Fresh Start Accounting

12 Months Ended

Dec. 31, 2025

Reorganizations [Abstract]

Fresh Start Accounting

4.     Fresh Start Accounting

Upon emergence from the Restructuring, the Predecessor met the criteria and was required to adopt fresh start accounting in accordance with ASC 852, Reorganizations, which on the Emergence Date resulted in a new entity, the Successor, for financial reporting purposes, with no beginning retained earnings or deficit as of the fresh start reporting date. The criteria requiring fresh start accounting are: (1) the holders of the then-existing common shares of the Predecessor received less than 50 percent of the new common shares of the Successor outstanding upon emergence from bankruptcy and (2) the reorganization value of the entity’s assets immediately prior to confirmation of the Plan was less than the total of all post-petition liabilities and allowed claims.

Fresh start accounting requires that new fair values be established for BPA’s assets, liabilities and equity as of the Convenience Date (July 31, 2025, as discussed above), and therefore certain values and operational results of the consolidated financial statements subsequent to July 31, 2025 are not comparable to those in the Company’s consolidated financial statements prior to and including July 31, 2025. The Convenience Date fair values of the Successor’s assets and liabilities differ materially from their recorded values as reflected on the historical balance sheet of the Predecessor.

Reorganization Value

The reorganization value derived from the range of enterprise values associated with the Plan was allocated to BPA’s identifiable tangible and intangible assets and liabilities based on their fair values. Under ASC 852, Reorganization, value generally approximates the fair value of the entity before considering liabilities and is intended to approximate the amount a willing buyer would pay for the assets immediately after the effects of the restructuring. The value of the reconstituted entity (i.e., Successor) was based on management projections and the valuation models as determined by the Company’s financial advisors in setting an estimated range of enterprise values. As set forth in the Disclosure Statement for Joint Plan of Reorganization approved by the Bankruptcy Court, the valuation analysis resulted in an enterprise value between $682 million and $800 million, with a mid-point of $741 million. For GAAP purposes, we valued the Successor’s individual assets, liabilities, and equity instruments and determined the value of the enterprise was approximately $733 million as of the Emergence Date, which is between the low-point and the mid-point of the forecast enterprise value ranges approved by the Bankruptcy Court. Specific valuation approaches and key assumptions

used to arrive at reorganization value, and the value of discrete assets and liabilities resulting from the application of fresh start accounting, are described below in greater detail within the valuation process.

The following table reconciles the enterprise value to the equity value of the Successor as of the Convenience Date:

		July 31, 2025
Enterprise value	$	732,730
Plus: Cash and cash equivalents		11,667
Less: Total debt		(337,034)
Equity value	$	407,363

The following table reconciles enterprise value to reorganization value of the Successor (i.e., value of the reconstituted entity) and total reorganization value:

		July 31, 2025
Enterprise value	$	732,730
Plus: Cash and cash equivalents		11,667
Plus: Current liabilities excluding current maturities of long-term debt		218,079
Plus: Non-interest bearing noncurrent liabilities		125,993
Reorganization value of the reconstituted Successor	$	1,088,469

With the assistance of third-party valuation advisors, the Company determined the enterprise and corresponding equity value of the Successor using various valuation approaches and methods, including: (i) income approach using a calculation of the present value of future cash flows based on financial projections, (ii) the market approach using selling prices of similar assets and (iii) the cost approach.

The enterprise value and corresponding equity value are dependent upon achieving the future financial results set forth in the Company’s valuation model using an asset-based methodology of estimated financial information, considerations and projections, applying a combination of the income, cost and market approaches as of the Convenience Date. All estimates, assumptions, valuations and financial projections, including the fair value adjustments, the financial projections, the enterprise value and equity value projections, are inherently subject to significant uncertainties and the resolution of contingencies beyond the Company’s control. Accordingly, there is no assurance that the estimates, assumptions, valuations or financial projections will be realized, and actual results could vary materially.

