Form 8-K

8-K — ALLIANCE ENTERTAINMENT HOLDING CORP

Accession: 0001493152-26-042245

Filed: 2026-09-10

Period: 2026-09-10

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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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): September 10, 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.

September 10, 2026, Alliance Entertainment Holding Corporation, a Delaware corporation (the “Company” or “Alliance”),

issued a press release regarding Alliance’s financial results for the fiscal year ended June 30, 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, 2026 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 September 10, 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:

September 10, 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 Fiscal 2026 Revenue Up 8% to $1.15 Billion; Gross Margin Expands 80 Basis Points to 13.3%

GAAP

net income was $13.1 million, or $0.26 per diluted share; adjusted EBITDA increased 14% to $41.5 million; adjusted net income rose 24%

to $23.4 million and adjusted diluted EPS increased 24% to $0.46

Vinyl

revenue increases 13% to $383 million; CD revenue rises 25% to $156 million

Physical

movie revenue increases 22% as relationships with Paramount and Amazon MGM Studios reinforce Alliance’s position as a scaled physical

entertainment distribution partner

Collectibles

revenue increases 45% as Alliance expands its portfolio of higher-value, premium and proprietary products

PLANTATION,

Fla., September 10, 2026 (GLOBE NEWSWIRE) — Alliance Entertainment Holding Corporation (Nasdaq: AENT), a scaled entertainment commerce

and collectibles platform serving content owners, brands, retailers and fans across music, movies, gaming, licensed merchandise and collectibles,

with proprietary brands, authentication technology and reach across more than 35,000 retail and e-commerce storefronts, reported its

financial and operational results for its fiscal year ended June 30, 2026.

Fiscal

2026 Financial Highlights

●

Net

Revenues: Increased 8% to $1.149 billion, compared with $1.063 billion in fiscal 2025.

●

Gross

Profit and Margin: Gross profit increased 15% to $152.3 million from $132.9 million, while gross margin expanded 80 basis points

to 13.3% from 12.5%.

●

GAAP

Results: Operating income was $27.2 million and net income was $13.1 million, compared with $30.1 million and $15.1 million,

respectively. Fiscal 2026 included a $7.8 million non-cash write-off of a historical vendor rebate receivable.

●

Adjusted

EBITDA: Increased 14% to $41.5 million, compared with $36.5 million in fiscal 2025.

●

Adjusted

Net Income and Adjusted Diluted EPS: Adjusted net income increased 24% to $23.4 million, compared with $18.9 million in fiscal

2025, while adjusted diluted earnings per share increased 24% to $0.46 from $0.37.

●

Interest

Expense: Decreased 28% to $7.6 million from $10.6 million, reflecting a lower average effective interest rate following the Company’s

refinancing.

●

Cash

Flow and Liquidity: Net cash used in operating activities was $1.7 million, compared with $26.8 million of net cash provided

in fiscal 2025, primarily reflecting increased inventory and receivables to support growth. The Company ended fiscal 2026 with $45.7

million of availability under its $120 million revolving credit facility.

“Fiscal

2026 demonstrated that the strategy we have been executing is strengthening both the quality of our business and our position across

the entertainment ecosystem,” said Jeff Walker, Chief Executive Officer of Alliance Entertainment. “The market for physical

entertainment continues to evolve toward premium formats, collectible products and more specialized distribution, and those changes are

playing directly to the capabilities we have built over more than three decades. Our expanding relationships with major content owners,

including Paramount and Amazon MGM Studios, reinforce the value of our scale, infrastructure, and ability to manage increasingly complex

physical entertainment programs across wholesale, retail, and e-commerce channels.”

“Our

opportunity is increasingly broader than traditional distribution,” Walker continued. “We are using the same infrastructure

and relationships that support our core business to expand into higher-value collectibles, proprietary products, fulfillment services

and new capabilities such as authentication and digital product identity. Our focus is not simply on putting more volume through the

platform, but on improving the value and economics of what moves through it. As the entertainment market becomes more specialized and

content owners and retailers look for scaled partners that can manage that complexity, we believe Alliance is increasingly well positioned

to capture those opportunities and create durable long-term value.”

“Fiscal

2026 was a year of strong execution for Alliance Entertainment,” said Amanda Gnecco, Chief Financial Officer of Alliance Entertainment.

