What changed in this filing

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Item 1. Financial Statements

2022-05-12 compared with 2022-02-11 · 166 added, 98 removed, 377 unchanged (41% of the section changed)

7 unchanged sentences

Allowance for doubtful accounts

Retainages receivable

Retainage receivable

Other receivables

20 unchanged sentences

Shareholders’ equity

Preferred stock, $ .0001 par value Authorized 1,000,000 shares, none issued at December 31, 2021 and 206 issued at September 30, 2021

Common stock, $ .0001 par value Authorized 50,000,000 shares, 17,466,328 issued and 16,247,898 outstanding at December 31, 2021 and 14,839,836 issued and 13,621,406 outstanding at September 30, 2021

Treasury stock, 1,218,430 shares at December 31, 2021 and September 30, 2021

Preferred stock, $ .0001 par value Authorized 1,000,000 shares, none issued at March 31, 2022 and 206 issued at September 30, 2021

Common stock, $ .0001 par value Authorized 50,000,000 shares, 17,466,328 issued and 16,247,898 outstanding at March 31, 2022 and 14,839,836 issued and 13,621,406 outstanding at September 30, 2021

Treasury stock, 1,218,430 shares at March 31, 2022 and September 30, 2021

Additional paid in capital

9 unchanged sentences

Three Months Ended

Six Months Ended

Cost of revenues

Selling and administrative expenses

Income (loss) from operations

(Loss) income from operations

( 1,950,390 )

( 2,703,161 )

Other income (expense)

3 unchanged sentences

Gain on sale of equipment

Income (loss) before income taxes

Income tax expense (benefit)

Net income (loss)

(Loss) income before income taxes

( 1,646,997 )

( 2,364,101 )

Income tax (benefit) expense

Net (loss) income

( 1,311,471 )

( 1,959,133 )

Dividends on preferred stock

Net income (loss) available to common shareholders

Net (loss) income available to common shareholders

( 1,388,721 )

( 2,113,633 )

Weighted average shares outstanding-basic

Weighted average shares-diluted

Earnings (loss) per share available to common shareholders

Earnings (loss) per share-diluted available to common shareholders

(Loss) earnings per share available to common shareholders

(Loss) earnings per share-diluted available to common shareholders

The Accompanying Notes are an Integral Part of These Financial Statements

1 unchanged sentence

Consolidated Statements of Cash Flows

Three Months Ended

Six Months Ended

Cash flows from operating activities:

Net income (loss)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

( 1,959,133 )

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Depreciation expense

2 unchanged sentences

Amortization of intangible assets

(Increase) decrease in contracts receivable

( 4,265,751 )

Accreted interest on note payable

Decrease (increase) in contracts receivable

(Increase) decrease in retainage receivable

Decrease in other receivables

( 1,007,082 )

Decrease (increase) in other receivables

Decrease in contract assets

Decrease in prepaid expenses

Increase in accounts payable

Increase (decrease) in accrued expenses

Increase in prepaid expenses

( 1,731,735 )

( 1,526,616 )

Decrease in accounts payable

Increase (decrease) in accrued expenses and other current liabilities

( 1,695,856 )

Increase (decrease) in contract liabilities

( 1,352,136 )

Net cash provided by operating activities

Net cash provided by (used in) operating activities

( 2,414,229 )

Cash flows from investing activities:

3 unchanged sentences

( 2,084,200 )

( 3,763,781 )

Proceeds from sales of property and equipment

1 unchanged sentence

( 1,525,547 )

( 6,476,793 )

Cash flows from financing activities:

Par value of common stock issued from preferred stock conversion

Preferred stock redemption

2 unchanged sentences

Borrowings on lines of credit and short term debt, net of (repayments)

( 2,803,888 )

Principal payments on long term debt

( 2,024,150 )

( 1,229,051 )

Net cash (used in) provided by financing activities

( 6,038,563 )

Increase in cash and cash equivalents

Increase (decrease) in cash and cash equivalents

( 5,133,896 )

Cash and cash equivalents beginning of period

2 unchanged sentences

Purchases of property & equipment under financing agreements

Insurance premiums financed

Note payable to finance West Virginia Pipeline acquisition

Accrued dividends on preferred stock

Debt assumed in acquisitions

5 unchanged sentences

Consolidated Statements of Changes in Shareholders’ Equity

For the three months ended December 31, 2021, and 2020

For the six months ended March 31, 2022 and 2021

Additional Paid

2 unchanged sentences

( 34,848,032 )

( 1,959,133 )

Accrued preferred dividends

Balance at December 31, 2020

Balance at March 31, 2021

( 36,961,665 )

5 unchanged sentences

Preferred share conversion

Balance at December 31, 2021

Balance at March 31, 2022

( 25,449,838 )

17 unchanged sentences

(“West Virginia Pipeline”), 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 from the Company's union subsidiaries.

SQP Construction Group, Inc.

2 unchanged sentences

As a general contractor, SQP manages the overall construction project and subcontracts most of the work.

The employees of West Virginia Pipeline and SQP are non-union and are managed independently from the Company’s union subsidiaries.

The employees of SQP are non-union and are managed independently from the Company’s union subsidiaries.

On April 29, 2022, Tri-State Paving Acquisition Company (“TSP”), a West Virginia corporation and a newly formed wholly owned subsidiary of the Company, completed the acquisition of Tri-State Paving & Sealcoat, LLC (“Tri-State Paving”), a West Virginia corporation located in Hurricane, WV.

TSP acquired substantially all the assets of Tri-State Paving for $ 7.5 million in cash, a $ 1.0 million seller note, and $ 1.0 million in the Company’s common stock, which resulted in the issuance of 419,287 new common shares.

TSP will provide utility paving services to water distribution customers in the Charleston, WV, Lexington, KY, and Chattanooga, TN markets.

The employees of TSP will be non-union and managed independently from the Company’s union subsidiaries.

Interim Financial Statements

3 unchanged sentences

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 months ended December 31, 2021, and 2020 are not necessarily indicative of the results to be expected for the full year or any other interim period.

The operating results for the three and six months ended March 31, 2022 and 2021 are not necessarily indicative of the results to be expected for the full year or any other interim period.

Principles of Consolidation

10 unchanged sentences

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, 2021, for a more detailed discussion of our significant accounting policies.

There were no material changes to these critical accounting policies during the three months ended December 31, 2021.

There were no material changes to these critical accounting policies during the three and six months ended March 31, 2022.

REVENUE RECOGNITION

27 unchanged sentences

Settlement with the customer of outstanding affirmative claims is dependent on the claims resolution process and could extend beyond one year.

on our historical experience, we generally consider the collection risk related to billable amounts to be low.

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.

4 unchanged sentences

DISAGGREGATION OF REVENUE

The Company disaggregates revenue based on our operating groups and contract types as it is the format that is regularly reviewed by management.

Our reportable operating groups are Gas & Water Distribution, Gas & Petroleum Transmission, Electrical, Mechanical, & General services and construction.

The operating groups for the three months ended December 31, 2020, have been revised to reflect the current presentation.

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.

Certain reclassifications have been made to the three and six months ended March 31, 2021, to reflect the current presentation.

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 months ended December 31, 2021, and 2020:

Three Months Ended December 31, 2021

The following tables present our disaggregated revenue for the three and six months ended March 31, 2022 and 2021:

Three Months Ended March 31, 2022

Gas & Petroleum

9 unchanged sentences

Total revenue from contracts

Three Months Ended December 31, 2020

Three Months Ended March 31, 2021

Gas & Petroleum

9 unchanged sentences

Total revenue from contracts

Six Months Ended March 31, 2022

Gas & Petroleum

Mechanical, and

Total revenue

from contracts

Lump sum contracts

Unit price contracts

Cost plus and T&M contracts

Total revenue from contracts

Earned over time

Earned at point in time

Total revenue from contracts

Six Months Ended March 31, 2021

Gas & Petroleum

Mechanical, and

Total revenue

from contracts

Lump sum contracts

Unit price contracts

Cost plus and T&M contracts

Total revenue from contracts

Earned over time

Earned at point in time

Total revenue from contracts

CONTRACT BALANCES

4 unchanged sentences

The timing of billings to customers may generate contract assets or contract liabilities.

During the three months ended December 31, 2021, we recognized revenue of $ 1.9 million that was included in the contract liability balance at September 30, 2021.

During the three and six months ended March 31, 2022, the Company recognized revenue of $ 2.6 million that was included in the contract liability balance at September 30, 2021.

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

March 31, 2022

September 30, 2021

December 31, 2021

Accounts receivable-trade, net of allowance for doubtful accounts

( 4,507,492 )

Contract assets

10 unchanged sentences

Contract costs consist of direct costs on contracts, including labor and materials, amounts payable to subcontractors, direct overhead costs and equipment expense (primarily depreciation, fuel, maintenance and repairs).

During the three months ended December 31, 2021, there was no revenue recognized as a result of changes in contract transaction price related to performance obligations that were satisfied prior to September 30, 2021.

During the three and six months ended March 31, 2022, there was no revenue recognized as a result of changes in contract transaction price related to performance obligations that were satisfied prior to September 30, 2021.

Changes in contract transaction price can result from such items as changes in projected profit, executed or estimated change orders, and unresolved contract modifications and claims.

The Company does not sell warranties for its construction services.

At December 31, 2021, the Company had $ 40.5 million in remaining unsatisfied performance obligations, in which revenue is expected to be recognized in less than twelve months.

At March 31, 2022, the Company had $ 66.2 million in remaining unsatisfied performance obligations, in which revenue is expected to be recognized in less than twelve months.

UNCOMPLETED CONTRACTS

Costs, estimated earnings, and billings on uncompleted contracts as of December 31, 2021, and September 30, 2021, are summarized as follows:

December 31, 2021

Costs, estimated earnings, and billings on uncompleted contracts as of March 31, 2022, and September 30, 2021, are summarized as follows:

March 31, 2022

September 30, 2021

2 unchanged sentences

Less billings to date

( 1,614,414 )

Costs and estimated earnings in excess of billed on uncompleted contracts

Less billings in excess of costs and estimated earnings on uncompleted contracts

( 1,614,414 )

Backlog at December 31, 2021, and September 30, 2021, was $ 101.6 million and $ 72.2 million, respectively.

Backlog at March 31, 2022, and September 30, 2021, was $ 120.3 million and $ 72.2 million, respectively.

FAIR VALUE MEASUREMENTS

The Fair Value Measurements and Disclosures Topic of the Financial Accounting Standards Board (FASB) Accounting Standards Codification defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements.

The fair value measurement guidance of the Financial Accounting Standards Board (FASB) Accounting Standards Codification defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands 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 Measurements Topic of the FASB Accounting Standards Codification 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 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:

4 unchanged sentences

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 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 short-term borrowings.

The fair value of the Company’s long term fixed-rate debt to unrelated parties was estimated using a discounted cash flow analysis and a yield rate that was estimated based on the borrowing rates for bank loans with similar terms and maturities.

The fair value of the aggregate principal amount of the Company’s fixed-rate debt of $ 8.7 million at December 31, 2021, was $ 8.8 million.

The fair value of the aggregate principal amount of the Company’s fixed-rate debt of $ 10.1 million at March 31, 2022, was $ 10.1 million.

The fair value of the aggregate principal amount of the Company’s fixed-rate debt of $ 10.0 million at September 30, 2021, was $ 9.9 million.

All receivables and payables are carried at net realizable value which approximates fair value because of their short duration to maturity.

EARNINGS (LOSS) PER SHARE

The amounts used to compute the earnings (loss) per share for the three months ended December 31, 2021, and 2020 are summarized below.

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

(LOSS) EARNINGS PER SHARE

The amounts used to compute the (loss) earnings per share for the three and six months ended March 31, 2022, and 2021 are summarized below.

Three Months Ended

Net income (loss)

Six Months Ended

Net (loss) income

( 1,311,471 )

( 1,959,133 )

Dividends on preferred stock

Income (loss) available to common shareholders

Weighted average shares outstanding-basic

(Loss) income available to common shareholders

( 1,388,721 )

( 2,113,633 )

Weighted average shares outstanding

Weighted average shares outstanding-diluted

Earnings (loss) per share available to common shareholders

Earnings (loss) per share available to common shareholders-diluted

(Loss) earnings per share available to common shareholders

(Loss) earnings per share available to common shareholders-diluted

The components of income taxes are as follows:

Three Months Ended

December 31, 2021

December 31, 2020

Total income tax (benefit) expense

The effective income tax rate for the three months ended December 31, 2021, was 29.7 %, as compared to 9.7 % for the same period in 2020.

March 31, 2022

March 31, 2021

Total income tax benefit

Six Months Ended

March 31, 2022

March 31, 2021

Total income tax expense (benefit)

The effective income tax rate for the three months ended March 31, 2022, was ( 25.5 ) %, as compared to ( 20.4 ) % for the same period in 2021.

The effective income tax rate for the six months ended March 31, 2022, was 33.4 %, as compared to ( 17.1 ) % for the same period in 2021.

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.

Per diem paid to employees on construction projects and entertainment expenses are only partially deductible from taxable income and can have a significant impact on the effective tax rate.

For the three months ended December 31, 2021, the non-deductible portion of per diem and entertainment expenses resulted in an approximate $ 129,000 increase in taxable income as compared to $ 76,000 for the same period in 2020.

For the three months ended March 31, 2022, the non-deductible portion of per diem and entertainment expenses resulted in an approximate $ 106,000 increase in taxable income as compared to $ 221,000 for the same period in the prior year.

For the six months ended March 31, 2022, the non-deductible portion of per diem and entertainment expenses resulted in an approximate $ 235,000 increase in taxable income as compared to $ 297,000 for the same period in the prior year.

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

18 unchanged sentences

The interest rate on the line of credit is the “Wall Street Journal” Prime Rate (the index) with a floor of 4.99 %.

Based on the borrowing base calculation, the Company was able to borrow up to $ 12.5 million as of December 31, 2021.

The Company had $ 4.5 million in borrowings on the line of credit, leaving $ 8.0 million available on the line of credit as of December 31, 2021.

The interest rate at December 31, 2021, was 4.99 %.

Based on the borrowing base calculation, the Company was able to borrow up to $ 9.4 million and had no borrowings on the line of credit as of March 31, 2022.

The interest rate at March 31, 2022, was 4.99 %.

Based on the borrowing base calculation, the Company was able to borrow up to $ 12.2 million as of September 30, 2021.

14 unchanged sentences

Minimum tangible net worth of $ 21.0 million to be measured quarterly.

The Company believes it was in compliance with all covenants for the $ 12.5 million component of Operating Line of Credit (2021) at December 31, 2021.

The Company believes it was in compliance with all covenants for the $ 12.5 million and $ 2.5 million components of the line of credit at March 31, 2022.

The Company also finances insurance policy premiums on a short-term basis through a financing company.

2 unchanged sentences

In January 2022, the Company financed $ 3.4 million in insurance premiums.

At December 31, 2021, there was no outstanding balance for insurance premiums financed.

A summary of short-term and long-term debt as of December 31, 2021, and September 30, 2021, is as follows:

At March 31, 2022, there was a $ 2.2 million outstanding balance for insurance premiums financed.

A summary of short-term and long-term debt as of March 31, 2022, and September 30, 2021, is as follows:

September 30,

1 unchanged sentence

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

Notes payable to finance companies, due in monthly installments totaling $ 68,079 at December 31, 2021 and $ 70,062 at September 30, 2021, including interest ranging from 0.00 % to 6.03 %, final payments due January 2022 through August 2026, secured by equipment.

Note payable to finance company for insurance premiums financed, due in monthly installments totaling $ 272,000 , including interest rate at 2.70 %, final payment made November 2021.

Notes payable to finance companies, due in monthly installments totaling $ 68,079 at March 31, 2022 and $ 70,062 at September 30, 2021, including interest ranging from 0.00 % to 6.03 %, final payments due April 2022 through August 2026, secured by equipment.

Note payable to finance company for insurance premiums financed, due in monthly installments totaling $ 282,000 in FY 2022 and $ 272,000 in FY 2021, including interest rate at 3.50 %, final payment November 2022.

Notes payable to bank, due in monthly installments totaling $ 7,799 , including interest at 4.82 %, final payment due November 2034 secured by building and property.

2 unchanged sentences

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

Notes payable to bank, monthly interest payments at 4.25 % of outstanding balance between August 2021 and January 2022.

Notes payable to bank, interest at 4.25 % of outstanding balance due monthly between August 2021 and January 2022.

Note payments due in monthly installments totaling $ 68,073 , including interest at 4.25 % , beginning February 2022 with final payment due January 2026, secured by equipment, guaranteed by certain directors of the Company.

3 unchanged sentences

Energy Services paid $ 3.5 million in cash and acquired a $ 3.0 million seller note with a term of five years with an interest rate of 3.25 %.

Company incurred approximately $ 150,000 in expenses related to the acquisition.

West Virginia Pipeline earned revenues of $ 2.3 million for the three months ended December 31, 2021.

The Company incurred approximately $ 150,000 in expenses related to the acquisition.

West Virginia Pipeline earned revenues of $ 1.5 million and $ 3.8 million, respectively, for the three and six months ended March 31, 2022, and $ 1.2 million for the three and six months ended March 31, 2021.

On April 30, 2021, the Company’s Nitro subsidiary completed an asset purchase of Revolt Energy, Inc.

1 unchanged sentence

After the acquisition, Revolt Energy began to operate as a division within Nitro.

Revolt Energy earned revenues of $ 257,000 for the three months ended December 31, 2021.

Revolt Energy earned revenues of $ 468,000 and $ 725,000 , respectively, for the three and six months ended March 31, 2022.

ASC 805-10-50-2 requires public companies that present comparative financial statements to present pro forma financial statements as though the business combination that occurred during the current fiscal year had occurred as of the beginning of the comparable prior annual reporting period.

24 unchanged sentences

Nitro’s and Revolt’s common union affiliations align to give Nitro flexibility on both solar installations and commercial electrical work.

On April 29, 2022, Tri-State Paving Acquisition Company ("TSP"), a West Virginia corporation and a newly formed wholly owned subsidiary of the Company, completed the acquisition of Tri-State Paving & Sealcoat, LLC ("Tri-State Paving"), a West Virginia corporation located in Hurricane, WV.

TSP acquired substantially all the assets of Tri-State Paving for $ 7.5 million in cash, a $ 1.0 million seller note, and $ 1.0 million in the Company's common stock.

TSP will provide utility paving services to water distribution customers in the Charleston, WV, Lexington, KY, and Chattanooga, TN markets.

The employees of TSP will be non-union and managed independently from the Company's union subsidiaries.

GOODWILL AND INTANGIBLE ASSETS

The Company follows the guidance of 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.

the current guidance, companies can first choose to assess any impairment based on qualitative factors (Step 0).

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 two-step quantitative assessment of goodwill impairment.

The Company did not have a goodwill impairment at December 31, 2021.

The Company did not have a goodwill impairment at March 31, 2022 or September 30, 2021.

A table of the Company’s goodwill is below:

2 unchanged sentences

Ending balance

A table of the Company’s intangible assets subject to amortization at December 31, 2021, is below:

A table of the Company’s intangible assets subject to amortization at March 31, 2022, and September 30, 2021 is below:

Amortization and

3 unchanged sentences

Amortization and

Impairment Three

Impairment Six

Impairment at

Impairment of

Impairment at

Intangible assets:

Original Cost

December 31, 2021

March 31, 2022

September 30, 2021

March 31, 2022

West Virginia Pipeline

3 unchanged sentences

Total intangible assets

The amortization and impairment on identifiable intangible assets for the three months ended December 31, 2021, and 2020 was $ 119,000 and $ 0 , respectively.

The $ 43,000 intangible impairment charge for the three months ended December 31, 2021, was the result of a mutual parting of ways with a former employee.

The amortization and impairment on identifiable intangible assets for the six months ended March 31, 2022 and 2021 was $ 195,856 and $ 0 , respectively.

The $ 43,000 intangible impairment charge for the six months ended March 31, 2022, was the result of a mutual parting of ways with a former employee.

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

Amortization Expense

January 1-December 31, 2022

January 1-December 31, 2023

January 1-December 31, 2024

January 1-December 31, 2025

January 1-December 31, 2026

April 2022-March 2023

April 2023-March 2024

April 2024-March 2025

April 2025-March 2026

April 2026-March 2027

The Company leases office space for SQP Construction Group for $ 1,500 per month.

2 unchanged sentences

The lease is expensed monthly and not treated as a right-to-use asset as it does not have a material impact on the Company’s consolidated financial statements.

During the three months ended December 31, 2021, the Company entered into two lease agreements of construction equipment for a combined $ 160,000 .

The leases have a term of twenty-two months with an interest rate of 0 %, combined monthly installment payments of $ 6,645 and are cancellable at any time without penalty.

During the six months ended March 31, 2022, the Company entered into two lease agreements of construction equipment for a combined $ 160,000 .

The leases have a term of twenty-two months with a stated interest rate of 0 %, combined monthly installment payments of $ 6,645 and are cancellable at any time without penalty.

The Company has the right to purchase the equipment at the expiration of the leases by applying the two-month deposit paid.

The Company treated the transactions as capital leases.

The right-of-use assets and finance lease obligations associated with these lease agreements are included in the consolidated balance sheets within property, plant and equipment and long-term debt, respectively, and do not have a material impact on the Company's financial statements.

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 fiscal year due to equipment requirements on construction projects and the availability of Company owned

Rental expense, which is included in cost of goods sold on the Consolidated Income Statement, was $ 1.9 million and $ 1.0 million for the three months ended December 31, 2021, and 2020, respectively.

Rental expense can vary by fiscal year 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 $ 1.6 million and $ 900,000 , respectively, for the three months ended March 31, 2022, and 2021 and $ 3.5 million and $ 1.9 million, respectively, for the six months ended March 31, 2022 and 2021.

PAYCHECK PROTECTION PROGRAM LOANS

12 unchanged sentences

SUBSEQUENT EVENTS

On January 27, 2022, the Company announced that it submitted an application to list its common stock on the Nasdaq Capital Market.

The Company believes that it meets or will meet the financial, liquidity, and corporate governance requirements for listing on the Nasdaq Capital Market;

however, any move to Nasdaq is contingent upon fulfilling those requirements and Nasdaq approval.

Management has evaluated subsequent events through the date which the financial statements were available for issue.

TSP acquired substantially all the assets of Tri-State Paving for $ 7.5 million in cash, a $ 1.0 million seller note, and $ 1.0 million in the Company's common stock, which resulted in the issuance of 419,287 new common shares.

TSP will provide utility paving services to water distribution customers in the Charleston, WV, Lexington, KY, and Chattanooga, TN markets.

The employees of TSP will be non-union and managed independently from the Company's union subsidiaries.

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.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements