8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K/A

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF

THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): July 13, 2022 (April 29, 2022)

Energy Services of America Corporation

(Exact Name of Registrant as Specified in its Charter)

Delaware	001-32998	20-4606266
(State or other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

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

Registrant’s telephone number, including area code: (304) 522-3868

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Ticker symbol(s)	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 is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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. ¨

Explanatory Note:

On April 29, 2022, Energy Services of America Corporation (“Energy Services”) filed a Current Report on Form 8-K (the “Original 8-K”) reporting the completion of the previously announced purchase of substantially all the assets of Tri-State Paving & Sealcoating, LLC (“Tri-State Paving”), a West Virginia corporation located in Hurricane, West Virginia. In that filing, Energy Services indicated that it would amend the Form 8-K at a later date to include the audited financial statements of Tri-State Paving and the unaudited pro forma financial information required by Item 9.01 of Form 8-K. This amendment to the Original 8-K is being filed to provide such financial information, which is attached to this report as Exhibits 99.1 and 99.2. No other changes have been made to the Original 8-K. The Item 2.01 disclosure in the original Form 8-K filing is repeated below for convenience.

Item 2.01 Completion of Acquisition or Disposition of Assets.

On April 29, 2022, Energy Services of America Corporation (“Energy Services” or the “Company”) completed the previously announced acquisition of the assets of Tri-State Paving & Sealcoating, LLC (“Tri-State Paving” or “Seller”), a West Virginia corporation located in Hurricane, West Virginia.

Pursuant to the Asset Purchase Agreement (“Agreement”) signed on April 6, 2022 and amended on April 29, 2022, Tri-State Paving Acquisition Company, Inc. (“Buyer”), a newly formed subsidiary of Energy Services, acquired substantially all the assets (including but not limited to customer contracts, employees and equipment) of Tri-State Paving for $7.5 million in cash, a $1.0 million Promissory Note (“Note”), and $1.0 million in Energy Services Common Stock (“Stock”). The $7.5 million in cash was funded through a loan with United Bank, Inc., Huntington, West Virginia. David E. Corns will continue his role as President of the Company’s new subsidiary.

As part of the Agreement, the Buyer entered into a four-year, $1.0 million Note with the Seller that requires $250,000 principal installment payments on or before the end of each twelve (12) full calendar month period beginning on the date of the Note, April 29, 2022. Interest payments due shall be calculated on the principal balance remaining and shall be at the rate of 3.5%.

Additionally, the Seller received $1.0 million in Stock pursuant to an exemption under The Securities Act of 1933. Based on the market value calculation in the Agreement, Tri-State Paving received 419,287 shares of Stock. As an additional consideration, if the share price of the Stock is below a closing asking price of $1.50 per share on the date 180 days after issuance, the Company shall pay the Seller, in cash, the difference between $1.50 and the market value for each share of Stock. Payment would be made within thirty (30) days after Seller makes written demand.

Item 9.01 Financial Statements and Exhibits.

(a)    Financial statements of businesses acquired.

The audited balance sheets of Tri-State Paving as of December 31, 2021 and 2020, and the related audited statements of income and members’equity, and cash flows for each of the years in the two-year period ended December 31, 2021, and the related notes and report of the independent auditor thereto, are attached hereto as Exhibit 99.1 and incorporated by reference herein.

The unaudited balance sheets of Tri-State Paving as of March 2022 and the related unaudited statements of income for the three months ended March 31, 2022, thereto, are attached hereto as Exhibit 99.2 and incorporated by reference herein.

(b) Pro forma financial information.

The unaudited pro forma combined condensed balance sheet of Energy Services and Tri-State Paving as of September 30, 2021, and the unaudited pro forma combined condensed statement of income of Energy Services and Tri-State Paving for the year ended September 30, 2021, and the related notes to the unaudited pro forma combined condensed financial information, are attached hereto as Exhibit 99.3 and incorporated by reference herein.

The unaudited pro forma combined condensed balance sheet of Energy Services and Tri-State Paving as of March 31, 2022, and the unaudited pro forma combined condensed statement of income of Energy Services and Tri-State Paving for the six months ended March 31, 2022, and the related notes to the unaudited pro forma combined condensed financial information, are attached hereto as Exhibit 99.4 and incorporated by reference herein.

The pro forma information presented in connection with the consummation of this acquisition is not expected to reflect definitive conclusions regarding allocation of the purchase price or other effects. The Company is continuing to finalize the purchase price allocation. Certain reclassifications have been made to the acquiree’s financial statements to conform to the Company’s reporting format. 

(c) Exhibits.

Exhibit 2.1	Asset Purchase Agreement dated April 6, 2022*
Exhibit 2.2	Addendum dated April 29, 2022*
Exhibit 99.1	The audited balance sheets of Tri-State Paving as of December 31, 2021 and 2020, and the related audited statements of income and members’ equity, and cash flows for each of the years in the two-year period ended December 31, 2021, and the related notes and report of the independent auditor thereto.

Exhibit 99.2 The unaudited balance sheets of Tri-State Paving as of March 2022 and 2021 and the related unaudited statements of income for the three months ended March 31, 2022 and 2021.

Exhibit 99.3 The unaudited pro forma combined condensed balance sheet of Energy Services and Tri-State Paving as of September 30, 2021, and the unaudited pro forma combined condensed statement of income of Energy Services and Tri-State Paving for the year ended September 30, 2021, and the related notes to the unaudited pro forma combined condensed financial information.

Exhibit 99.4	The unaudited pro forma combined condensed balance sheet of Energy Services and Tri-State Paving as of March 31, 2022, and the unaudited pro forma combined condensed statement of income of Energy Services and Tri-State Paving for the six months ended March 31, 2022, and the related notes to the unaudited pro forma combined condensed financial information.
	*Previously filed.

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

	ENERGY SERVICES OF AMERICA CORPORATION
DATE:   July 13, 2022	By:	/s/ Charles Crimmel
		Charles Crimmel
		Chief Financial Officer

EX-99.1

Exhibit 99.1

TRI-STATE PAVING & SEALCOATING, LLC 

(AN S-CORPORATION)

INDEPENDENT AUDITORS’ REPORT AND 

FINANCIAL STATEMENTS

DECEMBER 31, 2021 AND 2020

TRI-STATE PAVING & SEALCOATING, LLC 

TABLE OF CONTENTS 

DECEMBER 31, 2021 AND 2020

Independent Auditors’ Report	1
Financial Statements:
Balance Sheets	3
Statements of Income and Members’ Equity	5
Statements of Cash Flows	7
Notes to the Financial Statements	8

INDEPENDENT AUDITORS’ REPORT

To the Members 

Tri-State Paving & Sealcoating, LLC

Opinion

We have audited the accompanying financial statements of Tri-State Paving & Sealcoating, LLC (a West Virginia corporation), which comprise the balance sheets as of December 31, 2021 and 2020, and the related statements of income and members’ equity and cash flows for the years then ended, and the related notes to the financial statements.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Tri-State Paving & Sealcoating, LLC as of December 31, 2021 and 2020, and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinion

We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of Tri-State Paving & Sealcoating, LLC and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Responsibilities of Management for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about Tri-State Paving & Sealcoating, LLC’s ability to continue as a going concern within one year after the date that the financial statements are available to be issued.

