# EDGAR Filing Document

**Accession Number:** 0001236275
**File Stem:** 0001628280-26-012601
**Filing Date:** 2026-2
**Character Count:** 1033021
**Document Hash:** d901c3fd8526c801a0f9cf4f253f8729
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001628280-26-012601.hdr.sgml**: 20260227

**ACCESSION NUMBER**: 0001628280-26-012601

**CONFORMED SUBMISSION TYPE**: 10-K

**PUBLIC DOCUMENT COUNT**: 107

**CONFORMED PERIOD OF REPORT**: 20251231

**FILED AS OF DATE**: 20260227

**DATE AS OF CHANGE**: 20260227

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** QXO, Inc.
- **CENTRAL INDEX KEY:** 0001236275
- **STANDARD INDUSTRIAL CLASSIFICATION:** WHOLESALE-LUMBER & OTHER CONSTRUCTION MATERIALS [5030]
- **ORGANIZATION NAME:** 07 Trade & Services
- **EIN:** 161633636
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-38063
- **FILM NUMBER:** 26693017

**BUSINESS ADDRESS:**
- **STREET 1:** FIVE AMERICAN LANE
- **CITY:** GREENWICH
- **STATE:** CT
- **ZIP:** 06831
- **BUSINESS PHONE:** 888-998-6000

**MAIL ADDRESS:**
- **STREET 1:** FIVE AMERICAN LANE
- **CITY:** GREENWICH
- **STATE:** CT
- **ZIP:** 06831

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** SilverSun Technologies, Inc.
- **DATE OF NAME CHANGE:** 20110803

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** TREY RESOURCES INC
- **DATE OF NAME CHANGE:** 20050923

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** TREY INDUSTRIES INC
- **DATE OF NAME CHANGE:** 20030528

?xml version='1.0' encoding='ASCII'? qxo-20251231

**UNITED STATES** 

**SECURITIES AND EXCHANGE COMMISSION** 

**Washington, D.C. 20549**

______________

**FORM 10-K**

_________________

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

For the fiscal year ended: **December 31, 2025** 

or

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

For the transition period from <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u> to <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u> 

Commission File Number**: <u>001-</u><u>38063</u>**

![QXO_logo.jpg](qxo-20251231_g1.jpg)

**<u>QXO, INC.</u>**

(Exact name of registrant as specified in its charter)

---

| | |
|:---|:---|
| **<u>Delaware</u>**<br>(State or other jurisdiction of incorporation) | **<u>16-1633636</u>**<br>(IRS Employer Identification No.) |

---

**Five American Lane**

**<u>Greenwich</u>**<u>,</u> **<u>CT 06831</u>**

(Address of principal executive offices)

**<u>(888)</u> <u>998-6000</u>**

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| **<u>Title of each class</u>** | **<u>Trading Symbol(s)</u>** | **<u>Name of each exchange on which registered</u>** |
| Common Stock, par value $0.00001 per share | QXO | New York Stock Exchange |
| Depositary Shares, each representing a 1/20th interest in a share of 5.50% Series B Mandatory Convertible Preferred Stock, par value $0.001 per share | QXO.PRB | New York Stock Exchange |

---

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ⌧ No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ⌧

Indicate by check mark whether the registrant (1) has filed all reports required to be filed 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, a smaller reporting company, or an emerging growth company. See the 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 has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

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

The aggregate market value of the registrant's common stock held by non-affiliates of the registrant was $13.73 billion as of June 30, 2025 (the last business day of the registrant's most recently completed second fiscal quarter), based upon the closing price of the common stock on that date.

As of February 19, 2026, there were 708,551,189 shares outstanding of the registrant's common stock.

**DOCUMENTS INCORPORATED BY REFERENCE**

Portions of the registrant's definitive Proxy Statement ("Proxy Statement") relating to the 2026 Annual Meeting of Stockholders, to be held on May 5, 2026, are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated. The registrant's Proxy Statement will be filed with the Securities and Exchange Commission within 120 days after the end of the registrant's fiscal year ended December 31, 2025.

------

**QXO, INC. AND SUBSIDIARIES**

**FORM 10-K**

**For the Fiscal Year Ended December 31, 2025** 

**TABLE OF CONTENTS**

---

| | | |
|:---|:---|:---|
| | | **<u>Page</u>** |
| **[PART I](#i7078bf44f9cb4e28a3cd96e853af2352_505)** | | |
| <u>[Item 1.](#i7078bf44f9cb4e28a3cd96e853af2352_514)</u> | <u>[Business](#i7078bf44f9cb4e28a3cd96e853af2352_514)</u> | <u>[4](#i7078bf44f9cb4e28a3cd96e853af2352_514)</u> |
| <u>[Item 1A.](#i7078bf44f9cb4e28a3cd96e853af2352_124)</u> | <u>[Risk Factors](#i7078bf44f9cb4e28a3cd96e853af2352_124)</u> | <u>[9](#i7078bf44f9cb4e28a3cd96e853af2352_124)</u> |
| <u>[Item 1B.](#i7078bf44f9cb4e28a3cd96e853af2352_532)</u> | <u>[Unresolved Staff Comments](#i7078bf44f9cb4e28a3cd96e853af2352_532)</u> | <u>[21](#i7078bf44f9cb4e28a3cd96e853af2352_532)</u> |
| <u>[Item 1C.](#i7078bf44f9cb4e28a3cd96e853af2352_541)</u> | <u>[Cybersecurity](#i7078bf44f9cb4e28a3cd96e853af2352_541)</u> | <u>[21](#i7078bf44f9cb4e28a3cd96e853af2352_541)</u> |
| <u>[Item 2.](#i7078bf44f9cb4e28a3cd96e853af2352_550)</u> | <u>[Properties](#i7078bf44f9cb4e28a3cd96e853af2352_550)</u> | <u>[22](#i7078bf44f9cb4e28a3cd96e853af2352_550)</u> |
| <u>[Item 3.](#i7078bf44f9cb4e28a3cd96e853af2352_559)</u> | <u>[Legal Proceedings](#i7078bf44f9cb4e28a3cd96e853af2352_559)</u> | <u>[22](#i7078bf44f9cb4e28a3cd96e853af2352_559)</u> |
| <u>[Item 4.](#i7078bf44f9cb4e28a3cd96e853af2352_568)</u> | <u>[Mine Safety Disclosures](#i7078bf44f9cb4e28a3cd96e853af2352_568)</u> | <u>[22](#i7078bf44f9cb4e28a3cd96e853af2352_568)</u> |
| **[PART II](#i7078bf44f9cb4e28a3cd96e853af2352_118)** |  |  |
| <u>[Item 5.](#i7078bf44f9cb4e28a3cd96e853af2352_698)</u> | <u>[Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](#i7078bf44f9cb4e28a3cd96e853af2352_698)</u> | <u>[23](#i7078bf44f9cb4e28a3cd96e853af2352_698)</u> |
| <u>[Item 6.](#i7078bf44f9cb4e28a3cd96e853af2352_707)</u> | <u>[Reserved](#i7078bf44f9cb4e28a3cd96e853af2352_707)</u> | <u>[23](#i7078bf44f9cb4e28a3cd96e853af2352_707)</u> |
| <u>[Item 7.](#i7078bf44f9cb4e28a3cd96e853af2352_88)</u> | <u>[Management's Discussion and Analysis of Financial Condition and Results of Operations](#i7078bf44f9cb4e28a3cd96e853af2352_88)</u> | <u>[24](#i7078bf44f9cb4e28a3cd96e853af2352_88)</u> |
| <u>[Item 7A.](#i7078bf44f9cb4e28a3cd96e853af2352_109)</u> | <u>[Quantitative and Qualitative Disclosures About Market Risk](#i7078bf44f9cb4e28a3cd96e853af2352_109)</u> | <u>[35](#i7078bf44f9cb4e28a3cd96e853af2352_109)</u> |
| <u>[Item 8.](#i7078bf44f9cb4e28a3cd96e853af2352_13)</u> | <u>[Financial Statements and Supplementary Data](#i7078bf44f9cb4e28a3cd96e853af2352_13)</u> | <u>[36](#i7078bf44f9cb4e28a3cd96e853af2352_13)</u> |
| <u>[Item 9.](#i7078bf44f9cb4e28a3cd96e853af2352_743)</u> | <u>[Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](#i7078bf44f9cb4e28a3cd96e853af2352_743)</u> | <u>[70](#i7078bf44f9cb4e28a3cd96e853af2352_743)</u> |
| <u>[Item 9A.](#i7078bf44f9cb4e28a3cd96e853af2352_115)</u> | <u>[Controls and Procedures](#i7078bf44f9cb4e28a3cd96e853af2352_115)</u> | <u>[70](#i7078bf44f9cb4e28a3cd96e853af2352_115)</u> |
| <u>[Item 9B.](#i7078bf44f9cb4e28a3cd96e853af2352_142)</u> | <u>[Other Information](#i7078bf44f9cb4e28a3cd96e853af2352_142)</u> | <u>[71](#i7078bf44f9cb4e28a3cd96e853af2352_142)</u> |
| <u>[Item 9C.](#i7078bf44f9cb4e28a3cd96e853af2352_729)</u> | <u>[Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](#i7078bf44f9cb4e28a3cd96e853af2352_729)</u> | <u>[71](#i7078bf44f9cb4e28a3cd96e853af2352_729)</u> |
| **[PART III](#i7078bf44f9cb4e28a3cd96e853af2352_597)** |  |  |
| <u>[Item 10.](#i7078bf44f9cb4e28a3cd96e853af2352_606)</u> | <u>[Directors, Executive Officers and Corporate Governance](#i7078bf44f9cb4e28a3cd96e853af2352_606)</u> | <u>[72](#i7078bf44f9cb4e28a3cd96e853af2352_606)</u> |
| <u>[Item 11.](#i7078bf44f9cb4e28a3cd96e853af2352_615)</u> | <u>[Executive Compensation](#i7078bf44f9cb4e28a3cd96e853af2352_615)</u> | <u>[72](#i7078bf44f9cb4e28a3cd96e853af2352_615)</u> |
| <u>[Item 12.](#i7078bf44f9cb4e28a3cd96e853af2352_624)</u> | <u>[Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](#i7078bf44f9cb4e28a3cd96e853af2352_624)</u> | <u>[72](#i7078bf44f9cb4e28a3cd96e853af2352_624)</u> |
| <u>[Item 13.](#i7078bf44f9cb4e28a3cd96e853af2352_633)</u> | <u>[Certain Relationships and Related Transactions, and Director Independence](#i7078bf44f9cb4e28a3cd96e853af2352_633)</u> | <u>[72](#i7078bf44f9cb4e28a3cd96e853af2352_633)</u> |
| <u>[Item 14.](#i7078bf44f9cb4e28a3cd96e853af2352_642)</u> | <u>[Principal Accounting Fees and Services](#i7078bf44f9cb4e28a3cd96e853af2352_642)</u> | <u>[72](#i7078bf44f9cb4e28a3cd96e853af2352_642)</u> |
| **[PART IV](#i7078bf44f9cb4e28a3cd96e853af2352_670)** |  |  |
| <u>[Item 15.](#i7078bf44f9cb4e28a3cd96e853af2352_145)</u> | <u>[Exhibits and Financial Statement Schedules](#i7078bf44f9cb4e28a3cd96e853af2352_145)</u> | <u>[73](#i7078bf44f9cb4e28a3cd96e853af2352_145)</u> |
| <u>[Item 16.](#i7078bf44f9cb4e28a3cd96e853af2352_685)</u> | <u>[Form 10-K Summary](#i7078bf44f9cb4e28a3cd96e853af2352_685)</u> | <u>[75](#i7078bf44f9cb4e28a3cd96e853af2352_685)</u> |
|  | <u>[Signatures](#i7078bf44f9cb4e28a3cd96e853af2352_148)</u> | <u>[76](#i7078bf44f9cb4e28a3cd96e853af2352_148)</u> |

---

------

**CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS**

*This Annual Report on Form 10-K (this "Annual Report") contains forward-looking statements. Statements that are not historical facts, including statements about beliefs, expectations, targets or goals are forward-looking statements. These statements are based on plans, estimates, expectations and/or goals at the time the statements are made, and readers should not place undue reliance on them. In some cases, readers can identify forward-looking statements by the use of forward-looking terms such as "may," "will," "should," "expect," "opportunity," "intend," "plan," "anticipate," "believe," "estimate," "predict," "potential," "target," "goal," or "continue," or the negative of these terms or other comparable terms. Forward-looking statements involve inherent risks and uncertainties and readers are cautioned that a number of important factors could cause actual results to differ materially from those contained in any such forward-looking statements. Factors that could cause actual results to differ materially from those described herein include, among others:*

&nbsp;&nbsp;&nbsp;&nbsp;*• an inability to obtain the products we distribute resulting in lost revenues and reduced margins and damaging relationships with customers;*

&nbsp;&nbsp;&nbsp;&nbsp;*• a change in supplier pricing and demand adversely affecting our income and gross margins;*

&nbsp;&nbsp;&nbsp;&nbsp;*• a change in vendor rebates adversely affecting our income and gross margins;*

&nbsp;&nbsp;&nbsp;&nbsp;*• our inability to identify potential acquisition targets, successfully complete acquisitions on acceptable terms, or successfully integrate acquired businesses into our operations;*

&nbsp;&nbsp;&nbsp;&nbsp;*• risks related to maintaining our safety record;*

&nbsp;&nbsp;&nbsp;&nbsp;*• the possibility that building products distribution industry demand may soften or shift substantially due to cyclicality or dependence on general economic and political conditions, including inflation or deflation, interest rates, governmental subsidies or incentives, consumer confidence, labor and supply shortages, weather and commodity prices;*

&nbsp;&nbsp;&nbsp;&nbsp;*• risks related to fragmentation in our industry and the possibility that regional or global barriers to trade or a global trade war could increase the cost of products in the building products distribution industry, which could adversely impact the competitiveness of such products and the financial results of businesses in the industry;*

&nbsp;&nbsp;&nbsp;&nbsp;*• seasonality, weather-related conditions and natural disasters;*

&nbsp;&nbsp;&nbsp;&nbsp;*• risks related to the effective development and proper functioning of our information technology systems, including from cybersecurity threats, artificial intelligence use, and digital transformation initiatives;*

&nbsp;&nbsp;&nbsp;&nbsp;*• loss of key talent or our inability to attract and retain new qualified talent;*

&nbsp;&nbsp;&nbsp;&nbsp;*• risks related to work stoppages, union negotiations, labor disputes and other matters associated with our labor force or the labor force of our suppliers or customers;*

&nbsp;&nbsp;&nbsp;&nbsp;*• our dependence on Brad Jacobs as chairman and chief executive officer and the impact of the loss of Mr. Jacobs in these roles;*

&nbsp;&nbsp;&nbsp;&nbsp;*• the risk that Mr. Jacobs' past performance may not be representative of future results;* 

&nbsp;&nbsp;&nbsp;&nbsp;*• the risk that the anticipated benefits of our acquisition of Beacon Roofing Supply, Inc. (the "Beacon Acquisition") or any future acquisition may not be fully realized or may take longer to realize than expected;* 

&nbsp;&nbsp;&nbsp;&nbsp;*• the effect of the Beacon Acquisition or any future acquisition on our business relationships with employees, customers or suppliers, operating results and business generally;*

&nbsp;&nbsp;&nbsp;&nbsp;*• risks related to our obligations under the indebtedness we incurred in connection with the Beacon Acquisition;*

&nbsp;&nbsp;&nbsp;&nbsp;*• the possible economic impact of the Company's outstanding warrants and preferred stock on the Company and the holders of its common stock, including market price volatility, dilution from the exercise or conversion of the warrants or preferred stock, or the impact of dividend payments or liquidation preferences from preferred stock that remains outstanding;*

&nbsp;&nbsp;&nbsp;&nbsp;*• challenges raising additional equity or debt capital from public or private markets to pursue the Company's business plan and the effects that raising such capital may have on the Company and its business;*

&nbsp;&nbsp;&nbsp;&nbsp;*• the possibility that new investors in any future financing transactions could gain rights, preferences and privileges senior to those of the Company's existing stockholders;*

&nbsp;&nbsp;&nbsp;&nbsp;*• risks associated with periodic litigation, regulatory proceedings and enforcement actions, which may adversely affect the Company's business and financial performance;*

&nbsp;&nbsp;&nbsp;&nbsp;*• the impact of legislative, regulatory, economic, competitive and technological changes;* 

&nbsp;&nbsp;&nbsp;&nbsp;*• unknown liabilities and uncertainties regarding general economic, business, competitive, legal, regulatory, tax and geopolitical conditions; and*

&nbsp;&nbsp;&nbsp;&nbsp;*• other factors, including those set forth in the Company's filings with the Securities and Exchange Commission (the "SEC"), including this Annual Report.*

*Forward-looking statements should not be relied on as predictions of future events, and these statements are not guarantees of performance or results. Forward-looking statements herein speak only as of the date each statement is made. The Company does not undertake any obligation to update any of these statements in light of new information or future events, except to the extent required by applicable law.*

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

**PART I**

**Item 1. Business**

**Company**

QXO, Inc. ("QXO", "we", "our", or the "Company") was created to build a tech-forward leader in the approximately $800 billion building products distribution sector.

The Company was formerly known as SilverSun Technologies, Inc. ("SilverSun"). On June 6, 2024, we changed the Company's name from SilverSun to QXO. Prior to the Beacon Acquisition (as defined below), QXO was primarily a technology solutions and professional services company, providing critical software applications, consulting and other professional services, including specialized programming, training and technical support to small and mid-size companies in the manufacturing, distribution and services industries.

On April 29, 2025, the Company completed its acquisition of Beacon Roofing Supply, Inc. ("Beacon"), pursuant to the Agreement and Plan of Merger, dated as of March 20, 2025 (the "Merger Agreement"), by and among QXO, Beacon, and Queen MergerCo, Inc., a Delaware corporation and wholly owned subsidiary of QXO ("Merger Sub"). Pursuant to the terms of the Merger Agreement, Merger Sub merged with and into Beacon (the "Beacon Acquisition"), with Beacon surviving as a wholly owned subsidiary of QXO and being renamed QXO Building Products, Inc. ("QXO Building Products"). QXO Building Products has served the building industry for over 95 years and operates approximately 600 branches throughout all 50 states in the U.S. and seven provinces in Canada. QXO Building Products offers an extensive range of high-quality professional grade exterior products and serves over 110,000 residential and non-residential customers. QXO Building Products' scale and leading position in the roofing and complementary building products distribution market made it the ideal initial acquisition for QXO's value creation playbook.

As a result of the Beacon Acquisition, QXO has transitioned to a building products distribution company and is the largest publicly-traded distributor of roofing, waterproofing and complementary building products in North America.

**Our Industry** 

*Building Products Distribution*

Building products distribution is a large industry, with approximately $800 billion in annual revenue in 2024, split roughly equally between North America and Western Europe. The industry is characterized by a mix of national, multi-regional and local distributors, with a fragmented customer base. Building products distribution benefits from powerful growth tailwinds. In the United States (the "U.S."), we believe the supply of homes is approximately four million units short of demand. There are also strong tailwinds for residential repair and re-roofing ("R&R") activity. The average age of an existing single-family home in the U.S. is over 40 years, which creates ongoing demand for repairs. In the non-residential space, the average structure is even older at over 50 years, requiring greater levels of ongoing maintenance and refurbishment. Further, there is good visibility into infrastructure spending across North America and Europe. In North America alone, an additional $2 trillion of spending is expected to be required over the next two decades to keep the infrastructure safe.

Building products distribution is an industry where scale offers key advantages. Larger distributors have greater purchasing power, which allows them to pass through higher cost savings to customers. Larger distributors also have the resources to invest in differentiating technology. These factors drive a virtuous cycle of market share gains and fixed cost leverage. At the same time, the building products distribution industry is highly fragmented, with over 7,000 distributors in North America and approximately 13,000 in Europe. This fragmentation presents an attractive opportunity for consolidation in the industry.

*North American Roofing and Complementary Products*

Specialty distributors of roofing and complementary building products serve the critical role of facilitating supply chain relationships between a small number of manufacturers and thousands of local, regional and national contractors. The distributor is a value-added partner who can advise contractors on job-specific residential or commercial product bundles and provide last-mile delivery and logistics services. Distributors may also extend trade credit and use digital platforms to aid customers in optimizing their businesses.

We estimate the roofing distribution market and related complementary products in the U.S. and Canada to be an approximately $65 billion market. The core roofing market across residential and commercial roofing represents approximately $37 billion of annual sales, with a 3% to 5% long-term annual market growth outlook, according to a third-party industry report. Additionally, we believe the distribution market for complementary building products, including siding, waterproofing, plywood / oriented strand board ("OSB") and windows and doors, represents approximately $28 billion in annual sales, according to our internal estimates. We believe that the market for these complementary products will grow faster than the rest of the roofing products industry at a rate of 4% to 6% per annum.

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

*Favorable Long-Term Industry Fundamentals*

The roofing distribution industry benefits from several favorable long-term sector fundamentals, most notably a significant concentration in R&R spend, which constitutes approximately 80% of industry revenue. Of the revenue that is derived from R&R spend, approximately 94% is considered non-discretionary and driven by leaks, age, weather damage and deterioration. Growth in the weather event-driven portion of demand has increased as severe weather events quadrupled in frequency and doubled in economic impact over the last 20 years.

The remaining 20% of industry revenue is from new construction activity which is expected to benefit from the estimated domestic housing shortage of four million units. This equates to an approximately eight-year backlog at current build rates. Other secular trends supporting long-term fundamentals include increasing regulatory and insurance requirements, which drive the need for waterproofing and preventative restoration.

**Our Strategy**

Our goal is to become the tech-enabled leader in the $800 billion building products distribution industry and generate outsized value for shareholders. We are executing our strategy toward a target of $50 billion in annual revenues within the next decade through accretive acquisitions and organic growth, including greenfield openings, and operational transformation of acquired businesses. We plan to enhance organizational design, optimize the supply chain and drive commercial excellence, deploying technology across these initiatives.

We intend to achieve this by leveraging our clearly-defined strategies:

&nbsp;&nbsp;&nbsp;&nbsp;*• Deploy Foundational Actions to Drive Improvements in QXO Building Products' Existing Operations*

We will apply our proven strategy to drive revenue, margin and free cash flow. We will lead with technology, building and buying world-class systems that enhance visibility across the organization, its suppliers and its customers in order to deliver attractive and immediate return on investment. We will prioritize customer satisfaction, optimizing our go-to-market strategy based on end-to-end digital customer, focusing on delivering superior service with on-time / in-full fulfillment. We will seek to create a culture of accountability throughout our organization.

&nbsp;&nbsp;&nbsp;&nbsp;*• Enhance Market Share Growth through Commercial Excellence Initiatives and Greenfield Developments*

We will deploy a number of key initiatives to improve our revenue growth, including: optimizing assortment; improving inventory planning to drive pinpoint coverage by item, customer segment, and location; optimizing pricing; and driving salesforce excellence, including segmenting salesforce coverage based on customer needs and aligning incentives with the most critical key performance indicators. We will aim to accelerate growth in product lines complementary to roofing (for example, waterproofing, insulation and siding); expand our private label offerings; and increase our penetration of digital sales. We will deploy technology-driven solutions to drive revenue, including AI-led solutions to enhance lead generation, AI-led data analysis to better understand price elasticity, and AI-driven predictive analytics to improve inventory forecast accuracy by SKU.

&nbsp;&nbsp;&nbsp;&nbsp;*• Deliver Margin Expansion via Organizational Redesign, Supply Chain Initiatives and Inventory Planning*

We will seek to improve customer service and enhance our cost structure to drive increased agility by reassessing organizational design, reducing management layers and standardizing branch- and warehouse-level operating models.

We intend to increase G&A cost efficiency by deploying a zero-based budgeting approach to cost centers including travel and entertainment, IT maintenance and personnel services, and outsourcing select back-office functions where appropriate. We will deploy our considerable experience in logistics to optimize our network, by determining the optimal number, size and location of facilities to remove overlap and drive branch-level returns; measuring routes and service against miles driven and fleet utilization; addressing warehouse operational excellence through standardized shipping and handling processes; and increasing the use of cutting edge route optimization software to enhance fleet utilization and the customer delivery experience. We intend to grow revenue faster than industry rates.

&nbsp;&nbsp;&nbsp;&nbsp;*• Pursue Accretive M&A Using Our Proven Strategy and Diversify Our Platform into High-Growth Adjacencies within Building Product Distribution*

We will look to complete strategic, transformative acquisitions to deliver above-market growth for QXO in the building products distribution industry. Within roofing, we believe there is a compelling opportunity to continue the consolidation effort that QXO Building Products has historically pursued. We believe that approximately 30% of the roofing supply industry remains fragmented, held by over 500 dealers that remain locally competitive. We see extensive M&A opportunities in complementary categories, including insulation, siding and waterproofing, among others. Outside of roofing, we expect to continue to evaluate acquisition opportunities in the remainder of the approximately $800 billion building products distribution industry across North America and Western Europe. Consistent with this strategy, we are actively involved in processes for potential acquisitions.

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

**Recent Developments**

In January 2026, the Company entered into an investment agreement with AP Quince Holdings, L.P., a fund managed by affiliates of Apollo Global Management, Inc., and the other investors party thereto, pursuant to which such investors committed until July 15, 2026 (the "Initial Commitment Period") to purchase up to 300,000 shares of a new series of Series C Convertible Perpetual Preferred Stock, par value $0.001 per share (the "Series C Preferred Stock"), for an aggregate purchase price of $3.0 billion to fund one or more Qualifying Acquisitions (as defined below). The Initial Commitment Period will be extended with respect to the commitment for a Qualifying Acquisition up to an additional 12 months if a definitive acquisition agreement for such Qualifying Acquisition is executed before the expiration of the Initial Commitment Period.

The Company intends to use the net proceeds from the investment to fund all or a portion of the consideration for one or more acquisitions of assets, equity or businesses (or portions thereof) for a purchase price in excess of $1.5 billion or as otherwise determined by the Company (each, a "Qualifying Acquisition") and related fees and expenses. Any issuance of the Series C Preferred Stock would close at or around the closing of a Qualifying Acquisition.

Additionally, in January 2026, the Company sold 31.6 million shares of the Company's common stock in an underwritten public offering at a price of $23.80 per share. The closing of the equity offering was completed on January 20, 2026 and the Company raised $749.4 million in net proceeds from the equity offering, after deducting offering costs of $3.8 million. The Company also granted the underwriters in the public offering a 30-day option to purchase up to an additional 4.7 million shares of the Company's common stock at a price of $23.80 per share less underwriting discounts and commissions. The option to purchase additional shares expired unexercised at the end of the 30-day period.

On February 10, 2026, the Company entered into a definitive agreement to acquire Kodiak Building Partners from Court Square Capital Partners for approximately $2.25 billion (the "Kodiak Acquisition"). The purchase price comprises $2.0 billion of cash and 13.2 million of the Company's common shares (the "Consideration Shares"), with the Company retaining the right to repurchase these shares at $40 per share. The transaction is expected to close early in the second quarter of 2026, subject to the satisfaction of customary closing conditions.

**Our Customers**

Our customer base is composed of professional contractors, home builders, building owners, lumberyards, and retailers across the U.S. and Canada who depend on reliable local access to building products for residential and non-residential projects. Our customers vary in size, ranging from relatively small contractors to large contractors and builders that operate on a national scale. For the year ended December 31, 2025, no single customer accounted for more than 1% of our net sales.

**Products and Services**

Our product lines are designed to meet the requirements of our residential, non-residential and complementary building products customers. We carry one of the most extensive arrays of high-quality branded products in the industry, including our private label brand, TRI-BUILT<sup>®</sup>. Our TRI-BUILT<sup>®</sup> products offer a high-quality and superior-value alternative for our customers while delivering higher margins and brand exclusivity in the marketplace. We fulfill the vast majority of our warehouse orders with inventory on hand because of the breadth and depth of the inventories at our branches.

In the residential market, asphalt shingles comprise the largest share of the products we sell. In the non-residential market, single-ply membranes, insulation, and accessories comprise the largest share of our product offerings. In the area of complementary building products, waterproofing, siding, plywood / OSB, and windows and doors comprise the largest share of the products in our portfolio.

Beyond product delivery, we provide superior value-added services to our customers through our knowledgeable sales force that possesses an in-depth understanding of roofing and the building products we provide. Our sales force provides guidance to our customers throughout the lifecycles of their projects, including training and technical support.

**Trademarks and Intellectual Property**

Our rights in our intellectual property, including trademarks, patents, trade secrets, copyrights and domain names, as well as contractual provisions and restrictions on use of our intellectual property, are important to our business. We own a number of trademark registrations and applications in the U.S. and in foreign jurisdictions.

**Competition**

Our competition is primarily composed of national, regional and local specialty distributors and big box retailers. Among distributors, we compete against a small number of large distributors and many small, privately-owned distributors. Although we are the largest publicly-traded distributor of roofing, waterproofing and complementary building products in North America, the industry remains highly fragmented and competitive. The principal competitive factors in our business include, but are not limited to, the availability of materials and supplies; technical product knowledge and advisory expertise; delivery and other services including digital capabilities; pricing of products; and the availability of credit and capital. We believe we compete favorably with our competitors on the basis of these factors.

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

**Supply Chain**

We are a key distributor for our suppliers due to our industry expertise, scale, track record of growth, financial strength, and the substantial volume of products that we distribute. We maintain strong relationships with numerous manufacturers of roofing materials, complementary building products, and exterior waterproofing products in order to reduce dependence on any single company, maintain purchasing leverage, and ensure breadth of product availability in our local markets. These strong and diverse relationships are particularly important as the building materials industry has experienced constrained supply chain dynamics both domestically and internationally in recent years. Our value proposition to our suppliers includes serving as a vital way to manage channel inventory and providing last mile, just-in-time delivery through our extensive logistics network and large fleet of rolling stock. Our largest suppliers include predominantly domestic companies such as Owens Corning, GAF, Carlisle Construction Materials, CertainTeed Roofing and Siding, IKO Manufacturing, TAMKO Building Products, Johns Manville, James Hardie Building Products, Dow, Sika USA, and many more high-quality suppliers.

We manage the procurement of products through our national headquarters, regional offices, and local branches, allowing us to take advantage of both scale and local market conditions to purchase products more economically than most of our competitors. Product is shipped by the manufacturers primarily to our branches, as well as directly to our customers.

**Human Capital**

As of December 31, 2025, we had 7,794 active employees. Our future success depends in significant part upon the continued services of our key sales, operations, technical, and senior management personnel and our ability to attract and retain highly qualified sales, operations, technical and managerial personnel. We have 320 employees that are represented by labor unions and there are no material outstanding labor disputes.

Human capital management is critical to our ongoing business success, which requires investing in our people. Our aim is to create a highly engaged and motivated workforce where employees are inspired by leadership, engaged in purpose-driven, valuable work, have opportunities for growth and development and focus on executing their jobs with the utmost integrity and honesty. The safety of our team members and customers is our highest priority. In addition, we create working environments where everyone is safe from bullying, harassment, and discrimination.

We value our diverse employees and provide career and professional development opportunities that foster the success of our company. An effective approach to human capital management requires that we invest in talent, development, culture and employee engagement. We aim to create an environment where our employees are encouraged to make meaningful contributions and fulfill their potential. We emphasize our core values of leading with safety, winning customer loyalty, delivering results, bringing positivity to everything we do, doing the right thing, and never stop building with our employees to instill our culture and create an environment of growth and shared success.

**Government Regulations**

We are subject to regulation by various federal, state, provincial, and local agencies. These agencies include the Environmental Protection Agency, Department of Transportation, Occupational Safety and Health Administration, Department of Labor, and Equal Employment Opportunity Commission. We believe we comply, in all material respects, with applicable statutes and regulations affecting environmental issues and our employment, workplace health, and workplace safety practices, and compliance with such statutes and regulations has no material effect on our capital expenditures, earnings, or competitive position.

**Seasonality**

The demand for exterior building materials is closely correlated to both seasonal changes and unpredictable weather patterns, therefore demand fluctuations are expected. In general, we expect our net sales and net income to be the highest in quarters ending June 30, September 30, and December 31, which represent the peak months of construction and re-roofing. Conversely, we expect low net income levels or net losses in quarters ending March 31, when winter construction cycles and cold weather patterns have an adverse impact on our customers' ability to conduct their business.

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

**Information about our Executive Officers**

The following table and biographical summaries set forth information, including principal occupation and business experience, about our executive officers:

---

| | | |
|:---|:---|:---|
| Name | Age | Position |
| Brad Jacobs | 69 | Chief Executive Officer |
| Ihsan Essaid | 59 | Chief Financial Officer |
| Chris Signorello | 52 | Chief Legal Officer |
| Valeri Liborski | 58 | Chief Technology Officer |

---

Brad Jacobs has served as chief executive officer and chairman of our Board of Directors (the "Board") since June 6, 2024. He was previously executive chairman of the board of directors of XPO, Inc. ("XPO") from November 1, 2022 to December 31, 2025, and chairman and chief executive officer from September 2, 2011 to November 1, 2022. Mr. Jacobs served as non-executive chairman of the board of directors of GXO Logistics, Inc. from August 2, 2021 to December 31, 2025, and RXO, Inc. from November 1, 2022 to May 21, 2025. Additionally, he is the managing member of Jacobs Private Equity, LLC and Jacobs Private Equity II, LLC. Prior to XPO, Mr. Jacobs led two public companies: United Rentals, Inc., which he founded in 1997, and United Waste Systems, Inc., which he founded in 1989. Mr. Jacobs served as chairman and chief executive officer of United Rentals for that company's first six years and as its executive chairman for an additional four years. He served eight years as chairman and chief executive officer of United Waste Systems.

Ihsan Essaid has served as chief financial officer since July 15, 2024. From September 2021 to July 2024, Mr. Essaid served in senior leadership roles at Barclays, most recently as global head of M&A, after previously serving as the bank's co-head of global M&A and co-head of Americas M&A. He has more than three decades of experience in global investment banking, where he has provided critical advisory services for large M&A and capital markets transactions. Prior to Barclays, he was a managing director of media and telecom M&A at Credit Suisse from 2015 to 2021. Earlier, he was a partner at Perella Weinberg Partners.

Chris Signorello has served as chief legal officer since June 6, 2024. Mr. Signorello previously served in senior legal roles with XPO, Inc. from 2017 to 2023, most recently as deputy general counsel and chief compliance officer from 2021 to 2023 and, prior to that, as senior vice president, litigation counsel from 2017 to 2023. Prior to XPO, he was with industrial and consumer products leader Henkel Corporation for nearly a decade, where he was associate general counsel, among other leadership positions. Earlier, he spent nine years with the product liability and commercial litigation practice groups at Goodwin Procter LLP.

Valeri Liborski has served as chief technology officer since April 21, 2025. Mr. Liborski most recently served as an advisor to TheFourthLaw.ai, developing autonomy modules for robotics systems, from January 2025 until April 2025. Prior to that, he was the chief technology officer for Yahoo from September 2024 to February 2025 and the chief technology officer for HelloFresh from January 2022 to September 2024. Prior to HelloFresh, he served in senior roles at Amazon, overseeing the technology powering the expansion of Amazon's consumer business across Europe from August 2016 to January 2022 and leading engineering and product management from September 2011 to August 2016. Earlier in his career, he held senior engineering roles at Microsoft, where he developed large-scale data systems for online services and advanced AI-driven advertising platforms.

**Available Information**

Our website address is www.qxo.com. We promptly make available on our investor relations website, free of charge, the reports that we file or furnish with the SEC, corporate governance information (including our Code of Business Ethics) and select press releases. We file annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy and information statements and amendments to reports filed or furnished pursuant to Sections 13(a), 14, and 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The SEC maintains a website at www.sec.gov that contains reports, proxy and information statements and other information regarding QXO and other issuers that file electronically with the SEC.

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

**Item 1A. Risk Factors**

The following are important factors that could affect our business, financial condition or results of operations and could cause actual results for future periods to differ materially from our anticipated results or other expectations, including those expressed in any forward-looking statements made in this Annual Report, our other filings with the SEC or in presentations such as webcasts open to the public. You should carefully consider the following factors in conjunction with this Annual Report, including "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Item 7 – Part II and our consolidated financial statements and related notes in Item 8 – Part II. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that adversely affect our business, financial condition or results of operations. If any of the following risks actually occur, or other risks that we are not aware of become material, our business, financial condition, results of operations and future prospects could be materially and adversely affected. Unless otherwise indicated or the context otherwise requires, references in this section to historical results, risks and impacts to the business are with respect to Beacon and its consolidated subsidiaries prior to the Beacon Acquisition.

**Risks Related to Product Supply and Vendor Relations**

***An inability to obtain the products that we distribute could result in lost revenues and reduced margins and damage relationships with customers.***

We distribute roofing materials and other complementary building products, such as siding and waterproofing, that are manufactured by a number of major suppliers. Disruptions in our sources of supply may occur as a result of various reasons, including unanticipated demand, production or delivery difficulties, the loss of key supplier arrangements, or broad disruptive events (whether globally, in the U.S., or abroad), such as wars, terrorist actions, cybersecurity attacks or other technological disruptions with respect to manufacturers or the material vendors we rely on, trade disputes, labor disputes, changes in regulation, macroeconomic events, government shutdowns, natural disasters, including those that may be linked to climate change, and/or a pandemic.

When shortages occur, building material suppliers often allocate products among distributors, and sourcing materials from a limited number of suppliers can increase our risk. During the year ended December 31, 2025, we had three suppliers that each contributed 10% or more of total purchases and, in total, represented nearly 35% of total purchases. Although we believe that our relationships with our suppliers are strong and that we would have access to similar products from competing suppliers should products be unavailable from current sources, any supply shortage, particularly of the most commonly sold items, could result in a loss of revenues and reduced margins and damage our reputation and relationships with customers.

***A change in supplier pricing and demand could adversely affect our income and gross margins.***

Many of the products that we distribute are subject to price changes based upon manufacturers' raw material costs, energy costs, labor costs, and tariffs as well as other manufacturer pricing decisions. For example, as a distributor of residential roofing supplies, our business is sensitive to asphalt prices, which are highly volatile and often linked to oil prices, as oil is a significant input in asphalt production. Shingle prices have been volatile in recent years, partly due to volatility in asphalt prices. Other products we distribute, such as plywood and OSB, experienced price volatility largely due to supply and demand imbalances in recent years. In addition to the rising costs of commodities and raw materials, supplier pricing and demand can also be affected by inflationary pressures and other conditions that make it more costly for our suppliers to distribute their products to us, such as fuel shortages, fuel cost increases, or labor shortages.

We may also experience price volatility related to the implementation of tariffs on imported steel or other products. For example, certain of our vendors use steel as a product input, and they may increase prices as a result of tariffs incurred or the overall impact of tariffs on domestic steel prices.

Historically, we have generally been able to pass increases in prices on to our customers. Although we often are able to pass on manufacturers' price increases, our ability to pass on increases in costs in a timely fashion depends on the competitiveness of pricing environments and other market conditions.

By contrast, the inability to pass along cost increases or a delay in doing so could result in lower operating margins. In addition, higher prices could impact demand for these products, resulting in lower sales volumes.

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

***A change in vendor rebates could adversely affect our income and gross margins.***

The terms on which we purchase products from many of our vendors entitle us to receive a rebate based on the volume of our purchases. These rebates effectively reduce our costs for products. Vendors may adversely change the terms of some or all of these programs for a variety of reasons, including if market conditions change. Although these changes would not affect the net recorded costs of product already purchased, it may lower our gross margins on products we sell and therefore the income we realize on such sales in future periods.

**Risks Related to Acquisitions and our Growth Strategy**

***We may not be able to identify potential acquisition targets or successfully complete acquisitions on acceptable terms, which could slow our inorganic growth rate.***

Our growth strategy includes acquiring other businesses in the building products distribution industry. We continually seek additional acquisition candidates in selected markets, which include engaging in exploratory discussions with potential acquisition candidates, as well as engaging in competitive bidding processes for potential acquisition candidates. We are unable to predict whether or when we will be able to identify any suitable acquisition candidates, or, if we do, the likelihood that any such potential acquisition will be completed. The evaluation of each specific acquisition target business and the negotiation, drafting and execution of relevant transaction agreements and other ancillary documents, disclosure documents and other instruments, requires substantial management time and attention, as well as costs related to fees payable to counsel, accountants and other third parties. Our ability to consummate an acquisition is dependent on a number of factors and conditions that require time, attention and collaboration across multiple parties, including receipt of all necessary regulatory approvals of the contemplated transaction.

Certain acquisition opportunities may not result in the consummation of a transaction. When an identified transaction is not consummated, we are not able to recover the cost spent pursuing such transaction, which reduces the amount of capital available for other identified targets. Failure to complete an acquisition could adversely affect our business as we could be required to pay a termination fee under certain circumstances or be subject to litigation, and our stock price may also suffer as the failure to consummate such an acquisition may result in negative perception in the investment community. Additionally, we may not be able to identify or execute alternative arrangements on favorable terms, if at all.

If we cannot complete acquisitions that we identify on acceptable terms, our inorganic growth rate may decline. In addition, our current and potential competitors have made and may continue to make acquisitions that include acquisition candidates in which we were, or would have been, interested in pursuing and such competitors may establish cooperative relationships among themselves or with third parties. In the event that our inorganic growth does not keep pace with any significant consolidation among businesses in the building products distribution industry, our competitive position could be adversely affected.

***We may not be able to effectively integrate newly acquired businesses into our operations or achieve expected cost savings or profitability from our acquisitions.***

Acquisitions involve numerous risks, including:

&nbsp;&nbsp;&nbsp;&nbsp;• unforeseen difficulties or disruptions in integrating operations, technologies, services, accounting, and employees;

&nbsp;&nbsp;&nbsp;&nbsp;• diversion of financial and management resources from existing operations;

&nbsp;&nbsp;&nbsp;&nbsp;• unforeseen difficulties related to entering geographic regions where we do not have prior experience;

&nbsp;&nbsp;&nbsp;&nbsp;• potential loss of key employees;

&nbsp;&nbsp;&nbsp;&nbsp;• unforeseen cybersecurity risks related to the businesses acquired or to the manufacturers and vendors the acquired businesses rely on;

&nbsp;&nbsp;&nbsp;&nbsp;• unforeseen liabilities and expenses associated with businesses acquired; and

&nbsp;&nbsp;&nbsp;&nbsp;• inability to generate sufficient revenue or realize sufficient cost savings to offset acquisition or investment costs.

As a result, if we fail to evaluate, execute, and integrate acquisitions properly, we might not achieve the anticipated benefits of such acquisitions and we may incur costs in excess of what we anticipate.

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

***We face competition for businesses that fit our acquisition strategy and, therefore, we may have to acquire targets at sub-optimal prices or, alternatively, forego certain acquisition opportunities.***

Our acquisition strategy is focused on the acquisition of businesses in the building products distribution industry. In pursuing such acquisitions, we may face competition from other potential purchasers. Although the pool of potential purchasers for such businesses is typically small, those potential purchasers can be aggressive in their approach to acquiring such businesses. Furthermore, we may need to use third-party financing in order to fund some or all of these potential acquisitions, thereby increasing our acquisition costs. To the extent that other potential purchasers do not need to obtain third-party financing or are able to obtain such financing on more favorable terms, they may be in a position to be more aggressive with their acquisition proposals. As a result, in order to be competitive, our acquisition proposals may need to be aggressively priced, including at price levels that exceed what we originally determined to be achievable. Alternatively, we may determine that we cannot pursue on a cost-effective basis what would otherwise be an attractive acquisition opportunity.

***The implementation of our cost and revenue initiatives to enhance efficiencies and drive organic growth may not be effective and may not improve our results of operations or cash flow from operations as planned.***

Our organic growth strategy involves the implementation of a number of cost and revenue initiatives to further increase efficiency and drive growth, including advanced pricing analytics, demand and supply planning tools, financial management tools, and further back-office optimization. The implementation of these initiatives requires investments in management, operational and financial resources, and although we believe these strategies will drive revenue growth, margin and free cash flow, we can make no assurances that these initiatives will generate sufficient revenue or cost savings to recoup the costs of such investments. Further, if we are not able to successfully implement these cost reduction and revenue generating initiatives, our future financial results may suffer.

**Risks Related to Cyclicality, Seasonality, and Weather**

***Cyclicality in our business and general economic conditions could result in lower revenues and reduced profitability.***

A portion of the products we sell are for residential and non-residential construction. The strength of these markets depends on new housing starts and business investment, which are a function of many factors beyond our control, including credit and capital availability, interest rates, foreclosure rates, housing inventory levels and occupancy, changes in the tax laws, employment levels, consumer confidence, and the health of the U.S. economy and mortgage markets. Economic downturns in the regions and markets we serve could result in lower net sales and, since many of our expenses are fixed, lower profitability. Unfavorable changes in demographics, credit markets, consumer confidence, housing affordability, or housing inventory levels and occupancy, or a weakening of the U.S. economy or of any regional or local economy in which we operate, could adversely affect consumer spending, resulting in decreased demand for our products, and adversely affecting our business. In addition, instability in the economy and financial markets, including as a result of terrorism or civil or political unrest, may result in a decrease in housing starts or business investment, which would adversely affect our business.

***Seasonality, weather-related conditions, and natural disasters may have a significant impact on our financial results.***

The demand for building materials is heavily correlated to both seasonal changes and unpredictable weather patterns. Seasonal demand fluctuations are expected, such as in quarters ending March 31, when winter construction cycles and cold weather patterns typically have an adverse impact on new construction and re-roofing activity. The timing of weather patterns (unseasonable temperatures) and severe weather events (hurricanes, hailstorms, and protracted rain) may impact our financial results within a given period either positively or negatively, making it difficult to accurately forecast demand or results of operations. We expect that these seasonal and weather-related variations will continue in the future.

Certain extreme weather events and natural disasters, such as hurricanes, tornadoes, earthquakes, tropical storms, floods, droughts, and wildfires, may adversely impact us in several ways, including interfering with our ability to deliver our products, impeding our receipt of product from our vendors, disrupting branch staffing, reducing demand for our products, impairing our customers' ability to pay accounts receivable, and damaging our facilities and inventory, although some of these adverse impacts may be offset by increased demand relating to damage from these weather events and natural disasters. Some of the areas in which we operate, including California, Florida, Louisiana, North Carolina, Texas and other coastal areas, have experienced recent natural disasters and have increased risks of adverse weather or natural disasters. The physical effects of climate change may increase the frequency or severity of natural disasters and other extreme weather events in the future, which could increase our exposure to these risks.

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

**Risks Related to Information Technology**

***If we encounter interruptions in the proper functioning of our information technology systems, including from cybersecurity threats, we could experience material problems with our operations, including inventory, collections, customer service, cost control, and business plan execution that could have a material adverse effect on our financial results, including unanticipated increases in costs or decreases in net sales.***

Our information technology systems ("IT systems" or "systems"), which include information technology networks, hardware, applications, and the data related thereto, are integral to the operation of our business. We use our IT systems to, among other things, provide complete integration of purchasing, receiving, order processing, shipping, inventory management, delivery routing, sales analysis, cash management, and accounting, as well as to process, transmit, protect, store, and delete sensitive and confidential electronic data, including, but not limited to, employee, supplier, and customer data ("Data"). Our IT systems include third-party applications and proprietary applications developed and maintained by us. We rely heavily on information technology both in serving our customers and in our enterprise infrastructure to achieve our objectives. In certain instances, we also rely on the systems of third parties to assist with conducting our business, which includes, among other things, marketing and distributing products, developing new products and services, operating our website, hosting and managing our services, securely storing Data, processing transactions, purchasing and receiving, billing and accounts receivable management, responding to customer inquiries, managing inventory and our supply chain, and managing our human resources processes and services. As a result, the secure and reliable operation of our IT systems (including its function of securing Data), and those of third parties upon whom we depend, are critical to the successful operation of our business. Any failure or interruption of our IT systems, including the systems of third parties upon whom we depend, could have a material adverse effect on our business, financial results, and reputation.

Although our IT systems and Data are protected through security measures and business continuity plans, our systems and those of third parties upon whom we depend may be vulnerable to: natural disasters; power outages; telecommunication or utility failures; terrorist acts; breaches due to employee error or malfeasance or other insider threats; disruptions during the process of upgrading or replacing computer software or hardware; terminations of business relationships by us or third-party service providers; and disinformation campaigns, damage or intrusion from a variety of deliberate cyber-attacks carried out by insiders or third parties, which are becoming more sophisticated and include computer viruses, worms, gaining unauthorized access to systems for purposes of misappropriating assets or sensitive information either directly or through our vendors and customers, denial of service attacks, ransomware, supply chain attacks, data corruption, malicious distribution of inaccurate information or other malicious software programs that may impact such systems and cause operational disruption. For these IT systems and related business processes to operate effectively, we or our service providers must continually maintain and update them. Delays in the maintenance, updates, upgrading, or patching of these systems and related business processes could impair their effectiveness or expose us to security risks. In addition, if IT systems are damaged, restoration or recovery of those systems may not be achievable in a timely manner.

Even with our policies, procedures, and programs designed to ensure the integrity of our IT systems and the security of Data, we may not be effective in identifying and mitigating every risk to which we are exposed. In some instances, we may have no current capability to detect certain vulnerabilities, which may allow them to persist in the environment over long periods of time.

Additionally, existing and future artificial intelligence ("AI") capabilities present a growing threat by aiding experienced and inexperienced threat actors in identifying vulnerabilities and crafting increasingly sophisticated and targeted cybersecurity attacks. Vulnerabilities may also be introduced from the use of AI by us, our customers or suppliers. Use of AI by us or such third parties, whether authorized or unauthorized, increases the risk that our proprietary information or intellectual property will be unintentionally disclosed, and may introduce new risks such as inaccurate output.

Despite the precautions we take to mitigate the risks of such events, any attack on our IT systems or breach of our Data, or the IT systems and Data of third parties upon whom we depend, could result in, but are not limited to, the following: business disruption, misstated or misappropriated financial data, product shortages and/or an increase in accounts receivable aging, an adverse impact on our ability to attract and serve customers, delays in the execution of our business plan, theft of our intellectual property or other non-public confidential information and Data, including that of our customers, suppliers, and employees, liability for stolen assets or information, and higher operating costs including increased cybersecurity protection costs. Such events could harm our reputation and have an adverse impact on our financial results, including the impact of related legal, regulatory, and remediation costs. In addition, if any information about our customers, including payment information, were the subject of a successful cybersecurity attack against us, we could be subject to litigation or other claims by the affected customers. Further, regulatory authorities have increased their focus on how companies collect, process, use, store, share, and transmit personal data. Privacy security laws and regulations, including federal and state laws in the U.S. and federal and provincial laws in Canada, pose increasingly complex compliance challenges, which may increase compliance costs, and any failure to comply with data privacy laws and regulations could result in litigation, significant sanctions, monetary costs, or other harm to us.

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

***Our business may be harmed if we are unable to effectively develop, implement, maintain, enhance, protect and upgrade information technology systems, including those systems of any businesses we acquire.***

Our business may be harmed if we are unable to effectively implement our digital transformation initiatives and successfully integrate acquired companies' IT systems with our own. We expect our customers to continue to demand more sophisticated, fully integrated technology. To keep pace with changing technologies and customer demands, we must correctly address market trends and enhance the features and functionality of our IT systems in response to these trends, which may lead to significant ongoing software development costs. Any failure to respond to these trends in a timely or cost-effective manner could result in decreased demand for our services and a corresponding decrease in revenues.

In addition, we have made and expect to continue to make significant investments in AI and other emerging technologies to remain competitive, but there can be no assurance that our efforts will be successful or that we will be able to recoup the costs of such investments. If we are unable or slow to develop or deploy such emerging technologies in our business, our competitiveness will suffer.

The companies we acquire will need to be integrated with our IT systems, which may cause additional costs, delays or disruption. We may acquire companies with less sophisticated IT systems or cybersecurity practices, which could expose us to increased cybersecurity risks and vulnerabilities. Further, our IT systems need to be sufficiently scalable to support the future growth of our business and may require modifications or upgrades that expose us to additional risks of damage or disruption. Any material delay, disruption, malfunction or similar challenges with our IT systems or those of the companies we acquire could have a material adverse effect on our financial condition, results of operations and cash flows.

**Risks Related to Human Capital**

***Loss of key talent or our inability to attract and retain new qualified talent could hurt our ability to operate and grow successfully.***

Our success will continue to depend to a significant extent on our executive officers and key management personnel, including branch managers. We may not be able to retain our executive officers and key personnel or recruit and attract additional qualified management. The loss of any of our current executive officers or other key management employees, or a delay in recruiting or our inability to recruit and retain qualified employees could adversely affect our ability to operate and make it difficult to execute our strategies to drive growth, scale our operations, enhance customer service, and expand our footprint in key markets. In addition, our operating results could be adversely affected by increased competition for employees, shortages of qualified workers, or higher employee turnover, all of which could have adverse effects on levels of customer service or result in increased employee compensation or benefit costs.

***Our business may be adversely affected by work stoppages, union negotiations, labor disputes and other matters associated with our labor force or the labor force of our suppliers or customers.***

Any labor disputes, work stoppages, or unionization efforts could result in significant increases in our cost of labor. While we believe that our relations with employees generally and the labor unions that represent our employees (which as of December 31, 2025 was approximately 4.1% of our workforce) are generally good and we have experienced no material strikes or work stoppages recently (and there are no material outstanding labor disputes currently), in the future we could experience these and other types of conflicts with labor unions, other groups representing employees, with the employees of the companies we acquire, or with our employees in general.

Installation, replacement and repair of roofing is a labor-intensive business. Demand for our products may be impacted by our customers' ability to attract, train, and retain workers. Changes in immigration laws and regulations, trends in labor migration, and increases in our customers' personnel costs or the inability of our customers to hire sufficient personnel, which may be amplified in tight labor market conditions, could adversely impact our business, financial position, results of operations, and cash flows.

***We are dependent on the continued leadership of Brad Jacobs as chairman and chief executive officer. The possibility of the loss of Mr. Jacobs in these roles could have a material adverse effect on the Company's business, financial condition and results of operations.***

We are dependent on the leadership of Brad Jacobs as chairman and chief executive officer and we have benefited substantially from his leadership and performance. Our ability to successfully implement our business strategy depends to a significant extent on the continued service and performance of Mr. Jacobs. The loss of Mr. Jacobs' services could impair our ability to execute our business plan and could, therefore, have a material adverse effect on our business, financial condition and results of operations.

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

***The past performance by Brad Jacobs or our management team may not be indicative of future performance or results.***

Past performance by Brad Jacobs or our management team, including transactions in which they have participated and businesses with which they have been associated, may not be representative of our future performance or the returns the Company will generate going forward. Our financial condition and results of operations may be influenced by numerous factors, some of which are beyond our control. You should not rely on the historical record of Mr. Jacobs or our management team as indicative of the future performance of an investment of our Company.

**Risks Related to Our Industry**

***A measure of our success is dependent on maintaining our safety record, and an injury to, or death of, any of our employees, customers, or members of the general public related to our business activities could result in material liabilities and reputational injury.***

Our business activities include an inherent risk of catastrophic safety incidents that could result in injuries and deaths. The activities we conduct at our customers' designated delivery locations — which include construction and residential job sites — present a risk of injury or death to our employees, customers, or visitors, notwithstanding our compliance with safety regulations. We may be unable to avoid material liabilities for an injury or death, and our workers' compensation and other insurance policies may not be adequate or may not continue to be available on terms acceptable to us, or at all, which could result in material liabilities to us.

Further, as a wholesale distributor of roofing materials and other complementary building products, we lease and operate a fleet of commercial motor vehicles, including semi-tractor trailer trucks, flatbed trucks, and forklifts. Accordingly, a safety incident involving our commercial fleet could result in material economic damages, as well as injuries and/or death, for our employees and any other parties involved. Although we believe our aggregate insurance limits should be sufficient to cover our historic claims amounts, participants in commercial distribution and transportation activities (i.e., trucking and transportation) have experienced large verdicts, including some instances in which juries have awarded significant amounts.

In addition, our brand's reputation is an important asset to our business; as a result, anything that damages our brand's reputation could materially harm our business, results of operations, and financial condition. For example, negative media reports, whether or not accurate, can materially and adversely affect our reputation.

Moreover, social media has dramatically increased the rate at which negative publicity can be disseminated before there is any meaningful opportunity to respond to or address an issue to protect our reputation.

***Our industry is highly fragmented and competitive. If we are unable to compete effectively, our net sales and operating results may be reduced.***

The building products distribution industry is highly fragmented and competitive, with relatively low barriers to entry for local competitors. Competition is driven by factors such as pricing, product availability, service quality, delivery capabilities, customer relationships, geographic reach, and breadth of product offerings. Financial stability also plays a critical role, as suppliers and customers consider it when selecting distributors for their products, and it influences the favorability of the terms under which we purchase products from suppliers and sell them to customers.

Some competitors have been, or may be, acquired by larger companies and therefore may have access to greater financial and other resources than we do. As a result, we may be unable to maintain a cost structure low enough to compete effectively. If we cannot compete successfully, our future net sales and net income could decline.

***Regional or global barriers to trade or a global trade war could increase the cost of products in the building products distribution industry, which could adversely impact the competitiveness of such products and the financial results of businesses in the industry.***

The state of relationships between other countries and the United States with respect to trade policies, government relations and tariffs may impact our business. The U.S. government has and continues to make significant changes in U.S. trade policy and has taken certain actions that could negatively impact U.S. trade, including imposing tariffs on certain goods imported into the United States. There is concern that the imposition of tariffs by the United States could result in the adoption of tariffs or retaliatory measures by other countries, leading to a global trade war. Such tariffs or sanctions could raise the cost and reduce the supply of building materials and components. Our success in markets we may choose to enter in the future depends substantially on our ability to source local materials on terms that are favorable to us. In the event of a global trade war or regional dispute, local suppliers may choose to allocate their resources to local players in their markets and provide us with less favorable terms. Building products shortages and price increases for building products could cause distribution delays and increase our costs, which in turn could reduce our competitiveness and impact our ability to do business with certain counterparties.

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

General geopolitical instability and the responses to it, such as the possibility of sanctions, trade restrictions and changes in tariffs, including tariffs imposed by the United States and China, and the possibility of additional tariffs, non-tariff barriers or other trade restrictions between the United States and other countries where we might in the future distribute or sell products, could adversely impact our business. If we fail to anticipate and manage any of these dynamics successfully, our business, financial condition and results of operations could be adversely affected.

**Risks Related to the Acquisition of Beacon**

***We may be unable to integrate Beacon successfully and realize the anticipated benefits of the Beacon Acquisition.***

The successful integration of Beacon and operations into those of our own and our ability to realize the expected benefits of the transaction are subject to a number of risks and uncertainties, many of which are outside of our control. We will also be required to devote significant management attention and resources to integrating business practices, cultures and operations of each business. The risks and uncertainties relating to integrating the two businesses include, among other things:

&nbsp;&nbsp;&nbsp;&nbsp;• the challenge of integrating complex organizations, systems, operating procedures, compliance programs, technology, networks and other assets of Beacon;

&nbsp;&nbsp;&nbsp;&nbsp;• the difficulties harmonizing differences in the business cultures of QXO and Beacon;

&nbsp;&nbsp;&nbsp;&nbsp;• the inability to successfully integrate our respective businesses in a manner that permits us to achieve the cost savings and other anticipated benefits from the Beacon Acquisition;

&nbsp;&nbsp;&nbsp;&nbsp;• the inability to minimize the diversion of management attention from ongoing business concerns during the process of integrating Beacon into our businesses;

&nbsp;&nbsp;&nbsp;&nbsp;• the inability to resolve potential conflicts that may arise relating to customer, supplier and other important relationships of our business and Beacon;

&nbsp;&nbsp;&nbsp;&nbsp;• difficulties in retaining key management and other key employees; and

&nbsp;&nbsp;&nbsp;&nbsp;• the challenge of managing the expanded operations of a significantly larger and more complex company and coordinating geographically separate organizations.

As a result of the Beacon Acquisition, we expect to realize certain synergies and cost savings. Any synergies and cost savings that we realize may differ materially from our estimates and involve risks, uncertainties, assumptions and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such estimates. This information is speculative in nature, and some or all of the assumptions underlying the estimated synergies and cost savings may not materialize or may vary from actual results. Our ability to realize these anticipated synergies and savings is subject to significant uncertainties and you should not place undue reliance on the adjustments in evaluating our anticipated results.

We have incurred substantial expenses to consummate the Beacon Acquisition but may not realize the anticipated benefits. In addition, even if we are able to integrate Beacon successfully, the anticipated benefits of the Beacon Acquisition may not be realized fully, or at all, or may take longer to realize than expected. Given the size and significance of the Beacon Acquisition, we may encounter difficulties in the integration of the operations of Beacon and may fail to realize the full benefits and synergies of the Beacon Acquisition, which could adversely impact our business, results of operation and financial condition.

***Beacon may have liabilities that are not known to us.***

Beacon may have liabilities that we failed, or were unable, to discover in the course of performing our due diligence investigations of Beacon. We cannot assure you that the indemnification available to us under the Agreement and Plan of Merger dated as of March 20, 2025 (the "Merger Agreement") in respect of the Beacon Acquisition will be sufficient in amount, scope or duration to fully offset the possible liabilities associated with the business of Beacon or property that we assumed upon consummation of the Beacon Acquisition. We may learn additional information about Beacon that materially adversely affects us, such as unknown or contingent liabilities and liabilities related to compliance with applicable laws. Any such liabilities, individually or in the aggregate, could have a material adverse effect on our business, financial condition and results of operations.

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

**Risks Related to Our Indebtedness**

***Our substantial indebtedness could adversely affect our financial condition.***

We incurred, through our wholly owned subsidiary QXO Building Products, Inc. (formerly known as Beacon Roofing Supply, Inc.) and its subsidiaries (the "Credit Parties"), substantial indebtedness in connection with the Beacon Acquisition. As of December 31, 2025, we had $3.10 billion of outstanding indebtedness, consisting of $2.25 billion of our Notes (as defined herein) and $850.0 million under our Term Loan Facility (as defined herein). In addition, as of December 31, 2025, we had approximately $1.97 billion available for additional borrowing under our ABL Facility (as defined herein) (subject to a borrowing base and excluding approximately $21.2 million in letters of credit outstanding thereunder). See "Liquidity and Capital Resources" under Item 7 of Part II, "Management's Discussion and Analysis of Analysis of Financial Condition and Results of Operations" for additional details regarding such indebtedness.

Our high level of debt could have important consequences, including:

&nbsp;&nbsp;&nbsp;&nbsp;• making it more difficult for us to satisfy our obligations with respect to our debt and any failure to comply with the obligations of any of our debt instruments, including restrictive covenants and borrowing conditions, could result in an event of default under the agreements governing other indebtedness;

&nbsp;&nbsp;&nbsp;&nbsp;• requiring us to dedicate a substantial portion of our cash flow from operations to the payment of interest and the repayment of our indebtedness, thereby reducing funds available to us for other purposes;

&nbsp;&nbsp;&nbsp;&nbsp;• limiting our ability to obtain additional financing to fund future working capital, capital expenditures, business development or other general corporate requirements, including dividends, if and when declared by our Board;

&nbsp;&nbsp;&nbsp;&nbsp;• increasing our vulnerability to general adverse economic and industry conditions;

&nbsp;&nbsp;&nbsp;&nbsp;• making us more highly leveraged than some of our competitors, which may place us at a competitive disadvantage;

&nbsp;&nbsp;&nbsp;&nbsp;• restricting us from making strategic acquisitions, engaging in development activities or exploiting business opportunities;

&nbsp;&nbsp;&nbsp;&nbsp;• causing us to make non-strategic divestitures;

&nbsp;&nbsp;&nbsp;&nbsp;• exposing us to the risk of increased interest rates as certain of our borrowings are and may in the future be at variable rates of interest;

&nbsp;&nbsp;&nbsp;&nbsp;• limiting our flexibility in planning for and reacting to changes in our industry;

&nbsp;&nbsp;&nbsp;&nbsp;• impacting our effective tax rate; and

&nbsp;&nbsp;&nbsp;&nbsp;• increasing our cost of borrowing.

In addition, the credit agreements governing the Credit Facilities and the Indenture contain restrictive covenants that limit the ability of the Credit Parties to engage in activities that may be in our long-term best interest. Our failure to comply with those covenants could result in an event of default which, if not cured or waived, could result in the acceleration of substantially all of our indebtedness.

***We may not be able to generate sufficient cash to service all of our indebtedness and may be forced to take other actions to satisfy the obligations of the Credit Parties under our indebtedness, which may not be successful.***

Our ability to make scheduled payments on or refinance the debt obligations of the Credit Parties depends on our financial condition and operating performance, which are subject to prevailing economic and competitive conditions and to certain financial, business, legislative, regulatory and other factors beyond our control. We may be unable to maintain a level of cash flows from operating activities sufficient to permit the Credit Parties to pay the principal and interest on our indebtedness.

If our cash flows and capital resources are insufficient to fund the debt service obligations, we could face substantial liquidity problems and could be forced to reduce or delay investments and capital expenditures, or to dispose of material assets or operations, alter our dividend policy, seek additional debt or equity capital or restructure or refinance our indebtedness. We may not be able to effect any such alternative measures on commercially reasonable terms or at all and, even if successful, those alternative actions may not allow us to meet the scheduled debt service obligations. The instruments governing our indebtedness restrict our ability to dispose of assets and restrict the use of proceeds from those dispositions and also restrict our ability to raise debt or equity capital to be used to repay other indebtedness when it becomes due. We may not be able to consummate those dispositions or to obtain proceeds in an amount sufficient to meet any debt service obligations when due.

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

Our inability to generate sufficient cash flows to satisfy the debt obligations, or to refinance our indebtedness on commercially reasonable terms or at all, may materially adversely affect our business, financial condition and results of operations and our ability to satisfy our obligations under our indebtedness or pay dividends on our common stock.

***Our debt agreements contain restrictions that limit our flexibility in operating our business.***

The credit agreements that govern the Credit Facilities and the Indenture contain, and any other existing or future indebtedness of ours would likely contain, a number of covenants that impose significant operating and financial restrictions on us, through the Credit Parties, including restrictions on the ability of the Credit Parties to, among other things:

&nbsp;&nbsp;&nbsp;&nbsp;• incur additional debt, guarantee indebtedness or issue certain preferred shares;

&nbsp;&nbsp;&nbsp;&nbsp;• pay dividends on or make distributions in respect of, or repurchase or redeem, our capital stock or make other restricted payments;

&nbsp;&nbsp;&nbsp;&nbsp;• prepay, redeem or repurchase certain debt;

&nbsp;&nbsp;&nbsp;&nbsp;• make loans or certain investments;

&nbsp;&nbsp;&nbsp;&nbsp;• sell certain assets;

&nbsp;&nbsp;&nbsp;&nbsp;• create liens on certain assets;

&nbsp;&nbsp;&nbsp;&nbsp;• consolidate, merge, sell or otherwise dispose of all or substantially all of our assets;

&nbsp;&nbsp;&nbsp;&nbsp;• enter into certain transactions with our affiliates;

&nbsp;&nbsp;&nbsp;&nbsp;• enter into agreements restricting our subsidiaries' ability to pay dividends; and

&nbsp;&nbsp;&nbsp;&nbsp;• designate our subsidiaries as unrestricted subsidiaries.

As a result of these covenants, we are limited in the manner in which we conduct our business, and may be unable to engage in favorable business activities or finance future operations or capital needs.

A failure to comply with the covenants under the Credit Facilities, the Indenture or any of our other existing or future indebtedness could result in an event of default, which, if not cured or waived, could have a material adverse effect on our business, financial condition and results of operations. In the event of an event of default under the Credit Facilities, the lenders:

&nbsp;&nbsp;&nbsp;&nbsp;• will not be required to lend any additional amounts to us;

&nbsp;&nbsp;&nbsp;&nbsp;• could elect to declare all borrowings outstanding, together with accrued and unpaid interest and fees, to be due and payable and terminate all commitments to extend further credit;

&nbsp;&nbsp;&nbsp;&nbsp;• could require us to apply all of our available cash to repay these borrowings; or

&nbsp;&nbsp;&nbsp;&nbsp;• could effectively prevent us from making debt service payments (due to a cash sweep feature).

Such actions by the lenders could cause cross defaults under our other indebtedness. If we were unable to repay those amounts, the holders of the Notes, the lenders under the Credit Facilities and any of our other existing or future secured indebtedness could proceed against the collateral granted to them to secure the Notes, the Credit Facilities or such other indebtedness. We pledged a significant portion of our assets as collateral under the Notes and the Credit Facilities.

**Regulatory and General Risks**

***Our activities and operations are subject to numerous laws and regulations and we could become subject to newly enacted laws and regulations, compliance with which could increase our general and administrative costs. If we violate such laws or regulations, we could face penalties and fines or be required to curtail operations.***

We are subject to various federal, state, provincial, local and other laws and regulations, including, among other things, environmental, climate, transportation, health and safety laws and regulations, tax laws and regulations, and potential tariffs on imported products. Some of the regulations to which we are subject include:

&nbsp;&nbsp;&nbsp;&nbsp;• transportation regulations promulgated by the U.S. Department of Transportation;

&nbsp;&nbsp;&nbsp;&nbsp;• work safety regulations promulgated by the Occupational Safety and Health Administration;

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

&nbsp;&nbsp;&nbsp;&nbsp;• employment regulations promulgated by the U.S. Equal Employment Opportunity Commission and the U.S. Department of Labor;

&nbsp;&nbsp;&nbsp;&nbsp;• environmental regulations promulgated by the Environmental Protection Agency; and

&nbsp;&nbsp;&nbsp;&nbsp;• similar regulations promulgated by state, provincial, and local regulators.

Concern over climate change has led to, and may in the future lead to, new or increased legal and regulatory requirements designed to reduce or mitigate the effects of climate change, which could increase our operating or capital expenses and compliance burdens.

Applicable laws and regulations require us to obtain and maintain permits and approvals and implement programs and procedures to control risks associated with our operations. Compliance in these or other areas may increase our general and administrative costs and adversely affect our financial condition, operating results, and cash flows. Moreover, failure to comply with the regulatory requirements applicable to our business could expose us to investigation, enforcement actions, litigation, and substantial fines and penalties that could adversely affect our financial condition, results of operations, and cash flows.

These laws, regulations, or rules and their interpretation and application may also change from time to time and those changes could be substantial and have a material adverse effect on our business, financial condition, results of operations, and cash flows. We cannot predict the nature and timing of future developments in law and regulations and whether we will be successful in meeting future demands of regulatory bodies in a manner which will not materially adversely affect us.

***We may be subject to periodic litigation, regulatory proceedings and enforcement actions, which may adversely affect our business and financial performance.***

From time to time, we are involved in lawsuits, regulatory proceedings and enforcement actions, brought or threatened against us in the ordinary course of business. Our business is subject to the risk of claims involving current and former employees, affiliates, suppliers, competitors, stockholders, government regulatory agencies or others through private actions, class actions, whistleblower claims, administrative proceedings, antitrust enforcement, regulatory actions or other proceedings.

Due to the inherent uncertainties of litigation, it is often difficult to accurately predict the ultimate outcome of any such actions or proceedings. The outcome of litigation, particularly class action lawsuits and regulatory actions, is often difficult to assess or quantify, as plaintiffs may seek injunctive relief or recovery of very large or indeterminate amounts in these types of lawsuits, and the magnitude of the potential loss may remain unknown for substantial periods of time. In addition, plaintiffs in many types of actions may seek punitive damages, civil penalties, consequential damages or other losses, or injunctive or declaratory relief. These proceedings or actions could result in substantial cost and may require us to devote substantial resources to defend ourselves and distract our management from the operation of our business. While we maintain insurance for certain potential liabilities, such insurance does not cover all types and amounts of potential liabilities and is subject to various exclusions as well as caps on amounts recoverable. We may therefore incur significant expenses defending any such suit or government charge and may be required to pay amounts or otherwise change our operations in ways that could adversely affect our results of operations and financial condition.

**Risks Related to Ownership of our Common Stock**

***Future sales of substantial amounts of our common stock in the public markets, or the perception that such sales might occur, could cause the market price of our common stock to decline significantly, even if our business is doing well.***

Sales of a substantial number of shares of our common stock in the public market, or the perception that these sales might occur, could depress the market price of our common stock and could impair our ability to raise capital through the sale of additional equity securities. We are unable to predict the effect that sales may have on the prevailing market price of our common stock.

Sales of our common stock by current stockholders may make it more difficult for us to sell equity or equity-related securities in the future at a time and price that we deem reasonable or appropriate, and make it more difficult to sell shares of our common stock. We have filed a registration statement and prospectus supplements registering the resale of 857,077,924 shares of common stock held by, or issuable upon conversion or exercise of securities held by, stockholders party to certain agreements with the Company providing them with registration rights. In addition, we agreed to use commercially reasonable efforts to file a prospectus supplement covering the resale of (i) a new series of Series C Preferred Stock (as further discussed in Recent Developments above) and common stock issuable upon the conversion of the Series C Preferred Stock within 30 days following the closing of a Qualifying Acquisition and (ii) the Consideration Shares to be issued in connection with the Kodiak Acquisition as soon as practicable after the closing of such transaction (as discussed in Recent Developments above). Substantial sales of securities by these stockholders and investors, or the perception that substantial sales will be made in the public market, could have a material adverse effect on the market price for our common stock.

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

In addition, pursuant to the Amended and Restated Investment Agreement (the "Investment Agreement"), dated April 14, 2024, among the Company, Jacobs Private Equity II, LLC ("JPE") and certain other investors thereto (collectively, the "Investors"), we issued and sold 1,000,000 shares of Convertible Perpetual Preferred Stock, par value $0.001 per share (the "Convertible Perpetual Preferred Stock") and warrants exercisable for an aggregate of 219 million shares of common stock (the "Warrants"). In connection with that transaction, we also entered into a registration rights agreement with JPE and certain of the Investors, pursuant to which JPE has certain demand registration rights that may require us to conduct underwritten offerings of the underlying shares. Any shares of common stock sold in these offerings will be freely tradable. In the event such registration rights are exercised and a large number of shares of common stock is sold, such sales could reduce the trading price of our common stock. These sales also could impede our ability to raise future capital.

We have also registered and will continue to register on Form S-8 all shares of common stock that are issuable under the QXO, Inc. 2024 Omnibus Incentive Plan, including shares of common stock that are issuable upon the exercise and/or vesting of equity awards granted in connection with the Beacon Acquisition that replaced certain previously outstanding Beacon awards. As a consequence, these shares can be freely sold in the public market upon issuance. Any sales of shares by these stockholders could have a negative impact on the trading price of our common stock and result in dilution.

***The Mandatory Convertible Preferred Stock, the Depositary Shares and, if issued, the Series C Preferred Stock may adversely affect the market price of our common stock.***

The market price of our common stock is likely influenced by our outstanding depositary shares ("Depositary Shares"), each representing a 1/20th interest in a share of 5.50% Series B Mandatory Convertible Preferred Stock, par value $0.001 per share ("Mandatory Convertible Preferred Stock") and the anticipated issuance of the Series C Preferred Stock. The market price of our common stock could become more volatile and could be depressed by: (i) investors' anticipation of the potential resale in the market of a substantial number of additional shares of common stock received upon conversion of the Mandatory Convertible Preferred Stock (and, correspondingly, the Depositary Shares) and, if issued, the Series C Preferred Stock; (ii) possible sales of our common stock by investors who view the Depositary Shares as a more attractive means of equity participation in us than owning shares of common stock; and (iii) hedging or arbitrage trading activity that we expect to develop involving the Depositary Shares, our common stock and, if issued, the Series C Preferred Stock.

***Our common stock ranks junior to our Convertible Perpetual Preferred Stock, our Mandatory Convertible Preferred Stock and, if issued, our Series C Preferred Stock with respect to dividends and amounts payable in the event of our liquidation, winding-up or dissolution.***

Our common stock ranks junior to both our Convertible Perpetual Preferred Stock and our Mandatory Convertible Preferred Stock and, if issued, will rank junior to the Series C Preferred Stock with respect to the payment of dividends and amounts payable in the event of our liquidation, winding-up or dissolution. This means that, unless accumulated dividends have been paid or set aside for payment on all our outstanding Convertible Perpetual Preferred Stock, Mandatory Convertible Preferred Stock and, if issued, any Series C Preferred Stock through the most recently completed dividend period, no dividends may be declared or paid on our common stock subject to limited exceptions. Likewise, in the event of our voluntary or involuntary liquidation, winding-up or dissolution, no distribution of our assets may be made to holders of our common stock until we have paid to holders of our Convertible Perpetual Preferred Stock and Mandatory Convertible Preferred Stock a liquidation preference equal to $1,000 per share (plus accumulated and unpaid dividends) and, if the Series C Preferred Stock is issued, a liquidation preference equal to $10,000 per share (plus accumulated and unpaid dividends) to such stockholders.

***We currently do not intend to pay dividends on our common stock in the foreseeable future. As a result, your ability to achieve a return on your investment may depend on appreciation in the market price of our common stock.***

Although we have previously declared and paid cash dividends on our common stock, we currently intend to retain all available funds and any future earnings for use in the operation of our business and do not anticipate paying any dividends on our common stock in the foreseeable future. Any determination to pay dividends in the future will be at the discretion of our Board. Accordingly, investors must for the foreseeable future rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investments.

***New investors in future financing transactions could gain rights, preferences and privileges senior to those of the Company's existing stockholders.***

We expect that significant additional capital may be needed in the future to support our business growth. To the extent we raise additional capital by issuing common stock, convertible securities or other equity securities, investors may be materially diluted by subsequent sales. Such sales may also result in substantial dilution to our existing stockholders, and new investors could gain rights, preferences and privileges senior to the holders of our common stock.

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

***The concentration of ownership by Mr. Jacobs and director designation rights may have the effect of delaying or preventing a change in control of the Company and could affect the market price of shares of our common stock.***

Our chairman and chief executive officer, Brad Jacobs, beneficially owns or controls approximately 22.1% of the voting power of our capital stock (including the voting power attributable to our preferred stock). This concentration of ownership and voting power allows Mr. Jacobs to exert significant influence over our decisions, including matters requiring approval by our stockholders (such as, subject to certain limitations, the election of directors and the approval of mergers or other extraordinary transactions), regardless of whether or not other stockholders believe that the transaction is in their own best interests.

In addition, under our Fifth Amended and Restated Certificate of Incorporation (the "Charter"), JPE, which is controlled by Mr. Jacobs, is currently entitled to designate 40% of the total Board members in connection with each meeting of stockholders at which directors are to be elected because the Investors party to the Investment Agreement beneficially own or control approximately 39.4% of the voting power of our capital stock when calculated on a fully-diluted, as-converted basis, assuming the exercise of the Warrants. JPE currently holds 900,000 shares of Convertible Perpetual Preferred Stock and 197,109,065 Warrants, which may be converted or exchanged into an aggregate of 394,218,132 shares of common stock. So long as the Investors party to the Investment Agreement collectively own or control (together with their affiliates) Convertible Perpetual Preferred Stock, shares of common stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least 30% of the total voting power of the capital stock of the Company, calculated on a fully-diluted, as-converted basis, JPE will continue to be entitled to designate 40% of the total Board members. JPE's right to designate persons to the Board will generally decrease proportionally with a decrease in the Investors' ownership or control (together with affiliates) of Convertible Perpetual Preferred Stock, shares of common stock or other voting securities, or Warrants exercisable for such securities, calculated on a fully diluted, as-converted basis. Accordingly, Mr. Jacobs may be able to exercise significant influence over our business policies and affairs.

Such concentration of voting power and designation rights could also have the effect of delaying, deterring or precluding a change of control or other business combination that might otherwise be beneficial to our stockholders, could deprive our stockholders of an opportunity to receive a premium for their common stock as part of a sale of our company and might ultimately affect the market price of our common stock.

***Anti-takeover provisions contained in our Charter and amended and restated bylaws, as well as provisions of Delaware law, could impair a takeover attempt.***

Our Charter and amended and restated bylaws contain, and the General Corporation Law of the State of Delaware (the "DGCL") contains, provisions which could have the effect of rendering more difficult, delaying, or preventing an acquisition deemed undesirable by our Board. These provisions provide for the following:

&nbsp;&nbsp;&nbsp;&nbsp;• the right of JPE to designate Board members;

&nbsp;&nbsp;&nbsp;&nbsp;• the ability of our remaining directors to fill vacancies on our Board;

&nbsp;&nbsp;&nbsp;&nbsp;• limitations on stockholders' ability to call a special stockholder meeting or act by written consent;

&nbsp;&nbsp;&nbsp;&nbsp;• rules regarding how stockholders may present proposals or nominate directors for election at stockholder meetings;

&nbsp;&nbsp;&nbsp;&nbsp;• the right of our Board to issue preferred stock without stockholder approval; and

&nbsp;&nbsp;&nbsp;&nbsp;• the limitation of liability of, and provision of indemnification to, our directors and officers.

These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our management. In addition, we are subject to Section 203 of the DGCL, which could have the effect of delaying or preventing a change of control that you may favor. Section 203 provides that, subject to limited exceptions, persons that acquire, or are affiliated with persons that acquire, more than 15% of the outstanding voting stock of a Delaware corporation may not engage in a business combination with that corporation, including by merger, consolidation or acquisitions of additional shares, for a three-year period following the date on which that person or any of its affiliates becomes the holder of more than 15% of the corporation's outstanding voting stock.

Any provision of our Charter, our amended and restated bylaws, or the DGCL that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock, and could also affect the price that some investors are willing to pay for our common stock.

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

***Our Charter provides that certain courts in the State of Delaware or the federal district courts of the United States for certain types of lawsuits is the sole and exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders' ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.***

Our Charter provides that, unless we consent in writing to the selection of an alternative forum, a state court located within the State of Delaware is the sole and exclusive forum for: i) any derivative action or proceeding brought on our behalf, ii) any action asserting a claim for or based on a breach of a fiduciary duty owed by any of our directors, officers or employees to us or our stockholders, including a claim alleging the aiding and abetting of such a breach of fiduciary duty, iii) any action asserting a claim against us or any of our directors, officers or employees arising pursuant to any provision of the DGCL or of our Charter or our amended and restated bylaws (as either may be amended and/or restated from time to time), iv) any action asserting a claim related to or involving us that is governed by the internal affairs doctrine, or v) any action asserting an "internal corporate claim" as defined under the DGCL. The exclusive forum provision does not apply to claims arising under the Securities Act of 1933, as amended (the "Securities Act"), the Exchange Act or other federal securities laws for which there is exclusive federal or concurrent federal and state jurisdiction. Unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act, the Exchange Act or such other federal securities laws.

Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock will be deemed to have notice of and, to the fullest extent permitted by law, to have consented to the provisions of our Charter described above. Although we believe this exclusive forum provision benefits us by providing increased consistency in the application of Delaware law and federal securities laws in the types of lawsuits to which each applies, the choice of forum provision may limit a stockholder's ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, other employees or stockholders, which may discourage such lawsuits against us and our directors, officers, other employees or stockholders. However, the enforceability of similar forum provisions in other companies' certificates of incorporation has been challenged in legal proceedings. If a court were to find the exclusive choice of forum provision contained in our Charter to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could materially adversely affect our business, financial condition and results of operations.

**Item 1B. Unresolved Staff Comments**

Not applicable.

**Item 1C. Cybersecurity**

Our information security program is designed to protect and preserve the confidentiality, integrity, and availability of our information technology assets. This program is overseen by our chief information security officer ("CISO"), whose team is responsible for leading the cybersecurity strategy, policy, standards, threat detection and prevention, and incident response processes. Our CISO reports directly to our chief information officer ("CIO") on the effectiveness of our cybersecurity program and has 20 years of IT experience, including leadership roles with enterprise responsibility for IT audit, IT infrastructure, and cybersecurity. Our cybersecurity risk management system is integrated into our broader enterprise risk management ("ERM") framework. This ERM process is facilitated by a risk committee, which is comprised of senior leaders from key functional and operational areas across the company. The risk committee has separate discussions for each risk with senior-level risk owners who have firsthand knowledge of their commercial or functional area. For cybersecurity-related risks, these discussions include the CISO and other key IT leadership. Through these discussions, the risk committee develops an enterprise-wide risk profile, which it then reviews and refines with the executive leadership team before presenting it to the Board.

In addition to reports to the Board on our enterprise risks, at least annually, the Audit Committee reviews with management the Company's cybersecurity assessment and risk management policies, including any significant cybersecurity or data privacy risk exposures and management's plans to monitor or mitigate them.

We employ various technical controls and measures to protect against cybersecurity attacks, which align with functions identified in the National Institute of Standards and Technology Cybersecurity 2.0 Framework. These include, among other things, a cybersecurity awareness training program for all employees and frequent phishing simulations. The information security team also reviews our information security systems for unauthorized system access, cybersecurity incidents, indicators of compromise, and unusual traffic on our systems. Our CISO continuously monitors the effectiveness of our processes and controls, which drives investment decisions in our cybersecurity program.

We periodically engage external subject matter experts who provide independent qualitative and quantitative assessments of the cybersecurity program maturity and response readiness. Additionally, we use processes, such as third-party risk monitoring security rating agencies, to oversee and identify material risks from cybersecurity threats associated with our use of third-party technology and systems. We also maintain cybersecurity insurance coverage as part of our overall insurance portfolio.

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

As of December 31, 2025, we have not identified any risks from cybersecurity threats (including any previous cybersecurity incidents) that have materially affected, or are reasonably likely to materially affect, the Company, including our business strategy, our results of operations or our financial condition. For a discussion of risks from cybersecurity threats that could be reasonably likely to materially affect us, please see our Risk Factors discussion under the headings "Risks Related to Information Technology" in this Annual Report.

**Item 2. Properties**

Our main properties include corporate office space and branch facilities. We believe that all of our properties have been adequately maintained, are in good condition and are generally suitable and adequate for our current needs. Additional space may be required as we expand our business activities. We do not foresee any significant difficulties in obtaining additional facilities if deemed necessary.

***Corporate Offices***

Our corporate headquarters is located on leased premises in Greenwich, Connecticut. We also lease other corporate office space, with our largest offices located in Herndon, Virginia, Coppell, Texas, and Seattle, Washington. These locations have corporate functions such as executive management, accounting, sales, human resources, legal, marketing, supply chain management, business development and information technology. Our leased corporate offices range in size from approximately 600 square feet to 25,200 square feet.

***Branch Facilities***

As of December 31, 2025, we operated approximately 600 branch facilities throughout all 50 states in the U.S. and seven provinces in Canada. Of our total branch facilities, approximately 96% were located in the U.S. and approximately 4% were located in Canada. Our branch facilities range in size from approximately 2,000 square feet to 148,700 square feet. We lease approximately 97% of our branch facilities, and the remaining 3% are owned.

**Item 3. Legal Proceedings**

For information related to our legal proceedings, refer to Note 11 – *Commitments and Contingencies* of Item 8 of Part II, "Financial Statements and Supplementary Data" of this Annual Report.

**Item 4. Mine Safety Disclosures**

Not applicable.

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

**PART II**

**Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities**

**Market Information**

Beginning on January 17, 2025, the Company's common stock began trading on the NYSE under the symbol "QXO", and prior to that date the Company's common stock was traded on Nasdaq under the same symbol.

**Holders of Common Equity**

As of February 19, 2026, there were 177 stockholders of record. An additional number of stockholders are beneficial holders of our common stock in "street name" through banks, brokers and other financial institutions that are the record holders.

**Dividend Information**

On June 12, 2024, the Board paid a $17.4 million special cash dividend to its stockholders of record in connection with the Investment Agreement and related transactions. See Note 6 - *Equity* of Item 8 of Part II, "Financial Statements and Supplementary Data" of this Annual Report for additional information regarding the Investment Agreement and dividends.

We cannot provide any assurance that we will declare or pay cash dividends on our common stock in the future. We currently anticipate that we will retain all of our future earnings, if any, for use in the operation and expansion of our business and we do not anticipate paying cash dividends in the foreseeable future. The declaration of any future cash dividends is at the discretion of the Board and depends upon our earnings, if any, our capital requirements and financial position, our general economic conditions, and other pertinent conditions. For additional information regarding dividends and restrictions on our ability to pay dividends, see Note 6 - *Equity* and Note 9 - *Debt* of Item 8 of Part II, "Financial Statements and Supplementary Data" of this Annual Report.

**Unregistered Equity Securities**

There were no unregistered sales of the Company's equity securities during the year ended December 31, 2025 that were not previously disclosed in a Quarterly Report on Form 10-Q or in a Current Report on Form 8-K.

**Transfer Agent**

Our transfer agent is Equiniti Trust Company, LLC, which is located at 28 Liberty Street, Floor 53, New York, NY 10005.

**Item 6. Reserved**

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

**Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations** 

Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States ("GAAP"). These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date of the consolidated financial statements as well as the reported amounts of revenues and expenses during the periods presented. Our consolidated financial statements would be affected to the extent that there are material differences between these estimates and actual results. In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require management's judgment in its application. There are also areas in which management's judgment in selecting any available alternative would not produce a materially different result. The following discussion should be read in conjunction with our consolidated financial statements and notes appearing elsewhere in this report.

**Overview**

Prior to the Beacon Acquisition (as defined below), QXO, Inc. ("QXO", "we", "our", or the "Company") was primarily a technology solutions and professional services company, providing critical software applications, consulting and other professional services, including specialized programming, training and technical support to small and mid-size companies in the manufacturing, distribution and services industries.

***Beacon Acquisition***

On March 20, 2025, QXO entered into an Agreement and Plan of Merger (the "Merger Agreement") with Beacon Roofing Supply, Inc., a Delaware corporation ("Beacon"), and Queen MergerCo, Inc., a Delaware corporation and wholly owned subsidiary of QXO ("Merger Sub"), pursuant to which QXO agreed to acquire Beacon for a purchase price of $124.35 per share of common stock (the "Merger Consideration") of Beacon (the "Beacon Acquisition"). On April 29, 2025 (the "Closing Date"), pursuant to the Merger Agreement, Merger Sub merged with and into Beacon, with Beacon remaining as the surviving entity and being renamed QXO Building Products, Inc. ("QXO Building Products"), and the Company completed its acquisition of Beacon in a transaction that valued Beacon at $10.6 billion.

As a result of the Beacon Acquisition, QXO has transitioned to a building products distribution company and is the largest publicly-traded distributor of roofing, waterproofing, and complementary building products in North America. We plan to become the tech-enabled leader in the $800 billion building products distribution industry and generate outsized value for shareholders. We are executing our strategy toward a target of $50 billion in annual revenues within the next decade through accretive acquisitions and organic growth.

**Results of Consolidated Operations**

The following tables set forth our results of operations for the periods presented. The period-to-period comparison of financial results is not necessarily indicative of future results.

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** | **% of net sales**<sup>(2)</sup> | **% of net sales**<sup>(2)</sup> |
| *(in millions, except percentages)* | **2025**<sup>(1)</sup> | **2024** | **2025** | **2024** |
| Net sales | $6842.2 | $56.9 | 100.0% | 100.0% |
| &nbsp;&nbsp;&nbsp;&nbsp;Cost of products sold | 5269.5 | 33.8 | 77.0% | 59.4% |
| Gross profit | 1572.7 | 23.1 | 23.0% | 40.6% |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating expense: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Selling, general and administrative | 1394.8 | 93.0 | 20.4% | 163.4% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation | 108.4 | 0.2 | 1.6% | 0.4% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization | 314.7 | 0.9 | 4.6% | 1.6% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expense | 1817.9 | 94.1 | 26.6% | 165.4% |
| Loss from operations | (245.2) | (71.0) | (3.6)% | (124.8)% |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest (expense) income, net | (47.7) | 121.8 | (0.7)% | 214.1% |
| &nbsp;&nbsp;&nbsp;&nbsp;Loss on debt extinguishment | (49.7) |  | (0.7)% | —% |
| &nbsp;&nbsp;&nbsp;&nbsp;Other income, net | 5.5 |  | 0.1% | —% |
| (Loss) income before (benefit from) provision for income taxes | (337.1) | 50.8 | (4.9)% | 89.3% |
| &nbsp;&nbsp;&nbsp;&nbsp;(Benefit from) provision for income taxes | (57.7) | 22.8 | (0.8)% | 40.1% |
| Net (loss) income | $(279.4) | $28.0 | (4.1)% | 49.2% |
| <sup>(1)</sup> Results include Beacon's operations from the date of acquisition on April 29, 2025 through December 31, 2025. | <sup>(1)</sup> Results include Beacon's operations from the date of acquisition on April 29, 2025 through December 31, 2025. | <sup>(1)</sup> Results include Beacon's operations from the date of acquisition on April 29, 2025 through December 31, 2025. | <sup>(1)</sup> Results include Beacon's operations from the date of acquisition on April 29, 2025 through December 31, 2025. | <sup>(1)</sup> Results include Beacon's operations from the date of acquisition on April 29, 2025 through December 31, 2025. |
| <sup>(2)</sup> Percent of net sales may not foot due to rounding. | <sup>(2)</sup> Percent of net sales may not foot due to rounding. | <sup>(2)</sup> Percent of net sales may not foot due to rounding. | <sup>(2)</sup> Percent of net sales may not foot due to rounding. | <sup>(2)</sup> Percent of net sales may not foot due to rounding. |

---

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

**Comparison of the Years Ended December 31, 2025 and 2024**

***Net Sales***

The following table summarizes net sales by line of business for the periods presented:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** | **% of net sales** | **% of net sales** |
| *(in millions, except percentages)* | **2025**<sup>(1)</sup> | **2024** | **2025** | **2024** |
| Residential roofing products | $3307.1 | $— | 48.3% | —% |
| Non-residential roofing products | 1883.9 |  | 27.5% | —% |
| Complementary building products | 1592.7 |  | 23.3% | —% |
| Software products and services | 58.5 | 56.9 | 0.9% | 100.0% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total net sales | $6842.2 | $56.9 | 100.0% | 100.0% |
| <sup>(1)</sup> Net sales include Beacon's operations from the date of acquisition on April 29, 2025 through December 31, 2025. | <sup>(1)</sup> Net sales include Beacon's operations from the date of acquisition on April 29, 2025 through December 31, 2025. | <sup>(1)</sup> Net sales include Beacon's operations from the date of acquisition on April 29, 2025 through December 31, 2025. | <sup>(1)</sup> Net sales include Beacon's operations from the date of acquisition on April 29, 2025 through December 31, 2025. | <sup>(1)</sup> Net sales include Beacon's operations from the date of acquisition on April 29, 2025 through December 31, 2025. |

---

Net sales for the year ended December 31, 2025 increased to $6.84 billion compared to $56.9 million for the year ended December 31, 2024. The increase in net sales was primarily driven by the Beacon Acquisition as Beacon's net sales for the period of April 29, 2025 through December 31, 2025 are included in net sales for the year ended December 31, 2025. Beacon's sales for the year ended December 31, 2025, which includes sales for the pre-acquisition period of January 1, 2025 through April 28, 2025, were down relative to Beacon's sales for the year ended December 31, 2024 primarily due to macroeconomic headwinds consistent with the broader building products industry as well as the absence of named storms in the U.S. during the year ended December 31, 2025.

***Cost of Products Sold***

Cost of products sold for the year ended December 31, 2025 increased to $5.27 billion, up from $33.8 million for the year ended December 31, 2024. The comparative increase was primarily due to higher cost of products sold associated with increased net sales as a result of the Beacon Acquisition. Cost of products sold was also negatively impacted by the inventory fair value adjustments of $131.7 million as a result of recording Beacon's inventory at fair value on the acquisition date.

***Selling, General and Administrative ("SG&A") Expense***

SG&A expense for the year ended December 31, 2025 increased to $1.39 billion, up from $93.0 million for the year ended December 31, 2024. The increase in SG&A expense was primarily driven by costs incurred to support the ongoing operations of our business subsequent to the Beacon Acquisition, including payroll and employee benefit costs, warehouse operating costs, and general and administrative costs. The increase in SG&A expense was also attributable to increases in stock-based compensation expense of $110.1 million, acquisition-related transaction costs of $70.9 million and restructuring charges of $56.8 million.

***Depreciation Expense***

Depreciation expense was $108.4 million for the year ended December 31, 2025, compared to $0.2 million for the year ended December 31, 2024. The comparative increase was primarily due to an increase in property and equipment as a result of the Beacon Acquisition.

***Amortization Expense***

Amortization expense was $314.7 million for the year ended December 31, 2025, compared to $0.9 million for the year ended December 31, 2024. The comparative increase was primarily due to amortization expense associated with new customer relationships and trade names intangible assets recognized as a result of the Beacon Acquisition.

***Interest (Expense) Income, Net***

Interest (expense) income, net was $(47.7) million for the year ended December 31, 2025, compared to $121.8 million for the year ended December 31, 2024. The comparative increase in interest expense was primarily due to additional debt that was issued by QXO Building Products in connection with the Beacon Acquisition, resulting in higher interest expense. Interest (expense) income, net for the year ended December 31, 2025 was partially offset by interest income of $125.8 million recognized on interest-bearing cash accounts. Interest (expense) income, net for the year ended December 31, 2024 was $121.8 million comprised of interest income of $121.9 million recognized on interest-bearing cash accounts and interest expense of $0.1 million.

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

***Loss on Debt Extinguishment***

Loss on debt extinguishment was $49.7 million for the year ended December 31, 2025 due to the principal prepayment of $1.40 billion under the Term Loan Facility in May 2025 and the subsequent refinancing of the Term Loan Facility in November 2025. The loss on debt extinguishment includes the pro-rata extinguishment of previously capitalized original issue discounts and debt issuance costs and third-party fees associated with the modification of the Term Loan Facility.

***Income Taxes***

The Company's effective tax rate for the year ended December 31, 2025 was 17.1%, compared to 45.0% for the year ended December 31, 2024. The Company's effective tax rates for the year ended December 31, 2025 and 2024 were based on the U.S. federal statutory tax rate of 21% and state jurisdictional income tax rates, adjusted for permanent items including compensation above $1 million, inclusive of equity awards, paid to covered employees under Internal Revenue Code Section 162(m), excess tax benefits related to equity compensation and non-deductible transaction costs due to the Beacon Acquisition, coupled with the pre-tax loss during the year ended December 31, 2025.

In July 2025, the One Big Beautiful Bill Act ("OBBBA") was enacted into law in the U.S. The OBBBA includes numerous provisions that affect corporate taxation, including changes to bonus depreciation, the expensing of domestic research costs, and modifications to certain U.S. international tax rules. The Company has analyzed the impacts of the OBBBA and reflected them in the current period. These impacts do not have a material effect on the tax rate for the year ended December 31, 2025.

Realization of our deferred tax assets depends on the reversal of our deferred tax liabilities. In considering our need for a valuation allowance, we consider our historical and future projected taxable income, as well as other objectively verifiable evidence, including our utilization of tax attributes net operating loss carryforwards through the realization of deferred tax liabilities.

We believe that it is at least more likely than not that the benefit of the year-to-date losses will be realized in future periods. However, our future effective tax rate may be affected by our ongoing assessment of the need for a valuation allowance on our deferred tax assets or liabilities, or changes in tax laws, regulations, or accounting principles, tax planning initiatives, as well as certain discrete items.

**Non-GAAP Financial Measures**

To provide investors with additional information regarding our financial results, we have disclosed here and elsewhere in this Annual Report Adjusted Gross Profit, Adjusted Gross Margin, Adjusted Net Income (Loss), Adjusted Diluted Earnings (Loss) per Common Share ("Adjusted Diluted EPS"), Adjusted EBITDA and Adjusted EBITDA Margin, which represent non-GAAP financial measures.

We calculate Adjusted Gross Profit as gross profit excluding inventory fair value adjustments, and we calculate Adjusted Gross Margin as Adjusted Gross Profit divided by net sales. We calculate Adjusted Net Income (Loss) as net income (loss) excluding amortization; stock-based compensation; loss on debt extinguishment; restructuring costs; transaction costs; transformation costs; inventory fair value adjustments; and the income tax associated with such adjusting items. We calculate Adjusted Diluted EPS as Adjusted Net Income (Loss) divided by the weighted-averaged number of common shares outstanding during the period plus the effect of dilutive common share equivalents based on the most dilutive result of the if-converted and two-class methods. We calculate Adjusted EBITDA as net income (loss) excluding depreciation; amortization; stock-based compensation; interest (income) expense, net; loss on debt extinguishment; provision for (benefit from) income taxes; restructuring costs; transaction costs; transformation costs; and inventory fair value adjustments that we do not consider representative of our underlying operations. We calculate Adjusted EBITDA Margin as Adjusted EBITDA divided by net sales.

We have provided a reconciliation below of Adjusted Gross Profit to gross profit, the most directly comparable financial measure as measured in accordance with GAAP, as well as a calculation of gross margin and Adjusted Gross Margin. We have provided a reconciliation below of Adjusted Net Income (Loss) to net income (loss), the most directly comparable financial measure as measured in accordance with GAAP, as well as a calculation of diluted earnings (loss) per common share and Adjusted Diluted EPS. We have also provided a reconciliation below of Adjusted EBITDA to net income (loss), the most directly comparable financial measure as measured in accordance with GAAP, as well as a calculation of net margin and Adjusted EBITDA Margin.

Management uses these non-GAAP financial measures in making financial, operating and planning decisions and evaluating QXO's ongoing performance. We believe these non-GAAP financial measures facilitate analysis of our ongoing business operations because they exclude items that may not be reflective of, or are unrelated to, QXO's core operating performance, and may assist investors with comparisons to prior periods and assessing trends in our underlying business. Other companies may calculate these non-GAAP financial measures differently, and therefore our measures may not be comparable to similarly titled measures of other companies.

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

***Adjusted Gross Profit and Adjusted Gross Margin***

A reconciliation of gross profit and gross margin to Adjusted Gross Profit and Adjusted Gross Margin is as follows:

---

| | | |
|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** |
| *(in millions, except percentages)* | **2025**<sup>(1)</sup> | **2024** |
| Gross profit | $1572.7 | $23.1 |
| &nbsp;&nbsp;&nbsp;&nbsp;Inventory fair value adjustments<sup>(2)</sup> | 131.7 |  |
| Adjusted Gross Profit | $1704.4 | $23.1 |
| Net sales | $6842.2 | $56.9 |
| *Gross margin*<sup>(3)</sup> | 23.0% | 40.6% |
| *Adjusted Gross Margin*<sup>(3)</sup> | 24.9% | 40.6% |
| <sup>(1)</sup> Results include Beacon's operations from the date of acquisition on April 29, 2025 through December 31, 2025. | <sup>(1)</sup> Results include Beacon's operations from the date of acquisition on April 29, 2025 through December 31, 2025. | <sup>(1)</sup> Results include Beacon's operations from the date of acquisition on April 29, 2025 through December 31, 2025. |
| <sup>(2)</sup> Represents the inventory fair value adjustments related to recording the inventory of acquired businesses at fair value on the date of acquisition. The inventory fair value adjustments related to acquired businesses were fully recognized during the year ended December 31, 2025. | <sup>(2)</sup> Represents the inventory fair value adjustments related to recording the inventory of acquired businesses at fair value on the date of acquisition. The inventory fair value adjustments related to acquired businesses were fully recognized during the year ended December 31, 2025. | <sup>(2)</sup> Represents the inventory fair value adjustments related to recording the inventory of acquired businesses at fair value on the date of acquisition. The inventory fair value adjustments related to acquired businesses were fully recognized during the year ended December 31, 2025. |
| <sup>(3)</sup> Gross margin is calculated as gross profit divided by net sales. Adjusted Gross Margin is calculated as Adjusted Gross Profit divided by net sales. | <sup>(3)</sup> Gross margin is calculated as gross profit divided by net sales. Adjusted Gross Margin is calculated as Adjusted Gross Profit divided by net sales. | <sup>(3)</sup> Gross margin is calculated as gross profit divided by net sales. Adjusted Gross Margin is calculated as Adjusted Gross Profit divided by net sales. |

---

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

***Adjusted Net Income and Adjusted Diluted EPS***

A reconciliation of net loss and diluted loss per common share to Adjusted Net Income and Adjusted Diluted EPS is as follows:

---

| | |
|:---|:---|
| | **Year Ended December 31,** |
| *(in millions, except per share amounts)* | **2025**<sup>(1)</sup> |
| Net loss | (279.4) |
| &nbsp;&nbsp;&nbsp;&nbsp;Benefit from income taxes | (57.7) |
| Loss before provision for income taxes | (337.1) |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization | 314.7 |
| &nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation | 144.5 |
| &nbsp;&nbsp;&nbsp;&nbsp;Loss on debt extinguishment<sup>(2)</sup> | 49.7 |
| &nbsp;&nbsp;&nbsp;&nbsp;Restructuring costs | 59.6 |
| &nbsp;&nbsp;&nbsp;&nbsp;Transaction costs | 83.7 |
| &nbsp;&nbsp;&nbsp;&nbsp;Transformation costs | 44.9 |
| &nbsp;&nbsp;&nbsp;&nbsp;Inventory fair value adjustments<sup>(3)</sup> | 131.7 |
| Adjusted income before provision for income taxes | 491.7 |
| &nbsp;&nbsp;&nbsp;&nbsp;Income tax associated with the adjustments above<sup>(4)</sup> | (129.0) |
| Adjusted Net Income | 362.7 |
| &nbsp;&nbsp;&nbsp;&nbsp;Convertible Preferred Stock dividend | (90.0) |
| &nbsp;&nbsp;&nbsp;&nbsp;Mandatory Convertible Preferred Stock dividend | (18.9) |
| &nbsp;&nbsp;&nbsp;&nbsp;Undistributed income allocated to participating securities | (5.5) |
| Adjusted Net Income attributable to common stockholders | 248.3 |
| Basic and diluted loss per common share | (0.63) |
| Adjusted Diluted EPS<sup>(5)</sup> | 0.34 |
| Adjusted diluted weighted-average common shares outstanding<sup>(5)</sup> | 727.3 |
| <sup>(1)</sup> Results include Beacon's operations from the date of acquisition on April 29, 2025 through December 31, 2025. | <sup>(1)</sup> Results include Beacon's operations from the date of acquisition on April 29, 2025 through December 31, 2025. |
| <sup>(2)</sup> Represents extinguishment costs resulting from the partial prepayment of borrowings under the Term Loan Facility (as defined below) in May 2025 and the subsequent refinancing of the Term Loan Facility (as defined below) in November 2025. | <sup>(2)</sup> Represents extinguishment costs resulting from the partial prepayment of borrowings under the Term Loan Facility (as defined below) in May 2025 and the subsequent refinancing of the Term Loan Facility (as defined below) in November 2025. |
| <sup>(3)</sup> Represents the inventory fair value adjustments related to recording the inventory of acquired businesses at fair value on the date of acquisition. The inventory fair value adjustments related to acquired businesses were fully recognized during the year ended December 31, 2025. | <sup>(3)</sup> Represents the inventory fair value adjustments related to recording the inventory of acquired businesses at fair value on the date of acquisition. The inventory fair value adjustments related to acquired businesses were fully recognized during the year ended December 31, 2025. |
| <sup>(4)</sup> The effective tax rate to calculate Adjusted Net Income (Loss) for the year ended December 31, 2025 is 26.3% due to the tax calculated on adjusted income (loss) before provision for income taxes. | <sup>(4)</sup> The effective tax rate to calculate Adjusted Net Income (Loss) for the year ended December 31, 2025 is 26.3% due to the tax calculated on adjusted income (loss) before provision for income taxes. |
| <sup>(5)</sup> Adjusted Diluted EPS is calculated as Adjusted Net Income (Loss) divided by the weighted-average number of common shares outstanding during the period plus the effect of dilutive common share equivalents based on the most dilutive result of the if-converted and two-class methods. | <sup>(5)</sup> Adjusted Diluted EPS is calculated as Adjusted Net Income (Loss) divided by the weighted-average number of common shares outstanding during the period plus the effect of dilutive common share equivalents based on the most dilutive result of the if-converted and two-class methods. |

---

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

***Adjusted EBITDA and Adjusted EBITDA Margin***

A reconciliation of net (loss) income and net margin to Adjusted EBITDA and Adjusted EBITDA Margin is as follows:

---

| | | |
|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** |
| *(in millions, except percentages)* | **2025**<sup>(1)</sup> | **2024** |
| Net (loss) income | $(279.4) | $28.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation | 108.4 | 0.2 |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization | 314.7 | 0.9 |
| &nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation | 144.5 | 34.4 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense (income), net | 47.7 | (121.8) |
| &nbsp;&nbsp;&nbsp;&nbsp;Loss on debt extinguishment<sup>(2)</sup> | 49.7 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;(Benefit from) provision for income taxes | (57.7) | 22.8 |
| &nbsp;&nbsp;&nbsp;&nbsp;Restructuring costs | 59.6 | 2.8 |
| &nbsp;&nbsp;&nbsp;&nbsp;Transaction costs | 83.7 | 12.8 |
| &nbsp;&nbsp;&nbsp;&nbsp;Transformation costs | 44.9 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Inventory fair value adjustments<sup>(3)</sup> | 131.7 |  |
| Adjusted EBITDA | $647.8 | $(19.9) |
| Net sales | $6842.2 | $56.9 |
| *Net margin*<sup>(4)</sup>  | (4.1)% | 49.2% |
| *Adjusted EBITDA Margin*<sup>(4)</sup> | 9.5% | (35.0)% |
| <sup>(1)</sup> Results include Beacon's operations from the date of acquisition on April 29, 2025 through December 31, 2025. | <sup>(1)</sup> Results include Beacon's operations from the date of acquisition on April 29, 2025 through December 31, 2025. | <sup>(1)</sup> Results include Beacon's operations from the date of acquisition on April 29, 2025 through December 31, 2025. |
| <sup>(2)</sup> Represents extinguishment costs resulting from the partial prepayment of borrowings under the Term Loan Facility (as defined below) in May 2025 and the subsequent refinancing of the Term Loan Facility (as defined below) in November 2025. | <sup>(2)</sup> Represents extinguishment costs resulting from the partial prepayment of borrowings under the Term Loan Facility (as defined below) in May 2025 and the subsequent refinancing of the Term Loan Facility (as defined below) in November 2025. | <sup>(2)</sup> Represents extinguishment costs resulting from the partial prepayment of borrowings under the Term Loan Facility (as defined below) in May 2025 and the subsequent refinancing of the Term Loan Facility (as defined below) in November 2025. |
| <sup>(3)</sup> Represents the inventory fair value adjustments related to recording the inventory of acquired businesses at fair value on the date of acquisition. The inventory fair value adjustments related to acquired businesses were fully recognized during the year ended December 31, 2025. | <sup>(3)</sup> Represents the inventory fair value adjustments related to recording the inventory of acquired businesses at fair value on the date of acquisition. The inventory fair value adjustments related to acquired businesses were fully recognized during the year ended December 31, 2025. | <sup>(3)</sup> Represents the inventory fair value adjustments related to recording the inventory of acquired businesses at fair value on the date of acquisition. The inventory fair value adjustments related to acquired businesses were fully recognized during the year ended December 31, 2025. |
| <sup>(4)</sup> Net margin is calculated as net income (loss) divided by net sales. Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by net sales. | <sup>(4)</sup> Net margin is calculated as net income (loss) divided by net sales. Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by net sales. | <sup>(4)</sup> Net margin is calculated as net income (loss) divided by net sales. Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by net sales. |

---

**Seasonality**

The demand for exterior building materials is closely correlated to both seasonal changes and unpredictable weather patterns, therefore demand fluctuations are expected. In general, we expect our net sales and net income to be the highest in quarters ending June 30, September 30, and December 31, which represent the peak months of construction and re-roofing. Conversely, we expect low net income levels or net losses in quarters ending March 31, when winter construction cycles and cold weather patterns have an adverse impact on our customers' ability to conduct their business.

**Liquidity and Capital Resources**

The Company's cash balance was $2.36 billion as of December 31, 2025 and consisted primarily of cash on deposit with banks and investments in money market funds. In addition, we may choose to raise additional funds at any time through equity or debt financing arrangements, which may or may not be needed for additional working capital, acquisitions or other strategic investments. We continually evaluate our liquidity requirements considering our operating needs, growth initiatives and capital resources. Following the Beacon Acquisition, our primary sources of liquidity are cash on the balance sheet, cash generated by operations and borrowings under the ABL Facility. Our primary uses of cash after the Beacon Acquisition are working capital requirements, debt service requirements and capital expenditures. We believe that our existing liquidity and sources of capital are sufficient to support our operations over the next 12 months.

From time to time, depending upon market and other conditions, as well as upon our cash balances and liquidity, we, our subsidiaries or our affiliates may acquire our outstanding debt securities or our other indebtedness through open market purchases, privately negotiated transactions, tender offers, redemption or otherwise, upon such terms and at such prices as we, our subsidiaries or our affiliates may determine for cash or other consideration.

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

<u>Convertible Preferred Stock</u>

The Company has a quarterly dividend policy in place for its Convertible Preferred Stock, and dividends are paid when declared by the board of directors. During the year ended December 31, 2025, the Company paid $90.0 million of dividends to holders of Convertible Preferred Stock. Subsequent to the close of the year ended December 31, 2025, the Company paid $22.5 million of quarterly dividends to holders of Convertible Preferred Stock. These dividends are part of the Company's ongoing cash obligations and are considered when evaluating overall liquidity needs. For additional information regarding the Company's Convertible Preferred Stock see, Note 6 - *Equity* of Item 8 of Part II, "Financial Statements and Supplementary Data" of this Annual Report.

<u>Private Placements</u>

On June 13, 2024, the Company entered into purchase agreements with certain institutional and accredited investors to issue and sell in a private placement an aggregate of 340.9 million shares of the Company's common stock at a price of $9.14 per share, and pre-funded warrants (the "Pre-Funded Warrants") to purchase 42.0 million shares of the Company's common stock at a price of $9.13999 per Pre-Funded Warrant. Each Pre-Funded Warrant has an exercise price of $0.00001 per share, is exercisable immediately and until the Pre-Funded Warrant is exercised in full. The closing of the private placement was completed on July 19, 2024.

On July 22, 2024, the Company entered into purchase agreements with certain institutional and accredited investors to privately place 67.8 million shares of its common stock at a price of $9.14 per share. The closing of the private placement was completed on July 25, 2024.

On March 17, 2025, the Company entered into purchase agreements with certain institutional investors to privately place 67.5 million shares of its common stock at a price of $12.30 per share. The closing of the private placement was contingent upon the completion of the Beacon Acquisition and was completed on April 29, 2025. As a result of the closing, the Company raised $823.8 million in net proceeds, after deducting offering costs of $6.8 million, to partially fund the Beacon Acquisition and related costs.

<u>Issuance of Mandatory Convertible Preferred Stock</u> 

On May 27, 2025, the Company completed a preferred stock offering, through which QXO issued and sold 11.5 million Depositary Shares, each representing a 1/20th interest in a share of the Company's 5.50% Series B Mandatory Convertible Preferred Stock, liquidation preference $1,000 per share, par value $0.001 per share. The amount issued included 1.5 million Depositary Shares issued pursuant to the exercise in full of the option granted to the underwriters to purchase additional Depositary Shares. The Company received net proceeds from the offering of $558.1 million, after deducting underwriting discounts, commissions and offering expenses of $16.9 million.

*Dividends* 

The Mandatory Convertible Preferred Stock will accumulate dividends (which may be paid in cash or, subject to certain limitations, in shares of common stock or in any combination of cash and common stock) at a rate per annum equal to 5.50% on the liquidation preference of $1,000 per share, payable when, as and if declared by the Company's board of directors (or an authorized committee thereof), on February 15, May 15, August 15 and November 15 of each year, beginning on August 15, 2025 and ending on, and including, May 15, 2028. Given the requirement to pay dividends in any settlement outcome of the Mandatory Convertible Preferred Stock, the Company accrues dividends whether or not they are formally declared by the Company's board of directors. During the year ended December 31, 2025, the Company paid $14.8 million of dividends to holders of Mandatory Convertible Preferred Stock. Subsequent to the close of the year ended December 31, 2025, the Company paid $7.9 million of quarterly dividends to holders of Mandatory Convertible Preferred Stock. These dividends are part of the Company's ongoing cash obligations and are considered when evaluating overall liquidity needs. For additional information regarding the Company's Mandatory Convertible Preferred Stock see, Note 6 - *Equity* of Item 8 of Part II, "Financial Statements and Supplementary Data" of this Annual Report.

*Mandatory Conversion*

The following table illustrates the conversion rate per share of the Mandatory Convertible Preferred Stock, subject to certain anti-dilution adjustments, based on the applicable market value of the common stock:

---

| | |
|:---|:---|
| **Applicable Market Value of Common Stock** | **Conversion Rate per Share of Mandatory Convertible Preferred Stock** |
| Greater than $20.2126 (the "Threshold Appreciation Price") | 49.4740 shares of common stock |
| Equal to or less than the Threshold Appreciation Price but greater than or equal to the Initial Price | Between 49.4740 and 60.6060 shares of common stock, determined by dividing $1,000 by the applicable market value |
| Less than $16.50 (the "Initial Price") | 60.6060 shares of common stock |

---

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

The following table illustrates the conversion rate per Depositary Share, subject to certain anti-dilution adjustments, based on the applicable market value of the common stock:

---

| | |
|:---|:---|
| **Applicable Market Value of Common Stock** | **Conversion Rate per Depository Share Representing a 1/20th interest in a share of the Mandatory Convertible Preferred Stock**  |
| Greater than the Threshold Appreciation Price | 2.4737 shares of common stock |
| Equal to or less than the Threshold Appreciation Price but greater than or equal to the Initial Price | Between 2.4737 and 3.0303 shares of common stock, determined by dividing $50 by the applicable market value |
| Less than the Initial Price | 3.0303 shares of common stock |

---

*Optional Conversion*

Other than the occurrence of a fundamental change (as defined in the Company's Certificate of Designations relating to the Mandatory Convertible Preferred Stock) at any time prior to May 15, 2028, a holder of Mandatory Convertible Preferred Stock may elect to convert such holder's shares of Mandatory Convertible Preferred Stock, in whole or in part, at the minimum conversion rate of 49.4740 shares of common stock per share of Mandatory Convertible Preferred Stock (equivalent to 2.4737 shares of common stock per Depositary Share), subject to certain anti-dilution and other adjustments. Because each Depositary Share represents a 1/20th fractional interest in a share of Mandatory Convertible Preferred Stock, a holder of Depositary Shares may convert its Depositary Shares only in lots of 20 Depositary Shares.

*Fundamental Change Conversion* 

If a fundamental change occurs on or prior to May 15, 2028, holders of the Mandatory Convertible Preferred Stock will have the right to convert their shares of Mandatory Convertible Preferred Stock, in whole or in part, into shares of common stock at the fundamental change conversion rate during the period beginning on, and including, the effective date of such fundamental change and ending on, and including, the earlier of (a) the date that is 20 calendar days after such effective date (or, if later, the date that is 20 calendar days after holders receive notice of such fundamental change) and (b) May 15, 2028. For the avoidance of doubt, the period described in the immediately preceding sentence may not end on a date that is later than May 15, 2028.

*Ranking* 

The Mandatory Convertible Preferred Stock ranks, with respect to dividend rights and distribution of assets upon liquidation, winding-up or dissolution, (i) senior to the Company's common stock and each other class or series of capital stock, whether outstanding or established after the date of issuance of the Mandatory Convertible Preferred Stock, the terms of which do not expressly provide that it ranks senior to or on a parity with the Mandatory Convertible Preferred Stock as to payment of dividends and distribution of assets upon liquidation, winding-up or dissolution, and (ii) junior to the Convertible Preferred Stock. The Mandatory Convertible Preferred Stock ranks on a parity with or junior to each class or series of capital stock, the terms of which expressly provide for a pari passu or senior ranking, respectively, relative to the Mandatory Convertible Preferred Stock.

*Voting Rights*

Holders of Mandatory Convertible Preferred Stock will not have voting rights, except with respect to issuances of securities senior to the Mandatory Convertible Preferred Stock, amendments to the Company's Fifth Amended and Restated Certificate of Incorporation that would materially and adversely affect the rights of the holders of Mandatory Convertible Preferred Stock, or in the event of a merger, consolidation, exchange or reclassification involving the Mandatory Convertible Preferred Stock, or non-payment of dividends for six consecutive quarters.

<u>Registered Equity Offerings</u>

In April 2025, the Company sold 37.7 million shares of the Company's common stock in an underwritten public offering at a price of $13.25 per share. The closing of the equity offering was completed on April 21, 2025 and the Company raised $487.7 million in net proceeds from the equity offering, after deducting offering costs of $12.3 million. The Company also granted the underwriters in the public offering a 30-day option to purchase up to an additional 5.7 million shares of the Company's common stock at a price of $13.25 per share less underwriting discounts and commissions. On May 5, 2025, the option was partially exercised with respect to 4.0 million shares resulting in an additional $51.8 million of net proceeds. The remaining option to purchase additional shares expired unexercised at the end of the 30-day period.

In May 2025, the Company sold 48.5 million shares of the Company's common stock in an underwritten public offering at a price of $16.50 per share. The Company also granted the underwriters in the public offering a 30-day option to purchase up to an additional 7.3 million shares of the Company's common stock at a price of $16.50 per share less underwriting discounts and commissions. On May 21, 2025, the option was exercised in full. The closing of the equity offering was completed on May 23, 2025 and the Company raised $892.4 million in net proceeds from the equity offering, after deducting offering costs of $27.6 million.

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

In June 2025, the Company sold 89.9 million shares of the Company's common stock in an underwritten public offering at a price of $22.25 per share. The closing of the equity offering was completed on June 26, 2025 and the Company raised $1.96 billion in net proceeds from the equity offering, after deducting offering costs of $37.8 million. The Company also granted the underwriters in the public offering a 30-day option to purchase up to an additional 13.5 million shares of the Company's common stock at a price of $22.25 per share less underwriting discounts and commissions. On July 24, 2025, the option was partially exercised with respect to 1.7 million shares resulting in additional net proceeds of $38.1 million. The remaining option to purchase additional shares expired unexercised at the end of the 30-day period.

In January 2026, the Company sold 31.6 million shares of the Company's common stock in an underwritten public offering at a price of $23.80 per share. The closing of the equity offering was completed on January 20, 2026 and the Company raised $749.4 million in net proceeds from the equity offering, after deducting offering costs of $3.8 million. The Company also granted the underwriters in the public offering a 30-day option to purchase up to an additional 4.7 million shares of the Company's common stock at a price of $23.80 per share less underwriting discounts and commissions. The option to purchase additional shares expired unexercised at the end of the 30-day period.

<u>January 2026 Investment Agreement</u>

Subsequent to the close of the year ended December 31, 2025, the Company entered into an investment agreement in January 2026 (the "January 2026 Investment Agreement") with AP Quince Holdings, L.P., a fund managed by affiliates of Apollo Global Management, Inc., and the other investors party thereto (collectively, the "January 2026 Investors"). Pursuant to the January 2026 Investment Agreement, the January 2026 Investors committed until July 15, 2026 (the "Initial Commitment Period") to purchase up to 300,000 shares of a new series of Series C Convertible Perpetual Preferred Stock, par value $0.001 per share, for an aggregate purchase price of $3.0 billion to fund one or more acquisitions of assets, equity or businesses (or portions thereof) for a purchase price in excess of $1.5 billion or as otherwise determined by the Company (each, a "Qualifying Acquisition"). The Initial Commitment Period will be extended with respect to the commitment for a Qualifying Acquisition up to an additional 12 months if a definitive acquisition agreement for such Qualifying Acquisition is executed before the expiration of the Initial Commitment Period.

<u>Senior Secured Notes</u>

On April 29, 2025, Merger Sub (the "Issuer") completed the issuance and sale of $2.25 billion in aggregate principal amount of 6.75% Senior Secured Notes due 2032 (the "Notes"). The Notes were issued pursuant to an Indenture, dated as of April 29, 2025 (as supplemented, the "Indenture"), and, upon consummation of the Beacon Acquisition, QXO Building Products assumed the obligations under the Notes and the Indenture and certain of QXO Building Products' subsidiaries (collectively, the "Subsidiary Guarantors") guaranteed QXO Building Products' obligations under the Notes and the Indenture. The Notes are secured by first-priority liens on substantially all assets of the Issuer and the Subsidiary Guarantors, other than the ABL Priority Collateral (as defined below) (the "Notes Priority Collateral") and by second-priority liens on substantially all of the Issuer's and the Subsidiary Guarantors' inventory, receivables and related assets (the "ABL Priority Collateral"), in each case, subject to certain exceptions and permitted liens. The Notes will mature on April 30, 2032. Interest on the Notes accrues at 6.75% per annum and will be paid semi-annually, in arrears, on April 30 and October 30 of each year, beginning October 30, 2025. Proceeds from the Notes were used to partially fund the Beacon Acquisition and related transaction expenses.

On or after April 30, 2028, the Issuer may redeem the Notes at its option, in whole at any time or in part from time to time, at the redemption prices set forth in the Indenture. In addition, prior to April 30, 2028, the Issuer may redeem the Notes at its option, in whole at any time or in part from time to time, at a redemption price equal to 100% of the principal amount of the Notes redeemed, plus a "make-whole" premium and accrued and unpaid interest, if any. Notwithstanding the foregoing, at any time prior to April 30, 2028, the Issuer may also redeem up to 50% of the aggregate principal amount of the Notes with funds in an aggregate amount not to exceed the net cash proceeds from certain equity offerings at a redemption price equal to 106.75% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any. In addition, prior to April 30, 2028, the Issuer may redeem during each twelve-month period up to 10% of the original aggregate principal amount of the Notes at a redemption price equal to 103%, plus accrued and unpaid interest, if any.

The Indenture includes customary affirmative and negative covenants with respect to the Issuer and its restricted subsidiaries. These covenants are subject to a number of important qualifications and exceptions. Additionally, upon the occurrence of specified change of control events, the Issuer must offer to repurchase the Notes at 101% of the principal amount, plus accrued and unpaid interest, if any, to, but excluding, the purchase date. The Indenture also provides for customary events of default. As of December 31, 2025, the Issuer and its restricted subsidiaries were in compliance with these covenants.

Debt issuance costs of $22.2 million related to the Notes were capitalized and are being amortized over the term of the financing arrangement.

As of December 31, 2025, the outstanding balance on the Notes, net of $20.5 million of unamortized debt issuance costs, was $2.23 billion.

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

<u>Term Loan Facility</u>

On April 29, 2025, Merger Sub, as initial borrower, entered into a Term Loan Credit Agreement (the "Term Loan Credit Agreement") with Queen HoldCo, LLC ("Holdings"), the lenders party thereto and Goldman Sachs Bank USA, as administrative agent, which provides for senior secured financing consisting of a term loan facility (the "Term Loan Facility") in an aggregate principal amount of $2.25 billion. Upon the consummation of the Beacon Acquisition, QXO Building Products entered into a joinder to the Term Loan Credit Agreement as the surviving borrower (the "Borrower"). The facility matures on April 30, 2032. Proceeds from the Term Loan Facility were used to partially fund the Beacon Acquisition and related transaction expenses.

Borrowings under the Term Loan Facility bear interest at variable rates based on Term SOFR or a base rate, in each case plus an applicable margin. The facility requires scheduled quarterly amortization payments in an annual amount equal to 1.0% of the original principal amount of borrowings under the Term Loan Facility, with the remaining balance due at maturity. The Term Loan Facility also requires the Borrower to make certain mandatory prepayments. The Borrower can make voluntary prepayments at any time without penalty, except in connection with a repricing event in respect of the Term Loan Facility, subject to customary breakage costs. Any refinancing through the issuance of certain debt or any repricing amendment, in either case, that constitutes a "repricing event" applicable to the term loans resulting in a lower yield occurring at any time during the first six months after the closing date of the Term Loan Facility will be accompanied by a 1.00% prepayment premium or fee, as applicable.

The Term Loan Facility is unconditionally guaranteed by Holdings on a limited-recourse basis and secured by a first-priority lien on the equity interests of the Borrower held by Holdings. The Term Loan Facility is also guaranteed by each Subsidiary Guarantor and secured by a first-priority lien with respect to the Notes Priority Collateral and a second-priority lien with respect to the ABL Priority Collateral. The Term Loan Facility is secured on a ratable basis with the Notes with respect to the Notes Priority Collateral and the ABL Priority Collateral.

The Term Loan Credit Agreement includes customary affirmative and negative covenants with respect to the Borrower and its restricted subsidiaries. These covenants are subject to a number of important qualifications and exceptions. The Term Loan Credit Agreement contains certain customary events of default, including relating to a change of control. As of December 31, 2025, the Borrower and its restricted subsidiaries were in compliance with these covenants.

The principal amount of borrowing under the Term Loan Facility was reduced by an original issue discount ("OID") of 1%. OID costs of $22.5 million and debt issuance costs of $50.9 million related to the Term Loan Facility were capitalized and are being amortized over the term of the financing arrangement.

On May 29, 2025, the Borrower made a voluntary principal prepayment of $1.40 billion under the Term Loan Facility. As a result, the Borrower was relieved of its obligation to make quarterly amortization payments in an annual amount equal to 1.0% of the original principal amount of borrowings under the Term Loan Facility. Additionally, as a result of the principal prepayment, the Borrower recognized a loss on debt extinguishment of $45.7 million comprised of $14.0 million of unamortized OID costs and $31.7 million of unamortized debt issuance costs related to the Term Loan Facility.

On November 5, 2025, the Borrower amended the Term Loan Credit Agreement in order to refinance the Term Loan Facility. The amendment reduced the applicable margin for borrowings under the Term Loan Facility from 3.00% to 2.00% for Term SOFR borrowings and from 2.00% to 1.00% for base rate borrowings (the "Term Loan Refinancing"). As a result of the Term Loan Refinancing, the Borrower recognized a loss on debt extinguishment of $4.0 million, which is comprised of $0.9 million of unamortized OID costs, $2.2 million of unamortized debt issuance costs, and $0.9 million of third-party fees associated with the modification of the Term Loan Facility. Additionally, new debt issuance costs of $0.1 million were capitalized and are being amortized over the term of the financing arrangement.

The loss on debt extinguishment resulting from the principal prepayment and the subsequent Term Loan Refinancing was separately recognized on the consolidated statements of operations.

As of December 31, 2025, the outstanding balance on the Term Loan Facility, net of $6.8 million of unamortized OID costs and $15.4 million of unamortized debt issuance costs, was $827.8 million.

<u>ABL Credit Agreement</u>

On April 29, 2025, Merger Sub, as initial borrower, entered into the Asset-Based Revolving Credit Agreement (the "ABL Credit Agreement"), with Holdings, the lenders party thereto and Citibank, N.A., as administrative agent and collateral agent, which provides for an asset-based revolving credit facility (the "ABL Facility" and, together with the Term Loan Facility, the "Credit Facilities"), with an aggregate borrowing availability equal to the lesser of $2.0 billion, and the borrowing base. Upon the consummation of the Beacon Acquisition, the Borrower entered into a joinder to the ABL Credit Agreement as the surviving borrower. The ABL Facility matures on April 29, 2030. Based on the Borrower's borrowing base as of December 31, 2025, the Borrower had $1.97 billion borrowing capacity under the ABL Facility.

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

Borrowings under the ABL Facility bear interest at a rate equal to, at the Borrower's option, either (a) (x) Term SOFR determined by reference to the secured overnight financing rate published by the Federal Reserve Bank of New York, which rate shall be no less than zero or (y) a base rate determined by reference to the highest of (i) the federal funds rate plus 0.50% per annum, (ii) the prime rate quoted by the Wall Street Journal as the "Prime Rate" and (iii) the sum of one-month adjusted Term SOFR plus 1.00% per annum, which base rate shall be no less than 1.00%, or (b) (x) with respect to borrowings of Canadian dollars, Term CORRA determined by reference to the interbank offered rate administered by the CORRA Administrator, which rate shall be no less than zero or (y) a base rate determined by reference to the highest of (i) zero (0%), (ii) the one-month Term CORRA plus 1.00% per annum or (iii) the prime rate reported by Reuters, in each case plus an applicable margin based on excess availability set forth in the ABL Credit Agreement. The Borrower is also required to pay a commitment fee equal to 0.20% per annum (depending on the average utilization of the commitments) to the lenders under the ABL Facility in respect of the unutilized commitments thereunder. The Borrower can make voluntary prepayments at any time without penalty, subject to customary breakage costs.

The ABL Facility (and at the Borrower's option certain hedging, cash management and bank product obligations secured under the ABL Facility) is unconditionally guaranteed by Holdings on a limited-recourse basis and secured by a second-priority lien on the equity interests of the Borrower held by Holdings. The ABL Facility is also guaranteed by each Subsidiary Guarantor and secured by a second-priority lien with respect to the Notes Priority Collateral and a first-priority lien with respect to the ABL Priority Collateral.

The ABL Credit Agreement includes customary affirmative and negative covenants with respect to the Borrower and its restricted subsidiaries. These covenants are subject to a number of important qualifications and exceptions. The ABL Credit Agreement contains certain customary events of default, including relating to a change of control.

The ABL Facility requires that the Borrower, commencing on or after the last day of the first full fiscal quarter ending after the closing date of the ABL Facility, maintain a minimum fixed charge coverage ratio of 1.0 to 1.0 at any time that availability is less than the greater of (x) $120 million and (y) 10% of the lesser of (i) the borrowing base at such time and (ii) the aggregate amount of ABL Facility commitments at such time. As of December 31, 2025, the Borrower and its restricted subsidiaries were in compliance with these covenants.

Debt issuance costs of $18.8 million related to the ABL Facility were capitalized and are being amortized ratably over the term of the financing arrangement. The debt issuance costs related to the ABL Facility are presented as an asset, included in other assets, net on the consolidated balance sheets. As of December 31, 2025, there were $16.3 million of unamortized debt issuance costs related to the ABL Facility.

As of December 31, 2025, there was no outstanding balance on the ABL Facility. The Borrower and its restricted subsidiaries had $21.2 million in outstanding standby letters of credit issued under the ABL Facility as of December 31, 2025.

The following table summarizes our cash flows for the periods indicated:

---

| | | |
|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** |
| *(in millions)* | **2025** | **2024** |
| Net cash provided by operating activities | $261.4 | $84.8 |
| Net cash used in investing activities | (10630.3) | (0.1) |
| Net cash provided by financing activities | 7662.8 | 4981.1 |
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | (0.5) |  |
| Net (decrease) increase in cash, cash equivalents and restricted cash | $(2706.6) | $5065.8 |

---

***Operating Activities***

Net cash provided by operating activities was $261.4 million for the year ended December 31, 2025, compared to $84.8 million for the year ended December 31, 2024. Cash provided by operations increased $176.6 million during the year ended December 31, 2025. The increase in cash provided by operations was primarily due to the seasonal timing of net working capital requirements for inventory purchases and cash collections as a result of Beacon's operations being included for the period of April 29, 2025 through December 31, 2025.

***Investing Activities***

Net cash used in investing activities was $10.63 billion for the year ended December 31, 2025, compared to $0.1 million for the year ended December 31, 2024. Cash used in investing activities increased $10.63 billion during the year ended December 31, 2025 primarily due to the Beacon Acquisition and an increase in capital expenditures during the period. See Note 3 – *Acquisitions* of Item 8 of Part II, "Financial Statements and Supplementary Data" of this Annual Report for more information.

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

***Financing Activities***

Net cash provided by financing activities was $7.66 billion for the year ended December 31, 2025, compared to $4.98 billion for the year ended December 31, 2024. Cash provided by financing activities increased $2.68 billion during the year ended December 31, 2025 primarily due to the issuance of the Notes, net borrowings under our Term Loan Facility, and net proceeds from the issuance of common stock and Mandatory Convertible Preferred Stock during the period, which were partially offset by net proceeds from the issuance of common stock, Convertible Preferred Stock and warrants in the prior year.

**Critical Accounting Estimates**

We prepare our consolidated financial statements in accordance with GAAP, which require our management to make estimates that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the balance sheet dates, as well as the reported amounts of revenues and expenses during the reporting periods. To the extent that there are material differences between these estimates and actual results, our financial condition or results of operations would be affected. We base our estimates on our own historical experience and other assumptions that we believe are reasonable after taking account of our circumstances and expectations for the future based on available information. We evaluate these estimates on an ongoing basis.

We consider an accounting estimate to be critical if: (i) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from period to period or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations. While there are a number of accounting policies, methods, and estimates affecting our consolidated financial statements, we consider business combinations to be a critical accounting estimate.

***Business Combinations***

We record acquisitions resulting in the consolidation of a business using the acquisition method of accounting. Under this method, we record the assets acquired, including intangible assets that can be identified, and liabilities assumed based on their estimated fair values at the date of acquisition. Various Level 3 fair value assumptions are used in the determination of these estimated fair values, including items such as sales growth rates, cost synergies, customer attrition rates, discount rates, and other prospective financial information. The purchase price in excess of the fair value of the assets acquired and liabilities assumed is recorded as goodwill. Estimates associated with the accounting for acquisitions may change as additional information becomes available regarding the assets acquired and liabilities assumed. We believe these estimates are based on reasonable assumptions, however they are inherently uncertain and unpredictable, therefore actual results may differ. During the measurement period, which is up to one year from the acquisition date, we may adjust provisional amounts that were recognized at the acquisition date to reflect new information obtained about facts and circumstances that existed as of the acquisition date. Transaction costs associated with acquisitions are expensed as incurred and are included as a component of selling, general and administrative expense within the consolidated statements of operations.

**Item 7A. Quantitative and Qualitative Disclosures about Market Risk** 

We have operations principally within the U.S. and therefore have only minimal foreign currency exposure. We are exposed to market risks in the ordinary course of our business, including the effects of interest rate changes. Information relating to quantitative and qualitative disclosures about these market risks is set forth below.

*Interest Rate Risk*

Our cash equivalents consist primarily of demand and money market accounts and have an original maturity date of 90 days or less. The fair value of our cash and cash equivalents would not be significantly affected by either an increase or decrease in interest rates due mainly to the short-term nature of these instruments. As of December 31, 2025, we had no outstanding borrowings under our asset-based revolving lines of credit and outstanding borrowings, net of unamortized debt issuance costs, of $827.8 million under our Term Loan Facility and $2.23 billion under our Notes. Borrowings under our ABL Facility and Term Loan Facility incur interest on a floating rate basis while borrowings represented by our Notes incur interest on a fixed rate basis. As of December 31, 2025, our weighted-average effective interest rate on debt instruments with variable rates was 5.72%. A 10% increase or decrease in interest rates would not have a material effect on our interest income or expense.

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

**Item 8. Financial Statements and Supplementary Data**

**INDEX TO CONSOLIDATED FINANCIAL STATEMENTS**

---

| | |
|:---|:---|
| | **<u>Page</u>** |
| <u>[Report of Independent Registered Public Accounting Firm](#i7078bf44f9cb4e28a3cd96e853af2352_772)</u> (PCAOB ID: 34) | <u>[37](#i7078bf44f9cb4e28a3cd96e853af2352_772)</u> |
| <u>[Report of Independent Registered Public Accounting Firm](#i7078bf44f9cb4e28a3cd96e853af2352_549755814727)</u> (PCAOB ID: 688) | <u>[39](#i7078bf44f9cb4e28a3cd96e853af2352_549755814727)</u> |
| <u>[Consolidated Financial Statements](#i7078bf44f9cb4e28a3cd96e853af2352_782)</u> | <u>[40](#i7078bf44f9cb4e28a3cd96e853af2352_782)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;<u>[Consolidated Balance Sheets](#i7078bf44f9cb4e28a3cd96e853af2352_16)</u> | <u>[40](#i7078bf44f9cb4e28a3cd96e853af2352_16)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;<u>[Consolidated Statements of Operations](#i7078bf44f9cb4e28a3cd96e853af2352_19)</u> | <u>[41](#i7078bf44f9cb4e28a3cd96e853af2352_19)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;<u>[Consolidated Statements of Comprehensive (Loss) Income](#i7078bf44f9cb4e28a3cd96e853af2352_22)</u> | <u>[42](#i7078bf44f9cb4e28a3cd96e853af2352_22)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;<u>[Consolidated Statements of Stockholders' Equity](#i7078bf44f9cb4e28a3cd96e853af2352_25)</u> | <u>[43](#i7078bf44f9cb4e28a3cd96e853af2352_25)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;<u>[Consolidated Statements of Cash Flows](#i7078bf44f9cb4e28a3cd96e853af2352_28)</u> | <u>[44](#i7078bf44f9cb4e28a3cd96e853af2352_28)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;<u>[Notes to Consolidated Financial Statements](#i7078bf44f9cb4e28a3cd96e853af2352_31)</u> | <u>[45](#i7078bf44f9cb4e28a3cd96e853af2352_31)</u> |

---

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

To the Stockholders and the Board of Directors of QXO, Inc.

**Opinion on the Financial Statements**

We have audited the accompanying consolidated balance sheet of QXO, Inc. (the "Company") as of December 31, 2025, the related consolidated statements of operations, comprehensive (loss) income, stockholders' equity, and cash flows, for the year ended December 31, 2025, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025, and the results of its operations and its cash flows for the year ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

**Basis for Opinion**

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

**Critical Audit Matter**

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

***Customer Relationships Intangible Asset — Refer to Notes 2 and 3 to the financial statements***

*Critical Audit Matter Description*

The Company completed the acquisition of Beacon Roofing Supply, Inc. ("Beacon") for $10.6 billion on April 29, 2025. The Company accounted for the acquisition under the acquisition method of accounting for business combinations. Accordingly, the purchase price was allocated to the assets acquired and liabilities assumed based on their respective fair values, including a customer relationship intangible asset of $3,900.6 million. Management estimated the fair value of the customer relationship intangible asset using the multi-period excess earnings method, which is an income approach methodology. A key assumption in the fair value measurement is the customer attrition rate ("attrition rate"), which projects the percentage of customer revenue from an existing customer base that is lost over the customer relationship intangible asset's estimated useful life.

We identified the attrition rate assumption as a critical audit matter because of its significance to the fair value of the customer relationships intangible asset. This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value and data specialists when performing audit procedures to evaluate the reasonableness of management's selected attrition rate.

*How the Critical Audit Matter Was Addressed in the Audit*

Our audit procedures related to the attrition rate used in valuing the customer relationship included the following, among others:

&nbsp;&nbsp;&nbsp;&nbsp;• We evaluated management's process for estimating the attrition rate by:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ Comparing historical customer retention data for Beacon to management's assumptions.

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ Assessing the completeness and accuracy of the underlying data used to determine the estimated attrition rate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ Performing a retrospective review of the attrition rate using actual results.

&nbsp;&nbsp;&nbsp;&nbsp;• With the assistance of our fair value and data specialists, we evaluated the reasonableness of the attrition rate by:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ Performing sensitivity analyses to assess the impact of reasonably possible changes in the attrition rate on the calculated fair value of the customer relationship intangible asset.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ Developing a range of independent attrition rate estimates using both historical Beacon Roofing Supply experience and relevant industry benchmarks and comparing these to the rate selected by management.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ Recalculating the attrition rate and verifying the mathematical accuracy of the fair value model.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ Performing a benchmarking analysis within transactions conducted in the building product distribution industry.

/s/ DELOITTE & TOUCHE LLP

Tempe, Arizona

February 27, 2026

We have served as the Company's auditor since 2025.

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

To the Stockholders and Board of Directors of QXO, Inc.

**Opinion on the Financial Statements**

We have audited the accompanying consolidated balance sheet of QXO, Inc. (the "Company") as of December 31, 2024, the related consolidated statements of operations, stockholders' equity and cash flows for the year ended December 31, 2024, and the related notes (collectively referred to as the "financial statements"). In our opinion, based on our audit, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows for the year ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

**Basis for Opinion**

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

/s/ MARCUM LLP

Marcum LLP

Marlton, New Jersey

March 4, 2025

We have served as the Company's auditor from 2004 to 2025.

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

**QXO, INC. AND SUBSIDIARIES**

**Consolidated Balance Sheets** 

(in millions, except per share amounts)

---

| | | |
|:---|:---|:---|
| | **December 31,<br>2025** | **December 31,<br>2024** |
| | **December 31,<br>2025** | **December 31,<br>2024** |
| **Assets** | | |
| Current assets: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | $2361.6 | $5068.5 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable, net | 1145.1 | 2.7 |
| &nbsp;&nbsp;&nbsp;&nbsp;Inventories, net | 1497.3 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Vendor rebates receivable | 427.0 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Income tax receivable | 31.6 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 83.7 | 18.4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 5546.3 | 5089.6 |
| Property and equipment, net | 688.6 | 0.4 |
| Goodwill | 5111.3 | 1.2 |
| Intangibles, net | 3819.1 | 4.0 |
| Operating lease right-of-use assets, net | 689.6 | 0.3 |
| Deferred income tax assets, net |  | 2.6 |
| Other assets, net | 32.4 | 0.2 |
| Total assets | $15887.3 | $5098.3 |
| **Liabilities and Stockholders' Equity** |  |  |
| Current liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | $819 | $6.2 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses | 574.3 | 38.6 |
| &nbsp;&nbsp;&nbsp;&nbsp;Current portion of operating lease liabilities | 107.5 | 0.2 |
| &nbsp;&nbsp;&nbsp;&nbsp;Current portion of finance lease liabilities | 49.2 | 0.1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 1550.0 | 45.1 |
| Long-term debt, net | 3057.3 |  |
| Deferred income tax liabilities, net | 847.2 |  |
| Operating lease liabilities | 561.8 | 0.1 |
| Finance lease liabilities | 138.7 | 0.2 |
| Other long-term liabilities | 25.5 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 6180.5 | 45.4 |
| Commitments and contingencies (Note 11) |  |  |
| Stockholders' equity: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Mandatory Convertible Preferred Stock, $0.001 par value; 0.6 shares and 0.0 shares authorized, issued and outstanding as of December 31, 2025 and December 31, 2024, respectively | 558.1 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Convertible Preferred Stock, $0.001 par value; authorized 10.0 shares, 1.0 shares issued and outstanding as of December 31, 2025 and December 31, 2024 | 498.6 | 498.6 |
| &nbsp;&nbsp;&nbsp;&nbsp;Common stock, $0.00001 par value; authorized 2,000.0 shares; 674.5 and 409.4 shares issued and outstanding as of December 31, 2025 and December 31, 2024, respectively |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Additional paid-in capital | 9046.9 | 4560.5 |
| &nbsp;&nbsp;&nbsp;&nbsp;Retained earnings (accumulated deficit) | (394.5) | (6.2) |
| &nbsp;&nbsp;&nbsp;&nbsp;Accumulated other comprehensive loss | (2.3) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total stockholders' equity | 9706.8 | 5052.9 |
| Total liabilities and stockholders' equity | $15887.3 | $5098.3 |

---

*See accompanying notes to the consolidated financial statements.*

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

**QXO, INC. AND SUBSIDIARIES**

**Consolidated Statements of Operations** 

(in millions, except per share amounts)

---

| | | |
|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** |
| | **2025**<sup>(1)</sup> | **2024** |
| Net sales | $6842.2 | $56.9 |
| &nbsp;&nbsp;&nbsp;&nbsp;Cost of products sold | 5269.5 | 33.8 |
| Gross profit | 1572.7 | 23.1 |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating expense: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Selling, general and administrative | 1394.8 | 93.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation | 108.4 | 0.2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization | 314.7 | 0.9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expense | 1817.9 | 94.1 |
| Loss from operations | (245.2) | (71.0) |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest (expense) income, net | (47.7) | 121.8 |
| &nbsp;&nbsp;&nbsp;&nbsp;Loss on debt extinguishment | (49.7) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Other income, net | 5.5 |  |
| (Loss) income before (benefit from) provision for income taxes | (337.1) | 50.8 |
| &nbsp;&nbsp;&nbsp;&nbsp;(Benefit from) provision for income taxes | (57.7) | 22.8 |
| Net (loss) income | $(279.4) | $28.0 |
| Loss per common share - basic and diluted (Note 7) | $(0.63) | $(0.11) |
| Total weighted-average common shares outstanding: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Basic | 613.0 | 204.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;Diluted | 613.0 | 204.0 |
| <sup>(1)</sup> Results include Beacon's operations from the date of acquisition on April 29, 2025 through December 31, 2025. | <sup>(1)</sup> Results include Beacon's operations from the date of acquisition on April 29, 2025 through December 31, 2025. | <sup>(1)</sup> Results include Beacon's operations from the date of acquisition on April 29, 2025 through December 31, 2025. |

---

*See accompanying notes to the consolidated financial statements.*

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

**QXO, INC. AND SUBSIDIARIES**

**Consolidated Statements of Comprehensive (Loss) Income** 

(in millions)

---

| | | |
|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** |
| | **2025**<sup>(1)</sup> | **2024** |
| Net (loss) income | $(279.4) | $28.0 |
| Other comprehensive loss: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Foreign currency translation adjustment | (2.3) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other comprehensive loss | (2.3) |  |
| Comprehensive (loss) income | $(281.7) | $28.0 |
| <sup>(1)</sup> Results include Beacon's operations from the date of acquisition on April 29, 2025 through December 31, 2025. | <sup>(1)</sup> Results include Beacon's operations from the date of acquisition on April 29, 2025 through December 31, 2025. | <sup>(1)</sup> Results include Beacon's operations from the date of acquisition on April 29, 2025 through December 31, 2025. |

---

*See accompanying notes to the consolidated financial statements.*

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

**QXO, INC. AND SUBSIDIARIES**

**Consolidated Statements of Stockholders**' **Equity**<sup>(1)</sup>

(in millions)

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Mandatory Convertible Preferred Stock** | **Mandatory Convertible Preferred Stock** | **Convertible Preferred Stock** | **Convertible Preferred Stock** | **Common Stock** | **Common Stock** | **Additional Paid-in Capital** | **Retained Earnings (Accumulated Deficit)** | **Accumulated Other Comprehensive Loss** | |
| | **Shares** | **Amount** | **Shares** | **Amount** | **Shares** | **Amount** | **Additional Paid-in Capital** | **Retained Earnings (Accumulated Deficit)** | **Accumulated Other Comprehensive Loss** |<br>**Total** |
| Balance as of December 31, 2023 |  | $— |  | $— | 0.7 | $— | $9.4 | $(1.9) | $— | $7.5 |
| &nbsp;&nbsp;Issuance of Convertible Preferred Stock and Warrants, net of issuance costs |  |  | 1.0 | 498.6 |  |  | 483.0 |  |  | 981.6 |
| &nbsp;&nbsp;Issuance of common stock and pre-funded warrants, net of issuance costs |  |  |  |  | 408.7 |  | 4051.1 |  |  | 4051.1 |
| &nbsp;&nbsp;Common stock dividend |  |  |  |  |  |  | (17.4) |  |  | (17.4) |
| &nbsp;&nbsp;Convertible Preferred Stock dividend |  |  |  |  |  |  |  | (32.3) |  | (32.3) |
| &nbsp;&nbsp;Stock-based compensation |  |  |  |  |  |  | 34.4 |  |  | 34.4 |
| &nbsp;&nbsp;Net income |  |  |  |  |  |  |  | 28.0 |  | 28.0 |
| Balance as of December 31, 2024 |  | $— | 1.0 | $498.6 | 409.4 | $— | $4560.5 | $(6.2) | $— | $5052.9 |
| &nbsp;&nbsp;Issuance of Mandatory Convertible Preferred Stock, net of issuance costs | 0.6 | 558.1 |  |  |  |  |  |  |  | 558.1 |
| &nbsp;&nbsp;Mandatory Convertible Preferred Stock dividend |  |  |  |  |  |  |  | (18.9) |  | (18.9) |
| &nbsp;&nbsp;Convertible Preferred Stock dividend |  |  |  |  |  |  |  | (90.0) |  | (90.0) |
| &nbsp;&nbsp;Issuance of common stock, net of issuance costs |  |  |  |  | 256.6 |  | 4256.0 |  |  | 4256.0 |
| &nbsp;&nbsp;Proceeds from stock option exercises |  |  |  |  | 3.8 |  | 18.9 |  |  | 18.9 |
| &nbsp;&nbsp;Awards assumed in acquisition |  |  |  |  |  |  | 87.5 |  |  | 87.5 |
| &nbsp;&nbsp;Vesting of stock-based compensation awards |  |  |  |  | 4.7 |  |  |  |  |  |
| &nbsp;&nbsp;Tax withholdings for stock-based compensation awards |  |  |  |  |  |  | (20.5) |  |  | (20.5) |
| &nbsp;&nbsp;Stock-based compensation |  |  |  |  |  |  | 144.5 |  |  | 144.5 |
| &nbsp;&nbsp;Other comprehensive loss |  |  |  |  |  |  |  |  | (2.3) | (2.3) |
| &nbsp;&nbsp;Net loss |  |  |  |  |  |  |  | (279.4) |  | (279.4) |
| Balance as of December 31, 2025 | 0.6 | $558.1 | 1.0 | $498.6 | 674.5 | $— | $9046.9 | $(394.5) | $(2.3) | $9706.8 |
| <sup>(1)</sup> Results include Beacon's operations from the date of acquisition on April 29, 2025 through December 31, 2025. | <sup>(1)</sup> Results include Beacon's operations from the date of acquisition on April 29, 2025 through December 31, 2025. | <sup>(1)</sup> Results include Beacon's operations from the date of acquisition on April 29, 2025 through December 31, 2025. | <sup>(1)</sup> Results include Beacon's operations from the date of acquisition on April 29, 2025 through December 31, 2025. | <sup>(1)</sup> Results include Beacon's operations from the date of acquisition on April 29, 2025 through December 31, 2025. | <sup>(1)</sup> Results include Beacon's operations from the date of acquisition on April 29, 2025 through December 31, 2025. | <sup>(1)</sup> Results include Beacon's operations from the date of acquisition on April 29, 2025 through December 31, 2025. | <sup>(1)</sup> Results include Beacon's operations from the date of acquisition on April 29, 2025 through December 31, 2025. | <sup>(1)</sup> Results include Beacon's operations from the date of acquisition on April 29, 2025 through December 31, 2025. | <sup>(1)</sup> Results include Beacon's operations from the date of acquisition on April 29, 2025 through December 31, 2025. | <sup>(1)</sup> Results include Beacon's operations from the date of acquisition on April 29, 2025 through December 31, 2025. |

---

*See accompanying notes to the consolidated financial statements.*

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

**QXO, INC. AND SUBSIDIARIES**

**Consolidated Statements of Cash Flows**

(in millions)

---

| | | |
|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** |
| | **2025**<sup>(1)</sup> | **2024** |
| **Operating Activities** |  |  |
| Net (loss) income | $(279.4) | $28.0 |
| Adjustments to reconcile net (loss) income to net cash provided by operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation | 108.4 | 0.2 |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization | 314.7 | 0.9 |
| &nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation | 144.5 | 34.4 |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization of debt issuance costs | 6.7 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Loss on debt extinguishment | 49.7 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Provision for credit losses | 13.8 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-cash lease expense | 88.0 | 0.3 |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred income taxes | (60.6) | (1.1) |
| Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | 159.8 | 0.2 |
| &nbsp;&nbsp;&nbsp;&nbsp;Inventories | 287.8 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Vendor rebates receivable | (186.8) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Income tax receivable | (11.0) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 19.9 | (12.2) |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued expenses | (326.4) | 34.4 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other assets and liabilities | (67.7) | (0.3) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by operating activities | 261.4 | 84.8 |
| **Investing Activities** |  |  |
| Capital expenditures | (78.2) | (0.1) |
| Acquisition of business, net of cash acquired | (10556.5) |  |
| Other | 4.4 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in investing activities | (10630.3) | (0.1) |
| **Financing Activities** |  |  |
| Borrowings under revolving lines of credit | 841.9 |  |
| Payments under revolving lines of credit | (842.0) |  |
| Borrowings under term loan | 2250.0 |  |
| Payments under term loan | (1400.0) |  |
| Borrowings under senior notes | 2250.0 |  |
| Payment of debt issuance costs | (114.5) |  |
| Payment of other debt |  | (1.7) |
| Payments under equipment financing facilities and finance leases | (30.3) | (0.2) |
| Proceeds from issuance of common stock related to equity awards | 18.9 |  |
| Proceeds from issuance of common stock, net of issuance costs | 4256.0 |  |
| Proceeds from issuance of Mandatory Convertible Preferred Stock, net of issuance costs | 558.1 |  |
| Proceeds from issuance of Convertible Preferred Stock and warrants, net of issuance costs |  | 981.6 |
| Proceeds from the issuance of common stock and pre-funded warrants, net of issuance costs |  | 4051.1 |
| Payment of taxes related to net share settlement of equity awards | (20.5) |  |
| Payment of common-stock dividend |  | (17.4) |
| Payment of dividends on Convertible Preferred Stock | (90.0) | (32.3) |
| Payment of dividends on Mandatory Convertible Preferred Stock | (14.8) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by financing activities | 7662.8 | 4981.1 |
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | (0.5) |  |
| Net (decrease) increase in cash, cash equivalents and restricted cash | (2706.6) | 5065.8 |
| Cash, cash equivalents and restricted cash, beginning of period | 5072.0 | 6.2 |
| Cash, cash equivalents and restricted cash, end of period | $2365.4 | $5072.0 |
| **Supplemental Cash Flow Information** |  |  |
| Cash paid during the period for: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest | $138.0 | $0.1 |
| &nbsp;&nbsp;&nbsp;&nbsp;Income taxes, net of refunds | $38.2 | $— |
| <sup>(1)</sup> Results include Beacon's operations from the date of acquisition on April 29, 2025 through December 31, 2025. | <sup>(1)</sup> Results include Beacon's operations from the date of acquisition on April 29, 2025 through December 31, 2025. | <sup>(1)</sup> Results include Beacon's operations from the date of acquisition on April 29, 2025 through December 31, 2025. |

---

*See accompanying notes to the consolidated financial statements.*

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

**QXO, INC. AND SUBSIDIARIES**

**Notes to the Consolidated Financial Statements**

**1. Description of Business**

Prior to the Beacon Acquisition (as defined below), QXO, Inc. ("QXO" or the "Company") was primarily a technology solutions and professional services company, providing critical software applications, consulting and other professional services, including specialized programming, training and technical support to small and mid-size companies in the manufacturing, distribution and services industries. On January 17, 2025, the Company transferred the listing of its common stock, par value $0.00001 per share (the "common stock"), from Nasdaq to the New York Stock Exchange (the "NYSE"). The Company's listing and trading of the common stock on Nasdaq ended at market close on January 16, 2025. The Company's common stock began trading on the NYSE on January 17, 2025.

***Beacon Acquisition***

On March 20, 2025, QXO entered into an Agreement and Plan of Merger (the "Merger Agreement") with Beacon Roofing Supply, Inc., a Delaware corporation ("Beacon"), and Queen MergerCo, Inc., a Delaware corporation and wholly owned subsidiary of QXO ("Merger Sub"), pursuant to which QXO agreed to acquire Beacon for a purchase price of $124.35 per share of common stock (the "Merger Consideration") of Beacon (the "Beacon Acquisition"). On April 29, 2025 (the "Closing Date"), pursuant to the Merger Agreement, Merger Sub merged with and into Beacon, with Beacon remaining as the surviving entity and being renamed QXO Building Products, Inc. ("QXO Building Products"), and the Company completed its acquisition of Beacon in a transaction that valued Beacon at $10.6 billion.

As a result of the Beacon Acquisition, QXO has transitioned to a building products distribution company and is the largest publicly-traded distributor of roofing, waterproofing and complementary building products in North America. The Company plans to become the tech-enabled leader in the $800 billion building products distribution industry and generate outsized value for shareholders. The Company is executing its strategy toward a target of $50 billion in annual revenues within the next decade through accretive acquisitions and organic growth.

The Company serves customers in all 50 states throughout the United States (the "U.S.") and seven provinces in Canada. The Company's material subsidiary is QXO Building Products.

**2. Basis of Presentation and Significant Accounting Policies**

***Basis of Presentation and Principles of Consolidation***

The accompanying consolidated financial statements contain all adjustments necessary to present fairly the financial position of the Company as of December 31, 2025 and December 31, 2024, the results of operations for the years ended December 31, 2025 and 2024, and cash flows for the years ended December 31, 2025 and 2024 in accordance with accounting principles generally accepted in the U.S. ("GAAP"). All inter-company transactions and accounts have been eliminated in consolidation.

The Beacon Acquisition has been accounted for using the acquisition method of accounting in accordance with Accounting Standards Codification ("ASC") Topic 805 ("ASC 805"), Business Combinations. As the legacy Beacon business now comprises substantially all of the Company and has significantly larger operations compared to the Company prior to the Beacon Acquisition, QXO determined that Beacon is the predecessor entity ("predecessor") for financial reporting purposes. The Company also determined that the Beacon Acquisition represented a fundamental change in QXO's operations.

***Reclassifications***

The Company has reclassified certain prior period amounts to conform with the current period presentation in the consolidated statements of operations related to revenue, cost of sales, depreciation and amortization, which are now presented to conform with the predecessor's historical presentation. The Company has also reclassified certain prior period amounts to conform with the current period presentation in the consolidated balance sheets related to deferred revenue, which is now presented within accrued expenses.

***Use of Estimates***

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of these consolidated financial statements, as well as the reported amounts of revenue and expenses during the reporting period. Significant items subject to such estimates include inventories, purchase price allocations, income taxes and vendor rebates receivable. Actual results could differ from those estimates.

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

***Business Combinations***

The Company records acquisitions resulting in the consolidation of a business using the acquisition method of accounting. Under this method, the Company records the assets acquired, including intangible assets that can be identified, and liabilities assumed based on their estimated fair values at the date of acquisition. Various Level 3 fair value assumptions are used in the determination of these estimated fair values, including items such as sales growth rates, cost synergies, customer attrition rates, discount rates, and other prospective financial information. The purchase price in excess of the fair value of the assets acquired and liabilities assumed is recorded as goodwill. Estimates associated with the accounting for acquisitions may change as additional information becomes available regarding the assets acquired and liabilities assumed. Management believes these estimates are based on reasonable assumptions, however they are inherently uncertain and unpredictable, therefore actual results may differ. During the measurement period, which is up to one year from the acquisition date, the Company may adjust provisional amounts that were recognized at the acquisition date to reflect new information obtained about facts and circumstances that existed as of the acquisition date. Transaction costs associated with acquisitions are expensed as incurred and are included as a component of selling, general and administrative expense within the consolidated statements of operations.

***Cash, Cash Equivalents and Restricted Cash***

The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. The Company maintains cash balances across a diversified portfolio of global financial institutions that exceed Federal Deposit Insurance Corporation insured limits. The Company believes these global financial institutions to be financially sound with minimal credit risk and the Company has not experienced any losses in such accounts. Amounts included in restricted cash primarily represent those required to be set aside by a contractual agreement as collateral for the Company's credit card program. The following table provides a reconciliation of cash, cash equivalents and restricted cash:

---

| | | |
|:---|:---|:---|
| | **As of** | **As of** |
| *(in millions)* | **December 31,<br>2025** | **December 31,<br>2024** |
| Cash and cash equivalents | $2361.6 | $5068.5 |
| Restricted cash included in prepaid expenses and other current assets | 3.8 | 3.5 |
| Total cash, cash equivalents and restricted cash | $2365.4 | $5072.0 |

---

***Accounts Receivable***

The Company records accounts receivable at the contractual amount and records an allowance for credit losses for the amount the Company estimates it may not collect. In determining the allowance for credit losses, the Company considers historical collection experience, the age of the accounts receivable balances, the credit quality and risk of its customers, any specific customer collection issues, current economic conditions, and other factors that may impact customers' ability to pay. The Company also considers reasonable and supportable forecasts of future economic conditions and their expected impact on customer collections in determining the allowance for credit losses. Accounts receivable balances are written off once the receivables are no longer deemed collectible. For the year ended December 31, 2025, no single customer accounted for more than 1% of our net sales.

The following table represents the roll-forward of the allowance for credit losses for the year ended December 31, 2025 and the year ended December 31, 2024:

---

| | | |
|:---|:---|:---|
| *(in millions)* | **December 31,<br>2025** | **December 31,<br>2024** |
| Balance at beginning of period | $0.5 | $0.5 |
| Current period provision for expected credit losses | 13.8 |  |
| Recoveries | (1.3) |  |
| Balance at end of period | $13.0 | $0.5 |

---

***Inventories***

The Company's inventories primarily represent finished goods, consisting of products available for sale. Inventories acquired in connection with acquisitions are recorded at fair value as of the date of the acquisition. The Company's inventories not acquired in connection with acquisitions are accounted for using the weighted-average cost method and valued at the lower of cost or net realizable value.

Inventory costs consist of product and inbound shipping and handling costs. Inventory valuation requires the Company to make judgments, based on currently available information, about the likely method of disposition, such as through sales to individual customers or returns to product vendors.

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

***Vendor Rebates***

The Company's arrangements with vendors typically provide for rebates after it makes a special purchase and/or monthly, quarterly and/or annual rebates of a specified amount of consideration payable when a number of measures have been achieved. Annual rebates are generally related to a specified cumulative level of purchases on a calendar-year basis. The Company accounts for such rebates as a reduction of the inventory value until the product is sold, at which time such rebates reduce cost of products sold in the consolidated statements of operations. Throughout the year, the Company estimates the amount of the periodic rebates based upon the expected level of purchases. The Company continually revises these estimates to reflect actual rebates earned based on actual purchase levels.

***Property and Equipment***

Property and equipment acquired in connection with acquisitions are recorded at fair value as of the date of the acquisition and depreciated utilizing the straight-line method over the estimated remaining useful lives. All other additions are recorded at cost, and depreciation is computed using the straight-line method. The Company reviews the estimated useful lives of its fixed assets on an ongoing basis.

The estimated useful lives of property and equipment are principally as follows:

---

| | |
|:---|:---|
| Buildings | 40 years |
| Equipment | 3 to 7 years |
| Furniture and fixtures | 7 years |
| Software | 3 to 5 years |
| Finance lease assets and leasehold improvements | Shorter of the estimated useful life or lease term, considering renewal options expected to be exercised. |

---

The following is a summary of property and equipment, net:

---

| | | |
|:---|:---|:---|
| | **As of** | **As of** |
| | **December 31,<br>2025** | **December 31,<br>2024** |
| *(in millions)* | **December 31,<br>2025** | **December 31,<br>2024** |
| Equipment | $259.5 | $4.0 |
| Finance lease assets | 216.9 |  |
| Leasehold improvements | 124.5 | 0.1 |
| Furniture and fixtures | 29.7 | 0.2 |
| Software | 31.2 |  |
| Land and buildings | 59.6 |  |
| Construction in progress | 55.1 |  |
| Total property and equipment | 776.5 | 4.3 |
| Accumulated depreciation | (87.9) | (3.9) |
| &nbsp;&nbsp;Total property and equipment, net | $688.6 | $0.4 |

---

***Leases***

The Company accounts for its leases in accordance with ASC 842, Leases. The Company mostly operates in leased branch facilities and corporate offices, which are accounted for as operating leases. The leases typically provide for a base rent plus real estate taxes and insurance. Certain of the leases provide for escalating rents over the lives of the leases, and rent expense is recognized over the terms of those leases on a straight-line basis. In addition, the Company leases equipment, such as trucks and forklifts. Equipment leases are accounted for as either operating or finance leases.

The Company determines whether an arrangement is a lease at inception. The determination as to whether an arrangement contains a lease is based on an assessment as to whether a contract conveys the right to the Company to control the use of identified property or equipment for a period of time in exchange for consideration.

Operating leases are included in operating lease right-of-use ("ROU") assets, current portion of operating lease liabilities, and operating lease liabilities in the Company's consolidated balance sheets. Finance leases are included in property and equipment, net, current portion of financial lease liabilities, and finance lease liabilities in the Company's consolidated balance sheets.

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

ROU assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. As most of the Company's leases do not provide an implicit rate, the Company determines an incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The incremental borrowing rate represents a significant judgment that is based on an analysis of the Company's credit rating, country risk, treasury and corporate bond yields, as well as comparison to the Company's borrowing rate on its most recent loan. The Company uses the implicit rate when readily determinable. The operating lease ROU assets also include any prepaid lease payments and lease incentives. The Company's lease terms include periods under options to extend or terminate the lease when it is reasonably certain that those options will be exercised. The Company generally uses the base, non-cancelable lease term when determining the lease assets and liabilities. Operating lease expense is recognized on a straight-line basis over the lease term. For finance leases, the lease asset is depreciated over the lease term and interest expense is recorded using the effective interest method.

The Company's lease agreements generally contain lease and non-lease components. Non-lease components primarily include payments for maintenance and utilities. The Company has elected to combine fixed payments for non-lease components with lease payments and account for them together as a single lease component, which increases the lease assets and liabilities.

Payments under the Company's lease agreements are primarily fixed. However, certain lease agreements contain variable payments, which are expensed as incurred and are not included in the operating lease assets and liabilities. These amounts include payments affected by the Consumer Price Index and reimbursements to landlords for items such as property insurance and common area costs. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants.

***Goodwill***

On an annual basis and at interim periods when circumstances require, the Company tests the recoverability of its goodwill and indefinite-lived intangible assets and reviews for indicators of impairment. Examples of such indicators include a significant change in the business climate, legal factors, operating performance indicators, competition, sale or disposition of a significant portion of the business or other factors.

The following table sets forth the change in the carrying amount of goodwill during the year ended December 31, 2025:

---

| | |
|:---|:---|
| *(in millions)* | **December 31,<br>2025** |
| Balance at beginning of period | $1.2 |
| &nbsp;&nbsp;&nbsp;Acquisitions | 5111.2 |
| &nbsp;&nbsp;&nbsp;Translation and other adjustments | (1.1) |
| Balance at end of period | $5111.3 |

---

***Intangible Assets***

The Company amortizes certain identifiable intangible assets that have finite lives, currently consisting of customer relationships and trade names. These amortizable intangible assets are amortized over the useful lives of the asset using the straight-line amortization method. Amortizable intangible assets are tested for impairment, when deemed necessary, based on undiscounted cash flows and, if impaired, are written down to fair value based on either discounted cash flows or appraised values.

The following table summarizes intangible assets by category:

---

| | | | |
|:---|:---|:---|:---|
| | **As of** | **As of** | **Weighted-Average Remaining Life**<sup>(1)</sup><br>**(Years)** |
| *(in millions, except time periods)* | **December 31,<br>2025** | **December 31,<br>2024** | **Weighted-Average Remaining Life**<sup>(1)</sup><br>**(Years)** |
| Amortizable intangible assets: |  |  |  |
| &nbsp;&nbsp;Customer relationships and other | $3908.7 | $9.4 | 9.3 |
| &nbsp;&nbsp;Trade names | 229.9 |  | 2.3 |
| Total amortizable intangible assets | 4138.6 | 9.4 | 9.0 |
| &nbsp;&nbsp;&nbsp;Accumulated amortization | (320.2) | (5.4) |  |
| Total amortizable intangible assets, net | 3818.4 | 4.0 |  |
| Indefinite-lived domain names | 0.7 |  |  |
| Total intangibles, net | $3819.1 | $4.0 |  |
| <sup>(1)</sup> As of December 31, 2025. |  |  |  |

---

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

The following table summarizes the estimated future amortization expense for intangible assets for each of the next five years ending December 31 and thereafter:

---

| | |
|:---|:---|
| *(in millions)* | |
| 2026 | $467.6 |
| 2027 | 467.5 |
| 2028 | 415.5 |
| 2029 | 390.3 |
| 2030 | 390.1 |
| Thereafter | 1687.4 |
| &nbsp;&nbsp;&nbsp;Total future amortization expense | $3818.4 |

---

***Accrued Expenses***

The following table presents the components of accrued expenses:

---

| | | |
|:---|:---|:---|
| | **As of** | **As of** |
| *(in millions)* | **December 31,<br>2025** | **December 31,<br>2024** |
| Inventory | $170.0 | $— |
| Selling, general and administrative | 146.8 |  |
| Customer rebates | 148.4 |  |
| Payroll and employee benefit costs | 66.5 | 8.1 |
| Interest expense | 27.1 |  |
| Income taxes |  | 24.0 |
| Other | 15.5 | 6.5 |
| &nbsp;&nbsp;Total accrued expenses | $574.3 | $38.6 |

---

***Asset Retirement Obligations***

A liability for an asset retirement obligation is recorded in the period in which it is incurred. When an asset retirement obligation liability is initially recorded, the Company capitalizes the cost by increasing the carrying amount of the related long-lived asset. For each subsequent period, the liability is increased for accretion expense and the capitalized cost is depreciated over the useful life of the related asset. The Company recognized asset retirement obligations in connection with the Beacon Acquisition. As of December 31, 2025, the carrying amount of the Company's asset retirement obligations was $25.5 million, which is included in other long-term liabilities on the consolidated balance sheets.

***Financial Instruments***

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value:

&nbsp;&nbsp;&nbsp;&nbsp;• *Level 1*: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.

&nbsp;&nbsp;&nbsp;&nbsp;• *Level 2*: Observable prices that are based on inputs not quoted on active markets but corroborated by market data.

&nbsp;&nbsp;&nbsp;&nbsp;• *Level 3*: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.

The Company's current financial assets and liabilities approximate fair value due to their short-term nature and include cash and cash equivalents, accounts receivable, vendor rebates receivable, income tax receivable, prepaid expenses and other current assets, accounts payable and accrued liabilities.

***Net Sales***

Net sales represent the consideration the Company expects to be entitled to in exchange for transferring products to customers. Performance obligations are satisfied at a point in time, and net sales are recognized when control of the product transfers to the customer, which occurs when the customer accepts the delivery of our product or takes possession of our product with rights and rewards of ownership. Substantially all of the Company's contracts have a single performance obligation—to deliver products—and are short-term in nature.

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

The Company does not provide extended payment terms, and payment is due shortly after control transfers. The Company generally does not require prepayments; however, to the extent customers make payments in advance of delivery, the Company records a liability. Total customer advances as of December 31, 2025 was $20.1 million, and are expected to be recognized as revenue in the following year due to the short-term nature of the contracts. There were no customer advances as of December 31, 2024.

Net sales are presented net of variable consideration, including estimated product returns, customer sales incentives (including volume rebates), and early payment discounts taken.

The Company estimates product returns based on historical return rates and records accrued sales returns and defers the related cost of products sold. Total accrued sales returns as of December 31, 2025 was $26.6 million and total cost of products sold deferred was $20.4 million. There were no accrued sales returns or cost of products sold deferred as of December 31, 2024. Provisions for early payment discounts are accrued in the same period in which the sale occurs based on historical experience. Commissions paid to internal sales teams to obtain contracts are expensed as incurred because the related contracts have a duration of one year or less. Sales taxes collected from customers and remitted to governmental authorities are excluded from net sales.

The Company offers sales incentives to customers, primarily volume rebates based on achieving specified sales levels. These volume rebates are not in exchange for a distinct good or service and therefore reduce net sales when the related revenue is recognized. The Company estimates volume rebate accruals based on contract terms, historical experience, and performance levels. Total accrued sales incentives as of December 31, 2025 was $148.4 million. There were no accrued sales incentives as of December 31, 2024.

Shipping and handling amounts billed to customers are included in net sales. Related shipping and handling costs are accounted for as fulfillment activities and are recognized in cost of products sold when control of the products transfers to the customer.

Customer advances, sales returns, and sales incentives are included in accrued expenses, early payment discounts are included in accounts receivable, net, and cost of products sold deferred are included in prepaid and other current assets in the consolidated balance sheets.

***Stock-Based Compensation***

The Company recognizes stock-based compensation expense based on the equity award's grant date fair value. For grants of restricted stock units ("RSUs") subject to service-based vesting conditions, the fair value is established based on the market price of the Company's common stock on the date of the grant. For grants of performance-based restricted stock units ("PRSUs") subject to market-based vesting conditions, the fair value is established using a Monte Carlo simulation lattice model. The determination of the fair value of stock-based awards is affected by the Company's stock price and a number of assumptions, including volatility, performance period, risk-free interest rate and expected dividends. The Company accounts for forfeitures as they occur. The grant date fair value of each award is amortized over the requisite service period.

***Advertising Costs***

Advertising costs are expensed as incurred.

***Interest (Expense) Income, Net***

The following table presents the components of interest (expense) income, net:

---

| | | |
|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** |
| *(in millions)* | **2025** | **2024** |
| Interest income | $125.8 | $121.9 |
| Interest expense | (173.5) | (0.1) |
| Interest (expense) income, net | $(47.7) | $121.8 |

---

***Income Taxes***

The Company accounts for income taxes using the liability method, which requires the recognition of a current tax liability or asset for current taxes payable or refundable and a deferred tax liability or asset for the estimated future tax effects of temporary differences between the financial statement and tax reporting bases of assets and liabilities to the extent that they are realizable. Deferred tax expense (benefit) results from the net change in deferred tax assets and liabilities during the year.

ASC 740 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Based on this guidance, the Company analyzes its filing positions in all of the federal, state, and foreign jurisdictions where it is required to file income tax returns, as well as all open tax years in these jurisdictions. Tax benefits from uncertain tax positions are recognized if it is more likely than not that the position is sustainable based solely on its technical merits.

The Company's accounting policy is to recognize any interest and penalties related to uncertain tax positions in (benefit from) provision for income taxes in the consolidated statements of operations.

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

***Recent Accounting Pronouncements — Adopted***

In December 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023-09, "Improvements to Income Tax Disclosures," a final standard on improvements to income tax disclosures. The standard requires disaggregated information about a registrant's effective tax rate reconciliation as well as information on income taxes paid. This standard should be applied prospectively, with retrospective application permitted. The standard is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company adopted this standard on December 31, 2025 using the prospective method of adoption.

The Company analyzed ASU 2023-09 and the impacts on the Company's effective tax rate table and income taxes paid table in Note 12. The Company adjusted its effective tax rate table for the year ended December 31, 2025 to align with the increased information requirements and required descriptions. Due to the Company's minimal foreign tax footprint, no jurisdictions were required to be detailed out separately in the effective tax rate table. Additionally, the Company provided a table of income taxes paid, net of refunds, for the year ended December 31, 2025 in Note 12. The significant federal, state, and foreign jurisdictions were determined based on a threshold of 5% of total income taxes paid, net of refunds.

***Recent Accounting Pronouncements — Not Yet Adopted***

In November 2024, the FASB issued ASU 2024-03, "Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses." The standard requires disclosure of disaggregated information about certain financial statement expense line items presented on the consolidated statements of operations in the notes to the financial statements on an interim and annual basis. The standard can be applied either prospectively or retrospectively and is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures.

In July 2025, the FASB issued ASU 2025-05, "Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets". The standard provides a practical expedient to assume that conditions as of the balance sheet date remain unchanged over the life of the asset when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC Topic 606. This standard should be applied prospectively and is effective for fiscal years beginning after December 15, 2025, and interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures.

In September 2025, the FASB issued ASU 2025-06, "Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software." The standard modernizes the recognition and disclosure framework for internal-use software costs, removing all references to software development stages and introducing a more judgment-based approach. This standard can be applied either prospectively, retrospectively, or utilizing a modified transition approach and is effective for fiscal years beginning after December 15, 2027, and interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures.

**3. Acquisitions**

**<u>Beacon Roofing Supply, Inc. Acquisition</u>**

On March 20, 2025, QXO entered into a Merger Agreement with Beacon and Merger Sub, pursuant to which QXO agreed to acquire Beacon for a purchase price of $124.35 per share of common stock of Beacon. On the Closing Date, pursuant to the Merger Agreement, Merger Sub merged with and into Beacon, with Beacon remaining as the surviving entity and being renamed QXO Building Products, Inc., and the Company completed its acquisition of Beacon.

As a result of the Beacon Acquisition, QXO has transitioned to a building products distribution company and is the largest publicly traded distributor of roofing, waterproofing and complementary building products in North America. The Beacon Acquisition was a key milestone in the Company's plan to become to tech-enabled leader in the $800 billion building products distribution industry and generate outsized value for shareholders.

The Company was determined to be the accounting acquirer in the Beacon Acquisition in accordance with ASC 805 primarily due to having board and common share voting control over the combined company, and its managers, including the chief executive officer, directing the activities of the newly merged entity. Furthermore, the Beacon Acquisition was initiated by QXO, and the Company retained the QXO name subsequent to the Beacon Acquisition. The historical financial statements of QXO prior to April 29, 2025 are reflected in this Annual Report as QXO's historical financial statements. Accordingly, the financial results of QXO as of and for any periods prior to April 29, 2025 do not include the financial results of Beacon and current and future results will not be comparable to historical results.

Additionally, in considering the foregoing principles of predecessor determination and in light of the Company's specific facts and circumstances, the Company determined that Beacon is the predecessor entity for financial reporting purposes.

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

***Purchase Price***

The following table summarizes the components of the preliminary aggregate purchase consideration paid to acquire Beacon and is subject to adjustments:

---

| | |
|:---|:---|
| *(in millions)* | |
| Cash paid for outstanding Beacon common stock<sup>(1)</sup> | $7736.6 |
| Converted Beacon RSUs and options attributable to pre-combination service<sup>(2)</sup> | 103.5 |
| Payment of Beacon debt, including accrued interest<sup>(3)</sup> | 2947.8 |
| &nbsp;&nbsp;&nbsp;&nbsp;Preliminary aggregate acquisition consideration | 10787.9 |
| Less: cash acquired | 143.9 |
| &nbsp;&nbsp;&nbsp;&nbsp;Preliminary aggregate acquisition consideration, net of cash acquired | $10644.0 |
| <sup>(1)</sup> The cash component of the preliminary aggregate acquisition consideration represents 62.2 million shares of outstanding common stock of Beacon multiplied by the $124.35 per share cash portion of the acquisition consideration. | <sup>(1)</sup> The cash component of the preliminary aggregate acquisition consideration represents 62.2 million shares of outstanding common stock of Beacon multiplied by the $124.35 per share cash portion of the acquisition consideration. |
| <sup>(2)</sup> This amount represents the value of outstanding equity awards held by Beacon employees that were converted into replacement QXO instruments with identical terms. The conversion was based on the volume-weighted average trading price of QXO common stock for the five consecutive trading days ending on the trading day immediately preceding the Closing Date. The fair value of replacement equity-based awards attributable to pre-acquisition service was recorded as part of the consideration transferred. This amount also includes cash paid by QXO of $16.0 million to settle RSUs for non-employee members of the board of directors of Beacon, which were accelerated in full, cancelled and paid in cash for $124.35 per share. See Note 8 for additional information.  | <sup>(2)</sup> This amount represents the value of outstanding equity awards held by Beacon employees that were converted into replacement QXO instruments with identical terms. The conversion was based on the volume-weighted average trading price of QXO common stock for the five consecutive trading days ending on the trading day immediately preceding the Closing Date. The fair value of replacement equity-based awards attributable to pre-acquisition service was recorded as part of the consideration transferred. This amount also includes cash paid by QXO of $16.0 million to settle RSUs for non-employee members of the board of directors of Beacon, which were accelerated in full, cancelled and paid in cash for $124.35 per share. See Note 8 for additional information.  |
| <sup>(3)</sup> This amount represents the cash paid by QXO to settle Beacon's senior secured term loan B facility, senior secured notes, and outstanding line of credit borrowings of $1.26 billion, $1.25 billion and $370.8 million, respectively. Additionally, accrued interest expense of $30.1 million and a breakage fee of $37.8 million was paid for early termination of Beacon's debt at the closing of the Beacon Acquisition. | <sup>(3)</sup> This amount represents the cash paid by QXO to settle Beacon's senior secured term loan B facility, senior secured notes, and outstanding line of credit borrowings of $1.26 billion, $1.25 billion and $370.8 million, respectively. Additionally, accrued interest expense of $30.1 million and a breakage fee of $37.8 million was paid for early termination of Beacon's debt at the closing of the Beacon Acquisition. |

---

***Preliminary Purchase Price Allocation***

The Company applied the acquisition method of accounting in accordance with ASC 805, Business Combinations, and recognized assets acquired and liabilities assumed at their fair values as of the effective date of the Beacon Acquisition, with the excess purchase consideration recorded to goodwill. Goodwill reflects the assembled workforce of Beacon as well as operating synergies that are expected to result from the Beacon Acquisition. All preliminary goodwill is not deductible for tax purposes.

The purchase price allocation is preliminary and subject to change. The Company is continuing to obtain information to complete its valuation of certain assets and liabilities, in addition to ensuring all other assets and liabilities and contingencies have been identified and recorded. The Company has estimated the preliminary fair value of assets acquired and liabilities assumed based on information currently available and will continue to adjust those estimates as additional information pertaining to events or circumstances present at the Closing Date becomes available during the measurement period. The Company will reflect measurement period adjustments, if any, in the period in which the adjustments occur, and the Company will finalize its accounting for the Beacon Acquisition within one year of the Closing Date.

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

The following table presents the preliminary allocation of the purchase price to the assets acquired and liabilities assumed, and a reconciliation to total consideration transferred. The allocation of the purchase price is ongoing, and the Company continues to ascertain the reasonableness of the fair value of the assets acquired and liabilities assumed. Subsequent to the determination of the preliminary purchase price allocation, the Company recorded certain measurement period adjustments primarily related to accounts receivable, inventories, and deferred income taxes. The measurement period adjustments had a net impact of decreasing goodwill by $27.4 million.

---

| | |
|:---|:---|
| *(in millions)* | **Preliminary**<br>**Allocation** |
| **Assets:** |  |
| &nbsp;&nbsp;Accounts receivable | $1316.3 |
| &nbsp;&nbsp;Inventories | 1784.6 |
| &nbsp;&nbsp;Vendor rebates receivable | 240.0 |
| &nbsp;&nbsp;Income tax receivable | 19.9 |
| &nbsp;&nbsp;Prepaid expenses and other current assets | 81.1 |
| &nbsp;&nbsp;Property and equipment | 687.5 |
| &nbsp;&nbsp;Goodwill | 5111.2 |
| &nbsp;&nbsp;Intangibles | 4130.6 |
| &nbsp;&nbsp;Operating lease right-of-use assets | 708.0 |
| &nbsp;&nbsp;Other non-current assets | 17.5 |
| **Liabilities:** |  |
| &nbsp;&nbsp;Accounts payable | (1138.2) |
| &nbsp;&nbsp;Accrued expenses | (527.0) |
| &nbsp;&nbsp;Deferred income taxes | (910.3) |
| &nbsp;&nbsp;Other long-term liabilities | (27.5) |
| &nbsp;&nbsp;Operating lease liabilities | (668.2) |
| &nbsp;&nbsp;Finance lease liabilities | (181.5) |
| &nbsp;&nbsp;**Preliminary aggregate acquisition consideration** | $10644.0 |

---

The following table presents a summary of intangible assets acquired and the weighted-average useful life of these assets:

---

| | | |
|:---|:---|:---|
| *(in millions, except weighted-average useful life)* | **Preliminary Fair Value** | **Weighted-Average Useful Life in Years** |
| Customer relationships | $3900.6 | 10.0 |
| Trade names | 230.0 | 3.0 |
| Total intangible assets acquired | $4130.6 | 9.6 |

---

The preliminary fair value estimate of the customer relationships intangible asset was determined using the multi-period excess earnings method. The excess earnings methodology is an income approach methodology that estimates the projected cash flows of the business attributable to the customer relationships intangible asset, net of charges for the use of other identifiable assets of the business including working capital, fixed assets and other intangible assets. The preliminary fair value estimate of the trade names intangible asset was determined using the relief-from-royalty method, which presumes the owner of the asset avoids hypothetical royalty payments that would need to be made for the use of the asset if the asset was not owned.

A key assumption in the fair value measurement of the customer relationships intangible asset is the customer attrition rate, which projects the percentage of customer revenue from an existing customer base that is lost over the customer relationships intangible asset's estimated useful life. Other key inputs used in the discounted cash flow analyses and other areas of judgment include projected financial information, discount rates used to present value future cash flows, royalty rates, economic useful life of assets and tax rates, as relevant, that market participants would consider when estimating fair values.

The Company incurred transaction costs of approximately $74.8 million related to the Beacon Acquisition. These costs were associated with legal and professional services and were recognized in selling, general and administrative expenses on the consolidated statements of operations.

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

***Unaudited Pro Forma Combined Financial Information***

The following unaudited pro forma combined financial information presents the combined results of the Company and Beacon as if the Beacon Acquisition had been completed on January 1, 2024. The unaudited pro forma combined financial information presented below does not give effect to the May 2025 and June 2025 common and preferred (including Mandatory Convertible Preferred Stock) equity financings (as further discussed in Note 6), as these financings were not directly attributable to the Beacon Acquisition. The proceeds from equity financings completed in May 2025 were used to repay indebtedness under the Notes (as defined in Note 9) previously issued as part of financings that were completed to effectuate the Beacon Acquisition. As this repayment of indebtedness was not directly attributable to the Beacon Acquisition, the related reduction in interest expense is not reflected in this unaudited pro forma combined financial information. The unaudited pro forma combined financial information is presented for informational purposes and is not indicative of the results of operations that would have been achieved if the Beacon Acquisition had occurred on January 1, 2024, nor is it indicative of future results.

The following table presents the Company's pro forma combined net sales and net loss:

---

| | | |
|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** |
| *(in millions)* | **2025** | **2024** |
| Net sales | $9536.8 | $9820.1 |
| Net loss | $(332.4) | $(215.9) |

---

The unaudited pro forma combined financial information includes, where applicable, adjustments for:

(i) Acquisition accounting in accordance with ASC 805;

(ii) Financing transactions directly attributable to the Beacon Acquisition; and

(iii) Transaction costs incurred by the Company that were directly attributable to the Beacon Acquisition.

These pro forma adjustments are based on available information as of the date hereof and upon assumptions that the Company believes are reasonable to reflect the impact of the Beacon Acquisition on the Company's historical financial information on a supplemental pro forma basis. Adjustments do not include costs related to integration activities, cost savings or synergies that have been or may be achieved by the combined business.

**<u>Kodiak Building Partners Acquisition</u>**

On February 10, 2026, the Company entered into a definitive agreement to acquire Kodiak Building Partners from Court Square Capital Partners for approximately $2.25 billion. The purchase price comprises $2.0 billion of cash and 13.2 million of the Company's common shares, with the Company retaining the right to repurchase these shares at $40 per share. The transaction is expected to close early in the second quarter of 2026, subject to the satisfaction of customary closing conditions.

**4. Restructuring**

Subsequent to the Beacon Acquisition, the Company developed a restructuring plan to streamline and simplify the organization, improve efficiency and reduce costs. As a result of the restructuring plan, the Company recorded $100.7 million in pre-tax restructuring charges, comprised of $54.6 million of severance and employee-related costs associated with corporate workforce optimization, a $41.1 million stock-based compensation charge associated with the impacted employees, and $5.0 million of lease abandonment costs. These restructuring charges are reflected in selling, general and administrative expenses on the consolidated statements of operations for the year ended December 31, 2025. The severance and employee-related costs were recorded in accrued expenses, while the stock-based compensation charge was reflected as an adjustment to common stock and additional paid-in capital on the consolidated balance sheets. The severance and employee-related restructuring charge liability is expected to be paid in full by June 2026.

The following table shows the change in the restructuring charge liability during the year ended December 31, 2025:

---

| | | |
|:---|:---|:---|
| | **Severance and**<br>**Employee-related**<br>**Costs** | **Lease**<br>**Abandonment**<br>**Costs** |
| *(in millions)* | **Severance and**<br>**Employee-related**<br>**Costs** | **Lease**<br>**Abandonment**<br>**Costs** |
| Restructuring charge liability as of December 31, 2024 | $— | $— |
| &nbsp;&nbsp;Restructuring charges | 54.6 | 5.0 |
| &nbsp;&nbsp;Payments | (28.4) |  |
| &nbsp;&nbsp;Non-cash settlement |  | (5.0) |
| Restructuring charge liability as of December 31, 2025 | $26.2 | $— |

---

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

Severance and employee-related costs consist primarily of salary continuation benefits, prorated annual incentive compensation, continuation of health care benefits, outplacement services and retention awards issued to certain key employees. Severance and employee-related benefits are determined pursuant to the Company's written severance plans and are recognized when the benefits are determined to be probable of being paid and are reasonably estimable. Retention awards are recognized on a straight-line basis from the communication date to the end of the requisite retention period.

Lease abandonment costs primarily represent the write-off of the remaining carrying value of operating lease ROU assets for branch facilities that were abandoned in connection with the Company's restructuring plan. These lease abandonment charges are recognized as of the cease-use date. Other exit-related costs, including costs to close branch facilities, are recognized as incurred.

**5. Segment Reporting and Geographic Information**

***Segment Reporting***

Operating segments are defined as components of an entity for which separate discrete financial information is available and regularly reviewed by the Chief Operating Decision Maker ("CODM") in deciding how to allocate resources to an individual segment and in assessing performance. The Company's CODM, the chief executive officer, reviews consolidated results of operations to make decisions, therefore the Company views its operations and manages its business as a single operating segment.

The Company's revenues for its single operating segment are primarily derived from the sale of residential and non-residential roofing products, as well as complementary products, such as siding and waterproofing. The CODM evaluates performance for the Company's single operating segment and decides how to allocate resources based on the Company's consolidated net income that is reported in the consolidated statements of operations as net (loss) income. The measure of segment assets is reported on the consolidated balance sheets as total assets. These results are used to assess segment performance and determine the compensation of certain employees.

The operating segment financial information regularly reviewed by the CODM, inclusive of assets, revenue, expenses, profit or loss and noncash items are presented on a consolidated basis. Other segment items included in consolidated net income are depreciation, amortization, interest income (expense), net, loss on debt extinguishment, other income, net, and provision for (benefit from) income taxes, which are reflected on the consolidated statements of operations.

The following table presents information regarding the components of revenue, significant segment expenses and consolidated net (loss) income representative of the significant categories regularly provided to the CODM when managing the Company's one operating segment:

---

| | | |
|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** |
| *(in millions)* | **2025** | **2024** |
| Net sales: |  |  |
| Residential roofing products | $3307.1 | $— |
| Non-residential roofing products | 1883.9 |  |
| Complementary building products | 1592.7 |  |
| Software products and services | 58.5 | 56.9 |
| &nbsp;&nbsp;&nbsp;Total net sales | $6842.2 | $56.9 |
| Less: |  |  |
| &nbsp;&nbsp;Cost of products sold | $5269.5 | $33.8 |
| &nbsp;&nbsp;Selling, general administrative expenses<sup>(1)</sup> | 1250.3 | 58.6 |
| &nbsp;&nbsp;Stock-based compensation | 144.5 | 34.4 |
| &nbsp;&nbsp;Other segment items | 457.3 | (97.9) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net (loss) income | $(279.4) | $28.0 |
| <sup>(1)</sup> Excludes stock-based compensation. | <sup>(1)</sup> Excludes stock-based compensation. | <sup>(1)</sup> Excludes stock-based compensation. |

---

***Geographic Information***

Net sales in the U.S. accounted for approximately 97% of total net sales for the year ended December 31, 2025, and approximately 96% of the Company's long-lived assets were in the U.S. as of December 31, 2025. All of the Company's net sales were derived from the U.S. for the year ended December 31, 2024, and all of the Company's long-lived assets were in the U.S. as of December 31, 2024. The CODM does not review geographic asset information when assessing performance or allocating resources.

