# Target Hospitality Corp.: Form 10-Q for the period ended Jun 30, 2025

- Company: [Target Hospitality Corp.](/companies/th.md) (CIK 1712189)
- Form: 10-Q
- Filed: 2025-08-07
- Accepted by EDGAR: Aug 7, 2025, 14:30 ET
- Period: 2025-06-30
- Accession: 0001558370-25-010732
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1712189/000155837025010732/th-20250630x10q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1712189/000155837025010732/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-06-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-04-01 to 2025-06-30 | $54.9m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 6 months, 2025-01-01 to 2025-06-30 | $109.8m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Gross profit | 3 months, 2025-04-01 to 2025-06-30 | −$328.0k | us-gaap:GrossProfit |
| Gross profit | 6 months, 2025-01-01 to 2025-06-30 | $17.6m | us-gaap:GrossProfit |
| Selling, general and administrative | 3 months, 2025-04-01 to 2025-06-30 | $12.7m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Selling, general and administrative | 6 months, 2025-01-01 to 2025-06-30 | $27.5m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2025-04-01 to 2025-06-30 | −$16.9m | us-gaap:OperatingIncomeLoss |
| Operating income | 6 months, 2025-01-01 to 2025-06-30 | −$18.0m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2025-04-01 to 2025-06-30 | −$2.9m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 6 months, 2025-01-01 to 2025-06-30 | −$4.3m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-04-01 to 2025-06-30 | −$14.9m | us-gaap:NetIncomeLoss |
| Net income | 6 months, 2025-01-01 to 2025-06-30 | −$21.4m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-04-01 to 2025-06-30 | −$0.15 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months, 2025-01-01 to 2025-06-30 | −$0.22 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-04-01 to 2025-06-30 | −$0.15 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2025-01-01 to 2025-06-30 | −$0.22 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-04-01 to 2025-06-30 | 99,396,381 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 6 months, 2025-01-01 to 2025-06-30 | 99,254,946 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 6 months, 2025-01-01 to 2025-06-30 | $15.0m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Cash and equivalents | at 2025-06-30 | $19.2m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-06-30 | $83.0m | us-gaap:AssetsCurrent |
| Total assets | at 2025-06-30 | $533.7m | us-gaap:Assets |
| Current liabilities | at 2025-06-30 | $56.6m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-06-30 | $132.5m | us-gaap:Liabilities |
| Shareholders' equity | at 2025-06-30 | $401.3m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 80,900 characters.

### TARGET HOSPITALITY CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion summarizes the significant factors affecting the consolidated operating results, financial condition, liquidity and capital resources of Target Hospitality Corp. and is intended to help the reader understand Target Hospitality Corp., our operations and our present business environment. This discussion should be read in conjunction with the Company’s unaudited consolidated financial statements and notes to those statements included elsewhere in this Quarterly Report on Form 10-Q.

### Executive Summary

Target Hospitality Corp. is one of North America’s largest providers of vertically integrated specialty rental and value-added hospitality services including: catering and food services, maintenance, housekeeping, grounds-keeping, security, health and recreation facilities, community design and construction, overall workforce community management, concierge services and laundry service. As of June 30, 2025, our network included 27 communities, to better serve our customers across the US and Canada. We also operate 2 communities not owned or leased by the Company.

#### Economic Update

In February 2025, the Company entered into a multi-year construction and services agreement (“Workforce Housing Contract”) to provide construction of workforce housing, comprehensive facility services, and premium hospitality solutions to Lithium Nevada in support of Lithium Nevada’s development of Thacker Pass (“Thacker Pass Project” or the “Project”) and a North American critical minerals supply chain. The all-inclusive workforce housing community, located in Winnemucca, Nevada (“Workforce Hub”) is near Thacker Pass, the world’s largest known measured lithium resource. The Thacker Pass Project is expected to play a major role in the domestic production of lithium batteries. Lithium Nevada has commenced site preparation, and the Company is actively engaged in the construction of the Workforce Hub, which will be capable of supporting a population of approximately 2,000 individuals. The Workforce Housing Contract has an initial term through 2027 with first occupancy anticipated by late-2025 and completion of the Workforce Hub by the end of 2025. The Company will construct and provide full turnkey support for the Workforce Hub, including premium culinary offerings, facilities management, and comprehensive support services. The Workforce Housing Contract, which consists of construction and services revenue, is expected to generate approximately $153.5 million of revenue over its initial term, with approximately $89.5 million of committed minimum revenue. The Company anticipates that revenue realized in 2025 on the Workforce Housing Contract will be largely comprised of construction fee income recognized using the percentage of completion method with progress towards completion measured using the cost-to-cost method as the basis to recognize revenue. This contract activity is reported within the newly formed WHS segment.

In February 2025, the Company received notice that the U.S. government terminated the PCC Contract with the Company’s NP Partner, effective immediately on February 21, 2025, and the NP Partner provided notice to the Company of their intention to terminate the PCC Contract as of the PCC Termination Effective Date. The Company provided facility and hospitality solutions to the NP Partner under the PCC Contract utilizing the Company’s owned modular assets and real property, capable of supporting up to 6,000 individuals. The PCC Contract included a minimum annual revenue contribution of approximately $168 million, all of which was attributable to the Government reportable segment. The PCC Contract generated total revenue of approximately $24.1 million and $98.0 million for the six months ended June 30, 2025 and 2024, respectively. The Company retains ownership of the related assets that were associated with the PCC Contract, enabling the Company to continue utilizing these modular solutions and real property to support customer demand across its operating segments and other potential growth opportunities. The Company is actively engaged in re-marketing these assets.

During the year ended December 31, 2024, the STFRC Contract in the Company’s Government segment was terminated effective August 9, 2024. The STFRC Contract was based on a fixed minimum lease revenue amount and for the three and six months ended June 30, 2024, contributed approximately $15.5 million and $29.5 million, respectively, in total consolidated revenue. The assets associated with the STFRC Contract were reactivated under the DIPC Contract effective

March 5, 2025, which is a lease and services agreement with an anticipated five-year term. The DIPC retains a similar facility size and operational scope as the prior operations under the STFRC Contract. The DIPC will be capable of supporting up to 2,400 individuals and provide an open and safe environment to appropriately care for the community population. The consistency of the community layout will require no capital investment, allowing for seamless community reactivation. The Company will provide facility and hospitality solutions under the DIPC Contract, which has a similar economic structure to the previous STFRC Contract, including fixed minimum revenue regardless of occupancy that amounts to a cumulative fixed minimum revenue amount of approximately $246 million over the anticipated five-year term. As such, the DIPC Contract is expected to provide over $246 million of revenue over its anticipated five-year term, to March 2030, and is subject to a ramp up period based on utilization during the first six months of the contract term resulting in lower fixed minimum revenue amounts during the ramp up period. The ramp up period may be accelerated at the request of the government, and if accelerated, would result in higher fixed minimum revenue amounts during the ramp up period up to the maximum fixed minimum revenue amount. The maximum fixed minimum revenue amount is based on utilization of 2,400 beds. The DIPC Contract is supported by an amended IGSA between the city of Dilley, Texas and ICE. As is customary for U.S. government contracts and subcontracts, the IGSA and the DIPC Contract are subject to annual U.S. government appropriations and can be canceled for convenience with a 60-day prior notice.

On March 10, 2025, the Company issued a notice of redemption to redeem all $181.4 million in aggregate principal amount of its 2025 Senior Secured Notes discussed in Note 7 of the notes to our unaudited consolidated financial statements included elsewhere within this Form 10-Q on March 25, 2025. The 2025 Senior Secured Notes redeemed pursuant to the Redemption were redeemed for a redemption price equal to 101.000% of the principal amount of the 2025 Senior Secured Notes redeemed plus accrued and unpaid interest to but not including the Redemption Date. As of March 25, 2025, the 2025 Senior Secured Notes were paid in full and are no longer outstanding, which is expected to generate an annual interest expense savings of approximately $19.5 million.

The Company generated cash flows from operations for the six months ended June 30, 2025 of approximately $15.0 million compared to approximately $89.7 million for the six months ended June 30, 2024, representing a decrease in cash flows from operations of approximately $(74.7) million or (83)% led by a decrease in cash collections, and partially by a $4.5 million increase in cash paid for interest driven by early payoff of the 2025 Senior Secured Notes on March 25, 2025, and decrease in interest income, partially offset by a $14.4 million decrease in cash paid for income taxes, and a decrease in operating expenses and payroll.