Reorganization Items, net

Reorganization items represent (i) expenses incurred relating to the Chapter 11 Cases as a direct result of the Plan, (ii) gains or losses from liabilities settled and (iii) fresh start accounting adjustments, and are recorded in “Reorganization items, net” in the Company’s consolidated and combined statements of operations. Contractual interest expense from the Petition Date through the Emergence Date associated with BPA’s 2026 Indentures was accrued or recorded in the consolidated and combined statement of operations in interest expense, net. Professional service provider charges associated with reorganization that were incurred before the Petition Date are recorded in selling, general and administrative expense in the consolidated and combined statements of operations.

The following table summarizes the losses (gains) on reorganization items, net:

	Successor		Predecessor
	Consolidated		Combined and Consolidated
	Period from August 1, 2025 through December 31,		Period from January 1, 2025 through July 31,
	2025		2025
Legal and professional fees	$	1,782	$	68,404
Derecognition of unamortized debt discount, premium and issuance costs		—		(81,384)
Gain on settlement of liabilities subject to compromise		—		(902,162)
Fresh start accounting adjustments		—		(639,040)
Cost of debt refinancing pursuant to reorganization plan		—		1,591
Gain on rejected contracts and leases		(167)		(1,260)
Gain on settlement of DIP facility		—		(4,000)
DIP credit agreement fees		—		26
Total reorganization items, net	$	1,615	$	(1,557,825)

Valuation Process

The fair values of BPA’s principal assets, including trade names, customer relationships, internally developed product suite, leased real property, owned real property and personal property were estimated as of the Emergence Date.

Trade Names

The fair value of trade names was estimated using the RfR method under the income approach. RfR estimates the value of the trade names based on the royalty payments that would be avoided by owning the assets. The analysis considered projected revenues attributable to the trade names over their expected useful life, royalty rates derived from market data for trade names/trademarks in the business services industry, and discount rates reflecting the risk profile of the cash flows. The royalty savings were tax-affected and discounted to present value using a rate consistent with market participant expectations.

Customer Relationships

The fair value of customer relationships was estimated using the multi-period excess earnings method (“MPEEM”) under the income approach. The MPEEM attributes cash flow to a specific intangible asset based on residual cash flows from a set of assets generating revenues after accounting for appropriate returns on and of other assets contributing to that revenue generation. Cash flows were forecasted based on expected revenue from existing customers, adjusted for renewal probabilities/attrition rates, and anticipated operating costs required to service these relationships. After-tax cash flows were discounted using a rate considering the risk of these customers relative to the overall risk of the business.

Internally Developed Product Suite

The fair value of the internally developed product suite was estimated using the replacement cost method under the cost approach. This method estimates the value based on the cost a market participant would incur to recreate the existing internally developed software, adjusted for physical, functional, and economic obsolescence. The analysis considered historical development costs, current labor and overhead rates, and an allowance for developer profit and entrepreneurial incentive. The resulting cost was tax-affected and adjusted to reflect the economic benefits of the software/developed product suite in its current state.

Leased Real Property

The off-market component of the right of use assets (“ROUA”) was estimated using the Income Approach. Under this approach, the cash flow differential between the contract and market rents for each lease are present valued using a market-derived discount rate. Leases with a present value of contract rent cash flows within 5.0% of the present value of market rent cash flows were assumed to have no off-market component.

Owned Real Property

The fair values of the buildings and land improvements were estimated via the Cost Approach, and the underlying land was valued via the Sales Comparison Approach.

For the buildings and land improvements, utilizing the direct method of the Cost Approach, the replacement cost new (“RCN”) was estimated using construction cost information obtained from published data sources such as Marshall Valuation Service (for the owned location located in the U.S.) or CBRE market reports as well as publicly available data from the Central Public Works Department (for the owned location located in India).

For the land, utilizing the Sales Comparison Approach, comparable land sale data and listings of land for sale were compiled and qualitatively compared to the subject properties. Variances in market conditions at the time of sale, property characteristics, and other relevant factors were considered and analyzed when necessary.

