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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the period ended June 30, 2025

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-40206

XBP Global Holdings, Inc.

(Exact Name of Registrant as Specified in its Charter)


Delaware		85-2002883
(State of or other Jurisdiction Incorporation or Organization)		(I.R.S. Employer Identification No.)

6641 N. Belt Line Road, Suite 100 Irving, Texas		75061
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s Telephone Number, Including Area Code: (844) 935-2832

XBP Europe Holdings Inc.

2701 East Grauwyler Road
Irving, Texas 75061

(Former name, former address and former fiscal year, if changed since last report)

Securities Registered Pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol	Name of Each Exchange On Which Registered
Common Stock, Par Value $0.0001 per share	XBP	The Nasdaq Capital Market
Redeemable warrants, each whole warrant exercisable for one share of common stock at an exercise price of $11.50	XBPEW	The Nasdaq Capital Market

Indicate by check mark whether the Registrant (1) has filed all reports required by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer ☐	Accelerated filer ☐	Non-accelerated filer ☒	Smaller reporting company ☒
			Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act). ☐ Yes ☒ No

As of August 14, 2025, the Registrant had 117,515,972 shares of common stock outstanding.

Table of Contents

EXPLANATORY NOTE

This Quarterly Report on Form 10-Q includes the historical operations of XBP Europe Holdings, Inc. (now known as XBP Global Holdings, Inc.) for the period ended June 30, 2025, which occurred prior to the completion of its acquisition of Exela Technolgies BPA, LLC and its subsidiaries (“BPA”), subject to certain conditions, on July 15, 2025 (and which conditions were satisfied as of July 29, 2025, the same day the name was changed). The financial information presented herein does not include the operations of BPA and therefore is not indicative of the results of the combined company following this acquisition.

Table of Contents

TABLE OF CONTENTS


Item 1. Financial Statements

Condensed Consolidated Financial Statements

Condensed Consolidated Balance Sheets as of June 30, 2025 (Unaudited) and December 31, 2024	4

Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2025 and 2024 (Unaudited)	5

Condensed Consolidated Statements of Comprehensive Loss for the three and six months ended June 30, 2025 and 2024 (Unaudited)	6

Condensed Consolidated Statements of Stockholders’ Deficit for the three and six months ended June 30, 2025 and 2024 (Unaudited)	7

Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2025 and 2024 (Unaudited)	9

Notes to the Condensed Consolidated Financial Statements (Unaudited)	10

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	36

Item 3. Quantitative and Qualitative Disclosures about Market Risk	51

Item 4. Controls and Procedures	51

PART II — OTHER INFORMATION	51

Item 1. Legal Proceedings	51

Item 1A. Risk Factors	52

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds, and Issuer Purchases of Equity Securities	52

Item 3. Defaults Upon Senior Securities	52

Item 4. Mine Safety Disclosures	52

Item 5. Other Information	52

Item 6. Exhibits	53

Signatures	54

Table of Contents

XBP Global Holdings, Inc.

(formerly known as XBP Europe Holdings, Inc.)

Condensed Consolidated Balance Sheets

As of June 30, 2025 and December 31, 2024

(in thousands of United States dollars except share and per share amounts)

(Unaudited)


	June 30,		December 31,
	2025		2024
ASSETS
Current assets
Cash and cash equivalents	$	6,121	$	12,099
Accounts receivable, net of allowance for credit losses of $936 and $1,198, respectively		33,610		19,810
Inventories, net		4,042		3,823
Prepaid expenses and other current assets		5,599		4,228
Current assets held for sale		1,236		1,378
Total current assets		50,608		41,338
Property, plant and equipment, net of accumulated depreciation of $46,247 and $40,325, respectively		13,530		11,272
Operating lease right-of-use assets, net		5,070		4,805
Goodwill		24,361		21,666
Intangible assets, net		1,270		1,121
Deferred income tax assets		7,100		7,026
Related party long term notes receivable		2,055		—
Other noncurrent assets		1,189		817
Total assets	$	105,183	$	88,045

LIABILITIES AND STOCKHOLDERS’ DEFICIT
LIABILITIES
Current liabilities
Accounts payable	$	15,931	$	12,553
Related party payables		7,588		5,443
Accrued liabilities		23,141		17,993
Accrued compensation and benefits		22,979		16,482
Customer deposits		148		277
Deferred revenue		6,565		6,870
Current portion of finance lease liabilities		1		12
Current portion of operating lease liabilities		1,879		1,734
Current portion of long-term debts		6,755		4,958
Current liabilities held for sale		4,161		2,443
Total current liabilities		89,148		68,765
Related party notes payable		1,640		1,451
Long-term debt, net of current maturities		25,593		23,966
Pension liabilities		11,823		10,339
Operating lease liabilities, net of current portion		3,373		3,271
Other long-term liabilities		1,885		1,599
Total liabilities	$	133,462	$	109,391
Commitments and Contingencies (Note 13)

STOCKHOLDERS’ DEFICIT
Preferred stock, par value of $0.0001 per share; 10,000,000 shares authorized; none issued and outstanding as of June 30, 2025 and December 31, 2024, respectively		—		—
Common stock, par value of $0.0001 per share; 200,000,000 shares authorized; 35,915,548 shares issued and outstanding as of June 30, 2025 and 30,166,102 shares issued and outstanding as of December 31, 2024, respectively		4		30
Additional paid in capital		7,950		1,611
Accumulated deficit		(34,944)		(23,705)
Accumulated other comprehensive loss:		—
Foreign currency translation adjustment		(1,534)		474
Unrealized pension actuarial gains, net of tax		245		244
Total accumulated other comprehensive loss		(1,289)		718
Total stockholders’ deficit		(28,279)		(21,346)
Total liabilities and stockholders’ deficit	$	105,183	$	88,045

The accompanying notes are an integral part of these condensed consolidated financial statements

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XBP Global Holdings, Inc.

(formerly known as XBP Europe Holdings, Inc.)

Condensed Consolidated Statements of Operations

For the three and six months ended June 30, 2025 and 2024

(in thousands of United States dollars except share and per share amounts)

(Unaudited)


	Three months ended June 30,				Six months ended June 30,
	2025		2024		2025		2024
Revenue, net	$	39,431	$	33,534	$	76,962	$	71,581
Related party revenue, net		184		81		326		147
Cost of revenue (exclusive of depreciation and amortization)		27,787		27,007		54,096		55,069
Related party cost of revenue		8		10		17		28
Selling, general and administrative expenses (exclusive of depreciation and amortization)		10,407		5,998		21,360		12,966
Related party expense		2,417		1,179		3,979		2,105
Depreciation and amortization		607		775		1,234		1,583
Operating loss	$	(1,611)	$	(1,354)	$	(3,398)	$	(23)
Other expense (income), net
Interest expense, net		1,999		1,461		3,720		2,878
Related party interest expense, net		25		22		48		41
Foreign exchange losses (gains), net		(311)		596		(382)		1,349
Changes in fair value of warrant liability		—		(2)		2		(39)
Other income, net		(392)		(421)		(761)		(844)
Net loss before income taxes	$	(2,932)		(3,010)		(6,025)		(3,408)
Income tax expense		514		542		1,276		1,002
Net loss from continuing operations	$	(3,446)		(3,552)		(7,301)		(4,410)
Net loss from discontinued operations, net of income taxes		(3,443)		(1,171)		(3,938)		(2,521)
Net loss	$	(6,889)	$	(4,723)	$	(11,239)	$	(6,931)
Loss per share:
Basic and diluted - continuing operations	$	(0.10)	$	(0.12)	$	(0.22)	$	(0.15)
Basic and diluted - discontinued operations		(0.10)		(0.04)		(0.12)		(0.08)
Basic and diluted	$	(0.19)	$	(0.16)	$	(0.34)	$	(0.23)

The accompanying notes are an integral part of these condensed consolidated financial statements.

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XBP Global Holdings, Inc.

(formerly known as XBP Europe Holdings, Inc.)

Condensed Consolidated Statements of Comprehensive Loss

For the three and six months ended June 30, 2025 and 2024

(in thousands of United States dollars)

(Unaudited)


	Three months ended June 30,				Six months ended June 30,
	2025		2024		2025		2024
Net loss	$	(6,889)	$	(4,723)	$	(11,239)	$	(6,931)
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments		(1,432)		144		(2,008)		422
Unrealized pension actuarial (loss) gain, net of tax		6		247		1		537
Total other comprehensive loss, net of tax	$	(8,315)	$	(4,332)	$	(13,246)	$	(5,972)

The accompanying notes are an integral part of these condensed consolidated financial statements.

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XBP Global Holdings, Inc.

(formerly known as XBP Europe Holdings, Inc.)

Condensed Consolidated Statements of Stockholders’ Deficit

For the three and six months ended June 30, 2025 and 2024

(in thousands of United States dollars except share and per share amounts)

(Unaudited)


						Accumulated Other
						Comprehensive Loss
								Unrealized
						Foreign		Pension
						Currency		Actuarial
	Common Stock			Additional		Translation		Gains (Losses),		Accumulated		Total
	Shares	Amount		Paid in Capital		Adjustment		net of tax		Deficit		Deficit
Balances at December 31, 2023	30,166,102	$	30	$	—	$	(1,416)	$	157	$	(11,339)	$	(12,568)
Net loss January 1, 2024 to March 31, 2024	—		—		—		—		—		(2,208)		(2,208)
Foreign currency translation adjustment	—		—		—		278		—		—		278
Net unrealized pension actuarial gains, net of tax	—		—		—		—		290		—		290
Balances at March 31, 2024	30,166,102	$	30	$	—	$	(1,138)	$	447	$	(13,547)	$	(14,208)
Net loss April 1, 2024 to June 30, 2024	—		—		—		—		—		(4,723)		(4,723)
Stock-based compensation	—		—		160		—				—		160
Foreign currency translation adjustment	—		—		—		144		—		—		144
Net unrealized pension actuarial gains, net of tax	—		—		—		—		247		—		247
Balances at June 30, 2024	30,166,102	$	30	$	160	$	(994)	$	694	$	(18,270)	$	(18,380)

The accompanying notes are an integral part of these condensed consolidated financial statements.

