Southland (SLND) - 2025 Q2 - Quarterly Report

PART I – Financial Information This section presents Southland Holdings, Inc.'s unaudited financial statements and management's analysis of operations ITEM 1. Financial Statements This section presents Southland Holdings, Inc.'s unaudited condensed consolidated financial statements and related notes for the specified periods Condensed Consolidated Balance Sheets (unaudited) This section provides the unaudited condensed consolidated balance sheets for Southland Holdings, Inc. | (Amounts in millions) | June 30, 2025 | December 31, 2024 | | :--------------------- | :------------ | :---------------- | | Total assets | $ 1,185.27 | $ 1,203.65 | | Total liabilities | $ 1,019.80 | $ 1,028.24 | | Total equity | $ 165.47 | $ 175.41 | - Total assets decreased by $18.38 million from December 31, 2024, to June 30, 2025, while total liabilities decreased by $8.44 million and total equity decreased by $9.94 million[17] Condensed Consolidated Statements of Operations (unaudited) This section presents the unaudited condensed consolidated statements of operations, detailing revenue, gross profit, and net loss | (Amounts in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $ 215.38 | $ 251.51 | $ 454.87 | $ 539.61 | | Gross profit (loss) | $ 13.36 | $ (40.02) | $ 34.84 | $ (19.60) | | Operating income (loss)| $ (0.21) | $ (55.70) | $ 4.81 | $ (49.68) | | Net loss | $ (9.89) | $ (45.36) | $ (12.68) | $ (44.83) | | Net loss attributable to Southland Stockholders | $ (10.31) | $ (46.08) | $ (14.86) | $ (46.48) | | Basic EPS | $ (0.19) | $ (0.96) | $ (0.28) | $ (0.97) | - For the three months ended June 30, 2025, revenue decreased by 14.4% YoY, while gross profit significantly improved from a loss of $40.02 million to a profit of $13.36 million. Net loss attributable to Southland Stockholders decreased by 77.6% YoY[18] - For the six months ended June 30, 2025, revenue decreased by 15.7% YoY, while gross profit improved from a loss of $19.60 million to a profit of $34.84 million. Net loss attributable to Southland Stockholders decreased by 68.1% YoY[18] Condensed Consolidated Statements of Comprehensive Loss (unaudited) This section presents the unaudited condensed consolidated statements of comprehensive loss, including foreign currency adjustments | (Amounts in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss | $ (9.89) | $ (45.36) | $ (12.68) | $ (44.83) | | Foreign currency translation adjustment, net of tax | $ 2.48 | $ (0.70) | $ 2.16 | $ (1.28) | | Comprehensive loss, net of tax | $ (7.41) | $ (46.05) | $ (10.51) | $ (46.11) | | Comprehensive loss attributable to Southland Stockholders | $ (8.23) | $ (46.67) | $ (13.11) | $ (47.45) | - The comprehensive loss attributable to Southland Stockholders significantly decreased from $(46.67) million in Q2 2024 to $(8.23) million in Q2 2025, largely due to a positive foreign currency translation adjustment[21] Condensed Consolidated Statements of Equity (unaudited) This section details the unaudited condensed consolidated statements of equity, including common stock and accumulated deficit | (Amounts in millions) | Balance as of Dec 31, 2024 | Balance as of June 30, 2025 | | :--------------------- | :------------------------- | :-------------------------- | | Common Stock (shares) | 53,936,411 | 54,113,036 | | Additional Paid-In Capital | $ 292.17 | $ 292.74 | | Accumulated Deficit | $ (124.62) | $ (139.48) | | Total Equity | $ 175.41 | $ 165.47 | - Total equity decreased by $9.94 million from December 31, 2024, to June 30, 2025, primarily due to an increase in accumulated deficit, partially offset by an increase in additional paid-in capital[23] - Common stock shares outstanding increased from 53,936,411 to 54,113,036 during the six months ended June 30, 2025, mainly due to the issuance of RSUs[23] Condensed Consolidated Statements of Cash Flows (unaudited) This section presents the unaudited condensed consolidated statements of cash flows, categorizing activities into operating, investing, and financing | (Amounts in millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $ 1.00 | $ 17.53 | | Net cash provided by investing activities | $ 0.76 | $ 2.98 | | Net cash used in financing activities | $ (26.10) | $ (15.10) | | Net increase (decrease) in cash and cash equivalents and restricted cash | $ (24.27) | $ 5.35 | - Net