RGC RESOURCES INC 10-K

Item 8. Financial Statements and Supplementary Data . 26 Table of Contents RGC Resources, Inc. and Subsidiaries Consolidated Financial Statements for the Years Ended September 30, 2025 and 2024 and Report of Independent Registered Public Accounting Firm 27 Table of Contents RGC RESOURCES, INC. AND SUBSIDIARIES TABLE OF CONTENTS Page Report of Independent Registered Public Accounting Firm (PCAOB ID 34 ) 29 Consolidated Financial Statements for the Years Ended September 30, 2025 and 2024: Consolidated Balance Sheets 31 Consolidated Statements of Income 33 Consolidated Statements of Comprehensive Income (Loss) 34 Consolidated Statements of Stockholders ’ Equity 35 Consolidated Statements of Cash Flows 36 Notes to Consolidated Financial Statements 37 28 Table of Contents Deloitte & Touche LLP 901 E. Byrd St. Suite 820 Richmond, VA 23219 USA www.deloitte.com REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the stockholders and the Board of Directors of RGC Resources, Inc. Opinion on the Financial Statements 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 These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company 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 audits 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 audits, 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 audits 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 audits 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 audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Rate Regulated Basis of Accounting and Regulatory Matters — Refer to Notes 1 and 4, respectively, to the financial statements Critical Audit Matter Description The Company, through its regulated natural gas distribution utility subsidiary, is subject to rate regulation by the Virginia State Corporation Commission (the “SCC”) and follows the accounting and reporting requirements of ASC 980, Regulated Operations. The economic effects of regulation can result in a regulated company deferring costs that have been or are expected to be recovered from customers in a period different from the period in which the costs would be charged to expense by an unregulated enterprise. When this situation occurs, costs are deferred as assets in the consolidated balance sheet and recorded as expenses when such amounts are reflected in rates. Similarly, regulators can impose liabilities upon a regulated company for amounts previously collected from customers and for current collection in rates of costs that are expected to be incurred in the future. 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. 29 Table of Contents 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. Given that management’s accounting judgments are based on assumptions about the outcome of future decisions by the SCC, auditing these judgments requires specialized knowledge of accounting for rate regulation and the rate setting process due to its inherent complexities. How the Critical Audit Matter Was Addressed in the Audit Our audit procedures to evaluate the accounting for the effects of cost-based rate regulation, including the probable recovery or refund of regulatory assets and liabilities, included the following, among others: ● We obtained and evaluated an analysis from management describing the orders and filings that support management’s assertions regarding the probability of recovery for certain regulatory assets or refund or future reduction in rates for certain regulatory liabilities to assess management’s assertion that amounts are probable of recovery or a future reduction in rates. ● We read and evaluated relevant regulatory orders issued by the SCC for the Company, regulatory statutes, interpretations, procedural memorandums, filings made by intervenors, and other publicly available information to assess whether this information was properly considered by management in concluding upon the financial statement impacts of rate regulation. ● For regulatory matters in process, we inspected associated documents and testimony filed with the SCC for any evidence that might contradict management’s assertions. ● We read and evaluated the minutes of the Board of Directors of the Company for discussions of changes in legal, regulatory, or business factors which could impact management’s conclusions with respect to the impact of rate regulation. ● We evaluated the Company’s disclosures related to the impacts of rate regulation, including regulatory developments. /s/ Deloitte & Touche LLP Richmond, Virginia December 3, 2025 We have served as the Company's auditor since 2024. 30 Table of Contents RGC RESOURCES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AS OF September 30, 2025 AND 2024 2025 2024 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 2,320,369 $ 894,185 Accounts receivable, net 4,836,982 4,483,739 Inventories 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 Other 1,015,967 1,066,251 Total current assets 23,319,191 25,072,301 UTILITY PROPERTY: In service 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 Other 593,227 703,394 Total other non-current assets 31,606,792 33,585,468 TOTAL ASSETS $ 329,839,566 $ 320,699,223 (Continued) 31 Table of Contents RGC RESOURCES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AS OF September 30, 2025 AND 2024 2025 2024 LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES: Current maturities of long-term debt $ 2,846,018 $ 800,000 Line-of-credit — 11,166,181 Dividends payable 2,145,558 2,050,286 Accounts payable 7,085,817 5,429,703 Customer credit balances 1,891,161 1,915,859 Customer deposits 1,537,311 1,488,113 Accrued expenses 5,312,204 4,988,281 Regulatory liabilities 1,638,911 834,278 Interest rate swaps 57,144 — Other 25,600 25,729 Total current liabilities 22,539,724 28,698,430 LONG-TERM DEBT: Notes payable 134,258,197 136,955,000 Line-of-credit 11,916,760 — Unamortized debt issuance costs ( 405,794 ) ( 282,092 ) Long-term debt, net 145,769,163 136,672,908 DEFERRED CREDITS AND OTHER NON-CURRENT LIABILITIES: Asset retirement obligations 11,640,435 11,142,095 Regulatory cost of retirement obligations 15,869,691 14,409,847 Benefit plan liabilities 201,194 113,600 Deferred income taxes 2,277,550 1,890,562 Regulatory liabilities 17,371,430 19,326,567 Interest rate swaps 298,016 — Other 319,573 308,439 Total deferred credits and other non-current liabilities 47,977,889 47,191,110 COMMITMENTS AND CONTINGENCIES (Note 14) STOCKHOLDERS' EQUITY: Common stock, $ 5 par value; authorized 20,000,000 shares; issued and outstanding 10,338,308 and 10,249,899 shares in 2025 and 2024, respectively 51,691,540 51,249,495 Preferred stock, no par; authorized 5,000,000 shares; no shares issued and outstanding in 2025 and 2024 — — Capital in excess of par value 49,311,486 47,988,270 Retained earnings 12,288,032 7,572,439 Accumulated other comprehensive income 261,732 1,326,571 Total stockholders’ equity 113,552,790 108,136,775 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 329,839,566 $ 320,699,223 See notes to consolidated financial statements. 32 Table of Contents RGC RESOURCES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME YEARS ENDED September 30, 2025 AND 2024 2025 2024 OPERATING REVENUES: Gas utility $ 95,231,943 $ 84,533,101 Non utility 102,269 108,131 Total operating revenues 95,334,212 84,641,232 OPERATING EXPENSES: Cost of gas - utility 42,550,954 35,967,987 Cost of sales - non utility 19,919 24,003 Operations and maintenance 19,911,410 18,354,736 Taxes other than income taxes 2,933,787 2,694,652 Depreciation and amortization 11,470,641 10,518,094 Total operating expenses 76,886,711 67,559,472 OPERATING INCOME 18,447,501 17,081,760 Equity in earnings of unconsolidated affiliate 3,234,632 3,851,871 Other income, net 2,232,883 1,028,761 Interest expense 6,543,511 6,504,885 INCOME BEFORE INCOME TAXES 17,371,505 15,457,507 INCOME TAX EXPENSE 4,091,535 3,696,611 NET INCOME $ 13,279,970 $ 11,760,896 EARNINGS PER COMMON SHARE: Basic $ 1.29 $ 1.16 Diluted $ 1.29 $ 1.16 WEIGHTED AVERAGE SHARES OUTSTANDING: Basic 10,304,109 10,152,909 Diluted 10,308,686 10,156,480 See notes to consolidated financial statements. 33 Table of Contents RGC RESOURCES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) YEARS ENDED September 30, 2025 AND 2024 2025 2024 NET INCOME $ 13,279,970 $ 11,760,896 Other comprehensive income (loss), net of tax: Interest rate swaps ( 867,081 ) ( 1,897,273 ) Defined benefit plans ( 197,758 ) 970,555 OTHER COMPREHENSIVE LOSS, NET OF TAX ( 1,064,839 ) ( 926,718 ) COMPREHENSIVE INCOME $ 12,215,131 $ 10,834,178 See notes to consolidated financial statements. 34 Table of Contents RGC RESOURCES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS ’ EQUITY YEARS ENDED September 30, 2025 AND 2024 Accumulated Capital in Other Total Common Excess of Retained Comprehensive Stockholders’ Stock Par Value Earnings Income (Loss) Equity BALANCE - SEPTEMBER 30, 2023 $ 50,076,270 $ 44,430,786 $ 3,972,280 $ 2,253,289 $ 100,732,625 Net income — — 11,760,896 — 11,760,896 Other comprehensive loss — — — ( 926,718 ) ( 926,718 ) Stock-based compensation — 51,500 — — 51,500 Cash dividends declared ($ 0.80 per share) — — ( 8,160,737 ) — ( 8,160,737 ) Issuance costs — ( 82,793 ) — — ( 82,793 ) Issuance of common stock ( 234,645 shares) 1,173,225 3,588,777 — — 4,762,002 BALANCE - SEPTEMBER 30, 2024 $ 51,249,495 $ 47,988,270 $ 7,572,439 $ 1,326,571 $ 108,136,775 Net income — — 13,279,970 — 13,279,970 Other comprehensive loss — — — ( 1,064,839 ) ( 1,064,839 ) Cash dividends declared ($ 0.83 per share) — — ( 8,564,377 ) — ( 8,564,377 ) Issuance costs — ( 35,078 ) — — ( 35,078 ) Issuance of common stock ( 88,409 shares) 442,045 1,358,294 — — 1,800,339 BALANCE - SEPTEMBER 30, 2025 $ 51,691,540 $ 49,311,486 $ 12,288,032 $ 261,732 $ 113,552,790 See notes to consolidated financial statements. 