UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2026
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission File Number 1-13752
Smith-Midland Corporation
(Exact name of Registrant as specified in its charter)
Delaware
54-1727060
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
5119 Catlett Road, P.O. Box 300
Midland, VA 22728
(Address, zip code of principal executive offices)
(540) 439-3266
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol
Name of each exchange on which registered
Common Stock, $0.01 par value per share
SMID
NASDAQ
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Common Stock, $0.01 par value per share, outstanding as of May 31, 2026: 5,306,554 shares, net of treasury shares
SMITH-MIDLAND CORPORATION
Form 10-Q Index
Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
3
Condensed Consolidated Balance Sheets
Condensed Consolidated Statements of Income
5
Condensed Consolidated Statements of Stockholders' Equity
6
Condensed Consolidated Statements of Cash Flows
7
Notes to Condensed Consolidated Financial Statements
8
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
15
Item 3. Quantitative and Qualitative Disclosures About Market Risk
23
Item 4. Controls and Procedures
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
25
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
26
Signatures
27
PART I — FINANCIAL INFORMATION
ITEM 1. Financial Statements
and Subsidiaries
(unaudited)
(in thousands, except share and per share data)
ASSETS
March 31,
2026
December 31,
2025
Current assets
Cash
Accounts receivable, net
Trade - billed (less allowances of approximately $651 and $539, respectively), including contract retentions
Trade - unbilled
Inventories, net
Raw materials
Finished goods
Prepaid expenses
Refundable income taxes ex
Total current assets
Property and equipment, net
Other assets
Total assets
The accompanying notes are an integral part of the condensed consolidated financial statements.
(continued)
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable - trade
Accrued expenses and other liabilities
Deferred revenue
Accrued compensation
Accrued income taxes
Operating lease liabilities
Current maturities of notes payable
Customer deposits
Total current liabilities
Notes payable - less current maturities
Deferred tax liability
Total liabilities
Commitments and contingencies (Note 9)
Stockholders’ equity
Preferred stock, $0.01 par value; authorized 1,000,000 shares, none issued and outstanding
Common stock, $0.01 par value; authorized 8,000,000 shares; 5,347,474 and 5,347,474 issued and 5,306,554 and 5,306,554 outstanding as of March 31, 2026 and December 31, 2025, respectively
Additional paid-in capital
Treasury stock, at cost, 40,920 shares
Retained earnings
Total stockholders' equity
Total liabilities and stockholders' equity
(in thousands, except per share data)
Three Months Ended March 31,
Revenue
Product sales
Barrier rentals
Royalty income
Shipping and installation revenue
Total revenue
Cost of sales
Gross profit
Operating expenses
General and administrative expenses
Selling expenses
Total operating expenses
Operating income
Other income (expense)
Interest expense
Interest income
Other income
Total other income (expense)
Income before income tax expense (benefit)
Income tax expense (benefit)
Net income
Basic earnings per common share
Diluted earnings per common share
Weighted average number of common shares outstanding:
Basic
Diluted
Condensed Consolidated Statements of Stockholders’ Equity
(in thousands, except share data)
Common
Stock
Treasury
Additional
Paid-in
Retained
Shares
Amount
Capital
Earnings
Total
Balance, December 31, 2025
Issuance of restricted stock
Balance, March 31, 2026
Balance, December 31, 2024
Vesting of restricted stock
Balance, March 31, 2025
(Unaudited)
(in thousands)
Three Months Ended
Cash flows from operating activities:
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization
Allowance for credit losses
Stock compensation
Deferred taxes
(Increase) decrease in
Accounts receivable - billed
Accounts receivable - unbilled
Inventories
)
Increase (decrease) in
Net cash provided by (used in) operating activities
Cash flows from investing activities:
Purchases of property and equipment
Net cash provided by (used in) investing activities
Cash flows from financing activities:
Repayments of long-term borrowings
Net cash provided by (used in) financing activities
Net increase (decrease) in cash
Beginning of period
End of period
Supplemental Cash Flow Information:
Cash payments for interest
Cash payments for income taxes
Non-Cash Investing Activity:
Capital expenditures in accounts payable
1. INTERIM FINANCIAL REPORTING
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information, and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, we have condensed or omitted certain information and footnote disclosures that are included in our annual consolidated financial statements. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes included in our Annual Report on Form 10-K for the year ended December 31, 2025. The condensed consolidated December 31, 2025 balance sheet was derived from the audited financial statements included in the Form 10-K. Dollar amounts in the footnotes are stated in thousands, except for per share data.
In the opinion of management, these condensed consolidated financial statements reflect all adjustments (which consist of normal, recurring adjustments) necessary for a fair presentation of the financial position and results of operations and cash flows for the periods presented. The results disclosed in the condensed consolidated statements of income are not necessarily indicative of the results to be expected in any future periods.
Recent Accounting Pronouncements
Effective January 1, 2026, the Company adopted ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The Company elected the practical expedient permitting entities to assume that current conditions as of the balance sheet date remain unchanged for the remaining life of certain short-term financial assets when estimating expected credit losses under ASC 326. The amendments were adopted prospectively. Adoption of the standard did not have a material impact on the Company’s condensed consolidated financial statements or related disclosures.
Revenue Recognition
The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers for product sales, royalty income and shipping and installation revenue. Revenue from barrier rentals is accounted for under ASC 842, Leases. Revenue accounted for (in thousands) under ASC 606 amounted to $19,372 and $14,273 during the quarters ended March 31, 2026 and 2025, respectively. Revenue accounted for (in thousands) under ASC 842 amounted to $2,201 and $8,425 during the quarters ended March 31, 2026 and 2025, respectively.
Product Sales - Over Time
The Company recognizes revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for goods or services provided. Revenue associated with contracts with customers for customized products is recognized over time when the Company’s performance (i) creates or enhances an asset that the customer controls, or (ii) creates or enhances an asset that has no alternative use to the Company and the Company has an enforceable right to payment for performance completed to date, as defined in the contract.
To determine the amount of revenue to recognize over time, the Company measures progress toward complete satisfaction of its performance obligations using an output method based on units produced, which depicts the value transferred to the customer relative to the remaining value to be transferred. Costs associated with the units produced are recognized as incurred.
If a contract is projected to result in a loss, the entire contract loss is recognized in the period when the loss is first determined, and the amount of the loss is updated in subsequent reporting periods. Revenue recognition includes amounts related to contract assets and contract liabilities. If recognized revenue exceeds amounts billed, a contract asset is recorded in Accounts receivable, trade — unbilled. Conversely, if amounts billed exceed recognized revenue, a contract liability is recorded in Customer deposits. Changes in job performance, job conditions, and final contract settlements are factors that influence management’s assessment of total contract value and, therefore, profit and revenue recognition.
Revenue recognized for product sales – over time (in thousands) are recorded in product sales under revenue in the consolidated financial statements which amounted to $5,479 and $4,733 during the quarters ended March 31, 2026 and 2025, respectively.
Product Sales - Point in Time
For certain product sales that do not meet the criteria for recognition over time, the Company recognizes revenue at a point in time, generally upon shipment or delivery (as specified in the contract), when control of the product transfers to the customer and the Company has a present right to payment.
Revenue recognized for product sales – point in time (in thousands) are recorded in product sales under revenue in the consolidated financial statements which amounted to $6,307 and $4,379 during the quarters ended March 31, 2026 and 2025, respectively.
Accounts Receivable and Contract Balances
The timing of when we bill our customers is generally dependent upon advance billing terms, milestone billings based on the completion of certain phases of the work, or when services are provided or products are shipped.
Accounts receivable, net includes the following components on the consolidated balance sheets:
·
Trade – billed represents amounts that have been invoiced to customers for which the Company has an unconditional right to payment. Trade – billed is presented net of an allowance for expected credit losses.
Trade – unbilled represents amounts related to performance obligations satisfied over time for which revenue has been recognized, but amounts have not yet been invoiced. Trade – unbilled is a contract asset.
The Company’s Accounts receivable trade – billed (in thousands), arising from Topic 606 is $24,785 and $26,618 as of March 31, 2026 and December 31, 2025, respectively.
Certain contracts include retention provisions, generally up to 10%, that are withheld from progress billings until the related work has been completed and approved. Contract retentions that have been invoiced are included within Trade – billed. The Company considers these amounts to be contract balances because collection may be contingent upon contractual completion and approval provisions.
At March 31,2026 and December 31, 2025, accounts receivable included contract retentions (in thousands) of approximately $1,465 and $1,135, respectively, which are considered contract assets.
For contracts recognized over time, contract assets arise when revenue recognized to date exceeds cumulative billings. Contract assets are presented as Trade – unbilled on our consolidated financial statements. When the Company subsequently invoices the customer, the related amounts are reclassified from Trade – unbilled to Trade – billed.
Quarter Ended March 31,
Accounts receivable trade – unbilled, beginning of the period
Accounts receivable trade – unbilled, end of the period
Amounts invoiced in the period from amounts included at the beginning of the period
Projects with performance obligations recognized over time that have cumulative billings in excess of costs and estimate earnings recognized to date, are reported on our Consolidated Balance Sheets as "Customer deposits" (contract liabilities). The Company’s Customer deposits (i.e. contract liabilities) balances are as follows:
Customer deposits, beginning of the period
Customer deposits, end of the period
Revenue recognized in the period from amounts included at the beginning of the period
For contracts where the Company has billed or received consideration in advance of transferring goods or services to the customer, the Company records a contract liability, deferred revenue, within accrued liabilities or other liabilities, as applicable, and recognizes revenue when the Company satisfies its performance obligations under the terms of the contract, which generally occurs over time as services are rendered or at a point in time upon delivery of the promised goods or services. Deferred revenue includes the non-lease components of barrier rental arrangements.
The Company’s deferred revenue (i.e. contract liabilities) balances (in thousands) related to Topic 606 are as follows:
Quarter Ended March 31
Deferred revenue, beginning of the period
Deferred revenue, end of the period
Any uncollected billed amounts for our performance obligations recognized over time, including contract retentions, are the difference between the opening and closing balances of the Company’s contract assets and contract liabilities primarily results from the timing difference between the Company’s performance and billings. The changes in the contract assets and contract liabilities balances during the quarters ended March 31, 2026 and 2025 were not materially affected by any other factors.
Our billed and unbilled revenue is subject to credit risk if our customers should encounter financial difficulties. The Company maintains an allowance for estimated expected credit losses on Trade-billed (and evaluates Trade-unbilled for expected credit losses, as applicable). A considerable amount of judgment is required when determining expected credit losses. Estimates of such expected losses are recorded based on historical losses experienced by the Company and current and future economic conditions. Management also considers when a specific customer may not be able to meet its financial obligations due to deterioration in financial condition or credit rating. Factors relevant to our assessment include our prior collection history with our customers, the related aging of past due balances, projections of credit losses based on historical trends or past events, and forecasts of future economic conditions.
At March 31, 2026 and March 31, 2025, total allowances for credit losses were $651 and $1,222, respectively (in thousands). The decrease in the allowance for credit losses was primarily attributable to improved collection trends, a reduction in aged receivable balances, particularly within accounts previously identified as having elevated credit risk, and a decline in customer accounts with specific credit concerns that had contributed to higher reserves in the prior year. Management will continue to monitor receivable aging, customer creditworthiness, project-specific risks, and broader economic conditions affecting the construction and infrastructure markets in which the Company operates when estimating expected credit losses.
The rollforward of our allowance for credit losses (in thousands) for the quarters ended March 31, 2026 and 2025, was as follows:
Balance at beginning of period
Provision (benefit) for Expected Credit Losses
Balance at end of period
Barrier Rentals - Lease Income
Barrier Rental revenue historically comprises Standard Barrier Rental and Special Barrier Projects.
