Everforth Inc

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. General

Business Description — On April 24, 2026, the Company changed its name to Everforth, Inc. from ASGN Incorporated. Everforth, Inc. and its subsidiaries ("Everforth" or the "Company") is a technology and digital engineering company that helps organizations adapt, innovate, and thrive in a world of constant change. The Company's six solution areas – AI and data, cloud and infrastructure, application and digital engineering, experience, cybersecurity, and enterprise platforms – accelerate time to value for our commercial and federal clients. Everforth provides these solutions acrosstwo segments (see Note 9. Segment Reporting). The Commercial Segment, which is the largest segment, provides IT solutions to Fortune 1000 and large mid-market clients across five industries: (i) Consumer and Industrial, (ii) Technology, Media, and Telecom ("TMT"), (iii) Financial Services, (iv) Healthcare, and (v) Business Services. The Federal Government Segment provides advanced IT solutions to the following four customer types: (i) Defense and Intelligence, (ii) National Security, (iii) Federal Civilian, and (iv) other clients.

Basis of Presentation —The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and the rules of the Securities and Exchange Commission. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations. The December 31, 2025 balance sheet was derived from audited financial statements. The financial statements include adjustments consisting of normal recurring items, which, in the opinion of management, are necessary for a fair presentation of the financial position of Everforth and its results of operations for the interim dates and periods set forth herein. The results for any of the interim periods are not necessarily indicative of the results to be expected for the full year or any other period. This Quarterly Report on Form 10-Q should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 ("2025 10-K").

2. Balance Sheet Details

The table below presents selected balance sheet account balances (in millions):

In the second quarter of 2025, the Company terminated its deferred compensation plan ("DCP"). As of September 30, 2026, all remaining participant account balances had been distributed.

3. Acquisition

In March 2026, the Company acquired Quinnox Inc. (“Quinnox”), an agile, results-driven digital solutions provider, for $290.0 million in cash. Quinnox is part of the Commercial Segment and its results of operations are included in the consolidated results of the Company from the date of its acquisition. The purchase accounting for this acquisition remains incomplete with respect to the provisional fair value of assets acquired and liabilities assumed, as management continues to gather and evaluate information about circumstances that existed as of the acquisition date. Measurement period adjustments will be recognized prospectively within 12 months from the date of acquisition. The preliminary fair value of the identifiable intangible asset and goodwill related to this acquisition is as follows (in millions):

None of the Quinnox goodwill is tax-deductible.

4. Goodwill and Identifiable Intangible Assets

Goodwill by reportable segment is as follows (in millions):

Acquired identifiable intangible assets consisted of the following (in millions):

Estimated future amortization expense is as follows (in millions):

5. Long-Term Debt

Long-term debt consisted of the following (in millions):

The Company is required to make quarterly minimum principal payments on term loan B totaling $5.0 million annually until maturity. These payments are reflected in other current liabilities on the accompanying condensed consolidated balance sheets. Considering the annual required principal payments, $466.3 million will be due at maturity.

Senior Secured Credit Facility — In July 2026, the Company amended its revolving credit facility (the "facility”) to increase the revolving credit facility (the "revolver") from $500.0 million to $600.0 million and extend the maturity date from February 14, 2028 to July 7, 2031, subject to certain provisions. In connection with the amendment, proceeds from borrowings under the revolver were used to repay and terminate term loan A. Following the amendment, the facility consists of term loan B and the $600.0 million revolver.

At the Company's election, (i) term loan B bears interest at SOFR plus 1.75 percent, or the bank’s base rate plus 0.75 percent, and (ii) borrowings under the revolver bear interest at SOFR plus 1.75 to 2.75 percent, or the bank's base rate plus 0.75 to 1.75 percent. A commitment fee of 0.30 to 0.45 percent is payable on the undrawn portion of the revolver.