“We expanded gross margins, grew gross profit faster than revenue and delivered growth in adjusted EBITDA, adjusted net income and

adjusted diluted earnings per share. These results demonstrate the progress we’ve made in strengthening the earnings profile of the business

while continuing to invest in the products, capabilities and partnerships that support our long-term growth strategy.”

“Looking

ahead to fiscal 2027, we are excited about the opportunities in front of us,” Gnecco added. “Our focus remains on driving profitable

growth, improving cash generation and increasing operating leverage as we continue to scale the business. Combined with lower borrowing

costs, solid liquidity and continued investment in automation and technology, we believe we are well positioned to deliver continued

value for our customers, partners and shareholders.”

Strategic

& Operating Highlights

●

Physical

Music Demand Remained Strong Across Formats: Vinyl revenue increased 13% to $383 million, while CD revenue increased 25% to $156

million. Growth across both formats reflects sustained consumer demand for physical ownership, premium editions and collectible-oriented

releases, reinforcing the durability of physical music as an important part of Alliance’s portfolio.

●

Home

Entertainment Growth Reinforced Alliance’s Strategic Position with Major Studios: Physical movie revenue increased 22%

to $339 million, supported by higher unit volumes and the Company’s expanding studio relationships. Alliance’s exclusive

physical-media distribution relationship with Paramount and the addition of Amazon MGM Studios during fiscal 2026 further strengthen

the Company’s role as a scaled partner for content owners seeking to manage physical entertainment distribution across wholesale,

retail and e-commerce channels.

●

Collectibles

Continued to Expand as a Higher-Value Growth Category: Collectibles revenue increased 45% to $32 million, supported by higher

average selling prices, expanded licensed merchandise offerings and continued development of proprietary products. The Company is

leveraging its existing entertainment relationships and distribution infrastructure to broaden its participation in premium fan and

collector categories, including through its owned Handmade by Robots™ brand.

●

Fulfillment

Growth and Automation Investments Enhanced Platform Scalability: Distribution and fulfillment fee revenue increased 26% to $18.6

million as Alliance continued to expand its role as an omnichannel logistics and fulfillment partner. During fiscal 2026, the Company

ordered 5,000 additional totes for its AutoStore system, increasing capacity to 57,000 totes and supporting higher throughput while

maintaining fulfillment labor efficiency.

●

Authentication

and Digital Identity Expanded Alliance’s Platform Capabilities: Following the acquisition and integration of Endstate,

Alliance continued developing NFC-enabled authentication and digital product identity capabilities through Endstate Authentic and

Alliance Authentic™. These initiatives are designed to extend the Company’s participation beyond initial product distribution

into areas such as authenticated ownership, provenance, brand protection and resale, creating additional long-term opportunities

across premium physical products and collectibles.

Fiscal

2026 Financial Review

The

improvement in gross margin during fiscal 2026 reflected stronger margins in physical movies and collectibles, increased contribution

from premium and exclusive content, favorable product mix and returns activity, and lower wholesale freight costs as a percentage of

sales. A portion of the increase in gross profit was offset by higher selling, general and administrative expenses, which increased to

$66.0 million from $56.0 million, primarily reflecting higher payroll and employee-related costs to support growth, as well as increased

consulting and professional-service costs associated with strategic initiatives and public-company operations. Fiscal 2026 also included

a $7.8 million non-cash write-off of a historical vendor rebate receivable associated with Tastemakers following the counterparty’s

cessation of operations. The Company does not consider this charge representative of its ongoing operating performance.

Operating

cash flow in fiscal 2026 was principally affected by increased working-capital investment to support the Company’s higher revenue

base and anticipated customer demand. Working capital increased to $62.4 million at June 30, 2026, from $45.4 million a year earlier.

Inventory and trade receivables increased at rates above the Company’s 8% revenue growth during the year, contributing to the year-over-year

decline in operating cash flow. In fiscal 2027, management’s objective is to convert a greater share of earnings into operating

cash flow by moderating working-capital growth relative to revenue, increasing inventory productivity and strengthening receivable collections.

The

Company benefited from lower borrowing costs during fiscal 2026, with its average effective interest rate declining to 6.1% from 9.2%

following its refinancing with Bank of America in October 2025. The Company had $74.3 million outstanding under its $120 million revolving

credit facility, with $45.7 million of remaining availability, The facility also provides, subject to certain conditions and lender consent,

for up to $50 million of additional borrowing capacity, providing further potential financial flexibility as the business grows. The

Company was in compliance with applicable covenants at year-end. During fiscal 2026, the Company also repaid $10.0 million of related-party

borrowings, further simplifying its financing structure.

