computed by dividing net profit (loss) attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted EPS gives effect to the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock, using the more dilutive of the two-class method and the if-converted method in the period of earnings. The two-class method is an earnings allocation method that determines earnings per share (when there are earnings) for common stock and participating securities. The if-converted method assumes all convertible securities are converted into common stock. Diluted EPS excludes all dilutive potential shares of common stock if their effect is anti-dilutive (i.e., if included, would reduce the net loss per share).
As the Company experienced a net loss for the three and six months ended June 30, 2026 (Successor), the Company did not include the effect of
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The following table provides details underlying the Company’s loss per basic and diluted share calculation for the three and six months ended June 30, 2026 (Successor):
| | | | | | |
| | Successor | ||||
| | Consolidated | ||||
| | Three Months Ended June 30, | | Six Months Ended June 30, | ||
| | 2026 | | 2026 | ||
Net loss attributable to common stockholders (A) | | $ | ( | | $ | ( |
Weighted average common shares outstanding – basic and diluted (B) | | | | | | |
Loss Per Share: | | | | | | |
Basic and diluted (A/B) | | $ | ( | | $ | ( |
Restructuring of European Operations
In the second quarter of 2026, the Company committed to a restructuring program across its European operations, comprising the consolidation of smaller legal entities and business units into larger operating units, under which
Assets Held for Sale
In the second quarter of 2026, management committed to a plan to sell the Company's Baronsmede property in Egham, United Kingdom, previously used for management team purposes, and engaged a commercial real estate broker to market the property. The Company has received multiple offers ranging from £
Assets held for sale are measured at the lower of carrying amount or fair value less costs to sell. As of June 30, 2026, the carrying amount of $
2. Significant Accounting Policies
The information presented below supplements the Significant Accounting Policies information presented in the 2025 Form 10-K.
Use of Estimates in Preparation of the Condensed Consolidated and Combined Financial Statements
Estimates and judgments relied upon in preparing these condensed consolidated and combined financial statements include, among others, revenue recognition for multiple element arrangements, allowance for expected credit losses, income taxes, depreciation, amortization, employee benefits, equity-based compensation, contingencies,
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goodwill, intangible assets, right of use assets, pension obligations, pension assets, and asset and liability valuations. The Company regularly assesses these estimates and records changes in estimates in the period in which they become known. The Company bases its estimates on historical experience and various other assumptions that the Company believes to be reasonable under the circumstances. Actual results could differ from those estimates.
Restructuring Charges
Costs and liabilities associated with management-approved restructuring activities are recognized when they are incurred. One-time employee termination costs are recognized at the time of communication to employees, unless future service is required, in which case the costs are recognized ratably over the future service period. Ongoing employee termination benefits are recognized as a liability when it is probable that a liability exists and the amount is reasonably estimable. Restructuring charges are recognized as an operating expense within the condensed consolidated statements of operations and related liabilities are recorded within accrued liabilities on the condensed consolidated balance sheets. The Company periodically evaluates and, if necessary, adjusts its estimates based on currently available information. The liability for the restructuring charge associated with an exit or disposal activity is measured initially at its fair value.
Revenue Recognition
The Company accounts for revenue by first evaluating whether a performance obligation exists. A performance obligation is a promise in a contract to transfer a distinct good or service to a customer and is the unit of account. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods or providing services. The contract transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. All of the Company’s material sources of revenue are derived from contracts with customers, primarily relating to the provision of business and transaction processing services and sales of recurring software licenses and professional services within each of the Company’s segments. The Company does not have any significant extended payment terms, as payment is typically received shortly after goods are delivered or services are provided.
Nature of Services
The Company’s primary performance obligations are to stand ready to provide various forms of workflow automation services, consisting of a series of distinct services, that are substantially the same and have the same pattern of transfer over time, and accordingly are combined into a single performance obligation. The Company’s obligation to its customers is typically to perform an unknown or unspecified quantity of tasks and the consideration received is contingent upon the customers’ use (i.e., number of transactions processed, requests fulfilled, etc.); as such, the total transaction price is variable. The Company allocates variable fees to the single performance obligation charged to the distinct service period in which the Company has the contractual right to bill under the contract.
Revenue from the sale of software licenses is recognized as a single performance obligation at the point in time that the software license is delivered to the customer. Perpetual licenses or non-cancelable licenses are granted for a non-refundable fee, which are recognized at a point in time. No significant obligations or contingencies exist with regard to delivery, customer acceptance or rights of return at the time revenue is recognized. Professional services revenue consists of implementation services for new customers, or implementations of new products for existing customers. Professional services are typically sold on a time-and-materials basis and billed monthly based on actual hours incurred.
Revenue from the sale of hardware solutions is recognized on a point in time basis and related maintenance is recognized ratably over the contractual term.
Disaggregation of Revenues
The Company is organized into
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| | | | | | | | | | | | | | | | | | | |
| | Successor | | | Predecessor | ||||||||||||||
| | Consolidated | | | Combined and Consolidated | ||||||||||||||
| | Three Months Ended June 30, 2026 | | | Three Months Ended June 30, 2025 | ||||||||||||||
| | Applied Workflow | | Technology | | Total | | | Applied Workflow | | Technology | | Total | ||||||
U.S.A. |
| $ | | | $ | | | $ | | | | $ | | | $ | |
| $ | |
EMEA | |
| | |
| | |
| | | |
| — | |
| — | |
| — |
Other | |
| | |
| — | |
| | | |
| | |
| — | |
| |
Total |
| $ | | | $ | | | $ | | | | $ | | | $ | |
| $ | |
| | | | | | | | | | | | | | | | | | | |
| | Successor | | | Predecessor | ||||||||||||||
| | Consolidated | | | Combined and Consolidated | ||||||||||||||
| | Six Months Ended June 30, 2026 | | | Six Months Ended June 30, 2025 | ||||||||||||||
| | Applied Workflow | | Technology | | Total | | | Applied Workflow | | Technology | | Total | ||||||
U.S.A. |
| $ | | | $ | | | $ | | | | $ | | | $ | | | $ | |
EMEA | | | | | | | | | | | | | — | | | — | | | — |
Other | |
| | |
| — | |
| | | | | | |
| — | | | |
Total |
| $ | | | $ | | | $ | | | | $ | | | $ | |
| $ | |
Contract Balances
The following table presents contract assets, contract liabilities and contract costs recognized at June 30, 2026 (Successor), December 31, 2025 (Successor) and January 1, 2025 (Predecessor):
| | | | | | | | | | |
| | Successor | | | Predecessor | |||||
| | Consolidated | | | Combined and Consolidated | |||||
| | June 30, | | December 31, | | | January 1, | |||
| | 2026 | | 2025 | | | 2025 | |||
Accounts receivable, net | | $ | | | $ | | | | $ | |
Deferred revenues (1) | |
| |
| | | | |
| |
Customer deposits | |
| |
| | | | |
| |
Costs to obtain and fulfill a contract | | | | | | | | | | |
| (1) | Includes $ |
The following table describes the changes in the allowance for expected credit losses for the three and six months ended June 30, 2026 (Successor) and June 30, 2025 (Predecessor) (all related to accounts receivables):
| | | | | | | | | | | |
| | Successor | | | Predecessor | ||||||
| | Consolidated | | | Combined and Consolidated | ||||||
| | Three Months Ended June 30, | Six Months Ended June 30, | | | Three Months Ended June 30, | Six Months Ended June 30, | ||||
| | 2026 | 2026 | | | 2025 | 2025 | ||||
Balance of the allowance for expected credit losses at the beginning of the period | | $ | | $ | | | | $ | | $ | |
Provision for expected loss | | | | | | | | | | | |
Write-off charged against the allowance | | | ( | | ( | | | | ( | | ( |
Recoveries collected | | | ( | | ( | | | | ( | | ( |
Foreign currency exchange rate adjustment | | | | | ( | | | | | | |
Balance of the allowance for expected credit losses at the end of the period | | $ | | $ | | | | $ | | $ | |
Accounts receivable, net includes $
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Deferred revenues relate to payments received in advance of performance under a contract. A significant portion of this balance relates to maintenance contracts or other service contracts where the Company received payments for upfront conversions or implementation activities which do not transfer a service to the customer but rather are used in fulfilling the related performance obligations that transfer over time. This advance consideration received from customers is deferred over the contract term. The Company recognized revenue of $
Costs incurred to obtain and fulfill contracts are deferred and presented as part of intangible assets, net and expensed on a straight-line basis over the estimated benefit period. The Company recognized $
Customer deposits consist primarily of amounts received from customers in advance for postage. These advanced postage deposits are used to cover the costs associated with postage, with the corresponding postage revenue being recognized as services are performed.
Performance Obligations
At the inception of each contract, the Company assesses the goods and services promised in its contracts and identifies each distinct performance obligation. The majority of the Company’s contracts have a single performance obligation, as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts. For the majority of the Company’s business and transaction processing service contracts, revenues are recognized as services are provided based on an appropriate input or output method, typically based on the related labor or transactional volumes.
Certain of the Company’s contracts have multiple performance obligations, including contracts that combine software implementation services with post-implementation customer support. For contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation using its best estimate of the standalone selling price of each distinct good or service in the contract. The primary method used to estimate standalone selling price is the expected cost plus a margin approach, under which the Company estimates its expected costs of satisfying a performance obligation and adds an appropriate margin for that distinct good or service. The Company also uses the adjusted market approach whereby it estimates the price that customers in the market would be willing to pay. In assessing whether to allocate variable consideration to a specific part of the contract, the Company considers the nature of the variable payment and whether it relates specifically to its efforts to satisfy a specific part of the contract. Certain of the Company’s software implementation performance obligations are deemed satisfied at a point in time, typically when customer acceptance is obtained.
When evaluating the transaction price, the Company analyzes, on a contract-by-contract basis, all applicable variable consideration. The nature of the Company’s contracts gives rise to variable consideration, including volume discounts, contract penalties, and other similar items that generally decrease the transaction price. The Company estimates these amounts based on the expected amount to be provided to customers and reduces revenues recognized. The Company does not anticipate significant changes to its estimates of variable consideration.
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The Company includes reimbursements from customers, such as postage costs, in revenue, while the related costs are included in cost of revenue.
Transaction Price Allocated to the Remaining Performance Obligations
In accordance with optional exemptions available under GAAP, the Company does not disclose the value of unsatisfied performance obligations for (a) contracts with an original expected length of
| | | |
Estimated Remaining Fixed Consideration for Unsatisfied | |||
| | | |
Remainder of 2026 | | $ | |
2027 | |
| |
2028 | |
| |
2029 | |
| |
2030 | |
| |
2031 and thereafter | |
| |
Total |
| $ | |
3. New Accounting Pronouncements
Recently Adopted Accounting Guidance
Effective January 1, 2026 the Company adopted ASU 2024-04, Debt-Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments, which amends ASC 470-20 to clarify the requirements related to accounting for the settlement of a debt instrument as an induced conversion. This ASU is intended to improve the relevance and consistency in application of the induced conversion guidance in Subtopic 470-20 for (a) convertible debt instruments with cash conversion features and (b) debt instruments that are not currently convertible. The adoption of this standard did not have a material impact on our condensed consolidated financial statements and related disclosures.
Effective January 1, 2026 the Company adopted ASU 2025-05, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. This ASU provides 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 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. The adoption of this standard did not have a material impact on our condensed consolidated financial statements and related disclosures.
Recent Accounting Pronouncements Not Yet Effective
In May 2026, the FASB issued ASU 2026-02, Environmental Credits and Environmental Credit Obligations (topic 818), which establishes accounting requirements for environmental credits and environmental credit obligations (ECOs). The ASU introduces a comprehensive model that establishes recognition, measurement, presentation, and disclosure requirements for (1) environmental credits and, when applicable, (2) compliance obligations that may be settled by using environmental credits. An entity’s accounting for environmental credits under the standard differs on the basis of its expected use of the credits. Determinations of whether the credit will be used for compliance, exchange, or voluntary purposes affect the recognition and subsequent measurement of the credits. Under the ASU, an entity must
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disclose its intended use of the credits as well as the financial statement impact of any changes in its intent. The ASU also prescribes the accounting for ECOs and their measurement on the basis of the environmental credits the entity intends to use to settle such obligations. For public companies, the ASU will become effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted. The Company is currently assessing the impact this ASU adoption will have on its consolidated financial statements.
In April 2026, the FASB issued ASU 2026-01, Equity (topic 505): Initial Measurement of Paid-in-Kind Dividends on Equity-Classified Preferred Stock, which adds guidance on how an issuer should measure paid-in-kind (PIK) dividends on equity-classified preferred stock. Under the amendments, entities are required to measure such dividends by multiplying the stated PIK dividend rate by the liquidation preference of the shares. The ASU’s requirements are limited to the measurement of PIK dividends and do not address recognition. The ASU’s amendments are effective for all entities for annual reporting periods beginning after December 15, 2026, and for interim reporting periods within those annual reporting periods. The Company is currently assessing the impact this ASU adoption will have on its consolidated financial statements.
In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which is intended to provide more detailed information about specified categories of expenses (purchases of inventory, employee compensation, depreciation and amortization) included in certain expense captions presented on the consolidated statement of operations. This new standard is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The amendments may be applied either (1) prospectively to financial statements issued for periods after the effective date of this ASU or (2) retrospectively to all prior periods presented in the consolidated financial statements. The Company is currently assessing the impact this ASU adoption will have on its consolidated financial statements.
In May 2025, the FASB issued ASU 2025-03, Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity, which revises the guidance in ASC 805 on identifying the accounting acquirer in a business combination in which the legal acquiree is a variable interest entity (“VIE”). This ASU is intended to improve comparability between business combinations that involve VIEs and those that do not. Under this ASU, a reporting entity involved in a business combination effected primarily by the exchange of equity interests must consider the factors in ASC 805-10-55-12 through 55-15 to determine which entity is the accounting acquirer regardless of whether the legal acquiree is a VIE. More specifically, when considering those factors, the reporting entity can determine that a transaction in which the legal acquiree is a VIE represents a reverse acquisition (in which the legal acquirer is identified as the acquiree for accounting purposes). As a result, comparability is increased with business combinations in which the legal acquiree is a VIE. This ASU is effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years. Early adoption is permitted. The amendments in this ASU must be applied prospectively to any business combination that occurs after the initial adoption date. The Company does not expect the adoption of this standard to have a material impact on the consolidated financial statements.
In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, to modernize the accounting guidance for the costs to develop software for internal use. The standard applies to costs incurred to develop or obtain software for internal use. ASU 2025-06 amends the existing standard that refers to various stages of a software development project to align better with current software development methods, such as agile programming. Under the new standard, entities will commence capitalizing eligible costs when (i) management has authorized and committed to funding the software project, and (ii) it is probable that the project will be completed, and the software will be used to perform the function intended. The new standard also supersedes the guidance related to costs incurred to develop a website. The ASU’s amendments are effective for all entities for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. The guidance can be applied on a prospective basis, a modified basis for in-process projects or on a retrospective basis. The Company is currently assessing the impact this ASU adoption will have on its consolidated financial statements.
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In September 2025, the FASB issued ASU 2025-07, Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract. This ASU expands the population of contracts that are excluded from the scope of derivative accounting in ASC 815. It also clarifies that the revenue guidance in ASC 606 initially applies to share-based noncash consideration received from a customer for the transfer of goods or services. This ASU is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods, with early adoption permitted. The Company does not expect the adoption of this standard to have a material impact on the consolidated financial statements.
In November 2025, the FASB issued ASU 2025-08, Purchased Loans, which amends the guidance in ASC 326 on the accounting for certain purchased loans. Under the ASU, entities must account for acquired loans (excluding credit cards) that meet certain criteria at acquisition by recognizing them at their purchase price plus an allowance for expected credit losses. The ASU’s amendments align the accounting for purchased seasoned loans with the treatment of financial assets purchased with more-than-insignificant credit deterioration since origination. This ASU is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods, with early adoption permitted. The Company does not expect the adoption of this standard to have a material impact on the consolidated financial statements.
In November 2025, the FASB issued ASU 2025-09, Hedge Accounting Improvements, which amends certain aspects of the hedge accounting guidance in ASC 815. In addition to addressing stakeholder concerns, the amendments are intended to more closely align hedge accounting with the economics of an entity’s risk management activities. The main amendments relate to cash flow hedging, but some of the amendments affect certain fair value and net investment hedges. This ASU is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods, with early adoption permitted. The Company does not expect the adoption of this standard to have a material impact on the consolidated financial statements.
In December 2025, the FASB issued ASU 2025-10, Accounting for Government Grants Received by Business Entities, which adds guidance to ASC 832 on the recognition, measurement, and presentation of government grants. ASC 832 as originally promulgated contained only disclosure requirements concerning the receipt of government assistance by business entities. In the absence of such guidance, many for-profit entities historically have analogized to other GAAP, including IAS 20 or ASC 958-605, when accounting for government grants. This ASU is effective for annual reporting periods beginning after December 15, 2028, and interim reporting periods within those annual reporting periods, with early adoption permitted. The Company does not expect the adoption of this standard to have a material impact on the consolidated financial statements.
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, which is intended to improve the navigability of the guidance in ASC 270 and clarify when it applies. Under the amendments, an entity is subject to ASC 270 if it provides “interim financial statements and notes in accordance with GAAP.” The ASU also addresses the form and content of such financial statements, adds lists to ASC 270 of the interim disclosures required by all other Codification topics, and establishes a principle under which an entity must “disclose events since the end of the last annual reporting period that have a material impact on the entity.” The amendments in ASU 2025-11 are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. The Company is currently assessing the impact this ASU adoption will have on its condensed consolidated interim financial statements.
4. Business Combination
On July 3, 2025, pursuant to the MIPA, a wholly owned subsidiary of the Company agreed to purchase, subject to certain terms and conditions, BPA. The consideration for the sale was $
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Europe Holdings, Inc.’s definitive proxy statement filed with the SEC on July 15, 2025. On July 29, 2025, BPA consummated the transaction under the Plan and emerged from bankruptcy having satisfied or waived all the conditions set forth in the Plan and therefore, the conditions subsequent to the MIPA were cleared and the acquisition transaction was deemed closed from an accounting perspective on July 29, 2025.
Under ASC 805, Business Combinations, BPA was determined as the accounting acquirer based on the following predominant factors: following the Emergence Date BPA’s former noteholders (who received the Company’s Common Stock as part of the Plan), had the largest portion of voting rights in the Company relative to the owners of the Company’s Common Stock prior to the Emergence Date, following the Emergence Date, the Company’s
In connection with the Business Combination, certain of Company’s subsidiaries acquired debt facilities totaling $
The acquired assets and assumed liabilities of XBP Europe Holdings, Inc. were recorded at their estimated fair values. The purchase price allocation for the Business Combination is preliminary and subject to change within the respective measurement period, which will not extend beyond one year from the acquisition date. Measurement period adjustments will be recognized in the reporting period in which the adjustment amounts are determined.