cash provided by operating activities significantly decreased from $17.53 million in H1 2024 to $1.00 million in H1 2025. Net cash used in financing activities increased from $15.10 million to $26.10 million in the same period[27] - The company experienced a net decrease in cash and cash equivalents and restricted cash of $24.27 million in H1 2025, compared to a net increase of $5.35 million in H1 2024[27] Notes to Condensed Consolidated Financial Statements (Unaudited) This section provides detailed notes explaining the accounting policies and specific financial statement items Note 1. Description of Business This note describes Southland Holdings, Inc.'s core business activities and recent corporate transactions - Southland Holdings, Inc. is a diverse leader in specialty infrastructure construction, operating through subsidiaries like Johnson Bros. Corporation and American Bridge Holding Company, focusing on bridges, tunnels, transportation, marine, steel structures, water and wastewater treatment, and water pipelines[29][30] - The company completed a reverse recapitalization business combination with Legato Merger Corp. II on February 14, 2023, with Southland LLC as the accounting acquirer[32] Note 2. Basis of Presentation This note outlines the accounting principles and standards used in preparing the financial statements - The unaudited condensed consolidated financial statements are prepared in conformity with U.S. GAAP and SEC interim financial reporting rules, with certain information condensed or omitted[36][37] - The company adopted ASU 2023-05 (Business Combinations-Joint Venture Formations) in Q1 2025 and ASU 2023-07 (Segment Reporting) in 2025, neither of which had a material impact on its consolidated financial statements[51][52] - The company accounts for warrants as equity-classified instruments based on specific terms and applicable authoritative guidance (ASC 480 and ASC 815)[57][59] Note 3. Fair Value of Investments This note details the fair value measurements of the company's investments, particularly private equity | (Amounts in millions) | As of June 30, 2025 | As of December 31, 2024 | | :--------------------- | :------------------ | :---------------------- | | Private equity | $ 2.58 | $ 2.70 | | Total noncurrent | $ 2.58 | $ 2.70 | - All private equity investments are classified as Level 3 in the fair value hierarchy, indicating significant unobservable inputs[60] Note 4. Revenue This note explains the company's revenue recognition policies and provides a breakdown by segment - Revenue is recognized over time using the input method (percentage of cost incurred to date) for firm fixed-price and fixed-price per unit contracts, with most contracts having a single performance obligation[61][62] - Adjustments in contract estimates resulted in a decrease in gross profit of $13.4 million and $26.7 million for the three and six months ended June 30, 2025, respectively, a significant improvement compared to decreases of $83.5 million and $108.5 million in the prior year periods[68] Segment Revenue | (Amounts in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Civil Revenue | $ 81.53 (37.9%) | $ 79.37 (31.6%) | $ 184.45 (40.5%) | $ 163.64 (30.3%) | | Transportation Revenue | $ 133.85 (62.1%) | $ 172.14 (68.4%) | $ 270.42 (59.5%) | $ 375.97 (69.7%) | | Total Revenue | $ 215.38 (100.0%) | $ 251.51 (100.0%) | $ 454.87 (100.0%) | $ 539.61 (100.0%) | Segment Gross Profit (Loss) | (Amounts in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Civil Gross Profit | $ 14.61 (17.9%) | $ 9.16 (11.5%) | $ 37.24 (20.2%) | $ 27.03 (16.5%) | | Transportation Gross Profit (Loss) | $ (1.24) (0.9%) | $ (49.18) (28.6%) | $ (2.39) (0.9%) | $ (46.63) (12.4%) | | Total Gross Profit (Loss) | $ 13.36 (6.2%) | $ (40.02) (15.9%) | $ 34.84 (7.7%) | $ (19.60) (3.6%) | Note 5. Debt This note provides details on the company's debt instruments, including secured notes and mortgage notes | (Amounts in millions) | June 30, 2025 | December 31, 2024 | | :--------------------- | :------------ | :---------------- | | Secured notes | $ 284.15 | $ 306.22 | | Mortgage notes | $ 0.35 | $ 0.39 | | Total debt, net | $ 278.62 | $ 300.15 | | Current portion | $ (48.90) | $ (44.53) | | Long-term debt | $ 229.73 | $ 255.63 | - The weighted average interest rate on total debt outstanding slightly decreased from 9.43% as of December 