CDNL 8-K/A
Cardinal Infrastructure Group Inc. (CDNL)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
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Trading |
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
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.
Explanatory Note
This Amendment No. 1 to the Initial Form 8-K (this "Amendment") is being filed solely to amend the Initial Form 8-K to include the financial statements of a business acquired required by Item 9.01(a) of Form 8-K and the pro forma financial information required by Item 9.01(b) of Form 8-K. Except for the foregoing, this Amendment does not modify or update any other disclosure contained in the Initial Form 8-K.
Item 9.01. Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired.
The audited consolidated financial statements as of and for the years ended December 31, 2025 and 2024 for A.L. Grading
Contractors, Inc. (the predecessor corporation to ALGC) are attached as Exhibit 99.1, to this Form 8-K/A and incorporated herein by reference. Such financial statements were prepared in accordance with U.S. generally accepted accounting principles as issued by the Financial Accounting Standards Board.
(b) Pro Forma Financial Information.
The unaudited pro forma condensed consolidated financial information as of December 31, 2025 and for the year ended December 31, 2025, related to the Company’s acquisition of ALGC are attached as Exhibit 99.2 to this Form 8-K/A and incorporated herein by reference.
(c) Exhibits.
Exhibit |
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Description |
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23.1 |
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99.1 |
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99.2 |
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104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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 hereunto duly authorized.
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CARDINAL INFRASTRUCTURE GROUP INC. |
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Date: |
May 6, 2026 |
By: |
/s/ Mike Rowe |
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Mike Rowe |
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTING FIRM
We hereby consent to the incorporation by reference in this Current Report on Form 8-K/A and the Registration Statement on Form S-8 (File No. 333-292034) of Cardinal Infrastructure Group Inc. of our report dated April 9, 2026, relating to the financial statements of A. L. Grading Contractors, Inc. and Affiliates as of and for the years ended December 31, 2025 and December 31, 2024, appearing in this Current Report on Form 8-K/A of Cardinal Infrastructure Group Inc.
/s/Warren Averett, LLC
Warren Averett, LLC
May 1, 2026
Exhibit 99.1
A. L. GRADING CONTRACTORS, INC. AND AFFILIATES
CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2025 AND 2024
The report accompanying this deliverable was issued by Warren Averett, LLC.
www.warrenaverett.com
A. L. GRADING CONTRACTORS, INC. AND AFFILIATES TABLE OF CONTENTS
DECEMBER 31, 2025 AND 2024
INDEPENDENT AUDITORS’ REPORT
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1 |
FINANCIAL STATEMENTS
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Consolidated Balance Sheets
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3 |
Consolidated Statements of Income and Retained Earnings
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4 |
Consolidated Statements of Cash Flows
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5 |
Notes to the Consolidated Financial Statements
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6 |
A. L. GRADING CONTRACTORS, INC. AND AFFILIATES
CONSOLIDATED BALANCE SHEETS
AS AT DECEMBER 31, 2025 AND 2024
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ASSETS |
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2025 |
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2024 |
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CURRENT ASSETS Cash |
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$ 6,551,063 |
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$ 3,277,643 |
Contract receivables |
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16,468,250 |
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22,626,641 |
Contract assets |
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14,079,147 |
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13,467,520 |
Other current assets |
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802,333 |
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143,863 |
Total current assets |
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37,900,793 |
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39,515,667 |
PROPERTY AND EQUIPMENT Heavy machinery |
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64,537,862 |
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61,096,068 |
Vehicles |
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6,290,243 |
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5,125,703 |
Building |
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1,219,035 |
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1,219,035 |
Land |
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572,217 |
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572,217 |
Computer equipment and software |
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54,531 |
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42,871 |
Furniture and fixtures |
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140,342 |
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70,585 |
Leasehold improvements |
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331,242 |
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331,242 |
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73,145,472 |
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68,457,721 |
Less accumulated depreciation |
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(37,863,976) |
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(32,524,271) |
Net property and equipment |
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35,281,496 |
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35,933,450 |
OTHER ASSETS |
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36,000 |
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336,000 |
TOTAL ASSETS |
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$ 73,218,289 |
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$ 75,785,117 |
LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES
Accounts payable |
$ 12,701,534 |
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$ 10,698,625 |
Accrued expenses |
772,177 |
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913,308 |
Contract liabilities |
2,054,252 |
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8,361,315 |
Notes payable, current portion |
6,936,685 |
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7,961,000 |
Total current liabilities |
22,464,648 |
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27,934,248 |
LONG-TERM LIABILITIES |
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Notes payable, less current portion |
4,142,635 |
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7,933,051 |
TOTAL LIABILITIES |
26,607,283 |
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35,867,299 |
STOCKHOLDERS’ EQUITY |
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Common stock – $1 par value; 100,000 shares |
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authorized; 424 shares issued and outstanding |
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as of December 31, 2025 and 2024 |
424 |
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424 |
Additional paid-in capital |
30,791 |
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330,791 |
Retained earnings |
46,579,791 |
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39,586,603 |
Total stockholders’ equity |
46,611,006 |
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39,917,818 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
$ 73,218,289 |
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$ 75,785,117 |
Exhibit 99.2
Unaudited pro forma CONDENSED CONSOLIDATED financial information
The following unaudited pro forma condensed consolidated financial statements of Cardinal Infrastructure Group Inc. (the “Company,” “Cardinal Group,” “we,” “us” or “our”) have been prepared in accordance with Article 11 (“Article 11”) of Regulation S-X of the Securities and Exchange Commission to give effect to (i) the acquisition by Cardinal Civil Contracting Holdings LLC, a controlled subsidiary of the Company (“Cardinal” or the “Purchaser”), of all of the equity interests of A.L. Grading Contractors, LLC (“ALGC”), which closed on February 18, 2026 (the “ALGC Acquisition”), (ii) the related financing transactions, including the first amendment to the Purchaser’s credit agreement with Truist Bank that increased the term loan facility from $120.0 million to $200.0 million in aggregate principal amount (the “First Amendment” and the additional borrowings thereunder, the “Acquisition Financing ”), and (iii) the reorganization transactions and the Company’s initial public offering (the
IPO”) of Class A Common Stock that closed on December 11, 2025 ( the “Reorganization and Offering Transactions”).
