Form 10-Q - Quarterly report [Sections 13 or 15(d)]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)



☒	Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2024.

Commission File Number: 001-32998

Energy Services of America Corporation

(Exact Name of Registrant as Specified in Its Charter)


Delaware		20-4606266
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification Number)


75 West 3^rd Ave., Huntington, West Virginia		25701
(Address of Principal Executive Office)		(Zip Code)

(304) 522-3868

(Registrant’s Telephone Number Including Area Code)

Securities Registered Pursuant to Section 12(b) of the Act:

Title of Each Class		Trading Symbols		Name of Each Exchange On Which Registered
Common Stock, Par Value $0.0001		ESOA		The Nasdaq Stock Market LLC

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such requirements for the past 90 days. YES ☒ NO ☐.

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). YES ☒ NO ☐.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definition of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, or an “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☒	Smaller reporting company	☒

		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO ☒

As of May 7, 2024, there were 16,607,915 outstanding shares of the Registrant’s Common Stock.

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Part 1: Financial Information

Item 1. Financial Statements (Unaudited):

Consolidated Balance Sheets		2

Consolidated Statements of Income		3

Consolidated Statements of Cash Flows		4

Consolidated Statements of Changes in Shareholders’ Equity		5

Notes to Unaudited Consolidated Financial Statements		6

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		19

Item 3. Quantitative and Qualitative Disclosures About Market Risk		36

Item 4. Controls and Procedures		36

Part II: Other Information

Item 1. Legal Proceedings		37

Item 1A. Risk Factors		37

Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities		37

Item 5. Other Information		37

Item 6. Exhibits		38

Signatures		39

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Part 1. Financial Information

Item 1. Financial Statements (Unaudited):

Energy Services of America Corporation

Consolidated Balance Sheets

Unaudited


	March 31,		September 30,
	2024		2023
Assets
Current assets
Cash and cash equivalents	$	12,091,466	$	16,431,572
Accounts receivable-trade		46,373,286		51,219,958
Allowance for doubtful accounts		(51,063)		(51,063)
Retainages receivable		10,101,198		7,589,749
Other receivables		847,306		516,968
Contract assets		14,648,381		15,955,220
Prepaid expenses and other		5,106,870		3,520,178
Total current assets		89,117,444		95,182,582

Property, plant and equipment, at cost		87,681,355		84,329,349
less accumulated depreciation		(50,703,501)		(47,799,840)
Total property and equipment, net		36,977,854		36,529,509

Right-of-use assets-operating lease		2,766,749		3,326,405
Intangible assets, net		3,166,815		3,383,099
Goodwill		4,087,554		4,087,554
Total assets	$	136,116,416	$	142,509,149

Liabilities and shareholders’ equity
Current liabilities
Current maturities of long-term debt	$	7,134,280	$	6,107,277
Lines of credit and short-term borrowings		22,492,890		19,847,470
Current maturities of operating lease liabilities		1,286,881		1,075,815
Accounts payable		18,669,362		22,026,639
Accrued expenses and other current liabilities		10,876,126		13,103,944
Contract liabilities		16,308,516		17,743,001
Total current liabilities		76,768,055		79,904,146

Long-term debt, less current maturities		16,087,973		18,870,529
Long-term operating lease liabilities, less current maturities		1,494,633		2,274,975
Deferred tax liability		7,201,874		6,870,510
Total liabilities		101,552,535		107,920,160

Shareholders’ equity
Common stock, $.0001 par value Authorized 50,000,000 shares, 17,896,016 issued and 16,577,586 outstanding at March 31, 2024 and 17,885,615 issued and 16,567,185 outstanding at September 30, 2023		1,790		1,789
Treasury stock, 1,318,430 shares at March 31, 2024 and September 30, 2023		(132)		(132)
Additional paid in capital		60,324,300		60,288,745
Retained deficit		(25,762,077)		(25,701,413)
Total shareholders’ equity		34,563,881		34,588,989
Total liabilities and shareholders’ equity	$	136,116,416	$	142,509,149

The Accompanying Notes are an Integral Part of These Financial Statements

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Energy Services of America Corporation

Consolidated Statements of Income

Unaudited


	Three Months Ended		Three Months Ended		Six Months Ended		Six Months Ended
	March 31,		March 31,		March 31,		March 31,
	2024		2023		2024		2023
Revenue	$	71,127,655	$	53,673,443	$	161,290,842	$	113,716,028

Cost of revenues		64,888,101		49,772,790		144,212,327		103,829,113

Gross profit		6,239,554		3,900,653		17,078,515		9,886,915

Selling and administrative expenses		7,321,951		5,887,747		14,520,671		11,203,885
(Loss) income from operations		(1,082,397)		(1,987,094)		2,557,844		(1,316,970)

Other income (expense)
Interest income		0		124		0		196
Other nonoperating expense		(81,790)		(10,524)		(6,789)		(91,187)
Interest expense		(622,616)		(574,546)		(1,224,300)		(1,073,974)
Gain on sale of equipment		304,923		48,280		291,595		16,937
		(399,483)		(536,666)		(939,494)		(1,148,028)

(Loss) income before income taxes		(1,481,880)		(2,523,760)		1,618,350		(2,464,998)

Income tax (benefit) expense		(373,052)		(650,160)		684,983		(729,772)

Net (loss) income	$	(1,108,828)	$	(1,873,600)	$	933,367	$	(1,735,226)

Weighted average shares outstanding-basic		16,569,871		16,666,683		16,567,853		16,667,062

Weighted average shares-diluted		16,569,871		16,666,683		16,606,075		16,667,062

(Loss) earnings per share-basic	$	(0.07)	$	(0.11)	$	0.06	$	(0.10)

(Loss) earnings per share-diluted	$	(0.07)	$	(0.11)	$	0.06	$	(0.10)

The Accompanying Notes are an Integral Part of These Financial Statements

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Energy Services of America Corporation

Consolidated Statements of Cash Flows

Unaudited


	Six Months Ended		Six Months Ended
	March 31,		March 31,
	2024		2023
Cash flows from operating activities:
Net income (loss)	$	933,367	$	(1,735,226)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Accreted interest on PPP loans		50,172		49,742
Depreciation expense		4,181,948		3,629,111
Gain on sale of equipment		(291,595)		(16,937)
Provision for deferred taxes		331,364		(729,772)
Amortization of intangible assets		216,284		265,401
Accreted interest on notes payable		30,186		21,198
Vested restricted stock award compensation expense		35,556		—
Decrease in accounts receivable		4,846,672		13,713,923
Increase in retainage receivable		(2,511,449)		(1,214,242)
Increase in other receivables		(330,338)		(309,085)
Decrease in contract assets		1,306,839		4,659,578
(Increase) decrease in prepaid expenses and other		(1,586,692)		1,791,134
Decrease in accounts payable		(3,357,277)		(6,155,465)
Decrease in accrued expenses and other current liabilities		(2,237,438)		(3,010,776)
(Decrease) increase in contract liabilities		(1,434,485)		1,016,632
Net cash provided by operating activities		183,114		11,975,216

Cash flows from investing activities:
Investment in property and equipment		(3,586,106)		(5,774,905)
Proceeds from sales of property and equipment		943,938		274,624
Net cash used in investing activities		(2,642,168)		(5,500,281)

Cash flows from financing activities:
Dividends on common stock		(994,031)		(833,360)
Treasury stock purchased		—		(71,655)
Borrowings on lines of credit and short-term debt, net of (repayments)		2,636,849		(1,618,718)
Proceeds from long-term debt		—		3,100,000
Principal payments on long-term debt		(3,523,870)		(2,883,118)
Net cash used in financing activities		(1,881,052)		(2,306,851)
(Decrease) increase in cash and cash equivalents		(4,340,106)		4,168,084
Cash and cash equivalents beginning of period		16,431,572		7,427,474
Cash and cash equivalents end of period	$	12,091,466	$	11,595,558

Supplemental schedule of noncash investing and financing activities:
Purchases of property & equipment under financing agreements	$	1,696,530	$	599,217
Prepaid insurance premiums financed	$	—	$	3,811,644
Operating lease right-of-use asset disposals, net of acquisitions in exchange for operating liabilities	$	(2,846)	$	962,417

Supplemental disclosures of cash flows information:
Cash paid during the year for:
Interest	$	1,169,311	$	1,022,089
Income taxes	$	1,153,934	$	—

The Accompanying Notes are an Integral Part of These Financial Statements

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Energy Services of America Corporation

Consolidated Statements of Changes in Shareholders’ Equity

For the three and six months ended March 31, 2024 and 2023


										Total
	Common Stock			Additional Paid		Retained		Treasury		Shareholders’
	Shares	Amount		in Capital		Deficit		Stock		Equity
Balance at September 30, 2023	16,567,185	$	1,789	$	60,288,745	$	(25,701,413)	$	(132)	$	34,588,989

Net income	—		—		—		2,042,195		—		2,042,195

Dividends on common stock ($0.06 per share on 16,567,185 shares)	—		—		—		(994,031)		—		(994,031)

Balance at December 31, 2023	16,567,185	$	1,789	$	60,288,745	$	(24,653,249)	$	(132)	$	35,637,153

Net loss	—		—		—		(1,108,828)		—		(1,108,828)

Vested restricted stock award	10,401		1		35,555		—		—		35,556

Balance at March 31, 2024	16,577,586	$	1,790	$	60,324,300	$	(25,762,077)	$	(132)	$	34,563,881


										Total
	Common Stock			Additional Paid		Retained		Treasury		Shareholders’
	Shares	Amount		in Capital		Deficit		Stock		Equity
Balance at September 30, 2022	16,667,185	$	1,789	$	60,508,350	$	(32,269,473)	$	(122)	$	28,240,544

Net income	—		—		—		138,374		—		138,374

Balance at December 31, 2022	16,667,185	$	1,789	$	60,508,350	$	(32,131,099)	$	(122)	$	28,378,918

Net loss	—		—		—		(1,873,600)		—		(1,873,600)

Dividends on common stock ($0.05 per share on 16,667,185 shares)	—		—		—		(833,360)		—		(833,360)

Treasury stock purchased by company	(32,181)		—		(71,652)		—		(3)		(71,655)

Balance at March 31, 2023	16,635,004	$	1,789	$	60,436,698	$	(34,838,059)	$	(125)	$	25,600,303

The Accompanying Notes are an Integral Part of These Financial Statements

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ENERGY SERVICES OF AMERICA CORPORATION

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. BUSINESS AND ORGANIZATION

Energy Services of America Corporation (“Energy Services” or the “Company”), formed in 2006, is a contractor and service company that operates primarily in the mid-Atlantic and central regions of the United States and provides services to customers in the natural gas, petroleum, water distribution, automotive, chemical, and power industries. For the gas industry, the Company is primarily engaged in the construction, replacement and repair of natural gas pipelines and storage facilities for utility companies and private natural gas companies. Energy Services is involved in the construction of both interstate and intrastate pipelines, with an emphasis on the latter. For the oil industry, the Company provides a variety of services relating to pipeline, storage facilities and plant work. For the power, chemical, and automotive industries, the Company provides a full range of electrical and mechanical installations and repairs including substation and switchyard services, site preparation, equipment setting, pipe fabrication and installation, packaged buildings, transformers, and other ancillary work with regards thereto. Energy Services’ other pipeline services include corrosion protection services, horizontal drilling services, liquid pipeline construction, pump station construction, production facility construction, water and sewer pipeline installations, various maintenance and repair services and other services related to pipeline construction. The Company has also added the ability to install broadband and solar electric systems and perform civil and general contracting services.

C.J. Hughes Construction Company, Inc. (“C.J. Hughes”), a wholly owned subsidiary of the Company, is a general contractor primarily engaged in pipeline construction for utility companies. Contractors Rental Corporation (“Contractors Rental”), a wholly owned subsidiary of C.J. Hughes, provides union building trade employees for projects managed by C.J. Hughes.

Nitro Construction Services, Inc. (“NCS”), a wholly owned subsidiary of C.J. Hughes, provides electrical, mechanical, HVAC/R, and fire protection services to customers primarily in the automotive, chemical, and power industries. Revolt Energy, LLC (“Revolt”), a wholly owned subsidiary of NCS, performs residential solar installation projects. Nitro Electric Company, LLC (“Nitro Electric”), a wholly owned subsidiary of NCS, performs industrial electrical work and has a satellite office registered in Michigan. Pinnacle Technical Solutions, Inc. (“Pinnacle”), a wholly owned subsidiary of NCS, operates as a data storage facility within Nitro’s office building. Pinnacle is supported by NCS and has no employees of its own. NCS and its subsidiaries will collectively be referred to “Nitro”.

All C.J. Hughes, Nitro, and Contractors Rental construction personnel are union members of various related construction trade unions and are subject to collective bargaining agreements that expire at varying time intervals.

West Virginia Pipeline, Inc. (“West Virginia Pipeline” or “WVP”), a wholly owned subsidiary of Energy Services, operates as a gas and water distribution contractor primarily in southern West Virginia. The employees of West Virginia Pipeline are non-union and are managed independently of the Company’s union subsidiaries.

SQP Construction Group, Inc. (“SQP”), a wholly owned subsidiary of Energy Services, operates as a general contractor primarily in West Virginia. SQP engages in the construction and renovation of buildings and other civil construction projects for state and local government agencies and commercial customers. As a general contractor, SQP manages the overall construction project and subcontracts most of the work. The employees of SQP are non-union and are managed independently of the Company’s union subsidiaries.

Tri-State Paving & Sealcoating, Inc. (“TSP” or “Tri-State Paving”), a wholly owned subsidiary of Energy Services, completed the acquisition of substantially all the assets of Tri-State Paving & Sealcoating, LLC (“Tri-State Paving, LLC”) on April 29, 2022. Tri-State Paving provides utility paving services to water distribution customers in the Charleston, West Virginia, Lexington, Kentucky, and Chattanooga, Tennessee markets. The employees of TSP are non-union and are managed independently of the Company’s union subsidiaries.

Ryan Construction Services Inc. (“Ryan Construction” or “RCS”), a wholly owned subsidiary of Energy Services, formed in August 2022 in connection with the acquisition of substantially all the assets of Ryan Environmental, LLC and Ryan Environmental Transport, LLC (collectively “Ryan Environmental”), provides directional drilling services for broadband service providers along with offering natural gas distribution services, cathodic protection and corrosion prevention services, and civil construction services. Ryan Construction operates primarily in West Virginia and Pennsylvania. The employees of RCS are non-union and are managed independently of the Company’s union subsidiaries.

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Interim Financial Statements

The accompanying unaudited consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and should be read in conjunction with the Company’s audited consolidated financial statements and footnotes thereto for the years ended September 30, 2023, and 2022 included in the Company’s Annual Report on Form 10-K filed with the SEC on January 16, 2024. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been omitted pursuant to the interim financial reporting rules and regulations of the SEC. The financial statements reflect all adjustments (consisting primarily of normal recurring adjustments) that are, in the opinion of management, necessary for a fair presentation of the Company’s financial position and results of operations. The operating results for the three and six months ended March 31, 2024 and 2023 are not necessarily indicative of the results to be expected for the full year or any other interim period.

Principles of Consolidation

The consolidated financial statements of Energy Services include the accounts of Energy Services, its wholly owned subsidiaries West Virginia Pipeline, SQP, Ryan Construction, Tri-State Paving and C.J. Hughes and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in the consolidation. Unless the context requires otherwise, references to Energy Services include Energy Services, West Virginia Pipeline, SQP, Ryan Construction, Tri-State Paving and C.J. Hughes and its subsidiaries.

Use of Estimates and Assumptions

The preparation of financial statements, in conformity with U.S. GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and loss during the reporting period. Actual results could differ materially from those estimates.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Please refer to Note 2 “Summary of Significant Accounting Policies” of the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended September 30, 2023, for a more detailed discussion of our significant accounting policies. There were no material changes to these significant accounting policies during the three and six months ended March 31, 2024.

3. ACCOUNTING FOR PAYCHECK PROTECTION PROGRAM LOANS

Due to the economic uncertainties created by COVID-19 and limited operating funds available, the Company applied for loans under the Paycheck Protection Program (“PPP”). On April 15, 2020, the Company and its subsidiaries, C.J. Hughes, Contractors Rental and Nitro, entered into separate PPP notes effective April 7, 2020, with United Bank as its lender (the “Lender”) in an aggregate principal amount of $13.1 million pursuant to the PPP (collectively, the (“PPP Loans”). In a special meeting held on April 27, 2020, the Board of Directors of the Company unanimously voted to return $3.3 million of the PPP Loans after discussing the financing needs of the Company and subsidiaries. That left the Company and subsidiaries with $9.8 million in PPP Loans to fund operations. During fiscal year 2021, the Company received notice that the SBA had granted forgiveness of the $9.8 million of PPP Loans and the SBA repaid the Lender in full. The forgiveness was recorded as other income for the fiscal year ended September 30, 2021.

During April 2023, management received notification from the SBA that one of the Company’s forgiveness applications related to the PPP Loans was under review. As part of the review, the SBA requested additional payroll information. Additionally, the SBA requested information regarding the ability of the Company’s affiliates to meet SBA size standards and/or PPP corporate maximum limits. The requested information was subsequently provided to the SBA through the Lender. The Company recognizes that there is a possibility that the SBA could reverse its previous determination on the forgiveness of the PPP Loans. As a result of this uncertainty, the Company restated the previously issued audited financial statements of the Company for the fiscal years 2022 and 2021. The Company has recorded a short-term borrowing due to the SBA inquiry for the full $9.8 million, plus accrued interest for all periods presented.

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to meet SBA size standards and/or PPP corporate maximum limits. The requested information was subsequently provided to the SBA through the Lender.

Borrowers must retain PPP documentation for at least six years after the date the loan is forgiven or paid in full, and the SBA and SBA Inspector General must be granted these files upon request. The SBA could revisit its forgiveness decision and determine that the Company does not qualify in whole or in part for loan forgiveness and demand repayment of the loans. In addition, it is unknown what type of penalties could be assessed against the Company if the SBA disagrees with the Company’s certification. Any penalties in addition to the potential repayment of the PPP Loans could negatively impact the Company’s business, financial condition and results of operations and prospects.

4. REVENUE RECOGNITION

Our revenue is primarily derived from construction contracts that can span several quarters. We recognize revenue in accordance with Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606” or “Topic 606”) which provides for a five-step model for recognizing revenue from contracts with customers as follows:

●

Identify the contract

●

Identify performance obligations

●

Determine the transaction price

●

Allocate the transaction price

●

Recognize revenue

The accuracy of our revenue and profit recognition in a given period depends on the accuracy of our estimates of the cost to complete each project. We believe our experience allows us to create materially reliable estimates. There are a number of factors that can contribute to changes in estimates of contract cost and profitability. The most significant of these include:

●

the completeness and accuracy of the original bid;

●

costs associated with scope changes;

●

changes in costs of labor and/or materials;

●

extended overhead and other costs due to owner, weather and other delays;

●

subcontractor performance issues;

●

changes in productivity expectations;

●

site conditions that differ from those assumed in the original bid;

●

changes from original design on design-build projects;

●

the availability and skill level of workers in the geographic location of the project;

●

a change in the availability and proximity of equipment and materials;

●

our ability to fully and promptly recover on affirmative claims and back charges for additional contract costs; and

●

the customer’s ability to properly administer the contract.

The foregoing factors, as well as the stage of completion of contracts in process and the mix of contracts at different margins may cause fluctuations in gross profit from period to period. Significant changes in cost estimates, particularly in our larger, more complex projects, could have a significant effect on our profitability.

Our contract assets include cost and estimated earnings in excess of billings that represent amounts earned and reimbursable under contracts, including claim recovery estimates, but have a conditional right for billing and payment such as achievement of milestones or completion of the project. With the exception of customer affirmative claims, generally, such unbilled amounts will become billable according to the contract terms and generally will be billed and collected over the next three months. Settlement with the customer of outstanding affirmative claims is dependent on the claims resolution process and could extend beyond one year. Based on our historical experience, we generally consider the collection risk related to billable amounts to be low. When events or conditions indicate that it is probable that the amounts outstanding become unbillable, the transaction price and associated contract asset is reduced.

Our contract liabilities consist of provisions for losses and billings in excess of costs and estimated earnings. Provisions for losses, if incurred, are recognized in the consolidated statements of income at the uncompleted performance obligation level for the amount of total estimated losses in the period that evidence indicates that the estimated total cost of a performance obligation exceeds

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its estimated total revenue. Billings in excess of costs and estimated earnings are billings to customers on contracts in advance of work performed, including advance payments negotiated as a contract condition. Generally, unearned project-related costs will be earned over the next twelve months.

