SHIM 10-K & 10-Q changes, risk factors and insider trading

Risks Related to Our Business and Industry an inability to obtain bonding could limit the aggregate dollar amount of contracts that we are able to pursue, although the infrastructure market is relatively less susceptible to fluctuations in the market, economic downturns or reductions in government funding of infrastructure projects could reduce our revenue and profits and have a material adverse effect on our results of operations, our ability to expand our capacity related to specialized, high-performance electrical and power distribution solutions may be limited, and our expansion strategy may not succeed, our limited operating history as an independent company following our separation from AECOM,our prior owner, requirements to make future payments to AECOM,our prior owner, violations or alleged violations of government regulations, requirements and statutes, including the False Claims Act, relating to our government contracts could have a material adverse effect on our business, our dependence on a limited number of customers could adversely affect our business and results of operations, our dependence on subcontractors and suppliers of materials could increase our costs and impact our ability to complete contracts on a timely basis or at all, which would adversely affect our profits and cash flows, acquisition activity presents certain risks to our business, operations and financial condition, and we may not realize the financial and strategic goals contemplated at the time of a transaction, amounts included in our backlog may not result in actual revenue or translate into profits, as our backlog is subject to cancellation and unexpected adjustments, our use of the input method of revenue recognition based on costs incurred relative to total expected costs could result in a reduction or reversal of previously recorded revenue and profits, pandemics and public health emergencies could materially disrupt our business and negatively impact our results of operations, cash flows and financial condition, both we and our customers use certain commodity products that are subject to significant price fluctuations, and these fluctuations may have a material adverse effect on both our and our customers’ financial condition, results of operations and cash flows, as well as our customers’ investment decisions,

Risks Related to Legal and Governmental Regulation our financial results could be impacted by uncertainty in U.S. trade policy, including uncertainty surrounding changes in tariffs, trade agreements or other trade restrictions imposed by the U.S. or other governments, our failure to comply with the regulations of the OccupationalEPA, Safety and Health Administration (“OSHA”) and state and local agencies that oversee environmental, transportation and safety compliance could adversely affect our business, financial condition, results of operations, profitability, cash flows and growth prospects, a change in tax laws or regulations of any federal or state jurisdiction in which we operate could increase our tax burden and otherwise adversely affect our business, financial condition, results of operations, and cash flows,

General Risk Factors a failure to fully or promptly recover customer claims could have a material adverse impact on our liquidity and financial results, although climate change and increasing regulations often drive demand for water infrastructure, climate change, and related legislative and regulatory responses to climate change, may have a long- termlong-term impact on our business, deterioration of the United States economy could have a material adverse effect on our business, financial condition and results of operations, and

Risks Related to the Securities Markets and Ownership of Our Common Stock because we are a “controlled company” under the listing standards of Nasdaq and the rules of the SEC, our stockholders do not have certain corporate governance protections that are available to stockholders of companies that are not controlled companies, future sales or other dilution of our equity could adversely affect the market price of our common stock, we do not anticipate paying any cash dividends in the foreseeable future, so if our share price does not appreciate, our investors may not experience gains and could potentially lose on their investment in our shares provisions in our charter documents and under Delaware law could discourage a takeover that stockholders may consider favorable and may lead to entrenchment of management, our amended and restated charter documents provide that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for certain stockholder litigation matters, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us, our disclosure controls and procedures may not prevent or detect all errors or acts of fraud, and we are an emerging growth company and a smaller reporting company, and because we take advantage of specified reduced disclosure requirements applicable to emerging growth companies and smaller reporting companies, our financial statements may not be comparable to companies that comply with public company effective dates, which may make our common stock less attractive to investors.

on site conditions that differ from those assumed in the original bid or contract, failure to include required materials or work in a bid, or the failure to estimate properly the quantities or costs needed to complete a lump sum contract, contract or project modifications creating unanticipated costs not covered by change orders, failure by our suppliers, subcontractors, designers, engineers, joint venture partners, or customers to perform their obligations, delays in quickly identifying and taking measures to address issues which arise during contract execution, changes in availability, proximity and costs of materials, including steel, concrete, aggregates and other construction materials, as well as fuel and lubricants for our equipment, including as a result of evolving tariff or trade policies, claims or demands from third parties for alleged damages arising from the design, construction or use and operation of a project of which our work is part, difficulties in obtaining required governmental permits or approvals, availability and skill level of workers in the geographic location of a project, citations issued by any governmental authority, including OSHA, unexpected labor conditions or work stoppages, changes in applicable laws and regulations,regulations including those that may occur in connection withunder the newcurrent presidential administration as a result of the 2024 U.S. elections,administration, delays caused by weather conditions, fraud, theft or other improper activities by our suppliers, subcontractors, designers, engineers, joint venture partners or customers or our own personnel, and mechanical problems with our machinery or equipment.

Economic downturns could reduce capital expenditures in the industries we serve, which could result in decreased demand for our services. The demand for our services has been, and will likely continue to be, cyclical in nature and vulnerable to general downturns in the U.S. economy. During economic downturns, our customers may not have the ability to fund capital expenditures for infrastructure, or may have difficulty obtaining financing for planned projects. In addition, uncertain or adverse economic conditions that create volatility in the credit and equity marketsmarkets, including those that may arise as a result of evolving tariff or trade policies, may reduce the availability of debt or equity financing for our customers, causing them to reduce capital spending. This has resulted, and in the future could result, in cancellations or downscaling of projects orprojects, deferral of projects to a later date.date or accelerated project bidding in anticipation of potential price increases in an attempt to receive favorable pricing prior to such increases. Such cancellations or deferrals could materially and adversely affect our results of operations, cash flows and liquidity. These conditions could also make it difficult to estimate our customers'customers’ demand for our services and add uncertainty to the determination of our backlog. In addition, our customers are negatively affected by economic downturns that decrease the need for their services or the profitability of their services. During an economic downturn, our customers also may not have the ability or desire to continue to fund capital expenditures for infrastructure or may outsource less work. A decrease in related project work could negatively impact demand for the services we provide and could materially adversely affect our business, financial condition, results of operations, profitability, cash flows and growth prospects.

Many of our customers are regulated by federal, state and local government agencies. These agencies could change the way in which they interpret the application of current regulations and/or may impose additional regulations. Interpretative changes or new regulations having an adverse effect on our customers and the profitability of the services they provide could reduce demand for our services, which could adversely affect our results of operations, cash flows and liquidity. Any restrictions or regulations that currently govern jurisdictions into we may expand our operations or any future restrictions or regulations that might be adopted in the jurisdictions in which we current operate could lead to operational delays, increased operating costs for our customers, reduced capital spending and/or delays or cancellations of future infrastructure projects, which could materially and adversely affect our business, financial condition, results of operations, profitability, cash flows and growth prospects.

Federal, state and local government agencies conduct rigorous competitive processes for awarding many contracts. Some contracts include multiple award task order contracts in which several contractors are selected as eligible bidders for future work. We will potentially face strong competition and pricing pressures for any additional contract awards from other government agencies, and we may be required to qualify or continue to qualify under various multiple award task order contract criteria. Our inability to qualify as an eligible bidder under federal, state or local government contract criteria could preclude us from competing for certain other government contract awards.awards and could prevent us from expanding our operations into jurisdictions in which our current or potential customers begin future projects. In addition, our inability to qualify as an eligible bidder, or to compete successfully when bidding for certain federal, state or local government contracts and to win those contracts, could materially adversely affect our business, operations, revenue and profits.

