Southland Holdings Inc

Previous wording

Southland is a diverse leader in specialty infrastructure construction with roots dating back to 1900. The end markets for which we provide services cover a broad spectrum of specialty services within infrastructure construction. We design and construct projects in the bridges, tunnels, communications, transportation and facilities, marine, steel structures, water and wastewater treatment, and water pipelines end markets.

Current wording

Southland Holdings, Inc. (“Southland”) is a diverse leader in specialty infrastructure construction with roots dating back to 1900. The end markets for which we provide services cover a broad spectrum of specialty services within infrastructure construction. We design and construct projects in the bridges, tunnels, communications, transportation and facilities, marine, steel structures, water and wastewater treatment, and water pipelines end markets.

Previous wording

For the three months ended June 30, 2024, M&P contributed $8.9 million to revenue and $46.8 million in gross loss. There is additional information on the M&P gross loss in the Transportation portion of the Segment Results section of this Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. This compares to $36.7 million to revenue and $49.0 million to gross loss for the three months ended June 30, 2023. For the six months ended June 30, 2024, M&P contributed $47.5 million to revenue and $57.1 million in gross loss. This compares to $94.8 million to revenue and $60.0 million

Current wording

For the three months ended September 30, 2024, M&P contributed $17.5 million to revenue and $18.3 million in gross loss. There is additional information on the M&P gross loss in the Transportation portion of the Segment Results section of this Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. This compares to $47.8 million to revenue and $11.3 million to gross loss for the three months ended September 30, 2023. For the nine months ended September 30, 2024, M&P contributed $65.0 million to revenue and $75.4 million in gross loss. This compares to $142.6 million

Previous wording

to gross loss for the six months ended June 30, 2023. As of June 30, 2024, approximately 7.3% of Southland’s backlog was in M&P, and Southland estimates this work to be substantially completed in the next 12 months.

Current wording

to revenue and $71.3 million to gross loss for the nine months ended September 30, 2023. As of September 30, 2024, approximately 6.5% of Southland’s backlog was in M&P, and Southland estimates this work to be substantially completed in the next nine months.

Previous wording

Revenue for the three months ended June 30, 2024, was $251.5 million, a decrease of $5.4 million, or 2.1%, compared to the three months ended June 30, 2023. The decrease was primarily attributable to a $19.2 million decrease in revenue in our Transportation segment offset by a $13.8 million increase in revenue in our Civil segment.

Current wording

Revenue for the three months ended September 30, 2024, was $173.3 million, a decrease of $139.2 million, or 44.5%, compared to the three months ended September 30, 2023. The decrease was attributable to a $104.3 million decrease in revenue in our Transportation segment and a $34.9 million decrease in revenue in our Civil segment.

Previous wording

Cost of construction for the six months ended June 30, 2024, was $559.2 million, an increase of $12.6 million, or 2.3%, compared to the six months ended June 30, 2023. The increase was primarily attributable to a $12.7 million increase in our Civil segment offset by a $0.1 million decrease in our Transportation segment.

Current wording

Cost of construction for the three months ended September 30, 2024, was $224.4 million, a decrease of $58.5 million, or 20.7%, compared to the three months ended September 30, 2023. The decrease was attributable to a $54.4 million decrease in our Transportation segment and a $4.1 million decrease in our Civil segment.

Previous wording

Selling, general, and administrative expenses for the three months ended June 30, 2024, were $15.7 million, a decrease of $0.8 million, or 4.7%, compared to the three months ended June 30, 2023. The decrease was primarily due to a reduction of bad debt expense compared to the same period in 2023.

Current wording

Selling, general, and administrative expenses for the three months ended September 30, 2024, were $17.5 million, an increase of $2.2 million, or 14.7%, compared to the three months ended September 30, 2023. The increase was primarily due to a $1.5 million in insurance expense, $0.4 in stock compensation expense and $0.3 million in bad debt expense, compared to the same period in 2023.

Previous wording

Interest expense for the three months ended June 30, 2024, was $6.7 million, an increase of $2.4 million, or 56.1%, compared to the three months ended June 30, 2023. The difference is primarily driven by an increase in external borrowings compared to the prior year and higher interest rates on additional borrowings.

Current wording

Interest expense for the three months ended September 30, 2024, was $7.5 million, an increase of $1.3 million, or 20.7%, compared to the three months ended September 30, 2023. The difference is primarily driven by an increase in external borrowings compared to the prior year and higher interest rates on additional borrowings.

Previous wording

Income tax benefit for the six months ended June 30, 2024, was $15.7 million, or an effective rate of 25.9%. The primary differences between the federal statutory tax rate of 21% and the effective rate were state income taxes, federal tax credits, the income earned in foreign jurisdictions with a zero tax rate; however that foreign income is included within U.S. taxable income through GILTI, and the recording of a valuation allowance against Johnson Bros. Corporation’s deferred tax assets.

Current wording

Income tax benefit for the three months ended September 30, 2024, was $17.1 million, or an effective rate of 22.8%. The primary differences between the federal statutory tax rate of 21% and the effective rate were state income taxes, the reversal of a previously recorded uncertain tax position liability, the recording of valuation allowances against certain subsidiaries’ separate company deferred tax assets, federal tax credits, the recording of a valuation allowance against certain subsidiaries’ tax assets, the income earned in foreign jurisdictions with a zero tax rate; however that foreign income is included within U.S. taxable income through Section 951A Global Intangible Low-Taxed Income (“GILTI”), and finally the impact of worldwide forecast on the interim calculation under ASC 740.

Previous wording

The following table sets forth summary financial information for the six months ended June 30, 2024 and 2023:

Current wording

The following table sets forth summary financial information for the nine months ended September 30, 2024 and 2023:

Previous wording

Revenue for the six months ended June 30, 2024, was $539.6 million, an increase of $7.9 million, or 1.5%, compared to the six months ended June 30, 2023. The increase was primarily attributable to a $25.1 million increase of revenue in our Civil segment offset by a $17.2 million decrease in revenue in our Transportation segment.

Current wording

Revenue for the nine months ended September 30, 2024, was $712.9 million, a decrease of $131.3 million, or 15.6%, compared to the nine months ended September 30, 2023. The decrease was primarily attributable to a $121.5 million decrease of revenue in our Transportation segment and a $9.8 million decrease in revenue in our Civil segment.

Previous wording

Cost of construction for the three months ended June 30, 2024, was $291.5 million, an increase of $0.8 million, or 0.3%, compared to the three months ended June 30, 2023. The increase was primarily attributable to a $10.5 million increase in our Civil segment offset by a $9.7 million decrease in our Transportation segment.

Current wording

Cost of construction for the nine months ended September 30, 2024, was $783.6 million, a decrease of $45.9 million, or 5.5%, compared to the nine months ended September 30, 2023. The decrease was primarily attributable to a $54.6 million decrease in our Transportation segment offset by a $8.7 million increase in our Civil segment.

Previous wording

Interest expense for the six months ended June 30, 2024, was $12.4 million, an increase of $4.8 million, or 63.7%, compared to the six months ended June 30, 2023. The difference is primarily driven by an increase in external borrowings compared to the prior year and higher interest rates on additional borrowings.

Current wording

Interest expense for the nine months ended September 30, 2024, was $19.9 million, an increase of $6.1 million, or 44.3%, compared to the nine months ended September 30, 2023. The difference is primarily driven by an increase in external borrowings compared to the prior year and higher interest rates on additional borrowings.

Previous wording

Income tax benefit for the three months ended June 30, 2024, was $16.0 million, or an effective rate of 26.0%. The primary differences between the federal statutory tax rate of 21% and the effective rate were state income taxes, the recording of a valuation allowance against Johnson Bros. Corporation’s deferred tax assets, federal tax credits, the income earned in foreign jurisdictions with a zero tax rate; however that foreign income is included within U.S. taxable income through GILTI, and the impact of worldwide forecast on the interim calculation under ASC 740.

Current wording

Income tax benefit for the nine months ended September 30, 2024, was $32.8 million, or an effective rate of 24.2%. The primary differences between the federal statutory tax rate of 21% and the effective rate were state income taxes, the reversal of a previously recorded uncertain tax position liability, the recording of a valuation allowances against certain subsidiaries’ separate company deferred tax assets, federal tax credits, the recording of a valuation allowance against certain subsidiaries’ deferred tax assets, the income earned in foreign jurisdictions with a zero tax rate; however that foreign income is included within U.S. taxable income through GILTI, and finally the impact of worldwide forecast on the interim calculation under ASC 740.

Previous wording

Income tax benefit for the three months ended June 30, 2023, was $18.6 million, or an effective rate of 61.0%. The difference from the federal statutory tax rate of 21% was driven by the change in the U.S. consolidated filing structure as a result of the Merger, permanent book and tax differences related to earnouts, and elections made by various subsidiaries to voluntarily revoke their S-corporation status effective January 1, 2023.

