NOTE 11: LEASES The Company enters into leases for warehouses, rail cars, forklifts, office equipment, office space and certain other types of property and equipment. The leases consist of operating and financing leases expiring in various years through 2030. The elements of the lease costs were as follows:
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Successor |
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Successor |
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Predecessor |
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Three Months Ended June 30, 2026 |
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Period from February 27, 2026 to June 30, 2026 |
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Period from January 1, 2026 to February 26, 2026 |
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Three Months Ended June 30, 2025 |
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Six Months Ended June 30, 2025 |
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(in millions) |
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(in millions) |
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(in millions) |
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(in millions) |
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(in millions) |
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Operating lease expense: |
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Operating lease expense |
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$ |
0.2 |
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$ |
0.3 |
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$ |
0.2 |
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$ |
0.2 |
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$ |
0.4 |
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Short term lease expense |
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$ |
0.1 |
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$ |
0.1 |
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$ |
— |
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$ |
0.1 |
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$ |
0.3 |
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Variable lease expense |
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0.3 |
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0.4 |
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0.2 |
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0.2 |
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0.4 |
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Total lease expense |
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$ |
0.6 |
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$ |
0.8 |
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$ |
0.4 |
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$ |
0.5 |
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$ |
1.1 |
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Total finance lease expense for the three months ended June 30, 2026 (Successor) and June 30, 2025 (Predecessor) was insignificant. Total finance lease expense for the period from February 27, 2026 to June 30, 2026 (Successor), the period from January 1, 2026 to February 26, 2026 (Predecessor), and for the three months ended June 30, 2025 (Predecessor) was $0.1 million, insignificant, and $0.1 million, respectively. Lease term and discount rate information related to leases were as follows:
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Successor |
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Predecessor |
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June 30, 2026 |
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December 31, 2025 |
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Weighted-average remaining lease term (in years) |
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Operating leases |
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1.88 |
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2.05 |
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Finance leases |
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3.41 |
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3.84 |
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Weighted-average discount rate |
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Operating leases |
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7.51 |
% |
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9.81 |
% |
Finance leases |
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7.36 |
% |
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10.53 |
% |
Supplemental cash flow information related to leases was as follows:
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Successor |
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Predecessor |
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Period from February 27, 2026 to June 30, 2026 |
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Period from January 1, 2026 to February 26, 2026 |
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Six Months Ended June 30, 2025 |
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(in millions) |
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(in millions) |
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(in millions) |
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Cash paid for amounts included in the measurement of lease liabilities |
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Operating cash flows from finance lease (interest payments) |
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$ |
— |
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$ |
— |
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$ |
— |
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Operating cash flows from operating leases |
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0.3 |
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0.2 |
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0.4 |
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Financing cash flows from finance lease |
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— |
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— |
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— |
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Right-of-use assets obtained in exchange for lease liabilities |
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Operating leases |
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$ |
— |
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$ |
— |
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$ |
0.3 |
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Finance leases |
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— |
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— |
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0.1 |
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Future maturities of lease liabilities are as follows:
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Successor |
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June 30, 2026 |
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Operating Leases |
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Finance Leases |
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Year ending December 31, |
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(in millions) |
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2026 |
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$ |
0.4 |
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$ |
0.1 |
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2027 |
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0.4 |
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0.2 |
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2028 |
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0.1 |
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0.1 |
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2029 |
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0.1 |
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0.1 |
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2030 |
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— |
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— |
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Thereafter |
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— |
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— |
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Total future undiscounted lease payments |
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1.0 |
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0.5 |
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Imputed interest |
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(0.2 |
) |
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(0.1 |
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Present value of lease payments |
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0.8 |
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0.4 |
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Current portion |
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(0.6 |
) |
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(0.1 |
) |
Long-term portion of lease payments |
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$ |
0.2 |
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$ |
0.3 |
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