#### For the three months ended June 30, 2025, other key drivers of financial performance included:

- Decreased revenue of $39.1 million, or 39% compared to the same period in 2024, driven by lower revenue generated from the Government segment led by the termination of the PCC Contract (terminated as of February 21, 2025) as well as the termination of the STFRC Contract on August 9, 2024 (the assets associated with the STFRC Contract were reactivated on March 5, 2025 under the DIPC Contract). Additionally, lower revenue generated by HFS-South partially contributed to this decrease led by lower ADR. These decreases were partially offset with increased revenue from the WHS segment led by the new Workforce Housing Contract originated in February 2025, as well as reactivation of the assets associated with the STFRC Contract under the DIPC Contract.
- Generated a net loss of approximately $(14.9) million for the three months ended June 30, 2025 as compared to net income of approximately $18.4 million for the three months ended June 30, 2024, which is primarily attributable to a decrease in revenue, partially attributable to an increase in service costs in the WHS segment led by construction services activity under the Workforce Housing Contract, partially offset by a decrease in specialty rental costs driven primarily by lower costs in the Government segment as a result of reduced occupancy led by the contract terminations previously discussed, a decrease in depreciation of specialty rental assets, a decrease in selling, general and administrative expenses led by a decrease in transaction fees expense, a decrease in interest expense, net led by a decrease in interest expense from the redemption of the 2025 Senior Secured Notes, and a decrease in income tax expense led by a decrease in income before income tax.
- Generated consolidated Adjusted EBITDA of $3.5 million representing a decrease of $48.7 million, or 93% as compared to the same period in 2024, driven primarily by the decrease in revenue and a 24% increase in operating expenses comprised of an increase in services costs led by construction services activity under the Workforce Housing Contract, partially offset by a decrease in specialty rental costs as noted above.

Adjusted EBITDA is a non-GAAP measure. The GAAP measure most comparable to Adjusted EBITDA is Net Income (Loss). Please see “Non-GAAP Financial Measures” for a definition and reconciliation to the most comparable GAAP measure.

Our Government segment, including several communities in West, Texas supporting critical U.S. government efforts, deliver essential services and accommodations near the southern U.S. border where there is insufficient housing and infrastructure solutions to appropriately address immigration and deportation.

Our proximity to customer activities influences occupancy and demand. We have built, own and operate the largest specialty rental and hospitality services network available to customers operating in the HFS – South region. Our broad network often results in us having communities that are closest to our customers’ job sites, which reduces commute times and costs, and improves the overall safety of our customers’ workforce. Our communities provide customers with cost efficiencies, as they are able to jointly use our communities and related infrastructure (i.e., power, water, sewer and IT) services alongside other customers operating in the same vicinity. Demand for our services is dependent upon activity levels, particularly our customers’ capital spending on natural resource development activities.

### Factors Affecting Results of Operations

We expect our business to continue to be affected by the key factors discussed below, as well as factors discussed in the section titled “*Risk Factors”* included in our 2024 Form 10-K. Our expectations are based on assumptions made by us and information currently available to us. To the extent our underlying assumptions about, or interpretations of, available information prove to be incorrect, our actual results may vary materially from our expected results.

#### Supply and Demand for Natural Resources

As a provider of vertically integrated specialty rental and hospitality services, we are not directly impacted by commodity price fluctuations. However, these price fluctuations indirectly influence our activities and results of operations because the natural resource development workforce is directly affected by price fluctuations and the industry’s expansion or contraction as a result of these fluctuations. Our occupancy volume depends on the size of the workforce within the natural resources industry and the demand for labor. Commodity prices are volatile and influenced by numerous factors beyond our control, including the domestic and global supply of and demand for natural resources, the commodities trading markets, as well as other supply and demand factors that may influence commodity prices.

#### Availability and Cost of Capital

Capital markets conditions could affect our ability to access the debt and equity capital markets to the extent necessary to fund our future growth. Interest rates on future credit facilities and debt offerings could be higher than current levels, causing our financing costs to increase accordingly, and could limit our ability to raise funds, or increase the price of raising funds, in the capital markets and may limit our ability to expand.

#### Regulatory Compliance

We are subject to extensive federal, state, local, and foreign environmental, health and safety laws and regulations concerning matters such as air emissions, wastewater discharges, solid, and hazardous waste handling and disposal and the investigation and remediation of contamination. In addition, we may be subject, indirectly, to various statutes and regulations applicable to doing business with the U.S. government as a result of our contracts with U.S. government contractor clients. The risks of substantial costs, liabilities, and limitations on our operations related to compliance with these laws and regulations are an inherent part of our business, and future conditions may develop, arise, or be discovered that create substantial compliance or environmental remediation liabilities and costs.

#### Public Policy

We have derived, and in the future may derive, a significant portion of our revenues from our subcontracts with U.S. government contractors. The U.S. government and, by extension, our U.S. government contractor customers, may from time to time adopt, implement or modify certain policies or directives that may adversely affect our business. Changes in government policy, presidential administration or other changes in the political landscape relating to immigration policies may similarly result in a decline in our revenues in the Government segment.

We are continuing to pursue an expanding pipeline of government services growth opportunities, and we believe there is significant opportunity to continue to assist the federal government. However, available government funding and economic incentives are subject to change for a variety of reasons that are beyond our control, including budget and policy initiatives and priorities of current and future administrations at the federal and state level. We cannot predict what actions the new Trump administration may take with respect to government contracts that were previously executed.

#### Natural Disasters or Other Significant Disruption

An operational disruption in any of our facilities could negatively impact our financial results. The occurrence of a natural disaster, such as earthquake, tornado, severe weather including hail storms, flood, fire, or other unanticipated problems such as public health threats or outbreaks, labor difficulties, equipment failure, capacity expansion difficulties or unscheduled maintenance could cause operational disruptions of varied duration. These types of disruptions could materially adversely affect our financial condition and results of operations to varying degrees dependent upon the facility, the duration of the disruption, our ability to shift business to another facility or find alternative solutions.

### Overview of Our Revenue and Operations

We derive the majority of our revenue from specialty rental accommodations and vertically integrated hospitality services. Approximately 69% of our revenue was earned from specialty rental with vertically integrated hospitality services, specifically lodging and related ancillary services, whereas the remaining 31% of revenues were earned through leasing of lodging facilities (16)% and construction fee income (15)% for the six months ended June 30, 2025. Revenue is recognized in the period in which lodging and services are provided pursuant to the terms of contractual relationships with our customers. We enter into arrangements with multiple deliverables for which arrangement consideration is allocated between lodging and services based on the relative estimated standalone selling price of each deliverable. The estimated price of lodging and services deliverables is based on the prices of lodging and services when sold separately or based upon the best estimate of selling price.

In February 2025, the Company entered into a multi-year construction and services agreement to provide construction of workforce housing, comprehensive facility services, and premium hospitality solutions to Lithium Nevada in support of Lithium Nevada’s development of Thacker Pass (“Thacker Pass Project”) and a North American critical minerals supply chain. The all-inclusive Workforce Hub is near Thacker Pass, the world’s largest known measured lithium resource. The Thacker Pass Project is expected to play a major role in the domestic production of lithium batteries. Lithium Nevada has commenced site preparation and the Company is actively engaged in the construction of the Workforce Hub, which will be capable of supporting a population of approximately 2,000 individuals. The Workforce Housing Contract has an initial term through 2027 with first occupancy anticipated by late-2025 and completion of the Workforce Hub by the end of 2025. The Company will construct and provide full turnkey support for the Workforce Hub, including premium culinary offerings, facilities management, and comprehensive support services. During the construction phase of the contract, the Company will recognize revenue as costs are incurred in connection with the Thacker Pass Project under the percentage of completion method of accounting as more fully discussed in Note 1 of the notes to our unaudited consolidated financial statements included elsewhere within this Form 10-Q.

### Key Indicators of Financial Performance

Our management uses a variety of financial and operating metrics to analyze our performance. We view these metrics as significant factors in assessing our operating results and profitability and tend to review these measurements frequently for consistency and trend analysis. We primarily review the following profit and loss information when assessing our performance:

#### Revenue

We analyze our revenues by comparing actual revenues to our internal budgets and projections for a given period and to prior periods to assess our performance. We believe that revenues are a meaningful indicator of the demand and pricing for our services. Key drivers to change in revenues may include average utilization of existing beds, levels of development activity in the HFS – South segment, the consumer price index impacting government contracts, and government spending on housing programs.

#### Adjusted Gross Profit

We analyze our adjusted gross profit, which is a Non-GAAP measure, which we define as revenues less cost of sales, excluding impairment and depreciation of specialty rental assets to measure our financial performance. Please see “Non-GAAP Financial Measures” for a definition and reconciliation to the most comparable GAAP measure. We believe adjusted gross profit is a meaningful metric because it provides insight into the financial performance of our revenue streams without consideration of company overhead. Additionally, using adjusted gross profit gives us insight on factors impacting cost of sales, such as efficiencies of our direct labor and material costs. When analyzing adjusted gross profit, we compare actual adjusted gross profit to our budgets and internal projections and to prior period results for a given period in order to assess our performance.

We also use Non-GAAP measures such as EBITDA, Adjusted EBITDA, and Discretionary cash flows to evaluate the operating performance of our business. For a more in-depth discussion of the Non-GAAP measures, please refer to the "Non-GAAP Financial Measures" section.

### Segments

We have identified three reportable business segments: HFS – South, Government and WHS:

#### HFS – South

The HFS – South segment reflects our facilities and operations in the HFS – South region from customers in the natural resources development industry and includes our 16 communities located across Texas and New Mexico.

#### Government

The Government segment includes facilities and operations of the DIPC provided under the previous STFRC Contract, which was terminated effective August 9, 2024, but was reactivated under the DIPC Contract effective March 5, 2025.