The unaudited pro forma condensed consolidated balance sheet as of December 31, 2025 has been prepared as if the ALGC Acquisition and the Acquisition Financing occurred on December 31, 2025. The unaudited pro forma condensed consolidated statement of comprehensive income for the year ended December 31, 2025 has been prepared as if the ALGC Acquisition, the Acquisition Financing, and the Reorganization and Offering Transactions had each occurred on January 1, 2025.
The Company’s historical condensed consolidated balance sheet as of December 31, 2025 already reflects the Reorganization and Offering Transactions, each of which was consummated prior to December 31, 2025. As a result, no separate columns are presented for the Reorganization and Offering Transactions in the unaudited pro forma condensed consolidated balance sheet.
The unaudited pro forma condensed consolidated financial information has been derived from, and should be read in conjunction with: (i) the audited consolidated financial statements and accompanying notes of the Company as of and for the year ended December 31, 2025, included in the Company’s Annual Report on Form 10-K, and (ii) the historical financial statements of A.L. Grading Contractors, Inc. (the predecessor corporation to ALGC) as of and for the year ended December 31, 2025, included as Exhibit 99.1 to the Current Report on Form 8-K/A to which this unaudited condensed consolidated pro forma financial information is an exhibit.
The Company has prepared the unaudited pro forma condensed consolidated financial information to reflect the accounting for the transactions described below in accordance with accounting policies generally accepted in the United States (“GAAP”). The unaudited pro forma condensed consolidated financial information reflects adjustments described in the accompanying notes that are based on available information and certain assumptions the Company believes are reasonable but are subject to change. The pro forma adjustments are preliminary and have been made solely for the purpose of providing the unaudited pro forma condensed consolidated financial information presented herein. Differences between these preliminary estimates and the final acquisition accounting may occur, and those differences could have a material impact on the unaudited pro forma condensed consolidated financial information and on the Company’s future results of operations and financial position.
The pro forma financial information is presented for informational purposes only and does not purport to represent the actual results of operations or financial position that would have occurred had the ALGC Acquisition, the Acquisition Financing and the Reorganization and Offering Transactions been consummated on the dates assumed, nor is it necessarily indicative of the Company’s future consolidated results of operations or financial position. The unaudited pro forma condensed consolidated financial information does not reflect any expected cost savings, operating synergies or revenue enhancements that may be realized following the ALGC Acquisition, or any costs to integrate the operations of ALGC or to achieve such cost savings, operating synergies or revenue enhancements.
As a public company, the Company expects to continue to incur additional annual expenses for, among other things, directors’ and officers’ liability insurance, director fees, costs for SEC reporting requirements, transfer agent fees, additional accounting, legal and administrative personnel, increased auditing and legal expenses, and other related costs. Due to the scope and complexity of these activities, the amount of such costs would be based on subjective estimates and assumptions that cannot be factually supported. Accordingly, the unaudited pro forma condensed consolidated financial information does not include any pro forma adjustments related to such costs.
Summary of the Transactions
ALGC Acquisition
On February 18, 2026, the Company, through the Purchaser, completed the ALGC Acquisition pursuant to a Membership Interests Purchase and Contribution Agreement, dated February 18, 2026 (the “Purchase Agreement”), with Diamond Interests Group, LLC (the “Seller”), ALGC, Anthony L. Wood, Jr. and Benjamin A. Wood (collectively, the “Seller Owners”). Pursuant to the Purchase Agreement, the Purchaser paid aggregate consideration consisting of (i) approximately $128.6 million in cash (subject to customary adjustments under the Purchase Agreement), (ii) 4,186,062 limited liability company units of the Purchaser (the “Common Units”) (together with an equal number of shares of the Company’s Class B Common Stock, $0.0001 par value per share, the “Class B Common Stock”), and (iii) 345,666 shares of the Company’s Class A Common Stock, par value $0.0001 per share (the “Class A Common Stock”) issued to employees of, and service providers to, ALGC at the direction of the Seller. The cash portion of the purchase price was funded
with a combination of cash on hand and incremental borrowings under the Purchaser’s amended credit facility.
ALGC is engaged in the business of providing infrastructure services to residential, industrial and commercial projects in the greater Atlanta, Georgia area. The ALGC Acquisition will be accounted for as a business combination under the acquisition method of accounting in accordance with FASB Accounting Standards Codification (“ASC”) Topic 805, Business Combinations (“ASC 805”), with the Company as the accounting acquirer.
The historical financial information of A.L. Grading Contractors, Inc. reflected in the unaudited pro forma condensed consolidated financial information are those of the predecessor corporation, which was converted into a limited liability company organized in the State of Georgia on February 17, 2026 (immediately prior to the consummation of the ALGC Acquisition on February 18, 2026).
Acquisition Financing
On February 18, 2026, Cardinal Civil Contracting, LLC (“Cardinal NC”), the Purchaser, the other guarantors party thereto, the lenders party thereto and Truist Bank, as administrative agent, issuing bank and swingline lender, entered into the First Amendment to the Credit Agreement, dated October 1, 2025 (the “Credit Agreement” and, as amended, the “Amended Credit Agreement”). The First Amendment, among other things, increased the term loan facility under the Credit Agreement from $120.0 million in aggregate principal amount to $200.0 million in aggregate principal amount. A portion of the proceeds of the incremental term loans made pursuant to the First Amendment was used to pay the cash portion of the ALGC Acquisition purchase price. The Company is not a party to the Amended Credit Agreement.
