What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2026-04-14 compared with 2025-05-27 · 229 added, 171 removed, 761 unchanged (34% of the section changed)

33 unchanged sentences

The Company has continued to implement measures to improve the internal control structure.

Specifically, the Company has:

Hired a Chief Financial Officer with knowledge and experience in key financial reporting and internal control areas;

Actively pursuing hiring the hiring of additional finance and accounting personnel with adequate knowledge and experience in key financial reporting and internal control areas;

Designing and implementing new entity-level controls (“ELCs”) with greater alignment to the COSO 2013 Internal Controls Framework;

Developing a training program and educating control owners concerning the principles of the Internal Control – Integrated Framework (2013) issued by COSO;

Implementing a risk assessment process by which management identifies risks of misstatement related to all account balances;

Developing internal controls documentation, including comprehensive accounting policies and procedures over financial processes and related disclosures;

Enhancing policies and procedures to retain adequate documentary evidence for certain management review controls over certain business processes including precision of review and evidence of review procedures performed to demonstrate effective operation of such controls;

Engaging outside resources for complex accounting matters and drafting and retaining position papers for all complex, non-recurring transactions;

Developing monitoring activities and protocols that will allow us to timely assess the design and the operating effectiveness of controls over financial reporting and make necessary changes to the design of controls, if any

Segregating key functions within our financial and information technology processes supporting our internal controls over financial reporting;

Reassessing and formalizing the design of certain accounting and information technology policies relating to security and change management controls, including user access reviews, including assessing the need for implementing a more robust information technology system; and

Continuing to enhance and formalize our accounting, business operations, and information technology policies, procedures, and controls to achieve complete, accurate, and timely financial accounting, reporting and disclosures.

Specifically, the Company has taken steps to address the material weaknesses, including:

hiring, and continuing to hire, additional accounting and information technology personnel to establish effective processes and controls, including establishing appropriate segregation of duties,

developed formal accounting policies, procedures and controls related to the period-end financial reporting process including designing and maintaining controls over account reconciliations, journal entries, and financial reporting and disclosures;

enhanced information technology governance processes, including our program change management, computer operations, program development, and user access controls, enhancing role-based access, and implementing more robust information technology policies and procedures

While the Company believes that these efforts improved the internal control over financial reporting once implemented, these measures will require validation and testing of the design and operating effectiveness of internal controls over a sustained period of financial reporting cycles.

Changes in Internal Control over Financial Reporting

12 unchanged sentences

Richard Gerhardt

Stephanie Poe

Former Chief Financial Officer, Secretary, and Treasurer

Chief Financial Officer, Secretary, and Treasurer

The following is a brief summary of the background of each Director and executive officer of the Company:

44 unchanged sentences

Gerhardt has served as a member of the Board of Directors of the Company since 2016.

He is currently President of Sales Services International, Inc., a consulting firm, Chief Sales Officer for IMEX Global Solutions, Inc., a logistics company, since April 2020, and Corporate Development Officer of Palladin Consulting, LLC, a software services company, since May 2024, and is serving as a Fauquier County, Virginia Supervisor for the Cedar Run Magisterial District since 2016.

He is currently President of Sales Services International, Inc., a consulting firm, and previously served as Chief Sales Officer for IMEX Global Solutions, Inc., a logistics company, from April 2019 to April 2024, and Corporate Development Officer of Palladin Consulting, LLC, a software services company, from May 2024 to December 2025, and is serving as a Fauquier County, Virginia Supervisor for the Cedar Run Magisterial District since 2016.

From 2003 to 2014, Mr.

5 unchanged sentences

Gerhardt’s current and past business-related experience provides him with the knowledge and skills necessary to serve in the capacity as a director of the Company.

Stephanie Poe.

Former Chief Financial Officer, Secretary, and Treasurer.

Stephanie Poe served as Chief Financial Officer, Secretary, and Treasurer of the Company from January 2023 to July 17, 2024.

Prior to becoming the Chief Financial Officer, Secretary, and Treasurer, Ms.

Poe served as the Controller for the Company since January 2022 and the Accounting Manager for the Company since 2017.

Prior to joining the Company, Ms.

Poe worked at Ernst & Young as part of their tax practice.

Poe is a Certified Public Accountant and holds a Bachelor of Science degree in Accounting from Appalachian State University and a Master of Science degree in Accounting from George Mason University.

Chief Financial Officer, Secretary, and Treasurer.

Hunter has served as Chief Financial Officer, Secretary, and Treasurer of the Company from April 17, 2025.

Prior to joining the Company, Mr.

Hunter served as Chief Financial Officer of iVenture Accounting Group, a public accounting firm, from June 2024 to March 2025.

From September 2020 to March 2024, Mr.

Hunter was Chief Financial Officer of VersaTech, Inc., an IT services government contractor.

From March 2025 to April 2025 and from March 2024 to June 2024, Mr.

Hunter provided private consulting services.

Hunter was Chief Financial Officer and Chief Operating Officer of The O’Gara Group, a private equity backed holding company that builds armored vehicles for the military and the Department of State, from 2016 to 2020 and Chief Financial Officer of Cyberpoint International, a provider of cybersecurity solutions to the United States and international intelligence community from 2013 to 2016.

From 2007 to 2013 Mr.

Hunter held multiple roles, including Vice President and Assistant Corporate Controller, at SRA International, Inc., a publicly traded company.

Hunter graduated with a B.S.

in Accounting from the University of Virginia McIntire School of Commerce.

Code of Ethics

15 unchanged sentences

Chief Executive Officer and President (3)

Chief Financial Officer, Secretary, and Treasurer (4)

Stephanie Poe

3 unchanged sentences

”All Other Compensation” includes Company matching contributions to the 401(k) plan in the amounts of $13,363 and $13,234 for the years 2025 and 2024, respectively.

(4) “All Other Compensation” includes Company matching contributions to the 401(k) plan in the amounts of $5,103 and $6,292 for the years 2024 and 2023, respectively.

Hunter was hired effective April 17, 2025.