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

**6. Equity**

***April 2024 Investment Agreement***

On April 14, 2024, the Company entered into the Amended and Restated Investment Agreement (the "Investment Agreement") among the Company, JPE and the other investors party thereto (collectively, the "Investors"), providing for, among other things, an aggregate investment by the Investors of $1.0 billion in cash in the Company. Pursuant to the Investment Agreement, the Company issued and sold an aggregate of 1,000,000 shares of Convertible Perpetual Preferred Stock, par value $0.001 per share (the "Convertible Preferred Stock"), which are initially convertible into an aggregate of 219.0 million shares of common stock at an initial conversion price of $4.566 per share and issued and sold warrants exercisable for an aggregate of 219.0 million shares of common stock (the "Warrants"). The Investment Agreement and related transactions closed on June 6, 2024 (the "Equity Investment") and generated gross proceeds of $1.0 billion before deducting fees and offering expenses.

On June 6, 2024, the Company amended its certificate of incorporation to effect an 8:1 reverse stock split with respect to the Company's common stock (the "Reverse Stock Split"), which reduced the Company's issued and outstanding share count of common stock from 5.3 million to 0.7 million shares (par value $0.00001 per share). The Company has recast all share and per-share data and amounts to show the effects of the Reverse Stock Split.

***Issuance of Convertible Preferred Stock***

On June 6, 2024, under the terms of the Investment Agreement, the Company issued 1.0 million shares of Convertible Preferred Stock. The Convertible Preferred Stock has an initial liquidation preference of $1,000 per share, for an aggregate initial liquidation preference of $1.0 billion. The Convertible Preferred Stock is convertible at any time, in whole or in part and from time to time, at the option of the holder thereof into a number of shares of common stock equal to the then-applicable liquidation preference divided by the conversion price, which initially is $4.566 per share of common stock (subject to customary anti-dilution adjustments). Shares of Convertible Preferred Stock are initially convertible into an aggregate of 219.0 million shares of common stock (after giving effect to the Reverse Stock Split). The Convertible Preferred Stock is not redeemable or subject to any required offer to purchase.

The Convertible Preferred Stock ranks, with respect to dividend rights and distribution of assets upon liquidation, winding-up or dissolution, senior to the Company's common stock and Mandatory Convertible Preferred Stock (as defined below). Holders of Convertible Preferred Stock will vote together with the holders of the Company's common stock on an "as-converted" basis on all matters, except as otherwise required by law. In addition, the approval of holders of at least a majority of the outstanding shares of the Convertible Preferred Stock, voting separately as a single class, will be required for certain matters set forth in the Certificate of Designation for the Convertible Preferred Stock.

Dividends on the Convertible Preferred Stock are payable quarterly, when, as and if declared by the Company's board of directors at the rate per annum of 9% per share on the then-applicable liquidation preference (subject to certain exceptions in the event that the Company pays dividends on shares of its common stock). During the year ended December 31, 2025, the Company paid $90.0 million of dividends to holders of Convertible Preferred Stock. Subsequent to the close of the year ended December 31, 2025, the Company paid $22.5 million of quarterly dividends to holders of Convertible Preferred Stock.

***Warrants***

The aggregate number of shares of the Company's common stock subject to the Warrants is 219.0 million shares. The Warrants are exercisable at the option of the holder at any time until June 6, 2034. The Warrants have an exercise price of $4.566 per share of common stock with respect to 50% of the Warrants, $6.849 per share of common stock with respect to 25% of the Warrants, and $13.698 per share of common stock with respect to the remaining 25% of the Warrants.

Each Warrant may be exercised, in whole or in part, at any time or times on or after the issuance date and on or before the expiration date at the election of the holder (in such holder's sole discretion) by means of a "cashless exercise" in which the holder will be entitled to receive a number of shares of the Company's common stock equal to the quotient of the product of the Closing Sale Price (as defined in the Warrant Certificate) of a share of the Company's common stock on the trading day immediately preceding the date on which the holder elects to exercise its Warrant, less the adjusted exercise price, multiplied by the number of shares of the Company's common stock issuable upon exercise of such Warrant, divided by the aforementioned Closing Sale Price of a share of the Company's common stock on the trading day immediately preceding the date on which the holder elects to exercise its Warrant.

***Private Placements***

On June 13, 2024, the Company entered into purchase agreements with certain institutional and accredited investors to issue and sell in a private placement an aggregate of 340.9 million shares of the Company's common stock at a price of $9.14 per share, and pre-funded warrants (the "Pre-Funded Warrants") to purchase 42.0 million shares of the Company's common stock at a price of $9.13999 per Pre-Funded Warrant. Each Pre-Funded Warrant has an exercise price of $0.00001 per share, is exercisable immediately and until the Pre-Funded Warrant is exercised in full. The closing of the private placement was completed on July 19, 2024.

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

On July 22, 2024, the Company entered into purchase agreements with certain institutional and accredited investors to privately place 67.8 million shares of its common stock at a price of $9.14 per share. The closing of the private placement was completed on July 25, 2024.

On March 17, 2025, the Company entered into purchase agreements with certain institutional investors to privately place 67.5 million shares of its common stock at a price of $12.30 per share. The closing of the private placement was contingent upon the completion of the Beacon Acquisition and was completed on April 29, 2025. As a result of the closing, the Company raised $823.8 million in net proceeds, after deducting offering costs of $6.8 million, to partially fund the Beacon Acquisition and related costs.

***Issuance of Mandatory Convertible Preferred Stock***

On May 27, 2025, the Company completed a preferred stock offering, through which QXO issued and sold 11.5 million depositary shares ("Depositary Shares"), each representing a 1/20th interest in a share of the Company's 5.50% Series B Mandatory Convertible Preferred Stock, liquidation preference $1,000 per share, par value $0.001 per share (the "Mandatory Convertible Preferred Stock"). The amount issued included 1.5 million Depositary Shares issued pursuant to the exercise in full of the option granted to the underwriters to purchase additional Depositary Shares. The Company received net proceeds from the offering of $558.1 million, after deducting underwriting discounts, commissions and offering expenses of $16.9 million.

*Dividends* 

The Mandatory Convertible Preferred Stock will accumulate dividends (which may be paid in cash or, subject to certain limitations, in shares of common stock or in any combination of cash and common stock) at a rate per annum equal to 5.50% on the liquidation preference of $1,000 per share, payable when, as and if declared by the Company's board of directors (or an authorized committee thereof), on February 15, May 15, August 15 and November 15 of each year, beginning on August 15, 2025 and ending on, and including, May 15, 2028. Given the requirement to pay dividends in any settlement outcome of the Mandatory Convertible Preferred Stock, the Company accrues dividends whether or not they are formally declared by the Company's board of directors. During the year ended December 31, 2025, the Company paid $14.8 million of dividends to holders of Mandatory Convertible Preferred Stock. Subsequent to the close of the year ended December 31, 2025, the Company paid $7.9 million of quarterly dividends to holders of Mandatory Convertible Preferred Stock.

*Mandatory Conversion*

The following table illustrates the conversion rate per share of the Mandatory Convertible Preferred Stock, subject to certain anti-dilution adjustments, based on the applicable market value of the common stock:

---

| | |
|:---|:---|
| **Applicable Market Value of Common Stock** | **Conversion Rate per Share of Mandatory Convertible Preferred Stock** |
| Greater than $20.2126 (the "Threshold Appreciation Price") | 49.4740 shares of common stock |
| Equal to or less than the Threshold Appreciation Price but greater than or equal to the Initial Price | Between 49.4740 and 60.6060 shares of common stock, determined by dividing $1,000 by the applicable market value |
| Less than $16.50 (the "Initial Price") | 60.6060 shares of common stock |

---

The following table illustrates the conversion rate per Depositary Share, subject to certain anti-dilution adjustments, based on the applicable market value of the common stock:

---

| | |
|:---|:---|
| **Applicable Market Value of Common Stock** | **Conversion Rate per Depository Share Representing a 1/20th interest in a share of the Mandatory Convertible Preferred Stock**  |
| Greater than the Threshold Appreciation Price | 2.4737 shares of common stock |
| Equal to or less than the Threshold Appreciation Price but greater than or equal to the Initial Price | Between 2.4737 and 3.0303 shares of common stock, determined by dividing $50 by the applicable market value |
| Less than the Initial Price | 3.0303 shares of common stock |

---

*Optional Conversion*

Other than the occurrence of a fundamental change (as defined in the Company's Certificate of Designations relating to the Mandatory Convertible Preferred Stock) at any time prior to May 15, 2028, a holder of Mandatory Convertible Preferred Stock may elect to convert such holder's shares of Mandatory Convertible Preferred Stock, in whole or in part, at the minimum conversion rate of 49.4740 shares of common stock per share of Mandatory Convertible Preferred Stock (equivalent to 2.4737 shares of common stock per Depositary Share), subject to certain anti-dilution and other adjustments. Because each Depositary Share represents a 1/20th fractional interest in a share of Mandatory Convertible Preferred Stock, a holder of Depositary Shares may convert its Depositary Shares only in lots of 20 Depositary Shares.

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

*Fundamental Change Conversion* 

If a fundamental change occurs on or prior to May 15, 2028, holders of the Mandatory Convertible Preferred Stock will have the right to convert their shares of Mandatory Convertible Preferred Stock, in whole or in part, into shares of common stock at the fundamental change conversion rate during the period beginning on, and including, the effective date of such fundamental change and ending on, and including, the earlier of (a) the date that is 20 calendar days after such effective date (or, if later, the date that is 20 calendar days after holders receive notice of such fundamental change) and (b) May 15, 2028. For the avoidance of doubt, the period described in the immediately preceding sentence may not end on a date that is later than May 15, 2028.

*Ranking* 

The Mandatory Convertible Preferred Stock ranks, with respect to dividend rights and distribution of assets upon liquidation, winding-up or dissolution, (i) senior to the Company's common stock and each other class or series of capital stock, whether outstanding or established after the date of issuance of the Mandatory Convertible Preferred Stock, the terms of which do not expressly provide that it ranks senior to or on a parity with the Mandatory Convertible Preferred Stock as to payment of dividends and distribution of assets upon liquidation, winding-up or dissolution, and (ii) junior to the Convertible Preferred Stock. The Mandatory Convertible Preferred Stock ranks on a parity with or junior to each class or series of capital stock, the terms of which expressly provide for a pari passu or senior ranking, respectively, relative to the Mandatory Convertible Preferred Stock.

*Voting Rights*

Holders of Mandatory Convertible Preferred Stock will not have voting rights, except with respect to issuances of securities senior to the Mandatory Convertible Preferred Stock, amendments to the Company's Fifth Amended and Restated Certificate of Incorporation that would materially and adversely affect the rights of the holders of Mandatory Convertible Preferred Stock, or in the event of a merger, consolidation, exchange or reclassification involving the Mandatory Convertible Preferred Stock, or non-payment of dividends for six consecutive quarters.

***Registered Equity Offerings***

In April 2025, the Company sold 37.7 million shares of the Company's common stock in an underwritten public offering at a price of $13.25 per share. The closing of the equity offering was completed on April 21, 2025 and the Company raised $487.7 million in net proceeds from the equity offering, after deducting offering costs of $12.3 million. The Company also granted the underwriters in the public offering a 30-day option to purchase up to an additional 5.7 million shares of the Company's common stock at a price of $13.25 per share less underwriting discounts and commissions. On May 5, 2025, the option was partially exercised with respect to 4.0 million shares resulting in an additional $51.8 million of net proceeds. The remaining option to purchase additional shares expired unexercised at the end of the 30-day period.

In May 2025, the Company sold 48.5 million shares of the Company's common stock in an underwritten public offering at a price of $16.50 per share. The Company also granted the underwriters in the public offering a 30-day option to purchase up to an additional 7.3 million shares of the Company's common stock at a price of $16.50 per share less underwriting discounts and commissions. On May 21, 2025, the option was exercised in full. The closing of the equity offering was completed on May 23, 2025 and the Company raised $892.4 million in net proceeds from the equity offering, after deducting offering costs of $27.6 million.

In June 2025, the Company sold 89.9 million shares of the Company's common stock in an underwritten public offering at a price of $22.25 per share. The closing of the equity offering was completed on June 26, 2025 and the Company raised $1.96 billion in net proceeds from the equity offering, after deducting offering costs of $37.8 million. The Company also granted the underwriters in the public offering a 30-day option to purchase up to an additional 13.5 million shares of the Company's common stock at a price of $22.25 per share less underwriting discounts and commissions. On July 24, 2025, the option was partially exercised with respect to 1.7 million shares resulting in additional net proceeds of $38.1 million. The remaining option to purchase additional shares expired unexercised at the end of the 30-day period.

In January 2026, the Company sold 31.6 million shares of the Company's common stock in an underwritten public offering at a price of $23.80 per share. The closing of the equity offering was completed on January 20, 2026 and the Company raised $749.4 million in net proceeds from the equity offering, after deducting offering costs of $3.8 million. The Company also granted the underwriters in the public offering a 30-day option to purchase up to an additional 4.7 million shares of the Company's common stock at a price of $23.80 per share less underwriting discounts and commissions. The option to purchase additional shares expired unexercised at the end of the 30-day period.

***January 2026 Investment Agreement***

Subsequent to the close of the year ended December 31, 2025, the Company entered into an investment agreement in January 2026 (the "January 2026 Investment Agreement") with AP Quince Holdings, L.P., a fund managed by affiliates of Apollo Global Management, Inc., and the other investors party thereto (collectively, the "January 2026 Investors"). Pursuant to the January 2026 Investment Agreement, the January 2026 Investors committed until July 15, 2026 (the "Initial Commitment Period") to purchase up to 300,000 shares of a new series of Series C Convertible Perpetual Preferred Stock, par value $0.001 per share (the "Series C Preferred Stock"), for an aggregate purchase price of $3.0 billion to fund one or more acquisitions of assets, equity or businesses (or portions

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

thereof) for a purchase price in excess of $1.5 billion or as otherwise determined by the Company (each, a "Qualifying Acquisition"). The Initial Commitment Period will be extended with respect to the commitment for a Qualifying Acquisition up to an additional 12 months if a definitive acquisition agreement for such Qualifying Acquisition is executed before the expiration of the Initial Commitment Period.

**7. Earnings (Loss) Per Common Share** 

Basic earnings (loss) per common share is computed using the two-class method, which is an earnings allocation method that determines earnings (loss) per share for common shares and participating securities. Basic net income (loss) per share is calculated by dividing net income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding during the period, without consideration for common share equivalents or the conversion of the Company's Convertible Preferred Stock and Mandatory Convertible Preferred Stock. The weighted-average number of common shares outstanding used in the basic and diluted net loss per share calculation include the Pre-Funded Warrants as the Pre-Funded Warrants are exercisable at any time for nominal consideration. Common share equivalents consist of the incremental common shares issuable upon the exercise of stock options and vesting of restricted stock unit awards.

Diluted net income (loss) per common share is calculated by utilizing the most dilutive result of the if-converted and two-class methods. In both methods, net income (loss) attributable to common stockholders and the weighted-average common shares outstanding are adjusted to account for the impact of the assumed issuance of potential common shares that are dilutive, subject to dilution sequencing rules.

The following table presents the components and calculations of basic and diluted net income (loss) per common share attributable to common stockholders:

---

| | | |
|:---|:---|:---|
| *(in millions, except per share amounts; certain amounts may not recalculate due to rounding)* | **Year Ended December 31,** | **Year Ended December 31,** |
| *(in millions, except per share amounts; certain amounts may not recalculate due to rounding)* | **2025** | **2024** |
| **Basic and diluted earnings (loss) per common share computation:** |  |  |
| Net (loss) income | $(279.4) | $28.0 |
| &nbsp;&nbsp;Less: Convertible Preferred Stock dividend | (90.0) | (51.0) |
| &nbsp;&nbsp;Less: Mandatory Convertible Preferred Stock dividend | (18.9) |  |
| &nbsp;&nbsp;Less: Undistributed earnings allocated to participating securities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss attributable to common shareholders | $(388.3) | $(23.0) |
| Weighted-average common shares | 571.0 | 185.0 |
| Weighted-average Pre-Funded Warrants | 42.0 | 19.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total weighted-average common shares outstanding | 613.0 | 204.0 |
| Basic and diluted loss per common share | $(0.63) | $(0.11) |

---

Subsequent to the year ended December 31, 2025, the Company sold 31.6 million shares of the Company's common stock in an underwritten public offering, the impact of which was not included in the computation of diluted net income (loss) per common share.

The following table includes the number of shares that may be dilutive common shares in the future. These shares were not included in the computation of diluted net income (loss) per common share because the effect was either anti-dilutive or the requisite performance conditions were not met:

---

| | | |
|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** |
| *(in millions)* | **2025** | **2024** |
| Convertible Preferred Stock | 219.0 | 219.0 |
| Mandatory Convertible Preferred Stock | 32.7 |  |
| Warrants | 219.0 | 219.0 |
| Stock-based awards | 26.2 | 21.9 |
| Total potential dilutive securities not included in loss per common share | 496.9 | 459.9 |

---

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

Subsequent to the year ended December 31, 2025, the Company received commitments from investors for investing up to $3.0 billion for the issuance of up to 300,000 shares of Series C Preferred Stock with a stated value of $10,000 per share contingent on a Qualifying Acquisition, the issuance of which may result in dilutive common shares in the future. If issued, the stated value of the Series C Preferred Stock will be, at the option of the holders, convertible into the Company's common stock at an initial conversion price of $23.25 per share.

**8. Stock-based Compensation**

At the special meeting of the Company's stockholders on May 30, 2024, the stockholders approved the QXO, Inc. 2024 Omnibus Incentive Plan (the "2024 Plan"). The 2024 Plan provides for the grant of options intended to qualify as incentive stock options ("ISOs"), nonqualified stock options ("NSOs"), stock appreciation rights ("SARs"), restricted share awards, RSUs, PRSUs, cash incentive awards, deferred share units and other equity-based and equity-related awards, as well as cash-based awards.

Subject to adjustment for changes in capitalization, the maximum aggregate number of shares of common stock that may be delivered pursuant to awards granted under the 2024 Plan shall be equal to 30,000,000 (the "Plan Share Limit"), of which 30,000,000 shares of common stock may be delivered pursuant to ISOs granted under the 2024 Plan (such amount, the "Plan ISO Limit"). The 2024 Plan provides that the Plan Share Limit shall automatically increase on January 1 of each calendar year commencing on January 1, 2025 and ending on January 1, 2034 in an amount equal to three percent (3%) of the sum of: i) the number of shares of common stock outstanding as of December 31 of the preceding calendar year, and ii) the number of shares of common stock into which the Convertible Preferred Stock outstanding on December 31 of the preceding calendar year are convertible. The Company may act prior to the first day of any calendar year to provide that there shall be no increase in the Plan Share Limit for such calendar year or that the increase in the Plan Share Limit for such calendar year shall be a lesser number of shares than would otherwise occur. The Compensation and Talent Committee took no action to alter the automatic increase effective January 1, 2026 in the Plan Share Limit under the 2024 Plan. The automatic renewal increased the Plan Share Limit to 62.0 million shares, including shares available for issuance as a result of the Converted Beacon Stock Plan (as defined below), for the calendar year commencing on January 1, 2026.

As part of the Beacon Acquisition, the Company assumed the remaining shares authorized and available for future issuance under the Beacon Roofing Supply, Inc. 2024 Stock Plan into the 2024 Plan as of the Closing Date (the "Converted Beacon Stock Plan"), which was adjusted based on the equity award exchange ratio discussed below and subject to certain regulatory limits. As a result, 21.5 million additional shares were added to the 2024 Plan's Plan Share Limit as of the Closing Date and may only be used to grant equity awards to employees that were former Beacon employees on the Closing Date or QXO employees hired after the Closing Date. A portion of the additional shares were used to grant the Converted RSUs and Converted NSOs (as defined and further discussed below).

As of December 31, 2025, there were 35.2 million additional shares of the Company's common stock reserved for future issuance under the 2024 Plan.

***Beacon Equity Awards***

On the Closing Date of the Beacon Acquisition, the Company converted outstanding Beacon stock-based incentive awards issued to Beacon employees under the Beacon Roofing Supply, Inc. 2024 Stock Plan at a 9.8380 equity award exchange ratio. In accordance with the terms of the Merger Agreement, the equity award exchange ratio was determined as the Merger Consideration divided by the volume-weighted average closing sale price of one share of QXO's common stock for the five consecutive trading days ended April 28, 2025 of $12.64 per share.

Employee-held outstanding Beacon RSUs were converted into corresponding QXO RSUs, subject to the same service-based vesting terms as immediately prior to the Beacon Acquisition. All RSUs held by a non-employee member of the board of directors of Beacon, whether vested or unvested, were accelerated in full and cancelled in exchange for a cash payment equal to the product of (i) the Merger Consideration and (ii) the number of Beacon shares underlying such RSUs. Each outstanding Beacon PRSU was also converted into QXO RSUs, with the performance-based vesting condition deemed satisfied at target and the resulting award subject solely to time-based vesting (collectively, the "Converted RSUs"). All outstanding stock option awards were converted into corresponding QXO NSOs (the "Converted NSOs"). The exercise price of Converted NSOs was adjusted using the equity award exchange ratio such that the award holders maintained the same economic benefit as of the Closing Date.

The total fair value of the Converted RSUs and Converted NSOs was $176.8 million as of the Beacon Acquisition's Closing Date, of which $87.5 million was related to pre-combination expense and was included as a component of purchase price. The remaining fair value of $89.3 million relates to post-combination expense, of which $59.3 million was recognized during the year ended December 31, 2025. As of December 31, 2025, the future unrecognized stock-based compensation expense related to the outstanding Converted RSUs was $23.9 million, which will be recognized over a remaining service period of 1.3 years. As of December 31, 2025, the future unrecognized stock-based compensation expense related to the outstanding Converted NSOs was $0.7 million, which will be recognized over a remaining service period of 0.9 years.

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

***Converted NSOs***

Converted NSOs generally expire 10 years after the grant date and, except under certain conditions, the options are subject to continued employment and vest in three annual installments over the three-year period following the grant date. During the year ended December 31, 2025, the Company issued 5.1 million of Converted NSOs with a weighted-average exercise price of $5.04, of which 3.8 million were exercised during the period at a weighted-average exercise price of $5.02. There was no other activity related to NSOs during the year ended December 31, 2025.

***RSUs***

The Company grants RSUs which vest subject to the employee's continued employment with the Company through the applicable vesting date.

The following table summarizes the activity related to the Company's RSUs for the year ended December 31, 2025:

---

| | | |
|:---|:---|:---|
| *(in millions, except for weighted-average grant date fair value)* | **Number of RSUs** | **Weighted-Average Grant Date Fair Value** |
| Balance at beginning of period | 13.5 | $11.57 |
| &nbsp;&nbsp;Granted | 1.8 | $17.70 |
| &nbsp;&nbsp;Converted RSUs | 9.7 | $13.23 |
| &nbsp;&nbsp;Vested<sup>(1)</sup> | (6.7) | $12.77 |
| &nbsp;&nbsp;Forfeited | (2.2) | $12.12 |
| Balance at end of period | 16.1 | $12.69 |
| <sup>(1)</sup> The number of RSUs vested includes 2.0 million RSUs that vested on December 31, 2025, but were not legally settled until January 2026. | <sup>(1)</sup> The number of RSUs vested includes 2.0 million RSUs that vested on December 31, 2025, but were not legally settled until January 2026. | <sup>(1)</sup> The number of RSUs vested includes 2.0 million RSUs that vested on December 31, 2025, but were not legally settled until January 2026. |

---

The following table summarizes additional information regarding RSUs:

---

| | | |
|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** |
| | **2025** | **2024** |
| Weighted-average fair value per share of RSUs granted and converted | $13.94 | $11.57 |
| Total grant date fair value of RSUs vested | $86.0 | $— |
| Total intrinsic value of RSUs released | $122.7 | $— |

---

As of December 31, 2025, total unrecognized stock-based compensation expense related to unvested RSUs was $148.0 million and is expected to be recognized over a weighted-average period of 3.4 years.

***PRSUs***

The Company grants PRSUs which include a service-based vesting condition and a market condition for exercisability. The service condition is subject to the employee's continued employment with the Company through the applicable vesting date. The vesting of certain PRSUs is also subject to achievement of performance goals relating to the Company's total stock return compared to the total stock return ranking of each company that is in the S&P 500 index. The performance goals for a portion of the PRSUs will be measured over a cumulative performance period ending on December 31, 2028, and the performance goals for the remainder of the PRSUs will be measured based on designated performance periods that occur within such cumulative period.

The following table summarizes the market-based conditions:

---

| | |
|:---|:---|
| **Percentile Position vs.<br>S&P 500 Index Companies** | **Units Earned as a<br>Percentage of Target** |
| Below 55th Percentile | —% |
| 55th Percentile | 100% |
| 65th Percentile | 150% |
| 75th Percentile | 175% |
| 80th Percentile | 200% |
| 90th Percentile | 225% |

---

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

The following table summarizes the activity related to the Company's PRSUs for the year ended December 31, 2025:

---

| | | |
|:---|:---|:---|
| *(in millions, except for weighted-average grant date fair value)* | **Number of PRSUs** | **Weighted- Average Grant Date Fair Value** |
| Balance at beginning of period | 8.4 | $20.24 |
| &nbsp;&nbsp;Granted | 0.4 | $18.83 |
| Balance at end of period | 8.8 | $20.17 |

---

As of December 31, 2025, total unrecognized stock-based compensation expense related to unvested PRSUs was $103.4 million and is expected to be recognized over a weighted-average period of 2.8 years.

Subsequent to the year ended December 31, 2025, 2.4 million PRSUs with performance goals relating to the Company's total stock return compared to the total stock return ranking of each company that is in the S&P 500 index for the performance period ended December 31, 2025 vested upon certification of the results by the Compensation and Talent Committee of the Company's board of directors.

The fair value of PRSUs with a market condition is determined on the date of grant using a Monte Carlo model to simulate total stockholder return for the Company and peer companies. The following weighted-average assumptions were used in the Monte Carlo model in determining the fair value of PRSUs granted during the year ended December 31, 2025 and 2024:

---

| | | |
|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** |
| | **2025** | **2024** |
| Performance period | 3.66 years | 4.42 years |
| Risk-free interest rate | 3.8% | 4.0% |
| Expected volatility | 42.3% | 40.0% |
| Dividend yield | —% | —% |

---

The risk-free interest rate is based on the U.S. Treasury yield curve with a term equal to the expected term of the PRSU in effect at the time of grant. Expected volatility is based on historical volatility of the stock of the Company's peer industry group.

The RSUs and PRSUs may vest in whole or in part before the applicable vesting date if the grantee's employment is terminated by the Company without cause or by the grantee with good reason (as defined in the grant agreement), upon death or disability of the grantee or in the event of a change in control of the Company. Upon vesting, the RSUs and PRSUs result in the issuance of shares of the Company's common stock. The holders of the RSUs and PRSUs do not have the rights of a stockholder and do not have voting rights until shares are issued and delivered in settlement of the awards.

***Stock-Based Compensation Expense***

Stock-based compensation expense is included within selling, general and administrative expenses in the consolidated statements of operations. The Company recognized stock-based compensation expense as follows:

---

| | | |
|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** |
| *(in millions)* | **2025** | **2024** |
| NSOs | $8.5 | $— |
| RSUs | 83.0 | 12.6 |
| PRSUs | 53.0 | 21.8 |
| Total stock-based compensation expense | $144.5 | $34.4 |

---

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

**9. Debt**

The following table summarizes all outstanding debt:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **As of** | **As of** | **As of** | **As of** | **As of** | **As of** |
| | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** |
| *(in millions)* | **Principal Balance** | **Principal Balance** | **Carrying Value** | **Carrying Value** | **Fair Value** | **Fair Value** |
| **Long-term Debt, net** |  |  |  |  |  |  |
| Term Loan Facility<sup>(1)</sup> | $| 850.0 | $| 827.8 | $| 852.1 |
| Notes<sup>(2)</sup> | 2250.0 | 2250.0 | 2229.5 | 2229.5 | 2356.9 | 2356.9 |
| Long-term debt, net | $| 3100.0 | $| 3057.3 | $| 3209.0 |
| <sup>(1)</sup> Interest rate of 5.72% as of December 31, 2025. | <sup>(1)</sup> Interest rate of 5.72% as of December 31, 2025. | <sup>(1)</sup> Interest rate of 5.72% as of December 31, 2025. | <sup>(1)</sup> Interest rate of 5.72% as of December 31, 2025. | <sup>(1)</sup> Interest rate of 5.72% as of December 31, 2025. | <sup>(1)</sup> Interest rate of 5.72% as of December 31, 2025. | <sup>(1)</sup> Interest rate of 5.72% as of December 31, 2025. |
| <sup>(2)</sup> Interest rate of 6.75% as of December 31, 2025. | <sup>(2)</sup> Interest rate of 6.75% as of December 31, 2025. | <sup>(2)</sup> Interest rate of 6.75% as of December 31, 2025. | <sup>(2)</sup> Interest rate of 6.75% as of December 31, 2025. | <sup>(2)</sup> Interest rate of 6.75% as of December 31, 2025. | <sup>(2)</sup> Interest rate of 6.75% as of December 31, 2025. | <sup>(2)</sup> Interest rate of 6.75% as of December 31, 2025. |

---

The Company did not have any outstanding debt as of December 31, 2024.

As of December 31, 2025, all outstanding debt was classified as Level 2 in the fair value hierarchy. The fair values of QXO Building Products' Notes and Term Loan Facility were based upon recent trading prices.

***Senior Secured Notes***

On April 29, 2025, Merger Sub (the "Issuer") completed the issuance and sale of $2.25 billion in aggregate principal amount of 6.75% Senior Secured Notes due 2032 (the "Notes"). The Notes were issued pursuant to an Indenture, dated as of April 29, 2025 (as supplemented, the "Indenture"), and, upon consummation of the Beacon Acquisition, QXO Building Products assumed the obligations under the Notes and the Indenture and certain of QXO Building Products' subsidiaries (collectively, the "Subsidiary Guarantors") guaranteed QXO Building Products' obligations under the Notes and the Indenture. The Notes are secured by first-priority liens on substantially all assets of the Issuer and the Subsidiary Guarantors, other than the ABL Priority Collateral (as defined below) (the "Notes Priority Collateral") and by second-priority liens on substantially all of the Issuer's and the Subsidiary Guarantors' inventory, receivables and related assets (the "ABL Priority Collateral"), in each case, subject to certain exceptions and permitted liens. The Notes will mature on April 30, 2032. Interest on the Notes accrues at 6.75% per annum and will be paid semi-annually, in arrears, on April 30 and October 30 of each year, beginning October 30, 2025. Proceeds from the Notes were used to partially fund the Beacon Acquisition and related transaction expenses.

On or after April 30, 2028, the Issuer may redeem the Notes at its option, in whole at any time or in part from time to time, at the redemption prices set forth in the Indenture. In addition, prior to April 30, 2028, the Issuer may redeem the Notes at its option, in whole at any time or in part from time to time, at a redemption price equal to 100% of the principal amount of the Notes redeemed, plus a "make-whole" premium and accrued and unpaid interest, if any. Notwithstanding the foregoing, at any time prior to April 30, 2028, the Issuer may also redeem up to 50% of the aggregate principal amount of the Notes with funds in an aggregate amount not to exceed the net cash proceeds from certain equity offerings at a redemption price equal to 106.75% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any. In addition, prior to April 30, 2028, the Issuer may redeem during each twelve-month period up to 10% of the original aggregate principal amount of the Notes at a redemption price equal to 103%, plus accrued and unpaid interest, if any.

The Indenture includes customary affirmative and negative covenants with respect to the Issuer and its restricted subsidiaries. These covenants are subject to a number of important qualifications and exceptions. Additionally, upon the occurrence of specified change of control events, the Issuer must offer to repurchase the Notes at 101% of the principal amount, plus accrued and unpaid interest, if any, to, but excluding, the purchase date. The Indenture also provides for customary events of default. As of December 31, 2025, the Issuer and its restricted subsidiaries were in compliance with these covenants.

Debt issuance costs of $22.2 million related to the Notes were capitalized and are being amortized over the term of the financing arrangement.

As of December 31, 2025, the outstanding balance on the Notes, net of $20.5 million of unamortized debt issuance costs, was $2.23 billion.

***Term Loan Facility***

On April 29, 2025, Merger Sub, as initial borrower, entered into a Term Loan Credit Agreement (the "Term Loan Credit Agreement") with Queen HoldCo, LLC ("Holdings"), the lenders party thereto and Goldman Sachs Bank USA, as administrative agent, which provides for senior secured financing consisting of a term loan facility (the "Term Loan Facility") in an aggregate principal amount of $2.25 billion. Upon the consummation of the Beacon Acquisition, QXO Building Products entered into a joinder to the Term Loan Credit Agreement as the surviving borrower (the "Borrower"). The facility matures on April 30, 2032. Proceeds from the Term Loan Facility were used to partially fund the Beacon Acquisition and related transaction expenses.

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

Borrowings under the Term Loan Facility bear interest at variable rates based on Term SOFR or a base rate, in each case plus an applicable margin. The facility requires scheduled quarterly amortization payments in an annual amount equal to 1.0% of the original principal amount of borrowings under the Term Loan Facility, with the remaining balance due at maturity. The Term Loan Facility also requires the Borrower to make certain mandatory prepayments. The Borrower can make voluntary prepayments at any time without penalty, except in connection with a repricing event in respect of the Term Loan Facility, subject to customary breakage costs. Any refinancing through the issuance of certain debt or any repricing amendment, in either case, that constitutes a "repricing event" applicable to the term loans resulting in a lower yield occurring at any time during the first six months after the closing date of the Term Loan Facility will be accompanied by a 1.00% prepayment premium or fee, as applicable.

The Term Loan Facility is unconditionally guaranteed by Holdings on a limited-recourse basis and secured by a first-priority lien on the equity interests of the Borrower held by Holdings. The Term Loan Facility is also guaranteed by each Subsidiary Guarantor and secured by a first-priority lien with respect to the Notes Priority Collateral and a second-priority lien with respect to the ABL Priority Collateral. The Term Loan Facility is secured on a ratable basis with the Notes with respect to the Notes Priority Collateral and the ABL Priority Collateral.

The Term Loan Credit Agreement includes customary affirmative and negative covenants with respect to the Borrower and its restricted subsidiaries. These covenants are subject to a number of important qualifications and exceptions. The Term Loan Credit Agreement contains certain customary events of default, including relating to a change of control. As of December 31, 2025, the Borrower and its restricted subsidiaries were in compliance with these covenants.

The principal amount of borrowing under the Term Loan Facility was reduced by an original issue discount ("OID") of 1%. OID costs of $22.5 million and debt issuance costs of $50.9 million related to the Term Loan Facility were capitalized and are being amortized over the term of the financing arrangement.

On May 29, 2025, the Borrower made a voluntary principal prepayment of $1.40 billion under the Term Loan Facility. As a result, the Borrower was relieved of its obligation to make quarterly amortization payments in an annual amount equal to 1.0% of the original principal amount of borrowings under the Term Loan Facility. Additionally, as a result of the principal prepayment, the Borrower recognized a loss on debt extinguishment of $45.7 million comprised of $14.0 million of unamortized OID costs and $31.7 million of unamortized debt issuance costs related to the Term Loan Facility.

On November 5, 2025, the Borrower amended the Term Loan Credit Agreement in order to refinance the Term Loan Facility. The amendment reduced the applicable margin for borrowings under the Term Loan Facility from 3.00% to 2.00% for Term SOFR borrowings and from 2.00% to 1.00% for base rate borrowings (the "Term Loan Refinancing"). As a result of the Term Loan Refinancing, the Borrower recognized a loss on debt extinguishment of $4.0 million, which is comprised of $0.9 million of unamortized OID costs, $2.2 million of unamortized debt issuance costs, and $0.9 million of third-party fees associated with the modification of the Term Loan Facility. Additionally, new debt issuance costs of $0.1 million were capitalized and are being amortized over the term of the financing arrangement.

The loss on debt extinguishment resulting from the principal prepayment and the subsequent Term Loan Refinancing was separately recognized on the consolidated statements of operations.

As of December 31, 2025, the outstanding balance on the Term Loan Facility, net of $6.8 million of unamortized OID costs and $15.4 million of unamortized debt issuance costs, was $827.8 million.

***ABL Credit Agreement***

On April 29, 2025, Merger Sub, as initial borrower, entered into the Asset-Based Revolving Credit Agreement (the "ABL Credit Agreement"), with Holdings, the lenders party thereto and Citibank, N.A., as administrative agent and collateral agent, which provides for an asset-based revolving credit facility (the "ABL Facility"), with an aggregate borrowing availability equal to the lesser of $2.0 billion, and the borrowing base. Upon the consummation of the Beacon Acquisition, the Borrower entered into a joinder to the ABL Credit Agreement as the surviving borrower. The ABL Facility matures on April 29, 2030. Based on the Borrower's borrowing base as of December 31, 2025, the Borrower had $1.97 billion borrowing capacity under the ABL Facility.

Borrowings under the ABL Facility bear interest at a rate equal to, at the Borrower's option, either (a) (x) Term SOFR determined by reference to the secured overnight financing rate published by the Federal Reserve Bank of New York, which rate shall be no less than zero or (y) a base rate determined by reference to the highest of (i) the federal funds rate plus 0.50% per annum, (ii) the prime rate quoted by the Wall Street Journal as the "Prime Rate" and (iii) the sum of one-month adjusted Term SOFR plus 1.00% per annum, which base rate shall be no less than 1.00%, or (b) (x) with respect to borrowings of Canadian dollars, Term CORRA determined by reference to the interbank offered rate administered by the CORRA Administrator, which rate shall be no less than zero or (y) a base rate determined by reference to the highest of (i) zero (0%), (ii) the one-month Term CORRA plus 1.00% per annum or (iii) the prime rate reported by Reuters, in each case plus an applicable margin based on excess availability set forth in the ABL Credit Agreement. The Borrower is also required to pay a commitment fee equal to 0.20% per annum (depending on the average utilization of the commitments) to the lenders under the ABL Facility in respect of the unutilized commitments thereunder. The Borrower can make voluntary prepayments at any time without penalty, subject to customary breakage costs.

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

The ABL Facility (and at the Borrower's option certain hedging, cash management and bank product obligations secured under the ABL Facility) is unconditionally guaranteed by Holdings on a limited-recourse basis and secured by a second-priority lien on the equity interests of the Borrower held by Holdings. The ABL Facility is also guaranteed by each Subsidiary Guarantor and secured by a second-priority lien with respect to the Notes Priority Collateral and a first-priority lien with respect to the ABL Priority Collateral.

The ABL Credit Agreement includes customary affirmative and negative covenants with respect to the Borrower and its restricted subsidiaries. These covenants are subject to a number of important qualifications and exceptions. The ABL Credit Agreement contains certain customary events of default, including relating to a change of control.

The ABL Facility requires that the Borrower, commencing on or after the last day of the first full fiscal quarter ending after the closing date of the ABL Facility, maintain a minimum fixed charge coverage ratio of 1.0 to 1.0 at any time that availability is less than the greater of (x) $120 million and (y) 10% of the lesser of (i) the borrowing base at such time and (ii) the aggregate amount of ABL Facility commitments at such time. As of December 31, 2025, the Borrower and its restricted subsidiaries were in compliance with these covenants.

Debt issuance costs of $18.8 million related to the ABL Facility were capitalized and are being amortized ratably over the term of the financing arrangement. The debt issuance costs related to the ABL Facility are presented as an asset, included in other assets, net on the consolidated balance sheets. As of December 31, 2025, there were $16.3 million of unamortized debt issuance costs related to the ABL Facility.

As of December 31, 2025, there was no outstanding balance on the ABL Facility. The Borrower and its restricted subsidiaries had $21.2 million in outstanding standby letters of credit issued under the ABL Facility as of December 31, 2025.

***Other Information***

All required principal payments on outstanding debt are due after December 31, 2030.

Under the terms of the ABL Facility, the Term Loan Facility and the Notes, QXO Building Products is limited in making certain restricted payments, including dividends on its common stock. Based on the provisions in the respective debt agreements and given the Company's intention to not pay common stock dividends in the foreseeable future, the Company does not believe that the restrictions are significant.

**10. Leases**

The Company primarily operates in leased branch facilities and corporate offices, which are accounted for as operating leases. The real estate leases expire between 2026 and 2037. The Company also leases equipment, such as trucks and forklifts. Equipment leases are accounted for as either operating or finance leases. The equipment leases expire between 2026 and 2032.

The following table presents components of lease costs recognized in the consolidated statements of operations:

---

| | | |
|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** |
| *(in millions)* | **2025** | **2024** |
| Operating lease costs | $119.3 | $0.3 |
| Finance lease costs: |  |  |
| &nbsp;&nbsp;&nbsp;Amortization of right-of-use assets | 33.1 | 0.2 |
| &nbsp;&nbsp;&nbsp;Interest on lease obligations | 8.1 |  |
| Variable lease costs | 13.6 | 0.2 |
| &nbsp;&nbsp;Total lease costs | $174.1 | $0.7 |

---

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

The following table presents supplemental cash flow information related to the Company's leases:

---

| | | |
|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** |
| *(in millions)* | **2025** | **2024** |
| Cash paid for amounts included in measurement of lease obligations: |  |  |
| &nbsp;&nbsp;&nbsp;Operating cash outflows from operating leases | $107.4 | $0.3 |
| &nbsp;&nbsp;&nbsp;Operating cash outflows from finance leases | $8.0 | $— |
| &nbsp;&nbsp;&nbsp;Financing cash outflows from finance leases | $30.3 | $0.2 |
| Right-of-use assets obtained in exchange for new finance lease liabilities | $34.5 | $0.1 |
| Right-of-use assets obtained in exchange for new operating lease liabilities | $29.2 | $— |

---

As of December 31, 2025, the Company's operating leases had a weighted-average remaining lease term of 6.1 years and a weighted-average discount rate of 6.59%, and the Company's finance leases had a weighted-average remaining lease term of 4.2 years and a weighted-average discount rate of 6.59%.

The following table summarizes future lease payments for each of the next five years ending December 31 and thereafter:

---

| | | |
|:---|:---|:---|
| *(in millions)* | **Operating** <br>**Leases** | **Finance**<br>**Leases** |
| 2026 | $148.0 | $60.1 |
| 2027 | 148.8 | 54.8 |
| 2028 | 131.2 | 43.6 |
| 2029 | 111.3 | 30.5 |
| 2030 | 89.9 | 18.9 |
| Thereafter | 190.8 | 6.3 |
| &nbsp;&nbsp;Total future lease payments | 820.0 | 214.2 |
| Imputed interest | (150.7) | (26.3) |
| Total lease liabilities | $669.3 | $187.9 |

---

**11. Commitments and Contingencies**

Various legal claims arise from time to time in the normal course of business. In assessing loss contingencies related to legal proceedings that are pending against the Company, or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

The Company believes that it has adequately accrued for the potential impact of loss contingencies that are probable and reasonably estimable, and does not believe that the ultimate resolution of any matters to which it is presently a party will have a material adverse effect on the Company's results of operations, financial condition or cash flows. However, the results of these matters cannot be predicted with certainty, and an unfavorable resolution of one or more of these matters could have a material adverse effect on the Company's financial condition, results of operations or cash flows.

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

**12. Income Taxes**

The components of (loss) income before (benefit from) provision for income taxes and (benefit from) provision for income taxes are as follows:

---

| | | |
|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** |
| *(in millions)* | **2025** | **2024** |
| (Loss) income before (benefit from) provision for income taxes |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;U.S. | $(350.2) | $50.8 |
| &nbsp;&nbsp;&nbsp;&nbsp;Foreign | 13.1 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $(337.1) | $50.8 |
| (Benefit from) provision for income taxes |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Provision for (benefit from) current income taxes |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;U.S. federal | $0.7 | $16.6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Foreign | 3.4 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;U.S. state and local | (0.8) | 7.4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total provision for current income taxes | 3.3 | 24.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;(Benefit from) provision for deferred income taxes |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;U.S. federal | (52.7) | (0.7) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Foreign |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;U.S. state and local | (8.3) | (0.5) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total benefit from deferred income taxes | (61.0) | (1.2) |
| &nbsp;&nbsp;&nbsp;&nbsp;Total (benefit from) provision for income taxes |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;U.S. federal | (52.0) | 15.9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Foreign | 3.4 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;U.S. state and local | (9.1) | 6.9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total (benefit from) provision for income taxes | $(57.7) | $22.8 |

---

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

The following table is a reconciliation of the U.S. federal statutory income tax rate of 21% to the Company's effective tax rate for the year ended December 31, 2025 pursuant to the disclosure requirements of ASU 2023-09. See Note 2 for additional details regarding the Company's prospective adoption of ASU 2023-09.

---

| | | |
|:---|:---|:---|
| | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** |
| *(in millions, except percentages)* | **Amount** | **Percent** |
| U.S. federal statutory income tax rate | $(70.8) | 21.0% |
| Domestic federal |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-taxable and non-deductible items |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 162(m) limitation | 19.6 | (5.8)% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-taxable stock compensation | (5.3) | 1.6% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-deductible transaction costs | 4.8 | (1.4)% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other | 0.2 | (0.1)% |
| &nbsp;&nbsp;&nbsp;&nbsp;Changes in valuation allowance | (0.1) | —% |
| &nbsp;&nbsp;&nbsp;&nbsp;Other | 2.1 | (0.6)% |
| Domestic state and local income taxes, net of federal effect<sup>(1)</sup> | (8.9) | 2.6% |
| Foreign tax effects |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Other foreign jurisdictions | 0.7 | (0.2)% |
| Effective tax rate | $(57.7) | 17.1% |
| <sup>(1)</sup> State and local income taxes in California, Florida, Pennsylvania, Georgia, New Jersey, New York, Maryland, Illinois, and Virginia comprise the majority of the domestic state and local income taxes, net of federal effect category. | <sup>(1)</sup> State and local income taxes in California, Florida, Pennsylvania, Georgia, New Jersey, New York, Maryland, Illinois, and Virginia comprise the majority of the domestic state and local income taxes, net of federal effect category. | <sup>(1)</sup> State and local income taxes in California, Florida, Pennsylvania, Georgia, New Jersey, New York, Maryland, Illinois, and Virginia comprise the majority of the domestic state and local income taxes, net of federal effect category. |

---

The following table is a reconciliation of the U.S. federal statutory income tax rate of 21% to the Company's effective tax rate for the year ended December 31, 2024:

---

| | |
|:---|:---|
| | **Year Ended December 31, 2024** |
| U.S. federal statutory income tax rate | 21.0% |
| State income tax, net of federal benefit | 10.7% |
| Permanent items | 13.5% |
| Return to provision for prior year | —% |
| Changes in valuation allowance | (0.2)% |
| Effective tax rate | 45.0% |

---

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

Deferred taxes are the result of temporary differences between the bases of assets and liabilities for financial reporting purposes. Deferred tax assets and liabilities are compromised of the following:

---

| | | |
|:---|:---|:---|
| | **As of** | **As of** |
| | **December 31,** | **December 31,** |
| *(in millions)* | **2025** | **2024** |
| Deferred tax assets: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Lease liabilities | $164.9 | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;Share-based payments | 20.4 | 1.4 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses | 20.9 | 0.1 |
| &nbsp;&nbsp;&nbsp;&nbsp;Inventory valuation | 38.5 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Allowance for credit losses | 16.4 | 0.1 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net operating loss | 25.9 | 0.7 |
| &nbsp;&nbsp;&nbsp;&nbsp;Tax credit carryforwards | 0.3 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Intangible assets |  | 0.5 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other | 0.2 |  |
| Total deferred tax assets | 287.5 | 2.8 |
| Deferred tax liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Intangible assets | (848.5) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Lease right-of-use assets | (170.5) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Property and equipment | (107.9) | (0.1) |
| &nbsp;&nbsp;&nbsp;&nbsp;Financing | (7.8) |  |
| Total deferred tax liabilities | (1134.7) | (0.1) |
| &nbsp;&nbsp;&nbsp;&nbsp;Valuation allowance |  | (0.1) |
| Net deferred income tax (liabilities) assets | $(847.2) | $2.6 |

---

As of December 31, 2025 and December 31, 2024, the Company had U.S. federal net operating loss carryforwards of $102.5 million and $3.4 million, respectively, all of which have an indefinite carryforward. Certain acquired net operating loss carryforwards are subject to an annual limitation but are expected to be realized. As of December 31, 2025, the Company had state net operating loss carryforwards of $5.5 million that expire in varying amounts over the next 20 years. As of December 31, 2024, the Company had no state net operating loss carryforwards.

The Company regularly assesses the need for a valuation allowance of its deferred tax assets, and to the extent it is determined that an adjustment is needed, such adjustment will be recorded in the period that the determination is made.

As a result of the Beacon Acquisition, the Company recorded net deferred tax liabilities of $910.3 million. This consists of $900.4 million of intangible assets and $122.7 million of fixed assets, partially offset by inventories, net operating losses, 163(j) carryforwards, and other deferred tax assets and credit carryforwards of $112.8 million.

The increase in deferred tax assets as of December 31, 2025 as compared to December 31, 2024 primarily relates to additional U.S. federal and state net operating loss carryforwards from the current year taxable loss position and increases in the book basis of inventories from the Beacon Acquisition. The increase in deferred tax liabilities as of December 31, 2025 as compared to December 31, 2024 primarily relates to intangible and fixed assets recognized in connection with the Beacon Acquisition, which are not deductible for tax purposes when amortized or depreciated.

In July 2025, the One Big Beautiful Bill Act ("OBBBA") was enacted into law in the U.S. The OBBBA includes numerous provisions that affect corporate taxation, including changes to bonus depreciation, the expensing of domestic research costs, and modifications to certain U.S. international tax rules. The Company has analyzed the impacts of the OBBBA and reflected them in the current period. These impacts do not have a material effect on the tax rate for the year ended December 31, 2025. The majority of the tax law changes will take effect in future years.

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

The Company's non-domestic subsidiary, Beacon Roofing Supply Canada Company ("BRSCC"), is treated as a controlled foreign corporation. BRSCC's taxable income, which reflects all of the Company's Canadian operations, is being taxed only in Canada and would generally be taxed in the U.S. only upon an actual or deemed distribution. The Company expects that BRSCC's earnings will be indefinitely reinvested for the foreseeable future; therefore, no U.S. deferred tax asset or liability for the differences between the book basis and the tax basis of BRSCC has been recorded as of December 31, 2025. Under the Tax Cuts and Jobs Act enacted in December 2017, future distributions from foreign subsidiaries will generally be subject to a federal dividends received deduction in the U.S. Should the earnings be remitted as dividends, the Company may be subject to additional foreign withholding and state income taxes. It is not practicable to estimate the amount of any additional taxes which may be payable on the undistributed earnings.

As of December 31, 2025 and December 31, 2024, there were no uncertain tax positions which, if recognized, would affect the Company's effective tax rate.

The following table presents income taxes paid, net of refunds, disaggregated by significant federal, state, and foreign jurisdictions for the year ended December 31, 2025. The significant federal, state, and foreign jurisdictions were determined based on a threshold of 5% of total income taxes paid, net of refunds, in accordance with ASU 2023-09.

---

| | |
|:---|:---|
| *(in millions)* | **Year Ended December 31, 2025** |
| U.S. federal | $22.0 |
| U.S. state and local |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Connecticut | 6.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other | 7.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total U.S. state and local income taxes paid, net of refunds | 13.0 |
| Foreign |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Canada | 3.2 |
| Total income taxes paid, net of refunds | $38.2 |

---

**Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure**

None.

**Item 9A. Controls and Procedures**

***Evaluation of Disclosure and Control Procedures***

As of the end of the period covered by this Annual Report, the Company's management evaluated, with the participation of the Company's principal executive officer and principal financial officer, the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934). Based upon that evaluation, the Company's principal executive officer and principal financial officer concluded that the Company's disclosure controls and procedures are effective in ensuring that information required to be disclosed by the Company in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and is accumulated and communicated to our management, including the Company's principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

***Management*'*s Report on Internal Control over Financial Reporting***

The Company's management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934). As of the end of the period covered by this Annual Report, the Company's management evaluated, with the participation of its principal executive officer and principal financial officer, the effectiveness of the Company's internal control over financial reporting. This evaluation was conducted using the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission 2013. Based upon that evaluation, the Company's management concluded that its internal control over financial reporting was effective as of December 31, 2025.

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

Pursuant to the rules of the SEC, the Company's management's report on internal control over financial reporting is furnished with this Annual Report and shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference in any filing under the Securities Act of 1933 or Securities Exchange Act of 1934.

On April 29, 2025, the Company completed its acquisition of Beacon (see Note 3 – *Acquisitions* of Item 8 of Part II, "Financial Statements and Supplementary Data" of this Annual Report). In accordance with the SEC's guidance that a recently acquired business may be omitted from the scope of management's assessment for up to one year from the date of acquisition, the Company's management has excluded Beacon from its evaluation of its internal control over financial reporting as of December 31, 2025. As of and for the year ended December 31, 2025, total assets of Beacon represented 86.1% of consolidated total assets of the Company, and total revenues of Beacon represented 99.1% of total revenues of the Company.

This Annual Report does not include an attestation report of the Company's independent registered public accounting firm regarding the Company's internal control over financial reporting.

***Changes to Internal Control over Financial Reporting***

On April 29, 2025, the Company completed its acquisition of Beacon (see Note 3 – *Acquisitions* of Item 8 of Part II, "Financial Statements and Supplementary Data" of this Annual Report). The Company is currently integrating policies, processes, people, technology and operations for the combined company. Management will continue to evaluate our internal control over financial reporting as we execute integration activities. During the fiscal quarter ended December 31, 2025, except as noted above, there were no changes in our internal control over financial reporting, as defined in Exchange Act Rule 13a-15(f), that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

***Inherent Limitations on the Effectiveness of Controls***

Our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving their objectives as specified above. Management does not expect, however, that our disclosure controls and procedures will prevent or detect all error and fraud. Any control system, no matter how well designed and operated, is based on certain assumptions and can provide only reasonable, not absolute, assurance that its objectives will be met. Further, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected.

**Item 9B. Other Information**

The predecessor financial information is included as Exhibits 99.1, 99.2, and 99.3 to this Annual Report and are incorporated herein by reference.

**Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections**

Not applicable.

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

**PART III**

**Item 10. Directors, Executive Officers and Corporate Governance**

Incorporated herein by reference is the text found in this Annual Report from the section titled, "Information About Our Executive Officers" in Item 1 of Part I. The remaining information required by Item 10 of Part III of Form 10-K is incorporated herein by reference from our definitive Proxy Statement to be filed pursuant to Regulation 14A within 120 days after the close of the fiscal year ended December 31, 2025.

The Company has a Securities Trading Policy that governs the purchase, sale and other dispositions of its securities by directors, officers and employees. We believe these policies and procedures are reasonably designed to promote compliance with insider trading laws, rules and regulations and applicable listing standards. A copy of our Securities Trading Policy is included as Exhibit 19.1 to this Annual Report.

**Item 11. Executive Compensation**

Information required by Item 11 of Part III of Form 10-K is incorporated herein by reference from our Proxy Statement to be filed pursuant to Regulation 14A within 120 days after the close of the fiscal year ended December 31, 2025.

**Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters**

Information required by Item 12 of Part III of Form 10-K is incorporated herein by reference from our Proxy Statement to be filed pursuant to Regulation 14A within 120 days after the close of the fiscal year ended December 31, 2025.

**Item 13. Certain Relationships and Related Transactions, and Director Independence**

Information required by Item 13 of Part III of Form 10-K is incorporated herein by reference from our Proxy Statement to be filed pursuant to Regulation 14A within 120 days after the close of fiscal year ended December 31, 2025.

**Item 14. Principal Accountant Fees and Services**

Information required by Item 14 of Part III of Form 10-K incorporated herein by reference from our Proxy Statement to be filed pursuant to Regulation 14A within 120 days after the close of fiscal year ended December 31, 2025.

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

**PART IV**

**Item 15. Exhibits and Financial Statement Schedules**

***Financial Statements and Financial Statement Schedules***

The list of consolidated financial statements provided in the Index to Consolidated Financial Statements is incorporated herein by reference. Such consolidated financial statements are filed as part of this Annual Report. All financial statement schedules are omitted because the required information is not applicable, or because the information required is included in the consolidated financial statements and notes thereto.

***Exhibits***

**(a)** 

---

| | | | | |
|:---|:---|:---|:---|:---|
| | | **Incorporated by Reference** | **Incorporated by Reference** | **Incorporated by Reference** |
| **Exhibit Number** | **Description** | **Form** | **Exhibit** | **Filing Date** |
| 2.1 | <u>[Amended and Restated Investment Agreement, dated April 14, 2024, by and among QXO, Inc. and Jacobs Private Equity II, LLC (on behalf of itself and on behalf of each of the other Investors). +](https://www.sec.gov/Archives/edgar/data/1236275/000121390024032760/ea020388901ex2-1_silversun.htm)</u> | 8-K | 2.1 | April 15, 2024 |
| 2.2 | <u>[Agreement and Plan of Merger, dated as of March 20, 2025, by and among QXO, Inc., Beacon Roofing Supply, Inc. and Queen MergerCo, Inc. +](https://www.sec.gov/Archives/edgar/data/1236275/000114036125009591/ny20045603x1_ex2-1.htm)</u> | 8-K | 2.1 | March 20, 2025 |
| 2.3 | <u>[Agreement and Plan of Merger, dated as of February 10, 2026, by and among QXO, Inc., Kodiak Building Supply Inc., Juno Merger Sub, Inc. and CSC Shareholder Services LLC. +](https://www.sec.gov/Archives/edgar/data/1236275/000110465926012932/tm265913d1_ex2-1.htm)</u> | 8-K | 2.1 | February 11, 2026 |
| 3.1 | <u>[Fifth Amended and Restated Certificate of Incorporation of the Company, dated June 6, 2024.](https://www.sec.gov/Archives/edgar/data/1236275/000121390024050403/ea020740901ex3-1_qxoinc.htm)</u> | 8-K | 3.1 | June 6, 2024 |
| 3.2 | <u>[Certificate of Amendment to the Fifth Amended and Restated Certificate of Incorporation of the Company, dated June 6, 2024.](https://www.sec.gov/Archives/edgar/data/1236275/000121390024050403/ea020740901ex3-2_qxoinc.htm)</u> | 8-K | 3.2 | June 6, 2024 |
| 3.3 | <u>[Certificate of Designation of the Convertible Perpetual Preferred Stock of QXO, Inc.](https://www.sec.gov/Archives/edgar/data/1236275/000121390024050403/ea020740901ex4-1_qxoinc.htm)</u>  | 8-K | 4.1 | June 6, 2024 |
| 3.4 | <u>[Certificate of Designations of 5.50% Series B Mandatory Convertible Preferred Stock, filed with the Secretary of State of the State of Delaware and effective May 27, 2025.](https://www.sec.gov/Archives/edgar/data/1236275/000110465925052978/tm2515387d9_ex3-1.htm)</u> | 8-K | 3.1 | May 27, 2025 |
| 3.5 | <u>[Amended and Restated Bylaws of the Company.](https://www.sec.gov/Archives/edgar/data/1236275/000121390024050403/ea020740901ex3-3_qxoinc.htm)</u> | 8-K | 3.3 | June 6, 2024 |
| 4.1\* | <u>[Description of Capital Stock.](q4-25exx41.htm)</u> |  |  |  |
| 4.2 | <u>[F](https://www.sec.gov/Archives/edgar/data/1236275/000121390024050403/ea020740901ex4-2_qxoinc.htm)[orm of Wa](https://www.sec.gov/Archives/edgar/data/1236275/000121390024050403/ea020740901ex4-2_qxoinc.htm)[rrant Certificate.](https://www.sec.gov/Archives/edgar/data/1236275/000121390024050403/ea020740901ex4-2_qxoinc.htm)</u> | 8-K | 4.2 | June 6, 2024 |
| 4.3 | <u>[Form of Warrant Certificate](https://www.sec.gov/Archives/edgar/data/1236275/000121390024050403/ea020740901ex4-3_qxoinc.htm)[.](https://www.sec.gov/Archives/edgar/data/1236275/000121390024050403/ea020740901ex4-3_qxoinc.htm)</u> | 8-K | 4.3 | June 6, 2024 |
| 4.4 | <u>[Form of Warrant Certificate](https://www.sec.gov/Archives/edgar/data/1236275/000121390024050403/ea020740901ex4-4_qxoinc.htm)[.](https://www.sec.gov/Archives/edgar/data/1236275/000121390024050403/ea020740901ex4-4_qxoinc.htm)</u> | 8-K | 4.4 | June 6, 2024 |
| 4.5 | <u>[Form of](https://www.sec.gov/Archives/edgar/data/1236275/000110465924071429/tm2417260d1_ex4-1.htm)[Pre-Funded](https://www.sec.gov/Archives/edgar/data/1236275/000110465924071429/tm2417260d1_ex4-1.htm)[Warrant](https://www.sec.gov/Archives/edgar/data/1236275/000110465924071429/tm2417260d1_ex4-1.htm)[.](https://www.sec.gov/Archives/edgar/data/1236275/000110465924071429/tm2417260d1_ex4-1.htm)</u> | 8-K | 4.1 | June 14, 2024 |
| 4.6 | <u>[Form of Certificate for the 5.50% Series B Mandatory Convertible Preferred Stock (included as Exhibit A to Exhibit 3.4).](https://www.sec.gov/Archives/edgar/data/1236275/000110465925052978/tm2515387d9_ex3-1.htm)</u> | 8-K | 4.1 | May 27, 2025 |
| 4.7 | <u>[Deposit Agreement, dated as of May 27, 2025, among QXO, Inc., Equiniti Trust Company, LLC, acting as the Depositary, and the holders from time to time of the depositary receipts described therein.](https://www.sec.gov/Archives/edgar/data/1236275/000110465925052978/tm2515387d9_ex4-2.htm)</u> | 8-K | 4.2 | May 27, 2025 |
| 4.8 | <u>[Form of Depositary Receipt for the Depositary Shares (included as Exhibit A to Exhibit 4.7).](https://www.sec.gov/Archives/edgar/data/1236275/000110465925052978/tm2515387d9_ex4-2.htm)</u> | 8-K | 4.3 | May 27, 2025 |
| 4.9 | <u>[Indenture, dated as of April 29, 2025, among Queen MergerCo, Inc., the subsidiary guarantors party thereto and Wilmington Trust, National Association, as trustee.](https://www.sec.gov/Archives/edgar/data/1236275/000114036125016371/ef20048077_ex4-1.htm)</u> | 8-K | 4.1 | April 29, 2025 |
| 4.10 | <u>[Supplemental Indenture No. 1, dated as of April 29, 2025, among QXO Building Products, Inc., the subsidiary guarantors party thereto and Wilmington Trust, National Association, as trustee.](https://www.sec.gov/Archives/edgar/data/1236275/000114036125016371/ef20048077_ex4-2.htm)</u> | 8-K | 4.2 | April 29, 2025 |
| 10.1 | <u>[Term Loan Credit Agreement, dated as of April 29, 2025, among Queen HoldCo, LLC, as Holdings, Queen MergerCo, Inc., as Borrower, the lenders party thereto and Goldman Sachs Bank USA, as administrative agent.](https://www.sec.gov/Archives/edgar/data/1236275/000114036125016371/ef20048077_ex10-1.htm)</u> | 8-K | 10.1 | April 29, 2025 |
| 10.2 | <u>[Asset-Based Revolving Credit Agreement, dated as of April 29, 2025, among Queen HoldCo, LLC, as Holdings, Queen MergerCo, Inc., as Borrower, the subsidiary borrowers party thereto, the lenders and issuing banks party thereto and Citibank, N.A., as administrative agent and collateral agent.](https://www.sec.gov/Archives/edgar/data/1236275/000114036125016371/ef20048077_ex10-2.htm)</u> | 8-K | 10.2 | April 29, 2025 |

---

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

---

| | | | | |
|:---|:---|:---|:---|:---|
| 10.3 | <u>[Joinder to Credit Agreement, dated as of April 29, 2025, by QXO Building Products, Inc., as Surviving Borrower, in respect of the Term Loan Credit Agreement, dated as of April 29, 2025, among Queen HoldCo, LLC, as Holdings, Queen MergerCo, Inc., as Borrower, the lenders party thereto and Goldman Sachs Bank USA, as administrative agent.](https://www.sec.gov/Archives/edgar/data/1236275/000114036125016371/ef20048077_ex10-3.htm)</u> | 8-K | 10.3 | April 29, 2025 |
| 10.4 | <u>[Joinder to Credit Agreement, dated as of April 29, 2025, by QXO Building Products, Inc., as Surviving Borrower, in respect of the Asset-Based Revolving Credit Agreement, dated as of April 29, 2025, among Queen HoldCo, LLC, as Holdings, Queen MergerCo, Inc., as Borrower, the subsidiary borrowers party thereto, the lenders and issuing banks party thereto and Citibank, N.A., as administrative agent and collateral agent.](https://www.sec.gov/Archives/edgar/data/1236275/000114036125016371/ef20048077_ex10-4.htm)</u> | 8-K | 10.4 | April 29, 2025 |
| 10.5 | <u>[Stockholders Agreement, dated as of June 6, 2024, by and among the Company, the Other Investors and JPE.](https://www.sec.gov/Archives/edgar/data/1236275/000121390024050403/ea020740901ex10-1_qxoinc.htm)</u> | 8-K | 10.1 | June 6, 2024 |
| 10.6 | <u>[Registration Rights Agreement, dated as of June 6, 2024, by and among the Company, JPE and the other investors.](https://www.sec.gov/Archives/edgar/data/1236275/000121390024050403/ea020740901ex10-2_qxoinc.htm)</u> | 8-K | 10.2 | June 6, 2024 |
| 10.7 | <u>[Form of Purchase Agreement, dated as of June 13, 2024, by and between QXO, Inc. and the Investors signatory thereto](https://www.sec.gov/Archives/edgar/data/1236275/000110465924071429/tm2417260d1_ex10-1.htm)[.](https://www.sec.gov/Archives/edgar/data/1236275/000110465924071429/tm2417260d1_ex10-1.htm)</u> | 8-K | 10.1 | June 14, 2024 |
| 10.8 | <u>[Form of Purchase Agreement, dated as of July 22, 2024, by and between QXO, Inc. and the Investors signatory thereto.](https://www.sec.gov/Archives/edgar/data/1236275/000110465924081341/tm2419875d1_ex10-1.htm)</u> | 8-K | 10.1 | July 22, 2024 |
| 10.9 | <u>[Form of Purchase Agreement, dated as of March 17, 2025, by and between QXO, Inc. and the Investors signatory thereto](https://www.sec.gov/Archives/edgar/data/1236275/000095014225000763/eh250604504_ex1001.htm)</u> | 8-K | 10.1 | March 17, 2025 |
| 10.10 | <u>[Incremental Assumption and Amendment Agreement No.1, dated November 5, 2025, by and among Queen HoldCo, LLC, as Holdings, QXO Building Products, Inc., as Borrower, the subsidiary loan parties party thereto, the lenders party thereto and Goldman Sachs Bank USA, as administrative agent.](https://www.sec.gov/Archives/edgar/data/1236275/000110465925106997/tm2530242d1_ex10-1.htm)</u> | 8-K | 10.1 | November 5, 2025 |
| 10.11\* | <u>[Investment Agreement, dated as of January 5, 2026, by and among QXO, Inc., AP Quince Holdings, L.P. and the other investors party thereto](q4-25exx1011.htm)[.](q4-25exx1011.htm)</u> |  |  |  |
| 10.12\*\*\* | <u>[Employment Agreement, dated as of June 5, 2024, by and between Brad Jacobs and the Company.](https://www.sec.gov/Archives/edgar/data/1236275/000121390024050403/ea020740901ex10-3_qxoinc.htm)</u> | 8-K | 10.3 | June 6, 2024 |
| 10.13\*\*\* | <u>[Offer Letter, dated April 14, 2024, by and between QXO, Inc. and Mark Meller.](https://www.sec.gov/Archives/edgar/data/1236275/000121390024032760/ea020388901ex10-2_silversun.htm)</u> | 8-K | 10.2 | April 15, 2024 |
| 10.14\*\*\* | <u>[Offer Letter, dated June 6, 2024, by and between QXO, Inc. and Christopher Signorello.](https://www.sec.gov/Archives/edgar/data/1236275/000162828025040367/q2-25exx105.htm)</u> | 10-Q | 10.5 | August 14, 2025 |
| 10.15\*\*\* | <u>[Offer Letter, dated June 14, 2024, by and between QXO, Inc. and Sean Smith.](https://www.sec.gov/Archives/edgar/data/1236275/000162828024037059/a1010_qxoofferletterxsmith.htm)</u> | 10-Q | 10.10 | August 14, 2024 |
| 10.16\*\*\* | <u>[Employment Agreement, dated as of July 17, 2024, by and between QXO, Inc. and Ihsan Essaid.](https://www.sec.gov/Archives/edgar/data/1236275/000162828024047429/qxo10-q_q32024ex101.htm)</u> | 10-Q | 10.1 | November 13, 2024 |
| 10.17\*\*\* | <u>[QXO, Inc. Severance Plan.](https://www.sec.gov/Archives/edgar/data/1236275/000162828024037059/a1009_qxoseveranceplan.htm)</u> | 10-Q | 10.9 | August 14, 2024 |
| 10.18\*\*\* | <u>[QXO, Inc. 2024 Omnibus Incentive Compensation Plan.](https://www.sec.gov/Archives/edgar/data/1236275/000121390024050099/ea020735501ex10-1_silversun.htm)</u> | 8-K | 10.1 | June 5, 2024 |
| 10.19\*\*\* | <u>[Form of Restricted Stock Unit Award Agreement.](https://www.sec.gov/Archives/edgar/data/1236275/000162828024037059/a1011_formofrsuawardagreem.htm)</u> | 10-Q | 10.11 | August 14, 2024 |
| 10.20\* | <u>[Form of Restricted Stock Unit Award Agreement for Non-Employee Directors](q4-25exx1020.htm)[.](q4-25exx1020.htm)</u> |  |  |  |
| 10.21\* | <u>[Form of Performance-Based Restricted Stock Unit Award Agreement.](q4-25exx1021.htm)</u> |  |  |  |
| 16.1 | <u>[Letter re Change in Certifying Accountant](https://www.sec.gov/Archives/edgar/data/1236275/000095014225000846/eh250608298_ex1601.htm)[.](https://www.sec.gov/Archives/edgar/data/1236275/000095014225000846/eh250608298_ex1601.htm)</u> | 8-K | 16.1 | March 26, 2025 |
| 19.1 | <u>[Securities Trading Policy of QXO, Inc.](https://www.sec.gov/Archives/edgar/data/1236275/000162828025040367/q2-25exx191.htm)</u> | 10-Q | 19.1 | August 14, 2025 |
| 21.1\* | <u>[List of Subsidiaries](q4-25exx211.htm)</u> |  |  |  |
| 23.1\* | <u>[Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm](q4-25exx231.htm)</u> |  |  |  |
| 23.2\* | <u>[Consent of Marcum LLP, Independent Registered Public Accounting Firm](q4-25exx232.htm)</u> |  |  |  |
| 23.3\* | <u>[Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm](q4-25exx233.htm)</u> |  |  |  |
| 23.4\* | <u>[Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm](q4-25exx234.htm)</u> |  |  |  |
| 31.1\* | <u>[Certification by the Principal Executive Officer of Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a)).](q4-25exx311.htm)</u> |  |  |  |
| 31.2\* | <u>[Certification by the Principal Financial Officer of Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a)).](q4-25exx312.htm)</u> |  |  |  |
| 32.1\*\* | <u>[Certification by the Principal Executive Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.](q4-25exx321.htm)</u> |  |  |  |
| 32.2\*\* | <u>[Certification by the Principal Financial Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.](q4-25exx322.htm)</u> |  |  |  |
| 97.1 | <u>[Compensation Recovery Policy of QXO, Inc.](https://www.sec.gov/Archives/edgar/data/1236275/000162828025009626/qxo-20241231xexx971.htm)</u> | 10-K | 97.1 | March 4, 2025 |
| 99.1\* | <u>[Predecessor financial information for QXO Building Products, Inc. for the period from January 1, 2025 to April 28, 2025](q4-25exx991.htm)</u> |  |  |  |
| 99.2\* | <u>[Predecessor financial information for QXO Building Products, Inc. for the year ended December 31, 2024](q4-25exx992.htm)</u> |  |  |  |
| 99.3\* | <u>[Management's discussion and analysis of predecessor financial information for QXO Building Products, Inc.](q4-25exx993.htm)</u> |  |  |  |

---

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

---

| | |
|:---|:---|
| 101.INS\* | Inline XBRL Instance – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
| 101.SCH\* | Inline XBRL Taxonomy Extension Schema |
| 101.CAL\* | Inline XBRL Taxonomy Extension Calculation |
| 101.PRE\* | Inline XBRL Taxonomy Extension Presentation |
| 101.LAB\* | Inline XBRL Taxonomy Extension Labels |
| 101.DEF\* | Inline XBRL Taxonomy Extension Definition |
| 104\* | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
| \*Filed herewith | \*Filed herewith |
| \*\*Furnished herewith | \*\*Furnished herewith |
| \*\*\*Management contract or compensatory plan or arrangement. | \*\*\*Management contract or compensatory plan or arrangement. |
| + Schedules and/or exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. QXO agrees to furnish supplementally a copy of any omitted schedules and/or exhibits to the SEC on a confidential basis upon request. | + Schedules and/or exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. QXO agrees to furnish supplementally a copy of any omitted schedules and/or exhibits to the SEC on a confidential basis upon request. |

---

**Item 16. Form 10-K Summary**

None.

------

<u>[**Table of Contents**](#i7078bf44f9cb4e28a3cd96e853af2352_7)</u>

**SIGNATURES**

Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the registrant has duly caused this report on Form 10-K to be signed on its behalf by the undersigned thereunto duly authorized.

---

| | | |
|:---|:---|:---|
| | **QXO, INC.** | **QXO, INC.** |
| Date: February 27, 2026 | By: | /s/ Brad Jacobs |
|  |  | Brad Jacobs |
|  |  | Chief Executive Officer |
|  |  | (Principal Executive Officer) |

---

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

---

| | | |
|:---|:---|:---|
| Name | Position | Date |
| /s/ Brad Jacobs | Chief Executive Officer and Chairman of the Board of Directors | February 27, 2026 |
| Brad Jacobs | (Principal Executive Officer) |  |
| /s/ Ihsan Essaid | Chief Financial Officer | February 27, 2026 |
| Ihsan Essaid | (Principal Financial Officer) |  |
| /s/ Sean Smith | Chief Accounting Officer | February 27, 2026 |
| Sean Smith | (Principal Accounting Officer) |  |
| /s/ Allison Landry | Lead Independent Director | February 27, 2026 |
| Allison Landry |  |  |
| /s/ Jason Aiken | Director | February 27, 2026 |
| Jason Aiken |  |  |
| /s/ Marlene Colucci | Director | February 27, 2026 |
| Marlene Colucci |  |  |
| /s/ Mario Harik | Director | February 27, 2026 |
| Mario Harik |  |  |
| /s/ Mary Kissel | Director | February 27, 2026 |
| Mary Kissel |  |  |
| /s/ Jared Kushner | Director | February 27, 2026 |
| Jared Kushner |  |  |

---

## Exhibit 4.1

**Exhibit 4.1**

**DESCRIPTION OF CAPITAL STOCK**

As of December 31, 2025, QXO, Inc. ("QXO," the "Company," "we," "us," and "our") had the following classes of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended: (i) our common stock, par value $0.00001 per share, and (ii) depositary shares ("Depositary Shares"), each representing a 1/20th interest in a share of our 5.50% Series B Mandatory Convertible Preferred Stock, par value $0.001 per share ("Series B Preferred Stock").

The following is a description of the material terms of our capital stock, as well as other material terms of the Company's Fifth Amended and Restated Certificate of Incorporation (as amended, the "Amended and Restated Charter"), Amended and Restated Bylaws (the "Amended and Restated Bylaws") and other relevant documents. This description is only a summary. You should read it together with the Company's Amended and Restated Charter and Amended and Restated Bylaws, which are included as exhibits to the Company's Annual Report on Form 10-K for the year ended December 31, 2025 (the "2025 Annual Report") and incorporated herein by reference.

QXO's authorized capital stock is comprised of 2,010,000,000 shares, consisting of (i) 2,000,000,000 shares of QXO's common stock, par value $0.00001 per share and (ii) 10,000,000 shares of preferred stock, par value $0.001 per share, the rights and preferences of which may be established from time to time by QXO's board of directors.

As of December 31, 2025, there were 674,547,217 outstanding shares of the Company's common stock and 1,575,000 outstanding shares of the Company's preferred stock.

**Common Stock**

Holders of our common stock are entitled to the rights set forth below.

***Voting Rights***

The holders of QXO common stock are entitled to one vote per share on all matters submitted to a vote of QXO's stockholders (including the election or removal of directors), and do not have cumulative voting rights. Except as otherwise provided in the Amended and Restated Charter or as required by law, all matters to be voted on by QXO's stockholders will be approved if votes cast in favor of the matter exceed the votes cast opposing the matter at a meeting at which a majority of the outstanding shares entitled to vote on such matter is represented in person or by proxy.

***Dividend Rights***

Holders of QXO common stock will share equally in any dividends that may be declared by QXO's board of directors out of assets or funds legally available therefor, subject to the rights of the holders of any outstanding preferred stock.

***Liquidation Rights***

In the event of any voluntary or involuntary liquidation, dissolution or winding up of QXO's affairs, holders of QXO common stock would be entitled to share ratably in QXO's assets that are legally available for distribution to stockholders. If QXO has any preferred stock outstanding at such time, holders of the preferred stock may be entitled to distribution and/or liquidation preferences. In either such

------

case, QXO must pay the applicable distribution to the holders of its preferred stock before it may pay distributions to the holders of QXO common stock.

***Other Rights***

Holders of QXO common stock do not have preemptive, subscription, redemption or conversion rights. All outstanding shares of QXO common stock are validly issued, fully paid and nonassessable. The rights, preferences and privileges of holders of QXO common stock will be subject to those of the holders of any shares of preferred stock that QXO may issue in the future.

**Preferred Stock** 

QXO's board of directors is authorized to provide for one or more series of preferred stock and to fix the terms of such preferred stock, including the preferences, powers and relative, participating, optional or other special rights and qualifications, limitations or restrictions thereof, including the dividend rate, conversion rights, voting rights, redemption rights and liquidation preferences and to fix the number of shares to be included in any such series without any further vote or action by QXO's stockholders. Any preferred stock so issued may rank senior to QXO's common stock with respect to the payment of dividends or amounts upon liquidation, dissolution or winding up, or both. In addition, any such shares of preferred stock may have class or series voting rights. The issuance of preferred stock may have the effect of delaying, deferring or preventing a change in control of QXO without further action by the stockholders and may adversely affect the voting and other rights of the holders of QXO common stock.

***Convertible Perpetual Preferred Stock***

The following is a summary of the material terms of the Company's convertible perpetual preferred stock (the "Convertible Perpetual Preferred Stock") as contained in the Certificate of Designation of Convertible Perpetual Preferred Stock of the Company (the "Convertible Perpetual Preferred Stock Certificate of Designation"). The following description of the Convertible Perpetual Preferred Stock is not complete and is qualified in its entirety by reference to the complete text of the Convertible Perpetual Preferred Stock Certificate of Designation, a copy of which is included as an exhibit to the Company's 2025 Annual Report and incorporated herein by reference.

*Authorized Shares and Liquidation Preference* 

The Company has designated 1,000,000 authorized shares of preferred stock as Convertible Perpetual Preferred Stock. Each share of Convertible Perpetual Preferred Stock has an initial liquidation preference of $1,000 per share, for an aggregate initial liquidation preference of $1,000,000,000.

*Ranking* 

The Convertible Perpetual Preferred Stock ranks, with respect to dividend rights and distribution of assets upon liquidation, winding-up or dissolution, senior to the Company's common stock, senior to the Series B Preferred Stock (as defined below) and senior to each other class or series of capital stock, whether outstanding or established after the date of issuance of the Convertible Perpetual Preferred Stock, the terms of which do not expressly provide that it ranks senior to or on parity with the Convertible Perpetual Preferred Stock as to payment of dividends and distribution of assets upon liquidation, winding-up or dissolution. The Convertible Perpetual Preferred Stock ranks on parity with or junior to each class

------

or series of capital stock, the terms of which expressly provide for a *pari passu* or senior ranking, respectively, relative to the Convertible Perpetual Preferred Stock.

*Dividends* 

Dividends on the Convertible Perpetual Preferred Stock are payable quarterly, when, as and if declared by the Board of Directors of the Company or a duly authorized committee thereof, out of the assets legally available for the payment of dividends, on the 15th calendar day (or the following business day if the 15th is not a business day) of January, April, July and October of each year at the rate per annum of 9% per share on the then-applicable liquidation preference (subject to the following paragraph). The amount of dividends payable for any period that is shorter or longer than a full quarterly dividend period, other than for the period commencing on the issuance date and ending on the first date after issuance on which the Convertible Perpetual Preferred Stock would be entitled to a dividend payment, will be computed on the basis of a 360-day year consisting of twelve 30-day months.

In the event that the Company pays dividends on shares of its common stock in any dividend period with respect to the Convertible Perpetual Preferred Stock, then the dividend payable in respect of each share of Convertible Perpetual Preferred Stock for such period will be equal to the greater of (a) the amount otherwise payable in respect of such share of Convertible Perpetual Preferred Stock in accordance with the foregoing paragraph and (b) the product of (i) the aggregate dividends payable per share of the Company's common stock in such dividend period multiplied by (ii) the number of shares of the Company's common stock into which such share of Convertible Perpetual Preferred Stock is then convertible.

A dividend period with respect to a dividend payment date is the period commencing on the preceding dividend payment date or, if none, the date of original issuance, and ending on the day immediately prior to the next dividend payment date.

The Company will make each dividend payment on the Convertible Perpetual Preferred Stock in cash.

*Accretion* 

If the Company is unable, or otherwise fails, to pay dividends in cash and in full on the Convertible Perpetual Preferred Stock on any dividend payment date, the then-applicable liquidation preference on each share of Convertible Perpetual Preferred Stock will be increased automatically as of the first day of the immediately succeeding dividend period by the amount of the unpaid dividends. The amount of dividends payable for any dividend period following a non-payment of dividends will be calculated on the basis of the liquidation preference of each share of Convertible Perpetual Preferred Stock, including such accreted dividends, determined as of the first day of the relevant dividend period. The Company may pay all or a portion of any dividends so accreted on any regular dividend payment date, or any other date fixed by the Board of Directors of the Company or a duly authorized committee thereof.

*Payment Restrictions* 

No dividends or other distributions may be declared or paid on any capital stock of the Company ranking on parity with or junior to the Convertible Perpetual Preferred Stock (including the Company's common stock), other than dividends and distributions payable solely in stock and cash paid in lieu of fractional shares, and no such capital stock may be redeemed or repurchased by or on behalf of the

------

Company, unless all accrued and unpaid dividends have been paid on the Convertible Perpetual Preferred Stock and any capital stock of the Company ranking on parity with the Convertible Perpetual Preferred Stock. Notwithstanding the foregoing, if full dividends have not been paid on the Convertible Perpetual Preferred Stock and any parity stock, dividends may be declared and paid on the Convertible Perpetual Preferred Stock and such parity stock so long as the dividends are declared and paid pro rata.

*Liquidation* 

In the event that the Company voluntarily or involuntarily liquidates, dissolves or winds up, the holders of the Convertible Perpetual Preferred Stock will be entitled, before any distribution to the holders of shares of the Series B Preferred Stock (as defined below) or Company's common stock or any other junior capital stock, and subject to the rights of the Company's creditors, to receive an amount equal to the greater of (a) the aggregate accreted liquidation preference on their shares of Convertible Perpetual Preferred Stock plus an amount equal to any accrued and unpaid dividends (whether or not declared) for the then-current dividend period and (b) the payment or distribution to which such holders would have been entitled if their shares of Convertible Perpetual Preferred Stock were converted into shares of the Company's common stock immediately before such liquidation, dissolution or winding-up (without accounting for the accreted liquidation preference otherwise payable).

*Voting Rights* 

Holders of Convertible Perpetual Preferred Stock will vote together with the holders of the Company's common stock on an "as-converted" basis on all matters, except as otherwise required by law. In addition, the approval of the holders of at least a majority of the outstanding shares of the Convertible Perpetual Preferred Stock, voting separately as a single class, will be required (a) to amend, alter or repeal (whether by merger, consolidation or otherwise) any provision of the Convertible Perpetual Preferred Stock Certificate of Designation, (b) to amend, alter or repeal (whether by merger, consolidation or otherwise) any provision of the Amended and Restated Charter or the Amended and Restated Bylaws if such amendment, alteration or repeal would have an adverse effect on the powers, preferences, privileges or rights of the holders of the Convertible Perpetual Preferred Stock, (c) to authorize, create, issue or increase the authorized amount of, or issue or authorize any obligation or security convertible into exchangeable for or evidencing a right to purchase, any capital stock of the Company ranking on parity with or senior to the Convertible Perpetual Preferred Stock, (d) to reclassify any authorized capital stock of the Company into any parity stock or senior stock, or any obligation or security convertible into, exchangeable for or evidencing a right to purchase any parity stock or senior stock, or (e) for any increase or decrease in the authorized number of shares of Convertible Perpetual Preferred Stock or the issuance of shares of Convertible Perpetual Preferred Stock after the date of issuance of the Convertible Perpetual Preferred Stock.

*Conversion* 

The Convertible Perpetual Preferred Stock is convertible at any time, in whole or in part, at the option of the holder thereof into a number of shares of the Company's common stock equal to the then-applicable liquidation preference divided by the then-applicable conversion price, which, as of December 31, 2025, is $4.566 per share of the Company's common stock.

The Convertible Perpetual Preferred Stock has the benefit of customary anti-dilution adjustments.

------

*Redemption* 

The Convertible Perpetual Preferred Stock is not redeemable or subject to any required offer to purchase.

***Series B Preferred Stock***

The following is a summary of the material terms of the Company's Series B Preferred Stock as contained in the Certificate of Designations of 5.50% Series B Mandatory Convertible Preferred Stock (the "Series B Certificate of Designations"). The following description of the Series B Preferred Stock is not complete and is qualified in its entirety by reference to the complete text of the Series B Certificate of Designations, a copy of which is included as an exhibit to the Company's 2025 Annual Report and incorporated herein by reference.

*Authorized Shares and Liquidation Preference* 

The Company has designated 575,000 shares of preferred stock as Series B Preferred Stock. Each share of Series B Preferred Stock has a liquidation preference of $1,000 per share, for an aggregate initial liquidation preference of $575,000,000.

*Ranking* 

The Series B Preferred Stock ranks, with respect to dividend rights and distribution of assets upon liquidation, winding-up or dissolution, senior to the Company's common stock and each other class or series of capital stock, whether outstanding or established after the date of issuance of the Series B Preferred Stock, the terms of which do not expressly provide that it ranks senior to or parity with the Series B Preferred Stock as to payment of dividends and distribution of assets upon liquidation, winding-up or dissolution. The Series B Preferred Stock ranks on parity with or junior to each class or series of capital stock, the terms of which expressly provide for a *pari passu* or senior ranking, respectively, relative to the Series B Preferred Stock. The Series B Preferred Stock ranks junior to the Convertible Perpetual Preferred Stock.

*Dividends* 

Dividends on the Series B Preferred Stock are payable quarterly, when, as and if declared by the Board of Directors of the Company or a duly authorized committee thereof, out of the assets legally available for the payment of cumulative dividends, on February 15, May 15, August 15 and November 15 of each year to, and including May 15, 2028, commencing on, and including August 15, 2025, at the rate per annum of 5.50% on the liquidation preference of $1,000 per share. The Company will make each dividend payment on the Series B Preferred Stock in cash, by delivery of shares of the Company's common stock or through any combination of cash and shares of the Company's common stock, as determined by the Board of Directors of the Company.

*Payment Restrictions* 

No dividends or other distributions may be declared or paid on any capital stock of the Company ranking on parity with or junior to the Series B Preferred Stock (including the Company's common stock), other than dividends and distributions payable solely in stock, cash paid in lieu of fractional shares and certain other exceptions, and no such capital stock may be redeemed or repurchased by or on behalf of the Company, unless all accrued and unpaid dividends have been paid on the Series B Preferred Stock

------

and any capital stock of the Company ranking on parity with the Series B Preferred Stock. Notwithstanding the foregoing, when dividends on shares of the Series B Preferred Stock have not been paid in full on any dividend payment date or declared and a sum or number of shares of common stock sufficient for payment thereof set aside for the benefit of the holders thereof on the applicable record date, no dividends may be declared or paid on any parity stock unless dividends are declared on the Series B Preferred Stock such that the respective amounts of such dividends are declared pro rata.

*Liquidation* 

In the event that the Company voluntarily or involuntarily liquidates, dissolves or winds up, the holders of the Series B Preferred Stock will be entitled before any distribution to the holders of shares of the Company's common stock or any other junior capital stock, and subject to the rights of the Company's creditors and holders of any senior stock (including the Convertible Perpetual Preferred Stock), to receive a liquidation preference in the amount of $1,000 per share of the Series B Preferred Stock, plus an amount equal to accumulated and unpaid dividends on the shares to, but excluding, the date fixed for liquidation, winding-up or dissolution to be paid out of the Company's assets available for distribution to the Company's stockholders.

*Voting Rights* 

Whenever dividends on any shares of Series B Preferred Stock have not been declared and paid for the equivalent of six or more dividend periods, whether or not consecutive dividend periods, the holders of such shares of Series B Preferred Stock, voting together as a single class with holders of any and all other series of voting preferred stock then outstanding, will be entitled at the Company's next special or annual meeting of stockholders to vote for the election of a total of two additional members of the Company's Board of Directors; *provided* that the election of any such directors will not cause the Company to violate the corporate governance requirements of the New York Stock Exchange. In the event of a nonpayment, the Company will increase the number of directors on the Company's Board of Directors by two, and the new directors will be elected at an annual or special meeting of stockholders called by the Company's Board of Directors, subject to its fiduciary duties, at the request of the holders of at least 25% of the shares of Series B Preferred Stock or of any other series of voting preferred stock, and at each subsequent annual meeting, so long as the holders of Series B Preferred Stock continue to have such voting rights.

So long as any shares of Series B Preferred Stock remain outstanding, the Company will not, without the affirmative vote or consent of the holders of at least two-thirds of the outstanding shares of Series B Preferred Stock given in person or by proxy, either in writing or at a meeting: (i) authorize or create, or increase the authorized amount of, any senior stock; (ii) amend, alter or repeal the provisions of the Amended and Restated Charter or the Series B Certificate of Designations so as to materially and adversely affect the rights, preferences, privileges or voting powers of the shares of Series B Preferred Stock; or (iii) consummate a binding share exchange or reclassification involving the shares of Series B Preferred Stock or a merger or consolidation of the Company with or into another entity, unless the Series B Preferred Stock remains outstanding or is replaced by preference securities with terms no less favorable to holders in any material respect, in each case, subject to certain exceptions.

*Conversion* 

The Series B Preferred Stock will automatically convert on the mandatory conversion date, into a number of shares of the Company's common stock equal to the conversion rate.

------

The conversion rate, which is the number of shares of the Company's common stock issuable upon conversion of each share of Series B Preferred Stock on the mandatory conversion date (excluding any shares of the Company's common stock issued in respect of accumulate but unpaid dividends, if any) is as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• if the applicable market value of the Company's common stock is greater than the "threshold appreciation price" (which is initially $20.2126), then the conversion rate is 49.4740 shares of common stock per share of Series B Preferred Stock, which is approximately equal to $1,000 divided by the threshold appreciation price;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• if the applicable market value of the Company's common stock is less than or equal to the threshold appreciation price but equal to or greater than the "initial price" (which is initially $16.5000), then the conversion rate is equal to $1,000 divided by the applicable market value of common stock, rounded to the nearest ten-thousandth of a share, which will be between 49.4740 and 60.6060 shares of common stock per share of Series B Preferred Stock; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• if the applicable market value of the Company's common stock is less than the initial price, then the conversion rate will be 60.6060 shares of common stock per share of Series B Preferred Stock, which is approximately equal to $1,000 divided by the initial price.

The Series B Preferred Stock has the benefit of customary anti-dilution adjustments.

Additionally, holders of Series B Preferred Stock may elect to convert their shares of Series B Preferred Stock upon a fundamental change of the Company. A fundamental change includes (i) a person or group acquiring beneficial ownership of more than 50% of the Company's common stock, (ii) the sale of substantially all our assets or recapitalization, reclassification, change, merger, or consolidation of our common stock into other securities or assets, and (iii) our common stock ceasing to be listed on the New York Stock Exchange, The Nasdaq Global Select Market or The Nasdaq Global Market (or any of their respective successors). Shares of Series B Preferred Stock may be converted, in part or in whole, at the conversion rate set forth in the Series B Certificate of Designations.

*Redemption* 

The Series B Preferred Stock is not redeemable or subject to any required offer to purchase. However, at the Company's option, the Company may purchase the Series B Preferred Stock or Depositary Shares from time to time in the open market, by tender offer, exchange offer or otherwise.

**Depositary Shares** 

***General***

Each Depositary Share represents a 1/20th interest in a share of the Series B Preferred Stock. Subject to the terms of the Deposit Agreement, dated as of May 27, 2025, among the Company and Equiniti Trust Company, LLC, acting as Depositary, and the holders from time to time of the depositary receipts described therein (the "Deposit Agreement"), the Depositary Shares will be entitled to all powers, preferences and special rights of the Series B Preferred Stock, as applicable, in proportion to the fraction of a share of the Series B Preferred Stock those Depositary Shares represent.

------

***Dividend Rights***

Each dividend paid on a Depositary Share will be in an amount equal to 1/20th of the dividend paid on the related share of the Series B Preferred Stock. So long as the Depositary Shares are held of record by the nominee of The Depositary Trust Company ("DTC"), declared cash dividends in respect of the Depositary Shares will be paid to DTC in same-day funds on each dividend payment date. DTC will credit accounts of its participants in accordance with DTC's normal procedures. The participants will be responsible for holding or disbursing such payments to beneficial owners of the Depositary Shares in accordance with the instructions of such beneficial owners. Record dates for the payment of dividends and other matters relating to the Depositary Shares will be the same as the corresponding record dates for the Series B Preferred Stock.

***Voting Rights***

Because each Depositary Share represents a 1/20th interest in a share of the Series B Preferred Stock, holders of depositary receipts will be entitled to 1/20th of a vote per share of Series B Preferred Stock under those circumstances in which holders of the Series B Preferred Stock are entitled to a vote.

When the bank depositary receives notice of any meeting at which the holders of the Series B Preferred Stock are entitled to vote, the bank depositary will send notice to the record holders of the Depositary Shares relating to the Series B Preferred Stock. Each record holder of Depositary Shares may instruct the bank depositary as to how to vote the amount of the Series B Preferred Stock represented by such holder's Depositary Shares in accordance with these instructions. The bank depositary will abstain from voting shares of the Series B Preferred Stock to the extent it does not receive specific instructions from the holders of Depositary Shares representing the Series B Preferred Stock.

With the consent of the record holders of at least a majority of the aggregate number of Depositary Shares then outstanding, the Depositary Shares and any provisions of the Deposit Agreement may at any time and from time to time be amended, altered or supplemented by agreement between us and the bank depositary; *provided* that, without the consent of each record holder of an outstanding Depositary Share affected, no such amendment, alteration or supplement will:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reduce the number of Depositary Shares the record holders of which must consent to an amendment, alteration or supplement of the Depositary Shares or the Deposit Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reduce the amount payable or deliverable in respect of the Depositary Shares or extend the stated time for such payment or delivery;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• impair the right, subject to certain requirements set forth in the Deposit Agreement, of any owner of Depositary Shares to surrender any receipt evidencing such Depositary Shares to the bank depositary with instructions to deliver to it the Series B Preferred Stock and all money and/or other property represented thereby;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• change the currency in which payments in respect of the Depositary Shares or any receipt evidencing such Depositary Shares is made;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• impair the right of any record holder of Depositary Shares to receive payments or deliveries on its Depositary Shares on or after the due dates therefor or to institute suit for the enforcement of any such payment or delivery;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• make any change that materially and adversely affects the conversion rights of any record holder of Depositary Shares; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• make any change that materially and adversely affects the voting rights of any record holder of Depositary Shares.

***No Preemptive or Redemption Rights***

The Depositary Shares are not entitled to preemptive rights and are not subject to redemption or sinking fund provisions. However, the Company may purchase Depositary Shares from time to time in the open market, by tender offer, exchange offer, or otherwise.

***Conversion Rights***

Because each Depositary Share represents a 1/20th interest in a share of the Series B Preferred Stock, a holder of Depositary Shares may elect to convert Depositary Shares only in lots of 20 Depositary Shares, either on an early conversion date at the minimum conversion rate, subject to adjustment, or during a fundamental change conversion period at the fundamental change conversion rate, each as set forth in the Series B Certificate of Designations.

On any conversion date for the Series B Preferred Stock, each Depositary Share corresponding to the shares of the Series B Preferred Stock so converted will be entitled to receive 1/20th of the number of shares of the Company's common stock and the amount of any cash received by the bank depositary upon conversion of each share of the Series B Preferred Stock.

After delivery of the Company's common stock by the transfer agent to the bank depositary following conversion of the Series B Preferred Stock, the bank depositary will transfer the proportional number of shares of the Company's common stock to the holders of Depositary Shares by book-entry transfer through DTC or, if the holders' interests are in certificated depositary receipts, by delivery of common stock certificates for such number of shares of the Company's common stock.

