SMITH MIDLAND CORP 10-K

Item 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures Our management, including our principal executive officer and principal financial and accounting officer, conducted an evaluation of the effectiveness of our internal controls over financial reporting, and disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of the end of the period covered by this report. Based on that evaluation, our principal executive officer and principal financial and accounting officer concluded that, due to the material weaknesses described below, our disclosure controls and procedures were not effective at the reasonable assurance level as of December 31, 2025. Notwithstanding the existence of these material weaknesses, management believes that the consolidated financial statements in this Form 10-K present, in all material respects, the Company’s financial condition, results of operations, and cash flows for the periods disclosed in conformity with U.S. Generally Accepted Accounting Principles. Management’s Report on Internal Control over Financial Reporting Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Our internal controls over financial reporting is a process designed under the supervision of our principal executive officer and principal financial and accounting officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not detect or prevent misstatements. Also, projections of any evaluation of the effectiveness to future periods are subject to risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. As of December 31, 2025, management assessed the effectiveness of our internal controls over financial reporting based on the criteria for effective internal control over financial reporting established in “Internal Control - Integrated Framework”, issued by the Committee of Sponsoring Organizations (“COSO”) of the Treadway Commission in 2013. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. Based on this assessment, our management concluded that our internal control over financial reporting was not effective as of December 31, 2025, due to the material weaknesses in our internal control over financial reporting described below. Material Weaknesses in Internal Control Over Financial Reporting Management has determined that the Company had the following material weaknesses in its internal control over financial reporting: Control Environment, Risk Assessment and Monitoring Management has determined that the Company did not maintain appropriately designed entity-level controls impacting the (1) control environment, (2) risk assessment procedures, (3) control activities, (4) information and communication, and (5) monitoring activities to prevent or detect material misstatements to the financial statements and assess whether the components of internal control were present and functioning properly. These deficiencies were primarily attributed to (i) turnover of the Chief Financial Officer, (ii) lack of structure and responsibility, insufficient number of qualified resources, and inadequate oversight and accountability over the performance of controls, (iii) ineffective identification and assessment or risks impacting internal control over financial reporting, and (iv) ineffective evaluation and determination as to whether the components of internal control were present and functioning. 20 Control Activities and Information and Communication These material weaknesses contributed to the following additional material weaknesses within certain business processes and the information technology environment: · Management did not design, implement, and retain appropriate documentation of formal accounting policies, procedures, and controls across substantially all of the Company’s business processes over: (i) the financial reporting process, including management review controls over key disclosures and financial statement support schedules, (ii) the monthly financial close process, including journal entries and account reconciliations and (iii) the completeness and accuracy of information used by control owners in the operation of certain controls, to achieve timely, complete, accurate financial accounting, reporting. · The Company did not design and maintain effective processes and controls to ensure all journal entries are properly reviewed and approved prior to posting to the general ledger. · Management did not design and maintain appropriate information technology general controls in the areas of user access, vendor management controls, and segregation of duties related to certain information technology systems that support the Company’s financial reporting process. As a result of these material weaknesses, the Company’s management has concluded that, as of December 31, 2025 the Company’s internal control over financial reporting was not effective based on the criteria in Internal Control – Integrated Framework (2013) issued by the COSO. However, after giving full consideration to these material weaknesses, and the additional analyses and other procedures that we performed to ensure that our consolidated financial statements included in this Annual Report on Form 10-K were prepared in accordance with U.S. GAAP, our management has concluded that our consolidated financial statements present fairly, in all material respects, our financial position, results of operations and cash flows for the periods disclosed in conformity with U.S. GAAP. Management communicated the results of its assessment to the Audit Committee of the Board of Directors. As a non-accelerated filer and a “smaller reporting company”, the Company is exempt from the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002. As a result, the Company’s independent registered public accounting firm has not audited or issued an attestation report with respect to the effectiveness of our internal control over financial reporting as of December 31, 2025. Remediation Efforts Management, with oversight from the Audit Committee and Board of Directors, is committed to the remediation of the material weaknesses described above. The Company has continued to implement measures to improve the internal control structure. 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; and · 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 Other than as described above, there were no other changes in the Company’s internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(f) and 15d-15(f) of the Exchange Act during the quarter ended December 31, 2025 that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. Item 9B. Other Information During the fiscal fourth quarter of 2025, none of our directors and officers (as defined in Rule 16a-1(f) of the Exchange Act of 1934) adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement” each as defined in Item 408 of Regulation S-K. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections Not applicable. 21 PART III Item 10. Directors, Executive Officers and Corporate Governance Certain information with respect to our Directors and executive officers is set forth below. Name Age Director or Executive Officer Since Position Ashley B. Smith 63 1994 Chairman of the Board of Directors, Chief Executive Officer, and President James Russell Bruner 70 2018 Director Matthew I. Smith 59 2023 Director, Vice President of Sales & Marketing, and President of Concrete Safety Systems Read Van de Water 62 2023 Director Richard Gerhardt 59 2016 Director Dominic L. Hunter 63 2025 Chief Financial Officer, Secretary, and Treasurer Background The following is a brief summary of the background of each Director and executive officer of the Company: Ashley B. Smith. Chairman of the Board of Directors, Chief Executive Officer, and President. Ashley B. Smith has served as Chairman of the Board of Directors since January 2023, Chief Executive Officer of the Company since 2018, President of the Company since 2012, and as a Director since 1994. Mr. Smith was Vice President of the Company from 1990 to 2011. He is a past Chairman of the National Precast Concrete Association. Mr. Smith serves on the Board of Trustees of Bridgewater College in Bridgewater, Virginia. Mr. Smith holds a Bachelor of Science degree in Business Administration from Bridgewater College. The Company believes that Mr. Smith’s education, experience in the precast concrete industry and business experience gives him the qualifications and skills necessary to serve in the capacity as a director of the Company. James Russell Bruner. Director. Mr. Bruner has served as a member of the Board of Directors of the Company since 2018. Mr. Bruner has served as Chairman of Maersk Line, Limited (“Maersk Line”) since November 2016 and was President and Chief Executive Officer of Maersk Line from 2014 to 2017. Maersk Line owns and operates a fleet of container and tanker ships that are under the flag of the United States. These ships support military, government and humanitarian missions through the transportation of United States government cargo on an international basis. Maersk Line operates as a subsidiary of A.P. Moller-Maersk A/S, an integrated transport and logistics company headquartered in Copenhagen, Denmark. Mr. Bruner attended Bridgewater College in Virginia. He is a graduate of the University of Michigan Executive Program and Harvard Business School’s Advanced Management Program. The Company believes that Mr. Bruner’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. 