”All Other Compensation” includes Company matching contributions to the 401(k) plan in the amounts of $5,103 for the year 2024.

Poe resigned on July 17, 2024.

11 unchanged sentences

Market or Payout Value of Unearned Shares, Units or Other Rights that have not Vested

Stephanie Poe (1)

Poe resigned on July 17, 2024.

Compensation of Directors

Effective for 2024, all non-executive officer Directors were to receive, per annum, $40,000 in cash compensation and $15,000 in stock compensation for their services as Directors.

During 2024, all such cash compensation was paid.

In February 2025, in lieu of the $15,000 in stock compensation due for 2024, the independent directors were paid $15,000 in cash, which is not reflected in the table below.

In 2025, each non-employee member of the Board of Directors received annual cash compensation of $40,000 for service during the year.

In February 2025, non-employee directors also received a one-time cash payment of $15,000 in lieu of annual 2024 equity compensation that had not been granted and issued in 2024.

In December 2025, annual 2025 equity compensation with a grant date value of $15,000 for each non-employee director was authorized and subsequently issued in January 2026.

In 2026, each non-employee director is expected to receive annual compensation consisting of $44,000 in cash and equity awards with a grant date value of $16,500.

The Company does not pay any additional compensation to directors who are members of management or are employed by the Company, but the Company reimburses all directors for out-of-pocket expenses incurred in connection with attending Board and committee meetings or otherwise in their capacity as directors.

14 unchanged sentences

No additional compensation paid related to his position as a director.

As stated above, in lieu of a stock award intended for 2024, a cash payment of $15,000 was paid in February 2025 to each independent director.

Employment Contracts and Termination of Employment and Change in Control Arrangements.

40 unchanged sentences

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The following table sets forth, as of May 3, 2025, certain information concerning ownership of the Company’s Common Stock by (i) each person known by the Company to own of record or be the beneficial owner of more than five percent (5%) of the Company’s Common Stock, (ii) named executive officers and Directors, and (iii) all Directors and Executive Officers as a group.

The following table sets forth, as of March 22, 2026, certain information concerning ownership of the Company’s Common Stock by (i) each person known by the Company to own of record or be the beneficial owner of more than five percent (5%) of the Company’s Common Stock, (ii) named executive officers and Directors, and (iii) all Directors and Executive Officers as a group.

Except as otherwise indicated, the stockholders listed in the table have sole voting and investment powers with respect to the shares indicated.

Name and Address of Beneficial Owner

Number of Shares

8 unchanged sentences

Smith, James Russell Bruner, Matthew I.

Smith, Richard Gerhardt, and Ms.

Smith, Richard Gerhardt, Dominic L.

Hunter and Ms.

Read Van de Water is c/o Smith-Midland Corporation, P.O.

9 unchanged sentences

(4) Address of holder is 9030 Stony Point Pkwy, Ste 100, Richmond, VA 23235.

Based on the Form 13-D filed with the Securities and Exchange Commission on December 6, 2024 by Thompson Davis & Co., Inc.

Based on the Form 13-F filed with the Securities and Exchange Commission on January 12, 2026 by Thompson Davis & Co., Inc.

EQUITY COMPENSATION PLAN INFORMATION

27 unchanged sentences

On June 16, 2025, the Audit Committee (the “Audit Committee”) of the Board of Directors of the Company, approved the engagement of BDO USA, P.C.

(“BDO”) as the Company’s independent registered public accounting firm for the Company’s fiscal year ending December 31, 2024.

The aggregate fees billed for each of the past two fiscal years for professional services rendered by BDO USA, P.C.;

Richmond, VA, the principal accountant for the audit of the Company for the year ended December 31, 2024 and 2023;

(“BDO”), Richmond, VA, as the Company’s independent registered public accounting firm for the Company’s fiscal year ending December 31, 2025.

The aggregate fees billed for each of the past two fiscal years for professional services rendered by BDO, the principal accountant for the audit of the Company for the year ended December 31, 2025 and 2024;

for assurance and related services related to the audit;

44 unchanged sentences

Commercial Real Estate Deed of Trust, dated February 10, 2022, issued by the Company in favor of Summit Community Bank (now known as Burke & Herbert Bank & Trust Company) (Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 16, 2022).

Company Insider Trading Policy.

Company Insider Trading Policy (Incorporated by reference to the Company’s Annual Report on Form 10-KSB for the year ended December 31, 2024).

List of Subsidiaries of the Company (Incorporated by reference to the Company’s Annual Report on Form 10-KSB for the year ended December 31, 1995).

5 unchanged sentences

Company Clawback Policy.

(Incorporated by reference to the Company’s Annual Report on Form 10-KSB for the year ended December 31, 2024).

XBRL Instance Document.

7 unchanged sentences

SMITH-MIDLAND CORPORATION

April 14, 2026

/s/ Ashley B.

1 unchanged sentence

(Principal Executive Officer)

/s/ Ashley B.

Chief Executive Officer and President

April 14, 2026

/s/ Dominic L.

Chief Financial Officer

(Principal Financial and Accounting Officer)

1 unchanged sentence

/s/ Ashley B.

April 14, 2026

/s/ James Russell Bruner

April 14, 2026

James Russell Bruner

/s/ Matthew I.

April 14, 2026

Matthew Smith

/s/ Read Van de Water

April 14, 2026

Read Van de Water

/s/ Richard Gerhardt

April 14, 2026

Richard Gerhardt

5 unchanged sentences

and Subsidiaries

Reports of Independent Registered Public Accounting Firms (BDO USA, P.C., Richmond, VA, PCAOB ID#:

Report of Independent Registered Public Accounting Firm (BDO USA, P.C., Richmond, VA, PCAOB ID#:

Consolidated Financial Statements

10 unchanged sentences

We have audited the accompanying consolidated balance sheets of Smith-Midland Corporation (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of income, stockholders’ equity, and cash flows for each of the years then ended, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

17 unchanged sentences

Allowance for Credit Losses of Accounts Receivable – Trade Billed

As described in Note 2 to the consolidated financial statements, the Company recognized an allowance for credit losses of $1.13 million for its consolidated accounts receivable trade - billed as of December 31, 2024.

As described in Note 2 to the consolidated financial statements, the Company recognized an allowance for credit losses of $539 thousand for its consolidated accounts receivable trade - billed as of December 31, 2025.

The Company estimates expected credit losses by analyzing prior collection history with its customers, the related aging of past due balances, projections of credit losses based on historical trends or past events, and forecasts of future economic conditions.

9 unchanged sentences

Richmond, Virginia

April 14, 2026

Smith-Midland Corporation

4 unchanged sentences

Accounts receivable, net

Trade - billed (less allowances of $ 1,130 and $ 806 ), including contract retentions

Trade - billed (less allowances of $ 539 and $ 1,130 , respectively), including contract retentions

Trade - unbilled

33 unchanged sentences

authorized 8,000,000 shares;

5,346,526 and 5,349,599 issued and 5,304,606 and 5,308,679 outstanding, respectively

5,347,474 and 5,346,526 issued and 5,306,554 and 5,304,606 outstanding as of December 31, 2025 and 2024, respectively

Additional paid-in capital

33 unchanged sentences

(in thousands, except share data)

Treasury Stock

Balance, December 31, 2023

Adjustment for Adoption of ASU 2016-13

Vesting of restricted stock

Issuance of restricted stock

Settlement of restricted stock

Balance, December 31, 2024

1 unchanged sentence

Issuance of restricted stock

Settlement of restricted stock

Forfeiture of restricted stock

Balance, December 31, 2025

5 unchanged sentences

Reconciliation of net income to net cash provided by (used in) operating activities

Net income (loss)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities

Adjustments to reconcile net income to net cash provided by (used in) operating activities

Depreciation and amortization

(Gain) loss on sale of fixed assets

Gain on sale of fixed assets

Allowance for credit losses

33 unchanged sentences

Cash payments for interest

Cash payments for income taxes

Cash payments for income taxes, net of refunds

Capital expenditures in accounts payable

24 unchanged sentences

Land improvements

Rental equipment

Assets held for lease (Rental equipment)

Office equipment

15 unchanged sentences

Revenue Recognition

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customer s for product sales, royalty income and shipping and installation revenue.

Revenue from barrier rentals is accounted for under ASC 842, Leases .

Revenue accounted for (in thousands) under ASC 606 amounted to $ 73,741 and $ 66,489 during the years ended December 31, 2025 and 2024, respectively.

Revenue accounted for (in thousands) under ASC 842 amounted to $ 19,705 and $ 12,019 during the years ended December 31, 2025 and 2024, respectively.

Product Sales - Over Time

The Company recognizes revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for goods or services provided.

Revenue associated with contracts with customers for customized products is recognized over time as the Company's performance creates or enhances customer-controlled assets or creates or enhances an asset with no alternative use, which the Company has an enforceable right to receive compensation as defined under the contract for performance completed.

To determine the amount of revenue to recognize over time, the Company recognizes revenue over the contract terms based on the output method.

The Company applied the "as invoiced" practical expedient as the amount of consideration the Company has the right to invoice corresponds directly with the value of the Company's performance to date.

As the output method is driven by units produced, the Company recognizes revenues based on the value transferred to the customer relative to the remaining value to be transferred.

The Company also matches the costs associated with the units produced.

If a contract is projected to result in a loss, the entire contract loss is recognized in the period when the loss was first determined and the amount of the loss is updated in subsequent reporting periods.

Revenue recognition also includes an amount related to a contract asset or contract liability.

If the recognized revenue is greater than the amount billed to the customer, a contract asset is recorded in accounts receivable trade - unbilled.

Conversely, if the amount billed to the customer is greater than the recognized revenue, a contract liability is recorded in customer deposits.

Changes in the job performance, job conditions, and final contract settlements are factors that influence management’s assessment of total contract value and therefore, profit and revenue recognition.

A portion of the work the Company performs requires financial assurances in the form of performance and payment bonds at the time of execution of the contract.

Some contracts include retention provisions of up to 10 %, which are generally withheld from each progress payment as retainage until the contract work has been completed and approved.

Revenue associated with contracts with customers for customized products is recognized over time when the Company’s performance (i) creates or enhances an asset that the customer controls, or (ii) creates or enhances an asset that has no alternative use to the Company and the Company has an enforceable right to payment for performance completed to date, as defined in the contract.

To determine the amount of revenue to recognize over time, the Company measures progress toward complete satisfaction of its performance obligations using an output method based on units produced, which depicts the value transferred to the customer relative to the remaining value to be transferred.

Costs associated with the units produced are recognized as incurred.

If a contract is projected to result in a loss, the entire contract loss is recognized in the period when the loss is first determined, and the amount of the loss is updated in subsequent reporting periods.

Revenue recognition includes amounts related to contract assets and contract liabilities.

If recognized revenue exceeds amounts billed, a contract asset is recorded in Accounts receivable, trade — unbilled.

Conversely, if amounts billed exceed recognized revenue, a contract liability is recorded in Customer deposits.

Changes in job performance, job conditions, and final contract settlements are factors that influence management’s assessment of total contract value and, therefore, profit and revenue recognition.

Revenue recognized for product sales – over time (in thousands) are recorded in product sales under revenue in the consolidated financial statements which amounted to $ 25,409 and $ 22,443 during the years ended December 31, 2025 and 2024, respectively.

Smith-Midland Corporation

2 unchanged sentences

Product Sales - Point in Time

For certain product sales, that do not meet the over time criteria, the Company recognizes revenue when the product has been shipped to the destination in accordance with the terms outlined in the contract where a present obligation to pay exists and the customers have gained control of the product.

For certain product sales that do not meet the criteria for recognition over time, the Company recognizes revenue at a point in time, generally upon shipment or delivery (as specified in the contract), when control of the product transfers to the customer and the Company has a present right to payment.