31, 2024, to 9.39% as of June 30, 2025[80] - The company entered into a new $160.0 million secured term loan facility (Credit Facility) on September 30, 2024, replacing the previous revolving credit facility, with a maturity date of September 30, 2028[82][83] - As of June 30, 2025, $17.3 million was available under the Delayed Draw facility, and the company was in compliance with all Credit Agreement covenants[84][90] Note 6. Commitments and Contingencies This note outlines the company's legal proceedings, self-insurance programs, and other contingent liabilities - The company is involved in various legal proceedings, including a significant claim against the City of Charlotte for over $115 million related to the CityLYNX Gold Line Phase 2 project, alleging numerous changes and interferences[93][99][102] - The aggregate range of possible loss related to reasonably possible matters and amounts in excess of accrued losses for probable contingencies was immaterial as of June 30, 2025, and December 31, 2024[97] - Southland is self-insured up to certain limits for workers' compensation, general liability, auto liability, and health insurance, maintaining accruals based on third-party data and claims history[104] Note 7. Income Taxes This note discusses the company's effective tax rates, valuation allowances, and the impact of recent tax legislation | Period | Effective Tax Rate (2025) | Effective Tax Rate (2024) | | :--------------------- | :------------------------ | :------------------------ | | Three Months Ended June 30 | 0.6% | 26.0% | | Six Months Ended June 30 | 2.9% | 25.9% | - The effective tax rate for the three and six months ended June 30, 2025, was significantly lower than the prior year, primarily due to state income taxes, federal tax credits, valuation allowances against certain deferred tax assets, and foreign income inclusion through GILTI[106] - The company maintains valuation allowances of $2.9 million for certain U.S. subsidiaries, $7.8 million for Canadian subsidiaries, and $16.6 million for United Kingdom operations against net deferred tax assets due to uncertainty of utilization[107][108][109] - The recently signed 'One Big Beautiful Bill Act' is expected to decrease the time needed to utilize current net deferred tax assets due to favorable changes in business interest expense limitation and R&D capitalization[110] Note 8. Remaining Unsatisfied Performance Obligations This note details the company's remaining unsatisfied performance obligations and their expected revenue recognition timeline - As of June 30, 2025, Southland had $2.3 billion in Remaining Unsatisfied Performance Obligations (RUPO), with approximately 41% expected to be recognized as revenue in the next twelve months[114] - RUPO includes unearned revenue and awarded but not started contracts, primarily consisting of fixed-price contracts with government customers[112][113] Note 9. Cost and Estimated Earnings on Uncompleted Contracts This note presents contract assets, liabilities, and unresolved contract modifications related to uncompleted contracts | (Amounts in millions) | June 30, 2025 | December 31, 2024 | | :--------------------- | :------------ | :---------------- | | Contract assets | $ 500.52 | $ 483.18 | | Contract liabilities | $ (250.94) | $ (249.71) | | Net contract position | $ 249.58 | $ 233.48 | - The company recorded $486.0 million in Unresolved Contract Modifications as of June 30, 2025, an increase from $469.8 million as of December 31, 2024, representing additional costs and profits believed to be recoverable[115] - Contract liabilities of $175.1 million were recognized as revenue during the six months ended June 30, 2025, compared to $123.0 million in the prior year period[116] Note 10. Noncontrolling Interests Holders This note identifies the company's controlling interests in joint ventures and partnerships - Southland holds controlling interests in several joint ventures and partnerships, including 84.7% in Oscar Renda Contracting, Inc. and 70.0% in the Southland Astaldi joint venture[117][118] - The Southland Technicore Mole joint venture was dissolved in November 2024, reducing the company's interest to 0% from 65% in the prior year[118] Note 11. Related Party Transactions This note discloses transactions with related parties, including subcontractor costs and real estate deals - Cost of