Standard Barrier Rental
The Company leases barriers to customers under operating leases in accordance with ASC 842, Leases. Customers are invoiced at lease commencement for the full lease term. The Company’s standard barrier rentals arrangements are generally for periods less than five years and may include provisions for additional charges if the barriers remain on rent beyond the contractual lease term. The Company evaluates the enforceable term in determining the lease tease term used for revenue recognition and in preparing its disclosure of future fixed lease payments. Amounts billed in advance of the related lease periods are recorded as deferred lease income within Deferred revenue on the balance sheet and recognized as lease income on a straight-line basis over the lease term. Lease income is presented in Barrier Rentals within Revenue in the consolidated financial statements. The Company recognizes operating lease income only to the extent collection is probable. If collectability is not probable, lease income is limited to amounts collected until collectability becomes probable.
Standard Barrier Rental arrangements also include non-lease components (accounted for under ASC 606, Revenue from Contracts with Customers), including delivery/shipping, installation, and removal/pickup services. These non-lease components are distinct from the lease component because: (i) the lease commences upon shipment from the Company’s facility, and delivery and installation occur after lease commencement; (ii) the components are separately priced with observable standalone selling prices; and (iii) the services can be performed by third parties. The Company allocates consideration between lease and non-lease components based on their relative stand-alone selling prices. Revenue allocated to delivery and installation services is recognized when the services are performed (generally upon delivery to the customer’s site, which occurs after lease commencement), and revenue allocated to removal/pickup services is recognized when performed (generally at the end of the lease term). Amounts billed in advance of performance related to the non-lease components are recorded as deferred revenue within Deferred revenue on the balance sheet and recognized as the related services are performed and is recognized within shipping and installation revenue on the consolidated statements of income.
The Company’s deferred lease revenue balances (in thousands) related to Topic 842, Leases are as follows:
Deferred lease revenue, beginning of the period
Deferred lease revenue, end of the period
Special Barrier Projects
The Company provides barrier rentals as part of integrated Special Barrier Projects, which include deployment and 24/7 concierge-type services. These arrangements are evaluated under ASC 842, Leases. The Company contracts with a third-party event services firm, with the end-user also a party to the arrangement. Projects are delivered as a single bundled engagement, typically over a one- to two-week period.
The Company’s personnel manage and execute all barrier movements under direction of customer authorized staff and officials. Based on this structure, the customer is considered to direct the use of the identified asset, indicating that a lease exists. The non-lease components are not distinct from the lease component, as they are highly interdependent and interrelated and not separately identifiable. Accordingly, the lease and non-lease components are not separated and are accounted for as a single combined component under ASC 842. Revenue is recognized on a straight-line basis over the project term, which reflects the continuous transfer of benefit over the duration of the engagement.
Royalty Income
The Company licenses certain products to other precast companies to produce the Company's products in accordance with the Company’s engineering specifications. Licensing agreements are typically for five-year terms and require royalty payments of 4% to 6% of the licensee’s total sales of licensed products. Royalty income is recognized in accordance with ASC 606 as the licensee’s sales of the licensed products occur in the period the licensees’ sales are earned and reported. Royalty income is presented under Royalty Income within Revenue in the consolidated financial statements
Shipping and Installation
Shipping, installation and removal services are distinct performance obligations and are accounted for under ASC 606, Revenue from Contracts with Customers. Revenue is recognized in the period the shipping, installation, and removal services are provided to the customer. When shipping and installation services are billed in advance of performance, the Company records a contract liability and recognizes the revenue when the services are performed. Shipping, installation and removal revenue is presented as Shipping and Installation within Revenue in the consolidated financial statements.
Disaggregation of Revenue
the following table, revenue is disaggregated by primary sources of revenue (in thousands):
Revenue by Type
Soundwall Sales
Architectural Panel Sales
SlenderWall Sales
Miscellaneous Wall Sales
Barrier Sales
Easi-Set and Easi-Span Building Sales
Utility Sales
Miscellaneous Product Sales
Total Product Sales
Barrier Rentals
Shipping and Installation Revenue
Total Service Revenue
Total Revenue
The revenue items: soundwall sales, architectural sales, SlenderWall® sales, miscellaneous wall sales, miscellaneous sales, barrier rentals, and royalty income are recognized as revenue over time. The revenue items: barrier sales, Easi-Set and Easi-Span building sales, utility sales, and shipping and installation revenue are recognized as revenue at a point in time.
Warranties
Smith-Midland products are typically sold pursuant to an implicit warranty of merchantability only. Warranty claims are reviewed and resolved on a case-by-case method. Although the Company does incur costs for warranty claims, historically such amounts are minimal.
Use of Estimates
The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Concentration of Risk
Historically, various customers have comprised greater than 10% of revenue during a given quarter or year. These customers are typically not the same quarter to quarter or year to year. The Company views revenue details by jobs, and not by customers. In the event a customer were to go out of business during a project, it is likely that the owner of the project would assign a new contractor to the job, and the Company would complete its scope of work. Therefore, the Company believes that it does not have a short-term vulnerability of severe impact to operations. In cases where customers are less than 10% of revenue, the Company assesses if there is a near term severe impact. The Company has determined that no customer, if lost, would result in a near term severe impact to the Company’s operations.
For the quarter ended March 31, 2026, the Company derived 16% and 10% of its revenue from each of two customers. For the quarter ended March 31, 2025, the Company derived 33% of its revenue from one customer. As of March 31, 2026, each of two customers’ outstanding receivable balance exceeded 10% of the total outstanding receivable balance. As of March 31, 2025, each of two customers’ outstanding receivable balance exceeded 10% of the total outstanding receivable balance.
Segment Reporting
Operating segments are defined as components of an enterprise for which separate financial information is available and evaluated regularly by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources and assess performance. The Company currently operates in one operating and reportable business segment for financial reporting purposes (the “Precast Concrete Segment”). The Company’s CODM is the Chief Executive Officer (“CEO”) and President.