Reorganization and Offering Transactions
Prior to the IPO, all of the Company’s business was conducted through Cardinal NC. In connection with the IPO, the Company completed a series of organizational transactions (the “Reorganization Transactions”) to reorganize its corporate structure. The IPO and the Reorganization Transactions are collectively referred to herein as the “Reorganization and Offering Transactions.” The Reorganization and Offering Transactions consisted of two discrete transactions, the “September 2025 Reorganization” and the “IPO Reorganization,” each described below.
Cardinal Infrastructure Group Inc. (the “Cardinal Group”) was formed on June 12, 2025 and, prior to the IPO, did not conduct any business. The Reorganization Transactions were completed in two steps. Effective September 30, 2025, the September 2025 Reorganization combined Cardinal NC’s non-wholly owned subsidiaries into Cardinal NC and recapitalized all existing interests into a single class of LLC Units of Cardinal. On December 10, 2025, the IPO Reorganization amended and restated the Cardinal operating agreement and Cardinal Group’s certificate of incorporation (including a ~86-to-one forward stock split and authorization of Class A, Class B and preferred stock) and appointed Cardinal Group as Cardinal’s sole managing member.
On December 11-12, 2025, Cardinal Group completed the IPO of 11,500,000 shares of Class A Common Stock at $21.00 per share, plus 1,725,000 shares pursuant to the underwriters’ option, for gross proceeds of approximately $277.7 million. Cardinal Group used the net proceeds to purchase 14,943,750 newly issued LLC Units from Cardinal for approximately $258.3 million and issued 23,387,813 shares of Class B Common Stock to the existing Cardinal equity holders (the “Continuing Equity Holders”) on a one-for-one basis with their retained LLC Units, for nominal consideration. As of December 31, 2025, Cardinal Group owned 14,947,318 LLC Units (39.0% of Cardinal) and the Continuing Equity Holders owned the remaining 23,387,813 LLC Units (61.0%).
The resulting umbrella partnership-C corporation (“Up-C”) structure allows the Continuing Equity Holders to retain flow-through tax treatment on their LLC Units, which are redeemable for Class A Common Stock (or, at the Company’s option, cash) on a one-for-one basis with automatic cancellation of the corresponding Class B shares. Under the Tax Receivable Agreement, the Continuing Equity Holders are entitled to 85.0% of certain cash tax benefits realized by Cardinal Group, with Cardinal Group retaining the remaining 15.0%.
Both steps of the Reorganization and Offering Transactions are accounted for as transactions among entities under common control. The September 2025 Reorganization is treated as an acquisition of noncontrolling interests under ASC 810-10-45-23, with carrying amounts reclassified to members’ equity and no gain or loss recognized. The IPO Reorganization is treated as a recapitalization of the predecessor operating entity, and the historical financial statements of Cardinal are carried forward as those of Cardinal Group, adjusted for the recapitalized equity structure.
As the sole managing member of Cardinal, the Company operates and controls all of the business and affairs of Cardinal and, through Cardinal, conducts the Company’s business. As a result, the below pro formas adjustments below reflect the Company consolidating Cardinal and recording a significant noncontrolling interest in a consolidated entity in the Company’s consolidated financial statements for the economic interest in Cardinal held by the Continuing Equity Holders.
Expected Accounting Treatment of the Acquisition
The unaudited pro forma condensed consolidated financial information has been prepared assuming the acquisition method of
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accounting in accordance with GAAP. Under this method, ALGC’s assets and liabilities will be recorded at their respective preliminary fair values. Any difference between the purchase price for ALGC and the fair value of the identifiable net assets acquired (including intangible assets) will be recorded as goodwill. The goodwill resulting from the Acquisition will not be amortized to expense, but instead will be reviewed for impairment at least annually. One-time direct and incremental transaction costs will be expensed as incurred under ASC 805 and are assumed to be cash settled. The Company has preliminarily estimated the fair value of ALGC’s assets acquired and liabilities assumed and is in the process of conforming the accounting policies of ALGC to its accounting policies. The unaudited pro forma condensed consolidated financial information are based on preliminary accounting conclusions and are subject to potential revisions upon further analysis. The pro forma adjustments represent management’s estimates based on information available as of the date of this Form 8-K/A and are subject to change as additional information becomes available and additional analyses are performed.
The Pro Forma Financial Information does not reflect the realization of any expected cost savings or other synergies from the ALGC Acquisition or any restructuring activities and other planned cost savings initiatives following the completion of the business combination. The transaction will also result in an increase in non-controlling interest due to the issuance of additional LLC units as consideration.
