HMH Holding Inc

Previous wording

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read together with the unaudited consolidated financial statements and accompanying notes for the quarter ended June 30, 2026 included under Item 1. Financial Statements of this Quarterly Report on Form 10-Q and the audited consolidated financial statements and accompanying notes in the Final Prospectus. This discussion contains forward-looking statements that involve risks, assumptions and uncertainties that could cause actual results to differ materially from our expectations. Our actual results could differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those described under “Risk Factors,” in the Final Prospectus.

Current wording

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read together with the unaudited consolidated financial statements and accompanying notes for the quarter ended September 30, 2026 included under Item 1. Financial Statements of this Quarterly Report on Form 10-Q and the audited consolidated financial statements and accompanying notes in the Final Prospectus. This discussion contains forward-looking statements that involve risks, assumptions and uncertainties that could cause actual results to differ materially from our expectations. Our actual results could differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those described under “Risk Factors,” in the Final Prospectus and the Form S-1.

Previous wording

Sales of Projects and Products. This includes (i) comprehensive drilling equipment packages containing a full suite of components needed for a newbuild or reactivated drilling rig and (ii) individual or grouped components of drilling and pressure control equipment that facilitate customers maintaining and upgrading their existing fleet. During the three and six months ended June 30, 2026, we derived 12.1% and 15.6% of our revenue from sales of projects and products, respectively, compared to 29.0% and 28.3% during the three and six months ended June 30, 2025, respectively.

Current wording

Sales of Projects and Products. This includes (i) comprehensive drilling equipment packages containing a full suite of components needed for a newbuild or reactivated drilling rig and (ii) individual or grouped components of drilling and pressure control equipment that facilitate customers maintaining and upgrading their existing fleet. During the three and nine months ended September 30, 2026, we derived 9.8% and 13.7% of our revenue from sales of projects and products, respectively, compared to 24.9% and 27.1% during the three and nine months ended September 30, 2025, respectively.

Previous wording

Aftermarket Services. This includes services on installed equipment and integrated digital solutions. Our aftermarket services facilitate customers maintaining and improving the lifespan, safety and efficiency of their existing drilling rig fleets. During the three and six months ended June 30, 2026, we derived 52.1% and 47.1% of our revenue from aftermarket services, respectively, compared to 45.4% and 43.8% during the three and six months ended June 30, 2025, respectively.

Current wording

Aftermarket Services. This includes services on installed equipment and integrated digital solutions. Our aftermarket services facilitate customers maintaining and improving the lifespan, safety and efficiency of their existing drilling rig fleets. During the three and nine months ended September 30, 2026, we derived 56.8% and 50.3% of our revenue from aftermarket services, respectively, compared to 48.3% and 45.3% during the three and nine months ended September 30, 2025, respectively.

Previous wording

Sales of Spare Parts. This includes replacement parts for installed equipment used in oil and gas drilling operations. During the three and six months ended June 30, 2026, we derived 35.8% and 37.3% of our revenue from sales of spare parts, respectively, compared to 25.6% and 27.9% during the three and six months ended June 30, 2025, respectively.

Current wording

Sales of Spare Parts. This includes replacement parts for installed equipment used in oil and gas drilling operations. During the three and nine months ended September 30, 2026, we derived 33.4% and 36.0% of our revenue from sales of spare parts, respectively, compared to 26.8% and 27.5% during the three and nine months ended September 30, 2025, respectively.

Previous wording

Oil and gas play a critical role in enabling modern society to function and providing increased standards of living to the global population. We believe that oil and gas will continue to play a leading role in the future global energy mix. While the world will take the needed efforts to diversify its energy supply into renewables and more sustainable forms of energy, including nuclear, the International

Current wording

Oil and gas play a critical role in enabling modern society to function and providing increased standards of living to the global population. We believe that oil and gas will continue to play a leading role in the future global energy mix. While the world will take the needed efforts to diversify its energy supply into renewables and more sustainable forms of energy, including nuclear, the International Energy Agency estimates that oil and gas will nonetheless comprise 45% of global energy supply in 2050 and that global energy consumption is expected to increase to 533 exajoules by 2050, a 20% increase from 2023 levels and a 41% increase from 2010 levels.