22 Matthew I. Smith. Director, Vice President of Sales & Marketing, and President of Concrete Safety Systems . Mr. Smith has served as a member of the Board of Directors of the Company since December 2023. Mr. Smith is the Vice President of Sales & Marketing of the Company and the President of Concrete Safety Systems, the barrier rental division of Smith-Midland. He has served in these roles since 2008 and 2015, respectively. Prior to his appointment as a member of the Board of Directors, Mr. Smith served as an Advisor to the Board. He is active in the local community, serving as a member of the Board of Directors for Leadership Fauquier and as a Fauquier County Planning Commissioner. Mr. Smith is a past president and current board member of the Precast Concrete Association of Virginia. He has a bachelor’s degree in Business Administration from Bridgewater College. Mr. Smith is the brother of Ashley B. Smith. The Company believes that Mr. Smith’s education, experience in the precast concrete industry and business experience gives him the qualifications and skills necessary to serve in the capacity as a director of the Company. Read Van de Water. Director. Ms. Van de Water has served as a member of the Board of Directors of the Company since December 2023. She has served as Senior Vice President of External Affairs Safran USA since 2011. Safran USA is an international high-technology aerospace, defense, and space company. Ms. Van de Water served as Chairman of the Board for the National Mediation Board from 2005 to 2009 and was a board member from 2003 to 2009. Ms. Van de Water served as the Assistant Secretary for Aviation & International Affairs for the U.S. Department of Transportation from 2001 to 2003 and as Legislative Counsel of International Trade and Health Care for The Business Roundtable from 1997 to 2001. Ms. Van de Water received her J.D. from The Georgetown University Law Center. She is also a graduate of Elliot School of International Affairs at George Washington University, and The University of the South: Sewanee. The Company believes that Ms. Van de Water’s current and past business-related experience provides her with the knowledge and skills necessary to serve in the capacity as a director of the Company. Richard Gerhardt. Director. Mr. 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, 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. Gerhardt served in an escalating succession of positions for three global shipping and logistic companies: DHL Global Mail, ESI Global Logistic and MSI Worldwide. His eight years as President, Chief Operating Officer, and shareholder of MSI Worldwide culminated in its acquisition by Belgian Post. Mr. Gerhardt holds a Bachelor of Arts in Business Administration with a minor in Economics from Washington College in Chestertown, Maryland. The Company believes that Mr. 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. Dominic L. Hunter. Chief Financial Officer, Secretary, and Treasurer. Mr. 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. Mr. 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. Mr. Hunter graduated with a B.S. in Accounting from the University of Virginia McIntire School of Commerce. Code of Ethics The Company adopted a code of ethics that applies to the Chief Executive Officer, Chief Financial Officer, Accounting Manager and persons performing similar functions. The Board of Directors approved the code of ethics at their meeting on June 3, 2020. A copy may be obtained without charge by requesting one in writing from Secretary, Smith-Midland Corporation, P.O. Box 300, 5119 Catlett Road, Midland, VA 22728. The code of ethics is also posted on the Company’s website at www.smithmidland.com on the home page. Insider Trading Policy The Company has adopted an insider trading policy and related procedures governing the purchase, sale or other disposition of the Company’s securities by the Company and its directors, officers and employees, which are designed to promote compliance with insider trading laws, rules and regulations and applicable listing standards. In addition, the insider trading policy prohibits short sales of the Company’s stock, certain forms of hedging or monetizing transactions, holding the Company’s stock in a margin account, or pledging the Company’s stock as collateral for a loan without prior advance approval from our Chief Executive Officer (no such advance approvals were granted to directors or named executives officers in 2025). 23 Audit Committee The Company created an Audit Committee in 2018. The Audit Committee consists of James Russell Bruner, Read Van de Water, and Richard Gerhardt, the three independent board members. Mr. James Russell Bruner is an audit committee financial expert. Item 11. Executive Compensation The following table sets forth the compensation paid by the Company for services rendered for 2025 and 2024 to the principal executive officer, as well as the other executive officer of the Company (the “named executive officers”): Summary Compensation Table Year Salary ($)(1) Bonus ($)(2) Stock Awards ($) All Other Compensation ($) Total ($) Ashley B. Smith 2025 $ 479,148 $ 135,769 - $ 13,363 $ 628,280 Chief Executive Officer and President (3) 2024 $ 377,344 $ 82,915 - $ 13,234 $ 473,493 Dominic L. Hunter 2025 $ 187,465 $ — - $ 0 $ 187,465 Chief Financial Officer, Secretary, and Treasurer (4) Stephanie Poe 2024 $ 107,298 $ 20,910 - $ 5,103 $ 133,311 Former Chief Financial Officer, Secretary, and Treasurer (5)(6) (1) Represents salaries paid in 2025 and 2024 for services provided by each named executive officer serving in the capacity listed. (2) Represents amounts paid for annual performance-based bonus related to operations for the prior year. (3) ”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) Mr. Hunter was hired effective April 17, 2025. (5) ”All Other Compensation” includes Company matching contributions to the 401(k) plan in the amounts of $5,103 for the year 2024. (6) Ms. Poe resigned on July 17, 2024. 24 Outstanding Equity Awards At Fiscal Year-End The following table sets forth information for the named executive officers regarding any common share purchase options, stock awards or equity incentive plan awards that were outstanding as of December 31, 2025. Name Number of Securities Underlying Unexercised Options (#) Exercisable Number of Securities Underlying Unexercised Options (#) Unexercisable Option Exercise Price ($/Sh) Option Expiration Date Number of Shares or Units of Stock that have not Vested (#) Market Value of Shares or Units of Stock that have not Vested ($) Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that have not Vested (#) Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights that have not Vested Ashley B. Smith — — — — — — — — Dominic L. Hunter — — — — — — — — TOTAL — — — — — — Compensation of Directors 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 $16,500. The Company does not pay any additional compensation to directors who are members of management or are employed by the Company, but the Company reimburses all directors for out-of-pocket expenses incurred in connection with attending Board and committee meetings or otherwise in their capacity as directors. Fiscal 2025 Director Compensation Name Fees Earned or Paid in Cash ($) Stock Awards ($) Option Awards ($) Non-Equity Incentive Plan Compensation Non-Qualified Deferred Compensation Earnings All Other Compensation Total ($) Ashley B. Smith (1) — — — — — — — James Russell Bruner 55,000 15,003 — — — — 70,003 Matthew I. Smith (2) — — — — — — — Read Van de Water 55,000 15,003 — — — — 70,003 Richard Gerhardt 55,000 15,003 — — — — 70,003 (1) All compensation for Mr. A. Smith is reported in Item 11. Executive Compensation. (2) Mr. M. Smith is employed by the Company. No additional compensation paid related to his position as a director. 