Energy Services of America CORP

Previous wording

The following is an overview of results from operations for the three and six months ended March 31,2024 and 2023:

Current wording

The following is an overview of results from operations for the three and nine months ended June 30, 2024 and 2023:

Previous wording

Results of Operations for the Three and Six Months Ended March 31, 2024 Compared to the Three and Six Months Ended March 31, 2023

Current wording

Results of Operations for the Three and Nine Months Ended June 30, 2024 Compared to the Three and Nine Months Ended June 30, 2023

Previous wording

Revenues. A table comparing the Company’s revenues for the three and six months ended March 31, 2024 compared to the three and six months ended March 31, 2023 is below:

Current wording

Revenues. A table comparing the Company’s revenues for the three and nine months ended June 30, 2024 compared to the three and nine months ended June 30, 2023 is below:

Previous wording

Total cost of revenues increased by $15.1 million to $64.9 million for the three months ended March 31, 2024, as compared to $49.8 million for the three months ended March 31, 2023. Total cost of revenues increased by $40.4 million to $144.2 million for the six months ended March 31, 2024, as compared to $103.8 million for the six months ended March 31, 2023. The cost of revenues increases were a result of increased work in all categories of business, partially offset by less unallocated shop expenses for the three and six months ended March 31, 2024 as compared to the same period in 2023.

Current wording

Total revenues increased by $394,000 to $85.9 million for the three months ended June 30, 2024, as compared to $85.5 million for the three months ended June 30, 2023. Total revenues increased by $48.0 million to $247.2 million for the nine months ended June 30, 2024, as compared to $199.2 million for the nine months ended June 30, 2023. The increases were a result of increased work in all categories of business except for an $11.3 million decrease in Gas & Petroleum Transmission work for the three months ended June 30, 2024 as compared to the same period in 2023.

Previous wording

Cost of Revenues. A table comparing the Company’s costs of revenues for the three and six months ended March 31, 2024, compared to the three and six months ended March 31, 2023, is below:

Current wording

Cost of Revenues. A table comparing the Company’s costs of revenues for the three and nine months ended June 30, 2024, compared to the three and nine months ended June 30, 2023, is below:

Previous wording

Unallocated shop expenses totaled $1.1 million for the three months ended March 31, 2024, a $173,000 increase from $935,000 for the three months ended March 31, 2023. Unallocated shop expenses totaled $1.1 million for the six months ended March 31, 2024, a $118,000 decrease from $1.2 million for the six months ended March 31, 2023. The changes in unallocated shop expenses were due to changes in the amount of internal equipment charged to projects for the three and six months ended March 31, 2024, as compared to the same period in the prior year.

Current wording

Unallocated shop expenses totaled $1.7 million for the three months ended June 30, 2024, a $1.5 increase from $249,000 for the three months ended June 30, 2023. Unallocated shop expenses totaled $2.8 million for the nine months ended June 30, 2024, a $1.3 million increase from $1.5 million for the nine months ended June 30, 2023. The changes in unallocated shop expenses were primarily due to changes in the amount of internal equipment charged to projects for the three and nine months ended June 30, 2024, as compared to the same period in the prior year.

Previous wording

Gross Profit (Loss). A table comparing the Company’s gross profit (loss) for the three and six months ended March 31, 2024, compared to the three and six months ended March 31, 2023, is below:

Current wording

Gross Profit (Loss). A table comparing the Company’s gross profit (loss) for the three and nine months ended June 30, 2024, compared to the three and nine months ended June 30, 2023, is below:

Previous wording

Total gross profit increased by $2.4 million to $6.2 million for the three months ended March 31, 2024, as compared to $3.9 million for the three months ended March 31, 2023. Total gross profit increased by $7.2 million to $17.1 million for the six months ended March 31, 2024, as compared to $9.9 million for the six months ended March 31, 2023.

Current wording

Total gross profit increased by $4.4 million to $15.3 million for the three months ended June 30, 2024, as compared to $10.9 million for the three months ended June 30, 2023. Total gross profit increased by $11.6 million to $32.4 million for the nine months ended June 30, 2024, as compared to $20.8 million for the nine months ended June 30, 2023.

Previous wording

Gas & Water Distribution gross profit totaled $2.4 million for the three months ended March 31, 2024, a $438,000 decrease from $2.8 million for the three months ended March 31, 2023. The gross profit decrease was primarily due to inclement weather conditions and training and certification expenses incurred during the three months ended March 31, 2024. Gas & Water Distribution gross profit totaled $6.4 million for the six months ended March 31, 2024, a $1.7 million increase from $4.7 million for the six months ended March 31, 2023. The gross profit increase was primarily related to increased paving and gas and water distribution services performed during the six months ended March 31, 2024, as compared to the same period in 2023.

Current wording

Gas & Water Distribution gross profit totaled $6.4 million for the three months ended June 30, 2024, a $1.7 million increase from $4.6 million for the three months ended June 30, 2023. Gas & Water Distribution gross profit totaled $12.8 million for the nine months ended June 30, 2024, a $3.5 million increase from $9.3 million for the nine months ended June 30, 2023. The gross profit increase was primarily related to increased paving and gas and water distribution services performed during the three and nine months ended June 30, 2024, as compared to the same period in 2023.

Previous wording

Electrical, Mechanical, & General construction services gross profit totaled $4.7 million for the three months ended March 31, 2024, a $2.3 million increase from $2.4 million for the three months ended March 31, 2023. Electrical, Mechanical, & General construction services gross profit totaled $8.2 million for the six months ended March 31, 2024, a $4.1 million increase from $4.1 million for the six months ended March 31, 2023. The gross profit increases were primarily related to an increase in general contracting and electrical services performed during the three and six months ended March 31, 2024, as compared to the same periods in the prior year.

Current wording

Electrical, Mechanical, & General construction services gross profit totaled $6.0 million for the three months ended June 30, 2024, a $3.5 million increase from $2.5 million for the three months ended June 30, 2023. Electrical, Mechanical, & General construction services gross profit totaled $14.2 million for the nine months ended June 30, 2024, a $7.6 million increase from $6.6 million for the nine months ended June 30, 2023. The gross profit increases were primarily related to an increase in general contracting and electrical services performed during the three and nine months ended June 30, 2024, as compared to the same periods in the prior year. In addition, the Company completed several milestones on a significant project nearing completion during the third quarter of fiscal year 2024 with a higher than expected profits.

Previous wording

Gross loss attributable to unallocated shop expenses totaled $1.1 million for the three months ended March 31, 2024, a $173,000 increase from $935,000 for the three months ended March 31, 2023. Gross loss attributable to unallocated shop expenses totaled $1.1 million for the six months ended March 31, 2024, a $118,000 decrease from $1.2 million for the six months ended March 31, 2023. The changes in unallocated shop expenses were due to changes in the amount of internal equipment charged to projects for the three and six months ended March 31, 2024, as compared to the same periods in the prior year.

Current wording

Gross loss attributable to unallocated shop expenses totaled ($1.7) million for the three months ended June 30, 2024, a $1.5 increase from ($249,000) for the three months ended June 30, 2023. Gross loss attributable to unallocated shop expenses totaled ($2.8) million for the nine months ended June 30, 2024, a $1.3 million increase from ($1.5) million for the nine months ended June 30, 2023. The changes in unallocated shop expenses were due to changes in the amount of internal equipment charged to projects for the three and nine months ended June 30, 2024, as compared to the same periods in the prior year.

Previous wording

Selling and administrative expenses. Total selling and administrative expenses increased by $1.4 million to $7.3 million for the three months ended March 31, 2024, as compared to $5.9 million for the same period in the prior year. Total selling and administrative expenses increased by $3.3 million to $14.5 million for the six months ended March 31, 2024, as compared to $11.2 million for the same period in the prior year. The increase was primarily related to additional personnel hired to secure and manage work for expected growth.

Current wording

Selling and administrative expenses. Total selling and administrative expenses increased by $1.5 million to $6.8 million for the three months ended June 30, 2024, as compared to $5.3 million for the same period in the prior year. Total selling and administrative expenses increased by $4.8 million to $21.3 million for the nine months ended June 30, 2024, as compared to $16.5 million for the same

Previous wording

Other nonoperating income (expense). Other nonoperating expenses totaled $81,000 for the three months ended March 31, 2024, as compared to $11,000 for the same period in the prior year. The change was primarily related to an increase in charitable contributions. Other nonoperating expenses totaled $6,000 for the six months ended March 31, 2024, as compared to $91,000 for the same period in the prior year. The change was primarily related to an immaterial legal settlement that recouped costs expended in a prior period.

Current wording

Other nonoperating expense. Other nonoperating expenses totaled $27,000 for the three months ended June 30, 2024, as compared to $72,000 for the same period in the prior year. Other nonoperating expenses totaled $34,000 for the nine months ended June 30, 2024, as compared to $164,000 for the same period in the prior year. The change for the nine months ended June 30, 2024, as compared to the same period in 2023, was primarily related to an immaterial legal settlement that recouped costs expended in a prior period.

Previous wording

fees have been expensed as incurred. On April 17, 2024, the United States Court of Appeals for the Third Circuit (the “Appeals Court”) affirmed the decision of the United States District Court for the Western District of Pennsylvania. On May 1, 2024, the Defendant filed a Petition for Rehearing or Rehearing En Banc with the Appeals Court.

Current wording

Income from Lawsuit Judgement. As previously disclosed, in February 2018, the Company filed a lawsuit against a customer in the United States District Court for the Western District of Pennsylvania (the “District Court”). The lawsuit was related to a dispute over work performed on a pipeline construction project. On November 21, 2022, the District Court issued a judgment in favor of the Company. On April 17, 2024, the United States Court of Appeals for the Third Circuit (the “Appeals Court”) affirmed the decision of the District Court. In May 2024, the Appeals Court denied petitions for a rehearing. This upheld the award granted by the District Court in November 2022. The Company received an approximately $15.6 million payment related to the lawsuit in May 2024.

Previous wording

Interest expense. Interest expense totaled $623,000 for the three months ended March 31, 2024, an increase of $48,000 from $575,000 for the same period in the prior year. Interest expense totaled $1.2 million for the six months ended March 31, 2024, an increase of $150,000 from $1.1 million for the same period in the prior year. The increase in interest expense was primarily due to interest paid for equipment financing added in late fiscal year 2023 and an increase in interest rates.

Current wording

Interest expense. Interest expense totaled $547,000 for the three months ended June 30, 2024, a decrease of $93,000 from $640,000 for the same period in the prior year. The decrease was primarily due to the Company paying off its operating line of credit in late May 2024. Interest expense totaled $1.8 million for the nine months ended June 30, 2024, an increase of $58,000 from $1.7 million for the same period in the prior year. The increase in interest expense was primarily due to interest paid for equipment financing added in late fiscal year 2023 and an increase in interest rates, partially offset by the Company paying off its operating line of credit in late May 2024.

Previous wording

Gain on sale of equipment. Gain on sale of equipment totaled $305,000 for the three months ended March 31, 2024, an increase of $257,000 from $48,000 for the same period in the prior year. Gain on sale of equipment totaled $292,000 for the six months ended March 31, 2024, an increase of $275,000 from $17,000 for the same period in the prior year. The Company sold certain underutilized or non-working pieces of equipment during the three and six months ended March 31, 2024, with no comparable sale occurring during the three and six months ended March 31, 2023.

Current wording

Gain on sale of equipment. Gain on sale of equipment totaled $600 for the three months ended June 30, 2024, a decrease of $29,400 from $30,000 for the same period in the prior year. Gain on sale of equipment totaled $292,000 for the nine months ended June 30, 2024, an increase of $245,000 from $47,000 for the same period in the prior year. The Company sold certain underutilized or non-working pieces of equipment during the nine months ended June 30, 2024, with no comparable sale occurring during the nine months ended June 30, 2023.

Previous wording

Net income (loss). Loss before income taxes was $1.5 million for the three months ended March 31, 2024, as compared to $2.5 million for the same period in the prior year. Income before income taxes was $1.6 million for the six months ended March 31, 2024, as compared to a loss before income taxes of $2.5 million for the same period in the prior year. The increases were primarily related to the items mentioned above.

Current wording

Net income. Income before income taxes was $23.6 million for the three months ended June 30, 2024, as compared to $4.9 million for the same period in the prior year. Income before income taxes was $25.2 million for the nine months ended June 30, 2024, as compared to income before income taxes of $2.4 million for the same period in the prior year. The increases were primarily related to the items mentioned above.

Previous wording

Net loss for the three months ended March 31, 2024, was $1.1 million, as compared to $1.9 million for the same period in the prior year. Net income for the six months ended March 31, 2024 was $933,000, as compared to a net loss of $1.7 million for the same period in 2023.

Current wording

Net income for the three months ended June 30, 2024, was $17.5 million, as compared to $3.4 million for the same period in the prior year. Net income for the nine months ended June 30, 2024 was $18.4 million, as compared to a net loss of $1.7 million for the same period in 2023.

Previous wording

The Company had total assets of $136.1 million at March 31, 2024, a decrease of $6.4 million from the prior fiscal year end balance of $142.5 million.

Current wording

The Company had total assets of $148.8 million at June 30, 2024, an increase of $6.3 million from the prior fiscal year end balance of $142.5 million.

Previous wording

Contract assets totaled $14.6 million at March 31, 2024, a decrease of $1.3 million from the prior fiscal year end balance of $16.0 million. The decrease was due to a difference in the timing of project billings at March 31, 2024, compared to September 30, 2023.

Current wording

Contract assets totaled $21.0 million at June 30, 2024, an increase of $5.1 million from the prior fiscal year end balance of $16.0 million. The increase was due to a difference in the timing of project billings at June 30, 2024, compared to September 30, 2023.

Previous wording

Retainage receivable totaled $10.1 million at March 31, 2024, an increase of $2.5 million from the prior fiscal year end balance of $7.6 million. The increase was primarily due to more current year projects that require retainages to be withheld.

Current wording

Retainage receivable totaled $10.3 million at June 30, 2024, an increase of $2.7 million from the prior fiscal year end balance of $7.6 million. The increase was primarily due to more current year projects that require retainages to be withheld.

Previous wording

The Company had net property, plant and equipment of $37.0 million at March 31, 2024, an increase of $448,000 from the prior fiscal year end balance of $36.5 million. The increase was due to $5.3 million in asset additions, partially offset by $4.2 million in depreciation and net equipment disposals of $652,000.

Current wording

The Company had net property, plant and equipment of $37.9 million at June 30, 2024, an increase of $1.4 million from the prior fiscal year end balance of $36.5 million. The increase was due to $8.4 million in asset additions, partially offset by $6.3 million in depreciation and net equipment disposals of $703,000.

Previous wording

Prepaid expenses and other totaled $5.1 million at March 31, 2024, an increase of $1.6 million from the prior fiscal year end balance of $3.5 million. The increase was primarily due to an increase in prepaid insurance that will be expense throughout fiscal year 2024.

Current wording

Prepaid expenses and other totaled $4.2 million at June 30, 2024, an increase of $726,000 from the prior fiscal year end balance of $3.5 million. The increase was primarily due to an increase in prepaid insurance that will be expensed in the next twelve months.

Previous wording

Cash and cash equivalents totaled $12.1 million at March 31, 2024, a decrease of $4.3 million from the prior fiscal year end balance of $16.4 million. The decrease was primarily due to a net $2.6 million investment in equipment, and a net $1.9 million used in financing activities, partially offset by a net $183,000 provided from operating activities.

Current wording

Cash and cash equivalents totaled $14.5 million at June 30, 2024, a decrease of $1.9 million from the prior fiscal year end balance of $16.4 million. The decrease was primarily due to a net $5.7 million investment in equipment, and a net $15.7 million used in financing activities, partially offset by a net $19.5 million provided from operating activities.

Previous wording

Accounts receivable, net of allowance for doubtful accounts, totaled $46.4 million at March 31, 2024, a decrease of $4.8 million from the prior fiscal year end balance of $51.2 million. The decrease was primarily due to the timing of cash collections and project invoicing since September 30, 2023.

Current wording

Accounts receivable, net of allowance for doubtful accounts, totaled $50.1 million at June 30, 2024, a decrease of $1.1 million from the prior fiscal year end balance of $51.2 million. The decrease was primarily due to the timing of cash collections and project invoicing since September 30, 2023.

Previous wording

Right-of-use assets totaled $2.8 million at March 31, 2024, a decrease of $560,000 from the prior fiscal year end balance of $3.3 million. The decrease was primarily due to the amortization of operating leases during the six months ended March 31, 2024, partially offset by a net increase in leased vehicles.

Current wording

Right-of-use assets totaled $2.5 million at June 30, 2024, a decrease of $829,000 from the prior fiscal year end balance of $3.3 million. The decrease was primarily due to the amortization of operating leases during the nine months ended June 30, 2024, partially offset by a net increase in leased vehicles.

Previous wording

Intangible assets, net totaled $3.2 million at March 31, 2024, a decrease of $216,000 from the prior fiscal year end balance of $3.4 million. The decrease was due to the amortization of intangible assets during the six months ended March 31, 2024.

Current wording

Intangible assets, net totaled $3.1 million at June 30, 2024, a decrease of $324,000 from the prior fiscal year end balance of $3.4 million. The decrease was due to the amortization of intangible assets during the nine months ended June 30, 2024.

Previous wording

The Company had total liabilities of $101.6 million at March 31, 2024, a decrease of $6.4 million from the prior fiscal year end balance of $107.9 million.

Current wording

The Company had total liabilities of $96.8 million at June 30, 2024, a decrease of $11.1 million from the prior fiscal year end balance of $107.9 million.

Previous wording

Lines of credit and short-term borrowings totaled $22.5 million at March 31, 2024, an increase of $2.6 million from the prior fiscal year end balance of $19.8 million. The increase was primarily due to additional line of credit borrowings.

Current wording

Lines of credit and short-term borrowings totaled $10.3 million at June 30, 2024, a decrease of $9.6 million from the prior fiscal year end balance of $19.8 million. The decrease was primarily due to repayment of the operating line of credit and financed insurance premiums. The remaining balance relates to PPP loans. Refer to Note 3 “Accounting for PPP Loans” in the accompanying consolidated financial statements for additional details.

Previous wording

Long-term debt totaled $23.2 million at March 31, 2024, a decrease of $1.8 million from the prior fiscal year end balance of $25.0 million. The decrease in long-term debt was primarily due to $3.5 million in payments on long-term debt, partially offset by $1.8 million in new equipment financing.

Current wording

Long-term debt totaled $21.7 million at June 30, 2024, a decrease of $3.3 million from the prior fiscal year end balance of $25.0 million. The decrease in long-term debt was primarily due to $5.0 million in payments on long-term debt, partially offset by $1.7 million in new equipment financing.

Previous wording

Accounts payable totaled $18.7 million at March 31, 2024, a decrease of approximately $3.3 million from the prior fiscal year end balance of $22.0 million. The decrease was due to the timing of accounts payable payments as compared to September 30, 2023.

Current wording

Accounts payable totaled $19.4 million at June 30, 2024, a decrease of approximately $2.6 million from the prior fiscal year end balance of $22.0 million. The decrease was due to the timing of accounts payable payments as compared to September 30, 2023.

Previous wording

Accrued expenses and other current liabilities totaled $10.9 million at March 31, 2024, a decrease of $2.2 million from the prior fiscal year end balance of $13.1 million. The decrease was due to the timing of accrued expense payments, as compared to September 30, 2023.

Current wording

Accrued expenses and other current liabilities totaled $12.0 million at June 30, 2024, a decrease of $1.1 million from the prior fiscal year end balance of $13.1 million. The decrease was due to the timing of accrued expense payments, as compared to September 30, 2023.

Previous wording

Current and long-term operating lease liabilities totaled $2.8 million at March 31, 2024, a decrease of $569,000 from the prior fiscal year end balance of $3.4 million. The decrease was due to payments made during the six months ended March 31, 2024.

Current wording

Current and long-term operating lease liabilities totaled $2.5 million at June 30, 2024, a decrease of $864,000 from the prior fiscal year end balance of $3.6 million. The decrease was due to payments made during the nine months ended June 30, 2024.

Previous wording

Deferred tax liabilities totaled $7.2 million at March 31, 2024, an increase of $331,000 from the prior fiscal year end balance of $6.9 million. The increase was primarily related to the reduction of the net operating loss carry forward during the six months ended March 31, 2024.

Current wording

Deferred tax liabilities totaled $7.3 million at June 30, 2024, an increase of $412,000 from the prior fiscal year end balance of $6.9 million. The increase was primarily related to a $910,000 reduction of a tax asset related to a net operating loss carry forward during the nine months ended June 30, 2024, partially offset by a $460,000 decrease in deferred taxes related to property and equipment.

Previous wording

Contract liabilities totaled $16.3 million at March 31, 2024, a decrease of $1.4 million from the prior fiscal year end balance of $17.7 million. The decrease was due to a difference in the timing of project billings at March 31, 2024, as compared to September 30, 2023.

Current wording

Contract liabilities totaled $17.9 million at June 30, 2024, an increase of $202,000 from the prior fiscal year end balance of $17.7 million. The increase was due to a difference in the timing of project billings at June 30, 2024, as compared to September 30, 2023.

Previous wording

Shareholders’ equity was $34.6 million at March 31, 2024, a decrease of $25,000 from the prior fiscal year end balance of $34.6 million. The increase was primarily due to net income of $933,000 for the six months ended March 31, 2024, mostly offset by an annual cash dividend payment of $994,000 on January 2, 2024.

Current wording

Shareholders’ equity was $52.0 million at June 30, 2024, an increase of $17.4 million from the prior fiscal year end balance of $34.6 million. The increase was primarily due to net income of $18.4 million for the nine months ended June 30, 2024, partially offset by an annual cash dividend payment of $994,000 on January 2, 2024.

Previous wording

On July 13, 2022, the Company received a one-year extension on its $15.0 million operating line of credit effective June 28, 2022. The interest rate on the line of credit is the “Wall Street Journal” Prime Rate (the index) with a floor of 4.99%. On January 19, 2023, the Company received an amendment to the agreement which increased the line of credit to $30.0 million with a maturity date of June 28, 2023. On June 1, 2023, the agreement was renewed through June 28, 2024.

Current wording

On January 19, 2023, the Company received an amendment to its $15.0 million operating line of credit which increased the line of credit to $30.0 million with a maturity date of June 28, 2023. The interest rate on the line of credit is the “Wall Street Journal” Prime Rate (the index) with a floor of 4.99%. On June 1, 2023, the agreement was renewed through June 28, 2024. The Company is working with its lender and expects the operating line of credit to be extended in the Company’s fourth quarter of fiscal year 2024.

Previous wording

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.

Current wording

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.

Previous wording

On December 16, 2014, the Company’s Nitro subsidiary entered into a 20-year $1.2 million loan agreement with a bank to purchase the office building and property it had previously been leasing. The interest rate on this loan agreement is 4.82% with monthly payments of $7,800. The interest rate on this note is subject to change from time to time based on changes in the U.S. Treasury yield, adjusted to a constant maturity of three years as published by the Federal Reserve weekly. As of March 31, 2024, the Company had made principal payments of $413,000. The loan is collateralized by the building purchased under this agreement. The note is currently held by Peoples Bank, Inc., formerly First Bank of Charleston, Inc. (West Virginia).

Current wording

On December 16, 2014, the Company’s Nitro subsidiary entered into a 20-year $1.2 million loan agreement with a bank to purchase the office building and property it had previously been leasing. The interest rate on this loan agreement is 4.82% with monthly payments of $7,800. The interest rate on this note is subject to change from time to time based on changes in the U.S. Treasury yield, adjusted to a constant maturity of three years as published by the Federal Reserve weekly. As of June 30, 2024, the Company had made principal payments of $425,000. The loan is collateralized by the building purchased under this agreement. The note is currently held by Peoples Bank, Inc., formerly First Bank of Charleston, Inc. (West Virginia).

Previous wording

On November 13, 2015, the Company entered into a 10-year $1.1 million loan agreement with United Bank to purchase the fabrication shop and property Nitro had previously been leasing. The variable interest rate on the loan agreement is 9.5% at March 31, 2024. As of March 31, 2024, the Company had made principal payments of $868,000. The loan is collateralized by the building and property purchased under this agreement.

Current wording

On November 13, 2015, the Company entered into a 10-year $1.1 million loan agreement with United Bank to purchase the fabrication shop and property Nitro had previously been leasing. The variable interest rate on the loan agreement is 9.5% at June 30, 2024. As of June 30, 2024, the Company had made principal payments of $900,000. The loan is collateralized by the building and property purchased under this agreement.