APC Arko Petroleum Corp. - 10-K

ITEM 1A. RISK FACTORS.

You should carefully consider the risks described below, as well as other information contained in this Annual Report on Form 10-K, including the audited combined financial statements contained in Part II, Item 8 of this Annual Report on Form 10-K (the “combined financial statements”) and the notes thereto and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The occurrence of any of the events discussed below could significantly and adversely affect our business, prospects, results of operations, financial condition, and cash flows.

Risks Related to Our Business and Industry

The wholesale motor fuel distribution industry and the fleet fueling business are characterized by intense competition and fragmentation, and our failure to effectively compete could adversely affect our business, financial condition and results of operations.

The market for distribution of wholesale motor fuel and the fleet fueling business is highly competitive and fragmented, which results in narrow margins. We have numerous competitors, and some may have significantly greater resources and name recognition than we do. We rely on our ability to provide value added reliable services to maintain our margins and competitive position. If we were to fail to maintain the quality of our services, any or all of our wholesale customers could choose alternative distribution sources, decreasing our margins. Furthermore, major integrated oil companies may decide to distribute their own products in direct competition with us, or large wholesale customers may attempt to buy directly from the major integrated oil companies. The occurrence of any of these events could have a material adverse effect on our business and results of operations.

Our business could be adversely affected by sustained inflationary pressures which may decrease our operating margins and increase working capital investments required to operate our business.

The U.S. inflation rate steadily rose in 2021 and into 2022 before eventually declining materially during 2023 and stabilizing at lower levels in 2024. Inflation remained elevated in 2025, with consumer prices increasing approximately 2.7% in the 12-month period ended December 2025. A continued period of elevated inflation may further increase our costs for labor, services and materials, which, in turn, could cause our operating costs and capital expenditures to increase. Further, our customers also face ongoing inflationary pressures and resulting impacts, such as the tight labor market and supply chain disruptions. The Federal Reserve and other central banks have implemented policies in an effort to curb inflationary pressure on the costs of goods and services across the U.S., including raising interest rates 11 times during 2022 and 2023. The Federal Reserve Board then paused rate increases in the fourth quarter of 2023 following the deceleration of inflationary growth. More recently, the Federal Reserve began an easing cycle in September 2024 and has continued its policy rate, including additional cuts in December 2024 and September, October and December 2025, but held rates steady at its January 2026 meeting. The Federal Reserve Board may seek to further reduce interest rates, increase interest rates or maintain current interest rates. Despite recent reductions, interest rates remain elevated compared to recent historical periods, and the future path of inflation and interest rates remain uncertain. Additionally, ongoing uncertainty related to tariff policies and their potential inflationary effects may further complicate the Federal Reserve’s ability to reduce rates. Elevated interest rates may increase our cost of capital, constrain our access to financing, and slow economic growth. These factors, individually or collectively, may not be recoverable through price adjustments and could have an adverse effect on our operating margins, liquidity, results of operations, and financial condition.

The motor fuel business is subject to seasonal trends, which may affect our earnings and ability to make distributions.

We and our customers experience more demand for motor fuel during the late spring and summer months than during the fall and winter. Travel, recreation and construction activities typically increase in these months in the geographic areas in which we operate, increasing the demand for motor fuel.

Therefore, the volume of motor fuel that we distribute is typically somewhat higher in the second and third quarters of our fiscal year. As a result, our results from operations may vary from period to period, which would affect our earnings and may affect our ability to make cash distributions. Unfavorable weather conditions during the spring and summer months and a resulting lack of the expected seasonal upswings in traffic and sales could also adversely affect our customers’ business, financial condition and results of operations, which may adversely affect our business, financial conditions and results of operations.

Our financial condition and results of operations are influenced by changes in the wholesale prices of motor fuel, which may materially adversely impact our sales, operations, customers’ financial condition and the availability of trade credit.

Our operating results are influenced by prices for motor fuel, variable consignment and cardlock margins and the market for such products. Crude oil and domestic wholesale motor fuel markets are volatile. The margins we earn on our wholesale and fleet fueling segments’ sales, and the gallons of fuel we sell, are dependent on a number of factors outside our control, including the overall supply of refined products, overall market conditions, the demand for these products, competition from third parties, and the price of crude oil and domestic wholesale motor fuel. General political conditions, tariffs, trade wars, acts of war or terrorism and instability in oil producing regions, particularly in the Middle East, Russia, Africa and South America, could significantly affect crude oil supplies and wholesale fuel prices. Significant increases and volatility in wholesale fuel prices could result in substantial increases in the retail price of motor fuel products, lower fuel gross margin per gallon, lower demand for such products and lower sales to customers and dealers. As motor fuel prices decrease, so do our prompt payment incentives, which are generally calculated as a percentage of the total purchase price of the motor fuel we distribute.

Conversely, as motor fuel prices increase, the margins we realize at our consignment and certain of our cardlock locations generally decrease as a result of the delay with which retail prices respond to wholesale price changes. This volatility makes it extremely difficult to predict the impact future wholesale cost fluctuations will have on our financial condition and results of operations. We occasionally lock in fuel prices by committing to purchase fuel in the future at a certain price. If the spot price for fuel

at the time we actually take delivery of such product is less than what we paid for it, our margins could be negatively impacted. Fuel futures contracts to hedge price volatility may not perform as intended, which may negatively impact our margins. Extended periods of market conditions that result in us earning margins lower than anticipated or in us selling fewer gallons of product to wholesale and fleet fueling customers, for any of the reasons set forth above or otherwise, could adversely affect our financial condition, results of operations and cash flows.

Additionally, when diesel fuel prices rise, this results in higher truck shipping costs which causes shippers to consider alternative means for transporting freight, which may reduce trucking business and, in turn, may reduce our fuel sales volume. High diesel fuel prices may also cause our trucking customers to seek cost savings throughout their businesses, including measures which reduce total fuel consumption and may in turn reduce our fuel sales volume.

Finally, higher prices for motor fuel may reduce our access to trade credit or worsen the terms under which such credit is available to us or may affect independent dealers, who may have insufficient credit to purchase motor fuel from us at their historical volumes, which could have a material adverse effect on our financial condition and results of operations.

Significant changes in demand for fuel-based modes of transportation and for trucking services could materially adversely affect our business.

Our business is generally driven by growth of road traffic, demand for trucking services, and trends in travel and tourism. Automotive, industrial and power generation manufacturers are developing more fuel-efficient engines, hybrid engines, electric vehicles and alternative clean power systems. Developments aimed at reducing greenhouse gas (“GHG”) emissions’ contribution to climate change may decrease the demand or increase the cost for our major product, petroleum-based motor fuel. Attitudes toward motor fuel and its relationship to the environment may significantly affect our effectiveness in marketing our product and sales. Efforts to steer the public toward non-petroleum-based fuel dependent modes of transportation such as electric, hybrid, battery powered, hydrogen or other alternative fuel-powered motor vehicles may foster a negative perception toward motor fuel or increase costs for our product, thus affecting the public’s attitude toward our primary product. In 2025, electric vehicles accounted for approximately 7.8% of all light vehicle sales in the United States. In addition, truck and other vehicle manufacturers and our customers continue to focus on ways to improve motor vehicle fuel efficiency and conserve fuel, including use of truck platooning, or the electronic linking of trucks with a lead vehicle, heat and kinetic energy recovery technologies, substantially lighter “super trucks” and higher efficiency motor fuels. In addition, there are government regulations at both the state and federal level aimed at reducing emissions and increasing fuel efficiency (e.g., EV mandates, fuel efficiency standards and low emission zones) and other factors to accelerate the transition to electric vehicles, which could reduce demand for our products and services. Demand for trucking services in the U.S. generally reflects the amount of commercial activity in the U.S. economy. When the U.S. economy declines, demand for goods moved by trucks usually declines, and in turn demand for diesel fuel supplied by our fleet fueling segment typically declines, which could significantly harm our results of operations and financial condition.

Significant developments in any of the above-listed factors could lead to reductions in the demand for petroleum-based fuel and have a material adverse effect on our business, financial condition and results of operations.

Negative events or developments associated with branded motor fuel suppliers could have a material adverse impact on our revenues.

The success of our operations is dependent, in part, on the continuing favorable reputation, market value and name recognition associated with the motor fuel brands sold at ARKO Parent’s gas stations and to dealers. An event which adversely affects the value of those brands could have a negative impact on the volumes of motor fuel we distribute, which in turn could have a material adverse effect on our business, financial condition and results of operations.

We depend on several principal suppliers for our fuel purchases and third-party transportation providers for the transportation of most of our motor fuel. A failure by a principal supplier to renew its supply agreement, a disruption in supply, a significant change in supplier relationships or a significant incident related to a supplier could have a material adverse effect on our business and results of operations.

We depend on several principal suppliers for our fuel purchases. A significant disruption or operational failure affecting the operations of any of our suppliers, including its ability to have adequate supply at its fuel terminals, could materially impact the availability, quality and price of fuel we sell, cause us to incur substantial unanticipated costs and expenses, and adversely affect our business, financial condition and results of operations.

Our fuel supply agreements expire on various dates through June 2032. If any of our principal suppliers elects not to renew their contracts with us, we may be unable to replace the volume of motor fuel we currently purchase from such supplier on similar terms or at all. We rely upon our suppliers to timely provide the volumes and types of motor fuels for which they contract. In times of extreme market demand, supply disruption or as a result of futures market and geopolitical conditions, we may be unable to acquire enough fuel, including diesel fuel in particular, to satisfy the demand of our customers. Most of the motor fuel we distribute is transported from terminals to gas stations and cardlock locations by third-party transportation providers. Such providers may suspend,

reduce or terminate their obligations to us if certain events (such as force majeure) occur, or may be subject to a shortage of drivers that results in a disruption in service. A change of key transportation providers, a disruption or cessation in services or supply provided by our providers, a significant change in our relationship with our suppliers or a significant accident or other incident involving a transportation provider could have a material adverse effect on our business, financial condition and results of operations.

A significant portion of our revenue is generated under fuel supply agreements with dealers that must be renegotiated or replaced periodically. If we are unable to successfully renegotiate or replace these agreements, then our results of operations and financial condition could be adversely affected.

A significant portion of our revenue is generated under fuel supply agreements with dealers. As these supply agreements expire, they must be renegotiated or replaced. Our fuel supply agreements generally have an initial term of 10 years. As of December 31, 2025, the volume-weighted average remaining term for our dealers was approximately 5.4 years. Our dealers have no obligation to renew their fuel supply agreements with us on similar terms or at all. We may be unable to renegotiate or replace our fuel supply agreements when they expire, and the terms of any renegotiated fuel supply agreements may not be as favorable as the terms of the agreements they replace. Whether these fuel supply agreements are successfully renegotiated or replaced is frequently subject to factors beyond our control. Such factors include fluctuations in motor fuel prices, a dealer’s ability to pay for or accept the contracted volumes and a competitive marketplace for the services offered by us. If we cannot successfully renegotiate or replace our fuel supply agreements, or must renegotiate or replace them on less favorable terms, revenues from these agreements could decline and our results of operations and financial condition could be adversely affected.

Because a substantial portion of our revenue is currently derived from ARKO Parent, any development that materially and adversely affects ARKO Parent’s operations, financial condition or market reputation could have a material and adverse impact on us.

ARKO Parent is our most significant customer and accounted for approximately 41% of our revenue in the year ended December 31, 2025, and we expect to derive a significant portion of our revenues from ARKO Parent in the near term. As a result, any event that adversely affects ARKO Parent’s operations, financial condition, market reputation, liquidity, results of operations or cash flows may adversely affect our business and results of operations. Accordingly, we are indirectly subject to the business risks of ARKO Parent. Further, we are subject to the risk of non-payment or non-performance by ARKO Parent pursuant to contractual arrangements with ARKO Parent. We cannot predict the extent to which ARKO Parent’s business would be impacted if conditions in our industry deteriorate, nor can we estimate the impact such conditions would have on ARKO Parent’s ability to perform under its agreements with us. Any material non-payment or non-performance by any significant customer of ours, including ARKO Parent, would adversely affect our business and operating results.

Changes in economic conditions, tax or trade policy, and consumer confidence in the U.S. could materially adversely affect our business.

Our operations and the scope of services we provide are affected by changes in the macroeconomic situation in the U.S., which has a direct impact on consumer confidence and spending patterns. A number of key macroeconomic factors, such as interest rates and unemployment, could have a negative effect on consumer habits and spending, and lead to lower demand for fuel.

Significant negative developments in the macroeconomic environment in the United States could have a material adverse effect on our business, financial condition and results of operations.

If our acquisitions are not on economically acceptable terms, or if our acquisitions do not perform as we expect, our future growth may be negatively impacted.

Our growth strategy includes the acquisition of other companies, contracts and assets that either complement or expand our existing businesses. Any such acquisitions will be subject to the negotiation of definitive agreements, applicable governmental approvals and consents, including under applicable antitrust laws, and, in certain instances, satisfactory financing arrangements. We cannot assure you that we will be able to identify suitable transactions and, even if we are able to identify such transactions, that we will be able to consummate any such transactions on economically acceptable terms. Any acquisitions that we pursue may involve a number of risks, including some or all of the following:

the diversion of management’s attention from our core business;

the disruption of our ongoing business;

inaccurate assessment of liabilities or assets and lack of adequate protections or potential related indemnities;

the inability to successfully integrate our acquisitions;

the inability to achieve the anticipated synergies and financial improvements;

the loss of key customers or employees;

increasing demands on our operational systems;

the integration of information systems and internal control over financial reporting; and

possible adverse effects on our reported results of operations or financial position.

We may be dependent on ARKO Parent to identify and pursue acquisition opportunities and to offer such opportunities to us pursuant to the terms of the Omnibus Agreement. We may not be able to grow through acquisitions if we or ARKO Parent are unable to identify attractive acquisition opportunities. There could be the potential for conflicts of interest when we and ARKO Parent jointly pursue acquisitions or other corporate opportunities that may be suitable for both companies. For example, conflicts may arise if there are issues or disputes under the commercial arrangements that will exist between ARKO Parent and us, including the Omnibus Agreement, in relation to such acquisitions or other matters. Furthermore, ARKO Parent is under no obligation to adopt a business strategy that favors us. Subject to the terms of the Omnibus Agreement, ARKO Parent may favor its own interests in negotiating the terms of any acquisitions jointly pursued by us and ARKO Parent. The directors and officers of ARKO Parent have fiduciary duties that require them to make decisions in the best interests of the stockholders of ARKO Parent, which may be contrary to our interests. Such conflicts of interests and competing fiduciary obligations may inhibit our ability to grow or make additional acquisitions.

Our ability to grow and make acquisitions with cash on hand may be limited by our leverage, the terms of our and ARKO Parent’s indebtedness, and our cash dividend policy.

There is intense competition for acquisition opportunities in our industry, and we may not be able to identify attractive acquisition opportunities. Competition for acquisitions may also increase the cost of, or cause us to refrain from, completing acquisitions. We may complete acquisitions, which, contrary to our expectations, ultimately do not prove to be accretive. If any of these events were to occur, our future growth may be negatively impacted.

We may be unable to successfully integrate acquired operations or otherwise realize the expected benefits from our acquisitions, which could adversely affect the expected benefits from our acquisitions and our results of operations and financial condition.

Any acquisition involves the integration of the business of two companies that have previously operated independently. The difficulties of combining the operations of the two businesses include: integrating personnel with diverse business backgrounds; familiarizing employees with new systems; and combining different corporate cultures.

The process of integrating operations could cause an interruption of, or loss of momentum in, the activities of the business, and the loss of key personnel or customers. The diversion of management’s attention and any delay or difficulty encountered in connection with the integration of the two companies’ operations could have an adverse effect on our business and results of operations.

The success of our acquisitions depends, in part, on our ability to realize the anticipated benefits from combining the acquired business with ours. If we are unable to successfully integrate an acquired business, the anticipated benefits of such acquisition may not be realized fully or may take longer to realize than expected, which could have a material adverse effect on our business, financial condition and results of operations. For example, we may fail to realize the anticipated increase in earnings anticipated to be derived from an acquisition or the synergies expected, or there could be higher expenses related to the acquired business than expected. In addition, as with any acquisition, a significant decline in asset valuations or cash flows may also cause us not to realize expected benefits.

The Russia-Ukraine War, Israel-Hamas War, U.S./Israel-Iran War, events occurring in response thereto and any expansion of hostilities, as well as the political, economic and social instability in Venezuela, may have an adverse impact on our business, our future results of operations, and our overall financial performance.

The effects on our business, financial condition, and results of operations of the conflicts between Russia and Ukraine beginning in February 2022 between Israel and Hamas beginning in October 2023, and between the U.S. and Israel against Iran beginning in February 2026, as well as the political, economic and social instability in Venezuela, are impossible to predict. Any increase in sanctions, escalation of the conflicts, including the regional or global expansion of hostilities, and other future developments could significantly affect the global economy, lead to market volatility and supply chain disruptions, have an adverse impact on energy prices, including prices for crude oil, other feedstocks, and refined petroleum products, have an adverse impact on the margins from our wholesale distribution and fleet fueling operations, and have a material adverse effect on our business, financial condition, and results of operations.

The distribution, transportation and storage of motor fuels is subject to environmental protection and operational safety laws and regulations, business interruptions and inherent hazards and risks that may expose us, our customers or suppliers, to significant costs and liabilities, which could have a material adverse effect on our business.

Our operations—including the sale, distribution, transportation, and storage of fuel products—and those of our suppliers and customers are subject to various environmental, health, safety, and operational risks that could materially and adversely affect our business, financial condition, and results of operations.

We and our facilities, particularly the storage, transportation and sale of fuel products, as well as the operations of our suppliers and customers, are subject to extensive federal, state and local environmental, health and safety laws and regulations, in particular, those related to the quality of fuel products, the handling and disposal of hazardous wastes and the prevention and remediation of environmental contaminations. These continue to evolve and have generally become more stringent over time. We invest financial and managerial resources to comply with environmental laws and regulations and believe such investment will be necessary for the foreseeable future. Failure to comply with these laws and regulations may result in the assessment of administrative, civil, and criminal penalties, the imposition of remedial obligations, the issuance of orders enjoining our operations, or other claims and complaints.

Additionally, our insurance and compliance costs may increase as a result of changes in environmental laws and regulations or changes in enforcement. These laws and regulations, as well as any new laws and regulations affecting fuel quality standards or the sale, distribution transportation and storage of motor fuels, have tended to become increasingly restrictive over time and could adversely affect our business and operating results by increasing our costs, limiting the demand for our products and services, or restricting our operations in the future. Most compliance costs are embedded in normal business operations. However, it is uncertain how much additional investment in technology, equipment, facilities or increased operating costs will be necessary to address hazardous materials, environmental restoration or new regulatory requirements.

Accidental leaks, spills, or other releases have occurred at our facilities and may continue to occur during our and dealer operations, potentially resulting in corrective actions, which can be costly, or environmental investigations at our facilities, leased locations, or third-party sites we manage. We may also face liability at non-company sites where our products have been handled or disposed of, particularly if prior practices—even if acceptable at the time—require remediation to meet current standards. Where releases of motor fuels, other pollutants, substances or wastes have occurred, federal and state laws and regulations, and our lease agreements, require that contamination caused by such releases be assessed and remediated to meet applicable clean-up standards. Certain environmental laws impose strict, joint and several liability without regard to negligence or fault on current and former site owners and operators for costs required to clean up and restore sites where motor fuels or other hazardous waste products have been disposed of or otherwise released. We may also be exposed to potential liability for personal injury or property damage caused by any release, spill, exposure or other accident involving such pollutants, substances or wastes. Private parties may also have the right to pursue legal actions to enforce compliance, as well as to seek damages for non-compliance, with environmental and safety laws and regulations or for personal injury or property damage. The costs associated with the investigation and remediation of contamination, as well as any associated third-party claims for damages or to impose corrective action obligations, could be substantial and could have a material adverse effect on us or our dealers.

Changes in product quality specifications, such as reduced sulfur content in refined petroleum products, or other more stringent requirements for fuels, including the production of fossil fuels, could reduce our ability to procure product, require us to incur additional handling costs or require the expenditure of capital. We may be unable to procure product or recover these costs through an increased selling price.

Most of our fuel is transported by third-party carriers. A portion of fuel is transported in our own trucks; therefore, our operations are also subject to hazards and risks inherent in transporting motor fuel. These hazards and risks include, but are not limited to, fires, explosions, traffic accidents, spills, discharges and other releases, and cross-drops, any of which could result in distribution difficulties and disruptions, environmental pollution, governmentally imposed fines or clean-up obligations, personal injury or wrongful death claims, and other damage to our properties and the properties of others. Our operations are also subject to business interruptions from unplanned maintenance, fires, explosions, severe weather, power outages, labor disputes, acts of terrorism or other natural or man-made disasters. These events can result in serious injury or loss of life, property damage, environmental harm and significant financial losses. While we maintain insurance coverage, not all events may be fully insured or insurable or, if covered, the financial amount of such liabilities may exceed our policy limits or fall within applicable deductible or retention limits. Furthermore, our storage tanks are generally long-lived assets, and some have been in service for many years. The age and condition of our assets could result in increased maintenance or repair expenditures in the future. If any of our facilities, or those of our customers or suppliers, suffer significant damage or are forced to shut down for a significant period of time, it may have a material adverse effect on our results of operations and our financial condition as a whole.

The transportation of motor fuels, as well as the associated storage of such fuels, is subject to various federal, state and local environmental laws and regulations covering storage tanks, material releases, hazardous waste management, and employee safety. These regulations require permits, compliance with pollution standards and impose liability for pollution or non-compliance. Federal and state authorities, including the DOT and EPA, monitor compliance and may impose fines, penalties, or orders to halt operations.

Our business, and the businesses of our suppliers and customers, may also be affected by the adoption of environmental laws and regulations intended to address global climate change by limiting carbon emissions and introducing more stringent requirements

for the exploration, drilling transportation, and use of crude oil and petroleum products. A number of state and regional efforts have emerged to address climate change and GHGs, including efforts that are aimed at tracking or reducing GHG emissions by means of cap-and-trade or carbon tax programs. Although it is not possible at this time to predict how new legislation or regulations that may be adopted to address GHG emissions would impact us, any future laws and regulations imposing reporting obligations on, or limiting emissions of GHGs from our or our suppliers’ or customers’ equipment and operations, could require us to incur costs to reduce or measure emissions of GHGs associated with operations. Restrictions on emissions of methane or carbon dioxide that may be imposed in various states or international jurisdictions, as well as international, state and local climate change initiatives, such as increased energy or fuel efficiency standards or mandates for renewable energy sources, could adversely affect our business or the business of our suppliers or customers. Widespread implementation of such laws and regulations may lead to a significant increase in the cost of petroleum-based fuels or otherwise lower demand for road transportation fuel, which may have a material adverse effect on our results of operations and our financial condition as a whole.

Upon entering office, the current federal U.S. administration issued a series of executive orders that signaled a significant shift in the United States energy, environmental and climate change policy from the prior U.S. presidential administration. Among other directives, such executive orders: (i) direct federal agencies to identify and exercise emergency authorities to facilitate conventional energy production, transportation and refining and call for the use of emergency regulations to expedite energy infrastructure projects; (ii) rescission of pre-existing executive actions meant to address climate change, including initiation of the withdrawal of the U.S. from the Paris Agreement and other climate change-focused international initiatives; (iii) promote energy exploration and production on federal lands and waters; (iv) mandate a review of existing regulations that may burden domestic energy development; and (v) pause disbursement of funds appropriated through the Inflation Reduction Act of 2022 and Infrastructure Investment and Jobs Act, including funds intended to support renewable energy and electric vehicle technologies. The administration has since proposed or promulgated a variety of regulatory initiatives, other executive actions and legislative proposals intended to further these and other policy priorities. These efforts include executive actions or legislative initiatives rescinding or limiting funding and tax provisions of the Inflation Reduction Act of 2022 in support of renewable energy technologies and electric vehicle adoption discussed above, including the One Big Beautiful Bill Act enacted on July 4, 2025, and the retraction of the 2009 “endangerment finding” that GHGs are dangerous to human health. The outcome or effects of such policy changes cannot be predicted at this time. The long-term impact of such actions, and any future actions taken during the current administration, on our and our suppliers’ and customers’ operations or the demand for our products and services, if any, is difficult to predict at this time; however, they may result in increased activity from other policymakers, including at the state and local level, or from the private sector, which may adversely impact our operations or those of our value chain.

For more information on potential risks arising from environmental and occupational safety and health laws and regulations, please see “ Business—Environmental and Other Government Regulations .”

We are subject to risks regarding sustainability matters.

There is ongoing scrutiny from investors, customers, policymakers and other stakeholders regarding companies’ management of climate change, human capital, and various other sustainability matters. We or ARKO Parent engage in various initiatives (including disclosures) to help manage such matters and address stakeholder expectations; however, such initiatives can be costly and may not have the desired effect. For example, many sustainability initiatives leverage methodologies, standards, and data that are complex and continue to evolve. As with other companies, we expect our approach and that of ARKO Parent to evolve as well, and we cannot guarantee that the approach will align with the expectations or preferences of any particular stakeholder. Stakeholders have different, and at times conflicting, expectations. Both advocates and opponents of such matters are increasingly resorting to activism, including litigation, to advance their perspectives. Similarly, policymakers (including certain states) have taken various actions to advance or constrain consideration of certain sustainability matters, and this divergence may increase the cost and complexity of compliance and any associated risks. Addressing stakeholder expectations and regulatory requirements may be costly and any failure to successfully navigate such expectations or requirements may result in reputational harm, loss of customers or contracts, changes in the availability or cost of capital, regulatory or investor engagement, or other adverse impacts to our business.

We and our customers and suppliers are required to obtain, maintain and comply with government permits, licenses and approvals, and failure to obtain, maintain, and comply with such permits, licenses and approvals could adversely affect us or our customers.

We and our customers and suppliers are required to obtain, maintain and comply with numerous federal, state and local government permits, licenses and approvals. Any of these permits, licenses or approvals may be subject to denial, revocation or modification under various circumstances. Failure to obtain or maintain such approvals or comply with the conditions of permits, licenses or approvals may adversely affect our operations by, for instance, temporarily suspending our activities or curtailing our work and may subject us to fines, penalties, injunctive relief and other sanctions. Although existing permits and licenses are routinely renewed by various regulators, renewal could be denied or jeopardized by various factors, including:

failure to provide adequate financial assurance;

failure to comply with environmental, health and safety laws and regulations or permit conditions;

local community, political or other opposition;

executive action; and

legislative action.

In addition, if new environmental legislation or regulations are enacted or implemented, or existing laws or regulations are amended or are interpreted or enforced differently, we may be required to obtain additional operating permits, licenses or approvals. Our inability to obtain, or to comply with, the permits, licenses and approvals required for our businesses could have a material adverse effect on us.

Furthermore, the permitting process for various projects requires significant investments of time and money by our customers and sometimes by us. There are no assurances that we or our customers will obtain the necessary permits for these projects. Applications for permits to operate newly constructed facilities, including air emissions permits, may be opposed by government entities, individuals or environmental groups, resulting in delays and possible non-issuance of the permits.

Failure to comply with applicable laws and regulations could result in liabilities, penalties, costs, or license suspension or revocation that could have a material adverse effect on our business. In addition, future regulations, or more stringent enforcement of existing regulations, could increase those costs and liabilities, which could adversely affect our financial position and results of operations.

Our operations are subject to numerous federal, state and local laws and regulations, environmental laws and regulations, and various employment laws, including requirements for various licenses and registrations. To the extent we are not able to provide information that is required under such regulations because owners of our stock or our officers and directors do not provide the necessary documentation to comply or fail to comply with such regulations, we may have those licenses suspended or revoked, or new licenses may not be issued.

Our violation of, or inability to comply with, such regulations could expose us to regulatory sanctions ranging from criminal liability or monetary fines to the revocation or suspension of our permits and licenses for the sale of such products. We may also be subject to litigation including class action litigation which may result in substantial costs, expenses and damages related to legal proceedings. Such regulatory action or litigation could adversely affect our business, financial condition and results of operations.

Our failure to comply with applicable labor and employment laws pertaining to, among others, minimum wage, overtime, rest breaks, mandated healthcare benefits or paid time-off benefits could result in increased regulatory scrutiny, monetary fines and substantial costs and expenses related to legal proceedings.

Additionally, we may not be able to comply with new or amended laws and regulations that are adopted, and any new or amended laws and regulations could require us to modify our operations or equipment, shut down our facilities or obtain additional permits or approvals. Additionally, our customers and suppliers may not be able to comply with any new or amended laws and regulations, which could cause our customers or suppliers to curtail or cease operations.

We may not have sufficient cash from operations after payment of our expenses, including payments to ARKO Parent and its affiliates, and establishment of cash reserves to enable us to pay the intended quarterly distribution to our stockholders.

The amount of cash we can distribute to our Class A common stockholders principally depends on the amount of cash we generate from our operations, which fluctuates from quarter to quarter based on, among other things:

the volume of fuel we sell;

the prices of, level of production of and demand for crude oil and refined fuel products;

the level of our operating costs, including payments to ARKO Parent;

prevailing economic conditions;

our debt service requirements and other liabilities;

fluctuations in our working capital needs;

our ability to borrow funds and access capital markets;

restrictions in our agreements governing our or ARKO Parent’s debt;

the level and timing of capital expenditures we make, including capital expenditures incurred in connection with our growth projects;

the cost of acquisitions, if any; and

the amount of cash reserves established by us, which may increase in the future and which may in turn further reduce the amount of Discretionary Cash Flow.

As a result of all these factors, we cannot guarantee that we will have sufficient cash generated from operations to pay the quarterly cash dividends to holders of our common stock.

Furthermore, holders of our common stock should be aware that the amount of Discretionary Cash Flow depends primarily on our cash flow, and is not solely a function of profitability, which is affected by non-cash items. As a result, we may make distributions during periods when we record net losses and may not make distributions during periods when we record net income. We may incur other expenses or liabilities during a period that could significantly reduce or eliminate our Discretionary Cash Flow and, in turn, impair our ability to pay dividends to holders of our common stock during the period. Because we are a holding company, our ability to pay dividends on our common stock is limited by restrictions on the ability of our subsidiaries to pay dividends or make other distributions to us, including restrictions under the terms of the agreements governing our and ARKO Parent’s indebtedness.

We are subject to extensive tax liabilities imposed by multiple jurisdictions that potentially have a material adverse effect on our financial condition and results of operations.

We are subject to extensive tax liabilities imposed by multiple jurisdictions, including income taxes, fuel excise taxes, sales and use taxes, payroll taxes, franchise taxes, and property taxes. Many of these tax liabilities are subject to periodic audits by the respective taxing authorities. Changes in the tax laws could arise as a result of the base erosion and profit shifting project undertaken by the Organization for Economic Co-operation and Development (“OECD”). In December 2022, the European Union (“EU”) member states reached an agreement to implement the minimum tax component (“Pillar Two”) of the OECD’s tax reform initiative. The directive was enacted into the national law of the EU member states in 2023. If similar directives under Pillar Two are adopted by other taxing authorities, such changes could increase the amount of taxes we pay and therefore decrease our results of operations and cash flow.

Additionally, substantial changes or reforms in the current tax regime could result in increased tax expenses and potentially have a material adverse effect on our financial condition and results of operations.

The loss of key senior management personnel or the failure to recruit or retain qualified senior management personnel could materially adversely affect our business.

We are dependent on the ability of both us and ARKO Parent to recruit, train and retain qualified individuals to manage our business. Economic factors, the state of the current labor market and availability of other employment options for our management personnel could impact our ability to recruit and retain qualified personnel that could have a material impact on our results of operations and impact our ability to execute upon our strategic goals. If we do not provide proper training and clear succession planning or are unable to entice the necessary talent to join our company and retain our employees over time, we may not have appropriate staff to be promoted to management roles as they become available. Additionally, we are dependent on certain key employees to operate our business and the loss of any of our executive officers or other key employees could harm our business.

Unfavorable seasonal, weather or other climatic conditions could adversely affect our business.

Severe weather phenomena, such as hurricanes, floods, and blizzards, may adversely affect our results of operations due to increased costs associated with such weather conditions, possible significant damage to our dealer and cardlock locations and possible interruption of distributions to our wholesale customers, including ARKO Retail Sites and our dealer and fleet fueling sites. Temporary or long-term disruptions to our supply chain in connection with unfavorable weather conditions could impact our network of suppliers, significantly impacting the quality and pricing of fuel we sell. Climate change is expected to increase the frequency and intensity of these and other weather phenomena, as well as contribute to various chronic changes (including in meteorological and hydrological patterns) which may result in similar risks or otherwise adversely impact our operations. While we may, from time to time, take actions to mitigate associated risks, we cannot guarantee that such efforts will be successful. For example, an increase in frequency and intensity of natural disasters may adversely impact the availability or cost of insurance.

We are subject to payment-related risks that may result in higher operating costs or the inability to process payments, either of which could harm our brand, reputation, business, financial condition and results of operations.

We and our dealers accept a variety of credit cards and debit cards and, accordingly, we and our dealers are, and will continue to be, subject to significant and evolving regulations and compliance requirements, including obligations to implement enhanced authentication processes that could result in increased costs and liability and reduce the ease of use of certain payment methods. Additionally, we pay, and in some cases pass-through, interchange and other fees, which may increase over time.

Europay, MasterCard and Visa, or EMV, is a global standard for credit cards that uses computer chips to authenticate and secure chip-card transactions. We may be liable for fraudulent credit card transactions at the fuel dispensers. As of December 31, 2025, a majority of the fuel dispensers owned by ARKO Parent were EMV-compliant.

We rely on fuel brands and independent service providers for payment processing, including credit and debit cards. If these fuel brands and independent service providers become unwilling or unable to provide these services to us, if the cost of using these providers increases, or if such providers have a data breach or mishandle our data, our business could be harmed. Additionally, there is a trend toward cardless payment methods, which may require additional investment to implement at our locations. As these trends develop, we will need to align our fleet card offering to the new technologies.

We are also subject to payment card association operating rules and agreements, including data security rules and agreements and certification requirements which could change or be reinterpreted to make it difficult or impossible for us to comply. In particular, we must comply with the Payment Card Industry Data Security Standard, or PCI DSS, a set of requirements designed to ensure that all companies that process, store or transmit payment card information maintain a secure environment to protect cardholder data. If we, or our third-party service providers, fail to comply with any of these rules or requirements, or if our, or our third-party service providers, data security systems are breached or compromised, we may be liable for losses incurred by card issuing banks or customers, subject to fines and higher transaction fees, lose our ability to accept credit or debit card payments from our customers, or process electronic fund transfers or facilitate other types of payments. Any failure to comply with such rules or requirements could significantly harm our brand, reputation, business, financial condition and results of operations.

Significant disruptions of information technology systems, breaches of data security or other cybersecurity incidents, or compromised data could materially adversely affect our business.

We rely on multiple information technology systems and a number of third-party vendor platforms (collectively, “IT Systems”) in order to run and manage our daily operations, including for fuel pricing, payroll, accounting, budgeting, reporting, and site operations. Such IT Systems allow us to manage various aspects of our business, communicate with customers, and to provide reliable analytical information to our management. The future operation, success and growth of our business depends on streamlined processes made available through our uninhibited access to information systems, global communications, internet activity and other network processes. Like most other companies, despite our current cybersecurity risk management framework and process controls, our IT Systems and those of our third-party service providers and our suppliers and customers, may be vulnerable to information security breaches, ransomware or extortion, mishandled data, acts of vandalism, computer viruses and interruption or loss of valuable business data. Stored data might be improperly accessed due to a variety of events beyond our control, including, but not limited to, damage and interruption from power loss or natural disasters, computer system and network failures, loss of telecommunications services, physical and electronic loss of access to data and information, terrorist attacks, hackers, security breaches or other security incidents, and computer viruses or attacks. We rely on third-parties to provide maintenance and support of our IT Systems, and to store our data (including customer data) and a failure of any of these third-parties to provide adequate and timely support, or compromise of these third-parties’ systems, could adversely affect the operation of our IT Systems. We have technology security initiatives and disaster recovery plans in place to mitigate our risk to these vulnerabilities, but these measures may not be adequately designed or implemented to ensure that our operations are not disrupted or the data security breaches do not occur.

Hackers and data thieves are increasingly sophisticated and operate large-scale and complex attacks which may remain undetected until after they occur. Such attacks also may be further enhanced in frequency or effectiveness through threat actors’ use of artificial intelligence. Any breach of our network or those of our vendors may result in damage to our reputation, the loss of valuable business data, the misappropriation of our valuable intellectual property or trade secret information, misappropriation of our customers’ or employees’ personal information, key personnel being unable to perform duties or communicate throughout the organization, loss of sales, significant costs for data restoration and other adverse impacts on our business. Despite our existing security procedures and controls, if our network or the network of one of our service providers was compromised, it could give rise to unwanted media attention, materially damage our customer relationships, harm our business, reputation, results of operations, cash flows and financial condition, result in fines or litigation, and may increase the costs we incur to protect against such information security breaches, such as increased investment in technology, the costs of compliance with consumer protection laws and costs resulting from consumer fraud. In addition, successful cyberattacks, data breaches, or data security incidents, at one of our vendors or other market participants, whether or not we are directly impacted, could lead to a general loss of customer confidence or affect our supply chain which could negatively affect us, including harming the market perception of the effectiveness of our security measures or harming the reputation of the industry in general, which could result in reduced use of our products and services.