 1

 

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements, including omissions, are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with generally accepted auditing standards, we:

● Exercise professional judgment and maintain professional skepticism throughout the audit.

● Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

● Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Tri-State Paving & Sealcoating, LLC’s internal control. Accordingly, no such opinion is expressed.

● Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.

● Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about Tri-State Paving & Sealcoating, LLC’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.

 

THE FYFFE JONES GROUP, AC

Huntington, West Virginia 

March 2, 2022

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TRI-STATE PAVING & SEALCOATING, LLC 

BALANCE SHEETS 

DECEMBER 31, 2021 AND 2020 

	2021			2020
ASSETS
Current Assets
Cash	$	2,091,932		$	1,406,056
Trade Receivable		415,499			195,664
Tax Credit Receivable		403,454			-
SUTA Receivable		3,164			3,164
Lease Receivable		-			1,650
Prepaid Taxes		27,532			32,683
Prepaid Insurance		60,344			65,970
Inventory		62,238			48,579
Total Current Assets		3,064,163			1,753,766
Property and Equipment
Building		46,099			46,099
Concrete Plant		616,579			616,577
Leasehold Improvements		99,111			56,020
Furniture and Fixtures		30,913			30,913
Machinery and Equipment		2,100,262			1,583,950
Vehicles		4,759,586			4,603,237
Less - Accumulated Depreciation		(3,728,706	)		(3,394,112	)
Total Property and Equipment		3,923,844			3,542,684
Other Assets
Utility Deposit		800			449
Total Other Assets		800			449
TOTAL ASSETS	$	6,988,807		$	5,296,899

See the Accompanying Notes to the Financial Statements and Independent Auditors’ Report

3

TRI-STATE PAVING & SEALCOATING, LLC 

BALANCE SHEETS 

DECEMBER 31, 2021 AND 2020

	2021			2020
LIABILITIES AND MEMBERS’ EQUITY
Current Liabilities
Current Portion of Long Term Debt	$	318,679		$	670,863
Accounts Payable		67,784			55,018
Accrued Tax Liabilities		68,389			24,432
Credit Cards Payable		49,194			28,972
Allowance for Warranty Work		-			11,253
SIMPLE Withholding		8,385			7,520
Insurance Withholding		24,229			217
Accrued Vacation		37,773			26,929
Accrued Wages		70,971			65,542
Total Current Liabilities		645,404			890,746
Long Term Liabilities
CAT Financial Loan		107,415			147,960
Ford Motor Company Loan		46,570			57,828
Peoples Bank Loan		921,016			810,319
Kubota Loan		315,031			127,581
CNH Industrial Loan		87,948			-
Wells Fargo Loan		-			82,788
Less - Current Portion of Long Term Debt		(318,679	)		(670,863	)
Total Long Term Liabilities		1,159,301			555,613
Total Liabilities		1,804,705			1,446,359
Members’ Equity
Members’ Equity		5,184,102			3,850,540
Total Members’ Equity		5,184,102			3,850,540
TOTAL LIABILITIES AND MEMBERS’ EQUITY	$	6,988,807		$	5,296,899

See the Accompanying Notes to the Financial Statements and Independent Auditors’ Report

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TRI-STATE PAVING & SEALCOATING, LLC 

STATEMENTS OF INCOME AND MEMBERS’ EQUITY 

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

	2021		2020
REVENUE EARNED
Service Revenue Earned	$	9,298,688	$	9,630,538
Concrete Sales		144,961		164,452
Total Revenue Earned		9,443,649		9,794,990
COST OF REVENUES EARNED
Direct Material		1,636,635		1,734,704
Total Cost of Revenues Earned		1,636,635		1,734,704
GROSS PROFIT		7,807,014		8,060,286
OPERATING EXPENSES
Advertising		32,821		11,246
Bank and Credit Card Fees		7,380		5,809
Computer Expense		80,795		68,285
Contributions		4,349		4,678
Damage Claim		7,558		1,341
Depreciation Expense		964,376		836,505
Dues and Subscriptions		9,322		10,497
Equipment Lease		2,210		106
Fuel Expense		348,871		247,209
Insurance - General		229,688		207,588
Insurance - Workers Comp		129,929		86,629
Insurance - Health		142,415		132,158
Insurance - Life		-		887
Interest Expense		32,345		48,175
Licenses and Permits		4,341		3,737
Licenses - Vehicle		59,296		37,550
Janitorial		11,791		12,781
Meals		21,641		55,709
Medical Expense		14,330		8,983
Office Expense		30,269		53,843
Payroll Processing Fee		18,057		15,657
Professional Fees		77,771		101,006
Rent Expense		170,479		206,299
Repairs and Maintenance		330,991		345,608
Retirement Expense		33,589		33,867
Salaries		3,155,997		3,386,233
Security and Safety		7,932		6,707
Supplies		120,583		122,359
Travel		23,937		57,464
Taxes - Other		338,553		227,215
Taxes - Payroll		275,233		271,024
Telephone Expense		4,002		7,195
Uniforms		9,907		13,579
Utilities		89,429		93,431
Total Expense		6,790,187		6,721,360
NET ORDINARY INCOME (LOSS)		1,016,827		1,338,926

See the Accompanying Notes to the Financial Statements and Independent Auditors’ Report

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TRI-STATE PAVING & SEALCOATING, LLC 

STATEMENTS OF INCOME AND MEMBERS’ EQUITY 

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 

	2021			2020
OTHER INCOME
Interest Income	$	-		$	67
Gain on Asset Disposal		256,892			28,676
Government Grants		670,721			574,600
Other Income		-			8,701
Total Other Income		927,613			612,044
OTHER EXPENSE
Loss on Asset Disposal		8,064			16,162
Total Other Expense		8,064			16,162
NET OTHER INCOME AND EXPENSE		919,549			595,882
NET INCOME (LOSS)	$	1,936,376		$	1,934,808
Beginning Members’ Equity		3,850,540			2,479,974
Less: Members’ Distributions		(602,814	)		(564,242	)
ENDING MEMBERS’ EQUITY	$	5,184,102		$	3,850,540