The Precast Concrete Segment derives revenues from customers by providing products and services to customers. The accounting policies of the precast concrete segment are the same as those described in the summary of significant accounting policies. The CODM assesses performance for the Precast Concrete Segment based on consolidated net income as reported on the consolidated statements of income and measures segment assets as total consolidated assets as reported on the consolidated balance sheets. The CODM uses consolidated net income and consolidated assets to allocate resources and assess performance. Significant segment expenses provided to the CODM are based on the expense breakout shown on the consolidated statements of income. The Precast Concrete Segment’s results are the same as reported on the consolidated statements of income and there are no adjustments or reconciling items.
2. EARNINGS PER SHARE
Earnings per share are calculated as follows (in thousands, except earnings per share):
Weighted average shares outstanding
Dilutive effect of restricted stock
Total weighted average shares outstanding
There was no restricted stock excluded from the diluted earnings per share calculation for the three month periods ended March 31, 2026 and March 31, 2025.
3. NOTES PAYABLE
The Company has a mortgage note payable to Burke & Herbert Bank & Trust Company, formerly Summit Community Bank (the “Bank”) for the construction of its North Carolina facility. The note carries a ten-year term at a fixed interest rate of 3.64% annually per the Promissory Note Rate Conversion Agreement, with monthly payments of $22, and is secured by all of the assets of Smith-Carolina and a guarantee by the Company. The balance of the note payable at March 31, 2026 and December 31, 2025 was $884 and $942 respectively.
The Company also has a note payable to the Bank in the amount of $1,211 and $1,279 as of March 31, 2026 and December 31, 2025 respectively. The loan is collateralized by a first lien position on the Midland, VA plant, building, and assets. The interest rate per the Promissory Note is fixed at 3.99% per annum, with principal and interest payments payable monthly in the amount of $27. The loan matures on March 27, 2030.
On February 10, 2022, the Company completed the financing for its acquisition of certain real property in Midland, VA from the fourth quarter of 2021, totaling approximately 29.8 acres, with a note payable to the Bank. The loan is collateralized by a first lien position on the related real property. The interest rate is fixed at 4.09% per annum, with principal and interest payments payable monthly over 180 months for $21. The loan matures on February 10, 2037. The balance of the note payable on March 31, 2026 and December 31, 2025 was $2,186 and $2,226 respectively.
Under the loan covenants with the Bank, the Company must maintain tangible net worth of $25,000. The previous covenant in which the Company was limited to annual capital expenditures of $5,000 has been discontinued effective January 1, 2026. The Company is in compliance with all covenants pursuant to the loan agreements as of March 31, 2026.
In addition to the notes payable discussed above, the Company has a revolving line of credit evidenced by promissory note with the Bank, with the available amount of $5,000 with no balance outstanding as of March 31, 2026 and December 31, 2025. The line of credit is evidenced by a commercial revolving promissory note, which carries a variable interest rate of prime, with a floor of 4.99%. The line of credit was renewed on January 1, 2026 and matures May 1, 2027. The line of credit renewal excluded the previous limitation on annual capital expenditures. The amount available is based on the lower of the maximum $5,000 or 50% of eligible cash, inventory, and accounts receivable balances at the financial statement date. Key provisions of the line of credit require the Company to maintain a (i) Minimum Debt Service Coverage Ratio of 1.25x, tested annually,(ii) Minimum tangible net worth of $25 million and (iii) Debt-to-tangible net worth not greater than 3 to 1 tested annually. The line of credit is collateralized by a first lien position on the Company's accounts receivable, inventory, and equipment. The Company is in compliance with all covenants as of March 31, 2026.
4. STOCK COMPENSATION
The fair value of restricted stock awards is estimated to be the market price of the Company's common stock at the close of the date of grant. Restricted stock activity during the three months ended March 31, 2025, is as follows:
Performance-Based
Service-Based
Number of Shares
Weighted Average Grant Date Fair Value per Share
Non-vested, December 31, 2025
Granted
Vested
Forfeited
Non-vested, March 31, 2026
During the three months ended March 31, 2026, the Company granted 408 fully vested service-based restricted stock awards to the Company’s Chief Financial Officer with a grant-date fair value of $36.77 per share, resulting in total stock compensation expense of approximately $15 thousand recognized during the period.
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
This Quarterly Report and related documents include “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act 1934. Forward-looking statements involve known and unknown risks, uncertainties and other factors which could cause the Company’s actual results, performance (financial or operating), or achievements expressed or implied by such forward looking statements not to occur or be realized. Such forward looking statements generally are based upon the Company’s best estimates of future results, performance or achievement, based upon current conditions and the most recent results of operations. Forward-looking statements may be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “believe,” “estimate,” “anticipate,” “continue,” or similar terms, variations of those terms or the negative of those terms. Potential risks and uncertainties include, among other things, such factors as:
●
while we have expended significant funds in recent years to increase manufacturing capacity and the barrier rental fleet, and plan to continue to increase manufacturing capacity and the barrier rental fleet, there is no assurance that we will achieve significantly greater revenues,
while we have special barrier projects that can occur at any time that may have a significant positive effect on revenues and operating income, including the significant special barrier projects that occurred in both the first quarter and the second quarter of 2025, there can be no assurance of these projects recurring in any future periods; likewise the lack of a special barrier projects in any quarter will negatively impact revenues and operating income of such quarter relative to comparison to a quarter that includes a special barrier project. The Company, in view of significant revenues from special barrier projects in 2025, experienced a decrease from this revenue source and a substantial decrease in operating income in the first quarter of 2026 as compared to the first quarter of 2025, which had a significant special barrier project. Likewise, we expect that the revenue and operating income in the second quarter of 2026 will not compare favorably to the second quarter of 2025 due to the anticipated lack of a special barrier project in the 2026 period.
