What changed in this filing

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Item 1A. Risk Factors

2025-08-15 compared with 2025-05-16 · 74 added, 23 removed, 624 unchanged (13% of the section changed)

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• outbreaks of communicable diseases and natural disasters;

• governmental regulation or economic, trade or other policies, including as a result of changing to trade policies and tariffs, including related uncertainty or the imposition of modified or additional tariffs, trade wars, barriers or restrictions, or threats of such actions;

• governmental regulation or economic, trade or other policies, including as a result of changing trade policies and tariffs, including related uncertainty or the imposition of modified or additional tariffs, trade wars, barriers or restrictions, or threats of such actions;

• interest rates;

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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 17 — Series B Preferred Stock - Redeemable Convertible 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.

Restrictive covenants in our debt agreements and the certificates of designations for our Series A Redeemable Preferred Stock and our 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 Series B Preferred Stock (see Note 17 — Series B Preferred Stock - Redeemable Convertible 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.

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

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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 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.

In addition, certain other debt instruments (including the Series 2020A Bonds, Series 2021 Bonds and Series 2024 Bonds, the EB-5 loan agreements, the Long Ridge Acquiom Loan, the DRP DB Term Loan, and the June 2025 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.

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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 41% of total revenues for the three months ended March 31, 2025 from one customer in the Railroad segment.

Additionally, we earned 11% of total revenues for the three months ended March 31, 2025 from one customer in the Jefferson Terminal segment.

We earned approximately 51% of total revenues for the three months ended March 31, 2024 from one customer in the Railroad segment.

Additionally, we earned 14% of total revenues for the three months ended March 31, 2024, from one customer in the Jefferson Terminal segment.

As of March 31, 2025, accounts receivable from three customers within the Jefferson Terminal, Railroad and Corporate and Other segments represented 50% of total accounts receivable, net.

We earned approximately 32% and 36%, respectively, of total revenues for the three and six months ended June 30, 2025 from one customer in the Railroad segment.

Additionally, we earned approximately 11% of total revenues for both the three and six months ended June 30, 2025 from one customer in the Jefferson Terminal segment.

We earned approximately 49% and 50%, respectively, of total revenues for the three and six months ended June 30, 2024 from one customer in the Railroad segment.

Additionally, we earned approximately 13% and 14%, respectively, of total revenues for the three and six months ended June 30, 2024, from one customer in the Jefferson Terminal segment.

As of June 30, 2025, accounts receivable from three customers within the Jefferson Terminal, Railroad and Corporate and Other segments represented 50% of total accounts receivable, net.

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

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Our Management Agreement was not negotiated at arm’s-length, and its terms, including fees payable, may not be as favorable to us as if they had been negotiated with an unaffiliated third party.

There are conflicts of interest inherent in our relationship with our Manager insofar as our Manager and its affiliates—including investment funds, private investment funds, or businesses managed by our Manager, including Florida East Coast Industries, LLC (“FECI”)—invest in transportation and transportation-related infrastructure assets and whose investment objectives overlap with our asset acquisition objectives.

There are conflicts of interest inherent in our relationship with our Manager insofar as our Manager and its affiliates—including investment funds, private investment funds, or businesses managed by our Manager, including FIHP LLC (“FIHP”)—invest in transportation and transportation-related infrastructure assets and whose investment objectives overlap with our asset acquisition objectives.

Certain opportunities appropriate for us may also be appropriate for one or more of these other investment vehicles.

Certain members of our board of directors and employees of our Manager who are our officers also serve as officers and/or directors of these other entities.

Although we have the same Manager, we may compete with entities affiliated with our Manager or Fortress, including FECI, for certain target assets.

Although we have the same Manager, we may compete with entities affiliated with our Manager or Fortress, including FIHP, for certain target assets.

From time to time, entities affiliated with or managed by our Manager or Fortress may focus on investments in assets with a similar profile as our target assets that we may seek to acquire.

