Energy Services of America CORP 10-Q

Item 1. Financial Statements (Unaudited): Energy Services of America Corporation Consolidated Balance Sheets Unaudited ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As Restated ​ ​ June 30, ​ September 30, ​ 2023 2022 Assets ​ ​ ​ ​ ​ ​ Current assets ​ ​ Cash and cash equivalents ​ $ 9,038,562 ​ $ 7,427,474 Accounts receivable-trade ​ 47,875,592 ​ 38,525,223 Allowance for doubtful accounts ​ ( 51,063 ) ​ ( 70,310 ) Retainages receivable ​ 7,324,964 ​ 4,443,679 Other receivables ​ 567,031 ​ 10,866 Contract assets ​ 12,198,918 ​ 16,109,593 Prepaid expenses and other ​ 4,849,731 ​ 3,945,968 Total current assets ​ 81,803,735 ​ 70,392,493 ​ ​ ​ ​ ​ Property, plant and equipment, at cost ​ 82,131,349 ​ 73,736,433 less accumulated depreciation ​ ( 45,933,846 ) ​ ( 41,074,646 ) Total property and equipment, net ​ 36,197,503 ​ 32,661,787 ​ ​ ​ ​ ​ ​ ​ Right-of-use assets-operating lease ​ ​ 3,674,455 ​ ​ 1,611,321 Intangible assets, net ​ ​ 3,472,469 ​ ​ 3,873,690 Goodwill ​ ​ 4,087,554 ​ ​ 4,087,554 Total assets ​ $ 129,235,716 ​ $ 112,626,845 ​ ​ ​ ​ ​ Liabilities and shareholders’ equity ​ ​ ​ ​ Current liabilities ​ ​ ​ ​ Current maturities of long-term debt ​ $ 4,858,795 ​ $ 4,060,016 Lines of credit and short-term borrowings ​ 28,248,900 ​ 23,164,851 Current maturities of operating lease liabilities ​ ​ 1,213,496 ​ ​ 588,653 Accounts payable ​ 18,833,990 ​ 20,314,408 Accrued expenses and other current liabilities ​ 10,318,491 ​ 11,266,008 Contract liabilities ​ 16,576,181 ​ 6,027,578 Total current liabilities ​ 80,049,853 ​ 65,421,514 ​ ​ ​ ​ ​ Long-term debt, less current maturities ​ 12,731,183 ​ 13,494,084 Long-term operating lease liabilities, less current maturities ​ ​ 2,431,780 ​ ​ 1,015,624 Deferred tax liability ​ 5,155,011 ​ 4,455,079 Total liabilities ​ 100,367,827 ​ 84,386,301 ​ ​ ​ ​ Shareholders’ equity ​ ​ Common stock, $ .0001 par value Authorized 50,000,000 shares, 17,885,615 issued and 16,567,185 outstanding at June 30, 2023 and 17,885,615 issued and 16,667,185 outstanding at September 30, 2022 ​ 1,789 ​ 1,789 Treasury stock, 1,318,430 shares at June 30, 2023 and 1,218,430 shares at September 30, 2022 ​ ( 132 ) ​ ( 122 ) Additional paid in capital ​ 60,288,745 ​ 60,508,350 Retained deficit ​ ( 31,422,513 ) ​ ( 32,269,473 ) Total shareholders’ equity ​ 28,867,889 ​ 28,240,544 Total liabilities and shareholders’ equity ​ $ 129,235,716 ​ $ 112,626,845 ​ The Accompanying Notes are an Integral Part of These Financial Statements ​ 1 Table of Contents Energy Services of America Corporation Consolidated Statements of Income Unaudited ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As Restated ​ ​ ​ ​ As Restated ​ ​ Three Months Ended ​ Three Months Ended ​ Nine Months Ended ​ Nine Months Ended ​ ​ June 30, ​ June 30, ​ June 30, ​ June 30, ​ 2023 2022 2023 2022 Revenue ​ $ 85,529,892 ​ $ 51,171,939 ​ $ 199,245,920 ​ $ 129,223,642 ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of revenues ​ 74,650,897 ​ 44,754,346 ​ 178,480,010 ​ 114,632,057 ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross profit ​ 10,878,995 ​ 6,417,593 ​ 20,765,910 ​ 14,591,585 ​ ​ ​ ​ ​ ​ ​ ​ ​ Selling and administrative expenses ​ 5,283,617 ​ 3,821,043 ​ 16,487,502 ​ 10,870,677 Income from operations ​ 5,595,378 ​ 2,596,550 ​ 4,278,408 ​ 3,720,908 ​ ​ ​ ​ ​ ​ ​ ​ ​ Other income (expense) ​ ​ ​ ​ ​ ​ ​ ​ Interest income ​ — ​ — ​ 196 ​ 576 Other nonoperating expense ​ ( 72,338 ) ​ ( 174,957 ) ​ ( 163,525 ) ​ ( 438,195 ) Interest expense ​ ​ ( 639,888 ) ​ ​ ( 231,265 ) ​ ​ ( 1,713,862 ) ​ ​ ( 623,498 ) Gain on sale of equipment ​ 30,136 ​ 58,311 ​ 47,073 ​ 418,103 ​ ​ ( 682,090 ) ​ ( 347,911 ) ​ ( 1,830,118 ) ​ ( 643,014 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ Income before income taxes ​ 4,913,288 ​ 2,248,639 ​ 2,448,290 ​ 3,077,894 ​ ​ ​ ​ ​ ​ ​ ​ ​ Income tax expense ​ 1,497,742 ​ 651,396 ​ 767,970 ​ 945,216 ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income ​ $ 3,415,546 ​ $ 1,597,243 ​ $ 1,680,320 ​ $ 2,132,678 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average shares outstanding-basic ​ 16,602,556 ​ 16,449,829 ​ 16,659,169 ​ 16,270,499 ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average shares-diluted ​ 16,602,556 ​ 16,449,829 ​ 16,659,169 ​ 16,270,499 ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings per share-basic ​ $ 0.21 ​ $ 0.10 ​ $ 0.10 ​ $ 0.13 