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,

September 10, 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:

13762431

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=1774079&tp_key=92e32c8d84

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 October

10, 2026, using the following information:

Toll-free

replay number:

1-844-512-2921

International

replay number:

1-412-317-6671

Replay

ID:

13762431

About

Alliance Entertainment

Alliance

Entertainment (NASDAQ: AENT) is a scaled entertainment commerce and collectibles platform serving content owners, brands, retailers and

fans across music, movies, gaming, licensed merchandise and collectibles. The Company also owns and develops proprietary brands and platforms,

including Handmade by Robots™ and Alliance Authentic™, while Endstate Authentic adds NFC-enabled authentication and digital

product identity capabilities supporting provenance, brand protection and authenticated resale. Leveraging decades of industry relationships

and distribution, fulfillment and inventory-management expertise, Alliance reaches more than 35,000 retail and e-commerce storefronts,

connecting entertainment franchises and collectible products with consumers across channels 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; 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.

CONSOLIDATED

STATEMENTS OF OPERATIONS

Year Ended

($ in thousands except share and per share amounts)

June 30, 2026

June 30, 2025

Net Revenues

$ 1,148,986

$ 1,063,457

Cost of Revenues (excluding depreciation and amortization)

996,662

930,605

Operating Expenses

Distribution and Fulfillment Expense

44,960

40,375

Selling, General and Administrative Expense

66,169

55,992

Depreciation and Amortization

5,359

5,334

Loss on Vendor Receivable

7,823

Transaction Costs

1,213

957

Insurance Claim Recovery

(395 )

Restructuring Cost

Gain on Disposal of Fixed Assets

(24 )

(15 )

Total Operating Expenses

125,105

102,716

Operating Income

27,219

30,136

Other Expenses

Interest Expense

7,606

10,575

State tax Benefit from prior year

(51 )

Change in Fair Value of Warrants

850

853

Total Other Expenses

8,405

11,428

Income Before Income Tax Expense

18,814

18,708

Income Tax Expense

5,756

3,630

Net Income

13,058

15,078

Other Comprehensive Income (Loss)

Foreign Currency Translation

(1 )

Total Comprehensive Income

13,057

15,081

Net Income per Share – Basic

$ 0.26

$ 0.30

Weighted Average Common Shares Outstanding - Basic

50,963,975

50,957,370

Net Income per Share – Diluted

0.26

0.30

Weighted Average Common Shares Outstanding - Diluted

51,051,740

51,016,546

ALLIANCE

ENTERTAINMENT HOLDING CORP.

CONSOLIDATED

BALANCE SHEETS

($ in thousands, except per share amounts)

June 30, 2026

June 30, 2025

Assets

Current Assets

Cash

$ 814

$ 1,236

Trade Receivables, Net of Allowance for Credit Losses of $811 and $867, respectively

111,038

95,027

Inventory, Net

126,599

102,848

Other Current Assets

9,843

19,021

Total Current Assets

248,294

218,132

Property and Equipment, Net

10,564

11,291

Operating Lease Right-Of-Use Assets, Net

16,062

19,214

Goodwill

94,081

89,116

Intangibles, Net

18,457

18,475

Other Long-Term Assets

9,932

789

Deferred Tax Asset, Net

210

4,211

Total Assets

$ 397,600

$ 361,228

Liabilities and Stockholders’ Equity

Current Liabilities

Accounts Payable

$ 170,958

$ 155,300

Accrued Expenses

8,361

9,548

Current Portion of Operating Lease Obligations

3,329

3,229

Current Portion of Finance Lease Obligations

1,937

3,075

Deferred Consideration

1,300

Contingent Liability

1,577

Total Current Liabilities

185,885

172,729

Revolving Credit Facility, Net

73,721

55,268

Finance Lease Obligation, Non- Current

1,931

Operating Lease Obligations, Non-Current

14,217

17,432

Shareholder Loan (subordinated), Non-Current

10,000

Contingent Liability, Non-Current

5,500

Acquired Royalty Obligation (Endstate), Non-Current

165

Warrant Liability

1,496

646

Total Liabilities

280,984

258,006

Commitments and Contingencies (Note 12)

Stockholders’ Equity

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

Common Stock: Par Value $0.0001 per share, Authorized 550,000,000 shares at June 30, 2026, and at June 30, 2025; Issued and Outstanding 50,979,630 shares at June 30, 2026, and 50,957,370 at June 30, 2025, respectively

Paid In Capital

48,907

48,570

Accumulated Other Comprehensive Loss

(77 )

(76 )

Retained Earnings

67,781

54,723

Total Stockholders’ Equity

116,616

103,222

Total Liabilities and Stockholders’ Equity

$ 397,600

$ 361,228

ALLIANCE

ENTERTAINMENT HOLDING CORP.