3
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
As of December 31, 2025
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Cardinal Group |
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ALGC historical |
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ALGC Transaction Accounting Adjustments |
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Notes |
Pro Forma |
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Assets |
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Current assets: |
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Cash |
$ |
97,149,425 |
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$ |
6,551,063 |
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$ |
80,000,000 |
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4 |
$ |
50,011,565 |
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(676,499 |
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4 |
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(128,120,439 |
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2(a) |
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(3,963,481 |
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2(b) |
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(928,504 |
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5(b) |
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Accounts receivable, net |
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61,282,268 |
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16,468,250 |
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77,750,518 |
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Contract assets |
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54,894,260 |
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14,079,147 |
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68,973,407 |
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Prepaid expenses |
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1,892,615 |
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1,892,615 |
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Other assets |
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432,584 |
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802,333 |
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1,234,917 |
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Total current assets |
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215,651,152 |
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37,900,793 |
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(53,688,923 |
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199,863,022 |
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Property and equipment, net |
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84,901,602 |
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35,281,496 |
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1,101,243 |
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2(b) |
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121,284,341 |
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Operating lease right-of-use assets |
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8,929,742 |
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4,798,645 |
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2(b) |
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13,728,387 |
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Goodwill |
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23,510,649 |
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104,097,314 |
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2(b) |
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127,607,963 |
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Other intangible assets |
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15,513,692 |
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97,100,000 |
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2(d) |
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112,613,692 |
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Deferred tax asset |
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46,080,518 |
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46,080,518 |
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Other assets |
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36,000 |
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36,000 |
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Total assets |
$ |
394,587,355 |
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$ |
73,218,289 |
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$ |
153,408,279 |
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$ |
621,213,923 |
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LIABILITIES AND MEMBERS' EQUITY |
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Current liabilities: |
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Current portion of notes payable |
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6,128,674 |
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6,936,685 |
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(6,936,685 |
) |
4(a) |
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10,128,674 |
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4,000,000 |
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4(a) |
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Current portion of finance lease liabilities |
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3,349,359 |
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3,349,359 |
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Current portion of operating lease liabilities |
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3,814,686 |
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85,148 |
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2(b) |
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3,899,834 |
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Accounts payable |
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60,600,099 |
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12,701,534 |
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73,301,633 |
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Accrued expenses |
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2,956,314 |
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772,177 |
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(30,277 |
) |
2(b) |
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4,002,949 |
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304,735 |
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5(a) |
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Deferred consideration payable |
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3,966,618 |
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- |
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2(a) |
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3,966,618 |
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Contract liabilities |
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10,831,564 |
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2,054,252 |
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12,885,816 |
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Total current liabilities |
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91,647,314 |
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22,464,648 |
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(2,577,079 |
) |
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111,534,883 |
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Notes payable, less current portion, net of unamortized debt issuance costs |
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113,152,864 |
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4,142,635 |
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(4,142,635 |
) |
4(a) |
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188,314,363 |
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(838,501 |
) |
4(a) |
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76,000,000 |
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4(a) |
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Finance lease liabilities, less current portion |
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4,974,309 |
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4,974,309 |
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Operating lease liabilities, less current portion |
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5,851,516 |
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6,095,498 |
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2(b) |
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11,947,014 |
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Tax receivable agreement liability |
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39,423,529 |
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39,423,529 |
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Contingent consideration |
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15,254,000 |
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2(a), 6 |
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15,254,000 |
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Total liabilities |
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255,049,532 |
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26,607,283 |
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|
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89,791,282 |
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|
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371,448,097 |
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Stockholders' equity |
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Preferred stock $0.0001 par value per share, 10,000,000 shares authorized, no shares issued and outstanding, actual; 10,000,000 authorized, no shares issued and outstanding, pro forma |
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- |
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- |
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4
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
As of December 31, 2025
|
Cardinal Group |
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ALGC historical |
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ALGC Transaction Accounting Adjustments |
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Notes |
Pro Forma |
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Class A Common stock, par value $0.0001 per share; 500,000,000 shares authorized, 14,947,318 shares issued and outstanding, actual; 500,000,000 shares authorized, 15,292,984 shares issued and outstanding, pro forma |
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1,495 |
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35 |
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2(a) |
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1,530 |
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Class B Common stock, par value $0.0001 per share; 500,000,000 shares authorized, 23,387,813 shares issued and outstanding, actual; 500,000,000 shares authorized, 27,573,875 shares issued and outstanding, pro forma |
|
2,339 |
|
|
|
|
|
|
419 |
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2(a) |
|
2,758 |
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Common stock of ALGC $1 par value; 100,000 shares authorized 424 shares issued and outstanding. 0 shares issued and outstanding, pro forma |
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424 |
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(424 |
) |
2(c) |
|
|
||
Additional paid-in-capital |
|
57,593,814 |
|
|
|
30,791 |
|
|
|
(30,791 |
) |
2(c) |
|
66,083,336 |
|
|
|
|
|
|
|
|
|
8,489,522 |
|
2(a) |
|
|
|||
Retained earnings |
|
863,593 |
|
|
|
46,579,791 |
|
|
|
(46,579,791 |
) |
2(c) |
|
(207,644 |
) |
|
|
|
|
|
|
|
|
(1,071,237 |
) |
5(b) |
|
|
|||
Noncontrolling interests attributable to Cardinal Infrastructure Group Inc. |
|
81,076,582 |
|
|
|
|
|
|
102,809,264 |
|
2(a) |
|
183,885,846 |
|
|
Total members'/ stockholders equity |
|
139,537,823 |
|
|
|
46,611,006 |
|
|
|
63,616,997 |
|
|
|
249,765,826 |
|
Total liabilities and equity |
$ |
394,587,355 |
|
|
$ |
73,218,289 |
|
|
$ |
153,408,279 |
|
|
$ |
621,213,923 |
|
See accompanying notes to unaudited pro forma condensed consolidated financial information.