Additionally, this segment included the facilities and operations provided under a lease and services agreement known as the PCC Contract with our NP Partner, backed by a U.S. government contract, to provide a suite of comprehensive service offerings in support of their aid efforts. As previously discussed, the PCC Contract was terminated effective February 21, 2025. The related assets associated with the PCC Contract continue to be included in this segment.

#### WHS

The WHS segment includes one community in Winnemucca, Nevada to establish a new regional workforce hub network capacity for lithium and related critical mineral development as well as the Workforce Housing Contract for construction of workforce housing and delivery of comprehensive hospitality and facility services.

#### All Other

Our other facilities and operations which do not meet the criteria to be a separate reportable segment are consolidated and reported as “All Other” which represents the facilities and operations of one community in Canada, three communities in North Dakota, and the catering and other services provided to communities and other workforce accommodation facilities for the natural resource development industries not owned by us.

### Key Factors Impacting the Comparability of Results

The historical results of operations for the periods presented may not be comparable, either to each other or to our future results of operations, for the reasons described below:

#### Government Segment

As discussed in the *Economic Update* section, the PCC Contract with the NP Partner was terminated effective February 21, 2025. The PCC Contract generated total revenue of approximately $24.1 million and $98.0 million for the six months ended June 30, 2025 and 2024, respectively. The PCC Contract included a minimum annual revenue contribution of approximately $168 million, all of which was attributable to the Government reportable segment.

As discussed in the *Economic Update* section, the STFRC Contract was terminated effective August 9, 2024. The STFRC Contract was based on a fixed minimum lease revenue amount and for the three and six months ended June 30, 2024, contributed approximately $15.5 million and $29.5 million, respectively, in total consolidated revenue. The assets associated with the STFRC Contract were reactivated under the DIPC Contract effective March 5, 2025. The DIPC Contract is expected to provide over $246 million of revenue over its anticipated five-year term, to March 2030, and is subject to a ramp up period based on utilization during the first six months of the contract term resulting in lower fixed minimum revenue amounts during the ramp up period. The DIPC Contract generated total revenue of approximately $9.1 million for the six months ended June 30, 2025 .

#### WHS Segment

As discussed in the Economic Update section, the Company originated the Workforce Housing Contract in February 2025. The Workforce Housing Contract, which consists of construction and services revenue, is expected to generate approximately $153.5 million of revenue over its initial term, with approximately $89.5 million of committed minimum revenue. The Company anticipates that revenue realized in 2025 on the Workforce Housing Contract will be largely comprised of construction fee income recognized using the percentage of completion method with progress towards completion measured using the cost-to-cost method as the basis to recognize revenue. The Workforce Housing Contract generated approximately $19.2 million of revenue for the six months ended June 30, 2025, all of which is reported as construction fee income associated with construction services provided through June 30, 2025.

### Results of Operations

The period-to-period comparisons of our results of operations have been prepared using the historical periods included in our unaudited consolidated financial statements. The following discussion should be read in conjunction with the unaudited consolidated financial statements and related notes included elsewhere in this document.

### Consolidated Results of Operations for the three months ended June 30, 2025 and 2024 ($ in thousands):

| ​ ​ ​ ​ Revenue: | ​ ​ ​ ​ | ​ ​ For the Three Months Ended June 30, 2025 ​ ​ | ​ ​ | ​ ​ 2024 ​ ​ | ​ ​ ​ ​ | ​ ​ Amount of Increase (Decrease) ​ ​ | ​ ​ ​ ​ | ​ Percentage Change Increase (Decrease) ​ |
| --- | --- | ---: | --- | ---: | --- | ---: | --- | ---: |
| Services income | ​ | $40,467 | ​ | $67,491 | ​ | $(27,024) |  | (40)% |
| Specialty rental income | ​ | 6,716 | ​ | 33,230 | ​ | (26,514) |  | (80)% |
| Construction fee income | ​ | 14,423 | ​ | ​ — | ​ | ​ 14,423 | ​ | 100% |
| Total revenue | ​ | 61,606 | ​ | 100,721 | ​ | (39,115) |  | (39)% |
| Costs: | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ |
| Services | ​ | 45,561 | ​ | 33,557 | ​ | 12,004 |  | 36% |
| Specialty rental | ​ | 2,789 | ​ | 5,489 | ​ | (2,700) |  | (49)% |
| Depreciation of specialty rental assets | ​ | 13,584 | ​ | 14,805 | ​ | (1,221) |  | (8)% |
| Gross Profit | ​ | (328) | ​ | 46,870 | ​ | (47,198) |  | (101)% |
| Selling, general and administrative | ​ | 12,664 | ​ | 13,457 | ​ | (793) |  | (6)% |
| Other depreciation and amortization | ​ | 4,082 | ​ | 3,908 | ​ | 174 |  | 4% |
| Other expense (income), net | ​ | (156) | ​ | (46) | ​ | (110) |  | 239% |
| Operating income (loss) | ​ | (16,918) | ​ | 29,551 | ​ | (46,469) |  | (157)% |
| Interest expense, net | ​ | 937 | ​ | 4,273 | ​ | (3,336) |  | (78)% |
| Income (loss) before income tax | ​ | (17,855) | ​ | 25,278 | ​ | (43,133) |  | (171)% |
| Income tax expense (benefit) | ​ | (2,937) | ​ | 6,892 | ​ | (9,829) |  | (143)% |
| Net income (loss) | ​ | ​ (14,918) | ​ | ​ 18,386 | ​ | ​ (33,304) |  | (181)% |
| Less: Net income attributable to the noncontrolling interest | ​ | ​ 13 | ​ | ​ — | ​ | ​ 13 | ​ | 100% |
| Net income (loss) attributable to Target Hospitality Corp. common stockholders | ​ | $(14,931) | ​ | $18,386 | ​ | $(33,317) | ​ | (181)% |

#### For the three months ended June 30, 2025 compared to the three months ended June 30, 2024

***Total Revenue.*** Total revenue was $61.6 million for the three months ended June 30, 2025 and consisted of $40.5 million of services income, $6.7 million of specialty rental income and $14.4 million of construction fee income. Total revenue for the three months ended June 30, 2024 was $100.7 million, which consisted of $67.5 million of services income, and $33.2 million of specialty rental income.

Services income consists primarily of specialty rental and vertically integrated and comprehensive hospitality services, including room revenue, catering and food services, maintenance, housekeeping, grounds-keeping, security, overall workforce community management, health and recreation facilities, concierge services, and laundry service. The main driver of the decrease in services income revenue was lower revenue in the Government segment led by the termination of the PCC Contract and termination of the STFRC Contract as previously discussed, and partially by lower revenue in HFS-South led by lower ADR. This decrease was partially offset by reactivation of the assets associated with the STFRC Contract under the DIPC Contract within the Government segment in March 2025 as previously discussed.

Specialty rental income consists primarily of revenues from leasing rooms and other facilities at certain communities that include contractual arrangements with customers that are considered leases under the authoritative accounting guidance for leases. Specialty rental income decreased primarily as a result of lower revenue in the Government segment led by the termination of the PCC Contract and termination of the STFRC Contract, partially offset by reactivation of the assets associated with the STFRC Contract under the DIPC Contract within the Government segment in March 2025 as previously discussed.

The decrease in services income and specialty rental income was partially offset by an increase in construction fee income, which was due to construction services provided under the Workforce Housing Contract originated in February 2025 in the WHS segment.

***Cost of services.*** Cost of services was $45.6 million for the three months ended June 30, 2025 as compared to $33.6 million for the three months ended June 30, 2024. The increase in services costs is primarily due to an increase in costs of approximately $11.4 million in the WHS segment led by construction costs for the construction services activity under the Workforce Housing Contract. Additionally, costs associated with the HFS-South segment increased by approximately $0.3 million driven by an increase in catering food purchases.

***Specialty rental costs.*** Specialty rental costs were $2.8 million for the three months ended June 30, 2025 as compared to $5.5 million for the three months ended June 30, 2024. The decrease in specialty rental costs is primarily due to a decrease in costs from the Government segment driven by the contract terminations previously discussed.

***Depreciation of specialty rental assets.*** Depreciation of specialty rental assets was $13.6 million for the three months ended June 30, 2025 as compared to $14.8 million for the three months ended June 30, 2024. The decrease in depreciation expense is primarily attributable to a decrease in depreciation expense associated with HFS-South specialty rental assets for certain site work assets that became fully depreciated during 2024.

***Selling, general and administrative.*** Selling, general and administrative was $12.7 million for the three months ended June 30, 2025 as compared to $13.5 million for the three months ended June 30, 2024. The decrease in selling, general and administrative expense from the prior period was primarily driven by a decrease in transaction fees expense by approximately $1.2 million driven primarily by the prior period including costs associated with the evaluation of the offer from Arrow Holdings S.a.r.l. (“Arrow”), an affiliate of TDR, to acquire all of the outstanding common stock of the Company not owned by Arrow (the “Arrow Proposal”), amortization of system implementation costs also decreased by approximately $0.2 million from the prior year as such costs became fully amortized in 2024 as scheduled, compensation and benefits decreased by approximately $0.2 million, and legal and professional fees decreased by approximately $0.2 million. This was partially offset by an increase of approximately $0.8 million related to stock-compensation expense, an increase of approximately $0.2 million related to audit fees, and an increase of approximately $0.2 million in other corporate expenses.