No fractional shares of common stock will be issued to holders of the Depositary Shares upon conversion. In lieu of any fractional shares of common stock otherwise issuable in respect of the aggregate number of Depositary Shares of any holder that are converted, that holder will be entitled to receive a cash adjustment (computed to the nearest cent).

***Liquidation***

Any final distribution in respect of the Series B Preferred Stock in connection with any liquidation, winding-up or dissolution of the Company shall be distributed to the record holders of the depositary receipts pursuant to the Deposit Agreement.

***Withdrawal Rights***

A holder of 20 Depositary Shares may withdraw the share of the Series B Preferred Stock corresponding to such Depositary Shares, and any cash or other property represented by such Depositary Shares. A holder who withdraws shares of Series B Preferred Stock (and any such cash or other property) will not be required to pay any stock transfer and documentary stamp taxes or duties relating to the issuance or delivery of such shares of Series B Preferred Stock (and any such cash or other property), except that such holder will be required to pay any tax or duty that may be payable relating to any transfer

------

involved in the issuance or delivery of such shares of Series B Preferred Stock (and any such cash or other property) in a name other than the name of such holder. Holders of shares of the Series B Preferred Stock will not have the right under the Deposit Agreement to deposit such shares with the bank depositary in exchange for Depositary Shares.

***Charges of Bank Depositary***

We will pay all transfer and other taxes and governmental charges arising solely from the existence of the depositary arrangements. We will pay charges of the bank depositary in connection with the initial deposit of the Series B Preferred Stock. Except where stated otherwise, holders of depositary receipts will pay other transfer and other taxes and governmental charges and any other charges, including a fee for the withdrawal of shares of Series B Preferred Stock upon surrender of depositary receipts, as are expressly provided in the Deposit Agreement to be for their accounts.

**Certain Corporate Anti-Takeover Provisions** 

Certain provisions in our Amended and Restated Charter and Amended and Restated Bylaws may be deemed to have an anti-takeover effect and may delay, deter or prevent a tender offer or takeover attempt that a stockholder might consider in its best interests, including attempts that might result in a premium being paid over the market price for shares held by stockholders.

***Election and Removal of Directors***

Our Amended and Restated Charter provides that, subject to the rights of the holders of any series of preferred stock, our directors are elected at an annual meeting of stockholders for terms expiring at the next annual meeting of stockholders. Subject to the rights of the holders of any series of preferred stock, any director may be removed, with or without cause, at any time, by the affirmative vote of the holders of at least a majority of the voting power of all outstanding shares of our capital stock entitled to vote generally in the election of directors.

***Action by Written Consent; Special Meetings of Stockholders***

Pursuant to our Amended and Restated Charter, subject to the rights of the holders of any series of preferred stock, any action required or permitted to be taken by the Company's stockholders must be effected at a duly called annual or special meeting of the stockholders and may not be effected by any consent in writing by such stockholders.

Our Amended and Restated Charter provides that, subject to the rights of the holders of any series of preferred stock, special meetings of our stockholders may be called at any time only by or at the direction of the chair of the board of directors, the lead independent director (if one has been appointed) or our board of directors pursuant to a resolution adopted by a majority of the board of directors.

***Advance Notice Procedures***

Our Amended and Restated Bylaws establish an advance notice procedure for stockholder proposals to be brought before an annual meeting of our stockholders, including proposed nominations of persons for election to the board of directors. Stockholders at an annual meeting are only able to consider proposals or nominations specified in the notice of meeting or brought before the meeting by or at the direction of the board of directors or by a stockholder who was a stockholder of record on the record date for the meeting, who is entitled to vote at the meeting and who has given our Secretary timely written

------

notice, in proper form, of the stockholder's intention to bring that business before the meeting. Our Amended and Restated Bylaws may have the effect of precluding the conduct of certain business proposals or nominations at a meeting if the proper procedures are not followed or may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect its own slate of directors or otherwise attempting to obtain control of the Company.

***Authorized but Unissued Shares***

Our authorized but unissued shares of our common stock and preferred stock are available for future issuance without stockholder approval. These additional shares may be utilized for a variety of corporate purposes, including future public offerings to raise additional capital, corporate acquisitions and employee benefit plans. In addition, our board of directors may by resolution establish one or more series of preferred stock and fix the rights, powers (including voting powers) and preferences, and the qualifications, limitations and restrictions thereof, of each such series, and may issue shares of any such series of preferred stock from time to time. The existence of authorized but unissued shares of our common stock and preferred stock could render more difficult or discourage an attempt to obtain control of a majority of our common stock by means of a proxy contest, tender offer, merger or otherwise.

**Limitations on Liability and Indemnification of Officers and Directors** 

Our Amended and Restated Charter eliminates the personal liability of our directors to us or our stockholders for monetary damages for breach of fiduciary duty as a director to the fullest extent permitted by the DGCL. Our Amended and Restated Charter also provides that we will provide our directors and officers with customary rights to indemnification and advancement of expenses.

**Listing**

Our shares of common stock are listed on the New York Stock Exchange under the trading symbol "QXO."

The Depositary Shares are listed on the New York Stock Exchange under the trading symbol "QXO.PRB."

**Transfer Agent and Registrar** 

The transfer agent and registrar for the Company's common stock, preferred stock and Depositary Shares is Equiniti Trust Company, LLC.

## Exhibit 10.11

**Exhibit 10.11**

**Execution Version**

**INVESTMENT AGREEMENT**

by and among

**QXO, INC., AP QUINCE HOLDINGS, L.P.**

and

**THE OTHER INVESTORS PARTY HERETO**

Dated as of January 5, 2026

------

**TABLE OF CONTENTS**

**Page**

---

| | |
|:---|:---|
| [ARTICLE I DEFINITIONS](#i005b6e34edfe462aab753a37a5d8b3b9) | [1](#i005b6e34edfe462aab753a37a5d8b3b9) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 1.01&nbsp;&nbsp;&nbsp;&nbsp;Definitions](#i4da82c9cdca042798408eef88c770be4) | [1](#i4da82c9cdca042798408eef88c770be4) |
| [ARTICLE II PURCHASE AND SALE; ADDITIONAL INVESTMENT AMOUNTS](#i7c723a7a69e448e1b71de11b9a191e8f) | [9](#i7c723a7a69e448e1b71de11b9a191e8f) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 2.01&nbsp;&nbsp;&nbsp;&nbsp;Commitments; Purchase and Sale](#idac1a8f509d249c2ae8b59d38d130c57) | [9](#idac1a8f509d249c2ae8b59d38d130c57) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 2.02&nbsp;&nbsp;&nbsp;&nbsp;Closings](#i9241f277275e4b74b6cf274bbcbeaca1) | [10](#i9241f277275e4b74b6cf274bbcbeaca1) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 2.03&nbsp;&nbsp;&nbsp;&nbsp;Defaulting Investors](#ib4d992f11abb449790d6c8b9fae03a87) | [10](#ib4d992f11abb449790d6c8b9fae03a87) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 2.04&nbsp;&nbsp;&nbsp;&nbsp;Post-Signing Investors](#i6782112a2a004ecba20928151d269456) | [11](#i6782112a2a004ecba20928151d269456) |
| [ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY](#i877e9856e5484fc5a091d4f71674c907) | [12](#i877e9856e5484fc5a091d4f71674c907) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 3.01&nbsp;&nbsp;&nbsp;&nbsp;Organization; Standing](#i23545010d1b84e0f8ec986319d7ea564) | [12](#i23545010d1b84e0f8ec986319d7ea564) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 3.02&nbsp;&nbsp;&nbsp;&nbsp;Capitalization](#ifa3b3fd694024d80bf76ccc66d3146a3) | [12](#ifa3b3fd694024d80bf76ccc66d3146a3) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 3.03&nbsp;&nbsp;&nbsp;&nbsp;Authority; Non-contravention](#ia9fb9a5e4fd34220b55ee62dae85afb5) | [13](#ia9fb9a5e4fd34220b55ee62dae85afb5) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 3.04&nbsp;&nbsp;&nbsp;&nbsp;Governmental Approvals](#ic90bf65f98f24f8ba71ef27ddd8ffdc2) | [14](#ic90bf65f98f24f8ba71ef27ddd8ffdc2) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 3.05&nbsp;&nbsp;&nbsp;&nbsp;Company SEC Documents; Undisclosed Liabilities](#id3a47b59da4344acb216b2d3d8c960d9) | [14](#id3a47b59da4344acb216b2d3d8c960d9) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 3.06&nbsp;&nbsp;&nbsp;&nbsp;Absence of Certain Changes; Solvency](#i7017a8cb3d5348cf8f9998a87263c1df) | [15](#i7017a8cb3d5348cf8f9998a87263c1df) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 3.07&nbsp;&nbsp;&nbsp;&nbsp;Legal Proceedings](#iee0824767e1b4507a28adbd16d3afe3a) | [15](#iee0824767e1b4507a28adbd16d3afe3a) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 3.08&nbsp;&nbsp;&nbsp;&nbsp;Compliance with Laws; Permits](#i1a8b81ae81c14b49925859066096eebc) | [16](#i1a8b81ae81c14b49925859066096eebc) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 3.09&nbsp;&nbsp;&nbsp;&nbsp;Contracts](#id5465c2eb44d4918b79bf5faa7f5e281) | [16](#id5465c2eb44d4918b79bf5faa7f5e281) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 3.10&nbsp;&nbsp;&nbsp;&nbsp;Tax Matters](#i0001ec16ffda40839ab8f6e0c766404d) | [16](#i0001ec16ffda40839ab8f6e0c766404d) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 3.11&nbsp;&nbsp;&nbsp;&nbsp;Real Property Holding Corporation](#ic91b9c9080ac4840827ff6d8a51e9a55) | [17](#ic91b9c9080ac4840827ff6d8a51e9a55) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 3.12&nbsp;&nbsp;&nbsp;&nbsp;No Rights Agreement; Anti-Takeover Provisions](#ib444840a70c04146b7d474e550028e78) | [17](#ib444840a70c04146b7d474e550028e78) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 3.13&nbsp;&nbsp;&nbsp;&nbsp;Brokers and Other Advisors](#i3eeb49627c2c43d3bd0a97c81fc36a60) | [17](#i3eeb49627c2c43d3bd0a97c81fc36a60) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 3.14&nbsp;&nbsp;&nbsp;&nbsp;Employee Benefit Plans](#if1b63ca4dc4a4b5cb53c07ea6fdc3c70) | [17](#if1b63ca4dc4a4b5cb53c07ea6fdc3c70) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 3.15&nbsp;&nbsp;&nbsp;&nbsp;Labor Matters](#i0649cb015910494c9aaac31e4f997753) | [18](#i0649cb015910494c9aaac31e4f997753) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 3.16&nbsp;&nbsp;&nbsp;&nbsp;Sale of Securities](#i7882e3586b474b0ca270e308dc5687f2) | [18](#i7882e3586b474b0ca270e308dc5687f2) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 3.17&nbsp;&nbsp;&nbsp;&nbsp;Listing and Maintenance Requirements](#iae0d36764b1a4846aeab9dba83677a31) | [18](#iae0d36764b1a4846aeab9dba83677a31) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 3.18&nbsp;&nbsp;&nbsp;&nbsp;Anti-Money Laundering; PATRIOT Act](#id6df6025ed3e479586b051cd8daa7da6) | [18](#id6df6025ed3e479586b051cd8daa7da6) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 3.19&nbsp;&nbsp;&nbsp;&nbsp;Sanctions; Anti-Corruption Laws](#ibec7322309df4f57a5cef102eb0bcec5) | [18](#ibec7322309df4f57a5cef102eb0bcec5) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 3.20&nbsp;&nbsp;&nbsp;&nbsp;Real Property](#ib26af61eee934f288c7692631b38e50c) | [20](#ib26af61eee934f288c7692631b38e50c) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 3.21&nbsp;&nbsp;&nbsp;&nbsp;Intellectual Property](#ib3e3b8a1712546159b71e00f43c6abdf) | [20](#ib3e3b8a1712546159b71e00f43c6abdf) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 3.22&nbsp;&nbsp;&nbsp;&nbsp;Information Technology; Data Security](#i6bc56b0645814079840746c29b8d1a38) | [21](#i6bc56b0645814079840746c29b8d1a38) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 3.23&nbsp;&nbsp;&nbsp;&nbsp;Affiliate Transactions](#ib4f841e787ca4e52b1048ba47bf81baf) | [21](#ib4f841e787ca4e52b1048ba47bf81baf) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 3.24&nbsp;&nbsp;&nbsp;&nbsp;Environmental Matters](#id550524ee4e0487998026eadb9d10a04) | [21](#id550524ee4e0487998026eadb9d10a04) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 3.25&nbsp;&nbsp;&nbsp;&nbsp;Investment Company Status](#i3555f88ff01b4db185c4be598f817392) | [22](#i3555f88ff01b4db185c4be598f817392) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 3.26&nbsp;&nbsp;&nbsp;&nbsp;No Price Manipulation](#icd5b9bd159414f649b4554544f2a00ff) | [22](#icd5b9bd159414f649b4554544f2a00ff) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 3.27&nbsp;&nbsp;&nbsp;&nbsp;Status of Securities; Indebtedness](#i25570819040049e484a53e96f03b6629) | [22](#i25570819040049e484a53e96f03b6629) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 3.28&nbsp;&nbsp;&nbsp;&nbsp;No Other Representations or Warranties](#icd942241621245258e4947237588bd8c) | [22](#icd942241621245258e4947237588bd8c) |
| [ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE INVESTORS](#i269c748731d8428f9d9f2dfef961cf67) | [23](#i269c748731d8428f9d9f2dfef961cf67) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 4.01&nbsp;&nbsp;&nbsp;&nbsp;Organization; Standing](#i403d46ed56e84f3cac645670296d6eb9) | [23](#i403d46ed56e84f3cac645670296d6eb9) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 4.02&nbsp;&nbsp;&nbsp;&nbsp;Authority; Non-contravention](#i8d54a4a4f90e4c998695e5503bfa7a57) | [23](#i8d54a4a4f90e4c998695e5503bfa7a57) |

---

i

------

---

| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 4.03&nbsp;&nbsp;&nbsp;&nbsp;Governmental Approvals](#id7368a6567a24f5baa321814c34657ad) | [23](#id7368a6567a24f5baa321814c34657ad) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 4.04&nbsp;&nbsp;&nbsp;&nbsp;Brokers and Other Advisors](#i15fe8ec0d13044be8bf1338a2ae2b93b) | [24](#i15fe8ec0d13044be8bf1338a2ae2b93b) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 4.05&nbsp;&nbsp;&nbsp;&nbsp;Purchase for Investment](#i1db6b8e44cfb4ccbb24b25223bd2c86c) | [24](#i1db6b8e44cfb4ccbb24b25223bd2c86c) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 4.06&nbsp;&nbsp;&nbsp;&nbsp;Non-Reliance on Company Estimates, Projections, Forecasts, Forward-Looking Statements and Business Plans](#i51d1d580bc9648fcb67f9beedebd3eb3) | [24](#i51d1d580bc9648fcb67f9beedebd3eb3) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 4.07&nbsp;&nbsp;&nbsp;&nbsp;Placement Agents](#i8efdcabe4c414652a1fb1632727dbc14) | [25](#i8efdcabe4c414652a1fb1632727dbc14) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 4.08&nbsp;&nbsp;&nbsp;&nbsp;Sufficient Funds](#i290a6f4e73684df8875640b7235761fd) | [25](#i290a6f4e73684df8875640b7235761fd) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 4.09&nbsp;&nbsp;&nbsp;&nbsp;No Other Representations or Warranties](#if0141cfb6cee455aa97817ecb1bde5e5) | [25](#if0141cfb6cee455aa97817ecb1bde5e5) |
| [ARTICLE V ADDITIONAL AGREEMENTS](#ia8a0a26c0d0d446ebca09abfa4d74023) | [25](#ia8a0a26c0d0d446ebca09abfa4d74023) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 5.01&nbsp;&nbsp;&nbsp;&nbsp;Reasonable Best Efforts; Filings](#if1a399b3272f42bb9adb50f93c023f63) | [25](#if1a399b3272f42bb9adb50f93c023f63) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 5.02&nbsp;&nbsp;&nbsp;&nbsp;Corporate Actions](#ia2457815e0404197839ae06fd37fb956) | [26](#ia2457815e0404197839ae06fd37fb956) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 5.03&nbsp;&nbsp;&nbsp;&nbsp;Public Disclosure](#i6423b17e810d4ea1bf95b5bc4b5dbb02) | [27](#i6423b17e810d4ea1bf95b5bc4b5dbb02) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 5.04&nbsp;&nbsp;&nbsp;&nbsp;Confidentiality](#ia8764cd585ca4a0e828deb286f9540be) | [27](#ia8764cd585ca4a0e828deb286f9540be) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 5.05&nbsp;&nbsp;&nbsp;&nbsp;NYSE Listing of Shares](#ia18135f77c834191ac196e924cab3ed8) | [27](#ia18135f77c834191ac196e924cab3ed8) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 5.06&nbsp;&nbsp;&nbsp;&nbsp;Standstill](#i58a98c9ce3c14265b09995d7b8482797) | [27](#i58a98c9ce3c14265b09995d7b8482797) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 5.07&nbsp;&nbsp;&nbsp;&nbsp;Transfer Restrictions](#i1b992457a3d94bfca8c3a5d6839538f0) | [29](#i1b992457a3d94bfca8c3a5d6839538f0) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 5.08&nbsp;&nbsp;&nbsp;&nbsp;Legends](#iae2fea3fe7854157897a5e93f81f4630) | [31](#iae2fea3fe7854157897a5e93f81f4630) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 5.09&nbsp;&nbsp;&nbsp;&nbsp;Tax Matters](#ie8709be867e240749558275f6a2a4441) | [31](#ie8709be867e240749558275f6a2a4441) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 5.10&nbsp;&nbsp;&nbsp;&nbsp;Use of Proceeds; Requirement to Use the Commitment](#idc9a40469b144ca8b8d79f0dd19b4b31) | [33](#idc9a40469b144ca8b8d79f0dd19b4b31) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 5.11&nbsp;&nbsp;&nbsp;&nbsp;Financing Cooperation](#i813ced097845418c8132c51efa8d4417) | [33](#i813ced097845418c8132c51efa8d4417) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 5.12&nbsp;&nbsp;&nbsp;&nbsp;State Securities Laws](#i7ab3c0b282c64738acf60d600588a8f2) | [34](#i7ab3c0b282c64738acf60d600588a8f2) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 5.13&nbsp;&nbsp;&nbsp;&nbsp;Information Rights](#ic873579e87444d7da77f5560e3c9732a) | [34](#ic873579e87444d7da77f5560e3c9732a) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 5.14&nbsp;&nbsp;&nbsp;&nbsp;Voting Requirements](#i8061aaff178b4740b896b28f22f8a49c) | [34](#i8061aaff178b4740b896b28f22f8a49c) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 5.15&nbsp;&nbsp;&nbsp;&nbsp;Investors.](#id67bcc2b2b764b8ba7c94f4b7a7d1e12) | [35](#id67bcc2b2b764b8ba7c94f4b7a7d1e12) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 5.16&nbsp;&nbsp;&nbsp;&nbsp;Stockholder Approval](#i73a750c992104b02bc0d8b55e2742a8f) | [36](#i73a750c992104b02bc0d8b55e2742a8f) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 5.17&nbsp;&nbsp;&nbsp;&nbsp;Minority Protective Provisions](#i70e3cc87fcfd47b78c08f78ee33d11ed) | [36](#i70e3cc87fcfd47b78c08f78ee33d11ed) |
| [ARTICLE VI SURVIVAL AND TERMINATION](#i478a42a267ec453a9a7c2b9969022b3e) | [37](#i478a42a267ec453a9a7c2b9969022b3e) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 6.01&nbsp;&nbsp;&nbsp;&nbsp;Survival](#ifa3aa7124f4c4c3da25806795b85d940) | [37](#ifa3aa7124f4c4c3da25806795b85d940) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 6.02&nbsp;&nbsp;&nbsp;&nbsp;Termination](#i6aba148dbe1d4c9fb69c9a9caf741cd8) | [37](#i6aba148dbe1d4c9fb69c9a9caf741cd8) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 6.03&nbsp;&nbsp;&nbsp;&nbsp;Effect of Termination](#i5e3607f03d144db4b7cb2215ce5c14b8) | [38](#i5e3607f03d144db4b7cb2215ce5c14b8) |
| [ARTICLE VII CONDITIONS PRECEDENT](#i1a962c99d17842bd82a712edeaaeada8) | [38](#i1a962c99d17842bd82a712edeaaeada8) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 7.01&nbsp;&nbsp;&nbsp;&nbsp;Conditions to the Effectiveness of each Investor's Commitments](#ic30fc5ab13834c71af92fad94136fb9d) | [38](#ic30fc5ab13834c71af92fad94136fb9d) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 7.02&nbsp;&nbsp;&nbsp;&nbsp;Conditions to the Obligations of the Company and each Investor](#i080707efb8bb4ba9b756ebdc05c1b2ef) | [38](#i080707efb8bb4ba9b756ebdc05c1b2ef) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 7.03&nbsp;&nbsp;&nbsp;&nbsp;Conditions to the Obligations of the Company](#ia8d25054b05c4a5ab9a5549d505eec0d) | [39](#ia8d25054b05c4a5ab9a5549d505eec0d) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 7.04&nbsp;&nbsp;&nbsp;&nbsp;Conditions to the Obligations of each Investor](#i6df15ceeef4041e1b7d528b66b606ed9) | [39](#i6df15ceeef4041e1b7d528b66b606ed9) |
| [ARTICLE VIII REGISTRATION RIGHTS](#i1ecf0f644a3b4603b84f6c7ce21fdc6c) | [40](#i1ecf0f644a3b4603b84f6c7ce21fdc6c) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 8.01&nbsp;&nbsp;&nbsp;&nbsp;Registration Rights](#ic14c9989296245e89bf77cf2fd2c7560) | [40](#ic14c9989296245e89bf77cf2fd2c7560) |
| [ARTICLE IX MISCELLANEOUS](#i100ce71ba8fb440abd01d6a9b08310a7) | [46](#i100ce71ba8fb440abd01d6a9b08310a7) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 9.01&nbsp;&nbsp;&nbsp;&nbsp;Amendments; Waivers](#iea4ab24547e2487fafcaf231054125ee) | [46](#iea4ab24547e2487fafcaf231054125ee) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 9.02&nbsp;&nbsp;&nbsp;&nbsp;Extension of Time, Waiver, Etc](#i3c51df65a7944980865de62e0f1de8b1) | [46](#i3c51df65a7944980865de62e0f1de8b1) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 9.03&nbsp;&nbsp;&nbsp;&nbsp;Assignment](#if94c814f2c114f2a82923136317de033) | [46](#if94c814f2c114f2a82923136317de033) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 9.04&nbsp;&nbsp;&nbsp;&nbsp;Counterparts](#ic0040d2778d54ad0a1030f3355d84770) | [47](#ic0040d2778d54ad0a1030f3355d84770) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 9.05&nbsp;&nbsp;&nbsp;&nbsp;Entire Agreement; No Third-Party Beneficiaries](#i8d032e7ce51340b28ce9329eb3fbe8cc) | [47](#i8d032e7ce51340b28ce9329eb3fbe8cc) |

---

ii

------

---

| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 9.06&nbsp;&nbsp;&nbsp;&nbsp;Governing Law; Jurisdiction](#iebd831f4326d4bfe8a35f2f5d3884678) | [47](#iebd831f4326d4bfe8a35f2f5d3884678) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 9.07&nbsp;&nbsp;&nbsp;&nbsp;Specific Enforcement](#id54e0fc9557847d5920d93f6d63dc3b3) | [47](#id54e0fc9557847d5920d93f6d63dc3b3) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 9.08&nbsp;&nbsp;&nbsp;&nbsp;Waiver of Jury Trial](#i6358d2f936104af39b1f6bcb5ccb9929) | [48](#i6358d2f936104af39b1f6bcb5ccb9929) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 9.09&nbsp;&nbsp;&nbsp;&nbsp;Notices](#id3c1dfc1ae8947db9c3f52184d381970) | [48](#id3c1dfc1ae8947db9c3f52184d381970) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 9.10&nbsp;&nbsp;&nbsp;&nbsp;Severability](#i90a70a1f1b604a388abd6cfadea66499) | [49](#i90a70a1f1b604a388abd6cfadea66499) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 9.11&nbsp;&nbsp;&nbsp;&nbsp;Expenses](#i915e0d9949224cc3ae93413350f4b268) | [49](#i915e0d9949224cc3ae93413350f4b268) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 9.12&nbsp;&nbsp;&nbsp;&nbsp;Interpretation](#i62ae87f3bd5d440a91f2c4d7f7b93954) | [49](#i62ae87f3bd5d440a91f2c4d7f7b93954) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 9.13&nbsp;&nbsp;&nbsp;&nbsp;Non-Recourse](#i7d8280c169e24237a57f14115a0e122a) | [50](#i7d8280c169e24237a57f14115a0e122a) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 9.14&nbsp;&nbsp;&nbsp;&nbsp;Not a Group; Independent Nature of Investors' Obligations and Rights](#ie62dff10b2d947c49a76b9680c87777c) | [51](#ie62dff10b2d947c49a76b9680c87777c) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Section 9.15&nbsp;&nbsp;&nbsp;&nbsp;Placement Agents](#ibf08f29da1524db8b31612dfd15e3093) | [52](#ibf08f29da1524db8b31612dfd15e3093) |

---

EXHIBITS

Exhibit A-1&nbsp;&nbsp;&nbsp;&nbsp;Form of Joinder Agreement for Post-Signing Investors

Exhibit A-2&nbsp;&nbsp;&nbsp;&nbsp;Form of Joinder Agreement for Post-Closing Investors

Exhibit B&nbsp;&nbsp;&nbsp;&nbsp;Form of Certificate of Designations

Exhibit C&nbsp;&nbsp;&nbsp;&nbsp;List of Restricted Persons

iii

------

INVESTMENT AGREEMENT, dated as of January 5, 2026 (this "<u>Agreement</u>"), by and among QXO, Inc., a Delaware corporation (the "<u>Company</u>"), AP Quince Holdings, L.P., a Delaware limited partnership (the "<u>Apollo Investor</u>"), the other investors party hereto (the "<u>Other Signing Investors</u>"), the other investors that become a party hereto pursuant to <u>Section 2.04</u> by the execution of a joinder agreement substantially in the form of <u>Exhibit A-1</u> hereto (the "<u>Post-Signing Investors</u>"), and the other investors that become a party hereto pursuant to <u>Section 5.07</u> by the execution of a joinder agreement in the form of <u>Exhibit A-2</u> hereto (the "<u>Post-Closing Investors</u>").

WHEREAS, subject to the terms and conditions set forth herein, in connection with one or more Qualifying Acquisitions (as defined herein), the Company desires to issue, sell and deliver to each Investor, and each Investor, severally and not jointly, desires to purchase and acquire from the Company, up to the number of shares of the Company's Series C Convertible Perpetual Preferred Stock, par value $0.001 per share (the "<u>Series C Preferred Stock</u>"), set forth opposite its name on <u>Schedule A</u> (as it may be adjusted from time to time pursuant to <u>Section 2.04(c)</u>, the "<u>Investment Amount</u>"), having the designation, preferences, rights, privileges, powers, and terms and conditions, as specified in the Certificate of Designations, Preferences and Rights of Series C Convertible Perpetual Preferred Stock substantially in the form attached hereto as <u>Exhibit B</u> (the "<u>Certificate of Designations</u>"); and

WHEREAS, following the execution of this Investment Agreement, if required by the rules of the New York Stock Exchange (the "<u>NYSE</u>"), the Company shall hold a special meeting of stockholders for the purpose of obtaining Stockholder Approval (as defined herein).

NOW, THEREFORE, in consideration of the mutual covenants, representations, warranties and agreements contained in this Agreement, the receipt and sufficiency of which are hereby acknowledged, the parties to this Agreement hereby agree as follows:

**ARTICLE I DEFINITIONS**

Section 1.01&nbsp;&nbsp;&nbsp;&nbsp;<u>Definitions</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;As used in this Agreement (including the recitals hereto), the following terms shall have the following meanings:

"<u>50% Beneficial Holding Requirement</u>" means that the Apollo Investor and its Affiliates collectively continue, on any date of determination, to beneficially own (and/or is committed to purchase pursuant to this Agreement) shares of Series C Preferred Stock and/or shares of Common Stock issued upon conversion of shares of Series C Preferred Stock that represent, in the aggregate and on an as-converted basis, at least $400 million in initial Stated Value of Series C Preferred Stock.

"<u>Affiliate</u>" means, as to any Person, any other Person that, directly or indirectly, controls, or is controlled by, or is under common control with, such Person; <u>provided</u>, <u>however</u>, (i) that the Company and its Subsidiaries shall not be considered Affiliates of any Investor or any of its Affiliates, and (ii) other than in the case of the definitions of "Investor Related Party," <u>Section 4.08</u>, <u>Section 5.01(d)</u>, <u>Article VI</u>, <u>Section 9.03</u> or <u>Section 9.13</u>, in no event shall any Investor or any of its controlled Affiliates be considered an Affiliate of any portfolio company affiliated with or managed by affiliates of such Investor, nor shall any portfolio company affiliated with or managed by affiliates of any Investor be considered an Affiliate of such Investor or any of its controlled Affiliates. For this purpose, "<u>control</u>" (including, with its correlative meanings, "<u>controlled by</u>" and "<u>under common control with</u>") shall mean the possession, directly or indirectly, of the power to direct or cause the direction of management or policies of a Person, whether through the ownership of securities or partnership or other ownership interests, by contract or otherwise. For purposes of the Apollo Investor, "Affiliates" shall include one or more investment funds,

------

separate accounts and other entities owned (in whole or in part), controlled, managed and/or advised by Apollo Capital Management, L.P. or its Affiliates.

"<u>AGS Fee Letter</u>" means that certain Fee Letter, dated on or about the date hereof, between the Company and Apollo Global Securities, LLC.

"<u>Apollo</u>" means the Apollo Investor, Apollo Global Management, Inc., Apollo Global Securities, LLC, Apollo Capital Management, L.P., and their Affiliates.

"<u>as-converted basis</u>" means (i) with respect to the outstanding shares of Common Stock as of any date, all outstanding shares of Common Stock calculated on a basis in which all shares of Common Stock issuable upon conversion of the outstanding shares of Series C Preferred Stock (at the Conversion Price in effect on such date as set forth in the Certificate of Designations) are assumed to be outstanding as of such date and (ii) with respect to any outstanding shares of Series C Preferred Stock as of any date, the number of shares of Common Stock issuable upon conversion of such shares of Series C Preferred Stock on such date (at the Conversion Price in effect on such date as set forth in the Certificate of Designations).

"<u>beneficially own</u>", "<u>beneficial ownership of</u>" or "<u>beneficially owning</u>" any securities shall have the meaning set forth in Rule 13d-3 of the rules and regulations under the Exchange Act; <u>provided</u>, that any Person shall be deemed to beneficially own any securities that such Person has the right to acquire, whether or not such right is exercisable immediately (including assuming conversion of all Series C Preferred Stock, if any, owned by such Person to Common Stock).

"<u>Board</u>" means the Board of Directors of the Company.

"<u>Business Day</u>" means any day except a Saturday, a Sunday or other day on which the SEC or banks in the City of New York are authorized or required by Law to be closed.

"<u>Closing</u>" or "<u>Closing Date</u>" means the closing date of the sale of Acquired Shares to fund substantially concurrently therewith a Qualifying Acquisition.

"<u>Code</u>" means the United States Internal Revenue Code of 1986, as amended.

"<u>Collective Bargaining Agreement</u>" means any collective bargaining or other agreement with a labor union, works council, labor organization or other employee representative.

"<u>Commitment Fee</u>" means, in respect of each Investor as of any date of determination, a ticking fee accruing daily on such Investor's Unused Investment Amount at such time from January 15, 2027 through the earlier of (i) the Closing Date of a Qualifying Acquisition (with respect to the Unused Investment Amount constituting the Funding Amount for such Qualifying Acquisition) and (ii) the Commitment Outside Date at a rate equal to 1.00% per annum, computed on the basis of actual days elapsed in a year of 360 days.

"<u>Commitment Outside Date</u>" means July 15, 2026; <u>provided</u> that if a definitive purchase agreement for one or more Qualifying Acquisitions is signed prior to July 15, 2026, the Commitment Outside Date shall be extended to the earlier of (i) the Closing Date of such Qualifying Acquisition (or the Closing of the latest such Qualifying Acquisition if definitive agreements for more than one Qualifying Acquisition have been signed prior to July 15, 2026) and (ii) July 15, 2027.

"<u>Common Stock</u>" means the common stock, par value $0.00001 per share, of the Company.

------

"<u>Company Charter Documents</u>" means the Company's Fifth Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws, each as amended to the date of this Agreement.

"<u>Company Related Party</u>" means the Company and its former, current or future Affiliates and any of the foregoing's respective former, current or future, direct or indirect, officers, other fiduciary, directors, employees, affiliates, stockholders, equityholders, managers, members, partners, agents, attorneys, advisors, lenders or other representatives or any of the foregoing's respective successors or assigns.

"<u>Company Stock Plan</u>" means the QXO, Inc. 2024 Omnibus Incentive Plan, as may be amended from time to time.

"<u>Conversion Cap</u>" has the meaning set forth in the Certificate of Designations.

"<u>Conversion Price</u>" has the meaning set forth in the Certificate of Designations.

"<u>DTC</u>" means The Depository Trust Company.

"<u>ERISA</u>" means the Employee Retirement Income Security Act of 1974, as amended.

"<u>Exchange Act</u>" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

"<u>Fundamental Change</u>" has the meaning set forth in the Certificate of Designations.

"<u>Fundamental Representations</u>" means the representations and warranties of the Company set forth in <u>Sections 3.01</u>, <u>3.02</u>, <u>3.03(a)</u>, <u>3.12</u>, <u>3.13</u>, and <u>3.19</u>.

"<u>GAAP</u>" means generally accepted accounting principles in the United States, consistently applied.

"<u>Governmental Authority</u>" means any government, court, regulatory or administrative agency, commission, arbitrator or arbitral body (public or private) or authority or other legislative, executive or judicial governmental entity (in each case including any self-regulatory organization), whether federal, state or local, domestic, foreign or multinational.

"<u>HSR Act</u>" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder.

"<u>Investor</u>" or "<u>Investors</u>" means, individually or collectively, as applicable, the Apollo Investor, the Other Signing Investors, the Post-Signing Investors, the Post-Closing Investors and their respective Affiliates and other transferees to whom shares of Series C Preferred Stock or Common Stock are transferred in accordance with the terms of this Agreement. For the avoidance of doubt, the Investors shall not, collectively, be deemed a "person" or "group" within the meaning of Section 13(d) of the Securities Exchange Act of 1934, as amended.

"<u>Investor Related Party</u>" means any Investor and any financing sources of such Investor and any of the foregoing's respective former, current or future Affiliates and any of the foregoing's respective former, current or future, direct or indirect, officers, other fiduciary, directors, employees, affiliates,

------

stockholders, equityholders, managers, members, partners, agents, attorneys, advisors, lenders or other representatives or any of the foregoing's respective successors or assigns.

"<u>Investor Transferee</u>" means (i) an Affiliate, (ii) any successor entity, (iii) any customary co-investment vehicle so long as the transferor or its Affiliates continue to retain sole control of the voting and disposition of the Series C Preferred Stock or the Common Stock so transferred or (iv) any investment fund, vehicle, holding company or similar entity for separately managed accounts with respect to which the Investor or any Affiliate thereof serves as a general partner, managing member, manager or fund advisor, or any successor entity of the Persons described in this clause (iv), in each case, to whom the Investor transfers any Acquired Shares in accordance with the terms of <u>Section 5.07</u> or any commitments to purchase Acquired Shares hereunder in accordance with <u>Section 2.01(c)</u>.

"<u>IRS</u>" means the United States Internal Revenue Service.

"<u>Laws</u>" means all state or federal laws, common law, acts, statutes, ordinances, codes, rules or regulations, orders, executive orders, judgments, injunctions, governmental guidelines or interpretations having the force of law, Permits, decrees, Judgments or other similar requirements enacted, adopted, promulgated, or applied by any Governmental Authority.

"<u>Lien</u>" means, with respect to any asset, any mortgage, lien (statutory or otherwise), pledge, hypothecation, charge, security interest, preference, priority or encumbrance of any kind in respect of such asset, whether or not filed, recorded, registered, published or otherwise perfected under applicable law, including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction; <u>provided</u> that in no event shall an operating lease be deemed to constitute a Lien.

"<u>Material Adverse Effect</u>" means any effect, change, event or occurrence that has or would reasonably be expected to have, individually or in the aggregate, a material adverse effect on (x) the business, prospects, results of operations, assets, liabilities or condition (financial or otherwise) of the Company and its Subsidiaries, taken as a whole or (y) the ability of the Company to (i) consummate the Transactions on a timely basis or (ii) comply with its obligations under this Agreement; <u>provided</u>, <u>however</u>, that, for purposes of clause (x) above, none of the following, and no effect, change, event or occurrence arising out of, or resulting from, the following, shall constitute or be taken into account in determining whether a Material Adverse Effect has occurred or would reasonably be expected to occur: any effect, change, event or occurrence (A) generally affecting (1) the industry in which the Company and its Subsidiaries operate or (2) the economy, credit or financial or capital markets, in the United States or elsewhere in the world, including changes in interest or exchange rates, or (B) to the extent arising out of, resulting from or attributable to (1) changes or prospective changes in Laws or in GAAP or in accounting standards, or any changes or prospective changes in the interpretation or enforcement of any of the foregoing, or any changes or prospective changes in general legal, regulatory or political conditions, in each case occurring after the date hereof, (2) the public announcement of this Agreement, the Transaction Documents, the consummation of the Transactions or a Qualifying Acquisition, (3) acts of war (whether or not declared), sabotage or terrorism, or any escalation or worsening of any such acts of war (whether or not declared), sabotage or terrorism, (4) volcanoes, tsunamis, pandemics, earthquakes, hurricanes, tornados or other natural disasters, (5) any action taken by the Company or its Subsidiaries (x) that is expressly required by this Agreement or the Transaction Documents, (y) with the Apollo Investor's express written consent, or (z) at the Apollo Investor's express prior written request, (6) any decline in the market price, or change in trading volume, of the capital stock of the Company (it being understood that

------

this clause (6) shall not prevent a determination that the underlying cause of any such change or decline is a Material Adverse Effect), (7) any failure to meet any internal or public projections, forecasts, guidance, estimates, milestones, budgets or internal or published financial or operating predictions of revenue, earnings, cash flow or cash position (it being understood that this clause (7) shall not prevent or otherwise affect a determination that the underlying cause of any such failure is a Material Adverse Effect or that such matters may be taken into account in determining whether a Material Adverse Effect has occurred), (8) any change or prospective change in the Company's or its debt's credit ratings (it being understood that this clause (8) shall not prevent or otherwise affect a determination that the underlying cause of any such change or prospective change is a Material Adverse Effect or that such matters may be taken into account in determining whether a Material Adverse Effect has occurred), or (9) any change resulting or arising from the identity of any Investor or any of its Affiliates; <u>provided</u>, <u>further</u>, <u>however</u>, that any effect, change, event or occurrence referred to in clause (A) or clauses (B)(1), (B)(3) or (B)(4) may be taken into account in determining whether there has been, or would reasonably be expected to be, individually or in the aggregate, a Material Adverse Effect to the extent such effect, change, event or occurrence has a disproportionate adverse effect on the business, results of operations, assets or financial condition of the Company and its Subsidiaries, taken as a whole, as compared to other participants in the industry in which the Company and its Subsidiaries operate (in which case the incremental disproportionate impact or impacts may be taken into account in determining whether there has been, or would reasonably be expected to be, a Material Adverse Effect).

"<u>Non-Disclosure Agreement</u>" means the letter agreements between the Company and each Investor (or one of its Affiliates) entered into in connection with the Transactions, each as may be amended from time to time in accordance with its terms.

"<u>Person</u>" means an individual, corporation, limited liability company, partnership, joint venture, association, trust, unincorporated organization or any other entity, including a Governmental Authority.

"<u>Property</u>" means, as to any Person, all types of real, personal, tangible, intangible or mixed property owned by such Person whether or not included in the most recent balance sheet of such Person and its Subsidiaries under GAAP.

"<u>Qualifying Acquisition</u>" means any acquisition, directly or indirectly of assets, equity interests or a business (or portion thereof), whether accomplished by asset purchase, stock purchase, merger, consolidation, amalgamation, reorganization, recapitalization or other similar transaction or series of related transactions (i) for an aggregate purchase price in excess of $1.5 billion or (ii) that has been approved by the Board as a "Qualifying Acquisition."

"<u>Regulatory Laws</u>" means, collectively, any Laws that are designed or intended to prohibit, restrict or regulate actions having the purpose or effect of monopolization or lessening of competition through merger or acquisition or restraint of trade or that affect foreign investment, outbound investment, foreign exchange, national security or national interest of any jurisdiction.

"<u>Representatives</u>" means, with respect to any Person, its officers, directors, principals, partners, managers, members, employees, consultants, agents, financial advisors, investment bankers, attorneys, accountants, other advisors and other representatives.

"<u>Restricted Persons</u>" means any transferee listed on <u>Exhibit C</u> hereto and its controlled Affiliates, which list may be updated in writing from time to time by the Company with respect to additional bona fide competitors of the Company (each, a "<u>Competitor</u>"); <u>provided</u> that, no transferee that has been named

------

on a "white list" that has been agreed between Apollo and the Company prior to the date hereof, nor any of its Affiliates, shall be deemed a Competitor.

"<u>SEC</u>" means the Securities and Exchange Commission.

"<u>Securities Act</u>" means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

"<u>Significant Subsidiary</u>" means each of the Company's Subsidiaries that is a "significant subsidiary" (as defined in Rule 405 under the Securities Act).

"<u>Solvent</u>" means, when used with respect to any Person, that, as of any date of determination, (a) the amount of the "fair saleable value" of the assets of such Person shall, as of such date, exceed (i) the value of all "liabilities of such Person, including contingent and other liabilities", as of such date, as such quoted terms are generally determined in accordance with applicable Laws governing determinations of the insolvency of debtors; and (ii) the amount that shall be required to pay the probable liabilities of such Person on its existing debts (including contingent liabilities) as such debts become absolute and matured; (b) such Person shall not have, as of such date, an unreasonably small amount of capital for the operation of the businesses in which it is engaged or proposed to be engaged following such date; and (c) such Person shall be able to pay its liabilities, including contingent and other liabilities, as they mature. For the purpose of the immediately preceding sentence, "not have an unreasonably small amount of capital for the operation of the businesses in which it is engaged or proposed to be engaged" and "able to pay its liabilities, including contingent and other liabilities, as they mature" means that such Person shall be able to generate enough cash from operations, asset dispositions or refinancing, or a combination thereof, to meet its obligations as they become due.

"<u>Standstill Period</u>" means, with respect to each Investor, until 18 months following the initial Closing Date; <u>provided</u>, that the Standstill Period shall immediately terminate and expire (and the restrictions of <u>Section 5.06</u> shall cease to apply and shall be of no further force and effect) at the earlier of: (i) the Company entering into a definitive written agreement to consummate a Fundamental Change (regardless of the form of such transaction) and (ii) the Board approving (or, in the case of a tender or exchange offer, failing to recommend against such tender or exchange offer within ten Business Days of the commencement thereof) a transaction that, if consummated, would result in a Fundamental Change.

"<u>Stockholder Approval</u>" means such approval as may be required by the applicable rules and regulations of the NYSE from the stockholders of the Company to consent to the issuance of shares of Common Stock upon conversion of the Series C Preferred Stock (together with any dividends on the Series C Preferred Stock to be delivered in shares of Common Stock) in excess of 19.99% of the issued and outstanding shares of Common Stock as of immediately prior to the date hereof.

"<u>Subsidiary</u>", when used with respect to any Person, means any corporation, limited liability company, partnership, association, trust or other entity of which (x) securities or other ownership interests representing more than 50% of the ordinary voting power (or, in the case of a partnership, more than 50% of the general partnership interests) or (y) sufficient voting rights to elect at least a majority of the board of directors or other governing body are, as of such date, owned by such Person or one or more Subsidiaries of such Person or by such Person and one or more Subsidiaries of such Person.

"<u>Tax</u>" or "<u>Taxes</u>" means any and all United States federal, state, local or non-United States taxes, fees, levies, duties, tariffs, imposts, and other similar charges (together with any and all interest, penalties and additions to tax) imposed by any Governmental Authority, including taxes or other charges on or with

------

respect to income, franchises, windfall or other profits, gross receipts, property, sales, use, capital stock, payroll, employment, social security, workers' compensation, unemployment compensation or net worth; taxes or other charges in the nature of excise, withholding, ad valorem, stamp, transfer, value added or gains taxes; license, registration and documentation fees; and customs duties, tariffs and similar charges, together with any interest, penalties, and additions to tax imposed by any Governmental Authority.

"<u>Transaction Documents</u>" means this Agreement, the Certificate of Designations and all other documents, certificates or agreements executed in connection with the transactions contemplated by this Agreement and the Certificate of Designations; <u>provided</u>, that, for the avoidance of doubt, "Transaction Documents" shall not include any acquisition agreement or related documentation evidencing a Qualifying Acquisition.

"<u>Transactions</u>" means the transactions expressly contemplated by this Agreement and the other Transaction Documents; <u>provided</u>, that, for the avoidance of doubt, "Transactions" shall not include any Qualifying Acquisition other than with respect to the use of proceeds of the applicable Series C Preferred Stock so purchased and, solely with respect to the Fundamental Representations provided on any Closing Date, the pro forma effect thereof on the applicable Closing Date.

"<u>Transfer</u>" by any Person means, directly or indirectly, to sell, transfer, assign, pledge, encumber, hypothecate or otherwise dispose of or transfer, either voluntarily or involuntarily (by the operation of law or otherwise), or to enter into any contract, option or other arrangement, agreement or understanding with respect to the sale, transfer, assignment, pledge, encumbrance, hypothecation or other disposition or transfer (by the operation of law or otherwise), of any interest in any equity securities beneficially owned by such Person; provided, however, that, notwithstanding anything to the contrary in this Agreement a Transfer shall not include (i) the conversion of one or more shares of Series C Preferred Stock into shares of Common Stock pursuant to the Certificate of Designations, (ii) the redemption or other acquisition of Common Stock or Series C Preferred Stock by the Company, (iii) the transfer of any limited partnership interests or other equity interests in an Investor (or any direct or indirect parent entity of an Investor) (provided that if any Investor referred to in this clause (iii) ceases to be controlled (directly or indirectly) by the Person (directly or indirectly) ultimately controlling such Person immediately prior to such transfer, such event shall be deemed to constitute a "Transfer") or (iv) bona fide Hedging Arrangements.

"<u>Transfer Agent</u>" means Equiniti Trust Company, LLC, acting in its capacity as the custodian for the Series C Preferred Stock, or any successor transfer agent.

"<u>Unused Investment Amount</u>" means, in respect of each Investor as of any date of determination, the Investment Amount of such Investor set forth on <u>Schedule A</u>, as may be increased in accordance with <u>Section 2.04(a)</u> during the Marketing Period, not to exceed $10.0 billion in the aggregate, or decreased in accordance with <u>Section 2.01(c)</u> in connection with the extension of the Commitment Outside Date, less the aggregate Funding Amount from such Investor with respect to any Acquired Shares purchased in connection with a Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;In addition to the terms defined in <u>Section 1.01(a)</u>, the following terms have the meanings assigned thereto in the Sections set forth below:

---

| | |
|:---|:---|
| **Term** | **Section** |
| Acquired Shares | 2.01(b) |
| Action | 3.07 |
| Agreement | Preamble |

---

------

---

| | |
|:---|:---|
| **Term** | **Section** |
| Anti-Money Laundering Laws | 3.18 |
| Apollo Investor | Preamble |
| Balance Sheet Date | 3.05(c) |
| Bankruptcy and Equity Exception | 3.03(a) |
| Benefit Plan | 3.14(b) |
| Breach | 3.22 |
| Capitalization Date | 3.02(a) |
| Certificate of Designations | Recitals |
| Company | Preamble |
| Company Preferred Stock | 3.02(a) |
| Company SEC Documents | 3.05(a) |
| Company Securities | 3.02(b) |
| Company Warrants | 3.02(a) |
| Confidential Information | 5.04 |
| Contract | 3.03(b) |
| Data | 3.22(a) |
| Data Security Obligations | 3.22(a) |
| Default Shares | 2.03(a) |
| Defaulting Investor | 2.03(a) |
| Environmental Laws | 3.24 |
| Excess Commitment Amounts | 2.01(c) |
| Ex-Im Laws | 3.19(d) |
| Filed SEC Documents | Article III |
| Foreclosure | 5.07(d) |
| Funding Amount | 2.01(a) |
| Funding Notice | 2.01(a) |
| Goldman | 3.13 |
| Hedging Arrangements | 5.07(b) |
| Initial Investor Rights | 8.03(b) |
| Intellectual Property Rights | 3.21 |
| Investment Amount | Recitals |
| J.P. Morgan | 3.13 |
| Judgments | 3.07 |
| Marketing Period | 2.04(a) |
| Material Contract | 3.09 |
| Morgan Stanley | 3.13 |
| Multiemployer Plan | 3.14(a) |
| Non-Defaulting Investor | 2.03(a) |
| NYSE | Recitals |
| Open Source Software | 3.21 |
| Other Signing Investors | Preamble |
| PBGC | 3.14(a) |
| Permits | 3.08(b) |
| Permitted Loan | 5.07(d) |
| Plan | 3.14(a) |
| Post-Closing Investors | Preamble |
| Post-Signing Investors | Preamble |
| Required Regulatory Approvals | 5.01(a) |
| Sanctioned Jurisdiction | 3.19(a) |

---

------

---

| | |
|:---|:---|
| **Term** | **Section** |
| Sanctions | 3.19(a) |
| Series C Preferred Stock | Recitals |
| Underwritten Shelf Take-Down Notice | 8.01(f) |
| USRPHC | 3.11 |

---

**ARTICLE II PURCHASE AND SALE; ADDITIONAL INVESTMENT AMOUNTS**

Section 2.01&nbsp;&nbsp;&nbsp;&nbsp;<u>Commitments; Purchase and Sale</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;The Company, by delivery of a written notice to each Investor (a "<u>Funding Notice</u>") no less than ten calendar days prior to the Closing Date with respect to a Qualifying Acquisition, shall have the right to request funding equal to all or any portion of the then applicable Unused Investment Amount as it deems necessary or advisable in connection with a Qualifying Acquisition; <u>provided</u> that the Closing of such Qualifying Acquisition occurs prior to the Commitment Outside Date. Each Funding Notice shall state (i) the aggregate funding amount being requested from all Investors (the "<u>Funding Amount</u>"), which shall not be less than (A) $250.0 million and (B) the remaining balance of the Unused Investment Amount for any Funding Notice and shall, together with any Funding Amount requested for a prior Qualifying Acquisition, not exceed the aggregate Investment Amount, (ii) each Investor's pro rata portion of the Funding Amount, (iii) the number of shares of Series C Preferred Stock to be acquired by each Investor, (iv) a description of the Qualifying Acquisition, and (v) the anticipated Closing Date; <u>provided</u> <u>further</u> that, in the case of a Closing Date subsequent to the initial Closing, the Series C Preferred Stock to be issued on such subsequent Closing Date shall be fungible with the previously issued Series C Preferred Stock and shall have the right to receive the same accrued and unpaid dividends per share as such previously issued Series C Preferred Stock, and the required Funding Amount shall be increased to take account of the amount of any unpaid dividends accrued prior to the issuance of the Series C Preferred Stock on such subsequent Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;On the terms of this Agreement and subject to the satisfaction (or, to the extent permitted by applicable Laws, waiver by the party entitled to the benefit thereof) of the conditions set forth herein, at each Closing for which a Funding Notice was properly delivered pursuant to <u>Section 2.01(a)</u>, each Investor, severally and not jointly, agrees to purchase and acquire from the Company the number of shares of Series C Preferred Stock set forth in such Funding Notice, and the Company shall issue, sell and deliver to such Investor, such shares of Series C Preferred Stock (for such Closing, the "<u>Acquired Shares</u>") for a purchase price per share equal to $10,000.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;Upon the occurrence of an extension of the Commitment Outside Date on July 15, 2026, the Unused Investment Amount at such time shall be reduced to the amount necessary (in the reasonable discretion of the Company) to fund the purchase consideration, including any related fees and expenses in connection therewith, with respect to any Qualifying Acquisition for which a definitive purchase agreement is signed prior to July 15, 2026, and any Investor commitments to purchase Shares of Series C Preferred Stock in excess of such amount (the "<u>Excess Commitment Amounts</u>") shall be automatically terminated on such date and, for the avoidance of doubt, no Commitment Fee shall accrue with respect to the Excess Commitment Amounts on and following such date. The Company shall adjust <u>Schedule A</u> and each Investor's Unused Investment Amount to reflect such pro rata reduction, if any, on such date. Upon the occurrence of the Commitment Outside Date, any remaining commitments of the Investors to purchase Series C Preferred Stock hereunder shall automatically terminate, and the amount of any accrued and unpaid Commitment Fees shall become due and payable on such date.

------

Section 2.02&nbsp;&nbsp;&nbsp;&nbsp;<u>Closings</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;On the terms of this Agreement, and subject to the satisfaction (or, to the extent permitted by applicable Laws, waiver by the party entitled to the benefit thereof) of the conditions set forth herein (other than those conditions that by their nature are to be satisfied at a Closing, but subject to the satisfaction or waiver of those conditions at such time), the closing of the sale and purchase of the Acquired Shares for such Closing shall occur at the offices of Paul, Weiss, Rifkind, Wharton & Garrison LLP at 1285 Avenue of the Americas, New York, NY 10019.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;At least one Business Day prior to a Closing, each Investor shall pay its pro rata share (based on such Investor's portion of the aggregate Unused Investment Amount of all Investors), not to exceed such Investor's Unused Investment Amount, of the applicable Funding Amount to the Company, by wire transfer in immediately available U.S. federal funds, to the account designated by the Company in writing to such Investor at least four Business Days prior to such Closing, with such funds to be held pursuant to escrow arrangements reasonably satisfactory to the Apollo Investor until the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;At a Closing:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;the Company shall:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;&nbsp;&nbsp;(A) with respect to the initial Closing, file with the Secretary of State of the State of Delaware the Certificate of Designations and (B) with request to any subsequent Closing, file with the Secretary of State of the State of Delaware an amendment to the Certificate of Designations providing for the issuance of the Acquired Shares issued in connection with such Closing and, in each case, shall deliver to each Investor a certified copy thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;&nbsp;&nbsp;deliver to each Investor evidence of book-entry shares representing the Acquired Shares credited to book-entry accounts maintained by the Transfer Agent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)&nbsp;&nbsp;&nbsp;&nbsp;pay any applicable expense reimbursement amount set forth in <u>Section 9.11</u> incurred since the date hereof or since the date of any prior Closing Date, as applicable, by wire transfer in immediately available U.S. federal funds, to the account(s) designated by the Apollo Investor in writing at least one Business Day prior to such Closing Date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)&nbsp;&nbsp;&nbsp;&nbsp;if applicable, pay to each Investor an amount equal to such Investor's Commitment Fee with respect to such Investor's Funding Amount for such Closing by wire transfer in immediately available U.S. federal funds, to the account(s) designated by such Investor in writing at least two Business Days prior to the Closing Date for such Closing; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;each Investor shall (to the extent not previously delivered) deliver to the Company or its paying agent a duly executed, valid, accurate and properly completed IRS Form W-9 or an appropriate IRS Form W-8, as applicable.

Section 2.03&nbsp;&nbsp;&nbsp;&nbsp;<u>Defaulting Investors</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;If any Investor fails to purchase at a Closing (or provides written notice of its intent not to purchase) its portion of the Acquired Shares in accordance with the terms of this Agreement (the Acquired Shares not timely purchased, the "<u>Default Shares</u>," and such defaulting Investor, the "<u>Defaulting Investor</u>"), then the Company shall promptly deliver a notice to the Apollo Investor (so long as the Apollo Investor is not a Defaulting Investor), and thereafter to the other non-defaulting Investors (such non-defaulting Investors, the "<u>Non-Defaulting Investors</u>"), which notice shall include the number of Default Shares and the aggregate purchase price payable therefor (which shall be calculated based on a

------

purchase price per Default Share equal to $10,000). Each Non-Defaulting Investor shall have the right, in its sole discretion, to purchase and acquire from the Company at such Closing its *pro rata* portion (based on the relative portion of the aggregate Funding Amount allocated to such Non-Defaulting Investor) of the Default Shares for the aggregate purchase price specified in the notice provided by the Company to the Non-Defaulting Investors. If any Non-Defaulting Investor declines to exercise such right with respect to its *pro rata* portion of the Default Shares, then each other Non-Defaulting Investor shall have the right, in its sole discretion, to purchase and acquire from the Company at the Closing its *pro rata* portion (based on the relative portion of the aggregate Funding Amount allocated to such other Non-Defaulting Investor) all such Default Shares not otherwise purchased at a purchase price per Default Share equal to $10,000.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Nothing in this <u>Section 2.03</u> shall obligate or require any Investor to exercise its right to acquire any Default Shares or to fund any additional portion of the Funding Amount with respect to such Default Shares. The Company may pursue any other remedies against any Defaulting Investor available to the Company, subject to applicable law and the terms of this Agreement.

Section 2.04&nbsp;&nbsp;&nbsp;&nbsp;<u>Post-Signing Investors</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Other than as provided in <u>Section 2.04(b)</u>, the Company shall have the right, subject to <u>Section 5.18</u>, for 120 days following the date hereof (the "<u>Marketing Period</u>"), which period shall not be shortened or lengthened by the Company without the prior written consent of the Apollo Investor, to allocate additional Acquired Shares to (i) new investors that are existing stockholders of the Company or (ii) any other new investors identified in writing by the Company to the Apollo Investor prior to the date of executing a joinder agreement, in each case, that deliver a joinder agreement substantially in the form of <u>Exhibit A-1</u> hereto; <u>provided</u> that no person shall be required to deliver a joinder agreement if such Person has previously become a party to the Agreement. Any allocations by the Company pursuant to this <u>Section 2.04(a)</u> shall increase the aggregate Investment Amount to be funded by Investors under this Agreement; <u>provided</u> that the Investment Amount shall not exceed $10.0 billion in the aggregate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;For a period beginning on the date of this Agreement and ending on the Commitment Outside Date, the Apollo Investor shall have the right:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;subject to the Company's prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed, to allocate and assign the Apollo Investor's commitment to purchase up to 28,000 unissued Acquired Shares to co-investors that deliver a joinder agreement substantially in the form of <u>Exhibit A-1</u> hereto; <u>provided</u>, <u>however</u>, that no such consent shall be required for any co-investor that has been named on a "white list" that has been agreed between Apollo and the Company prior to the date hereof; <u>provided</u>, <u>further</u>, that no such allocation will relieve the Apollo Investor of its obligations hereunder prior to the Closing in the event that any co-investor does not comply with its obligations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;without the consent of the Company, to allocate and assign all or any portion of the Apollo Investor's commitment to purchase unissued Acquired Shares an Investor Transferee by the delivery by such Person to the Company of a joinder agreement substantially in the form of <u>Exhibit A-1</u> hereto; <u>provided</u> that no person shall be required to deliver a joinder agreement if such Person has previously become a party to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;The Company shall amend <u>Schedule A</u> to reflect the allocation of additional Acquired Shares or any joinders executed pursuant to this <u>Section 2.04</u>.

------

**ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY**

The Company represents and warrants to each Investor that, as of the date hereof and as of each Closing Date (to the extent such representations are required on such Closing Date pursuant to <u>Section 7.04</u>), except as disclosed in any report, schedule, form, statement or other document (including exhibits) filed with, or furnished to, the SEC and publicly available on or after January 1, 2025 and prior to the date hereof (the "<u>Filed SEC Documents</u>") (it being acknowledged that nothing disclosed in the Filed SEC Documents shall be deemed to qualify or modify the representations and warranties set forth in <u>Sections 3.01</u>, <u>3.02</u>, <u>3.03(a)</u>, <u>3.06</u> and <u>3.13)</u>:

Section 3.01&nbsp;&nbsp;&nbsp;&nbsp;<u>Organization; Standing</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;The Company is a corporation duly incorporated and validly existing as a corporation in good standing under the Laws of the State of Delaware and has the corporate power and authority necessary to own or lease its property and to conduct its business and is qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Company is duly licensed or qualified as a foreign corporation for the transaction of business and is in good standing (if applicable) under the Laws of each other jurisdiction in which it owns or leases properties or conducts any business so as to require such qualification, except to the extent that the failure to be so licensed, qualified or in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. True and complete copies of the Company Charter Documents are included in the Filed SEC Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Each of the Company's Subsidiaries is duly incorporated, organized or formed, validly existing as a corporation or other business entity in good standing (where such concept is recognized under applicable Law) under the Laws of the jurisdiction of its incorporation, organization or formation, except where the failure to be so organized, existing and in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 3.02&nbsp;&nbsp;&nbsp;&nbsp;<u>Capitalization</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;The authorized capital stock of the Company consists of 2,000,000,000 shares of Common Stock and 10,000,000 shares of preferred stock, par value $0.001 per share ("<u>Company Preferred Stock</u>"). At the close of business on December 31, 2025 (the "<u>Capitalization Date</u>"), (i) 674,547,217 shares of Common Stock were issued and outstanding, (ii) 62,500,786 shares of Common Stock were reserved and available for issuance pursuant to the Company Stock Plan, (iii) 261,010,074 shares of Common Stock were reserved and available for issuance pursuant to the exercise of warrants ("<u>Company Warrants</u>"), (iv) 253,858,524 shares of Common Stock were reserved and available for issuance pursuant to the conversion of Company Preferred Stock and (v) 1,575,000 shares of Company Preferred Stock were issued or outstanding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Except as described in this <u>Section 3.02</u>, as of the Capitalization Date, there were (i) no outstanding shares of capital stock of, or other equity or voting interests in, the Company, (ii) no outstanding securities convertible into or exchangeable for shares of capital stock of, or other equity or voting interests in, the Company other than obligations under the Company Stock Plan, Company Preferred Stock and Company Warrants, (iii) no outstanding options, warrants, rights or other commitments or agreements to acquire from the Company or any Subsidiary, or that obligate the Company or any Subsidiary to issue, any capital stock of, or other equity or voting interests (or voting debt) in, or any securities convertible into or exchangeable for shares of capital stock of, or other equity or

------

voting interests in, the Company other than obligations under the Company Stock Plan, Company Preferred Stock and Company Warrants, (iv) no obligations of the Company or any Subsidiary to grant, extend or enter into any subscription, warrant, right, debt, convertible or exchangeable security or other similar agreement or commitment relating to any capital stock of, or other equity or voting interests in, the Company (the items in clauses (i), (ii), (iii) and (iv) being referred to collectively as "<u>Company Securities</u>") and (v) no other obligations by the Company or any of its Subsidiaries to make any payments based on the price or value of any Company Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;There are no outstanding agreements of any kind which obligate the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any Company Securities, or obligate the Company to grant, extend or enter into any such agreements relating to any Company Securities, including any agreements granting any preemptive rights, subscription rights, anti-dilutive rights, rights of first refusal or similar rights with respect to any Company Securities. None of the Company or any Subsidiary of the Company is a party to any stockholders' agreement, voting trust agreement, registration rights agreement or other similar agreement or understanding relating to any Company Securities or any other agreement relating to the disposition, voting or dividends with respect to any Company Securities, other than this Agreement. All outstanding shares of Common Stock have been duly authorized and validly issued and are fully paid, nonassessable and free of preemptive rights.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;The Acquired Shares and the shares of Common Stock issuable upon conversion of the Acquired Shares will be, when issued, duly authorized and validly issued, fully paid and nonassessable and issued in compliance with all applicable federal and state securities laws, and such shares will not be issued in violation of any purchase option, call option, preemptive right, resale right, subscription right, right of first refusal or similar right, and will be free and clear of all Liens, except restrictions imposed by the Securities Act and any applicable foreign and state securities Laws, Liens contemplated by the Transaction Documents and <u>Section 5.07</u>. The Acquired Shares, when issued, and the shares of Common Stock issuable upon conversion of the Acquired Shares, if and when issued, will have the terms and conditions and entitle the holders thereof to the rights set forth in the Company Charter Documents, as amended by the Certificate of Designations. The shares of Common Stock issuable upon conversion of the Acquired Shares have been duly reserved for such issuance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, all of the outstanding shares of capital stock of, or other equity or voting interests in, each Subsidiary of the Company (except for directors' qualifying shares or the like) are owned directly or indirectly, beneficially and of record, by the Company free and clear of all Liens.

Section 3.03&nbsp;&nbsp;&nbsp;&nbsp;<u>Authority; Non-contravention</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;The Company has all necessary corporate power and corporate authority to execute and deliver this Agreement and the other Transaction Documents and to perform its obligations hereunder and thereunder and to consummate the Transactions. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents, and the consummation by it of the Transactions, have been duly authorized by the Board and the Board has duly reserved (x) the shares of Series C Preferred Stock to be issued in accordance with the terms and conditions of the Certificate of Designations and (y) the shares of Common Stock to be issued upon any conversion of shares of Series C Preferred Stock into Common Stock. No other action on the part of the Company or its stockholders is necessary to authorize the execution, delivery and performance by the Company of this Agreement and the other Transaction Documents and the consummation by it of the Transactions. This Agreement has been duly executed and delivered by the Company and, assuming due authorization, execution and delivery hereof by each Investor, constitutes a legal, valid and binding obligation of the Company,

------

enforceable against the Company in accordance with its terms, except that such enforceability (i) may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar Laws of general application affecting or relating to the enforcement of creditors' rights generally and (ii) is subject to general principles of equity, whether considered in a proceeding at law or in equity (the "<u>Bankruptcy and Equity Exception</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Neither the execution and delivery of this Agreement or the other Transaction Documents by the Company, nor the consummation by the Company of the Transactions, nor performance or compliance by the Company with any of the terms or provisions hereof or thereof, will (i) conflict with or violate any provision of the Company's Charter Documents or (ii) assuming that the authorizations, consents and approvals referred to in <u>Section 3.04</u> are obtained at or prior to the Closing Date and the filings referred to in <u>Section 3.04</u> are made and any waiting periods thereunder have terminated or expired at or prior to the Closing Date, (x) violate any Law or Judgment applicable to the Company or any of its Subsidiaries or (y) violate or constitute a default (or constitute an event which, with notice or lapse of time or both, would violate or constitute a default) or accelerate the performance required by the Company or any of its Subsidiaries under any of the terms or provisions of any loan or credit agreement, indenture, debenture, note, bond, mortgage, deed of trust, lease, sublease, license, contract or other agreement (a "<u>Contract</u>") to which the Company or any of its Subsidiaries is a party or accelerate the Company's or, if applicable, any of its Subsidiaries' obligations under any such Contract, except, in the case of clause (ii), as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 3.04&nbsp;&nbsp;&nbsp;&nbsp;<u>Governmental Approvals</u>. Except for (a) the filing of the Certificate of Designations with the Secretary of State of the State for Delaware, (b) filings required under, and compliance with other applicable requirements of the HSR Act and any other applicable Regulatory Laws, (c) filings with the SEC under the Securities Act and Exchange Act and (d) compliance with any applicable state securities or blue sky laws, no consent or approval of or filing, license, permit or authorization, declaration or registration with, or notice to any Governmental Authority or any stock market or stock exchange is necessary for the execution and delivery of this Agreement and the other Transaction Documents by the Company, the performance by the Company of its obligations hereunder and thereunder and the consummation by the Company of the Transactions, other than such other consents, approvals, filings, licenses, permits or authorizations, declarations or registrations that, if not obtained, made or given, would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 3.05&nbsp;&nbsp;&nbsp;&nbsp;<u>Company SEC Documents; Undisclosed Liabilities</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;The Company has filed with the SEC, on a timely basis, all required reports, schedules, forms, statements and other documents required to be filed by the Company with the SEC pursuant to the Exchange Act since January 1, 2025 (collectively, the "<u>Company SEC Documents</u>"). As of their respective SEC filing dates, the Company SEC Documents complied in all material respects with the requirements of the Securities Act, the Exchange Act or the Sarbanes-Oxley Act of 2002 (and the regulations promulgated thereunder), as the case may be, applicable to such Company SEC Documents, and none of the Company SEC Documents as of such respective dates (or, if amended prior to the date hereof, the date of the filing of such amendment, with respect to the disclosures that are amended) contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. As of the date hereof, (i) the Company is eligible to file a registration statement on Form S-3, (ii) none of the Company's Subsidiaries is required to file any documents with the SEC, (iii) there are no outstanding or unresolved comments in comment letters from the SEC staff with respect to any of the Company SEC Documents and (iv) to the knowledge of the Company, none of the

------

Company SEC Documents is the subject of ongoing SEC review, outstanding SEC comment or outstanding SEC investigation. Each of the certifications and statements relating to the Company SEC Documents required by: (A) Rule 13a-14 or Rule 15d-14 under the Exchange Act; (B) 18 U.S.C. §1350 (Section 906 of the Sarbanes-Oxley Act); or (C) any other rule or regulation promulgated by the SEC or applicable to the Company SEC Documents is accurate and complete, and complies as to form and content in all material respects with all applicable Laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;The consolidated financial statements of the Company (including all related notes or schedules) included or incorporated by reference in the Company SEC Documents (i) complied as to form, as of their respective dates of filing with the SEC in all material respects with the applicable accounting requirements of the Securities Act with respect thereto, (ii) have been prepared in accordance with GAAP (except, in the case of unaudited quarterly statements, as permitted by Form 10-Q of the SEC or other rules and regulations of the SEC) applied on a consistent basis during the periods involved (except (i) as may be indicated in the notes thereto or (ii) as permitted by Regulation S-X), and (iii) fairly present in all material respects the consolidated financial position of the Company and its Subsidiaries as of the dates thereof and the consolidated results of their operations and cash flows for the periods shown (subject, in the case of unaudited quarterly financial statements, to normal year-end adjustments).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;Neither the Company nor any of its Subsidiaries has any liabilities of any nature (whether accrued, absolute, contingent or otherwise) that would be required under GAAP, as in effect on the date hereof, to be reflected on a consolidated balance sheet of the Company (including the notes thereto) except liabilities (i) reflected or reserved against in the balance sheet (or the notes thereto) of the Company and its Subsidiaries as of September 30, 2025 (the "<u>Balance Sheet Date</u>") included in the Filed SEC Documents, (ii) incurred after the Balance Sheet Date in the ordinary course of business (other than any such liabilities related to any breach of Contract, violation of Laws, infringement, misappropriation or tort) or (iii) as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;The Company has established and maintains, and at all times since January 1, 2025 has maintained, disclosure controls and procedures and a system of internal controls over financial reporting (as such terms are defined in paragraphs (e) and (f), respectively, of Rule 13a-15 under the Exchange Act) as required by Rule 13a-15 under the Exchange Act. Neither the Company nor, to the knowledge of the Company, the Company's independent registered public accounting firm, has identified or been made aware of "material weaknesses" (as defined by the Public Company Accounting Oversight Board) in the design or operation of the Company's internal controls over and procedures relating to financial reporting which would reasonably be expected to adversely affect in any material respect the Company's ability to record, process, summarize and report financial data, in each case which has not been subsequently remediated. The Company is, and has been at all times since January 1, 2025, in compliance in all material respects with the applicable listing requirements and corporate governance rules and regulations of the NYSE.

Section 3.06&nbsp;&nbsp;&nbsp;&nbsp;<u>Absence of Certain Changes; Solvency</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Since January 1, 2025, there has not been any Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;As of the date hereof, after giving effect to the transactions contemplated by this Agreement, the Company and its Subsidiaries, on a consolidated basis, are Solvent.

Section 3.07&nbsp;&nbsp;&nbsp;&nbsp;<u>Legal Proceedings</u>. Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, there is no (a) pending legal or governmental

------

action, claim, lawsuit, charge, complaint, audit, investigation, arbitration, inquiry, proceeding or lawsuit (an "<u>Action</u>") against the Company or any of its Subsidiaries and, to the knowledge of the Company, no such Actions have been threatened by any Governmental Authority or any other Person or (b) judgment, injunction, ruling, writ, order or decree of any Governmental Authority having jurisdiction over the Company and its Subsidiaries ("<u>Judgments</u>") imposed upon the Company or any of its Subsidiaries.

Section 3.08&nbsp;&nbsp;&nbsp;&nbsp;<u>Compliance with Laws; Permits</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;There are no legal or governmental actions, suits or proceedings in law or equity pending or in arbitration or, to the knowledge of the Company, threatened to which the Company or any of its Subsidiaries is a party or to which any of the properties or rights of the Company or any of its Subsidiaries is subject, other than proceeding that would not, singly or in the aggregate, reasonably be expected to have a Material Adverse Effect or a material adverse effect on the power or ability of the Company to perform its obligations under this Agreement or to consummate the Transactions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;The Company and each of its Subsidiaries have such permits, licenses, approvals, consents, franchises, certificates of need and other approvals or authorizations of Governmental Authority ("<u>Permits</u>") as are necessary under applicable Law to own their respective properties and conduct their respective businesses, except for any of the foregoing that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Neither the Company nor any of its Subsidiaries has received written notice of any proceedings related to the revocation or modification of any such Permits that, individually or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would have a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;None of the Company or its Subsidiaries and their respective properties or assets is in violation of (nor will the continued operation of their material properties and assets as currently conducted violate) any law, rule or regulation or is in default with respect to any judgment, writ, injunction or decree of any court or governmental agency, authority or body or any arbitrator having authority over such person, where such violation or default would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

Section 3.09&nbsp;&nbsp;&nbsp;&nbsp;<u>Contracts</u>. Each Contract that is material to the business of the Company and its Subsidiaries, taken as a whole (each, a "<u>Material Contract</u>"), and to which the Company or any of its Subsidiaries is a party or by which the Company, any of its Subsidiaries or any of their respective properties or assets is bound, is valid, binding and enforceable on the Company and any of its Subsidiaries to the extent such Person is a party thereto, as applicable, and to the knowledge of the Company, each other party thereto, and is in full force and effect, except where the failure to be valid, binding or in full force and effect, individually or in the aggregate, has not had and would not reasonably be expected to have a Material Adverse Effect. The Company and each of its Subsidiaries, and, to the knowledge of the Company, any other party thereto, is in compliance in all respects with all Material Contracts and has performed all obligations required to be performed by it, except where such noncompliance, individually or in the aggregate, has not had and would not reasonably be expected to have a Material Adverse Effect.

Section 3.10&nbsp;&nbsp;&nbsp;&nbsp;<u>Tax Matters</u>. The Company and each of its Subsidiaries have filed all U.S. federal, state, local and foreign Tax returns required to be filed through the date of this Agreement or have requested extensions of the filing deadlines therefor (except where the failure to file would not, singly or in the aggregate, have a Material Adverse Effect) and have paid all Taxes required to be paid thereon (except for cases in which the failure to file or pay would not, singly or in the aggregate, have a Material Adverse Effect, or, except as currently being contested in good faith and for which reserves required by U.S. GAAP have been created in the financial statements of the Company), and no Tax deficiency has been determined adversely to the Company or any of its Subsidiaries which has had, nor does the

------

Company or any of its Subsidiaries have any notice or knowledge of any Tax deficiency which could reasonably be expected to be determined adversely to the Company or its Subsidiaries and which could reasonably be expected to have, singly or in the aggregate, a Material Adverse Effect.

Section 3.11&nbsp;&nbsp;&nbsp;&nbsp;<u>Real Property Holding Corporation</u>. The Company is not currently and has not been during the prior five years a United States real property holding corporation (a "<u>USRPHC</u>") within the meaning of Section 897 of the Code.

Section 3.12&nbsp;&nbsp;&nbsp;&nbsp;<u>No Rights Agreement; Anti-Takeover Provisions</u>. The Company is not party to a stockholder rights agreement, "poison pill" or similar anti-takeover agreement or plan.

Section 3.13&nbsp;&nbsp;&nbsp;&nbsp;<u>Brokers and Other Advisors</u>. Except for Goldman Sachs & Co. LLC ("<u>Goldman</u>"), Morgan Stanley & Co. LLC ("<u>Morgan Stanley</u>") and J.P. Morgan Securities LLC ("<u>J.P. Morgan</u>"), no broker, investment banker, financial advisor or other Person is entitled to any broker's, finder's, financial advisor's or other similar fee or commission, or the reimbursement of expenses in connection therewith, in connection with the Transactions based upon arrangements made by or on behalf of the Company or any of its Subsidiaries.

Section 3.14&nbsp;&nbsp;&nbsp;&nbsp;<u>Employee Benefit Plans</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect (i) each employee benefit pension plan, within the meaning of Section 3(2) of the ERISA subject to Title IV of ERISA that is maintained, sponsored or contributed to the Company, its Subsidiaries or any member of their respective "Controlled Group" (defined as any entity, whether or not incorporated, that is under common control with the Company within the meaning of Section 4001(a)(14) of ERISA or any entity that would be regarded as a single employer with the Company under Section 414(b), (c), (m) or (o) of the Code or with respect to which the Company, its Subsidiaries or any member of the Controlled Group has any liability (each, a "<u>Plan</u>") has been maintained, funded and administered in compliance with its terms and the requirements of any applicable statutes, orders, rules and regulations, including but not limited to ERISA and the Code; (ii) no prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975 of the Code, has occurred with respect to any Plan, excluding transactions effected pursuant to a statutory or administrative exemption; (iii) for each Plan that is subject to the funding rules of Section 412 of the Code or Section 302 of ERISA, no "accumulated funding deficiency" as defined in Section 412 of the Code, whether or not waived, has occurred or is reasonably expected to occur; (iv) no "reportable event" (within the meaning of Section 4043(c) of ERISA) not waived by the Pension Benefit Guarantee Corporation ("<u>PBGC</u>") has occurred or is reasonably expected to occur; and (v) neither the Company nor, to the knowledge of the Company, any member of the respective Controlled Group has incurred, nor reasonably expects to incur, any liability under Title IV of ERISA (other than contributions to the Plan or premiums to the PBGC, in the ordinary course and without default) with respect to the termination of a Plan (or the withdrawal from a "multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Except as would not reasonably be expected to have a Material Adverse Effect, each "employee benefit plan" as defined in Section 3(3) of ERISA and each other employee benefit or compensation plan, program or arrangement of any kind maintained, sponsored or contributed to by the Company and its Subsidiaries or with respect to which the Company and its Subsidiaries has any liability (each a "<u>Benefit Plan</u>") (i) has been maintained, funded and administered in compliance with its terms and the requirements of any applicable statutes, orders, rules and regulations, including but not limited to ERISA and the Code; and (ii) no prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975 of the Code, has occurred with respect to any Benefit Plan, excluding transactions effected pursuant to a statutory or administrative exemption.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;Each Benefit Plan intended to be tax-qualified under Section 401(a) of the Code has received a current determination letter from the Internal Revenue Service as to the qualification of

------

such Benefit Plan or such Benefit Plan is entitled to rely on an opinion letter issued on the form of the plan by the Internal Revenue Service as to the qualification of such Benefit plan and nothing has occurred that could adversely affect the qualified status of such Benefit Plan.

Section 3.15&nbsp;&nbsp;&nbsp;&nbsp;<u>Labor Matters</u>. No labor disturbance, strike, lockout, work stoppage, slowdown, picketing, hand billing by or dispute with employees of the Company or its Subsidiaries or their representatives exists or, to the knowledge of the Company, is contemplated or threatened, except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. To the knowledge of the Company, there are no pending or threatened material (i) labor organizing activities with respect to the employees of the Company or any of its Subsidiaries, or (ii) unfair labor practice charges, grievances or arbitrations, in each case, as of the date of this Agreement. The Company or the applicable Subsidiary has satisfied in all material respects any notice, consultation or other obligations owed to employees or any labor union, works council, employee representative or other labor organization under applicable Law or Collective Bargaining Agreement in connection with entering into this Agreement. The Company and its Subsidiaries have reasonably investigated all sexual harassment allegations of which any of them has knowledge. With respect to each such allegation with potential merit, the Company or the applicable Subsidiary has taken corrective action that is reasonably calculated to prevent further improper action.

Section 3.16&nbsp;&nbsp;&nbsp;&nbsp;<u>Sale of Securities</u>. Based in part on the representations and warranties set forth in <u>Section 4.05</u>, the sale and offer of the Acquired Shares pursuant to this Agreement is exempt from the registration and prospectus delivery requirements of the Securities Act. Without limiting the foregoing, neither the Company nor, to the knowledge of the Company, any other Person authorized by the Company to act on its behalf, has engaged in a general solicitation or general advertising (within the meaning of Regulation D of the Securities Act) of investors with respect to offers or sales of Series C Preferred Stock, and neither the Company nor, to the knowledge of the Company, any Person acting on its behalf has made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause the offering or issuance of Series C Preferred Stock under this Agreement to be integrated with prior offerings by the Company for purposes of the Securities Act that would result in none of Regulation D or any other applicable exemption from registration under the Securities Act to be available, nor will the Company take any action or steps that would cause the offering or issuance of Series C Preferred Stock under this Agreement to be integrated with other offerings by the Company.

Section 3.17&nbsp;&nbsp;&nbsp;&nbsp;<u>Listing and Maintenance Requirements</u>. The Common Stock is registered pursuant to Section 12(b) of the Exchange Act and listed on the NYSE, and the Company has taken no action designed to, or which to the knowledge of the Company is reasonably likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act or delisting the Common Stock from the NYSE, nor has the Company received as of the date of this Agreement any notification that the SEC or the NYSE is contemplating terminating such registration or listing or otherwise.

Section 3.18&nbsp;&nbsp;&nbsp;&nbsp;<u>Anti-Money Laundering; PATRIOT Act</u>. The operations of the Company and its Subsidiaries are and have in the past five years been conducted at all times in material compliance with all applicable financial recordkeeping and reporting requirements, including those of the Bank Secrecy Act, as amended by Title III of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act) and the applicable anti-money laundering statutes of jurisdictions where the Company and its Subsidiaries conduct business, the rules and regulations thereunder and any related or similar rules, regulations or guidelines issued, administered or enforced by any governmental agency (collectively, the "<u>Anti-Money Laundering Laws</u>"), and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its Subsidiaries with respect to the Anti-Money Laundering Laws is pending or, to the best knowledge of the Company, threatened.

Section 3.19&nbsp;&nbsp;&nbsp;&nbsp;<u>Sanctions; Anti-Corruption Laws</u>.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;None of the Company or its Subsidiaries, or any of their respective directors, officers or, to the Company's knowledge, any employee, agent or controlled affiliate or other Person acting on behalf of the Company or its Subsidiaries, is an individual or entity that is, or is owned or controlled by one or more Persons that are:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;the target of any sanctions administered or enforced by the U.S. Department of the Treasury's Office of Foreign Assets Control, the United Nations Security Council, the European Union, His Majesty's Treasury, or any other relevant sanctions authority (collectively, "<u>Sanctions</u>"), or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;located, organized or resident in a country or territory that is or has been since April 24, 2019, the target of Sanctions (including, without limitation, the so-called Donetsk People's Republic, the so-called Luhansk People's Republic, the Crimea Region and the non-government controlled areas of the Zaporizhzhia and Kherson Regions of Ukraine, Cuba, Iran, North Korea and Syria, or any other Covered Region of Ukraine identified pursuant to Executive Order 14065) (together with Belarus and Russia, each, a "<u>Sanctioned Jurisdiction</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Except as is not in violation of applicable Sanctions, none of the Company or its Subsidiaries will, directly or, to the Company's knowledge, indirectly, use any part of the proceeds of the Transactions or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture or other person:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;to fund or facilitate any activities of or business with or involving any Person that, at the time of such funding or facilitation, is the target of Sanctions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;to fund or facilitate any activities of or business with, in or involving any country or territory that is, at the time of such funding or facilitation, a Sanctioned Jurisdiction; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;in any other manner that would result in a violation of Sanctions by any Person (including any Person participating in the Transactions).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;Since April 24, 2019, the Company and each of its Subsidiaries have not knowingly engaged in, and are not now engaged in, and will not engage in any dealings or transactions with any Person, in any country or territory, or with any Person located, organized, or resident in any country or territory, that at the time of the dealing or transaction is or was the subject of Sanctions, in each case in violation of applicable Sanctions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;In the past five years, neither the Company nor its Subsidiaries, nor any of their respective directors, officers, or employees, or, to the Company's knowledge, any agent, controlled affiliate or other Person acting on behalf of the Company or its Subsidiaries is or has been (i) engaged in any export, reexport, transfer or provision of any goods, software, technology, data or service without, or exceeding the scope of, any required or applicable licenses or authorizations under all applicable Laws relating to export, reexport, transfer, and import controls, including the Export Administration Regulations, the International Traffic in Arms Regulations, the customs and import Laws administered by U.S. Customs and Border Protection, and the EU Dual Use Regulation (collectively, "<u>Ex-Im Laws</u>"); or (ii) otherwise in violation of Ex-Im Laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;(i) Neither the Company or its Subsidiaries, nor any of their respective directors, officers, employees or any controlled affiliate, or, to the Company's knowledge, any agent acting on behalf of the Company or its Subsidiaries, has taken or will take any unlawful action in furtherance of an

------

offer, payment, promise to pay, or authorization or approval of the payment, giving or receipt of money, property, gifts or anything else of value, directly or indirectly, to any government official (including any officer or employee of a government or government-owned or controlled entity or of a public international organization, or any Person acting in an official capacity for or on behalf of any of the foregoing, or any political party or party official or candidate for political office) in order to influence official action, or to any Person in violation of any applicable anti-corruption laws, including the U.S. Foreign Corrupt Practices Act of 1977, as amended; and (ii) the Company and its controlled affiliates have conducted their businesses in compliance with applicable anti-corruption laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;In the past five years (or in the case of Sanctions, since April 24, 2019), neither the Company nor any of its Subsidiaries have received from any Governmental Authority or any Person any notice, inquiry, or internal or external allegation; or made any voluntary or involuntary disclosure to a Governmental Authority, or conducted any internal investigation or audit concerning any actual or potential violation or wrongdoing, in each case related to anti-corruption Laws, Ex-Im Laws, and Sanctions.

Section 3.20&nbsp;&nbsp;&nbsp;&nbsp;<u>Real Property</u>. The Company and its Subsidiaries have good and marketable title in fee simple to, or have valid rights to lease or otherwise use, all items of real and personal property that are material to their respective businesses, taken as a whole, in each case free and clear of all liens, encumbrances, claims and defects with respect to the Company and its Subsidiaries, except those that (i) do not materially interfere with the use made and proposed to be made of such property by the Company and its Subsidiaries or (ii) would not individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 3.21&nbsp;&nbsp;&nbsp;&nbsp;<u>Intellectual Property</u>. Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect: (i) the Company and its Subsidiaries own or have a valid license or right to use all patents, inventions, copyrights, know how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures), trademarks, service marks and trade names (collectively, "<u>Intellectual Property Rights</u>") used in or reasonably necessary to the conduct of their respective businesses as currently conducted; (ii) to the Company's knowledge, the Intellectual Property Rights owned by the Company and its Subsidiaries are valid, subsisting and enforceable, and there is no pending or, to the Company's knowledge, threatened action, suit, proceeding or claim by others in writing challenging the validity, scope or enforceability of any such Intellectual Property Rights; (iii) neither the Company nor any of its Subsidiaries has received any written notice alleging any infringement, misappropriation or other violation of Intellectual Property Rights by the Company or any of its Subsidiaries; (iv) to the Company's knowledge, no third party is infringing, misappropriating or otherwise violating, or has infringed, misappropriated or otherwise violated, any Intellectual Property Rights owned by the Company; (v) to the Company's knowledge, neither the Company nor any of its Subsidiaries infringes, misappropriates or otherwise violates, or has infringed, misappropriated or otherwise violated, any Intellectual Property Rights; (vi) all current and, to the Company's knowledge, former employees who developed, invented or contributed to any Intellectual Property Rights on behalf of the Company or any Subsidiary have executed an invention assignment agreement whereby such employees presently assign all of their right, title and interest in and to such Intellectual Property Rights to the Company or the applicable Subsidiary to the extent such Intellectual Property Rights are not owned by the Company or the applicable Subsidiary by operation of applicable Laws; and (vii) the Company and its Subsidiaries use, and have used, commercially reasonable efforts to maintain the confidentiality of all information intended to be maintained as a trade secret of the Company or any of its Subsidiaries. Except as would not individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (i) the Company and its Subsidiaries use and have used any and all software and other materials distributed under a "free," "open source," or similar licensing model

------

(including but not limited to the MIT License, Apache License, GNU General Public License, GNU Lesser General Public License and GNU Affero General Public License) ("<u>Open Source Software</u>") in compliance with all license terms applicable to such Open Source Software; and (ii) neither the Company nor any of its Subsidiaries incorporates or distributes or has incorporated or distributed any Open Source Software with any proprietary software owned by the Company or any of its Subsidiaries in any manner that requires such proprietary software to be (1) disclosed or distributed in source code form, (2) licensed for the purpose of making derivative works or (3) redistributed at no charge.

Section 3.22&nbsp;&nbsp;&nbsp;&nbsp;<u>Information Technology; Data Security</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, to the Company's knowledge, (i) the Company and its Subsidiaries' information technology assets operate and perform in all material respects as required in connection with the operation of the business of the Company and its Subsidiaries as currently conducted, free and clear of all material bugs, errors, defects, Trojan horses, time bombs, malware and other corruptants; (ii) to the Company's knowledge, the Company and each of its Subsidiaries have in the past three years complied and are presently in compliance in all material respects with all internal and external privacy policies, contractual obligations, binding industry standards and applicable Laws, in each case, relating to the collection, use, transfer, storage, protection, disposal and disclosure by the Company or any of its Subsidiaries of personal, personally identifiable, or sensitive data ("<u>Data Security Obligations</u>", and such data, "<u>Data</u>"); (iii) to the Company's knowledge, the Company has not in the past three years received any written notification of or written complaint regarding and is unaware of any other facts that, individually or in the aggregate, would reasonably indicate material non-compliance with any Data Security Obligations; and (iv) there is currently no action, suit or proceeding by or before any court or governmental authority pending or, to the Company's knowledge, against the Company or any of its Subsidiaries alleging non-compliance with any Data Security Obligation. Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (i) the Company and each of its Subsidiaries have technical and organizational measures in place designed to protect the information technology systems and Data controlled and used in connection with the operation of the Company's and its Subsidiaries' businesses; (ii) without limiting the foregoing, the Company and its Subsidiaries have used commercially reasonable efforts to establish and maintain, and have established, maintained, implemented and complied with, commercially reasonable information technology, information security, cyber security and data protection controls, designed to protect against and prevent material security incidents such as breach and any unauthorized use or other processing of any information technology system or Data controlled and used in connection with the operations of the Company's and its Subsidiaries' businesses ("<u>Breach</u>") in the past three years; and (iii) to the Company's knowledge, there has been no such Breach, and the Company and its Subsidiaries have not been notified of and have no knowledge of any event or condition that would reasonably be expected to result in any such Breach.

Section 3.23&nbsp;&nbsp;&nbsp;&nbsp;<u>Affiliate Transactions</u>. None of the officers or directors of the Company is presently a party to any transaction with the Company or any of its Subsidiaries (other than as holders of options, and/or other grants or awards under the Company Stock Plan, and for services as employees, officers and directors) that is material to the Company and its Subsidiaries, taken as a whole. Since January 1, 2024, neither the Company nor any Subsidiary has entered into any transaction between the Company or any of its Subsidiaries, on the one hand, and any Affiliate of the Company (other than (i) between the Company itself and any of its Subsidiaries or (ii) between any of the Subsidiaries themselves), on the other hand, except in compliance with the Company's related party transaction policy.

Section 3.24&nbsp;&nbsp;&nbsp;&nbsp;<u>Environmental Matters</u>(a)&nbsp;&nbsp;&nbsp;&nbsp;. The Company and its Subsidiaries (i) are in compliance with any and all applicable foreign, federal, state and local laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes,

------

pollutants or contaminants ("<u>Environmental Laws</u>"), (ii) have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses and (iii) are in compliance with all terms and conditions of any such permit, license or approval, except where such noncompliance with Environmental Laws, failure to receive required permits, licenses or other approvals or failure to comply with the terms and conditions of such permits, licenses or approvals would not, singly or in the aggregate, reasonably be expected to have a Material Adverse Effect. There are no costs or liabilities associated with Environmental Laws (including, without limitation, any capital or operating expenditures required for clean-up, closure of properties or compliance with Environmental Laws or any permit, license or approval, any related constraints on operating activities and any potential liabilities to third parties) which would, singly or in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 3.25&nbsp;&nbsp;&nbsp;&nbsp;<u>Investment Company Status</u>(a)&nbsp;&nbsp;&nbsp;&nbsp;. To the knowledge of the Company, the Company is not an "investment company" within the meaning of the Investment Company Act of 1940, as amended.

Section 3.26&nbsp;&nbsp;&nbsp;&nbsp;<u>No Price Manipulation</u>. The Company has not, and to its knowledge no one acting on its behalf has, taken, directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of any of the Series C Preferred Stock.

Section 3.27&nbsp;&nbsp;&nbsp;&nbsp;<u>Status of Securities; Indebtedness</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;As a result of the approval by the Board referred to in <u>Section 3.03(a)</u>, the Series C Preferred Stock to be issued pursuant to this Agreement, and the shares of Common Stock to be issued upon conversion of the Series C Preferred Stock, have been duly authorized and reserved for issuance by all necessary corporate action of the Company. The respective rights, preferences, privileges, and restrictions of the Series C Preferred Stock and the Common Stock are as stated in the Company Charter Documents (including the Certificate of Designations).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;As of the date hereof, the Company is not party to any Contract, and is not subject to any provision in the Company Charter Documents or other governing documents or resolutions of the Board, that, in each case, by its terms restricts, limits, prohibits or prevents the Company from paying dividends in form and the amounts contemplated by the Certificate of Designations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;The Company and its Subsidiaries are and, to the knowledge of the Company, each of the other parties thereto, are not in material breach of, default or violation under, any Contract governing Indebtedness (as defined in the Certificate of Designations) of the Company, and no event has occurred that with notice or lapse of time, or both, would constitute such a material breach, default or violation.

Section 3.28&nbsp;&nbsp;&nbsp;&nbsp;<u>No Other Representations or Warranties</u>. Except for the representations and warranties made by the Company in this <u>Article III</u>, in any Transaction Documents or in any certificate or other document delivered in connection with this Agreement or the Transaction Documents, neither the Company nor any other Person acting on its behalf makes any other express or implied representation or warranty with respect to the Series C Preferred Stock, the Common Stock, the Company or any of its Subsidiaries or their respective businesses, operations, properties, assets, liabilities, condition (financial or otherwise) or prospects, notwithstanding the delivery or disclosure to any Investor or its respective Representatives of any documentation, forecasts or other information with respect to any one or more of the foregoing, and the Investor acknowledges the foregoing. In particular, and without limiting the generality of the foregoing, except for the representations and warranties made by the Company in this <u>Article III</u>, the Transaction Documents, or in any certificate or other document delivered in connection with this Agreement or the Transaction Documents, neither the Company nor any other Person makes or

------

has made any express or implied representation or warranty to the Investors or their respective Representatives with respect to (a) any financial projection, forecast, estimate, budget or prospect information relating to the Company, any of its Subsidiaries or their respective businesses or (b) any oral or written information presented to any Investor or its respective Representatives in the course of its due diligence investigation of the Company, the negotiation of this Agreement or the course of the Transactions or any other transactions or potential transactions involving the Company and any Investor.

**ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE INVESTORS**

Each Investor, severally in respect of itself only and not jointly, represents and warrants to the Company:

Section 4.01&nbsp;&nbsp;&nbsp;&nbsp;<u>Organization; Standing</u>. Such Investor is duly organized, validly existing and in good standing under the Laws of its jurisdiction of organization and has all requisite limited partnership power and authority to carry on its business as presently conducted.

Section 4.02&nbsp;&nbsp;&nbsp;&nbsp;<u>Authority; Non-contravention</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Such Investor has all necessary power and authority to execute and deliver this Agreement and the other Transaction Documents to which it is a party and to perform its obligations hereunder and thereunder and to consummate the Transactions. The execution, delivery and performance by such Investor of this Agreement and the other Transaction Documents and the consummation by such Investor of the Transactions have been duly authorized and approved by all necessary action on the part of such Investor, and no further action, approval or authorization by any of its partners, is necessary to authorize the execution, delivery and performance by such Investor of this Agreement and the other Transaction Documents and the consummation by such Investor of the Transactions. This Agreement has been duly executed and delivered by such Investor and, assuming due authorization, execution and delivery hereof by the Company, constitutes a legal, valid and binding obligation of such Investor, enforceable against such Investor in accordance with its terms, except that such enforceability may be limited by the Bankruptcy and Equity Exception.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Neither the execution and delivery of this Agreement or the other Transaction Documents by such Investor, nor the consummation of the Transactions by such Investor, nor performance or compliance by such Investor with any of the terms or provisions hereof or thereof, will (i) conflict with or violate any provision of the certificate of incorporation, bylaws or other comparable organizational documents of such Investor, or (ii) assuming that the authorizations, consents and approvals referred to in <u>Section 4.03</u> are obtained at or prior to the Closing Date (other than the authorizations, consents and approvals referred to in <u>Section 4.03(b)</u>, which are to be obtained following the Closing in accordance with <u>Section 5.01</u>) and the filings referred to in <u>Section 4.03</u> are made and any waiting periods with respect to such filings have terminated or expired at or prior to the Closing Date (other than the filings referred to in <u>Section 4.03(b)</u>, which are to be made and any waiting periods thereunder are to terminate or expire following the Closing in accordance with <u>Section 5.01</u>), (x) violate any Laws or Judgment applicable to such Investor or (y) violate or constitute a default (or constitute an event which, with notice or lapse of time or both, would violate or constitute a default) under any of the terms, conditions or provisions of any Contract to which such Investor is a party or accelerate such Investor's obligations under any such Contract, except, in the case of clause (ii), as would not, individually or in the aggregate, reasonably be expected to have an Investor Material Adverse Effect.