35 Table of Contents RGC RESOURCES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED September 30, 2025 AND 2024 2025 2024 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 13,279,970 $ 11,760,896 Adjustments to reconcile net income to net cash provided by operations: Depreciation and amortization 11,470,641 10,518,094 Cost of retirement of utility property ( 512,872 ) ( 576,771 ) Stock-based compensation 673,057 711,924 Equity in earnings of unconsolidated affiliate ( 3,234,632 ) ( 3,851,871 ) Distributions from unconsolidated affiliate 3,644,542 — Donated property ( 762,240 ) ( 781,990 ) Deferred income taxes 318,673 ( 121,781 ) Other noncash items, net 371,170 516,836 Changes in assets and liabilities which provided (used) cash: Accounts receivable and customer deposits, net ( 293,609 ) ( 275,196 ) Inventories and gas in storage 175,219 2,568,942 Regulatory and other assets 2,935,963 ( 2,765,027 ) Regulatory liabilities ( 405,105 ) ( 1,006,472 ) Other 1,287,372 736,041 Net cash provided by operating activities 28,948,149 17,433,625 CASH FLOWS FROM INVESTING ACTIVITIES: Additions to utility property ( 20,730,140 ) ( 22,094,406 ) Investment in unconsolidated affiliates ( 76,385 ) ( 18,258 ) Proceeds from disposal of utility property 72,910 79,032 Net cash used in investing activities ( 20,733,615 ) ( 22,033,632 ) CASH FLOWS FROM FINANCING ACTIVITIES: Borrowings under line-of-credit 48,597,639 45,388,194 Repayments under line-of-credit ( 47,847,060 ) ( 38,575,585 ) Proceeds from issuance of unsecured notes 17,529,215 10,855,000 Retirement of notes payable ( 18,180,000 ) ( 10,175,000 ) Debt issuance expenses ( 184,300 ) ( 101,206 ) Proceeds from issuance of stock 1,765,261 4,679,209 Cash dividends paid ( 8,469,105 ) ( 8,088,851 ) Net cash provided by (used in) financing activities ( 6,788,350 ) 3,981,761 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 1,426,184 ( 618,246 ) BEGINNING CASH AND CASH EQUIVALENTS 894,185 1,512,431 ENDING CASH AND CASH EQUIVALENTS $ 2,320,369 $ 894,185 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the year for: Interest $ 6,350,032 $ 6,273,144 Income taxes 4,195,000 2,940,000 Significant noncash activities: Accrued capital expenditures 1,378,196 1,257,734 Proceeds and retirement of borrowings with the same financial institution 38,600,000 — See notes to consolidated financial statements. 36 Table of Contents RGC RESOURCES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED September 30, 2025 AND 2024 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation —RGC Resources, Inc. is an energy services company primarily engaged in the sale and distribution of natural gas. The consolidated financial statements include the accounts of Resources and its wholly owned subsidiaries: Roanoke Gas and Midstream. Roanoke Gas is a natural gas utility, which distributes and sells natural gas to approximately 62,500 residential, commercial and industrial customers within its service areas in Roanoke, Virginia and the surrounding localities. The Company’s business is seasonal in nature as a majority of natural gas sales are for space heating during the winter season. Roanoke Gas is regulated by the SCC. Midstream is a wholly owned subsidiary created primarily to invest in the LLC. The Company follows accounting and reporting standards established by the FASB and the SEC, including certain provisions allowed under the smaller reporting company exceptions. Rate Regulated Basis of Accounting —The Company’s regulated operations follow the accounting and reporting requirements of ASC 980, Regulated Operations . The economic effects of regulation can result in a regulated company deferring costs that have been or are expected to be recovered from customers in a period different from the period in which the costs would be charged to expense by an unregulated enterprise. When this situation occurs, costs are deferred as assets in the consolidated balance sheet (regulatory assets) and recorded as expenses when such amounts are reflected in rates. Additionally, regulators can impose liabilities upon a regulated company for amounts previously collected from customers and for current collection in rates of costs that are expected to be incurred in the future (regulatory liabilities). 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. 37 Table of Contents Regulatory assets and liabilities included in the Company’s consolidated balance sheets as of September 30, 2025 and 2024 are as follows: September 30 2025 2024 Assets: Current Assets: Regulatory assets: Accrued WNA revenues $ 504,003 $ 919,375 Under-recovery of natural gas costs 750,295 2,690,247 Under-recovery of RNG revenues 1,019,821 1,331,064 Under-recovery of SAVE Plan revenues 265,317 107,678 Accrued pension 30,640 42,785 Other deferred expenses 12,762 12,761 Total current 2,582,838 5,103,910 Other Non-Current Assets: Regulatory assets: Premium on early retirement of debt 1,027,684 1,141,872 Accrued pension 2,168,902 2,998,881 Other deferred expenses 118,496 304,291 Total non-current 3,315,082 4,445,044 Total regulatory assets $ 5,897,920 $ 9,548,954 Liabilities and Stockholders' Equity: Current Liabilities: Regulatory liabilities: Rate refund $ — $ 37,500 Deferred income taxes 591,764 591,764 Supplier refunds 889,564 30,556 Other deferred liabilities 157,583 174,458 Total current 1,638,911 834,278 Deferred Credits and Non-Current Other Liabilities: Regulatory cost of retirement obligations 15,869,691 14,409,847 Regulatory liabilities: Deferred income taxes 13,649,719 15,468,096 Deferred postretirement medical 3,721,711 3,858,471 Total non-current 33,241,121 33,736,414 Total regulatory liabilities $ 34,880,032 $ 34,570,692 Amortization of $ 101,141 and $ 116,085 of regulatory assets for the years ended September 30, 2025 and 2024 , respectively, is included in operations and maintenance expense on the consolidated statements of income. Amortization of $ 131,673 and $ 211,863 of regulatory assets for the years ended September 30, 2025 and 2024 , respectively, is included in other income, net on the consolidated statements of income. Amortization of $ 114,187 of regulatory assets for both years ended September 30, 2025 and 2024 is included in interest expense on the consolidated statements of income. As of September 30, 2025 , the Company had regulatory assets in the amount of $ 5,897,920 on which the Company did not earn a return during the recovery period. 38 Table of Contents Utility Property and Depreciation —Utility property is stated at original cost and includes direct labor and materials, contractor costs, and all allocable overhead charges. The Company applies the group method of accounting, where the costs of like assets are aggregated and depreciated by applying a rate based on the average expected useful life of the assets. In accordance with Company policy, expenditures for depreciable assets with a life greater than one year are capitalized, along with any upgrades or improvements to existing assets, when such upgrades or improvements significantly improve or extend the original expected useful life. Expenditures for maintenance, repairs, and minor renewals and betterments are expensed as incurred. The original cost of depreciable property retired is removed from utility property and charged to accumulated depreciation. The cost of asset removals, less salvage, is charged to “regulatory cost of retirement obligations” or “asset retirement obligations” as explained under Asset Retirement Obligations below. Utility property is composed of the following major classes of assets: September 30 2025 2024 Distribution and transmission $ 330,895,437 $ 312,999,348 LNG storage 15,863,849 15,437,447 General and miscellaneous 20,084,067 17,427,213 Total utility property in service $ 366,843,353 $ 345,864,008 Provisions for depreciation are computed principally at composite straight-line rates over a range of periods. Rates are determined by depreciation studies, which are required to be performed at least every 5 years on the regulated utility assets of Roanoke Gas. 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 % 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. As a result, the Company accrues the estimated cost of retirement of long-lived assets through depreciation expense. These retirement costs are not a legal obligation but rather the result of cost-based regulation and are accounted for under the provisions of ASC 980. Such amounts are classified as a regulatory liability. The Company reviews long-lived assets and certain identifiable intangibles for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. These reviews have not identified any impairments which would have a material effect on the results of operations or financial condition. 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. When the liability is initially recorded, the entity capitalizes the cost, thereby increasing the carrying amount of the underlying asset. In subsequent periods, the liability is accreted, and the capitalized cost is depreciated over the useful life of the underlying asset. The Company has recorded AROs for its future regulatory obligations related to purging and capping its distribution mains and services upon retirement, although the timing of such retirements is uncertain. 