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What changed in Southland Holdings, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Southland Holdings, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+254 added−201 removedSource: 10-K (2026-03-26) vs 10-K (2025-03-04)

Top changes in Southland Holdings, Inc.'s 2025 10-K

254 paragraphs added · 201 removed · 174 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

18 edited+1 added−1 removed67 unchanged
Biggest changeWe believe that our insurance coverage meets or exceeds our needs relating to casualty or other type of insurance loss. 6 Table of Contents Our safety team has created an atmosphere of safety at our projects. Our safety directors and site-specific safety managers work together to assess and control potential losses and liabilities both before and during our construction projects.
Biggest changeAll of our policies have been procured with limits and deductibles or self-insured retention amounts of varying amounts per 6 Table of Contents occurrence. We believe that our insurance coverage meets or exceeds our needs relating to casualty or other type of insurance loss. Our safety team has created an atmosphere of safety at our projects.
These include but are not limited to: ● the Davis-Bacon Act which regulates wages and benefits, ● the Walsh-Healy Act which prescribes a minimum wage and regulates overtime and other working conditions, ● Executive Order 14063 which requires project labor agreements on all federal construction projects with contract values over $35 million, 7 Table of Contents ● the Drug-Free Workplace Act, and ● the Federal Acquisition Regulation and the Federal Civil False Claims Act.
These include but are not limited to: ● the Davis-Bacon Act which regulates wages and benefits, ● the Walsh-Healy Act which prescribes a minimum wage and regulates overtime and other working conditions, 7 Table of Contents ● Executive Order 14063 which requires project labor agreements on all federal construction projects with contract values over $35 million, ● the Drug-Free Workplace Act, and ● the Federal Acquisition Regulation and the Federal Civil False Claims Act.
Code of Business Conduct All of our employees are subject to our Code of Business Conduct, which includes guidance and requirements concerning, among other things, general business ethics, including policies concerning the environment, conflicts of interest, anti-corruption, harassment and discrimination, data security and privacy, and the Anti-Bribery and Corruption Policy, which includes guidance and requirements concerning, among other things, interactions with government officials; provisions of gifts, entertainment and hospitality, and charitable and political contributions. ​ Company History and Available Information ​ The Company was incorporated in on July 14, 2021 as a Delaware corporation for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination with one or more businesses or entities.
Code of Business Conduct and Ethics All of our employees are subject to our Code of Business Conduct and Ethics, which includes guidance and requirements concerning, among other things, general business ethics, including policies concerning the environment, conflicts of interest, anti-corruption, harassment and discrimination, data security and privacy, and the Anti-Bribery and Corruption Policy, which includes guidance and requirements concerning, among other things, interactions with government officials; provisions of gifts, entertainment and hospitality, and charitable and political contributions. ​ Company History and Available Information ​ The Company was incorporated on July 14, 2021 as a Delaware corporation for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination with one or more businesses or entities.
We also make available on our website the charters for our Audit Committee, Nominating and Corporate Governance Committee and Compensation Committee and our Code of Business Conduct, which applies to all of our employees, including our executive officers. All such information is also available in print and free of charge to any of our stockholders who request it.
We also make available on our website the charters for our Audit Committee, Nominating and Corporate Governance Committee and Compensation Committee and our Code of Business Conduct and Ethics, which applies to all of our employees, including our executive officers. All such information is also available in print and free of charge to any of our stockholders who request it.
We devote resources to the development, maintenance, communication and enforcement of our Code of Business Conduct, our anti-bribery compliance policies, our internal control processes and compliance related policies. We strive to conduct timely internal investigations of potential violations and take appropriate action depending upon the outcome of the investigation.
We devote resources to the development, maintenance, communication and enforcement of our Code of Business Conduct and Ethics, our anti-bribery compliance policies, our internal control processes and compliance related policies. We strive to conduct timely internal investigations of potential violations and take appropriate action depending upon the outcome of the investigation.
In addition, we intend to disclose on our website any amendments to, or waivers from, our Code of Business Conduct that are required to be publicly disclosed pursuant to rules of the SEC. Additionally, all of our reports filed with the SEC are available via their website at sec.gov. ​ 9 Table of Contents
In addition, we intend to disclose on our website any amendments to, or waivers from, our Code of Business Conduct and Ethics that are required to be publicly disclosed pursuant to rules of the SEC. Additionally, all of our reports filed with the SEC are available via their website at sec.gov. ​ 9 Table of Contents
We believe that our preference of ownership, rather than reliance on renting and leasing, of a large and varied construction fleet and maintenance facilities enhances our access to reliable equipment at a favorable cost and allows us to capture additional margin.
We believe that our preference of ownership, rather than reliance on renting and leasing, of a large and varied construction fleet and maintenance facilities enhances our access to reliable equipment at a favorable cost and allows us to capture additional margin. ● Selective Bidding .
We are an inclusive, diverse company with people of all backgrounds, experience, culture, styles, talents, and other protected classes. 8 Table of Contents Professional and Career Development We strive to develop and sustain a skilled labor advantage by providing thorough on and off-site training programs, project management training, and leadership development programs.
We are an inclusive, diverse company with people of all backgrounds, experience, culture, styles, talents, and other protected classes. Professional and Career Development We strive to develop and sustain a skilled labor advantage by providing thorough on and off-site training programs, project management training, and leadership development programs.
Diversity and Inclusion We employ a dynamic mix of people to create the strongest company possible. Our policy strictly forbids discrimination in employment on the basis of age, culture, gender, national origin, sexual orientation, physical appearance, race, or religion.
Diversity and Inclusion We employ a dynamic mix of people to create the strongest company possible. Our policy strictly forbids discrimination in employment on the basis of age, culture, gender, national origin, sexual orientation, physical appearance, 8 Table of Contents race, or religion.
These agreements cover all necessary union professions and are subject to renewal periodically. As of December 31, 2024, approximately 300, or 14%, of our employees were represented by a union. Estimated amounts for wage escalation related to the expiration of union contracts are included in our bids on various projects.
These agreements cover all necessary union professions and are subject to renewal periodically. As of December 31, 2025, approximately 300, or 17%, of our employees were represented by a union. Estimated amounts for wage escalation related to the expiration of union contracts are included in our bids on various projects.
Our workforce was made up of approximately 2,100 employees as of December 31, 2024, of which approximately 500 were salaried and approximately 1,600 were hourly. Union Workforce. Several of our subsidiaries are signatory to numerous local and regional collective bargaining agreements, both directly and through trade associations, as a union contractor.
Our workforce was made up of approximately 1,800 employees as of December 31, 2025, of which approximately 500 were salaried and approximately 1,300 were hourly. Union Workforce. Several of our subsidiaries are signatory to numerous local and regional collective bargaining agreements, both directly and through trade associations, as a union contractor.
Safety, Health, and Wellness We are committed to providing a safe environment for our employees. We pride ourselves in our above industry average workplace safety. We track and maintain several key safety metrics, which senior management reviews monthly, and we evaluate management on their ability to provide safe working conditions on job sites and to create a strong safety culture.
Safety, Health, and Wellness We are committed to providing a safe environment for our employees. We track and maintain several key safety metrics, which senior management reviews monthly, and we evaluate management on their ability to provide safe working conditions on job sites and to create a strong safety culture.
Fixed price contracts, particularly with federal, state, and local government customers, are expected to continue to represent a majority of our total Backlog. ​ ​ ​ ​ (Amounts in thousands) ​ Balance December 31, 2022 ​ $ 2,973,885 New contracts, change orders, and adjustments ​ 1,011,797 Less: contract revenue recognized in 2023 ​ (1,150,716) Balance December 31, 2023 ​ $ 2,834,966 New contracts, change orders, and adjustments ​ 718,125 Less: contract revenue recognized in 2024 ​ (980,179) Balance December 31, 2024 ​ $ 2,572,912 ​ Construction Costs and Raw Materials We manage our business to minimize exposure to labor and material price increases, including through inflation or other factors, in our bids for projects, when possible.
Fixed price contracts, particularly with federal, state, and local government customers, are expected to continue to represent a majority of our total Backlog. ​ ​ ​ ​ (Amounts in thousands) ​ ​ ​ ​ Balance December 31, 2023 ​ $ 2,834,966 New contracts, change orders, and adjustments ​ 718,125 Less: contract revenue recognized in 2024 ​ (980,179) Balance December 31, 2024 ​ $ 2,572,912 New contracts, change orders, and adjustments ​ 230,336 Less: contract revenue recognized in 2025 ​ (772,168) Balance December 31, 2025 ​ $ 2,031,080 ​ Construction Costs and Raw Materials We manage our business to minimize exposure to labor and material price increases, including through inflation or other factors, in our bids for projects, when possible.
Our safety record is in-line with industry standards. In our industry, we are generally required to possess various types of surety bonds guaranteeing our completion of projects for most public and private customer contracts.
Our safety directors and site-specific safety managers work together to assess and control potential losses and liabilities both before and during our construction projects. Our safety record is in-line with industry standards. In our industry, we are generally required to possess various types of surety bonds guaranteeing our completion of projects for most public and private customer contracts.
We seek to maintain a strong balance sheet and bonding capacity to target varying sizes of contract work. This limits the number of competitors we bid against, as smaller, local companies are often not able to bid on larger or more technical projects. ● Geographically Diverse .
This limits the number of competitors we bid against, as smaller, local companies are often not able to bid on larger or more technical projects. ● Geographically Diverse .
In addition, we review our bidding opportunities to attempt to minimize concentration of work with any one customer, in any one industry, or in stressed labor markets. We believe that by carefully positioning ourselves in market segments that have meaningful barriers to entry, we can continue to be competitive. ● Maintain a Strong Balance Sheet and Bonding Capacity .
We believe that by carefully positioning ourselves in market segments that have meaningful barriers to entry, we can continue to be competitive. ● Maintain a Strong Balance Sheet and Bonding Capacity . We seek to maintain a strong balance sheet and bonding capacity to target varying sizes of contract work.
Since the novel coronavirus (“COVID-19”) pandemic and Russia’s invasion of Ukraine, the construction industry continues to experience widespread supply chain impacts. Labor costs continue to increase due to inflation, shortages of qualified workers, and other factors. Hiring and retaining our skilled workers continues to be a priority to avoid future potential labor shortages.
Additionally, labor costs continue to increase due to inflation, shortages of qualified workers, and other factors. Hiring and retaining our skilled workers continues to be a priority to avoid future potential labor shortages. Risk Management, Insurance, and Bonding We are insured to cover a broad range of exposures arising from our work in the construction industry.
We currently own and maintain more than 3,500 active pieces of equipment with a fair market value exceeding $300 million. ● Selective Bidding . We selectively bid on projects that we believe offer an opportunity to meet our profitability objectives or that offer the opportunity to enter promising new markets.
We selectively bid on projects that we believe offer an opportunity to meet our profitability objectives or that offer the opportunity to enter promising new markets. In addition, we review our bidding opportunities to attempt to minimize concentration of work with any one customer, in any one industry, or in stressed labor markets.
Removed
Risk Management, Insurance, and Bonding We are insured to cover a broad range of exposures arising from our work in the construction industry. All of our policies have been procured with limits and deductibles or self-insured retention amounts of varying amounts per occurrence.
Added
Since the novel coronavirus (“COVID-19”) pandemic and Russia’s invasion of Ukraine, the construction industry has experienced widespread supply chain impacts, many of which continue today. The current conflict in the Middle East is further impacting the supply chain. Changes in regulations, including tariffs, could also have significant supply chain impacts.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

82 edited+21 added−6 removed183 unchanged
Biggest changeThe COVID-19 pandemic and the volatile economic conditions stemming from the pandemic, as well as reactions to future pandemics or resurgences of COVID-19, could also aggravate or heighten the risks posed by other risk factors that we have identified herein, which in turn could materially and adversely affect our business, financial condition and results of operations.
Biggest changePublic health crises, such as the COVID-19 pandemic, have adversely impacted, and could in the future adversely impact, our business, financial condition and results of operations. Pandemics, epidemics or other public health crises can adversely impact our business or the business of our customers, subcontractors and suppliers and the markets in which we do business.
We are engaged in highly competitive businesses in which most customer contracts are awarded through bidding processes based on price and the acceptance of certain risks, along with other factors. We compete with other general and specialty contractors, regional, national and international, as well as small local contractors.
We are engaged in highly competitive businesses in which most customer contracts are awarded through bidding processes based on price and the acceptance of certain risks, along with other factors. We compete with other regional, national and international general and specialty contractors, as well as small local contractors.
Customers may be selective in how they allocate and expend their capital, which could result in a reduction of the number of projects we may bid on and win. Many of the industries that we serve are vulnerable to general downturns, which in turn could materially and adversely affect the demand for our services.
Customers may be selective in how they allocate and expend their capital, which could result in a reduction in the number of projects we may bid on and win. Many of the industries that we serve are vulnerable to general downturns, which in turn could materially and adversely affect the demand for our services.
Litigation or investigations relating to alleged or suspected violations of anti-bribery laws, even if ultimately such litigation or investigations demonstrate that we did not violate anti-bribery laws, could be costly and could distract management. During the ordinary course of our business, we may become subject to material lawsuits or indemnity claims.
Litigation or investigations relating to alleged or suspected violations of anti-bribery laws, even if such litigation or investigations ultimately demonstrate that we did not violate anti-bribery laws, could be costly and could distract management. During the ordinary course of our business, we may become subject to material lawsuits or indemnity claims.
