Cardinal Infrastructure Group Inc. Income Taxes Disclosure

15. Income Taxes and Tax Receivable Agreement

The Company is subject to U.S. federal, state and local income taxes on its taxable income, including its allocable share of the taxable income of Cardinal Civil Contracting Holdings LLC (“OpCo”), and is taxed at the applicable corporate income tax rates. The Company’s actual effective tax rate is affected by its ownership percentage in OpCo, which will increase over time as continuing OpCo owners redeem or exchange their LLC interests for shares of PubCo's Class A common stock (together with cancellation of an equal number of Class B shares), or as the Company acquires LLC interests directly from such continuing OpCo owners.

Because the Company consolidates OpCo for financial reporting purposes, its consolidated effective tax rate will vary from period to period based on multiple factors, including changes in the Company’s ownership of OpCo, the geographic mix of earnings, changes in tax law, and differences in tax rates among jurisdictions. The Company’s income tax provision includes U.S. federal, state, local and foreign income taxes, as applicable.

For the years ended December 31, 2025, 2024 and 2023, all of the Company’s income before income taxes was generated from domestic operations within the United States.

Income before the provision for income taxes was entirely attributable to domestic U.S. operations and totaled $3,083,265 for the post‑IPO period from December 10, 2025 to December 31, 2025. The Company has no undistributed earnings.

The effective tax rate for December 10, 2025 to December 31, 2025 was driven primarily from the permanent differences in the share of partnership taxable income.

Deferred taxes arise because of differences in the book and tax bases of certain assets and liabilities. Significant components of deferred tax assets and liabilities are as follows:

The Company's sole material asset is its investment in OpCo, which is treated as a partnership for U.S. income tax purposes and for purposes of certain jurisdictional income taxes. OpCo's net taxable income and any related tax credits are passed through to its partners and are included in the partners' tax returns, even though such net taxable income or tax credits may not have actually been distributed. While the Company consolidates OpCo for financial reporting purposes, the Company will be taxed on its share of earnings of OpCo not attributed to the noncontrolling interest holders, which will continue to bear their share of income tax on allocable earnings of OpCo. The income tax burden on the earnings taxed to the noncontrolling interest holders is not reported by the Company in its consolidated financial statements under GAAP. As a result, the Company's effective tax rate differs materially from the statutory rate. The primary factor impacting the effective tax rate is income attributable to noncontrolling interests that is not subject to corporate income tax.

At December 31, 2025, the Company has a net tax loss, credit, and other carry forwards for income tax purposes of approximately $16.3 million. Of these net tax losses all may be carried forward indefinitely.

At December 31, 2025 and 2024, there were no uncertain tax positions.

The Company has net operating loss (“NOL”) carryforwards were generated from domestic operations within the period December 10, 2025 through December 31, 2025. The federal NOLs will carryover indefinitely. The state NOLs will expire between 2045 and 2040, however, due to planned corporate tax rate reductions in the state of North Carolina, the expected life of these NOLs is expected to be less than 4 years. The Company provides a valuation allowance when it is more likely than not that some portion of the deferred tax assets will not be realized. Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to utilize the existing deferred tax assets. Based on this evaluation, the Company did not record a valuation allowance as of December 31, 2025, as management believes it is more likely than not that the deferred tax asset will be realized.

The Company and/or its subsidiaries file income tax returns in the U.S. federal jurisdiction, and various state, local jurisdictions. The Company is not currently under examination and the initial tax year (2025) is subject to examination.

The Company recognizes interest and penalties related to income taxes within the provision for income taxes in the consolidated statements of operations. Accrued interest and penalties are included within accounts payable or accrued expenses in the consolidated statements of balance sheets. The Company had no amount of interest and penalties payable as of December 31, 2025.

All income taxes paid, net of refunds received, were attributable to the State of North Carolina in the years ended December 31, 2025, 2024 and 2023. No other jurisdiction represented 5% or more of total income taxes paid, net of refunds received.

Tax Receivable Agreement

In connection with the Initial Public Offering and Reorganization Transactions, PubCo entered into a tax receivable agreement (the “Tax Receivable Agreement”) with Cardinal Civil Contracting Holdings LLC and the Continuing Equity Holders, which provides for the payment by PubCo to a Continuing Equity Holders of 85% of the amount of U.S. federal, state and local income or franchise tax savings, if any, that PubCo actually realizes (or in some circumstances is deemed to realize) as a result of (i) increases in the tax basis of Cardinal Civil Contracting Holdings LLC’s assets resulting from (a) the purchase

of LLC interests from such Continuing Equity Holders, including with the net proceeds from the IPO and any subsequent offerings or (b) redemptions or exchanges by such Continuing Equity Holders of LLC interests for shares of Class A common stock or for cash, as applicable, and (ii) certain other tax benefits related to PubCo making payments under the Tax Receivable Agreement. Payments under the Tax Receivable Agreement are due within five (5) business days after delivery of the applicable schedule calculating the realized tax benefits and related payment amount, once such schedule becomes final in accordance with the Tax Receivable Agreement. The benefit schedule is required to be delivered within one hundred eighty (180) calendar days after the due date (including extensions) of the applicable annual federal income tax return for the relevant taxable year, and payments are based on the actual tax savings realized by PubCo. Substantially all payments due under the Tax Receivable Agreement are payable over fifteen years following the purchase of LLC interests from Continuing Equity Holders or redemption or exchanges by Continuing Equity Holder of LLC interests. The Company will account for the income tax effects resulting from taxable redemptions or exchanges of LLC interests by Continuing Equity Holder owners for shares of Class A common stock or cash, as the case may be, and purchases by PubCo of LLC interests from Continuing Equity Holders owners by recognizing an increase in deferred tax assets, based on enacted tax rates at the date of each redemption, exchange, or purchase, as the case may be. Further, PubCo evaluates the likelihood that it will realize the benefit represented by the deferred tax asset, and, to the extent that the PubCo estimates that it is more likely than not that it will not realize the benefit, it reduces the carrying amount of the deferred tax asset with a valuation allowance. The impact of any changes in the total projected obligations recorded under the Tax Receivable Agreement as a result of actual changes in the mix of the Company’s earnings, tax legislation and tax rates in various jurisdictions, or other factors that may impact PubCo's actual tax savings realized, will be reflected in income before taxes on the consolidated statements of operations in the period in which the change occurs.

As of December 31, 2025, the tax receivable agreement liability on the consolidated balance sheet totaled $39,423,529. However, if all of the Pre-IPO Common Unitholders were to exchange or sell us all of their Common Units, we would recognize a deferred tax asset of approximately $212,310,533 and a liability under the Tax Receivable Agreement of approximately $180,463,953, assuming: (i) all exchanges or purchases occurred on the same day; (ii) the unit price of $24.18 per share; (iii) a constant corporate tax rate of 22.78% (iv) that we will have sufficient taxable income to fully utilize the tax benefits; and (v) no material changes in tax law. These amounts are estimates and have been prepared for illustrative purposes only. The actual amount of deferred tax assets and related liabilities that we will recognize will differ based on, among other things, the timing of the exchanges, the price per share of our Class A common stock at the time of the exchange, and the tax rates then in effect.