Form 8-K

8-K — ALLIANCE ENTERTAINMENT HOLDING CORP

Accession: 0001493152-26-023212

Filed: 2026-05-14

Period: 2026-05-14

CIK: 0001823584

SIC: 5099 (WHOLESALE-DURABLE GOODS, NEC)

Item: Results of Operations and Financial Condition

Item: Regulation FD Disclosure

Item: Financial Statements and Exhibits

Documents

8-K — form8-k.htm (Primary)

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EX-99.2 (ex99-2.htm)

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UNITED

STATES

SECURITIES

AND EXCHANGE COMMISSION

WASHINGTON,

D.C. 20549

FORM

8-K

CURRENT

REPORT

PURSUANT

TO SECTION 13 OR 15(d) OF THE

SECURITIES

EXCHANGE ACT OF 1934

Date

of Report (Date of earliest event reported): May 14, 2026

ALLIANCE

ENTERTAINMENT HOLDING CORPORATION

(Exact

Name of Registrant as Specified in its Charter)

Delaware

001-40014

85-2373325

(State

or Other Jurisdiction

(Commission

(IRS

Employer

Incorporation)

File

Number)

Identification

No.)

8201

Peters Road, Suite 1000

Plantation,

FL, 33324

(Address

of Principal Executive Offices) (Zip Code)

(954)

255-4000

(Registrant’s

Telephone Number, Including Area Code)

Not

Applicable

(Former

Name or Former Address, if Changed Since Last Report)

Check

the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under

any of the following provisions:

☐

Written

communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐

Soliciting

material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐

Pre-commencement

communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐

Pre-commencement

communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e 4(c))

Securities

registered pursuant to Section 12(b) of the Act:

Title

of each class

Trading

Symbol(s)

Name

of each exchange on which registered

Class

A common stock, par value $0.0001 per share

AENT

The

Nasdaq Stock Market LLC

Redeemable

warrants, exercisable for shares of Class A common stock at an exercise price of $11.50 per share

AENTW

The

Nasdaq Stock Market LLC

Indicate

by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405

of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging

growth company ☒

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. ☐

Item

2.02. Results of Operations and Financial Condition.

May 14, 2026, Alliance Entertainment Holding Corporation, a Delaware corporation (the “Company” or “Alliance”),

issued a press release regarding Alliance’s financial results for its fiscal quarter ended March 31, 2026. A copy of the

press release is attached hereto as Exhibit 99.1.

The

information set forth in this Item 2.02, including the exhibit attached hereto, shall not be deemed to be filed for purposes of Section

18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise be subject to the liabilities of

that section, nor shall they be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended (the

“Securities Act”), or the Exchange Act.

Item

7.01. Regulation FD Disclosure.

updated version of an investor presentation of the Company is attached as Exhibit 99.2 to this Current Report on Form 8-K. The presentation

will be accessible online through the Investor Relations section of the Company’s website, located at ir.aent.com, under the heading

“Investor Presentation.” The information on the Company’s website is not a part of this Current Report on Form 8-K.

The

information set forth in this Item 7.01, including the exhibit attached hereto, shall not be deemed to be filed for purposes of Section

18 of the Exchange Act, or otherwise be subject to the liabilities of that section, nor shall they be deemed to be incorporated by reference

in any filing under the Securities Act or the Exchange Act.

Forward-Looking

Statements

This

Current Report on Form 8-K includes certain statements that are not historical facts but are forward-looking statements for purposes

of the safe harbor provisions under the United States Private Securities Litigation Reform Act of 1995. These statements are based on

various assumptions, whether or not identified in this Current Report on Form 8-K, and on the current expectations of the Company’s

management and are not predictions of actual performance. Actual events and circumstances are difficult or impossible to predict and

will differ from assumptions. These forward-looking statements are subject to a number of risks and uncertainties, including those factors

discussed in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on

September 10, 2025 under the heading “Risk Factors,” and other documents of the Company filed, or to be filed, with the SEC,

which are accessible through the Investor Relations section of the Company’s website at ir.aent.com. If the risks materialize or

assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. The

Company disclaims any obligation to update any forward-looking statements.