These risks could result in project delays, cost overruns or other problems and can include the following: ● Incorrect assumptions related to productivity, scheduling estimates or future economic conditions, including with respect to the impacts of inflation or tariffs; ● Unanticipated technical problems, including design or engineering issues; ● Inaccurate representations of site conditions and unanticipated changes in the project execution plan; ● Project modifications creating unanticipated costs or delays and failure to properly manage project modifications; ● Inability to achieve guaranteed performance or quality standards with regard to engineering, construction or project management obligations; ● Insufficient or inadequate project execution tools and systems needed to record, track, forecast and control cost and schedule; ● Reliance on historical cost and/or execution data that is not representative of current or future economic and/or execution conditions; ● Failure to accurately estimate the timing and cost of projects, including due to inflation, supply chain disruption, rising construction costs, unforeseen increases in the cost of labor, or other factors; ● Unanticipated increases in the cost of raw materials, components or equipment, including due to inflation or the imposition of import tariffs; ● Failure to properly make judgments in accordance with applicable professional standards, including engineering standards; ● Failure to properly assess and update appropriate risk mitigation strategies and measures; 14 Table of Contents ● Difficulties related to the performance of our customers, partners, subcontractors, suppliers or other third parties; ● Delays or productivity issues caused by weather; and ● Changes in local laws or difficulties or delays in obtaining permits, rights of way or approvals.
These risks could result in project delays, cost overruns or other problems and can include the following: ● Incorrect assumptions related to productivity, scheduling estimates or future economic conditions, including with respect to the impacts of inflation or tariffs; ● Unanticipated technical problems, including design or engineering issues; ● Inaccurate representations of site conditions and unanticipated changes in the project execution plan; ● Project modifications creating unanticipated costs or delays and failure to properly manage project modifications; ● Inability to achieve guaranteed performance or quality standards with regard to engineering, construction or project management obligations; ● Insufficient or inadequate project execution tools and systems needed to record, track, forecast and control cost and schedule; ● Reliance on historical cost and/or execution data that is not representative of current or future economic and/or execution conditions; ● Failure to accurately estimate the timing and cost of projects, including due to inflation, supply chain disruption, rising construction costs, unforeseen increases in the cost of labor, or other factors; ● Unanticipated increases in the cost of raw materials, components or equipment, including due to inflation or the imposition of tariffs; ● Failure to properly make judgments in accordance with applicable professional standards, including engineering standards; 14 Table of Contents ● Failure to properly assess and update appropriate risk mitigation strategies and measures; ● Difficulties related to the performance of our customers, partners, subcontractors, suppliers or other third parties; ● Delays or productivity issues caused by weather; and ● Changes in local laws or difficulties or delays in obtaining permits, rights of way or approvals.
Risks Related to our Securities ● We are an “emerging growth company,” and it cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our Common Stock less attractive to investors. ● An established market for our securities may not be sustained. ● NYSE may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject our securities to additional trading restrictions. ● The price of our securities may change significantly, and you could lose all or part of your investment as a result. ● Future sales, or the perception of future sales, by the Company or our stockholders in the public market could cause the market price of our securities to decline. ● If securities analysts do not publish research or reports about our business or if they downgrade our securities or our sector, the price and trading volume of our securities could decline. ● Our actual operating and financial results in any given period may differ from guidance we provide to the public, including our most recent public guidance. ● We do not intend to pay dividends for the foreseeable future.
Risks Related to our Securities ● We are an “emerging growth company,” and it cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our Common Stock less attractive to investors. ● An established market for our securities may not be sustained. ● NYSE American may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject our securities to additional trading restrictions. ● The price of our securities may change significantly, and you could lose all or part of your investment as a result. ● Future sales, or the perception of future sales, by the Company or our stockholders in the public market could cause the market price of our securities to decline. ● If securities analysts do not publish research or reports about our business or if they downgrade our securities or our sector, the price and trading volume of our securities could decline. ● Our actual operating and financial results in any given period may differ from guidance we provide to the public, including our most recent public guidance. ● We do not intend to pay dividends for the foreseeable future.
As a result, you will be relying solely on the appreciation in value of our securities to achieve a return on your investment. ● We are a “controlled company” that could take advantage of exemptions to certain corporate governance requirements under NYSE rules in the future. ● We may issue additional equity securities which could dilute earnings per share and stockholders’ percentage ownership. 11 Table of Contents Risks Relating to Southland’s Business and Industry We may lose business to competitors through competitive bidding processes.
As a result, you will be relying solely on the appreciation in value of our securities to achieve a return on your investment. ● We are a “controlled company” that could take advantage of exemptions to certain corporate governance requirements under NYSE American rules in the future. ● We may issue additional equity securities which could dilute earnings per share and stockholders’ percentage ownership. 11 Table of Contents Risks Relating to Southland’s Business and Industry We may lose business to competitors through competitive bidding processes.
In some cases, we may be required to bear the cost of a ready workforce and equipment that is larger than necessary, resulting in unpredictability in our cash flow, expenses and profitability. If any expected contract award, or the related work release is delayed or not received, we could incur substantial costs without guaranteed receipt of any corresponding revenue.
In some cases, we may be required to bear the cost of a ready workforce and equipment that is larger than necessary, resulting in unpredictability in our cash flow, expenses and profitability. If any expected contract award or its related work release is delayed or not received, we could incur substantial costs without guaranteed receipt of any corresponding revenue.
Additionally, as described further below, if our securities become delisted from NYSE for any reason, and are quoted on the OTC Bulletin Board, an inter-dealer automated quotation system for equity securities not listed on a national exchange, the liquidity and price of our securities may be more limited than if we were listed on NYSE or another national exchange.
Additionally, as described further below, if our securities become delisted from NYSE American for any reason, and are quoted on the OTC Bulletin Board, an inter-dealer automated quotation system for equity securities not listed on a national exchange, the liquidity and price of our securities may be more limited than if we were listed on NYSE American or another national exchange.
You may not be able to resell your securities at an attractive price due to a number of factors, including, but not limited to, the following: ● results of operations that vary from the expectations of securities analysts and investors; ● results of operations that vary from those of our competitors; ● the impact of the COVID-19 pandemic and its continued effect on our business and financial conditions; ● changes in expectations as to our future financial performance, including financial estimates and investment recommendations by securities analysts and investors; ● declines in the market prices of securities generally; ● strategic actions by us or our competitors; ● announcements by our competitors of significant contracts, acquisitions, partnerships, other strategic relationships or capital commitments; ● any significant change in our management; ● changes in general economic or market conditions or trends in our industry or markets; ● changes in business or regulatory conditions, including new laws or regulations or new interpretations of existing laws or regulations applicable to our business or industry; ● future sales of our Common Stock or other securities; ● investor perceptions or the investment opportunity associated with our securities relative to other investment alternatives; ● the public’s response to press releases or other public announcements, including our filings with the SEC; ● litigation or other disputes involving us, our industry or both, or investigations by regulators into our operations or those of our competitors; ● guidance, if any, that we provide to the public, any changes in such guidance or our failure to meet such guidance; ● the development and sustainability of an active trading market for our securities; ● actions by institutional or activist stockholders; ● changes in accounting standards, policies, guidelines, interpretations or principles; and ● other events or factors, including those resulting from natural disasters, war, acts of terrorism, epidemics, pandemics or responses to such events.
You may not be able to resell your securities at an attractive price due to a number of factors, including, but not limited to, the following: ● results of operations that vary from the expectations of securities analysts and investors; ● results of operations that vary from those of our competitors; ● the impact of the COVID-19 pandemic and its continued effect on our business and financial conditions; ● changes in expectations as to our future financial performance, including financial estimates and investment recommendations by securities analysts and investors; ● declines in the market prices of securities generally; ● strategic actions by us or our competitors; ● announcements by our competitors of significant contracts, acquisitions, partnerships, other strategic relationships or capital commitments; ● any significant change in our management; 27 Table of Contents ● changes in general economic or market conditions or trends in our industry or markets; ● changes in business or regulatory conditions, including new laws or regulations or new interpretations of existing laws or regulations applicable to our business or industry; ● future sales of our Common Stock or other securities; ● investor perceptions or the investment opportunity associated with our securities relative to other investment alternatives; ● the public’s response to press releases or other public announcements, including our filings with the SEC; ● litigation or other disputes involving us, our industry or both, or investigations by regulators into our operations or those of our competitors; ● guidance, if any, that we provide to the public, any changes in such guidance or our failure to meet such guidance; ● the development and sustainability of an active trading market for our securities; ● actions by institutional or activist stockholders; ● changes in accounting standards, policies, guidelines, interpretations or principles; and ● other events or factors, including those resulting from natural disasters, war, acts of terrorism, epidemics, pandemics or responses to such events.
NYSE may delist Southland’s securities from trading on its exchange, which could limit investors’ ability to make transactions in its securities and subject Southland to additional trading restrictions. Currently, our Common Stock and Warrants are publicly traded on NYSE. We may be unable to maintain the listing of our securities in the future.
NYSE American may delist Southland’s securities from trading on its exchange, which could limit investors’ ability to make transactions in its securities and subject Southland to additional trading restrictions. Currently, our Common Stock and Warrants are publicly traded on NYSE American. We may be unable to maintain the listing of our securities in the future.
In order to continue listing our securities on NYSE, we will be required to maintain certain financial, distribution and stock price levels. If NYSE delists our securities from trading on its exchange and we are not able to list our securities on another national securities exchange, our securities may be quoted on an over-the-counter market.
In order to continue listing our securities on NYSE American, we will be required to maintain certain financial, distribution and stock price levels. If NYSE American delists our securities from trading on its exchange and we are not able to list our securities on another national securities exchange, our securities may be quoted on an over-the-counter market.
The National Securities Markets Improvement Act of 1996 (the “NSMIA”), which is a federal statute that prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” Since our Common Stock and Warrants are listed on NYSE, they are covered securities.
The National Securities Markets Improvement Act of 1996 (the “NSMIA”), which is a federal statute that prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” Since our Common Stock and Warrants are listed on NYSE American, they are covered securities.
These types of affirmative claims occur due to matters such as, but not limited to, delays or changes from the initial project scope, or differing site conditions, incomplete or inaccurate plans and drawings, which may result in additional costs.
These types of affirmative claims occur due to matters such as, but not limited to, delays or changes from the initial project scope, differing site conditions, or incomplete or inaccurate plans and drawings, all of which may result in additional costs.
Risks Related to Our Business and Industry ● We may lose business to competitors through competitive bidding processes. ● Our Backlog is subject to unexpected adjustments and cancellations. ● The loss of one or more customers could have an adverse effect on us. ● We are subject to risks related to government contracts and related procurement regulations. ● The timing of new contract starts, including delays, cancellations and scope alterations, may result in unpredictable fluctuations in our business. ● The nature of our contracts subjects us to risks associated with delays and cost overruns, which may not be recoverable and may result in reduced profits or losses that could have a material impact on us. ● Our financial results are based upon estimates and assumptions that may differ from actual results. ● If we are unable to accurately estimate contract risks, revenue or costs, economic factors such as inflation, the timing of new awards or the pace of project execution, we may incur a loss or achieve lower than anticipated profit. ● Our accounting for revenue recognized over time could result in a reduction or elimination of previously reported revenue and profit. ● We may incur higher costs to lease, acquire and maintain equipment necessary for our operations. ● Supply chain interruptions, including availability of materials, products or equipment, may have a negative impact on our ability to complete projects. ● Some of our contracts have penalties for late completion. ● If we are unable to attract and retain qualified managers and skilled employees, our operating costs may increase. ● We depend on key personnel and we may not be able to operate and grow our business effectively if we lose the services of any of our key persons or are unable to attract qualified and skilled personnel in the future. ● Our employees work on projects that are inherently dangerous and in locations where there are high security risks, and a failure to maintain a safe work site could result in significant losses. ● We may incur liabilities or suffer negative financial or reputational impacts relating to health and safety matters. ● We are dependent upon suppliers and subcontractors to complete many of our contracts. ● Our participation in joint ventures exposes us to liability and/or harm to our reputation for failures by our partners. ● Employee, agent or partner misconduct or our overall failure to comply with laws or regulations could impair our ability to compete for contracts. ● During the ordinary course of our business, we may become subject to material lawsuits or indemnity claims. 10 Table of Contents ● Systems and information technology interruption and breaches in data security and/or privacy could adversely impact our ability to operate and negatively impact our results of operations. ● Our inability to recover on contract modifications against project owners or subcontractors for payment or performance could negatively affect our business. ● Our failure to adequately recover on affirmative claims brought by us against project owners or other project participants for additional contract costs could have a negative impact on our liquidity and future operations. ● We may experience delays and defaults in customer payments, and we may pay our suppliers and subcontractors before receiving payment from our customers for the related services, which could result in a material adverse effect on our business. ● Our indebtedness could lead to adverse consequences or adversely affect our financial position and prevent us from fulfilling our obligations under such indebtedness, and any refinancing of this debt could be at significantly higher interest rates. ● Our bonding requirements may limit our ability to incur indebtedness, which could limit our ability to refinance our existing credit facilities or to execute our business plan. ● We may be unable to win new contracts if we cannot provide customers with letters of credit or performance or other bonds. ● It can be difficult and expensive to obtain the insurance we need for our business operations. ● We have international operations that are subject to foreign economic and political uncertainties and risks.
