Exhibit 99.2

 

TABLE OF CONTENTS

 

		Page No.
Independent Auditor’s Report		1 - 2
Consolidated and Combined Balance Sheet		3
Consolidated and Combined Statement of Income		4
Consolidated and Combined Statement of Changes in Members’ Equity		5
Consolidated and Combined Statement of Cash Flows		6 - 7
Notes to Consolidated and Combined Financial Statements		8 - 22
Supplementary Information
Schedule of Earnings from Construction Contracts		24
Schedule of Earnings from Completed Contracts		25
Schedule of Earnings from Contracts in Progress		26
Schedule of Selling, General and Administrative Expenses		27
Consolidating and Combining Balance Sheet		28
Consolidating and Combining Statement of Income		29

INDEPENDENT AUDITOR’S REPORT

To the Members

Asphalt, Inc., LLC dba Lone Star Paving Company and ACE

 Aggregates, LLC

Austin, Texas

Opinion

We have audited the accompanying consolidated and combined financial statements of Asphalt, Inc., LLC dba Lone Star Paving Company and ACE Aggregates, LLC (collectively, the ‘‘Company’’), which comprise the consolidated and combined balance sheet as of September 30, 2024, and the related consolidated and combined statements of income, changes in members’ equity, and cash flows for the year then ended, and the related notes to the consolidated and combined financial statements.

In our opinion, the consolidated and combined financial statements referred to above present fairly, in all material respects, the financial position of Asphalt, Inc., LLC dba Lone Star Paving Company and ACE Aggregates, LLC as of September 30, 2024, and for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinion

We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of Asphalt, Inc., LLC dba Lone Star Paving Company and ACE Aggregates, LLC and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Responsibilities of Management for the Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated and combined financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated and combined financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated and combined financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about Asphalt, Inc., LLC dba Lone Star Paving Company and ACE Aggregates, LLC’s ability to continue as a going concern within one year after the date that the financial statements are available to be issued.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated and combined financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with auditing standards generally accepted in the United States of America will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the consolidated and combined financial statements.

 

1

In performing an audit in accordance with auditing standards generally accepted in the United States of America, we:

 

•

Exercise professional judgment and maintain professional skepticism throughout the audit.

 

•

Identify and assess the risks of material misstatement of the consolidated and combined financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated and combined financial statements.

 

•

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Asphalt, Inc., LLC dba Lone Star Paving Company and ACE Aggregates, LLC’s internal control. Accordingly, no such opinion is expressed.

 

•

Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the consolidated and combined financial statements.

 

•

Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about Asphalt, Inc., LLC dba Lone Star Paving Company and ACE Aggregates, LLC’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.

Report on Supplementary Information

Our audit was conducted for the purpose of forming an opinion on the consolidated and combined financial statements as a whole. The supplementary information on pages 24 - 29 is presented for purposes of additional analysis and is not a required part of the consolidated and combined financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the consolidated and combined financial statements. The supplementary information has been subjected to the auditing procedures applied in the audit of the consolidated and combined financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the consolidated and combined financial statements or to the consolidated and combined financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the consolidated and combined financial statements as a whole.

 

January 13, 2025

 

2

Asphalt, Inc., LLC dba Lone Star Paving Company and ACE Aggregates, LLC

Consolidated and Combined Balance Sheet

September 30, 2024

 

 

ASSETS
Current assets
Cash		$	10,188,290
Contract receivables, net of allowance for credit losses of $950,000			95,569,046
Costs and estimated earnings on uncompleted contracts in excess of billings			3,580,659
Other assets			1,957,557
Inventory			26,138,380
Total current assets			137,433,932
Related party notes receivable			6,100,000
Operating lease right-of-use assets, net			2,005,658
Goodwill			43,810,085
Fixed assets, net			248,061,640
Total assets		$	437,411,315

