RGC RESOURCES INC

YEARS ENDED September 30, 2025 AND 2024

Principles of Consolidation—RGC Resources, Inc. is an energy services company primarily engaged in the sale and distribution of natural gas. The consolidated financial statements include the accounts of Resources and its wholly owned subsidiaries: Roanoke Gas and Midstream. Roanoke Gas is a natural gas utility, which distributes and sells natural gas to approximately 62,500 residential, commercial and industrial customers within its service areas in Roanoke, Virginia and the surrounding localities. The Company’s business is seasonal in nature as a majority of natural gas sales are for space heating during the winter season. Roanoke Gas is regulated by the SCC. Midstream is a wholly owned subsidiary created primarily to invest in the LLC.

The Company follows accounting and reporting standards established by the FASB and the SEC, including certain provisions allowed under the smaller reporting company exceptions.

Rate Regulated Basis of Accounting—The Company’s regulated operations follow the accounting and reporting requirements of ASC980, Regulated Operations. The economic effects of regulation can result in a regulated company deferring costs that have been or are expected to be recovered from customers in a period different from the period in which the costs would be charged to expense by an unregulated enterprise. When this situation occurs, costs are deferred as assets in the consolidated balance sheet (regulatory assets) and recorded as expenses when such amounts are reflected in rates. Additionally, regulators can impose liabilities upon a regulated company for amounts previously collected from customers and for current collection in rates of costs that are expected to be incurred in the future (regulatory liabilities). In the event the provisions of ASC980 no longer apply to any or all regulatory assets or liabilities, the Company would write off such amounts and include them in the consolidated statements of income and comprehensive income in the period which ASC980 no longer applied.

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Regulatory assets and liabilities included in the Company’s consolidated balance sheets as of* September 30, 2025* and2024 are as follows:

Amortization of $101,141 and $116,085 of regulatory assets for the years ended* September 30, 2025and2024*, respectively, is included in operations and maintenance expense on the consolidated statements of income. Amortization of $131,673 and $211,863 of regulatory assets for the years ended* September 30, 2025and2024*, respectively, is included in other income, net on the consolidated statements of income. Amortization of $114,187 of regulatory assets for both years ended* September 30, 2025and2024* is included in interest expense on the consolidated statements of income.

As of* September 30, 2025*, the Company had regulatory assets in the amount of $5,897,920 on which the Company didnot earn a return during the recovery period.

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Utility Property and Depreciation—Utility property is stated at original cost and includes direct labor and materials, contractor costs, and all allocable overhead charges. The Company applies the group method of accounting, where the costs of like assets are aggregated and depreciated by applying a rate based on the average expected useful life of the assets. In accordance with Company policy, expenditures for depreciable assets with a life greater thanone year are capitalized, along with any upgrades or improvements to existing assets, when such upgrades or improvements significantly improve or extend the original expected useful life. Expenditures for maintenance, repairs, and minor renewals and betterments are expensed as incurred. The original cost of depreciable property retired is removed from utility property and charged to accumulated depreciation. The cost of asset removals, less salvage, is charged to “regulatory cost of retirement obligations” or “asset retirement obligations” as explained under Asset Retirement Obligations below.

Utility property is composed of the following major classes of assets:

Provisions for depreciation are computed principally at composite straight-line rates over a range of periods. Rates are determined by depreciation studies, which are required to be performed at least every 5 years on the regulated utility assets of Roanoke Gas. The most recent depreciation study was completed and approved by the SCC staff in fiscal2024. The composite weighted-average depreciation rate was 3.26% for both years ended* September 30, 2025* and2024.

The composite rates are composed oftwo components,one based on average service life andone based on cost of retirement. As a result, the Company accrues the estimated cost of retirement of long-lived assets through depreciation expense. These retirement costs arenot a legal obligation but rather the result of cost-based regulation and are accounted for under the provisions of ASC980. Such amounts are classified as a regulatory liability.

The Company reviews long-lived assets and certain identifiable intangibles for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset* may**not* be recoverable. These reviews havenot identified any impairments which would have a material effect on the results of operations or financial condition.

From time to time, the Company recognizes AFUDC related to large infrastructure investments. This treatment allows capitalizing both the equity and debt financing costs during the construction phases. The Company didnot capitalize any financing costs related to projects for the years ended* September 30, 2025and2024.*

Asset Retirement Obligations—ASC410, Asset Retirement and Environmental Obligations, requires entities to record the fair value of a liability for an ARO when there exists a legal obligation for the retirement of the asset. When the liability is initially recorded, the entity capitalizes the cost, thereby increasing the carrying amount of the underlying asset. In subsequent periods, the liability is accreted, and the capitalized cost is depreciated over the useful life of the underlying asset. The Company has recorded AROs for its future regulatory obligations related to purging and capping its distribution mains and services upon retirement, although the timing of such retirements is uncertain.

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The following is a summary of the AROs:

Cash, Cash Equivalents and Short-Term Investments—From time to time, the Company will have balances on deposit at banks in excess of the amount insured by the FDIC. The Company hasnot experienced any losses on these accounts and doesnot consider these amounts to be at risk. For purposes of the consolidated statements of cash flows, the Company considers all highly liquid debt instruments purchased with an original maturity ofthree months or less to be cash equivalents.

Customer Receivables and Allowance for Credit Losses—Accounts receivable include amounts billed to customers for natural gas sales and related services and gas sales occurring subsequent to normal billing cycles but before the end of the period. The Company provides an estimate for losses on these receivables by utilizing historical information, current account balances, account aging and current economic conditions. Customer accounts are charged off annually when deemed uncollectible or when turned over to a collection agency for action.

A reconciliation of changes in the allowance for credit losses is as follows:

Lease Accounting—The Company leases certain assets including office space and land classified as operating leases. The Company determines if an arrangement is a lease at inception of the agreement based on the terms and conditions in the contract. The operating lease ROU assets and operating lease liabilities are recognized as the present value of the future minimum lease payments over the lease term at commencement date. As most of the leases donot provide an implicit rate, the Company uses an estimate of its secured incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The incremental borrowing rate is determined by management aided by inquiries of athird party. The operating lease ROU asset also is adjusted for any lease payments made and excludes lease incentives and initial direct costs incurred. The Company’s lease terms mayinclude options to extend or terminate the lease at certain dates, typically at the Company’s own discretion. The Company regularly evaluates the renewal options and when they are reasonably certain of exercise, the Company includes the renewal period in its lease term. Lease expense for minimum lease payments is recognized on a straight-line basis over the term of the agreement. The Company made an accounting policy election that payments under agreements with an initial term of12 months or less willnot be included on the consolidated balance sheet but will be recognized in the consolidated statements of operations on a straight-line basis over the term of the agreement.

******Inventories—Natural gas in storage and materials and supplies inventories are recorded at average cost. Natural gas storage injections are priced at the purchase cost at the time of injection and storage withdrawals are priced at the weighted average cost of gas in storage. Materials and supplies are removed from inventory at average cost.

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Unbilled Revenues—The Company bills its natural gas customers on a monthly cycle; however, the billing cycle for most firm customers doesnot coincide with the accounting periods used for financial reporting. As the Company recognizes revenue when gas is delivered, an accrual is made to estimate revenues for natural gas delivered to customers butnot billed during the accounting period. The amounts of unbilled revenue receivable included in accounts receivable on the consolidated balance sheets at September 30, 2025 and2024 were $1,373,512 and $1,294,798, respectively.

**Income Taxes—Income taxes are accounted for using the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the years in which those temporary differences are expected to be recovered or settled. A valuation allowance against deferred tax assets is provided if it is more likely thannot the deferred tax asset willnot be realized. The Company and its subsidiaries file consolidated state and federal income tax returns.

******Debt Expenses—Debt issuance expenses are deferred and amortized over the lives of the debt instruments. The unamortized balances are offset against the carrying value of long-term debt.

**Over/Under-Recovery of Natural Gas Costs—From time to time, the Company enters into forward purchases of natural gas at fixed prices through its asset manager. As management believes it is probable these purchases will physically settle, the Company has applied the normal purchase and normal sale exception to derivative accounting. Pursuant to the provisions of the Company’s PGA clause, the SCC provides the Company with a method of passing along to its customers increases or decreases in natural gas costs incurred by its regulated operations, including gains and losses on natural gas derivative hedging instruments, if utilized. On at least a quarterly basis, the Company files a PGA rate adjustment request with the SCC to increase or decrease the gas cost component of its rates, based on projected price and activity. Once administrative approval is received, the Company adjusts the gas cost component of its rates to reflect the approved amount. As actual costs and usage will differ from the projections used in establishing the PGA rate, the Company mayeither over-recover or under-recover its actual gas costs during the period. Any difference between actual costs incurred and costs recovered through the application of the PGA is recorded as a regulatory asset or liability. At the end of the deferral period, the balance of the net deferred charge or credit is amortized over an ensuing12-month period as amounts are reflected in customer bills.

Fair Value—Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between willing market participants at the measurement date. The Company determines fair value based on the following fair value hierarchy which prioritizes each input to the valuation methods intoone of the followingthree broad levels:

The fair value hierarchy gives the highest priority to unadjusted quoted prices in active markets (Level1) and the lowest priority to unobservable inputs (Level3). All fair value disclosures are categorized withinone of thethree categories in the hierarchy based on the lowest level that is significant to the valuation. See fair value disclosures below and in Notes8 and12.

******Use of Estimates—The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

******Excise and Sales Taxes—Certain excise and sales taxes imposed by the state and local governments in the Company’s service territory are collected by the Company from its customers. These taxes are passed through to the state and local governments and included within accounts payable on the Company's consolidated balance sheets.

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Earnings Per Share—Basic EPS and diluted EPS are calculated by dividing net income by the weighted-average common shares outstanding during the period and the weighted-average common shares outstanding during the period plus potential dilutive common shares, respectively. Potential dilutive common shares are calculated in accordance with the treasury stock method, which assumes that proceeds from the exercise of all options are used to repurchase common stock at market value. The amount of shares remaining after the proceeds are exhausted represents the potentially dilutive effect of the securities. The computation of diluted EPS for the years ended* September 30, 2025and2024* excludes potentially dilutive shares of 1,926 and 2,542, respectively, because to include them would be antidilutive for the period. However, these shares could potentially dilute EPS in the future. A reconciliation of basic and diluted EPS is presented below:

Business and Credit Concentrations—The primary business of the Company is the distribution of natural gas to residential, commercial and industrial customers in its service territories.

No sales to individual customers accounted for more than 5% of total revenue in any period. No individual customer amounted to more than 5% of total accounts receivable at* September 30, 2025and2024*.

Roanoke Gas currently holds the only franchises and/or CPCNs to distribute natural gas in its service area. These franchises generally extend for multi-year periods, are renewable by the municipalities and are intended for perpetual duration, including exclusive franchises in the cities of Roanoke, Salem and the Town of Vinton. All franchises are set to expire* December 31, 2035.*

Roanoke Gas is currently served bythree primary pipelines that provide the natural gas supplied to the Company’s customers. Depending upon weather conditions and the level of customer demand, failure ofone or all of these transmission pipelines could have a major adverse impact on the Company.

Derivative and Hedging Activities—ASC815, Derivatives and Hedging, requires the recognition of all derivative instruments as assets or liabilities in the Company’s consolidated balance sheet and measurement of those instruments at fair value.

The Company’s hedging and derivatives policy allows management to enter into derivatives for the purpose of managing the commodity and financial market risks of its business operations. The Company’s hedging and derivatives policy specifically prohibits the use of derivatives for speculative purposes. The key market risks that the Company* may*hedge against include the price of natural gas and the cost of borrowed funds.

From time to time, the Company has entered into collars, swaps and caps for the purpose of hedging the price of natural gas in order to provide price stability during the winter months. The fair value of these instruments is recorded in the consolidated balance sheets with the offsetting entry to either under- or over-recovery of gas costs. Net income and other comprehensive income arenot affected by the change in market value as any cost incurred or benefit received from these instruments is recoverable or refunded through the PGA as the SCC allows for full recovery of prudent costs associated with natural gas purchases. At* September 30, 2025* and2024, the Company hadno outstanding derivative instruments for the purchase of natural gas.

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The Company hassix interest rate swaps associated with certain of its variable rate debt. Roanoke Gas hastwo variable rate term notes in the amounts of $15 million and $10 million, with corresponding swap agreements to convert the variable interest rates into fixed rates of 2.00% and 2.49%, respectively. Midstream hasfour swap agreements in the amounts of $14 million, $4 million, $20.6 million, and $15 million, corresponding to the $53.6 million variable rate term note. The swap agreements convert the note into a fixed rate instrument with effective interest rates of 3.24%,2.443%,5.061%, and 5.061%, respectively. The swaps qualify as cash flow hedges with changes in fair value reported in other comprehensive income.No portion of the swaps were deemed ineffective during the periods presented.