Risks Related to Our Business and Industry ● We may lose business to competitors through competitive bidding processes. ● Our Backlog is subject to unexpected adjustments and cancellations. ● The loss of one or more customers could have an adverse effect on us. ● We are subject to risks related to government contracts and related procurement regulations. ● The timing of new contract delays, cancellations and termination of existing contracts may result in unpredictable fluctuations in our business. ● The nature of our contracts subjects us to risks associated with delays and cost overruns, which may not be recoverable and may result in reduced profits or losses that could have a material impact on us. ● Our financial results are based upon estimates and assumptions that may differ from actual results. ● If we are unable to accurately estimate contract risks, revenue or costs, economic factors such as inflation and tariffs, the timing of new awards or the pace of project execution, we may incur a loss or achieve lower than anticipated profit. ● Our accounting for revenue recognized over time could result in a reduction or elimination of previously reported revenue and profit. ● We may incur higher costs to lease, acquire and maintain equipment necessary for our operations. ● Supply chain interruptions, including availability of materials, products or equipment, may have a negative impact on our ability to complete projects. ● Some of our contracts have penalties for late completion. ● If we are unable to attract and retain qualified managers and skilled employees, our operating costs may increase. ● We depend on key personnel and we may not be able to operate and grow our business effectively if we lose the services of any of our key persons or are unable to attract qualified and skilled personnel in the future. ● Our employees work on projects that are inherently dangerous and in locations where there are high security risks, and a failure to maintain a safe work site could result in significant losses. ● We may incur liabilities or suffer negative financial or reputational impacts relating to health and safety matters. ● We are dependent upon suppliers and subcontractors to complete many of our contracts. ● Our participation in joint ventures exposes us to liability and/or harm to our reputation for failures by our partners. ● Employee, agent or partner misconduct or our overall failure to comply with laws or regulations could impair our ability to compete for contracts. ● During the ordinary course of our business, we may become subject to material lawsuits or indemnity claims. 10 Table of Contents ● Systems and information technology interruption and breaches in data security and/or privacy could adversely impact our ability to operate and negatively impact our results of operations. ● Our inability to recover on contract modifications against project owners or subcontractors for payment or performance could negatively affect our financial condition, results of operations and cash flows. ● Our failure to adequately recover on affirmative claims brought by us against project owners or other project participants for additional contract costs could have a negative impact on our liquidity and future operations. ● We may experience delays and defaults in customer payments, and we may pay our suppliers and subcontractors before receiving payment from our customers for the related services, which could result in a material adverse effect on our business. ● Our indebtedness could lead to adverse consequences or adversely affect our financial position and prevent us from fulfilling our obligations under such indebtedness, and any refinancing of this debt could be at significantly higher interest rates. ● Our bonding requirements may limit our ability to incur indebtedness, which could limit our ability to refinance our existing credit facilities or to execute our business plan. ● We may be unable to win new contracts if we cannot provide customers with letters of credit or performance or other bonds. ● It can be difficult and expensive to obtain the insurance we need for our business operations. ● We have international operations that are subject to foreign economic and political uncertainties and risks.
Substantial portions of our revenue are derived from project-based work that is awarded through a competitive bid process. It is generally very difficult to predict the timing and geographic distribution of the projects that we will be awarded.
Substantial portions of our revenue are derived from project-based work that is awarded through a competitive bid process. It is generally difficult to predict the timing and geographic distribution of the projects that we will be awarded.
If we did, you would not have the same protections afforded to stockholders of companies subject to all of the corporate governance requirements of the NYSE. The Warrants may never be in the money, and may expire worthless.
If we did, you would not have the same protections afforded to stockholders of companies subject to all of the corporate governance requirements of the NYSE American. The Warrants may never be in the money, and may expire worthless.
Acquisitions may expose us to operational challenges and risks, including, among others: ● The diversion of management’s attention from the day-to-day operations of the company; ● Managing a significantly larger company than before completion of an acquisition; ● The assimilation of new employees and the integration of business cultures; ● Training and facilitating our internal control processes within the acquired organization; ● Retaining key personnel; ● The integration of information, accounting, finance, sales, billing, payroll and regulatory compliance systems; ● Challenges in keeping existing customers and obtaining new customers; ● Challenges in combining service offerings and sales and marketing activities; ● The assumption of unknown liabilities of the acquired business for which there are inadequate reserves; ● The potential impairment of acquired goodwill and intangible assets; and 21 Table of Contents ● The inability to enforce covenants not to compete.
Acquisitions may expose us to operational challenges and risks, including, among others: ● The diversion of management’s attention from the day-to-day operations of the company; ● Managing a significantly larger company than before completion of an acquisition; ● The assimilation of new employees and the integration of business cultures; ● Training and facilitating our internal control processes within the acquired organization; ● Retaining key personnel; ● The integration of information, accounting, finance, sales, billing, payroll and regulatory compliance systems; ● Challenges in keeping existing customers and obtaining new customers; ● Challenges in combining service offerings and sales and marketing activities; ● The assumption of unknown liabilities of the acquired business for which there are inadequate reserves; ● The potential impairment of acquired goodwill and intangible assets; and ● The inability to enforce covenants not to compete.
Operating in the international marketplace exposes us to a number of risks including: ● Abrupt changes in government policies, laws, treaties (including those impacting trade), regulations or leadership; ● Embargoes or other trade restrictions, including sanctions; ● Restrictions on currency movement; ● Tax or tariff changes and withholding requirements; ● Currency exchange rate fluctuations; ● Changes in labor conditions and difficulties in staffing and managing international operations, including logistical and communication challenges; ● U.S. government trade or other policy changes in relation to the foreign countries in which we operate; ● Other regional, social, political and economic instability, including recessions and other economic crises; ● Natural disasters and public health crises, including pandemics; ● Expropriation and nationalization of our assets; ● International hostilities; and ● Unrest, civil strife, acts of war, terrorism and insurrection.
Operating in the international marketplace exposes us to a number of risks including: ● Abrupt changes in government policies, laws, treaties (including those impacting trade), regulations or leadership; ● Embargoes or other trade restrictions, including sanctions; ● Restrictions on currency movement; ● Tax or tariff changes and withholding requirements; ● Currency exchange rate fluctuations; ● Changes in labor conditions and difficulties in staffing and managing international operations, including logistical and communication challenges; ● U.S. government trade or other policy changes in relation to the foreign countries in which we operate; ● Other regional, social, political and economic instability, including recessions and other economic crises; 24 Table of Contents ● Natural disasters and public health crises, including pandemics; ● Expropriation and nationalization of our assets; ● International hostilities; and ● Unrest, civil strife, acts of war, terrorism and insurrection.
We are a “controlled company” that could take advantage of exemptions to certain corporate governance requirements under NYSE rules in the future. We are a “controlled company” within the meaning of the NYSE listing standards.
We are a “controlled company” that could take advantage of exemptions to certain corporate governance requirements under NYSE American rules in the future. We are a “controlled company” within the meaning of the NYSE American listing standards.
In addition, if we, subcontractors, suppliers or other third parties performing work or services on our behalf or supplying equipment or material on our behalf, fail to meet guaranteed performance or quality standards, we may be held responsible under the guarantee or warranty provisions of our contract for cost impact to the customer, generally in the form of contractually agreed-upon liquidated damages or an obligation to re-perform work.
In addition, if we, or subcontractors, suppliers or other third parties performing work or services on our behalf or supplying equipment or material on our behalf, fail to meet guaranteed performance or quality standards, we may be held responsible under the guarantee or warranty provisions of our contracts for cost impact to the customer, generally in the form of contractually agreed-upon liquidated damages or an obligation to re-perform work.
We will remain an emerging growth company until the earliest of: (i) the end of the fiscal year in which we have total annual gross revenue in excess of $1.235 billion; (ii) the last day of our fiscal year following the fifth anniversary of 25 Table of Contents the date on which we consummated our initial public offering (the “IPO”) (or December 31, 2026); (iii) the date on which we issue more than $1.0 billion in non-convertible debt during the preceding three-year period; or (iv) the end of the fiscal year in which the market value of our Common Stock held by non-affiliates equals or exceeds $700 million as of the last business day of our most recently completed second fiscal quarter.
We will remain an emerging growth company until the earliest of: (i) the end of the fiscal year in which we have total annual gross revenue in excess of $1.235 billion; (ii) the last day of our fiscal year following the fifth anniversary of the date on which we consummated our initial public offering (the “IPO”) (or December 31, 2026); (iii) the date on which we issue more than $1.0 billion in non-convertible debt during the preceding three-year period; or (iv) the end of the fiscal year in which the market value of our Common Stock held by non-affiliates equals or exceeds $700 million as of the last business day of our most recently completed second fiscal quarter.
To the extent these events occur, the total cost to the project (including any liquidated damages we become liable to pay) could be material and could, in some circumstances, equal or exceed the full value of the contract. In such events, our financial condition or results of operations could be materially and negatively impacted.
To the extent these events occur, the total cost to the applicable project (including any liquidated damages we become liable to pay) could be material and could, in some circumstances, equal or exceed the full value of the contract for such project. In such events, our financial condition or results of operations could be materially and negatively impacted.
Unsafe work conditions also have the potential of increasing employee turnover, increasing project costs and raising our operating costs. If we fail to implement appropriate safety procedures and/or if our procedures fail, our employees or others may suffer injuries or loss of life, the completion of a project could be delayed and we could experience investigations or litigation.
Unsafe work conditions also have the potential of increasing employee turnover, increasing project costs and raising our operating costs. If we fail to implement appropriate safety procedures or if our procedures fail, our employees or others may suffer injuries or loss of life, the completion of a project could be delayed and we could be subject to investigations or litigation.
Further, the risks caused by climate change span across the full spectrum of the industries we serve. The direct physical risks that climate change poses through chronic environmental changes, such as rising sea levels and temperatures, and acute events, such as hurricanes, droughts and wildfires, is common to each of these industries.
Further, the risks caused by climate change span across the full spectrum of the markets we serve. The direct physical risks that climate change poses through chronic environmental changes, such as rising sea levels and temperatures, and acute events, such as hurricanes, droughts and wildfires, is common to each of these markets.
We are subject to risks related to government contracts and related procurement regulations. Our contracts with federal, state, local and foreign government entities and agencies are subject to various procurement regulations and other requirements relating to their formation, administration and performance. Government contracts expose us to a variety of risks that differ from those associated with private sector contracts.
Our contracts with federal, state, local and foreign government entities and agencies are subject to various procurement regulations and other requirements relating to their formation, administration and performance. Government contracts expose us to a variety of risks that differ from those associated with private sector contracts.
Our customers’ interest in approving new projects, budgets for capital expenditures and need for our services may be adversely affected by, among other things, poor economic conditions, including an economic recession, low oil prices, political uncertainties and currency devaluations.
Our customers’ interest in approving new projects, budgets for capital expenditures and need for our services may be adversely affected by, among other things, poor economic conditions, including an economic recession, low or volatile oil prices, political uncertainties and currency devaluations.
If we are unable to accurately estimate contract risks, revenue or costs, economic factors such as inflation, the timing of new awards or the pace of project execution, we may incur a loss or achieve lower than anticipated profit.
If we are unable to accurately estimate contract risks, revenue or costs, economic factors such as inflation and tariffs, the timing of new awards or the pace of project execution, we may incur a loss or achieve lower than anticipated profit.
Despite these activities we cannot guarantee the safety of our personnel, nor can we guarantee our work, equipment or supplies will be free from damage. We may incur liabilities or suffer negative financial or reputational impacts relating to health and safety matters.
Despite these procedures we cannot guarantee the safety of our personnel, nor can we guarantee our work, equipment or supplies will be free from damage. We may incur liabilities or suffer negative financial or reputational impacts relating to health and safety matters.
Often times, these estimates are particularly difficult to determine, and we must exercise significant judgment.
Often times, these estimates and assumptions are particularly difficult to determine, and we must exercise significant judgment.
Estimates may be used in estimated contract values and estimated costs at completion, our assessments of the allowance for doubtful accounts, useful lives of property and equipment, fair value assumptions in analyzing goodwill and long-lived asset impairments, self-insured claims liabilities, accounting for revenue recognized over time and provisions for income taxes.
Estimates 22 Table of Contents and assumptions may be used in estimated contract values and estimated costs at completion, our assessments of the allowance for doubtful accounts, useful lives of property and equipment, fair value assumptions in analyzing goodwill and long-lived asset impairments, self-insured claims liabilities, accounting for revenue recognized over time and provisions for income taxes.
If we do not maintain a current and effective prospectus relating to the Common Stock issuable upon exercise of the Warrants, holders will only be able to exercise such Warrants on a “cashless basis.” If we do maintain a current and effective prospectus relating to the Common Stock issuable upon exercise of the Warrants at the time that holders wish to exercise such Warrants, they will only be able to exercise them on a “cashless basis” provided that an exemption from registration is available.
If we do not maintain a current and effective prospectus relating to the Common Stock issuable upon exercise of the Warrants, holders will only be able to exercise such Warrants on a “cashless basis.” 29 Table of Contents If we do maintain a current and effective prospectus relating to the Common Stock issuable upon exercise of the Warrants at the time that holders wish to exercise such Warrants, they will only be able to exercise them on a “cashless basis” provided that an exemption from registration is available.
In addition, projects may remain in our Backlog for an extended period of time. During periods of economic slowdown, the risk of projects being suspended, delayed or canceled generally increases. Finally, poor project or contract performance could also impact our Backlog and profits. Such developments could have a material adverse effect on our business and our profits.
In addition, projects may remain in our Backlog for an extended period of time. During periods of economic slowdown, the risk of projects being suspended, delayed or canceled generally increases. Finally, poor project execution could also impact our Backlog and profits. Such developments could have a material adverse effect on our business and our profits.
Some of the work performed under our contracts is performed by third-party subcontractors. We also rely on third-party suppliers to provide certain equipment and materials used for projects. If we are unable to hire qualified 17 Table of Contents subcontractors or find qualified suppliers, our ability to successfully or timely complete a project could be impaired.
Some of the work performed under our contracts is performed by third-party subcontractors. We also rely on third-party suppliers to provide certain equipment and materials used for projects. If we are unable to hire qualified subcontractors or find qualified suppliers, our ability to successfully or timely complete a project could be impaired.
If any of our third party insurers fail, abruptly cancel our coverage or otherwise cannot satisfy their obligations to us, then our overall risk exposure and operational expenses could increase and our business operations could be interrupted. 23 Table of Contents We have international operations that are subject to foreign economic and political uncertainties and risks.
If any of our third party insurers fail, abruptly cancel our coverage or otherwise cannot satisfy their obligations to us, then our overall risk exposure and operational expenses could increase and our business operations could be interrupted. We have international operations that are subject to foreign economic and political uncertainties and risks.