Previous wording

Total revenue decreased by $32.6 million, or 16.0%, and $59.7 million, or 14.9%, for the three and six months ended June 30, 2026, respectively, compared to the prior-year periods. The declines were primarily due to lower product and service revenues, partially offset by higher spare parts revenue.

Current wording

Total revenue decreased by $46.1 million, or 21.2%, and $105.8 million, or 17.1%, for the three and nine months ended September 30, 2026, respectively, compared to the prior-year periods. The declines were primarily due to lower product and contract service agreements partially offset with higher repairs, field service and digital technology.

Previous wording

Total cost of sales decreased by $42.0 million, or 27.7%, and $67.3 million, or 22.9%, for the three and six months ended June 30, 2026, respectively, compared to the prior-year periods. Cost of sales as a percentage of revenue decreased to 64.1% and 66.1% for the three and six months ended June 30, 2026, respectively, compared to 74.5% and 73.0% for the three and six months ended June 30, 2025, respectively. These decreases in cost of sales and cost of sales as a percentage of revenue were due to lower volume, revenue mix, continued cost optimization efforts and increased utilization.

Current wording

Total cost of sales decreased by $44.5 million, or 28.3%, and $111.8 million, or 24.8%, for the three and nine months ended September 30, 2026, respectively, compared to the prior-year periods. Cost of sales as a percentage of revenue decreased to 66.0% and 66.1% for the three and nine months ended September 30, 2026, respectively, compared to 72.5% and 72.8% for three and nine months ended September 30, 2025, respectively. These decreases in cost of sales and cost of sales as a percentage of revenue were due to lower volume, revenue mix, continued cost optimization efforts and increased utilization.

Previous wording

Cost of services sold decreased by $4.9 million, or 7.7%, and $8.9 million, or 7.4%, for the three and six months ended June 30, 2026, respectively, compared to the prior-year periods. These decreases in cost of services sold were in line with the decrease in service revenue. Cost of services as a percentage of revenue was 66.0% and 69.4% for the three and six months ended June 30, 2026, respectively, compared to 69.0% and 68.7% for the three and six months ended June 30, 2025, respectively. These decreases in cost of sales and cost of sales as a percentage of revenue were due to lower volume, revenue mix, continued cost optimization efforts and increased utilization.

Current wording

Cost of services sold decreased by $8.0 million, or 11.2%, and $16.9 million, or 8.8%, for the three and nine months ended September 30, 2026, respectively, compared to the prior-year periods. These decreases in cost of services sold were in line with the decrease in service revenue. Cost of services as a percentage of revenue was 65.6% and 68.0% for the three and nine months ended September 30, 2026, respectively, compared to 68.4% and 68.6% for the three and nine months ended September 30, 2025, respectively. These decreases in cost of sales and cost of sales as a percentage of revenue were due to lower volume, revenue mix, continued cost optimization efforts, increased utilization and lower variable compensation impacting all three product lines.

Previous wording

Cost of goods sold - products decreased by $36.9 million, or 69.1%, and $58.2 million, or 58.2%, for the three and six months ended June 30, 2026, respectively, compared to the prior-year periods. These decreases in cost of goods sold - products were in line with the decrease in product revenue. Cost of goods sold - products as a percentage of revenue decreased to 80.3% and 78.5% for the three and six months ended June 30, 2026, respectively, compared to 90.6% and 88.0% for the three and six months ended June 30, 2025, respectively. These decreases in cost of goods sold - products and cost of goods sold - products as a percentage of revenue were due to recognition of product and project revenue with higher margins driven by cost optimization efforts and the completion of contracts with unfavorable margins in 2025.

Current wording

Cost of goods sold - products decreased by $32.5 million, or 62.0%, and $90.8 million, or 59.5%, for the three and nine months ended September 30, 2026, respectively, compared to the prior-year periods. These decreases in cost of goods sold - products were in line with the decrease in product revenue. Cost of goods sold - products as a percentage of revenue increased to 118.8% for the three months ended September 30, 2026 and decreased to 88.1% for the nine months ended September 30, 2026, compared to 96.8% and 90.9% for the three and nine months ended September 30, 2025, respectively. These changes in cost of goods sold - products and cost of goods sold - products as a percentage of revenue were due to changes in revenue mix recognized and lower utilization relative to prior year.