See the Accompanying Notes to the Financial Statements and Independent Auditors’ Report

6

TRI-STATE PAVING & SEALCOATING, LLC 

STATEMENTS OF CASH FLOWS 

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 

	2021			2020
CASH FLOW FROM OPERATING ACTIVITIES
Net Income (Loss)	$	1,936,376		$	1,934,808
Adjustments to reconcile Net Income (Loss) to net cash provided by operating activities:
Depreciation and Amortization		964,376			836,505
Loss on Disposal of Assets		8,064			16,162
Gain on Sale of Assets		(256,892	)		(28,676	)
(Increase) decrease in:
Trade Receivable		(219,835	)		196,148
Insurance Receivable		-			12,289
Tax Credit Receivable		(403,454	)		-
SUTA Receivable		-			(3,164	)
Lease Receivable		1,650			(1,650	)
Prepaid Taxes		5,152			(32,683	)
Prepaid Insurance		5,626			(56,881	)
Inventory		(13,659	)		(9,000	)
Utility Deposit		(351	)		1,421
Increase (decrease) in:
Accounts Payable		12,766			(2,346	)
Accrued Tax Liabilities		43,957			274
Credit Cards Payable		20,222			(11,152	)
Allowance for Warranty Work		(11,253	)		11,253
SIMPLE Withholding		865			7,520
Insurance Withholding		24,012			(10,294	)
Accrued Vacation		10,844			(47,659	)
Accrued Wages		5,429			9,705
Net Cash Provided (Used) By Operating Activities		2,133,895			2,822,580
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of Fixed Assets		(1,466,234	)		(1,599,122	)
Sale of Fixed Assets		369,525			135,670
Net Cash Provided (Used) By Investing Activities		(1,096,709	)		(1,463,452	)
CASH FLOW FROM FINANCING ACTIVITIES
Shareholder Distributions		(602,814	)		(564,242	)
Loan from CAT Financial		-			202,723
(Reduction in) CAT Financial Loans		(40,545	)		(137,963	)
Loan from Wells Fargo		-			93,318
(Reduction in) Wells Fargo Loans		(82,788	)		(51,030	)
Loan from Kubota		270,819			127,500
(Reduction in) Kubota Loans		(83,369	)		(70,936	)
Loan from Peoples Bank		481,901			439,116
(Reduction in) Peoples Bank Loans		(371,204	)		(664,149	)
Loan from Ford		-			60,417
(Reduction in) Ford Loan		(11,258	)		(2,590	)
Loan from CNH Industrial		98,998			-
(Reduction in) CNH Industrial Loan		(11,050	)		-
(Reduction in) Williamstown Bank Loan		-			(72,176	)
Net Cash Provided (Used) By Financing Activities		(351,310	)		(640,012	)
NET CASH INCREASE (DECREASE)		685,876			719,116
CASH AT BEGlNNlNG OF YEAR		1,406,056			686,940
CASH AT END OF YEAR	$	2,091,932		$	1,406,056
SUPPLEMENTAL DISCLOSURES:
Interest Paid	$	32,345		$	48,175
Income Taxes Paid	$	-		$	-

See the Accompanying Notes to the Financial Statements and Independent Auditors’ Report

7

TRI-STATE PAVING & SEALCOATING, LLC 

NOTES TO THE FINANCIAL STATEMENTS 

DECEMBER 31, 2021 AND 2020

NOTE 1 – NATURE OF OPERATIONS:

Tri-State Paving & Sealcoating, LLC (the Company), was formed in 2010, and is a Hurricane, West Virginia based limited liability company. The Company is involved in paving, sealcoating and repair and maintenance projects for customers, most of whom are utility companies located in West Virginia. Additional contracts have been awarded in the Chattanooga, Tennessee, which includes operations in both Tennessee and northern Georgia.

A second activity is a leading edge, ready mix concrete plant which produces ready-mixed concrete and construction aggregates covering several counties in West Virginia from the Greater Kanawha Valley to Mason County, West Virginia. Tri-State Paving & Sealcoating, LLC performs this activity in the form of doing business as Mozack Concrete. Mozack Concrete is not a separate legal entity, and the financial activity for Mozack Concrete is presented within the Tri-State Paving & Sealcoating, LLC activity.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

This summary of significant accounting policies of the Company is presented to assist in understanding the Company’s financial statements. These financial statements and notes are representations of the Company’s management who are responsible for their integrity and objectivity. These accounting policies conform to generally accepted accounting principles and have been consistently applied in the preparation of the financial statements.

Revenues and Cost Recognition

For service and maintenance contracts for which the Company has the right to consideration from the customer in an amount that corresponds directly with the value to the customer of the Company’s performance completed to date, revenue is recognized when services are performed. For these contracts, the Company typically bills the customer a fixed amount for each hour of labor provided, as well as a fixed markup on materials used. Revenue recognized on these contracts is calculated in the amount to which the Company has a right to invoice for services performed (an output method utilizing a practical expedient). Contract costs include all direct material and labor costs, subcontract costs and those indirect costs related to contract performance, such as supplies, repairs and insurance costs. General and administrative costs are charged to expense as incurred.

For service and maintenance contracts that do not meet the preceding criteria, revenue is recognized when services are performed using the same methodology as described above. Very few contracts, if any, year to year will not meet the preceding criteria.

Revenues from rendering of services, net of contract discounts and allowances (including cash discounts given to customers), are included in service revenues earned, net.

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TRI-STATE PAVING & SEALCOATING, LLC 

NOTES TO THE FINANCIAL STATEMENTS 

DECEMBER 31, 2021 AND 2020

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.):

Cash and Cash Equivalents

For purposes of reporting cash flows, all highly liquid financial instruments with original maturity dates of less than three months are considered to be cash equivalents.

Trade Receivables

Trade accounts receivable are stated at the amount management expects to collect from outstanding balances. Management provides for probable uncollectible amounts through a charge to earnings and a credit to a valuation allowance based on its assessment of the current status of individual accounts. Balances still outstanding after management has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to trade accounts receivable. Changes in the valuation allowance have not been material to the financial statements. The Company does not bill for retainage on its contracts. The Company did not recognize any bad debts for the year ended December 31, 2021 and 2020. The Company performs ongoing credit evaluations of the customers’ financial condition and generally requires no collateral from the customers. As of December 31, 2021 and 2020, all accounts receivable amounts are deemed to be collectible, therefore an allowance for doubtful accounts has not been recorded.

Inventory

Inventories are valued at the lower of cost or net realizable value.

