Suncrete, Inc. 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. Unless the context otherwise requires, all references in this section to the “Company,” “we,” “us,” or “our” refer to Suncrete, Inc. and its consolidated subsidiaries . The following discussion and analysis of our financial condition and results of operations provides information that our management believes is relevant to an assessment and understanding of our consolidated results of operations and financial condition. This discussion should be read in conjunction with our audited consolidated financial statements and notes thereto included in our Special Financial Report on Form 10-K for the fiscal year ended December 31, 2025 and in our unaudited condensed consolidated financial statements and notes thereto, included elsewhere in this Quarterly Report on Form 10-Q (the “Quarterly Report”). This Quarterly Report includes forward-looking statements based on our current assumptions, expectations and projections about future events that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors” or in other parts of this Quarterly Report. For more information on these and other factors, see “Cautionary Note Regarding Forward-Looking Statements” herein. Overview The Company was incorporated in Delaware on September 30, 2025. The Company was formed for the purpose of facilitating the consummation of the Business Combination (as defined below). We had no material operations during the three months ended March 31, 2026 other than efforts to consummate the Business Combination. Recent Developments Thunder Acquisition On October 17, 2025, Eagle Redi-Mix Concrete, LLC, our indirect wholly owned subsidiary (“Eagle Redi-Mix”), entered into an equity and asset purchase and contribution agreement (as amended on March 27, 2026, the “Equity and Asset Purchase and Contribution Agreement”) with SRM, Inc., an Oklahoma corporation (“Schwarz Ready Mix”), SRM Leasing, LLC, an Oklahoma limited liability company (“Schwarz Leasing”), Schwarz Sand, LLC, an Oklahoma limited liability company (“Schwarz Sand”), and the other selling parties named therein and Schwarz Ready Mix, in its capacity as a representative of the selling parties. Pursuant to the Equity and Asset Purchase and Contribution Agreement, Eagle Redi-Mix acquired substantially all of the assets of Schwarz Ready Mix and Schwarz Leasing and all of the issued and outstanding equity interests of Schwarz Sand (collectively, the “Thunder Acquisition”). The aggregate purchase price included $97.0 million in cash consideration ($74.3 million paid at closing and $22.7 million deferred until June 30, 2026) and 20,000,000 Preferred Units of Concrete Partners Holding, LLC (“CPH”) issued to the sellers as rollover equity. Hope Acquisition On April 28, 2026, two of our subsidiaries, Concrete Partners, LLC, a Delaware limited liability company, and Suncrete Intermediate, Inc., our newly formed subsidiary (“Purchaser Holdco”), entered into a Membership Interest Purchase Agreement (the “Hope Purchase Agreement”) and related agreements with the owners (the “Sellers”) of Hope Concrete, LLC, a Texas limited liability company (“Hope”), to acquire 100% of the ownership interests of Hope and its subsidiaries, Lafayette Concrete Division LLC, a Louisiana limited liability company, and Baton Rouge Concrete Division LLC, a Louisiana limited liability company (collectively with Hope, the “Hope Companies”). The Hope Companies are in the business of concrete manufacturing, concrete production, concrete sales, and trucking of concrete, sand, rock, cement, and fly ash. On April 28, 2026, we completed the acquisition of the Hope Companies (the “Hope Acquisition”). 11 Table of Contents After giving effect to the transactions contemplated by the Hope Purchase Agreement, the aggregate consideration consisted of (i) 220,007 shares of our Class A Common Stock issued to one of the Sellers, (ii) 69,511 shares of Class B common stock, par value $0.0001 per share, of Purchaser Holdco issued to one of the Sellers (the “Holdco Rollover Securities”) and (iii) a net closing cash payment of $39.4 million, subject to certain adjustments as set forth in the Hope Purchase Agreement, with respect to the purchased units sold by the other Sellers. In addition, we paid $27.4 million to satisfy the debt obligations of Hope. The Holdco Rollover Securities issued by Purchaser Holdco are nonvoting, have no dividend or liquidation rights and are exchangeable for an aggregate of 695,110 shares of Class A Common Stock on the terms and subject to the conditions set forth in an Exchange Agreement, dated April 28, 2026, by and among the Company, Purchaser Holdco and Foley Bros., LLC, a Texas limited liability company. Southern Louisiana Acquisition On April 29, 2026, we acquired a ready-mix concrete company in Southern Louisiana for aggregate consideration consisting of (i) $31.0 million in cash at closing, (ii) 259,291 shares of Class A Common Stock issued to the sellers at closing and (iii) an earnout payment of up to $10.0 million, to be paid by us, if at all, in cash or Class A Common Stock, at our option and subject to certain limitations, based upon the acquired company’s achievement of specified performance criteria over a five-year post-closing performance period. The earnout is payable, if at all, in cash or Class A Common Stock, at the Company’s election, with the number of shares of Class A Common Stock issuable based upon the average closing price per share of the Class A Common Stock on The Nasdaq Global Market (“Nasdaq”) for the 30 consecutive trading days preceding the end of the earnout period; provided that in no event will the Company issue shares of Class A Common Stock if the issuance would exceed (a) the aggregate number of shares of Class A Common Stock that the Company may issue in compliance with the rules and regulations of Nasdaq or (b) 9.99% of the issued and outstanding shares of Class A Common Stock. Nelson Bros. Acquisition On May 6, 2026, we, through Hope, entered into a Membership Interest Purchase Agreement (the “Nelson Purchase Agreement”) and related agreements with the owners of Nelson Bros. Ready Mix, LLC, a Texas limited liability company (the “Nelson Bros”), to acquire 100% of the ownership interests of Nelson Bros and its subsidiary, R & R Trucking LLC, a Texas limited liability company (collectively with the Nelson Bros., the “Nelson Acquired Companies”). The Nelson Acquired Companies are in the business of concrete manufacturing, concrete production, concrete sales, and trucking for their concrete operations (including trucking of concrete, sand, rock, cement, and fly ash for use in concrete manufacturing and production). On May 6, 2026, we completed the acquisition of the Nelson Acquired Companies pursuant to the Nelson Purchase Agreement (the “Nelson Acquisition”). The owners of the Nelson Acquired Companies who are also parties to the Nelson Purchase Agreement, were Randell R. Owens, Ronda A. Owens, JAO, LLC, a Texas limited liability company (“JAO”), and Owens Regional Investments, LLC, a Texas limited liability company (“Owens Regional,” and collectively, with Mr. Owens, Ms. Owens and JAO, the “Nelson Sellers”), and Jacob Owens in his capacity as representative of the Nelson Sellers. The aggregate consideration for the Nelson Acquisition consisted of (i) 1,296,456 shares of Class A Common Stock issued to the Nelson Sellers and (ii) $42.3 million net cash payment at closing paid to the Nelson Sellers. In addition, the Nelson Sellers will be eligible to receive a contingent earnout payment of up to $18.0 million based on the achievement of a specified trailing twelve-month materials spread target by the Nelson Acquired Companies, measured as of the end of any full calendar quarter ending during the five-year period following the closing of the Nelson Acquisition, with Hope having the option to satisfy up to 50% of any such earnout payment by issuing shares of our Class A Common Stock in lieu of cash (the “Nelson Earnout Stock Consideration”) at a future average closing stock price, subject to applicable Nasdaq listing rules and other limitations on the issuance of Nelson Earnout Stock Consideration, with the number of shares of Class A Common Stock issuable based upon the average closing price per share of the Class A Common Stock on Nasdaq for the 30 consecutive trading days preceding the end of the earnout period; provided that in no event will the Company issue shares of Class A Common Stock if the issuance would exceed (a) the aggregate number of shares of Class A Common Stock that the Company may issue in compliance with the rules and regulations of Nasdaq or (b) 9.99% of the issued and outstanding shares of Class A Common Stock. 12 Table of Contents Business Combination with Haymaker On April 8, 2026 (the “Closing Date”), we consummated our previously announced business combination pursuant to that certain Business Combination Agreement, dated October 9, 2025 (the “Business Combination Agreement”), by and among the Company, Haymaker Acquisition Corp. 4 (“Haymaker”), CPH, Haymaker Merger Sub I, Inc., a Delaware corporation and a direct wholly owned subsidiary of the Company (“Merger Sub I”), and Haymaker Merger Sub II, LLC, a Delaware limited liability company and direct wholly owned subsidiary of the Company (“Merger Sub II”). Pursuant to the Business Combination Agreement, the Business Combination was effected on the Closing Date in several steps: (a) Haymaker transferred by way of continuation out of its jurisdiction of incorporation from the Cayman Islands and domesticated into the State of Delaware in accordance with Section 388 of the Delaware General Corporation Law, as amended, and the Companies Act (As Revised) of the Cayman Islands (the “Domestication”), (b) immediately following the Domestication, Merger Sub I merged with and into Haymaker (the “Initial Merger”), with Haymaker surviving the Initial Merger as a wholly owned subsidiary of the Company; and (c) immediately following the Initial Merger, Merger Sub II merged with and into CPH (the “Acquisition Merger,” and together with the Initial Merger, the Domestication, and all other transactions contemplated by the Business Combination Agreement, the “Business Combination”), with CPH surviving the Acquisition Merger as a wholly owned subsidiary of the Company. Prior to the closing of the Initial Merger, we issued an aggregate of 26,000 shares of our Series A Convertible Perpetual Preferred Stock, par value $0.0001 per share, which was initially convertible into an aggregate of 1,444,445 shares of our Class A Common Stock, in exchange for all of the outstanding Senior Preferred Units of CPH. The Business Combination was accounted for as a reverse recapitalization in accordance with generally accepted accounting principles in the United States (“GAAP”). Under this method of accounting, although Haymaker acquired all of our outstanding equity interests in the Business Combination, CPH will be treated as the accounting acquirer for financial reporting purposes. Accordingly, the Business Combination will be reflected as the equivalent of CPH issuing shares for the net assets of Haymaker, followed by a recapitalization whereby no goodwill or other intangible assets are recorded. Operations prior to the Business Combination will be those of CPH in reports covering periods following the Business Combination. Credit Agreement Amendments We are party to a credit agreement (the “Credit Agreement”) with Bank of America, N.A., as administrative agent and certain lenders party thereto. On October 17, 2025, in connection with the Thunder Acquisition, we amended the Credit Agreement to increase our five-year $130.0 million term loan agreement by $75.0 million (the “Term Loan Facility”) and our $25 million revolving credit facility by $10.0 million (the “Revolving Credit Facility”). On March 25, 2026, we entered into that certain Consent and Second Amendment to Credit Agreement and First Amendment to Security and Pledge Agreement to, among other things, permit the consummation of the Business Combination and giving effect to the closing of the Business Combination, to add us and Haymaker as guarantors under the Credit Agreement. On April 7, 2026, we and, giving effect to the closing of the Business Combination, CPH and Haymaker, entered into that certain Limited Consent and Third Amendment to Credit Agreement to, among other things, permit the forward purchase agreement entered into in connection with the Business Combination. On April 28, 2026, we entered into that certain Limited Consent and Fourth Amendment to Credit Agreement (the “Fourth Amendment,” and the Credit Agreement, as amended through the date of the Fourth Amendment, the “Amended Credit Agreement”) to, among other things, permit the consummation of certain acquisitions, including the joinder to the Amended Credit Agreement of Purchaser Holdco, a subsidiary formed in connection with the Hope Acquisition. Equipment Loan On December 30, 2025, we entered into a five-year $4.8 million equipment security note (“Equipment Loan”). The Equipment Loan is a part of a master agreement that permits multiple equipment notes under the master agreement. Liquidity and Capital Resources For the three months ended March 31, 2026, we reported a net loss of $31,000. As of March 31, 2026 and December 31, 2025, we had an aggregate cash of $0 and a working capital deficit of $62,519 and $31,519, respectively. On the Closing Date, we announced the closing of our previously announced Business Combination. As of this filing, substantial doubt about our ability to continue as a going concern was alleviated due to the closing of the Business Combination. 13 Table of Contents Off-Balance Sheet Financing Arrangements We had no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of March 31, 2026. Contractual Obligations As of March 31, 2026, we did not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities. Critical Accounting Estimates and Policies The preparation of unaudited condensed financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the unaudited condensed financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following critical accounting policies which involve a higher degree of judgment and complexity in making certain estimates and assumptions that affect amounts reported in our consolidated financial statements, as summarized below. Cash and Cash Equivalents We consider all short-term investments with an original maturity date of three months or less when purchased to be cash equivalents. The Company did not have any cash or cash equivalents as of March 31, 2026. Net Loss Per Share Net loss per share is computed by dividing net loss by the weighted average number of shares outstanding for the period. For purposes of calculating diluted loss per share, the denominator includes both the weighted average number of shares outstanding during the period and the number of common share equivalents if the inclusion of such common share equivalents is dilutive. Recent Accounting Standards Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements. Emerging Growth Company Status We are an emerging growth company under the Jumpstart Our Business Startups Act (the “JOBS Act”). The JOBS Act provides that an emerging growth company can delay adopting new or revised accounting standards until such a time as those standards apply to private companies. Subject to certain conditions set forth in the JOBS Act, if, as an “emerging growth company”, we choose to rely on such exemptions, we may not be required to, among other things, (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis), (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the Chief Executive Officer’s compensation to median employee compensation or (v) comply with any new or revised financial accounting standards that have different effective dates for public and private companies until those standards would otherwise apply to private companies. We will remain an emerging growth company until the earliest to occur of (a) the fifth anniversary of the date of our first sale of common equity securities pursuant to an effective registration statement; (b) the last day of the fiscal year in which we have total annual gross revenue of at least $1.235 billion, adjusted yearly for inflation; (c) the date on which we are deemed to be a “large accelerated filer,” as defined in the Exchange Act; and (d) the date on which we have issued more than $1 billion in non-convertible debt over a three-year period. We have elected to take advantage of certain of the reduced disclosure obligations and may 14 Table of Contents elect to take advantage of other reduced reporting requirements in our future filings with the Securities and Exchange Commission (the “SEC”). As a result, the information that we provide to holders of our stockholders may be different than what you might receive from other public reporting companies in which you hold equity interests. We have elected to avail ourselves of the provision of the JOBS Act that permits emerging growth companies to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies. As a result, we will not be subject to new or revised accounting standards at the same time as other public companies that are not emerging growth companies. Item 3. Quantitative and Qualitative Disclosures About Market Risk. As of March 31, 2026, we had no material exposure to market risk.