Previous wording

Cost of goods sold – spare parts remained relatively flat for the three and six months ended June 30, 2026, compared to the corresponding periods in 2025. Cost of goods sold – spare parts as a percentage of spare parts revenue decreased to 56.0% and 56.7% for the three and six months ended June 30, 2026, respectively, compared to 66.1% and 64.6% for the three and six months ended June 30, 2025, respectively. These decreases in cost of goods sold – spare parts as a percentage of spare parts revenue were mainly due to volume mix.

Current wording

Cost of goods sold – spare parts decreased by $3.9 million, or 11.9%, and $4.1 million or 3.8%, for the three and nine months ended September 30, 2026, compared to the corresponding periods in 2025. Cost of goods sold – spare parts as a percentage of spare parts revenue decreased to 51.2% and 55.0% for the three and nine months ended September 30, 2026, respectively, compared to 57.1% and 62.0% for the three and nine months ended September 30, 2025, respectively. These decreases in cost of goods sold – spare parts as a percentage of spare parts revenue were mainly due to part mix and higher utilization relative to prior year.

Previous wording

Selling, general and administrative expenses increased by $30.9 million, or 105.0%, and $29.8 million, or 45.4%, for the three and six months ended June 30, 2026, respectively, compared to the prior-year periods. These increases were primarily driven by pre-IPO stock-based compensation expense and employer portion of taxes on the associated award vestings of $22 million.

Current wording

Selling, general and administrative expenses increased by $2.6 million, or 8.2%, and $32.4 million, or 33.3%, for the three and nine months ended September 30, 2026, respectively, compared to the prior-year periods. These increases for the nine months ended September 30, 2026 were primarily driven by pre-IPO stock-based compensation expense and employer portion of taxes on the associated award vesting of $22.5 million.

Previous wording

Excluding this IPO-related stock-based compensation expense, SG&A expenses increased by $8.9 million, or 30.3%, for the three months ended June 30, 2026, and by $7.8 million, or 11.9%, for the six months ended June 30, 2026, compared to the prior-year periods. These increases were driven primarily by investments in the Company's commercial and back office organizations, including increased sales headcount, as well as higher insurance and marketing expenses stemming from our transition to and operation as a public company.

Current wording

Excluding this IPO-related stock-based compensation expense, SG&A expenses increased by $9.9 million, or 10.2%, for the nine months ended September 30, 2026, compared to the prior-year period. These increases were driven primarily by investments in the Company's commercial and back office organizations stemming from our transition to and operation as a public company as well as transaction costs associated with the IPO and our recent strategic acquisition initiatives.

Previous wording

Research and development expenses remained relatively flat for the three months ended June 30, 2026, compared to the three months ended June 30, 2025. For the six months ended June 30, 2026, research and development expenses decreased by $0.5 million, or 29.5%. This decrease was attributable mainly to the strategic deployment of development resources and the capitalization of development costs.

Current wording

Research and development expenses remained relatively flat for the three months ended September 30, 2026, compared to the three months ended September 30, 2025. For the nine months ended September 30, 2026, research and development expenses decreased by $0.4 million, or 20.9%. This decrease was attributable mainly to the strategic deployment of development resources and the capitalization of development costs.

Previous wording

Restructuring and Other Expenses (Income), Net: Restructuring and other expenses consist of restructuring charges primarily related to manufacturing footprint optimization initiatives and other additional de minimis incidental operating expenses incurred by the business.

Current wording

Restructuring and Other Expenses: Restructuring and other expenses consist of restructuring charges primarily related to manufacturing footprint optimization initiatives and other additional de minimis incidental operating expenses incurred by the business.

Previous wording

Restructuring expenses for both the three and six months ended June 30, 2026 were $5.0 million, compared to $1.1 million and $4.3 million for the three and six months ended June 30, 2025, respectively, driven by our internal restructuring program and lease exit costs.

