Elauwit Connection, Inc.

Previous wording

The following discussion reviews the operating results of Elauwit Connection, Inc. (“Elauwit,” the “Company,” “we,” “our,” or “us”) for the three months ended March 31, 2026 (the “first quarter”), the respective prior year period ended March 31, 2025 (the “prior year period”), and our financial condition as of March 31, 2026, and should be read in conjunction with our financial statements and notes thereto included elsewhere in this report and our other documents filed with the Securities and Exchange Commission (“SEC”). Forward-looking statements in this Quarterly Report on Form 10-Q (this “Form 10-Q”) are qualified by the cautionary statement included under the next subheading, “Forward-Looking Statements.”

Current wording

The following discussion reviews the operating results of Elauwit Connection, Inc. (“Elauwit,” the “Company,” “we,” “our,” or “us”) for the three months ended June 30, 2026 (the “second quarter”), the six months ended June 30, 2026 (the “six months”), the respective prior year periods ended June 30, 2025 (the “prior year periods”), and our financial condition as of June 30, 2026, and should be read in conjunction with our financial statements and notes thereto included elsewhere in this report and our other documents filed with the Securities and Exchange Commission (“SEC”). Forward-looking statements in this Quarterly Report on Form 10-Q (this “Form 10-Q”) are qualified by the cautionary statement included under the next subheading, “Forward-Looking Statements.”

Previous wording

In addition to historical information, this Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which provides a “safe harbor” for forward-looking statements made by us. All statements, other than statements of historical facts, including statements concerning our plans, objectives, goals, beliefs, business strategies, future events, business conditions, results of operations, financial position, business outlook, business trends, and other information, may be forward-looking statements. Words such as “aim,” “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “may,” “plan,” “potential,” “will,” “would” and variations of such words or similar expressions are intended to identify forward-looking statements. The forward-looking statements are not historical facts, and are based upon our current expectations, beliefs, estimates and projections, and various assumptions, many of which, by their nature, are inherently uncertain and beyond our control. Our expectations, beliefs, estimates, and projections are expressed in good faith and we believe there is a reasonable basis for them. However, there can be no assurance that our expectations, beliefs, estimates, and projections will occur or can be achieved. Actual results may vary materially from what is expressed in or indicated by the forward-looking statements.

Current wording

In addition to historical information, this Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which provides a “safe harbor” for forward-looking statements made by us. All statements, other than statements of historical facts, including statements concerning our plans, objectives, goals, beliefs, business strategies, future events, business conditions, results of operations, financial position, business outlook, business trends, and other information, may be forward-looking statements. Words such as “aim,” “anticipate,” “believe,” “can,” “continue,” “could,” “expect,” “may,” “opportunity,” “plan,” “potential,” “will,” “would” and variations of such words or similar expressions are intended to identify forward-looking statements. The forward-looking statements are not historical facts, and are based upon our current expectations, beliefs, estimates and projections, and various assumptions, many of which, by their nature, are inherently uncertain and beyond our control. Our expectations, beliefs, estimates, and projections are expressed in good faith and we believe there is a reasonable basis for them. However, there can be no assurance that our expectations, beliefs, estimates, and projections will occur or can be achieved. Actual results may vary materially from what is expressed in or indicated by the forward-looking statements.

Previous wording

We are a customer-centric service provider of broadband Internet networks for the multifamily and student housing property sectors across the United States. Our managed WiFi networks provide property-wide Internet access for residents, guests, property management staff, and third-party technology vendors at each property we serve. We provide our service offering wholesale to REITs, property ownership groups, and property management companies, engaged in our target real estate sectors, who then offer the service to their residents.

Current wording

We are a customer-centric service provider of broadband Internet networks for the multifamily and student housing community sectors across the United States. Our managed WiFi networks provide community-wide Internet access for residents, guests, property management staff, and third-party technology vendors at each community we serve. We provide our service offering wholesale to REITs, community ownership groups, and community management companies, engaged in our target real estate sectors, who then offer the service to their residents.

Previous wording

Our mission is to be the leading experience provider of Internet access solutions. For our property ownership clients, this means clear communication and timely execution. For the end users of our service, residents and their guests, this means dedication to the objective of providing an excellent resident experience. We differentiate ourselves in the area of resident experience by building reliable networks, responding to service requests quickly, establishing support protocols that lead to industry-leading first touch resolution metrics, and communicating effectively with key stakeholders throughout.

Current wording

Our mission is to be the leading experience provider of Internet access solutions. For our community ownership customers, this means clear communication and timely execution. For the end users of our service, residents and their guests, this means dedication to the objective of providing an excellent resident experience. We differentiate ourselves in the area of resident experience by building reliable networks, responding to service requests quickly, establishing support protocols that lead to industry-leading first touch resolution metrics, and communicating effectively with key stakeholders throughout.

Previous wording

While anyone can claim top tier operational capabilities, we have grown quickly through word-of-mouth, as a trusted partner for real estate development and ownership groups. We have an excellent track record of repeat business from parties we contract with. Internet access has become a utility, but unlike electricity and water, reliability is not something property owners can take for granted. Our performance has created the opportunity to expand within ownership portfolios and is a key aspect of our growth strategy moving forward.

Current wording

While anyone can claim top tier operational capabilities, we have grown quickly through word-of-mouth, as a trusted partner for real estate development and ownership groups. We have an excellent track record of repeat business from parties we contract with. Internet access has become a utility, but unlike electricity and water, reliability is not something community owners can take for granted. Our performance has created the opportunity to expand within ownership portfolios and is a key aspect of our growth strategy moving forward.

Previous wording

Comparison of the Three Months Ended March 31, 2026 and 2025

Current wording

Comparison of the Three and Six Months ended June 30, 2026 and 2025

Previous wording

Revenue for the three months ended March 31, 2026 decreased $1.0 million, or 18.6%, to $4.4 million compared to $5.4 million for the three months ended March 31, 2025. The decrease was primarily driven by lower network design and installation revenue of $3.4 million for the three months ended March 31, 2026, compared to $5.1 million for the three months ended March 31, 2025, reflecting the timing of project starts and the completion in 2025 of several large network construction projects that did not recur at the same level in 2026. Network design and installation revenue is project-based and recognized over time using a cost-to-cost input method, and as a result it is inherently lumpy from quarter to quarter as we continue to build our recurring service revenue base with the continued completion of construction projects converting to recurring service revenues. Recurring service revenue, which is recognized ratably over the contract term as the Company provides ongoing managed network services to property owners and their residents, increased $0.6 million, or 121.7%, to $1.1 million for the three months ended March 31, 2026, compared to $0.5 million for the three months ended March 31, 2025. The increase reflects the ramp in recurring service revenue from networks deployed in 2024 and 2025 that reached activation and began billing under long-term service agreements during the period, which the Company expects to continue to grow as a share of total revenue as additional construction projects complete and convert to ongoing recurring service contracts.

Current wording

Recurring revenue, which is recognized ratably over the contract term as the Company provides ongoing managed network services to community owners and their residents, increased $0.6 million, or 81.8%, to $1.2 million for the three months ended June 30, 2026, compared to $0.7 million for the three months ended June 30, 2025, and increased $1.1 million, or 98.2%, to $2.3 million for the six months ended June 30, 2026, compared to $1.2 million for the six months ended June 30, 2025. The increase reflects the ramp in recurring service revenue from networks deployed in 2024 and 2025 that reached activation and began billing under long-term service agreements during the periods, which the Company expects to continue to grow as a share of total revenue as additional construction projects complete and convert to ongoing recurring service contracts.

Previous wording

Cost of revenue decreased $0.6 million, or 13.9% to $3.6 million for the three months ended March 31, 2026, compared to $4.2 million for the three months ended March 31, 2025. The decrease was primarily driven by reduced direct project costs (including hardware, contracted labor, and project management) corresponding to lower network design and installation revenue in the period. The percentage decrease in cost of revenue was less than the percentage decrease in revenue, reflecting the fixed and semi-fixed components of network operations and customer support costs that support our recurring service revenue base.

Current wording

The decrease was primarily driven by reduced direct project costs, including hardware, contracted labor and project management, corresponding to lower network design and installation revenue in the periods.

Previous wording

Gross profit decreased 34.3% to $0.8 million for the three months ended March 31, 2026, compared to $1.3 million for the three months ended March 31, 2025. Our gross margin for the three months ended March 31, 2026 decreased to 19% compared to 23% for the three months ended March 31, 2025, due to the lower mix of network design and installation revenue, which historically carries a higher contribution margin than the early-period margins on internet network services as recurring service revenue scales. Over time, we expect our gross margin to increase as higher-margin recurring service revenue continues to grow as a share of total revenue.

Current wording

Our gross margin for the three months ended June 30, 2026 was 15.5%, compared to 15.1% for the three months ended June 30, 2025. Our gross margin for the six months ended June 30, 2026 was 17.4%, compared to 19.2% for the six months ended June 30, 2025. The change in gross margin was primarily attributable to network construction activities with an increased rate of network activations in the second quarter whereby we recognize the majority of contribution from a given project. Over time, we expect our gross margin to increase as higher-margin recurring service revenue continues to grow as a share of total revenue.

Previous wording

Operating loss was $2.2 million for the three months ended March 31, 2026, compared to an operating loss of $0.4 million for the three months ended March 31, 2025. The increase in operating loss was driven by the lower gross profit and the higher operating expenses described above.

Current wording

Operating loss was $3.1 million for the three months ended June 30, 2026, compared to an operating loss of $0.7 million for the three months ended June 30, 2025. Operating loss was $5.3 million for the six months ended June 30, 2026, compared to an operating loss of

Previous wording

Interest income was $0.04 million for the first quarter, compared to interest expense of $0.1 million for the prior year period. The shift primarily reflects interest earned on cash proceeds from our IPO and a reduction in interest expense due to the repayment of related party debt following our IPO.

Current wording

Interest expense was $0.03 million for the three months ended June 30, 2026, compared to interest expense of $0.1 million for the prior year period. Interest income was less than $0.01 million for the six months ended June 30, 2026, compared to interest expense of $0.2 million for the prior year period. The shift primarily reflects interest earned on cash proceeds from our IPO and a reduction in interest expense due to the repayment of related party debt outstanding during the prior year period.

Previous wording

Net loss increased $1.7 million to net loss of $2.2 million for first quarter compared to net loss of $0.4 million for the prior year period. The reasons for the increase in net loss are discussed above.

Current wording

Net loss increased $2.3 million and $4.0 million to net loss of $3.1 million and $5.3 million for the three and six months ended June 30, 2026 and 2025, respectively, compared to net loss of $0.9 million and $1.3 million for the prior year periods, respectively. The reasons for the increase in net loss are discussed above.

Previous wording

The following tables present a reconciliation of adjusted EBITDA to net loss (the most comparable GAAP measure) in accordance with GAAP for the first quarter:

Current wording

The following tables present a reconciliation of adjusted EBITDA to net loss (the most comparable GAAP measure) in accordance with GAAP for the three and six months ended June 30, 2026 and 2025:

Previous wording

Management uses recurring service revenue, contracted units, activated units, billed units, and backlog as key performance metrics to assess our financial performance and results of operations. The measures of recurring service revenue, contracted units, activated units, billed units, and backlog may vary across the internet services or real estate industries. Therefore, our recurring service revenue, contracted units, activated units, billed units, and backlog measures are not necessarily comparable to similarity titled measures reported by other companies.

Current wording

Management uses recurring service revenue, contracted units, activated units, billed units, and backlog as key performance metrics to assess our financial performance and results of operations. The measures of recurring service revenue, contracted units, activated units, billed units, and backlog may vary across the internet services or real estate industries. Therefore, our recurring service revenue, contracted units, activated units, billed units, and backlog measures are not necessarily comparable to similarly titled measures reported by other companies.

Previous wording

As of March 31, 2026, the Company had cash of approximately $3.5 million and net working capital of approximately $1.9 million. The Company has incurred recurring net losses from operations and negative cash flows from operating activities since inception, with an accumulated deficit of approximately $16.8 million as of March 31, 2026. During the three months ended March 31, 2026 the Company had used approximately $2.5 million in cash for operating activities.

Current wording

As of June 30, 2026, the Company had cash and cash equivalents of approximately $1.2 million and net working capital deficit of approximately $0.9 million. The Company has incurred recurring net losses from operations and negative cash flows from operating activities since inception, with an accumulated deficit of approximately $19.9 million as of June 30, 2026. During the six months ended June 30, 2026, the Company used approximately $5.2 million in cash for operating activities.

Previous wording

These historical conditions raised substantial doubt about the Company’s ability to continue as a going concern. On November 6, 2025, the Company completed the Offering, raising gross proceeds of approximately $15.0 million. As of March 31, 2026, the Company had no required debt repayments other than scheduled monthly principal and interest payments on its outstanding promissory note with Motherlode (as defined below) and Network Service Agreements (see Notes 6 and 7).

Current wording

These conditions raise initial substantial doubt about the Company’s ability to continue as a going concern. On November 6, 2025, the Company completed the IPO, raising gross proceeds of approximately $15.0 million. As of June 30, 2026, the Company has no required debt repayments other than scheduled monthly principal and/or interest payments on its outstanding promissory notes and Network Service Agreements (see Notes 6 and 7).

Previous wording

On May 14, 2026, the Company’s entered into a new $2.0 million business loan agreement (the “May 2026 Term Loan”) with Endurance Opportunities (as defined below), an existing related-party lender. In connection with the May 2026 Term Loan, the Company issued a commercial promissory note in favor of Endurance Opportunities with a principal amount of $500 thousand (the “May 2026 Note”) and agreed to issue three additional commercial promissory notes in favor of Endurance Opportunities, each with a principal amount of $500 thousand. The May 2026 Note has a maturity date of 36 months and bears interest at 15.5% per annum on the outstanding principal balance. Monthly payments of interest are required under the May 2026 Note with the outstanding principal amount of the May 2026 Note due on the maturity date. Each subsequent commercial promissory note issued in accordance with the May 2026 Term Loan will have the same terms and conditions as the May 2026 Note. The Company intends to use the proceeds for general working capital and continued network deployment activities. See Note 16 — Subsequent Events.

Current wording

On May 14, 2026, the Company entered into a new $2.0 million business loan agreement (the “May 2026 Term Loan”) with Endurance Opportunities (as defined below), an existing related-party lender. In connection with the May 2026 Term Loan, the Company issued a commercial promissory note in favor of Endurance Opportunities with a principal amount of $500 thousand (the “May 2026 Note”) and agreed to issue three additional commercial promissory notes in favor of Endurance Opportunities, each with a principal amount of $500 thousand. The May 2026 Note bears interest at a fixed rate of 15.5% per annum, requires monthly interest payments, and matures 36 months from the closing date. The Company closed on the May 2026 Term Loan during the second quarter of 2026 and used the proceeds for general working capital and continued network deployment activities. See Note 6, “Related Party Debt,” for additional information.

Previous wording

Management expects operating losses and negative cash flows from operations to continue for the foreseeable future as the Company invests in its commercial capabilities; however, management expects such losses and negative cash flows to decrease over time as the Company scales its operations and grows its revenue base. In evaluating the Company’s ability to continue as a going concern for a period of one year from the date these financial statements are issued, management considered the Company’s current liquidity position, including net proceeds from the Offering, the planned $2.0 million inflow from the May 2026 Term Loan, forecasted cash flows reflecting the anticipated improvement in operating results, and the ability, if necessary, to reduce discretionary spending and other operating costs to preserve liquidity. Based on this assessment, management has concluded that the Company’s current liquidity position and expected cash flows are sufficient to fund operations for at least the next twelve months, and that substantial doubt about the Company’s ability to continue as a going concern does not exist as of the date these financial statements are issued.

Current wording

In evaluating the Company’s ability to continue as a going concern for a period of one year from the date these financial statements are issued, management considered the Company’s current liquidity position, the availability of additional borrowings under the May 2026 Term Loan, forecasted cash flows reflecting the anticipated improvement in operating results, and the ability, if necessary, to reduce discretionary spending and other operating costs to preserve liquidity. Based on this assessment, management has concluded that the Company’s current liquidity position, existing available financing and expected cash flows are sufficient to fund operations for at least

Previous wording

Our primary liquidity requirements are for working capital, debt repayment and Network-as-a-Service project deployment. Although income taxes are not currently a significant use of funds, after the benefits of our net operating loss carryforwards are fully recognized, they could become a material use of funds, depending on our future profitability and future tax rates. Our liquidity needs have been met primarily through equity offerings and related party loans.

Current wording

Our primary liquidity requirements are for working capital, debt repayment and Network-as-a-Service (NaaS) project deployment. Although income taxes are not currently a significant use of funds, after the benefits of our net operating loss carryforwards are fully recognized, they could become a material use of funds, depending on our future profitability and future tax rates. Our liquidity needs have been met primarily through equity offerings and related party loans.

Previous wording

As of March 31, 2026, we had approximately $3.5 million in cash and cash equivalents. As of December 31, 2025, we had approximately $6.2 million in cash and cash equivalents. During the three months ended March 31, 2026 and 2025, we used net cash in operating activities of $2.5 million and 1.5 million, respectively. As of March 31, 2026 and December 31, 2025 we had a working capital surplus of $1.9 million and $4.1 million. Key drivers of our working capital position have been, and continue to be, network construction receivables and deferred revenue.

Current wording

As of June 30, 2026, we had approximately $1.2 million in cash and cash equivalents. As of December 31, 2025, we had approximately $6.2 million in cash and cash equivalents. During the six months ended June 30, 2026 and 2025, we used net cash in operating activities of $5.2 million and $1.5 million, respectively. As of June 30, 2026 and December 31, 2025, we had a working capital deficit of $0.9 million and working capital surplus of $4.1 million, respectively. Key drivers of our working capital position have been, and continue to be, network construction receivables and deferred revenue.

Previous wording

As of March 31, 2026 and December 31, 2025, we had total outstanding debt of $1.9 million and $2.0 million, respectively.

Current wording

As of June 30, 2026 and December 31, 2025, we had total outstanding debt of $2.2 million and $2.0 million, respectively.

Previous wording

On April 12, 2024, we issued a promissory note to Motherlode for $1.0 million as part of an agreement to repurchase and retire Series Seed Preferred Shares previously issued to Motherlode. See Note 7, “Notes Payable,” for additional information.

Current wording

On April 12, 2024, we issued a promissory note to Motherlode, LLC (“Motherlode”) for $1.0 million as part of an agreement to repurchase and retire Series Seed Preferred Shares previously issued to Motherlode. See Note 7, “Notes Payable,” for additional information.

Previous wording

commercial promissory note to Endurance Opportunities in exchange for $0.3 million, that has a term 18 months, using certain account receivables as collateral for each of the commercial promissory notes (collectively, the “Endurance Notes”). The purpose of these facilities was to support our working capital position. On April 1, 2024 we entered into a Fixed Rate Loan Agreement with Endurance Opportunities for $1.0 million to refinance previously held long-term debt (the “Fixed Rate Loan Agreement”). On November 7, 2025, we paid off the outstanding principal and interest of the Fixed Rate Loan Agreement and the Endurance Notes, thereby satisfying these obligations in their entirety. See Note 6, “Related Party Debt,” for additional information.