Section 4.03&nbsp;&nbsp;&nbsp;&nbsp;<u>Governmental Approvals</u>. Except for (a) the filing by the Company of the Certificate of Designations with the Delaware Secretary of State and (b) filings required under, and compliance with other applicable requirements of, the HSR Act and any other applicable Regulatory Laws, based on the information provided to such Investor's Representatives by the Company and its

------

Representatives, no consent or approval of, or filing, license, permit or authorization, declaration or registration with, any Governmental Authority is necessary for the execution and delivery of this Agreement and the other Transaction Documents by such Investor, the performance by such Investor of its obligations hereunder and thereunder and the consummation by such Investor of the Transactions, other than such other consents, approvals, filings, licenses, permits, authorizations, declarations or registrations that, if not obtained, made or given, would not, individually or in the aggregate, reasonably be expected to have an Investor Material Adverse Effect.

Section 4.04&nbsp;&nbsp;&nbsp;&nbsp;<u>Brokers and Other Advisors</u>. No broker, investment banker, financial advisor or other Person is entitled to any broker's, finder's, financial advisor's or other similar fee or commission, or the reimbursement of expenses in connection therewith, in connection with the Transactions based upon arrangements made by or on behalf of any Investor, except for Persons, if any, whose fees and expenses will be paid by such Investor.

Section 4.05&nbsp;&nbsp;&nbsp;&nbsp;<u>Purchase for Investment</u>. Such Investor acknowledges that the offer and sale of the Acquired Shares and the Common Stock issuable upon the conversion of the Acquired Shares have not been registered under the Securities Act or under any state or other applicable securities laws. Such Investor (a) acknowledges that it is acquiring the Acquired Shares and the Common Stock issuable upon the conversion of the Acquired Shares pursuant to an exemption from registration under the Securities Act for its own account, or for one or more accounts as to which it has authority to exercise sole investment discretion, solely for investment with no intention to distribute any of the foregoing to any Person, (b) will not sell, transfer, or otherwise dispose of any of the Acquired Shares or the Common Stock issuable upon the conversion of the Acquired Shares, except in compliance with this Agreement and the registration requirements or exemption provisions of the Securities Act and any other applicable securities Laws, (c) has such knowledge and experience in financial and business matters and in investments of this type that it is capable of evaluating the merits and risks of its investment in the Acquired Shares and the Common Stock issuable upon the conversion of the Acquired Shares and of making an informed investment decision, (d) is an institution that is an "accredited investor" (as that term is defined by Rule 501(a)(1), (2), (3) or (7) of the Securities Act) and an "Institutional Account" (as that term is defined by FINRA Rule 4512(c)), and (e) (1) has reviewed the information that it considers necessary or appropriate to make an informed investment decision with respect to the Acquired Shares and the Common Stock issuable upon conversion of the Acquired Shares, (2) has had an opportunity to discuss with the Company and its Representatives the intended business and financial affairs of the Company and to obtain information necessary to verify the information furnished to it or to which it had access and (3) can bear the economic risk of (i) an investment in the Acquired Shares and the Common Stock issuable upon the conversion of the Acquired Shares indefinitely and (ii) a total loss in respect of such investment. Such Investor has such knowledge and experience in business and financial matters so as to enable it to understand and evaluate the risks of, and form an investment decision with respect to its investment in, the Acquired Shares and the Common Stock issuable upon the conversion of the Acquired Shares.

Section 4.06&nbsp;&nbsp;&nbsp;&nbsp;<u>Non-Reliance on Company Estimates, Projections, Forecasts, Forward-Looking Statements and Business Plans</u>. In connection with the due diligence investigation of the Company by such Investor and its Representatives, such Investor and its Representatives have received and may continue to receive from the Company and its Representatives certain estimates, projections, forecasts and other forward-looking information, as well as certain business plan information, in each case containing forward-looking information, regarding the Company and its Subsidiaries and their respective businesses and operations. Such Investor hereby acknowledges that there are uncertainties inherent in attempting to make such estimates, projections, forecasts and other forward-looking statements, as well as in such business plans to the extent each of them contain forward-looking information, with which such Investor is familiar, that such Investor is making its own evaluation of the adequacy and accuracy of such forward-looking information so furnished to such Investor (including the reasonableness of the assumptions

------

underlying such forward-looking information), and that except for the representations and warranties made by the Company in <u>Article III</u>, the Transaction Documents and in any certificate or other document delivered in connection with this Agreement or the Transaction Documents, and other than for fraud, such Investor will have no claim against the Company or any of its Subsidiaries, or any of their respective Representatives, with respect thereto.

Section 4.07&nbsp;&nbsp;&nbsp;&nbsp;<u>Placement Agents</u>. Such Investor acknowledges that any placement agent acting on behalf of the Company (including Goldman, Morgan Stanley and J.P. Morgan), or such placement agent's directors, officers, employees, representatives and controlling persons, have made no independent investigation with respect to the Company or the Acquired Shares, or the Common Stock issuable upon the conversion of the Acquired Shares, or the accuracy, completeness or adequacy of any information supplied to such Investor by the Company. Such Investor has conducted its own investigation of the Company and the Acquired Shares and has not relied on any statements or other information provided by any placement agent acting on behalf of the Company, or such placement agent's directors, officers, employees, representatives and controlling persons.

Section 4.08&nbsp;&nbsp;&nbsp;&nbsp;<u>Sufficient Funds</u>. Each Investor has as of the date hereof immediately available U.S. federal funds sufficient to pay the Investment Amount set forth opposite such Investor's name on <u>Schedule A</u> under the heading "Investment Amount" and will have at each Closing immediately available U.S. federal funds sufficient to pay such Investor's Funding Amount and to consummate the transactions contemplated by this Agreement.

Section 4.09&nbsp;&nbsp;&nbsp;&nbsp;<u>No Other Representations or Warranties</u>. Except for the representations and warranties made by each Investor in this <u>Article IV</u>, the Transaction Documents and in any certificate or other document delivered in connection with this Agreement or the Transaction Documents, neither any Investor nor any other Person acting on its behalf makes any other express or implied representation or warranty with respect to such Investor or any of its Affiliates or their respective businesses, operations, properties, assets, liabilities, condition (financial or otherwise) or prospects, notwithstanding the delivery or disclosure to the Company or its Representatives of any documentation, forecasts or other information with respect to any one or more of the foregoing, and the Company acknowledges the foregoing. In particular, and without limiting the generality of the foregoing, except for the representations and warranties made by the Investor in this <u>Article IV</u>, the Transaction Documents and in any certificate or other document delivered in connection with this Agreement or the Transaction Documents, neither any Investor nor any other Person makes or has made any express or implied representation or warranty to such Investor or its Representatives with respect to any oral or written information presented to the Company or its Representatives in the course of its due diligence investigation of the Company, the negotiation of this Agreement or the course of the Transactions or any other transactions or potential transactions involving the Company and such Investor. Nothing herein shall limit any claim for fraud.

**ARTICLE V ADDITIONAL AGREEMENTS**

Section 5.01&nbsp;&nbsp;&nbsp;&nbsp;<u>Reasonable Best Efforts; Filings</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Subject to the terms and conditions of this Agreement, including the terms of this <u>Section 5.01</u>, each of the Company and each Investor shall cooperate with each other and use (and shall cause its Subsidiaries to use) its reasonable best efforts to obtain or submit, as the case may be, as promptly as practicable following the date hereof, all applications relating to applicable Regulatory Laws (collectively with the expiration or termination of the waiting period, and any extension thereof, under the HSR Act, the "<u>Required Regulatory Approvals</u>"). In furtherance of the foregoing, each of the parties hereto shall cooperate with each other to evaluate and identify any filings, consents, clearances or approvals required under or in connection with any Regulatory Law.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;The Company and each Investor agree to make any required filings pursuant to the Required Regulatory Approvals with respect to the Transactions as promptly as reasonably practicable following the date of this Agreement and, with respect to filings under the HSR Act, no later than 25 Business Days after the date hereof, and to respond as promptly as reasonably practicable to any request for additional information and documentary material pursuant to the HSR Act or any other Regulatory Law, as applicable, and to promptly take any and all steps necessary to avoid or eliminate each and every impediment and obtain all consents that may be required pursuant to the HSR Act or any other Required Regulatory Approvals, as applicable, so as to enable the parties hereto to consummate the Transactions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;Each of the Company and each Investor shall use its reasonable best efforts to (i) cooperate in all respects with the other party in connection with any filing or submission with a Governmental Authority in connection with the Transactions and in connection with any investigation or other inquiry by or before a Governmental Authority relating to the Transactions, including any proceeding initiated by a private person, (ii) provide to the other any information in their possession that may be reasonably requested for the purposes of preparing submissions to a Governmental Authority, (iii) keep the other party informed as promptly as practicable in all material respects and as promptly as practicable of any material communication received by the Company or such Investor, as the case may be, from or given by the Company or such Investor, as the case may be, to any Governmental Authority and of any material communication received or given in connection with any proceeding by a private Person, in each case regarding the Transactions, (iv) subject to applicable Laws relating to the exchange of information, and to the extent reasonably practicable, consult with the other parties with respect to information relating to such party and its respective Subsidiaries, as the case may be, that appears in any filing made with, or written materials submitted to, any third Person or any Governmental Authority in connection with the Transactions, and (v) to the extent permitted by the applicable Governmental Authority or other Person, give the other party the opportunity to attend and participate in such meetings and conferences. Any documents or other materials provided pursuant to this <u>Section 5.01(c)</u> may be redacted or withheld as necessary to address reasonable privilege or confidentiality concerns, and to remove references concerning the valuation of the Company or other competitively sensitive material, and the parties may, as each deems advisable, reasonably designate any material provided under this <u>Section 5.01(c)</u> as "outside counsel only material".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;In the event that there are multiple Closing Dates pursuant to the terms of this Agreement, each of the Company and each Investor shall cooperate with each other and use (and shall cause its Subsidiaries to use) its reasonable best efforts to integrate the issuance of the Series C Preferred Stock issued on each Closing Date as may be necessary to establish one fungibly traded class of Series C Preferred Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding anything to the contrary in this Agreement, nothing in this <u>Section 5.01</u> or elsewhere in this Agreement shall require any Investor to take any action with respect to any of its Affiliates or their direct or indirect portfolio companies, including selling, divesting, conveying, holding separate, or otherwise limiting its freedom of action with respect to any assets, rights, products, licenses, businesses, operations, or interest therein, of any such Affiliates or any direct or indirect portfolio companies of investment funds advised or managed by one or more Affiliates of such Investor. The parties agree that all obligations of other parties related to regulatory approvals shall be governed exclusively by this <u>Section 5.01</u>.

Section 5.02&nbsp;&nbsp;&nbsp;&nbsp;<u>Corporate Actions</u>. At any time that any Series C Preferred Stock is outstanding, the Company shall (i) from time to time take all lawful action within its control to cause the authorized capital stock of the Company to include a sufficient number of authorized but unissued shares of

------

Common Stock to satisfy the conversion requirements of all shares of the Series C Preferred Stock then outstanding, and (ii) not effect any voluntary deregistration under the Exchange Act or any voluntary delisting with the NYSE (or any other national securities exchange upon which the Common Stock may subsequently be listed) in respect of the Common Stock other than in connection with a Fundamental Change (other than a delisting pursuant to the definition thereof) pursuant to which the Company satisfies in full its obligations under the Certificate of Designations.

Section 5.03&nbsp;&nbsp;&nbsp;&nbsp;<u>Public Disclosure</u>. Apollo and the Company shall consult with each other before issuing, and give each other the opportunity to review and comment upon, any press release or other public statements with respect to the Transaction Documents or the Transactions, and shall not issue any such press release or make any such public statement prior to such consultation, except as may be required by applicable Laws, Judgment, court process or the rules and regulations of any national securities exchange or national securities quotation system. Notwithstanding the forgoing, this <u>Section 5.03</u> shall not apply to any press release or other public statement made by the Company or any Investor (a) which does not contain any information relating to the Transactions that has not been previously announced or made public in accordance with the terms of this Agreement, (b) is made in the ordinary course of business and does not relate specifically to the signing of the Transaction Documents or the Transactions or (c) is made in connection with a Qualifying Acquisition and does not include the identity of any Investor. Notwithstanding the foregoing or anything to the contrary in this <u>Section 5.03</u> and <u>Section 5.04</u>, (i) this <u>Section 5.03</u> and <u>Section 5.04</u> shall not prohibit any disclosure of information concerning this Agreement in connection with any dispute between the parties hereto regarding this Agreement and (ii) any Investor may, without consulting the Company, provide ordinary course communications regarding this Agreement and the transactions contemplated hereby in connection with financial reporting and fundraising activities to existing or prospective general and limited partners, equity holders, members, managers and investors of any Affiliates of such Person, which in each case are subject to customary confidentiality obligations.

Section 5.04&nbsp;&nbsp;&nbsp;&nbsp;<u>Confidentiality</u>. Each Investor's confidentiality obligations under the Non-Disclosure Agreement shall survive the date hereof in accordance with its terms and the confidential information thereunder (including oral, written and electronic information) shall include information concerning the Company, its Subsidiaries or its Affiliates that has been, or may be, furnished to the Investor, its Affiliates or their respective Representatives by or on behalf of the Company or any of its Representatives pursuant to, or in connection with, this Agreement and/or the Transactions and Transaction Documents (such information, the "<u>Confidential Information</u>").

Section 5.05&nbsp;&nbsp;&nbsp;&nbsp;<u>NYSE Listing of Shares</u>. To the extent the Company has not done so prior to the date of this Agreement, the Company shall, as promptly as practicable and in any event at least thirty (30) days prior to the Closing Date, apply to cause the aggregate number of shares of Common Stock issuable upon the conversion of the Series C Preferred Stock to be issued to each Investor pursuant to this Agreement and pursuant to the Certificate of Designations to be approved for listing on the NYSE to the extent required by the NYSE. From time to time following the Closing Date, the Company shall cause the number of shares of Common Stock issuable upon the conversion of the then outstanding shares of Series C Preferred Stock to be approved for listing on the NYSE, subject to official notice of issuance.

Section 5.06&nbsp;&nbsp;&nbsp;&nbsp;<u>Standstill</u>. Each Investor, severally but not jointly, agrees that during the Standstill Period, without the prior written approval of the Board, such Investor will not, directly or indirectly, and will not cause its Affiliates to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;acquire, offer or seek to acquire, agree to acquire or make a public proposal to acquire, by purchase or otherwise, beneficial ownership of any Company Securities, any securities convertible into or exchangeable for any Company Securities, any options or other derivative securities or contracts or instruments in any way related to the price of such Company Securities (other than cash-settled swaps or other cash-settled instruments) such that such Investor and its Affiliates would beneficially own greater than 7.5% of outstanding Common Stock (but in each case other than (i) as a

------

result of any stock split, stock dividend or distribution, subdivision, reorganization, reclassification or similar capital transaction involving Company Securities, (ii) the acquisition of shares of Common Stock issuable upon conversion of the Series C Preferred Stock and (iii) the acquisition of additional Series C Preferred Stock);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;make or in any way participate in or knowingly encourage any "solicitation" of "proxies" (whether or not relating to the election or removal of directors), as such terms are used in the rules of the SEC, to vote, or knowingly seek to advise or influence any Person with respect to voting of, any voting securities of the Company, or call or seek to call a meeting of the Company's stockholders, or initiate any stockholder proposal or action by the Company's stockholders, or seek election to or to place a representative on the Board or seek the removal of any director from the Board;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;propose, offer, seek or indicate an interest in (in each case, with or without conditions) any merger or business combination, tender or exchange offer, recapitalization, reorganization or purchase of a material portion of the assets, properties or securities of the Company or any Subsidiary, or any other extraordinary transaction involving the Company or its Subsidiaries or any Subsidiary or any of their respective securities, or enter into any discussions, negotiations, arrangements, understandings or agreements whether written or oral) with any other Person (other than its Representatives) regarding any of the foregoing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;otherwise act, alone or in concert with others, to seek to control or influence, in any manner, the management, Board or policies of the Company or any Subsidiary (for the avoidance of doubt, excluding any such act in their capacity as a commercial counterparty, customer, supplier or the like);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;make any public proposal or statement of inquiry or publicly disclose any intention, plan or arrangement consistent with the foregoing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;advise or knowingly assist or encourage or direct any Person to do any of the foregoing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;enter into any discussions, negotiations, arrangements or understandings with any third party (including security holders of the Company, but excluding, for the avoidance of doubt, any other Investor) with respect to any of the foregoing, including forming, joining or in any way participating in a "group" (as defined in Section 13(d)(3) of the Exchange Act) with any third party with respect to any of the foregoing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;&nbsp;request the Company or any of its Representatives to amend or waive any provision of this <u>Section 5.06</u>, provided that this clause shall not prohibit the Apollo Investor from making a confidential request to the Company seeking an amendment or waiver of the provisions of this <u>Section 5.06</u>, which the Company may accept or reject in its sole discretion, so long as any such request is made in a manner that does not require public disclosure thereof by the Company; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;contest the validity of this <u>Section 5.06</u> or make, initiate, take or participate in any Action to amend, waive or terminate any provision of this <u>Section 5.06</u>;

<u>provided</u>, <u>however</u>, that nothing in this <u>Section 5.06</u> will limit an Investor's ability to vote, Transfer (subject to <u>Section 5.07</u>), convert (subject to Article VIII of the Certificate of Designations) or otherwise exercise rights under its Common Stock or Series C Preferred Stock; <u>provided</u>, <u>further</u> that notwithstanding anything to the contrary in this <u>Section 5.06</u>, each Investor and its Affiliates may at any

------

time communicate privately with the Company's directors, officers or advisors or submit to the Board one or more confidential proposals or offers for a transaction (including a transaction that, if consummated, would result in a Fundamental Change), so long as, in each case, such communications and submissions are not intended to, and would not reasonably be expected to, require any public disclosure by the Company of such communications or submissions, as applicable.

Section 5.07&nbsp;&nbsp;&nbsp;&nbsp;<u>Transfer Restrictions</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;No Investor shall be permitted to Transfer any Series C Preferred Stock prior to the 15 month anniversary of the date hereof without the Company's prior written consent, unless such Transfer is to such Investor's Affiliate, and no Investor (or any Investor Transferee) shall be permitted to Transfer any shares of Common Stock issued upon conversion of any Series C Preferred Stock on any day in an amount greater than 10% of the average daily trading volume of the Company's Common Stock during the immediately preceding 30-Trading Day period; <u>provided</u>, that any shares of Common Stock (i) issued upon conversion of any Series C Preferred Stock pursuant to a Mandatory Conversion under Section 8.2 of the Certificate of Designations, (ii) received in connection with the payment of dividends, (iii) purchased in the open market or (iv) otherwise acquired in a manner not involving the conversion of the Series C Preferred Stock, in each case, shall not be subject to such restriction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding anything to the contrary herein, for so long as any Investor continues to hold any Series C Preferred Stock (or any Common Stock issued upon conversion of any Series C Preferred Stock) or any other shares of Common Stock, such Investor will not Transfer any Series C Preferred Stock (or any Common Stock issued upon conversion of any Series C Preferred Stock) to a Person who is known to be a Restricted Person (after reasonable inquiry); <u>provided</u>, that the foregoing shall not restrict any Investor from Transferring their Series C Preferred Stock (or any Common Stock issued upon conversion of any Series C Preferred Stock) to a Restricted Person in connection with a merger, tender offer or exchange offer or other business combination, acquisition of assets or similar transaction or any Fundamental Change involving the Company or any of its Subsidiaries that, in each case, is approved by the Board; <u>provided</u>, <u>further</u>, that the foregoing will not apply to any Transfer undertaken in any broadly marketed underwritten offering (including an underwritten block trade) or in unsolicited broker transactions effected pursuant to Rule 144 of the Securities Act, so long as such Investor takes commercially reasonable efforts (including by directing, instructing or requesting any underwriter or broker in connection with such offering or transaction) to not knowingly sell, dispose of or otherwise transfer such Series C Preferred Stock or Common Stock issued upon conversion of any Series C Preferred Stock to Restricted Persons or Persons described in clause (ii) without the Company's prior written consent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;Until the date that is 15 months after the date hereof, each Investor will not make any "short sale" (as defined in Rule 200 of Regulation SHO under the Exchange Act) of, grant any option for the purchase of, or enter into any hedging or similar transaction with the same economic effect as a "short sale" (as defined in Rule 200 of Regulation SHO under the Exchange Act) of any Series C Preferred Stock (or any Common Stock), or otherwise establish or increase, directly or indirectly, a put equivalent position, as defined in Rule 16a-1(h) under the Exchange Act, in each case, for the purpose of which is to offset the loss which results from a decline in the market price of any Series C Preferred Stock (or any Common Stock issued upon conversion of any Series C Preferred Stock) (collectively, "<u>Hedging Arrangements</u>"); <u>provided</u> that such restriction shall not apply to any short sale of Common Stock by an Investor during the period following such Investor's delivery of a conversion notice and prior to the delivery of shares of Common Stock by the Company in an amount not greater than 10% of the average daily trading volume of the Company's Common Stock during the immediately preceding 30-Trading Day period. For the avoidance of doubt, the foregoing restrictions on Hedging Arrangements shall not

------

restrict any Investor from entering into Hedging Arrangements with respect to listed ETF index funds, even if the Common Stock comprises part of such ETF index fund.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;The restrictions set forth in this <u>Section 5.07</u> shall terminate automatically upon the commencement by the Company or one of its Significant Subsidiaries of bankruptcy, insolvency or other similar proceedings.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding anything to the contrary (including any of the Company's policies), at any time from and after the Closing Date, (i) each Investor shall be permitted to Transfer any or all of their Series C Preferred Stock (or any Common Stock issued upon conversion of any Series C Preferred Stock) in connection with a total return swap or a bona fide loan or other financing arrangement, including pledging, hypothecating or otherwise granting a security interest in shares of Series C Preferred Stock and/or shares of Common Stock issued upon conversion of shares of Series C Preferred Stock to one or more lending institutions as collateral or security for any bona fide loan (including a margin loan), advance or extension of credit and any Transfer upon foreclosure (or in lieu of foreclosure) upon such shares of Series C Preferred Stock or Common Stock (a "<u>Permitted Loan</u>"), and (ii) nothing shall prohibit or otherwise restrict the ability of any lender or other creditor or collateral agent under a Permitted Loan (including any agent or trustee on their behalf) or any Affiliate of the foregoing to foreclose upon, or accept a Transfer in lieu of foreclosure, and sell, dispose of or otherwise Transfer the applicable Series C Preferred Stock or Common Stock mortgaged, hypothecated and/or pledged to secure the obligations of the borrower following an event of default (any of the foregoing, collectively, a "<u>Foreclosure</u>") under a Permitted Loan; <u>provided</u>, <u>that</u>, such lender or other creditor or collateral agent under a Permitted Loan or any Affiliate of the foregoing shall not sell, dispose of or otherwise Transfer such Series C Preferred Stock or Common Stock to a Restricted Person without the Company's prior written consent, except if undertaken in a registered offering or an offering exempt from registration under Rule 144 or Rule 144A of the Securities Act, in which such lender or other creditor or collateral agent takes commercially reasonable efforts (including by directing or instructing any underwriter or broker in connection with such offering or transaction) to not knowingly sell, dispose of or otherwise Transfer such Series C Preferred Stock or Common Stock to Restricted Persons without the Company's prior written consent; <u>provided</u>, <u>further</u>, that in the event that any lender or other creditor or collateral agent under a Permitted Loan transaction (including any agent or trustee on their behalf) or any Affiliate of the foregoing exercises any rights or remedies in respect of the applicable Series C Preferred Stock or Common Stock or any other collateral for any Permitted Loan, no lender, creditor, agent or trustee on their behalf or Affiliate of any of the foregoing (other than, for the avoidance of doubt, any Investor) shall be entitled to any rights or have any obligations or be subject to any restrictions or limitations set forth in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;Any attempted Transfer in violation of this <u>Section 5.07</u> shall be null and void *ab initio.*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;So long as such Transfer is not violation of this <u>Section 5.07</u>, the Company shall cooperate with any Investor in connection with the Transfer of any Series C Preferred Stock (or any Common Stock issued upon conversion of any Series C Preferred Stock), including providing reasonable and customary information (i) in connection with the relevant Investor's marketing efforts or any such potential transferee's due diligence, (ii) in order to comply with applicable securities Laws and (iii) in connection with the removal of a restrictive legend, if any, and effectuating or instructing its Transfer Agent to effectuate conversions in accordance with the Certificate of Designations.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;&nbsp;Any Person acquiring the Series C Preferred Stock or Common Stock issued upon conversion of the Series C Preferred Stock pursuant to a Transfer in a private transaction shall be required to be bound by the terms of this Agreement by executing a joinder agreement substantially in the form of <u>Exhibit A-2</u> hereto prior to such Transfer for the benefit of the Company.

Section 5.08&nbsp;&nbsp;&nbsp;&nbsp;<u>Legends</u>. (a) All certificates or other instruments representing the Series C Preferred Stock or Common Stock issued upon conversion of the Series C Preferred Stock will bear a legend substantially to the following effect:

**The securities represented by this instrument have not been registered under the Securities Act of 1933, as amended, or the securities laws of any state and may not be transferred, sold or otherwise disposed of except pursuant to an exemption from registration under such act or such laws, or except, with respect to any Common Stock, while a registration statement relating thereto is in effect under such act and applicable state securities laws.**

Notwithstanding the foregoing, the legend under this <u>Section 5.08(a)</u> shall be removed by the Company and the Series C Preferred Stock or Common Stock issued upon conversion of the Series C Preferred Stock may be Transferred without such legend if (i) such Series C Preferred Stock or Common Stock is registered for resale by the Company pursuant to an effective registration statement filed under the Securities Act and resold pursuant to such registration statement, (ii) such Series C Preferred Stock or Common Stock is eligible for resale pursuant to Rule 144 promulgated under the Securities Act, and solely in the period from the six-month to 12-month anniversary of the Closing Date such Series C Preferred Stock or Common Stock is sold pursuant to Rule 144, or (iii) such Series C Preferred Stock or Common Stock is sold pursuant to an exemption from registration and, in the case of this clause (iii), the Company receives an opinion of counsel reasonably satisfactory to the Company to the effect that the legend may be removed in accordance with applicable securities laws and any other documentation reasonably requested by the Company with respect to compliance with such exemption.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;All certificates or other instruments representing the Series C Preferred Stock will bear a legend substantially to the following effect:

**The securities represented by this certificate are subject to transfer and other restrictions set forth in an Investment Agreement, dated as of January 5, 2026, copies of which are on file with the secretary of the issuer.** 

Notwithstanding the foregoing, the legend under this <u>Section 5.08(b)</u> shall be removed by the Company and the Series C Preferred Stock or Common Stock issued upon conversion of the Series C Preferred Stock may be Transferred without such legend when such legend is no longer applicable to such securities, including, without limitation, upon the sale of such securities in a transaction in which the transferee is not required to be bound by this Agreement, including in an open market transaction.

Section 5.09&nbsp;&nbsp;&nbsp;&nbsp;<u>Tax Matters</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;The Company and its paying agent shall be entitled to withhold Taxes on all payments on the Series C Preferred Stock or Common Stock or other securities issued upon conversion of the Series C Preferred Stock in each case to the extent required by applicable Law; <u>provided</u>, that to the extent that the Investor has previously delivered an appropriate IRS Form W-8 or W-9 to the Company establishing an exemption for U.S. federal withholding (including backup withholding), the Company shall not be permitted to withhold unless the Company has provided the Investor advance written notice of its intent to withhold at least five days prior to the payment of the amount subject to withholding, and

------

has given the Investor a reasonable opportunity to provide any form or certificate available to reduce or eliminate such withholding. Within a reasonable amount of time after making such withholding payment, the Company shall furnish the Investor with copies of any Tax certificate, receipt or other documentation reasonably acceptable to the Investor evidencing such payment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;The Company shall pay any and all documentary, stamp and similar issue or transfer Tax due on (x) the issuance of the Series C Preferred Stock and (y) the issuance of shares of Common Stock upon conversion of the Series C Preferred Stock. However, in the case of conversion of Series C Preferred Stock, the Company shall not be required to pay any Tax or duty that may be payable in respect of any transfer involved in the issuance and delivery of shares of Common Stock or Series C Preferred Stock to a beneficial owner other than the beneficial owner of the Series C Preferred Stock immediately prior to such conversion, and no such issue or delivery shall be made unless and until the person requesting such issue has paid to the Company the amount of any such Tax or duty, or has established to the satisfaction of the Company that such Tax or duty has been paid.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;The parties shall, and shall cause each of their Affiliates to, (i) treat the Acquired Shares as "common stock" rather than as "preferred stock" for purposes of Section 305 of the Code and Treasury Regulations Section 1.305-5, (ii) not treat any dividend paid on the Company's Common Stock in which the Acquired Shares participate as giving rise to a "disproportionate distribution" within the meaning of Section 305(b)(2) of the Code, and (iii) with respect to the Apollo Investor, in connection with any redemption of the Acquired Shares, treat such redemption as a payment in exchange for stock pursuant to Section 302(a) of the Code, provided, that, the Apollo Investor has, prior to such redemption, provided the Company (A) with evidence reasonably satisfactory to the Company that it does not directly, indirectly or constructively own (taking into account the attribution rules of Section 318 of the Code) any stock of the Company other than the Acquired Shares (or Common Stock acquired as a result of the conversion of the Acquired Shares) and (B) with certification (1) attesting to the number of Acquired Shares and shares of Common Stock that the Apollo Investor directly, indirectly or constructively owns (taking into account the attribution rules of Section 318 of the Code) and (2) representing that it is not acquiring, as part of a plan that includes such redemption, any additional shares of Series C Preferred Stock or shares of Common Stock. Without the prior written consent of each Investor, the Company shall not (and the Board shall not authorize the Company to) take any action that would reasonably be expected to cause an Investor (or its direct or indirect equityholders) to recognize taxable income by reason of the operation of Section 305(b)(2) of the Code. Neither party will, nor will permit their Affiliates to, take a contrary position to the foregoing without the other party's prior written consent unless otherwise required pursuant to (x) a change in Tax law or (y) a final determination within the meaning of Section 1313 of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;Upon any Investor's reasonable request, and to the extent permitted by applicable Law, the Company shall provide a duly executed and correctly completed statement, in accordance with Treasury Regulations Sections 1.897-2(h) and 1.1445-2(c)(3) (or any successor Treasury Regulations thereto), that the Acquired Shares and/or the shares of Common Stock are not a U.S. real property interest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;For so long as any Acquired Shares are outstanding, the Company shall be classified as a corporation for U.S. federal income Tax purposes and shall not take any action that would cause it not to be a domestic corporation for U.S. federal income Tax purposes or that would otherwise cause any Investor to own an interest in an entity that is not a domestic corporation for U.S. federal income Tax purposes, in each case, without the consent of the Apollo Investor, which consent may be withheld in the Apollo Investor's sole discretion.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;The Company shall use commercially reasonable efforts to provide, at the reasonable request of the Investor, an estimate or determination of the amount of the Company's current and accumulated earnings and profits in any taxable year where such estimate or determination is relevant to determining the amount (if any) of any distribution received by the Investor from the Company that is properly treated as a dividend for U.S. federal income tax purposes.

Section 5.10&nbsp;&nbsp;&nbsp;&nbsp;<u>Use of Proceeds; Requirement to Use the Commitment</u>. The Company shall use the proceeds from the issuance and sale of the Acquired Shares to pay for any costs, fees and expenses incurred in connection with the Transactions and to pay a portion of the consideration for Qualifying Acquisitions. Prior to the Commitment Outside Date (including any extension thereof pursuant to this Agreement or otherwise), the Company shall be obligated to use proceeds from the issuance and sale of the Acquired Shares before using the proceeds from any other equity financing sources toward payment of the consideration for such Qualifying Acquisition.

Section 5.11&nbsp;&nbsp;&nbsp;&nbsp;<u>Financing Cooperation</u>. From and after the Closing, if reasonably requested by the Apollo Investor, the Company will provide customary cooperation (with, in each case, all reasonable, documented out-of-pocket expenses, including legal expenses, incurred by the Company in connection with the foregoing, being borne by such Investor) in connection with such Investor or its Affiliates obtaining any Permitted Loan, including with respect to the following: (i) entering into an issuer agreement with each lender in customary form in connection with such transactions (which agreement may include, without limitation, agreements and obligations of the Company relating to procedures and specified time periods for effecting transfers and/or conversions upon Foreclosure, agreements to not hinder or delay exercises of remedies on Foreclosure and certain acknowledgments regarding the pledged shares of Series C Preferred Stock and/or shares of Common Stock issued upon conversion of shares of Series C Preferred Stock and securities law status of the pledge arrangements and a specified list of Competitors (which, for the avoidance of doubt, shall only apply if such transaction is not undertaken in any broadly marketed underwritten offering (including an underwritten block trade) or in unsolicited broker transactions effected pursuant to Rule 144 of the Securities Act), (ii) using commercially reasonable efforts to (A) remove any restrictive legends on certificates representing pledged shares of Series C Preferred Stock and/or shares of Common Stock issued upon conversion of shares of Series C Preferred Stock and depositing any pledged shares of Common Stock issued upon conversion of shares of Series C Preferred Stock in book entry form on the books of DTC, in each case when eligible to do so or otherwise as agreed with the transfer agent or (B) without limiting the generality of clause (A), if such shares of Common Stock are eligible for resale under Rule 144A, depositing such pledged shares of Common Stock in book entry form on the books of DTC or other depository with customary representations and warranties from the applicable Investor or its applicable Affiliates regarding compliance with securities Laws, (iii) if so reasonably requested by such lender or counterparty, as applicable, re-registering on the books and records of the transfer agent the pledged shares of Series C Preferred Stock and/or Common Stock in the name of the relevant lender, agent, counterparty, custodian or similar party to a Permitted Loan, with respect to a Permitted Loan as securities intermediary and only to the extent the applicable Investor (or its or their Affiliates) continue to beneficially own such pledged shares of Series C Preferred Stock and/or Common Stock and (iv) such other cooperation and assistance as the Apollo Investor may reasonably request (which cooperation and assistance, for the avoidance of doubt, shall not include any requirements that the Company deliver information, compliance certificates or any other materials typically provided by borrowers to lenders) that will not unreasonably disrupt the operation of the Company's business. Notwithstanding anything to the contrary in the preceding sentence, the Company's obligation to deliver an issuer agreement is conditioned on the Apollo Investor certifying to the Company in writing, solely with respect to the Permitted Loan obtained by the Apollo Investor that (A) the loan agreement with respect to which the issuer agreement is being delivered constitutes a Permitted Loan being entered into in accordance with this Agreement, the Apollo Investor

------

has pledged the Series C Preferred Stock and/or the underlying shares of Common Stock as collateral to the lenders under such Permitted Loan and that the execution of such Permitted Loan and the terms thereof do not violate the terms of this Agreement and (B) the Apollo Investor acknowledges and agrees that the Company will be relying on such certificate when entering into the issuer agreement and any material inaccuracy in such certificate will be deemed a breach of this Agreement. The Apollo Investor acknowledges and agrees that the statements and agreements of the Company in an issuer agreement are solely for the benefit of the applicable lenders party thereto and that in any dispute between the Company and any Investor under this Agreement the applicable Investor shall not be entitled to use the statements and agreements of the Company in an issuer agreement against the Company.

Section 5.12&nbsp;&nbsp;&nbsp;&nbsp;<u>State Securities Laws</u>. Promptly following the date hereof, the Company shall use its reasonable best efforts to (a) make all filings with the SEC under the Securities Act and Exchange Act related to the execution of the Transaction Documents and the consummation of the transactions contemplated thereby in the time periods required by (including any extensions permitted by) the Securities Act and Exchange Act, as applicable, (b) obtain all necessary permits and qualifications, if any, or secure an exemption therefrom, required by any state or country prior to the offer and sale of Common Stock and/or Series C Preferred Stock and (c) cause such authorization, approval, permit or qualification to be effective as of the Closing and as of any conversion of Series C Preferred Stock; <u>provided</u>, that in connection therewith the Company shall not be required to qualify as a foreign corporation or to file a general consent to service of process in any jurisdiction or subject itself to taxation in any jurisdiction in which it is not otherwise subject to taxation on the date of this Agreement.

Section 5.13&nbsp;&nbsp;&nbsp;&nbsp;<u>Information Rights</u>. For so long as the 50% Beneficial Holding Requirement is satisfied with respect to the Apollo Investor, to the extent requested in writing by the Apollo Investor or any Affiliate holder, the Company agrees promptly to provide the Apollo Investor or such Affiliate holder with (a) the same information and access to members of the Company's management team as provided to lenders under any credit agreement or other similar document or holders of any senior indebtedness of the Company or its Subsidiaries to the extent not publicly disclosed, subject to the Apollo Investor or such Affiliate holder entering into a customary non-disclosure agreement substantially in the form previously entered into with the Company and (b) upon any issuance of any securities by the Company permitted by Section 6.2(a)(ii) of the Certificate of Designations, a certificate of a duly authorized officer setting forth the calculation of the Consolidated Net Total Leverage Ratio (as defined in the Certificate of Designations) for the fiscal period then ended in a form consistent with any certificates provided to public side lenders under any credit agreement or other similar document or holders of any senior indebtedness of the Company or its Subsidiaries to the extent not publicly disclosed. From and after the date hereof, the Company covenants and agrees that neither it, nor any other Person acting on its behalf, will provide any Investor or its agents or counsel with any information that constitutes, or the Company believes constitutes, material non-public information, unless prior thereto such Investor shall have consented to the receipt of such information and agreed with the Company to keep such information confidential. The Company understands and confirms that the Investors shall be relying on the foregoing covenants in effecting transactions in securities of the Company.

Section 5.14&nbsp;&nbsp;&nbsp;&nbsp;<u>Voting Requirements</u>. Each Investor shall take such action as may be required so that all of the shares of Series C Preferred Stock or Common Stock issued upon conversion of shares of Series C Preferred Stock beneficially owned, directly or indirectly, by such Investor and entitled to vote at any meeting of stockholders (and at every postponement or adjournment thereof) are voted (i) in favor of each director nominated or recommended by the Board for election at any such meeting and against the removal of any director who has been elected following nomination or recommendation by the Board, (ii) against any director nominated by a stockholder who has not been recommended for election by the Board, (iii) in favor of the Company's "say-on-pay" proposal and any proposal by the Company relating to equity compensation that has been approved by the Board or the Nominating, Corporate Governance and Sustainability Committee of the Board (or any successor committee, however denominated), (iv) in

------

favor of the Company's proposal for ratification of the appointment of the Company's independent registered public accounting firm, and (v) in accordance with the recommendation of the Board with respect to any amendment or modification of the Company Charter Documents that does not adversely alter or change the rights, powers, preferences or privileges of the holders of any series of the Series C Preferred Stock or otherwise adversely affects such Investor, but no Investor shall be under any obligation to vote in the same manner as recommended by the Board or in any other manner, other than in its sole discretion, with respect to any other matter. In furtherance of the foregoing, each Investor shall take such action as may be required so that such Investor is present, in person or by proxy, at each meeting of the stockholders of the Company and at every postponement or adjournment thereof so that all of the shares of Series C Preferred Stock or Common Stock beneficially owned, directly or indirectly, by such Investor may be counted for the purposes of determining the presence of a quorum and voted in accordance with the terms and conditions of this <u>Section 5.14</u>.

Section 5.15&nbsp;&nbsp;&nbsp;&nbsp;<u>Investors</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;The Company acknowledges on its behalf and on behalf of its Subsidiaries that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;certain of the Investors and their respective Affiliates may be full-service securities or investment firms engaged, either directly or through their respective Affiliates, in various activities, including securities trading, commodities trading, investment management, investment banking, financial advisory, financing, hedging and brokerage activities and financial planning and benefits counseling for both companies and individuals. In the ordinary course of such activities, such Investors and their respective Affiliates may actively engage in commodities trading or trade the debt and equity securities (or related derivative securities) and financial instruments (including bank loans, securities and other obligations) of the Company and other Subsidiaries of the Company for their own account and for the accounts of their customers and may at any time hold long and short positions in such securities and financial instruments. Each Investor or its Affiliates may also co-invest with, make direct investments in, and invest or co-invest client monies in or with funds or other investment vehicles managed by other parties, and such funds or other investment vehicles may trade or make investments in securities of the Company or other Subsidiaries of the Company or engage in commodities trading with any thereof; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;The Investors and their respective Affiliates are involved in a broad range of transactions and may have economic interests that conflict with those of the Company and its Subsidiaries. Nothing in this Agreement or the other Transaction Documents or otherwise will be deemed to create an advisory, fiduciary or agency relationship or fiduciary or other implied duty of the Investors to any of the Company or its Subsidiaries or any Affiliate or equity holder thereof. The transactions and the rights and obligations contemplated by this Agreement are arm's-length commercial transactions and negotiations between the Investors, on the one hand, and the Company on the other hand. In connection with the transactions and the rights and obligations contemplated by this Agreement, each of the Investors is acting solely as a principal and not as agent or fiduciary of any of the Company or its Subsidiaries or any Affiliate thereof or member of management, equity holders or creditors thereof or any other Person. The Investors have not assumed an advisory or fiduciary responsibility or any other obligation in favor of the Company or any of its Subsidiaries with respect to the transactions and the rights and obligations contemplated by this Agreement or the process leading thereto (irrespective of whether any of the Investors or any of their respective Affiliates has advised or is currently advising the Company or any of its Subsidiaries or any of its Affiliates or equity holders on other matters). The Company has consulted its own legal, Tax, accounting, regulatory and financial advisors to the extent it has deemed appropriate. The Company is responsible for making its own independent judgment with respect to the transactions and the rights and obligations contemplated by this Agreement and the process leading thereto. The Company

------

waives, to the fullest extent not prohibited by law, any claims it may have against the Investors or their respective Affiliates (in their capacities as such) for breach of fiduciary duty or alleged breach of fiduciary duty arising out of this Agreement. The Company agrees that none of the Investors or their respective Affiliates shall have any liability (whether direct or indirect) to the Company in respect of such a fiduciary duty claim or to any person asserting a fiduciary duty claim on behalf of or in right of the Company, including the Company's equity holders, employees or creditors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;None of the Investors or any of their respective Affiliates or representatives will have any obligation to use in connection with the matters contemplated by this Agreement, or to furnish to the Company or any of its Subsidiaries or its Affiliates or equity holders, confidential information obtained by them from other Persons.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;The Apollo Investor and the Company hereby agree that, to the maximum extent permitted by Law, when the Apollo Investor takes any action under this Agreement to give or withhold its consent, such Investor shall have no duty (fiduciary or other) to consider the interests of the Company or the other stockholders of the Company and may act exclusively in its own interest; provided, however, that the foregoing shall in no way affect the obligations of the parties hereto to comply with the provisions of this Agreement.

Section 5.16&nbsp;&nbsp;&nbsp;&nbsp;<u>Stockholder Approval</u>. If required by the rules of the NYSE, the Company shall (i) seek Stockholder Approval at the Company's next annual meeting of stockholders or (ii) if such annual meeting is not held by May 31, 2026, schedule a special meeting of stockholders no later than May 31, 2026, for the purpose of obtaining Stockholder Approval, and shall provide to each stockholder entitled to vote at such meeting a proxy statement that shall solicit the affirmative vote of each of the Company's stockholders entitled to vote at such meeting for the Stockholder Approval, and shall include the recommendation of the Board that such proposal be approved. The Company shall solicit proxies from its stockholders in connection therewith in the same manner as all other management proposals in such proxy statement and all management-appointed proxyholders shall vote their proxies in favor of such proposal. The Company shall use its reasonable best efforts to obtain such Stockholder Approval, and request that its officers and directors cast their proxies in favor of such proposal. If the Company has not obtained Stockholder Approval at the stockholder meeting, the Company shall seek Stockholder Approval at each annual meeting until the earlier of the date of Stockholder Approval is obtained or the Series C Preferred Stock that requires Stockholder Approval is no longer outstanding.

Section 5.17&nbsp;&nbsp;&nbsp;&nbsp;<u>Minority Protective Provisions</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Except as required by applicable Law or the regulations or requirements of any stock exchange or regulatory organization applicable to the Company or any of its Subsidiaries or as expressly contemplated, required or permitted by this Agreement from the date of this Agreement through the earlier of (i) the Commitment Outside Date and (ii) the date the Investors have funded the full Investment Amount, the Company and its Subsidiaries shall, (i) use reasonable best efforts to operate their business in the ordinary course, and (ii) unless the Apollo Investor otherwise consents in writing (such consent not to be unreasonably withheld, conditioned or delayed), not take any other action that, if taken following the initial Closing would (A) require the prior written consent of any of the holders of the Series C Preferred Stock pursuant to this Agreement or the Certificate of Designations, or (B) result in an adjustment to the Conversion Price pursuant to the Certificate of Designations unless (in the case of this clause (ii)(B)) such adjustment is effected upon the initial Closing and the issuance of the Series C Preferred Stock pursuant to this Agreement and such adjustments are reflected at such time in accordance with the terms of the Certificate of Designations.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;During the Marketing Period, the Company shall not issue or sell any convertible preferred stock that is pari passu with the Series C Preferred Stock (other than the Series C Preferred Stock).

**ARTICLE VI SURVIVAL AND TERMINATION**

Section 6.01&nbsp;&nbsp;&nbsp;&nbsp;<u>Survival</u>. All of the covenants or other agreements of the parties contained in this Agreement shall survive until fully performed or fulfilled, unless and to the extent that non-compliance with such covenants or agreements is waived in writing by the party entitled to such performance. All representations and warranties contained in this Agreement (including the schedules and the certificates delivered pursuant hereto) will survive until the twelve (12) month anniversary of the final Closing; <u>provided</u>, that the Fundamental Representations shall survive the final Closing for forty-eight (48) months following the Closing; <u>provided</u>, <u>further</u> that nothing herein shall relieve any party of liability for fraud, or for any inaccuracy or breach of such representation or warranty to the extent that any good faith allegation of such inaccuracy or breach is made in writing prior to such expiration by a Person entitled to make such claim pursuant to the terms and conditions of this Agreement. For the avoidance of doubt, claims may be made with respect to the breach of any representation, warranty or covenant until the applicable survival period therefor as described above expires. Notwithstanding anything in this Agreement to the contrary, subject to <u>Section 9.13</u>, (a) each Investor will only be responsible in respect of any breach by itself and not of any other Investor, (b) in no event will any Investor or any of such Investor's Investor Related Parties have any liability (including damages for fraud or breach, whether willful, intentional, unintentional or otherwise (including willful breach) or monetary damages in lieu of specific performance) in the aggregate in excess of the amount of its *pro rata* portion of its Investment Amount, (c) in no event will the Investors and the Investor Related Parties, collectively, have any liability (including damages for fraud or breach, whether willful, intentional, unintentional or otherwise (including willful breach) or monetary damages in lieu of specific performance) in the aggregate in excess of the amount of the Investment Amount and (d) in no event will the Company Related Parties, collectively, have any liability in the aggregate in excess of the amount of the Investment Amount, except in the case of fraud.

Section 6.02&nbsp;&nbsp;&nbsp;&nbsp;<u>Termination</u>. The rights and obligations of the parties in respect of the Closing and the provisions of this Agreement may be terminated at any time prior to the Closing:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;by the mutual written consent of the Company and the Investors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;by the Company and the Apollo Investor, if any Governmental Authority shall have issued a final Judgment restraining, enjoining or otherwise prohibiting the consummation of the Transactions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;with respect to an Investor, by notice given by the Company to such Investor if there have been one or more inaccuracies in or breaches of one or more representations, warranties, covenants or agreements made by such Investor in this Agreement such that the condition to Closing in <u>Section 7.02(a)</u> or <u>Section 7.02(b)</u> would not be satisfied and, if capable of being cured, which have not been cured by such Investor thirty (30) days after receipt by such Investor of written notice from the Company requesting such inaccuracies or breaches to be cured; <u>provided</u>, <u>however</u>, that the Company is not then in material breach of any of its obligations hereunder;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;by notice given by the Apollo Investor to the Company if there have been one or more inaccuracies in or breaches of one or more representations, warranties, covenants or agreements made by the Company in this Agreement such that the condition to Closing in or <u>Section 7.03(a)</u> or <u>Section 7.03(b)</u> would not be satisfied and, if capable of being cured, which have not been cured by the

------

Company thirty (30) days after receipt by the Company of written notice from the Apollo Investor requesting such inaccuracies or breaches to be cured; <u>provided</u>, <u>however</u>, that the Apollo Investor is not then in material breach of any of its obligations hereunder; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;by the Company or the Apollo Investor if the initial Closing Date has not occurred on or before 11:59 p.m. (Eastern Time) on the Commitment Outside Date.

Notwithstanding anything to the contrary in this Agreement, each Investor's obligations to purchase Series C Preferred Stock in the amount of its Unused Investment Amount as of the Commitment Outside Date shall terminate.

Section 6.03&nbsp;&nbsp;&nbsp;&nbsp;<u>Effect of Termination</u>. In the event that this Agreement is terminated in accordance with <u>Section 6.02</u>, no party (nor any of its Affiliates) shall have any liability or obligation to any other party (or any of its Affiliates) under or in respect of this Agreement, except to the extent of (a) any liability arising from any breach by such party of its obligations pursuant to this Agreement arising prior to such termination, (b) expense reimbursement pursuant to <u>Section 9.11</u>, and (c) any actual and intentional fraud or intentional or willful breach of this Agreement. In the event of any such termination, this Agreement shall become void and have no effect, and the transactions contemplated hereby shall be abandoned without further action by the parties, in each case, except (x) as set forth in the preceding sentence and (y) that the provisions of <u>Section 5.04</u>, this <u>Article VI</u> and <u>Article VIII</u>, including <u>Section 9.11</u>, shall survive the termination of this Agreement.

**ARTICLE VII CONDITIONS PRECEDENT**

Section 7.01&nbsp;&nbsp;&nbsp;&nbsp;<u>Conditions to the Effectiveness of each Investor's Commitments</u>. The respective obligations of each Investor to enter into this Agreement and the effectiveness of each Investor's commitment to purchase the number of shares of Series C Preferred Stock set forth opposite its name on Schedule A with respect to such Investor shall be subject to the satisfaction (or waiver by each Investor (with respect to such Investor), if permissible under applicable Law) on or prior to the date hereof of the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Each Investor shall have received from the Company (or its counsel) a counterpart signed by the Company (or written evidence reasonably satisfactory to each Investor (which may include a copy transmitted by email, facsimile or other electronic method) that such party has signed a counterpart) of this Agreement; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;With respect to the Apollo Investor, Apollo shall have received from the Company (or its counsel) a counterpart signed by the Company (or written evidence reasonably satisfactory to each Investor (which may include a copy transmitted by email, facsimile or other electronic method) that such party has signed a counterpart) of each of the AGS Fee Letter and each of the other Transaction Documents to be executed and delivered on the date hereof.

Section 7.02&nbsp;&nbsp;&nbsp;&nbsp;<u>Conditions to the Obligations of the Company and each Investor</u>. The respective obligations of each of the Company and each Investor to effect any Closing with respect to such Investor shall be subject to the satisfaction (or waiver by the Company and each Investor (with respect to such Investor), if permissible under applicable Law) on or prior to such Closing of the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;no temporary or permanent Judgment or Law shall have been enacted, promulgated, issued, entered, amended or enforced by any Governmental Authority nor shall any proceeding brought by a Governmental Authority seeking any of the foregoing be pending, or any applicable Laws shall be in effect, in each case which has the effect of restraining, enjoining or otherwise prohibiting the consummation of the Transactions;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;the waiting period (and any extension thereof) applicable to the consummation of Transactions under the HSR Act and shall have expired or been terminated and all Required Regulatory Approvals have been obtained; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;the Required Regulatory Approvals have been obtained.

Section 7.03&nbsp;&nbsp;&nbsp;&nbsp;<u>Conditions to the Obligations of the Company</u>. The obligations of the Company to effect any Closing with respect to each Investor shall be further subject to the satisfaction (or waiver, if permissible under applicable Law) on or prior to such Closing of the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;with respect to each Investor severally, and not jointly: (i) the representations and warranties of such Investor set forth in <u>Section 4.01</u> and <u>Section 4.02(a)</u> of this Agreement shall be true and correct (disregarding all qualifications or limitations as to "materiality," "Investor Material Adverse Effect" and words of similar import set forth therein) in all material respects as of the date hereof and as of such Closing with the same effect as though made on and as of such Closing (except to the extent expressly made as of an earlier date, in which case as of such earlier date), and (ii) the other representations and warranties set forth in <u>Article IV</u> of this Agreement, other than those listed in the immediately preceding clause (i), shall be true and correct (disregarding all qualifications or limitations as to "materiality," "Investor Material Adverse Effect" and words of similar import set forth therein) as of such Closing with the same effect as though made as of such Closing (except to the extent expressly made as of an earlier date, in which case as of such earlier date), except where the failure to be true and correct would not, individually or in the aggregate, reasonably be expected to have an Investor Material Adverse Effect; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;with respect to each Investor severally, and not jointly, such Investor shall have complied with or performed in all material respects its obligations required to be complied with or performed by it pursuant to this Agreement at or prior to such Closing.

For the avoidance of doubt, the failure for any condition in <u>Section 7.02(a)</u> or <u>Section 7.02(b)</u> to be satisfied with respect to any Investor shall only be with respect to the obligation for the Company to effect such Closing with such Investor and not any other Investor who has otherwise satisfied the conditions in <u>Section 7.02(a)</u> or <u>Section 7.02(b)</u> with respect to itself on or prior to such Closing.

Section 7.04&nbsp;&nbsp;&nbsp;&nbsp;<u>Conditions to the Obligations of each Investor</u>. The obligation of each Investor to effect any Closing with respect to such Investor shall be further subject to the satisfaction (or waiver, if permissible under applicable Laws) on or prior to such Closing of the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;(i) the Fundamental Representations shall be true and correct (disregarding all qualifications or limitations as to "materiality," "Material Adverse Effect" and words of similar import set forth therein) in all material respects as of the date hereof and as of such Closing after giving pro forma effect thereto with the same effect as though made as of such Closing (except to the extent expressly made as of an earlier date, in which case as of such earlier date), (ii) the representations and warranties in <u>Section 3.06</u> of this Agreement shall be true and correct in all respects as of the date hereof and as of such Closing after giving pro forma effect thereto with the same effect as though made as of such Closing, and (iii) the representations and warranties set forth in this Agreement, other than those listed in the immediately preceding clauses (i) and (ii) shall be true and correct (disregarding all qualifications or limitations as to "materiality," "Material Adverse Effect" and words of similar import set forth therein) as of such Closing after giving pro forma effect thereto with the same effect as though made as of such Closing (except to the extent expressly made as of an earlier date, in which case as of such earlier date), except where the failure to be true and correct would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;the Company shall have complied with or performed in all material respects its obligations required to be complied with or performed by it pursuant to this Agreement or any other Transaction Document at or prior to such Closing and the Company shall not be in breach of any of its obligations under any Transaction Document;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;any shares of Common Stock issuable upon conversion of the Series C Preferred Stock (other than any additional shares of Series C Preferred Stock that may be issued as dividends payable in kind) at the Conversion Price specified in the Certificate of Designations as in effect on such Closing Date shall have been approved for listing on the NYSE, to the extent such approval is required by the NYSE;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;each other Investor shall have complied with its obligations under <u>Section 2.02(c)(ii)</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;Each Investor (or its counsel) shall have received, at least three (3) Business Days prior to such Closing Date, (x) all documentation and other information about the Company as has been reasonably requested in writing at least five (5) Business Days prior to such Closing Date by such Investor that is required by regulatory authorities under applicable "know your customer" and anti-money laundering rules and regulations, including without limitation the USA PATRIOT Act and (y) a certification regarding beneficial ownership of the Company as required by the Beneficial Ownership Regulation to the extent requested in writing by such Investor at least five (5) Business Days prior to such Closing Date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;The Qualifying Acquisition shall be consummated substantially concurrently with the Closing; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;Each Investor shall have received all expenses and fees required to be paid by the Company pursuant to the Transaction Documents on or before such Closing Date to the extent due and payable as of such date.

**ARTICLE VIII REGISTRATION RIGHTS**

Section 8.01&nbsp;&nbsp;&nbsp;&nbsp;<u>Registration Rights</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Within 30 days following each Closing Date, the Company agrees to use commercially reasonable efforts to file with the SEC a prospectus supplement pursuant to Rule 424(b) ("<u>Prospectus Supplement</u>") that constitutes part of the Company's effective shelf registration statement on Form S-3ASR (File No. 333-281084) (the "<u>Initial Registration Statement</u>") covering the resale of the Series C Preferred Stock (and shares of Common Stock issuable upon conversion of the Series C Preferred Stock) acquired pursuant to this Investment Agreement (such shares of Series C Preferred Stock and shares of Common Stock and, unless issued in a transaction registered under the Securities Act, any other equity security issued or issuable with respect to such Series C Preferred Stock or Common Stock by way of stock split, dividend, distribution, recapitalization, merger, exchange, replacement or similar event, the "<u>Registrable Shares</u>"); <u>provided</u>, that the Company's obligations to include the Registrable Shares in the Prospectus Supplement are contingent upon each Investor furnishing in writing to the Company such information regarding such Investor or its permitted assigns, the securities of the Company held by each Investor and the intended method of disposition of the Registrable Shares (which shall be limited to non-underwritten public offerings) as shall be reasonably requested by the Company to effect the registration of the Registrable Shares, and each Investor shall execute such documents in connection with such registration as the Company may reasonably request that are customary of a selling

------

stockholder in similar situations; <u>provided</u>, <u>further</u> that each Investor shall not in connection with the foregoing be required to execute any lock-up or similar agreement or otherwise be subject to any contractual restriction on the ability to transfer the Registrable Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;At its expense the Company shall:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;except during any blackout or similar period or for such times as the Company is permitted hereunder to suspend the use of the prospectus forming part of a Registration Statement, use its commercially reasonable efforts to keep such registration, and any qualification, exemption or compliance under state securities laws which the Company determines to obtain, continuously effective with respect to each Investor, to file subsequent shelf registration statements (including any base prospectuses for the sale of the Registrable Shares) in the instance the Initial Registration Statement expires or is otherwise permanently unavailable for use (such subsequent shelf registration statement, together with the Initial Registration Statement, the "<u>Registration Statement</u>") and to keep the applicable Registration Statement free of any material misstatements or omissions, until the earliest of the following: (A) the Investors cease to hold any Registrable Shares and (B) the date all Registrable Shares held by the Investors may be sold without restriction under Rule 144 under the Securities Act. The period of time during which the Company is required hereunder to keep a Registration Statement effective is referred to herein as the "<u>Registration Period</u>";

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;during the Registration Period, promptly advise each Investor:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;&nbsp;&nbsp;when a Registration Statement or any amendment thereto has been filed with the SEC;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;&nbsp;&nbsp;after it shall receive notice or obtain knowledge thereof, of the issuance by the SEC of any stop order suspending the effectiveness of any Registration Statement or the initiation of any proceedings for such purpose;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)&nbsp;&nbsp;&nbsp;&nbsp;of the receipt by the Company of any notification with respect to the suspension of the qualification of the Registrable Shares included therein for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)&nbsp;&nbsp;&nbsp;&nbsp;subject to the provisions in this Investment Agreement, of the occurrence of any event that requires the making of any changes in any Registration Statement or prospectus so that, as of such date, the statements therein are not materially misleading and do not omit to state a material fact required to be stated therein or necessary to make the statements therein (in the case of a prospectus, in the light of the circumstances under which they were made) not misleading. Notwithstanding anything to the contrary set forth herein, the Company shall not, when so advising the Investors of such events, provide the Investors with any material, nonpublic information regarding the Company other than to the extent that providing notice to the Investors of the occurrence of the events listed in (1) through (4) above constitutes material, nonpublic information regarding the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;during the Registration Period, use its commercially reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of any Registration Statement as soon as reasonably practicable;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;&nbsp;&nbsp;during the Registration Period, upon the occurrence of any event contemplated in <u>Section 8.01(b)(ii)(4)</u>, except for such times as the Company is permitted hereunder to suspend the use of a prospectus forming part of a Registration Statement, use its commercially reasonable

------

efforts to, as soon as reasonably practicable, prepare a post-effective amendment to such Registration Statement or a supplement to the related prospectus, or file any other required document so that, as thereafter delivered to purchasers of the Registrable Shares included therein, such prospectus will not include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;&nbsp;&nbsp;during the Registration Period, use its commercially reasonable efforts to cause all Registrable Shares to be listed on the national securities exchange on which the Common Stock is then listed; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)&nbsp;&nbsp;&nbsp;&nbsp;during the Registration Period, use its commercially reasonable efforts to allow each Investor to review disclosure regarding such Investor in the Prospectus Supplement or Registration Statement, as applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding anything to the contrary in this Investment Agreement, the Company shall be entitled to delay the filing or effectiveness of, or terminate or suspend the use of, the Registration Statement (or any prospectus therein) if (i) it determines that in order for the Registration Statement not to contain a material misstatement or omission, (A) an amendment thereto would be needed to include information that would at that time not otherwise be required in a current, quarterly or annual report under the Exchange Act, or (B) the negotiation or consummation of a transaction by the Company or its affiliates is contemplated or pending or an event has occurred, which negotiation, consummation or event that the Company reasonably believes would require additional disclosure by the Company in the Registration Statement of material information that the Company has a bona fide business purpose for keeping confidential and the non-disclosure of which in the Registration Statement would be expected, in the reasonable judgment of the Company to cause the Registration Statement to fail to comply with applicable disclosure requirements, or (ii) in the good faith judgment of the Company, such filing or effectiveness or use of such Registration Statement would (1) be detrimental to the Company, any contemplated or pending mergers, acquisitions, consolidations or other similar transactions or issuances of Company securities or any transaction currently proposed by or under consideration by the Company or (2) would require the disclosure of material non-public information concerning the Company that at the time is not, in the good faith judgment of the Company, in the best interests of the Company to disclose and is not otherwise required to be disclosed, and in either case, the Company concludes as a result to defer such filing or terminate or suspend the use of such Registration Statement (or any prospectus included therein) (each such circumstance, a "<u>Suspension Event</u>"); <u>provided</u> that the Company may not delay or suspend the Registration Statement on more than three occasions or for more than 45 consecutive calendar days, or more than 90 total calendar days, in each case during any 12 month period. Upon receipt of any written notice from the Company of the happening of any Suspension Event during the period that the Registration Statement is effective or if as a result of a Suspension Event the Registration Statement or related prospectus contains any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein (in light of the circumstances under which they were made, in the case of the prospectus) not misleading, each Investor agrees that (I) it will immediately discontinue offers and sales of the Registrable Shares under the Registration Statement (until such Investor receives copies of a supplemental or amended prospectus that corrects the misstatement(s) or omission(s) referred to above and receives notice that any post-effective amendment has become effective or unless otherwise notified by the Company that it may resume such offers and sales) and (II) it will maintain the confidentiality of any information included in such written notice delivered by the Company unless otherwise required by law or subpoena. If so directed by the Company, an Investor will deliver to the Company or, in such Investor's sole discretion destroy, all copies of the prospectus covering the Registrable Shares in the Investor's possession; <u>provided</u>, that this obligation to

------

deliver or destroy all copies of the prospectus covering the Registrable Shares shall not apply (A) to the extent an Investor is required to retain a copy of such prospectus (1) in order to comply with applicable legal, regulatory, self-regulatory or professional requirements or (2) in accordance with a bona fide pre-existing document retention policy or (B) to copies stored electronically on archival servers as a result of automatic data back-up.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;Following such time as Rule 144 under the Securities Act is available, with a view to making available to the Investors the benefits of Rule 144, the Company agrees, for so long as such Investor holds the Acquired Shares purchased pursuant to this Investment Agreement, to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;make and keep public information available, as those terms are understood and defined in Rule 144;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act so long as the Company remains subject to such requirements and the filing of such reports and other documents is required for the applicable provisions of Rule 144; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;assist (including by causing the delivery of any necessary opinions and certificates) in the removal of any legends on the shares Series C Series C Preferred Stock (and shares of Common Stock issuable upon conversion of the Series C Preferred Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;Indemnification:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;The Company agrees to indemnify, to the extent permitted by applicable law, each Investor (to the extent a seller under the Registration Statement or Prospectus Supplement, as applicable), its directors and officers and each person who controls the Investor (within the meaning of the Securities Act), to the extent permitted by applicable law, against all losses, claims, damages, liabilities and reasonable and documented out-of-pocket expenses (including reasonable and documented outside attorneys' fees of one law firm (and one firm of local counsel)) caused by any untrue or alleged untrue statement of material fact contained in any Registration Statement, prospectus included in any Registration Statement ("Prospectus") or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of a Prospectus, in the light of the circumstances under which they were made) not misleading, except insofar as the same are caused by or contained in any information or affidavit so furnished in writing to the Company by or on behalf of such Investor expressly for use therein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;In connection with any Registration Statement in which an Investor is participating, each Investor shall furnish (or cause to be furnished) to the Company in writing such information and affidavits as the Company reasonably requests for use in connection with any such Registration Statement or Prospectus and, to the extent permitted by applicable law, shall indemnify the Company, its directors and officers and each person or entity who controls the Company (within the meaning of the Securities Act) against any losses, claims, damages, liabilities and expenses (including, without limitation, reasonable and documented outside attorneys' fees) resulting from any untrue or alleged untrue statement of material fact contained or incorporated by reference in any Registration Statement, Prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of a Prospectus, in the light of the circumstances under which they were made) not misleading, but only to the extent that such untrue statement or omission is contained (or not contained in, in the case of

------

an omission) in any information or affidavit so furnished in writing by on behalf of such Investor expressly for use therein; provided, that the liability of such Investor shall be several and not joint with any other investor and shall be in proportion to and limited to the net proceeds received by such Investor from the sale of Registrable Shares giving rise to such indemnification obligation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;Any person or entity entitled to indemnification herein shall (A) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification (<u>provided</u> that the failure to give prompt notice shall not impair any person's or entity's right to indemnification hereunder to the extent such failure has not prejudiced the indemnifying party) and (B) unless in such indemnified party's reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist with respect to such claim, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party. If such defense is assumed, the indemnifying party shall not be subject to any liability for any settlement made by the indemnified party without its consent (but such consent shall not be unreasonably withheld). An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim shall not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to such claim. No indemnifying party shall, without the consent of the indemnified party, consent to the entry of any judgment or enter into any settlement which cannot be settled in all respects by the payment of money (and such money is so paid by the indemnifying party pursuant to the terms of such settlement) or which settlement includes a statement or admission of fault and culpability on the part of such indemnified party or which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;&nbsp;&nbsp;The indemnification provided for under this Investment Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director or controlling person or entity of such indemnified party and shall survive the transfer of the Acquired Shares purchased pursuant to this Investment Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;&nbsp;&nbsp;If the indemnification provided under this <u>Section 8.01(e)</u> from the indemnifying party is unavailable or insufficient to hold harmless an indemnified party in respect of any losses, claims, damages, liabilities and expenses referred to herein, then the indemnifying party, in lieu of indemnifying the indemnified party, shall contribute to the amount paid or payable by the indemnified party as a result of such losses, claims, damages, liabilities and expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying party and the indemnified party, as well as any other relevant equitable considerations; <u>provided</u>, that the liability of each Investor shall be limited to the net proceeds received by such Investor from the sale of Registrable Shares giving rise to such indemnification obligation. The relative fault of the indemnifying party and indemnified party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, was made by (or not made by, in the case of an omission), or relates to information supplied by (or not supplied by, in the case of an omission), such indemnifying party or indemnified party, and the indemnifying party's and indemnified party's relative intent, knowledge, access to information and opportunity to correct or prevent such action. The amount paid or payable by a party as a result of the losses or other liabilities referred to above shall be deemed to include, subject to the limitations set forth in Sections 8.01(e)(i), (ii) and (iii) above, any legal or other fees, charges or expenses reasonably incurred by such party in connection with any investigation or proceeding. No person guilty of fraudulent

------

misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution pursuant to this <u>Section 8.01(e)(v)</u> from any person or entity who was not guilty of such fraudulent misrepresentation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;Underwritten Shelf Take-Downs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;if the Apollo Investor becomes an Affiliate of the Company, and so long as the Apollo Investor remains an Affiliate of the Company, the Apollo Investor may elect in a written request delivered to the Company (an "<u>Underwritten Shelf Take-Down Notice</u>"), for an offering or sale of all or part of such Registrable Shares (a "<u>Shelf Take-Down</u>") to be in the form of an underwritten offering (an "<u>Underwritten Shelf Take-Down</u>") and, if necessary, the Company shall use its reasonable best efforts to (i) file and effect an amendment or supplement to its Registration Statement for such purpose as promptly as reasonably practicable and (ii) assist in the marketing and diligence process (including causing its auditor to provide a customary "comfort letter" and its counsel to provide customary closing opinions and negative assurance letters) relating to such offering. The Apollo Investor shall indicate in such Underwritten Shelf Take-Down Notice the number or amount of Registrable Shares to be included in such Underwritten Shelf Take-Down and whether it intends for such Underwritten Shelf Take-Down to involve a customary "road show" (including an "electronic road show") or other marketing effort by the underwriters (a "<u>Marketed Underwritten Shelf Take-Down</u>"). Notwithstanding the foregoing, the Apollo Investor may not, without the Company's prior written consent, (i) request an Underwritten Shelf Take-Down the anticipated gross proceeds of which shall be less than $200.0 million, (ii) request more than two Underwritten Shelf Take-Downs within any twelve month period, (iii) request an Underwritten Shelf Take-Down within 60 days of any other Underwritten Shelf Take-Downs or (iv) request an Underwritten Shelf Take-Down within the period commencing 14 days prior to and ending two Business Days following the Company's scheduled earnings release date for any fiscal quarter or year (or such shorter period as is the Company's customary "blackout window" applicable to directors and officers).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;if the managing underwriter or underwriters of a Marketed Underwritten Shelf Take-Down advise the Company in their good faith opinion that the inclusion of all such Registrable Shares proposed to be included in such offering would be reasonably likely to interfere with the successful marketing, including, but not limited to, the pricing, timing or distribution, of the Registrable Shares to be offered thereby or in such Marketed Underwritten Shelf Take-Down, then the number of Registrable Shares proposed to be included in such Marketed Underwritten Shelf Take-Down shall be allocated among the Company, the Apollo Investor and all other persons in such offering in the following order:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;&nbsp;&nbsp;first, the Registrable Shares of the class or classes proposed to be registered held by the Apollo Investor;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;&nbsp;&nbsp;second, all other securities of the same class or classes requested to be included in such offering other than securities to be sold by the Company; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)&nbsp;&nbsp;&nbsp;&nbsp;third, the securities of the same class or classes to be sold by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;No Registrable Shares excluded from an underwriting by reason of the underwriter's marketing limitation shall be included in the Marketed Underwritten Shelf Take-Down. If the underwriter has not limited the number of Registrable Shares to be underwritten, the Company may

------

include securities for its own account (or for the account of any other Persons) in such registration if the underwriter so agrees and if the number of Registrable Shares would not thereby be limited.

**ARTICLE IX MISCELLANEOUS**

Section 9.01&nbsp;&nbsp;&nbsp;&nbsp;<u>Amendments; Waivers</u>. Subject to compliance with applicable Law, this Agreement may be amended or supplemented in any and all respects only by written agreement of the Company and the holders of a majority of outstanding shares of Series C Preferred Stock or the holders of a majority of the commitments to purchase such shares of Series C Preferred Stock, as applicable, which shall at all times include the Apollo Investor prior to the Commitment Outside Date, and thereafter, so long as, with respect to the Apollo Investor's consent, the Apollo Investor satisfies the 50% Beneficial Holding Requirement at such time. Notwithstanding the foregoing or anything contrary herein, prior to the Commitment Outside Date, this Agreement (including the Exhibits hereto) may be amended or supplemented with the prior written consent of the Company and the Apollo Investor so long as any such amendment or supplement does not adversely and disproportionately affect any Investor.

Section 9.02&nbsp;&nbsp;&nbsp;&nbsp;<u>Extension of Time, Waiver, Etc.</u> The Company and any Investor may, subject to applicable Law, (a) waive any inaccuracies in the representations and warranties of the other party contained herein or in any document delivered pursuant hereto, (b) extend the time for the performance of any of the obligations or acts of the other party or (c) waive compliance by the other party with any of the agreements contained herein applicable to such party or, except as otherwise provided herein, waive any of such party's conditions. Notwithstanding the foregoing, no failure or delay by the Company or any Investor in exercising any right hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right hereunder. Any agreement on the part of a party hereto to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party.

Section 9.03&nbsp;&nbsp;&nbsp;&nbsp;<u>Assignment</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned, in whole or in part, by operation of Laws or otherwise, by any of the parties hereto without the prior written consent of the other parties hereto; <u>provided</u>, <u>however</u>, that (A) without the prior written consent of the Company, any Investor may assign its rights, interests and obligations set forth in this Agreement, in whole or in part, to one or more Investor Transferees so long as the assignee shall agree in writing to be bound by the provisions of this Agreement, including the rights, interests and obligations so assigned, (B) the Apollo Investor may assign its rights, interests and obligations set forth in this Agreement, in whole or in part, in accordance with <u>Section 2.04(b)</u>, (C) without the prior written consent of the Company, an Investor may grant a security interest in its respective rights (but not its obligations) under this Agreement in connection any Permitted Loan and (D) if the Company consolidates or merges with or into any Person and the Common Stock is, in whole or in part, converted into or exchanged for securities of a different issuer in a transaction that does not constitute a Fundamental Change, then as a condition to such transaction the Company will cause such issuer to assume all of the Company's rights and obligations under this Agreement in a written instrument delivered to such Investor; <u>provided</u> <u>further</u> that no such assignment under clause (A) or (B) above will relieve the Investor of its obligations hereunder prior to Closing in the event that any Investor does not comply with its obligations. Subject to the immediately preceding sentence, this Agreement shall be binding upon, inure to the benefit of, and be enforceable by, the parties hereto and their respective successors and permitted assigns.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Each Investor understands and agrees that the rights set forth under <u>Section 5.01</u>, <u>Section 5.03</u>, <u>Section 5.11</u> and <u>Section 5.13</u> (collectively, the "<u>Initial Investor Rights</u>") shall inure solely to the benefit of any Investor and, notwithstanding anything in this Agreement to the contrary, an Investor

------

shall not Transfer or assign, in whole or in part, by operation of Laws or otherwise, any or all of the Initial Investor Rights to any Person (other than an Investor Transferee as otherwise permitted by this Agreement).

Section 9.04&nbsp;&nbsp;&nbsp;&nbsp;<u>Counterparts</u>. This Agreement may be executed in one or more counterparts (including by electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com)), each of which shall be deemed to be an original but all of which taken together shall constitute one and the same agreement, and shall become effective when one or more counterparts have been signed by each of the parties hereto and delivered to the other parties hereto.

Section 9.05&nbsp;&nbsp;&nbsp;&nbsp;<u>Entire Agreement; No Third-Party Beneficiaries</u>. This Agreement, including the Non-Disclosure Agreements, the other Transaction Documents and the Certificate of Designations, constitutes the entire agreement, and supersedes all other prior agreements and understandings, both written and oral, among the parties and their Affiliates, or any of them, with respect to the subject matter hereof and thereof. No provision of this Agreement shall confer upon any Person other than the parties hereto and their permitted assigns any rights or remedies hereunder; <u>provided</u>, <u>Section 9.13</u> shall be for the benefit of and fully enforceable by each of the Investor Related Parties and any placement agent acting on behalf of the Company (including Goldman, Morgan Stanley and J.P. Morgan) and such placement agent's directors, officers, employees, representatives and controlling persons shall be entitled to rely on <u>Section 4.05</u>, <u>Section 4.07</u> and <u>Section 9.15</u>.

Section 9.06&nbsp;&nbsp;&nbsp;&nbsp;<u>Governing Law; Jurisdiction</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware applicable to contracts executed in and to be performed entirely within that State, regardless of the laws that might otherwise govern under any applicable conflict of Laws principles.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;All Actions arising out of or relating to this Agreement shall be heard and determined in the Chancery Court of the State of Delaware (or, if the Chancery Court of the State of Delaware declines to accept jurisdiction over any Action, any state or federal court within the State of Delaware) and the parties hereto hereby irrevocably submit to the exclusive jurisdiction and venue of such courts in any such Action and irrevocably waive the defense of an inconvenient forum or lack of jurisdiction to the maintenance of any such Action. The consents to jurisdiction and venue set forth in this <u>Section 9.06</u> shall not constitute general consents to service of process in the State of Delaware and shall have no effect for any purpose except as provided in this paragraph and shall not be deemed to confer rights on any Person other than the parties hereto. Each party hereto agrees that service of process upon such party in any Action arising out of or relating to this Agreement shall be effective if notice is given by overnight courier at the address set forth in <u>Section 9.09</u> of this Agreement. The parties hereto agree that a final judgment in any such Action shall be conclusive and may be enforced in other jurisdictions by lawsuit on the judgment or in any other manner provided by applicable Law; <u>provided</u>, <u>however</u>, that nothing in the foregoing shall restrict any party's rights to seek any post-judgment relief regarding, or any appeal from, a final trial court judgment.

Section 9.07&nbsp;&nbsp;&nbsp;&nbsp;<u>Specific Enforcement</u>. The Investors shall have all remedies available at law or in equity for a breach of this Agreement, including the right to seek specific performance. The parties hereto agree that irreparable damage for which monetary relief, even if available, would not be an adequate remedy, would occur in the event that any provision of this Agreement is not performed in accordance with its specific terms or is otherwise breached. The parties acknowledge and agree that (a) the parties shall be entitled to seek an injunction or injunctions, specific performance or other equitable relief to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in the courts described in <u>Section 9.06</u> without proof of damages or otherwise (in each case, subject to the

------

terms and conditions of this <u>Section 9.07</u>), this being in addition to any other remedy to which they are entitled under this Agreement and (b) the right of specific enforcement is an integral part of the Transactions and without that right, none of the Company or any Investor would have entered into this Agreement. The parties hereto agree not to assert that a remedy of specific enforcement is unenforceable, invalid, contrary to Laws or inequitable for any reason, and agree not to assert that a remedy of monetary damages would provide an adequate remedy or that the parties otherwise have an adequate remedy at law. The parties hereto acknowledge and agree that any party seeking an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in accordance with this <u>Section 9.07</u> shall not be required to provide any bond or other security in connection with any such order or injunction.

Section 9.08&nbsp;&nbsp;&nbsp;&nbsp;<u>Waiver of Jury Trial</u>. Each party hereto acknowledges and agrees that any controversy which may arise under this Agreement is likely to involve complicated and difficult issues, and therefore it hereby irrevocably and unconditionally waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any litigation directly or indirectly arising out of or relating to this Agreement and any of the agreements delivered in connection herewith or the Transactions contemplated hereby or thereby. Each party certifies and acknowledges that (a) no representative, agent or attorney of any other party has represented, expressly or otherwise, that such other party would not, in the event of litigation, seek to enforce the foregoing waiver, (b) it understands and has considered the implications of such waiver, (c) it makes such waiver voluntarily and (d) it has been induced to enter into this Agreement by, among other things, the mutual waiver and certifications in this <u>Section 9.08</u>.

Section 9.09&nbsp;&nbsp;&nbsp;&nbsp;<u>Notices</u>. All notices, requests and other communications to any party hereunder shall be in writing and shall be deemed given if delivered personally, emailed (which is confirmed) or sent by overnight courier (providing proof of delivery) to the parties at the following addresses:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;If to the Company, to it at:

QXO, Inc.

Five American Lane

Greenwich, Connecticut 06831

Attention: Chris Signorello, Chief Legal Officer

Email: Chris.Signorello@qxo.com

with a copy to (which shall not constitute notice):

Paul, Weiss, Rifkind, Wharton & Garrison LLP

1285 Avenue of the Americas

New York, NY 10019

Attention: David S. Huntington; David E. Sobel

Email: dhuntington@paulweiss.com; dsobel@paulweiss.com

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;If to the Apollo Investor, to the Apollo Investor at:

AP Quince Holdings, L.P.

c/o AP Quince Holdings GP, LLC

9 West 57<sup>th</sup> Street, 42<sup>nd</sup> Floor

New York, NY 10019

Attention: William B. Kuesel; Jeff Armstrong; Michael Lotito

E-mail: bkuesel@apollo.com; jarmstrong@apollo.com; mlotito@apollo.com

------

with a copy to (which will not constitute notice):

White & Case LLP

1221 Avenue of the Americas<br>New York, NY 10020

Attention: Brenda Dieck; Drew Valentine

E-mail: bdieck@whitecase.com; drew.valentine@whitecase.com

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;If to any other Investor, to such Investor at the address included on such Investor's signature page hereto or in the applicable joinder agreement;

or such other address or email address as such party may hereafter specify by like notice to the other parties hereto. All such notices, requests and other communications shall be deemed received on the date of actual receipt by the recipient thereof if received prior to 5:00 p.m. local time in the place of receipt and such day is a Business Day in the place of receipt. Otherwise, any such notice, request or communication shall be deemed not to have been received until the next succeeding Business Day in the place of receipt.

Section 9.10&nbsp;&nbsp;&nbsp;&nbsp;<u>Severability</u>. If any term, condition or other provision of this Agreement is determined by a court of competent jurisdiction to be invalid, illegal or incapable of being enforced by any rule of Laws or public policy, all other terms, provisions and conditions of this Agreement shall nevertheless remain in full force and effect. Upon such determination that any term, condition or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible to the fullest extent permitted by applicable Law.

Section 9.11&nbsp;&nbsp;&nbsp;&nbsp;<u>Expenses</u>. Except as otherwise expressly provided herein or in any other Transaction Document, all costs and expenses, including fees and disbursements of counsel, financial advisors and accountants, incurred in connection with this Agreement and the Transactions shall be paid by the party incurring such costs and expenses; <u>provided</u>, that no later than 10 Business Days following each of the date hereof and each Closing Date, the Company shall reimburse the Apollo Investor for all reasonable and documented expenses incurred in connection with the Transactions at such time, including the reasonable and documented fees and expenses of White & Case LLP, as counsel to Apollo, in an amount not to exceed, in the aggregate, $2.0 million.

Section 9.12&nbsp;&nbsp;&nbsp;&nbsp;<u>Interpretation</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;When a reference is made in this Agreement to an Article, a Section, Exhibit or Schedule, such reference shall be to an Article of, a Section of, or an Exhibit or Schedule to, this Agreement unless otherwise indicated. The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Where a reference is made in this Agreement to the "Apollo Investor" that satisfies the 50% Beneficial Holding Requirement, if such "Apollo Investor" consists of more than one Person, the beneficial ownership required under the definition of the "50% Beneficial Holding Requirement" shall count in the aggregate all such Persons constituting the "Apollo Investor" including any Apollo Affiliate holder. Where a reference is made in this Agreement to the consent or approval of the "Apollo Investor," if there is more than one Apollo Investor, such consent or approval shall be the consent or approval of the Apollo Investors holding a majority of outstanding shares of Series C Preferred Stock or the holders of a majority of the allocations for such shares of Series C Preferred Stock, as applicable, held by such Apollo Investors. Whenever the words "<u>include</u>", "<u>includes</u>" or "<u>including</u>" are used in this Agreement, they shall be deemed to be followed by the words "<u>without limitation</u>". Whenever the words "<u>ordinary course</u> 

------

<u>of business</u>" are used in this Agreement, they shall be deemed to be followed by the words "<u>consistent with past practice</u>". The words "<u>hereof</u>", "<u>herein</u>" and "<u>hereunder</u>" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement unless the context requires otherwise. The words "<u>date hereof</u>" when used in this Agreement shall refer to the date of this Agreement. The terms "<u>or</u>", "<u>any</u>" and "<u>either</u>" are not exclusive. The word "<u>extent</u>" in the phrase "<u>to the extent</u>" shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply "<u>if</u>". The word "<u>will</u>" shall be constructed to have the same meaning and affect as the word "<u>shall</u>". The words "<u>made available to the Investor</u>" and words of similar import refer to documents (A) posted to the virtual dataroom by or on behalf of the Company or (B) delivered in Person or electronically to the Investor or its respective Representatives, in each case no later than two Business Days prior to the date hereof. All accounting terms used and not defined herein shall have the respective meanings given to them under GAAP. All terms defined in this Agreement shall have the defined meanings when used in any document made or delivered pursuant hereto unless otherwise defined therein. The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such term. In the event that the Common Stock is listed on a national securities exchange other than the NYSE, all references herein to the NYSE shall be deemed to be references to such other national securities exchange. Any agreement, instrument or statute defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument or statute as from time to time amended, modified or supplemented, including (in the case of agreements or instruments) by waiver or consent and (in the case of statutes) by succession of comparable successor statutes and references to all attachments thereto and instruments incorporated therein. Unless otherwise specifically indicated, all references to "<u>dollars</u>" or "<u>$</u>" shall refer to the lawful money of the United States. References to a Person are also to its permitted assigns and successors. When calculating the period of time between which, within which or following which any act is to be done or step taken pursuant to this Agreement, the date that is the reference date in calculating such period shall be excluded (unless, otherwise required by Law, if the last day of such period is not a Business Day, the period in question shall end on the next succeeding Business Day).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;The parties hereto have participated jointly in the negotiation and drafting of this Agreement and, in the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as jointly drafted by the parties hereto and no presumption or burden of proof shall arise favoring or disfavoring any party hereto by virtue of the authorship of any provision of this Agreement.

Section 9.13&nbsp;&nbsp;&nbsp;&nbsp;<u>Non-Recourse</u>. Each party hereto agrees, on behalf of itself and its Affiliates and its and their present or former directors, officers, stockholders, partners, members or employees, that all Actions, claims, obligations, liabilities or causes of action (whether in Contract or in tort, in Laws or in equity or otherwise, or granted by statute or otherwise, whether by or through attempted piercing of the corporate, limited partnership or limited liability company veil or any other theory or doctrine, including alter ego or otherwise) that may be based upon, in respect of, arise under, out or by reason of, be connected with, or relate in any manner to: (A) this Agreement or any other Transaction Document, or any of the transactions contemplated hereunder or thereunder, (B) the negotiation, execution or performance of this Agreement or any of the other Transaction Documents (including any representation or warranty made in, in connection with, or as an inducement to, this Agreement or any of the other Transaction Documents), (C) any breach or violation of this Agreement or any other of the other Transaction Documents and (D) any failure of any of the transactions contemplated hereunder or under any of the other Transaction Documents or any other agreement referenced herein or therein to be consummated, in each case, may be made only against (and are those solely of) the Persons that are, in the

------

case of this Agreement, expressly identified as parties to this Agreement or, in the case of any of the other Transaction Documents, Persons that are expressly identified as parties to such other Transaction Documents and in accordance with, and subject to the terms and conditions of this Agreement or such other Transaction Documents, as applicable. In furtherance and not in limitation of the foregoing and notwithstanding anything contained in this Agreement or any of the other Transaction Documents to the contrary and without limiting the foregoing or any other agreement referenced herein or therein or otherwise to the contrary, each party hereto covenants, agrees and acknowledges on behalf of itself and its respective Affiliates and its and their present or former directors, officers, stockholders, partners, members or employees, that no recourse under this Agreement or any of the other Transaction Documents or in connection with any of the transactions contemplated hereunder or thereunder shall be sought or had against any other Person, including any Investor Related Party, and no other Person, including any Investor Related Party, shall have any liabilities or obligations (whether in Contract or in tort, in Law or in equity or otherwise, or granted by statute or otherwise, whether by or through attempted piercing of the corporate, limited partnership or limited liability company veil or any other theory or doctrine, including alter ego or otherwise) for any claims, causes of action, obligations or liabilities arising under, out of, in connection with or related in any manner to the items in the immediately preceding clauses (A) through (D), it being expressly agreed and acknowledged that no personal liability or losses whatsoever shall attach to, be imposed on or otherwise be incurred by any of the aforementioned, as such, arising under, out of, in connection with or related in any manner to the items in the immediately preceding clauses (A) through (D), in each case, except for claims that the Company or any Investor, as applicable, may assert: (i) against any Person that is party to and solely pursuant to the terms and conditions of, the Non-Disclosure Agreement or (ii) against any Investor solely in accordance with, and pursuant to the terms and conditions of, this Agreement. Notwithstanding anything to the contrary in this Agreement or any of the other Transaction Documents or otherwise, no party hereto or any Investor Related Party shall be responsible or liable for any multiple, consequential, indirect, special, statutory, exemplary or punitive damages or lost profits, opportunity costs, loss of business reputation, diminution in value or damages based upon a multiple of earnings or similar financial measure which may be alleged as a result of this Agreement or any of the other Transaction Documents or any of the transactions contemplated hereunder or thereunder, or the termination or abandonment of any of the foregoing; <u>provided</u>, <u>however</u> that nothing in this sentence shall limit an Investor's right to sue for specific performance under <u>Section 9.07</u> hereof or otherwise sue for a breach of <u>Section 5.10</u> hereof.

Section 9.14&nbsp;&nbsp;&nbsp;&nbsp;<u>Not a Group; Independent Nature of Investors' Obligations and Rights</u>. Each Investor and the Company agree that the arrangements contemplated by this Agreement are not intended to constitute the formation of a "group" (as defined in Section 13(d)(3) of the Exchange Act). Each Investor agrees that, for purposes of determining beneficial ownership of such Investor and its Investor Transferees, it shall disclaim any beneficial ownership by virtue of this Agreement of any Acquired Shares owned by the other Investors (other than such Investor's Investor Transferees), and the Company agrees to recognize such disclaimer in its Exchange Act and Securities Act reports. The obligations of each Investor under this Agreement are several and not joint with the obligations of any other Investor, and no Investor shall be responsible in any way for the performance of the obligations of any other Investor under this Agreement. Nothing contained herein, and no action taken by any Investor pursuant hereto, shall be deemed to constitute the Investors as, and the Company acknowledges that the Investors do not so constitute, a partnership, an association, a joint venture or any other kind of group or entity, or create a presumption that the Investors are in any way acting in concert or as a group or entity with respect to such obligations or the transactions contemplated by this Agreement, and the Company acknowledges that the Investors are not acting in concert or as a group by virtue of this Agreement, and the Company shall not assert any such claim, with respect to such obligations or the transactions contemplated by this Agreement. Each Investor shall be entitled to independently protect and enforce its

------

rights, including, without limitation, the rights arising out of this Agreement, and it shall not be necessary for any other Investor to be joined as an additional party in any proceeding for such purpose.

Section 9.15&nbsp;&nbsp;&nbsp;&nbsp;<u>Placement Agents</u>. Each Investor, severally but not jointly, acknowledges that (a) each of Goldman, Morgan Stanley and J.P. Morgan is acting as a placement agent on behalf of the Company and is not acting as an underwriter or in any other capacity and is not and shall not be construed as a fiduciary for any Investor, the Company or any other person or entity in connection with the Transactions, (b) Goldman, Morgan Stanley and J.P. Morgan has not made and will not make any representation or warranty, whether express or implied, of any kind or character and has not provided any advice or recommendation in connection with the Transactions, (c) Goldman, Morgan Stanley and J.P. Morgan will have no responsibility with respect to (i) any representations, warranties or agreements made by any person or entity under or in connection with the Transactions or any of the documents furnished pursuant thereto or in connection therewith, or the execution, legality, validity or enforceability (with respect to any person) or any thereof, or (ii) the business, affairs, financial condition, operations, properties or prospects of, or any other matter concerning the Company or the Transactions, and (d) Goldman, Morgan Stanley and J.P. Morgan shall not have any liability or obligation (including without limitation, for or with respect to any losses, claims, damages, obligations, penalties, judgments, awards, liabilities, costs, expenses or disbursements incurred by any Investor, the Company or any other person or entity), whether in contract, tort or otherwise, to such Investor, or to any person claiming through such Investor, in respect of the Transactions.

[*Remainder of page intentionally left blank*]

------

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the date first above written.

**COMPANY:**

**QXO, INC.**

By:&nbsp;&nbsp;&nbsp;&nbsp;<u>/s/ Ihsan Essaid&nbsp;&nbsp;&nbsp;&nbsp;</u><br>Name: Ihsan Essaid<br>Title: Chief Financial Officer

[*Signature Page to Investment Agreement*]

------

**APOLLO INVESTOR:**

**AP QUINCE HOLDINGS, L.P.**

By: AP Quince Holdings GP, LLC, its general partner

By:&nbsp;&nbsp;&nbsp;&nbsp;<u>/s/ Michael F. Lotito&nbsp;&nbsp;&nbsp;&nbsp;</u><br>Name: Michael F. Lotito<br>Title: Vice President

[*Signature Page to Investment Agreement*]

------

**FRANKLIN ADVISER, INC.**, as investment manager on behalf of certain funds and accounts

By:&nbsp;&nbsp;&nbsp;&nbsp;<u>/s/ Brendan Circle&nbsp;&nbsp;&nbsp;&nbsp;</u><br>Name: Brendan Circle<br>Title: Senior Vice President

[*Signature Page to Investment Agreement*]

------

<u>Schedule A</u>

<u>ACQUIRED SHARES</u>

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Name** | **Initial Number of Acquired Shares** | **Initial Investment Amount** | **Additional Post-Signing Number of Acquired Shares** | **Total Investment Amount** |
| AP QUINCE HOLDINGS, L.P. | 84500 | $845000000 |  | $845000000 |
| FRANKLIN ADVISER, INC. | 30000 | $300000000 |  | $300000000 |
| **TOTAL** | **114500** | **$1145000000** | **—** | **$1145000000** |

---

------

<u>Exhibit A-1</u>

<u>FORM OF<br>JOINDER TO INVESTMENT AGREEMENT</u>

Reference is made to the Investment Agreement, dated as of January 5, 2026 (the "<u>Agreement</u>"), by and among: (i) QXO, Inc., a Delaware corporation, and (ii) the other Investors party thereto. Capitalized terms used in this Joinder but not otherwise defined herein shall be defined as set forth in the Agreement.

Effective immediately upon executing this Joinder, the undersigned hereby acknowledges and agrees (i) to become a party to, and to be bound by and comply with the applicable provisions of, the Agreement, as a "Post-Signing Investor" and (ii) that the undersigned shall be deemed to have made the representations and warranties set forth in Article IV of the Agreement to the Company.

<u>&nbsp;&nbsp;&nbsp;&nbsp;</u>

[NAME]

Acquired Shares: [●]

Aggregate Investment Amount: $[●]

Dated: [DATE]

Address for notices (including email):

[ADDRESS]

Acknowledged and agreed:

QXO, INC.<br>

By:&nbsp;&nbsp;&nbsp;&nbsp;<u>&nbsp;&nbsp;&nbsp;&nbsp;</u><br> &nbsp;&nbsp;&nbsp;&nbsp;Name:<br>&nbsp;&nbsp;&nbsp;&nbsp;Title:

A-1-1

------

<u>Exhibit A-2</u>

<u>FORM OF</u>

<u>JOINDER TO INVESTMENT AGREEMENT</u>

The undersigned hereby agrees to join, become a party to and be bound by, as a "[Apollo Investor][[•] Investor][Post-Closing Investor]", the Investment Agreement, dated as of January 5, 2026, by and among: (i) QXO, Inc., a Delaware corporation, and (ii) the other Investors party thereto.