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XBP Global Holdings, Inc.

(formerly known as XBP Europe Holdings, Inc.)

Condensed Consolidated Statements of Stockholders’ Deficit

For the three and six months ended June 30, 2025 and 2024

(in thousands of United States dollars except share and per share amounts)

(Unaudited)


						Accumulated Other
						Comprehensive Loss
								Unrealized
						Foreign		Pension
						Currency		Actuarial
	Common Stock			Additional		Translation		Gains (Losses),		Accumulated		Total
	Shares	Amount		Paid in Capital		Adjustment		net of tax		Deficit		Deficit
Balances at December 31, 2024	30,166,102	$	30	$	1,611	$	474	$	244	$	(23,705)	$	(21,346)
Net loss January 1, 2025 to March 31, 2025	—		—		—		—		—		(4,350)		(4,350)
Stock-based compensation	3,865,396		4		3,583		—		—		—		3,587
Acquisition of membership interest	1,680,000		2		2,300		—		—		—		2,302
Foreign currency translation adjustment	—		—		—		(576)		—		—		(576)
Net unrealized pension actuarial losses, net of tax	—		—		—		—		(5)		—		(5)
Balances at March 31, 2025	35,711,498	$	36	$	7,494	$	(102)	$	239	$	(28,055)	$	(20,388)
Net loss April 1, 2025 to June 30, 2025	—		—		—		—		—		(6,889)		(6,889)
Stock-based compensation	204,050		—		424		—		—		—		424
Reclass adjustment	—		(32)		32		—		—		—		—
Foreign currency translation adjustment	—		—		—		(1,432)		—		—		(1,432)
Net unrealized pension actuarial losses, net of tax	—		—		—		—		6		—		6
Balances at June 30, 2025	35,915,548	$	4	$	7,950	$	(1,534)	$	245	$	(34,944)	$	(28,279)

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XBP Global Holdings, Inc.

(formerly known as XBP Europe Holdings, Inc.)

Condensed Consolidated Statements of Cash Flows

For the three months ended June 30, 2025 and 2024

(in thousands of United States dollars)

(Unaudited)


	Six months ended June 30,
	2025		2024
Cash flows from operating activities
Net loss	$	(11,239)	$	(6,931)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		1,045		1,520
Amortization of intangible assets		255		360
Debt issuance cost amortization		218		—
Credit loss expense		(260)		176
Changes in fair value of warrant liability		2		(39)
Stock-based compensation expense		4,011		160
Unrealized foreign currency losses (gains)		(982)		1,323
Change in deferred income taxes		648		(80)

Change in operating assets and liabilities
Accounts receivable		(10,322)		1,799
Inventories		415		(83)
Prepaid expense and other assets		(927)		(2,482)
Accounts payable		1,889		3,000
Related party payables		3,024		(2,221)
Accrued expenses and other liabilities		9,182		(1,528)
Deferred revenue		(995)		(708)
Customer deposits		28		195
Net cash used in operating activities		(4,008)		(5,540)

Cash flows from investing activities
Purchase of property, plant and equipment		(1,878)		(553)
Additions to internally developed software		(258)		(173)
Net cash used in investing activities		(2,136)		(726)

Cash flows from financing activities
Borrowings under revolving credit facility		—		15,339
Principal payments on 2024 Term Loan A Facility		(195)		—
Principal payments on 2024 Term Loan B Facility		(574)		—
Principal payments on long-term obligations		—		(468)
Proceeds from secured credit facility		3,407		972
Principal payments on secured credit facility		(2,997)		(18)
Principal payments on finance leases		(12)		(207)
Net cash provided by (used in) financing activities		(371)		15,618
Effect of exchange rates on cash and cash equivalents		614		(695)
Net increase (decrease) in cash and cash equivalents		(5,901)		8,657

Cash and equivalents, beginning of period, including cash from discontinued operations		12,106		6,905
Cash and equivalents, end of period, including cash from discontinued operations	$	6,205	$	15,562

Supplemental cash flow data:
Income tax payments, net of refunds received		2,015		60
Interest paid		1,871		1,053

The accompanying notes are an integral part of these condensed consolidated financial statements.

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XBP Global Holdings, Inc.

(formerly known as XBP Europe Holdings, Inc.)

Notes to the Condensed Consolidated Financial Statements

(in thousands of United States dollars except share and per share amounts)

(Unaudited)

1.General

As of June 30, 2025, XBP Europe Holdings, Inc. (now known as XBP Global Holdings, Inc.) (the “Company” or “XBP Europe”) was a pan-European integrator of bills, payments and related solutions and services seeking to enable digital transformation of businesses. The Company’s name — “XBP” — stands for “exchange for bills and payments” and reflects the Company’s strategy to facilitate connections between buyers and suppliers to optimize clients’ bills and payments and related digitization processes. XBP believes its business ultimately advances digital transformation, improves market-wide liquidity, and encourages sustainable business practices.

The Company provides business process management solutions with proprietary software suites and deep domain expertise, serving as a technology and operations partner for its clients’ strategic journeys and streamlining their complex, disconnected payment processes. As of June 30, 2025, the Company served in excess of 1,000 clients across Europe, the Middle East and Africa (“EMEA”). The Company’s client relationships span multiple industries, including banking, healthcare, insurance, and the public sector. The Company is able to deploy its solutions to clients in any EMEA market due to its cloud-based structure. As of June 30, 2025, its physical footprint spanned 15 countries and approximately 30 locations.

These condensed consolidated financial statements should be read in conjunction with the below notes and the notes to the consolidated financial statements as of and for the year ended December 31, 2024 included in the XBP Europe annual report on Form 10-K for such period (the “2024 Form 10-K”), filed with the Securities and Exchange Commission (“SEC”) on March 19, 2025 and available at the SEC’s website at http://www.sec.gov.

The accompanying condensed consolidated financial statements have been prepared using accounting principles generally accepted in the United States of America (“GAAP”) and in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X under the Securities Act of 1933, as amended (the “Securities Act”), as they apply to interim financial information. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. These accounting principles require the Company to use estimates and assumptions that impact the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities. Actual results may differ from the Company’s estimates.

The condensed consolidated financial statements are unaudited but include all adjustments (consisting of normal recurring adjustments) necessary for a fair statement of the results for the interim period. The interim financial results are not necessarily indicative of results that may be expected for any other interim period or the fiscal year.

Merger/Business Combination with CF Acquisition Corp. VIII

The Company was a special purpose acquisition company called CF Acquisition Corp. VIII (“CF VIII”) prior to the closing of a business combination (the “Business Combination”) on November 29, 2023. Pursuant to that certain Agreement and Plan of Merger, dated October 9, 2022 (the “Merger Agreement”) whereby XBP Europe, Inc., a Delaware corporation, and an indirect subsidiary of Exela Technologies, Inc., a Delaware corporation (“ETI”), became a wholly owned subsidiary of CFV III. In connection with the consummation of the Business Combination, the Company changed its name from CF VIII to “XBP Europe Holdings, Inc.” The Business Combination was accounted for as a reverse capitalization in accordance with Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification Topic 805, Business Combinations (“ASC 805”). Under this method of accounting, CF VIII was treated as the “acquired” company for financial reporting purposes with XBP Europe surviving as a direct wholly-owned subsidiary of CF VIII.

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Divesture

During the third quarter of fiscal year 2024, the Company determined that its certain on-demand printing operations met the criteria to be classified as a discontinued operation, and, as a result, disposable group’s historical financial results are reflected in the Company’s condensed consolidated financial statements as discontinued operations, and assets and liabilities were retrospectively reclassified as assets and liabilities held for sale. See Note 3 - Discontinued Operations of the notes to condensed consolidated financial statements.

2.Reverse Recapitalization

As discussed in Note 1, on November 29, 2023, the Company consummated a business combination pursuant to the Merger Agreement. The Business Combination was accounted for as a Reverse Recapitalization, rather than a business combination, for financial accounting and reporting purposes. Accordingly, XBP Europe was deemed the accounting acquirer (and legal acquiree) and CF VIII was treated as the accounting acquiree (and legal acquirer). Under this method of accounting, the reverse recapitalization was treated as the equivalent of XBP Europe issuing stock for the net assets of CF VIII, accompanied by a recapitalization. XBP Europe was determined to be the accounting acquirer based on evaluation of the following facts and circumstances:

●

XBP Europe’s pre-combination stockholder had the majority of the voting power in the post-Business Combination company;

●

XBP Europe’s stockholder had the ability to appoint a majority of the Company’s board of directors (the “Board”);

●

XBP Europe’s management team was the management team of the post-Business Combination company;

●

XBP Europe’s prior operations was comprised of the ongoing operations of the post-Business Combination company;

●

XBP Europe was the larger entity based on historical revenues and business operations; and

●

The post-Business Combination company had assumed XBP Europe’s operating name.

The net assets of CF VIII are stated at historical cost, with no incremental goodwill or other intangible assets recorded for the effects of the Business Combination. The consolidated assets, liabilities, and results of operations prior to the Business Combination are those of XBP Europe. The shares and corresponding capital amounts and earnings per share available for common stockholders, prior to the Business Combination, have been retroactively restated.

Upon closing of the Business Combination, the Company received net proceeds of $5.2 million from the Business Combination.