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings per share-diluted ​ $ 0.21 ​ $ 0.10 ​ $ 0.10 ​ $ 0.13 ​ The Accompanying Notes are an Integral Part of These Financial Statements ​ 2 Table of Contents Energy Services of America Corporation Consolidated Statements of Cash Flows Unaudited ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As Restated ​ ​ Nine Months Ended ​ Nine Months Ended ​ ​ June 30, ​ June 30, ​ 2023 2022 Cash flows from operating activities: ​ ​ Net income ​ $ 1,680,320 ​ $ 2,132,678 ​ ​ ​ ​ ​ ​ ​ Adjustments to reconcile net income to net cash provided by operating activities: ​ ​ ​ ​ ​ Accreted interest on PPP Loans ​ ​ 74,613 ​ 74,613 Depreciation expense ​ 5,356,166 ​ 4,006,663 Gain on sale of equipment ​ ( 47,073 ) ​ ( 418,103 ) Provision for deferred taxes ​ ​ 699,932 ​ ​ 845,216 Amortization of intangible assets ​ ​ 401,221 ​ ​ 307,698 Accreted interest on notes payable ​ ​ 31,200 ​ ​ 27,326 Increase in accounts receivable ​ ( 9,369,616 ) ​ ( 3,086,194 ) Increase in retainage receivable ​ ​ ( 2,881,285 ) ​ ​ ( 2,221,588 ) (Increase) decrease in other receivables ​ ​ ( 556,165 ) ​ ​ 489,771 Decrease (increase) in contract assets ​ ​ 3,910,675 ​ ​ ( 3,206,678 ) Decrease in prepaid expenses and other ​ 2,907,881 ​ 2,424,047 (Decrease) increase in accounts payable ​ ( 1,480,418 ) ​ 4,050,532 (Decrease) increase in accrued expenses and other current liabilities ​ ( 969,652 ) ​ 2,229,419 Increase in contract liabilities ​ 10,548,603 ​ 2,961,585 Net cash provided by operating activities ​ 10,306,402 ​ 10,616,985 ​ ​ ​ ​ Cash flows from investing activities: ​ ​ ​ ​ Investment in property and equipment ​ ( 8,498,746 ) ​ ( 4,671,687 ) Proceeds from sales of property and equipment ​ 546,672 ​ 643,603 Net cash used in investing activities ​ ( 7,952,074 ) ​ ( 4,028,084 ) ​ ​ ​ ​ ​ ​ Cash flows from financing activities: ​ ​ ​ ​ Preferred stock redemption ​ ​ — ​ ​ ( 1,210,525 ) Dividends on common stock ​ ​ ( 833,360 ) ​ ​ — Treasury stock purchased ​ ​ ( 219,615 ) ​ ​ — Borrowings on lines of credit and short-term debt, net of (repayments) ​ ​ 1,197,792 ​ ​ ( 4,884,880 ) Proceeds from long-term debt ​ ​ 3,100,000 ​ ​ — Principal payments on long-term debt ​ ​ ( 3,988,057 ) ​ ​ ( 3,324,838 ) Net cash used in financing activities ​ ( 743,240 ) ​ ( 9,420,243 ) Increase (decrease) in cash and cash equivalents ​ 1,611,088 ​ ( 2,831,342 ) Cash and cash equivalents beginning of period ​ 7,427,474 ​ 8,226,739 Cash and cash equivalents end of period ​ $ 9,038,562 ​ $ 5,395,397 ​ ​ ​ ​ ​ Supplemental schedule of noncash investing and financing activities: ​ ​ ​ ​ Purchases of property & equipment under financing agreements ​ $ 892,735 ​ $ 461,784 Prepaid insurance premiums financed ​ $ 3,811,644 ​ $ 3,352,971 Debt assumed in acquisitions for equipment ​ $ — ​ $ 390,445 Sellers’ note Tri-State Paving acquisition ​ $ — ​ $ 936,000 Note payable to finance Tri-State Paving acquisition ​ $ — ​ $ 7,500,000 Common stock issued to finance Tri-State Paving acquisition ​ $ — ​ $ 1,048,218 Par value of common stock issued from preferred stock conversion ​ $ — ​ $ 263 Operating lease right-of-use assets acquired in exchange for operating lease liabilities ​ $ 2,618,530 ​ $ 365,379 ​ ​ ​ ​ ​ Supplemental disclosures of cash flows information: ​ ​ ​ ​ Cash paid during the year for: ​ ​ ​ ​ Interest ​ $ 1,636,404 ​ $ 548,885 Income taxes ​ $ — ​ $ 6,706 ​ The Accompanying Notes are an Integral Part of These Financial Statements ​ 3 Table of Contents Energy Services of America Corporation Consolidated Statements of Changes in Shareholders’ Equity For the three and nine months ended June 30, 2023 and 2022 Unaudited ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ ​ Common Stock ​ Additional Paid ​ Retained ​ Treasury ​ Shareholders’ ​ Shares Amount in Capital Deficit Stock Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at September 30, 2022, as restated 16,667,185 ​ $ 1,789 ​ $ 60,508,350 ​ $ ( 32,269,473 ) ​ $ ( 122 ) ​ $ 28,240,544 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income, as restated — ​ — ​ — ​ 138,374 ​ — ​ ​ 138,374 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at December 31, 2022, as restated 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 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income — ​ ​ — ​ ​ — ​ ​ 3,415,546 ​ ​ — ​ ​ 3,415,546 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Treasury stock purchased by