Item

9.01. Financial Statements and Exhibits.

(d)

Exhibits.

Exhibit

No.

Exhibit

99.1

Press Release dated May 14, 2026.

99.2

Investor Presentation.

104

Cover

Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURE

Pursuant

to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by

the undersigned hereunto duly authorized.

Dated:

May 14, 2026

ALLIANCE

ENTERTAINMENT HOLDING CORPORATION

By:

/s/

Bruce Ogilvie

Name:

Bruce

Ogilvie

Title:

Executive

Chairman

EX-99.1

Filename: ex99-1.htm · Sequence: 2

Exhibit

99.1

Alliance

Entertainment Reports Third Quarter Fiscal Year 2026 Results

Net

revenues increased 21% year-over-year

Net

income increased 25% year-over-year to $2.3M; year-to-date net income grew 78% to $16.6M

Adjusted

EBITDA increased to $5.1M in Q3; year-to-date Adjusted EBITDA up 47% to $35.7M

PLANTATION,

Fla., May 14, 2026 (GLOBE NEWSWIRE) — Alliance Entertainment Holding Corporation (Nasdaq: AENT), a premier distributor, logistics

provider, and omnichannel fulfillment partner to the entertainment and pop culture collectibles industry, supplying more than 340,000

unique SKUs across music, video, video games, licensed merchandise, and exclusive collectibles to over 35,000 retail and e-commerce storefronts,

reported its financial and operational results for its fiscal third quarter ended March 31, 2026.

Third

Quarter FY 2026 Highlights

● Revenue

Growth and Sustained Profitability: Net revenues increased 21.2% year-over-year to $258.2

million, driven by broad-based strength across core physical product categories. Net income

increased to $2.3 million, or $0.05 per diluted share, compared to $1.9 million, or $0.04

per share, in the prior-year period, reflecting continued execution against the Company’s

profitability framework. Adjusted EBITDA was approximately $5.1 million, compared to $4.9

million in Q3 FY25. For the nine months ended March 31, 2026, net revenues increased 5% to

$880.9 million, compared to $835.7 million in the prior-year period, while net income increased

78% to $16.6 million, or $0.32 per diluted share, compared to $9.3 million, or $0.18 per

share. Adjusted EBITDA was approximately $35.7 million, up 47% from $24.4 million in the

prior-year period.

● Launch

of Endstate Authentic and Alliance Authentic™: The Company continued to advance

its technology strategy following the acquisition of Endstate on December 31, 2025, establishing

Endstate Authentic, an NFC-enabled authentication and digital product identity platform that

supports authenticated ownership, provenance, and verified resale across premium physical

goods. During the quarter, Alliance also launched Alliance Authentic™, representing

the Company’s first application of these capabilities within its own product ecosystem,

initially focused on premium vinyl collectibles. The platform has since expanded to include

additional categories, including Handmade by Robots™ and select third-party collectibles

such as Funko figures. These initiatives extend Alliance’s role beyond distribution

into ownership and participation across the product lifecycle, while creating a scalable

foundation for new authentication, collectibles, and platform revenue opportunities.

● Strength

in Physical Media: Vinyl record sales increased 15% year-over-year to $99 million, driven

by higher unit volumes and sustained interest in limited-edition releases. Compact disc (CD)

sales increased 90% year-over-year to $39 million, reflecting both higher unit volumes and

improved pricing, driven by strong demand for major releases and collectible formats, including

continued strength in international and K-pop titles. Physical movie sales increased 5% year-over-year

to $61 million, supported by a steady cadence of new releases and continued consumer demand

for premium formats such as 4K Ultra HD and collectible editions. Performance in the category

continued to benefit from the Company’s exclusive studio partnerships, including Paramount

and Amazon MGM Studios Distribution, which expanded title availability and supported growth

across key retail channels.