construction related to a subcontractor with minority employee ownership increased to $0.7 million for Q2 2025 (from $0.4 million in Q2 2024) and $1.6 million for H1 2025 (from $1.5 million in H1 2024)[121] - In July 2024, the company closed a $42.5 million real estate sale-leaseback transaction where the CEO and co-COO hold a combined 25% indirect minority interest in the purchasing entity[123] Note 12. Share Based Compensation This note details the activity and unrecognized compensation cost for the company's share-based awards RSU Activity | RSU Activity (shares) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :----------------------------- | :----------------------------- | | Outstanding, beginning balance | 599,547 | 173,333 | | Granted | 582,868 | 681,310 | | Vested | (176,525) | (133,704) | | Forfeited | (217,759) | — | | Canceled | (38,814) | (41,568) | | Outstanding, ending balance | 749,317 | 679,371 | PSU Activity | PSU Activity (shares) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :----------------------------- | :----------------------------- | | Outstanding, beginning balance | 304,880 | — | | Granted | — | 304,880 | | Forfeited | (131,190) | — | | Outstanding, ending balance | 173,690 | 304,880 | - Total unrecognized compensation cost as of June 30, 2025, was $3.4 million, to be recognized over a weighted-average period of 1.5 years[128] Note 13. Loss per Share This note presents the basic and diluted loss per share calculations and the treatment of dilutive securities | (Amounts in millions, except shares and per share amounts) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss attributable to common stockholders, basic and diluted | $ (10.31) | $ (46.08) | $ (14.86) | $ (46.48) | | Weighted average common shares outstanding — basic | 54,008,088 | 48,030,951 | 53,985,325 | 47,978,012 | | Net loss per share — basic | $ (0.19) | $ (0.96) | $ (0.28) | $ (0.97) | - Dilutive securities (warrants and unvested RSUs) were excluded from diluted EPS calculations for both periods as their inclusion would have been antidilutive due to the net loss[129] ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's analysis of Southland Holdings, Inc.'s financial condition and operational results for the reported periods Overview This section provides a general overview of Southland Holdings, Inc.'s business and operational scope - Southland Holdings, Inc. is a diverse leader in specialty infrastructure construction, with a history dating back to 1900, specializing in bridges, tunnels, transportation, marine, steel structures, water and wastewater treatment, and water pipelines[133] - The company operates through six primary subsidiaries, including Johnson Bros. Corporation and American Bridge Company, with projects spanning North America[134] Key Factors Affecting Results of Operations This section discusses the primary internal and external factors influencing the company's operational performance - The company operates in two reportable segments: Civil (water pipeline, treatment plants, tunneling) and Transportation (bridges, roadways, marine, specialty structures), both with positive future outlooks and new opportunities[135][136][137] - Competition in the construction industry is high, but Southland leverages its equipment ownership, ability to self-perform across disciplines, experience, reputation, and technical expertise for complex projects[138][142] - Increased demand for specialty construction projects is anticipated due to economic stimulus spending, including the Infrastructure Investment and Jobs Act[141] - The company discontinued certain types of projects in its Materials & Paving (M&P) business line within the Transportation segment in Q2 2023, selling related assets to reallocate resources to core operations[149] Materials & Paving Contribution | (Amounts in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $ 21.70 | $ 8.90 | $ 39.80 | $ 47.50 | | Gross Loss | $ (3.80) | $ (46.80) | $ (12.90) | $ (57.10) | Results of Operations This section analyzes the company's financial performance, including revenue, gross profit, and net loss, for the reported periods Three Months Ended June 30, 2025 vs. 2024 | (Amounts in millions) | June 30, 2025 | June 30, 2024 | Change ($) | Change (%) | | :--------------------- | :------------ | :------------ | :--------- | :--------- | | Revenue | $ 