CONSOLIDATED

STATEMENTS OF CASH FLOWS

Year Ended

($ in thousands)

June 30, 2026

June 30, 2025

Cash Flows from Operating Activities:

Net Income

$ 13,058

$ 15,078

Adjustments to Reconcile Net Income to

Net Cash Provided by Operating Activities:

Depreciation of Property and Equipment

1,793

1,828

Amortization of Intangible Assets

3,567

3,506

Amortization of Deferred Financing Costs (Included in Interest Expense)

2,086

1,404

Allowance for Credit Losses

1,445

1,068

Change in Fair Value of Warrants

850

853

Deferred Income Taxes

4,001

2,322

Non-cash lease expense

3,152

2,910

Stock-based Compensation Expense

337

Gain on Disposal of Fixed Assets

(24 )

(15 )

Changes in Assets and Liabilities

Trade Receivables

(17,455 )

(6,080 )

Inventory

(23,751 )

(4,665 )

Income Taxes Receivable

(600 )

(384 )

Operating Lease Obligations

(3,115 )

(1,731 )

Other Assets

462

(11,340 )

Accounts Payable

15,658

22,079

Accrued Expenses and Contingent Liability

(3,164 )

(82 )

Net Cash (Used In) Provided By Operating Activities

(1,700 )

$ 26,809

Cash Flows from Investing Activities:

Capital Expenditures

(1,074 )

(54 )

Cash Inflow from Asset Disposal

Investment in Captive Stock (Equity Component)

173

Cash Paid for Business Acquisition/Asset Purchase

(1,150 )

(7,595 )

Cash Paid for Contract

(500 )

Net Cash Used in Investing Activities

(2,021 )

(8,134 )

Cash Flows from Financing Activities:

Payments on Financing Leases

(3,069 )

(2,848 )

Payments on Revolving Credit Facility

(1,142,898 )

(986,132 )

Borrowings on Revolving Credit Facility

1,159,913

970,409

Payments on Shareholder Note (Subordinated), Current

(10,000 )

Deferred Financing Costs

(646 )

Net Cash Provided By (Used In) Financing Activities

3,300

(18,571 )

Net (Decrease)/Increase in Cash

(421 )

104

Net Effect of Currency Translation on Cash

(1 )

Cash, Beginning of the Year

1,236

1,129

Cash, End of the Year

$ 814

$ 1,236

Supplemental disclosure for Cash Flow Information

Cash Paid for Interest

$ 7,530

$ 9,171

Cash Paid for Income Taxes

$ 2,452

$ 1,727

Supplemental Disclosure for Non-Cash Investing and Financing Activities

Conversion of Warrants from liability to Equity

$ -

454

Contract Acquisition

$ -

1,800

Non-GAAP

Financial Measures: EBITDA, Adjusted EBITDA, Adjusted Net Income, and Adjusted Earnings per Diluted Share (collectively, the “Non-GAAP

Financial Measures”) are supplemental measures of our performance that are not required by, or presented in accordance with, U.S.

GAAP. The Non-GAAP Financial Measures are not measurements of our financial performance under U.S. GAAP and should not be considered

as alternatives to net income, earnings per share or any other performance measure derived in accordance with U.S. GAAP. We define EBITDA

as net income before interest expense, net, income tax expense, depreciation and amortization. We define Adjusted EBITDA as EBITDA further

adjusted for non-cash charges related to equity-based compensation programs, acquisition and deal-related costs, changes in the fair

value of warrants and vendor transaction loss, insurance claim recoveries, and restructuring costs and net gains and losses on the disposal

of assets. We define Adjusted Net Income as net income adjusted for the impact of certain non-cash charges and other items that we do

not consider in our evaluation of ongoing operating performance. These items include, among other things, non-cash charges related to

equity-based compensation programs, acquisition and deal-related costs, amortization of acquisition-related intangible assets, amortization

of deferred financing costs, changes in the fair value of warrants and litigation costs and settlements, regulatory assessments and insurance

settlements, and the income tax expense effect of these adjustments. We define Adjusted Earnings per Diluted Share as Adjusted Net Income

divided by the weighted-average shares outstanding used in the calculation of diluted earnings per share in accordance with U.S. GAAP.