LIABILITIES AND MEMBERS’ EQUITY

Current liabilities
Accounts payable		$	43,559,365
Accrued liabilities			2,097,970
Other payables			2,922,176
Billings in excess of costs and estimated earnings on uncompleted contracts			9,474,338
Line of credit			14,168,194
Related party notes payable			53,712,500
Current portion of long-term debt			27,612,500
Current portion of operating lease liability			634,911
Total current liabilities			154,181,954
Long-term debt, net of current portion			130,933,994
Operating lease liability, net of current portion			1,314,437
Total liabilities			286,430,385
Members’ equity			150,980,930
Total liabilities and members’ equity		$	437,411,315

The accompanying notes are an integral part of these consolidated and combined financial statements.

 

3

Asphalt, Inc., LLC dba Lone Star Paving Company and ACE Aggregates, LLC

Consolidated and Combined Statement of Income

For the Year Ended September 30, 2024

 

 

Revenues
Contract revenues earned - paving		$	447,083,316
Sales - materials			73,883,714
Total revenues			520,967,030
Cost of revenues Cost of contract revenues - paving			351,485,482
Cost of sales - materials			54,116,434
Total cost of revenues			405,601,916
Gross profit			115,365,114
Selling, general, and administrative expenses			24,631,486
Income from operations			90,733,628
Other income (expense)
Other income			1,092,471
Earnings from equity method investments			1,200,000
Net gain on remeasurement of equity interests to fair value			10,253,392
Gain on sale of fixed assets			181,479
Interest expense			(9,679,583	)
Total other income (expense), net			3,047,759
Income before provision for income taxes			93,781,387
Provision for income taxes			1,098,525
Net income		$	92,682,862

The accompanying notes are an integral part of these consolidated and combined financial statements.

 

4

Asphalt, Inc., LLC dba Lone Star Paving Company and ACE Aggregates, LLC

Consolidated and Combined Statement of Changes in Members’ Equity

For the Year Ended September 30, 2024

 

 

Balance, beginning of year		$	198,079,318
Distributions			(35,000,000	)
Redemption of 20% interest in Asphalt, Inc., LLC (Note 14)			(105,531,250)
Contributions			750,000
Net income			92,682,862
Balance, end of year		$	150,980,930

The accompanying notes are an integral part of these consolidated and combined financial statements.

 

5

Asphalt, Inc., LLC dba Lone Star Paving Company and ACE Aggregates, LLC

Consolidated and Combined Statement of Cash Flows

For the Year Ended September 30, 2024

 

Cash flows from operating activities
Net income
Adjustments to reconcile net income to net cash provided by operating activities		$	92,682,862
Depreciation			21,939,485
Gain on sale of fixed assets			(181,479	)
Net gain on remeasurement of equity interests to fair value			(10,253,392	)
Provision for credit losses			450,000
Earnings from equity method investments			(1,200,000	)
Amortization of right-of-use assets			1,367,528
Changes in operating assets and liabilities Contract receivables, net			(18,489,092	)
Costs and estimated earnings in excess of costs on uncompleted contracts			(111,495	)
Other assets			(1,329,303	)
Inventory			(1,186,319	)
Accounts payable			11,018,846
Accrued liabilities			34,893
Billings in excess of costs and estimated earnings on uncompleted contracts			2,136,758
Provision for losses on uncompleted contracts			(550,000	)
Operating lease liabilities			(3,845,879	)
Net cash provided by operating activities			92,483,413
Cash flows from investing activities Proceeds from sale of fixed assets			8,090,150
Cash paid for purchase of fixed assets			(86,655,694	)
Cash paid for acquisitions			(50,197,358	)
Payments on related party notes payable			57,742,500
Payment for issuance of related party notes receivable			(4,030,000	)
Payments received on related party notes receivable			8,725,000
Net cash used in investing activities			(66,325,402	)
Cash flows from financing activities Proceeds from line of credit			243,702,685
Payments on lines of credit			(231,034,491	)
Proceeds from issuance of long-term debt			4,932,860
Payments on long-term debt			(24,406,019	)
Contributions			750,000
Distributions			(35,000,000	)
Net cash used in financing activities			(41,054,965)
Net decrease in cash			(14,896,954)
Cash, beginning of year			25,085,244
Cash, end of year			$10,188,290