See Notes7 and8 for additional information on the swaps and fair value.

Other Comprehensive Income (Loss)—A summary of other comprehensive income is provided below:

The amortization of actuarial gains or losses are included as a component of net periodic pension and postretirement benefit costs under other income, net in the consolidated statements of income.

Composition of AOCI:

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Recently Adopted Accounting Standards

In* November 2023,the FASB issued ASU2023*-07, Segment Reporting (Topic280*) - Improvements to Reportable Segment Disclosures,which enhances and expands the current annual and interim requirements on segment information disclosures. The new guidance requires disclosure of significant segment expenses that are regularly provided to the chief operating decision maker (CODM) and included within each reported measure of segment profit or loss, an amount and description of the composition of other segment items to reconcile to segment profit or loss, and the title and position of the entity's CODM. The provisions within the guidance are to be applied retrospectively for all comparative periods and are effective for the Company for the fiscal year that began October 1, 2024and interim periods within fiscal year beginning October 1, 2025.The Company adopted ASU2023*-07 effective for the year ended* September 30, 2025,with retrospective application of the additional segment information for the year ended September 30, 2024.Additional information regarding the Company's reportable segments is included in Note3* to the consolidated financial statements, withno impact on results of operations, cash flows, or financial condition of the Company.

Recently Issued Accounting Standards

In* December 2023,the FASB issued ASU2023*-09, Income Taxes (Topic740*): Improvements to Income Tax Disclosures*. The new guidance requires that on an annual basis public business entities disclose specific categories in the rate reconciliation table and provide additional information for reconciling items that meet a quantitative threshold (items equal to or greater than5 percent of the amount computed by multiplying pretax income or loss by the applicable statutory rate). The required disclosures will provide more granularity regarding the payment of income taxes to federal, state and foreign entities. The Company doesnot expect certain requirements of this ASU to have a significant impact to its current disclosures as all of its operations are domestic and reside intwo states. Changes to the rate reconciliation table will result in additional disclosure. The new guidance is effective for the Company for annual periods beginning* October 1, 2025.*

In* November 2024,the SEC issued ASU2024*-03, Income Statement - Reporting Comprehensive Income (Topic220*): Expense Disaggregation Disclosures. The new guidance requires public business entities to disclose certain additional detail about expenses including, among other items, purchases of inventory, employee compensation, depreciation and intangible asset amortization included within each income statement expense line items within continuing operations. The guidance also requires disclosure of the total amount of selling expenses and the Company’s definition of selling expenses. Such disclosures must be made on an annual and interim basis and integrated with existing disclosure requirements in a tabular format in the footnotes to the financial statements. Further, in January 2025,the FASB issued ASU2025*-01, Income Statement - Reporting Comprehensive Income (Topic220*): Expense Disaggregation Disclosures: Clarifying the Effective Date,* which clarified the effective date of ASU2024-03. The new guidance is effective for the Company for annual periods beginning* October 1, 2027and interim periods within fiscal year beginning October 1, 2028.*The Company is currently assessing the impacts of the new guidance on its financial statement disclosures.

Other accounting standards that have been issued or proposed by the FASB or other standard–setting bodies arenot currently applicable to the Company or arenot expected to have a significant impact on the Company’s financial position, results of operations and cash flows.

Reclassification

Certain prior year amounts have been reclassified to conform to current year presentations.

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The Company assesses new contracts and identifies related performance obligations for promises to transfer distinct goods or services to the customer. Revenue is recognized when performance obligations have been satisfied. In the case of Roanoke Gas, the Company contracts with its customers for the sale and/or delivery of natural gas.

The following tables summarize revenue by customer, product and income statement classification for the years ended* September 30:*

Gas utility revenues

Substantially all of Roanoke Gas’ revenues are derived from rates authorized by the SCC through its tariffs. Based on its evaluation, the Company has concluded that these tariff-based revenues fall within the scope of ASC606. Tariff rates represent the transaction price. Performance obligations include the procurement and transport of natural gas through the Company's distribution system to customers. The delivery of natural gas to customers results in the satisfaction of the Company’s respective performance obligations over time.

All customers are billed monthly based on consumption as measured by metered usage with payments due20 days from the rendering of the bill. Revenue is recognized as bills are issued for natural gas that has been delivered or transported. In addition, the Company utilizes the practical expedient that allows an entity to recognize the invoiced amount as revenue, if that amount corresponds to the value received by the customer. Since customers are billed tariff rates, there isno variable consideration in the transaction price.

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Unbilled revenue is included in residential and commercial revenues in the preceding table. Natural gas consumption is estimated for the period subsequent to the last billed date and up through the last day of the month. Estimated volumes and approved tariff rates are utilized to calculate unbilled revenue. The following month, the unbilled estimate is reversed, the actual usage is billed and a new unbilled estimate is calculated. The Company obtains metered usage for transportation and interruptible customers at the end of each month, thereby eliminating any unbilled consideration for these rate classes.

Other revenues

Other revenues primarily consist of miscellaneous fees and charges, utility-related revenuesnot directly billed to utility customers and billings for non-utility activities. Customers are invoiced monthly based on services provided for these activities. The Company utilizes the practical expedient allowing revenue to be recognized based on invoiced amounts. The transaction price is based on a contractually predetermined rate schedule; therefore, the transaction price represents total value to the customer andno variable price consideration exists.

Alternative revenue program revenues

ARPs, which fall outside the scope of ASC606, are SCC approved mechanisms that allow for the adjustment of revenues for certain broad, external factors, or for additional billings if the entity achieves certain performance targets. The Company's ARPs include its WNA, which adjusts revenues for the effects of weather temperature variations as compared to the30-year average; the SAVE Plan over/under collection mechanism, which adjusts revenues for the differences between SAVE Plan revenues billed to customers and the revenues earned, as calculated based on the timing and extent of infrastructure replacement completed during the period; and the RNG over/under collection mechanism, which adjusts revenues similar to the SAVE Plan, but is calculated based on the timing and costs associated with owning, operating and maintaining the RNG facility. These amounts are ultimately collected from, or returned to, customers through future rate changes approved by the SCC.

Customer accounts receivable and liabilities

Accounts receivable, as reflected in the condensed consolidated balance sheets, includes both billed and unbilled customer revenues, as well as amounts that arenot related to customers. The balances of customer receivables are provided below:

(1) Included in "Accounts receivable, net" in the consolidated balance sheet. Amounts shown net of reserve for bad debts.

The Company didnot incur any significant costs to obtain contracts during the period. Certain customers elect to pay even amounts monthly, giving rise to assets and liabilities that are in the table above. All amounts clear annually.

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Operating segments are defined as components of an enterprise for which separate financial information is available and is evaluated regularly by the Company's executive management in deciding how to allocate resources and assess performance. The Company hastwo reportable segments based on the nature of their activities and are defined as follows:

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

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

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

The accounting policies of the reported segments are the same as those described within Note1. Information is routinely presented to the CODM, the Company's President and Chief Executive Officer, in a manner that makes significant elements of profitability and cash flows of each segment easily discernible. The CODM evaluates the performance of the reportable segments based on the Gas Utility's operating income (loss) and the Investment in Affiliates' equity in earnings, as well as cash flows, and uses these measures to evaluate segment performance and allocate resources, primarily during the annual budget and forecasting processes. The CODM regularly reviews variances between budgeted and actual results in assessing earnings, operational performance, and allocating resources including personnel and capital allocations that affect each reportable segment. When the CODM reviews balance sheet information, it is at a consolidated level. Intersegment transactions are recorded at cost.

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

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The SCC exercises regulatory authority over the natural gas operations of Roanoke Gas. Such regulation encompasses terms, conditions and rates to be charged to customers for natural gas service, safety standards, service extension and depreciation.

In response to continued inflationary pressures, Roanoke Gas filed a general rate application on* February 2, 2024with the SCC seeking to increase its non-gas base rates by $4.33 million and its permitted return on equity from 9.44% to 10.35% reflecting its higher cost of capital, including higher interest expense. The SCC permitted the Company to implement its new rates on an interim basis for customer billings on or after July 1, 2024,subject to refund. On October 16, 2024,the Company reached a settlement with the SCC staff on all outstanding issues in the case. Under the terms of the settlement, the Company agreed to an annual incremental revenue requirement increase of $4.08 million based on a return on equity of 9.90%. On April 10, 2025,the SCC issued a final order approving the settlement agreement in its entirety. Refunds for the difference in amounts that were billed based on interim and settlement rates, which had previously been accrued, were made to customers in May 2025.*

On* December 2, 2025,the Company filed a non-gas base rate application with the SCC to increase revenues by $4.3 million annually, with interim rates proposed to customers in thesecond* quarter of fiscal2026.

On* May 30, 2025,Roanoke Gas filed for approval of an updated RNG Rider to become effective October 1, 2025.The RNG Rider recovers costs associated with the RNG facility to produce renewable natural gas that was approved by the SCC in2022.* The revenue requirement associated with the RNG Rider is $1.66 million. The impact to customers is affected by the under-recovered costs during the prior fiscal year, the sale of environmental credits and the over crediting of customers for RIN sales, resulting in a net impact to customers of approximately $699,000. The Company received a final order from the SCC approving the Company's updated RNG Rider on* September 26, 2025.*

On* June 30, 2025,Roanoke Gas filed for approval of an updated annual SAVE Rider to become effective October 1, 2025.The proposed SAVE Rider revenue requirement of $2.64 million is designed to recover the costs associated with an estimated $10.33 million of SAVE eligible investment during fiscal2026.* The revenue requirement also included an adjustment for under-recovered costs incurred during the prior year. The Commission approved the Company’s updated SAVE Rider on* September 26, 2025,*which contained a slightly lower revenue requirement of $2.61 million.

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On* June 2, 2022,Roanoke Gas filed an application with the SCC to acquire certain natural gas distribution assets from a local housing authority. Under this application, the Company requested the approval to acquire such facilities atfive separate apartment complexes, located in the Company’s service territory, that were under housing authority management. Under the proposed plan, the housing authority would renew existing natural gas distribution facilities to include mains, services, and meter installations and then transfer ownership of these facilities to Roanoke Gas. In turn, Roanoke Gas would assume responsibility for the operation and maintenance of these assets and recognize a gain related to the asset acquisition equal to the cost associated with the renewal. The SCC approved the application in July 2022.*

The housing authority completed the transfer oftwo apartment complexes to Roanoke Gas in fiscal2022, one complex in fiscal2023, one complex in fiscal2024 and the last complex in fiscal2025. For fiscal years2024 and2025, Roanoke Gas recognized pre-tax income of approximately $782,000 and $762,000, respectively, for the assets transferred by analogy to ASC958. The assets are included under utility property, in service on the consolidated balance sheets and the income is recorded in other income, net on the consolidated statements of income. There areno ongoing obligations between the parties for the properties transferred. Additionally, there areno remaining facilities to be transferred in the future under the plan.

Midstream has invested less than 1% in the equity interests of the LLC that owns and operates the MVP. The Company accounts for its interest in the LLC under the equity method of accounting given the LLC maintains specific ownership accounts for each investor, and also considering the Company's rights under the LLC management agreement and the Company's involvement as a stakeholder of the MVP. The Company has been using the equity method since the inception of its investment in fiscal2016. The MVP entered commercial operation on* June 14, 2024and commenced long-term firm capacity obligations on July 1, 2024.*

AFUDC attributable to MVP was recognized during the construction phase, and is included in the equity in earnings of unconsolidated affiliate in the tables below. AFUDC on the main pipeline ceased in* June 2024*when MVP went into commercial operations; large expansions and improvement projects will give rise to AFUDC in the future.

The Company participates in the earnings of the LLC proportionate to its level of investment, favorably adjusted for a basis difference between the Company's capital account and its carrying value that arose when the Company recorded an other-than-temporary impairment of its investment in2022. This basis difference amortization is a favorable non-cash adjustment to income over the book life of the MVP, which is40 years. The Company's share of earnings from the LLC and the basis difference amortization are presented under equity in earnings of unconsolidated affiliate on the consolidated statements of income. The Company receivedfour quarterly cash distributions totaling approximately $3.6 million from the LLC during fiscal2025 and expects future quarterly distributions to be of a similar magnitude to those received to date.

Midstream assesses the value of its investment in the LLC on at least a quarterly basis, andno impairment indicators were identified in fiscal2025 or2024.

Funding for Midstream's investments has been provided through equity contributions from Resources and unsecured promissory notes as detailed in Note7.

The investments in the LLC are included in the consolidated balance sheets as follows:

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The change in the investment in unconsolidated affiliates is provided below:

Summary unaudited financial statements of MVP are presented below. Southgate financial statements, which are accounted for under the cost method, arenot included:

The Company had been operating with a line-of-credit in the principal amount of $25 million that it renewed annually each* March.On March 31, 2025,Roanoke Gas amended its line-of-credit to increase the principal amount to $30 million and extend the maturity date to March 31, 2027.The line-of-credit's variable interest rate is based upon Term SOFR plus 1.25% and provides for multiple-tier borrowing limits to accommodate seasonal borrowing demands. The Company's total borrowing limits during the term of the line-of-credit range from $20 million to $30 million. As of September 30, 2025,*the Company had an outstanding balance of $11,916,760 under the line-of-credit.

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

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A summary of the line-of-credit follows:

Long-term debt consisted of the following:

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On* September 5, 2025,Midstream established new Term Notes withtwo* banks in the amounts of $38.6 million and $15 million, which refinanced and replaced all of Midstream's outstanding debt. The interest rate on the new Term Notes isone month Term SOFR plus 1.55% with interest payable monthly. The Term Notes also included a 0.3% origination fee and 0.1% annual fee. Quarterly principal payments will be due each* October,** January,** Apriland July,and repayment terms are based on a schedule aligned with the terms of the MVP shipper agreements, which will expire June 2044.The Term Notes mature on September 5, 2032.Also, on September 5, 2025,Midstream executedtwo* interest rate swap agreements totaling $35.6 million, which corresponds to the term and draw provisions of the Term Note agreement and effectively converts that portion of the variable rate note to a fixed rate instrument with an effective annual interest rate of 5.061%. Thetwo existing interest rate swaps will remain in place, have been redesignated, and when combined with the new interest rate swap agreements, hedged a notional value of $53.6 million.

Additionally, on* September 5, 2025,Midstream entered into a Loan Agreement for the MVP Southgate extension and MVP expansion that can be drawn to principal amounts of $1.85 million and $3.65 million, respectively, (the "Notes"). The Notes bear an interest rate of Term SOFR plus 1.75% subject to adjustment to Term SOFR plus 1.55% upon meeting certain milestones. The Notes mature on September 5, 2030,*at which time the outstanding principal balance on each note is due. The Loan Agreement included a 0.25% origination fee.

On* March 6, 2024,Midstream entered into the Sixth Amendment to Credit Agreement and related Promissory Notes on the non-revolving credit facility. The Sixth Amendment revised the interest rate from Term SOFR plus 2.00% to Term SOFR plus 2.00% subject to adjustment to Term SOFR plus 1.75% and Term SOFR plus 1.55% upon meeting certain milestones. The Sixth Amendment also consolidated the Promissory Notes toone* Promissory Note withone lender, increased the available non-revolving credit facility to $25 million, and extended the maturity date to* December 31, 2025.*All other terms and requirements remain unchanged.

On* May 2, 2024,Midstream established a new $9 million line of credit facility. The interest rate on the borrowings under the facility is SOFR plus 2.215%; the arrangement included a 0.40% upfront fee and 0.125% unused line fee. The facility matures on May 2, 2026.*

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

Debt issuance costs are amortized over the life of the related debt. As of* September 30, 2025* and2024, the Company also had an unamortized loss on the early retirement of debt of $1,027,684 and $1,141,872, respectively, which has been deferred as a regulatory asset and is being amortized over a 20-year period.

All of the debt agreements set forth certain representations, warranties and covenants to which the Company is subject, including financial covenants that limit consolidated long-term indebtedness tonot more than 65% of total capitalization. All of the debt agreements provide for Priority Indebtedness (defined in the debt agreements) tonot exceed 15% of consolidated total assets. The $15 million, $10 million, $53.6 million, $1.85 million and $3.65 million notes have an interest coverage ratio requirement ofnot less than 1.5 to1, which excludes the effect of a non-cash impairment on the LLC investments up to the total investment as of* December 31, 2021.The Company was in compliance with all debt covenants as of September 30, 2025* and2024.

The aggregate annual maturities of long-term debt for the nextfive years ending after* September 30, 2025* are as follows:

Roanoke Gas has a term note in the principal amount of $15 million maturing in* August 2026.The Company has a positive record of refinancing term notes, as well as has access to sufficient financing resources, including availability under the line-of-credit, to meet the payment requirements associated with this term note. Thus the Company has presented this balance within notes payable of long-term debt on the consolidated balance sheets as of September 30, 2025.*

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The following table summarizes the Company’s financial assets and liabilities that are measured at fair value on a recurring basis and the fair value measurements by level within the fair value hierarchy as defined in Note1 as of* September 30, 2025and2024*, respectively. There have beenno changes to the Company's valuation techniques during fiscal years ended* September 30, 2025and2024*.

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

See Note5 for discussion on the fair value assumptions of the Company's investment in the LLC.

Under the asset management contract, a timing difference can exist between the payment for natural gas purchases and the actual receipt of such purchases. Payments are made based on a predetermined monthly volume with the price based on the weighted averagefirst of the month index prices corresponding to the month of the scheduled payment. At* September 30, 2025and2024*, the Company had recorded in accounts payable the estimated fair value of the liability based on the correspondingfirst of month quoted index prices for which the liability was expected to be settled.

The Company’s non-financial assets and liabilities that are measured at fair value on a nonrecurring basis consist of its AROs. The AROs are measured at fair value at initial recognition based on expected future cash flows to settle the obligation.

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The carrying value of cash and cash equivalents, accounts receivable, borrowings under line-of-credit, accounts payable, customer credit balances and customer deposits is a reasonable estimate of fair value due to the short-term nature of these financial instruments. In addition, the carrying amount of the variable rate line-of-credit is a reasonable approximation of its fair value. The following table summarizes the fair value of the Company’s financial assets and liabilities that arenot adjusted to fair value in the consolidated financial statements as of* September 30, 2025and2024*.

The fair value of long-term debt is estimated by discounting the future cash flows of the fixed rate debt based on the underlying Treasury rate or other Treasury instrument with a corresponding maturity period and estimated credit spread extrapolated based on market conditions since the issuance of the debt.

ASC825, Financial Instruments, requires disclosures regarding concentrations of credit risk from financial instruments. Cash equivalents are investments in high-grade, short-term securities (original maturity less thanthree months), placed with financially sound institutions. Accounts receivable are from a diverse group of customers including individuals and small and large companies in various industries. The Company maintains certain credit standards with its customers and requires a customer deposit if such evaluation warrants.

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Under the provisions of ASC740, the deferred tax assets and liabilities of the Company were revalued in fiscal2018 to reflect the reduction in the corporate federal income tax rate. As a result of the revaluation, the excess deferred income taxes of the regulated operations of Roanoke Gas were reclassified to a regulatory liability. The excess deferred taxes related to the depreciable property are being returned to customers over the remaining weighted average useful life of the property with a corresponding reduction in income tax expense. The excess deferred taxes related to the other regulatory basis differences were being collected from customers over afive-year period, which concluded in* December**2023.*

The details of income tax expense (benefit) are as follows:

Income tax expense for the years ended* September 30, 2025* and2024 differed from amounts computed by applying the U.S. federal income tax rate to earnings before income taxes due to the following:

During fiscal2021, the Company engaged an outside firm to conduct a study of its activities that would qualify for the Research and Development ("R&D") credit under26 U.S. Code §41 - Credit for increasing research activities. Upon completion of this study, the Company filed amended federal income tax returns for the2017, 2018 and2019 fiscal years to claim the R&D tax credit. The Company also filed for the R&D tax credit on its fiscal2020 federal income tax return. Asecond study was performed during fiscal2022, and the Company filed for the R&D tax credit on its fiscal2021 federal income tax return. During fiscal2021 and2022, the Company also applied for a Virginia State tax credit related to the R&D study.

Amounts corresponding with the tax credits were deferred as a regulatory liability as such benefits will be returned to customers through future rate adjustments. These credits were originally being amortized over the 20-year tax-life of the related utility plant. In accordance with the SCC settlement agreement in relation to the Company’s non-gas rate application, the amortization of the R&D tax credit was halted effective* August 1, 2023as the IRS began an examination on the fiscal2018* and2019 federal tax returns. As such, no amortization was recognized associated with the R&D tax credits in fiscal2025 and2024.

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During* September 2025,the Company participated in the IRS Fast Track Settlement (FTS), which is a process that provides the IRS and taxpayers an opportunity to resolve disputes with an appeals official using mediation skills and settlement authority. The IRS and Company agreed on a settlement equal to 40% of the R&D tax credits claimed for fiscal2018* and2019, thetwo years under examination. Once the IRS finalizes the resolution and the refunds are received, the Company will proceed with refunding the R&D tax credits, net of related fees, to customers over a12-month period through a mechanism to be approved by the SCC. The net credit amount deferred as a regulatory liability as of* September 30, 2025was $2,568,143, which reflects adjustments to 40% of the fiscal2018* and2019 credits claimed and the remaining balance of the fiscal2020 and2021 credits claimed. As part of the settlement, the Company grossed up the tax credit consistent with treatment of the excess deferred taxes. The deferred tax asset associated with the R&D tax credits was adjusted to $705,848 as of* September 30, 2025to reflect the adjustment for fiscal2018* and2019.

During fiscal2023, the Company engaged an outside firm to conduct a study of its RNG facility to determine eligibility for the Federal Energy Investment Tax Credit under26 U.S. Code §48** – Energy credit(“RNG tax credit”). Upon completion of the study, the Company determined a credit in the amount of $1,892,164 to be claimed on the fiscal2023 tax return. Similar to the treatment of the R&D tax credits, the Company deferred the RNG tax credit as a regulatory liability, which is being amortized over the 20-year tax-life of the related asset. Further, as part of the SCC order approving the RNG project and corresponding rates charged to customers, any tax credits attributable to the RNG project are to be used to reduce the cost to customers through the RNG Rider. Accordingly, the Company grossed up the RNG tax credit consistent with treatment of the excess deferred taxes, thereby creating a deferred tax asset of $655,862, which is also being amortized over the 20-year tax-life of the related asset. The Company recognized $127,404 of amortization as part of income tax expense on the consolidated statements of income in both fiscal2025 and2024 related to the federal RNG tax credit.

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

Deferred tax assets and liabilities are recorded on the consolidated balance sheets on a net basis by taxing jurisdictions. As of* September 30, 2025and2024*, the Company's consolidated balance sheets included net deferred tax liabilities of $2,277,550 and $1,890,562, respectively, in deferred credits and other non-current liabilities and net deferred tax assets of $617,390 and $771,746, respectively, in other non-current assets.

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ASC740 provides for the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recognized in the financial statements. The Company evaluated its tax positions and recorded a reserve for unrecognized tax benefits of $273,936 as of* September 30, 2024.*These unrecognized tax benefits relate to tax positions taken in the Company's prior tax returns. The reduction to $0 in the current year is due to the adjustments made to the Company's income tax assets and liabilities as a result of the FTS previously discussed. A reconciliation of the Company's unrecognized tax benefits is as follows:

The Company’s policy is to classify interest associated with uncertain tax positions as interest expense in the financial statements. Tax penalties, if any, are netted against other income.

The Company files a consolidated federal income tax return and state income tax returns in Virginia and West Virginia, and thus subject to examinations by federal and state tax authorities. The Company adjusted its income tax assets and liabilities to reflect the outcome of the FTS as of* September 30, 2025.Due to the federal government shutdown in Octoberand November 2025,the Company hasnot* received final notice from the IRS officially closing the Company's federal returns for fiscal 2018 and 2019. Once final notice is received, the federal returns and the state returns for Virginia and West Virginia for the tax years ended through* September**30,* 2022 are closed to examination.

The KEYSOP provides for the issuance of common stock options to officers and certain other full-time salaried employees to acquire shares of the Company’s common stock. As of* September 30, 2025*, the number of shares available for future grants was 16,000.

ASC718, Compensation-*Stock Compensation,requires that compensation expense be recognized for the issuance of equity instruments to employees. No options were granted during the fiscal year ended September 30, 2025.During the fiscal year ended September 30, 2024,*the Board approved stock option grants to certain officers. As required by the KEYSOP, each option's exercise price per share equaled the fair value of the Company's common stock on the grant date. Pursuant to the plan, the options vest over asix-month period and are exercisable over aten-year period from the date of issuance.

As the Company's stock options arenot traded on the open market, the fair value of each grant is estimated on the date of grant using the Black-Scholes option pricing model including the following assumptions:

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The underlying methods regarding each assumption are as follows:

Expected volatility is based on the historical volatility of the daily closing price of the Company's common stock.

Expected dividend rate is based on historical dividend payout trends.

Expected exercise term is based on the average time historical option grants were outstanding before being exercised.

Risk-free interest rate is based on the7-year Treasury rate on the date of option grant.

Forfeitures are recognized when they occur.

Stock option transactions under the Company's plans are summarized below.

(1) Aggregate intrinsic value includes only those options where the exercise price is below the market price.

Stock-based compensation related to stock options disclosed in the table above is included within operations and maintenance expense on the consolidated statements of income.

Dividend Reinvestment and Stock Purchase Plan

The Company offers a DRIP plan to shareholders of record for the reinvestment of dividends and the opportunity to purchase of up to $100,000 per year in additional shares of common stock of the Company. Under the DRIP, the Company issued 30,027 and 33,226 shares in2025 and2024, respectively.

After taking into account the activity discussed above and dividends reinvested, as of* September 30, 2025*, the Company had 202,371 shares of stock available for issuance under the DRIP.

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Restricted Stock Plan for Outside Directors

The Board of Directors of the Company implemented the RSPD in1997. Under the RSPD, each director* mayelect annually to have up to 100% of his or her fees paid in shares of common stock ("Director Restricted Stock"); however, a minimum of 40% of the monthly retainer fee must be paid to each non-employee director of Resources in shares of Director Restricted Stock until such time as the director has accumulated at least 10,000 shares. The number of shares of Director Restricted Stock awarded each month is determined based on the closing sales price of Resources' common stock on the Nasdaq Global Market on thefirst* business day of the month. The Director Restricted Stock issued under the Plan vests only in the case of a participant's death, disability, retirement, or in the event of a change in control of Resources. The Director Restricted Stock* may**not* be sold, transferred, assigned or pledged by the participant until the shares have vested under the terms of the Plan. The shares of Director Restricted Stock will be forfeited to Resources by a participant's voluntary resignation during his or her term on the Board or removal for cause as a director.

The Company assumes all directors will complete their term and there will beno forfeiture of the Director Restricted Stock. Since the inception of the RSPD,no director has forfeited any shares of Director Restricted Stock. The Company recognizes the market value of the Director Restricted Stock as compensation in the period it is issued.

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

The fair market value of the Director Restricted Stock included as compensation during fiscal years ended* September 30,2025 and2024 was $331,030 and $299,200, respectively, and included within operations and maintenance expense on the consolidated statements of income. No Director Restricted Stock was forfeited during fiscal years ended September 30,*2025 or2024.

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

RGC Resources, Inc. Restricted Stock Plan

The Board of Directors of the Company implemented the RSPO in2017 as approved by shareholders. Under the RSPO, the Compensation Committee of the Board of Directors* maygrant shares of common stock ("Officer Restricted Stock") that vest over time to key employees and officers for the purpose of attracting and retaining those individuals essential to the operation and growth of the Company. The RSPO provides for certain restrictions and non-transferability requirements until minimum levels of ownership are obtained. Such restrictions may*continue beyond the vesting period.

The Company assumes all officers will complete their requirements and there will beno forfeiture of the Officer Restricted Stock.

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The following table reflects the officer compensation activity pursuant to the RSPO:

The fair market value of the Officer Restricted Stock included as compensation during fiscal years ended* September 30,2025 and2024 was $673,057 and $660,424, respectively, and included within operations and maintenance expense on the consolidated statements of income. As of September 30, 2025and2024*, there was $222,026 and $285,683, respectively, of unamortized compensation expense related to unvested Officer Restricted Stock. No Officer Restricted Stock was forfeited during fiscal years ended* September 30,*2025 or2024.

After taking into account the activity discussed above and dividends reinvested, as of* September 30, 2025*, the Company had 286,560 shares available for issuance under the RSPO.

Stock Bonus Plan

Shares from the Stock Bonus Plan* maybe issued to certain employees and management personnel in recognition of their performance and service. Under the Stock Bonus Plan, the Company issued 1,352 and 1,562 valued at $27,500 and $24,841, respectively, during the fiscal years ended September 30,*2025 and2024.

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

The Company sponsors both a noncontributory pension plan and a postretirement plan. The pension plan covers all employees hired prior to* January 2017and benefits fully vest after 5 years of credited service. Benefits paid to retirees are based on age at retirement, years of service and average compensation. Effective January 1, 2017,a "soft freeze" to the pension plan was implemented, and employees hired on or after that date areno* longer eligible to participate. Commensurate with the "soft freeze" in the pension plan, the Company amended its401(k) Plan, allowing management to authorize a discretionary contribution to the401(k) account for those employees hired on or after* January 1, 2017.The amount, if any, of this discretionary contribution would be determined each year and would be applied to the eligible employees in the following calendar year. This Company contribution would be in addition to any employee elected deferrals and employer match as provided for under the401*(k) Plan.

The postretirement plan provides certain health care, supplemental retirement and life insurance benefits to retired employees who meet specific age and service requirements. Employees hired prior to* January**1,* 2000 are eligible to participate in the postretirement plan. Employees must have a minimum of 10 years of service and retire after attaining the age of 55 in order to vest in the postretirement plan. Retiree contributions to the plan are based on the number of years of service to the Company as determined under the pension plan.

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Employers who sponsor defined benefit plans must recognize the funded status of defined benefit pension and other postretirement plans as an asset or liability in their statements of financial position and recognize changes in that funded status in the year in which the changes occur through comprehensive income. For pension plans, the benefit obligation is the projected benefit obligation, and for other postretirement plans, the benefit obligation is the accumulated benefit obligation. The Company established a regulatory asset for the portion of the obligation expected to be recovered through rates in future periods. The regulatory asset is adjusted for the recognition of actuarial gains and losses. The portion of the obligation attributable to the unregulated operations of the holding company is recognized in other comprehensive income, with actuarial gains and losses recognized using the corridor method.

The following table sets forth the benefit obligation, fair value of plan assets, the funded status of the plans, and amounts recognized in the Company’s consolidated financial statements:

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The Company expects that approximately $31,000, before tax, of AOCI will be recognized in net periodic benefit costs in fiscal2026 and approximately $31,000 of amounts deferred as regulatory assets and approximately $158,000 of amounts deferred as regulatory liabilities will be amortized and recognized in net periodic benefit costs in fiscal2026.

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

To develop the expected long-term rate of return on plan assets assumption, the Company, with input from the Plans' actuaries and investment advisors, considered the historical returns and the future expectations for returns for each asset class, as well as the target asset allocation of each plan’s portfolio.

Components of net periodic benefit cost are as follows:

Service cost is included in operations and maintenance expense in the consolidated statements of income. All other components of net periodic benefit costs are included in other income, net in the consolidated statements of income.

The assumed health care cost trend rates used in measuring the accumulated benefit obligation for the postretirement plan are presented below:

The health care cost trend rate assumptions could have a significant effect on the amounts reported. A change of1% would have the following effects:

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The primary objectives of both plans' investment policies are to maintain investment portfolios that diversify risk through prudent asset allocation parameters, achieve asset returns that meet or exceed the corresponding actuarial assumptions and will provide for future benefits. The Company's pension plan allocation approach seeks to match the duration of the fixed income portion of the portfolio with the duration of the plan's liabilities. Such allocation is designed to reduce the overall volatility in the pension plan relative to the funded status. The equity allocations in both plans provide for potential returns to offset growth in the corresponding liabilities.

Based on its most recent evaluation of returns for the asset classes within each plan's investment portfolio, the Company set the expected long-term rate of return for both the pension plan and the postretirement plan for fiscal2026 at 5.75%.

The Company’s ultimate target and actual asset allocation in the pension and postretirement plans as of* September 30, 2025* and2024 were:

The Company uses the fair value hierarchy described in Note1 to classify these assets. The mutual funds are included under Level1 in the fair value hierarchy as their fair values are based on quoted net asset values of the shares held in the investments in the plans. The bond funds and certain other investments are included under Level2 as these investments have observable Level2 pricing inputs, including quoted prices for similar assets in active or non-active markets. While the underlying asset values are quoted prices, the net asset value of a unit in these funds isnot publicly quoted. The following tables contain the fair value classifications of the plans' assets:

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Each mutual fund or common collective trust fund has been categorized based on its primary investment strategy.

Annual funding contributions to the pension plan and postretirement plan are made under advisement from the Company's actuaries and investment advisor based upon ERISA funding requirements. For the years ended* September 30, 2025and2024*, no contributions were made to the pension plan or postretirement plan. At this time, the Company doesnot anticipate making any funding contributions to the pension plan or postretirement plan in fiscal2026.

The following table reflects expected future benefit payments:

The NQDC Plan is an unfunded, nonqualified benefit plan offered to select members of senior managementnot eligible to participate in the pension plan. The NQDC Plan also contains a long-term retention element for certain members of senior management. Under the NQDC Plan, participants have the right to defer a percentage of base salary as well as receive discretionary credits from the Company. The Company's discretionary credits vest over time. Any benefits distributed from the NQDC Plan are paid from the general assets of the Company. As the plan is unfunded, the balance reflected in the table below is a noncurrent liability included in benefit plan liabilities on the consolidated balance sheet.

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The Company sponsors a401(k) Plan covering all eligible employees who elect to participate. Employees* maycontribute from 1% to 50% of their annual compensation to the401*(k) Plan, either on a pre-tax or post-tax basis, limited to a maximum annual amount as set periodically by the IRS. The Company matches 100% of the participant’sfirst 4% of contributions and 50% of the next 2% of contributions. The401(k) Plan also provides for discretionary contributions for employees hired on or after* January 1, 2017.*The following table reflects the Company's contributions:

During2023, the Company entered into a land lease in conjunction with its RNG facility that has a 20-year term withtwo five-year Company renewal options that arenot considered part of the ROU asset and liability as it wasnot reasonably certain that the Company would exercise these options. The Company also hastwo other operating leases with original terms ranging from 3 to 6 years,one of which was renewed during fiscal2025. The operating lease ROU assets of $341,612 are reflected inother non-current assets in the consolidated balance sheets. The current operating lease liabilities of $25,600 and non-current lease liabilities of $319,573 are included inother current liabilities and deferred credits andother non-current liabilities, respectively, in the consolidated balance sheets. The cost components of the Company’s operating leases are included under operations and maintenance expense in the consolidated statements of income and were less than $50,000 for each period presented.

Other information related to leases were as follows:

On* September 30, 2025,*the future minimum rental payments under non-cancelable operating leases were as follows:

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Long-Term Contracts

Due to the nature of the natural gas distribution business, Roanoke Gas enters into agreements with suppliers and pipelines to contract for natural gas commodity purchases, storage capacity and pipeline delivery capacity. Roanoke Gas obtains most of its natural gas supply throughthird-party asset management contracts. Through* March 31, 2025,the Company utilizedtwo* asset managers to optimize the use of its transportation, storage rights and gas supply inventories, which helps to ensure a secure and reliable source of natural gas. Those services were consolidated toone asset manager as of* April 1, 2025.Under the current asset management contract, Roanoke Gas has designated the asset manager to act as agent for its storage capacity and all gas balances in storage. Roanoke Gas retains ownership of gas in storage. Under provisions of this contract, Roanoke Gas is obligated to purchase its winter storage requirements from the asset manager during the spring and summer injection periods at market price. The current asset management contract was signed for athree year period which will expire in March 2028.The volumetric obligation as of September 30, 2025* for the remainder of the contract period is 2,071,061 DTH for fiscal years2026 and2027 and 295,721 DTH for fiscal year2028.

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

Roanoke Gas also has contracts for pipeline and storage capacity which extend for various periods. These capacity costs and related fees are valued at tariff rates in place as of* September 30, 2025*. These rates* mayincrease in the future based upon rate filings and rate orders granting a rate change to the pipeline or storage operator. Subsequent to year end,one contract price increased materially effective November 1, 2025,as a result of the supplier filing a rate case; however, this rate hasnot* yet been finalized. Roanoke Gas expended approximately $40,843,000 and $30,880,000 under the asset management, pipeline and storage contracts in fiscal years2025 and2024, respectively, including approximately $4,180,000 and $1,048,000 in fiscal years2025 and2024, respectively, related to the MVP in which the Company has an investment. The table below details the pipeline and storage capacity commitments as of* September 30, 2025*for the remainder of the contract period.

Roanoke Gas maintains franchise agreements granted by the local cities and towns served by the Company. Roanoke Gas renewed its franchise agreements with the City of Roanoke, the City of Salem and the Town of Vinton in2016 for 20-year terms to expire in* December 2035.Per these agreements, franchise fees increase at a rate of 3% annually. As of September 30, 2025*, $1,690,215 in future obligations remain under the franchise agreements.

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Other Contracts

The Company maintains other agreements in the ordinary course of business covering various maintenance, equipment, user fees and service contracts. These agreements currently extend through* December 2031and arenot* material to the Company.

Environmental Matters

Roanoke Gas operated an MGP as a source of fuel for lighting and heating until the early1950’s. A by-product of operating the MGP was coal tar, and the potential exists for tar waste contaminants at the former plant site. While the Company doesnot currently recognize any commitments or contingencies related to environmental costs, should the Company ever be required to remediate the site, it will pursue all prudent and reasonable means to recover any related costs, including the use of insurance claims and regulatory approval for rate case recognition of expenses associated with any work required.

The Company has evaluated subsequent events through the date the financial statements were issued. There wereno other itemsnot otherwise disclosed which would have materially impacted the Company’s consolidated financial statements.