Filed pursuant to Rule 424(b)(1)
Registration No. 333-284251

 

PROSPECTUS

 

24,000,000 Shares

Titan America SA

Common Shares

 

 

This is an initial public offering of the common shares, no nominal value per share (“common shares”), of Titan America SA (“TASA”). We are offering 9,000,000 common shares. Titan Cement International SA, (the “selling shareholder”), is offering 15,000,000 common shares. We will not receive any of the proceeds from the common shares sold by the selling shareholder in this offering.

The initial public offering price is $16.00 per common share. Currently, no public market exists for our common shares. Our common shares have been approved for listing on the New York Stock Exchange (“NYSE”) under the symbol “TTAM.”

The selling shareholder has granted the underwriters an option for a period of 30 days after the date of this prospectus to purchase up to an additional 3,600,000 common shares from the selling shareholder at the initial public offering price less the underwriting discounts and commissions.

Upon completion of this offering, the selling shareholder will hold approximately 87% of the voting rights of our outstanding share capital immediately, assuming no exercise of the underwriters’ option to purchase additional common shares. As a result, we will be a “controlled company” as defined under the NYSE corporate governance requirements. See “Risk Factors” and “Management—Corporate Governance—Director Independence and Controlled Company Exception” for additional information.

We are a “foreign private issuer” under applicable Securities and Exchange Commission rules, and as a result, will be subject to reduced public company reporting requirements for this prospectus and future filings with the Securities and Exchange Commission.

 

 

Our business and an investment in our common shares involve significant risks. You should carefully consider the risks that are described under the caption “Risk Factors” beginning on page 32 of this prospectus before making a decision to invest in our common shares.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

 

 

 

		Per Share				Total
Initial public offering price		$	16.00			$	384,000,000
Underwriting discounts and commissions(1)		$	0.80			$	19,200,000
Proceeds, before expenses, to us		$	15.20			$	136,800,000
Proceeds, before expenses, to the selling shareholder		$	15.20			$	228,000,000

 

(1)	See “Underwriting” for additional information regarding total underwriter compensation.

The underwriters expect to deliver our common shares to purchasers against payment on or about February 10, 2025.

 

 

Joint Book-Running Managers

(*in alphabetical order)

 

Citigroup*		Goldman Sachs & Co. LLC*

Bookrunners

 

BofA Securities		BNP PARIBAS		Jefferies		HSBC		SOCIETE GENERALE		Stifel

February 6, 2025

TABLE OF CONTENTS

 

BASIS OF PRESENTATION			1
INDUSTRY AND MARKET DATA			1
TRADEMARKS, TRADE NAMES AND SERVICE MARKS			1
PRESENTATION OF FINANCIAL INFORMATION			1
NON-IFRS FINANCIAL MEASURES			2
PROSPECTUS SUMMARY			3
RISK FACTORS			32
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS			69
USE OF PROCEEDS			71
DIVIDEND POLICY			72
CAPITALIZATION			73
DILUTION			75
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			76
INDUSTRY			116
BUSINESS			127
MANAGEMENT			174
EXECUTIVE COMPENSATION			183
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS			187
PRINCIPAL AND SELLING SHAREHOLDER			191
DESCRIPTION OF SHARE CAPITAL			193
SHARES ELIGIBLE FOR FUTURE SALE			206
UNDERWRITING			207
MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS			213
MATERIAL BELGIAN FEDERAL INCOME TAX CONSIDERATIONS			216
EXPENSES RELATED TO THE OFFERING			222
LEGAL MATTERS			223
EXPERTS			224
WHERE YOU CAN FIND MORE INFORMATION			225
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS			F-1

Through and including the 25th day after the date of this prospectus, all dealers that effect transactions in our common shares, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligations to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

Neither we, the selling shareholder nor any of the underwriters have authorized anyone to provide you with any information other than that contained in this prospectus or in any free writing prospectus prepared by or on behalf of us or to which we may have referred you. We, the selling shareholder and the underwriters take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. Neither we, the selling shareholder nor any of the underwriters are making an offer to sell the common shares in any jurisdiction where the offer or sale is not permitted. This offering is being made in the United States and elsewhere solely on the basis of the information contained in this prospectus. You should assume that the information appearing in this prospectus is accurate only as of the date on the front cover of this prospectus, regardless of the time of delivery of this prospectus or any sale of the common shares. Our business, financial condition, results of operations and prospects may have changed since the date on the front cover of this prospectus.

BASIS OF PRESENTATION

Unless otherwise indicated or unless the context otherwise requires, (a) all references in this prospectus to the “Company,” “Titan America,” “we,” “us,” “our” or similar terms refer to Titan America SA and its subsidiaries, following the contribution of Titan Atlantic Cement Industrial and Commercial S.A. (“Titan Atlantic”) to Titan America SA (the “Contribution”) in connection with the Reorganization Transactions (as defined below), (b) all references to “TASA” refer to Titan America SA and not its subsidiaries and (c) all references to “Titan Cement International” and “our Parent” refer to Titan Cement International SA, Titan America’s ultimate parent, and its consolidated subsidiaries other than Titan America and Titan America’s subsidiaries. All references to “shares” or “common shares” in this prospectus refer to the common shares of Titan America SA, no nominal value per share. Unless otherwise indicated, all references to “tons” in this prospectus refer to short tons. In connection with the completion of this offering, we will complete certain reorganization transactions and related transactions with Titan Cement International, as more fully described under “Prospectus Summary—The Reorganization Transactions” (the “Reorganization Transactions”). Unless otherwise stated or the context otherwise requires, all information in this prospectus reflects the completion of the Reorganization Transactions and this offering. In addition, after the Contribution, on January 1, 2025 Titan America LLC divested its wholly-owned subsidiaries, ST Equipment & Technology LLC and ST Equipment & Technology Trading Company LLC (collectively, the “STET segment”) in a sale for cash, to be settled no later than January 31, 2025, to Titan Cement Netherlands B.V., a wholly-owned subsidiary of Titan Cement International, which is outside the scope of this offering. The STET segment is a nonreportable operating segment included in the Company’s historical financial results.

INDUSTRY AND MARKET DATA

The data included in this prospectus regarding markets and the industry in which we operate, including the size of certain markets and our position and the position of our competitors within these markets, are based on reports of government agencies, independent industry sources such as Dodge Construction Network, an independent business analysis and consultancy group focused on the commercial construction sector, the Portland Cement Association, a non-governmental cement industry association, Cement Products Magazine, an independent industry publication, and other research consultants, as well as our own estimates relying on our management’s knowledge and experience in the markets in which we operate. Our management’s knowledge and experience is based on information obtained from our customers, distributors, suppliers, trade and business organizations and other contacts in the markets in which we operate. We believe these estimates to be accurate as of the date of this prospectus. However, the assumptions and estimates of our and our industry’s future performance are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in “Risk Factors.” These and other factors could cause future performance to differ materially from our assumptions and estimates and those of independent third parties. See “Special Note Regarding Forward-Looking Statements.” While we believe our internal research is reliable and the definitions of our market and industry are appropriate, neither such research nor these definitions have been verified by any independent source.

TRADEMARKS, TRADE NAMES AND SERVICE MARKS

We own or have rights to trademarks, trade names or service marks that we use in connection with the operation of our business. Solely for convenience, the trademarks, trade names and service marks referred to in this prospectus are listed without the ^® and TM symbols, but we will assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensors to these trademarks, trade names and service marks.

PRESENTATION OF FINANCIAL INFORMATION

This prospectus includes financial information which has been derived from TASA’s audited consolidated financial statements as of December 31, 2023 and 2022 and for the years ended December 31, 2023, 2022 and

 

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2021, TASA’s unaudited interim condensed consolidated interim financial statements as of September 30, 2024 and for the nine months ended September 30, 2024 and 2023, and the related notes, which are collectively referred to as “consolidated financial statements” or “financial statements,” and can be found beginning on page F-1 of this prospectus.

We maintain our books and records in U.S. dollars. We prepare our audited consolidated financial statements in accordance with International Financial Reporting Standards (“IFRS Accounting Standards”) as issued by the International Accounting Standards Board (“IFRS”). The definition of IFRS also encompasses all valid International Accounting Standards, as well as all interpretations of the International Financial Reporting Interpretations Committee, including those formally issued by the Standing Interpretations Committee. None of the consolidated financial statements in this prospectus were prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). In this prospectus, unless otherwise specified, all monetary amounts are in U.S. dollars and all references to “$” mean U.S. dollars.

We have made rounding adjustments to some of the figures included in this prospectus. Accordingly, numerical figures shown as totals in some tables may not be an arithmetic aggregation of the figures that precede them.

We have historically conducted our business through Titan America LLC (a wholly-owned subsidiary of Titan Atlantic) and Titan America LLC’s subsidiaries. Titan America SA has not commenced operations and has nominal assets and liabilities. Upon completion of the Reorganization Transactions prior to the completion of this offering, Titan Atlantic will become a subsidiary of Titan America SA. Our financial statements present the historical financial position and results of operations of Titan Atlantic and its consolidated subsidiaries, including Titan America LLC and its subsidiaries.

NON-IFRS FINANCIAL MEASURES

We refer to the terms “Adjusted EBITDA,” “Free Cash Flow,” “Net Debt” and “Ratio of Net Debt to Adjusted EBITDA” in various places in this prospectus. These are supplemental financial measures that are not prepared in accordance with IFRS and should not be viewed as a substitute for IFRS measures. Although our management uses these non-IFRS financial measures when planning, monitoring and evaluating our performance, any analysis of non-IFRS financial measures should be used only in conjunction with results presented in accordance with IFRS. The non-IFRS financial measures we present may not be comparable to similarly-named measures reported by other companies.

We define Adjusted EBITDA as net income before finance cost, net, income tax expense, depreciation, depletion and amortization, further adjusted to remove the impact of additional items such as (gain)/loss on disposal of fixed assets, asset impairment (recovery)/loss, foreign exchange (gain)/loss, net, derivative financial instrument (gain)/loss, net, fair value loss on sale of accounts receivable, net, share-based compensation and other non-recurring items, including certain IPO transaction costs associated with this offering. Net income is the IFRS measure most directly comparable to Adjusted EBITDA.

Free Cash Flow is comprised of net cash provided by operating activities, less net payments for capital expenditures, which includes (i) investments in equipment, (ii) investments in identifiable intangible assets and (iii) proceeds from the sale of assets, net of disposition costs. The IFRS measure most directly comparable to Free Cash Flow is net cash provided by operating activities.

Net Debt comprises the sum of short and long-term borrowings, including accrued interest and current and non-current lease liabilities less cash and cash equivalents. Net Debt is used by management to measure the effective level of our indebtedness.

We define the Ratio of Net Debt to Adjusted EBITDA as the ratio derived by dividing Net Debt by Adjusted EBITDA.

 

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Summary Historical Consolidated Financial Information

The following tables set forth our summary historical consolidated financial data derived from our financial statements as of the dates and for each of the periods indicated. The summary historical financial data as of December 31, 2023 and 2022 and for each of the three years ended December 31, 2023, 2022 and 2021 have been derived from our audited financial statements included elsewhere in this prospectus. The summary historical financial data as of September 30, 2024 and for each of the nine months ended September 30, 2024 and 2023 have been derived from our unaudited interim condensed consolidated financial statements included elsewhere in this prospectus. Our historical results are not necessarily indicative of the results to be expected for any future period.

You should read this summary historical financial data in conjunction with the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements included elsewhere in this prospectus.

 

		Nine Months Ended September 30,								Years Ended December 31,
		2024				2023				2023				2022				2021
Income Statement (thousands)
Revenue		$	1,244,578			$	1,192,464			$	1,591,601			$	1,364,146			$	1,152,417
Cost of goods sold			(923,653	)			(920,955	)			(1,228,112	)			(1,142,880	)			(956,261	)
Gross profit		$	320,925			$	271,509			$	363,489			$	221,266			$	196,156
Selling expense			(24,913	)			(21,271	)			(31,009	)			(29,938	)			(24,724	)
General and administrative expense			(91,823	)			(74,608	)			(99,909	)			(87,513	)			(76,292	)
Net impairment losses on financial assets			(251	)			(1,136	)			(1,224	)			(3,711	)			(937	)
Fair value loss on sale of accounts receivable, net			(4,050	)			(4,937	)			(6,113	)			(3,041	)			(1,101	)
Other operating income (loss), net			1,341				11				402				(21	)			1,073
Operating income		$	201,229			$	169,568			$	225,636			$	97,042			$	94,175
Finance cost, net			(18,835	)			(19,156	)			(22,244	)			(19,078	)			(21,856	)
Income (loss) from associate			—				—				—				272				(682	)
Foreign exchange gain (loss), net			(7,467	)			1,970				(11,981	)			19,990				28,835
Derivative financial instrument gain (loss), net			(1,482	)			(4,155	)			10,967				(18,534	)			(25,915	)
Income before income taxes		$	173,445			$	148,227			$	202,378			$	79,692			$	74,557
Income tax expense			(43,899	)			(38,427	)			(47,134	)			(16,971	)			(15,336	)
Net Income		$	129,546			$	109,800			$	155,244			$	62,721			$	59,221
Earnings per common share:
Basic earnings per share		$	0.74			$	0.63			$	0.89			$	0.36			$	0.34
Diluted earnings per share		$	0.74			$	0.63			$	0.89			$	0.36			$	0.34
Weighted average number of common shares – basic and diluted			175,362,465				175,362,465				175,362,465				175,362,465				175,362,465

 

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		As of September 30,				As of December 31,
		2024				2023				2022
Financial Position (thousands)
Cash and cash equivalents		$	12,149			$	22,036			$	29,841
Total current assets		$	372,500			$	372,899			$	356,895
Total assets		$	1,547,516			$	1,498,803			$	1,447,232
Short-term borrowings, including accrued interest		$	141,816			$	267,670			$	74,339
Lease liabilities (current portion)		$	11,901			$	11,737			$	13,352
Total current liabilities		$	341,300			$	491,974			$	325,458
Long-term borrowings		$	227,858			$	76,262			$	320,167
Lease liabilities (non-current portion)		$	57,615			$	53,744			$	54,055
Total liabilities		$	784,854			$	779,032			$	854,505
Total stockholder’s equity		$	762,662			$	719,771			$	592,727

 

		Nine Months Ended September 30,								Years Ended December 31,
		2024				2023				2023				2022				2021
Cash Flow Summary (thousands)
Net cash provided by operating activities		$	197,143			$	142,415			$	227,125			$	178,374			$	146,703
Net cash used in investing activities		$	(112,121	)		$	(91,125	)		$	(117,653	)		$	(127,301	)		$	(70,298	)
Net cash used in financing activities		$	(97,214	)		$	(74,891	)		$	(117,779	)		$	(21,661	)		$	(197,138	)

 

As of September 30,

As of December 31,

2024

2023

2022

Additional Measures

Ratio of Total Debt to Net Income(2)

2.5 to 1.0

2.6 to 1.0

7.4 to 1.0

 

		Nine Months Ended September 30,								Years Ended December 31,
		2024				2023				2023				2022				2021
Non-IFRS Financial Measures(1) (thousands)
Adjusted EBITDA		$	286,878			$	241,136			$	328,373			$	193,097			$	177,585
Free Cash Flow		$	83,796			$	50,602			$	108,522			$	50,365			$	75,934
Net Debt(2)		$	427,041				—			$	387,377			$	432,253				—
Ratio of Net Debt to Adjusted EBITDA(2)			1.1 to 1.0				—				1.2 to 1.0				2.2 to 1.0				—

 

(1)	See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Non-IFRS Measures” for a discussion of these measures and a reconciliation of each to the most directly comparable IFRS measure.

(2)

Total Debt, Ratio of Total Debt to Net Income, Net Debt and Ratio of Net Debt to Adjusted EBITDA are balance sheet metrics and are presented as of the last day of each fiscal period. The Ratio of Total Debt to Net Income for the interim periods measures Total Debt at period end to Net Income for trailing twelve months for the periods presented. The Ratio of Net Debt to Adjusted EBITDA for the interim periods measures Net Debt at period end to Adjusted EBITDA for the trailing twelve months for the periods presented.

 

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RISK FACTORS

This offering and investing in our common shares involve a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information contained in this prospectus, including our consolidated financial statements and the related notes appearing at the end of this prospectus, before deciding to invest in our common shares. Other risks and uncertainties that we do not presently consider to be material, or of which we are not presently aware, may become important factors that affect our future financial condition and financial performance. If any of those or the following risks actually occur, our business, financial condition, financial performance, liquidity and prospects could suffer materially, the trading price of our common shares could decline and you could lose all or part of your investment. See also “Special Note Regarding Forward-Looking Statements.”

Risks Related to Our Business and Industry

We have been, and may continue to be, adversely impacted by volatility and seasonality in the U.S. residential and non-residential construction markets.

Our business is largely dependent on demand for residential construction, public spending levels for infrastructure and large-scale projects. The U.S. residential and non-residential construction markets are volatile and subject to cyclical market pressures. The level of activity in the U.S. residential and non-residential construction markets is based on numerous factors such as availability of credit, interest rates, general economic conditions, consumer confidence and other factors that are beyond our control. As a result of macroeconomic headwinds we have faced over the past several years, such as prolonged inflationary cost pressures, supply chain disruptions, the impact of public health crises and geopolitical conflicts, U.S. residential and non-residential construction markets have been adversely affected, and may continue to be adversely affected in the future, by changes in the cost of raw materials as well as labor costs, energy costs and freight costs associated with transportation of raw materials. In addition, demand for our products could decline if companies and consumers are unable to obtain financing for construction projects or if an economic recession causes delays or cancellations to infrastructure projects. A significant downturn in activity in either the U.S. non-residential or residential construction markets could have a material adverse effect on our business, financial position, results of operations and cash flows.

We cannot predict the market conditions that will impact the residential or non-residential construction industry or the timing of residential or non-residential construction activity. We also cannot provide any assurances that the operational strategies we have implemented to address current market conditions will be successful. Weakness in the non-residential or residential construction industry could have a material adverse effect on our business, financial position, results of operations and cash flows. Due to the potential volatility in the residential and non-residential construction markets, there may be fluctuations in our operating results, and the results for any historical period may not be indicative of results for any future period. Any uncertainty about current economic conditions can pose a risk to our business, financial position, results of operations and cash flows, as participants in the U.S. non-residential and residential construction industries may postpone spending in response to tighter credit, negative financial news or declines in income or asset values, which could have a material negative effect on the demand for our products.

A significant portion of our business is seasonal, with results of operations affected by weather conditions. For the Mid-Atlantic region, construction material production and related contracting services typically follow the activity in the construction industry, with heavier workloads in the spring, summer and fall. Accordingly, we typically experience a decrease in sales in our Mid-Atlantic reportable segment during the first and fourth quarters reflecting the effect of the winter season in North America and an increase in sales in the second and third quarters reflecting the effect of the summer season in North American markets. Besides the seasonal effects of weather conditions, extreme or unusually adverse weather conditions, which have occurred and may reoccur, such as extreme temperatures, heavy or sustained rainfall or snowfall, wildfires, hurricanes and storms may affect the demand for products and the ability to perform services on construction work. Heavy or sustained rainfall may particularly impact operations of our ready-mix concrete business. Extreme or unusually adverse weather conditions could negatively affect our results of operations, financial position and cash flows.

 

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Fluctuations in energy, fuel prices and transportation costs could have an adverse effect on our costs of goods sold.

A significant proportion of our cost of goods sold are incurred in connection with the consumption of thermal and electric energy necessary to produce our products, and in connection to transportation costs incurred for the distribution of our products. Cement production consumes a large quantity of energy, especially for the kilning and grinding processes.

Energy is also required for the transportation, both within our facilities and externally, of our products through our trucks in addition to the operation of our equipment. The principal elements of these energy costs are fuel expenses and electricity expenses (which include, inter alia, costs for coal, petroleum coke, natural gas and alternative fuels). Due to their size and weight, aggregates are costly and difficult to transport efficiently. Our products and services are generally localized around our aggregate sites and served by truck or in certain markets by rail or barge. We could be negatively impacted by freight costs due to rising fuel costs; rate increases for third-party freight; truck, railcar or barge shortages, including shortages of truck drivers and rail crews; rail service interruptions; and minimum tonnage requirements, among other things. To the extent price increases or other mitigating factors are not sufficient to offset these increased costs adequately or timely, or if the price increases result in a significant decrease in sales volumes, our results of operations, financial position and cash flows could be negatively impacted. Increases or significant fluctuations in energy and fuel costs, freight rates or other transportation costs could adversely affect our results of operations, business and financial condition, especially if we are unable to pass along higher input costs to our customers. Energy prices may vary significantly in the future, largely due to market forces and other factors beyond our control, including changes in the relevant regulatory regime or governmental policy applicable to energy prices. We may also, particularly in the case of coal, experience time lags between movements in energy prices and movements in production costs since the supply of a substantial proportion of energy resources is secured pursuant to long-term purchase agreements. Risks related to fluctuations in energy and fuel costs are increased due to the fact we do not use any long-term hedging instruments to mitigate the effects of such fluctuations. Legal requirements, as well as a heightened awareness of environmental sustainability, have placed increased pressure on energy-intensive industries such as the cement industry to increase their energy efficiency and to transition to more environmentally friendly sources of energy, such as renewables, which could further increase our cost of goods sold. Changes in the availability of energy sources to meet these demands could adversely impact our ability to operate, and changes in energy prices as a result could significantly increase our operating costs.

Significant changes in prices for or availability of commodities, labor or other production inputs could negatively affect our costs of goods sold.