215.38 | $ 251.51 | $ (36.13) | (14.4)% | | Cost of construction | $ 202.02 | $ 291.53 | $ (89.52) | (30.7)% | | Gross profit (loss) | $ 13.36 | $ (40.02) | $ 53.39 | 133.4% | | SG&A expenses | $ 13.57 | $ 15.68 | $ (2.11) | (13.4)% | | Operating loss | $ (0.21) | $ (55.70) | $ 55.49 | 99.6% | | Interest expense | $ (9.98) | $ (6.72) | $ (3.26) | 48.6% | | Net loss | $ (9.89) | $ (45.36) | $ 35.47 | 78.2% | Six Months Ended June 30, 2025 vs. 2024 | (Amounts in millions) | June 30, 2025 | June 30, 2024 | Change ($) | Change (%) | | :--------------------- | :------------ | :------------ | :--------- | :--------- | | Revenue | $ 454.87 | $ 539.61 | $ (84.74) | (15.7)% | | Cost of construction | $ 420.03 | $ 559.21 | $ (139.19) | (24.9)% | | Gross profit (loss) | $ 34.84 | $ (19.60) | $ 54.44 | 277.8% | | SG&A expenses | $ 30.04 | $ 30.07 | $ (0.04) | (0.1)% | | Operating income (loss)| $ 4.81 | $ (49.68) | $ 54.48 | 109.7% | | Interest expense | $ (18.86) | $ (12.38) | $ (6.48) | 52.4% | | Net loss | $ (12.68) | $ (44.83) | $ 32.15 | 71.7% | - The significant improvement in gross profit and operating results for both periods is primarily due to the absence of certain prior year net unfavorable adjustments, particularly in the Transportation segment and related to the M&P business line exit[154][162] - Interest expense increased substantially due to higher interest rates on external borrowings, increased amortization of deferred financing costs, and interest related to a real estate transaction[156][164] Segment Results This section provides a detailed breakdown of revenue and gross profit performance by the Civil and Transportation segments Segment Revenue (Three Months Ended June 30) | Segment | 2025 Revenue ($ millions) | 2025 % of Total | 2024 Revenue ($ millions) | 2024 % of Total | | :------------- | :------------------------ | :-------------- | :------------------------ | :-------------- | | Civil | 81.53 | 37.9% | 79.37 | 31.6% | | Transportation | 133.85 | 62.1% | 172.14 | 68.4% | | Total | 215.38 | 100.0% | 251.51 | 100.0% | Segment Gross Profit (Loss) (Three Months Ended June 30) | Segment | 2025 Gross Profit ($ millions) | 2025 % of Segment Revenue | 2024 Gross Profit (Loss) ($ millions) | 2024 % of Segment Revenue | | :------------- | :----------------------------- | :------------------------ | :------------------------------------ | :------------------------ | | Civil | 14.61 | 17.9% | 9.16 | 11.5% | | Transportation | (1.24) | (0.9)% | (49.18) | (28.6)% | | Total | 13.36 | 6.2% | (40.02) | (15.9)% | - Civil segment revenue increased by 2.7% in Q2 2025, driven by new water pipeline and facility projects, while its gross profit margin improved from 11.5% to 17.9%[168][169] - Transportation segment revenue decreased by 22.2% in Q2 2025 due to projects nearing completion, but its gross loss significantly decreased from $49.2 million to $1.2 million, primarily due to the absence of prior year unfavorable adjustments in the M&P business line[170][171] Key Business Metrics This section presents key non-GAAP financial metrics, including EBITDA and backlog, to assess operational performance EBITDA Reconciliation | (Amounts in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss attributable to Southland Stockholders | $ (10.31) | $ (46.08) | $ (14.86) | $ (46.48) | | Depreciation and amortization | 5.38 | 5.57 | 11.90 | 11.15 | | Income tax benefit | (0.06) | (15.96) | (0.37) | (15.65) | | Interest expense | 9.98 | 6.72 | 18.86 | 12.38 | | Interest income | (0.80) | (0.18) | (1.25) | (0.36) | | EBITDA | 4.19 | (49.92) | 14.27 | (38.97) | - EBITDA significantly improved from a loss of $49.92 million in Q2 2024 to a profit of $4.19 million in Q2 2025, and from a loss of $38.97 million in H1 2024 to a profit of $14.27 million in H1 2025[181] Backlog by Segment (June 30, 2025) | Segment | Balance December 31, 2024 ($ millions) | New contracts, change orders, and adjustments ($ millions) | Less: contract revenue recognized in 2025 ($ millions) | Balance June 30, 2025 ($ millions) | | :------------- | :------------------------------------- | :-------------------------------------------------------- | :----------------------------------------------------- | :--------------------------------- | | Civil | 961.21 | 179.51 | (183.08) | 957.64 | | Transportation | 1,611.71 | 23.75 | (271.79) | 1,363.66 | | Total | 2,572.91 | 203.26 | (454.87) | 2,321.30 | - Total backlog decreased from $2.57 billion as of December 31, 2024, to $2.32 billion as of June 30, 2025, with the Transportation segment experiencing a larger reduction[183] Liquidity, Capital Commitments and Resources This section discusses the company's sources and uses of liquidity, capital commitments, and overall financial resources - Principal liquidity sources are cash from operations, borrowings, and existing cash. Uses include working capital, debt service, and equipment investment[186] - The company does not expect to materially rely on cash exercise of warrants for funding, as the common stock price is below the $11.50 exercise price[187] - Management believes cash flow from operations, available cash, and other financing sources will be adequate for liquidity needs for at least the next twelve months[188] - Net cash used in financing activities was $26.1 million for H1 2025, primarily due to $25.2 million in payments on notes payable[193] - As of June 30, 2025, total debt was $278.6 million, with $48.9 million due within the next twelve months[194] ITEM 3. Quantitative and Qualitative Disclosures About Market Risk This section states that there are no quantitative and qualitative disclosures about market risk applicable to the company for the reported period - The company has no material quantitative and qualitative disclosures about market risk for the reported period[209] ITEM 4. Controls and Procedures This section confirms the effectiveness of the company's disclosure controls and procedures and reports no material changes in internal control over financial reporting during the fiscal quarter ended June 30, 2025 Evaluation of Disclosure Controls and Procedures This section reports on the effectiveness of the company's disclosure controls and procedures - Management, including the CEO and CFO, determined that the company's disclosure controls and procedures were effective as of June 30, 2025[211] Changes in Internal Control over Financial Reporting This section addresses any material changes in the company's internal control over financial reporting - There were no changes in internal control over financial reporting during the fiscal quarter ended June 30, 2025, that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[212] PART II – Other Information This section contains other required information not covered in the financial statements, including legal and risk factors ITEM 1. Legal Proceedings This section refers to Note 6 of the financial statements for details on legal proceedings, commitments, and contingencies - Information regarding legal proceedings is detailed in Note 6 – 'Commitments and Contingencies' within the unaudited condensed consolidated financial statements[215] ITEM 1A. Risk Factors This section states that no additional risk factors have been identified, and no material changes have occurred regarding previously disclosed risk factors from the Annual Report on Form 10-K - No new risk factors have been identified, and no material changes have occurred to the risk factors previously disclosed in the Annual Report on Form 10-K for the fiscal year ended December 31, 2024[216] ITEM 5. Other Information This section confirms that no directors or officers adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the last fiscal quarter - No directors or officers adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the last fiscal quarter[217] ITEM 6. Exhibits This section lists all exhibits filed as part of the Form 10-Q, including key agreements, corporate documents, and financial statements - The exhibits include the Agreement and Plan of Merger, corporate charter documents, warrant agreements, the First Amendment to Credit Agreement, an employment agreement, and certifications from the Principal Executive and Financial Officers[219] - Financial statements for the quarter ended June 30, 2025, are provided in Inline XBRL format as Exhibit 101[219] Signatures This section contains the required signatures of the registrant's authorized officers, including the President, Chief Executive Officer, Chief Financial Officer, and Treasurer, certifying the filing of the report - The report is signed by Frank Renda, President and Chief Executive Officer, and Keith Bassano, Chief Financial Officer and Treasurer, on August 12, 2025[221]