39 Table of Contents The following is a summary of the AROs: Years Ended September 30 2025 2024 Beginning balance $ 11,142,095 $ 10,792,831 Liabilities incurred 72,502 86,483 Liabilities settled ( 138,391 ) ( 168,913 ) Accretion 564,229 582,383 Revisions to estimates and other — ( 150,689 ) Ending balance $ 11,640,435 $ 11,142,095 Cash, Cash Equivalents and Short-Term Investments —From time to time, the Company will have balances on deposit at banks in excess of the amount insured by the FDIC. The Company has not experienced any losses on these accounts and does not consider these amounts to be at risk. For purposes of the consolidated statements of cash flows, the Company considers all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents. Customer Receivables and Allowance for Credit Losses —Accounts receivable include amounts billed to customers for natural gas sales and related services and gas sales occurring subsequent to normal billing cycles but before the end of the period. The Company provides an estimate for losses on these receivables by utilizing historical information, current account balances, account aging and current economic conditions. Customer accounts are charged off annually when deemed uncollectible or when turned over to a collection agency for action. A reconciliation of changes in the allowance for credit losses is as follows: Years Ended September 30 2025 2024 Beginning balance $ 153,347 $ 155,164 Provision for credit losses 278,606 110,676 Recoveries of accounts written off 140,727 173,660 Accounts written off ( 429,769 ) ( 286,153 ) Ending balance $ 142,911 $ 153,347 Lease Accounting —The Company leases certain assets including office space and land classified as operating leases. The Company determines if an arrangement is a lease at inception of the agreement based on the terms and conditions in the contract. The operating lease ROU assets and operating lease liabilities are recognized as the present value of the future minimum lease payments over the lease term at commencement date. As most of the leases do not provide an implicit rate, the Company uses an estimate of its secured incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The incremental borrowing rate is determined by management aided by inquiries of a third party. The operating lease ROU asset also is adjusted for any lease payments made and excludes lease incentives and initial direct costs incurred. The Company’s lease terms may include options to extend or terminate the lease at certain dates, typically at the Company’s own discretion. The Company regularly evaluates the renewal options and when they are reasonably certain of exercise, the Company includes the renewal period in its lease term. Lease expense for minimum lease payments is recognized on a straight-line basis over the term of the agreement. 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. Inventories —Natural gas in storage and materials and supplies inventories are recorded at average cost. Natural gas storage injections are priced at the purchase cost at the time of injection and storage withdrawals are priced at the weighted average cost of gas in storage. Materials and supplies are removed from inventory at average cost. 40 Table of Contents Unbilled Revenues —The Company bills its natural gas customers on a monthly cycle; however, the billing cycle for most firm customers does not coincide with the accounting periods used for financial reporting. As the Company recognizes revenue when gas is delivered, an accrual is made to estimate revenues for natural gas delivered to customers but not billed during the accounting period. The amounts of unbilled revenue receivable included in accounts receivable on the consolidated balance sheets at September 30, 2025 and 2024 were $ 1,373,512 and $ 1,294,798 , respectively. Income Taxes —Income taxes are accounted for using the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the years in which those temporary differences are expected to be recovered or settled. A valuation allowance against deferred tax assets is provided if it is more likely than not the deferred tax asset will not be realized. The Company and its subsidiaries file consolidated state and federal income tax returns. Debt Expenses —Debt issuance expenses are deferred and amortized over the lives of the debt instruments. The unamortized balances are offset against the carrying value of long-term debt. 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. Once administrative approval is received, the Company adjusts the gas cost component of its rates to reflect the approved amount. As actual costs and usage will differ from the projections used in establishing the PGA rate, the Company may either over-recover or under-recover its actual gas costs during the period. Any difference between actual costs incurred and costs recovered through the application of the PGA is recorded as a regulatory asset or liability. At the end of the deferral period, the balance of the net deferred charge or credit is amortized over an ensuing 12 -month period as amounts are reflected in customer bills. Fair Value —Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between willing market participants at the measurement date. The Company determines fair value based on the following fair value hierarchy which prioritizes each input to the valuation methods into one of the following three broad levels: • Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. • Level 2 – Inputs other than quoted prices in Level 1 that are either for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability, or inputs that are derived principally from or corroborated by observable market data by correlation or other means. • Level 3 – Unobservable inputs for the asset or liability where there is little, if any, market activity which require the Company to develop its own assumptions. The fair value hierarchy gives the highest priority to unadjusted quoted prices in active markets (Level 1 ) and the lowest priority to unobservable inputs (Level 3 ). All fair value disclosures are categorized within one of the three categories in the hierarchy based on the lowest level that is significant to the valuation. See fair value disclosures below and in Notes 8 and 12. Use of Estimates —The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Excise and Sales Taxes —Certain excise and sales taxes imposed by the state and local governments in the Company’s service territory are collected by the Company from its customers. These taxes are passed through to the state and local governments and included within accounts payable on the Company's consolidated balance sheets. 41 Table of Contents Earnings Per Share —Basic EPS and diluted EPS are calculated by dividing net income by the weighted-average common shares outstanding during the period and the weighted-average common shares outstanding during the period plus potential dilutive common shares, respectively. Potential dilutive common shares are calculated in accordance with the treasury stock method, which assumes that proceeds from the exercise of all options are used to repurchase common stock at market value. The amount of shares remaining after the proceeds are exhausted represents the potentially dilutive effect of the securities. The computation of diluted EPS for the years ended September 30, 2025 and 2024 excludes potentially dilutive shares of 1,926 and 2,542 , respectively, because to include them would be antidilutive for the period. However, these shares could potentially dilute EPS in the future. A reconciliation of basic and diluted EPS is presented below: Years Ended September 30 2025 2024 Net income $ 13,279,970 $ 11,760,896 Weighted-average common shares 10,304,109 10,152,909 Effect of dilutive securities: Options to purchase common stock 4,577 3,571 Diluted average common shares 10,308,686 10,156,480 Earnings per share of common stock: Basic $ 1.29 $ 1.16 Diluted $ 1.29 $ 1.16 Business and Credit Concentrations —The primary business of the Company is the distribution of natural gas to residential, commercial and industrial customers in its service territories. No sales to individual customers accounted for more than 5 % of total revenue in any period. No individual customer amounted to more than 5 % of total accounts receivable at September 30, 2025 and 2024 . Roanoke Gas currently holds the only franchises and/or CPCNs to distribute natural gas in its service area. These franchises generally extend for multi-year periods, are renewable by the municipalities and are intended for perpetual duration, including exclusive franchises in the cities of Roanoke, Salem and the Town of Vinton. All franchises are set to expire December 31, 2035. Roanoke Gas is currently served by three primary pipelines that provide the natural gas supplied to the Company’s customers. Depending upon weather conditions and the level of customer demand, failure of one or all of these transmission pipelines could have a major adverse impact on the Company. Derivative and Hedging Activities —ASC 815, Derivatives and Hedging , requires the recognition of all derivative instruments as assets or liabilities in the Company’s consolidated balance sheet and measurement of those instruments at fair value. The Company’s hedging and derivatives policy allows management to enter into derivatives for the purpose of managing the commodity and financial market risks of its business operations. The Company’s hedging and derivatives policy specifically prohibits the use of derivatives for speculative purposes. The key market risks that the Company may hedge against include the price of natural gas and the cost of borrowed funds. From time to time, the Company has entered into collars, swaps and caps for the purpose of hedging the price of natural gas in order to provide price stability during the winter months. The fair value of these instruments is recorded in the consolidated balance sheets with the offsetting entry to either under- or over-recovery of gas costs. Net income and other comprehensive income are not affected by the change in market value as any cost incurred or benefit received from these instruments is recoverable or refunded through the PGA as the SCC allows for full recovery of prudent costs associated with natural gas purchases. At September 30, 2025 and 2024 , the Company had no outstanding derivative instruments for the purchase of natural gas. 42 Table of Contents 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 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. No portion of the swaps were deemed ineffective during the periods presented. See Notes 7 and 8 for additional information on the swaps and fair value. Other Comprehensive Income (Loss) —A summary of other comprehensive income is provided below: Tax Before Tax (Expense) Net of Tax Amount or Benefit Amount Year Ended September 30, 2025: Interest rate swaps: Unrealized gains $ 207,015 $ ( 53,287 ) $ 153,728 Transfer of realized gains to interest expense ( 1,374,643 ) 353,834 ( 1,020,809 ) Net interest rate swaps ( 1,167,628 ) 300,547 ( 867,081 ) Defined benefit plans: Net losses arising during period ( 282,941 ) 72,828 ( 210,113 ) Amortization of actuarial losses 16,638 ( 4,283 ) 12,355 Net defined benefit plans ( 266,303 ) 68,545 ( 197,758 ) Other comprehensive loss $ ( 1,433,931 ) $ 369,092 $ ( 1,064,839 ) Year Ended September 30, 2024: Interest rate swaps: Unrealized losses $ ( 554,778 ) $ 142,800 $ ( 411,978 ) Transfer of realized gains to interest expense ( 2,000,126 ) 514,831 ( 1,485,295 ) Net interest rate swaps ( 2,554,904 ) 657,631 ( 1,897,273 ) Defined benefit plans: Net gains arising during period 1,233,462 ( 317,492 ) 915,970 Amortization of actuarial losses 73,505 ( 18,920 ) 54,585 Net defined benefit plans 1,306,967 ( 336,412 ) 970,555 Other comprehensive loss $ ( 1,247,937 ) $ 321,219 $ ( 926,718 ) The amortization of actuarial gains or losses are included as a component of net periodic pension and postretirement benefit costs under other income, net in the consolidated statements of income. Composition of AOCI: Interest Rate Swaps Defined Benefit Plans Accumulated Other Comprehensive Income (Loss) Balance September 30, 2023 $ 3,428,922 $ ( 1,175,633 ) $ 2,253,289 Other comprehensive income (loss) ( 1,897,273 ) 970,555 ( 926,718 ) Balance September 30, 2024 1,531,649 ( 205,078 ) 1,326,571 Other comprehensive loss ( 867,081 ) ( 197,758 ) ( 1,064,839 ) Balance September 30, 2025 $ 664,568 $ ( 402,836 ) $ 261,732 43 Table of Contents 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 December 2023, the FASB issued ASU 2023 - 09, Income Taxes (Topic 740 ): Improvements to Income Tax Disclosures . The new guidance requires that on an annual basis public business entities disclose specific categories in the rate reconciliation table and provide additional information for reconciling items that meet a quantitative threshold (items equal to or greater than 5 percent of the amount computed by multiplying pretax income or loss by the applicable statutory rate). The required disclosures will provide more granularity regarding the payment of income taxes to federal, state and foreign entities. The Company does not expect certain requirements of this ASU to have a significant impact to its current disclosures as all of its operations are domestic and reside in two states. Changes to the rate reconciliation table will result in additional disclosure. The new guidance is effective for the Company for annual periods beginning October 1, 2025. In November 2024, the SEC issued ASU 2024 - 03, Income Statement - Reporting Comprehensive Income (Topic 220 ): Expense Disaggregation Disclosur es. The new guidance requires public business entities to disclose certain additional detail about expenses including, among other items, purchases of inventory, employee compensation, depreciation and intangible asset amortization included within each income statement expense line items within continuing operations. The guidance also requires disclosure of the total amount of selling expenses and the Company’s definition of selling expenses. 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. 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. Other accounting standards that have been issued or proposed by the FASB or other standard–setting bodies are not currently applicable to the Company or are not expected to have a significant impact on the Company’s financial position, results of operations and cash flows. Reclassification Certain prior year amounts have been reclassified to conform to current year presentations. 44 Table of Contents 2. REVENUE The Company assesses new contracts and identifies related performance obligations for promises to transfer distinct goods or services to the customer. Revenue is recognized when performance obligations have been satisfied. In the case of Roanoke Gas, the Company contracts with its customers for the sale and/or delivery of natural gas. The following tables summarize revenue by customer, product and income statement classification for the years ended September 30: 2025 Gas utility Non utility Total operating revenues Natural Gas (Billed and Unbilled): Residential $ 54,093,809 $ — $ 54,093,809 Commercial 33,035,454 — 33,035,454 Transportation and Interruptible 5,871,389 — 5,871,389 Other 791,194 102,269 893,463 Total contracts with customers 93,791,846 102,269 93,894,115 Alternative revenue programs 1,440,097 — 1,440,097 Total operating revenues $ 95,231,943 $ 102,269 $ 95,334,212 2024 Gas utility Non utility Total operating revenues Natural Gas (Billed and Unbilled): Residential $ 46,472,676 $ — $ 46,472,676 Commercial 27,659,507 — 27,659,507 Transportation and Interruptible 5,414,157 — 5,414,157 Other 879,186 108,131 987,317 Total contracts with customers 80,425,526 108,131 80,533,657 Alternative revenue programs 4,107,575 — 4,107,575 Total operating revenues $ 84,533,101 $ 108,131 $ 84,641,232 Gas utility revenues Substantially all of Roanoke Gas’ revenues are derived from rates authorized by the SCC through its tariffs. Based on its evaluation, the Company has concluded that these tariff-based revenues fall within the scope of ASC 606. Tariff rates represent the transaction price. Performance obligations include the procurement and transport of natural gas through the Company's distribution system to customers. The delivery of natural gas to customers results in the satisfaction of the Company’s respective performance obligations over time. All customers are billed monthly based on consumption as measured by metered usage with payments due 20 days from the rendering of the bill. Revenue is recognized as bills are issued for natural gas that has been delivered or transported. In addition, the Company utilizes the practical expedient that allows an entity to recognize the invoiced amount as revenue, if that amount corresponds to the value received by the customer. Since customers are billed tariff rates, there is no variable consideration in the transaction price. 45 Table of Contents Unbilled revenue is included in residential and commercial revenues in the preceding table. Natural gas consumption is estimated for the period subsequent to the last billed date and up through the last day of the month. Estimated volumes and approved tariff rates are utilized to calculate unbilled revenue. The following month, the unbilled estimate is reversed, the actual usage is billed and a new unbilled estimate is calculated. The Company obtains metered usage for transportation and interruptible customers at the end of each month, thereby eliminating any unbilled consideration for these rate classes. Other revenues Other revenues primarily consist of miscellaneous fees and charges, utility-related revenues not directly billed to utility customers and billings for non-utility activities. Customers are invoiced monthly based on services provided for these activities. The Company utilizes the practical expedient allowing revenue to be recognized based on invoiced amounts. The transaction price is based on a contractually predetermined rate schedule; therefore, the transaction price represents total value to the customer and no variable price consideration exists. Alternative revenue program revenues ARPs, which fall outside the scope of ASC 606, are SCC approved mechanisms that allow for the adjustment of revenues for certain broad, external factors, or for additional billings if the entity achieves certain performance targets. The Company's ARPs include its WNA, which adjusts revenues for the effects of weather temperature variations as compared to the 30 -year average; the SAVE Plan over/under collection mechanism, which adjusts revenues for the differences between SAVE Plan revenues billed to customers and the revenues earned, as calculated based on the timing and extent of infrastructure replacement completed during the period; and the RNG over/under collection mechanism, which adjusts revenues similar to the SAVE Plan, but is calculated based on the timing and costs associated with owning, operating and maintaining the RNG facility. These amounts are ultimately collected from, or returned to, customers through future rate changes approved by the SCC. Customer accounts receivable and liabilities Accounts receivable, as reflected in the condensed consolidated balance sheets, includes both billed and unbilled customer revenues, as well as amounts that are not related to customers. The balances of customer receivables are provided below: Current Assets Current Liabilities Trade accounts receivable (1) Unbilled revenue (1) Customer credit balances Customer deposits September 30, 2024 $ 3,080,140 $ 1,294,798 $ 1,915,859 $ 1,488,113 September 30, 2025 3,354,154 1,373,512 1,891,161 1,537,311 Increase (decrease) $ 274,014 $ 78,714 $ ( 24,698 ) $ 49,198 ( 1 ) Included in "Accounts receivable, net" in the consolidated balance sheet. Amounts shown net of reserve for bad debts. The Company did not incur any significant costs to obtain contracts during the period. Certain customers elect to pay even amounts monthly, giving rise to assets and liabilities that are in the table above. All amounts clear annually. 46 Table of Contents 3. SEGMENT INFORMATION 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 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. 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: Gas Utility Investment in Affiliates Consolidated Total For the Year Ended September 30, 2025: Operating revenues $ 95,231,943 $ — $ 95,231,943 Corporate and other — — 102,269 Total revenues 95,231,943 — 95,334,212 Cost of gas - utility 42,550,954 — 42,550,954 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 — — 19,919 Total operating income (loss) 18,549,566 ( 184,415 ) 18,447,501 Equity in earnings — 3,234,632 3,234,632 Interest expense 3,706,152 2,837,359 6,543,511 Income before income taxes 17,072,877 216,278 17,289,155 Corporate and other — — 82,350 Total income before income taxes $ 17,072,877 $ 216,278 $ 17,371,505 As of September 30, 2025: Assets $ 291,571,159 $ 21,679,154 $ 313,250,313 Corporate and other — — 16,589,253 Total assets 291,571,159 21,679,154 329,839,566 Gross additions to utility property 20,730,140 — 20,730,140 Gross investment in affiliates $ — $ 76,385 $ 76,385 47 Table of Contents Gas Utility Investment in Affiliates Consolidated Total For the Year Ended September 30, 2024: Operating revenues $ 84,533,101 $ — $ 84,533,101 Corporate and other — — 108,131 Total revenues 84,533,101 — 84,641,232 Cost of gas - utility 35,967,987 — $ 35,967,987 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 — — 20,011 Total operating income (loss) 17,130,480 ( 136,840 ) 17,081,760 Equity in earnings — 3,851,871 3,851,871 Interest expense 3,700,674 2,804,211 6,504,885 Income before income taxes 14,459,009 910,490 15,369,499 Corporate and other — — 88,008 Total income before income taxes $ 14,459,009 $ 910,490 $ 15,457,507 As of September 30, 2024: Assets $ 280,508,989 $ 21,324,361 $ 301,833,350 Corporate and other — — 18,865,873 Total assets 280,508,989 21,324,361 320,699,223 Gross additions to utility property 22,094,406 — 22,094,406 Gross investment in affiliates $ — $ 18,258 $ 18,258 4. REGULATORY MATTERS The SCC exercises regulatory authority over the natural gas operations of Roanoke Gas. Such regulation encompasses terms, conditions and rates to be charged to customers for natural gas service, safety standards, service extension and depreciation. In response to continued inflationary pressures, Roanoke Gas filed a general rate application on February 2, 2024 with the SCC seeking to increase its non-gas base rates by $ 4.33 million and its permitted return on equity from 9.44 % to 10.35 % reflecting its higher cost of capital, including higher interest expense. The SCC permitted the Company to implement its new rates on an interim basis for customer billings on or after July 1, 2024, subject to refund. On October 16, 2024, 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 increase of $ 4.08 million based on a return on equity of 9.90 %. 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. 48 Table of Contents On June 2, 2022, Roanoke Gas filed an application with the SCC to acquire certain natural gas distribution assets from a local housing authority. Under this application, the Company requested the approval to acquire such facilities at five separate apartment complexes, located in the Company’s service territory, that were under housing authority management. Under the proposed plan, the housing authority would renew existing natural gas distribution facilities to include mains, services, and meter installations and then transfer ownership of these facilities to Roanoke Gas. In turn, Roanoke Gas would assume responsibility for the operation and maintenance of these assets and recognize a gain related to the asset acquisition equal to the cost associated with the renewal. 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, 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 transferred. Additionally, there are no remaining facilities to be transferred in the future under the plan. 5. OTHER INVESTMENTS Midstream has invested less than 1 % in the equity interests of 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 stakeholder of the MVP. The Company has been using the equity method since the inception of its investment in fiscal 2016. 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 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. Funding for Midstream's investments has been provided through equity contributions from Resources and unsecured promissory notes as detailed in Note 7. The investments in the LLC are included in the consolidated balance sheets as follows: September 30 Balance Sheet location: 2025 2024 Other Assets: MVP $ 20,538,437 $ 20,948,347 Southgate 185,260 108,875 Investment in unconsolidated affiliates $ 20,723,697 $ 21,057,222 49 Table of Contents The change in the investment in unconsolidated affiliates is provided below: September 30 2025 2024 Cash investment $ 76,385 $ 18,258 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 $ ( 333,525 ) $ 3,870,129 Summary unaudited financial statements of MVP are presented below. Southgate financial statements, which are accounted for under the cost method, are not included: Income Statements Years Ended September 30 2025 2024 Revenue $ 563,535,710 $ 143,052,597 Operating expenses ( 290,825,244 ) ( 78,822,028 ) AFUDC 6,133,873 343,922,690 Other income, net 119,761 9,900,128 Net income $ 278,964,100 $ 418,053,387 Balance Sheets September 30 2025 2024 Assets: Current assets $ 173,283,635 $ 263,966,727 Construction work in progress — 1,568,267 Property, plant and equipment, net 9,418,928,665 9,522,815,742 Other assets 1,789,092 13,732,299 Total assets $ 9,594,001,392 $ 9,802,083,035 Liabilities and Equity: Current liabilities $ 40,148,017 $ 168,645,751 Noncurrent liabilities 1,084,072 68,965 Capital 9,552,769,303 9,633,368,319 Total liabilities and equity $ 9,594,001,392 $ 9,802,083,035 6. LINE-OF-CREDIT 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: Available Line-of-Credit As of September 30, 2025 $ 20,000,000 October 1, 2025 through March 31, 2026 30,000,000 April 1, 2026 through September 30, 2026 20,000,000 October 1, 2026 through March 31, 2027 30,000,000 50 Table of Contents A summary of the line-of-credit follows: September 30 2025 2024 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 % 7. LONG-TERM DEBT Long-term debt consisted of the following: September 30 2025 2024 Principal Unamortized Debt Issuance Costs Principal Unamortized Debt Issuance Costs Roanoke Gas: Unsecured senior note payable at 4.26 %, due September 18, 2034 $ 30,500,000 $ 86,887 $ 30,500,000 $ 96,541 Unsecured term note payable at 3.58 %, due October 2, 2027 8,000,000 9,632 8,000,000 14,448 Unsecured term note payable at 4.41 %, due March 28, 2031 10,000,000 17,229 10,000,000 20,362 Unsecured term note payable at 3.60 %, due December 6, 2029 10,000,000 14,971 10,000,000 18,494 Unsecured term note payable at 30-day SOFR plus 1.20 %, due August 20, 2026 (swap rate at 2.00 %) 15,000,000 — 15,000,000 — Unsecured term note payable at Term SOFR plus 1.00 %, due October 1, 2028 (swap rate at 2.49 %) 10,000,000 22,612 10,000,000 27,044 Midstream: 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 Term SOFR plus 1.55 %, due September 5, 2032 (swap rate at 5.061 %) 15,000,000 66,592 — — Revolving credit facility at Term SOFR plus 1.75 %, due September 5, 2030 ("Southgate") 4,215 5,553 — — Revolving credit facility at Term SOFR plus 1.75 %, due September 5, 2030 ("Boost") — 10,956 — — Unsecured term note payable at Term SOFR plus 1.55 %, retired September 5, 2025 — — 24,855,000 32,299 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 $ 137,104,215 $ 405,794 $ 137,755,000 $ 282,092 Less: current maturities of long-term debt ( 2,846,018 ) — ( 800,000 ) — Total long-term debt, net current maturities $ 134,258,197 $ 405,794 $ 136,955,000 $ 282,092 51 Table of Contents 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. The Sixth Amendment revised the interest rate from Term SOFR plus 2.00 % to Term SOFR plus 2.00 % subject to adjustment to Term SOFR plus 1.75 % and Term SOFR plus 1.55 % upon meeting certain milestones. The Sixth Amendment also consolidated the Promissory Notes to one Promissory Note with one lender, increased the available non-revolving credit facility to $ 25 million, and extended the maturity date to December 31, 2025. All other terms and requirements remain unchanged. On May 2, 2024, Midstream established a new $ 9 million line of credit facility. The interest rate on the borrowings under the facility is SOFR plus 2.215%; the arrangement included a 0.40 % upfront fee and 0.125 % unused line fee. The facility matures on May 2, 2026. 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. Debt issuance costs are amortized over the life of the related debt. As of September 30, 2025 and 2024 , the Company also had an unamortized loss on the early retirement of debt of $ 1,027,684 and $ 1,141,872 , respectively, which has been deferred as a regulatory asset and is being amortized over a 20 -year period. All of the debt agreements set forth certain representations, warranties and covenants to which the Company is subject, including financial covenants that limit consolidated long-term indebtedness to not more than 65 % of total capitalization. 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, $ 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 . The aggregate annual maturities of long-term debt for the next five years ending after September 30, 2025 are as follows: Year Ending September 30 Maturities 2026 $ 17,846,018 2027 2,846,018 2028 10,846,017 2029 12,846,018 2030 12,850,233 Thereafter 79,869,911 Total $ 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. 52 Table of Contents 8. FAIR VALUE 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. There have been no changes to the Company's valuation techniques during fiscal years ended September 30, 2025 and 2024 . Fair Value Measurements - September 30, 2025 Quoted Prices in Active Markets Significant Other Observable Inputs Significant Unobservable Inputs Fair Value Level 1 Level 2 Level 3 Assets: Interest rate swaps - current $ 828,573 $ — $ 828,573 $ — Interest rate swaps - noncurrent $ 421,511 — $ 421,511 Total $ 1,250,084 $ — $ 1,250,084 $ — Liabilities: Natural gas purchases $ 135,863 $ — $ 135,863 $ — Interest rate swaps - current $ 57,144 $ — $ 57,144 $ — Interest rate swaps - noncurrent $ 298,016 $ — $ 298,016 $ — Total $ 491,023 $ — $ 491,023 $ — Fair Value Measurements - September 30, 2024 Quoted Prices in Active Markets Significant Other Observable Inputs Significant Unobservable Inputs Fair Value Level 1 Level 2 Level 3 Assets: Interest rate swaps - current $ 871,026 $ — $ 871,026 $ — Interest rate swaps - noncurrent $ 1,191,526 $ — $ 1,191,526 $ — Total $ 2,062,552 $ — $ 2,062,552 $ — Liabilities: Natural gas purchases $ 761,020 $ — $ 761,020 $ — Total $ 761,020 $ — $ 761,020 $ — 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. Under the asset management contract, a timing difference can exist between the payment for natural gas purchases and the actual receipt of such purchases. Payments are made based on a predetermined monthly volume with the price based on the weighted average first of the month index prices corresponding to the month of the scheduled payment. At September 30, 2025 and 2024 , the Company had recorded in accounts payable the estimated fair value of the liability based on the corresponding first of month quoted index prices for which the liability was expected to be settled. The Company’s non-financial assets and liabilities that are measured at fair value on a nonrecurring basis consist of its AROs. The AROs are measured at fair value at initial recognition based on expected future cash flows to settle the obligation. 53 Table of Contents The carrying value of cash and cash equivalents, accounts receivable, borrowings under line-of-credit, accounts payable, customer credit balances and customer deposits is a reasonable estimate of fair value due to the short-term nature of these financial instruments. In addition, the carrying amount of the variable rate line-of-credit is a reasonable approximation of its fair value. The following table summarizes the fair value of the Company’s financial assets and liabilities that are not adjusted to fair value in the consolidated financial statements as of September 30, 2025 and 2024 . Fair Value Measurements - September 30, 2025 Carrying Quoted Prices in Active Markets Significant Other Observable Inputs Significant Unobservable Inputs Amount Level 1 Level 2 Level 3 Liabilities: Current maturities of long-term debt $ 2,846,018 $ — $ — $ 2,846,018 Notes payable 134,258,197 — — 131,605,756 Total $ 137,104,215 $ — $ — $ 134,451,774 Fair Value Measurements - September 30, 2024 Carrying Quoted Prices in Active Markets Significant Other Observable Inputs Significant Unobservable Inputs Amount Level 1 Level 2 Level 3 Liabilities: Current maturities of long-term debt $ 800,000 $ — $ — $ 800,000 Notes payable 136,955,000 — — 135,471,275 Total $ 137,755,000 $ — $ — $ 136,271,275 The fair value of long-term debt is estimated by discounting the future cash flows of the fixed rate debt based on the underlying Treasury rate or other Treasury instrument with a corresponding maturity period and estimated credit spread extrapolated based on market conditions since the issuance of the debt. ASC 825, Financial Instruments, requires disclosures regarding concentrations of credit risk from financial instruments. Cash equivalents are investments in high-grade, short-term securities (original maturity less than three months), placed with financially sound institutions. Accounts receivable are from a diverse group of customers including individuals and small and large companies in various industries. The Company maintains certain credit standards with its customers and requires a customer deposit if such evaluation warrants. 54 Table of Contents 9. INCOME TAXES Under the provisions of ASC 740, the deferred tax assets and liabilities of the Company were revalued in fiscal 2018 to reflect the reduction in the corporate federal income tax rate. As a result of the revaluation, the excess deferred income taxes of the regulated operations of Roanoke Gas were reclassified to a regulatory liability. The excess deferred taxes related to the depreciable property are being returned to customers over the remaining weighted average useful life of the property with a corresponding reduction in income tax expense. The excess deferred taxes related to the other regulatory basis differences were being collected from customers over a five -year period, which concluded in December 2023. The details of income tax expense (benefit) are as follows: Years Ended September 30 2025 2024 Current income taxes: Federal $ 3,167,466 $ 3,128,721 State 733,266 689,671 Total current income taxes 3,900,732 3,818,392 Deferred income taxes: Federal ( 156,415 ) ( 398,588 ) State 347,218 276,807 Total deferred income taxes 190,803 ( 121,781 ) Total income tax expense $ 4,091,535 $ 3,696,611 Income tax expense for the years ended September 30, 2025 and 2024 differed from amounts computed by applying the U.S. federal income tax rate to earnings before income taxes due to the following: Years Ended September 30 2025 2024 Income before income taxes $ 17,371,505 $ 15,457,507 Corporate federal income tax rate 21 % 21 % Income tax expense computed at the federal statutory rate $ 3,648,016 $ 3,246,076 State income taxes, net of federal income tax expense 853,582 763,518 Net amortization of excess deferred taxes on regulated operations ( 366,844 ) ( 315,708 ) Net amortization of RNG tax credits ( 100,649 ) ( 100,649 ) Reserve for unrecognized tax benefits — 82,000 Other, net 57,430 21,374 Total income tax expense $ 4,091,535 $ 3,696,611 During fiscal 2021, the Company engaged an outside firm to conduct a study of its activities that would qualify for the Research and Development ("R&D") credit under 26 U.S. Code § 41 - Credit for increasing research activities . 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. 55 Table of Contents 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. Code § 48 – Energy credit (“RNG tax credit”). Upon completion of the study, the Company determined a credit in the amount of $ 1,892,164 to be claimed on the fiscal 2023 tax return. Similar to the treatment of the R&D tax credits, the Company deferred the RNG tax credit as a regulatory liability, which is being amortized over the 20 -year tax-life of the related asset. Further, as part of the SCC order approving the RNG project and corresponding rates charged to customers, any tax credits attributable to the RNG project are to be used to reduce the cost to customers through the RNG Rider. 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 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: September 30 2025 2024 Deferred tax assets: Accrued pension and postretirement medical benefits $ 556,316 $ 512,778 Regulatory effect of change in federal income tax rate 2,433,559 2,553,086 Cost of gas held in storage 773,167 835,094 Deferred compensation 1,382,130 1,166,850 Impairment of unconsolidated affiliate 13,722,837 14,077,357 Regulatory effect on tax credits 1,277,006 1,437,670 Other 861,076 641,300 Total gross deferred tax assets 21,006,091 21,224,135 Deferred tax liabilities: Utility property 20,367,400 19,879,747 MVP investment 2,054,156 1,586,837 Interest rate swaps 230,356 530,903 Accrued gas cost 14,339 345,464 Total gross deferred tax liabilities 22,666,251 22,342,951 Net deferred tax asset 617,390 771,746 Net deferred tax liability $ 2,277,550 $ 1,890,562 Deferred tax assets and liabilities are recorded on the consolidated balance sheets on a net basis by taxing jurisdictions. As of September 30, 2025 and 2024 , the Company's consolidated balance sheets included net deferred tax liabilities of $ 2,277,550 and $ 1,890,562 , respectively, in deferred credits and other non-current liabilities and net deferred tax assets of $ 617,390 and $ 771,746 , respectively, in other non-current assets. 56 Table of Contents 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 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: September 30 2025 2024 Beginning balance $ 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. Tax penalties, if any, are netted against other income. 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 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. 10. COMMON STOCK OPTIONS The KEYSOP provides for the issuance of common stock options to officers and certain other full-time salaried employees to acquire shares of the Company’s common stock. As of September 30, 2025 , the number of shares available for future grants was 16,000 . 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. As required by the KEYSOP, each option's exercise price per share equaled the fair value of the Company's common stock on the grant date. 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. 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: Years Ended September 30 2025 2024 Expected volatility N/A 32.07 % Expected dividends N/A 2.84 % Expected exercise term (years) N/A 7 Risk-free interest rate N/A 4.95 % 57 Table of Contents The underlying methods regarding each assumption are as follows: Expected volatility is based on the historical volatility of the daily closing price of the Company's common stock. Expected dividend rate is based on historical dividend payout trends. Expected exercise term is based on the average time historical option grants were outstanding before being exercised. Risk-free interest rate is based on the 7 -year Treasury rate on the date of option grant. Forfeitures are recognized when they occur. Stock option transactions under the Company's plans are summarized below. Number of Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Terms (years) Aggregate Intrinsic Value1 Options outstanding, September 30, 2023 22,000 $ 20.23 5.6 $ 18,388 Options granted 10,000 16.62 Options forfeited ( 4,000 ) 19.90 Options outstanding, September 30, 2024 28,000 $ 18.98 5.8 $ 127,988 Options granted — Options exercised — Options outstanding, September 30, 2025 28,000 $ 18.98 4.8 $ 125,388 Vested and exercisable at September 30, 2025 28,000 $ 18.98 4.8 $ 125,388 ( 1 ) Aggregate intrinsic value includes only those options where the exercise price is below the market price. Years Ended September 30 2025 2024 Weighted-average grant date option fair value $ — $ 5.15 Stock-based compensation — 51,500 Intrinsic value of options exercised — — Proceeds from exercise of stock options — — Stock-based compensation related to stock options disclosed in the table above is included within operations and maintenance expense on the consolidated statements of income. 