The costs of mitigating cybersecurity risks are significant and are likely to increase in the future. These costs include, but are not limited to, retaining the services of cybersecurity providers; compliance costs arising out of existing and future cybersecurity, data protection and privacy laws and regulations; costs related to maintaining redundant networks, data backups and other damage-mitigation measures; and extra administrative costs to mitigate risk and deal with any system breaches. While we maintain cyber liability insurance coverage through ARKO Parent, our insurance may not be sufficient to protect against all losses we may incur due to policy exclusions or if we suffer significant or multiple attacks.

We are subject to evolving laws, regulations, standards, and contractual obligations related to data privacy and security regulations, and our actual or perceived failure to comply with such obligations could harm our reputation, subject us to significant fines and liability, or otherwise adversely affect our business.

We collect and store large amounts of data on our network, including sensitive information concerning our employees, customers and vendors. As such, we are subject to, or affected by, a number of federal, state, and local laws and regulations, as well as contractual obligations and industry standards, that impose certain obligations and restrictions with respect to data privacy and security, and govern our collection, storage, retention, protection, use, processing, transmission, sharing and disclosure of personal and other information including that of our employees, customers, and others. If we are found to have breached any such laws or regulations, we may be subject to enforcement actions that require us to change our business practices in a manner which may negatively impact our revenue, as well as expose us to litigation, fines, civil and/or criminal penalties and adverse publicity that could cause our customers to lose trust in us, negatively impacting our reputation and business in a manner that harms our financial position.

The U.S. Federal Trade Commission (the “FTC”) and state governments require companies to implement data security and privacy measures appropriate to the sensitivity of customer information, business size, and available tools. Failure to meet these expectations may result in claims of unfair or deceptive practices under the Federal Trade Commission Act or similar state laws, leading to potential legal actions for privacy and data security violations.

Further, we make public statements about our use and disclosure of personal information through our privacy policies that are posted on our websites. The publication of our privacy policies and other statements that provide promises and assurances about data privacy and security can subject us to potential government or legal action if they are found to be deceptive, unfair or misrepresentative of our actual practices.

In addition, numerous states already have, and are looking to expand, data protection and privacy legislation requiring companies like ours to consider solutions to meet differing needs and expectations of customers. Similar laws have been proposed at the federal level, reflecting a trend toward more stringent privacy legislation in the United States. The enactment of such laws could have potentially conflicting requirements that would make compliance challenging and we may not be able to monitor and react to all developments in a timely manner.

Our failure, and/or the failure by ARKO Parent, who provides us with substantially all of our operational and administrative services under the Management Services Agreement, or the various third-party service providers and partners with which we or ARKO Parent do business, to comply with applicable privacy policies or federal or state laws and regulations or any other obligations relating to privacy, data protection or information security, or any compromise of security that results in the unauthorized release of personal data or other user data, or the perception that any such failure or compromise has occurred, could negatively harm our brand and reputation, result in a loss sales and/or result in fines and/or proceedings by governmental agencies and/or customers, any of which could have a material adverse effect on our business, results of operations and financial condition.

We lease certain of our sites from third parties; are jointly and severally liable under certain master leases; and our dealers control other sites, all of which could result in increased costs and disruptions to our operations.

We lease a portion of our sites from third parties or sublease from ARKO Parent, under long-term arrangements with various expiration dates.

We are also a party to master leases as a cotenant with ARKO Parent. Under such master leases, generally we are jointly and severally liable for the obligations of ARKO Parent thereunder, and, in the event ARKO Parent is unable to satisfy such obligations, we would be liable for such obligations, which could result in significant costs to us and materially adversely affect our business. Further, in the event the landlord terminates a lease or there is an event of default by ARKO Parent, we could be evicted from such premises, which could significantly disrupt our business operations. Although we have indemnity from ARKO Parent under certain of such lease arrangements, there can be no guarantee that ARKO Parent will be able to satisfy its indemnity obligations. We also lease or sublease properties to certain of our dealers, and a default by the dealer under its lease or sublease could result in us losing a supply relationship. Such defaults by a significant number of our dealers could materially adversely affect our business. See “ Business—Our Relationship with ARKO Parent ” for more information on these agreements.

Additionally, we are subject to the possibility that we are unable to renew such leases or are only able to do so with increased costs or more onerous terms.

The occurrence of any of the foregoing could have a material adverse effect on our business, financial condition, results of operations and cash available for dividends to our stockholders.

We may not be able to lease sites we own or sublease sites we lease on favorable terms and any such failure could adversely affect our results of operations, financial condition and ability to make distributions to our stockholders.

We may lease or sublease certain sites to dealers. If we are unable to obtain tenants or subtenants on favorable terms for sites we own or lease, the resulting rental payments may be insufficient to cover our costs for the site. We cannot provide any assurance that the margins on our distribution of motor fuel to these sites will be sufficient to offset our operating costs or unfavorable lease terms. The occurrence of these events could adversely affect our results of operations, financial condition and ability to make distributions to our stockholders.

Our business could suffer if we fail to adequately secure, maintain, and enforce our intellectual property rights.

We rely on our trademarks and trade names to distinguish some of our services from those of our competitors, and have registered or applied to register a limited number of trademarks. We cannot assure that our trademark applications will be approved. Third-parties may also oppose our trademark applications, or otherwise challenge our use of the trademarks. In the event that our trademarks are successfully challenged, we could be forced to rebrand our products or services, which could result in loss of brand recognition, and could require us to devote resources to advertising and marketing new brands.

Further, we cannot assure that competitors will not infringe our trademarks, or that we will have adequate resources to enforce our trademarks. Any claims of intellectual property infringement, even those without merit, could be expensive and time-consuming to defend and divert management’s attention, cause us to cease making, licensing or using the products or services that incorporate the challenged intellectual property, require us to rebrand our products or services, if feasible, or require us to enter into royalty or licensing agreements in order to obtain the right to use a third-party’s intellectual property.

We also rely on trademarks that we license from third-parties to identify the branded fuels that we supply. If we violate the terms of these licenses, we could be liable for damages, and the licenses could be terminated. The termination or non-renewal of any of these licenses could require us to rebrand or to replace the licensed goods and services, and accordingly could have a material adverse effect on our business, reputation, financial condition and results of operations.

Our operations present risks which may not be fully covered by insurance.

We carry comprehensive insurance through ARKO Parent against the hazards and risks underlying our operations. We believe our insurance policies are customary in the industry; however, some losses and liabilities associated with our operations may not be covered by our insurance policies. In addition, there can be no assurance that we will be able to obtain similar insurance coverage on favorable terms (or at all) in the future. Significant uninsured losses and liabilities could have a material adverse effect on our financial condition and results of operations. Furthermore, our insurance is subject to high deductibles. As a result, certain large claims, even if covered by insurance, may require a substantial cash outlay by us, which could have a material adverse effect on our financial condition and results of operations.

Moreover, the deductibles and limits under our policies will be subject to certain sharing arrangements with ARKO Parent as set forth in the Employee and Intercompany Matters Agreement, which generally requires that we do not prejudice or limit ARKO Parent’s recovery when pursuing claims thereunder. To the extent ARKO Parent experiences losses under the insurance policies, the limits of our coverage may be decreased.

We are a restricted subsidiary and guarantor under the indenture governing the Senior Notes and are subject to various covenants under such indenture, which may adversely affect our operations.

We are a restricted subsidiary and guarantor under the indenture governing ARKO Parent’s 5.125% Senior Notes due 2029 (the “Senior Notes”), and are directly or indirectly affected by certain prohibitions and limitations contained therein, which may restrict our ability to undertake certain actions that might otherwise be considered beneficial. Our status as a restricted subsidiary means that our ability to take certain actions, including undertaking certain transactions, will be restricted by the terms of such indenture. We will remain a restricted subsidiary until we are no longer a subsidiary of ARKO Parent. These covenants restrict, among other things, our ability to:

incur or guarantee indebtedness;

make certain investments and acquisitions;

incur liens on assets or permit them to exist;

enter into certain types of transactions with affiliates;

merge or consolidate with another company;

transfer, sell, or otherwise dispose of assets; and

pay dividends, or make distributions or certain other restricted payments, unless dividends are also paid on a pro-rata basis to ARKO Parent.

Each of these restrictions is subject to various exceptions, the availability of which may be affected by the extent to which ARKO Parent utilizes those exceptions as well as the financial condition and results of operations of ARKO Parent. The existence of these restrictions could adversely affect our ability to finance our future operations or capital needs or engage in, expand, or pursue our business activities, and it could also prevent us from engaging in certain transactions that might otherwise be considered beneficial to us. Due to its ownership and control of us, ARKO Parent has the ability to prevent us from taking actions that would cause ARKO Parent to violate such restrictions, or otherwise cause ARKO Parent to be in default under any of its credit arrangements. Additionally, in the future, ARKO Parent may determine that it is in its best interest to agree to more restrictive covenants, which may indirectly impede our business operations or affect our ability to pay dividends.

Events beyond our control, including changes in general business and economic conditions, may impair ARKO Parent’s ability to comply with covenants in the indenture governing the Senior Notes, and a breach of any such covenants may result in an event of default. Upon the occurrence of an event of default, the noteholders may declare the notes immediately due and payable and/or exercise any and all remedial and other rights thereunder. ARKO Parent may be unable to repay any accelerated indebtedness, and we may not be able to repay any indebtedness pursuant to the guarantee or refinance any accelerated indebtedness on favorable terms, or at all, which could have an adverse effect on our financial condition or results of operations.

The agreements governing our indebtedness contain various restrictions and financial covenants that may restrict our business and financing activities.

We depend on the earnings and cash flow generated by our operations in order to meet our debt service obligations. The operating and financial restrictions and covenants in the credit agreements governing the Capital One Line of Credit and PNC Line of Credit (as defined below), and any future financing agreements, may restrict our ability to finance future operations or expand our business activities. For example, the Capital One Line of Credit and PNC Line of Credit each restrict, among other things, our ability to create liens, incur additional indebtedness or issue certain disqualified equity interests, make investments, loans or advances, engage in mergers or consolidations with or into other companies, sell assets and make other dispositions, pay dividends and distributions or repurchase capital stock, change the nature of its business, engage in sale-leaseback transactions, engage in transactions with affiliates, and repay certain indebtedness. In addition, the credit agreement governing the Capital One Line of Credit contains covenants requiring us to maintain certain financial ratios. See “ Management’s Discussion and Analysis of Financial Condition and Results of Operations—Indebtedness ” for additional information.

Our ability to comply with these restrictions and covenants is uncertain and will be affected by the levels of cash flow from operations and other events or circumstances beyond our control. If market or other economic conditions deteriorate, our ability to comply with these covenants may be impaired. If we violate any provisions of our existing or any future credit facilities we enter into that are not cured or waived within the appropriate time periods provided in the agreements governing such indebtedness, a significant portion of our indebtedness may become immediately due and payable, and our lenders’ commitment to make further loans to us under such credit facilities may terminate. We might not have, or be able to obtain, sufficient funds to make these accelerated payments.

If we were unable to repay the accelerated amounts, the lenders under our secured credit facilities could proceed against the collateral granted to them to secure such debt. If the payment of our debt is accelerated, our assets may be insufficient to repay such debt in full, which could result in our insolvency.

Our level of indebtedness, together with ARKO Parent’s indebtedness, the terms of our and its borrowings and any future ARKO Parent credit ratings could adversely affect our ability to grow our business, our ability to make cash distributions to our stockholders and our credit ratings and profile.

Together, we and ARKO Parent have a significant amount of debt. As of December 31, 2025, we had total debt, net of $392.0 million, including current maturities of $6.8 million, and ARKO Parent had an additional $520.1 million (exclusive of indebtedness included in our combined financial statements). Such significant level of debt could increase our vulnerability to general adverse economic and industry conditions and require us to dedicate a substantial portion of our cash flow from operations to service our or ARKO Parent’s debt obligations, thereby reducing the availability of our cash flow to fund our growth strategy.

Furthermore, a higher level of indebtedness increases the risk that we or ARKO Parent may default under our respective obligations, which may include ARKO Parent’s obligations under its commercial agreements with us. In the event ARKO Parent were to default under certain of its debt obligations, we could be materially adversely affected. We have no control over whether ARKO Parent remains in compliance with the provisions of its credit arrangements, except as such provisions may otherwise directly pertain to us. There is also the risk that if ARKO Parent were to default under certain of its debt obligations, ARKO Parent’s creditors would attempt to assert claims against our assets during the litigation of their claims against ARKO Parent, even if we or our subsidiaries have not provided a guarantee of such debt or are otherwise contractually bound. The defense of any such claims could be costly and could materially impact our financial condition, even absent any adverse determination. In the event these claims were successful, our ability to meet our obligations to our creditors, make distributions and finance our operations could be materially adversely affected.

If we were to seek a credit rating in the future, our credit rating may be adversely affected by the leverage or any future credit rating of ARKO Parent, as credit rating agencies such as Standard & Poor’s Ratings Services and Moody’s Investors Service, Inc. may consider the leverage and credit profile of ARKO Parent and its affiliates because of their ownership interest in and control of us, our guarantee of the Senior Notes and because ARKO Parent accounts for a material portion of our fuel revenue and fuel contribution. Any adverse effect on our credit rating would increase our cost of borrowing or hinder our ability to raise financing in the capital markets, which would impair our ability to grow our business and make cash distributions to our stockholders.

Our variable rate debt could adversely affect our financial condition and results of operations.

Certain of our outstanding term loans and revolving credit facilities bear interest at variable rates, subjecting us to fluctuations in the short-term interest rate. Beginning in early 2022, in response to significant and prolonged increases in inflation, the U.S. Federal Reserve Board raised interest rates eleven times during 2022 and 2023, which increased the borrowing costs on our variable rate debt. The Federal Reserve Board then paused rate increases in the fourth quarter of 2023 following the deceleration of inflationary growth. More recently, the Federal Reserve began an easing cycle in September 2024 and has continued reducing its policy rate, including additional cuts in December 2024 and September, October and December 2025, but held rates steady at its January 2026 meeting. The Federal Reserve Board may seek to further reduce interest rates, increase interest rates or maintain current interest rates. The timing, number and amount of any future interest rate changes are uncertain, and there can be no assurance that rates will continue to decrease at a rate currently predicted or at all, which would in turn negatively impact our borrowing costs. Any future federal fund rate increases could in turn make our financing activities, including those related to our acquisition activity, more costly and limit our ability to refinance existing debt when it matures or pay higher interest rates upon refinancing and increase interest expense on refinanced indebtedness. As of December 31, 2025, all of our debt bore interest at variable rates, which is based on CME Group’s forward-looking Secured Overnight Financing Rate (“SOFR”). Consequently, significant increases in market interest rates would create substantially higher debt service requirements, which could have a material adverse effect on our overall financial condition, including our ability to service our indebtedness.

Changes in U.S. trade policy, including the imposition of tariffs and the resulting consequences, may have a material adverse impact on our business, operating results and financial condition.

The U.S. government imposes tariffs on certain foreign goods from time to time. Beginning in early 2025, the U.S. government imposed sweeping new tariffs under multiple statutory authorities. In February 2025, the President invoked the International Emergency Economic Powers Act (“IEEPA”) to impose tariffs on imports from Canada, Mexico and China, and in April 2025, issued an executive order establishing reciprocal tariffs on imports from nearly all U.S. trading partners. Additional tariffs were imposed under Section 232 of the Trade Expansion Act of 1962 on steel, aluminum, copper, automobiles and automobile parts. On February 20, 2026, the U.S. Supreme Court ruled that IEEPA does not authorize the President to impose tariffs, invalidating all IEEPA-based tariffs that had been in effect since February 2025. Following that decision, on March 4, 2026, the U.S. Court of International Trade (the “CIT”) ordered refunds of IEEPA tariffs to all importers that paid them, including those that had not filed suit, significantly increasing uncertainty regarding the timing and mechanics of any repayments.

The Administration immediately replaced the invalidated IEEPA tariffs with a temporary global import surcharge under Section 122 of the Trade Act of 1974, which by its terms is limited to 150 days and capped at 15% absent congressional approval for an extension. On March 5, 2026, a coalition of 24 U.S. states filed suit challenging the legality of the Section 122 tariffs, adding to the litigation risk surrounding the current tariff regime. The Administration has also indicated its intent to increase its use of Section 232 and Section 301 tariffs. Tariffs imposed under Section 232 and Section 301 were not affected by the Supreme Court's ruling and remain in effect.

The legal and regulatory environment surrounding U.S. trade policy remains highly uncertain. Although the CIT has ordered refunds of IEEPA tariffs, the government’s response and any appeals could delay repayment, and the ultimate scope and timing of refunds remain uncertain. The Section 122 tariffs are temporary by statute and are now subject to active legal challenge, and it is unclear whether the Administration may extend or reimpose such tariffs beyond the statutory 150-day period. The Administration has negotiated bilateral trade agreements with approximately 20 trading partners establishing country-specific tariff rates, but the terms and durability of these agreements remain uncertain, particularly in light of the change in legal authority from IEEPA to Section 122 and the pending challenges to Section 122. These tariffs may require us to increase prices to our customers, which may reduce demand, or, if we are unable to increase prices, result in lowering our margin on products sold. We cannot predict whether, and to what extent, current tariffs will continue or trade policies will change in the future. We cannot predict the extent to which the U.S. or other countries will impose quotas, duties, tariffs, taxes or other similar restrictions upon the import or export of our products in the future, nor can we predict future trade policy or the terms of any renegotiated trade agreements and their impact on our business. The adoption and expansion of trade restrictions, the occurrence of a trade war, or other governmental action related to tariffs or trade agreements or policies has the potential to adversely impact demand for our products, our costs, our customers, our suppliers, and the U.S. economy, which in turn could have a material adverse effect on our business, operating results and financial condition.

Risks Related to our Governance Relationship with ARKO Parent

ARKO Parent controls our Company and has the ability to control the direction of our business.

ARKO Parent indirectly owns 35 million shares of our Class B common stock, representing 73.6% of the economic interests in us, and 93.3% of the combined voting power of our Class A common stock and Class B common stock.

