Tectonic Financial, Inc. Form 8-K Filing

Tectonic Financial, Inc. (the "Company") entered into a Separation Agreement and Plan of Distribution on December 19, 2025. This agreement facilitates the separation of Tectonic Advisors, LLC ("Spinco"), a wholly-owned subsidiary, from the Company's organizational structure. The Company will distribute 100% of Spinco's equity interests to certain equity owners of Cain Watters & Associates, LLC (the "TA Continuing Shareholders") in exchange for 1.53 million shares of the Company's common stock and a $35 million promissory note issued by Spinco, guaranteed by Cain Watters. Spinco is expected to refinance this note immediately after the distribution. The Company intends to use the proceeds for general corporate purposes, potentially including debt repayment and stock repurchase. The separation and distribution are intended to be tax-free for U.S. federal income tax purposes, except for cash proceeds received by the Company from the promissory note payoff. In connection with the separation, the Company also entered into a Tax Matters Agreement and a Transition Services Agreement with Spinco. Additionally, two directors, Steven B. Clapp and Thomas Sanders, who are also TA Continuing Shareholders, will resign from the Board of Directors following the closing of the Distribution. Tectonic Capital Advisors, LLC has been established as a new wholly-owned registered investment adviser subsidiary.