Personal Property

The fair value of the personal property such as machinery and equipment, leasehold improvements, office furniture and equipment, computer hardware and software were estimated using the indirect method of the Cost Approach. Under the indirect method of the Cost Approach, the reproduction cost new (“CRN”) for each asset or group of assets was estimated by indexing historical costs recorded in the Fixed Asset Registers based on asset type and acquisition dates. Given the assets have been in use for a period of time, consideration was given to physical deterioration, economical and functional obsolescence. The estimate of physical deterioration was primarily conducted under the age/life concept. Under this concept, the physical loss in value was attributed to the relationship between the estimated useful life of an asset and its remaining useful life at a given point in time. Hold factors were estimated depreciation floors used to establish a minimal value for assets remaining in use that have met or exceeded their expected normal useful life (“NUL”). Construction in progress was reported at its cost as of the Convenience Date.

Consolidated and Combined Balance Sheet

The following illustrates the effects on the Company’s consolidated and combined balance sheet due to the reorganization and fresh start accounting adjustments. The explanatory notes following the table below provide further details on the adjustments, including the assumptions and methods used to determine fair value for the Company’s assets, liabilities, and warrants as of the Convenience Date.

	As of July 31, 2025
	Predecessor		Reorganization Adjustments			Fresh Start Adjustments			Successor (a)
Assets
Current assets
Cash and cash equivalents	$	17,958	$	(6,291)	(1)	$	—		$	11,667
Restricted cash		30,743		—			—			30,743
Accounts receivable, net		38,187		74,467	(2)		—			112,654
Related party receivables and prepaid expenses		3,938		—			—			3,938
Inventories, net		6,508		—			—			6,508
Prepaid expenses and other current assets		32,164		(5,413)	(3)		—			26,751
Total current assets		129,498		62,763			—			192,261
Property, plant and equipment, net		42,785		—			30,330	(16)		73,115
Operating lease right-of-use assets, net		29,542		—			—			29,542
Goodwill		39,718		—			414,499	(17)		454,217
Intangible assets, net		119,032		—			201,741	(18)		320,773
Other noncurrent assets		16,297		2,264	(4)		—			18,561
Total assets	$	376,872	$	65,027		$	646,570		$	1,088,469
Liabilities and Stockholders' Equity (Deficit)
Liabilities
Current liabilities
Current portion of long-term debt	$	247,322	$	(217,344)	(5)	$	—		$	29,978
Accounts payable		23,008		19,115	(6)		—			42,123
Related party payables		39		1,311	(7)		—			1,350
Income tax payable		10,126		(7,814)	(8)		—			2,312
Accrued liabilities		21,181		20,185	(9)		—			41,366
Accrued compensation and benefits		25,376		8,562	(10)		—			33,938
Accrued interest		—		1,877	(11)		—			1,877
Customer deposits		83		17,696	(7)		—			17,779
Deferred revenue		9,701		—			—			9,701
Obligation for claim payment		53,176		—			—			53,176
Current portion of finance lease liabilities		4,884		290	(7)		—			5,174
Current portion of operating lease liabilities		9,283		—			—			9,283
Total current liabilities		404,179		(156,122)			—			248,057
Long-term debt, net of current maturities		1,465		305,591	(12)		—			307,056
Finance lease liabilities, net of current portion		7,303		—			—			7,303
Net defined benefit liability		1,069		—			—			1,069
Deferred income tax liabilities		13,721		35,793	(8)		—			49,514
Long-term income tax liabilities		8,496		(545)	(8)		—			7,951
Operating lease liabilities, net of current portion		22,533		—			—			22,533
Other long-term liabilities		288		37,335	(13)		—			37,623
Total liabilities not subject to compromise		459,054		222,052			—			681,106
Liabilities subject to compromise		1,424,479		(1,424,479)	(14)		—			—
Total liabilities		1,883,533		(1,202,427)			—			681,106
Stockholders' Equity (Deficit)
Predecessor's net parent investment		(1,498,817)		859,777	(15)		639,040	(19)		—
Predecessor's accumulated other comprehensive loss (income):
Foreign currency translation adjustment		(7,844)		314	(8)		7,530	(20)		—
Predecessor total accumulated other comprehensive loss (income)		(7,844)		314			7,530			—
Successor's common stock		—		8	(14)		—			8
Successor's paid-in-capital in excess of par		—		407,355	(14)		—			407,355
Total stockholder's equity (deficit)		(1,506,661)		1,267,454			646,570			407,363
Total liabilities and stockholder's equity (deficit)	$	376,872	$	65,027		$	646,570		$	1,088,469

(a) Excluding the assets acquired, liabilities assumed and shares issued as part of the Business Combination (as discussed in the Note 5, Business Combination).