As long as ARKO Parent or its affiliates (other than us) owns more than 50% of the total voting power of both classes of our common stock, it will be able to control nearly all corporate actions that require a stockholder vote, regardless of the vote of any other stockholder. As a result, ARKO Parent has the ability to control significant matters involving us, including:

the election and removal of our directors;

determinations with respect to mergers, business combinations, dispositions of assets or other extraordinary corporate transactions;

certain amendments to our amended and restated certificate of incorporation;

changes in capital structure, including the level of indebtedness;

the number of shares of our common stock available for issuance under our equity incentive plans for our prospective and existing employees; and

agreements that may adversely affect us including, without limitation, certain master leases to which we and ARKO Parent are party under which we are jointly and severally liable for ARKO Parent’s obligations.

Alternatively, if ARKO Parent does not provide any requisite affirmative vote on matters requiring stockholder approval allowing us to take particular actions when requested, we will not be able to take such actions, and as a result, our business, financial condition, results of operations and cash flows may be adversely affected. Even if ARKO Parent owns 50% or less of our total voting power of both classes of our common stock, ARKO Parent will have the ability to substantially influence these matters for as long as it owns a significant portion of the voting power.

The interests of ARKO Parent may differ from our interests or those of our other stockholders and the concentration of control in ARKO Parent will limit other stockholders’ ability to influence corporate matters. The concentration of ownership and voting power with ARKO Parent also may delay, defer or prevent an acquisition by a third party or other change of control of our Company and may make some transactions more difficult or impossible without the support of ARKO Parent, even if such events are in the best interests of our other stockholders. The concentration of voting power with ARKO Parent may have an adverse effect on the price of our Class A common stock. Our Company may take actions that our other stockholders do not view as beneficial, which may adversely affect our business, financial condition, results of operations and cash flows, and may cause the value of our public stockholders’ investment to decline.

ARKO Parent’s interests may conflict with our interests and the interests of our other stockholders. Conflicts of interest or disputes between ARKO Parent and our Company could be resolved in a manner unfavorable to our Company and our other stockholders.

ARKO Parent could have interests that differ from, or conflict with, the interests of our other stockholders and could cause us to take certain actions even if the actions are not favorable to us or our other stockholders or are opposed by our other stockholders. If ARKO Parent is acquired or otherwise experiences a change in control, any acquirer or successor will be entitled to exercise ARKO Parent’s voting control with respect to us.

Potential conflicts of interest or disputes may arise between ARKO Parent and us in a number of areas relating to our past or ongoing relationships, including:

tax, employee benefits and indemnification;

employee retention and recruiting;

the nature, quality and pricing of services ARKO Parent has agreed to provide to us;

business opportunities that may be attractive to both ARKO Parent and us; and

any new commercial arrangements between ARKO Parent and us in the future.

The resolution of any potential conflicts or disputes between ARKO Parent and us may be less favorable to us than the resolution we might achieve if we were dealing with an unaffiliated third party.

The various ancillary agreements that we have entered into with ARKO Parent and its affiliates are of varying durations and may be amended upon agreement of the parties. The terms of these agreements were primarily determined by ARKO Parent, and, therefore, may not be representative of the terms we could have obtained on a standalone basis or in negotiations with an unaffiliated third party. For as long as we are controlled by ARKO Parent, we may not be able to negotiate renewals or amendments to these agreements, if required, on terms as favorable to us as those we would be able to negotiate with an unaffiliated third party. As a result, the terms of those agreements may not reflect terms that would have resulted from arm’s-length negotiations between unaffiliated third parties. Arm’s-length negotiations between ARKO Parent and an unaffiliated third party in another form of transaction, such as a buyer in a sale of a business transaction, may have resulted in more favorable terms to the unaffiliated third party.

Our amended and restated certificate of incorporation (our “charter”) could prevent us from benefiting from corporate opportunities that might otherwise have been available to us.

Our charter includes certain provisions regulating and defining the conduct of our affairs to the extent that they may involve ARKO Parent and its directors, officers, employees, agents and affiliates (except that we are not deemed affiliates of ARKO Parent or its affiliates for purposes of these provisions) and our rights, powers, duties and liabilities and those of our directors, officers, managers, employees and agents in connection with our relationship with ARKO Parent. In general, and except as may be set forth in any agreement between us and ARKO Parent, these provisions provide that ARKO Parent and its affiliates may carry on and conduct any business of any kind, nature or description, whether or not such business is competitive with or in the same or similar lines of business as us; ARKO Parent and its affiliates may do business with any of our customers, vendors and lessors; and ARKO Parent and its affiliates may make investments in any kind of property in which we may make investments. In addition, these provisions provide that we renounce any interest or expectancy to participate in any business of ARKO Parent or its affiliates.

Moreover, our charter provides that we renounce any interests or expectancy in corporate opportunities which become known to (i) any of our directors, officers, managers, employees or agents who also are directors, officers, employees, agents or affiliates of ARKO Parent or its affiliates (except that we and our subsidiaries are not deemed affiliates of ARKO Parent or its affiliates for the purposes of the provision) or (ii) ARKO Parent or its affiliates (collectively the persons identified in clauses (i) and (ii), the “Covered Persons”). Generally, the Covered Persons who would otherwise owe fiduciary duties to us or our stockholders will not be liable to us or our stockholders for breach of any fiduciary duty solely by reason of the fact that any such person pursues or acquires any such corporate opportunity for the account of ARKO Parent, itself, or its affiliates. This renunciation does not extend to corporate opportunities expressly offered to one of our directors, officers, managers, employees or agents, solely in his or her capacity as a director, officer, manager, employee or agent of us.

These provisions in our charter will cease to apply at such time as (i) we and ARKO Parent and its affiliates are no longer affiliates of one another and (ii) none of the directors, officers, employees, agents or affiliates of ARKO Parent serve as our directors, officers, managers, employees or agents. The corporate opportunity provision may exacerbate conflicts of interest between ARKO Parent and us because the provision effectively permits one of our directors, officers, managers, employees or agents who also serves as a director, officer, employee, agent or affiliate of ARKO Parent or its affiliates to choose to direct a specified corporate opportunity to ARKO Parent or its affiliates instead of to us. Accordingly, we may lose such a corporate opportunity or suffer competitive harm, which could negatively impact our business or prospects.

The services that ARKO Parent provides to us may not be sufficient to meet our needs, which may result in increased costs and otherwise adversely affect our business.

Prior to completion of our IPO, ARKO Parent performed various functions on our behalf including finance, information technology, legal, human resources, quality, supply chain and purchasing functions. ARKO Parent agreed to continue providing many of such services to us following our IPO for a fee provided for in the Management Services Agreement. ARKO Parent is not obligated to provide these services in a manner that differs from the nature of the services provided before our IPO, and thus we may not be able to modify these services in a manner desirable to us. Further, if we no longer receive these services from ARKO Parent, we may not be able to perform these services ourselves or to find appropriate third party arrangements at a reasonable cost, and the cost may be higher than that charged by ARKO Parent.

If ARKO Parent terminates the Management Services Agreement, or defaults in the performance of its obligations under such agreement, we may be unable to contract with a substitute service provider on similar terms, or at all.

We rely on ARKO Parent to provide us with executive management under the Management Services Agreement, and we may not have independent executive management or support personnel. The Management Services Agreement may be terminated under certain circumstances, including in the event of a change of control of our Company. Our future success depends significantly on the involvement of certain of ARKO Parent’s senior managers and employees, who have valuable expertise in all areas of our business. ARKO Parent’s ability to retain and motivate the senior managers and employees involved in the management of our business, as well as attract highly skilled employees, significantly affect our ability to run our business successfully and to execute our growth strategy. If we were to lose access to one or more of the senior managers provided for under the Management Services Agreement it might be difficult to appoint replacements. This could have an adverse impact on our business, financial condition, results of operations and cash flows. In light of ARKO Parent’s familiarity with our assets, a substitute service provider may not be able to provide the same level of service due to lack of pre-existing synergies. If we cannot locate a service provider that is able to provide us with services substantially similar to those provided by ARKO Parent under the Management Services Agreement on similar terms, it would likely have a material adverse effect on our business, financial condition, results of operation and cash flows.

The liability and obligations of ARKO Parent is limited under our arrangements with it and we have agreed to indemnify ARKO Parent against claims that it may face in connection with certain of such arrangements.

Under the Management Services Agreement, ARKO Parent did not assume any responsibility other than to provide or arrange for the provision of the services described therein in good faith and the provision or arrangement of such services is subject to a number of exceptions, which may leave us without sufficient operational or administrative support. ARKO Parent is generally not obligated to continue to employ or engage the requisite personnel or service provider, and if such resources are no longer available to ARKO Parent, a third party service provider objects to the provision of services to us or if another exception under the Management Services Agreement applies, ARKO Parent is not obligated to provide us with the applicable service until we are able to hire the requisite personnel or onboard a satisfactory replacement service provider.

In addition, under the Employee and Intercompany Matters Agreement, we are responsible for any liabilities associated with the participation in ARKO Parent’s benefit plans, regardless of when such claims or liabilities are filed, reported or payable. Under that agreement, certain of our directors and officers who, notwithstanding indemnification by ARKO Parent, first look to us as the indemnitor of first resort. Additionally, under the Fuel Distribution Agreement, ARKO Parent may terminate our exclusive supplier relationship under certain circumstances upon short notice by paying liquidated damages, which may not fully compensate us for the disruption to our business.

In addition, under certain related party lease and sublease agreements, we are responsible for all taxes, insurance, utilities, maintenance, and environmental compliance obligations, and indemnify ARKO Parent and its affiliates for liabilities arising under such agreements, or may otherwise be liable for obligations of ARKO Parent and its affiliates under such agreements, including as a result of breaches outside of our control. See “ Risk Factors—Risks Related to Our Business and Industry—We may not be able to lease sites we own or sublease sites we lease on favorable terms and any such failure could adversely affect our results of operations, financial condition and ability to make distributions to our stockholders ” above.

These protections may result in ARKO Parent tolerating greater risks when making decisions than otherwise would be the case, expose us to unexpected costs related to employment matters and the risks of significant interruption in our business operations if ARKO Parent or its service providers are permitted to reduce to cease providing operational and administrative services on which we rely to conduct our business, which may materially affect our business and results of operations.

Certain of the executive officers of ARKO Parent are also our directors and officers, which may create conflicts of interest or the appearance of conflicts of interest.

Certain of ARKO Parent’s current executive officers are also our executive officers, and this could create, or appear to create, potential conflicts of interest when we and ARKO Parent encounter opportunities or face decisions that could have implications for both companies or in connection with the allocation of such officers’ time between ARKO Parent and us. Additionally, Arie Kotler, our Chief Executive Officer and member of our Board, is also Chief Executive Officer and a member of the ARKO Parent Board. Because of their current or former positions with ARKO Parent, our executive officers own equity interests in ARKO Parent. Continuing ownership of shares of ARKO Parent capital stock and current and future equity awards could create, or appear to create, potential conflicts of interest if we and ARKO Parent face decisions that could have implications for both ARKO Parent and us.

ARKO Parent may compete with us.

Notwithstanding ARKO Parent’s continued ownership and control of our Company, ARKO Parent is not restricted from competing with us other than with respect to offering us certain opportunities to participate in joint acquisitions under the Omnibus Agreement. If ARKO Parent in the future decides to engage in the type of business we conduct, it may have a competitive advantage over us, which may cause our business, financial condition and results of operations to be materially adversely affected.

Risks Related to Ownership of Our Class A Common Stock

We have limited operating history as a separate public company, and our historical financial information is not necessarily representative of the results we would have achieved as a separate public company and may not be a reliable indicator of our future results.

The historical financial information we have included in this Annual Report on Form 10-K does not reflect what our financial position, results of operations or cash flows would have been had we been a separate public company during the historical periods presented, or what our financial position, results of operations or cash flows will be in the future as a separate public company. Prior to our IPO, our businesses were operated by ARKO Parent as part of its broader corporate organization, rather than as a separate public company. ARKO Parent performed various business functions for us such as finance, information technology, legal, human resources, licensing, risk management, fuel procurement, fuel pricing, supply chain and purchasing functions. Our historical financial results reflect allocations of corporate expenses from ARKO Parent or autonomous entity adjustments for such functions and may be different than the expenses we would have incurred had we operated as a separate public company.

Following our IPO, our costs related to such functions may therefore increase. Additionally, after our IPO, the cost of capital for our businesses may be higher than ARKO Parent’s cost of capital prior to our IPO. Other significant changes may occur in our cost structure, management, financing and business operations as a result of operating as a company separate from ARKO Parent.

The concentrated ownership of our common stock could depress our Class A common stock price.

ARKO Parent owns 35 million shares of our Class B common stock, representing 73.6% of the economic interests in us, and 93.3% of the combined voting power of our Class A common stock and Class B common stock. The liquidity of shares of our Class A common stock in the market may be constrained for as long as ARKO Parent continues to hold a significant position in our common stock. A lack of liquidity in our Class A common stock could depress the price of our Class A common stock.

We cannot predict the effect our multi-class structure may have on the market price of our Class A common stock.

We cannot predict whether our multi-class structure will result in a lower or more volatile market price of our Class A common stock, adverse publicity or other adverse consequences. For example, certain stock index providers have excluded or limited the eligibility of public companies with multiple classes of shares of common stock from being added to certain stock indices. The multi-class structure of our common stock would therefore make us ineligible for inclusion in indices with such restrictions and, as a result, mutual funds, exchange-traded funds, and other investment vehicles that attempt to passively track these indices may not invest in our Class A common stock.

In addition, several stockholder advisory firms and large institutional investors have been critical of the use of multi-class structures. Such stockholder advisory firms may publish negative commentary about our corporate governance practices or capital structure, which may dissuade large institutional investors from purchasing shares of our Class A common stock.

These actions could make our Class A common stock less attractive to other investors. As a result, the market price of our Class A common stock could be adversely affected.

Future sales or distributions of shares of our Class A common stock by ARKO Parent could depress our Class A common stock price, impact our operations or result in a change in control of us.

ARKO Parent holds 35 million shares of Class B common stock, which are convertible into 35 million shares of Class A common stock. Subject to a lock-up period expiring August 10, 2026, ARKO Parent generally has the right at any time to sell or otherwise dispose of all or a portion of the shares of our Class B common stock or Class A common stock that it owns to third parties. A sale of a controlling interest in us to a third party would result in persons other than ARKO Parent controlling us and could result in a change of management or changes in our business operations and policies. Sales by ARKO Parent in the public market of substantial amounts of our Class A common stock or a spin-off to its stockholders also could depress the price of our Class A common stock.

In addition, ARKO Parent has the right, subject to certain conditions, to require us to file registration statements covering the sale of shares of our Class A common stock issuable upon conversion of its shares of our Class B common stock or to include such shares of our Class A common stock in other registration statements that we may file. In the event ARKO Parent exercises its registration rights and sells all or a portion of its shares of our Class A common stock, the price of our Class A common stock could decline.

If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about us, our business or our market, or if they change their recommendations regarding our Class A common stock adversely, the trading price and trading volume of our Class A common stock could decline.

The trading market for our Class A common stock will depend, in part, on the research and reports that securities or industry analysts publish about us, our business, our market or our competitors. The analysts’ estimates are based upon their own opinions and are often different from our estimates or expectations. If any of the analysts who cover us change their recommendation regarding our Class A common stock adversely, provide more favorable relative recommendations about our competitors, or publish inaccurate or

unfavorable research about our business, the trading price of our Class A common stock would likely decline. If few securities analysts commence coverage of us, or if one or more of these analysts cease coverage of us or fail to publish reports on us regularly, we could lose visibility in the financial markets and demand for our securities could decrease, which could cause the trading price and volume of our Class A common stock to decline.

We are a holding company and our only material asset is our interests in our subsidiaries, and we are accordingly dependent upon distributions from our subsidiaries to pay dividends, taxes and other expenses.

We are a holding company and have no material assets other than our ownership of interests in various operating companies contributed to us by ARKO Parent and any assets that we may acquire. We do not have any independent means of generating revenue. We intend to cause our subsidiaries to make distributions to us in an amount sufficient to cover all applicable taxes payable and the minimum quarterly dividends declared by us, along with costs to fund our operations. To the extent that we need funds to pay such quarterly cash dividend to holders of our Class A common stock or otherwise, and our subsidiaries are restricted from making such distributions under applicable law or regulation or are otherwise unable to provide such funds, it could materially adversely affect our liquidity and financial condition and limit our ability to pay dividends to holders of our common stock.

We are a “controlled company” within the meaning of the rules of Nasdaq and, as a result, qualify for, and may in the future rely on, exemptions from certain corporate governance requirements. Our stockholders do not have the same protections afforded to stockholders of companies that are subject to such requirements.

ARKO Parent holds 93.3% of the total voting power of both classes of our common stock outstanding and therefore has the ability to determine all matters requiring approval by our stockholders, including the election of our directors, amendment of our governing documents, and approval of certain major corporate transactions (see “ Risk Factors—Risks Related to our Governance Relationship with ARKO Parent—ARKO Parent controls our Company and has the ability to control the direction of our business ”). As a result of the voting power held by ARKO Parent, we are a “controlled company” within the meaning of the corporate governance rules of Nasdaq. Under these rules, a listed company of which more than 50% of the total voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including:

the requirement that a majority of our Board consist of independent directors;

the requirement that our nominating and corporate governance committee be composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities, or if no such committee exists, that our director nominees be selected or recommended by independent directors constituting a majority of the Board’s independent directors in a vote in which only independent directors participate;

the requirement that our compensation committee be composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and

the requirement for an annual performance evaluation of our nominating and corporate governance and compensation committees.

We do not currently rely on any of these exemptions, but there can be no assurance that we will not rely on these exemptions in the future. If we were to utilize some or all of these exemptions, our stockholders may not have the same protections afforded to stockholders of companies that are subject to all of the Nasdaq rules regarding corporate governance.

We will incur additional costs as a result of being a public company, which may adversely affect our business, financial condition and results of operations.

We will incur costs associated with corporate governance requirements that are applicable to us as a public company, including rules and regulations of the SEC, under the Sarbanes-Oxley Act of 2002, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, and the Exchange Act, as well as the rules of Nasdaq. These rules and regulations will significantly increase our accounting, legal and financial compliance costs and make some activities more time-consuming. Additionally, these rules and regulations make it more expensive for us to maintain directors’ and officers’ liability insurance. As a result, it may be more difficult for us to attract and retain qualified persons to serve on our Board or as executive officers. Accordingly, increases in costs incurred as a result of being a publicly traded company may adversely affect our business, financial condition and results of operations.

We may not be able to timely and effectively implement controls and procedures required by Section 404 of the Sarbanes-Oxley Act.