<u>&nbsp;&nbsp;&nbsp;&nbsp;</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

[NAME]

Shares of Series C Preferred Stock Acquired: [●]

Dated: [DATE]

Address for notices (including email):

[ADDRESS]<br>

Acknowledged and agreed:

QXO, INC.<br>

By:&nbsp;&nbsp;&nbsp;&nbsp;<u>&nbsp;&nbsp;&nbsp;&nbsp;</u><br> &nbsp;&nbsp;&nbsp;&nbsp;Name:<br>&nbsp;&nbsp;&nbsp;&nbsp;Title:

A-2-1

------

<u>Exhibit B</u>

<u>FORM OF</u>

<u>CERTIFICATE OF DESIGNATION</u>

**CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS OF SERIES C CONVERTIBLE PERPETUAL PREFERRED STOCK OF QXO, INC.\***

Pursuant to Section 151 of the Delaware General Corporation Law (as amended, supplemented or restated from time to time, the "**DGCL**"), QXO, Inc., a corporation organized and existing under the laws of the State of Delaware (the "**Corporation**"), in accordance with the provisions of Section 103 of the DGCL does hereby certify the following:

FIRST: That, the Fifth Amended and Restated Certificate of Incorporation of the Corporation (as amended, the "**Certificate of Incorporation**") authorizes the issuance of up to ten million (10,000,000) shares of Preferred Stock, par value $0.001 per share, of the Corporation ("**Preferred Stock**") in one or more series and expressly vests the Board of Directors of the Corporation (the "**Board**") with the authority to fix by resolution the number of shares constituting such series, the powers, designations, preferences and relative, participating, optional or other special rights (if any), and the qualifications, limitations or restrictions thereof (if any), of the Preferred Stock, including, without limitation, the dividend rate, conversion rights, redemption price, stated value and liquidation preference, of any series of shares of Preferred Stock, and to fix the maximum number of shares to constitute such series, which may subsequently be increased or decreased (but not below the number of shares of that series then outstanding); and

SECOND: That, pursuant to the authority vested in the Board by the Certificate of Incorporation, the Board on [ ], [ ], adopted the following resolution designating a new series of Preferred Stock as "Series C Convertible Perpetual Preferred Stock," which shall consist of [•] shares of the Preferred Stock, which the Corporation has the authority to issue:

NOW, THEREFORE, BE IT RESOLVED, that, pursuant to the authority vested in the Board in accordance with the provisions of Article 3 of the Certificate of Incorporation and the provisions of Section 151 of the DGCL, a series of Preferred Stock of the Corporation designated as "Series C Convertible Perpetual Preferred Stock" is hereby authorized, and the designations, rights, preferences, powers, restrictions and limitations of the Series C Convertible Perpetual Preferred Stock shall be as follows:

------

**TABLE OF CONTENTS**

**Page**

---

| | |
|:---|:---|
| [1.&nbsp;&nbsp;&nbsp;&nbsp;The Series C Preferred Stock](#ibea00fdfcb6741368a0ad98148538970) | [1](#ibea00fdfcb6741368a0ad98148538970) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[1.1&nbsp;&nbsp;&nbsp;&nbsp;Designation; Stated Value](#i566c0d6dc92140768821c96694d8b4af) | [1](#i566c0d6dc92140768821c96694d8b4af) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[1.2&nbsp;&nbsp;&nbsp;&nbsp;Additional Series C Preferred Stock](#i5fcc793f7f2b4eabab9f7a2523fafe94) | [1](#i5fcc793f7f2b4eabab9f7a2523fafe94) |
| [2.&nbsp;&nbsp;&nbsp;&nbsp;Defined Terms](#ic8c369b6a70748e28ada52ea20d19a37) | [1](#ic8c369b6a70748e28ada52ea20d19a37) |
| [3.&nbsp;&nbsp;&nbsp;&nbsp;Rank](#i243dfc4cd55e408a80aa61910cef443b) | [10](#i243dfc4cd55e408a80aa61910cef443b) |
| [4.&nbsp;&nbsp;&nbsp;&nbsp;Dividends](#i3152401f1ae14cb6bbfedb4a3c141d4c) | [10](#i3152401f1ae14cb6bbfedb4a3c141d4c) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[4.1&nbsp;&nbsp;&nbsp;&nbsp;Accrual of Dividends](#i40e6f38bec204cfeaba466d40ebc62f4) | [10](#i40e6f38bec204cfeaba466d40ebc62f4) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[4.2&nbsp;&nbsp;&nbsp;&nbsp;Payment of Dividends](#i0368c231f8874742b5e8dae6a4c64f48) | [10](#i0368c231f8874742b5e8dae6a4c64f48) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[4.3&nbsp;&nbsp;&nbsp;&nbsp;Dividend Calculations](#i26e53266db1844199a839a193c352cdc) | [11](#i26e53266db1844199a839a193c352cdc) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[4.4&nbsp;&nbsp;&nbsp;&nbsp;Dividends on the Common Stock](#i2882f85dfc06470f967c9482d115fd86) | [12](#i2882f85dfc06470f967c9482d115fd86) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[4.5&nbsp;&nbsp;&nbsp;&nbsp;Conversion Prior to or Following a Record Date](#i8f315dd707ad4a08a2857d83e2e5cae8) | [12](#i8f315dd707ad4a08a2857d83e2e5cae8) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[4.6&nbsp;&nbsp;&nbsp;&nbsp;Restriction on Dividends](#ica53dd06cf514d17b07c7a9e1e7497f7) | [12](#ica53dd06cf514d17b07c7a9e1e7497f7) |
| [5.&nbsp;&nbsp;&nbsp;&nbsp;Liquidation](#ifea3e3664e41499d9b7ff2cc53353022) | [12](#ifea3e3664e41499d9b7ff2cc53353022) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[5.1&nbsp;&nbsp;&nbsp;&nbsp;Liquidation](#iead1773a2f894d0da47af24778bfaa5d) | [12](#iead1773a2f894d0da47af24778bfaa5d) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[5.2&nbsp;&nbsp;&nbsp;&nbsp;Insufficient Assets](#i23f8d8517b2146d493a9dd3ad58b8f67) | [12](#i23f8d8517b2146d493a9dd3ad58b8f67) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[5.3&nbsp;&nbsp;&nbsp;&nbsp;Notice Requirement](#i99308e248eae4c71848e4edc78a63b38) | [13](#i99308e248eae4c71848e4edc78a63b38) |
| [6.&nbsp;&nbsp;&nbsp;&nbsp;Voting; Consent](#i4b635d2f89f7454fae79b93ae431ad29) | [13](#i4b635d2f89f7454fae79b93ae431ad29) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[6.1&nbsp;&nbsp;&nbsp;&nbsp;As-Converted Voting](#i5570f55702f7439893e43df6e9f58f4d) | [13](#i5570f55702f7439893e43df6e9f58f4d) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[6.2&nbsp;&nbsp;&nbsp;&nbsp;Consent](#ia3774bf2a3a7465ca19df2424d58cfc9) | [13](#ia3774bf2a3a7465ca19df2424d58cfc9) |
| [7.&nbsp;&nbsp;&nbsp;&nbsp;Redemption](#i2998a8af45d24f1c919a5ce7ffa23b74) | [14](#i2998a8af45d24f1c919a5ce7ffa23b74) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[7.1&nbsp;&nbsp;&nbsp;&nbsp;Fundamental Change Redemption](#i015c0b8964bf4a5dadbf875887be995b) | [14](#i015c0b8964bf4a5dadbf875887be995b) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[7.2&nbsp;&nbsp;&nbsp;&nbsp;Optional Redemption](#ib745caaf65444bbe9408dac6654adf7d) | [15](#ib745caaf65444bbe9408dac6654adf7d) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[7.3&nbsp;&nbsp;&nbsp;&nbsp;Insolvency Redemption](#i9a87368b0ca04bbbb27dee455e7634ca) | [15](#i9a87368b0ca04bbbb27dee455e7634ca) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[7.4&nbsp;&nbsp;&nbsp;&nbsp;Fundamental Change Redemption Notice](#id315cf851e4b4eab9b8175673de70f47) | [15](#id315cf851e4b4eab9b8175673de70f47) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[7.5&nbsp;&nbsp;&nbsp;&nbsp;Optional Redemption Notice](#ice6b8cd676dd47c8b0c905cae1468e60) | [16](#ice6b8cd676dd47c8b0c905cae1468e60) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[7.6&nbsp;&nbsp;&nbsp;&nbsp;Insufficient Funds; Remedies For Nonpayment](#ia2399be10021453686e0bb22e9005f5c) | [16](#ia2399be10021453686e0bb22e9005f5c) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[7.7&nbsp;&nbsp;&nbsp;&nbsp;Surrender of Certificates](#i63598ddf5ba84d49bf5e2c585663e8a7) | [17](#i63598ddf5ba84d49bf5e2c585663e8a7) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[7.8&nbsp;&nbsp;&nbsp;&nbsp;Rights Subsequent to Redemption](#icc8a85be64464290996a0a50762b57ce) | [17](#icc8a85be64464290996a0a50762b57ce) |
| [8.&nbsp;&nbsp;&nbsp;&nbsp;Conversion](#i7d4b4c03b5b14ad489e51c6347291c5e) | [17](#i7d4b4c03b5b14ad489e51c6347291c5e) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[8.1&nbsp;&nbsp;&nbsp;&nbsp;Holders' Optional Right to Convert](#i8c5e645b8d8648beaaaa907a163f7cd7) | [17](#i8c5e645b8d8648beaaaa907a163f7cd7) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[8.2&nbsp;&nbsp;&nbsp;&nbsp;Mandatory Conversion](#i1eb7b3706aca4e2fb336da228dad0ba4) | [17](#i1eb7b3706aca4e2fb336da228dad0ba4) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[8.3&nbsp;&nbsp;&nbsp;&nbsp;Procedures for Conversion; Effect of Conversion](#i769ef627c2c442dea88899393772257f) | [18](#i769ef627c2c442dea88899393772257f) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[8.4&nbsp;&nbsp;&nbsp;&nbsp;Reservation of Stock](#i504bcfba19564d60976de56996bb5b47) | [20](#i504bcfba19564d60976de56996bb5b47) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[8.5&nbsp;&nbsp;&nbsp;&nbsp;No Charge or Payment](#ib561853289ca4ceb847448335f5b77f0) | [20](#ib561853289ca4ceb847448335f5b77f0) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[8.6&nbsp;&nbsp;&nbsp;&nbsp;Termination of Conversion Right in Connection with Redemption](#i34450deee292420e9c4cd8594f842b5d) | [20](#i34450deee292420e9c4cd8594f842b5d) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[8.7&nbsp;&nbsp;&nbsp;&nbsp;Adjustment to Conversion Price and Number of Conversion Shares](#i1a67607c1eba4ba29a8ea6d22ea53827) | [20](#i1a67607c1eba4ba29a8ea6d22ea53827) |
| [9.&nbsp;&nbsp;&nbsp;&nbsp;Reissuance of Series C Preferred Stock](#i7b5a960dfbc24b51b888300aeadb64b5) | [31](#i7b5a960dfbc24b51b888300aeadb64b5) |
| [10.&nbsp;&nbsp;&nbsp;&nbsp;Notices](#ib0e6db4936ca45759e334c422eda7d8c) | [31](#ib0e6db4936ca45759e334c422eda7d8c) |
| [11.&nbsp;&nbsp;&nbsp;&nbsp;Amendments and Waiver](#i7e614a9adeb14daba5c4ce8ed94d9455) | [31](#i7e614a9adeb14daba5c4ce8ed94d9455) |

---

i

------

---

| | |
|:---|:---|
| [12.&nbsp;&nbsp;&nbsp;&nbsp;Remedies; Specific Performance](#i2bbef751518340f8a6209df0779ceefe) | [32](#i2bbef751518340f8a6209df0779ceefe) |
| [13.&nbsp;&nbsp;&nbsp;&nbsp;Withholding](#i1cae8993a17d47609d3214ce8c725c5d) | [32](#i1cae8993a17d47609d3214ce8c725c5d) |
| [14.&nbsp;&nbsp;&nbsp;&nbsp;Tax Matters](#i49b9b94efbd347b8b3e7aba92e260147) | [32](#i49b9b94efbd347b8b3e7aba92e260147) |
| [15.&nbsp;&nbsp;&nbsp;&nbsp;Tax Classification](#i73de6d0198d14e9a916384a2ba9da9ff) | [33](#i73de6d0198d14e9a916384a2ba9da9ff) |

---

ii

------

**1.&nbsp;&nbsp;&nbsp;&nbsp;<u>The Series C Preferred Stock</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1&nbsp;&nbsp;&nbsp;&nbsp;<u>Designation; Stated Value</u>. There shall be a series of Preferred Stock that shall be designated as "Series C Convertible Perpetual Preferred Stock" (the "**Series C Preferred Stock**") and the number of shares constituting such series ("**Shares**") shall initially be [•] with an initial Stated Value of $10,000.00 per Share. The rights, preferences, powers, restrictions and limitations of the Series C Preferred Stock shall be as set forth herein. The Series C Preferred Stock shall be issued in book-entry form on the Corporation's share ledger, subject to the rights of holders to receive certificated Shares under the DGCL.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2&nbsp;&nbsp;&nbsp;&nbsp;<u>Additional Series C Preferred Stock</u>. After the Initial Issue Date, the Corporation may, subject to the provisions of this Certificate of Designations (including Section 6.2), issue additional Shares of Series C Preferred Stock with the same terms as the Shares then outstanding, which Shares will, subject to the foregoing, be considered to be part of the same series of, and rank equally and ratably with, all other Shares.

**2.&nbsp;&nbsp;&nbsp;&nbsp;<u>Defined Terms</u>**. For purposes hereof, the following terms shall have the following meanings (and all capitalized terms used herein not otherwise defined shall have their respective meanings set forth in Annex I hereto):

"**50% Beneficial Holding Requirement**" has the meaning given to such term in the Investment Agreement.

"**Additional Shares**" has the meaning set forth in **<u>Section 8.7(j)</u>**.

"**Affiliate**" means, as to any Person, any other Person that, directly or indirectly, controls, or is controlled by, or is under common control with, such Person, including any investment fund, vehicle or account sponsored or managed by such Person or any other Person that controls, is controlled by, or is under common control with such Person (for clarity, an investment fund, vehicle or account shall be deemed to be an "Affiliate" of all other investment funds, vehicles and accounts under common management, directly or indirectly, with such Person); *provided*, *however*, that in no event shall any portfolio company managed by an Affiliate of the Apollo Investor be considered to be an Affiliate of the Apollo Investor. For this purpose, "<u>control</u>" (including, with its correlative meanings, "<u>controlled by</u>" and "<u>under common control with</u>") shall mean the possession, directly or indirectly, of the power to direct or cause the direction of management or policies of a Person, whether through the ownership of securities or partnership or other ownership interests, by contract or otherwise.

"**Apollo Investor**" has the meaning given to such term in the Investment Agreement.

"**as-converted basis**" means (i) with respect to the outstanding shares of Common Stock as of any date, all outstanding shares of Common Stock calculated on a basis in which all shares of Common Stock issuable upon conversion of the outstanding Shares of Series C Preferred Stock (at the Conversion Price in effect on such date) are assumed to be outstanding as of such date and (ii) with respect to any outstanding Shares of Series C Preferred Stock as of any date, the number of shares of Common Stock issuable upon conversion of such Shares of Series C Preferred Stock on such date (at the Conversion Price in effect on such date).

"**beneficially own**", "**beneficial ownership of**", or "**beneficially owning**" any securities shall have the meaning set forth in Rule 13d-3 of the rules and regulations under the Exchange Act; *provided*, that any Person shall be deemed to beneficially own any securities that such Person has the right to acquire, whether or not such right is exercisable immediately (including assuming conversion of all Preferred Stock, if any, owned by such Person to Common Stock).

------

"**Bloomberg**" means Bloomberg Financial Markets and its successors.

"**Board**" has the meaning set forth in the Recitals.

"**Business Day**" means a day other than a Saturday, Sunday or other day on which the SEC or banks in the City of New York are authorized or required by law to close.

"**Cap Allocation**" has the meaning set forth in **<u>Section 8.3</u>**.

"**Cap Share**" has the meaning set forth in **<u>Section 8.3</u>**.

"**Certificate of Designations**" means this Certificate of Designations, Preferences and Rights of Series C Convertible Perpetual Preferred Stock of QXO, Inc., as it may be amended from time to time.

"**Certificate of Incorporation**" has the meaning set forth in the Recitals.

"**Code**" means the U.S. Internal Revenue Code of 1986, as amended.

"**Common Stock**" means the common stock, par value $0.00001 per share, of the Corporation.

"**Common Stock Liquidity Conditions**" will be satisfied if:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) solely to the extent the Apollo Investor is an Affiliate of the Corporation at the time of a Mandatory Conversion, Corporation Redemption, Optional Redemption or Fundamental Change Redemption (or was an Affiliate of the Corporation within the three months prior to the time of a Mandatory Conversion, Corporation Redemption, Optional Redemption or Fundamental Change Redemption) or the Common Stock issuable to the Apollo Investor upon a Mandatory Conversion or exercise of conversion rights by the Apollo Investor immediately prior to a Corporation Redemption, Optional Redemption or Fundamental Change Redemption, as applicable, would exceed 3% of the Corporation's outstanding Common Stock after giving effect to such Mandatory Conversion or exercise of conversion rights by the Apollo Investor immediately prior to a Corporation Redemption, Optional Redemption or Fundamental Change Redemption, as applicable, the offer and sale of such shares of Common Stock by the Apollo Investor upon receipt of such shares of Common Stock are registered for resale pursuant to an effective registration statement under the Securities Act and such registration statement is reasonably expected by the Corporation to remain effective and usable (including with registration rights thereunder not suspended by the Corporation) by the Apollo Investor to sell such shares of Common Stock, continuously during the period from, and including, the date such shares of Common Stock are issued to the Apollo Investor pursuant to such Mandatory Conversion or exercise of conversion rights by the Apollo Investor immediately prior to a Corporation Redemption, Optional Redemption or Fundamental Change Redemption to, and including, the thirtieth (30th) calendar day thereafter; *provided*, *however*, that the Apollo Investor will supply all information reasonably requested by the Corporation for inclusion, and required to be included, in any registration statement or prospectus supplement related to the resale of the shares of Common Stock;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) each share of Common Stock will, when issued (or when sold or otherwise transferred pursuant to the registration statement referred to above), (i) be admitted for book-entry settlement through DTC with an "unrestricted" CUSIP number, (ii) not be represented by any certificate that bears a legend referring to transfer restrictions under the Securities Act or other securities laws and (iii) be listed and admitted for trading, without suspension or material limitation on trading, on any of The New York Stock

------

Exchange, The NYSE American, The NASDAQ Capital Market, The NASDAQ Global Market or The NASDAQ Global Select Market (or any of their respective successors); and

(c)(i) the Corporation has not received any written notice of delisting or suspension by the applicable exchange referred to in clause (b)(iii) above with a reasonable prospect of delisting, after giving effect to all applicable notice and appeal periods; and (ii) no such delisting or suspension is reasonably likely to occur or is pending based on the Corporation falling below the minimum listing maintenance requirements of such exchange.

"**Compounded Dividends**" has the meaning set forth in **<u>Section 4.1</u>**.

"**Continuing Director**" shall mean a director who either was a member of the Board on January 5, 2026 or who becomes a member of the Board subsequent to that date and whose election, appointment or nomination for election by the stockholders of the Corporation is duly approved by a majority of the Continuing Directors on the Board at the time of such approval, either by a specific vote or by approval of the proxy statement issued by the Corporation on behalf of its entire Board in which such individual is named as a nominee for director.

"**Conversion Cap**" has the meaning set forth in **<u>Section 8.3(e)</u>**.

"**Conversion Date**" has the meaning set forth in **<u>Section 8.3(b)</u>**.

"**Conversion Election Date**" means the date upon which the holder's right to convert its Shares pursuant to **<u>Section 8</u>** terminates in connection with a Corporation Redemption, which date shall be no earlier than two Business Days prior to the Optional Redemption Date.

"**Conversion Price**" means, initially, $23.25<sup>1</sup> per Share, as adjusted from time to time in accordance with **<u>Section 8.7</u>**.

"**Conversion Shares**" means the shares of Common Stock or other capital stock of the Corporation then issuable upon conversion of the Series C Preferred Stock in accordance with the terms of **<u>Section 8</u>**.

"**Corporation**" has the meaning set forth in the Preamble.

"**Corporation Redemption**" means any redemption of Series C Preferred Stock arising as a result of, pursuant to or otherwise addressed by **<u>Section 5</u>**, **<u>Section 7.3</u>** and **<u>Section 8.3(e)</u>** hereof as a result of a Liquidation, Insolvency Event or otherwise.

"**Corporation Redemption Price**" means, as of any date of redemption (or Liquidation, if applicable), the greater of (a) an amount in cash equal to the Stated Value, *plus* accrued and unpaid dividends thereon (excluding, for the avoidance of doubt, any Compounded Dividends taken into account in Stated Value) and (b) the payment that a holder of Shares of Series C Preferred Stock would have received had such holder, immediately prior to such redemption (or Liquidation, if applicable), converted such Shares then held by such holder into shares of Common Stock at the applicable Conversion Price

<sup>\*</sup> Initial Conversion Price to be adjusted between date of the execution and delivery of the Investment Agreement and applicable Issue Date (i) for the occurrences listed in, and in accordance with, Section 8.7 and (ii) for customary conversion price adjustments for cash dividends prior to issuance.<br>

------

then in effect in accordance with **<u>Section 8.1</u>**, before any distributions are made to holders of Common Stock and all other Junior Securities and subject to the rights of the holders of any Parity Securities or Senior Securities and the rights of the Corporation's existing and future creditors.

"**Current Market Price**" means, on any day, the average of the Daily VWAP for the five (5) consecutive Trading Days ending the Trading Day immediately prior to the day in question.

"**Daily VWAP**" means the consolidated volume-weighted average price per share of Common Stock as displayed under the heading "Bloomberg VWAP" on the Bloomberg page for the "AQR" page corresponding to the "ticker" for such Common Stock (or its equivalent successor if Bloomberg ceases to publish such price, or such page is not available) in respect of the period from the scheduled open of trading until the scheduled close of trading of the primary trading session on such Trading Day (or if such volume-weighted average price is unavailable, the closing price of one share of such Common Stock on such Trading Day). The "volume weighted average price" shall be determined without regard to after-hours trading or any other trading outside of the regular trading session trading hours.

"**DGCL**" has the meaning set forth in the Preamble.

"**Dividend Payment Date**" has the meaning set forth in **<u>Section 4.2</u>**.

"**Dividend Rate**" means 4.75% *per annum*, as adjusted pursuant to **<u>Section 4.4</u>**, **<u>Section 7.1(b)</u>** and **<u>Section 7.6(b)</u>**; *provided*, that if and for so long as any Event of Noncompliance occurs and is continuing, then the then-current Dividend Rate shall automatically increase by an additional 1.00% per annum; *provided further*, that the Dividend Rate shall only be increased by 1.00% notwithstanding multiple Events of Noncompliance.

"**Dividends**" has the meaning set forth in **<u>Section 4.1</u>**.

"**DTC**" means The Depository Trust Company or any successor depositary.

"**Equity Securities**" has the meaning ascribed to such term in Rule 405 promulgated under the Securities Act as in effect on the date hereof, and in any event includes any stock, any partnership interest, any limited liability company interest and any other interest, right or security convertible into, or exchangeable or exercisable for, capital stock, partnership interests, limited liability company interests or otherwise having the attendant right to vote for directors or similar representatives.

"**Event Effective Date**" has the meaning set forth in **<u>Section 8.7(j)</u>**.

"**Event of Noncompliance**" means (i) the failure by the Corporation to issue Common Stock upon receipt of a Notice of Mandatory Conversion or Notice of Conversion pursuant to the terms of **<u>Section 8.3</u>**, (ii) the failure by the Corporation to comply with the provisions of **<u>Section 11</u>**, and (iii) the failure of the Corporation to comply with the other terms of this Certificate of Designations and such failure continues for thirty (30) days.

"**Ex-Dividend Date**" means the first date on which shares of Common Stock trade on the applicable exchange or in the applicable market, regular way, without the right to receive the issuance, dividend or distribution in question, from the Corporation or, if applicable, from the seller of Common Stock on such exchange or market (in the form of due bills or otherwise) as determined by such exchange or market.

------

"**Exchange Act**" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

"**Expiration Date**" has the meaning set forth in **<u>Section 8.7(e)</u>**.

"**Fair Market Value**" means, with respect to any security or other property, the fair market value of such security or other property as reasonably determined in good faith by a majority of the Board, or an authorized committee thereof.

"**Five-Day Average Price**" has the meaning set forth in **<u>Section 4.2(c)</u>**.

"**Foreclosure**" has the meaning given to such term in the Investment Agreement.

"**Fundamental Change**" shall be deemed to have occurred when any of the following has occurred:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;a "person" or "group" within the meaning of Section 13(d) of the Exchange Act, other than the Corporation, its Wholly-owned Subsidiaries and the employee benefit plans of the Corporation and its Wholly-owned Subsidiaries, files a Schedule TO or any schedule, form or report under the Exchange Act that discloses that such person or group has become the direct or indirect "beneficial owner," as defined in Rule 13d-3 under the Exchange Act, of the Common Stock representing more than 50% of the voting power of the Common Stock;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;the consummation of (i) any recapitalization, reclassification or change of the Common Stock (other than changes resulting from a subdivision or combination) as a result of which the Common Stock is converted into, or exchanged for, stock, other securities, other property or assets; (ii) any share exchange, consolidation or merger of the Corporation pursuant to which the Common Stock will be converted into cash, securities or other assets; or (iii) any sale, lease or other transfer in one transaction or a series of transactions of all or substantially all of the consolidated assets of the Corporation and its Subsidiaries, taken as a whole, to any person or group other than any of the Corporation's Wholly-owned Subsidiaries; *provided*, *however*, that a transaction described in clause (ii) in which the holders of all classes of the Corporation's Common Stock immediately prior to such transaction own, directly or indirectly, more than 50% of all classes of Common Stock of the continuing or surviving corporation or transferee or the parent thereof immediately after such transaction in substantially the same proportions as such ownership immediately prior to such transaction shall not be a Fundamental Change pursuant to this clause (b);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;the stockholders of the Corporation approve any plan or proposal for the liquidation or dissolution of the Corporation; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;the Common Stock (or other common stock underlying the Series C Preferred Stock) ceases to be listed or quoted on any of The New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or any of their respective successors);

*provided*, *however*, that a transaction or transactions described in clause (a) or clause (b) above shall not constitute a Fundamental Change, if (i) at least 90% of the consideration received or to be received by the common stockholders of the Corporation, excluding cash payments for fractional shares and cash payments made in respect of dissenters' appraisal rights, in connection with such transaction or transactions consists of shares of common stock that are listed or quoted on any of The New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or any of their

------

respective successors) ("**Listed Merger Consideration**") or will be so listed or quoted when issued or exchanged in connection with such transaction or transactions, and pursuant to **<u>Section 8.7(f)</u>**, and as a result of such transaction or transactions the Series C Preferred Stock become convertible into such consideration, excluding cash payments for fractional shares and cash payments made in respect of dissenters' appraisal rights, (ii) Continuing Directors continue to constitute at least a majority of the Board of the successor entity issuer of the Listed Merger Consideration immediately following such transaction or transactions and (iii) the chair of the Board of the Corporation shall remain the chair of the Board of the successor entity issuer of the Listed Merger Consideration immediately following such transaction or transactions.

If any transaction in which the Common Stock is replaced by the securities of another entity occurs, following completion of any related Make-Whole Fundamental Change Period (or, in the case of a transaction that would have been a Fundamental Change or a Make-Whole Fundamental Change but for the proviso immediately following clause (d) of this definition, following the effective date of such transaction) references to the Corporation in this definition shall instead be references to such other entity. For purposes of this definition, any transaction or event described in both clause (a) and in clause (b)(i) or (ii) above (without regard to the proviso in clause (b)) will be deemed to occur solely pursuant to clause (b) above (subject to such proviso).

"**Fundamental Change Redemption**" shall have the meaning specified in **<u>Section 7.1</u>**.

"**Fundamental Change Redemption Date**" shall have the meaning specified in **<u>Section 7.4(b)</u>**.

"**Fundamental Change Redemption Notice**" shall have the meaning specified in **<u>Section 7.1</u>**.

"**Fundamental Change Redemption Price**" means, as of any date of redemption, an amount in cash equal to the greater of (a) the Stated Value, *plus* accrued and unpaid dividends thereon (excluding, for the avoidance of doubt, any Compounded Dividends taken into account in Stated Value) and (b) the payment (including an amount in cash equal to the Fair Market Value of any non-cash consideration to be received by holders of shares of Common Stock) that a holder of Shares of Series C Preferred Stock would have received had such holder, immediately prior to such redemption, converted such Shares then held by such holder into shares of Common Stock at the applicable Conversion Price then in effect in accordance with **<u>Section 8.1</u>**, before any distributions are made to holders of Common Stock and all other Junior Securities and subject to the rights of the holders of any Parity Securities or Senior Securities and the rights of the Corporation's existing and future creditors.

"**GAAP**" means generally accepted accounting principles in effect from time to time in the United States of America, applied on a consistent basis.

"**Governmental Authority**" means any government, court, regulatory or administrative agency, commission, arbitrator (public or private) or authority or other legislative, executive or judicial governmental entity (in each case including any self-regulatory organization), whether federal, state or local, domestic, foreign or multinational.

"**holder**," as of a particular time, means any Person that, as of such time, is the holder of record of at least one Share of Series C Preferred Stock.

"**Immaterial Subsidiary**" shall mean any Subsidiary of the Corporation that did not, as of the last day of the fiscal quarter of the Corporation most recently ended, have assets with a value in excess of 10.00% of the consolidated total assets or revenues and income from continuing operations before taxes

------

representing in excess of 10.00% of total revenues and income from continuing operations before taxes, respectively, of the Corporation and its Subsidiaries on a consolidated basis as of such date and after giving pro forma effect to any acquisitions or dispositions which occur after such balance sheet date.

"**Initial Issue Date**" means [•].

"**Initial Stated Value**" means, with respect to any Share, $10,000.00.

"**Insolvency Event**" means:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;any voluntary or involuntary liquidation, dissolution or winding up of the Corporation or any of its Material Subsidiaries;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;an involuntary proceeding shall be commenced or an involuntary petition shall be filed in a court of competent jurisdiction seeking (i) relief in respect of the Corporation or any of its Material Subsidiaries, or of a substantial part of the property or assets of the Corporation or any of its Material Subsidiaries, under Title 11 of the United States Code, as now constituted or hereafter amended, or any other federal, state or foreign bankruptcy, insolvency, receivership or similar law, (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Corporation or any of its Material Subsidiaries or for a substantial part of the property or assets of the Corporation or any of its Material Subsidiaries or (iii) the winding-up or liquidation of the Corporation or any of its Material Subsidiaries, and such proceeding or petition shall continue undismissed for 60 days or an order or decree approving or ordering any of the foregoing shall be entered; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;the Corporation or any of its Material Subsidiaries shall (i) voluntarily commence any proceeding or file any petition seeking relief under Title 11 of the United States Code, as now constituted or hereafter amended, or any other federal, state or foreign bankruptcy, insolvency, receivership or similar law, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or the filing of any petition described in clause (b) above, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Corporation or any of its Material Subsidiaries or for a substantial part of the property or assets of the Corporation or any of its Material Subsidiaries, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) become unable or admit in writing its inability or fail generally to pay its debts as they become due.

"**Investment Agreement**" means the Investment Agreement, dated as of January 5, 2026, by and among the Corporation and the Investors party thereto.

"**IRS**" means the United States Internal Revenue Service.

"**Issue Date**" means the Initial Issue Date and any other date that Shares of Series C Preferred Stock are issued pursuant to this Certificate of Designations.

"**Junior Securities**" means, collectively, the Common Stock and each other class or series of capital stock of the Corporation now existing or hereafter authorized, classified or reclassified, the terms of which do not expressly provide that such class or series ranks on a parity basis with or senior to the Series C Preferred Stock as to dividend rights and rights on the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation.

------

"**Last Reported Sale Price**" of the Common Stock on any date means the closing sale price per share (or if no closing sale price is reported, the average of the bid and ask prices or, if more than one in either case, the average of the average bid and the average ask prices) on that date as reported in composite transactions for the principal U.S. national or regional securities exchange on which the Common Stock is traded. If the Common Stock is not listed for trading on a U.S. national or regional securities exchange on the relevant date, the "**Last Reported Sale Price**" shall be the last quoted bid price per share for the Common Stock in the over-the-counter market on the relevant date as reported by OTC Markets Group Inc. or a similar organization. If the Common Stock is not so quoted, the "**Last Reported Sale Price**" shall be the average of the mid-point of the last bid and ask prices per share for the Common Stock on the relevant date from each of at least three nationally recognized independent investment banking firms selected by the Corporation for this purpose.

"**Laws**" mean all state or federal laws, common law, statutes, ordinances, codes, rules or regulations, orders, executive orders, judgments, injunctions, governmental guidelines or interpretations have the force of law, Permits, decrees, or other similar requirement enacted, adopted, promulgated, or applied by any Governmental Authority.

"**Liquidation**" has the meaning set forth in **<u>Section 5.1</u>**.

"**Make-Whole Fundamental Change**" means any transaction or event that constitutes a Fundamental Change, after giving effect to any exceptions to or exclusions from the definition thereof (including the proviso immediately after clause (d) of the definition thereof), but without regard to the proviso in clause (b) of the definition thereof.

"**Make-Whole Fundamental Change Period**" has the meaning set forth in **<u>Section 7.8(j)</u>**.

"**Material Subsidiary**" shall mean any Subsidiary other than an Immaterial Subsidiary.

"**Mandatory Conversion**" has the meaning set forth in **<u>Section 8.2</u>**.

"**Mandatory Conversion Date**" has the meaning set forth in **<u>Section 8.2</u>**.

"**Mandatory Conversion Right**" has the meaning set forth in **<u>Section 8.2</u>**.

"**Notice of Conversion**" has the meaning set forth in **<u>Section 8.3(b)</u>**.

"**Notice of Mandatory Conversion**" has the meaning set forth in **<u>Section 8.2</u>**.

"**NYSE**" means the New York Stock Exchange.

"**Optional Conversion**" has the meaning set forth in **<u>Section 8.1</u>**.

"**Optional Conversion Date**" has the meaning set forth in **<u>Section 8.3(b)</u>**.

"**Optional Redemption**" has the meaning set forth in **<u>Section 7.2</u>**.

"**Optional Redemption Date**" has the meaning set forth in **<u>Section 7.5(b)</u>**.

"**Optional Redemption Notice**" has the meaning set forth in **<u>Section 7.2</u>**.

------

"**Optional Redemption Price**" means an amount in cash equal to the greater of (a) (i) 107% of the Stated Value, with respect to a Redemption Date on or following the seventh anniversary of the Initial Issue Date but prior to the eighth anniversary of the Initial Issue Date, (ii) 104% of the Stated Value, with respect to a Redemption Date on or following the eighth anniversary of the Initial Issue Date but prior to the ninth anniversary of the Initial Issue Date, and (iii) 100% of the Stated Value, with respect to a Redemption Date on or following the ninth anniversary of the Initial Issue Date and (b) the Current Market Price as of the Redemption Date of the shares of Common Stock issuable upon the conversion of a Share at the applicable Conversion Price then in effect in accordance with **<u>Section 8.1</u>**.

"**Parity Securities**" means, collectively, the Corporation's 5.50% Series B Mandatory Convertible Preferred Stock and any class or series of capital stock, the terms of which expressly provide that such class ranks pari passu with the Series C Preferred Stock as to dividend rights and rights on the distribution of assets on any voluntary or involuntary bankruptcy, liquidation, dissolution or winding up of the affairs of the Corporation, in each case, to the extent outstanding on the date hereof or issued in accordance with **<u>Section 6.2</u>**.

"**Permits**" mean all licenses, franchises, permits, certificates, approvals and authorizations from Governmental Authorities.

"**Person**" means an individual, corporation, limited liability company, partnership, joint venture, association, trust, unincorporated organization or any other entity, including a Governmental Authority.

"**Preferred Stock**" has the meaning set forth in the Recitals.

"**Property**" has the meaning given to such term in the Investment Agreement.

"**Redemption Dates**" has the meaning set forth in **<u>Section 7.5(b)</u>**.

"**Reorganization Event**" has the meaning set forth in **<u>Section 8.7(f)</u>**.

"**Securities Act**" means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

"**Senior Securities**" means, collectively, the Corporation's Convertible Perpetual Preferred Stock and any class or series of capital stock, the terms of which expressly provide that such class ranks senior to any series of the Series C Preferred Stock, has preference or priority over the Series C Preferred Stock as to dividend rights and rights on the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation, in each case, to the extent outstanding on the date hereof or issued in accordance with **<u>Section 6.2</u>**.

"**Series C Preferred Stock**" has the meaning set forth in **<u>Section 1</u>**.

"**Shares**" has the meaning set forth in **<u>Section 1</u>**.

"**Spin-Off**" has the meaning set forth in **<u>Section 8.7(d)</u>**.

"**Stated Value**" means, with respect to any Share on any date of determination, the sum of (i) the Initial Stated Value (adjusted as appropriate as provided for herein) plus (ii) all Compounded Dividends on such Shares.

------

"**Stockholder Approval**" has the meaning given to such term in the Investment Agreement.

"**Stock Price**" has the meaning set forth in **<u>Section 8.7(j)</u>**.

"**Subsidiary**" when used with respect to any Person, means any corporation, limited liability company, partnership, association, trust or other entity of which (x) securities or other ownership interests representing more than 50% of the ordinary voting power (or, in the case of a partnership, more than 50% of the general partnership interests) or (y) sufficient voting rights to elect at least a majority of the board of directors or other governing body are, as of such date, owned by such Person or one or more Subsidiaries of such Person or by such Person and one or more Subsidiaries of such Person.

"**Surplus Amount**" has the meaning set forth in **<u>Section 4.4</u>**.

"**Tax**" and "**Taxes**" means any and all United States federal, state, local or non-United States taxes, fees, levies, duties, tariffs, imposts, and other similar charges (together with any and all interest, penalties and additions to tax) imposed by any Governmental Authority, including taxes or other charges on or with respect to income, franchises, windfall or other profits, gross receipts, property, sales, use, capital stock, payroll, employment, social security, workers' compensation, unemployment compensation or net worth; taxes or other charges in the nature of excise, withholding, ad valorem, stamp, transfer, value added or gains taxes; license, registration and documentation fees; and customs duties, tariffs and similar charges, together with any interest, or penalties and additions to tax imposed by any Governmental Authority.

"**Tender/Exchange Offer Valuation Period**" has the meaning set forth in **<u>Section 8.7(e)</u>**.

"**Trading Day**" means a Business Day on which the NYSE (or any other national securities exchange on which the Common Stock is listed at such time) is open for business.

"**Wholly-owned Subsidiary**" means, at any time, any Subsidiary of which all of the issued and outstanding Equity Securities (other than directors' qualifying shares and shares held by a resident of the jurisdiction, in each case, as required by law) are owned by any one (1) or more of the Corporation and the Corporation's other Wholly-owned Subsidiaries at such time.

**3.&nbsp;&nbsp;&nbsp;&nbsp;<u>Rank</u>**. With respect to payment of dividends and distribution of assets upon liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, all Shares of the Series C Preferred Stock shall rank (a) senior to all Junior Securities, (b) pari passu with any Parity Securities in issue from time to time, and (c) junior to all Senior Securities.

**4.&nbsp;&nbsp;&nbsp;&nbsp;<u>Dividends</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1&nbsp;&nbsp;&nbsp;&nbsp;<u>Accrual of Dividends</u>. From and after the Issue Date with respect to such Shares, cumulative dividends ("**Dividends**") on each such Share shall accrue whether or not there are funds legally available for the payment of dividends, on a daily basis in arrears at the applicable Dividend Rate on the Stated Value thereof. Subject to the provisions of this **<u>Section 4</u>**, all accrued dividends on any Share shall be declared and paid in cash and/or by delivery of shares of Common Stock, as and if declared by the Board on each Dividend Payment Date, in each case, at the sole discretion of the Corporation. Any dividends not declared and paid in cash or Shares of Common Stock on any Dividend Payment Date will accrue and be compounded quarterly in arrears on the then Stated Value of such Shares on such Dividend Payment Date (whether or not earned or declared and whether or not there are profits, surplus or other funds of the Corporation legally available for the payment of dividends) ("**Compounded Dividends**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2&nbsp;&nbsp;&nbsp;&nbsp;<u>Payment of Dividends</u>.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;If, as and when declared by the Board out of funds legally available therefor to the maximum extent not prohibited by Delaware law, the Corporation shall make each dividend payment on the Series C Preferred Stock, in cash and/or by delivery of shares of Common Stock, on the last day of March, June, September and December of each calendar year (each such date, a "**Dividend Payment Date**") at the applicable Dividend Rate; *provided*, that if the Corporation elects and declares and makes any such dividend payments, the Corporation shall elect and declare and make such dividend payments on the same *pro rata* portion of each holder's Shares. The record date for payment of dividends on the Series C Preferred Stock will be the fifteenth (15th) day of the calendar month of the applicable Dividend Payment Date, whether or not such date is a Business Day, and dividends shall only be payable to registered holders of record of the Series C Preferred Stock as such holders appear on the stock register of the Corporation at the close of business on the related record date. If any Dividend Payment Date is not a Business Day, the applicable payment shall be due on the next succeeding Business Day and no additional dividend amount for such period shall be payable during such period as a result of such delay, but shall be paid on the next succeeding Dividend Payment Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;If the Corporation elects to make all or any portion of a dividend payment in the form of Compounded Dividends or shares of Common Stock, the Corporation shall give notice to the holders of such election, and the portion of such payment that will be made in cash and the portion that will be made in Compounded Dividends and/or shares of Common Stock, as applicable, no later than twenty (20) days prior to the Dividend Payment Date for such dividend; *provided,* that if the Corporation does not provide timely notice of this election, the Corporation will be deemed to have elected to pay the relevant dividend in cash.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;Any shares of Common Stock issued in payment or partial payment of a declared dividend shall be valued for such purpose at the Daily VWAP per share of Common Stock over the five consecutive Trading Day period ending on, and including, the second Trading Day immediately preceding the applicable Dividend Payment Date (the "**Five-Day Average Price**"), *multiplied by* 97%.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;No fractional shares of Common Stock shall be delivered to the holders in payment or partial payment of a dividend. The Corporation shall instead, to the extent it is legally permitted to do so, pay a cash amount (computed to the nearest cent) to each holder that would otherwise be entitled to receive a fraction of a share of Common Stock based on the Five-Day Average Price with respect to such dividend, and to the extent it is not legally permitted to make such payment, such amount shall be paid as Compounded Dividends.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;At any time following a payment in the form of Compounded Dividends, the Corporation may elect to pay an additional cash dividend to the holders of the Series C Preferred Stock in an amount equal to or less than the amount of prior Compounded Dividends on a *pro rata* basis and, upon any such cash dividend, the Stated Value of the Series C Preferred Stock shall be reduced by an amount equal to such cash dividend so paid; *provided* that the Stated Value of the Series C Preferred Stock shall not be reduced to less than $10,000 per share.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding anything to the contrary herein, prior to the receipt of the Stockholder Approval, if such Stockholder Approval is required by the rules of the NYSE, no Dividends may be paid by delivery of shares of Common Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3&nbsp;&nbsp;&nbsp;&nbsp;<u>Dividend Calculations</u>. Dividends on the Series C Preferred Stock shall accrue on the basis of a 360-day year, consisting of twelve (12), thirty (30) calendar day periods, and shall accrue daily commencing on the applicable Issue Date, and shall be deemed to accrue from such date whether or not

------

earned or declared and whether or not there are profits, surplus or other funds of the Corporation legally available for the payment of dividends.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.4&nbsp;&nbsp;&nbsp;&nbsp;<u>Dividends on the Common Stock</u>. If the Corporation declares a dividend or makes a distribution of cash (or any other distribution treated as a dividend under Section 301 of the Code) on its Common Stock, each holder of Shares of Series C Preferred Stock shall be entitled to participate in such dividend or distribution in an amount equal to the largest number of whole shares of Common Stock into which all Shares of Series C Preferred Stock (including accrued but unpaid dividends up to, but excluding, the applicable record date, subject to the limitations set forth in **<u>Section 4</u>**) held of record by such holder is convertible pursuant to **<u>Section 8</u>** herein as of the record date for such dividend or distribution or, if there is no specified record date, as of the date of such dividend or distribution; *provided* that that any such cash dividend or distribution received by the holders of Shares of Series C Preferred Stock shall reduce, on a dollar-for-dollar basis, the Dividends payable as provided in **<u>Section 4.2</u>** on the immediately succeeding Dividend Payment Date and, if applicable, subsequent Dividend Payment Dates in respect of such Shares of Series C Preferred Stock as of the time such cash dividend or distribution is made. For the avoidance of doubt, if any such cash dividend or distribution received by the holders of Shares of Series C Preferred Stock pursuant to this **<u>Section 4.4</u>** is greater than the accrued and unpaid Dividends payable as provided in **<u>Section 4.2</u>** for the immediately succeeding Dividend Payment Date (the "**Surplus Amount**"), the Dividends payable as provided in **<u>Section 4.2</u>** for succeeding Dividend Payment Dates shall be reduced on a dollar-for-dollar basis until the Surplus Amount is zero.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.5&nbsp;&nbsp;&nbsp;&nbsp;<u>Conversion Prior to or Following a Record Date</u>. If the Conversion Date for any Shares is prior to the close of business on the record date for a dividend as provided in **<u>Section 4.2</u>**, the holder of such Shares shall not be entitled to any dividend in respect of such record date. If the Conversion Date for any Shares is after the close of business on the record date for a dividend as provided in **<u>Section 4.2</u>** but prior to the corresponding Dividend Payment Date, the holder of such Shares as of the applicable record date shall be entitled to receive such dividend, notwithstanding the conversion of such Shares prior to the applicable Dividend Payment Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.6&nbsp;&nbsp;&nbsp;&nbsp;<u>Restriction on Dividends</u>. If the Corporation makes any portion of a dividend payment for the Series C Preferred Stock in the form of Compounded Dividends for any dividend period, the Corporation shall not pay any dividends with respect to the Common Stock, any Junior Securities or other Parity Securities unless and until all such Compounded Dividends have been paid in cash or registered shares of Common Stock; *provided* that such restriction shall not apply (a) with respect to dividend payments for the Series C Preferred Stock paid on a *pro rata* basis for a dividend period in cash and/or registered shares of Common Stock, (b) to the payment of any dividends with respect to Senior Securities or the Corporation's 5.50% Series B Mandatory Convertible Preferred Stock outstanding as of the date hereof or issued in accordance with **<u>Section 6.2</u>**, and (c) to the payment of any dividends with respect to any other Parity Securities so long as any dividend payments on such other Parity Securities are paid either only in the form of compounded dividends or, are paid in the form of cash or Common Stock and such dividends are paid on a *pro rata* basis with the Series C Preferred Stock and in the same form, whether cash or Common Stock.

**5.&nbsp;&nbsp;&nbsp;&nbsp;<u>Liquidation</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1&nbsp;&nbsp;&nbsp;&nbsp;<u>Liquidation</u>. In the event of any Insolvency Event of the Corporation (a "**Liquidation**"), the holders of Shares of Series C Preferred Stock then outstanding shall be entitled to be paid out of the assets of the Corporation available for distribution to its stockholders, pari passu with any payment to the holders of any Parity Securities and subject to the rights of Senior Securities and the Corporation's creditors, but before any distribution or payment out of the assets of the Corporation shall be made to the holders of Junior Securities by reason of their ownership thereof, an amount in cash equal to the Corporation Redemption Price.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2&nbsp;&nbsp;&nbsp;&nbsp;<u>Insufficient Assets</u>. If upon any Liquidation the remaining assets of the Corporation available for distribution to its stockholders shall be insufficient to pay the holders of the Shares of Series

------

C Preferred Stock the Corporation Redemption Price to which they are entitled under **<u>Section 5.1</u>**, (a) the holders of the Shares shall share ratably in any distribution of the remaining assets and funds of the Corporation in proportion to the respective full preferential amounts which would otherwise be payable in respect of the Series C Preferred Stock any Parity Securities in the aggregate upon such Liquidation if all amounts payable on or with respect to such Shares were paid in full, taking into account the Corporation Redemption Price payable in respect of such Series C Preferred Stock, and (b) the Corporation shall not make or agree to make, or set aside for the benefit of the holders of Junior Securities, any payments to the holders of Junior Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3&nbsp;&nbsp;&nbsp;&nbsp;<u>Notice Requirement</u>. In the event of any Liquidation, the Corporation shall, within ten (10) days of the date the Board approves such action, or no later than twenty (20) days of any stockholders' meeting called to approve such action, or within twenty (20) days of the commencement of any involuntary proceeding, whichever is earlier, give each holder of Shares of Series C Preferred Stock written notice of the proposed action. Such written notice shall describe the material terms and conditions of such proposed action, including a description of the stock, cash and property to be received by the holders of Shares upon consummation of the proposed action and the date of delivery thereof. If any material change in the facts set forth in the initial notice shall occur, the Corporation shall promptly give written notice to each holder of Shares of such material change.

**6.&nbsp;&nbsp;&nbsp;&nbsp;<u>Voting; Consent</u>**. &nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1&nbsp;&nbsp;&nbsp;&nbsp;<u>As-Converted Voting</u>. Each holder of outstanding Shares of Series C Preferred Stock shall be entitled to vote with holders of outstanding shares of Common Stock, voting together as a single class, with respect to any and all matters presented to the stockholders of the Corporation for their action or consideration (whether at a meeting of stockholders of the Corporation, by written action of stockholders in lieu of a meeting or otherwise), except as provided by law. In any such vote, each holder of Shares of Series C Preferred Stock shall be entitled to a number of votes equal to the largest number of whole shares of Common Stock into which all Shares of Series C Preferred Stock (including accrued but unpaid dividends up to, but excluding, the applicable record date, subject to the limitations set forth in **<u>Section 4</u>**) held of record by such holder is convertible pursuant to **<u>Section 8</u>** herein as of the record date (based, solely for these purposes, on an initial conversion rate of 430.1075, as may be adjusted from time to time in accordance with **<u>Section 8.7</u>** herein) for such vote or written consent or, if there is no specified record date, as of the date of such vote or written consent. Each holder of outstanding Shares of Series C Preferred Stock shall be entitled to notice of all stockholder meetings (or requests for written consent) in accordance with the amended and restated bylaws of the Corporation (the "**Bylaws**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2&nbsp;&nbsp;&nbsp;&nbsp;<u>Consent</u>. (a) As long as any Share of Series C Preferred Stock is outstanding, without the prior written approval of the holders of at least a majority of the then-outstanding Shares of Series C Preferred Stock, the Corporation shall not:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) amend, modify or waive any provision of this Certificate of Designations or the Certificate of Incorporation or the Bylaws in a manner that adversely alters or changes the rights, powers, preferences or privileges of the holders of the Series C Preferred Stock;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) create (by reclassification or otherwise) any new class or series of shares having rights, preferences or privileges senior to or on parity with the Series C Preferred Stock, or increase or decrease the authorized number of Shares of Series C Preferred Stock, or issue any additional Shares of Series C Preferred Stock or increase the authorized number of shares or issue additional shares of any Senior Securities or Parity Securities; *provided* that no consent shall be required for increasing the authorized number of Shares of the Series C Preferred Stock, issuing any additional Shares of Series C Preferred Stock or creating and/or issuing new shares of Parity Securities, in each case, in an aggregate amount not to exceed the greater of (A) together with the outstanding Series C Preferred Stock, $10 billion and (B) an amount such that the Corporation's Consolidated Net Total Leverage Ratio does not exceed 7.00 to 1.00 on a *pro forma* basis after giving effect to such issuance; or

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) repurchase or redeem any Junior Securities (provided that this clause (iii) shall not restrict (1) any repurchase of unvested shares of Junior Securities following termination of an employee, advisor or consultant of the Corporation or its Subsidiaries, (2) the forfeiture or withholding of taxes payable in connection with, and repurchases or withholdings of Junior Securities deemed to occur with respect to the exercise or vesting of any stock or other equity options or warrants, stock units or other incentive interests or the vesting of equity awards if such Junior Securities represents a portion of the exercise price thereof or the withholding of a portion of such Junior Securities to pay taxes payable on account of such exercise, (3) net settlement of derivatives or convertible securities, (4) repurchase or redemption of Junior Securities made in exchange for, or in amount equal to or less than the proceeds of a substantially concurrent sale or issuance of Junior Securities by the Corporation, (5) repurchase or redemption of Junior Securities deemed to occur in connection with paying cash in lieu of fractional shares of such Junior Securities in connection with a share dividend, distribution, share split, reverse share split, merger, consolidation, amalgamation or other business combination of the Corporation, (6) repurchase or redemption of Junior Securities in accordance with provisions similar to those described in **<u>Section 7.1</u>** or **<u>Section 8.3(e)</u>** (*provided*, that, for the purposes of this clause (6), all shares of Preferred Stock tendered by holders in connection with such Fundamental Change Redemption have been repurchased or redeemed) and (7) repurchase or redemption of Junior Securities pursuant to a special mandatory redemption or similar provision relating to a pending acquisition).

**7.&nbsp;&nbsp;&nbsp;&nbsp;<u>Redemption</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1&nbsp;&nbsp;&nbsp;&nbsp;<u>Fundamental Change Redemption</u>. Subject to the provisions of this **<u>Section 7</u>**, upon the occurrence of a Fundamental Change, each holder of Series C Preferred Stock shall have the right, in its sole discretion, to require the Corporation to redeem, and the Corporation shall, redeem, out of funds legally available therefor, all of the then-outstanding Shares of Series C Preferred Stock held by such holder requested by such holder to be redeemed (a "**Fundamental Change Redemption**") for a price per Share equal to the Fundamental Change Redemption Price. In connection with a Fundamental Change, the Corporation shall provide to the holders of Series C Preferred Stock written notice of the proposed Fundamental Change (the "**Fundamental Change Redemption Notice**") within twenty (20) calendar days following the date on which the Corporation consummates a Fundamental Change (or if later and subject to this **<u>Section 7.1</u>**, promptly after the Corporation discovers that a Fundamental Change may occur). Any such Fundamental Change Redemption shall occur on a date specified by the Corporation that is not less than 20 calendar or more than 35 calendar days following the date of the Fundamental Change Redemption Notice and in accordance with the Fundamental Change Redemption Notice, if such notice is received by the holders of Series C Preferred Stock at least five (5) Business Days prior to the consummation of such Fundamental Change (solely in the case of the Corporation discovering a Fundamental Change may occur following the twenty (20) calendar day period above and within five (5) Business Days after the consummation of such Fundamental Change if the Corporation shall discover the occurrence of such Fundamental Change at a later date). In exchange for the cancellation of Shares of Series C Preferred Stock of their certificate or certificates, if any, or an affidavit of loss, representing such Shares on or after the applicable Fundamental Change Redemption Date in accordance with **<u>Section 7.8</u>** below, the Fundamental Change Redemption Price for the Shares being redeemed shall be payable in cash by the Corporation in immediately available funds to the respective holders of the Series C Preferred Stock, except to the extent prohibited by applicable Delaware law, and *provided* that the Corporation shall only be required to pay the Fundamental Change Redemption Price simultaneously with, or immediately after, satisfaction of all obligations then due under the Corporation's then-existing indebtedness. Notwithstanding anything to the contrary contained herein, each holder of Shares of Series C Preferred Stock shall have the right to elect, prior to the Fundamental Change Redemption Date, to exercise the conversion rights, if any, in accordance with **<u>Section 8</u>**.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2&nbsp;&nbsp;&nbsp;&nbsp;<u>Optional Redemption</u>. Subject to the provisions of this **<u>Section 7</u>**, the Corporation shall have the right, but not the obligation, subject to the Common Stock Liquidity Conditions, to redeem, from time to time, out of funds legally available therefor, all or any portion of the then-outstanding Shares of Series C Preferred Stock (an "**Optional Redemption**") at any time on or following the seventh (7<sup>th</sup>) anniversary of the Initial Issue Date for a price per Share equal to the Optional Redemption Price *plus* accrued and unpaid dividends thereon; *provided*, the Corporation shall use reasonable best efforts to redeem at least 20.1% of then-outstanding shares of Series C Preferred Stock. Any such Optional Redemption shall occur not less than twenty (20) days and not more than sixty (60) days following receipt by the applicable holder(s) of Series C Preferred Stock of a written election notice (the "**Optional Redemption Notice**") from the Corporation. Following the notice period required by the Optional Redemption Notice, the Corporation shall redeem all, or in the case of an election to redeem less than all of the Shares of Series C Preferred Stock, the same *pro rata* portion of each such holder's Shares redeemed pursuant to this **<u>Section 7.2</u>**. In exchange for the surrender to the Corporation by the respective holders of Shares of Series C Preferred Stock of their certificate or certificates, if any, or an affidavit of loss, representing such Shares on or after the applicable Optional Redemption Date in accordance with **<u>Section 7.8</u>** below, the Optional Redemption Price for the Shares being redeemed shall be payable in cash by the Corporation in immediately available funds to the respective holders of the Series C Preferred Stock, except to the extent prohibited by applicable Delaware law. Notwithstanding anything to the contrary contained herein, each holder of Shares of Series C Preferred Stock shall have the right to elect, prior to the Optional Redemption Date, to exercise the conversion rights, if any, in accordance with **<u>Section 8</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3&nbsp;&nbsp;&nbsp;&nbsp;<u>Insolvency Redemption</u>. Upon the occurrence of an Insolvency Event, the Corporation shall immediately redeem out of assets legally available therefor all the then outstanding Shares of Series C Preferred Stock (or such lesser amount if such assets legally available are insufficient to redeem all the then outstanding Shares of Series C Preferred Stock across holders on a *pro rata* basis) for an amount equal to the Corporation Redemption Price. In exchange for the surrender to the Corporation by the respective holders of Shares of Series C Preferred Stock of their certificate or certificates, if any, or an affidavit of loss, representing such Shares on or after the applicable Insolvency Event in accordance with **<u>Section 7.8</u>** below, the Corporation Redemption Price for the Shares being redeemed shall be payable in cash by the Corporation in immediately available funds to the respective holders of the Series C Preferred Stock, except to the extent prohibited by applicable Delaware law and subject to the rights of the holders of any Parity Securities (on a *pro rata* basis with the Series C Preferred Stock) or Senior Securities and the rights of the Corporation's existing and future creditors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4&nbsp;&nbsp;&nbsp;&nbsp;<u>Fundamental Change Redemption Notice</u>. Each Fundamental Change Redemption Notice shall state:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;the Fundamental Change Redemption Price;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;the date of the closing of the redemption, which pursuant to **<u>Section 7.1</u>** shall be not less than 20 calendar days or more than 35 calendar days following the date of the Fundamental Change Redemption Notice (the applicable date, the "**Fundamental Change Redemption Date**");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;the current Conversion Price of the Series C Preferred Stock, after giving effect to any adjustments pursuant to **<u>Section 8.7</u>** (including, for the avoidance of doubt, any adjustments for a Make-Whole Fundamental Change);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;a description of the information needed from the holder to elect to participate in such redemption, including a form of any notice required to be delivered by a holder to participate in such redemption;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;a description of the payments and other actions required to be made or taken in order to satisfy all of the Corporation's obligations under any outstanding indebtedness; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;the manner and place designated for surrender by the holder to the Corporation of his, her or its certificate or certificates, if any, representing the Shares of Series C Preferred Stock to be redeemed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.5&nbsp;&nbsp;&nbsp;&nbsp;<u>Optional Redemption Notice</u>. Each Optional Redemption Notice shall state:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;the number of Shares of Series C Preferred Stock held by the holder that the Corporation proposes to redeem on the Optional Redemption Date specified in the Optional Redemption Notice;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;the date of the closing of the redemption, which pursuant to **<u>Section 7.2</u>** shall be no earlier than twenty (20) days and no later than sixty (60) days following circulation by the Corporation of the Optional Redemption Notice (the applicable date, the "**Optional Redemption Date**" and, together with the Fundamental Change Redemption Date, the "**Redemption Dates**"), and the Optional Redemption Price;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;the Conversion Election Date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;the current Conversion Price of the Series C Preferred Stock, after giving effect to any adjustments pursuant to **<u>Section 8.7</u>** (including, for the avoidance of doubt, any adjustments for a Make-Whole Fundamental Change); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;the manner and place designated for surrender by the holder to the Corporation of his, her or its certificate or certificates, if any, representing the Shares of Series C Preferred Stock to be redeemed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.6&nbsp;&nbsp;&nbsp;&nbsp;<u>Insufficient Funds; Remedies For Nonpayment</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;<u>Insufficient Funds</u>. If on any Fundamental Change Redemption Date the assets of the Corporation legally available are insufficient to pay the full Fundamental Change Redemption Price for the total number of Shares to be redeemed, the Corporation shall (i) take all commercially reasonable actions required and permitted under applicable law to maximize the assets legally available for paying the Fundamental Change Redemption Price, as applicable, (ii) redeem out of all such assets legally available therefor on the applicable Fundamental Change Redemption Date the maximum possible number of Shares that it can redeem on such date, *pro rata* among the holders of such Shares to be redeemed in proportion to the aggregate number of Shares to be redeemed by each such holder on the applicable Fundamental Change Redemption Date, and (iii) following the applicable Fundamental Change Redemption Date, at any time and from time to time when additional assets of the Corporation become legally available to redeem the remaining Shares, the Corporation shall use such assets to pay the remaining balance of the aggregate applicable Fundamental Change Redemption Price.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;<u>Remedies For Nonpayment</u>. If on any Redemption Date all of the Shares elected to be redeemed pursuant to such redemption are not redeemed in full by the Corporation by paying the entire applicable redemption price until such Shares are fully redeemed and the aggregate redemption price is paid in full, all of the unredeemed Shares shall remain outstanding and continue to have the rights, preferences and privileges expressed herein, including the accrual and accumulation of dividends thereon as provided in **<u>Section 4</u>**; *provided* that the applicable Dividend Rate on all of the unredeemed Shares shall increase by 1.00% per annum on the applicable Redemption Date until such time as the full Fundamental Change Redemption Price or Optional Redemption Price, as applicable (including, without

------

duplication, accrued but unpaid dividends up to, but excluding, the record date for the applicable distribution on such Shares at the adjusted Dividend Rate), has been paid in full in respect of all Shares to be redeemed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.7&nbsp;&nbsp;&nbsp;&nbsp;<u>Surrender of Certificates</u>. On or before the applicable Redemption Date, each holder of Shares of Series C Preferred Stock being redeemed shall surrender the certificate or certificates, if any, representing such Shares to the Corporation in the manner and place designated in the Fundamental Change Redemption Notice or Optional Redemption Notice, as applicable, or to the Corporation's corporate secretary at the Corporation's headquarters, duly assigned or endorsed for transfer to the Corporation (or accompanied by duly executed stock powers relating thereto), or, in the event such certificate or certificates are lost, stolen or missing, shall deliver an affidavit of loss, in the manner and place designated in the Fundamental Change Redemption Notice or Optional Redemption Notice, as applicable. Each surrendered certificate shall be canceled and retired and the Corporation shall thereafter make payment of the Fundamental Change Redemption Price or Optional Redemption Price, as applicable, by certified check or wire transfer to the holder of record of such certificate; *provided*, that if less than all the Shares represented by a surrendered certificate are redeemed, then a new stock certificate representing the unredeemed Shares shall be issued in the name of the applicable holder of record of the canceled stock certificate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.8&nbsp;&nbsp;&nbsp;&nbsp;<u>Rights Subsequent to Redemption</u>. If on the applicable Redemption Date, the applicable redemption price is paid (or tendered for payment) for any of the Shares to be redeemed on such Redemption Date, then on such date all rights of the holder in the Shares so redeemed and paid or tendered, including any rights to dividends on such Shares, shall cease, and such Shares shall no longer be deemed issued and outstanding.

**8.&nbsp;&nbsp;&nbsp;&nbsp;<u>Conversion</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.1&nbsp;&nbsp;&nbsp;&nbsp;<u>Holders' Optional Right to Convert</u>. Subject to the provisions of this **<u>Section 8</u>** (including the Conversion Cap), at any time and from time to time (including on or after a Foreclosure), the holders of Series C Preferred Stock shall have the right by written election to the Corporation to convert all or any portion of the outstanding Shares of Series C Preferred Stock (an "**Optional Conversion**"), into an aggregate number of shares of Common Stock as is determined by (a) *multiplying* the number of Shares to be converted by the Stated Value plus any accrued but unpaid dividends up to, but excluding, the date of Optional Conversion (excluding, for the avoidance of doubt, any Compounded Dividends taken into account in Stated Value) and then (b) *dividing* the result by the Conversion Price in effect immediately prior to such conversion, and in addition thereto the holder shall receive cash in lieu of any fractional shares as set out in **<u>Section 8.3(c)</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.2&nbsp;&nbsp;&nbsp;&nbsp;<u>Mandatory Conversion</u>. Subject to the provisions of this **<u>Section 8</u>** (including the Conversion Cap), and subject to the Common Stock Liquidity Conditions, at any time following the second (2<sup>nd</sup>) anniversary of the Initial Issue Date, if the closing price per share of Common Stock exceeds (i) from and after the second (2<sup>nd</sup>) anniversary and prior to the third (3<sup>rd</sup>) anniversary of the Initial Issue Date, 175% of the Conversion Price and (ii) from and after the third (3<sup>rd</sup>) anniversary of the Initial Issue Date, 150% of the Conversion Price, in each case, for at least twenty (20) Trading Days in any period of thirty (30) consecutive Trading Days (including the last Trading Day) immediately prior to the receipt by each holder of a Notice of Mandatory Conversion, the Corporation may elect to convert all or any portion of the outstanding Shares of Series C Preferred Stock (the "**Mandatory Conversion Right**" and each conversion pursuant to this **<u>Section 8.2</u>**, a "**Mandatory Conversion**") at the Conversion Price in effect immediately prior to such conversion, in each case into an aggregate number of shares of Common Stock as is determined by (a) *multiplying* the number of Shares to be converted by the sum of (i) the Stated Value plus (ii) any accrued but unpaid dividends up to, but excluding, the date of the Mandatory Conversion (subject to the limitations set forth in **<u>Section 4</u>** and excluding, for the avoidance of doubt,

------

any Compounded Dividends taken into account in Stated Value) and then (b) *dividing* the result by the Conversion Price in effect immediately prior to such conversion, and in addition thereto the holder shall receive cash in lieu of any fractional shares as set out in **<u>Section 8.3(c)</u>**; *provided*, that in the case of an election to convert less than all of the outstanding Shares of Series C Preferred Stock, the Corporation shall convert the same *pro rata* portion of each holder's Shares converted pursuant to this **<u>Section 8.2</u>**.

The Corporation will not exercise its Mandatory Conversion Right, or otherwise send a Notice of Conversion, with respect to any Shares of Series C Preferred Stock pursuant to this **<u>Section 8.2</u>** (x) unless the Common Stock Liquidity Conditions are satisfied with respect to the Mandatory Conversion (including on the Mandatory Conversion Date) and (y) without limiting the application of the Common Stock Liquidity Conditions, from, and including, the date that is ten (10) Business Days prior to December 25 of each calendar year to, but excluding, the date that is one (1) Business Day after January 1 of the next calendar year.

Notwithstanding anything to the contrary in this **<u>Section 8.2</u>**, the Corporation's exercise of its Mandatory Conversion Right, and any related Notice of Mandatory Conversion, will not apply to any Share of Series C Preferred Stock as to which a Fundamental Change Redemption Notice has been duly delivered and not withdrawn. The date (the "**Mandatory Conversion Date**") for any Mandatory Conversion will be a Business Day of the Corporation's choosing that is no more than twenty (20), nor less than ten (10), Business Days after the Notice of Mandatory Conversion for such Mandatory Conversion. To exercise its Mandatory Conversion Right with respect to any Shares of Series C Preferred Stock, the Corporation must send to each holder of such Shares a written notice of such exercise (a "**Notice of Mandatory Conversion**"). Such Notice of Mandatory Conversion must state: (1) that the Corporation has exercised its Mandatory Conversion Right to cause the Mandatory Conversion of such Shares, briefly describing the Corporation's Mandatory Conversion Right under this Certificate of Designations; (2) the Mandatory Conversion Date for such Mandatory Conversion (which shall be the date scheduled for the settlement of such Mandatory Conversion); (3) that Shares of Series C Preferred Stock subject to Mandatory Conversion may be converted earlier at the option of the holders thereof pursuant to an Optional Conversion at any time before the close of business on the Business Day immediately before the Mandatory Conversion Date; (4) the Conversion Price in effect on the date of the Notice of Mandatory Conversion for such Mandatory Conversion; and (5) the CUSIP and ISIN numbers, if any, of the Series C Preferred Stock. If less than all Shares of Series C Preferred Stock then outstanding are subject to Mandatory Conversion, then the Shares of Series C Preferred Stock to be subject to such Mandatory Conversion will be selected by the Corporation *pro rata*.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.3&nbsp;&nbsp;&nbsp;&nbsp;<u>Procedures for Conversion; Effect of Conversion</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;<u>Procedures for Mandatory Conversion</u>. If the Corporation duly exercises, in accordance with **<u>Section 8</u>**, its Mandatory Conversion Right with respect to any Share of Series C Preferred Stock, then (1) the Mandatory Conversion of such Share will occur automatically and without the need for any action on the part of the holder(s) thereof; and (2) the shares of Common Stock due upon such Mandatory Conversion will be registered in the name of the holder(s) of such Shares of Series C Preferred Stock as of the close of business on the related Mandatory Conversion Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;<u>Procedures for Holder Conversion</u>. In order to effectuate a conversion of Shares of Series C Preferred Stock pursuant to **<u>Section 8.1</u>**, a holder shall submit a written election to the Corporation that such holder elects to convert Shares specifying the number of Shares elected to be converted (a "**Notice of Conversion**"). The holder shall surrender, along with a Notice of Conversion, if applicable, to the Corporation the certificate or certificates, if any, representing the Shares being converted, duly assigned or endorsed for transfer to the Corporation (or accompanied by duly executed stock powers relating thereto) or, in the event such certificate or certificates are lost, stolen or missing,

------

accompanied by an affidavit of loss executed by the holder. The conversion of such Shares hereunder shall be deemed effective as of the date of submission of the Notice of Conversion and surrender of such Series C Preferred Stock certificate or certificates, if any, or delivery of such affidavit of loss, if applicable (such date, the "**Optional Conversion Date**" and, together with the Mandatory Conversion Date, the "**Conversion Dates**"). Upon the receipt by the Corporation of a Notice of Conversion and the surrender of such certificate(s) and accompanying materials (if any), the Corporation shall as promptly as practicable (but in any event within two (2) Trading Days thereafter) deliver to the relevant holder or holders, as applicable, (A) the number of shares of Common Stock (including, subject to **<u>Section 8.3(c)</u>**, any fractional share) to which such holder or holders shall be entitled upon conversion of the applicable Shares as calculated pursuant to **<u>Section 8.1</u>**, as applicable, and, if applicable, (B) the number of Shares of Series C Preferred Stock delivered to the Corporation for conversion but otherwise not elected to be converted pursuant to the written election, in each case in book-entry form on the Corporation's share ledger. All shares of capital stock issued hereunder by the Corporation shall be duly and validly issued, fully paid and non-assessable, free and clear of all Taxes, liens, charges and encumbrances with respect to the issuance thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;<u>Fractional Shares</u>. The Corporation shall not issue any fractional shares of Common Stock upon conversion of Series C Preferred Stock. Instead, the Corporation shall pay a cash adjustment to the holder of Series C Preferred Stock being converted based upon the Current Market Price on the Trading Day prior to the Conversion Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;<u>Effect of Conversion</u>. All Shares of Series C Preferred Stock converted as provided in **<u>Section 8.1</u>** or **<u>Section 8.2</u>**, as applicable, shall no longer be deemed outstanding as of the applicable Conversion Date and all rights with respect to such Shares of Series C Preferred Stock shall immediately cease and terminate as of such time (including, without limitation, any right of redemption pursuant to **<u>Section 8</u>**), other than the right of the holder to receive shares of Common Stock and payment in lieu of any fraction of a Share in exchange therefor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;<u>Limitation on Conversions</u>. Notwithstanding anything to the contrary herein, prior to the receipt of the Stockholder Approval, if required by the rules of the NYSE, Series C Preferred Stock shall not be convertible pursuant to this **<u>Section 8</u>** in the aggregate into more than 134,234,896 shares of Common Stock, which is 19.99% of the Common Stock outstanding as of the date of the Investment Agreement (subject to appropriate adjustment in the event of a stock split, stock dividend, distribution, combination or other similar recapitalization) (such limitation, the "**Conversion Cap**"). No holder of Series C Preferred Stock shall be issued in the aggregate, pursuant to the terms of this Certificate of Designations, shares of Common Stock in an amount greater than such holder's *pro rata* allocation of shares of Common Stock issuable in an amount not to cause the Conversion Cap to be exceeded based on a fraction, the numerator of which is the number of Shares of Series C Preferred Stock issued to such initial holder pursuant to the Investment Agreement on the applicable Issue Date and the denominator of which is the aggregate number of all Shares of Series C Preferred Stock issued to the initial holders pursuant to the Investment Agreement irrespective of the date of issue (with respect to each such holder, the "**Cap Allocation**"). In the event that any initial holder (or a transferee of an initial holder) shall sell or otherwise transfer any of such holder's Series C Preferred Stock, the transferee shall be allocated a *pro rata* portion of such holder's Cap Allocation, and the restrictions of the prior sentence shall apply to such transferee with respect to the portion of the Cap Allocation allocated to such transferee. In the event that any holder shall have converted all of such holder's Series C Preferred Stock into a number of shares of Common Stock which, in the aggregate, is less than such holder's Cap Allocation, then the difference between such holder's Cap Allocation and the number of shares of Common Stock actually issued to such holder shall be allocated to the respective Cap Allocations of the

------

remaining holders on a *pro rata* basis in proportion to the shares of Common Stock underlying the Series C Preferred Stock then held by each such holder. In the event that the Corporation is prohibited from issuing any shares of Common Stock in connection with a conversion of Series C Preferred Stock pursuant to **<u>Section 8.1</u>** or **<u>Section 8.2</u>** (the "**Cap Shares**"), the Corporation shall, to the fullest extent permitted by law and out of funds lawfully available therefor, pay cash on or prior to the applicable share delivery date to such holder in exchange for the redemption of such number of Shares of Series C Preferred Stock held by the holder that are not convertible into such Cap Shares at a price equal to the product of (x) such number of Cap Shares and (y) the Current Market Price of the share of Common Stock on the applicable Conversion Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.4&nbsp;&nbsp;&nbsp;&nbsp;<u>Reservation of Stock</u>. The Corporation shall at all times when any Shares of Series C Preferred Stock are outstanding reserve and keep available out of its authorized but unissued shares of capital stock, solely for the purpose of issuance upon the conversion of the Series C Preferred Stock, such number of shares of Common Stock issuable upon the conversion of all outstanding Series C Preferred Stock pursuant to this **<u>Section 8</u>**, taking into account any adjustment to such number of shares so issuable in accordance with **<u>Section 8.7</u>** hereof. The Corporation shall take all such actions as may be necessary to assure that all such shares of Common Stock may be so issued without violation of any applicable law or governmental regulation or any requirements of any domestic securities exchange upon which shares of Common Stock may be listed (except for official notice of issuance which shall be immediately delivered by the Corporation upon each such issuance). The Corporation shall not close its books against the transfer of any of its capital stock in any manner which would prevent the timely conversion of the Shares of Series C Preferred Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.5&nbsp;&nbsp;&nbsp;&nbsp;<u>No Charge or Payment</u>. The issuance of certificates for shares of Common Stock upon conversion of Shares of Series C Preferred Stock pursuant to **<u>Section 8.1</u>** or **<u>Section 8.2</u>**, as applicable, shall be made without payment of additional consideration by, or other charge, cost or Tax to, the holder in respect thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.6&nbsp;&nbsp;&nbsp;&nbsp;<u>Termination of Conversion Right in Connection with Redemption</u>. Notwithstanding anything to the contrary set forth in this Certificate of Designations, in no event may Shares of Series C Preferred Stock be converted as provided in **<u>Section 8.1</u>** or **<u>Section 8.2</u>**, as applicable, on and following the date that is one (1) Business Day prior to the Optional Redemption Date in respect of such Shares; *provided that*, for the avoidance of doubt, this **<u>Section 8.6</u>** shall no longer apply in respect of Shares of Series C Preferred Stock to be redeemed in accordance with **<u>Section 7</u>** if the closing of the redemption of such Shares does not occur on the applicable Redemption Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.7&nbsp;&nbsp;&nbsp;&nbsp;<u>Adjustment to Conversion Price and Number of Conversion Shares</u>. In order to prevent dilution of the conversion rights granted under this **<u>Section 8</u>**, the Conversion Price and the number of Conversion Shares issuable on conversion of the Shares of Series C Preferred Stock shall be subject to adjustment, without duplication, from time to time as provided in this **<u>Section 8.7</u>**, except that the Corporation shall not make any adjustment to the Conversion Price if each holder of the Series C Preferred Stock participates, at the same time and upon the same terms as all holders of Common Stock and solely as a result of holding Series C Preferred Stock, in any transaction described in this **<u>Section 8.7</u>**, without having to convert its Series C Preferred Stock, as if each such holder held a number of shares of Common Stock that would be issuable upon conversion of such Series C Preferred Stock in accordance with **<u>Section 8.2</u>** (without giving effect to the proposed adjustment). For the avoidance of doubt, upon receipt by holders of any cash dividend or distribution in accordance with **<u>Section 4.4</u>**, each holder of the Series C Preferred Stock shall be deemed to have participated, at the same time and upon the same terms as all holders of Common Stock and solely as a result of holding Series C Preferred Stock, in such cash dividend or distribution.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;<u>Subdivisions and Combinations</u>. In case the outstanding shares of Common Stock shall be subdivided (whether by stock split, recapitalization or otherwise) into a greater number of

------

shares of Common Stock or combined (whether by consolidation, reverse stock split or otherwise) into a lesser number of shares of Common Stock, then the Conversion Price in effect at the opening of business on the day following the day upon which such subdivision or combination becomes effective shall be adjusted to equal the product of the Conversion Price in effect on such date and a fraction the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such subdivision or combination, and the denominator of which shall be the number of shares of Common Stock outstanding immediately after such subdivision or combination. Such adjustment shall become effective retroactively to the close of business on the day upon which such subdivision or combination becomes effective.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;<u>Stock Dividends or Distributions</u>. If the Corporation shall issue shares of Common Stock as a dividend or distribution on all or substantially all shares of Common Stock or if the Corporation effects a stock split or combination of the Common Stock (other than as set forth in **<u>Section 8.7(f)</u>**), the Conversion Price shall be adjusted based on the following formula:

CP1 = CP0 x OS0 <br> OS1

where,

CP1&nbsp;&nbsp;&nbsp;&nbsp;=&nbsp;&nbsp;&nbsp;&nbsp;the Conversion Price in effect immediately after the open of business on the Ex-Dividend Date for such dividend or distribution or the effective date of such share split or share combination, as the case may be;

CP0&nbsp;&nbsp;&nbsp;&nbsp;=&nbsp;&nbsp;&nbsp;&nbsp;the Conversion Price in effect immediately prior to the open of business on the Ex-Dividend Date for such dividend or distribution or the effective date of such share split or share combination, as the case may be;

OS0&nbsp;&nbsp;&nbsp;&nbsp;=&nbsp;&nbsp;&nbsp;&nbsp;the number of shares of Common Stock outstanding immediately prior to the open of business on the Ex-Dividend Date for such dividend or distribution or the effective date of such share split or share combination, as the case may be; and

OS1&nbsp;&nbsp;&nbsp;&nbsp;=&nbsp;&nbsp;&nbsp;&nbsp;the number of shares of Common Stock that would be outstanding immediately after giving effect to such dividend, distribution, share split or share combination, as the case may be.

Any adjustment made under this clause (b) shall become effective immediately after the open of business on such Ex-Dividend Date for such dividend or distribution, or immediately after the open of business on the effective date for such share split or share combination, as applicable. If any dividend or distribution of the type described in this clause (b) is declared but not so paid or made, the Conversion Price shall be immediately readjusted, effective as of the date the Board determines not to pay such dividend or distribution, to the Conversion Price that would then be in effect if such dividend or distribution had not been declared or announced.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;<u>Distributions of Rights, Options or Warrants</u>. If the Corporation shall distribute to all or substantially all holders of its Common Stock any rights, options or warrants (other than rights, options or warrants distributed in connection with a stockholders' rights plan, in which case the

------

provisions of **<u>Section 8.7(g)</u>** shall apply) entitling them to purchase, for a period of not more than 45 calendar days from the announcement date for such distribution, shares of the Common Stock at a price per share less than the average of the Last Reported Sale Prices of the Common Stock for the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the date of announcement date for such distribution, the Conversion Price shall be decreased based on the following formula:

CP1 = CP0 x OS0 + X <br> OS0 + Y

where

CP1&nbsp;&nbsp;&nbsp;&nbsp;=&nbsp;&nbsp;&nbsp;&nbsp;the Conversion Price in effect immediately after the open of business on the Ex-Dividend Date for such distribution;

CP0&nbsp;&nbsp;&nbsp;&nbsp;=&nbsp;&nbsp;&nbsp;&nbsp;the Conversion Price in effect immediately prior to the open of business on the Ex-Dividend Date for such distribution;

OS0&nbsp;&nbsp;&nbsp;&nbsp;=&nbsp;&nbsp;&nbsp;&nbsp;the number of shares of the Common Stock outstanding immediately prior to the open of business on the Ex-Dividend Date for such distribution;

X&nbsp;&nbsp;&nbsp;&nbsp;=&nbsp;&nbsp;&nbsp;&nbsp;the number of shares of the Common Stock equal to the aggregate price payable to exercise such rights, options or warrants, *divided* by the average of the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the announcement date of such distribution; and

Y&nbsp;&nbsp;&nbsp;&nbsp;=&nbsp;&nbsp;&nbsp;&nbsp;the total number of shares of the Common Stock issuable pursuant to such rights, options or warrants.

Any decrease made under this clause (c) shall be made successively whenever any such rights, options or warrants are distributed and shall become effective immediately after the open of business on the Ex-Dividend Date for such distribution. To the extent that shares of the Common Stock are not delivered after the expiration of such rights, options or warrants, the Conversion Price shall be increased to the Conversion Price that would then be in effect had the increase with respect to the distribution of such rights, options or warrants been made on the basis of delivery of only the number of shares of the Common Stock actually delivered. If such rights, options or warrants are not so distributed, the Conversion Price shall be increased to the Conversion Price that would then be in effect if such record date for such distribution had not occurred.

For purposes of this clause (c), in determining whether any rights, options or warrants entitle the holders to subscribe for or purchase shares of the Common Stock at a price per share less than such average of the Last Reported Sale Prices of the Common Stock for the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the announcement date for such distribution, and in determining the aggregate offering price of such shares of the Common Stock, there shall be taken into account any consideration received by the Corporation for such rights, options or warrants and any amount payable upon exercise or conversion thereof, the value of such consideration, if other than cash, as reasonably determined by the Corporation in good faith.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;<u>Distributions of Equity Securities, Indebtedness, other Securities, Assets or Property</u>. If the Corporation distributes shares of its Equity Securities, evidences of its indebtedness, other assets or property of the Corporation or rights, options or warrants to acquire its Equity Securities or other securities to all or substantially all holders of Common Stock, excluding:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;dividends or distributions as to which adjustment is required to be effected pursuant to clause (b) or (c) above;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;rights issued to all holders of the Common Stock pursuant to a rights plan, where such rights are not presently exercisable, trade with the Common Stock and the plan provides that the holders of Shares of Series C Preferred Stock will receive such rights;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;dividends or distributions in which Series C Preferred Stock participates on an as-converted basis pursuant to **<u>Section 4.4</u>**; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;&nbsp;&nbsp;Spin-Offs described below in this clause (d),

&nbsp;&nbsp;&nbsp;&nbsp;then the Conversion Price shall be decreased based on the following formula:

CP1 = CP0 x SP0 – FMV <br> SP0

where

CP1&nbsp;&nbsp;&nbsp;&nbsp;=&nbsp;&nbsp;&nbsp;&nbsp;the Conversion Price in effect immediately after the open of business on the Ex-Dividend Date for such distribution;

CP0&nbsp;&nbsp;&nbsp;&nbsp;=&nbsp;&nbsp;&nbsp;&nbsp;the Conversion Price in effect immediately prior to the open of business on the Ex-Dividend Date for such distribution;

SP0&nbsp;&nbsp;&nbsp;&nbsp;=&nbsp;&nbsp;&nbsp;&nbsp;the average of the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Ex-Dividend Date for such distribution; and

FMV&nbsp;&nbsp;&nbsp;&nbsp;=&nbsp;&nbsp;&nbsp;&nbsp;the fair market value (as determined by the Board in good faith) of the shares of Equity Securities, evidences of indebtedness, securities, assets or property distributed with respect to each outstanding share of the Common Stock immediately prior to the open of business on the Ex-Dividend Date for such distribution.

Any decrease made under the portion of this clause (d) above shall become effective immediately after the open of business on the Ex-Dividend Date for such distribution. If such distribution is not so paid or made, the Conversion Price shall be increased to be the Conversion Price that would then be in effect if such distribution had not been declared.

Notwithstanding the foregoing, if "FMV" (as defined above) is equal to or greater than "SP0" (as defined above), in lieu of the foregoing decrease, each holder of Shares of Series C Preferred Stock may elect to receive at the same time and upon the same terms as holders of shares of Common Stock without having to convert its Series C Preferred Stock, the amount and kind of the Equity Securities, evidences of

------

the Corporation's indebtedness, other assets or property of the Corporation or rights, options or warrants to acquire its Equity Securities or other securities of the Corporation that such holder would have received as if such holder owned a number of shares of Common Stock into which the Share of Series C Preferred Stock was convertible at the Conversion Price in effect on the Ex-Dividend Date for the distribution. If the Board of Directors determines the "FMV" (as defined above) of any distribution for purposes of this clause (d) by reference to the actual or when-issued trading market for any securities, it shall in doing so consider the prices in such market over the same period used in computing the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Ex-Dividend Date for such distribution.

With respect to an adjustment pursuant to this clause (d) where there has been a payment of a dividend or other distribution on the Common Stock in shares of Equity Securities of any class or series, or similar equity interests, of or relating to a Subsidiary or other business unit of the Corporation that will be, upon distribution, listed on a U.S. national or regional securities exchange (a "**Spin-Off**"), the Conversion Price shall be decreased based on the following formula:

CP1 = CP0 x MP0 <br> FMV + MP0

where

CP1&nbsp;&nbsp;&nbsp;&nbsp;=&nbsp;&nbsp;&nbsp;&nbsp;Conversion Price in effect immediately after the end of the Valuation Period;

CP0&nbsp;&nbsp;&nbsp;&nbsp;=&nbsp;&nbsp;&nbsp;&nbsp;the Conversion Price in effect immediately prior to the end of the Valuation Period;

FMV&nbsp;&nbsp;&nbsp;&nbsp;=&nbsp;&nbsp;&nbsp;&nbsp;the average of the Last Reported Sale Prices of the Equity Securities or similar equity interest distributed to holders of the Common Stock applicable to one share of the Common Stock (determined by reference to the definition of Last Reported Sale Price as set forth in **<u>Section 2</u>** as if references therein to Common Stock were to such Equity Securities or similar equity interest) over the first 10 consecutive Trading Day period after, and including, the Ex-Dividend Date of the Spin-Off (the "**Valuation Period**"); and

MP0&nbsp;&nbsp;&nbsp;&nbsp;=&nbsp;&nbsp;&nbsp;&nbsp;the average of the Last Reported Sale Prices of the Common Stock over the Valuation Period.

Any adjustment to the Conversion Price under the preceding paragraph of this clause (d) shall be made immediately after the close of business on the last Trading Day of the Valuation Period. If the Conversion Date for any Share of Series C Preferred Stock to be converted occurs on or during the Valuation Period, then, notwithstanding anything to the contrary in this Certificate of Designations, the Corporation will, if necessary, delay the settlement of such conversion until the second (2nd) Business Day after the last Trading Day of the Valuation Period.

Notwithstanding the foregoing, if the "FMV" (as defined above) is equal to or greater than the Daily VWAP of the Common Stock over the Valuation Period, in lieu of the foregoing decrease, each holder of Shares of Series C Preferred Stock may elect to receive at the same time and upon the same terms as holders of shares of Common Stock without having to convert its Shares of Series C Preferred Stock, the amount and kind of Equity Securities or similar equity interest that such holder would have

------

received as if such holder owned a number of shares of Common Stock into which the Series C Preferred Stock was convertible at the Conversion Price in effect on the Ex-Dividend Date for the distribution.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;<u>Tender Offer, Exchange Offer</u>. If the Corporation or any of its Subsidiaries makes a payment in respect of a tender offer or exchange offer for the Common Stock, to the extent that the cash and value of any other consideration included in the payment per share of the Common Stock exceeds the average of the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading Day period commencing on, and including, the Trading Day next succeeding the last date (the "**Expiration Date**") on which tenders or exchanges may be made pursuant to such tender or exchange offer (as it may be amended), the Conversion Price shall be decreased based on the following formula:

CP1 = CP0 x SP1 x OS0 <br> AC + (SP1 x OS1)

where

CP1&nbsp;&nbsp;&nbsp;&nbsp;=&nbsp;&nbsp;&nbsp;&nbsp;the Conversion Price in effect immediately after the close of business on the 10th Trading Day immediately following, and including, the Trading Day next succeeding the Expiration Date;

CP0&nbsp;&nbsp;&nbsp;&nbsp;=&nbsp;&nbsp;&nbsp;&nbsp;the Conversion Price in effect immediately prior to the close of business on the 10th Trading Day immediately following, and including, the Trading Day next succeeding the Expiration Date;

AC&nbsp;&nbsp;&nbsp;&nbsp;=&nbsp;&nbsp;&nbsp;&nbsp;the aggregate value of all cash and any other consideration (as determined by the Board in good faith) paid or payable for shares purchased or exchanged in such tender or exchange offer;

SP1&nbsp;&nbsp;&nbsp;&nbsp;=&nbsp;&nbsp;&nbsp;&nbsp;the average of the Last Reported Sales Prices of the Common Stock over the ten (10) consecutive Trading Day period beginning on, and including, the Trading Day next succeeding the Expiration Date (the "**Tender/Exchange Offer Valuation Period**");

OS1&nbsp;&nbsp;&nbsp;&nbsp;=&nbsp;&nbsp;&nbsp;&nbsp;the number of shares of the Common Stock outstanding immediately after the close of business on the Expiration Date (adjusted to give effect to the purchase or exchange of all shares accepted for purchase in such tender offer or exchange offer); and

OS0&nbsp;&nbsp;&nbsp;&nbsp;=&nbsp;&nbsp;&nbsp;&nbsp;the number of shares of the Common Stock outstanding immediately prior to the Expiration Date (prior to giving effect to such tender offer or exchange offer);

*provided, however*, that the Conversion Price will in no event be adjusted up pursuant to this **<u>Section 8.7(e)</u>**, except to the extent provided in the immediately following paragraph. The adjustment to the Conversion Price pursuant to this **<u>Section 8.7(e)</u>** will be calculated as of the close of business on the 10th Trading Day immediately following, and including, the Trading Day next succeeding the Expiration Date. If the Conversion Date for any Share of Series C Preferred Stock to be converted occurs on the Expiration Date or during the Tender/Exchange Offer Valuation Period, then, notwithstanding anything to the contrary in this Certificate of Designations, the Corporation will, if necessary, delay the settlement of

------

such conversion until the second (2nd) Business Day after the last Trading Day of the Tender/Exchange Offer Valuation Period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;<u>Adjustment for Reorganization Events</u>. If there shall occur any reclassification, statutory share exchange, reorganization, recapitalization, consolidation or merger involving the Corporation with or into another Person in which the Common Stock (but not the Series C Preferred Stock) is converted into or exchanged for securities, cash or other property (excluding a merger solely for the purpose of changing the Corporation's jurisdiction of incorporation) including a Fundamental Change (without limiting the rights of holders of Series C Preferred Stock or the Corporation with respect to any Fundamental Change) (a "**Reorganization Event**"), then, subject to **<u>Section 5</u>**, following any such Reorganization Event, each Share of Series C Preferred Stock shall remain outstanding with such obligations assumed by any such surviving entity, if applicable, and be convertible into the number, kind and amount of securities, cash or other property which a holder of such Share of Series C Preferred Stock would have received in such Reorganization Event had such holder converted its Shares of Series C Preferred Stock into the applicable number of shares of Common Stock immediately prior to the effective date of the Reorganization Event using the Conversion Price applicable immediately prior to the effective date of the Reorganization Event; and, in such case, appropriate adjustment (as determined in good faith by the Board) shall be made in the application of the provisions in this **<u>Section 8.7</u>** set forth with respect to the rights and interest thereafter of the holders of Series C Preferred Stock, to the end that the provisions set forth in this **<u>Section 8.7</u>** (including provisions with respect to changes in and other adjustments of the Conversion Price) shall thereafter be applicable, as nearly as reasonably practicable, in relation to any shares of stock or other property thereafter deliverable upon the conversion of the Series C Preferred Stock. Without limiting the Corporation's obligations with respect to a Fundamental Change, the Corporation (or any successor) shall, no less than twenty (20) calendar days prior to the occurrence of any Reorganization Event, provide written notice to the holders of Series C Preferred Stock of the expected occurrence of such event and of the kind and amount of the cash, securities or other property that each Share of Series C Preferred Stock is expected to be convertible into under this **<u>Section 8.7(f)</u>**. Failure to deliver such notice shall not affect the operation of this **<u>Section 8.7(f)</u>**. The Corporation shall not enter into any agreement for a transaction constituting a Reorganization Event unless, to the extent that the Corporation is not the surviving corporation in such Reorganization Event, or will be dissolved in connection with such Reorganization Event, proper provision shall be made in the agreements governing such Reorganization Event for any Person surviving such Reorganization Event or continuing entity in such Reorganization Event assuming all of the obligations of the Corporation under this Certificate of Designations and the other Transaction Documents including the conversion of the Series C Preferred Stock into stock of the Person surviving such Reorganization Event or such other continuing entity in such Reorganization Event.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;<u>Stockholders' Rights Plan</u>. To the extent that any stockholders' rights plan adopted by the Corporation is in effect upon conversion of the Shares of Series C Preferred Stock, the holders of Shares of Series C Preferred Stock will receive, in addition to any Common Stock due upon conversion, the appropriate number of rights, if any, under the applicable rights agreement (as the same may be amended from time to time). However, if, prior to any conversion, the rights have separated from the shares of the Common Stock in accordance with the provisions of the applicable stockholders' rights plan, the Conversion Price will be adjusted at the time of separation as if the Corporation distributed to all holders of the Common Stock, shares of Equity Securities, evidences of indebtedness, securities, assets or property as described in clause (d) above, subject to readjustment in the event of the expiration, termination or redemption of such rights.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;&nbsp;<u>Other Issuances</u>. Except as stated in this **<u>Section 8.7</u>**, the Corporation shall not adjust the Conversion Price for the issuances of shares of Common Stock or any securities convertible into or exchangeable for shares of Common Stock or rights to purchase shares of Common Stock or such convertible or exchangeable securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;<u>Adjustment at the Discretion of the Board</u>. The Corporation shall be permitted to decrease the Conversion Price by any amount for a period of at least 20 Business Days if the Board determines in good faith that such decrease would be in the best interest of the Corporation. In addition, to the extent permitted by applicable law and subject to the applicable rules of any exchange on which any of the Corporation's securities are then listed, the Corporation also may (but is not required to) decrease the Conversion Price to avoid or diminish income tax to holders of Common Stock or rights to purchase shares of Common Stock in connection with a dividend or distribution of shares (or rights to acquire shares) or similar event. Whenever the Conversion Price is decreased pursuant to either of the preceding two sentences, the Corporation shall deliver to the holders of the Series C Preferred Stock a notice of the decrease at least fifteen (15) days prior to the date the decreased Conversion Price takes effect, and such notice shall state the decreased Conversion Price and the period during which it will be in effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;&nbsp;&nbsp;<u>Adjustment Upon Make-Whole Fundamental Change</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;If the Event Effective Date of a Make-Whole Fundamental Change occurs and a holder of Shares of Series C Preferred Stock elects to convert any or all of its Shares of Series C Preferred Stock in connection with such Make-Whole Fundamental Change, the Corporation shall, in addition to the shares of Common Stock otherwise issuable upon conversion of such Shares of Series C Preferred Stock, issue an additional number of shares of Common Stock (the "**Additional Shares**") upon surrender of such Shares of Series C Preferred Stock for conversion as described in this **<u>Section 8.7(j)</u>**. A conversion of Shares of Series C Preferred Stock shall be deemed for these purposes to be "in connection with" such Make-Whole Fundamental Change if the relevant Notice of Conversion is received by the Corporation during the period from the open of business on the Event Effective Date of the Make-Whole Fundamental Change up to, and including, the Business Day immediately prior to the related Fundamental Change Redemption Date (or, in the case of a Make-Whole Fundamental Change that would have been a Fundamental Change but for the proviso in clause (b) of the definition thereof, the 35th Trading Day immediately following the Event Effective Date of such Make-Whole Fundamental Change) (such period, the "**Make-Whole Fundamental Change Period**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;Upon the occurrence of an Event Effective Date with respect to any Make-Whole Fundamental Change, the Corporation shall notify holders of Series C Preferred Stock in writing of the Event Effective Date of any Make-Whole Fundamental Change and the current Conversion Price of the Series C Preferred Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;The number of Additional Shares, if any, issuable in connection with a Make-Whole Fundamental Change shall be determined by reference to the table below, based on:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;The date on which the Make-Whole Fundamental Change occurs or becomes effective (the "**Event Effective Date**") and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;the price paid (or deemed to be paid) per share of the Common Stock in the Make-Whole Fundamental Change, as described in the succeeding paragraph (the "**Stock Price**").