OnFor November 1, 2023,example, the Company'sCompany'’ subsidiary, SCC,Shimmick Construction Company, Inc. (“SCC”), was previously served with a Civil Investigative Demand ("“CID"”) from the Department of Justice ("“DOJ"”) pursuant to the FCA seeking information from SCC. The CID explainswas thatrelated the government is conductingto an FCA investigation concerning whether the SCC,SCC submitted, or caused to be submitted, false claims to the U.S. Government for work that was not performed and/or did not meet the requirements of the contract/task order awarded by the U.S. Army Corps of Engineers for the L 536 Levee Restoration Project on which SCC was a subcontractor. NoThe matter has concluded and no claims have beenwere asserted against SCC or us atfollowing thisour time and we intend to fully cooperatecooperation with the DOJ in its investigation.

We rely heavily on immigrant labor. We have taken steps that we believe are sufficient and appropriate to ensure compliance with immigration laws. However, we cannot provide assurance that we have identified, or will identify in the future, all illegal immigrants who work for us. Our failure to identify illegal immigrants who work for us may result in fines or other penalties being imposed upon us, which could have a material adverse effect on our operations, results of operations and financial condition. Additionally, on account of our reliance on immigrant labor, we are particularly vulnerable to changes and variations in immigration laws and regulations, including written changes and policy changes to the manner in which the laws and regulations are interpreted or enforced, and potential enforcement actions and penalties. TheAlthough sentiments have moderated recently, the political environment in the United States inover recentthe last few years has included significant support for anti-immigrantanti-immigration legislation and administrative changes. Many of these recent changes have resulted in, and various proposed and enacted changes may result in, increased difficulty throughout the immigration process, which could in turn impact our ability to staff projects. In addition, immigration reform, including as a result of changes to immigration policies, and the increased uncertainty surrounding such policies in light of the newcurrent U.S. administration's expected immigration agenda,agenda and enforcement approach, may have a material adverse impact on companies like ours that rely substantially on immigrant labor. Recent changes or any additional adverse revisions to immigration lawslaws, regulations and/or regulationsenforcement in the jurisdictions in which we operate may cause us delays, staffing shortages, additional costs or an inability to bid for or fulfill projects for clients, any of which could have a material adverse effect on our business, results of operations and financial condition.

Design-build is increasingly being used as a method of project delivery as it provides the customer with a single point of responsibility for both design and construction. We normally subcontract design responsibility to architectural and engineering firms. In the event of a design error or omission by a subcontractor or by us causing damages, there is a risk that we, the subcontractor or the respective professional liability insurance or errors and omissions insurance would not be able to absorb the liability. Any liabilities resulting from an asserted design defect with respect to our construction projects may have a material adverse effect on our financial condition, results of operations and cash flows.

In certain circumstances, such as those that arose in connection with our Golden Gate Bridge Project,Project during the third quarter of 2024, we seek to collect or assert claims against customers, engineers, consultants, subcontractors or others involved in a project for additional costs exceeding the contract price or for amounts not included in the original contract price. These situations may occur due to changes in the initial project scope. Our contracts often require us to perform extra or change order work as directed by the customer even if the customer has not agreed in advance on the scope or price of the extra work to be performed. This process may result in disputes over whether the work performed is beyond the scope of the work included in the original project plans and specifications or, if the customer agrees that the work performed qualifies as extra work, the price that the customer is willing to pay for the extra work. These situations also may occur due to other matters, such as delays, which may result in additional costs. Our attempts to collect for additional costs generally are subject to protracted negotiations. Often, these claims can be the subject of lengthy arbitration or litigation proceedings, and it is difficult to accurately predict when and the terms upon which these claims will be fully resolved. These matters ultimately may not be settled to our satisfaction. When these types of events occur, we use working capital in projects to promptly and fully cover cost overruns pending the resolution of the relevant claims. This period of time may be lengthy for project changes, even when the customer agrees to pay for the extra work, as a result of the customer's approval process. A failure to recover in these types of situations promptly and fully could have a negative impact on our liquidity and results of operations. 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.

Our business has been affected by numerous economic factors, including inflation, volatile financial markets, supply chain disruptionsdisruptions, evolving tariff and trade policies and shortages of materials and labor.

Economic conditions, including inflation, supply chain disruptionsdisruptions, evolving tariff and trade policies and labor and materials shortages, have negatively impacted us, and may continue to do so in the future. With the ongoing conflicts in the GazaMiddle Strip, the Red Sea regionEast and in Europe between Ukraine and Russia, there has been a high degree of volatility in commodity and energy markets that affects our customers' businesses. In addition, inflationary factors, such as increases in the labor costs, material costs, and overhead costs, may also adversely affect our financial condition and results of operations. Although inflation in the United States has moderated slightly recently, it has remained elevated over the past few years and we cannot predict any future inflation trends. In some cases, we have had to bid more competitively and more frequently than before to win work, which has compressed margins given the higher inflation. Additionally, in March 2023, the FDIC took control and was appointed receiver of Silicon Valley Bank and New York Signature Bank. While we do not have any direct exposure to these banks, if other banks and financial institutions enter receivership or become insolvent in the future in response to financial conditions affecting the banking system and financial markets, our operations may be negatively impacted, including any inability on our part, or on our customers'customers’ parts, to access cash, cash equivalents or investments. Continuing inflation, elevated interest rates for prolonged periods and energy costs, supply chain disruptions, evolving tariff and trade policies, bank failures, and other economic factors may have the effect of further increasing economic uncertainty and heightening the risks caused by volatility in financial markets, which may result in economic downturn or recession.

For projects that started prior to consummation of the AECOM Sale Transaction (“LegacyNon-Core Projects") to obtain bonding may also be impacted by AECOM,our prior owner, who is the credit support provider for the surety bonds in place for our LegacyNon-Core Projects. See “If AECOMour prior owner defaults on its contractual obligations under agreements in which we are a beneficiary, our business could be materially and adversely impacted” for further discussion.

Our business is highly dependent on the amount and timing of infrastructure work funded by various governmental entities, which, in turn, depends on the overall condition of the economy, the need for new or replacement infrastructure, the priorities placed on various projects funded by governmental entities and federal, state or local government spending levels. Spending on infrastructure could decline for numerous reasons, including as a result of decreased revenue received by state and local governments for spending on such projects, including federal funding.funding, or as a result of a complete or partial government shutdown. The most recent recession caused a nationwide decline in home sales and an increase in foreclosures, which correspondingly resulted in decreases in property taxes and some other local taxes, which are among the sources of funding for water and other critical infrastructure construction. State spending on infrastructure can be adversely affected by decreases or delays in, or uncertainties regarding, federal funding, including as a result of changing governmental priorities followingunder the 2024current U.S. elections,presidential administration, which could adversely affect us.

