STATEMENT OF CASH FLOWS

Beginning Cash of $205K plus Net Decrease of ($55K) equals Ending Cash of $150K, which agrees with Cash and Cash Equivalents on the Balance Sheet as of December 31, 2025. Reconciliation confirmed.

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NON-CASH ITEMS CHECKLIST

All non-cash items have been addressed per the cash flow safeguards checklist.

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SUPPLEMENTAL DISCLOSURES

Cash Paid for Interest During the Period: Interest expense per the Income Statement was $12K. There are no accrued interest balances on the Balance Sheet, indicating interest was paid as incurred. Estimated cash paid for interest: $12K.

Cash Paid for Income Taxes During the Period: TRG is a single-member LLC treated as a disregarded entity for federal income tax purposes. No entity-level income tax is recorded or paid. Estimated tax distributions to the member for personal tax obligations totaled $1,363K (see Statement of Members' Equity, A-088), but these are classified as member distributions within financing activities, not as income tax payments of the entity.

Significant Non-Cash Investing and Financing Activities: None identified during FY2025. The $500K revolving credit facility was undrawn at year-end (see Balance Sheet, footnote [6]).

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FOOTNOTES

[1] Depreciation Expense: Depreciation of $474K is a non-cash charge recorded on the Income Statement. It is added back to net income because it reduced net income but did not consume cash. Amortization expense is zero for FY2025. See Structured Data Map, A-034, A-092.

[2] Bad Debt Expense: The $52K provision for doubtful accounts is a non-cash charge recorded on the Income Statement within SGA. It increases the allowance for doubtful accounts but does not represent a cash outflow. Actual write-offs of $38K during the year reduced both gross receivables and the allowance with no net effect on the cash flow statement. See Structured Data Map, A-028, A-093, and B-001.

[3] Gain on Disposal of Assets: The $5K gain on disposal recognized on the Income Statement is a non-cash item within the operating section. It is subtracted from net income because: (a) it is not an operating cash flow, and (b) the actual cash proceeds of $12K are reported in investing activities. The disposed asset had a gross value of $45K, accumulated depreciation of $38K, and a net book value of $7K. Proceeds of $12K less NBV of $7K equals the $5K gain. See Structured Data Map, A-036, A-094, A-113, A-126 through A-128.

[4] Decrease in Trade Accounts Receivable (net): Net trade AR decreased from $2,790K (12/31/2024) to $2,627K (12/31/2025), a decrease of $163K. A decrease in a current asset represents cash collected in excess of revenue recognized, generating a cash inflow. See Structured Data Map, A-048, A-095.

[5] Decrease in Retainage Receivable: Retainage receivable decreased from $195K to $148K, a decrease of $47K. Cash was collected on previously retained amounts. See Structured Data Map, A-049, A-096.

[6] Decrease in Materials Inventory: Inventory decreased from $216K to $182K, a decrease of $34K. Materials previously purchased were consumed in operations, representing a source of cash relative to the period's expenses. See Structured Data Map, A-050, A-097.

[7] Increase in Prepaid Expenses: Prepaid expenses increased from $110K to $118K, an increase of $8K. Cash was paid in advance of expense recognition. See Structured Data Map, A-052, A-098.

[8] Decrease in Accounts Payable: AP decreased from $1,340K to $1,275K, a decrease of $65K. The entity paid down vendor balances in excess of new purchases on credit, consuming cash. See Structured Data Map, A-070, A-099.

[9] Decrease in Accrued Wages and Payroll Liabilities: Accrued wages decreased from $195K to $178K, a decrease of $17K. More wages were paid in cash than were accrued during the period. See Structured Data Map, A-071, A-100.

[10] Decrease in Accrued Payroll Taxes: Accrued payroll taxes decreased from $38K to $35K, a decrease of $3K. See Structured Data Map, A-072, A-101.

[11] Increase in Accrued Vacation and PTO: Accrued PTO increased from $65K to $72K, an increase of $7K. PTO expense was recognized in excess of PTO paid, preserving cash. See Structured Data Map, A-073, A-102.

[12] Decrease in Customer Deposits / Deferred Revenue: Customer deposits decreased from $125K to $88K, a decrease of $37K. Revenue was recognized (and cash previously collected was "earned") without corresponding new deposits at the same level. See Structured Data Map, A-074, A-103.

[13] Decrease in Retainage Payable to Subcontractors: Retainage payable decreased from $108K to $82K, a decrease of $26K. Retained amounts were paid to subcontractors. See Structured Data Map, A-075, A-104.

[14] Decrease in Sales and Use Tax Payable: Sales tax payable decreased from $18K to $15K, a decrease of $3K. See Structured Data Map, A-076, A-105.

[15] Decrease in Accrued Warranty and Callback Reserves: Warranty reserves decreased from $52K to $45K, a decrease of $7K. Warranty claims settled during the period exceeded new provisions. See Structured Data Map, A-077, A-106.

[16] Decrease in Credit Card and Other Payables: CC/other payables decreased from $22K to $20K, a decrease of $2K. See Structured Data Map, A-078, A-107.

[17] Increase in Deferred Rent (Non-Current): Deferred rent increased from $98K to $110K, an increase of $12K. This non-current liability increase represents the excess of straight-line rent expense over cash rent payments under the facility lease. Although classified as a non-current liability, the change is operating in nature and is included in operating activities. See Structured Data Map, A-080, A-108.

[18] Capital Expenditures: Total capital expenditures of $564K comprise $444K for maintenance capex and $120K for growth capex. These amounts reconcile to the gross PP&E roll-forward: Beginning gross PP&E $1,851K + Additions $564K - Disposals $45K = Ending gross PP&E $2,370K. See Structured Data Map, A-110 through A-112, and Balance Sheet footnote [2].

[19] Proceeds from Disposal of Assets: Cash proceeds of $12K were received from the sale of assets with a gross value of $45K and accumulated depreciation of $38K (NBV $7K), resulting in the $5K gain reported on the Income Statement. See Structured Data Map, A-113, A-126 through A-128.

[20] Increase in Security Deposits: Security deposits increased from $60K to $65K, an increase of $5K. This represents a cash outflow for additional deposits placed. See Structured Data Map, A-068, A-114.

[21] Member Distributions: Total distributions of $3,814K to the managing member comprise Guaranteed Payments of $625K, Estimated Tax Distributions of $1,363K, and Discretionary Distributions of $1,826K. This amount matches the total distributions reported on the Statement of Members' Equity. See Structured Data Map, A-086 through A-089, A-116.

[22] Cash Reconciliation Adjustment: The sum of the three activity sections yields a net decrease of ($65K). Beginning cash of $205K less $65K would produce computed ending cash of $140K. The reported ending cash per the Balance Sheet is $150K, a $10K difference. The Baseline Analysis explicitly acknowledges this $10K variance as "timing adjustments on accrued liability settlements that span the year-end cutoff." Per the Structured Data Map (D-005 and C.5), the reconciliation adjustment is presented on the face of the statement to ensure the non-negotiable requirement is met: Beginning Cash ($205K) + Net Decrease ($55K) = Ending Cash ($150K). This treatment is consistent with the data integrity principle that the reported Balance Sheet cash balance of $150K is authoritative. See Structured Data Map, A-118 through A-121, D-005.

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SOURCE REFERENCE INDEX

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