We have from time-to-time experienced, and may in the future experience, shortages of certain types of qualified personnel. For example, 16 Table of Contents periodically there are shortages of engineers, project managers, field supervisors and other skilled workers capable of working on and supervising construction projects, as well as providing engineering services.
We have from time-to-time experienced, and may in the future experience, shortages of certain types of qualified personnel. For example, periodically there are shortages of engineers, project managers, field supervisors and other skilled workers capable of working on and supervising construction projects, as well as providing engineering services.
It is possible that such adjustments could be significant and could have an adverse effect on our business. 22 Table of Contents Our indebtedness could lead to adverse consequences or adversely affect our financial position and prevent us from fulfilling our obligations under such indebtedness, and any refinancing of this debt could be at significantly higher interest rates.
It is possible that such adjustments could be significant and could have an adverse effect on our business. Our indebtedness could lead to adverse consequences or adversely affect our financial position and prevent us from fulfilling our obligations under such indebtedness, and any refinancing of this debt could be at significantly higher interest rates.
Serious accidents, including fatalities, may subject us to substantial penalties, civil litigation or criminal prosecution. Claims for damages to persons, including claims for bodily injury or loss of life, could result in substantial costs and liabilities, which could materially and adversely affect our financial condition, results of operations or cash flows.
Serious accidents, including fatalities, may subject us to substantial penalties, civil litigation or criminal prosecution. Claims for damages to persons, including claims for bodily injury or loss of life, could result in 17 Table of Contents substantial costs and liabilities, which could materially and adversely affect our financial condition, results of operations or cash flows.
If we were involved in securities litigation, it could have a substantial cost and divert resources and the attention of executive management from our business regardless of the outcome of such litigation. 27 Table of Contents Future sales, or the perception of future sales, by the Company or our stockholders in the public market could cause the market price of our securities to decline.
If we were involved in securities litigation, it could have a substantial cost and divert resources and the attention of executive management from our business regardless of the outcome of such litigation. Future sales, or the perception of future sales, by the Company or our stockholders in the public market could cause the market price of our securities to decline.
Such legislation or restrictions could increase the costs of projects for us and our customers or, in some cases, prevent a project from going forward, thereby potentially reducing the need for our services, which would in turn have a material adverse impact on us.
Such legislation or restrictions could increase the costs of projects for us and our customers or, in some 16 Table of Contents cases, prevent a project from going forward, thereby potentially reducing the need for our services, which would in turn have a material adverse impact on us.
Such interruptions can result in a loss of critical data, a delay in operations, damage to our reputation or an unintentional disclosure of customer confidential or personally identifiable information, any of which could have a material adverse impact on us and our operating results.
Such interruptions can result in a loss of critical data, a delay in operations, damage to our reputation or an unintentional 19 Table of Contents disclosure of customer confidential or personally identifiable information, any of which could have a material adverse impact on us and our operating results.
A failure to comply with these laws and regulations could result in civil or criminal sanctions, including the imposition of fines, the denial of export privileges and suspension or debarment from participation in federal contracts. 24 Table of Contents Compliance with and changes in tax laws could adversely affect our performance.
A failure to comply with these laws and regulations could result in civil or criminal sanctions, including the imposition of fines, the denial of export privileges and suspension or debarment from participation in federal contracts. Compliance with and changes in tax laws could adversely affect our performance.
Economic factors, including inflation, could also subject us to higher costs, which we may not be able to fully recover in future projects that we are bidding, and could also decrease profit on our existing contracts, in particular with respect to fixed price contracts.
Economic factors, including inflation and tariffs, could also subject us to higher costs, which we may not be able to fully recover in future projects that we are bidding, and could also decrease profits on our existing contracts, in particular with respect to fixed price contracts.
In addition, we may need to incur additional debt in the future in the ordinary course of business. Our current debt and any future additional debt we may incur may impose significant operating and financial restrictions on us. A breach of any of these restrictions, including restrictions related to debt covenants, could result in a default.
In addition, we may need to incur additional debt in the future in the ordinary course of business. Our current debt and any future additional 23 Table of Contents debt we may incur may impose significant operating and financial restrictions on us. A breach of any of these restrictions, including restrictions related to debt covenants, could result in a default.
Under these rules, a company of which more than 50% of the voting power is held by an individual, a group or another company is a 28 Table of Contents “controlled company” and may elect not to comply with certain corporate governance requirements of the NYSE, including (i) the requirement that a majority of the board of directors consist of independent directors, (ii) the requirement that we have a nominating and corporate governance committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities and (iii) the requirement that we have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities.
Under these rules, a company of which more than 50% of the voting power is held by an individual, a group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements of the NYSE American, including that (i) a majority of the board of directors consist of independent directors, (ii) we have a nominating and corporate governance committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities and (iii) we have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities.
If one or more of these analysts ceases coverage of the Company or fails to publish reports on it regularly, we could lose visibility in the market, which in turn could cause the price or trading volume of our securities to decline.
If 28 Table of Contents one or more of these analysts ceases coverage of the Company or fails to publish reports on it regularly, we could lose visibility in the market, which in turn could cause the price or trading volume of our securities to decline.
Further, if our securities were no longer listed on NYSE, they would not be covered securities and would be subject to regulation in each state in which they are offered. 26 Table of Contents The price of our securities may change significantly, and you could lose all or part of your investment as a result.
Further, if our securities were no longer listed on NYSE American, they would not be covered securities and would be subject to regulation in each state in which they are offered. The price of our securities may change significantly, and you could lose all or part of your investment as a result.
In addition, in instances where we rely on a limited number of suppliers or subcontractors, there may be no available replacement technology, equipment, materials or services on a timely basis or at the costs we had anticipated.
In addition, in instances where we rely on a limited number of suppliers or subcontractors, there may be no available replacement technology, equipment, materials or services that can be sourced on a timely basis or at the costs we had anticipated.
Additionally, the initial stockholders of Legato II (the “Initial Stockholders”) and current and former management control a majority of our shares which will result in limited liquidity of our securities. This could subject our securities to additional volatility.
Additionally, the initial stockholders of Legato II (the “Initial Stockholders”) and current and 26 Table of Contents former management control a majority of our shares which will result in limited liquidity of our securities. This could subject our securities to additional volatility.
Additionally, such an attack could have a material adverse impact on our operations, reputation and financial results. In addition, various privacy 19 Table of Contents and security laws and regulations requiring us to protect sensitive and confidential information from disclosure continue to evolve and pose increasingly complex compliance challenges.
Additionally, such an attack could have a material adverse impact on our operations, reputation and financial results. In addition, various privacy and security laws and regulations requiring us to protect sensitive and confidential information from disclosure continue to evolve and pose increasingly complex compliance challenges.
Furthermore, if global economic, industry, political or other market conditions adversely affect the financial institutions that provide credit to us, it is possible that our ability to establish or draw upon our credit facilities may be impacted.
Furthermore, if global economic, industry, political or other market conditions adversely affect the financial institutions that provide credit to us, our ability to establish or draw upon our credit facilities may be impacted.
We cannot predict when or whether any of these legislative proposals may become law or what effect will be on us and our customers. If we are unable to attract and retain qualified managers and skilled employees, our operating costs may increase.
We cannot predict when or whether any of these legislative proposals may become law or what effect they may have on us or our customers. If we are unable to attract and retain qualified managers and skilled employees, our operating costs may increase.
If our joint venture partners, insurers, sureties, customers, suppliers, or other parties on whom we rely are affected by issues in the banking industry it may have an adverse impact on our operational and financial performance.
If our joint venture 25 Table of Contents partners, insurers, sureties, customers, suppliers, or other parties on whom we rely are affected by issues in the banking industry it may have an adverse impact on our operational and financial performance.
These systems have been and may, in the future, be subject to interruptions or damage by a variety of factors including, but not limited to, cyber-attacks and ransomware, natural disasters, power loss, telecommunications failures, acts of war, computer viruses, email phishing, corporate espionage, obsolescence and physical damage.
These systems may be subject to interruptions or damage by a variety of factors including, but not limited to, cyber-attacks and ransomware, natural disasters, power loss, telecommunications failures, acts of war, computer viruses, email phishing, corporate espionage, obsolescence and physical damage.
The Warrant Agreement provides that the terms of the Warrants may be amended without the consent of any holder to cure any ambiguity or correct 29 Table of Contents any defective provision.
The Warrant Agreement provides that the terms of the Warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision.
Climate change related events, such as increased frequency and severity of storms, floods, wildfires, droughts, hurricanes, freezing conditions and other natural disasters, may have a long-term impact on our business, financial condition and results of operation.
Climate change related events, such as increased frequency and severity of storms, floods, wildfires, droughts, hurricanes, freezing conditions and other natural disasters, may have short-term, intermediate-term and long-term impacts on our business, financial condition and results of operation.
For example, growing concerns about climate change may result in legislation, international protocols or treaties, regulation or other restrictions on greenhouse gas emissions or that otherwise seek to address climate change that could affect our customers, including those who (a) are involved in the exploration, production or refining of fossil fuels, (b) emit greenhouse gases through the combustion of fossil fuels or (c) emit greenhouse gases through the mining, manufacture, utilization or production of materials or goods.
For example, growing concerns about climate change may result in legislation, international protocols or treaties, regulations or other restrictions on greenhouse gas emissions or other climate-related risks that could affect our customers, including those who (a) are involved in the exploration, production or refining of fossil fuels, (b) emit greenhouse gases through the combustion of fossil fuels or (c) emit greenhouse gases through the mining, manufacture, utilization or production of materials or goods.
As a result of the COVID-19 pandemic, we have experienced delays in certain bidding activities and contract awards and also in legal proceedings and 20 Table of Contents settlement discussions where we have claims against project owners or customers.
For example, as a result of the COVID-19 pandemic, we experienced delays in certain bidding activities and contract awards and also in legal proceedings and settlement discussions where we have claims against project owners or customers.
If we call our Warrants for redemption, our management will have the option to require any holder that wishes to exercise his Warrant (including any Private Warrants) to do so on a “cashless basis.” If our management chooses to require holders to exercise their Warrants on a cashless basis, the number of shares of common stock received by a holder upon exercise will be fewer than it would have been had such holder exercised his warrant for cash.
Our management’s ability to require holders of our Warrants to exercise such Warrants on a cashless basis will cause holders to receive fewer shares of common stock upon their exercise of the warrants than they would have received had they been able to exercise their warrants for cash. 30 Table of Contents If we call our Warrants for redemption, our management will have the option to require any holder that wishes to exercise his Warrant (including any Private Warrants) to do so on a “cashless basis.” If our management chooses to require holders to exercise their Warrants on a cashless basis, the number of shares of common stock received by a holder upon exercise will be fewer than it would have been had such holder exercised his warrant for cash.
We source input materials, including raw materials, products and/or equipment, from domestic and international suppliers. While we take steps to secure delivery of the raw materials, products, and/or equipment necessary for our business operations, those measures may prove to be inadequate due to supply chain disruptions and may have a negative impact on our ability to complete projects.
While we take steps to secure delivery of the raw materials, products, and/or equipment necessary for our business operations, those measures may prove to be inadequate due to supply chain disruptions and may have a negative impact on our ability to complete projects.
Should one or more of these events occur, it could have a material adverse effect on our financial position, results of operations, cash flows and liquidity. The timing of new contract starts, including delays, cancellations and scope alternations, may result in unpredictable fluctuations in our business.
Should one or more of these events occur, it could have a material adverse effect on our financial position, results of operations, cash flows and liquidity. The timing of new contract delays, cancellations and termination of existing contracts may result in unpredictable fluctuations in our business.
Foreign Corrupt Practices Act and similar worldwide anti-bribery laws. The U.S. Foreign Corrupt Practices Act and similar anti-bribery laws in other jurisdictions generally prohibit companies and their intermediaries from making improper payments to officials or others for the purpose of obtaining or retaining business.
We could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act and similar worldwide anti-bribery laws. The U.S. Foreign Corrupt Practices Act and similar anti-bribery laws in other jurisdictions generally prohibit companies and their intermediaries from making improper payments to officials or others for the purpose of obtaining or retaining business.
In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could result in fines, revocation of operating licenses or permits, injunctive relief or similar remedies, as well as give rise to termination or cancellation rights under our contracts or disqualify from future bidding opportunities, which could be costly to us or limit our ability to operate. 18 Table of Contents We could be adversely affected by violations of the U.S.
In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could result in fines, revocation of operating licenses or permits, injunctive relief or similar remedies, as well as give rise to termination or cancellation rights under our contracts or disqualify us from future bidding opportunities, which could be costly to us or limit our ability to operate.
The strong competition in our markets requires maintaining skilled personnel and investing in technology and also puts pressure on profit margins. Some of our competitors may have greater resources which may result in a decrease in new awards, a decrease in profit margins, or both.
The strong competition in our markets requires maintaining skilled personnel and investing in technology and also puts pressure on profit margins. Some of our competitors may have greater resources than we do. An increase in competition from such competitors may result in a decrease in new awards, a decrease in profit margins, or both.
Failure to comply with applicable laws or regulations or acts of fraud or misconduct could subject us to fines and penalties, loss of security clearance and suspension or debarment from contracting with government agencies, which could weaken our ability to win contracts and have a material adverse impact on our revenues and profits.
Failure to comply with applicable laws or regulations or acts of fraud or misconduct could subject us to fines and penalties, loss of security clearance and suspension or debarment from contracting with government agencies, which could weaken our ability to win contracts and have a material adverse impact on our revenues and profits. 18 Table of Contents Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, investments and results of operations.
Our Backlog generally consists of projects for which we have an executed contract or commitment with a customer and reflects our expected revenue from the contract or commitment, which is often subject to revision over time. We cannot guarantee that the revenue projected in our Backlog will be realized or profitable or will not be subject to delay or suspension.
Our Backlog generally consists of projects for which we have an executed contract or commitment with a customer and reflects our expected revenue from the contract or commitment, which is often subject to revision over time.
