What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2025-12-04 compared with 2024-12-05 · 216 added, 250 removed, 1254 unchanged (27% of the section changed)

4 unchanged sentences

for the Years Ended September 30, 2025 and 2024

and Reports of Independent

Registered Public Accounting Firms

and Report of Independent

Registered Public Accounting Firm

RGC RESOURCES, INC.

AND SUBSIDIARIES

Reports of Independent Registered Public Accounting Firms (PCAOB IDs 34 and 423)

Report of Independent Registered Public Accounting Firm (PCAOB ID 34 )

Consolidated Financial Statements for the Years Ended September 30, 2025 and 2024:

5 unchanged sentences

Notes to Consolidated Financial Statements

Deloitte & Touche LLP

Richmond, VA 23219 USA

www.deloitte.com

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

1 unchanged sentence

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of RGC Resources, Inc.

and subsidiaries (the “Company”) as of September 30, 2024, the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows, for the year ended September 30, 2024, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2024, and the results of its operations and its cash flows for the year ended September 30, 2024, in conformity with accounting principles generally accepted in the United States of America.

We have audited the accompanying consolidated balance sheets of RGC Resources, Inc.

and subsidiaries (the “Company”) as of September 30, 2025 and 2024, the related consolidated statements of income, comprehensive income (loss), stockholders’ equity, and cash flows, for each of the two years in the period ended September 30, 2025, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2025 and 2024, and the results of its operations and its cash flows for each of the two years in the period ended September 30, 2025, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

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In the event the provisions of ASC 980 no longer apply to any or all regulatory assets or liabilities, the Company would write off such amounts and include them in the consolidated statements of income and comprehensive income in the period which ASC 980 no longer applied.

We identified the impact of rate regulation as a critical audit matter due to the judgments made by management to support its assertions about impacted account balances and disclosures and the subjectivity involved in assessing the potential impact of future regulatory orders on the financial statements.

We identified the impact of rate regulation as a critical audit matter due to the significant judgments made by management to support its assertions about impacted account balances and disclosures and subjectivity involved in assessing the potential impact of future regulatory orders on the financial statements.

Management judgments include assessing the likelihood of (1) recovery of regulatory assets through future rates, and (2) whether a regulatory liability is due to customers.

11 unchanged sentences

We have served as the Company's auditor since 2024.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders

RGC RESOURCES, INC.

Roanoke, Virginia

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of RGC Resources, Inc.

and Subsidiaries (“the Company”) as of September 30, 2023, and the related consolidated statement of income, comprehensive income, stockholders' equity, and cash flows for the year ended September 30, 2023, and the related notes (collectively referred to as the financial statements).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2023, and the results of its operations and its cash flows for the year ended September 30, 2023, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit.

We are a public accounting firm registered with the Public Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform an audit of its internal control over financial reporting.

As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matters

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

We determined that there were no critical audit matters.

/s/ Brown Edwards & Company, L.L.P.

CERTIFIED PUBLIC ACCOUNTANTS

We have served as the Company's auditor from 2006 to 2023.

Roanoke, Virginia

December 1, 2023

RGC RESOURCES, INC.

AND SUBSIDIARIES

3 unchanged sentences

Cash and cash equivalents

$ 2,320,369 $ 894,185

Accounts receivable, net

4,836,982 4,483,739

2,018,316 1,799,631

Gas in storage

8,097,586 8,491,490

Prepaid income taxes

1,618,560 2,362,069

Regulatory assets

2,582,838 5,103,910

Interest rate swaps

828,573 871,026

1,015,967 1,066,251

Total current assets

23,319,191 25,072,301

UTILITY PROPERTY:

366,843,353 345,864,008

Accumulated depreciation and amortization

( 100,131,084 ) ( 92,462,376 )

In service, net

266,712,269 253,401,632

Construction work in progress

8,201,314 8,639,822

Utility property, net

274,913,583 262,041,454

OTHER NON-CURRENT ASSETS:

Regulatory assets

3,315,082 4,445,044

Investment in unconsolidated affiliates

20,723,697 21,057,222

Benefit plan assets

5,935,885 5,416,536

Deferred income taxes

617,390 771,746

Interest rate swaps

421,511 1,191,526

593,227 703,394

Total other non-current assets

31,606,792 33,585,468

$ 329,839,566 $ 320,699,223

RGC RESOURCES, INC.

7 unchanged sentences

Line-of-credit

11,166,181 4,353,572

Dividends payable

10 unchanged sentences

1,638,911 834,278

Interest rate swaps

25,600 25,729

4 unchanged sentences

134,258,197 136,955,000

Line-of-credit

Unamortized debt issuance costs

13 unchanged sentences

17,371,430 19,326,567

Interest rate swaps

319,573 308,439

50 unchanged sentences

Defined benefit plans

OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX

OTHER COMPREHENSIVE LOSS, NET OF TAX

COMPREHENSIVE INCOME

10 unchanged sentences

— — 11,760,896 — 11,760,896

Other comprehensive income

— — — 288,925 288,925

Exercise of stock options ( 12,500 shares)

Other comprehensive loss

— — — ( 926,718 ) ( 926,718 )

12 unchanged sentences

— — — ( 1,064,839 ) ( 1,064,839 )

Stock-based compensation

— 51,500 — — 51,500

Cash dividends declared ($ 0.83 per share)

17 unchanged sentences

Equity in earnings of unconsolidated affiliate

Distributions from unconsolidated affiliate

Donated property

Allowance for funds used during construction

Deferred income taxes

19 unchanged sentences

Cash dividends paid

Net cash provided by financing activities

NET DECREASE IN CASH AND CASH EQUIVALENTS

Net cash provided by (used in) financing activities

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

BEGINNING CASH AND CASH EQUIVALENTS

2 unchanged sentences

Cash paid during the year for:

Significant noncash investing activities:

Significant noncash activities:

Accrued capital expenditures

Proceeds and retirement of borrowings with the same financial institution

See notes to consolidated financial statements.

23 unchanged sentences

$ 504,003 $ 919,375

Under-recovery of gas costs

Under-recovery of natural gas costs

750,295 2,690,247

2 unchanged sentences

Under-recovery of SAVE Plan revenues

265,317 107,678

Accrued pension

19 unchanged sentences

Regulatory liabilities:

Over-recovery of SAVE Plan revenues

$ — $ 146,861

37,500 652,018

Deferred income taxes

39 unchanged sentences

The most recent depreciation study was completed and approved by the SCC staff in fiscal 2024.

The composite weighted-average depreciation rate was 3.26 % and 3.30 % for the years ended September 30, 2024 and 2023 , respectively.

The composite weighted-average depreciation rate was 3.26 % for both years ended September 30, 2025 and 2024 .

The composite rates are composed of two components, one based on average service life and one based on cost of retirement.

4 unchanged sentences

These reviews have not identified any impairments which would have a material effect on the results of operations or financial condition.

In fiscal 2020, Roanoke Gas implemented the application of AFUDC related to infrastructure investments associated with two gate stations that interconnect with the MVP.

Both gate stations were placed in service in fiscal 2024 upon MVP becoming operational.

In fiscal 2022, the SCC approved the application of AFUDC on the RNG project during its construction phase.

This treatment allowed capitalizing both the equity and debt financing costs during the construction phases.

For the year ended September 30, 2023, the Company capitalized $ 76,785 of debt financing costs and $ 285,900 of equity financing costs related to the RNG project thereby affecting interest expense and other income, net on the consolidated statements of income.

The RNG project was completed and placed in service in March 2023, thus the Company did not capitalize any financing costs related to these projects for the year ended September 30, 2024.

See Note 4 for further information.

From time to time, the Company recognizes AFUDC related to large infrastructure investments.

This treatment allows capitalizing both the equity and debt financing costs during the construction phases.

The Company did not capitalize any financing costs related to projects for the years ended September 30, 2025 and 2024.

Asset Retirement Obligations —ASC 410, Asset Retirement and Environmental Obligations , requires entities to record the fair value of a liability for an ARO when there exists a legal obligation for the retirement of the asset.

43 unchanged sentences

The Company made an accounting policy election that payments under agreements with an initial term of 12 months or less will not be included on the consolidated balance sheet but will be recognized in the consolidated statements of operations on a straight-line basis over the term of the agreement.

Financing Receivables —Financing receivables represent a contractual right to receive money either on demand, or on fixed or determinable dates, and are recognized as assets on the entity’s balance sheet.

Trade receivables, resulting from the sale of natural gas and other services to customers, are the Company's primary type of financing receivables.

These receivables are short-term in nature with a provision for credit losses included in the consolidated financial statements.

Inventories —Natural gas in storage and materials and supplies inventories are recorded at average cost.

12 unchanged sentences

The unamortized balances are offset against the carrying value of long-term debt.

Over/Under-Recovery of Natural Gas Costs —Pursuant to the provisions of the Company’s PGA clause, the SCC provides the Company with a method of passing along to its customers increases or decreases in natural gas costs incurred by its regulated operations, including gains and losses on natural gas derivative hedging instruments, if utilized.

Over/Under-Recovery of Natural Gas Costs —From time to time, the Company enters into forward purchases of natural gas at fixed prices through its asset manager.

As management believes it is probable these purchases will physically settle, the Company has applied the normal purchase and normal sale exception to derivative accounting.

Pursuant to the provisions of the Company’s PGA clause, the SCC provides the Company with a method of passing along to its customers increases or decreases in natural gas costs incurred by its regulated operations, including gains and losses on natural gas derivative hedging instruments, if utilized.

On at least a quarterly basis, the Company files a PGA rate adjustment request with the SCC to increase or decrease the gas cost component of its rates, based on projected price and activity.

48 unchanged sentences

At September 30, 2025 and 2024 , the Company had no outstanding derivative instruments for the purchase of natural gas.

The Company has four interest rate swaps associated with certain of its variable rate debt.

The Company has six interest rate swaps associated with certain of its variable rate debt.

Roanoke Gas has two variable rate term notes in the amounts of $ 15 million and $ 10 million, with corresponding swap agreements to convert the variable interest rates into fixed rates of 2.00 % and 2.49 %, respectively.

Midstream has two swap agreements corresponding to the $ 14 million and $ 8 million variable rate term notes.

The swap agreements convert these two notes into fixed rate instruments with effective interest rates of 3.24 % and 2.443 %, respectively.

Midstream has four swap agreements in the amounts of $ 14 million, $ 4 million, $ 20.6 million, and $ 15 million, corresponding to the $ 53.6 million variable rate term note.

The swap agreements convert the note into a fixed rate instrument with effective interest rates of 3.24 %, 2.443 %, 5.061 %, and 5.061 %, respectively.

The swaps qualify as cash flow hedges with changes in fair value reported in other comprehensive income.

4 unchanged sentences

Interest rate swaps:

Unrealized losses

Unrealized gains

$ 207,015 $ ( 53,287 ) $ 153,728

4 unchanged sentences

Defined benefit plans:

Net gains arising during period

Net losses arising during period

( 282,941 ) 72,828 ( 210,113 )

7 unchanged sentences

Interest rate swaps:

Unrealized gains

Unrealized losses

$ ( 554,778 ) $ 142,800 $ ( 411,978 )

10 unchanged sentences

1,306,967 ( 336,412 ) 970,555

Other comprehensive income

Other comprehensive loss

$ ( 1,247,937 ) $ 321,219 $ ( 926,718 )

10 unchanged sentences

1,531,649 ( 205,078 ) 1,326,571

Other comprehensive income (loss)

Other comprehensive loss

( 867,081 ) ( 197,758 ) ( 1,064,839 )

1 unchanged sentence

$ 664,568 $ ( 402,836 ) $ 261,732

Recently Adopted Accounting Standards

In November 2023, the FASB issued ASU 2023 - 07, Segment Reporting (Topic 280 ) - Improvements to Reportable Segment Disclosures, which enhances and expands the current annual and interim requirements on segment information disclosures.

The new guidance requires disclosure of significant segment expenses that are regularly provided to the chief operating decision maker (CODM) and included within each reported measure of segment profit or loss, an amount and description of the composition of other segment items to reconcile to segment profit or loss, and the title and position of the entity's CODM.

The provisions within the guidance are to be applied retrospectively for all comparative periods and are effective for the Company for the fiscal year that began October 1, 2024 and interim periods within fiscal year beginning October 1, 2025.

The Company adopted ASU 2023 - 07 effective for the year ended September 30, 2025, with retrospective application of the additional segment information for the year ended September 30, 2024.

Additional information regarding the Company's reportable segments is included in Note 3 to the consolidated financial statements, with no impact on results of operations, cash flows, or financial condition of the Company.

Recently Issued Accounting Standards

In March 2020, the FASB issued ASU 2020 - 04, Reference Rate Reform (Topic 848 ) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting.

In combination with ASU 2021 - 01 and ASU 2022 - 06, the ASU provides temporary optional guidance to ease the potential burden in accounting for and recognizing the effects of reference rate change on financial reporting.

The new guidance applies specifically to contracts and hedging relationships that reference LIBOR, or any other referenced rate that is expected to be discontinued due to reference rate reform.

The new guidance is effective for the Company through December 31, 2024.

The Intercontinental Exchange Benchmark Administration, the administrator for LIBOR and other inter-bank offered rates, announced that the LIBOR rates for one -day, one -month, six -month and one -year would cease publication in June 2023 and that no new financial contracts may use LIBOR after December 31, 2021.

Subsequent to June 30, 2023, the one -day, one -month, six -month, and one -year LIBOR settings will continue to be published under an unrepresentative synthetic methodology until the end of September 2024 in order to bridge the transition to other reference rates.

The Company has transitioned all LIBOR-based variable rate note to a new reference rate as of September 30, 2024.

Each of the revised notes has a corresponding swap that was also transitioned to align with the related notes.

See Note 7 and 8 for more information.

In November 2023, the FASB issued ASU 2023 - 07, Segment Reporting (Topic 280 ) - Improvements to Reportable Segment Disclosures .

The new guidance is designed to provide users of financial statements with enhanced disclosures regarding the information provided to the chief operating decision maker (CODM) and how the CODM uses the information in assessing the performance of each segment.

The new guidance is effective for the Company for fiscal year beginning October 1, 2024 and interim periods within fiscal year beginning October 1, 2025.

The Company is currently evaluating the new standard and determining the additional disclosure requirements.

In December 2023, the FASB issued ASU 2023 - 09, Income Taxes (Topic 740 ):

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The new guidance is effective for the Company for annual periods beginning October 1, 2025.

In March 2024, the SEC issued its final rule that requires registrants to provide climate disclosures in their annual reports and registration statements.

The new guidance requires that registrants provide information about specified financial statement effects of severe weather events and other natural conditions, certain carbon offsets and renewable energy certificates, and material impacts on financial estimates and assumptions in the footnotes to financial statements.

The rule also requires additional disclosures outside of the financial statements including governance and oversight of material climate-related risks, the material impact of climate risks on the company's strategy, business model and outlook, risk management processes for material climate-related risks and material climate targets and goals.

The Company is currently evaluating the new rule and determining the impact of the additional disclosure requirements, as well as the data needed and the source of that data to comply with required disclosures.

The new rule is currently effective for fiscal years beginning in 2027 for smaller reporting companies.

The final rule was scheduled to become effective May 28, 2024; however, the SEC has voluntarily stayed the rule's effective date pending judicial review.

Depending on when the legal challenges are resolved, the mandatory compliance date may be retained or delayed.

In November 2024, the SEC issued ASU 2024 - 03, Income Statement - Reporting Comprehensive Income (Topic 220 ):

3 unchanged sentences

Such disclosures must be made on an annual and interim basis and integrated with existing disclosure requirements in a tabular format in the footnotes to the financial statements.

The new guidance is effective for the Company for fiscal year beginning October 1, 2027 and interim periods within fiscal year beginning October 1, 2028.

Further, in January 2025, the FASB issued ASU 2025 - 01, Income Statement - Reporting Comprehensive Income (Topic 220 ):

Expense Disaggregation Disclosures:

Clarifying the Effective Date, which clarified the effective date of ASU 2024 - 03.

The new guidance is effective for the Company for annual periods beginning October 1, 2027 and interim periods within fiscal year beginning October 1, 2028.

The Company is currently assessing the impacts of the new guidance on its financial statement disclosures.

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Operating segments are defined as components of an enterprise for which separate financial information is available and is evaluated regularly by the Company's executive management in deciding how to allocate resources and assess performance.

The Company uses operating income and equity in earnings to assess segment performance.

Intersegment transactions are recorded at cost.

The reportable segments disclosed herein are defined as follows:

The Company has two reportable segments based on the nature of their activities and are defined as follows:

Gas Utility - The natural gas distribution segment of the Company generates revenue from its tariff rates and other regulatory mechanisms through which it provides for the sale and distribution of natural gas to its residential, commercial and industrial customers.

Investment in Affiliates - The investment in affiliates segment reflects the income generated through the activities of the Company's investment in the LLC.

Information related to the segments of the Company are provided below:

In order to reconcile to net income as disclosed in the consolidated statements of income, "Corporate and other" rows are included below associated with certain unallocated expenses that represent corporate reporting adjustments.

The accounting policies of the reported segments are the same as those described within Note 1.

Information is routinely presented to the CODM, the Company's President and Chief Executive Officer, in a manner that makes significant elements of profitability and cash flows of each segment easily discernible.

The CODM evaluates the performance of the reportable segments based on the Gas Utility's operating income (loss) and the Investment in Affiliates' equity in earnings, as well as cash flows, and uses these measures to evaluate segment performance and allocate resources, primarily during the annual budget and forecasting processes.

The CODM regularly reviews variances between budgeted and actual results in assessing earnings, operational performance, and allocating resources including personnel and capital allocations that affect each reportable segment.

When the CODM reviews balance sheet information, it is at a consolidated level.

Intersegment transactions are recorded at cost.

Information related to the reportable segments of the Company are provided below:

Investment in Affiliates

6 unchanged sentences

95,231,943 — 95,334,212

Depreciation and amortization

Cost of gas - utility

42,550,954 — 42,550,954

Operating income (loss)

Operations and maintenance

19,729,415 181,995 19,911,410

Taxes other than income taxes

2,931,367 2,420 2,933,787

Depreciation and amortization

11,470,641 — 11,470,641

Corporate and other

27 unchanged sentences

84,533,101 — 84,641,232

Depreciation and amortization

Cost of gas - utility

35,967,987 — $ 35,967,987

Operating income (loss)

Operations and maintenance

18,215,354 133,486 $ 18,348,840

Taxes other than income taxes

2,701,186 3,354 $ 2,704,540

Depreciation and amortization

10,518,094 — 10,518,094

Corporate and other

5 unchanged sentences

3,700,674 2,804,211 6,504,885

Income (loss) before income taxes

Income before income taxes

14,459,009 910,490 15,369,499

Corporate and other

Total income (loss) before income taxes

Total income before income taxes

$ 14,459,009 $ 910,490 $ 15,457,507

15 unchanged sentences

Under the terms of the settlement, the Company agreed to an annual incremental revenue requirement increase of $ 4.08 million based on a return on equity of 9.90 %.

The Company expects a final decision from the Commission by the second quarter of fiscal 2025.

The SCC requires regulated utilities within the state to perform a depreciation study every five years and to submit the study for SCC approval.

The Company's prior depreciation rates were based on the last depreciation study approved by the SCC in 2019.

As part of the general rate application filed in February 2024, the Company submitted its requisite depreciation study and proposed new depreciation rates.

In July 2024, the Company received administrative approval from the SCC staff that authorized the new depreciation rates and instructed the Company to implement the new rates retroactive to October 1, 2023.

As a result, in the fourth quarter the Company recorded an approximate $ 226,000 reduction in annual depreciation expense for the fiscal year ended September 30, 2024.

On December 2, 2022, Roanoke Gas filed an expedited rate application with the SCC seeking an $ 8.55 million annual increase in its non-gas base rates, of which $ 4.05 million was being recovered through the SAVE Rider.

The proposed interim rates went into effect January 1, 2023, subject to refund.

In the fourth quarter of fiscal 2023, the Company reached a settlement with the SCC staff on all outstanding issues in the case.

Under the terms of the settlement, the Company agreed to an annual incremental revenue requirement of $ 7.45 million.

The Company began billing the approved rates effective October 1, 2023.

The SCC issued its Final Order in the matter on December 19, 2023 in which it approved the settlement agreement in its entirety.

Refunds, which had previously been accrued, were made to customers in February 2024.

On August 31, 2023, the SCC approved the Company's new SAVE Plan and Rider with rates effective October 1, 2023.

Under this plan, Roanoke Gas recovers costs associated with an estimated $ 8.5 million in SAVE eligible investment in fiscal 2024 and an estimated cumulative investment of $ 49.5 million over the proposed five -year plan period ending September 30, 2028.

The plan was approved with a revenue requirement of approximately $ 366,000 for fiscal 2024.

On June 28, 2024, Roanoke Gas filed for approval of an updated annual SAVE Rider rate to become effective October 1, 2024.

The proposed SAVE rate is based on an estimated $ 9.13 million of SAVE eligible investment during fiscal 2025 and a revenue requirement of $ 1.53 million that reflects the cost of capital settled in the 2024 rate case.

The Commission approved the Company’s updated SAVE Rider on September 24, 2024, which contained a lower revenue requirement of $ 1.39 million, largely attributable to SCC Staff’s reliance on the overall cost of capital approved in the 2022 rate case.

The difference in the revenue requirements will be trued-up in subsequent SAVE Rider updates to the overall cost of capital settled in the 2024 rate case.

By Order dated September 1, 2023, the SCC approved the Company’s RNG Rider effective for the period October 1, 2023 through September 30, 2024.

In its Order, the SCC directed the Company to file an application to update the RNG Rider by May 30, 2024.

In compliance with the SCC’s directive, on May 30, 2024, Roanoke Gas filed for an update to become effective October 1, 2024.

The revenue requirement associated with the proposed RNG Rider is $ 1.56 million, offset by the sale of environmental credits in the amount of $ 1.11 million, as well as credits for the over-recovery of costs during the prior year of approximately $ 35,000 , resulting in a net revenue requirement of approximately $ 415,000 reflecting the overall cost of capital proposed in the 2024 rate case.

The Commission approved the Company’s updated RNG Rider on September 4, 2024, which contained a lower net revenue requirement of approximately $ 356,000 , largely attributable to SCC Staff’s reliance on the overall cost of capital approved in the 2022 rate case.

The difference in the revenue requirements will be trued-up in subsequent RNG Rider updates at the overall cost of capital approved in the 2024 rate case.

On April 10, 2025, the SCC issued a final order approving the settlement agreement in its entirety.

Refunds for the difference in amounts that were billed based on interim and settlement rates, which had previously been accrued, were made to customers in May 2025.

On December 2, 2025, the Company filed a non-gas base rate application with the SCC to increase revenues by $ 4.3 million annually , with interim rates proposed to customers in the second quarter of fiscal 2026.

On May 30, 2025, Roanoke Gas filed for approval of an updated RNG Rider to become effective October 1, 2025.

The RNG Rider recovers costs associated with the RNG facility to produce renewable natural gas that was approved by the SCC in 2022.

The revenue requirement associated with the RNG Rider is $ 1.66 million.

The impact to customers is affected by the under-recovered costs during the prior fiscal year, the sale of environmental credits and the over crediting of customers for RIN sales, resulting in a net impact to customers of approximately $ 699,000 .

The Company received a final order from the SCC approving the Company's updated RNG Rider on September 26, 2025.

On June 30, 2025, Roanoke Gas filed for approval of an updated annual SAVE Rider to become effective October 1, 2025.

The proposed SAVE Rider revenue requirement of $ 2.64 million is designed to recover the costs associated with an estimated $ 10.33 million of SAVE eligible investment during fiscal 2026.

The revenue requirement also included an adjustment for under-recovered costs incurred during the prior year.

The Commission approved the Company’s updated SAVE Rider on September 26, 2025, which contained a slightly lower revenue requirement of $ 2.61 million.

On June 2, 2022, Roanoke Gas filed an application with the SCC to acquire certain natural gas distribution assets from a local housing authority.

3 unchanged sentences

The SCC approved the application in July 2022.

The housing authority completed the transfer of two apartment complexes to Roanoke Gas in fiscal 2022, one complex in fiscal 2023 and one complex in fiscal 2024.

The housing authority has notified Roanoke Gas that it intends to complete the remaining complex in fiscal 2025.

Roanoke Gas recorded these assets and recognized pre-tax income of approximately $ 219,000 , $ 311,000 and $ 782,000 in fiscal 2022, 2023 and 2024, respectively, by analogy to ASC 958.

The housing authority completed the transfer of two apartment complexes to Roanoke Gas in fiscal 2022, one complex in fiscal 2023, one complex in fiscal 2024 and the last complex in fiscal 2025.

For fiscal years 2024 and 2025, Roanoke Gas recognized pre-tax income of approximately $ 782,000 and $ 762,000 , respectively, for the assets transferred by analogy to ASC 958.

The assets are included under utility property, in service on the consolidated balance sheets and the income is recorded in other income, net on the consolidated statements of income.

There are no ongoing obligations between the parties for the properties already transferred.

There are no ongoing obligations between the parties for the properties transferred.

Additionally, there are no remaining facilities to be transferred in the future under the plan.

OTHER INVESTMENTS

Midstream owns a less than 1 % equity investment in the LLC that owns and operates the MVP.

The Company accounts for its interest in the LLC under the equity method of accounting given the LLC maintains specific ownership accounts for each investor, and also considering the Company's rights under the LLC management agreement and the Company's involvement as a customer of the MVP.

Midstream has invested less than 1 % in the equity interests of the LLC that owns and operates the MVP.

The Company has been using the equity method since the inception of its investment in fiscal 2016.

Following receipt of authorization from the FERC, the MVP entered commercial operation on June 14, 2024 and became available for interruptible or short-term firm transportation service.

On July 1, 2024, the MVP commenced long-term firm capacity obligations.

Midstream is also a less than 1 % investor, accounted for under the cost method, in Southgate, which is in the design and permitting phase.

Completion of the Southgate pipeline is targeted for June 2028.

While under construction, AFUDC provided the majority of the income recognized by Midstream.

The amount of AFUDC recognized during the current and prior year is included in the equity in earnings of unconsolidated affiliate in the tables below.

AFUDC ceased in June 2024 when the pipeline went into commercial operation.

The Company participates in the earnings of the LLC proportionate to its level of investment.

With the MVP now in operation, the Company recognizes its share of earnings from the LLC, favorably adjusted for a basis difference between the Company's proportional share of assets and its carrying value that arose when the Company recorded an other-than-temporary impairment of its investment in 2022.

This basis difference amortization is a favorable non-cash adjustment to income over the operational life of the MVP, which is 40 years.

The MVP entered commercial operation on June 14, 2024 and commenced long-term firm capacity obligations on July 1, 2024.

AFUDC attributable to MVP was recognized during the construction phase, and is included in the equity in earnings of unconsolidated affiliate in the tables below.

AFUDC on the main pipeline ceased in June 2024 when MVP went into commercial operations;

large expansions and improvement projects will give rise to AFUDC in the future.

The Company participates in the earnings of the LLC proportionate to its level of investment, favorably adjusted for a basis difference between the Company's capital account and its carrying value that arose when the Company recorded an other-than-temporary impairment of its investment in 2022.

This basis difference amortization is a favorable non-cash adjustment to income over the book life of the MVP, which is 40 years.

The Company's share of earnings from the LLC and the basis difference amortization are presented under equity in earnings of unconsolidated affiliate on the consolidated statements of income.

The Company participates in quarterly cash distributions by the LLC, the first of which was in October 2024.

The Company's share was approximately $ 800,000 .

The Company received four quarterly cash distributions totaling approximately $ 3.6 million from the LLC during fiscal 2025 and expects future quarterly distributions to be of a similar magnitude to those received to date.

Midstream assesses the value of its investment in the LLC on at least a quarterly basis, and no impairment indicators were identified in fiscal 2025 or 2024.

10 unchanged sentences

$ 76,385 $ 18,258

Change in accrued capital calls

— ( 804,506 )

Equity in earnings of unconsolidated affiliate

3,234,632 3,851,871

Distributions from unconsolidated affiliate

( 3,644,542 ) —

Change in investment in unconsolidated affiliates

15 unchanged sentences

Construction work in progress

1,568,267 7,499,128,254

Property, plant and equipment, net

7 unchanged sentences

1,084,072 68,965

9,552,769,303 9,633,368,319

Total liabilities and equity

1 unchanged sentence

LINE-OF-CREDIT

On March 24, 2023, Roanoke Gas entered into an unsecured Revolving Note in the principal amount of $ 25 million.

On March 31, 2024, the Revolving Note was amended to extend the maturity date to March 31, 2025.

Other key terms and requirements of the Revolving Note were retained.

The Revolving Note's variable interest rate is based upon Term SOFR plus 110 basis points and provides multiple tier borrowing limits to accommodate seasonal borrowing demands.

The Company's total borrowing limits during the term of the Revolving Note range from $ 15 million to $ 25 million.

As of September 30, 2024, the Company had an outstanding balance of $ 11,166,181 under the Revolving Note.

The Company had been operating with a line-of-credit in the principal amount of $ 25 million that it renewed annually each March.

On March 31, 2025, Roanoke Gas amended its line-of-credit to increase the principal amount to $ 30 million and extend the maturity date to March 31, 2027.

The line-of-credit's variable interest rate is based upon Term SOFR plus 1.25 % and provides for multiple-tier borrowing limits to accommodate seasonal borrowing demands.

The Company's total borrowing limits during the term of the line-of-credit range from $ 20 million to $ 30 million.

As of September 30, 2025, the Company had an outstanding balance of $ 11,916,760 under the line-of-credit.

The Company's total available borrowing limits for the remaining term are as follows:

Line-of-Credit

September 30, 2024

October 1, 2024

March 1, 2025

As of September 30, 2025

October 1, 2025 through March 31, 2026

April 1, 2026 through September 30, 2026

October 1, 2026 through March 31, 2027

A summary of the line-of-credit follows:

Available line-of-credit at year-end

Borrowing limit at year-end

$ 20,000,000 $ 20,000,000

Outstanding balance at year-end

11,916,760 11,166,181

Average rate of interest during year on outstanding balances

5.56 % 6.39 %

Interest rate at year-end

5.42 % 6.29 %

Interest rate on unused line-of-credit

0.25 % 0.15 %

LONG-TERM DEBT

14 unchanged sentences

10,000,000 22,612 10,000,000 27,044

Unsecured term note payable at Term SOFR plus 1.75 % ( 1.55 % beginning November 1, 2024), due December 31, 2025

Unsecured term note payable at Term SOFR plus 1.55 %, due September 5, 2032 ($14M swap rate at 3.24 %, $4M swap rate at 2.443 %, and $20.6M swap rate at 5.061 %)

38,600,000 171,362 — —

Unsecured term note payable at Daily Simple SOFR plus 1.26448 %, due June 12, 2026 (swap rate at 3.24 %)

Unsecured term note payable at Term SOFR plus 1.55 %, due September 5, 2032 (swap rate at 5.061 %)

15,000,000 66,592 — —

Unsecured term note payable at Daily Simple SOFR plus 1.26448 %, due January 1, 2028 with quarterly principal installments of $ 400,000 that began April 1, 2023, were suspended April 1, 2024, and will resume April 1, 2025 (swap rate at 2.443 % on designated principal)

Revolving credit facility at Term SOFR plus 1.75 %, due September 5, 2030 ("Southgate")

4,215 5,553 — —

Revolving credit facility at Daily Simple SOFR plus 2.215 %, due May 2, 2026

Revolving credit facility at Term SOFR plus 1.75 %, due September 5, 2030 ("Boost")

Unsecured term note payable at Term SOFR plus 1.55 %, retired September 5, 2025

— — 24,855,000 32,299

Unsecured term note payable at 30-day LIBOR plus 1.20 %, matured June 1, 2024 with monthly principal installments of $ 41,667 that began July 1, 2022 (swap rate at 3.14 %)

Unsecured term note payable at Daily Simple SOFR plus 1.26448 % (swap rate at 3.24 %), retired September 5, 2025

— — 14,000,000 4,213

Unsecured term note payable at Daily Simple SOFR plus 1.26448 % (swap rate at 2.443 % on designated principal), retired September 5, 2025

— — 6,400,000 21,406

Revolving credit facility at Daily Simple SOFR plus 2.215 %, retired September 5, 2025

— — 9,000,000 47,285

Total long-term debt

4 unchanged sentences

$ 134,258,197 $ 405,794 $ 136,955,000 $ 282,092

On September 5, 2025, Midstream established new Term Notes with two banks in the amounts of $ 38.6 million and $ 15 million, which refinanced and replaced all of Midstream's outstanding debt.

The interest rate on the new Term Notes is one month Term SOFR plus 1.55 % with interest payable monthly.

The Term Notes also included a 0.3 % origination fee and 0.1 % annual fee.

Quarterly principal payments will be due each October, January, April and July, and repayment terms are based on a schedule aligned with the terms of the MVP shipper agreements, which will expire June 2044.

The Term Notes mature on September 5, 2032.

Also, on September 5, 2025, Midstream executed two interest rate swap agreements totaling $ 35.6 million, which corresponds to the term and draw provisions of the Term Note agreement and effectively converts that portion of the variable rate note to a fixed rate instrument with an effective annual interest rate of 5.061 %.

The two existing interest rate swaps will remain in place, have been redesignated, and when combined with the new interest rate swap agreements, hedged a notional value of $ 53.6 million.

Additionally, on September 5, 2025, Midstream entered into a Loan Agreement for the MVP Southgate extension and MVP expansion that can be drawn to principal amounts of $ 1.85 million and $ 3.65 million, respectively, (the "Notes").

The Notes bear an interest rate of Term SOFR plus 1.75 % subject to adjustment to Term SOFR plus 1.55 % upon meeting certain milestones.

The Notes mature on September 5, 2030, at which time the outstanding principal balance on each note is due.

The Loan Agreement included a 0.25 % origination fee.

On March 6, 2024, Midstream entered into the Sixth Amendment to Credit Agreement and related Promissory Notes on the non-revolving credit facility.

7 unchanged sentences

On May 29, 2024, Midstream paid in full the remaining $ 9 million term note payable that was set to mature June 1, 2024 with proceeds from the new line of credit.

On June 28, 2023, Midstream amended and restated its $ 14 million and $ 8 million Term Notes initially entered into on June 12, 2019 and November 1, 2021, respectively.

The amendments revised each of the original Term Note's interest rate from LIBOR plus 115 basis points to Daily Simple SOFR plus 126.448 basis points, effective July 1, 2023.

On March 6, 2024, Midstream further amended and restated its $ 8 million Term Note.

The amendment suspended quarterly principal payments beginning April 1, 2024 through January 1, 2025.

Principal payments will commence again on April 1, 2025.

All other terms and requirements of the Term Notes were retained.

In conjunction with the original amendment of the Term Notes in June 2023, Midstream also amended the corresponding interest rate swaps associated with the Term Notes.

The amendments provided for the floating rates on the interest rate swaps to continue to match the rate of the associated notes as well as retain the overall fixed interest rates of 3.24 % and 2.443 %, respectively.

The interest rate swap related to the $ 8 million Term Note was not amended on March 6, 2024.

On March 24, 2023, Roanoke Gas amended and restated the $ 10 million Term Note originally entered into on September 24, 2021.

The amendment revised the original Term Note's interest rate from LIBOR plus 100 basis points to Term SOFR plus 100 basis points.

All other terms and requirements of the original Term Note were retained.

The effective date of the Amended Term Note was April 1, 2023.

In addition, on April 3, 2023, the interest rate swap was amended to align with the Amended Term Note and retained the fixed interest rate of 2.49 %.

In connection with the Revolving Note and Amended Term Note, Roanoke Gas also amended and restated the Loan Agreement dated September 24, 2021.

The amendment provides for borrowing limits on the Revolving Note and amends certain financial conditions required of Roanoke Gas and Resources.

All other terms and requirements of the original Loan Agreement were retained.

See Note 1 for additional information regarding the interest rate swap.

Debt issuance costs are amortized over the life of the related debt.

2 unchanged sentences

All of the debt agreements provide for Priority Indebtedness (defined in the debt agreements) to not exceed 15 % of consolidated total assets.

The $ 15 million and $ 10 million notes, as well as the line-of-credit, have an interest coverage ratio requirement of not less than 1.5 to 1, which excludes the effect of a non-cash impairment on the LLC investments up to the total investment as of December 31, 2021, as revised by the Seventh Amendment to the Credit Agreement.

The $ 9 million revolving line of credit facility also has an interest coverage ratio of not less than 1.5 to 1.

The $ 15 million, $ 10 million, $ 53.6 million, $ 1.85 million and $ 3.65 million notes have an interest coverage ratio requirement of not less than 1.5 to 1, which excludes the effect of a non-cash impairment on the LLC investments up to the total investment as of December 31, 2021.

The Company was in compliance with all debt covenants as of September 30, 2025 and 2024 .

2 unchanged sentences

$ 137,104,215

Roanoke Gas has a term note in the principal amount of $ 15 million maturing in August 2026.

The Company has a positive record of refinancing term notes, as well as has access to sufficient financing resources, including availability under the line-of-credit, to meet the payment requirements associated with this term note.

Thus the Company has presented this balance within notes payable of long-term debt on the consolidated balance sheets as of September 30, 2025.

The following table summarizes the Company’s financial assets and liabilities that are measured at fair value on a recurring basis and the fair value measurements by level within the fair value hierarchy as defined in Note 1 as of September 30, 2025 and 2024 , respectively.

2 unchanged sentences

Quoted Prices in Active Markets Significant Other Observable Inputs Significant Unobservable Inputs

Interest rate swaps

Interest rate swaps - current

$ 828,573 $ — $ 828,573 $ —

Interest rate swaps - noncurrent

$ 421,511 — $ 421,511

$ 1,250,084 $ — $ 1,250,084 $ —

Natural gas purchases

$ 135,863 $ — $ 135,863 $ —

Interest rate swaps - current

$ 57,144 $ — $ 57,144 $ —

Interest rate swaps - noncurrent

$ 298,016 $ — $ 298,016 $ —

$ 491,023 $ — $ 491,023 $ —

Fair Value Measurements - September 30, 2024

2 unchanged sentences

Significant Unobservable Inputs

Interest rate swaps

Interest rate swaps - current

$ 871,026 $ — $ 871,026 $ —

Interest rate swaps - noncurrent

$ 1,191,526 $ — $ 1,191,526 $ —

$ 2,062,552 $ — $ 2,062,552 $ —

Natural gas purchases

1 unchanged sentence

$ 761,020 $ — $ 761,020 $ —

The fair value of the interest rate swaps are determined by using the counterparty's proprietary models that include observable quoted market interest rates and interest rate futures as well as certain assumptions regarding past, present and future market conditions.

The fair value of the interest rate swaps is determined by using the counterparty's proprietary models that include observable quoted market interest rates and interest rate futures as well as certain assumptions regarding past, present and future market conditions.

See Note 5 for discussion on the fair value assumptions of the Company's investment in the LLC.

42 unchanged sentences

190,803 ( 121,781 )

Amortization of R&D tax credits:

— ( 129,600 )

Total amortization of R&D tax credits

— ( 131,620 )

Total income tax expense

12 unchanged sentences

( 366,844 ) ( 315,708 )

Amortization of R&D tax credits

— ( 131,620 )

Net amortization of RNG tax credits

6 unchanged sentences

Code § 41 - Credit for increasing research activities .

Upon completion of the 2022 study, the Company filed for the R&D tax credit on its fiscal 2021 federal income tax return.

The total credits claimed on the fiscal 2021 income tax return amounted to $ 659,920 .

The Company deferred the tax credits as a regulatory liability because they related to utility plant.

These credits are being amortized over the 20 -year tax-life of the related utility plant.

The Company recognized $ 129,600 of amortization as reduction of income tax expense on the consolidated statement of income in fiscal 2023 related to the federal R&D tax credits.

No amortization was recognized in fiscal 2024 as discussed below.

The Company has not yet completed a study of R&D activities for fiscal 2023 or 2024 given the IRS audits in process, as discussed further below.

Additionally, during fiscal 2023, the Company received refunds for the 2020 and 2021 tax years, neither of which are subject to the IRS audits.

During fiscal 2022, the Company also applied for a Virginia State tax credit related to the R&D study for its fiscal 2021 tax year.

The total credits claimed on the fiscal 2022 tax return were $ 58,065 .

Consistent with the treatment of the federal tax credits, the Company deferred the tax credits as a regulatory liability, which are being amortized over the 20 -year tax-life of the related utility plant.

The Company recognized $ 2,020 of amortization as a reduction of income tax expense on the consolidated statement of income in fiscal 2023 related to the state R&D tax credits.

No amortization was recognized in fiscal 2024 as discussed below.

The Company did not apply for a Virginia State tax credit related to R&D for fiscal 2023 or 2024 given the IRS audits in process, as discussed further below.

In accordance with the SCC settlement agreement in relation to the Company’s non-gas rate application, the amortization of the R&D tax credit was halted effective August 1, 2023.

As such, no amortization was recognized associated with the R&D tax credits in fiscal 2024.

After resolution of the IRS audits, the Company will proceed with refunding the R&D tax credits, net of related fees, to customers through a mechanism to be approved by the SCC.

As part of the settlement, the Company grossed up the tax credit consistent with treatment of the excess deferred taxes, thereby creating a deferred tax asset of $ 990,219 as of September 30, 2023.

Upon completion of this study, the Company filed amended federal income tax returns for the 2017, 2018 and 2019 fiscal years to claim the R&D tax credit.

The Company also filed for the R&D tax credit on its fiscal 2020 federal income tax return.

A second study was performed during fiscal 2022, and the Company filed for the R&D tax credit on its fiscal 2021 federal income tax return.

During fiscal 2021 and 2022, the Company also applied for a Virginia State tax credit related to the R&D study.

Amounts corresponding with the tax credits were deferred as a regulatory liability as such benefits will be returned to customers through future rate adjustments.

These credits were originally being amortized over the 20 -year tax-life of the related utility plant.

In accordance with the SCC settlement agreement in relation to the Company’s non-gas rate application, the amortization of the R&D tax credit was halted effective August 1, 2023 as the IRS began an examination on the fiscal 2018 and 2019 federal tax returns.

As such, no amortization was recognized associated with the R&D tax credits in fiscal 2025 and 2024.

During September 2025, the Company participated in the IRS Fast Track Settlement (FTS), which is a process that provides the IRS and taxpayers an opportunity to resolve disputes with an appeals official using mediation skills and settlement authority.

The IRS and Company agreed on a settlement equal to 40 % of the R&D tax credits claimed for fiscal 2018 and 2019, the two years under examination.

Once the IRS finalizes the resolution and the refunds are received, the Company will proceed with refunding the R&D tax credits, net of related fees, to customers over a 12 -month period through a mechanism to be approved by the SCC.

The net credit amount deferred as a regulatory liability as of September 30, 2025 was $ 2,568,143 , which reflects adjustments to 40 % of the fiscal 2018 and 2019 credits claimed and the remaining balance of the fiscal 2020 and 2021 credits claimed.

As part of the settlement, the Company grossed up the tax credit consistent with treatment of the excess deferred taxes.

The deferred tax asset associated with the R&D tax credits was adjusted to $ 705,848 as of September 30, 2025 to reflect the adjustment for fiscal 2018 and 2019.

During fiscal 2023, the Company engaged an outside firm to conduct a study of its RNG facility to determine eligibility for the Federal Energy Investment Tax Credit under 26 U.S.

4 unchanged sentences

Accordingly, the Company grossed up the RNG tax credit consistent with treatment of the excess deferred taxes, thereby creating a deferred tax asset of $ 655,862 , which is also being amortized over the 20 -year tax-life of the related asset.

The Company recognized $ 127,404 and $ 74,265 of amortization as part of income tax expense on the consolidated statements of income in fiscal 2024 and 2023, respectively, related to the federal RNG tax credit.

The Company recognized $ 127,404 of amortization as part of income tax expense on the consolidated statements of income in both fiscal 2025 and 2024 related to the federal RNG tax credit.

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

33 unchanged sentences

ASC 740 provides for the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recognized in the financial statements.

The Company has evaluated its tax positions and recorded a reserve for unrecognized tax benefits of $ 273,936 as of September 30, 2024.

The Company evaluated its tax positions and recorded a reserve for unrecognized tax benefits of $ 273,936 as of September 30, 2024.

These unrecognized tax benefits relate to tax positions taken in the Company's prior tax returns.

The reduction to $ 0 in the current year is due to the adjustments made to the Company's income tax assets and liabilities as a result of the FTS previously discussed.

A reconciliation of the Company's unrecognized tax benefits is as follows:

Beginning balance

Increase resulting from prior period tax positions

$ 273,936 $ —

Increase (decrease) resulting from prior period tax positions

( 273,936 ) 273,936

Ending Balance

$ — $ 273,936

The Company’s policy is to classify interest associated with uncertain tax positions as interest expense in the financial statements.

1 unchanged sentence

The Company files a consolidated federal income tax return and state income tax returns in Virginia and West Virginia, and thus subject to examinations by federal and state tax authorities.

The IRS is currently examining the Company's 2018 and 2019 federal tax returns.

The focus of the exam relates to research and development credits, and the results of its exam have not been presented to the Company.

The Company believes its income tax assets and liabilities are fairly stated as of September 30, 2024 and 2023;

however, these assets and liabilities could be adjusted as a result of this examination.

The Company's federal returns for fiscal 2018 and 2019 remain open related to the exam.

Aside from these exceptions, the federal returns and the state returns for Virginia and West Virginia for the tax years ended prior to September 30, 2021 are no longer subject to examination.

The Company adjusted its income tax assets and liabilities to reflect the outcome of the FTS as of September 30, 2025.

Due to the federal government shutdown in October and November 2025, the Company has not received final notice from the IRS officially closing the Company's federal returns for fiscal 2018 and 2019.

Once final notice is received, the federal returns and the state returns for Virginia and West Virginia for the tax years ended through September 30, 2022 are closed to examination.

COMMON STOCK OPTIONS

2 unchanged sentences

ASC 718, Compensation - Stock Compensation, requires that compensation expense be recognized for the issuance of equity instruments to employees.

No options were granted during the fiscal year ended September 30, 2025.

During the fiscal year ended September 30, 2024, the Board approved stock option grants to certain officers.

1 unchanged sentence

Pursuant to the plan, the options vest over a six -month period and are exercisable over a ten -year period from the date of issuance.

No options were granted during the fiscal year ended September 30, 2023.

As the Company's stock options are not traded on the open market, the fair value of each grant is estimated on the date of grant using the Black-Scholes option pricing model including the following assumptions:

17 unchanged sentences

22,000 $ 20.23 5.6 $ 18,388

Options exercised

Options granted

Options forfeited

( 4,000 ) 19.90

2 unchanged sentences

Options granted

Options forfeited

( 4,000 ) 19.90

Options exercised

Options outstanding, September 30, 2025

6 unchanged sentences

Stock-based compensation

51,500 21,560

Intrinsic value of options exercised

16 unchanged sentences

Since the inception of the RSPD, no director has forfeited any shares of Director Restricted Stock.

The Company recognizes as compensation the market value of the Director Restricted Stock in the period it is issued.

The Company recognizes the market value of the Director Restricted Stock as compensation in the period it is issued.

The following table reflects the director compensation activity pursuant to the Plan:

6 unchanged sentences

153,662 $ 17.49 137,764 $ 17.11

The fair market value of the Director Restricted Stock included as compensation was $ 299,200 during fiscal years ended September 30, 2024 and 2023 , and included within operations and maintenance expense on the consolidated statements of income.

The fair market value of the Director Restricted Stock included as compensation during fiscal years ended September 30, 2025 and 2024 was $ 331,030 and $ 299,200 , respectively, and included within operations and maintenance expense on the consolidated statements of income.

No Director Restricted Stock was forfeited during fiscal years ended September 30, 2025 or 2024 .

During fiscal year ended September 30, 2023, an additional 200,000 shares were registered and added to the RSPD, as authorized and approved by shareholders at the Annual Shareholder meeting on January 23, 2023.

After taking into account the activity discussed above and dividends reinvested, as of September 30, 2025 , the Company had 149,022 shares available for issuance under the RSPD.

21 unchanged sentences

Shares from the Stock Bonus Plan may be issued to certain employees and management personnel in recognition of their performance and service.

Under the Stock Bonus Plan, the Company issued 1,562 and 105 shares valued at $ 24,841 and $ 2,500 , respectively, during the fiscal years ended September 30, 2024 and 2023 .

Under the Stock Bonus Plan, the Company issued 1,352 and 1,562 valued at $ 27,500 and $ 24,841 , respectively, during the fiscal years ended September 30, 2025 and 2024 .

As of September 30, 2025 , the Company had 1,766 shares of stock available for issuance under the Stock Bonus Plan.

47 unchanged sentences

$ 1,007,381 $ 1,180,710 $ 4,928,504 $ 4,235,826

Benefit plan liabilities under deferred credits and other non-current liabilities

Amounts recognized in accumulated other comprehensive income:

9 unchanged sentences

The Company expects that approximately $ 31,000 , before tax, of AOCI will be recognized in net periodic benefit costs in fiscal 2026 and approximately $ 31,000 of amounts deferred as regulatory assets and approximately $ 158,000 of amounts deferred as regulatory liabilities will be amortized and recognized in net periodic benefit costs in fiscal 2026.

The changes in the benefit obligations for both the pension plan and postretirement plan was primarily attributed to actuarial gains and losses associated with the discount rate used to calculate the benefit obligations.

The following table details the actuarial assumptions used in determining the projected benefit obligations and net benefit cost of the pension plan and the accumulated benefit obligations and net benefit cost of the postretirement plan:

22 unchanged sentences

59,423 316,522 ( 232,611 ) ( 40,597 )

Net periodic benefit cost

Net periodic benefit cost (income)

$ 353,356 $ 929,779 $ ( 450,520 ) $ 70,029

28 unchanged sentences

The mutual funds are included under Level 1 in the fair value hierarchy as their fair values are based on quoted net asset values of the shares held in the investments in the plans.

The bond funds are included under Level 2 as these investments have observable Level 2 pricing inputs, including quoted prices for similar assets in active or non-active markets.

The bond funds and certain other investments are included under Level 2 as these investments have observable Level 2 pricing inputs, including quoted prices for similar assets in active or non-active markets.

While the underlying asset values are quoted prices, the net asset value of a unit in these funds is not publicly quoted.

54 unchanged sentences

217,707 217,707 — —

Foreign Large Cap Value

652,023 652,023 — —

Foreign Large Cap Core

7 unchanged sentences

5,457,976 5,457,976 — —

Foreign Fixed Income

Domestic Large Cap Growth

2 unchanged sentences

1,996,262 1,996,262 — —

Domestic Small/Mid Cap Growth

Domestic Small/Mid Cap Value

Domestic Small/Mid Cap Core

10 unchanged sentences

For the years ended September 30, 2025 and 2024 , no contributions were made to the pension plan or postretirement plan.

At this time, the Company is not currently anticipating making any funding contributions to the pension plan or postretirement plan in fiscal 2025.

At this time, the Company does not anticipate making any funding contributions to the pension plan or postretirement plan in fiscal 2026.

The following table reflects expected future benefit payments:

7 unchanged sentences

2031 - 2035 9,733,000 3,794,802

The Company established an NQDC Plan in fiscal 2021.

The NQDC Plan is an unfunded, nonqualified benefit plan offered to select members of senior management not eligible to participate in the pension plan.

The NQDC Plan also contains a long-term retention element for certain members of senior management.

Under the NQDC Plan, participants have the right to defer a percentage of base salary as well as receive discretionary credits from the Company.

5 unchanged sentences

Employer contributions

80,510 52,400

Ending deferred compensation balance

11 unchanged sentences

During 2023, the Company entered into a land lease in conjunction with its RNG facility that has a 20 -year term with two five -year Company renewal options that are not considered part of the ROU asset and liability as it was not reasonably certain that the Company would exercise these options.

The Company also has three other operating leases with original terms ranging from 3 to 6 years.

The Company also has two other operating leases with original terms ranging from 3 to 6 years, one of which was renewed during fiscal 2025.

The operating lease ROU assets of $ 341,612 are reflected in other non-current assets in the consolidated balance sheets.

16 unchanged sentences

Roanoke Gas obtains most of its natural gas supply through third -party asset management contracts.

Roanoke Gas utilizes two asset managers to optimize the use of its transportation, storage rights and gas supply inventories, which helps to ensure a secure and reliable source of natural gas.

Under one of the current asset management contracts, Roanoke Gas has designated the asset manager to act as agent for its storage capacity and all gas balances in storage.

Through March 31, 2025, the Company utilized two asset managers to optimize the use of its transportation, storage rights and gas supply inventories, which helps to ensure a secure and reliable source of natural gas.

Those services were consolidated to one asset manager as of April 1, 2025.

Under the current asset management contract, Roanoke Gas has designated the asset manager to act as agent for its storage capacity and all gas balances in storage.

Roanoke Gas retains ownership of gas in storage.

Under provisions of this contract, Roanoke Gas is obligated to purchase its winter storage requirements from the asset manager during the spring and summer injection periods at market price.

The volumetric obligation as of September 30, 2024 for the remainder of the contract period is 295,000 DTHs.

This asset management contract was renewed in September 2022 for a two -year period which will expire in March 2025.

The contract was renewed at essentially the same terms and conditions as the prior agreement, except the utilization fee retained by Roanoke Gas increased.

Roanoke Gas entered into a second asset management contract in July 2024, whereby the asset manager acts as agent for the purchase of gas transported by the MVP.

This second asset management contract is currently month-to-month with no gas purchase or storage obligations and will expire in March 2025.

The current asset management contract was signed for a three year period which will expire in March 2028.

The volumetric obligation as of September 30, 2025 for the remainder of the contract period is 2,071,061 DTH for fiscal years 2026 and 2027 and 295,721 DTH for fiscal year 2028.

In addition to the volumetric commitment, the Company also has fixed price agreements to purchase approximately 1.36 million DTH, from October 2025 to March 2026, at prices ranging from $ 2.92 to $ 4.13 per DTH.

2 unchanged sentences

These rates may increase in the future based upon rate filings and rate orders granting a rate change to the pipeline or storage operator.

Roanoke Gas expended approximate ly $ 30,880,000 and $ 44,253,000 under the asset management, pipeline and storage contracts in fiscal years 2024 and 2023, respectively, including approximately $ 1,048,000 in fiscal year 2024 related to the MVP in which the Company has an investment.

Subsequent to year end, one contract price increased materially effective November 1, 2025, as a result of the supplier filing a rate case;

however, this rate has not yet been finalized.

Roanoke Gas expended approximate ly $ 40,843,000 and $ 30,880,000 under the asset management, pipeline and storage contracts in fiscal years 2025 and 2024, respectively, including approximately $ 4,180,000 and $ 1,048,000 in fiscal years 2025 and 2024, respectively, related to the MVP in which the Company has an investment.

The table below details the pipeline and storage capacity commitments as of September 30, 2025 for the remainder of the contract period.

17 unchanged sentences

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-K

Item 8. Financial Statements and Supplementary Data