The following table summarizes the consideration paid for XBP Europe Holdings, Inc. by BPA for accounting purposes and the preliminary fair value of the assets acquired and liabilities assumed as of the Convenience Date, including adjustments made in the last three months of 2025 (measurement period adjustments) with a corresponding change to goodwill. There were no adjustments made during the three and six months ended June 30, 2026.
| | | | | | | | | |
| | Amounts Recognized | | Measurement Period Adjustments (a) | | Amounts Recognized as of Convenience Date (as adjusted) | |||
Cash and cash equivalents | | $ | | | $ | — | | $ | |
Accounts receivable | | | | | | — | | | |
Inventory | | | | | | — | | | |
Prepaid expenses and other current assets | | | | | | | (c) | | |
Property, plant and equipment | | | | | | — | | | |
Right-of-use assets | | | | | | — | | | |
Deferred income tax assets | | | | | | ( | (c) | | |
Related party long term notes receivable | | | | | | — | | | |
Other noncurrent assets | | | | | | — | | | |
Intangible assets, net | | | | | | — | | | |
Implied goodwill | | | | | | | (b),(c) | | |
Total identifiable assets acquired | | $ | | | $ | ( | | $ | |
Liabilities Assumed: | | | | | | | | | |
Accounts payable | | | | | | — | | | |
Related party payables | | | | | | — | | | |
Accrued liabilities | | | | | | | (b),(c) | | |
Accrued compensation and benefits | | | | | | — | | | |
Customer deposits | | | | | | — | | | |
Deferred revenue | | | | | | — | | | |
Operating lease liabilities | | | | | | — | | | |
Long-term debts | | | | | | — | | | |
Related party notes payable | | | | | | — | | | |
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Deferred tax liabilities | | | | | | — | | | |
Pension liabilities | | | | | | ( | (b) | | |
Other long-term liabilities | | | | | | — | | | |
Total liabilities assumed | | $ | | | $ | ( | | $ | |
Total Consideration | | $ | | | $ | — | | $ | |
| (a) | The change in the estimated fair value is primarily to better reflect market participant assumptions about facts and circumstances existing as of the Convenience Date. The measurement period adjustments did not result from intervening events subsequent to the Convenience Date. |
| (b) | As adjusted, comprised of a $ |
| (c) | As adjusted, comprised of a $ |
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The identifiable intangible assets include trade name and trademarks, customer relationships and internally developed software. Trade name and trademarks were valued using the Income Approach, specifically the RfR method. Customer relationships were valued using the Income Approach, specifically the Multi-Period Excess Earnings method. Internally developed software was valued based on the replacement cost method under the cost approach. All of these intangibles acquired represent a Level 3 measurement as they are based on unobservable inputs reflecting the Company’s management’s own assumptions about the inputs used in pricing the asset or liability at fair value.
| | | | | | |
| | Weighted Average | | | ||
| | (in years) | | Fair value | ||
Trade name and trademarks | | | | $ | | |
Customer relationships | | | | | | |
Internally developed software | | | | | | |
| | | | | $ | |
As of the date of the Business Combination, the weighted-average useful life of total identifiable intangible assets acquired in the Business Combination, excluding goodwill, was
The Company expected to realize revenue synergies, leverage, brand awareness, stronger margins, greater free cash flow generation, and expand its existing sales channels, and utilize the existing workforce. The Company also anticipates opportunities for growth through the ability to leverage additional future services and capabilities. These factors, among others, contributed to a purchase price in excess of the estimated fair value of XBP Europe Holdings, Inc.’s identifiable net assets assumed, and as a result, the Company has recorded goodwill in connection with this acquisition. The Company engaged a third-party valuation firm to aid management in its analysis of the fair value of the assets and liabilities. All estimates, key assumptions, and forecasts were either provided by or reviewed by the Company.
Transaction Costs
The Company incurred approximately $
5. Intangible Assets and Goodwill
Intangible Assets
Intangible assets are stated at the Convenience Date fair values less accumulated amortization as of June 30, 2026 (Successor) and consist of the following:
| | | | | | | | | |
| | Successor | |||||||
| | Consolidated | |||||||
| | June 30, 2026 | |||||||
| | Gross Carrying | | Accumulated | | Intangible | |||
| | Amount (a) | | Amortization | | Asset, net | |||
Customer relationships | | $ | | | $ | ( | | $ | |
Trade names—indefinite-lived (b) | | | | | | — | | | |
Trade names—others (c) | | | | | | ( | | | |
Outsourced contract costs | | | | | | ( | | | |
Internally developed software | | | | | | ( | | | |
Purchased software | | | | | | ( | | | |
Intangibles, net | | $ | | | $ | ( | | $ | |
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| | | | | | | | | |
| | Successor | |||||||
| | Consolidated | |||||||
| | December 31, 2025 | |||||||
| | Gross Carrying | | Accumulated | | Intangible | |||
| | Amount (a) | | Amortization | | Asset, net | |||
Customer relationships | | $ | | | $ | ( | | $ | |
Trade names—indefinite-lived (b) | | | | | | — | | | |
Trade names—others (c) | | | | | | ( | | | |
Outsourced contract costs | | | | | | ( | | | |
Internally developed software | | | | | | ( | | | |
Purchased software | | | | | | ( | | | |
Intangibles, net | | $ | | | $ | ( | | $ | |
| (a) | Amounts include intangible assets acquired in business combinations and asset acquisitions. |
| (b) | The carrying amounts of trade names—indefinite-lived as of June 30, 2026 (Successor) and December 31, 2025 (Successor) represent indefinite-lived intangible assets and are net of accumulated impairment losses of $ |
| (c) | The carrying amounts of trade names—others as of June 30, 2026 (Successor) and December 31, 2025 (Successor) represent definite-lived intangible assets and are net of accumulated impairment losses of $ |
Aggregate amortization expense related to intangible assets was $
Estimated intangibles amortization expense for the next five years and thereafter consists of the following:
| | | |
| | Estimated | |
| | Amortization | |
| | Expense | |
Remainder of 2026 | | $ | |
2027 | | | |
2028 | | | |
2029 | | | |
2030 | | | |
2031 and thereafter | | | |
Total | | $ | |
Goodwill
The Company’s operating segments are significant strategic business units that align its products and services with how it manages its business, approaches the markets and interacts with customers. The Company is organized into
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Goodwill by reporting segment consists of the following:
| | | | | | | | | | | | | | | | | | |
| | Successor | ||||||||||||||||
| | Consolidated | ||||||||||||||||
| | Balances at January 1, | | Additions | | Deletions | | Impairments | | Currency | | Balances at June 30, | ||||||
Applied Workflow Automation | | $ | | | $ | — | | $ | | | $ | — | | $ | — | | $ | |
Technology | | | | | | — | | | | | | — | | | — | | | |
Total | | $ | | | $ | — | | $ | | | $ | — | | $ | — | | $ | |
| | | | | | | | | | | | | | | | | | |
| | Successor | ||||||||||||||||
| | Consolidated | ||||||||||||||||
| | Balances at August 1, | | Additions | | Deletions | | Impairments | | Currency | | Balances at December 31, | ||||||
Applied Workflow Automation | | $ | | | $ | | | $ | ( | (b) | $ | ( | | $ | | | $ | |
Technology | | | | | | | (b) | | | | | ( | | | | | | |
Total | | $ | | | $ | | | $ | ( | | $ | ( | | $ | — | | $ | |
| | | | | | | | | | | | | | | | | | |
| | Predecessor | ||||||||||||||||
| | Combined and Consolidated | ||||||||||||||||
| | Balances at January 1, | | Additions | | Deletions | | Impairments | | Currency | | Balances at July 31, | ||||||
Applied Workflow Automation | | $ | | | $ | — | | $ | | | $ | — | | $ | — | | $ | |
Technology | | | — | | | — | | | | | | — | | | — | | | — |
Total | | $ | | | $ | — | | $ | | | $ | — | | $ | — | | $ | |
| (a) | The goodwill amount for all periods presented is net of accumulated impairment amounts. Accumulated impairment relating to Applied Workflow Automation and Technology was $ |
| (b) | Additions/Deletions represent measurement period adjustments as discussed in Note 4, Business Combination. |
6. Long-term Debt and Credit Facilities
Disclosure under this footnote should be read in conjunction with the “Chapter 11 Reorganization” disclosure included under Note 1, General.
July 2030 Notes
On July 29, 2025, Exela Technologies BPA, LLC and Exela Finance Inc., wholly-owned subsidiaries of the Company (for this purpose, together, the “2030 Notes Issuers”), certain guarantors and U.S. Bank Trust Company, National Association, as trustee, entered into an indenture (the “July 2030 Notes Indenture”) governing the Company’s
The Company issued approximately $
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generating net proceeds of $
The July 2030 Notes may be redeemed, in whole or in part, at the 2030 Notes Issuers’ option at any time, upon not less than
The July 2030 Notes Indenture limits the ability of the 2030 Notes Issuers and the guarantors to incur additional debt, pay dividends or make other restricted payments, make certain investments, create or permit liens on assets, sell or dispose of assets, and enter into transactions with affiliates, in each case subject to specified exceptions. Events of default include the failure to pay principal, interest or other amounts when due, the failure to comply with covenants or other agreements in the July 2030 Notes Indenture, defaults on other material indebtedness of the 2030 Notes Issuers or the guarantors, certain bankruptcy or insolvency events, and the entry of material judgments against the 2030 Notes Issuers or the guarantors. If an event of default occurs and is continuing, the July 2030 Notes may be declared immediately due and payable, and in the case of bankruptcy or insolvency events, the July 2030 Notes automatically become immediately due and payable.
The obligations under the July 2030 Notes are fully and unconditionally guaranteed on a senior secured basis by the 2030 Notes Issuers’ U.S. subsidiary guarantors and are secured by liens on the collateral of the 2030 Notes Issuers and such guarantors, subject to permitted liens and the terms of the Super Senior, ABL and Equal Priority Intercreditor Agreements. Under these agreements, the ABL Lenders (as described below) hold first-priority liens on receivables, inventory, cash and related assets, while the Super Senior Term Loan Lenders (as described below) and July 2030 Noteholders hold junior liens on such assets. With respect to fixed assets, equity interests, intellectual property and related assets, the Super Senior Term Loan Lenders hold first-priority liens and July 2030 Noteholders share equal second-priority liens on a pari passu basis with holders of outstanding general unsecured claims in the Chapter 11 Cases, while the ABL Lenders hold junior liens.
Super Senior Term Loan
On July 29, 2025, Exela Technologies BPA, LLC and Exela Finance Inc. (for this purpose, together, the “Super Senior Term Loan Borrowers”), each subsidiary of Exela Technologies BPA, LLC, as guarantors, Ankura Trust Company, LLC, as administrative agent and collateral agent, and certain lenders (the “Super Senior Term Loan Lenders”) entered into a Financing Agreement (as amended, the “Super Senior Term Loan”), in accordance with the Plan. The Super Senior Term Loan provided for an aggregate principal amount of up to $
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SOFR Loans is payable at the end of each applicable interest period. Upon the occurrence of an event of default, all outstanding amounts bear interest at the applicable rate plus
As of June 30, 2026, there were borrowings of $
The obligations under the Super Senior Term Loan are guaranteed on a joint and several basis by substantially all of the Super Senior Term Loan Borrowers’ subsidiaries and are secured by liens on the collateral of the Super Senior Term Loan Borrowers and the guarantors, subject to permitted liens and the terms of the ABL Intercreditor Agreement (as described below) and that certain Super Senior Intercreditor Agreement. The Super Senior Term Loan contains customary affirmative and negative covenants, including limitations on additional indebtedness, the granting of liens, asset sales, restricted payments, affiliate transactions, and changes in business. It also includes a financial covenant requiring the Issuer to maintain the ratio of (a) Indebtedness to (b) Covenant Consolidated EBITDA of no greater than
On August 14, 2026, the Super Senior Term Loan Borrowers, the agents and the required lenders entered into a limited waiver of the Specified Events of Default described below under “ABL Facility”, the effectiveness of which was subject to specified conditions and which requires the Company to satisfy specified post-closing obligations. See Note 15, Subsequent Events.
Second Lien Note
On February 27, 2023, BPA, through its subsidiary Exela Receivables 3, LLC, and BRF Finance Co., LLC entered into a Secured Promissory Note pursuant to which BPA borrowed $
The obligations under the Second Lien Note are fully and unconditionally guaranteed by certain subsidiaries of BPA and are secured by liens on BPA’s and certain guarantors’ assets, including accounts receivable, inventory, cash and deposit accounts, equipment, real property, equity interests in subsidiaries, intercompany obligations, general intangibles, and other related assets. Pursuant to the ABL Intercreditor Agreement, BRF Finance Co., LLC’s liens are subordinated to the liens securing the Company’s senior debt facilities; specifically, the ABL Facility with respect to receivables, inventory, cash, and related assets, and the Super Senior Term Loan and July 2030 Notes with respect to
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fixed assets, equity interests, and other non-ABL assets. As a result, the obligations under the Second Lien Note are effectively second-priority liens behind the senior secured debt. The Second Lien Note includes a financial covenant requiring the borrowers to maintain a minimum fixed charge coverage ratio, calculated on a trailing twelve-month basis. The minimum required ratio varies depending on the period: for the defined periods tested quarterly through December 31, 2025, and monthly from January 1, 2026 through June 30, 2026, the fixed charge coverage ratio must be not less than
During the periods August 1, 2025 to December 31, 2025 (Successor) and January 1, 2025 to July 31, 2025 (Predecessor), the Company repaid $
On August 14, 2026, BPA and BRF Finance Co., LLC entered into a Limited Waiver and Fifth Amendment to the Second Lien Note, which, among other things, waived the Specified Events of Default described below under “ABL Facility.” See Note 15, Subsequent Events.
ABL Facility
On July 29, 2025, Exela Technologies BPA, LLC and certain of its subsidiaries (collectively, the “ABL Borrowers”) entered into a $
As of June 30, 2026 (Successor), there were borrowings of $
The obligations under the ABL Facility are guaranteed on a joint and several basis by substantially all of the ABL Borrowers’ U.S. subsidiaries. The liens securing the ABL Facility are subject to an Intercreditor Agreement (the “ABL Intercreditor Agreement”) dated July 29, 2025, among MidCap Funding IV Trust, Ankura Trust Company, LLC,
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as Term Agent, BRF Finance Co., LLC, as Riley Agent, and U.S. Bank Trust Company, National Association, as July 2030 Notes Trustee. The ABL Intercreditor Agreement governs lien priorities including (i) relative priorities for the collateral securing the ABL Facility obligations, the Super Senior Term Loan obligations, the July 2030 Notes Indenture obligations and the Second Lien Note obligations; (ii) collateral priorities securing (a) any Second Lien Note obligations, (b) any Super Senior Term Loan obligations, (c) any July 2030 Notes Indenture obligations, or (d) any Excess ABL Debt; and (iii) prohibition on contesting liens. The ABL Facility is secured by a first-priority lien on certain ABL Priority Collateral (including receivables, cash, inventory, deposit accounts, and related assets) and a junior lien on certain Term Priority Collateral (as defined therein), subject to the ABL Intercreditor Agreement. On May 14, 2026, the ABL Borrowers, the Agent and the ABL Lenders entered into an amendment to the ABL Facility to permit ongoing sales of designated receivables under the Amended BR Exar AR Facility, subject to a cap of $
The ABL Facility includes customary affirmative covenants such as reporting, collateral maintenance, insurance, and inspections, and negative covenants, including restrictions on additional indebtedness, liens, asset sales, investments, affiliate transactions, and changes in business. The ABL Facility also includes a financial covenant requiring the ABL Borrowers to maintain a minimum fixed charge coverage ratio, calculated on a trailing twelve-month basis. The fixed charge coverage ratio is defined as the ratio of EBITDA less Unfinanced Capital Expenditures less Capitalized Software Expenditures, to Fixed Charges (as such terms are defined in the ABL Facility). The minimum required ratio varies depending on the period: for the defined periods tested quarterly through December 31, 2025, and monthly from January 1, 2026 through June 30, 2026, the fixed charge coverage ratio must be not less than
The Company did not make certain tax payments required to be made under the Plan, including payments due on or before July 29, 2026 to holders of Priority Tax Claims, and did not provide notice of the resulting defaults within the three-day period required under the ABL Facility (collectively, the “Specified Events of Default”). Specified Events of Default constituted events of default under the ABL Facility and gave rise to cross-defaults under the Company’s other financing agreements. On August 14, 2026, the ABL Borrowers, the Agent and the ABL Lenders entered into a Limited Waiver and Sixth Amendment to the ABL Facility, which waived the Specified Events of Default and, among other things, adjusted the calculation of the borrowing base to exclude certain receivables. See Note 15, Subsequent Events.
European Senior Credit Facilities Agreement
In June 2024, XBP Europe, Inc., a wholly owned subsidiary of the Company, together with certain other subsidiaries, entered into a Facilities Agreement (the “Facilities Agreement”) with HSBC UK Bank plc (“HSBC”) for a £
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applicable margin of
On July 25, 2025, an amendment to the Facilities Agreement was executed to permit the borrowing of an additional sum of €
The European Senior Credit Facilities continue to be secured by first-ranking security interests over substantially all assets of XBP Europe, Inc. and other borrower and guarantor subsidiaries, including cash, receivables, inventory, intercompany receivables, shares in subsidiaries, and related assets. The amendment added a new covenant restricting XBP Global Holdings, Inc., as the parent of XBP Europe, Inc., from providing certain guarantees or other credit support. Except as otherwise provided by applicable law, all obligations under the Facilities Agreement are jointly and severally unconditionally guaranteed by the European subsidiaries of XBP Europe, Inc.
The outstanding principal amount of the 2028 Term Loan A Facility is scheduled to be repaid in
The Facilities Agreement contains certain affirmative and negative covenants limiting the ability of XBP Europe, Inc. to effect mergers and change of control events as well as certain other limitations, including limitations on (i) incurrence of additional indebtedness or liens, (ii) dispositions of assets, (iii) substantial changes of the general nature of the business, (iv) entering into restrictive agreements, (v) making certain investments, loans, advances, guarantees and acquisitions, (vi) prepaying certain indebtedness, (vii) the declaration and payment of dividends or other restricted payments, (viii) engaging in transactions with affiliates, or (ix) amending certain material documents. The Facilities Agreement also contains financial covenants including, but not limited to: (i) a consolidated total leverage ratio of not greater than
BR Exar AR Facility
On February 12, 2024, certain of the Company’s subsidiaries entered into a receivables purchase agreement with BR Exar, LLC (“BREL”), an affiliate of B. Riley Commercial Capital, LLC (as subsequently amended on various dates in connection with each monthly sale of certain existing receivables, up to and including December 31, 2025 (the “BR Exar AR Facility”)). The Company received an aggregate of $
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BR Exar AR Facility during the periods August 1, 2025 to December 31, 2025 (Successor) and January 1, 2025 to July 31, 2025 (Predecessor), certain of the Company’s subsidiaries agreed to sell certain existing receivables and all of their future receivables to BREL until such time as BREL shall have collected $
Under the BR Exar AR Facility, transfers of accounts receivable from certain of the Company’s subsidiaries to BREL are treated as secured borrowings under ASC 860, Transfers and Servicing and are not accounted for as a reduction in accounts receivable. Accordingly, the Company treated a total of $
Amended BR Exar AR Facility
On January 21, 2026, certain of the Company’s subsidiaries entered into an Amended and Restated Receivables Purchase Agreement with BREL (as subsequently amended on February 10, 2026, March 27, 2026 and May 14, 2026 (the “Amended BR Exar AR Facility”)), pursuant to which they agreed to sell certain existing receivables and all of their future receivables to BREL until such time as BREL shall have collected $
Under the Amended BR Exar AR Facility, transfers of accounts receivable from certain of the Company’s subsidiaries to BREL are treated as secured borrowings under ASC 860, Transfers and Servicing and are not accounted for as a reduction in accounts receivable. Accordingly, the Company treated a total of $
Amended Factoring Agreement
On September 15, 2023, certain European subsidiaries of the Company entered into an amendment to a secured borrowing facility (the “Amended Factoring Agreement”) for a non-recourse factoring program pursuant to which an unrelated third party (the “Factor”) purchases certain approved and partially approved accounts receivables (as defined in the Amended Factoring Agreement) from certain subsidiaries of the Company (the “Relevant Entities”) up to a maximum amount of €
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The Company accounts for the transactions under the Amended Factoring Agreement as a sale under ASC 860, and as an off-balance sheet arrangement. Net funds received from the transfers reflect the face value of the account less a fee, which is recorded as an increase to cash and a reduction to accounts receivable outstanding in the condensed consolidated balance sheets. The Company reports the cash flows attributable to the sale of accounts receivables to the Factor and the cash receipts from collections made on behalf of and paid to the Factor under the Amended Factoring Agreement, on a net basis as trade accounts receivables in cash flows from operating activities in the Company’s condensed consolidated and combined statements of cash flows.
