What changed in this filing

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Item 1A. Risk Factors

2025-03-13 compared with 2024-03-27 · 71 added, 98 removed, 569 unchanged (23% of the section changed)

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The timing, terms, price and form of consideration that we pay in future transactions may vary meaningfully from prior transactions.

As a newly independent public company, there can be no assurance that we will be able to generate sufficient returns to pay our operating expenses and make or sustain distributions to our stockholders, or any distributions at all, or meet our contractual commitments.

As an independent public company, there can be no assurance that we will be able to generate sufficient returns to pay our operating expenses and make or sustain distributions to our stockholders, or any distributions at all, or meet our contractual commitments.

Our results of operations, ability to make or sustain distributions to our stockholders or meet our contractual commitments depend on several factors, including the availability of opportunities to acquire attractive assets, the level and volatility of interest rates, the availability of adequate short- and long-term financing, the financial markets and economic conditions.

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Uncertainty and negative trends in general economic conditions in the United States and abroad, including significant tightening of credit markets and commodity price volatility, historically have created difficult operating environments for owners and operators in the infrastructure industry.

Many factors, including factors that are beyond our control, may impact our operating results or financial condition.

Many factors, including factors that are beyond our control, may impact our operating

results or financial condition.

For some years, the world has experienced weakened economic conditions and volatility following adverse changes in global capital markets.

Volatility in oil and gas markets can put significant upward or downward pressure on prices for these commodities, and may affect demand for assets used in production, refining and transportation of oil and gas.

In the past, a significant decline in oil prices has led to lower production and transportation budgets worldwide.

Additionally, the worldwide military or political environment, including the Russia-Ukraine conflict and the conflicts in the Middle East and any related political or economic responses, global macroeconomic effects of trade disputes and increased tariffs, such as those imposed, or that may be imposed, by the U.S., may put further upward or downward pressure on prices for such commodities.In the past, a significant decline in oil prices has led to lower production and transportation budgets worldwide.

These conditions have resulted in significant contraction, deleveraging and reduced liquidity in the credit markets.

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• outbreaks of communicable diseases and natural disasters;

• governmental regulation;

• governmental regulation or policies, including changes to trade agreements or policies that result in increased tariffs or trade wars;

• interest rates;

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Numerous factors could prevent us from achieving similar returns, notwithstanding the performance of individual assets, including, without limitation, taxation and fees payable by us or our operating subsidiaries, including fees and incentive allocation payable to our Manager.

There can be no assurance that the returns generated by any of our assets will meet our target returns, or any other level of return, or that we will achieve or successfully implement our asset acquisition objectives, and failure to achieve the target return in respect of any of our assets could, among other things, have a material adverse effect on our business, prospects, financial condition, results of operations and cash flows.

condition, results of operations and cash flows.

Further, even if the returns generated by individual assets meet target returns, there can be no assurance that the returns generated by other existing or future assets would do so, and the historical performance of the assets in our existing portfolio should not be considered as indicative of future results with respect to any assets.

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While we target the entry into contracts with credit-worthy counterparties, no assurance can be given that such counterparties will perform their obligations during the term of the contractual arrangement.

In addition, when counterparties default, we may fail

to recover all of our assets, and the assets we do recover may be returned in damaged condition or to locations where we will not be able to efficiently use or sell them.

In addition, when counterparties default, we may fail to recover all of our assets, and the assets we do recover may be returned in damaged condition or to locations where we will not be able to efficiently use or sell them.

If we acquire a high concentration of a particular type of asset, or concentrate our investments in a particular sector, our business, prospects, financial condition, results of operations and cash flows could be adversely affected by changes in market demand or problems specific to that asset or sector.

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For example, as the freight transportation markets we serve continue to evolve and become more efficient, the use of certain locomotives or railcars may decline in favor of other more economic modes of transportation.

If the technology we use in our lines of business is superseded, or the cost of replacing our locomotives or railcars is expensive and requires additional capital, we could experience significant cost increases and reduced availability of the assets and equipment that are necessary for our operations.

technology we use in our lines of business is superseded, or the cost of replacing our locomotives or railcars is expensive and requires additional capital, we could experience significant cost increases and reduced availability of the assets and equipment that are necessary for our operations.

Any of these risks may adversely affect our ability to sell our assets on favorable terms, if at all, which could materially adversely affect our operating results and growth prospects.

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Department of Transportation (the “DOT”), the Occupational Safety and Health Act (the “OSHA”), the U.S.