25 Employment Contracts and Termination of Employment and Change in Control Arrangements. The Company has entered into an employment agreement (the “Employment Agreement”), dated as of November 11, 2020, with Ashley B. Smith pursuant to which Mr. Smith serves as the Chief Executive Officer and President of the Company. The Employment Agreement was initially for a term of three years commencing on November 11, 2020 (the “Effective Date”) through and including November 10, 2023 (the “Employment Period”). Commencing on the first anniversary of the Effective Date, and on each annual anniversary thereafter (such date and each annual anniversary thereof shall be hereinafter referred to as the “Renewal Date”), unless previously terminated, the Employment Period shall be automatically extended so as to terminate three years from such Renewal Date, unless at least 180 days prior to the Renewal Date the Company shall give notice to Mr. Smith, or Mr. Smith shall give notice to the Company, that the Employment Period shall not be so extended. The Employment Agreement provided for an initial base salary (“Base Salary”) of $300,000 per year, with an increase of no less than 3% per annum, based on advice provided by a compensation consultant in 2019. Mr. Smith’s Base Salary shall be reviewed annually by the Compensation Committee of the Board of Directors (the “Compensation Committee”) pursuant to its normal performance review policies for senior executives and may be increased but not decreased. Mr. Smith is also entitled to receive an annual bonus incentive payment (the “Incentive Bonus Payment”) as determined by the Compensation Committee in its discretion and, if applicable, in accordance with the terms of any applicable incentive plan of the Company and subject to the achievement of any performance goals established by the Compensation Committee with respect to such fiscal year. Mr. Smith shall also be eligible to participate in long term cash and equity incentive plans and programs applicable to senior officers of the Company. The Employment Agreement further provides that if Mr. Smith is terminated by the Company without Cause or leaves the Company with Good Reason (generally, for material diminution in Mr. Smith’s Base Salary, target Incentive Bonus Payment, or position, authority, duties or responsibilities, relocation of Mr. Smith’s principal place of business to a location more than 30 miles from Mr. Smith’s principal place of business or material breach by the Company of the Employment Agreement), Mr. Smith shall be paid his Base Salary pro-rated through the date of termination, any Incentive Bonus Payment earned for a prior award period but not yet paid, any accrued vacation or paid time off to the extent not paid and unreimbursed business expenses (collectively, the “Accrued Obligations”) and any other amounts or benefits required to be paid or provided or which Mr. Smith is eligible to receive through the date of termination (the “Other Benefits”). In the event such termination occurs within two years following a change of control, Mr. Smith shall also be entitled to a lump sum payment equal to the product of (a) 2.99 multiplied by (b) the sum of Mr. Smith’s Base Salary in effect prior to such termination and the Target Incentive Bonus Payment for the year of termination of employment (or, if higher, or if no Target Incentive Bonus Payment has been established for such year, the Incentive Bonus Payment for the year prior to the date of termination). In the event such termination does not occur within two years following a change of control, Mr. Smith shall be entitled to receive an aggregate amount, payable in equal monthly cash payments over a period of 24 months, equal to the product of (a) 2.0 multiplied by (b) the sum of Mr. Smith’s Base Salary in effect prior to such termination and the Target Incentive Bonus Payment for the year of termination of employment (or, if higher, or if no Target Incentive Bonus Payment has been established for such year, the Incentive Bonus Payment for the year prior to the date of termination). The Company shall also continue to provide Mr. Smith and his dependents with health and other insurance coverage for 24 months following such termination. If Mr. Smith’s employment is terminated for Cause, because Mr. Smith voluntarily resigns without Good Reason or due to the death of Mr. Smith, Mr. Smith, or his estate, as applicable, shall be paid the Accrued Obligations and the Other Benefits. If Mr. Smith’s employment is terminated due to disability, Mr. Smith shall be paid his Base Salary in equal monthly payments for one year commencing on the date of termination, the Target Incentive Bonus Payment for the year of termination of employment (or, if no Target Incentive Bonus Payment has been established for such year, the Incentive Bonus Payment for the year prior to the date of termination), the Accrued Obligations and the Other Benefits. Mr. Smith is also subject to non-competition and non-solicitation restrictions during the Employment Period and for a period of two years thereafter. The Company has an agreement with its former Chief Executive Officer and former Chairman of the Board, Rodney I. Smith. Mr. Smith ceased providing services as Chief Executive Officer in May 2018. The agreement provides for an annual royalty fee of $99,000 payable as consideration for his assignment to the Company of all of Mr. Smith’s rights, title and interest in certain patents. Payment of the royalty continues for as long as the Company is using the inventions underlying the unexpired patents. Mr. Smith is currently being compensated with respect to royalty payments in accordance with the agreement. 26 Compensation Committee Interlocks and Insider Participation No member of the Compensation Committee is an officer or employee of the Company or has or had at any time any relationship with the Company that requires disclosure under Item 404 of Regulation S-K. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 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 Beneficially Owned (2) Percentage of Class Rodney I. Smith (1)(3) 534,499 10.1 % Ashley B. Smith (1)(3) 177,689 3.3 % James Russell Bruner (1) 7,008 * Matthew I. Smith (1)(3) 10,206, * Read Van de Water (1) 414 * Richard Gerhardt (1) 7,206 * Dominic L. Hunter (1) 408 * Thompson Davis & Co., Inc. (4) 1,834,327 34.6 % All directors and executive officers as a group (6 persons) 202,931 3.8 % * Less than 1%. (1) The address for each of Messrs. Rodney I. Smith, Ashley B. Smith, James Russell Bruner, Matthew I. Smith, Richard Gerhardt, Dominic L. Hunter and Ms. Read Van de Water is c/o Smith-Midland Corporation, P.O. Box 300, 5119 Catlett Road, Midland, Virginia 22728. (2) Pursuant to the rules and regulations of the Securities and Exchange Commission, shares of Common Stock that an individual or group has a right to acquire within 60 days pursuant to the exercise of options or warrants are deemed to be outstanding for the purposes of computing the percentage ownership of such individual or group, but are not deemed to be outstanding for the purpose of computing the percentage ownership of any other person shown in the table. (3) Ashley B. Smith and Matthew I. Smith are brothers and the sons of Rodney I. Smith. Each of Rodney I. Smith, Ashley B. Smith, and Matthew I. Smith disclaims beneficial ownership of the other’s shares of Common Stock. (4) Address of holder is 9030 Stony Point Pkwy, Ste 100, Richmond, VA 23235. Based on the Form 13-F filed with the Securities and Exchange Commission on January 12, 2026 by Thompson Davis & Co., Inc. 27 EQUITY COMPENSATION PLAN INFORMATION The following table sets forth certain information as of December 