Compass(COMP) - 2025 Q2 - Quarterly Report

Special Note Regarding Forward-Looking Statements This section provides important cautionary information about forward-looking statements and associated risks PART I. FINANCIAL INFORMATION This part presents Compass, Inc.'s unaudited condensed consolidated financial statements and management's discussion and analysis Item 1. Financial Statements (unaudited) This section presents Compass, Inc.'s unaudited condensed consolidated financial statements for the periods ended June 30, 2025, and December 31, 2024, including balance sheets, statements of operations, stockholders' equity, and cash flows, along with detailed notes on business operations, accounting policies, acquisitions, debt, and other financial disclosures Condensed Consolidated Balance Sheets This section provides a snapshot of the company's financial position, detailing assets, liabilities, and equity at specific dates | Metric | June 30, 2025 (in millions) | December 31, 2024 (in millions) | | :----------------------------------- | :-------------------------- | :-------------------------- | | Total assets | $1,596.1 | $1,178.0 | | Total liabilities | $870.7 | $765.6 | | Total stockholders' equity | $725.4 | $412.4 | - Total assets increased by $418.1 million (35.5%) from December 31, 2024, to June 30, 2025, primarily due to increases in intangible assets and goodwill, reflecting recent acquisitions[19] - Total liabilities increased by $105.1 million (13.7%) over the same period, driven by higher commissions payable and revolving credit facility utilization[19] - Total stockholders' equity significantly increased by $313.0 million (75.9%) from December 31, 2024, to June 30, 2025[19] Condensed Consolidated Statements of Operations This section details the company's financial performance over specific periods, including revenue, expenses, and net income | Metric | Three Months Ended June 30, 2025 (in millions) | Three Months Ended June 30, 2024 (in millions) | Six Months Ended June 30, 2025 (in millions) | Six Months Ended June 30, 2024 (in millions) | | :----------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :------------------------------------------- | :------------------------------------------- | | Revenue | $2,059.6 | $1,700.6 | $3,415.8 | $2,754.7 | | Total operating expenses | $2,020.2 | $1,679.3 | $3,430.1 | $2,865.5 | | Income (loss) from operations | $39.4 | $21.3 | $(14.3) | $(110.8) | | Net income (loss) attributable to Compass, Inc. | $39.4 | $20.7 | $(11.3) | $(112.2) | | Net income (loss) per share, basic | $0.07 | $0.04 | $(0.02) | $(0.23) | - Revenue increased by 21.1% for the three months and 24.0% for the six months ended June 30, 2025, compared to the prior year periods[21] - Net income attributable to Compass, Inc. for the three months ended June 30, 2025, was $39.4 million, up from $20.7 million in the prior year, while the six-month period still showed a net loss of $11.3 million, a significant improvement from a $112.2 million loss in the prior year[21] Condensed Consolidated Statements of Stockholders' Equity This section outlines changes in the company's equity, including capital contributions and accumulated earnings or losses | Metric | June 30, 2025 (in millions) | December 31, 2024 (in millions) | | :----------------------------------- | :-------------------------- | :-------------------------- | | Additional paid-in capital | $3,403.4 | $3,081.6 | | Accumulated deficit | $(2,683.5) | $(2,672.2) | | Total Compass, Inc. stockholders' equity | $719.9 | $409.4 | - Additional paid-in capital increased by $321.8 million for the six months ended June 30, 2025, primarily due to $250.1 million in share consideration for the Christie's International Real Estate acquisition and $89.7 million in stock-based compensation[27] - The accumulated deficit increased slightly by $11.3 million for the six months ended June 30, 2025, reflecting the net loss for the period[27] Condensed Consolidated Statements of Cash Flows This section details the sources and uses of cash from operating, investing, and financing activities over specific periods | Cash Flow Activity | Six Months Ended June 30, 2025 (in millions) | Six Months Ended June 30, 2024 (in millions) | | :----------------------------------- | :------------------------------------------- | :------------------------------------------- | | Net cash provided by operating activities | $95.9 | $53.6 | | Net cash used in investing activities | $(181.9) | $(26.5) | | Net cash provided by (used in) financing activities | $39.5 | $(8.2) | | Net (decrease) increase in cash and cash equivalents | $(46.5) | $18.9 | | Cash and cash equivalents at end of period | $177.3 | $185.8 | - Net cash provided by operating activities increased to $95.9 million for the six months ended June 30, 2025, from $53.6 million in the prior year, despite a net