Federal Railroad Administration (the

“FRA”), and the U.S.

Federal Railroad Administration (the “FRA”), and the U.S.

Surface Transportation Board (the “STB”), as well as numerous other state, provincial, local and federal agencies.

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The applicable operational controls include reduced speed restrictions, and maximum lengths on trains carrying these materials.

Retrofitting our tank cars will be required under these new standards to the extent we elect to move certain flammable liquids in the future.

Retrofitting our tank cars will be required under these new standards to

the extent we elect to move certain flammable liquids in the future.

While we may be able to pass some of these costs on to our customers, there may be costs that we cannot pass on to them.

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The adoption of additional federal, state, provincial or local laws or regulations, including any voluntary measures by the rail industry regarding railcar design or crude oil and liquid hydrocarbon rail transport activities, or efforts by local communities to restrict or limit rail traffic involving crude oil, could affect our business by increasing compliance costs and decreasing demand for our services, which could adversely affect our financial position and cash flows.

Moreover, any disruptions in the operations of railroads, including those due to shortages of railcars, weather-related problems, flooding, drought, accidents, mechanical

difficulties, strikes, lockouts or bottlenecks, could adversely impact our customers’ ability to move their product and, as a result, could affect our business.

Moreover, any disruptions in the operations of railroads, including those due to shortages of railcars, weather-related problems, flooding, drought, accidents, mechanical difficulties, strikes, lockouts or bottlenecks, could adversely impact our customers’ ability to move their product and, as a result, could affect our business.

We could be negatively impacted by environmental, social, and governance (“ESG”) and sustainability-related matters.

Governments, investors, customers, employees and other stakeholders are increasingly focusing on corporate ESG practices and disclosures, and expectations in this area are rapidly evolving.

In addition, new ESG laws and regulations are expanding mandatory disclosure, reporting and diligence requirements.

We have announced, and may in the future announce, sustainability-focused investments, partnerships and other initiatives and goals.

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in fact, we cannot be certain that we will always be able to mitigate rising or elevated fuel costs through fuel surcharges at all, as future market conditions or legislative or regulatory activities could adversely affect our ability to apply fuel surcharges or adequately recover increased fuel costs through fuel surcharges.

International, political, and economic factors, events and conditions, including recent geopolitical events, may affect the volatility of fuel prices and supplies.

International, political, and economic factors, events and conditions, including as a result of recent geopolitical events and changes to trade policies or tariffs, may affect the volatility of fuel prices and supplies.

Weather can also affect fuel supplies and limit domestic refining capacity.

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Because we depend on Class I railroads for a significant portion of our operations in North America, our results of operations, financial condition and liquidity may be adversely affected if our relationships with these carriers deteriorate.

The railroad industry in the United States and Canada is dominated by seven Class I carriers that have substantial market control and negotiating leverage.

The railroad industry in the United States and Canada is dominated by six Class I carriers that have substantial market control and negotiating leverage.

In addition, Class I carriers also traditionally have been significant sources of business for us, and may be future sources of potential acquisition candidates as they divest branch lines.

A decision by any of these Class I carriers to cease or re-route certain freight movements or to alter existing business relationships, including operational or relationship changes, could have a material adverse effect on our results of operations.

The overall impact of any such decision

would depend on which Class I carrier is involved, the routes and freight movements affected, as well as the nature of any changes.

The overall impact of any such decision would depend on which Class I carrier is involved, the routes and freight movements affected, as well as the nature of any changes.

Transtar faces competition from other railroads and other transportation providers.

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The failure to comply with these laws and regulations could cause us to incur significant costs, fines or penalties or require the assets to be removed from service for a period of time resulting in reduced income from these assets.

In addition, if our acquisitions in other sectors produce insufficient revenues, or produce investment losses, or if we are unable to efficiently manage our expanded operations, our results of operations will be adversely affected, and our reputation and business may be harmed.

Restrictive covenants in our debt agreements and the certificate of designations for our Series A Redeemable Preferred Stock may adversely affect us.

The instruments governing our outstanding debt contain, and the certificate of designations for our Series A Redeemable Preferred Stock and the indenture governing the 2027 Notes contain, certain restrictive covenants that limit our ability to engage in activities that may be in our long-term best interests.

In addition, if our acquisitions in other sectors produce

insufficient revenues, or produce investment losses, or if we are unable to efficiently manage our expanded operations, our results of operations will be adversely affected, and our reputation and business may be harmed.

