Energy Services of America CORP

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)


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

For the quarterly period ended March 31, 2026.

Commission File Number: 001-32998

Energy Services of America Corporation

(Exact Name of Registrant as Specified in Its Charter)

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


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

(304) 522-3868

(Registrant’s Telephone Number Including Area Code)

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

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

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

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

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


Large accelerated filer	☐	Accelerated filer	☒

Non-accelerated filer	☐	Smaller reporting company	☒

		Emerging growth company	☐

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

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

As of May 8, 2026, there were 18,659,679 outstanding shares of the Registrant’s Common Stock.

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Part 1: Financial Information

Item 1. Financial Statements (Unaudited):

Consolidated Balance Sheets		2

Consolidated Statements of Income		3

Consolidated Statements of Cash Flows		4

Consolidated Statements of Changes in Shareholders’ Equity		5

Notes to Unaudited Consolidated Financial Statements		6

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		27

Item 3. Quantitative and Qualitative Disclosures About Market Risk		49

Item 4. Controls and Procedures		49

Part II: Other Information

Item 1. Legal Proceedings		50

Item 1A. Risk Factors		50

Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities		51

Item 5. Other Information		51

Item 6. Exhibits		52

Signatures		53

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Part 1. Financial Information

Item 1. Financial Statements (Unaudited):

Energy Services of America Corporation

Consolidated Balance Sheets

Unaudited


	March 31,		September 30,
	2026		2025
Assets
Current assets
Cash and cash equivalents	$	10,110,449	$	12,241,408
Accounts receivable-trade		60,372,358		76,570,064
Allowance for credit losses		(303,722)		(521,616)
Retainages receivable		18,601,638		16,049,557
Other receivables		1,241,166		1,103,687
Contract assets		26,773,714		34,455,011
Prepaid expenses and other		6,445,709		5,025,476
Total current assets		123,241,312		144,923,587

Property, plant and equipment, at cost		121,611,925		115,448,972
less accumulated depreciation		(67,435,755)		(61,981,005)
Total fixed assets		54,176,170		53,467,967

Right-of-use assets-operating leases		2,393,665		2,054,615
Intangible assets, net		4,204,738		4,895,083
Goodwill		9,865,804		9,865,804
Total assets	$	193,881,689	$	215,207,056

Liabilities and shareholders’ equity
Current liabilities
Current maturities of long-term debt	$	9,289,546	$	11,546,816
Current maturities of lines of credit and short-term borrowings		10,450,998		10,401,366
Current maturities of operating lease liabilities		1,213,982		1,061,021
Accounts payable		21,271,471		30,732,523
Accrued expenses and other current liabilities		16,152,668		15,918,593
Contract liabilities		29,474,281		28,318,765
Total current liabilities		87,852,946		97,979,084

Long-term debt, less current maturities		15,411,686		50,256,031
Long-term operating lease liabilities, less current maturities		1,171,456		982,621
Deferred tax liability		7,916,026		6,753,527
Total liabilities		112,352,114		155,971,263

Shareholders’ equity
Common stock, $.0001 par value
Authorized 50,000,000 shares, 18,659,679 shares issued (net of treasury shares) and 18,622,287 shares outstanding (excluding 37,392 shares from unvested stock awards) at March 31, 2026 and 16,748,702 shares issued (net of treasury shares) and 16,715,026 shares outstanding (excluding 33,676 unvested shares from restricted stock awards) at September 30, 2025		2,013		1,813
Treasury stock, 1,502,236 shares at March 31, 2026 and 1,396,120 shares at September 30, 2025		(154)		(143)
Additional paid in capital		82,880,372		62,450,414
Retained deficit		(1,352,656)		(3,216,291)
Total shareholders’ equity		81,529,575		59,235,793
Total liabilities and shareholders’ equity	$	193,881,689	$	215,207,056

The Accompanying Notes are an Integral Part of These Consolidated Financial Statements

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Energy Services of America Corporation

Consolidated Statements of Income

Unaudited


	Three Months Ended		Three Months Ended		Six Months Ended		Six Months Ended
	March 31,		March 31,		March 31,		March 31,
	2026		2025		2026		2025
Revenue	$	93,173,442	$	76,679,151	$	207,285,642	$	177,325,265

Cost of revenue		82,941,106		76,601,291		183,059,514		166,983,823

Gross profit		10,232,336		77,860		24,226,128		10,341,442

Selling and administrative expenses		9,173,925		8,170,087		18,254,952		16,787,708
Income (loss) from operations		1,058,411		(8,092,227)		5,971,176		(6,446,266)

Other (expense) income
Other nonoperating expense		(94,224)		(20,616)		(196,865)		(68,878)
Interest expense		(621,835)		(875,770)		(1,611,686)		(1,359,488)
Gain on sale of equipment		69,993		(16,540)		88,749		179,242
		(646,066)		(912,926)		(1,719,802)		(1,249,124)

Income (loss) before income taxes		412,345		(9,005,153)		4,251,374		(7,695,390)

Income tax expense (benefit)		196,797		(2,206,735)		1,330,345		(1,750,705)

Net income (loss)	$	215,548	$	(6,798,418)	$	2,921,029	$	(5,944,685)

Weighted average shares outstanding-basic		17,526,126		16,716,809		17,110,381		16,630,245

Weighted average shares-diluted		17,568,110		16,716,809		17,150,954		16,630,245

Earnings (loss) per share available to common shareholders	$	0.01	$	(0.41)	$	0.17	$	(0.36)

Earnings (loss) per share-diluted available to common shareholders	$	0.01	$	(0.41)	$	0.17	$	(0.36)

The Accompanying Notes are an Integral Part of These Consolidated Financial Statements

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Energy Services of America Corporation

Consolidated Statements of Cash Flows

Unaudited


	Six Months Ended		Six Months Ended
	March 31,		March 31,
	2026		2025
Cash flows from operating activities:
Net income (loss)	$	2,921,029	$	(5,944,685)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense		6,724,766		5,586,230
Accreted interest on PPP loans		49,632		49,738
Gain on sale of equipment		(88,749)		(179,242)
Provision for deferred taxes		1,162,499		(1,839,881)
Vested restricted stock award compensation		58,680		32,758
Tax settlement on shares repurchased		(12,048)		—
Amortization of intangible assets		690,345		295,060
Accreted interest on note payable		3,900		25,000
Decrease in accounts receivable-trade		15,979,812		10,162,409
(Increase) decrease in retainage receivable		(2,552,081)		599,786
(Increase) decrease in other receivables		(137,479)		1,389,784
Decrease in contract assets		7,681,297		3,581,095
Increase in prepaid expenses and other		(1,420,233)		(1,020,822)
Decrease in accounts payable		(9,461,052)		(4,561,534)
Decrease in accrued expenses and other current liabilities		(320,788)		(3,497,456)
Increase in contract liabilities		1,155,516		5,311,068
Net cash provided by operating activities		22,435,046		9,989,308

Cash flows from investing activities:
Investment in property and equipment		(5,719,129)		(5,087,101)
Acquisition of Tribute Contracting & Consultants		—		(20,783,224)
Proceeds from sales of property and equipment		301,763		596,314
Net cash used in investing activities		(5,417,366)		(25,274,011)

Cash flows from financing activities:
Proceeds from long-term debt		—		16,000,000
Borrowings on lines of credit and short-term debt, net of (repayments)		(24,750,000)		1,250,000
Treasury stock purchased		(847,818)		—
Cash dividend on common stock		(498,725)		(501,164)
Proceeds from capital raise, net of discounts and fees		21,231,333		—
Principal payments on long-term debt		(14,283,429)		(4,463,936)
Net cash (used in) provided by financing activities		(19,148,639)		12,284,900

Decrease in cash and cash equivalents		(2,130,959)		(2,999,803)
Cash and cash equivalents beginning of period		12,241,408		12,926,036
Cash and cash equivalents end of period	$	10,110,449	$	9,926,233

Supplemental schedule of noncash investing and financing activities:
Purchases of property & equipment under financing agreements	$	1,927,914	$	201,538
Net operating lease right-of-use assets received in exchange for operating lease liabilities	$	936,611	$	506,305
Common dividends declared but not paid	$	558,669	$	501,504
Common stock issued in Tribute Contracting & Consultants acquisition	$	—	$	2,000,000

Supplemental disclosures of cash flows information:
Cash paid during the year for:
Interest	$	1,498,051	$	1,232,072
Income taxes	$	405,263	$	1,170,000

The Accompanying Notes are an Integral Part of These Consolidated Financial Statements

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Energy Services of America Corporation

Consolidated Statements of Changes in Shareholders’ Equity

For the three and six months ended March 31, 2026 and 2025


										Total
	Common Stock			Additional Paid		Retained		Treasury		Shareholders’
	Shares	Amount		in Capital		Deficit		Stock		Equity
Balance at September 30, 2025	16,748,702	$	1,813	$	62,450,414	$	(3,216,291)	$	(143)	$	59,235,793

Net income	—		—		—		2,705,481		—		2,705,481

Restricted stock awards issued	11,251		—		100,004		—		—		100,004

Unearned share-based compensation	—		—		(100,004)		—		—		(100,004)

Dividends on common stock ($0.03 per share on 16,624,181 shares)	—		—		—		(498,725)		—		(498,725)

Shares repurchased	(105,955)		—		(846,519)		—		(11)		(846,530)

Balance at December 31, 2025	16,653,998	$	1,813	$	61,603,895	$	(1,009,535)	$	(154)	$	60,596,019

Net income	—		—		—		215,548		—		215,548

Restricted stock awards issued	8,343		—		75,000		—		—		75,000

Unearned share-based compensation	—		—		(75,000)		—		—		(75,000)

Shares repurchased as part of net settlement of restricted stock awards	(3,501)		—		(12,048)		—		—		(12,048)

Vested share compensation expense	—		—		58,680		—		—		58,680

Dividends on common stock ($0.03 per share on 18,622,287 shares)	—		—		—		(558,669)		—		(558,669)

Shares repurchased	(161)		—		(1,288)		—		—		(1,288)

Equity raise, net of fees and offering expenses	2,001,000		200		21,231,133		—		—		21,231,333

Balance at March 31, 2026	18,659,679	$	2,013	$	82,880,372	$	(1,352,656)	$	(154)	$	81,529,575

											Total
	Common Stock			Additional Paid		Retained		Treasury		Shareholders’
	Shares	Amount		in Capital		Deficit		Stock		Equity
Balance at September 30, 2024	16,570,685	$	1,790	$	60,282,921	$	(1,590,434)	$	(133)	$	58,694,144

Net income	—		—		—		853,733		—		853,733

Dividends on common stock ($0.03 per share on 16,705,457 shares)	—		—		—		(501,164)		—		(501,164)

Common shares issued as part of acquisition	134,772		13		1,999,987		—		—		2,000,000

Balance at December 31, 2024	16,705,457	$	1,803	$	62,282,908	$	(1,237,865)	$	(133)	$	61,046,713

Net loss	—		—		—		(6,798,418)		—		(6,798,418)

Dividends on common stock ($0.03 per share on 16,716,809 shares)	—		—		—		(501,504)		—		(501,504)

Vested restricted stock award	11,352		1		32,757		—		—		32,758

Balance at March 31, 2025	16,716,809	$	1,804	$	62,315,665	$	(8,537,787)	$	(133)	$	53,779,549

The Accompanying Notes are an Integral Part of These Consolidated Financial Statements

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ENERGY SERVICES OF AMERICA CORPORATION

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. BUSINESS AND ORGANIZATION

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

Segments

Energy Services’ reportable segments are: Underground Infrastructure Construction, Industrial Construction, and Building Construction.

Underground Infrastructure Construction primarily includes new construction and maintenance work in the following areas: water and wastewater pipelines, natural gas distribution pipelines, natural gas transmission pipelines, natural gas stations and ancillary facilities, corrosion protection services, and horizontal drilling services.

Industrial Constructions primarily includes new construction and maintenance work in the following areas: electrical, mechanical, HVAC/R, controls, and fire protection services in automotive, chemical, power, and manufacturing facilities.

Building Construction primarily includes new construction and rehabilitation activities in the following areas: school projects, local and state building projects, and small bridge projects. Most services performed by the legal entity in this segment are subcontracted both to outside contractors and internally to other legal entities within the Company. Services subcontracted internally are eliminated from segmented reporting.

Interim Financial Statements

The accompanying unaudited consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and should be read in conjunction with the Company’s audited consolidated financial statements and footnotes thereto for the years ended September 30, 2025, and 2024 included in the Company’s Annual Report on Form 10-K filed with the SEC on December 15, 2025. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been omitted pursuant to the interim financial reporting rules and regulations of the SEC. The financial statements reflect all adjustments (consisting primarily of normal recurring adjustments) that are, in the opinion of management, necessary for a fair presentation of the Company’s financial position and results of operations. The operating results for the three and six months ended March 31, 2026 and 2025 are not necessarily indicative of the results to be expected for the full year or any other interim period.

Principles of Consolidation

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

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Use of Estimates and Assumptions

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

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Please refer to Note 2 “Summary of Significant Accounting Policies” of the consolidated financial statements in our Annual Report on Form 10-K for the year ended September 30, 2025, for a more detailed discussion of our significant accounting policies. There were no material changes to these significant accounting policies during the six months ended March 31, 2026.

3. ACCOUNTING FOR PAYCHECK PROTECTION PROGRAM LOANS

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

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

During July 2023, management received notification from the SBA that two additional forgiveness applications related to the PPP Loans were under review. As part of the review, the SBA requested information regarding the ability of the Company’s affiliates to meet SBA size standards and/or PPP corporate maximum limits. The requested information was subsequently provided to the SBA through the Lender. As of March 31, 2026, there have been no further requests or communications from the SBA relating to the PPP Loans.