Current wording

We have financing arrangements with Endurance Financial LLC (“Endurance Financial”), the manager of Endurance Opportunities I LLC (“Endurance Opportunities”), and Endurance Opportunities. On March 1, 2025 and March 25, 2025, we issued commercial promissory notes to Endurance Financial in exchange for $1.0 million in total, that have a term of 18 months and 221 days, respectively, and on November 12, 2024, we issued a commercial promissory note to Endurance Opportunities in exchange for $0.3 million, that has a term of 18 months, using certain accounts receivable as collateral for each of the commercial promissory notes (collectively, the “Endurance Notes”). The purpose of these facilities was to support our working capital position. On April 1, 2024, we entered into a Fixed Rate Loan Agreement with Endurance Opportunities for $1.0 million to refinance previously held long-term debt (the “Fixed Rate Loan Agreement”). On November 7, 2025, we paid off the outstanding principal and interest of the Fixed Rate Loan Agreement and the Endurance Notes, thereby satisfying these obligations in their entirety. See Note 6, “Related Party Debt,” for additional information.

Previous wording

During the three months ended March 31, 2026, no new agreements were entered into between us and Endurance Opportunities. In 2025 and 2024 we entered into various participation and agency agreements with Endurance Opportunities pursuant to which Endurance provided us with the financing necessary to support our Network-as-a-Service product offerings under certain network service agreements (the “NSAs”). During the three months ended March 31, 2026 and fiscal 2025, we financed $0 million and $.3 million, respectively, from Endurance Opportunities, and as of March 31, 2026, the NSAs had a balance of $1.2 million. See Note 6, “Related Party Debt,” for additional information.

Current wording

During the six months ended June 30, 2026, we entered into the May 2026 Term Loan with Endurance Opportunities, pursuant to which we issued the May 2026 Note in a principal amount of $500 thousand and agreed to issue three additional commercial promissory notes in the same form as the May 2026 Note in favor of Endurance Opportunities, each with a principal amount of $500 thousand. The May 2026 Note has a maturity date of 36 months and bears interest at 15.5% per annum on the outstanding principal balance. Monthly payments of interest are required under the May 2026 Note, with the outstanding principal amount due on the maturity date. In 2025 and 2024, we entered into various participation and agency agreements with Endurance Opportunities pursuant to which Endurance provided us with the financing necessary to support our Network-as-a-Service (NaaS) product offerings under certain network service agreements (the “NSAs”). During the six months ended June 30, 2026 and fiscal 2025, we financed $0 million and $0.3 million, respectively, from Endurance Opportunities, and as of June 30, 2026, the NSAs had a balance of $1.1 million. See Note 6, “Related Party Debt,” for additional information.

Previous wording

Net cash used in operating activities was $2.5 million for the three months ended March 31, 2026, compared to $1.5 million for the three months ended March 31, 2025. The $1.0 million increase reflects a larger net loss driven primarily by elevated general and administrative expenses associated with operating as a publicly traded company, partially offset by changes in working capital.

Current wording

Net cash used in operating activities was $5.2 million for the six months ended June 30, 2026, compared to $1.5 million for the six months ended June 30, 2025. The $3.7 million increase reflects a larger net loss driven primarily by elevated general and administrative expenses associated with operating as a publicly traded company, increases in accounts receivable and inventories from growing construction activity, and growth in deferred revenue from new construction contracts, partially offset by changes in other working capital items.

Previous wording

There were no cash flows from investing activities for the three months ended March 31, 2026 or 2025.

Current wording

Net cash used in investing activities was $0.1 million for the six months ended June 30, 2026, reflecting purchases of property and equipment. There were no cash flows from investing activities for the six months ended June 30, 2025.

Previous wording

Net cash used in financing activities was $0.1 million for the three months ended March 31, 2026, compared to net cash provided by financing activities of $1.9 million for the three months ended March 31, 2025. The change reflects the absence in 2026 of bridge financing transactions completed in the three months ended March 31, 2025.

Current wording

Net cash provided by financing activities was $0.2 million for the six months ended June 30, 2026, compared to net cash provided by financing activities of $1.7 million for the six months ended June 30, 2025. The change primarily reflects lower financing activity in 2026 compared to the prior-year period, partially offset by proceeds from the May 2026 Term Loan.