● Collectibles

Growth Driven by Premium Mix: Collectibles revenue increased 48% year-over-year to $8

million, driven by increased average selling prices and a continued shift toward higher-value,

premium products. Growth was supported by expanded sourcing efforts and the addition of new

vendor relationships, which contributed incremental sales during the quarter. Performance

also benefited from the transition of Handmade by Robots™ to an owned brand, as well

as improved margins across certain legacy brands following prior inventory optimization initiatives,

reflecting continued progress in enhancing product mix and profitability within the collectibles

category.

● Growth

in Gaming and Electronics: Gaming revenue increased 12% year-over-year to $33 million,

supported by continued demand for next-generation consoles, including the Nintendo Switch

II, along with related software and accessories. Electronics revenue increased 53% year-over-year

to $4.0 million, driven by higher unit volumes and a favorable mix shift toward higher-priced

audio playback devices and accessories, including turntables, CD players, headphones, and

speakers. Growth in electronics continued to benefit from strong demand for vinyl and physical

media, which drives attachment sales of complementary hardware. Performance in both categories

reflects the Company’s ability to align product mix with evolving consumer preferences

while capturing incremental demand across hardware and content ecosystems.

● Operating

Leverage and Expense Discipline: Total operating expenses improved to 11.5% of net revenue,

compared to 12.0% in the prior-year period. Selling, general and administrative expenses

improved to 6.5% of net revenue, compared to 6.7% in the prior year, while distribution and

fulfillment expenses declined to 4.3% of net revenue, compared to 4.7% in Q3 FY25. The improvement

was driven by higher revenue scale, productivity gains, and the Company’s flexible

labor model, which continues to support efficient fulfillment operations while enabling targeted

investments in infrastructure, technology, and automation to support future growth.

● Balance

Sheet and Liquidity Strength: The Company ended the quarter with working capital of approximately

$60.0 million, reflecting disciplined management of inventory and payables to support ongoing

growth. The Company had approximately $56 million of availability under its revolving credit

facility at quarter end, providing ample liquidity and financial flexibility to support working

capital needs and strategic initiatives.

“Our

third quarter results reflect continued strength across our core categories and the operating leverage inherent in our model,”

said Jeff Walker, Chief Executive Officer of Alliance Entertainment. “We delivered over 21% revenue growth in the quarter and strong

year-to-date earnings expansion, demonstrating that our platform is scaling and that improvements in product mix and cost structure are

translating into durable profitability.”

“We

are also seeing continued validation of the broader shift toward physical media as a collectible category, where ownership, scarcity,

and premium formats are driving collector purchasing behavior,” Walker added. “This trend is increasingly supported by collector-driven

discovery and community engagement across social media platforms, particularly among younger consumers who are prioritizing intentional

listening, tangible ownership, and long-term value. Our exclusive partnerships and curated assortment position us at the center of that

trend, while our direct-to-consumer and platform initiatives are enabling us to capture more value across the lifecycle of each product.”

“During

the quarter, we advanced the next phase of our strategy with the launch of Alliance Authentic™, extending our platform into authenticated

collectibles,” Walker continued. “Importantly, this represents the first commercial application of Endstate Authentic, our

NFC-enabled authentication platform, and extends our role beyond distribution into ownership, provenance, and the full lifecycle of collectible

products. Subsequent to quarter end, we further expanded our platform strategy with the relaunch of Movies Unlimited as a curated, collector-focused

destination designed to deepen engagement and increase customer lifetime value. Together, these initiatives build on our existing scale

to enhance product value, strengthen customer relationships, and create additional long-term growth opportunities.”

Amanda

Gnecco, Chief Financial Officer of Alliance Entertainment, said, ““We delivered strong financial performance in the third

quarter, with revenue up 21% and net income increasing 25% year-over-year. For the first nine months of fiscal year 2026, net income

increased 78% to $16.6 million, and Adjusted EBITDA increased 47% to $35.7 million, highlighting the growing earnings power and scalability

of our platform.”

“We

are seeing clear operating leverage across the business, with operating expenses declining as a percentage of revenue even as we continue

to invest in infrastructure, technology, and growth initiatives. At the same time, we maintained a strong liquidity position, ending

the quarter with approximately $60 million in working capital and $56 million of availability under our revolving credit facility. With

a more efficient cost structure and continued momentum in higher-value categories, we believe we are well positioned to sustain both

revenue growth and meaningful earnings expansion.”

Third

Quarter FY 2026 Financial Results

● Net

revenues for the fiscal third quarter ended March 31, 2026, were $258.2 million, up 21.1%

from $213 million in the same period of fiscal 2025.

● Gross

profit for the fiscal third quarter ended March 31, 2026, was $33.0 million, up 13.4% from

$29.1 million in the same period of fiscal 2025.

● Gross

margin for the fiscal third quarter ended March 31, 2026, was 12.8%, compared to 13.6% in

the same period of fiscal 2025.

● Net

income for the fiscal third quarter ended March 31, 2026, was $2.3 million, or $0.05 per

diluted share, up 25.0% from net income of $1.9 million, or $0.04 per diluted share for the

same period of fiscal 2025.

● Adjusted

EBITDA for the fiscal third quarter ended March 31, 2026, was $5.1 million, up 4.1% from

Adjusted EBITDA of $4.9 million for the same period of fiscal 2025.

Nine-Months

FY 2026 Financial Results

● Net

revenues for the nine months ended March 31, 2026, were $880.9 million, up 5.0% from $835.7

million in the same period of fiscal 2025.

● Gross

profit for the nine months ended March 31, 2026, was $117.3 million, up 21.0% from $96.9

million in the same period of fiscal 2025.

● Gross

margin for the nine months ended March 31, 2026, was 13.3%, up 170 basis points from 11.6%

in the same period of fiscal 2025.

● Net

income for the nine months ended March 31, 2026, was $16.6 million, or $0.32 per diluted

share, up 78% from net income of $9.3 million, or $0.18 per diluted share for the same period

of fiscal 2025.

● Adjusted

EBITDA for the nine months ended March 31, 2026, was $35.7 million, up 47% from Adjusted

EBITDA of $24.4 million for the same period of fiscal 2025.

Conference

Call

Alliance

Entertainment Chief Executive Officer Jeff Walker, Chief Financial Officer Amanda Gnecco, and Executive Chairman Bruce Ogilvie will host

the conference call, which will be followed by a question-and-answer session. A presentation will accompany the call and can be viewed

during the webcast or accessed via the investor relations section of the Company’s website here.

access the call, please use the following information:

Date:

Thursday,

May 12, 2026

Time:

4:30

p.m. Eastern Time, 1:30 p.m. Pacific Time

Toll-free

dial-in number:

1-877-407-0784

International

dial-in number:

1-201-689-8560

Conference

ID:

13760161

Please

call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you

have any difficulty connecting with the conference call, please contact RedChip Companies at 1-407-644-4256.

The

conference call will be broadcast live and available for replay at https://viavid.webcasts.com/starthere.jsp?ei=1760227&tp_key=0154ad6f3e

and via the investor relations section of the Company’s website here.

telephone replay of the call will be available approximately three hours after the call concludes and can be accessed through June 14,

2026, using the following information:

Toll-free

replay number:

1-844-512-2921

International

replay number:

1-412-317-6671

Replay

ID:

13760161

About

Alliance Entertainment

Alliance

Entertainment (NASDAQ: AENT) is a premier distributor and fulfillment partner for the entertainment and pop culture collectibles industry.

With more than 340,000 unique in-stock SKUs — including over 57,300 exclusive titles across compact discs, vinyl LPs, DVDs, Blu-rays,

and video games — Alliance offers the largest selection of physical media in the market. Our vast catalog also includes licensed

merchandise, toys, retro gaming products, and collectibles, serving over 35,000 retail locations and powering e-commerce fulfillment

for leading retailers. Alliance also owns and operates proprietary collectibles brands, including Handmade by Robots™, a stylized

vinyl figure line featuring licensed characters from leading entertainment franchises, and Alliance Authentic™, a premium platform

for authentic, certified, and individually numbered entertainment collectibles. In addition, Alliance operates Endstate Authentic, a

dedicated NFC-enabled authentication and digital product identity platform supporting authenticated collectibles, resale, and brand protection.