Current wording

Restructuring expenses for the three and nine months ended September 30, 2026 were $2.2 million and $7.2 million, respectively, compared to $0.1 million and $4.4 million for the three and nine months ended September 30, 2025, respectively, driven by our internal restructuring program and lease exit costs.

Previous wording

The change in foreign currency gain (loss) decreased by $3.5 million, or 120.0%, and $9.8 million, or 140.6%, for the three and six months ended June 30, 2026, respectively, compared to the prior-year periods. These unfavorable variances were attributable to currency exchange rate movements of the U.S. dollar to other currencies in which we transact.

Current wording

The change in foreign currency gain (loss) decreased by $0.2 million, or 252.7%, and $9.9 million, or 141.8%, for the three and nine months ended September 30, 2026, respectively, compared to the prior-year periods. These unfavorable variances were attributable to currency exchange rate movements of the U.S. dollar to other currencies in which we transact.

Previous wording

Interest expense, net decreased by $5.2 million, or 56.7%, and $7.4 million, or 40.4%, for the three and six months ended June 30, 2026, respectively, compared to the prior-year periods. These decreases were driven by the repayment of the Shareholder Loans in April 2026 upon completion of the IPO, and the refinancing of our 9.875% senior secured bonds due in 2026 with 7.875% senior secured bonds due in 2028 in December 2025.

Current wording

Interest expense, net decreased by $4.6 million, or 54.9%, and $12.0 million, or 44.9%, for the three and nine months ended September 30, 2026, respectively, compared to the prior-year periods. These decreases were driven by the repayment of the Shareholder Loans in April 2026 upon completion of the IPO, and the refinancing of our 9.875% senior secured bonds due in 2026 with 7.875% senior secured bonds due in 2028 in December 2025.

Previous wording

Income tax expense (benefit): Income tax consists primarily of U.S. federal and state income taxes and income taxes in foreign jurisdictions in which we operate. For the three months ended June 30, 2026, we recorded a tax benefit of $4.5 million, resulting in an effective tax rate of 47.3%, compared to a tax provision of $5.2 million and an effective tax rate of 34.6% for the three months ended June 30, 2025. For the six months ended June 30, 2026, the tax provision was $1.3 million, resulting in an effective tax rate of 666.3%, compared to a tax provision of $10.4 million and an effective tax rate of 40.0% for the six months ended June 30, 2025.

Current wording

Income tax expense: Income tax consists primarily of U.S. federal and state income taxes and income taxes in foreign jurisdictions in which we operate. For the three months ended September 30, 2026, we recorded a tax expense of $7.2 million, resulting in an effective tax rate of 41.0%, compared to a tax expense of $4.3 million and an effective tax rate of 21.5% for the three months ended September 30, 2025. For the nine months ended September 30, 2026, the tax expense was $8.5 million, resulting in an effective tax rate of 48.1%, compared to a tax expense of $14.8 million and an effective tax rate of 31.9% for the nine months ended September 30, 2025.

Previous wording

These fluctuating effective rates were heavily driven by valuation allowances on losses in certain foreign jurisdictions where tax benefits cannot currently be realized, along with the ongoing impacts of localized withholding taxes, statutory jurisdictional rate differentials, and pass-through non-controlling interests related to U.S. income taxed at the owner level. For the three and six months ended June 30, 2026, our income tax included the impact of a $22.5 million stock-based compensation expense related to pre-IPO stock-based awards. For the six months ended June 30, 2026, our income tax also included $0.5 million of IPO related transaction costs. Excluding the impact of the stock-based compensation expense and IPO related costs, our adjusted effective tax rate for the three and six months ended June 30, 2026 would have been 25.0% and 39.2%, respectively.

Current wording

These fluctuating effective rates were heavily driven by valuation allowances on losses in certain foreign jurisdictions where tax benefits cannot currently be realized, along with the ongoing impacts of localized withholding taxes, statutory jurisdictional rate differentials, and pass-through non-controlling interests related to U.S. income taxed at the owner level. For the nine months ended September 30, 2026, our income tax included the impact of a $22.5 million stock-based compensation expense related to pre-IPO stock-based awards and certain IPO related transaction costs. Excluding the impact of the stock-based compensation expense and IPO related costs, our adjusted effective tax rate for the nine months ended September 30, 2026 would have been 42.1%.