Before becoming a public company, we were not subject to Section 404 of the Sarbanes-Oxley Act. The standards required for a public company under Section 404 of the Sarbanes-Oxley Act are significantly more stringent than those required of us prior to becoming a public company. Section 404(a) of the Sarbanes-Oxley Act (“Section 404(a)”) requires that, beginning with the second annual report following our initial public offering, management assess and report annually on the effectiveness of internal control over financial reporting and identify any material weaknesses in internal control over financial reporting. Additionally, Section 404(b) of

the Sarbanes-Oxley Act (“Section 404(b)”) requires the independent registered public accounting firm to issue an annual report that addresses the effectiveness of internal control over financial reporting. Our first Section 404(a) assessment will take place for our Annual Report on Form 10-K for the year ending December 31, 2026, and we expect that our first 404(b) assessment will take place for our Annual Report on Form 10-K for the year ending December 31, 2027. Management may not be able to effectively and timely implement controls and procedures that adequately respond to the increased regulatory compliance and reporting requirements that became applicable after becoming a public company. If we are not able to implement the additional requirements of Section 404(a) in a timely manner or with adequate compliance, we may not be able to assess whether our internal controls over financial reporting are effective, which may subject us to adverse regulatory consequences and could harm investor confidence and the market price of our shares of Class A common stock.

Certain provisions in our charter or our debt facilities may discourage, delay or prevent a change in control or prevent an acquisition of our business at a premium price.

Our charter includes certain provisions which may have the effect of delaying or preventing a future takeover or change in control that stockholders may consider to be in their best interests. Among other things, our amended and restated certificate of incorporation will provide for (i) limitations on convening special stockholder meetings, which could make it difficult for our stockholders to adopt desired governance changes, (ii) a prohibition on stockholder action by written consent, (iii) a forum selection clause, which means certain litigation against us can only be brought in Delaware and (iv) authorized but unissued common stock and preferred stock, which are available for future issuances without stockholder approval. Our equity plans and our officers’ employment agreements provide certain rights to plan participants and those officers, respectively, in the event of a change in control.

Under the indenture governing the Senior Notes, if certain specified change of control events occur, which may include the sale of all or substantially all of our assets, each holder of the Senior Notes may require ARKO Parent to repurchase all of such holder’s Senior Notes at a purchase price equal to 101% of the principal amount of such notes, plus accrued and unpaid interest, if any, to, but not including, the date of purchase. In addition, the Capital One Line of Credit, and certain of ARKO Parent’s credit facilities to which we are contractually bound, provide for an event of default upon the occurrence of certain specified change of control events, which may include the sale of all or substantially all of our assets.

Our charter designates specific courts as the exclusive forum for certain litigation that may be initiated by our stockholders, which could limit our stockholders’ abilities 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, the sole and exclusive forum, to the fullest extent permitted by law, for (1) any derivative action or proceeding brought on our behalf, (2) any action asserting a claim of breach of a fiduciary duty owed by any of our current or former directors, officers or other employees or stockholders to us or our stockholders, creditors or other constituents, or a claim of aiding and abetting any such breach of fiduciary duty, (3) any action asserting a claim against us or any of our directors or officers or other employees or stockholders arising pursuant to, or any action to interpret, apply, enforce any right, obligation or remedy under or determine the validity of, any provision of the Delaware General Corporation Law (“DGCL”) or our charter or amended and restated bylaws or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware, (4) any action asserting a claim that is governed by the internal affairs doctrine, or (5) any other action asserting an “internal corporate claim” under the DGCL shall be the Court of Chancery of the State of Delaware (or, if and only if the Court of Chancery does not have subject matter jurisdiction, another state court sitting in the State of Delaware or, if and only if neither the Court of Chancery nor any state court sitting in the State of Delaware has subject matter jurisdiction, then the federal district court for the District of Delaware) (the “Delaware Forum Provision”). Notwithstanding the foregoing, our charter provides that the Delaware Forum Provision will not apply to any actions arising under the Securities Act or the Exchange Act. However, our charter provides that unless we consent in writing to the selection of an alternative forum, (i) the federal district court for the District of Delaware shall, to the fullest extent permitted by law, be the sole and exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act and (ii) the Court of Chancery of the State of Delaware and the federal district court for the District of Delaware shall be the sole and exclusive forums for the resolution of any derivative claim arising under the Exchange Act (the “Federal Forum Provision”).

The Delaware Forum Provision and the Federal 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 or other employees, which may discourage lawsuits against us and our directors, officers and other employees. Alternatively, if a court were to find the Delaware Forum Provision or the Federal Forum Provision to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, financial condition or results of operations. Any person or entity purchasing or otherwise acquiring any interest in our shares of capital stock shall be deemed to have notice of and consented to the Delaware Forum Provision and the Federal Forum Provision, but will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Annual Report on Form 10-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (“PSLRA”), Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Exchange Act of 1934, about our expectations, beliefs, plans and intentions regarding our product development efforts, business, financial condition, results of operations, strategies and prospects. You can identify forward-looking statements by the fact that these statements do not relate to historical or current matters. Rather, forward-looking statements relate to anticipated or expected events, activities, trends or results. Because forward-looking statements relate to matters that have not yet occurred, these statements are inherently subject to risks and uncertainties that could cause our actual results to differ materially from any future results expressed or implied by the forward-looking statements. Many factors could cause our actual activities or results to differ materially from the activities and results anticipated in forward-looking statements. These factors include those contained in “Item 1A — Risk Factors” of this Annual Report on Form 10-K. Forward-looking statements reflect our views only as of the date they are made. We do not undertake any obligation to update forward-looking statements except as required by applicable law. We intend that all forward-looking statements be subject to the safe harbor provisions of PSLRA.

Overview

ARKO Petroleum Corp. is a growth-oriented, fuel distribution company and one of the largest wholesale fuel distributors by gallons in North America, supplying customers in more than 30 states across the United States (“U.S.”). Based in Richmond, Virginia, ARKO Petroleum Corp. was incorporated under the laws of Delaware on July 2, 2025 as a wholly owned subsidiary of ARKO Corp., a Delaware corporation (“ARKO Parent”), one of the largest convenience store operators in the U.S. and whose common stock is listed on the Nasdaq Stock Market (“Nasdaq”) under the symbol “ARKO.”

On February 13, 2026, we completed our initial public offering issuing 11,111,111 shares of our Class A common stock, par value $0.0001 per share (“Class A common stock”), at a price to the public of $18.00 per share. In connection with the initial public offering, we granted to the underwriters an option for a period of 30 days following the closing of the initial public offering to purchase up to an additional 1,666,666 shares of Class A common stock to cover over-allotments. On March 5, 2026, the underwriters exercised their option to purchase 1,459,112 shares of Class A common stock, and on March 9, 2026, we issued and sold such shares to the underwriters. The foregoing transactions are collectively referred to as our “IPO.” The total net proceeds from our IPO were approximately $206.8 million. Our Class A common stock began trading on Nasdaq under the symbol “APC” on February 12, 2026. ARKO Parent owns 35,000,000 of our Class B common stock, par value $0.0001 per share (“Class B common stock”), representing 73.6% of the economic interests and 93.3% of the combined voting power of the Class A common stock and Class B common stock.

In conjunction with our IPO, ARKO Parent contributed to us all of its wholesale and fleet fueling businesses and the rights to supply fuel to substantially all of ARKO Parent’s retail convenience stores that sell fuel (“ARKO Retail Sites”).

We are engaged in (i) wholesale activity, which includes the supply of fuel to gas stations operated by third-party dealers, (ii) fleet fueling, which includes the operation of proprietary and third-party cardlock locations (unstaffed fueling locations) and the issuance of proprietary fuel cards that provide customers access to a nationwide network of fueling sites, and (iii) the wholesale distribution of fuel to substantially all of the ARKO Retail Sites (together, the “Business”). As of December 31, 2025, we supplied fuel to 2,099 dealer locations and to 1,095 ARKO Retail Sites, and we operated 295 proprietary and third-party cardlock locations. We are well diversified geographically and as of December 31, 2025, operated in the District of Columbia and more than 30 states in the Mid-Atlantic, Midwestern, Northeastern, Southeastern and Southwestern United States.

One of our key business objectives is to make quarterly cash distributions to stockholders and, over time, increase our quarterly cash distribution. We have designed our operating model to be cost-and-capital-efficient based on the following characteristics: (i) the Business requires a limited number of employees; (ii) relatively low operating costs, which generally result in high conversion of gross profit to Adjusted EBITDA and, similarly, an attractive margin profile; and (iii) adding wholesale and cardlock locations is not expected to require substantial incremental corporate overhead, providing an opportunity to scale efficiently. Additionally, our cost-and-capital-efficient operating model, relatively low leverage and stable and growing cash flow profile, are expected to position us to consistently convert a high level of Adjusted EBITDA into Discretionary Cash Flow, enabling us to prioritize the return of capital to stockholders in the form of consistent and growing cash dividends. Adjusted EBITDA and Discretionary Cash Flow are non-GAAP measures. Please see Use of Non-GAAP Measures below for discussion of these non-GAAP performance and liquidity measures and related reconciliation to net income and net cash provided by operating activities, as applicable.

Description of Segments

Our reportable segments are described below.

Wholesale Segment

Our wholesale segment supplies fuel to gas stations operated by third-party dealers, sub-wholesalers, and bulk and spot purchasers on either a cost-plus or consignment basis. For cost plus arrangements, the dealers, sub-wholesalers and bulk and spot purchasers, purchase fuel from us, and we earn a fixed mark-up above our cost. The sales price to the dealer is determined according to the terms of the relevant agreement, which typically reflects our total fuel costs plus the cost of transportation, taxes and our fixed margin. Furthermore, we generally retain any prompt pay discounts and rebates from our fuel suppliers. For consignment arrangements, we retain ownership of the fuel inventory at the site until the time of sale to the ultimate customer by the dealer, we are responsible for the pricing of the fuel to the end consumer and we share the gross profit generated from the sale of fuel by the dealer based on the terms of the relevant contract. In certain cases, gross profit is split based on a percentage and in others, we pay a fixed fee per gallon to the dealer and retain the remainder of the profit.

Fleet Fueling Segment

Our fleet fueling segment includes the operation of proprietary and third-party cardlock locations (unstaffed fueling locations), and commissions from the sales of fuel using proprietary fuel cards that provide customers access to a nationwide network of fueling sites.

GPMP Segment

Our GPMP segment includes the sale and supply of fuel to substantially all ARKO Retail Sites, at our cost of fuel (including taxes and transportation) plus a fixed margin (through December 31, 2025, 5.0 cents per gallon; 6.0 cents per gallon thereafter), and the GPMP segment charges a fixed fee (through December 31, 2025, 5.0 cents per gallon; 6.0 cents per gallon thereafter) to certain ARKO Retail Sites that are not supplied by us. In addition, the GPMP segment includes the sale of fuel to substantially all of our wholesale locations at our cost of fuel (including taxes and transportation) plus a fixed margin (through December 31, 2025, 5.0 cents per gallon; 6.0 cents per gallon thereafter), and the GPMP segment charges a fixed fee (through December 31, 2025, 5.0 cents per gallon; 6.0 cents per gallon thereafter) primarily to fleet fueling locations that are not supplied by the GPMP segment. These inter-segment transactions were eliminated in our combined results of operations. Through the end of the second quarter of 2025, the GPMP segment also supplied fuel to a limited number of dealers.

Basis of Presentation

The audited combined financial statements (the “combined financial statements”), which are contained elsewhere in this Annual Report on Form 10-K, present our historical financial position, results of operations, changes in net investment and our cash flows in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

We have historically operated as part of ARKO Parent and not as a separate, publicly traded company. The combined financial statements have been derived from ARKO Parent’s audited consolidated financial statements and historical accounting records, carved out of the activity of ARKO Parent and combined. All revenues and costs as well as assets and liabilities directly associated with our Business have been included in the combined financial statements. The combined financial statements also include allocations of certain operating and corporate expenses from ARKO Parent relating to our Company. The allocations have been determined on a reasonable basis; however, the allocations are not necessarily representative of the amounts that would have been reflected in the combined financial statements had we been an entity that operated separately from ARKO Parent during the periods presented. Further, the combined financial statements are not reflective of what our results of operations, financial position, equity or cash flows might be in the future as a separate public company.

Immediately prior to our IPO, we entered into a Management Services Agreement with ARKO Parent, whereby ARKO Parent has agreed to provide or cause to be provided certain services to us, which were previously included as part of the allocations from ARKO Parent. As consideration, we agreed to pay ARKO Parent a fee. Related party allocations, including the method for such allocations, are discussed further in Note 18 to the combined financial statements.

For example, our combined financial statements include expense allocations for certain support functions that are provided on a centralized basis within ARKO Parent, such as certain ARKO Parent expenses and shared service functions provided by ARKO Parent. Following our IPO, under the Management Services Agreement, ARKO Parent will continue to provide us with some of the services related to these functions for agreed-upon fees, and we will incur other costs to replace the services and resources that will not be provided by ARKO Parent. We will also incur additional costs as a separate public company. Our total costs related to such support functions may differ from the costs that were historically allocated to us from ARKO Parent. These additional costs are primarily for the following:

additional personnel costs, including salaries, benefits and potential bonuses or stock-based compensation awards for staff, including staff additions to replace support provided by ARKO Parent that is not covered by the Management Services Agreement; and

corporate governance costs, including director and officer insurance costs, board of director compensation and expenses, audit and other professional services fees, annual report and proxy statement costs, SEC filing fees, transfer agent fees, consulting and legal fees and Nasdaq listing fees.

Certain factors could impact the nature and amount of these separate public company costs, including our staffing and infrastructure needs. We may incur different costs associated with being a standalone public company, which would result in costs that vary from the costs that have been allocated to us in the combined financial statements.

Additionally, prior to our IPO, ARKO Parent used a centralized approach to cash management and financing of its operations, except with respect to GPM Petroleum LP, which has had, and continues to have, its own credit facility. See Liquidity and Capital Resources .

Factors Affecting Results of Operations and Comparability and Initiatives

We achieved strong growth over the last decade, driven primarily by a highly successful acquisition strategy, inclusive of 26 completed acquisitions by us and ARKO Parent from 2013 through 2025. In April 2024, we acquired the right to supply fuel to 21 convenience stores ARKO Parent acquired from a third-party located in Michigan. In March 2023, we acquired 181 dealer locations, a commercial, government, and industrial business, and certain distribution and transportation assets from Transit Energy Group, LLC (the “TEG Acquisition”), as well as the right to supply fuel to 135 convenience stores ARKO Parent acquired as part of the TEG Acquisition. In June 2023, we completed our acquisition of 68 proprietary GASCARD-branded cardlock sites and 43 private cardlock sites for fleet fueling operations located in Western Texas and Southeastern New Mexico from WTG Fuels Holdings, LLC (the “WTG Acquisition”) and the right to supply fuel to the 24 convenience stores ARKO Parent acquired as part of the WTG Acquisition (together with the TEG Acquisition, the “2023 Acquisitions”). Our strategic acquisitions, as well as the conversion of a meaningful number of ARKO Retail Sites to dealer locations, have had, and may continue to have, a significant impact on our reported results, which can make period to period comparisons difficult. For additional information regarding our acquisitions, see Note 3 to the combined financial statements.

Starting in the middle of 2024, ARKO Parent commenced a multi-year transformation plan to leverage its unique, multi-segment operating model to expand our wholesale fuel distribution network by converting a meaningful number of ARKO Retail Sites to dealer locations. The conversion of an ARKO Retail Site that had been supplied by the GPMP segment to a dealer location effectively shifts that site to our wholesale segment. In such cases, we realize higher profit from ongoing fuel supply agreements and rental income than from the supply of fuel to these ARKO Retail Sites by the GPMP segment. During the year ended December 31, 2025, our sales team converted 256 ARKO Retail Sites to dealer locations, and has converted a total of 409 stores since the beginning of this initiative in the middle of 2024. We expect that ARKO Parent will convert a meaningful number of additional stores throughout 2026.

We are targeting 20 new-to-industry (“NTI”) fleet fueling locations with target openings during 2026, with one opened in March 2026, and 13 of which we are currently advancing, and we anticipate that these NTI locations will have a positive impact on our results of operations given the attractive, durable cash flow profile of our fleet fueling business.

Our wholesale and fleet fueling businesses and the GPMP segment’s wholesale distribution of fuel to substantially all of the ARKO Retail Sites have provided stable, ratable cash flows that can be deployed to pursue accretive acquisitions and invest in our business, and we believe our significant size and scale aids our efforts to successfully deploy our growth strategies, which we anticipate will result in value accretion. Additionally, we believe our low leverage profile and anticipated cash flows position us to consistently return capital to stockholders through dividends.

The following table provides a history of our acquisitions, site conversions and site closings for the periods noted, for the wholesale, fleet fueling and GPMP segments:

For the Year Ended December 31,

Wholesale Segment 1

Number of sites at beginning of period

Acquired sites

Newly opened or reopened sites 2

ARKO Retail Sites converted to consignment

or fuel supply locations

Fuel supply locations converted to

fleet fueling sites

Closed or divested sites

Number of sites at end of period

1 Excludes bulk and spot purchasers.

2 Includes all signed fuel supply agreements irrespective of fuel distribution commencement date.

For the Year Ended December 31,

Fleet Fueling Segment

Number of sites at beginning of period

Acquired sites

Newly opened or reopened sites

Fleet fueling locations converted from fuel supply

locations

Closed or divested sites

Number of sites at end of period

For the Year Ended December 31,

GPMP Segment – related party sites (ARKO Retail Sites)

Number of sites at beginning of period

Acquired sites

Newly opened or reopened sites

ARKO Retail Sites converted to consignment

or fuel supply locations

Sites closed, divested or converted to rental

Number of sites at end of period

Trends Impacting our Business

We believe we have limited exposure to fluctuating commodity prices because we generally pass the cost of the fuel we distribute through to our customers. In addition, we are able to generate larger fuel margins (i) under consignment distribution arrangements with third-party dealers, where we maintain control of the fuel inventory and retail fuel pricing, and (ii) on fuel sales at our cardlock locations, compared to fuel supply arrangements.

The number of fuel gallons we sell and the related fuel margin that we earn per gallon significantly impact our results of operations. Fuel gallons sold to dealers at fuel supply locations and consignment agent locations are dependent on the volume at these locations, which is impacted by the macroeconomic environment, weather and other factors. Fuel gallons sold at proprietary and third-party cardlock locations and to ARKO Retail Sites are impacted by changes in the number of locations, macroeconomic environment, weather, crude oil pricing and other factors.

The cost of our main products, gasoline and diesel fuel, is greatly impacted by the wholesale cost of fuel in the United States. We pass wholesale fuel cost changes to our fuel supply dealers, including ARKO Retail Sites, and attempt to pass wholesale fuel cost changes to our fleet fueling and consignment customers through price changes; however, we are not always able to do so. Competitive conditions primarily drive the timing of any increases or decreases in retail prices. Fuel margins for our fleet fueling sites and consignment locations can change rapidly because they are influenced by many factors, including: the wholesale cost of fuel; interruptions in supply caused by severe weather; supply chain disruptions; refinery mechanical failures; and competition in the local markets in which we operate. We tend to realize lower fuel margins when the cost of fuel is increasing gradually over a longer period of time and higher fuel margins when the cost of fuel is declining or more volatile over a shorter period of time. From time to time,

market and geopolitical conditions constrain the supply of fuel, including diesel fuel in particular; therefore, we maintain terminal storage of diesel fuel for our fleet fueling sites’ short-term supply needs.

Additionally, the significant increase in the rate of inflation in the U.S. in recent years and the effect of higher prevailing interest rates has reduced consumer purchasing power. The persistence of, or increase in, inflation could negatively impact the demand for our fuel, including due to consumers reducing travel, which could reduce sales volumes.

Legislative Update

On July 4, 2025, the One Big Beautiful Bill Act (“OBBB”) was signed into law. The OBBB reinstated several key income tax provisions that were initially part of the U.S. Tax Cuts and Jobs Act of 2017, but which had been phased out in recent years or were set to expire in 2025, and made other changes to income tax provisions, many of which are not effective until 2026. The OBBB, among other things, repealed the mandatory capitalization of domestic research and development expenditures under Internal Revenue Code Section 174, extended the ability to take 100% bonus depreciation, reinstituted the EBITDA-based Section 163(j) calculation, revised international tax regimes, and accelerated the phase out of clean energy credits.

We have evaluated the impact of the OBBB and reflected the effects in the combined financial statements. Specifically, we recorded a favorable impact on the timing of cash paid for taxes of $7.4 million for the year ended December 31, 2025. The OBBB did not have a material impact on our effective tax rate for 2025. We will continue to monitor future guidance and developments related to the OBBB and will update our income tax disclosures as appropriate.

Seasonality

Our business is seasonal, and our operating income in the second and third quarters has historically been significantly greater than in the first and fourth quarters as a result of the generally favorable climate and seasonal buying patterns of our customers.

Results of Operations for the years ended December 31, 2025, 2024 and 2023

The period-to-period comparisons of our results of operations contained in this Management’s Discussion and Analysis of Financial Condition and Results of Operation have been prepared using the combined financial statements and the notes thereto, and the following discussion should be read in conjunction with such combined financial statements and related notes, which are contained elsewhere in this Annual Report on Form 10-K. All figures (other than related party) for fuel costs, fuel contribution and fuel margin per gallon exclude the estimated fixed margin or fixed fee paid to the GPMP segment for the cost of fuel, which are intercompany charges by the GPMP segment.

Combined Results

The table below shows our combined results for the years ended December 31, 2025, 2024 and 2023, together with certain key metrics.

For the Year Ended December 31,

Revenues:

(in thousands)

Fuel revenue

Fuel revenue – related party

Other revenues, net

Other revenues, net – related party

Total revenues

Operating expenses:

Fuel costs

Fuel costs – related party

Site operating expenses, including allocated expenses

General and administrative expenses, including allocated expenses

Depreciation and amortization, including allocated expenses

Total operating expenses

Other expenses, net

Operating income

Interest and other financial expenses, net, including allocated expenses

Income before income taxes

Income tax expense

Net income

Less: Net income attributable to non-controlling interests

Net income attributable to ARKO Petroleum Corp.

Fuel gallons sold

Fuel gallons sold – related party

Fuel gallons sold – total

Fuel contribution 1

Fuel contribution – related party 1

Fuel contribution – total 1

Fuel margin, cents per gallon 2

Fuel margin, cents per gallon – related party 2

Fuel margin, cents per gallon – total 2

Adjusted EBITDA 3

Net cash provided by operating activities

Discretionary Cash Flow 3

1 Calculated as fuel revenue less fuel costs.

2 Calculated as fuel contribution divided by fuel gallons sold.

3 Refer to “ Use of Non-GAAP Measures” below for discussion of these non-GAAP performance and liquidity measures and related reconciliation to net income and net cash provided by operating activities, as applicable.

For the year ended December 31, 2025 compared to the year ended December 31, 2024

For the year ended December 31, 2025, fuel revenue decreased by $148.1 million, or 4.4%, compared to the year ended December 31, 2024. The decrease in fuel revenue was attributable primarily to a decrease in the average price of fuel compared to the year ended December 31, 2024 and fewer gallons sold at comparable wholesale sites and fleet fueling sites in the year ended December 31, 2025 compared to the year ended December 31, 2024, due to a challenging macroeconomic environment and severe weather conditions in January and February 2025 in certain of the markets in which we operate, which was partially offset by the contribution of gallons from ARKO Retail Sites converted to dealer locations since the middle of 2024 .

For the year ended December 31, 2025, fuel revenue – related party decreased by $661.8 million, or 22.3%, compared to the year ended December 31, 2024, resulting primarily from a decrease in the average price of fuel in the year ended December 31, 2025, as compared to the year ended December 31, 2024, and a 158.7 million, or 15.5%, decrease in gallons sold, reflecting the challenging macroeconomic environment and ARKO Retail Sites converted to dealer locations, which was partially offset by incremental gallons sold relating to ARKO Parent’s acquisition of retail sites during 2024.

For the year ended December 31, 2025, other revenues, net increased by $22.9 million, or 56.8% compared to the year ended December 31, 2024, primarily due to additional rental income from ARKO Retail Sites that had been converted to dealer locations.

For the year ended December 31, 2025, other revenues, net – related party increased by $0.5 million, or 4.4%, compared to the year ended December 31, 2024, primarily due to additional revenue from the transportation of fuel to ARKO Retail Sites.

For the year ended December 31, 2025, total operating expenses decreased by $781.6 million, or 12.5%, compared to the year ended December 31, 2024. Fuel costs decreased by $153.4 million, or 4.8%, compared to the year ended December 31, 2024 and fuel costs – related party decreased by $653.8 million, or 22.4%, compared to the year ended December 31, 2024, both consistent with the decrease in fuel revenues. For the year ended December 31, 2025, site operating expenses including allocated expenses increased by $17.1 million, or 21.0%, as compared to the year ended December 31, 2024 due to incremental expenses from ARKO Retail Sites converted to dealer locations.

For the year ended December 31, 2025, general and administrative expenses including allocated expenses decreased by $0.2 million, or 0.4%, compared to the year ended December 31, 2024.

For the year ended December 31, 2025, depreciation and amortization expenses including allocated expenses increased by $8.6 million, or 18.7%, compared to the year ended December 31, 2024, primarily due to assets related to ARKO Retail Sites that have been converted to dealer locations.

For the year ended December 31, 2025, other expenses, net increased by $3.2 million compared to the year ended December 31, 2024 primarily due to costs associated with our IPO and higher losses on disposal of assets and impairment charges for the year ended December 31, 2025 as compared to the year ended December 31, 2024.

Operating income was $83.9 million for the year ended December 31, 2025 compared to $92.0 million for the year ended December 31, 2024. The decrease in operating income was primarily due to lower fuel contribution from comparable wholesale sites, lower fuel contribution from related party sites due to a decline in gallons at ARKO Retail Sites and an increase in depreciation and amortization expenses, which was partially offset by the benefit from ARKO Retail Sites that have been converted to dealer locations since the middle of 2024.

For the year ended December 31, 2025, interest and other financial expenses, net increased by $5.4 million compared to the year ended December 31, 2024, primarily due to higher interest expenses related to financial liabilities and financing leases, and approximately $3.4 million recorded as financial income in the year ended December 31, 2024 related to the settlement of deferred consideration related to the TEG acquisition, partially offset by lower average interest rates in the year ended December 31, 2025.

For the years ended December 31, 2025 and 2024, income tax expense was $9.1 million and $15.1 million, respectively, and our effective tax rate for the years ended December 31, 2025 and 2024 was 21.8% and 27.3%, respectively.

For the years ended December 31, 2025 and 2024, net income attributable to the Company was $32.7 million and $40.2 million, respectively.

For the years ended December 31, 2025 and 2024, Adjusted EBITDA was $143.5 million and $139.2 million, respectively. Refer to “Use of Non-GAAP Measures” below for discussion of this non-GAAP performance measure and related reconciliation to net income.

For the year ended December 31, 2024 compared to the year ended December 31, 2023

For the year ended December 31, 2024, fuel revenue decreased by $256.1 million, or 7.1%, compared to the year ended December 31, 2023. The decrease in fuel revenue was attributable primarily to a decrease in the average price of fuel in 2024 compared to 2023 and a decrease in gallons sold, which were partially offset by incremental gallons related to the 2023 Acquisitions, as well as contribution of gallons from ARKO Retail Sites converted to dealer locations in the trailing 12 months period.

For the year ended December 31, 2024, fuel revenue – related party decreased $349.1 million, or 10.5%, compared to the year ended December 31, 2023, resulting primarily from a decrease in the average price of fuel in 2024 as compared to 2023 and a 40.1 million, or 3.8%, decrease in gallons sold, reflecting the challenging macro-economic environment and ARKO Retail Sites converted to dealer locations, which was partially offset by incremental gallons sold relating to ARKO Parent’s acquisitions of retail sites during 2024 and 2023.

For the year ended December 31, 2024, other revenues, net increased $4.4 million, or 12.3%, compared to the year ended December 31, 2023, primarily due to additional revenue from the 2023 Acquisitions and from ARKO Retail Sites that have been converted to dealer locations.

For the year ended December 31, 2024, other revenues, net – related party increased $0.5 million, or 4.4%, compared to the year ended December 31, 2023.

For the year ended December 31, 2024, total operating expenses decreased $600.0 million, or 8.7%, compared to the year ended December 31, 2023. Fuel costs decreased $262.1 million, or 7.6% compared to 2023 and fuel costs – related party decreased $347.1 million, or 10.6%, compared to 2023, both consistent with the reduction in fuel revenues. For the year ended December 31, 2024, site operating expenses including allocated expenses increased $6.4 million, or 8.6%, compared to 2023 primarily due to incremental expenses as a result of the 2023 Acquisitions and expenses from ARKO Retail Sites that have been converted to dealer locations.

For the year ended December 31, 2024, general and administrative expenses including allocated expenses increased $0.9 million, or 2.1%, compared to the year ended December 31, 2023, primarily due to incremental expenses associated with the 2023 Acquisitions and annual wage increases.

For the year ended December 31, 2024, depreciation and amortization expenses including allocated expenses increased $1.9 million, or 4.4%, compared to the year ended December 31, 2023 primarily due to assets acquired in connection with the 2023 Acquisitions as well as assets related to ARKO Retail Sites that have been converted to dealer locations.

For the year ended December 31, 2024, other expenses, net decreased $2.8 million compared to the year ended December 31, 2023 primarily due to lower acquisition costs.

Operating income was $92.0 million for the year ended December 31, 2024 compared to $89.5 million for the year ended December 31, 2023. The increase in operating income was primarily due to incremental income from the 2023 Acquisitions as well as the benefit from ARKO Retail Sites that have been converted to dealer locations in 2024. Reduced fuel contribution at comparable wholesale sites more than offset the increase in fleet fueling fuel contribution at comparable fleet fueling sites.

For the year ended December 31, 2024, interest and other financial expenses, net increased $1.6 million compared to the year ended December 31, 2023 primarily as a result of higher average outstanding debt balances, a higher average interest rate for 2024 and higher interest expenses related to financial liabilities, which was partially offset by $3.4 million recorded as financial income related to the settlement of deferred consideration in connection with the TEG Acquisition.

For the years ended December 31, 2024 and 2023, income tax expense was $15.1 million and $12.9 million, respectively, and our effective tax rate for the years ended December 31, 2024 and 2023 was 27.3% and 23.7%, respectively.

For the years ended December 31, 2024 and 2023, net income attributable to ARKO Petroleum Corp. was $40.2 million and $41.4 million, respectively.

For the years ended December 31, 2024 and 2023, Adjusted EBITDA was $139.2 million and $137.3 million, respectively. Refer to “Use of Non-GAAP Measures” below for discussion of this non-GAAP performance measure and related reconciliation to net income.

Segment Results

Disclosure of Incremental Contributions From Acquisitions

In the discussion of our segment results, we disclose certain information with respect to our acquisitions on an “incremental” basis. For example, incremental fuel gallons sold with respect to recent acquisitions. Incremental amounts or gallons related to such acquisitions reflect only the change (i.e. increase) in the contribution of the acquisitions between the referenced periods in which they were not yet reflected in comparable wholesale sites or comparable fleet fueling sites results.

Wholesale Segment

The table below shows the results of the wholesale segment for the years ended December 31, 2025, 2024 and 2023, together with certain key metrics for the segment.

For the Year Ended December 31,

Revenues:

(in thousands)

Fuel revenue

Other revenues, net

Total revenues

Operating expenses:

Fuel costs

Site operating expenses, including allocated expenses

Total operating expenses

Operating income

Fuel gallons sold – fuel supply locations

Fuel gallons sold – consignment agent locations

Fuel contribution 1  – fuel supply locations

Fuel contribution 1  – consignment agent locations

Fuel margin, cents per gallon 2  – fuel supply locations

Fuel margin, cents per gallon 2  – consignment agent locations

1 Calculated as fuel revenue less fuel costs; excludes the estimated fixed margin or fixed fee paid to the GPMP segment for the cost of fuel.

2 Calculated as fuel contribution divided by fuel gallons sold.

Note: Information disclosed on a “comparable wholesale sites” basis excludes wholesale sites added through the 2023 Acquisitions and ARKO Retail Sites converted to dealer locations, until the first quarter in which these sites had a full quarter of wholesale activity in the prior year. Refer to “ Use of Non-GAAP Measures ” below for discussion of this non-GAAP performance measure.

For the year ended December 31, 2025 compared to the year ended December 31, 2024

Wholesale Revenues

For the year ended December 31, 2025, fuel revenue decreased by $101.4 million, or 3.6%, compared to the year ended December 31, 2024, primarily due to a decrease in the average price of fuel in 2025 as compared to 2024, partially offset by a 39.7 million, or 4.2%, increase in gallons sold. Of total gallons sold, the ARKO Retail Sites that had been converted to dealer locations since the middle of 2024 contributed 79.7 million gallons, which were partially offset by lower volumes at comparable wholesale sites, reflecting the challenging macroeconomic environment.

Wholesale Operating Income

For the year ended December 31, 2025, wholesale operating income increased by $9.3 million compared to the year ended December 31, 2024. Additional operating income from the ARKO Retail Sites that had been converted to dealer locations since the middle of 2024 more than offset reduced operating income at comparable wholesale sites. An increase of $23.4 million in other revenues, net, combined with an increase in fuel contribution of $4.2 million in 2025 compared to 2024, was partially offset by an increase in site operating expenses of $18.3 million in 2025 compared to 2024. These increases were primarily due to the ARKO Retail Sites converted to dealer locations since the middle of 2024.

At fuel supply locations, fuel contribution increased by $4.6 million, and fuel margin per gallon also increased for 2025 compared to 2024, due to $6.9 million of incremental contribution from the ARKO Retail Sites converted to dealer locations, which was partially offset by decreased prompt pay discounts related to lower fuel costs and lower volumes at comparable fuel supply wholesale sites primarily due to the macroeconomic environment and severe weather conditions in January and February 2025 in certain of the markets in which we operate.

At consignment agent locations, fuel contribution decreased by $0.4 million due to decreased prompt pay discounts related to lower fuel costs and lower volumes at comparable wholesale sites, primarily due to the macroeconomic environment and severe weather conditions in January and February 2025 in certain of the markets in which we operate, which was partially offset by the incremental contribution of $2.0 million from the ARKO Retail Sites converted to dealer locations. Fuel margin per gallon increased for 2025 compared to 2024 due to a larger mix of higher performing consignment dealers as compared to the prior year.

For the year ended December 31, 2024 compared to the year ended December 31, 2023

Wholesale Revenues

For the year ended December 31, 2024, fuel revenue decreased $239.5 million, or 7.9%, compared to the year ended December 31, 2023, caused by a 19.9 million, or 2.1%, decrease in gallons sold and a decrease in the average price of fuel in 2024 as compared to 2023. Of total gallons sold, the 2023 Acquisitions contributed approximately 18.4 million incremental gallons, and ARKO Retail Sites that have been converted to dealer locations contributed 10.4 million gallons, which were more than offset by lower volumes at comparable wholesale sites.

For the year ended December 31, 2024, other revenues, net increased $3.3 million or 12.8%, compared to the year ended December 31, 2023, primarily due to additional rental income.

Wholesale Operating Income

For the year ended December 31, 2024, wholesale operating income increased $0.5 million compared to 2023. An increase of approximately $3.3 million in total other revenues, net, was partially offset by a decrease in fuel contribution of approximately $2.6 million in 2024 compared to 2023. At fuel supply locations, fuel contribution decreased by $0.5 million, and fuel margin per gallon remained consistent with 2023, primarily due to decreased prompt pay discounts related to lower fuel costs and lower volumes at comparable wholesale sites, which was partially offset by incremental contribution related to ARKO Retail Sites converted to dealer locations of $0.7 million, and the 2023 Acquisitions. At consignment agent locations, fuel contribution decreased $2.1 million while fuel margin per gallon increased for 2024 compared to 2023, primarily due to incremental contribution of $0.5 million related to ARKO Retail Sites converted to dealer locations, and the 2023 Acquisitions, which was offset by lower rack-to-retail margins and decreased prompt pay discounts related to lower fuel costs.

For the year ended December 31, 2024, site operating expenses remained consistent with those in the year ended December 31, 2023.

Fleet Fueling Segment

The table below shows the results of the fleet fueling segment for the years ended December 31, 2025, 2024 and 2023, together with certain key metrics for the segment.

For the Year Ended December 31,

Revenues:

(in thousands)

Fuel revenue

Other revenues, net

Total revenues

Operating expenses:

Fuel costs

Site operating expenses

Total operating expenses

Operating income

Fuel gallons sold – proprietary cardlock locations

Fuel gallons sold – third-party cardlock locations

Fuel contribution 1  – proprietary cardlock locations

Fuel contribution  1  – third-party cardlock locations

Fuel margin, cents per gallon 2  – proprietary cardlock locations

Fuel margin, cents per gallon  2  – third-party cardlock locations

1 Calculated as fuel revenue less fuel costs; excludes the estimated fixed fee paid to the GPMP segment for the cost of fuel.