while our cash increased as of March 31, 2026 from December 31, 2025, reflecting higher cash flows from operating activities, there can be no assurance that the Company’s cash will continue to increase or not be reduced in the future,
we have a significant amount of accounts receivables which has increased during 2026 as compared to the ending balance as of December 31, 2025, and our ability to fully collect these balances cannot be assured,
cybersecurity incidents could disrupt business operations, result in the loss of critical and confidential information and adversely impact our reputation and results of operations; in this respect, we experienced a ransomware incident in the first quarter of 2025 for which no ransomware payment was made and which continues to be addressed with notifications to potentially impacted internal and external parties and relevant governmental offices as well as enacting network security improvements,
we identified material weaknesses in internal controls over financial reports related to (i) design and maintenance of effective controls over the financial reporting process; and (ii) certain business processes and the information control environment. The Company is currently taking remedial actions with respect to these weaknesses,
there are uncertainties arising from the policies of the United States Government, including without limitation, government spending cuts and tariffs, and there can be no assurance that infrastructure spending will not be adversely affected or that the Company will not otherwise be adversely affected,
There is a need for the continued availability of adequate staffing for financial reporting and internal controls. The Company had a gap in hiring a Chief Financial Officer from July 17, 2024 to April 16, 2025 and experienced the resignation of the Accounting Manager in February 2026 which, although both positions have been filled, negatively delayed the Company’s closing and reporting cycles in order to maintain reporting integrity and data accuracy,
our future revenue growth depends in part on future government spending on infrastructure, and there can be no assurance that such spending will occur or be in significant amounts,
the continued availability of financing in the amounts, at the times, and on the terms required, to support our future business and capital projects,
potential decreases in our contract backlog; in this respect, the Company’s backlog at May 11, 2026 was approximately $48.1 million as compared to $52.4 million at around the same time a year ago,
the extent to which we are successful in developing, acquiring, licensing, or securing new patents for proprietary products as the Company experiences the expiration of certain patents,
changes in economic conditions specific to any one or more of our markets (including tariffs, the availability of public funds and grants for construction),
the Company’s operations in the first quarter of 2026, and the years 2025 and 2024 were adversely impacted by inflation in the purchase of raw materials such as cement and aggregates, steel, and also with labor costs,
changes in general economic conditions in our primary service areas,
adverse weather, which inhibits the demand for our products, or the installation or completion of projects,
our compliance with governmental regulations,
the outcome of future litigation, if any; in this respect, during the third quarter of 2025, we received an arbitration settlement of $458 thousand related to a SlenderWall® sale that occurred in 2015. The settlement included the recovery of previously reserved receivables and is recognized in the third quarter of 2025. There can be no assurance we will achieve favorable outcomes in any future litigation, arbitration, or similar proceedings,
our ability to produce and install product on material construction projects that conforms to contract specifications and in a time frame that meets the contract requirements,
the cyclical nature of the construction industry,
our exposure to increased interest expense payments should interest rates change, and
the other factors and information disclosed and discussed in other sections of this report and other filings with the Securities and Exchange Commission.
Investors and shareholders should carefully consider such risks, uncertainties and other information, disclosures and discussions that contain cautionary statements identifying important factors that could cause actual results to differ materially from those provided in the forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Overview
The Company invents, develops, manufactures, markets, leases, licenses, sells, and installs a broad array of precast concrete products and systems for use primarily in the construction, highway, utilities, and farming industries. The Company's customers are primarily general contractors and federal, state, and local transportation authorities located in the Mid-Atlantic and Northeastern regions and in parts of the Midwestern and Southeastern regions of the United States. The Company's operating strategy has involved producing innovative and proprietary products, including SlenderWall™, a lightweight, energy-efficient concrete and steel exterior insulated wall panel for use in building construction; J-J Hooks® Highway Safety Barrier, a positive-connected highway safety barrier; and Easi-Set® transportable concrete buildings. In addition, the Company produces custom order precast concrete products with various architectural surfaces, as well as generic highway sound barriers, utility vaults, and farm products such as cattleguards.
The Company was incorporated in Delaware on August 2, 1994. Prior to a corporate reorganization completed in October 1994, the Company conducted its business primarily through Smith-Midland Virginia, which was incorporated in 1960 as Smith Cattleguard Company, a Virginia corporation, and subsequently changed its name to Smith-Midland Corporation in 1985. The Company’s principal offices are located at 5119 Catlett Road, Midland, Virginia 22728 and its telephone number is (540) 439-3266. As used in this report, unless the context otherwise requires, the term the “Company” refers to Smith-Midland Corporation and its subsidiaries.
As a part of the construction industry, the Company's sales and net income may vary greatly from quarter to quarter over a given year. Because of the cyclical nature of the construction industry, many factors not under our control, such as weather and project delays, affect the Company's production schedule, possibly causing momentary slowdowns in sales and net income. In addition, revenues are affected by the number, size, and timing of significant projects to which the Company is contracted. As a result of these factors, the Company is not always able to earn a profit for each period, therefore, please read Management's Discussion and Analysis of Financial Condition and Results of Operations and the accompanying financial statements with these factors in mind.
Results of Operations (dollar amounts in thousands, except per share data)
Overall, the Company’s financial performance for the first quarter of 2026 decreased compared to the first quarter of 2025. The Company reported net income of $1,339 for the three months ended March 31, 2026, compared to net income of $3,327 for the three months ended March 31, 2025. Total revenue decreased by $1,126 to $21,572 for the three months ended March 31, 2026 from $22,698 for the three months ended March 31, 2025. The decrease in revenue was primarily attributable to lower barrier rental revenue resulting from the absence of a large special barrier project that positively impacted the first quarter of 2025. This decrease was partially offset by increases in product sales and shipping and installation revenue.
Cost of sales as a percentage of revenue, excluding royalties, increased to 83% for the three months ended March 31, 2026 compared to 72% for the three months ended March 31, 2025. The increase was primarily due to the significant reduction in special project barrier rental revenue during the quarter. Special barrier rental projects generally carry higher margins and lower cost of sales percentages compared to product sales.
Operating income was $1,728 for the three month period ended March 31, 2026, as compared to $4,387 for the three month period ended March 31, 2025. Operating expenses for the first quarter of 2026 were $2,575 compared to $2,588 for the first quarter of 2025. The slight decrease was primarily attributable to lower selling expenses partially offset by higher general and administrative expenses.
Income tax expense for the three month period ended March 31, 2026 was $422, or an effective tax rate of 24%, as compared to $1,020, or an effective tax rate of 24% for the three month period ended March 31, 2025.