The Company incurred $3.3 million in transaction costs relating to the Merger for the year ended December 31, 2023, $0.3 million of which was recorded to additional paid-in capital and the remaining $3.0 million was expensed. Transaction costs as described above consist of directors and officers’ liability insurance cost, legal and professional fees, and other fees relating to the consummation of the Business Combination.

Immediately after giving effect to the Business Combination, there were 30,166,102 shares of common stock outstanding, 6,249,980 Public Warrants outstanding and 385,000 Private Warrants outstanding. See Note 16 – Warrants and Note 17 – Stockholders’ Deficit for more details.

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3.Discontinued Operations

The Company classifies assets as held-for-sale (a “disposal group”) in the period when all of the relevant criteria to be classified as held for sale are met. These criteria include management’s commitment to sell the disposal group in its present condition and the sale being deemed probable of being completed within one year. Assets held for sale are reported at the lower of their carrying value or fair value less cost to sell. The fair values of disposal groups are estimated using accepted valuation techniques, including indicative listing prices. The Company considers historical experience, guidance received from third parties, and all information available at the time the estimates are made to derive fair value. Any loss resulting from the measurement is recognized in the period when the held for sale criteria are met. The Company assesses the fair value of a disposal group, less any costs to sell, each reporting period it remains classified as held for sale and reports any subsequent changes as an adjustment to the carrying value of the disposal group, as long as the new carrying value does not exceed the initial carrying value of the disposal group. Assets held-for-sale are not amortized or depreciated.

During the third quarter of 2024, certain on-demand printing operations of the Company met the criteria for classification as held for sale and accordingly, were measured at the lower of their carrying value or fair value less costs to sell. The Company recorded an impairment charge of $0.1 million relating to this disposable group in impairment of goodwill in the consolidated statement of operations of the disposal group for the year ended December 31, 2024. The Company determined that this held for sale disposable group has met the criteria to be disclosed as discontinued operations, because it represents a significant strategic shift that will have a major effect on the Company’s operations and financial results.

The results of the disposable group are presented as discontinued operations in the condensed consolidated statements of operations and, as such, have been excluded from both continuing operations and segment results for all periods presented. Impairment loss was recorded during the year ended December 31, 2024, in impairment of goodwill in the consolidated statements of operations of the disposal group. Further, the Company has reclassified the assets and liabilities of the disposable group as assets and liabilities held for sale in the condensed consolidated statements of balance sheets for all periods presented. The condensed consolidated statements of cash flows are presented on a consolidated basis for both continuing operations and discontinued operations. Unless otherwise noted, references within the notes to condensed consolidated financial statements relates to continuing operations.

The financial results of the disposable group are presented as a loss from discontinued operations, net of income taxes on the Company’s condensed consolidated statements of operations. The following table presents the major components of financial results of the Company’s disposable group for the periods presented:


	Three months ended June 30,				Six months ended June 30,
(dollars in thousands)	2025		2024		2025		2024
Revenue, net	$	826	$	2,498	$	2,485	$	4,735
Cost of revenue (exclusive of depreciation and amortization)		3,069		2,465		4,799		4,800
Selling, general and administrative expenses (exclusive of depreciation and amortization)		1,233		907		1,935		1,884
Related party expense		36		36		72		72
Depreciation and amortization		34		148		66		297
Operating loss		(3,546)		(1,058)		(4,386)		(2,318)
Other expense (income), net
Interest expense, net		(0)		5		13		15
Foreign exchange losses (gains), net		(102)		108		(461)		188
Net loss from discontinued operations before income taxes		(3,443)		(1,171)		(3,939)		(2,521)
Income tax expense		—		—		—		—
Net loss from discontinued operations, net of income taxes	$	(3,443)	$	(1,171)	$	(3,939)	$	(2,521)

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As of June 30, 2025, the assets and liabilities of the disposable group are classified as current in the Company’s condensed consolidated balance sheets, as it is probable that the sale will occur within one year. The following table represents the aggregated carrying amounts of classes of assets and liabilities that are classified as discontinued operations on the condensed consolidated balance sheets for the periods presented:


	June 30,
(dollars in thousands)	2025
ASSETS
Current assets
Cash and cash equivalents	$	84
Accounts receivable, net of allowance for credit losses of $94		67
Inventories, net		300
Prepaid expenses and other current assets		330
Property, plant and equipment, net of accumulated depreciation of $4,209		455
Total current assets held for sale	$	1,236

LIABILITIES
Current liabilities
Accounts payable (including related party of $323)	$	1,375
Accrued liabilities		1,671
Accrued compensation and benefits		875
Customer deposits		240
Total current liabilities held for sale	$	4,161


	December 31,
(dollars in thousands)	2024
ASSETS
Current assets
Cash and cash equivalents	$	7
Accounts receivable, net of allowance for credit losses of $90		48
Inventories, net		422
Prepaid expenses and other current assets		465
Property, plant and equipment, net of accumulated depreciation of $3,690		436
Total current assets held for sale	$	1,378

LIABILITIES
Current liabilities
Accounts payable (including related party of $305)	$	1,170
Accrued liabilities		895
Accrued compensation and benefits		338
Customer deposits		40
Total current liabilities held for sale	$	2,443

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The following table presents significant non-cash items and capital expenditures of discontinued operations for the periods presented:


	Three months ended June 30,				Six months ended June 30,
(dollars in thousands)	2025		2024		2025		2024
Depreciation	$	34	$	148	$	66	$	298
Credit loss expense (income)		8		—		9		(8)
Unrealized foreign currency losses (gains)		(102)		108		(460)		188
Purchase of property, plant and equipment	$	—	$	—	$	—	$	94

4.New Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires an annual tabular effective tax rate reconciliation disclosure including information for specified categories and jurisdiction levels, as well as, disclosure of income taxes paid, net of refunds received, disaggregated by federal, state/local, and significant foreign jurisdictions. This ASU is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact that adopting this standard will have on its consolidated financial statements.

In November 2024, the FASB issued ASU 2024-04, Debt-Debt with Conversions and Other Option (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments, which amends ASC470-20 to clarify the requirements related to accounting for the settlement of a debt instrument as an induced conversion. This ASU is intended to improve the relevance and consistency in application of the induced conversion guidance in Subtopic 470-20 for (a) convertible debt instruments with cash conversion features and (b) debt instruments that are not currently convertible. This ASU is effective for all entities for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, with early adoption permitted. The Company is currently evaluating the impact that adopting this standard will have on its consolidated financial statements.

In November 2024, the FASB issued ASC 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which is intended to provide more detailed information about specified categories of expenses (purchases of inventory, employee compensation, depreciation and amortization) included in certain expense captions presented on the consolidated statement of operations. This new standard is effective for fiscal years beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The amendments may be applied either (1) prospectively to financial statements issued for periods after the effective date of this ASU or (2) retrospectively to all prior periods presented in the consolidated financial statements. The Company is currently assessing the impact this ASU will have on the consolidated financial statements and footnote disclosures.

5.Summary of Significant Accounting Policies

The information presented below supplements the “Basis of Presentation and Summary of Significant Accounting Policies” information presented in the 2024 Form 10-K.

Stock-Based Compensation

The Company accounts for all equity-classified awards under stock-based compensation plans at their “fair value.” This fair value is measured at the fair value of the awards at the grant date and recognized as compensation expense on a straight-line basis over the vesting period. The fair value of the awards on the grant date is determined using the stock price on the respective grant date in the case of restricted stock units and using an option pricing model in the case of stock options. The Company accounts for forfeitures as they occur. The expense resulting from share-based payments is recorded in selling, general and administrative expense in the condensed consolidated statements of operations.

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Revenue Recognition

The Company accounts for revenue in accordance with ASC 606, Revenue from Contracts with Customers. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in ASC 606. Revenue is measured as the amount of consideration that is expected to be received in exchange for transferring goods or providing services. The contract transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. All of the Company’s material sources of revenue are derived from contracts with customers, primarily relating to the provision of business and transaction processing services and sales of recurring software licenses and professional services within each of the Company’s segments. The Company does not have any significant extended payment terms, as payment for invoices issued is received shortly after goods are delivered or services are provided.

Nature of Services

The primary performance obligations are to stand ready to provide various forms of business processing services, consisting of a series of distinct services that are substantially the same and have the same pattern of transfer over time, and accordingly are combined into a single performance obligation. The Company’s promise to its customers is typically to perform an unknown or unspecified quantity of tasks and the consideration received is contingent upon the customers’ use (i.e., number of transactions processed, requests fulfilled, etc.); as such, the total transaction price is variable. The variable fees are allocated to the single performance obligation charged to the distinct service period in which the Company performs the service.

Revenue from the sale of software licenses is recognized as a single performance obligation at the point in time that the software license is delivered to the customer. Perpetual licenses or noncancelable licenses are granted for a non-refundable fee, which are recognized at a point in time. No significant obligations or contingencies exist with regard to delivery, customer acceptance or rights of return at the time revenue is recognized. Professional services revenue consists of implementation services for new customers, or implementations of new products for existing customers. Professional services are typically sold on a time-and-materials basis and billed monthly based on actual hours incurred.

Revenue from the sale of hardware solutions is recognized on a point in time basis and related maintenance are recognized ratably over the contractual term.