Our inability to recover on contract modifications against project owners or subcontractors for payment or performance could negatively affect our business. We periodically present contract modifications to our customers and subcontractors for changes in contract specifications or requirements. We consider unapproved change orders to be contract modifications for which customers have not agreed to both scope and price.
We periodically present contract modifications to our customers and subcontractors for changes in contract specifications or requirements. We consider unapproved change orders to be contract modifications for which customers have not agreed to both scope and price.
Net assets of foreign operations for the years ended December 31, 2024, and December 31, 2023, are approximately 62% and 47%, respectively, of our total net assets. Foreign currency risks could have an adverse impact on revenue, earnings and/or Backlog.
Net assets of foreign operations for the year ended December 31, 2025 are $107.1 million compared to our negative total net assets of $37.0 million. Net assets of foreign operations for the year ended December 31, 2024, are approximately 62% of our total net assets. Foreign currency risks could have an adverse impact on revenue, earnings and/or Backlog.
Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, investments and results of operations. We are subject to laws and regulations enacted by national, regional and local governments. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly.
We are subject to laws and regulations enacted by national, regional and local governments. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time-consuming and costly.
When the general level of economic activity deteriorates, our customers may delay or cancel upgrades, expansions and/or maintenance and repairs to their systems. Many factors, including the financial condition of the industry, could adversely affect our customers and their willingness to fund capital expenditures in the future.
When the general level of economic activity deteriorates, our customers have at times in the past and may in the future delay or cancel upgrades, expansions and/or maintenance and repairs to their systems.
In addition, if customers fail to pay us for work we perform, we could experience a material adverse effect on our business and profitability. The COVID-19 pandemic has adversely impacted, and could continue to adversely impact, our business, financial condition and results of operations.
In addition, if customers fail to pay us for work we perform, our ability to timely pay our subcontractors could be impacted and we could experience a material adverse effect on our business and profitability.
The loss of one or more customers could have an adverse effect on us. A few customers, including the federal, state and local governments and governmental agencies, comprise a significant portion of our revenue. Our customers may unilaterally reduce, fail to renew, terminate their contracts with us, or revoke our ability to submit bids on new work at any time.
The loss of one or more customers could have an adverse effect on us. A few customers, including the federal government, certain state and local governments and governmental agencies, comprise a significant portion of our revenue.
Our ability to generate cash is important for the funding of our operations, investing in ventures, the servicing of our indebtedness and making acquisitions.
Adverse credit and financial market conditions could impair our, our customers’ and our partners’ borrowing capacity, which could negatively affect us. Our ability to generate and access cash is important for the funding of our operations, investing in ventures, the servicing of our indebtedness and making acquisitions.
A failure to recover on these types of affirmative claims promptly and fully could have a negative impact on our financial position, results of operations, cash flows and liquidity. In addition, while customers and subcontractors may be obligated to indemnify us against certain liabilities, such third parties may refuse or be unable to pay us.
A failure to recover on these types of affirmative claims promptly and fully could have a negative impact on our financial position, results of operations, cash flows and liquidity.
Additionally, some of our contracts may include commodity price escalation clauses that partially protect us from increasing prices. We may enter into supply agreements or pre-purchase commodities to secure pricing and may use financial contracts to further manage price risk.
In order to manage or reduce commodity price risk, we monitor the costs of these commodities at the time of bid and price them into our contracts accordingly. Additionally, some of our contracts may include commodity price escalation clauses that partially protect us from increasing prices.
Consequently, our ability to resolve and recover on these types of claims has been and may continue to be delayed, which may adversely affect our liquidity and financial results.
Consequently, our ability to resolve and recover on these types of claims has been and may continue to be delayed, which may adversely affect our liquidity and financial results. While the adverse effects of COVID-19 have largely subsided, our business, financial condition and results of operation could be similarly impacted by any future public health crises.
Finally, the winding down or completion of work on significant projects could reduce our revenue and earnings if these projects have not been replaced. We are vulnerable to the cyclical nature of the markets we serve. The demand for our services is dependent upon the existence of projects with construction needs.
Moreover, construction projects for which our services are contracted may require significant expenditure by us prior to receiving payments from the customer. Finally, the winding down or completion of work on significant projects could reduce our revenue and earnings if these projects have not been replaced.
Significant price fluctuations could have a material adverse effect on financial position, results of operations, cash flows and liquidity 15 Table of Contents Supply chain interruptions, including availability of materials, products or equipment, may have a negative impact on our ability to complete projects. Our ability to complete projects may be affected by supply chain disruptions.
Supply chain interruptions, including availability of materials, products or equipment, may have a negative impact on our ability to complete projects. Our ability to complete projects may be affected by supply chain disruptions. We source input materials, including raw materials, products and/or equipment, from domestic and international suppliers.
There may be other adverse consequences to our business, financial condition and results of operations from the spread of COVID-19 that are not presently known or that have not yet become apparent. As a result, we cannot provide any assurance that the COVID-19 pandemic would not have a further adverse impact on our business, financial condition and results of operations.
In addition, public health crises may result in adverse consequences to our business, financial condition and results of operations not seen during the COVID-19 pandemic and that are not presently known or that have not yet become apparent. 21 Table of Contents In connection with acquisitions or divestitures, we may become subject to liabilities.
In a slower economy, our customers may decide to outsource less infrastructure services, reducing demand for our services.
In a slower economy, our customers may 13 Table of Contents decide to outsource less infrastructure services, reducing demand for our services. In addition, consolidation, competition or capital constraints in the industries we serve may result in reduced spending by our customers.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeLegal Proceedings Legal proceedings are discussed in Note 17 of the Notes to Consolidated Financial Statements and are incorporated herein by reference. ​ Item 4. Mine Safety Disclosures Not applicable. ​ 31 Table of Contents PART II
Biggest changeLegal Proceedings Legal proceedings are discussed in Note 17 of the Notes to Consolidated Financial Statements and are incorporated herein by reference. ​ Item 4. Mine Safety Disclosures Not applicable. ​ PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures ​ 31 PART II ​ 32 Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities ​ 32 Item 6. Reserved ​ 32 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations ​ 32
Biggest changeItem 4. Mine Safety Disclosures ​ 32 PART II ​ 32 Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities ​ 32 Item 6. Reserved ​ 33 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations ​ 33

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeWe may retain future earnings, if any, for future operations, expansion and debt repayment and have no current plans to pay cash dividends for the foreseeable future.
Biggest changeSuch numbers do not include Depository Trust Company participants or beneficial owners holding shares through nominee names. Dividends We have not paid any cash dividends on our Common Stock to date. We may retain future earnings, if any, for future operations, expansion and debt repayment and have no current plans to pay cash dividends for the foreseeable future.
In addition, our ability to pay dividends may be limited by covenants of any existing and future outstanding indebtedness we incur. We do not anticipate declaring any cash dividends to holders of Common Stock in the foreseeable future. ​
In addition, our ability to pay dividends may be limited by covenants of any existing and future outstanding indebtedness we incur. We do not anticipate declaring any cash dividends to holders of Common Stock in the foreseeable future. ​ 32 Table of Contents
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our Common Stock, and Warrants are publicly traded on the NYSE American LLC under the symbols “SLND” and “SLND WS”, respectively.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our Common Stock, and Warrants are publicly traded on the NYSE American under the symbols “SLND” and “SLND WS”, respectively. Holders As of March 20, 2026, we had 54,113,036 shares of Common Stock issued and outstanding held of record by 3,513 holders.
Removed
Holders As of February 24, 2025, we had 53,987,069 shares of Common Stock issued and outstanding held of record by 2,172 holders. Such numbers do not include Depository Trust Company participants or beneficial owners holding shares through nominee names. Dividends We have not paid any cash dividends on our Common Stock to date.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeThe primary differences from the federal statutory rate of 21% were (i) the revocation of Subchapter S-corporation status by Southland Holdings, LLC and its Qualified Subchapter S Subsidiary group of entities inclusive of Southland Contracting, Johnson Bros., Mole Constructors, Heritage Materials, and Southland RE Properties of $4.8 million, (ii) the benefit from the change in valuation allowance of $3.2 million primarily due to the change in domestic filing structure and the subsequent removal of the valuation allowance on American Bridge domestic deferred tax assets, (iii) the benefit from foreign tax rate differences of $5.5 million due to operations in jurisdictions like Canada and the Bahamas with different effective tax rates, and (iv) the permanent inclusion difference of foreign income through Section 951A Global Intangible Low-Taxed Income (GILTI) of $8.2 million net of related deduction.
Biggest changeThe primary differences from the federal statutory rate of 21% were (i) an increase in valuation allowance of $95.9 million for U.S. federal and foreign, (ii) state income tax expense of $10.1 million, net of valuation allowance (iii) the benefit of foreign tax rate differences of $0.2 million due to operations in jurisdictions like Canada and the Bahamas plus $0.9 million impact of the inclusion of foreign low taxed earnings into domestic taxable income through Section 951A Global Intangible Low-Taxed Income (GILTI).
In December 2024, the Company agreed to issue an aggregate of 5,830,899 shares of common stock (the “Shares”), par value $0.0001 per share, in exchange for the full satisfaction and discharge of an aggregate of $20.0 million in outstanding amounts under certain promissory notes held by Frank Renda, Rudy Renda and Tim Winn (the “Transaction”) with a price per share of $3.43, calculated using the greater of (a) the volume-weighted average price per share of Common Stock, rounded to the nearest hundredth of a cent, on NYSE for the thirty consecutive trading days immediately preceding and ending on December 27, 2024 and (b) the closing price of Common Stock on NYSE on December 27, 2024.
In December 2024, the Company agreed to issue an aggregate of 5,830,899 shares of common stock (the “Shares”), par value $0.0001 per share, in exchange for the full satisfaction and discharge of an aggregate of $20.0 million in outstanding amounts under certain promissory notes held by Frank Renda, Rudy Renda and Tim Winn (the “Transaction”) with a price per share of $3.43, calculated using the greater of (a) the volume-weighted average price per share of Common Stock, rounded to the nearest hundredth of a cent, on NYSE American for the thirty consecutive trading days immediately preceding and ending on December 27, 2024 and (b) the closing price of Common Stock on NYSE American on December 27, 2024.
As of December 31, 2024, we had a mortgage note expiring in February 2029. The interest rate on the mortgage note was 5.99%. The mortgage note is collateralized by certain real estate owned by Southland. Revolving Credit Facility In July 2021, we entered into a revolving credit facility agreement (“Revolving Credit Facility”) with Frost Bank for $50.0 million.
As of December 31, 2025, we had a mortgage note expiring in February 2029. The interest rate on the mortgage note was 5.99%. The mortgage note is collateralized by certain real estate owned by Southland. Revolving Credit Facility In July 2021, we entered into a revolving credit facility agreement (“Revolving Credit Facility”) with Frost Bank for $50.0 million.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2023. Key Business Metrics Non-GAAP Financial Measures In addition to our results determined in accordance with GAAP, we believe the following non-GAAP measures are useful in evaluating our operational performance.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2024. Key Business Metrics Non-GAAP Financial Measures In addition to our results determined in accordance with GAAP, we believe the following non-GAAP measures are useful in evaluating our operational performance.
EBITDA and Adjusted EBITDA In our industry, it is customary to manage our business using earnings before interest expense, income taxes, depreciation and amortization (“EBITDA”).
EBITDA In our industry, it is customary to manage our business using earnings before interest expense, income taxes, depreciation and amortization (“EBITDA”).
Comparisons of the Year Ended December 31, 2023 to the Year Ended December 31, 2022 For discussion of the results of operations for the year ended December 31, 2023 compared to the year ended December 31, 2022, refer to Part II. Item 7.
Comparisons of the Year Ended December 31, 2024 to the Year Ended December 31, 2023 For discussion of the results of operations for the year ended December 31, 2024, compared to the year ended December 31, 2023, refer to Part II. Item 7.
Comparisons of the Year Ended December 31, 2023 to the Year Ended December 31, 2022 For discussion of cash flows for the year ended December 31, 2023 compared to the year ended December 31, 2022, refer to Part II. Item 7.
Comparisons of the Year Ended December 31, 2024 to the Year Ended December 31, 2023 For discussion of cash flows for the year ended December 31, 2024, compared to the year ended December 31, 2023, refer to Part II. Item 7.
Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations — EBITDA and Adjusted EBITDA” of our Annual Report on Form 10-K for the year ended December 31, 2023. Backlog We define Backlog as a measure of the total amount of revenue remaining to be earned on projects that have been awarded.
Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations — EBITDA and Adjusted EBITDA” of our Annual Report on Form 10-K for the year ended December 31, 2024. Backlog 41 Table of Contents We define Backlog as a measure of the total amount of revenue remaining to be earned on projects that have been awarded.
See Note 23 of the Notes to the Consolidated Financial Statements for further detail about the timing of expected future payments . ​ Item 7A. Quantitative and Qualitative Disclosures About Market Risk Not applicable. ​ Item 8.
See Note 16 of the Notes to the Consolidated Financial Statements for further detail about the timing of expected future payments . ​ Item 7A. Quantitative and Qualitative Disclosures About Market Risk Not applicable. ​
For the year ended December 31, 2024, M&P contributed $100.6 million to revenue and $83.1 million in gross loss. See the Transportation portion of the Segment Results section of this Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for additional information.
See the Transportation portion of the Segment Results section of this Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for additional information. This compares to $100.6 million to revenue and $83.1 million to gross loss for the year ended December 31, 2024.
Net cash provided by investing activities was $3.2 million during the year ended December 31, 2024, compared to $4.5 million for the year ended December 31, 2023.
Net cash provided by investing activities was $3.4 million during the year ended December 31, 2025, compared to $3.2 million for the year ended December 31, 2024.
Contracts that are awarded, but not yet started, are included in Backlog once a contract has been fully executed and/or we have received a formal “Notice to Proceed” from the project owner. 39 Table of Contents ​ ​ ​ ​ (Amounts in thousands) Backlog Balance: December 31, 2022 ​ $ 2,973,885 New contracts, change orders, and adjustments ​ 1,011,797 Less: contract revenue recognized in 2023 ​ (1,150,716) Balance: December 31, 2023 ​ $ 2,834,966 New contracts, change orders, and adjustments ​ 718,125 Less: contract revenue recognized in 2024 ​ (980,179) Balance December 31, 2024 ​ $ 2,572,912 ​ Backlog should not be considered a comprehensive indicator of future revenue as many of our contracts can be terminated by our customers on relatively short notice, and Backlog does not include future work for which we may be awarded or new awards for which we are awaiting an executed contract or an authorized “Notice to Proceed.” In the event of a termination, we are typically reimbursed for all of our costs through a specific contractual date, our costs to demobilize from the project site, and in certain cases overhead costs and profit associated with the contract through the termination date.
Contracts that are awarded, but not yet started, are included in Backlog once a contract has been fully executed and/or we have received a formal “Notice to Proceed” from the project owner. ​ ​ ​ ​ (Amounts in thousands) ​ ​ ​ Backlog Balance: December 31, 2023 ​ $ 2,834,966 New contracts, change orders, and adjustments ​ 718,125 Less: contract revenue recognized in 2024 ​ (980,179) Balance: December 31, 2024 ​ $ 2,572,912 New contracts, change orders, and adjustments ​ 230,336 Less: contract revenue recognized in 2025 ​ (772,168) Balance December 31, 2025 ​ $ 2,031,080 ​ Backlog should not be considered a comprehensive indicator of future revenue as many of our contracts can be terminated by our customers on relatively short notice, and Backlog does not include future work for which we may be awarded or new awards for which we are awaiting an executed contract or an authorized “Notice to Proceed.” In the event of a termination, we are typically reimbursed for all of our costs through a specific contractual date, our costs to demobilize from the project site, and in certain cases overhead costs and profit associated with the contract through the termination date.
See Note 11 of the Notes to the Consolidated Financial Statements for further detail about our lease obligations and the timing of expected future payments. ● Amounts payable on promissory notes of $40.6 million (none of which are due in 2025).
See Note 11 of the Notes to the Consolidated Financial Statements for further detail about our lease obligations and the timing of expected future payments. ● Amounts payable on promissory notes of $33.9 million (none of which are due in 2026).
“Management’s Discussion and Analysis of Financial Condition and Results of Operations — Cash Flows” of our Annual Report on Form 10-K for the year ended December 31, 2023. As of December 31, 2024, we had long-term debt of $300.2 million, of which $44.5 million is due within the next twelve months.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations — Cash Flows” of our Annual Report on Form 10-K for the year ended December 31, 2024. As of December 31, 2025, we had long-term debt of $257.7 million, of which $53.7 million is due within the next twelve months.
An estimated cost at completion may fluctuate based on numerous items, including but not limited to: ● Complexity in original design, ● Owner-directed changes, ● Non-owner directed factors that necessitate change in scope or construction methodology, ● Differing site conditions, ● Productivity, ● Availability and cost of labor, equipment, or materials, ● Weather, ● Changes in technology, ● Governmental or environmental restrictions, ● Subcontractor and joint venture partner performance, ● Expected and unexpected cost of warranties, ● Insurance, legal, and consultant costs, and ● Time to recover, or not recover, additional contract costs. 34 Table of Contents We recognize the impact of any changes in estimated transaction price or estimated cost at completion on a cumulative catch-up basis.
An estimated cost at completion may fluctuate based on numerous items, including but not limited to: ● Complexity in original design, ● Owner-directed changes, ● Non-owner directed factors that necessitate change in scope or construction methodology, ● Differing site conditions, ● Productivity, ● Availability and cost of labor, equipment, or materials, ● Weather, ● Changes in technology, ● Governmental or environmental restrictions, ● Subcontractor and joint venture partner performance, ● Expected and unexpected cost of warranties, ● Insurance, legal, and consultant costs, and ● Time to recover, or not recover, additional contract costs.
Gross profit in our Civil segment for the year ended December 31, 2024, was $16.7 million, or 5.2% of segment revenue, compared to $51.7 million, or 15.3% of segment revenue, for the year ended December 31, 2023.
Gross profit in our Civil segment for the year ended December 31, 2025, was $16.3 million, or 4.8% of segment revenue, compared to $16.7 million, or 5.2% of segment revenue, for the year ended December 31, 2024.
Gross loss in our Transportation segment for the year ended December 31, 2024, was $79.8 million, or (12.1)% of segment revenue, compared to $15.9 million gross loss, or (1.9)% of segment revenue, for the year ended December 31, 2023.
Gross loss in our Transportation segment for the year ended December 31, 2025, was $171.6 million, or (39.9)% of segment revenue, compared to $79.8 million gross loss, or (12.1)% of segment revenue, for the year ended December 31, 2024.
The obligations under the Credit Facility are secured by a first lien on all assets of the Company, subject to permitted liens and interests of other parties as described in the Credit Agreement. As of December 31, 2024, the Company was in compliance with all financial covenants under the Credit Agreement.
The obligations under the Credit Facility are secured by a first lien on all assets of the Company, subject to permitted liens and interests of other parties as described in the Credit Agreement.
See Note 10 of the Notes to the Consolidated Financial Statements for further detail about our debt and the timing of expected future principal payments. ● Finance lease obligations of $7.4 million (of which $1.6 million are due in 2025) and operating lease obligations of $15.8 million (of which $9.5 million are due in 2025).
See Note 10 of the Notes to the Consolidated Financial Statements for further detail about our debt and the timing of expected future principal payments. ● Finance lease obligations of $15.5 million (of which $3.2 million are due in 2026) and operating lease obligations of $11.3 million (of which $5.1 million are due in 2026).
We believe the likelihood that Warrant holders will exercise their Warrants, and therefore the amount of cash proceeds that we would receive, is dependent upon the trading price of our Common Stock. On February 24, 2025, the closing price of our Common Stock was $3.23 per share.
We believe the likelihood that Warrant holders will exercise their Warrants, and therefore the amount of cash proceeds that we would receive, is dependent upon the trading price of our Common Stock. On March 20, 2026, the closing price of our Common Stock was $0.92 per share.
The undrawn portion of the Delayed Draw is subject to a 3.75% commitment fee, payable monthly. Any principal prepayments in the first three years, other than mandatory prepayments pursuant to the Credit Agreement, will be subject to additional fees. In the first year, any prepayments will incur fees of 3% or the make-whole premium, whichever is higher.
Any principal prepayments in the first three years, other than mandatory prepayments pursuant to the Credit Agreement, will be subject to additional fees. In the first year, any prepayments will incur fees of 3% or the make-whole premium, whichever is higher.
Additionally, as part of the refinancing, we incurred a loss on extinguishment of debt of $0.6 million, which was included in other income, net on our consolidated statements of operations and $0.6 million as bank service charges in connection with the refinancing. As of December 31, 2024, we had outstanding secured notes expiring between December 2025 and March 2033.
Additionally, as part of the refinancing, we incurred a loss on extinguishment of debt of $0.6 million, which was included in other income, net on our consolidated statements of operations and $0.6 million as bank service charges in connection with the refinancing.
Cash Flows Comparisons of the Year Ended December 31, 2024 to the Year Ended December 31, 2023 The following table sets forth summary change in cash, cash equivalent and restricted cash for the years ended December 31, 2024 and December 31, 2023: ​ ​ ​ ​ ​ ​ ​ (Amounts in thousands) December 31, 2024 December 31, 2023 Net cash provided by (used in) operating activities ​ $ 1,927 ​ $ (10,264) Net cash provided by investing activities ​ 3,228 ​ 4,488 Net cash provided by (used in) financing activities ​ 18,781 ​ (2,590) Effect of exchange rate changes ​ (195) ​ 195 Net change in cash, cash equivalents, and restricted cash ​ $ 23,741 ​ $ (8,171) ​ Net cash provided by operating activities was $1.9 million during the year ended December 31, 2024, compared to net cash used in operating activities of $10.3 million for the year ended December 31, 2023.
Cash Flows Comparisons of the Year Ended December 31, 2025 to the Year Ended December 31, 2024 The following table sets forth summary change in cash, cash equivalent and restricted cash for the years ended December 31, 2025 and December 31, 2024: ​ ​ ​ ​ ​ ​ ​ (Amounts in thousands) ​ ​ ​ December 31, 2025 ​ ​ ​ December 31, 2024 Net cash provided by operating activities ​ $ 16,581 ​ $ 1,927 Net cash provided by investing activities ​ 3,392 ​ 3,228 Net cash provided by (used in) financing activities ​ (40,151) ​ 18,781 Effect of exchange rate changes ​ 85 ​ (195) Net change in cash, cash equivalents, and restricted cash ​ $ (20,093) ​ $ 23,741 ​ Net cash provided by operating activities was $16.6 million during the year ended December 31, 2025, compared to $1.9 million for the year ended December 31, 2024.
The Credit Facility has a maturity date of September 30, 2028. A portion of the proceeds from the Term Loan was used to pay in full all outstanding amounts under the revolving credit facility, and the revolving credit facility was terminated.
The Credit Facility has a maturity date of September 30, 2028. A portion of the proceeds from the Term Loan was used to pay in full all outstanding amounts under the revolving credit facility, and the revolving credit facility was terminated. The Credit Agreement requires quarterly principal payments on the Term Loan, which commenced on December 31, 2024.
Equipment ownership and ability to self-perform across numerous disciplines are two of our significant competitive advantages. We believe that the primary factors influencing competition in our industry are price, reputation for quality, safety, schedule certainty, relevant experience, availability of field supervision and skilled labor, machinery and equipment, financial strength, as well as knowledge of local markets and conditions.
We believe that the primary factors 33 Table of Contents influencing competition in our industry are price, reputation for quality, safety, schedule certainty, relevant experience, availability of field supervision and skilled labor, machinery and equipment, financial strength, as well as knowledge of local markets and conditions.
Selling, general, and administrative costs Selling, general, and administrative costs for the year ended December 31, 2024, were $63.3 million, a decrease of $3.9 million, or 5.8%, compared to the year ended December 31, 2023. The decrease was primarily driven by a $5.2 million decrease in compensation offset by a $1.4 million increase in professional fees.
Selling, general, and administrative costs Selling, general, and administrative costs for the year ended December 31, 2025, were $61.6 million, a decrease of $1.7 million, or 2.6%, compared to the year ended December 31, 2024. The decrease was primarily driven by a $2.4 million decrease in compensation expense, offset by a $0.9 million increase in business transformation expense.
Cost of construction Cost of construction for the year ended December 31, 2024, was $1,043.2 million, a decrease of $81.4 million, or 7.2%, compared to the year ended December 31, 2023.
Cost of construction Cost of construction for the year ended December 31, 2025, was $927.4 million, a decrease of $115.8 million, or 11.1%, compared to the year ended December 31, 2024.
Overview Southland is a diverse leader in specialty infrastructure construction with roots dating back to 1900. The end markets for which we provide services cover a broad spectrum of specialty services within infrastructure construction. We design and construct projects in the bridges, tunnels, communications, transportation and facilities, marine, steel structures, water and wastewater treatment, and water pipelines end markets.
Overview Southland is a diverse leader in specialty infrastructure construction with roots dating back to 1900. The end markets for which we provide services cover a broad spectrum of specialty services within infrastructure construction.
During the year ended December 31, 2024, the primary drivers in the $3.2 million in cash provided by investing activities were $6.5 million in proceeds from sale of property and equipment and $4.1 million in distributions received from investees, offset by $7.4 million in purchases of property and equipment. 41 Table of Contents Net cash provided by financing activities was $18.8 million during the year ended December 31, 2024, compared to net cash used in financing activities of $2.6 million for the year ended December 31, 2023.
During the year ended December 31, 2025, the primary drivers in the $3.4 million in cash provided by investing activities were $6.5 million in proceeds from sale of property and equipment and $0.9 million in distributions received from investees, offset by $3.8 million in purchases of property and equipment.
With the combined capabilities of these six primary subsidiaries, Southland has become a diversified industry leader with projects spanning North America in various end markets. 32 Table of Contents Key Factors Affecting Results of Operations Business Environment Our Civil segment primarily operates throughout North America and specializes in services that include the design and construction of water pipeline, pump stations, lift stations, water and wastewater treatment plants, concrete and structural steel, outfall, and tunneling.
Key Factors Affecting Results of Operations Business Environment Our Civil segment primarily operates throughout North America and specializes in services that include the design and construction of water pipeline, pump stations, lift stations, water and wastewater treatment plants, concrete and structural steel, outfall, and tunneling.
Risk Factors ” for further discussion of related risks. We are exposed to market risks relating to fluctuations in interest rates and currency exchange risks. Significant changes in market conditions could cause interest rates to increase and have a material impact on our free cash flow and the financing needed to operate our business.
Significant changes in market conditions could cause interest rates to increase and have a material impact on our free cash flow and the financing needed to operate our business.
Below is a reconciliation of net loss to these non-GAAP financial measures. ​ Comparisons of the Year Ended December 31, 2024 to the Year Ended December 31, 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended (Amounts in thousands) December 31, 2024 December 31, 2023 Net loss attributable to Southland Stockholders ​ $ (105,365) ​ $ (19,253) Depreciation and amortization ​ 23,298 ​ 30,529 Income tax benefit ​ (46,892) ​ (8,527) Interest expense ​ 29,512 ​ 19,471 Interest income ​ (991) ​ (1,143) EBITDA ​ ​ (100,438) ​ ​ 21,077 Transaction related costs ​ ​ — ​ ​ 1,594 Contingent earnout consideration non-cash expense reversal ​ ​ — ​ ​ (20,689) Adjusted EBITDA ​ $ (100,438) ​ $ 1,982 ​ Comparisons of the Year Ended December 31, 2023 to the Year Ended December 31, 2022 For discussion of EBITDA and Adjusted EBITDA for the year ended December 31, 2023 compared to the year ended December 31, 2022, refer to Part II.