Previous wording

Net cash provided by operating activities increased by $32.7 million in the first six months of 2026, compared to the corresponding period in 2025, mainly due to a $39.2 million increase from changes in operating assets and liabilities, a $10.3 million increase in non-cash items and a $16.8 million increase in net loss.

Current wording

Net cash provided by operating activities decreased by $10.0 million in the first nine months of 2026, compared to the corresponding period in 2025, mainly due to a $22.3 million decrease in net income, a $2.5 million decrease in non-cash items and a $14.9 million increase from changes in operating assets and liabilities.

Previous wording

The favorable variance in non-cash expenses was driven by the recognition of share-based compensation expenses upon completion of the IPO, which was offset by favorable changes in deferred tax expenses, paid-in-kind interest, restructuring and other expenses, and a provision for inventory write-down.

Current wording

The variance in non-cash expenses was driven by the recognition of share-based compensation expenses upon completion of the IPO, which was offset by unfavorable changes in provision for bad debt expense, paid-in-kind interest, deferred tax expenses, a provision for inventory write-down, and restructuring and other expenses.

Previous wording

The increase in cash resulting from the changes in assets and liabilities was primarily driven by increases in accounts payable and accrued expenses. The increase in accounts payable and accounts payable - related party was primarily due to timing of vendor payments in prior periods as 2025 had significant outflows to satisfy outstanding payable obligations. The increase in accrued expenses is driven by timing of incurred expenses in each of the relative periods.

Current wording

The change in operating assets and liabilities was primarily driven by increases in accounts payable, accrued expenses and contract liabilities, partially offset by decreases in accounts receivable, contract assets and inventories. The increase in accounts payable and accounts payable – related party was primarily due to the timing of vendor payments, as 2025 included significant outflows to satisfy outstanding payables. The increase in accrued expenses was primarily due to the timing of expenses incurred in the respective periods. The increase in contract liabilities was primarily due to the timing of customer billings relative to the satisfaction of performance obligations. The decrease in accounts receivable was primarily due to the timing of customer billings and collections. The decrease in contract assets was primarily due to the timing of revenue recognition relative to our contractual right to bill customers and the decrease in inventories was primarily due to the timing of inventory purchases in anticipation of expected future demand.

Previous wording

Net cash used in investing activities increased by $2.8 million in the first six months of 2026, compared to the corresponding period in 2025. The increase in net cash used in investing activities was principally the result of a $4.8 million increase in development costs, offset by a $2.8 million decrease in purchases of property, plant and equipment and $0.8 million of Deep Blue acquisition working capital remeasurement period adjustments in the first six months of 2026.

Current wording

Net cash used in investing activities was $28.7 million for the nine months ended September 30, 2026, representing an increase of $17.7 million compared to the prior-year period. The increase was principally due to a $14.5 million increase in net cash paid for the DWR business combination in September 2026, a $5.2 million increase in development costs, and $0.8 million of working capital adjustments during the measurement period for the Deep Blue acquisition in the first nine months of 2026. These increases were partially offset by a $2.8 million decrease in purchases of property, plant, and equipment.

Previous wording

Net cash provided by financing activities was $6.6 million in the first six months of 2026 compared to net cash used in financing activities of $2.0 million. The increase in cash provided by financing activities was primarily driven by the receipt of $210.7 million in net proceeds from our IPO in 2026. This increase was partially offset by a $137.1 million repayment of related-party long-term debt, a $39.5 million purchase of B.V. Voting Shares from Baker Hughes and Akastor, a $12.9 million purchase of Holding Inc. and Holding B.V. shares as part of the greenshoe exercise, a $10.4 million of deferred IPO cost paid, and $4.9 million in payments for treasury shares in 2026. In the prior year period, financing cash outflows were primarily driven by the repayment of our outstanding credit facility.