Disaggregation of Revenues

The following tables disaggregate revenue from contracts by geographic region for the three and six months ended June 30, 2025 and 2024:


	Three months ended June 30,				Six months ended
(dollars in thousands)	2025		2024		2025		2024
France	$	12,106	$	12,773	$	24,831	$	27,001
Germany		10,379		8,514		21,001		18,807
United Kingdom		11,351		7,182		20,057		14,738
Sweden		3,137		3,105		6,598		7,084
Other		2,458		1,960		4,475		3,951
Total Revenue, net	$	39,431	$	33,534	$	76,962	$	71,581

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Contract Balances

The following table presents contract assets, contract liabilities and contract costs recognized at June 30, 2025 and December 31, 2024:


	June 30,			December 31,
(dollars in thousands)	2025		2024
Accounts receivable, net	$	33,610	$	19,810
Deferred revenues		6,565		6,870
Customer deposits		148		277
Costs to obtain and fulfill a contract	$	—	$	—

Accounts receivable, net includes $8.0 million and $6.5 million as of June 30, 2025 and December 31, 2024, respectively, representing amounts not billed to customers. Unbilled receivables are accrued and represent work performed in accordance with the terms of contracts with customers.

Deferred revenues relate to payments received in advance of performance under a contract. A significant portion of this balance relates to maintenance contracts or other service contracts where the Company received payments for upfront conversions or implementation activities which do not transfer a service to the customer but rather are used in fulfilling the related performance obligations that transfer over time. The advance consideration received from customers is deferred over the contract term. The Company recognized revenue of $1.5 million and $4.5 million during the three and six months ended June 30, 2025, respectively, that had been deferred as of December 31, 2024. The Company recognized revenue of $1.5 million and $3.4 million during the three and six months ended June 30, 2024, respectively, that had been deferred as of December 31, 2023.

Costs incurred to obtain and fulfill contracts are deferred and presented as part of intangible assets, net and expensed on a straight-line basis over the estimated benefit period. These costs represent incremental external costs or certain specific internal costs that are directly related to the contract acquisition or fulfillment and can be separated into two principal categories: contract commissions and fulfillment costs. Applying the practical expedient in ASC 340-40-25-4, the incremental costs of obtaining contracts are recognized as an expense when incurred if the amortization period would have been one year or less. These costs are included in selling, general and administrative expenses. The effect of applying this practical expedient was not material.

Customer deposits consist primarily of amounts received from customers in advance for postage. These advanced postage deposits are used to cover the costs associated with postage, with the corresponding postage revenue being recognized as services are performed.

Performance Obligations

At the inception of each contract, the Company assesses the goods and services promised in the Company’s contracts and identifies each distinct performance obligation. The majority of the Company’s contracts have a single performance obligation, as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts. For the majority of the Company’s business and transaction processing service contracts, revenues are recognized as services are provided based on an appropriate input or output method, typically based on the related labor or transactional volumes.

Certain of the Company’s contracts have multiple performance obligations, including contracts that combine software implementation services with post-implementation customer support. For contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation using the best estimate of the standalone selling price of each distinct good or service in the contract. The primary method used to estimate standalone selling price is the expected cost plus a margin approach, under which the Company estimates the expected costs of satisfying a performance obligation and adds an appropriate margin for that distinct good or service. The adjusted market approach is also used whereby the Company estimates the price that customers in the market would be willing to pay. In assessing whether to allocate variable consideration to a specific part of the contract, the Company

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considers the nature of the variable payment and whether it relates specifically to its efforts to satisfy a specific part of the contract. Certain of the Company’s software implementation performance obligations are satisfied at a point in time, typically when customer acceptance is obtained.

When evaluating the transaction price, the Company analyzes, on a contract-by-contract basis, all applicable variable considerations. The nature of the Company’s contracts gives rise to variable consideration, including volume discounts, contract penalties, and other similar items that generally decrease the transaction price. These amounts are estimated based on the expected amount to be provided to customers and reduce revenues recognized. The Company does not anticipate significant changes to its estimates of variable consideration.

Reimbursements from customers, such as postage costs, are included in revenue, while the related costs are included in cost of revenue.

Transaction Price Allocated to the Remaining Performance Obligations

In accordance with optional exemptions available under ASC 606, the Company did not disclose the value of unsatisfied performance obligations for (a) contracts with an original expected length of one year or less, and (b) contracts for which variable consideration relates entirely to an unsatisfied performance obligation, which comprise the majority of the Company’s contracts. The Company will recognize the revenue from deferred revenue as of June 30, 2025 in each of the future periods below:

Estimated Remaining Fixed Consideration for Unsatisfied Performance Obligations


(dollars in thousands)
Remainder of 2025	$	6,256
2026		239
2027		70
Total	$	6,565

Net Loss per Share

Earnings per share (“EPS”) is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted EPS gives effect to the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock, using the more dilutive of the two-class method and if-converted method in the period of earnings. The two-class method is an earnings allocation method that determines earnings per share (when there are earnings) for common stock and participating securities. The if-converted method assumes all convertible securities are converted into common stock. Diluted EPS excludes all dilutive potential shares of common stock if their effect is anti-dilutive.

As the Company experienced net losses for the periods presented, the Company did not include the effect of 6,634,980 shares of common stock issuable upon exercise of 6,634,980 warrants sold in the IPO and Private Placement and issued in connection with completion of the Business Combination, or the effect of the aggregate number of shares issuable pursuant to outstanding restricted stock units and options (1,052,386 as of June, 2025) in the calculation of diluted loss per share for the three and six months ended June 30, 2025 and 2024, because their effects were anti-dilutive.

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The components of basic and diluted EPS are as follows:


	Three months ended June 30,				Six months ended
(dollars in thousands, except share and per share amounts)	2025		2024		2025		2024
Net loss from continuing operations attributable to common stockholders (A)	$	(3,446)	$	(3,552)	$	(7,301)	$	(4,410)
Net loss from discontinued operations attributable to common stockholders (B)		(3,443)		(1,171)		(3,938)		(2,521)
Net loss attributable to common stockholders (C)	$	(6,889)	$	(4,722)	$	(11,239)	$	(6,930)

Weighted average common shares outstanding – basic and diluted (D)		35,906,579		30,166,102		33,417,740		30,166,102
Loss Per Share:
Basic and diluted - continuing operations (A/D)	$	(0.10)	$	(0.12)	$	(0.22)	$	(0.15)
Basic and diluted - discontinued operations (B/D)		(0.10)		(0.04)		(0.12)		(0.08)
Basic and diluted (C/D)	$	(0.19)	$	(0.16)	$	(0.34)	$	(0.23)

6.Inventories

Inventories, net consist of the following:


	June 30,		December 31,
(dollars in thousands)	2025		2024
Finished goods	$	5,860	$	5,585
Allowance for obsolescence		(1,818)		(1,762)
Total inventories, net	$	4,042	$	3,823

Finished goods inventory includes $1.8 million and $1.8 million of allowance for obsolescence as of June 30, 2025 and December 31, 2024, respectively. The Company allowance for obsolescence is based on a policy developed by historical experience and management judgment.

7.Accounts Receivable

Accounts receivable, net consist of the following:


	June 30,		December 31,
(dollars in thousands)	2025		2024
Billed receivables	$	26,511	$	14,554
Unbilled receivables		8,035		6,454
Less: Allowance for credit losses		(936)		(1,198)
Total accounts receivable, net	$	33,610	$	19,810

Unbilled receivables represent balances recognized as revenue that have not been billed to the customer. The Company allowance for doubtful accounts is based on a policy developed by historical experience and management judgment. Adjustments to the allowance for credit losses may occur based on market conditions or specific client circumstances.

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The following table describes the changes in the allowance for expected credit losses for the three months ended June 30, 2025 and 2024 (all related to accounts receivables):


	June 30,
(dollars in thousands)	2025		2024
Balance at January 1, of the allowance for expected credit losses	$	1,198	$	1,183
Change in the provision for expected credit losses for the period		(262)		184
Balance at June 30, of the allowance for expected credit losses	$	936	$	1,367

8.Property, Plant and Equipment, Net

Property, plant, and equipment, which include assets recorded under finance leases, are stated at cost less accumulated depreciation, and amortization, and consist of the following:


	Expected Useful Lives	June 30,		December 31,
(dollars in thousands)	(in Years)	2025		2024
Buildings and improvements	7 – 40	$	9,758	$	8,770
Leasehold improvements	Shorter of life of improvement or lease term		797		712
Machinery and equipment	5 – 15		8,780		6,935
Computer equipment and software	3 – 8		29,465		25,663
Furniture and Fixtures	5 – 15		9,100		7,855
Finance lease right-of use assets	Shorter of life of the asset or lease term		1,877		1,662
			59,777		51,596
Less: Accumulated depreciation and amortization			(46,247)		(40,325)
Total property, plant and equipment, net		$	13,530	$	11,272

Depreciation expense related to property, plant and equipment was $0.5 million and $0.6 million for the three months ended June 30, 2025 and 2024, respectively and $1.0 million and $1.2 million for the six months ended June 30, 2025 and 2024, respectively.

9.Intangible Assets and Goodwill

Intangible Assets

Intangible assets are stated at cost or acquisition-date fair value less accumulated amortization and consists of the following:


	Weighted
	Average	June 30, 2025
	Remaining	Gross
	Useful Life	Carrying		Accumulated		Intangible Asset,
(dollars in thousands)	(in Years)	Amount (a)		Amortization		net
Customer relationships	1.5	$	3,346	$	(2,738)	$	608
Internally developed software	4.0		774		(112)		662
Total intangibles, net		$	4,933	$	(3,663)	$	1,270

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	Weighted
	Average	December 31, 2024
	Remaining	Gross
	Useful Life	Carrying		Accumulated		Intangible Asset,
(dollars in thousands)	(in Years)	Amount (a)		Amortization		net
Customer relationships	2.0	$	2,960	$	(2,241)	$	719
Internally developed software	4.5		432		(30)		402
Total intangibles, net		$	4,111	$	(2,990)	$	1,121

(a)	Amounts include intangibles acquired in business combinations and asset acquisitions

Aggregate amortization expense related to intangibles was $0.1 million and $0.2 million for the three months ended June 30, 2025 and 2024, respectively, and $0.3 million and $0.4 million for the six months ended June 30, 2025 and 2024, respectively.