Restrictive covenants in our debt agreements and the certificates of designations for our Series A Redeemable Preferred Stock and our newly issued Series B Preferred Stock may adversely affect us.

The instruments governing our outstanding debt contain, and the certificates of designations for our Series A Redeemable Preferred Stock and our newly issued Series B Preferred Stock (see Note 19 — Acquisition of Outstanding Equity Interests in Long Ridge Energy & Power LLC) and the indenture governing the 2027 Notes contain, certain restrictive covenants that limit our ability to engage in activities that may be in our long-term best interests.

For example, these covenants significantly restrict our and certain of our subsidiaries’ ability to:

• incur indebtedness;

• issue equity interests of the Company ranking pari passu with, or senior in priority to, the Series A Redeemable Preferred Stock;

• issue equity interests of the Company ranking pari passu with, or senior in priority to, the Series A Redeemable Preferred Stock or the Series B Preferred Stock;

• issue equity interests of any subsidiary of the Company;

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If an event of default occurs, we cannot assure you that we would have sufficient assets to repay all of our obligations.

In addition, certain other debt instruments (including the Series 2020 Bonds, Series 2021 Bonds, the EB-5 loan agreements, and the Transtar Revolver) include restrictive covenants that may materially limit our ability to repay other debt or require us to achieve and maintain compliance with specified financial ratios.

See “Description of Indebtedness” in the Information Statement filed with the SEC on Form 8-K on July 15, 2022.

In addition, certain other debt instruments (including the Series 2020A Bonds, Series 2021 Bonds and Series 2024 Bonds, the EB-5 loan agreements, the DRP Revolver and the October 2024 Jefferson Credit Agreement) include restrictive covenants that may materially limit our ability to repay other debt or require us to achieve and maintain compliance with specified financial ratios.

See “Description of Indebtedness” in the Information Statement filed with the SEC on Form 8-K on July 15, 2022 and Exhibits 10.11, 10.14 and 10.15 included herein.

Terrorist attacks or other hostilities could negatively impact our operations and our profitability and may expose us to liability and reputational damage.

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Our business is capital intensive, and we have used and may continue to employ leverage to finance our operations.

Accordingly, our ability to successfully execute our business strategy and maintain our operations depends on the availability and cost of debt and equity capital.

Accordingly, our ability to successfully execute our business strategy and maintain our operations depends on the availability and cost of debt

and equity capital.

Additionally, our ability to borrow against our assets is dependent, in part, on the appraised value of such assets.

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If there is a delay in obtaining any required regulatory approval, it could delay projects and cause us to incur costs.

In connection with FTAI’s acquisition of Long Ridge, the former owner that sold FTAI the property (the “Long Ridge Seller”) is obligated to perform certain post-closing demolition activities, remove specified containers, equipment and structures and conduct investigation, removal, cleanup and decontamination related thereto.

The Long Ridge Seller is responsible for ongoing environmental remediation related to historic industrial operations on and off Long Ridge.

In addition, Long Ridge is located adjacent to the former Ormet Corporation Superfund site (the “Ormet site”), which is owned and operated by the Long Ridge Seller.

Pursuant to an order with the U.S.

EPA, the Long Ridge Seller is obligated to pump groundwater that has been impacted by the adjacent Ormet site beneath our site and discharge it to the Ohio River and monitor the groundwater annually.

Long Ridge is also subject to an environmental covenant related to the adjacent Ormet site that, inter alia, restricts the use of groundwater beneath our site and requires U.S.

EPA consent for activities on Long Ridge that could disrupt the groundwater monitoring or pumping.

The Long Ridge Seller is contractually obligated to complete its regulatory obligations on Long Ridge and we benefit from a related indemnity and insurance policy.

If the Long Ridge Seller fails to fulfill its demolition, removal, investigation, remediation, monitoring, or indemnity obligations, and if the related insurance, which is subject to limits and conditions, fails to cover our costs, we could incur losses.

Redevelopment of the property in those areas undergoing investigation and remediation pursuant to the Ohio EPA order must await state environmental agency confirmation that no further investigation or remediation is required before redevelopment activities can occur in such area of the property.

Therefore, any delay in the Long Ridge Seller’s completion of the environmental work or receipt of related approvals or consents from Ohio EPA or U.S.

EPA could delay our redevelopment activities.

