NOTE 5. LONG-TERM DEBT AND LIABILITIES

BMO Credit Agreement. On January 6, 2025, the Company entered into a credit agreement with BMO Bank N.A. ("BMO"), a national banking association (the "Credit Agreement"). The Credit Agreement provides for senior secured financing in the aggregate amount of up to $47,000,000, consisting of a $2,000,000 senior secured revolving credit facility and a $45,000,000 senior secured term loan.

The Credit Agreement replaced the senior secured term loan agreement with Fortress Credit Corp. ("Fortress Credit Agreement"), which included a term loan with a maturity date of November 13, 2026. On January 6, 2025, the Company borrowed $45,000,000 under the new term loan and used this amount plus cash on hand to repay all amounts outstanding under the Fortress Credit Agreement, which was terminated. The Company recognized a loss on extinguishment of debt of $2,969,585 for the nine months ended September 30, 2025 related to the refinancing of our debt from Fortress to BMO in January 2025, primarily driven by the write-off of unamortized debt issuance costs.

Borrowings under the Credit Agreement bear interest at a rate equal to an applicable margin plus, at the Company’s option, either (1) at a floating rate equal to the base rate (the “Base Rate”) determined by reference to the greatest of: (a) the prime commercial rate announced or otherwise established by BMO, (b) the federal funds rate plus one half of 1%, and (c) the one-month Term Secured Overnight Financing Rate ("SOFR") (as defined in the Credit Agreement) plus 1.00%; or (2) at a fixed rate based on Term SOFR with an interest period of one, three or six months (at the Company’s election). The applicable margin for borrowings is determined by reference to a pricing grid based on the Company’s then current Total Funded Debt to EBITDA Ratio (as defined in the Credit Agreement). The applicable margin for Base Rate loans ranges from 2.0% to 2.5% per annum. The applicable margin for SOFR loans ranges from 3.0% to 3.5% per annum. The Company pays interest on a monthly basis and has elected the one-month SOFR plus 1.00%. The Company will pay a commitment fee, payable quarterly in arrears, equal to the applicable margin on the average daily undrawn amount under the new revolving credit facility.

Pursuant to the terms of the Credit Agreement, the new term loan and new revolving credit facility will mature on January 6, 2028 as the merger with Evolution was not completed by December 31, 2025.

The Credit Agreement contains customary representations and warranties, affirmative and negative covenants and events of

default. The Credit Agreement includes financial covenants requiring the Company to maintain a maximum Total Funded Debt to EBITDA Ratio, a minimum Fixed Charge Coverage Ratio, minimum EBITDA, and maximum Capital Expenditures (each as defined in the Credit Agreement).

The Company’s obligations under the Credit Agreement are guaranteed by the Company’s domestic subsidiaries, and secured by a first-priority security interest in substantially all of the tangible and intangible personal property of the Company and each subsidiary.

On July 24, 2026, the Company entered into an amendment (the "First Amendment") to its Credit Agreement with BMO. The First Amendment amended the Credit Agreement to, among other things, permit the Company to repurchase up to $4,000,000 of the Company’s capital stock, equity interests or warrants, provided that such approved restricted payment satisfies certain conditions, including that (i) the Company has minimum unencumbered liquid assets of $5,000,000 after taking into account such approved restricted payments; (ii) the sole source of funds for the payment of such approved restricted payment is the termination fee paid to the Company in connection with the termination of the Merger Agreement by Evolution, (iii) the Company is in compliance with all financial covenants; and (iv) certain other conditions are satisfied. The First Amendment also amended the Fixed Charge Coverage Ratio, and various requirements related to the provision of certain financial reports by the Company to BMO.

On September 23, 2026, the Company entered into an amendment (the "Second Amendment") to its Credit Agreement with BMO, as amended by the First Amendment dated as of July 24, 2026. The Second Amendment, among other things, (i) increases the annual capital expenditure limitation imposed upon the Company and any of its Subsidiaries, up to no more than ten percent (10%) of the prior year’s net revenue per annum and (ii) approves a one-time EBITDA addback in the amount of $505,361 solely for purposes of determining compliance with certain financial ratios set forth in the Credit Agreement.

Warrant Cancellation. In connection with the Fortress Credit Agreement, on November 15, 2021, the Company issued warrants to purchase an aggregate of 778,320 shares of the Company’s common stock to certain holders, each of which was an affiliate of Fortress Credit Corp. On August 12, 2026, the Company and the warrantholders entered into warrant cancellation agreements, pursuant to which the warrants were cancelled. In consideration for the cancellation of the warrants, the Company paid the holders an aggregate of $1,214,933 in cash, funded from a portion of the termination fee received from Evolution in connection with the termination of the Merger Agreement. Upon execution of each warrant cancellation agreement, the applicable warrants were cancelled and terminated in all respects and deemed null and void. The payment was recorded as a reduction of additional paid-in capital. The transaction was applied against the $4,000,000 share repurchase program adopted by the Company's Board of Directors on July 22, 2026. Following the warrant cancellation, the Company has no warrants outstanding.

For purposes of calculating earnings (loss) per share, the Warrants were considered outstanding until their cancellation on August 12, 2026.