5. DISAGGREGATION OF REVENUE

The Company disaggregates revenue based on the following lines of service: (1) Gas & Water Distribution, (2) Gas & Petroleum Transmission, and (3) Electrical, Mechanical, & General services and construction. Our contract types are: Lump Sum, Unit Price, Cost Plus and Time and Materials (“T&M”). The following tables present our disaggregated revenue for the three and six months ended March 31, 2024 and 2023:


	Three Months Ended March 31, 2024
					Electrical,
	Gas & Water		Gas & Petroleum		Mechanical, &		Total revenue
	Distribution		Transmission		General		from contracts
Lump sum contracts	$	—	$	—	$	26,943,941	$	26,943,941
Unit price contracts		14,273,691		9,044,955		448,175		23,766,821
Cost plus and T&M contracts		—		718,123		19,698,770		20,416,893
Total revenue from contracts	$	14,273,691	$	9,763,078	$	47,090,886	$	71,127,655

Earned over time	$	5,768,688	$	9,044,955	$	32,913,922	$	47,727,565
Earned at point in time		8,505,003		718,123		14,176,964		23,400,090
Total revenue from contracts	$	14,273,691	$	9,763,078	$	47,090,886	$	71,127,655


	Six Months Ended March 31, 2024
					Electrical,
	Gas &Water		Gas & Petroleum		Mechanical, &		Total revenue
	Distribution		Transmission		General		from contracts
Lump sum contracts	$	—	$	—	$	55,632,971	$	55,632,971
Unit price contracts		31,356,586		36,893,140		2,710,870		70,960,596
Cost plus and T&M contracts		—		1,433,181		33,264,094		34,697,275
Total revenue from contracts	$	31,356,586	$	38,326,321	$	91,607,935	$	161,290,842

Earned over time	$	10,141,271	$	36,893,140	$	63,141,836	$	110,176,247
Earned at point in time		21,215,315		1,433,181		28,466,099		51,114,595
Total revenue from contracts	$	31,356,586	$	38,326,321	$	91,607,935	$	161,290,842


	Three Months Ended March 31, 2023
					Electrical,
	Gas & Water		Gas & Petroleum		Mechanical, &		Total revenue
	Distribution		Transmission		General		from contracts
Lump sum contracts	$	—	$	—	$	22,467,890	$	22,467,890
Unit price contracts		13,432,107		5,334,861		1,261,641		20,028,609
Cost plus and T&M contracts		—		—		11,176,944		11,176,944
Total revenue from contracts	$	13,432,107	$	5,334,861	$	34,906,475	$	53,673,443

Earned over time	$	8,711,111	$	5,334,861	$	31,736,363	$	45,782,335
Earned at point in time		4,720,996		—		3,170,112		7,891,108
Total revenue from contracts	$	13,432,107	$	5,334,861	$	34,906,475	$	53,673,443

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	Six Months Ended March 31, 2023
					Electrical,
	Gas & Water		Gas & Petroleum		Mechanical, &		Total revenue
	Distribution		Transmission		General		from contracts
Lump sum contracts	$	—	$	—	$	39,501,096	$	39,501,096
Unit price contracts		25,919,952		22,229,675		2,799,079		50,948,706
Cost plus and T&M contracts		—		—		23,266,226		23,266,226
Total revenue from contracts	$	25,919,952	$	22,229,675	$	65,566,401	$	113,716,028

Earned over time	$	13,589,758	$	22,229,675	$	61,626,511	$	97,445,944
Earned at point in time		12,330,194		—		3,939,890		16,270,084
Total revenue from contracts	$	25,919,952	$	22,229,675	$	65,566,401	$	113,716,028

6. CONTRACT BALANCES

The Company’s accounts receivable consists of amounts that have been billed to customers and collateral is generally not required. Most of the Company’s contracts have monthly billing terms; however, billing terms for some are based on project completion. Payment terms are generally within 30 to 45 days after invoices have been issued. The Company attempts to negotiate two-week billing terms and 15-day payment terms on larger projects. The timing of billings to customers may generate contract assets or contract liabilities.

During the three and six months ended March 31, 2024, we recognized revenue of $4.1 million and $17.6 million, respectively, that was included in the contract liability balance at September 30, 2023.

Accounts receivable-trade, net of allowance for doubtful accounts, contract assets and contract liabilities consisted of the following:


	March 31, 2024		September 30, 2023		Change
Accounts receivable-trade, net of allowance for doubtful accounts	$	46,322,223	$	51,168,895	$	(4,846,672)

Contract assets
Cost and estimated earnings in excess of billings	$	14,648,381	$	15,955,220	$	(1,306,839)

Contract liabilities
Billings in excess of cost and estimated earnings	$	16,308,516	$	17,743,001	$	(1,434,485)

7. PERFORMANCE OBLIGATIONS

For the three and six months ended March 31, 2024, there was no significant revenue recognized as a result of changes in contract transaction price related to performance obligations that were satisfied prior to September 30, 2023. Changes in contract transaction price can result from items such as executed or estimated change orders, and unresolved contract modifications and claims.

At March 31, 2024, the Company had $145.3 million in remaining unsatisfied performance obligations, in which revenue is expected to be recognized over the next twelve months.

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8. UNCOMPLETED CONTRACTS

Costs, estimated earnings, and billings on uncompleted contracts as of March 31, 2024 and September 30, 2023, are summarized as follows:


	March 31, 2024		September 30, 2023
Costs incurred on contracts in progress	$	403,385,426	$	287,347,650
Estimated earnings, net of estimated losses		42,599,658		38,976,895
		445,985,084		326,324,545
Less billings to date		447,645,219		328,112,326
	$	(1,660,135)	$	(1,787,781)

Costs and estimated earnings in excess of billed on uncompleted contracts	$	14,648,381	$	15,955,220

Less billings in excess of costs and estimated earnings on uncompleted contracts		16,308,516		17,743,001

	$	(1,660,135)	$	(1,787,781)

The Company’s unaudited backlog at March 31, 2024 and September 30, 2023 was $222.8 million and $229.8 million, respectively.

9. FAIR VALUE MEASUREMENTS

The fair value measurement guidance of the Financial Accounting Standards Board (“FASB”) ASC defines fair value, establishes a framework for measuring fair value in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and specifies disclosures about fair value measurements.

Under the FASB’s authoritative guidance on fair value measurements, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement guidance of the FASB ASC establishes a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels are defined as follows:

Level 1 — Quoted prices for identical assets and liabilities traded in active exchange markets, such as the New York Stock Exchange.

Level 2 — Observable inputs other than Level 1 including quoted prices for similar assets or liabilities, quoted prices in less active markets, or other observable inputs that can be corroborated by observable market data. Level 2 also includes derivative contracts whose value is determined using a pricing model with observable market inputs or can be derived principally from or corroborated by observable market data.

Level 3 — Unobservable inputs supported by little or no market activity for financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation; also includes observable inputs for nonbinding single dealer quotes not corroborated by observable market data.

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

The carrying amount for borrowings under the Company’s revolving credit facility approximates fair value because of the variable market interest rate charged to the Company for these borrowings. The fair value of the Company’s long term fixed-rate debt was estimated using a discounted cash flow analysis and a yield rate that was estimated based on the borrowing rates currently available to the Company for bank loans with similar terms and maturities. The fair value of the aggregate principal amount of the Company’s fixed-rate debt of $31.5 million at March 31, 2024 was $30.1 million. The fair value of the aggregate principal amount of the Company’s fixed-rate debt of $33.8 million at September 30, 2023 was $32.1 million.

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All other current assets and liabilities are carried at net realizable value which approximates fair value because of their short duration to maturity.

10. EARNINGS PER SHARE

The amounts used to compute the earnings per share for the three and six months ended March 31, 2024 and 2023 are summarized below.


	March 31, 2024		March 31, 2023		March 31, 2024		March 31, 2023
Net (loss) income	$	(1,108,828)	$	(1,873,600)	$	933,367	$	(1,735,226)

Weighted average shares outstanding-basic		16,569,871		16,666,683		16,567,853		16,667,062

Weighted average shares outstanding-diluted		16,569,871		16,666,683		16,606,075		16,667,062

(Loss) earnings per share available to common shareholders	$	(0.07)	$	(0.11)	$	0.06	$	(0.10)

(Loss) earnings per share available to common shareholders-diluted	$	(0.07)	$	(0.11)	$	0.06	$	(0.10)

11. INCOME TAXES

The components of income taxes are as follows:


	Three Months Ended				Six Months Ended
	March 31, 2024		March 31, 2023		March 31, 2024		March 31, 2023
Federal
Current	$	—	$	—	$	140,882	$	—
Deferred		(286,811)		(499,808)		389,140		(561,906)
Total		(286,811)		(499,808)		530,022		(561,906)

State
Current		—		—		45,203		—
Deferred		(86,241)		(150,352)		109,758		(167,866)
Total		(86,241)		(150,352)		154,961		(167,866)
Total income tax expense (benefit)	$	(373,052)	$	(650,160)	$	684,983	$	(729,772)

The Company’s income tax expense and deferred tax assets and liabilities reflect management’s best estimate of current and future taxes to be paid. Significant judgments and estimates are required in the determination of the consolidated income tax expense. The Company’s provision for income taxes is computed by applying a federal rate of 21.0% and a state rate of 6.0% to taxable income or loss after consideration of non-taxable and non-deductible items.

The effective income tax rate for the three and six months ended March 31, 2024 was (25.2)% and 42.3%, respectively, as compared to (25.8)% and (29.6)%, respectively, for the same period in 2023. Effective income tax rates are estimates and may vary from period to period due to changes in the amount of taxable income and non-deductible expenses.

Major items that can affect the effective tax rate include amortization of goodwill and intangible assets and non-deductible amounts for per diem expenses.

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The income tax effects of temporary differences giving rise to the deferred tax assets and liabilities are as follows:


	March 31, 2024		September 30, 2023
Deferred tax liabilities
Property and equipment	$	7,775,925	$	8,141,025
Other		617,218		588,632
Total deferred tax liabilities	$	8,393,143	$	8,729,657

Deferred income tax assets
Accruals & Other	$	1,005,361	$	948,704
Net operating loss carryforward		185,908		910,443
Total deferred tax assets		1,191,269		1,859,147
Total net deferred tax liabilities	$	7,201,874	$	6,870,510

Deferred income taxes arise from temporary differences between the tax basis of assets and liabilities and their reported amounts in the consolidated financial statements, which will result in taxable or deductible amounts in the future. A valuation allowance is established when necessary to reduce deferred tax assets to the amount expected to be realized.

The Company had $186,000 and $3.0 million of federal net operating loss carryforwards at March 31, 2024 and September 30, 2023, respectively. The Company expects to exhaust the federal net operating loss carryforwards in the fiscal year ending September 30, 2025. The Company had state net operating loss carryforwards at March 31, 2024 and September 30, 2023, respectively that begin to expire in 2025, that were not significant.

The Company does not believe that it has any unrecognized tax benefits included in its consolidated financial statements that require recognition. The Company has not had any settlements in the current period with taxing authorities, nor has it recognized tax benefits as a result of a lapse of the applicable statute of limitations. The Company recognizes interest and penalties accrued related to unrecognized tax benefits, if applicable, in general and administrative expenses.

12. SHORT-TERM AND LONG-TERM DEBT

Operating Line of Credit

On July 13, 2022, the Company received a one-year extension on its $15.0 million operating line of credit effective June 28, 2022. The interest rate on the line of credit is the “Wall Street Journal” Prime Rate (the index) with a floor of 4.99%. On January 19, 2023, the Company received an amendment to the agreement which increased the line of credit to $30.0 million with a maturity date of June 28, 2023. On June 1, 2023, the agreement was renewed through June 28, 2024.

The line of credit is limited to a borrowing base calculation as summarized below:


	March 31, 2024			September 30, 2023
Eligible borrowing base	$	21,267,302		$	23,942,868

Borrowed on line of credit		12,300,000			8,712,915

Line of credit balance available	$	8,967,302		$	15,229,953

Interest rate		8.5	%		8.5	%

The modified financial covenants for the quarter ended June 30, 2023, and all subsequent quarters, are below:

●

Minimum tangible net worth of $28.0 million,

●

Minimum traditional debt service coverage of 1.50x on a rolling twelve- month basis,

●

Minimum current ratio of 1.20x,

●

Maximum debt to tangible net worth ratio (“TNW”) of 2.75x,

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●

Each ratio and covenant shall be determined, tested, and measured as of each calendar quarter beginning June 30, 2023,

●

The Company shall maintain a ratio of Maximum Senior Funded Debt (“SFD”) to Earnings before Interest, Taxes, Depreciation and Amortization (“EBDITA”) equal to or less than 3.5:1. SFD shall mean any funded debt or lease of the Company, other than subordinated debt. The covenant shall be tested quarterly, at the end of each fiscal quarter, with EBITDA based on the preceding four quarters.

The Company’s lender has agreed to omit the effect of the PPP loan restatement from the Company’s covenant compliance calculations while a final decision on PPP loan forgiveness remains in question. Thus, the Company was in compliance with all covenants at March 31, 2024. The Company projects to meet all covenant requirements for the next twelve months.

Insurance Premiums Financed

The Company financed its captive insurance policy premiums on a short-term basis through a financing company for the calendar year ended December 31, 2023. These insurance policies include workers’ compensation, general liability, automobile, umbrella, and equipment policies. The Company made a down payment in January 2023 and financed the remaining premium amount over eleven monthly payments. At March 31, 2024 and September 30, 2023, the remaining balance of the insurance premiums was $0 and $950,000, respectively.

For the calendar year beginning January 1, 2024, the Company’s insurance company is accepting quarterly payments on certain insurance policies and the Company has prepaid the balance of the remaining policies as of March 31, 2024. The Company has no insurance premiums financed as of March 31, 2024.

Paycheck Protection Program Loans

Due to the economic uncertainties created by COVID-19 and limited operating funds available, the Company applied for loans under the PPP. On April 15, 2020, the Company and its subsidiaries, C.J. Hughes, Contractors Rental and Nitro, entered into separate PPP notes effective April 7, 2020, with its Lender in an aggregate principal amount of $13.1 million pursuant to the PPP Loans. In a special meeting held on April 27, 2020, the Board of Directors of the Company unanimously voted to return $3.3 million of the PPP Loans after discussing the financing needs of the Company and subsidiaries. That left the Company and subsidiaries with $9.8 million in PPP Loans to fund operations. During fiscal year 2021, the Company received notice that the SBA had granted forgiveness of the $9.8 million of PPP Loans and the SBA repaid the Lender in full. The forgiveness was recorded as other income for the fiscal year ended September 30, 2021.

During April 2023, management received notification from the SBA that one of the Company’s forgiveness applications related to the PPP Loans was under review. As part of the review, the SBA requested additional payroll information. Additionally, the SBA requested information regarding the ability of the Company’s affiliates to meet SBA size standards and/or PPP corporate maximum limits. The requested information was subsequently provided to the SBA through the Lender. The Company recognizes that there is a possibility that the SBA could reverse its previous determination on the forgiveness of the PPP Loans. As a result of this uncertainty, the Company restated the previously audited financial statements of the Company for the fiscal years 2022 and 2021. The Company has recorded a short-term borrowing due to the SBA inquiry for the full $9.8 million, plus accrued interest.

During July 2023, management received notification from the SBA that two additional forgiveness applications related to the PPP Loans were under review. As part of the review, the SBA requested information regarding the ability of the Company’s affiliates to meet SBA size standards and/or PPP corporate maximum limits. The requested information was subsequently provided to the SBA through the Lender.

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A summary of short-term and long-term debt as of March 31, 2024 and September 30, 2023 is as follows:


	March 31, 2024		September 30, 2023
Line of credit payable to bank, monthly interest with variable rate of 8.5% at March 31, 2024, final payment due by June 28, 2024, guaranteed by certain directors of the Company.	$	12,300,000	$	8,712,915

Note payable to bank, due in monthly installments totaling $202,000, including fixed interest at 7.25%, final payment due June 2028, secured by equipment, guaranteed by certain directors of the Company.		8,712,104		8,487,085

Paycheck Protection Program loans from Small Business Administration, 1.0% simple interest, initially forgiven in the fiscal year ended September 30, 2021. Final forgiveness decision has not been determined.		10,234,492		10,184,320

Term note payable to United Bank, WV Pipeline acquisition, due in monthly installments of $64,853 with fixed interest at 4.25%, final payment due by March 25, 2026, secured by receivables and equipment, guaranteed by certain directors of the Company.		1,494,290		1,790,051

Notes payable to finance companies, due in monthly installments totaling $76,600 at March 31, 2024 and $50,000 at September 30, 2023, including interest ranging from 0.00% to 6.0%, final payments due April 2024 through August 2026, secured by equipment.		1,893,373		1,290,148

Note payable to finance company for insurance premiums financed, due in monthly installments totaling $327,000 in calendar year 2023 and $282,000 in calendar year 2022, including interest rate at 6.70%, final payment due December 2023.		—		950,235

Notes payable to bank, due in monthly installments totaling $7,848, including interest at 4.82%, final payment due November 2034 secured by building and property.		787,329		813,242

Notes payable to bank, due in monthly installments totaling $12,580, including variable interest of 9.5% at March 31, 2024, final payment due November 2025 secured by building and property, guaranteed by certain directors of the Company.		232,166		294,761

Notes payable to bank, due in monthly installments totaling $59,932, including fixed interest at 6.0%, final payment due October 2027 secured by receivables and equipment, guaranteed by certain directors of the Company.		2,317,125		2,601,404

Notes payable to David Bolton and Daniel Bolton, due in annual installments totaling $500,000, including fixed interest at 3.25%, final payment due December 31, 2026, unsecured.		925,000		1,660,000

Notes payable to bank, due in monthly installments totaling $68,150, including variable interest of 9.5% at March 31, 2024, with final payment due September 2026, secured by equipment, guaranteed by certain directors of the Company.		1,548,929		1,873,831

Term note payable to United Bank, Tri-State Paving acquisition, due in monthly installments of $129,910, fixed interest at 4.50%, final payment due by June 1, 2027, secured by receivables and equipment, guaranteed by certain directors of the Company.		5,036,626		5,698,761

Notes payable to Corns Enterprises, $1,000,000 with fair value of $936,000, due in annual installments totaling $250,000, including fixed interest at 3.50%, final payment due April 29, 2026, unsecured.		233,709		468,523

Total debt	$	45,715,143	$	44,825,276

Less current maturities		29,627,170		25,954,747

Total long term debt, less current maturities	$	16,087,973	$	18,870,529

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13. GOODWILL AND INTANGIBLE ASSETS

The Company follows the guidance of ASC Topic 350, Intangibles-Goodwill and Other, which requires a company to record an impairment charge based on the excess of a reporting unit’s carrying amount of goodwill over its fair value. Under the current guidance, companies can first choose to assess any impairment based on qualitative factors (Step 0). If a company fails this test or decides to bypass this step, it must proceed with a quantitative assessment of goodwill impairment. The Company did not have a goodwill impairment at March 31, 2024 or September 30, 2023.

A table of the Company’s goodwill is below:



	March 31, 2024		September 30, 2023
Beginning balance	$	4,087,554	$	4,087,554
Acquired		—		—
Ending balance	$	4,087,554	$	4,087,554

A table of the Company’s intangible assets subject to amortization is below:


				Accumulated		Accumulated		Amortization		Amortization		Amortization		Amortization
	Remaining Life			Amortization and		Amortization and		and Impairment		and Impairment		and Impairment		and Impairment
	(in months) at			Impairment at		Impairment at		Three Months		Six Months		Three Months		Six Months		Net Book Value		Net Book Value
	March 31,			March 31,		September 30,		Ended March 31,		Ended March 31,		Ended March 31,		Ended March 31,		at March 31,		at September 30,
Intangible assets:	2024	Original Cost		2024		2023		2024		2024		2023		2023		2024		2023
West Virginia Pipeline:
Customer Relationships	81	$	2,209,724		718,145	$	607,661		55,242		110,484		65,647		120,889	$	1,491,579	$	1,602,063
Tradename	81		263,584		85,682		72,500		6,591		13,182		6,587		13,182		177,902		191,084
Non-competes	—		83,203		83,203		83,203		—		—		—		10,397		—		—

Revolt Energy:

Employment agreement/non-compete	—		100,000		100,000		100,000		—		—		4,167		8,334		—		—

Tri-State Paving:
Customer Relationships	97		1,649,159		316,089		233,631		41,229		82,458		41,178		82,458		1,333,070		1,415,528
Tradename	97		203,213		38,949		28,789		5,080		10,160		5,079		10,161		164,264		174,424
Non-competes	—		39,960		39,960		39,960		—		—		9,963		19,980		—		—

Total intangible assets		$	4,548,843	$	1,382,028	$	1,165,744	$	108,142	$	216,284	$	132,621	$	265,401	$	3,166,815	$	3,383,099

The amortization on identifiable intangible assets for the three months ended March 31, 2024 and 2023 was $108,142 and $132,621, respectively. The amortization on identifiable intangible assets for the six months ended March 31, 2024 and 2023 was $216,284 and $265,401, respectively.

Amortization expense associated with the identifiable intangible assets is expected to be as follows:


	Amortization Expense
April 2024 to March 2025	$	432,564
April 2025 to March 2026		432,564
April 2026 to March 2027		432,564
April 2027 to March 2028		432,564
April 2028 to March 2029		432,564
After		1,003,995
Total	$	3,166,815

14. LEASE OBLIGATIONS

The Company leases office space for SQP for $1,500 per month. The lease, which was originally signed on March 25, 2021, is for a period of two years with five one-year renewals available immediately following the end of the base term. The Company has only committed to a one-year renewal and is evaluating the intent to renew for additional periods.

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payments of $6,645 and were cancellable at any time without penalty. The Company exercised the right to purchase the equipment at the expiration of the leases by applying the two-month deposit paid. The related assets and finance lease obligations associated with these lease agreements had been included in the consolidated balance sheets within property, plant and equipment and long-term debt.

The Company has two right-of-use operating leases acquired on April 29, 2022, as part of the Tri-State Paving, LLC transaction. The first operating lease, for the Hurricane, West Virginia facility, had a net present value of $236,000 at inception, and a carrying value of $86,000 at March 31, 2024. The second operating lease, for the Chattanooga, Tennessee facility, had a net present value of $144,000 at inception, and a carrying value of $24,000 at March 31, 2024. The 4.5% interest rate on the operating leases is based on the Company’s incremental borrowing rate at inception.

The Company has a right-of-use operating lease with Enterprise Fleet Management, Inc. (Enterprise) acquired on August 11, 2022, as part of the Ryan Environmental acquisition. This lease agreement was initially for thirty-one vehicles with a net present value of $1.2 million. The Company had seventy-one vehicles on lease at March 31, 2024. The right-of-use operating lease has a carrying value of $2.4 million at March 31, 2024. Each vehicle leased under the master lease program has its own implicit rate ranging from 12.8% to 15.6%.

The Company has a right-of-use operating lease with RICA Developers, LLC acquired on August 12, 2022 and renewed for one year effective October 1, 2023. This lease, for the Bridgeport, West Virginia facility, had a net present value of $125,000 at inception and a carrying value of $64,000 at March 31, 2024. The 8.5% interest rate on the operating lease was based on the Company’s incremental borrowing rate at renewal.

The Company has a right-of-use operating lease acquired on March 28, 2023. This lease, for the Winchester, Kentucky facility, had a net present value of $290,000 at inception and a carrying value of $209,000 at March 31, 2024. The 7.75% interest rate on the operating lease is based on the Company’s incremental borrowing rate at inception.

Schedules related to the Company’s operating leases at March 31, 2024 can be found below:

Operating Lease-Weighted Average Remaining Term


		Present value of
		remaining
	Years left	liability		Lease end	Fiscal year end
Operating lease 1	1.0	$	86,364	3/31/2025	2025
Operating lease 2	0.2		23,636	5/31/2024	2024
Operating lease 3	3.8		2,399,040	12/31/2027	2027
Operating lease 4	0.5		63,671	9/30/2024	2024
Operating lease 5	2.0		208,803	3/31/2026	2026
		$	2,781,514

Weighted average remaining term			3.4 years


Operating Lease Maturity Schedule
April 2024 to March 2025	$	1,549,641
April 2025 to March 2026		1,267,823
April 2026 to March 2027		718,798
April 2027 to March 2028		95,200
		3,631,462
Less amounts representing interest		(849,948)
Present value of operating lease liabilities	$	2,781,514

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	Three Months Ended		Six Months Ended		Three Months Ended		Six Months Ended
	March 31,		March 31,		March 31,		March 31,
Operating Lease Expense	2024		2024		2023		2023
Amortization
Operating lease 1	$	19,931	$	46,636	$	19,052	$	37,893
Operating lease 2		16,791		33,396		15,398		30,957
Operating lease 3		168,674		330,398		109,157		177,685
Operating lease 4		19,302		61,030		31,707		61,319
Operating lease 5		22,510		53,368		7,006		7,006
Total amortization		247,208		524,828		182,320		314,860

Interest
Operating lease 1		1,069		2,364		1,947		4,107
Operating lease 2		318		822		1,046		2,265
Operating lease 3		49,828		118,738		19,642		32,212
Operating lease 4		2,298		3,770		819		1,981
Operating lease 5		3,788		7,994		1,760		1,760
Total interest		57,301		133,688		25,214		42,325
Total amortization and interest	$	304,509	$	658,516	$	207,534	$	357,185


	Three Months Ended		Six Months Ended		Three Months Ended		Six Months Ended
	March 31,		March 31,		March 31,		March 31,
Cash Paid for Operating Leases	2024		2024		2023		2023
Operating lease 1	$	21,000	$	49,000	$	20,999	$	42,000
Operating lease 2		17,109		34,218		16,444		33,222
Operating lease 3		218,502		449,136		130,933		212,031
Operating lease 4		21,600		64,800		21,996		52,770
Operating lease 5		26,298		61,362		17,162		17,162
	$	304,509	$	658,516	$	207,534	$	357,185

The Company rents equipment for use on construction projects with rental agreements being week to week or month to month. Rental expense can vary by reporting period due to equipment requirements on construction projects and the availability of Company owned equipment. Rental expense, which is included in cost of goods sold on the consolidated statements of income, was $3.3 million and $1.5 million, respectively, for the three months ended March 31, 2024 and 2023. Rental expense was $8.7 million and $4.2 million, respectively, for the six months ended March 31, 2024 and 2023.

15. SUBSEQUENT EVENTS

On April 17, 2024, the United States Court of Appeals for the Third Circuit (the “Court”) affirmed the decision of the United States District Court for the Western District of Pennsylvania in a lawsuit filed by the Company against a former customer (“Defendant”) related to a dispute over work performed on a pipeline contract. On May 1, 2024, the Defendant filed a Petition for Rehearing or Rehearing En Banc with the Court. Please see Litigation on page 31 for further details.

Management has evaluated all subsequent events for accounting and disclosure. There have been no other material events during the period, other than noted above, that would either impact the results reflected in the report or the Company’s results going forward.

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ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion of the financial condition and results of operations of Energy Services in conjunction with the “Financial Statements” appearing in this report as well as the historical financial statements and related notes contained elsewhere herein. Among other things, those historical consolidated financial statements include more detailed information regarding the basis of presentation for the following information. The term “Energy Services” refers to the Company, West Virginia Pipeline, SQP, Tri-State Paving, Ryan Construction, and C.J. Hughes and C.J. Hughes’ wholly owned subsidiaries on a consolidated basis.

Forward Looking Statements

Within Energy Services’ (as defined below) consolidated financial statements and this Quarterly Report on Form 10-Q, there are included statements reflecting assumptions, expectations, projections, intentions, or beliefs about future events that are intended as “forward-looking statements” under the Private Securities Litigation Reform Act of 1995. You can identify these statements by the fact that they do not relate strictly to historical or current facts. They use words such as “anticipate,” “estimate,” “project,” “forecast,” “may,” “will,” “should,” “could,” “expect,” “believe,” “intend” and other words of similar meaning.

These forward-looking statements do not guarantee future performance and involve or rely on risks, uncertainties, and assumptions that are difficult to predict or beyond Energy Services’ control. Energy Services has based its forward-looking statements on management’s beliefs and assumptions based on information available to management at the time the statements are made. Actual outcomes and results may differ materially from what is expressed, implied, and forecasted by forward-looking statements and any or all of Energy Services’ forward-looking statements may turn out to be wrong. The accuracy of such statements can be affected by inaccurate assumptions and by known or unknown risks and uncertainties.

All the forward-looking statements, whether written or oral, are expressly qualified by these cautionary statements and any other cautionary statements that may accompany such forward-looking statements or that are otherwise included in this report. In addition, Energy Services does not undertake and expressly disclaims any obligation to update or revise any forward-looking statements to reflect events or circumstances after the date of this report or otherwise.

Company Overview

Energy Services’ customers include many of the leading companies in the industries it serves, including:

TransCanada Corporation

NiSource, Inc.

Marathon Petroleum

Mountaineer Gas

American Electric Power

Toyota Motor Manufacturing

Bayer Chemical

Dow Chemical

Kentucky American Water

West Virginia American Water

Various state, county and municipal public service districts.

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The majority of the Company’s customers are in West Virginia, Virginia, Ohio, Pennsylvania, and Kentucky. However, the Company also performs work in other states including Alabama, Michigan, Illinois, Tennessee, North Carolina, and Indiana.

Energy Services’ sales force consists of industry professionals with significant relevant sales experience, who utilize industry contacts and available public data to determine how to market the Company’s line of products most appropriately. The Company relies on direct contact between its sales force and customers’ engineering and contracting departments to obtain new business.

A substantial portion of the Company’s workforce are union members of various construction-related trade unions and are subject to separately negotiated collective bargaining agreements that expire at varying time intervals. The Company believes its relationship with its unionized workforce is good.

The Company’s website address is www.energyservicesofamerica.com.

Seasonality: Fluctuation of Results

Our revenues and results of operations can and usually are subject to seasonal variations. These variations are the result of weather, customer spending patterns, bidding seasons and holidays. The first quarter of the calendar year is typically the slowest in terms

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of revenues because inclement weather conditions cause delays in production and customers usually do not plan large projects during that time. While usually better than the first quarter, the second calendar year quarter often has some inclement weather which can cause delays in production, reducing the revenues the Company receives and/or increasing the production costs. The third and fourth calendar year quarters usually are less impacted by weather and usually have the largest number of projects underway. Many projects are completed in the fourth calendar year quarter and revenues are often impacted by customers seeking to either spend their capital budget for the year or scale back projects due to capital budget overruns.

In addition to the fluctuations discussed above, the pipeline industry can be highly cyclical, reflecting variances in capital expenditures in proportion to energy price fluctuations. As a result, our volume of business may be adversely affected by where our customers are in the cycle and thereby their financial condition as to their capital needs and access to capital to finance those needs.

Three and Six Months Ended March 31, 2024 and 2023 Overview

The following is an overview of results from operations for the three and six months ended March 31,2024 and 2023:


	Three Months Ended		Three Months Ended		Six Months Ended		Six Months Ended
	March 31,		March 31,		March 31,		March 31,
	2024		2023		2024		2023
Revenue	$	71,127,655	$	53,673,443	$	161,290,842	$	113,716,028

Cost of revenues		64,888,101		49,772,790		144,212,327		103,829,113

Gross profit		6,239,554		3,900,653		17,078,515		9,886,915

Selling and administrative expenses		7,321,951		5,887,747		14,520,671		11,203,885
(Loss) income from operations		(1,082,397)		(1,987,094)		2,557,844		(1,316,970)

Other income (expense)
Interest income		0		124		0		196
Other nonoperating expense		(81,790)		(10,524)		(6,789)		(91,187)
Interest expense		(622,616)		(574,546)		(1,224,300)		(1,073,974)
Gain on sale of equipment		304,923		48,280		291,595		16,937
		(399,483)		(536,666)		(939,494)		(1,148,028)

(Loss) income before income taxes		(1,481,880)		(2,523,760)		1,618,350		(2,464,998)

Income tax (benefit) expense		(373,052)		(650,160)		684,983		(729,772)

Net (loss) income	$	(1,108,828)	$	(1,873,600)	$	933,367	$	(1,735,226)

Weighted average shares outstanding-basic		16,569,871		16,666,683		16,567,853		16,667,062

Weighted average shares-diluted		16,569,871		16,666,683		16,606,075		16,667,062

(Loss) earnings per share-basic	$	(0.07)	$	(0.11)	$	0.06	$	(0.10)

(Loss) earnings per share-diluted	$	(0.07)	$	(0.11)	$	0.06	$	(0.10)

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Results of Operations for the Three and Six Months Ended March 31, 2024 Compared to the Three and Six Months Ended March 31, 2023

Revenues. A table comparing the Company’s revenues for the three and six months ended March 31, 2024 compared to the three and six months ended March 31, 2023 is below:


	Three Months Ended
	March 31, 2024		% of total		March 31, 2023		% of total		Change		% Change
Gas & Water Distribution	$	14,273,691	20.1	%	$	13,432,107	25.0	%		841,584	6.3	%
Gas & Petroleum Transmission		9,763,078	13.7	%		5,334,861	9.9	%		4,428,217	83.0	%
Electrical, Mechanical, and General		47,090,886	66.2	%		34,906,475	65.0	%		12,184,411	34.9	%
Total	$	71,127,655	100.0	%	$	53,673,443	100.0	%		17,454,212	32.5	%


	Six Months Ended
	March 31, 2024		% of total		March 31, 2023		% of total		Change		% Change
Gas & Water Distribution	$	31,356,586	19.4	%		25,919,952	22.8	%	$	5,436,634	21.0	%
Gas & Petroleum Transmission		38,326,321	23.8	%		22,229,675	19.5	%		16,096,646	72.4	%
Electrical, Mechanical, and General		91,607,935	56.8	%		65,566,401	57.7	%		26,041,534	39.7	%
Total	$	161,290,842	100.0	%		113,716,028	100.0	%	$	47,574,814	41.8	%

Total revenues increased by $17.5 million to $71.1 million for the three months ended March 31, 2024, as compared to $53.7 million for the three months ended March 31, 2023. Total revenues increased by $47.6 million to $161.3 million for the six months ended March 31, 2024, as compared to $113.7 million for the six months ended March 31, 2023. The increases were a result of increased work in all categories of business.

Gas & Water Distribution revenues totaled $14.3 million for the three months ended March 31, 2024, an $842,000 increase from $13.4 million for the three months ended March 31, 2023. Gas & Water Distribution revenues totaled $31.4 million for the six months ended March 31, 2024, a $5.4 million increase from $25.9 million for the six months ended March 31, 2023. The revenue increases were primarily related to increased paving and gas and water distribution services performed during the three and six months ended March 31, 2024, as compared to the same periods in 2023.

Gas & Petroleum Transmission revenues totaled $9.8 million for the three months ended March 31, 2024, a $4.5 million increase from $5.3 million for the three months ended March 31, 2023. Gas & Petroleum Transmission revenues totaled $38.3 million for the six months ended March 31, 2024, a $16.1 million increase from $22.2 million for the six months ended March 31, 2023. The revenue increases were primarily related to gas transmission work that was awarded during the fiscal year ended September 30, 2023 and continued into fiscal year 2024.

Electrical, Mechanical, & General construction services revenues totaled $47.1 million for the three months ended March 31, 2024, a $12.2 million increase from $34.9 million for the three months ended March 31, 2023. Electrical, Mechanical, & General construction services revenues totaled $91.6 million for the six months ended March 31, 2024, a $26.0 million increase from $65.6 million for the six months ended March 31, 2023. The revenue increases were primarily related to an increase in general contracting and electrical services performed during the three and six months ended March 31, 2024, as compared to the same period in the prior year.

Cost of Revenues. A table comparing the Company’s costs of revenues for the three and six months ended March 31, 2024, compared to the three and six months ended March 31, 2023, is below:


	Three Months Ended
	March 31, 2024		% of total		March 31, 2023		% of total		Change		% Change
Gas & Water Distribution	$	11,872,154	18.3	%	$	10,592,157	21.3	%	$	1,279,997	12.1	%
Gas & Petroleum Transmission		9,532,562	14.7	%		5,754,933	11.6	%		3,777,629	65.6	%
Electrical, Mechanical, & General		42,375,485	65.3	%		32,491,030	65.3	%		9,884,455	30.4	%
Unallocated Shop Expense		1,107,900	1.7	%		934,670	1.9	%		173,230	18.5	%
Total	$	64,888,101	100.0	%	$	49,772,790	100.0	%	$	15,115,311	30.4	%

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	Six Months Ended
	March 31, 2024		% of total		March 31, 2023		% of total		Change		% Change
Gas & Water Distribution	$	24,969,147	17.3	%	$	21,264,430	20.5	%	$	3,704,717	17.4	%
Gas & Petroleum Transmission		34,699,168	24.1	%		19,835,710	19.1	%		14,863,458	74.9	%
Electrical, Mechanical, & General		83,430,618	57.9	%		61,497,995	59.2	%		21,932,623	35.7	%
Unallocated Shop Expense		1,113,394	0.8	%		1,230,978	1.2	%		(117,584)	(9.6)	%
Total	$	144,212,327	100.0	%	$	103,829,113	100.0	%	$	40,383,214	38.9	%

Total cost of revenues increased by $15.1 million to $64.9 million for the three months ended March 31, 2024, as compared to $49.8 million for the three months ended March 31, 2023. Total cost of revenues increased by $40.4 million to $144.2 million for the six months ended March 31, 2024, as compared to $103.8 million for the six months ended March 31, 2023. The cost of revenues increases were a result of increased work in all categories of business, partially offset by less unallocated shop expenses for the three and six months ended March 31, 2024 as compared to the same period in 2023.

Gas & Water Distribution cost of revenues totaled $11.9 million for the three months ended March 31, 2024, a $1.3 million increase from $10.6 million for the three months ended March 31, 2023. Gas & Water Distribution cost of revenues totaled $25.0 million for the six months ended March 31, 2024, a $3.7 million increase from $21.3 million for the six months ended March 31, 2023. The cost of revenues increases were primarily related to increased paving and gas and water distribution services performed during the six months ended March 31, 2024, as compared to the same periods in 2023.

Gas & Petroleum Transmission cost of revenues totaled $9.5 million for the three months ended March 31, 2024, a $3.8 million increase from $5.8 million for the three months ended March 31, 2023. Gas & Petroleum Transmission cost of revenues totaled $34.7 million for the six months ended March 31, 2024, a $14.9 million increase from $19.8 million for the six months ended March 31, 2023. The cost of revenues increases were primarily related to gas transmission work that was awarded during the fiscal year ended September 30, 2023 and continued into fiscal year 2024.

Electrical, Mechanical, & General construction services cost of revenues totaled $42.4 million for the three months ended March 31, 2024, a $9.9 million increase from $32.5 million for the three months ended March 31, 2023. Electrical, Mechanical, & General construction services cost of revenues totaled $83.4 million for the six months ended March 31, 2024, a $21.9 million increase from $61.5 million for the six months ended March 31, 2023. The cost of revenues increases were primarily related to an increase in general contracting and electrical services performed during the three and six months ended March 31, 2024, as compared to the same period in the prior year.

Unallocated shop expenses totaled $1.1 million for the three months ended March 31, 2024, a $173,000 increase from $935,000 for the three months ended March 31, 2023. Unallocated shop expenses totaled $1.1 million for the six months ended March 31, 2024, a $118,000 decrease from $1.2 million for the six months ended March 31, 2023. The changes in unallocated shop expenses were due to changes in the amount of internal equipment charged to projects for the three and six months ended March 31, 2024, as compared to the same period in the prior year.

Gross Profit (Loss). A table comparing the Company’s gross profit (loss) for the three and six months ended March 31, 2024, compared to the three and six months ended March 31, 2023, is below:


	Three Months Ended
	March 31, 2024		% of revenue		March 31, 2023		% of revenue		Change		Pct.
Gas & Water Distribution	$	2,401,537	16.82	%	$	2,839,950	21.14	%		(438,413)	(15.4)	%
Gas & Petroleum Transmission		230,516	2.36	%		(420,072)	(7.87)	%		650,588	(154.9)	%
Electrical, Mechanical, & General		4,715,401	10.01	%		2,415,445	6.92	%		2,299,956	95.2	%
Unallocated Shop Expense		(1,107,900)				(934,670)				(173,230)	18.5	%
Total	$	6,239,554	8.8	%	$	3,900,653	7.3	%		2,338,901	60.0	%

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	Six Months Ended
	March 31, 2024		% of revenue		March 31, 2023		% of revenue		Change		% Change
Gas & Water Distribution	$	6,387,439	20.37	%	$	4,655,522	17.96	%	$	1,731,917	37.2	%
Gas & Petroleum Transmission		3,627,153	9.46	%		2,393,965	10.77	%		1,233,188	51.5	%
Electrical, Mechanical, & General		8,177,317	8.93	%		4,068,406	6.21	%		4,108,911	101.0	%
Unallocated Shop Expense		(1,113,394)				(1,230,978)				117,584	(9.6)	%
Total	$	17,078,515	10.6	%	$	9,886,915	8.7	%	$	7,191,600	72.7	%

Total gross profit increased by $2.4 million to $6.2 million for the three months ended March 31, 2024, as compared to $3.9 million for the three months ended March 31, 2023. Total gross profit increased by $7.2 million to $17.1 million for the six months ended March 31, 2024, as compared to $9.9 million for the six months ended March 31, 2023.

Gas & Water Distribution gross profit totaled $2.4 million for the three months ended March 31, 2024, a $438,000 decrease from $2.8 million for the three months ended March 31, 2023. The gross profit decrease was primarily due to inclement weather conditions and training and certification expenses incurred during the three months ended March 31, 2024. Gas & Water Distribution gross profit totaled $6.4 million for the six months ended March 31, 2024, a $1.7 million increase from $4.7 million for the six months ended March 31, 2023. The gross profit increase was primarily related to increased paving and gas and water distribution services performed during the six months ended March 31, 2024, as compared to the same period in 2023.

Gas & Petroleum Transmission gross profit totaled $231,000 for the three months ended March 31, 2024, a $651,000 increase from ($420,000) for the three months ended March 31, 2023. Gas & Petroleum Transmission gross profit totaled $3.6 million for the six months ended March 31, 2024, a $1.2 million increase from $2.4 million for the six months ended March 31, 2023. The gross profit increases were primarily related to gas transmission work that was awarded during the fiscal year ended September 30, 2023 and continued into fiscal year 2024.

Electrical, Mechanical, & General construction services gross profit totaled $4.7 million for the three months ended March 31, 2024, a $2.3 million increase from $2.4 million for the three months ended March 31, 2023. Electrical, Mechanical, & General construction services gross profit totaled $8.2 million for the six months ended March 31, 2024, a $4.1 million increase from $4.1 million for the six months ended March 31, 2023. The gross profit increases were primarily related to an increase in general contracting and electrical services performed during the three and six months ended March 31, 2024, as compared to the same periods in the prior year.

Gross loss attributable to unallocated shop expenses totaled $1.1 million for the three months ended March 31, 2024, a $173,000 increase from $935,000 for the three months ended March 31, 2023. Gross loss attributable to unallocated shop expenses totaled $1.1 million for the six months ended March 31, 2024, a $118,000 decrease from $1.2 million for the six months ended March 31, 2023. The changes in unallocated shop expenses were due to changes in the amount of internal equipment charged to projects for the three and six months ended March 31, 2024, as compared to the same periods in the prior year.

Selling and administrative expenses. Total selling and administrative expenses increased by $1.4 million to $7.3 million for the three months ended March 31, 2024, as compared to $5.9 million for the same period in the prior year. Total selling and administrative expenses increased by $3.3 million to $14.5 million for the six months ended March 31, 2024, as compared to $11.2 million for the same period in the prior year. The increase was primarily related to additional personnel hired to secure and manage work for expected growth.

Other nonoperating income (expense). Other nonoperating expenses totaled $81,000 for the three months ended March 31, 2024, as compared to $11,000 for the same period in the prior year. The change was primarily related to an increase in charitable contributions. Other nonoperating expenses totaled $6,000 for the six months ended March 31, 2024, as compared to $91,000 for the same period in the prior year. The change was primarily related to an immaterial legal settlement that recouped costs expended in a prior period.

Interest expense. Interest expense totaled $623,000 for the three months ended March 31, 2024, an increase of $48,000 from $575,000 for the same period in the prior year. Interest expense totaled $1.2 million for the six months ended March 31, 2024, an increase of $150,000 from $1.1 million for the same period in the prior year. The increase in interest expense was primarily due to interest paid for equipment financing added in late fiscal year 2023 and an increase in interest rates.

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Gain on sale of equipment. Gain on sale of equipment totaled $305,000 for the three months ended March 31, 2024, an increase of $257,000 from $48,000 for the same period in the prior year. Gain on sale of equipment totaled $292,000 for the six months ended March 31, 2024, an increase of $275,000 from $17,000 for the same period in the prior year. The Company sold certain underutilized or non-working pieces of equipment during the three and six months ended March 31, 2024, with no comparable sale occurring during the three and six months ended March 31, 2023.

Net income (loss). Loss before income taxes was $1.5 million for the three months ended March 31, 2024, as compared to $2.5 million for the same period in the prior year. Income before income taxes was $1.6 million for the six months ended March 31, 2024, as compared to a loss before income taxes of $2.5 million for the same period in the prior year. The increases were primarily related to the items mentioned above.

Income tax benefit for the three months ended March 31, 2024, was $373,000 compared to $650,000 for the same period in the prior year. The decrease in income tax benefit was due to the increase in taxable income for the three months ended March 31, 2024, as compared to the prior period. Income tax expense for the six months ended March 31, 2024, was $685,000 compared to an income tax benefit of $730,000 for the same period in the prior year. The increase in income tax expense was due to the increase in taxable income for the six months ended March 31, 2024, as compared to the prior year period.

Net loss for the three months ended March 31, 2024, was $1.1 million, as compared to $1.9 million for the same period in the prior year. Net income for the six months ended March 31, 2024 was $933,000, as compared to a net loss of $1.7 million for the same period in 2023.

Comparison of Financial Condition at March 31, 2024, and September 30, 2023

The Company had total assets of $136.1 million at March 31, 2024, a decrease of $6.4 million from the prior fiscal year end balance of $142.5 million.

Accounts receivable, net of allowance for doubtful accounts, totaled $46.4 million at March 31, 2024, a decrease of $4.8 million from the prior fiscal year end balance of $51.2 million. The decrease was primarily due to the timing of cash collections and project invoicing since September 30, 2023.

Cash and cash equivalents totaled $12.1 million at March 31, 2024, a decrease of $4.3 million from the prior fiscal year end balance of $16.4 million. The decrease was primarily due to a net $2.6 million investment in equipment, and a net $1.9 million used in financing activities, partially offset by a net $183,000 provided from operating activities.

Contract assets totaled $14.6 million at March 31, 2024, a decrease of $1.3 million from the prior fiscal year end balance of $16.0 million. The decrease was due to a difference in the timing of project billings at March 31, 2024, compared to September 30, 2023.

Right-of-use assets totaled $2.8 million at March 31, 2024, a decrease of $560,000 from the prior fiscal year end balance of $3.3 million. The decrease was primarily due to the amortization of operating leases during the six months ended March 31, 2024, partially offset by a net increase in leased vehicles.

Intangible assets, net totaled $3.2 million at March 31, 2024, a decrease of $216,000 from the prior fiscal year end balance of $3.4 million. The decrease was due to the amortization of intangible assets during the six months ended March 31, 2024.

Retainage receivable totaled $10.1 million at March 31, 2024, an increase of $2.5 million from the prior fiscal year end balance of $7.6 million. The increase was primarily due to more current year projects that require retainages to be withheld.

Prepaid expenses and other totaled $5.1 million at March 31, 2024, an increase of $1.6 million from the prior fiscal year end balance of $3.5 million. The increase was primarily due to an increase in prepaid insurance that will be expense throughout fiscal year 2024.

The Company had net property, plant and equipment of $37.0 million at March 31, 2024, an increase of $448,000 from the prior fiscal year end balance of $36.5 million. The increase was due to $5.3 million in asset additions, partially offset by $4.2 million in depreciation and net equipment disposals of $652,000.

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Goodwill totaled $4.1 million at March 31, 2024 and September 30, 2023.

The Company had total liabilities of $101.6 million at March 31, 2024, a decrease of $6.4 million from the prior fiscal year end balance of $107.9 million.

Accounts payable totaled $18.7 million at March 31, 2024, a decrease of approximately $3.3 million from the prior fiscal year end balance of $22.0 million. The decrease was due to the timing of accounts payable payments as compared to September 30, 2023.

Accrued expenses and other current liabilities totaled $10.9 million at March 31, 2024, a decrease of $2.2 million from the prior fiscal year end balance of $13.1 million. The decrease was due to the timing of accrued expense payments, as compared to September 30, 2023.

Long-term debt totaled $23.2 million at March 31, 2024, a decrease of $1.8 million from the prior fiscal year end balance of $25.0 million. The decrease in long-term debt was primarily due to $3.5 million in payments on long-term debt, partially offset by $1.8 million in new equipment financing.

Contract liabilities totaled $16.3 million at March 31, 2024, a decrease of $1.4 million from the prior fiscal year end balance of $17.7 million. The decrease was due to a difference in the timing of project billings at March 31, 2024, as compared to September 30, 2023.

Current and long-term operating lease liabilities totaled $2.8 million at March 31, 2024, a decrease of $569,000 from the prior fiscal year end balance of $3.4 million. The decrease was due to payments made during the six months ended March 31, 2024.

Lines of credit and short-term borrowings totaled $22.5 million at March 31, 2024, an increase of $2.6 million from the prior fiscal year end balance of $19.8 million. The increase was primarily due to additional line of credit borrowings.

Deferred tax liabilities totaled $7.2 million at March 31, 2024, an increase of $331,000 from the prior fiscal year end balance of $6.9 million. The increase was primarily related to the reduction of the net operating loss carry forward during the six months ended March 31, 2024.

Shareholders’ equity was $34.6 million at March 31, 2024, a decrease of $25,000 from the prior fiscal year end balance of $34.6 million. The increase was primarily due to net income of $933,000 for the six months ended March 31, 2024, mostly offset by an annual cash dividend payment of $994,000 on January 2, 2024.

Liquidity and Capital Resources

Operating Line of Credit

The line of credit is limited to a borrowing base calculation as summarized below:


	March 31, 2024			September 30, 2023
Eligible borrowing base	$	21,267,302		$	23,942,868

Borrowed on line of credit		12,300,000			8,712,915

Line of credit balance available	$	8,967,302		$	15,229,953

Interest rate		8.5	%		8.5	%

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The modified financial covenants for the quarter ended June 30, 2023, and all subsequent quarters, are below:

●

Minimum tangible net worth of $28.0 million,

●

Minimum traditional debt service coverage of 1.50x on a rolling twelve- month basis,

●

Minimum current ratio of 1.20x,

●

Maximum debt to tangible net worth ratio (“TNW”) of 2.75x,

●

Each ratio and covenant shall be determined, tested, and measured as of each calendar quarter beginning June 30, 2023,

●

Insurance Premiums Financed

Paycheck Protection Program Loans

During April 2023, management received notification from the SBA that one of the Company’s forgiveness applications related to the PPP Loans was under review. As part of the review, the SBA requested additional payroll information. Additionally, the SBA requested information regarding the ability of the Company’s affiliates to meet SBA size standards and/or PPP corporate maximum limits. The requested information was subsequently provided to the SBA through the Lender. The Company recognizes that there is a possibility that the SBA could reverse its previous determination on the forgiveness of the PPP Loans. As a result of this uncertainty, the Company restated the previously audited financial statements of the Company for the fiscal years 2022 and 2021. The Company has recorded a short-term borrowing due to the SBA inquiry for the full $9.8 million, plus accrued interest.

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the Company does not qualify in whole or in part for loan forgiveness and demand repayment of the loans. In addition, it is unknown what type of penalties could be assessed against the Company if the SBA disagrees with the Company’s certification. Any penalties in addition to the potential repayment of the PPP Loans could negatively impact the Company’s business, financial condition and results of operations and prospects.

Long-Term Debt

On December 16, 2014, the Company’s Nitro subsidiary entered into a 20-year $1.2 million loan agreement with a bank to purchase the office building and property it had previously been leasing. The interest rate on this loan agreement is 4.82% with monthly payments of $7,800. The interest rate on this note is subject to change from time to time based on changes in the U.S. Treasury yield, adjusted to a constant maturity of three years as published by the Federal Reserve weekly. As of March 31, 2024, the Company had made principal payments of $413,000. The loan is collateralized by the building purchased under this agreement. The note is currently held by Peoples Bank, Inc., formerly First Bank of Charleston, Inc. (West Virginia).

On November 13, 2015, the Company entered into a 10-year $1.1 million loan agreement with United Bank to purchase the fabrication shop and property Nitro had previously been leasing. The variable interest rate on the loan agreement is 9.5% at March 31, 2024. As of March 31, 2024, the Company had made principal payments of $868,000. The loan is collateralized by the building and property purchased under this agreement.

On December 31, 2020, West Virginia Pipeline Acquisition Company, later renamed West Virginia Pipeline, Inc., entered into a $3.0 million sellers’ note agreement with David and Daniel Bolton for the remaining purchase price of West Virginia Pipeline, Inc. For the purchase price allocation, the $3.0 million note had a fair value of $2.85 million. As part of the $6.35 million acquisition price, the Company paid $3.5 million in cash in addition to the note. The unsecured five-year term note requires annual payments of at least $500,000 with a fixed interest rate of 3.25% on the $3.0 million sellers’ note, which equates to 5.35% on the carrying value of the note. As of March 31, 2024, the Company had made annual installment payments of $2.1 million.

On January 4, 2021, the Company entered into a $3.0 million Non-Revolving Note agreement with United Bank. This five-year agreement gave the Company access to a $3.0 million line of credit (“Equipment Line of Credit 2021”), specifically for the purchase of equipment, for a period of twelve months with a variable interest rate initially established at 4.25% as based on the Prime Rate as published by The Wall Street Journal. After twelve months, all borrowings against the Equipment Line of Credit 2021 were converted to a four-year term note agreement with a variable interest rate initially established at 4.25%. The loan is collateralized by the equipment purchased under this agreement. As of March 31, 2024, the Company borrowed $3.0 million against this line of credit with monthly payments of $68,150 that started in February 2022. The interest rate at March 31, 2023 was 9.5%. The Company has made principal payments of $1.5 million on this note as of March 31, 2024.

On April 2, 2021, the Company entered into a $3.5 million Non-Revolving Note agreement with United Bank. This five-year agreement repaid the outstanding $3.5 million line of credit that was used for the down payment on the West Virginia Pipeline acquisition. This loan has monthly installment payments of $64,853 and has a fixed interest rate of 4.25%. The loan is collateralized by the Company’s equipment and receivables. As of March 31, 2024, the Company had made principal payments of $2.0 million.

On April 29, 2022, the Company entered into a $7.5 million Non-Revolving Note agreement with United Bank. This five-year agreement was used to finance the purchase of Tri-State Paving and has monthly payments of $129,910 with a fixed interest rate of 4.25%. The Company has made principal payments of $2.5 million on this note as of March 31, 2024.

On October 10, 2022, the Company entered into a $3.1 million promissory note agreement with United Bank. This five-year agreement financed the previous cash value of equipment purchased in the Ryan Construction acquisition. This loan has monthly installment payments of $59,932 and has a fixed interest rate of 6.0%. The loan is collateralized by the Company’s equipment and receivables. As of March 31, 2024, the Company had made principal payments of $783,000.

On April 29, 2022, the Company entered into a $1.0 million promissory note agreement with Corns Enterprises, a related party, as partial consideration for the purchase of Tri-State Paving. David E. Corns remained as president of Tri-State Paving. This four-year agreement requires $250,000 principal installment payments on or before the end of each twelve (12) full calendar month period beginning April 29, 2022. Interest payments due shall be calculated on the principal balance remaining and shall be at the stated rate of 3.5% per year. The Company has made principal payments of $750,000 on this note as of March 31, 2024.

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On June 1, 2023, the Company entered into a $9.3 million Non-Revolving Note agreement with United Bank. This five-year agreement gave the Company access to a $9.3 million line of credit (“Equipment Line of Credit 2023”), specifically for the purchase of equipment, for a period of six months with a fixed interest rate of 7.25%. After six months, all borrowings against the Equipment Line of Credit 2023 will convert to a fifty-four-month term note agreement with a fixed interest rate of 7.25%. The loan is collateralized by the equipment purchased under this agreement. As of March 31, 2024, the Company had borrowed $9.3 million against this line of credit and made $588,000 in principal payments.

Operating Leases

The Company had two lease agreements for construction equipment with a combined amount of $160,000 that were paid in full as of March 31, 2024. The leases had a term of twenty-two months with a stated interest rate of 0%, combined monthly installment payments of $6,645 and were cancellable at any time without penalty. The Company exercised the right to purchase the equipment at the expiration of the leases by applying the two-month deposit paid. The related assets and finance lease obligations associated with these lease agreements had been included in the consolidated balance sheets within property, plant and equipment and long-term debt.

Off-Balance Sheet Arrangements

Due to the nature of our industry, we often enter into certain off-balance sheet arrangements in the ordinary course of business that result in risks not directly reflected in our balance sheets. Though for the most part not material in nature, some of these are:

Rental Agreements

The Company rents equipment for use on construction projects with rental agreements being week to week or month to month. Rental expense can vary by reporting period due to equipment requirements on construction projects and the availability of Company owned equipment. Rental expense, which is included in cost of goods sold on the consolidated statements of income, was $3.3 million and $1.5 million, respectively, for the three months ended March 31, 2024 and 2023. Rental expenses were $8.7 million and $4.2 million, respectively, for the six months ended March 31, 2024 and 2023.

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Letters of Credit

Certain customers or vendors may require letters of credit to secure payments that the vendors are making on our behalf or to secure payments to subcontractors and vendors on various customer projects. At March 31, 2024, the Company did not have any letters of credit outstanding.

Performance Bonds

Some customers, particularly new ones or governmental agencies require the Company to post bid bonds, performance bonds and payment bonds (collectively, performance bonds). These performance bonds are obtained through insurance carriers and guarantee to the customer that we will perform under the terms of a contract and that we will pay subcontractors and vendors. If the Company fails to perform under a contract or to pay subcontractors and vendors, the customer may demand that the insurer make payments or provide services under the bond. The Company must reimburse the insurer for any expenses or outlays it is required to make.

Currently, the Company has an agreement with a surety company to provide bonding which will suit the Company’s immediate needs. The ability to obtain bonding for future contracts is an important factor in the contracting industry with respect to the type and value of contracts that can be bid. Depending upon the size and conditions of a particular contract, the Company may be required to post letters of credit or other collateral in favor of the insurer. Posting of these letters or other collateral will reduce our borrowing capabilities. The Company does not anticipate any claims in the foreseeable future. At March 31, 2024, the Company had $94.9 million in performance bonds outstanding.

Concentration of Credit Risk

In the ordinary course of business, the Company grants credit under normal payment terms, generally without collateral, to our customers, which include natural gas and oil companies, general contractors, and various commercial and industrial customers located within the United States. Consequently, the Company is subject to potential credit risk related to business and economic factors that would affect these companies. However, the Company generally has certain statutory lien rights with respect to services provided. Under certain circumstances such as foreclosure, the Company may take title to the underlying assets in lieu of cash in settlement of receivables.

Please see the tables below for customers that represent 10.0% or more of the Company’s revenue or accounts receivable, net of retention for the three and six months ended March 31, 2024 and 2023:


	Three Months Ended		Three Months Ended		Six Months Ended		Six Months Ended
	March 31,		March 31,		March 31,		March 31,
Revenue	2024		2023		2024		2023
TransCanada Corporation	*		*		15.8	%	*
All other	100.0	%	100.0	%	84.2	%	100.0	%
Total	100.0	%	100.0	%	100.0	%	100.0	%

*Less than 10.0% and included in “All other” if applicable


Accounts receivable, net of retention	at March 31, 2024		at March 31, 2023
Yates Construction	14.0	%	*
All other	86.0	%	100.0	%
Total	100.0	%	100.0	%

*Less than 10.0% and included in “All other” if applicable

Litigation

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fees have been expensed as incurred. On April 17, 2024, the United States Court of Appeals for the Third Circuit (the “Appeals Court”) affirmed the decision of the United States District Court for the Western District of Pennsylvania. On May 1, 2024, the Defendant filed a Petition for Rehearing or Rehearing En Banc with the Appeals Court.

On November 12, 2021, the Company received a withdrawal liability claim from a pension plan to which the Company made pension contributions for union construction employees performing covered work in a particular jurisdiction. The Company has not performed covered work in their jurisdiction since 2011; however, the Company disagrees with the withdrawal claim and believes it is covered by an exemption under federal law. The demand called for thirty-four quarterly installment payments of $41,000 starting December 15, 2021. The Company must comply with the demand under federal pension law; however, the Company firmly believes no withdrawal liability exists. The Company is in negotiations with the pension fund to resolve the matter and all future payments have been suspended as part of the negotiation. The Company has expensed all $164,000 in payments made through September 30, 2022 and does not expect any future liabilities related to this claim. The Company did not make any payments during the three and six months ended March 31, 2024.

Other than described above, at March 31, 2024, the Company was not involved in any legal proceedings other than in the ordinary course of business. The Company is a party from time to time to various lawsuits, claims and other legal proceedings that arise in the ordinary course of business. These actions typically seek, among other things, compensation for alleged personal injury, breach of contract and/or property damages, punitive damages, civil penalties, or other losses, or injunctive or declaratory relief. With respect to all such lawsuits, claims, and proceedings, we record reserves when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. At March 31, 2024, the Company does not believe that any of these proceedings, separately or in aggregate, would be expected to have a material adverse effect on our financial position, results of operations or cash flows.

Related Party Transactions

On April 29, 2022, the Company entered into a $1.0 million promissory note agreement with Corns Enterprises as partial consideration for the purchase of Tri-State Paving. This four-year agreement requires $250,000 principal installment payments on or before the end of each twelve (12) full calendar month period beginning April 29, 2022. Interest payments due shall be calculated on the principal balance remaining and shall be at the stated rate of 3.5% per year. The Company has made $750,000 in principal payments on this note as of March 31, 2024.

Subsequent to the April 29, 2022 acquisition of Tri-State Paving, the Company entered into an operating lease for facilities in Hurricane, West Virginia with Corns Enterprises. This thirty-six-month lease is treated as a right to use asset and has payments of $7,000 per month. The total net present value at inception was $236,000 with a carrying value of $86,000 at March 31, 2024.

SQP made an equity investment of $156,000 in 1030 Quarrier Development, LLC (“Development”) in August 2022. Development is a variable interest entity (“VIE”) that is 75% owned by 1030 Quarrier Ventures, LLC (“Ventures”) and 25% owned by SQP. SQP is not the primary beneficiary of the VIE and therefore will not consolidate Development into its consolidated financial statements. Instead, SQP will apply the equity method of accounting for its investment in Development. Development, a 1% owner, and United Bank, a 99% owner, formed 1030 Quarrier Landlord, LLC (“Landlord”). Landlord decided to pursue the following development project (the “Project”): a historical building at 1030 Quarrier Street, Charleston, West Virginia as well as associated land (the “Property”) was purchased to be developed/rehabilitated into a commercial project including apartments and commercial space. Upon the completion of development, the Property will be used to generate rental income. SQP has been awarded the construction contract for the Project. United Bank provided $5.0 million in loans to fund the Project. SQP and Ventures have jointly provided an unconditional guarantee for the $5.0 million of obligations associated with the Project.

Other than mentioned above, there were no new material related party transactions entered into during the three and six months ended March 31, 2024.

Certain Energy Services subsidiaries routinely engage in transactions in the normal course of business with each other, including sharing employee benefit plan coverage, payment for insurance and other expenses on behalf of other affiliates, and other services incidental to business of each of the affiliates. All revenue and related expense transactions, as well as the related accounts payable and accounts receivable have been eliminated in consolidation.

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Inflation

Most significant project materials, such as pipe or electrical wire, are provided by the Company’s customers. When possible, the Company attempts to lock in pricing with vendors and include qualifications regarding material costs increases in bids. Where allowed by contract, the Company will address fuel cost increases with customers. Significant inflation or supply chain issues could cause customers to delay or cancel planned projects; however, inflation did not have a significant effect on our results for the three and six months ended March 31, 2024 and 2023.

Critical Accounting Estimates

The discussion and analysis of the Company’s financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities known to exist at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. We evaluate our estimates on an ongoing basis, based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. There can be no assurance that actual results will not differ from those estimates. Management believes the following accounting policies affect our more significant judgments and estimates used in the preparation of our consolidated financial statements.

Revenues

The Company recognizes revenue as performance obligations are satisfied and control of the promised goods and service is transferred to the customer. For Lump Sum and Unit Price contracts, revenue is ordinarily recognized over time as control is transferred to the customers by measuring the progress toward complete satisfaction of the performance obligation(s) using an input (i.e., “cost to cost”) method. For Cost Plus and Time and Material (“T&M”) contracts, revenue is ordinarily recognized over time as control is transferred to the customers by measuring the progress toward satisfaction of the performance obligation(s) using an output method. The Company also does certain T&M service work that is generally completed in a short duration and is recognized at a point in time.

●

the completeness and accuracy of the original bid;

●

costs associated with scope changes;

●

changes in costs of labor and/or materials;

●

extended overhead and other costs due to owner, weather and other delays;

●

subcontractor performance issues;

●

changes in productivity expectations;

●

site conditions that differ from those assumed in the original bid;

●

changes from original design on design-build projects;

●

the availability and skill level of workers in the geographic location of the project;

●

a change in the availability and proximity of equipment and materials;

●

our ability to fully and promptly recover on affirmative claims and back charges for additional contract costs; and

●

the customer’s ability to properly administer the contract.

The foregoing factors, as well as the stage of completion of contracts in process and the mix of contracts at different margins may cause fluctuations in gross profit from period to period. Significant changes in cost estimates, particularly in our larger, more complex projects could have a significant effect on our profitability.

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on our historical experience, we generally consider the collection risk related to billable amounts to be low. When events or conditions indicate that it is probable that the amounts outstanding become unbillable, the transaction price and associated contract asset is reduced.

Our contract liabilities consist of provisions for losses and billings in excess of costs and estimated earnings. Provisions for losses are recognized in the consolidated statements of income at the uncompleted performance obligation level for the amount of total estimated losses in the period that evidence indicates that the estimated total cost of a performance obligation exceeds its estimated total revenue. Billings in excess of costs and estimated earnings are billings to customers on contracts in advance of work performed, including advance payments negotiated as a contract condition. Generally, unearned project-related costs will be earned over the next twelve months.

The following table presents our costs and estimated earnings in excess of billings and billings in excess of costs and estimated earnings at March 31, 2024 and September 30, 2023:


	March 31, 2024		September 30, 2023
Costs incurred on contracts in progress	$	403,385,426	$	287,347,650
Estimated earnings, net of estimated losses		42,599,658		38,976,895
		445,985,084		326,324,545
Less billings to date		447,645,219		328,112,326
	$	(1,660,135)	$	(1,787,781)

Costs and estimated earnings in excess of billed on uncompleted contracts	$	14,648,381	$	15,955,220

Less billings in excess of costs and estimated earnings on uncompleted contracts		16,308,516		17,743,001

	$	(1,660,135)	$	(1,787,781)

Allowance for doubtful accounts

The Company provides an allowance for doubtful accounts when collection of an account is considered doubtful. Inherent in the assessment of the allowance for doubtful accounts are certain judgments and estimates relating to, among others, our customers’ access to capital, our customers’ willingness or ability to pay, general economic conditions and the ongoing relationship with the customers. While most of our customers are large well capitalized companies, should they experience material changes in their revenues and cash flows or incur other difficulties and not be able to pay the amounts owed, this could cause reduced cash flows and losses in excess of our current reserves.

Materially incorrect estimates of bad debt reserves could result in an unexpected loss in profitability for the Company. Additionally, frequently changing reserves could be an indication of risky or unreliable customers. At March 31, 2024, the management review deemed that the allowance for doubtful accounts was adequate.

Please see the allowance for doubtful accounts table below:


	March 31, 2024		September 30, 2023
Balance at beginning of period	$	51,063	$	70,310
Charged to expense		—		—
Deductions for uncollectible receivables written off, net of recoveries		—		(19,247)
Balance at end of period	$	51,063	$	51,063

Impairment of goodwill and intangible assets

The Company follows the guidance of Accounting Standards Codification (“ASC”) 350-20-35-3 “Intangibles-Goodwill and Other (Topic 350)” which requires a company to record an impairment charge based on the excess of a reporting unit’s carrying amount of goodwill over its fair value. Under the current guidance, companies can first choose to assess any impairment based on qualitative

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factors (Step 0). If a company fails this test or decides to bypass this step, it must proceed with a quantitative assessment of goodwill impairment. The Company did not have a goodwill impairment at March 31, 2024.

Materially incorrect estimates could cause an impairment of goodwill or intangible assets and result in a loss in profitability for the Company.

A table of the Company’s intangible assets subject to amortization is below:


				Accumulated		Accumulated		Amortization		Amortization		Amortization		Amortization
	Remaining Life			Amortization		Amortization		and Impairment		and Impairment		and Impairment		and Impairment
	(in months) at			and Impairment		and Impairment		Three Months		Six Months		Three Months		Six Months		Net Book Value		Net Book Value
	March 31,			at March 31,		at September 30,		Ended March 31,		Ended March 31,		Ended March 31,		Ended March 31,		at March 31,		at September 30,
Intangible assets:	2024	Original Cost		2024		2023		2024		2024		2023		2023		2024		2023

West Virginia Pipeline:
Customer Relationships	81	$	2,209,724		718,145	$	607,661		55,242		110,484		65,647		120,889	$	1,491,579	$	1,602,063
Tradename	81		263,584		85,682		72,500		6,591		13,182		6,587		13,182		177,902		191,084
Non-competes	—		83,203		83,203		83,203		—		—		—		10,397		—		—

Revolt Energy:
Employment agreement/non-compete	—		100,000		100,000		100,000		—		—		4,167		8,334		—		—

Tri-State Paving:
Customer Relationships	97		1,649,159		316,089		233,631		41,229		82,458		41,178		82,458		1,333,070		1,415,528
Tradename	97		203,213		38,949		28,789		5,080		10,160		5,079		10,161		164,264		174,424
Non-competes	—		39,960		39,960		39,960		—		—		9,963		19,980		—		—

Total intangible assets		$	4,548,843	$	1,382,028	$	1,165,744	$	108,142	$	216,284	$	132,621	$	265,401	$	3,166,815	$	3,383,099

Depreciation and Amortization

The purpose of depreciation and amortization is to represent an accurate value of assets on the books. Every year, as assets are used, their values are reduced on the balance sheet and expensed on the income statement. As depreciation and amortization are a noncash expense, the amount must be estimated. Each year a certain amount of depreciation and amortization is written off and the book value of the asset is reduced.

Property and equipment are recorded at cost. Costs which extend the useful lives or increase the productivity of the assets are capitalized, while normal repairs and maintenance that do not extend the useful life or increase productivity of the asset are expensed as incurred. Property and equipment are depreciated principally on the straight-line method over the estimated useful lives of the assets: buildings 39 years; operating equipment and vehicles 5-7 years; and office equipment, furniture and fixtures 5-7 years.

Acquired intangible assets subject to amortization are amortized on a straight-line basis, which approximates the pattern in which the economic benefit of the respective intangible assets is realized, over their respective estimated useful lives. The definite-lived identifiable intangible assets recognized as part of the Company’s business combinations are initially recorded at their estimated fair value.

The Company’s depreciation expenses for the three months ended March 31, 2024 and 2023 were $2.1 million and $1.8 million, respectively. The Company’s depreciation expenses for the six months ended March 31, 2024 and 2023 were $4.2 million and $3.6 million, respectively. In general, depreciation is included in “cost of revenues” on the Company’s consolidated statements of income.

The Company’s amortization expenses for the three months ended March 31, 2024 and 2023 were $108,142 and $132,621, respectively. The Company’s amortization expenses for the six months ended March 31, 2024 and 2023 were $216,284 and $265,401, respectively. In general, amortization is included in “cost of revenues” on the Company’s consolidated statements of income.

Materially incorrect estimates of depreciation and amortization and/or the useful lives of assets could significantly impact the value of long-lived assets on the Company’s consolidated financial statements. A material overvaluation could result in impairment charges and reduced profitability for the Company.

Income Taxes

The Company’s income tax expenses and deferred tax assets and liabilities reflect management’s best estimate of current and future taxes to be paid. Significant judgments and estimates are required in the determination of the consolidated income tax expense.

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The Company’s provision for income taxes is computed by applying a federal rate of 21.0% and a state rate of 6.0% to taxable income or loss after consideration of non-taxable and non-deductible items.

The income tax benefit for the three months ended March 31, 2024 was $373,000 as compared to $650,000 for the three months ended March 31, 2023. The income tax expense for the six months ended March 31, 2024 was $685,000 as compared to an income tax benefit of $730,000 for the six months ended March 31, 2023. The changes were due to an increase in taxable income for the three and six months ended March 31, 2024, as compared to the same period in 2023.

The effective income tax rate for the three and six months ended March 31, 2024, was (25.2%) and 42.3%, respectively, as compared to (25.8%) and (29.6%), respectively, for the same periods in 2023. Effective income tax rates are estimates and may vary from period to period due to changes in the amount of taxable income and non-deductible expenses.

Accounting for PPP Loans

The Company’s accounting for PPP loans reflects management’s best estimate of current and future amounts to be paid. The Company applies significant judgment regarding the determination of PPP loan forgiveness based on the rules established, and subsequently clarified by the SBA, including rules related to the Company’s affiliations and meeting SBA size standards.

Refer to Note 3 “Accounting for PPP Loans” in the accompanying consolidated financial statements for additional details.

New Accounting Pronouncements

On October 28, 2021, the Financial Accounting Standards Board (“FASB”) released Accounting Standards Update (“ASU”) 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. The amendments of this ASU require entities to apply Topic 606 to recognize and measure contract assets and contract liabilities in a business combination. The amendments improve comparability after the business combination by providing consistent recognition and measurement guidance for revenue contracts with customers acquired in a business combination and revenue contracts with customers not acquired in a business combination. The amendments are effective for public business entities for the fiscal years, including interim periods within those the fiscal years, beginning after December 15, 2022. For all other entities they are effective for the fiscal years, including interim periods within those the fiscal years, beginning after December 15, 2023. Entities should apply the amendments prospectively to business combinations that occur after the effective date. Early adoption is permitted, including in any interim period, for public business entities for periods for which financial statements have not yet been issued, and for all other entities for periods for which financial statements have not yet been made available for issuance. The Company is currently assessing the effect that ASU 2021-08 will have on its results of operations, financial position and cash flows; however, the Company does not expect a significant impact.

Subsequent Events

Outlook

The following statements are based on current expectations. These statements are forward-looking, and actual results may differ materially.

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The Company is seeing a significant increase in bid opportunities for natural gas transmission and distribution projects along with electrical, mechanical, and general construction projects. The Company’s backlog at March 31, 2024, was $222.8 million, as compared to $224.6 million and $229.8 million at March 31, 2023, and September 30, 2023, respectively. While adding additional projects appears likely, no assurances can be given that the Company will be successful in bidding on projects that become available. Moreover, even if the Company obtains contracts, there can be no guarantee that the projects will go forward.

ITEM 3. Quantitative and Quantitative Disclosures About Market Risk

Not required for a smaller reporting company.

ITEM 4. Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this report. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective to ensure that information required to be disclosed in the reports that Energy Services of America Corporation files or submits under the Securities Exchange Act of 1934, is (1) recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and (2) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

There has been no change in Energy Services of America Corporation’s internal control over financial reporting during Energy Services of America Corporation’s second quarter of fiscal year 2024 that has materially affected, or is reasonably likely to materially affect, Energy Services of America Corporation’s internal control over financial reporting.

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PART II

OTHER INFORMATION

ITEM 1. Legal Proceedings

In February 2018, the Company filed a lawsuit against a former customer (the “Defendant”) in the United States District Court for the Western District of Pennsylvania. The lawsuit is related to a dispute over work performed on a pipeline construction project. On November 21, 2022, a Judgment Order was issued, and the Company was awarded $13.1 million, of which $5.8 million was the jury award, $1.6 million was for attorney’s fees, and $5.7 million was for penalties and interest. The amounts awarded by the Judgment Order have not been recognized in the Company’s consolidated financial statements as of March 31, 2024. The Company’s attorney’s fees have been expensed as incurred. On April 17, 2024, the United States Court of Appeals for the Third Circuit (the “Appeals Court”) affirmed the decision of the United States District Court for the Western District of Pennsylvania. On May 1, 2024, the Defendant filed a Petition for Rehearing or Rehearing En Banc with the Appeals Court.

ITEM 1A. Risk Factors

Please see the information disclosed in the “Risk Factors” section of our Annual Report on Form 10-K as filed with the Securities and Exchange Commission on January 16, 2024. There have been no material changes to the risk factors since the filing of the Annual Report on Form 10-K.

ITEM 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities

(a)

There have been no unregistered sales of equity securities during the period covered by the report.

(b)

None.

(c)

On July 6, 2022, the Company announced a share repurchase program (“Program”), pursuant to which the Company may, from time to time, purchase shares of its common stock for an aggregate repurchase not to exceed 1,000,000 shares, which is approximately 6.0% of its outstanding common stock. The Program has no expiration date. There were no repurchases of Energy Services of America Corporation’s shares of its common stock during the three months ended March 31, 2024.

ITEM 5. Other Information

During the second fiscal quarter of 2024, none of our directors or officers adopted or terminated any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement,” as that term is used in SEC regulations.

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ITEM 6. Exhibits


31.1		Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2		Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32		Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema Document

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		XBRL Taxonomy Extension Label Linkbase Document

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

ENERGY SERVICES OF AMERICA CORPORATION


Date: May 8, 2024	By:	/s/ Douglas V. Reynolds
		Douglas V. Reynolds
		Chief Executive Officer

Date: May 8, 2024	By:	/s/ Charles P. Crimmel
		Charles P. Crimmel
		Chief Financial Officer

Exhibit 31.1

Certification of Chief Executive Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Douglas V. Reynolds, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Energy Services of America Corporation;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 8, 2024	/s/ Douglas V. Reynolds
	Douglas V. Reynolds
	Chief Executive Officer

Exhibit 31.2

Certification of Chief Financial Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Charles P. Crimmel, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Energy Services of America Corporation;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 8, 2024	/s/ Charles P. Crimmel
	Charles P. Crimmel
	Chief Financial Officer

Exhibit 32

Certification pursuant to

18 U.S.C. Section 1350,

as adopted pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

Douglas V. Reynolds, Chief Executive Officer and Charles P. Crimmel, Chief Financial Officer of Energy Services of America Corporation (the “Company”) each certify in their capacity as officers of the Company that they have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, and that to the best of their knowledge:

1.	the report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and

2.	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 8, 2024	/s/ Douglas V. Reynolds
	Douglas V. Reynolds
	Chief Executive Officer

Date: May 8, 2024	/s/ Charles P. Crimmel
	Charles P. Crimmel
	Chief Financial Officer

Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Mar. 31, 2024	May 07, 2024
Document and Entity Information
Document Type	10-Q
Document Quarterly Report	true
Entity File Number	000-00000
Document Transition Report	false
Document Period End Date	Mar. 31, 2024
Entity Registrant Name	Energy Services of America CORP
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	20-4606266
Entity Address, Address Line One	75 West 3rd Ave.
Entity Address, City or Town	Huntington
Entity Address, Postal Zip Code	25701
Entity Address, State or Province	WV
City Area Code	304
Local Phone Number	522-3868
Title of 12(g) Security	Common Stock, Par Value $0.0001
Trading Symbol	ESOA
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		16,607,915
Entity Central Index Key	0001357971
Amendment Flag	false
Current Fiscal Year End Date	--09-30
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q2

Consolidated Balance Sheets - USD ($)	Mar. 31, 2024	Sep. 30, 2023
Current assets
Cash and cash equivalents	$ 12,091,466	$ 16,431,572
Accounts receivable-trade	46,373,286	51,219,958
Allowance for doubtful accounts	(51,063)	(51,063)
Retainages receivable	10,101,198	7,589,749
Other receivables	847,306	516,968
Contract assets	14,648,381	15,955,220
Prepaid expenses and other	5,106,870	3,520,178
Total current assets	89,117,444	95,182,582
Property, plant and equipment, at cost	87,681,355	84,329,349
less accumulated depreciation	(50,703,501)	(47,799,840)
Total property and equipment, net	36,977,854	36,529,509
Right-of-use assets-operating lease	2,766,749	3,326,405
Intangible assets, net	3,166,815	3,383,099
Goodwill	4,087,554	4,087,554
Total assets	136,116,416	142,509,149
Current liabilities
Current maturities of long-term debt	7,134,280	6,107,277
Lines of credit and short-term borrowings	22,492,890	19,847,470
Current maturities of operating lease liabilities	1,286,881	1,075,815
Accounts payable	18,669,362	22,026,639
Accrued expenses and other current liabilities	10,876,126	13,103,944
Contract liabilities	16,308,516	17,743,001
Total current liabilities	76,768,055	79,904,146
Long-term debt, less current maturities	16,087,973	18,870,529
Long-term operating lease liabilities, less current maturities	1,494,633	2,274,975
Deferred tax liability	7,201,874	6,870,510
Total liabilities	101,552,535	107,920,160
Shareholders' equity
Common stock, $.0001 par value Authorized 50,000,000 shares, 17,896,016 issued and 16,577,586 outstanding at March 31, 2024 and 17,885,615 issued and 16,567,185 outstanding at September 30, 2023	1,790	1,789
Treasury stock, 1,318,430 shares at March 31, 2024 and September 30, 2023	(132)	(132)
Additional paid in capital	60,324,300	60,288,745
Retained deficit	(25,762,077)	(25,701,413)
Total shareholders' equity Total shareholders' equity	34,563,881	34,588,989
Total liabilities and shareholders' equity	$ 136,116,416	$ 142,509,149

Consolidated Balance Sheets (Parentheticals) - $ / shares	Mar. 31, 2024	Sep. 30, 2023
Consolidated Balance Sheets
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized	50,000,000	50,000,000
Common stock, shares issued	17,896,016	17,885,615
Common stock, shares outstanding	16,577,586	16,567,185
Treasury stock, shares	1,318,430	1,318,430

Consolidated Statements of Income - USD ($)	3 Months Ended		6 Months Ended
Consolidated Statements of Income - USD ($)	Mar. 31, 2024	Mar. 31, 2023	Mar. 31, 2024	Mar. 31, 2023
Consolidated Statements of Income
Revenue	$ 71,127,655	$ 53,673,443	$ 161,290,842	$ 113,716,028
Cost of revenues	64,888,101	49,772,790	144,212,327	103,829,113
Gross profit	6,239,554	3,900,653	17,078,515	9,886,915
Selling and administrative expenses	7,321,951	5,887,747	14,520,671	11,203,885
(Loss) income from operations	(1,082,397)	(1,987,094)	2,557,844	(1,316,970)
Other income (expense)
Interest income	0	124	0	196
Other nonoperating expense	(81,790)	(10,524)	(6,789)	(91,187)
Interest expense	(622,616)	(574,546)	(1,224,300)	(1,073,974)
Gain on sale of equipment	304,923	48,280	291,595	16,937
Other nonoperating income (expense), Total	(399,483)	(536,666)	(939,494)	(1,148,028)
(Loss) income before income taxes	(1,481,880)	(2,523,760)	1,618,350	(2,464,998)
Income tax (benefit) expense	(373,052)	(650,160)	684,983	(729,772)
Net (loss) income	$ (1,108,828)	$ (1,873,600)	$ 933,367	$ (1,735,226)
Weighted average shares outstanding-basic	16,569,871	16,666,683	16,567,853	16,667,062
Weighted average shares-diluted	16,569,871	16,666,683	16,606,075	16,667,062
(Loss) earnings per share-basic	$ (0.07)	$ (0.11)	$ 0.06	$ (0.10)
(Loss) earnings per share-diluted	$ (0.07)	$ (0.11)	$ 0.06	$ (0.10)

Consolidated Statements of Cash Flows - USD ($)	6 Months Ended
Consolidated Statements of Cash Flows - USD ($)	Mar. 31, 2024	Mar. 31, 2023
Cash flows from operating activities:
Net income (loss)	$ 933,367	$ (1,735,226)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Accreted interest on PPP loans	50,172	49,742
Depreciation expense	4,181,948	3,629,111
Gain on sale of equipment	(291,595)	(16,937)
Provision for deferred taxes	331,364	(729,772)
Amortization of intangible assets	216,284	265,401
Accreted interest on notes payable	30,186	21,198
Vested restricted stock award compensation expense	35,556
Decrease in accounts receivable	4,846,672	13,713,923
Increase in retainage receivable	(2,511,449)	(1,214,242)
Increase in other receivables	(330,338)	(309,085)
Decrease in contract assets	1,306,839	4,659,578
(Increase) decrease in prepaid expenses and other	(1,586,692)	1,791,134
Decrease in accounts payable	(3,357,277)	(6,155,465)
Decrease in accrued expenses and other current liabilities	(2,237,438)	(3,010,776)
(Decrease) increase in contract liabilities	(1,434,485)	1,016,632
Net cash provided by operating activities	183,114	11,975,216
Cash flows from investing activities:
Investment in property and equipment	(3,586,106)	(5,774,905)
Proceeds from sales of property and equipment	943,938	274,624
Net cash used in investing activities	(2,642,168)	(5,500,281)
Cash flows from financing activities:
Dividends on common stock	(994,031)	(833,360)
Treasury stock purchased		(71,655)
Borrowings on lines of credit and short-term debt, net of (repayments)	2,636,849	(1,618,718)
Proceeds from long-term debt		3,100,000
Principal payments on long-term debt	(3,523,870)	(2,883,118)
Net cash used in financing activities	(1,881,052)	(2,306,851)
(Decrease) increase in cash and cash equivalents	(4,340,106)	4,168,084
Cash and cash equivalents beginning of period	16,431,572	7,427,474
Cash and cash equivalents end of period	12,091,466	11,595,558
Supplemental schedule of noncash investing and financing activities:
Purchases of property & equipment under financing agreements	1,696,530	599,217
Prepaid insurance premiums financed		3,811,644
Operating lease right-of-use asset disposals, net of acquisitions in exchange for operating liabilities	(2,846)	962,417
Cash paid during the year for:
Interest	1,169,311	$ 1,022,089
Income taxes	$ 1,153,934

Consolidated Statements of Changes in Shareholders' Equity - USD ($)	Common Stock	Additional Paid in Capital	Retained Deficit	Treasury Stock	Total
Balance at the beginning at Sep. 30, 2022	$ 1,789	$ 60,508,350	$ (32,269,473)	$ (122)	$ 28,240,544
Balance at the beginning (in shares) at Sep. 30, 2022	16,667,185
Increase (Decrease) in Stockholders' Equity
Net income (loss)			138,374		138,374
Balance at the end at Dec. 31, 2022	$ 1,789	60,508,350	(32,131,099)	(122)	28,378,918
Balance at the end (in shares) at Dec. 31, 2022	16,667,185
Balance at the beginning at Sep. 30, 2022	$ 1,789	60,508,350	(32,269,473)	(122)	28,240,544
Balance at the beginning (in shares) at Sep. 30, 2022	16,667,185
Increase (Decrease) in Stockholders' Equity
Net income (loss)					(1,735,226)
Balance at the end at Mar. 31, 2023	$ 1,789	60,436,698	(34,838,059)	(125)	25,600,303
Balance at the end (in shares) at Mar. 31, 2023	16,635,004
Balance at the beginning at Dec. 31, 2022	$ 1,789	60,508,350	(32,131,099)	(122)	28,378,918
Balance at the beginning (in shares) at Dec. 31, 2022	16,667,185
Increase (Decrease) in Stockholders' Equity
Net income (loss)			(1,873,600)		(1,873,600)
Dividends on common stock			(833,360)		(833,360)
Treasury stock purchased by company		(71,652)		(3)	(71,655)
Treasury stock purchased by company (in shares)	(32,181)
Balance at the end at Mar. 31, 2023	$ 1,789	60,436,698	(34,838,059)	(125)	25,600,303
Balance at the end (in shares) at Mar. 31, 2023	16,635,004
Balance at the beginning at Sep. 30, 2023	$ 1,789	60,288,745	(25,701,413)	(132)	34,588,989
Balance at the beginning (in shares) at Sep. 30, 2023	16,567,185
Increase (Decrease) in Stockholders' Equity
Net income (loss)			2,042,195		2,042,195
Dividends on common stock			(994,031)		(994,031)
Balance at the end at Dec. 31, 2023	$ 1,789	60,288,745	(24,653,249)	(132)	35,637,153
Balance at the end (in shares) at Dec. 31, 2023	16,567,185
Balance at the beginning at Sep. 30, 2023	$ 1,789	60,288,745	(25,701,413)	(132)	34,588,989
Balance at the beginning (in shares) at Sep. 30, 2023	16,567,185
Increase (Decrease) in Stockholders' Equity
Net income (loss)					933,367
Balance at the end at Mar. 31, 2024	$ 1,790	60,324,300	(25,762,077)	(132)	34,563,881
Balance at the end (in shares) at Mar. 31, 2024	16,577,586
Balance at the beginning at Dec. 31, 2023	$ 1,789	60,288,745	(24,653,249)	(132)	35,637,153
Balance at the beginning (in shares) at Dec. 31, 2023	16,567,185
Increase (Decrease) in Stockholders' Equity
Net income (loss)			(1,108,828)		(1,108,828)
Vested restricted stock award	$ 1	35,555			35,556
Vested restricted stock award (in shares)	10,401
Balance at the end at Mar. 31, 2024	$ 1,790	$ 60,324,300	$ (25,762,077)	$ (132)	$ 34,563,881
Balance at the end (in shares) at Mar. 31, 2024	16,577,586

Consolidated Statements of Changes in Shareholders' Equity (Parentheticals) - $ / shares	3 Months Ended
	Dec. 31, 2023	Mar. 31, 2023
Consolidated Statements of Changes in Shareholders' Equity
Dividends on common stock (in dollars per share)	$ 0.06	$ 0.05
Number of common shares	16,567,185	16,667,185

BUSINESS AND ORGANIZATION

6 Months Ended

Mar. 31, 2024

BUSINESS AND ORGANIZATION

BUSINESS AND ORGANIZATION

1. BUSINESS AND ORGANIZATION

Interim Financial Statements

Principles of Consolidation

Use of Estimates and Assumptions

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Mar. 31, 2024

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ACCOUNTING FOR PAYCHECK PROTECTION PROGRAM LOANS

6 Months Ended

Mar. 31, 2024

ACCOUNTING FOR PAYCHECK PROTECTION PROGRAM LOANS

ACCOUNTING FOR PAYCHECK PROTECTION PROGRAM LOANS

3. ACCOUNTING FOR PAYCHECK PROTECTION PROGRAM LOANS

to meet SBA size standards and/or PPP corporate maximum limits. The requested information was subsequently provided to the SBA through the Lender.

REVENUE RECOGNITION

6 Months Ended

Mar. 31, 2024

REVENUE RECOGNITION

REVENUE RECOGNITION

4. REVENUE RECOGNITION

●

Identify the contract

●

Identify performance obligations

●

Determine the transaction price

●

Allocate the transaction price

●

Recognize revenue

●

the completeness and accuracy of the original bid;

●

costs associated with scope changes;

●

changes in costs of labor and/or materials;

●

extended overhead and other costs due to owner, weather and other delays;

●

subcontractor performance issues;

●

changes in productivity expectations;

●

site conditions that differ from those assumed in the original bid;

●

changes from original design on design-build projects;

●

the availability and skill level of workers in the geographic location of the project;

●

a change in the availability and proximity of equipment and materials;

●

our ability to fully and promptly recover on affirmative claims and back charges for additional contract costs; and

●

the customer’s ability to properly administer the contract.

DISAGGREGATION OF REVENUE

6 Months Ended

Mar. 31, 2024

DISAGGREGATION OF REVENUE

DISAGGREGATION OF REVENUE

5. DISAGGREGATION OF REVENUE


	Three Months Ended March 31, 2024
					Electrical,
	Gas & Water		Gas & Petroleum		Mechanical, &		Total revenue
	Distribution		Transmission		General		from contracts
Lump sum contracts	$	—	$	—	$	26,943,941	$	26,943,941
Unit price contracts		14,273,691		9,044,955		448,175		23,766,821
Cost plus and T&M contracts		—		718,123		19,698,770		20,416,893
Total revenue from contracts	$	14,273,691	$	9,763,078	$	47,090,886	$	71,127,655

Earned over time	$	5,768,688	$	9,044,955	$	32,913,922	$	47,727,565
Earned at point in time		8,505,003		718,123		14,176,964		23,400,090
Total revenue from contracts	$	14,273,691	$	9,763,078	$	47,090,886	$	71,127,655


	Six Months Ended March 31, 2024
					Electrical,
	Gas &Water		Gas & Petroleum		Mechanical, &		Total revenue
	Distribution		Transmission		General		from contracts
Lump sum contracts	$	—	$	—	$	55,632,971	$	55,632,971
Unit price contracts		31,356,586		36,893,140		2,710,870		70,960,596
Cost plus and T&M contracts		—		1,433,181		33,264,094		34,697,275
Total revenue from contracts	$	31,356,586	$	38,326,321	$	91,607,935	$	161,290,842

Earned over time	$	10,141,271	$	36,893,140	$	63,141,836	$	110,176,247
Earned at point in time		21,215,315		1,433,181		28,466,099		51,114,595
Total revenue from contracts	$	31,356,586	$	38,326,321	$	91,607,935	$	161,290,842


	Three Months Ended March 31, 2023
					Electrical,
	Gas & Water		Gas & Petroleum		Mechanical, &		Total revenue
	Distribution		Transmission		General		from contracts
Lump sum contracts	$	—	$	—	$	22,467,890	$	22,467,890
Unit price contracts		13,432,107		5,334,861		1,261,641		20,028,609
Cost plus and T&M contracts		—		—		11,176,944		11,176,944
Total revenue from contracts	$	13,432,107	$	5,334,861	$	34,906,475	$	53,673,443

Earned over time	$	8,711,111	$	5,334,861	$	31,736,363	$	45,782,335
Earned at point in time		4,720,996		—		3,170,112		7,891,108
Total revenue from contracts	$	13,432,107	$	5,334,861	$	34,906,475	$	53,673,443


	Six Months Ended March 31, 2023
					Electrical,
	Gas & Water		Gas & Petroleum		Mechanical, &		Total revenue
	Distribution		Transmission		General		from contracts
Lump sum contracts	$	—	$	—	$	39,501,096	$	39,501,096
Unit price contracts		25,919,952		22,229,675		2,799,079		50,948,706
Cost plus and T&M contracts		—		—		23,266,226		23,266,226
Total revenue from contracts	$	25,919,952	$	22,229,675	$	65,566,401	$	113,716,028

Earned over time	$	13,589,758	$	22,229,675	$	61,626,511	$	97,445,944
Earned at point in time		12,330,194		—		3,939,890		16,270,084
Total revenue from contracts	$	25,919,952	$	22,229,675	$	65,566,401	$	113,716,028

CONTRACT BALANCES

6 Months Ended

Mar. 31, 2024

CONTRACT BALANCES

CONTRACT BALANCES

6. CONTRACT BALANCES

During the three and six months ended March 31, 2024, we recognized revenue of $4.1 million and $17.6 million, respectively, that was included in the contract liability balance at September 30, 2023.

Accounts receivable-trade, net of allowance for doubtful accounts, contract assets and contract liabilities consisted of the following:


	March 31, 2024		September 30, 2023		Change
Accounts receivable-trade, net of allowance for doubtful accounts	$	46,322,223	$	51,168,895	$	(4,846,672)

Contract assets
Cost and estimated earnings in excess of billings	$	14,648,381	$	15,955,220	$	(1,306,839)

Contract liabilities
Billings in excess of cost and estimated earnings	$	16,308,516	$	17,743,001	$	(1,434,485)

PERFORMANCE OBLIGATIONS

6 Months Ended

Mar. 31, 2024

PERFORMANCE OBLIGATIONS

PERFORMANCE OBLIGATIONS

7. PERFORMANCE OBLIGATIONS

At March 31, 2024, the Company had $145.3 million in remaining unsatisfied performance obligations, in which revenue is expected to be recognized over the next twelve months.

UNCOMPLETED CONTRACTS

6 Months Ended

Mar. 31, 2024

UNCOMPLETED CONTRACTS

UNCOMPLETED CONTRACTS

8. UNCOMPLETED CONTRACTS

Costs, estimated earnings, and billings on uncompleted contracts as of March 31, 2024 and September 30, 2023, are summarized as follows:


	March 31, 2024		September 30, 2023
Costs incurred on contracts in progress	$	403,385,426	$	287,347,650
Estimated earnings, net of estimated losses		42,599,658		38,976,895
		445,985,084		326,324,545
Less billings to date		447,645,219		328,112,326
	$	(1,660,135)	$	(1,787,781)

Costs and estimated earnings in excess of billed on uncompleted contracts	$	14,648,381	$	15,955,220

Less billings in excess of costs and estimated earnings on uncompleted contracts		16,308,516		17,743,001

	$	(1,660,135)	$	(1,787,781)

The Company’s unaudited backlog at March 31, 2024 and September 30, 2023 was $222.8 million and $229.8 million, respectively.

FAIR VALUE MEASUREMENTS

6 Months Ended

Mar. 31, 2024

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

9. FAIR VALUE MEASUREMENTS

Level 1 — Quoted prices for identical assets and liabilities traded in active exchange markets, such as the New York Stock Exchange.

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

All other current assets and liabilities are carried at net realizable value which approximates fair value because of their short duration to maturity.

EARNINGS PER SHARE

6 Months Ended

Mar. 31, 2024

EARNINGS PER SHARE

EARNINGS PER SHARE

10. EARNINGS PER SHARE

The amounts used to compute the earnings per share for the three and six months ended March 31, 2024 and 2023 are summarized below.


	March 31, 2024		March 31, 2023		March 31, 2024		March 31, 2023
Net (loss) income	$	(1,108,828)	$	(1,873,600)	$	933,367	$	(1,735,226)

Weighted average shares outstanding-basic		16,569,871		16,666,683		16,567,853		16,667,062

Weighted average shares outstanding-diluted		16,569,871		16,666,683		16,606,075		16,667,062

(Loss) earnings per share available to common shareholders	$	(0.07)	$	(0.11)	$	0.06	$	(0.10)

(Loss) earnings per share available to common shareholders-diluted	$	(0.07)	$	(0.11)	$	0.06	$	(0.10)

INCOME TAXES

6 Months Ended

Mar. 31, 2024

INCOME TAXES

INCOME TAXES

11. INCOME TAXES

The components of income taxes are as follows:


	Three Months Ended				Six Months Ended
	March 31, 2024		March 31, 2023		March 31, 2024		March 31, 2023
Federal
Current	$	—	$	—	$	140,882	$	—
Deferred		(286,811)		(499,808)		389,140		(561,906)
Total		(286,811)		(499,808)		530,022		(561,906)

State
Current		—		—		45,203		—
Deferred		(86,241)		(150,352)		109,758		(167,866)
Total		(86,241)		(150,352)		154,961		(167,866)
Total income tax expense (benefit)	$	(373,052)	$	(650,160)	$	684,983	$	(729,772)

Major items that can affect the effective tax rate include amortization of goodwill and intangible assets and non-deductible amounts for per diem expenses.

The income tax effects of temporary differences giving rise to the deferred tax assets and liabilities are as follows:


	March 31, 2024		September 30, 2023
Deferred tax liabilities
Property and equipment	$	7,775,925	$	8,141,025
Other		617,218		588,632
Total deferred tax liabilities	$	8,393,143	$	8,729,657

Deferred income tax assets
Accruals & Other	$	1,005,361	$	948,704
Net operating loss carryforward		185,908		910,443
Total deferred tax assets		1,191,269		1,859,147
Total net deferred tax liabilities	$	7,201,874	$	6,870,510

SHORT-TERM AND LONG-TERM DEBT

6 Months Ended

Mar. 31, 2024

SHORT-TERM AND LONG-TERM DEBT

SHORT-TERM AND LONG-TERM DEBT

12. SHORT-TERM AND LONG-TERM DEBT

Operating Line of Credit

The line of credit is limited to a borrowing base calculation as summarized below:


	March 31, 2024			September 30, 2023
Eligible borrowing base	$	21,267,302		$	23,942,868

Borrowed on line of credit		12,300,000			8,712,915

Line of credit balance available	$	8,967,302		$	15,229,953

Interest rate		8.5	%		8.5	%

The modified financial covenants for the quarter ended June 30, 2023, and all subsequent quarters, are below:

●

Minimum tangible net worth of $28.0 million,

●

Minimum traditional debt service coverage of 1.50x on a rolling twelve- month basis,

●

Minimum current ratio of 1.20x,

●

Maximum debt to tangible net worth ratio (“TNW”) of 2.75x,

●

Each ratio and covenant shall be determined, tested, and measured as of each calendar quarter beginning June 30, 2023,

●

Insurance Premiums Financed

Paycheck Protection Program Loans

During April 2023, management received notification from the SBA that one of the Company’s forgiveness applications related to the PPP Loans was under review. As part of the review, the SBA requested additional payroll information. Additionally, the SBA requested information regarding the ability of the Company’s affiliates to meet SBA size standards and/or PPP corporate maximum limits. The requested information was subsequently provided to the SBA through the Lender. The Company recognizes that there is a possibility that the SBA could reverse its previous determination on the forgiveness of the PPP Loans. As a result of this uncertainty, the Company restated the previously audited financial statements of the Company for the fiscal years 2022 and 2021. The Company has recorded a short-term borrowing due to the SBA inquiry for the full $9.8 million, plus accrued interest.

A summary of short-term and long-term debt as of March 31, 2024 and September 30, 2023 is as follows:


	March 31, 2024		September 30, 2023
Line of credit payable to bank, monthly interest with variable rate of 8.5% at March 31, 2024, final payment due by June 28, 2024, guaranteed by certain directors of the Company.	$	12,300,000	$	8,712,915

Note payable to bank, due in monthly installments totaling $202,000, including fixed interest at 7.25%, final payment due June 2028, secured by equipment, guaranteed by certain directors of the Company.		8,712,104		8,487,085

Paycheck Protection Program loans from Small Business Administration, 1.0% simple interest, initially forgiven in the fiscal year ended September 30, 2021. Final forgiveness decision has not been determined.		10,234,492		10,184,320

Term note payable to United Bank, WV Pipeline acquisition, due in monthly installments of $64,853 with fixed interest at 4.25%, final payment due by March 25, 2026, secured by receivables and equipment, guaranteed by certain directors of the Company.		1,494,290		1,790,051

Notes payable to finance companies, due in monthly installments totaling $76,600 at March 31, 2024 and $50,000 at September 30, 2023, including interest ranging from 0.00% to 6.0%, final payments due April 2024 through August 2026, secured by equipment.		1,893,373		1,290,148

Note payable to finance company for insurance premiums financed, due in monthly installments totaling $327,000 in calendar year 2023 and $282,000 in calendar year 2022, including interest rate at 6.70%, final payment due December 2023.		—		950,235

Notes payable to bank, due in monthly installments totaling $7,848, including interest at 4.82%, final payment due November 2034 secured by building and property.		787,329		813,242

Notes payable to bank, due in monthly installments totaling $12,580, including variable interest of 9.5% at March 31, 2024, final payment due November 2025 secured by building and property, guaranteed by certain directors of the Company.		232,166		294,761

Notes payable to bank, due in monthly installments totaling $59,932, including fixed interest at 6.0%, final payment due October 2027 secured by receivables and equipment, guaranteed by certain directors of the Company.		2,317,125		2,601,404

Notes payable to David Bolton and Daniel Bolton, due in annual installments totaling $500,000, including fixed interest at 3.25%, final payment due December 31, 2026, unsecured.		925,000		1,660,000

Notes payable to bank, due in monthly installments totaling $68,150, including variable interest of 9.5% at March 31, 2024, with final payment due September 2026, secured by equipment, guaranteed by certain directors of the Company.		1,548,929		1,873,831

Term note payable to United Bank, Tri-State Paving acquisition, due in monthly installments of $129,910, fixed interest at 4.50%, final payment due by June 1, 2027, secured by receivables and equipment, guaranteed by certain directors of the Company.		5,036,626		5,698,761

Notes payable to Corns Enterprises, $1,000,000 with fair value of $936,000, due in annual installments totaling $250,000, including fixed interest at 3.50%, final payment due April 29, 2026, unsecured.		233,709		468,523

Total debt	$	45,715,143	$	44,825,276

Less current maturities		29,627,170		25,954,747

Total long term debt, less current maturities	$	16,087,973	$	18,870,529

GOODWILL AND INTANGIBLE ASSETS

6 Months Ended

Mar. 31, 2024

GOODWILL AND INTANGIBLE ASSETS

GOODWILL AND INTANGIBLE ASSETS

13. GOODWILL AND INTANGIBLE ASSETS

A table of the Company’s goodwill is below:



	March 31, 2024		September 30, 2023
Beginning balance	$	4,087,554	$	4,087,554
Acquired		—		—
Ending balance	$	4,087,554	$	4,087,554

A table of the Company’s intangible assets subject to amortization is below:


				Accumulated		Accumulated		Amortization		Amortization		Amortization		Amortization
	Remaining Life			Amortization and		Amortization and		and Impairment		and Impairment		and Impairment		and Impairment
	(in months) at			Impairment at		Impairment at		Three Months		Six Months		Three Months		Six Months		Net Book Value		Net Book Value
	March 31,			March 31,		September 30,		Ended March 31,		Ended March 31,		Ended March 31,		Ended March 31,		at March 31,		at September 30,
Intangible assets:	2024	Original Cost		2024		2023		2024		2024		2023		2023		2024		2023
West Virginia Pipeline:
Customer Relationships	81	$	2,209,724		718,145	$	607,661		55,242		110,484		65,647		120,889	$	1,491,579	$	1,602,063
Tradename	81		263,584		85,682		72,500		6,591		13,182		6,587		13,182		177,902		191,084
Non-competes	—		83,203		83,203		83,203		—		—		—		10,397		—		—

Revolt Energy:

Employment agreement/non-compete	—		100,000		100,000		100,000		—		—		4,167		8,334		—		—

Tri-State Paving:
Customer Relationships	97		1,649,159		316,089		233,631		41,229		82,458		41,178		82,458		1,333,070		1,415,528
Tradename	97		203,213		38,949		28,789		5,080		10,160		5,079		10,161		164,264		174,424
Non-competes	—		39,960		39,960		39,960		—		—		9,963		19,980		—		—

Total intangible assets		$	4,548,843	$	1,382,028	$	1,165,744	$	108,142	$	216,284	$	132,621	$	265,401	$	3,166,815	$	3,383,099

Amortization expense associated with the identifiable intangible assets is expected to be as follows:


	Amortization Expense
April 2024 to March 2025	$	432,564
April 2025 to March 2026		432,564
April 2026 to March 2027		432,564
April 2027 to March 2028		432,564
April 2028 to March 2029		432,564
After		1,003,995
Total	$	3,166,815

LEASE OBLIGATIONS

6 Months Ended

Mar. 31, 2024

LEASE OBLIGATIONS

LEASE OBLIGATIONS

14. LEASE OBLIGATIONS

Schedules related to the Company’s operating leases at March 31, 2024 can be found below:

Operating Lease-Weighted Average Remaining Term


		Present value of
		remaining
	Years left	liability		Lease end	Fiscal year end
Operating lease 1	1.0	$	86,364	3/31/2025	2025
Operating lease 2	0.2		23,636	5/31/2024	2024
Operating lease 3	3.8		2,399,040	12/31/2027	2027
Operating lease 4	0.5		63,671	9/30/2024	2024
Operating lease 5	2.0		208,803	3/31/2026	2026
		$	2,781,514

Weighted average remaining term			3.4 years


Operating Lease Maturity Schedule
April 2024 to March 2025	$	1,549,641
April 2025 to March 2026		1,267,823
April 2026 to March 2027		718,798
April 2027 to March 2028		95,200
		3,631,462
Less amounts representing interest		(849,948)
Present value of operating lease liabilities	$	2,781,514


	Three Months Ended		Six Months Ended		Three Months Ended		Six Months Ended
	March 31,		March 31,		March 31,		March 31,
Operating Lease Expense	2024		2024		2023		2023
Amortization
Operating lease 1	$	19,931	$	46,636	$	19,052	$	37,893
Operating lease 2		16,791		33,396		15,398		30,957
Operating lease 3		168,674		330,398		109,157		177,685
Operating lease 4		19,302		61,030		31,707		61,319
Operating lease 5		22,510		53,368		7,006		7,006
Total amortization		247,208		524,828		182,320		314,860

Interest
Operating lease 1		1,069		2,364		1,947		4,107
Operating lease 2		318		822		1,046		2,265
Operating lease 3		49,828		118,738		19,642		32,212
Operating lease 4		2,298		3,770		819		1,981
Operating lease 5		3,788		7,994		1,760		1,760
Total interest		57,301		133,688		25,214		42,325
Total amortization and interest	$	304,509	$	658,516	$	207,534	$	357,185


	Three Months Ended		Six Months Ended		Three Months Ended		Six Months Ended
	March 31,		March 31,		March 31,		March 31,
Cash Paid for Operating Leases	2024		2024		2023		2023
Operating lease 1	$	21,000	$	49,000	$	20,999	$	42,000
Operating lease 2		17,109		34,218		16,444		33,222
Operating lease 3		218,502		449,136		130,933		212,031
Operating lease 4		21,600		64,800		21,996		52,770
Operating lease 5		26,298		61,362		17,162		17,162
	$	304,509	$	658,516	$	207,534	$	357,185

SUBSEQUENT EVENTS

6 Months Ended

Mar. 31, 2024

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

15. SUBSEQUENT EVENTS

BUSINESS AND ORGANIZATION (Policies)	6 Months Ended
BUSINESS AND ORGANIZATION (Policies)	Mar. 31, 2024
BUSINESS AND ORGANIZATION
Interim Financial Statements	Interim Financial Statements The accompanying unaudited consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and should be read in conjunction with the Company’s audited consolidated financial statements and footnotes thereto for the years ended September 30, 2023, and 2022 included in the Company’s Annual Report on Form 10-K filed with the SEC on January 16, 2024. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been omitted pursuant to the interim financial reporting rules and regulations of the SEC. The financial statements reflect all adjustments (consisting primarily of normal recurring adjustments) that are, in the opinion of management, necessary for a fair presentation of the Company’s financial position and results of operations. The operating results for the three and six months ended March 31, 2024 and 2023 are not necessarily indicative of the results to be expected for the full year or any other interim period.
Principles of Consolidation	Principles of Consolidation The consolidated financial statements of Energy Services include the accounts of Energy Services, its wholly owned subsidiaries West Virginia Pipeline, SQP, Ryan Construction, Tri-State Paving and C.J. Hughes and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in the consolidation. Unless the context requires otherwise, references to Energy Services include Energy Services, West Virginia Pipeline, SQP, Ryan Construction, Tri-State Paving and C.J. Hughes and its subsidiaries.
Use of Estimates and Assumptions	Use of Estimates and Assumptions The preparation of financial statements, in conformity with U.S. GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and loss during the reporting period. Actual results could differ materially from those estimates.

DISAGGREGATION OF REVENUE (Tables)

6 Months Ended

Mar. 31, 2024

DISAGGREGATION OF REVENUE

Schedule of disaggregation of revenue


	Three Months Ended March 31, 2024
					Electrical,
	Gas & Water		Gas & Petroleum		Mechanical, &		Total revenue
	Distribution		Transmission		General		from contracts
Lump sum contracts	$	—	$	—	$	26,943,941	$	26,943,941
Unit price contracts		14,273,691		9,044,955		448,175		23,766,821
Cost plus and T&M contracts		—		718,123		19,698,770		20,416,893
Total revenue from contracts	$	14,273,691	$	9,763,078	$	47,090,886	$	71,127,655

Earned over time	$	5,768,688	$	9,044,955	$	32,913,922	$	47,727,565
Earned at point in time		8,505,003		718,123		14,176,964		23,400,090
Total revenue from contracts	$	14,273,691	$	9,763,078	$	47,090,886	$	71,127,655


	Six Months Ended March 31, 2024
					Electrical,
	Gas &Water		Gas & Petroleum		Mechanical, &		Total revenue
	Distribution		Transmission		General		from contracts
Lump sum contracts	$	—	$	—	$	55,632,971	$	55,632,971
Unit price contracts		31,356,586		36,893,140		2,710,870		70,960,596
Cost plus and T&M contracts		—		1,433,181		33,264,094		34,697,275
Total revenue from contracts	$	31,356,586	$	38,326,321	$	91,607,935	$	161,290,842

Earned over time	$	10,141,271	$	36,893,140	$	63,141,836	$	110,176,247
Earned at point in time		21,215,315		1,433,181		28,466,099		51,114,595
Total revenue from contracts	$	31,356,586	$	38,326,321	$	91,607,935	$	161,290,842


	Three Months Ended March 31, 2023
					Electrical,
	Gas & Water		Gas & Petroleum		Mechanical, &		Total revenue
	Distribution		Transmission		General		from contracts
Lump sum contracts	$	—	$	—	$	22,467,890	$	22,467,890
Unit price contracts		13,432,107		5,334,861		1,261,641		20,028,609
Cost plus and T&M contracts		—		—		11,176,944		11,176,944
Total revenue from contracts	$	13,432,107	$	5,334,861	$	34,906,475	$	53,673,443

Earned over time	$	8,711,111	$	5,334,861	$	31,736,363	$	45,782,335
Earned at point in time		4,720,996		—		3,170,112		7,891,108
Total revenue from contracts	$	13,432,107	$	5,334,861	$	34,906,475	$	53,673,443


	Six Months Ended March 31, 2023
					Electrical,
	Gas & Water		Gas & Petroleum		Mechanical, &		Total revenue
	Distribution		Transmission		General		from contracts
Lump sum contracts	$	—	$	—	$	39,501,096	$	39,501,096
Unit price contracts		25,919,952		22,229,675		2,799,079		50,948,706
Cost plus and T&M contracts		—		—		23,266,226		23,266,226
Total revenue from contracts	$	25,919,952	$	22,229,675	$	65,566,401	$	113,716,028

Earned over time	$	13,589,758	$	22,229,675	$	61,626,511	$	97,445,944
Earned at point in time		12,330,194		—		3,939,890		16,270,084
Total revenue from contracts	$	25,919,952	$	22,229,675	$	65,566,401	$	113,716,028

CONTRACT BALANCES (Tables)

6 Months Ended

Mar. 31, 2024

CONTRACT BALANCES

Schedule of accounts receivable-trade, net of allowance for doubtful accounts, contract assets and contract liabilities


	March 31, 2024		September 30, 2023		Change
Accounts receivable-trade, net of allowance for doubtful accounts	$	46,322,223	$	51,168,895	$	(4,846,672)

Contract assets
Cost and estimated earnings in excess of billings	$	14,648,381	$	15,955,220	$	(1,306,839)

Contract liabilities
Billings in excess of cost and estimated earnings	$	16,308,516	$	17,743,001	$	(1,434,485)

UNCOMPLETED CONTRACTS (Tables)

6 Months Ended

Mar. 31, 2024

UNCOMPLETED CONTRACTS

Schedule of costs, estimated earnings and billings on uncompleted contracts


	March 31, 2024		September 30, 2023
Costs incurred on contracts in progress	$	403,385,426	$	287,347,650
Estimated earnings, net of estimated losses		42,599,658		38,976,895
		445,985,084		326,324,545
Less billings to date		447,645,219		328,112,326
	$	(1,660,135)	$	(1,787,781)

Costs and estimated earnings in excess of billed on uncompleted contracts	$	14,648,381	$	15,955,220

Less billings in excess of costs and estimated earnings on uncompleted contracts		16,308,516		17,743,001

	$	(1,660,135)	$	(1,787,781)

EARNINGS PER SHARE (Tables)

6 Months Ended

Mar. 31, 2024

EARNINGS PER SHARE

Schedule of earnings per share


	March 31, 2024		March 31, 2023		March 31, 2024		March 31, 2023
Net (loss) income	$	(1,108,828)	$	(1,873,600)	$	933,367	$	(1,735,226)

Weighted average shares outstanding-basic		16,569,871		16,666,683		16,567,853		16,667,062

Weighted average shares outstanding-diluted		16,569,871		16,666,683		16,606,075		16,667,062

(Loss) earnings per share available to common shareholders	$	(0.07)	$	(0.11)	$	0.06	$	(0.10)

(Loss) earnings per share available to common shareholders-diluted	$	(0.07)	$	(0.11)	$	0.06	$	(0.10)

INCOME TAXES (Tables)

6 Months Ended

Mar. 31, 2024

INCOME TAXES

Schedule of components of income taxes


	Three Months Ended				Six Months Ended
	March 31, 2024		March 31, 2023		March 31, 2024		March 31, 2023
Federal
Current	$	—	$	—	$	140,882	$	—
Deferred		(286,811)		(499,808)		389,140		(561,906)
Total		(286,811)		(499,808)		530,022		(561,906)

State
Current		—		—		45,203		—
Deferred		(86,241)		(150,352)		109,758		(167,866)
Total		(86,241)		(150,352)		154,961		(167,866)
Total income tax expense (benefit)	$	(373,052)	$	(650,160)	$	684,983	$	(729,772)

Schedule of income tax effects to deferred tax assets and liabilities


	March 31, 2024		September 30, 2023
Deferred tax liabilities
Property and equipment	$	7,775,925	$	8,141,025
Other		617,218		588,632
Total deferred tax liabilities	$	8,393,143	$	8,729,657

Deferred income tax assets
Accruals & Other	$	1,005,361	$	948,704
Net operating loss carryforward		185,908		910,443
Total deferred tax assets		1,191,269		1,859,147
Total net deferred tax liabilities	$	7,201,874	$	6,870,510

SHORT-TERM AND LONG-TERM DEBT (Tables)

6 Months Ended

Mar. 31, 2024

SHORT-TERM AND LONG-TERM DEBT

Schedule of line of credit is limited to a borrowing base


	March 31, 2024			September 30, 2023
Eligible borrowing base	$	21,267,302		$	23,942,868

Borrowed on line of credit		12,300,000			8,712,915

Line of credit balance available	$	8,967,302		$	15,229,953

Interest rate		8.5	%		8.5	%

Schedule of short-term and long-term debt


	March 31, 2024		September 30, 2023
Line of credit payable to bank, monthly interest with variable rate of 8.5% at March 31, 2024, final payment due by June 28, 2024, guaranteed by certain directors of the Company.	$	12,300,000	$	8,712,915

Note payable to bank, due in monthly installments totaling $202,000, including fixed interest at 7.25%, final payment due June 2028, secured by equipment, guaranteed by certain directors of the Company.		8,712,104		8,487,085

Paycheck Protection Program loans from Small Business Administration, 1.0% simple interest, initially forgiven in the fiscal year ended September 30, 2021. Final forgiveness decision has not been determined.		10,234,492		10,184,320

Term note payable to United Bank, WV Pipeline acquisition, due in monthly installments of $64,853 with fixed interest at 4.25%, final payment due by March 25, 2026, secured by receivables and equipment, guaranteed by certain directors of the Company.		1,494,290		1,790,051

Notes payable to finance companies, due in monthly installments totaling $76,600 at March 31, 2024 and $50,000 at September 30, 2023, including interest ranging from 0.00% to 6.0%, final payments due April 2024 through August 2026, secured by equipment.		1,893,373		1,290,148

Note payable to finance company for insurance premiums financed, due in monthly installments totaling $327,000 in calendar year 2023 and $282,000 in calendar year 2022, including interest rate at 6.70%, final payment due December 2023.		—		950,235

Notes payable to bank, due in monthly installments totaling $7,848, including interest at 4.82%, final payment due November 2034 secured by building and property.		787,329		813,242

Notes payable to bank, due in monthly installments totaling $12,580, including variable interest of 9.5% at March 31, 2024, final payment due November 2025 secured by building and property, guaranteed by certain directors of the Company.		232,166		294,761

Notes payable to bank, due in monthly installments totaling $59,932, including fixed interest at 6.0%, final payment due October 2027 secured by receivables and equipment, guaranteed by certain directors of the Company.		2,317,125		2,601,404

Notes payable to David Bolton and Daniel Bolton, due in annual installments totaling $500,000, including fixed interest at 3.25%, final payment due December 31, 2026, unsecured.		925,000		1,660,000

Notes payable to bank, due in monthly installments totaling $68,150, including variable interest of 9.5% at March 31, 2024, with final payment due September 2026, secured by equipment, guaranteed by certain directors of the Company.		1,548,929		1,873,831

Term note payable to United Bank, Tri-State Paving acquisition, due in monthly installments of $129,910, fixed interest at 4.50%, final payment due by June 1, 2027, secured by receivables and equipment, guaranteed by certain directors of the Company.		5,036,626		5,698,761

Notes payable to Corns Enterprises, $1,000,000 with fair value of $936,000, due in annual installments totaling $250,000, including fixed interest at 3.50%, final payment due April 29, 2026, unsecured.		233,709		468,523

Total debt	$	45,715,143	$	44,825,276

Less current maturities		29,627,170		25,954,747

Total long term debt, less current maturities	$	16,087,973	$	18,870,529

GOODWILL AND INTANGIBLE ASSETS (Tables)

6 Months Ended

Mar. 31, 2024

GOODWILL AND INTANGIBLE ASSETS

Summary of changes in goodwill



	March 31, 2024		September 30, 2023
Beginning balance	$	4,087,554	$	4,087,554
Acquired		—		—
Ending balance	$	4,087,554	$	4,087,554

Schedule of intangible assets subject to amortization


				Accumulated		Accumulated		Amortization		Amortization		Amortization		Amortization
	Remaining Life			Amortization and		Amortization and		and Impairment		and Impairment		and Impairment		and Impairment
	(in months) at			Impairment at		Impairment at		Three Months		Six Months		Three Months		Six Months		Net Book Value		Net Book Value
	March 31,			March 31,		September 30,		Ended March 31,		Ended March 31,		Ended March 31,		Ended March 31,		at March 31,		at September 30,
Intangible assets:	2024	Original Cost		2024		2023		2024		2024		2023		2023		2024		2023
West Virginia Pipeline:
Customer Relationships	81	$	2,209,724		718,145	$	607,661		55,242		110,484		65,647		120,889	$	1,491,579	$	1,602,063
Tradename	81		263,584		85,682		72,500		6,591		13,182		6,587		13,182		177,902		191,084
Non-competes	—		83,203		83,203		83,203		—		—		—		10,397		—		—

Revolt Energy:

Employment agreement/non-compete	—		100,000		100,000		100,000		—		—		4,167		8,334		—		—

Tri-State Paving:
Customer Relationships	97		1,649,159		316,089		233,631		41,229		82,458		41,178		82,458		1,333,070		1,415,528
Tradename	97		203,213		38,949		28,789		5,080		10,160		5,079		10,161		164,264		174,424
Non-competes	—		39,960		39,960		39,960		—		—		9,963		19,980		—		—

Total intangible assets		$	4,548,843	$	1,382,028	$	1,165,744	$	108,142	$	216,284	$	132,621	$	265,401	$	3,166,815	$	3,383,099

Schedule of amortization on identifiable intangible assets


	Amortization Expense
April 2024 to March 2025	$	432,564
April 2025 to March 2026		432,564
April 2026 to March 2027		432,564
April 2027 to March 2028		432,564
April 2028 to March 2029		432,564
After		1,003,995
Total	$	3,166,815

LEASE OBLIGATIONS (Tables)

6 Months Ended

Mar. 31, 2024

LEASE OBLIGATIONS

Schedule of information about operating leases


		Present value of
		remaining
	Years left	liability		Lease end	Fiscal year end
Operating lease 1	1.0	$	86,364	3/31/2025	2025
Operating lease 2	0.2		23,636	5/31/2024	2024
Operating lease 3	3.8		2,399,040	12/31/2027	2027
Operating lease 4	0.5		63,671	9/30/2024	2024
Operating lease 5	2.0		208,803	3/31/2026	2026
		$	2,781,514

Weighted average remaining term			3.4 years


	Three Months Ended		Six Months Ended		Three Months Ended		Six Months Ended
	March 31,		March 31,		March 31,		March 31,
Operating Lease Expense	2024		2024		2023		2023
Amortization
Operating lease 1	$	19,931	$	46,636	$	19,052	$	37,893
Operating lease 2		16,791		33,396		15,398		30,957
Operating lease 3		168,674		330,398		109,157		177,685
Operating lease 4		19,302		61,030		31,707		61,319
Operating lease 5		22,510		53,368		7,006		7,006
Total amortization		247,208		524,828		182,320		314,860

Interest
Operating lease 1		1,069		2,364		1,947		4,107
Operating lease 2		318		822		1,046		2,265
Operating lease 3		49,828		118,738		19,642		32,212
Operating lease 4		2,298		3,770		819		1,981
Operating lease 5		3,788		7,994		1,760		1,760
Total interest		57,301		133,688		25,214		42,325
Total amortization and interest	$	304,509	$	658,516	$	207,534	$	357,185


	Three Months Ended		Six Months Ended		Three Months Ended		Six Months Ended
	March 31,		March 31,		March 31,		March 31,
Cash Paid for Operating Leases	2024		2024		2023		2023
Operating lease 1	$	21,000	$	49,000	$	20,999	$	42,000
Operating lease 2		17,109		34,218		16,444		33,222
Operating lease 3		218,502		449,136		130,933		212,031
Operating lease 4		21,600		64,800		21,996		52,770
Operating lease 5		26,298		61,362		17,162		17,162
	$	304,509	$	658,516	$	207,534	$	357,185

Schedule of operating lease maturity schedule


Operating Lease Maturity Schedule
April 2024 to March 2025	$	1,549,641
April 2025 to March 2026		1,267,823
April 2026 to March 2027		718,798
April 2027 to March 2028		95,200
		3,631,462
Less amounts representing interest		(849,948)
Present value of operating lease liabilities	$	2,781,514

ACCOUNTING FOR PAYCHECK PROTECTION PROGRAM LOANS (Details) - PPP Loans - USD ($) $ in Millions		1 Months Ended	12 Months Ended
	Apr. 27, 2020	Apr. 30, 2023	Sep. 30, 2021	Apr. 07, 2020
ACCOUNTING FOR PPP LOANS
Lender aggregate principal amount				$ 13.1
Unanimously voted to return loans	$ 3.3
Amount of PPP loans to fund operations	$ 9.8
PPP loans received			$ 9.8
Short-term borrowings due to accrued interest		$ 9.8

DISAGGREGATION OF REVENUE (Details) - USD ($)	3 Months Ended		6 Months Ended
DISAGGREGATION OF REVENUE (Details) - USD ($)	Mar. 31, 2024	Mar. 31, 2023	Mar. 31, 2024	Mar. 31, 2023
DISAGGREGATION OF REVENUE
Operating revenue	$ 71,127,655	$ 53,673,443	$ 161,290,842	$ 113,716,028
Earned over time
DISAGGREGATION OF REVENUE
Operating revenue	47,727,565	45,782,335	110,176,247	97,445,944
Earned at point in time
DISAGGREGATION OF REVENUE
Operating revenue	23,400,090	7,891,108	51,114,595	16,270,084
Lump sum contracts
DISAGGREGATION OF REVENUE
Operating revenue	26,943,941	22,467,890	55,632,971	39,501,096
Unit price contracts
DISAGGREGATION OF REVENUE
Operating revenue	23,766,821	20,028,609	70,960,596	50,948,706
Cost plus and T&M contracts
DISAGGREGATION OF REVENUE
Operating revenue	20,416,893	11,176,944	34,697,275	23,266,226
Gas & Water Distribution
DISAGGREGATION OF REVENUE
Operating revenue	14,273,691	13,432,107	31,356,586	25,919,952
Gas & Water Distribution \| Earned over time
DISAGGREGATION OF REVENUE
Operating revenue	5,768,688	8,711,111	10,141,271	13,589,758
Gas & Water Distribution \| Earned at point in time
DISAGGREGATION OF REVENUE
Operating revenue	8,505,003	4,720,996	21,215,315	12,330,194
Gas & Water Distribution \| Lump sum contracts
DISAGGREGATION OF REVENUE
Operating revenue	0		0
Gas & Water Distribution \| Unit price contracts
DISAGGREGATION OF REVENUE
Operating revenue	14,273,691	13,432,107	31,356,586	25,919,952
Gas & Water Distribution \| Cost plus and T&M contracts
DISAGGREGATION OF REVENUE
Operating revenue	0		0
Gas & Petroleum Transmission
DISAGGREGATION OF REVENUE
Operating revenue	9,763,078	5,334,861	38,326,321	22,229,675
Gas & Petroleum Transmission \| Earned over time
DISAGGREGATION OF REVENUE
Operating revenue	9,044,955	5,334,861	36,893,140	22,229,675
Gas & Petroleum Transmission \| Earned at point in time
DISAGGREGATION OF REVENUE
Operating revenue	718,123		1,433,181
Gas & Petroleum Transmission \| Lump sum contracts
DISAGGREGATION OF REVENUE
Operating revenue	0		0
Gas & Petroleum Transmission \| Unit price contracts
DISAGGREGATION OF REVENUE
Operating revenue	9,044,955	5,334,861	36,893,140	22,229,675
Gas & Petroleum Transmission \| Cost plus and T&M contracts
DISAGGREGATION OF REVENUE
Operating revenue	718,123		1,433,181
Electrical, Mechanical, and General
DISAGGREGATION OF REVENUE
Operating revenue	47,090,886	34,906,475	91,607,935	65,566,401
Electrical, Mechanical, and General \| Earned over time
DISAGGREGATION OF REVENUE
Operating revenue	32,913,922	31,736,363	63,141,836	61,626,511
Electrical, Mechanical, and General \| Earned at point in time
DISAGGREGATION OF REVENUE
Operating revenue	14,176,964	3,170,112	28,466,099	3,939,890
Electrical, Mechanical, and General \| Lump sum contracts
DISAGGREGATION OF REVENUE
Operating revenue	26,943,941	22,467,890	55,632,971	39,501,096
Electrical, Mechanical, and General \| Unit price contracts
DISAGGREGATION OF REVENUE
Operating revenue	448,175	1,261,641	2,710,870	2,799,079
Electrical, Mechanical, and General \| Cost plus and T&M contracts
DISAGGREGATION OF REVENUE
Operating revenue	$ 19,698,770	$ 11,176,944	$ 33,264,094	$ 23,266,226

CONTRACT BALANCES - Accounts receivable-trade, net of allowance for doubtful accounts (Details) - USD ($)	6 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Sep. 30, 2023
CONTRACT BALANCES
Accounts receivable-trade, net of allowance for doubtful accounts	$ 46,322,223		$ 51,168,895
Change in accounts receivable-trade, net of allowance for doubtful accounts	(4,846,672)	$ (13,713,923)
Contract assets
Cost and estimated earnings in excess of billings	14,648,381		15,955,220
Change in cost and estimated earnings in excess of billings	(1,306,839)	(4,659,578)
Contract liabilities
Billings in excess of cost and estimated earnings	16,308,516		$ 17,743,001
Change in billings in excess of cost and estimated earnings	$ (1,434,485)	$ 1,016,632

CONTRACT BALANCES - Additional information (Details) - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Mar. 31, 2024	Mar. 31, 2024
CONTRACT BALANCES
Recognized revenue included in contract liability	$ 4.1	$ 17.6
Minimum
CONTRACT BALANCES
Billing and payment term		30 days
Maximum
CONTRACT BALANCES
Billing and payment term		45 days

PERFORMANCE OBLIGATIONS (Details)	3 Months Ended	6 Months Ended
PERFORMANCE OBLIGATIONS (Details)	Mar. 31, 2024 USD ($)	Mar. 31, 2024 USD ($)
PERFORMANCE OBLIGATIONS
Recognized revenue	$ 0	$ 0
Amount of remaining unsatisfied performance obligations	$ 145,300,000	$ 145,300,000

UNCOMPLETED CONTRACTS - Summary of costs, estimated earnings, and billings on uncompleted contracts (Details) - USD ($)	Mar. 31, 2024	Sep. 30, 2023
UNCOMPLETED CONTRACTS
Costs incurred on contracts in progress	$ 403,385,426	$ 287,347,650
Estimated earnings, net of estimated losses	42,599,658	38,976,895
Costs of uncompleted contracts including net estimated earnings	445,985,084	326,324,545
Less billings to date	447,645,219	328,112,326
Unbilled contracts	(1,660,135)	(1,787,781)
Costs and estimated earnings in excess of billed on uncompleted contracts	14,648,381	15,955,220
Billings in excess of cost and estimated earnings	16,308,516	17,743,001
Unbilled contracts receivable	$ (1,660,135)	$ (1,787,781)

UNCOMPLETED CONTRACTS - Backlog (Details) - USD ($) $ in Millions	Mar. 31, 2024	Sep. 30, 2023
UNCOMPLETED CONTRACTS
Backlog	$ 222.8	$ 229.8

FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Millions	Mar. 31, 2024	Sep. 30, 2023
FAIR VALUE MEASUREMENTS
Aggregate principal amount of fixed-rate debt	$ 31.5	$ 33.8
Fair value of debt	$ 30.1	$ 32.1

EARNINGS PER SHARE (Details) - USD ($)	3 Months Ended				6 Months Ended
EARNINGS PER SHARE (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023	Mar. 31, 2023	Dec. 31, 2022	Mar. 31, 2024	Mar. 31, 2023
EARNINGS PER SHARE
Net (loss) income	$ (1,108,828)	$ 2,042,195	$ (1,873,600)	$ 138,374	$ 933,367	$ (1,735,226)
Weighted average shares outstanding-basic	16,569,871		16,666,683		16,567,853	16,667,062
Weighted average shares outstanding-diluted	16,569,871		16,666,683		16,606,075	16,667,062
(Loss) earnings per share available to common shareholders	$ (0.07)		$ (0.11)		$ 0.06	$ (0.10)
(Loss) earnings per share available to common shareholders-diluted	$ (0.07)		$ (0.11)		$ 0.06	$ (0.10)

INCOME TAXES - Components of income taxes (Details) - USD ($)	3 Months Ended		6 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Mar. 31, 2024	Mar. 31, 2023
Federal
Current			$ 140,882
Deferred	$ (286,811)	$ (499,808)	389,140	$ (561,906)
Total	(286,811)	(499,808)	530,022	(561,906)
State
Current			45,203
Deferred	(86,241)	(150,352)	109,758	(167,866)
Total	(86,241)	(150,352)	154,961	(167,866)
Total income tax expense (benefit)	$ (373,052)	$ (650,160)	$ 684,983	$ (729,772)

INCOME TAXES - Additional Information (Details) - USD ($)	3 Months Ended		6 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Mar. 31, 2024	Jun. 30, 2023	Sep. 30, 2023
INCOME TAXES
Federal rate			21.00%
State rate			6.00%
Effective tax rate	(25.20%)	(25.80%)	42.30%	(29.60%)
Federal
INCOME TAXES
Net operating loss carryforwards	$ 186,000		$ 186,000		$ 3,000,000.0

INCOME TAXES - Summary of income tax effects of temporary differences giving rise to the deferred tax assets and liabilities (Details) - USD ($)	Mar. 31, 2024	Sep. 30, 2023
Deferred tax liabilities
Property and equipment	$ 7,775,925	$ 8,141,025
Other	617,218	588,632
Total deferred tax liabilities	8,393,143	8,729,657
Deferred income tax assets
Accruals & other	1,005,361	948,704
Net operating loss carryforward	185,908	910,443
Total deferred tax assets	1,191,269	1,859,147
Total net deferred tax liabilities	$ 7,201,874	$ 6,870,510

SHORT-TERM AND LONG-TERM DEBT - Operating line of credit (Details) - USD ($)	Mar. 31, 2024	Sep. 30, 2023
SHORT-TERM AND LONG-TERM DEBT
Eligible borrowing base	$ 21,267,302	$ 23,942,868
Borrowed on line of credit	12,300,000	8,712,915
Line of credit balance available	$ 8,967,302	$ 15,229,953
Interest rate	8.50%	8.50%

SHORT-TERM AND LONG-TERM DEBT - Summary of short-term and long-term debt (Details) - USD ($)	Mar. 31, 2024	Sep. 30, 2023
SHORT-TERM AND LONG-TERM DEBT
Total debt	$ 45,715,143	$ 44,825,276
Less current maturities	29,627,170	25,954,747
Total long term debt	16,087,973	18,870,529
Line of credit payable to bank, final payment due by June 28, 2024
SHORT-TERM AND LONG-TERM DEBT
Total debt	12,300,000	8,712,915
Note payable to bank, final payment due June 2028
SHORT-TERM AND LONG-TERM DEBT
Total debt	8,712,104	8,487,085
Paycheck Protection Program loans from Small Business Administration, 1.0% simple interest, initially forgiven in the fiscal year ended September 30, 2021. Final forgiveness decision has not been determined.
SHORT-TERM AND LONG-TERM DEBT
Total debt	10,234,492	10,184,320
Term note payable to United Bank, WV Pipeline acquisition, final payment due by March 25, 2026
SHORT-TERM AND LONG-TERM DEBT
Total debt	1,494,290	1,790,051
Notes payable to finance companies due April 2022 through August 2026
SHORT-TERM AND LONG-TERM DEBT
Total debt	1,893,373	1,290,148
Notes payable to finance companies, final payment, due December 2023
SHORT-TERM AND LONG-TERM DEBT
Total debt		950,235
Notes payable to bank, final payment due November 2034
SHORT-TERM AND LONG-TERM DEBT
Total debt	787,329	813,242
Notes payable to banks due October 2027
SHORT-TERM AND LONG-TERM DEBT
Total debt	2,317,125	2,601,404
Notes payable to David and Daniel Bolton due final payment December 31, 2026
SHORT-TERM AND LONG-TERM DEBT
Total debt	925,000	1,660,000
Notes payable to bank, monthly interest rate at 9.50, final payment due September 2026
SHORT-TERM AND LONG-TERM DEBT
Total debt	1,548,929	1,873,831
Notes payable to bank, monthly interest rate at 9.5, final payment due September 2026
SHORT-TERM AND LONG-TERM DEBT
Total debt	232,166	294,761
Term notes payable to United Bank, Tri-State Paving acquisition, final payment due by June 1, 2027
SHORT-TERM AND LONG-TERM DEBT
Total debt	5,036,626	5,698,761
Notes payable to Corns Enterprises, final payment due April 29, 2026
SHORT-TERM AND LONG-TERM DEBT
Total debt	$ 233,709	$ 468,523

SHORT-TERM AND LONG-TERM DEBT - Summary of short-term and long-term debt - Parenthetical (Details) - USD ($)	3 Months Ended	6 Months Ended	12 Months Ended
	Dec. 31, 2023	Mar. 31, 2024	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2021
SHORT-TERM AND LONG-TERM DEBT
Fair value of debt		$ 30,100,000	$ 32,100,000
Line of credit payable to bank, final payment due by June 28, 2024
SHORT-TERM AND LONG-TERM DEBT
Interest rate		8.50%
Note payable to bank, final payment due June 2028
SHORT-TERM AND LONG-TERM DEBT
Interest rate		7.25%
Note payable in monthly or annual installments		$ 202,000
Paycheck Protection Program loans from Small Business Administration, 1.0% simple interest, initially forgiven in the fiscal year ended September 30, 2021. Final forgiveness decision has not been determined.
SHORT-TERM AND LONG-TERM DEBT
Interest rate					1.00%
Term note payable to United Bank, WV Pipeline acquisition, final payment due by March 25, 2026
SHORT-TERM AND LONG-TERM DEBT
Interest rate		4.25%
Note payable in monthly or annual installments		$ 64,853
Notes payable to finance companies, final payment, due December 2023
SHORT-TERM AND LONG-TERM DEBT
Interest rate			6.70%
Note payable in monthly or annual installments	$ 327,000			$ 282,000
Notes payable to bank, final payment due November 2034
SHORT-TERM AND LONG-TERM DEBT
Interest rate		4.82%
Note payable in monthly or annual installments		$ 7,848
Notes payable to bank, final payment due November 2025
SHORT-TERM AND LONG-TERM DEBT
Interest rate		9.50%
Note payable in monthly or annual installments		$ 12,580
Notes payable to banks due October 2027
SHORT-TERM AND LONG-TERM DEBT
Interest rate		6.00%
Note payable in monthly or annual installments		$ 59,932
Notes payable to David and Daniel Bolton due final payment December 31, 2026
SHORT-TERM AND LONG-TERM DEBT
Interest rate		3.25%
Note payable in monthly or annual installments		$ 500,000
Notes payable to finance companies due April 2022 through August 2026
SHORT-TERM AND LONG-TERM DEBT
Note payable in monthly or annual installments		$ 76,600	$ 50,000
Notes payable to finance companies due April 2022 through August 2026 \| Minimum
SHORT-TERM AND LONG-TERM DEBT
Interest rate		0.00%
Notes payable to finance companies due April 2022 through August 2026 \| Maximum
SHORT-TERM AND LONG-TERM DEBT
Interest rate		6.00%
Notes payable to bank, monthly interest rate at 9.5, final payment due September 2026
SHORT-TERM AND LONG-TERM DEBT
Interest rate		9.50%
Note payable in monthly or annual installments		$ 68,150
Term notes payable to United Bank, Tri-State Paving acquisition, final payment due by June 1, 2027
SHORT-TERM AND LONG-TERM DEBT
Interest rate		4.50%
Note payable in monthly or annual installments		$ 129,910
Notes payable to Corns Enterprises, final payment due April 29, 2026
SHORT-TERM AND LONG-TERM DEBT
Interest rate		3.50%
Note payable in monthly or annual installments		$ 1,000,000
Notes payable on annual installments		250,000
Fair value of debt		$ 936,000

SHORT-TERM AND LONG-TERM DEBT - Additional information (Details) - USD ($)		1 Months Ended	6 Months Ended	12 Months Ended
	Apr. 27, 2020	Apr. 30, 2023	Mar. 31, 2024	Sep. 30, 2021	Sep. 30, 2023	Jan. 19, 2023	Jul. 13, 2022	Apr. 07, 2020
SHORT-TERM AND LONG-TERM DEBT
Line of credit			$ 21,267,302		$ 23,942,868
Line of credit remaining borrowing capacity			$ 8,967,302		$ 15,229,953
Interest rate			8.50%		8.50%
Line of credit balance available			$ 8,967,302		$ 15,229,953
Ratio to be maintained by borrower for maximum senior funded debt to EBDITA			3.5
Insurance policy premium outstanding			$ 0		$ 950,000
Policy premium outstanding and premium amount			$ 0
PPP Loans
SHORT-TERM AND LONG-TERM DEBT
Lender aggregate principal amount								$ 13,100,000
Unanimously voted to return loans	$ 3,300,000
Amount of PPP loans to fund operations	$ 9,800,000
PPP loans received				$ 9,800,000
Short-term borrowings due to accrued interest		$ 9,800,000
United Bank, Inc. \| Revolving credit facility
SHORT-TERM AND LONG-TERM DEBT
Line of credit						$ 30,000,000.0	$ 15,000,000.0
Interest rate on the line of credit description			“Wall Street Journal” Prime Rate
Interest rate on line of credit			4.99%
Minimum tangible net worth			$ 28,000,000.0
Minimum traditional debt service coverage ratio			1.50x
Minimum current ratio			1.20x
Maximum debt to tangible net worth ratio			2.75x

GOODWILL AND INTANGIBLE ASSETS - Goodwill (Details) - USD ($)	6 Months Ended	12 Months Ended
	Mar. 31, 2024	Sep. 30, 2023
Goodwill
Beginning balance	$ 4,087,554	$ 4,087,554
Acquired	0	0
Ending balance	$ 4,087,554	$ 4,087,554

GOODWILL AND INTANGIBLE ASSETS - Intangible assets subject to amortization (Details) - USD ($)		3 Months Ended		6 Months Ended		12 Months Ended
	Mar. 31, 2024	Mar. 31, 2024	Mar. 31, 2023	Mar. 31, 2024	Mar. 31, 2023	Sep. 30, 2023
GOODWILL AND INTANGIBLE ASSETS
Original Cost	$ 4,548,843	$ 4,548,843		$ 4,548,843
Accumulated Amortization and Impairment	1,382,028	108,142	$ 132,621	216,284	$ 265,401	$ 1,165,744
Net Book Value	$ 3,166,815	3,166,815		3,166,815		3,383,099
Accumulated Amortization and impairment on identifiable intangible assets		$ 108,142	132,621	216,284	265,401
Goodwill impairment				$ 0		0
Customer Relationships \| West Virginia Pipeline
GOODWILL AND INTANGIBLE ASSETS
Remaining Life	81 months	81 months		81 months
Original Cost	$ 2,209,724	$ 2,209,724		$ 2,209,724
Accumulated Amortization and Impairment	718,145	55,242	65,647	110,484	120,889	607,661
Net Book Value	$ 1,491,579	$ 1,491,579		$ 1,491,579		1,602,063
Customer Relationships \| Tri-State Paving
GOODWILL AND INTANGIBLE ASSETS
Remaining Life	97 months	97 months		97 months
Original Cost	$ 1,649,159	$ 1,649,159		$ 1,649,159
Accumulated Amortization and Impairment	316,089	41,229	41,178	82,458	82,458	233,631
Net Book Value	$ 1,333,070	$ 1,333,070		$ 1,333,070		1,415,528
Tradename \| West Virginia Pipeline
GOODWILL AND INTANGIBLE ASSETS
Remaining Life	81 months	81 months		81 months
Original Cost	$ 263,584	$ 263,584		$ 263,584
Accumulated Amortization and Impairment	85,682	6,591	6,587	13,182	13,182	72,500
Net Book Value	$ 177,902	$ 177,902		$ 177,902		191,084
Tradename \| Tri-State Paving
GOODWILL AND INTANGIBLE ASSETS
Remaining Life	97 months	97 months		97 months
Original Cost	$ 203,213	$ 203,213		$ 203,213
Accumulated Amortization and Impairment	38,949	5,080	5,079	10,160	10,161	28,789
Net Book Value	164,264	164,264		164,264		174,424
Non-competes \| West Virginia Pipeline
GOODWILL AND INTANGIBLE ASSETS
Original Cost	83,203	83,203		83,203
Accumulated Amortization and Impairment	83,203				10,397	83,203
Non-competes \| Tri-State Paving
GOODWILL AND INTANGIBLE ASSETS
Original Cost	39,960	39,960		39,960
Accumulated Amortization and Impairment	39,960		9,963		19,980	39,960
Employment agreement/non-compete \| Revolt Energy
GOODWILL AND INTANGIBLE ASSETS
Original Cost	100,000	$ 100,000		$ 100,000
Accumulated Amortization and Impairment	$ 100,000		$ 4,167		$ 8,334	$ 100,000

GOODWILL AND INTANGIBLE ASSETS - Identifiable intangible assets (Details) - USD ($)	Mar. 31, 2024	Sep. 30, 2023
Amortization expense
April 2024 to March 2025	$ 432,564
April 2025 to March 2026	432,564
April 2026 to March 2027	432,564
April 2027 to March 2028	432,564
April 2028 to March 2029	432,564
After	1,003,995
Total	$ 3,166,815	$ 3,383,099

LEASE OBLIGATIONS (Details)				3 Months Ended		6 Months Ended
LEASE OBLIGATIONS (Details)	Aug. 11, 2022 USD ($) item	Apr. 29, 2022 USD ($) item	Mar. 25, 2021 Y	Mar. 31, 2024 USD ($)	Mar. 31, 2023 USD ($)	Mar. 31, 2024 USD ($) item agreement	Mar. 31, 2023 USD ($)	Sep. 30, 2023 USD ($)	Mar. 28, 2023 USD ($)	Aug. 12, 2022 USD ($)
LEASE OBLIGATIONS
Operating lease payments for office space per month						$ 1,500
Term of operating lease			2 years
Number of renewable options available \| Y			5
Operating lease, renewal term			1 year
Number of financing leases entered \| agreement						2
Finance lease, value				$ 160,000		$ 160,000
Term of finance leases				22 months		22 months
Finance lease, interest rate				0.00%		0.00%
Finance lease, monthly installment payments						$ 6,645
Option to cancel the finance lease						false
Number of right of use operating leases \| item		2
Carrying value				$ 1,286,881		$ 1,286,881		$ 1,075,815
Rental expense				3,300,000	$ 1,500,000	8,700,000	$ 4,200,000
Operating Lease for Hurricane, WV Facility
LEASE OBLIGATIONS
Net present value		$ 236,000
Carrying value				86,000		86,000
Operating Lease for Chattanooga, Tennessee Facility
LEASE OBLIGATIONS
Net present value		$ 144,000
Carrying value				24,000		24,000
Interest rate on operating lease		4.50%
Operating Lease with Enterprise Fleet Management, Inc
LEASE OBLIGATIONS
Net present value	$ 1,200,000
Carrying value				$ 2,400,000		$ 2,400,000
Number of vehicles to be used \| item	31					71
Operating Lease with Enterprise Fleet Management, Inc \| Minimum
LEASE OBLIGATIONS
Vehicle lease program rate on operating lease				12.80%		12.80%
Operating Lease with Enterprise Fleet Management, Inc \| Maximum
LEASE OBLIGATIONS
Vehicle lease program rate on operating lease				15.60%		15.60%
Operating Lease with RICA Developers, LLC
LEASE OBLIGATIONS
Net present value										$ 125,000
Carrying value				$ 64,000		$ 64,000
Interest rate on operating lease				8.50%		8.50%
Operating Lease for Winchester, Kentucky Facility
LEASE OBLIGATIONS
Net present value									$ 290,000
Carrying value				$ 209,000		$ 209,000
Interest rate on operating lease									7.75%

LEASE OBLIGATIONS - Operating lease-weighted average remaining term (Details)	Mar. 31, 2024 USD ($)
LEASE OBLIGATIONS
Weighted average remaining term	3 years 4 months 24 days
Present value of remaining liability	$ 2,781,514
Operating lease 1
LEASE OBLIGATIONS
Weighted average remaining term	1 year
Present value of remaining liability	$ 86,364
Operating lease 2
LEASE OBLIGATIONS
Weighted average remaining term	2 months 12 days
Present value of remaining liability	$ 23,636
Operating lease 3
LEASE OBLIGATIONS
Weighted average remaining term	3 years 9 months 18 days
Present value of remaining liability	$ 2,399,040
Operating lease 4
LEASE OBLIGATIONS
Weighted average remaining term	6 months
Present value of remaining liability	$ 63,671
Operating lease 5
LEASE OBLIGATIONS
Weighted average remaining term	2 years
Present value of remaining liability	$ 208,803

LEASE OBLIGATIONS - Operating lease maturity schedule (Details)	Mar. 31, 2024 USD ($)
LEASE OBLIGATIONS
April 2024 to March 2025	$ 1,549,641
April 2025 to March 2026	1,267,823
April 2026 to March 2027	718,798
April 2027 to March 2028	95,200
Operating lease liability	3,631,462
Less amounts representing interest	(849,948)
Present value of operating lease liabilities	$ 2,781,514

LEASE OBLIGATIONS - Operating lease expense (Details) - USD ($)	3 Months Ended		6 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Mar. 31, 2024	Mar. 31, 2023
LEASE OBLIGATIONS
Total amortization	$ 247,208	$ 182,320	$ 524,828	$ 314,860
Total interest	57,301	25,214	133,688	42,325
Total amortization and interest	304,509	207,534	658,516	357,185
Cash Paid for Operating Leases	304,509	207,534	658,516	357,185
Operating lease 1
LEASE OBLIGATIONS
Total amortization	19,931	19,052	46,636	37,893
Total interest	1,069	1,947	2,364	4,107
Cash Paid for Operating Leases	21,000	20,999	49,000	42,000
Operating lease 2
LEASE OBLIGATIONS
Total amortization	16,791	15,398	33,396	30,957
Total interest	318	1,046	822	2,265
Cash Paid for Operating Leases	17,109	16,444	34,218	33,222
Operating lease 3
LEASE OBLIGATIONS
Total amortization	168,674	109,157	330,398	177,685
Total interest	49,828	19,642	118,738	32,212
Cash Paid for Operating Leases	218,502	130,933	449,136	212,031
Operating lease 4
LEASE OBLIGATIONS
Total amortization	19,302	31,707	61,030	61,319
Total interest	2,298	819	3,770	1,981
Cash Paid for Operating Leases	21,600	21,996	64,800	52,770
Operating lease 5
LEASE OBLIGATIONS
Total amortization	22,510	7,006	53,368	7,006
Total interest	3,788	1,760	7,994	1,760
Cash Paid for Operating Leases	$ 26,298	$ 17,162	$ 61,362	$ 17,162

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Mar. 31, 2024
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false