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

4. REVENUE RECOGNITION

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

●

Identify the contract

●

Identify performance obligations

●

Determine the transaction price

●

Allocate the transaction price

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●

Recognize revenue

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

●

the completeness and accuracy of the original bid;

●

costs associated with scope changes;

●

changes in costs of labor and/or materials;

●

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

●

subcontractor performance issues;

●

changes in productivity expectations;

●

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

●

changes from original design on design-build projects;

●

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

●

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

●

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

●

the customer’s ability to properly administer the contract.

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

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

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

5. SEGMENT INFORMATION

Energy Services’ operations are managed by senior executives who report to the Company’s President and CEO (the “President”), the chief operating decision maker. The President uses operating income for each of Energy Services’ reportable segments and considers forecast to actual variances to assess performance and when making decisions about allocating capital and other resources.

Energy Services’ reportable segments are: Underground Infrastructure Construction, Industrial Construction, and Building Construction.

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Energy Services’ segment results are derived from the types of services provided across its operating companies in each of its end-user markets. The Company’s business model allows multiple operating companies to serve the same or similar customers and to provide a range of services across end-user markets. Reportable segment information, including revenues and operating income by type of work, is gathered from each operating company. Classification of operating company revenues by type of work for segment reporting purposes can require judgment on the part of management. Segment operating expenses (excluding depreciation expense) primarily include cost of services, such as wages and benefits; subcontractor costs; materials; certain equipment rental and maintenance costs, and other direct and indirect project costs.

Separate measures of the Company’s assets and cash flows by reportable segment, including capital expenditures, are utilized by the President to evaluate segment performance since the Company’s fixed assets are not used on an interchangeable basis across its reportable segments.

Corporate and non-allocated costs include non-allocated corporate salaries, benefits and incentive compensation, acquisition and integration costs, non-cash stock-based compensation, investor relation expenses, and accounting review and audit fees.

The following tables show interim segment financial information for the three and six months ended and at March 31, 2026:


	Underground
	Infrastructure			Industrial			Building
Three Months Ended March 31, 2026	Construction			Construction			Construction			Total
Revenues	$	46,269,524		$	36,397,052		$	10,506,866		$	93,173,442
Segment direct operating expenses (excluding depreciation)		39,322,151			30,761,593			9,605,535			79,689,279
Direct depreciation expense		2,586,777			665,050			—			3,251,827
Segment gross profit		4,360,596			4,970,409			901,331			10,232,336
Segment gross profit percentage		9.4	%		13.7	%		8.6	%		11.0	%
Selling, general, and administrative expenses		5,153,550			1,031,731			1,085,811			7,271,092
Indirect depreciation expense		—			—			116,552			116,552
Intangible asset amortization expenses		229,683			54,720			—			284,403
Segment indirect operating expenses		5,383,233			1,086,451			1,202,363			7,672,047
Segment income from operations		(1,022,637)			3,883,958			(301,032)			2,560,289
Segment operating margin percentage		(2.2)	%		10.7	%		(2.9)	%		2.7	%
Corporate and non-allocated costs											1,498,199
Corporate depreciation expense											3,679
Total consolidated income from operations										$	1,058,411

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	Underground
	Infrastructure			Industrial			Building
Six Months Ended March 31, 2026	Construction			Construction			Construction			Total
Revenues	$	115,446,608		$	70,143,499		$	21,695,535		$	207,285,642
Segment direct operating expenses (excluding depreciation)		96,249,127			61,147,179			19,168,989			176,565,295
Direct depreciation expense		5,187,271			1,306,948			—			6,494,219
Segment gross profit		14,010,210			7,689,372			2,526,546			24,226,128
Segment gross profit percentage		12.1	%		11.0	%		11.6	%		11.7	%
Selling, general, and administrative expenses		9,950,564			2,135,677			2,101,481			14,187,722
Indirect depreciation expense		—			—			225,274			225,274
Intangible asset amortization expenses		580,905			109,440			—			690,345
Segment indirect operating expenses		10,531,469			2,245,117			2,326,755			15,103,341
Segment income from operations		3,478,741			5,444,255			199,791			9,122,787
Segment operating margin percentage		3.0	%		7.8	%		0.9	%		4.4	%
Corporate and non-allocated costs											3,146,338
Corporate depreciation expense											5,273
Total consolidated income from operations										$	5,971,176


At March 31, 2026
	Underground
	Infrastructure			Industrial	Building
Property, plant and equipment, at cost, less accumulated depreciation	Construction		Construction		Construction		Total
Segments	$	38,467,067	$	14,382,021	$	1,231,954	$	54,081,042
Corporate		—		—		—		95,128
Total	$	38,467,067	$	14,382,021	$	1,231,954	$	54,176,170

The following tables show interim segment financial information for the three and six months ended and at March 31, 2025:


	Underground
	Infrastructure			Industrial			Building
Three Months Ended March 31, 2025	Construction			Construction			Construction			Total
Revenues	$	32,544,499		$	32,694,332		$	11,440,320		$	76,679,151
Segment direct operating expenses (excluding depreciation)		34,472,373			29,345,599			9,852,195			73,670,167
Direct depreciation expense		2,299,065			632,059			—			2,931,124
Segment gross (loss) profit		(4,226,939)			2,716,674			1,588,125			77,860
Segment gross profit percentage		(13.0)	%		8.3	%		13.9	%		0.1	%
Selling, general, and administrative expenses		4,780,036			980,765			795,810			6,556,611
Indirect depreciation expense		—			—			84,953			84,953
Intangible asset amortization expenses		141,476			—			—			141,476
Segment indirect operating expenses		4,921,512			980,765			880,763			6,783,040
Segment (loss) income from operations		(9,148,451)			1,735,909			707,362			(6,705,180)
Segment operating margin percentage		(28.1)	%		5.3	%		6.2	%		(8.7)	%
Corporate and non-allocated costs											1,384,859
Corporate depreciation expense											2,188
Total consolidated (loss) income from operations										$	(8,092,227)

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	Underground
	Infrastructure			Industrial			Building
Six Months Ended March 31, 2025	Construction			Construction			Construction			Total
Revenues	$	85,364,645		$	68,090,845		$	23,869,775		$	177,325,265
Segment direct operating expenses (excluding depreciation)		79,518,142			61,216,519			20,833,716			161,568,377
Direct depreciation expense		4,141,479			1,273,967			—			5,415,446
Segment gross profit		1,705,024			5,600,359			3,036,059			10,341,442
Segment gross profit percentage		2.0	%		8.2	%		12.7	%		5.8	%
Selling, general, and administrative expenses		9,539,485			1,964,158			1,577,621			13,081,264
Indirect depreciation expense		—			—			167,439			167,439
Intangible asset amortization expenses		266,285			—			—			266,285
Segment indirect operating expenses		9,805,770			1,964,158			1,745,060			13,514,988
Segment (loss) income from operations		(8,100,746)			3,636,201			1,290,999			(3,173,546)
Segment operating margin percentage		(9.5)	%		5.3	%		5.4	%		(1.8)	%
Corporate and non-allocated costs											3,269,375
Corporate depreciation expense											3,345
Total consolidated (loss) income from operations										$	(6,446,266)


At March 31, 2025
	Underground
	Infrastructure			Industrial	Building
Property, plant and equipment, at cost, less accumulated depreciation	Construction		Construction		Construction		Total
Segments	$	36,867,738	$	14,406,528	$	1,006,618	$	52,280,884
Corporate		—		—		—		40,693
Total	$	36,867,738	$	14,406,528	$	1,006,618	$	52,321,577

6. DISAGGREGATION OF REVENUE

The Company disaggregates revenue based on the following lines of service: (1) Gas & Water Distribution, (2) Gas & Petroleum Transmission, and (3) Electrical, Mechanical, & General services and construction. Our contract types are: Lump Sum, Unit Price, Cost Plus and T&M. The following tables present our disaggregated revenue for the three and six months ended March 31, 2026 and 2025:


	Three Months Ended March 31, 2026
					Electrical,
	Gas & Water		Gas & Petroleum		Mechanical, &		Total revenue
	Distribution		Transmission		General		from contracts
Lump sum contracts	$	—	$	—	$	34,054,782	$	34,054,782
Unit price contracts		31,337,808		2,640,547		972,913		34,951,268
Cost plus and T&M contracts		—		8,382,045		15,785,347		24,167,392
Total revenue from contracts	$	31,337,808	$	11,022,592	$	50,813,042	$	93,173,442

Earned over time	$	10,528,750	$	2,640,547	$	39,470,809	$	52,640,106
Earned at point in time		20,809,058		8,382,045		11,342,233		40,533,336
Total revenue from contracts	$	31,337,808	$	11,022,592	$	50,813,042	$	93,173,442

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	Six Months Ended March 31, 2026
					Electrical,
	Gas & Water		Gas & Petroleum		Mechanical, &		Total revenue
	Distribution		Transmission		General		from contracts
Lump sum contracts	$	—	$	—	$	67,337,635	$	67,337,635
Unit price contracts		71,948,076		3,496,750		1,738,163		77,182,989
Cost plus and T&M contracts		—		31,652,066		31,112,952		62,765,018
Total revenue from contracts	$	71,948,076	$	35,148,816	$	100,188,750	$	207,285,642

Earned over time	$	33,206,006	$	3,496,750	$	75,141,720	$	111,844,476
Earned at point in time		38,742,070		31,652,066		25,047,030		95,441,166
Total revenue from contracts	$	71,948,076	$	35,148,816	$	100,188,750	$	207,285,642


	Three Months Ended March 31, 2025
					Electrical,
	Gas & Water		Gas & Petroleum		Mechanical, &		Total revenue
	Distribution		Transmission		General		from contracts
Lump sum contracts	$	—	$	—	$	34,195,376	$	34,195,376
Unit price contracts		27,101,115		3,116,781		970,926		31,188,822
Cost plus and T&M contracts		—		278,277		11,016,676		11,294,953
Total revenue from contracts	$	27,101,115	$	3,395,058	$	46,182,978	$	76,679,151

Earned over time	$	18,473,790	$	3,116,781	$	35,811,712	$	57,402,283
Earned at point in time		8,627,325		278,277		10,371,266		19,276,868
Total revenue from contracts	$	27,101,115	$	3,395,058	$	46,182,978	$	76,679,151


	Six Months Ended March 31, 2025
					Electrical,
	Gas &Water		Gas & Petroleum		Mechanical, &		Total revenue
	Distribution		Transmission		General		from contracts
Lump sum contracts	$	—	$	—	$	71,929,199	$	71,929,199
Unit price contracts		58,401,124		21,535,098		1,964,321		81,900,543
Cost plus and T&M contracts		—		316,177		23,179,346		23,495,523
Total revenue from contracts	$	58,401,124	$	21,851,275	$	97,072,866	$	177,325,265

Earned over time	$	37,960,995	$	21,535,098	$	74,493,813	$	133,989,906
Earned at point in time		20,440,129		316,177		22,579,053		43,335,359
Total revenue from contracts	$	58,401,124	$	21,851,275	$	97,072,866	$	177,325,265

The Company’s disaggregated revenue does vary slightly from the Company’s segment reporting due to combining the Industrial and Building Construction into Electrical, Mechanical, & and General, and one legal entity in the Underground Infrastructure Construction segment that performs services other than underground construction that are included in Electrical, Mechanical, & General. The volume of these services is not material to the Company’s segment reporting.

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7. CONTRACT BALANCES

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

During the three and six months ended March 31, 2026, we recognized revenue of $11.2 million and $25.9 million, respectively, that was included in the contract liability balance at September 30, 2025.

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


	March 31, 2026		September 30, 2025		Change
Accounts receivable-trade, net of allowance for credit losses	$	60,068,636	$	76,048,448	$	(15,979,812)

Contract assets
Cost and estimated earnings in excess of billings	$	26,773,714	$	34,455,011	$	(7,681,297)

Contract liabilities
Billings in excess of cost and estimated earnings	$	29,474,281	$	28,318,765	$	1,155,516

8. PERFORMANCE OBLIGATIONS

For the three and six months ended March 31, 2026, there was no significant revenue recognized as a result of changes in contract transaction price related to performance obligations that were satisfied prior to September 30, 2025. Changes in contract transaction price can result from items such as executed or estimated change orders, and unresolved contract modifications and claims.

At March 31, 2026, the Company had $256.6 million in remaining unsatisfied performance obligations, in which revenue is expected to be recognized over the next twelve months.

9. UNCOMPLETED CONTRACTS

Costs, estimated earnings, and billings on uncompleted contracts as of March 31, 2026 and September 30, 2025, are summarized as follows:


	March 31, 2026		September 30, 2025
Costs incurred on contracts in progress	$	478,785,961	$	471,208,654
Estimated earnings, net of estimated losses		80,553,250		71,159,322
		559,339,211		542,367,976
Less billings to date		562,039,778		536,231,730
	$	(2,700,567)	$	6,136,246

Costs and estimated earnings in excess of billed on uncompleted contracts	$	26,773,714	$	34,455,011

Less billings in excess of costs and estimated earnings on uncompleted contracts		29,474,281		28,318,765

	$	(2,700,567)	$	6,136,246

The Company’s unaudited backlog at March 31, 2026 and September 30, 2025 was $325.1 million and $259.7 million, respectively.

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10. FAIR VALUE MEASUREMENTS

The fair value measurement guidance of the Financial Accounting Standards Board (“FASB”) ASC 820, Fair Measurement defines fair value, establishes a framework for measuring fair value in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and specifies disclosures about fair value measurements.

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

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

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

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

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

The carrying amount for borrowings under the Company’s revolving credit facility approximates fair value because of the variable market interest rate charged to the Company for these borrowings. The fair value of the Company’s long term fixed-rate debt was estimated using a discounted cash flow analysis and a yield rate that was estimated based on the borrowing rates currently available to the Company for bank loans with similar terms and maturities. The fair value of the aggregate principal amount of the Company’s fixed-rate debt of $31.4 million at March 31, 2026 was $31.1 million. The fair value of the aggregate principal amount of the Company’s fixed-rate debt of $43.8 million at September 30, 2025 was $42.8 million.

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

11. EARNINGS PER SHARE

The amounts used to compute the earnings per share for the three and six months ended March 31, 2026 and 2025 are summarized below.


	Three Months Ended		Three Months Ended		Six Months Ended		Six Months Ended
	March 31, 2026		March 31, 2025		March 31, 2026		March 31, 2025
Net income (loss)	$	215,548	$	(6,798,418)	$	2,921,029	$	(5,944,685)

Weighted average shares outstanding-basic		17,526,126		16,716,809		17,110,381		16,630,245

Weighted average shares outstanding-diluted		17,568,110		16,716,809		17,150,954		16,630,245

Earnings (loss) per share available to common shareholders	$	0.01	$	(0.41)	$	0.17	$	(0.36)

Earnings (loss) per share-diluted available to common shareholders	$	0.01	$	(0.41)	$	0.17	$	(0.36)

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12. INCOME TAXES

The components of income taxes are as follows:


	Three Months Ended				Six Months Ended
	March 31, 2026		March 31, 2025		March 31, 2026		March 31, 2025
Federal
Current	$	(45,145)	$	—	$	42,631	$	—
Deferred		179,669		(1,687,935)		929,877		(1,392,961)
Total		134,524		(1,687,935)		972,508		(1,392,961)

State
Current		57,888		11,317		125,214		89,175
Deferred		4,385		(530,117)		232,623		(446,919)
Total		62,273		(518,800)		357,837		(357,744)
Total income tax expense	$	196,797	$	(2,206,735)	$	1,330,345	$	(1,750,705)

The Company’s income tax expense and deferred tax assets and liabilities reflect management’s best estimate of current and future taxes to be paid. Significant judgments and estimates are required in the determination of the consolidated income tax expense. The Company’s provision for income taxes is computed by applying a federal rate of 21.0% and a blended state rate of approximately 5.0% to 6.0% to taxable income or loss after consideration of non-taxable and non-deductible items.

The effective income tax rate for the three months ended March 31, 2026 was 47.7%, as compared to 24.5%, for the same period in 2025. The effective income tax rate for the six months ended March 31, 2026 was 31.3%, as compared to 22.8%, for the same period in 2025. Effective income tax rates are estimates and may vary from period to period due to changes in the amount of taxable income and non-deductible expenses.

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

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


	March 31, 2026		September 30, 2025
Deferred tax liabilities
Property and equipment	$	10,537,214	$	10,057,004
Other		1,454,053		1,483,362
Total deferred tax liabilities	$	11,991,267	$	11,540,366

Deferred income tax assets
Accruals & Other	$	2,691,302	$	3,215,102
Net operating loss carryforward-Federal		1,280,607		1,451,126
Net operating loss carryforward-States		807,260		824,539
Net operating loss valuation allowance-States		(703,928)		(703,928)
Total deferred tax assets	$	4,075,241	$	4,786,839

Total net deferred tax liabilities	$	7,916,026	$	6,753,527

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

The Company had $6.1 million and $6.9 million of federal net operating loss carryforwards at March 31, 2026 and September 30, 2025, respectively. The Company had $35.1 million and $41.9 million of state net operating loss carryforwards at March 31, 2026 and September 30, 2025, respectively. The state net operating loss carryforwards begin to expire in 2026.

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

13. SHORT-TERM AND LONG-TERM DEBT

Operating Line of Credit

In July 2025, the Company renewed its $30.0 million line of credit with a maturity date of June 28, 2027. The interest rate on the line of credit is the “Wall Street Journal” Prime Rate (the index) with a floor of 4.99%.

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


	March 31, 2026			September 30, 2025
Eligible borrowing base	$	18,196,189		$	27,657,997

Borrowings on line of credit		—			24,750,000

Line of credit balance available	$	18,196,189		$	2,907,997

Interest rate		6.75	%		7.50	%

The Company did not have any line of credit borrowings at March 31, 2026. The Company’s $24.8 million line of credit borrowings are recorded as a long-term debt as of September 30, 2025.

The financial covenants required by the Company’s lender are below:

●

Minimum tangible net worth of $28.0 million,

●

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

●

Minimum current ratio of 1.20x,

●

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

●

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

●

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

The Company’s lender has agreed to omit the effect of the PPP loan restatement from the Company’s covenant compliance calculations while a final decision on PPP loan forgiveness remains in question. The Company was in compliance with all covenants at March 31, 2026. The Company is projected to meet all covenant requirements for the next twelve months.

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Paycheck Protection Program Loans

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

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

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

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A summary of short-term and long-term debt as of March 31, 2026 and September 30, 2025 is as follows:


	March 31, 2026		September 30, 2025
Line of credit payable to bank, monthly interest at 6.75%, final payment due by June 28, 2027, guaranteed by certain directors of the Company.	$	—	$	24,750,000

Equipment line of credit with a total of $9.3 million with payments of $202,809 due in monthly installments, including fixed interest at 7.25% and final payment due February 2028, secured by equipment, guaranteed by certain directors of the Company.		4,860,476		5,878,041

Paycheck Protection Program loans from Small Business Administration, 1.0% simple interest, initially forgiven in the fiscal year ended September 30, 2021. Final forgiveness decision has not been determined.		10,450,998		10,401,366

Term note payable to United Bank, WV Pipeline acquisition, due in monthly installments of $64,853, including fixed interest at 4.25%, final payment due by March 25, 2026, secured by receivables and equipment, guaranteed by certain directors of the Company.		—		390,328

Notes payable to finance companies, due in monthly installments totaling $281,000 at March 31, 2026 and $244,000 at September 30, 2025, including interest ranging from 0.00% to 6.0%, final payments due April 2026 through February 2030, secured by equipment.		5,855,044		5,415,401

Notes payable to United Bank, Tribute acquisition finance, due in monthly installments totaling $272,016, including fixed interest at 6.9%, final payment due December 2030 secured by receivables and equipment, guaranteed by certain directors of the Company.		8,237,000		14,164,413

Notes payable to bank, due in monthly installments totaling $7,848, including interest at 4.82%, final payment due November 2034 secured by building and property.		682,624		710,466

Notes payable to bank, due in monthly installments totaling $59,932, including fixed interest at 6.0%, final payment due October 2027 secured by receivables and equipment, guaranteed by certain directors of the Company.		—		1,411,890

Equipment line of credit with a total of $5.0 million borrowings available, including fixed interest at 8.5% for purchases made in the first twelve months. After twelve months the borrowings will be converted to a forty-eight month term note agreement with a fixed interest rate equal to the “U.S. Treasury Rate” plus 2.75% per annum. Final payment due August 2029. The agreement is guaranteed by certain directors of the Company.		4,351,188		4,910,097

Unsecured notes payable to Joe and Cathy Rigney, five-year agreement for monthly fixed interest at 5.0% of sellers’ notes, with $500,000 due September 30, 2030. $462,950,000 fair value at September 30, 2025.		464,900		461,000

Notes payable to David Bolton and Daniel Bolton, due in annual installments totaling $500,000, including interest at 3.25%, final payment due December 31, 2025, unsecured.		—		500,000

Note payable to United Bank, Tri-State Paving acquisition, due in monthly installments of $129,910, including fixed interest at 4.50%, final payment due by June 1, 2027, secured by receivables and equipment, guaranteed by certain directors of the Company.		—		2,961,211

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

Total debt	$	35,152,230	$	72,204,213

Less current maturities		19,740,544		21,948,182

Total long-term debt	$	15,411,686	$	50,256,031

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14. ACQUISITIONS

Energy Services accounts for business combinations under the acquisition method in accordance with ASC Topic 805 “Business Combinations”. Accordingly, for the transaction, the purchase price is allocated to the fair value of the assets acquired and liabilities assumed as of the date of the acquisition. In conjunction with ASC 805, upon receipt of final fair value estimates during the measurement period, which must be within one year of the acquisition date, Energy Services records any adjustments to the preliminary fair value estimates in the reporting period in which the adjustments are determined.

On December 2, 2024, the Company completed the acquisition of substantially all the physical assets of Tribute Contracting & Consultants, LLC (“Tribute LLC”), an Ohio corporation located in South Point, Ohio for $21.2 million cash and $2.0 million in the Company’s common stock. ASC 805-10-50-2 requires public companies that present comparative financial statements to present pro forma financial statements as though the business combination that occurred during the current fiscal year had occurred as of the beginning of the comparable prior annual reporting period. As allowed under ASC 805-10-50-2, the Company finds this information impracticable to provide for the periods presented due to the lack of availability of meaningful financial statements of the acquired companies that comply with U.S. GAAP.

The Tribute LLC acquisition purchase price is allocated in the table below:


Considerations
Cash	$	21,158,981
Common stock issued		2,000,000
Total consideration		23,158,981
Assets acquired
Property and equipment		15,034,900
Accounts Receivable and Retainages acquired from seller		8,360,373
Contract assets acquired from seller		1,715,984
Receivable for cash due to buyer		1,708,846
Intangible assets		1,930,000
Total assets acquired		28,750,103
Liabilities assumed
Accounts payable assumed		(3,476,871)
Long-term debt assumed		(3,789,962)
Contract liabilities assumed		(681,013)
Total liabilities assumed		(7,947,846)
Net assets acquired		20,802,257
Goodwill recognized	$	2,356,724

On September 30, 2025, the Company completed the acquisition of substantially all the physical assets of Rigney Digital Systems Ltd. (“Rigney Digital”), a West Virginia corporation located in Hurricane, West Virginia for $3.0 million cash, $1.0 million in the Company’s common stock, and a five-year $500,000 sellers’ note. ASC 805-10-50-2 requires public companies that present comparative financial statements to present pro forma financial statements as though the business combination that occurred during the current fiscal year had occurred as of the beginning of the comparable prior annual reporting period. As allowed under ASC 805-10-50-2, the Company finds this information impracticable to provide for the periods presented due to the lack of availability of meaningful financial statements of the acquired companies that comply with U.S. GAAP.

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The Rigney Digital acquisition purchase price is allocated in the table below:


Considerations
Cash	$	3,000,000
Common stock issued		1,000,000
Sellers’ note		500,000
Total consideration		4,500,000
Assets acquired
Property and equipment		130,865
Accounts Receivable acquired from seller		84,194
Intangible assets		964,000
Total assets acquired		1,179,059
Liabilities assumed
Long-term debt assumed		(100,585)
Total liabilities assumed		(100,585)
Net assets acquired		1,078,474
Goodwill recognized	$	3,421,526

15. GOODWILL AND INTANGIBLE ASSETS

The Company follows the guidance of ASC Topic 350, Intangibles-Goodwill and Other, which requires a company to record an impairment charge based on the excess of a reporting unit’s carrying amount of goodwill over its fair value. Under the current guidance, companies can first choose to assess any impairment based on qualitative factors (Step 0). If a company fails this test or decides to bypass this step, it must proceed with a quantitative assessment of goodwill impairment. The Company did not have a goodwill impairment at March 31, 2026 or September 30, 2025.

A table of the Company’s goodwill as of March 31, 2026 and September 30, 2025 is below:



	March 31, 2026		September 30, 2025
Beginning balance	$	9,865,804	$	4,087,554
Acquired		—		5,778,250
Ending balance	$	9,865,804	$	9,865,804

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A table of the Company’s intangible assets subject to amortization at March 31, 2026 and September 30, 2025 is below:


				Accumulated		Accumulated		Amortization		Amortization		Amortization		Amortization
	Remaining Life			Amortization and		Amortization and		and Impairment		and Impairment		and Impairment		and Impairment
	(in months) at			Impairment at		Impairment at		Three Months		Three Months		Six Months		Six Months		Net Book Value		Net Book Value
	March 31,			March 31,		September 30,		Ended March 31,		Ended March 31,		Ended March 31,		Ended March 31,		at March 31,		at September 30,
	2026	Original Cost		2026		2025		2026		2025		2026		2025		2026		2025
Intangible assets:
West Virginia Pipeline:
Customer relationships	57	$	2,209,724		1,160,100	$	1,049,610		55,245		55,245		110,490		110,490	$	1,049,624	$	1,160,114
Tradename	57		263,584		138,391		125,215		6,588		6,588		13,176		13,176		125,193		138,369
Non-competes	—		83,203		83,203		83,203		—		—		—		—		—		—

Heritage Painting
Customer relationships	39		121,100		42,378		30,270		6,054		6,054		12,108		12,108		78,722		90,830

Tri-State Paving:
Customer relationships	73		1,649,159		645,921		563,463		41,229		41,229		82,458		82,458		1,003,238		1,085,696
Tradename	73		203,213		79,592		69,431		5,081		5,080		10,161		10,160		123,621		133,782
Non-competes	—		39,960		39,960		39,960		—		—		—		—		—		—

Tribute Contracting & Consultants
Non-compete 1	104		520,000		69,331		43,333		12,999		12,501		25,998		16,668		450,669		476,667
Non-compete 2	80		10,000		1,666		1,042		312		—		624		—		8,334		8,958
Tradename	44		80,000		21,331		13,333		3,999		37,500		7,998		50,000		58,669		66,667
Backlog	8		1,320,000		880,000		550,000		104,230		—		330,000		—		440,000		770,000

Rigney Digital Systems
Tradename	126		657,100		29,868		—		14,934		—		29,868		—		627,232		657,100
Backlog	18		260,600		65,148		—		32,574		—		65,148		—		195,452		260,600
Non-compete	114		46,300		2,316		—		1,158		—		2,316		—		43,984		46,300

Total intangible assets		$	7,463,943	$	3,259,205	$	2,568,860	$	284,403	$	164,197	$	690,345	$	295,060	$	4,204,738	$	4,895,083

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


April 2026 to March 2027	$	1,160,684
April 2027 to March 2028		655,544
April 2028 to March 2029		590,388
April 2029 to March 2030		566,883
April 2030 to March 2031		488,381
After		742,858
Total	$	4,204,738

The weighted-average amortization period by major intangible asset class and in total are as follows:


Intangible asset class		Remaining Years
Customer relationships		5.3
Tradename		8.7
Non-competes		8.7
Backlog		0.9
All intangible assets		5.8

16. LEASE OBLIGATIONS

The Company leases office space for SQP at a rate of $1,500 per month. The lease, originally executed on March 25, 2021, has a two-year base term with five one-year renewal options available following expiration of the base term. As of March 31, 2026, the Company has committed to a one-year renewal period and is evaluating the exercise of additional renewal options.