As of June 30, 2026, the Company’s outstanding factored accounts receivable totaled approximately $
Long-Term Debt Outstanding
As of June 30, 2026 (Successor), and December 31, 2025 (Successor), the following debt instruments were outstanding:
| | | | | | |
| | Successor | ||||
| | Consolidated | ||||
| | June 30, | | December 31, | ||
| | 2026 | | 2025 | ||
Other (a) | | $ | | | $ | |
BR Exar AR Facility and Amended BR Exar AR Facility (b) | | | | | | |
Second Lien Note maturing September 30, 2026 (c) | | | | | | |
2028 Term Loan Facilities maturing June 26, 2028 (d) | | | | | | |
Revolving Credit Facility maturing June 26, 2028 | | | | | | |
Super Senior Term Loan maturing July 28, 2028 (e) | | | | | | |
ABL Facility maturing July 29, 2028 | | | | | | |
July 2030 Notes maturing July 15, 2030 (f) | | | | | | |
Total debt | | | | | | |
Less: Current portion of long-term debt | | | ( | | | ( |
Long-term debt, net of current maturities | | $ | | | $ | |
| (a) | Other debt represents outstanding loan balances associated with various hardware and software purchases, and maintenance and leasehold improvements, along with other loans entered into by subsidiaries of the Company. |
| (b) | Net of unamortized debt issuance cost of $ |
| (c) | Net of unamortized debt issuance costs of $ |
| (d) | Net of unamortized debt issuance costs of $ |
| (e) | Net of unamortized debt issuance costs of less than $ |
| (f) | Net of unamortized debt issuance costs of $ |
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As of June 30, 2026 (Successor), maturities of long-term debt are as follows:
| | | |
| | Maturity | |
Remainder of 2026 | | $ | |
2027 | |
| |
2028 | |
| |
2029 | |
| — |
2030 | | | |
Thereafter | |
| — |
Total long-term debt | |
| |
Less: Unamortized original issue discount and debt issuance cost | |
| ( |
| | $ | |
7. Income Taxes
The Company applies an estimated effective tax rate ("ETR") approach for calculating a tax provision for interim periods, as required under GAAP. The Company recorded an income tax benefit of $
The Company's ETR of
For the three and six months ended June 30, 2025, the Company's ETR of (
As of June 30, 2026, there were no material changes to either the nature or the amounts of the uncertain tax positions previously determined for the period ended December 31, 2025. The Organization for Economic Co-operation and Development has reached agreement on Pillar Two Model Rules ("Pillar Two") to implement a minimum 15.0% tax rate on certain multinational companies. Participating countries are in various stages of proposing and enacting tax laws to implement the Pillar Two framework. The Company determined the Pillar Two rules did not have a material impact on the Company's taxes for the three and six months ended June 30, 2026 (Successor) and will continue to evaluate the impact of these proposals and legislative changes as new guidance emerges.
8. Employee Benefit Plans
All of the pension plans discussed below pertain to the Company’s European subsidiaries, which were deemed to be acquired as part of the Business Combination (Refer to Note 4, Business Combination).
U.K. Pension Plan
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Company or March 31, 2015. The expected rate of return assumptions for plan assets relate solely to the UK plan and are based mainly on historical performance achieved over a long period of time (
German Pension Plan
XBP Global’s subsidiary in Germany, Exela Technologies ECM Solutions GmbH, provides pension benefits to certain retirees. Employees eligible for participation include all employees who started working for the Company or its predecessors prior to September 30, 1987 and have finished a qualifying period of at least
Norway Pension Plan
The Company’s subsidiary in Norway provides pension benefits to eligible retirees and eligible dependents. Employees eligible for participation include all employees who were more than
Asterion Pension Plan
In 2018, Exela Technologies Holding GmbH acquired the obligation to provide pension benefits to eligible retirees and eligible dependents. Employees eligible for participation included all full-time regular employees who were more than
Tax Effect on Accumulated Other Comprehensive Loss
As of June 30, 2026, the Company recorded $
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Pension Expense
The components of the net periodic benefit cost for the three and six months ended June 30, 2026 (Successor) are as follows:
| | | | | | |
| | Successor | ||||
| | Consolidated | ||||
| | Three Months Ended June 30, | | Six Months Ended June 30, | ||
| | 2026 | | 2026 | ||
Service cost | | $ | | | $ | |
Interest cost | | | | | | |
Expected return on plan assets | |
| ( | |
| ( |
Amortization: | | | | | | |
Amortization of net loss | | | | | | |
Net periodic cost | | $ | | | $ | |
The Company records pension interest cost within interest expense, net. Expected return on plan assets, amortization of prior service costs, and amortization of net losses are recorded within other expense (income), net. Service cost is recorded within cost of revenue.
Employer Contributions
XBP Global’s funding of employer contributions is based on governmental requirements and differs from those methods used to recognize pension expense. The Company made contributions of $
9. Commitments and Contingencies
Litigation
The Company is, from time to time, involved in certain legal proceedings, inquiries, claims and disputes, which arise in the ordinary course of business. Although management cannot predict the outcomes of these matters, management does not believe any of these actions that are currently pending will have a material adverse effect on the Company’s condensed consolidated balance sheets, condensed consolidated and combined statements of operations or condensed consolidated and combined statements of cash flows.
Contract-Related Contingencies
The Company has certain contingent obligations that arise in the ordinary course of providing services to its customers. These contingencies are generally the result of contracts that require the Company to comply with certain performance measurements or the delivery of certain services to customers by a specified deadline. The Company believes the adjustments to the transaction price, if any, under these contract provisions will not result in a significant revenue reversal or have a material adverse effect on the Company’s condensed consolidated balance sheets, condensed consolidated and combined statements of operations, condensed consolidated and combined statements of comprehensive profit (loss) or condensed consolidated and combined statements of cash flows.
10. Fair Value Measurement
Assets and Liabilities Measured at Fair Value
The carrying amount of assets and liabilities including current portion of other debt approximated their fair value as of June 30, 2026 and December 31, 2025, due to the relatively short maturity of these instruments. Management
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estimated the fair values of the Company’s July 2030 Notes at approximately
The Company determined the fair value of its long-term debt and current portion of long-term debt using Level 2 inputs, including any recent issuance of the debt, the Company’s credit rating, and the current market rate.
The Company determined the fair value of Private Warrants liability of the Company included in the other long-term liabilities in the condensed consolidated balance sheets as of June 30, 2026 under Level 3 fair value measurement using the Black-Scholes option pricing model.
The following table provides the carrying amounts and estimated fair values of the Company’s financial instruments as of June 30, 2026 (Successor) and December 31, 2025 (Successor):
| | | | | | | | | | | | | | | |
| | Successor | |||||||||||||
| | Consolidated | |||||||||||||
| | Carrying | | Fair | | Fair Value Measurements | |||||||||
As of June 30, 2026 | | Amount | | Value | | Level 1 | | Level 2 | | Level 3 | |||||
Long-term debt | | $ | | | $ | | | $ | — | | $ | | | $ | — |
Current portion of long-term debts | | | | | | | | | — | | | | | | — |
Private Warrants liability | | | | | | | | | — | | | — | | | |
| | | | | | | | | | | | | | | |
| | Successor | |||||||||||||
| | Consolidated | |||||||||||||
| | Carrying | | Fair | | Fair Value Measurements | |||||||||
As of December 31, 2025 | | Amount | | Value | | Level 1 | | Level 2 | | Level 3 | |||||
Long-term debt | | $ | | | $ | | | $ | — | | $ | | | $ | — |
Current portion of long-term debts | | | | | | | | | — | | | | | | — |
Private Warrants liability | | | | | | | | | — | | | — | | | |
The significant unobservable inputs used in the fair value of the Private Warrants liability of the Company are assumptions related to the inputs of exercise price, risk-free interest rate, expected term, expected volatility, and expected dividend yield. Significant increases (decreases) in the discount rate would have resulted in a lower (higher) fair value measurement. Significant increases (decreases) in the forecasted financial information would have resulted in a higher (lower) fair value measurement. For all significant unobservable inputs used in the fair value measurement of the Level 3 liabilities, a change in one of the inputs would not necessarily result in a directionally similar change in the fair value.
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The following table reconciles the beginning and ending balances of net assets and liabilities classified as Level 3 for which a reconciliation is required:
| | | |
| | Successor | |
| | Consolidated | |
| | Six Months Ended June 30, | |
| | 2026 | |
Balance as at January 1 | | $ | |
Change in the fair value of the Private Warrants liability | | | — |
Balance as at June 30 | |
| |
11. Stock-Based Compensation
XBP 2024 Stock Incentive Plan
On June 13, 2024, the stockholders of XBP Europe Holdings, Inc. (the legal acquirer under the Business Combination) approved and adopted XBP Europe Holdings, Inc.’s 2024 Stock Incentive Plan (the “XBP 2024 Equity Plan”) at the 2024 Annual Meeting of Stockholders. The XBP 2024 Equity Plan was subsequently amended following stockholder approval on July 25, 2025, to authorize additional shares, and continues to be effective after the Business Combination. Under the XBP 2024 Equity Plan, subject to adjustment for certain changes in capitalization or other corporate events, the Company has been authorized to issue up to
Restricted Stock Unit
Restricted stock unit awards generally vest ratably over a one (
A summary of restricted stock unit activities under the XBP 2024 Equity Plan for the six months ended June 30, 2026 (Successor) is summarized in the following table:
| | | | | | | |
| | | | | | | Average |
| | | | Weighted | | Remaining | |
| | Number | | Average Grant | | Contractual Life | |
| | of Units | | Date Fair Value | | (Years) | |
Outstanding Balance as of January 1, 2026 (Successor) | | | | $ | |
| |
Granted |
| | | | | | |
Forfeited |
| | | | | | |
Vested |
| ( | | | | | |
Outstanding Balance as of June 30, 2026 (Successor) | | | | $ | |
| |
All of the RSUs that vested in the six months ended June 30, 2026 were net-share settled such that the Company withheld shares with value equivalent to the employee’s minimum statutory obligation for applicable income and other employment taxes, and remitted the cash to the appropriate taxing authorities. The total shares withheld were
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As of June 30, 2026 (Successor), there was $
Performance Stock Unit
Performance stock unit awards generally vest ratably over a required service period of one (1) year to three (3) years based on actual performance from 0% to 200% of the target number of performance stock unit awards granted. Vesting of a performance stock unit is contingent upon meeting certain departmental and/or company-wide performance goals, including revenue, adjusted EBITDA and other technical performance indicators. Annual performance goals for these awards are established by the Company’s Compensation Committee at the beginning of each performance year. The fair value of performance stock unit awards granted under the XBP 2024 Equity Plan was estimated on the date of grant using the Company’s closing stock price. If applicable performance goals are not met, no compensation cost is recognized and any recognized compensation cost is reversed.
A summary of performance stock unit activities under the XBP 2024 Equity Plan for the six months ended June 30, 2026 (Successor) is summarized in the following table:
| | | | | | | | |
| | | | | | | | Remaining Service |
| | | | | Weighted | | Period Over | |
| | | Number | | Average | | Which Expected | |
| | | of Units | | Fair Value | | to be Recognized | |
Outstanding Balance as of January 1, 2026 (Successor) | | | — | | $ | — | | — |
Granted |
| | | |
| |
| |
Forfeited |
| | — | |
| — | | |
Vested |
| | — | |
| — | | |
Outstanding Balance as of June 30, 2026 (Successor) | | | | | $ | | | |
As of June 30, 2026, there was less than $
Options
Under the XBP 2024 Equity Plan, stock options are granted at a price per share not less than
12. Stockholders’ Equity and Warrants
The following description summarizes the material terms and provisions of the securities that the Company has authorized.
Preferred Stock — The Company is authorized to issue up to
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Common Stock — The Company is authorized to issue up to
Warrants — As of June 30, 2026, the Company had the following warrants to purchase Common Stock outstanding:
| | | | | | | | |
| | Number of Warrants | | Common Stock Underlying Warrants | | Exercise Price Per Share | | Expiration |
Private Placement Warrants | | | | | | | | 11/29/2028 |
Forward Purchase Warrants | | | | | | | | 11/29/2028 |
Public Warrants | | | | | | | | 11/29/2028 |
ETI Warrants | | | | | | | | 07/29/2030 |
Total | | | | | | | | |
Public Warrants
The Public Warrants qualify for the derivative scope exception under ASC 815 and are therefore classified as equity on the condensed consolidated balance sheets. Every ten warrants may be exercised for
The Company may redeem the outstanding Public Warrants if the price per share of common stock equals or exceeds $
| ● | in whole and not in part; |
| ● | at a price of $ |
| ● | upon not less than |
| ● | if, and only if, the closing price of the Common Stock equals or exceeds $ |
If and when the Public Warrants become redeemable by the Company, the Company may not exercise its redemption right if the issuance of shares of Common Stock upon exercise of the Public Warrants is not exempt from registration or qualification under applicable state blue sky laws or the Company is unable to effect such registration or qualification.
Private Placement and Forward Purchase Warrants
The Private Placement and Forward Purchase Warrants (together “Private Warrants”) meet the definition of a derivative; however, they do not meet the equity scope exception in ASC 815 and are therefore classified as a liability. The Private Warrants are identical to the Public Warrants, except that so long as they are held by CFAC Holdings VIII, LLC (an affiliate of Cantor Fitzgerald) or any Permitted Transferees, as applicable, the Private Warrants (i) may be exercised for cash or on a cashless basis, and (ii) shall not be redeemable by the Company.
Upon exercise of each of the Public Warrants and Private Warrants, the exercise price and number of shares of Common Stock issuable may be adjusted in certain circumstances including in the event of a stock dividend, a
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consolidation, combination, reverse stock split or reclassification of shares of Common Stock. Private Warrants’ liability is included within other long-term liabilities on the condensed consolidated balance sheets.
ETI Warrants
On July 29, 2025, the Company issued Common Stock purchase warrants to certain subsidiaries of ETI which entitle them to purchase
13. Related-Party Transactions
Successor
Relationship with HandsOn Global Management
Par Chadha, the Chairman of the Company’s board of directors, and Andrej Jonovic, Chief Executive Officer of the Company and a director, are affiliated with HandsOn Global Management LLC (together with affiliated entities managed by HandsOn Global Management LLC, “HGM”).
On January 1, 2015, the Company, through one of its subsidiaries, entered into a master agreement with Rule 14, LLC, a portfolio company of HGM. In addition, the Company is party to
An operating subsidiary of the Company leased an operating facility from HandsOn Global Management (HGM) Limited (f/k/a HOV Services Limited)(“HGM India”), which is an HGM affiliate. The rental expense for this operating lease (the “HOV Lease”) was less than $
On October 27, 2025, the Company, through one of its subsidiaries, entered into an assignment and assumption agreement with HGM to assign certain portion of its right, title and interest in a building lease to HGM. The rental income from this lease (the “Assigned Lease”) was less than $
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On February 5, 2025, the Company entered into a service agreement with Nventr, LLC, a portfolio company of HGM that provides AI analytics solutions (the “Nventr Agreement”). The Company incurred an expense of less than $
On February 18, 2025, the Company entered into a service agreement with HGM India, to help mitigate the risk of service disruption from the Chapter 11 Cases on the Predecessor by providing an alternate source for certain business process outsourcing, management, and financial transaction processing solutions. The Company incurred an expense of $
On February 10, 2026, the Company, through one of its subsidiaries, entered into a Master Services Agreement and Mailroom Services Statement of Work with HealthAxis Group LLC, which is an HGM affiliate. Under the agreements, the Company shall provide mailroom, document scanning, indexing, secure electronic delivery, and
In the aggregate, for the three and six months ended June 30, 2026 (Successor), the Company incurred approximately $
Related-party Indebtedness
As of June 30, 2026, funds managed by Gates Capital Management, Inc. and Avenue Capital Group, each of which is affiliated with beneficial holders of
Sale of July 2030 Notes
On May 8, 2026, the Company sold $
Predecessor
Relationship with HandsOn Global Management
The Predecessor incurred fees relating to the Master Agreements of $
The rental expense for the HOV Lease was less than $
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three and six months ended June 30, 2025 (Predecessor), respectively. These expenses are included in related party expense in the condensed consolidated and combined statements of operations.
On September 1, 2024, the Company, through one of its subsidiaries, entered into a master services agreement with Aideo Technology LLC (“Aideo”) an affiliate of HGM, wherein the Company agreed to provide medical coding services to Aideo. On October 1, 2024, the Company, through one of its subsidiaries, entered into another master services agreement with Aideo wherein the Company agreed to provide the management of AWS hosting services to Aideo (together with the initial Aideo Agreement, the “Aideo Agreements”). For the three and six months ended June 30, 2025 (Predecessor), the Predecessor recognized less than $
In aggregate, for the three and six months ended June 30, 2025 (Predecessor), the Predecessor incurred approximately $
Transactions between the Predecessor and XBP Europe Holdings, Inc.
XBP Europe Holdings, Inc. (together with its subsidiaries, “XBP Europe”) was a subsidiary of ETI and an affiliate of the Predecessor until the Business Combination. Historically, XBP Europe and its predecessor entities and subsidiaries were managed and operated in the ordinary course of business with other subsidiaries of ETI including the Predecessor. Below are the transactions that occurred between the Predecessor and XBP Europe during the three and six months ended June 30, 2025 (Predecessor).
Purchase of Products and Services: the Predecessor purchased products and services from XBP Europe for which $
Shared Service Center Costs: the historical costs and expenses of XBP Europe include costs for certain shared service functions historically provided by the Predecessor, including, but not limited to accounting and finance, IT and business process operations. Where possible, these charges were allocated based on full-time equivalents (FTEs), formal agreements between the Predecessor and XBP Europe, or other allocation methodologies that Management determined to be a reasonable reflection of the utilization of services provided or the benefit received by XBP Europe and the costs of operating XBP Europe during the periods presented. The allocated shared service expenses and general corporate expenses for the three and six months ended June 30, 2025 (Predecessor) were $
Service Fee: the Predecessor provided certain management services to XBP Europe pursuant to a services agreement, including sales of certain hardware, operations delivery, finance, accounting, human resource and technology support services. The Predecessor earned total fees of less than $
Notes Receivable: The Predecessor entered into
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operations include less than $
In aggregate, for the three and six months ended June 30, 2025 (Predecessor), the Predecessor incurred approximately $
Recharges by ETI
In the carve-out of the Predecessor as a separate entity from its former Parent ETI in preparing its financial statements, costs incurred by ETI to support the Predecessor business are represented as having been recharged by ETI. During the three and six months ended June 30, 2025 (Predecessor), the Predecessor reimbursed $(
April 2026 Notes held by ETI Subsidiaries
As of June 30, 2025 (Predecessor), $
Payable and Receivable/Prepaid Balances with Affiliates
Payable and receivable/prepaid balances with affiliates as of June 30, 2026 (Successor) and December 31, 2025 (Successor) were as follows:
| | | | | | | | | | | | | |
| | | | | | ||||||||
| | Successor | | ||||||||||
| | Consolidated | | ||||||||||
| | June 30, 2026 | | December 31, 2025 | | ||||||||
| | Receivables and | | Payables | | Receivables and | | Payables | | ||||
HandsOn Global Management (HGM) Limited (f/k/a HOV Services Limited) (1) | | $ | — | | $ | | | $ | — | | $ | | |
Rule 14, LLC | | | — | | | | | | — | | | | |
HGM (2) | | | | | | — | | | — | | | | |
Doctors of Waikiki LLP (3) | | | — | | | | | | — | | | | |
Aideo Technology, LLC | | | | | | — | | | | | | — | |
ETI entities | | | | | | | | | — | | | | |
Nventr, LLC | | | | | | — | | | — | | | | |
| | $ | | | $ | | | $ | | | $ | | |
| (1) | As of June 30, 2026, the net payable amount of $ |
| (2) | As of December 31, 2025, the net payable amount of $ |
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| (3) | As of June 30, 2026, the net payable amount of $ |
14. Segment Information
The Company’s operating segments are significant strategic business units that align their products and services with how they manage their business, approach the markets and interact with their clients. The Company is organized into
Applied Workflow Automation
The Applied Workflow Automation segment provides services powered by intelligent, AI-enabled workflows that generate outcomes for clients’ systems. Revenue primarily stems from transactions processed and includes payment processing, data capture, analysis, decisioning, distribution and transformation across industries and the public and private sectors, primarily in Americas and Europe, and increasingly in Asia. The Applied Workflow Automation segment includes the Company’s Bills & Payments, healthcare industry solutions, on-site enterprise solutions, integrated communications and enterprise legal management business units which serve leading banks, payers and providers, utilities as well as federal, regional, and local government entities.
Technology
The Technology segment focuses on the sale of recurring and perpetual software licenses, software maintenance and professional services, as well as hardware solutions and maintenance. The Company offers an industry-agnostic and cross-departmental suite of products, with primary focus on scalable workflows leveraging AI through neural networks together with deep domain expertise. The Company also offers industry specific platforms for the banking and healthcare industries.