Current wording

Income tax benefit for the nine months ended September 30, 2023, was $11.5 million, or an effective rate of 50.2%. The difference from the federal statutory tax rate of 21% was driven by the pre-tax loss, change in the U.S. consolidated filing structure as a result of the Merger, permanent book and tax differences related to earnouts, elections made by various subsidiaries to voluntarily revoke their S-corporation status effective January 1, 2023, state income taxes, the income earned in foreign jurisdiction with a zero tax rate, however, that foreign income is included within U.S taxable income through GILTI, and finally the impact of worldwide forecast on the interim calculation under ASC 740.

Previous wording

Gross loss for the three months ended June 30, 2024, was $49.2 million, or (28.6)% of segment revenue, compared to gross loss of $39.7 million, or (20.7)% of segment revenue, for the three months ended June 30, 2023. The primary contributions to the increase in gross loss of $9.5 million were decreases in profitability of $6.6 million from a street maintenance project in Texas and $3.6 million for a bridge project on the east coast, for the three months ended June 30, 2024 versus the same period in 2023.

Current wording

Gross loss for the three months ended September 30, 2024, was $32.8 million, or (27.9)% of segment revenue, compared to gross income of $17.1 million, or 7.7% of segment revenue, for the three months ended September 30, 2023. The primary contributions to the increase in gross loss of $49.8 million were decreases in profit contribution of $7.0 million from the M&P line, $23.1 million from five bridge projects, $12.3 million from a project in the Bahamas, $5.4 million from a street maintenance project in Texas, and $2.0 million completing takeover work related to the American Bridge acquisition, for the three months ended September 30, 2024 versus the same period in 2023.

Previous wording

The following table sets forth segment information for the six months ended June 30, 2024 and 2023:

Current wording

The following table sets forth segment information for the nine months ended September 30, 2024 and 2023:

Previous wording

Gross profit for the three months ended June 30, 2024, was $9.2 million, or 11.5% of segment revenue, compared to $5.9 million, or 9.0%, of segment revenue, for the three months ended June 30, 2023. The primary drivers to the increase of $3.3 million were increased profit contribution of $2.2 million from a water project in Texas and $1.7 million from a water project in North Dakota, for the three months ended June 30, 2024 versus the same period in 2023.

Current wording

Gross profit for the nine months ended September 30, 2024, was $8.7 million, or 4.0% of segment revenue, compared to $27.1 million, or 11.8% of segment revenue, for the nine months ended September 30, 2023. The primary driver to the decrease in gross profit of $18.4 million were decreased profit contribution of $15.7 from a tunnel project in Canada and $8.3 million from a tunnel project in Texas, for the nine months ended September 30, 2024 versus the same period in 2023. This increase in gross loss was partially offset by increased profit contribution of $4.8 million from a water project in North Dakota, for the nine months ended September 30, 2024 versus the same period in 2023.

Previous wording

The Company settled several contract disputes in its Transportation Segment that impacted the three months ended June 30, 2024. These settlements resulted in approximately $39.7 million of non-recurring reductions to gross profit in the Transportation segment that arose from the M&P business. As a result of these settlements, the Company will receive approximately $58.0 million of cash in the third quarter of 2024.

Current wording

The Company settled several contract disputes in its Transportation Segment during the second quarter that impacted the nine months ended September 30, 2024. These settlements resulted in approximately $39.7 million of non-recurring reductions to gross profit in the Transportation segment that arose from the M&P business. As a result of these settlements, the Company received $58.0 million of cash in the third quarter of 2024.

Previous wording

Revenue for the six months ended June 30, 2024, was $376.0 million, a decrease of $17.2 million, or 4.4%, compared to the six months ended June 30, 2023. This was primarily attributable to decreased revenues of $47.2 million from the M&P line and $33.1 million from a street maintenance project in Texas for the six months ended June 30, 2024 versus the same period in 2023. These decreases were partially offset by increased revenues of $39.4 million from two bridge projects on the east coast, $11.4 million from an elevated roadway and bridge project in Florida, and $10.8 million from a project in the Bahamas, for the six months ended June 30, 2024 versus the same period in 2023.

Current wording

Revenue for the nine months ended September 30, 2024, was $493.4 million, a decrease of $121.5 million, or 19.8%, compared to the nine months ended September 30, 2023. This decrease was primarily attributable to decreased revenues of $77.6 million from the M&P line, $50.2 million from a project in the Bahamas, $47.9 million from a street maintenance project in Texas and $28.6 million from a bridge project in the Midwest, for the nine months ended September 30, 2024 versus the same period in 2023. These decreases were partially offset by increased revenues of $44.5 million from a bridge project on the east coast, $26.9 million from a project in the Bahamas and $16.0 million from an elevated roadway and bridge project in Florida, for the nine months ended September 30, 2024 versus the same period in 2023.

Previous wording

Gross loss for the six months ended June 30, 2024, was $46.6 million, or (12.4)% of segment revenue, compared to gross loss of $29.5 million, or (7.5)% of segment revenue, for the six months ended June 30, 2023. The primary contributions to the increase of gross loss of $17.1 million was a decrease in profitability of $10.5 million from a bridge project in the Midwest and $9.1 million from a street maintenance project in Texas, for the six months ended June 30, 2024 versus the same period in 2023. This decrease was partially offset by an increase in profitability of $2.6 million from a water project in Kentucky, for the six months ended June 30, 2024 versus the same period in 2023.

Current wording

Gross loss for the nine months ended September 30, 2024, was $79.4 million, or (16.1)% of segment revenue, compared to gross loss of $12.5 million, or (2.0)% of segment revenue, for the nine months ended September 30, 2023. The primary contributions to the increase of gross loss of $66.9 million was a decrease in profit contribution of $4.1 million from the M&P line, $22.5 million from a bridge project in the Midwest, $14.5 million from a street maintenance project in Texas, $14.5 million completing takeover work related to the American Bridge acquisition and $10.5 million from a project in the Bahamas, for the nine months ended September 30, 2024 versus the same period in 2023.

Previous wording

We will receive cash proceeds from the exercise of any Warrants that are exercised on a cash basis. We believe the likelihood that Warrant holders will exercise their Warrants, and therefore the amount of cash proceeds that we would receive, is dependent upon the trading price of our common stock. On August 5, 2024, the closing price of our common stock was $3.33 per share. To the extent the market price of our common stock remains below the exercise price of $11.50 per share, we believe that Warrant holders will be unlikely to exercise their Warrants for cash, resulting in little or no cash proceeds to us for any such exercise. To the extent we receive any cash proceeds, we expect to use such proceeds for general corporate and working capital purposes, which would increase our liquidity. However, we do not expect to rely materially on the cash exercise of Warrants to fund our operations.

Current wording

We will receive cash proceeds from the exercise of any Warrants that are exercised on a cash basis. We believe the likelihood that Warrant holders will exercise their Warrants, and therefore the amount of cash proceeds that we would receive, is dependent upon the trading price of our common stock. On November 1, 2024, the closing price of our common stock was $2.84 per share. To the extent the market price of our common stock remains below the exercise price of $11.50 per share, we believe that Warrant holders will be unlikely to exercise their Warrants for cash, resulting in little or no cash proceeds to us for any such exercise. To the extent we receive any cash proceeds, we expect to use such proceeds for general corporate and working capital purposes, which would increase our liquidity. However, we do not expect to rely materially on the cash exercise of Warrants to fund our operations.

Previous wording

Our current and future liquidity is greatly dependent upon our operating results, which are largely determined by overall economic conditions, our current contracts and Backlog. Our liquidity could be adversely affected by a disruption in the availability of credit. If such a material adverse event were to occur, we may be unable to borrow under our revolving credit facility agreement or may be required to seek additional financing. In addition, we may be required to seek additional financing to refinance all or a significant portion of our existing debt on or prior to maturity. We may also seek to access the public or private equity markets to support our liquidity whenever required or conditions are favorable to us. We have filed a shelf registration statement on Form S-3 with the SEC that was declared effective by the SEC on April 8, 2024 (File No. 333-278008), which allows us to offer and sell up to an aggregate amount of $150.0 million of any combination of common stock, preferred stock, debt securities, warrants to purchase common stock, preferred stock or debt securities, or units of these securities from time to time subject to Instruction I.B.6 to Form S-3 which limits the aggregate market value of securities we may sell during any 12 consecutive months to one-third of our public float for so long as our public float is less than $75.0 million. There can be no assurance that we will be able to raise additional capital or obtain additional financing when needed or on terms that are favorable to us.

Current wording

Our current and future liquidity is greatly dependent upon our operating results, which are largely determined by overall economic conditions, our current contracts and Backlog. Our liquidity could be adversely affected by a disruption in the availability of credit. If such a material adverse event were to occur, we may be unable to borrow under our Credit Facility (as defined below) or may be required to seek additional financing. In addition, we may be required to seek additional financing to refinance all or a significant portion of our existing debt on or prior to maturity. We may also seek to access the public or private equity markets to support our liquidity whenever required or conditions are favorable to us. We have filed a shelf registration statement on Form S-3 with the SEC that was declared effective by the SEC on April 8, 2024 (File No. 333-278008), which allows us to offer and sell up to an aggregate amount of $150.0 million of any combination of common stock, preferred stock, debt securities, warrants to purchase common stock, preferred stock or debt securities, or units of these securities from time to time subject to Instruction I.B.6 to Form S-3 which limits the aggregate market value of securities we may sell during any 12 consecutive months to one-third of our public float for so long as our public float is less than $75.0 million. There can be no assurance that we will be able to raise additional capital or obtain additional financing when needed or on terms that are favorable to us.

Previous wording

The following table sets forth summary change in cash, cash equivalent and restricted cash for the six months ended June 30, 2024 and 2023:

Current wording

The following table sets forth summary change in cash, cash equivalent and restricted cash for the nine months ended September 30, 2024 and 2023:

Previous wording

Net cash provided by operating activities was $17.5 million during the six months ended June 30, 2024. During the six months ended June 30, 2024, the primary drivers in cash provided by operating activities were an increase of $77.2 million in accounts payable and accrued liabilities, an increase of $31.9 million in contract liabilities, a decrease of $27.4 million in contract assets and $11.1 million in depreciation and amortization, offset by an increase of $64.7 million in accounts receivables, $44.8 million in net loss, $15.9 million in deferred taxes and $3.2 million in earnings from equity method investments. Net cash used

Current wording

Net cash provided by operating activities was $12.2 million during the nine months ended September 30, 2024. During the nine months ended September 30, 2024, the primary drivers in cash provided by operating activities were a decrease of $97.8 million in contract assets, an increase of $50.1 million in contract liabilities, $16.9 million in depreciation and amortization and $1.2 million increase in operating lease liabilities, offset by $105.1 million in net loss, $26.7 million in deferred taxes, and a decrease of $22.1 million in accounts payable and accrued liabilities. Net cash used in operating activities was $36.6 million

Previous wording

in operating activities was $10.6 million during the six months ended June 30, 2023. During the six months ended June 30, 2023, the primary drivers in cash used in operating activities were an increase of $53.6 million in accounts receivable, $21.9 million in deferred taxes, $20.7 million of changes in the fair value of earnout liability, and $16.2 million in net losses, offset by a $65.8 million increase in contract liabilities and a $21.7 million increase in accounts payable and accrued liabilities.

Current wording

during the nine months ended September 30, 2023. During the nine months ended September 30, 2023, the primary drivers in cash used in operating activities were an increase of $69.5 million in accounts receivable and $22.1 million in deferred taxes, offset by a $53.0 million increase in contract liabilities.

Previous wording

Net cash provided by investing activities was $3.0 million during the six months ended June 30, 2024. During the six months ended June 30, 2024, the primary drivers in cash provided by investing activities were proceeds from sale of property and equipment of $3.2 million and distributions from investees of $4.2 million, offset by purchases of property and equipment of $4.2 million. Net cash provided by investing activities was $2.2 million during the six months ended June 30, 2023. During the six months ended June 30, 2023, the primary drivers in cash provided by investing activities were proceeds from sale of property and equipment of $7.2 million, which was partially offset by purchases of property and equipment of $5.0 million.

Current wording

Net cash provided by investing activities was $2.3 million during the nine months ended September 30, 2024. During the nine months ended September 30, 2024, the primary drivers in cash provided by investing activities were $4.5 million in proceeds from sale of property and equipment and $4.2 million in distributions from investees, offset by $6.2 million in purchases of property and equipment. Net cash used in investing activities was $0.5 million during the nine months ended September 30, 2023. During the nine months ended September 30, 2023, the primary driver in cash used in investing activities was $0.5 million in capital contribution to unconsolidated investments.

Previous wording

Net cash used in financing activities was $15.1 million for the six months ended June 30, 2024. During the six months ended June 30, 2024, the primary drivers in cash used in financing activities were $36.9 million of payments on notes payable and $2.7 million of payments on finance leases, offset by $24.7 million of borrowings on notes payable. Net cash used in financing activities was $9.7 million for the six months ended June 30, 2023. During the six months ended June 30, 2023, the primary drivers in cash used in financing activities were $27.7 million of payments on notes payable that were offset by $17.1 million of proceeds from the Merger and $3.0 million in borrowings on a line of credit.