caution investors that amounts presented in accordance with our definitions of the Non-GAAP Financial Measures may not be comparable

to similar measures disclosed by our competitors, because not all companies and analysts calculate the Non-GAAP Financial Measures in

the same manner. We present the Non-GAAP Financial Measures because we consider them to be important supplemental measures of our performance

and believe they are frequently used by securities analysts, investors, and other interested parties in the evaluation of companies in

our industry. Management believes that investors’ understanding of our performance is enhanced by including these Non-GAAP Financial

Measures as a reasonable basis for comparing our ongoing results of operations.

The

following tables reconcile the Non-GAAP Financial Measures to the most directly comparable U.S. GAAP financial performance measure, which

is net income, for the years presented:

Year Ended

(in thousands, except share and per share data)

June 30, 2026

June 30, 2025

Net income

$ 13,058

$ 15,078

Equity-based compensation (1)

337

Acquisition and deal-related costs (2)

1,213

957

Amortization of acquisition-related intangible assets (3)

390

180

Amortization of deferred financing costs (4)

2,086

1,404

Change in fair value of warrants and contingent consideration (5)

850

853

Loss on Vendor Receivable (6)

7,823

Litigation costs and settlements (7)

1,267

1,424

Insurance Claim Recovery (8)

(395 )

—

Income tax effect of adjustments (9)

(3,180 )

(1,006 )

Adjusted net income

$ 23,449

$ 18,948

Weighted-average shares outstanding—basic

50,963,975

50,957,370

Effect of dilutive securities

87,765

8,600

Weighted-average shares outstanding—diluted

51,051,740

50,965,970

Earnings per diluted share

$ 0.26

$ 0.30

Adjusted earnings per diluted share

$ 0.46

$ 0.37

($ in thousands)

Year Ended

June 30, 2026

Year Ended

June 30, 2025

Net income

$ 13,058

$ 15,078

Add back:

Interest expense, net

7,606

10,575

Income tax expense

5,756

3,630

Depreciation and amortization (10)

5,359

5,334

EBITDA

31,779

34,617

Adjustments:

Acquisition and deal-related costs (2)

1,213

957

Restructuring costs (11)

—

Loss on vendor receivable (6)

7,823

—

Equity-based compensation (1)

337

Change in fair value of warrants and contingent consideration (5)

850

853

Insurance claim recovery (8)

(395 )

—

State tax benefit from Prior Year (13)

(51 )

Gain on disposal of property and equipment (12)

(24 )

(15 )

Adjusted EBITDA

$ 41,532

$ 36,543

(1)

Represents non-cash charges related to equity-based compensation programs, which vary from period to period depending on the timing of

awards.

(2)

Represents costs incurred in connection with completed and contemplated business combinations, including advisory, legal, accounting

and other professional fees.

(3)

Represents amortization of intangible assets acquired in business combinations. The revenue generated by those intangible assets is not

excluded from the Non-GAAP Financial Measures.

(4)

Represents amortization of debt issuance costs incurred in connection with our credit facility with Bank of America and the terminated

White Oak Credit Facility.

(5)

Represents non-cash gains and losses resulting from the remeasurement of warrant liabilities and contingent consideration to fair value

at each reporting date.

(6)

Represents a loss recognized on a receivable due from a vendor for rebates owed before the company went out of business.

(7)

Represents legal fees, settlement amounts and other costs associated with litigation matters that we do not consider indicative of our

ongoing operating performance.

(8)

Represents recoveries received under insurance claims

(9)

Represents the income tax effect of the above adjustments. This adjustment uses a blended federal and state statutory income tax rate

of 25% for all periods presented and is applied only to those adjustments that carry an income tax consequence. Changes in the fair value

of warrants and contingent consideration are not deductible for income tax purposes and accordingly have not been tax effected.

(10)

Represents total depreciation and amortization determined in accordance with U.S. GAAP, which includes amortization of acquisition-related

intangible assets. Accordingly, no separate adjustment for that amortization is presented in the reconciliation of EBITDA to Adjusted

EBITDA.

(11)

Represents restructuring costs.

(12)

Represents net gains and losses on the disposal of property and equipment.

(13)

State Tax refund for abandoned property

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