The Company has two right-of-use operating leases acquired on April 29, 2022, as part of the Tri-State Paving, LLC acquisition. The first lease, for the Hurricane, West Virginia facility, had a net present value of $236,000 at inception and a carrying value of $0 at March 31, 2026. The lease bears interest at 4.5%, based on the Company’s incremental borrowing rate at inception. The Company executed an amendment to extend the lease for one additional year following the expiration of the original term. As of March 31, 2026, the Company has committed to one renewal period and is evaluating additional renewals.

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The second lease, for the Chattanooga, Tennessee facility, had a net present value of $144,000 at inception and expired on August 31, 2024. The lease was renewed for a two - year term with a net present value of $140,000 and had a carrying value of $17,000 at March 31, 2026. The lease bears interest at 8.5%, based on the Company’s incremental borrowing rate at inception.

The Company has a right-of-use operating lease with Enterprise Fleet Management, acquired on August 11, 2022, as part of the Ryan Environmental acquisition. The master lease initially covered 31 vehicles with a net present value of $1.2 million. The Company subsequently added 58 additional vehicles under the arrangement. The lease had a carrying value of $1.8 million at March 31, 2026. Each vehicle under the master lease arrangement carries its own implicit rate.

The Company has a right-of-use operating lease acquired on March 28, 2023 for the Winchester, Kentucky facility. The lease had a net present value of $290,000 at inception and a carrying value of $0 at March 31, 2026. The lease bears interest at 7.5%, based on the Company’s incremental borrowing rate at inception. The lease was renewed for a three-year term in April 2026.

The Company has a right-of-use operating lease acquired on December 1, 2025 for the Columbus, Ohio facility. The lease had a net present value of $255,000 at inception and a carrying value of $236,000 at March 31, 2026. The lease bears interest at 6.75%, based on the Company’s incremental borrowing rate at inception.

The Company has a right-of-use operating lease acquired on January 1, 2026 for the Oklahoma City, Oklahoma facility. The lease had a net present value of $208,000 at inception and a carrying value of $186,000 at March 31, 2026. The lease bears interest at 6.75%, based on the Company’s incremental borrowing rate at inception.

The Company also has a right-of-use operating lease acquired on January 1, 2026 for the Louisville, Kentucky facility. The lease had a net present value of $128,000 at inception and a carrying value of $128,000 at March 31, 2026. The lease bears interest at 6.75%, based on the Company’s incremental borrowing rate at inception. Lease payments do not commence until April 1, 2026.

Schedules related to the Company’s operating leases for the three and six months ended March 31, 2026 and 2025 and at March 31, 2026 can be found below:

Operating Lease-Weighted Average Remaining Term


		Remaining
	Years left	liability			Lease end	Fiscal year end
Operating lease 1	0.0	$	—		3/31/2025	2025
Operating lease 2	0.4		16,989		8/31/2026	2026
Operating lease 3	4.0		1,817,835		3/31/2030	2030
Operating lease 4	0.0		—		3/31/2026	2026
Operating lease 5	2.7		236,029		11/30/2028	2029
Operating lease 6	2.8		186,330		12/31/2028	2029
Operating lease 7	2.8		128,255		12/31/2028	2029
		$	2,385,438


Weighted average remaining term			3.1	years


Operating Lease Maturity Schedule
April 2026 to March 2027	$	1,464,340
April 2027 to March 2028		785,969
April 2028 to March 2029		466,207
April 2029 to March 2030		129,274
		2,845,790
Less amounts representing interest		(460,352)
Present value of operating lease liabilities	$	2,385,438

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	Three Months Ended		Three Months Ended		Six Months Ended		Six Months Ended
	March 31,		March 31,		March 31,		March 31,
Operating Lease Expense	2026		2025		2026		2025
Amortization
Operating lease 1	$	—	$	18,257	$	—	$	38,948
Operating lease 2		14,950		17,581		33,148		34,794
Operating lease 3		239,952		215,566		477,202		410,736
Operating lease 4		17,349		24,967		44,467		49,469
Operating lease 5		15,317		—		21,471		—
Operating lease 6		18,527		—		18,527		—
Operating lease 7		—		—		—		—
Total amortization		306,095		276,371		594,815		533,947

Interest
Operating lease 1	$	—	$	236	$	—	$	545
Operating lease 2		709		2,219		1,769		4,806
Operating lease 3		37,313		54,787		79,969		118,509
Operating lease 4		502		1,988		1,014		4,441
Operating lease 5		1,888		—		3,329		—
Operating lease 6		5,413		—		5,413		—
Operating lease 7		—		—		—		—
Total interest		45,825		59,230		91,494		128,301
Total amortization and interest	$	351,920	$	335,601	$	686,309	$	662,248


	Three Months Ended		Three Months Ended		Six Months Ended		Six Months Ended
	March 31,		March 31,		March 31,		March 31,
Cash Paid for Operating Leases	2026		2025		2026		2025
Operating lease 1	$	—	$	18,493	$	—	$	39,493
Operating lease 2		15,659		19,800		34,917		39,600
Operating lease 3		277,265		270,353		557,171		529,245
Operating lease 4		17,851		26,955		45,481		53,910
Operating lease 5		17,205		—		24,800		—
Operating lease 6		23,940		—		23,940		—
Operating lease 7		—		—		—		—
	$	351,920	$	335,601	$	686,309	$	662,248

The Company rents equipment for use on construction projects with rental agreements week to week or month to month. Rental expense can vary by fiscal year due to equipment requirements on construction projects and the availability of Company owned equipment. Rental expenses, which is included in cost of goods sold on the consolidated statements of income, were $4.8 million and $3.9 million for the three months ended March 31, 2026, and 2025, respectively, and $11.8 million and $9.0 million for the six months ended March 31, 2026 and 2025, respectively.

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17. SHARE-BASED COMPENSATION

The Company has a stock-based compensation plan, under which restricted stock awards are available for issuance to eligible participants. Non-cash stock-based compensation expense is included within general and administrative expense in the consolidated financial statements. Share-based payments are recognized based on their grant date fair values. Forfeitures are recorded as they occur.

Grants of restricted stock awards are valued based on the closing market share price of the Company’s common stock as reported on the Nasdaq Stock Market, LLC (the “market price”) on the date of grant. Non-cash-based compensation expense arising from restricted shares is recognized on a straight-line basis over the vesting period. Grants of restricted shares generally vest one-third annually over a period of three years.

Some participants may choose the net share settlement method to cover withholding tax requirements, in which case shares withheld for taxes are not issued, but are treated as common stock repurchases in the consolidated financial statements, as they reduce the number of shares that would have been issued upon vesting. The Company then pays the corresponding withholding taxes to the appropriate taxing authorities in cash on behalf of the recipient. Withheld shares, which are valued at the market price on the date of grant, are recorded as a reduction to additional paid-in capital, and related payments to taxing authorities are reflected within financing activities in the consolidated statements of cash flows.

For the three and six months ended March 31, 2026, the Company granted 8,343 and 19,594 shares, respectively, related to restricted stock awards. The Company granted 3,970 shares related to restricted stock awards for the three and six months ended March 31, 2025.

The table below represents all unvested restricted stock awards at March 31, 2026:


							Vesting (1/3 Annual)		at March 31, 2026
	Grant Date	Shares Granted	Grant Price		Grant Value		Beginning	Ending	Unvested Shares	Unvested Value
Award 1	2/15/2023	40,000	$	2.65	$	106,000	2/15/2024	2/15/2026	—	$	—
Award 2	1/17/2024	3,663		5.46		20,000	1/17/2025	1/17/2027	1,221		6,667
Award 3	6/20/2024	6,684		7.48		50,000	6/20/2025	6/20/2027	4,456		33,333
Award 4	8/21/2024	10,153		9.85		100,007	8/21/2025	8/21/2027	6,768		66,665
Award 5	8/21/2024	4,061		9.85		40,001	8/21/2025	8/21/2027	2,707		26,664
Award 6	1/15/2025	1,985		12.60		25,011	1/15/2026	1/15/2028	1,323		16,670
Award 7	1/15/2025	1,985		12.60		25,011	1/15/2026	1/15/2028	1,323		16,670
Award 8	11/18/2025	5,291		9.45		50,000	11/18/2026	11/18/2028	5,291		50,000
Award 9	12/17/2025	2,980		8.39		25,002	12/17/2026	12/17/2028	2,980		25,002
Award 10	12/17/2025	2,980		8.39		25,002	12/17/2026	12/17/2028	2,980		25,002
Award 11	1/21/2026	2,781		8.99		25,001	1/21/2027	1/21/2029	2,781		25,001
Award 12	1/21/2026	2,781		8.99		25,001	1/21/2027	1/21/2029	2,781		25,001
Award 13	1/21/2026	2,781		8.99		25,001	1/21/2027	1/21/2029	2,781		25,001
		88,125			$	541,037			37,392	$	341,676

Weighted average grant-date fair value			$	6.14

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The table below represents all restricted stock awards to Named Executive Officers as of March 31, 2026:


							Vesting (1/3 Annual)		at March 31, 2026
	Grant Date	Shares Granted	Grant Price		Grant Value		Beginning	Ending	Unvested Shares	Unvested Value
Douglas Reynolds	2/15/2023	40,000	$	2.65	$	106,000	2/15/2024	2/15/2026	—	$	—
Charles Crimmel	1/17/2024	3,663		5.46		20,000	1/17/2025	1/17/2027	1,221		6,667
Douglas Reynolds	8/21/2024	4,061		9.85		40,001	8/21/2025	8/21/2027	2,707		26,664
Charles Crimmel	1/15/2025	1,985		12.60		25,011	1/15/2026	1/15/2028	1,323		16,670
Charles Crimmel	1/21/2026	2,781		8.99		25,001	1/21/2027	1/21/2029	2,781		25,001
		52,490			$	216,013			8,032		75,002

Weighted average grant-date fair value			$	4.12

The table below represents the total unvested restricted stock awards and grant amounts that will vest in future periods at March 31, 2026:


	Grant Vesting	Grant Amount
April 2026-March 2027	16,044	$	145,037
April 2027-March 2028	14,818		138,318
April 2028-March 2029	6,530		58,321
	37,392	$	341,676

The table below represents the total unrecognized compensation expense for unvested restricted stock awards to be expensed in future periods at March 31, 2026:


April 2026-March 2027	$	143,067
April 2027-March 2028		93,405
April 2028-March 2029		42,015
	$	243,671

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18. EQUITY RAISE

On February 18, 2026, The Company entered into an underwriting agreement (the “Underwriting Agreement”) with Lake Street Capital Markets, LLC (the “Underwriter”). Pursuant to the terms of the Underwriting Agreement, the Company agreed to issue and sell, and the Underwriter agreed to purchase, subject to and on the conditions set forth therein, 1,740,000 shares of the Company’s common stock, par value $0.0001 per share (“Common Stock”), in a registered public offering pursuant to an effective shelf registration statement on Form S-3 (File No. 333-280025) and a related prospectus, including the related prospectus supplement, filed with the Securities and Exchange Commission (the “Offering”). Under the terms of the Underwriting Agreement, the Company granted the Underwriter a 30-day option to purchase up to an additional 261,000 shares of Common Stock.

The Offering closed on February 20, 2026, with the Underwriter purchasing 1,740,000 shares of the Company’s Common Stock at the public offering price of $11.50 per share. Net proceeds from the Offering to the Company were approximately $18.4 million, after deducting underwriting discounts and commissions and estimated offering expenses.

On February 24, 2026, the Underwriter exercised its overallotment option and completed the sale of an additional 261,000 shares of common stock at the public offering price of $11.50 per share. The proceeds to the Company in connection with the exercise of the option and the issuance of the additional shares, after deducting the underwriting discount and commissions but before deducting other expenses payable by the Company, were approximately $2.8 million.

19. SUBSEQUENT EVENTS

On April 15, 2026, the Company paid a quarterly dividend of $0.03 per common share to shareholders of record as of March 31, 2026.

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

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

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

Forward Looking Statements

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

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

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

Company Overview

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

The Company had consolidated operating revenues of $93.2 million for the three months ended March 31, 2026, of which 54.6% was attributable to electrical, mechanical, and general contract services, 11.8% to gas and petroleum transmission projects, and 33.6% to gas & water distributions services. The Company had consolidated operating revenues of $76.7 million for the three months ended March 31, 2025, of which 60.3% was attributable to electrical, mechanical, and general contract services, 4.4% to gas and petroleum transmission projects, and 35.3% to gas & water distributions services.

The Company had consolidated operating revenues of $207.3 million for the six months ended March 31, 2026, of which 48.3% was attributable to electrical, mechanical, and general contract services, 17.0% to gas and petroleum transmission projects, and 34.7% to gas & water distributions services. The Company had consolidated operating revenues of $177.3 million for the six months ended March 31, 2025, of which 54.8% was attributable to electrical, mechanical, and general contract services, 12.3% to gas and petroleum transmission projects, and 32.9% to gas & water distributions services.

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

TransCanada Corporation

NiSource, Inc.

Marathon Petroleum

Mountaineer Gas

Nucor Steel West Virginia

American Electric Power

Toyota Motor Manufacturing

Bayer Chemical

Dow Chemical

Kentucky American Water

WV American Water

Various state, county, and municipal public service districts.

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

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

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

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

Nitro Construction Services, Inc. (“NCS”), a wholly owned subsidiary of C.J. Hughes, provides electrical, mechanical, HVAC/R, and fire protection services to customers primarily in the automotive, chemical, and power industries. Nitro Electric Company, LLC (“Nitro Electric”), a wholly owned subsidiary of NCS, performs industrial electrical work and has a satellite office registered in Michigan. Pinnacle Technical Solutions, Inc. (“Pinnacle”), a wholly owned subsidiary of NCS, operates as a data storage facility within Nitro’s office building. Pinnacle is supported by NCS and has no employees of its own. NCS and its subsidiaries will collectively be referred to “Nitro”. Revolt Energy, LLC (“Revolt”), formerly a wholly owned subsidiary of NCS, that performed residential solar installations projects, was sold for a nominal consideration on March 1, 2025 in a transaction that was not material to the Company’s Consolidated Financial Statements. On September 30, 2025, Nitro completed the asset acquisition of Rigney Digital System Ltd. (“Rigney”), an HVAC/R controls company located in Hurricane, WV, which operates as a division of Nitro.

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

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

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

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

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

Tribute Contracting & Consultants, Inc. (“Tribute” or “TCC”), a wholly owned subsidiary of Energy Services, was formed in October 2024 in connection with the acquisition of substantially all the assets of Tribute Contracting & Consultants, LLC (“Tribute LLC”). Tribute constructs water distribution and wastewater systems primarily for public municipalities in West Virginia, Ohio, and Kentucky. The employees of TCC are non-union and are managed independently of the Company’s union subsidiaries.

The Company’s website address is www.energyservicesofamerica.com. Information on our website is not part of this Quarterly Report on Form 10-Q unless otherwise stated.

The Securities and Exchange Commission (the “SEC”) maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information regarding the Company. The Company makes available free of charge through its website its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to those reports filed with the SEC pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934. These items are available as soon as reasonably practicable after we electronically file or furnish such material with the SEC. These materials are also available free of charge by written request to: Charles Crimmel, Chief Financial Officer and Corporate Secretary, Energy Services of America Corporation, 75 West 3^rd Ave., Huntington, West Virginia 25701.

Seasonality: Fluctuation of Results

Our revenues and results of operations can and usually are subject to seasonal variations. These variations are the result of weather, customer spending patterns, bidding seasons and holidays. The first quarter of the calendar year is typically the slowest in terms of revenues because inclement weather conditions cause delays in production and customers usually do not plan large projects during that time. While usually better than the first quarter, the second calendar year quarter often has some inclement weather which can cause delays in production, reducing the revenues the Company receives and/or increasing the production costs. The third and fourth calendar year quarters usually are less impacted by weather and usually have the largest number of projects underway. Many projects are completed in the fourth calendar year quarter and revenues are often impacted by customers seeking to either spend their capital budget for the year or scale back projects due to capital budget overruns.

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

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Three and six months ended March 31, 2026 and 2025 Overview

The following is an overview of results from operations for the three and six months ended March 31, 2026 and 2025:


	Three Months Ended		Three Months Ended		Six Months Ended		Six Months Ended
	March 31,		March 31,		March 31,		March 31,
	2026		2025		2026		2025
Revenue	$	93,173,442	$	76,679,151	$	207,285,642	$	177,325,265

Cost of revenue		82,941,106		76,601,291		183,059,514		166,983,823

Gross profit		10,232,336		77,860		24,226,128		10,341,442

Selling and administrative expenses		9,173,925		8,170,087		18,254,952		16,787,708
Income (loss) from operations		1,058,411		(8,092,227)		5,971,176		(6,446,266)

Other (expense) income
Other nonoperating expense		(94,224)		(20,616)		(196,865)		(68,878)
Interest expense		(621,835)		(875,770)		(1,611,686)		(1,359,488)
Gain on sale of equipment		69,993		(16,540)		88,749		179,242
		(646,066)		(912,926)		(1,719,802)		(1,249,124)

Income (loss) before income taxes		412,345		(9,005,153)		4,251,374		(7,695,390)

Income tax expense (benefit)		196,797		(2,206,735)		1,330,345		(1,750,705)

Net income (loss)		215,548		(6,798,418)		2,921,029		(5,944,685)

Results of Operations for the Three and Six Months Ended March 31, 2026 Compared to the Three and Six Months Ended March 31, 2025

Revenues. The following table compares the Company’s revenues for the three and six months ended March 31, 2026 to the corresponding periods in 2025:


	Three Months Ended
	March 31, 2026		% of total		March 31, 2025		% of total		Change		% Change
Gas & Water Distribution	$	31,337,808	33.6	%	$	27,101,115	35.3	%		4,236,693	15.6	%
Gas & Petroleum Transmission		11,022,592	11.8	%		3,395,058	4.4	%		7,627,534	224.7	%
Electrical, Mechanical, & General		50,813,042	54.6	%		46,182,978	60.3	%		4,630,064	10.0	%
Total	$	93,173,442	100.0	%	$	76,679,151	100.0	%		16,494,291	21.5	%

	Six Months Ended
	March 31, 2026		% of total		March 31, 2025		% of total		Change		% Change
Gas & Water Distribution	$	71,948,076	34.7	%	$	58,401,124	32.9	%	$	13,546,952	23.2	%
Gas & Petroleum Transmission		35,148,816	17.0	%		21,851,275	12.3	%		13,297,541	60.9	%
Electrical, Mechanical, & General		100,188,750	48.3	%		97,072,866	54.8	%		3,115,884	3.2	%
Total	$	207,285,642	100.0	%	$	177,325,265	100.0	%	$	29,960,377	16.9	%

Total revenues increased by $16.5 million to $93.2 million for the three months ended March 31, 2026, compared to $76.7 million for the three months ended March 31, 2025. For the six months ended March 31, 2026, total revenues increased by $30.0 million to $207.3 million, compared to $177.3 million for the same period in 2025. These increases were driven by higher revenues across all business lines during the three- and six-month periods ended March 31, 2026, compared to the corresponding periods in 2025.

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Gas & Water Distribution revenues were $31.3 million for the three months ended March 31, 2026, an increase of $4.2 million from $27.1 million for the three months ended March 31, 2025. For the six months ended March 31, 2026, revenues were $71.9 million, an increase of $13.5 million from $58.4 million for the same period in 2025. These increases were primarily attributable to higher levels of water distribution services performed during the 2026 periods.

Gas & Petroleum Transmission revenues were $11.0 million for the three months ended March 31, 2026, an increase of $7.6 million from $3.4 million for the three months ended March 31, 2025. For the six months ended March 31, 2026, revenues were $35.1 million, an increase of $13.3 million from $21.9 million for the same period in 2025. These increases were primarily due to new transmission projects awarded in the first quarter of fiscal 2026, as well as the timing of project execution, with most transmission work in fiscal 2025 commencing in the third fiscal quarter.

Electrical, Mechanical, & General Construction Services revenues were $50.8 million for the three months ended March 31, 2026, an increase of $4.6 million from $46.2 million for the three months ended March 31, 2025. For the six months ended March 31, 2026, revenues were $100.2 million, an increase of $3.1 million from $97.1 million for the same period in 2025. These increases were primarily attributable to higher levels of electrical services performed during the 2026 periods.

Cost of Revenues. The following table compares the Company’s cost of revenues for the three and six months ended March 31, 2026 to the corresponding periods in 2025:


	Three Months Ended
	March 31, 2026				March 31, 2025		% of total		Change		% Change
Gas & Water Distribution	$	28,973,961	34.9	%	$	28,012,217	36.6	%	$	961,744	3.4	%
Gas & Petroleum Transmission		8,511,055	10.3	%		4,600,615	6.0	%		3,910,440	85.0	%
Electrical, Mechanical, & General		43,662,087	52.6	%		42,429,570	55.4	%		1,232,517	2.9	%
Unallocated Shop Expenses		1,794,003	2.2	%		1,558,889	2.0	%		235,114	15.1	%
Total	$	82,941,106	100.0	%	$	76,601,291	100.0	%	$	6,339,815	8.3	%

	Six Months Ended
	March 31, 2026				March 31, 2025		% of total		Change		% Change
Gas & Water Distribution	$	63,064,239	34.5	%	$	54,148,720	32.4	%	$	8,915,519	16.5	%
Gas & Petroleum Transmission		28,789,076	15.7	%		22,122,552	13.2	%		6,666,524	30.1	%
Electrical, Mechanical, & General		88,167,808	48.1	%		88,479,574	53.1	%		(311,766)	(0.4)	%
Unallocated Shop Expenses		3,038,391	1.7	%		2,232,977	1.3	%		805,414	36.1	%
Total	$	183,059,514	100.0	%	$	166,983,823	100.0	%	$	16,075,691	9.6	%

Total cost of revenues increased by $6.3 million to $82.9 million for the three months ended March 31, 2026, compared to $76.6 million for the three months ended March 31, 2025. For the six months ended March 31, 2026, total cost of revenues increased by $16.1 million to $183.1 million, compared to $167.0 million for the same period in 2025. These increases were primarily attributable to higher levels of work across all business lines during the 2026 periods, partially offset by a $312,000 decrease in cost of revenues for Electrical, Mechanical, and General Construction Services for the six months ended March 31, 2026.

Gas & Water Distribution cost of revenues was $29.0 million for the three months ended March 31, 2026, an increase of $962,000 from $28.0 million for the prior-year period. For the six months ended March 31, 2026, cost of revenues was $63.1 million, an increase of $8.9 million from $54.1 million for the same period in 2025. These increases were primarily attributable to higher levels of water distribution activity.

Gas & Petroleum Transmission cost of revenues was $8.5 million for the three months ended March 31, 2026, an increase of $3.9 million from $4.6 million for the prior-year period. For the six months ended March 31, 2026, cost of revenues was $28.8 million, an increase of $6.7 million from $22.1 million for the same period in 2025. These increases were primarily due to new transmission projects awarded in the first quarter of fiscal 2026 and the timing of project execution, as most transmission work in fiscal 2025 commenced in the third fiscal quarter.

Electrical, Mechanical, & General Construction Services cost of revenues was $43.7 million for the three months ended March 31, 2026, an increase of $1.2 million from $42.4 million for the prior-year period. For the six months ended March 31, 2026, cost of revenues was $88.2 million, a decrease of $312,000 from $88.5 million for the same period in 2025. While activity levels increased, the

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Company achieved improved margins during the 2026 periods, resulting in a modest decrease in cost of revenues for the current six-month period.

Unallocated shop expenses were $1.8 million for the three months ended March 31, 2026, an increase of $235,000 from $1.6 million for the prior-year period. For the six months ended March 31, 2026, unallocated shop expenses were $3.0 million, an increase of $805,000 from $2.2 million for the same period in 2025. The increase in the 2026 periods was primarily due to higher depreciation, insurance, and equipment repair costs, without a corresponding increase in internal equipment charges to projects during the 2026 periods.

Gross Profit (Loss). The following table compares the Company’s gross profit for the three and six months ended March 31, 2026 to the corresponding periods in 2025:


	Three Months Ended
	March 31, 2026		% of revenue		March 31, 2025		% of revenue		Change		Pct.
Gas & Water Distribution	$	2,363,847	7.54	%	$	(911,102)	(3.36)	%	$	3,274,949	359.4	%
Gas & Petroleum Transmission		2,511,537	22.79	%		(1,205,557)	(35.51)	%		3,717,094	308.3	%
Electrical, Mechanical, & General		7,150,955	14.07	%		3,753,408	8.13	%		3,397,547	90.5	%
Unallocated Shop Expense		(1,794,003)				(1,558,889)				(235,114)	15.1	%
Total	$	10,232,336	11.0	%	$	77,860	0.1	%	$	10,154,476	13042.0	%

	Six Months Ended
	March 31, 2026		% of revenue		March 31, 2025		% of revenue		Change		% Change
Gas & Water Distribution	$	8,883,837	12.35	%	$	4,252,404	7.28	%	$	4,631,433	108.9	%
Gas & Petroleum Transmission		6,359,740	18.09	%		(271,277)	(1.24)	%		6,631,017	2,444.4	%
Electrical, Mechanical, & General		12,020,942	12.00	%		8,593,292	8.85	%		3,427,650	39.9	%
Unallocated Shop Expense		(3,038,391)				(2,232,977)				(805,414)	36.1	%
Total	$	24,226,128	11.7	%	$	10,341,442	5.8	%	$	13,884,686	134.3	%

Total gross profit increased by $10.1 million to $10.2 million for the three months ended March 31, 2026, compared to $78,000 for the three months ended March 31, 2025. For the six months ended March 31, 2026, total gross profit increased by $13.9 million to $24.2 million, compared to $10.3 million for the same period in 2025. These increases were primarily attributable to higher activity levels and improved profitability across all business lines, partially offset by higher unallocated shop expenses during the 2026 periods.

Gas & Water Distribution gross profit was $2.4 million for the three months ended March 31, 2026, an increase of $3.3 million from a gross loss of $911,000 for the prior-year period. For the six months ended March 31, 2026, gross profit was $8.9 million, an increase of $4.6 million from $4.3 million for the same period in 2025. These increases were primarily attributable to higher levels of water distribution activity and improved project profitability.

Gas & Petroleum Transmission gross profit was $2.5 million for the three months ended March 31, 2026, an increase of $3.7 million from a gross loss of $1.2 million for the prior-year period. For the six months ended March 31, 2026, gross profit was $6.4 million, an increase of $6.6 million from a gross loss of $271,000 for the same period in 2025. These increases were primarily due to transmission projects awarded in the first and second quarters of fiscal 2026, as well as improved profitability and project execution.