In addition, a portion of Long Ridge was recently redeveloped as a combined cycle gas-fired electric generating facility, and other portions will likely be redeveloped in the future.

In addition, a portion of the Long Ridge site was recently redeveloped as a combined cycle gas-fired electric generating facility, and other portions will likely be redeveloped in the future.

Although we have not identified material impacts to soils or groundwater that reasonably would be expected to prevent or delay further redevelopment projects, impacted materials could be encountered that require special handling and/or result in delays to those projects.

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Moreover, new, stricter environmental laws, regulations or enforcement policies, including those imposed in response to climate change, could be implemented that significantly increase our compliance costs, or require us to adopt more costly methods of operation.

If we are not able to transform Repauno or Long Ridge into hubs for industrial and energy development in a timely manner, their future prospects could be materially and adversely affected, which may have a material adverse effect on our business, operating results and financial condition.

If we are not able to transform the Repauno or Long Ridge sites into hubs for industrial and energy development in a timely manner, their future prospects could be materially and adversely affected, which may have a material adverse effect on our business, operating results and financial condition.

We have material customer concentration with respect to the Jefferson Terminal and Railroad businesses, with a limited number of customers accounting for a material portion of our revenues.

We earned approximately 12%, 10% and 15% of our revenue for the years ended December 31, 2023, 2022 and 2021 from one customer within the Jefferson Terminal segment, respectively, and 51%, 51% and 45% of our revenue from one customer within the Railroad segment during the years ended December 31, 2023.

2022 and 2021, respectively.

As of December 31, 2023, accounts receivable from three customers within the Jefferson Terminal and Railroad segments represented 56% of total accounts receivable, net.

We earned approximately 13%, 12% and 10% of our revenue for the years ended December 31, 2024, 2023 and 2022 from one customer within the Jefferson Terminal segment, respectively, and 50%, 51% and 51% of our revenue from one customer within the Railroad segment during the years ended December 31, 2024, 2023 and 2022, respectively.

As of December 31, 2024, accounts receivable from two customers within the Jefferson Terminal and Railroad segments represented 48% of total accounts receivable, net.

As of December 31, 2023, accounts receivable from three customers within the Jefferson Terminal and Railroad segments represented 56% of total accounts receivable, net.

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While we devote substantial resources to maintaining adequate levels of cyber-security, our resources and technical sophistication may not be adequate to prevent all types of cyberattacks or incidents .

We have identified a material weakness in our internal control over financial reporting.

If we fail to properly remediate this material weakness or if we are otherwise unable to develop and maintain an effective system of internal control over financial reporting, material misstatements in our financial statements could occur and we may not be able to accurately report our financial results in a timely manner, which may adversely affect investor confidence in us, our business, results of operations and financial condition, and the trading price of our common stock.

As further described in Item 9A.

Controls and Procedures of this Annual Report, we have identified a material weakness in our internal control over financial reporting relating to the Company’s review of the cash flow projections and other key assumptions used in the goodwill impairment test analysis as of October 1, 2023, relating to the Jefferson Terminal reporting unit was not timely or in sufficient detail.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected and corrected on a timely basis.

Effective internal controls are necessary for us to provide reliable financial reports and prevent fraud.

We continue to evaluate and implement steps to remediate the material weakness.

These remediation measures may be time consuming and costly and there is no assurance that these initiatives will ultimately have the intended effects.

The material weakness in our internal control over financial reporting will not be considered remediated until the controls operate for a sufficient period of time and management has concluded, through testing that these controls operate effectively.

If we do not successfully remediate the material weakness, or if other material weaknesses or other deficiencies arise in the future, we may be unable to accurately report our financial results, which could cause our financial results to be materially misstated and require restatement.

In such case, we may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports, in addition to applicable stock exchange listing requirements and requirements under certain of our agreements, which could adversely affect investor confidence in us, our business, results of operations and financial condition, and the trading price of our common stock.

In addition, this material weakness may also have the effect of heightening other risks described in this “Risk Factors” section.

If we are deemed an “investment company” under the Investment Company Act, it could have a material adverse effect on our business, prospects, financial condition, results of operations and cash flows.

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Adverse judgments or settlements in legal proceedings could materially harm our business, financial condition, operating results and cash flows.

We may be party to claims that arise from time to time in the ordinary course of our business, which may include those related to, for example, contracts, sub-contracts, employment of our workforce and immigration requirements or compliance with any of a wide array of state and federal statutes, rules and regulations that pertain to different aspects of our business.

wide array of state and federal statutes, rules and regulations that pertain to different aspects of our business.

We may also be required to initiate expensive litigation or other proceedings to protect our business interests.

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Such remedies could have a material adverse effect on the Company’s financial condition.

The failure of the Company to pay required dividends on its Series A Preferred Stock following the second anniversary of the issuance date may have a material adverse effect on the Company’s financial condition.

Following August 1, 2024, the second anniversary of the issuance date, the Company is required to pay cash dividends equal to the cash dividend rate.

The cash dividend rate will be equal to 14.0% per annum subject to increase in accordance with the terms of the Series A Preferred Stock.

Specifically, the rate will be increased by 2.0% per annum for any periods during the first two years following closing where the dividend is not paid in cash.

Prior to the second anniversary of the issuance date of the Series A Preferred Stock, such dividends will automatically accrue and accumulate on each share of Series A Preferred Stock, whether or not declared and paid, or they may be paid in cash at FTAI Infrastructure’s discretion.

Further, after the second

anniversary of the issuance date, if the Company fails to pay such cash dividends when required to do so, the dividend rate would be equal to 18.0% per annum, subject to increase as described below, until all such dividends are paid in cash.

Our failure to pay such dividends for 12 monthly dividend periods (whether or not consecutive) following the second anniversary of the issuance date would result in an Event of Noncompliance.

The failure of the Company to pay required dividends on its Series A Preferred Stock following August 1, 2024, may have a material adverse effect on the Company’s financial condition.

The Company is required to pay cash dividends equal to the cash dividend rate.

The cash dividend rate equals 14.0% per annum subject to increase in accordance with the terms of the Series A Preferred Stock.

Following August 1, 2024, if the Company fails to pay cash dividends when required to do so, the dividend rate would be equal to 18.0% per annum, subject to increase as described below, until all such dividends are paid in cash.

Further, the Company is subject to limitations on paying cash dividends on its common stock when it is not current on relevant cash payments for the Series A Preferred Stock.

Our failure to pay cash dividends for 12 monthly dividend periods (whether or not consecutive) following August 1, 2024, would result in an Event of Noncompliance.

If we are unable to cure an Event of Noncompliance (to the extent curable), (i) the size of our board of directors will automatically increase to a number sufficient to constitute a majority of the board of directors, (ii) the majority of the holders of the Series A Preferred Stock will have the right to designate and elect a majority of the members of our board of directors, and (iii) other than with respect to the election of directors, the shares of Series A Preferred Stock will vote with our common stock as a single class (with the number of votes per share determined in accordance with the certificate of designations for our Series A Preferred Stock).

Such remedies could have a material adverse effect on the Company’s financial condition.

See Note 2 to the consolidated and combined consolidated financial statements and Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources for additional information regarding Management’s plan to alleviate liquidity risk by, among other things, continuing to accrue paid-in-kind dividends on its Series A Senior Preferred Stock.

See Note 2 to the consolidated and combined consolidated financial statements and Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources for additional information regarding Management’s plan to alleviate liquidity risk by, among other things, accruing paid-in-kind dividends on its Series A Preferred Stock.

Risks Related to Our Manager

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In addition, our Manager may assign our Management Agreement to an entity whose business and operations are managed or supervised by Mr.

Edens, who is a principal and a member of the board of directors of Fortress, an affiliate of our Manager, and a member of the management committee of Fortress since co-founding Fortress in May 1998.

Edens, who is an employee of Fortress, which is an affiliate of our Manager, and who until May 2024, was a principal and a member of the board of directors of Fortress and a member of the management committee of Fortress since co-founding Fortress in May 1998.

In the event of any such assignment to a non-affiliate of Fortress, the functions currently performed by our Manager’s current personnel may be performed by others.

We can give you no assurance that such personnel would manage our operations in the same manner as our Manager currently does, and the failure by the personnel of any such entity to acquire assets generating attractive risk-adjusted returns could have a material adverse effect on our business, financial condition, results of operations and cash flows.

On May 22, 2023, Fortress and Mubadala announced that they have entered into definitive agreements pursuant to which, among other things, certain members of Fortress management and affiliates of Mubadala will acquire 100% of the equity of Fortress that is currently indirectly held by SoftBank.

On May 14, 2024, certain members of Fortress management and affiliates of Mubadala completed their acquisition of 100% of the equity of Fortress.