As of May 11, 2026, the Company’s sales backlog was approximately $48.1 million, as compared to approximately $52.4 million around the same time in the prior year. It is estimated that most of the projects in the current sales backlog will be produced within 12 months, but a few will be produced over multiple years. The Company anticipates funding related to the Infrastructure Investment and Jobs Act to continue to support growth opportunities in highway, transportation, and infrastructure markets in 2026 and beyond, although no assurance can be provided. The Company continues to focus marketing and sales efforts toward SlenderWall® products and barrier rentals in line with long-term strategic objectives.
Three months ended March 31, 2026, compared to the three months ended March 31, 2025
Revenue includes product sales, barrier rentals, royalty income, and shipping and installation revenues. Product sales are further divided into soundwall, architectural and SlenderWall® panels, miscellaneous wall panels, highway barrier, Easi-Set® and Easi-Span buildings, utility products, and miscellaneous precast products. The following table summarizes the sales by product type and comparison for the three month periods ended March 31, 2026 and 2025.
Change
% Change
The revenue items: soundwall sales, architectural panel sales, SlenderWall sales, miscellaneous wall sales, miscellaneous sales, barrier rentals, and royalty income are recognized as revenue over time. The revenue items: barrier sales, Easi-Set® and Easi-Span building sales, utility sales, and shipping and installation revenue are recognized as revenue at a point in time.
Soundwall Sales - Soundwall sales decreased for the three month period ended March 31, 2026 compared to the three month period ended March 31, 2025. The decrease was primarily due to timing of project production schedules and shipment activity. The Company continues to maintain a soundwall backlog and expects production activity to increase throughout the remainder of 2026, although no assurance can be given.
Architectural Panel Sales – Architectural panel sales increased for the three month period ended March 31, 2026 compared to the three month period ended March 31, 2025 due to the commencement of architectural panel production activity during the quarter. The Company expects architectural panel activity to continue throughout 2026 and trend higher than 2025 production levels, although no assurance can be given.
SlenderWall Sales – The Company had no SlenderWall® sales in the three month period ended March 31, 2025 to compare to the production levels for the three month period ended March 31, 2026. Due to the commencement of production on certain SlenderWall® projects and sales expectations in 2026, the Company expects sales for the remainder of the year in this category to be consistent with the quarter ended March 31, 2026. The Company continues to focus sales and marketing initiatives on SlenderWall®, although no assurance can be provided regarding future project awards or production timing.
Miscellaneous Wall Sales – Miscellaneous wall sales are highly customized precast concrete products or retaining and lagging panels that do not fit other product categories. Miscellaneous wall sales decreased for the three month period ended March 31, 2026 compared to the three month period ended March 31, 2025 primarily due to normal fluctuations in project timing and product mix. Based on the Company’s backlog for these products, miscellaneous wall sales are expected to trend lower through the remainder of 2026 as compared to 2025..
Barrier Sales - Barrier sales increased for the three month period ended March 31, 2026 compared to the three month period ended March 31, 2025 due to increased customer demand. Sales in this category are expected to trend lower throughout 2026 as compared to 2025. The Company continues to focus strategically on barrier rental opportunities in certain geographic regions while maintaining selective barrier sales activity.
Easi-Set® and Easi-Span Building Sales – Building sales increased significantly for the three month period ended March 31, 2026 compared to the three month period ended March 31, 2025 due to increased customer demand at multiple manufacturing facilities. The Company expects building sales activity to continue at elevated levels during 2026, although no assurance can be given.
Utility Sales – Utility sales increased for the three month period ended March 31, 2026 compared to the three month period ended March 31, 2025, reflecting increased demand in utility and infrastructure-related markets, including continued data center development activity in Northern Virginia. The Company expects utility sales activity to continue through the remainder of 2026 and trend higher than 2025 production levels, although no assurance can be given.
Miscellaneous Product Sales - Miscellaneous products are products that are produced or sold that do not meet the criteria defined for other revenue categories. Examples would include precast concrete slabs, concrete blocks, or small add-on items. Miscellaneous product sales decreased for the three month period ended March 31, 2026, compared to the three month period ended March 31, 2025. Miscellaneous product sales are expected to trend lower through the remainder of 2026 as compared to 2025, although no assurance can be provided.
Barrier Rentals – Barrier rental revenue decreased significantly for the three month period ended March 31, 2026 compared to the three month period ended March 31, 2025. The decrease was primarily attributable to the absence of a large special barrier project that positively impacted the first quarter of 2025. Excluding special projects, the Company expects standard barrier rental activity to continue to trend positively throughout 2026, although no assurance can be provided. The Company also expects, to a lesser degree, special barrier projects to continue in 2026. In view of the anticipated lack of a special barrier project in the second quarter of 2026 as compared to one such project in the second quarter of 2025, the Company expects a significant decrease in such revenues for the 2026 second quarterly period.
Royalty Income – Royalty income decreased slightly for the three month period ended March 31, 2026 compared to the three month period ended March 31, 2025 due a large project which generated higher royalties from one licensee in the first quarter of 2025 that did not recur in the first quarter of 2026. The Company continues to expect long-term royalty opportunities associated with infrastructure spending and continued utilization of the J-J Hooks® barrier system. The Company expects royalties for 2026 to trend higher for the full year 2026, although no assurance can be given.
Shipping and Installation – Shipping revenue results from shipping our products to the customers' final destination and is recognized when the shipping services take place. Installation activities include installation of our products at the customers’ construction site. Installation revenue results when attaching architectural wall panels to a building, installing an Easi-Set® or Easi-Span building at a customers' site, setting highway barrier, or setting any of our other precast products at a site specific to the requirements of the owner. Shipping and installation revenue increased for the three month period ended March 31, 2026 compared to the same period in 2025 primarily due to increased product sales, including building, utility, and barrier products.