31, 2025 regarding the Company’s equity compensation plans. Plan Category (a) Number of securities to be issued upon exercise of outstanding options, warrants and rights (b) Weighted average exercise price of outstanding options, warrants and rights (c) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))(1) Equity compensation plans approved by security holders — — — Equity compensation plans not approved by security holders (1) — — 89,061 Total — — 89,061 (1) A brief description of the Company’s 2016 Equity Incentive Plan (the “Equity Plan”) is contained in Note 8 of the Notes to Consolidated Financial Statements. The Equity Plan has a balance of 89,061 shares of stock unissued and available for award at December 31, 2025. On October 13, 2016, the Company’s Board of Directors adopted the Equity Plan. Employees, directors and consultants of the Company are eligible to participate in the Equity Plan. The Equity Plan is administered by the Compensation Committee of the Board of Directors or the full Board during such times as no committee is appointed by the Board or during such times as the Board is acting in lieu of the committee (the “Committee”). The Equity Plan provides for the grant of equity-based compensation in the form of restricted stock, restricted stock units, performance shares, performance cash and other share-based awards. The Committee has the authority to determine the type of award, as well as the amount, terms and conditions of each award, under the Equity Plan subject to the limitations and other provisions of the Equity Plan. An aggregate of 400,000 shares of the Company’s common stock, par value $.01 per share, were authorized for issuance under the Equity Plan, subject to adjustment for stock splits, dividends, distributions, recapitalizations and other similar transactions or events, of which amount 89,061 remains available for issuance at December 31, 2025. If any shares subject to an award are forfeited, expire, or otherwise terminate without issuance of such shares, such shares shall, to the extent of such forfeiture, expiration, or termination, again be available for issuance under the Equity Plan. In response to Item 402(x)(1) of Regulation S-K, the Company does not currently have any program, plan or obligation that requires it to grant equity awards on specific dates. The Compensation Committee does not have a practice or policy of granting equity awards in anticipation of the release of material non-public information and the Company does not time the release of material non-public information in coordination with grants of equity awards in a manner that intentionally benefits our named executive officers. 28 Item 13. Certain Relationships and Related Transactions, and Director Independence There are three independent directors of the Company, Mr. James Russell Bruner, Mr. Richard Gerhardt, and Ms. Read Van de Water. The test utilized by the Company for the determination of independence is that under the NASDAQ listing standards. On an ongoing basis, the Company reviews all “related party transactions” (those transactions that are required to be disclosed by SEC Regulation S-K, Item 404), if any, for potential conflicts of interest and all such transactions must be approved by the Board of Directors. No transactions for the year ended December 31, 2025 meet the criteria for disclosure. Item 14. Principal Accountant Fees and Services 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”), 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; for tax compliance, tax advice, and tax planning; and for all other fees for products and services are shown in the table below (in thousands). Audit Fees. Fees charged as audit fees are for the audit of the Company’s annual financial statements and review of financial statements included in the Company’s Forms 10-K and 10-Q’s or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements. The Audit Committee has established pre-approval policies and procedures with respect to the engagement of the Company’s independent accountants and audit and permissible non-audit services, provided by the independent accountants. Such policies and procedures do not include the delegation of the responsibilities of the Audit Committee to management. All of the services provided by BDO described below (in thousands) for 2025 and 2024, respectively, were pre-approved by the Audit Committee. 2025 2024 Audit Fees $ 525 $ 545 Tax Fees — — Audit-Related Fees — — All Other Fees — — Total Fees $ 525 $ 545 29 PART IV Item 15. Exhibits and Financial Statement Schedules (1) The financial statements of the Company are included following Part IV of this Form 10-K. (2) Schedules have been omitted since they are either not applicable, not required or the information is included elsewhere herein. (3) The following exhibits are filed herewith: Number Description 3.1 Certificate of Incorporation, as amended (Incorporated by reference to the Company’s Registration Statement on Form SB-2 (No. 33-89312) declared effective by the Commission on December 13, 1995). 3.2 Bylaws (Incorporated by reference to the Company’s Annual Report on Form 10-K/A filed with the Securities and Exchange Commission on September 24, 2024). 4.1 Specimen Common Stock Certificate (Incorporated by reference to the Company’s Registration Statement on Form SB-2 (No. 33-89312) declared effective by the Commission on December 13, 1995). 10.1 Employment Agreement, dated September 30, 2002, between the Company and Rodney I. Smith. (Incorporated by reference to the Company’s Annual Report on Form 10-KSB for the year ended December 31, 2003). 10.2 Amendment No. 1 to Employment Agreement, dated as of December 31, 2008, between the Company and Rodney I. Smith (Incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 2008). 10.3 Commitment Letter, dated November 27, 2023, for the renewal of the equipment line of credit in the amount of $1,500,000 with 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 December 6, 2023). 10.4 Commercial Line of Credit Agreement and Note, dated January 1, 2025, for the renewal of the line of credit in the amount of $5,000,000 with Burke & Herbert Bank & Trust Company, formerly Summit Community Bank. 10.5 Commercial Revolving Promissory Note, dated January 1, 2025, issued by the Company to Burke & Herbert Bank & Trust Company. 10.6 Commercial Security Agreement, dated January 1, 2025, with Burke & Herbert Bank & Trust Company, formerly Summit Community Bank. 10.7 Promissory Note, dated October 11, 2019, in the amount of $2,228,000 issued by the Company to Summit Community Bank (now known as Bank 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 October 17, 2019). 10.8 Deed of Trust dated October 11, 2019, related to the Promissory Note dated October 11, 2019 between the Company and 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 October 17, 2019). 10.9 Commercial Security Agreement dated October 11, 2019, related to the Promissory Note dated October 11, 2019 between the Company and 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 October 17, 2019). 10.10 Promissory Note, dated March 27, 2020, in the amount of $2,701,404 issued by the Company to 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 April 1, 2020). 10.11 Business Loan Agreement related to the Promissory Note dated March 27, 2020 (Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 1, 2020). 10.12 Modification and Supplemental Deed of Trust, dated March 27, 2020, between the Company and 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 April 1, 2020) to the Credit Line Deed of Trust, dated April 20, 2011 (Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 28, 2010). 10.13 Modification Deed of Trust, dated March 27, 2020, between the Company and 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 April 1, 2022) to the Credit Line Deed of Trust, dated September 12, 2013 (Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 12, 2013). 10.14 2016 Equity Incentive Plan (Incorporated by reference to the Registration Statement on Form S-8 (No. 333-214788) filed on November 23, 2016). 30 10.15 Employment Agreement, dated as of November 11, 2020, between the Company and Ashley B. Smith (Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 17, 2020). 10.16 Smith-Midland Corporation Long-Term Incentive Plan (Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 15, 2022). 