UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED ~~September 30, 2019~~March 31, 2020

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

COMMISSION FILE NUMBER: 001-37796

Infrastructure and Energy Alternatives, Inc.

(Exact Name of Registrant as Specified in Charter)



Delaware				47-4787177
(State or Other Jurisdiction of Incorporation)				(IRS Employer Identification No.)



6325 Digital Way Suite 460 Indianapolis, Indiana		46278
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code: (765) 828-2580

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



Title of each class	Trading Symbols(s)	Name of exchange on which registered
Common Stock, $0.0001 par value	IEA	The NASDAQ Stock Market LLC
Warrants for Common Stock	IEAWW	The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past ninety days. þ Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). þ Yes ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act:

Large accelerated filer ¨ Accelerated filer þ¨ Non-accelerated filer ¨þ Smaller reporting company þ Emerging growth company þ¨

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ¨ Yes þ No

Number of shares of Common Stock outstanding as of the close of business on ~~November 12, 2019: 22,252,489.~~May 7, 2020: 22,506,233.



	Infrastructure and Energy Alternatives, Inc.
	Table of Contents

	PART I. FINANCIAL INFORMATION

Item 1	Financial Statements (unaudited)
	Condensed Consolidated Balance Sheets ~~as of September 30, 2019 and December 31, 2018~~	1
	Condensed Consolidated Statements of Operations and Comprehensive Income ~~for the three and nine months ended September 30, 2019 and 2018~~	2
	Condensed Consolidated Statements of Stockholders' Equity ~~for the three and nine months ended September 30, 2019 and 2018~~	3
	Condensed Consolidated Statements of Cash Flows ~~for the nine months ended September 30, 2019 and 2018~~	4
	Notes to Condensed Consolidated Financial Statements	6

Item 2	Management's Discussion and Analysis of Financial Condition and Results of Operations	2422
Item 3	Quantitative and Qualitative Disclosures About Market Risk	3933
Item 4	Controls and Procedures	4033

	Part II. OTHER INFORMATION
Item 1A	Risk Factors	4134
Item 35	~~Defaults Upon Senior Securities~~Other Information	4635
Item 6	Exhibits	4735

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

INFRASTRUCTURE AND ENERGY ALTERNATIVES, INC.

Condensed Consolidated Balance Sheets

($ in thousands, except per share data)

(Unaudited)


	September 30, 2019			December 31, 2018			March 31, 2020			December 31, 2019
Assets
Current assets:
Cash and cash equivalents	43,174			71,311			58,081			147,259
Accounts receivable, net	244,465			225,366			154,699			203,645
Costs and estimated earnings in excess of billings on uncompleted contracts	109,540			47,121
Contract assets							193,851			179,303
Prepaid expenses and other current assets	18,533			12,864			22,178			16,855
Total current assets	415,712			356,662			428,809			547,062

Property, plant and equipment, net	151,784			176,178			134,753			140,488
Operating lease asset							43,444			43,431
Intangible assets, net							33,902			37,272
Goodwill	37,373			40,257			37,373			37,373
Intangibles	40,626			50,874
Company-owned life insurance	3,935			3,854			4,153			4,752
Deferred income taxes							14,072			12,992
Other assets	550			188			492			1,551
Deferred income taxes	15,847			11,215
Total assets	$	665,827		$	639,228		$	696,998		$	824,921

Liabilities and Stockholder's Equity (Deficit)
Current liabilities:
Accounts payable	126,484			158,075			110,485			177,783
Accrued liabilities	131,170			94,059			121,445			158,103
Billings in excess of costs and estimated earnings on uncompleted contracts	71,814			62,234
Current portion of capital lease obligations	24,640			17,615
Contract liabilities							107,253			115,634
Current portion of finance lease obligations							23,437			23,183
Current portion of operating lease obligations							10,191			9,628
Current portion of long-term debt	31,119			32,580			1,693			1,946
Total current liabilities	385,227			364,563			374,504			486,277

Capital lease obligations, net of current maturities	49,268			45,912
Finance lease obligations, less current portion							37,826			41,055
Operating lease obligations, less current portion							34,131			34,572
Long-term debt, less current portion	226,606			295,727			154,788			162,901
Debt - Series B Preferred Stock	76,766			—			175,145			166,141
Series B Preferred Stock - warrant obligations	4,223			—			2,200			17,591
Deferred compensation	8,077			6,157			6,593			8,004
Contingent consideration	—			23,082
Total liabilities	$	750,167		$	735,441		$	785,187		$	916,541

Commitments and contingencies:

Series A Preferred Stock, par value, $0.0001 per share; 1,000,000 shares authorized; 34,965 shares and 34,965 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively	34,965			34,965
Series A Preferred Stock, par value, $0.0001 per share; 1,000,000 shares authorized; 17,483 shares and 17,483 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively							17,483			17,483

Stockholders' equity (deficit):
Common stock, par value, $0.0001 per share; 100,000,000 shares authorized; 20,460,533 and 22,155,271 shares issued and 20,446,811 and 22,155,271 outstanding at September 30, 2019 and December 31, 2018, respectively	2			2
Treasury stock, 13,722 shares at cost	(76		)	—
Common stock, par value, $0.0001 per share; 100,000,000 shares authorized; 20,700,555 and 20,460,533 shares issued and 20,648,793 and 20,446,811 outstanding at March 31, 2020 and December 31, 2019, respectively							2			2
Treasury stock, 51,762 and 13,722 shares at cost at March 31, 2020 and December 31, 2019, respectively.							(160		)	(76		)
Additional paid in capital	18,018			4,751			33,425			17,167
Retained earnings (deficit)	(137,249		)	(135,931		)	(138,939		)	(126,196		)
Total stockholders' equity (deficit)	(119,305		)	(131,178		)	(105,672		)	(109,103		)
Total liabilities and stockholders' equity (deficit)	$	665,827		$	639,228		$	696,998		$	824,921

See accompanying notes to condensed consolidated financial statements.

INFRASTRUCTURE AND ENERGY ALTERNATIVES, INC.

Condensed Consolidated ~~Statement~~Statements of Operations

($ in thousands, except per share data)

(Unaudited)


	Three Months Ended						Nine Months Ended						Three Months Ended
	September 30,						September 30,						March 31,
	2019			2018			2019			2018			2020			2019
Revenue	$	422,022		$	279,279		$	940,793		$	503,487		$	358,163		$	189,781
Cost of revenue	369,152			252,271			849,728			462,765			325,122			184,037
Gross profit	52,870			27,008			91,065			40,722			33,041			5,744

Selling, general and administrative expenses	31,313			16,964			84,945			43,122			29,484			27,754
Income (loss) from operations	21,557			10,044			6,120			(2,400		)	3,557			(22,010		)

Other income (expense), net:
Interest expense, net	(13,959		)	(1,579		)	(35,822		)	(3,960		)	(16,065		)	(10,367		)
Other income (expense)	4,455			(1,859		)	22,557			(1,848		)
Income (loss) before benefit for income taxes	12,053			6,606			(7,145		)	(8,208		)
Other expense													(1,102		)	(170		)
Loss before benefit for income taxes													(13,610		)	(32,547		)

Benefit (provision) for income taxes	556			(870		)	3,073			1,467
Benefit for income taxes													867			8,908

Net income (loss)	$	12,609		$	5,736		$	(4,072	)	$	(6,741	)
Net loss													$	(12,743	)	$	(23,639	)

Net income (loss) per common share - basic	0.37			0.24			(1.44		)	(0.36		)
Net income (loss) per common share - diluted	0.24			0.23			(1.44		)	(0.36		)
Net loss per common share - basic													(0.66		)	(1.09		)
Net loss per common share - diluted													(0.66		)	(1.09		)
Weighted average shares - basic	20,446,811			21,577,650			20,425,801			21,577,650			20,522,216			22,188,757
Weighted average shares - diluted	35,419,432			25,100,088			20,425,801			21,577,650			20,522,216			22,188,757

See accompanying notes to condensed consolidated financial statements.

INFRASTRUCTURE AND ENERGY ALTERNATIVES, INC.

Condensed Consolidated Statements of Stockholders' Equity (Deficit)

($ in thousands)

(Unaudited)


	Common Stock				Additional Paid-in Capital				Treasury Stock					Accumulated Deficit				Total Equity (Deficit)
	Shares		Par Value					Shares		Cost
Balance at December 31, 2017	21,578		2			—				—		—			(10,021		)				(10,019	)
Net loss														(17,392		)		(17,392		)
Issuance of Series A Preferred stock														(34,965		)		(34,965		)
Contingent consideration														(69,373		)		(69,373		)
Merger recapitalization transaction														(22,973		)		(22,973		)
Balance at March 31, 2018	21,578		$	2	$	—			—		$	—		$	(154,724	)		$	(154,722	)
Net income														4,915				4,915
Merger recapitalization transaction														(2,843		)		(2,843		)
Preferred dividends														(548		)		(548		)
Balance at June 30, 2018	21,578		$	2	$	—			—		$	—		$	(153,200	)		$	(153,198	)
Net income														5,736				5,736
Share-based compensation					500													500
Preferred dividends														(524		)		(524		)
Balance at September 30, 2018	21,578		$	2	$	500			—		$	—		$	(147,988	)		$	(147,486	)
																					Common Stock			Additional Paid-in Capital				Treasury Stock					Accumulated Deficit				Total Equity (Deficit)
																					Shares	Par Value					Shares		Cost
Balance at December 31, 2018	22,155		2		4,751				—		—			(135,931		)		(131,178		)	22,155	2			4,751				—		—			(135,931		)		(131,178		)
Net loss														(22,889		)		(22,889		)	—	—		—				—		—			(23,639		)		(23,639		)
Share-based compensation					1,040													1,040			—	—		1,040				—		—			—				1,040
Share-based payment transaction	111		—		235				(14	)	(76		)					159			111	—		235				(14	)	(76		)	—				159
Merger recapitalization transaction														2,754				2,754			—	—		—				—		—			2,754				2,754
Cumulative effect from adoption of new accounting standard, net of tax																					—	—		—				—		—			750				750
Preferred dividends					(525		)											(525		)	—	—		(525		)		—		—			—				(525		)
Balance at March 31, 2019	22,266		$	2	$	5,501			(14	)	$	(76	)	$	(156,066	)		$	(150,639	)	22,266	$	2	$	5,501			(14	)	$	(76	)	$	(156,066	)		$	(150,639	)
Net income														6,208				6,208

Balance at December 31, 2019																					20,461	$	2	$	17,167			(14	)	$	(76	)	$	(126,196	)		$	(109,103	)
Net loss																					—	—		—				—		—			(12,743		)		(12,743		)
Share-based compensation					720													720			—	—		1,113				—		—			—				1,113
Share-based payment transactions																					240	—		280				(38	)	(84		)	—				196
Series B Preferred Stock - Warrants at close					9,422													9,422			—	—		15,631				—		—			—				15,631
Preferred dividends					(918		)											(918		)	—	—		(766		)		—		—			—				(766		)
Balance at June 30, 2019	22,266		$	2	$	14,725			(14	)	$	(76	)	$	(149,858	)		$	(135,207	)
Net income														12,609				12,609
Removal of Earnout Shares (See Note 1)	(1,805	)	—															—
Share-based compensation					1,052													1,052
Series B Preferred Stock - Warrants at close					3,000													3,000
Preferred dividends					(759		)											(759		)
Balance at September 30, 2019	20,461		$	2	$	18,018			(14	)	$	(76	)	$	(137,249	)		$	(119,305	)
Balance at March 31, 2020																					20,701	$	2	$	33,425			(52	)	$	(160	)	$	(138,939	)		$	(105,672	)

See accompanying notes to condensed consolidated financial statements.

INFRASTRUCTURE AND ENERGY ALTERNATIVES, INC.

Condensed Consolidated Statements of Cash Flows

($ in thousands)

(Unaudited)


	Nine Months Ended September 30,						Three Months Ended March 31,
	2019			2018			2020			2019
Cash flows from operating activities:
Net loss	$	(4,072	)	$	(6,741	)	$	(12,743	)	$	(23,639	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	36,373			6,591			11,888			12,017
Contingent consideration fair value adjustment	(23,082		)	—
Warrant liability fair value adjustment							1,057			—
Amortization of debt discounts and issuance costs	3,765			357			2,237			1,239
Share-based compensation expense	2,812			500			1,113			1,040
(Gain) loss on sale of equipment	743			28
Deferred compensation	1,494			313			(1,371		)	735
Accrued dividends on Series B Preferred Stock	4,135			—			7,959			—
Deferred income taxes	(3,073		)	(577		)	(1,080		)	(8,908		)
Other, net							733			168
Change in operating assets and liabilities:
Accounts receivable	(19,108		)	(72,895		)	48,931			82,383
Costs and estimated earnings in excess of billings on uncompleted contracts	(62,419		)	(46,030		)
Contract assets							(14,548		)	(12,405		)
Prepaid expenses and other assets	(5,938		)	(1,489		)	(5,212		)	(3,149		)
Accounts payable and accrued liabilities	3,317			131,682			(104,760		)	(110,060		)
Billings in excess of costs and estimated earnings on uncompleted contracts	9,580			19,896
Net cash provided by (used in) operating activities	(55,473		)	31,635
Contract liabilities							(8,381		)	23,032
Net cash used in operating activities							(74,177		)	(37,547		)

Cash flow from investing activities:
Company-owned life insurance	(81		)	(156		)	599			(202		)
Purchases of property, plant and equipment	(5,599		)	(2,445		)	(2,231		)	(1,908		)
Proceeds from sale of property, plant and equipment	7,266			40			1,719			47
Acquisition of business, net of cash acquired	—			(106,579		)
Net cash provided by (used in) investing activities	1,586			(109,140		)	87			(2,063		)

Cash flows from financing activities:
Proceeds from long-term debt	50,400			381,272			46,000			9,400
Payments on long-term debt	(121,215		)	(139,501		)	(55,853		)	(16,151		)
Payments on line of credit - short term	—			(38,447		)
Extinguishment of debt	—			(51,762		)
Debt financing fees	(14,738		)	(12,675		)
Payments on capital lease obligations	(15,953		)	(4,284		)
Payments on finance lease obligations							(5,781		)	(4,289		)
Sale-leaseback transaction	24,343			—			—			24,343
Preferred dividends	—			(548		)
Proceeds from issuance of stock - Series B Preferred Stock	100,000			—			350			—
Proceeds from stock-based awards, net	159			—			196			159
Merger recapitalization transaction	2,754			(25,816		)	—			2,754
Net cash provided by (used in) financing activities	25,750			108,239			(15,088		)	16,216

Net change in cash and cash equivalents	(28,137		)	30,734			(89,178		)	(23,394		)

Cash and cash equivalents, beginning of the period	71,311			4,877			147,259			71,311

Cash and cash equivalents, end of the period	$	43,174		$	35,611		$	58,081		$	47,917

See accompanying notes to condensed consolidated financial statements.

INFRASTRUCTURE AND ENERGY ALTERNATIVES, INC.

Condensed Consolidated Statements of Cash Flows

($ in thousands)

(Unaudited)

(Continued)

Nine Months Ended September 30,
2019 2018
Supplemental disclosures:
  Cash paid for interest 28,240
3,622
  Cash paid for income taxes 250
649
Schedule of non-cash activities:
   Acquisition of assets/liabilities through capital lease 1,992
12,133
   Acquisition-related contingent consideration, new business combinations —
69,373
   Issuance of common shares —
90,282
   Issuance of preferred shares —
34,965
   Preferred dividends declared 2,202
524



	Three Months Ended March 31,
	2020		2019
Supplemental disclosures:
Cash paid for interest	6,053		9,168
Cash paid (received) for income taxes	(229	)	190
Schedule of non-cash activities:
Acquisition of assets/liabilities through finance lease	2,806		—
Acquisition of assets/liabilities through operating lease	2,732		971
Preferred dividends declared	766		525

See accompanying notes to condensed consolidated financial statements.

INFRASTRUCTURE AND ENERGY ALTERNATIVES, INC.

Notes to the Condensed Consolidated Financial Statements

(unaudited)

Note 1. Business, Basis of Presentation and Significant Accounting Policies

Organization and Reportable Segments

Infrastructure and Energy Alternatives, Inc., a Delaware corporation, is a holding company organized on August 4, 2015 (together with its wholly-owned subsidiaries, “IEA” or the “Company”). On March 26, 2018, we became a public company by consummating a merger (the “Merger”) pursuant to an Agreement and Plan of Merger, dated November 3, 2017, with M III Acquisition Corporation (“M III”).

As of December 31, 2019, the Company's total annual gross revenues exceeded $1.07 billion and we are no longer an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act (the “JOBS Act”).

We segregate our business into two reportable segments: the Renewables segment and the Specialty Civil segment. See Note 10. Segments for a description of the reportable segments and their operations.

COVID-19 Pandemic

During March 2020, the World Health Organization declared a global pandemic related to the rapidly growing outbreak of a novel strain of coronavirus (“COVID-19”). The ~~Company specializes~~COVID-19 pandemic has significantly affected economic conditions in ~~providing complete engineering, procurement and construction (“EPC”) services throughout~~ the United States ~~(“U.S.”)~~and internationally as national, state and local governments reacted to the public health crisis by requiring mitigation measures that have disrupted business activities for an uncertain period of time. The effects of the COVID-19 pandemic could affect the Company’s future business activities and financial results, including; reduced crew productivity, contract amendments/cancellations, higher operating costs and/or delayed project start dates or project shutdowns that may be requested or mandated by governmental authorities or others.

The effects of the COVID-19 pandemic on the Company’s financial results for the ~~renewable energy, traditional power~~three months ended March 31, 2020 has had no negative material impact. Most of the Company’s construction services are currently deemed essential under governmental mitigation orders and ~~civil infrastructure industries. These services include~~substantially all of its business segments continue to operate. Management’s top priority has been to take appropriate actions to protect the ~~design, site development, construction, installation~~health and ~~restoration~~safety of ~~infrastructure. Although~~its employees, customers and business partners, including adjusting its standard operating procedures to respond to evolving health guidelines. Management believes that it is taking appropriate steps to mitigate any potential impact to the ~~Company has historically focused on~~Company; however, given the ~~wind industry, its recent acquisitions have expanded its construction capabilities and geographic footprint in~~uncertainty regarding the ~~areas~~potential effects of renewables, environmental remediation, industrial maintenance, specialty paving and heavy civil and rail infrastructure construction, creating a diverse national platform of specialty construction capabilities.the COVID-19 pandemic, any future impacts cannot be quantified or predicted with specificity.

Principles of Consolidation

The accompanying unaudited condensed ~~unaudited~~ consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions for Quarterly Reports on Form 10-Q and Rule 10-01 of Regulation S-X. Pursuant to these rules and regulations, certain information and footnote disclosures normally included in the annual audited consolidated financial statements prepared in accordance with GAAP have been condensed or omitted.

The unaudited condensed ~~unaudited~~ consolidated financial statements include the accounts of IEA and its wholly-owned direct and indirect domestic and foreign subsidiaries and in the opinion of management, these financial statements reflect all adjustments (consisting of normal recurring adjustments) that are necessary to present fairly the results of operations for the interim periods presented. The results of operations for the ~~nine~~three months ended ~~September 30, 2019~~March 31, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2019.~~2020. These financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, ~~2018~~2019 and notes thereto included in the Company’s ~~2018~~2019 Annual Report on Form 10-K.

~~Reportable Segments~~

~~We segregate our business into two reportable segments: the Renewables (“Renewables”) segment and the Heavy Civil and Industrial (“Specialty Civil”) segment. See~~ ~~Note 13. Segments~~ ~~for a description of the reportable segments and their operations.~~

Basis of Accounting and Use of Estimates

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with GAAP. The preparation of the condensed consolidated financial statements in conformity with GAAP requires the use of estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and the

accompanying notes. Key estimates include: the recognition of ~~project~~ revenue and project profit or ~~loss (which the Company defines as project revenue less project costs~~loss; fair value estimates, including those related to Series B Preferred Stock; valuations of ~~revenue),~~goodwill and intangible assets; asset lives used in ~~particular, on construction contracts accounted for under the percentage-of completion method, for which the recorded amounts require estimates of costs to complete projects, ultimate project profit~~computing depreciation and ~~the amount of probable contract price adjustments as inputs; allowances for doubtful accounts;~~amortization; accrued ~~self-insurance reserves;~~self-insured claims; other reserves and accruals; accounting for income taxes; and the estimated impact of contingencies and ongoing litigation. While management believes that ~~such~~its estimates are reasonable when considered in conjunction with the Company’s consolidated financial position and results of operations, actual results could differ materially from those estimates.

~~“Emerging Growth Company” Reporting Requirements:~~Revenue Recognition

The Company ~~qualifies~~adopted the requirements of Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers, which is also referred to as ~~an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act (the “JOBS Act”~~Accounting Standards Codification (“ASC”). For as long as a company is deemed to be an “emerging growth company,” it may take advantage of specified reduced reporting and other regulatory requirements that are generally unavailable to other public companies. Among other things, we are not required to provide an auditor attestation report on the assessment of the internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act of 2002. Section 107 of the JOBS Act also provides that an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise

apply to private companies. We have elected to take advantage of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.

~~We would cease to be an “emerging growth company” upon the earliest of:~~

~~the last day of the fiscal year following July 6, 2021, the five-year anniversary of the completion of our IPO;~~

~~the last day of the fiscal year in which our total annual gross revenues exceed $1.07 billion;~~

~~the date on which we have, during the previous three-year period, issued more than $1 billion in non-convertible debt~~

~~securities; or~~

~~the date on which we become a “large accelerated filer,” as defined in Rule 12b-2~~ Topic 606, under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which would occur if the market value of our common stock held by nonaffiliates exceeds $700 million as of the last day of our most recently completed second fiscal quarter.

~~We continue~~modified retrospective transition approach effective January 1, 2019, with application to monitor our status as an “emerging growth company” and are currently preparing for, and expect to be ready to comply with, the additional reporting and regulatory requirements that will be applicable to us when we cease to qualify as an “emerging growth company.”

~~Revenue Recognition~~

Revenue under construction contracts is accounted for under the percentage-of-completion method of accounting. Under the percentage-of-completion method, the Company estimates profit as the difference between total estimated revenue and total estimated cost of a contract and recognizes that profit over the contract term based on costs incurred. Contract costs include all direct materials, labor and subcontracted costs and those indirect costs related to contract performance, such as indirect labor, supplies, tools, repairs, depreciation and the operational costs of capital equipment. The Company also has unit-priceexisting contracts that were not ~~significant~~substantially completed as of ~~September 30,~~January 1, 2019. The Company adopted this standard for interim periods beginning after December 31, 2019, and recorded adjustments to the previously issued quarterly financial statements for the three months ended March 31, 2019. The impacts of adoption on the Company’s retained earnings on January 1, 2019 was primarily related to variable consideration on unapproved change orders. The cumulative impact of adopting Topic 606 required net adjustments of $750,000 to the statement of operations between revenue, cost of revenue and income taxes, thereby reducing income in the March 31, 2019 quarterly financial statements and reducing the December 31, 2019 accumulated deficit. The Company also adjusted the cashflow statement as of March 31, 2019, to reflect adoption.

Under Topic 606, revenue is recognized when control of promised goods and services is transferred to customers, and the amount of revenue recognized reflects the consideration to which an entity expects to be entitled in exchange for the goods and services transferred. Revenue is recognized by the Company primarily over time utilizing the cost-to-cost measure of progress for fixed price contracts and are based on cost for time and materials and other service contracts, consistent with the Company’s previous revenue recognition practices.

Contracts

The ~~estimation process~~Company derives revenue primarily from construction projects performed under contracts for ~~revenue recognized under~~specific projects requiring the ~~percentage-of-completion method is based on the professional knowledge~~construction and ~~experience~~installation of ~~the Company’s project managers, engineers~~an entire infrastructure system or specified units within an infrastructure system. The contracts contain multiple pricing options, including fixed price, time and ~~financial professionals. Management reviews estimates~~materials, or unit price. Renewable energy projects are performed for private customers while our Specialty Civil projects are performed for a mix of contract revenue and costs on an ongoing basis. Changes in job performance, job conditions and management’s assessment of expected contract settlements are factors that influence estimates of total contract value and total costs to complete those contracts and, therefore, the Company’s profit recognition. Changes in these factors may result in revisions to revenue, costs and income, and their effects are recognized in the period in which the revisions are determined, which could materially affect the Company’s results of operations in the period in which such changes are recognized.

various governmental entities.

Revenue derived from projects billed on a fixed-price basis totaled ~~98.5%~~96.0% and ~~99.8%~~90.2% of consolidated revenue from operations for the three months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018, respectively, and totaled 94.1% and 97.4% for the nine months ended September 30, 2019 and 2018,~~ respectively. Revenue and related costs for construction contracts billed on a time and materials basis are recognized as the services are rendered. Revenue derived from projects billed on a time and materials basis ~~also accounted for under the percentage of completion method~~ totaled ~~1.5%~~4.0% and ~~0.2%~~9.8% of consolidated revenue from operations for the three months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018, respectively, and totaled 5.9% and 2.6% for the nine months ended September 30, 2019 and 2018,~~ respectively.

Revenue from construction contracts is recognized over time using the cost-to-cost measure of progress for fixed price construction contracts. For these contracts, the cost-to-cost measure of progress best depicts the continuous transfer of control of goods or services to the customer. The contractual terms provide that the customer compensates the Company for services rendered.

Contract costs include all direct materials, labor and subcontracted costs, as well as indirect costs related to contract performance, such as indirect labor, supplies, tools, repairs and the operational costs of capital equipment. The cost estimation and review process for recognizing revenue over time under the cost-to-cost method is based on the professional knowledge and experience of the Company’s project managers, engineers and financial professionals. Management reviews estimates of total contract transaction price and total project costs on an ~~approved change order which can be reliably estimated as~~ongoing basis. Changes in job performance, job conditions and management’s assessment of expected variable consideration are factors that influence estimates of the total contract transaction price, total costs to ~~price, the anticipated revenues~~complete those contracts and profit recognition. Changes in these factors could result in revisions to revenue and costs of revenue in the period in which the revisions are determined on a prospective basis, which could materially affect the Company’s condensed consolidated results of operations for that period. Provisions for losses on uncompleted contracts are recorded in the period in which such losses are determined.

Performance Obligations

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account under Topic 606. The transaction price of a contract is allocated to a distinct performance obligation and recognized

as revenue when or as the performance obligation is satisfied. The Company’s contracts often require significant integrated services and, even when delivering multiple distinct services, are generally accounted for as a single performance obligation. Contract amendments and change orders are generally not distinct from the existing contract due to the significant integrated service provided in the context of the contract and are accounted for as a modification of the existing contract and performance obligation. With the exception of certain Specialty Civil service contracts, the majority of the Company’s performance obligations are completed within one year.

When more than one contract is entered into with a customer on or close to the same date, the Company evaluates whether those contracts should be combined and accounted for as a single contract as well as whether those contracts should be accounted for as more than one performance obligation. This evaluation requires significant judgment and is based on the facts and circumstances of the various contracts, which could change the amount of revenue and profit recognition in a given period depending upon the outcome of the evaluation.

Remaining performance obligations represent the amount of unearned transaction prices for contracts, including approved and unapproved change orders. As of March 31, 2020, the amount of the Company’s remaining performance obligations was $1,238.5 million. The Company expects to recognize approximately 81.6% of its remaining performance obligations as revenue during 2020. Revenue recognized from performance obligations satisfied in previous periods was ($2.0) million and $2.8 million, for the three months ended March 31, 2020 and 2019, respectively.

Variable Consideration

Transaction pricing for the Company’s contracts may include variable consideration, such as unapproved change orders, claims, incentives and liquidated damages. Management estimates variable consideration for a performance obligation utilizing estimation methods that best predict the amount of consideration to which the Company will be entitled. Variable consideration is included in the estimated transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Management’s estimates of variable consideration and determination of whether to include estimated amounts in transaction price are based on legal opinions, past practices with the customer, specific discussions, correspondence or preliminary negotiations with the customer and all other relevant information that is reasonably available. The effect of a change ~~order~~in variable consideration on the transaction price of a performance obligation is typically recognized as an adjustment to revenue on a cumulative catch-up basis. To the extent unapproved change orders, claims and liquidated damages reflected in transaction price are ~~added~~not resolved in the Company’s favor, or to the ~~total contract value~~extent incentives reflected in transaction price are not earned, there could be reductions in, or reversals of, previously recognized revenue.

As of March 31, 2020 and ~~total estimated costs~~year ended December 31, 2019, the Company included approximately $60.2 million and $73.3 million, respectively, of ~~the project, respectively. When costs are incurred for a) an~~ unapproved change ~~order which is probable to be approved~~ orders and/or ~~b) an approved change order which cannot be reliably estimated~~claims in the transaction price for certain contracts that were in the process of being resolved in the normal course of business, including through negotiation, arbitration and other proceedings. These transaction price adjustments are included within Contract Assets or Contract Liabilities as to price, the total anticipated costs of the change order are added to both the total contract value and total estimated costs for the project. Once a change order becomes approved and reliably estimable, any margin related to the change order is added to the total contract value of the project.appropriate. The Company actively engages ~~in substantive meetings~~ with its customers to complete the final change order approval process, and generally expects these processes to be completed within aone year. ~~The amounts~~Amounts ultimately realized upon final acceptance by ~~its~~ customers could be higher or lower than such estimated amounts.

Provisions for losses on uncompleted contracts are made in the period in which such losses become evident. The Company may incur costs subject to change orders, whether approved or unapproved by the customer, and/or claims related to certain contracts. Management determines the probability that such costs will be recovered based upon engineering studies and legal opinions, past practices with the customer and specific discussions, correspondence and/or preliminary negotiations with the customer.

~~Classification~~Disaggregation of ~~Construction Contract-Related Assets~~Revenue

The following tables disaggregate revenue by customers and ~~Liabilities~~

~~Contract costs include all direct subcontract, material, and labor costs, and those indirect costs related to contract~~

performance, such as indirect labor, supplies, tools, insurance, repairs, maintenance, communications, and use of Company-owned equipment. Contract revenues are earned and matched with related costs as incurred.

Costs and estimated earnings in excess of billings on uncompleted contracts are presented as a current asset in the accompanying condensed consolidated balance sheets, and billings in excess of costs and estimated earnings on uncompleted contracts are presented as a current liability in the accompanying condensed consolidated balance sheets. The Company’s contracts vary in duration, with the duration of some larger contracts exceeding one year. Consistent with industry practices,services performed, which the Company ~~includes the amounts realizable and payable under contracts, which may extend beyond one year, in current assets and current liabilities. These contract balances are generally settled within one year.~~

~~New Accounting Pronouncements~~

~~The effective dates shown in the following pronouncements are based on the Company's current status as an “emerging growth company.”~~

In May 2014, the Financial Accounting Standards Board ("FASB") issued guidance on the recognition of revenue from contracts with customers. The core principle of the guidance is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration which the company expects to receive in exchange for those goods or services. To achieve this core principle, the guidance provides a five-step analysis of transactions to determine when andbelieves best depicts how revenue is recognized. The guidance addresses several areas including transfer of control, contracts with multiple performance obligations, and costs to obtain and fulfill contracts. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. The standard will be effective for our fiscal year 2019 annual financial statements and for interim periods beginning in fiscal year 2020.its revenue:



(in thousands)	Three months ended
	March 31, 2020		March 31, 2019
Renewables
Wind	$	248,537	$	72,034
Solar	209		1,997
	$	248,746	$	74,031

Specialty Civil
Heavy civil	$	41,222	$	50,115
Rail	47,057		42,609
Environmental	21,138		23,026
	$	109,417	$	115,750

Concentrations

The Company ~~has substantially completed its assessment of~~had the potential effects of these ASUs on its consolidated financial statements, business processes, systems and controls. The Company’s assessment included a detailed review of representative contracts at each of the Company’s segments and a comparison of its historical accounting policies and practices to the new standard. Based on the Company’s review of various types of revenue arrangements, the Company expects to recognizefollowing approximate revenue and ~~earnings over time utilizing~~accounts receivable concentrations, net of allowances, for the cost-to-cost measure of progress for its fixed price contracts and other service agreements, consistent with current practice. For these contracts, the cost-to-cost measure of progress best depicts the transfer of control of goods or services to the customer under the new standard. The Company has substantially completed its analysis of the information necessary to enable the preparation of the financial statements and related disclosures under the new standard. As part of this analysis, the Company evaluated its information technology capabilities and systems, and doesperiods ended:



	Revenue %
	Three months ended				Accounts Receivable %
	2020		2019		March 31, 2020	December 31, 2019
Company A (Specialty Civil Segment)	*		21.1	%	*	*
Company B (Renewable Segment)	*		11.9	%	*	*
Company C (Renewables Segment)	11.5	%	*		*	*
Company D (Renewables Segment)	11.1	%	*		*	*

* Amount was not expect to incur significant information technology costs to modify systems currently in place. The Company will implement targeted changes to its internal reporting processes to facilitate gathering the data needed for reporting and disclosure under the new standard. The Company will also implement updates to its control processes and procedures, as necessary, based on changes resulting from the new standard. The Company does not expect any such updates to materially affect the Company’s internal controls over financial reporting.above 10% threshold

The Company anticipates adopting the standard using the modified retrospective transition approach. Under this approach, the new standard would apply to all new contracts initiated on or after January 1, 2019. For existing contracts that have remaining obligations as of January 1, 2019, any difference between the recognition criteriaRecently Adopted Accounting Standards - Guidance Adopted in these ASUs and the Company’s current revenue recognition practices would be recognized using a cumulative effect adjustment to the opening balance of retained earnings. Any potential effect of adoption of these ASUs has not yet been quantified; however, the Company anticipates the adoption will have an impact on both the amount and timing of revenue recognition related to unapproved change orders. The Company is training its impacted employees in business segments for the implementation of the new standard, and continues developing the disclosures required by the new standard. The Company is also reviewing certain contracts entered into by its business segments subsequent to its initial assessment that are expected to have performance obligations remaining as of January 1, 2019 for any cumulative effect adjustments that may be required upon adoption.

~~In February 2016, the FASB issued ASU 2016-02,Leases (Topic 842). Under ASU 2016-02, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: 1) a lease liability,~~

which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis, and 2) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2016-02 required entities to adopt the new leases standard using a modified retrospective method and initially apply the related guidance at the beginning of the earliest period presented in the financial statements. During July 2018, the FASB issued ASU 2018-11, which allows for an additional and optional transition method under which an entity would record a cumulative-effect adjustment at the beginning of the period of adoption. See ~~Note 10. Commitments and Contingencies~~ for additional information about our leases. The Company will early adopt the standard and it will be effective for our fiscal year 2019 annual financial statements and for interim periods beginning in fiscal year 2020. The Company is in the process of implementing leasing software to assist in the integration of the future standard.2020

In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820), Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement,” which eliminates certain disclosure requirements for recurring and non-recurring fair value measurements, such as the amount of and reason for transfers between Level 1 and Level 2 of the fair value hierarchy, and adds new disclosure requirements for Level 3 measurements. ASU 2018-13 is effective for all entities for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted for any eliminated or modified disclosures. Certain disclosures per ASU 2018-13 are required to be applied on a retrospective basis and others on a prospective basis. ~~The Company is currently assessing~~We adopted the standard on January 1, 2020, and it did not have an impact ~~these changes will have~~ on ~~its disclosure requirements~~our disclosures for fair value ~~measurement.~~measurements.

In February 2016, the FASB issued ASU 2016-02,“Leases (Topic 842),” which is effective for annual reporting periods beginning after December 15, 2018. Under Topic 842, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: i) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis, and ii) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Topic 842 requires entities to adopt the new lease standard using a modified retrospective method and initially apply the related guidance at the beginning of the earliest period presented in the financial statements.

The Company adopted Topic 842 using the modified retrospective method as of January 1, 2019 and for interim periods beginning after December 31, 2019, without adjusting comparative periods in the financial statements. The most

significant effect of the new guidance was the recognition of operating lease right-of-use assets and a liability for operating leases as of December 31, 2019. The accounting for finance leases (capital leases) was substantially unchanged. The Company elected to utilize the package of practical expedients that allowed entities to: (1) not reassess whether any expired or existing contracts were or contained leases; (2) retain the existing classification of lease contracts as of the date of adoption; (3) not reassess initial direct costs for any existing leases; and (4) not separate non-lease components for all classes of leased assets.

Recently Issued Accounting Standards Not Yet Adopted

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which introduced an expected credit loss methodology for the measurement and recognition of credit losses on most financial assets, including trade accounts receivables. The expected credit loss methodology under ASU 2016-13 is based on historical experience, current conditions and reasonable and supportable forecasts, and replaces the probable/incurred loss model for measuring and recognizing expected losses under current GAAP. The ASU also requires disclosure of information regarding how a company developed its allowance, including changes in the factors that influenced management’s estimate of expected credit losses and the reasons for those changes. The ASU and its related clarifying updates are effective for smaller reporting companies for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years, with early adoption permitted. We are still evaluating the new standard but do not expect it to have a material impact on our estimate of the allowance for uncollectable accounts.

In December 2019, the FASB issued ASU No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes,” which removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. This ASU is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. Depending on the amendment, adoption may be applied on the retrospective, modified retrospective, or prospective basis. We are currently evaluating the potential effects of adopting the provisions of ASU No. 2019-12.

Management has evaluated other recently issued accounting pronouncements and does not believe that they will have a significant impact on the financial statements and related disclosures.

Note 2. ~~Acquisitions~~

~~Acquisitions~~

~~CCS~~Contract Assets and Liabilities

~~On September 25, 2018,~~The timing of when we bill our customers is generally dependent upon agreed-upon contractual terms, milestone billings based on the ~~Company completed its acquisition~~completion of ~~Consolidated Construction Solutions I LLC (“CCS”) for $106.6 million~~certain phases of the work, or when services are provided. Sometimes, billing occurs subsequent to revenue recognition, resulting in ~~cash. The Company financed this acquisition through borrowing on its credit facility as discussed~~unbilled revenue, which is a contract asset. Also, we sometimes receive advance payments or deposits from our customers before revenue is recognized, resulting in ~~Note 9. Debt.~~ ~~This acquisition~~deferred revenue, which is ~~being accounted for as~~ a ~~business combination under the acquisition method of accounting.~~contract liability.

The wholly-owned subsidiaries of CCS, Saiia LLC (“Saiia”) and American Civil Constructors LLC (the “ACC Companies”), generally enter into long-term contracts with both government and non-government customers to provide EPC services for environmental, heavy civil and mining projects.Contract assets in the Condensed Consolidated Balance Sheets represent the following:

~~William Charles~~costs and estimated earnings in excess of billings, which arise when revenue has been recorded but the amount has not been billed; and

~~On November 2, 2018,~~retainage amounts for the Company acquired William Charles Construction Group, including its wholly-owned subsidiary Ragnar Benson (“William Charles”), for $77.7 million, consisting of $73.2 million in cash and $4.5 million of the Company's common stock (477,621 shares of common stock at $9.45 share price). The Company financed a portion of this acquisition through borrowing on its credit facility as discussed in ~~Note 9. Debt.~~ ~~This acquisition is being accounted for as a business combination under the acquisition method of accounting.~~

~~William Charles generally enters into contracts with a mix of government and non-government customers to provide EPC services for rail civil infrastructure, environmental and heavy civil projects. A~~ portion of the ~~non-governmental rail civil infrastructure contracts are longer than~~contract price billed by us for work performed but held for payment by the customer as a ~~year.~~form of security until we reach certain construction milestones or complete the project.

~~The following table summarizes the amounts recognized for~~Contract assets ~~acquired and liabilities assumed as~~consist of the ~~acquisition dates at fair value. The values for CCS were finalized as of June 30, 2019 and finalized for William Charles as of September 30, 2019.~~

following:

Identifiable assets acquired and liabilities assumed (in thousands) CCS William Charles
Cash $ 6,413
$ 6,641
Accounts Receivable 58,041
69,740
Costs and estimated earnings in excess of billings on uncompleted contracts
9,512
16,095
Other current assets 1,813
7,999
Property, plant and equipment 59,952
47,899
Intangible assets:
  Customer relationships 19,500
7,000
  Backlog 8,400
5,500
  Tradename 8,900
4,500
Deferred income taxes (2,361 ) —
Other non-current assets 134
75
Accounts payable and accrued liabilities (25,219 ) (60,962 )
Billings in excess of costs and estimated earnings on uncompleted contracts (14,194 ) (14,810 )
Debt, less current portion (52,257 ) (15,672 )
Capital lease obligations (1,124 ) —
Other liabilities (704 ) (907 )
Total identifiable assets 76,806
73,098
Goodwill 29,773
4,581
Total purchase consideration $ 106,579
$ 77,679



(in thousands)	March 31, 2020		December 31, 2019
Costs and estimated earnings in excess of billings on uncompleted contracts	$	106,285	$	91,543
Retainage receivable	87,566		87,760
	193,851		179,303

* - There were no measurement period adjustments for the quarter ended September 30, 2019.

~~Goodwill is calculated as the excess~~Contract liabilities consist of the consideration transferred over the net assets recognized and represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Specifically, the goodwill recorded as part of the acquisitions of CCS and William Charles is related to the expected, specific synergies and other benefits that the Company believes will result from combining the operations of CCS and William Charles with the operations of IEA. This goodwill is deductible for income tax purposes, with the exception of $2.9 million for CCS that is not deductible.

~~Impact of Acquisitions~~

The following table summarizes the results of operations included in the Company's condensed consolidated statement of operations for CCS and William Charles from their respective dates of acquisition.following:

(in thousands) Three months ended September 30, 2019 Nine months ended September 30, 2019
CCS William Charles CCS William Charles
Revenue 81,248
84,033
211,117
198,879
Net income (loss) 2,707
7,308
616
7,359

Three months ended September 30, 2018 Nine months ended September 30, 2018
CCS William Charles CCS William Charles
Revenue 5,600
—
5,600
—
Net income (loss) —
—
—
—



(in thousands)	March 31, 2020		December 31, 2019
Billings in excess of costs and estimated earnings on uncompleted contracts	$	107,207	$	115,570
Loss on contracts in progress	46		64
	$	107,253	$	115,634

The following table provides the supplemental unaudited actual and pro forma total revenue and net income of the combined entity had the acquisition date of CCS and William Charles been the first day of our fiscal year 2018:

Three months ended September 30, Nine months ended September 30,
(in thousands) Actual 2019 Pro forma 2018 Actual 2019 Pro forma 2018
Revenue 422,022
446,557
940,793
948,543
Net income (loss) 12,609
6,016
(4,072 ) (15,448 )
Net income (loss) per common share:

Basic earnings per share 0.37
0.25
(1.44 ) (0.77 )
Diluted earnings per share 0.24
0.24
(1.44 ) (0.77 )

The amounts in the supplemental unaudited pro forma 2018 results apply the Company's accounting policies and reflect certain adjustments to, among other things, (i) exclude the impact of transaction costs incurred in connection with the acquisitions, (ii) include additional depreciation and amortization that would have been charged assuming the same fair value adjustments to property, plant and equipment and acquired intangibles had been applied on January 1, 2018, and (iii) include additional interest expense that would have been incurred assuming the incremental borrowings the Company incurred to finance the acquisitions had been outstanding on January 1, 2018. Accordingly, these supplemental unaudited pro forma results have been prepared for comparative purposes only and are not intended to be indicative of the results of operations that would have occurred had the acquisitions actually occurred in the prior year period or indicative of the results of operations for any future period. These results do not include any potential operating efficiencies and cost savings.

~~Note 3. Earnings Per Share~~

~~The Company calculates earnings (loss) per share (“EPS”) in accordance with ASC 260,~~ ~~Earnings per Share. Basic EPS is computed by dividing income (loss) available to common stockholders by the weighted average number of common shares of common stock outstanding during the period.~~

Subsequent to the issuance of the Company's condensed consolidated financial statements for the three and six months ended June 30, 2019, the Company identified a computational error related to the number of outstanding common shares included in its earnings (loss) per share calculations during 2018 and 2019. Management has concluded that the impact of this error on all historical periods is immaterial and therefore has not adjusted the earnings (loss) per share amounts for any periods prior to September 30, 2019. Rather, the adjustment to remove ~~1.8 million~~ unvested shares has been made beginning with the three- and nine-months ended September 30, 2019. The number of outstanding shares of Common Stock for voting purposes remains at 22.3 million shares, as the aforementioned 1.8 million shares are entitled to vote those shares during the vesting period.

~~Income (loss) available to common stockholders is computed by deducting the dividends accumulated for the period on cumulative preferred stock from net income. If there is a net loss, the~~contract receivables amount of the loss is increased by those preferred dividends. The contingent consideration fair value adjustment is a mark-to-market adjustment based on the decline of approximately 80% in the Company's stock price from December 31, 2018 to June 30, 2019, coupled with the Company not anticipating reaching Adjusted EBITDA requirements outlined in the original agreement at September 30, 2019, see ~~Note. 8 Fair Value of Financial Instruments. The Company is required to reverse the mark-to-market adjustment from the numerator as shown below.~~

Diluted EPS assumes the dilutive effect of (i) contingently issuable earn-out shares, (ii) Series A cumulative convertible preferred stock, using the if-converted method, and (iii) the assumed exercise of in-the-money stock options and warrants and the assumed vesting of outstanding restricted stock units (“RSUs”), using the treasury stock method.

Whether the Company has net income or a net loss determines whether potential issuances of common stock are included in the diluted EPS computation or whether they would be anti-dilutive. As a result, if there is a net loss, diluted EPS is computed in the same manner as basic EPS is computed. Similarly, if the Company has net income but its preferred dividend adjustment made in computing income available to common stockholders results in a net loss available to common stockholders, diluted EPS would be computed the same as basic EPS.

~~The calculations of basic and diluted EPS, are as follows ($ in thousands):~~

Three Months Ended Nine Months Ended
September 30, September 30,
2019 2018 2019 2018
Numerator:
  Net income (loss) 12,609
5,736
(4,072 ) (6,741 )
  Less: Convertible Preferred Stock dividends (759 ) (524 ) (2,202 ) (1,072 )
  Less: Contingent consideration fair value adjustment (see Note 8) (4,247 ) —
(23,082 ) —
    Net income (loss) available to common stockholders 7,603
5,212
(29,356 ) (7,813 )

Denominator:
  Weighted average common shares outstanding - basic⁽¹⁾
20,446,811
21,577,650
20,425,801
21,577,650

  Series B Preferred - Warrants 2,845,840
—
—
—
  Convertible Series A Preferred Stock 11,486,534
3,522,438
—
—
  Restricted stock units 640,247
—
—
—
  Weighted average shares for diluted computation 35,419,432
25,100,088
20,425,801
21,577,650

Anti-dilutive: ⁽²⁾⁽³⁾

  Convertible Series A Preferred —
—
8,968,856
2,832,765
  Series B Preferred - Warrants at closing —
—
1,325,779
—
  RSUs —
—
542,421
—

Basic EPS 0.37
0.24
(1.44 ) (0.36 )
Diluted EPS 0.24
0.23
(1.44 ) (0.36 )


~~(1)~~	~~The contingent earn-out shares were not included at September 30, 2019 and were removed from September 30, 2018, respectively. See~~ ~~Note 8. Fair Value of Financial Instruments~~ ~~for discussion regarding the Company's contingently issuable earn-out shares.~~

~~(2)~~

Warrants to purchase 8,480,000 shares of common stock at $11.50 per share were outstanding at September 30, 2019 and 2018 but were not potentially dilutive as the warrants’ exercise price was greater than the average market price of the common stock during the period. 646,405 of vested and unvested Options and 817,817 of unvested RSUs were also not potentially dilutive as of ~~September 30, 2019 as the respective exercise price or average stock price required for vesting of such awards was greater than the average market price of the common stock during the period.~~


~~(3)~~	~~The 1.8 million unvested earnout shares were not included at September 30, 2019 due to the exercise price being greater than the average market price of the common stock during the period.~~

~~Series A Preferred Stock~~

As of September 30, 2019, we had 34,965 shares of Series A Preferred Stock with an initial stated value of $1,000 per share plus accumulated but unpaid dividends, for total consideration of $37.7 million. Dividends are paid on the Series A Preferred Stock when declared by our Board. To extent permitted, dividends are required to be paid in cash quarterly in arrears on each March 31, ~~June 30, September 30~~2020 and December 31, ~~on the stated value at the following rates:~~

•6% per annum from the original issuance of the Series A Preferred Stock on March 26, 2018 (the “Closing Date”) until the date (the “18 Month Anniversary Date”) that is 18 months from the Closing Date; and

•~~10% per annum during the period from and after the 18 Month Anniversary Date;~~

So long as any shares of Series B Preferred Stock of the Company, (the “Series B Preferred Stock”), which are currently either designated as Series B-1 Preferred Stock (“Series B-1 Preferred Stock”) or Series B-2 Preferred Stock (“Series B-2 Preferred

Stock”), and (referred to collectively as “Series B Preferred Stock”), are outstanding or from and after the occurrence of any non-payment event or default event and until cured or waived, the foregoing rates will increase by 2% per annum.

•~~8% per annum during the period from May 20,~~ 2019 ~~through the 18 Month Anniversary Date; and~~

•~~12% per annum during the period from and after the 18 Month Anniversary Date.~~

~~As of September 30, 2019, the Company has accrued a cumulative of $2.7 million in dividends to holders of Series A Preferred Stock as a reduction to additional paid-in capital.~~

~~Series B Preferred Stock~~

As of September 30, 2019, we had 100,000 shares of Series B Preferred Stock outstanding, with each share having an initial stated value of $1,000 plus accumulated but unpaid dividends. Our common stock and Series A Preferred Stock are junior to the Series B Preferred Stock. Dividends are paid on the Series B Preferred Stock when declared by our Board. To the extent not prohibited by applicable law, dividends are required to be declared and paid in cash quarterly in arrears on each March 31, June 30, September 30 and December 31 at the following rates:

~~On Series B-1 Preferred Stock with respect to any dividend period for which the Total Net Leverage Ratio (as defined in the Third A&R Credit Agreement (as defined in see~~ ~~Note. 9 Debt~~) is greater than 1.50:1.00, 15% per annum (or 13.5% per annum if a deleveraging event (as defined below) has occurred prior to the date dividends are paid with respect to such dividend period) and (ii) with respect to any dividend period for which the Total Net Leverage Ratio is less than or equal to 1.50:1.00, 13.5% per annum.

On Series B-2 Preferred Stock with respect to any dividend period for which the Total Net Leverage Ratio is greater than 1.50:1.00, 15% per annum (or 13.5% per annum if a deleveraging event has occurred prior to the date dividends are paid with respect to such dividend period) and (ii) with respect to any dividend period for which the Total Net Leverage Ratio is less than or equal to1.50:1.00, 12% per annum.

If not paid in cash, dividends will accrue on the stated value and will increase the stated value on Series B Preferred Stock and is effective as of the applicable dividend date without any further action by the Board at a rate of 18% per annum; provided that, during the period from the occurrence of a deleveraging event until the date that is two years from such deleveraging event, such dividend rate shall instead be 15% per annum. A deleveraging event means certain equity financings or issuances of stock where the proceeds of such equity financings are used exclusively to permanently reduce senior secured indebtedness by at least $50.0 million, or the Total Net Leverage Ratio as of the last day of any fiscal quarter is less than or equal to 1.50:1.00.

The Company has accrued a cumulative of $4.1 million in accrued dividends to holders of Series B Preferred Stock, which is recorded as interest expense in the Company's condensed consolidated statements of operations for the quarter ended September 30, 2019. See ~~Note 8. Fair Value of Financial Instruments~~ ~~for discussion regarding the Company's valuation of Series B Preferred Stock.~~

~~Stock Compensation~~

Under guidance of ASC Topic 718 “Compensation — Stock Compensation,” stock-based compensation expense is measured at the date of grant, based on the calculated fair value of the stock-based award, and is recognized as expense over the employee’s requisite service period (generally the vesting period of the award).

The fair value of the RSUs was based on the closing market price of our common stock on the date of the grant. Stock compensation expense for the RSUs is being amortized using the straight-line method over the service period. For the three months ended September 30, 2019 and 2018, we recognized $1.1 million and $0.5 million in compensation expense, respectively, and $2.8 million and $0.5 million for the nine months ended September 30, 2019 and 2018, respectively.

~~Note 4. Accounts Receivable, Net~~

~~The following table provides details of accounts receivable, net of allowance as of the dates indicated (in thousands):~~

September 30, 2019 December 31, 2018
Contract receivables $ 168,413
$ 161,408
Contract retainage 76,103
64,000
Accounts receivable, gross 244,516
225,408
Less: allowance for doubtful accounts (51 ) (42 )
Accounts receivable, net $ 244,465
$ 225,366

~~Included in costs in excess of billings as of September 30, 2019 are~~includes unapproved change orders of approximately ~~$21.0~~$9.2 million for which the Company is pursuing settlement through dispute resolution.

Revenue recognized for the three months ended March 31, 2020 and 2019 that was included in the contract liability balance at the beginning of each year was approximately $90.9 million and $31.9 million, respectively.

Activity in the allowance for doubtful accounts for the periods indicated is as ~~follows (in thousands):~~follows:


	Three Months Ended					Nine Months Ended					Three Months Ended
	September 30,					September 30,					March 31,
	2019			2018		2019			2018
(in thousands)											2020		2019
Allowance for doubtful accounts at beginning of period	$	102		$	216	$	42		$	216	$	75	$	42
Plus: provision for allowances	30			—		90			—
Plus: provision for (reduction in) allowance											14		30
Less: write-offs, net of recoveries	(81		)	—		(81		)	—		—		—
Allowance for doubtful accounts at period end	$	51		$	216	$	51		$	216	$	89	$	72

Note ~~5. Contracts in Progress~~3. Property, Plant and Equipment, Net

~~Contracts in progress were as follows~~asProperty, plant and equipment consisted of the ~~dates indicated(in thousands):~~following:

September 30, 2019 December 31, 2018
Costs on contracts in progress $ 1,189,496
$ 935,820
Estimated earnings on contracts in progress 111,451
76,883
Revenue on contracts in progress 1,300,947
1,012,703
Less: billings on contracts in progress (1,263,221 ) (1,027,816 )
Net underbillings (overbillings) $ 37,726
$ (15,113 )



(in thousands)	March 31, 2020			December 31, 2019
Buildings and leasehold improvements	$	3,051		$	2,919
Land	17,600			17,600
Construction equipment	175,707			173,434
Office equipment, furniture and fixtures	3,537			3,487
Vehicles	5,375			6,087
	205,270			203,527
Accumulated depreciation	(70,517		)	(63,039		)
Property, plant and equipment, net	$	134,753		$	140,488

~~The above amounts have been included in~~Depreciation expense of property, plant and equipment was $8,516 and $8,476 for the ~~accompanying condensed consolidated balance sheets under the following captions (in thousands):~~

September 30, 2019 December 31, 2018
Costs and estimated earnings in excess of billings on uncompleted contracts $ 109,540
$ 47,121
Billings in excess of costs and earnings on uncompleted contracts (71,814 ) (62,234 )
Net underbillings (overbillings) $ 37,726
$ (15,113 )

~~Provision for loss of $0.1 million~~three months ended March 31, 2020 and ~~$1.4 million as of September 30,~~ 2019, ~~and December 31, 2018, respectively, is included in billings in excess of costs and earnings on uncompleted contracts.~~respectively.

The Company recognizes a contract asset within costs and estimated earnings in excess of billings on uncompleted contracts in the condensed consolidated balance sheet for revenue earned related to unapproved change orders that are probable of recovery. For the quarter ended September 30, 2019 and the year ended December 31, 2018, the Company had unapproved change orders of $69.9 million and $45.0 million, respectively.

Note ~~6. Property, Plant and Equipment, Net~~

~~Property, plant and equipment, net consisted of the following (in thousands):~~

September 30, 2019 December 31, 2018
Buildings and leasehold improvements $ 2,812
$ 4,614
Land 17,600
19,394
Construction equipment 178,239
175,298
Office equipment, furniture and fixtures 3,449
2,994
Vehicles 5,985
4,991
208,085
207,291
Accumulated depreciation (56,301 ) (31,113 )
Property, plant and equipment, net $ 151,784
$ 176,178

Depreciation expense of property, plant and equipment was $9,219 and $2,471 for the period ended September 30, 2019 and 2018, respectively, and was $26,125 and $6,388 for the nine months ended September 30, 2019 and 2018, respectively.

~~Note 7.~~4. Goodwill and Intangible Assets, Net

The following table provides the changes in the carrying amount of ~~goodwill for 2019 and 2018:~~goodwill:

(in thousands) Goodwill
January 1, 2018 (Renewables Segment) $ 3,020
Acquisitions (Specialty Civil Segment) 37,237
December 31, 2018 $ 40,257
Acquisition adjustments (Specialty Civil Segment) (2,884 )
September 30, 2019 $ 37,373



(in thousands)	Renewables		Specialty Civil			Total
January 1, 2019	$	3,020	$	37,237		$	40,257
Acquisition adjustments	—		(2,884		)	(2,884		)
December 31, 2019	$	3,020	$	34,353		$	37,373
Adjustments	—		—			—
March 31, 2020	$	3,020	$	34,353		$	37,373

Intangible assets ~~net~~ consisted of the following as of the dates indicated:


	September 30, 2019								December 31, 2018								March 31, 2020								December 31, 2019
($ in thousands)	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Weighted Average Remaining Life	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Weighted Average Remaining Life	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Weighted Average Remaining Life	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Weighted Average Remaining Life
Customer relationships	$	26,500	$	(3,749	)	$	22,751	6 years	$	27,000	$	(814	)	$	26,186	7 years	$	26,500	$	(5,642	)	$	20,858	5.75 years	$	26,500	$	(4,695	)	$	21,805	6 years
Trade name	13,400		(2,635		)	10,765		4 years	13,400		(575		)	12,825		5 years	13,400		(3,990		)	9,410		3.75 years	13,400		(3,305		)	10,095		4 years
Backlog	13,900		(6,791		)	7,109		1 year	13,400		(1,537		)	11,863		2 years	13,900		(10,266		)	3,634		9 months	13,900		(8,528		)	5,372		1 year
	$	53,800	$	(13,175	)	$	40,625		$	53,800	$	(2,926	)	$	50,874		$	53,800	$	(19,898	)	$	33,902		$	53,800	$	(16,528	)	$	37,272

Amortization expense associated with intangible assets for the three months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018,~~ totaled $3.4 million and ~~$0.1~~$3.5 million, ~~respectively, and $10.3 million and $0.2 million for the nine months ended September 30, 2019 and 2018,~~ respectively.

The following table provides the annual intangible amortization expense currently expected to be recognized for the years ~~2019~~2020 through ~~2023:~~2024:


(in thousands)	Remainder of 2019		2020		2021		2022		2023		Remainder of 2020		2021		2022		2023		2024
Amortization expense	$	3,354	$	11,837	$	6,466	$	6,466	$	5,841	$	11,837	$	6,466	$	6,466	$	5,841	$	3,785

Note 5. Fair Value of Financial Instruments

The Company applies ASC 820, Fair Value Measurement, which establishes a framework for measuring fair value. ASC 820 defines fair value as an exit price, which is the price that would be received for an asset or paid to transfer a liability in the Company’s principal or most advantageous market in an orderly transaction between market participants on the measurement date. The fair value hierarchy established in ASC 820 generally requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs reflect the assumptions that market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the entity’s own assumptions based on market data and the entity’s judgments about the assumptions that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances.

The valuation hierarchy is composed of three levels. The classification within the valuation hierarchy is based on the lowest level of input that is significant to the fair value measurement. The levels within the valuation hierarchy are described below:

Level 1 — Assets and liabilities with unadjusted, quoted prices listed on active market exchanges. Inputs to the fair value measurement are observable inputs, such as quoted prices in active markets for identical assets or liabilities.

Level 2 — Inputs to the fair value measurement are determined using prices for recently traded assets and liabilities with similar underlying terms, as well as direct or indirect observable inputs, such as interest rates and yield curves that are observable at commonly quoted intervals.

Level 3 — Inputs to the fair value measurement are unobservable inputs, such as estimates, assumptions, and valuation techniques when little or no market data exists for the assets or liabilities.

The following table sets forth information regarding the Company's assets measured at fair value on a recurring basis:



	March 31, 2020								December 31, 2019
(in thousands)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Liabilities
Series B Preferred Stock - Series A Conversion Warrants and Exchange Warrants	$	—	$	—	$	1,800	$	1,800	$	—	$	—	$	4,317	$	4,317
Series B-1 Preferred Stock - Additional 6% Warrants	—		—		400		400		—		—		400		400
Series B-3 Preferred - Closing Warrants	—		—		—		—		—		—		11,491		11,491
Rights Offering	—		—		—		—		—		—		1,383		1,383
Total liabilities	$	—	$	—	$	2,200	$	2,200	$	—	$	—	$	17,591	$	17,591

The following is a reconciliation of the beginning and ending balances of recurring fair value measurements using Level 3 inputs:



(in thousands)	Series B Preferred - Series A Conversion Warrants and Exchange Warrants			Series B-1 Preferred Stock - Additional 6% Warrants		Series B-3 Preferred - Closing Warrants			Rights Offering
Beginning Balance, December 31, 2019	$	4,317		$	400	$	11,491		$	1,383
Fair value adjustment - (gain) loss recognized in other income	(91		)	—		1,677			(1,383		)
Transfer to non-recurring fair value instrument (equity)	(2,426		)	—		(13,168		)	—
Ending Balance, March 31, 2020	$	1,800		$	400	$	—		$	—

The Company entered into three Equity Commitment agreements at various dates during 2019 with Ares Management, LLC, on behalf of its affiliated funds, investment vehicles and/or managed accounts (“Ares”) and funds managed by Oaktree Capital Management (“Oaktree”). These resulted in Series B-1 Preferred Stock (the “Series B-1 Preferred Stock”), Series B-2 Preferred Stock (the “Series B-2 Preferred Stock”) and Series B-3 Preferred Stock (the “Series B-3 Preferred Stock”) (collectively referred to as “Series B Preferred Stock”).

The information below describes the balance sheet classification and the recurring/nonrecurring fair value measurement:

Series B Preferred Stock (non-recurring) - The Series B Preferred Stock was a mandatorily redeemable financial instrument under ASC 480 and was recorded at relative fair value as debt which was estimated using a discounted cashflow model based on certain significant unobservable inputs, such as accumulated dividend rates, and projected Adjusted EBITDA for the life of the Series B Preferred Stock. The fair value of the liability for each of the transactions, was a combined $153.7 million and recorded on the balance sheet as debt as of March 31, 2020.

Series B Preferred Stock - Warrantsat closing(non-recurring) - The Warrants at closing, with an exercise price of $0.0001, represented (on an if-converted to common stock basis) 10% of the issued and outstanding common stock of the Company based on the Company’s fully diluted share count on May 20, 2019 (including the number of shares of common stock that may be issued pursuant to all restricted stock awards, restricted stock units, stock options and any other securities or rights (directly or indirectly) convertible into, exchangeable for or to subscribe for common stock that are outstanding on May 20,

2019 (excluding any shares of common stock issuable (a) pursuant to the merger agreement for our business combination, (b) upon conversion of shares of Series A Preferred Stock, (c) upon the exercise of any warrant with an exercise price of $11.50 or higher or (d) upon the exercise of any equity issued pursuant to the Company’s long term incentive plan or other equity plan with a strike price of $11.50 or higher). The 2,545,934 warrants at closing were valued at the closing stock price of $4.21 on May 20, 2019 which was recorded as additional paid in capital.

On August 30, 2019, warrants for 900,000 shares of common stock were issued and were valued at the closing stock price of $3.75 which was recorded as additional paid in capital.

On November 14, 2019, warrants for 3,568,750 shares of common stock were issued and were valued at the closing stock price of $2.20 and these were recorded as a liability (Series B-3 Preferred - Closing Warrants) and marked to market at December 31, 2019 at a price of $3.22. On January 21, 2020 the Company received shareholder approval for the warrants and the liability was marked to market at a price of $3.69. Upon shareholder approval, the warrants were moved from liability to equity at a fair value of $13,168 on a non-recurring basis.

Series B-3 Exchange Warrants (non-recurring) - On October 29, 2019, the holders of Series A Preferred Stock converted 50% of their shares to Series B Preferred Stock and reduced the number of the potential additional warrants. In the exchange the holders of Series A Preferred Stock were issued warrants for 657,383 shares of common stock at the closing stock price of $2.20 and these were recorded as a liability and marked to market at December 31, 2019 at a price of $3.22. On January 21, 2020 the Company received shareholder approval for the warrants and the liability was marked to market at a price of $3.69. As of March 31, 2020, these warrants reside as part of equity at a fair value of $2,426 on a non-recurring basis.

Series B-1 Preferred Stock - Series A ConversionWarrants(recurring) - On May 20, 2019, the conversion rights for the Series A Preferred Stock were amended to allow the holders of Series A Preferred Stock to convert all or any portion of Series A Preferred Stock outstanding at any point in time. If converted, the holders of the Series B Preferred Stock would be entitled to additional warrants, with an exercise price of $0.0001. These warrants were fair valued using the closing stock price of $4.21 on May 20, 2019, at an estimated if-converted share count and recorded as a liability.

Series B-1 Preferred Stock - Additional 6% Warrants (recurring) - The Additional 6% Warrants are issuable if the Company fails to meet certain Adjusted EBITDA thresholds on a trailing twelve-month basis from May 31, 2020 through April 30, 2021. The Company recorded the Additional 6% Warrants at fair value, which was estimated using a Monte Carlo Simulation based on certain significant unobservable inputs, such as a risk rate premium, Adjusted EBITDA volatility, stock price volatility and projected Adjusted EBITDA for the Company for 2019. The Additional 6% Warrants were recorded as a liability.

Rights offering - The Company conducted a rights offering and each shareholder as of the record date was issued a right to purchase Series B Preferred Stock and warrants. The right that was issued was fair valued using a Black-Scholes model based on certain significant unobservable inputs, such as a risk rate premium, stock price volatility, dividend yield and expected term of rights offering. The rights offering fair value was recorded as a liability and was a deemed dividend to common stockholders and reflected as a reduction in additional paid in capital. On March 4, 2020 we completed the rights offering, removed the liability associated with the fair value (rights offering - recurring) and issued and sold 350 shares of Series B-3 Preferred Stock (Series B-3 Preferred Stock - non-recurring at a fair value of $313,000) and 12,029 warrants (non-recurring Series B Preferred Stock - Warrants at closing - non-recurring at a fair value of $37,000) to purchase common stock.

2020 Commitment - The Company is obligated to sell to, Ares and Oaktree, and they are obligated to purchase, additional shares of Series B Preferred Stock up to approximately $15.0 million based on a failure by the Company to achieve specified debt and liquidity levels. See Note 12. Subsequent Events for further discussion of the transaction.

Other financial instruments of the Company not listed in the table consist of cash and cash equivalents, accounts receivable, accounts payable and other current liabilities that approximate their fair values. Additionally, management believes that the outstanding recorded balance on the line of credit and long-term debt, approximates fair value due to their floating interest rates.

Note 6. Debt

Debt consists of the following obligations as of:



(in thousands)	March 31, 2020		December 31, 2019

Term loan	173,345		182,687
Commercial equipment notes	3,946		4,456
Total principal due for long-term debt	177,291		187,143
Unamortized debt discount and issuance costs	(20,810	)	(22,296	)
Less: Current portion of long-term debt	(1,693	)	(1,946	)
Long-term debt, less current portion	154,788		162,901

Debt - Series B Preferred Stock	188,755		180,444
Unamortized debt discount and issuance costs	(13,610	)	(14,303	)
Long-term Series B Preferred Stock	175,145		166,141

The weighted average interest rate for the term loan as of March 31, 2020 and December 31, 2019, was 9.70% and 10.35%, respectively.

Debt Covenants

The term loan is governed by the terms of the Third A&R Credit Agreement, which include customary affirmative and negative covenants and provide for customary events of default, which include, nonpayment of principal or interest and failure to timely deliver financial statements. Under the Third A&R Credit Agreement, the financial covenant provides that the First Lien Net Leverage Ratio (as defined therein) may not exceed (i) prior to the fiscal quarter ending December 31, 2019, 4.75:1.0, (ii) for the four fiscal quarters ending December 31, 2020, 3.50:1.0, (iii) for the four fiscal quarters ending December 31, 2021, 2.75:1.0, and (iv) for all subsequent quarters, 2.25:1.0. Under the Third A&R Credit Agreement, the Company could not use an equity infusion to cure any covenant violations for fiscal quarter ending in 2019, excluding the Series B Preferred Stock. Thereafter, the Company has access to a customary equity cure.

The Third A&R Credit Agreement also includes certain limitations on the payment of cash dividends on the Company's common shares and provides for other restrictions on (subject to certain exceptions) liens, indebtedness (including guarantees and other contingent obligations), investments (including loans, advances and acquisitions), mergers and other fundamental changes and sales and other dispositions of property or assets, among others.

Letters of Credit and Surety Bonds

In the ordinary course of business, the Company is required to post letters of credit and surety bonds to customers in support of performance under certain contracts. Such letters of credit are generally issued by a bank or similar financial institution. The letter of credit or surety bond commits the issuer to pay specified amounts to the holder of the letter of credit or surety bond under certain conditions. If the letter of credit or surety bond issuer were required to pay any amount to a holder, the Company would be required to reimburse the issuer, which, depending upon the circumstances, could result in a charge to earnings. As of March 31, 2020, and December 31, 2019, the Company was contingently liable under letters of credit issued under its Third A&R Credit Agreement, in the amount of $23.7 million and $21.0 million, respectively, related to projects. In addition, as of March 31, 2020 and December 31, 2019, the Company had outstanding surety bonds on projects of $2.5 billion and $2.4 billion, respectively.

Contractual Maturities

Contractual maturities of the Company's outstanding principal on debt obligations as of March 31, 2020:



(in thousands)	Maturities
Remainder of 2020	$	1,365
2021	1,228
2022	15,859
2023	29,735
2024	129,104
Thereafter	—
Total contractual obligations	$	177,291

Note ~~8. Fair Value of Financial Instruments~~

~~The Company applies ASC 820, Fair Value Measurement, which establishes a framework for measuring fair value~~7. Commitments and clarifies the definition of fair value within that framework. ASC 820 defines fair value as an exit price, which is the price that would be received for an asset or paid to transfer a liability in the Company’s principal or most advantageous market in an orderly transaction between market participants on the measurement date. The fair value hierarchy established in ASC 820 generally requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs reflect the assumptions that market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the entity’s own assumptions based on market data and the entity’s judgments about the assumptions that market participants would use in pricing the asset or liability, and are to be developed based on the best information available in the circumstances.

~~Level 3 — Inputs to the fair value measurement are unobservable inputs, such as estimates, assumptions, and valuation techniques when little or no market data exists for the assets or liabilities.~~

~~The following table sets forth information regarding the Company's assets measured at fair value on a recurring basis (in thousands):~~

Fair Value Measurements at Reporting Date
Amount recorded on balance sheet Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3)
Liabilities as of September 30, 2019
   Contingent consideration —
—
—
—
   Series B-1 Preferred Stock - Series A Conversion Warrants 4,200
—
—
4,200
   Series B-1 Preferred Stock - Additional 6% Warrants 400
—
—
400

~~The following is a reconciliation of the beginning and ending balances for the periods indicated of recurring fair value measurements using Level 3 inputs (in thousands):~~

Contingent Consideration Series B Preferred - Series A Conversion Warrants Series B Preferred - Additional 6% Warrants
Beginning Balance, December 31, 2018 23,082
$ —
$ —
Preferred Series B-1 Stock - Additional Warrants —
4,200
400
Fair value adjustment (23,082 ) —
—
Ending Balance, September 30, 2019 —
4,200
400

~~Contingent Consideration~~

Pursuant to the original merger agreement with M III Acquisition Corp., the Company shall issue up to an additional 9,000,000 shares of common stock, which shall be fully earned if the final 2019 adjusted EBITDA targets are achieved. As of September 30, 2019, the Company recorded an adjustment of $23.1 million to the liability primarily based on a significant decrease in the Company's stock price for the first six months of 2019 of approximately 80.0% (from $8.61 at December 31, 2018 to $2.04 at June 30, 2019), coupled with the Company not anticipating reaching EBITDA requirements outlined in the original agreement as of September 30, 2019.

~~The following table sets forth information regarding the Company's assets measured at fair value on a non-recurring basis (in thousands):~~

Fair Value Measurements
Amount recorded on balance sheet Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3)
Liabilities:
Series B-1 and Series B-2 Preferred Stock 81,300
—
—
81,300

Equity:
Series B-1 Preferred Stock - Warrants at closing 14,100
—
—
14,100

On May 20, 2019, the Company entered into the Amended and Restated Equity Commitment Agreement (the “First Equity Commitment Agreement”), by and among the Company and the commitment parties thereto. Pursuant to the First Equity Commitment Agreement, the Company issued and sold on May 20, 2019, 50,000 shares of Series B-1 Preferred Stock, with each share having an initial stated value of $1,000 plus accumulated but unpaid dividends for gross cash proceeds of $50.0 million. The First Equity Commitment Agreement also required the Company to provide warrants for common stock at closing that equaled 10% of the fully diluted issued and outstanding common stock as of such date (the “Warrants at closing”), and in the future could be required to provide additional warrants in the event of conversion of the Series A Preferred Stock (“Series A

Conversion Warrants”) and warrants for up to 6% of the fully diluted issued and outstanding common stock if the Company fails to meet certain Adjusted EBITDA thresholds on a trailing twelve-month basis on the last calendar day of May 2020 through April 2021 (the “Additional 6% Warrants”).

On August 13, 2019, the Company entered into the Second Equity Commitment Agreement (the “Second Equity Commitment Agreement”). Pursuant to the Second Equity Commitment Agreement, the Company issued and sold on August 30, 2019, 50,000 shares of Series B-2 Preferred Stock and 900,000 warrants to purchase common stock (“Warrants”) for an aggregate purchase price of $50.0 million.

~~The information below describes the balance sheet classification and the recurring/nonrecurring fair value measurement:~~

~~Series B-1 and Series B-2 Preferred Stock (non-recurring)~~ - The Series B-1 and Series B-2 Preferred Stock were recorded at relative fair value as debt which was estimated using a discounted cashflow model based on certain significant unobservable inputs, such as accumulated dividend rates, and projected Adjusted EBITDA for the life of the Series B Preferred Stock. The fair value of the liability for each of the transactions closed on May 20, 2019 and August 30, 2019, was a combined $81.3 million and recorded on the balance sheet as debt.

~~Series B-1 and Series B-2 Preferred Stock - Warrantsat closing(non-recurring)~~ - The Warrants at closing, with an exercise price of $0.0001, represented (on an if-converted to common stock basis) 10% of the issued and outstanding common stock of the Company based on the Company’s fully diluted share count on May 20, 2019 (including the number of shares of common stock that may be issued pursuant to all restricted stock awards, restricted stock units, stock options and any other securities or rights (directly or indirectly) convertible into, exchangeable for or to subscribe for common stock that are outstanding on May 20, 2019 (excluding any shares of common stock issuable (a) pursuant to the merger agreement for our business combination, (b) upon conversion of shares of Series A Preferred Stock, (c) upon the exercise of any warrant with an exercise price of $11.50 or higher or (d) upon the exercise of any equity issued pursuant to the Company’s long term incentive plan or other equity plan with a strike price of $11.50 or higher). The 2,545,934 if-converted shares of common stock at closing were valued at the closing stock price of $4.21 on May 20, 2019 and recorded in additional paid in capital.

~~On August 30, 2019, 900,000 if-converted shares of common stock were issued and were valued at the closing stock price of $3.75 and recorded in additional paid in capital.~~

~~Series B-1 Preferred Stock - Series A ConversionWarrants(recurring)~~ - The certificate of designation for the Series A Preferred Stock was amended in connection with the Company entering into the First Equity Commitment Agreement. The conversion rights were amended to allow the holders of Series A Preferred Stock to convert all or any portion of Series A Preferred Stock outstanding at any point in time. If converted, the holders of the Series B Preferred Stock would be entitled to additional warrants, with an exercise price of $0.0001. These warrants were fair valued using the closing stock price of $4.21 on May 20, 2019, at an estimated if-converted share count and recorded as a liability.

~~Series B-1 Preferred Stock - Additional 6% Warrants (recurring)~~ - The Additional 6% Warrants are issuable if the Company fails to meet certain Adjusted EBITDA thresholds on a trailing twelve-month basis from May 31, 2020 through April 30, 2021. The Company recorded the Additional 6% Warrants at fair value, which was estimated using a Monte Carlo Simulation based on certain significant unobservable inputs, such as a risk rate premium, Adjusted EBITDA volatility, stock price volatility and projected Adjusted EBITDA for the Company for 2019. The Additional 6% Warrants were recorded as a liability.

Other financial instruments of the Company not listed in the table consist of cash and cash equivalents, accounts receivable, accounts payable and other current liabilities that approximate their fair values. Additionally, management believes that the outstanding recorded balance on the line of credit and long-term debt, further discussed in ~~Note 9. Debt, approximates fair value due to their floating interest rates.~~

~~Note 9. Debt~~

~~Debt consists of the following obligations as of:~~

September 30, 2019 December 31, 2018

Term loan 277,688
300,000
Line of credit —
46,500
Commercial equipment notes 3,820
5,341
   Total principal due for long-term debt 281,508
351,841
Unamortized debt discount and issuance costs (23,783 ) (23,534 )
Less: Current portion of long-term debt (31,119 ) (32,580 )
   Long-term debt, less current portion 226,606
295,727

Debt - Series B Preferred Stock ⁽¹⁾
104,135
—
Unamortized debt discount and issuance costs (27,369 ) —
  Long-term Series B Preferred Stock 76,766
—

⁽¹⁾The Company has accrued a cumulative of $4.1 million in accrued dividends to holders of Series B Preferred Stock, which is recorded as interest expense in the Company's condensed consolidated statements of operations for the quarter ended September 30, 2019.

~~Third Amended and Restated Credit Agreement~~

~~On May 20, 2019, the Third Amended and Restated Credit and Guarantee Agreement (the “Third A&R Credit Agreement”) became effective.~~

Term loan borrowings mature on September 25, 2024 and are subject to quarterly amortization of principal, commencing on March 31, 2019, in an amount equal to 2.50% of the aggregate principal amount of such loans. Beginning with 2020, an additional annual payment is required equal to 75% of Excess Cash Flow (as defined in the Third A&R Credit Agreement) for the preceding fiscal year if such Excess Cash Flow is greater than $2.5 million, with the percentage of Excess Cash Flow subject to reduction based upon the Company’s consolidated leverage ratio.

Borrowings under the term loan are required to be repaid on the last business day of each March, June, September and December, continuing with the first fiscal quarter following the effective date of the Third A&R Credit Agreement, in an amount equal to 2.5% of the initial balance of the initial term loan and will not be able to be reborrowed. Borrowings under the revolving line of credit mature on September 25, 2023.

~~Interest on the consenting lender term loan tranche accrues at a~~ ~~per annum~~ rate of, at the Company's option, (x) LIBOR plus a margin of 8.25% or (y) an alternate base rate plus a margin of 7.25%; provided, however, that upon achieving a First Lien Net Leverage Ratio (as defined below) of no greater than 2.67:1.00, the margin shall permanently step down to (y) for LIBOR loans, 6.75% and (x) for alternative base rate loans, 5.75%. Interest on the non-consenting lender term loan tranche will stay at a ~~per annum~~ rate of, at the Company’s option, (x) LIBOR plus a margin of 6.25% or (y) an alternate base rate plus a margin of 5.25%. Interest on initial revolving facility borrowings and swing line loans accrues at a rate of, at the Company's option, (x) LIBOR plus a margin of 4.25% or (y) the applicable base rate plus a margin of 3.25%. The weighted average interest rate under the Third A&R Credit Agreement as of September 30, 2019 and December 31, 2018, was 10.42% and 8.82%, respectively.

The terms of the Third A&R Credit Agreement include customary affirmative and negative covenants and provide for customary events of default, which include, among others, nonpayment of principal or interest and failure to timely deliver financial statements. Under the Third A&R Credit Agreement, the financial covenant to which the Credit Parties as defined therein are subject provides that the First Lien Net Leverage Ratio (as defined therein) may not exceed (i) prior to the fiscal quarter ending December 31, 2019, 4.75:1.0, (ii) from and prior to the fiscal quarter ending December 31, 2020, 3.50:1.0, (iii) from and prior to the fiscal quarter ending December 31, 2021, 2.75:1.0, and (iv) from and after March 31, 2022, 2.25:1.0. Under the Third A&R Credit Agreement, the Company is not to obtain an equity infusion to cure for any covenant violations for fiscal quarter ending in 2019, excluding the Series B Preferred Stock. Thereafter, the Company will have access to a customary equity cure.

~~Letters of Credit and Surety Bonds~~Contingencies

In the ordinary course of business, the Company enters into agreements that provide financing for its machinery and equipment, facility and vehicle needs. The Company reviews these agreements for potential lease classification, and at inception, determines whether a lease is ~~required~~an operating or finance lease. Lease assets and liabilities, which generally represent the present value of future minimum lease payments over the term of the lease, are recognized as of the commencement date. Under Topic 842, leases with an initial lease term of twelve months or less are classified as short-term leases and are not recognized in the condensed consolidated balance sheets unless the lease contains a purchase option that is reasonably certain to ~~post letters~~be exercised.

Lease term, discount rate, variable lease costs and future minimum lease payment determinations require the use of ~~credit~~judgment as these are based on the facts and ~~surety bonds~~circumstances related to ~~customers in support of performance under certain contracts. Such letters of credit~~each specific lease. Lease terms are generally ~~issued by~~based on their initial non-cancelable terms, unless there is a ~~bank or similar financial institution.~~renewal option that is reasonably certain to be exercised. Various factors, including economic incentives, intent, past history and business need are considered to determine if a renewal option is reasonably certain to be exercised. The ~~letter of credit or surety bond commits~~implicit rate in a lease agreement is used when it can be determined. Otherwise, the ~~issuer to pay specified amounts to the holder~~Company's incremental borrowing rate, which is based on information available as of the ~~letter of credit or surety bond under certain conditions. If~~lease commencement date, including applicable lease terms and the ~~letter of credit or surety bond issuer were required~~current economic environment, is used to ~~pay any amount to a holder,~~determine the Company would be required to reimburse the issuer, which, depending upon the circumstances, could result in a charge to earnings. As of September 30, 2019, and December 31, 2018, the Company was contingently liable under letters of credit issued under its Third A&R Credit Agreement or its old credit facility, respectively, in the amount of $21.0 million and $3.0 million, respectively, related to projects. In addition, as of September 30, 2019 and December 31, 2018, the Company had outstanding surety bonds on projects of $2,017.6 million and $1,682.0 million, respectively.

~~Contractual Maturities~~

~~Contractual maturities~~value of the ~~Company's debt and capital~~ lease ~~(see~~ ~~Note 10. Commitments and Contingencies)~~ ~~obligations as of September 30, 2019 (in thousands):~~

Remainder of 2019 $ 13,965
2020 55,988
2021 51,826
2022 47,276
2023 32,905
Thereafter 257,591
Total contractual obligations $ 459,551

~~Note 10. Commitments and Contingencies~~

obligation.

~~Capital~~Finance Leases

The Company has obligations, exclusive of associated interest, under various ~~capital~~finance leases for equipment totaling ~~$73.9~~$61.3 million and ~~$63.5~~$64.2 million at ~~September 30, 2019~~March 31, 2020 and December 31, ~~2018,~~2019, respectively. Gross property under this capitalized lease agreement at ~~September 30, 2019~~March 31, 2020 and December 31, ~~2018,~~2019, totaled ~~$119.6~~$117.9 million and ~~$76.9~~$116.1 million, less accumulated depreciation of ~~$29.3~~$39.4 million and ~~$10.1~~$34.0 million, respectively, for net balances of ~~$90.3~~$78.5 million and ~~$66.8~~$82.1 million, respectively. Depreciation of assets held under the ~~capital~~finance leases isare included in ~~the~~ cost of revenue in the condensed consolidated statements of operations.

The future minimum payments of finance lease obligations are as follows:



(in thousands)
Remainder of 2020	$	20,035
2021	22,344
2022	18,302
2023	4,108
2024	628
Thereafter	157
Future minimum lease payments	65,574
Less: Amount representing interest	4,311
Present value of minimum lease payments	61,263
Less: Current portion of finance lease obligations	23,437
Finance lease obligations, less current portion	$	37,826

Operating Leases

In the ordinary course of business, the Company enters into non-cancelable operating leases for certain of its ~~facility, vehicle~~facilities, vehicles and ~~equipment needs, including related party leases. See~~ ~~Note 14. Related Party Transactions. Rent and related expense for operating leases that have non-cancelable terms totaled approximately $4.3~~equipment. The Company has obligations, exclusive of associated interest, totaling $44.3 million and ~~$0.5~~$44.2 million ~~for the three months ended September 30,~~at March 31, 2020 and December 31, 2019, respectively. Property under these operating lease agreements at March 31, 2020 and ~~2018, respectively and $9.5~~December 31, 2019, totaled $43.4 million and ~~$1.5~~$43.4 million, ~~for the nine months ended September 30, 2019 and 2018,~~ respectively.

The Company has long-term power-by-the-hour equipment rental agreements~~included in non-canceable operating lease expense above,~~ with a construction equipment manufacturer that have a guaranteed minimum monthly hour requirement. The minimum guaranteed amount based on the Company's current operations is $3.2 million per year. Total expense under these agreements ~~was $3.2 million for the nine months ended September 30, 2019.~~are listed below as variable lease costs.

The future minimum payments under non-cancelable operating leases are as follows:



(in thousands)
Remainder of 2020	$	9,784
2021	11,242
2022	8,846
2023	6,220
2024	3,116
Thereafter	20,461
Future minimum lease payments	59,669
Less: Amount representing interest	15,347
Present value of minimum lease payments	44,322
Less: Current portion of operating lease obligations	10,191
Operating lease obligations, less current portion	$	34,131

Lease Information



	Three months ended
	March 31, 2020			March 31, 2019

Finance Lease cost:
Amortization of right-of-use assets	5,697			5,008
Interest on lease liabilities	1,186			1,650
Operating lease cost	3,478			1,831
Short-term lease cost	21,635			8,496
Variable lease cost	960			191
Sublease Income	(33		)	(24		)
Total lease cost	$	32,923		$	17,152

Other information:
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from finance leases	$	1,186		$	1,650
Operating cash flows from operating leases	$	3,342		$	3,247
Weighted-average remaining lease term - finance leases	2.73 years			3.36 years
Weighted-average remaining lease term - operating leases	8.02 years			9.94 years
Weighted-average discount rate - finance leases	6.49		%	6.70		%
Weighted-average discount rate - operating leases	7.14		%	6.89		%

~~Sale-leaseback Transaction~~

On March 13, 2019, the Company completed a sale-leaseback transaction related to certain assets that were acquired as part of our recent acquisitions of $25.0 million. The payments related to this transaction are over a four year term and have been included as part of the ~~Contractual Maturities~~ ~~table, See~~ ~~Note 9. Debt~~.

~~Note 11. Concentrations~~

~~The Company had the following approximate revenue and accounts receivable concentrations, net of allowances, for the periods ended:~~

Revenue % Accounts Receivable %
Three Months Ended Nine Months Ended
September 30, September 30, September 30, 2019 December 31, 2018
2019 2018 2019 2018

Company A * 24.1 % *
22.6 % * 20.0 %
Company B * 16.7 % *
12.1 % * *
Company C * *
11.7 % *
* 19.0 %
Company D * 11.7 % *
*
* *

* Amount was not above 10% threshold

Note ~~12.~~8. Earnings Per Share

The Company calculates earnings (loss) per share (“EPS”) in accordance with ASC 260, Earnings per Share. Basic EPS is computed by dividing income (loss) available to common stockholders by the weighted average number of common shares of common stock outstanding during the period.

Income (loss) available to common stockholders is computed by deducting the dividends accrued for the period on cumulative preferred stock from net income. If there is a net loss, the amount of the loss is increased by those preferred dividends.

Whether the Company has net income, or a net loss determines whether potential issuances of common stock are included in the diluted EPS computation or whether they would be anti-dilutive. As a result, if there is a net loss, diluted EPS is computed in the same manner as basic EPS is computed. Similarly, if the Company has net income but its preferred dividend adjustment made in computing income available to common stockholders results in a net loss available to common stockholders, diluted EPS would be computed the same as basic EPS.

The calculations of basic and diluted EPS, are as follows:



	Three Months Ended
	March 31,
($ in thousands, except per share data)	2020		2019
Numerator:
Net loss	(12,743	)	(23,639	)
Less: Convertible Preferred Stock dividends	(766	)	(524	)
Net loss available to common stockholders	(13,509	)	(24,163	)

Denominator:
Weighted average common shares outstanding - basic and diluted	20,522,216		22,188,757

Anti-dilutive: ⁽¹⁾⁽²⁾
Convertible Series A Preferred	6,553,041		5,045,149
Series B Preferred - Warrants at closing	7,675,325		—
RSUs	1,456,359		354,106

Basic EPS	(0.66	)	(1.09	)
Diluted EPS	(0.66	)	(1.09	)


(1)	As of March 31, 2020 and 2019, publicly traded warrants to purchase 8,480,000 shares of common stock at $11.50 per share were not considered as dilutive as the warrants’ exercise price was greater than the average market price of the common stock during the period.


(2)	As of March 31, 2020 and 2019, there were 591,860 and 646,405 of vested and unvested Options and 141,248 and 169,494 unvested RSUs, respectively. These were also not considered as dilutive as the respective exercise price or average stock price required for vesting of such awards was greater than the average market price of the common stock during the period.

Series A Preferred Stock

As of March 31, 2020, we had 17,483 shares of Series A Preferred Stock with a stated value of $1,000 per share plus accumulated dividends. Dividends are paid on the Series A Preferred Stock as, if and when declared by our Board. To extent permitted, dividends are required to be paid in cash quarterly in arrears on each March 31, June 30, September 30 and December 31 on the stated value at a rate of 10% per annum.

So long as any shares of Series B Preferred Stock of the Company are currently outstanding or from and after the occurrence of any non-payment event or default event and until cured or waived, the foregoing rates will increase by 2% per annum.

As of March 31, 2020, the Company has accrued a cumulative of $2.5 million in dividends to holders of Series A Preferred Stock as a reduction to additional paid-in capital.

Series B Preferred Stock

As of March 31, 2020, we had 199,474 shares of Series B Preferred Stock outstanding, with each share having a stated value of $1,000 plus accumulated dividends. Our common stock and Series A Preferred Stock are junior to the Series B Preferred Stock. Dividends are paid in cash on the Series B Preferred Stock as, if and when declared by our Board. To the extent not prohibited by applicable law, dividends are required to be declared and paid in cash quarterly in arrears on each March 31, June 30, September 30 and December 31. Any dividend period for which the Total Net Leverage Ratio is greater than 1.50:1.00, the dividend rate is 13.5% per annum and (ii) with respect to any dividend period for which the Total Net Leverage Ratio is less than or equal to 1.50:1.00, at a rate of 12% per annum.

The Company has accrued a cumulative of $18.3 million in dividends to holders of Series B Preferred Stock, which is recorded in convertible debt in the Company's condensed consolidated balance sheet for the quarter ended March 31, 2020. See Note 5. Fair Value of Financial Instruments for discussion regarding the Company's valuation of Series B Preferred Stock.

Stock Compensation

The fair value of the RSUs was based on the closing market price of our common stock on the date of the grant. Stock compensation expense for the RSUs is being amortized using the straight-line method over the service period. For the three months ended March 31, 2020 and 2019, we recognized $1.1 million and $1.0 million in compensation expense, respectively,

Note 9. Income Taxes

The Company’s statutory federal tax rate was 21.00% for the periods ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018,~~ respectively. State tax rates for the same period vary among states and range from approximately 0.8% to 12.0%. A small number of states do not impose an income tax.

The effective tax rates for the three months ended ~~September 30,~~March 31, 2020 and 2019 ~~and 2018~~ were ~~(4.6)%~~6.4% and ~~13.2%, respectively. The effective tax rates for the nine months ended September 30, 2019 and 2018 were 43.0% and 15.8%~~27.4%, respectively. The difference between the Company’s effective tax rate and the federal statutory rate primarily results from permanent differences related to the ~~revaluation of the contingent liability fair value adjustment and~~ interest accrued for the Series B Preferred Stock, which is not deductible for federal and state income taxes. There were no changes in uncertain tax positions during the periods ended ~~September 30, 2019~~March 31, 2020 and ~~2018.~~2019.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted by the US Government in response to the COVID-19 pandemic to provide employment retention incentives. These relief measures did not

materially affect the condensed consolidated financial statements for the first quarter of 2020. We are currently assessing the future implications of these provisions on our condensed consolidated financial statements.

Note ~~13.~~10. Segments

The Company operated as one reportable segment for 2018 and evaluated the business as a renewable construction company. In late 2018, the Company completed two significant acquisitions that construct projects outside of the renewable market. As of September 30, 2019, weWe operate our business as two reportable segments: the Renewables segment and the Specialty Civil segment. ~~The 2018 segment presentation has been recast to be consistent to the 2019 segmentation.~~

Each of our reportable segments is comprised of similar business units that specialize in services unique to the respective markets that each segment serves. The classification of revenue and gross profit for segment reporting purposes can at times require judgment on the part of management. Our segments may perform services across industries or perform joint services for customers in multiple industries. To determine reportable segment gross profit, certain allocations, including allocations of shared and indirect costs, such as facility costs, equipment costs and indirect operating expenses, were made based on segment revenue.

Separate measures of the Company’s assets, including capital expenditures and cash flows by reportable segment are not produced or utilized by management to evaluate segment performance. A substantial portion of the Company’s fixed assets are owned by and accounted for in our equipment department, including operating machinery, equipment and vehicles, as well as office equipment, buildings and leasehold improvements, and are used on an interchangeable basis across our reportable segments. As such, for reporting purposes, total under/over absorption of equipment expenses consisting primarily of depreciation is allocated to the Company's two reportable segments based on segment revenue.

The following is a brief description of the Company's reportable segments:

Renewables Segment

The Renewables segment operates throughout the United States and specializes in a range of full engineering, procurement and construction (“EPC”) services that include ~~full EPC~~ project delivery, design, site development, construction, installation and restoration of infrastructure services for the wind and solar industries.

Specialty Civil Segment

The Specialty Civil segment operates throughout the United States and specializes in a range of services that include:

Heavy civil construction services such as high-altitude road and bridge construction, specialty paving, industrial maintenance and other local, state and government projects.

Environmental remediation services such as site development, environmental site closure and outsourced contract mining and coal ash management services.

Rail Infrastructure services such as planning, creation and maintenance of infrastructure projects for major railway and intermodal facilities construction.

Segment Revenue

Revenue by segment was as follows:


	Three months ended September 30,								Nine months ended September 30,								Three Months Ended March 31,
(in thousands)	2019				2018				2019				2018				2020				2019
Segment	Revenue		% of Total Revenue		Revenue		% of Total Revenue		Revenue		% of Total Revenue		Revenue		% of Total Revenue		Revenue		% of Total Revenue		Revenue		% of Total Revenue
Renewables	$	242,654	57.5	%	$	262,477	94.0	%	$	496,863	52.8	%	$	480,362	95.4	%	$	248,746	69.5	%	$	74,031	39.0	%
Specialty Civil	179,368		42.5	%	16,802		6.0	%	443,930		47.2	%	23,125		4.6	%	109,417		30.5	%	115,750		61.0	%
Total revenue	$	422,022	100.0	%	$	279,279	100.0	%	$	940,793	100.0	%	$	503,487	100.0	%	$	358,163	100.0	%	$	189,781	100.0	%

Segment Gross Profit

Gross profit by segment was as follows:


	Three months ended September 30,								Nine months ended September 30,								Three Months Ended March 31,
(in thousands)	2019				2018				2019				2018				2020				2019
Segment	Gross Profit		Gross Profit Margin		Gross Profit		Gross Profit Margin		Gross Profit		Gross Profit Margin		Gross Profit		Gross Profit Margin		Gross Profit		Gross Profit Margin		Gross Profit		Gross Profit Margin
Renewables	$	27,469	11.3	%	$	24,822	9.5	%	$	45,806	9.2	%	$	37,578	7.8	%	$	25,829	10.4	%	$	1,163	1.6	%
Specialty Civil	25,401		14.2	%	2,186		13.0	%	45,259		10.2	%	3,144		13.6	%	7,212		6.6	%	4,581		4.0	%
Total gross profit	$	52,870	12.5	%	$	27,008	9.7	%	$	91,065	9.7	%	$	40,722	8.1	%	$	33,041	9.2	%	$	5,744	3.0	%

Note ~~14.~~11. Related Party Transactions

~~Clinton Lease Agreement~~

On October 20, 2017, the Company enacted a plan to restructure the ownership of a building and land which resulted in the transfer of ownership of such building and land from its consolidated subsidiary, White Construction, LLC, to Clinton RE Holdings, LLC (Cayman) (“Cayman Holdings”), a directly owned subsidiary of the Infrastructure and Energy Alternatives, LLC. The lease has been classified as an operating lease with monthly payments through 2038. The Company's rent expense related to the lease during the three months ended September 30, 2019 and 2018, was $178 and $153, respectively, and for the nine months ended September 30, 2019 and 2018, was $534 and $459, respectively.

On October 30, 2019, Cayman Holdings sold the building to a third party that assumed the future payments and terms of the existing lease. The Company will continue to have rent expense related to the lease but it will no longer be with a related party.

Related Party Shareholders



Type of Equity	Holder	Ownership Percentage
Series A Preferred, Series A Conversion Warrants and Exchange Warrants, Series B-3 Preferred Stock (exchange agreement)	Infrastructure and Energy Alternatives, LLC	100	%
Series B-1 Preferred Stock, Series A Conversion Warrants, Additional 6% Warrants, Warrants at closing	Ares	60	%
	Oaktree Power Opportunities Fund III Delaware, L.P.	40	%
~~Contingent Consideration~~2020 Commitment	~~Infrastructure and Energy Alternatives, LLC~~Ares	~~100~~50	%
~~Contingent Consideration~~2020 Commitment	Oaktree Power Opportunities Fund III Delaware, L.P.	50	%
Series B-2 and B-3 Preferred Stock, Warrants at closing	Ares	100	%

Note ~~15.~~12. Subsequent Event

~~Third~~Amendment to Equity Commitment Agreement

On ~~October 29, 2019,~~May 6, 2020, the Company entered into an Amendment (the “Amendment”) to the ~~Third~~ Equity Commitment Agreement, dated as of October 29, 2019 (the ~~“Third Equity~~“Equity Commitment Agreement”) ~~among~~by and between the Company, ~~funds managed by~~ Ares ~~Management Corporation (“Ares”)~~ and ~~funds managed by Oaktree Capital Management (“Oaktree”). Pursuant to~~Oaktree. The Amendment amends the ~~Third~~ Equity Commitment Agreement to extend the ~~Company agreed~~period of time required to issue and sell 80,000 shares of newly designated Series B-3 Preferred Stock (the “Series B-3 Preferred Stock”) and 3,568,750 Warrants for an aggregate purchase price of $80.0 million (the “Initial Closing”). Consummation of the Initial Closing is subject to a number of conditions; however, funding is expected to occur within 12 business days from October 29th.

After the Initial Closing, Ares and Oaktree, pursuant to the Third Equity Commitment Agreement are each required, subject to certain conditions, to purchase up to an additional 15,000 shares (collectively 30,000 shares) of Series B-3 Preferred Stock and 515,625 Warrants (collectively 1,031,250 Warrants), resulting in additional proceeds to the Company in an amount of up to $30.0 million, if, by certain agreed upon dates, the Company has not repaid at least an additional $30.0 million under its term loan using excess cash and proceeds from the Rights Offering.

~~Rights Offering Agreement~~

~~On October 29, 2019, the Company entered~~enter into the ~~Rights Offering Agreement (the “Rights Agreement”). Pursuant to the Rights Agreement, assuming all applicable conditions are satisfied, the Company has agreed to conduct a rights offering~~2020 Commitment and ~~to distribute a transferrable right, but not the obligation, to~~ purchase Series B-3 Preferred Stock and warrants to purchase common stock to the holders of the Company’s outstanding common stock other than parties to the Third Equity Commitment Agreement and each of their director designees, the officers of the Company, and any related party of the foregoing (the “Rights Offering”). The Rights Offering will be subject to a maximum participation of 15,000 shares of Series B-3 Preferred Stock being issued, plus warrants at the rate of 5.5 per $160 of Series B-3 Preferred Stock purchased, an individual investment minimum of $50,000 and an individual investment maximum of the greater of the holder's pro rata share of the common stock eligible to participate and $2.25 million.

~~Preferred Stock Exchange Agreement~~

On October 29, 2019, the Company entered into the Preferred Stock Exchange Agreement (the “Exchange Agreement”). Pursuant to the Exchange Agreement, the holder of our Series A Preferred Stock has agreed to exchange 50% of its total Series A Preferred Stock outstanding intoadditional shares of Series B-3 Preferred Stock and ~~Warrants at~~warrants from the ~~Initial Closing. The number of shares of Series B-3 Preferred Stock~~Company to ~~be issued~~July 14, 2020, or such other date as mutually agreed upon. Additionally, the Amendment clarifies that the 2020 Commitment shall in the exchange will be calculated by dividing the stated value (including unpaid accumulated and compounded dividends) of each share of Series A Preferred Stock to be exchanged by a price per share of Series B-3 Preferred Stock of $1,000. The number of warrants to be issued will be at a rate of 5.5 warrants per $160 of stated value of the Series A Preferred Stock exchanged.no event exceed $5,650,000.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The forward-looking statements can be identified by the use of forward-looking terminology including “may,” “should,” “likely,” “will,” “believe,” “expect,” “anticipate,” “estimate,” “forecast,” “seek,” “target,” “continue,” “plan,” “intend,” “project,” or other similar words. All statements, other than statements of historical fact included in this Quarterly Report, regarding expectations for the impact of COVID-19 future financial performance, business strategies, expectations for our business, future operations, liquidity positions, availability of capital resources, financial position, estimated revenues and losses, projected costs, prospects, plans, objectives and beliefs of management are forward-looking statements.

These forward-looking statements are based on information available as of the date of this Quarterly Report and our management’s current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we cannot give any assurance that such expectations will prove correct. Forward-looking statements should not be relied upon as representing our views as of any subsequent date. As a result of a number of known and unknown risks and uncertainties, our actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Some factors that could cause actual results to differ include:

~~our ability to consummate the transactions related~~potential risks and uncertainties relating to the ~~Third Equity Commitment Agreement,~~ultimate impact of COVID-19, including the ~~Rights Agreement,~~geographic spread, the severity of the disease, the duration of the COVID-19 pandemic, actions that may be taken by governmental authorities to contain the COVID-19 pandemic or to treat its impact, and the ~~Exchange Agreement (each as defined below);~~potential negative impacts of COVID-19 on the global economy and financial markets;

availability of commercially reasonable and accessible sources of liquidity and bonding;

our ability to generate cash flow and liquidity to fund operations;

the timing and extent of fluctuations in geographic, weather and operational factors affecting our customers, projects and the industries in which we operate;

our ability to identify acquisition candidates and integrate acquired ~~businesses and realize upon the expected benefits of the acquisition of CCS and William Charles;~~businesses;

consumer demand;

our ability to grow and manage growth profitably;

the possibility that we may be adversely affected by economic, business, and/or competitive factors;

market conditions, technological developments, regulatory changes or other governmental policy uncertainty that affects us or our customers;

our ability to manage projects effectively and in accordance with management estimates, as well as the ability to accurately estimate the costs associated with our fixed price and other contracts, including any material changes in estimates for completion of projects;

the effect on demand for our services and changes in the amount of capital expenditures by customers due to, among other things, economic conditions, commodity price fluctuations, the availability and cost of financing, and customer consolidation;

the ability of customers to terminate or reduce the amount of work, or in some cases, the prices paid for services, on short or no notice;

customer disputes related to the performance of services;

disputes with, or failures of, subcontractors to deliver agreed-upon supplies or services in a timely fashion;

our ability to replace non-recurring projects with new projects;

the impact of U.S. federal, local, state, foreign or tax legislation and other regulations affecting the renewable energy industry and related projects and expenditures;

the effect of state and federal regulatory initiatives, including costs of compliance with existing and future safety and environmental requirements;

fluctuations in maintenance, materials, labor and other costs;

our beliefs regarding the state of the renewable wind energy market generally; and

the “Risk Factors” described in our Annual Report on Form 10-K for the year ended December 31, ~~2018,~~2019, and in our quarterly reports, other public filings and press releases.

We do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

Throughout this section, unless otherwise noted “IEA,” “Company,” “we,” “us,” and “our” refer to Infrastructure and Energy Alternatives, Inc. and its consolidated subsidiaries. Certain amounts in this section may not foot due to rounding.

~~“Emerging Growth Company” Status~~

The condensed consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and reflect the financial position, results of operations, and cash flows of IEA. IEA qualifies as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act (the “JOBS Act”). For as long as a company is deemed to be an “emerging growth company,” it may take advantage of specified reduced reporting and other regulatory requirements that are generally unavailable to other public companies. The JOBS Act also provides that an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of this extended transition period. Our financial statements may therefore not be comparable to those of companies that have adopted such new or revised accounting

~~standards. See~~ ~~Note 1. Business, Basis of Presentation and Significant Accounting Policies~~ of the Notes to condensed consolidated financial statements for more information on “emerging growth company” reduced reporting requirements and when we would cease to be an “emerging growth company.” We continue to monitor our status as an “emerging growth company” and are currently preparing, and expect to be ready, to comply with the additional reporting and regulatory requirements that will be applicable to us when we cease to qualify as an “emerging growth company.”

Overview

We are a leading diversified infrastructure construction company with specialized energy and heavy civil expertise throughout the United States. We segregate our business into two reportable segments: the Renewables segment and the Specialty Civil segment.

The ~~Company specializes in providing complete engineering, procurement and construction services~~Renewables segment operates throughout the United States ~~for the renewable energy, traditional power~~ and ~~civil infrastructure industries. These~~specializes in a range of services that include ~~the~~project delivery, design, site development, construction, installation and restoration of ~~infrastructure.~~infrastructure services for the wind and solar industries. We are one of ~~three Tier 1~~the larger providers in the ~~wind~~renewable energy industry and have completed more than 200 wind and solar projects in 35 states. ~~Although~~

The Specialty Civil segment operates throughout the ~~Company has historically focused on the wind industry, its recent acquisitions have expanded our~~United States and specializes in a range of services that include:

Heavy civil construction ~~capabilities~~services such as high-altitude road and ~~geographic footprint to create a diverse national platform of~~bridge construction, specialty ~~construction capabilities in the areas of environmental remediation,~~paving, industrial maintenance ~~specialty paving, heavy civil~~ and ~~rail infrastructure construction. We believe we have the ability to continue to expand these services because we are well-positioned to leverage our expertise~~other local, state and ~~relationships in the wind energy business to provide complete infrastructure solutions in all areas.~~government projects.

~~We segregate our business into two reportable segments: the Renewables (“Renewables”) segment~~Environmental remediation services such as site development, environmental site closure and ~~the Heavy Civil~~outsourced contract mining and ~~Industrial (“Specialty Civil”) segment. See~~ ~~“Segment Results”~~ coal ash management services.

Rail Infrastructure services such as planning, creation and maintenance of infrastructure projects for ~~a description of the reportable segments~~major railway and ~~their operations.~~intermodal facilities construction.

As previously disclosed, the Company’s prior year results reflect the effect of multiple severe weather events on the Company’s wind business that began late in the third quarter and continued into the fourth quarter of 2018. These weather conditions had a significant impact on the construction of six wind projects across South Texas, Iowa, and Michigan, resulting in additional labor, equipment and material costs. Although these projects are all now completed, and we are collecting and continuing to collect on change orders relating to force majeure provisions of the contracts with respect to certain of these projects, we are continuing to feel the impacts of these events on our business, including with respect to our financial and liquidity positions and operating cash flows. In connection with the adverse weather effects, the Company took steps in 2019 that it believes enhanced its liquidity. See ~~“Recent Developments.”~~

~~Recent Developments~~

~~October 2019~~

~~Third Equity Commitment Agreement~~

On October 29, 2019, the Company entered into the Third Equity Commitment Agreement (the “Third Equity Commitment Agreement”) among the Company, funds managed by Ares Management Corporation (“Ares”) and funds managed by Oaktree Capital Management (“Oaktree”). Pursuant to the Third Equity Commitment Agreement, the Company agreed to issue and sell 80,000 shares of newly designated Series B-3 Preferred Stock (the “Series B-3 Preferred Stock”) and 3,568,750 Warrants for an aggregate purchase price of $80.0 million (the “Initial Closing”). Consummation of the Initial Closing is subject to a number of conditions; however, funding is expected to occur within 12 business days from October 29, 2019.

~~Rights Offering Agreement~~

On October 29, 2019, the Company entered into the Rights Offering Agreement (the “Rights Agreement”). Pursuant to the Rights Agreement, assuming all applicable conditions are satisfied, the Company has agreed to conduct a rights offering and to distribute a transferrable right, but not the obligation, to purchase Series B-3 Preferred Stock and warrants to purchase common stock to the holders of the Company’s outstanding common stock other than parties to the Third Equity Commitment Agreement and each of their director designees, the officers of the Company, and any related party of the foregoing (the “Rights Offering”). The Rights Offering will be subject to a maximum participation of 15,000 shares of Series B-3 Preferred Stock being issued, plus warrants at the rate of 5.5 per $160 of Series B-3 Preferred Stock purchased, an individual investment minimum of $50,000 and an individual investment maximum of the greater of the holder's pro rata share of the common stock eligible to participate and $2.25 million.

~~Preferred Stock Exchange Agreement~~

On October 29, 2019, the Company entered into the Preferred Stock Exchange Agreement (the “Exchange Agreement”). Pursuant to the Exchange Agreement, the holder of our Series A Preferred Stock has agreed to exchange 50% of its total Series A Preferred Stock outstanding into shares of Series B-3 Preferred Stock and Warrants. The number of shares of Series B-3 Preferred Stock to be issued in the exchange will be calculated by dividing the stated value (including unpaid accumulated and compounded dividends) of each share of Series A Preferred Stock to be exchanged by a price per share of Series B-3 Preferred Stock of $1,000.00. The number of warrants to be issued will be at a rate of 5.5 warrants per $160 of stated value of the Series A Preferred Stock exchanged.

~~August 2019~~

~~Second Equity Commitment Agreement~~

On August 13, 2019, the Company entered into the Second Equity Commitment Agreement (the “Second Equity Commitment Agreement”). Pursuant to the Second Equity Commitment Agreement, the Company issued and sold on August 30, 2019, 50,000 shares of Series B-2 Preferred Stock (the “Series B-2 Preferred Stock”) and 900,000 warrants to purchase common stock (“Warrants”) for an aggregate purchase price of $50.0 million.

~~May 2019~~

~~First Equity Commitment Agreement~~

On May 20, 2019, the Company entered into the Amended and Restated Equity Commitment Agreement (the “First Equity Commitment Agreement”). Pursuant to the First Equity Commitment Agreement, the Company issued and sold on May 20, 2019, 50,000 shares of Series B-1 Preferred Stock (the “Series B-2 Preferred Stock”) and 2,545,934 Warrants for an aggregate purchase price of $50.0 million.

~~Third Amended and Restated Credit Agreement~~

~~On May 20, 2019, the Third Amended and Restated Credit Agreement (the “Third A&R Credit Agreement”) became effective. Please see “-Liquidity and Capital Resources--Sources and Uses of Cash-Third A&R Credit Documents.”~~

~~Series A Preferred Stock~~

On May 20, 2019, we adopted an Amended and Restated Certificate of Designations of Series A Preferred Stock which, among other things, permits us to accrue dividends and increase the stated value on the Series A Preferred Stock in lieu of paying cash dividends. Please see ~~“-Liquidity and Capital Resources-Sources and Uses of Cash-Series A Preferred Stock.”~~

~~Company Highlights~~

Our long-term diversification and growth strategy has been to broaden our solar, power generation, and civil infrastructure capabilities and geographic presence and to expand the services we provide within our existing business areas. We took important steps in late 2018 by deepening our capabilities and entering new sectors that are synergistic with our existing capabilities and product offerings.

On September 25, 2018, we acquired CCS, a leading provider of environmental and industrial engineering services. The wholly-owned subsidiaries of CCS, Saiia and the ACC Companies, generally enter into long-term contracts with both government and non-government customers to provide EPC services for environmental, heavy-civil and mining projects. We believe our acquisition of Saiia and the ACC Companies will provide IEA with a strong and established presence in the environmental and industrial engineering markets, enhanced civil construction capabilities and an expanded domestic footprint in less-seasonal Southeast, West and Southwest markets.

On November 2, 2018, we acquired William Charles, a leader in engineering and construction solutions for the rail infrastructure and heavy civil construction industries. We believe our acquisition of William Charles will provide IEA with a market leading position in the attractive rail civil infrastructure market and continue to bolster our further growth in the heavy civil and construction footprint across the Midwest and Southwest.

~~We believe that through the acquisitions above that~~ the Company has transformed its business into a diverse national platform of specialty construction capabilities with market leadership in niche markets, including renewables, environmental remediation and industrial maintenance services, heavy civil and rail.

Coronavirus Pandemic Update

The Coronavirus Disease (“COVID-19”) pandemic continues to significantly impact the United States and the world generally. The impact of COVID-19 on construction businesses such as ours is evolving rapidly and its future effects are uncertain. We are focused on the safety of our employees and ensuring that our construction sites are managed by taking all reasonable precautions to protect on-site personnel.

We have taken the following actions to address the risks attributable to the COVID-19 pandemic:

We established a dedicated COVID-19 task force representing all parts of the Company to review and implement actions to prepare for the impacts on our operations, including a variety of protocols in the areas of social distancing, working from home, emergency office and project site closures, and travel restrictions.

In addition to our existing site crisis management plans, our operations expanded and implemented their pandemic response plans to ensure a consistent, comprehensive response to various COVID-19 scenarios.

We implemented more stringent office and project site cleaning and hygiene protocols in all locations. We also developed more stringent tool, vehicle and equipment cleaning protocols.

For employees, we established a regularly updated COVID-19 information hub with FAQs, important communications, regularly updated protocols, business planning tools, best practices, signage/flyers and other important resources.

We have significantly increased communications, signage and oversight of personal hygiene requirements to drive better prevention practices.

We postponed social gatherings, large in-person training sessions and other activities involving groups of 10 or more.

We have prohibited virtually all Company air travel unless approved by executive leadership. We have also required all employees to report their personal travel schedules so we can closely monitor and take any necessary steps to maintain the safety of our workforce.

We have increased our efforts to reduce SG&A expenses by implementing a hiring freeze, delaying the Company 401(k) match until later in the year, prohibiting all non-essential travel, reducing new initiatives, deferring promotions and salary changes, and canceling any non-essential capital expenditures or consulting work.

To mitigate the effects of working from home and travel bans, we have significantly increased the use of remote communication technologies.

We are actively monitoring this issue, including disease progression, federal, state and local government actions, CDC and WHO responses, supplier and supply chain risks, and prevention and containment measures to maintain business operations. As the COVID-19 pandemic and the responses by federal, state and local governments continue to evolve, we continue to make adjustments to our practices and policies to protect the health of our employees and those we work with at our projects and office locations, while continuing to provide our essential construction services to our clients.

We believe that the foregoing actions have significantly reduced the Company’s exposure to the effects of COVID-19, including our workforce’s exposure to infection from COVID-19. As of today, we have had a drastically low incidence of infection in our workforce, none of which we believe was transmitted at work.

While we have received notices of force majeure from certain of our suppliers and customers, we don’t believe at this time, that any such notices will cause critical project delays. To date, we have not had any work stoppages or indications that any of our key projects will be significantly delayed. However, we cannot predict significant disruptions beyond our control, including quarantines and customer work stoppages, significant force majeure declarations by our suppliers or other equipment providers material to our projects. We are taking actions to preserve our liquidity such as limiting our hiring and delaying spending on non-critical initiatives. At this point, we do not believe that COVID-19 is having a negative impact on our liquidity. We could see a change in this status if we experience work stoppages at our projects which would prevent us from billing customers for new work performed. If the federal, state and local governments proceed with more restrictive measures, and our customers determine to stop work or terminate projects, these actions would negatively impact our business, results of operations, liquidity and prospects. In addition, the Company is unable to predict any changes in the market for bonding by our sureties. The Company's ability to obtain bonding may be negatively impacted by market conditions beyond its control.

Economic ~~Industry~~ and Market Factors

We closely monitor the effects that changes in economic and market conditions may have on our customers. General economic and market conditions can negatively affect demand for our customers’ products and services, which can lead to reductions in our customers’ capital and maintenance budgets in certain end-markets. In the face of increased pricing pressure, we strive to maintain our profit margins through productivity improvements and cost reduction programs. Other market, regulatory and industry factors could also affect demand for our services, such as:

changes to our customers’ capital spending plans;

mergers and acquisitions among the customers we serve;

access to capital for customers in the industries we serve;

changes in tax and other incentives;

new or changing regulatory requirements or other governmental policy uncertainty;

economic, market or political developments; and

changes in technology.

We cannot predict the effect that changes in such factors may have on our future results of operations, liquidity and cash flows, and we may be unable to fully mitigate, or benefit from, such changes.

Industry Trends

Our industry is composed of national, regional and local companies in a range of industries, including renewable power generation, traditional power generation and the civil infrastructure industries. We believe the following industry trends will help to drive our growth and success over the coming years:

Renewables - We have maintained a focus on construction of renewable power production capacity as renewable energy, particularly from wind and solar, and on December 16, 2019, the federal government implemented an agreement that extended lapsed and expiring tax breaks for wind renewable projects. The extension provides a single year extension of the production tax credit (“PTC”) at a 60% level and the investment tax credit (“ITC”) at an 18% level to qualifying projects for which the construction commencement date is now prior to January 1, 2021. We believe that demand will continue to remain strong even after expiration due to the following factors:

Technological advances in turbines sizes and battery storage continue to drive lower costs of electricity generated from wind and solar farms;

Approximately 40 states, as well as the District of Columbia and four territories, have adopted renewable portfolio standards or goals strengthening the backing for clean energy; and

The Annual Energy Outlook 2020 published by the U.S. Department of Energy (“DOE”) in January 2020 projected the addition of approximately 117 gigawatts of new utility-scale wind and solar capacity from 2020 to 2023. We estimate that EPC services will account for approximately 30% of the estimated $28.4 billion of construction over that time period.

We believe that these factors could challenge our future revenue streams in the Renewables segment:

Reduction of owner financing related to the current COVID-19 environment which could cause delays or cancellations of future projects; and

Market price declines on natural gas and other energy products that undercut the immediate demand for increased renewable infrastructure.

Specialty Civil - Our Specialty Civil revenue has been generated through a combination of heavy civil construction, rail construction and environmental remediation. We believe that demand will continue to remain strong based on the following factors:

Heavy civil - the FMI 2020 Overview Report published in the fourth quarter of 2019 project that nonresidential construction put in place for the United States will be over $850 million per year from 2020 to 2023.

Rail - Fostering Advancements in Shipping And Transportation For The Long-Term Achievement of National Efficiencies (FASTLANE) grants are expected to provide $4.5 billion through 2020 to freight and highway projects of national or regional significance.

Environmental remediation - According to the American Coal Ash Association, more than 102.3 million tons of coal ash was generated in 2018 and 42% of coal ash generated was disposed of.

We believe that these factors could challenge our future revenue streams in the Specialty Civil segment:

Decrease in demand for civil construction resulting from corresponding decreases in state departments of transportation budgets from lack of revenues due to quarantine.

Reduction of future pipeline opportunities in certain portions of the U.S. related to further impact of COVID-19.

Impact of Seasonality and Cyclical Nature of Business

Our revenue and results of operations are subject to seasonal and other variations. These variations are influenced by weather, customer spending patterns, bidding seasons, ~~fiscal year-ends,~~ project schedules and timing, in particular, for large non-recurring projects and holidays. Typically, our revenue in our Renewable segment is lowest in the first quarter of the year because cold, snowy or wet conditions experienced in the northern climates are not conducive to efficient or safe construction practices. Revenue in the second quarter is typically higher than in the first quarter, as some projects begin, but continued cold and wet weather and effects from thawing ground conditions can often impact second quarter productivity. The third and fourth quarters are typically ~~our~~the most productive quarters of the year as a greater number of projects are underway and weather is normally more

accommodating to construction projects. In the fourth quarter, many projects tend to be completed by customers seeking to spend their capital budgets before the end of the year, which generally has a positive impact on our revenue. Nevertheless, the holiday season and inclement weather can cause delays, which can reduce revenue and increase costs on affected projects. Any quarter may be positively or negatively affected by adverse or unusual weather patterns, including from excessive rainfall, warm winter weather or natural catastrophes such as hurricanes or other severe weather, making it difficult to predict quarterly revenue and margin variations. The Company has started construction on 2020 renewable projects in late 2019 due to the desire of our customers to finish these projects before September 30, 2020. This shift in demand will impact 2020 quarterly revenues, which we currently anticipate will shift revenue from the fourth quarter back into the second and third quarter of 2020.

Our revenue and results of operations for our Specialty Civil segment are also affected by seasonality but to a lesser extent as these projects are more geographically diverse and located in less severe weather areas. While the first and second quarter revenues are typically lower than the third and fourth quarter, this diversity has allowed this segment to be less seasonal over the course of the year.

Our industry is also highly cyclical. Fluctuations in end-user demand within the industries we serve, or in the supply of services within those industries, can impact demand for our services. As a result, our business may be adversely affected by industry declines or ~~timing of~~by delays in new projects. Variations in project schedules or unanticipated changes in project schedules, in particular, in connection with large construction and installation projects, can create fluctuations in revenue, which may adversely affect us in a given period. In addition, revenue from master service agreements, while generally predictable, can be subject to volatility. The financial condition of our customers and their access to capital, variations in project margins, regional, national and global economic, political and market conditions, regulatory or environmental influences, and acquisitions, dispositions or strategic investments can also materially affect quarterly results. Accordingly, our operating results in any particular period may not be indicative of the results that can be expected for any other period.

~~Understanding our Operating Results~~

~~Revenue~~

We provide engineering, building, installation, maintenance and upgrade services to our customers. We derive revenue from projects performed under fixed price contracts and other service agreements for specific projects or jobs requiring the construction and installation of an entire infrastructure system or specified units within an entire infrastructure system. We recognize a significant portion of our revenue based on the percentage-of-completion method. See ~~Revenue Recognition for Percentage-of-Completion Projects~~ ~~within~~ ~~Critical Accounting Policies and Estimates~~ ~~below.~~

~~Cost of Revenue and Gross Margin~~

Cost of revenue consists principally of salaries, wages and employee benefits; subcontracted services; equipment rentals and repairs; fuel and other equipment expenses, including allocated depreciation and amortization expense; material costs, parts and supplies; insurance; and facilities expenses. Project profit is calculated by subtracting a project’s cost of estimated revenue, including project-related depreciation, from project revenue. Project profitability and corresponding project margins will be reduced if actual costs to complete a project exceed our estimates on fixed price and installation/construction service agreements. Estimated losses on contracts are recognized immediately when estimated costs to complete a project exceed the remaining revenue to be received over the remainder of the contract. Various factors can impact our margins on a quarterly or annual basis, including:

~~Seasonality and Geographical Factors~~. Seasonal patterns can have a significant impact on project margins. Generally, business is slower at the beginning of the year. Adverse or favorable weather conditions can impact project margins in a given period. For example, extended periods of rain or snowfall can negatively impact revenue and project margins as a result of reduced productivity from projects being delayed or temporarily halted. Conversely, in periods when weather remains dry and temperatures are accommodating, more work can be done, sometimes with less cost, which can favorably impact project margins. In addition, the mix of business conducted in different geographic areas can affect project margins due to the particular characteristics associated with the physical locations where the work is being performed, such as mountainous or rocky terrain versus open terrain. Site conditions, including unforeseen underground conditions, can also impact project margins.

~~Revenue Mix~~. The mix of revenues derived from the industries we serve and the types of services we provide within an industry will impact margins, as certain industries and services provide higher margin opportunities. Additionally, changes in our customers’ spending patterns in any of the industries we serve can cause an imbalance in supply and demand and, therefore, affect margins and mix of revenues by industry served.

~~Performance Risk~~. Overall project margins may fluctuate due to work volume, project pricing and job productivity. Job productivity can be impacted by quality of the work crew and equipment, availability of skilled labor, environmental or regulatory factors, customer decisions and crew productivity. Crew productivity can be influenced by weather conditions and job terrain, such as whether project work is in a right of way that is open or one that is obstructed (either by physical obstructions or legal encumbrances).

~~Subcontracted Resources~~. Our use of subcontracted resources in a given period is dependent upon activity levels and the amount and location of existing in-house resources and capacity. Project margins on subcontracted work can vary from project margins on self-perform work. As a result, changes in the mix of subcontracted resources versus self-perform work can impact our overall project margins.

~~Selling, General and Administrative Expenses~~

Selling, general and administrative expenses consist principally of compensation and benefit expenses, travel expenses and related expenses for our finance, benefits, risk management, legal, facilities, information services and executive personnel. Selling, general and administrative expenses also include outside professional and accounting fees, expenses associated with information technology used in administration of the business, various types of insurance, acquisition and transaction expenses.

~~Interest Expense, Net~~

Interest expense, net consists of contractual interest expense on outstanding debt obligations, capital leases, amortization of deferred financing costs and other interest expense, including interest expense related to financing arrangements, with all such expenses net of interest income.

Critical Accounting Policies and Estimates

This ~~management’s~~ discussion and analysis of our financial condition and results of operations is based upon ~~IEA’s~~our condensed consolidated financial statements, ~~included in Item 1 of this Quarterly Report on Form 10-Q,~~ which have been prepared in accordance with U.S. GAAP. The preparation of ~~these~~our condensed consolidated financial statements requires the use of estimates and assumptions that affect the amounts reported in our condensed consolidated financial statements and the accompanying notes. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis of making judgments about our operating results, including the results of construction contracts accounted for under the cost-to-cost method, and the carrying values of assets and liabilities that are not readily apparent from other sources. Given that management estimates, by their nature, involve judgments regarding future uncertainties, actual results may differ from these estimates if conditions change or if certain key assumptions used in making these estimates ultimately prove to be inaccurate. ~~For discussion of all of our significant accounting policies, see~~Refer to Note 1. Business, Basis of Presentation and Significant Accounting Policies in the notes to our condensed consolidated financial ~~statements.~~statements and to our 2019 Form 10-K for discussion of our significant accounting policies.

We believe that our key estimates include: the recognition of revenue and project profit or loss ; fair value estimates, including those related to Series B Preferred Stock; valuations of goodwill and intangible assets; asset lives used in computing depreciation and amortization; accrued self-insured claims; other reserves and accruals; accounting ~~policies described below~~for income taxes; and the estimated impact of contingencies and ongoing litigation. While management believes that such estimates are reasonable when considered in conjunction with the ~~most critical in the preparation of our~~Company’s condensed consolidated financial ~~statements as they are important to the portrayal of our financial condition~~position and ~~require significant or complex judgment and estimates on the part of management.~~

~~Revenue Recognition for Percentage-of-Completion Projects~~

Revenue from fixed-price contracts provides for a fixed amount of revenue for the entire project, subject to certain additions for changed scope or specifications. We recognize revenue from these contracts using the percentage-of-completion method. Under this method, the percentage of revenue to be recognized for a given project is measured by the percentage of costs incurred to date on the contract to the total estimated costs for the contract.

The estimation process for revenue recognized under the percentage-of-completion method is based on the professional knowledge and experience of our project managers, engineers and financial professionals. Our management reviews the estimates of contract revenue and costs on an ongoing basis. Changes in job performance, job conditions and management’s assessment of expected settlements of disputes related to contract price adjustments are factors that influence estimates of total contract value and total costs to complete those contracts and, therefore, our profit recognition. Changes in these factors may result in revisions to costs and income, and their effects are recognized in the period in which the revisions are determined, which could materially affect our results of operations, in the period in which such changes are recognized. Provisions for losses on uncompleted contracts are made in the period in which such losses are determined to be probable and the amount can be reasonably estimated. The substantial majority of fixed price contracts are completed within one year.

For an approved change order which can be reliably estimated as to price, the anticipated revenues and costs associated with the change order are added to the total contract value and total estimated costs of the project, respectively. When costs are incurred for a) an unapproved change order which is probable to be approved or b) an approved change order which cannot be reliably estimated as to price, the total anticipated costs of the change order are added to both the total contract value and total estimated costs for the project. Once a change order becomes approved and reliably estimable, any margin related to the change order is added to the total contract value of the project.actual results could differ materially from those estimates.

~~Business Combinations~~

We account for our business combinations by recognizing and measuring in the financial statements the identifiable assets acquired, the liabilities assumed and any non-controlling interests (if applicable) in the acquiree at the acquisition date. The purchase is accounted for using the acquisition method, and the fair value of purchase consideration is allocated to the tangible and intangible assets acquired and the liabilities assumed based on their estimated fair values. The excess, if any, of the fair value of the purchase consideration over the fair value of the identifiable net assets is recorded as goodwill. Conversely, the excess, if any, of the net fair values of the identifiable net assets over the fair value of the purchase consideration is recorded as a gain. The fair values of net assets acquired are calculated using expected cash flows and industry-standard valuation techniques and these valuations require management to make significant estimates and assumptions. These estimates and assumptions are inherently uncertain and, as a result, actual results may materially differ from estimates. Significant estimates include, but are not limited to, future expected cash flows, useful lives and discount rates.“Emerging Growth Company” Status

~~Due to~~As of December 31, 2019, the ~~time required to gather~~Company's total annual gross revenues exceed $1.07 billion and analyze the necessary data for each acquisition, U.S. GAAP provides a “measurement period” of up to one year in which to finalize these fair value determinations. During the measurement period, preliminary fair value estimates may be revised if new information is obtained about the facts and circumstances existingwe are no longer an “emerging growth company,” as ~~of the date of acquisition, or based on the final net assets and working capital of the acquired business, as prescribed~~defined in the applicable purchase agreement. Such adjustments may result in the recognition, or adjust the fair values, of acquisition-related assets and liabilities and/or consideration paid, and are referred to as “measurement period” adjustments. For the period ended September 30, 2019, there were no measurement period adjustments and the Company has finalized the initial fair value measurements for the CCS and William Charles acquisitions, see further discussion inJumpstart Our Business Startups Act (the “JOBS Act”). See Note ~~2. Acquisitions~~1. Business, Basis of Presentation and Significant Accounting Policies ~~included in Item 1 of this Quarterly Report on Form 10-Q.~~to our consolidated financial statements for more information.

Results of Operations

Three Months Ended ~~September 30,~~March 31, ~~2019~~2020 and ~~2018~~2019

The following table reflects our condensed consolidated results of operations in dollar and percentage of revenue terms for the periods indicated:


	Three Months Ended September 30,										Three Months Ended March 31,
(in thousands)	2019					2018					2020					2019

Revenue	$	422,022		100.0	%	$	279,279		100.0	%	$	358,163		100.0	%	$	189,781		100.0	%
Cost of revenue	369,152			87.5	%	252,271			90.3	%	325,122			90.8	%	184,037			97.0	%
Gross profit	52,870			12.5	%	27,008			9.7	%	33,041			9.2	%	5,744			3.0	%
Selling, general and administrative expenses	31,313			7.4	%	16,964			6.1	%	29,484			8.2	%	27,754			14.6	%
Income from operations	21,557			5.1	%	10,044			3.6	%	3,557			1.0	%	(22,010		)	(11.6	)%
Interest expense, net	(13,959		)	(3.3	)%	(1,579		)	(0.6	)%	(16,065		)	(4.5	)%	(10,367		)	(5.5	)%
Other income	4,455			1.1	%	(1,859		)	(0.7	)%
Other expense											(1,102		)	(0.3	)%	(170		)	(0.1	)%
Income from continuing operations before income taxes	12,053			2.9	%	6,606			2.4	%	(13,610		)	(3.8	)%	(32,547		)	(17.1	)%
Provision for income taxes	556			0.1	%	(870		)	(0.3	)%
Benefit for income taxes											867			0.2	%	8,908			4.7	%
Net income	$	12,609		3.0	%	$	5,736		2.1	%	$	(12,743	)	(3.6	)%	$	(23,639	)	(12.5	)%

We review our operating results by reportable segment. See Note 10. Segments in the notes to the condensed consolidated financial statements in Part 1. Financial Statements. Management’s review of reportable segment results includes analyses of trends in revenue and gross profit. The following table presents revenue and gross profit by reportable segment for the periods indicated:



	Three Months Ended March 31,
(in thousands)	2020				2019
Segment	Revenue		% of Total Revenue		Revenue		% of Total Revenue
Renewables	$	248,746	69.5	%	$	74,031	39.0	%
Specialty Civil	109,417		30.5	%	115,750		61.0	%
Total revenue	$	358,163	100.0	%	$	189,781	100.0	%

	Gross Profit		Gross Profit Margin		Gross Profit		Gross Profit Margin
Renewables	$	25,829	10.4	%	$	1,163	1.6	%
Specialty Civil	7,212		6.6	%	4,581		4.0	%
Total gross profit	$	33,041	9.2	%	$	5,744	3.0	%

The following discussion and analysis of our results of operations should be read in conjunction with our condensed consolidated financial statements and the notes relating thereto, included in Item 1 of this Quarterly Report on Form 10-Q.

Revenue. Revenue increased ~~51.1%~~88.7%, or ~~$142.7~~$168.4 million, in the ~~third~~first quarter of ~~2019,~~2020, compared to the same period in ~~2018.~~2019.

Renewables Segment. Renewables revenue was $248.7 million for the first quarter of 2020, as compared to $74.0 million for the same period in 2019, an increase of $174.7 million, or 236.1%. The increase ~~in revenue~~ was primarily due to ~~revenue~~more favorable weather conditions at job sites, the benefit from mobilization of ~~$159.7 million from our acquired businesses, offset by a decrease~~several wind projects at the end of 2019, and an increase in ~~Renewable operations~~the number of ~~$20.0 million due to certain project timelines being delayed.~~projects during the quarter.

~~Cost of revenue.~~ Specialty Civil Segment.~~Cost of~~ Specialty Civil revenue ~~increased 46.3%, or $116.9~~was $109.4 million infor the ~~third~~first quarter of ~~2019,~~2020, as compared to $115.8 million for the same period in ~~2018,~~2019, a decrease of $6.4 million, or 5.5%. The decrease was primarily due to ~~the cost~~a reduction of revenue generated from heavy civil construction related to the completion of ~~$136.8 million from our acquired businesses,~~several civil projects at the end of 2019, offset by ~~a decrease~~higher revenue generated in ~~Renewable operations of $22.5 million due to the timing of projects year over year.~~our rail division.

Gross profit. Gross profit increased ~~95.8%~~475.2%, or ~~$25.9~~$27.3 million, in the ~~third~~first quarter of ~~2019,~~2020, compared to the same period in ~~2018.~~2019. As a percentage of revenue, gross profit was ~~12.5%~~9.2% in the quarter, as compared to ~~9.7%~~3.0% in the prior-year period. The ~~Company's~~first quarter of 2020 gross profit included the impact of recognizing increased potential future costs from the COVID-19 pandemic which reduced gross margin by $5.4 million or 1.2% of revenue.

Renewables Segment. Gross profit was $25.8 million for the first quarter of 2020, as compared to $1.2 million for the same period in 2019. As a percentage of revenue, gross profit was 10.4% in the quarter, as compared to 1.6% in the prior-year period. The increase in gross profit percentage and dollars is related to the increased ~~primarily due~~revenue, coupled with reduced adverse weather conditions in the first quarter of 2020 and a larger number of construction projects. In 2019, the reduction of gross profit dollars and margin was negatively impacted by the completion of six construction projects affected by severe weather in 2018. These six projects together produced as gross margin of 0.9% and comprised 23.1% of 2019 first quarter revenue.

Specialty Civil Segment. Gross profit was $7.2 million for the first quarter of 2020, as compared to $4.6 million for the same period in 2019. As a percentage of revenue, gross profit was 6.6% in the quarter, as compared to 4.0% in the prior-year period. The increase in dollars and percentage was related to higher margins generated on ~~Specialty Civil~~the mix of projects ~~coupled with margin increases related~~under construction in the first quarter 2020 compared to ~~self-performing electrical work on Renewable projects.~~the same period in the prior year.

Selling, general and administrative expenses. Selling, general and administrative expenses increased ~~84.6%~~6.2%, or ~~$14.3~~$1.7 million, in the ~~third~~first quarter of ~~2019,~~2020, compared to the same period in ~~2018.~~2019. Selling, general and administrative expenses were ~~7.4%~~8.2% of revenue in the ~~third~~first quarter of ~~2019,~~2020, compared to ~~6.1%~~14.6% in the same period in ~~2018.~~2019. The increase in selling, general and administrative expenses was primarily driven by ~~$10.8 million~~increased by increased compensation expense related to ~~our acquired businesses coupled~~significantly larger operations in both of the Company's operating segments. In 2019, the percentage of revenue increase was related to higher costs associated with ~~increased administrative labor expense of $5.2 million and intangible asset amortization of $1.5 million, offset by a decrease in merger and~~the Company's acquisition ~~costs of $4.5 million.~~integration costs.

Interest expense, net. Interest expense, net increased by ~~$12.4~~$5.7 million, in the ~~third~~first quarter of ~~2019,~~2020, compared to the same period in ~~2018.~~2019. This increase was primarily driven by ~~the increased borrowings under our lines of credit and term loan in the third and fourth quarter of 2018 related to the acquisitions the Company completed, coupled with~~ accrued dividends on Series B Preferred Stock which are recorded as interest ~~expense.~~expense, offset by the decreased borrowings under our line of credit and term loan in the first quarter of 2020.

Other ~~income (expense).~~expense. Other ~~income~~expense increased by ~~$6.3~~$0.9 million, in the ~~third~~first quarter of ~~2019,~~2020, compared to the same period in ~~2018. The~~2019. This increase was primarily the result of the ~~contingent liability~~ fair value ~~adjustment.~~adjustment related to our Series B Preferred Stock warrants. See further discussion in Note 8.5. Fair Value of Financial Instruments included in Item 1 of this Quarterly Report on Form 10-Q.

~~Provision~~Benefit for income taxes. ~~Income tax provision increased 163.9%~~Benefit for income taxes decreased 90.3%, or ~~$1.4~~$8.0 million, to ~~an expense~~a benefit of ~~$0.6~~$0.9 million in the ~~third~~first quarter of ~~2019,~~2020, compared to ~~$0.9~~a benefit $8.9 million ~~of benefit~~ for the same period in ~~2018.~~2019. The effective tax rates for the period ended ~~September 30,~~March 31, 2020 and 2019 ~~and 2018~~ were ~~(4.6)%~~6.4% and ~~13.2%~~27.4%, respectively. The lower effective tax rate in the ~~third~~first quarter of ~~2019 is~~2020 was primarily attributable to accrued dividends for the Series B Preferred Stock which are recorded as interest expense and not deductible for federal and state income taxes. There were no changes in uncertain tax positions during the periods ended ~~September 30, 2019~~March 31, 2020 and ~~2018.~~2019.

~~Nine Months Ended September 30,~~

Backlog

For companies in the construction industry, backlog can be an indicator of future revenue streams. Estimated backlog represents the amount of revenue we expect to realize from the uncompleted portions of existing construction contracts, including new contracts under which work has not begun and awarded contracts for which the definitive project documentation is being prepared, as well as revenue from change orders and renewal options. Estimated backlog for work under fixed price contracts and cost-reimbursable contracts is determined based on historical trends, anticipated seasonal impacts, experience from similar projects and estimates of customer demand based on communications with our customers. Cost-reimbursable contracts are included in backlog based on the estimated total contract price upon completion.

As of March 31, 2020 and December 31, 2019, our total backlog was approximately $2.0 billion and ~~2018~~$2.2 billion, respectively, compared to $2.2 billion as of March 31, 2019. The decrease is primarily related to the Company's traditional seasonality. The Company expects to recognize revenue related to its backlog of 62.2% for the remainder of 2020, 14.9% in 2021, and 22.9% in 2022.

The following table ~~reflects~~summarizes our ~~consolidated results of operations in dollar~~backlog by segment for March 31, 2020 and ~~percentage of revenue terms for the periods indicated:~~December 31, 2019:

Nine Months Ended September 30,
(in thousands) 2019 2018

Revenue $ 940,793
100.0 % $ 503,487
100.0 %
Cost of revenue 849,728
90.3 % 462,765
91.9 %
Gross profit 91,065
9.7 % 40,722
8.1 %
Selling, general and administrative expenses 84,945
9.0 % 43,122
8.6 %
Income from operations 6,120
0.7 % (2,400 ) (0.5 )%
Interest expense, net (35,822 ) (3.8 )% (3,960 ) (0.8 )%
Other income 22,557
2.4 % (1,848 ) (0.4 )%
Income (loss) from continuing operations before income taxes (7,145 ) (0.8 )% (8,208 ) (1.6 )%
Provision for income taxes 3,073
0.3 % 1,467
0.3 %
Net loss $ (4,072 ) (0.4 )% $ (6,741 ) (1.3 )%



(in millions)
Segments	March 31, 2020		December 31, 2019
Renewables	1,436.0		1,582.5
Specialty Civil	576.6		588.7
Total	$	2,012.6	$	2,171.2

Based on historical trends in the Company’s backlog, we believe awarded contracts to be firm and that the revenue for such contracts will be recognized over the life of the project. Timing of revenue for construction and installation projects included in our backlog can be subject to change as a result of customer delays, regulatory factors and/or other project-related factors. These changes could cause estimated revenue to be realized in periods later than originally expected, or not at all. In the past, we have occasionally experienced postponements, cancellations and reductions on construction projects, due to market volatility and regulatory factors. There can be no assurance as to our customers’ requirements or the accuracy of our estimates. As a result, our backlog as of any particular date is an uncertain indicator of future revenue and earnings.

~~Revenue.~~ ~~Revenue increased 86.9%, or $437.3 million,~~Backlog is not a term recognized under GAAP, although it is a common measurement used in ~~the first nine months of 2019, compared~~our industry. Our methodology for determining backlog may not be comparable to the ~~same period in 2018. The increase in revenue was primarily due to revenue of $404.4 million from our acquired businesses, coupled with increase from organic growth~~methodologies used by others. See ‘‘Item 1A. Risk Factors’’ in our ~~legacy heavy civil operations and approximately $16.5 million of growth in our Renewable~~

operations. The Renewables business has also increased as the demand for renewable energy continues to rise due to the phaseout of the Production Tax Credit extension for wind. Projects that begin construction after December 31, 2019, will no longer be able to claim the credit.

~~Cost of revenue.~~ Cost of revenue increased 83.6%, or $387.0 million, in the first nine months of 2019, compared to the same period in 2018, primarily due to the cost of revenue of $361.9 million from our acquired businesses, coupled with approximately $8.3 million of growth in our Renewable operations.

~~Gross profit.~~ Gross profit increased 123.6%, or $50.3 million, in the first nine months of 2019, compared to the same period in 2018. As a percentage of revenue, gross profit increased to 9.7% in the first nine months of 2019, as compared to 8.1% in the prior-year period. The increase in margin was primarily related to increased gross profit from our acquired businesses of $42.5 million, coupled with a reduction of costs on a disputed project of $8.5 million in 2018. While the Company's gross profit margin increased period over period, it was negatively impacted at September 30, 2019 due to the continuing effort to complete the six projects affected by force majeure weather in the third and fourth quarter of 2018. These six projects created a 0.5% reduction to gross margin in 2019.

~~Selling, general and administrative expenses.~~ Selling, general and administrative expenses increased by 97.0%, or $41.8 million in the first nine months of 2019, compared to the same period in 2018. Selling, general and administrative expenses were 9.0% of revenue in the first nine months of 2019, compared to 8.6% in the same period in 2018. The increase in selling, general and administrative expenses was primarily driven by $30.0 million related to our acquired businesses, coupled with increased administrative labor expense of $11.5 million and intangible asset amortization of $4.8 million, offset by a decrease in merger and acquisition costs of $8.5 million.

~~Interest expense, net.~~ Interest expense, net increased by $31.9 million, in the first nine months of 2019, compared to the same period in 2018. This increase was primarily driven by the increased borrowings under our lines of credit and term loan in the third and fourth quarter of 2018 related to the acquisitions the Company completed, coupled with accrued dividends on Series B Preferred Stock, which are recorded as interest expense.

~~Other income (expense).~~ Other income increased by $24.4 million, in the first nine months of 2019, compared to the same period in 2018. The increase was primarily the result of the contingent liability fair value adjustment. See further discussion in ~~Note 8. Fair Value of Financial Instruments~~ ~~included in Item 1 of this Quarterly~~Annual Report on Form ~~10-Q.~~

~~Provision~~10-K filed with the SEC on March 12, 2020 for ~~income taxes.~~ ~~Income tax benefit decreased by 109.5%, or $1.6 million, to~~ a ~~benefit of $3.1 million in the first nine months of 2019, compared to $1.5 million for the same period in 2018. The effective tax rates for the period ended September 30, 2019 and 2018~~were 43.0% and 15.8%, respectively. The higher effective tax rate in 2019 was primarily attributable to changes from permanent adjustments. There were no changes in uncertain tax positions during the periods ended September 30, 2019 and 2018.

~~Segment Results~~

The Company operated as one reportable segment for 2018 and evaluated the business as a renewable construction company. In late 2018, the Company completed two significant acquisitions that construct projects outsidediscussion of the ~~renewable market. As of September 30, 2019, we operate~~risks associated with our ~~business as two reportable segments: the Renewables segment and the Specialty Civil segment. The 2018 segment presentation has been recast to be consistent to the 2019 segmentation.~~

Each of our reportable segments is comprised of similar business units that specialize in services unique to the respective markets that each segment serves. Driving the end-user focused segments are differences in the economic characteristics of each segment; the nature of the services provided by each segment; the production processes of each segment; and the type or class of customer using the segment’s services.

The classification of revenue and gross profit for segment reporting purposes can at times require judgment on the part of management. Our segments may perform services across industries or perform joint services for customers in multiple industries. To determine reportable segment gross profit, certain allocations, including allocations of shared and indirect costs, such as facility costs, equipment expenses and indirect operating expenses, were made based on segment revenue.

~~The following is a brief description of the Company's reportable segments:~~

The Renewables segment operates throughout the United States and specializes in a range of services that include full EPC project delivery, design, site development, construction, installation and restoration of infrastructure services for the wind and solar industries.backlog.

~~The Specialty Civil segment operates throughout the United States and specializes in a range of services that include:~~

~~Heavy civil construction services such as high-altitude road and bridge construction, specialty paving, industrial maintenance and other local, state and government projects.~~

~~Environmental remediation services such as site development, environmental site closure and outsourced contract mining and coal ash management services.~~

~~Rail Infrastructure services such as planning, creation and maintenance of infrastructure projects for major railway and intermodal facilities construction.~~

~~Segment Revenue~~

~~Revenue by segment were as follows:~~

Three months ended September 30, Nine months ended September 30,
(in thousands) 2019 2018 2019 2018
Segment Revenue % of Total Revenue Revenue % of Total Revenue Revenue % of Total Revenue Revenue % of Total Revenue
Renewables $ 242,654
57.5 % $ 262,477
94.0 % $ 496,863
52.8 % $ 480,362
95.4 %
Specialty Civil 179,368
42.5 % 16,802
6.0 % 443,930
47.2 % 23,125
4.6 %
Total revenue $ 422,022
100.0 % $ 279,279
100.0 % $ 940,793
100.0 % $ 503,487
100.0 %

~~Segment Gross Profit~~

~~Gross profit by segment were as follows:~~

Three months ended September 30, Nine months ended September 30,
(in thousands) 2019 2018 2019 2018
Segment Gross Profit Gross Profit Margin Gross Profit Gross Profit Margin Gross Profit Gross Profit Margin Gross Profit Gross Profit Margin
Renewables $ 27,469
11.3 % $ 24,822
9.5 % $ 45,806
9.2 % $ 37,578
7.8 %
Specialty Civil 25,401
14.2 % 2,186.0
13.0 % 45,259
10.2 % 3,144
13.6 %
Total gross profit $ 52,870
12.5 % $ 27,008
9.7 % $ 91,065
9.7 % $ 40,722
8.1 %

Liquidity and Capital Resources

Overview

~~Historically, our~~Our primary sources of liquidity ~~have been~~are cash flows from operations, our cash balances and availability under our ~~A&R Credit Agreement (as defined herein). Because we have experienced decreased liquidity due to the increase of our required payments and interest under our~~ Third A&R Credit Agreement (as defined here in), acquisition integration costs and delayed collections for costs relating to the multiple severe weather events in the third quarter and fourth quarter of 2018, we sought additional sources of liquidity in 2019 as described above in ~~“-Recent Developments.”~~

We believe these steps will continue to strengthen our balance sheet and provide the financial flexibility we need to execute our future business plan, supporting our recent growth and a larger, more diversified platform. There can be no assurance, however, that these steps will provide the intended benefits. Please see “Part II, Item 1A. Risk Factors.”

Agreement. Our primary liquidity needs are for working capital, debt service, dividends on our Series A Preferred Stock and Series ~~B-1~~B Preferred Stock, ~~and Series B-2 Preferred Stock (collectively referred to as Series B Preferred Stock“),~~ income taxes,

capital expenditures, insurance collateral, and strategic acquisitions. ~~Following the closing of the transactions under the Third Equity Commitment Agreement.~~ As of ~~September 30, 2019,~~March 31, 2020, we had approximately ~~$43.2~~$58.1 million in cash, and ~~$29.0~~$26.3 million availability under our Third A&R Credit Agreement.

We anticipate that our existing cash balances, funds generated from operations, ~~proceeds from the issuance of the Series B Preferred Stock and Series B-3 Preferred Stock,~~ and borrowings will be sufficient to meet our cash requirements for the next twelve months. No assurance can be given, however, that these sources will be sufficient, because there are many factors which could affect our liquidity, including some which are beyond our control. Please see ~~“Item~~“Item 1A. Risk Factors” in ~~Part II to this Quarterly~~our Annual Report on Form ~~10-Q.~~10-K filed with the SEC on March 12, 2020 for a discussion of the risks associated with our liquidity.

Capital Expenditures

For the ~~nine~~three months ended ~~September 30, 2019,~~March 31, 2020, we incurred ~~$5.6~~$5.8 million in finance lease payments and an additional $2.2 million cash purchases for equipment. We estimate that we will spend approximately two percent of revenue for capital

expenditures for ~~2019~~2020 and ~~2020.~~2021. Actual capital expenditures may increase or decrease in the future depending upon business activity levels, as well as ongoing assessments of equipment lease versus buy decisions based on short and long-term equipment requirements.

Working Capital

We require working capital to support seasonal variations in our business, primarily due to the effect of weather conditions on external construction and maintenance work and the spending patterns of our customers, both of which influence the timing of associated spending to support related customer demand. Our business is typically slower in the first quarter of each calendar year. Working capital needs are generally lower during the spring when projects are awarded and we receive down payments from customers. Conversely, working capital needs generally increase during the summer or fall months due to increased demand for our services when favorable weather conditions exist in many of the regions in which we operate. Again, working capital needs are typically lower and working capital is converted to cash during the winter months. These seasonal trends, however, can be offset by changes in the timing of projects, which can be affected by project delays or accelerations and/or other factors that may affect customer spending.

Generally, we receive 5% to 10% cash payments from our customers upon the inception of our Renewable projects. Timing of billing milestones and project close-outs can contribute to changes in unbilled revenue. As of ~~September 30, 2019,~~March 31, 2020, substantially all of our costs in excess of billings and earnings will be billed to customers in the normal course of business within the next twelve months. Net accounts receivable balances, which consist of contract billings as well as costs and earnings in excess of billings and retainage, ~~increased~~decreased to ~~$354.0~~$348.6 million as of ~~September 30, 2019~~March 31, 2020 from ~~$272.5~~$382.9 million as of December 31, ~~2018,~~2019, due primarily to ~~higher~~lower levels of revenue, timing of project activity, and collection of billings to customers.

Our billing terms are generally net 30 days, and some of our contracts allow our customers to retain a portion of the contract amount (generally, from 5% to 10%) until the job is completed. As part of our ongoing working capital management practices, we evaluate opportunities to improve our working capital cycle time through contractual provisions and certain financing arrangements. Our agreements with subcontractors often may contain a ‘‘pay-if-paid’’ provision, whereby our payments to subcontractors are made only after we are paid by our customers.

Sources and Uses of Cash

Sources and uses of cash are summarized below:


	Nine Months Ended September 30,				Three Months Ended March 31,
(in thousands)	2019		2018		2020		2019

Net cash provided by (used in) operating activities	(55,473	)	31,635
Net cash used in operating activities					(74,177	)	(37,547	)
Net cash provided by (used in) investing activities	1,586		(109,140	)	87		(2,063	)
Net cash provided by (used in) financing activities	25,750		108,239		(15,088	)	16,216

Operating Activities. Net cash used in operating activities for the ~~nine~~three months ended ~~September 30, 2019~~March 31, 2020 was ~~$55.5~~$74.2 million, as compared to net cash ~~provided~~used by operating activities of ~~$31.6~~$37.5 million over the same period in ~~2018.~~2019. The ~~decrease~~increase in net cash ~~provided~~used by operating activities reflects the timing of receipts from customers and payments to vendors in the ordinary course of business. The change iswas primarily attributable to ~~$128.4~~$33.5 million related to ~~the significant~~reduced collections of accounts receivable and $31.4 million reduction of ~~accounts payable and accrued liabilities.~~contract liabilities, offset by the decrease in net loss.

Investing Activities. Net cash provided by investing activities for the ~~nine~~three months ended ~~September 30, 2019~~March 31, 2020 was ~~$1.6~~$0.1 million, as compared to net cash used by investing activities of ~~$109.1~~$2.1 million over the same period in ~~2018.~~2019. The increase in net cash provided by investing activities iswas primarily attributable to ~~$106.6 million~~proceeds from the sale of ~~cash used for acquisitions in 2018.~~property, plant and equipment.

Financing Activities. Net cash ~~provided by~~used in financing activities for the ~~nine~~three months ended ~~September 30, 2019~~March 31, 2020 was ~~$25.8~~$15.1 million, as compared ~~$108.2~~to net cash provided by $16.2 million over the same period in ~~2018.~~2019. The ~~change~~reduction of ~~$82.4~~cash provided by financing of activities of $31.3 million iswas primarily attributable to higher proceeds from long-term debt in 2018 of $330.9 million offset by lower merger recapitalization transaction costs of $28.6 million coupled with in 2019, lower debt payments of 108.6 million, proceeds from the issuance of Series B Preferred Stock of $100.0 million and proceeds from a sales leaseback transaction of $24.3 ~~million.~~million and merger recapitalization costs received in 2019.

~~Third A&R Credit Agreement~~

At closing of the CCS acquisition, IEA Services entered into a credit agreement for a new credit facility, which was amended and restated in connection with the closing of the William Charles acquisition, and was further amended and restated on November 16, 2018 (as amended and restated, the “A&R Credit Agreement”). The A&R Credit Agreement provided for a term loan facility of $300.0 million and a revolving line of credit of $50.0 million, which was available for revolving loans and letters of credit.

On May 20, 2019, the Third A&R Credit Agreement (the “Third A&R Credit Agreement”) became effective. The Third A&R Credit Agreement bifurcated the remaining principal amount of the initial term loan facility of $300.0 million (the “Initial Term Loan”) into two tranches: (i) the consenting lender term loan tranche (i.e., lenders that sign the Third A&R Credit Agreements) and (ii) the non-consenting lender term loan tranche (i.e., lenders that do not sign the Third A&R Credit Agreements). The Third A&R Credit Agreements leaves in place the revolving credit facility of $50.0 million (the “Initial Revolving Facility”), which provides for swing line loans of up to $20.0 million (“Swing Line Loans”) and standby and commercial letters of credit. Obligations under the Third A&R Credit Agreement are guaranteed by all of the present and future assets of the Company, Intermediate Holdings (as defined therein) and the Subsidiary Guarantors (as defined therein), subject to customary carve-outs.

~~Interest on the consenting lender term loan tranche accrues at a~~ ~~per annum~~ rate of, at the Company's option, (x) LIBOR plus a margin of 8.25% or (y) an alternate base rate plus a margin of 7.25%; provided, however, that upon achieving a First Lien Net Leverage Ratio (as defined below) of no greater than 2.67:1.00, the margin shall permanently step down to (y) for LIBOR loans, 6.75% and (x) for alternative base rate loans, 5.75%. Interest on the non-consenting lender term loan tranche will stay at a ~~per annum~~ rate of, at the Company’s option, (x) LIBOR plus a margin of 6.25% or (y) an alternate base rate plus a margin of 5.25%. Interest on Initial Revolving Facility borrowings and Swing Line Loans accrues at a rate of, at the Company's option, (x) LIBOR plus a margin of 4.25% or (y) the applicable base rate plus a margin of 3.25%. Default interest will accrue on the obligations at the otherwise applicable rate plus 3%.

The Initial Revolving Facility is required to be repaid and terminated on September 25, 2023. Borrowings under the Initial Revolving Facility will be able to be paid and reborrowed. The Initial Term Loan will mature on September 25, 2024. Borrowings under the Initial Term Loan are required to be repaid on the last business day of each March, June, September and December, continuing with the first fiscal quarter following the effective date of the Third A&R Credit Agreement, in an amount equal to 2.5% of the initial balance of the Initial Term Loan and will not be able to be reborrowed.

Beginning with 2020, an additional annual payment of a percentage of Excess Cash Flow (as defined in the Third A&R Credit Agreement) over the prior year is required on the Initial Term Loan depending upon the First Lien Net Leverage Ratio as of the last day of such year. The First Lien Net Leverage Ratio is defined as the ratio of: (A) the excess of (i) consolidated total debt that, as of such date, is secured by a lien on any asset of property of the Company or any restricted subsidiary that is not expressly subordinated to the lien securing the obligations under the Third A&R Credit Agreement, over (ii) certain net cash as of such date not to exceed $50,000,000, to (B) consolidated EBITDA, calculated on a pro forma basis for the most recently completed measurement period. The required payment percentage of Excess Cash Flow depending upon the First Lien Net Leverage Ratio will be as follows:



~~Required Payment Amount~~	~~Ratio~~
~~100% of Excess Cash Flow~~	~~Greater than 5.00 : 1.00~~
~~75% of Excess Cash Flow~~	~~Less than or equal to 5.00 : 1.00 but greater than 1.76 : 1.00~~
~~50% of Excess Cash Flow~~	~~Less than or equal to 1.76 : 1.00 but greater than 1.26 : 1.00~~
~~25% of Excess Cash Flow~~	~~Less than or equal to 1.26 : 1.00 but greater than 0.76 : 1.00~~
~~0% of Excess Cash Flow~~	~~Less than or equal to 0.76 : 1.00~~

~~Under the Third A&R Credit Agreement, the Company will be required to not permit the First Lien Net Leverage Ratio, as of the last day of any consecutive four fiscal quarter period to be greater than:~~



~~Measurement Period~~	~~Ratio~~
~~From and after fiscal quarter ending March 31, 2019 through December 31, 2019~~	~~4.75 : 1.00~~
~~From and after fiscal quarter ending March 31, 2020 through December 31, 2020~~	~~3.50 : 1.00~~
~~From and after fiscal quarter ending March 31, 2021 through December 31, 2021~~	~~2.75 : 1.00~~
~~From and after the fiscal quarter ending March 31, 2022~~	~~2.25 : 1.00~~

Under the Third A&R Credit Agreement, the Company is not able to utilize an equity infusion to cure a covenant violation in any quarter ending in 2019, excluding the Series B Preferred Stock. Thereafter, the Company will have access to a customary equity cure.

In addition, the Company and Borrower are subject to affirmative covenants, including, but not limited to, requiring (i) delivery of financial statements, budgets and forecasts; (ii) delivery of certificates and other information; (iii) delivery of notices (of any default, force majeure event, material adverse condition, ERISA event, material litigation or material environmental event); (iv) payment of tax obligations; (v) preservation of existence; (vi) maintenance of properties; (vii) maintenance of insurance; (viii) compliance with laws; (ix) maintenance of books and records; (x) inspection rights; (xi) use of proceeds; (xii) covenants to guarantee obligations and give security; (xiii) compliance with environmental laws; and (xiv) ongoing communication with the Lenders (as defined therein).

The Company and Borrower are also subject to additional negative covenants, some of which will include less flexibility than the corresponding negative covenants in the A&R Credit Agreement, including, but not limited to, restrictions (subject to certain exceptions) on (i) liens; (ii) indebtedness (including guarantees and other contingent obligations); (iii) investments (including loans, advances and acquisitions); (iv) mergers and other fundamental changes; (v) sales and other dispositions of property or assets; (vi) payments of dividends and other distributions and share repurchases; (vii) changes in the nature of the business; (viii) transactions with affiliates; (ix) burdensome agreements; (x) payments and modifications of certain debt instruments; (xi) changes in fiscal periods; (xii) amendments of organizational documents; (xiii) division/series transactions; and (xiv) sale and lease-back transactions.

Events of default under the Third A&R Credit Agreement include, but are not limited to, (i) failure to pay any principal or interest when due; (ii) any material breach of the representations and warranties made in the Third A&R Credit Agreement; (iii) failure to obverse or perform covenants; and (iv) certain events of bankruptcy and judgements. Upon any event of default, the Lenders will be permitted to cease making loans, declare the unpaid principal amount of all outstanding loans and all other obligations immediately due and payable, enforce liens and security interests, and exercise all other rights and remedies available under the loan documents or applicable law.

Series A Preferred Stock

As of ~~September 30, 2019,~~March 31, 2020, we had ~~34,965~~17,483 shares of Series A Preferred Stock ~~outstanding,~~ with ~~each share having~~ an initial stated value of $1,000 per share plus accumulated ~~but unpaid~~ dividends. Dividends are paid on the Series A Preferred Stock as, if and when declared by our Board. To ~~the maximum~~ extent permitted, ~~by the terms of the Series B Preferred Stock and the Third A&R Credit Agreement,~~ dividends are required to be ~~declared and~~ paid in cash quarterly in arrears on each March 31, June 30, September 30 and December 31 on the stated value at ~~the following rates:~~

•~~6% per annum from the original issuance~~a rate of ~~the Series A Preferred Stock on March 26, 2018 (the “Closing Date”) until the date (the “18 Month Anniversary Date”) that is 18 months from the Closing Date; and~~

•10% ~~per annum during the period from and after the 18 Month Anniversary Date;~~

So long as any shares of Series B Preferred Stock are outstanding or from and after the occurrence of any non-payment event or default event and until cured or waived, the foregoing rates will increase by 2% per annum.

If not paid in cash, dividends will accrue on the stated value and will increase the stated value on and effective as of the applicable dividend date without any further action by the Board at 12% per annum. On March 31, 2020, dividends with respect to the ~~following rates:~~quarter accrued at a rate of 12% and increased the stated value.

•~~8% per annum during~~So long as any shares of Series B Preferred Stock of the ~~period~~Company are currently outstanding or from ~~May 20, 2019 through the 18 Month Anniversary Date; and~~

•~~12% per annum during the period from and after the 18 Month Anniversary Date.~~

~~From~~ and after the occurrence of any non-payment event or default event and until cured or waived, the foregoing rates will increase by ~~two percent (2%)~~2% per annum.

The Series A Preferred Stock do not have a scheduled redemption date or maturity date. Subject to the terms of the Series B Preferred Stock, we may, at any time and from time to time, redeem all or any portion of the shares of Series A Preferred Stock then outstanding. As a condition to the consummation of any change of control (as described in the certificate governing the Series A Preferred Stock), we are required to redeem all shares of Series A Preferred Stock then outstanding. We are also required to use the net cash proceeds from certain transactions to redeem the maximum number of shares of Series A Preferred Stock that can be redeemed with such net cash proceeds, except as prohibited by the Third A&R Credit Agreement.

~~The dividends with respect to each share~~Based on the stated value of the Series A Preferred Stock ~~for the dividend periods ended on December 31, 2018 are deemed to have accrued at a rate~~as of ~~6%. The~~ March 31, ~~2019, June 30, 2019 and until September 26, 2019,~~2020 after giving effect to the accrual of dividends, ~~have accrued at a rate~~we would be required to pay quarterly cash dividends in the aggregate of ~~8% and all dividends have increased~~$2.5 million on the ~~stated value as of such respective dates. Following September 26, 2019, dividends accrued at a rate of 12% annum and if~~Series A Preferred Stock. If our business does not generate enough cash to ~~make the~~pay future cash dividends, the dividends will accrue at ~~that~~a rate of 12% per annum and increase the stated value of the Series A Preferred Stock, which will make cash dividends on the Series A Preferred Stock more difficult for us to make in the future. We do not presently expect to pay cash dividends, although an actual decision regarding payment of cash dividends on the Series A Preferred Stock will be made at the time of the applicable dividend payment based upon availability of capital resources, business conditions, other cash requirements, and other relevant factors.

We expect that 50% of the issued and outstanding Series A Preferred Stock will be exchanged for Series B-3 Preferred Stock and Warrants at the Initial Closing under the Third Equity Commitment Agreement. Please see ~~“Recent Developments-Preferred Stock Exchange Agreement.”~~

Series B Preferred Stock

As of ~~September 30, 2019,~~March 31, 2020, we had ~~100,000~~199,474 shares of Series B Preferred Stock outstanding, with each share having an initial stated value of $1,000 plus accumulated ~~but unpaid~~ dividends. Our common stock and Series A Preferred Stock are junior to the Series B Preferred Stock. Dividends are paid in cash on the Series B Preferred Stock as, if and when declared by our Board. To the extent not prohibited by applicable law, dividends are required to be declared and paid in cash quarterly in arrears on each March 31, June 30, September 30 and December ~~31 at the following rates:~~

~~On Series B-1 Preferred Stock with respect to any~~31. Any dividend period for which the Total Net Leverage Ratio ~~(as defined in the Third A&R Credit Agreement (as defined herein))~~ is greater than ~~1.50 to~~ 1.50:1.00, ~~15% per annum (or~~the dividend rate is 13.5% per annum ~~if a deleveraging event (as defined in the certificate governing the Series B Preferred Stock)) has occurred prior to the date dividends are paid with respect to such dividend period)~~ and (ii) with respect to any dividend period for which the Total Net Leverage Ratio is less than or equal to ~~1.50 to~~ 1.50:1.00, ~~13.5% per annum.~~

~~On Series B-2 Preferred Stock with respect to any dividend period for which the Total Net Leverage Ratio is greater than 1.50 to 1.00, 15% per annum (or 13.5% per annum if~~at a deleveraging event has occurred prior to the date dividends are paid with respect to such dividend period) and (ii) with respect to any dividend period for which the Total Net Leverage Ratio is less than or equal to 1.50 to 1.00,rate of 12% per annum.

If not paid in cash, dividends will accrue on the stated value and will increase the stated value on Series B Preferred Stock and is effective as of the applicable dividend date without any further action by the Board at a rate of ~~18% per annum; provided that, during~~15%. On March 31, 2020, dividends with respect to the ~~period from~~quarter accrued at a rate of 15% and increased the occurrence of a deleveraging event until the date that is two years from the occurrence of such deleveraging event, such dividend rate shall instead be fifteen percent (15%) per annum; provided, further, that, from and after the occurrence of any non-payment event or default event and until cured or waived, the foregoing rates will increase by two percent (2%) per annum.

stated value.

Until the Series B Preferred Stock is redeemed, neither we nor any of our subsidiaries can declare, pay or set aside any dividends on shares of any other class or series of capital stock, except in limited circumstances. We are required to redeem all shares of Series B Preferred Stock outstanding on February 15, 2025 at the then stated value plus all accumulated and unpaid dividends thereon through the day prior to such redemption. Subject to compliance with the terms of any credit agreement, we are also required to redeem all of the Series B Preferred Stock as a condition to the consummation of certain changes in control (as defined in certificate governing the Series B Preferred Stock), as well as use the net cash proceeds from certain transactions to redeem shares of Series B Preferred Stock.

~~The September 30, 2019 dividends have accrued at a rate of 18% and the dividend has increased~~Based on the stated value of the Series B Preferred Stock as of ~~such that respective date.~~March 31, 2020 after giving effect to the accrual of dividends, we would be required to pay quarterly cash dividends in the aggregate of $18.3 million on the Series B Preferred Stock. If our business does not generate enough cash to ~~make the~~pay future cash dividends, the dividends will accrue at a rate of ~~18%~~15% per annum and increase the stated value of the Series BA Preferred Stock, which will make cash dividends on the Series B Preferred Stock more difficult for us to make in the future. We do not presently expect to pay cash dividends, although an

actual decision regarding payment of cash dividends on the Series B Preferred Stock will be made at the time of the applicable dividend payment based upon availability of capital resources, business conditions, other cash requirements, and other relevant factors.

~~We expect to issue 80,000 shares of Series B-3 Preferred Stock in connection with the closing of the transaction under the Third Equity Commitment Agreement. Please see~~ ~~“Recent Developments-Third Equity Commitment Agreement.”~~

~~Letters of Credit and Surety Bonds~~

In the ordinary course of business, the Company is required to post letters of credit and surety bonds to customers in support of performance under certain contracts. Such letters of credit are generally issued by a bank or similar financial institution. The letter of credit or surety bond commits the issuer to pay specified amounts to the holder of the letter of credit or surety bond under certain conditions. If the letter of credit or surety bond issuer were required to pay any amount to a holder, the Company would be required to reimburse the issuer, which, depending upon the circumstances, could result in a charge to earnings. As of September 30, 2019 and December 31, 2018, the Company was contingently liable under letters of credit issued under its revolving credit facility or its old credit facility, respectively, in the amount of $21.0 million and $3.0 million, respectively, related to projects. In addition, as of September 30, 2019 and December 31, 2018, the Company had outstanding surety bonds on projects of $2,017.6 million and $1,682 million, respectively, including the bonding line of the acquired ACC Companies and Saiia.

Contractual Obligations

The following table sets forth our contractual obligations and commitments for the periods indicated as of ~~September 30, 2019.~~March 31, 2020.


	Payments due by period														Payments due by period
(in thousands)	Total		Remainder of 2019		2020		2021		2022		2023		Thereafter		Total		Remainder of 2020		2021		2022		2023		2024		Thereafter

Debt (principal) ⁽¹⁾	385,643		7,988		30,824		30,110		29,711		29,419		257,591		366,046		1,365		1,228		15,859		29,735		129,104		188,755
Debt (interest) ⁽²⁾	110,170		7,488		27,584		24,356		21,234		18,130		11,378		110,170		7,488		27,584		24,356		21,234		18,130		11,378
Capital leases ⁽³⁾	73,908		5,977		25,164		21,716		17,565		3,486		—
Finance leases ⁽³⁾															65,574		20,035		22,344		18,302		4,108		628		157
Operating leases ⁽⁴⁾	51,180		2,486		9,066		7,158		5,683		3,990		22,797		59,669		9,784		11,242		8,846		6,220		3,116		20,461
Total	$	620,901	$	23,939	$	92,638	$	83,340	$	74,193	$	55,025	$	291,766	$	601,459	$	38,672	$	62,398	$	67,363	$	61,297	$	150,978	$	220,751


(1)	Represents the contractual principal payment due dates on our outstanding debt, including the convertible debt - Series B Preferred with expected redemption date of February 15, 2025. Future declared dividends have been excluded, as payment determination will be evaluated each quarter resulting in differing accumulated dividend rates.


(2)	Includes variable rate interest using ~~September 30, 2019~~March 31, 2020 rates.

(3)

We have obligations, exclusive of associated interest, recognized under various ~~capital~~finance leases for equipment totaling ~~$73.9~~$65.6 million at ~~September 30, 2019.~~March 31, 2020. Net amounts recognized within property, plant and equipment, net in the condensed consolidated balance sheet under these ~~capitalized~~financed lease agreements at ~~September 30, 2019~~March 31, 2020 totaled ~~$90.3~~$78.5 million.


(4)	We lease real estate, vehicles, office equipment and certain construction equipment from unrelated parties under non-cancelable leases. Lease terms range from month-to-month to terms expiring through 2038. ~~The increase from December 31, 2018 is related to two sale leaseback transactions on property acquired through the acquisitions.~~

For detailed discussion and additional information pertaining to our debt instruments, see Note 9.6. Debt and Note 7. Commitments and Contingencies in the ~~Notes~~notes to condensed consolidated financial statements, included in Item 1.

Off-Balance Sheet Arrangements

As is common in our industry, we have entered into certain off-balance sheet arrangements in the ordinary course of business. Our significant off-balance sheet transactions include liabilities associated with ~~non-cancelable operating leases,~~ letter of credit obligations, surety and performance and payment bonds entered into in the normal course of business, liabilities associated with deferred compensation plans, liabilities associated with certain indemnification and guarantee arrangements.

As of March 31, 2020 and December 31, 2019, the Company was contingently liable under letters of credit issued under its revolving credit facility or its old credit facility, respectively, in the amount of $23.7 million and $21.0 million, respectively, related to projects.

As of March 31, 2020 and December 31, 2019, the Company had outstanding surety bonds on projects of $2.5 billion and $2.4 billion, respectively, including the bonding line of the acquired ACC Companies and Saiia.

See Note ~~10. Commitments and Contingencies~~6. Debt in the ~~Notes~~notes to condensed consolidated financial statements, included in Item 1 of this Quarterly Report on Form 10-Q, for discussion pertaining to our off-balance sheet arrangements. See Note 1. Business, Basis of Presentation and Summary of Significant Accounting Policies and Note ~~14.~~11. Related Party Transactions in the ~~Notes~~notes to condensed consolidated financial statements, included in Item 1, for discussion pertaining to certain of our investment arrangements.

~~Backlog~~

As of September 30, 2019 and December 31, 2018, our total backlog was approximately $2.6 billion and $2.1 billion, respectively, compared to $1.3 billion as of September 30, 2018. The $1.3 billion increase is primarily related to $444.6 million of backlog related to our acquisitions coupled with $855.4 million of an increase in backlog related to our legacy IEA business. The Company expects to recognize revenue related to its backlog of 19% for the remainder of 2019, 57% in 2020, and 24% in 2021.

~~The following table summarizes our backlog by segment for September 30, 2019:~~

(in millions)
Segments September 30, 2019 December 31, 2018
Renewables 1,865.5
1,246.8
Specialty Civil 684.7
868.8
Total $ 2,550.2
$ 2,115.6

Backlog is not a term recognized under GAAP, although it is a common measurement used in our industry. Our methodology for determining backlog may not be comparable to the methodologies used by others. See ‘‘~~Item 1A. Risk Factors’’ in our Annual Report on Form 10-K filed with the SEC on March 14, 2019 for a discussion of the risks associated with our backlog.~~

Recently Issued Accounting Pronouncements

See Note 1. Business, Basis of Presentation and Summary of Significant Accounting Policies in the ~~Notes~~notes to ~~Condensed Consolidated Financial Statements,~~condensed consolidated financial statements, included in Item 1.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Credit Risk

We are subject to concentrations of credit risk related to our net receivable position with customers, which includes amounts related to billed and unbilled accounts receivable and costs and earnings in excess of billings (‘‘CIEB’’) on uncompleted contracts net of advanced billings with the same customer. We grant credit under normal payment terms, generally without collateral, and as a result, we are subject to potential credit risk related to our customers’ ability to pay for services provided. This risk may be heightened if there is depressed economic and financial market conditions. However, we believe the

concentration of credit risk related to billed and unbilled receivables and costs and estimated earnings in excess of billings on uncompleted contracts is limited because of the ~~diversity~~lack of concentration and the high credit rating of our customers.

Interest Rate Risk

Borrowings under the new credit facility and certain other borrowings are at variable rates of interest and expose us to interest rate risk. If interest rates increase, our debt service obligations on the variable rate indebtedness will increase even though the amount borrowed remains the same, and our net income and cash flows, including cash available for servicing our indebtedness, will correspondingly decrease. The outstanding debt balance as of ~~September 30, 2019~~March 31, 2020 was ~~385.6~~$177.3 million. A one hundred basis point change in the LIBOR rate would increase or decrease interest expense by ~~$3.9~~$1.8 million. As of ~~September 30, 2019,~~March 31, 2020, we had no derivative financial instruments to manage interest rate risk.

Item 4. Control and Procedures

Attached as exhibits to this Quarterly Report on Form 10-Q are certifications of IEA’s Chief Executive Officer and Chief Financial Officer that are required in accordance with Rule 13a-14 of the Exchange Act of 1934. This section includes information concerning the controls and controls evaluation referred to in the certifications, and it should be read in conjunction with the certifications.

Evaluation of Disclosure Controls and Procedures

Our management has established and maintains a system of disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act, such as this Quarterly Report, is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms. The disclosure controls and procedures are also designed to provide reasonable assurance that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

As of the end of the period covered by this Quarterly Report, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15(b) of the Exchange Act. This evaluation was carried out under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer. Based on this evaluation, these officers have concluded that, as of ~~September 30, 2019,~~March 31, 2020, our disclosure controls and procedures were effective.

Changes in Internal Control over Financial Reporting

~~There~~As previously discussed in Item 2. Management Discussion and Analysis, the Company is using remote technology for employees working from home due to COVID-19. Although certain employees are working remotely, there has been no change in our internal control over financial reporting during the quarter ended ~~September 30, 2019,~~March 31, 2020, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Part II. OTHER INFORMATION

Item 1A. Risk Factors

At ~~September 30, 2019,~~March 31, 2020, there have been no other material changes from the risk factors previously disclosed in the Company's Annual Report on Form 10-K filed with the SEC on March ~~14, 2019,~~12, 2020, which is accessible on the SEC's website at www.sec.gov, except as described ~~in our Quarterly Report on Form 10-Q for the quarters ended March 31, 2019 and June 30, 2019 and~~ below.

The ~~transactions under~~ultimate effects of the ~~Third~~current COVID-19 pandemic are unknown and evolving, and could result in negative effects on our business, financial condition, results of operations and prospects.

The COVID-19 pandemic is a rapidly developing situation around the globe that has adversely impacted economic activity and conditions in the United States and worldwide. In particular, efforts to control the spread of COVID-19 have led to local and worldwide shutdowns and stay-at-home orders, stock price declines, employee layoffs, and governmental programs to support the economy.

The COVID-19 pandemic could affect us in a number of other ways, including but not limited to:

Inability to properly staff our construction projects due to quarantines and stay at home orders.

Inabilities of customers to fund project obligations due to liquidity issues.

Termination or delay in project construction at our customers’ discretion due to financial uncertainties.

Inability of, or delays by, our subcontractors to deliver equipment and services.

Restrictions on our ability to obtain new business if our customer base is financially constrained.

Inability to obtain bonding from our sureties due to tightening of credit markets.

Decrease in demand for civil construction resulting from corresponding decreases in federal, state and local budgets.

Each of the foregoing would cause project delays, force majeure events and project terminations which could negatively impact our ability to recognize revenues and bill our customers for current costs. In addition, if our customers are unable to finance new projects as a result of their liquidity issues during and in the aftermath of the pandemic, our business outlook will be negatively impacted. A prolonged continuation of the COVID-19 pandemic, or a resurgence of the pandemic even if the current pandemic is significantly reduced, could also result in additional impacts to our business, financial condition, results of operations and prospects. The ultimate effects of the COVID-19 pandemic are unknown at this time. We are continuing to monitor developments but cannot predict at this time whether COVID-19 will have a material impact on our business, financial condition or results of operations.

Item 5. Other Information

Amendment to Equity Commitment Agreement ~~are subject to material closing conditions. We cannot provide any assurance that we will be able to consummate the transactions under the Third Equity Commitment Agreement.~~

~~As described above,~~On May 6, 2020, the Company entered into an Amendment (the “Amendment”) to the ~~Third~~ Equity Commitment Agreement, ondated as of October 29, 2019 ~~pursuant to which~~(the “Equity Commitment Agreement”) by and among the Company, ~~agreed~~each Commitment Party (as defined in the Equity Commitment Agreement), Oaktree Power Opportunities Fund III Delaware, L.P., a Delaware limited partnership, Infrastructure and Energy Alternatives, LLC, a Delaware limited liability company and OT POF IEA Preferred B Aggregator, L.P., a Delaware limited partnership.

The Amendment amends the Equity Commitment Agreement to ~~issue~~extend the period of time the Backstop Parties (as defined in the Equity Commitment Agreement) may be required to enter into the 2020 Commitment (as defined in the Equity Commitment Agreement) and ~~sell 80,000~~purchase additional shares of Series B-3 Preferred Stock and 3,568,750 Warrants to Ares for an aggregate purchase price of $80.0 million (the “Initial Closing”). Consummation of the Initial Closing is expected to occur within 12 business days of the execution of the Third Equity Commitment Agreement.

After the Initial Closing, two third parties to the Third Equity Commitment Agreement are each required, subject to certain conditions, to purchase up to an additional 15,000 shares (collectively 30,000 shares) of Series B-3 Preferred Stock and 515,625 Warrants (collectively 1,031,250 Warrants), if, by certain agreed upon dates,warrants from the Company ~~has not repaid at least an additional $30.0 million under its term loan using excess cash~~to July 14, 2020, or such other date as mutually agreed between the Backstop Parties and ~~proceeds from~~ the ~~Rights Offering.~~Company. Additionally, the Amendment clarifies that, after giving effect to reductions in the commitment amount to date, the 2020 Commitment shall in no event exceed $5,650,000.

The Initial Closing under the Third Equity Commitment Agreement is subject to various material closing conditions, including, but not limited to, that no material adverse effect shall have occurred, the receipt of applicable government approvals, no law or order being an impediment to consummationforegoing description of the ~~transactions, accuracy~~Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the ~~representations~~Amendment, which is filed herewith as Exhibit 10.1 and ~~warranties set forth~~is incorporated in this “Item 5. - Other Information” by reference.

Amended and Restated Annual Incentive Compensation Program

On May 6, 2020, the Equity Commitment Agreement, compliance with covenants, review by NASDAQ, the closing of the transactions under the Exchange Agreement (as defined below), the filing of a certificate of designation for the Series B-3 Preferred Stock, the filing ofCompany adopted an amended and restated ~~certificate~~annual incentive compensation program (the “A&R AICP”), which amends and restates the Company’s current annual incentive compensation program. The purpose of ~~designations~~the A&R AICP is to encourage excellence and high levels of performance, emphasize safety as a key goal, recognize the contributions of key employees to the overall profitability and safety of the Company, and encourage key employees to cooperate, share information and work together for the ~~Series B-1 Preferred Stock and Series B-2 Preferred Stock with the Secretary of State~~overall benefit of the ~~State~~Company and its shareholders.

The A&R AICP provides for potential cash bonuses to eligible participants based upon achievement of ~~Delaware,~~one or more performance criteria, including Adjusted EBITDA on a consolidated basis, free cash flow, target total reportable incident rate on a consolidated basis or a business unit or operating company division basis, and target gross profit on a business unit or operating company division basis. The Compensation Committee of the ~~Company’s~~Board of Directors of the Company (the “Committee”) is delegated authority to determine target bonus awards, the performance criteria that will be used to determine the payment of expenses. There can be no assurance that we will be able to consummate the Initial Closing under the Third Equity Commitment Agreement. Furthermore, there can be no assurance that even if the Initial Closing is consummated, that we will be able to consummate the additional issuances of Series B-3 Preferred Stock and Warrants.

~~Our common stockholders may face substantial dilution~~target bonuses, as ~~a result of warrants.~~

On May 20, 2019, under the First Equity Commitment Agreement, we issued Warrants exercisable into an aggregate of 2,545,934 shares of common stock, which equaled approximately ten percent (10%) of our fully diluted issued and outstanding common stockwell as ~~of such date. In addition to the Warrants issued on May 20, 2019, we are required to issue under the First Equity Commitment Agreement additional Warrants:~~

for up to an additional six percent (6.0%) of the fully diluted issued and outstanding common stock depending upon our financial performance measured on the last calendar day of May 2020 through the last calendar day of April 2021;

~~upon the issuance of additional shares of common stock under the merger agreement from our business combination;~~

~~upon conversion of Series A Preferred Stock into common stock;~~

~~upon the exercise of certain existing Warrants; and~~

~~upon exercises by third parties of equity issued under the Company’s long term incentive plan.~~

On August 30, 2019, under the Second Equity Commitment Agreement, we issued Warrants exercisable into an aggregate of 900,000 shares of common stock. In addition to the Warrants issued on August 30, 3019, are required to issue under the Second Equity Commitment Agreement additional Warrants:

for up to an additional 6% of the fully diluted issued and outstanding common stock depending upon our financial performance measured on the last calendar day of May 2020 through the last calendar day of April 2021.

~~upon the issuance of additional shares of common stock under the merger agreement from our business combination;~~

~~upon conversion of Series A Preferred Stock into common stock;~~

~~upon the exercise of certain existing Warrants; and~~

~~upon exercises by third parties of equity issued under the Company’s long term incentive plan~~

We also expect to issue 3,568,750 Warrants in connection with the Initial Closing under the Third Equity Commitment Agreement. In addition to the Warrants issued at the Initial Closing under the Third Equity Commitment Agreement, we may be required to issue additional Warrants:

~~upon the issuance of additional shares of common stock under the merger agreement from our business combination;~~

~~upon conversion of Series A Preferred Stock into common stock;~~

~~upon the exercise of certain existing Warrants;~~

~~upon exercises by third parties of equity issued under the Company’s long term incentive plan;~~

~~for additional issuances of common stock during certain periods specified in the Third Equity Commitment Agreement; and~~

~~for issuance of additional Warrants issued under the First Equity Commitment Agreement.~~

~~We may also be required to issue further 1,031,250 Warrants in connection with further commitments under the Third Equity Commitment Agreement as described above.~~

~~In certain instances, the timing and number of additional Warrants~~any minimum or maximum thresholds that may be ~~issued is unknown and dependent upon future events and circumstances, some of which are outside of our control.~~

~~The Warrants issued under~~used in determining the First Equity Commitment Agreement and Second Equity Commitment Agreement are, and we expect the Warrants to be issued under the Third Equity Commitment Agreement to be, exercisable into our common stock at an exercise price per share of $0.0001, which the holder may pay by check or wire transfer, or by instructing us to withhold a number of shares of common stock then issuable upon exercise of the Warrant with an aggregate fair market value as of the date of exercise equal to the aggregate exercise price, or any combination of the foregoing. The number of shares of common stock issuable upon exercise of the Warrants adjust for dividends, subdivisions or combinations; cash distributions or other distributions; reorganization, reclassification, consolidation or merger; and spin-offs.

The shares of common stock that may be issued under the Warrants pursuant to the First Equity Commitment Agreement and Second Equity Commitment Agreement are subject to that certain Amended and Restated Registration Rights Agreement, dated March 26, 2018, as amended (the “Registration Rights Agreement”), and accordingly, we may be required to register the shares of common stock underlying the Warrants for resale. We also anticipate that the Warrants issued under the Third Equity Commitment Agreement will be subject to registration rights under an amendment to the Registration Rights Agreement.

Accordingly, our presently existing Warrants and Warrants that may be issued in the future may result in substantial additional issuances and resales of common stock. Additional issuances of common stock, and/or sales of common stock, would have the effect of diluting our earnings per share as well as our existing shareholders’ individual ownership percentages and could lead to volatility in our common stock price. Sales of a substantial number of shares of our common stock could depress the market price of our common stock and impair our ability to raise capital through the sale of additional equity or equity-linked securities.

~~The Series A Preferred Stock may result in substantial dilution to holders of our common stock.~~

As of September 30, 2019, we had 34,965 shares of Series A Preferred Stock outstanding. Any holder of Series A Preferred Stock may elect, by written notice to us (w) at any time and from time to time on or after the third anniversary of the initial issuance of the Series A Preferred Stock (the “Closing Date”), (x) at any time and from time to time if the terms of the Series B Preferred Stock or Third A&R Credit Agreement (or other facility) would prohibit the payment of cash dividends, (y) at any time any shares of Series B Preferred Stock are outstanding, or (z) at any time and from time to time on or after the non-payment of dividends when due, failure to redeem shares of Series A Preferred Stock when required or any other material default (in each case, as further specified in the certificate) until such non-payment, failure or default is cured by us, to cause us to convert, without the payment of additional consideration by such holder, all or any portion of the issued and outstanding shares of Series A Preferred Stock held by such holder, as specified by such holder in such notice, into a number of shares of common stock determined by dividing (i) the stated value by (ii) the VWAP per share of common stock for the 30 consecutive trading days ending on the trading day immediately preceding the conversion date. In the event the Series A Preferred Stock is converted following an uncured non-payment, failure or default event, or if a holder of Series A Preferred Stock is converting pursuant to (x) or (y) above, for the purposes of the foregoing calculation, VWAP per share shall be multiplied by 90%. The “VWAP per share” is defined as the per share volume-weighted average price as reported by Bloomberg (as further described in the certificate governing the Series A Preferred Stock).

The shares of common stock that may be issued upon conversion of the Series A Preferred Stock are subject to the Registration Rights Agreement, and accordingly, we may be required to register the shares of common stock underlying the Series A Preferred Stock for resale.

Accordingly, the Series A Preferred Stock may result in substantial additional issuances and resales of common stock. The timing and number of shares of common stock that may be issued as a result of the Series A Preferred Stock is unknown and dependent upon future events and circumstances, some of which are outside of our control. Additional issuances of common stock, and/or sales of common stock, would have the effect of diluting our earnings per share as well as our existing shareholders’ individual ownership percentages and could lead to volatility in our common stock price. Sales of a substantial number of shares of our common stock could depress the market price of our common stock and impair our ability to raise capital through the sale of additional equity or equity-linked securities.

Although Oaktree, as the holder of all of the Series A Preferred Stock, has agreed to exchange 50% of its Series A Preferred Stock for Series B-3 Preferred Stock, the remaining outstanding Series A Preferred Stock may still result in substantial dilution.

Our Third A&R Credit Agreement, the Series A Preferred Stock and Series B-1 and Series B-2 Preferred Stock impose restrictions on us that may prevent us from engaging in transactions that might benefit us.

~~The Third A&R Credit Agreement contains restrictions that, among other things prevents or restricts us from:~~

~~engaging in certain transactions with affiliates;~~

~~buying back shares or paying dividends in excess of specified amounts;~~

~~making investments and acquisitions in excess of specified amounts;~~

~~incurring additional indebtedness in excess of specified amounts;~~

~~creating certain liens against our assets;~~

~~prepaying subordinated indebtedness;~~

~~engaging in certain mergers or combinations;~~

~~failing to satisfy certain financial tests; and~~

~~engaging in transactions that would result in a ‘‘change of control.’’~~

Additionally, the holders of our Series A Preferred Stock and Series B-1 and B-2 Preferred Stock have the right to consent to certain actions prior to us undertaking them, including, but not limited to:

~~creating or authorizing any senior stock, parity stock and stock that votes together with the Series A Preferred Stock or Series B Preferred Stock, or capital stock of a subsidiary;~~

reclassifications, alterations or amendments of any of our capital stock or of our subsidiaries that would render such capital stock senior or on parity to the Series A Preferred Stock or Series B Preferred Stock;

entering into any agreement with respect to, or consummating, any merger, consolidation or similar transaction with any other person pursuant to which we our a subsidiary of ours would not be the surviving entity, if as a result of such transaction, any capital stock or equity or equity-linked securities of such person would rank senior to or pari passu with the Series A Preferred Stock or Series B Preferred Stock;

entering certain agreements with respect to, or consummating, any merger, consolidation or similar transaction with any other person pursuant to which we or a subsidiary of ours would not be the surviving entity, if as a result of such transaction, any capital stock or equity or equity-linked securities of such person would rank senior to or on parity with such Series A Preferred Stock or Series B Preferred Stock;

~~assuming, incurring or guarantying, or authorizing the creation, assumption, incurrence or guarantee of, any indebtedness for borrowed money (subject to certain exceptions);~~

~~authorizing or consummating certain change of control events or liquidation events; or~~

altering, amending, supplementing, restating, waiving or otherwise modifying the certificates governing the Series A Preferred Stock or Series B Preferred Stock or any other of our documents in a manner that would reasonably be expected to be materially adverse to the rights or obligations of the holders of Series A Preferred Stock or Series B Preferred Stock.

~~The Series B-3 Preferred Stock to be issued under the Third Equity Commitment Agreement will contain additional consent rights, including with respect to:~~

~~increasing the size of the Board;~~

~~conducting any business or enter into or conduct any transaction or series of transaction with, or for the benefit of, any affiliate of the Company, subject to limitations;~~

~~entering into any transaction, contract, agreement or series of related transactions, contracts, or agreement with respect to the provision of services to customers exceeding certain amounts; or~~

with respect to SAIIA Holdings, LLC (“SAIIA”), subject to certain limitations: (i) entering into any agreement with respect to, or consummate any, merger, consolidation or similar transaction with SAIIA or any of its subsidiaries, (ii) assuming, incurring or guaranteeing, or authorizing the creation, assumption, incurrence or guarantee of any indebtedness by, or for the benefit of SAIIA or any of its subsidiaries, (iii) creating, incurring, assuming or suffering to exist any lien upon oramount earned with respect to any property or assets for the benefit of SAIIA or any of its subsidiaries or security any obligations of SAIIA or any of its subsidiaries above certain limits, (iv) consummating any sale, lease, transfer, issuance or other disposition, including by means of a merger, consolidation or similar transaction, of any shares of capital stock of a subsidiary or any other assetsspecific performance criteria. The Committee may assign participants into different classes, with each class being subject to different target bonuses, performance criteria, and weightings.

The foregoing description of the ~~Company or any subsidiary~~A&R AICP does not purport to ~~SAIIA or any of~~be complete and is qualified in its ~~subsidiaries, or (v) subject~~entirety by reference to certain exceptions, making any advance, loan, extension of credit or capital contribution to, or purchase any capital stock, bonds, notes, debentures or other debt securities of SAIIA or any of its subsidiaries.

~~Accordingly, provisions in~~ the ~~Third A&R Credit Agreement that restrict our business could make compliance with the terms and conditions~~full text of the ~~Third~~ A&R ~~Credit Agreement more difficult. Furthermore, provisions in the Third A&R Credit Agreement,~~AICP, which is filed herewith as ~~well as rights of holders of the Series A Preferred Stock~~Exhibit 10.2 and ~~Series B Preferred Stock and in the future, the Series B-3 Preferred Stock could impact our ability to engage in transactions we deem beneficial.~~

~~Our liquidity remains constrained and we could require additional sources of liquidity in the future to fund our operations and service our indebtedness.~~

We have experienced decreased liquidity due to the increase of our required payments and interest under our Third A&R Credit Agreement, acquisition integration costs and delayed collections for costs relating to the multiple severe weather events in the third quarter and fourth quarter of 2018. Although we have taken steps to enhance our liquidity, our liquidity remains constrained.

We anticipate that our existing cash balances, funds generated from operations, proceeds from the issuance of the Series B Preferred Stock and the Series B-3 Preferred Stock and borrowings will be sufficient to meet our cash requirements for the next twelve months, but we cannot provide any assurance that these sources will be sufficient because there are many factors that could affect our liquidity, including some that are beyond our control. Factors that could cause our future liquidity to vary materially from expectations include, but are not limited to, weather events, bonding obligations, contract disputes with customers, loss of customers, spending patterns of customers, unforeseen costs and expenses and our ability to maintain compliance with the covenants and restrictions in our Third A&R Credit Agreement (or obtain waivers in the event of non-compliance). If we encounter circumstances that place unforeseen constraints on our capital resources, we will be required to take additional measures to conserve or enhance liquidity.

~~In the future, we may require additional funds for operating purposes and may seek to raise additional funds through debt or equity financing. If we ever need to seek additional financing, there~~ is no assurance that this additional financing will be available, or if available, will be on reasonable terms. If our liquidity and capital resources are insufficient to meet our working capital requirements or fund our debt service obligations, we could face substantial liquidity problems, may not be able to generate sufficient cash to service all our indebtedness and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful. In the event we are not able to fund our working capital, we will not be able to implement or may be required to delay all or part of our business plan, and our ability to improve our operations, generate positive cash flows from operating activities and expand the business would be materially adversely affected.

If our results of operations were negatively impacted by unforeseen factors, or impacted to a greater degree than anticipated, we might not be able to maintain compliance with the covenants and restrictions in our Third A&R Credit Agreement. If we are unable to comply with the financial covenants in the future, and are unable to obtain a waiver or forbearance, it would result in an uncured default under the Third A&R Credit Agreement. If a default under the Third A&R Credit Agreement were not cured or waived, we would be unable to borrow under the Third A&R Credit Agreement and the indebtedness thereunder could be declared immediately due and payable. If we were unable to borrow under the Third A&R Credit Agreement, we would need to meet our capital requirements using other sources. Alternative sources of liquidity may not be available on acceptable terms if at all. Even if we were able to obtain an amendment, forbearance agreement or waiver in the future, we might be required to agree to other changes to the Third A&R Credit Agreement, including increased interest rates or premiums, more restrictive covenants and/or pay a fee for such amendment, forbearance agreement or waiver. Any of these events would have a material adverse effect on our business, financial condition and liquidity.

~~Our stock price has experienced significant volatility.~~

Our stock price has declined significantly since the third quarter of 2018, and has exhibited substantial volatility in 2019, including following our press releases on August 14, 2019 and October 9, 2019. Our price may fluctuate in response to a number of events and factors, including, but not limited to:

•~~actual or anticipated quarterly operating results;~~

•~~new developments and significant transactions;~~

•~~the financial projections we provide to the public, and any changes to the projections or failure to meet the projections;~~

•~~changes in our credit ratings;~~

•~~the public’s reaction to our press releases, other public announcements and filings with the SEC;~~

•~~changes in financial estimates, recommendations and coverages by securities analysts;~~

•~~media coverage of our business and financial performance;~~

•~~trends in our industry;~~

•~~significant changes in our management;~~

•~~lawsuits threatened or filed against us; and~~

•~~general economic conditions.~~

~~Price volatility over a given period or a low stock price may result in a number of negative outcomes, including, but not limited to:~~

~~creating potential limitations on the ability to raise capital through the issuance of equity or equity linked securities;~~

~~impacting the value of our equity compensation, which affects our ability to recruit and retain employees;~~

decreasing the value of the contingent earn-out related to our merger agreement, held in large part by members of management, which could cause a decline in job satisfaction or lead to management turnover;

~~difficulty complying with the listing standards of NASDAQ; and~~

~~increasing the risk of regulatory proceedings and litigation, including class action securities litigation.~~

~~If any of these outcomes were to occur, it could materially and adversely affect our business, financial condition, or results of operations, and the value of your investment.~~

~~Item 3. Defaults Upon Senior Securities~~

~~The information relating to the accrual of dividends on the Series A Preferred Stock and Series B Preferred Stock, as well as the total arrearage as of September 30, 2019 is included in~~ ~~Note 3. Earnings Per Share, to Part I, Item 1, and~~ incorporated in this ~~Part II, Item 3~~“Item 5. - Other Information” by reference.”

Item 6. Exhibits

(a) Exhibits.



Exhibit Number	Description
2.1#	Agreement and Plan of Merger, dated as of November 3, 2017, by and among the Company, IEA Energy Services LLC, Wind Merger Sub I, Inc., Wind Merger Sub II, LLC, Infrastructure and Energy Alternatives, LLC, Oaktree Power Opportunities Fund III Delaware, L.P., solely in its capacity as the representative of the seller, and, solely for purposes of Section 10.3 thereof, and, to the extent related thereto, Article 12 thereof, M III Sponsor I LLC and M III Sponsor I LP (incorporated by reference to Exhibit 2.1 to the Company’s Amendment No. 1 to its Current Report on Form 8-K (File No. 001-37796) filed November 8, 2017).



2.2	Amendment No. 1 to the Agreement and Plan of Merger, dated as of November 15, 2017, by and among IEA Energy Services LLC, M III Acquisition Corp., Wind Merger Sub I, Inc., Wind Merger Sub II, LLC, Infrastructure and Energy Alternatives, LLC, Oaktree Power Opportunities Fund III Delaware, L.P., solely in its capacity as the representative of the seller, and solely for purposes of Section 10.3 thereof, and, to the extent related thereto, Article 12 thereof, M III Sponsor I LLC and M III Sponsor I LP (incorporated by reference to Exhibit 2.2 to the Company’s Current Report on Form 8-K (File No. 001-37796) filed November 21, 2017).
2.3	Amendment No. 2 to the Agreement and Plan of Merger, dated as of December 27, 2017, by and among IEA Energy Services LLC, M III Acquisition Corp., Wind Merger Sub I, Inc., Wind Merger Sub II, LLC, Infrastructure and Energy Alternatives, LLC, Oaktree Power Opportunities Fund III Delaware, L.P., solely in its capacity as the representative of the seller, and solely for purposes of Section 10.3 thereof, and, to the extent related thereto, Article 12 thereof, M III Sponsor I LLC and M III Sponsor I LP (incorporated by reference to Exhibit 2.3 to the Company’s Current Report on Form 8-K (File No. 001-37796) filed January 2, 2018).
2.4	Amendment No. 3 to the Agreement and Plan of Merger, dated as of January 9, 2018, by and among IEA Energy Services LLC, M III Acquisition Corp., Wind Merger Sub I, Inc., Wind Merger Sub II, LLC, Infrastructure and Energy Alternatives, LLC, Oaktree Power Opportunities Fund III Delaware, L.P., solely in its capacity as the representative of the seller, and solely for purposes of Section 10.3 thereof, and, to the extent related thereto, Article 12 thereof, M III Sponsor I LLC and M III Sponsor I LP (incorporated by reference to Exhibit 2.4 to the Company’s Current Report on Form 8-K (File No. 001-37796) filed January 10, 2018).
2.5	Amendment No. 4 to the Agreement and Plan of Merger, dated as of February 7, 2018, by and among IEA Energy Services LLC, M III Acquisition Corp., Wind Merger Sub I, Inc., Wind Merger Sub II, LLC, Infrastructure and Energy Alternatives, LLC, Oaktree Power Opportunities Fund III Delaware, L.P., solely in its capacity as the representative of the seller, and solely for purposes of Section 10.3 thereof, and, to the extent related thereto, Article 12 thereof, M III Sponsor I LLC and M III Sponsor I LP (incorporated by reference to Exhibit 2.5 to the Company’s Current Report on Form 8-K (File No. 001-37796) filed February 9, 2018).
2.6	Amendment No. 5 to the Agreement and Plan of Merger, dated as of March 8, 2018, by and among IEA Energy Services LLC, M III Acquisition Corp., Wind Merger Sub I, Inc., Wind Merger Sub II, LLC, Infrastructure and Energy Alternatives, LLC, Oaktree Power Opportunities Fund III Delaware, L.P., solely in its capacity as the representative of the seller, and solely for purposes of Section 10.3 thereof, and, to the extent related thereto, Article 12 thereof, M III Sponsor I LLC and M III Sponsor I LP (incorporated by reference to Exhibit 2.6 to the Company’s Current Report on Form 8-K (File No. 001-37796) filed March 8, 2018).
2.7	Purchase and Sale Agreement, dated August 9, 2018, by and among IEA Energy Services LLC, Consolidated Construction Solutions I LLC and Consolidated Construction Investment Holdings LLC (incorporated by reference to Exhibit 2.1 to the Company’s Amendment to the Current Report on Form 8-K/A (File No. 001-37796) filed August 14, 2018).
2.8#	Equity Purchase Agreement, dated October 12, 2018, by and among IEA Energy Services LLC, William Charles Construction Group and the owners thereof (incorporated by reference to Exhibit 2.1 to the Company’s Amendment to the Current Report on Form 8-K/A (File No. 001-37796) filed October 15, 2018).
2.9	Amendment No. 1 to Equity Purchase Agreement, dated October 31, 2018, by and among IEA Energy Services LLC, William Charles Construction Group and the owners thereof (incorporated by reference to Exhibit 2.2 to the Company’s Current Report on Form 8-K (File No. 001-37796) filed November 2, 2018).
3.1	Second Amended and Restated Certificate of Incorporation of Infrastructure and Energy Alternatives, Inc. (incorporated by reference to Exhibit 3.1 of the Company’s Registration Statement on Form S-3/A (File No. 333-224337) filed with the Securities Exchange Commission on June 7, 2018).



3.2	Amended and Restated Bylaws of Infrastructure and Energy Alternatives, Inc. (incorporated by reference to Exhibit 3.2 of the Company’s Current Report on Form 8-K (File No. 001-37796) filed with on March 29, 2018).
3.3	Certificate of Designations of Series A Preferred Stock of Infrastructure and Energy Alternatives, Inc. (incorporated by reference to Exhibit 3.3 to the Company’s Current Report on Form 8-K (File No. 001-37796) filed on March 29, 2018).
3.4	Amended and Restated Certificate of Designations of Series A Preferred Stock of Infrastructure and Energy Alternatives, Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K (File No. 001-37796) filed May 22, 2019).
3.5	Certificate of Designations of Series B Preferred Stock of Infrastructure and Energy Alternatives, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 001-37796) filed May 22, 2019).
3.6	Amended and Restated Certificate of ~~Designation~~Designations of Series B-1 Preferred Stock of Infrastructure and Energy Alternatives, Inc. (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K (File No. 001-37796) filed on August 30, 2019).
3.7	Certificate of ~~Designation~~Designations of Series B-2 Preferred Stock of Infrastructure and Energy Alternatives, Inc. (incorporated by reference to Exhibit 3.2 of the Company’s Current Report on Form 8-K (File No. 001-37796) filed on August 30, 2019).

~~10.1~~

3.8	~~Equity Commitment Agreement, dated August 13, 2019, by and among~~Certificate of Designations of Series B-3 Preferred Stock of Infrastructure and Energy Alternatives, Inc.~~, the Commitment Parties party thereto and Oaktree Power Opportunities Fund III Delaware, L.P.~~ (incorporated by reference to Exhibit ~~10.1~~3.1 of the Company's ~~Quarterly~~Current Report on Form ~~10-Q~~8-K (File No. 001-37796) filed with the Securities Exchange Commission on ~~August 14,~~November 15, 2019).
~~10.2~~3.9	~~Amendment to the Equity Commitment Agreement, dated August 30, 2019, by~~Second Amended and ~~among~~Restated Certificate of Designations of Series B-1 Preferred Stock of Infrastructure and Energy Alternatives, Inc., Ares Special Situations Fund IV, L.P., ASOF Holdings I, L.P., Infrastructure and Energy Alternatives, LLC, OT POF IEA Preferred B Aggregator, L.P., Oaktree Power Opportunities Fund III Delaware, L.P. (incorporated by reference to Exhibit ~~10.1~~3.2 of the Company's Current Report on Form 8-K (File No. 001-37796) filed with the Securities Exchange Commission on November 15, 2019).
3.10	Amended and Restated Certificate of Designations of Series B-2 Preferred Stock of Infrastructure and Energy Alternatives, Inc. (incorporated by reference to Exhibit 3.3 of the Company's Current Report on Form 8-K (File No. 001-37796) filed with the Securities Exchange Commission on November 15, 2019).
4.1	Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K (File No. 001-37796) filed with the Securities Exchange Commission on ~~August 30, 2019)~~March 29, 2018).
~~10.3~~4.2	Specimen Preferred Stock Certificate (incorporated by reference to Exhibit 4.2 of the Company’s Current Report on Form 8-K (File No. 001-37796) filed with the Securities Exchange Commission on March 29, 2018).
4.3	Specimen Warrant Certificate (incorporated by reference to Exhibit 4.3 of the Company’s Current Report on Form 8-K (File No. 001-37796) filed with the Securities Exchange Commission on March 29, 2018).
4.4	Warrant Certificate, dated August 30, 2019, by and among Infrastructure and Energy Alternatives, Inc. and Ares Special Situations Fund IV, L.P. (incorporated by reference to Exhibit 10.2 of the ~~Company’s~~Company's Current Report on Form 8-K (File No. 001-37796) filed with the Securities Exchange Commission on August 30, 2019).
~~10.4~~4.5	Warrant Certificate, dated August 30, 2019, by and among Infrastructure and Energy Alternatives, Inc. and ASOF Holdings I, L.P. (incorporated by reference to Exhibit 10.3 of the Company's Current Report on Form 8-K (File No. 001-37796) filed with the Securities Exchange Commission on August 30, 2019).
4.6	Warrant Agreement, dated July 7, 2016, between the Company and Continental Stock Transfer & Trust Company (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K (File No. 001-37796) filed with the Securities Exchange Commission on July 13, 2016).
4.7	Amended and Restated Warrant Agreement, dated as of March 26, 2018, by and between the Company and Continental Stock Transfer & Trust Company, as Warrant Agent. (incorporated by reference to Exhibit 4.4 of the Company’s Current Report on Form 8-K (File No. 001-37796) filed with the Securities Exchange Commission on March 29, 2018).
4.8	Warrant Agreement, dated May 20, 2019, by and among Infrastructure and Energy Alternatives, Inc. and Ares Special Situations Fund IV, L.P. (incorporated by reference to Exhibit 10.6 of the Company's Current Report on Form 8-K (File No. 001-37796) filed with the Securities Exchange Commission on May 22, 2019).
4.9	Warrant Agreement, dated May 20, 2019, by and among Infrastructure and Energy Alternatives, Inc. and OT POF IEA Preferred B Aggregator, L.P. (incorporated by reference to Exhibit 10.7 of the Company's Current Report on Form 8-K (File No. 001-37796) filed with the Securities Exchange Commission on May 22, 2019).
4.10	Warrant Certificate, dated November 14, 2019, by and among Infrastructure and Energy Alternatives, Inc. and Ares Special Situations Fund IV, L.P. (incorporated by reference to Exhibit 10.2 of the Company's Current Report on Form 8-K (File No. 001-37796) filed with the Securities Exchange Commission on November 15, 2019).
4.11	Warrant Certificate, dated November 14, 2019, by and among Infrastructure and Energy Alternatives, Inc. and ASOF Holdings I, L.P. (incorporated by reference to Exhibit 10.3 of the Company's Current Report on Form 8-K (File No. 001-37796) filed with the Securities Exchange Commission on November 15, 2019).
4.12	Warrant Certificate, dated November 14, 2019, by and among Infrastructure and Energy Alternatives, Inc. and Infrastructure and Energy Alternatives, LLC (incorporated by reference to Exhibit 10.4 of the Company's Current Report on Form 8-K (File No. 001-37796) filed with the Securities Exchange Commission on November 15, 2019).
4.13	Subscription Rights Certificate (incorporated by reference to Exhibit 4.13 of the Company’s Registration Statement on Form S-1 (File No. 333-235280) filed on January 29, 2020).
4.14	Form of Warrant Certificate (incorporated by reference to Exhibit A to Exhibit 4.1 to the Company’s Current Report on Form 8-K (File No. 001-37796) filed on ~~August 30, 2019)~~March 4, 2020).
~~10.5~~4.15	~~Third Amendment to Amended and Restated Registration Rights~~Warrant Agreement, dated as of ~~August 30, 2019,~~March 3, 2020, by and ~~among~~between Infrastructure and Energy Alternatives, Inc.~~, Infrastructure~~ and ~~Energy Alternatives, LLC, Ares Special Situations Fund IV, L.P. and ASOF Holdings I, L.P.~~Continental Stock Transfer & Trust Company (incorporated by reference to Exhibit ~~10.4~~4.1 of the Company’s Current Report on Form 8-K (File No. 001-37796) filed on ~~August 30, 2019)~~March 4, 2020).
~~10.6~~10.1*	~~Second Amended and Restated Investor Rights~~Amendment to the Equity Commitment Agreement, dated as of August 30, 2019, by and among Infrastructure and Energy Alternatives, Inc., M III Sponsor I LLC, Infrastructure and Energy Alternatives, LLC and Oaktree Power Opportunities Fund III Delaware, L.P. (incorporated by reference to Exhibit 10.5 of the Company’s Current Report on Form 8-K (File No. 001-37796) filed on August 30, 2019).
~~10.7~~	Equity Commitment Agreement, dated October 29, 2019, by and among Infrastructure and Energy Alternatives, Inc., the Commitment Parties party thereto, Oaktree Power Opportunities Fund III Delaware, L.P., Infrastructure and Energy Alternatives, LLC, and OT POF IEA Preferred B Aggregator, L.P. (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K (File No. 001-37796) filed on October 30, 2019).
~~10.8~~	~~Preferred Stock Exchange Agreement, dated October 29, 2019,~~May 6, 2020, by and among the Infrastructure and Energy Alternatives, Inc., IEA, Ares Special Situations Fund IV, L.P. and ASOF Holdings I, L.P., Oaktree Power Opportunities Fund III Delaware, L.P., and OT POF IEA Preferred B Aggregator, L.P. (incorporated by reference to Exhibit 10.2 ofCompany, each Commitment Party (as defined in the ~~Company’s Current Report on Form 8-K (File No. 001-37796) filed on October 30, 2019).~~
~~10.9~~	Rights Offering Agreement, dated October 29, 2019, by and among the Infrastructure and Energy Alternatives, Inc., IEA, Ares Special Situations Fund IV, L.P. and ASOF Holdings I, L.P., Oaktree Power Opportunities Fund III Delaware, L.P., and OT POF IEA Preferred B Aggregator, L.P. (incorporated by reference to Exhibit 10.3 of the Company’s Current Report on Form 8-K (File No. 001-37796) filed on October 30, 2019).
~~10.10~~	Voting Agreement, dated as of October 29, 2019, by and among Infrastructure and Energy Alternatives, Inc., IEA LLC, OT POF IEA Preferred B Aggregator, L.P., M III Sponsor, Mohsin Y. Meghji, Mohsin Meghji 2016 Gift Trust and Charles Garner and M III Sponsor I LLC. (incorporated by reference to Exhibit 10.4 of the Company’s Current Report on Form 8-K (File No. 001-37796) filed on October 30, 2019).



~~10.11~~	~~Indemnification letter agreement, dated as of October 29, 2019, by and among Infrastructure and Energy Alternatives, Inc.~~Equity Commitment Agreement), Oaktree Power Opportunities Fund III Delaware, L.P., Infrastructure and Energy Alternatives, LLC, and OT POF IEA Preferred B Aggregator, L.P. ~~(incorporated by reference to Exhibit 10.5 of the Company’s Current Report on Form 8-K (File No. 001-37796) filed on October 30, 2019).~~
10.2*†	Amended and Restated Annual Incentive Compensation Program.
31.1*	Certification of the Principal Executive Officer required by Rule 13a-14(a) and Rule 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes Oxley Act of 2002.



31.2*	Certification of the Principal Financial Officer required by Rule 13a-14(a) and Rule 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes Oxley Act of 2002.
32.1**	Certification of the Principal Executive Officer required by 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002.
32.2**	Certification of the Principal Financial Officer required by 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002.
101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema Document
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document

* Filed herewith.

** Furnished herewith.

† Indicates a management contract or compensatory plan or ~~arrangement~~arrangement.

SIGNATURE

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





	INFRASTRUCTURE AND ENERGY ALTERNATIVES, INC.

Dated: ~~November 12, 2019~~May 7, 2020	By:	/s/ JP Roehm
	Name: JP Roehm
	Title: Chief Executive Officer

Dated: ~~November 12, 2019~~May 7, 2020	By:	/s/ ~~Andrew D. Layman~~Peter J. Moerbeek
	Name: ~~Andrew D. Layman~~Peter J. Moerbeek
	Title: Chief Financial Officer

Dated: ~~November 12, 2019~~May 7, 2020	By:	/s/ Bharat Shah
	Name: Bharat Shah
	Title: Chief Accounting Officer



Identifiable assets acquired and liabilities assumed (in thousands)	CCS			William Charles
Cash	$	6,413		$	6,641
Accounts Receivable	58,041			69,740
Costs and estimated earnings in excess of billings on uncompleted contracts	9,512			16,095
Other current assets	1,813			7,999
Property, plant and equipment	59,952			47,899
Intangible assets:
Customer relationships	19,500			7,000
Backlog	8,400			5,500
Tradename	8,900			4,500
Deferred income taxes	(2,361		)	—
Other non-current assets	134			75
Accounts payable and accrued liabilities	(25,219		)	(60,962		)
Billings in excess of costs and estimated earnings on uncompleted contracts	(14,194		)	(14,810		)
Debt, less current portion	(52,257		)	(15,672		)
Capital lease obligations	(1,124		)	—
Other liabilities	(704		)	(907		)
Total identifiable assets	76,806			73,098
Goodwill	29,773			4,581
Total purchase consideration	$	106,579		$	77,679



(in thousands)	Three months ended September 30, 2019		Nine months ended September 30, 2019
	CCS	William Charles	CCS	William Charles
Revenue	81,248	84,033	211,117	198,879
Net income (loss)	2,707	7,308	616	7,359

	Three months ended September 30, 2018		Nine months ended September 30, 2018
	CCS	William Charles	CCS	William Charles
Revenue	5,600	—	5,600	—
Net income (loss)	—	—	—	—



	September 30, 2019			December 31, 2018
Contract receivables	$	168,413		$	161,408
Contract retainage	76,103			64,000
Accounts receivable, gross	244,516			225,408
Less: allowance for doubtful accounts	(51		)	(42		)
Accounts receivable, net	$	244,465		$	225,366



	September 30, 2019			December 31, 2018
Costs on contracts in progress	$	1,189,496		$	935,820
Estimated earnings on contracts in progress	111,451			76,883
Revenue on contracts in progress	1,300,947			1,012,703
Less: billings on contracts in progress	(1,263,221		)	(1,027,816		)
Net underbillings (overbillings)	$	37,726		$	(15,113	)



(in thousands)	Goodwill
January 1, 2018 (Renewables Segment)	$	3,020
Acquisitions (Specialty Civil Segment)	37,237
December 31, 2018	$	40,257
Acquisition adjustments (Specialty Civil Segment)	(2,884		)
September 30, 2019	$	37,373



		Fair Value Measurements at Reporting Date
	Amount recorded on balance sheet	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Liabilities as of December 31, 2018
Contingent consideration	23,082	—	—	23,082



	Contingent Consideration		Series B Preferred - Series A Conversion Warrants		Series B Preferred - Additional 6% Warrants
Beginning Balance, December 31, 2018	23,082		$	—	$	—
Preferred Series B-1 Stock - Additional Warrants	—		4,200		400
Fair value adjustment	(23,082	)	—		—
Ending Balance, September 30, 2019	—		4,200		400



		Fair Value Measurements
	Amount recorded on balance sheet	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Liabilities:
Series B-1 and Series B-2 Preferred Stock	81,300	—	—	81,300

Equity:
Series B-1 Preferred Stock - Warrants at closing	14,100	—	—	14,100



Remainder of 2019	$	13,965
2020	55,988
2021	51,826
2022	47,276
2023	32,905
Thereafter	257,591
Total contractual obligations	$	459,551