Leveraging decades of operational expertise, exclusive sourcing relationships, and a capital-light, scalable infrastructure, Alliance

connects fans and collectors to the products, franchises, and experiences they value across formats and generations. For more information,

visit www.aent.com.

Forward

Looking Statements

Certain

statements included in this Press Release that are not historical facts are forward-looking statements for purposes of the safe harbor

provisions under the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements generally are accompanied

by words such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,”

“intend,” “expect,” “should,” “would,” “plan,” “predict,” “potential,”

“seem,” “seek,” “future,” “outlook,” and similar expressions that predict or indicate

future events or trends or that are not statements of historical matters. These forward-looking statements include, but are not limited

to, statements regarding estimates and forecasts of other financial and performance metrics and projections of market opportunity. These

statements are based on various assumptions, whether identified in this Press Release, and on the current expectations of Alliance’s

management and are not predictions of actual performance. These forward-looking statements are provided for illustrative purposes only

and are not intended to serve as and must not be relied on by an investor as, a guarantee, an assurance, a prediction, or a definitive

statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions.

Many actual events and circumstances are beyond the control of Alliance. These forward-looking statements are subject to a number of

risks and uncertainties, including risks relating to the anticipated growth rates and market opportunities; changes in applicable laws

or regulations; the ability of Alliance to execute its business model, including market acceptance of its systems and related services;

Alliance’s reliance on a concentration of suppliers for its products and services; increases in Alliance’s costs, disruption

of supply, or shortage of products and materials; Alliance’s dependence on a concentration of customers, and failure to add new

customers or expand sales to Alliance’s existing customers; increased Alliance inventory and risk of obsolescence; Alliance’s

significant amount of indebtedness; our ability to refinance our existing indebtedness; our ability to continue as a going concern absent

access to sources of liquidity; risks that a breach of the revolving credit facility could result in the lender declaring a default and

that the full outstanding amount under the revolving credit facility could be immediately due in full, which would have severe adverse

consequences for the Company; known or future litigation and regulatory enforcement risks, including the diversion of time and attention

and the additional costs and demands on Alliance’s resources; Alliance’s business being adversely affected by increased inflation,

uncertainty regarding tariffs, higher interest rates and other adverse economic, business, and/or competitive factors; geopolitical risk

and changes in applicable laws or regulations; as well as our financial condition and results of operations; substantial regulations,

which are evolving, and unfavorable changes or failure by Alliance to comply with these regulations; product liability claims, which

could harm Alliance’s financial condition and liquidity if Alliance is not able to successfully defend or insure against such claims;

availability of additional capital to support business growth; and the inability of Alliance to develop and maintain effective internal

controls.

For investor inquiries, please contact:

Dave Gentry

RedChip Companies, Inc.

1-800-REDCHIP (733-2447)

1-407-644-4256

AENT@redchip.com

ALLIANCE

ENTERTAINMENT HOLDING CORP.

UNAUDITED

CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended

Nine Months Ended

($ in thousands except share and per share amounts)

March 31, 2026

March 31, 2025

March 31, 2026

March 31, 2025

Net Revenues

$ 258,201

$ 213,045

$ 880,886

$ 835,707

Cost of Revenues (excluding depreciation and amortization)

225,180

183,984

763,590

738,821

Operating Expenses

Distribution and Fulfillment Expense

11,120

9,989

33,161

31,425

Selling, General and Administrative Expense

16,878

14,187

48,545

41,092

Depreciation and Amortization

1,392

1,352

3,966

3,865

Transaction Costs

313

909

Insurance Claim Recovery

(408 )

Restructuring Cost

Gain on Disposal of Fixed Assets

(24 )

(15 )

Total Operating Expenses

29,703

25,532

86,151

76,440

Operating Income

3,318

3,529

31,145

20,446

Other Expenses

Interest Expense

1,568

2,435

7,369

8,101

Change in Fair Value of Warrants

(884 )

(1,676 )

1,428

910

Total Other Expenses

684

759

8,797

9,011

Income Before Income Tax Expense

2,634

2,770

22,348

11,435

Income Tax Expense

323

919

5,769

2,116

Net Income

2,311

1,851

16,579

9,319

Net Income per Share – Basic

$ 0.05

$ 0.04

$ 0.33

$ 0.18

Weighted Average Common Shares Outstanding - Basic

50,963,322

50,957,370

50,959,324

50,957,370

Net Income per Share – Diluted

$ 0.05

$ 0.04

$ 0.32

$ 0.18

Weighted Average Common Shares Outstanding - Diluted

51,028,493

50,965,970

51,024,496

50,965,970

ALLIANCE

ENTERTAINMENT HOLDING CORP.