Cost of Sales - Total cost of sales as a percentage of revenue, excluding royalties, for the three months ended March 31, 2026 was 83%, as compared to 72% for the three months ended March 31, 2025. The increase in cost of sales as a percentage of revenue was primarily due to the reduction in high-margin special barrier project revenue during the first quarter of 2026 as compared to the first quarter of 2025 as well as the relative increase in lower-margin product sales activity.
General and Administrative Expenses - For the three months ended March 31, 2026, the Company’s general and administrative expenses increased by $169 to $1,753 from $1,584 during the three month period ended March 31, 2025. The increase was primarily attributable to increased personnel-related costs, professional fees, and costs associated with internal control and financial reporting remediation activities. General and administrative expense as a percentage of total revenue was 8% and 7% for the three month periods ended March 31, 2026 and 2025, respectively.
Selling Expenses - Selling expenses for the three months ended March 31, 2026 decreased to $822 from $1,004 for the three month period ended March 31, 2025. The decrease was primarily attributable to lower commission expense associated with reduced barrier rental revenues. As a percentage of sales, selling expense was 4% and 5% for the three month periods ended March 31, 2026 and 2025, respectively. The Company continues to expect selling expenses to increase for the remainder of 2026 as compared to 2025 based on the plan for additional sales associates and increased advertising spending aligning with the strategy to increase SlenderWall® sales and barrier rentals.
Operating Income - The Company had operating income for the three month period ended March 31, 2026 of $1,728 compared to $4,387 for the three month period ended March 31, 2025. The 61% decrease was primarily attributable to lower revenues from the absence of a significant special barrier project, which occurred the first quarter of 2025 and did not occur in the first quarter of 2026, and the resulting increase in cost of sales as a percentage of revenue.
Interest Expense - Interest expense was $47 and $55 for the three month periods ended March 31, 2026 and 2025, respectively. The decrease was primarily attributable to lower outstanding indebtedness balances during 2026. The Company expects interest expense for the full year of 2026 to be lower compared to the full year of 2025 due to the decrease in level of indebtedness on all notes which are fixed interest rates.
Income Tax Expense - The Company had income tax expense of $422, or an effective tax rate of 24%, for the three months ended March 31, 2026, compared to income tax expense of $1,020, or an effective tax rate of 24%, for the three month period ended March 31, 2025.
Net Income - The Company had net income of $1,339 for the three months ended March 31, 2026, compared to net income of $3,327 for the three month period ended March 31, 2025. Basic and diluted earnings per share were both $0.25 for the three months ended March 31, 2026, compared to $0.63 and $0.62, respectively, for the three month period ended March 31, 2025.
Liquidity and Capital Resources (dollar amounts in thousands)
The Company has a mortgage note payable to Burke & Herbert Bank & Trust Company, formerly Summit Community Bank, (the “Bank”) for the construction of its North Carolina facility. The note carries a ten-year term at a fixed interest rate of 3.64% annually, with monthly payments of approximately $22, and is secured by all of the assets of Smith-Carolina and a guarantee by the Company. The balance of the note payable at March 31, 2026 and December 31, 2025 was $884 and $942, respectively.
The Company also has a note payable to the Bank in the amount of $1,211 and $1,279 as of March 31, 2026 and December 31, 2025, respectively. The loan is collateralized by a first lien position on the Midland, Virginia plant, building, and assets. The interest rate is fixed at 3.99% per annum, with principal and interest payments payable monthly in the amount of approximately $27. The loan matures on March 27, 2030.
On February 10, 2022, the Company completed financing related to its acquisition of certain real property in Midland, Virginia totaling approximately 29.8 acres. The loan is collateralized by a first lien position on the related real property. The interest rate is fixed at 4.09% per annum, with principal and interest payments payable monthly over 180 months in the amount of approximately $21. The loan matures on February 10, 2037. The balance of the note payable on March 31, 2026 and December 31, 2025 was $2,186 and $2,226, respectively.
The Company’s outstanding notes payable are financed at fixed rates of interest. Accordingly, the Company’s exposure to fluctuating interest rates is limited primarily to any future borrowings under the variable rate line of credit or additional future indebtedness.
On March 31, 2026, the Company had cash totaling $13,217 compared to cash totaling $11,884 on December 31, 2025. The increase in cash was primarily the result of cash provided by operating activities totaling approximately $3.1 million during the quarter. Operating cash flow benefited from profitability, increased accounts payable balances, and deferred revenue activity, partially offset by increases in accounts receivable and inventory balances.
The Company’s accounts receivable balances, net of allowance, at March 31, 2026 were $28,052 compared to $27,228 at December 31, 2025. The increase was primarily attributable to timing of project billings, increased product sales activity, and growth in unbilled receivables associated with over-time revenue recognition.
Capital spending for the three months ended March 31, 2026 totaled approximately $1,630 compared to $595 for the three month period ended March 31, 2025. The 2026 expenditures were primarily related to investments in manufacturing equipment, production capacity expansion, and infrastructure improvements at the Company’s facilities. The Company, which expects product sales to be higher in 2026 as compared to 2025, intends to invest over $12,000 in 2026 for long-term strategic growth which includes continued barrier production, expansion of the Virginia and North Carolina manufacturing facilities, soundwall forms for increased production capacity, and miscellaneous manufacturing equipment. Anticipated capital expenditures exclude possible acquisitions.
The Company’s cash flow from operations is affected by production schedules established by contractors, which generally provide for payment 30 to 90 days after products are produced. Certain architectural and infrastructure projects may also include retainage provisions that delay collection until project completion. These factors can create liquidity demands because the Company must fund a portion of production costs before receiving payment from customers.
If actual operating results, production schedules, sales levels, or collections on customer receivables are materially inconsistent with management’s expectations, the Company could encounter cash flow or liquidity challenges in future periods. In addition, significant deterioration in operating performance could impact the Company’s ability to comply with financial covenants under existing lending agreements.
Although no assurances can be provided, the Company believes that its current cash resources, anticipated cash flow from operations, and availability under the line of credit will be sufficient to finance operations for at least the next 12 months.