Our manufacturing operations are exposed to fluctuations in costs for labor, energy and raw materials, among other things. These inputs are also subject to supply chain fluctuations and other general economic and market conditions beyond our control. However, the primary key raw materials used in the manufacturing of cement or aggregates are controlled through a combination of owned and leased reserves. Since 2021, we have experienced elevated commodity and supply chain costs and other inputs used in the production and distribution of our products and services. Recent inflationary pressures have increased our costs above historical averages.

Availability of key natural resources used in the manufacturing of our products is one of the factors that significantly affect our operations and profitability. Therefore, continued active management of our quarries and production plants and the related permits, licenses, rights and titles is key to controlling manufacturing cost escalations in the long term. While the primary source of the key raw material of limestone is from owned reserves adjacent to the cement plants, there can be no assurance that we will be able to maintain or renew these land and mining rights or that we will have similar cost containment for other inputs used in the production process.

Our access to natural resources could be adversely affected by the closure of one or more of our quarries due to unforeseen circumstances related to changes in regulatory environment, disruptions to available transportation networks, or the cancellation of freight agreements or other key contract terminations. If any of our suppliers

 

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ceases to operate, or if we would need to incur additional costs to obtain such materials from other sources, such limitations on our ability to obtain the various inputs required, or to obtain those inputs without additional costs, could have a material adverse effect on our results of operations. Moreover, as we pursue less carbon-intensive inputs for cement, we may experience similar difficulties with alternative inputs such as SCMs.

Increased market demand for cement substitutes could have an adverse impact on our business.

We specialize in the production of cement, aggregates, ready-mix concrete and related products and derive substantially all of our revenue therefrom. Materials such as wood, steel, gypsum, plastic, aluminum and ceramics can be used in construction as a substitute for cement. Other existing construction techniques, such as the use of drywall, as well as any new construction techniques and modern materials, could decrease the demand for cement, ready-mix concrete and mortars. In addition, new construction techniques and modern materials that could replace the use of cement may be introduced in the future. To the extent such products are perceived as having superior environmental or other sustainability characteristics, this may cause customers to be more willing or quick to replace their use of cement. The use of substitutes for cement could cause a significant reduction in the demand and prices for our products and may have a material adverse effect on our business, results of operations and financial condition.

We operate in a highly competitive industry.

The markets for cement, aggregates and other construction materials and services are very competitive. Competition in these segments is based largely on price and on the quality of the material, service provided, logistics and innovative solutions offered. Similarly, our products are fairly commoditized and our ability to price them in a profitable manner is constrained by a competitive price environment, restricting our profitability levels. Competition, whether from established market participants or new entrants, could cause us to lose market shares, increase expenditures or reduce pricing, any one of which could have an adverse effect on our business, results of operations or financial condition.

We compete in each of the markets in which we operate with domestic and international cement producers, as well as importers. Each of these markets we serve are highly fragmented and we compete with a number of regional and national companies. These producers may have greater financial and other resources than we do. Some others are smaller and more specialized and concentrate their resources in particular areas of expertise. We could face increased competition, which would result in lower prices and decreased volumes, either from existing players or new entrants to the markets in which we operate. Further, our profitability is generally dependent on the level of demand for such building materials and services as a whole as well as on our ability to maximize efficiencies and control operating costs. Prices in these markets are subject to material changes in response to relatively minor fluctuations in supply and demand, general economic conditions and other market conditions beyond our control.

In order to maintain or further reinforce our competitive position, we rely on periodic investments in the areas of production and innovation, and on regular maintenance of our production facilities. In the future, we may not have adequate resources to continue to make such investments, and, as a result, may not be able to continue to successfully compete in the markets in which we operate. In addition, competitors could react more quickly to the changing needs of customers, differentiate themselves more effectively, or improve the functionality or performance of their products more quickly than us or in a more cost-effective manner. Therefore, we may face significant price, margin or volume declines in the future, which could have an adverse effect on our business, results of operations or financial condition in particular in markets where cement overcapacity or oversupply is prevalent.

A material disruption at one or more of our facilities or in our supply chain could have a material adverse effect on us.

We own and operate manufacturing facilities of various ages and levels of automated control and rely on a number of third parties and affiliates as part of our supply chain, including for the efficient distribution of products to our customers. Any disruption at one of our manufacturing facilities or within our supply chain could

 

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prevent us from meeting demand or require us to incur unplanned capital expenditures. Older facilities are generally less energy efficient and are at an increased risk of breakdown or equipment failure, resulting in unplanned downtime. Newly commissioned facilities are also subject to unforeseen breakdowns or failures related to mistakes in engineering and equipment selection, poor workmanship during fabrication and/or installation, accidents during the construction and/or commissioning phases, mistakes during initial operation and other related issues that can cause significant delays in the project implementation and facility start up. Any unplanned downtime at our facilities may cause delays in meeting customer timelines, result in liquidated damages claims or cause us to lose or harm customer relationships. Additionally, we require specialized equipment to manufacture certain of our products, and if any of our manufacturing equipment fails, the time required to repair or replace this equipment could be lengthy, which could result in extended downtime at the affected facility. Any unplanned repair or replacement work can also be very expensive. Moreover, manufacturing facilities can unexpectedly stop operating because of events unrelated to us or beyond our control, including fires and other industrial accidents, floods and other severe weather events, natural disasters, environmental incidents or other catastrophes, utility and transportation infrastructure disruptions, shortages of raw materials, and acts of war or terrorism. Work stoppages, whether union-organized or not, can also disrupt operations at manufacturing facilities. Furthermore, while we are generally responsible for delivering products to the customer, in some instances, we do not maintain our own fleet of delivery vehicles and outsource this function to third parties. Any shortages in trucking or rail capacity, any increase in the cost thereof or any other disruption to the highway systems could limit our ability to deliver our products in a timely manner or at all. Any material disruption at one or more of our facilities or those of our customers or suppliers or otherwise within our supply chain, whether as a result of downtime, facility damage, an inability to deliver our products or otherwise, could prevent us from meeting demand, require us to incur unplanned capital expenditures or cause other material disruption to our operations, any of which could have a material adverse effect on our business, financial condition and results of operations. While we maintain insurance policies covering, among other things, physical damage, business interruptions and product liability, these policies may not cover all our losses. In addition, there is no assurance that insurance will continue to be available on terms acceptable to us.

Delays in construction projects and any failure to manage our inventory could have a material adverse effect on us.

Many of our products are used in large-scale construction projects which generally require a significant amount of planning and preparation before construction commences. However, construction projects can be delayed and rescheduled for several reasons, including unanticipated soil conditions, adverse weather or flooding, changes in project priorities, financing issues, difficulties in complying with environmental and other government regulations or obtaining permits and additional time required to acquire rights-of-way or property rights. These delays or rescheduling may occur with too little notice to allow us to replace those projects in our manufacturing schedules or to adjust production capacity accordingly, creating unplanned downtime, increasing costs and inefficiencies in our operations and increased levels of obsolete inventory. Any delays in construction projects and our customers’ orders or any inability to manage our supply could have a material adverse effect on our business, financial condition and results of operations.

Our investments may not result in expanded capacity at our facilities at the expected levels or timeline, or at all, which could result in a variety of inefficiencies in our business and hinder our ability to generate revenue and profits. If our investments do not result in expanded capacity at our facilities at the levels or timeline that is expected, or at all, we could incur additional costs or experience delays.

We have recently expanded, and made significant investments to further expand, the capacity of our various facilities. However, it is difficult to predict whether our investments will result in expanded capacity at our facilities at the expected levels or within the expected timeline, or at all, and we may have limited insight into trends that may emerge and affect our business. If our investments do not result in expanded capacity at the levels or timeline that is expected, or at all, we could incur additional costs or experience delays. Inaccurate predictions regarding these levels or timelines may prevent us from increasing our production levels, thereby hindering our ability to meet higher demands. Failure to increase capacity and meet higher demands may harm our business, prospects, financial condition, results of operations, and cash flows.

 

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The estimates of a multi-year growth phase in our industry included in this prospectus may prove to be inaccurate, and even if the markets in which we operate achieve the forecasted growth, our business could fail to grow at similar rates, or at all, and we could have over-capacity of our products.

The estimates of a multi-year growth phase in our industry included in this prospectus may prove to be inaccurate. Market opportunity estimates and growth forecasts are subject to significant uncertainty and are based on assumptions and estimates that may not prove to be accurate, including as a result of any of the risks described in this prospectus.

The variables that go into the calculation of multi-year growth are subject to change over time, and there is no guarantee that any particular number or percentage of addressable customers covered by the multi-year growth estimates will purchase our products at all or generate any particular level of revenues for us. Even if the markets in which we compete meet the size estimates and growth forecasted in this prospectus, our business could fail to grow at similar rates, or at all, and we could have over-capacity of our products, especially in light of the investments we have made to further expand the capacity at our various facilities. Our growth is subject to many factors, including our success in implementing our business strategy, which is subject to many risks and uncertainties. Accordingly, the forecasts of multi-year growth of our industry included in this prospectus should not be taken as indicative of our future growth.

Any delay or problem with operating or upgrading our existing information technology infrastructure could cause a disruption in our business and adversely impact our financial results.

Our ability to operate our business on a day-to-day basis largely depends on the efficient operation of our information technology infrastructure and our cloud providers, the largest of which is Microsoft Azure. We may be susceptible to hacks into our systems or other security breaches by unauthorized third parties. We are also susceptible to errors in connection with any systems upgrade or migration to a different hardware or software system, errors or incidents of our cloud providers, bugs or other problems for any of the software we use, either developed in-house or provided by third parties. Security breaches, financial, regulatory or other developments that might prevent these third parties from providing services to us or our users could harm our business. Our systems and our information technology infrastructure are vulnerable to damage or interruption from natural or man-made disasters, power loss, computer viruses, telecommunication and other operational failures, ransomware attacks or any other kind of denial of service related attacks, physical or electronic break-ins, sabotage, intentional acts of vandalism, terrorism, public health crises (including pandemics), extreme weather (including as a result of climate change) and similar events. The public cloud providers could also decide to close their facilities. Any steps that we may take to upgrade and improve the stability and efficiency of our information technology may not be sufficient to avoid defects or disruptions in our technology infrastructure, which could cause a disruption in our business and adversely impact our financial results. Our systems are not fully redundant, and our disaster recovery planning may not be sufficient. Any errors, defects, disruptions, interruptions, delays or cessation of service could result in significant disruptions to our business that could ultimately be more expensive, time consuming and resource intensive than anticipated. We may experience defects or disruptions in our technology infrastructure, including system interruptions and delays that make our site and services unavailable or slow to respond for periods of time, which could adversely impact our ability to fulfill orders, which could reduce our revenue, adversely affect our reputation with or result in the loss of users and negatively impact our financial results. Although we are insured against cyber risks and security breaches up to an annual aggregate limit, our liability insurance may be inadequate and may not fully cover the costs of any claims or damages that we might be required to pay. In the future, we may not be able to obtain adequate liability insurance on commercially desirable or reasonable terms or at all.

In September 2021, we implemented a new version of Titan Cement International’s enterprise resource planning software, SAP, as part of a plan to integrate and upgrade our systems and processes. As we are dependent on the SAP of Titan Cement International, we lack control over system updates, maintenance schedules and overall system management, which could lead to delays or disruptions that impact our operations. The SAP of Titan

 

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Cement International might also not fully meet our unique needs, which might make our systems potentially less effective or inefficient. Any of these consequences could have a material adverse effect on our business, results of operations and financial condition.

Our aggregate resource and reserve calculations are estimates and subject to uncertainty.

We estimate aggregate reserves and resources based on available data. The estimates depend upon the interpretation of surface and subsurface investigations, major assumptions and other supporting data, which can be unpredictable. The quantity must be considered only an estimate until reserves are actually extracted and processed. This uncertainty in aggregate resource and reserve calculation may adversely impact our results of operations.

We may not be able to secure, permit or economically mine strategically located aggregate reserves.

As discussed above, aggregates are bulky and heavy and therefore difficult to transport efficiently. Because of the nature of the products, the freight costs can quickly surpass production costs. Therefore, except for geographic regions that do not possess commercially viable deposits of aggregates and are served by rail, barge or ship, the markets for our products tend to be very localized around our quarry sites and are served by truck. New quarry sites often take several years to develop. Our strategic planning and new site development must stay ahead of actual growth. Additionally, we may not be able to locate new ready-mix concrete sites and secure the necessary governmental, operating and environmental permits to operate such new sites. In a number of urban and suburban areas in which we operate, it is increasingly difficult to permit new sites or expand existing sites due to community resistance. Therefore, our future success is dependent, in part, on our ability to accurately forecast future areas of high growth in order to locate optimal facility sites and on our ability to either acquire existing quarries or secure governmental, operating, mining and environmental permits to open new quarries and/or ready-mix concrete sites. If we are unable to accurately forecast areas of future growth, acquire existing quarries or secure the necessary permits to open new quarries and/or ready-mix concrete sites, our financial condition, results of operations and liquidity may be materially adversely affected.

We may not be successful in implementing our growth strategy, which could have a material adverse effect on us.

Our long-term strategy includes both organic growth such as investment in lower carbon products, strengthening of market positions through our vertically integrated business model and digitalization of our operations and growth via acquisitions. We use these strategies to strengthen and develop our existing activities, particularly in growth areas, and as a means of reducing market-specific risk via geographic diversification. The successful implementation of such a growth strategy depends on a range of factors both within and outside of our control.

Any failures to execute our growth strategy or successfully integrate acquired assets and businesses could have a material adverse effect on our business, prospects, financial condition and results of operations.

A large proportion of our business, operations and assets are concentrated in parts of the Eastern Seaboard of the United States.

A large proportion of our business, operations and assets is concentrated in Virginia, Florida, North Carolina, South Carolina and the New York Metro Area (as defined below). Currently, approximately 60% of our operations are concentrated in Florida. Despite positive trends and forecasts for the construction segment’s growth in Florida, there can be no assurance that it will not experience a downturn that will significantly affect our results of operations. For example, the state could experience a decrease in gross domestic product growth, an increase of unemployment or a decrease in consumer confidence, increased property taxes, successive periods of adverse weather conditions, sea level rise or other impacts to infrastructure we rely on, any of which could have a negative effect on our results of operations in Florida. Should positive market trends continue, foreign or national competitors could enter the Florida market to benefit from the increased prices, which could result in a

 

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lower market share, which currently ranks second in the Florida market. There can be no certainty that the positive trends in the U.S. market will continue in the medium- to long-term, in particular given that the U.S. market has been steadily growing since 2011, increasing the risk of a market downturn. Should the U.S. market experience a downturn, demand for our products would decrease and imports from Titan Cement International and their affiliates’ operations in Greece to the United States would be substantially reduced. In addition, our kilns could be required to operate at lower utilization rates and the rest of our assets could remain idle because of lower demand.

Failure to achieve and maintain a high level of product quality as a result of our suppliers’ or manufacturers’ mistakes or inefficiencies could damage our reputation and negatively impact our revenue and results of operations.

To continue to be successful, we must continue to preserve, grow and capitalize on the value of our brand in the marketplace. Reputational value is based in large part on perceptions of subjective qualities. Even an isolated incident, such as an out of specification product delivered to a construction site, or the aggregate effect of individually insignificant incidents, can erode trust and confidence. In particular, product quality issues as a result of our suppliers’ (including our affiliates’) acts or omissions could negatively impact customer confidence in our brands and our products. As we do not have direct control over the quality of the products manufactured or supplied by such third-party and affiliated suppliers, we are exposed to risks relating to the quality of the products we distribute. If our product offerings do not meet applicable safety standards or customers’ expectations regarding safety or quality, or are alleged to have quality issues or to have caused personal injury or other damage, we could experience lower revenue and increased costs and be exposed to legal, financial and reputational risks, as well as governmental enforcement actions. For example, product quality concerns could result in costly rip and tear expenses for removing previously laid concrete. The termination of key supplier relationships may have a material adverse effect on our business, financial condition and results of operations.

While we regularly test samples of our products before shipment, there can be no assurance that such testing will be adequate to identify all deficient products.

Our financial condition and operations could be adversely impacted by climate change and regulations intended to address climate change.

Severe weather events, such as tornadoes, hurricanes, rain, drought, ice and snowstorms and high- and low- temperature extremes, occur in regions in which we operate and maintain infrastructure. Climate change could change the frequency and severity of these weather events or result in chronic changes to water levels or meteorological patterns, any of which may create physical and financial risks to us. Such risks could have an adverse effect on our financial condition, results of operations and cash flows. Increases in severe weather conditions, extreme temperatures or chronic climatic changes (such as sea level rise or changes in meteorological or hydrological patterns) may also cause infrastructure construction projects to be delayed or cancelled and may limit resources available for such projects, resulting in decreased revenue or increased project costs. Climate change may impact a region’s economic health, which could impact our revenues as our financial performance is tied to the health of the regional economies we serve. For example, if ports or other infrastructure on which we rely become less usable due to climate impacts, it may affect demand for, or our ability to provide, our products.

The price of energy also has an impact on the economic health of communities and our production costs. The cost of additional regulatory requirements related to climate change, such as regulation of greenhouse gas (“GHG”) emissions under the federal Clean Air Act, requirements to replace fossil fuels with renewable energy or to obtain emissions credits or other environmental regulation or taxes could impact the availability of goods and the prices charged by suppliers, which would normally be borne by consumers through higher prices for energy and purchased goods. The costs of such regulations could increase the costs of our products and could adversely impact economic conditions of areas we serve. Such regulations could also increase our cost of doing business by requiring us to install additional pollution control technologies, acquire emissions offsets, or modify

 

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or curtail our operations. Various financial market participants also consider climate-related risks in their decision-making. To the extent financial markets believe we are not well positioned to manage any such risk, our ability to access capital markets or to receive competitive terms and conditions could be negatively affected.

Moreover, in many of the jurisdictions in which we operate, governmental bodies are increasingly proposing or enacting legislative and regulatory initiatives to address the potential impacts of climate change, such as cap-and-trade systems, limits on GHG emissions and requirements to disclose GHG emissions and other climate change-related information, which are expected to become more stringent in the future. These laws and regulations have the potential to impact our operations directly or indirectly and may result in additional compliance requirements by us. For example, we monitor, analyze and report on GHG emissions from our operations and products in response to laws and customer inquiries. In addition, our manufacturing processes have been and may be affected by new laws and regulations in response to climate change. Compliance with such laws and regulations could have a material adverse effect on our business, financial condition and results of operations.

The cement industry is under increasing regulatory pressure to reduce carbon emissions and achieving significant emissions reductions may involve high costs and technical challenges associated with carbon capture and storage. Due to the uncertain availability of technologies to control GHG emissions and the unknown obligations that potential GHG emission legislation or regulations may create, we cannot determine the potential financial impact on our operations.

In addition, the increasing focus on climate change and stricter regulatory requirements may result in our business facing adverse reputational risks associated with certain of our operations producing GHG emissions. Although we have not yet experienced material difficulties in these areas, if we are unable to satisfy the increasing climate-related expectations of certain stakeholders, we may suffer reputational harm, which may cause the market price of our common shares to decrease, difficulty in accessing the capital or insurance markets or interference with our business operations and ability to make capital expenditures. For further information, please see our risk factor titled “Increasing scrutiny and activism from stakeholders and regulators with respect to ESG matters, including those most relevant to the cement industry, could impact our reputation and the cost of our operations which could adversely affect our business and results of operations.”

Any of the above risks may also impact our customers or suppliers, which could augment existing or result in different risks, including risks that may not yet be known to us.

Our operations are subject to special hazards that have caused in the past and may cause in the future personal injury or property damage, subjecting us to liabilities and possible losses, some of which may not be covered by insurance.

Hauling and ready-mix trucks, particularly when loaded, expose our drivers and others to traffic hazards. Our drivers are subject to the usual hazards associated with providing services on construction sites, while our plant personnel are subject to the hazards associated with moving and storing large quantities of heavy raw materials. Operating hazards can cause personal injury and loss of life, damage to or destruction of property, plant and equipment and environmental damage, and such hazards have in the past, and could result in the future, with us being named in the litigation in the future. Liabilities for such events are difficult to assess and estimate due to unknown factors, including the severity of an injury, the determination of our liability in proportion to other parties, the number of incidents not reported and the effectiveness of our safety program. Provisions for losses are recognized when we have a legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate of the amount can be made. If we were to experience claims or costs above our estimates, we might also be required to use working capital to satisfy these claims rather than using the working capital to maintain or expand our operations.

We maintain insurance coverage in amounts and against the risks we believe are consistent with industry practice, but this insurance may not be adequate to cover all losses or liabilities we may incur in our operations.

 

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Our insurance policies are subject to varying levels of deductibles. Where we expect to be reimbursed under an insurance contract, the reimbursement is recognized as a separate asset but only when reimbursement is virtually certain.

We are subject to certain operational risks, including risks regarding safety at work.

Cement production and the operation of quarries can be a hazardous industry, and factors outside our control, such as weather and temperature, can increase the risks related to cement production and operation of quarries. Although we have strict safety policies and training programs intended to systematically educate employees on safety as well as detailed procedures and systems, these programs may fail to prevent all such accidents and, as a result, we have been and could be in the future subject to administrative or legal proceedings arising as a result of breaches of health and safety by our employees, any of which may have an adverse effect on our operations and reputation. The cement production process also generates environmental impacts, including dust, noise or other pollutants, and may require the storage of waste materials. Contamination resulting from waste materials or significant dust, noise or other pollution from site operations could also have the potential of affecting our employees, communities and the environment near our operations, and also negatively affect our business, results of operations and financial condition.

Our customer relationships are not generally governed by long-term agreements, and, as a result, such customers have the right to change the terms under which they do business and/or terminate their relationship with us.

The bulk of our customer relationships are not generally governed by long-term agreements. Consequently, despite the length of our relationships with these customers and our low historical customer turnover rates, there can be no assurance that our customer base will remain stable in the future. If our customers do not renew orders, our business, financial position, results of operations and cash flows could be negatively affected.