Current wording

Net cash provided by financing activities was $3.3 million in the first nine months of 2026 compared to net cash used in financing activities of $14.3 million. The increase in cash provided by financing activities was primarily driven by the receipt of $210.7 million in net proceeds from our IPO in 2026. This increase was partially offset by a $137.1 million repayment of related-party long-term debt, a $39.5 million purchase of B.V. Voting Shares from Baker Hughes and Akastor, a $12.9 million purchase of HMH Inc. and HMH B.V. shares as part of the greenshoe exercise, a $10.8 million of deferred IPO cost paid, and $7.1 million in payments for treasury shares in 2026. Cash flows used in financing activities for the prior period were primarily driven by $14.3 million in net repayments under our outstanding credit facilities.

Previous wording

We use Adjusted EBITDA and Adjusted EBITDA Margin (each, a non-GAAP measure) as one of the indicators to evaluate and compare the results of our operations from period to period by removing the effect of our capital structure and certain non-recurring items. We define Adjusted EBITDA as net income before interest expense, net, income tax expense, depreciation and amortization, IPO listing related cost and other non-recurring items. Management does not consider these non-recurring items to be indicative of our ongoing operating performance measure, and such items include, but are not limited to, restructuring and other operating expenses and foreign exchange currency (gain) loss. We track Adjusted EBITDA on an absolute dollar basis and as a percentage of revenue, which we refer to as Adjusted EBITDA Margin. We define Adjusted EBITDA Margin as Adjusted EBITDA divided by revenue. We believe that Adjusted EBITDA is a supplemental measurement tool used by analysts and investors to evaluate overall operating performance, ability to pursue and service possible debt opportunities and possible future investment opportunities. In addition, we believe that Adjusted EBITDA Margin is a supplemental measurement tool used by analysts and investors to evaluate profitability of sales. Adjusted EBITDA does not represent funds available for our discretionary use and is not intended to represent or to be used as a substitute for net income, as measured in accordance with generally accepted accounting principles in the United States of America ("GAAP"). The items excluded from Adjusted EBITDA and Adjusted EBITDA Margin, but included in the calculation of reported net income, are significant components of the consolidated statements of income and must be considered in performing a comprehensive assessment of overall financial performance.

Current wording

We use Adjusted EBITDA and Adjusted EBITDA Margin (each, a non-GAAP measure) as one of the indicators to evaluate and compare the results of our operations from period to period by removing the effect of our capital structure and certain non-recurring items. We define Adjusted EBITDA as net income before interest expense, net, income tax expense, depreciation and amortization, share-based compensation, IPO listing related cost and, when applicable, other items. Management does not consider these items to be indicative of our ongoing operating performance measure, and such items include, but are not limited to, restructuring and foreign exchange currency (gain) loss. We track Adjusted EBITDA on an absolute dollar basis and as a percentage of revenue, which we refer to as Adjusted EBITDA Margin. We define Adjusted EBITDA Margin as Adjusted EBITDA divided by revenue. We believe that Adjusted EBITDA is a supplemental measurement tool used by analysts and investors to evaluate overall operating performance, ability to pursue and service possible debt opportunities and possible future investment opportunities. In addition, we believe that Adjusted EBITDA Margin is a supplemental measurement tool used by analysts and investors to evaluate profitability of sales. Adjusted EBITDA does not represent funds available for our discretionary use and is not intended to represent or to be used as a substitute for net income, as measured in accordance with generally accepted accounting principles in the United States of America ("GAAP"). The items excluded from Adjusted EBITDA and Adjusted EBITDA Margin, but included in the calculation of reported net income, are significant components of the consolidated statements of income and must be considered in performing a comprehensive assessment of overall financial performance.

Previous wording

The following table reconciles net cash provided by (used in) operating activities to Free Cash Flow:

Current wording

The following table reconciles net cash provided by operating activities to Free Cash Flow:

Previous wording

As of June 30, 2026, we had $119.7 million in cash and cash equivalents and Revolver capacity of $75 million resulting in approximately $195 million of total liquidity. As of June 30, 2026, we have $1.5 million of borrowings under the Credit Line in China due in the next 12 months, and we have no long-term debt maturity until June 2028.