The Company’s inventory totaled $7,217 at March 31, 2026 compared to $6,928 at December 31, 2025. The increase was primarily attributable to increased finished goods inventory and inventory maintained to support backlog production and anticipated barrier rental activity. Inventory turnover was 7.6, annualized for the three months ended March 31, 2026, compared to 7.5, annualized for the three month period ended March 31, 2025.
Critical Accounting Policies and Estimates
The Company’s critical accounting policies are more fully described in its Summary of Accounting Policies to the Company’s consolidated financial statements on Form 10-K for the year ended December 31, 2025.
Seasonality
The Company services the construction industry primarily in areas of the United States where construction activity may be inhibited by adverse weather during the winter. As a result, the Company may experience reduced revenues from December through February and realize a more significant part of its revenues during the other months of the year. The Company may experience lower profits, or losses, during the winter months, and as such, must have sufficient working capital to fund its operations at a reduced level until the spring construction season. The failure to generate or obtain sufficient working capital during the winter may have a material adverse effect on the Company.
Inflation
Raw material costs used in production have slightly increased for the first three months of 2026. The Company anticipates raw material prices to slightly increase for the remainder of 2026, although no assurance can be given regarding future pricing.
Sales Backlog
As of May 11, 2026, the Company’s sales backlog was approximately $48.1 million, as compared to approximately $52.4 million at the same time in 2025. It is estimated that the majority of the projects in the sales backlog will be produced within 12 months, with a portion extending several years.
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk
Not Applicable
ITEM 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, including our principal executive officer and principal financial and accounting officer, conducted an evaluation of the effectiveness of our internal controls over financial reporting, and disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, as of the end of this quarterly period covered by this Form 10-Q. Based on that evaluation, our principal executive officer and principal financial and accounting officer concluded that, due to the material weaknesses described below, our disclosure controls and procedures were not effective at the reasonable assurance level as of March 31, 2026. Notwithstanding the existence of these material weaknesses, management believes that the consolidated financial statements in this Form 10-Q present, in all material respects, the Company’s financial condition, results of operations, and cash flows for the periods disclosed in conformity with U.S. Generally Accepted Accounting Principles.
Previously Reported Material Weaknesses in Internal Control Over Financial Reporting
As previously reported in our Annual Report on Form 10-K for the year ended December 31, 2025, management identified material weaknesses in our internal control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. Management has determined that the following material weaknesses in the Company’s internal control over financial reporting have not been remediated as of March 31, 2026:
Control Environment, Risk Assessment and Monitoring
Management has determined that the Company did not maintain appropriately designed entity-level controls impacting the (1) control environment, (2) risk assessment procedures, (3) control activities, (4) information and communication, and (5) monitoring activities to prevent or detect material misstatements to the financial statements and assess whether the components of internal control were present and functioning properly. These deficiencies were primarily attributed to (i) turnover of the Chief Financial Officer, (ii) lack of structure and responsibility, insufficient number of qualified resources, and inadequate oversight and accountability over the performance of controls, (iii) ineffective identification and assessment of risks impacting internal control over financial reporting, and (iv) ineffective evaluation and determination as to whether the components of internal control were present and functioning.
Control Activities and Information and Communication
These material weaknesses contributed to the following additional material weaknesses within certain business processes and the information technology environment:
Management did not design, implement, and retain appropriate documentation of formal accounting policies, procedures, and controls across substantially all of the Company’s business processes over: (i) the financial reporting process, including management review controls over key disclosures and financial statement support schedules, (ii) the monthly financial close process, including journal entries and account reconciliations and (iii) the completeness and accuracy of information used by control owners in the operation of certain controls, to achieve timely, complete, accurate financial accounting, reporting.
As a result of these material weaknesses, the Company’s management has concluded that, as of March 31, 2026 the Company’s internal control over financial reporting was not effective based on the criteria in Internal Control – Integrated Framework (2013) issued by the COSO.
However, after giving full consideration to these material weaknesses, and the additional analyses and other procedures that we performed to ensure that our consolidated financial statements included in this Quarterly Report on Form 10-Q were prepared in accordance with U.S. GAAP, our management has concluded that our consolidated financial statements present fairly, in all material respects, our financial position, results of operations and cash flows for the periods disclosed in conformity with U.S. GAAP.
Management communicated the results of its assessment to the Audit Committee of the Board of Directors.
Remediation Efforts
Management, with oversight from the Audit Committee and Board of Directors, is committed to the remediation of the material weaknesses described above. The Company has continued to implement measures to improve the internal control structure. Specifically, the Company has taken steps to address the material weaknesses, including:
While the Company believes that these efforts improved the internal control over financial reporting once implemented, these measures will require validation and testing of the design and operating effectiveness of internal controls over a sustained period of financial reporting cycles.
Changes in Internal Control over Financial Reporting
Other than as described above, there were no other changes in the Company’s internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(f) and 15d-15(f) of the Exchange Act during the quarter ended March 31, 2026 that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
PART II — OTHER INFORMATION
ITEM 1. Legal Proceedings
The Company is not presently involved in any litigation of a material nature.
ITEM 1A. Risk Factors
Not required
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds
None
ITEM 3. Defaults Upon Senior Securities
ITEM 4. Mine Safety Disclosures
Not applicable
ITEM 5. Other Information
None.
ITEM 6. Exhibits
Exhibit No.
Exhibit Description
31.1
Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934.
31.2
Certification of the Principal Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934.
32.1
Certification pursuant 18 U.S.C. Section 1350 as adapted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS
XBRL Instance Document.
101.SCH
XBRL Taxonomy Extension Schema Document.
101.CAL
XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF
XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB
XBRL Taxonomy Extension Label Linkbase Document.
101.PRE
XBRL Taxonomy Extension Presentation Linkbase Document.
104
Cover Page Interactive Data File (embedded within the Inline XBRL and contained in Exhibit 101)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
(Registrant)
Date: June 9, 2026
By:
/s/ Ashley B. Smith
Ashley B. Smith, Chief Executive Officer
(Principal Executive Officer)
/s/ Dominic L. Hunter
Dominic L. Hunter, Chief Financial Officer
(Principal Financial Officer)