The Company’s Chief Operating Decision Maker (“CODM”) is the Company’s Chief Executive Officer. The CODM reviews segment profit to evaluate operating segment performance and determine how to allocate resources to operating segments. “Segment profit” is defined as revenue less cost of revenue (exclusive of depreciation and amortization). The Company does not allocate selling, general and administrative expenses, depreciation and amortization, related party expense, net, interest expense, net, debt modification and extinguishment costs (gain), net, sundry expenses (income), net, and other expense (income), net to its reporting segments. The Company manages assets on a total company basis, not by operating segment, and therefore asset information and capital expenditures by operating segments are not presented. A reconciliation of segment profit to net loss before income taxes is presented below. Other than cost of revenue, no expenses are tracked, allocated or reported based on segments as the CODM does not review or use financial information below segment profit to manage and direct the resources of the reportable segments.
| | | | | | | | | |
| | Successor | |||||||
| | Consolidated | |||||||
| | Three months ended June 30, 2026 | |||||||
| | Applied Workflow Automation | | Technology | | Total | |||
Revenue (including related party revenue) | | $ | | | $ | | | $ | |
Cost of revenue (exclusive of depreciation and amortization) | |
| | |
| | |
| |
Segment profit | | | | | | | | | |
Selling, general and administrative expenses (exclusive of depreciation and amortization) | | | | | | | |
| |
Depreciation and amortization | | | | | | | |
| |
Related party expense, net | | | | | | | |
| |
Interest expense, net | | | | | | | |
| |
Sundry expense, net | | | | | | | |
| |
Other income, net | | | | | | | | | ( |
Net loss before income taxes | | | | | | |
| $ | ( |
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| | | | | | | | | |
| | Successor | |||||||
| | Consolidated | |||||||
| | Six months ended June 30, 2026 | |||||||
| | Applied Workflow Automation | | Technology | | Total | |||
Revenue (including related party revenue) | | $ | | | $ | | | $ | |
Cost of revenue (exclusive of depreciation and amortization) | | | | |
| | | | |
Segment profit | | | | | | | | | |
Selling, general and administrative expenses (exclusive of depreciation and amortization) | | | | | | | | | |
Depreciation and amortization | | | | | | | | | |
Related party expense, net | | | | | | | | | |
Interest expense, net | | | | | | | | | |
Sundry expense, net | | | | | | | | | |
Other income, net | | | | | | | | | ( |
Net loss before income taxes | | | | | | | | $ | ( |
| | | | | | | | | |
| | Predecessor | |||||||
| | Combined and Consolidated | |||||||
| | Three months ended June 30, 2025 | |||||||
| | Applied Workflow Automation | | Technology | | Total | |||
Revenue (including related party revenue) | | $ | | | $ | | | $ | |
Cost of revenue (exclusive of depreciation and amortization) | |
| | |
| | |
| |
Segment profit | | | | | | | | | |
Selling, general and administrative expenses (exclusive of depreciation and amortization) | | | | | | | |
| |
Depreciation and amortization | | | | | | | |
| |
Related party expense, net | | | | | | | |
| |
Interest expense, net | | | | | | | |
| |
Debt modification and extinguishment costs (gain), net | | | | | | | |
| |
Sundry expense, net | | | | | | | |
| |
Other income, net | | | | | | | | | ( |
Loss before reorganization items and income taxes | | | | | | | | | ( |
Reorganization items | | | | | | | | | |
Net loss before income taxes | | | | | | |
| $ | ( |
| | | | | | | | | |
| | Predecessor | |||||||
| | Combined and Consolidated | |||||||
| | Six months ended June 30, 2025 | |||||||
| | Applied Workflow Automation | | Technology | | Total | |||
Revenue (including related party revenue) | | $ | | | $ | | | $ | |
Cost of revenue (exclusive of depreciation and amortization) | | | | |
| | | | |
Segment profit | | | | | | | | | |
Selling, general and administrative expenses (exclusive of depreciation and amortization) | | | | | | | | | |
Depreciation and amortization | | | | | | | | | |
Related party expense, net | | | | | | | | | |
Interest expense, net | | | | | | | | | |
Debt modification and extinguishment costs (gain), net | | | | | | | | | |
Sundry expense, net | | | | | | | | | |
Other income, net | | | | | | | | | ( |
Loss before reorganization items and income taxes | | | | | | | | | ( |
Reorganization items | | | | | | | | | ( |
Net loss before income taxes | | | | | | | | $ | ( |
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15. Subsequent Events
Amended BR Exar AR Facility Repayments
On August 14, 2026, certain of the Company’s subsidiaries entered into an additional amendment to the Amended BR Exar AR Facility, pursuant to which such subsidiaries agreed to sell certain existing and future receivables to BREL until such time as BREL shall have collected $
During the period July 1, 2026 through August 14, 2026, the Company repaid $
Amended ABL Facility
On August 14, 2026, the ABL Borrowers, the Agent and the ABL Lenders entered into a Limited Waiver and Sixth Amendment to the ABL Facility (the "Amended ABL Facility”). Among other things, the Amended ABL Facility adjusts the calculation of the borrowing base to exclude certain receivables.
Limited Waivers of Specified Events of Default
The Company failed to make certain tax payments required under the Plan and to timely notify its lenders of the resulting in the Specified Events of Default as described in Note 6, Long-term Debt and Credit Facilities. On August 14, 2026, the lenders under the Super Senior Term Loan, Second Lien Note and the ABL Facility waived the Specified Events of Default and any related cross-defaults. The Company must pay the overdue amounts and deliver evidence of payment within a specified period after the effective date of waiver.
Repayments on Second Lien Note
During the period July 1, 2026 through August 14, 2026, the Company repaid $
Sale of July 2030 Notes
On July 1, 2026, the Company sold $
Formation of Strategic Alternatives and Transactions Committee
On July 27, 2026, the Company’s board of directors adopted a charter for, and established, a Strategic Alternatives and Transactions Committee, comprised solely of independent directors, to evaluate and make recommendations to the board of directors with respect to business transactions and strategic alternatives that are material or otherwise significant to the Company or its stockholders. The committee’s role is advisory, and any transaction would remain subject to approval by the full board of directors. The initial term of the committee is twelve months. The Company has not committed to any specific transaction, and no assurance can be given that any transaction will result from the committee’s evaluation.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
You should read the following discussion and analysis together with our condensed consolidated and combined financial statements and the related notes included elsewhere in this Form 10-Q. Among other things, the condensed consolidated and combined financial statements include more detailed information regarding the basis of presentation for the financial data than included in the following discussion. Amounts in thousands of United States dollars.
Unless otherwise indicated or the context otherwise requires, references in this section to “we,” “our,” “us,” “XBP Global”, “the Company” and similar terms are to BPA before the Business Combination, and to XBP Global Holdings, Inc. following the Business Combination.
Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to, among other things, our expectations regarding future financial performance, industry conditions, business strategy, and the anticipated effects of our restructuring and related transactions, including the Business Combination. Forward-looking statements are often identified by words such as “may,” “will,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” or similar expressions.
Forward-looking statements are based on management’s current expectations and assumptions and are subject to a number of risks and uncertainties that could cause actual results to differ materially. These risks include, among others, those related to the integration and performance of the combined business, market conditions and demand for our services, competition, technological change, data security, regulatory developments, reliance on third party service providers, and our ability to meet applicable listing standards, as well as the risk factors described in our 2025 Form 10 K and other filings with the SEC.
Forward-looking statements speak only as of the date of this Quarterly Report, and we undertake no obligation to update or revise them as a result of new information, future events, or otherwise. Information contained on any website referenced in this Quarterly Report is not incorporated by reference.
Overview
XBP Global is a multinational technology and services company powering intelligent workflows for organizations worldwide. Our proprietary platforms and agentic AI-driven automation enable our clients to entrust us with their most impactful digital transformations and mission-critical operations. Our operational foundation is further defined by deep domain expertise across industries and the public and private sectors, including decades of experience helping clients navigate shifting global regulatory frameworks and supporting compliance with the rigorous standards required by government entities and highly scrutinized industries, including banking, healthcare and insurance. We pair this expertise with platform-agnostic, end-to-end structured workflows that combine AI-driven automation with dedicated human-in-the-loop exception handling and orchestration software, enabling our clients to transition from labor-intensive, reactive operations to digitally orchestrated, exception-driven workflows. From enabling payment gateways and data exchanges across multiple systems, to matching inputs against contracts and handling exceptions, to ultimately depositing payments and distributing communications, our solutions address the full life cycle of transaction processing and enterprise information management. Our Applied Workflow Automation segment provides services powered by intelligent, AI-enabled workflows that generate outcomes for clients’ systems. Revenue primarily stems from transactions processed and includes payment processing, data capture, analysis, decisioning, distribution and transformation across industries and the public and private sectors, primarily in Americas and Europe, and increasingly in Asia. Our Technology segment primarily focuses on sales of recurring software licenses and related maintenance, hardware solutions and related maintenance and professional services. As of June 30, 2026, we had approximately 9,200 employees in 20 countries operating either remotely from our business facilities or co-located at our clients’ facilities.
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History
XBP Global Holdings, Inc. was originally incorporated as CF Acquisition Corp. VIII, a blank check company formed under the laws of the State of Delaware on July 8, 2020. On March 16, 2021, the Company consummated its initial public offering. The Company’s initial purpose was to effect a business combination with one or more businesses. On October 9, 2022, CF Acquisition Corp. VIII entered into a merger agreement with XBP Europe, Inc., at the time a subsidiary of ETI. The business combination was completed on November 30, 2023, at which time the Company was renamed XBP Europe Holdings, Inc., reflecting the purchase of ETI’s historical European operations, and the Company’s shares and public warrants started trading on The Nasdaq Stock Market LLC under the ticker symbols “XBP” and “XBPEW,” respectively.
On July 29, 2025, XBP Europe Holdings, Inc. finalized its acquisition of BPA, ETI’s historical operations in the Americas and Asia, as part of the Business Combination pursuant to the MIPA. The consideration for the sale was $1.00, reflecting the encumbered nature of BPA which at the time of entry into the MIPA was involved in the Chapter 11 Cases. The Business Combination was subject to certain conditions subsequent including emergence of BPA and certain of its affiliates from the Chapter 11 Cases, which occurred on July 29, 2025 (the Emergence Date). Prior to the Business Combination, the Company and BPA had both been indirect subsidiaries of ETI. ETI remains a stockholder of the Company and a related party; see Note 13, Related-Party Transactions. In connection with the Business Combination, the Company changed its name from “XBP Europe Holdings, Inc.” to “XBP Global Holdings, Inc.”
Together with the European operations acquired in 2023, the Company’s current global platform is built upon a portfolio of acquired and predecessor entities with more than 50 years of commercial and operational history.
The Business Combination was accounted for as a reverse acquisition in accordance with Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification Topic 805, Business Combinations (“ASC 805”). Under this method of accounting, XBP Europe Holdings, Inc. (now XBP Global) was treated as the “acquired” company for financial reporting purposes even though BPA survives as an indirect wholly-owned subsidiary of XBP Global.
In accordance with ASC 852, Reorganizations (“ASC 852”), BPA was required to apply fresh start accounting upon its emergence from bankruptcy. The Company evaluated transaction activity of BPA between the Emergence Date and July 31, 2025 (the Convenience Date) and concluded that the Convenience Date was appropriate for the adoption of fresh start accounting which resulted in BPA becoming a new entity for financial reporting purposes as of the Convenience Date. See Note 1, General and Note 4, Business Combination for additional information.
Predecessor and Successor
The “Predecessor” company information presented refers to the financial information prior to the Emergence Date, which reflects the combined historical financial statements of BPA prepared using BPA’s previous combined basis of accounting. The “Successor” company information refers to the financial information beginning August 1, 2025 and reflects the condensed consolidated financial statements of XBP Global, including the financial statement effects of recording fair value adjustments and the capital structure resulting from the Business Combination and fresh start accounting of BPA. Black lines have been drawn to separate the Successor’s financial information from that of the Predecessor since their financial statements are not comparable as a result of the application of acquisition accounting and the Company’s capital structure resulting from the Business Combination and fresh start accounting of BPA. See Note 1, General for additional information.
Recent Developments
Restructuring of European Operations
In the second quarter of 2026, the Company committed to a restructuring program across its European operations. An operating footprint carrying more legal entities and small business units than the current scale of the business supports led management to approve two workstreams: consolidating smaller entities and business units into larger operating units, under which five sites closed; and reducing staffing levels across the remaining entities, functions
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and management layers. The program affects 245 employees across multiple locations, is expected to be substantially complete by December 31, 2026, and gave rise to restructuring charges of $5.0 million in the three and six months ended June 30, 2026.
Held for Sale
During the three months ended June 30, 2026, management with the requisite authority committed to a plan to sell the Company's Baronsmede property in Egham, United Kingdom, which has historically been used for management team purposes. The Company engaged a commercial real estate broker, has actively marketed the property, and has received offers in the range of £2.5 million to £2.6 million. The Company expects the sale to be completed during the second half of 2026, subject to market conditions and customary closing procedures. The property was reclassified from property, plant and equipment to current assets held for sale and remeasured at the lower of carrying amount or fair value less costs to sell.
Our Segments
Our two reportable segments are Applied Workflow Automation and Technology. These segments are comprised of significant strategic business units that align our products and services with how we manage our business, approach our key markets, and interact with our clients based on their respective industries.
Applied Workflow Automation: the Applied Workflow Automation segment provides services powered by intelligent, AI-enabled workflows that generate outcomes for clients’ systems. Revenue primarily stems from transactions processed and includes payment processing, data capture, analysis, decisioning, distribution and transformation across industries and the public and private sectors, primarily in Americas and Europe, and increasingly in Asia. The Applied Workflow Automation segment includes the Company’s Bills & Payments, healthcare industry solutions, on-site enterprise solutions, integrated communications and enterprise legal management business units which serve leading banks, payers and providers, utilities as well as federal, regional and local government entities.
Technology: the Technology segment focuses on the sale of recurring and perpetual software licenses, software maintenance and professional services, as well as hardware solutions and maintenance. The Company offers an industry-agnostic and cross-departmental suite of products, with primary focus on scalable workflows leveraging AI through neural networks together with deep domain expertise. The Company also offers industry specific platforms for the banking and healthcare industries.
Revenues
The Company’s revenues are primarily generated from a transaction based pricing model for the various types of volumes processed and a mix of fixed management fee and transactional revenue for document logistics and location services. Our healthcare services business generates revenues primarily from a transaction based pricing model for the various types of volumes processed for healthcare payers and providers. Our support services in connection with various legal matters generate revenues primarily based on time and materials pricing as well as through transactional services priced on a per item basis. In addition, the Company also sells recurring and perpetual software licenses, as well as maintenance and other professional services. Licensing options are flexible, and clients can purchase a license covering a maximum number of transactions, as well as multi-year term licenses with flexible renewal options.
People
We draw on the business and technical expertise of our talented and diverse global workforce to provide our clients with high quality services. Our business leaders bring a strong diversity of experience in our industry and a track record of successful performance and execution.
As of June 30, 2026, we had approximately 9,200 employees globally, with approximately 4,700 employees located in Americas and EMEA, and the remainder located primarily in India and the Philippines.
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Costs associated with our employees represent the most significant expense for our business. We incurred personnel costs of $89.4 million and $180.4 million for the three and six months ended June 30, 2026 (Successor), respectively. We incurred personnel costs of $79.4 million and $160.6 million for the three and six months ended June 30, 2025 (Predecessor), respectively. The majority of our personnel costs are variable and are incurred only while we are providing our services. In certain jurisdictions, for example many countries in Europe, there is a statutory payment requirement for any people made redundant due to automation or relocation of delivery locations.
Key Performance Indicators
We use a variety of operational and financial measures to assess our performance. Among the measures considered by our management are the following:
| ● | Revenue by segment; |
| ● | Gross profit by segment; and |
| ● | Adjusted EBITDA (which is a non-GAAP financial measure). |
Revenue by segment
We analyze our revenue by comparing actual monthly revenue to internal projections and prior periods across our operating segments in order to assess performance, identify potential areas for improvement, and determine whether segments are meeting management’s expectations.
Gross profit by segment
The Company defines Gross Profit as revenue less cost of revenue (exclusive of depreciation and amortization). The Company uses Gross Profit by segment to assess financial performance at the segment level.
Non-GAAP Financial Measures
To supplement its financial data presented on a basis consistent with GAAP, this report contains certain non-GAAP financial measures, including EBITDA, Adjusted EBITDA and Pro forma Adjusted EBITDA. The Company has included these non-GAAP financial measures because they are financial measures used by management to evaluate the Company’s core operating performance and trends, and to make strategic decisions regarding the allocation of capital and new investments. We believe these measures also provide useful information to investors by allowing consistent period-to-period comparisons of our operating results after removing the effects of our capital structure, asset base, and certain non-recurring items. These measures exclude certain expenses that are required under GAAP. The Company excludes these items because they are non-recurring or non-cash expenses that are determined based in part on factors other than the Company’s underlying operating performance.
EBITDA, Adjusted EBITDA and Pro forma Adjusted EBITDA
We define EBITDA as net income (loss), plus taxes, interest expense, and depreciation and amortization. We define Adjusted EBITDA as EBITDA plus non-recurring transaction costs, non-cash equity compensation, restructuring and related expenses, loss/(gain) on sale of assets, impairment of goodwill and other non-recurring items such as reorganization items. We define Pro forma Adjusted EBITDA as Adjusted EBITDA plus management’s estimates of the impact of the Business Combination and Restructuring, had such transactions occurred at the beginning of the earliest period presented.
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Results of Operations
Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025:
| | | | | | | | | | | | | |
| | Successor | | | Predecessor | | | | | | | ||
| | Three Months Ended June 30, | | | Three Months Ended June 30, | | | | | | | ||
| | 2026 | | | 2025 | | Change | | % Change | ||||
Revenue (including related party revenue): |
| | | |
| | | | | |
| | |
Applied Workflow Automation | | $ | 166,790 | | | $ | 170,517 | | $ | (3,727) | | | (2.2)% |
Technology | |
| 24,521 | | |
| 12,195 | |
| 12,326 | |
| 101.1% |
Total revenue | |
| 191,311 | | |
| 182,712 | |
| 8,599 | |
| 4.7% |
Cost of revenue (exclusive of depreciation and amortization): | |
| | | |
| | |
| | |
| |
Applied Workflow Automation | |
| 139,984 | | |
| 140,468 | |
| (484) | |
| (0.3)% |
Technology | |
| 10,171 | | |
| 4,584 | |
| 5,587 | |
| 121.9% |
Total cost of revenues (exclusive of depreciation and amortization) | |
| 150,155 | | |
| 145,052 | |
| 5,103 | |
| 3.5% |
Selling, general and administrative expenses | |
| 27,936 | | |
| 20,719 | |
| 7,217 | |
| 34.8% |
Depreciation and amortization | |
| 15,268 | | |
| 8,582 | |
| 6,686 | |
| 77.9% |
Related party expense | |
| 1,674 | | |
| 2,793 | |
| (1,119) | |
| (40.1)% |
Operating profit (loss) | |
| (3,722) | | |
| 5,566 | |
| (9,288) | |
| (166.9)% |
Interest expense, net | |
| 13,890 | | |
| 46,942 | |
| (33,052) | |
| (70.4)% |
Debt modification and extinguishment costs (gain), net | | | — | | | | 12 | | | (12) | | | (100.0)% |
Sundry expense, net | |
| 1,409 | | |
| 693 | |
| 716 | |
| 103.3% |
Other income, net | |
| (561) | | |
| (25) | |
| (536) | |
| 2144.0% |
Loss before reorganization items and income taxes | | | (18,460) | | | | (42,056) | | | 23,596 | | | (56.1)% |
Reorganization items, net | | | — | | | | 22,505 | | | (22,505) | | | 100.0% |
Net loss before income taxes | |
| (18,460) | | |
| (64,561) | |
| 46,101 | |
| (71.4)% |
Income tax expense (benefit) | |
| (1,756) | | |
| 500 | |
| (2,256) | |
| (451.2)% |
Net loss | | $ | (16,704) | | | $ | (65,061) | | $ | 48,357 | |
| (74.3)% |
Revenue
For the three months ended June 30, 2026, our net revenue on a consolidated basis increased by $8.6 million, or 4.7%, to $191.3 million from $182.7 million (including related party revenue of $0.5 million) for the three months ended June 30, 2025.
Applied Workflow Automation and Technology segments constituted 87.2%, and 12.8%, respectively, of our total net revenue for the three months ended June 30, 2026, compared to 93.3%, and 6.7%, respectively, for the three months ended June 30, 2025. The revenue changes by reporting segment were as follows:
Applied Workflow Automation—Net revenue attributable to Applied Workflow Automation segment was $166.8 million for the three months ended June 30, 2026, compared to $170.5 million for the three months ended June 30, 2025. The revenue decrease of $3.7 million, or 2.2%, is primarily attributable to lower volume and customer exits, partially offset by the inclusion of a newly acquired entity in the successor period and revenue from newly won business.
Technology—For the three months ended June 30, 2026, net revenue attributable to the Technology segment increased by $12.3 million or 101.1%, to $24.5 million from $12.2 million for the three months ended June 30, 2025. The revenue increase in the Technology segment was largely due to the inclusion of a newly acquired entity in the successor period.
Cost of revenue
For the three months ended June 30, 2026, the cost of revenue increased by $5.1 million, or 3.5%, compared to the three months ended June 30, 2025.
The cost of revenue in the Applied Workflow Automation segment decreased by $0.5 million, or 0.3%, primarily due to reduced cost resulting from completed projects and optimization efforts and partially offset by the inclusion of the newly acquired entity in the successor period within the Applied Workflow Automation segment, and cost provision created for ongoing restructuring expenses.
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The cost of revenue in the Technology segment increased by $5.6 million, or 121.9%, primarily due to the inclusion of the newly acquired entity in the successor period within the Technology segment.
The cost of revenue, as a percentage of revenue on a consolidated basis, was 78.5% of revenue for the three months ended June 30, 2026 compared to 79.4% of revenue for the three months ended June 30, 2025. This decrease was primarily due to a change in the revenue mix and executed optimization efforts.
Selling, general and administrative expenses
Selling, general and administrative expenses (“SG&A expenses”) increased by $7.2 million, or 34.8%, to $27.9 million for the three months ended June 30, 2026, compared to $20.7 million for the three months ended June 30, 2025. The increase was primarily attributable to the inclusion of a newly acquired entity in successor period. SG&A expenses increased as a percentage of revenues to 14.6% for the three months ended June 30, 2026 as compared to 11.3% for the three months ended June 30, 2025.
Depreciation and amortization
Total depreciation and amortization expenses were $15.3 million for the three months ended June 30, 2026 compared to $8.6 million for the three months ended June 30, 2025.
Related party expenses
Related party expense was $1.7 million for the three months ended June 30, 2026 compared to $2.8 million for the three months ended June 30, 2025.
Interest expense, net
Interest expense, net was $13.9 million for the three months ended June 30, 2026 compared to expense of $46.9 million for the three months ended June 30, 2025.
Debt modification and extinguishment costs (gain), net
There was no debt modification and extinguishment cost for the three months ended June 30, 2026 while there was less than $0.1 million of debt modification and extinguishment cost for the three months ended June 30, 2025.
Sundry expense, net
The increase in sundry expense, net of $0.7 million over the prior year period, was primarily attributable to exchange rate fluctuations on foreign currency transactions.
Other income, net
Other income, net, was a gain of $0.6 million for the three months ended June 30, 2026 compared to other income, net of $0.02 million for the three months ended June 30, 2025.
Reorganization items
Reorganization items of $22.5 million for the three months ended June 30, 2025 represents legal and professional fees paid in connection with Chapter 11 Cases.
Income tax expense (benefit)
We recorded an income tax benefit of $1.8 million for the three months ended June 30, 2026 and an income tax expense of $0.5 million for the three months ended June 30, 2025. The tax expense decreased in three months ended
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June 30, 2026 compared to the three months ended June 30, 2025 due to changes in valuation allowances and decrease in foreign earnings. Our ETR of 9.5% for the three months ended June 30, 2026 differed from the expected U.S. statutory tax rate of 21.0% and was primarily impacted by federal and state change in valuation allowance on disallowed interest coupled with change in valuation allowance related to foreign current year NOL.
Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025:
| | | | | | | | | | | | | |
| | Successor | | | Predecessor | | | | | | | ||
| | Six Months Ended June 30, | | | Six Months Ended June 30, | | | | | | | ||
| | 2026 | | | 2025 | | Change | | % Change | ||||
Revenue (including related party revenue): |
| | | |
| | | | | |
| | |
Applied Workflow Automation | | $ | 345,169 | | | $ | 348,428 | | $ | (3,259) | | | (0.9)% |
Technology | |
| 43,227 | | |
| 26,264 | |
| 16,963 | |
| 64.6% |
Total revenue | |
| 388,396 | | |
| 374,692 | |
| 13,704 | |
| 3.7% |
Cost of revenue (exclusive of depreciation and amortization): | |
| | | |
| | |
| | |
| |
Applied Workflow Automation | |
| 282,975 | | |
| 286,536 | |
| (3,561) | |
| (1.2)% |
Technology | |
| 19,077 | | |
| 9,161 | |
| 9,916 | |
| 108.2% |
Total cost of revenues | |
| 302,052 | | |
| 295,697 | |
| 6,355 | |
| 2.1% |
Selling, general and administrative expenses (exclusive of depreciation and amortization) | |
| 70,751 | | |
| 42,980 | |
| 27,771 | |
| 64.6% |
Depreciation and amortization | |
| 30,117 | | |
| 19,120 | |
| 10,997 | |
| 57.5% |
Related party expense | |
| 4,280 | | |
| 5,346 | |
| (1,066) | |
| (19.9)% |
Operating profit (loss) | |
| (18,804) | | |
| 11,549 | |
| (30,353) | |
| (262.8)% |
Interest expense, net | |
| 27,959 | | |
| 70,721 | |
| (42,762) | |
| (60.5)% |
Debt modification and extinguishment costs (gain), net | | | — | | | | 121 | | | (121) | | | (100.0)% |
Sundry expense, net | |
| 1,017 | | |
| 2,005 | |
| (988) | |
| (49.3)% |
Other income, net | |
| (1,122) | | |
| (48) | |
| (1,074) | |
| 2237.5% |
Loss before reorganization items and income taxes | | | (46,658) | | | | (61,250) | | | 14,592 | | | (23.8)% |
Reorganization items | | | — | | | | (38,340) | |
| 38,340 | | | 100.0% |
Net loss before income taxes | |
| (46,658) | | |
| (22,910) | |
| (23,748) | |
| 103.7% |
Income tax expense (benefit) | |
| (3,191) | | |
| 2,528 | |
| (5,719) | |
| (226.2)% |
Net loss | | $ | (43,467) | | | $ | (25,438) | | $ | (18,029) | |
| 70.9% |
Revenue
For the six months ended June 30, 2026, our net revenue on a consolidated basis increased by $13.7 million, or 3.7%, to $388.4 million from $374.7 million (including related party revenue of $2.0 million) for the six months ended June 30, 2025.
Applied Workflow Automation and Technology segments constituted 88.9%, and 11.1%, respectively, of our total net revenue for the six months ended June 30, 2026, compared to 93.0%, and 7.0%, respectively, for the six months ended June 30, 2025. The revenue changes by reporting segment were as follows:
Applied Workflow Automation—Net revenue attributable to Applied Workflow Automation segment was $345.2 million for the six months ended June 30, 2026, compared to $348.4 million for the six months ended June 30, 2025. The revenue decrease of $3.3 million, or 0.9%, is primarily attributable to lower volume and customer exits, partially offset by the inclusion of a newly acquired entity in the successor period and revenue from newly won business.
Technology—For the six months ended June 30, 2026, net revenue attributable to the Technology segment increased by $17.0 million or 64.6%, to $43.2 million from $26.3 million for the six months ended June 30, 2025. The revenue increase in the Technology segment was largely due to the inclusion of a newly acquired entity in the successor period.
Cost of revenue
For the six months ended June 30, 2026, the cost of revenue increased by $6.4 million, or 2.1%, compared to the six months ended June 30, 2025.
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The cost of revenue in the Applied Workflow Automation segment decreased by $3.6 million, or 1.2%, primarily due to reduced cost resulting from completed projects and optimization efforts and partially offset by the inclusion of the newly acquired entity in the successor period within the Applied Workflow Automation segment.
The cost of revenue in the Technology segment increased by $9.9 million, or 108.2%, primarily due to the inclusion of the newly acquired entity in the successor period within the Technology segment.
The cost of revenue, as a percentage of revenue on a consolidated basis, was 77.8% of revenue for the six months ended June 30, 2026 compared to 78.9% of revenue for the six months ended June 30, 2025. This decrease was primarily due to a change in the revenue mix and executed optimization efforts.
Selling, general and administrative expenses
Selling, general and administrative expenses (“SG&A expenses”) increased by $27.8 million, or 64.6%, to $70.8 million for the six months ended June 30, 2026, compared to $43.0 million for the six months ended June 30, 2025. The increase was primarily attributable to an increase in restructuring charges under the 2026 program, the inclusion of a newly acquired entity in successor period, an $8.6 million charge to refine the Company's estimate of the general unsecured claims liability based on updated information from the post-emergence claims reconciliation process, the original measurement adjustment of which was recognized as gain in Reorganization items, net in the Predecessor period, and an increase in legal and professional fees. SG&A expenses increased as a percentage of revenues to 18.2% for the six months ended June 30, 2026 as compared to 11.5% for the six months ended June 30, 2025.
Depreciation and amortization
Total depreciation and amortization expenses were $30.1 million for the six months ended June 30, 2026 compared to $19.1 million for the six months ended June 30, 2025.
Related party expenses
Related party expense was $4.3 million for the six months ended June 30, 2026 compared to $5.3 million for the six months ended June 30, 2025.
Interest expense, net
Interest expense, net was $28.0 million for the six months ended June 30, 2026 compared to expense of $70.7 million for the six months ended June 30, 2025.
Debt modification and extinguishment costs (gain), net
There was no debt modification and extinguishment cost for the six months ended June 30, 2026 while there was $0.1 million of debt modification and extinguishment cost for the six months ended June 30, 2025.
Sundry expense, net
The decrease in sundry expense, net of $1.0 million over the prior year period, was primarily attributable to exchange rate fluctuations on foreign currency transactions.
Other income, net
Other income, net, was a gain of $1.1 million for the six months ended June 30, 2026 compared to other income, net of $0.05 million for the six months ended June 30, 2025.
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Reorganization items
Reorganization items for the six months ended June 30, 2025 include $43.0 million of legal and professional fees paid in connection with Chapter 11 Cases and $81.3 million of gain on account of derecognition of the unamortized debt premium net of unamortized debt discount and unamortized debt issuance costs.
Income tax expense (benefit)
We recorded an income tax benefit of $3.2 million for the six months ended June 30, 2026 and an income tax expense of $2.5 million for the six months ended June 30, 2025. The tax expense decreased in six months ended June 30, 2026 compared to the six months ended June 30, 2025 due to changes in valuation allowances and decrease in foreign earnings. Our ETR of 6.8% for the six months ended June 30, 2026 differed from the expected U.S. statutory tax rate of 21.0% and was primarily impacted by federal and state change in valuation allowance on disallowed interest coupled with change in valuation allowance related to foreign current year NOL.
Other Financial Information (Non-GAAP Financial Measures)
We view EBITDA, Adjusted EBITDA, and Pro forma Adjusted EBITDA as important indicators of performance. We define EBITDA as net (loss) income, plus income tax expenses, interest expense, net and depreciation and amortization. We define Adjusted EBITDA as EBITDA plus non-recurring transaction costs, non-cash equity compensation, restructuring and related expenses, loss/(gain) on sale of assets, impairment of goodwill and other non-recurring items such as reorganization items. We define Pro forma Adjusted EBITDA as Adjusted EBITDA plus management’s estimates of the impact of the acquisition of XBP Europe Holdings, Inc. and reorganization of BPA, had such transactions occurred at the beginning of the earliest period presented.
We present EBITDA, Adjusted EBITDA and Pro forma Adjusted EBITDA because we believe they provide useful information regarding the factors and trends affecting our business in addition to measures calculated under GAAP.
Note Regarding Non-GAAP Financial Measures
EBITDA, Adjusted EBITDA, and Pro forma Adjusted EBITDA are not financial measures presented in accordance with GAAP. We believe that the presentation of these non-GAAP financial measures will provide useful information to investors in assessing our financial performance and results of operations as our board of directors and management use EBITDA, Adjusted EBITDA and Pro forma Adjusted EBITDA to assess our financial performance, because it allows them to compare our operating performance on a consistent basis across periods by removing the effects of our capital structure (such as varying levels of interest expense), asset base (such as depreciation and amortization) and items outside the control of our management team. Net income/loss is the GAAP measure most directly comparable to EBITDA, Adjusted EBITDA, and Pro forma Adjusted EBITDA. Our non-GAAP financial measures should not be considered as alternatives to the most directly comparable GAAP financial measure. Each of these non-GAAP financial measures has important limitations as analytical tools because they exclude some, but not all, items that affect the most directly comparable GAAP financial measures. These non-GAAP financial measures are not required to be uniformly applied, are not audited and should not be considered in isolation or as substitutes for results prepared in accordance with GAAP. Because EBITDA, Adjusted EBITDA and Pro forma Adjusted EBITDA may be defined differently by other companies in our industry, our definitions of these non-GAAP financial measures may not be comparable to similarly titled measures of other companies, thereby diminishing their utility.
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Three Months Ended June 30, 2026 Compared to the Three Months Ended June 30, 2025
The following table presents a reconciliation of EBITDA, Adjusted EBITDA and Pro forma Adjusted EBITDA to our net profit (loss), the most directly comparable GAAP measure, for the three months ended June 30, 2026 (Successor) and 2025 (Predecessor).
| | | | | | | |
| | | Successor | | | | Predecessor |
| | Three Months Ended June 30, | | | Three Months Ended June 30, | ||
| | 2026 | | | 2025 | ||
Net Loss | | $ | (16,704) | | | $ | (65,061) |
Income tax expense (benefit) | |
| (1,756) | | |
| 500 |
Interest expense, net | |
| 13,890 | | |
| 46,942 |
Depreciation and amortization | |
| 15,268 | | |
| 8,582 |
EBITDA | |
| 10,698 | | |
| (9,037) |
Transaction costs (1) | |
| 1,429 | | |
| — |
Non-cash equity compensation (2) | |
| 533 | | |
| 99 |
Restructuring and related expenses (3) | | | 6,457 | | | | — |
Loss/(gain) on sale of assets (4) | | | 156 | | | | (9) |
Debt modification and extinguishment costs (gain), net | | | — | | | | 12 |
Reorganization items, net | | | — | | | | 22,505 |
Adjusted EBITDA | | | 19,273 | | | | 13,570 |
Impact of acquisition and reorganization (5) | | | — | | | | 1,286 |
Pro forma Adjusted EBITDA | | $ | 19,273 | | | $ | 14,856 |
| (1) | Represents non-recurring legal, consulting and other fees and expenses incurred in connection with acquisitions, dispositions, debt-exchanges and other extraordinary transactions and events during the applicable period. |
| (2) | Represents the non-cash charges related to stock-based compensation. |
| (3) | Represents provision for restructuring of European operations and certain other one-time exit costs. |
| (4) | Represents a loss/(gain) recognized on the disposal of property, plant, and equipment and other assets. |
| (5) | Represents management’s estimates of the impact of the acquisition of XBP Europe Holdings, Inc. and reorganization of BPA, had such transactions occurred at the beginning of fiscal 2025. |
Six Months Ended June 30, 2026 Compared to the Six Months Ended June 30, 2025
The following table presents a reconciliation of EBITDA, Adjusted EBITDA and Pro forma Adjusted EBITDA to our net profit (loss), the most directly comparable GAAP measure, for the six months ended June 30, 2026 (Successor) and 2025 (Predecessor).
| | | | | | | |
| | Successor | | | Predecessor | ||
| | Six Months Ended June 30, | | | Six Months Ended June 30, | ||
| | 2026 | | | 2025 | ||
Net profit (loss) | | $ | (43,467) | | | $ | (25,438) |
Income tax expense (benefit) | |
| (3,191) | | |
| 2,528 |
Interest expense, net | |
| 27,959 | | |
| 70,721 |
Depreciation and amortization | |
| 30,117 | | |
| 19,120 |
EBITDA | |
| 11,418 | | |
| 66,931 |
Transaction costs (1) | |
| 1,910 | | |
| — |
Non-cash equity compensation (2) | |
| 1,017 | | |
| 204 |
Restructuring and related expenses (3) | | | 6,457 | | | | — |
Loss/(gain) on sale of assets (4) | | | 381 | | | | (9) |
Debt modification and extinguishment costs (gain), net | | | — | | | | 121 |
Reorganization items | | | — | | | | (38,340) |
Adjusted EBITDA | | | 21,183 | | | | 28,907 |
Impact of acquisition and reorganization (5) | | | — | | | | 2,644 |
Pro forma Adjusted EBITDA | | $ | 21,183 | | | $ | 31,551 |
| (1) | Represents non-recurring legal, consulting and other fees and expenses incurred in connection with acquisitions, dispositions, debt-exchanges and other extraordinary transactions and events during the applicable period. |
| (2) | Represents the non-cash charges related to stock-based compensation. |
| (3) | Represents provision for restructuring of European operations and certain other one-time exit costs. |
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| (4) | Represents a loss/(gain) recognized on the disposal of property, plant, and equipment and other assets. |
| (5) | Represents management’s estimates of the impact of the acquisition of XBP Europe Holdings, Inc. and reorganization of BPA, had such transactions occurred at the beginning of fiscal 2025. |
Liquidity and Capital Resources
Overview
Our principal source of liquidity is cash generated from operating activities supplemented as necessary on a short-term basis by borrowings. As of June 30, 2026, we had total indebtedness of $372.9 million, and we incurred interest expense of approximately $13.9 million and $28.0 million for the three and six months ended June 30, 2026 (Successor), respectively. We believe our current level of cash and short-term financing capabilities along with future cash flows from operations are sufficient to meet the needs of the business for at least the next twelve months. However, compliance with the Company’s restrictive financial covenants in the Company’s financing agreements is tested as of specified measurement dates and may, from time to time, depend on the Company’s operating performance and the successful execution of planned transactions, including asset dispositions or other balance sheet actions. Our ability to meet those financial covenants can be affected by events beyond our control, and we may not be able to meet those covenants. There can be no assurance that any planned transactions will be completed on a timely basis, on acceptable terms, or at all. Even if the Company is in compliance with its debt covenants as of the date of filing of this Quarterly Report, subsequent developments or our inability to successfully execute planned transactions could result in non-compliance in future periods.
Liquidity is the availability of adequate amounts of cash with an enterprise to meet its cash requirements. At June 30, 2026 (Successor) and December 31, 2025 (Successor) cash, restricted cash, and cash equivalents totaled $28.0 million and $68.7 million, respectively, including restricted cash of $9.4 million and $31.6 million, respectively.
In the ordinary course of business, we enter into contracts and commitments that obligate us to make payments in the future. These obligations include borrowings, interest obligations, purchase commitments, operating and finance lease commitments, employee benefit payments and taxes. The current maturities of outstanding principal amounts under the Second Lien Note, the secured borrowings under the Amended BR Exar AR Facility, the 2028 Term Loan Facilities (each as defined and further described in “Indebtedness” below) and other debt are $9.5 million, $5.6 million, $3.2 million and $7.7 million, respectively. We were in compliance with all financial covenants as of June 30, 2026, except for the consolidated total leverage ratio covenant and the consolidated interest coverage ratio covenant under the European Senior Credit Facilities Agreement. The lender has acknowledged this matter, and no remedies were exercised or are expected to be exercised. In addition, as of June 30, 2026 the Company was not in compliance with the requirement under its Super Senior Term Loan, its Second Lien Note and its ABL Facility to make certain tax payments required under the Plan; the resulting events of default were waived in August 2026, as described in Note 15, Subsequent Events. At June 30, 2026 the Company had a restructuring liability of $3.5 million, recorded within accrued liabilities, expected to be paid during the second half of 2026. The Company expects to receive net cash proceeds of approximately £2.5 million (approximately $3.3 million) on completion of the sale of assets held for sale. The Company expects that a substantial portion of the proceeds will be used to prepay its obligations under the European Senior Credit Facilities Agreement (as defined and described further in the description of “Indebtedness” below). See Note 6, Long-term Debt and Credit Facilities, Note 8, Employee Benefit Plans, and Note 9, Commitments and Contingencies, to our condensed consolidated and combined financial statements herein for further information on material cash requirements from known contractual and other obligations.
The Predecessor recently emerged from the Chapter 11 Cases. As a result, near-term liquidity is expected to be negatively impacted due to the requirement to satisfy certain pre-petition liabilities pursuant to the Plan. This constrained liquidity is expected to continue until such time as these liabilities are fully settled. In addition, our indebtedness that we incurred in connection with or that otherwise survived the Restructuring limits our financial flexibility and requires substantial ongoing cash flows for debt service.
We plan to spend approximately 1.0% of total revenue on total capital expenditures over the next twelve months. Our business model has evolved to leverage cloud hosted platforms. This has reduced our capital expenditures and increased our operating expenses. This is the primary driver of changes in our capital expenditures when compared with historical periods. Our future cash requirements will depend on many factors, including our rate of revenue growth
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and our investments in strategic initiatives, applications or technologies, operation centers and acquisitions of complementary businesses, any of which may require the use of significant cash resources or additional equity or debt financing. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all, which may adversely impact our business, operating results and financial condition.