We operated as a division of AECOM until our separation in January 2021. Accordingly, our business historically relied upon AECOM's corporate infrastructure for services to support our business functions and relationships with third-party providers. Since separating from AECOM, in addition to working to complete the LegacyNon-Core Projects (including the LegacyNon-Core Loss Projects) we have worked to create and/or supplement the corporate infrastructure necessary to operate as an independent company, and have incurred related costs and expenses. That said, we have expended, and expect to continue to expend, significant efforts and costs to (i) replace or otherwise upgrade our systems, including our information technology ("IT") and enterprise resource planning systems, (ii) implement additional financial, IT, and management controls, (iii) implement reporting systems and procedures, (iv) hire additional management, IT, accounting, finance, legal, human resources, and other administrative staff and third-party service providers, (v) establish employee benefit programs, (vi) carry out audit, tax and legal functions, and (vii) establish banking and credit facility arrangements. Any interruption in these services could have a material adverse effect on our business, financial condition, results of operations, profitability, cash flows and growth products. We may also be unable to obtain necessary bonding as we historically were dependent on AECOM to provide the requisite credit support. See "Risks Related to our Business and Industry - An inability to obtain bonding could limit the aggregate dollar amount of contracts that we are able to pursue."

We may be required to make additional payments to AECOMour prior owner pursuant to contractual arrangements.

If AECOMour prior owner defaults on its contractual obligations under agreements in which we are a beneficiary, our business could be materially and adversely impacted.

As our prior owner, AECOM is the credit support provider for the surety bonds in place for all our LegacyNon-Core Projects, which consist of the bonded projects that were ongoing as of the closing of the AECOM Sale Transaction. In the event AECOMour prior owner were to experience financial distress and/or the bonding companies otherwise determined that the creditworthiness of AECOMour prior owner was not sufficient, the underlying sureties could require that we provide additional credit support in the form of guarantees, letters of credit, collateral, or otherwise which could materially and adversely impact our business.

Similarly, if the applicable agreements relating to any of the LegacyNon-Core Projects require that the amount of the bond with respect to such project be increased, we will need to request that AECOMour prior owner provide such an increase. In the event AECOMour prior owner refuses to cooperate, the lack of required bonding could result in a default by us under the underlying project agreement as well as a right of the counterparty to terminate the underlying project agreement, any of which could materially and adversely impact our business.

Historically, a substantial portion of our revenue and earnings is generated from large-scale project awards. The timing of project awards is unpredictable and outside of our control. Awards, including expansions of existing projects, often involve complex and lengthy negotiations and competitive bidding processes. These processes can be impacted by a wide variety of factors including a customer'scustomer’s decision to not proceed with the development of a project, governmental approvals, financing contingencies, commodity prices, environmental conditions and overall market and economic conditions. We may not win contracts that we have bid upon due to price, a customer'scustomer’s perception of our ability to perform and/or perceived technology advantages held by others. Many of our competitors may be more inclined to take greater or unusual risks or terms and conditions in a contract that we might not deem acceptable. BecauseAlthough we increased our bidding frequency and reduced the size of the projects we bid on during 2025, because a significant portion of our revenue is generated from large projects, our results of operations can fluctuate quarterly and annually depending on whether and when large project awards occur and the commencement and progress of work under large contracts already awarded. Additionally, because these large projects may take a number of years to complete, we may not be able to pass on inflation or commodity exposure, including as a result of evolving tariff or trade policies, onto our customers. As a result, we are subject to the risk of losing new awards to competitors or the risk that revenue may not be derived from awarded projects as quickly as anticipated.anticipated, or at all.

We require aggregates (raw materials that are produced from natural sources and extracted from pits and quarries such as gravel, crushed stone and sand) in connection with our business. Strict governmental regulations and the limited number of properties containing useful aggregates have made it increasingly challenging and costly to obtain sufficient aggregates to support our business, both with respect to internal use and third-party sales. If we are unable to obtain aggregates to support our business, then our financial condition, results of operations and cash flows may be adversely affected.

We participate in various multiemployer pension plans in the United States under union agreements that generally provide defined benefits to employees covered by collective bargaining agreements. Absent an applicable exemption, a contributor to a U.S. multiemployer plan is liable, upon termination or withdrawal from a plan, for its proportionate share of the plan's underfunded vested liability. Funding requirements for benefit obligations of these multiemployer pension plans are subject to certain regulatory requirements, and we may be required to make cash contributions that may be material to one or more of these plans to satisfy certain underfunded benefit obligations. As of January 3,2, 20252026 and DecemberJanuary 29,3, 2023,2025, we recorded no liability for underfunding of multiemployer pension plans in which we participate, as no events triggering our obligation to make contributions for such underfunding were deemed probable to occur.

In March 2023, we entered into a Revolving Credit Facility (as amended, the "Revolving Credit Facility") and onOn May 20, 2024, we, as guarantor, and our wholly-owned subsidiaries as borrowers, entered into a Credit Agreement (as amended, the "Credit Agreement"). and on March 12, 2025 and March 31, 2025, we entered into the ACF Credit Agreement and Ansley Loan Agreement, respectively. The terms of our existing debt agreements (including our RevolvingCredit Agreement, ACF Credit FacilityAgreement and ourAnsley CreditLoan Agreement) contain, and any debt agreements governing our future indebtedness may contain, a number of restrictive covenants and other provisions that impose significant operating and financial restrictions on us, including restrictions on our ability, and the ability of our subsidiaries, to take actions that may be in our best interests, including, among others, disposing of assets, entering into change of control transactions, mergers or acquisitions, incurring additional indebtedness, granting liens on our assets, declaring and paying dividends, and agreeing to do any of the foregoing.

While we are currently in compliance with all covenants under the RevolvingCredit Agreement, ACF Credit FacilityAgreement and theAnsley CreditLoan Agreement, our ability to meet financial covenants can be affected by events beyond our control, and we may not be able to continue to meet such covenants in the future. A breach of any of these covenants or other restrictions or the occurrence of other events (including a material adverse effect or the inability to generate cash to service our obligations under our debt agreements) specified in our debt agreements could result in an event of default. Upon the occurrence of an event of default, our lenders could elect to declare all amounts outstanding, if any, to be immediately due and payable and terminate all commitments to extend further credit under our debt agreements. If we were unable to repay those amounts, we could be forced to curtail our operations, reorganize our capital structure (including through bankruptcy proceedings) or liquidate some or all of our assets in a manner that could adversely impact our business and cause holders of our securities to experience a partial or total loss of their investment in us.

Our ongoing ability to generate cash is important for funding our continuing operations, making acquisitions and servicing our indebtedness. To the extent that existing cash balances and cash flows from operations, together with borrowing capacity under our existing debt agreements, are insufficient to make investments or acquisitions or provide needed working capital, we may require additional financing from other sources. Our ability to obtain such additional financing in the future will depend in part on prevailing market conditions, as well as conditions in our business and our results of operations. In addition, if AECOMour prior owner defaults on its contractual obligations under agreements in which we are a beneficiary, our ability to obtain financing could be adversely impacted. Furthermore, if global economic, political or other market conditions adversely affect the financial institutions that provide credit to us, it is possible that our ability to draw upon our existing debt and credit facility may be impacted. If adequate funds are not available, or are not available on acceptable terms, we may not be able to make certain investments, take advantage of acquisitions or other opportunities, or respond to competitive challenges, each of which could have a material adverse impact on our business, financial condition, results of operations and cash flows.

The property, plant and equipment needed to produce our products and provide our services can be very expensive. We must spend a substantial amount of capital to purchase and maintain such assets. Although we believe our current cash balance, along with our projected internal cash flows and available financing sources, will provide sufficient cash to support our currently anticipated operating and capital needs, if we are unable to generate sufficient cash to purchase and maintain the property, plant and equipment necessary to operate our business, or if the timing of payments on our receivables is delayed, we may be required to reduce or delay planned capital expenditures or to incur additional indebtedness. In addition, due to the level of fixed and semi- fixedsemi-fixed costs associated with our business, volume decreases could have a material adverse effect on our financial condition, results of operations or liquidity.

To protect confidential customer, vendor, financial and employee information, we employ information security measures that secure our information systems from cybersecurity attacks or breaches. Even with these measures, we may be subject to unauthorized access of digital data with the intent to misappropriate information, corrupt data or cause operational disruptions. If a failure of our safeguarding measures were to occur, or if software or third-party vendors that support our information technology environment are compromised, it could have a negative impact to our business and result in business interruptions, remediation costs and/or legal claims, which could have a material adverse effect on our business, financial condition, results of operations and cash flows and which may not be fully insured by our cyber risk insurance policy. For example, the SEC recently adopted rules requiring the disclosure of cybersecurity incidents that we determine to be "material," to be made within four business days of such determination, which can be complex, requiring a number of assumptions based on several factors. It is possible that the SEC may not agree with our determinations, which could result in fines, civil litigation or damage to our reputation. For more information about our cybersecurity risk management processes, see "Item 1C. Cybersecurity."

Pandemics and public health emergencies may impact our results of operations, cash flows and financial condition in ways that are uncertain, unpredictable and outside of our control. The extent of the impact of such an event depends on the severity and duration of the public health emergency or pandemic, as well as the nature and duration of federal, state and local laws, orders, rules, emergency temporary standards, regulations and mandates, together with protocols and contractual requirements implemented by our customers, that may be enacted or newly enforced in response. Additionally, our ability to perform our work during such an event may be dependent on the governmental or societal responses to these circumstances in the markets in which we operate. We experienced many of these risks in connection with the COVID-19 pandemic. A pandemic or public health emergency is likely to heighten and exacerbate the risks described herein and could adversely affect our revenue, results of operations, and cash flows.

We are exposed to various commodity price risks, including, but not limited to, cement, steel, liquid asphalt, lumber, diesel fuel, natural gas and propane arising from transactions that are entered into in the normal course of business. We use petroleum based products, such as fuels, lubricants and liquid asphalt, to power or lubricate our equipment, operate our plants and as a significant ingredient in the asphaltic concrete we manufacture for sale to third parties and use in our asphalt paving construction projects. Although we are partially protected by asphalt or fuel price escalation clauses in some of our contracts, many contracts provide no such protection. We also use steel and other commodities in our construction projects that can be subject to significant price fluctuations. 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 which partially protect us from increasing prices. Significant price fluctuationsfluctuations, including those as a result of evolving tariff or trade policies, could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Commodity prices can also affect our customers in a number of ways. For example, for those customers that produce commodity products such as concrete, steel products, lumber and oil and gas, fluctuations in price can have a direct effect on their profitability and cash flows and, therefore, their willingness to continue to invest or make new capital investments. To the extent commodity prices decline or fluctuatefluctuate, including those as a result of evolving tariff or trade policies, and our customers defer new investments or cancel or delay existing projects, the demand for our services decreases, which may have a material adverse impact on our business, financial condition, results of operations and cash flows.

Our ability to conduct business can be impacted by changes in tariffs, changes or repeals of trade agreements or the imposition of other trade restrictions or retaliatory actions imposed by various governments. For example, the new U.S. presidential administration has announced certain changes, and has proposed toadditional significantlychanges, increasein trade policies, including the imposition of significant tariffs on foreign imports intofrom other countries. These actions have resulted in, and are expected to further result in, responsive actions by impacted countries. The imposition of certain tariffs, including the United States, and any new“reciprocal tariffs” announced by the Trump administration, have been introduced and continuepaused on numerous occasions, pending negotiations with the relevant countries. As a result, there continues to be rapidlysignificant uncertainty regarding the extent and activelyduration evolving.of Theapplicable state, durationtariffs, and scopetheir ofimpact any tariffs enacted are uncertain and unpredictable. Other effects of these changes, including responsive actions from governments andon the unpredictabilityglobal ofeconomy. U.S.Any governmentalresulting actioneconomic anddownturns response,or market volatility could also have significant impacts on our financial results. For example, rising prices could strain customer budgets and may result in downscaling or cancellation of future projects due to funding shortages, particularly with our customers. We cannot predict what further action may be taken with respect to tariffs or trade relations between the U.S. and other governments, and any further changes in U.S. or international trade policy could have an adverse impact on our business.

Our operations are subject to stringent and complex federal, state and local laws and regulations governing the discharge of materials into the environment or otherwise relating to environmental protection and public health and safety. These laws and regulations impose numerous obligations applicable to our operations, including requirements to obtain a permit or other approval before conducting regulated activities, restrictions on the types, quantities and concentration of materials that can be released into the environment, limitations on activities on certain lands lying within wilderness, wetlands and other protected areas, and assessments of substantial liabilities for pollution resulting from our operations. For example, a number of governmental bodies have finalized, proposed or are contemplating legislative and regulatory actions to reduce emissions of greenhouse gases, such as monitoring, reporting and emissions control requirements for certain large sources of greenhouse gases and greenhouse gas cap-and-trade programs. Although certain of these actions are currently stayed pending judicial review and it is uncertain whether all applicable governing bodies will continue to pursue such legislation and regulation, particularly in light of the changing governing bodies as a result of the 2024 election cycle, if implemented as proposed, because we emit greenhouse gases through the combustion of fossil fuels as part of our operations, any such laws and regulations applicable to jurisdictions in which we operate could require us to incur costs to reduce greenhouse gas emissions associated with our operations, which would significantly increase our climate-related costs and disclosure obligations.

In certain instances, citizen groups also have the ability to bring legal proceedings against us if we are not in compliance with environmental laws, or to challenge our ability to receive environmental permits that we need to operate. In addition, claims for damages to persons or property, including natural resources, may result from the environmental, health and safety impacts of our operations. Our insurance may not cover all environmental risks and costs or may not provide sufficient coverage if an environmental claim is made against us. Moreover, public interest in the protection of the environment has increased dramatically in recent years. The trend ofIf more expansive and stringent environmental legislation and regulations were applied to our industryindustry, could continue, resulting in increasedour costs of doing business could and increase and, consequently, affectingaffect our profitability.

Our failure to comply with the regulations of EPA, OSHA and state and local agencies that oversee safety compliance could adversely affect our business, financial condition, results of operations, profitability, cash flows and growth prospects.

We continue to assess the impact of various U.S. federal, state and international legislative proposals that could result in a material increase to our U.S. federal, state and/or international taxes. We cannot predict whether any specific legislation will be enacted or the terms of any such legislation, particularly in light of the new governing bodies as a result of the 2024 election cycle.legislation. However, if such proposals were to be enacted, or if modifications were to be made to certain existing regulations, the consequences could have a material adverse impact on us, including increasing our tax burden, increasing our cost of tax compliance or otherwise adversely affecting our business, financial condition, results of operations and cash flows. In addition, U.S. federal and state tax laws and regulations, including the One Big Beautiful Bill Act that was enacted in 2025, are extremely complex and subject to varying interpretations. There can be no assurance that our tax positions will not be challenged by relevant tax authorities or that it would be successful in any such challenge.

Although we believe that we may benefit from initiatives seeking to address the effects of climate change, and we seek to mitigate our business risks associated with climate change by establishing robust environmental programs and partnering with organizations who are also focused on mitigating their own climate related risks, we recognize that there are inherent climate related risks wherever business is conducted. Access to clean water and reliable energy in the communities where we conduct our business is a priority and is not guaranteed. Any of these locations may be vulnerable to the adverse effects of climate change. For example, California, where we conduct a significant amount of business, has historically experienced, and is projected to continue to experience, climate-related events including drought and water scarcity, warmer temperatures, extreme weather, wildfires and air quality impacts and power shut-offs associated with wildfire prevention. Climate-related events, including the increasing frequency of extreme weather events and their impact on critical infrastructure in the U.S. and elsewhere, have the potential to disrupt our business, our third-party suppliers, and the business of our customers, and may cause us to experience higher attrition, losses and additional costs to maintain or resume operations.

Additionally, governmental bodies in the United States are enacting new or additional legislation and regulations to reduce or mitigate the potential impacts of climate change. Although certain of these actions are currently stayed pending judicial review and it is uncertain whether all applicable governing bodies will continue to pursue such legislation and regulation, if implemented as proposed, because we emit greenhouse gases through the combustion of fossil fuels as part of our operations, any such laws and regulations applicable to jurisdictions in which we operate could require us to incur costs to reduce greenhouse gas emissions associated with our operations, which would significantly increase our climate-related costs and disclosure obligations. If we, our suppliers, or our customers are required to comply with these laws and regulations, or if we choose to take voluntary steps to reduce or mitigate our impact on climate change, we may experience increased costs for energy, production, transportation, and raw materials, increased capital expenditures, or increased insurance premiums and deductibles, which could adversely impact our operations. Inconsistency of legislation and regulations among jurisdictions may also affect the costs of compliance with such laws and regulations. Any assessment of the potential impact of future climate change legislation, regulations or industry standards is uncertain given the wide scope of potential regulatory change in the United States, particularly in light of the changing governing bodies as a result of the 2024 election cycle.States.

In recent years, there has been focus from stakeholders, including government agencies, investors, consumers and employees, on our policies and practices related to corporate responsibility, including environment, climate, inclusion, human rights and governance transparency. Various jurisdictions are developing climate-related laws or regulations that could cause us to incur additional direct costs for compliance, as well as indirect costs resulting from our customers, suppliers, or additional compliance costs that are passed on to us. Additionally, public interest and legislative pressure related to public companies’ corporate responsibility practices continues to grow. If our policies and practices do not meet regulatory requirements or stakeholders’ expectations for responsible corporate citizenship in areas including environmental stewardship, employee health and safety practices, human capital management and corporate governance, our reputation and employee retention may be negatively impacted, and customers and suppliers may be unwilling to do business with us. In addition, we are subject to various federal and state laws in connection with our operations, and inconsistency in legislation and regulations among jurisdictions and expected additional regulations may require greater resources to monitor, report and comply with various practices related to corporate responsibility. Any assessment of the potential impact of future corporate responsibility-related regulations or industry standards is uncertain given the wide scope of potential regulatory change where we operate. Further, there are a number of state-level anti-ESG initiatives in the United States that may conflict with other regulatory requirements or various stakeholders’ expectations. If we fail to comply or meet the legal and regulatory requirements or expectations of our various stakeholders, we may be subject to enforcement actions, required to pay fines, and/or investors may sell their share, all of which could have short- and long-term impacts on our business and operations.

OurAs of January 2, 2026, our controlling stockholder beneficially ownsowned over 60%59% of our outstanding shares of common stock. As a result, the controlling stockholder can exert substantial influence over the outcome of any corporate matter submitted to our stockholders for approval, including the election of directors and any transaction that might cause a change in control, such as a merger or acquisition. Any stockholder in favor of a matter that is opposed by our controlling stockholder and members of our management would have to obtain a significant number of votes to overrule their votes.

Because we are relying on the exemptions from corporate governance requirements as a result of being a “controlled company” underwithin the listing standards of Nasdaq and the rulesmeaning of the SEC,Nasdaq ourlisting stockholdersstandards, you do not have certainthe corporate governancesame protections that are availableafforded to stockholders of companies that are notsubject controlledto companies.such requirements.

We have a long history of successfully completing complex water projects, ranging from the world’s largest wastewater recycling and purification system in California to the iconic Hoover Dam. According to Engineering News Record, in 2024,2025, we are nationally ranked as a top tenfifteen builder of water supply (#812), dams and reservoirs (#68), and water treatment and desalination plants (#711). Our business includes construction operations from Morrison Knudsen and Washington Group International which were consolidated in 2017 by AECOM. In 2021, we were sold by AECOM and became an independent company under new private ownership (the "AECOM Sale Transaction"). In November 2023, we completed our initial public offering (the “IPO”) and currently our stock is listed for trading on the Nasdaq Capital Market under the symbol "SHIM".

Transportation and Mobility. We construct mass transit systems (light passenger rail and bus rapid transit), autonomous transportation solutions (personal rapid transit, autonomous fixed guideway people movers, etc.) and implement intelligent transportation technologies.

As of January 3,2, 2025,2026, we had a backlog of projects of approximately $822$793 million, mostly located in California, with ongoing projects in sixfive other states. We self-perform many of these projects, which we believe allows us to better control critical aspects of construction, reduce cost and schedule risks, and deliver greater value to clients.

Our History,History and the AECOM Sale Transaction and 2024 Financing Transactions

In January 2021, we were sold by AECOM and began operating as an independent company under new private ownership ("AECOM Sale Transaction") under a December 2020 Purchase Agreement with SCC Group, a special purpose entity formed for the purpose of entering into and consummating the sale transaction including acquiring 100% of the stock of the Company and certain other assets related to our business and our subsidiaries to the extent owned by Seller Entities or their affiliates. After the transaction, we began a transformation to shift our strategy to meet the nation’s growing need for water and other critical infrastructure and grow our business. We are also focusing more on smaller complex projects that we can largely self-perform and which we believe will have lower risk and higher margin.

Our Ability to Successfully Expand our Footprint. We review our bidding opportunities to attempt to minimize concentration of work with any one customer, in any one industry, or in tight labor markets. We believe that by carefully positioning ourselves in markets that have meaningful barriers to entry, like those with highly technical or specialized scopes of work, we can continue to be competitive. For example, we target projects with significant, highly-technical work that we can self-perform. We believe this provides us with a distinct pricing advantage, as well as better risk management. In addition, as a result of federal and state-level infrastructure initiatives, we believe that funding for technical construction projects may exceed capacity, enabling us to opportunistically target smaller specialized projects with less risk at higher margins. Furthermore, on June 23, 2025 we announced the launch of Axia Electric, a dedicated electrical subsidiary designed to meet growing market demand for specialized, high-performance electrical and power distribution solutions, which represents an expansion of our electrical capabilities and positions us to expand to additional geographies such as Texas, Georgia and Tennessee. We may be limited in our ability to expand our footprint into these new project types and geographies by barriers to entry to new markets, competition, and availability of capital and skilled labor.

Gross margin represents revenue less contract costs. Contract costs consist of all direct and indirect costs on contracts, including raw materials, labor, equipment costs, and subcontractor costs. If the estimates of costs to complete fixed-price contracts indicate a further loss, the entire amount of the additional loss expected over the life of the project is recognized in the current period in the cost of revenue.

Equity in Earnings (Loss) Earnings of Unconsolidated Joint Ventures

Equity in earnings (loss) earnings of unconsolidated joint ventures includes our return on investment in unconsolidated joint ventures.

The following table sets forth selected financial data for the fiscal year ended January 3,2, 20252026 compared to the fiscal year ended DecemberJanuary 29,3, 20232025:

The following table sets forth disaggregated data on revenues and gross margin for the fiscal year ended January 3,2, 20252026 compared to the fiscal year ended DecemberJanuary 29,3, 20232025:

Projects started after the AECOM Sale Transaction ("Shimmick Projects") have focused on watercritical infrastructure aligned with our strategy, including water, climate resilience, energy transition and othersustainable critical infrastructure.transportation. Revenue recognized on Shimmick Projects was $356$397 million and $386$356 million for the fiscal years ended January 3,2, 20252026 and DecemberJanuary 29,3, 2023,2025, respectively. The $30$42 million decreaseincrease in revenue was primarily the result of a $82$87 million decreaseof revenue from new higher margin projects ramping up and $31 million of revenue from a California Palisades fire clean-up project, partially offset by $77 million of decreases in revenue from lower activity on existing projects and projects winding down partially offset by an aggregate of $52 million of revenue from a new water infrastructure project and ramp up of a transportation project.down.

Gross margin recognized on FoundationsShimmick Projects was $(18)$40 million and $(9)$12 million for the fiscal years ended January 3,2, 20252026 and DecemberJanuary 29,3, 2023,2025, respectively. The decline$28 million increase in the gross margin was primarily the result of $21 million in gross margin wasfrom thenew resultprojects oframping cost overrunsup and projects$7 windingmillion down.in gross margin from a California Palisades fire clean-up project.

Equity in earnings (loss) earnings of unconsolidated joint ventures

Equity in (loss) earnings of unconsolidated joint ventures was $(5)$2 million,million for the fiscal year ended January 2, 2026 compared to earningsequity in loss of $10unconsolidated joint ventures of $5 million infor the priorfiscal year period,ended January 3, 2025 primarily as the result of increased costs due ato favorableschedule subcontractorextensions settlementexperienced during the fiscal year ended DecemberJanuary 29,3, 20232025 thatwhich did not reoccur during the fiscal year ended January 3,2, 2025 and increased costs due to schedule extensions.2026.

Gain on sale of assetsassets, net decreased by $11 million primarily due to the gain recognized on the sale of non-core business contracts for $30$21 million during the fiscal year ended DecemberJanuary 29,2, 2023,2026 partiallyprimarily offsetdue byto the $17 million gain recognized on the transaction for the sale-leaseback of our equipment yard in Tracy, California and $2the $4 million gain recognized on the sale of the assets of our non-corefoundation Foundationsdrilling ProjectsNon-Core Projects, each of which occurred during the fiscal year ended January 3, 2025.2025 and did not reoccur during the fiscal year ended January 2, 2026.

Interest expense increased by $3$1 million primarily due to increased average borrowings on the Credit Agreement,Agreement whichduring wasthe enteredfiscal intoyear onended MayJanuary 20,2, 20242026 as well as interest chargesexpense incurred on the RevolvingACF Credit FacilityAgreement whichand wasAnsley notLoan Agreement entered into untilduring Marchthe 27,fiscal 2023.year ended January 2, 2026.

Other (income) expense, net

Due to a tax loss for the fiscal year ended 2025, no income tax expense was recorded for the fiscal year ended January 2, 2026. Income tax benefit of $1 million was recognized for the fiscal year ended January 3, 2025, primarily as the result of a decrease in other taxes payable. No taxable income was recognized for the fiscal year ended December 29, 2023, thus no income tax expense or benefit was recorded.

Net loss increaseddecreased by $122 million from $2$100 million to a net loss of $125$25 million for the fiscal year ended January 3,2, 2025,2026, primarily due to aan decreaseincrease in gross margin of $78$89 million of which $52 million wasmillion, a result of gross margin declinesdecrease in the legacy and foundations projects. In addition, the ERP pre-implementation asset impairment and associated costs of $16 million, a decrease ofin gainselling, ongeneral theand saleadministrative expenses of assets of $11$9 million, an increase in equity in earnings (loss) of unconsolidated joint ventures of $15$6 million asand wellan asincrease in other (income) expense, net of $2 million, partially offset by a decrease in gain on sale of assets of $21 million and an increase in interest expense of $3$1 millionmillion, added to the net loss increase, eachall as described above.

We report our financial results in accordance with GAAP. However, management believes that certain non-GAAP financial measures provide investors with additional useful information in evaluating our performance. Therefore, to supplement our consolidated financial statements, we provide investors with certain non-GAAP financial measures, including Adjusted net (loss) income and Adjusted EBITDA.

Adjusted net (loss) income

Adjusted net (loss) income represents Net loss attributable to Shimmick Corporation adjusted to eliminate stock-based compensation, ERP pre-implementation asset impairment and associated costs, legal fees and other costs for LegacyNon-Core Projects and transaction-related costs and changes in fair value of contingent consideration remaining after the impact of transactions with our prior owner. We have also made an adjustment for transformation costs we have incurred including advisory costs in connection with settling outstanding claims, exiting the LegacyNon-Core Projects and transforming the Company to shift our strategy to meet the nation’s growing need for water and other critical infrastructure and grow our business.

We have included Adjusted net (loss) income in this Annual Report on Form 10-K because it is a key measure used by our management and board of directors to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget and to develop short and long-term operational plans. In particular, we believe that the exclusion of the income and expenses eliminated in calculating Adjusted net (loss) income can provide a useful measure for period-to-period comparisons of our core business. Accordingly, we believe that Adjusted net (loss) income provides useful information to investors and others in understanding and evaluating our results of operations.

Our use of Adjusted net (loss) income as an analytical tool has limitations, and you should not consider it in isolation or as a substitute for analysis of our financial results as reported under GAAP. Some of these limitations are:

Adjusted net (loss) income does not reflect changes in, or cash requirements for, our working capital needs, Adjusted net (loss) income does not reflect the potentially dilutive impact of stock-based compensation, and other companies, including companies in our industry, might calculate Adjusted net (loss) income or similarly titled measures differently, which reduces their usefulness as comparative measures.

Because of these and other limitations, you should consider Adjusted net (loss) income alongside Net loss attributable to Shimmick Corporation, which is the most directly comparable GAAP measure.

Adjusted EBITDA represents our netNet loss attributable to Shimmick Corporation before interest expense, income tax benefit and depreciation and amortization, adjusted to eliminate stock-based compensation, ERP pre-implementation asset impairment and associated costs, legal fees and other costs for LegacyNon-Core Projects and transaction-related costs and changes in fair value of contingent consideration remaining after the impact of transactions with our prior owner. We have also made an adjustment for transformation costs we have incurred including advisory costs in connection with settling outstanding claims, exiting the LegacyNon-Core Projects and transforming the Company to shift our strategy to meet the nation’s growing need for water and other critical infrastructure and grow our business.

(1) Consists of transformation-related costs we have incurred including advisory costs in connection with settling outstanding claims in connection with exiting certain LegacyNon-Core Projects as part of the Company’s growth strategy to address and capitalize on the nation’s growing need for water and other critical infrastructure.

As of AprilJuly 3, 2026, we had a backlog of projects of approximately $944$991 million, mostly located in California, with ongoing projects in six other states. We self-perform many of these projects, which we believe allows us to better control critical aspects of construction, reduce cost and schedule risks, and deliver greater value to clients.

Equity in Earnings (Loss) of Unconsolidated Joint Ventures

Three Months Ended AprilJuly 3, 2026 compared to the Three Months Ended AprilJuly 4, 2025

The following table sets forth selected financial data for the three months ended AprilJuly 3, 2026 compared to the three months ended AprilJuly 4, 2025:

The following table sets forth selected revenue and gross margin data for the three months ended AprilJuly 3, 2026 compared to the three months ended AprilJuly 4, 2025:

Projects started after the AECOM Sale Transaction ("Shimmick Projects") have focused on critical infrastructure aligned with our strategy, including water, climate resilience, energy transition and sustainable transportation. Revenue recognized on Shimmick Projects was $88$96 million and $93$113 million for the three months ended AprilJuly 3, 2026 and AprilJuly 4, 2025, respectively. The $5$17 million decrease in revenue was primarily the result of $21a $22 million decrease in revenue as the result of the completion of a lower margin operation and maintenance project during the third quarter of fiscal year 2025 and $32 million of decreases in revenue from lower activity on existing projects and projects winding downdown. asThese welldecreases as $13 million of revenue from a fire clean-up project which was included in revenue for the three months ended April 4, 2025 but was completed during the second quarter of fiscal year 2025 and did not reoccur for the three months ended April 3, 2026,were partially offset by $29$37 million of increases in revenue from new higher margin projects ramping up.

Gross margin recognized on Shimmick Projects was $10$11 million and $5$15 million for the three months ended AprilJuly 3, 2026 and AprilJuly 4, 2025, respectively. The $5$4 million increasedecrease in the gross margin was primarily the result of $12 million of decreases in gross margin from lower activity on existing projects and projects winding down, partially offset by $8 million of increases in gross margin from new higher margin projects ramping up.

Non-Core Projects revenue was $200$11 thousandmillion and $29$16 million for the three months ended AprilJuly 3, 2026 and AprilJuly 4, 2025, respectively. The $29$5 million decrease was primarily the result of the notice of termination associated with the Chickamauga Lock Replacement Project as well as a $10 million decrease from the Company working to wind down these Non-Core projects.projects Seeas Notewell 12as -the Subsequenttermination Eventsof forone additionalNon-Core details.project in Tennessee.

Gross margin recognized on Non-Core Projects was $1$2 million for the three months ended AprilJuly 3, 2026 as compared to $(17) million for the three months ended AprilJuly 4, 2025. The $2$9 million increase was primarily the result of a positive outcome of a project close-out as well as certain time and design-related schedule extensions identified during the three months ended AprilJuly 4, 2025 which did not reoccur during the three months ended AprilJuly 3, 2026.2026 as well as a favorable settlement and closeout of other Non-Core projects in the current year.

A subset of Non-Core Projects ("Non-Core Loss Projects") havehas experienced significant cost overruns due to the COVID pandemic, design issues, legal costs and other factors. In the Non-Core Loss Projects, we have recognized the estimated costs to complete and the loss expected from these projects. If the estimates of costs to complete fixed-price contracts indicate a further loss, the entire amount of the additional loss expected over the life of the project is recognized as a period cost in the cost of revenue. As these Non-Core Loss Projects continue to wind down to completion, no further gross margin will be recognized absent external factors and in some cases, there may be additional costs associated with these projects that could lower gross margin. Revenue recognized on these Non-Core Loss Projects was $(5)$10 million and $18$13 million for the three months ended AprilJuly 3, 2026 and AprilJuly 4, 2025, respectively. Gross margin recognized on these Non-Core Loss Projects was $(1)$1 million and $(23) million for the three months ended AprilJuly 3, 2026 and AprilJuly 4, 2025, respectively. The change in gross margin was primarily the result of cost increases for time and design-related schedule extensions identified during the three months ended July 4, 2025 which did not reoccur during the three months ended July 3, 2026.

Selling, general and administrative expenses remainedincreased approximatelyby flat$1 periodmillion overduring period.the three months ended July 3, 2026 primarily as a result of increases in legal costs.

Equity in earnings (loss) of unconsolidated joint ventures remained approximately flat period over period.

Interest expense increased by $1$2 million during the threesix months ended AprilJuly 3, 2026 primarily due to increased average long-term debt balances outstanding during the threesix months ended AprilJuly 3, 2026 as compared to the threesix months ended AprilJuly 4, 2025.

Other income,expense (income), net remained approximately flat period over period.

Due to an expected tax loss for the fiscal year ending 2026 and a realized tax loss for the fiscal year ended 2025, no income tax expense was recorded for either the threesix months ended AprilJuly 3, 2026 or the threesix months ended AprilJuly 4, 2025.

Net loss decreased by $6$9 million to a net loss of $4$9 million for the threesix months ended AprilJuly 3, 2026, primarily due to an increase in gross margin of $6$11 million and increase in equity in earnings of unconsolidated joint ventures of $2 million, partially offset by an increase in interest expense of $2 million and an increase in selling, general and administrative expenses of $1 millionmillion, all as described above.

Our capital expenditures were approximately $1 million for each of the threesix months ended AprilJuly 3, 2026 and AprilJuly 4, 2025. Historically, we have had significant cash requirements in order to organically expand our business to undertake new projects. Our cash requirements include costs related to increased expenditures for equipment, facilities and information systems, purchase of materials and production of materials and cash to fund our organic expansion into new markets, including through joint ventures. Our working capital needs are driven by the seasonality and growth of our business, with our cash requirements greater in periods of growth. Additional cash requirements resulting from our growth include the costs of additional personnel, enhancing our information systems, our compliance with laws and rules applicable to being a public company and, in the future, our integration of any acquisitions. Unrestricted cash and cash equivalents at AprilJuly 3, 2026 totaled $15$17 million and availability under the Credit Agreement and ACF Credit Agreement totaled $13$4 million and $6$12 million, respectively, resulting in total liquidity of $34$33 million.

On May 20, 2024, the Company, as guarantor, and its wholly-owned subsidiaries as borrowers (“Borrowers”), Alter Domus (US) LLC, as agent, and AECOM and Berkshire Hathaway Specialty Insurance Company (“BHSI”) as lenders, entered into a revolving credit facility (the “Credit Agreement”), which was most recently amended on MayJuly 8,29, 2026 to, among other things, waive the specified noncompliance of the Material Project Documents covenant regarding entering into non-bonded contracts. As amended, the Credit Agreement provides borrowing capacity up to $60 million. The obligations under the Credit Agreement bear interest at a per annum rate equal to One Month Term SOFR (as defined in the Credit Agreement), subject to a 1.00% floor, plus 3.50%. Interest on any outstanding amounts drawn under the Credit Agreement will be payable, in kind or in cash at our election, on the last day of each month and upon prepayment. Payment-in-kind interest accrued and capitalized shall not constitute loan outstanding amounts for the purposes of calculating loan availability.

The Credit Agreement contains customary affirmative and negative covenants for a transaction of this type, including covenants that limit liens, asset sales and investments, in each case subject to negotiated exceptions and baskets. In addition, the Credit Agreement contains a maximum leverage ratio covenant as tested quarterly commencing with the close of the secondthird quarter of 2027. The Credit Agreement also contains representations and warranties and event of default provisions customary for a transaction of this type. The Company is not aware of any instances of noncompliance with non-financial or financial covenants as of AprilJuly 3, 2026.

On March 12, 2025, we entered into a credit agreement (“ACF Credit Agreement”) with ACF FINCO I LP, which provides a total commitment of $15 million and bears interest at an annual rate of adjusted term SOFR (as defined in the ACF Credit Agreement), subject to a 2.0% floor, plus 4.50%. Further, the ACF Credit Agreement is subject to an annual unused line fee of 0.50%. The ACF Credit Agreement includes certain financial operating covenants, including a minimum liquidity requirement of $5 million. The ACF Credit Agreement matures on the earlier of March 12, 2028 or 90 days prior to the maturity date of the Credit Agreement. As of AprilJuly 3, 2026, we are not aware of any instances of noncompliance with non-financial or financial covenants.

Each Promissory Note has a maturity date of April 1, 2031, and accrues interest at a rate of 12.50% per annum. Pursuant to the terms of the Ansley Loan Agreement, we granted a security interest in (a) certain items of equipment described therein, (b) all leases, rental contracts, chattel paper, accounts, security deposits and general intangibles relating thereto and (c) and any and all proceeds thereof as collateral for the payments under the Ansley Loan Agreement. The Ansley Loan Agreement contains customary affirmative and negative covenants for a transaction of this type. In connection with the Ansley Loan Agreement, we entered into a separate guaranty agreement (each, a “Guaranty Agreement,” and together, the “Guaranty Agreements”) in favor of the Ansley Park Capital LLC unconditionally guaranteeing our liabilities and the liabilities of one of our wholly-owned subsidiaries under the Ansley Loan Agreement. As of AprilJuly 3, 2026, we are not aware of any instances of noncompliance with non-financial or financial covenants.

During the threesix months ended AprilJuly 3, 2026, the Company paid $1$2 million in cash interest,interest and accruedexpensed $5$2 million in thenon-cash aggregatepayment-in-kind ininterest. non-cashThe total accrued payment-in-kind interest as of AprilJuly 3, 2026.2026 was $6 million.

On September 8, 2025, the Companywe entered into an At The Market Offering Agreement (the “Sales Agreement”) with Roth Capital Partners, LLC (the “Sales Agent”). Under the Sales Agreement, the Sales Agent may, at the Company’sour discretion, sell up to $7.8 million of shares of the Company’sour common stock, in “at the market offerings” as defined in Rule 415 under the Securities Act of 1933, as amended. The shares will be sold pursuant to the Company’sour Registration Statement on Form S-3 (File No. 333-288513), declared effective by the SEC on July 10, 2025, and the related prospectus supplement (the “Initial Prospectus Supplement”) dated September 8, 2025 filed with the SEC in connection with the offer and sale of the shares.shares, and the related prospectus supplement dated May 22, 2026, filed with the SEC in connection with the offering made pursuant to the Underwriting Agreement (the “Additional Prospectus Supplement,” and together with the Initial Prospectus Supplement, the “Prospectus Supplements”), which reduced the amount of our common stock registered under the Prospectus to $5.0 million.

TheWe Company isare not obligated to make any sales of shares under the Sales Agreement, and no assurance can be given that the Companywe will sell any shares under the Sales Agreement, or, if thewe Company does,do, as to the price or amount of shares that the Companywe will sell, or the dates on which any such sales will take place. The CompanyWe or the Sales Agent, under certain circumstances and upon notice to the other, may suspend the offering of the shares under the Sales Agreement. The offering of the Shares pursuant to the Sales Agreement will terminate upon the sale of shares in an aggregate offering amount equal to $7.8 million, or sooner if either the Companywe or the Sales Agent terminates the Sales Agreement. The CompanyWe will pay the Sales Agent a cash commission in an amount up to 3% of the gross proceeds from each sale of Shares sold pursuant to the Sales Agreement and will reimburse the Sales Agent for the documented fees and costs of its legal counsel reasonably incurred in connection with entering into the transactions contemplated by the Sales Agreement in an amount not to exceed $50,000 in the aggregate.

The CompanyWe made certain customary representations, warranties and covenants in the Sales Agreement concerning the Companyus and itsour subsidiaries and the Registration Statement, Prospectus, Prospectus SupplementSupplements and other documents and filings relating to the offering of the shares. In addition, thewe Company hashave agreed to indemnify the Sales Agent against certain liabilities, including liabilities under the Securities Act. The shares to be sold under the Sales Agreement, if any, will be issued and sold pursuant to the Company’s Registrationour Statement, and its Prospectus SupplementSupplements related thereto.

During the threesix months ended AprilJuly 3, 2026, net cash used in operating activities was $8$25 million, compared to net cash used in operating activities of $38$42 million for the threesix months ended AprilJuly 4, 2025. Cash flows used in operating activities were driven by net loss, adjusted for various non-cash items and changes in contract liabilities, contract assets, accounts payable and accrued expenses balances, accounts receivable and other assets and liabilities as discussed below.

Operating assets and liabilities — The change in operating assets and liabilities varies due to fluctuations and timing in operating activities. The changes in the components of operating assets and liabilities during the threesix months ended AprilJuly 3, 2026 and AprilJuly 4, 2025 were as follows:

During the threesix months ended AprilJuly 3, 2026, the decrease in operating assets and liabilities was $7$22 million, which was primarily driven by decreases in contract assetsassets, contract liabilities and accounts payable, partially offset by increases in accrued expenses and contract liabilities.receivable. The Company’s operating assets and liabilities fluctuations are impacted by the mix of projects in backlog, seasonality, the timing of new awards and related payments for work performed and the contract billings to the customer as projects are completed. Operating assets and liabilities are also impacted at period end by the timing of accounts receivable collections and accounts payable payments for projects.

For the threesix months ended AprilJuly 3, 2026, net cash usedprovided inby investing activities was $600$2 thousand,million, which was primarily driven by purchasesproceeds from sale of property, plant and equipment.assets.

For the threesix months ended AprilJuly 4, 2025, net cash usedprovided inby investing activities was $400$2 thousand,million, which was primarily driven by purchasesreturn of property,investment plantin andunconsolidated equipment.joint ventures.

For the threesix months ended AprilJuly 3, 2026, net cash provided by financing activities was $3$19 million, which primarily consisted of borrowings from credit agreements of $10$33 million and net proceeds from an underwritten equity offering of $14 million, partially offset by repayments on credit and loan agreements of $7$27 million.