2 Calculated as fuel contribution divided by fuel gallons sold.

Note: Comparable fleet fueling sites exclude fleet fueling sites added through the WTG Acquisition, until the first quarter in which these sites had a full quarter of fleet fueling activity in the prior year.

For the year ended December 31, 2025 compared to the year ended December 31, 2024

Fleet Fueling Revenues

For the year ended December 31, 2025, fuel revenue decreased by $40.7 million, or 7.9%, and other revenues, net decreased by $0.2 million, in each case compared to the year ended December 31, 2024. Fuel revenue was negatively impacted by a 6.1 million decrease in gallons sold, or 4.1%, due primarily to movements in crude oil pricing and severe weather conditions in January and

February 2025 that impacted certain of the markets in which we operate, and a decrease in the average price of fuel in 2025 compared to 2024.

Fleet Fueling Operating Income

For the year ended December 31, 2025, fuel contribution increased by $1.4 million compared to the year ended December 31, 2024. At proprietary cardlocks, fuel contribution increased by $0.8 million, and fuel margin per gallon also increased for 2025 compared to 2024, primarily due to favorable diesel margins. At third-party cardlock locations, fuel contribution increased by $0.6 million, and fuel margin per gallon also increased for 2025 compared to 2024, primarily due to the closure of underperforming third-party locations.

For the year ended December 31, 2025, site operating expenses increased by $1.2 million compared to the year ended December 31, 2024, primarily due to higher rent and insurance.

For the year ended December 31, 2024 compared to the year ended December 31, 2023

Fleet Fueling Revenues

For the year ended December 31, 2024, fuel revenue decreased by $15.5 million, or 2.9%, and other revenues, net increased by $1.3 million, compared to the year ended December 31, 2023. Fleet fueling revenues were negatively impacted by a decrease in the average price of fuel in 2024 compared to 2023, which were partially offset by an 8.1 million increase in gallons sold, or 5.7%, primarily resulting from the WTG Acquisition.

Fleet Fueling Operating Income

For the year ended December 31, 2024, fuel contribution increased by $8.4 million compared to the year ended December 31, 2023. At proprietary cardlocks, fuel contribution increased by $7.9 million, and fuel margin per gallon also increased for the year ended December 31, 2024, compared to the year ended December 31, 2023. At third-party cardlock locations, fuel contribution increased $0.5 million, and fuel margin per gallon also increased for 2024 compared to 2023. These changes were primarily due to higher volumes and the cardlocks acquired in the WTG Acquisition.

For the year ended December 31, 2024, site operating expenses increased $2.6 million compared to the year ended December 31, 2023 primarily due to the WTG Acquisition.

GPMP Segment

The table below shows the results of the GPMP segment for the years ended December 31, 2025, 2024 and 2023, together with certain key metrics for the segment.

For the Year Ended December 31,

Revenues:

(in thousands)

Fuel revenue – inter-segment 1

Fuel revenue – related party 1

Fuel revenue – third party customers

Other revenues, net

Other revenues, net – inter-segment  1

Other revenues, net – related party  1

Total revenues

Operating expenses:

Fuel costs – inter-segment

Fuel costs – related party

Fuel costs – third party customers

General and administrative expenses

Depreciation and amortization

Total operating expenses

Other income, net

Operating income

Fuel gallons sold – inter-segment

Fuel gallons sold – related party locations

Fuel gallons sold – third party customers

Fuel contribution 2  – related party locations

Fuel margin, cents per gallon 3  – related party locations

1 Includes the estimated fixed margin or fixed fee paid to the GPMP segment for the cost of fuel.

2 Calculated as fuel revenue less fuel costs.

3 Calculated as fuel contribution divided by fuel gallons sold.

For the year ended December 31, 2025 compared to the year ended December 31, 2024

GPMP Revenues

For the year ended December 31, 2025, fuel revenue – inter-segment decreased by $110.0 million, or 4.2%, compared to the year ended December 31, 2024. The decrease was attributable to a decrease in the average price of fuel for the year ended December 31, 2025 compared to the year ended December 31, 2024 partially offset by an increase in gallons sold related to ARKO Retail Sites that had been converted to dealer locations.

For the year ended December 31, 2025, fuel revenue – related party decreased by $661.8 million, or 22.3%, compared to the year ended December 31, 2024, caused by a decrease in the average price of fuel in the year ended December 31, 2025 compared to the year ended December 31, 2024 and a 158.7 million, or 15.5%, decrease in gallons sold, reflecting the challenging macroeconomic environment and ARKO Retail Sites that had been converted to dealer locations, which was slightly offset by incremental gallons sold relating to ARKO Parent’s acquisition of ARKO Retail Sites during 2024.

For the years ended December 31, 2025 and 2024, other revenues, net were similar. Other revenues, net – inter-segment related to the fixed fee primarily charged to sites in the fleet fueling segment that were not supplied by the GPMP segment (5.0 cents per gallon sold for the three years ended December 31, 2025) were similar for the years ended December 31, 2025 and 2024. Other revenues, net – related party related to the fixed fee charged to certain ARKO Retail Sites that were not supplied by GPMP (5.0 cents per gallon sold for the three years ended December 31, 2025) decreased slightly for the year ended December 31, 2025 compared to the year ended December 31, 2024.

GPMP Operating Income

Fuel contribution decreased by $6.3 million for the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to fewer gallons sold at a fixed margin to both ARKO Retail Sites and the comparable wholesale sites.

For the year ended December 31, 2025, general and administrative expenses decreased by $0.3 million from those in the year ended December 31, 2024, and depreciation and amortization expenses for the year ended December 31, 2025 remained consistent with the year ended December 31, 2024.

For the year ended December 31, 2024 compared to the year ended December 31, 2023

GPMP Revenues

For the year ended December 31, 2024, fuel revenue – inter-segment decreased $240.9 million, or 8.4%, compared to the year ended December 31, 2023. The decrease was attributable to a decrease in gallons sold and a decrease in the average price of fuel for 2024 compared to 2023.

For the year ended December 31, 2024, fuel revenue – related party decreased $349.1 million, or 10.5%, compared to the year ended December 31, 2023, caused by a decrease in the average price of fuel in 2024 as compared to 2023 and a 40.1 million, or 3.8%, decrease in gallons sold, reflecting the challenging macroeconomic environment and ARKO Retail Sites converted to dealer locations, which was partially offset by incremental gallons sold relating to ARKO Parent’s acquisition of ARKO Retail Sites during 2024 and 2023.

For the years ended December 31, 2024 and 2023, other revenues, net were similar. Other revenues, net – inter-segment related to the fixed fee primarily charged to sites in the fleet fueling segment that were not supplied by GPMP (5.0 cents per gallon sold for the three years ended December 31, 2025) and increased slightly for 2024 as compared to 2023. Other revenues, net – related party related to the fixed fee charged to certain ARKO Retail Sites that were not supplied by GPMP (5.0 cents per gallon sold for the three years ended December 31, 2025) and decreased slightly for 2024 as compared to 2023.

GPMP Operating Income

Fuel margin decreased by $2.6 million for the year ended December 31, 2024 compared to the year ended December 31, 2023, primarily due to fewer gallons sold at a fixed margin to both ARKO Parent and the wholesale segment.

For the year ended December 31, 2024, total general and administrative expenses increased slightly from those in the year ended December 31, 2023, and depreciation and amortization expenses for 2024 remained consistent with 2023.

Use of Non-GAAP Measures

We disclose certain measures on a “comparable wholesale sites” or “comparable fleet fueling sites” basis, which are non-GAAP measures. Information disclosed on a “comparable wholesale sites” basis excludes wholesale sites added through the 2023 Acquisitions and ARKO Retail Sites converted to dealer locations until the first quarter in which these sites had a full quarter of wholesale activity in the prior year. Information disclosed on a “comparable fleet fueling sites” basis excludes fleet fueling sites added through the WTG Acquisition until the first quarter in which these sites had a full quarter of fleet fueling activity in the prior year. We believe that this information is useful for our investors, securities analysts, and other interested parties by providing greater comparability regarding our ongoing operating performance. Neither these measures nor those described below should be considered an alternative to measurements presented in accordance with GAAP.

We define EBITDA as net income (including net income attributable to non-controlling interest) before net interest expense, income taxes, depreciation and amortization. Adjusted EBITDA further adjusts EBITDA by excluding the gain or loss on disposal of assets, impairment charges, acquisition costs, share-based compensation expense, other non-cash items, and other unusual or non-recurring charges. Both EBITDA and Adjusted EBITDA are non-GAAP financial measures.

We use EBITDA and Adjusted EBITDA for operational and financial decision-making and believe these measures are useful in evaluating our performance because they eliminate certain items that we do not consider indicators of our operating performance. EBITDA and Adjusted EBITDA are also used by many of our investors, securities analysts, and other interested parties in evaluating our operational and financial performance across reporting periods. We believe that the presentation of EBITDA and Adjusted EBITDA provides useful information to investors by allowing an understanding of key measures that we use internally for operational decision-making, budgeting, evaluating acquisition targets, and assessing our operating performance.

We define Net Debt as the sum of total debt, net, financing leases and financial liabilities, less cash and cash equivalents. Net Debt is used by management to measure the effective level of our indebtedness.

We define the Ratio of Net Debt to Adjusted EBITDA as the ratio derived by dividing Net Debt by Adjusted EBITDA. The Ratio of Net Debt to Adjusted EBITDA is an important measure used by our management to evaluate our access to liquidity, and we believe it provides useful information for investors as a representation of our financial strength by presenting the sustainability of our debt levels and our ability to take on additional debt against Adjusted EBITDA, which is used as an operating performance measure. The Ratio of Net Debt to Adjusted EBITDA is also frequently used by investors and credit rating agencies to analyze our operating performance.

We define Discretionary Cash Flow as net cash provided by operating activities, (i) less changes in operating assets and liabilities, maintenance capital expenditures, charges to allowance for credit losses, and non-cash rent expense, and (ii) plus acquisition costs, amortization of deferred income net of prepaid to related party, and certain other expenses (income). Discretionary Cash Flow will not reflect changes in working capital balances. Discretionary Cash Flow is a liquidity measure we and third parties,

such as industry analysts, investors, lenders, rating agencies and others, use to assess our ability to internally fund our acquisitions, pay dividends, and service or incur additional debt. We believe that the presentation of Discretionary Cash Flow provides useful information to investors, securities analysts, and other interested parties for evaluating our liquidity.

EBITDA, Adjusted EBITDA, Net Debt, the Ratio of Net Debt to Adjusted EBITDA and Discretionary Cash Flow should not be considered as alternatives to any financial measure presented in accordance with GAAP, including net income and net cash provided by operating activities. These non-GAAP measures have limitations as analytical tools and should not be considered in isolation, or as substitutes for the analysis of our results as reported under GAAP. We strongly encourage investors to review our financial statements and publicly filed reports in their entirety and not to rely on any single financial measure.

Because non-GAAP financial measures are not standardized, comparable wholesale sites, comparable fleet fueling sites, EBITDA, Adjusted EBITDA, Net Debt, the Ratio of Net Debt to Adjusted EBITDA and Discretionary Cash Flow, as defined by us, may not be comparable to similarly titled measures reported by other companies. It therefore may not be possible to compare our use of these non-GAAP financial measures with those used by other companies.

The following table contains a reconciliation of (i) net income to EBITDA and Adjusted EBITDA and (ii) net cash provided by operating activities to Discretionary Cash Flow for the years ended December 31, 2025, 2024 and 2023.

For the Year Ended December 31,

(in thousands)

Net income

Interest and other financing expenses, net

Income tax expense

Depreciation and amortization

EBITDA

Acquisition costs (a)

IPO costs (b)

Loss on disposal of assets and impairment charges (c)

Share-based compensation expense (d)

Taxes received (paid) in arrears (e)

Adjustment to contingent consideration (f)

Other (g)

Adjusted EBITDA

Net cash provided by operating activities

Changes in operating assets and liabilities

Maintenance capital expenditures (h)

Acquisition costs (a)

IPO costs (b)

Amortization of deferred income, net of prepaid to related party

Taxes paid (received) in arrears (e)

Charges to allowance for credit losses

Non-cash rent expense (i)

Other (j)

Discretionary Cash Flow

Adjusted EBITDA

Cash received for interest

Cash paid for interest and allocated interest

Cash paid for taxes

Maintenance capital expenditures (h)

Discretionary Cash Flow

Eliminates costs incurred that are directly attributable to business acquisitions and salaries of employees whose primary job function is to execute our acquisition strategy and facilitate integration of acquired operations.

Eliminates one-time costs incurred related to our IPO, which closed on February 13, 2026.

Eliminates the non-cash loss from the sale or disposal of property and equipment, the loss recognized upon the sale of related leased assets and impairment charges on property and equipment and right-of-use assets related to closed and non-performing sites.

Eliminates non-cash share-based compensation expense related to ARKO Parent’s equity incentive program to incentivize, retain, and motivate our employees.

Eliminates the payment (receipt) of historical fuel, franchise and other tax amounts for multiple prior periods.

Eliminates fair value adjustments primarily related to the contingent consideration owed to the seller for the Empire Acquisition (as defined below), which closed in 2020.

Eliminates other unusual or non-recurring items that we do not consider to be meaningful in assessing operating performance.

Historically, ARKO Parent has not distinguished between maintenance capital expenditures, growth capital expenditures, and acquisition capital expenditures (other than with respect to business acquisitions). Maintenance capital expenditures are capital expenditures made to maintain our long-term operating income or operating capacity, while growth and acquisition capital expenditures are capital expenditures that we expect will increase our operating income or operating capacity over the long-term. For the years ended December 31, 2025, 2024 and 2023, we estimated that approximately $6.9 million, $6.2 million and $5.8 million of our capital expenditures were maintenance capital expenditures, respectively, and that $20.6 million, $5.1 million, and $6.2 million of our capital expenditures were growth capital expenditures, respectively.

Non-cash rent expense reflects the extent to which our GAAP rent expense recognized exceeded (or was less than) our cash rent payments. GAAP rent expense varies depending on the terms of our lease portfolio. For newer leases, our rent expense recognized typically exceeds our cash rent payments, whereas, for more mature leases, rent expense recognized is typically less than our cash rent payments.

Includes other unusual or non-recurring items and other amounts primarily related to additional consideration owed to the seller for the Empire Acquisition, which closed in 2020.

The following table contains a reconciliation of total debt, net to Net Debt as of December 31, 2025, as well as the ratio of each of the most directly comparable GAAP measures to Net Debt and Adjusted EBITDA.

As of December 31, 2025

(in thousands)

Total debt, net

Financing leases

Financial liabilities

Cash and cash equivalents

Net Debt

Ratio of total debt, net to net income

Ratio of Net Debt to Adjusted EBITDA

Liquidity and Capital Resources

Our primary sources of liquidity are cash flows from operations, availability under our credit facilities and our cash balances. Our principal liquidity requirements are the financing of current operations, funding capital expenditures (including acquisitions), satisfying our operating and financing lease obligations, and servicing debt. Additionally, we intend to distribute to our stockholders quarterly cash dividends taking into account Discretionary Cash Flow, after appropriate reserves for our working capital needs, investment capital expenditures, debt service and the prudent conduct of our business. Our Discretionary Cash Flow is likely to fluctuate from quarter to quarter, in some cases significantly, primarily as a result of the seasonality of our business operations and purchasing and payment patterns, which change based upon the day of the week. Accordingly, during quarters in which our business operations generate Discretionary Cash Flow in excess of the amount necessary to pay our stated quarterly dividend, we may reserve a portion of the excess to fund cash dividends in future quarters. In quarters in which we do not generate sufficient cash available to fund our stated quarterly cash dividend, we may use sources of cash not included in our calculation of Discretionary Cash Flow, such as net cash provided by financing activities, to pay dividends, subject to the discretion of our Board.

We finance our inventory purchases primarily from customary trade credit aided by relatively rapid inventory turnover, as well as cash generated from operations. Rapid inventory turnover allows us to conduct operations without the need for large amounts of cash and working capital. We largely rely on internally generated cash flows and borrowings for operations, which we believe are sufficient to meet our liquidity needs for the foreseeable future.

Our ability to meet our debt service obligations and other capital requirements, including capital expenditures, as well as the cost of acquisitions, will depend on our future operating performance which, in turn, will be subject to general economic, financial, business, competitive, legislative, regulatory and other conditions, many of which are beyond our control. As a normal part of our business, we will from time to time consider opportunities to repay, redeem, repurchase or refinance our indebtedness, depending on market conditions. Changes in our operating plans, lower than anticipated sales, increased expenses, acquisitions, or other events may cause us to seek additional debt or equity financing in future periods. Additional debt financing could impose increased cash payment obligations, as well as covenants that may restrict our operations. There can be no guarantee that financing will be available on acceptable terms or at all. As of December 31, 2025, all of our debt bears interest at variable rates, which subjects us to interest rate risk and may require that we use more of our cash flow for the payment of interest if prevailing interest rates increase. See also “Quantitative and Qualitative Disclosures about Market Risk—Interest Rate Risk.”

As of December 31, 2025, we were in a strong liquidity position of approximately $434.3 million, consisting of approximately $15.6 million of cash and cash equivalents and $418.7 million of unused availability under our $800 million Capital One Line of Credit (as defined below), which we may elect to increase up to $1.0 billion, subject to obtaining additional financing commitments from current lenders or other banks, and subject to certain other terms. This liquidity position currently provides us with adequate funding to satisfy our contractual and other obligations from our existing cash balances. Our liquidity position increased significantly following the closing of our IPO on February 13, 2026 and the use of the proceeds to repay approximately $184 million of the indebtedness under our Capital One Line of Credit. Additionally, following the underwriters’ exercise of their over-allotment option and our issuance and sale to the of 1,459,112 shares of Class A common stock on March 9, 2026, we used certain of the net proceeds thereof to repay approximately $22.7 million of the indebtedness under our Capital One Line of Credit.

The Board declared a quarterly pro-rated dividend of $0.26 per share of common stock, to be paid on April 21, 2026 to stockholders of record as of April 10, 2026. There can be no assurance that we will continue to pay such dividends or the amounts of such dividends. We currently intend to pay a regular quarterly cash dividend of $0.50 per share to holders of our common stock, or $2.00 per share on an annualized basis. The amount and timing of dividends payable on our common stock are within the sole discretion of our Board, which will determine the amount, timing, and payment of any dividend in its sole discretion taking into account Discretionary Cash Flow, reserves for working capital and investment capital expenditures, debt service, the prudent conduct of our business, and other factors it deems relevant. Our objective is to pay our common stockholders a consistent and growing cash dividend that is sustainable on a long-term basis. Cash dividends paid in respect of our Class A common stock will also be paid in respect of our Class B common stock. As a result, dividends paid on our common stock will be received on a pro rata basis by holders of our Class A common stock and holders of our Class B common stock, which Class B common stock is held indirectly by ARKO Corp.

