Emergence from Bankruptcy (Tables)

Statements of Income (Loss) and Comprehensive Income (Loss):


	Predecessor
	Period from January 1, 2026 through March 5, 2026
	(in thousands)
Gain on liabilities subject to compromise	$	184,296
Write-off of deferred financing costs	(24,243)
Fresh start adjustments	(17,429)
Fees related to the DIP ABL Facility	(2,567)
Success fees	(5,440)
Other professional fees	(8,977)
Write-off of stock-based compensation	(1,581)
Reorganization items, net	$	124,059

Cash payments for reorganization items, net	$	3,820

The following table reconciles the enterprise value to the reorganization value as of the Plan Effective Date:


	March 5, 2026
	(in thousands)
Enterprise value	$	212,500
Plus: Cash and cash equivalents	17,824
Plus: Non-interest bearing current liabilities	71,875
Plus: Non-interest bearing long-term liabilities	18,476
Reorganization value of Successor assets	$	320,675

(a) Reflects the change in cash and cash equivalents for the following activities:


	(in thousands)
Proceeds from Exit ABL Facility	$	89,479
Payment of outstanding borrowings under the DIP ABL Facility	(82,568)
Payment of non-retained professional fees	(2,828)
Funding of the professional fees escrow account	(9,221)
Payment of restructuring expenses	(156)
Transfer of cash and cash equivalents from restricted cash	80
Change in cash and cash equivalents	$	(5,214)

(b) Reflects the change in restricted cash for the following activities:


	(in thousands)
Funding of the professional fees escrow account	$	9,221
Transfer of restricted cash to cash and cash equivalents	(80)
Change in restricted cash	$	9,141


	(in thousands)
Accrual of professional service success fees	$	3,440
Payment of non-retained professional fees	(828)
Reclassification of professional fees to borrowings under the Exit ABL Facility	(826)
Payment of restructuring expenses	(156)
Change in accrued liabilities	$	1,630

(d) Reflects the reinstatement of operating and finance lease obligations of $30.7 million from liabilities subject to compromise.

(e) Reflects the change in long-term debt for the following activities:


	(in thousands)
Borrowings drawn on Exit ABL Facility	$	89,479
Record professional fees related to the Exit ABL Facility	826
Payment of outstanding borrowings under the DIP ABL Facility	(82,568)
Total change in long-term debt	$	7,737

(f) Liabilities subject to compromise settled or reinstated in accordance with the Plan and the resulting gain were determined as follows:


	(in thousands)
Outstanding principle on 2028 Notes	$	300,000
Operating and finance lease obligations	30,673
Accrued and unpaid interest	19,500
Total liabilities subject to compromise	350,173
Reinstatement of operating and finance lease obligations	(30,673)
Issuance of Successor common stock	(135,204)
Gain on settlement of liabilities subject to compromise	$	184,296

(g) Reflects the cancellation of the Predecessor’s common stock of $0.4 million and the Predecessor’s additional paid-in-capital of $808.7 million.

(h) Reflects the reorganization adjustments to common stock and additional paid-in-capital:


	(in thousands)
Par value of 13.9 million shares of new common stock issued	$	139
Capital in excess of par value of 13.9 million issued and authorized shares of new common stock issued	135,065
Total Successor equity issued on the Plan Effective Date	$	135,204

(i) Reflects the reorganization adjustments to accumulated deficit:


	(in thousands)
Gain on settlement of liabilities subject to compromise	$	184,296
Accrual of professional services success fees	(3,440)
Payment of non-retained professional fees	(2,000)
Write-off of unrecognized stock-based compensation expense	(1,581)
Total adjustments impacting reorganization items, net	177,275
Cancellation of Predecessor common stock and additional paid-in-capital	810,755
Net change in accumulated deficit	$	988,030

(j) Prior to the Plan Effective Date, the Company capitalized certain running gear associated with its Tools business based on the expected resale of the item to customers. With the adoption of fresh start accounting, the Company has elected to expense running gear as rental equipment and no longer considers the items to primarily be available for resale. As a result of this change in accounting policy, the Company wrote off approximately $2.3 million of running gear as a reorganization item. The remaining Level 3 fair value was determined by a combination of the market approach (comparable sales method for finished goods) and cost approach (replacement cost for raw materials) which resulted in an increased fair value of $0.6 million. Significant inputs utilized in determining fair value included, but was not limited to, estimates of selling price, profit allowance and holding costs, which the Company believes are reasonable and appropriate.

(k) Reflects the fair value adjustment of $45.5 million to property and equipment, net due to the Company’s adoption of fresh start accounting. The Level 3 fair value of property and equipment was determined by using a combination of (1) the cost approach, which considers historical acquisition costs for these assets adjusted for inflation, as well as factors in any potential obsolescence based on the current condition of the assets and 2) the market approach, which considers the sales of similar or substitute assets and related market data and establishes a value estimate by processes involving comparison.

(l) Reflects the $2.2 million decrease to operating lease right-of-use assets due to the remeasurement under fresh start accounting using the Company’s incremental borrowing rate (7.2%) based on the corresponding terms at the Plan Effective Date. The decrease was offset by a $1.4 million increase in operating lease right-of-use assets to recognize leasehold interests associated with favorable lease contracts under the income approach. Significant inputs utilized in determining the fair value included, but was not limited to, estimates of discount rates and market rental rates, which the Company believes are reasonable and appropriate. Discount rates ranged from 9.0% to 9.75%.

