TIC Solutions, Inc.
For the period ended Sep 30, 2025. Filed Nov 12, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Nov 12, 2025
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Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Management has assessed the effectiveness of our disclosure controls and procedures as defined under Rules 13a-15(c) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These controls and procedures provide reasonable assurance that the information we are required to disclose is collected and communicated to management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), and processed timely to support appropriate disclosure decisions. These controls are also designed to ensure that such information is accurately recorded, processed, summarized and reported within the timeframes required by SEC rules and forms.
Based on this assessment, our CEO and CFO concluded that, as of September 30, 2025, our disclosure controls and procedures were not effective at a reasonable assurance level due to the material weaknesses previously disclosed in our 2024 Annual Report.
Material Weaknesses in Internal Control Over Financial Reporting
A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of annual or interim financial statements will not be prevented or detected on a timely basis.
As indicated above, we identified material weaknesses in our internal control over financial reporting and concluded that we had not designed and maintained an effective control environment commensurate with our financial reporting requirements. Specifically, we lacked a sufficient complement of resources with (i) an appropriate level of accounting knowledge, training and experience to appropriately analyze, record and disclose accounting matters timely and accurately, and (ii) an appropriate level of knowledge and experience to establish effective processes and controls. This material weakness contributed to the following two additional material weaknesses:
We did not design and maintain effective controls related to the period-end financial reporting process, including designing and maintaining formal accounting policies, procedures and controls to achieve complete, accurate and timely financial accounting, reporting and disclosures; further, we did not design and maintain controls over the preparation and review of account reconciliations and journal entries, including maintaining appropriate segregation of duties.
These material weaknesses resulted in the misstatement of our provision (benefit) for income taxes and deferred tax liabilities and related financial statement disclosures which resulted in the restatement of our financial statements for the predecessor period from January 1, 2024 to July 29, 2024. These material weaknesses also resulted in immaterial audit adjustments to our current and previously issued consolidated financial statements in the following financial statement line items: Accounts receivable; Accounts payable; Accrued expenses and other current liabilities; Deferred income tax liabilities; Lease obligations; Revenue; Cost of revenue; Selling, general and administrative expenses; and Interest expense. Additionally, these material weaknesses could result in a misstatement of substantially all of the Company’s accounts or disclosures that would result in a material misstatement to the annual or interim consolidated financial statements that would not be prevented or detected.
We did not design and maintain effective information technology (“IT”) general controls for information systems that are relevant to the preparation of our financial statements. Specifically, we did not design and maintain:
User access controls to ensure appropriate segregation of duties and to adequately restrict user and privileged access to appropriate personnel;
Program change management controls to ensure that information technology program and data changes are identified, tested, authorized and implemented appropriately;
Computer operations controls to ensure that processing and transfer of data, and data backups and recovery are monitored; and
Program development controls to ensure that new software development is tested, authorized and implemented appropriately.
These IT deficiencies did not result in a material misstatement to the financial statements, however, the deficiencies, when aggregated, could impact maintaining effective segregation of duties, as well as the effectiveness of IT-dependent controls (such as automated controls that address the risk of material misstatement to one or more assertions, along with the IT controls and underlying data that support the effectiveness of system-generated data and reports) that could result in misstatements potentially impacting all financial statement accounts and disclosures that would not be prevented or detected. Accordingly, management has determined these deficiencies in the aggregate constitute a material weakness.
Management’s Plans to Remediate the Material Weaknesses
Management is in the process of implementing its remediation plans for the material weaknesses that have been identified. The Company is implementing enhancements to its internal controls to remediate the identified material weaknesses in its internal control over financial reporting. We are committed to maintaining a strong control environment and will continue to monitor the effectiveness of these efforts, adjusting as necessary.
Specifically, the Company has:
Engaged a third-party advisor to support the design and implementation of a robust compliance program in accordance with the Sarbanes-Oxley Act (“SOX”);
Hired a new Corporate Controller and VP of Finance, both with experience in building and enhancing control environments, to strengthen the finance organization;
Delivered targeted training across the organization on SOX requirements, internal controls over financial reporting, segregation of duties and other critical control environment topics;
Completed a financial statement risk assessment and documented business processes and internal controls deemed critical to financial reporting;
Developed and begun implementing enhanced policies and procedures for journal entries, account reconciliations, and other core accounting processes;
Began assessing the design and operating effectiveness of internal controls over financial reporting;
Initiated remediation of segregation of duties conflicts and improvements to user access protocols; and
Implemented monitoring controls over key information systems and applications relevant to financial reporting.
In addition, the Company plans to continue hiring qualified accounting, finance and IT personnel with the necessary skills and expertise to support ongoing remediation and sustain a strong control environment.
While these remediation efforts are expected to significantly improve our internal control over financial reporting, they require time to be fully implemented and validated. Additional controls may also be required over time as the organization evolves. The Company will not be able to conclude that the material weaknesses have been remediated until the new and enhanced controls have been in place for a sufficient period of time and have been tested for both design and operating effectiveness. Until such time, the previously identified material weaknesses may continue to exist.
Changes in Internal Control Over Financial Reporting
Other than the changes described above, there have not been any changes to our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the three months ended September 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. As of the filing of this report, we continue to implement the changes and remediation plans described above.
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