Revenue recognized for product sales – point in time (in thousands) are recorded in product sales under revenue in the consolidated financial statements which amounted to $ 22,867 and $ 23,181 during the years ended December 31, 2025 and 2024, respectively.

Accounts Receivable and Contract Balances

The timing of when we bill our customers is generally dependent upon advance billing terms, milestone billings based on the completion of certain phases of the work, or when services are provided or products are shipped.

The Company’s Accounts receivable trade – billed (in thousands), arising from Topic 606 is $ 16,695 , $ 13,685 , and $ 13,702 as of December 31, 2024, December 31, 2023, and December 31, 2022, respectively.

Projects with performance obligations recognized over time that have costs and estimated earnings recognized to date in excess of cumulative billings are reported on our Consolidated Balance Sheets as "Accounts receivable trade - unbilled" (contract assets).

Accounts receivable, net includes the following components on the consolidated balance sheets:

Trade – billed represents amounts that have been invoiced to customers for which the Company has an unconditional right to payment.

Trade – billed is presented net of an allowance for expected credit losses.

Trade – unbilled represents amounts related to performance obligations satisfied over time for which revenue has been recognized, but amounts have not yet been invoiced.

Trade – unbilled is a contract asset.

The Company’s Accounts receivable trade – billed (in thousands), arising from Topic 606 is $ 25,618 and $ 16,695 as of December 31, 2025 and December 31, 2024, respectively.

Certain contracts include retention provisions, generally up to 10%, that are withheld from progress billings until the related work has been completed and approved.

Contract retentions that have been invoiced are included within Trade – billed.

The Company considers these amounts to be contract balances because collection may be contingent upon contractual completion and approval provisions.

At December 31,2025 and December 31, 2024, accounts receivable included contract retentions (in thousands) of approximately $ 1,135 and $ 1,523 , respectively, which are considered contract assets.

For contracts recognized over time, contract assets arise when revenue recognized to date exceeds cumulative billings.

Contract assets are presented as Trade – unbilled on our consolidated financial statements.

When the Company subsequently invoices the customer, the related amounts are reclassified from Trade – unbilled to Trade – billed.

The Company’s Accounts receivable trade – unbilled (i.e.

4 unchanged sentences

Amounts invoiced in the period from amounts included at the beginning of the period

Projects with performance obligations recognized over time that have cumulative billings in excess of costs and estimate earnings recognized to date, are reported on our Consolidated Balance Sheets as "Customer deposits" (contract liabilities).

For contracts where cumulative billings (or cash collected) exceed revenue recognized to date, the Company records a contract liability, customer deposits, within accrued liabilities or other liabilities, as applicable, and recognizes revenue as the related performance obligations are satisfied.

The Company’s customer deposits (i.e.

4 unchanged sentences

Revenue recognized in the period from amounts included at the beginning of the period

The Company’s deferred revenue balances (in thousands) related to Topic 606 are as follows:

For contracts where the Company has billed or received consideration in advance of transferring goods or services to the customer, the Company records a contract liability, deferred revenue, within accrued liabilities or other liabilities, as applicable, and recognizes revenue when the Company satisfies its performance obligations under the terms of the contract, which generally occurs over time as services are rendered or at a point in time upon delivery of the promised goods or services.

Deferred revenue includes the non-lease components of barrier rental arrangements.

The Company’s deferred revenue (i.e.

contract liabilities) balances (in thousands) related to Topic 606 are as follows:

Year Ended December 31,

2 unchanged sentences

Revenue recognized in the period from amounts included at the beginning of the period

Smith-Midland Corporation

and Subsidiaries

Notes to Consolidated Financial Statements

Any uncollected billed amounts for our performance obligations recognized over time, including contract retentions, are recorded within accounts receivable trade - billed.

At December 31, 2024, December 31, 2023, and December 31, 2022 accounts receivable included contract retentions (in thousands) of approximately $ 1,523 , $ 1,310 , and $ 932 , respectively, which are considered contract assets.

Our billed and unbilled revenue may be exposed to potential credit risk if our customers should encounter financial difficulties, and we maintain an allowance for estimated expected credit losses.

The difference between the opening and closing balances of the Company’s contract assets and contract liabilities primarily results from the timing difference between the Company’s performance and billings.

The changes in the contract assets and contract liabilities balances during the years ended December 31, 2025 and 2024 were not materially affected by any other factors.

Our billed and unbilled revenue is subject to credit risk if our customers should encounter financial difficulties.

The Company maintains an allowance for estimated expected credit losses on Trade-billed (and evaluates Trade-unbilled for expected credit losses, as applicable).

A considerable amount of judgment is required when determining expected credit losses.

Estimates of such expected losses are recorded based on historical losses experienced by the Company, current macro- and micro-economic conditions, and expected macro- and micro-economic conditions.

Additional reserves are accumulated when we believe a specific customer may not be able to meet its financial obligations due to deterioration in financial condition or credit rating.

Estimates of such expected losses are recorded based on historical losses experienced by the Company and current and future economic conditions.

Management also considers when a specific customer may not be able to meet its financial obligations due to deterioration in financial condition or credit rating.

Factors relevant to our assessment include our prior collection history with our customers, the related aging of past due balances, projections of credit losses based on historical trends or past events, and forecasts of future economic conditions.

At December 31, 2024 and December 31, 2023, total allowances for credit losses were $ 1,130 and $ 806 , respectively.

The rollforward of our allowance for credit losses (in thousands) for the year ended December 31, 2024, was as follows:

Balance at December 31, 2023

Collection of Expected Credit Losses

Provision for Expected Credit Losses

Balance at December 31, 2024

Sale to Customer with a Buy-Back Guarantee - Lease Income

The Company entered into a buy-back agreement with one specific customer.

Under this agreement, the Company guaranteed to buy-back barrier at a predetermined price at the end of the long-term project, subject to the condition of the product.

Although the Company received payment in full when the product was produced, we were required to account for these transactions as operating leases.

The amount of sale proceeds equal to the buy-back obligation was deferred until the buy-back was executed.

The remaining sale proceeds were deferred in the same account and recognized on a straight-line basis over the usage period, such usage period commencing on delivery to the job-site and ending at the time the buy-back was executed.

The Company capitalized the cost of the product on the consolidated balance sheet, and depreciated the value, less residual value, to cost of leasing revenue in “Cost of sales” over the estimated useful life of the asset.

The deferred revenue and deferred costs related to the original buy-back agreement were fully amortized as of December 31, 2022.

The final close-out and accounting for the buy-back obligation recognized revenue of $ 679 and $ 0 for the years ended December 31, 2024 and 2023, respectively.

Pursuant to an amendment entered into by the Company with the customer on April 13, 2022, the Company agreed to purchase barrier back in the amount equal to the buy-back guarantee.

Accordingly, the Company settled any remaining deferred balances, in excess of the buy-back payment, to leasing revenue, and reclassified the net book value of the purchased product to “Property and equipment, net”.

The revenue was recognized in accordance with Topic 842, Leases .

Commitments and Contingencies for additional information regarding the amendment.

At December 31, 2025 and December 31, 2024, total allowances for credit losses were $ 539 and $ 1,130 , respectively (in thousands).

The decrease in the allowance for credit losses was primarily attributable to improved collection trends, a reduction in aged receivable balances, particularly within accounts previously identified as having elevated credit risk, and a decline in customer accounts with specific credit concerns that had contributed to higher reserves in the prior year.

Management will continue to monitor receivable aging, customer creditworthiness, project-specific risks, and broader economic conditions affecting the construction and infrastructure markets in which the Company operates when estimating expected credit losses.

The rollforward of our allowance for credit losses (in thousands) for the years ended December 31, 2025 and 2024, was as follows:

Year Ended December 31,

Balance at beginning of period

Recoveries of amounts previously written off

Provision (benefit) for Expected Credit Losses

Balance at end of period

Barrier Rentals - Lease Income

Leasing fees are paid by customers at the beginning of the lease agreement.

We record amounts billed to customers in excess of recognizable revenue, as deferred revenue on the balance sheet.

Revenue is recognized on a straight-line basis each month as lease income for the duration of the lease, in accordance with Topic 842, Leases .

The Company’s deferred revenue balances (in thousands) related to Topic 842, Leases are as follows:

Barrier Rental revenue historically comprises Standard Barrier Rental and Special Barrier Projects.

Standard Barrier Rental

The Company leases barriers to customers under operating leases in accordance with ASC 842, Leases .

Customers are invoiced at lease commencement for the full lease term.

The Company’s standard barrier rentals arrangements are generally for periods less than five years and may include provisions for additional charges if the barriers remain on rent beyond the contractual lease term.

The Company evaluates the enforceable term in determining the lease tease term used for revenue recognition and in preparing its disclosure of future fixed lease payments.

Amounts billed in advance of the related lease periods are recorded as deferred lease income within Deferred revenue on the balance sheet and recognized as lease income on a straight-line basis over the lease term.

Lease income is presented in Barrier Rentals within Revenue in the consolidated financial statements.

The Company recognizes operating lease income only to the extent collection is probable.

If collectability is not probable, lease income is limited to amounts collected until collectability becomes probable.

Standard Barrier Rental arrangements also include non-lease components (accounted for under ASC 606, Revenue from Contracts with Customers ), including delivery/shipping, installation, and removal/pickup services.

These non-lease components are distinct from the lease component because:

(i) the lease commences upon shipment from the Company’s facility, and delivery and installation occur after lease commencement;

(ii) the components are separately priced with observable standalone selling prices;

and (iii) the services can be performed by third parties.

The Company allocates consideration between lease and non-lease components based on their relative stand-alone selling prices.

Revenue allocated to delivery and installation services is recognized when the services are performed (generally upon delivery to the customer’s site, which occurs after lease commencement), and revenue allocated to removal/pickup services is recognized when performed (generally at the end of the lease term).

Amounts billed in advance of performance related to the non-lease components are recorded as deferred revenue within Deferred revenue on the balance sheet and recognized as the related services are performed and is recognized within shipping and installation revenue on the consolidated statements of income.

The Company’s deferred lease revenue balances (in thousands) related to Topic 842, Leases are as follows:

Year Ended December 31,

Deferred revenue, beginning of the period

Deferred revenue, end of the period

Revenue recognized in the period from amounts included at the beginning of the period

Deferred lease revenue, beginning of the period

Deferred lease revenue, end of the period

Revenue recognized in the period from amounts included at the

Beginning of the period

Pursuant to ASC 842-30-50-12, the amounts presented below represent fixed lease payments to be received under noncancelable lease arrangements as of December 31, 2025, and exclude variable lease payments, which are recognized as income in the period in which the changes in facts and circumstances on which those payments are based occur.

Year Ending December 31, (in thousands)

Special Barrier Projects

The Company provides barrier rentals as part of integrated Special Barrier Projects, which include deployment and 24/7 concierge-type services.

These arrangements are evaluated under ASC 842, Leases .

The Company contracts with a third-party event services firm, with the end-user also a party to the arrangement.

Projects are delivered as a single bundled engagement, typically over a one- to two-week period.

The Company’s personnel manage and execute all barrier movements under direction of customer authorized staff and officials.

Based on this structure, the customer is considered to direct the use of the identified asset, indicating that a lease exists.

The non-lease components are not distinct from the lease component, as they are highly interdependent and interrelated and not separately identifiable.

Accordingly, the lease and non-lease components are not separated and are accounted for as a single combined component under ASC 842.

Revenue is recognized on a straight-line basis over the project term, which reflects the continuous transfer of benefit over the duration of the engagement.

Royalty Income

The Company licenses certain products to other precast companies to produce the Company's products to engineering specifications under the licensing agreements.

The agreements are typically for five-year terms and require royalty payments from 4 % to 6 % of total sales of licensed products, which are paid every month.

The revenues from licensing agreements are recognized in the month earned.

The Company licenses certain products to other precast companies to produce the Company’s products in accordance with the Company’s engineering specifications.