The Company utilized COVID-19 relief measures in various European jurisdictions, including permitted deferrals of certain payroll, social security and value added taxes. At the end of the third quarter of 2024, the Company paid a significant portion of these deferred payroll, social security and value added taxes. The remaining balance of deferred payroll, social security and value added taxes was fully paid and discharged in July 2026 in accordance with deferment timelines established by local laws and regulations.
The Company believes the current cash, cash equivalents and cash flows from operating and financing activities are sufficient to meet the Company’s working capital and capital expenditure requirements for a period of at least twelve months. In addition, the Company actively manages its capital structure and evaluates a range of financing alternatives to support its operating plan and long-term objectives. To the extent existing cash, cash from operations, and amounts available for borrowing are insufficient to fund future activities, the Company may need to raise additional capital. The Company may require funding for a variety of reasons, including, but not limited to, investments in strategic initiatives, business development activities, variability in operating results, or the need to maintain flexibility under the financial covenants in its financing agreements. There can be no assurance that such financing, if and when pursued, would be available on terms acceptable to the Company or at all. To the extent that the Company raises additional funds by issuing equity securities, its stockholders may experience dilution. Any debt financing, if available, may involve restrictive covenants that may impact the Company’s ability to conduct business or return capital to investors. If financing is not available on acceptable terms when needed, the Company may adjust the timing or scope of certain discretionary initiatives in order to align spending with available resources. Further, any failure to comply with the restrictive covenants in the Company’s financing agreements, if not waived or cured, could result in an event of default. In such circumstances, the Company may be required to seek waivers or amendments from its lenders, which may not be granted and, if granted, could impose additional costs, more restrictive terms or other adverse conditions. The need to obtain future waivers or amendments could adversely affect the Company’s liquidity, access to capital and business prospects. An event of default could permit lenders to accelerate the Company’s indebtedness and exercise remedies against collateral securing such indebtedness. The Company actively monitors its covenant compliance, maintains regular dialogue with its lenders, and continues to pursue operational and strategic actions, including ongoing cost optimization and disciplined capital allocation, that are intended to ensure sufficient liquidity and enhance capital structure flexibility over time.
In addition to the foregoing, the Company is pursuing a number of initiatives intended to enhance its liquidity and preserve financial flexibility over the next twelve months. The Company is executing cost savings initiatives across its operations, including a payroll reduction program, the restructuring of its European operations, and the migration of additional transaction volumes to the Company’s automated processing platforms. The Company is also evaluating an equity financing to supplement its liquidity, although it has not entered into any agreement with respect to any such financing, and the timing, size, structure and terms of any such financing would remain subject to market conditions and other factors. In addition, the Company has engaged brokers and is actively marketing for sale its Baronsmede property in Egham, United Kingdom, which was classified as held for sale as of June 30, 2026 and which the Company expects to sell during the second half of 2026, as well as its property in Chennai, India. Net proceeds from any completed property sales are expected to be applied to the repayment of indebtedness, including as may be required under the Company’s financing agreements, and for general corporate purposes. The Company is also evaluating strategic alternatives intended to accelerate value realization and optimize its capital structure, which may include dispositions of assets or businesses. In April 2026, the Company’s board of directors authorized management to consult with one or more financial advisors in connection with this evaluation, and the Company has engaged financial advisors for this purpose. On July 27, 2026, the board of directors established a Strategic Alternatives and Transactions Committee, comprised solely of independent directors, to evaluate and make recommendations to the board of directors with respect to potential strategic transactions. The committee’s role is advisory, and any transaction would remain subject to approval by the full board of directors. The Company has not committed to any specific transaction, and no assurance can be given that any of the initiatives described above will be completed on the anticipated timeline or on acceptable terms, or at all, or that they will yield the liquidity benefits currently expected. See “Potential Future Transactions” below.
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Known Trends and Uncertainties
The workflow automation and business process services industry continues to face pricing pressure from competitive bidding and accelerating disruption from agentic AI and intelligent automation. During the second quarter of 2026, these dynamics persisted as enterprise clients continued to shift toward outcome-based and AI-augmented delivery models, which may compress renewal pricing on long-term contracts, prompt productivity-sharing arrangements with clients, and lengthen sales and implementation cycles for newer AI-enabled offerings. An operating footprint carrying more legal entities and small business units than the current scale of our business supports led us to commit during the quarter to a restructuring program across our European operations. We are exposed to these trends through our reliance on long-term contracts that may be renewed at lower rates or terminated early.
Although no single client exceeded 10% of revenue, concentration remains in financial services, healthcare, and government, where regulatory complexity, procurement cycles, and budgetary constraints can affect contract timing and renewal economics. Declining postage and other physical mail volumes, together with lower one-time project work, reduced Applied Workflow Automation revenue during the second quarter of 2026 and may continue to weigh on that segment. We also continue to absorb transitional impacts from the July 2025 restructuring, including residual client and vendor uncertainty, integration costs, and refinements to our estimate of general unsecured claims as the post-emergence claims reconciliation process progresses. Persistent inflation, foreign-exchange volatility, and tariff and energy-related cost pressures observed during the quarter may further weigh on near-term revenue conversion and input costs. Geopolitical tensions and related changes in trade policies, tariffs, sanctions, and government spending priorities may further affect client demand, operating costs, supply chains, and the timing or economics of contracts, particularly in our European and public-sector operations.
We believe these trends are reasonably likely to affect our future results of operations and liquidity. Management is addressing them through cost optimization, expansion of offshore and automated delivery, targeted client retention initiatives in regulated and mission-critical workflows, and continued integration of the acquired operations. During the second quarter of 2026, we advanced these initiatives through the restructuring of European operations, which affects 245 employees and gave rise to $5.0 million of restructuring charges, the planned sale of our Baronsmede property, and further wins for our agentic AI-enabled offerings in European public-sector and financial-services accounts. The anticipated benefits may not be realized on the expected timeline or scale, and our capacity to fund these actions remains subject to constrained near-term liquidity, the settlement of pre-petition liabilities, and compliance with the financial covenants in our financing agreements, which has required, and may in the future require, waivers from our lenders.
Cash Flows
The following table summarizes our cash flows for the periods indicated:
| | | | | | | | | | |
| | Successor | | | Predecessor | | | | ||
| | Six Months Ended June 30, | | | Six Months Ended June 30, | | | | ||
| | 2026 | | | 2025 | | Change | |||
Net cash used in operating activities | | $ | (15,186) | | | $ | (75,863) | | $ | 60,677 |
Net cash used in investing activities | |
| (3,333) | | |
| (3,241) | | | (92) |
Net cash provided by (used in) financing activities | |
| (21,759) | | |
| 60,199 | |
| (81,958) |
Subtotal | | $ | (40,278) | | |
| (18,905) | | $ | (21,373) |
Effect of exchange rates on cash, restricted cash and cash equivalents | |
| (429) | | |
| 113 | |
| (542) |
Net decrease in cash, restricted cash and cash equivalents | | $ | (40,707) | | | $ | (18,792) | | $ | (21,915) |
Analysis of Cash Flow Changes between the Six Months Ended June 30, 2026 and June 30, 2025
Operating Activities— The reduction of $60.7 million in net cash used in operating activities for the six months ended June 30, 2026 (Successor) was primarily due to no cash paid for reorganization activities in 2026 compared to $43.0 million paid in 2025, a $29.5 million favorable change in accounts receivable, a $5.0 million favorable change in prepaid expenses and other current assets and decrease in loss before reorganization items in 2026 compared to 2025. This reduction in net cash used in operating activities was partially offset by an increase in payments for accounts
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payable and accrued liabilities by $42.9 million, higher interest payments of $15.1 million and a $3.3 million unfavorable change in related party receivables (payables).
Investing Activities— Net cash used in investing activities increased by $0.1 million, from $3.2 million used in the six months ended June 30, 2025 (Predecessor) to $3.3 million used in the six months ended June 30, 2026 (Successor). The increase was primarily due to a $0.2 million increase in cash paid for purchases of property, plant and equipment, partially offset by a $0.1 million increase in proceeds from the sale of property, plant and equipment.
Financing Activities— Net cash used in financing activities was $21.8 million for the six months ended June 30, 2026 (Successor), compared with net cash provided by financing activities of $60.2 million for the six months ended June 30, 2025 (Predecessor), a decrease of $82.0 million. Cash inflows during the six months ended June 30, 2026 (Successor) consisted primarily of $272.8 million of proceeds from the ABL Facility, $24.6 million of borrowings under the Amended BR Exar AR Facility, $20.8 million of proceeds from other loans, $10.0 million of proceeds from the Super Senior Term Loan, and $0.9 million of proceeds from the issuance of July 2030 Notes. These inflows were more than offset by $289.1 million of repayments on the ABL Facility, $1.6 million of principal repayments on 2028 Term Loan Facilities, $28.5 million of principal repayments on senior secured term loans and other loans, $19.0 million of repayments under the Amended BR Exar AR Facility and $1.4 million of repayment under the BR Exar AR Facility, $6.3 million of repayment of the Second Lien Note, $2.4 million of principal payments on finance lease obligations, $2.5 million of cash paid for debt issuance costs, and $0.1 million of cash paid for withholding taxes on vested RSUs.
Net cash provided by financing activities of $60.2 million for the six months ended June 30, 2025 (Predecessor) primarily reflected $80.0 million of proceeds from new-money loans borrowed pursuant to a debtor-in-possession (“DIP”) financing agreement entered into in connection with the Chapter 11 Cases (“DIP New Money Loans”), $15.8 million of borrowings under the BR Exar AR Facility, and $3.3 million of proceeds from other loans. These inflows were partially offset by $22.9 million of repayments under the BR Exar AR Facility, $13.1 million of principal repayments on senior secured term loans and other loans, $2.7 million of principal payments on finance lease obligations, and $0.2 million of cash paid for debt issuance costs (all as defined and described further in the description of “Indebtedness” below).
Indebtedness
Following is a description of the Company’s principal indebtedness.
July 2030 Notes
On July 29, 2025, Exela Technologies BPA, LLC and Exela Finance Inc., wholly-owned subsidiaries of the Company (for this purpose, together, the “2030 Notes Issuers”), certain guarantors and U.S. Bank Trust Company, National Association, as trustee, entered into an indenture (the “July 2030 Notes Indenture”) governing the Company’s 12.0% First-Priority Senior Secured Notes due 2030 (the “July 2030 Notes”). The July 2030 Notes bear interest at a fixed rate of 12.0% per annum, payable quarterly on January 15, April 15, July 15 and October 15 of each year, commencing January 15, 2026, and mature on July 15, 2030. Interest on overdue amounts accrues at the stated rate plus 2.0% per annum.
The Company issued approximately $183.0 million aggregate principal amount of the July 2030 Notes pursuant to the Plan, which may be supplemented by additional issuances in accordance with the July 2030 Notes Indenture. In December 2025, the Company issued an additional $4.0 million in aggregate principal amount of the July 2030 Notes generating net proceeds of $3.5 million. On May 8, 2026, the Company sold $1.0 million in aggregate principal amount of July 2030 Notes, previously held internally by a subsidiary of the Company, to an entity affiliated with the Chairman of the Company's board of directors, generating net proceeds of approximately $0.9 million. After giving effect to this transaction, $188.0 million aggregate principal amount of the July 2030 Notes remained outstanding as of June 30, 2026.
The July 2030 Notes may be redeemed, in whole or in part, at the 2030 Notes Issuers’ option at any time, upon not less than 10 nor more than 30 days’ prior notice, at a redemption price equal to 100% of the principal amount redeemed plus accrued and unpaid interest to, but excluding, the redemption date. In addition, the July 2030 Notes are subject to repurchase requirements upon the occurrence of certain specified events, including upon a change of control,
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at 101% of principal plus accrued and unpaid interest and on certain asset sales or debt proceeds at 100% of principal plus accrued and unpaid interest.
The July 2030 Notes Indenture limits the ability of the 2030 Notes Issuers and the guarantors to incur additional debt, pay dividends or make other restricted payments, make certain investments, create or permit liens on assets, sell or dispose of assets, and enter into transactions with affiliates, in each case subject to specified exceptions. Events of default include the failure to pay principal, interest or other amounts when due, the failure to comply with covenants or other agreements in the July 2030 Notes Indenture, defaults on other material indebtedness of the 2030 Notes Issuers or the guarantors, certain bankruptcy or insolvency events, and the entry of material judgments against the 2030 Notes Issuers or the guarantors. If an event of default occurs and is continuing, the July 2030 Notes may be declared immediately due and payable, and in the case of bankruptcy or insolvency events, the July 2030 Notes automatically become immediately due and payable.
The obligations under the July 2030 Notes are fully and unconditionally guaranteed on a senior secured basis by the 2030 Notes Issuers’ U.S. subsidiary guarantors and are secured by liens on the collateral of the 2030 Notes Issuers and such guarantors, subject to permitted liens and the terms of the Super Senior, ABL and Equal Priority Intercreditor Agreements. Under these agreements, the ABL Lenders (as described below) hold first-priority liens on receivables, inventory, cash and related assets, while the Super Senior Term Loan Lenders (as described below) and July 2030 Noteholders hold junior liens on such assets. With respect to fixed assets, equity interests, intellectual property and related assets, the Super Senior Term Loan Lenders hold first-priority liens and July 2030 Noteholders share equal second-priority liens on a pari passu basis with holders of outstanding general unsecured claims in the Chapter 11 Cases, while the ABL Lenders hold junior liens.
Super Senior Term Loan
On July 29, 2025, Exela Technologies BPA, LLC and Exela Finance Inc. (for this purpose, together, the “Super Senior Term Loan Borrowers”), each subsidiary of Exela Technologies BPA, LLC, as guarantors, Ankura Trust Company, LLC, as administrative agent and collateral agent, and certain lenders (the “Super Senior Term Loan Lenders”) entered into a Financing Agreement (as amended, the “Super Senior Term Loan”), in accordance with the Plan. The Super Senior Term Loan provided for an aggregate principal amount of up to $46.0 million in senior secured term loans, consisting of (i) $40.0 million in new-money term loans, used to refinance obligations under BPA’s prepetition senior secured financing agreement and pay related fees and expenses, and (ii) $6.0 million in term loans issued to DIP lenders in exchange for and in full satisfaction of $10.0 million of DIP claims as contemplated by the Plan. On February 13, 2026, the Company entered into an amendment to the Super Senior Term Loan pursuant to which entities controlled by Avenue Capital Group, one of the three largest beneficial owners of the Company, extended incremental term loans in an aggregate principal amount of $4.0 million for working capital and general corporate purposes. On June 30, 2026, the Company entered into an amendment to the Super Senior Term Loan pursuant to which funds managed by Gates Capital Management, one of the three largest beneficial owners of the Company, extended incremental term loans in an aggregate principal amount of $6.0 million for working capital and general corporate purposes, bringing total outstanding borrowings under the Super Senior Term Loan to $56.0 million. Interest on the Super Senior Term Loan accrues, at the Super Senior Term Loan Borrowers’ election, either (a) at the Reference Rate, meaning the greatest of 4.0% per annum, the Federal Funds Effective Rate plus 0.5% per annum, one-month Term SOFR plus 1.0% per annum, or the Wall Street Journal Prime Rate plus 10.7% per annum, or (b) at Term SOFR, subject to a 4.0% floor, plus 11.7% per annum. Interest on Reference Rate Loans is payable monthly in arrears, while interest on SOFR Loans is payable at the end of each applicable interest period. Upon the occurrence of an event of default, all outstanding amounts bear interest at the applicable rate plus 2.0% per annum, payable on demand.
As of June 30, 2026, there were borrowings of $56.0 million outstanding under the Super Senior Term Loan. The Super Senior Term Loan is scheduled to mature on July 28, 2028. Voluntary prepayments are permitted at any time with five business days’ notice, provided accrued interest is paid and, if applicable, a prepayment premium is payable at a rate of 2.0% if prepaid prior to the first anniversary of the Emergence Date, 1.0% if prepaid on or after the first anniversary but prior to the second anniversary, and 0% thereafter. In addition, the Super Senior Term Loan is subject to mandatory prepayments of principal with accrued interest in certain circumstances, including (a) 25.0% of annual Excess Cash Flow (beginning with the fiscal year ending December 31, 2026, payable within ten business days after delivery of annual financial statements), (b) 100% of net cash proceeds from non-permitted asset sales in excess of $0.5 million in any fiscal year subject to reinvestment rights, (c) 100% of net cash proceeds from the issuance of indebtedness or equity
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securities (other than permitted issuances), and (d) certain extraordinary receipts, such as insurance recoveries and condemnation awards, subject to reinvestment rights. Upon the occurrence of an event of default such as payment defaults, covenant breaches, bankruptcy or insolvency, cross-defaults to other significant indebtedness, and judgment defaults, the obligations under the Super Senior Term Loan may be accelerated and become immediately due and payable. On May 7, 2026, the Company entered into an amendment to the Super Senior Term Loan pursuant to which the definition of "Permitted Securitization Financing" was amended to permit ongoing sales of designated receivables under the Amended BR Exar AR Facility (defined below), subject to a cap of $10.0 million in the aggregate amount of Permitted Securitization Financings incurred and outstanding.
The obligations under the Super Senior Term Loan are guaranteed on a joint and several basis by substantially all of the Super Senior Term Loan Borrowers’ subsidiaries and are secured by liens on the collateral of the Super Senior Term Loan Borrowers and the guarantors, subject to permitted liens and the terms of the ABL Intercreditor Agreement (as described below) and that certain Super Senior Intercreditor Agreement. The Super Senior Term Loan contains customary affirmative and negative covenants, including limitations on additional indebtedness, the granting of liens, asset sales, restricted payments, affiliate transactions, and changes in business. It also includes a financial covenant requiring the Issuer to maintain the ratio of (a) Indebtedness to (b) Covenant Consolidated EBITDA of no greater than 1.00 to 1.00 based on the trailing 12 months ended as of the last day of the most recently ended fiscal quarter. The Super Senior Term Loan Borrowers are also required to maintain liquidity of at least $2.0 million. The Super Senior Term Loan Borrowers were in compliance with such financial covenants as of June 30, 2026.
On August 14, 2026, the Super Senior Term Loan Borrowers, the agents and the required lenders entered into a limited waiver of the Specified Events of Default described below under “ABL Facility”, the effectiveness of which was subject to specified conditions and which requires the Company to satisfy specified post-closing obligations.
Second Lien Note
On February 27, 2023, BPA, through its subsidiary Exela Receivables 3, LLC, and BRF Finance Co., LLC entered into a Secured Promissory Note pursuant to which BPA borrowed $31.5 million from BRF Finance Co., LLC secured by a second lien pledge of Exela Receivables 3, LLC, a subsidiary of BPA (as amended, the “Second Lien Note”). The Second Lien Note was originally scheduled to mature on June 17, 2025 and bears interest at a per annum rate of one-month Term SOFR plus 7.5%. On July 29, 2025, BPA entered into an Amended and Restated Second Lien Credit Agreement with BRF Finance Co., LLC. The amendment was executed in connection with BPA’s emergence from the Chapter 11 Cases to align the terms of the Second Lien Note with the Company’s new capital structure and intercreditor arrangements. The Second Lien Note matures on September 30, 2026.
The obligations under the Second Lien Note are fully and unconditionally guaranteed by certain subsidiaries of BPA and are secured by liens on BPA’s and certain guarantors’ assets, including accounts receivable, inventory, cash and deposit accounts, equipment, real property, equity interests in subsidiaries, intercompany obligations, general intangibles, and other related assets. Pursuant to the ABL Intercreditor Agreement, BRF Finance Co., LLC’s liens are subordinated to the liens securing the Company’s senior debt facilities; specifically, the ABL Facility with respect to receivables, inventory, cash, and related assets, and the Super Senior Term Loan and July 2030 Notes with respect to fixed assets, equity interests, and other non-ABL assets. As a result, the obligations under the Second Lien Note are effectively second-priority liens behind the senior secured debt. The Second Lien Note includes a financial covenant requiring the borrowers to maintain a minimum fixed charge coverage ratio, calculated on a trailing twelve-month basis. The minimum required ratio varies depending on the period: for the defined periods tested quarterly through December 31, 2025, and monthly from January 1, 2026 through June 30, 2026, the fixed charge coverage ratio must be not less than 0.85 to 1.00. Thereafter, for the defined periods tested monthly from July 1, 2026, through the maturity date, the fixed charge coverage ratio must be not less than 1.00 to 1.00. The Company was in compliance with such financial covenant as of June 30, 2026.
During the periods August 1, 2025 to December 31, 2025 (Successor) and January 1, 2025 to July 31, 2025 (Predecessor), the Company repaid $3.8 million and $6.0 million, respectively, in principal amount of the Second Lien Note. During the three and six months ended June 30, 2026 (Successor), the Company repaid $3.0 million and $6.3 million principal amount of the Second Lien Note, respectively. The loss on early extinguishment of debt during the three and six months ended June 30, 2026 (Successor) and June 30, 2025 (Predecessor) totaled $0 and $0.1 million, respectively, and represents write off of debt issuance costs. Loss on the early extinguishment of debt is reported within
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debt modification and extinguishment costs (gain), net within the Company’s condensed consolidated and combined statements of operations. As of June 30, 2026 (Successor), there were borrowings of $9.5 million outstanding under the Second Lien Note included in the current portion of long-term debt in the condensed consolidated balance sheets.
On August 14, 2026, BPA and BRF Finance Co., LLC entered into a Limited Waiver and Fifth Amendment to the Second Lien Note, which, among other things, waived the Specified Events of Default described below under “ABL Facility.”
ABL Facility
On July 29, 2025, Exela Technologies BPA, LLC and certain of its subsidiaries (collectively, the “ABL Borrowers”) entered into a $150.0 million Asset-Based Lending Credit and Security Agreement (as amended, the “ABL Facility”) with MidCap Funding IV Trust, as administrative and collateral agent (the “Agent”), and a syndicate of lenders (the “ABL Lenders”). The ABL Facility was executed in connection with BPA’s emergence from the Chapter 11 Cases and provides for revolving commitments of up to $150.0 million, with an option to increase to $175.0 million through an additional tranche. The borrowing availability under the ABL Facility is limited to (a) the lesser of (i) the aggregate revolving commitments and (ii) the borrowing base, which is calculated by reference to eligible billed and unbilled receivables, certain other receivables, eligible cash, and related assets, reduced by reserves established by the Agent, minus (b) the availability block (described below). Borrowings under the ABL Facility bear an interest at Term SOFR plus an applicable margin ranging from 3.8% to 4.3%, depending on the ABL Borrowers’ trailing twelve-month EBITDA, subject to a 1.0% SOFR floor. Interest is payable monthly, with a 2.0% default premium. In addition to interest, the ABL Borrowers are required to pay an unused commitment fee of 0.5% per annum on the average daily unused portion of the commitments, customary letter of credit fees on the face amount of each outstanding letter of credit, a collateral management fee payable to the Agent, and a minimum balance fee if borrowings under the ABL Facility fall below 20.0% of the Borrowing Base.
As of June 30, 2026 (Successor), there were borrowings of $63.3 million outstanding under the ABL Facility. There were unamortized debt issuance costs of $1.7 million on the ABL Facility as of June 30, 2026 included in other noncurrent assets on the condensed consolidated balance sheet. The ABL Facility matures on July 29, 2028, and may be prepaid at any time without penalty (other than breakage costs). Mandatory repayments are required from proceeds of dispositions of the ABL Priority Collateral, certain insurance proceeds, or upon acceleration following an event of default. The events of default include failure to pay principal, interest or fees when due; breaches of covenants or other material contractual obligations; materially inaccurate representations or warranties; failure to pay specified other indebtedness above $25.0 million; bankruptcy or insolvency; final unsatisfied judgments; ERISA-related defaults; and a change in control.
The obligations under the ABL Facility are guaranteed on a joint and several basis by substantially all of the ABL Borrowers’ U.S. subsidiaries. The liens securing the ABL Facility are subject to an Intercreditor Agreement (the “ABL Intercreditor Agreement”) dated July 29, 2025, among MidCap Funding IV Trust, Ankura Trust Company, LLC, as Term Agent, BRF Finance Co., LLC, as Riley Agent, and U.S. Bank Trust Company, National Association, as July 2030 Notes Trustee. The ABL Intercreditor Agreement governs lien priorities including (i) relative priorities for the collateral securing the ABL Facility obligations, the Super Senior Term Loan obligations, the July 2030 Notes Indenture obligations and the Second Lien Note obligations; (ii) collateral priorities securing (a) any Second Lien Note obligations, (b) any Super Senior Term Loan obligations, (c) any July 2030 Notes Indenture obligations, or (d) any Excess ABL Debt; and (iii) prohibition on contesting liens. The ABL Facility is secured by a first-priority lien on certain ABL Priority Collateral (including receivables, cash, inventory, deposit accounts, and related assets) and a junior lien on certain Term Priority Collateral (as defined therein), subject to the ABL Intercreditor Agreement. On May 14, 2026, the ABL Borrowers, the Agent and the ABL Lenders entered into an amendment to the ABL Facility to permit ongoing sales of designated receivables under the Amended BR Exar AR Facility, subject to a cap of $10.0 million in the aggregate amounts outstanding.
The ABL Facility includes customary affirmative covenants such as reporting, collateral maintenance, insurance, and inspections, and negative covenants, including restrictions on additional indebtedness, liens, asset sales, investments, affiliate transactions, and changes in business. The ABL Facility also includes a financial covenant requiring the ABL Borrowers to maintain a minimum fixed charge coverage ratio, calculated on a trailing twelve-month basis. The fixed charge coverage ratio is defined as the ratio of EBITDA less Unfinanced Capital Expenditures less
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Capitalized Software Expenditures, to Fixed Charges (as such terms are defined in the ABL Facility). The minimum required ratio varies depending on the period: for the defined periods tested quarterly through December 31, 2025, and monthly from January 1, 2026 through June 30, 2026, the fixed charge coverage ratio must be not less than 0.85 to 1.00. Thereafter, for the defined periods tested monthly from July 1, 2026, through the maturity date, the fixed charge coverage ratio must be not less than 1.00 to 1.00. On March 6, 2026, the ABL Borrowers, the Agent and the ABL Lenders entered into a Limited Waiver and Third Amendment to the ABL Facility. Among other things, this amendment (i) eliminates a covenant requiring the ABL Borrower to maintain a minimum excess availability of $7.5 million; (ii) implements a temporary availability block through June 30, 2026, which reduces borrowing capacity by the greater of $3.75 million or 5.0% of the borrowing base if the ABL Borrower’s fixed charge coverage ratio falls below 1.00 to 1.00; (iii) temporarily increases the advance rate for eligible investment grade billed accounts to 95.0% through September 30, 2026; (iv) adjusts the calculation of the borrowing base; (v) amends the mechanics governing the cash dominion period; and (vi) resets the deferred revolving loan origination fee. The Company was in compliance with such financial covenants as of June 30, 2026.
The Company did not make certain tax payments required to be made under the Plan, including payments due on or before July 29, 2026 to holders of Priority Tax Claims, and did not provide notice of the resulting defaults within the three-day period required under the ABL Facility (collectively, the “Specified Events of Default”). Specified Events of Default constituted events of default under the ABL Facility and gave rise to cross-defaults under the Company’s other financing agreements. On August 14, 2026, the ABL Borrowers, the Agent and the ABL Lenders entered into a Limited Waiver and Sixth Amendment to the ABL Facility, which waived the Specified Events of Default and, among other things, adjusted the calculation of the borrowing base to exclude certain receivables.
European Senior Credit Facilities Agreement
In June 2024, XBP Europe, Inc., a wholly owned subsidiary of the Company, together with certain other subsidiaries, entered into a Facilities Agreement (the “Facilities Agreement”) with HSBC UK Bank plc (“HSBC”) for a £15.0 million and €10.5 million secured credit facility consisting of (i) a single draw, secured Term Loan A facility in an aggregate principal amount of £3.0 million (the “2028 Term Loan A Facility”), (ii) a single draw, secured Term Loan B facility in an aggregate principal amount of €10.5 million (the “2028 Term Loan B Facility”, collectively with the 2028 Term Loan A Facility, the “2028 Term Loan Facilities”) and (iii) a multi-draw, multi-currency secured revolving credit facility in an aggregate principal amount of £12.0 million (the “Revolving Credit Facility”), and, together with the 2028 Term Loan Facilities, (the “European Senior Credit Facilities”). Pursuant to the original Facilities Agreement, the 2028 Term Loan Facilities mature on June 26, 2028, and the Revolving Credit Facility matures on June 26, 2027, with certain extension rights at the discretion of HSBC. Borrowings under the 2028 Term Loan A Facility, the 2028 Term Loan B Facility and Revolving Credit Facility bear interest at a rate per annum equal to the SONIA plus the applicable margin of 3.25%, Euro Interbank Offered Rate (“EURIBOR”) plus the applicable margin of 3.25% and Reference Rate plus the applicable margin of 3.25%, respectively. “Reference Rate” for any period means (i) Secured Overnight Financing Rate (“SOFR”) for funds extended in U.S. Dollars; (ii) the EURIBOR, for funds extended in Euros; (iii) the SONIA, for funds extended in Pounds Sterling; and the Stockholm Interbank Offered Rate (“STIBOR”) for funds extended in Swedish Krona.
On July 25, 2025, an amendment to the Facilities Agreement was executed to permit the borrowing of an additional sum of €16.1 million, the equivalent of £14.0 million, under the Revolving Credit Facility. The drawdowns were made in Euro and used for general corporate purposes. This amendment extended the maturity of the Revolving Credit Facility to June 26, 2028, and updated certain definitions and covenants reflecting the Company’s new corporate structure following the Business Combination as discussed in Note 4, Business Combination.
The European Senior Credit Facilities continue to be secured by first-ranking security interests over substantially all assets of XBP Europe, Inc. and other borrower and guarantor subsidiaries, including cash, receivables, inventory, intercompany receivables, shares in subsidiaries, and related assets. The amendment added a new covenant restricting XBP Global Holdings, Inc., as the parent of XBP Europe, Inc., from providing certain guarantees or other credit support. Except as otherwise provided by applicable law, all obligations under the Facilities Agreement are jointly and severally unconditionally guaranteed by the European subsidiaries of XBP Europe, Inc.
The outstanding principal amount of the 2028 Term Loan A Facility is scheduled to be repaid in fifteen (15) equal quarterly installments of £150 thousand, which commenced September 30, 2024, with the remaining outstanding
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principal amount of £750 thousand payable at maturity along with accrued and unpaid interest. The outstanding principal amount of the 2028 Term Loan B Facility is scheduled to be repaid in fifteen (15) equal quarterly installments of €525 thousand, which commenced September 30, 2024, with the remaining outstanding principal amount of €2.6 million payable at maturity along with accrued and unpaid interest. The Company may, at any time, prepay the principal of the Senior Credit Facilities. Each prepayment shall be accompanied by the payment of accrued interest, without any premium or penalty. However, the Company is limited to a maximum of four voluntary prepayments of the Revolving Credit Facility within any consecutive twelve-month period. During the three and six months ended June 30, 2026 (Successor), the Company repaid $0.8 million and $1.6 million, respectively, of outstanding principal amounts under the 2028 Term Loan A Facility and 2028 Term Loan B Facility. As of June 30, 2026 (Successor), the outstanding balance of the 2028 Term Loan A Facility, the 2028 Term Loan B Facility, and the Revolving Credit Facility was approximately $2.4 million, $7.2 million, and $34.6 million, respectively.
The Facilities Agreement contains certain affirmative and negative covenants limiting the ability of XBP Europe, Inc. to effect mergers and change of control events as well as certain other limitations, including limitations on (i) incurrence of additional indebtedness or liens, (ii) dispositions of assets, (iii) substantial changes of the general nature of the business, (iv) entering into restrictive agreements, (v) making certain investments, loans, advances, guarantees and acquisitions, (vi) prepaying certain indebtedness, (vii) the declaration and payment of dividends or other restricted payments, (viii) engaging in transactions with affiliates, or (ix) amending certain material documents. The Facilities Agreement also contains financial covenants including, but not limited to: (i) a consolidated total leverage ratio of not greater than 2.50 to 1.00 (with step-downs to (a) 2.25 to 1.00 starting January 1, 2025 and (b) 2.00 to 1.00 starting January 1, 2026); (ii) a cash flow coverage ratio of at least 1.10:1.00; and (iii) a consolidated interest coverage ratio of not less than 4.00 to 1.00. As of June 30, 2026, the Company was in compliance with all affirmative and negative covenants under its Facilities Agreement, including all financial covenants, except for the consolidated total leverage ratio covenant and the consolidated interest coverage ratio covenant. The lender has acknowledged this matter, and no remedies were exercised or are expected to be exercised.
BR Exar AR Facility
On February 12, 2024, certain of the Company’s subsidiaries entered into a receivables purchase agreement with BR Exar, LLC (“BREL”), an affiliate of B. Riley Commercial Capital, LLC (as subsequently amended on various dates in connection with each monthly sale of certain existing receivables, up to and including December 31, 2025 (the “BR Exar AR Facility”)). The Company received an aggregate of $15.2 million and $22.1 million, net of legal and other fees of $1.8 million and $1.6 million, respectively, under the BR Exar AR Facility during the periods August 1, 2025 to December 31, 2025 (Successor) and January 1, 2025 to July 31, 2025 (Predecessor), respectively. Under the terms of the BR Exar AR Facility during the periods August 1, 2025 to December 31, 2025 (Successor) and January 1, 2025 to July 31, 2025 (Predecessor), certain of the Company’s subsidiaries agreed to sell certain existing receivables and all of their future receivables to BREL until such time as BREL shall have collected $17.0 million and $25.5 million, respectively, net of any costs, expenses or other amounts paid to or owing to the buyer under the agreement. BREL collected $23.0 million and $25.8 million under the BR Exar AR Facility during the periods August 1, 2025 to December 31, 2025 (Successor) and January 1, 2025 to July 31, 2025 (Predecessor), respectively. As of December 31, 2025, there was $1.4 million of outstanding balance under the BR Exar AR Facility included in the current portion of long-term debt in the condensed consolidated balance sheets. During the three months ended March 31, 2026, BREL collected $1.4 million under the BR Exar AR Facility. There was no amount outstanding under the BR Exar AR Facility as of June 30, 2026.
Under the BR Exar AR Facility, transfers of accounts receivable from certain of the Company’s subsidiaries to BREL are treated as secured borrowings under ASC 860, Transfers and Servicing and are not accounted for as a reduction in accounts receivable. Accordingly, the Company treated a total of $0 of legal fees and other expense incurred under the BR Exar AR Facility as debt issuance cost, and $0 of difference between the net proceeds received by the Company and total amount collected by BREL under the BR Exar AR Facility as original issue discount during the three and six months ended June 30, 2026 (Successor). Accordingly, the Company treated total of $0.2 million and $0.2 million of legal fees and other expense incurred under the BR Exar AR Facility as debt issuance cost, and $1.2 million and $1.7 million of difference between the net proceeds received by the Company and total amount collected by BREL under the BR Exar AR Facility as original issue discount during the three and six months ended June 30, 2025 (Predecessor), respectively. Amortizations of the debt issuance cost and original issue discount relating to the BR Exar AR Facility are included in interest expense, net in the condensed consolidated and combined statements of operations.
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Amended BR Exar AR Facility
On January 21, 2026, certain of the Company’s subsidiaries entered into an Amended and Restated Receivables Purchase Agreement with BREL (as subsequently amended on February 10, 2026, March 27, 2026 and May 14, 2026 (the “Amended BR Exar AR Facility”)), pursuant to which they agreed to sell certain existing receivables and all of their future receivables to BREL until such time as BREL shall have collected $24.6 million, net of any costs, expenses or other amounts paid to or owing to the buyer under the agreement. The Company received $22.6 million, net of amendment and legal fees of $2.0 million, in cash consideration for sale of these receivables under the Amended BR Exar AR Facility during the six months ended June 30, 2026 (Successor). During the six months ended June 30, 2026, BREL collected $19.0 million of outstanding principal amount under the Amended BR Exar AR Facility. There was $5.6 million outstanding under the Amended BR Exar AR Facility as of June 30, 2026 (Successor).
Under the Amended BR Exar AR Facility, transfers of accounts receivable from certain of the Company’s subsidiaries to BREL are treated as secured borrowings under ASC 860, Transfers and Servicing and are not accounted for as a reduction in accounts receivable. Accordingly, the Company treated a total of $0.5 million and $2.0 million of amendment and legal fees incurred under the Amended BR Exar AR Facility as debt issuance cost during the three and six months ended June 30, 2026 (Successor), respectively. Amortizations of the debt issuance cost and original issue discount relating to the Amended BR Exar AR Facility are included in interest expense, net in the condensed consolidated and combined statements of operations.
Amended Factoring Agreement
On September 15, 2023, certain European subsidiaries of the Company entered into an amendment to a secured borrowing facility (the “Amended Factoring Agreement”) for a non-recourse factoring program pursuant to which an unrelated third party (the “Factor”) purchases certain approved and partially approved accounts receivables (as defined in the Amended Factoring Agreement) from certain subsidiaries of the Company (the “Relevant Entities”) up to a maximum amount of €15.0 million while assuming the risk of non-payment on the purchased accounts receivables up to the level of approval. The Relevant Entities have no continuing involvement in the transferred accounts receivable, other than collection and administrative responsibilities and, once sold, the accounts receivable are no longer available to satisfy creditors of the relevant entities.
The Company accounts for the transactions under the Amended Factoring Agreement as a sale under ASC 860, and as an off-balance sheet arrangement. Net funds received from the transfers reflect the face value of the account less a fee, which is recorded as an increase to cash and a reduction to accounts receivable outstanding in the condensed consolidated balance sheets. The Company reports the cash flows attributable to the sale of accounts receivables to the Factor and the cash receipts from collections made on behalf of and paid to the Factor under the Amended Factoring Agreement, on a net basis as trade accounts receivables in cash flows from operating activities in the Company’s condensed consolidated and combined statements of cash flows.
As of June 30, 2026, the Company’s outstanding factored accounts receivable totaled approximately $2.3 million pursuant to the Amended Factoring Agreement, representing the face value of the factored invoices. The Company recognizes factoring costs upon disbursement of funds. The Company incurred a loss on sale of accounts receivables including expenses pursuant to the Amended Factoring Agreement totalling approximately $0.1 million and $0.2 million for the three and six months ended June 30, 2026 (Successor), respectively, which is presented in selling, general and administrative expenses on the condensed consolidated statements of operations.
Additional Information with Respect to the Super Senior Term Loan Borrowers
Under the terms of the Super Senior Term Loan, the Company is required to present additional information that reflects the condensed consolidated and combined financial condition, results of operations and cash flows of the Super Senior Term Loan Borrowers separate from the condensed consolidated financial condition, results of operations and cash flows of the rest of the Company as of and for the periods presented. This additional information for 2026 is presented below.
