Babcock & Wilcox Enterprises, Inc.

Liquidity

Our primary liquidity requirements include debt service, funding of dividends on preferred stock and working capital needs. We fund our liquidity requirements primarily through cash generated from operations, external sources of financing, including our Credit Agreement, senior notes, and equity offerings, and our Preferred Stock, each of which are described in the Notes to Condensed Consolidated Financial Statements included in Part I, Item I of this Quarterly Report in further detail.

The Company has a credit agreement that provides for an up to $150.0 million asset-based credit facility with an outstanding balance of $123.4 million at March 31, 2025 that is currently due in November 2025 and, accordingly, is classified as a current liability. In addition, the Company has senior notes due in February 2026 of which $108.4 million is reflected in current liabilities and $83.5 million in noncurrent liabilities in the Condensed Consolidated Balance Sheets. As a result, the uncertainty regarding our ability to repay the current debt raises substantial doubt about our ability to continue as a going concern.

As of March 31, 2025, 3.3 million shares have been sold pursuant to the Sales Agreement for net proceeds of $5.2 million. Refer to Note 13 to the Condensed Consolidated Financial Statement for additional discussion of the Sales Agreement.

In response to the conditions that raised substantial doubt and to partially address our liquidity needs, during the three months ended March 31, 2025, we took the following actions, among others:

•sold our Vølund business on April 29, 2025 for a total of $20.1 million in proceeds, which is comprised of a base purchase price equal to $15.0 million plus 400,000 Danish krone and a $5.0 million loan (described in Note 20 of the Condensed Consolidated Financial Statements);

•sold 3.3 million and 5.0 million common shares for net proceeds of $5.2 million and $7.9 million as of March 31, 2025 and December 31, 2024, respectively, pursuant to our At-The-Market offering (described in Note 13 to the Condensed Consolidated Financial Statements);

•actively negotiating with holders of the Senior Notes to extend their maturity date. We have entered into privately negotiated exchanges with a limited number of noteholders that will result in $47.8 million aggregate principal amount of the Company's 6.50% Senior Notes due 2026 and $84.0 million aggregate principal amount of the Company's 8.125% Senior Notes due 2026 being exchanged for $100.8 million aggregate principal amount of newly-issued 8.75% Senior Secured Second Lien Notes due 2030 (described in Note 20 of the Condensed Consolidated Financial Statements);

•actively negotiating with our current lender under the Credit Facility to extend the maturity date of the Credit Facility; and

•actively in discussions with certain parties to further divest non-core assets. We cannot provide any assurances that such transaction will close or that proceeds will not be more or less than we anticipate.

There is no assurance that we will successfully obtain the financing necessary to satisfy our current obligations when they come due. In addition, we may take one or more of the following actions to obtain the required funding for future operations:

•Suspension of dividends on our Preferred Stock; and

•Selling additional common shares.

Management believes it is taking all prudent actions to address its liquidity concerns, however, these plans have not been finalized and are subject to market conditions that are not within the Company's control, therefore we have determined that there is substantial doubt about our ability to continue as a going concern for the 12 months following the issuance of these financial statements.

Cash and Cash Flows

At March 31, 2025, our cash and cash equivalents, and restricted cash totaled $118.6 million, and we had total debt of $473.6 million as well as $191.7 million of gross preferred stock outstanding. Our foreign business locations held $16.3 million of our total cash and cash equivalents and restricted cash as of December 31, 2025. In general, our foreign cash balances are not available to fund our U.S. operations unless the funds are repatriated or used to repay intercompany loans made from the U.S. to foreign entities, which could expose us to taxes we have not made a provision for in our results of operations. We have no plans to repatriate these funds to the U.S. In addition, we had $78.5 million of restricted cash as of March 31, 2025 related to collateral for certain letters of credit as part of funding for several ongoing projects.

Cash flows used in operating activities was $8.5 million in the three months ended March 31, 2025, which is primarily attributable to the year-to-date net loss of $22.0 million, partially offset by non-cash expenses arising from impairment of long-lived assets of $8.8 million, depreciation and amortization of long-lived assets of $2.5 million, amortization of deferred financing fees of $1.5 million, and operating lease expenses of $1.7 million. Cash flows used in operating activities also included movements in certain operating assets and liabilities such as accounts receivable trade, net of $(14.3) million, contracts in progress of $11.0 million, and advanced billings on contracts of $(7.5) million which are primarily impacted by timing differences related to progress made on ongoing projects, billings, and collections, and may fluctuate significantly period to period. Operating cash flow increases from accounts payable of $19.6 million and accrued and other current liabilities of $8.9 million is the result of timing of payments to vendors.

Cash flows used in operating activities was $14.9 million in the three months ended March 31, 2024, which was primarily attributed to the year-to-date net loss of $16.8 million. Non-cash expenses including the loss on the debt extinguishment of $5.1 million, depreciation and amortization of long-lived assets of $4.8 million, deferred taxes of $2.5 million and operating lease expenses of $1.8 million were primarily offset by movements in certain operating assets and liabilities such as accounts receivable - trade, net of $16.8 million, contracts in progress of $(21.5) million, advanced billings on contracts of $(6.4) million, and accrued and other current liabilities of $(8.4) million due to the same factors noted for the first quarter of 2025.

Cash flows used in investing activities was $3.9 million and $2.8 million in the three months ended March 31, 2025 and 2024, respectively, primarily due to capital expenditures associated with BrightLoop™projects.

Cash flows used in financing activities of $0.4 million in the three months ended March 31, 2025 were primarily due to the payment of preferred dividends of $3.7 million and net payments on the Axos Credit Agreement of $1.4 million, partially offset by the issuance of common stock of $5.2 million. Cash flows provided by financing activities of $51.3 million in the three months ended March 31, 2024 were primarily due to net borrowings on the Axos Credit Agreement of $61.6 million, partially offset by the payment of the preferred stock dividend of $3.7 million.

Debt and Credit Facilities

As described in Note 12 to our Condensed Consolidated Financial Statements included in Item 1 of this Quarterly Report, we entered into a Credit Agreement in January 2024. B. Riley, a related party, has provided a guaranty of payment with regard to our obligations under the Credit Agreement. This agreement substantially replaces the existing Reimbursement Agreement, Revolving Credit Agreement and Letter of Credit Agreement. We completed the transition of letters of credit outstanding under the Letter of Credit Agreement and Reimbursement Agreement to the Credit Agreement in August 2024. Information related to our Debt and Credit Facilities is described in Note 12 to the Condensed Consolidated Financial Statements and is incorporated herein by reference.