company ( 67,819 ) ​ ​ — ​ ​ ( 147,953 ) ​ ​ — ​ ​ ( 7 ) ​ ​ ( 147,960 ) Balance at June 30, 2023 16,567,185 ​ $ 1,789 ​ $ 60,288,745 ​ $ ( 31,422,513 ) ​ $ ( 132 ) ​ $ 28,867,889 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ ​ Common Stock ​ Additional Paid ​ Retained ​ Treasury ​ Shareholders’ ​ Shares Amount in Capital Deficit Stock Equity Balance at September 30, 2021, as restated ​ 13,621,406 ​ $ 1,484 ​ $ 60,670,699 ​ $ ( 36,019,788 ) ​ $ ( 122 ) ​ $ 24,652,273 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income, as restated ​ — ​ ​ — ​ ​ — ​ ​ 1,145,836 ​ ​ — ​ ​ 1,145,836 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Preferred share redemption, net of accrued dividends at September 30, 2021 ​ — ​ ​ — ​ ​ ( 1,210,525 ) ​ ​ — ​ ​ — ​ ​ ( 1,210,525 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Preferred share conversion ​ 2,626,492 ​ ​ 263 ​ ​ — ​ ​ — ​ ​ — ​ ​ 263 Balance at December 31, 2021, as restated 16,247,898 ​ $ 1,747 ​ $ 59,460,174 ​ $ ( 34,873,952 ) ​ $ ( 122 ) ​ $ 24,587,847 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss, as restated ​ — ​ ​ — ​ ​ — ​ ​ ( 610,401 ) ​ ​ — ​ ​ ( 610,401 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at March 31, 2022, as restated 16,247,898 ​ $ 1,747 ​ $ 59,460,174 ​ $ ( 35,484,353 ) ​ $ ( 122 ) ​ $ 23,977,446 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income, as restated ​ — ​ ​ — ​ ​ — ​ ​ 1,597,243 ​ ​ — ​ ​ 1,597,243 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Shares issued for Tri-State Paving acquisition ​ 419,287 ​ ​ 42 ​ ​ 1,048,176 ​ ​ — ​ ​ — ​ ​ 1,048,218 Balance at June 30, 2022, as restated ​ 16,667,185 ​ $ 1,789 ​ $ 60,508,350 ​ $ ( 33,887,110 ) ​ $ ( 122 ) ​ $ 26,622,907 ​ The Accompanying Notes are an Integral Part of These Financial Statements ​ 4 Table of Contents 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 services include 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 residential, commercial, and industrial solar 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 is 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 of 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. 5 Table of Contents 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, 2022, and 2021 included in the Company’s Amendment No. 1 to the Company’s Annual Report on Form 10-K/A filed with the SEC on May 31, 2023. 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 nine months ended June 30, 2023 and 2022 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 the Company’s Amendment No. 1 to the Company’s Annual Report on Form 10-K/A for the year ended September 30, 2022 for a more detailed discussion of our significant accounting policies. There were no material changes to these significant accounting policies during the three and nine months ended June 30, 2023. ​ 3. RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS On May 12, 2023, the audit committee of the Board of Directors of Energy Services, after considering the recommendation of management, concluded: that (a) the Company’s previously issued audited consolidated financial statements for the fiscal years ended September 30, 2022 and 2021 included in the Company’s annual reports on Form 10-K for the fiscal years ended September 30, 2022 and 2021, and (b) the Company’s unaudited consolidated financial statements for the periods ended June 30, 2021, December 31, 2021, March 31, 2022, June 30, 2022 and December 31, 2022 as reported in the Company’s quarterly reports on Form 10-Q for those periods (together, the “Reports”) should no longer be relied upon and have been restated. 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 the lender (“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 Small Business Administration (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. 6 Table of Contents 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 financial statements of the Company that were included in the Reports. 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. 