The facility is subject to various restrictive covenants, including a maximum ratio of senior secured debt to trailing-twelve-months of lender-defined consolidated EBITDA ("leverage ratio") of 3.75 to 1, which decreases to 3.50 to 1 beginning with the quarter ending June 30, 2027 and to 3.25 to 1 beginning with the quarter ending June 30, 2028. The leverage ratio was 2.12 to 1 at September 30, 2026. The facility is secured by substantially all of the Company's assets and at September 30, 2026, the Company was in compliance with its debt covenants.

Unsecured Senior Notes— In August 2026, the Company repurchased and retired $9.0 million principal amount of its unsecured senior notes due in 2028 in the open market at a discount of $0.2 million, resulting in $541.0 million outstanding at September 30, 2026. The notes bear interest at 4.625 percent payable semiannually in arrears on May 15 and November 15. These notes are unsecured obligations and are subordinate to the senior secured credit facility. These notes also contain certain customary limitations, including the Company's ability to incur additional indebtedness, engage in mergers and acquisitions, transfer or sell assets, and make certain distributions.

6. Commitments and Contingencies

We are involved in various legal proceedings, investigations, claims, indemnification claims, and litigation, including purported collective class and Private Attorneys General Act ("PAGA") actions alleging violations of wage and hour laws, job posting laws, and other actions. However, based on the facts currently available, we do not believe that the disposition of matters that are pending or asserted will have a material effect on our financial position, results of operations, or cash flows.

7. Income Taxes

For interim reporting periods, the Company’s provision for income taxes is calculated using its annualized estimated effective tax rate for the year. This rate is based on its estimated full-year income and the related income tax expense for each jurisdiction in which the Company operates. The effective tax rate can be affected by changes in the geographical mix, permanent differences, and the estimate of full year pre-tax accounting income. This rate is adjusted for the effects of discrete items occurring in the period.

8. Earnings per Share

The following is a reconciliation of the number of shares and share equivalents used to calculate basic and diluted earnings per share (in millions, except per share data):

9. Segment Reporting

Everforth is a technology and digital engineering company that provides IT solutions to clients across the commercial and government sectors through itstwo segments: Commercial Segment and Federal Government Segment (see Note 1. General). The Company's chief operating decision maker is its chief executive officer, and he reviews segment revenues, gross profit and operating income for each segment. He also considers forecast-to-actual variances on a monthly basis for these financial measures when making decisions about allocating resources to the segments and uses these segment financial measures in the annual budget process. Virtually all of the Company's revenues are generated in the United States. Segment information is as follows (in millions):

Costs of services include an immaterial amount of depreciation expense.

Other segment expenses include compensation-related expenses, rent, marketing, and other general and administrative expenses.

Corporate SG&A expenses include compensation-related expenses, stock-based compensation, depreciation, acquisition, integration and strategic planning expenses, and public company expenses.

In the three and nine months ended September 30, 2026, approximately 87 percent of Commercial Segment revenues were generated from time-and-materials ("T&M") contracts, with the remainder generated from firm-fixed-price contracts. Substantially all of its revenues in 2025 were generated from T&M contracts. Commercial segment revenues by industry are as follows (in millions):

The Company updated its revenue disaggregation for the Commercial Segment to reflect the evolution of the Company’s go-to market strategy, which is industry-focused. Prior‑period revenue disaggregation has been updated to conform to the current period presentation.

Federal Government Segment revenues by customer and contract type are as follows (in millions):

10. Fair Value Measurements

Recurring Fair Value Measurements — The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, and accrued payroll approximate their fair value based on their short-term nature.

Nonrecurring Fair Value Measurements — Certain assets, such as goodwill and trademarks, are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances, such as when there is evidence of impairment. There were no fair value adjustments for non-financial assets or liabilities during the nine months ended September 30, 2026.

The carrying amount of long-term debt recorded in the Company’s accompanying condensed consoli dated balance sheet at September 30, 2026 was approximately $1.4 billion (see Note 5. Long-Term Debt) and its fair value was slightly less than the carrying value. The fair value for the term loan B and senior notes was determined using quoted prices in active markets for identical liabilities (Level 1 inputs). The carrying value of the revolving credit facility approximates its fair value.