***Other depreciation and amortization.*** Other depreciation and amortization expense was $4.1 million for the three months ended June 30, 2025 as compared to $3.9 million for the three months ended June 30, 2024. The increase in other depreciation and amortization is primarily driven by an increase in depreciation associated with an increase in finance leases for commercial use vehicles.

***Other expense (income), net.*** Other expense (income), net was $(0.2) million for the three months ended June 30, 2025 as compared to $(0.1) million for the three months ended June 30, 2024. The change in other expense (income), net was primarily driven by non-cash gains on leased assets.

***Interest expense, net.*** Interest expense, net was $0.9 million for the three months ended June 30, 2025 as compared to $4.3 million for the three months ended June 30, 2024. The change in interest expense, net was primarily driven by a decrease in interest expense on the 2025 Senior Secured Notes led by their early redemption on March 25, 2025, partially offset by a decrease in interest income earned on cash equivalents.

***Income tax expense (benefit).*** Income tax expense (benefit) was $(2.9) million for the three months ended June 30, 2025 as compared to $6.9 million for the three months ended June 30, 2024. The change in income tax expense (benefit) is primarily attributable to the decrease in income before taxes for the three months ended June 30, 2025 led by a decrease in revenue and by cost increases previously mentioned.

### Consolidated Results of Operations for the six months ended June 30, 2025 and 2024 ($ in thousands):

| ​ ​ ​ ​ Revenue: | ​ ​ ​ ​ | ​ ​ For the Six Months Ended June 30, 2025 ​ ​ | ​ ​ | ​ ​ 2024 ​ ​ | ​ ​ ​ ​ | ​ ​ Amount of Increase (Decrease) ​ ​ | ​ ​ ​ ​ | ​ Percentage Change Increase (Decrease) ​ |
| --- | --- | ---: | --- | ---: | --- | ---: | --- | ---: |
| Services income | ​ | $90,574 | ​ | $139,889 | ​ | $(49,315) |  | (35)% |
| Specialty rental income | ​ | 21,711 | ​ | 67,504 | ​ | (45,793) |  | (68)% |
| Construction fee income | ​ | ​ 19,218 | ​ | ​ — | ​ | ​ 19,218 | ​ | 100% |
| Total revenue | ​ | 131,503 | ​ | 207,393 | ​ | (75,890) |  | (37)% |
| Costs: | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ |
| Services | ​ | 81,329 | ​ | 70,472 | ​ | 10,857 |  | 15% |
| Specialty rental | ​ | 5,282 | ​ | 11,397 | ​ | (6,115) |  | (54)% |
| Depreciation of specialty rental assets | ​ | 27,256 | ​ | 29,586 | ​ | (2,330) |  | (8)% |
| Gross Profit | ​ | 17,636 | ​ | 95,938 | ​ | (78,302) |  | (82)% |
| Selling, general and administrative | ​ | 27,469 | ​ | 28,312 | ​ | (843) |  | (3)% |
| Other depreciation and amortization | ​ | 8,055 | ​ | 7,792 | ​ | 263 |  | 3% |
| Other expense (income), net | ​ | 106 | ​ | (156) | ​ | 262 |  | (168)% |
| Operating income (loss) | ​ | (17,994) | ​ | 59,990 | ​ | (77,984) |  | (130)% |
| Loss on extinguishment of debt | ​ | ​ 2,370 | ​ | ​ — | ​ | ​ 2,370 | ​ | 100% |
| Interest expense, net | ​ | 5,266 | ​ | 8,861 | ​ | (3,595) |  | (41)% |
| Change in fair value of warrant liabilities | ​ | ​ — | ​ | ​ (675) | ​ | ​ 675 | ​ | (100)% |
| Income (loss) before income tax | ​ | (25,630) | ​ | 51,804 | ​ | (77,434) |  | (149)% |
| Income tax expense (benefit) | ​ | (4,253) | ​ | 13,035 | ​ | (17,288) |  | (133)% |
| Net income (loss) | ​ | ​ (21,377) | ​ | ​ 38,769 | ​ | ​ (60,146) | ​ | (155)% |
| Less: Net income attributable to the noncontrolling interest | ​ | ​ 15 | ​ | ​ — | ​ | ​ 15 | ​ | 100% |
| Net income (loss) attributable to Target Hospitality Corp. common stockholders | ​ | $(21,392) | ​ | $38,769 | ​ | $(60,161) |  | (155)% |

#### For the six months ended June 30, 2025 compared to the six months ended June 30, 2024

***Total Revenue.*** Total revenue was $131.5 million for the six months ended June 30, 2025 and consisted of $90.6 million of services income, $21.7 million of specialty rental income and $19 million of construction fee income. Total revenue for the six months ended June 30, 2024 was $207.4 million, which consisted of $139.9 million of services income, and $67.5 million of specialty rental income.

Services income consists primarily of specialty rental and vertically integrated and comprehensive hospitality services, including room revenue, catering and food services, maintenance, housekeeping, grounds-keeping, security, overall workforce community management, health and recreation facilities, concierge services, and laundry service. The main driver of the decrease in services income revenue was lower revenue in the Government segment led by the termination of the PCC Contract and termination of the STFRC Contract as previously discussed, and partially by lower revenue in HFS-South led by lower ADR. This decrease was partially offset by reactivation of the assets associated with the STFRC Contract under the DIPC Contract within the Government segment in March 2025 as previously discussed.

Specialty rental income consists primarily of revenues from leasing rooms and other facilities at certain communities that include contractual arrangements with customers that are considered leases under the authoritative accounting guidance for leases. Specialty rental income decreased primarily as a result of lower revenue in the Government segment led by the termination of the PCC Contract and termination of the STFRC Contract as previously discussed, partially offset by reactivation of the assets associated with the STFRC Contract under the DIPC Contract within the Government segment in March 2025.

The decrease in services income and specialty rental income was partially offset by an increase in construction fee income, which was due to construction services provided under the Workforce Housing Contract originated in February 2025 in the WHS segment.

***Cost of services.*** Cost of services was $81.3 million for the six months ended June 30, 2025 as compared to $70.5 million for the six months ended June 30, 2024. The increase in services costs is primarily due to an increase in costs of approximately $15.3 million in the WHS segment led by construction costs for the construction services activity under the Workforce Housing Contract. Additionally, costs associated with the HFS-South segment increased by approximately $1.2 million driven by an increase in customer activity. These cost increases were partially offset by a decrease in services costs of approximately $4.8 million in the Government segment led by a decrease in occupancy from the contract terminations previously discussed, and a decrease in services costs of approximately $0.9 million in the All Other category of operating segments driven by a community that incurred lodge removal and transportation costs in the prior period that didn’t recur in the current period.

***Specialty rental costs.*** Specialty rental costs were $5.3 million for the six months ended June 30, 2025 as compared to $11.4 million for the six months ended June 30, 2024. The decrease in specialty rental costs is primarily due to a decrease in costs from the Government segment driven by the contract terminations previously discussed.

***Depreciation of specialty rental assets.*** Depreciation of specialty rental assets was $27.3 million for the six months ended June 30, 2025 as compared to $29.6 million for the six months ended June 30, 2024. The decrease in depreciation expense is primarily attributable to a decrease in depreciation expense associated with HFS-South specialty rental assets for certain site work assets that became fully depreciated during 2024.

***Selling, general and administrative.*** Selling, general and administrative was $27.5 million for the six months ended June 30, 2025 as compared to $28.4 million for the six months ended June 30, 2024. The decrease in selling, general and administrative expense from the prior period was led by decreases in severance costs of approximately $1 million for certain terminated employees during the six months ended June 30, 2024, amortization of system implementation costs also decreased by approximately $0.7 million from the prior year as such costs became fully amortized in 2024 as scheduled, compensation and benefits costs decreased by approximately $0.6 million, stock compensation expenses decreased by approximately $0.3 million led primarily by the liability-based SARs driven by no SAR awards outstanding during the current period compared to the prior period as these awards vested and were exercised as of December 31, 2024, and marketing and advertising costs as well as insurance costs decreased collectively by approximately $0.3 million. This was partially offset by an increase in transaction fees of approximately $1.4 million driven primarily by legal, advisory, and audit fees associated with debt related transaction activity related to the 2025 Senior Secured Notes that were paid off on March 25, 2025, and, to a lesser extent, other business development project related transaction activity and remaining costs associated with the Arrow Proposal. The remaining change was primarily driven by an increase in recruiting, other corporate expenses, and professional fees.

***Other depreciation and amortization.*** Other depreciation and amortization expense was $8.1 million for the six months ended June 30, 2025 as compared to $7.8 million for the six months ended June 30, 2024. The increase in other depreciation and amortization is primarily driven by an increase in depreciation associated with an increase in finance leases for commercial use vehicles.

***Other expense (income), net.*** Other expense (income), net was $0.1 million for the six months ended June 30, 2025 as compared to $(0.2) million for the six months ended June 30, 2024. The increase in other expense was primarily driven by losses on leased assets and other asset disposals.