Licensing agreements are typically for five-year terms and require royalty payments of 4 % to 6 % of the licensee’s total sales of licensed products.

Royalty income is recognized in accordance with ASC 606 as the licensee’s sales of the licensed products occur in the period the licensees’ sales are earned and reported.

Royalty income is presented under Royalty Income within Revenue in the consolidated financial statements

Smith-Midland Corporation

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Shipping and Installation

Shipping and installation revenues are recognized as a distinct performance obligation in the period the shipping and installation services are provided to the customer, in accordance with Topic 606.

Shipping, installation and removal services are distinct performance obligations and are accounted for under ASC 606, Revenue from Contracts with Customers .

Revenue is recognized in the period the shipping, installation, and removal services are provided to the customer.

When shipping and installation services are billed in advance of performance, the Company records a contract liability and recognizes the revenue when the services are performed.

Shipping, installation and removal revenue is presented as Shipping and Installation within Revenue in the consolidated financial statements.

Disaggregation of Revenue

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Shipping and Installation Revenue

Total Service Revenue

Total Service and Other Revenue

Total Revenue

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The Company has determined that no customer, if lost, would result in a near term severe impact to the Company’s operations.

For the year ended December 31, 2025, one customer represented approximately 14 % of the Company’s revenue.

For the year ended December 31, 2024, no customer represented more than 10 % of the Company’s revenue.

For the year ended December 31, 2023, the Company derived 14 % of its revenue from one customer.

As of December 31, 2024, two customer’s outstanding receivable balance exceeded 10 % of the total outstanding receivable balance.

As of December 31, 2023, two customers’ outstanding receivable balance each equaled 10 % of the total outstanding receivable balance.

As of December 31, 2025, no customer’s outstanding receivable balance exceeded 10% of the total outstanding receivable balance.

As of December 31, 2024, two customers’ outstanding receivable balances exceeded 10 % of the total outstanding receivable balance.

Sales and Use Taxes

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The accounting policies of the precast concrete segment are the same as those described in the summary of significant accounting policies.

The CODM assesses performance for the precast segment based on consolidated net income as reported on the consolidated statement of income and measures segment assets as total consolidated assets as reported on the consolidated balance sheet.

The CODM uses consolidated net income and consolidated assets to decide how to allocate resources and whether to reinvest profits into the precast concrete segment or into other parts of the entity, such as to pay dividends.

Significant segment expenses provided to the CODM are based on the expense breakout shown on the consolidate statements of income.

The precast concrete segments results are the same as reported on the consolidated income statement and there are no adjustments or reconciling items.

The CODM assesses performance for the Precast Concrete Segment based on consolidated net income as reported on the consolidated statements of income and measures segment assets as total consolidated assets as reported on the consolidated balance sheets.

The CODM uses consolidated net income and consolidated assets to allocate resources and assess performance.

Significant segment expenses provided to the CODM are based on the expense breakout shown on the consolidated statements of income.

The Precast Concrete Segment’s results are the same as reported on the consolidated statements of income and there are no adjustments or reconciling items.

Smith-Midland Corporation

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Level 3 – Financial assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement.

The carrying value for each of the Company’s financial instruments approximates fair value because of the short-term nature of those instruments.

The estimated fair value of the long-term debt approximates carrying value based on current rates offered to the Company for debt of similar maturities.

The fair value of the Company’s long-term debt agreements were considered Level 2 liabilities.

The carrying value for each of the Company’s cash, accounts receivable, and accounts payable approximate fair value because of the short-term nature of those instruments.

The estimated fair value of the Company’s notes payable approximates its carrying value and is determined by using a discounted cash flow approach based on current market rates available to the Company for debt with similar terms and maturities.

The fair value of the Company’s notes payable is classified within Level 2 of the fair value hierarchy.

The preparation of financial statements in conformity with U.S.

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When any such impairment exists, the related assets will be written down to fair value.

No impairment losses have been recorded during the two years ended December 31, 2024.

No impairment losses have been recorded during the years ended December 31, 2025 and 2024.

Recent Accounting Pronouncements

In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures, to require the disclosure of segment expenses if they are (i) significant to the segment, (ii) regularly provided to the chief operating decision maker (“CODM”), and (iii) included in each reported measure of a segment’s profit or loss.

Public entities will be required to provide this disclosure quarterly.

In addition, this ASU requires an annual disclosure of the CODM’s title and a description of how the CODM uses the segment’s profit/loss measure to assess segment performance and to allocate resources.

This guidance is effective for annual periods beginning after December 15, 2023 and interim periods beginning after December 15, 2024, with early adoption permitted, and is required to be applied retrospectively to all prior periods presented in the financial statements.

The Company adopted this standard retrospectively on December 31, 2024.

In December 2023, the Financial Accounting Standards Board (FASB) issued ASU 2023-09, Improvements to Income Tax Disclosures.

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The guidance makes several other changes to the income tax disclosure requirements.

This guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted, and is required to be applied prospectively with the option of retrospective application.

The Company is evaluating the impact of the standard on its financial statements and related disclosures.

The Company adopted this standard prospectively on January 1, 2025.

Accordingly, prior period disclosures have not been recast to conform to the current period presentation.

The adoption resulted in expanded income tax disclosures, primarily related to the rate reconciliation and income taxes paid.

The adoption resulted in expanded disclosures but did not impact the Company’s financial position, results of operations, or cash flows.

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses , requiring enhanced disclosures about specified categories of expenses included in certain expense captions presented on the face of the income statement.

This standard will be effective for the Company for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027, and may be applied either prospectively to financial statements issued for reporting periods after the effective date of this ASU or retrospectively to all prior periods presented in the financial statements.

The Company is currently evaluating the impact of adopting this guidance on its consolidated financial statements.

In 2025, the Financial Accounting Standards Board (“FASB”) issued ASU 2025-05, which provides a practical expedient for estimating expected credit losses for certain short-term financial assets under ASC 326.

The guidance permits entities to estimate expected credit losses based on reasonable and supportable forecasts may elect to assume that current conditions as of the balance sheet date do not change for the remaining life of the asset.

The standard is effective for the Company for fiscal years beginning after December 15, 2025, including interim periods within those fiscal years, with early adoption permitted.

The Company is currently evaluating the impact of this guidance on its consolidated financial statements.

The adoption of this standard is not expected to have a material impact on the Company’s financial position, results of operations, or cash flows.

Smith-Midland Corporation

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Notes to Consolidated Financial Statements

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses , requiring additional disclosures about specified categories of expenses included in certain expense captions presented on the face of the income statement.

The Company is currently evaluating the impact of adopting this guidance on the Company’s consolidated financial statements.

PROPERTY AND EQUIPMENT, NET

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Machinery and equipment

Rental equipment

Assets held for lease (Rental equipment)

Total property and equipment

accumulated depreciation and amortization

Property and equipment, net of accumulated depreciation and amortization

Depreciation expense and amortization (in thousands) was approximately $ 2,664 and $ 2,399 for the years ended December 31, 2024 and 2023, respectively.

accumulated depreciation

Property and equipment, net of accumulated depreciation

Depreciation expense (in thousands) was approximately $ 2,863 and $ 2,664 for the years ended December 31, 2025 and 2024, respectively.

Assets held for lease are primarily concrete rental barrier that are leased to customers under operating lease arrangements.

Depreciation expense for assets held for lease was approximately $ 1,230 and $ 1,094 (in thousands) for the years ended December 31, 2025 and 2024, respectively.

Property and equipment, including assets held for lease, are depreciated using the straight-line method over their estimated useful lives.

Assets held for lease (primarily concrete barriers) have estimated useful lives ranging from 5 to 10 years.

The Company periodically evaluates long-lived assets, including assets held for lease, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

No material impairment charges related to assets held for lease were recognized during 2025 and 2024 and additions to assets held for lease were approximately $ 4,542 and $ 480 (in thousands) for the years ended December 31, 2025 and 2024, respectively.

NOTES PAYABLE

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with monthly payments of approximately $ 21 of principal and interest fixed at 4.09 %;

net of $ 21 and $ 22 of deferred loan costs, respectively;

net of $ 21 and $ 22 of unamortized deferred loan costs, respectively;

collateralized by the related real property.

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with monthly payments of approximately $ 22 of principal and interest fixed at 3.64 % under a Promissory Notes Rate Conversion Agreement;

net of $ 13 and $ 16 of deferred loan costs, respectively;

net of $ 13 and $ 16 of unamortized deferred loan costs, respectively;

collateralized by all assets of Smith-Carolina Corporation and guaranteed by the Company.

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with monthly payments of approximately $ 27 of principal and interest fixed at 3.99 %;

net of $ 18 and $ 22 of deferred loan costs, respectively;

net of $ 18 and $ 22 of unamortized deferred loan costs, respectively;

collateralized by the Company’s property, plant, and buildings.

Installment note collateralized by certain machinery and equipment maturing in 2025;

with monthly payments of $ 1.1 with an annual interest rate of 2.90%.

A revolving line of credit evidenced by promissory note with the Bank, with the available amount of $ 5,000 with no balance outstanding as of December 31, 2024.

The line of credit is evidenced by a commercial revolving promissory note, which carries a variable interest rate of prime, with a floor of 4.99 %.

The line of credit was renewed on January 1, 2025 and matures January 1, 2026 .

The amount available is based on the lower of the maximum $5,000 or 50 % of eligible cash, inventory, and accounts receivable balances at the financial statement date.

Key provisions of the line of credit require the Company (i) to obtain bank approval for capital expenditures in excess of $ 5,000 during the term of the loan and (ii) to obtain bank approval prior to its funding of any acquisition.

The line of credit is collateralized by a first lien position on the Company's accounts receivable, inventory, and equipment.

with monthly payments of $ 1.1 with an annual interest rate of 2.90%.The loan was paid off in full during the year ended December 31, 2025.

Total Notes Payable Outstanding

Less current maturities

Less current maturities of notes payable

Notes Payable-less current maturities

Smith-Midland Corporation

and Subsidiaries

Notes to Consolidated Financial Statements

The total notes payable balance is offset by debt issuance costs associated with securing the loans summarized above and are amortized straight line over the term of the related loan, which approximates the effective interest rate method.

The total unamortized costs (in thousands) as of December 31, 2025 is $ 44 and $ 52 as of December 31, 2024.

On October 1, 2023, the Company received a Commitment Letter from the Bank to provide a guidance line of credit specifically to purchase business equipment in an amount up to $1,500.

On October 1, 2023, the Company received a Commitment Letter from the Bank to provide a guidance line of credit specifically to purchase business equipment in an amount up to $ 1,500 (in thousands).

The commitment provided for the purchase of equipment for which a note payable will be executed with a term not to exceed five years with an interest rate at the Wall Street Journal prime rate plus 0.50 % with a floor of 3.50 % per annum.

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The commitment for the guidance line of credit matured on October 1, 2024.

As of October 1, 2024, the Company had not purchased any equipment pursuant to the $ 1,500 commitment.

Under the loan covenants, for both the Line of Credit with the Bank, the Company is limited to annual capital expenditures (in thousands) of $ 5,000 and has received a waiver for 2024 from the Bank, and must maintain tangible net worth (in thousands) of $ 25,000 .

The Company's notes payable includes certain restrictive covenants, which require the Company to maintain minimum levels of tangible net worth, places limits on annual capital expenditures for which a waiver was received in 2024, and limits on the payment of cash dividends.

At December 31, 2024, the Company was in compliance with all covenants.

The Company maintains a revolving line of credit evidenced by a commercial revolving promissory note with the Bank.

The line of credit provides for borrowings up to $ 5,000 (in thousands) and bears interest at a variable rate based on the Bank’s prime rate, subject to a floor of 4.99 %.

The amount available for borrowing is limited to the lesser of (i) $ 5,000 or (ii) 50 % of eligible cash, inventory, and accounts receivable balances at the financial statement date.

The line of credit is collateralized by a first lien on the Company’s accounts receivable, inventory and equipment.

Key provisions of the line of credit require the Company to obtain Bank approval for capital expenditures in excess of $ 5,000 (in thousands) during the term of the line and to obtain Bank approval prior to funding any acquisition.

There were no amounts outstanding under the line of credit at December 31, 2025 or 2024.

The line of credit matured on January 1, 2026 and was renewed on January 1, 2026 through January 1, 2027.

Smith-Midland Corporation

and Subsidiaries

Notes to Consolidated Financial Statements

The Company’s debt agreements contain certain restrictive covenants, including maintaining minimum tangible net worth, limitations on annual capital expenditures, and restrictions on the payment of cash dividends.

The Company obtained waivers from the Bank related to the annual capital expenditure limitation for the years ended December 31, 2025 and 2024.

As of December 31, 2025, the Company was in compliance with all covenants.

The aggregate amounts of notes payable maturing in each of the next five years and thereafter are as follows (in thousands):

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Notes to Consolidated Financial Statements

Income tax expense is comprised of the following (in thousands):

Income tax expense

The provision for income taxes differs from the amount determined by applying the federal statutory tax rate to pre-tax income as a result of the following (in thousands):

Income tax expense (benefit) is comprised of the following (in thousands):

Total Federal

Income tax expense/(benefit)

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, which updated income tax disclosure requirements related to the income tax rate reconciliation and requires disclosure of income taxes paid by jurisdiction.

The Company has applied ASU 2023-09 prospectively beginning in 2025.

As such, our effective tax rate reconciliation for 2025 is reflected in a new table following the requirements set forth in ASU 2023-09 (in thousands), while the 2024 effective tax rate reconciliations are presented in the historical format as required by U.S.

GAAP (in thousands).

Income taxes at U.S.

Federal Statutory Tax Rate

Nontaxable or Nondeductible Items

State and Local Income Tax, Net of Federal (National) Income Tax Effect (1)

Other Adjustments

Effective tax rate

State taxes in Virginia and the District of Columbia (DC) made up the majority (greater than 50 percent) of the tax effect in this category.

The following table reconciles the U.S.

statutory tax rate to our effective income tax rate for the years ended December 31, 2024, prior to the adoption of ASU 2023-09:

December 31, 2024

Income taxes at statutory rate

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Notes to Consolidated Financial Statements

Deferred tax assets (liabilities) are as follows (in thousands):

Deferred tax assets:

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Net deferred tax liability

In assessing the need for a valuation allowance, management must determine that there will be sufficient taxable income to realize deferred tax assets.

Based upon the historical and anticipated future positive earnings, management has determined that the deferred tax assets are realizable.

The details of cash tax payments for the year ended December 31, 2025 (net of refunds) are set forth below (in thousands).

Disclosure of Income Taxes Paid

District of Columbia (DC)

2025 Total Cash Paid for Income Taxes (Net of Refunds)

As of December 31, 2025 and 2024, the Company had approximately $ 5,038 and $ 5,490 (in thousands), respectively, of state net operating losses (NOLs) available to offset future state taxable income.

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or state tax examinations for the years prior to 2022.

The Company does not have any uncertain tax positions as of December 31, 2025, and believes there will be no material changes in unrecognized tax positions over the next twelve months.

EMPLOYEE BENEFIT PLANS

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The Company assumes no forfeitures as they are granted to key executives and board members.

Restricted stock activity during the years ended December 31, 2024 is as follows:

Performance-Based

Restricted stock activity during the year ended December 31, 2025 is as follows:

Service-Based

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Non-vested, December 31, 2024

Settlement of restricted stock

Non-vested, December 31, 2025

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The stock compensation cost was recognized over the requisite performance/service period using the straight-line method and based on the probable number of shares to be awarded.

During the second quarter of 2024 an additional expense amount (in thousands) of $ 25 was recorded related to the final amount awarded by the Compensation Committee.

Awards are being amortized to expense ratably, based upon the vesting schedule.

During the year ended December 31, 2024 an additional expense amount (in thousands) of $ 25 was recorded related to the final amount awarded by the Compensation Committee.

In 2025, stock compensation expense consisted of 948 shares for Board of Director annual stock compensation (in thousands) of $ 45 compensation awarded by the Compensation Committee in the fourth quarter of 2025 and $ 14 of awards that are being amortized to expense ratably, based upon the vesting schedule.

Stock compensation expense (in thousands) for the years ended December 31, 2025 and 2024 was approximately $ 59 and $ 45 , respectively, based upon the value at the date of grant.

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The fair value of the shares vested (in thousands) for the years ended December 31, 2025 and 2024 was $ 61 and $ 19 , respectively, based upon the value at the date of vesting.

There was $ 14 thousand of unrecognized compensation cost related to the non-vested restricted stock as of December 31, 2024 and will be recognized ratably over a 9 month period.

All non-vested restricted vests and is earned based on continued service of the award recipients.

There was no unrecognized compensation cost related to the non-vested restricted stock as of December 31, 2025.

Smith-Midland Corporation

2 unchanged sentences

COMMITMENTS AND CONTINGENCIES

On April 13, 2022, the Company and its customer entered into an amendment to the buy-back agreement described in ‘Revenue Recognition-Sale to Customer with a Buy-Back Guarantee-Lease Income’.

Pursuant to the amendment, the Company agreed to purchase all of the barrier subject to the original buy-back agreement, as well as an additional amount.

The total estimated purchase price is $ 5,000 , representing the barrier, associated loading, freight, and yarding.

The deferred buy-back lease asset and obligation were fully reduced as the Company picked up the original buy-back amount throughout 2022.

As of December 31, 2024, the Company has picked up all barrier related to this purchase agreement and does not expect to incur any additional costs related to this purchase.

For the years ended December 31, 2024 and 2023 the Company recognized additional revenue associated with the buy-back agreement closeout of $ 679 and $ 0 , respectively.

The Company is party to legal proceedings and disputes which may arise in the ordinary course of business.

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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 9A. Controls and Procedures