5
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF COMPREHENSIVE INCOME
For the Year Ended December 31, 2025
|
Cardinal Group |
|
Reorg. & Offering Adjustments |
|
Notes |
ALGC historical |
|
ALGC Reclassification Adjustments |
|
Notes |
ALGC Transaction Accounting Adjustments |
|
Notes |
Financing Adjustments |
|
Notes |
Pro Forma |
|
|||||||
Revenues |
$ |
456,045,369 |
|
|
|
|
$ |
164,452,065 |
|
|
|
|
|
|
|
|
|
|
$ |
620,497,434 |
|
||||
Cost of revenues, excluding depreciation and amortization |
|
359,897,579 |
|
|
|
|
|
121,096,669 |
|
|
(7,055,425 |
) |
3(a) |
|
|
|
|
|
|
|
473,938,823 |
|
|||
General and administrative |
|
23,526,023 |
|
|
96,670 |
|
6(a) |
|
8,837,828 |
|
|
(24,000 |
) |
3(a) |
|
1,071,238 |
|
5(e) |
|
|
|
|
34,219,144 |
|
|
|
|
|
|
|
|
|
|
|
61,248 |
|
3(b) |
|
650,137 |
|
5(c) |
|
|
|
|
|
|||||
Depreciation expense |
|
25,246,451 |
|
|
(19,263 |
) |
6(a) |
|
|
|
7,079,425 |
|
3(a) |
|
2,379,643 |
|
2(e) |
|
|
|
|
34,686,256 |
|
||
Amortization expense |
|
7,128,310 |
|
|
|
|
|
|
|
|
|
|
19,729,278 |
|
2(d) |
|
|
|
|
26,857,588 |
|
||||
(Gain) loss on disposal of property and equipment |
|
(157,401 |
) |
|
|
|
|
|
|
(61,248 |
) |
3(b) |
|
|
|
|
|
|
|
(218,649 |
) |
||||
Income from operations |
|
40,404,407 |
|
|
(77,407 |
) |
|
|
34,517,568 |
|
|
- |
|
|
|
(23,830,297 |
) |
|
|
- |
|
|
|
51,014,271 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Interest income |
|
|
|
|
|
|
216,341 |
|
|
(216,341 |
) |
3(c) |
|
|
|
|
|
|
|
|
|||||
Interest expense, net |
|
(6,825,542 |
) |
|
126,564 |
|
6(a) |
|
(245,080 |
) |
|
216,341 |
|
3(c) |
|
28,739 |
|
4(b) |
|
(4,984,983 |
) |
6(a) |
|
(12,649,960 |
) |
|
|
|
|
(965,998 |
) |
4(b) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Other expense, net |
|
(518,704 |
) |
|
(159,079 |
) |
6(a) |
|
421,861 |
|
|
|
|
|
- |
|
|
|
- |
|
|
|
(255,922 |
) |
|
Total other expense, net |
|
(7,344,246 |
) |
|
(998,513 |
) |
|
|
393,122 |
|
|
- |
|
|
|
28,739 |
|
|
|
(4,984,983 |
) |
|
|
(12,905,882 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Net income before taxes |
|
33,060,161 |
|
|
(1,075,920 |
) |
|
|
34,910,690 |
|
|
- |
|
|
|
(23,801,558 |
) |
|
|
(4,984,983 |
) |
|
|
38,108,390 |
|
Income tax expense |
|
(1,966,678 |
) |
|
(799,397 |
) |
6(b) |
|
(1,384,000 |
) |
|
|
|
|
644,850 |
|
5(c) |
|
405,480 |
|
5(c) |
|
(3,099,745 |
) |
|
Net income, including noncontrolling interests |
$ |
31,093,483 |
|
$ |
(1,875,317 |
) |
|
$ |
33,526,690 |
|
$ |
- |
|
|
$ |
(23,156,708 |
) |
|
$ |
(4,579,503 |
) |
|
$ |
35,008,645 |
|
Less: Net income attributable to noncontrolling interests |
$ |
8,407,426 |
|
|
9,418,234 |
|
6(c) |
$ |
- |
|
|
|
|
|
7,639,202 |
|
5(f) |
|
(2,945,741 |
) |
5(f) |
|
22,519,121 |
|
|
Net income attributable to Company |
$ |
22,686,057 |
|
$ |
(11,293,551 |
) |
|
$ |
33,526,690 |
|
$ |
- |
|
|
$ |
(30,795,910 |
) |
|
$ |
(1,633,763 |
) |
|
$ |
12,489,524 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
For the period from December 10, 2025 to December 31, 2025 (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro Forma |
|
|||||||
Pro forma per share data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Pro forma net income per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Basic |
$ |
0.06 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8 |
$ |
0.82 |
|
|||||
Diluted |
$ |
0.06 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8 |
$ |
0.82 |
|
|||||
Pro forma weighted average shares used to compute pro forma net income per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Basic |
|
14,787,094 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8 |
|
15,289,426 |
|
|||||
Diluted |
|
14,809,208 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8 |
|
15,311,540 |
|
|||||
(1) The Cardinal Group historical computation of basic and diluted earnings per share of Class A Common Stock represents the period from December 10, 2025 to December 31, 2025, the period subsequent to the IPO. Prior to the IPO, the company was a limited liability company and did not present earnings per share.
See accompanying notes to unaudited pro forma condensed consolidated financial information.
6
NOTES TO THE UNAUDITED PROFORMA CONDENSED FINANCIAL STATEMENTS
Note 1: Basis of Presentation Description of the Business Combination
On February 18, 2026, the Company, through its controlled subsidiary Cardinal Civil Contracting Holdings LLC, acquired of all of the equity interests in ALGC pursuant to the Purchase Agreement dated February 18, 2026 for a total estimated consideration of $254.7 million consisting of (i) $117.7 million in cash, (ii) 4,186,062 limited liability company units (the “Common Units”) of the Purchaser (including an equal number of shares of the Company’s Class B common stock, $0.0001 par value per share (the “Class B Common Stock”)), valued at $102.8 million based on the closing price of the Company’s Class A common stock, par value $0.0001 per share (the “Class A Common Stock”) (iii) 345,666 shares of Class A common stock valued at $8.5 million, $0.0001 par value per share (the “Class A Common Stock”) which were issued to employees of, and service providers to, ALGC at the direction of the Seller. (iv) the assumption of approximately $10.4 million of liabilities paid on closing, and (v) an estimated net working capital payment. ALGC is a provider of comprehensive site development solutions, including grading, underground utilities, erosion control, and clearing, supporting large-scale commercial, industrial, and residential construction in Georgia and South Carolina.
The unaudited pro forma condensed consolidated financial information has been prepared in accordance with Article 11 to give effect to the ALGC Acquisition, the Acquisition Financing, and the Reorganization and Offering Transactions. The unaudited pro forma condensed consolidated balance sheet as of December 31, 2025 has been prepared as if the ALGC Acquisition and the Acquisition Financing had occurred on December 31, 2025. The unaudited pro forma condensed consolidated statement of comprehensive income for the year ended December 31, 2025 has been prepared as if the ALGC Acquisition, the Acquisition Financing, and the Reorganization and Offering Transactions had each occurred on January 1, 2025.
The Company’s historical condensed consolidated balance sheet as of December 31, 2025 already reflects the consummation of the Reorganization Transactions, and the Offering. Accordingly, no separate columns are presented for those transactions on the pro forma balance sheet.
