Energy Services of America (ESOA) risk factors, FY2025 10-K

Risk Related to our Operations

1. 01Our operating results may vary significantly from quarter to quarter
2. 02Future acquisitions could disrupt the Company’s business and adversely affect our results of operations, financial condition and cash flows

Risk Related to our Business

1. 03The type of contracts we obtain could adversely affect our profitability
2. 04A portion of our business depends on our ability to provide surety bonds. We may be unable to compete on certain projects if we are not able to obtain the necessary surety bonds
3. 05Many of our contracts can be cancelled or delayed or may not be renewed upon completion
4. 06Our business requires a skilled labor force and if we are unable to attract and retain qualified employees, our ability to maintain our productivity could be impaired
5. 07Our backlog may not be realized
6. 08We extend credit to customers for purchases of our services and therefore have risk that they may not be able to repay us
7. 09Our dependence on suppliers, subcontractors and equipment manufacturers could expose us to risk of loss in our operations
8. 10We face cybersecurity risk including breach of confidential personal information, Company or customer intellectual properties, and delays related to data loss
9. 11Inflation can have an adverse impact on our business and on our customers
10. 12Societal responses to climate change could adversely affect our business and performance, including indirectly through impacts on our customers
11. 13The SBA may review the Company’s PPP Loan forgiveness application and if the SBA disagrees with the Company’s certification the Company could be subject to penalties and the repayment of the PPP Loans, which could negatively impact the Company’s business, financial condition and results of operations and prospects

Risk Related to our Industry

1. 14An economic downturn in the industries we serve could lead to less demand for our services
2. 15Project delays or cancellations may result in additional costs to us, reductions in revenues or the payment of liquidated damages
3. 16Our industry is highly competitive
4. 17We may be unsuccessful at generating internal growth

Risk Related to Financing

1. 18Credit facilities to fund our operations and growth might not be available39% rewritten

Risk Related to our Financial Performance

1. 19Revenue and cost estimates on projects may differ from actual results

Risk Related to Law and Regulatory Compliance

1. 20During the ordinary course of business, we may become subject to lawsuits or indemnity claims, which could materially and adversely affect our business and results of operations
2. 21We may incur liabilities or suffer negative financial or reputational harm relating to occupational health and safety matters
3. 22Changes by the government in laws regulating the industries we serve could reduce our sales volumes
4. 23Our failure to comply with environmental laws could result in significant liabilities
5. 24We have operations in multiple states and face risks related to pandemics such as the Coronavirus/COVID 19 global pandemic that could impact our results of operations

Risks Relating to Ownership of Our Common Stock

1. 25Our common stock is not heavily traded, and the stock price may fluctuate significantly
2. 26Our directors beneficially own a significant portion of our common stock and have substantial influence over us
3. 27Our dividend policy may change without notice and any payment of dividends in the future is subject to the discretion of our board of directors
4. 28Increasing scrutiny and evolving expectations from customers, regulators, investors, and other stakeholders with respect to our environmental, social and governance practices may impose additional costs on us or expose us to new or additional risks