10.17 Purchase and Sale Agreement, dated November 1, 2021, between the Company and Jeffrey A. Leonard, Patricia Ann Leonard and Al-Mara Farm Incorporation (Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 19, 2021). 10.18 Purchase and Sale Agreement, dated November 1, 2021, between the Company and Rodney I. Smith (Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 19, 2021). 10.19 Commercial Promissory Note, dated February 10, 2022, in the amount of $2,805,000 issued by the Company to 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). 10.20 Business Loan Agreement, dated February 10, 2022, between Summit Community Bank (now known as Burke & Herbert Bank & Trust Company) and the Company and (Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 16, 2022). 10.21 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). 19 Company Insider Trading Policy (Incorporated by reference to the Company’s Annual Report on Form 10-KSB for the year ended December 31, 2024). 21.1 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). 23.1 Consent of BDO USA, P.C. 31.1 Certification of Chief Executive Officer. 31.2 Certification of Principal Financial Officer. 32.1 Certification pursuant 18 U.S.C. Section 1350 as adapted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 97 Company Clawback Policy. (Incorporated by reference to the Company’s Annual Report on Form 10-KSB for the year ended December 31, 2024). 101.INS XBRL Instance Document. 101.SCH XBRL Taxonomy Extension Schema Document. 101.CAL XBRL Taxonomy Extension Calculation Linkbase Document. 101.DEF XBRL Taxonomy Extension Definition Linkbase Document. 101.LAB XBRL Taxonomy Extension Label Linkbase Document. 101.PRE XBRL Taxonomy Extension Presentation Linkbase Document. Item 16. Form 10-K Summary None 31 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. SMITH-MIDLAND CORPORATION Date: April 14, 2026 By: /s/ Ashley B. Smith Ashley B. Smith Chief Executive Officer and President (Principal Executive Officer) Date: April 14, 2026 By: /s/ Dominic L. Hunter Dominic L. Hunter Chief Financial Officer (Principal Financial and Accounting Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant in the capacities and on the dates indicated. Name Capacity Date /s/ Ashley B. Smith Director April 14, 2026 Ashley B. Smith /s/ James Russell Bruner Director April 14, 2026 James Russell Bruner /s/ Matthew I. Smith Director April 14, 2026 Matthew Smith /s/ Read Van de Water Director April 14, 2026 Read Van de Water /s/ Richard Gerhardt Director April 14, 2026 Richard Gerhardt 32 Smith-Midland Corporation and Subsidiaries Consolidated Financial Statements Years Ended December 31, 2025 and 2024 Smith-Midland Corporation and Subsidiaries Contents Report of Independent Registered Public Accounting Firm (BDO USA, P.C., Richmond, VA, PCAOB ID#: 243 ) F-2 Consolidated Financial Statements Consolidated Balance Sheets F-3 Consolidated Statements of Income F-5 Consolidated Statements of Stockholders’ Equity F-6 Consolidated Statements of Cash Flows F-7 Notes to Consolidated Financial Statements F-9 F-1 Table of Contents Report of Independent Registered Public Accounting Firm Shareholders and Board of Directors Smith-Midland Corporation Midland, Virginia Opinion on the Consolidated Financial Statements 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 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 These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. 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 $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. We identified the estimation of the allowance for credit losses of accounts receivable – trade billed as a critical audit matter. The principal considerations for our determination are that the allowance for credit losses involves significant judgement in assessing certain inputs and assumptions, including historical experience and current customer specific conditions. In addition, the Company identified certain material weaknesses which impacted the extent of our procedures. Auditing these elements involved especially challenging auditor judgment due to the nature and extent of audit effort required to address these matters. The primary procedures we performed to address this critical audit matter included: · Testing the collectability of certain past due accounts receivable balances by obtaining and assessing the underlying support for the collectability of such amounts, including collections occurring subsequent to year-end, review of contract retention provisions and their application to invoicing, inspection of customer correspondence, and inquiries of financial management. · Performing a retrospective review over the allowance in prior periods as compared to actual write-offs. /s/ BDO USA, P.C. We have served as the Company’s auditor since 2023. Richmond, Virginia April 14, 2026 F-2 Table of Contents Smith-Midland Corporation and Subsidiaries Consolidated Balance Sheets (in thousands, except share and per share data) December 31, 2025 2024 ASSETS Current assets Cash $ 11,884 $ 7,548 Accounts receivable, net Trade - billed (less allowances of $ 539 and $ 1,130 , respectively), including contract retentions 27,228 19,420 Trade - unbilled 1,173 1,327 Inventories, net Raw materials 1,710 2,078 Finished goods 5,218 4,599 Prepaid expenses 1,511 854 Refundable income taxes 23 23 Total current assets 48,747 35,849 Property and equipment, net 38,478 31,704 Other assets 504 438 Total assets $ 87,729 $ 67,991 See accompanying notes to consolidated financial statements. F-3 Table of Contents Smith-Midland Corporation and Subsidiaries Consolidated Balance Sheets (in thousands, except share and per share data) (continued) December 31, 2025 2024 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Accounts payable - trade $ 5,482 $ 4,741 Accrued expenses and other liabilities 907 429 Deferred revenue 1,128 4,313 Accrued compensation 2,164 1,770 Accrued income tax 1,602 1,539 Operating lease liabilities 20 21 Current maturities of notes payable 648 658 Customer deposits 2,381 1,539 Total current liabilities 14,332 15,010 Deferred revenue 13,763 6,222 Operating lease liabilities 70 90 Notes payable - less current maturities 3,799 4,436 Deferred tax liability 1,461 494 Total liabilities 33,425 26,252 Commitments and contingencies (Note 9) Stockholders’ equity Preferred stock, $.01 par value; authorized 1,000,000 shares, none issued and outstanding — — Common stock, $.01 par value; authorized 8,000,000 shares; 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 54 54 Additional paid-in capital 7,776 7,717 Treasury stock, at cost, 40,920 shares ( 102 ) ( 102 ) Retained earnings 46,576 34,070 Total stockholders’ equity 54,304 41,739 Total liabilities and stockholders’ equity $ 87,729 $ 67,991 See accompanying notes to consolidated financial statements. F-4 Table of Contents Smith-Midland Corporation and Subsidiaries Consolidated Statements of Income (in thousands, except per share data) Year Ended December 31, 2025 2024 Revenue Product sales $ 48,276 $ 45,624 Barrier rentals 19,705 12,019 Royalty income 4,172 3,261 Shipping and installation revenue 21,293 17,604 Total revenue 93,446 78,508 Cost of sales 67,408 58,498 Gross profit 26,038 20,010 General and administrative expenses 5,668 6,554 Selling expenses 3,376 3,557 Total operating expenses 9,044 10,111 Operating income 16,994 9,899 Other income (expense) Interest expense ( 225 ) ( 231 ) Interest income 166 47 Gain on sale of assets 20 19 Other income, net 71 84 Total other income (expense), net 32 ( 81 ) Income before income tax expense 17,026 9,818 Income tax expense 4,520 2,143 Net income $ 12,506 $ 7,675 Basic and diluted earnings per share $ 2.36 $ 1.45 See accompanying notes to consolidated financial statements. F-5 Table of Contents Smith-Midland Corporation and Subsidiaries Consolidated Statements of Stockholders’ Equity (in thousands, except share data) Common Stock Treasury Stock Additional Paid-in Retained Shares Amount Shares Amount Capital Earnings Total Balance, December 31, 2023 5,349,599 $ 54 ( 40,920 ) $ ( 102 ) $ 7,814 $ 26,395 $ 34,161 Vesting of restricted stock — — — — 45 — 45 Issuance of restricted stock 767 — — — — — — Settlement of restricted stock ( 3,840 ) — — — ( 142 ) — ( 142 ) Net income — — — — — 