Relationships with our customers are based on and involve a high degree of trust that the customer(s) will continue to transact with us for a long period of time. However, under certain of these agreements, we would have no recourse against certain customers if they determined to terminate the agreement or they utilized other service providers that may compete with us. These customers could additionally underperform, not perform at all under these agreements and even walk away entirely. Our lack of recourse and ability to prevent customers from walking away from our agreements could have a material effect on our financial performance.

Our business is based in part on government-funded infrastructure projects and building activities, and any reductions or reallocation of spending or related subsidies in these areas could have an adverse effect on us.

We often serve as a subcontractor and depend on government spending for infrastructure and other similar building activities. As a result, demand for some of our products is influenced by local, state and federal government fiscal policies, tax incentives and other subsidies and other general macroeconomic and political factors. Projects in which we participate may be funded directly by governments or privately funded but are otherwise tied to or impacted by government policies and spending measures.

Government spending is often approved only on a short-term basis and some of the projects in which our products are used require longer-term funding commitments. If government funding is not approved or funding is lowered as a result of poor economic conditions, lower than expected revenues, competing spending priorities or other factors, it could limit infrastructure projects available, increase competition for projects, result in excess inventory and decrease sales, all of which could adversely affect our profitability.

Additionally, certain regions or states may require or possess the means to finance only a limited number of large infrastructure projects and periods of high demand may be followed by years of little to no activity. There can be no assurances that governments will sustain or increase current infrastructure spending and tax incentive and other subsidy levels, and any reductions thereto or delays therein could affect our business, liquidity and financial condition and results of operations.

 

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If we are unable to accurately estimate the overall risks, requirements or costs when we bid on or negotiate contracts that are ultimately awarded to us, we may achieve lower than anticipated profits or incur contract losses.

Even though the majority of our contracts for public projects as a subcontractor contain raw material escalators to protect us from certain input material price increases, a portion of the contracts are often on a fixed cost basis. The costs incurred and profit realized, if any, on our contracts can vary, sometimes substantially, from our original projections due to a variety of factors, including, but not limited to: failure to include materials or work in a bid, or the failure to estimate properly the quantities or costs needed to complete a lump sum contract; delays caused by weather conditions or otherwise failing to meet scheduled acceptance dates; contract or project modifications or conditions creating unanticipated costs that are not covered by change orders; changes in availability, proximity and costs of materials, including cement, aggregates and other construction materials (such as stone, gravel, sand and oil for asphalt paving), as well as fuel and lubricants for our equipment; to the extent not covered by contractual cost escalators, variability and inability to predict the costs of purchasing coal, diesel, natural gas and cement; availability and skill level of workers; fraud, theft or other improper activities by our suppliers, subcontractors, designers, engineers, customers or our own personnel; failure by our suppliers, subcontractors, designers, engineers or customers to perform their obligations; mechanical problems with our machinery or equipment; citations issued by any governmental authority, including the Occupational Safety and Health Administration (“OSHA”) and Mine Safety and Health Administration (“MSHA”); difficulties in obtaining required governmental permits or approvals; changes in applicable laws and regulations; uninsured claims or demands from third parties for alleged damages arising from the design, construction or use and operation of a project of which our work is part; and public infrastructure customers may seek to impose contractual risk-shifting provisions more aggressively which may result in us facing increased risks.

These factors, as well as others, may cause us to incur losses, which could have a material adverse effect on our financial condition, results of operations and liquidity.

Our industry is capital intensive, and we have significant fixed and semi-fixed costs. Therefore, our profitability is sensitive to changes in volume.

The property and machinery needed to produce our products can be very expensive. Therefore, we need to spend a substantial amount of capital to purchase and maintain the equipment necessary to operate our business. Although we believe that our current cash balance, along with our projected internal cash flows and our available financing resources, will provide sufficient cash to support our currently anticipated operating and capital needs, if we are unable to generate sufficient cash to purchase and maintain the property and machinery necessary to operate our business, we may be required to reduce or delay planned capital expenditures or incur additional debt. In addition, given the level of fixed and semi-fixed costs within our business, particularly at our cement production facility, decreases in volumes could negatively affect our financial position, results of operations and liquidity.

An inability to successfully identify, consummate and integrate acquisitions, divestitures and other significant transactions could have an adverse impact on our business and financial results.

A portion of our historical growth has occurred through acquisitions, and we will likely execute acquisition transactions in the future. Acquisitions involve risks including, among other things, that the businesses acquired will not perform as expected. We are presently evaluating, and we expect to continue to evaluate on an ongoing basis, possible acquisition transactions. We are presently engaged, and at any time in the future we may be engaged, in discussions or negotiations with respect to possible acquisitions, including larger transactions that would be significant to us. We regularly make, and we expect to continue to make, non-binding acquisition proposals, and we may enter into letters of intent, in each case allowing us to conduct due diligence on a confidential basis. There can be no assurances that we will be able to recover the current carrying amount of our investments, and in some circumstances, assets or businesses may result in additional impairment expenses or other losses. In addition, we may become subject to certain contractual indemnity or other obligations or may fail

 

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to successfully deploy sale proceeds. We cannot predict the timing of any contemplated transactions. To successfully acquire a significant target, we may need to raise additional capital through additional equity issuances, additional indebtedness or a combination of equity and debt issuances. Our results of operations from these acquisitions could, in the future, result in impairment charges for any of our intangible assets, including goodwill or other long-lived assets, particularly if economic conditions worsen unexpectedly. As a result of these changes, our financial condition, results of operations and liquidity could be materially adversely affected. There can be no assurance that we will enter into definitive agreements with respect to any contemplated transactions or that they will be completed. Our acquisitions and portfolio optimization efforts have placed, and may continue to place, significant demands on our management and operational and financial resources.

Acquisitions may require integration of the acquired companies’ sales and marketing, distribution, production, purchasing, information technology, finance and administrative organizations. We may not be able to integrate successfully any business we may acquire or have acquired into our existing business and any acquired businesses may not be profitable or as profitable as we had expected. Factors affecting the successful integration of acquired businesses include, but are not limited to, the following: we may become liable for certain, and potentially significant, liabilities of any acquired business, whether or not known to us; substantial attention from our executive management and the management of the acquired business may be required, which could decrease the time that they have to service and attract customers; capital equipment at acquired businesses may require additional maintenance or need to be replaced sooner than we expected; the complete integration of acquired companies depends, to a certain extent, on the full implementation of our financial systems and policies; and the ability to retain key employees. Our inability to complete the integration of new businesses in a timely and orderly manner could increase costs and lower profits.

A lowering or withdrawal of the ratings, outlook or watch assigned to our business or our debt by rating agencies or the credit rating of Titan Cement International may increase our future borrowing costs and reduce our access to capital.

Titan Cement International both provides intercompany loans to us and guarantees our third-party debt. Any change in the credit rating of Titan Cement International, which is out of our control, could have a material adverse effect on our ability to borrow and our cost of capital.

The rating, outlook or watch assigned to Titan Cement International or to our debt could be lowered or withdrawn entirely by a rating agency if, in that rating agency’s judgment, current or future circumstances relating to the basis of the rating, outlook or watch such as adverse changes to Titan Cement International’s or our business, so warrant. Additionally, we do not have credit history without the guarantee of Titan Cement International. Without an operating history, we may be unable to or find it difficult to obtain our own credit score. Our credit ratings may also change as a result of the differing methodologies or changes in the methodologies used by the rating agencies. Any future lowering of our debt’s ratings, outlook or watch likely would make it more difficult or more expensive for us to obtain debt financing.

Holders of our common shares will have no recourse against us or any other parties in the event of a change in or suspension or withdrawal of such ratings. Any lowering, suspension or withdrawal of such ratings may have a material adverse effect on the market price or marketability of our common shares.

Our ability to repay or refinance our indebtedness on time and distribute dividends and share capital to our shareholders depends upon our future cash flows from operations, as well as prevailing market conditions.

Our indebtedness primarily consists of intercompany loans, short-term bank borrowings and lease liabilities.

Our ability to make payments on and refinance our indebtedness and to fund working capital, capital expenditures and other expenses will depend on our future operating performance and ability to generate cash from operations. Our ability to generate cash from operations is subject, in large part, to general economic,

 

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competitive, legislative and regulatory factors and other factors that are beyond our control. We may not be able to generate sufficient cash flow from operations or obtain enough capital to service our debt or fund our planned capital expenditures.

Similarly, we are a holding company and our ability to repay our debt, pay dividends or make other contributions to our shareholders depends on our subsidiaries’ ability to pay cash to us pursuant to dividend payments and/or other obligations. The ability of our subsidiaries to pay dividends to us in the future will depend on their earnings, covenants contained in future financing or other agreements and on regulatory restrictions. Similarly, we may be unable to distribute dividends in order to maintain our credit rating and avoid any potential credit downgrade. Thus, we may not have sufficient funds to pay our debt or distribute dividends.

Our ability to refinance our debt will depend in part on our financial position at such time. Any refinancing of our debt could be at higher interest rates than our current debt and may require us to comply with more onerous covenants, which could further restrict our business operations. In particular, certain intercompany loans and credit facilities with TGF, are based on financial terms contained in the arm’s length agreements consummated among TGF and its third party lenders. There is no guarantee that TGF will be willing to continue to enter into debt agreements with us on similar terms or at all. Refinancing such debt with third parties may increase our cost of capital and may subject us to more onerous covenants. The terms of existing or future debt instruments may restrict us from adopting some of these alternatives.

The economic environment has in the past been marked by a scarcity of financing for periods of time, in particular with regard to long-term financing. If financial and economic conditions were to deteriorate, including as a result of political and economic uncertainty or instability, or if interest rates were to increase, it may be more costly and more difficult for us to access new credit or to refinance our debts on terms that are acceptable to us, or at all. This could have a material adverse effect on our business, results of operations and financial condition.

We are exposed to risk of loss resulting from the nonpayment and/or nonperformance by our customers and counterparties.

Our customers include public and private entities that have been, and may continue to be, negatively impacted by the changing landscape in the global economy. A recessionary construction economy can increase the likelihood that we will not be able to collect on all accounts receivable or may experience a delay in payment from some customers. If our customers or counterparties experience financial difficulties, which has occurred and may reoccur, we could experience difficulty in collecting receivables. We face collection risk as a normal part of business where we perform services and subsequently bill clients for such services. In the event that we have concentrated credit risk from clients in a specific geographic area or industry, continuing negative trends or a worsening in financial conditions in that specific geographic area or industry could make us susceptible to disproportionately high levels of default. Nonpayment and/or non-performance by our customers and counterparties could have a negative impact on our results of operations and cash flows.

Fluctuations in foreign exchange rates may have an adverse effect on our business.

We have foreign exchange rate risk as a result of euro-denominated fixed-rate loans and short-term euro-denominated variable rate loans. We enter into foreign exchange derivatives with notional amounts closely aligned with the underlying borrowings, but cannot be assured that our hedging will adequately protect us against foreign exchange fluctuation risk. If the U.S. dollar weakens as compared to the euro, our cost of capital will increase, and our business may be adversely affected.

We are subject to impairment losses related to non-financial assets.

The cement, aggregates and, to a lesser extent, other construction materials business is capital intensive. Due to the heavy weight of the product and our high distribution costs, shifts in local markets and/or product ranges might lead to impairment of the assets concerned as the investment in those assets may not yield the return that was expected when the investment was made. Impairment losses impact negatively on profitability and equity.

 

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We may fail to retain and attract qualified and skilled employees, including management, engineering and technical personnel, or fail to maintain satisfactory labor relations with our unions.

While we aim to attract and retain the best possible candidates from domestic and international markets, we may be unable to recruit and retain experienced, capable and reliable personnel, especially senior and middle management and skilled technical personnel with appropriate professional qualifications. If members of our executive management team were to depart, we might not be able to implement a successful succession program in a timely manner, if at all. Additionally, without a sufficient number of skilled employees, our operations and manufacturing quality could suffer. The resulting labor shortages, as well as competition from other industries, or other factors, could increase our labor costs and could negatively affect our results of operations.

From time to time, we enter into discussions and collective bargaining agreements with labor unions, which represent less than five percent of our workforce as of September 30, 2024. Although we maintain good relations with our unions and have not faced a material strike that affected our operations, there can be no assurance that we will not experience labor unrest, difficulty in negotiating collective bargaining agreements or disputes or actions in the future, some of which may be significant and could adversely affect our business, prospects, financial condition, reputation and results of operations.

Artificial intelligence presents risks and challenges that can impact our business by posing security risks to our confidential information, proprietary information and personal data.

Issues in the development and use of artificial intelligence, combined with an uncertain regulatory environment, may result in reputational harm, liability or other adverse consequences to our business operations. As with many technological innovations, artificial intelligence presents risks and challenges that could impact our business. We work with vendors that incorporate artificial intelligence tools into their offerings and the providers of these artificial intelligence tools may not meet existing or rapidly evolving regulatory or industry standards with respect to privacy and data protection and may inhibit our or our vendors’ ability to maintain an adequate level of service and experience. If we, our vendors, or our third-party partners experience an actual or perceived breach or privacy or security incident because of the use of generative artificial intelligence, we may lose valuable intellectual property and confidential information and our reputation and the public perception of the effectiveness of our security measures could be harmed. Further, bad actors around the world use increasingly sophisticated methods, including the use of artificial intelligence, to engage in illegal activities involving the theft and misuse of personal information, confidential information and intellectual property. Any of these outcomes could damage our reputation, result in the loss of valuable property and information and adversely impact our business.

Risks Related to the Reorganization Transactions and Our Relationship with Titan Cement International

We plan to rely on functions, systems and infrastructure provided by Titan Group, and if Titan Group fails to perform these transitional services we may fail to replicate or replace them.

Since our inception, we have received services from Titan Group and will continue to receive services under the Shared Services Agreement from Titan Group. Under the Shared Services Agreement, Titan Group has agreed to continue to provide us with certain services currently provided to us by or through Titan Group. The Shared Services Agreement does not continue indefinitely and will last for five years with an option to renew for additional two-year periods, and services provided under the Shared Services Agreement may generally terminate at various times specified in the agreement and the schedules thereto.

If Titan Group ceases to provide these services to us, either as a result of the termination of the Shared Services Agreement or individual services thereunder or a failure by Titan Group to perform its obligations under the Shared Services Agreement, our costs of performing or procuring these services or comparable replacement services could increase as a result of replicating the services ourselves or contracting with a third-party for the services at a higher cost.

 

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There is a risk that an increase in the costs associated with replicating and replacing the services provided to us by Titan Group prior to the Reorganization Transactions and under the Shared Services Agreement, or continuing to provide services to Titan Group, and the diversion of management’s attention to these matters could have a material adverse effect on our business, results of operations, financial condition and liquidity. We may fail to replicate the services we currently receive from Titan Group on a timely basis, without interruption to or degradation of ongoing operations, or at all, which may put further constraints on our human resources, capital and other resources that are simultaneously working on the retention and replacement of the services and ongoing efforts to implement new technological developments and innovations; such additional constraints could jeopardize our ability to execute on any one of these specific work streams. In addition, Titan Group will be working on similar initiatives which may impact the level and quality of transition services we receive from them. Additionally, we may not be able to operate effectively if the transition to the replacement services causes interruptions to or degradation of operations or the quality of replacement services is inferior to the services we are currently receiving.

Titan Cement International and its subsidiaries are among our largest material and service providers, and we might have received better terms from unaffiliated third parties than under our agreements with Titan Cement International and its subsidiaries.

For the year ended December 31, 2023, our Parent was among our largest material and service providers supplying cement for our marine import terminals valued at $107.1 million and management services valued at $11.0 million. We expect that a substantial portion of our purchases will continue to be derived from Titan Cement International, and their inability to perform under their contracts, or their default in delivery or performance, could have a substantial effect on our operations, revenues and profits. There is no guarantee that we can replace these materials and services on commercially reasonable terms or at all. For additional information, refer to the section titled “Certain Relationships and Related Party Transactions.”

We may be affected by any negative effects on Titan Cement International’s brand and reputation.

Our brand and reputation and that of our Parent’s within the construction sector in all areas and markets of operation are important intangible assets and could be affected by errors and/or omissions concerning product quality, adherence to health and safety standards, exposure to social media and other brand management measures and environmental performance. Such risks are amplified due to the strict standardization to which building materials are subject to and a failure to meet the prescribed quality standards or the specific quality requirements of our or Titan Cement International’s, and our or its affiliates’, customers could negatively affect our or our Parent’s reputations. Should Titan Cement International have a negative impact on its brand and reputation, it could hurt our brand or reputation in the marketplace if market participants connect us with our Parent. Moreover, given the international presence of our Parent, damage to our Parent or an affiliate of our Parent’s brand in one of the markets in which we operate could negatively affect our reputation in the markets in which they operate. Any damage to our or our Parent’s reputations may have a material adverse effect on our financial condition and results of operations.

If Titan Cement International sells a controlling interest in our Company to a third party in a private transaction, you may not realize any change-of-control premium on our common shares, and we may become subject to the control of a presently unknown third party.

Following the completion of this offering, Titan Cement International will continue to own a controlling equity interest in our Company. Titan Cement International will have the ability, should it choose to do so, to sell some or all of our common shares in a privately negotiated transaction, which, if sufficient in size, could result in a change of control of our Company.

Belgian law provisions on mandatory public takeover bids that are applicable to Belgian companies listed on a regulated market in the European Economic Area do not apply to us.

 

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The ability of Titan Cement International to privately sell our common shares, with no requirement for a concurrent offer to be made to acquire all of the common shares that will be publicly traded hereafter, could prevent you from realizing any change-of-control premium on your common shares that may otherwise accrue to Titan Cement International on its private sale. Additionally, if Titan Cement International privately sells its controlling interest in our Company, we may become subject to the control of a presently unknown third party. Such third party may have conflicts of interest with those of other shareholders. Titan Cement International may terminate the Shared Services Agreement, and our other commercial agreements and relationships could be impacted, all of which may adversely affect our ability to run our business as described herein and may have an adverse effect on our operating results and financial condition.

After the Reorganization Transactions, certain members of management, directors and shareholders hold common shares in both Titan America and Titan Cement International, and as a result may face actual or potential conflicts of interest.

After the Reorganization Transactions, the management and directors of each of Titan America and Titan Cement International may own both Titan America common shares and Titan Cement International common shares. This ownership overlap could create, or appear to create, potential conflicts of interest when Titan America’s management and directors and Titan Cement International’s management and directors face decisions that could have different implications for Titan America and Titan Cement International. For example, potential conflicts of interest could arise in connection with the resolution of any dispute between Titan America and Titan Cement International regarding the terms of the agreements governing the Reorganization Transactions and the relationship with Titan Cement International thereafter. These agreements include the Shared Services Agreement and any commercial agreements between the parties or their affiliates. Potential conflicts of interest may also arise out of any commercial arrangements that Titan America or Titan Cement International may enter into in the future. Although we have procedures to minimize potential conflicts of interest, these procedures may not adequately address all of the conflicts of interest that may arise with respect to our activities with Titan Cement International, and any conflicts of interest may not be resolved in Titan America’s interests. See “—Conflicts of interest and disputes may arise between Titan Cement International and us that could be resolved in a manner unfavorable to us.”

Under Belgian company law, the directors of Titan America are subject to a general duty of loyalty, pursuant to which they are always required to act in Titan America’s interests, regardless of whether or not they have been appointed by a shareholder of Titan America (such as Titan Cement International). Directors are always required to put the interests of the company in which they serve above their own interests in the exercise of their mandate.

The directors of Titan America will be subject to the rules under Belgian company law on financial conflicts of interest (article 7:96 of the Belgian Code on Companies and Associations) when such director would have a personal financial conflict of interest with Titan America, be it directly or indirectly, with regard to any contemplated decision under the powers of the board of directors. Under these rules, it is required that (i) the conflicted director discloses his or her conflict prior to the board of directors resolving on the conflicted decision, (ii) the declaration and clarification as to the nature of the conflicting interest declared by the conflicted director(s) is included in the meeting’s minutes, (iii) the board (consisting of the non-conflicted directors) sets out the contemplated decision or transaction, its financial consequences and justifies the contemplated decision or transaction. In resolving on the conflicted decisions, directors with a financial conflict are prohibited from taking part in both the deliberation as well as the decision-making on the conflicted decision.

In cases where all directors of Titan America would be conflicted with regard to a certain resolution, said resolution will be escalated to the shareholders’ meeting of Titan America for shareholder approval (under a simple majority vote). If the shareholders’ meeting approves the resolution, the board of directors will be able to carry out the approved resolution on behalf of Titan America.

Titan America’s annual report, as well as the yearly report prepared by Titan America’s statutory auditor, will contain certain information about the application of the conflicts of interest procedure during the financial year.

 

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General Belgian company law does not contain any provisions that seek to prevent directors from voting or deliberating on matters in which they would have a functional conflict of interest (which could, for example, arise due to cross-directorships). Given that Titan America does not qualify as a listed company for the purposes of Belgian company law, the procedure under Belgian law that relates to ‘transactions with related parties,’ as set out in article 7:97 of the Belgian Code on Companies and Associations, will not apply to Titan America as regards any transaction with a “related party” (under International Account Standards (“IAS”) 24).

Belgian law offers no express protection against conflicts of interest at the level of Titan America’s management.

Risks Related to Geological, Mining and Environmental Matters

Our operations are subject to environmental, health and safety laws and regulations that may increase costs, impact or limit business plans or expose us to environmental liabilities.