Electrical, Mechanical, & General Construction Services gross profit was $7.2 million for the three months ended March 31, 2026, an increase of $3.4 million from $3.8 million for the prior-year period. For the six months ended March 31, 2026, gross profit was $12.0 million, an increase of $3.4 million from $8.6 million for the same period in 2025. These increases were primarily attributable to improved margins on relatively consistent levels of work performed.

Gross loss attributable to unallocated shop expenses was $1.8 million for the three months ended March 31, 2026, an increase of $235,000 from $1.6 million for the prior-year period. For the six months ended March 31, 2026, gross loss attributable to unallocated shop expenses was $3.0 million, an increase of $805,000 from $2.2 million for the same period in 2025. The increase in the 2026 periods was primarily due to higher depreciation, insurance, and equipment repair costs, without a corresponding increase in internal equipment charges to projects during the 2026 periods.

Selling and administrative expenses. Total selling and administrative expenses increased by $1.0 million to $9.2 million for the three months ended March 31, 2026, compared to $8.2 million for the same period in 2025. For the six months ended March 31, 2026,

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total selling and administrative expenses increased by $1.5 million to $18.3 million, compared to $16.8 million for the same period in 2025. These increases were primarily attributable to higher labor and related burden costs associated with the Company’s growth.

Other non-operating expense. Other non-operating expenses were $94,000 for the three months ended March 31, 2026, compared to $21,000 for the same period in 2025. For the six months ended March 31, 2026, other non-operating expenses were $197,000, compared to $69,000 for the same period in 2025. The increases were primarily attributable to amortization of intangible assets associated with an acquisition completed on September 30, 2025.

Interest expense. Interest expense was $622,000 for the three months ended March 31, 2026, a decrease of $254,000 from $876,000 for the same period in 2025. This decrease was primarily attributable to lower interest expense on line of credit borrowings and the repayment of other long-term debt using proceeds from an equity raise completed in February 2026.

For the six months ended March 31, 2026, interest expense was $1.6 million, an increase of $252,000 from $1.4 million for the same period in 2025. This increase was primarily attributable to higher average borrowings on the Company’s line of credit during the three months ended December 31, 2025, compared to the corresponding period in the prior fiscal year.

Gain on sale of equipment. Gain on sale of equipment was $70,000 for the three months ended March 31, 2026, an increase of $87,000 from a loss of $17,000 for the same period in the prior year. For the six months ended March 31, 2026, gain on sale of equipment was $89,000, a decrease of $90,000 from $179,000 for the same period in the prior year.

The Company periodically sells underutilized or non-operating equipment as part of its asset management practices. As a result, gains and losses on such sales may vary from period to period.

Net income (loss). Income (loss) before income taxes was $412,000 for the three months ended March 31, 2026, compared to a loss of $9.0 million for the same period in the prior year. For the six months ended March 31, 2026, income before income taxes was $4.3 million, compared to a loss of $7.7 million for the same period in the prior year. These increases were primarily attributable to the factors discussed above.

Income tax expense was $197,000 for the three months ended March 31, 2026, compared to an income tax benefit of $2.2 million for the same period in the prior year. For the six months ended March 31, 2026, income tax expense was $1.3 million, compared to an income tax benefit of $1.8 million for the same period in the prior year. The increase in income tax expense was primarily due to higher pre-tax income during the 2026 periods.

Net income was $216,000 for the three months ended March 31, 2026, compared to a net loss of $6.8 million for the same period in the prior year. For the six months ended March 31, 2026, net income was $2.9 million, compared to a net loss of $5.9 million for the same period in the prior year.

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Segment Results

The following table sets forth segment revenues, segment income (loss) from operations and operating margins for the periods indicated, as well as the dollar and percentage change from the prior period:


	Underground
	Infrastructure			Industrial			Building
Three Months Ended March 31, 2026	Construction			Construction			Construction			Total

Revenues	$	46,269,524		$	36,397,052		$	10,506,866		$	93,173,442

Segment direct operating expenses (excluding depreciation)		39,322,151			30,761,593			9,605,535			79,689,279
Direct depreciation expense		2,586,777			665,050			—			3,251,827
Segment gross profit		4,360,596			4,970,409			901,331			10,232,336
Segment gross profit percentage		9.4	%		13.7	%		8.6	%		11.0	%
Selling, general, and administrative expenses		5,153,550			1,031,731			1,085,811			7,271,092
Indirect depreciation expense		—			—			116,552			116,552
Intangible asset amortization expenses		229,683			54,720			—			284,403
Segment indirect operating expenses		5,383,233			1,086,451			1,202,363			7,672,047
Segment income from operations		(1,022,637)			3,883,958			(301,032)			2,560,289
Segment operating margin percentage		(2.2)	%		10.7	%		(2.9)	%		2.7	%
Corporate and non-allocated costs											1,498,199
Corporate depreciation expense											3,679
Total consolidated income from operations										$	1,058,411


	Underground
	Infrastructure			Industrial			Building
Three Months Ended March 31, 2025	Construction			Construction			Construction			Total

Revenues	$	32,544,499		$	32,694,332		$	11,440,320		$	76,679,151

Segment direct operating expenses (excluding depreciation)		34,472,373			29,345,599			9,852,195			73,670,167
Direct depreciation expense		2,299,065			632,059			—			2,931,124
Segment gross (loss) profit		(4,226,939)			2,716,674			1,588,125			77,860
Segment gross profit percentage		(13.0)	%		8.3	%		13.9	%		0.1	%
Selling, general, and administrative expenses		4,780,036			980,765			795,810			6,556,611
Indirect depreciation expense		—			—			84,953			84,953
Intangible asset amortization expenses		141,476			—			—			141,476
Segment indirect operating expenses		4,921,512			980,765			880,763			6,783,040
Segment (loss) income from operations		(9,148,451)			1,735,909			707,362			(6,705,180)
Segment operating margin percentage		(28.1)	%		5.3	%		6.2	%		(8.7)	%
Corporate and non-allocated costs											1,384,859
Corporate depreciation expense											2,188
Total consolidated (loss) income from operations										$	(8,092,227)

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Variance Between Three Months Ended March 31, 2026 and 2025


	Underground
	Infrastructure				Industrial				Building
	Construction				Construction				Construction				Total

Revenues	$	13,725,025	42.2	%	$	3,702,720	11.3	%	$	(933,454)	(8.2)	%	$	16,494,291	21.5	%

Segment direct operating expenses (excluding depreciation)		4,849,778	14.1	%		1,415,994	4.8	%		(246,660)	(2.5)	%		6,019,112	8.2	%
Direct depreciation expense		287,712	12.5	%		32,991	5.2	%		—	0.0	%		320,703	10.9	%
Segment gross profit		8,587,535	(203.2)	%		2,253,735	83.0	%		(686,794)	(43.2)	%		10,154,476	13042.0	%
Segment gross profit percentage
Selling, general, and administrative expenses		373,514	7.8	%		50,966	5.2	%		290,001	36.4	%		714,481	10.9	%
Indirect depreciation expense		—	0.0	%		—	0.0	%		31,599	0.0	%		31,599	0.0	%
Intangible asset amortization expenses		88,207	62.3	%		54,720	0.0	%		—	0.0	%		142,927	101.0	%
Segment indirect operating expenses		461,721	9.4	%		105,686	10.8	%		321,600	36.5	%		889,007	13.1	%
Segment income from operations		8,125,814	(88.8)	%		2,148,049	123.7	%		(1,008,394)	(142.6)	%		9,265,469	(138.2)	%
Segment operating margin percentage
Corporate and non-allocated costs														113,340	8.2	%
Corporate depreciation expense														1,491	68.1	%
Total consolidated income from operations													$	9,150,638	113.1	%


	Underground
	Infrastructure			Industrial			Building
Six Months Ended March 31, 2026	Construction			Construction			Construction			Total

Revenues	$	115,446,608		$	70,143,499		$	21,695,535		$	207,285,642

Segment direct operating expenses (excluding depreciation)		96,249,127			61,147,179			19,168,989			176,565,295
Direct depreciation expense		5,187,271			1,306,948			—			6,494,219
Segment gross profit		14,010,210			7,689,372			2,526,546			24,226,128
Segment gross profit percentage		12.1	%		11.0	%		11.6	%		11.7	%
Selling, general, and administrative expenses		9,950,564			2,135,677			2,101,481			14,187,722
Indirect depreciation expense		—			—			225,274			225,274
Intangible asset amortization expenses		580,905			109,440			—			690,345
Segment indirect operating expenses		10,531,469			2,245,117			2,326,755			15,103,341
Segment income from operations		3,478,741			5,444,255			199,791			9,122,787
Segment operating margin percentage		3.0	%		7.8	%		0.9	%		4.4	%
Corporate and non-allocated costs											3,146,338
Corporate depreciation expense											5,273
Total consolidated income from operations										$	5,971,176

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	Underground
	Infrastructure			Industrial			Building
Six Months Ended March 31, 2025	Construction			Construction			Construction			Total

Revenues	$	85,364,645		$	68,090,845		$	23,869,775		$	177,325,265

Segment direct operating expenses (excluding depreciation)		79,518,142			61,216,519			20,833,716			161,568,377
Direct depreciation expense		4,141,479			1,273,967			—			5,415,446
Segment gross profit		1,705,024			5,600,359			3,036,059			10,341,442
Segment gross profit percentage		2.0	%		8.2	%		12.7	%		5.8	%
Selling, general, and administrative expenses		9,539,485			1,964,158			1,577,621			13,081,264
Indirect depreciation expense		—			—			167,439			167,439
Intangible asset amortization expenses		266,285			—			—			266,285
Segment indirect operating expenses		9,805,770			1,964,158			1,745,060			13,514,988
Segment (loss) income from operations		(8,100,746)			3,636,201			1,290,999			(3,173,546)
Segment operating margin percentage		(9.5)	%		5.3	%		5.4	%		(1.8)	%
Corporate and non-allocated costs											3,269,375
Corporate depreciation expense											3,345
Total consolidated (loss) income from operations										$	(6,446,266)

Variance Between Six Months Ended March 31, 2026 and 2025


	Underground
	Infrastructure				Industrial				Building
	Construction				Construction				Construction				Total

Revenues	$	30,081,963	35.2	%	$	2,052,654	3.0	%	$	(2,174,240)	(9.1)	%	$	29,960,377	16.9	%

Segment direct operating expenses (excluding depreciation)		16,730,985	21.0	%		(69,340)	(0.1)	%		(1,664,727)	(8.0)	%		14,996,918	9.3	%
Direct depreciation expense		1,045,792	25.3	%		32,981	2.6	%		—	0.0	%		1,078,773	19.9	%
Segment gross profit		12,305,186	721.7	%		2,089,013	37.3	%		(509,513)	(16.8)	%		13,884,686	134.3	%
Segment gross profit percentage
Selling, general, and administrative expenses		411,079	4.3	%		171,519	8.7	%		523,860	33.2	%		1,106,458	8.5	%
Indirect depreciation expense		—	0.0	%		—	0.0	%		57,835	34.5	%		57,835	34.5	%
Intangible asset amortization expenses		314,620	118.2	%		109,440	0.0	%		—	0.0	%		424,060	159.3	%
Segment indirect operating expenses		725,699	7.4	%		280,959	14.3	%		581,695	33.3	%		1,588,353	11.8	%
Segment income from operations		11,579,487	(142.9)	%		1,808,054	49.7	%		(1,091,208)	(84.5)	%		12,296,333	(387.5)	%
Segment operating margin percentage
Corporate and non-allocated costs														(123,037)	(3.8)	%
Corporate depreciation expense														1,928	57.6	%
Total consolidated income from operations													$	12,417,442	(192.6)	%

Underground Infrastructure Construction

Revenues. The $13.7 million and $30.0 million increases in revenues for the three and six months ended March 31, 2026 as compared to the same periods in 2025 were primarily due to the Company’s focus on growing its natural gas and water distribution business lines. Additionally, natural gas transmission projects started earlier in fiscal year 2026 as compared to fiscal year 2025.

Income from operations. The $8.1 million and $11.6 million increases in income from operations for the three and six months ended March 31, 2026 as compared to the same period in 2025 were primarily due to an increased volume of work and profitability from underground infrastructure projects.

Industrial Construction

Revenues. The $3.7 million and $2.1 million increases in revenues for the three and six months ended March 31, 2026 as compared to the same periods in 2025 were primarily due to an increase in the amount of electrical and mechanical work performed.

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Income from operations. The $2.1 million and $1.8 million increases in income from operations for the three and six months ended March 31, 2026 as compared to the same period in 2025 were primarily due to an increase in industrial work and an increase in profitability.

Building Construction

Revenues. The $933,000 and $2.2 million decreases in revenues for the three and six months ended March 31, 2026 as compared to the same period in 2025 were primarily due to winding down work on substantially complete projects while bidding on potential new projects with projected start dates in the Company’s third quarter of fiscal year 2026.

Income from operations. The $1.0 million and $1.1 million decreases in income from operations for the three and six months ended March 31, 2026 as compared to the same period in 2025 were primarily due to the decreased volume of work completed in the Company’s first quarter of fiscal year 2026.

Corporate and Non-Allocated Costs

Corporate and Non-Allocated Costs increased by $113,000 for the three months ended March 31, 2026 and decreased by $123,000 for the six months ended March 31, 2026, respectively, as compared to the same periods in 2025. The variances are attributed to various factors; however, the Company has added additional safety and risk management personnel at the corporate level.

The Company’s disaggregated revenue does vary slightly from the Company’s segment reporting due to combining the Industrial and Building Construction into Electrical, Mechanical and General, and one legal entity in the Underground Infrastructure Construction segment that performs services other than underground construction that are included in Electrical, Mechanical and General. The volume of these services is not material to the Company’s segment reporting.