------

If the holders of the Common Stock receive only cash in a Make-Whole Fundamental Change described in clause (b) of the definition of Fundamental Change, the Stock Price shall be the cash amount paid per share. Otherwise, the Stock Price shall be the average of the Last Reported Sale Prices per share of the Common Stock over the five Trading Day period ending on, and including, the Trading Day immediately preceding the Event Effective Date of the Make-Whole Fundamental Change. The Board shall make appropriate adjustments to the Stock Price, in its good faith determination, to account for any adjustment to the Conversion Price pursuant to this Certificate of Designations that becomes effective, or any event requiring an adjustment to the Conversion Price where the Ex-Dividend Date, effective date or expiration date of the event occurs during such five Trading Day period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;&nbsp;&nbsp;The Stock Prices set forth in the column headings of the table below shall be adjusted as of any date on which the Conversion Price is otherwise adjusted. The adjusted Stock Prices shall equal (A) the Stock Prices applicable immediately prior to such adjustment, *multiplied by* (B) a fraction, the numerator of which is the Conversion Price immediately prior to such adjustment giving rise to the Stock Price adjustment and the denominator of which is the Conversion Price as so adjusted. The Additional Shares issuable upon conversion set forth in the table below shall be adjusted in the same manner and at the same time as the Conversion Price as set forth in this **<u>Section 8.7</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth the number of Additional Shares issuable upon conversion of Series C Preferred Stock pursuant to this **<u>Section 8.7(j)</u>** for each Stock Price and Event Effective Date set forth below:

---

| | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Stock Price** | **Stock Price** | **Stock Price** | **Stock Price** | **Stock Price** | **Stock Price** | **Stock Price** | **Stock Price** | **Stock Price** | **Stock Price** | **Stock Price** | **Stock Price** |
| **Event Effective Date** | $19.72  | $21.00  | $23.25  | $25.00  | $30.00  | $34.88  | $40.69  | $50.00  | $75.00  | $100.00  | $150.00  | $250.00  |
| January 5, 2026 | 76.9918 | 69.6048 | 58.8688 | 52.0640 | 37.8133 | 28.7357 | 21.5704 | 14.6500 | 6.8267 | 3.8130 | 1.2940 | 0.0000 |
| January 5, 2027 | 76.9918 | 64.8810 | 53.8194 | 46.7400 | 31.7367 | 22.1703 | 14.9300 | 8.8380 | 3.7453 | 2.1160 | 0.7353 | 0.0000 |
| January 5, 2028 | 76.9918 | 60.9857 | 49.9183 | 42.7200 | 26.8333 | 15.7339 | 5.9646 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 |
| January 5, 2029 | 76.9918 | 57.6905 | 47.1871 | 40.3800 | 25.4067 | 14.9455 | 5.6967 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 |
| January 5, 2030 | 76.9918 | 53.1095 | 43.2946 | 36.9920 | 23.2767 | 13.7500 | 5.2888 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 |
| January 5, 2031 | 76.9918 | 46.5619 | 37.4882 | 31.8080 | 19.8433 | 11.7833 | 4.6154 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 |
| January 5, 2032 | 76.9918 | 36.9571 | 28.2237 | 23.0920 | 13.5467 | 8.0476 | 3.3178 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 |
| January 5, 2033 | 76.9918 | 25.7095 | 13.8796 | 6.1560 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 |

---

The exact Stock Price or Event Effective Date may not be set forth in the table above, in which case:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;if the Stock Price is between two Stock Prices in the table or the Event Effective Date is between two Event Effective Dates in the table, the number of Additional Shares shall be determined by a straight-line interpolation between the number of Additional Shares set forth for the higher and lower Stock Prices and the earlier and later Event Effective Dates in the table above, as applicable, based on a 365- or 366-day year, as the case may be;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;if the Stock Price is greater than $250.00 per share (subject to adjustment in the same manner as the Stock Prices set forth in the column headings of the table above), no Additional Shares shall be issued; and

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;if the Stock Price is less than $19.72 per share (subject to adjustment in the same manner as the Stock Prices set forth in the column headings of the table above), no Additional Shares shall be issued.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)&nbsp;&nbsp;&nbsp;&nbsp;Nothing in this **<u>Section 8.7(j)</u>** shall prevent any other adjustment to the Conversion Price pursuant to this **<u>Section 8.7</u>** in respect of a Make-Whole Fundamental Change.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)&nbsp;&nbsp;&nbsp;&nbsp;<u>Rounding; Par Value; De-minimis Adjustments</u>. All calculations under **<u>Section 8.7</u>** shall be made to the nearest 1/10,000th of a cent or to the nearest 1/10,000th of a share, as the case may be. No adjustment in the Conversion Price shall reduce the Conversion Price below the then par value of the Common Stock. If an adjustment to the Conversion Price otherwise required by this **<u>Section 8.7</u>** would result in a change of less than 1% to the Conversion Price, then, notwithstanding anything to the contrary in this **<u>Section 8.7</u>**, the Corporation may, at its election, defer and carry forward such adjustment, except that all such deferred adjustments must be given effect (i) when all such deferred adjustments would result in an aggregate change to the Conversion Price of at least 1%, (ii) on the Conversion Date of any Share of Series C Preferred Stock, (iii) on the effective date of any Fundamental Change and/or Make-Whole Fundamental Change and (iv) in connection with Dividends paid on the Common Stock pursuant to **<u>Section 4.4</u>** hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)&nbsp;&nbsp;&nbsp;&nbsp;<u>Treatment of Pre-Record Date Adjustments</u>. Notwithstanding this **<u>Section 8.7</u>** or any other provision of this Certificate of Designations, if a Conversion Price adjustment becomes effective on any Ex-Dividend Date, and a holder that has converted its Series C Preferred Stock on or after such Ex-Dividend Date and on or prior to the related record date would be treated as the record holder of the shares of Common Stock as of the related Conversion Date based on an adjusted Conversion Price for such Ex-Dividend Date, then, notwithstanding the Conversion Price adjustment provisions in this **<u>Section 8.7</u>**, the Conversion Price adjustment relating to such Ex-Dividend Date shall not be made for such converting holder. Instead, such holder shall be treated as if such holder were the record owner of the shares of Common Stock on an unadjusted basis and participate in the related dividend, distribution or other event giving rise to such adjustment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m)&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding anything to the contrary in this **<u>Section 8</u>**, the Conversion Price shall not be adjusted:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;upon the issuance of any shares of Common Stock pursuant to any present or future plan providing for the reinvestment of dividends or interest payable on the Corporation's securities and the investment of additional optional amounts in shares of Common Stock under any plan;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;upon the issuance of any shares of Common Stock or options or rights to purchase those shares pursuant to any present or future employee, director or consultant benefit plan or program of or assumed by the Corporation or any of the Corporation's Subsidiaries;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;upon the issuance of any shares of the Common Stock pursuant to any option, warrant, right or exercisable, exchangeable or convertible security not described in clause (ii) of this subsection and outstanding as of the Initial Issue Date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;&nbsp;&nbsp;upon the repurchase of any shares of Common Stock pursuant to an open market share repurchase program or other buy back transaction, including structured or derivative transactions, that is not a tender or exchange offer of the kind described in **<u>Section 8.7(e)</u>**;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;&nbsp;&nbsp;solely for a change in the par value of the Common Stock;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)&nbsp;&nbsp;&nbsp;&nbsp;for accrued and unpaid Dividends, if any; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii)&nbsp;&nbsp;&nbsp;&nbsp;if and to the extent such adjustment would cause the Conversion Cap to be exceeded.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n)&nbsp;&nbsp;&nbsp;&nbsp;<u>Certificate as to Adjustment</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;As promptly as reasonably practicable following any adjustment of the Conversion Price, but in any event not later than thirty (30) days thereafter, the Corporation shall furnish to each holder of record of Series C Preferred Stock at the address specified for such holder in the books and records of the Corporation (or at such other address as may be provided to the Corporation in writing by such holder) a certificate of an executive officer setting forth in reasonable detail such adjustment and the facts upon which it is based and certifying the calculation thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;As promptly as reasonably practicable following the receipt by the Corporation of a written request by any holder of Series C Preferred Stock, but in any event not later than thirty (30) days thereafter, the Corporation shall furnish to such holder a certificate of an executive officer certifying the Conversion Price then in effect and the number of Conversion Shares or the amount, if any, of other shares of stock, securities or assets then issuable to such holder upon conversion of the Shares of Series C Preferred Stock held by such holder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o)&nbsp;&nbsp;&nbsp;&nbsp;<u>Notices</u>. In the event:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;that the Corporation shall take a record of the holders of its Common Stock (or other capital stock or securities at the time issuable upon conversion of the Series C Preferred Stock) for the purpose of entitling or enabling them to receive any dividend or other distribution, to vote at a meeting (or by written consent), to receive any right to subscribe for or purchase any shares of capital stock of any class or any other securities, or to receive any other security; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;of any capital reorganization of the Corporation, any reclassification of the Common Stock of the Corporation, any consolidation or merger of the Corporation with or into another Person, or sale of all or substantially all of the Corporation's assets to another Person; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;of the voluntary or involuntary dissolution, liquidation or winding-up of the Corporation;

then, and in each such case, unless the Corporation has previously publicly announced such information (including through filing or furnishing such information with the Securities and Exchange Commission), the Corporation shall send or cause to be sent to each holder of record of Series C Preferred Stock at the address specified for such holder in the books and records of the Corporation (or at such other address as may be provided to the Corporation in writing by such holder) at least ten (10) days prior to the applicable record date or the applicable expected effective date, as the case may be, for the event, a written notice specifying, as the case may be, (A) the record date for such dividend, distribution, meeting or consent or other right or action, and a description of such dividend, distribution or other right or action to be taken at such meeting or by written consent, or (B) the effective date on which such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding-up is proposed to take place, and the date, if any is to be fixed, as of which the books of the Corporation shall close or a record shall be taken with respect to which the holders of record of Common Stock (or such other capital stock or securities at the time issuable upon conversion of the Series C Preferred Stock) shall be entitled to exchange their shares of Common Stock (or such other capital stock or securities) for securities or other

------

property deliverable upon such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding-up, and the amount per share and character of such exchange applicable to the Series C Preferred Stock and the Conversion Shares.

**9.&nbsp;&nbsp;&nbsp;&nbsp;<u>Reissuance of Series C Preferred Stock</u>**. Shares of Series C Preferred Stock that have been issued and reacquired by the Corporation in any manner, including shares purchased or redeemed or exchanged or converted, shall (upon compliance with any applicable provisions of the laws of Delaware) have the status of authorized but unissued shares of Preferred Stock of the Corporation undesignated as to series and may be designated or re-designated and issued or reissued, as the case may be, as part of any series of Preferred Stock of the Corporation, *provided* that any issuance of such shares as Series C Preferred Stock must be in compliance with the terms hereof.

**10.&nbsp;&nbsp;&nbsp;&nbsp;<u>Notices</u>**. Except as otherwise provided herein, all notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given: (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by e-mail of a PDF document if sent during normal business hours of the recipient, and on the next business day if sent after normal business hours of the recipient; or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent (a) to the Corporation, at its principal executive offices and (b) to any stockholder, at such holder's address at it appears in the stock records of the Corporation (or at such other address for a stockholder as shall be specified in a notice given in accordance with this **<u>Section 10</u>**).

**11.&nbsp;&nbsp;&nbsp;&nbsp;<u>Amendments and Waiver</u>**. Subject to **<u>Section 6.2</u>**, no provision of this Certificate of Designations may be amended, modified or waived, whether by merger, consolidation or otherwise, except by an instrument in writing executed by the Corporation and holders of at least a majority of the then-outstanding Shares of Series C Preferred Stock, and any such written amendment, modification or waiver will be binding upon the Corporation and each holder of Series C Preferred Stock; *provided*, that any amendment, whether by merger, consolidation or otherwise, to (A)(i) decrease the Initial Stated Value, Stated Value, Optional Redemption Price, Corporation Redemption Price, the Fundamental Change Redemption Price, Dividend Rate (including any increase thereto pursuant to any adjustments set forth herein) or any premium with respect to any Share of Series C Preferred Stock or otherwise amend or modify in any manner adverse to a holder of Series C Preferred Stock the Corporation's obligations to pay, or the circumstances and or timing under which the Corporation is obligated to offer or pay, the Optional Redemption Price, the Fundamental Change Redemption Price or the Corporation Redemption Price, (ii) adversely affect the right of a holder of Series C Preferred Stock to convert Series C Preferred Stock into Common Stock or otherwise modify the provisions with respect to conversion in a manner adverse to a holder of Series C Preferred Stock, or increase the Conversion Price (or any amendment, modification or waiver, whether by merger or otherwise, which would in its application increase the Conversion Price) (subject to such modifications as are required under this Certificate of Designations) or (iii) otherwise amend any other terms of the Series C Preferred Stock in a manner that would have a disproportionate adverse effect on any holder of the Series C Preferred Stock as compared to other holders of the Series C Preferred Stock (including the amendment or waiver of any provisions hereof requiring *pro rata* payments), requires the consent of holders of each Share of Series C Preferred Stock and to (B) without limiting the foregoing, amend or modify the provisions of **<u>Section 8.7</u>** requires the consent of each holder of Series C Preferred Stock affected thereby. Notwithstanding the foregoing, subject to compliance with applicable Law, technical and conforming modifications to this Certificate of Designations may be made by written agreement of the Corporation and the Apollo Investor so

------

long as the Apollo Investor satisfies the 50% Beneficial Holding Requirement at such time (but without the consent of any other holder of Shares of Series C Preferred Stock) to the extent necessary (A) to integrate the issuance of any Series C Preferred Stock issued in compliance with the terms of this Certificate of Designations and the Investment Agreement after the Initial Issue Date pursuant to subsequent Issue Dates in a manner consistent with **<u>Section 1.2</u>**, including, as may be necessary to establish such issuance as a fungibly traded class, so long as any such amendment or waiver does not adversely and disproportionately affect any holder of Shares (or commitments to purchase) any Series C Preferred Stock or (B) to cure any ambiguity, omission, defect or inconsistency. This Certificate of Designations shall cease to apply upon the first day on which no share of Series C Preferred Stock is outstanding.

**12.&nbsp;&nbsp;&nbsp;&nbsp;<u>Remedies; Specific Performance</u>**. The holders of Series C Preferred Stock shall have all remedies available at law or in equity for a breach of this Certificate of Designations, including the right to seek specific performance. The parties hereto agree that irreparable damage for which monetary relief, even if available, would not be an adequate remedy, would occur in the event that any provision of this Certificate of Designations is not performed in accordance with its specific terms or is otherwise breached. The parties acknowledge and agree that (a) the parties shall be entitled to seek an injunction or injunctions, specific performance or other equitable relief to prevent breaches of this Certificate of Designations and to enforce specifically the terms and provisions hereof without proof of damages or otherwise, this being in addition to any other remedy to which they are entitled under this Certificate of Designations and (b) the right of specific enforcement is an integral part of the transactions contemplated herein and without that right, none of the Corporation or any holder of Series C Preferred Stock would have entered into the transactions contemplated herein. The parties hereto agree not to assert that a remedy of specific enforcement is unenforceable, invalid, contrary to Laws or inequitable for any reason, and agree not to assert that a remedy of monetary damages would provide an adequate remedy or that the parties otherwise have an adequate remedy at law. The parties hereto acknowledge and agree that any party seeking an injunction or injunctions to prevent breaches of this Certificate of Designations and to enforce specifically the terms and provisions of this Certificate of Designations in accordance with this **<u>Section 12</u>** shall not be required to provide any bond or other security in connection with any such order or injunction.

**13.&nbsp;&nbsp;&nbsp;&nbsp;<u>Withholding</u>**. The Corporation and its paying agent shall be entitled to withhold Taxes on all payments on the Series C Preferred Stock or Common Stock or other securities issued upon conversion of the Series C Preferred Stock in each case to the extent required by applicable Law; *provided* that to the extent that the holders of Series C Preferred Stock have previously delivered an appropriate IRS Form W-8 or W-9 to the Corporation establishing an exemption for U.S. federal withholding (including backup withholding), the Corporation shall not be permitted to withhold unless the Corporation has provided such a holder advance written notice of its intent to withhold at least five (5) days prior to the payment of the amount subject to withholding, and has given such a holder a reasonable opportunity to provide any form or certificate available to reduce or eliminate such withholding. Within a reasonable amount of time after making such withholding payment, the Corporation shall furnish the applicable holder with copies of any tax certificate, receipt or other documentation reasonably acceptable to the holder evidencing such payment.

**14.&nbsp;&nbsp;&nbsp;&nbsp;<u>Tax Matters</u>**. The holders of Series C Preferred Stock and the Corporation agree (i) to treat the Series C Preferred Stock as "common stock" and not "preferred stock" for purposes of Section 305 of the Code and Treasury Regulations Section 1.305-5, (ii) not to treat any dividend paid on the Corporation's Common Stock in which the Series C Preferred Stock participates as giving rise to a "disproportionate distribution" within the meaning of Section 305(b)(2) of the Code, (iii) not to take any action that would reasonably be expected to cause any holder of the Series C

------

Preferred Stock to recognize taxable income by reason of the operation of Section 305(b)(2) of the Code and (iv) with respect to the Apollo Investor, in connection with any redemption of the Series C Preferred Stock, treat such redemption as a payment in exchange for stock pursuant to Section 302(a) of the Code, provided, that, the Apollo Investor has, prior to such redemption, provided the Corporation (A) with evidence reasonably satisfactory to the Corporation that it does not directly, indirectly or constructively own (taking into account the attribution rules of Section 318 of the Code) any stock of the Corporation other than the Series C Preferred Stock (or Common Stock acquired as a result of the conversion of the Series C Preferred Stock) and (B) with certification (1) attesting to the number of shares of Series C Preferred Stock and shares of Common Stock that the Apollo Investor directly, indirectly or constructively owns (taking into account the attribution rules of Section 318 of the Code) and (2) representing that it is not acquiring, as part of a plan that includes such redemption, any additional shares of Series C Preferred Stock or shares of Common Stock. The Corporation shall treat any adjustment to the Conversion Price pursuant to **<u>Section 9.7</u>** as being made pursuant to a "bona fide, reasonable, adjustment formula" within the meaning of Treasury Regulations Section 1.305-7(b) for U.S. federal and applicable state and local income Tax and withholding purposes. Neither the holders of Series C Preferred Stock nor the Corporation will, nor will permit their Affiliates to, take a contrary position to the foregoing without the other party's prior written consent unless otherwise required pursuant to (x) a change in Tax law or (y) a final determination within the meaning of Section 1313 of the Code.

**15.&nbsp;&nbsp;&nbsp;&nbsp;<u>Tax Classification</u>**. For so long as any shares of Series C Preferred Stock are outstanding, the Corporation shall be classified as a corporation for U.S. federal income tax purposes and shall not take any action that would cause it not to be a domestic corporation for U.S. federal income tax purposes or that would otherwise cause any Investor to own an interest in an entity that is not a domestic corporation for U.S. federal income tax purposes, in each case, without the consent of the Apollo Investor, which consent may be withheld in the Apollo Investor's sole discretion.

[SIGNATURE PAGE FOLLOWS]

------

IN WITNESS WHEREOF, the Corporation has caused this Certificate of Designations, Preferences and Rights to be executed this ____ day of _________, _____.

**QXO, INC.**

By:&nbsp;&nbsp;&nbsp;&nbsp;<u>&nbsp;&nbsp;&nbsp;&nbsp;</u><br>Name: <br>Title:

[Signature Page to Certificate of Designations, Preferences and Rights]

------

<u>Exhibit C</u>

<u>LIST OF RESTRICTED PERSONS</u>

## Exhibit 10.20

**Exhibit 10.20**

RESTRICTED STOCK UNIT AWARD AGREEMENT UNDER THE QXO, INC. 2024 OMNIBUS INCENTIVE COMPENSATION PLAN, dated as of [DATE] (the

"<u>Grant</u> <u>Date</u>") between QXO, INC., a Delaware corporation (the "<u>Company</u>" or "<u>OXO</u>"), and .

This Restricted Stock Unit Award Agreement (this "<u>Award</u> <u>Agreement</u>") sets forth the terms and conditions of an award of XX,XXX restricted stock units (this "<u>Award</u>") that are subject to the terms and conditions specified herein (each such restricted stock unit, an "<u>RSU</u>") and that are granted to you under the QXO, Inc. 2024 Omnibus Incentive Compensation Plan (the "<u>Plan</u>"). This Award provides you with the opportunity to earn Shares, subject to the terms of this Award Agreement.

You must affirmatively acknowledge and accept this Award Agreement within 120 days following the Grant Date. A failure to acknowledge and accept this Award Agreement within such 120 day period may result in forfeiture of this Award, effective as of the 121st day following the Grant Date.

THIS AWARD IS SUBJECT TO ALL TERMS AND CONDITIONS OF THE PLAN INCLUDING THE PLAN RULES, AND THIS AWARD AGREEMENT, INCLUDING THE DISPUTE RESOLUTION PROVISIONS SET FORTH IN SECTION 9 OF THIS AWARD AGREEMENT. BY ACCEPTING THIS AWARD, YOU SHALL HAVE CONFIRMED YOUR ACCEPTANCE OF THE TERMS AND CONDITIONS OF THIS

AWARD AGREEMENT.

SECTION 1. <u>The Plan</u>. This Award is made pursuant to the Plan, all the terms of which are hereby incorporated in this Award Agreement. In the event of any conflict between the terms of the Plan and the terms of this Award Agreement, the terms of the Plan shall govern.

SECTION 2. <u>Definitions</u>. Capitalized terms used in this Award Agreement that are not defined in this Award Agreement have the meanings as used or defined in the Plan. As used in this Award Agreement, the following terms have the meanings set forth below:

"<u>Business</u> <u>Day</u>" means a day that is not a Saturday, a Sunday or a day on which banking institutions are legally permitted to be closed in the City of New York.

"<u>Scheduled</u> <u>Vesting Date</u>" shall have the meaning given to such term in Section 3(a) of this Award Agreement.

"<u>Section</u> <u>409A</u>" means Section 409A of the Code, and the regulations and other interpretive guidance promulgated thereunder, as in effect from time to time.

SECTION 3. <u>Vesting and Settlement</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)<u>Regularly Scheduled Vesting</u>. Except as otherwise provided in this Award Agreement, the RSUs will become vested on the date of the Company's 2027 Annual Meeting of Stockholders ("<u>Scheduled Vesting Date</u>"), subject to your continued service as a director with the Company through the Scheduled Vesting Date.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)<u>Termination of</u> <u>Service</u>. Notwithstanding anything to the contrary in this Award Agreement or the Plan but subject to Section 3(c), all unvested RSUs will be forfeited upon your termination of service for any reason prior to the Scheduled Vesting Date, except that if your service terminates by reason of your death, all outstanding and unvested RSUs shall immediately vest in full.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)<u>Change of Control</u>. Immediately prior to a Change of Control that occurs prior to the Scheduled Vesting Date, if you continue to provide services through immediately prior to such Change of Control, all outstanding and unvested RSUs shall immediately vest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)<u>Settlement</u> <u>of Award</u>. Unless a deferral election has been properly made with respect to the Award in accordance with Plan procedures, if RSUs vest pursuant to the foregoing provisions of this Section 3, then as soon as administratively practicable, and in any event within thirty (30) days after any RSUs become vested, the Company shall deliver to you or your legal representative one Share for each vested RSU. If RSUs vest pursuant to the foregoing provisions of this Section 3 and a deferral election has been properly made with respect to the Award in accordance with Plan procedures, then as soon as administratively practicable after your service as a director of the Company ceases, and in any event within thirty (30) days after such cessation of service as a director of the Company, the Company shall deliver to you or your legal representative one Share for each vested RSU.

SECTION 4. <u>No Rights as a Stockholder</u>. You shall not have any rights or privileges of a stockholder with respect to the RSUs subject to this Award Agreement unless and until Shares are actually issued in settlement of this Award.

SECTION 5. <u>Non-Transferability of RSUs</u>. Unless otherwise provided by the Committee in its discretion, RSUs may not be sold, assigned, alienated, transferred, pledged, attached or otherwise encumbered except as provided in Section 9 of the Plan. Any purported sale, assignment, alienation, transfer, pledge, attachment or other encumbrance of RSUs in violation of the provisions of this Section 5 and Section 9 of the Plan shall be void.

SECTION 6. <u>Tax Obligations; Consents</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)<u>Tax Obligations</u>. The delivery of Shares pursuant to Section 3 of this Award Agreement is conditioned on satisfaction of any applicable withholding taxes in accordance with this Section 6(a) and Section 9 of the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)<u>Consents</u>. Your rights in respect of the RSUs are conditioned on the receipt to the full satisfaction of the Committee of any required consents that the Committee may determine to be necessary or advisable (including your consent to the Company's supplying to any third-party recordkeeper of the Plan such personal information as the Committee deems advisable to administer the Plan).

SECTION 7. <u>Successors and</u> <u>Assigns</u> <u>of the Company</u>. The terms and conditions of this Award Agreement shall be binding upon, and shall inure to the benefit of, the Company and its successors and assigns.

------

SECTION 8. <u>Committee</u> <u>Discretion</u>. The Committee shall have full and plenary discretion with respect to any actions to be taken or determinations to be made in connection with this Award Agreement, and its determinations shall be final, binding and conclusive.

SECTION 9. <u>Arbitration</u> <u>and</u> <u>Consent to Jurisdiction</u>. Any claims you wish to make arising out of or relating to this Agreement will be resolved by binding arbitration before a single arbitrator in the State of Delaware, or at another location as mutually agreed upon by the parties, administered by the American Arbitration Association ("AAA") in accordance with its Employment Arbitration Rules, and judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. This provision does not apply to claims that, under law, may not be subject to a pre-dispute arbitration agreement. Notwithstanding anything to the contrary under the Rules of the AAA or the general grant of authority to the arbitrator contained herein, the arbitrator shall have no jurisdiction or authority to compel any class or collective claim, to consolidate different arbitration proceedings or to join any other party to any arbitration between you and the Company. The arbitrator shall, for all such claims you wish to file, have the exclusive authority to determine the applicability, interpretation and enforceability of this Agreement, but shall have no jurisdiction or authority to compel any class or collective claim or to join any other party to an arbitration between you and the Company.

SECTION 10. <u>Notice</u>. Except as otherwise provided, the Company may give you notice at your last known principal residence listed on the Company's records. You, in turn, may give the Company notice to QXO, Inc., Five American Lane, Greenwich, CT 06831, Attention: Chief Legal Officer. Either you or the Company may provide another address for notice by written notice to the other. Notice is deemed given as follows: (a) when delivered personally;

&nbsp;&nbsp;&nbsp;&nbsp;(b) four (4) days after it is mailed by registered or certified mail, postage prepaid, return receipt requested or (b) one (1) day after it is sent by overnight courier service via UPS or FedEx.

SECTION 11. <u>Governing Law</u>. The validity, construction and effect of this Award Agreement in all respects shall be determined in accordance with the laws of the State of Delaware, without giving effect to the conflict of law principles thereof.

SECTION 12. <u>Headings and Construction</u>. Headings are given to the Sections and subsections of this Award Agreement solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of this Award Agreement or any provision thereof. Whenever the words "include," "includes" or "including" are used in this Award Agreement, they shall be deemed to be followed by the words "but not limited to". The term "or" is not exclusive.

SECTION 13. <u>Amendment of this Award Agreement</u>. The Committee may waive any conditions or rights under, amend any terms of, or alter, suspend, discontinue, cancel or terminate this Award Agreement prospectively or retroactively; <u>provided, however</u>, that, except as set forth in Section 14(c) of this Award Agreement, any such waiver, amendment, alteration, suspension, discontinuance, cancelation or termination that would materially and adversely impair your rights under this Award Agreement shall not to that extent be effective without your consent (it being understood, notwithstanding the foregoing proviso, that this Award Agreement and the RSUs shall be subject to the provisions of Section 7 of the Plan).

------

SECTION 14. <u>Section 409A</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)It is intended that the provisions of this Award Agreement comply with Section 409A or an applicable exemption thereunder, and all provisions of this Award Agreement shall be construed and interpreted in a manner consistent with such intention.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)If, at the time of your separation from service (within the meaning of Section 409A), (i) you are a specified employee (within the meaning of Section 409A and using the identification methodology selected by the Company from time to time) and (ii) the Company shall make a good faith determination that an amount payable hereunder constitutes deferred compensation (within the meaning of Section 409A) the payment of which is required to be delayed pursuant to the six-month delay rule set forth in Section 409A in order to avoid taxes or penalties under Section 409A, then the Company shall not pay such amount on the otherwise scheduled payment date but shall instead pay it, without interest, on the first Business

Day after such six-month period. For purposes of Section 409A, each payment hereunder will be deemed to be a separate payment as permitted under Treasury Regulations Section 1.409A- 2(b)(2)(iii).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Notwithstanding any provision of this Award Agreement to the contrary, in light of the uncertainty with respect to the proper application of Section 409A, the Company reserves the right to make amendments to this Award Agreement as the Company deems necessary or desirable to avoid the imposition of taxes or penalties under Section 409A. In any case, you shall be solely responsible and liable for the satisfaction of all taxes and penalties that may be imposed on you or for your account in connection with this Award Agreement (including any taxes and penalties under Section 409A), and neither the Company nor any of its Affiliates shall have any obligation to indemnify or otherwise hold you harmless from any or all of such taxes or penalties.

SECTION 15. <u>Counterparts</u>. This Award Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. You and the Company hereby acknowledge and agree that signatures delivered by facsimile or electronic means (including by "pdf') shall be deemed effective for all purposes.

SECTION 16. <u>Securities Trade Monitoring Policy</u>. Unless otherwise elected by the Committee, you are required to maintain a securities brokerage account with the Company's preferred broker in order to receive any Shares issuable under this Award, in accordance with the Company securities trade monitoring policy (the "<u>Trade Monitoring Policy</u>"). Any Shares issued to you pursuant to this Award Agreement shall be deposited in your account with the Company's preferred broker in accordance with the terms set forth herein. You hereby acknowledge that you have reviewed, and agree to comply with, the terms of the Trade Monitoring Policy, and that this Award, and the value of any Shares issued pursuant to this Award Agreement, shall be subject to forfeiture or recoupment by the Company, as applicable,

in the event of your noncompliance with the Trade Monitoring Policy, as it may be in effect from time to time.

------

SECTION 17. <u>Recoupment of</u> <u>Award</u>. You acknowledge and agree that in accordance with Section 9 of the Plan, the Company may recoup all or any portion of this Award in accordance with any compensation recovery policy maintained by the Company, as in effect from time to time, including any such policy mandated by applicable law or Applicable Exchange rules. This Section 17 and Section 9 of the Plan shall not be the Company's exclusive remedy with respect to such matters.

SECTION 18. <u>Imposition of Other Requirements</u>. The Company reserves the right to impose other requirements on your participation in the Plan, on this Award and on any Shares acquired upon settlement of this Award, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require you to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.

------

IN WITNESS WHEREOF, the parties have duly executed this Award Agreement as of the date first written above.

QXO, INC.

by&nbsp;&nbsp;&nbsp;&nbsp;<u>&nbsp;&nbsp;&nbsp;&nbsp;/s/ Josephine Berisha&nbsp;&nbsp;&nbsp;&nbsp;</u><br>Name:&nbsp;&nbsp;&nbsp;&nbsp;Josephine Berisha<br>Title:&nbsp;&nbsp;&nbsp;&nbsp;Chief Human Resources Officer

ACKNOWLEDGED AND AGREED:

###REQUIRED_SIGNATURE###

______________________________________

Name: Director First Name Last Name

## Exhibit 10.21

**Exhibit 10.21**

PERFORMANCE-BASED RESTRICTED STOCK UNIT AWARD AGREEMENT UNDER THE QXO, INC. 2024 OMNIBUS INCENTIVE COMPENSATION PLAN, dated as of [DATE] (the "<u>Grant Date</u>") between QXO, INC., a Delaware corporation (the "<u>Company</u>" or "<u>QXO</u>"), and [NAME].

This Performance-Based Restricted Stock Unit Award Agreement (this "<u>Award Agreement</u>") sets forth the terms and conditions of an award of performance-based restricted stock units (this "<u>Award</u>" and each such unit, a "<u>PSU</u>") with respect to a target number of Shares (the "<u>Target PSUs</u>") equal to [#], which Award is subject to the terms and conditions specified herein and is granted to you under the QXO, Inc. 2024 Omnibus Incentive Compensation Plan (the "<u>Plan</u>"). This Award provides you with the opportunity to earn Shares, subject to the terms of this Award Agreement.

You must affirmatively acknowledge and accept this Award Agreement within 120 days following the Grant Date. A failure to acknowledge and accept this Award Agreement within such 120 day period may result in forfeiture of this Award, effective as of the 121st day following the Grant Date.

THIS AWARD IS SUBJECT TO ALL TERMS AND CONDITIONS OF THE PLAN INCLUDING THE PLAN RULES AND THIS AWARD AGREEMENT, INCLUDING THE DISPUTE RESOLUTION PROVISIONS SET FORTH IN SECTION 9 OF THIS AWARD AGREEMENT. BY ACCEPTING THIS AWARD, YOU SHALL HAVE CONFIRMED YOUR ACCEPTANCE OF THE TERMS AND CONDITIONS OF THIS AWARD AGREEMENT.

SECTION 1.<u>The Plan</u>. This Award is made pursuant to the Plan, all the terms of which are hereby incorporated in this Award Agreement. In the event of any conflict between the terms of the Plan and the terms of this Award Agreement, the terms of the Plan shall govern.

SECTION 2.<u>Definitions</u>. Capitalized terms used in this Award Agreement that are not defined in this Award Agreement have the meanings as used or defined in the Plan. As used in this Award Agreement, the following terms have the meanings set forth below:

"<u>Annual Reset PSUs</u>" means [50% of the Target PSUs. The Annual Reset PSUs are divided into three tranches (each, an "<u>Annual Tranche</u>") with the first Annual Tranche consisting of 25% of the total number of Target PSUs and each of the second and third Annual Tranche consisting of 12.5% of the total number of Target PSUs.]

"<u>Business Day</u>" means a day that is not a Saturday, a Sunday or a day on which banking institutions are legally permitted to be closed in the City of New York.

"<u>Cause</u>" has the meaning given to such term in the Plan; <u>provided</u> that if, at the applicable time, you are party to an Employment Agreement or you are a participant in the Severance Plan, then Cause has the meaning given to such term in the Employment Agreement or the Severance Plan, as applicable

"<u>Cliff PSUs</u>" means the [50% of the Target PSUs that are not Annual Reset PSUs. The Cliff PSUs are treated together as a single tranche (the "<u>Cliff Tranche</u>").]

"<u>Determination Date</u>" means the date following the completion of a Performance Period on which the Committee certifies the level of achievement of the Performance Goal, which shall be no later than 45 days following the end of the applicable Performance Period. After the occurrence of a Change of Control, the Determination Date shall refer to the last day of the applicable Performance Period.

------

"<u>Disability</u>" has the meaning given to such term in the Company's (or as, relevant, any Affiliate's) long-term disability plan applicable to you; <u>provided</u> that if, at the applicable time, you are party to an Employment Agreement or you are a participant in the Severance Plan, then Disability has the meaning given to such term in the Employment Agreement or the Severance Plan, as applicable.

"<u>Earned PSUs</u>" means the number of PSUs subject to an Annual Tranche or subject to the Cliff Tranche that are earned based on the actual level of achievement of the applicable Performance Goal, as certified by the Committee on the Determination Date, or that are otherwise earned in accordance with this Award Agreement. The number of Earned PSUs may range from [0% to [###]%]<sup>1</sup> of the number of Target PSUs.

"<u>Employment Agreement</u>" means any individual employment agreement between you and the Company or any of its Subsidiaries, as in effect from time to time.

"<u>Good Reason</u>" if, at the applicable time, you are party to an Employment Agreement or a participant in the Severance Plan, has the meaning given to such term in your Employment Agreement or the Severance Plan, as applicable. If, at the applicable time, you are not party to an Employment Agreement and you are not a participant in the Severance Plan, then the term Good Reason shall not apply to you.

"<u>Performance Goal</u>" means each market-based performance goal applicable to each Annual Tranche or the Cliff PSUs, as set forth in <u>Exhibit A</u>.

"<u>Performance Period</u>" means for the first Annual Tranche, the period commencing on the Grant Date and ending on December 31, [####]; for each of the remaining Annual Tranches, the period commencing on January 1 and ending on December 31 of each of the [####] calendar years, respectively; and for the Cliff Tranche, the period commencing on the Grant Date and ending on December 31, [####].

"<u>Per Tranche Target PSUs</u>" means with respect to each Annual Tranche and with respect to the Cliff Tranche, the portion of the Target PSUs that is subject to such tranche.

"<u>Section 409A</u>" means Section 409A of the Code, and the regulations and other interpretive guidance promulgated thereunder, as in effect from time to time.

"<u>Severance Plan</u>" means the QXO, Inc. Severance Plan, as in effect from time to time.

SECTION 3.<u>Vesting and Settlement</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)<u>Regularly Scheduled Vesting</u>. Except as otherwise provided in this Award Agreement, the Earned PSUs (if any) relating to each Annual Tranche or to the Cliff Tranche, as applicable, determined based on the actual level of achievement of the Performance Goal relating to the applicable Performance Period as certified by the Committee, shall vest on the applicable Determination Date for such Performance Period contingent upon your continued employment through such Determination Date. Except as otherwise provided in this Award Agreement, no PSUs shall be earned and payable with respect to the Award unless the Committee has certified the actual level of achievement of the Performance Goal with respect to the applicable Performance Period for a relevant portion of the Award. The Committee shall have sole discretion to determine the actual level of achievement of the Performance Goal.

<sup>1</sup> Range of Earned PSUs varies by award recipient.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)<u>Termination of Employment</u>. Notwithstanding anything to the contrary in this Award Agreement or the Plan but subject to Section 3(c) and subject to any more favorable provisions regarding treatment on termination of employment set forth in your Employment Agreement, if applicable, all unvested PSUs will be forfeited upon your termination of employment for any reason prior to the corresponding Determination Date, except that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)*Death*. If, by reason of your death, your employment terminates while PSUs remain outstanding, you will vest in full in the Target PSUs that remain outstanding at the time of your termination of employment, except that (A) if your employment terminates after the end of a Performance Period but prior to the Determination Date for such Performance Period, then rather than vesting in the Target PSUs associated with such Performance Period, you shall vest as of such Determination Date in the Earned PSUs for the Annual Tranche (and, if applicable, the Cliff Tranche) relating to such completed Performance Period and (B) if your termination of employment occurs after a Change of Control, then rather than vesting in the Target PSUs, you will instead vest in full in the number of Earned PSUs (computed in accordance with Section 3(c)) that remain outstanding at the time of your termination of employment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)*Disability, Involuntary Not for Cause Termination or Resignation for Good Reason (other than During a CIC Period)*. Except as otherwise provided by Section 3(b)(iii) below with respect to a CIC Period (as defined below), if by reason of your Disability, your involuntary termination by the Company without Cause, or your resignation for Good Reason as defined in your Employment Agreement, if applicable (A) your employment terminates during a Performance Period, you shall vest as of the date of your termination of employment in a prorated portion of the Per Tranche Target PSUs for each of the Annual Tranche that corresponds to the Performance Period in which your termination of employment occurs and for the Cliff Tranche, with such prorated portion (calculated separately for each of the Annual Tranche and the Cliff Tranche) equal to the Per Tranche Target PSUs for the Annual Tranche or the Cliff Tranche, as applicable, multiplied by a fraction, the numerator of which is the total number of days from and excluding the first day of the applicable Performance Period to and including the date of your termination of employment and the denominator of which is the total number of days in the applicable Performance Period; and (B) your employment terminates after the end of a Performance Period but prior to the Determination Date for such Performance Period, you shall vest as of such Determination Date in the Earned PSUs for the Annual Tranche (and, if applicable, the Cliff Tranche) relating to such completed Performance Period. All remaining outstanding unvested PSUs that do not vest pursuant to the immediately preceding sentence (including all unvested PSUs that correspond to a Performance Period that has not yet commenced as of the date of your termination of employment) shall be forfeited. If your termination of employment due to your Disability or involuntary termination by the Company without Cause occurs after a CIC Period, then for purposes of applying the foregoing provisions of this Section 3(b)(ii), with respect to subclause (A), the reference to "Per Tranche Target PSUs" shall instead refer to the total number of Earned PSUs (computed in accordance with Section 3(c)) that correspond to the Performance Period during which your termination of employment occurs and subclause (B) shall not apply.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)*Disability, Involuntary Not for Cause Termination, or Resignation for Good Reason during a CIC Period.* If, during the two-year period commencing on a Change of Control (the "<u>CIC Period</u>"), your employment terminates by reason of your Disability, your employment is involuntarily terminated by the Company without Cause or you resign for Good

------

Reason, then all Earned PSUs (computed in accordance with Section 3(c)) that remain outstanding at the time of your termination of employment will immediately vest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)<u>Change of Control</u>. In the event of a Change of Control, the number of Earned PSUs will be calculated and determined by the Committee immediately prior to the Change of Control in accordance with clauses (i), (ii), (iii) and (iv) below. Such Earned PSUs shall remain outstanding and shall vest subject to your continued employment through the applicable Determination Date, except as otherwise provided in Section 3(b):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)if the Change of Control occurs within 45 days after the completion of a Performance Period for an Annual Tranche (and, if applicable, for the Cliff Tranche), the Earned PSUs for the applicable Annual Tranche (and, if applicable, for the Cliff Tranche) will be determined by the Committee prior to the Change of Control based on actual performance results for the applicable Performance Period;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)for the Performance Period corresponding to an Annual Tranche in which the Change of Control occurs, the Earned PSUs for such Annual Tranche shall be equal to the greater of (A) 100% of the Per Tranche Annual PSUs for such Annual Tranche and (B) the number of PSUs that would be earned pursuant to such Annual Tranche assuming that such Performance Period terminated on the second to last Business Day prior to the Change of Control and using the value of the Change of Control consideration paid in respect of each outstanding Share (as determined by the Committee) to determine the Ending Price for the Shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)for each Performance Period corresponding to an Annual Tranche that has not commenced as of the date of the Change of Control, the Earned PSUs for such Annual Tranche shall be equal to the greater of (A) 100% of the Per Tranche Annual PSUs for such Annual Tranche and (B) the number of PSUs that would be earned pursuant to such Annual Tranche based on the CIC Cumulative Percentage (as defined in <u>Exhibit A</u>); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)if the Change of Control occurs during the Performance Period for the Cliff Tranche, the number of Earned PSUs for the Cliff Tranche shall be equal to the greater of (A) 100% of the Per Tranche Target PSUs for the Cliff Tranche and (B) number of PSUs that would be earned pursuant to the Cliff Tranche based on the CIC Cumulative Percentage.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)Any PSUs that do not become Earned PSUs by operation of clauses (i)-(iv) shall be permanently forfeited upon the date of the Change of Control for no consideration. If the Earned PSUs as determined pursuant to clauses (i)-(iv) are not replaced in compliance with Section 8(b) of the Plan, then such Earned PSUs shall vest immediately upon the completion of the Change of Control as described in Section 8(e) of the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)<u>Settlement of Award</u>. If Earned PSUs vest pursuant to the foregoing provisions of this Section 3, then as soon as practicable following the date on which such Earned PSUs become vested and no later than 30 days thereafter, the Company shall deliver to you or your legal representative one Share for each Earned PSU that has become vested.

SECTION 4.<u>No Rights as a Stockholder</u>. You shall not have any rights or privileges of a stockholder with respect to the PSUs subject to this Award Agreement unless and until Shares are actually issued in settlement of this Award.

------

SECTION 5.<u>Non-Transferability of PSUs</u>. Unless otherwise provided by the Committee in its discretion, PSUs may not be sold, assigned, alienated, transferred, pledged, attached or otherwise encumbered except as provided in Section 9(a) of the Plan. Any purported sale, assignment, alienation, transfer, pledge, attachment or other encumbrance of PSUs in violation of the provisions of this Section 5 and Section 9(a) of the Plan shall be void.

SECTION 6.<u>Withholding: Consents</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)<u>Withholding</u>. The delivery of Shares pursuant to Section 3 of this Award Agreement is conditioned on satisfaction of any applicable withholding taxes in accordance with this Section 6(a) and Section 9(d) of the Plan. No later than the date as of which an amount first becomes includible in your gross income for Federal, state, local or foreign income tax purposes with respect to any PSUs, you shall pay to the Company, or make arrangements satisfactory to the Company regarding the payment of, any Federal, state, local and foreign taxes that are required by applicable laws and regulations to be withheld with respect to such amount. In the event that there is withholding tax liability in connection with the settlement of the PSUs, unless otherwise determined by the Committee such withholding tax liability shall be satisfied by the Company withholding from the number of Shares you would be entitled to receive upon settlement of the PSUs, a number of Shares having a Fair Market Value (which shall either have the meaning set forth in the Plan or shall have such other meaning as determined by the Company in accordance with applicable withholding requirements) equal to such withholding tax liability.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)<u>Consents</u>. Your rights in respect of the PSUs are conditioned on the receipt to the full satisfaction of the Committee of any required consents that the Committee may determine to be necessary or advisable (including your consent to the Company's supplying to any third-party recordkeeper of the Plan such personal information as the Committee deems advisable to administer the Plan).

SECTION 7.<u>Successors and Assigns of the Company</u>. The terms and conditions of this Award Agreement shall be binding upon and shall inure to the benefit of the Company and its successors and assigns.

SECTION 8.<u>Committee Discretion</u>. The Committee shall have full and plenary discretion with respect to any actions to be taken or determinations to be made in connection with this Award Agreement, and its determinations shall be final, binding and conclusive.

SECTION 9.<u>Arbitration and Consent to Jurisdiction</u>. The provisions of the Employment Agreement or Confidential Information Protection Agreement between you and the Company relating to arbitration and consent to jurisdiction shall apply to this Award Agreement as if set forth herein, *mutatis mutandis.* If you are not party to an Employment Agreement or Confidential Information Protection Agreement with the Company, then any claims you wish to make arising out of or relating to this Agreement will be resolved by binding arbitration before a single arbitrator in the State of Delaware, or at another location as mutually agreed upon by the parties, administered by the American Arbitration Association ("AAA") in accordance with its Employment Arbitration Rules, and judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. This provision does not apply to claims that, under law, may not be subject to a pre-dispute arbitration agreement. Notwithstanding anything to the contrary under the Rules of the AAA or the general grant of authority to the arbitrator contained herein, the arbitrator shall have no jurisdiction or authority to compel any class or collective claim, to consolidate different arbitration proceedings or to join any other party to any

------

arbitration between you and the Company. The arbitrator shall, for all such claims you wish to file, have the exclusive authority to determine the applicability, interpretation and enforceability of this Agreement, but shall have no jurisdiction or authority to compel any class or collective claim or to join any other party to an arbitration between you and the Company.

SECTION 10.<u>Notice</u>. Except as otherwise provided, the Company may give you notice at your last known principal residence listed on the Company's records. You, in turn, may give the Company notice to QXO, Inc., Five American Lane, Greenwich, CT 06831, Attention: Chief Legal Officer. Either you or the Company may provide another address for notice by written notice to the other. Notice is deemed given as follows: (a) when delivered personally; (b) four (4) days after it is mailed by registered or certified mail, postage prepaid, return receipt requested or (c) one (1) day after it is sent by overnight courier service via UPS or FedEx.

SECTION 11.<u>Governing Law</u>. The validity, construction and effect of this Award Agreement in all respects shall be determined in accordance with the laws of the State of Delaware, without giving effect to the conflict of law principles thereof.

SECTION 12.<u>Headings and Construction</u>. Headings are given to the Sections and subsections of this Award Agreement solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of this Award Agreement or any provision thereof. Whenever the words "include," "includes" or "including" are used in this Award Agreement, they shall be deemed to be followed by the words "but not limited to." The term "or" is not exclusive.

SECTION 13.<u>Amendment of this Award Agreement</u>. The Committee may waive any conditions or rights under, amend any terms of, or alter, suspend, discontinue, cancel or terminate this Award Agreement prospectively or retroactively; <u>provided</u>, <u>however</u>, that, except as set forth in Section 14(c) of this Award Agreement, any such waiver, amendment, alteration, suspension, discontinuance, cancelation or termination that would materially and adversely impair your rights under this Award Agreement shall not to that extent be effective without your consent (it being understood, notwithstanding the foregoing proviso, that this Award Agreement and the PSUs shall be subject to the provisions of Section 7(c) of the Plan).

SECTION 14.<u>Section 409A</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)It is intended that the provisions of this Award Agreement comply with Section 409A or an applicable exemption thereunder, and all provisions of this Award Agreement shall be construed and interpreted in a manner consistent with such intention.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)If, at the time of your separation from service (within the meaning of Section 409A), (i) you are a specified employee (within the meaning of Section 409A and using the identification methodology selected by the Company from time to time) and (ii) the Company shall make a good faith determination that an amount payable hereunder constitutes deferred compensation (within the meaning of Section 409A) the payment of which is required to be delayed pursuant to the six-month delay rule set forth in Section 409A in order to avoid taxes or penalties under Section 409A, then the Company shall not pay such amount on the otherwise scheduled payment date but shall instead pay it, without interest (except as otherwise provided in your Employment Agreement), on the first Business Day after such six-month period. For purposes of Section 409A, each payment hereunder will be deemed to be a separate payment as permitted under Treasury Regulations Section 1.409A-2(b)(2)(iii).

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Notwithstanding any provision of this Award Agreement to the contrary, in light of the uncertainty with respect to the proper application of Section 409A, the Company reserves the right to make amendments to this Award Agreement as the Company deems necessary or desirable to avoid the imposition of taxes or penalties under Section 409A. In any case, you shall be solely responsible and liable for the satisfaction of all taxes and penalties that may be imposed on you or for your account in connection with this Award Agreement (including any taxes and penalties under Section 409A), and neither the Company nor any of its Affiliates shall have any obligation to indemnify or otherwise hold you harmless from any or all of such taxes or penalties.

SECTION 15.<u>Counterparts</u>. This Award Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. You and the Company hereby acknowledge and agree that signatures delivered by facsimile or electronic means (including by "pdf") shall be deemed effective for all purposes.

SECTION 16.<u>Lock-Up</u>. All Shares received on settlement of the Award (net of applicable tax withholding) shall be subject to a lock-up from the date hereof until [DATE] on sales, offers, pledges, contracts to sell, grants of any option, right or warrant to purchase, or other transfers or dispositions, whether directly or indirectly; <u>provided</u>, <u>however</u>, that such lock-up may be waived in the sole discretion of the Committee and shall not apply after a Change of Control or after your death.

SECTION 17.<u>Securities Trade Monitoring Policy</u>. Unless otherwise elected by the Committee, you are required to maintain a securities brokerage account with the Company's preferred broker in order to receive any Shares issuable under this Award, in accordance with the Company's securities trade monitoring policy (the "<u>Trade Monitoring Policy</u>"). Any Shares issued to you pursuant to this Award Agreement shall be deposited in your account with the Company's preferred broker in accordance with the terms set forth herein. You hereby acknowledge that you have reviewed, and agree to comply with, the terms of the Trade Monitoring Policy, and that this Award, and the value of any Shares issued pursuant to this Award Agreement, shall be subject to forfeiture or recoupment by the Company, as applicable, in the event of your noncompliance with the Trade Monitoring Policy, as it may be in effect from time to time.

SECTION 18.<u>Recoupment of Award</u>. You acknowledge and agree that in accordance with Section 9(n) of the Plan, the Company may recoup all or any portion of this Award in accordance with any compensation recovery policy maintained by the Company, as in effect from time to time, including any such policy mandated by applicable law or Applicable Exchange rules. This Section 18 and Section 9(n) of the Plan shall not be the Company's exclusive remedy with respect to such matters.

SECTION 19.<u>Imposition of Other Requirements</u>. The Company reserves the right to impose other requirements on your participation in the Plan, on this Award and on any Shares acquired upon settlement of this Award, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require you to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.

------

IN WITNESS WHEREOF, the parties have duly executed this Award Agreement as of the date first written above.

---

| | |
|:---|:---|
| QXO, INC. | QXO, INC. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By |
| | /s/ Josephine Berisha |
| | Name:&nbsp;&nbsp;&nbsp;&nbsp;Josephine Berisha |
| | Title: Chief Human Resources Officer&nbsp;&nbsp;&nbsp;&nbsp; |

---

[NAME]<br>

------

**Exhibit A<br>Performance Goals**

## Exhibit 21.1

**Exhibit 21.1**

**Significant Subsidiaries of QXO, Inc.**

The following table sets forth, as of December 31, 2025, the Registrant's significant operating subsidiaries and other associated companies and their respective incorporation jurisdictions. The Registrant owns 100% of the voting securities of each of the subsidiaries listed below. There are no subsidiaries not listed in the table, which would, in the aggregate, be considered significant.

---

| | |
|:---|:---|
| **Active Subsidiaries** | **Jurisdiction of Incorporation** |
| QXO Building Products, Inc. | Delaware |

---

## Exhibit 23.1

**Exhibit 23.1**

<u>CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</u>

We consent to the incorporation by reference in Registration Statement No. 333-281084 on Form S-3 and Registration Statement Nos. 333-281106 and 333-286815 on Form S-8 of our report dated February 27, 2026, relating to the financial statements of QXO, Inc. appearing in this Annual Report on Form 10-K for the year ended December 31, 2025.

/s/ DELOITTE & TOUCHE LLP

Tempe, Arizona

February 27, 2026

## Exhibit 23.2

**Exhibit 23.2**

<u>INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM'S CONSENT</u>

We consent to the incorporation by reference in the Registration Statement on Form S-3 (No. 333-281084) and in the Registration Statements on Form S-8 (Nos. 333-281106 and 333-286815) of our report dated March 4, 2025, relating to the financial statements appearing in the Annual Report on Form 10-K of QXO, Inc. for the year ended December 31, 2025.

/s/ MARCUM LLP

Marlton, New Jersey

February 27, 2026

## Exhibit 23.3

**Exhibit 23.3**

<u>CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</u>

We consent to the incorporation by reference in Registration Statement No. 333-281084 on Form S-3 and Registration Statement Nos. 333-281106 and 333-286815 on Form S-8 of our report dated February 27, 2026, relating to the financial statements of QXO Building Products, Inc. appearing in this Annual Report on Form 10-K for the year ended December 31, 2025.

/s/ DELOITTE & TOUCHE LLP

Tempe, Arizona

February 27, 2026

## Exhibit 23.4

**Exhibit 23.4**

<u>CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</u>

We consent to the incorporation by reference in the following Registration Statements:

&nbsp;&nbsp;&nbsp;&nbsp;1. Registration Statement of QXO, Inc. on Form S-3 (No. 333-281084),

&nbsp;&nbsp;&nbsp;&nbsp;2. Registration Statements of QXO, Inc. on Form S-8 (Nos. 333-281106 and 333-286815) pertaining to the 2024 Omnibus Incentive Compensation Plan of QXO, Inc.;

of our report dated February 27, 2025, with respect to the consolidated financial statements of QXO Building Products, Inc. (formerly known as Beacon Roofing Supply, Inc.) included in this Annual Report (Form 10-K) of QXO, Inc. for the year ended December 31, 2025.

/s/ Ernst & Young LLP

Tysons, Virginia

February 27, 2026

## Exhibit 31.1

**Exhibit 31.1**

**CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER**

**PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 302 OF**

**THE SARBANES-OXLEY ACT OF 2002**

I, Brad Jacobs, certify that:

1. I have reviewed this Annual Report on Form 10-K of QXO, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13-a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Dated: February 27, 2026 | By: | /s/ Brad Jacobs |
|  |  | Brad Jacobs<br>Chief Executive Officer |

---

## Exhibit 31.2

**Exhibit 31.2**

**CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER**

**PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 302 OF**

**THE SARBANES-OXLEY ACT OF 2002**

I, Ihsan Essaid, certify that:

1. I have reviewed this Annual Report on Form 10-K of QXO, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13-a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Dated: February 27, 2026 | By: | /s/ Ihsan Essaid |
|  |  | Ihsan Essaid<br>Chief Financial Officer |

---

## Exhibit 32.1

**Exhibit 32.1**

**CERTIFICATION PURSUANT TO**

**18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF**

**THE SARBANES-OXLEY ACT OF 2002**

In connection with this Annual Report on Form 10-K of QXO, Inc. (the "Company") for the fiscal year ended December 31, 2025, as filed with the U.S. Securities and Exchange Commission on the date hereof (the "Report"), I, Brad Jacobs, Chief Executive Officer of the Company, hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| | | |
|:---|:---|:---|
| Dated: February 27, 2026 | By: | /s/ Brad Jacobs |
|  |  | Brad Jacobs<br>Chief Executive Officer |

---

This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

## Exhibit 32.2

**Exhibit 32.2**

**CERTIFICATION PURSUANT TO**

**18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF**

**THE SARBANES-OXLEY ACT OF 2002**

In connection with this Annual Report on Form 10-K of QXO, Inc. (the "Company") for the fiscal year ended December 31, 2025, as filed with the U.S. Securities and Exchange Commission on the date hereof (the "Report"), I, Ihsan Essaid, Chief Financial Officer of the Company, hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| | | |
|:---|:---|:---|
| Dated: February 27, 2026 | By: | /s/ Ihsan Essaid |
|  |  | Ihsan Essaid<br>Chief Financial Officer |

---

This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

## Exhibit 99.1

**Exhibit 99.1**

**PREDECESSOR FINANCIAL INFORMATION**

**QXO BUILDING PRODUCTS, INC.**

**For the Period from January 1, 2025 through April 28, 2025** 

**TABLE OF CONTENTS** 

---

| | | |
|:---|:---|:---|
| <u>[Item 8.](#i7eff095359b24f1dacaae007b811cb94_13)</u> | <u>[Report of Independent Registered Public Accounting Firm (PCAOB ID: 34)](#i7eff095359b24f1dacaae007b811cb94_7)</u> | <u>[2](#i7eff095359b24f1dacaae007b811cb94_7)</u> |
|  | <u>[Consolidated Financial Statements](#i7eff095359b24f1dacaae007b811cb94_13)</u> | <u>[3](#i7eff095359b24f1dacaae007b811cb94_13)</u> |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Consolidated Statements of Operations](#i7eff095359b24f1dacaae007b811cb94_19)</u> | <u>[3](#i7eff095359b24f1dacaae007b811cb94_19)</u> |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Consolidated Statements of Comprehensive (Loss) Income](#i7eff095359b24f1dacaae007b811cb94_22)</u> | <u>[4](#i7eff095359b24f1dacaae007b811cb94_22)</u> |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Consolidated Statements of Stockholders](#i7eff095359b24f1dacaae007b811cb94_25)</u><u>'</u> <u>Equity</u> | <u>[5](#i7eff095359b24f1dacaae007b811cb94_25)</u> |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Consolidated Statements of Cash Flows](#i7eff095359b24f1dacaae007b811cb94_31)</u> | <u>[6](#i7eff095359b24f1dacaae007b811cb94_31)</u> |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Notes to the Consolidated Financial Statements](#i7eff095359b24f1dacaae007b811cb94_34)</u> | <u>[7](#i7eff095359b24f1dacaae007b811cb94_34)</u> |

---

------

**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

To the Stockholders and the Board of Directors of QXO, Inc.

**Opinion on the Financial Statements**

We have audited the accompanying consolidated statements of operations, comprehensive (loss) income, stockholders' equity, and cash flows for the period from January 1, 2025 through April 28, 2025, and the related notes (collectively referred to as the "financial statements") of QXO Building Products, Inc. (the "Company"). In our opinion, the financial statements present fairly, in all material respects, the results of the Company's operations and its cash flows for the period from January 1, 2025 through April 28, 2025, in conformity with accounting principles generally accepted in the United States of America.

**Basis for Opinion**

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

**Critical Audit Matter**

Critical audit matters are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.

/s/ DELOITTE & TOUCHE LLP

Tempe, Arizona

February 27, 2026

We have served as the Company's auditor since 2025.

------

**Item 8. Financial Statements and Supplementary Data (as predecessor)**

**QXO BUILDING PRODUCTS, INC.**

**Consolidated Statements of Operations**

(in millions)

---

| | |
|:---|:---|
| | **Period from <br>January 1, 2025 <br>through <br>April 28, 2025** |
| Net sales | $2694.6 |
| &nbsp;&nbsp;&nbsp;&nbsp;Cost of products sold | 2029.8 |
| Gross profit | 664.8 |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating expense: |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Selling, general and administrative | 628.1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation | 41.6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization | 30.1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expense | 699.8 |
| Loss from operations | (35.0) |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense, net | (58.6) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other income, net | 2.7 |
| Loss before benefit from income taxes | (90.9) |
| &nbsp;&nbsp;&nbsp;&nbsp;Benefit from income taxes | (19.0) |
| Net loss | $(71.9) |

---

*See accompanying notes to the consolidated financial statements.*

------

**QXO BUILDING PRODUCTS, INC.**

**Consolidated Statements of Comprehensive (Loss) Income**

(in millions)

---

| | |
|:---|:---|
| | **Period from <br>January 1, 2025<br>through <br>April 28, 2025** |
| Net loss | $(71.9) |
| Other comprehensive income (loss): |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Foreign currency translation adjustment | 5.4 |
| &nbsp;&nbsp;&nbsp;&nbsp;Unrealized loss due to change in fair value of derivative financial instruments, net of tax | (5.0) |
| &nbsp;&nbsp;&nbsp;&nbsp;Derivative financial instruments reclassified to earnings, net of tax | 0.6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other comprehensive income | 1.0 |
| Comprehensive loss | $(70.9) |

---

*See accompanying notes to the consolidated financial statements.*

------

**QXO BUILDING PRODUCTS, INC.** 

**Consolidated Statements of Stockholders**' **Equity** 

(in millions)

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Common Stock** | **Common Stock** | **Additional Paid-in Capital** | **Retained Earnings** | **Accumulated Other Comprehensive Income (Loss)** | |
| | **Shares** | **Amount** | **Additional Paid-in Capital** | **Retained Earnings** | **Accumulated Other Comprehensive Income (Loss)** |<br>**Total** |
| Balance as of January 1, 2025 | 61.5 | $0.6 | $1264.4 | $753.7 | $(26.2) | $1992.5 |
| &nbsp;&nbsp;&nbsp;&nbsp;Issuance of common stock, net of shares withheld for taxes | 0.7 |  | 8.2 |  |  | 8.2 |
| &nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation |  |  | 12.5 |  |  | 12.5 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other comprehensive income |  |  |  |  | 1.0 | 1.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net loss |  |  |  | (71.9) |  | (71.9) |
| Balance as of April 28, 2025 | 62.2 | $0.6 | $1285.1 | $681.8 | $(25.2) | $1942.3 |

---

*See accompanying notes to the consolidated financial statements.* 

------

**QXO BUILDING PRODUCTS, INC.**

**Consolidated Statements of Cash Flows**

(in millions)

---

| | |
|:---|:---|
| | **Period from <br>January 1, 2025<br>through <br>April 28, 2025** |
| **Operating Activities** | |
| Net loss | $(71.9) |
| Adjustments to reconcile net loss to net cash used in operating activities: |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 71.7 |
| &nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation | 12.5 |
| &nbsp;&nbsp;&nbsp;&nbsp;Certain interest expense and other financing costs | 2.8 |
| &nbsp;&nbsp;&nbsp;&nbsp;Gain on sale of fixed assets and other | (1.6) |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred income taxes | (18.9) |
| Changes in operating assets and liabilities: |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | (158.3) |
| &nbsp;&nbsp;&nbsp;&nbsp;Inventories | (314.2) |
| &nbsp;&nbsp;&nbsp;&nbsp;Vendor rebates receivable | 174.1 |
| &nbsp;&nbsp;&nbsp;&nbsp;Income tax receivable | (11.3) |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | (11.6) |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued expenses | 213.1 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other assets and liabilities | 2.4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in operating activities | (111.2) |
| **Investing Activities** |  |
| Capital expenditures | (20.9) |
| Acquisition of business, net | (10.7) |
| Proceeds from sale of assets | 2.0 |
| Purchases of investments | (1.4) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in investing activities | (31.0) |
| **Financing Activities** |  |
| Borrowings under revolving lines of credit | 771.6 |
| Payments under revolving lines of credit | (551.6) |
| Payments under term loan | (3.2) |
| Payments under equipment financing facilities and finance leases | (13.5) |
| Proceeds from employee stock purchase plan | 3.4 |
| Proceeds from issuance of common stock related to equity awards | 18.7 |
| Payment of taxes related to net share settlement of equity awards | (13.9) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by financing activities | 211.5 |
| Effect of exchange rate changes on cash and cash equivalents | 0.3 |
| Net increase in cash and cash equivalents | 69.6 |
| Cash and cash equivalents, beginning of period | 74.3 |
| Cash and cash equivalents, end of period | $143.9 |
| **Supplemental Cash Flow Information** |  |
| Cash paid during the period for: |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest | $46.5 |
| &nbsp;&nbsp;&nbsp;&nbsp;Income taxes, net of refunds | $10.6 |

---

*See accompanying notes to the consolidated financial statements.*

------

**QXO BUILDING PRODUCTS, INC.**

**Notes to the Consolidated Financial Statements**

(in millions, except per share amounts or otherwise indicated)

**1. Description of Business** 

Beacon Roofing Supply, Inc. ("Beacon") was incorporated in the state of Delaware on July 16, 1997 and has been the leading specialty wholesale distributor of roofing and complementary building products, including waterproofing products, in North America.

Beacon has served customers in all 50 states throughout the United States (the "U.S.") and seven provinces in Canada. Beacon's material subsidiaries are Beacon Sales Acquisition, Inc. and Beacon Roofing Supply Canada Company ("BRSCC").

On March 20, 2025, Beacon entered into an Agreement and Plan of Merger (the "Merger Agreement") with QXO, Inc. ("QXO") and Queen MergerCo, Inc. ("Merger Sub" or the "Acquirer"), a wholly owned subsidiary of QXO, pursuant to which QXO agreed to acquire Beacon for a purchase price of $124.35 per share of Beacon's common stock (the "Beacon Acquisition"). On April 29, 2025 (the "Closing Date"), QXO completed its acquisition of Beacon pursuant to the Merger Agreement in a transaction that valued Beacon at $10.6 billion. On the Closing Date, Merger Sub merged with and into Beacon (the "Merger"), with Beacon remaining as the surviving entity and being renamed QXO Building Products, Inc. ("QXO Building Products"). In connection with the Beacon Acquisition, all of Beacon's outstanding common stock was cancelled.

Following the consummation of the Merger on the Closing Date, Beacon has been operated as a wholly owned subsidiary of QXO under its new name, QXO Building Products.

**2. Summary of Significant Accounting Policies** 

***Basis of Presentation***

These financial statements are being included separately in this Annual Report on Form 10-K because QXO has determined that Beacon is the predecessor for financial reporting purposes. This determination was made as the legacy Beacon business now comprises substantially all of QXO and has significantly larger operations compared to QXO prior to the Beacon Acquisition. The Company also determined that the Beacon Acquisition represented a fundamental change in QXO's operations.

The accompanying consolidated financial statements contain all adjustments necessary to state fairly the following:

&nbsp;&nbsp;&nbsp;&nbsp;• Beacon's results of operations for the period from January 1, 2025 through the Closing Date; and

&nbsp;&nbsp;&nbsp;&nbsp;• Cash flows for the period from January 1, 2025 through the Closing Date.

All of the above financial information is presented in accordance with accounting principles generally accepted in the U.S. ("GAAP").

References to "the Company" in these financial statements refer to Beacon.

***Use of Estimates***

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of these consolidated financial statements, as well as the reported amounts of revenue and expenses during the reporting period.

***Net Sales***

Net sales represent the consideration the Company expects to be entitled to in exchange for transferring products to customers. Performance obligations are satisfied at a point in time, and net sales are recognized when control of the product transfers to the customer, which occurs when the customer accepts the delivery of our product or takes possession of our product with rights and rewards of ownership. Substantially all of the Company's contracts have a single performance obligation—to deliver products—and are short-term in nature.

The Company does not provide extended payment terms, and payment is due shortly after control transfers. The Company generally does not require prepayments; however, to the extent customers make payments in advance of delivery, the Company records a liability.

Net sales are presented net of variable consideration, including estimated product returns, customer sales incentives (including volume rebates), and early payment discounts taken.

The Company estimates product returns based on historical return rates and records accrued sales returns and defers the related cost of products sold. Provisions for early payment discounts are accrued in the same period in which the sale occurs based on historical experience. Commissions paid to internal sales teams to obtain contracts are expensed as incurred because the related contracts have a duration of one year or less. Sales taxes collected from customers and remitted to governmental authorities are excluded from net sales.

------

The Company offers sales incentives to customers, primarily volume rebates based on achieving specified sales levels. These volume rebates are not in exchange for a distinct good or service and therefore reduce net sales when the related revenue is recognized. The Company estimates volume rebate accruals based on contract terms, historical experience, and performance levels.

Shipping and handling amounts billed to customers are included in net sales. Related shipping and handling costs are accounted for as fulfillment activities and are recognized in cost of products sold when control of the products transfers to the customer.

***Stock-based Compensation***

The Company recognizes stock-based compensation expense based on the equity award's grant date fair value and estimates forfeitures at the time of grant with revisions to the estimates, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

The Company grants restricted stock units ("RSUs") subject to service-based vesting conditions that generally vest ratably over a three-year period or cliff vest on the third anniversary of the grant date with the fair value of the RSU awards established based on the market price of the common stock on the date of the grant and is amortized over the requisite service period. The Company also grants certain RSU awards to management that additionally may contain market or performance conditions that generally cliff vest on the third anniversary of the grant date. Market conditions, which are based on stock price, are incorporated into the grant date fair value of the management awards with market conditions using a Monte Carlo valuation model. Compensation expense for management awards with market conditions is recognized over the service period and is not reversed if the market condition is not met. For awards with performance conditions, the actual number of awards that will vest can range from 0% to 200% of the original grant amount, depending upon actual Company performance below or above the established performance metric targets. At each reporting date, the Company estimates performance in relation to the defined targets when determining the projected number of management awards with performance conditions that are expected to vest and calculating the related stock-based compensation expense. Management awards with performance conditions are amortized over the service period if, and to the extent that, it is determined that achievement of the performance condition is probable. If awards with market, performance and/or service conditions are forfeited due to failure to achieve performance conditions or failure to satisfy service conditions, any previously recognized expense for such awards is reversed.

The Company also grants non-qualified stock options that vest in in three annual installments over the three-year period following the grant date. The fair value of the non-qualified stock options are estimated using the Black-Scholes option-pricing model. The exercise price of option awards is set to equal the fair value of the Company's common stock on the grant date.

***Advertising Costs***

Advertising costs are expensed as incurred.

***Interest Income (Expense), Net***

The following table presents the components of interest income (expense), net. Interest expense is primarily attributable to the Company's 2026 Senior Notes, 2029 Senior Notes, 2030 Senior Notes, 2026 ABL and 2028 Term Loan.

---

| | |
|:---|:---|
| *(in millions)* | **Period from <br>January 1, 2025<br>through <br>April 28, 2025** |
| Interest income | $0.1 |
| Interest expense | (58.7) |
| Interest expense, net | $(58.6) |

---

***Financial Derivatives***

The Company enters into interest rate swaps to minimize the risks and costs associated with financing activities, as well as to maintain an appropriate mix of fixed-rate and floating-rate debt. The interest rate swap agreements are contracts to exchange variable-rate for fixed-interest rate payments over the life of the agreements. As of April 28, 2025, the Company has one interest rate swap designated as a cash flow hedge to manage interest rate risk associated with the variable rate on the Company's 2028 Term Loan.

During the period from January 1, 2025 through April 28, 2025, the Company reclassified losses of $0.6 million out of accumulated other comprehensive income (loss) and to interest expense, net. The Company records any differences paid or received on its interest rate hedge to interest expense, net, within the consolidated statements of operations. The interest rate swap is included in prepaid expenses and other current assets when in an asset position or accrued expenses when in a liability position on the consolidated balance sheets.

------

The following table summarizes the amount of gain (loss) on the change in fair value of the designated interest rate swap recognized in other comprehensive income (loss):

---

| | |
|:---|:---|
| *(in millions)* | **Period from <br>January 1, 2025<br>through <br>April 28, 2025** |
| **Instrument** | **Period from <br>January 1, 2025<br>through <br>April 28, 2025** |
| Designated interest rate swap | $(5.0) |

---

***Income Taxes***

The Company accounts for income taxes using the liability method, which requires the recognition of a current tax liability or asset for current taxes payable or refundable and a deferred tax liability or asset for the estimated future tax effects of temporary differences between the financial statement and tax reporting bases of assets and liabilities to the extent that they are realizable. Deferred tax expense (benefit) results from the net change in deferred tax assets and liabilities during the year.

ASC 740 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Based on this guidance, the Company analyzes its filing positions in all of the federal and state jurisdictions where it is required to file income tax returns, as well as all open tax years in these jurisdictions. Tax benefits from uncertain tax positions are recognized if it is more likely than not that the position is sustainable based solely on its technical merits.

The Company's accounting policy is to recognize any interest and penalties related to uncertain tax positions in (benefit from) provision for income taxes in the consolidated statements of operations.

**3. Segment Reporting and Geographic Information**

***Segment Reporting***

Operating segments are defined as components of an entity for which separate discrete financial information is available and regularly reviewed by the Chief Operating Decision Maker ("CODM") in deciding how to allocate resources to an individual segment and in assessing performance. The Company's CODM, the Chief Executive Officer, reviews consolidated results of operations to make decisions, therefore the Company views its operations and manages its business as a single operating segment, which is the wholesale distribution of building materials.

The Company's revenues for its single operating segment are derived from the sale of residential and non-residential roofing products, as well as complementary products, such as siding and waterproofing. The CODM evaluates performance for the Company's single operating segment and decides how to allocate resources based on the Company's consolidated net income that is reported on the consolidated statements of operations as net income (loss). These results are used to assess segment performance and determine the compensation of certain employees.

The operating segment financial information regularly reviewed by the CODM, inclusive of assets, revenue, expenses, profit or loss, and noncash items are presented on a consolidated basis. There are no additional segment expense categories regularly provided to the CODM. Other segment items included in consolidated net income are depreciation, amortization, interest expense, net, loss on debt extinguishment, other income, net, and provision for (benefit from) income taxes, which are reflected on the consolidated statements of operations.

------

The following table presents information regarding the components of revenue, significant segment expenses and consolidated net loss representative of the significant categories regularly provided to the CODM when managing the Company's one operating segment:

---

| | |
|:---|:---|
| *(in millions)* | **Period from <br>January 1, 2025<br>through <br>April 28, 2025** |
| Net sales: |  |
| Residential roofing products | $1316.7 |
| Non-residential roofing products | 711.4 |
| Complementary building products | 666.5 |
| &nbsp;&nbsp;&nbsp;Total net sales | $2694.6 |
| Less: |  |
| &nbsp;&nbsp;Cost of products sold | $2029.8 |
| &nbsp;&nbsp;Selling, general and administrative expenses<sup>(1)</sup> | 615.6 |
| &nbsp;&nbsp;Stock-based compensation | 12.5 |
| &nbsp;&nbsp;Other segment items | 108.6 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net loss | $(71.9) |
| <sup>(1)</sup> Excludes stock-based compensation. | <sup>(1)</sup> Excludes stock-based compensation. |

---

***Geographic Information***

Net sales in the U.S. accounted for approximately 97% of total net sales for all periods presented on the consolidated statements of operations. The CODM does not review geographic asset information when assessing performance or allocating resources.

**4. Stock-based Compensation**

On April 1, 2024, the Company's Board of Directors (the "Board") approved the Beacon Roofing Supply, Inc., 2024 Stock Plan (the "2024 Plan"), subject to stockholder approval, which was subsequently obtained on May 15, 2024 in conjunction with the 2024 Annual Meeting of Stockholders. Upon approval, the 2024 Plan succeeded the Beacon Roofing Supply, Inc. Second Amended and Restated 2014 Stock Plan (the "Prior Plan") and is the only plan of the Company pursuant to which stock-based awards are currently granted. The 2024 Plan provides for discretionary grants of stock options, stock awards, stock unit awards, and stock appreciation rights ("SARs") for up to 6,200,000 shares of common stock to key employees and non-employee directors. Stock options and SARs granted under the 2024 Plan, or granted under the Prior Plan after March 6, 2024, will reduce the number of available shares by one share for every share subject to the stock option or SAR, and stock awards and stock unit awards granted under the 2024 Plan, or granted under the Prior Plan after March 6, 2024, will reduce the number of available shares by 2.25 shares for every one share delivered. If (i) there is a lapse, forfeiture, expiration, termination, or cancellation of any award for any reason under the 2024 Plan, or under the Prior Plan after March 6, 2024, or (ii) shares subject to a stock award or a stock unit award under the 2024 Plan, or under the Prior Plan after March 6, 2024, are delivered or withheld as payment of any withholding taxes, then in each case such shares will again be available for issuance under the 2024 Plan, to be added back in the same multiple as described in the preceding sentence. Any shares delivered or withheld as payment for the exercise price of a stock option or of any withholding taxes with respect to such stock options or SARs will not be available for issuance pursuant to subsequent awards. As of April 28, 2025, there were 6.0 million shares of common stock available for issuance pursuant to the 2024 Plan.

All unvested employee equity awards contain a "double trigger" change in control mechanism to the extent such employee equity award is continued or assumed after a change in control. If an award is not continued or assumed by a public company in an equitable manner, it will vest immediately prior to a change in control (at 100% payout with respect to a performance-based restricted stock unit award and at 100% of the award then earned but not vested with respect to a restricted stock unit award with market conditions). If an award is so continued or assumed, vesting will continue in accordance with the terms of the award (based on actual performance with respect to a performance-based restricted stock unit award subject to completed annual performance periods and at 100% payout for any in-progress annual performance periods) unless there is a qualifying termination (without cause or for good reason) within one-year following the change in control, in which event the award shall become vested immediately.

In accordance with the terms of the Merger Agreement, the outstanding Company equity awards held by the Company's employees were converted into corresponding QXO equity awards (and, with respect to each performance-based restricted stock unit award, with the performance-based vesting condition deemed satisfied at target and being converted into an award of QXO RSUs for which vesting is solely based on service-based conditions), in each case, based on the Equity Award Conversion Amount (as defined in the Merger Agreement). Such QXO equity awards remain subject to the same vesting terms as the original Company equity awards (excluding performance conditions), including accelerated vesting upon certain qualifying terminations of employment without cause

------

or good reason. Such accelerated vesting is "double-trigger" (i.e., it is contingent upon a termination of employment without cause or resignation for good reason within one year after the Merger was consummated.)

***Stock Options***

There were no stock options granted during the period from January 1, 2025 through April 28, 2025. The following table summarizes all stock option activity for the period from January 1, 2025 through April 28, 2025:

---

| | | | | |
|:---|:---|:---|:---|:---|
| *(in millions, except per share amounts and time periods)* | **Options Outstanding** | **Weighted-Average Exercise Price** | **Weighted-Average Remaining Contractual Term (Years)** | **Aggregate Intrinsic Value**<sup>(1)</sup> |
| Balance at beginning of period | 0.9 | $47.54 | 5.6 | $51.2 |
| &nbsp;&nbsp;&nbsp;Exercised | (0.4) | 44.66 |  |  |
| &nbsp;&nbsp;&nbsp;Forfeited |  | 78.04 |  |  |
| Balance at end of period | 0.5 | $49.57 | 5.7 | $39.0 |
| Vested and expected to vest after April 28, 2025 | 0.5 | $49.20 | 5.7 | $38.8 |
| Exercisable as of April 28, 2025 | 0.4 | $42.54 | 5.1 | $34.5 |
| <sup>(1)</sup> Aggregate intrinsic value represents the difference between the closing fair value of the underlying common stock and the exercise price of outstanding, in-the-money options on the date of measurement.  | <sup>(1)</sup> Aggregate intrinsic value represents the difference between the closing fair value of the underlying common stock and the exercise price of outstanding, in-the-money options on the date of measurement.  | <sup>(1)</sup> Aggregate intrinsic value represents the difference between the closing fair value of the underlying common stock and the exercise price of outstanding, in-the-money options on the date of measurement.  | <sup>(1)</sup> Aggregate intrinsic value represents the difference between the closing fair value of the underlying common stock and the exercise price of outstanding, in-the-money options on the date of measurement.  | <sup>(1)</sup> Aggregate intrinsic value represents the difference between the closing fair value of the underlying common stock and the exercise price of outstanding, in-the-money options on the date of measurement.  |

---

As of April 28, 2025, there was $3.0 million of total unrecognized compensation cost related to unvested stock options, which is expected to be recognized over a weighted-average period of 1.4 years.

The following table summarizes additional information on stock options for the periods presented:

---

| | |
|:---|:---|
| *(in millions, except per shares amounts)* | **Period from <br>January 1, 2025 <br>through <br>April 28, 2025** |
| Total grant date fair value of stock options vested | $4.0 |
| Total intrinsic value of stock options exercised | $32.6 |

---

***Restricted Stock Units***

The following table summarizes all RSU activity for the period from January 1, 2025 through April 28, 2025:

---

| | | |
|:---|:---|:---|
| *(in millions, except grant date fair value amounts)* | **RSUs Outstanding** | **Weighted-Average Grant Date Fair Value** |
| Balance at beginning of period | 1.2 | $62.91 |
| &nbsp;&nbsp;&nbsp;&nbsp;Granted | 0.3 | $119.90 |
| &nbsp;&nbsp;&nbsp;&nbsp;Vested | (0.3) | $60.88 |
| &nbsp;&nbsp;&nbsp;&nbsp;Forfeited |  | $76.71 |
| Balance at end of period | 1.2 | $78.87 |

---

As of April 28, 2025, there was $51.7 million of total unrecognized compensation expense related to unvested RSUs (including unrecognized expense for RSUs with performance conditions at their estimated value as of April 28, 2025), which is expected to be recognized over a weighted-average period of 2.2 years.

The following table summarizes additional information regarding RSUs for the periods presented:

---

| | |
|:---|:---|
| *(in millions, except per share amounts)* | **Period from <br>January 1, 2025<br>through <br>April 28, 2025** |
| Weighted-average fair value per share of RSUs granted | $119.90 |
| Total grant date fair value of RSUs vested | $20.5 |
| Total intrinsic value of RSUs released | $39.4 |

---

------

***Employee Stock Purchase Plan***

On March 20, 2023, the Board adopted the Company's 2023 Employee Stock Purchase Plan (the "ESPP"), subject to stockholder approval, which was subsequently obtained on May 17, 2023 in conjunction with the 2023 Annual Meeting of Stockholders. The ESPP allows eligible employees to acquire shares of the Company's common stock through payroll deductions over six-month offering periods. The purchase price per share is equal to 85% of the lesser of (1) the fair market value of a share of the Company's common stock on the offering date, defined as the first trading day of the offering period, or (2) the fair market value of a share of the Company's common stock on the purchase date, defined as the last trading day of the offering period; provided that the purchase price is not less than the $0.01 par value per share of the common stock. Participant purchases are limited to a maximum of $12,500 worth of stock per offering period (or $25,000 per calendar year). The Company is authorized to grant up to 1,000,000 shares of its common stock under the ESPP.

Pursuant to the Merger Agreement, QXO formally requested that the Company terminate the ESPP. Accordingly, the Company terminated the ESPP effective as of April 23, 2025, with the final purchase of Company common stock under the ESPP occurring on such date. There were 39,265 shares purchased under the ESPP on April 23, 2025.

***Stock-Based Compensation Expense***

Stock-based compensation expense is included within selling, general and administrative expenses in the consolidated statements of operations. The Company recognized stock-based compensation expense as follows:

---

| | |
|:---|:---|
| *(in millions)* | **Period from <br>January 1, 2025<br>through <br>April 28, 2025** |
| Stock options | $1.1 |
| RSUs | 9.8 |
| ESPP shares | 1.6 |
| Total stock-based compensation expense | $12.5 |

---

**5. Leases** 

The Company primarily operates in leased facilities, which are accounted for as operating leases. The real estate leases expire between 2025 and 2037. The Company also leases equipment such as trucks and forklifts. Equipment leases are accounted for as either operating or finance leases. The equipment leases expire between 2025 and 2032.

The following table summarizes components of lease costs recognized in the consolidated statements of operations:

---

| | |
|:---|:---|
| *(in millions)* | **Period from <br>January 1, 2025<br>through <br>April 28, 2025** |
| Operating lease costs | $53.5 |
| Finance lease costs: |  |
| &nbsp;&nbsp;&nbsp;Amortization of right-of-use assets | 14.7 |
| &nbsp;&nbsp;&nbsp;Interest on lease obligations | 3.8 |
| Variable lease costs | 5.7 |
| &nbsp;&nbsp;Total lease costs | $77.7 |

---

------

The following table presents supplemental cash flow information related to the Company's leases:

---

| | |
|:---|:---|
| *(in millions)* | **Period from <br>January 1, 2025<br>through <br>April 28, 2025** |
| Cash paid for amounts included in measurement of lease obligations: |  |
| &nbsp;&nbsp;&nbsp;Operating cash outflows from operating leases | $51.5 |
| &nbsp;&nbsp;&nbsp;Operating cash outflows from finance leases | $3.6 |
| &nbsp;&nbsp;&nbsp;Financing cash outflows from finance leases | $13.5 |
| Right-of-use assets obtained in exchange for new finance lease liabilities | $21.4 |
| Right-of-use assets obtained in exchange for new operating lease liabilities | $40.7 |

---

As of April 28, 2025, the Company's operating leases had a weighted-average remaining lease term of 6.2 years and a weighted-average discount rate of 6.22%, and the Company's finance leases had a weighted-average remaining lease term of 4.4 years and a weighted-average discount rate of 6.48%.

**6. Commitments and Contingencies**

Various legal claims arise from time to time in the normal course of business. In assessing loss contingencies related to legal proceedings that are pending against the Company, or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

The Company believes that it has adequately accrued for the potential impact of loss contingencies that are probable and reasonably estimable, and does not believe that the ultimate resolution of any matters to which it is presently a party will have a material adverse effect on the Company's results of operations, financial condition or cash flows. However, the results of these matters cannot be predicted with certainty, and an unfavorable resolution of one or more of these matters could have a material adverse effect on the Company's financial condition, results of operations or cash flows.

In addition, the Company has received certain demand letters from stockholders pertaining to disclosures made by the Company in connection with the Beacon Acquisition, which the Company does not believe are material, individually or in the aggregate.

**7. Income Taxes**

The following table summarizes the components of the Company's benefit from income taxes:

---

| | |
|:---|:---|
| *(in millions)* | **Period from <br>January 1, 2025<br>through <br>April 28, 2025** |
| Current: |  |
| &nbsp;&nbsp;&nbsp;Federal | $(0.2) |
| &nbsp;&nbsp;&nbsp;Foreign | (0.4) |
| &nbsp;&nbsp;&nbsp;State | 0.4 |
| Total current taxes | (0.2) |
| Deferred: |  |
| &nbsp;&nbsp;&nbsp;Federal | (15.0) |
| &nbsp;&nbsp;&nbsp;Foreign |  |
| &nbsp;&nbsp;&nbsp;State | (3.8) |
| Total deferred taxes | (18.8) |
| Benefit from income taxes | $(19.0) |

---

------

The following table is a reconciliation of the statutory federal income tax rate to the Company's effective income tax rate for the periods presented:

---

| | |
|:---|:---|
| | **Period from <br>January 1, 2025<br>through <br>April 28, 2025** |
| U.S. federal income taxes at statutory rate | 21.0% |
| State income taxes, net of federal benefit | 3.3% |
| Share-based payments | 10.0% |
| Section 162(m) limitation | (2.8)% |
| Non-deductible transaction costs | (10.2)% |
| Non-deductible meals and entertainment | (0.7)% |
| Other | 0.3% |
| Effective tax rate | 20.9% |

---

The Company's non-domestic subsidiary, BRSCC, is treated as a controlled foreign corporation. On August 1, 2024, BRSCC acquired SSR which was also treated as a controlled foreign corporation. SSR amalgamated into BRSCC effective December 31, 2024. BRSCC's taxable income, which reflects all of the Company's Canadian operations, is being taxed only in Canada and would generally be taxed in the U.S. only upon an actual or deemed distribution. The Company expects that BRSCC's earnings will be indefinitely reinvested for the foreseeable future; therefore, no U.S. deferred tax asset or liability for the differences between the book basis and the tax basis of BRSCC has been recorded as of April 28, 2025. Under the Tax Cuts and Jobs Act enacted in December 2017, future distributions from foreign subsidiaries will generally be subject to a federal dividends received deduction in the U.S. Should the earnings be remitted as dividends, the Company may be subject to additional foreign withholding and state income taxes. It is not practicable to estimate the amount of any additional taxes which may be payable on the undistributed earnings.

As of April 28, 2025, there were no uncertain tax positions which, if recognized, would affect the Company's effective tax rate.

The Company has operations in 50 U.S. states and seven provinces in Canada. The Company is currently not under any income tax audit. The Company is no longer subject to U.S. federal income tax examinations for any fiscal years ended on or before December 31, 2021. For the majority of states, the Company is also no longer subject to tax examinations for any fiscal years ended on or before December 31, 2021. In Canada, the Company is no longer subject to federal or provincial tax examinations for any fiscal years ended on or before December 31, 2021.

## Exhibit 99.2

**Exhibit 99.2**

**QXO BUILDING PRODUCTS, INC.**

**For the Year Ended December 31, 2024**

**TABLE OF CONTENTS** 

---

| | | |
|:---|:---|:---|
| <u>[Item 8.](#i888771e4aba7421cb8dfc24a156e3292_535)</u> | <u>[Report of Independent Registered Public Accounting Firm (PCAOB ID: 42)](#i888771e4aba7421cb8dfc24a156e3292_76)</u> | <u>[2](#i888771e4aba7421cb8dfc24a156e3292_76)</u> |
|  | <u>[Consolidated Financial Statements](#i888771e4aba7421cb8dfc24a156e3292_535)</u> | <u>[3](#i888771e4aba7421cb8dfc24a156e3292_535)</u> |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Consolidated Balance Sheet](#i888771e4aba7421cb8dfc24a156e3292_79)</u> | <u>[3](#i888771e4aba7421cb8dfc24a156e3292_79)</u> |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Consolidated Statement of Operations](#i888771e4aba7421cb8dfc24a156e3292_82)</u> | <u>[4](#i888771e4aba7421cb8dfc24a156e3292_82)</u> |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Consolidated Statement of Comprehensive Income](#i888771e4aba7421cb8dfc24a156e3292_85)</u> | <u>[5](#i888771e4aba7421cb8dfc24a156e3292_85)</u> |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Consolidated Statement of Stockholders](#i888771e4aba7421cb8dfc24a156e3292_88)</u><u>'</u> <u>Equity</u> | <u>[6](#i888771e4aba7421cb8dfc24a156e3292_88)</u> |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Consolidated Statement of Cash Flows](#i888771e4aba7421cb8dfc24a156e3292_91)</u> | <u>[7](#i888771e4aba7421cb8dfc24a156e3292_91)</u> |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Notes to the Consolidated Financial Statements](#i888771e4aba7421cb8dfc24a156e3292_94)</u> | <u>[8](#i888771e4aba7421cb8dfc24a156e3292_94)</u> |

---

------

**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

To the Stockholders and the Board of Directors of QXO Building Products, Inc.

**Opinion on the Financial Statements**

We have audited the accompanying consolidated balance sheet of QXO Building Products, Inc. (formerly known as Beacon Roofing Supply, Inc.) (the Company) as of December 31, 2024, the related consolidated statements of operations, comprehensive income, stockholders' equity and cash flows for the year ended December 31, 2024, and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024, and the results of its operations and its cash flows for the year ended December 31, 2024, in conformity with U.S. generally accepted accounting principles.

**Basis for Opinion**

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

/s/ Ernst & Young LLP

We served as the Company's auditor from 1997 to 2024.

Tysons, Virginia

February 27, 2025

------

**Item 8. Financial Statements and Supplementary Data (as predecessor)**

**QXO BUILDING PRODUCTS, INC.**

**Consolidated Balance Sheet**

(in millions, except per share amounts)

---

| | |
|:---|:---|
| | **December 31,**<br>**2024** |
| **Assets** |  |
| Current assets: |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $74.3 |
| &nbsp;&nbsp;&nbsp;Accounts receivable, less allowance of $17.6 as of December 31, 2024 | 1196.1 |
| &nbsp;&nbsp;&nbsp;Inventories, net | 1407.7 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 501.7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 3179.8 |
| Property and equipment, net | 545.7 |
| Goodwill | 2094.7 |
| Intangibles, net | 489.1 |
| Operating lease right-of-use assets, net | 626.8 |
| Deferred income taxes, net |  |
| Other assets, net | 17.5 |
| Total assets | $6953.6 |
| **Liabilities and Stockholders' Equity** |  |
| Current liabilities: |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | $938.0 |
| &nbsp;&nbsp;&nbsp;Accrued expenses | 522.4 |
| &nbsp;&nbsp;&nbsp;Current portion of operating lease liabilities | 101.2 |
| &nbsp;&nbsp;&nbsp;Current portion of finance lease liabilities | 38.9 |
| &nbsp;&nbsp;&nbsp;Current portion of long-term debt | 12.8 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 1613.3 |
| Borrowings under revolving lines of credit, net | 148.1 |
| Long-term debt, net | 2481.2 |
| Deferred income taxes, net | 37.0 |
| Other long-term liabilities | 1.9 |
| Operating lease liabilities | 544.7 |
| Finance lease liabilities | 134.9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 4961.1 |
| Commitments and contingencies (Note 14) |  |
| Convertible Preferred Stock (voting); $0.01 par value; aggregate liquidation preference $400.0; 0.0 shares authorized, issued and outstanding as of December 31, 2024 (Note 5) |  |
| Stockholders' equity: |  |
| &nbsp;&nbsp;&nbsp;Common stock (voting); $0.01 par value; 100.0 shares authorized; 61.5 shares issued and outstanding as of December 31, 2024 | 0.6 |
| &nbsp;&nbsp;&nbsp;Undesignated preferred stock; 5.0 shares authorized, none issued or outstanding |  |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 1264.4 |
| &nbsp;&nbsp;&nbsp;Retained earnings | 753.7 |
| &nbsp;&nbsp;&nbsp;Accumulated other comprehensive income (loss) | (26.2) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total stockholders' equity | 1992.5 |
| Total liabilities and stockholders' equity | $6953.6 |

---

*See accompanying Notes to the Consolidated Financial Statements*

------

**QXO BUILDING PRODUCTS, INC.**

**Consolidated Statement of Operations**

(in millions, except per share amounts)

---

| | |
|:---|:---|
| | **Year Ended December 31,**<br>**2024** |
| Net sales | $9763.2 |
| &nbsp;&nbsp;&nbsp;Cost of products sold | 7258.4 |
| Gross profit | 2504.8 |
| &nbsp;&nbsp;&nbsp;Operating expense: |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Selling, general and administrative | 1637.6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation | 109.9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization | 91.9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expense | 1839.4 |
| Income (loss) from operations | 665.4 |
| &nbsp;&nbsp;&nbsp;Interest expense, financing costs and other, net | 177.3 |
| &nbsp;&nbsp;&nbsp;Loss on debt extinguishment | 2.4 |
| Income (loss) before provision for income taxes | 485.7 |
| &nbsp;&nbsp;&nbsp;Provision for (benefit from) income taxes | 124.0 |
| Net income (loss) | $361.7 |
| Reconciliation of net income (loss) to net income (loss) attributable to common stockholders: |  |
| &nbsp;&nbsp;&nbsp;Net income (loss) | $361.7 |
| &nbsp;&nbsp;&nbsp;&nbsp;Dividends on Preferred Stock |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Undistributed income allocated to participating securities |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Repurchase Premium |  |
| Net income (loss) attributable to common stockholders | $361.7 |
| Weighted-average common shares outstanding: |  |
| &nbsp;&nbsp;&nbsp;Basic | 62.5 |
| &nbsp;&nbsp;&nbsp;Diluted | 63.7 |
| Net income (loss) per common share: |  |
| &nbsp;&nbsp;&nbsp;Basic | $5.78 |
| &nbsp;&nbsp;&nbsp;Diluted | $5.68 |

---

*See accompanying Notes to the Consolidated Financial Statements*

------

**QXO BUILDING PRODUCTS, INC.**

**Consolidated Statement of Comprehensive Income**

(in millions)

---

| | |
|:---|:---|
| | **Year Ended December 31,**<br>**2024** |
| Net income (loss) | $361.7 |
| Other comprehensive income (loss): |  |
| &nbsp;&nbsp;&nbsp;Foreign currency translation adjustment | (11.0) |
| &nbsp;&nbsp;&nbsp;Unrealized gain (loss) due to change in fair value of derivative financial instruments, net of tax | 0.7 |
| &nbsp;&nbsp;&nbsp;Derivative financial instruments reclassified to earnings, net of tax | (1.6) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other comprehensive income (loss) | (11.9) |
| Comprehensive income (loss) | $349.8 |

---

*See accompanying Notes to the Consolidated Financial Statements*

------

**QXO BUILDING PRODUCTS, INC.** 

**Consolidated Statement of Stockholders**' **Equity** 

(in millions)

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Common Stock** | **Common Stock** | **APIC**<sup>1</sup>  | **Retained Earnings**  | **AOCI**<sup>2</sup> | **Total**  |
| | **Shares** | **Amount** | **APIC**<sup>1</sup>  | **Retained Earnings**  | **AOCI**<sup>2</sup> | **Total**  |
| Balance as of December 31, 2023 | 63.3 | $0.6 | $1218.4 | $618.8 | $(14.3) | $1823.5 |
| &nbsp;&nbsp;&nbsp;&nbsp;Repurchase and retirement of common stock, net<sup>3</sup> | (2.4) | 0.0 |  | (226.8) |  | (226.8) |
| &nbsp;&nbsp;&nbsp;&nbsp;Issuance of common stock, net of shares withheld for taxes | 0.6 | 0.0 | 15.0 |  |  | 15.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation |  |  | 31.0 |  |  | 31.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other comprehensive income (loss) |  |  |  |  | (11.9) | (11.9) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net income (loss) |  |  |  | 361.7 |  | 361.7 |
| Balance as of December 31, 2024 | 61.5 | $0.6 | $1264.4 | $753.7 | $(26.2) | $1992.5 |

---

1. Additional Paid-in Capital ("APIC").

2. Accumulated Other Comprehensive Income (Loss) ("AOCI").

3. See Note 7 for additional information.

*See accompanying Notes to the Consolidated Financial Statements*

------

**QXO BUILDING PRODUCTS, INC.**

**Consolidated Statement of Cash Flows**

(in millions)

---

| | |
|:---|:---|
| | **Year Ended December 31,**<br>**2024** |
| **Operating Activities** |  |
| Net income (loss) | $361.7 |
| Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |  |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | 201.8 |
| &nbsp;&nbsp;&nbsp;Stock-based compensation | 31.0 |
| &nbsp;&nbsp;&nbsp;Certain interest expense and other financing costs | 3.9 |
| &nbsp;&nbsp;&nbsp;Loss on debt extinguishment | 2.4 |
| &nbsp;&nbsp;&nbsp;Gain on sale of fixed assets and other | (7.5) |
| &nbsp;&nbsp;&nbsp;Deferred income taxes | 17.2 |
| Changes in operating assets and liabilities: |  |
| &nbsp;&nbsp;&nbsp;Accounts receivable | 15.4 |
| &nbsp;&nbsp;&nbsp;Inventories | (114.5) |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | (56.0) |
| &nbsp;&nbsp;&nbsp;Accounts payable and accrued expenses | (43.2) |
| &nbsp;&nbsp;&nbsp;Other assets and liabilities | 7.2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by (used in) operating activities | 419.4 |
| **Investing Activities** |  |
| &nbsp;&nbsp;&nbsp;Capital expenditures | (126.6) |
| &nbsp;&nbsp;&nbsp;Acquisition of business, net | (420.5) |
| &nbsp;&nbsp;&nbsp;Proceeds from sale of assets | 7.9 |
| &nbsp;&nbsp;&nbsp;Purchases of investments | (1.3) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by (used in) investing activities | (540.5) |
| **Financing Activities** |  |
| &nbsp;&nbsp;&nbsp;Borrowings under revolving lines of credit | 2881.7 |
| &nbsp;&nbsp;&nbsp;Payments under revolving lines of credit | (2815.1) |
| &nbsp;&nbsp;&nbsp;Borrowings under term loan | 300.0 |
| &nbsp;&nbsp;&nbsp;Payments under term loan | (12.8) |
| &nbsp;&nbsp;&nbsp;Payment of debt issuance costs | (0.2) |
| &nbsp;&nbsp;&nbsp;Payments under equipment financing facilities and finance leases | (30.7) |
| &nbsp;&nbsp;&nbsp;Payment of fees for the repurchase of convertible Preferred Stock | (0.1) |
| &nbsp;&nbsp;&nbsp;Repurchase and retirement of common stock, net | (225.0) |
| &nbsp;&nbsp;&nbsp;Proceeds from employee stock purchase plan | 13.2 |
| &nbsp;&nbsp;&nbsp;Proceeds from issuance of common stock related to equity awards | 9.4 |
| &nbsp;&nbsp;&nbsp;Payment of taxes related to net share settlement of equity awards | (7.6) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by (used in) financing activities | 112.8 |
| Effect of exchange rate changes on cash and cash equivalents | (1.4) |
| Net increase (decrease) in cash and cash equivalents | (9.7) |
| Cash and cash equivalents, beginning of period | 84.0 |
| Cash and cash equivalents, end of period | $74.3 |
| **Supplemental Cash Flow Information** |  |
| Cash paid during the period for: |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest | $177.8 |
| &nbsp;&nbsp;&nbsp;&nbsp;Income taxes, net of refunds | $110.6 |

---

*See accompanying Notes to the Consolidated Financial Statements*

------

**QXO BUILDING PRODUCTS, INC.**

**Notes to the Consolidated Financial Statements**

(in millions, except per share amounts or otherwise indicated)

**1. Company Overview**

Beacon Roofing Supply, Inc. ("Beacon") was incorporated in the state of Delaware on July 16, 1997 and has been the leading specialty wholesale distributor of roofing and complementary building products, including waterproofing products, in North America.

Beacon has served customers in all 50 states throughout the United States (the "U.S.") and seven provinces in Canada. Beacon's material subsidiaries are Beacon Sales Acquisition, Inc. and Beacon Roofing Supply Canada Company ("BRSCC").

On March 20, 2025, Beacon entered into an Agreement and Plan of Merger (the "Merger Agreement") with QXO, Inc. ("QXO") and Queen MergerCo, Inc. ("Merger Sub" or the "Acquirer"), a wholly owned subsidiary of QXO, pursuant to which QXO agreed to acquire Beacon for a purchase price of 124.35 per share of Beacon's common stock (the "Beacon Acquisition"). On April 29, 2025 (the "Closing Date"), QXO completed its acquisition of Beacon pursuant to the Merger Agreement in a transaction that valued Beacon at $10.6 billion. On the Closing Date, Merger Sub merged with and into Beacon (the "Merger"), with Beacon remaining as the surviving entity and being renamed QXO Building Products, Inc. ("QXO Building Products"). In connection with the Beacon Acquisition, all of Beacon's outstanding common stock was cancelled.

Following the consummation of the Merger on the Closing Date, Beacon has been operated as a wholly owned subsidiary of QXO under its new name, QXO Building Products.

**2. Summary of Significant Accounting Policies**

***Basis of Presentation***

These financial statements are being included separately in this Annual Report on Form 10-K because QXO has determined that Beacon is the predecessor for financial reporting purposes. This determination was made as the legacy Beacon business now comprises substantially all of QXO and has significantly larger operations compared to QXO prior to the Beacon Acquisition. The Company also determined that the Beacon Acquisition represented a fundamental change in QXO's operations.

The accompanying consolidated financial statements contain all adjustments necessary to state fairly the following:

&nbsp;&nbsp;&nbsp;&nbsp;• Beacon's financial position as of December 31, 2024;

&nbsp;&nbsp;&nbsp;&nbsp;• Beacon's results of operations for the year ended December 31, 2024; and

&nbsp;&nbsp;&nbsp;&nbsp;• Cash flows for the year ended December 31, 2024.

All of the above financial information is presented in accordance with accounting principles generally accepted in the U.S. ("GAAP").

References to "the Company" in these financial statements refer to Beacon.

***Use of Estimates***

The preparation of consolidated financial statements in conformity with generally accepted accounting principles in the United States ("GAAP") requires management to make estimates and assumptions that affect the amounts reported in these consolidated financial statements and accompanying notes. Significant items subject to such estimates include inventories, purchase price allocations, recoverability of goodwill and intangibles, and income taxes. Accordingly, actual amounts could differ materially from these estimates.

***Segment Information***

Operating segments are defined as components of a business that can earn revenue and incur expenses for which discrete financial information is evaluated on a regular basis by the chief operating decision maker ("CODM") in order to decide how to allocate resources and assess performance. The Company's CODM, the Chief Executive Officer, reviews consolidated results of operations to make decisions, therefore the Company views its operations and manages its business as a single operating segment.

***Business Combinations***

The Company records acquisitions resulting in the consolidation of a business using the acquisition method of accounting. Under this method, the Company records the assets acquired, including intangible assets that can be identified, and liabilities assumed based on their estimated fair values at the date of acquisition. The Company uses an income approach to determine the fair value of acquired intangible assets, specifically the multi-period excess earnings method for customer relationships and the relief from royalty method for trade names. Various Level 3 fair value assumptions are used in the determination of these estimated fair values, including items such as sales growth rates, cost synergies, customer attrition rates, discount rates, and other prospective financial information. The purchase price in excess of the fair value of the assets acquired and liabilities assumed is recorded as goodwill. Estimates associated

------

with the accounting for acquisitions may change as additional information becomes available regarding the assets acquired and liabilities assumed. Management believes these estimates are based on reasonable assumptions, however they are inherently uncertain and unpredictable, therefore actual results may differ. Transaction costs associated with acquisitions are expensed as incurred and are included as a component of selling, general and administrative expense within the consolidated statements of operations.

***Cash and Cash Equivalents***

The Company considers all highly liquid investments with maturities of three months or less when purchased to be cash equivalents. Cash and cash equivalents also include unsettled credit card transactions. Cash equivalents are composed of money market funds which invest primarily in commercial paper or bonds with a rating of A-1 or better, and bank certificates of deposit.

***Accounts Receivable***

Accounts receivable are derived from unpaid invoiced amounts and are recorded at their net realizable value. The allowance for doubtful accounts is calculated based on actual historical write-offs and current economic factors and represents the Company's best estimate of its credit exposure. Each month the Company reviews its receivables on a customer-by-customer basis and any balances that are deemed uncollectible are written off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company's accounts receivable are primarily from customers in the building industry located in the U.S. and Canada, and no single customer represented at least 10% of the Company's revenue during the year ended December 31, 2024 or accounts receivable as of December 31, 2024.

***Concentrations of Risk***

Financial instruments that potentially subject the Company to significant concentration of credit risk consist primarily of cash, cash equivalents, and accounts receivable. The Company maintains the majority of its cash and cash equivalents with one financial institution, which management believes to be financially sound and with minimal credit risk. The Company's deposits typically exceed amounts guaranteed by the Federal Deposit Insurance Corporation.

***Inventories including Vendor Rebates and Reserve for Inventory Obsolescence***

Inventories, consisting substantially of finished goods, are valued at the lower of cost or market (net realizable value). Inventory costs are determined using the moving weighted-average cost method and primarily consist of product cost from our suppliers, as well as freight and other handling fees. The Company establishes a reserve for inventory obsolescence, which is intended to reflect the net realizable value of inventory.

The following table summarizes the changes in the Company's reserve for inventory obsolescence for the period presented:

---

| | |
|:---|:---|
| *(in millions)* | **Year Ended December 31,**<br>**2024** |
| Beginning balance | $20.2 |
| &nbsp;&nbsp;&nbsp;Provision (benefit) for inventory write-downs | 0.9 |
| &nbsp;&nbsp;Deduction for inventory write-offs | (0.6) |
| Ending balance | $20.5 |

---

The Company's arrangements with vendors typically provide for rebates after it makes a special purchase and/or monthly, quarterly, and/or annual rebates of a specified amount of consideration payable when a number of measures have been achieved. Annual rebates are generally related to a specified cumulative level of purchases on a calendar-year basis. The Company accounts for such rebates as a reduction of the inventory value until the product is sold, at which time such rebates reduce cost of products sold in the consolidated statements of operations. Throughout the year, the Company estimates the amount of the periodic rebates based upon the expected level of purchases. The Company continually revises these estimates to reflect actual rebates earned based on actual purchase levels. Amounts due from vendors under these arrangements are included in prepaid expenses and other current assets in the consolidated balance sheet.

------

***Property and Equipment***

Property and equipment acquired in connection with acquisitions are recorded at fair value as of the date of the acquisition and depreciated utilizing the straight-line method over the estimated remaining useful lives. All other additions are recorded at cost, and depreciation is computed using the straight-line method. The Company reviews the estimated useful lives of its fixed assets on an ongoing basis and the following table summarizes the estimates currently used:

---

| | |
|:---|:---|
| **Asset Class** | **Estimated Useful Life** |
| Buildings | 40 years |
| Equipment | 3 to 7 years |
| Furniture and fixtures | 7 years |
| Software | 3 to 5 years |
| Finance lease assets and leasehold improvements | Shorter of the estimated useful life or the term of the lease, considering renewal options expected to be exercised. |

---

***Goodwill and Intangible Assets***

On an annual basis and at interim periods when circumstances require, the Company tests the recoverability of its goodwill and indefinite-lived intangible assets and reviews for indicators of impairment. Examples of such indicators include a significant change in the business climate, unexpected competition, loss of key personnel, or a decline in the Company's market capitalization below the Company's net book value.

The Company performs impairment assessments at the reporting unit level, which is defined as an operating segment or one level below an operating segment, also known as a component. The Company evaluates its components for aggregation by examining the distribution methods, sales mix, and operating results of each component to determine if these characteristics will be sustained over a long-term basis. For purposes of this evaluation, the Company expects its components to exhibit similar economic characteristics 3-5 years after events such as an acquisition within the Company's core roofing business or management/business restructuring. Components that exhibit similar economic characteristics are subsequently aggregated into a single reporting unit. Based on the Company's most recent impairment assessment performed as of August 31, 2024, it was determined that all of the Company's components exhibited similar economic characteristics, and therefore should be aggregated into a single reporting unit (collectively, the "Reporting Unit").

To test for the recoverability of goodwill and indefinite-lived intangible assets, the Company first performs a qualitative assessment based on economic, industry, and company-specific factors for all or selected reporting units to determine whether the existence of events and circumstances indicates that it is more likely than not that the goodwill or indefinite-lived intangible asset is impaired. Based on the results of the qualitative assessment, two additional steps in the impairment assessment may be required. The first step would require a comparison of each reporting unit's fair value to the respective carrying value. If the carrying value exceeds the fair value, a second step is performed to measure the amount of impairment loss on a relative fair value basis, if any.

Based on the Company's most recent impairment assessment performed as of August 31, 2024, the Company concluded that it was more likely than not that the fair value of the goodwill and indefinite-lived intangible assets exceeded their net carrying amount, therefore the quantitative two-step impairment test was not required. The Company's total market capitalization exceeded carrying value by approximately 189% as of August 31, 2024. The Company did not identify any macroeconomic, industry conditions, or cost-related factors that would indicate it is more likely than not that the fair value of the reporting unit was less than its carrying value.

The Company amortizes certain identifiable intangible assets that have finite lives, currently consisting of customer relationships and trademarks. Customer relationship assets are amortized on an accelerated basis based on the expected cash flows generated by the existing customers; and trademarks are amortized on an accelerated basis over the term the Company expects to use the trademark. Amortizable intangible assets are tested for impairment, when deemed necessary, based on undiscounted cash flows and, if impaired, are written down to fair value based on either discounted cash flows or appraised values.

***Evaluation of Long-Lived Assets***

The Company evaluates the recoverability of its long-lived assets for impairment whenever events or circumstances indicate that the carrying amount of the assets may not be recoverable. Recoverability is measured by comparing the carrying amount of the asset to the future undiscounted cash flows the asset is expected to generate. If the asset is considered to be impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset.

***Fair Value Measurement***

The Company applies fair value accounting for all financial assets and liabilities that are reported at fair value in the financial statements on a recurring basis. Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The accounting guidance establishes a defined three-tier hierarchy to classify and disclose the fair value of assets and liabilities on both the date of their initial measurement as well

------

as all subsequent periods. The hierarchy prioritizes the inputs used to measure fair value by the lowest level of input that is available and significant to the fair value measurement. The three levels are described as follows:

&nbsp;&nbsp;&nbsp;&nbsp;• *Level 1*: Observable inputs. Quoted prices in active markets for identical assets and liabilities;

&nbsp;&nbsp;&nbsp;&nbsp;• *Level 2*: Observable inputs other than the quoted price. Includes quoted prices for similar instruments, quoted prices for identical or similar instruments in inactive markets and amounts derived from valuation models where all significant inputs are observable in active markets; and

&nbsp;&nbsp;&nbsp;&nbsp;• *Level 3*: Unobservable inputs. Includes amounts derived from valuation models where one or more significant inputs are unobservable and require the Company to develop relevant assumptions.

The Company evaluates its financial assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level of classification as of each reporting period.

***Financial Derivatives***

The Company enters into interest rate swaps to minimize the risks and costs associated with financing activities, as well as to maintain an appropriate mix of fixed-rate and floating-rate debt. The interest rate swap agreements are contracts to exchange variable-rate for fixed-interest rate payments over the life of the agreements. As of December 31, 2024, the Company has one interest rate swap designated as a cash flow hedge, for which the Company records changes in its fair value, net of tax, in other comprehensive income.

***Net Sales***

The Company records net sales when performance obligations with the customer are satisfied. A performance obligation is a promise to transfer a distinct good to the customer and is the unit of account. The transaction price is allocated to each distinct performance obligation and recognized as net sales when, or as, the performance obligation is satisfied. All contracts have a single performance obligation as the promise to transfer the individual good is not separately identifiable from other promises and is, therefore, not distinct. Performance obligations are satisfied at a point in time and net sales are recognized when the customer accepts the delivery of a product or takes possession of a product with rights and rewards of ownership. For goods shipped by third-party carriers, the Company recognizes revenue upon shipment since the terms are generally FOB shipping point at which time control passes to the customer. The Company also arranges for certain products to be shipped directly from the manufacturer to the customer. The Company recognizes the gross revenue for these sales upon shipment as the terms are FOB shipping point at which time control passes to the customer.

The Company enters into agreements with customers to offer rebates, generally based on achievement of specified sales levels and various marketing allowances that are common industry practice. Reductions to net sales for customer programs and incentive offerings, including promotions and other volume-based incentives, are estimated using the most likely amount method and recorded in the period in which the sale occurs. Provisions for early payment discounts are accrued in the same period in which the sale occurs. The Company does not have any material payment terms as payment is received shortly after the transfer of control of the products to the customer. Commissions to internal sales teams are paid to obtain contracts. As these contracts are less than one year, these costs are expensed as incurred.

The Company includes shipping and handling costs billed to customers in net sales. Related costs are accounted for as fulfillment activities and are recognized as cost of products sold when control of the products transfers to the customer.

***Leases***

The Company mostly operates in leased facilities, which are accounted for as operating leases. The leases typically provide for a base rent plus real estate taxes and insurance. Certain of the leases provide for escalating rents over the lives of the leases, and rent expense is recognized over the terms of those leases on a straight-line basis. The real estate leases expire between 2025 and 2037.

In addition, the Company leases equipment such as trucks and forklifts. Equipment leases are accounted for as either operating or finance leases. The equipment leases expire between 2025 and 2032.

The Company determines if an arrangement is a lease at inception. Operating and finance lease assets and liabilities are included within the consolidated balance sheet, with finance lease assets included in property and equipment, net.

Lease assets and liabilities are recognized at the present value of the future lease payments at the lease commencement date. The interest rate used to determine the present value of the future lease payments is the Company's incremental borrowing rate, because the interest rates implicit in most of the leases are not readily determinable. The incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments.

Lease assets include any prepaid lease payments and lease incentives. The Company's lease terms include periods under options to extend or terminate the lease when it is reasonably certain that those options will be exercised. The Company generally uses the base, non-cancelable lease term when determining the lease assets and liabilities. Operating lease expense is recognized on a straight-line basis over the lease term. For finance leases, the lease asset is depreciated over the lease term and interest expense is recorded using the effective interest method.

------

The Company's lease agreements generally contain lease and non-lease components. Non-lease components primarily include payments for maintenance and utilities. The Company has elected to combine fixed payments for non-lease components with lease payments and account for them together as a single lease component, which increases the lease assets and liabilities.

Payments under the Company's lease agreements are primarily fixed. However, certain lease agreements contain variable payments, which are expensed as incurred and are not included in the operating lease assets and liabilities. These amounts include payments affected by the Consumer Price Index and reimbursements to landlords for items such as property insurance and common area costs. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants.

***Stock-Based Compensation***

The Company applies the fair value method to recognize compensation expense for stock-based awards. Using this method, for time-based awards the estimated grant-date fair value of the award is measured based on the fair value of the Company's common stock on the grant date and is recognized on a straight-line basis over the requisite service period based on the portion of the award that is expected to vest. The Company estimates forfeitures at the time of grant and revises the estimates, if necessary, in subsequent periods if actual forfeitures differ from those estimates. For awards with performance conditions, the Company accrues stock-based compensation over the service period if, and to the extent that, it is determined that achievement of the performance condition is probable. Market conditions are incorporated into the grant date fair value of stock-based awards with market conditions using a Monte Carlo valuation model. Compensation expense for stock-based awards with market conditions is recognized over the service period and is not reversed if the market condition is not met. If awards with market, performance, and/or service conditions are forfeited due to failure to achieve performance conditions or failure to satisfy service conditions, any previously recognized expense for such awards is reversed.

The Company utilizes the Black-Scholes option pricing model to estimate the grant-date fair value of option awards. The exercise price of option awards is set to equal the estimated fair value of the common stock at the date of the grant. The following weighted-average assumptions are also used to calculate the estimated fair value of option awards:

&nbsp;&nbsp;&nbsp;&nbsp;• *Expected volatility*: The expected volatility of the Company's shares is estimated using the historical stock price volatility over the most recent period commensurate with the estimated expected term of the awards.

&nbsp;&nbsp;&nbsp;&nbsp;• *Expected term*: For employee stock option awards, the Company determines the weighted-average expected term equal to the weighted period between the vesting period and the contract life of all outstanding options.

&nbsp;&nbsp;&nbsp;&nbsp;• *Dividend yield*: The Company has not paid dividends and does not anticipate paying a cash dividend in the foreseeable future and, accordingly, uses an expected dividend yield of zero.

&nbsp;&nbsp;&nbsp;&nbsp;• *Risk-free interest rate*: The Company bases the risk-free interest rate on the implied yield available on a U.S. Treasury note with a term equal to the estimated expected term of the awards.

***Foreign Currency Translation***

The Company's operations located outside of the U.S. where the local currency is the functional currency are translated into U.S. dollars using the current rate method. Results of operations are translated at the average rate of exchange for the period. Assets and liabilities are translated at the closing rates on the period end date. Gains and losses on translation of these accounts are accumulated and reported as a separate component of equity and other comprehensive income (loss). Gains and losses on foreign currency transactions are recognized in the consolidated statement of operations as a component of interest expense, financing costs and other.

***Income Taxes***

The Company accounts for income taxes using the liability method, which requires it to recognize a current tax liability or asset for current taxes payable or refundable and a deferred tax liability or asset for the estimated future tax effects of temporary differences between the financial statement and tax reporting bases of assets and liabilities to the extent that they are realizable. Deferred tax expense (benefit) results from the net change in deferred tax assets and liabilities during the year.

Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 740 ("ASC 740") prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Based on this guidance, the Company analyzes its filing positions in all of the federal and state jurisdictions where it is required to file income tax returns, as well as all open tax years in these jurisdictions. Tax benefits from uncertain tax positions are recognized if it is more likely than not that the position is sustainable based solely on its technical merits.

***Net Income (Loss) per Common Share***

Basic net income (loss) per common share is calculated by dividing net income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding during the period, without consideration for common share equivalents or the conversion of Preferred Stock. Common share equivalents consist of the incremental common shares issuable upon the exercise of stock options and vesting of restricted stock unit awards. Diluted net income (loss) per common share is calculated by dividing net

------

income (loss) attributable to common stockholders by the fully diluted weighted-average number of common shares outstanding during the period.

Holders of Preferred Stock would have participated in dividends on an as-converted basis when declared on common shares. As a result, Preferred Stock was classified as a participating security and thereby required the allocation of income that would have otherwise been available to common stockholders when calculating net income (loss) per common share. The Company repurchased all outstanding Preferred Stock on July 31, 2023. Refer to Note 5 for more information.

For periods in which Preferred Stock is outstanding, diluted net income (loss) per common share is calculated by utilizing the most dilutive result of the if-converted and two-class methods. In both methods, net income (loss) attributable to common stockholders and the weighted-average common shares outstanding are adjusted to account for the impact of the assumed issuance of potential common shares that are dilutive, subject to dilution sequencing rules.

***Recent Accounting Pronouncements—Adopted***

In November 2023, the FASB issued Accounting Standards Update ("ASU") 2023-07, "Segment Reporting - Improving Reportable Segment Disclosures (Topic 280)." The standard is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant expenses. The standard requires disclosures to include significant segment expenses that are regularly provided to the CODM, a description of other segment items by reportable segment, and any additional measures of a segment's profit or loss used by the CODM when deciding how to allocate resources. The standard also requires all annual disclosures currently required by ASC Topic 280 to be included in interim periods. This standard should be applied retrospectively and is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company adopted this standard on December 31, 2024 using the retrospective method of adoption, which did not have a material impact on our consolidated financial statements and related disclosures. See Note 22 for the relevant segment disclosures.

***Recent Accounting Pronouncements—Not Yet Adopted***

In October 2023, the FASB issued ASU 2023-06, "Disclosure Improvements – Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative." This standard affects a wide variety of Topics in the Codification. The effective date for each amendment will be the date on which the SEC's removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective. Early adoption is prohibited. The Company does not expect the adoption of this standard to have a material impact on the Company's consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09, "Improvements to Income Tax Disclosures," a final standard on improvements to income tax disclosures. The standard requires disaggregated information about a registrant's effective tax rate reconciliation as well as information on income taxes paid. This standard should be applied prospectively and is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU 2024-03, "Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses." The standard requires disclosure of disaggregated information about certain financial statement expense line items presented on the consolidated statements of operations in the notes to the financial statements on an interim and annual basis. The standard can be applied either prospectively or retrospectively and is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures.

------

**3. Acquisitions**

The following table presents the Company's acquisitions between January 1, 2023 and December 31, 2024. The Company acquired 100% of the equity or substantially all of the net assets in each case. The Company has not provided pro forma results of operations for any of the transactions below, as the transactions individually and in the aggregate for the respective year are not material to the Company. The results of operations for these transactions are included in the Company's consolidated statement of operations from the date of the acquisition (dollars in millions):

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Date Acquired** | **Company Name** | **U.S. State/Canadian Province** | **Branches** | **Goodwill Recognized**<sup>1</sup> | **Intangible Assets Acquired**<sup>1</sup> |
| November 1, 2024 | Fairway Wholesale Distribution, LLC | Massachusetts | 1 | $4.2 | $5.0 |
| October 1, 2024 | Ryan Seamless Gutter Systems, Inc. | Massachusetts | 1 | $4.8 | $4.7 |
| September 10, 2024 | Chicago Metal Supply & Fabrication, Inc. | Illinois | 1 | $5.0 | $5.8 |
| August 1, 2024 | Passaic Metal and Building Supplies Co. and affiliates | New Jersey and New York | 9 | $44.5 | $43.0 |
| August 1, 2024 | SSR Roof Supply Ltd. | British Columbia | 2 | $6.0 | $10.6 |
| July 10, 2024 | Roofers Mart of Southern California, Inc. | California | 1 | $0.6 | $1.1 |
| July 1, 2024 | Integrity Metals, LLC | Florida | 2 | $5.5 | $6.0 |
| July 1, 2024 | Extreme Metal Fabricators, LLC | Florida | 2 | $9.7 | $15.2 |
| May 1, 2024 | Smalley & Company | Colorado, Arizona, California, Nevada, New Mexico, and Utah | 11 | $0.3 | $25.8 |
| April 15, 2024 | General Roofing & Siding Supply Co. | Nebraska, Iowa, and North Dakota | 5 | $3.7 | $8.8 |
| February 12, 2024 | Metro Sealant & Waterproofing Supply, Inc. | Virginia and Maryland | 4 | $22.4 | $25.2 |
| February 1, 2024 | Roofers Supply of Greenville | South Carolina and North Carolina | 3 | $35.1 | $26.6 |
| November 1, 2023 | H&H Roofing Supply, LLC | California | 1 | $1.1 | $1.0 |
| October 2, 2023 | Garvin Construction Products | Maryland, New York, Connecticut, New Jersey, and Massachusetts | 5 | $17.0 | $10.1 |
| September 5, 2023 | S&H Building Material Corporation | New York | 1 | $5.3 | $4.1 |
| August 1, 2023 | All American Vinyl Siding Supply, LLC | Mississippi | 1 | $0.7 | $0.8 |
| July 11, 2023 | Crossroads Roofing Supply, Inc. | Oklahoma | 5 | $5.8 | $11.1 |
| June 12, 2023 | Silver State Building Materials, Inc. | Nevada | 1 | $0.6 | $0.9 |
| March 31, 2023 | Al's Roofing Supply, Inc. | California | 4 | $3.7 | $7.1 |
| March 31, 2023 | Prince Building Systems, LLC | Wisconsin | 1 | $0.3 | $2.0 |
| January 4, 2023 | First Coastal Exteriors, LLC | Alabama and Mississippi | 2 | $0.8 | $1.9 |

---

1. For all acquisitions occurring in 2024, the measurement period is still open and amounts are based on provisional estimates of the fair value of assets acquired and liabilities assumed as of December 31, 2024.

In each company's respective twelve months prior to being acquired by Beacon, the companies listed above produced aggregate annual sales of approximately $762.3 million (unaudited). The total transaction costs incurred by the Company for these acquisitions for the year ended December 31, 2024 were $9.9 million. Of the $177.1 million of goodwill recognized for these acquisitions, $132.5 million is deductible for tax purposes.

------

**4. Net Sales**

The following table presents the Company's net sales by line of business and geography for the period presented:

---

| | | | |
|:---|:---|:---|:---|
| *(in millions)* | **U.S.** | **Canada** | **Total** |
| **Year Ended December 31, 2024** |  |  |  |
| Residential roofing products | $4759.5 | $74.0 | $4833.5 |
| Non-residential roofing products | 2474.2 | 199.9 | 2674.1 |
| Complementary building products | 2232.8 | 22.8 | 2255.6 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total net sales | $9466.5 | $296.7 | $9763.2 |

---

**5. Net Income (Loss) Per Common Share**

Basic net income (loss) per common share is calculated by dividing net income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding during the period, without consideration for common share equivalents or the conversion of Preferred Stock (as defined below) when outstanding during the period. Common share equivalents consist of the incremental common shares issuable upon the exercise of stock options and vesting of restricted stock unit ("RSU") awards. Diluted net income (loss) per common share is calculated by dividing net income (loss) attributable to common stockholders by the fully diluted weighted-average number of common shares outstanding during the period.

In connection with the acquisition of Allied Building Products Corp. on January 2, 2018, the Company completed the sale of 400,000 shares of Series A Cumulative Convertible Participating Preferred Stock, par value $0.01 per share (the "Preferred Stock"), with an aggregate liquidation preference of $400.0 million, at a purchase price of $1,000 per share, to CD&R Boulder Holdings, L.P. ("CD&R Holdings").

On July 31, 2023 (the "Repurchase Date"), the Company repurchased (the "Repurchase") all 400,000 issued and outstanding shares of the Preferred Stock held by CD&R Holdings (the shares of Preferred Stock held by CD&R Holdings, the "Shares") pursuant to a letter agreement dated July 6, 2023 in cash for $805.4 million, including $0.9 million of accrued but unpaid dividends as of such date (the "Repurchase Price"). In connection with the Repurchase, CD&R Holdings agreed that for as long as Philip Knisely or Nathan Sleeper remained a member of the Company's Board of Directors (the "Board") and for a period of six months thereafter, the customary voting, standstill, and transfer restrictions set forth in the original Investment Agreement with respect to the Preferred Stock will continue to apply to CD&R Holdings and its related fund in accordance with their terms. Following the closing of the Repurchase, Mr. Sleeper resigned from the Company's Board and Mr. Knisely remained a member of the Company's Board until his resignation on January 23, 2024.

The aggregate Repurchase Price and related transaction fees and expenses were financed by a combination of proceeds from the 2030 Senior Notes (as defined in Note 12), as well as the 2026 ABL (as defined in Note 12), and cash on hand.

On and after the Repurchase Date, all dividends and distributions ceased to accrue on the Shares, the repurchased Shares are no longer deemed outstanding, and all rights of CD&R Holdings with respect to the repurchased Shares terminated.

Before the Repurchase occurred, the Preferred Stock was convertible perpetual participating preferred stock of the Company, and conversion of the Preferred Stock into $0.01 par value shares of the Company's common stock would have been at a conversion price of $41.26 per share (or 9,694,619 shares of common stock). The Preferred Stock accumulated dividends at a rate of 6.0% per annum (payable quarterly in cash or in-kind, subject to certain conditions). The Preferred Stock was not mandatorily redeemable; therefore, it was classified as mezzanine equity in the Company's consolidated balance sheets. Holders of Preferred Stock would have participated in dividends on an as-converted basis if declared on common shares. As a result, Preferred Stock was classified as a participating security and thereby required the allocation of income that would have otherwise been available to common stockholders when calculating net income (loss) per common share.

Prior to the Repurchase, CD&R Holdings typically reinvested cash proceeds received from the quarterly Preferred Stock dividend payments to purchase shares of the Company's common stock on the open market, the most recent of which occurred in April 2023. In connection with the Repurchase, CD&R Holdings triggered the short-swing profit rule pursuant to Section 16(b) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and disgorged $4.7 million in short-swing trading profits to the Company immediately following the Repurchase. Subsequent to the Repurchase, CD&R Holdings disgorged an additional $1.2 million of short-swing trading profits triggered by CD&R Holdings' public offering to sell 5.0 million shares of the Company's common stock. The $5.9 million of short-swing trading profits disgorged by CD&R Holdings pursuant to Section 16(b) of the Exchange Act during the year ended December 31, 2023 were recorded to additional paid-in capital net of tax of $1.6 million on the consolidated balance sheets.

The difference between the total consideration paid for the Repurchase, inclusive of direct costs, and the carrying value of the Preferred Stock, resulted in a $414.6 million Repurchase premium (the "Repurchase Premium") which was recorded as a reduction to

------

retained earnings within the consolidated statements of stockholders' equity. In calculating basic and diluted net income (loss) per common share for the year ended December 31, 2023, the Repurchase Premium is included as a component of net income (loss) attributable to common stockholders.

For periods in which Preferred Stock is outstanding, diluted net income (loss) per common share is calculated by utilizing the most dilutive result of the if-converted and two-class methods. In both methods, net income (loss) attributable to common stockholders and the weighted-average common shares outstanding are adjusted to account for the impact of the assumed issuance of potential common shares that are dilutive, subject to dilution sequencing rules.

The following table presents the components and calculations of basic and diluted net income (loss) per common share:

---

| | |
|:---|:---|
| *(in millions, except per share amounts; certain amounts may not recalculate due to rounding)* | **Year Ended December 31,**<br>**2024** |
| **Numerator:** |  |
| Net income (loss) | $361.7 |
| &nbsp;&nbsp;&nbsp;&nbsp;Dividends on Preferred Stock |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Undistributed income allocated to participating securities |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Repurchase Premium |  |
| Net income (loss) attributable to common stockholders – Basic and Diluted | $361.7 |
| **Denominator:** |  |
| Weighted-average common shares outstanding – Basic | 62.5 |
| &nbsp;&nbsp;&nbsp;&nbsp;Effect of common share equivalents | 1.2 |
| Weighted-average common shares outstanding – Diluted | 63.7 |
| **Net income (loss) per common share:** |  |
| Basic | $5.78 |
| Diluted | $5.68 |

---

The following table includes the number of shares that may be dilutive common shares in the future (except for the Preferred Stock, which was redeemed in July 2023 and therefore has no dilutive impact in the future at the time of their redemption). These shares were not included in the computation of diluted net income (loss) per common share because the effect was either anti-dilutive or the requisite performance conditions were not met:

---

| | |
|:---|:---|
| *(in millions)* | **Year Ended December 31,**<br>**2024** |
| Stock options | 0.1 |
| Restricted stock units | 0.0 |
| Preferred Stock |  |
| Employee Stock Purchase Plan | 0.0 |

---

**6. Stock-based Compensation**

On April 1, 2024, the Board approved the Beacon Roofing Supply, Inc., 2024 Stock Plan (the "2024 Plan"), subject to stockholder approval, which was subsequently obtained on May 15, 2024 in conjunction with the 2024 Annual Meeting of Stockholders. Upon approval, the 2024 Stock Plan succeeded the Beacon Roofing Supply, Inc. Second Amended and Restated 2014 Stock Plan (the "Prior Plan") and is the only plan of the Company pursuant to which stock-based awards are currently granted. The 2024 Plan provides for discretionary grants of stock options, stock awards, stock unit awards, and stock appreciation rights ("SARs") for up to 6,200,000 shares of common stock to key employees and non-employee directors. Stock options and SARs granted under the 2024 Plan, or granted under the Prior Plan after March 6, 2024, will reduce the number of available shares by one share for every share subject to the stock option or SAR, and stock awards and stock unit awards granted under the 2024 Plan, or granted under the Prior Plan after March 6, 2024, will reduce the number of available shares by 2.25 shares for every one share delivered. If (i) there is a lapse, forfeiture, expiration, termination, or cancellation of any award for any reason under the 2024 Plan, or under the Prior Plan after March 6, 2024, or (ii) shares subject to a stock award or a stock unit award under the 2024 Plan, or under the Prior Plan after March 6, 2024, are delivered or withheld as payment of any withholding taxes, then in each case such shares will again be available for issuance under the

------

2024 Plan, to be added back in the same multiple as described in the preceding sentence. Any shares delivered or withheld as payment for the exercise price of a stock option or of any withholding taxes with respect to such stock options or SARs will not be available for issuance pursuant to subsequent awards. As of December 31, 2024, there were 6,327,413 shares of common stock available for issuance pursuant to the 2024 Plan.

All unvested employee equity awards contain a "double trigger" change in control mechanism to the extent such employee equity award is continued or assumed after a change in control. If an award is not continued or assumed by a public company in an equitable manner, it shall become vested immediately prior to a change in control (at 100% payout with respect to a performance-based restricted stock unit award and at 100% of the award then earned but not vested with respect to a restricted stock unit award with market conditions). If an award is so continued or assumed, vesting will continue in accordance with the terms of the award (based on actual performance with respect to a performance-based restricted stock unit award subject to completed annual performance periods and at 100% payout for any in-progress annual performance periods) unless there is a qualifying termination (without cause or for good reason) within one-year following the change in control, in which event the award shall become vested immediately.

***Stock Options***

Non-qualified stock options generally expire 10 years after the grant date and, except under certain conditions, the options are subject to continued employment and vest in three annual installments over the three-year period following the grant date.

The fair values of the options granted for the period presented were estimated on the dates of grants using the Black-Scholes option-pricing model with the following weighted-average assumptions:

---

| | |
|:---|:---|
| | **Year Ended December 31,**<br>**2024** |
| Risk-free interest rate | 4.13% |
| Expected volatility | 48.05% |
| Expected life (in years) | 5.08 |
| Dividend yield |  |

---

The following table summarizes all stock option activity for the year ended December 31, 2024:

---

| | | | | |
|:---|:---|:---|:---|:---|
| *(in millions, except per share amounts and time periods)* | **Options**<br>**Outstanding**  | **Weighted- Average Exercise Price** | **Weighted- Average Remaining Contractual Term (Years)** | **Aggregate**<br>**Intrinsic**<br>**Value**<sup>1</sup> |
| Balance as of December 31, 2023 | 1.1 | $41.38 | 5.8 | $51.3 |
| &nbsp;&nbsp;&nbsp;&nbsp;Granted | 0.1 | $85.18 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Exercised | (0.3) | $35.71 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Canceled/Forfeited | (0.0) | $61.44 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Expired | (0.0) | $28.64 |  |  |
| Balance as of December 31, 2024 | 0.9 | $47.54 | 5.6 | $51.2 |
| Vested and expected to vest after December 31, 2024 | 0.9 | $47.22 | 5.6 | $51.0 |
| Exercisable as of December 31, 2024 | 0.7 | $39.34 | 4.7 | $44.5 |

---

1. Aggregate intrinsic value represents the difference between the closing fair value of the underlying common stock and the exercise price of outstanding, in-the-money options on the date of measurement.

During the year ended December 31, 2024, the Company recorded stock-based compensation expense related to stock options of $3.9 million. During the year ended December 31, 2024, the Company recognized a tax benefit related to stock-based compensation expense related to stock options of $2.9 million.

As of December 31, 2024, there was $4.1 million of total unrecognized compensation cost related to unvested stock options, which is expected to be recognized over a weighted-average period of 1.6 years.

------

The following table summarizes additional information on stock options for the period presented:

---

| | |
|:---|:---|
| *(in millions, except per share amounts)* | **Year Ended December 31,**<br>**2024** |
| Weighted-average fair value per share of stock options granted | $40.34 |
| Total grant date fair value of stock options vested | $2.7 |
| Total intrinsic value of stock options exercised | $15.2 |

---

***Restricted Stock Units***

Time-based RSU awards granted to employees are subject to continued employment and generally vest on the third anniversary of the grant date. The Company also grants certain RSU awards to management that additionally may contain market or performance conditions. Market conditions, which are based on stock price, are incorporated into the grant date fair value of the management awards with market conditions using a Monte Carlo valuation model. Compensation expense for management awards with market conditions is recognized over the service period and is not reversed if the market condition is not met. For awards with performance conditions, the actual number of awards that will vest can range from 0% to 200% of the original grant amount, depending upon actual Company performance below or above the established performance metric targets. At each reporting date, the Company estimates performance in relation to the defined targets when determining the projected number of management awards with performance conditions that are expected to vest and calculating the related stock-based compensation expense. Management awards with performance conditions are amortized over the service period if, and to the extent that, it is determined that achievement of the performance condition is probable. If awards with market, performance and/or service conditions are forfeited due to failure to achieve performance conditions or failure to satisfy service conditions, any previously recognized expense for such awards is reversed.

RSUs granted to non-employee directors are subject to continued service and vest on the first anniversary of the grant date (except under certain conditions). Generally, the common shares underlying the RSUs are not eligible for distribution until the non-employee director's service on the Board has terminated, and for non-employee director RSU grants made prior to fiscal year 2014, the share distribution date is six months after the director's termination of service on the Board. Any non-employee directors who have Beacon equity holdings (defined as common stock and outstanding vested equity awards) with a total fair value that is greater than or equal to five times the annual Board cash retainer may elect to have any future RSU grants settle simultaneously with vesting.

The following table summarizes all RSU activity for the year ended December 31, 2024:

---

| | | |
|:---|:---|:---|
| *(in millions, except grant date fair value amounts)* | **RSUs**<br>**Outstanding**  | **Weighted-Average Grant Date Fair Value** |
| Balance as of December 31, 2023 | 1.2 | $53.14 |
| &nbsp;&nbsp;&nbsp;&nbsp;Granted | 0.4 | $85.71 |
| &nbsp;&nbsp;&nbsp;&nbsp;Released | (0.3) | $52.05 |
| &nbsp;&nbsp;&nbsp;&nbsp;Canceled/Forfeited | (0.1) | $60.93 |
| Balance as of December 31, 2024 | 1.2 | $62.91 |
| Vested and expected to vest after December 31, 2024<sup>1</sup> | 1.1 | $62.54 |

---

1. As of December 31, 2024, outstanding awards with performance conditions were expected to vest at or below 100% of their original grant amount.

During the year ended December 31, 2024, the Company recorded stock-based compensation expense related to RSUs of $24.6 million. During the year ended December 31, 2024, the Company recognized a tax benefit related to stock-based compensation expense related to RSUs of $3.0 million.

As of December 31, 2024, there was $29.7 million of total unrecognized compensation expense related to unvested RSUs (including unrecognized expense for RSUs with performance conditions at their estimated value as of December 31, 2024), which is expected to be recognized over a weighted-average period of 1.7 years.

------

The following table summarizes additional information regarding RSUs:

---

| | |
|:---|:---|
| *(in millions, except per share amounts)* | **Year Ended December 31,**<br>**2024** |
| Weighted-average fair value per share of RSUs granted | $85.71 |
| Total grant date fair value of RSUs vested | $14.7 |
| Total intrinsic value of RSUs released | $27.7 |

---

***Employee Stock Purchase Plan***

On March 20, 2023, the Board adopted the Company's 2023 Employee Stock Purchase Plan (the "ESPP"), subject to stockholder approval, which was subsequently obtained on May 17, 2023 in conjunction with the 2023 Annual Meeting of Stockholders. The ESPP allows eligible employees to acquire shares of the Company's common stock through payroll deductions over six-month offering periods. The purchase price per share is equal to 85% of the lesser of (1) the fair market value of a share of the Company's common stock on the offering date, defined as the first trading day of the offering period, or (2) the fair market value of a share of the Company's common stock on the purchase date, defined as the last trading day of the offering period; provided that the purchase price is not less than the $0.01 par value per share of the common stock. Participant purchases are limited to a maximum of $12,500 worth of stock per offering period (or $25,000 per calendar year). The Company is authorized to grant up to 1,000,000 shares of its common stock under the ESPP.

During the year ended December 31, 2024, employees purchased 181,836 shares at a weighted-average per share price of $72.78. As of December 31, 2024, there were 818,164 shares of common stock available for issuance pursuant to the Company's ESPP. During the year ended December 31, 2024, the Company recorded stock-based compensation expense related to the ESPP of $2.5 million.

**7. Share Repurchase Program**

On February 24, 2022, the Company announced a new share repurchase program (the "Repurchase Program"), pursuant to which the Company may purchase up to $500.0 million of its common stock. On February 23, 2023, the Company announced that its Board authorized and approved an increase of the Repurchase Program by approximately $387.9 million, permitting future share repurchases of $500.0 million after considering actual share repurchases as of such re-authorization date.

Share repurchases under the Repurchase Program may be made from time to time through various means, including open market purchases (including block trades), privately negotiated transactions, accelerated share repurchase transactions ("ASR"), or through a series of forward purchase agreements, option contracts, or similar agreements and contracts (including Rule 10b5-1 plans) adopted by the Company, in each case in accordance with the rules and regulations of the SEC, including, if applicable, Rule 10b-18 of the Exchange Act. The timing, volume, and nature of share repurchases pursuant to the Repurchase Program are at the discretion of management and may be suspended or discontinued at any time. Shares repurchased under the Repurchase Program are retired immediately and are included in the category of authorized but unissued shares. Direct and incremental costs associated with the Repurchase Program are deferred and included as a component of the purchase price. The excess of the purchase price over the par value of the common shares is reflected in retained earnings.

On May 9, 2024, the Company entered into a Supplemental Confirmation (together with the Company's March 22, 2022 Variable Tenor ASR Master Agreement, the "May 2024 ASR Agreement") with Citibank, N.A. ("Citi") to repurchase $225.0 million (the "ASR Repurchase Price") of its common stock. Under the terms of the May 2024 ASR Agreement, the Company paid the ASR Repurchase Price to Citi and received an initial share delivery of 1,927,608 shares of its common stock from Citi, representing 80% of the total expected share repurchases under the May 2024 ASR Agreement, based on the closing price of the Company's common stock of $93.38 on May 9, 2024. On December 27, 2024, the Company completed the May 2024 ASR Agreement and received an additional 497,654 shares of its common stock. In total, 2,425,262 shares of the Company's common stock were delivered under the May 2024 ASR Agreement at an average price of $92.77 per share, which represents the daily volume-weighted average price of the Company's common stock during the term of the May 2024 ASR Agreement, less a discount and adjustments pursuant to the terms of the May 2024 ASR Agreement.

The following table sets forth the Company's share repurchases:

---

| | |
|:---|:---|
| *(in millions, except per share data)* | **Year Ended December 31,**<br>**2024** |
| Total number of shares repurchased | 2.4 |
| &nbsp;&nbsp;Amount repurchased | $225.0 |
| &nbsp;&nbsp;Average price per share | $92.77 |

---

------

Share repurchases for the year ended December 31, 2024 were made pursuant to the May 2024 ASR. During the year ended December 31, 2024, the Company incurred costs directly attributable to the Repurchase Program of $1.8 million.

As of December 31, 2024, the Company had approximately $164.1 million available for repurchases remaining under the Repurchase Program.

**8. Prepaid Expenses and Other Current Assets**

The following table summarizes the significant components of prepaid expenses and other current assets:

---

| | |
|:---|:---|
| | **December 31,** |
| *(in millions)* | **2024** |
| Vendor rebates | $415.5 |
| Other | 86.2 |
| &nbsp;&nbsp;Total prepaid expenses and other current assets | $501.7 |

---

**9. Property and Equipment**

The following table provides a detailed breakout of property and equipment, by type:

---

| | |
|:---|:---|
| | **December 31,** |
| *(in millions)* | **2024** |
| Equipment | $484.5 |
| Finance lease assets | 239.0 |
| Leasehold improvements | 144.7 |
| Furniture and fixtures | 79.4 |
| Software | 43.2 |
| Land and buildings | 27.5 |
| Fixed assets in progress | 60.2 |
| Total property and equipment | 1078.5 |
| Accumulated depreciation | (532.8) |
| &nbsp;&nbsp;Total property and equipment, net | $545.7 |

---

Depreciation expense for the year ended December 31, 2024 was $109.9 million.

**10. Goodwill and Intangible Assets**

***Goodwill***

The following table sets forth the changes in the carrying amount of goodwill for the period presented:

---

| | |
|:---|:---|
| *(in millions)* | |
| Balance as of December 31, 2023 | 1952.6 |
| &nbsp;&nbsp;&nbsp;&nbsp;Acquisitions | 144.7 |
| &nbsp;&nbsp;&nbsp;&nbsp;Translation and other adjustments | (2.6) |
| Balance as of December 31, 2024 | $2094.7 |

---

The changes in the carrying amount of goodwill for the year ended December 31, 2024 were driven primarily by the Company's recent acquisitions. See Note 3 for additional information.

------

***Intangible Assets***

The amortizable intangible asset lives generally range from 1 to 20 years. The following table summarizes intangible assets by category:

---

| | | |
|:---|:---|:---|
| | **December 31,** | **Weighted-Average Remaining Life**<sup>1</sup> |
| *(in millions, except time periods)* | **2024** | **(Years)** |
| Amortizable intangible assets: |  |  |
| &nbsp;&nbsp;Customer relationships and other | $1410.5 | 16.1 |
| &nbsp;&nbsp;&nbsp;Trademarks |  |  |
| Total amortizable intangible assets | 1410.5 | 16.1 |
| &nbsp;&nbsp;&nbsp;Accumulated amortization | (936.7) |  |
| Total amortizable intangible assets, net | 473.8 |  |
| Indefinite-lived trademarks | 15.3 |  |
| Total intangibles, net | $489.1 |  |

---

1. As of December 31, 2024.

Amortization expense relating to the above-listed intangible assets for the year ended December 31, 2024 was $91.9 million.

The following table summarizes the estimated future amortization expense for intangible assets (in millions):

---

| | |
|:---|:---|
| **Year Ending December 31,** | |
| 2025 | $83.8 |
| 2026 | 72.6 |
| 2027 | 61.5 |
| 2028 | 50.5 |
| 2029 | 41.4 |
| Thereafter | 164.0 |
| &nbsp;&nbsp;&nbsp;Total future amortization expense | $473.8 |

---

**11. Accrued Expenses**

The following table summarizes the significant components of accrued expenses:

---

| | |
|:---|:---|
| | **December 31,** |
| *(in millions)* | **2024** |
| Customer rebates | $139.0 |
| Inventory | 135.5 |
| Selling, general and administrative | 114.2 |
| Payroll and employee benefit costs | 101.1 |
| Interest and other | 32.6 |
| &nbsp;&nbsp;Total accrued expenses | $522.4 |

---

------

**12. Financing Arrangements**

The following table summarizes all outstanding debt (presented net of unamortized debt issuance costs) and other financing arrangements:

---

| | |
|:---|:---|
| | **December 31,** |
| *(in millions)* | **2024** |
| **Revolving Lines of Credit** |  |
| <u>2026 ABL:</u> |  |
| 2026 U.S. Revolver<sup>1</sup> | $146.0 |
| 2026 Canada Revolver<sup>2</sup> | 2.1 |
| Borrowings under revolving lines of credit, net | $148.1 |
| **Long-term Debt, net** |  |
| <u>Term Loan:</u> |  |
| 2028 Term Loan<sup>3</sup> | $1254.1 |
| &nbsp;&nbsp;&nbsp;Current portion | (12.8) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Long-term borrowings under term loan | 1241.3 |
| <u>Senior Notes:</u> |  |
| 2026 Senior Notes<sup>4</sup> | 298.8 |
| 2029 Senior Notes<sup>5</sup> | 347.8 |
| 2030 Senior Notes<sup>6</sup> | 593.3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Long-term borrowings under senior notes | 1239.9 |
| Long-term debt, net | $2481.2 |

---

1. Effective rate on borrowings of 6.23% as of December 31, 2024.

2. Effective rate on borrowings of 5.70% as of December 31, 2024.

3. Interest rate of 6.36% as of December 31, 2024.

4. Interest rate of 4.50% for the period presented.

5. Interest rate of 4.125% for the period presented.

6. Interest rate of 6.50% for the period presented.

***Debt Refinancing***

In May 2021, the Company entered into various financing arrangements to refinance certain debt instruments to take advantage of lower market interest rates for the Company's fixed rate indebtedness and to extend maturities (the "2021 Debt Refinancing"). The transactions included a new $350.0 million issuance of senior notes (the "2029 Senior Notes"). In addition, the Company entered into a second amended and restated credit agreement for its $1.30 billion asset-based revolving line of credit (the "2026 ABL"), and an amended and restated term loan credit agreement for a term loan of $1.00 billion (subsequently increased) (the "2028 Term Loan"), which together are defined as the "Senior Secured Credit Facilities."

On May 19, 2021, the Company used the net proceeds from the 2029 Senior Notes offering, together with cash on hand and borrowings under the Senior Secured Credit Facilities, to redeem all $1.30 billion aggregate principal amount outstanding of the Company's 4.875% Senior Notes due 2025 at a redemption price of 102.438%, to refinance all outstanding borrowings under the Company's previous term loan, and to pay all related accrued interest, fees and expenses.

On March 28, 2024, the Company entered into a financing arrangement to refinance the 2028 Term Loan resulting in an increase in the outstanding principal balance from $975.0 million to $1.275 billion. Refer to the discussion below for additional information regarding the refinancing.

*2029 Senior Notes*

On May 10, 2021, the Company and certain subsidiaries of the Company as guarantors completed a private offering of $350.0 million aggregate principal amount of 4.125% senior unsecured notes due 2029 at an issue price equal to par. The 2029 Senior Notes mature on May 15, 2029 and bear interest at a rate of 4.125% per annum, payable on May 15 and November 15 of each year, which

------

commenced on November 15, 2021. The 2029 Senior Notes are fully and unconditionally guaranteed, on a joint and several basis, by certain of the Company's active United States subsidiaries.

The 2029 Senior Notes and related subsidiary guarantees were offered and sold in a private transaction exempt from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"), to qualified institutional buyers in accordance with Rule 144A under the Securities Act and to non-U.S. persons outside of the United States pursuant to Regulation S under the Securities Act. The 2029 Senior Notes and related subsidiary guarantees have not been, and will not be, registered under the Securities Act or the securities laws of any state or other jurisdiction, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and other applicable securities laws.

The Company capitalized debt issuance costs of $4.0 million related to the 2029 Senior Notes, which are being amortized over the term of the financing arrangements.

As of December 31, 2024, the outstanding balance on the 2029 Senior Notes, net of $2.2 million of unamortized debt issuance costs, was $347.8 million.

*2026 ABL*

On May 19, 2021, the Company entered into a $1.30 billion senior secured asset-based revolving credit facility with Wells Fargo Bank, N.A. and a syndicate of other lenders. The 2026 ABL provides for revolving loan commitments in both the United States in an amount up to $1.25 billion ("2026 U.S. Revolver") and Canada in an amount up to $50.0 million ("2026 Canada Revolver") (as such amounts may be reallocated pursuant to the terms of the 2026 ABL). The 2026 ABL has a maturity date of May 19, 2026. The unused commitment fees on the 2026 ABL are 0.20% per annum.

The 2026 U.S. Revolver has various borrowing tranches with an interest rate based, at the Company's option, on a base rate, plus an applicable margin, or a Term SOFR rate, plus an applicable margin. The applicable margin for borrowings under the 2026 U.S. Revolver is based on the Company's quarterly average excess availability as determined by reference to a borrowing base and ranges from 0.25% to 0.75% per annum in the case of base rate borrowings and 1.25% to 1.75% per annum in the case of Term SOFR borrowings.

The 2026 Canada Revolver has various borrowing tranches with an interest rate based, at the Company's option, on a base rate, plus an applicable margin, or an adjusted CORRA rate, plus an applicable margin. The applicable margin for borrowings under the 2026 Canada Revolver is based on the Company's quarterly average excess availability as determined by reference to a borrowing base and ranges from 0.25% to 0.75% per annum in the case of base rate borrowings and 1.25% to 1.75% per annum in the case of CORRA borrowings.

The 2026 ABL contains a springing financial covenant that requires a minimum 1.00:1.00 Fixed Charge Coverage Ratio (consolidated EBITDA less capital expenditures to fixed charges, each as defined in the 2026 ABL credit agreement) as of the end of each fiscal quarter (in each case, calculated on a trailing four fiscal quarter basis). The covenant would become operative if the Company failed to maintain a specified minimum amount of availability to borrow under the 2026 ABL, which was not applicable to the Company as of December 31, 2024.

In addition, the Senior Secured Credit Facilities and the 2029 Senior Notes (as well as the 2030 Senior Notes and the 2026 Senior Notes, each as defined below) are subject to negative covenants that, among other things and subject to certain exceptions, limit the Company's ability and the ability of its restricted subsidiaries to: (i) incur indebtedness (including guarantee obligations); (ii) incur liens; (iii) engage in mergers or other fundamental changes; (iv) dispose of certain property or assets; (v) make certain payments, dividends or other distributions; (vi) make certain acquisitions, investments, loans and advances; (vii) prepay certain indebtedness; (viii) change the nature of their business; (ix) engage in certain transactions with affiliates; (x) engage in sale-leaseback transactions; and (xi) enter into certain other restrictive agreements. The 2026 ABL is secured by a first priority lien over substantially all of the Company's and each guarantor's accounts and other receivables, chattel paper, deposit accounts (excluding any such account containing identifiable proceeds of Term Priority Collateral (as defined below)), inventory, and, to the extent related to the foregoing and other ABL Priority Collateral, general intangibles (excluding equity interests in any subsidiary of the Company and all intellectual property), instruments, investment property (but not equity interests in any subsidiary of the Company), commercial tort claims, letters of credit, supporting obligations and letter of credit rights, together with all books, records and documents related to, and all proceeds and products of, the foregoing, subject to certain customary exceptions (the "ABL Priority Collateral"), and a second priority lien over substantially all of the Company's and each guarantor's other assets, including all of the equity interests of any subsidiary held by the Company or any guarantor, subject to certain customary exceptions (the "Term Priority Collateral"). Beacon Sales Acquisition, Inc., a Delaware corporation and subsidiary of the Company, is a U.S. Borrower under the 2026 ABL and Beacon Roofing Supply Canada Company, an unlimited liability company organized under the laws of Nova Scotia and subsidiary of the Company, is a Canadian borrower under the 2026 ABL. The 2026 ABL is fully and unconditionally guaranteed, on a joint and several basis, by the Company's active U.S. subsidiaries.

The Company capitalized debt issuance costs of $8.3 million related to the 2026 ABL, which are being amortized over the term of the financing arrangements.

------

As of December 31, 2024, the outstanding balance on the 2026 ABL, net of $2.3 million of unamortized debt issuance costs, was $148.1 million. The Company also had outstanding standby letters of credit related to the 2026 U.S. Revolver in the amount of $17.8 million as of December 31, 2024.

*2028 Term Loan*

On May 19, 2021, the Company entered into a $1.00 billion senior secured term loan B facility with Citi and a syndicate of other lenders. The 2028 Term Loan, prior to the most recent amendment, required quarterly principal payments in the amount of $2.5 million, with the remaining outstanding principal to be paid on its May 19, 2028 maturity date. The interest rate was based, at the Company's option, on a base rate, plus an applicable margin, or a Term SOFR rate, plus an applicable margin. The applicable margin for the 2028 Term Loan ranged, depending on the Company's consolidated total leverage ratio (consolidated total indebtedness to consolidated EBITDA, each as defined in the 2028 Term Loan credit agreement), from 1.25% to 1.50% per annum in the case of base rate borrowings and 2.25% to 2.50% per annum in the case of Term SOFR borrowings.

On March 28, 2024, the Company entered into Amendment No. 3 to the 2028 Term Loan (the "2028 Term Loan Amendment No. 3") with Citi, as administrative agent and collateral agent, and the lenders party thereto. The 2028 Term Loan Amendment No. 3, among other things, (i) increases the aggregate outstanding amount of outstanding term loans to $1.275 billion, (ii) reduces the interest rate for base rate borrowings to a rate per annum equal to a base rate plus a margin equal to 2.00%, (iii) reduces the interest rate to a rate per annum equal to Term SOFR with a 0.00% floor, plus a margin equal to 2.00%, and (iv) increases the required quarterly principal payments from $2.5 million to $3.2 million starting March 31, 2024 (the "2028 Term Loan Refinancing"). Except as amended by the 2028 Term Loan Amendment No. 3, the remaining terms of the 2028 Term Loan remain in full force and effect.

The Company evaluated the 2028 Term Loan Refinancing on a lender-by-lender basis to determine whether the transaction should be accounted for as either a debt extinguishment or debt modification. As a result, the Company recognized a loss on debt extinguishment of $2.4 million during the year ended December 31, 2024. In addition, unamortized historical debt issuance costs of $9.7 million and new debt issuance costs of $0.1 million related to the 2028 Term Loan continue to be amortized over the term of the financing arrangement.

The 2028 Term Loan is secured by a shared first-priority lien on the Term Priority Collateral and a shared second-priority lien on the ABL Priority Collateral. Certain excluded assets will not be included in the Term Priority Collateral and the ABL Priority Collateral. The 2028 Term Loan is fully and unconditionally guaranteed, on a joint and several basis, by certain of the Company's active U.S. subsidiaries.

On March 16, 2023, the Company novated and amended its interest rate swap agreement related to the 2028 Term Loan. For additional information, see Note 21.

As of December 31, 2024, the outstanding balance on the 2028 Term Loan, net of $8.2 million of unamortized debt issuance costs, was $1.25 billion.

***2030 Senior Notes***

On July 31, 2023, the Company, and certain subsidiaries of the Company as guarantors, completed a private offering of $600.0 million aggregate principal amount of 6.50% Senior Secured Notes due 2030 (the "2030 Senior Notes") at an issue price equal to par. The 2030 Senior Notes mature on August 1, 2030 and bear interest at a rate of 6.50% per annum, payable on February 1 and August 1 of each year, commencing on February 1, 2024. The 2030 Senior Notes and related subsidiary guarantees are secured by a shared first-priority lien on the Term Priority Collateral and a shared second-priority lien on the ABL Priority Collateral. Certain excluded assets will not be included in the Term Priority Collateral and the ABL Priority Collateral. The 2030 Senior Notes are fully and unconditionally guaranteed, on a joint and several basis, by certain of the Company's active U.S. subsidiaries.

The 2030 Senior Notes and related subsidiary guarantees were offered and sold in a private transaction exempt from the registration requirements of the Securities Act, to qualified institutional buyers in accordance with Rule 144A under the Securities Act and to non-U.S. persons outside of the United States pursuant to Regulation S under the Securities Act. The 2030 Senior Notes and related subsidiary guarantees have not been, and will not be, registered under the Securities Act or the securities laws of any state or other jurisdiction, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and other applicable securities laws.

On July 31, 2023 the Company used net proceeds from the offering, together with cash on hand and available borrowings under the 2026 ABL to complete the Repurchase of the Preferred Stock.

The Company capitalized debt issuance costs of $8.1 million related to the 2030 Senior Notes, which are being amortized over the term of the financing arrangement.

As of December 31, 2024, the outstanding balance on the 2030 Senior Notes, net of $6.7 million of unamortized debt issuance costs, was $593.3 million.

------

***2026 Senior Notes***

On October 9, 2019, the Company, and certain subsidiaries of the Company as guarantors, completed a private offering of $300.0 million aggregate principal amount of 4.50% Senior Secured Notes due 2026 (the "2026 Senior Notes") at an issue price equal to par. The 2026 Senior Notes mature on November 15, 2026 and bear interest at a rate of 4.50% per annum, payable on May 15 and November 15 of each year, commencing on May 15, 2020. The 2026 Senior Notes and related subsidiary guarantees are secured by a shared first-priority lien on the Term Priority Collateral and a shared second-priority lien on the ABL Priority Collateral. Certain excluded assets will not be included in the Term Priority Collateral and the ABL Priority Collateral. The 2026 Senior Notes are fully and unconditionally guaranteed, on a joint and several basis, by certain of the Company's active U.S. subsidiaries.

The 2026 Senior Notes and related subsidiary guarantees were offered and sold in a private transaction exempt from the registration requirements of the Securities Act, to qualified institutional buyers in accordance with Rule 144A under the Securities Act and to non-U.S. persons outside of the United States pursuant to Regulation S under the Securities Act. The 2026 Senior Notes and related subsidiary guarantees have not been, and will not be, registered under the Securities Act or the securities laws of any state or other jurisdiction, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and other applicable securities laws.

On October 28, 2019, the Company used the net proceeds from the offering, together with cash on hand and available borrowings under the Company's previous asset-based revolving credit facility, to redeem all $300.0 million aggregate principal amount outstanding of the Company's 6.375% Senior Notes due 2023.

The Company capitalized debt issuance costs of $4.7 million related to the 2026 Senior Notes, which are being amortized over the term of the financing arrangements.

As of December 31, 2024, the outstanding balance on the 2026 Senior Notes, net of $1.2 million of unamortized debt issuance costs, was $298.8 million.

***Other Information***

The following table presents annual principal payments for all outstanding financing arrangements for each of the next five years and thereafter (in millions):

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Year Ending December 31,** | **2026 ABL** | **2028 Term Loan**  | **Senior Notes**<sup>1</sup>  | **Total**  |
| 2025 | $— | $12.8 | $— | $12.8 |
| 2026 | 150.4 | 12.8 | 300.0 | 463.2 |
| 2027 |  | 12.8 |  | 12.8 |
| 2028 |  | 1223.9 |  | 1223.9 |
| 2029 |  |  | 350.0 | 350.0 |
| Thereafter |  |  | 600.0 | 600.0 |
| &nbsp;&nbsp;&nbsp;Total debt | 150.4 | 1262.3 | 1250.0 | 2662.7 |
| Unamortized debt issuance costs | (2.3) | (8.2) | (10.1) | (20.6) |
| &nbsp;&nbsp;&nbsp;Total debt, net | $148.1 | $1254.1 | $1239.9 | $2642.1 |

---

1. Represent principal amounts for 2026, 2029, and 2030 Senior Notes.

Under the terms of the 2026 ABL, the 2028 Term Loan, the 2026 Senior Notes, the 2029 Senior Notes, and the 2030 Senior Notes, the Company is limited in making certain restricted payments, including dividends on its common stock. Based on the provisions in the respective debt agreements and given the Company's intention to not pay common stock dividends in the foreseeable future, the Company does not believe that the restrictions are significant.

------

**13. Leases**

The following table summarizes components of lease costs recognized in the consolidated statement of operations:

---

| | |
|:---|:---|
| | **Year Ended December 31,** |
| *(in millions)* | **2024** |
| Operating lease costs | $146.7 |
| Finance lease costs: |  |
| &nbsp;&nbsp;&nbsp;Amortization of right-of-use assets | 33.7 |
| &nbsp;&nbsp;&nbsp;Interest on lease obligations | 8.7 |
| Variable lease costs | 15.1 |
| Total lease costs | $204.2 |

---

The following table presents supplemental cash flow information related to the Company's leases:

---

| | |
|:---|:---|
| *(in millions)*  | **Year Ended December 31,**<br>**2024** |
| Cash paid for amounts included in measurement of lease obligations: |  |
| &nbsp;&nbsp;&nbsp;Operating cash outflows from operating leases | $137.8 |
| &nbsp;&nbsp;&nbsp;Operating cash outflows from finance leases | $8.8 |
| &nbsp;&nbsp;&nbsp;Financing cash outflows from finance leases | $30.7 |
| Right-of-use assets obtained in exchange for new finance lease liabilities | $78.6 |
| Right-of-use assets obtained in exchange for new operating lease liabilities | $124.5 |

---

As of December 31, 2024, the Company's operating leases had a weighted-average remaining lease term of 6.3 years and a weighted-average discount rate of 6.07%, and the Company's finance leases had a weighted-average remaining lease term of 4.6 years and a weighted-average discount rate of 6.34%.

The following table summarizes future lease payments as of December 31, 2024 (in millions):

---

| | | |
|:---|:---|:---|
| **Year Ending December 31,** | **Operating Leases**  | **Finance Leases**  |
| 2025 | $136.9 | $48.6 |
| 2026 | 139.3 | 47.7 |
| 2027 | 122.5 | 42.7 |
| 2028 | 104.9 | 31.7 |
| 2029 | 85.1 | 18.7 |
| Thereafter | 194.3 | 10.8 |
| Total future lease payments | 783.0 | 200.2 |
| Imputed interest | (137.1) | (26.4) |
| Total lease liabilities | $645.9 | $173.8 |

---

**14. Commitments and Contingencies**

The Company is subject to loss contingencies pursuant to various federal, state, and local environmental laws and regulations; however, the Company is not aware of any reasonably possible losses that would have a material impact on its results of operations, financial position, or liquidity. Potential environmental loss contingencies include possible obligations to remove or mitigate the effects on the environment of the placement, storage, disposal, or release of certain chemical or other substances by the Company or by other parties. Historically, environmental liabilities have not had a material impact on the Company's results of operations, financial position, or liquidity.

The Company is subject to litigation and governmental investigations from time to time in the ordinary course of business; however, the Company does not expect the results, if any, to have a material adverse impact on its results of operations, financial position, or

------

liquidity. The Company accrues a liability for legal claims when payments associated with the claims become probable and the costs can be reasonably estimated. The Company also considers whether an insurance recovery receivable is applicable and appropriate based on the specific legal claim. The actual costs of resolving legal claims and governmental investigations may be substantially higher or lower than the amounts accrued for those activities.

In December 2018, a Company vehicle was involved in a fatal accident. In October 2019, the decedent's estate and two bystanders sued the driver and the Company in Utah state court. The trial was in August 2022 and the jury found the driver not liable. In April 2023, the trial court granted plaintiffs' motion for judgment notwithstanding the verdict, entering judgment against the driver and ordering the trial to proceed on the claims against the Company. The Utah appeals court granted an interlocutory appeal and affirmed the trial court's decision in December 2024. At this time there is not a probable loss with respect to this matter and any potential loss in regard to this matter is not reasonably estimable. Accordingly, the Company has not accrued any amounts related to this matter within its financial statements as of December 31, 2024.

**15. Accumulated Other Comprehensive Income (Loss)**

Other comprehensive income (loss) is composed of certain gains and losses that are excluded from net income under GAAP and instead recorded as a separate element of stockholders' equity.

The following table summarizes the components of, and changes in, AOCI:

---

| | | | |
|:---|:---|:---|:---|
| *(in millions)* | **Foreign <br>Currency<br>Translation** | **Derivative <br>Financial<br>Instruments** | **AOCI** |
| Balance as of December 31, 2023 | $(19.5) | $5.2 | $(14.3) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other comprehensive income (loss) before reclassifications | (11.0) | 0.7 | (10.3) |
| &nbsp;&nbsp;&nbsp;&nbsp;Reclassifications out of other comprehensive income (loss) |  | (1.6) | (1.6) |
| Balance as of December 31, 2024 | $(30.5) | $4.3 | $(26.2) |

---

Gains (losses) on derivative instruments are reclassified in the consolidated statements of operations in interest expense, financing costs and other, net in the period in which the hedged transaction affects earnings.

**16. Income Taxes**

The Company recorded a provision for (benefit from) income taxes of $124.0 million for the year ended December 31, 2024.

The following table summarizes the components of the income tax provision (benefit):

---

| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;*(in millions)* | **Year Ended December 31,**<br>**2024** |
| Current: |  |
| &nbsp;&nbsp;Federal | $76.9 |
| &nbsp;&nbsp;&nbsp;Foreign | 3.0 |
| &nbsp;&nbsp;&nbsp;State | 24.8 |
| Total current taxes | 104.7 |
| Deferred: |  |
| &nbsp;&nbsp;&nbsp;Federal | 13.7 |
| &nbsp;&nbsp;&nbsp;Foreign | 1.7 |
| &nbsp;&nbsp;&nbsp;State | 3.9 |
| Total deferred taxes | 19.3 |
| Provision for (benefit from) income taxes | $124.0 |

---

------

The following table is a reconciliation of the statutory federal income tax rate to the Company's effective income tax rate for the period presented:

---

| | |
|:---|:---|
| | **Year Ended December 31,**<br>**2024** |
| U.S. federal income taxes at statutory rate | 21.0% |
| State income taxes, net of federal benefit | 4.7% |
| Share-based payments | (1.0)% |
| Non-deductible meals and entertainment | 0.5% |
| Other | 0.3% |
| Effective tax rate | 25.5% |

---

Deferred income taxes reflect the tax consequences of temporary differences between the amounts of assets and liabilities for financial reporting purposes and such amounts as measured by tax law. These temporary differences are determined according to ASC 740. The following table presents temporary differences that give rise to deferred tax assets and liabilities for the period presented:

---

| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;*(in millions)* | **December 31,**<br>**2024** |
| Deferred tax assets: |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred compensation | $13.6 |
| &nbsp;&nbsp;&nbsp;&nbsp;Allowance for doubtful accounts | 6.2 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued vacation and other | 13.1 |
| &nbsp;&nbsp;&nbsp;&nbsp;Inventory valuation | 19.4 |
| &nbsp;&nbsp;&nbsp;&nbsp;Tax loss carryforwards<sup>1</sup> | 3.3 |
| &nbsp;&nbsp;&nbsp;&nbsp;Unrealized (gain) loss on financial derivatives | (1.4) |
| &nbsp;&nbsp;&nbsp;&nbsp;Lease liability | 161.2 |
| Total deferred tax assets | 215.4 |
| Deferred tax liabilities: |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Excess book over tax depreciation and amortization | (113.8) |
| &nbsp;&nbsp;&nbsp;&nbsp;Lease right-of-use asset | (138.6) |
| Total deferred tax liabilities | (252.4) |
| Net deferred income tax assets (liabilities) | $(37.0) |

---

1. Composed of interest limitation carryforwards and state net operating loss carryforwards.

The Company acquired $135.3 million of federal and state net operating loss carryforwards ("NOLs") as part of its acquisition of Roofing Supply Group, LLC in fiscal year 2016. The Company has $0.1 million in state NOLs remaining as of December 31, 2024.

The Company's non-domestic subsidiary, BRSCC, is treated as a controlled foreign corporation. On August 1, 2024, BRSCC acquired SSR which was also treated as a controlled foreign corporation. SSR amalgamated into BRSCC effective December 31, 2024. BRSCC and SSR's taxable income, which reflects all of the Company's Canadian operations, is being taxed only in Canada and would generally be taxed in the U.S. only upon an actual or deemed distribution. The Company expects that BRSCC's earnings will be indefinitely reinvested for the foreseeable future; therefore, no U.S. deferred tax asset or liability for the differences between the book basis and the tax basis of BRSCC has been recorded as of December 31, 2024. Under the Tax Cuts and Jobs Act enacted in December 2017, future distributions from foreign subsidiaries will generally be subject to a federal dividends received deduction in the U.S. Should the earnings be remitted as dividends, the Company may be subject to additional foreign withholding and state income taxes. It is not practicable to estimate the amount of any additional taxes which may be payable on the undistributed earnings.

As of December 31, 2024, the Company's goodwill balance on its consolidated balance sheet was $2.09 billion, of which there remains an amortizable tax basis of $1.02 billion for income tax purposes.

As of December 31, 2024, there were no uncertain tax positions which, if recognized, would affect the Company's effective tax rate. The Company's accounting policy is to recognize any interest and penalties related to uncertain tax positions in income tax expense in the consolidated statements of operations.

------

The Company has operations in 50 U.S. states and seven provinces in Canada. The Company is currently under audit in certain state and local jurisdictions for various years. These audits may involve complex issues, which may require an extended period of time to resolve. Additional taxes are reasonably possible; however, the amounts cannot be estimated at this time or would not be significant. The Company is no longer subject to U.S. federal income tax examinations for any fiscal years ended on or before September 30, 2020. For the majority of states, the Company is also no longer subject to tax examinations for any fiscal years ended on or before September 30, 2020. In Canada, the Company is no longer subject to federal or provincial tax examinations for any fiscal years ended on or before September 30, 2020.

On October 8, 2021, the Organization for Economic Co-operation and Development ("OECD") released a statement on the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting, which agreed to a two-pillar solution to address tax challenges of the digital economy. On December 20, 2021, the OECD released the Model GloBE Rules for Pillar Two defining a 15% global minimum tax rate for large multinational corporations. Canada and other jurisdictions have enacted Pillar Two legislation in 2024, but the Company believes that any Pillar Two exposure in those jurisdictions would be immaterial. The OECD continues to release additional guidance and countries are implementing legislation with widespread adoption of the Model GloBE Rules for Pillar Two. The Company is continuing to evaluate the Model GloBE Rules for Pillar Two and related legislation, and their potential impact on future periods.

**17. Geographic Data**

The following table summarizes geographic information for long-lived assets, including property and equipment and other non-current assets, excluding intangible assets, for the period presented:

---

| | |
|:---|:---|
| | **December 31,** |
| *(in millions)* | **2024** |
| Long-lived assets: |  |
| &nbsp;&nbsp;&nbsp;&nbsp;U.S. | $533.4 |
| &nbsp;&nbsp;&nbsp;&nbsp;Canada | 22.3 |
| Total long-lived assets | $555.7 |

---

**18. Allowance for Doubtful Accounts**

The following table summarizes changes in the valuation of the allowance for doubtful accounts for the balance sheet period presented:

---

| | |
|:---|:---|
| *(in millions)* | **Year Ended December 31,**<br>**2024** |
| Beginning balance | $15.0 |
| &nbsp;&nbsp;&nbsp;Charged to operations | 12.8 |
| &nbsp;&nbsp;&nbsp;Write-offs | (10.2) |
| Ending balance | $17.6 |

---

**19. Fair Value Measurement**

As of December 31, 2024, the carrying amount of cash and cash equivalents, accounts receivable, prepaid and other current assets, accounts payable, and accrued expenses approximated fair value because of the short-term nature of these instruments. The Company measures its cash equivalents at amortized cost, which approximates fair value based upon quoted market prices (Level 1).

As of December 31, 2024, based upon recent trading prices (Level 2), the fair values of the Company's $300.0 million 2026 Senior Notes, $350.0 million 2029 Senior Notes, and $600.0 million 2030 Senior Notes were $294.8 million, $331.6 million, and $607.5 million, respectively.

As of December 31, 2024, the fair value of the Company's term loan and revolving lines of credit approximated the amount outstanding. The Company estimates the fair value of its term loan and revolving lines of credit by discounting the future cash flows of each instrument using estimated market rates of debt instruments with similar maturities and credit profiles (Level 3).

------

**20. Employee Benefit Plans**

The Company maintains defined contribution plans covering non-union employees of the Company who have 90 days of service and are at least 21 years old. Certain union employees are eligible to participate in the Company's defined contribution plans if allowed for by their collective bargaining agreement. All employees who are non-resident aliens are also excluded from participation. An eligible employee may elect to make a before-tax contribution of between 1% and 100% of his or her compensation through payroll deductions, not to exceed the annual limit set by law. The Company currently matches the first 50% of participant contributions limited to 6% of a participant's gross compensation (maximum Company match is 3%). The combined total expense for this plan and a similar plan for Canadian employees for the year ended December 31, 2024 was $17.6 million.

The Company also participates in multi-employer defined benefit plans for which it is not the sponsor. The aggregated expense for these plans for the year ended December 31, 2024 was $2.3 million. Withdrawal from participation in one of these plans requires the Company to make a lump-sum contribution to the plan, and the Company's withdrawal liability depends on the extent of the plan's funding of vested benefits, among other factors.

**21. Financial Derivatives**

The Company uses interest rate derivative instruments to manage the risk related to fluctuating cash flows from interest rate changes by converting a portion of its variable-rate borrowings into fixed-rate borrowings.

On September 11, 2019, the Company entered into two interest rate swap agreements to manage the interest rate risk associated with the variable rate on the Company's previous term loan. Each swap agreement has a notional amount of $250.0 million. As part of the 2021 Debt Refinancing, the Company refinanced its previous term loan, resulting in the issuance of the 2028 Term Loan; the two interest rate swaps were designed and executed such that they continue to hedge against a total notional amount of $500.0 million related to the refinanced 2028 Term Loan. One agreement (the "5-year swap") was scheduled to expire on August 30, 2024 and swaps the thirty-day LIBOR with a fixed-rate of 1.49%. The second agreement (the "3-year swap") expired on August 30, 2022 and swapped the thirty-day LIBOR with a fixed-rate of 1.50%. At the inception of the swap agreements, the Company determined that both swaps qualified for cash flow hedge accounting under ASC 815. Therefore, changes in the fair value of the swaps, net of taxes, were recognized in other comprehensive income each period, then reclassified into the consolidated statements of operations as a component of interest expense, financing costs and other, net in the period in which the hedged transaction affected earnings.

On March 16, 2023, the Company novated its 5-year swap agreement to another counterparty and, in connection with such novation, amended the interest rate swap agreement. The amendment changed the index rate from LIBOR to SOFR, increased the total notional amount of the interest rate swap to $500.0 million, and extended the termination date to March 31, 2027 (the "2027 interest rate swap"). Specifically, the fixed rate of 1.49% indexed to LIBOR was modified to 3.00% indexed to SOFR. The Company used a strategy commonly referred to as "blend and extend" which allows the asset position of the novated 5-year swap agreement of approximately $9.9 million to be effectively blended into the new 2027 interest rate swap agreement. As a result of this transaction, on March 16, 2023, the 5-year swap agreement was de-designated and the unrealized gain of $9.9 million included within accumulated other comprehensive income was frozen and was ratably reclassified as a reduction to interest expense, financing costs and other, net over the original term of the 5-year swap as the hedged transactions affect earnings. The unrealized gain of $9.9 million was fully recognized as of August 2024. Additionally, the 2027 interest rate swap had a fair value of $9.9 million at inception and will be ratably recorded to accumulated other comprehensive income and reclassified to interest expense, financing costs and other, net over the term of the 2027 interest rate swap, or through March 31, 2027 as the hedged transactions affect earnings. At the inception of the 2027 interest rate swap, the Company determined that the swap qualified for cash flow hedge accounting under ASC 815. Therefore, changes in the fair value of the swap, net of taxes, will be recognized in other comprehensive income each period, then reclassified into the consolidated statements of operations as a component of interest expense, financing costs and other, net in the period in which the hedged transaction affects earnings. The 2027 interest rate swap is the only swap agreement outstanding as of December 31, 2024.

The effectiveness of the outstanding 2027 interest rate swap will be assessed qualitatively by the Company during the life of the hedge by (i) comparing the current terms of the hedge with the related hedged debt to assure they continue to coincide and (ii) through an evaluation of the ability of the counterparty to the hedge to honor its obligations under the hedge. The Company performed a qualitative analysis as of December 31, 2024 and concluded that the outstanding 2027 interest rate swap continues to meet the requirements under ASC 815 to qualify for cash flow hedge accounting. As of December 31, 2024, the fair value of the 2027 interest rate swap, net of tax, was $8.5 million in favor of the Company.

During the year ended December 31, 2024, the Company reclassified gains of $1.6 million out of accumulated other comprehensive income (loss) and to interest expense, financing costs and other, net. Approximately $5.6 million of net gains included in accumulated other comprehensive income (loss) at December 31, 2024 is expected to be reclassified into earnings within the next 12 months as interest payments are made on the Company's Term Loan and amortization of the inception date fair value of the 2027 interest rate

------

swap occurs. The Company records any differences paid or received on its interest rate hedges to interest expense, financing costs and other, net within the consolidated statements of operations.

The fair value of the interest rate swap is determined through the use of a pricing model, which utilizes verifiable inputs such as market interest rates that are observable at commonly quoted intervals (generally referred to as the "forward curve") for the full terms of the hedge agreements. These values reflect a Level 2 measurement under the applicable fair value hierarchy. The following table summarizes the combined fair value, net of tax, of the interest rate swap (in millions):

---

| | | |
|:---|:---|:---|
| | | **Net Assets (Liabilities) as of December 31, 2024** |
|<br>**Instrument** |<br>**Fair Value Hierarchy** | **Net Assets (Liabilities) as of December 31, 2024** |
| Designated interest rate swap<sup>1</sup> | Level 2 | $8.5 |

---

1. Assets are included in the consolidated balance sheets in prepaid expenses and other current assets, while liabilities are included in accrued expenses.

The following table summarizes the amounts of gain (loss) on the change in fair value of the designated interest rate swap recognized in other comprehensive income:

---

| | |
|:---|:---|
|<br>**Instrument** | **Year Ended December 31,**<br>**2024** |
| Designated interest rate swap | $0.7 |

---

**22. Segment Reporting**

As further described in Note 2, the Company's CODM is the Chief Executive Officer and the Company views its operations and manages its business as a single operating segment, which is the wholesale distribution of building materials. The Company's revenues for its single operating segment are derived from the sale of residential and non-residential roofing products, as well as complementary products, such as siding and waterproofing.

The accounting policies for the wholesale distribution of building materials operating segment are the same as those described in Note 2. The CODM evaluates performance for the Company's single operating segment and decides how to allocate resources based on the Company's consolidated net income that is reported in the consolidated statements of operations as net income (loss). The measure of segment assets is reported on the consolidated balance sheets as total assets. The CODM allocates resources across the Company based on consolidated net income derived during the annual budgeting process and throughout the year in monitoring actual results compared to budget and updated forecasts. These results are used to assess segment performance and determine the compensation of certain employees.

The operating segment financial information regularly reviewed by the CODM, inclusive of assets, revenue, expenses, profit or loss, and noncash items are presented on a consolidated basis in the same amount and using the same captions as those included in the consolidated statements of operations, consolidated balance sheets, and consolidated statements of cash flows. There are no additional segment expense categories regularly provided to the CODM. Therefore, there are also no amounts classified as other segment items requiring disclosure.

## Exhibit 99.3

**Exhibit 99.3**

**PREDECESSOR FINANCIAL INFORMATION**

**Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations (as predecessor)**

Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States ("GAAP"). These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date of the consolidated financial statements as well as the reported amounts of revenues and expenses during the periods presented. Our consolidated financial statements would be affected to the extent that there are material differences between these estimates and actual results. In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require management's judgment in its application. There are also areas in which management's judgment in selecting any available alternative would not produce a materially different result. The following discussion should be read in conjunction with our consolidated financial statements and notes appearing elsewhere in this report.

**Overview**

Prior to the Beacon Acquisition (as defined below), QXO Building Products, Inc. ("QXO Building Products", "we", "our", or the "Company"), formerly known as Beacon Roofing Supply, Inc., was the largest publicly-traded specialty wholesale distributor of roofing and complementary building products, including waterproofing products, in North America. We have served the building industry for over 95 years and as of April 28, 2025, we operated 600 branches throughout all 50 states in the U.S. and seven provinces in Canada. We offer one of the most extensive ranges of high-quality professional grade exterior products comprising over 135,000 SKUs, and we serve approximately 110,000 residential and non-residential customers who trust us to help them save time, improve efficiency, and enhance productivity.

As of April 28, 2025, we operated 600 branches, which we designate as either standalone or co-located. A co-located branch shares all or a portion of a physical location with a standalone branch, but it records sales separately (to a different customer base and/or through different product offerings from the standalone branch) and generally operates with independent employees and inventory.

***Beacon Acquisition***

On March 20, 2025, the Company entered into an Agreement and Plan of Merger (the "Merger Agreement") with QXO, Inc. ("QXO") and Queen MergerCo, Inc. ("Merger Sub" or the "Acquirer"), a wholly owned subsidiary of QXO, pursuant to which QXO agreed to acquire the Company for a purchase price of $124.35 per share of common stock (the "Merger Consideration") of the Company (the "Beacon Acquisition"). On April 29, 2025, pursuant to the Merger Agreement, Merger Sub merged with and into the Company (the "Merger"), with the Company remaining as the surviving entity and being renamed QXO Building Products, Inc., and QXO completed its acquisition of the Company in a transaction that valued the Company at $10.6 billion.

During the period from January 1, 2025 through April 28, 2025, the Company recognized $81.0 million of transaction costs incurred in connection with the Beacon Acquisition, which are included in selling, general and administrative expense in the consolidated statements of operations.

------

**Results of Consolidated Operations**

The following tables set forth our results of operations for the periods presented. The period-to-period comparison of financial results is not necessarily indicative of future results:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Period from <br>January 1, 2025<br>through <br>April 28, 2025** | **Year Ended <br>December 31, 2024** | **% of net sales**<sup>(1)</sup> | **% of net sales**<sup>(1)</sup> |
| *(in millions, except percentages)* | **Period from <br>January 1, 2025<br>through <br>April 28, 2025** | **Year Ended <br>December 31, 2024** | **2025** | **2024** |
| Net sales | $2694.6 | $9763.2 | 100.0% | 100.0% |
| &nbsp;&nbsp;&nbsp;&nbsp;Cost of products sold | 2029.8 | 7258.4 | 75.3% | 74.3% |
| Gross profit | 664.8 | 2504.8 | 24.7% | 25.7% |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating expense: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Selling, general and administrative | 628.1 | 1637.6 | 23.3% | 16.8% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation | 41.6 | 109.9 | 1.5% | 1.1% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization | 30.1 | 91.9 | 1.1% | 0.9% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expense | 699.8 | 1839.4 | 26.0% | 18.8% |
| (Loss) income from operations | (35.0) | 665.4 | (1.3)% | 6.8% |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense, net | (58.6) | (182.7) | (2.2)% | (1.9)% |
| &nbsp;&nbsp;&nbsp;&nbsp;Loss on debt extinguishment |  | (2.4) | —% | —% |
| &nbsp;&nbsp;&nbsp;&nbsp;Other income, net | 2.7 | 5.4 | 0.1% | 0.1% |
| (Loss) income before (benefit from) provision for income taxes | (90.9) | 485.7 | (3.4)% | 5.0% |
| &nbsp;&nbsp;&nbsp;&nbsp;(Benefit from) provision for income taxes | (19.0) | 124.0 | (0.7)% | 1.3% |
| Net (loss) income | $(71.9) | $361.7 | (2.7)% | 3.7% |
| <sup>(1)</sup> Percent of net sales may not foot due to rounding. | <sup>(1)</sup> Percent of net sales may not foot due to rounding. | <sup>(1)</sup> Percent of net sales may not foot due to rounding. | <sup>(1)</sup> Percent of net sales may not foot due to rounding. | <sup>(1)</sup> Percent of net sales may not foot due to rounding. |

---

**The Period of January 1, 2025 through April 28, 2025 Compared with the Year Ended December 31, 2024**

***Net Sales***

The following tables summarize net sales by line of business for the periods presented:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Period from <br>January 1, 2025 <br>through <br>April 28, 2025** | **Year Ended <br>December 31, 2024** | **% of net sales** | **% of net sales** |
| *(in millions, except percentages)* | **Period from <br>January 1, 2025 <br>through <br>April 28, 2025** | **Year Ended <br>December 31, 2024** | **2025** | **2024** |
| Residential roofing products | $1316.7 | $4833.5 | 48.9% | 49.5% |
| Non-residential roofing products | 711.4 | 2674.1 | 26.4% | 27.4% |
| Complementary building products | 666.5 | 2255.6 | 24.7% | 23.1% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total net sales | $2694.6 | $9763.2 | 100.0% | 100.0% |

---

Net sales for the period from January 1, 2025 through April 28, 2025 decreased to $2.69 billion compared to $9.76 billion for the year ended December 31, 2024. The decrease in net sales primarily reflects the impact of 171 fewer selling days in the period from January 1, 2025 through April 28, 2025 relative to the year ended December 31, 2024. The decrease in net sales was further driven by seasonal demand fluctuations, as construction and re-roofing activity generally slows during the winter months due to cold weather patterns and severe weather events.

***Cost of Products Sold***

Cost of products sold for the period from January 1, 2025 through April 28, 2025 decreased to $2.03 billion, down from $7.26 billion for the year ended December 31, 2024. The comparative decrease primarily reflects the impact of 171 fewer selling days in the period from January 1, 2025 through April 28, 2025 relative to the year ended December 31, 2024.

***Selling, General and Administrative ("SG&A") Expense***

SG&A expense for the period from January 1, 2025 through April 28, 2025, decreased to $628.1 million, down from $1.64 billion for the year ended December 31, 2024. The decrease in SG&A expense primarily reflects the impact of 248 fewer days in the period from January 1, 2025 through April 28, 2025 relative to the year ended December 31, 2024, which was partially offset by transaction costs of $81.0 million incurred in connection with the Beacon Acquisition.

------

***Depreciation Expense***

Depreciation expense was $41.6 million for the period from January 1, 2025 through April 28, 2025, compared to $109.9 million for the year ended December 31, 2024. The comparative decrease in depreciation expense primarily reflects the impact of 248 fewer days in the period from January 1, 2025 through April 28, 2025 relative to the year ended December 31, 2024, which was partially offset by an increase in property and equipment as a result of new and acquired branches subsequent to December 31, 2024.

***Amortization Expense***

Amortization expense was $30.1 million for the period from January 1, 2025 through April 28, 2025, compared to $91.9 million for the year ended December 31, 2024. The comparative decrease in amortization expense primarily reflects the impact of 248 fewer days in the period from January 1, 2025 through April 28, 2025 relative to the year ended December 31, 2024, which was partially offset by amortization expense associated with new intangible assets as a result of recent acquisitions.

***Interest Expense, Net***

Interest expense, net was $58.6 million for the period from January 1, 2025 through April 28, 2025, compared to $182.7 million for the year ended December 31, 2024. The comparative decrease in interest expense, net, primarily reflects the impact of 248 fewer days in the period from January 1, 2025 through April 28, 2025 relative to the year ended December 31, 2024.

***Income Taxes***

Income tax (benefit) provision was $(19.0) million for the period from January 1, 2025 through April 28, 2025, compared to $124.0 million for the year ended December 31, 2024. The comparative decrease in income tax (benefit) provision was primarily due to lower pre-tax income coupled with an increase in permanent items including the impact of excess tax benefits of stock-based compensation and non-deductible transaction costs due to the Beacon Acquisition. The effective tax rate was 20.9% for the period from January 1, 2025 through April 28, 2025, compared to the effective tax rate, excluding discrete items, of 25.5% for the year ended December 31, 2024.

**Seasonality**

The demand for exterior building materials is closely correlated to both seasonal changes and unpredictable weather patterns, therefore demand fluctuations are expected. In general, our net sales and net income are highest in quarters ending June 30, September 30, and December 31, which represent the peak months of construction and re-roofing. Conversely, we have historically experienced low net income levels or net losses in quarters ending March 31, when winter construction cycles and cold weather patterns have an adverse impact on our customers' ability to conduct their business.

**Liquidity and Capital Resources**

Liquidity is defined as the current amount of readily available cash and the ability to generate adequate amounts of cash to meet the current needs for cash. We assess our liquidity in terms of our cash and cash equivalents on hand and the ability to generate cash to fund our operating activities, taking into consideration available borrowings and the seasonal nature of our business.

Our principal sources of liquidity as of April 28, 2025 were our cash and cash equivalents of $143.9 million and our available borrowings of $907.0 million under our asset-based revolving lines of credit.

Significant factors which could affect future liquidity include the following:

&nbsp;&nbsp;&nbsp;&nbsp;• the adequacy of available bank lines of credit;

&nbsp;&nbsp;&nbsp;&nbsp;• the ability to attract long-term capital with satisfactory terms;

&nbsp;&nbsp;&nbsp;&nbsp;• cash flows generated from operating activities;

&nbsp;&nbsp;&nbsp;&nbsp;• working capital management;

&nbsp;&nbsp;&nbsp;&nbsp;• acquisitions; and

&nbsp;&nbsp;&nbsp;&nbsp;• capital expenditures.

Our primary capital needs are for working capital obligations and other general corporate purposes, including acquisitions and capital expenditures. Our primary sources of working capital are cash from operations and bank borrowings. We have financed larger acquisitions through increased bank borrowings and the issuance of long-term debt and common or preferred stock. We then repay any such borrowings with cash flows from operations or subsequent financings. We have funded most of our capital expenditures with cash on hand, increased bank borrowings, or equipment financing, and then reduced those obligations with cash flows from operations. We may explore additional or replacement financing sources in order to bolster liquidity and strengthen our capital structure.

------

We believe we currently have adequate liquidity and availability of capital to fund our present operations, meet our commitments on our existing debt and fund anticipated growth, including expansion in existing and targeted market areas. We may seek additional acquisition opportunities from time to time. If suitable acquisition opportunities or working capital needs arise that require additional financing, we believe that our financial position, credit profile, and earnings history provide a sufficient base for obtaining additional financing resources at reasonable rates and terms.

The following table summarizes our cash flows for the periods indicated:

---

| | | |
|:---|:---|:---|
| | **Period from <br>January 1, 2025 <br>through <br>April 28, 2025** | **Year Ended <br>December 31, 2024** |
| *(in millions)* | **Period from <br>January 1, 2025 <br>through <br>April 28, 2025** | **Year Ended <br>December 31, 2024** |
| Net cash (used in) provided by operating activities | $(111.2) | $419.4 |
| Net cash used in investing activities | (31.0) | (540.5) |
| Net cash provided by financing activities | 211.5 | 112.8 |
| Effect of exchange rate changes on cash and cash equivalents | 0.3 | (1.4) |
| Net increase (decrease) in cash and cash equivalents | $69.6 | $(9.7) |

---

***Operating Activities***

Net cash used in operating activities was $111.2 million during the period from January 1, 2025 through April 28, 2025, compared to net cash provided by operating activities of $419.4 million during the year ended December 31, 2024. Cash used in operations increased $530.6 million primarily due to the timing of net working capital requirements for inventory purchases and cash collections.

***Investing Activities***

Net cash used in investing activities was $31.0 million during the period from January 1, 2025 through April 28, 2025, compared to $540.5 million during the year ended December 31, 2024. Cash used in investing activities decreased $509.5 million primarily due to a decrease in acquisitions and capital expenditures.

***Financing Activities***

Net cash provided by financing activities was $211.5 million during the period from January 1, 2025 through April 28, 2025, compared to $112.8 million during the year ended December 31, 2024. Cash provided by financing activities increased $98.7 million primarily due to an increase in net borrowings under our revolving lines of credit compared to the prior year and share repurchases made during the year ended December 31, 2024, partially offset by the refinancing of our 2028 Term Loan in March 2024 resulting in an increase in the principal balance of $300.0 million.

<br>