The unaudited pro forma condensed consolidated financial information was prepared using the following historical financial information:
The ALGC business combination has been accounted for under the acquisition method of accounting in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 805, Business Combinations. As the acquirer for accounting purposes, the Company has preliminarily estimated the fair value of ALGC ’s assets acquired and liabilities assumed and conformed the accounting policies of ALGC to its accounting policies.
The unaudited pro forma condensed consolidated financial statements do not reflect the realization of any expected cost savings or other synergies from the ALGC acquisition as the result of restructuring activities and other planned cost savings initiatives following the completion of the business combination. These adjustments are excluded because they reflect actions the Company intends to undertake after the business combination.
Note 2: Preliminary Purchase Price and Allocation for the ALGC Acquisition
Cash |
$ |
117,761,839 |
|
Liabilities assumed and paid at closing |
|
10,358,600 |
|
Issuance of LLC Class B Units and Class B Common stock |
|
102,809,683 |
|
Fair value of vested Class A equity awards issued to employees of, and service providers to, ALGC pertaining to pre-merger service at the direction of the Seller |
|
8,489,557 |
|
Contingent Consideration |
|
15,254,000 |
|
Total consideration |
$ |
254,673,679 |
|
Class A common stock was valued based on the closing price of the Company’s Class A Common Stock on February 18, 2026.
7
NOTES TO THE UNAUDITED PROFORMA CONDENSED FINANCIAL STATEMENTS
For purposes of the unaudited pro forma condensed consolidated balance sheet, the Common Units issued in the ALGC Acquisition (along with the corresponding shares of Class B Common Stock) were valued on a combined basis, based on the closing price of the Company’s Class A Common Stock on February 18, 2026.
Cash |
$ |
2,587,582 |
|
Accounts receivable |
|
16,468,250 |
|
Contract assets |
|
14,079,147 |
|
Other assets |
|
802,333 |
|
Property, plant and equipment |
|
36,382,739 |
|
Operating lease right of use assets |
|
4,798,645 |
|
Intangible assets |
|
97,100,000 |
|
Goodwill |
|
104,097,314 |
|
Other long term assets |
|
36,000 |
|
Accounts payable |
|
(12,701,534 |
) |
Accrued expenses |
|
(741,900 |
) |
Contract liabilities |
|
(2,054,252 |
) |
Current portion of operating lease liabilities |
|
(85,148 |
) |
Operating lease liabilities, less current portion |
|
(6,095,498 |
) |
Total net assets acquired |
$ |
254,673,679 |
|
Assets that were not acquired and liabilities that were not assumed under the Purchase Agreement (including ALGC’s historical cash, certain notes payable (see Note 4), and certain investments and accrued items) have been excluded from the preliminary allocation and adjusted out from the ALGC historical condensed consolidated balance sheet as of December 31, 2025.
|
|
|
|
|
Annual Amortization ($) |
|
|||
Intangible assets: |
Fair Value ($) |
|
Weighted average useful life (years) |
|
For the Year Ended December 31, 2025 |
|
|||
Customer relationships |
|
67,900,000 |
|
|
11.6 |
|
|
6,032,611 |
|
Backlog |
|
18,700,000 |
|
|
1.5 |
|
|
12,466,667 |
|
Trade name |
|
9,300,000 |
|
|
10.0 |
|
|
930,000 |
|
Noncompete agreements |
|
1,200,000 |
|
|
4.0 |
|
|
300,000 |
|
Total |
|
97,100,000 |
|
|
|
|
19,729,278 |
|
|
As part of the acquisition transaction, the Company entered into two separate 15‑year lease agreements with an entity under common control with the seller to lease the existing operating and office facilities of ALGC. The contractual lease payments under these agreements exceeded market rates at the acquisition date. As a result, the Company recorded an unfavorable lease fair value adjustment
8
NOTES TO THE UNAUDITED PROFORMA CONDENSED FINANCIAL STATEMENTS
of $1,380,000, which was recognized as a reduction to the operating lease right‑of‑use asset as of the acquisition date and is reflected within Note 2(b) above.
The amounts presented above reflect preliminary estimates of purchase accounting under ASC 805 and related fair value measurements. These amounts are unaudited and subject to change pending completion of ongoing valuation procedures, finalization of deferred income taxes, and the final determination of the working capital and other customary post-closing adjustments under the Purchase Agreement.
Note 3: Reclassification Adjustments for the ALGC Acquisition
The pro forma reclassification adjustments included in the unaudited pro forma condensed consolidated statement of income for the year ended December 31, 2025 are as follows:
|
a) |
The Company separately presents Depreciation and Amortization, while ALGC recognizes these costs within Cost of Revenues and General and administrative. Therefore, this adjustment conforms the presentation of Depreciation and Amortization expenses to the Company’s presentation. |
|
b) |
The Company recognizes Loss (gain) on disposal of property and equipment as a component of Income from operations, while ALGC recognizes this income in within General and administrative expenses. Therefore, this adjustment conforms the presentation of the gain on disposal of property and equipment to the Company’s presentation. |
|
c) |
The Company recognizes Interest Expense, net, while ALGC recognizes Interest income and expense discretely. Therefore, this adjustment conforms the presentation of Interest income the Company’s presentation. Refer to Note 4(b) for related Financing adjustments. |
Note 4: Financing Adjustments
The unaudited pro forma condensed consolidated balance sheet as of December 31, 2025 reflects the financing-related transaction accounting adjustments associated with the ALGC Acquisition. Pursuant to the First Amendment, the term loan facility under the Credit Agreement was increased from $120.0 million to $200.0 million in aggregate principal amount, and a portion of the proceeds of the incremental term loans was used to fund the cash portion of the ALGC Acquisition purchase price.