loss, due to non-cash adjustments[29][188][189] - Net cash used in investing activities significantly increased to $181.9 million, primarily due to $172.0 million in payments for acquisitions, net of cash acquired, for the six months ended June 30, 2025[29][190][191] - Net cash provided by financing activities was $39.5 million, a reversal from a net cash outflow of $8.2 million in the prior year, driven by net proceeds from the Revolving Credit Facility and Concierge Facility[29][192][193] Notes to Condensed Consolidated Financial Statements This section provides detailed explanations and additional information supporting the condensed consolidated financial statements 1. Business and Basis of Presentation This note describes the company's operations and the foundational principles used in preparing the financial statements - Compass, Inc. operates an end-to-end platform for residential real estate agents, offering cloud-based software for CRM, marketing, and client service, enhanced by proprietary data, analytics, AI, and machine learning[31] - The company primarily generates revenue from commissions paid by clients at the time of home transactions, with adjacent services like title, escrow, and franchise services comprising a smaller portion[32] 2. Summary of Significant Accounting Policies This note outlines the key accounting principles and estimation methods applied in the preparation of the financial statements - The preparation of financial statements involves significant management judgments and estimates, particularly for fair value of acquired assets, contingent consideration, useful lives of assets, impairment, and income taxes[36][37] - Business combinations are accounted for using the acquisition method, allocating purchase consideration to acquired assets and liabilities at fair value, with any excess recorded as goodwill[38] - The company operates as a single operating and reportable segment, with the CEO evaluating financial information on a consolidated basis[39][40] - Recently adopted accounting pronouncements include ASU 2023-07 (Segment Reporting) and ASU 2023-09 (Income Taxes), with ASU 2024-03 (Disaggregation of Income Statement Expenses) currently being assessed for future impact[43][44][45][46] 3. Acquisitions This note details the company's recent business acquisitions, including purchase consideration, goodwill, and intangible assets - On January 13, 2025, Compass acquired Christie's International Real Estate for $153.0 million in cash and 44.1 million shares of Class A common stock (fair value estimated at $250.1 million), expanding into luxury real estate franchising[47][49][51] - The acquisition resulted in $230.0 million in goodwill and $164.1 million in identified intangible assets (trademarks, acquired technology, agent networks, affiliate network)[51] - Other acquisitions during the six months ended June 30, 2025, included a residential real estate brokerage and a title insurance and escrow settlement business, involving $23.6 million in cash and contingent consideration[57] Pro Forma Information (Six Months Ended June 30) | Metric | Actuals (Jan 13 - Jun 30, 2025) | Pro Forma (Six Months Ended Jun 30, 2025) | Pro Forma (Six Months Ended Jun 30, 2024) | | :---------------- | :------------------------------ | :---------------------------------------- | :---------------------------------------- | | Revenue | $274.2 million | $3,424.0 million | $3,001.9 million | | Net income (loss) | $10.0 million | $(17.0) million | $(117.9) million | 4. Fair Value of Financial Assets and Liabilities This note describes the valuation methodologies and classifications for the company's financial assets and liabilities - Cash and cash equivalents ($177.3 million as of June 30, 2025) are classified as Level 1 financial instruments, valued using quoted prices in active markets[62] - Contingent consideration liabilities ($30.8 million as of June 30, 2025) are classified as Level 3 financial instruments, estimated using Monte-Carlo simulations with unobservable inputs[62][64] 5. Debt This note provides details on the company's debt instruments, including revolving credit facilities, interest rates, and covenants - The Concierge Facility, a $75.0 million revolving credit facility, was extended to July 31, 2027, and is used to finance the Compass Concierge Program, bearing interest at term SOFR plus 2.50% (7.24% as of June 30, 2025)[65][66][67] - The Revolving Credit Facility provides $350.0 million, with $50.0 million outstanding and $33.3 million in letters of credit as of June 30, 2025, bearing interest at SOFR plus 1.50% (5.81% as of June 30, 2025)[70][71][73] - The company was in compliance with all financial covenants for both facilities as of June 30, 2025, including maintaining at least $150.0 million in liquidity and meeting consolidated revenue thresholds[68][75] 6. Commitments and Contingencies This note outlines the company's legal obligations, pending lawsuits, and other potential financial liabilities - Compass settled the Gibson and Umpa antitrust cases nationwide for $57.5 million, with final approval granted in October 2024, resolving claims against the company and its agents[79][86] - Several other antitrust lawsuits (March, Friedman, QJ Team, Peiffer, Grace, Fierro, Whaley, Batton II) are pending, with some stayed pending the appeal of the Gibson/Umpa settlement[80][81][82][83][84][85][87] - The company is contingently liable for $33.3 million under letters of credit and $364.5 million in escrow and trust deposits as of June 30, 2025[89][90] 7. Preferred Stock and Common Stock This note describes the company's capital structure, including the number of shares issued and the voting rights of different stock classes - As of June 30, 2025, Compass had 523,306,435 shares of common stock issued and outstanding, comprising Class A (513,184,002 shares) and Class C (10,122,433 shares)[93] - Class A common stock carries one vote per share, Class B has no voting rights, and Class C common stock carries twenty votes per share, convertible to Class A under certain conditions[94][95] 8. Stock-Based Compensation This note details the expense recognized for equity awards, including RSUs, and the remaining unrecognized compensation - Total stock-based compensation expense was $55.2 million for the three months and $85.6 million for the six months ended June 30, 2025, an increase from $30.9 million and $63.8 million in the prior year periods, respectively[105] - As of June 30, 2025, unrecognized stock-based compensation expense totaled $327.6 million, expected to be recognized over a weighted-average period of 2.3 years[105] - The company issued 40.8 million RSUs during the six months ended June 30, 2025, and reverted to a four-year ratable vesting schedule for new equity commitments starting in 2025[103][104] 9. Income Taxes This note explains the company's income tax provisions, including benefits recognized and the valuation allowance on deferred tax assets - The company recognized an income tax benefit of $3.1 million for the six months ended June 30, 2025, primarily from a partial reduction in the valuation allowance related to the Christie's International Real Estate acquisition[107] - A full valuation allowance is maintained on all domestic net deferred tax assets due to factors including estimated future taxable income and historic profitability[108] 10. Net Income (Loss) Per Share Attributable to Compass, Inc. This note presents the calculation of basic and diluted earnings per share, reflecting the company's profitability on a per-share basis Net Income (Loss) Per Share Attributable to Compass, Inc. | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Basic EPS | $0.07 | $0.04 | $(0.02) | $(0.23) | | Diluted EPS | $0.07 | $0.04 | $(0.02) | $(0.23) | - Basic and diluted EPS improved significantly year-over-year, with a positive $0.07 for the three months ended June 30, 2025, compared to $0.04 in the prior year, and a reduced loss of $(0.02) for the six-month period compared to $(0.23)[21][112] - Weighted-average shares used in diluted EPS calculation for the three months ended June 30, 2025, included 13.1 million incremental shares related to the Christie's International Real Estate acquisition's Share Consideration[112][113] 11. Compass Concierge Receivables and Allowance for Credit Losses This note describes the Concierge Program, its associated receivables, and the allowance for potential credit losses - The Compass Concierge Program offers services (Concierge Classic) and a loan program (Concierge Capital) to home sellers, with repayment due upon home sale, listing termination, or one year[115][116][117] - Concierge Receivables, net of allowance for credit losses (ACL), were $38.3 million as of June 30, 2025, with 96% related to unsold properties[19][117][120] Allowance for Credit Losses (ACL) Activity (in millions) | Metric | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :---------------- | :------------------------------- | :----------------------------- | | Beginning of period | $10.3 | $10.4 | | Allowances | $0.1 | $0.2 | | Net write-offs | $(0.1) | $(0.3) | | End of period | $10.3 | $10.3 | 12. Restructuring Activities This note details the costs and objectives of the company's restructuring efforts, aimed at improving efficiency and profitability - Restructuring costs for the six months ended June 30, 2025, totaled $11.9 million, more than doubling from $5.8 million in the prior year, primarily due to $5.7 million in severance-related personnel costs and $6.2 million in lease termination costs[124] - These activities are part of a broader plan to improve organizational alignment, drive cost efficiencies, and move towards profitability and positive free cash flow[123] - Future lease and lease-related payments for restructuring activities are estimated at $35.6 million, with $6.5 million due in the remainder of 2025[124] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on Compass, Inc.'s financial condition and operational results, highlighting revenue growth driven by agent expansion and acquisitions, alongside detailed analysis of operating expenses, key business metrics, and liquidity. It also addresses the impact of macroeconomic conditions and industry changes OVERVIEW This section provides a high-level summary of the company's business model, market position, and recent strategic developments - Compass is a leading tech-enabled real estate services company, operating the largest brokerage in the U.S. by sales volume across 38 states and Washington D.C., with approximately 37,700 agents[129][137] - The company acquired Christie's International Real Estate in January 2025, expanding into the global luxury real estate franchise sector[129][131] - Revenue is primarily generated from gross sales commissions, with integrated services (title, escrow, mortgage) and the affiliate business representing smaller but growing portions[132] - The Compass platform, launched in February 2025, provides an end-to-end, AI-powered solution for agents and a client-facing dashboard (Compass One) for consumers[134][135] Operational Highlights for the Three Months Ended June 30, 2025 This section presents key operational metrics for the quarter, demonstrating growth in transactions, value, and agent count Operational Highlights (Three Months Ended June 30) | Metric | 2025 | 2024 | Change (YoY) | | :----------------------- | :----- | :----- | :----------- | | Total Transactions | 73,025 | 60,390 | +20.9% | | Gross Transaction Value | $78.3B | $65.0B | +20.3% | | Number of Principal Agents | 20,965 | 16,997 | +23.3% | | U.S. Residential Real Estate Market Share | 6.09% | 5.13% | +0.96 pp | - Growth in Total Transactions, Gross Transaction Value, and Number of Principal Agents was primarily driven by recent acquisitions of residential real estate brokerages[138][139][174] Seasonality and Cyclicality This section discusses how seasonal patterns and broader economic cycles influence the company's real estate business - The residential real estate market is seasonal, with highest transaction volume in spring and summer, leading to lower revenue in the first and fourth quarters[142] - The broader real estate industry is cyclical, influenced by economic conditions, interest rates, and mortgage lending standards, directly impacting the company's revenue growth rate[143] Impact of the Macroeconomic Conditions and Recent Industry Practice Changes on the U.S. Residential Real Estate Market and Our Business This section analyzes the effects of high interest rates, new industry regulations, and cost reduction strategies on the company's operations - High interest rates and Federal Reserve policies have slowed the U.S. residential real estate market, leading to reduced consumer demand, declining affordability, and low inventory[144] - NAR's class action settlement introduced industry-wide practice changes, effective August 2024, including prohibiting buyer broker compensation in MLS listings and requiring written buyer-agent agreements[145] - Significant cost reduction actions since 2022 have enabled consistent positive operating cash flow, mitigating the impact of market slowdowns and industry changes[146] RESULTS OF OPERATIONS This section provides a detailed analysis of the company's financial performance, including revenue and expense trends Comparison of the Three and Six Months Ended June 30, 2025 and 2024 This section compares the company's financial results for the current and prior year periods, highlighting key drivers of change Revenue (in millions) | Period | 2025 | 2024 | $ Change | % Change | | :----------------------- | :------- | :------- | :------- | :------- | | Three Months Ended June 30 | $2,059.6 | $1,700.6 | $359.0 | 21.1% | | Six Months Ended June 30 | $3,415.8 | $2,754.7 | $661.1 | 24.0% | - Revenue growth was primarily driven by an increase in the number of agents on the platform, including those from businesses acquired since April 2024[148] Operating Expenses (in millions) | Expense Category | 3 Months Ended Jun 30, 2025 | 3 Months Ended Jun 30, 2024 | 6 Months Ended Jun 30, 2025 | 6 Months Ended Jun 30, 2024 | | :----------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Commissions and other related expense | $1,685.7 | $1,405.3 | $2,791.8 | $2,267.6 | | Sales and marketing | $96.4 | $94.9 | $188.1 | $188.3 | | Operations and support | $109.3 | $83.1 | $206.0 | $162.1 | | Research and development | $63.4 | $47.4 | $113.3 | $94.4 | | General and administrative | $33.3 | $22.9 | $60.8 | $105.1 | | Restructuring costs | $2.7 | $4.3 | $11.9 | $5.8 | | Depreciation and amortization | $29.4 | $21.4 | $58.2 | $42.2 | - Commissions and other related expense increased in absolute dollars due to higher revenue, but decreased as a percentage of revenue (81.8% vs 82.6% for Q2) due to more favorable agent commission splits from recent acquisitions[149] - General and administrative expense decreased by 42.2% for the six months ended June 30, 2025, primarily due to a $57.5 million litigation charge in the prior year, partially offset by acquisition-related transaction expenses and assumed costs[154][156] - Depreciation and amortization increased by 37.4% (QoQ) and 37.9% (YoY) due to higher amortization of intangible assets from recent acquisitions[158] KEY BUSINESS METRICS AND NON-GAAP FINANCIAL MEASURES This section presents crucial operational and non-GAAP financial metrics used to assess the company's performance and efficiency Key Business Metrics | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total Transactions | 73,025 | 60,390 | 122,146 | 98,839 | | Gross Transaction Value (in billions) | $78.3 | $65.0 | $130.7 | $105.1 | | Number of Principal Agents | 20,965 | 16,997 | 20,965 | 16,997 | | Net income (loss) attributable to Compass, Inc. (in millions) | $39.4 | $20.7 | $(11.3) | $(112.2) | | Net income (loss) attributable to Compass, Inc. margin | 1.9% | 1.2% | (0.3%) | (4.1%) | | Adjusted EBITDA (in millions) | $125.9 | $77.4 | $141.5 | $57.3 | | Adjusted EBITDA margin | 6.1% | 4.6% | 4.1% | 2.1% | - Total Transactions increased by 20.9% (QoQ) and 23.6% (YoY), primarily due to acquired brokerages[169] - Gross Transaction Value increased by 20.3% (QoQ) and 24.3% (YoY), driven by an increased number of agents on the platform[172] - Adjusted EBITDA significantly improved to $125.9 million (QoQ) and $141.5 million (YoY), with margins of 6.1% and 4.1% respectively, driven by higher revenue from agent growth[166][180] LIQUIDITY AND CAPITAL RESOURCES This section evaluates the company's ability to meet its short-term and long-term financial obligations and fund operations - As of June 30, 2025, Compass had $177.3 million in cash and cash equivalents and an accumulated deficit of $2.7 billion[185] - The company generated $95.9 million in cash flow from operations for the six months ended June 30, 2025[185] - Compass has a $350.0 million Revolving Credit Facility, with $50.0 million outstanding and $266.7 million available to be drawn as of June 30, 2025, and was in compliance with all covenants[185] - Off-balance sheet arrangements include $364.5 million in escrow and trust deposits, for which the company is contingently liable[194] CRITICAL ACCOUNTING ESTIMATES AND POLICIES This section highlights accounting policies requiring significant management judgment and estimation, impacting financial reporting - No material changes to critical accounting policies and estimates were disclosed from the 2024 Form 10-K[197] - Business combinations are accounted for using the acquisition method, requiring estimates for fair value allocation of acquired assets and liabilities, with any excess recorded as goodwill[198] RECENT ACCOUNTING PRONOUNCEMENTS This section refers to new accounting standards and their potential impact on the company's financial statements - Refer to Note 2 of the condensed consolidated financial statements for details on recently adopted and newly issued accounting pronouncements[200] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section outlines Compass, Inc.'s exposure to market risks, primarily focusing on interest rate fluctuations and foreign currency exchange rates, and the strategies employed to manage these risks Interest Rate Risk This section assesses the company's exposure to fluctuations in interest rates on its cash holdings and variable-rate debt - The company's cash and cash equivalents ($177.3 million as of June 30, 2025) are primarily in short-term interest-earning instruments, limiting exposure to fair value changes from interest rate fluctuations[202] - Debt facilities (Concierge Facility and Revolving Credit Facility) bear variable interest rates (SOFR-based), but a 100-basis point change in market rates is not expected to materially impact interest expense due to current outstanding balances[203] Foreign Currency Exchange Risk This section evaluates the company's exposure to currency fluctuations given its U.S. dollar functional currency and limited foreign operations - The company's functional and reporting currency is the U.S. dollar, with most revenue denominated in USD, resulting in limited foreign currency risk on sales[204] - Operating expenses are primarily in local currencies (U.S., Europe, UK, India, Canada), but significant foreign currency balances are not maintained, limiting exchange rate fluctuation exposure[204] Item 4. Controls and Procedures This section details the evaluation of Compass, Inc.'s disclosure controls and procedures, confirming their effectiveness as of June 30, 2025, while noting the exclusion of a recently acquired entity from the internal control assessment scope Evaluation of Disclosure Controls and Procedures This section confirms the effectiveness of the company's disclosure controls, with a note on the scope of internal control assessment - The CEO and CFO concluded that disclosure controls and procedures were effective at a reasonable assurance level as of June 30, 2025[207] - The assessment of internal control over financial reporting for the recently acquired At World Properties Holdings, LLC was omitted, representing approximately 4% of consolidated assets and 8% of consolidated revenue[206] Changes in Internal Control over Financial Reporting This section confirms that no material changes occurred in the company's internal control over financial reporting - No material changes in internal control over financial reporting occurred during the quarter ended June 30, 2025[208] Inherent Limitation on the Effectiveness of Internal Control over Financial Reporting and Disclosure Controls and Procedures This section acknowledges the inherent limitations of control systems, which provide reasonable but not absolute assurance - Management acknowledges that control systems provide only reasonable, not absolute, assurance against errors and fraud due to inherent limitations like faulty judgments, simple errors, circumvention, and resource constraints[209] PART II. OTHER INFORMATION This part includes disclosures on legal proceedings, risk factors, equity sales, and other significant corporate information Item 1. Legal Proceedings This section refers to the detailed information on legal proceedings, including antitrust litigation, provided in Note 6 to the condensed consolidated financial statements - Information regarding legal proceedings is incorporated by reference from Note 6 to the condensed consolidated financial statements[210] Item 1A. Risk Factors This section updates the risk factors from the 2024 Form 10-K, specifically adding a new risk related to recent changes in U.S. tariff policies and their potential adverse effects on the business - No material changes to risk factors from the 2024 Form 10-K, except for the addition of a new risk concerning the adverse effects of recent changes in U.S. tariff policies[211] - Changes in U.S. tariff policies, retaliatory tariffs, and trade tensions could disrupt supply chains, increase housing construction costs, and reduce transaction volume, materially affecting the business[212] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Securities This section details unregistered sales of Class A common stock between April 1, 2025, and August 4, 2025, primarily for acquisition-related earnout and holdback payments - Issued 398,939 shares of Class A common stock on June 23, 2025, for earnout and holdback amounts from a prior acquisition[214] - Issued 78,238 shares of Class A common stock on July 30, 2025, for holdback amounts from a prior acquisition[215] - Issued 109,725 shares of Class A common stock on August 1, 2025, for a real estate brokerage acquisition, with potential future issuances up to 245,137 shares for earnout and holdback[216] - These issuances were exempt from registration under Section 4(a)(2) of the Securities Act[217] Item 3. Defaults Upon Senior Securities This section states that there were no defaults upon senior securities during the reported period - No defaults upon senior securities were reported[218] Item 4. Mine Safety Disclosures This section indicates that there are no mine safety disclosures to report - No mine safety disclosures were reported[219] Item 5. Other Information This section covers an amendment to the Concierge Facility, the appointment and compensation arrangements for the new Chief Financial Officer, and a new Rule 10b5-1 trading arrangement for the General Counsel - The Concierge Facility was amended and extended on August 1, 2025, through July 31, 2027, with updated interest rates[220] - Scott Wahlers was appointed Chief Financial Officer, effective August 22, 2025, with an annual base salary of $500,000, a target cash bonus of $500,000, and a one-time RSU award valued at $2.5 million[221][222] - Brad Serwin, General Counsel, adopted a new Rule 10b5-1 trading arrangement to sell up to approximately 949,532 shares of common stock, ending August 11, 2027[224] Item 6. Exhibits This section lists all exhibits filed with the Form 10-Q, including amendments to credit agreements, executive offer letters, certifications, and XBRL documents - Includes Amendment No. 2 to the Second Amended and Restated Revolving Credit and Security Agreement, and the Offer Letter for Scott Wahlers[226] - Certifications of Principal Executive Officer and Principal Financial Officer are furnished as Exhibits 32.1 and 32.2[226][227]