7,675 7,675 Balance, December 31, 2024 5,346,526 $ 54 ( 40,920 ) $ ( 102 ) $ 7,717 $ 34,070 $ 41,739 Vesting of restricted stock — — — — 59 — 59 Issuance of restricted stock 1,948 — — — — — — Forfeiture of restricted stock ( 1,000 ) — — — — — — Net income — — — — — 12,506 12,506 Balance, December 31, 2025 5,347,474 $ 54 ( 40,920 ) $ ( 102 ) $ 7,776 $ 46,576 $ 54,304 See accompanying notes to consolidated financial statements. F-6 Table of Contents Smith-Midland Corporation and Subsidiaries Consolidated Statements of Cash Flows (in thousands) Year Ended December 31, 2025 2024 Reconciliation of net income to net cash provided by (used in) operating activities Net income $ 12,506 $ 7,675 Adjustments to reconcile net income to net cash provided by (used in) operating activities Depreciation and amortization 2,887 2,664 Gain on sale of fixed assets ( 20 ) ( 19 ) Allowance for credit losses ( 591 ) 325 Stock compensation 59 45 Settlement of restricted stock — ( 142 ) Inventory Reserve ( 22 ) 13 Deferred taxes 966 ( 1,157 ) (Increase) decrease in Accounts receivable – billed ( 7,217 ) ( 2,536 ) Accounts receivable – unbilled 154 ( 802 ) Inventories ( 229 ) ( 1,541 ) Prepaid expenses and other assets ( 747 ) 290 ) Refundable income taxes — ( 23 ) Increase (decrease) in Accounts payable – trade 442 ( 3,022 ) Accrued expenses and other liabilities 457 ( 401 ) Deferred revenue 4,356 3,395 Accrued compensation 394 566 Accrued income taxes 64 1,067 Customer deposits 842 ( 1,239 ) Net cash provided by (used in) operating activities $ 14,301 $ 5,158 See accompanying notes to consolidated financial statements. F-7 Table of Contents Smith-Midland Corporation and Subsidiaries Consolidated Statements of Cash Flows (in thousands) (continued) December 31, 2025 2024 Cash flows from investing activities Purchases of property and equipment ( 9,338 ) ( 6,203 ) Proceeds from sale of property and equipment 20 53 Net cash provided by (used in) investing activities ( 9,318 ) ( 6,150 ) Cash flows from financing activities Repayments of long-term borrowings ( 647 ) ( 635 ) Net cash provided by (used in) financing activities ( 647 ) ( 635 ) Net increase (decrease) in cash 4,336 ( 1,627 ) Cash, beginning of year 7,548 9,175 Cash, end of year $ 11,884 $ 7,548 Supplemental cash flow information: Cash payments for interest $ 225 $ 223 Cash payments for income taxes, net of refunds $ 3,490 $ 2,256 Capital expenditures in accounts payable $ 127 $ 426 See accompanying notes to consolidated financial statements. F-8 Table of Contents Smith-Midland Corporation and Subsidiaries Notes to Consolidated Financial Statements 1. NATURE OF BUSINESS Smith-Midland Corporation and its wholly-owned subsidiaries (the “Company”) develop, manufacture, license, sell and install precast concrete products and systems for the construction, transportation and utilities industries in the Mid-Atlantic, Northeastern, Midwestern and Southeastern regions of the United States. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The accompanying consolidated financial statements include the accounts of Smith-Midland Corporation and its wholly-owned subsidiaries. The Company’s wholly-owned subsidiaries consist of Smith-Midland Corporation, a Virginia corporation, Smith-Carolina Corporation, a North Carolina corporation, Smith-Columbia Corporation, a South Carolina corporation, Easi-Set Industries, Inc., a Virginia corporation, Concrete Safety Systems, Inc., a Virginia corporation, and Midland Advertising and Design, Inc., doing business as Midland Advertising + Design, a Virginia corporation. All material intercompany accounts and transactions have been eliminated in consolidation. Cash Cash is maintained at financial institutions and, at times, balances may exceed federally insured limits. The Company has not experienced any losses related to these balances. Inventories Inventories are stated at the lower of cost, using the first-in, first-out (“FIFO”) method, or net realizable value. Inventory reserves (in thousands) were approximately $ 149 and $ 173 at December 31, 2025 and 2024, respectively. Property and Equipment Property and equipment is stated at cost. Expenditures for ordinary maintenance and repairs are expensed as incurred. Costs of improvements, renewals, and major replacements are capitalized. At the time properties are retired or otherwise disposed of, the related cost and allowance for depreciation are eliminated from the accounts and any gain or loss on disposition is reflected in income. Depreciation expense is computed using the straight-line method over the following estimated useful lives: Years Buildings and improvements 10 - 40 Trucks and automotive equipment 3 - 10 Shop machinery and equipment 3 - 10 Land improvements 10 - 15 Assets held for lease (Rental equipment) 5 - 10 Office equipment 3 - 10 F-9 Table of Contents Smith-Midland Corporation and Subsidiaries Notes to Consolidated Financial Statements (continued) Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company files tax returns in the U.S. Federal and various state jurisdictions. The Company recognizes, when applicable, interest and penalties related to income taxes in other income (expense) section of its consolidated statement of income. 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. Stock Compensation On October 13, 2016, the Board of Directors of the Company adopted the 2016 Equity Incentive Plan which allows the Company to grant up to 400,000 shares of common stock of the Company to employees, officers, directors and consultants . The grants may be in the form of restricted or performance shares of common stock of the Company. The fair value of each restricted stock grant is estimated to be the sales price of the common stock at the close of business on the day of the grant. In addition, the Company accounts for forfeitures of awards as they occur. 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 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. F-10 Table of Contents Smith-Midland Corporation and Subsidiaries Notes to Consolidated Financial Statements (continued) Product Sales - Point in Time 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. 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. contract assets) balances (in thousands) are as follows: Year Ended December 31, 2025 2024 Accounts receivable trade – unbilled, beginning of the period $ 1,327 $ 525 Accounts receivable trade – unbilled, end of the period 1,173 1,327 Amounts invoiced in the period from amounts included at the beginning of the period 1,220 429 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. contract liabilities) balances (in thousands) are as follows: Year Ended December 31, 2025 2024 Customer deposits, beginning of the period $ 1,539 $ 2,779 Customer deposits, end of the period 2,381 1,539 Revenue recognized in the period from amounts included at the beginning of the period 869 2,626 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. F-11 Table of Contents The Company’s deferred revenue (i.e. contract liabilities) balances (in thousands) related to Topic 606 are as follows: Year Ended December 31, 2025 2024 Deferred revenue, beginning of the period $ 4,453 $ 2,685 Deferred revenue, end of the period 6,871 4,453 Revenue recognized in the period from amounts included at the beginning of the period 953 600 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 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, 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, 2025 2024 Balance at beginning of period $ 1,130 $ 806 Recoveries of amounts previously written off ( 245 ) ( 467 ) Provision (benefit) for Expected Credit Losses ( 346 ) 791 Balance at end of period $ 539 $ 1,130 Barrier Rentals - Lease Income 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. F-12 Table of Contents The Company’s deferred lease revenue balances (in thousands) related to Topic 842, Leases are as follows: Year Ended December 31, 2025 2024 Deferred lease revenue, beginning of the period $ 6,082 $ 4,456 Deferred lease revenue, end of the period 8,020 6,082 Revenue recognized in the period from amounts included at the Beginning of the period 3,279 2,067 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) 2026 $ 4,902 2027 2,342 2028 503 2029 218 2030 55 $ 8,020 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 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 F-13 Table of Contents Smith-Midland Corporation and Subsidiaries Notes to Consolidated Financial Statements (continued) Shipping and Installation 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 In the following table, revenue is disaggregated by primary sources of revenue (in thousands): Revenue by Type (Disaggregated Revenue) 2025 2024 Product Sales: Soundwall Sales $ 14,640 $ 11,825 Architectural Sales 3,337 4,205 SlenderWall Sales 3,568 - Miscellaneous Wall Sales 3,788 5,104 Barrier Sales 4,356 3,882 Easi-Set and Easi-Span Building Sales 11,482 6,666 Utility Sales 4,297 7,751 Miscellaneous Sales 2,808 6,191 Total Product Sales 48,276 45,624 Barrier Rentals 19,705 12,019 Royalty Income 4,172 3,261 Shipping and Installation Revenue 21,293 17,604 Total Service and Other Revenue 45,170 32,884 Total Revenue $ 93,446 $ 78,508 Smith-Midland products are typically sold pursuant to an implicit warranty as to merchantability only. Warranty claims are reviewed and resolved on a case by case method. Although the Company does incur costs for warranty claims, historically such amounts are minimal. The revenue items: soundwall sales, architectural sales, SlenderWall® sales, miscellaneous wall sales, miscellaneous sales, barrier rentals, and royalty income are recognized as revenue over time. The revenue items: barrier sales, Easi-Set and Easi-Span building sales, utility sales, and shipping and installation revenue are recognized as revenue at a point in time. Concentration of Risk Historically, various customers have comprised greater than 10% of revenue during a given quarter or year. These customers are typically not the same quarter to quarter or year to year. The Company views revenue details by jobs, and not by customers. In the event a customer were to go out of business during a project, it is likely that the owner of the project would assign a new contractor to the job, and the Company would complete its scope of work. Therefore, the Company believes that it does not have a short-term vulnerability of severe impact to operations. In cases where customers are less than 10% of revenue, the Company assesses if there is a near term severe impact. 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. 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 The Company excludes sales taxes as part of revenue, and includes use taxes on construction materials reported in cost of sales. Segment Reporting Operating segments are defined as components of an enterprise for which separate financial information is available and evaluated regularly by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources and assess performance. The Company currently operates in one operating and reportable business segment for financial reporting purposes (the “Precast Concrete Segment”). The Company’s CODM is the Chief Executive Officer (“CEO”) and President. The Precast Concrete Segment derives revenues from customers by providing products and services to customers. 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 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. F-14 Table of Contents Smith-Midland Corporation and Subsidiaries Notes to Consolidated Financial Statements (continued) Risks and Uncertainties The Company sells products to highway contractors operating under government funded highway programs and other customers and extends credit based on an evaluation of the customer’s financial condition, generally without requiring collateral. Exposure to losses on receivables is principally dependent on each customer’s financial condition. The Company monitors its exposure to credit losses and maintains allowances for anticipated losses. Management reviews accounts receivable on a regular basis to determine the probability of collection. In performing this evaluation, the Company analyzes the payment history and its significant past due accounts, subsequent cash collections on these accounts, comparative accounts receivable aging statistics, and other customer-specific considerations existing and known as of the time of the analysis. Based on this information, along with other related factors, the Company develops an estimate of the uncollectible amounts included in accounts receivable. Management believes the allowance for credit losses at December 31, 2025 is adequate. However, actual write-offs may exceed the recorded allowance. Due to inclement weather, the Company may experience reduced revenue from December through February and may realize a substantial part of its revenue during the other months of the year. Fair Value of Financial Instruments The Company uses a three-level fair value hierarchy that categorizes assets and liabilities measured at fair value based on the observability of the inputs utilized in the valuation. The fair value hierarchy gives the highest priority to the quoted prices in active markets for identical assets and liabilities and lowest priority to unobservable inputs. Level 1 – Financial assets and liabilities whose values are based on unadjusted quoted market prices for identical assets and liabilities in an active market that the Company has the ability to access. Level 2 – Financial assets and liabilities whose values are based on quoted prices in markets that are not active or model inputs that are observable for substantially the full term of the asset or liability. 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 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. Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles (U.S. GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Advertising Costs The Company expenses all advertising costs as incurred. Advertising expense (in thousands) was approximately $ 306 and $ 373 in 2025 and 2024, respectively. Earnings Per Share Earnings per share are based on the weighted average number of shares of common stock and dilutive common stock equivalents outstanding. Basic earnings per share is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflect the potential dilution of securities that could share in earnings of the Company. Long-Lived Assets The Company reviews the carrying values of its long-lived assets including identifiable intangible assets for possible impairment whenever events or changes in circumstances indicate that the carrying amount of assets may not be recoverable based on undiscounted estimated future operating cash flows. When any such impairment exists, the related assets will be written down to fair value. No impairment losses have been recorded during the years ended December 31, 2025 and 2024. Recent Accounting Pronouncements In December 2023, the Financial Accounting Standards Board (FASB) issued ASU 2023-09, Improvements to Income Tax Disclosures. The guidance is intended to improve income tax disclosure requirements by requiring (i) consistent categories and greater disaggregation of information in the rate reconciliation and (ii) the disaggregation of income taxes paid by jurisdiction. The guidance makes several other changes to the income tax disclosure requirements. 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. F-15 Table of Contents Smith-Midland Corporation and Subsidiaries Notes to Consolidated Financial Statements (continued) 3. PROPERTY AND EQUIPMENT, NET Property and equipment, net consists of the following (in thousands): December 31, 2025 2024 Land and land improvements $ 8,852 $ 8,957 Buildings and improvements 14,109 13,461 Machinery and equipment 23,096 18,681 Assets held for lease (Rental equipment) 16,667 12,125 Total property and equipment 62,724 53,224 Less: accumulated depreciation ( 24,246 ) ( 21,520 ) Property and equipment, net of accumulated depreciation $ 38,478 $ 31,704 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. 4. NOTES PAYABLE Notes payable consist of the following (in thousands): December 31, 2025 2024 Note payable to Burke & Herbert Bank & Trust, formally Summit Community Bank (the “Bank”), maturing February 2037 ; with monthly payments of approximately $ 21 of principal and interest fixed at 4.09 %; net of $ 21 and $ 22 of unamortized deferred loan costs, respectively; collateralized by the related real property. $ 2,226 $ 2,379 Note payable to the Bank, maturing October 2029 ; 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 unamortized deferred loan costs, respectively; collateralized by all assets of Smith-Carolina Corporation and guaranteed by the Company. 