Property and Equipment

Property and equipment are capitalized at cost. Depreciation is calculated using the straight-line method for financial reporting purposes, over the estimated useful lives of the assets which range from 3 to 40 years. Maintenance and repairs are charged to expense as incurred. Retirements and other disposals of property are removed from the accounts at their carrying values; any gains or losses resulting from dispositions are reflected in income. Depreciation expense was $964,376 for the year ended December 31, 2021 and $836,505 for the year ended December 31, 2020.

Income Taxes

The Company, with the consent of its members, has elected under the Internal Revenue Code to be an S-Corporation. In lieu of corporation income taxes, the members of an S-Corporation are taxed on their proportionate share of the Company’s taxable income. Therefore, no provision or liability for federal income taxes has been included in these financial statements.

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TRI-STATE PAVING & SEALCOATING, LLC 

NOTES TO THE FINANCIAL STATEMENTS 

DECEMBER 31, 2021 AND 2020

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.):

U.S. generally accepted accounting principles require the Company to account for uncertain tax positions. The Company is not aware of any significant tax positions taken by management which are subject to uncertainty or pose a reasonable possibility of change by Federal or State tax authorities. With few exceptions, the Company is no longer subject to U.S. Federal or State income tax examinations by tax authorities for years before 2018.

Presentation of Sales Taxes

The State of West Virginia imposes a sales tax of 6.0% and additional percentages up to 1.0% for specific municipalities on all of the Company’s sales to nonexempt customers. The Company also operates in the State of Tennessee which follows the same policies as West Virginia although sales tax rates are 7.0% with additional percentages up to 1.5% to 2.75% for specific municipalities. The Company collects that sales tax from customers and remits the entire amount to the State. The Company’s accounting policy is to exclude the tax collected and remitted to the State from revenues and cost of sales.

Advertising

The Company expenses advertising costs as incurred. During the years ended December 31, 2021 and 2020, the Company incurred $32,821 and $11,246 in advertising expense respectively, which is included in advertising expense on the accompanying statements of income and retained earnings.

Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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 revenues and expenses during the reporting period. Actual results could differ from those estimates.

Compensated Absences

Employees are eligible for vacation hours after an employee’s one year, hire date anniversary. As of January 1, 2019, vacation hours could be rolled over into subsequent years. As of December 31, 2021 and 2020, the Company was liable for $37,773 and $26,929, respectively, of equivalent compensation.

Warranties

The company guarantees its work for one year after the date of project completion. The Company accrues an estimate of its warranty liability cost on a case by case basis once a job has been assessed it will need warranty work.

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TRI-STATE PAVING & SEALCOATING, LLC 

NOTES TO THE FINANCIAL STATEMENTS 

DECEMBER 31, 2021 AND 2020

NOTE 3 – TRADE RECEIVABLE:

As of December 31, 2021, there were no receivables over 60 days old. All completed jobs were billed prior to the year end. Trade receivables are generally extended on a short term basis and thus do not bear interest or finance charges.

The beginning and ending balances for accounts receivable were as follows:

	December 31:
	2021		2020		2019
Accounts receivable billed for contracts with customers	$	415,499	$	195,664	$	391,812

NOTE 4 – INVENTORY:

Inventories at December 31, 2021 consist of the following:

Raw Material-Concrete Plant	$	37,511
Supplies		23,804
Paving Material		923
Total	$	62,238

Inventories at December 31, 2020 consist of the following:

Raw Material-Concrete Plant	$	47,640
Paving Material		939
Total	$	48,579

NOTE 5 – LINE OF CREDIT:

The Company has available a secured line of credit with Peoples Bank with maximum borrowings of $600,000 maturing April 22, 2022, at which point the balance will be due in full. The line of credit had a balance of $0 as of December 31, 2021 and $0 as of December 31, 2020. The line of credit is guaranteed by all inventory, accounts, chattel paper, equipment, and general intangibles. The interest rate on borrowings for the line of credit is prime plus 0.5%, or 3.75% at December 31, 2021.

NOTE 6 – LONG TERM LIABILITIES:

The Company has an installment loan with Peoples Bank at 2.85% APR with a December 31, 2021 and 2020 balance of $601,706 and $439,116, respectively. This loan is secured by all inventory, accounts, chattel paper, equipment, and general intangibles and reaches full maturity in April, 2026.

11

TRI-STATE PAVING & SEALCOATING, LLC 

NOTES TO THE FINANCIAL STATEMENTS 

DECEMBER 31, 2021 AND 2020

NOTE 6 – LONG TERM LIABILITIES (CONT.):

The Company had an installment loan with Peoples Bank at 3.25% APR with a December 31, 2021 and 2020 balance of $0 and $371,203, respectively. This loan was paid off in 2021.

The Company has an installment loan with Peoples Bank at 3.13% APR with a December 31, 2021 and 2020 balance of $319,311 and $0, respectively. This loan is secured by all inventory, accounts, chattel paper, equipment, and general intangibles and reaches full maturity in April, 2027.

The Company has an interest-free installment loan with Ford Motor Company with a December 31, 2021 and 2020 balance of $46,570 and $57,828, respectively. This loan is secured by a 2021 Ford F-150 and reaches full maturity in July, 2026.

The Company has an interest-free installment loan with CNH Industrial with a December 31, 2021 and 2020 balance of $87,947 and $0, respectively. The loan is secured by equipment.

The Company had an installment loan with Wells Fargo at 1.5% APR with a December 31, 2021 and 2020 balance of $0 and $82,788, respectively. This loan was paid off in 2021.

The Company has seven interest-free installment loans with Kubota Credit Corporation with a December 31, 2021 and 2020 balance of $315,031 and $127,581, respectively. The loans are secured by various equipment and reach full maturity in December, 2023 and March, 2024.

The Company has two interest-free installment loans with CAT Financial with a December 31, 2021 and 2020 balance of $107,415 and $147,960. This loan is secured by various equipment and reach full maturity in December, 2023 and April, 2025.

Outstanding Debt at December 31 is as follows:

	2021			2020
Total Long Term Liabilities	$	1,477,980		$	1,226,476
Less: Current Maturities		(318,679	)		(670,863	)
Total Long Term Liabilities	$	1,159,301		$	555,613

Current maturities for Long-Term Debt for each of the next five years are as follows:

January 1, 2022 - December 31, 2022	$	318,679
January 1, 2023 - December 31, 2023		318,679
January 1, 2024 - December 31, 2024		259,467
January 1, 2025 - December 31, 2025		218,967
January 1, 2026 - December 31, 2026		42,876
Thereafter		319,312
	$	1,477,980

12

TRI-STATE PAVING & SEALCOATING, LLC 

NOTES TO THE FINANCIAL STATEMENTS

DECEMBER 31, 2021 AND 2020

NOTE 7 – MEMBERS’ EQUITY:

The Company has two members, Un K. Corns and David Corns, each holding 52% and 48% ownership of the Company, respectively.

NOTE 8 – PENSION PLANS:

The Company has established a prototype SIMPLE IRA plan for eligible employees. Participants are required to earn at least $5,000 in compensation to be eligible. Participants may make elective contributions into the Plan and the Company will match contributions up to 3% of their compensation. The Company contributed $33,589 and $33,867 to the plan for the years ending December 31, 2021 and 2020 respectively.

NOTE 9 – LEASES:

The Company occasionally rents equipment under month-to-month operating leases. The equipment rent expense for the years ending December 31, 2021 and 2020 was $2,210 and $38,661 respectively.

The Company rents lot space to accommodate equipment in use at their Georgia location under month to month leases. The lot space rent expense for the years ending December 31, 2021 and 2020 was $16,650 and $22,200, respectively.

The Company executed a multiyear building lease for storage, repairs, and office space to accommodate equipment in use at their Tennessee location in September, 2021. The terms of the lease are $5,375 monthly for 36 months.

The Company executed a multiyear land lease for operating a cement batch plant and storing equipment in July, 2014 and amended the lease in July, 2017, and again in July, 2019. The terms of the current lease are $3,000 monthly for 60 months which includes property taxes.

The Company executed a multiyear, triple net lease for its office space and warehouse space in August, 2017. The terms of the lease are $7,000 monthly for 60 months with an option to purchase. The Company previously utilized a building owned by the Company.

Future minimum lease payments are as follows:    

Periods ended:
January 1, 2022 - December 31, 2022	$	149,500
January 1, 2023 - December 31, 2023		100,500
January 1, 2024 - December 31, 2024		58,000
Total	$	308,000

13

TRI-STATE PAVING & SEALCOATING, LLC 

NOTES TO THE FINANCIAL STATEMENTS 

DECEMBER 31, 2021 AND 2020

NOTE 10 – CONCENTRATION OF CREDIT RISK:

The Company maintains cash balances with several financial institutions located in Cabell and Putnam County, West Virginia. The balances are insured by the Federal Deposit Insurance Corporation up to $250,000. At December 31, 2021, the Company had $1,895,514 exceeding the federal insured limit.

Operating revenue consisted of paving related services and concrete related sales. For the years ended December 31, 2021 and 2020, paving related revenue consisted of 98% and 98%, respectively, of all operating revenue, with concrete sales consisting of the remaining 2% and 2%, respectively.

The Company extends credit to regular customers and routinely assesses the financial strength of its customers, and as a consequence, believes that its trade accounts receivable credit risk is limited and therefore, has not included an allowance for doubtful accounts.

NOTE 11 – PAYROLL PROTECTION PROGRAM:

During the year ended December 31, 2021, the Company received a loan in the amount of $670,720 under the Payroll Protection Program (PPP Loan) from the Small Business Administration (SBA). Under the terms of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), PPP Loan recipients can apply for, and be granted forgiveness for, all or a portion of the PPP Loan and accrued interest. Such forgiveness will be determined, subject to limitations, based on the use of PPP Loan proceeds for payment of payroll costs and any payments of mortgage interest, rent, utilities, covered operations expenditures, covered property damage, covered supplier costs, and covered worker protection expenditures, and retention of employees and maintaining salary levels.

Management has elected to analogize International Accounting Standards (IAS) 20 – Accounting for Government Grants and Disclosure of Government Assistance to recognize the Company’s PPP Loan. IAS 20 provides a model for the accounting of different forms of government assistance, which includes forgivable loans. Under this model, government assistance is not recognized until there is reasonable assurance (similar to the probable threshold in U.S. GAAP) that any conditions attached to the assistance will be met and the assistance will be received.

During 2021, the Company received notification from the SBA that this PPP Loan has been forgiven. As a result, in accordance with IAS 20, the Company has recognized the use of $670,720 of the PPP Loan proceeds as of December 31, 2021 as Other Income.

14

TRI-STATE PAVING & SEALCOATING, LLC 

NOTES TO THE FINANCIAL STATEMENTS 

DECEMBER 31, 2021 AND 2020

NOTE 12 – EMPLOYEE RETENTION CREDIT:

Subsequent to December 31, 2021, the Company applied for the Employee Retention Credit (ERC), which is a credit against certain payroll taxes allowed to an eligible employer for qualifying wages, as established by the CARES Act and further amended by the Consolidated Appropriations Act (CAA) and the American Rescue Plan (ARP). In accordance with Internal Revenue Service guidance and U.S. generally accepted accounting principles, the Company is reporting the entire credit amount of $403,454 as a current asset at December 31, 2021, tax credit receivable, and a reduction of salaries for the year ended December 31, 2021.

NOTE 13 – SUBSEQUENT EVENTS:

The Company’s operations may be affected by the ongoing outbreak of the ongoing coronavirus disease (COVID-19) which was declared a pandemic by the World Health Organization in March 2020. The ultimate disruption which may be caused by the outbreak is uncertain; however, it may result in a material adverse impact on the Company’s financial position, operations, and cash flows.

Management has evaluated subsequent events through March 2, 2022, the date the financial statements were available to be issued.

15

EX-99.2

Exhibit 99.2

TRI-STATE PAVING & SEALCOATING, LLC

Balance Sheets

	March 31,			March 31,
	2022			2021
Assets
Current Assets
Cash and cash equivalents	$	1,336,933		$	1,379,285
Accounts Receivable-Trade		264,787			415,693
Other Receivables		406,618			-
Prepaid expenses and other		247,767			228,343
Total Current Assets		2,256,105			2,023,321
Property, Plant, and Equipment, at cost		7,500,537			7,165,572
less Accumulated Depreciation		(3,719,110	)		(3,437,420	)
		3,781,427			3,728,152
Total Assets	$	6,037,532		$	5,751,473
Liabilities and Stockholders' Equity
Current Liabilities
Current Maturities of Long Term Debt	$	318,679		$	598,661
Accounts Payable		250,334			171,201
Accrued Expenses and other Current Liabilities		261,115			129,132
Total Current Liabilities		830,128			898,994
Long Term Debt, Non-current Portion		857,290			1,554,610
Total Liabilities		1,687,418			2,453,604
Stockholders' Equity
Retained Earnings		4,350,114			3,297,869
Total Stockholders' Equity		4,350,114			3,297,869
Total Liabilities & Stockholders' Equity	$	6,037,532		$	5,751,473

TRI-STATE PAVING & SEALCOATING, LLC

Statements of Income

	Three Months Ended			Three Months Ended
	March 31,			March 31,
	2022			2021
Total Revenue	$	1,458,479		$	1,039,211
Cost of Revenues		1,549,438			1,219,574
Gross loss		(90,959	)		(180,363	)
Selling and administrative expenses		494,758			405,871
Loss from operations		(585,717	)		(586,234	)
Other income (expense)
Gain on sale of equipment		9,595			45,403
Net loss	$	(576,122	)	$	(540,832	)

EX-99.3

Exhibit 99.3

ENERGY SERVICES OF AMERICA CORPORATION

CONSOLIDATED PRO FORMA BALANCE SHEETS

As of September 30, 2021

Assets
Current assets
Cash and cash equivalents	$	9,444,115
Accounts receivable-trade		21,092,517
Allowance for doubtful accounts		(70,310	)
Retainages receivable		917,526
Other receivables		543,328
Contract assets		8,730,402
Prepaid expenses and other		3,541,000
Total current assets		44,198,578
Property, plant and equipment, at cost		66,854,799
less accumulated depreciation		(39,335,686	)
Total fixed assets		27,519,113
Right of use asset, finance lease		228,300
Acquired intangible assets, net		4,643,521
Goodwill		3,426,070
Total assets	$	80,015,582
Liabilities and shareholders' equity
Current liabilities
Current maturities of long-term debt	$	5,232,574
Lines of credit and short term borrowings		5,040,250
Accounts payable		7,285,392
Accrued expenses and other current liabilities		5,599,702
Contract liabilities		3,153,290
Total current liabilities		26,311,208
Long-term debt, less current maturities		14,637,519
Deferred income taxes payable		1,758,433
Total liabilities		42,707,160
Shareholders' equity
Preferred stock, $.0001 par value, Authorized 1,000,000 shares, 206 issued at September 30,  2021		-
Common stock, $.0001 par value
Authorized 50,000,000 shares 14,839,836 issued and 13,621,406 outstanding at September 30, 2021 prior to acquisition and 419,287 shares issued at acquisition closing, 2,626,492 shares converted from 206 preferred shares in October 2022		1,526
Treasury stock, 1,218,430 shares at September 30, 2021		(122	)
Additional paid in capital		61,670,657
Retained earnings (deficit)		(24,363,639	)
Total shareholders' equity		37,308,422
Total liabilities and shareholders' equity	$	80,015,582

ENERGY SERVICES OF AMERICA CORPORATION

CONSOLIDATED PRO FORMA STATEMENTS OF INCOME

For the year ended September 30, 2021

Revenue	$	131,909,475
Cost of revenues		116,534,866
Gross profit		15,374,609
Selling and administrative expenses		14,444,059
Income from operations		930,550
Other income (expense)
Interest income		286,645
Paycheck Protection Program (“PPP”) loan forgiveness & other grants		10,509,821
Other nonoperating expense		(714,030	)
Interest expense		(928,965	)
Gain on sale of equipment		930,481
		10,083,952
Income before income taxes		11,014,502
Income tax expense		245,871
Net income		10,768,631
Dividends on preferred stock		284,238
Net income available to common shareholders	$	10,484,393
Weighted average shares outstanding-basic		14,040,693
Weighted average shares-diluted		17,407,711
Earnings  per share available to common shareholders	$	0.75
Earnings per share-diluted available to common shareholders	$	0.60

	Energy Services of America Corporation Consolidated Balance Sheets (Audited) September 30, 2021			Purchase Allocation Entry			Pro Forma Adjusting Entries				Energy Services of America Corporation Consolidated Pro Forma Balance Sheets September 30, 2021
Assets
Current assets
Cash and cash equivalents	$	8,226,739		$	-		$	1,217,376		(g)	$	9,444,115
Accounts receivable-trade		21,092,517			-			-				21,092,517
Allowance for doubtful accounts		(70,310	)					-				(70,310	)
Retainages receivable		917,526			-			-				917,526
Other receivables		543,328			-			-				543,328
Contract assets		8,730,402			-			-				8,730,402
Prepaid expenses and other		3,541,000			-			-				3,541,000
Total current assets		42,981,202			-			1,217,376				44,198,578
Property, plant and equipment, at cost		61,145,705			5,709,094	(a)		-				66,854,799
less accumulated depreciation		(38,195,686	)		-			(1,140,000	)	(h)		(39,335,686	)
Total fixed assets		22,950,019			5,709,094			(1,140,000	)			27,519,113
Right of use asset, finance lease		-			-			228,300		(i)		228,300
Acquired intangible assets, net		2,425,923			2,505,598	(b)		(288,000	)	(j)		4,643,521
Goodwill		1,814,317			1,611,753	(c)		-				3,426,070
Total assets	$	70,171,461		$	9,826,445		$	17,676			$	80,015,582
Liabilities and shareholders' equity
Current liabilities
Current maturities of long-term debt	$	3,401,574		$	-		$	1,831,000		(k)	$	5,232,574
Lines of credit and short term borrowings		5,040,250			-			-				5,040,250
Accounts payable		7,285,392			-			-				7,285,392
Accrued expenses and other current liabilities		5,599,702			-			-				5,599,702
Contract liabilities		3,153,290			-			-				3,153,290
Income tax payable		-
Total current liabilities		24,480,208			-			1,831,000				26,311,208
Long-term debt, less current maturities		9,020,774			8,826,445	(d)		(3,209,700	)	(l) (k)		14,637,519
Deferred income taxes payable		2,033,433			-			(275,000	)	(m)		1,758,433
Total liabilities		35,534,415			8,826,445			(3,484,700	)			42,707,160
Shareholders' equity
Preferred stock, $.0001 par value, Authorized 1,000,000 shares, 206 issued at September 30,  2021		-			-			-				-
Common stock, $.0001 par value
Authorized 50,000,000 shares 14,839,836 issued and 13,621,406 outstanding at September 30, 2021 prior to acquisition and 419,287 shares issued at acquisition closing, 2,626,492 shares converted from 206 preferred shares in October 2022		1,484			42	(e)		-				1,526
Treasury stock, 1,218,430 shares at September 30, 2021		(122	)									(122	)
Additional paid in capital		60,670,699			999,958	(f)		-				61,670,657
Retained earnings (deficit)		(26,035,015	)		-			1,671,376		(n)		(24,363,639	)
Total shareholders' equity		34,637,046			1,000,000			1,671,376				37,308,422
Total liabilities and shareholders' equity	$	70,171,461		$	9,826,445		$	17,676			$	80,015,582

 

(a)	Property, plant and equipment acquired in purchase at stepped up value
(b)	Non-compete valued at $379,149, customer list valued at $1,929,144, and tradename values at $197,335
(c)	Goodwill acquired in purchase allocation
(d)	Bank debt to finance purchase $7,500,000, fair value of seller note $936,000, debt assumed $390,000,
(e)	Par value of 419,287 common shares issued as purchase consideration
(f)	Value of 419,287 common shares issued as purchase consideration less par value
(g)	Cash flow effect of adjustments
(h)	Depreciation based on stepped up asset value, $95,000 x 12 months
(i)	Right to use finance leases, $365,000 less $136,700 amortization
(j)	Amortization of intangible assets, $24,000 x 12 months
(k)	Reclass current portion of long-term debt, $1,431,000 bank debt, $250,000 seller note, $150,000 finance leases
(l)	Note payable from right to use finance lease, $365,000 plus $29,300 accreted interest less $150,000 in lease payments, less $250,000 seller note payment, less $1,373,000 in bank payments
(m)	Current year deferred income tax adjustment
(n)	Net income fromTSP audited financial statements, partially offset by pro forma income statement adjustments

	Energy Services of America Corporation Consolidated Statements of Income (Audited) For the Year Ended September 30, 2021			Tri-State Paving & Sealcoating Statements of Income (Audited) For the Year Ended December 31, 2021			Pro Forma Adjustments				Energy Services of America Corporation Consolidated Pro Forma Statements of Income For the years Ended September 30, 2021
Revenue	$	122,465,826		$	9,443,649		$	-			$	131,909,475
Cost of revenues		109,544,804			7,614,062			(624,000	)	(a)		116,534,866
Gross profit		12,921,022			1,829,587			624,000				15,374,609
Selling and administrative expenses		13,813,644			780,415			(150,000	)	(b)		14,444,059
(Loss) income from operations		(892,622	)		1,049,172			774,000				930,550
Other income (expense)
Interest income		286,645			-			-				286,645
Paycheck Protection Program ("PPP") loan forgiveness & other grants		9,839,100			670,721			-				10,509,821
Other nonoperating (expense) income		(289,330	)		-			(424,700	)	(c)		(714,030	)
Interest expense		(557,320	)		(32,345	)		(339,300	)	(d)		(928,965	)
Gain on sale of equipment		681,653			248,828			-				930,481
		9,960,748			887,204			(764,000	)			10,083,952
Income before income taxes		9,068,126			1,936,376			10,000				11,014,502
Income tax (benefit) expense		(29,129	)		-			275,000		(e)		245,871
Net income		9,097,255			1,936,376			(265,000	)			10,768,631
Dividends on preferred stock		284,238			-			-				284,238
Net income (loss) available to common shareholders	$	8,813,017		$	1,936,376		$	(265,000	)		$	10,484,393
Weighted average shares outstanding-basic		13,621,406						419,287				14,040,693
Weighted average shares-diluted		16,988,424						419,287				17,407,711
Earnings  per share available to common shareholders	$	0.647									$	0.747
Earnings per share-diluted available to common shareholders	$	0.519									$	0.602

(a)	$176,000 depreciation expense increase for the stepped up value of property, plant and equipment, and $800,000 salary & burden expense decrease for employees not retained and salary adjustments
(b)	$150,000 decrease to building lease expense, $136,700 reclassed to other expense (finance lease amortization) and $13,300 reclassed to interest expense
(c)	$136,700 right to use-finance lease amortization expense and $288,000 intangible asset amortization expense
(d)	$326,000 increase in interest expense for debt incurred to finance purchase and $13,300 increase from finance lease
(e)	$342,000 tax expense adjustment due to TSP previously filing as an "S" corporation during audited periods and $67,000 tax benefit of pro forma adjustments

EX-99.4

Exhibit 99.4

ENERGY SERVICES OF AMERICA CORPORATION

CONSOLIDATED PRO FORMA BALANCE SHEETS

As of March 31, 2022

	2022
Assets
Current assets
Cash and cash equivalents	$	8,178,685
Accounts receivable-trade		16,585,025
Allowance for doubtful accounts		(70,310	)
Retainages receivable		1,924,608
Other receivables		49,107
Contract assets		7,697,889
Prepaid expenses and other		5,272,735
Total current assets		39,637,739
Property, plant and equipment, at cost		67,560,533
less accumulated depreciation		(39,843,861	)
Total fixed assets		27,716,672
Right of use asset, finance lease		296,650
Acquired intangible assets, net		4,591,665
Goodwill		3,426,070
Total assets	$	75,668,796
Liabilities and shareholders' equity
Current liabilities
Current maturities of long-term debt	$	4,700,128
Lines of credit and short term borrowings		2,236,362
Accounts payable		6,846,215
Accrued expenses and other current liabilities		6,121,518
Contract liabilities		4,213,471
Total current liabilities		24,117,694
Long-term debt, less current maturities		14,492,910
Deferred income taxes payable		2,393,098
Total liabilities		41,003,702
Shareholders' equity
Preferred stock, $.0001 par value, Authorized 1,000,000 shares, no shares outstanding at March 31, 2022		-
Common stock, $.0001 par value
Authorized 50,000,000 shares 17,466,328 issued and 16,247,898 outstanding at March 31, 2022 prior to acquisition and 419,287 shares issued at acquisition closing		1,789
Treasury stock, 1,218,430 shares at March 31, 2022		(122	)
Additional paid in capital		60,460,132
Retained earnings (deficit)		(25,796,705	)
Total shareholders' equity		34,665,094
Total liabilities and shareholders' equity	$	75,668,796

ENERGY SERVICES OF AMERICA CORPORATION

CONSOLIDATED PRO FORMA STATEMENTS OF INCOME

For the Six Months Ended March 31, 2022

	2022
Revenue	$	81,900,182
Cost of revenues		72,950,149
Gross profit		8,950,033
Selling and administrative expenses		7,918,142
Income from operations		1,031,891
Other income (expense)
Interest income		576
Other nonoperating expense		(475,588	)
Interest expense		(512,141	)
Gain on sale of equipment		359,792
		(627,361	)
Income before income taxes		404,530
Income tax expense		166,220
Net income available to common shareholders	$	238,310
Weighted average shares outstanding-basic		16,667,185
Weighted average shares-diluted		16,667,185
Earnings  per share available to common shareholders	$	0.01
Earnings per share-diluted available to common shareholders	$	0.01

	Energy Services of America Corporation Consolidated Balance Sheets  March 31, 2022			Purchase Entry			Pro Forma Adjusting Entries				Energy Services of America Corporation Consolidated Pro Forma Balance Sheets March 31, 2022
Assets
Current assets
Cash and cash equivalents	$	8,362,452		$	-		$	(183,767	)	(g)	$	8,178,685
Accounts receivable-trade		16,585,025			-			-				16,585,025
Allowance for doubtful accounts		(70,310	)					-				(70,310	)
Retainages receivable		1,924,608			-			-				1,924,608
Other receivables		49,107			-			-				49,107
Contract assets		7,697,889			-			-				7,697,889
Prepaid expenses and other		5,272,735			-			-				5,272,735
Total current assets		39,821,506			-			(183,767	)			39,637,739
Property, plant and equipment, at cost		61,851,439			5,709,094	(a)		-				67,560,533
less accumulated depreciation		(39,273,861	)		-			(570,000	)	(h)		(39,843,861	)
Total fixed assets		22,577,578			5,709,094			(570,000	)			27,716,672
Right of use asset, finance lease		-			-			296,650		(i)		296,650
Acquired intangible assets, net		2,230,067			2,505,598	(b)		(144,000	)	(j)		4,591,665
Goodwill		1,814,317			1,611,753	(c)		-				3,426,070
Total assets	$	66,443,468		$	9,826,445		$	(601,117	)		$	75,668,796
Liabilities and shareholders' equity
Current liabilities
Current maturities of long-term debt	$	2,869,128		$	-		$	1,831,000		(k)	$	4,700,128
Lines of credit and short term borrowings		2,236,362			-			-				2,236,362
Accounts payable		6,846,215			-			-				6,846,215
Accrued expenses and other current liabilities		6,121,518			-			-				6,121,518
Contract liabilities		4,213,471			-			-				4,213,471
Income tax payable		-
Total current liabilities		22,286,694			-			1,831,000				24,117,694
Long-term debt, less current maturities		7,879,315			8,826,445	(d)		(2,212,850	)	(l)(k)		14,492,910
Deferred income taxes payable		2,265,498			-			127,600		(m)		2,393,098
Total liabilities		32,431,507			8,826,445			(2,085,250	)			41,003,702
Shareholders' equity
Preferred stock, $.0001 par value, Authorized 1,000,000 shares, no shares outstanding at March 31, 2022		-			-			-				-
Common stock, $.0001 par value
Authorized 50,000,000 shares 17,466,328 issued and 16,247,898 outstanding at March 31, 2022 prior to acquisition and 419,287 shares issued at acquisition closing		1,747			42	(e)		-				1,789
Treasury stock, 1,218,430 shares at March 31, 2022		(122	)									(122	)
Additional paid in capital		59,460,174			999,958	(f)		-				60,460,132
Retained earnings (deficit)		(25,449,838	)		-			(346,867	)	(n)		(25,796,705	)
Total shareholders' equity		34,011,961			1,000,000			(346,867	)			34,665,094
Total liabilities and shareholders' equity	$	66,443,468		$	9,826,445		$	(601,117	)		$	75,668,796

(a)	Property, plant and equipment acquired in purchase at stepped up value
(b)	Non-compete valued at $379,149, customer list valued at $1,929,144, and tradename values at $197,335
(c)	Goodwill acquired in purchase allocation
(d)	Bank debt to finance purchase $7,500,000, fair value of seller note $936,000, debt assumed $390,000,
(e)	Par value of 419,287 common shares issued as purchase consideration
(f)	Value of 419,287 common shares issued as purchase consideration less par value
(g)	Cash flow effect of adjustments
(h)	Depreciation based on stepped up asset value
(i)	Right to use finance leases, $365,000 less $68,350 amortization
(j)	Amortization of intangible assets, $24,000 x 6 months
(k)	Reclass current portion of long-term debt, $1,431,000 bank debt, $250,000 seller note, $150,000 finance leases
(l)	Note payable from right to use finance lease, $365,000 plus $14,650 accreted interest less $75,000 in lease payments, less $686,500 in bank payments
(m)	Current year deferred income tax adjustment
(n)	Current year net income fromTSP audited financial statements, partially offset by pro forma income statement adjustments

	Energy Services of America Corporation Consolidated Statements of Income For the Six Months Ended March 31, 2022			Tri-State Paving & Sealcoating Statements of Income For the Six Months Ended March 31, 2022			Pro Forma Adjustments				Energy Services of America Corporation Consolidated Pro Forma Statements of Income For the Six Months Ended March 31, 2022
Revenue	$	78,051,703		$	3,848,479		$	-			$	81,900,182
Cost of revenues		69,877,711			3,384,438			(312,000	)	(a)		72,950,149
Gross profit		8,173,992			464,041			312,000				8,950,033
Selling and administrative expenses		7,049,634			943,508			(75,000	)	(b)		7,918,142
Income (loss) from operations		1,124,358			(479,467	)		387,000				1,031,891
Other income (expense)
Interest income		576			-			-				576
Other nonoperating (expense) income		(263,238	)		-			(212,350	)	(c)		(475,588	)
Interest expense		(342,491	)		-			(169,650	)	(d)		(512,141	)
Gain on sale of equipment		359,792			-			-				359,792
		(245,361	)		-			(382,000	)			(627,361	)
Income before income taxes		878,997			(479,467	)		5,000				404,530
Income tax expense (benefit)		293,820			-			(127,600	)	(e)		166,220
Net income	$	585,177		$	(479,467	)	$	132,600			$	238,310
Weighted average shares outstanding-basic		16,247,898						419,287				16,667,185
Weighted average shares-diluted		16,247,898						419,287				16,667,185
Earnings  per share available to common shareholders	$	0.04									$	0.01
Earnings per share-diluted available to common shareholders	$	0.04									$	0.01

(a)	$88,000 depreciation expense increase for the stepped up value of property, plant and equipment, and $400,000 salary & burden expense decrease for employees not retained and salary adjustments
(b)	$75,000 decrease to building lease expense, $68,350 reclassed to other expense (finance lease amortization) and $6,650 reclassed to interest expense
(c)	$68,350 right to use-finance lease amortization expense and $144,000 intangible asset amortization expense
(d)	$163,000 increase in interest expense for debt incurred to finance purchase and $6,650 increase from finance lease
(e)	$129,000 tax benefit adjustment due to TSP previously filing as an "S" corporation during audited periods and $14,00 tax expense of pro forma adjustments

XML

Cover	Apr. 29, 2022
Cover [Abstract]
Document Type	8-K/A
Amendment Flag	false
Document Period End Date	Apr. 29, 2022
Entity File Number	001-32998
Entity Registrant Name	Energy Services of America Corporation
Entity Central Index Key	0001357971
Entity Tax Identification Number	20-4606266
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	75 West 3rd Ave.
Entity Address, City or Town	Huntington
Entity Address, State or Province	WV
Entity Address, Postal Zip Code	25701
City Area Code	304
Local Phone Number	522-3868
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, Par Value $0.0001
Trading Symbol	ESOA
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false