While Fortress’s senior investment professionals are expected to remain at Fortress, including those individuals who perform services for us, there can be no assurance that the transaction will not have an adverse impact on us or our relationship with our Manager.

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See “Certain Relationships and Related Party Transactions” in the Information Statement filed with the SEC on Form 8-K on July 15, 2022.

The ownership by some of our executive officers and directors of common shares, options, or other equity awards of FTAI may create, or may create the appearance of, conflicts of interest.

Because some of our directors, officers and other employees of our Manager also currently hold positions with FTAI, they own FTAI common shares, options to purchase FTAI common shares or other equity awards.

For example, Judith Hannaway and Ray Robinson are directors of both FTAI and FTAI Infrastructure.

Ownership by some of our directors and officers of common shares or options to purchase common shares of FTAI, or any other equity awards, creates, or, may create the appearance of, conflicts of interest when these directors and officers are faced with decisions that could have different implications for FTAI than they do for us.

We may compete with affiliates of and entities managed by our Manager, including FTAI, which could adversely affect our and their results of operations.

Affiliates of and entities managed by our Manager, including FTAI, are primarily engaged in the infrastructure and energy business and invest in, and actively manage, portfolios of infrastructure and energy investments and other assets.

Affiliates of and entities managed by our Manager, including FTAI, are not restricted in any manner from competing with us.

After the spin-off, affiliates of and entities managed by our Manager, including FTAI, may decide to invest in the same types of assets that we invest in.

Furthermore, we have the same Manager and certain directors and officers are the same as FTAI and certain of our Manager’s other affiliates.

The ownership by some of our directors of common shares, options, or other equity awards of FTAI may create, or may create the appearance of, conflicts of interest.

Because some of our directors also currently hold positions with FTAI, they own FTAI common shares, options to purchase FTAI common shares or other equity awards.

For example, Judith Hannaway and Ray Robinson are directors of both FTAI and FTAI Infrastructure, and Joseph Adams, Jr., who is the chairman of the board of both FTAI and FTAI Infrastructure and is the chief executive officer of FTAI, owns common shares and options to purchase common shares in both FTAI and FTAI Infrastructure.

Ownership by some of our directors of common shares or options to purchase common shares of FTAI, or any other equity awards, creates, or, may create the appearance of, conflicts of interest when these directors are faced with decisions that could have different implications for FTAI than they do for us.

We may compete with affiliates of and entities managed by our Manager which could adversely affect our and their results of operations.

Affiliates of and entities managed by our Manager are primarily engaged in the infrastructure and energy business and invest in, and actively manage, portfolios of infrastructure and energy investments and other assets.

Affiliates of and entities managed by our Manager are not restricted in any manner from competing with us.

After the spin-off, affiliates of and entities managed by our Manager may decide to invest in the same types of assets that we invest in.

Furthermore, certain of our directors and officers are the same as certain of our Manager’s affiliates.

See “—Risks Related to Our Manager—There are conflicts of interest in our relationship with our Manager.”

We share certain key directors and officers with FTAI, which means those officers do not devote their full time and attention to our affairs and the overlap may give rise to conflicts.

There is an overlap between certain key directors and officers of the Company and of FTAI subsidiaries.

Kenneth Nicholson serves as both the chief executive officer of the Company and as a director of FTAI.

As a result, not all of our executive officers devote their full time and attention to the Company’s affairs.

In addition, Judith Hannaway and Ray Robinson are directors of both the Company and FTAI, and Joseph Adams, Jr.

We share certain key directors with FTAI, which means those officers do not devote their full time and attention to our affairs and the overlap may give rise to conflicts.

There is an overlap between certain key directors of the Company and of FTAI.

Judith Hannaway and Ray Robinson are directors of both the Company and FTAI, and Joseph Adams, Jr.

is the chairman of the board of directors of both the Company and FTAI, and continues to serve as the chief executive officer of FTAI.

Shared directors and officers may have actual or apparent conflicts of interest with respect to matters involving or affecting each company.

Shared directors may have actual or apparent conflicts of interest with respect to matters involving or affecting each company.

For example, there will be the potential for a conflict of interest when we on the one hand, and FTAI and its respective subsidiaries and successors on the other hand, are party to commercial transactions concerning the same or adjacent investments.

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See “Certain Relationships and Related Party Transactions—Our Manager and Management Agreement” in the Information Statement filed with the SEC on Form 8-K on July 15, 2022 for a discussion of certain procedures we instituted to help ameliorate such potential conflicts that may arise.