Pro forma transaction accounting adjustments: |
|
|
|
Decrease for removal of ALGC's existing debt (current portion) |
$ |
(6,936,685 |
) |
Decrease for removal of ALGC's existing debt (less current portion) |
|
(4,142,635 |
) |
Increase for the First Amendment to the October 2025 Credit Facility Debt utilized to finance the ALGC Acquisition |
|
80,000,000 |
|
Increase in debt issuance costs related to the First Amendment to the October 2025 Credit Facility |
|
(838,501 |
) |
Net pro forma transaction accounting adjustments to Debt in connection with ALGC and Acquisition Financing Transaction |
|
68,082,179 |
|
|
|
|
|
Adjustments comprise of: |
|
|
|
Current portion of notes payable |
$ |
(2,936,685 |
) |
Notes payable, less current portion, net of unamortized debt issuance costs |
$ |
71,018,864 |
|
On February 18, 2026, Cardinal Civil Contracting, LLC, and the other guarantors party thereto, the lenders party thereto and Truist Bank (“Truist Bank”), as administrative agent, issuing bank and swingline lender, entered into the First Amendment, which amends the October 2025 Credit Facility, by and among Cardinal Civil Contracting, LLC, Purchaser, the other guarantors from time to time party thereto, the lenders from time to time party thereto and Truist Bank. Cardinal Infrastructure Group Inc. is not a party to the First Amendment or the October 2025 Credit Agreement.
The First Amendment, among other things, increased the term loan facility under the October 2025 Credit Agreement from $120.0 million in aggregate principal amount to $200.0 million in aggregate principal amount. A portion of the proceeds of the incremental term loans made pursuant to the First Amendment was used to pay the cash portion of the Acquisition purchase price. Except as modified by the First Amendment, the terms and conditions in the October 2025 Credit Agreement remain the same. Debt issuance costs related to the financing transaction were estimated to be $838,501, of which $676,499 was paid out of net proceeds of financing.
The pro forma adjustments included in the unaudited pro forma condensed consolidated statement of income for the year ended December 31, 2025 are as follows:
9
NOTES TO THE UNAUDITED PROFORMA CONDENSED FINANCIAL STATEMENTS
|
For the Year Ended December 31, 2025 |
|
|
Pro forma reorganization and offering adjustments: |
|
|
|
Elimination of historic net interest expense and amortization of debt issuance costs |
$ |
(6,680,543 |
) |
Amortization of debt issuance costs Cardinal |
|
398,793 |
|
Interest expense on $120 m of October 2025 Credit Facility at 6.04% (Based on Term SOFR of 3.66% on April 1, 2025 Plus an applicable margin of 2.38%) |
|
7,247,748 |
|
Net pro forma transaction accounting adjustments to Debt in connection with the Reorganization and Offering Transaction |
$ |
965,998 |
|
Pro forma ALGC transaction accounting adjustments: |
|
|
|
Elimination of net interest expense and amortization of debt issuance costs - outstanding ALGC's debt |
$ |
(28,739 |
) |
Interest expense on first amendment to the October 2025 Credit facility at 6.04% (Based on Term SOFR of 3.66% on April 1, 2025 Plus an applicable margin of 2.38%) |
|
4,831,832 |
|
Amortization of debt issuance costs for the first amendment to the October Credit facility |
|
181,890 |
|
Net pro forma transaction accounting adjustments to Debt in connection with the ALGC Acquisition |
$ |
4,984,983 |
|
A 1/8th of one percentage point increase or decrease in the assumed benchmark rate would result in a change in interest expense of approximately $0.1 million for the year ended December 31, 2025 in respect of borrowings under the Amended Credit Agreement attributable to the ALGC Acquisition Financing and $0.15 million for the year ended December 31, 2025 in respect of borrowings under the October 2025 Credit Facility.
Note 5: Other Adjustments for the ALGC Acquisition
The pro forma adjustments included in the unaudited pro forma condensed consolidated balance sheet as of December 31, 2025 are as follows:
The pro forma adjustments included in the unaudited pro forma condensed consolidated statement of income for the year ended December 31, 2025 are as follows:
10
NOTES TO THE UNAUDITED PROFORMA CONDENSED FINANCIAL STATEMENTS
Note 6: Reorganization and Offering Adjustments
The Company’s historical condensed consolidated balance sheet as of December 31, 2025 already reflects the consummation of the Reorganization and Offering Transactions. Accordingly, no separate balance sheet adjustments are required to give pro forma effect to the Reorganization and Offering Transactions as of December 31, 2025. The pro forma adjustments shown in the “Reorg. & Offering Adjustments” column of the unaudited pro forma condensed consolidated statement of comprehensive income for the year ended December 31, 2025 are described below:
Note 7: Contingent Consideration (Tax Receivable Agreement and Tax Benefit Agreement)
Tax Receivable Agreement
In connection with the IPO, Cardinal Group entered into a Tax Receivable Agreement (the "TRA") dated December 9, 2025, among Cardinal Group, Cardinal and the Continuing Equity Holders named therein. As part of the ALGC acquisition on February 18, 2026, Diamond Interests Group LLC and the Seller Owners became parties to the pre-existing TRA as Continuing Equity Holders upon the issuance to them of 4,186,062 Common Units (rollover equity). Under the TRA, Cardinal group obligated to pay the Continuing Equity Holders 85% of the net cash tax savings that Cardinal Group actually realizes from the tax basis step-up in Cardinal's assets attributable to future exchanges of Cardinal units for Cardinal Group Class A common stock or cash, determined on a "with and without" methodology. Payments under the TRA are contingent upon (i) future exchanges of Cardinal units actually occurring and (ii) Cardinal Group generating sufficient taxable income to utilize the resulting tax attributes. The TRA includes provisions for early termination at Cardinal Group's election (subject to independent director approval), change-of-control acceleration, and net operating loss carryforward mechanics capped at 80% of annual pretax income. Interest accrues on unpaid TRA payments at SOFR plus 100 basis points.