Current wording

As of September 30, 2026, we had $90.1 million in cash and cash equivalents and Revolver capacity of $75 million resulting in approximately $165.1 million of total liquidity. As of September 30, 2026, we have $0.7 million of borrowings under the Credit Line in China due in the next 12 months, and we have no long-term debt maturity until June 2028.

Previous wording

On or around December 17, 2025, the Company issued $200.0 million aggregate principal amount of its senior secured bonds (ISIN code NO0013700039) (the “Senior Secured Bonds due 2028”), which mature on December 17, 2028. Interest on the bonds accrues at a fixed rate of 7.875% per annum as of June 30, 2026. The Senior Secured Bonds due 2028 are secured by liens on substantially all of the Company’s assets, including the equity of its material subsidiaries, and guarantees, either directly or indirectly, from its material subsidiaries. The security of the Senior Secured Bonds due 2028 is subject to an intercreditor agreement with the facility agent under the Revolver. Subject to compliance with certain conditions, the Company is permitted to issue additional bonds under the agreement governing the Senior Secured Bonds due 2028 in an aggregate principal amount up to $125.0 million, and the Company is also permitted to enter into certain bridge financing facilities. The Senior Secured Bonds due 2028 were listed on the Euronext ABM in the second quarter of 2026.

Current wording

On or around December 17, 2025, the Company issued $200.0 million aggregate principal amount of its senior secured bonds (ISIN code NO0013700039) (the “Senior Secured Bonds due 2028”), which mature on December 17, 2028. Interest on the bonds is fixed and is accrued at a rate of 7.875% per annum. The Senior Secured Bonds due 2028 are secured by liens on substantially all of the Company’s assets, including the equity of its material subsidiaries, and guarantees, either directly or indirectly, from its material subsidiaries. The security of the Senior Secured Bonds due 2028 is subject to an intercreditor agreement with the facility agent under the Revolver. Subject to compliance with certain conditions, the Company is permitted to issue additional bonds under the agreement governing the Senior Secured Bonds due 2028 in an aggregate principal amount up to $125.0 million, and the Company is also permitted to enter into certain bridge financing facilities. The Senior Secured Bonds due 2028 were listed on the Euronext ABM in the second quarter of 2026.

Previous wording

On March 27, 2025, the Company extended its credit line agreement (the “Credit Line in China”) with Bank of China Shanghai Pudong branch (the “Credit Line in China Lender”) pursuant to which the Credit Line in China Lender provided a credit line in an aggregate principal amount of up to Chinese renminbi (RMB) 10.0 million (USD: $1.47 million based on the exchange rate as of June 30, 2026). The extension period was valid through March 26, 2026, with the Company retaining a one-year period from each respective withdrawal date to remit payment. Borrowings under the Credit Line in China bear interest at the compounded reference rate, which was the applicable China Loan Prime Rate minus margin of 0.4% as of June 30, 2026. Interest is paid quarterly in the last month of each quarter. There is no quarterly commitment fee or guarantee requirement based on the Company’s financial status. The borrowing length for each withdrawal is one year. The Credit Line in China was available to use for the Company’s daily operations and could not be used to purchase real estate, re-lend to other companies or make investments.

Current wording

On March 27, 2025, the Company extended its credit line agreement (the “Credit Line in China”) with Bank of China Shanghai Pudong branch (the “Credit Line in China Lender”) pursuant to which the Credit Line in China Lender provided a credit line in an aggregate principal amount of up to Chinese renminbi (RMB) 10.0 million (USD: $1.49 million based on the exchange rate as of September 30, 2026). The extension period was valid through March 26, 2026, with the Company retaining a one-year period from each respective withdrawal date to remit payment. Borrowings under the Credit Line in China bear interest at the compounded reference rate, which was the applicable China Loan Prime Rate minus margin of 0.4% as of September 30, 2026. Interest is paid quarterly in the last month of each quarter. There is no quarterly commitment fee or guarantee requirement based on the Company’s financial status. The borrowing length for each withdrawal is one year. The Credit Line in China was available to use for the Company’s daily operations and could not be used to purchase real estate, re-lend to other companies or make investments.