We maintain our high risk rating and lower our estimates and price target to $3 (from $6) following our review of SLND's recent form 8-K filings, which indicate rising surety advances and an adverse ruling against one of its subsidiaries. Collectively, three surety providers have advanced approximately $59 million in funds under general indemnity agreements to support bonded construction contract obligations. Furthermore, American Bridge (a wholly owned subsidiary of Southland Holdings) received an adverse judgment of approximately $57 million. While SLND will appeal the ruling, we have limited visibility into if, or how much, recovery (loss) of these funds was embedded in prior estimations. We find it prudent to assume a full $57 million charge is accrued in 1Q:26 (lowering EPS by $0.84). We also think the aforementioned issues will likely tighten the bonding capacity needed to bid for project work; as such, we reduce our 2027 revenue and profit forecasts. Altogether, we now model 2026 loss per share of $1.29 (from a prior projected loss of $0.33) and 2027 EPS of $0.17 (from $0.37). We also anticipate that, given the increased surety obligations that must be repaid at some point (although it is unclear when repayment is due), SLND could explore asset sales, a credit amendment, or a capital raise to improve liquidity; this is reflected in our high risk rating. Our lowered $3 price target (from $6) is based on 15x our reduced 2027 EPS estimate of $0.17 (from $0.37).