***Loss on extinguishment of debt.*** Loss on extinguishment of debt was $2.4 million for the six months ended June 30, 2025 as compared to $0 for the six months ended June 30, 2024. The increase in loss on extinguishment of debt is due to the redemption of the 2025 Senior Secured Notes on March 25, 2025.

***Interest expense, net.*** Interest expense, net was $5.3 million for the six months ended June 30, 2025 as compared to $8.9 million for the six months ended June 30, 2024. The change in interest expense, net was primarily driven by a decrease in interest expense on the 2025 Senior Secured Notes led by their early redemption on March 25, 2025, partially offset by an increase in interest expense on the ABL Facility, and a decrease in interest income earned on cash equivalents.

***Change in fair value of warrant liabilities.*** Change in fair value of warrant liabilities represents the fair value adjustments to the outstanding Private Warrant liabilities based on the change in their estimated fair value at each reporting period end. The change in fair value of the warrant liabilities was $0 for the six months ended June 30, 2025 as compared to $(0.7) million for the six months ended June 30, 2024 as a result of the Private Warrants expiring unexercised on March 15, 2024 as discussed in Note 8 of the notes to our unaudited consolidated financial statements included elsewhere within this Form 10-Q.

***Income tax expense (benefit).*** Income tax expense (benefit) was $(4.3) million for the six months ended June 30, 2025 as compared to $13.0 million for the six months ended June 30, 2024. The change in income tax expense (benefit) is primarily attributable to the decrease in income before taxes for the six months ended June 30, 2025 led by a decrease in revenue and by cost increases previously mentioned.

### Segment Results

The following table sets forth our selected results of operations for each of our reportable segments and All Other for the three months ended June 30, 2025 and 2024 ($ in thousands, except for Average Daily Rate).

| ​ ​ ​ ​ Revenue: | ​ ​ ​ ​ | ​ ​ ​ ​ For the Three Months Ended June 30, 2025 ​ ​ | ​ ​ ​ | ​ ​ ​ ​ 2024 ​ ​ | ​ ​ ​ ​ | ​ ​ ​ Amount of Increase (Decrease) ​ ​ | ​ ​ ​ ​ | ​ Percentage Change Increase (Decrease) ​ |
| --- | --- | ---: | --- | ---: | --- | ---: | --- | ---: |
| Government | ​ | $7,487 | ​ | $59,860 | ​ | $(52,373) |  | (87)% |
| HFS - South | ​ | 36,166 | ​ | 38,232 | ​ | (2,066) |  | (5)% |
| WHS | ​ | ​ 15,042 | ​ | ​ — | ​ | ​ 15,042 |  | 100% |
| All Other | ​ | 2,911 | ​ | 2,629 | ​ | 282 |  | 11% |
| Total Revenues | ​ | $61,606 | ​ | $100,721 | ​ | $(39,115) |  | (39)% |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ |
| Adjusted Gross Profit | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ |
| Government | ​ | $(1,080) | ​ | $48,844 | ​ | $(49,924) |  | (102)% |
| HFS - South | ​ | 10,547 | ​ | 13,065 | ​ | (2,518) |  | (19)% |
| WHS | ​ | ​ 3,687 | ​ | ​ — | ​ | ​ 3,687 |  | 100% |
| All Other | ​ | 102 | ​ | (234) | ​ | 336 |  | (144)% |
| Total Adjusted Gross Profit | ​ | $13,256 | ​ | $61,675 | ​ | $(48,419) |  | (79)% |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ |
| Average Daily Rate | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ |
| HFS - South | ​ | $69.62 | ​ | $74.33 | ​ | $(4.71) | ​ | ​ |

*Note: Adjusted gross profit for the chief operating decision maker’s (“CODM”) analysis includes the services and rental costs recognized in the financial statements and excludes depreciation on specialty rental assets, certain severance costs, and loss on impairment. Average daily rate is calculated based on specialty rental income and services income received over the period indicated, divided by utilized bed nights.*

### Government

Revenue for the Government segment was $7.5 million for the three months ended June 30, 2025, as compared to $59.9 million for the three months ended June 30, 2024.

Adjusted gross profit for the Government segment was $(1.1) million for the three months ended June 30, 2025, as compared to $48.8 million for the three months ended June 30, 2024.

Revenue decreased primarily due to the termination of the PCC Contract and the termination of the STFRC Contract as previously discussed, partially offset by reactivation of the assets associated with the STFRC Contract under the DIPC Contract in March 2025. Approximately $44 million of the revenue decrease was attributable to the PCC Contract termination. The remaining decrease in revenue of approximately $8 million was attributable to the STFRC Contract termination, partially offset by the DIPC Contract mentioned above.

Adjusted gross profit decreased as a result of the decrease in revenue mentioned above, partially offset by lower costs due to lower occupancy driven by the contract terminations previously discussed. Approximately $1.2 million of the decrease in costs were associated with community operations related to the PCC Contract, while approximately $1.3 million of the decrease in costs were associated with community operations related to the STFRC Contract, partially offset by the DIPC Contract mentioned above.

### HFS – South

Revenue for the HFS – South segment was $36.2 million for the three months ended June 30, 2025, as compared to $38.2 million for the three months ended June 30, 2024.

Adjusted gross profit for the HFS – South segment was $10.5 million for the three months ended June 30, 2025, as compared to $13.1 million for the three months ended June 30, 2024.

The decrease in revenue of approximately $(2.1) million was primarily attributable to a decrease in ADR.

The decrease in adjusted gross profit of approximately $(2.5) million was primarily attributable to the decrease in revenue noted above, and partially driven by an increase in operational costs led by an increase in catering food purchases.

### WHS

Revenue for the WHS segment was $15.0 million for the three months ended June 30, 2025, as compared to $0 for the three months ended June 30, 2024.

Adjusted gross profit for the WHS segment was $3.7 million for the three months ended June 30, 2025, as compared to $0 for the three months ended June 30, 2024.

The increase in revenue of approximately $15.0 million was primarily attributable to the increase in construction fee income, which was due to construction services provided under the Workforce Housing Contract originated in February 2025.

The increase in adjusted gross profit of approximately $3.7 million was primarily attributable to the increase in revenue noted above, partially offset by higher costs due to construction activity.

### Segment Results

The following table sets forth our selected results of operations for each of our reportable segments and All Other for the six months ended June 30, 2025 and 2024 ($ in thousands, except for Average Daily Rate).

| ​ ​ ​ ​ Revenue: | ​ ​ ​ ​ | ​ ​ ​ ​ ​ For the Six Months Ended June 30, 2025 ​ ​ | ​ ​ ​ | ​ ​ ​ ​ 2024 ​ ​ | ​ ​ ​ ​ | ​ ​ ​ Amount of Increase (Decrease) ​ ​ | ​ ​ ​ ​ | ​ ​ Percentage Change Increase (Decrease) ​ |
| --- | --- | ---: | --- | ---: | --- | ---: | --- | ---: |
| Government | ​ | $33,204 | ​ | $127,466 | ​ | $(94,262) |  | (74)% |
| HFS - South | ​ | 72,234 | ​ | 75,165 | ​ | (2,931) |  | (4)% |
| WHS | ​ | ​ 20,245 | ​ | ​ — | ​ | ​ 20,245 |  | 100% |
| All Other | ​ | 5,820 | ​ | 4,762 | ​ | 1,058 |  | 22% |
| Total Revenues | ​ | $131,503 | ​ | $207,393 | ​ | $(75,890) |  | (37)% |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ |
| Adjusted Gross Profit | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ |
| Government | ​ | $18,098 | ​ | $101,277 | ​ | $(83,179) |  | (82)% |
| HFS - South | ​ | 21,580 | ​ | 25,906 | ​ | (4,326) |  | (17)% |
| WHS | ​ | ​ 4,956 | ​ | ​ — | ​ | ​ 4,956 |  | (100)% |
| All Other | ​ | 258 | ​ | (1,659) | ​ | 1,917 |  | (116)% |
| Total Adjusted Gross Profit | ​ | $44,892 | ​ | $125,524 | ​ | $(80,632) |  | (64)% |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ |
| Average Daily Rate | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ |
| HFS - South | ​ | $69.85 | ​ | $74.60 | ​ | $(4.75) | ​ | ​ |

|  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ ​ | ​ | ​ |
| **​** | **​** | **​** | **​** | **​** | **​** | **​** | **​** | **​** | **​** | **​** |

*Note: Adjusted gross profit for the chief operating decision maker’s (“CODM”) analysis includes the services and rental costs recognized in the financial statements and excludes depreciation on specialty rental assets, certain severance costs, and loss on impairment. Average daily rate is calculated based on specialty rental income and services income received over the period indicated, divided by utilized bed nights.*

### Government

Revenue for the Government segment was $33.2 million for the six months ended June 30, 2025, as compared to $127.5 million for the six months ended June 30, 2024.

Adjusted gross profit for the Government segment was $18.1 million for the six months ended June 30, 2025, as compared to $101.3 million for the six months ended June 30, 2024.