Reorganization Adjustments

(1) Represents the net cash payments that occurred on the Emergence Date as follows:

Sources:
Cash proceeds from XBP Funding	$	18,000
Cash proceeds from Super Senior Term Loan		40,000
Cash proceeds from BR Exar AR Facility		8,000
Cash proceeds from ABL Facility		58,653
Cash proceeds from previously made deposit under ABL Facility		250
	$	124,903

Uses:
Debt issuance costs related to Super Senior Secured Notes	$	(50)
Debt issuance costs related to BR Exar AR Facility		(1,400)
Paydown of the Second Lien Note		(1,500)
Repayment on Securitization Facility		(74,467)
Payment of legal fees on Securitization Facility		(172)
Debt issuance costs related to ABL Facility		(2,269)
Payment of Senior Secured Term Loan		(38,500)
Payment of Interest on Senior Secured Term Loan		(596)
Payment of Fees on Senior Secured Term Loan		(535)
Payment of legal fees		(11,705)
Net uses:	$	(6,291)

(2) On the Emergence Date, BPA’s securitization arrangement with PNC Bank was terminated. The arrangement was previously accounted for as an off-balance sheet financing. The increase in accounts receivable, net on the Emergence Date was due to return of the accounts receivables previously sold to PNC and the repayment of amounts received for such sold accounts receivables.

(3) Represents reversal of deferred tax asset as of the Emergence Date.

(4) Represents debt issuance costs related to the ABL Facility.

(5) Current maturities of long-term debt were adjusted as follows in accordance with the Plan:

Reinstatement of liabilities subject to compromise	$	1,178,002
Borrowing from BR Exar Facility		8,000
Amortization of Unamortized Balance of Debt Issuance Cost		1,056
Issuance of Common Stock to holders of Allowed Notes Claims (April 2026 and July 2026 Noteholders)		(8)
Debt issuance costs related to BR Exar AR Facility		(1,400)
Paydown of the Second Lien Note		(1,500)
Gain on settlement of DIP Facility		(4,000)
Conversion of DIP Facility into Super Senior Term Loan		(6,000)
Repayment of Senior Secured Term Loan		(38,500)
Conversion of DIP Facility into July 2030 Notes		(175,000)
APIC generated on issuance of Successor common stock		(407,355)
Gain on reinstatement of current portion of debt		(770,639)
Total adjustments to current portion of long-term debt	$	(217,344)

(6) Adjustments to accounts payable were made as follows:

Reinstatement of accounts payable from liabilities subject to compromise	$	35,048
Amount paid/transferred to long term		(4,633)
Gain on Reinstatement of accounts payable		(11,300)
Total adjustments to accounts payable	$	19,115

(7) Reinstatement of various liabilities from liabilities subject to compromise were made as follows:

Customer Deposits	$	17,696
Related Party Payable		1,311
Current portion of finance lease liabilities		290

(8) Represents income tax effects of the reorganization including changes in current and deferred tax balances as of the Emergence Date.

(9) Adjustments to Accrued Liabilities were made as follows:

Reinstatement of accrued liabilities from liabilities subject to compromise	$	25,565
Gain on reinstatement of accrued liabilities		(5,380)
Total adjustments to accrued liabilities	$	20,185

(10) Adjustments to Accrued Compensation and Benefits were made as follows:

Reinstatement of Accrued Compensation and Benefits from liabilities subject to compromise	$	45,717
Gain on settlement of Accrued Compensation and Benefits		(7,031)
Amount transferred to long term		(30,124)
Total adjustments to accrued compensation and benefits	$	8,562

(11) Adjustments to Accrued Interest were made as follows:

Reinstatement of accrued interest from liabilities subject to compromise	$	118,272
Gain on settlement of accrued interest		(107,811)
Payment of accrued interest on Senior Secured Term Loan		(596)
Conversion of Accrued Interest on the DIP Facility to July 2030 Notes		(7,988)
Total adjustments to accrued interest	$	1,877

(12) Adjustments to Long-term debt, net of current maturities were made as follows:

Issuance of July 2030 Notes (a)	$	200,988
Borrowing from ABL Facility		58,653
Borrowing from Super Senior Term Loan		40,000
Conversion of DIP Facility to July 2030 Notes		6,000
Debt Issuance cost on Super Senior Secured Facility		(50)
Total adjustments to long-term debt, net of current maturities	$	305,591

(a) Includes $18.0 million of principal amount of July 2030 Notes held by a subsidiary of the Company other than the issuer or a guarantor as of July 31, 2025 that are eliminated on consolidation.

(13) Adjustments to other long-term liabilities were made as follows:

Reinstatement of Other long-term liabilities balance from liabilities subject to compromise	$	2,578
Accounts payable to be paid in long term as per the Plan considered long term		4,633
Accrued compensation and benefits to be paid in long term as per the Plan considered long term		30,124
Total adjustments to other long-term liabilities	$	37,335

(14) Liabilities subject to compromise were settled as follows in accordance with the Plan:

Liabilities subject to compromise prior to the Emergence Date
Settled liabilities subject to compromise
Current portion of debt	$	1,178,002
Accounts payable		35,048
Accrued liabilities		25,565
Accrued compensation and benefits		45,717
Accrued Interest		118,272
Total settled liabilities subject to compromise	$	1,402,604
Reinstated liabilities subject to compromise
Customer deposits	$	17,696
Other long-term liabilities		2,578
Related party payables		1,311
Current portion of capital lease obligations		290
Total reinstated liabilities subject to compromise	$	21,875
Total liabilities subject to compromise	$	1,424,479

Issuance of common stock to holders of Allowed Notes Claims (April 2026 and July 2026 Noteholders)	$	(8)
Paid in capital in excess of par		(407,355)
Settlement of accounts payable as per the Plan		(23,748)
Settlement of accrued liabilities as per the Plan		(20,185)
Settlement of accrued compensation and benefit as per the Plan		(38,686)
Settlement of accrued interest as per the Plan		(10,460)
Reinstated liabilities subject to compromise		(21,875)
Gain on settlement of liabilities subject to compromise	$	902,162

(15) Predecessor’s Net Parent Investment was adjusted for the following activity on the Effective Date:

Gain on settlement of liabilities subject to compromise	$	(902,162)
Gain recognition on DIP Facility forgiveness		(4,000)
Payment of legal fees		11,705
Amortization of Debt Issuance Cost on Super Senior Term Loan		1,056
Tax Expenses on Reorganization		33,162
Payment of Closing Fee for the Super Senior Term Loan		535
Payment of Legal Fee for the Securitization Facility		172
Amortization of Debt Issuance Cost on the ABL Facility		5
Reversal of the ABL Facility Deposit from Reorganization Items		(250)
Total adjustment to Predecessor’s net parent investment	$	(859,777)

Fresh Start Adjustments

(16) Reflects fair value adjustments to personal property as well as the elimination of accumulated depreciation and amortization.

(17) Represents implied Goodwill as of the Emergence Date.

(18) Represents step-up to fair value of intangible assets as follows:

	Predecessor			Fresh Start Adjustments		Successor
Intangible Assets, Net
Customer relationships	$	90,344	$	173,656	$	264,000
Internally developed software		7,290		30,510		37,800
Purchased software		15,008		—		15,008
Trade names		5,300		(2,425)		2,875
Outsourced contract costs		1,090		—		1,090
Total	$	119,032	$	201,741	$	320,773

(19) Represents the cumulative effect of the fresh start accounting adjustments discussed above.

(20) Upon adoption of fresh start accounting, foreign currency translation adjustment was reset to zero as part of the revaluation of BPA’s equity structure to reflect the fair value of the reorganized entity.