Comparison of Financial Condition at March 31, 2026 and September 30, 2025

The Company had total assets of $193.9 million at March 31, 2026, a decrease of $21.3 million from $215.2 million at September 30, 2025.

Accounts receivable, net of allowance for credit losses, totaled $60.1 million at March 31, 2026, a decrease of $16.0 million from $76.0 million at September 30, 2025. The decrease was primarily due to the timing of cash collections and project billings since September 30, 2025.

Contract assets totaled $26.8 million at March 31, 2026, a decrease of $7.7 million from $34.5 million at September 30, 2025. The decrease was due to the timing of project billing activity at March 31, 2026 compared to September 30, 2025.

Cash and cash equivalents totaled $10.1 million at March 31, 2026, a decrease of $2.1 million from $12.2 million at September 30, 2025. The decrease was primarily due to $19.1 million used in financing activities and $5.4 million used for net investment in equipment, partially offset by $22.5 million of cash provided by operating activities.

Intangible assets, net totaled $4.2 million at March 31, 2026, a decrease of $690,000 from $4.9 million at September 30, 2025. The decrease was primarily due to amortization of intangible assets during the period.

Retainage receivable totaled $18.6 million at March 31, 2026, an increase of $2.6 million from $16.0 million at September 30, 2025. The increase was primarily due to the timing of retention billings and increased project activity during the period.

Prepaid expenses and other totaled $6.4 million at March 31, 2026, an increase of $1.4 million from $5.0 million at September 30, 2025. The increase was primarily due to insurance premium payments, partially offset by insurance expense recognized during the six months ended March 31, 2026.

Net property, plant and equipment totaled $54.2 million at March 31, 2026, an increase of $708,000 from $53.5 million at September 30, 2025. The increase reflected $7.6 million of equipment acquisitions, partially offset by $6.7 million of depreciation expense and $214,000 of net equipment disposals.

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Right-of-use assets totaled $2.4 million at March 31, 2026, an increase of $339,000 from $2.1 million at September 30, 2025. The increase was primarily due to $940,000 in additions from new operating lease agreements, partially offset by $600,000 of amortization of right-of-use assets during the period.

Other receivables totaled $1.2 million at March 31, 2026, an increase of $137,000 from $1.1 million at September 30, 2025. The increase was primarily due to an expected insurance premium refund.

Goodwill totaled $9.9 million at March 31, 2026, unchanged from September 30, 2025.

The Company had total liabilities of $112.4 million at March 31, 2026, a decrease of $43.6 million from $156.0 million at September 30, 2025.

The aggregate balance of current maturities of long-term debt and long-term debt was $24.7 million at March 31, 2026, a decrease of $37.1 million from $61.8 million at September 30, 2025. The decrease was primarily due to $14.3 million in principal repayments on long-term debt and $24.8 million in repayments on the operating line of credit, partially offset by $1.9 million in new equipment financing.

Accounts payable totaled $21.3 million at March 31, 2026, a decrease of $9.4 million from $30.7 million at September 30, 2025. The decrease was primarily due to the timing of vendor payments.

Contract liabilities totaled $29.5 million at March 31, 2026, an increase of $1.2 million from $28.3 million at September 30, 2025. The increase was due to the timing of project billing activity.

Accrued expenses and other current liabilities totaled $16.2 million at March 31, 2026, an increase of $234,000 from $15.9 million at September 30, 2025. The increase was primarily due to the timing of accrued expense payments.

Deferred tax liabilities totaled $7.9 million at March 31, 2026, an increase of $1.2 million from $6.8 million at September 30, 2025. This increase was primarily attributable to a $450,000 increase in deferred tax liabilities related to timing differences between book and tax depreciation, a $188,000 decrease in federal and state net operating loss carryforwards, and a $524,000 decrease in other deferred tax assets.

Current and long-term operating lease liabilities totaled $2.4 million at March 31, 2026, an increase of $342,000 from $2.0 million at September 30, 2025. The increase was primarily due to $937,000 in new operating lease additions, partially offset by $686,000 in lease payments during the period.

Lines of credit and short-term borrowings totaled $10.5 million at March 31, 2026, an increase of $50,000 from September 30, 2025. The increase was due to accrued interest on PPP loans. Refer to Note 3, “Accounting for PPP Loans,” in the accompanying consolidated financial statements for additional information.

Shareholders’ equity was $81.5 million at March 31, 2026, an increase of $22.3 million from $59.2 million at September 30, 2025. The increase was primarily due to $21.2 million in net proceeds from an equity raise and net income of $2.9 million for the six months ended March 31, 2026, partially offset by $848,000 in share repurchases and $1.1 million in declared dividends.

Liquidity and Capital Resources

Equity Raise

On February 18, 2026, The Company entered into an underwriting agreement (the “Underwriting Agreement”) with Lake Street Capital Markets, LLC (the “Underwriter”). Pursuant to the Underwriting Agreement, the Company agreed to issue and sell, and the Underwriter agreed to purchase, subject to the terms and conditions therein, 1,740,000 shares of the Company’s common stock, par value $0.0001 per share (“Common Stock”), in a registered public offering pursuant to an effective shelf registration statement on Form S-3 (File No. 333-280025) and related prospectus, including the prospectus supplement filed with the Securities and Exchange Commission (the “Offering”). The Company also granted the Underwriter a 30-day option to purchase up to an additional 261,000 shares of Common Stock.

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The Offering closed on February 20, 2026, with the Underwriter purchasing 1,740,000 shares of Common Stock at a public offering price of $11.50 per share. Net proceeds to the Company were approximately $18.4 million, after deducting underwriting discounts and commissions and estimated offering expenses.

On February 24, 2026, the Underwriter exercised its overallotment option and purchased an additional 261,000 shares of Common Stock at the public offering price of $11.50 per share. Net proceeds from the exercise of the option were approximately $2.8 million, after deducting underwriting discounts and commissions but before deducting other offering expenses payable by the Company.

The Company intends to use the net proceeds from the Offering for strategic growth initiatives, working capital needs, and general corporate purposes.

Operating Line of Credit

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


	March 31, 2026			September 30, 2025
Eligible borrowing base	$	18,196,189		$	27,657,997

Borrowings on line of credit		—			24,750,000

Line of credit balance available	$	18,196,189		$	2,907,997

Interest rate		6.75	%		7.50	%

The Company did not have any line of credit borrowings at March 31, 2026. The Company’s $24.8 million line of credit borrowings are recorded as a long-term debt as of September 30, 2025.

The financial covenants required by the Company’s lender are below:

●

Minimum tangible net worth of $28.0 million,

●

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

●

Minimum current ratio of 1.20x,

●

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

●

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

●

Paycheck Protection Program Loans

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

Long-Term Debt

On March 16, 2014, the Company’s Nitro subsidiary entered into a $1.2 million, 20-year loan agreement with a bank to purchase an office building and property previously held under lease. The loan bears interest at 4.82% with monthly payments of $7,800. The interest rate is subject to periodic adjustment based on changes in the U.S. Treasury yield, adjusted to a constant maturity of three years, as published weekly by the Federal Reserve. As of March 31, 2026, the Company had made principal payments of $517,000. The loan is collateralized by the related building and is currently held by Peoples Bank, Inc.

On March 31, 2020, West Virginia Pipeline Acquisition Company (subsequently renamed West Virginia Pipeline, Inc.) entered into a $3.0 million seller’s note agreement with David and Daniel Bolton for the remaining purchase price of the business. For purchase accounting purposes, the note had a fair value of $2.85 million. As part of the $6.35 million total acquisition price, the Company paid $3.5 million in cash in addition to the note. The unsecured five-year note required annual principal payments of at least $500,000 and bore interest at a fixed rate of 3.25% on the $3.0 million stated principal balance (approximately 5.35% on the carrying value). Final payment on this note was made in December 2025.

On April 2, 2021, the Company entered into a $3.5 million non-revolving term note with United Bank. The proceeds were used to repay an outstanding line of credit utilized for the down payment on the West Virginia Pipeline acquisition. The loan required monthly payments of $64,853 and bore interest at a fixed rate of 4.25%. The loan was collateralized by the Company’s equipment and receivables. Final payment on this note was made in February 2026.

On April 29, 2022, the Company entered into a $7.5 million non-revolving term note with United Bank to finance the acquisition of Tri-State Paving. The loan required monthly payments of $129,910 and bore interest at a fixed rate of 4.25%. Final payment on this note was made in February 2026.

On April 29, 2022, the Company also entered into a $1.0 million promissory note with Corns Enterprises, a related party, as partial consideration for the acquisition of Tri-State Paving. David E. Corns served as President of the Company’s Tri-State Paving subsidiary until his retirement in May 2025. The note required annual principal payments of $250,000 beginning on the first anniversary of the agreement date, with interest on the outstanding balance at 3.5% per annum. As of March 31, 2026, $750,000 of principal had been repaid. Final payment on this note was made in April 2026.

On October 10, 2022, the Company entered into a $3.1 million term note with United Bank to finance equipment acquired in the Ryan Construction acquisition. The loan required monthly payments of $60,000 and bore interest at a fixed rate of 6.0%. The loan was collateralized by equipment and receivables. Final payment on this note was made in February 2026.

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On June 1, 2023, the Company entered into a $9.3 million non-revolving equipment line of credit with United Bank (“Equipment Line of Credit 2023”). The facility provided borrowing availability for six months at a fixed interest rate of 7.25%, after which all borrowings converted into a 54-month term note at the same fixed rate. The loan is collateralized by the related equipment purchases. As of March 31, 2026, the Company had borrowed $9.3 million under the facility and had repaid $4.4 million of principal.

On August 8, 2024, the Company entered into a $5.0 million non-revolving equipment line of credit with United Bank. The facility provided borrowing availability for twelve months at a variable rate based on the Wall Street Journal Prime Rate (initially 8.5%). After twelve months, outstanding borrowings convert to a 48-month term loan bearing interest at a fixed rate equal to the U.S. Treasury Rate plus 2.75%. The loan is collateralized by the related equipment. As of March 31, 2026, the Company had borrowed $5.0 million and repaid $649,000 of principal.

On December 2, 2024, the Company entered into a $16.0 million term loan with United Bank to finance the acquisition of Tribute. The six-year loan requires monthly payments of approximately $272,000 and bears interest at a fixed rate of 6.9%. As of March 31, 2026, the Company had repaid $7.8 million of principal.

On September 30, 2025, the Company entered into a $500,000 seller’s note agreement with Joe and Cathy Rigney in connection with the acquisition of Rigney Digital Systems Ltd. For purchase accounting purposes, the note had a fair value of $461,000. As part of the $4.6 million total acquisition price, the Company paid $3.0 million in cash and issued $1.0 million in common stock. The unsecured five-year note requires a $500,000 payment at maturity and bears interest at 5.0% on the stated principal amount (approximately 7.05% on the carrying value). As of March 31, 2026, the carrying value of the note was $465,000.

Operating Leases

The second lease, for the Chattanooga, Tennessee facility, had a net present value of $144,000 at inception and expired on August 31, 2024. The lease was renewed for a two-year term with a net present value of $140,000 and had a carrying value of $17,000 at March 31, 2026. The lease bears interest at 8.5%, based on the Company’s incremental borrowing rate at inception.

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Off-Balance Sheet Arrangements

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

Rental Agreements

Letters of Credit

Certain customers or vendors may require letters of credit to secure payments that the vendors are making on our behalf or to secure payments to subcontractors and vendors on various customer projects. At March 31, 2026, the Company did not have any letters of credit outstanding.

Performance Bonds

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

Currently, the Company has an agreement with a surety company to provide bonding which will suit the Company’s immediate needs. The ability to obtain bonding for future contracts is an important factor in the contracting industry with respect to the type and value of contracts that can be bid. Depending upon the size and conditions of a particular contract, the Company may be required to post letters of credit or other collateral in favor of the insurer. Posting these letters or other collateral will reduce our borrowing capabilities. The Company does not anticipate any claims in the foreseeable future. At March 31, 2026, the Company had $130.6 million in performance bonds outstanding.

Concentration of Credit Risk

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

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Please see the tables below for customers that represent 10.0% or more of the Company’s revenue for the three and six months ended March 31, 2026 and 2025:


	Three Months Ended		Three Months Ended		Six Months Ended		Six Months Ended
	March 31,		March 31,		March 31,		March 31,
Revenue	2026		2025		2026		2025
Customers 10.0% or greater	*		*		*		*
All other	100.0	%	100.0	%	100.0	%	100.0	%
Total	100.0	%	100.0	%	100.0	%	100.0	%

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

Please see the tables below for customers that represent 10.0% or more of the Company’s accounts receivable, net of retention at March 31, 2026 and September 30, 2025:


Accounts receivable, net of retention	at March 31, 2026		at September 30, 2025
TransCanada Corporation	*		13.9	%
All other	100.0	%	86.1	%
Total	100.0	%	100.0	%

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

Litigation

On November 12, 2021, the Company received a withdrawal liability claim from a pension plan to which the Company made pension contributions for union construction employees performing covered work in a particular jurisdiction. The Company has not performed covered work in their jurisdiction since 2011; however, the Company disagrees with the withdrawal claim and believes it is covered by an exemption under federal law. The demand called for thirty-four quarterly installment payments of $41,000 starting March 15, 2021. The Company complied with the demand according to federal pension law; however, the Company firmly believes no withdrawal liability exists. The Company is in negotiations with the pension fund to resolve the matter and all future payments have been suspended as part of the negotiation. The Company has expensed all $164,000 in payments made through September 30, 2022 and does not expect any future liabilities related to this claim. The Company did not make any payments during the three and six months ended March 31, 2026 or 2025.

Other than described above, at March 31, 2026, the Company was not involved in any legal proceedings other than in the ordinary course of business. The Company is a party from time to time to various lawsuits, claims and other legal proceedings that arise in the ordinary course of business. These actions typically seek, among other things, compensation for alleged personal injury, breach of contract and/or property damages, punitive damages, civil penalties, or other losses, or injunctive or declaratory relief. With respect to all such lawsuits, claims, and proceedings, we record reserves when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. At March 31, 2026, the Company does not believe that any of these proceedings, separately or in aggregate, would be expected to have a material adverse effect on our financial position, results of operations or cash flows.

Related Party Transactions

We intend that all transactions between us and our executive officers, directors, holders of 10% or more of the shares of any class of our common stock and affiliates thereof, will be on terms no less favorable than those terms given to unaffiliated third parties and will be approved by a majority of our independent outside directors not having any interest in the transaction.

On April 29, 2022, the Company entered into a $1.0 million promissory note agreement with Corns Enterprises as partial consideration for the purchase of Tri-State Paving. This four-year agreement requires $250,000 principal installment payments on or before the end of each twelve (12) full calendar month period beginning April 29, 2022. Interest payments due will be calculated on the principal balance remaining and will be at the stated rate of 3.5% per year. The Company has made $750,000 in principal payments on this note as of March 31, 2026. Final payment on this note was made in April 2026.

SQP made an equity investment of $156,000 in 1030 Quarrier Development, LLC (“Development”) in August 2022. Development is a variable interest entity (“VIE”) that is 75% owned by 1030 Quarrier Ventures, LLC (“Ventures”) and 25% owned by

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

CJ Hughes entered into an agreement, cancelable at any time, with Construction Specialty Services (“CSS”), which is owned by Chuck Austin, the President of CJ Hughes. CSS rents equipment, periodically, to and as requested by CJ Hughes. The equipment rental rates are below the rates that the equipment can be rented from any unaffiliated rental company. CJ Hughes is not obliged to rent any equipment and does so only when CJ Hughes does not have equipment available of its own and would otherwise need to rent such equipment as the demand increases throughout the construction season. For the three months ended March 31, 2026 and 2025, the rental amounts for these specific periods were $72,000, and $123,000, respectively. For the six months ended March 31, 2026 and 2025, the rental amounts for these specific periods were $218,000, and $176,000, respectively.

Other than mentioned above, there were no new material related party transactions entered into during the three and six months ended March 31, 2026.

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

Inflation

Most significant project materials, such as pipe or electrical wire, are provided by the Company’s customers. When possible, the Company attempts to lock in pricing with vendors and include qualifications regarding material cost increases in bids. Where allowed by contract, the Company will address fuel cost increases with customers. Significant inflation or supply chain issues could cause customers to delay or cancel planned projects; however, inflation did not have a significant effect on our results for the three and six months ended March 31, 2026 and 2025.

Critical Accounting Estimates

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

Revenues

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

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●

the completeness and accuracy of the original bid;

●

costs associated with scope changes;

●

changes in costs of labor and/or materials;

●

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

●

subcontractor performance issues;

●

changes in productivity expectations;

●

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

●

changes from original design on design-build projects;

●

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

●

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

●

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

●

the customer’s ability to properly administer the contract.

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

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

The following table presents our costs and estimated earnings in excess of billings and billings in excess of costs and estimated earnings at March 31, 2026 and September 30, 2025:


		March 31, 2026			September 30, 2025
Costs incurred on contracts in progress		$	478,785,961		$	471,208,654
Estimated earnings, net of estimated losses			80,553,250			71,159,322
			559,339,211			542,367,976
Less billings to date			562,039,778			536,231,730
		$	(2,700,567)		$	6,136,246

Costs and estimated earnings in excess of billed on uncompleted contracts		$	26,773,714		$	34,455,011

Less billings in excess of costs and estimated earnings on uncompleted contracts			29,474,281			28,318,765

		$	(2,700,567)		$	6,136,246

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Allowance for credit losses

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

Materially incorrect estimates of bad debt reserves could result in an unexpected loss in profitability for the Company. Additionally, frequently changing reserves could be an indication of risky or unreliable customers. At March 31, 2026, the management review deemed that the allowance for credit losses was adequate.

Please see the allowance for credit losses table below as of and for the six months ended March 31, 2026 and as of fiscal year ended September 30, 2025:


	March 31, 2026		September 30, 2025
Balance at beginning of period	$	521,616	$	738,526
Charged to expense		—		423,750
Deductions for uncollectible receivables written off, net of recoveries		(217,894)		(640,660)
Balance at end of period	$	303,722	$	521,616

Impairment of goodwill and intangible assets

The Company follows the guidance of Accounting Standards Codification (“ASC”) 350-20-35-3 “Intangibles-Goodwill and Other (Topic 350)” which requires a company to record an impairment charge based on the excess of a reporting unit’s carrying amount of goodwill over its fair value. Under the current guidance, companies can first choose to assess any impairment based on qualitative factors (Step 0). If a company fails this test or decides to bypass this step, it must proceed with a quantitative assessment of goodwill impairment. The Company did not have a goodwill impairment at March 31, 2026.

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

A table of the Company’s intangible assets subject to amortization at March 31, 2026 and September 30, 2025 is below:


				Accumulated		Accumulated		Amortization		Amortization		Amortization		Amortization
	Remaining Life			Amortization		Amortization		and Impairment		and Impairment		and Impairment		and Impairment
	(in months) at			and Impairment		and Impairment		Three Months		Three Months		Six Months		Six Months		Net Book Value		Net Book Value
	March 31,			at March 31,		at September 30,		Ended March 31,		Ended March 31,		Ended March 31,		Ended March 31,		at March 31,		at September 30,
	2026	Original Cost		2026		2025		2026		2025		2026		2025		2026		2025
Intangible assets:
West Virginia Pipeline:
Customer relationships	57	$	2,209,724		1,160,100	$	1,049,610		55,245		55,245		110,490		110,490	$	1,049,624	$	1,160,114
Tradename	57		263,584		138,391		125,215		6,588		6,588		13,176		13,176		125,193		138,369
Non-competes	—		83,203		83,203		83,203		—		—		—		—		—		—

Heritage Painting
Customer relationships	39		121,100		42,378		30,270		6,054		6,054		12,108		12,108		78,722		90,830

Tri-State Paving:
Customer relationships	73		1,649,159		645,921		563,463		41,229		41,229		82,458		82,458		1,003,238		1,085,696
Tradename	73		203,213		79,592		69,431		5,081		5,080		10,161		10,160		123,621		133,782
Non-competes	—		39,960		39,960		39,960		—		—		—		—		—		—

Tribute Contracting & Consultants
Non-compete 1	104		520,000		69,331		43,333		12,999		12,501		25,998		16,668		450,669		476,667
Non-compete 2	80		10,000		1,666		1,042		312		—		624		—		8,334		8,958
Tradename	44		80,000		21,331		13,333		3,999		37,500		7,998		50,000		58,669		66,667
Backlog	8		1,320,000		880,000		550,000		104,230		—		330,000		—		440,000		770,000

Rigney Digital Systems
Tradename	126		657,100		29,868		—		14,934		—		29,868		—		627,232		657,100
Backlog	18		260,600		65,148		—		32,574		—		65,148		—		195,452		260,600
Non-compete	114		46,300		2,316		—		1,158		—		2,316		—		43,984		46,300

Total intangible assets		$	7,463,943	$	3,259,205	$	2,568,860	$	284,403	$	164,197	$	690,345	$	295,060	$	4,204,738	$	4,895,083

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Depreciation and Amortization

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

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

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

The Company’s depreciation expenses for the three months ended March 31, 2026 and 2025 were $3.4 million and $3.0 million, respectively. The Company’s depreciation expenses for the six months ended March 31, 2026 and 2025 were $6.7 million and $5.6 million, respectively In general, depreciation is included in “cost of revenues” on the Company’s consolidated statements of income.

The Company’s amortization expenses for the three months ended March 31, 2026 and 2025 were $284,403 and $164,197, respectively. The Company’s amortization expenses for the six months ended March 31, 2026 and 2025 were $690,345 and $295,060, respectively. In general, amortization is included in “cost of revenues” on the Company’s consolidated statements of income.

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

Income Taxes

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

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Accounting for PPP Loans

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

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

New Accounting Pronouncements

In November 2024, the FASB issued an update that requires incremental disclosures about specific expense categories. Entities are required to disclose in the notes to financial statements the amounts of purchases of inventory, employee compensation, depreciation, intangible asset amortization and selling expenses included in each relevant expense caption of the statements of operations. The standard also requires disclosure of the amount, and a qualitative description of, other items remaining in relevant expense captions that are not separately disaggregated. This update is effective for fiscal years beginning after March 15, 2026, and interim periods within fiscal years beginning after March 15, 2027. Early adoption and both prospective and retrospective application are permitted. The Company is currently assessing the effect of this update.

In March 2023, the FASB issued an update that expands disclosures for tax rate reconciliation tables, primarily by requiring disaggregation of income taxes paid by jurisdiction, as well as greater disaggregation within the rate reconciliation. This update is effective for fiscal years beginning after March 15, 2024 and interim periods within fiscal years beginning after March 15, 2025. Early adoption and retrospective application are permitted. The Company is currently assessing the effect of this update.

Subsequent Events

On April 15, 2026, the Company paid a quarterly dividend of $0.03 per common share to shareholders of record as of March 31, 2026.

Outlook

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

The Company continues to receive significant bid opportunities for water and wastewater projects, natural gas transmission and distribution projects, and electrical, mechanical, and general construction projects. The Company’s unaudited backlog at March 31, 2026, was $325.1 million, compared to $280.7 million at March 31, 2025, and $259.7 million at September 30, 2025.

The $13.5 million and $13.3 million increases in revenue for Gas & Water Distribution and Gas & Petroleum Transmission, respectively, for the six months ended March 31, 2026, compared to the same period in 2025, are consistent with the increased project opportunities the Company is experiencing in fiscal year 2026. Backlog for these categories was $154.7 million at March 31, 2026.

Electrical, Mechanical, & General Construction Services revenue increased by $3.1 million for the six months ended March 31, 2026, compared to the same period in 2025. The Company’s backlog in this category was $170.4 million at March 31, 2026, and the Company continues to experience bidding opportunities for larger construction projects in fiscal year 2026.

While the addition of further projects appears likely, no assurance can be given that the Company will be successful in securing projects for which it bids. Moreover, even if contracts are awarded, there can be no assurance that the related projects will proceed as planned or at all.

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ITEM 3. Quantitative and Quantitative Disclosures About Market Risk

Not required for a smaller reporting company.

ITEM 4. Controls and Procedures

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

There has been no change in Energy Services of America Corporation’s internal control over financial reporting during Energy Services of America Corporation’s second quarter of fiscal year 2026 that has materially affected, or is reasonably likely to materially affect, Energy Services of America Corporation’s internal control over financial reporting.

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PART II

OTHER INFORMATION

ITEM 1. Legal Proceedings

On November 12, 2021, the Company received a withdrawal liability claim from a pension plan to which the Company made pension contributions for union construction employees performing covered work in a particular jurisdiction. The Company has not performed covered work in their jurisdiction since 2011; however, the Company disagrees with the withdrawal claim and believes it is covered by an exemption under federal law. The demand called for thirty-four quarterly installment payments of $41,000 starting March 15, 2021. The Company must comply with the demand under federal pension law; however, the Company firmly believes no withdrawal liability exists. The Company is in negotiations with the pension fund to resolve the matter and all future payments have been suspended as part of the negotiation. The Company has expensed all $164,000 in payments made through September 30, 2022 and does not expect any future liabilities related to this claim. The Company did not make any payments during the three and six months ended March 31, 2026 and 2025.

ITEM 1A. Risk Factors

Please see the information disclosed in the “Risk Factors” section of our Annual Report on Form 10-K as filed with the Securities and Exchange Commission on December 15, 2025. There have been no material changes to the risk factors since the filing of the Annual Report on Form 10-K.

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

(a)

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

(b)

None.

(c)

The table below summarizes the Company’s repurchased shares of its common stock during the three months ended March 31, 2026:


					Value of Shares		Maximum Number of
					Purchased as Part of		Shares That May Yet Be
	Total Number of Shares		Average Price		Publicly Announced		Purchased Under the
Period	Purchased		Paid Per Share		Plans or Programs		Plans or Programs (1)
Beginning							680,752
January 2026	161		$	8.00	$	1,288	680,591
February 2026	3,501	(2)	$	3.44	$	12,048	680,591
March 2026	—		$	—	$	—	680,591
Total	3,662		$	3.64	$	13,336

(1)

On July 6, 2022, the Company’s Board of Directors authorized a share repurchase program (the “Program”), pursuant to which the Company may, from time to time, purchase shares of its common stock for an aggregate repurchase amount not to exceed 1,000,000 shares, which was approximately 6.0% of its outstanding common stock as of the date of the announcement. The Program does not obligate the Company to purchase any number of shares, and there is no guarantee as to the exact number of shares to be repurchased by the Company.

(2)

Tax settlement on vested Restricted Stock Awards. Repurchases do not affect the maximum number of shares that may yet be purchased under the Program.

ITEM 5. Other Information

During the second fiscal quarter of 2026, none of our directors or officers adopted or terminated any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement,” as that term is used in SEC regulations.

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ITEM 6. Exhibits


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

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

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

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema Document

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		XBRL Taxonomy Extension Label Linkbase Document

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

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SIGNATURES

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

ENERGY SERVICES OF AMERICA CORPORATION


Date:	May 11, 2026	By:	/s/ Douglas V. Reynolds
			Douglas V. Reynolds
			Chief Executive Officer

Date:	May 11, 2026	By:	/s/ Charles P. Crimmel
			Charles P. Crimmel
			Chief Financial Officer