Revenue decreased primarily due to the termination of the PCC Contract and the termination of the STFRC Contract as previously discussed, partially offset by reactivation of the assets associated with the STFRC Contract under the DIPC Contract in March 2025. Approximately $73.9 million of the revenue decrease was attributable to the PCC Contract, of which approximately $9.3 million was related to lower variable services revenue from the PCC Contract. The remaining decrease in revenue of approximately $20.4 million was attributable to the STFRC Contract termination, partially offset by the DIPC Contract mentioned above.

Adjusted gross profit decreased as a result of the decrease in revenue mentioned above, partially offset by lower costs due to lower occupancy driven by the contract terminations previously discussed. Approximately $6.0 million of the decrease in costs were associated with community operations related to the PCC Contract, while approximately $5.1 million of the decrease in costs were associated with community operations related to the STFRC Contract, partially offset by the DIPC Contract mentioned above.

### HFS – South

Revenue for the HFS – South segment was $72.2 million for the six months ended June 30, 2025, as compared to $75.2 million for the six months ended June 30, 2024.

Adjusted gross profit for the HFS – South segment was $21.6 million for the six months ended June 30, 2025, as compared to $26.0 million for the six months ended June 30, 2024.

The decrease in revenue of approximately $(2.9) million was primarily attributable to a decrease in ADR, partially offset with an increase in customer activity.

The decrease in adjusted gross profit of approximately $(4.3) million was primarily attributable to the decrease in revenue noted above, and partially by an increase in operational costs driven by an increase in customer activity.

### WHS

Revenue for the WHS segment was $20.2 million for the six months ended June 30, 2025, as compared to $0 for the six months ended June 30, 2024.

Adjusted gross profit for the WHS segment was $5.0 million for the six months ended June 30, 2025, as compared to $0 for the six months ended June 30, 2024.

The increase in revenue of approximately $20.2 million was primarily attributable to the increase in construction fee income, which was due to construction services provided under the Workforce Housing Contract originated in February 2025.

The increase in adjusted gross profit of approximately $5.0 million was primarily attributable to the increase in revenue noted above, partially offset by higher costs due to construction activity.

### Liquidity and Capital Resources

We depend on cash flow from operations, cash on hand and borrowings under our ABL Facility to finance our growth and diversification strategy, working capital needs, and capital expenditures. As of June 30, 2025, the ABL Facility had unused available borrowing capacity of $151 million. We currently believe that our cash on hand, along with these sources of funds will provide sufficient liquidity to fund debt service requirements, support our growth and diversification strategy discussed in Item 1, “Business” of the Company’s 2024 Form 10-K, lease obligations, contingent liabilities and working capital investments for at least the next 12 months. However, we cannot assure you that we will be able to obtain future debt or equity financings adequate for our future cash requirements on commercially reasonable terms or at all.

If our cash flows and capital resources are insufficient, we may be forced to reduce or delay additional growth opportunities, future investments and capital expenditures, and seek additional capital. Significant delays in our ability to finance planned growth initiatives or capital expenditures may materially and adversely affect our future revenue prospects.

We continue to review available acquisition opportunities with the awareness that any such acquisition may require us to incur additional debt to finance the acquisition and/or to issue shares of our Common Stock or other equity securities as acquisition consideration or as part of an overall financing plan. We will continue to evaluate alternatives to optimize our capital structure, which could include the issuance or repurchase of unsecured and secured debt, equity securities and/or equity-linked securities. There can be no assurance as to the timing of any such issuance or repurchase. From time to time, we may also seek to streamline our capital structure and improve our financial position through refinancing or restructuring our existing debt or retiring certain of our securities for cash or other consideration.

#### Capital Requirements

During the six months ended June 30, 2025, we incurred approximately $27.2 million in capital expenditures, with approximately $15.7 million driven by capital expenditures in the new WHS segment, and approximately $2.9 million driven by growth capital expenditures in the Government segment. Maintenance capital expenditures for specialty rental assets amounted to approximately $5.7 million for the six months ended June 30, 2025, while approximately $2.7 million was attributable to an increase in finance leases for commercial-use vehicles. As we pursue growth initiatives, we monitor which capital resources, including equity and debt financings, are available to us to meet our future financial obligations, planned capital expenditure activities and liquidity requirements. However, future cash flows are subject to a number of variables, including the ability to maintain existing contracts, obtain new contracts and manage our operating expenses. The failure to achieve anticipated revenue and cash flows from operations could result in a reduction in future capital spending. We cannot assure you that operations and other needed capital will be available on acceptable terms or at all. In the event we make additional acquisitions and the amount of capital required is greater than the amount we have available for acquisitions at that time, we could be required to reduce the expected level of capital expenditures or seek additional capital. We cannot assure you that needed capital will be available on acceptable terms or at all.

The following table sets forth general information derived from our unaudited consolidated statements of cash flows:

*($ in thousands)*

| ​ ​ ​ ​ | ​ ​ ​ | ​ ​ For the Six Months Ended June 30, 2025 ​ ​ | ​ ​ | ​ ​ 2024 ​ ​ |
| --- | --- | ---: | --- | ---: |
| Net cash provided by operating activities | ​ | $15,001 | ​ | $89,696 |
| Net cash used in investing activities | ​ | (24,911) | ​ | (16,137) |
| Net cash used in financing activities | ​ | (161,543) | ​ | (23,187) |
| Effect of exchange rate changes on cash and cash equivalents | ​ | ​ 22 | ​ | ​ (5) |
| Net increase (decrease) in cash and cash equivalents | ​ | $(171,431) | ​ | $50,367 |

#### For the six months ended June 30, 2025 compared to the six months ended June 30, 2024

*Cash flows provided by operating activities*. Net cash provided by operating activities was $15.0 million for the six months ended June 30, 2025 compared to $89.7 million for the six months ended June 30, 2024.

The current period is down by approximately $(74.7) million when compared to 2024 driven by a decrease in cash collections from customers of approximately $93.1 million, a $4.5 million increase in cash paid for interest driven by the early payoff of the 2025 Senior Secured Notes on March 25, 2025, and a decrease in interest received by approximately $0.5 million (driven by a lower average outstanding cash balance in the current period that generated interest income). These decreases were partially offset by a net decrease in payments for operating expenses and payroll of approximately $9.6 million led by a decrease of approximately $6.2 million in cash payments for the vested SAR awards. There was also a decrease in cash paid for income taxes of approximately $14.4 million.

*Cash flows used in investing activities*. Net cash used in investing activities was $24.9 million for the six months ended June 30, 2025 compared to $16.1 million for the six months ended June 30, 2024. This increase in net cash used in investing activities was primarily related to an increase in growth capital expenditures in the WHS segment related to the $15.5 million acquisition of community assets in January 2025 to support growth of the WHS segment, partially offset by lower maintenance capital expenditures in the HFS-South segment, and lower growth capital expenditures in the Government segment.

*Cash flows used in financing activities*. Net cash used in financing activities was $161.5 million for the six months ended June 30, 2025 compared to $23.2 million for the six months ended June 30, 2024. This increase in net cash used in financing activities was primarily driven by the $181.4 million full redemption of the 2025 Senior Secured Notes on March 25, 2025 and the related payment of 2025 Senior Secured Notes debt extinguishment premium costs of $1.8 million, partially offset by a net draw on the ABL Facility of $24 million in the current period and the prior period including approximately $21.1 million for the repurchase of Common Stock as part of the share repurchase program.

### Indebtedness

#### Finance lease and other financing obligations

The Company’s finance lease and other financing obligations as of June 30, 2025 consisted of approximately $4.7 million of finance leases. The finance leases pertain to leases entered into during 2017 through June 30, 2025, for commercial-use vehicles with 36-month terms (and continue on a month-to-month basis thereafter) expiring through 2028.

The Company’s finance lease and other financing obligations as of December 31, 2024 consisted of approximately $3.3 million of finance leases related to commercial-use vehicles with the same terms as described above.

#### ABL Facility

During the six months ended June 30, 2025, a net amount of $24 million was drawn on the ABL Facility resulting in an outstanding balance of $24 million and an unused available borrowing capacity of $151 million as of June 30, 2025. The maturity date of the ABL Facility is February 1, 2028. Refer to Note 7 of the notes to our unaudited consolidated financial statements included elsewhere within this Form 10-Q for additional discussion of the ABL Facility.

#### 2025 Senior Secured Notes

As of June 30, 2025, none of the 2025 Senior Secured Notes remain outstanding as the remaining balance was paid off on March 25, 2025. Refer to Note 7 of the notes to our unaudited consolidated financial statements included elsewhere within this Form 10-Q for additional discussion of the 2025 Senior Secured Notes.

#### Cash requirements

We expect that our principal short-term (over the next 12 months) and long-term needs for cash relating to our operations and obligations will be to primarily fund (i) operating activities and working capital, (ii) maintenance capital expenditures for specialty rental and other property, plant, and equipment assets, (iii) payments due under finance and operating leases, and (iv) debt service interest payments on the ABL Facility. We plan to fund such cash requirements from our existing sources of liquidity as previously discussed.