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The ability of our Manager and its officers and employees to engage in other business activities, subject to the terms of our Management Agreement, may reduce the amount of time our Manager, its officers or other employees spend managing us.

In addition, we may engage (subject to our strategy) in material transactions with our Manager or another entity managed by our Manager or one of its affiliates, including FTAI and FECI, which may include, but are not limited to, certain acquisitions, financing arrangements, purchases of debt, co-investments, consumer loans, servicing advances and other assets that present an actual, potential or perceived conflict of interest.

In addition, we may engage (subject to our strategy) in material transactions with our Manager or another entity managed by our Manager or one of its affiliates, including FTAI and FIHP, which may include, but are not limited to, certain acquisitions, financing arrangements, purchases of debt, co-investments, consumer loans, servicing advances and other assets that present an actual, potential or perceived conflict of interest.

Our board of directors adopted a policy regarding the approval of any “related party transactions” pursuant to which certain of the material transactions described above may require disclosure to, and approval by, the independent members of our board of directors.

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In addition, we may be subject to similar or other limitations under state, local or other tax laws.

Risks Related to the Wheeling Acquisition (the “Wheeling Acquisition”)

The Wheeling Acquisition is subject to conditions, some or all of which may not be satisfied or completed on a timely basis, or at all.

Failure to complete the Wheeling Acquisition could have material adverse effects on us.

On August 6, 2025, Percy Acquisition LLC (“Buyer”), a subsidiary of the Company, signed the stock purchase agreement (the “Stock Purchase Agreement”) with WLE Management Partners, L.P.

(“Seller”), pursuant to which, among other things, the Buyer will purchase all of the issued and outstanding capital stock of The Wheeling Corporation (“Wheeling”) from the Seller.

We currently expect to close the Wheeling Acquisition in the third quarter of 2025, subject to customary closing conditions including the absence of any legal restraint issued by any court or governmental entity of competent jurisdiction preventing consummation of the transaction and the accuracy of each party’s representations and warranties.

There can be no assurance that the conditions to closing of the Wheeling Acquisition will be satisfied or waived or that other events will not intervene to delay or result in the failure to close the Wheeling Acquisition.

Any delay in closing or a failure to close the Wheeling Acquisition could have a negative impact on our business and the trading price of our common stock.

If the Wheeling Acquisition is not completed, our ongoing business may be materially adversely affected and, without realizing any of the benefits of having completed the Wheeling Acquisition, we will be subject to a number of risks, including the following:

• the market price of our common stock could decline;

• time and resources committed by our management to matters relating to the Wheeling Acquisition could otherwise have been devoted to pursuing other beneficial opportunities for our Company;

• we may experience negative reactions from the financial markets or from our customers, employees, suppliers and regulators;

• we will be required to pay the costs relating to the Wheeling Acquisition, such as legal, accounting and financial advisory fees, whether or not the Wheeling Acquisition is completed.

The materialization of any of these risks could adversely impact our ongoing business.

Similarly, delays in the completion of the Wheeling Acquisition could, among other things, result in additional transaction costs, loss of revenue or other negative effects associated with uncertainty about completion of the Wheeling Acquisition.

Following the closing of the Wheeling Acquisition, Wheeling will be held in a voting trust pending authorization of the Wheeling Acquisition by the Surface Transportation Board.

During the trust period, Company will not control Wheeling, but Wheeling’s operational and financial performance could have an adverse effect on the Company’s financial condition or results of operations.

At closing, the voting stock of Wheeling will be deposited into an irrevocable voting trust that insulates Wheeling from control by the Company pending authorization of the Wheeling Acquisition by the federal Surface Transportation Board (STB).

During the trust period, the Company will hold a 100% beneficial ownership interest in Wheeling but will not control Wheeling until STB control approval is obtained.

Until that time, Wheeling will be managed by its current executive team overseen by the trustee of the voting trust, who will also be appointed as the sole director of Wheeling during the trust period.

The voting trust prohibits the Company from exercising control over the business strategy or other operational aspects of Wheeling.

The Company cannot provide assurance that Wheeling will operate in a manner that will increase the value of the Company’s investments or that the Company will not incur losses from Wheeling.

The pendency of the STB's regulatory review of the Wheeling Acquisition could have an adverse effect on the Company’s business, results of operations, financial condition, cash flows or the market value of the Company’s common stock.

The Wheeling Acquisition is subject to final approval by the STB, and there can be no assurance as to whether and when it may be approved.

Following closing and creation of the voting trust, the Company will seek STB authorization to control Wheeling.

There can be no assurance as to whether and when STB approval will be obtained.

Accordingly, the Wheeling Acquisition may be delayed or prevented entirely, and the anticipated benefits of the Wheeling Acquisition could be reduced.

We may be unable to successfully integrate the businesses and realize the anticipated benefits of the Wheeling Acquisition.

The success of the Wheeling Acquisition will depend, in part, on our ability to successfully integrate Wheeling, which currently operates as an independent company and will continue to do so until the Company has received STB approval to control Wheeling, with our business and realize the anticipated benefits, including synergies, cost savings, innovation and operational efficiencies, from this combination.

If we are unable to achieve these objectives within the anticipated time frame, or at all, the anticipated benefits may not be realized fully, or at all, or may take longer to realize than expected and the value of our common stock may be harmed.

Additionally, as a result of the Wheeling Acquisition, rating agencies may take negative actions against our credit ratings, which may increase our financing costs.

The integration of Wheeling into our business is a complex, costly and time-consuming process, and may result in material challenges, including, without limitation:

• failure to successfully integrate Wheeling in a manner that permits us to realize the anticipated benefits of the acquisition;

• managing a larger rail platform;

• difficulties expanding our customer base;

• difficulties and delays integrating Wheeling’s operations and systems and retaining key employees;

• higher than anticipated costs incurred in connection with the integration of Wheeling;

• the possibility of faulty assumptions underlying expectations regarding the integration process;

• retaining existing business and operational relationships and attracting new business and operational relationships;

• disruptions to our ongoing business and diversion of our management’s attention caused by transition or integration activities involving Wheeling;

• consolidating corporate and administrative infrastructures and eliminating duplicative functions;

• assumption of pre-existing contractual relationships of Wheeling that we may not have otherwise entered into, the termination or modification of which may be costly or disruptive to our business;

• unanticipated issues in integrating information technology, communications and other systems;

• incurring debt to finance the Wheeling Acquisition, which will increase our debt service requirements, expense and leverage;

• any potential litigation arising from the transaction;

• unanticipated changes in applicable federal or state laws or regulations.

Many of these factors will be outside of our control and any one of them could result in delays, increased costs, decreases in the amount of expected revenues and diversion of management’s time and energy, which could materially affect our financial position, results of operations and cash flows.

We may not have discovered undisclosed liabilities or other issues of Wheeling during our due diligence process, and we may not have adequate legal protection from potential liabilities of, or in respect of our acquisition of Wheeling.

In the course of the due diligence review of Wheeling that we conducted prior to the execution of the Stock Purchase Agreement, we may not have discovered, or may have been unable to quantify, undisclosed liabilities or other issues relating to Wheeling and its subsidiaries.

Moreover, we may not have adequate legal protection from potential liabilities of, or in respect of our acquisition of Wheeling, irrespective of whether or not such potential liabilities were discovered.

Examples of such undisclosed or potential liabilities or other issues may include, but are not limited to, pending or threatened litigation, regulatory and environmental compliance, tax liabilities, indemnification of obligations, undisclosed counterparty termination rights, or undisclosed letter of credit or guarantee requirements.

Any such undisclosed or potential liabilities or other issues could have an adverse effect on our business, results of operations, financial condition and cash flows following the completion of the Wheeling Acquisition.

Risks Related to Our Common Stock

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Internal control over financial reporting is complex and may be revised over time to adapt to changes in our business, or changes in applicable accounting rules.

We may make investments through joint ventures and accounting for such investments can increase the complexity of maintaining effective internal control over financial reporting.

We may make investments through joint ventures and

accounting for such investments can increase the complexity of maintaining effective internal control over financial reporting.

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.

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In addition, the compensation committee of our board of directors has the authority to grant such other awards to our Manager as it deems advisable;

provided that no such award may be granted to our Manager in connection with any issuance by us of equity securities in excess of 10% of (i) the maximum number of shares of our

common stock then being issued or (ii) if such equity issuance relates to equity securities other than shares of our common stock, the maximum number of shares of our common stock determined in accordance with the Equity Security Factor.

provided that no such award may be granted to our Manager in connection with any issuance by us of equity securities in excess of 10% of (i) the maximum number of shares of our common stock then being issued or (ii) if such equity issuance relates to equity securities other than shares of our common stock, the maximum number of shares of our common stock determined in accordance with the Equity Security Factor.

Our common stock is subject to ownership and transfer restrictions intended to preserve our ability to use our net operating loss carryforwards and other tax attributes.

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FTAI Infrastructure common stockholders whose ownership violates the Ownership Restrictions at the time of the spin-off will not be required to sell their FTAI Infrastructure common stock, but may be prevented from acquiring more Corporation Securities.

The Ownership Restrictions will remain in effect until the earlier of (i) the date on which Section 382 of the Code is repealed, amended, or modified in such a way as to render the restrictions imposed by Section 382 of the Code no longer applicable to us or (ii) a determination by the board of directors that (1) an ownership change would not result in a substantial limitation on our ability to use our available net operating loss carryforwards and other tax attributes;

or (ii) a determination by the board of directors that (1) an ownership change would not result in a substantial limitation on our ability to use our available net operating loss carryforwards and other tax attributes;

(2) no significant value attributable to our available net operating loss carryforwards and other tax attributes would be preserved by continuing the transfer restrictions;

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Provisions of Delaware law, our certificate of incorporation and our bylaws, prevent or delay an acquisition of our company, which could decrease the market price of our common stock.

encourage prospective acquirers to negotiate with our board of directors rather than to attempt a hostile takeover.

Delaware law contains, and our certificate of incorporation and bylaws contain, provisions that are intended to deter coercive takeover practices and inadequate takeover bids by making such practices or bids unacceptably expensive to the raider and to encourage prospective acquirers to negotiate with our board of directors rather than to attempt a hostile takeover.

These provisions include, among others:

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Public stockholders who might desire to participate in these types of transactions may not have an opportunity to do so, even if the transaction is considered favorable to stockholders.

These anti-takeover provisions could substantially impede the ability of public stockholders to benefit from a change in control or a change in our management and board of directors and, as a result, may adversely affect the market price of our common stock and your ability to realize any potential change of control premium.

These anti-takeover provisions could substantially impede the ability of

public stockholders to benefit from a change in control or a change in our management and board of directors and, as a result, may adversely affect the market price of our common stock and your ability to realize any potential change of control premium.

Our bylaws contain exclusive forum provisions for certain claims, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.

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Additionally, our stockholders cannot waive compliance with the federal securities laws and the rules and regulations thereunder.

These provisions may limit our stockholders’ ability to bring a claim in a judicial forum they find favorable for disputes with us or our directors, officers or other employees, which may discourage lawsuits against us and our directors, officers and

other employees and agents.

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.

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The present United States federal income tax laws may be modified, possibly with retroactive effect, by legislative, judicial, or administrative action at any time, which could affect the United States federal income tax treatment of us or an investment in our common stock.

The United States federal income tax rules are constantly under review by persons involved in the legislative process, the Internal Revenue Service, and the United States Treasury Department, which results in statutory changes as well as

frequent revisions to regulations and interpretations.

We cannot predict how changes in the tax laws might affect us and our stockholders.

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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-Q

Item 1A. Risk Factors