CONSOLIDATED

BALANCE SHEETS

($ in thousands except per share amounts)

March 31, 2026

June 30, 2025

(Unaudited)

Assets

Current Assets

Cash

$ 1,237

$ 1,236

Trade Receivables, Net of Allowance for Credit Losses of $799 and $867, respectively

92,849

95,027

Inventory, Net

126,690

102,848

Other Current Assets

19,200

19,021

Total Current Assets

239,976

218,132

Property and Equipment, Net

10,919

11,291

Operating Lease Right-of-Use Assets, Net

16,875

19,214

Goodwill

94,081

89,116

Intangibles, Net

19,397

18,475

Other Long-Term Assets

1,644

789

Deferred Tax Asset, Net

4,211

Total Assets

$ 387,103

$ 361,228

Liabilities and Stockholders’ Equity

Current Liabilities

Accounts Payable

$ 158,453

$ 155,300

Accrued Expenses

12,660

9,548

Current Portion of Operating Lease Obligations

3,314

3,229

Current Portion of Finance Lease Obligations

2,720

3,075

Deferred Consideration

1,300

Contingent Liability

1,577

Total Current Liabilities

180,024

172,729

Revolving Credit Facility, Net

64,330

55,268

Finance Lease Obligation, Non- Current

1,931

Operating Lease Obligations, Non-Current

15,052

17,432

Shareholder Loan (subordinated), Non-Current

10,000

Contingent Liability, Non-Current

5,500

Acquired Royalty Obligation (Endstate), Non-Current

165

Warrant Liability

2,075

646

Total Liabilities

267,153

258,006

Commitments and Contingencies (Note 13)

Stockholders’ Equity

Preferred Stock: Par Value $0.0001 per share, Authorized 1,000,000 shares, Issued and Outstanding and 0 shares as of March 31, 2026, and June 30, 2025

Common Stock: Par Value $0.0001 per share, Authorized 550,000,000 shares at March 31, 2026, and at June 30, 2025; Issued and Outstanding 50,974,630 Shares as of March 31, 2026, and 50,957,370 at June 30, 2025, respectively

Paid In Capital

48,719

48,570

Accumulated Other Comprehensive Loss

(76 )

Retained Earnings

71,302

54,723

Total Stockholders’ Equity

119,950

103,222

Total Liabilities and Stockholders’ Equity

$ 387,103

$ 361,228

ALLIANCE

ENTERTAINMENT HOLDING CORP.

UNAUDITED

CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended

($ in thousands)

March 31, 2026

March 31, 2025

Cash Flows from Operating Activities:

Net Income

$ 16,579

$ 9,319

Adjustments to Reconcile Net Income to

Net Cash Provided by Operating Activities:

Depreciation of Property and Equipment

1,339

1,280

Amortization of Intangible Assets

2,627

2,585

Amortization of Deferred Financing Costs (Included in Interest Expense)

2,053

1,053

Allowance for Credit Losses

1,190

780

Change in Fair Value of Warrants

1,428

910

Deferred Income Taxes

(967 )

Non-cash lease expense

2,339

2,157

Stock-based Compensation Expense

149

Gain on Disposal of Fixed Assets

(24 )

(15 )

Changes in Assets and Liabilities

Trade Receivables

988

(3,283 )

Inventory

(23,842 )

4,994

Income Taxes Payable

5,182

1,558

Operating Lease Obligations

(2,294 )

(1,004 )

Other Assets

(1,071 )

(6,027 )

Accounts Payable

3,153

6,368

Accrued Expenses and Contingent Liability

(2,467 )

(3,627 )

Net Cash Provided by Operating Activities

7,329

16,081

Cash Flows from Investing Activities:

Capital Expenditures

(974 )

(52 )

Cash Paid for Business Acquisition/Asset Purchase

(1,150 )

(7,551 )

Cash Inflow from Asset Disposal

Investment in Captive Stock

Net Cash Used in Investing Activities

(2,058 )

(7,588 )

Cash Flows from Financing Activities:

Payments on Financing Leases

(2,279 )

(2,116 )

Payments on Revolving Credit Facility

(882,067 )

(778,620 )

Borrowings on Revolving Credit Facility

889,722

773,144

Repayments on Shareholder Note (Subordinated), Non-Current

(10,000 )

Deferred Financing Cost

(646 )

Net Cash Used in Financing Activities

(5,270 )

(7,592 )

Net Increase in Cash

901

Cash, Beginning of the Period

1,236

1,129

Cash, End of the Period

$ 1,237

$ 2,030

Supplemental disclosure for Cash Flow Information

Cash Paid for Interest

$ 7,300

$ 8,089

Cash Paid for Income Taxes

$ 2,062

$ 1,675

Supplemental Disclosure for Non-Cash Investing and Financing Activities

Conversion of Warrants from liability to Equity

454

Non-GAAP

Financial Measures: For the three months ended March 31, 2026, we had non-GAAP Adjusted EBITDA of approximately $5.1 million compared

with Adjusted EBITDA of approximately $4.9 million in the prior year period, or a year-over-year improvement of $0.2 million. For the

nine months ended March 31, 2026, we had non-GAAP Adjusted EBITDA of approximately $35.7 million compared with Adjusted EBITDA of approximately

$24.4 million in the prior year period, or a year-over-year improvement of $11.3 million. We define Adjusted EBITDA as net income (loss)

adjusted to exclude: (i) income tax expense; (ii) interest expense; (iii) depreciation and amortization; (iv) changes in the fair value

of warrant liabilities; and (v) other non-recurring or non-cash items, including transaction costs and stock-based compensation. Our

method of calculating Adjusted EBITDA may differ from other companies and accordingly, this measure may not be comparable to measures

used by other companies. We use Adjusted EBITDA to evaluate our own operating performance and as an integral part of our planning process.

We present Adjusted EBITDA as a supplemental measure because we believe such a measure is useful to investors as a reasonable indicator

of operating performance. We believe this measure is a financial metric used by many investors to compare companies. This measure is

not a recognized measure of financial performance under GAAP in the United States and should not be considered as a substitute for operating

earnings (losses), net earnings (loss) from continuing operations or cash flows from operating activities, as determined in accordance

with GAAP. See the table below for a reconciliation, for the periods presented, of our GAAP net income (loss) to Adjusted EBITDA.

Three Months

Ended

Three Months

Ended

($ in thousands)

March 31, 2026

March 31, 2025

Net Income

$ 2,311

$ 1,851

Add back:

Interest Expense

1,568

2,435

Income Tax Expense

323

919

Depreciation and Amortization Expense

1,392

1,352

EBITDA

$ 5,594

$ 6,557

Adjustments

Stock-based Compensation Expense

Transaction Costs

313

Change In Fair Value of Warrants

(884 )

(1,676 )

Restructuring Cost

Adjusted EBITDA

$ 5,078

$ 4,885

Nine Months

Ended

Nine Months

Ended

($ in thousands)

March 31, 2026

March 31, 2025

Net Income

$ 16,579

$ 9,319

Add back:

Interest Expense

7,369

8,101

Income Tax Expense

5,769

2,116

Depreciation and Amortization Expense

3,966

3,865

EBITDA

$ 33,683

$ 23,401

Adjustments

Stock-based Compensation Expense

149

Transaction Costs

909

Change In Fair Value of Warrants

1,428

910

Restructuring Cost

Insurance Claim Recovery

(408 )

Gain on Disposal of Property and Equipment

(24 )

(15 )

Adjusted EBITDA

$ 35,739

$ 24,369

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