Our operations are subject to extensive environmental, health and safety (“EHS”) laws and regulations, as interpreted by the relevant governmental agencies and the courts, in the jurisdictions in which we operate. Such regulations affect many aspects of our operations and may impose increasingly stringent obligations and restrictions regarding, among other things, land use, permitting, remediation, mine reclamation, operation and closure of landfills, air emissions, the generation, transportation and disposal of solid waste and hazardous substances, contamination, water quality, wastewater discharge and other environmental considerations, as well as mine safety and occupational and community health and safety. The costs of complying with these laws and regulations are likely to increase over time and a failure to comply with these laws and regulations may result in the assessment of sanctions, including administrative, civil or criminal penalties, natural resource damages, the imposition of investigatory or remedial obligations, and the issuance of orders limiting or prohibiting some or all of our operations. For a description of specific environmental and health and safety laws and regulations applicable to operations, see “—Our business may face certain risks related to geological and mining, water management, solid waste, air quality, permitting and regulatory schemes, which could adversely impact our operations and financial position” and “—We are subject to health and safety laws and regulations and any failure to comply with any current or future laws or regulations could have a material adverse effect on us.”

The nature of certain of our business activities exposes us to risks of environmental costs and liabilities arising from the importing, manufacture, use, storage, disposal, maritime and inland transport and sale of products, raw materials, wastes, byproducts and fuels that may be regulated or considered to be contaminants when released into the environment from our properties and stormwater. Environmental laws and regulations may impose investigation and remediation obligations, require us to install pollution control equipment at our facilities, clean up spills and other contamination and correct environmental hazards, including payment of all or part of the cost to remediate sites where our past activities, or the activities of other parties, caused environmental contamination. Liability or other investigation and remediation obligations may also arise through certain transactions, including the acquisition, divestiture or ownership or operation of properties and businesses, especially properties or operations where hazardous materials were used historically. We have sold properties and businesses pursuant to agreements which include indemnification and cost sharing provisions related to the assets that were divested. Consequently, we will continue to be subject to risks under environmental laws that impose investigation and remediation obligations or liability for historical releases of hazardous substances at existing sites or ones for which we have indemnity obligations.

In addition, our operations require numerous governmental approvals and permits. Environmental operating permits are subject to modification, renewal and revocation and can require us to make capital, maintenance and operational expenditures to comply with the applicable requirements. New environmental initiatives or permit program requirements, public opposition to permits, or changes in interpretation of existing laws and regulations, could result in significant additional expenditures (including capital expenditures, investment in new plant facilities or improvements to existing plants) or reduction or termination of certain operations, which may, in turn, have a material adverse effect on our financial condition and results of operations. Noncompliance with EHS permits laws and regulations could subject our operations to regulatory enforcement, including the imposition of civil and/or criminal penalties, and even the partial or total shutdown of operations.

 

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Some environmental laws impose substantial penalties for noncompliance, and others, such as the federal Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”), the Resource Conservation and Recovery Act (“RCRA”), or similar state laws, may impose strict, retroactive and joint and several liabilities for the remediation of releases of hazardous substances. Liability under CERCLA, RCRA or similar state and local laws, may be imposed as a result of conduct that was lawful at the time it occurred or for the conduct of, or conditions caused by, prior operators or other third parties. Failure to properly handle, transport, store or dispose of hazardous materials or otherwise conduct our operations in compliance with RCRA and other EHS laws or similar state and local laws could expose us to liability for governmental penalties, cleanup costs and civil or criminal liability associated with releases of such materials into the environment, damages to property, natural resources and other damages, as well as potentially impair our ability to conduct our operations.

EHS laws and regulations continue to evolve and are becoming increasingly stringent. Future EHS laws and regulations could restrict our ability to expand our facilities or extract materials from our quarries or could require us to acquire costly equipment or to incur other significant expenses in connection with our business. Future events, including adoption of new, or changes in any existing, EHS requirements (or their interpretation or enforcement) and the costs associated with complying with such requirements, could have a material adverse effect on us. The ultimate impact of complying with such laws and regulations is not always clearly known or determinable because regulations under some EHS laws have not yet been promulgated, some are the subject of ongoing litigation or are undergoing revision and new versions or interpretations of existing laws may take effect.

As a result, we cannot assure you that any costs relating to future capital and operating expenditures to maintain compliance with EHS laws, as well as costs to address contamination or environmental claims, will not exceed any current estimates and reserves or adversely affect our business, financial position, results of operations and cash flows. In addition, any unanticipated liabilities or obligations arising, for example, out of the discovery of previously unknown conditions or changes in law or enforcement policies, could materially and adversely affect our business, financial position, results of operations and cash flows.

Our business may face certain risks related to geological and mining, water management, solid waste, air quality, permitting and regulatory schemes, which could adversely impact our operations and financial position.

Geological and Mining Environmental Risks

The rock underlaying quarries and associated plants includes materials at risk of forming voids or sinkholes. Surface disturbances such as sinkholes can interrupt operations and increase the risk of releases directly to groundwater. Quarry blasting may produce dust, seismic and noise impacts beyond our property line with risks of meeting regulatory limits. In addition, we have from time to time been subject to complaints alleging nuisance and property damage related to blasting activities.

Such blasting activities at our open quarries create risks of fugitive dust impacts affecting visibility and groundwater contamination from components of the explosives we use and from mechanical equipment we operate using oil, lubricants or fuels. Some of our quarries operate adjacent to public drinking water supplies under more restrictive requirements. In addition, some quarries store and manage water we use to provide process water and cooling water to co-located equipment. Also, disruption of mechanical systems and synthetic liners for these ponds can cause releases, flood property and curtail significant operations at the co-located sites.

Reclamation and Post-Closure Obligations

We incur post-closure obligations to reclaim quarry sites and other similar post-closure obligations for owned and leased property. Reclamation methods and requirements can differ depending on the quarry and state rules and regulations in existence for certain locations. This differentiation affects the potential obligation required at each individual site. Please refer to Note 21 to our audited consolidated financial statements included elsewhere in this prospectus for further information about restoration, environmental and remediation provisions.

 

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Water Management Risks

The Clean Water Act (“CWA”) and analogous state laws impose restrictions and strict controls with respect to the discharge of pollutants, including spills and leaks of oil and other substances, into state waters or waters of the United States. The discharge of pollutants into regulated waters is prohibited, except in accordance with the terms of a permit issued by the U.S. Environmental Protection Agency (“EPA”) or an analogous state agency. The CWA and regulations implemented thereunder also prohibit the discharge of dredge and fill material into regulated waters, including jurisdictional wetlands, unless authorized by the U.S. Army Corps of Engineers (“USACE”) pursuant to an appropriately issued permit. In addition, the CWA and analogous state laws require individual permits or coverage under general permits for discharges of stormwater runoff from certain types of facilities.

Our operations store and use chemicals and fuels with the risk of exposure to surface or groundwater. These operations include both storage tanks and fuel-burning equipment and are present at coastal terminals and inland operations. Additionally, some operations generate process wastewater. Both weather events and mechanical equipment failure can result in onsite or offsite releases. Lastly, risks exist from mechanical equipment failure for our stormwater management and treatment systems. A release from any of these systems can result in temporary interruption of operations and additional costs for new mitigation equipment.

Some operations are sited within basins of waterways designated with an “impaired waters” listing by state authorities. Impaired water mitigation planning is led by local authorities and includes monitoring of water quality, submerged lands and on-site sediment sampling. Compliance with the CWA and any new rules and legislation could require us to face increased costs and delays with respect to obtaining permits for expansion activities. Federal and state regulatory agencies can impose administrative, civil and criminal penalties as well as other enforcement mechanisms for non-compliance with discharge permits or other requirements of the CWA and analogous state laws and regulations.

Solid and Hazardous Waste Risks

Principal non-product material streams from our largest sites includes cement kiln dust (“CKD”), a by-product of our cement production operations. We may become subject to potential U.S. environmental legislation regulating discarded impoundments and landfills of CKD. The U.S. EPA has been evaluating the regulatory status of CKD under RCRA and certain environmental groups have asked the U.S. EPA to regulate discarded CKD as a hazardous waste. Although legislation related to CKD has not yet been implemented, any obligation to manage CKD as a hazardous waste under RCRA would negatively affect our operations.

Our operating landfills are bound with closure plans and post-closure monitoring. Monitoring activity below the surface may not completely foresee risks associated with waste, leachate and groundwater interaction. Post-closure monitoring may identify conditions that trigger additional mitigation costs including potential linings and removal. Please refer to Note 21 to our audited consolidated financial statements included elsewhere in this prospectus for further information about restoration, environmental and remediation provisions.

Risks from the generation of waste include onsite and offsite spills. Our over the road and rail transport systems can spill product from moving accident or infrastructure failures. Off-site spills of our products increase risks of contamination of public and private property, impacting our distribution costs.

As discussed above, liability under CERCLA, or similar state and local laws, may be imposed as a result of conduct that was lawful at the time it occurred or for the conduct of, or conditions caused by, prior operators or other third parties. Failure to properly handle, transport, store or dispose of hazardous materials or otherwise conduct our operations in compliance with environmental laws could expose us to liability for governmental penalties, cleanup costs and civil or criminal liability associated with releases of such materials into the environment, damages to property, natural resources and other damages, as well as potentially impair our ability to conduct our operations.

 

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Air Quality Risks

Our operations are subject to the federal Clean Air Act (“CAA”) and related state and local laws, which restrict the emission of air pollutants and impose permitting, monitoring and reporting requirements on various sources. Over the next several years, we may be required to incur certain capital expenditures for air pollution control equipment or to address other air emissions-related issues. Changing and increasingly stringent requirements, future non-compliance or failure to maintain necessary permits or other authorizations could require us to incur substantial costs or suspend or terminate our operations. We aim to mitigate air quality risks for compliance requirements with engineering design, mechanical equipment, operating procedures and monitoring equipment; however, such measures can fall short of mitigating all risks.

Future emission standards that may apply to our operations include the National Emission Standards for Hazardous Air Pollutants (“NESHAP”) for Portland cement. Although the U.S. EPA concluded a technological review of Portland cement under NESHAP in 2018, and concluded that no new requirements or changes to emission limits were warranted at that time, the U.S. EPA is scheduled to finalize new emission limitations and other potential requirements in 2025. These regulations apply to a portion of our cement operations. There can be no assurance that future requirements will not potentially increase our compliance costs and adversely affect our operating performance and profitability. Similarly, additional future emission standards to protect the ozone through increasingly stringent National Ambient Air Quality Standards (“NAAQS”) may be finalized and add costs for NOx emission control.

The EPA’s regulations also target GHG emissions from industrial sources identified by the EPA as large GHG emission sources, including cement manufacturing. Since December 29, 2009, the EPA’s Mandatory Reporting of GHGs Rule requires certain industrial sectors exceeding certain emission thresholds to report their GHG emissions annually. In 2010, the EPA set GHG thresholds for the New Source Review Prevention of Significant Deterioration (“PSD”) and Title V Operating Permit programs for facilities with emissions above certain thresholds. Cement plants must obtain these permits if they exceed the limits, and new major sources or significant modifications at major sources must secure pre-construction permits that include pollution limits based on Best Available Control Technology (“BACT”). Applying for, complying with, reporting under, renewing and maintaining these permits can involve significant costs and delays.

Similarly, the GHG regulations for electric utilities under the CAA were finalized in 2024 though may become stayed by court orders pending the resolution of ongoing legal actions, including recent challenges to the 2024 final rule regulating GHG emissions from new, modified and reconstructed fossil fuel-fired power plants. The ultimate disposition of the GHG regulations for the electric utilities will set precedent for what may come for other industries (including cement) in subsequent regulatory action. The imposition of GHG regulations on the cement industry would negatively affect our operations and could result in higher capital and operating expenditures to comply with such regulations, any of which would adversely affect our operating performance and profitability.

Mechanical failure of pollution control equipment may result in offsite impacts including dusting episodes that expose the public to contaminants’ exhausts by our processes. Other operations that use procedures to mitigate impacts may cause offsite impacts of air pollutants during periods of high wind or heavy traffic periods.

Any such developments could have an adverse effect on our business, financial position, results of operations and cash flows.

Permitting Risks

In addition to the risks of actual releases, public opposition to environmental permits presents a significant risk to the business. Public opposition to environmental permits reflects our case-by-case engagements and the permit preparations by the regulatory authority. Public opposition has the potential to overwhelm viability of a capital project and lead to cancelling improvements or expansions of operations.

 

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For example, the implementation of the 2024 NAAQS for fine particulate (PM2.5) will authorize local permit authorities to increase regulation on PM2.5 emissions. The implementation will encourage more source testing and air sampling from our sources and in our communities, respectively. These air pollution studies may result in new requirements of our sites including new or modified mitigation equipment or ambient monitoring equipment. NAAQS implementation is a regulatory process performed under public review. Public disclosure of air pollution studies also carries potential reputational risk.

There can be no assurance that future approvals, licenses and permits will be granted or that we will be able to maintain and renew the approvals, licenses and permits we currently hold. Failure to do so could have a material adverse effect on our results of operations and cash flows. Furthermore, compliance with environmental permitting and approval requirements may be costly and time consuming and could result in delays or other adverse impacts on planned projects, our results of operations and cash flows.

Additional Regulatory Risks

Connected to GHG and Environmental, Social and Governance (“ESG”) risks are potential environmental or pollution tariffs on materials we import. Both legislative and executive branches of the U.S. government have proposed or are striving to propose tariff programs to penalize imports of cement and other products from countries with higher GHG emissions per unit of production. These programs would potentially level significant tariffs on imports to our cement distribution networks.

Moreover, there can be no assurance that a scheme similar to the EU-wide cap and trade emissions scheme, namely the European Trading Scheme, will not be introduced in the United States or at the state level in jurisdictions in which we operate, potentially significantly increasing our compliance costs. Further, there may be increasing political support for the implementation of other stringent environmental rules that would increase our production costs. Compliance with changes in laws, regulations or emissions trading schemes could result in higher capital expenditures requirements and reduced profitability for us due to increased production costs and may also have an impact on our ability to grow our business, pursue strategic growth opportunities and remain competitive. If we are unable to find solutions that reduce our GHG emissions for new and existing projects or products, future international agreements, government regulation or challenges from society could lead to additional costs as well as compliance and operational risks.

Both tariff and trading scheme programs include higher monitoring and public disclosure of GHG emissions. These disclosures present additional reputational risks to us.

Due to the uncertain availability of technologies to control GHG emissions and the unknown obligations that potential GHG emission legislation or regulations may create, we cannot determine the potential financial impact on our operations. In addition, the increasing focus on climate change and stricter regulatory requirements may result in our business facing adverse reputational risks associated with certain of our operations producing GHG emissions. Although we have not experienced material difficulties in these areas, if we are unable to satisfy the increasing climate-related expectations of certain stakeholders, we may suffer reputational harm, which may cause our stock price to decrease or difficulty in accessing the capital or insurance markets. Such efforts, if successfully directed at us, could increase the costs of or access to capital or insurance and interfere with business operations and ability to make capital expenditures.

Increasing scrutiny and activism from stakeholders and regulators with respect to ESG matters, including those most relevant to the cement industry, could impact our reputation and the cost of our operations which could adversely affect our business and results of operations.

Stakeholder actions and increased regulatory activity related to environmental, social and governance matters, including climate change and reducing GHG emissions, diversity, equity, and inclusion (“DEI”), biodiversity and natural capital, water stewardship, circular economy, responsible supply chain, human rights, and other matters could adversely impact our operations, costs of or access to capital and impact or limit business plans.

 

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We could face stakeholder scrutiny and activism related to ESG. There has been an increased focus from stakeholders and regulators related to ESG matters across all industries in recent years, with investors (including institutional investors), proxy advisory firms, customers, employees and lenders placing increasing importance on the impacts and social cost associated with climate change, as well as ESG practices and policies of companies, including sustainability performance and risk mitigation efforts. There is also risk that we could be perceived as, or accused of, “greenwashing,” i.e., the process of conveying misleading information or making false claims regarding the ESG profile of, e.g., a product, activity, or company operations, which could lead to reputational harm, litigation, or other adverse impacts. In particular, actions or statements we take may be based on expectations, assumptions, methodologies, or information that we currently believe to be reasonable but that is subsequently determined to be erroneous or not in keeping with best practice, particularly as ESG standards continue to evolve. If we fail to, or are perceived to fail to, to advance our ESG initiatives or to align with best practices, we may be subject to various adverse impacts. For example, both we and the Titan Group have implemented various voluntary initiatives to improve the ESG profile of our operations and products; however, such initiatives may be costly and may not have the desired effect. Our emissions reduction goals are ambitious and subject to various contingencies, calculations and, in certain cases, the actions of third-parties. As such, we may not achieve them, either according to specific standards or stakeholder expectations and timelines, or at all. Achieving our emission reduction goals depends in significant part on the adoption of Lower-Carbon Cement and other less carbon-intensive products by our customers, which may be impacted by cost, regulatory restrictions, customers’ own perception on the sustainability of our products, or other factors.

In addition, some investors use ESG criteria to guide their investment strategies, and may not invest in our common shares, or may divest their holdings of our common shares, if they believe our policies relating to ESG matters are inadequate or, on the other hand, have a negative response to such policies as a result of anti-ESG sentiment. Customers and other stakeholders may also make similar determinations. Concern that GHG emissions contribute to global climate change has led to international, federal, state and local legislative and regulatory proposals to reduce or mitigate the effects of GHG emissions. We monitor, analyze and report GHG emissions from our operations and products as required by applicable laws and regulations and to satisfy customer inquiries. We will continue to monitor GHG regulations and their potential impact on operations.

The cement industry is under increasing regulatory pressure to reduce carbon emissions and achieving significant emissions reductions may involve high costs and technical challenges associated with carbon capture and storage. Due to the uncertain availability of technologies to control GHG emissions and the unknown obligations that potential GHG emission legislation or regulations may create, we cannot determine the potential financial impact on our operations.

In addition, the increasing focus on climate change and stricter regulatory requirements may result in our business facing adverse reputational risks associated with certain of our operations producing GHG emissions. Although we have not yet experienced material difficulties in these areas, if we are unable to satisfy the increasing climate-related expectations of certain stakeholders, we may suffer reputational harm, which may cause the market price of our common shares to decrease, difficulty in accessing the capital or insurance markets or interference with our business operations and ability to make capital expenditures. Simultaneously, some stakeholders and policymakers are looking to reduce consideration of climate and ESG factors, which could impact the degree to which customers purchase less carbon-intensive products. Navigating these competing interests is complex, and failure to successfully do so may adversely impact our business. Any of the above risks may also impact our customers or suppliers, which could augment existing or result in different risks, including risks that may not yet be known to us.

We are subject to a series of risks regarding ESG regulation.

We expect there will likely be increasing levels of regulation, disclosure-related and otherwise, with respect to ESG matters. For example, policymakers such as the SEC and European Union have adopted, and other policymakers such as the Federal Acquisition Regulatory Council and the State of New York are considering adopting, requirements for significant additional disclosures of climate- or other sustainability-related

 

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information. For instance, the European Commission has established the Corporate Sustainability Reporting Directive (the “CSRD”), which will require in-scope companies to report on a number of sustainability topics in accordance with the European Sustainability Reporting Standards. We may be considered an in-scope company if we are no longer a subsidiary of the Titan Group and may then be subject to such reporting requirements. Our current programs, reporting frameworks and principles may not be in compliance with any new environmental and social laws and regulations, or novel interpretations of existing laws and regulations, that may be promulgated in the United States and elsewhere. Such regulation may therefore require us to incur substantial costs or otherwise make changes for compliance, and any noncompliance may result in investigations, fines, termination of contracts or other adverse impacts.

Risks Related to Regulatory and Legal Matters

We are subject to health and safety laws and regulations and any failure to comply with any current or future laws or regulations could have a material adverse effect on us.

Manufacturing and construction sites are inherently dangerous workplaces. Our sites often put our employees and others in close proximity with large pieces of mechanized equipment, moving vehicles, chemical and manufacturing processes, heavy products and items and highly regulated materials. As a result, we are subject to a variety of health and safety and mine safety laws and regulations dealing with occupational health and safety, particularly those administered by OSHA and MSHA, which are subject to change and may be interpreted differently or become stricter over time. Failure to comply with these requirements can result in sanctions such as fines and penalties and claims for personal injury and property damage. These requirements may also result in increased operating and capital costs in the future. We cannot guarantee that violations of such requirements will not occur, and any violations could result in additional costs. See also “Risks Related to Geological, Mining and Environmental Matters” above for a further description of risks related to environmental laws and regulations.

Unsafe work sites have the potential to increase employee turnover and raise our operating costs. Our safety record can also impact our reputation. We maintain functional groups whose primary purpose is to ensure we implement effective work procedures throughout our organization and take other steps to ensure the health and safety of our work force, but there can be no assurances these measures will be successful in preventing injuries or violations of health and safety laws and regulations. Any failure to maintain safe work sites or violations of applicable law could expose us to significant financial losses and reputational harm, as well as civil and criminal liabilities, any of which could have a material adverse effect on our business, financial condition and results of operations.

Specific future risks include potable water systems at our sites which may be further regulated for per- and polyfluoroalkyl substances, lead and copper with requirements to treat water and ensure potable water delivered satisfies water quality criteria. In addition, MSHA has begun implementation of a tighter standard for silica dust exposure to our workers. Future monitoring may identify conditions of exposure that require additional mitigation and expense to ensure work protection meets MSHA standards.

As a result, we cannot assure you that any costs relating to future capital and operating expenditures to maintain compliance with environmental, health and safety and mine safety laws and regulations, as well as costs to address contamination or environmental claims, will not exceed any current estimates and reserves or adversely affect our business, financial position, results of operations and cash flows. In addition, any unanticipated liabilities or obligations arising, for example, out of the discovery of previously unknown conditions or changes in law or enforcement policies, could materially and adversely affect our business, financial position, results of operations and cash flows.

We face risks from potential and ongoing litigation, and the nature of our business exposes us to product liability, construction defect and warranty claims in particular.