Estimated intangibles amortization expense for the next five years consists of the following:


	Estimated
	Amortization
(dollars in thousands)	Expenses
Remainder of 2025	$	287
2026		569
2027		165
2028		165
2029 and thereafter		84
Total	$	1,270

Goodwill

The Company’s operating segments are significant strategic business units that align its products and services with how it manages its business, approach the markets and interacts with customers. The Company is organized into two segments: Bills and Payments and Technology (See Note 20 – Segment Information).

Goodwill by reporting segment consists of the following:


	Balances at								Currency		Balances at
	January 1,								Translation		June 30,
(dollars in thousands)	2025		Additions		Disposals		Impairments		Adjustments		2025
Bills and Payments	$	9,499	$	—	$	—	$	—	$	1,198	$	10,697
Technology		12,167		—		—		—		1,497		13,664
Total	$	21,666	$	—	$	—	$	—	$	2,695	$	24,361


	Balances at								Currency		Balances at
	January 1,								Translation		December 31,
(dollars in thousands)	2024		Additions		Disposals		Impairments		Adjustments		2024
Bills and Payments	$	9,971	$	—	$	—	$	—	$	(472)	$	9,499
Technology		12,852		—		—		—		(685)		12,167
Total	$	22,823	$	—	$	—	$	—	$	(1,157)	$	21,666

10.Debt

Secured Borrowing Facility

On September 15, 2023, the relevant entities entered into an amendment to the Secured Borrowing Facility (the “Amended Factoring Agreement”) to convert the existing arrangement into a non-recourse factoring program wherein an unrelated third party (the “Factor”) shall provide financing to certain subsidiaries of the Company by purchase of

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certain approved and partially approved accounts receivables (as defined in the Amended Factoring Agreement) up to a maximum amount of €15.0 million while assuming the risk of non-payment on the purchased accounts receivables up to the level of approval. The relevant entities shall have no continuing involvement in the transferred accounts receivable, other than collection and administrative responsibilities and, once sold, the accounts receivable shall no longer be available to satisfy creditors of the relevant entities.

The Company accounted for the transactions under the Amended Factoring Agreement as a sale under ASC 860, Transfers and Servicing, and treats it as an off-balance sheet arrangement. Net funds received from the transfers reflect the face value of the account less a fee, which is recorded as an increase to cash and a reduction to accounts receivable outstanding in the condensed consolidated balance sheets. The Company reports the cash flows attributable to the sale of account receivables to the Factor and the cash receipts from collections made on behalf of and paid to the Factor under the Amended Factoring Agreement, on a net basis as trade accounts receivables in cash flows from operating activities in the Company’s condensed consolidated statements of cash flows.

As of June 30, 2025, the Company’s outstanding factored accounts receivable totaled approximately $7.5 million pursuant to the Amended Factoring Agreement, representing the face value of the invoices. The Company recognizes factoring costs upon disbursement of funds. The Company incurred a loss on sale of accounts receivables including expenses pursuant to the Amended Factoring Agreement totaling approximately $0.1 million and $0.3 million for the three and six months ended June 30, 2025, respectively, which is presented in selling, general and administrative expenses (exclusive of depreciation and amortization) on the condensed consolidated statements of operations and comprehensive loss.

2024 Facilities Agreement

In June 2024, XBP Europe, Inc. a wholly-owned subsidiary of the Company, together with certain other subsidiaries (the “XBP Group”), entered into a Facilities Agreement (the “2024 Facilities Agreement”) with HSBC for a £15.0 million and €10.5 million Secured Credit Facility consisting of (i) a single draw, secured Term Loan A facility in an aggregate principal amount of £3.0 million (the “2024 Term Loan A Facility”), (ii) a single draw, secured Term Loan B facility in an aggregate principal amount of €10.5 million (the “2024 Term Loan B Facility”, collectively with the 2024 Term Loan A Facility, the “2024 Term Loan Facilities”) and (iii) a multi-draw, multi-currency secured revolving credit facility in an aggregate principal amount of £12.0 million (the “2024 Revolving Credit Facility”), and, together with the 2024 Term Loan Facilities, (the “2024 Senior Credit Facilities”). The 2024 Term Loan Facilities mature on June 26, 2028 and the 2024 Revolving Credit Facility matures on June 26, 2027, with certain extension rights at the discretion of HSBC. An additional £14.0 million of credit under the 2024 Revolving Credit Facility may be made available at HSBC’s discretion for specific purposes as per the 2024 Facilities Agreement.

The Company used the 2024 Term Loan Facilities to repay in full all outstanding indebtedness under the 2019 Credit Agreement, 2020 Credit Agreement and 2022 Committed Facility Agreement. The Company incurred $1.5 million in debt issuance costs related to the 2024 Facilities Agreement.

The 2024 Facilities Agreement contains financial covenants including, but not limited to, (i) requiring the maintenance of a consolidated total leverage ratio of not greater than 2.50 to 1.00 (with step-downs to (a) 2.25 to 1.00 starting January 1, 2025 and (b) 2.00 to 1.00 starting January 1, 2026); (ii) a cash flow coverage ratio of at least 1.10:1.00; and (iii) a consolidated interest coverage ratio of not less than 4.00 to 1.00.

The 2024 Facilities Agreement and indenture governing the 2024 Secured Credit Facilities contains certain affirmative and negative covenants limiting on the ability of the XBP Group to effect mergers and change of control events as well as certain other limitations, including limitations on (i) incurrence of additional indebtedness or liens, (ii) dispositions of assets, (iii) substantial changes of the general nature of the business, (iv) entering into restrictive agreements, (v) making certain investments, loans, advances, guarantees and acquisitions, (vi) prepaying certain indebtedness, (vii) the declaration and payment of dividends or other restricted payments, (viii) engaging in transactions with affiliates, or (ix) amending certain material documents.

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Except as otherwise provided by applicable law, all obligations under the 2024 Facilities Agreement are jointly and severally unconditionally guaranteed by each member of the XBP Group.

Borrowings under the 2024 Term Loan A Facility, the 2024 Term Loan B Facility and 2024 Revolving Credit Facility bear interest at a rate per annum equal to the SONIA plus the applicable margin of 3.25%, Euro Interbank Offered Rate (“EURIBOR”) plus the applicable margin of 3.25% and Reference Rate plus the applicable margin of 3.25%, respectively. “Reference Rate” for any period means (i) Secured Overnight Financing Rate (“SOFR”) for funds extended in U.S. Dollars; (ii) the EURIBOR, for funds extended in Euros; (iii) the SONIA, for funds extended in Pounds Sterling; and the Stockholm Interbank Offered Rate (“STIBOR”) for funds extended in Swedish Krona.

As of June 30, 2025, the outstanding balance of the Term Loan A Facility, the Term Loan B Facility, and the Revolving Credit Facility was approximately $3.5 million, $10.5 million, and $16.7 million, respectively. As of December 31, 2024, the outstanding balance of the Term Loan A Facility, the Term Loan B Facility, and the Revolving Credit Facility was approximately $3.4 million, $9.8 million, and $14.7 million, respectively.

As of June 30, 2025 and December 31, 2024, the Revolving Working Capital Loan Facility had an outstanding balance of $2.9 million, and $2.2 million, respectively.

During the three months ended June 30, 2025, the Company repaid $0 of outstanding principal amount under the 2024 Term Loan A Facility and 2024 Term Loan B Facility, respectively.

During the six months ended June 30, 2025, the Company repaid $0.2 million and $0.6 million of outstanding principal under the 2024 Term Loan A Facility and 2024 Term Loan B Facility, respectively.

The outstanding principal amount of the 2024 Term Loan A Facility shall be repaid in fifteen (15) equal quarterly installments of £150 thousands commencing September 30, 2024, with the remaining outstanding principal amount of £750k payable at maturity along with accrued and unpaid interest. The outstanding principal amount of the 2024 Term Loan B Facility shall be repaid in fifteen (15) equal quarterly installments of €525 thousands commencing September 30, 2024, with the remaining outstanding principal amount of €2.6 million payable at maturity along with accrued and unpaid interest.

The Company may, at any time, prepay the principal of the 2024 Senior Credit Facilities. Each prepayment shall be accompanied by the payment of accrued interest, without any premium or penalty. However, the Company is limited to a maximum of four voluntary prepayments of the 2024 Revolving Credit Facility within any consecutive twelve-month period.

As of June 30, 2025, the XBP Group was in compliance with all affirmative and negative covenants under the 2024 Facilities Agreement, including any financial covenants, pertaining to its financing arrangements.

Debt Outstanding

As of June 30, 2025, and December 31, 2024, the following debt instruments were outstanding:


	June 30,		December 31,
(dollars in thousands)	2025		2024
2024 Term Loan A Facility⁽¹⁾	$	3,322	$	3,198
2024 Term Loan B Facility⁽²⁾		9,957		9,276
2024 Revolving Credit Facility⁽³⁾		16,193		14,218
Revolvers⁽⁴⁾		2,876		2,233
Total debt		32,348		28,924
Less: Current portion of long-term debt		6,755		4,958
Long-term debt, net of current maturities	$	25,593	$	23,966

(1)	Net of unamortized debt issuance costs of $0.2 million as of June 30, 2025.

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(2)	Net of unamortized debt issuance costs of $0.5 million as of June 30, 2025.

(3)	Net of unamortized debt issuance costs of $0.5 million as of June 30, 2025.

(4)	Includes $2.9 million and $2.2 million of outstanding balance under working capital loan as of June 30, 2025 and December 31, 2024, respectively.

As of June 30, 2025, maturities of long-term debt were as follows:


(dollars in thousands)	Maturity
Remainder of 2025	$	5,343
2026		3,289
2027		3,290
2028		21,595
2029 and thereafter		—
Total debt		33,517
Less: Unamortized discount and debt issuance costs		1,169
Total maturities of long-term debt	$	32,348

11.Income Taxes

The Company applies an estimated annual effective tax rate (“ETR”) approach for calculating tax provision for interim periods, as required under GAAP. The Company recorded an income tax expense of $0.5 million and $0.5 million for the three months ended June 30, 2025 and 2024, respectively, and $1.3 million and $1.0 million for the six months ended June 30, 2025 and 2024, respectively, from continuing operations.

The Company’s ETR from continuing operations of (17.5)% and (21.2)% for three and six months ended June 30, 2025 differed from the expected U.S. statutory tax rate of 21.0% and was primarily impacted by uncertain tax benefits, permanent tax adjustments, foreign tax rates that differ from the U.S. federal statutory rate, valuation allowances on a portion of the Company’s foreign deferred tax assets that are not more likely than not to be realized, and remeasurement of existing uncertain tax positions.

For the three and six months ended June 30, 2024, the Company’s ETR from continuing operations of (18.0)% and (29.4)%, respectively, differed from the expected U.S. statutory tax rate of 21.0%, and was primarily impacted by permanent tax adjustments, foreign tax rates that differ from the U.S. federal statutory rate, and valuation allowances on a portion of the Company’s foreign deferred tax assets that are not more likely than not to be realized.

During the six months ended June 30, 2025, the Company's liability for unrecognized tax benefits (including interest and penalties) increased by $267 thousand. This increase is primarily due to accrued interest during the year and foreign currency remeasurements.

The Organization for Economic Co-operation and Development reached agreement on Pillar Two Model Rules (“Pillar Two”) to implement a minimum 15.0% tax rate on certain multinational companies. Participating countries are in various stages of proposing and enacting tax laws to implement the Pillar Two framework. We determined these rules did not have a material impact on our taxes for the three and six months ended June 30, 2025 and will continue to evaluate the impact of these proposals and legislative changes as new guidance emerges.

As of June 30, 2025, there were no material changes to either the nature or the amounts of the uncertain tax positions previously determined for the year ended December 31, 2024.

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12.Employee Benefit Plans

U.K. Pension Plan

Two of the Company’s subsidiaries in the United Kingdom provide pension benefits to certain retirees and eligible dependents. Employees eligible for participation included all full-time regular employees who were more than three years from retirement prior to October 2001. A retirement pension or a lump-sum payment may be paid dependent upon length of service at the mandatory retirement age. The Company accrues the cost of these benefits over the service lives of the covered employees based on an actuarial calculation. The Company uses a December 31 measurement date for this plan. No new employees are registered under this plan and the pension obligation for the existing participants of the plan is calculated based on actual salary of the participants at the earlier of two dates, the participants leaving the Company or March 31, 2015. The expected rate of return assumptions for plan assets relate solely to the UK plan and are based mainly on historical performance achieved over a long period of time (15 to 20 years) encompassing many business and economic cycles.

German Pension Plan

XBP Europe’s subsidiary in Germany, Exela Technologies ECM Solutions GmbH, provides pension benefits to certain retirees. Employees eligible for participation include all employees who started working for the Company or its predecessors prior to September 30, 1987 and have finished a qualifying period of at least 10 years. The Company accrues the cost of these benefits over the service lives of the covered employees based on an actuarial calculation. The Company uses a December 31 measurement date for this plan. The German pension plan is an unfunded plan and therefore has no plan assets. No new employees are registered under this plan and the participants who are already eligible to receive benefits under this plan are no longer employees of the Company.

Norway Pension Plan

The Company’s subsidiary in Norway provides pension benefits to eligible retirees and eligible dependents. Employees eligible for participation include all employees who were more than three years from retirement prior to March 2018. The Company accrues the cost of these benefits over the service lives of the covered employees based on an actuarial calculation. The Company uses a December 31 measurement date for this plan. No new employees are registered under this plan and the pension obligation for the existing participants of the plan is calculated based on actual salary of the participants at the earlier of two dates, the participant’s leaving the Company or April 30, 2018.

Asterion Pension Plan

In 2018, Exela Technologies Holding GmbH, acquired the obligation to provide pension benefits to eligible retirees and eligible dependents. Employees eligible for participation included all full-time regular employees who were more than three years from retirement prior to July 2003. A retirement pension or a lump-sum payment may be paid dependent upon length of service at the mandatory retirement age. The Company accrues the cost of these benefits over the service lives of the covered employees based on an actuarial calculation. The Company uses a December 31 measurement date for this plan. No new employees are registered under this plan and the pension obligation for the existing participants of the plan is calculated based on actual salary of the participants at the earlier of two dates, the participants leaving the Company or April 10, 2018.

Tax Effect on Accumulated Other Comprehensive Loss

As of June 30, 2025 and December 31, 2024, the Company recorded actuarial gains of $0.2 million and $0.2 million, respectively, which is net of a deferred tax benefit of $2.0 million for each period.

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Pension and Postretirement Expense

The components of the net periodic benefit cost are as follows:


	Three months ended June 30,				Six months ended June 30,
(dollars in thousands)	2025		2024		2025		2024
Service cost	$	9	$	9	$	17	$	18
Interest cost		836		739		1,623		1,483
Expected return on plan assets		(856)		(726)		(1,663)		(1,455)
Amortization
Amortization of net loss		463		305		899		612
Net periodic benefit cost	$	452	$	327	$	876	$	658

The Company records pension interest cost within interest expense, net. Expected return on plan assets, amortization of prior service costs, and amortization of net losses are recorded within pension income, net. Service cost is recorded within cost of revenue.

Employer Contributions

XBP Europe’s funding of employer contributions is based on governmental requirements and differs from those methods used to recognize pension expense. The Company made contributions of $0.2 million and $0.9 million to its pension plans during the three and six months ended June 30, 2025 and 2024, respectively, and $0 million and $0.6 million during the three and six months ended June 30, 2024, respectively. The Company is expecting to fund the pension plans with the required contributions for 2025 based on current plan provisions.

13.Commitments and Contingencies

Litigation

The Company is, from time to time, involved in certain legal proceedings, inquiries, claims and disputes, which arise in the ordinary course of business. Although management cannot predict the outcomes of these matters, management does not believe any of these actions that are currently pending will have a material, adverse effect on our condensed consolidated balance sheets, condensed consolidated statements of operations or condensed consolidated statements of cash flows.

Company Subsidiary Litigation

A group of 71 former employees brought a claim against a subsidiary of the Company related to their dismissal resulting from the closure of two production sites in France in 2020. The employees filed complaints with the Labor Court on June 9, 2022. Conciliation hearings at the Labor Court were held on September 27, 2022, December 13, 2022, March 7, 2023, September 5, 2023, November 14, 2023, December 5, 2023, and February 5, 2024.

In March 2023, 67 claimants (after the in-principle settlement was agreed with the first 4 claimants) filed an application for summary proceedings in respect of part of the claim for a total claim of $1.1 million. The summary proceedings hearing was held on April 11, 2023, and the court issued its decision on May 9, 2023, upholding all of the plaintiffs’ claims for a total amount of $1.1 million. However, the court’s decision did not increase the Company’s anticipated exposure for the overall claim.

The Company has appealed the decision (and paid the amount of $1.1 million to 66 of the 67 claimants, and a settlement agreement in principle was subsequently reached with one further claimant on November 10, 2023 pending the appeal). Since the majority of the claimants concluded settlement agreements with the Company, the appeal proceedings pertain only to 15 remaining claimants who have not settled. The next hearing, pertaining only to the remaining claimants who have not concluded settlement agreements with the Company, is scheduled for September 8, 2025.

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In addition to the above, the substantive hearing was held on February 16, 2024, and a decision was made on June 28, 2024. The Company has appealed the decision from that substantive hearing.

The Company reached a number of settlements with 56 claimants prior to the court’s June 2024 decision and approximately $1.8 million was paid to such claimants in addition to the amounts paid as part of the summary proceedings. The court awarded $1.2 million to the claimants who had not settled before the court’s decision and, after the deduction of the amounts already paid to such claimants, $1.0 million remained to be paid by the Company. The Company also became responsible for up to three months’ unemployment allowance paid to these claimants by the unemployment fund. The Company has appealed the decision and continued settlement negotiations. The Company accrued $0.8 million and $1.0 million in accrued liabilities on the condensed consolidated balance sheets as of June 30, 2025 and December 31, 2024, respectively, based on the estimate of the range of possible losses. On May 21, 2025 the Company agreed in principle to settle with the remaining 15 claimants and to pay them $0.8 million.

Contract-Related Contingencies

The Company has certain contingent obligations that arise in the ordinary course of providing services to its customers. These contingencies are generally the result of contracts that require the Company to comply with certain performance measurements or the delivery of certain services to customers by a specified deadline. The Company believes the adjustments to the transaction price, if any, under these contract provisions will not result in a significant revenue reversal or have a material adverse effect on the Company’s condensed consolidated balance sheets, condensed consolidated statements of operations, condensed consolidated statement of comprehensive loss or condensed consolidated statements of cash flows.

14.Fair Value Measurement

Fair Value of Financial Instruments

The carrying amount of assets and liabilities including cash and cash equivalents, accounts receivable, accounts payable and current portion of long-term debt approximated their fair value as of June 30, 2025 and December 31, 2024, due to the relative short maturity of these instruments. The fair values of the Company’s loans and receivables under the factoring arrangement entered into by subsidiaries of the Company are equal to the carrying values.

As of June 30, 2025 and December 31, 2024, the Company determined the fair value of Private Warrants’ liability as $9 thousands and $7 thousands, respectively, included in the other long-term liabilities in the condensed consolidated balance sheets under Level 3 fair value measurement using the Black-Scholes option pricing model.

The significant unobservable inputs used in the fair value of the Private Warrants liability are assumptions related to the inputs of exercise price, fair value of the underlying common stock, risk-free interest rate, expected term, expected volatility, and expected dividend yield. Significant increases (decreases) in the discount rate would have resulted in a lower (higher) fair value measurement. Significant increases (decreases) in the forecasted financial information would have resulted in a higher (lower) fair value measurement. For all significant unobservable inputs used in the fair value measurement of the Level 3 liabilities, a change in one of the inputs would not necessarily result in a directionally similar change in the fair value.

The following table reconciles the beginning and ending balances of net assets and liabilities classified as Level 3:


	June 30,		December 31,
(dollars in thousands)	2025		2024
Balance at beginning of period	$	7	$	50
Change in the fair value of the private warrants liability		2		(43)
Balance at end of period	$	9	$	7

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15.Stock-Based Compensation

XBP Europe 2024 Stock Incentive Plan

On June 13, 2024, the stockholders of XBP Europe approved and adopted XBP Europe’s 2024 Stock Incentive Plan (the “XBP 2024 Equity Plan”) at XBP Europe’s 2024 Annual Meeting of Stockholders. Under the XBP 2024 Equity Plan, subject to adjustment for certain changes in capitalization or other corporate events, XBP Europe is authorized to issue up to 5,520,270 shares of common stock pursuant to equity-based awards, which may be granted to eligible participants in furtherance of XBP Europe’s broader compensation strategy and philosophy. Awards granted under the 2024 Equity Plan will be granted upon terms approved by XBP Europe’s Compensation Committee and set forth in an award agreement or other evidence of an award.

Pursuant to XBP 2024 Equity Plan, on February 13, 2025, the Compensation Committee of the Company approved the grant of 1,967,449 restricted stock units (“RSUs”) and 30,951 stock options to eligible employees and directors of the Company.

The Compensation Committee of the Company, using its discretionary authority under the XBP 2024 Equity Plan to accelerate the vesting of certain awards, approved accelerated vesting of 3,873,183 RSUs and 103,951 stock options then outstanding on April 4, 2025, March 20, 2025, and March 31, 2025, resulting in modification of the awards. The Company recognized compensation cost for this accelerated vesting of awards of $0.4 million for the three months ended June 30, 2025 and $3.8 million for the three months ended March 31, 2025. The Company withheld 170,946 shares with value equivalent to the employee’s minimum statutory obligation for applicable income and other employment taxes. The total shares withheld were based on the value of the RSUs on their vesting date as determined by the Company’s closing stock price.

Restricted Stock Unit

Restricted stock unit awards generally vest ratably over a less than a year to three (3) year period. Restricted stock units are subject to forfeiture if employment or service terminates prior to vesting and are expensed ratably over the vesting period.

A summary of restricted stock unit activities under the XBP 2024 Equity Plan for the six months ended June 30, 2025 is summarized in the following table:


				Average
		Weighted		Remaining
	Number	Average Grant		Contractual Life
	of Units	Date Fair Value		(Years)
Outstanding Balance as of December 31, 2024	3,325,329	$	1.24	2.19
Shares forfeited	—		—	—
Shares vested	(4,069,446)		1.27	—
Shares withheld	(170,946)		1.36	—
Addition in the quarter	1,967,449		1.33	2.33
Outstanding Balance as of June 30, 2025	1,052,386	$	1.29	2.33

Options

Under the XBP 2024 Equity Plan, stock options are granted at a price per share not less than 100% of the fair market value per share of the underlying stock at the grant date. The vesting period for each option award is established on the grant date, and the options generally expire ten (10) years from the grant date. Stock options granted under the 2024 Plan generally require no less than a four (4) year ratable vesting period. Stock option activity for the six months ended June 30, 2025 is summarized in the following table:

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						Average
		Weighted		Weighted		Remaining
		Average Grant		Average		Vesting Period
	Outstanding	Date Fair Value		Exercise Price		(Years)
Outstanding Balance as of December 31, 2024	95,000	$	0.58	$	1.31	3.08
Exercised	—		—		—	—
Forfeited	(22,000)		—		—	—
Addition in the quarter	30,951		0.16		1.24	3.88
Vested	(103,951)		0.45		1.29	—
Outstanding Balance as of June 30, 2025⁽¹⁾	—		—		—	—

(1)	Exercise prices of all of the outstanding options as of June 30, 2025 were higher than the market price of the shares of the Company. Therefore, aggregate intrinsic value was zero.

As of June 30, 2025, there was $0.9 million of total unrecognized compensation expense related to non-vested restricted stock unit awards under the XBP 2024 Equity Plan, which will be recognized over the respective service period. Stock-based compensation expense is recorded within selling, general, and administrative expenses.

16.Warrants

As of June 30, 2025, the Company had the following common stock warrants outstanding:


	Warrants	Exercise Price	Issuance Date	Expiration
Private Placement Warrants	135,000	11.50	03/11/2021	11/29/2028
Forward Purchase Warrants	250,000	11.50	03/11/2021	11/29/2028
Public Warrants	6,249,980	11.50	03/11/2021	11/29/2028
Total	6,634,980

Public Warrants

The Public Warrants qualify for the derivative scope exception under ASC 815 and are therefore classified as equity on the condensed consolidated balance sheets. They may only be exercised for a whole number of shares at a price of $11.50. No fractional shares will be issued upon exercise of the Public Warrants. The Public Warrants are currently exercisable and will expire five years from the completion of the Business Combination or earlier upon redemption or liquidation.

The Company may redeem the outstanding Public Warrants if the price per share of common stock equals or exceeds $18.00 (except as described with respect to the Private Placement Warrants and Forward Purchase Warrants):

●

in whole and not in part;

●

at a price of $0.01 per Warrant;

●

upon not less than 30 days’ prior written notice of redemption to each warrantholder; and

●

if, and only if, the closing price of the Common stock equals or exceeds $18.00 per share (as adjusted) for any of 20 trading days within a 30-trading day period commencing once the Warrants become exercisable and ending three trading days before the Company sends the notice of redemption to the warrantholders.

If and when the Public Warrants become redeemable by us, we may not exercise our redemption right if the issuance of shares of Common Stock upon exercise of the Public Warrants is not exempt from registration or qualification under applicable state blue sky laws or we are unable to affect such registration or qualification.

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Private Placement and Forward Purchase Warrants

The Private Placement and Forward Purchase Warrants (together “Private Warrants”) meet the definition of a derivative; however, they don’t meet the equity scope exception in ASC 815 and are therefore classified as a liability. The Private Warrants are identical to the Public Warrants, except that so long as they are held by Cantor or any Permitted Transferees, as applicable, the Private Warrants (i) may be exercised for cash or on a cashless basis, (ii) may not be transferred, assigned or sold until thirty (30) days after the completion by the Company of an initial Business Combination, and (iii) shall not be redeemable by the Company,

Upon exercise of each of the Public Warrants and Private Warrants, the exercise price and number of shares of Common Stock issuable may be adjusted in certain circumstances including in the event of a stock dividend, a consolidation, combination, reverse stock split or reclassification of shares of Common Stock.

17.Stockholders’ Deficit

Preferred Stock — The Company was authorized to issue 10,000,000 shares of preferred stock with a par value of $0.0001 per share. As of June 30, 2025 and December 31, 2024, there were no shares of preferred stock issued or outstanding.

Common Stock — The Company was authorized to issue 200,000,000 shares of common stock with a par value of $0.0001 per share. Each holder of Common Stock will be entitled to one (1) vote in person or by proxy for each share of the Common Stock. The holders of shares of Common Stock will not have cumulative voting rights. As of June 30, 2025 and December 31, 2024, there were 35,915,548 and 30,166,102 shares of Common stock issued and outstanding, respectively.

18.Restructuring

The Company periodically takes actions to improve operating efficiencies, typically in connection with rationalizing the cost structure of the Company. The Company’s footprint and headcount reductions and organizational integration actions relate to discrete, unique restructuring events, primarily reflected in approved plans for reductions in force.

In the fourth quarter of 2023, the Company’s management approved a restructuring plan to realign the Company’s business and strategic priorities by rightsizing its workforce in certain regions.

The Company’s restructuring activity and balance of the restructuring liability was as follows:


	June 30,		December 31,
(dollars in thousands)	2025		2024
Balance at beginning of the period	$	1,685	$	5,267
Restructuring charges		449		1,051
Payment of benefits		(1,095)		(4,634)
Balance at the end of the period	$	1,038	$	1,685

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As of June 30, 2025 and December 31, 2024, the current portion of the restructuring liability was $1.0 million and $1.7 million respectively, and was included in accrued compensation and benefits in the condensed consolidated balance sheets.

19.Related Parties

The components of related party expense in the condensed consolidated statements of operations are summarized as follows:


	Three months ended				Six months ended
	June 30,				June 30,
(dollars in thousands)	2025		2024		2025		2024
Related party shared services (ETI affiliates)	$	505	$	839	$	1,353	$	1,583
Related party service fee (ETI affiliates)		290		340		713		522
Related party service fee (HOVS limited)		1,364		—		1,523		—
Related party service fee (NVENTR AI)		258		—		390		—
Total related party expense	$	2,417	$	1,179	$	3,979	$	2,105

Historically, the Company has been managed and operated in the ordinary course of business with other affiliates of its former parent company, ETI. Accordingly, certain shared costs have been allocated to the Company and reflected as expenses in the condensed consolidated financial statements.

Sales of Products and Services

During the historical periods presented, the Company sold products and services to non-XBP Europe subsidiaries of ETI. Revenue, net in the condensed consolidated statements of operations includes sales to affiliates of ETI of $0.2 million and $0.1 million for the three months ended June 30, 2025 and 2024, respectively, and $0.3 million and $0.2 million for the six months ended June 30, 2025 and 2024, respectively.

Shared Service Center Costs

The historical costs and expenses reflected in our financial statements include costs for certain shared service functions historically provided by the non-XBP Europe subsidiaries of the Company’s former parent, ETI, including, but not limited to accounting and finance, IT and business process operations. Where possible, these charges were allocated based on full-time equivalents (FTE’s), formal agreements between XBP Europe and subsidiaries of ETI, or other allocation methodologies that Management determined to be a reasonable reflection of the utilization of services provided or the benefit received by XBP Europe and all costs of operating XBP Europe during the periods presented.

The allocated shared service expenses and general corporate expenses incurred pursuant to the Services Agreement for the three months ended June 30, 2025 and 2024 were $0.5 million and $0.8 million, respectively, and $1.4 million and $1.6 million for the six months ended June 30, 2025 and 2024, respectively, and are included in the related party expenses in the condensed consolidated statements of operations.

In the opinion of management of ETI and the Company, the expense and cost allocations have been determined on a basis considered to be a reasonable reflection of the utilization of services provided or the benefit received by the Company during 2025 and 2024. The amounts that would have been, or will be incurred, on a stand-alone basis could differ from the amounts allocated due to economies of scale, difference in management judgment, a requirement for more or fewer employees or other factors. Management does not believe, however, that it is practicable to estimate what these expenses would have been had the Company operated as an independent entity, including any expenses associated with obtaining any of these services from unaffiliated entities. In addition, the future results of operations, financial position and cash flows could differ materially from the historical results presented herein.

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Service Fee

During the historical periods presented, subsidiaries of ETI provided management services to the Company in exchange for a management fee. These management services included provision of legal, human resources, corporate finance, and marketing support. The management fee was calculated based on a weighted average of total external revenue, headcount and total assets attributable to the Company. On October 9, 2022, the management fee was terminated when the Merger Agreement was entered into and was replaced by the related party service fee pursuant to the Services Agreement, which reduced the fee and modified the services provided. Services provided under Annex A of the Services Agreement include sales of certain hardware, operations delivery, finance, accounting, human resources and technology support services. The Company incurred total fees related to ETI affiliates of $0.3 million and $0.3 million for the three months ended June 30, 2025 and 2024, respectively, and $0.7 million and $0.5 million for the six months ended June 30, 2025 and 2024, respectively.

Notes Payable

The Company entered into three Intercompany Loan Agreements with an affiliate of ETI, in September 2009 and May 2010, whereby the affiliate of ETI agreed to lend up to £9.3 million to the Company (“related party notes payable”). The related party notes payable which were denominated in British pounds accrued interest daily at the one-month LIBOR rate for United States dollar deposits in the London interbank market plus four percentage points. These notes had an original maturity date of one year (which was extended by the lender for one additional year on each anniversary of the notes) and were assigned by the lender to another affiliate of ETI and amended with an effective date of December 1, 2012. The amendment amended (a) the interest rate to a fixed rate of 4% plus LIBOR for the remainder of 2012, 12% for 2013 and 13.5% thereafter, (b) extended the term of the agreement to December 31, 2024, and (c) denominated the notes in United States dollars. In accordance with the Ultimate Parent Support Agreement, related party notes payable were eliminated at closing with a corresponding impact to additional paid-in capital. As a result, no related party notes payable was recorded in the condensed consolidated balance sheets as of June 30, 2025 and December 31, 2024. The condensed consolidated statements of operations included related party interest expense of $0 and $0 million for the three and six months ended June 30, 2025 and 2024 in the related party interest expense (income), net.

The Company entered into another four Intercompany Loan Agreements (“new related party notes payable”) with affiliates of ETI, three of the notes are dated September 4, 2023 (and subsequently amended on September 15, 2023) and one note is dated September 15, 2023. The new related party notes payable have a ten year term and bear annual interest of 6.0%, due at the end of the term. The condensed consolidated balance sheets included $1.6 million and $1.5 million new related party notes payable as of June 30, 2025 and December 31, 2024, respectively. The condensed consolidated statements of operations included less than $0.1 million of related party interest expense for the three and six months ended June 30, 2025 in the related party interest expense (income), net and less than $0.1 million for the three and six months ended June 30, 2024.

Agreement with Nventr, LLC

On February 5, 2025, the Company entered into a new related party service agreement with Nventr, LLC, a portfolio company of Handson Global Management (an investment management fund affiliated with our chairman), and in which our chairman holds a 20% interest, that provides AI analytics solutions. The Company incurred an expense of $0.3 million and $0 million for the three months ended June 30, 2025 and 2024, respectively, and $0.4 million and $0 million for the six months ended June 30, 2025 and 2024, respectively, in related party expenses within the condensed consolidated statements of operations. The Company capitalized $0.1 million and $0 million towards solutioning work for the three months ended June 30, 2025 and 2024, respectively, and $0.2 million and $0 million for the six months ended June 30, 2025 and 2024, respectively.

Agreement with HOV Services Ltd.

On February 18, 2025, the Company entered into a new related party service agreement with HOV Services Ltd., a company in which our chairman also serves as executive chairman, to help mitigate the risk of service disruption

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from the ongoing chapter 11 proceedings of the ETI Debtor Subs by providing an alternate source for certain BPO, outsourcing, management, and financial transaction processing solutions. The Company incurred an expense of $1.4 million and $0 million for the three months ended June 30, 2025 and 2024, respectively, and $1.5 million and $0 million for the six months ended June 30, 2025 and 2024, respectively, in related party expenses within the condensed consolidated statements of operations.

Related party payables and related party notes payables balances with affiliates as of June 30, 2025 and December 31, 2024 were as follows:


	June 30, 2025				December 31, 2024
(dollars in thousands)	Related party payables		Related party notes payable		Related party payables		Related party notes payable
ETI affiliates	$	5,247	$	1,640	$	5,443	$	1,451
Nventr, LLC		616		—		—		—
HOV Services Limited		1,725		—		—		—
Total	$	7,588	$	1,640	$	5,443	$	1,451

Acquisition of Membership Interest

On March 24, 2025, a Membership Interest Purchase Agreement (the “MI Agreement”) was executed between the Company and ETI. Under the terms of the MI Agreement, ETI sold and transferred all of the membership interests in GP 2XCV Holdings LLC (“GP2 Holdings”) to the Company. The only asset held by GP2 Holdings was all of the membership interests in GP 2XCV, LLC (“GP2”). The only asset held by GP2 was certain 11.500% First-Priority Senior Secured Notes due 2026 (“Exela 2026 Notes”) issued by a wholly owned subsidiary of ETI. The Company paid the purchase price of $2.3 million for GP2 Holdings by issuing 1,680,000 shares of XBP common stock at a closing stock price of $1.37 on March 21, 2025. XBP recorded an investment of $2.3 million in Exela 2026 Notes as a “held-till-maturity” asset in the condensed consolidated balance sheet as of March 31, 2025 for the only acquired asset under this transaction. The Exela 2026 Notes were purchased “credit deteriorated.” Accordingly, the Company recorded an allowance for credit loss of $1.3 million and non-credit premium assets of $1.3 million. Aggregate amortization expense related to non credit premium was $0.3 million and $0 million for the three months ended June 30, 2025 and 2024, respectively, and $0.3 million and $0 million for the six months ended June 30, 2025 and 2024, respectively.

20.Segment Information

The Company’s operating segments are significant strategic business units that align its products and services with how it manages its business, approaches the markets and interacts with its clients. The Company is organized into two segments: Bills and Payments and Technology.

Bills and Payments

The Bills & Payments business unit primarily focuses on optimizing how bills and payments are processed by businesses of all sizes and industries. It offers automation of Accounts Payable (“AP”) and Accounts Receivables (“AR”) processes and through its platform, XBP, seeks to integrate buyers and suppliers across Europe. This business unit also includes our digital transformation revenue, which is both project based and recurring.

Technology

The Technology business unit primarily focuses on sales of recurring software licenses and related maintenance, hardware solutions and related maintenance and professional services.

The CODM of the Company is the Company’s Chief Executive Officer. The CODM reviews segment profit to evaluate operating segment performance and determine how to allocate resources to operating segments. “Segment profit” is defined as revenue less cost of revenue (exclusive of depreciation and amortization). The Company does not allocate selling, general, and administrative expenses, depreciation and amortization, interest expense and foreign

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exchange losses, net. The Company manages assets on a total company basis, not by operating segment, and therefore asset information and capital expenditures by operating segments are not presented.

In accordance with applicable accounting guidance, the results of the disposable group are presented as discontinued operations in the condensed consolidated statements of operations and, as such, have been excluded from both continuing operations and segment results for all periods presented. See Note 3 - Discontinued Operations of the notes to condensed consolidated financial statements.

A reconciliation of segment profit to net loss before income taxes is presented below.


	Three months ended June 30, 2025
(dollars in thousands)	Bills & Payments		Technology		Total
Revenue, net (including related party revenue of $0.2 million)	$	28,764	$	10,851	$	39,615
Cost of revenue (including related party cost of revenue of $0.01 million, exclusive of depreciation and amortization)		22,390		5,405		27,795
Segment profit		6,374		5,446		11,820
Selling, general and administrative expenses (exclusive of depreciation and amortization)						10,407
Related party expense						2,417
Depreciation and amortization						607
Interest expense, net						1,999
Related party interest expense, net						25
Foreign exchange gains, net						(311)
Changes in fair value of warrant liability						—
Pension income, net						(392)
Net loss before income taxes					$	(2,932)


	Three months ended June 30, 2024
(dollars in thousands)	Bills & Payments	Technology

XBP Global Holdings, Inc. 10-Q