X – CDS 1,108bps, Base Case iCDS 204bps, Negative Case iCDS 557bps, 2025 12.000% Bond YTW of 8.578%, iYTW of 2.358%, Caa1 Rating from Moody’s, XO (equivalent to Baa3) Rating from Valens, High Refinancing Need

• Credit markets are grossly overstating X’s credit risk with a cash bond YTW of 8.578% and a CDS of 1,108bps, relative to an Intrinsic YTW of 2.358% and an Intrinsic CDS of 204bps. Meanwhile, Moody’s is materially overstating the firm’s fundamental credit risk, with its extremely speculative Caa1 credit rating seven notches below Valens’ XO (Baa3) credit rating
• Incentives Dictate Behavior™ analysis highlights X’s compensation framework incentivizes management to improve all three value drivers: sales, margins, and asset utilization, which should drive Uniform ROA improvement and lead to increased cash flows available for servicing obligations going forward. Moreover, most management members are not well-compensated in a change-in-control, indicating they are not incentivized to pursue a sale or accept a buyout of the firm, reducing event risk