Previous wording

reserve percentages of 50%, 75%, and 100% are applied to invoices aged 91 to 120 days, 121 to 180 days, and over 180 days past due, respectively. Invoices aged 90 days or fewer are reserved at a de minimis rate based on historical collection experience. For unbilled receivables and network financing receivables, the Company applies a historical loss rate method. The Company has not experienced any credit losses on unbilled receivables or network financing receivables since inception; accordingly, the historical loss rate applied to those balances is zero and no allowance has been recorded against those balances as of March 31, 2026 or December 31, 2025.

Current wording

Under the current expected credit loss (“CECL”) impairment model, the Company applies different estimation methodologies depending on the nature of the receivable. For trade accounts receivable, the Company applies an aging schedule method, under which reserve percentages of 50%, 75%, and 100% are applied to invoices aged 91 to 120 days, 121 to 180 days, and over 180 days past due, respectively. Invoices aged 90 days or fewer are reserved at a de minimis rate based on historical collection experience. For unbilled receivables and network financing receivables, the Company applies a historical loss rate method. The Company has not experienced any credit losses on unbilled receivables or network financing receivables since inception; accordingly, the historical loss rate applied to those balances is zero and no allowance has been recorded against those balances as of June 30, 2026 or December 31, 2025.

Previous wording

Effective for the year ended December 31, 2025 and continuing for the three months ended March 31, 2026, the Company changed its estimation methodology for trade accounts receivable from a historical loss rate method to an aging schedule method, accounted for prospectively as a change in accounting estimate. The change reflects the growth of the trade accounts receivable portfolio and the availability of more granular invoice-level aging data, which now support a more precise estimate of expected credit losses. The change in methodology resulted in an increase in the allowance for credit losses, and a corresponding charge to bad debt expense, of approximately $429 thousand compared to what would have been recorded under the prior methodology. As of March 31, 2026 and December 31, 2025, the Company’s allowance for credit losses related to trade accounts receivable was approximately $0.4 million and $0.3 million, respectively.

Current wording

Effective for the year ended December 31, 2025 and continuing for the three and six months ended June 30, 2026, the Company changed its estimation methodology for trade accounts receivable from a historical loss rate method to an aging schedule method, accounted for prospectively as a change in accounting estimate. The change reflects the growth of the trade accounts receivable portfolio and the availability of more granular invoice-level aging data, which now support a more precise estimate of expected credit losses. As of June 30, 2026 and December 31, 2025, the Company’s allowance for credit losses related to trade accounts receivable was approximately $0.5 million and $0.3 million, respectively.

Previous wording

Changes in any of these inputs could result in a material change in the allowance for credit losses and the related provision in the period of change. See Note 2 — Summary of Significant Accounting Policies and Note 4 — Accounts Receivable for additional information.

Current wording

Changes in any of these inputs could result in a material change in the allowance for credit losses and the related provision in the periods of change. See Note 2 — Summary of Significant Accounting Policies and Note 4 — Accounts Receivable for additional information.

Previous wording

We generate revenue from the following sources: (1) network design and installation and (2) internet network services. In accordance with Accounting Standards Codification (“ASC”) 606 “Revenue Recognition,” there is significant judgment required in determining when to recognize revenue as performance obligations are satisfied. Recognition of network design and installation revenue occurs in line with incurred costs along set project milestones, with the most meaningful being delivery of provisioned network hardware to a client’s property, installation of the fiber backbone, and installation of endpoint electronics. Recognition of internet network services revenue occurs monthly as services are delivered.

Current wording

We generate revenue from the following sources: (1) network design and installation and (2) internet network services. In accordance with Accounting Standards Codification (“ASC”) 606 “Revenue Recognition,” there is significant judgment required in determining when to recognize revenue as performance obligations are satisfied. Recognition of network design and installation revenue occurs in line with incurred costs along set project milestones, with the most meaningful being delivery of provisioned network hardware to a customer’s community, installation of the fiber backbone, and installation of endpoint electronics. Recognition of internet network services revenue occurs monthly as services are delivered.