In the ordinary course of our business, we are involved, and may in the future become involved, in a number of legal proceedings incidental to our operations, including personal injury, product liability, commercial, warranty, antitrust, ownership disputes, competition, EHS matters, social security and tax claims.

 

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Although our management aims to resolve these matters without any significant impact on our business, financial position or results of operations, the actual outcome of these legal proceedings is uncertain and in the case of an adverse final decision in any of these legal proceedings, our business, financial position and results of operations may be adversely affected. Furthermore, such proceedings can divert the attention of our management from our business and any negative publicity resulting from such proceedings or other disputes may result in substantial expenses and adversely affect our business, reputation, prospects, financial condition and results of operations. Any claims or proceedings, particularly those in which we are unsuccessful or for which we did not establish adequate reserves, could have a material adverse effect on our business, financial condition and results of operations. We generally maintain insurance against many product liability risks, but there can be no assurance that this coverage will be adequate for any liabilities ultimately incurred. In addition, there is no assurance that insurance will continue to be available on terms acceptable to us.

Our existing compliance controls, although considered sufficient by our management, may fail to prevent or detect inadequate practices, fraud and violations of law by our intermediaries, customers, suppliers, partners or employees.

We are subject to various legal and regulatory requirements and risks in the markets in which we operate, such as antitrust, anti-money laundering, anti-bribery and anti-corruption or other sanctions laws and regulations imposed by international organizations or individual nations. Our existing compliance controls may not be sufficient in order to prevent or detect inadequate practices, fraud and violations of law by our intermediaries, customers, suppliers, partners, affiliates or employees. Should any of our intermediaries, customers, suppliers, partners, affiliates or employees receive or grant inappropriate benefits or use corrupt, fraudulent or other unfair business practices, we could be confronted with legal sanctions, penalties, loss of orders, detention or seizure of any imports, claims by injured parties or harm to our reputation. This could have a material adverse effect on our business, financial position and results of operations.

We may fail to obtain or renew, or may experience material delays in obtaining, requisite approvals, licenses and permits from the relevant national and/or regional governments or authorities for the conduct of our business. Failure to obtain or renew, or comply with the requirements of, such permits could also adversely affect our results of operations.

We require various approvals, licenses, permits and certificates from the relevant national and/or regional governments or authorities in the markets in which we operate, in particular in connection with operating our limestone quarries. Many such permits are long-term, ranging from 10 to 15 years, and are automatically renewed five years before their expiration. We cannot provide assurance or guarantee that we will not encounter problems in obtaining new or renewing existing licenses, permits and certificates required in the conduct of our businesses, or provide assurance that we will continue to satisfy the conditions to which such licenses, permits and certificates are granted. There may also be delays on the part of regulatory and administrative bodies in reviewing applications and granting approvals, which could result in delays or increased costs to our operations. If we fail to obtain or maintain the necessary permits, licenses and certificates required for the conduct of our business, we may be required to incur substantial costs, which could have a material adverse effect on our business, financial position and results of operations.

In addition to the regulatory matters described above, we and our customers are subject to extensive governmental regulation on matters such as approvals, licenses, permits and certificates requirements; plant and wildlife protection; wetlands protection; waste management; reclamation and restoration activities at mining properties after mining is completed; the discharge of materials into the environment; and the effects that mining has on groundwater quality and availability. Compliance with these regulatory requirements is expensive and significantly lengthens the time needed to develop a project. The denial of an approval, license, permit or certificate that is essential to our operations or the imposition of conditions with which it is not practicable or feasible to comply could impair or prevent our ability to operate, develop or expand a project. Additionally, failure to comply with such approvals, licenses, permits and certificates could result in enforcement action and have a material adverse effect on our business, financial position and results of operations.

 

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The use of our products, including cement and supplementary cementitious materials, aggregates, ready-mix concrete, concrete block and other ancillary products, is often affected by various laws and regulations in the markets in which we operate, any of which may have a material adverse effect on us.

The use of many of our products, which include cementitious materials, aggregates, ready-mix concrete, concrete block and other ancillary products, is subject to approvals by municipalities, state departments of transportation, engineers and developers as they are used in construction projects and thus subject to construction laws and performance specifications. These approvals and specifications, including building codes, may affect the decisions of our customers, and, consequently, failure to obtain or maintain such approvals or changes in building codes may affect the sale of our products. Changes in applicable regulations governing the sale of some of our products or the failure of any of our products to comply with such requirements could increase our costs of doing business, reduce sales or otherwise have a material adverse effect on our business, financial condition and results of operations.

Any inability to protect our intellectual property or claims that we infringe on the intellectual property rights of others could have a material adverse effect on us.

We rely on a combination of patents, trademarks, trade names, confidentiality and nondisclosure clauses and agreements, and other unregistered rights to define and protect our rights to our brand and the intellectual property used in certain of our products. We also rely on product, industry, manufacturing and market “know-how” that cannot be registered and may not be subject to any confidentiality or nondisclosure clauses or agreements. To the extent that our innovations, products and name are not protected by patents or other intellectual property rights, third parties, including competitors, may be able to commercialize our innovations or products or use our know-how, which could result in a loss of our competitive advantage. Additionally, we have faced in the past and may in the future face claims that we are infringing the intellectual property rights of others. If any of our products are found to infringe the patents or other intellectual property rights of others, the potential risks and uncertainties of intellectual property-related litigation and an assertion of an infringement claim against us may cause us to spend significant amounts to defend the claim, and possibly pay significant money damages. In the event of a settlement or adverse judgment, our manufacture and sale of such products could be significantly restricted or prohibited and we may be required to pay substantial damages or ongoing licensing fees. Any inability to protect our intellectual property rights or any misappropriation of the intellectual property of others could have a material adverse effect on our business, financial condition and results of operations. Even in instances where we believe that claims and allegations of intellectual property infringement against us are without merit, defending against such claims may be time consuming and expensive and may result in the diversion of time and attention of our management and employees.

Changes in tariffs and other trade restrictions could have a material adverse effect on our business, financial position, results of operations and cash flows.

If significant tariffs or other restrictions are placed on foreign imports by the United States or any related countermeasures are taken by impacted foreign countries, it could have a material adverse effect on our business, financial position, results of operations and cash flows. We may not be able to pass any resulting price increase on to our customers, and even if we are able to pass along such price increases, we may face decreased demand for our products and we may lose customers. Additionally, future federal or state infrastructure projects may include a “Buy American” provision to restrict a percentage of materials sourced from outside the United States (not excluding cement), which could have a material adverse effect on our business, financial position, results of operations and cash flows. Conversely, if significant tariffs or other restrictions are removed on foreign imports by the United States, we may be forced to lower the prices we charge our customers for our products in order to remain competitive in our markets, which could also have a material adverse effect on our business, financial position, results of operations and cash flows.

It remains unclear what additional actions, if any, will be taken by the United States or other governments with respect to international trade agreements, the imposition or removal of tariffs on goods imported into the United

 

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States, the creation or removal of barriers to trade, tax policy related to international commerce, or other trade matters. The current tariffs and trade restrictions, along with any additional tariffs and restrictions that may be implemented by the United States or other countries in the future, may result in further increased prices, decreased available supply of steel and other materials used in our business and worsened economic conditions affecting the market for our products and services more broadly. As a result, our business, financial position, results of operations and cash flows may be materially and adversely affected.

Risks Related to the Offering and Ownership of Our Common Shares

Our results of operations and the market price of our common shares may be volatile, and the market price of our common shares after this offering may drop below the price you pay, which could result in substantial losses for investors purchasing shares in this offering.

The market price of our common shares could be subject to significant fluctuations after this offering, and it may decline below the initial public offering price. Some of the factors that may cause the market price of our common shares to fluctuate include:

 

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likely fluctuation in our future results of operations;

 

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significant volatility in the market price and trading volume of comparable companies;

 

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actual or anticipated changes or fluctuations in our operating results or in the expectations of market analysts;

 

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adverse market reaction to any indebtedness we may incur or securities we may issue in the future;

 

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short sales, hedging and other derivative transactions in our shares;

 

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announcements of technological innovations, new products, strategic alliances or significant agreements by us or by our competitors;

 

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failure to meet or exceed financial estimates and projections of the investment community or that we provide to the public;

 

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issuance of new or updated research or reports by securities analysts;

 

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fluctuations in the valuation of companies perceived by investors to be comparable to us;

 

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currency fluctuations;

 

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changes in the prices of our products or the prices of our competitors’ products;

 

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litigation or regulatory action against us;

 

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investors’ general perception of us and the public’s reaction to our press releases, our other public announcements and our filings with the U.S. Securities and Exchange Commission (“SEC”);

 

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publication of research reports or news stories about us, our competitors or our industry, or positive or negative;

 

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recommendations or withdrawal of research coverage by securities analysts;

 

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changes in general political, economic, industry and market conditions and trends;

 

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sales of our common shares by our directors, executive officers and existing shareholders;

 

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recruitment or departure of key personnel; and

 

•

the other risk factors described in this section of this prospectus.

In addition, stock markets have historically experienced substantial price and volume fluctuations. Broad market and industry factors may harm the market price of our common shares and our results of operations. Hence, the market price of our common shares and our results of operations could fluctuate based upon factors that have

 

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little or nothing to do with us, and these fluctuations could materially reduce the market price of our common shares regardless of our operating performance and could limit or prevent investors from readily selling their common shares and may otherwise negatively affect the market price and liquidity of our common shares.

In addition, in the past, when the market price of a share has been volatile, holders of that share have sometimes instituted securities class action litigation against the company that issued the shares. If any of our shareholders brought a lawsuit against us, we could incur substantial costs defending the lawsuit. Such a lawsuit could also divert the time and attention of our management from our business, which could significantly harm our profitability and reputation.

An active, liquid and orderly trading market for our common shares may not develop, and you may not be able to resell your shares at or above the initial public offering price.

Before this offering, there was no public trading market for our common shares, and we cannot assure you that one will develop or be sustained after this offering. If a market does not develop or is not sustained, it may be difficult for you to sell your common shares. Public trading markets may also experience volatility and disruption. This may affect the pricing of the common shares in the secondary market, the transparency and availability of trading prices, the liquidity of the common shares and the extent of regulation applicable to us. We cannot predict the prices at which our common shares will trade. The initial public offering price for our common shares will be determined through our negotiations with the underwriters and may not bear any relationship to the market price at which our common shares will trade after this offering or to any other established criteria of the value of our business. It is possible that, in future quarters, our results of operations may be below the expectations of securities analysts and investors. As a result of these and other factors, the price of our common shares may decline.

Future sales or distributions of our common shares by Titan Cement International could depress the market price of our common shares.

After this offering, and subject to the lock-up period described in this prospectus, Titan Cement International may sell all or a portion of its remaining shares of our common shares or distribute those shares to its shareholders. Additional sales by Titan Cement International in the public market or distributions to its shareholders of substantial amounts of our common shares could depress the market price of our common shares.

The rights provided to our shareholders under Belgian corporate law and our articles of association differ in certain respects from the rights that you would typically enjoy as a shareholder of a U.S. company under applicable U.S. federal and state laws.

We are, and will upon the completion of this offering be, a Belgian company with limited liability (naamloze vennootschap/société anonyme). Our corporate affairs are governed by our articles of association and by the Belgian Code on Companies and Associations. From a Belgian corporate law point of view, we do not qualify as a listed company (genoteerde vennootschap/société cotée) because none of our securities are listed on any regulated market in the European Economic Area. The Belgian corporate law provisions that are applicable to Belgian companies listed on a regulated market in the European Economic Area do therefore not apply to us. We are not subject to most of the disclosure obligations applicable to Belgian companies listed on a regulated market in the European Economic Area. Furthermore, Belgian law provisions on mandatory public takeover bids that are applicable to Belgian companies listed on a regulated market in the European Economic Area do not apply to us. Therefore, under Belgian law, no mandatory takeover bid can be imposed on a person acquiring a significant or even controlling stake of our shares and thus the shareholders may not be granted the opportunity to sell their shares at a premium (which is typically offered in the framework of a takeover bid) in the event our parent, Titan Cement International, would sell its shares to a third party. As a result, shareholders of our Company may not enjoy certain of the rights and protection generally afforded to shareholders of a Belgian company listed on a regulated market in the European Economic Area.

 

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Also, the rights of shareholders and the responsibilities of members of our board of directors may be different from the rights and obligations of shareholders and boards of directors in companies governed by the laws of U.S. jurisdictions.

In the performance of its duties, our board of directors is required by the Belgian Code on Companies and Associations to consider the corporate interest of our Company, which requires our board to act not only in the financial interest of the shareholders, but also to take into account of the consequences of their actions on our employees and other stakeholders, in all cases with due observation of the principles of reasonableness. It is possible that some of these parties will have interests that are different from, or in addition to, the interests of our shareholders. See “Description of Share Capital—Articles of Association and Other Share Information.”

As a result of these differences between Belgian corporate law, on the one hand, and U.S. federal and state laws, on the other hand, in certain instances, you could receive less protection as a shareholder of our Company than you would as a shareholder of a U.S. corporation.

As a foreign private issuer, we are subject to different U.S. securities laws and rules than a domestic U.S. issuer, which may limit the information publicly available to our shareholders or otherwise result in less protection than is accorded to investors under rules applicable to domestic U.S. issuers.

Upon the completion of this offering, we will report under the Exchange Act as a non-U.S. company with foreign private issuer status. Because we qualify as a foreign private issuer under the Exchange Act, we are exempt from certain provisions of the Exchange Act that are applicable to domestic U.S. public companies, including (i) the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act; (ii) the sections of the Exchange Act requiring insiders to file public reports of their share ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and (iii) the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q containing unaudited financial and other specified information. In addition, foreign private issuers are not required to file their annual report on Form 20-F until 120 days after the end of each fiscal year, while domestic U.S. issuers that are accelerated filers are required to file their annual report on Form 10-K within 75 days after the end of each fiscal year and domestic U.S. issuers that are large accelerated filers are required to file their annual report on Form 10-K within 60 days after the end of each fiscal year. Foreign private issuers are also exempt from Regulation FD, which is intended to prevent issuers from making selective disclosures of material information. As a result of all of the above, you may not have the same protections afforded to shareholders of a company that is not a foreign private issuer.

As a foreign private issuer and as permitted by the listing requirements of the NYSE, we rely on certain home country corporate governance practices rather than the corporate governance requirements of the NYSE.

As a foreign private issuer, we have the option to follow certain home country corporate governance rules rather than those of the NYSE, provided that we disclose the requirements we are not following and describe the home country practices we are following. We intend to rely on this “foreign private issuer exemption” but cannot make any assurances that we will continue to do so in the future. If we were to lose our status as a foreign private issuer, we may avail ourselves of the controlled company exemption which exempts us from certain governance requirements of the NYSE. As a result, our shareholders may not have the same protections afforded to shareholders of companies that are subject to all NYSE corporate governance requirements.

We may lose our foreign private issuer status in the future, which could result in significant additional costs and expenses to us.

As discussed above, we are a foreign private issuer, and therefore, we are not required to comply with all of the periodic disclosure and current reporting requirements of the Exchange Act. The determination of foreign private issuer status is made annually on the last business day of an issuer’s most recently completed second fiscal quarter, and, accordingly, the next determination will be made with respect to us on June 30, 2025. In the future,

 

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we would lose our foreign private issuer status if (i) more than 50% of our outstanding voting securities are owned by U.S. residents and (ii) a majority of our directors or executive officers are U.S. citizens or residents, or we fail to meet additional requirements necessary to avoid loss of foreign private issuer status. If we lose our foreign private issuer status, we would be required to file with the SEC periodic reports and registration statements on domestic U.S. issuer forms, which are more detailed and extensive than the forms available to a foreign private issuer. We would be required to report under U.S. GAAP, which could alter our results of operations or depict different trends of results of operations. We would also have to comply with U.S. federal proxy requirements, and our officers, directors and principal shareholders would become subject to the short-swing profit disclosure and recovery provisions of Section 16 of the Exchange Act. In addition, we would lose our ability to rely upon exemptions from certain corporate governance requirements under the listing rules of the NYSE. As a U.S. listed public company that is not a foreign private issuer, we would incur significant additional legal, accounting and other expenses that we will not incur as a foreign private issuer, and accounting, reporting and other expenses in order to maintain a listing on a U.S. securities exchange. These expenses would relate to, among other things, the obligation to present our financial information in accordance with U.S. GAAP in the future.

We will be a “controlled company” within the meaning of the rules of the NYSE and, as a result, will qualify for, and intend to partially rely on, exemptions from certain corporate governance requirements. You will not have the same protections afforded to shareholders of companies that are subject to such requirements.

A “controlled company” under the NYSE corporate governance requirements is a company of which more than 50% of the voting power is held by an individual, group or another company. Following this offering, Titan Cement International will control a majority of the voting power of our outstanding common shares, making us a “controlled company” within the meaning of the NYSE corporate governance requirements. Because we qualify as a “controlled company,” we are not required to have a majority of our non-executive directors be independent, nor are we required to have an independent compensation committee or an independent nominating function. We expect that a majority of our directors will be independent; however, in light of our status as a “controlled company,” our nominating and compensation committee will not be independent. Our status as a “controlled company” could make our common shares less attractive to some investors or otherwise harm the price of our common shares.

Following the completion of this offering, Titan Cement International will control a majority of the voting power of our common shares, which will prevent you and other shareholders from influencing significant decisions.

After giving effect to the sale of our common shares pursuant to this offering, Titan Cement International will control (directly or indirectly) 87% (or 85% if the underwriters exercise their option to purchase additional common shares from the selling shareholder in full) of our aggregate voting power. For so long as Titan Cement International continues to control a majority of the voting power, it will generally be able to significantly influence the outcome of all corporate actions requiring approval of the general meeting.

So long as Titan Cement International continues to control a majority of the voting power of our shares, it will be able to influence the composition of our board of directors and thereby influence our policies and operations, including the appointment of management, future issuances of shares or other securities, the payment of dividends, if any, on shares, the incurrence or modification of debt by us, amendments to our articles of association and the entering into extraordinary transactions, and its interests may not in all cases be aligned with our other shareholders’ interests. In addition, Titan Cement International may have an interest in pursuing acquisitions, divestitures and other transactions that, in its judgment, could enhance its investment or improve its financial condition, even though such transactions might involve risks to our other shareholders. For example, Titan Cement International could cause us to make acquisitions that increase our indebtedness or cause us to sell revenue-generating assets.

 

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In addition, Titan Cement International will be able to cause or prevent a change of control of our Company and could preclude any unsolicited acquisition of our Company. The concentration of ownership could deprive our other shareholders of an opportunity to receive a premium for their common shares as part of a sale of our Company and ultimately may affect the market price of our common shares.

As a result, Titan Cement International and its affiliates’ interests may not be the same as, or may conflict with, the interests of our other shareholders or our interests. Investors in this offering will not be able to affect the outcome of a shareholder vote while Titan Cement International controls the majority of the voting power in the general meeting. Because Titan Cement International’s interests may differ from those of our other shareholders, actions that Titan Cement International takes with respect to us, as our controlling shareholder, may not be favorable to us or to our other shareholders.

Conflicts of interest and disputes may arise between Titan Cement International and us that could be resolved in a manner unfavorable to us.

Questions relating to conflicts of interest and actual disputes may arise between Titan Cement International and us in a number of areas relating to our past and ongoing relationships. Areas in which conflicts of interest or disputes between Titan Cement International and us could arise include, but are not limited to, the following:

 

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Competing business activities and business opportunities. Titan Cement International is a large global company with businesses spanning a wide range of industries, including other businesses relating to cement manufacturing. In the ordinary course of its business activities, Titan Cement International may engage in activities where its interests conflict with our interests or those of our other shareholders. In addition, our directors who are employed by or otherwise affiliated with Titan Cement International may have or make investments in other companies that may compete with us. Titan Cement International also may pursue acquisition opportunities that may be complementary to our business, and, as a result, those acquisition opportunities may not be available to us. As a result, our future competitive position and growth potential could be adversely affected.

 

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Cross officerships, directorships and share ownership. The ownership interests of our directors or executive officers in the equity shares of Titan Cement International or service as a director or officer of both Titan Cement International and us could create, or appear to create, conflicts of interest when directors and executive officers are faced with decisions that could have different implications for the two companies. For example, these decisions could relate to (i) disagreement over the desirability of a potential business or acquisition opportunity or business plans, (ii) employee retention or recruiting (iii) our dividend policy or (iv) terms of cement purchase agreements.

As set out above, the Belgian Code on Companies and Associations sets out a mandatory procedure on financial conflicts of interest that is applicable to the members of the board of directors of Titan America but does not provide any express protection against conflicts of interest at the level of Titan America’s management.

Any such conflicts of interest or disputes that are not resolved in favor of our business could adversely affect our financial condition and results of operations.

If you purchase common shares in this offering, you will suffer immediate and substantial dilution in the net tangible book value of your investment.

The initial public offering price of our common shares is substantially higher than the net tangible book value per share. Therefore, if you purchase our common shares in this offering, you will pay a price per share that substantially exceeds our pro forma as adjusted net tangible book value per share after this offering. Based on the initial public offering price of $16.00 per common share, you will experience immediate dilution of $12.81 per share, representing the difference between our pro forma as adjusted net tangible book value per share after giving effect to this offering at the initial public offering price. See “Dilution” for more detail.

 

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We have identified material weaknesses in our internal control over financial reporting. If we are unable to maintain effective internal controls, the accuracy and timeliness of our financial reporting may be adversely affected, which could cause the market price of our common shares to decline, lessen investor confidence and harm our business.

As a privately-held company, we were not required to evaluate our internal control over financial reporting in a manner that meets the standards of publicly traded companies required by Section 404(a) of the Sarbanes-Oxley Act (“Section 404”). As a public company, we will be subject to significant requirements for enhanced financial reporting and internal controls. The process of designing and implementing effective internal controls is a continuous effort that requires us to anticipate and react to changes in our business and the economic and regulatory environments and to expend significant resources to maintain a system of internal controls that is adequate to satisfy our reporting obligations as a public company. In addition, we will be required, pursuant to Section 404, to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting, and our auditors will be required to issue an attestation report on the effectiveness of our internal controls on an annual basis.

The rules governing the standards that must be met for our management to assess our internal control over financial reporting are complex and require significant documentation, testing, and possible remediation. Testing and maintaining internal controls may divert our management’s attention from other matters that are important to our business.

During the preparation of our financial statements included elsewhere in this prospectus we identified material weaknesses in our internal control over financial reporting. The Public Company Accounting Oversight Board (the “PCAOB”) defines a material weakness as “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 the company’s annual or interim financial statements will not be prevented or detected on a timely basis.”

A description of the material weaknesses identified is included under “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates—Material Weaknesses.”

We are in the process of developing a remediation plan designed to remediate each of the identified material weaknesses; however the material weaknesses will not be considered remediated until the action items arising out of the plan have been implemented and the new controls and procedures have been operating effectively for a sufficient period of time. While we will work to remediate the material weaknesses as quickly and efficiently as possible, we cannot at this time provide an expected timeline in connection with any remediation plan. These remediation measures may be time-consuming and costly, and might place significant demands on our financial and operational resources.

As permitted under the U.S. securities laws, neither we nor our independent registered public accounting firm have performed or are required to perform an evaluation of the effectiveness of our internal control over financial reporting. In the future, we may identify additional material weaknesses or significant deficiencies in our internal control over financial reporting.

Our ability to comply with the annual internal control reporting requirements will depend on the effectiveness of our financial reporting and data systems and controls across our company. Any weaknesses or deficiencies or any failure to implement new or improved controls, or difficulties encountered in the implementation or operation of these controls, could harm our operating results and cause us to fail to meet our financial reporting obligations, or result in material misstatements in our consolidated financial statements, which could adversely affect our business and reduce the price of our common shares.

If we are unable to conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404, our independent registered public accounting firm may not issue an unqualified

 

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opinion. If we are unable to conclude that we have effective internal control over financial reporting, investors could lose confidence in our reported financial information, which could have a material adverse effect on the trading price of our common shares. Failure to remedy any material weakness in our internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, could also restrict our future access to the capital markets.

As a public reporting company, we will be subject to rules and regulations established from time to time by the SEC regarding our internal control over financial reporting. If we fail to put in place appropriate and effective internal control over financial reporting and disclosure controls and procedures, we may not be able to accurately report our financial results, or report them in a timely manner, which may adversely affect investor confidence in us and, as a result, the value of our common shares.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting and will also, as a public company, be responsible for evaluating and reporting on our system of internal control. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS. As a public company, we will be required to report, among other things, control deficiencies that constitute a “material weakness” or changes in internal controls that, or that are reasonably likely to, materially affect internal control over financial reporting. During the preparation of our financial statements included elsewhere in this prospectus we identified material weaknesses in our internal control over financial reporting.

If our executive management is unable to conclude that we have effective internal control over financial reporting, or to certify the effectiveness of such controls, or if our independent registered public accounting firm cannot render an unqualified opinion on our internal control over financial reporting, when required, if we fail to remediate the material weaknesses identified or if additional material weaknesses or deficiencies in our internal controls are identified, we could be subject to sanctions or investigations by the SEC or other regulatory authorities, investors may lose confidence in the accuracy and completeness of our financial reports, we may face restricted access to the capital markets and our share price may be adversely affected.

We will incur increased costs and regulatory burden and devote substantial management time as a result of being a public company listed on the NYSE.

Prior to this offering we were not subject to the disclosure requirements of U.S. securities laws or the rules, regulations and policies of the NYSE. As a public company listed on the NYSE, we will incur increased legal, accounting and other costs not incurred as a private company operating as a wholly-owned subsidiary of Titan Cement International. In particular, as a public company, we will be required to, among other things:

 

•

comply with the rules and regulations implemented by the SEC, the Sarbanes-Oxley Act, the Dodd-Frank Act, the PCAOB and the NYSE;

 

•

maintain an internal audit function;

 

•

enhance our own financial reporting function;

 

•

establish an investor relations function; and

 

•

establish certain internal policies, including those relating to trading in our securities.

We expect that compliance with these requirements will increase our legal and financial compliance costs and will make some activities more time consuming and costly. In addition, we expect that our management and other personnel will need to divert attention from operational and other business matters to devote substantial time and other resources to these requirements. We have made, and will continue to make, changes to our financial management control systems and other areas to manage our obligations as a public company listed on the NYSE, including corporate governance, corporate controls, disclosure controls and procedures and financial

 

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reporting and accounting systems. However, we cannot assure you that these and other measures that we might take will be sufficient to allow us to satisfy our obligations as a public company on a timely basis. As a result of these additional costs and other requirements, our historical financial information included in this prospectus is not necessarily indicative of our future results of operations, financial condition or cash flows, nor does it reflect what our results of operations, financial condition or cash flows would have been as a public company during the periods presented.

As a result of becoming a public company in the United States, we will become subject to additional regulatory compliance requirements, including Section 404 of the Sarbanes-Oxley Act.

As a foreign private issuer listed on the NYSE, we will incur legal, accounting and other expenses that we did not previously incur. We will be subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the listing requirements and other applicable securities rules and regulations, as well as the U.S. Foreign Corrupt Practices Act. Compliance with these rules and regulations will increase our legal and financial compliance costs, make some activities more difficult, time consuming or costly and increase demand on our systems and resources. The Exchange Act requires that, as a public company, we file or furnish annual and certain other reports with respect to our business, financial condition and results of operations. We are currently evaluating these rules and regulations and cannot predict or estimate the amount of additional costs we may incur or the timing of such costs. These rules and regulations are often subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We cannot predict or estimate the amount of additional costs we may incur as a result of becoming a public company or the timing of such costs. Any changes we make to comply with these obligations may not be sufficient to allow us to satisfy our obligations as a public company on a timely basis, or at all. These reporting requirements, rules and regulations, coupled with the increase in potential litigation exposure associated with being a public company, could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors or board committees or to serve as executive officers, or make it more difficult or expensive for us to obtain certain types of insurance, including directors’ and officers’ insurance, on acceptable terms.

Effective internal control over financial reporting is necessary for us to provide reliable financial reports. Effective internal controls, together with adequate disclosure controls and procedures, are designed to prevent or detect material misstatement due to fraud or error and to provide reasonable assurance as to the reliability of financial reporting. Deficiencies in our internal controls may adversely affect our management’s ability to record, process, summarize and report financial data on a timely basis. As a public company, we will be required by Section 404 of the Sarbanes-Oxley Act to include a report of management’s assessment on our internal control over financial reporting and, beginning with our annual report for the year ending December 31, 2025, compliance with Section 404 of the Sarbanes-Oxley Act will significantly increase our compliance costs and management’s attention may be diverted from other business concerns, which could adversely affect our financial performance. We may need to hire more team members in the future or engage outside consultants to comply with these requirements, which would further increase expenses. If we fail to comply with the applicable requirements of the Sarbanes-Oxley Act in the required timeframe, we may be subject to sanctions, investigations or other enforcement actions by regulatory authorities, including the SEC.

Prior to this offering, neither we nor our independent registered public accounting firm were required to deliver an opinion on the effectiveness of our internal control over financial reporting. We, and our independent registered public accounting firm, were not required to perform an evaluation of our internal control over financial reporting as of December 31, 2023 and December 31, 2022 in accordance with the provisions of the Sarbanes-Oxley Act.

 

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Although we may pay dividends to holders of our common shares, under Belgian law, our ability to do so is subject to the discretion of our board of directors and shareholders.

We currently intend to distribute dividends to our shareholders on a pro-rata basis. Although we intend to pay dividends pursuant to this policy, our common shares will have no contractual or other legal right to dividends. Any recommendation by our board of directors to the general shareholders’ meeting to declare and pay dividends and any decision by our board of directors to declare and pay interim dividends in the future will be made at its discretion and will depend on, among other things, our results of operations, financial condition, earnings, capital requirements, debt service obligations, restrictive covenants in our current and future debt agreements, industry practice, legal requirements (including those noted below under Belgian law), cash requirements, contractual restrictions and other factors that our board of directors may deem relevant. In addition, our ability to pay dividends is, and may continue to be, limited by covenants of our current and future indebtedness, and on our ongoing ability to generate cash from operations and access to the capital markets. Accordingly, we may not declare or make, or may have to reduce or eliminate, payments of any dividends. As a result, investors in this offering may not receive future dividends and the market price of our common shares may be adversely affected. See “Dividend Policy.”

Furthermore, pursuant to Belgian law, the calculation of amounts available for distribution to shareholders, as dividends or otherwise, must be determined on the basis of our statutory non-consolidated Belgian GAAP (as defined below) financial statements. In addition, in accordance with Belgian law and our articles of association, we must allocate each year an amount of at least 5% of our annual net profit under our statutory non-consolidated accounts (prepared in accordance with accounting principles generally accepted in Belgium (“Belgian GAAP”)) to a legal reserve until the reserve equals 10% of our share capital.

In addition, any dividends will generally be subject to Belgian withholding tax. See “Material Belgian Federal Income Tax Considerations” for a more detailed description of Belgian taxes which may be imposed on dividends.

We are a holding company with no operations of our own and, as such, we depend on our subsidiaries for cash to fund our operations and expenses, including future dividend payments, if any.

As a holding company, our principal source of cash flow will be distributions or payments from our operating subsidiaries. Therefore, our ability to fund and conduct our business, service our debt and pay dividends, if any, in the future will depend on the ability of our subsidiaries and intermediate holding companies to make upstream cash distributions or payments to us, which may be impacted, for example, by their ability to generate sufficient cash flow or limitations on the ability to repatriate funds whether as a result of currency liquidity restrictions, monetary or exchange controls or otherwise. Our operating subsidiaries and intermediate holding companies are separate legal entities, and although they are directly or indirectly wholly-owned and controlled by us, they have no obligation to make any funds available to us, whether in the form of loans, dividends or otherwise. To the extent the ability of any of our subsidiaries to distribute dividends or other payments to us is limited in any way, our ability to fund and conduct our business, service our debt and pay dividends, if any, could be harmed.

If securities or industry analysts do not publish or cease publishing research or reports about us, our business or our market, or if they change their recommendations regarding our common shares adversely, the market price and trading volume of our common shares could decline.

The trading market for our common shares is influenced by the research and reports that industry or securities analysts publish about us, our business, our market or our competitors. If any of the securities or industry analysts who cover us or may cover us in the future change their recommendation regarding our common shares adversely, or provide more favorable relative recommendations about our competitors, the price of our common shares would likely decline. If any securities or industry analyst who covers us or may cover us in the future were to cease coverage of us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause our share price or trading volume of our common shares to decline.

 

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We have broad discretion over the use of the net proceeds from this offering and may use them in ways with which you do not agree and in ways that may not enhance our operating results or the market price of our common shares.

Our board of directors and executive management will have broad discretion over the application of the net proceeds that we receive from this offering. We may spend or invest these proceeds in ways with which our shareholders disagree or that do not yield a favorable return, if at all. We intend to use the net proceeds from this offering, together with our existing cash resources as described in “Use of Proceeds.” However, our use of these proceeds may differ substantially from our current plans. Failure by our management to apply these funds effectively could harm our business, results of operations, cash flows, financial condition and/or prospects. Pending their use, we may invest the net proceeds from this offering in a manner that does not produce income or that loses value.

It may be difficult for investors outside Belgium to serve process on, or enforce foreign judgments against, us or our directors and executive management.

We are a Belgian public limited liability company. Less than a majority of the members of our board of directors are residents of the United States and all or a substantial portion of the assets of such non-resident persons are located outside the United States. As a result, it may not be possible for investors to effect service of process upon such persons or on us or to enforce against them or us a judgment obtained in U.S. courts. Original actions or actions for the enforcement of judgments of U.S. courts relating to the civil liability provisions of the federal or state securities laws of the United States are not directly enforceable in Belgium.

The United States and Belgium do not currently have a multilateral or bilateral treaty providing for reciprocal recognition and enforcement of judgments, other than arbitral awards, in civil and commercial matters. In order for a final judgment for the payment of money rendered by U.S. courts based on civil liability to produce any effect on Belgian soil, it is accordingly required that this judgment be recognized or be declared enforceable by a Belgian court in accordance with Articles 22 to 25 of the 2004 Belgian Code of Private International Law. Recognition or enforcement does not imply a review of the merits of the case and is irrespective of any reciprocity requirement. A U.S. judgment will, however, not be recognized or declared enforceable in Belgium, unless (in addition to compliance with certain technical provisions) the Belgian courts are satisfied of the following:

 

•

the effect of the recognition or enforcement is not manifestly incompatible with Belgian public policy;

 

•

the judgment did not violate the rights of defense;

 

•

the judgment was not rendered with the sole purpose of avoiding the application of the law applicable according to Belgian private international law, in a matter where parties cannot freely dispose of their rights;

 

•

the judgment is not subject to further recourse under the applicable laws in the state where the judgment was issued;

 

•

the judgment is not incompatible with a judgment rendered in Belgium or with an earlier judgment rendered abroad that might be recognized in Belgium;

 

•

the claim to which the judgment relates was not filed after a claim that is still pending between the same parties and concerning the same subject matter was filed in Belgium;

 

•

the Belgian courts did not have exclusive jurisdiction to rule on the matter;

 

•

the relevant U.S. court did not accept its jurisdiction solely on the basis of the presence of the plaintiff or the location of goods not directly linked to the dispute in the state in which the court is located; and

 

•

an issuance of the judgment that meets the requirement of authenticity under the applicable laws in the state where the judgment was rendered is provided; in case of a judgment in absentia, it can be shown that under the applicable laws in the state where the judgment was rendered, the invitation to appear in

 

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court was properly served on, or notified to, the defendant; a document can be produced showing that the judgment is, under the applicable laws in the state where it was rendered, enforceable and was properly served on the defendant.

In addition to recognition or enforcement, a judgment by a federal or state court in the United States against us may also serve as evidence in a similar action in a Belgian court if it meets the conditions required for the authenticity of judgments under the applicable laws in the state where the judgment was rendered. The findings of a federal or state court in the United States will not, however, be taken into account to the extent they would have consequences that are manifestly incompatible with Belgian public policy.

Based on the lack of a treaty as described above, U.S. investors may not be able to enforce against us or members of our board of directors or our executive management any judgments obtained in U.S. courts in civil and commercial matters, including judgments under the U.S. federal securities laws.

Our articles of association contain exclusive forum provisions for certain shareholder litigation matters, which would limit our shareholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, associates or shareholders or make the litigation of such disputes more costly for shareholders.

Our articles of association provide that, subject to limited exceptions, to the fullest extent permitted by law, Belgian courts will be the sole and exclusive forum for any dispute relating to corporate matters of the Company and the implementation of our articles of association between the Company, our shareholders, our directors, statutory auditors or liquidators. This provision does not apply to suits brought to enforce any duty or liability created by the Securities Act or Exchange Act, or rules and regulations thereunder.

Any person or entity purchasing or otherwise acquiring any interest in our common shares shall be deemed to have had notice of and consented to the choice of forum provisions of our articles of association. This choice of forum provision may limit a shareholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or any of our directors, officers, other associates or shareholders, which may discourage lawsuits with respect to such claims or impose additional costs or other burdens on such shareholder. Alternatively, if a court were to find the choice of forum provision contained in our articles of association to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, operating results and financial condition.

Risks Related to Certain Tax Matters

Changes in tax laws or unanticipated tax liabilities could adversely affect our effective income tax rate and profitability.

We are subject to income taxes in the United States, Greece and Belgium. Our effective income tax rate could be adversely affected in the future by a number of factors, including changes in the valuation of deferred tax assets and liabilities, changes in tax laws and regulations or their interpretations and application and the outcome of income tax audits in any of the jurisdictions in which we operate or are otherwise subject to tax.

A significant change in the United States, Greece or Belgian tax law, or that of other countries where we may operate or have a presence, may materially and adversely impact our income tax liability, provision for income taxes and effective tax rate. We regularly assess all of these matters to determine the adequacy of our income tax provision, which is subject to significant judgment.

In the ordinary course of our business, there are many transactions and calculations where the ultimate tax determination is uncertain. Although we believe our tax estimates are reasonable, the final outcome of tax audits and related litigation could be materially different than that reflected in our historical income tax provisions and accruals. There can be no assurance that the resolution of any audits or litigation will not have an adverse effect on future operating results.

 

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The Organisation for Economic Cooperation and Development (the “OECD”) is conducting a project focused on base erosion and profit shifting in international structures, which seeks to establish certain international standards for taxing the worldwide income of multinational companies. In addition, the OECD is working on a “BEPS 2.0” initiative, which is aimed at (i) shifting taxing rights to the jurisdiction of the consumer and (ii) ensuring all companies pay a global minimum tax. In December 2022, the member states of the European Union unanimously voted to adopt the OECD’s minimum tax rules and phase them into national law, and in February 2023 the OECD released technical guidance on the global minimum tax which was agreed by consensus of the BEPS 2.0 Pillar Two signatory jurisdictions. Under the European Union’s minimum tax directive (the “EU Directive 2022/2523”), member states are to adopt domestic legislation implementing the minimum tax rules effective for periods beginning on or after December 31, 2023, with the “under-taxed profit rule” to take effect for periods beginning on or after December 31, 2024. Belgium and other countries where Titan Group is active, have adopted the BEPS 2.0 rules and as a result, these rules will impact Titan Group going forward. As a result of these developments, the tax laws relevant to our operations and cashflow could change on a prospective or retroactive basis, and any such changes could increase our liabilities for taxes, interest and penalties, and therefore could harm our business, cash flows, results of operations and financial position. Belgium implemented EU Directive 2022/2523 into its national legislation with the law of December 19, 2023. This law has entered into effect as from January 1, 2024. The law of May 12, 2024 has further provided for some technical corrections to these rules.

In August 2022, the United States passed IRA, which imposed, among other things, a corporate alternative minimum tax on book income on certain large U.S. corporations, including certain U.S. subsidiaries of certain large multinational corporate groups, and a 1% excise tax on net stock repurchases by certain publicly traded corporations, including publicly-traded non-U.S. corporations in certain circumstances. These provisions became effective on January 1, 2023. Although we do not currently believe that the IRA will have a material impact on our consolidated financial statements, the full effects of these rules and other provisions of the IRA on us are uncertain until further regulations and guidance from the U.S. Internal Revenue Service (“IRS”) and the U.S. Department of the Treasury (“U.S. Treasury”) are released.

If a U.S. Holder is treated as owning at least 10% of our common share capital, such holder may be subject to adverse U.S. federal income tax consequences.

If a U.S. Holder (as defined below under “Material U.S. Federal Income Tax Considerations”) is treated as owning, directly, indirectly or constructively, at least 10% of the value or voting power of our share capital, such U.S. Holder may be treated as a “United States shareholder” with respect to each “controlled foreign corporation” in our group, if any. Because of certain attribution rules, we and/or any non-U.S. subsidiary may be treated as a controlled foreign corporation. A United States shareholder of a controlled foreign corporation generally will be required to annually report and include in its U.S. taxable income, as ordinary income, its pro rata share of “Subpart F income,” “global intangible low-taxed income” and investments in U.S. property by controlled foreign corporations, whether or not we make any distributions to such United States shareholder. An individual United States shareholder generally would not be allowed certain tax deductions or foreign tax credits that would be allowed to a corporate United States shareholder with respect to a controlled foreign corporation. A failure by a United States shareholder to comply with its reporting obligations may subject the United States shareholder to significant monetary penalties, loss of foreign tax credits and may extend the statute of limitations with respect to the United States shareholder’s U.S. federal income tax return for the year for which such reporting was due. We cannot provide any assurances that we will assist investors in determining whether we or any of our non-U.S. subsidiaries are controlled foreign corporations for any given year or whether any investor is a United States shareholder with respect to any such controlled foreign corporations. We also cannot guarantee that we will furnish to United States shareholders information that may be necessary to comply with the aforementioned reporting and tax paying obligations. The IRS has provided limited guidance on situations in which investors may rely on publicly available information to comply with their reporting and tax paying obligations with respect to controlled foreign corporations. U.S. investors should consult their tax advisors regarding the potential application of these rules to their investment in our shares.

 

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U.S. Holders may suffer adverse tax consequences if we are characterized as a passive foreign investment company for U.S. federal income tax purposes.

We will be classified as a passive foreign investment company (a “PFIC”) for U.S. federal income tax purposes for any taxable year if either: (1) at least 75% of our gross income for the taxable year is “passive income” for purposes of the PFIC rules, or (2) at least 50% of the value (generally determined on the basis of a quarterly average) of our assets is attributable to assets that produce, or are held for the production of, passive income. Based on our financial statements and our expectations about the nature and amount of our income, assets and activities and the market value of our equity, we do not believe that we were a PFIC for our most recent taxable year, and we do not expect to become a PFIC for our current taxable year or in the foreseeable future. The determination of PFIC status, however, is made annually, at the end of each taxable year, and is dependent upon a number of factors, some of which are beyond our control, including the relative values of our assets and subsidiaries, and the amount and type of our income. As a result, there can be no assurance that we will not be a PFIC for our current taxable year or any subsequent year or that the IRS will agree with our conclusion regarding PFIC status and would not successfully challenge our position. U.S. Holders (as defined in “Material U.S. Federal Income Tax Considerations”) should consult their tax advisors about the potential application of the PFIC rules to their investment in the common shares. For further discussion, see “Material U.S. Federal Income Tax Considerations—Passive Foreign Investment Company Status.”

 

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains “forward-looking statements,” as that term is defined in the U.S. federal securities laws, concerning our business, operations and financial performance and condition, as well as our plans, objectives and expectations for our business operations and financial performance and condition. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “aim,” “anticipate,” “assume,” “believe,” “contemplate,” “continue,” “could,” “due,” “estimate,” “expect,” “goal,” “commit,” “commitment,” “intend,” “may,” “objective,” “plan,” “predict,” “potential,” “positioned,” “pioneer,” “seek,” “should,” “target,” “will,” “would” and other similar expressions that are predictions of or indicate future events and future trends, or the negative of these terms or other comparable terminology.

Before making a decision to purchase our common shares, you should carefully consider all of the factors identified in this prospectus that could cause actual results to differ from these forward-looking statements. Such factors include, among other things:

 

•

increases in the cost or fluctuations in the availability of labor, fuel and energy, raw materials and other production inputs;

 

•

fluctuations in energy, fuel prices and transportation costs changes in prices for or availability of commodities, labor or other production inputs;

 

•

increases in market demand for cement substitutes;

 

•

impacts of climate change and regulations intended to address climate change;

 

•

fluctuations in public spending for infrastructure and large-scale projects, construction levels and urbanization trends;

 

•

the timing or likelihood of regulatory approvals, licenses and permits, as well as delays in construction projects;

 

•

our ability to protect our intellectual property, the confidentiality of our know-how, trade secrets, technology and other proprietary information;

 

•

regulatory developments in the United States, Europe and other jurisdictions, including those relating to the protection of the environment, health and safety;

 

•

our expectations about market trends;

 

•

our ability to accurately forecast demand for our products and manage our inventory;

 

•

developments relating to our competitors and our industry, including demand for cement substitutes;

 

•

our ability to effectively manage our anticipated growth;

 

•

our ability to attract and retain key management and other qualified personnel;

 

•

union disputes and other employee relations issues;

 

•

our ability to realize the anticipated benefits of strategic investment in research and development, digitalization and logistical capabilities;

 

•

our expected use of proceeds of this offering;

 

•

the future trading price of our common shares and impact of securities analysts’ reports on these prices;

 

•

the risk that an active, liquid trading market for our common shares may not develop or that the market for our common shares may be volatile;

 

•

increased costs and regulatory burdens resulting from being a public company listed on the NYSE following this offering;

 

69

•

our ability to operate as a standalone public company after the Reorganization Transactions;

 

•

conflicts of interest and disputes arising between Titan Cement International and us that could be resolved in a manner unfavorable to us;

 

•

our ability to remediate the identified material weaknesses in our internal control over financial reporting; and

 

•

other risks and uncertainties, including those listed under the caption “Risk Factors.”

We caution you that the foregoing list does not contain all of the forward-looking statements made in this prospectus.

You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this prospectus primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors, including those described above, in “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and elsewhere in this prospectus. Moreover, we operate in a competitive environment, and new risks and uncertainties may therefore emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this prospectus. We cannot guarantee that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.

Neither we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. Moreover, the forward-looking statements made in this prospectus relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this prospectus to reflect events or circumstances after the date of this prospectus or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this prospectus, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely upon these statements.

The forward-looking statements contained in this prospectus are excluded from the safe harbor protection provided by the Private Securities Litigation Reform Act of 1935 and Section 27A of the Securities Act of 1933, as amended (the “Securities Act”).

You should carefully consider the “Risk Factors” and subsequent public statements, or reports filed with or furnished to the SEC, before making any investment decision with respect to our securities. If any of these trends, risks or uncertainties actually occurs or continues, our business, financial condition or operating results could be materially adversely affected, the trading prices of our securities could decline, and you could lose all or part of your investment. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by this special note. Additionally, our discussion of various information, including ESG matters, both here and in other locations is information by various standards and the interests of various stakeholders. As such, not all such information may be material and references to “materiality” and any related assessment of ESG “materiality” may differ from the definition applicable for relevant reporting purposes.

 

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USE OF PROCEEDS

We estimate that the net proceeds from the sale of 9,000,000 common shares that we are selling in this offering will be approximately $125.7 million, based on an initial public offering price of $16.00 per share, after deducting the estimated underwriting discounts and commissions and estimated offering expenses paid and payable by us.

The principal purposes of selling our common shares in this offering are to increase our financial flexibility, obtain additional capital, to create a public market for our common shares and to facilitate our future access to the public equity markets. We have not quantified or allocated any specific portion of the net proceeds for any particular purpose. We anticipate that we will use the net proceeds from this offering for capital expenditures and other general corporate purposes, including to fund investments in technologies, for working capital to fund our growth strategies described elsewhere in this prospectus and to pursue strategic acquisitions that complement our business, although we have no present commitments, agreements or understandings to enter into any such transactions.

The amounts and timing of any expenditures will vary depending on the amount of cash generated by our operations, competitive and technological developments and the rate of growth, if any, of our business. Accordingly, our management will have significant flexibility in applying the net proceeds from this offering, and investors will be relying on the judgment of our management regarding the application of these net proceeds. Pending the uses described above, we intend to invest the net proceeds from this offering in short-term, interest-bearing obligations, investment-grade instruments, certificates of deposit or direct or guaranteed obligations of the U.S. government. The goal with respect to the investment of these net proceeds will be capital preservation and liquidity so that these funds are readily available to fund our operations.

We will not receive any proceeds from the sale of common shares by the selling shareholder in the offering, including any shares sold by the selling stockholders pursuant to the underwriters’ option to purchase additional shares.

 

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DIVIDEND POLICY

We currently intend to pay quarterly dividends of $0.04 per share to our shareholders on a pro-rata basis. Any recommendation by our board of directors to the general shareholders’ meeting to declare and pay dividends and any decision by our board of directors to declare and pay interim dividends in the future will be made at its discretion and will depend on, among other things, our results of operations, financial condition, earnings, capital requirements, debt service obligations, restrictive covenants in our current and future debt agreements, industry practice, legal requirements (including those noted below under Belgian law), cash requirements, contractual restrictions and other factors that our board of directors may deem relevant. In addition, our ability to pay dividends is, and may continue to be, limited by covenants of our current and future indebtedness, and on our ongoing ability to generate cash from operations and access to the capital markets. Accordingly, we may not declare or make, or may have to reduce or eliminate, payments of any dividends. Investors should not purchase our common shares with the expectation of receiving cash dividends.

Furthermore, we have sufficient issue premium that allows us to retain the possibility of carrying out a consistent distribution policy, through the repayment of (part) of the issue premium per common share (which can be decided upon by our general meeting subject to a simple majority). Any recommendation by our board of directors to the general shareholders’ meeting to repay (part of) the issue premium, is contingent on the factors as set out above.

All of the common shares offered by this prospectus will have the same dividend rights as all of our other outstanding common shares. In general, distributions of dividends proposed by our board of directors require the approval of our shareholders at a shareholders’ meeting, although our board of directors may declare interim dividends without shareholder approval, subject to the terms and conditions of the Belgian Code on Companies and Associations.

Our ability to distribute dividends in the future is also subject to availability of sufficient distributable profits as defined under Belgian law on the basis of our stand-alone statutory accounts prepared in accordance with Belgian GAAP. In particular, dividends can only be distributed if following the declaration and issuance of the dividends the amount of our net assets on the date of the closing of the last financial year as follows from the statutory non-consolidated financial statements (i.e., summarized, the amount of the assets as shown in the balance sheet, decreased with provisions and liabilities, all in accordance with Belgian accounting rules, and, save in exceptional cases, to be mentioned and justified in the notes to the annual accounts, decreased with the non-amortized costs of incorporation and extension and the non-amortized costs for research and development), does not fall below the amount of the paid-up capital (or, if higher, the issued capital), increased with the amount of non-distributable reserves (which include, as the case may be, the unamortized part of any revaluation surpluses).

In addition, pursuant to Belgian law and our articles of association, we must allocate an amount of 5% of our Belgian GAAP annual net profit to a legal reserve in its stand-alone statutory accounts, until the legal reserve amounts to 10% of our share capital. Our legal reserve currently does not meet this requirement nor will it meet the requirement at the time of the completion of this offering, as it is still being formed and as we have not yet allocated any results for Titan America (which is a recently incorporated company). Accordingly, 5% of our Belgian GAAP annual net profit during future years will need to be allocated to the legal reserve, further limiting our ability to pay out dividends to our shareholders.

For information regarding the Belgian withholding tax applicable to dividends and related U.S. reimbursement procedures, see “Material Belgian Federal Income Tax Considerations.”

 

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CAPITALIZATION

The following table sets forth our cash and cash equivalents and capitalization as of September 30, 2024:

 

•

on an actual basis;

 

•

on an as adjusted basis to give effect to:

 

•

the Contribution effected prior to the completion of this offering.

 

•

the 10 for 1 split of our common shares effected prior to the completion of this offering.

 

•

the issuance and sale by us of 9,000,000 common shares in this offering at an initial public offering price of $16.00 per share, after deducting underwriting discounts and commissions and estimated offering expenses paid and payable by us and the application of the net proceeds from this offering as described in “Use of Proceeds.”

 

•

the declaration and payment on October 25, 2024 of a $51.6 million return of capital to Titan Cement International. The return of capital was funded through a combination of drawdowns on short-term third party and short-term and long-term related party credit facilities.

The as adjusted information set forth in the table below is illustrative only and will be adjusted based on the actual initial public offering price and other terms of this offering determined at pricing. You should read this information together with our audited annual consolidated financial statements, and the accompanying notes thereto appearing elsewhere in this prospectus and the sections titled “Prospectus Summary—Summary Historical Consolidated Financial Information” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The following amounts are in millions, except per share data.

 

		As of September 30, 2024
		Actual				As Adjusted
		(in thousands)
Cash and Cash Equivalents(1)		$	12,149				139,897
Debt:
Short-term borrowings, including accrued interest(3)			141,816				175,816
Long-term borrowings(3)			227,858				245,449
Lease liabilities (current and non-current)			69,516				69,516
Total Debt		$	439,190				490,781
Stockholders’ equity:
Common stock(1)(2)			25,419				1,843,625
Share premium(1)(2)(3)			168,605				928,926
Capital reserves			4,039				4,039
Retained earnings(1)			560,269				555,878
Common control reserve(2)			—				(2,497,498	)
Accumulated other comprehensive income/ (loss)			4,330				4,330
Total stockholders’ equity		$	762,662				839,300
Total Capitalization		$	1,201,852				1,330,081

 

(1)

The initial public offering proceeds after deducting the estimated underwriting discounts and commissions and estimated offering costs paid and payable by us is $125.7 million. Our total estimated offering costs, excluding estimated underwriting discounts and commissions, of $11.1 million payable by us consist of $4.2 million related to the primary offering and $6.9 million related to the secondary offering. As of September 30, 2024, $3.7 million of offering costs related to the primary and secondary offering had been incurred, of which $2.1 million was paid. As of September 30, 2024, $1.1 million of the offering costs incurred were capitalized and $2.6 million of the offering costs incurred were expensed.

 

The following adjustments were made within stockholders’ equity:

 

•

Common stock was adjusted by $90.0 million to reflect the $10.00 derived value of TASA’s common shares multiplied by the issuance and sale of 9,000,000 common shares in this offering,

 

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•

Share premium was adjusted by $42.6 million reflecting an issue premium of $6.00 multiplied by 9,000,000 common shares, the number of common shares issued in this offering, less estimated underwriting discounts and commissions of $7.2 million and estimated offering costs related to the primary offering of $4.2 million,

 

•

Retained earnings was adjusted by $4.4 million to reflect the offering costs related to the secondary offering that were incurred after September 30, 2024.

 

(2)

Adjusted to give effect to the Contribution under which, prior to the date of this prospectus, Titan Cement International contributed the 1,734,440 shares it held in Titan Atlantic, representing 100% of the equity in Titan Atlantic, to TASA in exchange for 175,342,465 common shares of TASA. The Contribution was immediately preceded by a share split of TASA’s 2,000 then-current common shares at a 10:1 ratio. As a result, the following adjustments were recorded within stockholders’ equity:

 

•

Common stock was adjusted by $1,728.2 million to reflect the $10.00 derived value of TASA’s common shares multiplied by common shares outstanding;

 

•

Share premium was adjusted by $769.3 million to reflect an issue premium multiplied by the number of common shares issued by TASA in the Contribution, less the value of TASA’s retained earnings; and

 

•

A common control reserve of $2,497.5 million was established within equity to adjust total stockholder’s equity balance to the carrying value of total stockholder’s equity immediately prior to the Contribution.

 

In addition, after the Contribution of Titan Atlantic to TASA, on January 1, 2025, Titan America LLC divested its STET segment in a sale for cash, to be settled no later than January 31, 2025, to Titan Cement Netherlands B.V., a wholly-owned subsidiary of Titan Cement International, which is outside the scope of this offering. The STET divestiture is not included as an adjustment to the above table as it is immaterial to the results of operations, financial position and cash flows of TASA.

 

(3)

Adjusted to reflect the declaration and payment on October 25, 2024 of a $51.6 million return of capital to Titan Cement International. The return of capital was funded through a combination of drawdowns on short-term third party (approximately $27.0 million) and short-term and long-term related party (approximately $7.0 million and $17.6 million, respectively) credit facilities.

 

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DILUTION

If you invest in our common shares in this offering, your interest will be immediately diluted to the extent of the difference between the initial public offering price per share of our common shares in this offering and our pro forma as adjusted net tangible book value per share of our common shares upon the completion of this offering.

As of September 30, 2024, our net tangible book value was approximately $510.7 million, or approximately $2.91 per share.

As of September 30, 2024, our pro forma net tangible book value was approximately $459.1 million, or approximately $2.62 per share. Pro forma net tangible book value represents the amount of our total tangible assets less our total liabilities, after giving effect to the Contribution, the 10 for 1 split of our common shares, the filing and effectiveness of our articles of association and return of capital of $51.6 million to Titan Cement International. After giving effect to the sale of common shares in this offering at an initial public offering price of $16.00 per share and after deducting estimated underwriting discounts and commissions and estimated offering expenses paid and payable by us, our pro forma as adjusted net tangible book value as of September 30, 2024 would have been approximately $587.3 million, or approximately $3.19 per share. This represents an immediate dilution (i.e., the difference between the offering price and the pro forma as adjusted net tangible book value after this offering) to new investors participating in this offering of $12.81 per share.

The following table illustrates the per share dilution to new investors participating in this offering:

 

Initial public offering price per share						$	16.00
Historical net tangible book value per share as of September 30, 2024		$	2.91
Increase (decrease) per common share attributable to the pro forma adjustments described above			(0.29	)
Pro forma net tangible book value per share as of September 30, 2024			2.62
Increase per share attributable to new investors in this offering			0.57
Pro forma as adjusted net tangible book value per share						$	3.19
Dilution per share to new investors in this offering(1)						$	12.81

 

(1)	Dilution is determined by subtracting pro forma as adjusted net tangible book value per share from the initial public offering price paid by a new investor.

The following table summarizes the pro forma as adjusted basis as of September 30, 2024, the total number of common shares owned by existing holders and to be owned by the new investors in this offering, the total consideration paid, and the average price per share paid by our existing holders and to be paid by the new investors in this offering at $16.00, calculated before deducting estimated discounts and commissions and offering expenses:

 

		Shares purchased								Total Consideration								Average Price
		Number				Percent				Amount				Percent
Existing holders			175,362,465				95	%			3,200,199,986				96	%		$	18.25
New investors in this offering			9,000,000				5	%			144,000,000				4	%		$	16.00
Total			184,362,465				100	%			3,344,199,986				100	%

Sales by the selling shareholder in this offering will reduce the number of common shares held by existing holders to 160,362,465, or approximately 87% of the total common shares outstanding after this offering, which will increase the number of shares held by new investors to 24,000,000, or approximately 13% of the total common shares outstanding after this offering.

 

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of the financial condition and results of operations of Titan America should be read together with our audited consolidated financial statements as of December 31, 2023 and 2022 and for the years ended December 31, 2023, 2022 and 2021, and our unaudited interim condensed consolidated financial statements as of September 30, 2024 and for the nine months ended September 30, 2024 and 2023, in each case together with related notes thereto, included elsewhere in this prospectus. The discussion and analysis should also be read together with the sections entitled “Business,” and “Risk Factors.” The following discussion contains forward-looking statements that reflect future plans, estimates, beliefs and expected performance. The forward-looking statements are dependent upon events, risks and uncertainties that may be outside of our control. Our actual results may differ significantly from those projected in the forward-looking statements. Factors that might cause future results to differ materially from those projected in the forward-looking statements include, but are not limited to, those discussed in the sections entitled “Risk Factors” and “Special Note Regarding Forward-Looking Statements” included elsewhere in this prospectus. Certain total amounts may not sum due to rounding.

Overview

Titan America is a leading vertically integrated, multi-regional manufacturer and supplier of heavy building materials and services operating primarily on the Eastern Seaboard of the United States (the “Eastern Seaboard”). We are a leading provider of building materials that contribute to lower carbon emissions than traditional building materials and/or beneficial reuse of waste materials. We are a leading provider of heavy building materials in Florida and the Mid-Atlantic. We serve markets that benefit from population growth, economic growth and technology and innovation trends that are among the strongest in the United States.

We have built what we believe is a unique and differentiated building materials platform in the markets we serve. Today, our manufacturing, logistics and customer support capabilities span across critical building materials and products, including cement and SCMs, aggregates, ready-mix concrete, concrete block and other ancillary products. Additionally, we believe that our market leadership in lower carbon cement and green concrete solutions positions us to benefit from growing demand for building materials that contribute to lower carbon emissions. We believe our vertically integrated business model and continued investment in our extensive logistical capabilities have enabled us to grow with our diverse customer base across infrastructure, residential and non-residential end markets. By leveraging these competitive advantages across our two reportable segments, the Mid-Atlantic and Florida, we believe that we are in a strong position to drive meaningful growth and enhanced profitability into the future.

Our Reportable Segments

Due to the regional nature of our business, we report our operating results in two reportable segments: Florida and Mid-Atlantic. We run our operations nimbly allowing us to pivot resources to markets we support with the greatest demand based on market conditions.

Florida Reportable Segment

Our Florida reportable segment consists of our cement, aggregates, ready-mix concrete, concrete block and fly ash operations within the State of Florida. We currently operate one cement plant, three mines, 40 ready-mix locations with 45 batch plants, eight concrete block locations with 13 production lines, two fly ash facilities and one multi-product marine import terminal along with related logistics infrastructure.

 

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Mid-Atlantic Reportable Segment

Our Mid-Atlantic reportable segment consists of our cement, aggregates, ready-mix concrete and fly ash operations throughout the Mid-Atlantic region, most concentrated in Virginia, North Carolina, South Carolina, New York and New Jersey, capable of serving surrounding states such as Maryland, West Virginia, Kentucky, Tennessee, Pennsylvania, Ohio and Indiana areas with fly ash. We currently operate one cement plant, four mines, 42 ready-mix locations with 47 batch plants, along with related logistics infrastructure and import terminals.

Basis of Presentation

Our annual consolidated financial statements included elsewhere in this prospectus are prepared in accordance with International Financial Reporting Standards (“IFRS Accounting Standards”) as issued by the International Accounting Standards Board (“IFRS”). The definition of IFRS also encompasses all valid International Accounting Standards, as well as all interpretations of the International Financial Reporting Interpretations Committee, including those formally issued by the Standing Interpretations Committee. These financial statements have been prepared under the historical cost convention, except for certain financial assets and liabilities (including derivative financial instruments) and defined benefit pension plan assets, which are measured at fair value.

Our consolidated financial statements included elsewhere in this prospectus present the historical results of operations, financial position and cash flows of Titan Atlantic and its consolidated subsidiaries, including Titan America LLC and its subsidiaries, prior to the Reorganization Transactions. Historical earnings per share have been retrospectively presented to reflect the capital structure following the Contribution. Titan America’s STET segment is included in the Company’s historical operations for the periods presented. For the fiscal year ended December 31, 2023, the STET segment generated external segment revenue of $2.0 million and segment adjusted EBITDA of $(6.4 million). For the nine months ended September 30, 2024, the STET segment generated external segment revenue of $1.2 million and segment adjusted EBITDA of ($4.4 million). See “Prospectus Summary—The Reorganization Transactions.”

All references to “tons” in this Management’s Discussion and Analysis of Financial Condition and Results of Operations refer to short-tons, as defined in the relevant context.

Financial Metrics and Financial Highlights

The following table presents a summary of financial metrics for the nine months ended September 30, 2024 and 2023, as well as for the fiscal years ended December 31, 2023, 2022 and 2021.

 

		Nine Months Ended								Years Ended
		September 30,								December 31,
($ in thousands)		2024				2023				2023				2022				2021
Revenue		$	1,244,578			$	1,192,464			$	1,591,601			$	1,364,146			$	1,152,417
Operating income		$	201,229			$	169,568			$	225,636				97,042			$	94,175
Net income		$	129,546			$	109,800			$	155,244			$	62,721			$	59,221
Adjusted EBITDA(1)		$	286,878			$	241,136			$	328,373			$	193,097			$	177,585
Net cash provided by operating activities		$	197,143			$	142,415			$	227,125			$	178,374			$	146,703
Free Cash Flow(1)		$	83,796			$	50,602			$	108,522			$	50,365			$	75,934
Return on Average Capital Employed(2)			22.3	%			18.1	%			20.7	%			9.6	%			9.5	%
Total Debt(3)		$	439,190							$	409,413			$	462,093
Net Debt(1)(3)		$	427,041							$	387,377			$	432,252
Ratio of Total Debt to Net Income(3)			2.5 to 1.0								2.6 to 1.0				7.4 to 1.0
Ratio of Net Debt to Adjusted EBITDA(1)(3)			1.1 to 1.0								1.2 to 1.0				2.2 to 1.0

 

(1)

Adjusted EBITDA, Free Cash Flow, Net Debt and Ratio of Net Debt to Adjusted EBIDA are non-IFRS financial measures we use to measure the performance, level of indebtedness and liquidity of our business. For the definition of these measures and a reconciliation to the most directly comparable financial measure calculated and presented in accordance with IFRS please see “—Non-IFRS Measures” below.

 

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(2)

Capital employed is defined as total stockholders’ equity plus short-term debt, long-term debt, short-term lease liabilities and long-term lease liabilities. Average capital employed is calculated by taking the average of capital employed values at the beginning, mid-point and end of the latest twelve-month period. Return on Average Capital Employed (“ROACE”) is calculated by dividing operating income by average capital employed.

(3)

Total Debt, Ratio of Total Debt to Net Income, Net Debt and Ratio of Net Debt to Adjusted EBITDA are balance sheet metrics and are presented as of the last day of each fiscal period. The Ratio of Total Debt to Net Income for the interim periods measures Total Debt at period end to Net Income for the trailing twelve months for the periods presented. The Ratio of Net Debt to Adjusted EBITDA for the interim periods measures Net Debt at period end to Adjusted EBITDA for the trailing twelve months for the periods presented.

The principal factors in evaluating our financial condition and operating results for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023, are:

 

•

Revenue increased $52.1 million, or 4%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily as a result of increases in product pricing. Revenue in both reportable segments grew moderately with our Florida and Mid-Atlantic segment external revenue rising by $33.1 million, or 5%, and $19.4 million, or 4%, respectively, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. Ready-mix concrete and concrete block revenues grew strongly, rising by $41.3 million and $15.9 million, respectively, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. Fly ash saw moderate revenue growth of $2.1 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.

 

•

Average external sales prices increased by 3% in cement, 10% in aggregates, 6% in ready-mix concrete, 3% in concrete block and 10% in fly ash for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.

 

•

External sales volumes increased by 2% in ready-mix concrete, 12% in concrete block and 4% in fly ash and declined by 3% in cement and 15% in aggregates for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.

 

•

Operating income increased by $31.7 million, or 19%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, as a result of the $52.1 million growth in revenue, which more than offset the rises in general and administrative expenses of $17.2 million, and selling expenses of $3.6 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.

 

•

Net income increased $19.7 million, or 18%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily driven by strong improvement in operating income offset by a foreign exchange loss of $7.5 million for the nine months ended September 30, 2024 compared to a foreign exchange gain of $2.0 million for the nine months ended September 30, 2023, and a higher income tax expense resulting from higher income before income taxes, partially offset by a slightly lower effective tax rate.

 

•

Adjusted EBITDA increased $45.7 million, or 19%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, as price improvements exceeded the impact of higher labor, distribution, repairs and maintenance and general and administrative expenses.

 

•

Net cash provided by operating activities increased to $197.1 million for the nine months ended September 30, 2024, compared to $142.4 million for the nine months ended September 30, 2023.

 

•

Free Cash Flow increased to $83.8 million for the nine months ended September 30, 2024, compared to $50.6 million for the nine months ended September 30, 2023.

 

•

Total Debt increased to $439.2 million and our Ratio of Total Debt to Net Income declined to 2.5 to 1.0 at September 30, 2024 compared to $409.4 million and 2.6 to 1.0 at December 31, 2023.

 

•

Net Debt increased to $427.0 million and our Ratio of Net Debt to Adjusted EBITDA declined to 1.1 to 1.0 at September 30, 2024 compared to $387.4 million and 1.2 to 1.0 at December 31, 2023.

 

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The principal factors in evaluating our financial condition and operating results for the fiscal year ended December 31, 2023, as compared to the fiscal December 31, 2022, are:

 

•

Revenue increased $227.5 million, or 17%, for the fiscal year ended December 31, 2023 compared to the fiscal year ended December 31, 2022, primarily as a result of increases in product pricing. Revenue in both reportable segments grew strongly with our Florida and Mid-Atlantic segment external revenue rising by $161.4 million, or 20%, and $66.4 million, or 12%, respectively, for the fiscal year ended December 31, 2023 compared to the fiscal year ended December 31, 2022. Cement, ready-mix concrete and concrete block revenues grew strongly, rising by $97.0 million, $98.7 million and $23.2 million, respectively, for the fiscal year ended December 31, 2023 compared to the fiscal year ended December 31, 2022. Aggregates and fly ash saw moderate revenue growth of $4.3 million and $4.1 million, respectively, for the year ended December 31, 2023 compared to the fiscal year ended December 31, 2022.

 

•

Average external sales prices increased by 13% in cement, 18% in aggregates, 18% in ready-mix concrete, 24% in concrete block and 10% in fly ash for the fiscal year ended December 31, 2023 compared to the fiscal year ended December 31, 2022.

 

•

External sales volumes increased by 3% in cement and 15% in fly ash but declined by 11% in aggregates, 1% in ready-mix concrete and 3% in concrete block for the fiscal year ended December 31, 2023 compared to the fiscal year ended December 31, 2022.

 

•

Operating income increased $128.6 million, or 133%, for the fiscal year ended December 31, 2023 compared to the fiscal year ended December 31, 2022, as a result of the $227.5 million growth in revenue, which more than offset the rises in cost of goods sold of $85.2 million, general and administrative expenses of $12.4 million, and selling expenses of $1.1 million for the fiscal year ended December 31, 2023 compared to the fiscal year ended December 31, 2022.

 

•

Net income increased $92.5 million, or 148%, for the fiscal year ended December 31, 2023 compared to the fiscal year ended December 31, 2022, primarily driven by strong improvement in operating income offset by higher income tax expense resulting from higher income before income taxes and a slightly higher effective tax rate.

 

•

Adjusted EBITDA increased $135.3 million, or 70%, for the fiscal year ended December 31, 2023 compared to the fiscal year ended December 31, 2022, as price improvements exceeded the impact of higher materials, labor, distribution, repairs and maintenance and general and administrative expenses.

 

•

Net cash provided by operating activities increased to $227.1 million for the fiscal year ended December 31, 2023, compared to $178.4 million for the fiscal year ended December 31, 2022.

 

•

Free Cash Flow increased to $108.5 million for the fiscal year ended December 31, 2023, compared to $50.4 million for the fiscal year ended December 31, 2022.

 

•

Total Debt decreased to $409.4 million and our Ratio of Total Debt to Net Income declined to 2.6 to 1.0 at December 31, 2023 compared to $462.1 million and 7.4 to 1.0 at December 31, 2022.

 

•

Net Debt decreased to $387.4 million and our Ratio of Net Debt to Adjusted EBITDA declined to 1.2 to 1.0 at December 31, 2023 compared to $432.3 million and 2.2 to 1.0 at December 31, 2022.

Non-IFRS Measures

Adjusted EBITDA

We define Adjusted EBITDA, which is a non-IFRS financial measure we use to measure the performance of our business, as net income before finance cost, net, income tax expense, depreciation, depletion and amortization, further adjusted to remove the impact of additional items such as (gain)/loss on disposal of fixed assets, asset impairment (recovery)/loss, foreign exchange (gain)/loss, net, derivative financial instrument (gain)/loss, net, fair value loss on sale of accounts receivable, net, share-based compensation and other non-recurring items, including certain IPO transaction costs associated with this offering. Net income is the IFRS measure most directly comparable to Adjusted EBITDA.

 

79

The table below presents our Adjusted EBITDA reconciled to net income for the periods indicated:

 

		Nine Months Ended September 30,								Years Ended December 31,
($ in thousands)		2024				2023				2023				2022				2021
Net income		$	129,546			$	109,800			$	155,244			$	62,721			$	59,221
Finance cost, net			18,835				19,156				22,244				19,078				21,856
Income tax expense			43,899				38,427				47,134				16,971				15,336
Depreciation, depletion and amortization			69,024				63,798				91,079				87,728				81,731
Loss on disposal of fixed assets			1,454				736				3,852				1,186				141
Asset impairment (recovery)/loss			—				—				(609	)			525				—
Foreign exchange loss/(gain), net			7,467				(1,970	)			11,981				(19,990	)			(28,835	)
Derivative financial instrument (gain)/loss, net			1,482				4,155				(10,967	)			18,534				25,915
Fair value loss on sale of accounts receivable, net			4,050				4,937				6,113				3,041				1,101
Share-based compensation			2,875				2,364				3,173				2,402				2,590
IPO transaction costs(1)			9,512				—				—				—				—
Other(2)			(1,266	)			(267	)			(871	)			901				(1,471	)
Adjusted EBITDA		$	286,878			$	241,136			$	328,373			$	193,097			$	177,585

 

(1)	In connection with this offering, we have incurred incremental expenses which primarily consist of consulting, legal, and accounting fees that are not indicative of our ongoing costs.

(2)	Other includes, but is not limited to, the impacts on provisions for long-term environmental rehabilitation costs, including provisions for quarry restoration, arising from changes in discount rates, recoveries from insurance claims and other exceptional (gains)/losses.

Free Cash Flow

Free Cash Flow is a non-IFRS financial measure used by management to assess liquidity and quantify the amount of net cash provided by operating activities remaining after deducting the net amount of cash invested to maintain and expand the tangible and intangible assets used to support our business. Free Cash Flow is comprised of net cash provided by operating activities adjusted by net payments for capital expenditures, which includes (i) investments in property, plant and equipment, (ii) investments in identifiable intangible assets and (iii) proceeds from the sale of assets, net of disposition costs.

The IFRS measure most directly comparable to Free Cash Flow is net cash provided by operating activities. Reconciliation of Free Cash Flow to its nearest IFRS measure is presented below:

 

 

		Nine Months Ended September 30,								Years Ended December 31,
($ in thousands)		2024				2023				2023				2022				2021
Net cash provided by operating activities		$	197,143			$	142,415			$	227,125			$	178,374			$	146,703
Adjusted by:
Investments in property, plant and equipment			(113,213	)			(91,989	)			(117,144	)			(125,374	)			(62,269	)
Investments in identifiable intangible assets			(333	)			35				(1,600	)			(2,896	)			(9,185	)
Proceeds from the sale of assets, net of disposition costs			199				141				141				261				685
Net Capital Expenditures			(113,347	)			(91,813	)			(118,603	)			(128,009	)			(70,769	)
Free Cash Flow		$	83,796			$	50,602			$	108,522			$	50,365			$	75,934

 

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Net Debt

Net Debt is a non-IFRS financial measure as it comprises the sum of short and long-term debt and short and long-term lease liabilities less cash and cash equivalents. Net Debt is used by management to assess our operating performance, financial condition and measure the effective level of indebtedness of the Company. Reconciliation of Net Debt to its nearest IFRS measures is presented below:

 

		As of September 30,				As of December 31,
($ in thousands)		2024				2023				2022
Short-term borrowings, including accrued interest		$	141,816			$	267,670			$	74,339
Long-term borrowings			227,858				76,262				320,167
Short-term lease liabilities			11,901				11,737				13,532
Long-term lease liabilities			57,615				53,744				54,055
Less:
Cash and cash equivalents			(12,149	)			(22,036	)			(29,841	)
Net Debt		$	427,041			$	387,377			$	432,252

Ratio of Net Debt to Adjusted EBITDA

The Ratio of Net Debt to Adjusted EBITDA is a non-IFRS financial measure derived by dividing Net Debt by Adjusted EBITDA. The Company considers the ratio of net debt to Adjusted EBITDA to be a performance measure providing relevant financial leverage information to management, investors and other users of the Company’s financial information. Reconciliations of Net Debt and Adjusted EBITDA to the nearest IFRS measures are presented above. The Company’s Ratio of Net Debt to Adjusted EBITDA, and the ratio of each of the most directly comparable measures to Net Debt and Adjusted EBITDA presented in accordance with IFRS as of the dates shown was as follows:

 

		As of Twelve Months Ended
		September 30,				December 31,
($ in thousands)		2024				2023				2022
IFRS:
Short-term borrowings, including accrued interest		$	141,816			$	267,670			$	74,339
Long-term borrowings			227,858				76,262				320,167
Short-term lease liabilities			11,901				11,737				13,532
Long-term lease liabilities			57,615				53,744				54,055
Total Debt		$	439,190			$	409,413			$	462,093
Net Income(1)			174,990				155,244				62,721
Ratio of Total Debt to Net Income			2.5	x			2.6	x			7.4	x
Non-IFRS:
Net Debt		$	427,041			$	387,377			$	432,252
Adjusted EBITDA(2)		$	374,115			$	328,373			$	193,097
Ratio of Net Debt to Adjusted EBITDA(3)			1.1	x			1.2	x			2.2	x

 

(1)	Represents trailing twelve months Net Income.

 

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(2)

Represents trailing twelve months Adjusted EBITDA. The Company includes Adjusted EBITDA for the twelve months ended September 30, 2024 in order to calculate the Ratio of Net Debt to Adjusted EBITDA as of September 30, 2024. The trailing twelve months Adjusted EBITDA is derived using other component periods included elsewhere in this prospectus. The reconciliation of Net income to Adjusted EBITDA for the trailing twelve months ended September 30, 2024 was as follows:

 

		Twelve Months Ended September 30,
($ in thousands)		2024
Net income		$	174,990
Finance cost, net			21,923
Income tax expense			52,606
Depreciation, depletion and amortization			96,305
Loss on disposal of fixed assets			4,570
Asset impairment (recovery)/loss			(609	)
Foreign exchange loss/(gain), net			21,418
Derivative financial instrument (gain)/loss, net			(13,640	)
Fair value loss on sale of accounts receivable, net			5,226
Share-based compensation			3,684
IPO transaction costs			9,512
Other			(1,870	)
Adjusted EBITDA		$	374,115

 

(3)	The Ratio of Net Debt to Adjusted EBITDA for the trailing twelve months represents Net Debt divided by Adjusted EBITDA for the trailing twelve months.

Non-IFRS financial measures, including Adjusted EBITDA, Free Cash Flow, Net Debt and Ratio of Net Debt to Adjusted EBITDA are utilized by the Company to provide additional insights into its financial and operational performance that may not be apparent from IFRS measures alone. These supplemental measures can aid in the comparability of the Company’s performance across different reporting periods by eliminating the effects of certain items that can vary significantly from one period to another, such as capital structure changes, non-operating items and other non-recurring or non-cash adjustments. Management finds these supplemental measures useful in assessing financial performance, operational efficiency, making strategic decisions and providing supplemental analysis of the Company’s ability to generate cash, service debt and fund investments.

However, these non-IFRS measures have limitations and should not be considered in isolation or as a substitute for the IFRS financial measures. One key limitation is the lack of standardization, which means they may be defined and calculated differently by other companies, potentially leading to reduced comparability. Additionally, these measures may exclude costs that are necessary to understand the Company’s overall financial performance. For instance, Adjusted EBITDA adjusts net income for certain items, but it is important to recognize that the Company may incur similar expenses in the future. Likewise, while Free Cash Flow indicates the cash which may be available for discretionary purposes, it does not account for non-discretionary expenditures such as debt service costs and income tax obligations. Net Debt provides insight into the net borrowing position, but it does not consider the liquidity and maturity profile of the underlying debt and cash and cash equivalents positions. The Ratio of Net Debt to Adjusted EBITDA provides insight into the Company’s ability to pay debts, but it does not consider all liabilities and can be sensitive to short term changes in operating performance.

Investors and analysts are encouraged to evaluate each of these adjustments and the reasons management considers them appropriate for supplemental analysis. It is also essential to be aware that the Company may modify the presentation of these non-IFRS measures in the future, and any such modification may be material. As a result, these measures may not be indicative of future performance and may not be comparable to similarly titled measures used by other companies, thereby diminishing their utility. In summary, while non-IFRS measures can provide valuable additional context, they should be used in conjunction with the most directly comparable IFRS financial measures to ensure a balanced and comprehensive analysis of the Company’s financial results.

 

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Components of Results of Operations

Revenue – Substantially all of the Company’s revenue is derived from sales of cement, fly ash, aggregates, ready-mix concrete and concrete block. Sales transactions result from customer requests received in response to Company quotes or negotiated purchase orders (collectively “Orders”). Orders specify products, contractual terms and conditions, estimated quantities, and pre-determined prices over established time periods. Once an Order is in place, the customer requests the delivery of specific products and volumes under the general terms and conditions contained therein.

Products remain the property of the Company until received by the customer, and the Company provides a warranty that the materials comply with the specifications contained in the Order. The contracts can generally be cancelled with or without cause at any time, with each party having responsibility for any rights and obligations accrued up to the time of termination. Each request by a customer under an Order produces a sales contract for the goods specified in such request. The Orders do not create enforceable rights or obligations on their own (an additional purchasing decision is required on the part of the customer). The warranties provided are assurance-type warranties and do not create separate performance obligations.

Revenue is primarily driven by factors such as construction activity levels, infrastructure development and urbanization trends, which influence the demand for our products. The construction industry’s health, influenced by economic conditions, interest rates and government spending on infrastructure, directly impacts our sales volumes. Additionally, regional market trends, including weather and seasonality trends, demographic shifts and the fiscal health of state and local governments, are closely monitored as they can significantly impact performance and vary between different geographic regions, such as the Florida and Mid-Atlantic reportable segments. Product pricing is influenced by supply/demand balances, product performance, reliability and service offerings.

Cost of goods sold – Cost of goods sold consists of all direct production and delivery costs and primarily includes material and inventory costs, payroll and employee-related expenses, energy and fuel costs, freight and distribution expenses, repairs and maintenance costs, taxes (other than income taxes), short-term rentals, risk insurance, depreciation, depletion and amortization and other miscellaneous costs.

Our cost of goods sold is directly affected by fluctuations in raw materials costs, labor costs and energy prices. As a result, our gross profit can be significantly affected by changes in the underlying costs if they are not recovered through corresponding changes in revenue.

Selling expense – Selling expense represents the expenses associated with personnel, services and overhead involved specifically in sales activities. Selling expenses include payroll and related costs, overhead, travel and entertainment and other miscellaneous selling costs.

General and administrative expense – General and administrative expense includes payroll and employee related expense, management fees, service contracts, office costs, bank fees, professional fees, depreciation and amortization and other related costs. As we transition to a public company, we estimate that our annual general and administrative expenses may increase solely as a result of the costs we expect to incur in establishing and maintaining Titan America, our Belgium-based holding company and the incremental compliance and reporting costs associated with being a public company – including increased internal labor costs and external professional fees. This increase is anticipated to negatively impact our profitability in the near term. Over the long term, we aim to manage these expenses to align with our growth and operational efficiencies.

Net impairment losses on financial assets – The Company assesses net impairment losses on financial assets such as trade receivables and derivative credit support payments, excluding derivatives at fair value through profit or loss, by estimating expected credit losses (“ECLs”). These ECLs represent the discounted difference between the contractual cash flows and the cash flows the Company anticipates receiving, using the asset’s original effective interest rate for discounting. For trade and other receivables, the Company employs a simplified approach, calculating lifetime expected credit losses to determine the appropriate allowance for impairment.

 

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Fair value loss on sale of accounts receivable, net – The Company recognizes a fair value loss when it sells its trade accounts receivable to a Special Purpose Entity (“SPE”) at a discount. This discount reflects the time value of money, credit risk and other factors affecting the collectability of the receivables. The Company acts as the servicer for these receivables, handling credit administration and collections and receives a servicing fee from the SPE. The fair value loss is calculated net of the interest earned on notes receivable from the SPE and the servicing fees paid to the Company. Although the Company has transferred substantially all of the credit risks associated with the accounts receivable sold to the SPE, the Company may face potential losses on its notes receivable from the SPE if credit losses on the sold receivables exceed certain thresholds.

Finance cost, net – Finance costs comprise interest expense on borrowings and leases, line of credit commitment fees, net interest costs on pension and other post-employment benefits, accretion expense on provisions and other related finance costs. Finance income includes interest earned on cash and cash equivalents and other short-term investments. The net amount represents total finance costs incurred less total finance income earned by the Company during the period.

Income/(loss) from associate – Income/(loss) from associate reflects the Company’s share of the results from its investment in Ash Venture LLC, which was dissolved on February 6, 2023.

Foreign exchange (loss)/gain, net – The Company recognizes foreign exchange gains and losses which arise from settling transactions and revaluation of monetary assets and liabilities in foreign currencies (including the Company’s Euro-denominated borrowings), using the prevailing spot rates. These translation differences, including those on non-monetary financial assets and liabilities, reflect the impact of currency fluctuations on the Company’s financial position and results of operations, with the U.S. Dollar being the functional currency for our consolidated financial statements.

Derivative financial instrument gain/(loss), net – The Company engages in derivative financial instruments, including cross-currency swaps, interest rate swaps and foreign exchange forwards, to manage its exposure to foreign currency and interest rate fluctuations. The derivatives are used to fix the U.S. Dollar cash flows associated with Euro denominated borrowings and to mitigate the impact of U.S. Dollar/Euro exchange rate variations on other short-term obligations. The net gain or loss on derivatives reflects the market conditions affecting the valuation of these financial instruments.

Income tax expense – The Company’s income tax expense reflects the sum of current taxes due and the effect of deferred taxes, which arise from temporary differences between the accounting and tax treatment of assets and liabilities. The effective tax rate results from applying the statutory tax rate and adjusting for differences in tax rates across the jurisdictions where the Company operates, as well as other permanent and temporary differences. Deferred tax assets are recognized for items expected to provide future tax benefits, while deferred tax liabilities are recorded for future tax obligations. The Company’s tax strategy includes considerations for repatriating international earnings and managing changes in tax legislation, such as the OECD Pillar Two Model Rules (“Pillar Two”) minimum effective tax rate in Belgium.

 

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