Exhibit 99.4
ENERGY SERVICES OF AMERICA CORPORATION
CONSOLIDATED PRO FORMA BALANCE SHEETS
As of March 31, 2022
2022 | ||||
Assets | ||||
Current assets | ||||
Cash and cash equivalents | $ | 8,178,685 | ||
Accounts receivable-trade | 16,585,025 | |||
Allowance for doubtful accounts | (70,310 | ) | ||
Retainages receivable | 1,924,608 | |||
Other receivables | 49,107 | |||
Contract assets | 7,697,889 | |||
Prepaid expenses and other | 5,272,735 | |||
Total current assets | 39,637,739 | |||
Property, plant and equipment, at cost | 67,560,533 | |||
less accumulated depreciation | (39,843,861 | ) | ||
Total fixed assets | 27,716,672 | |||
Right of use asset, finance lease | 296,650 | |||
Acquired intangible assets, net | 4,591,665 | |||
Goodwill | 3,426,070 | |||
Total assets | $ | 75,668,796 | ||
Liabilities and shareholders' equity | ||||
Current liabilities | ||||
Current maturities of long-term debt | $ | 4,700,128 | ||
Lines of credit and short term borrowings | 2,236,362 | |||
Accounts payable | 6,846,215 | |||
Accrued expenses and other current liabilities | 6,121,518 | |||
Contract liabilities | 4,213,471 | |||
Total current liabilities | 24,117,694 | |||
Long-term debt, less current maturities | 14,492,910 | |||
Deferred income taxes payable | 2,393,098 | |||
Total liabilities | 41,003,702 | |||
Shareholders' equity | ||||
Preferred stock, $.0001 par value, Authorized 1,000,000 shares, no shares outstanding at March 31, 2022 | - | |||
Common stock, $.0001 par value | ||||
Authorized 50,000,000 shares 17,466,328 issued and 16,247,898 outstanding at March 31, 2022 prior to acquisition and 419,287 shares issued at acquisition closing | 1,789 | |||
Treasury stock, 1,218,430 shares at March 31, 2022 | (122 | ) | ||
Additional paid in capital | 60,460,132 | |||
Retained earnings (deficit) | (25,796,705 | ) | ||
Total shareholders' equity | 34,665,094 | |||
Total liabilities and shareholders' equity | $ | 75,668,796 |
ENERGY SERVICES OF AMERICA CORPORATION
CONSOLIDATED PRO FORMA STATEMENTS OF INCOME
For the Six Months Ended March 31, 2022
2022 | ||||
Revenue | $ | 81,900,182 | ||
Cost of revenues | 72,950,149 | |||
Gross profit | 8,950,033 | |||
Selling and administrative expenses | 7,918,142 | |||
Income from operations | 1,031,891 | |||
Other income (expense) | ||||
Interest income | 576 | |||
Other nonoperating expense | (475,588 | ) | ||
Interest expense | (512,141 | ) | ||
Gain on sale of equipment | 359,792 | |||
(627,361 | ) | |||
Income before income taxes | 404,530 | |||
Income tax expense | 166,220 | |||
Net income available to common shareholders | $ | 238,310 | ||
Weighted average shares outstanding-basic | 16,667,185 | |||
Weighted average shares-diluted | 16,667,185 | |||
Earnings per share available to common shareholders | $ | 0.01 | ||
Earnings per share-diluted available to common shareholders | $ | 0.01 |
Energy Services of America Corporation Consolidated Balance Sheets March 31, 2022 | Purchase Entry | Pro Forma Adjusting Entries | Energy Services of America Corporation Consolidated Pro Forma Balance Sheets March 31, 2022 | ||||||||||||||
Assets | |||||||||||||||||
Current assets | |||||||||||||||||
Cash and cash equivalents | $ | 8,362,452 | $ | - | $ | (183,767 | ) | (g) | $ | 8,178,685 | |||||||
Accounts receivable-trade | 16,585,025 | - | - | 16,585,025 | |||||||||||||
Allowance for doubtful accounts | (70,310 | ) | - | (70,310 | ) | ||||||||||||
Retainages receivable | 1,924,608 | - | - | 1,924,608 | |||||||||||||
Other receivables | 49,107 | - | - | 49,107 | |||||||||||||
Contract assets | 7,697,889 | - | - | 7,697,889 | |||||||||||||
Prepaid expenses and other | 5,272,735 | - | - | 5,272,735 | |||||||||||||
Total current assets | 39,821,506 | - | (183,767 | ) | 39,637,739 | ||||||||||||
Property, plant and equipment, at cost | 61,851,439 | 5,709,094 | (a) | - | 67,560,533 | ||||||||||||
less accumulated depreciation | (39,273,861 | ) | - | (570,000 | ) | (h) | (39,843,861 | ) | |||||||||
Total fixed assets | 22,577,578 | 5,709,094 | (570,000 | ) | 27,716,672 | ||||||||||||
Right of use asset, finance lease | - | - | 296,650 | (i) | 296,650 | ||||||||||||
Acquired intangible assets, net | 2,230,067 | 2,505,598 | (b) | (144,000 | ) | (j) | 4,591,665 | ||||||||||
Goodwill | 1,814,317 | 1,611,753 | (c) | - | 3,426,070 | ||||||||||||
Total assets | $ | 66,443,468 | $ | 9,826,445 | $ | (601,117 | ) | $ | 75,668,796 | ||||||||
Liabilities and shareholders' equity | |||||||||||||||||
Current liabilities | |||||||||||||||||
Current maturities of long-term debt | $ | 2,869,128 | $ | - | $ | 1,831,000 | (k) | $ | 4,700,128 | ||||||||
Lines of credit and short term borrowings | 2,236,362 | - | - | 2,236,362 | |||||||||||||
Accounts payable | 6,846,215 | - | - | 6,846,215 | |||||||||||||
Accrued expenses and other current liabilities | 6,121,518 | - | - | 6,121,518 | |||||||||||||
Contract liabilities | 4,213,471 | - | - | 4,213,471 | |||||||||||||
Income tax payable | - | ||||||||||||||||
Total current liabilities | 22,286,694 | - | 1,831,000 | 24,117,694 | |||||||||||||
Long-term debt, less current maturities | 7,879,315 | 8,826,445 | (d) | (2,212,850 | ) | (l)(k) | 14,492,910 | ||||||||||
Deferred income taxes payable | 2,265,498 | - | 127,600 | (m) | 2,393,098 | ||||||||||||
Total liabilities | 32,431,507 | 8,826,445 | (2,085,250 | ) | 41,003,702 | ||||||||||||
Shareholders' equity | |||||||||||||||||
Preferred stock, $.0001 par value, Authorized 1,000,000 shares, no shares outstanding at March 31, 2022 | - | - | - | - | |||||||||||||
Common stock, $.0001 par value | |||||||||||||||||
Authorized 50,000,000 shares 17,466,328 issued and 16,247,898 outstanding at March 31, 2022 prior to acquisition and 419,287 shares issued at acquisition closing | 1,747 | 42 | (e) | - | 1,789 | ||||||||||||
Treasury stock, 1,218,430 shares at March 31, 2022 | (122 | ) | (122 | ) | |||||||||||||
Additional paid in capital | 59,460,174 | 999,958 | (f) | - | 60,460,132 | ||||||||||||
Retained earnings (deficit) | (25,449,838 | ) | - | (346,867 | ) | (n) | (25,796,705 | ) | |||||||||
Total shareholders' equity | 34,011,961 | 1,000,000 | (346,867 | ) | 34,665,094 | ||||||||||||
Total liabilities and shareholders' equity | $ | 66,443,468 | $ | 9,826,445 | $ | (601,117 | ) | $ | 75,668,796 |
(a) | Property, plant and equipment acquired in purchase at stepped up value |
(b) | Non-compete valued at $379,149, customer list valued at $1,929,144, and tradename values at $197,335 |
(c) | Goodwill acquired in purchase allocation |
(d) | Bank debt to finance purchase $7,500,000, fair value of seller note $936,000, debt assumed $390,000, |
(e) | Par value of 419,287 common shares issued as purchase consideration |
(f) | Value of 419,287 common shares issued as purchase consideration less par value |
(g) | Cash flow effect of adjustments |
(h) | Depreciation based on stepped up asset value |
(i) | Right to use finance leases, $365,000 less $68,350 amortization |
(j) | Amortization of intangible assets, $24,000 x 6 months |
(k) | Reclass current portion of long-term debt, $1,431,000 bank debt, $250,000 seller note, $150,000 finance leases |
(l) | Note payable from right to use finance lease, $365,000 plus $14,650 accreted interest less $75,000 in lease payments, less $686,500 in bank payments |
(m) | Current year deferred income tax adjustment |
(n) | Current year net income fromTSP audited financial statements, partially offset by pro forma income statement adjustments |
Energy Services of America Corporation Consolidated Statements of Income For the Six Months Ended March 31, 2022 | Tri-State Paving & Sealcoating Statements of Income For the Six Months Ended March 31, 2022 | Pro Forma Adjustments | Energy Services of America Corporation Consolidated Pro Forma Statements of Income For the Six Months Ended March 31, 2022 | ||||||||||||||
Revenue | $ | 78,051,703 | $ | 3,848,479 | $ | - | $ | 81,900,182 | |||||||||
Cost of revenues | 69,877,711 | 3,384,438 | (312,000 | ) | (a) | 72,950,149 | |||||||||||
Gross profit | 8,173,992 | 464,041 | 312,000 | 8,950,033 | |||||||||||||
Selling and administrative expenses | 7,049,634 | 943,508 | (75,000 | ) | (b) | 7,918,142 | |||||||||||
Income (loss) from operations | 1,124,358 | (479,467 | ) | 387,000 | 1,031,891 | ||||||||||||
Other income (expense) | |||||||||||||||||
Interest income | 576 | - | - | 576 | |||||||||||||
Other nonoperating (expense) income | (263,238 | ) | - | (212,350 | ) | (c) | (475,588 | ) | |||||||||
Interest expense | (342,491 | ) | - | (169,650 | ) | (d) | (512,141 | ) | |||||||||
Gain on sale of equipment | 359,792 | - | - | 359,792 | |||||||||||||
(245,361 | ) | - | (382,000 | ) | (627,361 | ) | |||||||||||
Income before income taxes | 878,997 | (479,467 | ) | 5,000 | 404,530 | ||||||||||||
Income tax expense (benefit) | 293,820 | - | (127,600 | ) | (e) | 166,220 | |||||||||||
Net income | $ | 585,177 | $ | (479,467 | ) | $ | 132,600 | $ | 238,310 | ||||||||
Weighted average shares outstanding-basic | 16,247,898 | 419,287 | 16,667,185 | ||||||||||||||
Weighted average shares-diluted | 16,247,898 | 419,287 | 16,667,185 | ||||||||||||||
Earnings per share available to common shareholders | $ | 0.04 | $ | 0.01 | |||||||||||||
Earnings per share-diluted available to common shareholders | $ | 0.04 | $ | 0.01 |
(a) | $88,000 depreciation expense increase for the stepped up value of property, plant and equipment, and $400,000 salary & burden expense decrease for employees not retained and salary adjustments |
(b) | $75,000 decrease to building lease expense, $68,350 reclassed to other expense (finance lease amortization) and $6,650 reclassed to interest expense |
(c) | $68,350 right to use-finance lease amortization expense and $144,000 intangible asset amortization expense |
(d) | $163,000 increase in interest expense for debt incurred to finance purchase and $6,650 increase from finance lease |
(e) | $129,000 tax benefit adjustment due to TSP previously filing as an "S" corporation during audited periods and $14,00 tax expense of pro forma adjustments |