(m) Reflects the remeasurement of finance lease right-of-use assets to the corresponding finance lease obligations due to the Company’s adoption of fresh start accounting.

(n) Reflects the fair value adjustment of $56.9 million to intangible assets, net due to the Company’s adoption of fresh start accounting. For additional information, see Note 7 – Intangible Assets.


	(in thousands)
Adjustment to write-off capitalized costs and related accumulated amortization of intangible assets, net as part of fresh start accounting	$	(66,079)
Recognition of intangible assets, net recorded at fair value (See Note 7 – Intangible Assets)	9,171
	$	(56,908)

(o) Reflects the fair value adjustment of $0.3 million on an equity method investment due to the Company’s adoption of fresh start accounting.

(p) Reflects the $1.8 million decrease to operating lease obligations due to the remeasurement under fresh start accounting using the Company’s incremental borrowing rate (7.2%) based on the corresponding terms at the Plan Effective Date.

(q) Reflects the derecognition of $5.0 million of Predecessor accumulated other comprehensive loss through reorganization items, net.

(r) The following table summarizes the cumulative impact of the fresh start adjustments, the elimination of the Predecessor’s accumulated other comprehensive loss, and the adjustments required to eliminate accumulated deficit:


	(in thousands)
Fair value adjustment to inventories, net	$	(1,734)
Fair value adjustment to property and equipment, net	45,505
Fair value adjustment to operating lease right-of-use assets	(773)
Fair value adjustment to finance lease right-of-use assets	(17)
Fair value adjustment to intangible assets, net	(56,908)
Fair value adjustment to other long-term assets	(272)
Fair value adjustment to operating lease obligations	1,799
Derecognition of Predecessor accumulated other comprehensive loss	(5,029)
Total fresh start adjustments impacting reorganization items, net	(17,429)
Net change in accumulated deficit	$	(17,429)

The following condensed consolidated balance sheet is as of March 5, 2026. This condensed consolidated balance sheet includes adjustments that reflect the consummation of the transactions contemplated by the Plan (reflected in the column “Reorganization Adjustments”) as well as fair value adjustments as a result of the adoption of fresh start accounting (reflected in the column “Fresh Start Adjustments”) as of the Plan Effective Date. The explanatory notes following the table below provided further details on the adjustments, including the assumptions and methods used to determine fair value of its assets and liabilities.


	Predecessor		Reorganization Adjustments			Fresh Start Adjustments			Successor
	(in thousands)
Assets
Current assets
Cash and cash equivalents	$	23,038	$	(5,214)	(a)	$	—		$	17,824
Restricted cash	1,475		9,141		(b)	—			10,616
Accounts receivable, net	79,124		—			—			79,124
Inventories, net	52,134		—			(1,734)		(j)	50,400
Prepaid expenses	12,145		—			—			12,145
Other current assets	2,044		—			—			2,044
Total current assets	169,960		3,927			(1,734)			172,153
Property and equipment, net	61,994		—			45,505		(k)	107,499
Operating lease right of use assets, net	32,034		—			(773)		(l)	31,261
Finance lease right of use assets, net	72		—			(17)		(m)	55
Intangible assets, net	66,079		—			(56,908)		(n)	9,171
Other long-term assets	808		—			(272)		(o)	536
Total assets	$	330,947	$	3,927		$	(14,199)		$	320,675
Liabilities and Stockholders’ Equity (Deficit)
Current liabilities
Accounts payable	$	39,070	$	—		$	—		$	39,070
Accrued expenses	19,015		1,630		(c)	—			20,645
Income taxes payable	465		—			—			465
Current portion of long-term debt	4,760		—			—			4,760
Current portion of operating lease obligations	292		13,020		(d)	(1,617)		(p)	11,695
Current portion of finance lease obligations	—		55		(d)	—			55
Total current liabilities	63,602		14,705			(1,617)			76,690
Long-term liabilities
Long-term debt	82,568		7,737		(e)	—			90,305
Long-term operating lease obligations	973		17,598		(d)	(182)		(p)	18,389
Other long-term liabilities	87		—			—			87
Liabilities subject to compromise	350,173		(350,173)		(f)	—			—
Total liabilities	497,403		(310,133)			(1,799)			185,471
Commitments and contingencies (Note 11)
Stockholders’ equity (deficit)
Predecessor common stock	433		(433)		(g)	—			—
Successor common stock	—		139		(h)	—			139
Predecessor additional paid-in capital	808,741		(808,741)		(g)	—			—
Successor additional paid-in capital	—		135,065		(h)	—			135,065
Accumulated other comprehensive loss	(5,029)		—			5,029		(q)	—
Accumulated deficit	(970,601)		988,030		(i)	(17,429)		(r)	—
Total stockholders’ equity (deficit)	(166,456)		314,060			(12,400)			135,204
Total liabilities and stockholders’ equity (deficit)	$	330,947	$	3,927		$	(14,199)		$	320,675