Below is a reconciliation of net loss to these non-GAAP financial measures. ​ Comparisons of the Year Ended December 31, 2025 to the Year Ended December 31, 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended (Amounts in thousands) ​ ​ ​ December 31, 2025 ​ ​ ​ December 31, 2024 ​ ​ ​ Net loss attributable to Southland Stockholders ​ $ (306,540) ​ $ (105,365) ​ Depreciation and amortization ​ 23,213 ​ 23,298 ​ Income tax expense (benefit) ​ 56,497 ​ (46,892) ​ Interest expense ​ 37,019 ​ 29,512 ​ Interest income ​ (1,610) ​ (991) ​ EBITDA ​ $ (191,421) ​ $ (100,438) ​ ​ Comparisons of the Year Ended December 31, 2024 to the Year Ended December 31, 2023 For discussion of EBITDA and Adjusted EBITDA for the year ended December 31, 2024 compared to the year ended December 31, 2023, refer to Part II.
Southland recorded the increased estimated future costs to finish these projects during the year ended December 31, 2023, in accordance with GAAP. The Company has concluded this action with M&P does not qualify for Discontinued Operations treatment and presentation under ASC 205-20 as it does not represent a strategic shift in the Company’s business.
The Company has concluded this action with M&P does not qualify for Discontinued Operations treatment and presentation under ASC 205-20 as it does not represent a strategic shift in the Company’s business. For the year ended December 31, 2025, M&P contributed $52.1 million to revenue and $42.8 million in gross loss.
In connection with the closing of the Business Combination, holders of 25,296,280 shares of Common Stock, or 91.7% of the shares with redemption rights, exercised their right to redeem their shares at a redemption price of $10.30 per share.
Our principal uses of cash typically include the funding of working capital obligations, debt service, and investment in machinery and equipment for our projects. 42 Table of Contents In connection with the closing of the Business Combination, holders of 25,296,280 shares of Common Stock, or 91.7% of the shares with redemption rights, exercised their right to redeem their shares at a redemption price of $10.30 per share.
In light of the high level of redemptions, we may seek cash from (x) increasing institutional borrowings or increase the amount of our revolving credit facility, (y) selling off unused or underutilized construction assets, or (z) 40 Table of Contents expediting our claim settlements.
In light of the high level of redemptions, we may seek cash from (x) increasing institutional borrowings, (y) selling unused or underutilized construction assets, or (z) settling our outstanding disputes and claims.
On August 16, 2022, the Inflation Reduction Act (“IRA”) was enacted in the United States. Among other provisions, the IRA included a new 15% Corporate Alternative Minimum Tax (“CAMT”) for corporations with financial income in excess of $1 billion and a 1% excise tax on corporate share repurchases.
Among other provisions, the IRA included a new 15% Corporate Alternative Minimum Tax (“CAMT”) for corporations with financial income in excess of $1 billion and a 1% excise tax on corporate share repurchases. The CAMT is effective for tax years beginning on or after January 1, 2023.
Transportation Revenue in our Transportation segment for the year ended December 31, 2024, was $656.9 million, a decrease of $166.0 million, or 20.2%, compared to the year ended December 31, 2023.
Transportation Revenue in our Transportation segment for the year ended December 31, 2025, was $429.8 million, a decrease of $227.1 million, or 34.6%, compared to the year ended December 31, 2024.
Contractual Obligations Our contractual obligations and commitments as of December 31, 2024, include: 43 Table of Contents ● Debt obligations of $306.6 million (of which $44.5 million are due in 2025).
Contractual Obligations Our contractual obligations and commitments as of December 31, 2025, include: ● Debt obligations of $262.7 million (of which $53.7 million are due in 2026).
This can result in the recognition of revenue in a current period related to the satisfaction of performance obligations that occurred or partially occurred in a prior period. This can also result in the reversal of revenue recognized in a prior period, in the current period.
This can also result in the reversal of revenue recognized in a prior period, in the current period.
During the year ended December 31, 2024, the primary drivers in the $1.9 million in cash provided by operating activities were a decrease of $70.7 million in contract assets, an increase of $56.4 million in contract liabilities and $23.3 million in depreciation and amortization, offset by $105.5 million in gross loss and $44.8 million in deferred taxes.
During the year ended December 31, 2025, the primary drivers in the $16.6 million in cash provided by operating activities were a decrease of $116.8 million in contract assets, the increase of $89.1 million increase in other noncurrent liabilities, deferred taxes of $57.3 million, an increase of $23.6 million in accounts payable, retainage payable and accrued liabilities, $23.2 million in depreciation and amortization and a decrease of $23.0 million in accounts receivable, offset by $308.4 million in net loss.
Our business may also be affected by overall economic market conditions, including but not limited to declines in spending by project owners, delays in new projects, by changes in client schedules, or for other reasons. 33 Table of Contents Critical Accounting Policies and Estimates The preparation of consolidated financial statements in conformity with the accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities as of the date of the financial statements and the reported amounts of revenues and expenses earned and incurred, respectively, during the reporting period.
Critical Accounting Policies and Estimates The preparation of consolidated financial statements in conformity with the accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities as of the date of the financial statements and the reported amounts of revenues and expenses earned and incurred, respectively, during the reporting period.
EBITDA assists management and the Board and may be useful to investors 38 Table of Contents in comparing our operating performance consistently over time as it removes the impact of our capital structure and expenses that do not relate to our core operations. Additionally, it is also customary to analyze our business using Adjusted EBITDA.
EBITDA assists management and the Board and may be useful to investors in comparing our operating performance consistently over time as it removes the impact of our capital structure and expenses that do not relate to our core operations. Non-GAAP financial measures should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP.
Corporation’s separate state filings and Southland Mole of Canada, and (iv) the benefit of the release of uncertain tax position liability previously recorded for American Bridge federal NOL and depreciation matters prior to 2020 tax year. Income tax benefit for the year ended December 31, 2023, was $8.5 million, or an effective rate of 31.3%.
Corporation’s separate state filings and Southland Mole of Canada, and (iv) the benefit of the release of uncertain tax position liability previously recorded for American Bridge federal NOL and depreciation matters prior to 2020 tax year. On August 16, 2022, the Inflation Reduction Act (“IRA”) was enacted in the United States.
The increase is primarily driven by an increase in external borrowings compared to the prior year and higher interest rates on the additional borrowings. Income tax benefit Income tax benefit for the year ended December 31, 2024, was $46.9 million or an effective tax rate of 30.8%.
Income tax benefit for the year ended December 31, 2024, was $46.9 million or an effective tax rate of 30.8%.
Southland is based in Grapevine, Texas. It is the parent company of Johnson Bros. Corporation, American Bridge Company, Oscar Renda Contracting, Southland Contracting, Mole Constructors, and Heritage Materials.
We design and construct projects in the bridges, tunnels, communications, data centers, transportation and facilities, marine, steel structures, water and wastewater treatment, and water pipelines end markets. Southland is based in Grapevine, Texas. It is the parent company of Johnson Bros. Corporation, American Bridge Company, Oscar Renda Contracting, Southland Contracting, Heritage Materials and Mole Constructors.
The CAMT is effective for tax years beginning on or after January 1, 2023. As of December 31, 2024, the excise tax on corporate share repurchases is not expected to impact the Company as the Company has no plans for repurchases in the coming year.
As of December 31, 2025, the excise tax on corporate share repurchases is not expected to impact the Company as the Company has no plans for repurchases in the coming year. On December 14, 2023, the FASB issued ASU 2023-09 which established new income tax disclosure requirements.
The amortization for the Delayed Draw will also be paid quarterly and apply to each individual draw at the same prevailing quarterly rate that is in effect for the Term Loan and will commence with the first full quarter after the draw date of any Delayed Draw. 42 Table of Contents The interest on amounts drawn under the Credit Facility is payable monthly at a rate of 7.25% per annum plus the higher of (i) 90-day Secured Overnight Financing Rate (“SOFR”) with a credit adjustment spread of 0.15% or (ii) 3%.
The interest on amounts drawn under the Credit Facility is payable monthly at a rate of 7.25% per annum plus the higher of (i) 90-day Secured Overnight Financing Rate (“SOFR”) with a credit adjustment spread of 0.15% or (ii) 3%.
Segment Results ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ (Amounts in thousands) December 31, 2024 December 31, 2023 ​ ​ ​ ​ ​ % of Total ​ ​ ​ ​ % of Total Segment Revenue Revenue Revenue Revenue Civil ​ $ 323,288 33.0 % $ 337,524 29.1 % Transportation ​ 656,891 67.0 % 822,893 70.9 % Total revenue ​ $ 980,179 100.0 % $ 1,160,417 100.0 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ (Amounts in thousands) ​ December 31, 2024 ​ December 31, 2023 ​ ​ ​ % of Segment ​ ​ % of Segment Segment ​ Gross Profit Revenue ​ Gross Profit Revenue ​ Civil ​ $ 16,725 5.2 % $ 51,686 15.3 % Transportation ​ (79,765) (12.1) % (15,872) (1.9) % Gross profit (loss) ​ $ (63,040) (6.4) % $ 35,814 3.1 % ​ 37 Table of Contents Civil Revenue in our Civil segment for the year ended December 31, 2024, was $323.3 million, a decrease of $14.2 million, or 4.2%, compared to the year ended December 31, 2023.
This standard has been adopted for the year ended December 31, 2025. 39 Table of Contents Segment Results ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ (Amounts in thousands) ​ ​ ​ December 31, 2025 ​ ​ ​ December 31, 2024 ​ ​ ​ ​ ​ % of Total ​ ​ ​ ​ % of Total Segment ​ ​ ​ Revenue ​ ​ ​ Revenue ​ ​ ​ Revenue ​ ​ ​ Revenue ​ ​ ​ ​ Civil ​ $ 342,330 44.3 % $ 323,288 33.0 % Transportation ​ 429,838 55.7 % 656,891 67.0 % Total revenue ​ $ 772,168 100.0 % $ 980,179 100.0 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ (Amounts in thousands) ​ December 31, 2025 ​ December 31, 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ % of Segment ​ ​ ​ ​ ​ ​ ​ ​ % of Segment Segment ​ Gross Profit Revenue ​ Gross Profit Revenue ​ Civil ​ $ 16,344 4.8 % $ 16,725 5.2 % Transportation ​ (171,603) (39.9) % (79,765) (12.1) % Total gross profit (loss) ​ $ (155,259) (20.1) % $ (63,040) (6.4) % ​ Civil Revenue in our Civil segment for the year ended December 31, 2025, was $342.3 million, an increase of $19.0 million, or 5.9%, compared to the year ended December 31, 2024.
To determine estimated transaction price and estimated cost at completion we rely on our experience, and outside expert opinions on an as needed basis, with particular types of projects and customers using information that is reasonably available to us.
To determine estimated transaction price and estimated cost at completion we rely on our experience, and outside expert opinions on an as needed basis, with particular types of projects and customers using information that is reasonably available to us. 34 Table of Contents An estimated transaction price can be impacted by numerous items related to variable consideration, including but not limited to: claims, approved and pending changes orders, unpriced change orders, completion incentives, liquidated damages, penalties, and other contractual provisions.
In an effort to wind down this component of its Transportation segment and reallocate resources towards core operations, the Company sold various materials production assets. As a result, the Company recorded unfavorable charges during the year ended December 31, 2023 related to additional expected future costs associated with procuring and transporting materials from third parties.
As a result, the Company recorded unfavorable charges during the year ended December 31, 2023 related to additional expected future costs associated with procuring and transporting materials from third parties. Southland recorded the increased estimated future costs to finish these projects during the year ended December 31, 2023, in accordance with GAAP.
As of December 31, 2024, approximately 6.3% of Southland’s Backlog was in M&P, and Southland estimates most of the active scope of this work to be substantially completed in the next twelve months. 35 Table of Contents Results of Operations Comparisons of the Year Ended December 31, 2024 to the Year Ended December 31, 2023 The following table sets forth our consolidated statements of operations for the years ended December 31, 2024 and December 31, 2023: ​ ​ ​ ​ ​ ​ ​ (Amounts in thousands) December 31, 2024 December 31, 2023 Revenue ​ $ 980,179 ​ $ 1,160,417 Cost of construction ​ 1,043,219 ​ 1,124,603 Gross profit (loss) ​ (63,040) ​ 35,814 Selling, general, and administrative expenses ​ 63,274 ​ 67,195 Operating loss ​ (126,314) ​ (31,381) Gain (loss) on investments, net ​ (225) ​ 30 Other income, net ​ 3,631 ​ 23,580 Interest expense ​ (29,512) ​ (19,471) Losses before income taxes ​ (152,420) ​ (27,242) Income tax benefit ​ (46,892) ​ (8,527) Net loss ​ (105,528) ​ (18,715) Net income (loss) attributable to noncontrolling interests ​ (163) ​ 538 Net loss attributable to Southland Stockholders ​ $ (105,365) ​ $ (19,253) ​ Revenue Revenue for the year ended December 31, 2024, was $980.2 million, a decrease of $180.2 million, or 15.5%, compared to the year ended December 31, 2023.