Current wording

Net cash provided by financing activities was $28.4 million for the nine months ended September 30, 2024. During the nine months ended September 30, 2024, the primary drivers in cash provided by financing activities were $167.8 million in borrowings on notes payable and $42.5 million in proceeds from financing obligations, offset by $95.0 million of payments on the Revolving Credit Facility (as defined below), $80.6 million in payments on notes payable and $5.5 million in payments of deferred financing costs. Net cash provided by financing activities was $11.7 million for the nine months ended September 30, 2023. During the nine months ended September 30, 2023, the primary drivers in cash provided by financing activities were $17.1 million in proceeds from the Merger and $3.0 million in borrowings on the Revolving Credit Facility, offset by $8.0 million in payments on the revolving credit facility.

Previous wording

As of June 30, 2024, we had total long-term debt of $307.8 million, of which $134.5 million is due within the next twelve months. In February 2024, May 2024 and August 2024, the Company amended the revolving credit facility to restructure certain covenant levels. We are currently in compliance with all applicable debt covenants, as amended or waived.

Current wording

As of September 30, 2024, we had total debt of $318.3 million, of which $43.1 million is due within the next twelve months.

Previous wording

We enter into secured notes in order to finance growth within our business. In July 2023, we refinanced approximately $76.4 million of existing secured notes in exchange for a new equipment note in the amount of $113.5 million. The new equipment note is secured by specific construction equipment assets and has a five-year fully amortizing term at a fixed rate of 7.25%. We incurred $0.3 million as deferred financing cost and $0.6 million as bank service charges in connection with the refinancing. The deferred financing costs are included in long-term debt on our consolidated balance sheets. Additionally, as part of the refinancing, we incurred a loss on extinguishment of debt of $0.6 million, which was included in other income, net on our consolidated statements of operations. As of June 30, 2024, we had outstanding secured notes expiring between December 2025

Current wording

We enter into secured notes in order to finance growth within our business. In July 2023, we refinanced approximately $76.4 million of existing secured notes in exchange for a new equipment note in the amount of $113.5 million. The equipment note is secured by specific construction equipment assets and has a five-year fully amortizing term at a fixed rate of 7.25%. We incurred $0.3 million as deferred financing cost in connection with the refinancing. The deferred financing costs are included in long-term debt on our consolidated balance sheets. Additionally, as part of the refinancing, we incurred a loss on extinguishment of debt of $0.6 million, which was included in other income, net on our consolidated statements of operations and $0.6 million as bank service charges in connection with the refinancing. As of September 30, 2024, we had outstanding secured notes expiring between December 2025 and March 2033. Interest rates on the secured notes range between 0.00% and 12.90%. The secured notes are collateralized by certain assets of Southland’s fleet of equipment.

Previous wording

We also enter into mortgage notes in order to finance growth within our business. As of June 30, 2024, we had outstanding mortgage notes scheduled to expire between October 2024 and February 2029. Interest rates on the mortgage notes range between 3.84% and 5.99%.

Current wording

We enter into mortgage notes in order to finance growth within our business. As of September 30, 2024, we had mortgage notes expiring between October 2024 and February 2029. Interest rates on the mortgage notes range between 3.84% and 5.99%. The mortgage notes are collateralized by certain real estate owned by Southland.

Previous wording

In July 2021, we entered into a revolving credit facility agreement with Frost Bank for $50.0 million. As of December 31, 2022, the revolving credit facility agreement had been amended and increased to $100.0 million. In August 2023, therevolving credit facilitywas extended through January 15, 2025 and we incurred $0.3 million in deferred financing costs. The revolving credit facility agreement bears interest on drawn balances at 1-month SOFR, subject to a floor of 0.90%, plus an applicable margin rate of 3.00%. The waiver in May 2024 amended the revolving credit facility limit to $95.0 million, a $5.0 million cash collateral deposit, or debt paydown and extended maturity to April 15, 2025. As of June 30, 2024, $90.0 million was drawn on the revolving credit facility. The Company made an additional $3.0 million payment on the revolving credit facility subsequent to June 30, 2024, in connection with a real estate transaction (see Note 15).

Current wording

In July 2021, we entered into the Revolving Credit Facility agreement with Frost Bank for $50.0 million. As of December 31, 2022, the Revolving Credit Facility agreement had been amended and increased to $100.0 million. In August 2023, the Revolving Credit Facility was extended through January 15, 2025. In July 2024, the Company made a $3.0 million payment on the Revolving Credit Facility, in connection with a real estate transaction (see Note 2).