We incurred indebtedness in the form of the 2027 Notes in connection with the spin-off from FTAI, and the degree to which we are leveraged could cause a material adverse effect on our business, financial condition, results of operations and cash flows.

We incurred indebtedness in the form of the 2027 Notes, and the degree to which we are leveraged could cause a material adverse effect on our business, financial condition, results of operations and cash flows.

In connection with the spin-off, we issued the 2027 Notes.

We have historically relied in part upon FTAI to provide credit support or fund our working capital requirements and other cash requirements, but we are not able to rely on the earnings, assets or cash flow of FTAI, and FTAI does not provide credit support or funds to finance our working capital or other cash requirements.

As a result, we are responsible for servicing our own debt and obtaining and maintaining sufficient working capital and other funds to satisfy our cash requirements.

We are responsible for servicing our own debt and obtaining and maintaining sufficient working capital and other funds to satisfy our cash requirements.

Our access to and cost of debt financing is different from the historical access to and cost of debt financing under FTAI.

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It is uncertain to what extent various states will conform to the Tax Cuts and Jobs Act.

In addition, under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the “Code”), if a corporation undergoes an “ownership change,” which is generally defined as a greater than fifty-percent (50%) change, by value, in its equity ownership over a three (3)-year period, the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes to offset its post-change income or taxes may be limited.

We may experience ownership change in the future as a result of subsequent shifts in our stock ownership, some of which may be outside of our control and may not be prevented by the restrictions on the transferability and ownership of our common stock, Series A Preferred Stock and other interests treated as our “stock” in our certificate of incorporation.

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We cannot assure you that our internal control over financial reporting will be effective in the future or that a material weakness will not be discovered with respect to a prior period for which we had previously believed that our internal control over financial reporting was effective.

If we are not able to maintain or document effective internal control over financial reporting, our

independent registered public accounting firm may issue an adverse opinion as to the effectiveness of our internal control over financial reporting.

If we are not able to maintain or document effective internal control over financial reporting, our independent registered public accounting firm may issue an adverse opinion as to the effectiveness of our internal control over financial reporting.

Matters impacting our internal control over financial reporting may cause us to be unable to report our financial information on a timely basis or may cause us to restate previously issued financial information, and thereby subject us to adverse regulatory consequences, including sanctions or investigations by the SEC, or violations of applicable stock exchange listing rules.

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On August 1, 2022, our board of directors adopted the FTAI Infrastructure Inc.

Nonqualified Stock Option and Incentive Award Plan (the “Plan”), which provides for the ability to grant compensation awards in the form of stock, options, stock appreciation rights, restricted stock, performance awards, manager awards, tandem awards, other stock-based awards (including restricted stock units) and non-stock-based awards, in each case to our Manager, to the directors, officers, employees, service providers, consultants and advisors of our Manager who perform services for us, and to our directors, officers, employees, service providers, consultants and advisors.

We initially reserved 30,000,000 shares of our common stock for issuance under the Plan.

On the date of any equity issuance by us during the ten-year term of the Plan, that number will be increased by a number of shares of our common stock equal to 10% of (i) the number of shares of our common stock newly issued by us in such equity issuance or (ii) if such equity issuance relates to equity securities other than our common stock, the number of shares of our common stock equal to the quotient obtained by dividing the gross capital raised in such equity issuance by the fair market value of a share of our common stock as of the date of such equity issuance (such quotient, the “Equity Security Factor”).

The term of the Plan expires in 2032.

For a more detailed description of the Plan, see “Management—FTAI Infrastructure Nonqualified Stock Option and Inventive Award Plan” in the Information Statement filed with the SEC on Form 8-K on July 15, 2022.

Nonqualified Stock Option and Incentive Award Plan (the “Incentive Plan”), which provides for the ability to grant compensation awards in the form of stock, options, stock appreciation rights, restricted stock, performance awards, manager awards, tandem awards, other stock-based awards (including restricted stock units) and non-stock-based awards, in each case to our Manager, to the directors, officers, employees, service providers, consultants and advisors of our Manager who perform services for us, and to our directors, officers, employees, service providers, consultants and advisors.

We initially reserved 30,000,000 shares of our common stock for issuance under the Incentive Plan.