Results of Operations Comparisons of the Year Ended December 31, 2025 to the Year Ended December 31, 2024 The following table sets forth our consolidated statements of operations for the years ended December 31, 2025 and December 31, 2024: ​ ​ ​ ​ ​ ​ ​ (Amounts in thousands) ​ ​ ​ December 31, 2025 ​ ​ ​ December 31, 2024 Revenue ​ $ 772,168 ​ $ 980,179 Cost of construction ​ 927,427 ​ 1,043,219 Gross loss ​ (155,259) ​ (63,040) Selling, general, and administrative expenses ​ 61,623 ​ 63,274 Operating loss ​ (216,882) ​ (126,314) Gain (loss) on investments, net ​ 291 ​ (225) Other income, net ​ 1,744 ​ 3,631 Interest expense ​ (37,019) ​ (29,512) Losses before income taxes ​ (251,866) ​ (152,420) Income tax expense (benefit) ​ 56,497 ​ (46,892) Net loss ​ (308,363) ​ (105,528) Net loss attributable to noncontrolling interests ​ (1,823) ​ (163) Net loss attributable to Southland Stockholders ​ $ (306,540) ​ $ (105,365) ​ Revenue Revenue for the year ended December 31, 2025, was $772.2 million, a decrease of $208.0 million, or 21.2%, compared to the year ended December 31, 2024.
The Credit Agreement provides for a four-year secured $160.0 million term loan facility (the “Credit Facility”), consisting of a $140.0 million initial draw term loan (the “Term Loan”) and a $20.0 million committed delayed draw term loan (the “Delayed Draw”).
On September 30, 2024, the Company entered into the Credit Agreement with Callodine Commercial Finance, LLC as administrative agent and lender. ​ The Credit Agreement provides for a four-year secured $140.0 million term loan facility (the “Credit Facility”), consisting of a $140.0 million initial draw term loan (the “Term Loan”).
Gross profit (loss) Gross loss for the year ended December 31, 2024, was $63.0 million, an increase of $98.9 million, or 276.0%, compared to the year ended December 31, 2023.
Gross loss 38 Table of Contents Gross loss for the year ended December 31, 2025, was $155.3 million, an increase of $92.2 million, or 146.3%, compared to the year ended December 31, 2024.
In the second quarter of 2023, Southland decided to discontinue certain types of projects in its Materials & Paving business line (“M&P”) and sold assets related to producing large scale concrete and asphalt. M&P is reported in the Transportation segment.
The total impact to our consolidated balance sheets is a $40.3 million reduction in contract assets, a $6.4 million reduction in retainage receivables, and a $89.1 million increase in other noncurrent liabilities. 37 Table of Contents Materials and Paving In the second quarter of 2023, Southland decided to discontinue certain types of projects in its Materials & Paving business line (“M&P”) and sold assets related to producing large scale concrete and asphalt.
Civil ​ ​ ​ ​ ​ (Amounts in thousands) ​ Balance December 31, 2022 ​ $ 760,163 New contracts, change orders, and adjustments ​ 199,372 Less: contract revenue recognized in 2023 ​ (325,077) Balance December 31, 2023 ​ $ 634,458 New contracts, change orders, and adjustments ​ 643,433 Less: contract revenue recognized in 2024 ​ (316,684) Balance December 31, 2024 ​ $ 961,207 ​ Transportation ​ ​ ​ ​ ​ (Amounts in thousands) ​ Balance December 31, 2022 ​ $ 2,213,722 New contracts, change orders, and adjustments ​ 812,425 Less: contract revenue recognized in 2023 ​ (825,639) Balance December 31, 2023 ​ $ 2,200,508 New contracts, change orders, and adjustments ​ 74,692 Less: contract revenue recognized in 2024 ​ (663,495) Balance December 31, 2024 ​ $ 1,611,705 ​ Liquidity, Capital Commitments and Resources ​ Our principal sources of liquidity are cash generated from operations, funds from borrowings, and existing cash on hand.
Civil ​ ​ ​ ​ ​ (Amounts in thousands) ​ ​ ​ ​ Balance December 31, 2023 ​ $ 634,458 New contracts, change orders, and adjustments ​ 643,433 Less: contract revenue recognized in 2024 ​ (316,684) Balance December 31, 2024 ​ $ 961,207 New contracts, change orders, and adjustments ​ 177,033 Less: contract revenue recognized in 2025 ​ (339,422) Balance December 31, 2025 ​ $ 798,818 ​ Transportation ​ ​ ​ ​ ​ (Amounts in thousands) ​ ​ ​ ​ Balance December 31, 2023 ​ $ 2,200,508 New contracts, change orders, and adjustments ​ 74,692 Less: contract revenue recognized in 2024 ​ (663,495) Balance December 31, 2024 ​ $ 1,611,705 New contracts, change orders, and adjustments ​ 53,303 Less: contract revenue recognized in 2025 ​ (432,746) Balance December 31, 2025 ​ $ 1,232,262 ​ Liquidity, Capital Commitments and Resources ​ As of December 31, 2025, the Company had cash and cash equivalents of $52.7 million and positive working capital of approximately $79.0 million.
During the year ended December 31, 2024, the primary drivers in the $18.8 million cash provided by financing activities were $168.1 million of borrowing on notes payable and $42.5 million in proceeds from financing obligations, offset by $95.0 million in payments on the revolving credit facility, $89.8 in payments on notes payable and $8.0 million in payments of deferred financing costs.
During the year ended December 31, 2025, the primary drivers in the $40.2 million in cash used in financing activities were $50.7 million in payments on notes payable offset by $14.1 million in proceeds from advancement of surety funds.
If such an event were to occur, we may be unable to borrow under our revolving credit facility agreement or may be required to seek additional financing. In addition, we may be required to seek additional financing to refinance all or a significant portion of our existing debt on or prior to maturity.
In addition, we may be required to seek additional financing to refinance all or a significant portion of our existing debt on or prior to maturity. We may also seek to access the public or private equity markets to support our liquidity whenever conditions are favorable to us.
We may also seek to access the public or private equity markets to support our liquidity whenever conditions are favorable to us. There can be no assurance that we will be able to raise additional capital or obtain additional financing when needed or on terms that are favorable to us. See “ Item 1A.
There can be no assurance that we will be able to raise additional capital or obtain additional financing when needed or on terms that are favorable to us. See “ Item 1A. Risk Factors ” for further discussion of related risks. We are exposed to market risks relating to fluctuations in interest rates and currency exchange risks.
The increase was primarily due to project delays and increases in the cost of materials which led to a $63.9 million increase in gross loss in our Transportation segment and a $35.0 million decrease in gross profit in our Civil segment.
The increase in gross loss was attributable to a $91.8 million increase in gross loss in our Transportation segment primarily due to an unfavorable adjustment related to the WSCC Ruling and a $0.4 million decrease in gross profit in our Civil segment primarily due to unfavorable adjustments related to claims.
Other income, net Other income, net for the year ended December 31, 2024 was $3.6 million, a decrease of $19.9 million, or 84.6%, compared to the year ended December 31, 2023.
Other income, net Other income, net for the year ended December 31, 2025 was $1.7 million, a decrease of $1.9 million, or 52.0%, compared to the year ended December 31, 2024. The decrease was primarily driven by the absence of prior year present value accretion related to the Tappan Zee Constructors investment.
The decrease was attributable to a $166.0 million decrease in revenue in our Transportation segment primarily due to impacts related to exiting the M&P business line and a $14.2 million decrease in our Civil segment primarily due to projects that were substantially completed in 2023 compared to 2024, which was partially offset by new projects started in 2024.
The decrease was attributable to a $227.1 million decrease in revenue in our Transportation segment primarily due to projects approaching completion offset by a $19.0 million increase in our Civil segment primarily due to projects substantially started after December 31, 2024.
The decrease was comprised of a $102.1 million decrease in our Transportation segment due to impacts related to exiting the M&P business line and more projects nearing substantial completion in 2024 compared to 2023, and a $20.7 million increase in our Civil segment due to new projects started in 2024, partially offset by projects that were substantially completed in 2023 compared to 2024.
The decrease was attributable to a $135.2 million decrease in our Transportation segment primarily due to projects nearing completion offset by a $19.4 million increase in our Civil segment primarily due to projects substantially started after December 31, 2024.
Interest rates on the secured notes range between 0.00% and 12.90%. The secured notes are collateralized by certain assets of Southland’s fleet of equipment. On September 30, 2024, the Company entered into a term loan and security agreement (the “Credit Agreement”) with Callodine Commercial Finance, LLC as administrative agent (“Administrative Agent”) and lender.
As of December 31, 2025, we had outstanding secured notes expiring between March 2027 and March 2033. 44 Table of Contents Interest rates on the secured notes range between 0.00% and 12.90%. The secured notes are collateralized by certain assets of Southland’s fleet of equipment.
Recent Events See section titled "Basis of Presentation” discussing the consummation of the Merger.
In the event the deferred tax valuation allowance is released, we would record an income tax benefit for a portion or all of the deferred tax valuation allowance released. Recent Events See section titled "Basis of Presentation” discussing the consummation of the Merger.
The decrease of $35.0 million for the year ended December 31, 2024, was due to project delays and increases in the cost of materials which led to decreases in profit contribution of $29.9 million from a tunnel and marine project in Canada, $10.0 million from a tunnel project in Texas and $4.2 million from a water pipeline project in Oklahoma, offset by an increase in profit contribution of $8.4 million from a water project in North Dakota, for the year ended December 31, 2024 versus the same period in 2023.
The decrease of $0.4 million for the year ended December 31, 2025, was due to the decrease in profit contribution of $20.1 million in unfavorable adjustments related to claims during the three months ended December 31, 2025, and $12.9 million from a tunnel project in the Southwest due to project delays.
The decrease was primarily driven by a reversal of a non-cash contingent liability in 2023 due to changes in the likelihood of earnout shares being issued based on 2023 performance. 36 Table of Contents Interest expense Interest expense for the year ended December 31, 2024, was $29.5 million, an increase of $10.0 million, or 51.6%, compared to the year ended December 31, 2023.
Interest expense Interest expense for the year ended December 31, 2025, was $37.0 million, an increase of $7.5 million, or 25.4%, compared to the year ended December 31, 2024.
The decrease was primarily attributable to decreased revenues of $48.7 million from projects substantially completed in 2023, offset by increased revenues of $33.0 million on a water project in North Dakota, for the year ended December 31, 2024 versus the same period in 2023.
The decrease was also primarily attributable to decreased revenues of $47.8 million from the WSCC Ruling due to an unfavorable adjustment related to claims. These decreases were offset by increased revenue of $31.5 million from a bridge project in the Southeast primarily due to the project being substantially started after December 31, 2024.
Removed
An estimated transaction price can be impacted by numerous items related to variable consideration, including but not limited to: claims, approved and pending changes orders, unpriced change orders, completion incentives, liquidated damages, penalties, and other contractual provisions.
Added
With the combined capabilities of these six primary subsidiaries, Southland has become a diversified industry leader with projects spanning North America in various end markets.
Removed
This compares to the $188.3 million to revenue and $86.6 million to gross loss for the year ended December 31, 2023.
Added
Equipment ownership and ability to self-perform across numerous disciplines are two of our significant competitive advantages.
Removed
On December 14, 2023, the FASB issued ASU 2023-09 which established new income tax disclosure requirements. Public business entities must apply the guidance to annual periods beginning after December 15, 2024. This standard has not been elected for early adoption this period but will be implemented for the next annual period, as required.
Added
Our business may also be affected by overall economic market conditions, including but not limited to declines in spending by project owners, delays in new projects, by changes in client schedules, or for other reasons.
Removed
We are currently evaluating the impact ASU 2023-09 will have on our consolidated financial statements and related disclosures.
Added
We recognize the impact of any changes in estimated transaction price or estimated cost at completion on a cumulative catch-up basis. This can result in the recognition of revenue in a current period related to the satisfaction of performance obligations that occurred or partially occurred in a prior period.
Removed
The decrease was primarily attributable to decreased revenues of $87.7 million from the M&P line, a net $65.8 million from two projects in the Bahamas as one is nearing completion and a second began construction activities and $11.2 million from projects substantially completed in 2023, for the year ended December 31, 2024 versus the same period in 2023.
Added
Valuation Allowances for Deferred Tax Assets We record income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in our financial statements or tax returns.
Removed
The increase of $63.9 million in gross loss was primarily due to project delays and increases in the cost of materials which led to decreases in profit contribution of $25.0 million from bridge project in the Midwest and $17.4 million from a street maintenance project in Texas, for the year ended December 31, 2024 versus the same period in 2023.
Added
Deferred tax assets and liabilities are measured using the currently enacted tax rates that apply to taxable income in effect for the years in which those tax assets and liabilities are expected to be realized or settled. We assess the likelihood that our deferred tax assets will be recoverable based on expected future taxable income.
Removed
The increase in gross loss was also primarily due to a project nearing completion which led to decreases in profit contribution of $20.7 million from a project in the Bahamas, for the year ended December 31, 2024 versus the same period in 2023.

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Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

2 edited+0 added−1 removed5 unchanged
Biggest changeAt the closing of the Business Combination, the Company issued 33,793,111 shares of common stock to the former members of Southland (“Southland Members”) in exchange for their membership interests in Southland (“Southland Membership Interests”).
Biggest changeHolders of 25,193,748 shares of Legato II common stock elected to have their shares redeemed in connection with the Business Combination. At the closing of the Business Combination, the Company issued 33,793,111 shares of common stock to the former members of Southland (“Southland Members”) in exchange for their membership interests in Southland (“Southland Membership Interests”).
Our common stock, par value $0.0001 per share (“Common Stock”), and redeemable warrants, exercisable for shares of Common Stock at an exercise price of $11.50 per share (“Warrants”), trade on NYSE under the symbols “SLND” and “SLND WS,” respectively. ​ ​ 2 Table of Contents Part I
Our common stock, par value $0.0001 per share (“Common Stock”), and redeemable warrants, exercisable for shares of Common Stock at an exercise price of $11.50 per share (“Warrants”), trade on NYSE American under the symbols “SLND” and “SLND WS,” respectively. ​ ​ 2 Table of Contents Part I
Removed
As such, reporting periods prior to the three months ended March 31, 2023, will not present share or per share data. Holders of 25,193,748 shares of Legato II common stock elected to have their shares redeemed in connection with the Business Combination.

Other SLND 10-K year-over-year comparisons