To date, we have funded capital expenditures primarily through funds generated from operations, funds received from vendors, sale-leaseback transactions, the issuance of debt, existing cash and ARKO Parent’s net investment. Future capital required to finance operations, pay dividends, consummate acquisitions, renovate our sites and add new fleet fueling locations is expected to come from cash on hand, cash generated by operations, availability under lines of credit, and additional long-term debt and equipment leases, as circumstances may dictate. We currently expect that our capital spending program will be primarily focused on maintaining our properties and equipment, renewal of supply agreements with dealers, pursuing new dealer contracts and acquiring additional dealer and cardlock locations, as well as expanding our fleet fueling footprint by building new locations. We do not expect such capital needs to adversely affect liquidity.

Cash Flows for the Years Ended December 31, 2025, 2024 and 2023

Net cash provided by (used in) operating activities, investing activities and financing activities for the years ended December 31, 2025, 2024 and 2023 were as follows:

For the Year Ended December 31,

Net cash provided by (used in):

(in thousands)

Operating activities

Investing activities

Financing activities

Total

Operating Activities

Cash flows provided by operations are our main source of liquidity. We have historically relied primarily on cash provided by operating activities, supplemented as necessary from time to time by borrowings on our credit facilities and other debt or equity

transactions to finance our operations and to fund our capital expenditures. Cash flow provided by operating activities is primarily impacted by our net income and changes in working capital.

For the year ended December 31, 2025, cash flows provided by operating activities were $79.6 million compared to $106.8 million for the year ended December 31, 2024. The decrease was partially due to decreases in working capital as a result of the day of the week on which the year ended in each year and approximately $2.4 million of higher net interest payments, which were partially offset by deferred income received from vendors, lower tax payments of $7.8 million and an increase in Adjusted EBITDA of $4.3 million.

For the year ended December 31, 2024, cash flows provided by operating activities were $106.8 million compared to $58.8 million for the year ended December 31, 2023. The increase was primarily the result of deferred income and dealer deposits received from dealers, incremental vendor incentives received and decreases in working capital, the result of the day of the week in which 2024 ended, and an increase in Adjusted EBITDA of $1.9 million, which were partially offset by approximately $6.5 million of higher net interest payments.

Discretionary Cash Flow

For the years ended December 31, 2025, 2024 and 2023, Discretionary Cash Flow was $88.9 million, $79.9 million and $86.5 million, respectively. Refer to “Use of Non-GAAP Measures” above for discussion of this non-GAAP liquidity measure and related reconciliation to net cash provided by operating activities.

Investing Activities

Cash flows used in investing activities primarily reflect capital expenditures for acquisitions and replacing and maintaining existing facilities and equipment used in the business.

For the year ended December 31, 2025, cash used in investing activities increased by $12.7 million to $22.2 million from $9.4 million for the year ended December 31, 2024. For the year ended December 31, 2025, we utilized $24.8 million for capital expenditures, including the purchase of six fee properties for $6.5 million, fuel dispensers and other investments in our sites.

For the year ended December 31, 2024, cash used in investing activities decreased by $70.2 million to $9.4 million from $79.6 million for the year ended December 31, 2023. For the year ended December 31, 2024, we utilized $11.3 million for capital expenditures, including upgrades to fuel dispensers and other investments in our sites.

Financing Activities

Cash flows from financing activities primarily consist of increases and decreases in the principal amount of our lines of credit and debt as well as net transfers to ARKO Parent.

For the year ended December 31, 2025, financing activities consisted primarily of net receipts of $1.6 million for long-term debt, $3.2 million for additional consideration payments related to the 2020 acquisition of the business of Empire Petroleum Partners, LLC (the “Empire Acquisition”), repayments of $1.4 million for financing leases and $64.2 million of net transfers to ARKO Parent.

For the year ended December 31, 2024, financing activities consisted primarily of net receipts of $40.4 million from long-term debt, which was offset by repayments of $0.2 million for financing leases, $3.4 million for additional consideration payments related to the Empire Acquisition and $108.8 million of net transfers to ARKO Parent. We also made an early payment of $17.2 million, as payment in full and as a discount to the $25.0 million deferred consideration in the TEG Acquisition, which would have been due on March 1, 2025.

Indebtedness

Credit Facilities

Financing Agreements with M&T Bank

ARKO Parent has a credit agreement with M&T Bank, of which, as of December 31, 2025, certain of our subsidiaries were co-borrowers (the “M&T Credit Agreement”). This credit agreement provides a line of credit for up to $45.0 million to purchase equipment on or before September 2026, which may be borrowed in tranches, of which, as of December 31, 2025, $2.5 million outstanding was attributable to the Business. As of December 31, 2025, approximately $32.9 million remained available under ARKO Parent’s equipment line of credit. Additionally, the M&T Credit Agreement originally provided for an aggregate original principal amount of $49.5 million of real estate loans (the “M&T Term Loans”). On May 13, 2025, ARKO Parent entered into an amendment to the M&T Credit Agreement to increase the aggregate original principal amount of the M&T Term Loans thereunder by $34.2 million,

from $49.5 million to $83.7 million. The additional $34.2 million principal amount of the M&T Term Loans, of which $7.6 million original principal amount was attributable to the Business, accrues interest at SOFR plus 2.25%, matures in May 2030 and is payable in monthly installments based on a fifteen-year amortization schedule, with the balance of the loan payable at maturity. As of December 31, 2025, $12.4 million aggregate principal amount of the outstanding M&T Term Loans was attributable to the Business.

Each additional equipment loan tranche under such credit agreement will have a term of up to five years from the date it is advanced, payable in equal monthly payments of principal plus interest of SOFR (as defined in the agreement) plus 2.75%. The M&T Term Loans bear interest at SOFR Adjusted (as defined in the agreement) plus 2.75% to 3.00% (depending on the loan), mature in June 2026 or November 2028 (depending on the loan) and are payable in monthly installments based on a fifteen-year amortization schedule, with the balance of each loan payable at maturity.

In connection with the amendment, the existing M&T Term Loans outstanding as of the date of such amendment began to accrue interest at SOFR plus 2.25%, the interest rate applicable to any M&T Term Loans incurred following the date of such amendment, and the borrowings under the M&T line of credit for purchases of equipment began to accrue interest, at ARKO Parent’s discretion, at either a fixed rate based on M&T Bank’s five-year cost of funds as of the applicable date of each tranche plus 2.25% or a floating rate at SOFR plus 2.25%.

Prior to our IPO, the M&T Term Loans were secured by the real property of 78 sites acquired with the proceeds of such loans and certain other properties, including real property of 21 of 22 sites that ARKO Parent acquired in the second quarter of 2025 for aggregate consideration of $22.4 million, of which 12 sites were attributable to the Business as of December 31, 2025. The equipment loans are secured by the equipment acquired with the proceeds of such loans.

In connection with the consummation of our IPO, on February 11, 2026, the M&T Credit Agreement was amended to remove the Company’s subsidiaries as borrowers or guarantors thereunder, and the Company’s assets that previously served as collateral under the M&T Credit Agreement were released from M&T’s security interest.

ARKO Intercompany Notes

On February 13, 2026, we entered into subordinated, unsecured promissory notes (the “ARKO Parent Intercompany Notes”) with subsidiaries of ARKO Parent in an aggregate principal amount of $14.9 million, which equaled the portion of the debt under the M&T Credit Agreement attributable to the Business. The material terms of the ARKO Parent Intercompany Notes mirror those contained in the M&T Credit Agreement; provided that the ARKO Parent Intercompany Notes have a 15-year term instead of the five-year term. The ARKO Parent Intercompany Notes are intended to reflect the economics of, and align our payment obligations with, the portion of the indebtedness outstanding under the M&T Credit Agreement that is attributable to the Business.

Financing Agreement with PNC Bank, National Association (“PNC”)

ARKO Parent and certain subsidiaries (including certain of our subsidiaries as co-borrowers) have financing arrangements with PNC that provide secured revolving credit facilities for purposes of financing working capital. The calculation of the availability under the credit agreements governing such facilities is determined monthly subject to terms and limitations as set forth in the applicable credit agreements, taking into account the balances of receivables, inventory and letters of credit, among other things. PNC has a first priority lien on receivables, inventory and rights in bank accounts (other than assets that cannot be pledged due to regulatory or contractual obligations). Prior to our IPO, ARKO Parent maintained a single secured revolving credit facility with PNC (the “ARKO Parent Line of Credit” and the credit agreement related thereto, the “ARKO Parent PNC Credit Agreement”), and as of December 31, 2025, there were no borrowings thereunder.

In connection with the consummation of our IPO, the ARKO Parent Credit Agreement was amended and restated to, among other things, remove the Company’s subsidiaries as co-borrowers from the ARKO Parent PNC Credit Agreement. Concurrently, certain of our subsidiaries entered into a separate amended and restated credit agreement with PNC (the “PNC Credit Agreement”) providing for a secured revolving credit facility (the “PNC Line of Credit”) with substantially similar terms as those under the ARKO Parent PNC Line of Credit; provided that the aggregate principal amount available under the ARKO Parent PNC Line of Credit is up to $56 million, and the PNC Line of Credit is up to $84 million, for total aggregate availability under the ARKO Parent PNC Line of Credit prior to our IPO. The PNC Credit Agreement, among other carveouts, permits distributions to the Company for purposes of making dividends provided that no event of default shall have occurred thereunder and the borrowers have “Undrawn Availability” and “Average Undrawn Availability” (in each case, as defined in such agreement) of not less than 20% of the Maximum Revolving Advance Amount (as defined in such agreement). The maturity date for the PNC Line of Credit is the earliest of: (i) February 13, 2031, (ii) the date that is six months prior to the maturity date of the Senior Notes (as defined below) or any permitted refinancing thereof, subject to certain conditions, and (iii) the date that is six months prior to the maturity date of the Capital One Line of Credit.

Under the PNC Line of Credit, for revolving advances that are Term SOFR Loans, interest accrues at SOFR Adjusted plus Term SOFR (as defined in the agreement) plus 1.25% to 1.75%; and for revolving advances that are domestic rate loans, interest accrues at the Alternate Base Rate (as defined in the agreement) plus 0% to 0.5%.

The PNC Line of Credit contains customary restrictive covenants and events of default.

Financing Agreement with a Syndicate of Banks Led by Capital One, National Association (“Capital One”)

GPMP has a revolving credit facility with a syndicate of banks led by Capital One, National Association, in an aggregate principal amount of up to $800 million (the “Capital One Line of Credit”). At GPMP’s request, the Capital One Line of Credit can be increased up to $1.0 billion, subject to obtaining additional financing commitments from current lenders or from other banks, and subject to certain terms as detailed in the Capital One Line of Credit. The Capital One Line of Credit is available for general business purposes, including working capital, capital expenditures and permitted acquisitions.

The Capital One Line of Credit matures on May 5, 2028. As of December 31, 2025, approximately $380.8 million was drawn on the Capital One Line of Credit, $0.5 million of letters of credit were outstanding under the Capital One Line of Credit and approximately $418.7 million was available thereunder.

The Capital One Line of Credit bears interest, as elected by GPMP at: (a) Adjusted Term SOFR (as defined in the agreement) plus a margin of 2.25% to 3.25% or (b) a rate per annum equal to the alternate base rate (as defined in the agreement) plus a margin of 1.25% to 2.25%. The margin is determined according to a formula in the Capital One Line of Credit that depends on GPMP’s leverage.

On January 13, 2026, GPMP entered into an amendment to the Capital One Line of Credit, and $206.7 million of the net proceeds from our IPO were used to repay the indebtedness under the Capital One Line of Credit. Additionally, the Company and certain of its subsidiaries entered into certain pledge and security agreements whereby the Capital One Line of Credit is secured by GPM Empire LLC’s interest in, and proceeds from, the Company’s agreements with ARKO Parent and the Company’s fuel supply agreements with certain of its fuel supply partners and a pledge of the Company’s equity interests in GPMP.

The Capital One Line of Credit requires GPMP to maintain certain financial covenants, including a leverage ratio and an interest coverage expense ratio. The Capital One Line of Credit permits GPMP to use proceeds from loans under such credit facility of up to $18 million per fiscal year and $25 million in the aggregate to pay dividends; however, such facility limits GPMP’s ability to pay dividends to the Company to the extent of its available cash, which is generally the amount of cash and cash equivalents of GPMP and its subsidiaries less certain cash reserves, as determined by GPM Petroleum GP, LLC, GPMP’s general partner.

Guarantee of ARKO Parent Senior Notes

As of December 31, 2025, ARKO Parent had outstanding $450.0 million aggregate principal amount of 5.125% Senior Notes due 2029 (the “Senior Notes”). Issued in October 2021, the Senior Notes are guaranteed, jointly and severally on an unsecured senior basis, by certain of ARKO Parent’s wholly owned domestic subsidiaries, including us and certain of our subsidiaries (the “Guarantors”); however, neither GPMP nor any of its subsidiaries is a Guarantor.

The indenture governing the Senior Notes (the “Indenture”) provides for customary events of default which include (subject in certain cases to customary grace and cure periods), among others: nonpayment of principal or interest; breach of covenants or other agreements in the Indenture; defaults in failure to pay certain other indebtedness; and certain events of bankruptcy or insolvency. Generally, if an event of default occurs and is continuing under the Indenture, the trustee thereunder (the “Trustee”) or the holders of at least 25% in aggregate principal amount of the Senior Notes then outstanding may declare the principal of, premium, if any, and accrued interest on all the Senior Notes immediately due and payable. The Guarantors have unconditionally and irrevocably guaranteed, jointly and severally, on a senior unsecured basis, (a) the full and punctual payment of principal of and interest on the Senior Notes when due, whether at maturity, by acceleration, by redemption or otherwise, and all other monetary obligations of ARKO Parent under the Indenture and the Senior Notes and (b) the full and punctual performance within applicable grace periods of all other obligations of ARKO Parent under the Indenture and the Senior Notes (collectively, the “Guaranteed Obligations”).

Upon the failure of ARKO Parent to pay the principal of, or interest on, any of its obligations under the Senior Notes when and as the same become due, whether at maturity, by acceleration, by redemption or otherwise, each Guarantor, upon receipt of written demand by the Trustee, must pay, or cause to be paid, in cash, to the holders of the Senior Notes or the Trustee an amount equal to the sum of (A) the unpaid amount of such Guaranteed Obligations, (B) accrued and unpaid interest on such Guaranteed Obligations (but only to the extent not prohibited by law) and (C) all other monetary Guaranteed Obligations of ARKO Parent to the holders of the Senior Notes and the Trustee. Pursuant to the Indenture, each Guarantor is entitled to contribution from all other Guarantors based on the respective net assets of all the Guarantors at the time of such payment.

The guarantees of the ARKO Parent Senior Notes by us and certain of our subsidiaries represent an off-balance sheet obligation. We believe that the likelihood of the Guarantors, including us, being required to make payments under their respective guarantees is remote based on ARKO Parent’s current financial condition and anticipated financial performance. However, if ARKO Parent’s financial condition deteriorates, then the possibility of the Guarantors being called upon to fulfill their obligations under the Indenture would increase.

Critical Accounting Estimates

The preparation of financial statements and related disclosures in conformity with GAAP and the Company’s discussion and analysis of its financial condition and operating results require the Company’s management to make judgments, assumptions and estimates that affect the amounts reported. Note 2, “Summary of Significant Accounting Policies,” of the combined financial statements describes the significant accounting policies and methods used in the preparation of the Company’s combined financial statements. Management bases its estimates on historical experience and on various other assumptions it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. We believe the following critical accounting estimates affect our more significant judgments and estimates used in the preparation of our combined financial statements.

Application of ASC 842, Leases (“ASC 842”)

The lease liabilities and right-of-use assets are significantly impacted by the following:

Our determination of whether it is reasonably certain that an extension option will be exercised.

Our determination of whether it is reasonably certain a purchase option will be exercised.

Some of the lease agreements include an increase in the consumer price index coupled with a multiplier and a percentage increase cap effectively assures the cap will be reached each year. We determine, based on past experience and consumer price index increase expectations, if these types of variable payments are in-substance fixed payments, in which case such payments are included in the lease payments and measurement of the lease liabilities.

The discount rates used in the calculations of the right-of-use assets and lease liabilities are based on our incremental borrowing rates and are primarily affected by economic environment, differences in the duration of each lease and the nature of the leased asset.

Environmental provision and reimbursement assets

We estimate the anticipated environmental costs with respect to contamination arising from the operation of gasoline marketing operations and the use of aboveground and underground storage tanks as well as the costs of other exposures and recognize a liability when these losses are anticipated and can be reasonably estimated. Reimbursement for these expenses from various state underground storage tank trust funds or from insurance companies is recognized as an asset and included in other current assets or non-current assets, as appropriate. The scope of the reimbursement asset and liability is estimated by a third-party at least twice a year and adjustments are made according to past experience, changing conditions and changes in governmental policies.

Liability for dismantling and removing aboveground and underground storage tanks and restoring the site on which the storage tanks are located

The liability is based on our estimates with respect to the external costs which will be necessary to remove the aboveground and underground storage tanks in the future, regulatory requirements, discount rate and an estimate of the length of the useful life of the storage tanks.

Property and equipment and amortizable intangible assets

We evaluate property and equipment and amortizable intangible assets for impairment when facts and circumstances indicate that the carrying values of such assets may not be recoverable. When evaluating for impairment, we first compare the carrying value of the asset to the asset’s estimated future undiscounted cash flows. If the estimated undiscounted future cash flows are less than the carrying value of the asset, we determine if we have an impairment loss by comparing the carrying value of the asset to the asset's estimated fair value and recognize an impairment charge when the asset’s carrying value exceeds its estimated fair value. The adjusted carrying amount of the asset becomes its new cost basis and is depreciated over the asset’s remaining useful life.

Deferred tax assets

We account for income taxes and the related accounts in accordance with FASB ASC Topic 740, Income Taxes (“ASC 740”). Deferred tax liabilities and assets are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted rates expected to be in effect during the year in which the differences reverse. Deferred tax assets are recognized for future tax benefits and credit carryforwards to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. We periodically assess the likelihood that we will be able to recover our deferred tax assets and reflect any changes in estimates in the valuation allowance. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all, of the deferred tax assets will not be realized.

We are required to make judgments, estimates and assumptions to establish the amount of deferred tax assets to be recognized based on timing differences, the expected taxable income and its sources and the tax planning strategy.