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Condensed Consolidated Balance Sheets as of June 30, 2026:
| | | | | | | | | | | | |
| | Successor (1) | | Non-Super Senior Term Loan Borrower Subsidiaries (2) | | Eliminations (3) | | Super Senior Term Loan Borrowers (4)=(1)-(2)-(3) | ||||
| | Consolidated | | Non-GAAP | | Non-GAAP | | Non-GAAP | ||||
| | June 30, | | June 30, | | June 30, | | June 30, | ||||
| | 2026 | | 2026 | | 2026 | | 2026 | ||||
Assets | | | | | | | | | | | | |
Current assets | | | | | | | | | | | | |
Cash and cash equivalents | | $ | 18,579 | | $ | 17,802 | | $ | — | | $ | 777 |
Restricted cash | |
| 9,380 | |
| — | | | — | |
| 9,380 |
Accounts receivable, net | | | 129,417 | | | 30,585 | | | — | | | 98,832 |
Related party receivables and prepaid expenses | | | 980 | | | — | | | (32,409) | | | 33,389 |
Inventories, net | | | 11,204 | | | 4,106 | | | — | | | 7,098 |
Assets held for sale | | | 2,340 | | | 2,340 | | | — | | | — |
Prepaid expenses and other current assets | | | 24,876 | | | 3,742 | | | — | | | 21,134 |
Total current assets | |
| 196,776 | |
| 58,575 | |
| (32,409) | |
| 170,610 |
Property, plant and equipment, net | | | 72,504 | | | 10,584 | | | — | | | 61,920 |
Operating lease right-of-use assets, net | | | 26,386 | | | 3,892 | | | — | | | 22,494 |
Goodwill | | | 189,881 | | | 55,956 | | | — | | | 133,925 |
Intangible assets, net | | | 325,628 | | | 35,246 | | | — | | | 290,382 |
Other noncurrent assets | |
| 16,594 | |
| 34,698 | | | (31,000) | |
| 12,896 |
Total assets | | $ | 827,769 | | $ | 198,951 | | $ | (63,409) | | $ | 692,227 |
| | | | | | | | | | | | |
Liabilities and Stockholders' Equity | |
| | |
| | |
| | |
| |
Liabilities | |
| | |
| | |
| | |
| |
Current liabilities | | | | | | | | | | | | |
Current portion of long-term debt | | $ | 25,266 | | $ | 4,996 | | $ | — | | $ | 20,270 |
Accounts payable | | | 64,493 | | | 24,742 | | | — | | | 39,751 |
Related party payables | | | 3,748 | | | 35,172 | | | (31,502) | | | 78 |
Income tax payable | | | 5,848 | | | 1,663 | | | — | | | 4,185 |
Accrued liabilities | | | 50,729 | | | 19,744 | | | — | | | 30,985 |
Accrued compensation and benefits | | | 58,075 | | | 21,971 | | | — | | | 36,104 |
Accrued interest | | | 9,803 | | | 377 | | | (907) | | | 10,333 |
Customer deposits | | | 18,354 | | | 571 | | | — | | | 17,783 |
Deferred revenue | | | 13,285 | | | 4,787 | | | — | | | 8,498 |
Obligation for claim payment | | | 44,086 | | | — | | | — | | | 44,086 |
Current portion of finance lease liabilities | | | 4,147 | | | (2) | | | — | | | 4,149 |
Current portion of operating lease liabilities | | | 10,104 | | | 1,437 | | | — | | | 8,667 |
Total current liabilities | |
| 307,938 | |
| 115,458 | |
| (32,409) | |
| 224,889 |
Long-term debt, net of current maturities | | | 347,642 | | | 58,700 | | | (31,505) | | | 320,447 |
Finance lease liabilities, net of current portion | | | 5,252 | | | — | | | — | | | 5,252 |
Net defined benefit liability | | | 7,611 | | | 7,017 | | | — | | | 594 |
Deferred income tax liabilities | | | 47,527 | | | 1,597 | | | — | | | 45,930 |
Long-term income tax liabilities | | | 9,395 | | | — | | | — | | | 9,395 |
Operating lease liabilities, net of current portion | | | 18,369 | | | 2,565 | | | — | | | 15,804 |
Other long-term liabilities | | | 37,571 | | | 1,501 | | | — | | | 36,070 |
Total liabilities | | | 781,305 | | | 186,838 | | | (63,914) | | | 658,381 |
| | | | | | | | | | | | |
Total stockholders' equity | |
| 46,464 | |
| 12,113 | | | 505 | |
| 33,846 |
| | | | | | | | | | | | |
Total liabilities and stockholders' equity (deficit) | | $ | 827,769 | | $ | 198,951 | | $ | (63,409) | | $ | 692,227 |
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Condensed Consolidated Income Statements for the three months ended June 30, 2026:
| | | | | | | | | | | | |
| | Successor (1) | | Non-Super Senior Term Loan Borrower Subsidiaries (2) | | Eliminations (3) | | Super Senior Term Loan Borrowers ((4)=(1)-(2)-(3)) | ||||
| | Consolidated | | Non-GAAP | | Non-GAAP | | Non-GAAP | ||||
| | Three Months Ended June 30, | | Three Months Ended June 30, | | Three Months Ended June 30, | | Three Months Ended June 30, | ||||
| | 2026 | | 2026 | | 2026 | | 2026 | ||||
Revenue | | $ | 191,311 | | $ | 30,314 | | $ | — | | $ | 160,997 |
Related party revenue | | | — | | | 97 | | | (1,089) | | | 992 |
Cost of revenue (exclusive of depreciation and amortization) | |
| 150,155 | |
| 25,455 | |
| — | |
| 124,700 |
Selling, general and administrative expenses (exclusive of depreciation and amortization) | |
| 27,936 | |
| 8,268 | |
| — | |
| 19,668 |
Depreciation and amortization | |
| 15,268 | |
| 1,576 | |
| — | |
| 13,692 |
Related party expense, net | |
| 1,674 | |
| 1,380 | |
| (1,089) | |
| 1,383 |
Operating profit (loss) | |
| (3,722) | |
| (6,268) | |
| — | |
| 2,546 |
Other expense (income), net: | |
| | |
| | |
| | |
| |
Interest expense, net | |
| 13,890 | |
| 1,708 | |
| 55 | |
| 12,127 |
Debt modification and extinguishment costs, net | |
| — | |
| 130 | |
| (130) | |
| — |
Sundry expense, net | |
| 1,409 | |
| 347 | |
| — | |
| 1,062 |
Other income, net | |
| (561) | |
| (218) | |
| — | |
| (343) |
Loss before reorganization items and income taxes | |
| (18,460) | |
| (8,235) | |
| 75 | |
| (10,300) |
Reorganization items, net | |
| — | |
| — | |
| — | |
| — |
Loss before income taxes | |
| (18,460) | |
| (8,235) | |
| 75 | |
| (10,300) |
Income tax benefit | |
| (1,756) | |
| (485) | |
| — | |
| (1,271) |
Net loss | | $ | (16,704) | | $ | (7,750) | | $ | 75 | | $ | (9,029) |
Condensed Consolidated Income Statements for the six months ended June 30, 2026:
| | | | | | | | | | | | |
| | Successor (1) | | Non-Super Senior Term Loan Borrower Subsidiaries (2) | | Eliminations (3) | | Super Senior Term Loan Borrowers ((4)=(1)-(2)-(3)) | ||||
| | Consolidated | | Non-GAAP | | Non-GAAP | | Non-GAAP | ||||
| | Six Months Ended June 30, | | Six Months Ended June 30, | | Six Months Ended June 30, | | Six Months Ended June 30, | ||||
| | 2026 | | 2026 | | 2026 | | 2026 | ||||
Revenue | | $ | 388,396 | | $ | 61,642 | | $ | — | | $ | 326,754 |
Related party revenue | | | — | | | 192 | | | (2,287) | | | 2,095 |
Cost of revenue (exclusive of depreciation and amortization) | |
| 302,052 | |
| 48,436 | |
| — | |
| 253,616 |
Selling, general and administrative expenses (exclusive of depreciation and amortization) | | | 70,751 | |
| 15,946 | |
| — | |
| 54,805 |
Depreciation and amortization | | | 30,117 | |
| 3,130 | |
| — | |
| 26,987 |
Related party expense, net | | | 4,280 | |
| 3,617 | |
| (2,287) | |
| 2,950 |
Operating loss | | | (18,804) | |
| (9,295) | |
| — | |
| (9,509) |
Other expense (income), net: | | | | |
| | |
| | |
| |
Interest expense, net | | | 27,959 | |
| 3,309 | |
| 100 | |
| 24,550 |
Debt modification and extinguishment costs, net | | | — | |
| 130 | |
| (130) | |
| — |
Sundry expense, net | | | 1,017 | |
| 1,093 | |
| — | |
| (76) |
Other income, net | | | (1,122) | |
| (434) | |
| — | |
| (688) |
Loss before reorganization items and income taxes | | | (46,658) | |
| (13,393) | |
| 30 | |
| (33,295) |
Reorganization items, net | | | — | |
| — | |
| — | |
| — |
Loss before income taxes | | | (46,658) | |
| (13,393) | |
| 30 | |
| (33,295) |
Income tax benefit | | | (3,191) | |
| (415) | |
| — | |
| (2,776) |
Net loss | | $ | (43,467) | | $ | (12,978) | | $ | 30 | | $ | (30,519) |
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Condensed Consolidated Cash Flow Statements for the six months ended June 30, 2026:
| | | | | | | | | | | | |
| | Successor (1) | | Non-Super Senior Term Loan Borrower Subsidiaries (2) | | Eliminations (3) | | Super Senior Term Loan Borrowers ((4)=(1)-(2)-(3)) | ||||
| | Consolidated | | Non-GAAP | | Non-GAAP | | Non-GAAP | ||||
| | Six Months Ended June 30, | | Six Months Ended June 30, | | Six Months Ended June 30, | | Six Months Ended June 30, | ||||
| | 2026 | | 2026 | | 2026 | | 2026 | ||||
Cash flows from operating activities | | | | | | | | | | | | |
Net loss | | $ | (43,467) | | $ | (12,978) | | $ | 30 | | $ | (30,519) |
Adjustments to reconcile net loss to cash provided by (used in) operating activities | | | | | | | | | | | | |
Depreciation and amortization | | | 30,117 | | | 3,130 | | | — | | | 26,987 |
Original issue discount, debt premium and debt issuance cost amortization | | | 3,056 | | | 118 | | | 100 | | | 2,838 |
Provision for credit losses | | | (1,527) | | | (9) | | | — | | | (1,518) |
Deferred income tax provision | | | (5,149) | | | (820) | | | — | | | (4,329) |
Equity-based compensation expense | | | 1,017 | | | 1,017 | | | — | | | — |
Unrealized foreign currency loss (gain) | |
| 1,564 | |
| 1,732 | |
| — | |
| (168) |
Loss (gain) on sale of assets | | | 381 | | | — | | | — | | | 381 |
Fair value adjustment for private warrants liability | | | — | | | — | | | — | | | — |
Payment-in-kind interest | | | 2,975 | | | — | | | — | | | 2,975 |
Loss on sale of July 2030 Notes | | | — | | | 130 | | | (130) | | | — |
Change in operating assets and liabilities, net of effect from acquisitions | |
| | | | | | | | | | |
Accounts receivable | |
| 2,409 | |
| (1,315) | |
| — | |
| 3,724 |
Prepaid expenses and other current assets | | | 2,230 | | | (427) | | | — | | | 2,657 |
Accounts payable and accrued liabilities | | | (6,797) | | | 1,016 | | | — | | | (7,813) |
Related party receivables (payables) | | | (1,839) | | | 22,934 | | | — | | | (24,773) |
Additions to outsourced contract costs | | | (156) | | | — | | | — | | | (156) |
Net cash provided by (used in) operating activities | |
| (15,186) | |
| 14,528 | |
| — | |
| (29,714) |
| | | | | | | | | | | | |
Cash flows from investing activities | |
| | |
| | |
| | |
| |
Purchase of property, plant and equipment | | | (2,415) | | | (523) | | | — | | | (1,892) |
Additions to internally developed software | | | (1,002) | | | (281) | | | — | | | (721) |
Proceeds from sale of assets | | | 84 | | | 64 | | | — | | | 20 |
Sale of July 2030 Notes | | | — | | | 870 | | | (870) | | | — |
Net cash provided by (used in) investing activities | |
| (3,333) | |
| 130 | |
| (870) | |
| (2,593) |
| | | | | | | | | | | | |
Cash flows from financing activities | |
| | |
| | |
| | |
| |
Cash paid for debt issuance costs | | | (2,453) | | | — | | | — | | | (2,453) |
Cash paid for withholding taxes on vested RSUs | | | (100) | | | (100) | | | — | | | — |
Principal payments on finance lease obligations | | | (2,446) | | | — | | | — | | | (2,446) |
Borrowings from other loans | | | 20,823 | | | 2,334 | | | — | | | 18,489 |
Proceeds from Issuance of July 2030 Notes | | | 870 | | | — | | | 870 | | | — |
Proceeds from Super Senior Term Loan | | | 10,000 | | | — | | | — | | | 10,000 |
Proceeds from ABL Facility | | | 272,800 | | | — | | | — | | | 272,800 |
Repayments on ABL Facility | | | (289,124) | | | — | | | — | | | (289,124) |
Repayment of Second Lien Note | | | (6,250) | | | — | | | — | | | (6,250) |
Repayments under BR Exar AR Facility | | | (1,440) | | | — | | | — | | | (1,440) |
Borrowing under Amended BR Exar AR Facility | | | 24,625 | | | — | | | — | | | 24,625 |
Repayments under Amended BR Exar AR Facility | | | (18,986) | | | — | | | — | | | (18,986) |
Repayments on 2028 Term Loan Facilities | | | (1,628) | | | (1,628) | | | — | | | — |
Principal repayments on senior secured term loans and other loans | |
| (28,450) | |
| (3,151) | |
| — | |
| (25,299) |
Net cash used in financing activities | |
| (21,759) | |
| (2,545) | |
| 870 | |
| (20,084) |
Effect of exchange rates on cash, restricted cash and cash equivalents | | | (429) | | | (408) | | | — | | | (21) |
Net increase (decrease) in cash, restricted cash and cash equivalents | |
| (40,707) | |
| 11,705 | |
| — | |
| (52,412) |
Cash, restricted cash and cash equivalents | |
| | |
| | |
| | |
| |
Beginning of period | | | 68,666 | | | 6,097 | | | — | | | 62,569 |
End of period | | $ | 27,959 | | $ | 17,802 | | $ | — | | $ | 10,157 |
Supplemental cash flow data: | |
| | |
| | |
| | |
| |
Income tax payments, net of refunds received | | $ | 3,018 | | $ | 819 | | $ | — | | $ | 2,199 |
Interest paid | | | 24,147 | | | 1,930 | | | — | | | 22,217 |
Noncash investing and financing activities: | | | | | | | | | | | | |
Assets acquired through right-of-use arrangements | | | 2,711 | | | — | | | — | | | 2,711 |
Amounts reclassified from property, plant, and equipment to fixed assets held-for-sale | | | 2,340 | | | 2,340 | | | — | | | — |
Accrued capital expenditures | | | 321 | | | — | | | — | | | 321 |
Potential Future Transactions
We may, from time to time, explore and evaluate possible strategic transactions, which may include joint ventures, as well as business combinations or the acquisition or disposition of assets. In order to pursue certain of these opportunities, additional funds will likely be required. Subject to applicable contractual restrictions, to obtain such financing, we may seek to use cash on hand, or we may seek to raise additional debt or equity financing through private placements or through underwritten offerings. There can be no assurance that we will enter into additional strategic transactions or alliances, nor do we know if we will be able to obtain the necessary financing for transactions that require additional funds on favorable terms, if at all. In addition, pursuant to certain registration rights agreements we have entered into with certain of our stockholders, such holders have the right to demand underwritten offerings of our Common Stock. We may from time to time in the future explore, with certain of those stockholders, the possibility of an
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underwritten public offering of our Common Stock held by those stockholders. There can be no assurance as to whether or when an offering may be commenced or completed, or as to the actual size or terms of the offering.
Critical Accounting Policies and Estimates
The preparation of financial statements requires the use of judgments and estimates. The critical accounting policies provide a better understanding of how the Company develops its assumptions and judgments about future events and related estimations and how they can impact the Company’s financial statements. A critical accounting estimate is one that requires subjective or complex estimates and assessments and is fundamental to the Company’s results of operations. The Company bases its estimates on historical experience and on various other assumptions it believes to be reasonable according to the current facts and circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. The Company believes the current assumptions, judgments and estimates used to determine amounts reflected in the condensed consolidated financial statements are appropriate; however, actual results may differ under different conditions. This discussion and analysis should be read in conjunction with the Company’s financial statements and related notes included elsewhere in this report. Refer to “Critical Accounting Policies and Estimates” contained in Part II, Item 7 of our 2025 Form 10-K for a complete discussion of critical accounting estimates. There have been no material changes to our critical accounting policies or our use of estimates during the six months ended June 30, 2026.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Quantitative and Qualitative Disclosures About Market Risk
There have been no material changes to the Company’s market risk during the six months ended June 30, 2026. For a discussion of the Company’s exposure to market risk, refer to the Company’s market risk disclosures set forth in Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” of the 2025 Form 10-K.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer (“CEO”) and our Chief Financial Officer (“CFO”), evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2026. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by the company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.
Our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives. Based on such review and evaluation, our CEO and our CFO have concluded that as of June 30, 2026, our disclosure controls and procedures were not effective at the reasonable assurance level for this purpose, because of the material weaknesses in our internal control over financial reporting identified in relation to our financial reporting processes discussed below.
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Management’s Report on Internal Control over Financial Reporting
Management, under the supervision of the board of directors, is responsible for establishing and maintaining adequate “internal control over financial reporting” (“ICFR”), as defined in Exchange Act Rules 13a-15(f) and 15d-15(f). ICFR refers to the processes designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP.
Our ICFR is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP and includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of its inherent limitations, a system of internal control over financial reporting may not prevent or detect misstatements.
A material weakness, as defined in Exchange Act Rule 12b-2, is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of a company’s annual or interim consolidated financial statements will not be prevented or detected on a timely basis.
As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our CEO and CFO, of the effectiveness of our ICFR. Based upon that evaluation, our CEO and CFO concluded that our ICFR was not effective as of June 30, 2026 due to the material weaknesses in our ICFR that are described in Item 9A of the 2025 Form 10-K, which remain unremediated as of such date.
Notwithstanding such material weaknesses in internal control over financial reporting, our management, including our CEO and CFO, has concluded that our consolidated and combined financial statements included in this Quarterly Report on Form 10-Q present fairly, in all material respects, our financial position, results of operations and cash flows for the periods presented in this quarterly report, in conformity with U.S. GAAP.
Remediation of Material Weaknesses
As previously described in Item 9A – Controls and Procedures of the 2025 Form 10-K, we continue to implement a remediation plan to address the material weaknesses mentioned above. The material weaknesses will not be considered remediated until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.
Changes in Internal Controls over Financial Reporting
Other than the remediation actions previously taken in response to the material weakness previously identified in Item 9A – Controls and Procedures of the 2025 Form 10-K, there have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended June 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We are, from time to time, involved in certain legal proceedings, inquiries, claims and disputes, which arise in the ordinary course of business. Although our management cannot predict the outcomes of these matters, our management believes these actions will not have a material adverse effect on our financial position, results of operations or cash flows.
ITEM 1A. RISK FACTORS
In addition to the other information set forth in this quarterly report, you should carefully consider the risk factors described in Part I, “Item 1A. Risk Factors” in the 2025 Form 10-K, which could materially affect our business, financial condition and/or operating results. The risks described in those Risk Factors are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition and/or operating results.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
(c) Director and Officer Trading Arrangements
During the three-month period ended June 30, 2026,
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ITEM 6. EXHIBITS
Exhibit Number | | Document Description |
|---|---|---|
3.1(i)(a) | | Third Amended and Restated Certificate of Incorporation of the Company, dated July 29, 2025, incorporated by reference to Exhibit 3.2 to the Company’s Form 8-K, filed with the SEC on August 4, 2025. |
3.1(i)(b) | | Certificate of Amendment to the Third Amended and Restated Certificate of Incorporation, dated December 12, 2025, incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K, filed with the SEC on December 12, 2025. |
3.1(i)(c) | | Certificate of Designations of Series A Participating Preferred Stock, incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K, filed with the SEC on August 4, 2025. |
3.1(ii) |
| Second Amended and Restated Bylaws of the Company, incorporated by reference to Exhibit 3.3 to the Company’s Form 8-K, filed with the SEC on August 4, 2025. |
10.1* | | Fifth Amendment to Credit and Security Agreement, dated May 14, 2026, by and among XBP Americas, LLC (f/k/a Exela Technologies BPA, LLC), MidCap Funding IV Trust and the guarantors and lenders party thereto. |
10.2* | | Fourth Amendment to Financing Agreement, dated May 7, 2026, by and among XBP Americas, LLC (f/k/a Exela Technologies BPA, LLC), Ankura Trust Company, LLC and certain lenders from time to time party thereto. |
10.3* | | Limited Waiver and Fifth Amendment to Financing Agreement, dated June 30, 2026, by and among XBP Americas, LLC (f/k/a Exela Technologies BPA, LLC), Exela Finance Inc., Ankura Trust Company, LLC and certain guarantors and lenders from time to time party thereto. |
31.1* | | Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
31.2* | | Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
32.1* | | Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
32.2* | | Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
101.INS | | XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) |
101.SCH | | XBRL Taxonomy Extension Schema Document |
101.CAL | | XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF | | XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB | | XBRL Taxonomy Extension Label Linkbase Document |
101.PRE | | XBRL Taxonomy Extension Presentation Linkbase Document |
104 | | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
* Filed or furnished herewith, as applicable. | ||
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SIGNATURES
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 thereunto duly authorized.
Dated: | By: | /s/ Andrej Jonovic |
August 14, 2026 | | Andrej Jonovic, Chief Executive Officer (Principal Executive Officer) |
| | |
| | |
Dated: | By: | /s/ Dejan Avramovic |
August 14, 2026 | | Dejan Avramovic, Chief Financial Officer (Principal Financial and Accounting Officer) |
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