The table below presents information on payments coming due under the most significant categories of our needs for cash (excluding operating cash flows pertaining to normal business operations, other than operating lease obligations) as of June 30, 2025:

*($ in thousands)*

| ​ | ​ | ​ ​ Total | ​ | ​ ​ Rest of 2025 | ​ ​ | ​ ​ 2026 | ​ ​ | ​ ​ 2027 | ​ ​ | ​ ​ 2028 |
| --- | --- | ---: | --- | ---: | --- | --- | --- | --- | --- | --- |
| ABL Facility | ​ | $24,000 | ​ | — | ​ | ​ — | ​ | ​ — | ​ | ​ 24,000 |
| Operating lease obligations, including imputed interest(1) | ​ | ​ 9,623 | ​ | ​ 5,095 | ​ | ​ 3,266 | ​ | ​ 1,259 | ​ | ​ 3 |
| Total | ​ | $33,623 | ​ | $5,095 | ​ | $3,266 | ​ | $1,259 | ​ | $24,003 |

(1) Represents interest on operating lease obligations calculated using the appropriate discount rate for each lease.

### Concentration of Risks

In the normal course of business, we grant credit to customers based on credit evaluations of their financial condition and generally require no collateral or other security. Major customers are defined as those individually comprising more than 10% of our revenues or accounts receivable. For the six months ended June 30, 2025, we had three customers, who accounted for 18%, 15% and 12% of revenues, respectively, while no other customers accounted for more than 10% of revenues. The largest customer accounted for 43% and 10% of accounts receivable, respectively, while no other customers accounted for more than 10% of the accounts receivable balance as of June 30, 2025.

We had two customers for the six months ended June 30, 2024 that accounted for 47% and 14% of revenues, respectively, while no other customers accounted for more than 10% of revenues. The largest customers accounted for 30% and 10% of accounts receivable, respectively, while no other customers accounted for more than 10% of the accounts receivable balance as of June 30, 2024.

Major suppliers are defined as those individually comprising more than 10% of the annual goods purchased by the Company. For the six months ended June 30, 2025, we had one major supplier representing 18% of goods purchased. For the six months ended June 30, 2024, we had one major supplier that represented 20% of goods purchased.

We provide services almost entirely to customers in the government and natural resource industries and as such, are almost entirely dependent upon the continued activity of such customers.

### Commitments and Contingencies

The Company leases certain land, buildings, offices, modular units, and equipment under non-cancellable operating leases, the terms of which vary and generally contain renewal options. Such operating lease obligations are recognized in the Company’s accompanying consolidated balance sheet as of June 30, 2025 as current portion of operating lease obligations and long-term operating lease obligations. Refer to the Company’s unaudited consolidated balance sheet included elsewhere in this Quarterly Report on Form 10-Q for the amounts recognized as current portion of operating lease obligations and long-term operating lease obligations as of June 30, 2025.

Rent expense included in services costs in the unaudited consolidated statements of comprehensive income (loss) for cancelable and non-cancelable leases was $5.8 million and $6.7 million for the six months ended June 30, 2025 and 2024 respectively. Rent expense included in services costs in the unaudited consolidated statements of comprehensive income (loss) for cancelable and non-cancelable leases was $3.0 million and $3.2 million for the three months ended June 30, 2025 and 2024, respectively. Rent expense included in selling, general, and administrative expenses in the unaudited consolidated statements of comprehensive income (loss) for cancelable and non-cancelable leases was $0.2 million and $0.2 million for the six months ended June 30, 2025 and 2024, respectively. Rent expense included in selling, general, and administrative expenses in the unaudited consolidated statements of comprehensive income (loss) for cancelable and non-cancelable leases was $0.1 million and $0.1 million for the three months ended June 30, 2025 and 2024, respectively.

### Critical Accounting Policies and Estimates

Our management’s discussion and analysis of our financial condition and results of operations is based on our unaudited consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles (“US GAAP”).

The following section is a summary of certain aspects of those accounting policies involving estimates or assumptions that (1) involve a significant level of estimation uncertainty and (2) have had or are reasonably likely to have a material impact on our financial condition or results of operations. It is possible that the use of different reasonable estimates or assumptions could result in materially different amounts being reported in our consolidated final statements.

Additionally, refer to Note 1 of our notes to our unaudited consolidated financial statements included in this Form 10-Q for additional discussion of our summary of significant accounting policies and use of estimates. These estimates require significant judgments and assumptions.

#### Revenue Recognition

The Company recognizes revenue associated with community construction using the percentage of completion method with progress towards completion measured using the cost-to-cost method as the basis to recognize revenue. Management believes this cost-to-cost method is the most appropriate measure of progress to the satisfaction of a performance obligation on the community construction. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Changes in job performance, job conditions, estimated profitability and final contract settlements may result in revisions to projected costs and revenue and are recognized in the period in which the revisions to estimates are identified and the amounts can be reasonably estimated. Factors that may affect future project costs and margins include weather, production efficiencies, availability and costs of labor, materials and subcomponents.

For contracts that contain both a lease component and a services or non-lease component, the Company adopted an accounting policy to account for and present the lease component under ASC 842 and the non-lease component under the authoritative guidance for revenue recognition (“ASC 606” or “Topic 606”). When allocating the contract consideration to the lease component under ASC 842 and the services or non-lease component under ASC 606, the Company uses judgement in contemplating how to initially measure one or more parts of the contract, to apply the separation and measurement guidance. Factors the Company considers in making this allocation include relative standalone price of lease and services or non-lease components. An over or under-estimate of the consideration allocation between the lease components and the services or non-lease components could result in revenue not being recognized and properly presented in accordance with the authoritative guidance under ASC 842 and ASC 606. The Company had no significant contracts determined to have been over or under-allocated during the reporting periods included herein.

#### Principles of Consolidation

Refer to Note 1 of the notes to our unaudited consolidated financial statements included in this Form 10-Q for a discussion of principles of consolidation.

### Recently Issued Accounting Standards

Refer to Note 1 of the notes to our unaudited consolidated financial statements included in this Form 10-Q for our assessment of recently issued accounting standards.

### Non-GAAP Financial Measures

We have included Adjusted gross profit, EBITDA, Adjusted EBITDA, and Discretionary cash flows which are measurements not calculated in accordance with US GAAP, in the discussion of our financial results because they are key metrics used by management to assess financial performance. Our business is capital-intensive and these additional metrics allow management to further evaluate our operating performance.

Target Hospitality defines Adjusted gross profit, as gross profit plus depreciation of specialty rental assets and loss on impairment, and certain severance costs.

Target Hospitality defines EBITDA as net income (loss) before interest expense and loss on extinguishment of debt, income tax expense (benefit), depreciation of specialty rental assets, and other depreciation and amortization.

Adjusted EBITDA reflects the following further adjustments to EBITDA to exclude certain non-cash items and the effect of what management considers transactions or events not related to its core business operations:

- ***Other expense (income), net:*** Other expense (income), net includes miscellaneous cash receipts, gains and losses on disposals of property, plant, and equipment and leased assets and other immaterial expenses and non-cash items.
- ***Transaction expenses:*** Target Hospitality incurred legal, advisory fees, and other costs associated with certain transactions during 2024, including costs related to the evaluation of the Arrow Proposal. During 2025, such transaction costs primarily related to legal, advisory and audit-related fees associated with debt related transaction activity associated with the 2025 Senior Secured Notes that were redeemed and paid off on March 25, 2025, and, to a lesser extent, other business development project related transaction activity and remaining costs associated with the Arrow Proposal.
- ***Stock-based compensation:*** Charges associated with stock-based compensation expense, which has been, and will continue to be, for the foreseeable future, a significant recurring expense in our business and an important part of our compensation strategy.
- ***Change in fair value of warrant liabilities:*** Non-cash change in estimated fair value of warrant liabilities.
- ***Other adjustments:*** System implementation costs, including non-cash amortization of capitalized system implementation costs, claim settlements, business development related costs, and certain severance costs.

We define Discretionary cash flows as cash flows from operations less maintenance capital expenditures for specialty rental assets.

EBITDA reflects net income (loss) excluding the impact of interest expense and loss on extinguishment of debt, provision for income taxes, depreciation, and amortization. We believe that EBITDA is a meaningful indicator of operating performance because we use it to measure our ability to service debt, fund capital expenditures, and expand our business. We also use EBITDA, as do analysts, lenders, investors, and others, to evaluate companies because it excludes certain items that can vary widely across different industries or among companies within the same industry. For example, interest expense can be dependent on a company’s capital structure, debt levels, and credit ratings. Accordingly, the impact of interest expense on earnings can vary significantly among companies. The tax positions of companies can also vary because of their differing abilities to take advantage of tax benefits and because of the tax policies of the jurisdictions in which they operate. As a result, effective tax rates and provision for income taxes can vary considerably among companies. EBITDA also excludes depreciation and amortization expense, because companies utilize productive assets of different ages and use different methods of both acquiring and depreciating productive assets. These differences can result in considerable variability in the relative costs of productive assets and the depreciation and amortization expense among companies.

Target Hospitality also believes that Adjusted EBITDA is a meaningful indicator of operating performance. Our Adjusted EBITDA reflects adjustments to exclude the effects of additional items, including certain items, that are not reflective of the ongoing operating results of Target Hospitality. In addition, to derive Adjusted EBITDA, we exclude gains or losses on the sale or disposal of depreciable assets and impairment losses because including them in EBITDA is inconsistent with reporting the ongoing performance of our remaining assets. Additionally, the gain or loss on sale or disposal of depreciable assets and impairment losses represents either accelerated depreciation or excess depreciation in previous periods, and depreciation is excluded from EBITDA.

Target Hospitality also presents Discretionary cash flows because we believe it provides useful information regarding our business as more fully described below. Discretionary cash flows indicate the amount of cash available after maintenance capital expenditures for specialty rental assets for, among other things, investments in our existing business.

Adjusted gross profit, EBITDA, Adjusted EBITDA, and Discretionary cash flows are not measurements of Target Hospitality’s financial performance under GAAP and should not be considered as alternatives to gross profit, net income or other performance measures derived in accordance with GAAP, or as alternatives to cash flow from operating activities as measures of Target Hospitality’s liquidity. Adjusted gross profit, EBITDA, Adjusted EBITDA, and Discretionary cash flows should not be considered as discretionary cash available to Target Hospitality to reinvest in the growth of our business or as measures of cash that is available to it to meet our obligations. In addition, the measurement of Adjusted gross profit, EBITDA, Adjusted EBITDA, and Discretionary cash flows may not be comparable to similarly titled measures of other companies. Target Hospitality’s management believes that Adjusted gross profit, EBITDA, Adjusted EBITDA, and Discretionary cash flows provides useful information to investors about Target Hospitality and its financial condition and results of operations for the following reasons: (i) they are among the measures used by Target Hospitality’s management team to evaluate its operating performance; (ii) they are among the measures used by Target Hospitality’s management team to make day-to-day operating decisions, (iii) they are frequently used by securities analysts, lenders, investors and other interested parties as a common performance measure and to compare results across companies in Target Hospitality’s industry.

The following table presents a reconciliation of Target Hospitality’s consolidated gross profit to Adjusted gross profit:

*($ in thousands)*

| ​ ​ ​ | ​ ​ For the Three Months Ended June 30, 2025 | ​ ​ | ​ ​ 2024 | ​ ​ ​ ​ | ​ ​ For the Six Months Ended June 30, 2025 | ​ ​ | ​ ​ 2024 |
| --- | ---: | --- | ---: | --- | ---: | --- | ---: |
| **Gross Profit** | **$(328)** | **​** | **$46,870** | **​** | **$17,636** | **​** | **$95,938** |
| Depreciation of specialty rental assets | ​ 13,584 | ​ | ​ 14,805 | ​ | ​ 27,256 | ​ | ​ 29,586 |
| **Adjusted gross profit** | **$13,256** | **​** | **$61,675** | **​** | **$44,892** | **​** | **$125,524** |

The following table presents a reconciliation of Target Hospitality’s consolidated net income (loss) to EBITDA and Adjusted EBITDA:

*($ in thousands)*

| ​ ​ ​ | ​ ​ | ​ ​ For the Three Months Ended June 30, 2025 | ​ | ​ ​ 2024 | ​ ​ | ​ ​ For the Six Months Ended June 30, 2025 | ​ ​ | ​ ​ 2024 |
| --- | --- | ---: | --- | ---: | --- | --- | --- | --- |
| **Net income (loss)** | ​ | **$(14,918)** | **​** | **$18,386** | **​** | **$(21,377)** | **​** | **$38,769** |
| Income tax expense (benefit) | ​ | (2,937) | ​ | 6,892 | ​ | ​ (4,253) | ​ | ​ 13,035 |
| Interest expense, net | ​ | 937 | ​ | 4,273 | ​ | ​ 5,266 | ​ | ​ 8,861 |
| Loss on extinguishment of debt | ​ | ​ — | ​ | ​ — | ​ | ​ 2,370 | ​ | ​ — |
| Other depreciation and amortization | ​ | 4,082 | ​ | 3,908 | ​ | ​ 8,055 | ​ | ​ 7,792 |
| Depreciation of specialty rental assets | ​ | 13,584 | ​ | 14,805 | ​ | ​ 27,256 | ​ | ​ 29,586 |
| **EBITDA** | ​ | **748** | **​** | **48,264** | ​ | ​ **17,317** | **​** | **​** **98,043** |
| **​** | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ |
| **Adjustments** | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ |
| Other expense (income), net | ​ | (156) | ​ | (46) | ​ | ​ 106 | ​ | ​ (156) |
| Transaction expenses | ​ | 702 | ​ | 1,922 | ​ | ​ 3,532 | ​ | ​ 2,162 |
| Stock-based compensation | ​ | ​ 2,091 | ​ | ​ 1,336 | ​ | ​ 3,806 | ​ | ​ 4,083 |
| Change in fair value of warrant liabilities | ​ | ​ — | ​ | ​ — | ​ | ​ — | ​ | ​ (675) |
| Other adjustments | ​ | ​ 118 | ​ | ​ 703 | ​ | ​ 311 | ​ | ​ 2,409 |
| **Adjusted EBITDA** | ​ | **$3,503** | **​** | **$52,179** | ​ | **$25,072** | **​** | **$105,866** |

The following table presents a reconciliation of Target Hospitality’s Net cash provided by operating activities to Discretionary cash flows:

*($ in thousands)*

| ​ ​ ​ | ​ ​ ​ ​ | ​ ​ For the Six Months Ended June 30, 2025 | ​ ​ | ​ ​ 2024 |
| --- | --- | --- | --- | --- |
| **Net cash provided by operating activities** | ​ | $15,001 | **​** | $89,696 |
| Less: Maintenance capital expenditures for specialty rental assets | ​ | ​ (5,731) | ​ | ​ (9,387) |
| **Discretionary cash flows** | ​ | $9,270 | ​ | $80,309 |
| **​** | ​ | ​ ​ | ​ | ​ ​ |
| Purchase of specialty rental assets | ​ | ​ (24,261) | ​ | ​ (15,918) |
| Purchase of property, plant and equipment | ​ | ​ (650) | ​ | ​ (261) |
| Proceeds from sale of specialty rental assets and other property, plant and equipment | ​ | ​ — | ​ | ​ 42 |
| **Net cash used in investing activities** | ​ | $(24,911) | ​ | $(16,137) |
| **​** | ​ | ​ ​ | ​ | ​ ​ |
| Principal payments on finance and finance lease obligations | ​ | ​ (1,184) | ​ | ​ (824) |
| Principal payments on borrowings from ABL Facility | ​ | ​ (51,000) | ​ | ​ — |
| Repayment of 2025 Senior Secured Notes | ​ | ​ (181,446) | ​ | ​ — |
| Repurchase of Common Stock | ​ | ​ — | ​ | ​ (21,137) |
| Proceeds from borrowings on ABL Facility | ​ | ​ 75,000 | ​ | ​ — |
| Distributions paid to noncontrolling interest | ​ | ​ (126) | ​ | ​ — |
| Proceeds from issuance of Common Stock from exercise of warrants | ​ | ​ — | ​ | ​ 3 |
| Proceeds from issuance of Common Stock from exercise of options | ​ | ​ — | ​ | ​ 1,386 |
| Payment of debt extinguishment premium costs | ​ | ​ (1,814) | ​ | ​ — |
| Taxes paid related to net share settlement of equity awards | ​ | ​ (973) | ​ | ​ (2,615) |
| **Net cash used in financing activities** | ​ | $(161,543) | **​** | $(23,187) |

## Market risk

As filed, 1,259 characters.

Our principal market risks are our exposure to interest rates and commodity risks.

### Interest Rates

We are exposed to interest rate risk through our ABL Facility, which is subject to the risk of higher interest charges associated with increases in interest rates. As of June 30, 2025, we had $24 million of outstanding floating-rate obligations under our credit facilities. These floating-rate obligations expose us to the risk of increased interest expense in the event of increases in short-term interest rates. If floating interest rates increased by 100 basis points, our consolidated interest expense would increase by approximately $0.2 million annually, based on our floating-rate debt obligations in effect as of June 30, 2025.

### Commodity Risk

Commodity price fluctuations also indirectly influence our activities and results of operations over the long-term because they may affect production rates and investments by natural resource development companies in the development of commodity reserves.

We have limited direct exposure to risks associated with fluctuating commodity prices. However, both our profitability and our cash flows are affected by volatility in commodity prices. We do not currently hedge our exposure to commodity prices.

## Controls and procedures

As filed, 1,105 characters.

As of the end of the period covered by this report, the Company’s management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed by us in reports that we file under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure and is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. Based upon that evaluation, the Company’s management and our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of June 30, 2025, at the reasonable assurance level.

## Risk factors

As filed, 438 characters.

The Company’s financial position, results of operations and cash flows are subject to various risks, many of which are not exclusively within the Company’s control, and which may cause actual performance to differ materially from historical or projected future performance. For additional information about our risk factors, you should carefully consider the risk factors included in the 2024 Form 10-K, which have not materially changed.

Filed Aug 7, 2025.
Source: SEC EDGAR, the filing index for accession 0001558370-25-010732. Last ingested by Listed: Oct 26, 2026, 16:16 ET. No prices; not investment advice.