On the date of any equity issuance by us during the ten-year term of the Incentive Plan, that number will be increased by a number of shares of our common stock equal to 10% of (i) the number of shares of our common stock newly issued by us in such equity issuance or (ii) if such equity issuance relates to equity securities other than our common stock, the number of shares of our common stock equal to the quotient obtained by dividing the gross capital raised in such equity issuance by the fair market value of a share of our common stock as of the date of such equity issuance (such quotient, the “Equity Security Factor”).

The term of the Incentive Plan expires in 2032.

For a more detailed description of the Incentive Plan, see “Management—FTAI Infrastructure Nonqualified Stock Option and Inventive Award Plan” in the Information Statement filed with the SEC on Form 8-K on July 15, 2022.

Upon the successful completion of an equity offering by us, we will issue to our Manager (or an affiliate of our Manager), as compensation for our Manager’s role in raising capital for us, options to purchase shares of our common stock equal to up to 10% of (i) the aggregate number of shares of our common stock being issued in such offering or (ii) if such equity issuance relates to equity securities other than shares of our common stock, the number of shares of our common stock equal to the Equity Security Factor.

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We have incurred and may also continue to incur significant net operating loss carryforwards and other tax attributes, the amount and availability of which are subject to certain qualifications, limitations, and uncertainties.

Our certificate of incorporation imposes certain restrictions on the transferability and ownership of our common stock, preferred stock, and other interests treated as our “stock” (such stock and other interests, the “Corporation Securities,” such restrictions on transferability and ownership, the “Ownership Restrictions”) in order to reduce the possibility of an equity ownership shift that could result in limitations on our ability to utilize net operating loss carryforwards for U.S.

Our certificate of incorporation

imposes certain restrictions on the transferability and ownership of our common stock, preferred stock, and other interests treated as our “stock” (such stock and other interests, the “Corporation Securities,” such restrictions on transferability and ownership, the “Ownership Restrictions”) in order to reduce the possibility of an equity ownership shift that could result in limitations on our ability to utilize net operating loss carryforwards for U.S.

federal income tax purposes.

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or (3) it is not in our best interests to continue the Ownership Restrictions.

The Ownership Restrictions may also be waived by the

board of directors on a case by case basis.

The Ownership Restrictions may also be waived by the board of directors on a case-by-case basis.

There is no assurance, however, that the Company will not experience a future ownership change under Section 382 that may significantly limit its ability to use its NOL carryforwards as a result of such a waiver or otherwise.

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Alternatively, if a court were to find the choice of forum provision contained in our bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, operating results and financial condition.

While we currently pay regular quarterly dividends to our stockholders, we may change our dividend policy at any time, including, to the extent necessary, to alleviate liquidity risk.

While we currently pay regular quarterly dividends to our stockholders, we may change our dividend policy at any time.

Although we currently pay regular quarterly dividends to holders of our common stock, we may change our dividend policy at any time.

For example, as discussed in Note 2 to the consolidated and combined consolidated financial statements and Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources, the Company’s management intends to alleviate liquidity risk by, among other things, eliminating dividends on our common stock.

The declaration and payment of dividends to holders of our common stock will be at the discretion of our board of directors in accordance with applicable law after taking into account various factors, including actual results of operations, liquidity and financial condition, net cash provided by operating activities, restrictions imposed by applicable law, limitations under our contractual agreements, including the agreements governing the New Financing, our taxable income, our operating expenses and other factors our board of directors deem relevant.

Our net cash provided by operating activities could be less than the amount of distributions to our stockholders.

The declaration and payment of dividends to holders of our common stock will be at the discretion of our board of directors in accordance with applicable law after taking into account various factors, including actual results of operations, liquidity and financial condition, net cash provided by operating activities, restrictions imposed by applicable law, limitations under our contractual agreements, including the agreements governing certain of our debt financings, our taxable income, our operating

expenses and other factors our board of directors deem relevant.

There can be no assurance that we will continue to pay dividends in amounts or on a basis consistent with prior distributions to our investors, if at all.

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As a public company, we will incur additional costs and face increased demands on our management.

As a newly independent public company with shares listed on Nasdaq, we need to comply with an extensive body of regulations that did not apply to us previously, including certain provisions of the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, regulations of the SEC and requirements of Nasdaq.

As an independent public company with shares listed on Nasdaq, we need to comply with an extensive body of regulations that did not apply to us previously, including certain provisions of the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, regulations of the SEC and requirements of Nasdaq.

These rules and regulations will increase our legal and financial compliance costs and make some activities more time-consuming and costly.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors