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Demand for our services is cyclical and vulnerable to economic downturns affecting the industries we serve.
−Removed: Demand for our services has been, and will likely continue to be, cyclical in nature and vulnerable to downturns in the general economy, as well as in the construction industry and the housing market.
+Added: Demand for our services has been, and will likely continue to be, cyclical in nature and vulnerable to downturns in the construction industry, the housing market, and other industries in which our end customers operate.
Many of our customers depend on the availability of credit to purchase our services or electrical and mechanical products.
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General concerns about the fundamental soundness of the economy may cause customers to defer projects, even if they have credit available to them.
−Removed: Prolonged uncertainties in the credit market, or the return of constrained credit market conditions, including the impact of rising interest rates on the housing markets, could have adverse effects on our customers, which would adversely affect our financial condition and results of operations.
+Added: Prolonged uncertainties in the credit market, or the return of constrained credit market conditions, including the impact of interest rates in the housing markets, could adversely affect demand, which would have adverse effects on our financial condition and results of operations.
+Added: We could be adversely impacted by changes in general economic conditions, including the effects of inflation, supply chain constraints, and an economic downturn or recession.
+Added: Our business and the industries in which we operate are vulnerable to changing macroeconomic conditions, including supply chain constraints, high rates of inflation, changes in consumer sentiment, elevated interest rates, and market disruptions resulting from a number of factors, including geo-political events such as the Ukraine-Russia war, the conflict in the Middle East, and trade tensions between the U.S.
+Added: These and other market factors have negatively impacted, and may continue to negatively impact, our revenues and our cost for labor, materials, utilities, and other goods and services as well as our ability to collect on our outstanding receivables, to the extent our customers are affected by the same negative conditions.
+Added: Further, if the U.S.
+Added: economy experiences a downturn or recession, our customers may be unable to obtain financing for new projects, or they may decide to delay or cancel projects even if they have credit available to them.
+Added: As a result, these conditions have had, and they or any similar future conditions may continue to have, adverse impacts on our business, financial condition and results of operations.
The highly competitive nature of our industries could affect our profitability by reducing our revenues or profit margins.
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The cost of fuel, labor and materials, including copper wire or other commodities, may vary significantly from the costs we originally estimate.
−Removed: Variations from estimated contract costs along with other risks inherent in performing fixed price contracts, including our ability to successfully manage projects, may result in actual revenue and gross profits for a project differing from those we originally estimated and could result in losses on projects.
+Added: Variations from estimated contract costs along with other risks inherent in performing fixed price contracts, including our ability to successfully manage and execute projects, have in the past resulted in, and may in the future result in, actual revenue and gross profits for a project differing from those we originally estimated and could result in losses on projects.
Depending upon the size of a particular project, variations from estimated contract costs can have a significant impact on our operating results.
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Some of our materials have been and may continue to be subject to sudden and significant price increases, and continued high demand and low supply for those resources may lead to additional price increases.
−Removed: We are also exposed to volatility in energy prices, particularly as they relate to fuel prices for our fleet vehicles.
Depending on competitive pressures and the fixed price nature of many of our contracts, we may not be able to pass on these cost increases to our customers, which would reduce our gross profit margins and, in turn, make it more difficult for us to maintain our profitability.
−Removed: We have a work force of over 8,000 employees, and our labor costs may fluctuate based on availability of and demand for workers as well as other labor related risks, including risks related to collective bargaining agreements, benefits arrangements, wage and hour claims and other compensation arrangements.
+Added: We have a work force of over 9,000 employees, and our labor costs may fluctuate based on availability of and demand for workers as well as other labor related risks, including risks related to collective bargaining agreements, benefits arrangements, increased healthcare costs, wage and hour claims and other compensation arrangements.
A failure to secure new contracts may adversely affect our cash flows and financial results.
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Contract bidding and negotiations are affected by a number of factors, including our own cost structure and bidding policies.
−Removed: One customer represented approximately 12.0% of our consolidated revenue in fiscal 2023, and we have certain other customers that are also significant to our individual operating segments.
−Removed: It is not possible for us to predict the future level of demand for our services by these customers, and if one or more of them were to significantly delay, reduce or curtail activity, or stop accepting bids from us, it could have a material impact on our operating results.
−Removed: In addition, our ability to secure new contracts depends on our ability to maintain all required electrical, construction, mechanical and business licenses.
−Removed: If we fail to successfully transfer, renew or obtain such licenses where applicable, we
−Removed: may be unable to compete for new business.
The failure to bid and be awarded projects, cancellations of projects or delays in project start dates could affect our ability to deploy our assets profitably.
+Added: In addition, our ability to secure new contracts depends on our ability to maintain all required electrical, construction, mechanical and business licenses.
+Added: If we fail to successfully transfer, renew or obtain such licenses where applicable, we may be unable to compete for new business.
Further, when we are awarded contracts, we face additional risks that could affect whether, or when, work will begin.
We could experience a decrease in profitability if we are unable to replace canceled, completed or expired contracts with new work.
+Added: We derive a meaningful portion of our revenues from a small number of customers, and the loss of one or more of these customers could adversely affect our revenues, results of operations, and financial condition.
+Added: We have one customer that represented approximately 12.0% of our consolidated revenue in fiscal 2024, and there are other customers that are significant to our individual operating segments.
+Added: Although we have long-standing relationships with some of these significant customers, it is not possible for us to predict the future level of demand for our services by these customers, and if one or more of them were to significantly delay, reduce or curtail activity, or stop accepting bids from us, it could have a material impact on our operating results.
+Added: We rely on third parties, including subcontractors and suppliers, in connection with many of our projects and a failure to retain subcontractors or obtain supplies, or increased costs as a result of using these third parties, could adversely impact our revenues, results of operations, and financial condition.
+Added: We hire third-party subcontractors to perform work on certain of our projects, and if we are unable to retain qualified subcontractors or if our subcontractors do not perform in accordance with their obligations, we have in the past incurred, and may in the future incur, additional costs or experience delays in project execution, which could subject us to contractual penalties.
+Added: We also rely on suppliers for the materials necessary to complete our projects, and if a supplier fails to provide supplies when scheduled or at a higher than price than expected, project delays and additional costs could have an adverse effect on our operating results.
Our inability to carry out plans and strategies as expected, including our inability to identify and complete acquisitions and investments that meet our investment criteria in furtherance of our corporate strategy or the subsequent underperformance of those acquisitions and investments, may adversely impact our future growth and profitability.
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Alternatively, our failure to diversify from existing markets may limit our future growth.
−Removed: In addition, we have made, and may continue to make, strategic investments in debt or equity securities of publicly traded and privately held companies, including early-stage companies and more established companies.
+Added: In addition, we have made, and may continue to make, investments in debt or equity securities of publicly traded and privately held companies, including early-stage companies and more established companies.
We are subject to risks associated with these investments.
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Customers often have no obligation under our contracts to assign or release work to us, and many contracts may be terminated on short notice.
−Removed: Reductions in backlog due to cancellation of one or more contracts by a customer or for other reasons could significantly reduce the revenue and profit we actually receive from contracts included in backlog.
+Added: Reductions in backlog due to cancellation of one or more contracts by a customer or for other reasons, or our failure to execute projects in backlog as expected, could significantly reduce the revenue and profit we actually receive from contracts included in backlog.
In the event of a project cancellation, we may be reimbursed for certain costs, but typically have no contractual right to the total revenues reflected in our backlog.
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The process of pursuing a claim may be lengthy, result in significant legal fees, and negatively impact our relationships with customers.
+Added: In addition, our ability to recover on contract change orders could be negatively impacted by our customers' reduced access to capital in a weak economic environment, particularly in a period of restrictive credit markets.
Furthermore, we may be required to invest significant working capital to fund cost overruns while the resolution of a claim is pending, and our additional costs may not be recovered until the claim is resolved, if at all.
−Removed: When appropriate, we establish provisions against possible exposures, and we adjust these provisions from time to time, but our
−Removed: assumptions and estimates related to these exposures might prove to be inadequate or inaccurate.
+Added: When appropriate, we establish provisions against possible exposures, and we adjust these provisions from time to time, but our assumptions and estimates related to these exposures might prove to be inadequate or inaccurate.
Unfavorable resolution of these matters can result in a reduction of revenues and profit recognized in prior periods or the recognition of a loss, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.
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In addition, we may have warranty claims, costs pursuant to obligations to indemnify buyers after assets are sold, or other unexpected liabilities from closed facilities beyond the closing date, and if we dispose of a segment or business, we may continue to be subject to certain prior liabilities of that business after its disposition and may not be able to negotiate for limitations on those liabilities, all of which could adversely impact our financial returns.
−Removed: The COVID-19 pandemic has adversely impacted our business, and this pandemic, along with other potential public health emergencies, could have a future materially adverse impact on our business, including our financial condition, cash flows and results of operations.
−Removed: The COVID-19 pandemic and its impact on markets, the supply chain, and availability of labor has had a number of adverse impacts on our results of operations, and it continues to influence trends affecting our business.
−Removed: Although supply of most raw materials normalized during fiscal 2023, we may continue to experience increased prices or longer delivery times for certain materials necessary for our projects.
−Removed: The impact of the COVID-19 pandemic or any future epidemics, pandemics or other public health emergencies on our business is difficult to predict, but adverse impacts could include the potential for job site closures or work stoppages, supply chain disruptions, delays in awarding new project bids, construction delays, reduced demand for our services, delays in our ability to collect from our customers, or illness of management or other employees.
+Added: Epidemics, pandemics, and other potential public health emergencies could have a future materially adverse impact on our business, including our financial condition, cash flows and results of operations.
+Added: Pandemics and other public health emergencies, such as the COVID-19 pandemic, have had adverse impacts on our results of operations in the past.
+Added: The impact of future epidemics, pandemics or other public health emergencies on our business is difficult to predict, but adverse impacts could include the potential for job site closures or work stoppages, supply chain disruptions, delays in
+Added: awarding new project bids, construction delays, reduced demand for our services, delays in our ability to collect from our customers, or illness of management or other employees.
The availability and cost of surety bonds affect our ability to enter into new contracts and our margins on those engagements.
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Adverse weather conditions, including rain, heat, ice, cold or snow, may not only delay our work and contribute to project inefficiency, but may negatively impact our schedules and profitability by delaying the work of other trades on a construction site.
−Removed: Extreme weather conditions (such as hurricanes or other storms, droughts, extreme heat or cold, wildfires and floods) may limit the availability of resources, increase our costs, damage property, disrupt our workforce, or may cause projects to be cancelled.
−Removed: As we have expanded our operations in coastal areas, particularly Florida, these risks have increased.
+Added: Extreme weather conditions (such as hurricanes or other storms, droughts, extreme heat or cold, wildfires and floods) have from time to time had, and may in the future have, a negative impact on our business, including by limiting the availability of resources, increasing our costs, damaging property, disrupting our workforce, or causing projects to be delayed or cancelled.
+Added: A portion of our business operates in certain geographic areas, such as Texas and Florida, where these risks are elevated.
+Added: If the cost of property insurance in those or other geographic areas increases, or if it becomes more difficult to obtain, it could have a negative impact on customer demand, particularly in our Residential segment.
To the extent climate change results in an increase in extreme weather events and adverse weather conditions, the likelihood of a negative impact on our results of operations may increase.
−Removed: Due to differing regional economic conditions, our results may fluctuate from period to period.
−Removed: Our quarterly results may also be affected by regional economic conditions that affect the construction market.
+Added: Our results may fluctuate from period to period due to cyclicality, regional economic conditions, or other factors.
+Added: Factors arising from the cyclicality of industries in which we operate, including the timing of new customer contracts, may result in significant fluctuations in our operating results on a quarterly or annual basis.
+Added: Our results from period to period may also be affected by regional economic conditions that affect the construction market.
In particular, a prolonged period of weak demand in the oil and gas industry or increased regulatory restrictions on the industry could dampen the housing market in certain regions, resulting in reduced demand for the services provided by our Residential segment.
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Industrial and rail customers may also be affected by volatility in oil prices.
−Removed: Accordingly, our performance in any particular quarter may not be indicative of the results that can be expected for any other quarter or for the entire year.
+Added: Accordingly, our performance in any particular quarter or year may not be indicative of the results that can be expected for any other quarter, for the entire year, or for any other year.
We may experience difficulties in managing our billings and collections.
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These hazards can cause personal injury and loss of life, severe damage to or destruction of property and equipment, and suspension of operations.
−Removed: While we have taken what we believe are appropriate precautions to minimize safety risks, we have experienced serious accidents in the past and may experience additional accidents in the future.
+Added: While we have invested significant efforts in our safety programs in an effort to minimize safety risks, we have experienced serious accidents in the past and may experience additional accidents in the future.
Serious accidents may subject us to penalties, civil litigation or criminal prosecution.
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Our third-party insurance is subject to deductibles for which we establish reserves.
−Removed: No assurance can be given that our insurance or our provisions for incurred claims and incurred but not reported claims will be adequate to cover all losses or liabilities we may incur in our operations;
+Added: In addition, we maintain most of our employee health insurance coverage on a self-insured basis and are responsible for losses up to our stop loss coverage, which sets a limit on our liability for claim costs.
+Added: No assurance can be given that our insurance or our provisions for incurred claims and incurred but not reported claims will be adequate to cover all losses or liabilities we may incur in our operations, including employee health care costs, which have increased in recent years;
nor can we provide assurance that we will be able to maintain adequate insurance at reasonable rates.
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In addition, due to the inherent uncertainties of litigation, we cannot accurately predict the ultimate outcome of any such actions or proceedings, which could result in significant expense, damage to our reputation and diversion of management’s attention from our business.
−Removed: Latent defect litigation is normal for residential home builders in some parts of the country, as well as in certain areas of the commercial market.
−Removed: Any increases in our latent defect claims and litigation could place pressure on the profitability of the Residential and Commercial & Industrial segments of our business.
+Added: Latent defect litigation is normal for residential home builders in some parts of the country.
+Added: Any increases in our latent defect claims and litigation could place pressure on our profitability.
Regulatory requirements could result in significant compliance costs and liabilities.
We have operations throughout the United States and are subject to multiple state and local regulations.
−Removed: In addition, our segments, particularly our Commercial & Industrial segment, may be subject to federal laws and requirements applicable to government contractors.
+Added: In addition, our segments from time to time perform work as federal government subcontractors, or perform work on projects that have received federal government funding, and as a result may be subject to federal laws and requirements applicable to government contractors.
+Added: If we fail to comply with those requirements, we may be subject to fines, penalties or suspension from doing business with the federal government.
Our 131 locations are located in 27 states, which exposes us to a variety of different state and local laws and regulations, including those pertaining to electrical contractor and other licensing requirements.
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Changes in law, regulations or requirements, or a material failure to comply with any of them, could increase our costs and have other negative impacts on our business by, among other things, increasing costs, harming our reputation and, in some instances, causing us to be in violation of our contractual obligations.
+Added: In addition, we are required to maintain certain electrical, construction, mechanical and business licenses.
+Added: If we fail to successfully transfer, renew or obtain such licenses where applicable, we may experience increased costs and other negative impacts on our business.
Disruptions to the proper functioning of our information technology systems or security breaches of our critical data, sensitive information or information technology systems could disrupt operations and cause increases in costs, decreases in revenues and/or harm to our reputation.
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We also collect and retain information about our customers, stockholders, vendors, and employees, with the expectation by such third parties being that we will adequately protect such information.
−Removed: Although our information technology systems, networks and infrastructure are protected through our policies, procedures and physical and software safeguards, our information technology environment is still vulnerable to natural disasters, power losses, telecommunication failures, deliberate intrusions, inadvertent user misuse or error, computer viruses, malicious code, ransomware attacks, acts of terrorism and other cyber security risks, which could cause a loss of critical data, or release of sensitive information.
+Added: Although our information technology systems, networks and infrastructure are protected through our policies, procedures and physical and software safeguards, our information technology environment is still vulnerable to natural disasters, power losses, telecommunication failures, deliberate intrusions, inadvertent user misuse or error, computer viruses, malicious code, ransomware
+Added: attacks, acts of terrorism and other cyber security risks, which could cause a loss of critical data, or release of sensitive information.
If critical information systems fail or are otherwise unavailable, or if sensitive information is released, we could experience reputational harm, loss of customers and revenue, loss of proprietary data, regulatory actions and scrutiny, statutory penalties, and litigation.
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In addition, if we do not comply with these laws and regulations, we could be subject to material administrative, civil or criminal penalties, or other substantial liabilities.
−Removed: Compliance with future changes in environmental laws and regulations, including those relating to climate change, could require significant expenditures.
+Added: Compliance with current and future environmental laws and regulations, including those relating to climate change, could adversely impact our business.
Increasing concerns about climate change and other environmental issues may result in additional environmental regulations and restrictions, and we cannot predict the nature, scope or effect of legislation or regulatory requirements that could be imposed, or how existing or future laws or regulations will be administered or interpreted.
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As a service organization, relationships with significant customers can be dependent on certain employees within our organization, and our ability to meet our contractual obligations to our customers and support our growth strategy may be limited by our ability to retain and train necessary personnel.
−Removed: We cannot guarantee that any member of management at the corporate or operating segment level will continue in their capacity for any particular period of time, and there is significant
−Removed: competition in our industry for managerial personnel.
+Added: We cannot guarantee that any member of management at the corporate or operating segment level will continue in their capacity for any particular period of time, and there is significant competition in our industry for managerial personnel.
We have a severance plan in place that covers certain of our senior leaders;
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Risks Relating to our Financial Results, Financing and Liquidity
−Removed: Negative conditions in the credit and capital markets may adversely impact our ability to operate our business.
−Removed: In the past, the level of demand from our customers for our services has been adversely impacted by slowdowns in our customers' industries as well as in the economy in general.
+Added: The impact on our customers of negative conditions in the credit and capital markets may adversely affect our business.
A number of economic factors, including financing conditions for our customers' industries, have, in the past, adversely affected our customers and their ability or willingness to fund expenditures.
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Any such deferrals would inhibit our growth and would adversely affect our results of operations.
−Removed: In a weak economic environment, particularly in a period of restrictive credit markets, we may experience greater difficulties in collecting payments from, and negotiating change orders and/or claims with, our customers due to, among other reasons, a diminution in our ultimate customers’ access to the credit markets.
−Removed: If clients delay in paying or fail to pay a significant amount of our outstanding receivables, or we fail to successfully negotiate a significant portion of our change orders and/or claims with customers, it could have an adverse effect on our liquidity, results of operations, and financial position.
−Removed: We have adopted tax positions that a taxing authority may view differently.
−Removed: If a taxing authority differs with our tax positions, our results may be adversely affected.
−Removed: Our effective tax rate and cash paid for taxes are impacted by the tax positions that we have adopted.
−Removed: Taxing authorities may not always agree with the positions we have taken.
−Removed: We have established reserves for tax positions that we have determined to be less than likely to be sustained by taxing authorities.
−Removed: However, there can be no assurance that our results of operations will not be adversely affected in the event that disagreement over our tax positions does arise.
+Added: In a weak economic environment, particularly in a period of restrictive credit markets, we may experience greater difficulties in collecting payments from our customers due to, among other reasons, a diminution in our ultimate customers’ access to the credit markets.
+Added: If clients delay in paying or fail to pay a significant amount of our outstanding receivables, it could have an adverse effect on our liquidity, results of operations, and financial position.
To fund our working capital requirements, complete acquisitions and service any debt we may incur, we may require a significant amount of cash.
−Removed: Our ability to generate cash depends on many factors that are beyond our control.
−Removed: Our ability to continue to grow our business, including through acquisitions and the funding of working capital requirements, as well as our ability to make payments on or refinance any indebtedness we may incur, will depend on our ability to generate cash in the future.
−Removed: This is subject to our operational performance, as well as general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control.
−Removed: We cannot provide assurance that our business will generate sufficient cash flow from operations or asset sales or that future borrowings will be available to us under our credit facility in an amount sufficient to enable us to complete acquisitions, to service any debt we may incur or to fund our other liquidity needs.
+Added: Our ability to generate cash from operations or to access the capital markets for required funding depends on many factors that are beyond our control.
+Added: Our ability to continue to grow our business, including through acquisitions and the funding of working capital requirements, as well as our ability to make payments on or refinance any indebtedness we may incur, will depend on our ability to access capital markets and generate cash from operations in the future.
+Added: This is subject to our operational performance, as well as general economic, financial, capital market, competitive, legislative, regulatory and other factors that are beyond our control.
+Added: There can be no assurance that our business will generate sufficient cash flow from operations or asset sales, or have access to sources of cash from the capital markets or from borrowings under our credit facility, in amounts sufficient to enable us to complete acquisitions, to service any debt we may incur or to fund our other liquidity needs.
We may need to refinance our credit facility on or before maturity.
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Our inability to access capital on commercially reasonable terms could have a material adverse effect on our business.
+Added: Changes in tax positions or changes in tax laws may adversely affect our results.
+Added: Our effective tax rate and cash paid for taxes are impacted by the tax positions that we have adopted.
+Added: Taxing authorities may not always agree with the positions we have taken.
+Added: We have established reserves for tax positions that we have determined to be less than likely to be sustained by taxing authorities.
+Added: However, there can be no assurance that our results of operations will not be adversely affected in the event that disagreement over our tax positions does arise.
+Added: Additionally, new tax laws or changes in existing interpretation and guidance could affect our provision for income taxes, deferred tax assets and liabilities, and reserves for uncertain tax positions, potentially resulting in an increase to our effective tax rate, which could adversely affect our results.
We have restrictions and covenants under our credit agreement and the failure to meet these covenants, including liquidity and other financial requirements, could result in a default under our credit agreement.
We may not be able to remain in compliance with the covenants in our credit agreement, including financial covenants which, among other things, require minimum levels of liquidity and require us to maintain a specified fixed charge coverage ratio as defined under our credit agreement.
−Removed: Other covenants, among other things, limit our ability to provide liens, restrict fundamental changes, limit transactions with affiliates and subsidiaries, restrict changes to our organization documents, limit asset dispositions, limit investments,
−Removed: limit the ability to incur debt, restrict certain payments to shareholders, limit our ability to repurchase our stock, and limit the ability to change the nature of our business.
+Added: Other covenants, among other things, limit our ability to provide liens, restrict fundamental changes, limit transactions with affiliates and subsidiaries, restrict changes to our organization documents, limit asset dispositions, limit investments, limit the ability to incur debt, restrict certain payments to shareholders, limit our ability to repurchase our stock, and limit the ability to change the nature of our business.
A failure to fulfill the terms and requirements of our credit agreement may result in a default under our credit agreement and acceleration of any indebtedness we may incur, as well as a default under one or more of our material agreements, any of which could have a material adverse effect on our ability to conduct our operations and our financial condition.
−Removed: Our use of percentage-of-completion accounting could result in a reduction or elimination of previously reported profits, and we may be adversely impacted by new accounting, control and operating procedures.
+Added: The preparation of our financial statements requires management to make certain estimates and assumptions that may differ from actual results, and we may be adversely impacted by new accounting, control and operating procedures.
+Added: GAAP accounting requires that a number of estimates and assumptions are made by management that affect the amounts reported in the financial statements.
+Added: These estimates and assumptions must be made because certain information that is used in the preparation of our financial statements is either dependent on future events or cannot be calculated precisely from available data and, accordingly, requires the use of management’s judgment.
+Added: Estimates and assumptions are used in, among other areas, our assessment of revenue
+Added: recognition of construction in progress, fair value assumptions in accounting for business combinations, stock-based compensation, reserves for legal matters, and realizability of deferred tax assets and unrecognized tax benefits.
+Added: Actual results could differ from those estimates and assumptions, and such differences may be material to our financial statements.
+Added: In addition, we may be adversely impacted by new accounting pronouncements which change our revenue recognition or other accounting practices or otherwise alter how we report our financial results, or which require that we change our control and operating procedures, which we may be unable to do in a timely manner.
+Added: Our use of percentage-of-completion accounting could result in a reduction or elimination of previously reported profits.
A significant portion of our revenue is recognized using the percentage-of-completion method of accounting, utilizing the cost-to-cost method, which results in our recognizing contract revenues and earnings ratably over the contract term in proportion to contract costs incurred.
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Although we have historically made reasonably reliable estimates of the progress towards completion of our construction contracts, the uncertainties inherent in the estimating process make it possible for actual costs to vary materially from estimates, including reductions or reversals of previously recorded revenues and profits.
−Removed: In addition, we may be adversely impacted by new accounting pronouncements which change our revenue recognition or other accounting practices or otherwise alter how we report our financial results, or which require that we change our control and operating procedures, which we may be unable to do in a timely manner.
Our reported operating results could be adversely affected as a result of goodwill impairment charges.
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A majority of our outstanding common stock is owned by Tontine, and Jeffrey Gendell, founder and managing member of Tontine, serves as our Chief Executive Officer and as Chairman of our Board of Directors.
−Removed: Tontine owns approximately 58 percent of the Company’s outstanding common stock based on Amendment No.
−Removed: 27 to the Schedule 13D filed by Tontine with the SEC on September 8, 2023, and the Company's shares outstanding as of November 30, 2023.
+Added: Tontine owns approximately 55 percent of the Company’s outstanding common stock based on a Form 4 filed by Tontine with the SEC on September 16, 2024, and the Company's shares outstanding as of November 18, 2024.
As a result, Tontine can control most of our affairs, including the election of our directors, who in turn appoint executive management and can control most actions requiring the approval of shareholders, including the adoption of amendments to our corporate charter and approval of any potential merger or sale of all or substantially all of the Company's assets or business segments or the Company itself.
This control also gives Tontine the ability to bring matters to a shareholder vote that may not be in the best interest of our other shareholders or stakeholders.
+Added: The concentration of ownership may also have the effect of discouraging a change in control transaction, which could prevent other shareholders from selling their shares in the Company at a premium as part of such transaction.
Additionally, Tontine is in the business of investing in companies and may, from time to time, acquire and hold interests in businesses that compete directly or indirectly with us or act as suppliers or customers of the Company.
−Removed: Pursuant to a resale shelf registration statement filed by the Company, Tontine has the ability to resell any or all of its registered shares from time to time in one or more offerings as long as the registration statement remains effective and the Company remains eligible to use it, as described further in the registration statement and in any prospectus supplement filed in connection with an offering pursuant to the shelf registration statement.
−Removed: Tontine’s sale of all or any portion of its shares could result in a change of control of the Company, which would trigger the change of control provisions in a number of our material agreements, including our credit agreement, bonding agreements with our sureties, and our executive severance plan.
+Added: Most of Tontine's shares are registered for resale on a resale shelf registration statement filed by the Company with the SEC.
+Added: Pursuant to such resale shelf registration statement, Tontine has the ability to resell any or all of its registered shares from time to time in one or more offerings as long as the registration statement remains effective and the Company remains eligible to use it, as described further in the registration statement and in any prospectus supplement filed in connection with an offering pursuant to the shelf registration statement.
+Added: Tontine’s sale of all or a significant portion of its shares could result in a change of control of the Company, which may trigger the change of control provisions in a number of our material agreements, including our credit agreement, bonding agreements with our sureties, and our executive severance plan.
Our common stock has less liquidity than many other stocks listed on the Nasdaq Global Market.
Historically, the trading volume of our common stock has been relatively low when compared to other companies listed on the Nasdaq Global Market or other stock exchanges.
−Removed: While we have experienced increased liquidity in our stock during recent years compared with historical levels, we cannot say with certainty that a more active and liquid trading market for our common stock will continue to develop.
+Added: While we have experienced increased liquidity in our stock during recent years compared with historical levels, we cannot say with certainty that a more active and liquid trading market for our common stock will continue to
Because of this, it may be more difficult for shareholders to sell a substantial number of shares for the same price at which shareholders could sell a smaller number of shares.
+Added: In addition, our historically lower liquidity has in the past contributed to increased volatility in the price of our common stock.
+Added: This lower liquidity, along with the other risk factors discussed herein, may impact our stock price in the future.
We may issue additional shares of common stock, preferred stock or convertible securities that will dilute the percentage ownership interest of existing stockholders and may dilute the book value per share of our common stock.
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As of September 30, 2024, we had the ability to issue 581,169 shares of common stock, including upon the exercise of options, as future grants under our existing equity compensation plans.
−Removed: Although we currently do not have any intention of issuing additional common stock (other than pursuant to our equity compensation plans) or preferred stock, we may do so in the future in order to meet our capital needs.
+Added: Although we currently do not have any intention of issuing additional common stock (other than pursuant to our equity compensation plans) or preferred stock, we may do so in the future as consideration for certain acquisitions and in order to meet our capital needs.
Subject to applicable Nasdaq Listing Rules, our Board of Directors generally has the authority, without action by or vote of the stockholders, to issue all or part of any authorized but unissued shares of common stock or preferred stock for any corporate purpose.
2 unchanged sentences
Substantial sales of our common stock could adversely affect our stock price.
−Removed: Most of Tontine's shares are registered for resale on a resale shelf registration statement filed by the Company with the SEC.
Sales of a substantial number of shares of our common stock by holders of our common stock, including Tontine, or the perception that such sales could occur, could adversely affect the market price of our common stock by introducing a large number of shares into the market.
10 unchanged sentences
The exclusive forum provision may increase the costs for a shareholder to bring a claim or limit a shareholder’s ability to bring a claim in a judicial forum that the shareholder finds favorable for disputes with us or our directors, officers, employees or shareholders in such capacity, which may discourage such lawsuits against us and such persons.
−Removed: Alternatively, if a court were to find these provisions of our bylaws inapplicable to, or unenforceable in respect of, the claims as to which they are intended to apply, then we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business, financial position or results of operations.
+Added: Alternatively, if a court were to find these provisions of our bylaws inapplicable to, or unenforceable in respect of, the claims as to which they are intended to apply, then we may incur additional costs associated with
+Added: resolving such matters in other jurisdictions, which could adversely affect our business, financial position or results of operations.
While the exclusive forum provision applies to state and federal law claims, our shareholders will not be deemed to have waived our compliance with, and the exclusive forum provision will not preclude or contract the scope of exclusive federal or concurrent jurisdiction for actions brought under, the federal securities laws, including the Exchange Act, or the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
11 unchanged sentences
Because of the inherent limitations in a control system, misstatements due to error could occur without being detected.
−Removed: Unresolved Staff Comments
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.