Tax Benefit Agreement
Concurrently with the ALGC Acquisition on February 18, 2026, Cardinal Group entered into a Tax Benefit Agreement (the
11
NOTES TO THE UNAUDITED PROFORMA CONDENSED FINANCIAL STATEMENTS
"TBA") dated February 18, 2026, among Cardinal Group, Cardinal, and Diamond Interests Group LLC. Under the TBA, Cardinal Group is obligated to pay 85% of the annual Cumulative Net Realized Tax Benefit (as defined in the TBA) arising from the basis step-up in ALGC's assets attributable to the portion of the acquisition treated as a taxable asset sale under IRC Section 1001. The Realized Tax Benefit is computed under a "with and without" method that assumes Cardinal Group is allocated 80% of Cardinal's amortization and depreciation deductions in respect of the Basis Adjustments. Unlike the TRA, TBA payments do not require future unit exchanges; rather, they depend on Cardinal Group generating sufficient taxable income to utilize the amortization deductions, which arise over the applicable depreciable and amortizable lives of the stepped-up assets (including immediate expensing of fixed asset step-up under bonus depreciation and 15-year amortization of intangible assets under federal tax rules). Interest on unpaid TBA payments accrues at SOFR plus 100 basis points.
Fair Value Measurement and Recognition
Both the TRA and TBA represent contingent consideration in connection with the Acquisition, as the Purchase Consideration in the purchase agreement is explicitly stated to be increased by payments made to Seller Owners under or in respect of both agreements. Accordingly, the Company recognized the TRA and TBA obligations as contingent consideration at acquisition-date fair value.
The aggregate acquisition-date fair value of the TRA and TBA was $15.3 million ($8.2 million attributable to the TRA and $7.1 million attributable to the TBA), determined using a Monte Carlo simulation model with 100,000 trials. The key inputs to the model included: (i) management's projected pretax book income for fiscal years 2026 through 2030, extended through 2053 at a normalized long-term growth rate of 3.0%; (ii) book-to-tax adjustments to convert pretax book income to a tax basis, including immediate bonus depreciation of the fixed asset step-up and 15-year amortization of intangible assets; (iii) annual net operating loss carryforward mechanics capped at 80% of pretax income in any year; (iv) an 85% payment percentage applied to cumulative net realized tax benefits; and (v) an equity volatility assumption of 58.0%, derived from the observed 20-year average equity volatility of a group of guideline public companies and re-levered to reflect the Company’s capital structure, reflecting the equity-linked nature of the underlying cash flows. A metric risk premium was applied to adjust management's pretax income projections to a risk-neutral perspective, based on the Company’s cost of equity capital of 24.0% relative to the guideline public company median. This measurement is classified within Level 3 of the ASC 820 fair value hierarchy due to the use of significant unobservable inputs, including projected taxable income, future tax rates, and the timing of future Cardinal unit exchanges.
A 200 basis point increase in the discount rate variable would decrease the combined value of the TRA and TBA by $790,000, while a 200 basis point decrease would increase the value by $780,000. A 500 basis point increase in the volatility variable would decrease the combined value of the TRA and TBA by $960,000, while a 500 basis point decrease would increase the value by $900,000.
The potential undiscounted payments under the TRA and TBA have no contractual maximum. The minimum potential payment under each agreement is $0, which would occur in scenarios where Cardinal Group does not generate taxable income sufficient to utilize the relevant tax attributes or where no future exchanges of Cardinal units occur under the TRA. The expected payment period runs through approximately 2041, reflecting the 15-year IRC Section 197 amortization period for intangible assets under the TBA and the assumed timing of future Cardinal unit exchanges under the TRA. Subsequent changes in the fair value of these contingent consideration liabilities are recognized in earnings in the period of change.
Note 8: Earnings Per Share
The pro forma net income per share calculations have been performed for the year ended December 31, 2025, assuming the Acquisition occurred on January 1, 2025. The below table includes class A stock-based awards that were issued in connection with the
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NOTES TO THE UNAUDITED PROFORMA CONDENSED FINANCIAL STATEMENTS
ALGC Acquisition, which were not subject to service conditions.
|
|
Fiscal year ended December 31, 2025 |
|
||
Basic and diluted supplemental pro forma net income per share: |
|
|
|
|
|
Numerator |
|
|
|
|
|
Net income |
|
$ |
|
35,008,645 |
|
Less: Net income attributable to non-controlling interests(1) |
|
|
|
(22,519,121 |
) |
Net income attributable to Class A common stockholders—basic |
|
$ |
|
12,489,524 |
|
Net income effect of dilutive securities: |
|
|
|
|
|
Unvested restricted stock units (RSUs) |
|
|
|
19,447 |
|
Net income attributable to Class A common stockholders—diluted |
|
|
|
12,508,970 |
|
|
|
|
|
|
|
Denominator |
|
|
|
|
|
Historical Weighted-average Class A Common Stock outstanding |
|
|
|
14,943,760 |
|
Class A Common Stock of Cardinal Infrastructure Group Inc. as consideration transferred for the acquisition of ALGC |
|
|
|
345,666 |
|
Deferred consideration related to the Acquisition(1) |
|
|
|
|
|
Total Weighted-average Class A Common Stock outstanding (basic) |
|
|
|
15,289,426 |
|
|
|
|
|
|
|
Incremental common shares attributable to dilutive instruments: |
|
|
|
|
|
Stock options |
|
|
|
|
|
RSUs |
|
|
|
22,114 |
|
Assumed conversion of noncontrolling interests to shares of Class A Common Stock |
|
|
|
|
|
Total Weighted-average Class A Common Stock outstanding (diluted) |
|
|
|
15,311,540 |
|
|
|
|
|
|
|
Basic and diluted pro forma net income per share |
|
|
|
|
|
Earnings per share: |
|
|
|
|
|
Basic |
|
$ |
|
0.82 |
|
Diluted |
|
$ |
|
0.82 |
|
The following securities were not included in the computation of diluted earnings per share for the year ended December 31, 2025, as they would be neither dilutive nor anti-dilutive:
The dilutive impact of 23,387,813 LLC interests issued as a result of the reorganization and IPO and 4,186,062 LLC interests were issued in relation to the acquisition of ALGC that are each exchangeable for Class A common stock.
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