11. OTHER STOCK PLANS Dividend Reinvestment and Stock Purchase Plan The Company offers a DRIP plan to shareholders of record for the reinvestment of dividends and the opportunity to purchase of up to $ 100,000 per year in additional shares of common stock of the Company. Under the DRIP, the Company issued 30,027 and 33,226 shares in 2025 and 2024 , respectively. After taking into account the activity discussed above and dividends reinvested, as of September 30, 2025 , the Company had 202,371 shares of stock available for issuance under the DRIP. 58 Table of Contents Restricted Stock Plan for Outside Directors The Board of Directors of the Company implemented the RSPD in 1997. Under the RSPD, each director may elect annually to have up to 100 % of his or her fees paid in shares of common stock ("Director Restricted Stock"); however, a minimum of 40 % of the monthly retainer fee must be paid to each non-employee director of Resources in shares of Director Restricted Stock until such time as the director has accumulated at least 10,000 shares. The number of shares of Director Restricted Stock awarded each month is determined based on the closing sales price of Resources' common stock on the Nasdaq Global Market on the first business day of the month. The Director Restricted Stock issued under the Plan vests only in the case of a participant's death, disability, retirement, or in the event of a change in control of Resources. The Director Restricted Stock may not be sold, transferred, assigned or pledged by the participant until the shares have vested under the terms of the Plan. The shares of Director Restricted Stock will be forfeited to Resources by a participant's voluntary resignation during his or her term on the Board or removal for cause as a director. The Company assumes all directors will complete their term and there will be no forfeiture of the Director Restricted Stock. Since the inception of the RSPD, no director has forfeited any shares of Director Restricted Stock. 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: 2025 2024 Shares Weighted-Average Fair Value on Date of Grant Shares Weighted-Average Fair Value on Date of Grant Beginning of year balance 137,764 $ 17.11 122,207 $ 16.84 Granted 15,898 20.82 15,557 19.23 End of year balance 153,662 $ 17.49 137,764 $ 17.11 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 . 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. RGC Resources, Inc. Restricted Stock Plan The Board of Directors of the Company implemented the RSPO in 2017 as approved by shareholders. Under the RSPO, the Compensation Committee of the Board of Directors may grant shares of common stock ("Officer Restricted Stock") that vest over time to key employees and officers for the purpose of attracting and retaining those individuals essential to the operation and growth of the Company. The RSPO provides for certain restrictions and non-transferability requirements until minimum levels of ownership are obtained. Such restrictions may continue beyond the vesting period. The Company assumes all officers will complete their requirements and there will be no forfeiture of the Officer Restricted Stock. 59 Table of Contents The following table reflects the officer compensation activity pursuant to the RSPO: 2025 2024 Shares Weighted-Average Fair Value on Date of Grant Shares Weighted-Average Fair Value on Date of Grant Beginning of year balance 31,482 $ 20.09 8,966 $ 23.19 Granted 30,470 20.00 45,723 20.12 Vested ( 26,736 ) 20.08 ( 23,207 ) 21.35 End of year balance 35,216 $ 20.02 31,482 $ 20.09 The fair market value of the Officer Restricted Stock included as compensation during fiscal years ended September 30, 2025 and 2024 was $ 673,057 and $ 660,424 , respectively, and included within operations and maintenance expense on the consolidated statements of income. As of September 30, 2025 and 2024 , there was $ 222,026 and $ 285,683 , respectively, of unamortized compensation expense related to unvested Officer Restricted Stock. No Officer Restricted Stock was forfeited during fiscal years ended September 30, 2025 or 2024 . After taking into account the activity discussed above and dividends reinvested, as of September 30, 2025 , the Company had 286,560 shares available for issuance under the RSPO. Stock Bonus Plan 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 1,352 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. 12. EMPLOYEE BENEFIT PLANS The Company sponsors both a noncontributory pension plan and a postretirement plan. The pension plan covers all employees hired prior to January 2017 and benefits fully vest after 5 years of credited service. Benefits paid to retirees are based on age at retirement, years of service and average compensation. Effective January 1, 2017, a "soft freeze" to the pension plan was implemented, and employees hired on or after that date are no longer eligible to participate. Commensurate with the "soft freeze" in the pension plan, the Company amended its 401 (k) Plan, allowing management to authorize a discretionary contribution to the 401 (k) account for those employees hired on or after January 1, 2017. The amount, if any, of this discretionary contribution would be determined each year and would be applied to the eligible employees in the following calendar year. This Company contribution would be in addition to any employee elected deferrals and employer match as provided for under the 401 (k) Plan. The postretirement plan provides certain health care, supplemental retirement and life insurance benefits to retired employees who meet specific age and service requirements. Employees hired prior to January 1, 2000 are eligible to participate in the postretirement plan. Employees must have a minimum of 10 years of service and retire after attaining the age of 55 in order to vest in the postretirement plan. Retiree contributions to the plan are based on the number of years of service to the Company as determined under the pension plan. 60 Table of Contents Employers who sponsor defined benefit plans must recognize the funded status of defined benefit pension and other postretirement plans as an asset or liability in their statements of financial position and recognize changes in that funded status in the year in which the changes occur through comprehensive income. For pension plans, the benefit obligation is the projected benefit obligation, and for other postretirement plans, the benefit obligation is the accumulated benefit obligation. The Company established a regulatory asset for the portion of the obligation expected to be recovered through rates in future periods. The regulatory asset is adjusted for the recognition of actuarial gains and losses. The portion of the obligation attributable to the unregulated operations of the holding company is recognized in other comprehensive income, with actuarial gains and losses recognized using the corridor method. The following table sets forth the benefit obligation, fair value of plan assets, the funded status of the plans, and amounts recognized in the Company’s consolidated financial statements: Pension Plan Postretirement Plan 2025 2024 2025 2024 Accumulated benefit obligation $ 26,298,490 $ 26,859,162 $ 10,462,318 $ 10,842,455 Change in benefit obligation: Benefit obligation at beginning of year $ 29,873,428 $ 26,747,624 $ 10,842,455 $ 11,248,448 Service cost 387,429 324,265 4,376 30,398 Interest cost 1,410,406 1,468,822 507,423 613,477 Actuarial loss (gain) ( 752,215 ) 2,613,621 ( 297,327 ) ( 540,914 ) Benefit payments, net of retiree contributions ( 1,439,028 ) ( 1,280,904 ) ( 594,609 ) ( 508,954 ) Benefit obligation at end of year $ 29,480,020 $ 29,873,428 $ 10,462,318 $ 10,842,455 Change in fair value of plan assets: Fair value of plan assets at beginning of year $ 31,054,138 $ 26,878,661 $ 15,078,281 $ 13,019,313 Actual return on plan assets, net of taxes 872,291 5,456,381 907,150 2,567,922 Employer contributions — — — — Benefit payments, net of retiree contributions ( 1,439,028 ) ( 1,280,904 ) ( 594,609 ) ( 508,954 ) Fair value of plan assets at end of year $ 30,487,401 $ 31,054,138 $ 15,390,822 $ 15,078,281 Funded status $ 1,007,381 $ 1,180,710 $ 4,928,504 $ 4,235,826 Amounts recognized in the consolidated balance sheet consist of: Benefit plan assets under other non-current assets $ 1,007,381 $ 1,180,710 $ 4,928,504 $ 4,235,826 Amounts recognized in accumulated other comprehensive income: Net actuarial loss (gain), net of tax $ 923,823 $ 432,149 $ ( 520,987 ) $ ( 227,071 ) Total amounts included in accumulated other comprehensive income, net of tax $ 923,823 $ 432,149 $ ( 520,987 ) $ ( 227,071 ) Amounts deferred to a regulatory asset (liability): Net actuarial loss (gain) $ 2,199,542 $ 3,041,666 $ ( 3,879,294 ) $ ( 4,032,929 ) Amounts recognized as regulatory assets (liabilities) $ 2,199,542 $ 3,041,666 $ ( 3,879,294 ) $ ( 4,032,929 ) 61 Table of Contents 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 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: Pension Plan Postretirement Plan 2025 2024 2025 2024 Assumptions used to determine benefit obligations: Discount rate 5.29 % 4.83 % 5.16 % 4.83 % Expected rate of compensation increase 4.00 % 4.00 % N/A N/A Assumptions used to determine benefit costs: Discount rate 4.83 % 5.63 % 4.83 % 5.63 % Expected long-term rate of return on plan assets 4.95 % 4.50 % 4.95 % 4.21 % Expected rate of compensation increase 4.00 % 4.00 % N/A N/A To develop the expected long-term rate of return on plan assets assumption, the Company, with input from the Plans' actuaries and investment advisors, considered the historical returns and the future expectations for returns for each asset class, as well as the target asset allocation of each plan’s portfolio. Components of net periodic benefit cost are as follows: Pension Plan Postretirement Plan 2025 2024 2025 2024 Service cost $ 387,429 $ 324,265 $ 4,376 $ 30,398 Interest cost 1,410,406 1,468,822 507,423 613,477 Expected return on plan assets ( 1,503,902 ) ( 1,179,830 ) ( 729,708 ) ( 533,249 ) Recognized loss (gain) 59,423 316,522 ( 232,611 ) ( 40,597 ) Net periodic benefit cost (income) $ 353,356 $ 929,779 $ ( 450,520 ) $ 70,029 Service cost is included in operations and maintenance expense in the consolidated statements of income. All other components of net periodic benefit costs are included in other income, net in the consolidated statements of income. The assumed health care cost trend rates used in measuring the accumulated benefit obligation for the postretirement plan are presented below: Pre 65 Post 65 2025 2024 2025 2024 Health care cost trend rate assumed for next year 7.00 % 7.00 % 5.60 % 5.60 % Rate to which the cost trend is assumed to decline (the ultimate trend rate) 4.00 % 4.00 % 4.00 % 4.00 % Year that the rate reaches the ultimate trend rate 2075 2075 2075 2075 The health care cost trend rate assumptions could have a significant effect on the amounts reported. A change of 1% would have the following effects: 1% Increase 1% Decrease Effect on total service and interest cost components $ 58,000 $ ( 50,000 ) Effect on accumulated postretirement benefit obligation 1,113,000 ( 955,000 ) 62 Table of Contents The primary objectives of both plans' investment policies are to maintain investment portfolios that diversify risk through prudent asset allocation parameters, achieve asset returns that meet or exceed the corresponding actuarial assumptions and will provide for future benefits. The Company's pension plan allocation approach seeks to match the duration of the fixed income portion of the portfolio with the duration of the plan's liabilities. Such allocation is designed to reduce the overall volatility in the pension plan relative to the funded status. The equity allocations in both plans provide for potential returns to offset growth in the corresponding liabilities. Based on its most recent evaluation of returns for the asset classes within each plan's investment portfolio, the Company set the expected long-term rate of return for both the pension plan and the postretirement plan for fiscal 2026 at 5.75 %. The Company’s ultimate target and actual asset allocation in the pension and postretirement plans as of September 30, 2025 and 2024 were: Pension Plan Postretirement Plan Target 2025 2024 Target 2025 2024 Asset category: Equity securities 25 % 23 % 25 % 30 % 38 % 48 % Debt securities 75 % 77 % 75 % 70 % 53 % 36 % Cash — % — % — % — % 9 % 16 % The Company uses the fair value hierarchy described in Note 1 to classify these assets. 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 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. The following tables contain the fair value classifications of the plans' assets: Pension Plan Fair Value Measurements - September 30, 2025 Fair Value Level 1 Level 2 Level 3 Asset Class: Cash $ 27,603 $ 27,603 $ — $ — Common and Collective Trust and Pooled Funds: Bond Funds 19,460,378 — 19,460,378 — Mutual Funds: Domestic Fixed Income 3,901,202 3,901,202 — — Equities Domestic Large Cap Growth 2,161,688 2,161,688 — — Domestic Large Cap Value 2,470,055 2,470,055 — — Domestic Small/Mid Cap Core 1,023,627 1,023,627 — — Foreign Large Cap Growth 442,847 442,847 — — Foreign Large Cap Value 469,821 469,821 — — Foreign Large Cap Core 530,180 530,180 — — Total $ 30,487,401 $ 11,027,023 $ 19,460,378 $ — 63 Table of Contents Pension Plan Fair Value Measurements - September 30, 2024 Fair Value Level 1 Level 2 Level 3 Asset Class: Cash $ 142,921 $ 142,921 $ — $ — Common and Collective Trust and Pooled Funds: Bond Funds 19,505,237 — 19,505,237 — Mutual Funds: Domestic Fixed Income 3,791,697 3,791,697 — — Equities Domestic Large Cap Growth 2,073,092 2,073,092 — — Domestic Large Cap Value 2,469,045 2,469,045 — — Domestic Small/Mid Cap Core 1,297,579 1,297,579 — — Foreign Large Cap Growth 498,732 498,732 — — Foreign Large Cap Value 482,222 482,222 — — Foreign Large Cap Core 793,613 793,613 — — Total $ 31,054,138 $ 11,548,901 $ 19,505,237 $ — Postretirement Plan Fair Value Measurements - September 30, 2025 Fair Value Level 1 Level 2 Level 3 Asset Class: Cash $ 1,462,600 $ 1,462,600 $ — $ — Mutual Funds: Bonds Domestic Fixed Income 8,089,514 8,089,514 — — Equities Domestic Large Cap Growth 1,340,584 1,340,584 — — Domestic Large Cap Value 2,799,537 2,799,537 — — Domestic Small/Mid Cap Core 453,828 453,828 — — Foreign Large Cap Growth 217,707 217,707 — — Foreign Large Cap Core 1,027,052 1,027,052 — — Total $ 15,390,822 $ 15,390,822 $ — $ — 64 Table of Contents Postretirement Plan Fair Value Measurements - September 30, 2024 Fair Value Level 1 Level 2 Level 3 Asset Class: Cash $ 2,381,909 $ 2,381,909 $ — $ — Mutual Funds: Bonds Domestic Fixed Income 5,457,976 5,457,976 — — Equities Domestic Large Cap Growth 2,412,824 2,412,824 — — Domestic Large Cap Value 1,996,262 1,996,262 — — Domestic Small/Mid Cap Core 738,393 738,393 — — Foreign Large Cap Growth 532,391 532,391 — — Foreign Large Cap Value 652,023 652,023 — — Foreign Large Cap Core 906,503 906,503 — — Total $ 15,078,281 $ 15,078,281 $ — $ — Each mutual fund or common collective trust fund has been categorized based on its primary investment strategy. Annual funding contributions to the pension plan and postretirement plan are made under advisement from the Company's actuaries and investment advisor based upon ERISA funding requirements. 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 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: Pension Postretirement Fiscal year ending September 30 Plan Plan 2026 $ 1,463,000 $ 728,140 2027 1,560,000 753,633 2028 1,630,000 747,643 2029 1,701,000 773,121 2030 1,780,000 760,210 2031 - 2035 9,733,000 3,794,802 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. The Company's discretionary credits vest over time. Any benefits distributed from the NQDC Plan are paid from the general assets of the Company. As the plan is unfunded, the balance reflected in the table below is a noncurrent liability included in benefit plan liabilities on the consolidated balance sheet. 2025 2024 Beginning deferred compensation balance $ 113,600 $ 47,674 Employer contributions 80,510 52,400 Earnings 7,084 13,526 Ending deferred compensation balance $ 201,194 $ 113,600 65 Table of Contents The Company sponsors a 401 (k) Plan covering all eligible employees who elect to participate. Employees may contribute from 1 % to 50 % of their annual compensation to the 401 (k) Plan, either on a pre-tax or post-tax basis, limited to a maximum annual amount as set periodically by the IRS. The Company matches 100 % of the participant’s first 4 % of contributions and 50 % of the next 2 % of contributions. The 401 (k) Plan also provides for discretionary contributions for employees hired on or after January 1, 2017. The following table reflects the Company's contributions: Years Ended September 30 2025 2024 Matching contribution $ 466,630 $ 427,022 Discretionary contribution 137,114 112,207 13. LEASES 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 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. The current operating lease liabilities of $ 25,600 and non-current lease liabilities of $ 319,573 are included in other current liabilities and deferred credits and other non-current liabilities , respectively, in the consolidated balance sheets. The cost components of the Company’s operating leases are included under operations and maintenance expense in the consolidated statements of income and were less than $ 50,000 for each period presented. Other information related to leases were as follows: 2025 2024 Supplemental Cash Flow Information: Cash paid on operating leases $ 42,900 $ 37,900 Right of use obtained in exchange for operating lease obligations 36,734 N/A Weighted-average remaining term (in years) 15.7 17.4 Weighted-average discount rate 5.64 % 5.65 % On September 30, 2025, the future minimum rental payments under non-cancelable operating leases were as follows: 2026 $ 51,268 2027 43,238 2028 39,600 2029 26,400 2030 26,400 Thereafter 316,800 Total minimum lease payments 503,706 Less imputed interest ( 158,533 ) Total $ 345,173 66 Table of Contents 14. COMMITMENTS AND CONTINGENCIES Long-Term Contracts Due to the nature of the natural gas distribution business, Roanoke Gas enters into agreements with suppliers and pipelines to contract for natural gas commodity purchases, storage capacity and pipeline delivery capacity. Roanoke Gas obtains most of its natural gas supply through third -party asset management contracts. 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 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. Roanoke Gas also has contracts for pipeline and storage capacity which extend for various periods. These capacity costs and related fees are valued at tariff rates in place as of September 30, 2025 . These rates may increase in the future based upon rate filings and rate orders granting a rate change to the pipeline or storage operator. 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. Pipeline and Year Storage Capacity 2025 - 2026 $ 21,214,051 2026 - 2027 19,808,347 2027 - 2028 16,077,977 2028 - 2029 13,930,198 2029 - 2030 9,276,138 Thereafter 57,469,500 Total $ 137,776,211 Roanoke Gas maintains franchise agreements granted by the local cities and towns served by the Company. Roanoke Gas renewed its franchise agreements with the City of Roanoke, the City of Salem and the Town of Vinton in 2016 for 20 -year terms to expire in December 2035. Per these agreements, franchise fees increase at a rate of 3 % annually. As of September 30, 2025 , $ 1,690,215 in future obligations remain under the franchise agreements. 67 Table of Contents Other Contracts The Company maintains other agreements in the ordinary course of business covering various maintenance, equipment, user fees and service contracts. These agreements currently extend through December 2031 and are not material to the Company. Environmental Matters Roanoke Gas operated an MGP as a source of fuel for lighting and heating until the early 1950’s. A by-product of operating the MGP was coal tar, and the potential exists for tar waste contaminants at the former plant site. While the Company does not currently recognize any commitments or contingencies related to environmental costs, should the Company ever be required to remediate the site, it will pursue all prudent and reasonable means to recover any related costs, including the use of insurance claims and regulatory approval for rate case recognition of expenses associated with any work required. 15. SUBSEQUENT EVENTS The Company has evaluated subsequent events through the date the financial statements were issued. There were no other items not otherwise disclosed which would have materially impacted the Company’s consolidated financial statements. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure . None.