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. Tables for the income statement impact “As previously reported” and “restated” for Paycheck Protection Program loan forgiveness and interest expense for the three and nine months ended June 30, 2022 are below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, 2022 ​ ​ As Previously ​ ​ ​ ​ ​ ​ ​ Reported Restated Change Interest expense ​ $ 206,394 ​ $ 231,265 ​ $ 24,871 Net income ​ ​ 1,622,114 ​ 1,597,243 ​ ( 24,871 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended June 30, 2022 ​ ​ As Previously ​ ​ ​ ​ ​ ​ ​ Reported Restated Change Interest expense ​ $ 548,885 ​ $ 623,498 ​ $ 74,613 Net income ​ 2,207,291 ​ 2,132,678 ​ ( 74,613 ) ​ A table for the balance sheet impact “As previously reported” and “restated” for Paycheck Protection Program loan forgiveness and interest expense at September 30, 2022 is below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2022 ​ ​ As Previously ​ ​ ​ ​ ​ ​ ​ Reported Restated Change Lines of credit and short-term borrowings ​ $ 13,080,320 ​ $ 23,164,851 ​ $ 10,084,531 Shareholders' equity ​ 38,325,075 ​ 28,240,544 ​ ( 10,084,531 ) ​ ​ 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; 7 Table of Contents ● 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 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. ​ ​ 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 nine months ended June 30, 2023 and 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, 2023 ​ ​ ​ ​ ​ ​ Electrical, ​ ​ ​ ​ Gas & Water ​ Gas & Petroleum ​ Mechanical, and ​ Total revenue ​ Distribution Transmission General from contracts Lump sum contracts ​ $ — ​ $ — ​ $ 29,132,537 ​ $ 29,132,537 Unit price contracts ​ 17,906,005 ​ 28,488,329 ​ 1,568,962 ​ 47,963,296 Cost plus and T&M contracts ​ — ​ — ​ 8,434,059 ​ 8,434,059 Total revenue from contracts ​ $ 17,906,005 ​ $ 28,488,329 ​ $ 39,135,558 ​ $ 85,529,892 ​ ​ ​ ​ ​ ​ ​ ​ ​ Earned over time ​ $ 7,738,419 ​ $ 28,488,329 ​ $ 35,991,934 ​ $ 72,218,682 Earned at point in time ​ 10,167,586 ​ — ​ 3,143,624 ​ 13,311,210 Total revenue from contracts ​ $ 17,906,005 ​ $ 28,488,329 ​ $ 39,135,558 ​ $ 85,529,892 ​ 8 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, 2022 ​ ​ ​ ​ ​ ​ Electrical, ​ ​ ​ ​ ​ Gas &Water ​ Gas & Petroleum ​ Mechanical, and ​ Total revenue ​ Distribution Transmission General from contracts Lump sum contracts ​ $ — ​ $ — ​ $ 13,033,786 ​ $ 13,033,786 Unit price contracts ​ 13,667,005 ​ 15,443,917 ​ — ​ 29,110,922 Cost plus and T&M contracts ​ — ​ — ​ 9,027,231 ​ 9,027,231 Total revenue from contracts ​ $ 13,667,005 ​ $ 15,443,917 ​ $ 22,061,017 ​ $ 51,171,939 ​ ​ ​ ​ ​ ​ Earned over time ​ $ 3,315,407 ​ $ 15,443,917 ​ $ 21,269,782 ​ $ 40,029,106 Earned at point in time ​ 10,351,598 ​ — ​ 791,235 ​ 11,142,833 Total revenue from contracts ​ $ 13,667,005 ​ $ 15,443,917 ​ $ 22,061,017 ​ $ 51,171,939 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended June 30, 2023 ​ ​ ​ ​ ​ ​ ​ ​ Electrical, ​ ​ ​ ​ ​ Gas & Water ​ Gas & Petroleum ​ Mechanical, and ​ Total revenue ​ Distribution Transmission General from contracts Lump sum contracts ​ $ — ​ $ — ​ $ 68,633,633 ​ $ 68,633,633 Unit price contracts ​ 43,825,957 ​ 50,718,004 ​ 4,368,041 ​ 98,912,002 Cost plus and T&M contracts ​ — ​ — ​ 31,700,285 ​ 31,700,285 Total revenue from contracts ​ $ 43,825,957 ​ $ 50,718,004 ​ $ 104,701,959 ​ $ 199,245,920 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earned over time ​ $ 21,328,177 ​ $ 50,718,004 ​ $ 97,618,445 ​ $ 169,664,626 Earned at point in time ​ 22,497,780 ​ — ​ 7,083,514 ​ 29,581,294 Total revenue from contracts ​ $ 43,825,957 ​ $ 50,718,004 ​ $ 104,701,959 ​ $ 199,245,920 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended June 30, 2022 ​ ​ ​ ​ ​ ​ ​ ​ Electrical, ​ ​ ​ ​ ​ Gas & Water ​ Gas & Petroleum ​ Mechanical, and ​ Total revenue ​ Distribution Transmission General from contracts Lump sum contracts ​ $ — ​ $ — ​ $ 32,918,955 ​ $ 32,918,955 Unit price contracts ​ 36,282,234 ​ 35,217,113 ​ — ​ 71,499,347 Cost plus and T&M contracts ​ — ​ — ​ 24,805,340 ​ 24,805,340 Total revenue from contracts ​ $ 36,282,234 ​ $ 35,217,113 ​ $ 57,724,295 ​ $ 129,223,642 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earned over time ​ $ 17,263,257 ​ $ 35,217,113 ​ $ 55,768,374 ​ $ 108,248,744 Earned at point in time ​ 19,018,977 ​ — ​ 1,955,921 ​ 20,974,898 Total revenue from contracts ​ $ 36,282,234 ​ $ 35,217,113 ​ $ 57,724,295 ​ $ 129,223,642 ​ ​ 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 nine months ended June 30, 2023, we recognized revenue of $ 100,000 and $ 5.7 million, respectively, that was included in the contract liability balance at September 30, 2022. 9 Table of Contents Accounts receivable-trade, net of allowance for doubtful accounts, contract assets and contract liabilities consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, 2023 September 30, 2022 Change ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accounts receivable-trade, net of allowance for doubtful accounts ​ $ 47,824,529 ​ $ 38,454,913 ​ $ 9,369,616 ​ ​ ​ ​ Contract assets ​ ​ ​ Cost and estimated earnings in excess of billings ​ $ 12,198,918 ​ $ 16,109,593 ​ $ ( 3,910,675 ) ​ ​ ​ ​ ​ ​ Contract liabilities ​ ​ ​ ​ ​ Billings in excess of cost and estimated earnings ​ $ 16,576,181 ​ $ 6,027,578 ​ $ 10,548,603 ​ ​ 7. PERFORMANCE OBLIGATIONS For the three and nine months ended June 30, 2023, 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, 2022. Changes in contract transaction price can result from items such as executed or estimated change orders, and unresolved contract modifications and claims. At June 30, 2023, the Company had $ 157.0 million in remaining unsatisfied performance obligations, in which revenue is expected to be recognized over the next twelve months. ​ 8. UNCOMPLETED CONTRACTS Costs, estimated earnings, and billings on uncompleted contracts as of June 30, 2023 and September 30, 2022, are summarized as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, 2023 September 30, 2022 Costs incurred on contracts in progress ​ $ 165,370,815 ​ $ 192,957,145 Estimated earnings, net of estimated losses ​ 19,220,491 ​ 28,150,060 ​ ​ 184,591,306 ​ 221,107,205 Less billings to date ​ 188,968,569 ​ 211,025,190 ​ ​ $ ( 4,377,263 ) ​ $ 10,082,015 ​ ​ ​ ​ ​ ​ ​ Costs and estimated earnings in excess of billed on uncompleted contracts ​ $ 12,198,918 ​ $ 16,109,593 ​ ​ ​ ​ ​ ​ ​ Less billings in excess of costs and estimated earnings on uncompleted contracts ​ 16,576,181 ​ 6,027,578 ​ ​ ​ ​ ​ ​ ​ ​ ​ $ ( 4,377,263 ) ​ $ 10,082,015 ​ Backlog at June 30, 2023 and September 30, 2022, was $ 185.9 million and $ 142.3 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 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. 10 Table of Contents 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 $ 27.2 million at June 30, 2023 was $ 25.3 million. The fair value of the aggregate principal amount of the Company’s fixed-rate debt of $ 25.1 million, as restated, at September 30, 2022 was $ 24.3 million, as restated. All other current assets and liabilities are carried at a 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 nine months ended June 30, 2023 and 2022 are summarized below. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As Restated ​ ​ ​ As Restated ​ ​ Three Months Ended ​ Three Months Ended ​ Nine Months Ended ​ Nine Months Ended ​ ​ June 30, ​ June 30, ​ June 30, ​ June 30, ​ 2023 2022 2023 2022 Net income, as restated ​ $ 3,415,546 ​ $ 1,597,243 ​ $ 1,680,320 ​ $ 2,132,678 ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average shares outstanding-basic ​ 16,602,556 ​ 16,449,829 ​ 16,659,169 ​ 16,270,499 ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average shares-diluted ​ 16,602,556 ​ 16,449,829 ​ 16,659,169 ​ 16,270,499 ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings per share-basic ​ $ 0.21 ​ $ 0.10 ​ $ 0.10 ​ $ 0.13 ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings per share-diluted ​ $ 0.21 ​ $ 0.10 ​ $ 0.10 ​ $ 0.13 ​ ​ 11 Table of Contents 11. INCOME TAXES The components of income taxes are as follows: The effective income tax rate for the three and nine months ended June 30, 2023 was 30.5 % and 31.4 %, respectively, as compared to 29.0 % as restated, and 30.7 %, as restated, for the same periods in fiscal year 2022. 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 state taxes, amortization of goodwill, and non-deductible amounts for per diem expenses. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ June 30, 2023 June 30, 2022 Federal ​ ​ Current ​ $ 68,038 ​ $ 100,000 Deferred ​ 1,104,844 ​ 408,087 Total ​ ​ 1,172,882 ​ ​ 508,087 ​ ​ ​ ​ ​ State ​ ​ ​ ​ Current ​ ​ — ​ ​ — Deferred ​ 324,860 ​ 143,309 Total ​ ​ 324,860 ​ ​ 143,309 Total income tax expense ​ $ 1,497,742 ​ $ 651,396 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended ​ June 30, 2023 June 30, 2022 Federal ​ ​ Current ​ $ 68,038 ​ $ 100,000 Deferred ​ 542,938 ​ 637,268 Total ​ 610,976 ​ 737,268 ​ ​ ​ ​ ​ ​ ​ State ​ ​ ​ ​ Current ​ ​ — ​ ​ — Deferred ​ 156,994 ​ 207,948 Total ​ 156,994 ​ 207,948 Total income tax expense ​ $ 767,970 ​ $ 945,216 ​ The income tax effects of temporary differences giving rise to the deferred tax assets and liabilities are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ September 30, ​ 2023 2022 Deferred tax liabilities ​ ​ Property and equipment ​ $ 7,940,727 ​ $ 7,686,064 Other ​ 564,978 ​ 7,632 Total deferred tax liabilities ​ $ 8,505,705 ​ $ 7,693,696 ​ ​ ​ ​ ​ Deferred income tax assets ​ ​ ​ ​ Other ​ $ 879,717 ​ $ 404,093 Net operating loss carryforward ​ ​ 2,470,977 ​ ​ 2,834,524 Total deferred tax assets ​ $ 3,350,694 ​ $ 3,238,617 ​ ​ ​ ​ ​ Total net deferred tax liabilities ​ $ 5,155,011 ​ $ 4,455,079 ​ 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. At June 30, 2023, the Company expects all net operating loss carryforwards to be realized in the near future. 12 Table of Contents 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. ​ The Company and all subsidiaries file a consolidated federal and various state income tax returns on a fiscal year basis. With few exceptions, the Company is no longer subject to U.S. federal, state, or local income tax examinations for years ended prior to September 30, 2018. ​ 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 %. Based on a borrowing base calculation, the Company had borrowed all $ 12.5 million available on the line of credit as of September 30, 2022. The interest rate at September 30, 2022, was 5.5 %. 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, which was approximately $ 24.4 million at June 30, 2023. The outstanding balance on the line of credit was $ 16.2 million at June 30, 2023. The line of credit has a variable interest rate equal to the “Wall Street Journal” Prime Rate with a floor of 4.5 %, which was 9.25 % at June 30, 2023. 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, ● 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 was not in compliance with all covenants at June 30, 2023; however, a waiver was received from the Company’s lender. The Company projects to meet all covenant requirements for the next twelve months. Insurance Premiums Financed The Company also finances insurance policy premiums on a short-term basis through a financing company. These insurance policies include workers’ compensation, general liability, automobile, umbrella, and equipment policies. The Company makes a down payment in January and finances the remaining premium amount over eleven monthly payments. At June 30, 2023 and September 30, 2022, the remaining balance of the insurance premiums was $ 1.9 million and $ 580,000 , respectively. 13 Table of Contents 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 issued financial statements of the Company that were included in the Reports. 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. 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. 14 Table of Contents A summary of short-term and long-term debt as of June 30, 2023 and September 30, 2022 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As Restated ​ ​ June 30, ​ September 30, ​ 2023 2022 Line of credit payable to bank, monthly interest at 9.25 %, final payment due by June 28, 2024, guaranteed by certain directors of the Company. ​ $ 16,200,000 ​ $ 12,500,000 ​ ​ ​ ​ ​ Equipment line of credit payable to United Bank, $ 9.3 million available with no borrowings at June 30, 2023. All borrowings between June 1, 2023 and December 1, 2023 have a fixed interest rate of 7.25 % . After December 1, 2023, the line of credit turns into a fifty-four-month term note with a fixed interest rate of 7.25 % , final payment due June 1, 2028. ​ ​ — ​ ​ — ​ ​ ​ ​ ​ ​ ​ 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. ​ 10,159,144 ​ 10,084,531 ​ ​ ​ ​ ​ ​ ​ Term note payable to United Bank, WV Pipeline acquisition, due in monthly installments of $ 64,853 , including interest at 4.25 %, final payment due by March 25, 2026, secured by receivables and equipment, guaranteed by certain directors of the Company. ​ ​ 1,963,324 ​ ​ 2,529,421 ​ ​ ​ ​ ​ Notes payable to finance companies, due in monthly installments totaling $ 48,000 at June 30, 2023 and $ 60,000 at September 30, 2022, including interest ranging from 0.00 % to 5.50 %, final payments due July 2023 through August 2026, secured by equipment. ​ 1,324,858 ​ 889,165 ​ ​ ​ ​ ​ Note payable to finance company for insurance premiums financed, due in monthly installments totaling $ 327,000 in FY 2023 and $ 282,000 in FY 2022, including interest at 3.27 %, final payment due November 2023. ​ 1,889,756 ​ 580,320 ​ ​ ​ ​ ​ 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. ​ 827,019 ​ 867,383 ​ ​ ​ ​ ​ Notes payable to bank, due in monthly installments totaling $ 11,602 , including interest at 4.25 %, final payment due November 2025, secured by building and property, guaranteed by certain directors of the Company. ​ 324,941 ​ 412,917 ​ ​ ​ ​ ​ 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. ​ 2,739,910 ​ — ​ ​ ​ ​ ​ 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 ​ 1,652,500 ​ 2,380,000 ​ ​ ​ ​ Notes payable to bank, interest at 4.25 % of outstanding balance due in monthly installments between January 2021 and January 2022. Note payments due in monthly installments totaling $ 68,150 , including interest at 9.25 %, with final payment due September 2026, secured by equipment, guaranteed by certain directors of the Company. ​ ​ 2,030,636 ​ ​ 2,549,281 ​ ​ ​ ​ ​ ​ ​ Term note payable to United Bank, Tri-State Paving acquisition, due in monthly installments of $ 129,910 , including interest at 4.25 %, final payment due by June 1, 2027, secured by receivables and equipment, guaranteed by certain directors of the Company. ​ ​ 6,024,254 ​ ​ 6,982,097 ​ ​ ​ ​ ​ ​ ​ Notes payable to Corns Enterprises, $ 1,000,000 with fair value of $ 936,000 , due in annual installments totaling $ 250,000 , including interest at 3.50 %, final payment due April 29, 2026, unsecured ​ ​ 702,536 ​ ​ 943,836 ​ ​ ​ ​ ​ ​ ​ Total debt ​ $ 45,838,878 ​ $ 40,718,951 Less current maturities ​ 33,107,695 ​ 27,224,867 Total long term debt ​ $ 12,731,183 ​ $ 13,494,084 ​ ​ ​ 15 Table of Contents 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 no t have a goodwill impairment at June 30, 2023 or September 30, 2022. A table of the Company’s goodwill is below: ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, September 30, ​ ​ 2023 ​ 2022 Beginning balance ​ $ 4,087,554 ​ $ 1,814,317 ​ ​ ​ ​ ​ ​ ​ Acquired ​ — ​ 2,273,237 Ending balance ​ $ 4,087,554 ​ $ 4,087,554 ​ A table of the Company’s intangible assets subject to amortization at June 30, 2023 and September 30, 2022 is below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amortization ​ Amortization ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ Accumulated ​ and Impairment ​ and Impairment ​ ​ ​ ​ Remaining Life ​ ​ ​ Amortization and ​ Amortization and ​ Three Months ​ Nine Months ​ ​ ​ ​ (in months) at ​ ​ ​ Impairment at ​ Impairment at ​ Ended June 30, ​ Ended June 30, ​ Net Book Value Intangible assets: June 30, 2023 ​ Original Cost June 30, 2023 September 30, 2022 2023 ​ 2023 at June 30, 2023 West Virginia Pipeline: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Customer Relationships ​ 90 ​ $ 2,209,724 ​ $ 573,225 ​ $ 386,693 ​ $ 65,643 ​ $ 186,532 ​ $ 1,636,499 Tradename ​ 90 ​ ​ 263,584 ​ ​ 65,909 ​ ​ 46,136 ​ ​ 6,591 ​ ​ 19,773 ​ ​ 197,675 Non-competes — ​ 83,203 ​ 83,203 ​ 72,806 ​ — ​ ​ 10,397 ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revolt Energy: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Employment agreement/non-compete — ​ 100,000 ​ 100,000 ​ 77,779 ​ 13,887 ​ ​ 22,221 ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Tri-State Paving: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Customer Relationships ​ 106 ​ ​ 1,649,159 ​ ​ 190,468 ​ ​ 66,781 ​ ​ 41,229 ​ ​ 123,687 ​ ​ 1,458,691 Tradename ​ 106 ​ ​ 203,213 ​ ​ 23,609 ​ ​ 8,368 ​ ​ 5,080 ​ ​ 15,241 ​ ​ 179,604 Non-competes ​ — ​ ​ 39,960 ​ ​ 39,960 ​ ​ 16,590 ​ ​ 3,390 ​ ​ 23,370 ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total intangible assets ​ ​ ​ $ 4,548,843 ​ $ 1,076,374 ​ $ 675,153 ​ $ 135,820 ​ $ 401,221 ​ $ 3,472,469 ​ The amortization on identifiable intangible assets for the three and nine months ended June 30, 2023 was $ 136,000 and $401,000, respectively. The amortization on identifiable intangible assets for the three and nine months ended June 30, 2022 was $ 112,000 and $308,000, respectively. ​ Amortization expense associated with the identifiable intangible assets is expected to be as follows: ​ ​ ​ ​ ​ ​ Amortization Expense July 2023 to June 2024 $ 430,008 July 2024 to June 2025 ​ 430,008 July 2025 to June 2026 ​ 430,008 July 2026 to June 2027 ​ 430,008 July 2027 to June 2028 ​ 430,008 After ​ 1,322,429 Total ​ $ 3,472,469 ​ ​ 16 Table of Contents 14. LEASE OBLIGATIONS The Company leases office space for SQP for $ 1,500 per month. The lease, 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. Rental terms for the option periods shall be negotiated and agreed mutually between the parties and shall not exceed five percent increases to rent, if any. The Company has two lease agreements for construction equipment with a combined amount of $ 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 related 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. 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 $ 148,000 at June 30, 2023. The second operating lease, for the Chattanooga, Tennessee facility, had a net present value of $ 144,000 at inception, and a carrying value of $ 72,000 at June 30, 2023. 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. 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 has subsequently added twenty-six leased vehicles with a net present value of $ 2.4 million. The right-of-use operating lease has a carrying value of $ 3.2 million at June 30, 2023. The 4.5 % interest rate on the operating lease is based on the Company’s incremental borrowing rate at inception. The Company has a right-of-use operating lease with RICA Developers, LLC acquired on August 12, 2022, as part of the Ryan Environmental acquisition. This lease, for the Bridgeport, West Virginia facility, had a net present value of $ 140,000 at inception and a carrying value of $ 21,000 at June 30, 2023. The 4.5 % interest rate on the operating lease is based on the Company’s incremental borrowing rate at inception. 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 $ 247,000 at June 30, 2023. 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 June 30, 2023 can be found below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Remaining liability ​ ​ ​ ​ ​ Years left June 30, 2023 September 30, 2022 Lease end Fiscal year end Operating lease 1 1.8 ​ $ 148,107 ​ $ 205,267 ​ 4/30/2025 ​ 2025 Operating lease 2 0.9 ​ 72,334 ​ 119,032 ​ 5/31/2024 2024 Operating lease 3 ​ 3.5 ​ ​ 3,156,145 ​ ​ 1,166,498 ​ 8/10/2026 ​ 2027 Operating lease 4 ​ 0.3 ​ ​ 21,214 ​ ​ 113,480 ​ 8/11/2023 ​ 2023 Operating lease 5 ​ 2.6 ​ ​ 247,476 ​ ​ — ​ 3/31/2026 ​ 2026 ​ ​ ​ ​ $ 3,645,276 ​ $ 1,604,277 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average remaining term ​ ​ ​ 3.3 years ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating Lease Maturity Schedule ​ ​ ​ July 2023 to June 2024 $ 1,234,784 July 2024 to June 2025 ​ 1,140,516 July 2025 to June 2026 ​ 1,016,679 July 2026 to June 2027 ​ ​ 545,026 ​ ​ ​ 3,937,005 Less amounts representing interest ​ ( 291,729 ) Present value of operating lease liabilities ​ $ 3,645,276 ​ ​ 17 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Nine Months Ended ​ Three Months Ended ​ Nine Months Ended Operating Lease Expense June 30, 2023 June 30, 2023 June 30, 2022 June 30, 2022 Amortization ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating lease 1 $ 19,267 ​ $ 57,160 ​ $ 12,305 ​ $ 12,305 Operating lease 2 ​ ​ 15,741 ​ ​ 46,698 ​ ​ 5,072 ​ ​ 5,072 Operating lease 3 ​ 160,836 ​ 338,521 ​ — ​ — Operating lease 4 ​ ​ 30,947 ​ ​ 92,266 ​ ​ — ​ ​ — Operating lease 5 ​ ​ 35,880 ​ ​ 42,886 ​ ​ — ​ ​ — Total amortization ​ ​ 262,671 ​ ​ 577,531 ​ ​ 17,377 ​ ​ 17,377 Interest ​ ​ ​ ​ ​ ​ ​ ​ Operating lease 1 ​ ​ 1,733 ​ ​ 5,840 ​ ​ 1,695 ​ ​ 1,695 Operating lease 2 ​ 870 ​ 3,135 ​ 465 ​ 465 Operating lease 3 ​ ​ 27,240 ​ ​ 59,452 ​ ​ — ​ ​ — Operating lease 4 ​ ​ 703 ​ ​ 2,684 ​ ​ — ​ ​ — Operating lease 5 ​ ​ 5,016 ​ ​ 6,776 ​ ​ — ​ ​ — Total interest ​ ​ 35,562 ​ ​ 77,887 ​ ​ 2,160 ​ ​ 2,160 Total amortization and interest ​ $ 298,233 ​ $ 655,418 ​ $ 19,537 ​ $ 19,537 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Nine Months Ended ​ Three Months Ended ​ Nine Months Ended Cash Paid for Operating Leases June 30, 2023 June 30, 2023 June 30, 2022 June 30, 2022 Operating lease 1 $ 21,000 ​ $ 63,000 ​ $ 14,000 ​ $ 14,000 Operating lease 2 ​ ​ 16,611 ​ ​ 49,833 ​ ​ 5,537 ​ ​ 5,537 Operating lease 3 ​ ​ 185,942 ​ ​ 397,973 ​ ​ — ​ ​ — Operating lease 4 ​ ​ 42,180 ​ ​ 94,950 ​ ​ — ​ ​ — Operating lease 5 ​ ​ 32,500 ​ ​ 49,662 ​ ​ — ​ ​ — ​ $ 298,233 ​ $ 655,418 ​ $ 19,537 ​ $ 19,537 ​ 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 $ 2.5 million and $ 1.7 million, respectively, for the three months ended June 30, 2023 and 2022 and $ 6.8 million and $ 5.3 million, respectively, for the nine months ended June 30, 2023 and 2022. 15. SUBSEQUENT EVENTS 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. ​ 18 Table of Contents