942 1,166 Note payable to the Bank, maturing March 2030 ; with monthly payments of approximately $ 27 of principal and interest fixed at 3.99 %; net of $ 18 and $ 22 of unamortized deferred loan costs, respectively; collateralized by the Company’s property, plant, and buildings. 1,279 1,536 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%.The loan was paid off in full during the year ended December 31, 2025. — 13 Total Notes Payable Outstanding 4,447 5,094 Less current maturities of notes payable ( 648 ) ( 658 ) Notes Payable-less current maturities $ 3,799 $ 4,436 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 (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. The loan is collateralized by a first lien position on all equipment purchased under the line. The commitment for the guidance line of credit matured on October 1, 2024. 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. F-16 Table of Contents Smith-Midland Corporation and Subsidiaries Notes to Consolidated Financial Statements (continued) 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): Year Ending December 31, 2026 $ 648 2027 676 2028 707 2029 710 2030 271 Thereafter 1,435 $ 4,447 5. RELATED PARTY TRANSACTIONS The Company has an employment agreement with its former Chief Executive Officer and Chairman of the Board, Rodney I. Smith. Mr. Smith received his salary, pursuant to the terms of the agreement, through September 2021. While Mr. Smith has ceased providing executive officer services pursuant to such agreement, the agreement provides for an annual royalty fee (in thousands) of $ 99 payable as consideration for his assignment to the Company of all of his rights, title and interest in certain patents. Payment of the royalty continues for as long as the Company is using the inventions underlying the unexpired patents. F-17 Table of Contents Smith-Midland Corporation and Subsidiaries Notes to Consolidated Financial Statements (continued) 6. INCOME TAXES Income tax expense (benefit) is comprised of the following (in thousands): December 31, 2025 2024 Federal: Current $ 2,703 $ 2,660 Deferred 728 ( 1,016 ) Total Federal 3,431 1,644 State: Current 851 640 Deferred 238 ( 141 ) Total State 1,089 499 Income tax expense/(benefit) $ 4,520 $ 2,143 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). 2025 Income taxes at U.S. Federal Statutory Tax Rate $ 3,575 21.0 % Nontaxable or Nondeductible Items Other 27 0.2 % State and Local Income Tax, Net of Federal (National) Income Tax Effect (1) 893 21.0 % Other Adjustments 25 0.1 % Effective tax rate $ 4,520 26.5 % (1) 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 $ 2,074 21.0 % Increase (decrease) in taxes resulting from: State income taxes, net of federal benefit 359 3.6 % Stock compensation ( 175 ) ( 1.8 )% Provision-to-return ( 101 ) ( 1.0 )% Other ( 14 ) ( 0.1 )% Income tax expense $ 2,143 21.7 % F-18 Table of Contents Smith-Midland Corporation and Subsidiaries Notes to Consolidated Financial Statements (continued) December 31, 2025 2024 Deferred tax assets: Net operating loss carryforwards $ 193 $ 224 Allowance for credit losses and doubtful accounts 139 278 Accrued vacation 74 72 Deferred revenue 3,823 2,588 Equity Compensation 21 6 163 (j) interest expense limitation — 16 Lease liability 23 27 Other 147 209 Gross deferred tax assets 4,420 3,420 Deferred tax liabilities: Retainage ( 325 ) ( 389 ) Fixed assets ( 5,286 ) ( 3,371 ) Prepaid expenses ( 230 ) ( 112 ) Amortization – intangibles ( 16 ) ( 15 ) Right-of-use asset ( 23 ) ( 27 ) Gross deferred tax liabilities ( 5,880 ) ( 3,914 ) Net deferred tax liability $ ( 1,460 ) $ ( 494 ) 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 Federal $ 2,693 Virginia 288 District of Columbia (DC) 206 Maryland 182 Other States 121 2025 Total Cash Paid for Income Taxes (Net of Refunds) $ 3,490 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. The state NOLs begin expiring at various times between 2028 and 2037. The Company is no longer subject to U.S. 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. 7. EMPLOYEE BENEFIT PLANS The Company has a savings plan that qualifies under Section 401(k) of the Internal Revenue Code (“IRC”). Participating employees may elect to contribute a percentage of their salary, subject to certain limitations. The Company contributes 50 % of the participant’s contribution, up to 4 % of the participant’s compensation, as a matching contribution. Total match contributions (in thousands) by the Company for the years ended December 31, 2025 and 2024 were approximately $ 253 and $ 284 , respectively. F-19 Table of Contents Smith-Midland Corporation and Subsidiaries Notes to Consolidated Financial Statements (continued) 8. STOCK COMPENSATION On October 13, 2016, the Board of Directors of the Company adopted the 2016 Equity Incentive Plan, which allows the Company to grant up to 400,000 shares of restricted common stock of the Company to employees, officers, directors and consultants and 89,303 share remain available to be granted as of December 31, 2025. The grants may be in the form of restricted or performance shares of common stock of the Company. The fair value of restricted stock awards is estimated to be the market price of the Company’s common stock at the close of date of grant. The Company assumes no forfeitures as they are granted to key executives and board members. Restricted stock activity during the year ended December 31, 2025 is as follows: Service-Based Number of Shares Weighted Average Grant Date Fair Value per Share Non-vested, December 31, 2024 1,000 1,000 $ 19.15 Granted 1,948 1,948 36.24 Vested ( 1,948 ) ( 1,948 ) 28.62 Forfeited 1,000 ) ( 1,000 ) 28.62 Non-vested, December 31, 2025 — — — In 2021, the Compensation Committee and Board of Directors approved a Long-Term Incentive Plan with respect to the grant of stock pursuant to the 2016 Equity Incentive Plan. The final equity amount earned was based on continued service through the three-year performance period ending on December 31, 2023, Board discretion, and performance results. The actual number of performance-based shares of common stock of the Company, if any, earned by the award recipients was determined based on measures that include Earnings Before Interest Taxes Depreciation and Amortization (“EBITDA”) margin, revenue growth, and free cash flow. The EBITDA margin and revenue growth performance targets were set for each of the Minimum, Target, and Maximum levels. In May 2024, the actual performance amount (in thousands) was determined by the Compensation Committee to be $ 579 . 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 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. The Company recognized tax benefits (in thousands) of $ 27 and $ 175 related to stock compensation expense for the years ended December 31, 2025 and 2024, respectively. 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 no unrecognized compensation cost related to the non-vested restricted stock as of December 31, 2025. F-20 Table of Contents Smith-Midland Corporation and Subsidiaries Notes to Consolidated Financial Statements (continued) 9. COMMITMENTS AND CONTINGENCIES The Company is party to legal proceedings and disputes which may arise in the ordinary course of business. In the opinion of the Company, it is unlikely that liabilities, if any, arising from legal disputes will have a material adverse effect on the consolidated financial position of the Company. 10. EARNINGS PER SHARE Earnings per share are calculated as follows (in thousands, except earnings per share): December 31, 2025 2024 Basic earnings per share Income available to common shareholders $ 12,506 $ 7,675 Weighted average shares outstanding 5,305 5,289 Basic earnings per share $ 2.36 $ 1.45 Diluted earnings per share Income available to common shareholders $ 12,506 $ 7,675 Weighted average shares outstanding 5,305 5,289 Dilutive effect of restricted stock — — Total weighted average shares outstanding 5,305 5,289 Diluted earnings per share $ 2.36 $ 1.45 There was no restricted stock or other common stock equivalents excluded from the diluted earnings per share calculation for the years ended December 31, 2025 and December 31, 2024. F-21