AIAI Holdings Corp

Previous wording

Management's Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the accompanying unaudited financial statements and related notes thereto included in "Item 1. Financial Statements" and with the audited financial statements and the related notes included in our Registration Statement filed on May 1, 2026 (“Registration Statement”) . The following discussion and analysis contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth under “Risk Factors” in this quarterly report. See “Forward-Looking Statements".

Current wording

Management's Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to provide the reader of the financial statements with a narrative from the perspective of management on the financial condition, results of operations, liquidity and certain other factors that may affect the Company's operating results. MD&A should be read in conjunction with the accompanying unaudited condensed consolidated financial statements and related notes thereto included in“Item 1. Financial Statements” of this Quarterly Report on Form 10-Q. The following discussion and analysis contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth under “Risk Factors” in this quarterly report. See “Forward-Looking Statements”.

Previous wording

Three Months Ended March 31, 2026 compared to the Three Months Ended March, 31, 2025

Current wording

The following information updates the discussion of the Company's financial condition provided in our registration statement on Form S-1 declared effective on May 6, 2026, and the Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2026 (“Q1 10-Q”), and analyzes the changes in the results of operations between the periods of May 7, 2026 through June 30, 2026 (the“Successor Period”), April 1, 2026 through May 6, 2026 (“Current Predecessor Quarter”), January 1, 2026 through May 6, 2026 (“Current Predecessor YTD Period”), the three months ended June 30, 2025 (“Prior Predecessor Quarter”) and the six months ended June 30, 2025 (“Prior Predecessor YTD Period”).

Previous wording

AIAI Holdings Corporation (“AIAI”) will operate through a unique business model that applies its licensed AI technology to strategic acquired portfolio companies. Our business will generate revenue through products and services distributed by our subsidiary Portfolio Companies, which are the operating companies we will acquire and enhance through AI implementation.

Current wording

AIAI operates through a unique business model that applies its licensed AI technology to strategically acquired portfolio companies. Our business generates revenue through products and services distributed by our subsidiary Portfolio Companies, which are the operating companies we have acquired and continue enhancing through AI implementation.

Previous wording

Our anticipated accelerated timeline of four to six months for the implementation of our AI technology, compared to our perceived industry standard of 24-36 months, represents a significant competitive advantage and drives our financial performance. This accelerated time frame for the implementation of our AI should enable faster revenue recognition from technology services while allowing more rapid realization of operational improvements in acquired companies. There are several reasons why will believe our implementation process will occur more rapidly than traditional software implementations:

Current wording

Our anticipated accelerated timeline of four to six months for the implementation of our AI technology, compared to our perceived industry standard of 24-36 months, represents a significant competitive advantage and drives our financial performance. This accelerated time frame for the implementation of our AI should enable faster revenue recognition from technology services while allowing more rapid realization of operational improvements in acquired companies. There are several reasons why we believe our implementation process will occur more rapidly than traditional software implementations:

Previous wording

Truncated Administrative Process: Traditional software companies are typically subject to lengthy sales processes involving competitive bidding and procurement, which are often weighed against criteria generated by a third-party consultant, typically beginning after a 30 to 180 day study and subsequent report on the client’s requirements..

Current wording

(1) Truncated Administrative Process: Traditional software companies are typically subject to lengthy sales processes involving competitive bidding and procurement, which are often weighed against criteria generated by a third-party consultant, typically beginning after a 180-day study and subsequent report on the client’s requirements.

Previous wording

CCCI primarily derives revenue from fixed-price contracts in the civil construction sector with a focus on construction of site utilities, roads, bridges, and concrete structures in Texas. CCCI specializes in providing full-scope civil construction, project management, and estimating services, including but not limited to wet and dry utility installation, paving and concrete structures, site clearing and grading, lift and pump stations, and treatment plants. Additionally, CCCI offers landscaping services including irrigation, revegetation, aquatic plantings, tree replacement, and decorative wall construction. This diverse expertise is essential for executing a variety of projects, including single-family subdivisions, multi-family subdivisions, commercial sites, hospitals, medical office buildings, industrial sites, schools, and municipal projects with efficiency and scalability.

Current wording

Construction services represent our largest revenue stream with services performed under fixed-price contracts in the civil construction sector with a focus on construction of site utilities, roads, bridges, and concrete structures in Texas. We provide full-scope civil construction, project management, and estimating services, including but not limited to wet and dry utility installation, paving and concrete structures, site clearing and grading, lift and pump stations, and treatment plants. Additionally, we offer landscaping services including irrigation, revegetation, aquatic plantings, tree replacement, and decorative wall construction. This diverse expertise is essential for executing a variety of projects, including single-family subdivisions, multi-family subdivisions, commercial sites, hospitals, medical office buildings, industrial sites, schools, and municipal projects with efficiency and scalability.

Previous wording

CCCI recognizes revenue over time as work is completed, typically using an input measure such as costs incurred to date relative to total estimated costs at completion to measure progress. Costs that do not depict progress toward satisfaction of the performance obligation are included in contract costs but may not result in revenue being recognized, such as significant re-work.

Current wording

We recognize construction revenue over time as work is completed, typically using an input measure such as costs incurred to date relative to total estimated costs at completion to measure progress. Costs that do not depict progress toward satisfaction of the performance obligation are included in contract costs but may not result in revenue being recognized, such as significant re-work.

Previous wording

Trends and Key Factors Affecting Performance

Current wording

Trends and Key Factors Affecting Our Performance

Previous wording

CCCI believes that future performance will be influenced by a number of factors, including those described in the section titled “Risk Factors” in AIAI's Registration Statement as well as the factors described below. While each of these factors presents significant opportunities for CCCI, these factors also pose challenges that CCCI must successfully address in order to sustain the growth of the company’s business and enhance results of operations.

Current wording

We believe that future performance will be influenced by a number of factors, including those described in the section titled “Risk Factors” in AIAI's Registration Statement as well as the factors described below. While each of these factors presents significant opportunities for the Company, these factors also pose challenges that we must successfully address in order to sustain the growth of the Company’s business and enhance results of operations.

Previous wording

Our financial performance depends significantly on maintaining our accelerated implementation timeline. Any extension of this timeline could increase implementation costs, delay the realization of expected cost savings, and reduce revenue growth at our portfolio companies expected to be achieved through utilization of our licensed AI, and potentially impact customer satisfaction at our portfolio companies. Our ability to maintain AI implementation efficiency while scaling operations across multiple sectors and geographies directly impacts our profitability and growth potential.

Current wording

Our financial performance depends significantly on maintaining our accelerated implementation timeline for AI-enabled solutions. Any extension of this timeline could increase implementation costs, delay the realization of expected cost savings, and reduce revenue growth at our portfolio companies expected to be achieved through utilization of our licensed AI, and potentially impact customer satisfaction at our portfolio companies. Our ability to maintain AI implementation efficiency while scaling operations across multiple sectors and geographies directly impacts our profitability and growth potential.

Previous wording

CCCI’s performance in a given period can be impacted by adverse weather conditions, severe weather events, natural disasters or other emergencies, which include, among other things, heavy or prolonged snowfall, icing, or rainfall, hurricanes, tropical storms, tornadoes, floods, extreme temperatures, wildfires, and pandemics. These conditions and events can negatively impact CCCI’s financial results due to, among other things, the termination, deferral or delay of projects, reduced productivity and exposure to significant liabilities. See “Risk Factors.”

Current wording

Our performance in a given period can be impacted by adverse weather conditions, severe weather events, natural disasters or other emergencies, which include, among other things, heavy or prolonged snowfall, icing, or rainfall, hurricanes, tropical storms, tornadoes, floods, extreme temperatures, wildfires, and pandemics. These conditions and events can negatively impact our financial results due to, among other things, the termination, deferral or delay of projects, reduced productivity and exposure to significant liabilities. See “Risk Factors.”

Previous wording

CCCI’s operations are typically affected more by weather conditions during the first and fourth quarters of the fiscal year, because cold, snowy or wet conditions can create challenging working environments that are more costly for CCCI’s customers or cause delays on projects. This may alter the company’s construction schedules and can create variability in CCCI’s revenues, profitability and the required number of employees. Second and third quarter revenues are typically the highest of the year, as a greater number of projects are underway and operating conditions, including weather, are normally more accommodating. See “Risk Factors.”

Current wording

Our construction operations are typically affected more by weather conditions during the first and fourth quarters of the fiscal year, because cold, snowy or wet conditions can create challenging working environments that are more costly for our customers or cause delays on projects. This may alter the Company’s construction schedules and can create variability in revenues, profitability and the required number of employees. Second and third quarter revenues are typically the highest of the year, as a greater number of projects are underway and operating conditions, including weather, are normally more accommodating. See “Risk Factors.”

Previous wording

CCCI bids on projects that it believes offers an opportunity to meet the company’s profitability objectives or that offer the opportunity to enter promising new markets. The potential customers often conduct rigorous competitive processes for awarding contracts. CCCI will potentially face strong competition and pricing pressures for any additional contract awards from other government agencies, and CCCI may be required to qualify or continue to qualify under various multiple award task order contract criteria. See “Risk Factors.”

Current wording

We bid on projects that we believe offer an opportunity to meet the company’s profitability objectives or that offer the opportunity to enter promising new markets. The potential customers often conduct rigorous competitive processes for awarding contracts. We will potentially face strong competition and pricing pressures for any additional contract awards from other government agencies, and may be required to qualify or continue to qualify under various multiple award task order contract criteria. See “Risk Factors.”

Previous wording

CCCI’s Ability to Obtain Approval of Change Orders and Successfully Pursue Claims

Current wording

Ability to Obtain Approval of Change Orders and Successfully Pursue Claims

Previous wording

CCCI is subject to variation in scope and cost of projects from the company’s original projections. In certain circumstances, CCCI seeks to collect or assert claims against customers, engineers, consultants, subcontractors or others involved in a project for additional compensation exceeding the contract price or for amounts not included in the original contract scope. CCCI’s experience has often been that customers have been willing to negotiate equitable adjustments to the contract compensation or completion time provisions if unexpected circumstances arise. However, this process may result in disputes over whether the work performed is beyond the scope of the work included in the original project plans and specifications or, if the customer agrees that the work performed qualifies as extra work, the price that the customer is willing to pay for the extra work. See “Risk Factors.”

Current wording

We are subject to variation in scope and cost of construction projects from the Company’s original projections. In certain circumstances, we seek to collect or assert claims against customers, engineers, consultants, subcontractors or others involved in a project for additional compensation exceeding the contract price or for amounts not included in the original contract scope. Our experience has often been that customers have been willing to negotiate equitable adjustments to the contract compensation or completion time provisions if unexpected circumstances arise. However, this process may result in disputes over whether the work performed is beyond the scope of the work included in the original project plans and specifications or, if the customer agrees that the work performed qualifies as extra work, the price that the customer is willing to pay for the extra work. See “Risk Factors.”

Previous wording

CCCI’s Ability to Estimate and Control Construction Costs

Current wording

Ability to Estimate and Control Construction Costs

Previous wording

CCCI’s costs primarily consist of payroll, equipment, materials, subcontractors, and other project related expenses. CCCI’s contracts are typically fixed price, and if CCCI is unable to accurately estimate the overall risks, requirements or costs when CCCI bids on or negotiates a contract that is ultimately awarded, the company may achieve a lower than anticipated profit or incur a loss on the contract due to higher than estimated costs. Additionally, CCCI’s costs and profitability can be adversely affected by factors such as inflation, tariffs, supply chain and other operational inefficiencies. CCCI’s future growth also depends on the company’s ability to accurately estimate and control construction costs, a major part of which consists of implementing AIAI’s licensed AI technology in CCCI’s estimating and operational processes going forward. Also, CCCI’s labor and training expenses may increase as a result of a shortage in the supply of skilled personnel. CCCI strives to minimize exposure to labor and material price increases in the company’s project bids and the manner in which CCCI executes work. In fixed price contracts, CCCI attempts to insulate itself from the unfavorable effects of inflation, when possible, by incorporating escalating wage and price assumptions into construction cost estimates, by obtaining firm fixed price quotes from major subcontractors and material suppliers, by securing purchase commitments for materials early in the project schedule and by including contingency for these risks in the bid price. Construction and other materials used in construction activities are generally available locally from multiple sources. See “Risk Factors.”

Current wording

Construction costs primarily consist of payroll, equipment, materials, subcontractors, and other project related expenses. Construction contracts are typically fixed price, and if we are unable to accurately estimate the overall risks, requirements or costs when we bid on or negotiate a contract that is ultimately awarded, the Company may achieve a lower than anticipated profit or incur a loss on the contract due to higher than estimated costs. Additionally, our costs and profitability can be adversely affected by factors such as inflation, tariffs, supply chain and other operational inefficiencies. Our future growth also depends on the Company’s ability to accurately estimate and control construction costs, a major part of which consists of implementing our licensed AI technology in contract estimating and operational processes going forward. Also, our labor and training expenses may increase as a result of a shortage in the supply of skilled personnel. We strive to minimize exposure to labor and material price increases in the company’s project bids and the manner in which we execute work. In fixed price contracts, we attempt to insulate the Company from the unfavorable effects of inflation, when possible, by incorporating escalating wage and price assumptions into construction cost estimates, by obtaining firm fixed price quotes from major subcontractors and material suppliers, by securing purchase commitments for materials early in the project schedule and by including contingency for these risks in the bid price. Construction and other materials used in construction activities are generally available locally from multiple sources. See “Risk Factors.”

Previous wording

CCCI is often required to provide surety bonds securing the company’s performance under customer contracts. CCCI’s ability to obtain surety bonds primarily depends on company’s working capital, past performance, capitalization, credit rating, management expertise, overall capacity of the surety market and other factors. If CCCI is unable to obtain reasonably priced surety bonds in the future, it could significantly affect CCCI’s ability to be awarded new contracts and could, consequently, have a material adverse effect on CCCI’s business, results of operations and financial condition. See “Risk Factors.”

Current wording

We are often required to provide surety bonds securing the Company’s performance under construction contracts with customers. Our ability to obtain surety bonds primarily depends on company’s working capital, past performance, capitalization, credit rating, management expertise, overall capacity of the surety market and other factors. If we are unable to obtain reasonably priced surety bonds in the future, it could significantly affect our ability to be awarded new contracts and could, consequently, have a material adverse effect on our business, results of operations and financial condition. See “Risk Factors.”

Previous wording

CCCI regularly reviews the following key business metrics to evaluate the business, measure company performance, identify trends affecting the company’s business, formulate financial projections and make strategic decisions. In assessing the performance of CCCI’s business, net income (loss) is the primary measure that management uses to assess performance. In addition to net income (loss), CCCI also considers a variety of other key performance measures, including non-GAAP measures. The key performance measures used by management for determining how CCCI’s business is performing are total revenue, income (loss) from operations, net income (loss), gross profit, gross margin, and Adjusted EBITDA, which is a non-GAAP measure.

Current wording

We regularly review the following key business metrics to evaluate the business, measure performance, identify trends affecting our business, formulate financial projections and make strategic decisions. In assessing the performance of our business, net income (loss) is the primary measure that management uses to assess performance. In addition to net income (loss), we also consider a variety of other key performance measures, including non-GAAP measures. The key performance measures used for determining how our business is performing are total revenue, income (loss) from operations, net income (loss), gross profit, and Adjusted EBITDA, which is a non-GAAP measure.

Previous wording

CCCI believes that these key financial measures provide useful information to users of the financial statements in understanding and evaluating CCCI’s results of operations in the same manner as CCCI’s management team. The presentation of these key performance measures, including Adjusted EBITDA, which is a non-GAAP financial measure, is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with U.S. GAAP. See “Non-GAAP Measures” below.

Current wording

We believe that these key financial measures provide useful information to users of the financial statements in understanding and evaluating AIAI’s results of operations in the same manner as AIAI’s management team. The presentation of these key performance measures, including Adjusted EBITDA, which is a non-GAAP financial measure, is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with U.S. GAAP. See “Non-GAAP Measures” below.

Previous wording

The following table sets forth CCCI’s key performance measures for the periods indicated below:

Current wording

The following table sets forth AIAI's key performance measures for the period indicated below:

Previous wording

Adjusted EBITDA is calculated as net income (loss) adjusted to exclude interest expense, income and state franchise tax expense and depreciation and amortization, further adjusted to exclude share-based compensation, non-core costs related to strategic initiatives, and certain other non-recurring charges. CCCI uses Adjusted EBITDA to supplement U.S. GAAP measures of performance in the evaluation of the effectiveness of CCCI’s business strategies, to make budgeting decisions and to compare CCCI’s performance against that of other peer companies using similar measures. See “Non-GAAP Measures” below for a reconciliation of Adjusted EBITDA to net income (loss).

Current wording

Adjusted EBITDA is calculated as net income (loss) adjusted to exclude interest income (expense), net income tax benefit, and depreciation and amortization, further adjusted to exclude state franchise tax expense, share-based compensation, non-core costs related to strategic initiatives, and certain other non-recurring charges. AIAI uses Adjusted EBITDA to supplement U.S. GAAP measures of performance in the evaluation of the effectiveness of AIAI’s business strategies, to make budgeting decisions and to compare AIAI’s performance against that of other peer companies using similar measures. See “Non-GAAP Measures” below for a reconciliation of Adjusted EBITDA to net income (loss).

Previous wording

CCCI generates revenue by providing comprehensive civil construction, project management, and estimating services in Texas. CCCI’s contracts are typically fixed-price, and CCCI generally recognizes revenue over time as performance obligations are satisfied and control over promised goods or services are transferred to customers, in accordance with Accounting Standard Codification (“ASC”) Topic 606. This method assesses the extent of progress based on the ratio of costs incurred to date against the total estimated costs at completion of the performance obligation. Estimating total costs to complete requires CCCI to make informed estimates regarding material costs and availability, labor costs and productivity including subcontracting costs, as well as overhead expenses.

Current wording

The substantial majority of our services revenue is generated by providing comprehensive civil construction, project management, and estimating services in Texas. Construction contracts are typically fixed-price, and we generally recognize related revenue over time as performance obligations are satisfied and control over promised goods or services are transferred to customers, in accordance with Accounting Standard Codification (“ASC”) Topic 606. This method assesses the extent of progress based on the ratio of costs incurred to date against the total estimated costs at completion of the performance obligation. Estimating total costs to complete requires us to make informed estimates regarding material costs and availability, labor costs and productivity, as well as overhead expenses. Services revenue derived from our technology offerings include blockchain-based enterprise data and technology solutions and digital asset rewards earned by operating validator nodes and participating in blockchain staking activities, and blockchain network licensing arrangements. Services revenue also includes revenue earned in connection with healthcare subscription services which include healthcare navigation, telemedicine, medical second-opinion services, and preventive health programs. In addition, we provide case management services for accident victims and associated healthcare advisory services to medical clinics.

Previous wording

Costs of contracts consists of all direct and indirect costs on construction contracts, including raw materials, labor, equipment costs, and subcontractor costs. The cost of significant uninstalled materials, re-work, or scrap is generally excluded from the cost-to-cost measure of progress as it is not proportionate to the entity’s progress in satisfying the performance obligation. CCCI expects the cost of contracts to increase in absolute dollars in future periods as the business grows. As additional cost-optimization initiatives are executed, CCCI expects the cost of contracts as a percentage of revenue to decrease over time.

Current wording

Services costs of sales principally consists of all direct and indirect costs on construction contracts, including raw materials, labor, equipment costs, and subcontractor costs. The cost of significant uninstalled materials, re-work, or scrap is generally excluded from the cost-to-cost measure of progress on construction contracts as it is not proportionate to the entity’s progress in satisfying the performance obligation. Cost of sales additionally includes all direct and indirect costs of delivering our healthcare and technology services, principally including costs of labor and associated technology infrastructure and services. We expect services costs of sales to increase in absolute dollars in future periods as the business grows. As additional cost-optimization initiatives are executed, we expect that cost of sales as a percentage of revenue to decrease over time.

Previous wording

General and administrative expenses primarily consist of costs for estimating and bidding, business development, and costs related to CCCI’s operational offices such as operating leases that are not allocated to direct contract costs and expenses related to CCCI’s corporate functions. General and administrative expenses are expensed as incurred. CCCI expects to incur additional general and administrative expenses as a result of operating as a public company, including expenses related to compliance with public company reporting obligations, and increased costs for investor relations and professional services. CCCI expects general and administrative expenses to increase in future periods and to vary from period to period as a percentage of revenue.

Current wording

General and administrative expenses primarily consist of costs for estimating and bidding, business development, and costs related to operational offices such as operating leases that are not allocated to direct contract costs and expenses related to general corporate functions. General and administrative expenses are expensed as incurred. We expect to incur additional general and administrative expenses as a result of operating as a public company, including expenses related to compliance with public company reporting obligations, and increased costs for investor relations and professional services. We expects general and administrative expenses to increase in future periods and to vary from period to period as a percentage of revenue.

Previous wording

Depreciation includes the depreciation of fixed assets, including construction equipment, transportation equipment, furniture and fixtures, office equipment, and leasehold improvements. Amortization includes amortization of right of use assets under finance leases of equipment. Depreciation and amortization expense is included in the statements of operations within cost of contracts and general and administrative expenses.

Current wording

Depreciation includes the depreciation of fixed assets, including construction equipment, transportation equipment, furniture and fixtures, office equipment, information technology infrastructure, and leasehold improvements. Amortization includes amortization of right of use assets under finance leases of equipment as well as amortization definite-lived intangible assets recognized in connection with the Acquisitions, as well as the license to M42 AI technology Depreciation and amortization expense is included in the statements of operations within cost of sales and general and administrative expenses.

Previous wording

Tax expenses primarily consist of the State of Texas franchise tax. CCCI’s primary operations are classified as a partnership for federal income tax purposes reportable by its members and are not subject to federal and certain state income taxes. Accordingly, CCCI makes no provision for federal and state income taxes in its financial statements except for certain state franchise, excise, and margin tax payable by the partnership entity. Following the completion of its acquisition by AIAI, CCCI will be subject to taxation as a corporation.

Current wording

State franchise tax expenses primarily consist of the State of Texas franchise tax.Our predecessor’s primary operations were classified as a partnership for federal income tax purposes reportable by its members and were not subject to federal and certain state income taxes prior to the Acquisitions. Accordingly, our predecessor made no provision for federal and state income taxes in its financial statements except for certain state franchise, excise, and margin tax payable by the partnership entity. Following the completion of the Acquisitions, our predecessor and the remaining Portfolio Companies are subject to taxation as a corporation.

Previous wording

Interest expense primarily consists of the interest incurred on CCCI’s lines of credit, finance leases, notes payable, and amortization of debt issuance costs, such as debt origination and commitment fees.

Current wording

Interest (income) expense, net primarily consists of the interest incurred on lines of credit, finance leases, notes payable, and amortization of debt issuance costs, such as debt origination and commitment fees. These interest costs are partially offset by interest income earned on cash deposits.

Previous wording

Cost of contracts increased by $1.9 million, or 3.6%, to $55.4 million in the three months ended March 31, 2026 from $53.5 million in the three months ended March 31, 2025. Cost of contracts as a percentage of revenue increased by 8.4%, from 85.7% in the three months ended March 31, 2025 to 94.1% in the three months ended March 31, 2026. Increased costs were driven by labor cost inefficiencies arising from adverse weather conditions which limited construction activity as well as customer-driven delays in project starts which limited CCCI’s ability to efficiently deploy labor resources. CCCI maintained its workforce throughout the reporting period irrespective of construction slowdowns in order to support ongoing and anticipated customer projects. Also contributing to increased costs were inflationary costs pressures associated with fuel and materials which could not be passed on to customers. The reduction in gross margin was also partially attributable to a shift towards lower‑margin single‑family and government projects resulting from a recent decline in commercial market conditions driven by higher fuel and materials costs. Competitive market conditions for publicly bid projects also contributed to a decrease in overall contract size and margin compression on successfully bid projects during the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

Current wording

Cost of sales decreased by $5.3 million, or 9%, to $53.0 million during the Current Combined Quarter compared to $58.3 million during the Prior Predecessor Quarter. As a percentage of revenue, cost of sales increased to 91% during the Current Combined Quarter from 89% during the Prior Predecessor Quarter. The decrease in cost of sales was primarily driven by a $6.2 million decrease in Predecessor cost of sales, resulting in an increase in Predecessor cost of as a percentage of revenue of approximately 5%%. The increase in Predecessor cost of sales as a percentage of revenue was driven by inefficiencies arising from adverse weather conditions which limited construction activity as well as customer-driven delays in project starts which limited the Predecessor’s ability to efficiently deploy labor resources. The Predecessor maintained its workforce throughout the reporting period irrespective of construction slowdowns in order to support ongoing and anticipated customer projects. Also contributing to increased costs were inflationary costs pressures associated with fuel and materials which could not be passed on to customers. The reduction in gross margin was also partially attributable to a shift towards lower‑margin single‑family and government projects resulting from a recent decline in commercial market conditions driven by higher fuel and materials costs. Competitive market conditions for publicly bid projects also contributed to a decrease in overall contract size and margin compression on successfully bid projects during the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The decrease in cost of sales at the Predecessor was partially offset by an increase in services cost of sales of $1.0 million contributed by other acquired Portfolio Companies acquired in the period.

Previous wording

Following completion of the Direct Listing and the contemporaneous closing of the acquisition transactions for our Portfolio Companies our liquidity needs will primarily consist of working capital requirements for the operations of our Portfolio Companies as well as incremental general and administrative costs associated with operating as a public company, acquisition funding, capital expenditures, and research and development investments. Our principal sources of liquidity are expected to be cash generated from operations, available cash and cash equivalents, loans from or additional capital contributions provided by our Founder or affiliated entities, borrowings under one or more credit facilities, and access to capital markets.

Current wording

Our primary sources of liquidity consist of cash generated from operations, cash and cash equivalents held by the Company and its Portfolio Companies, available borrowing capacity under existing credit facilities, financial support from the Founder and access to capital markets. Following the completion of the Acquisitions on May 6, 2026, the Company's liquidity position is principally driven by the operating activities and cash-generating capabilities of the acquired Portfolio Companies, as well as incremental general and administrative costs associated with operating as a public company, acquisition funding, capital expenditures, and research and development investments. Prior to the Closing Date, the Company did not conduct substantive operating activities, and its liquidity requirements primarily related to transaction advisory costs incurred in connection with the Direct Listing and acquisition process.

Previous wording

Net cash used in operating activities for the three months ended March 31, 2026 increased by $9.6 million compared to the three months ended March 31, 2025, due to a $3.4 million unfavorable change in operating assets and liabilities and a $6.2 million unfavorable change in net income (loss).

Current wording

For the Combined Current YTD Period, net cash used in operating activities was $14.3 million compared to cash provided by operating activities of $8.8 million for the Prior Predecessor YTD Period, a decrease of $23.1 million. The variance was driven by a $47.8 unfavorable change in net income and a $6.2 million unfavorable change in operating assets and liabilities, offset by a $31.0 million favorable change in non-cash expenses.

Previous wording

Net income (loss) was unfavorable by $6.2 million as CCCI generated a net loss of $3.7 million in the three months ended March 31, 2026 as compared to net income of $2.5 million in the three months ended March 31, 2025. The reasons for the decrease in net income (loss) are set forth under“Results of operations.”

Current wording

Net income was unfavorable by $47.8 million as AIAI generated a net loss of $44.7 million in the Combined Current YTD Period, as compared to net income of $3.1 million in the Prior Predecessor YTD Period. The reasons for the decrease in net income are set forth under“Results of operations.”

Previous wording

The change in operating assets and liabilities during the three months ended March 31, 2026 resulted in a $3.4 million decrease in cash and cash equivalents as compared to the change in operating assets and liabilities during the three months ended March 31, 2025. This change was driven by timing differences related to collections on construction contract receivables, raw material purchases and vendor payments on construction contracts.

Current wording

The change in operating assets and liabilities during Combined Current YTD Period resulted in a $6.2 million decrease in cash as compared to the change in operating assets and liabilities during the Prior Predecessor YTD Period. This change was driven by $25.6 million unfavorable change in contract assets, a $9.6 million unfavorable change in accounts payable, a $1.5 million unfavorable change in accrued expenses, a $0.9 million unfavorable change in prepaid expense, and a $0.4 million unfavorable change in change in amounts due from related parties. These decreases were partially offset by a $28.4 million favorable change in accounts receivable, and a $3.4 million favorable change in contract liabilities.

Previous wording

CCCI maintained a revolving credit note agreement (the “Revolving Credit Note”) with an interest rate of 1% plus Prime (Prime being the highest prime rate published in the Wall Street Journal or announced by the principle office of Citibank, N.A., J.P. Morgan Chase or Bank of America), but at no less than 7% per annum and no more than 14% per annum, and a maturity date of December 19, 2028.

Current wording

We maintain a revolving credit note agreement (the“Revolving Credit Note”), assumed in connection with the acquisition of CCCI, with an interest rate of 1% plus Prime (Prime being the highest prime rate published in the Wall Street Journal or announced by the principal office of Citibank, N.A., J.P. Morgan Chase or Bank of America), but at no less than 7% per annum and no more than 14% per annum, and a maturity date of December 19, 2028. As of June 30, 2026 (Successor) and December 31, 2025 (Predecessor), the maximum availability was $16.6 million and $16.6 million, respectively, and the principal balance outstanding was $13.8 million and $11.1 million, respectively. As of June 30, 2026 and December 31, 2025, there were no debt covenant violations.

Previous wording

CCCI also maintains an $8.0 million revolving line of credit (the “Revolving Credit Line”) which bears interest at the Wall Street Journal’s prime rate plus 0.50% and has a maturity date of December 26, 2027, as amended. As of March 31, 2026 and December 31, 2025, there was $8.0 million and $8.0 million of principal balance outstanding with $0 and $0 available to borrow, respectively. As of March 31, 2026 and December 31, 2025, there were no debt covenant violations.

Current wording

We also maintain an $8.0 million revolving line of credit (the“Revolving Credit Line”), assumed in connection with the acquisition of CCCI, which bears interest at the Wall Street Journal's prime rate plus 0.50% and has a maturity date of December 26, 2027, as amended. As of June 30, 2026 and December 31, 2025, there was $8.0 million and $8.0 million of principal balance outstanding with $8.0 and $0 available to borrow, respectively. As of June 30, 2026 and December 31, 2025, there were no debt covenant violations.

Previous wording

The aggregate effective interest rate was approximately 7.52% and 8.28% for the periods ended March 31, 2026, and March 31, 2025, respectively.

Current wording

The aggregate effective interest rate under the CCCI lines of credits was approximately 7.75% and 8.11% for the periods ended June 30, 2026 and June 30, 2025, respectively.

Previous wording

As of March 31, 2026, CCCI also has outstanding notes payable with maturity dates ranging from October 2027 through December 2030. As of March 31, 2026 and December 31, 2025, outstanding notes payable totaled $5.3 million and $5.1 million, respectively. These notes were primarily issued to equipment suppliers and are secured by machinery and equipment. The notes carry stated interest rates between 0% to 6.89% with monthly installment payments. CCCI continues to monitor and manage its equipment financing obligations.

Current wording

As of June 30, 2026, we also have outstanding notes payable associated with equipment financing with maturity dates ranging from October 2027 through December 2030. As of June 30, 2026 and December 31, 2025, outstanding notes payable totaled $4.9 million and $5.1 million, respectively. These notes were primarily issued to equipment suppliers and are secured by machinery and equipment. The notes carry stated interest rates between 0% to 6.89% with monthly installment payments.

Previous wording

Maintain consistent implementation timelines across acquisitions

Current wording

Our financial performance depends on our ability to efficiently implement our AI platform across acquired businesses and successfully execute our acquisition strategy. Future results are driven by our ability to acquire businesses at attractive valuations, complete due diligence, integrate acquired operations, deploy AI solutions effectively, achieve anticipated operational improvements, and maintain consistent implementation timelines. Delays in integration or deployment, increased implementation costs, challenges in realizing anticipated efficiencies, or failure to achieve expected operational improvements could adversely affect profitability, growth, and overall operating performance.

Previous wording

CCCI’s management’s discussion and analysis of company’s financial condition and results of operations are based on CCCI’s financial statements, which have been prepared in accordance with U.S. GAAP. Preparation of the financial statements in conformity with U.S. GAAP requires the use of certain judgments, estimates and assumptions that impact the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities as of the balance sheet date, and amounts of revenue and expenses recognized during the period. CCCI considers an accounting judgment, estimate or assumption to be critical when the estimate or assumption is complex in nature or requires a high degree of judgment and the use of different judgments, estimates and assumptions could have a material impact on CCCI’s financial statements.

Current wording

The Company's management's discussion and analysis of financial condition and results of operations is based on the Company's unaudited condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP. Preparation of financial statements in conformity with U.S. GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the balance sheet date, and the reported amounts of revenue and expenses recognized during the reporting period. The Company considers an accounting judgment, estimate or assumption to be critical when the nature of the estimate or assumption is material and when different estimates or assumptions could have a material impact on the Company's unaudited condensed consolidated financial statements.

Previous wording

On an ongoing basis, CCCI evaluates the company’s estimates and judgments based on historical experience and various other factors that are believed to be reasonable under the circumstances. CCCI reviews the company’s financial reporting and disclosure practices and accounting policies periodically to confirm that CCCI provides accurate and transparent information relative to the current economic and business environment. A summary of CCCI significant accounting policies is included in Note A – Summary of Significant Accounting Policies to CCCI’s audited financial statements included in AIAI's Registration Statement.

Current wording

On an ongoing basis, the Company evaluates its estimates and judgments based on historical experience and various other factors that management believes to be reasonable under the circumstances. The Company periodically reviews its financial reporting and disclosure practices and accounting policies to ensure that its financial statements provide transparent and reliable information reflective of current economic conditions, business trends, and operational developments. A summary of the Company's significant accounting policies is included in Note 1 –Summary of Significant Accounting Policies.