Note 2 - UES-UK

On October 14, 2025 (the “Filing Date”), the Directors of Union Electric Steel UK Limited (“UES-UK”), an indirect wholly owned subsidiary of the Corporation, filed a Notice of Appointment with the High Court of Justice, Business and Property Courts at Leeds formally appointing certain insolvency practitioners of FRP Advisory Trading Limited as administrators of UES-UK (collectively, the “Administrators”). This action was confined to UES-UK exclusively and did not affect the Corporation or any of its other subsidiaries. As of the Filing Date, UES-UK was in administration and its affairs, business and property were being managed by the Administrators (the “Structured Insolvency”).

Through October 13, 2025, the date immediately prior to the Filing Date, the operating results of UES-UK are included in the condensed consolidated operating results of the Corporation. Effective as of the Filing Date, the Corporation no longer consolidates the operating results of UES-UK, as the Corporation no longer has decision-making control over UES-UK. As of the Filing Date, the Corporation (i) wrote down its investment in UES-UK to its estimated fair value; (ii) recognized the other comprehensive losses of UES-UK deferred in accumulated other comprehensive loss; and (iii) established an estimated recovery for the amount of funds expected to be returned to the lenders under the Corporation's Second Amended and Restated Revolving Credit, Term Loan and Security Agreement (the “Credit Agreement”) after the costs and expenses of the Structured Insolvency (the “Estimated Recovery”), if any, since the accounts receivables, inventories, and equipment of UES-UK were held as collateral under the Credit Agreement.

As of December 31, 2025, the Estimated Recovery equaled $7,500. In January 2026, the Administrators distributed $1,255 to the Corporation, which was returned to the lenders under the Credit Agreement reducing the Corporation's balance outstanding under the Credit Agreement. Based on updated information received from the Administrators, including lower funds expected to be available for future distributions, the Corporation subsequently wrote down the Estimated Recovery by $875 which is recognized as a Deconsolidation Charge in the accompanying condensed consolidated statements of operations for the nine months ended September 30, 2026.

The Estimated Recovery is recorded as a current asset on the condensed consolidated balance sheets as the Corporation expects to receive the balance within the next 12 months. However, there can be no assurance the balance will be collected within the next 12 months given the inherent risks associated with any insolvency, including a structured insolvency.

The Corporation will continue to evaluate the collectability of the Estimated Recovery and will adjust the Estimated Recovery based on facts and circumstances at each reporting date. If it is determined the Estimated Recovery is expected to be lower than currently estimated, then the Estimated Recovery would be reduced and a charge to net income would be recorded. Similarly, if it is determined the Estimated Recovery is expected to be higher than currently estimated, then the Estimated Recovery would be increased and a credit to net income would be recorded. Any recovery will be distributed in the order of priority set forth in the Insolvency Act 1986.

For the three and nine months ended September 30, 2025, the Corporation recognized estimated charges approximating $3,069 and $9,819, respectively, primarily for employee-related costs payable to the employees of UES-UK under existing benefit plans; accelerated depreciation from reducing the estimated remaining useful lives and revising the estimated residual values of the property, plant and equipment of UES-UK; and similar closure costs approximating $800 for the non-core steel distribution facility located in Ohio held by Alloys Unlimited and Processing, LLC (“AUP”), an indirect wholly owned subsidiary of the Corporation (collectively, the “Exit Charges”).

The charge for employee-related costs primarily represented statutory severance and other benefits payable to the approximately 168 employees of UES-UK and the 15 employees of AUP under existing benefit plans. Accelerated depreciation is a non-cash charge and represented higher depreciation expense resulting from reducing the estimated remaining useful lives and revising the estimated residual value of the property, plant and equipment of UES-UK and AUP. Professional fees represent direct costs incurred relating to the formal consultation process of UES-UK. Loss on sale of assets is a non-cash charge and represents the loss on the sale of the equipment of AUP during the third quarter of 2025. As a result of the Structured Insolvency, no outstanding accrued severance remained as of December 31, 2025.