 

6

Asphalt, Inc., LLC dba Lone Star Paving Company and ACE Aggregates, LLC

Notes to Consolidated and Combined Financial Statements

September 30, 2024

 

Supplemental disclosures of cash flow information
Cash paid during the year for
Interest		$	9,162,310
Income taxes		$	1,098,525
Supplemental schedule of noncash investing and financing activities
Noncash recognition of new operating leases		$	1,395,278

The accompanying notes are an integral part of these consolidated and combined financial statements.

 

7

Asphalt, Inc., LLC dba Lone Star Paving Company and ACE Aggregates, LLC

Notes to Consolidated and Combined Financial Statements

September 30, 2024

 

1.	NATURE OF OPERATIONS

Asphalt, Inc., LLC dba Lone Star Paving and ACE Aggregates, LLC, (collectively the “Company”) share common control. Asphalt, Inc., LLC dba Lone Star Paving was organized in the State of Texas on September 18, 2013 and ACE Aggregates, LLC, was organized in the State of Texas in 2017. The Company is primarily engaged in highway and road paving, maintenance and repair of parking lots, rock quarrying, and manufacturing of hotmix and mining of limestone for internal use and sale to third parties.

 

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of accounting and consolidation and combination

The consolidated financial statements present the financial position and results of operations of the Company and its wholly-owned subsidiaries, and have been combined with the results and operations of ACE Aggregates, LLC, which shares common control. All significant intercompany transactions and accounts have been eliminated in the consolidated and combined financial statements. The accompanying consolidated and combined financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (GAAP).

Operating cycle

The Company’s work is performed under quantity pricing, fixed-price contracts, and fixed-price contracts modified by incentive and penalty provisions. These contracts are primarily performed under subcontractor agreements. The length of the Company’s contracts varies but is typically less than six months. In accordance with industry practice, contract-related assets and liabilities that are realizable or payable over periods in excess of one year, but within the Company’s normal operating cycle, are recorded as current assets and liabilities.

Use of estimates

The preparation of the consolidated and combined financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated and combined financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash

Cash consists primarily of cash on deposit.

 

8

Asphalt, Inc., LLC dba Lone Star Paving Company and ACE Aggregates, LLC

Notes to Consolidated and Combined Financial Statements

September 30, 2024

 

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Contracts receivable

Contracts receivable are recorded on construction contracts and include billed and unbilled amounts for services provided to customers for which the Company has an unconditional right to payment. Billed and unbilled amounts for which payment is contingent on anything other than the passage of time are included in contract assets and contract liabilities on a net basis at the individual contract level.

Retainage for which the Company has an unconditional right to payment that is subject only to the passage of time is included in contracts receivable.

Allowance for credit losses

Financial assets, which potentially subject the Company to credit losses, consist primarily of contract receivables and contract assets. The Company recognizes an allowance for credit losses for financial assets measured at amortized cost to present the net amount expected to be collected as of the balance sheet date in accordance with Financial Accounting Standards Board (FASB) Accounting Standard Codification (ASC) 326, Financial Instruments - Credit Losses. Such allowance is based on the credit losses expected to arise over the life of the asset. The allowance for credit losses is based on the Company’s historical losses, the existing economic conditions in the construction industry, and the financial stability of its customers. Amounts are considered past due based on the billing date and are written off after all reasonable collection efforts have been exhausted. Expected recoveries of amounts previously written off, not to exceed the aggregate of the amount previously written off, are included in determining the necessary reserve at the balance sheet date. The allowance for credit losses was $950,000 at September 30, 2024.

Inventory

Inventories consist primarily of stockpiles of rock, sand and gravel, liquid asphalt, supplies, and other materials. Inventories are carried at the lower of cost or net realizable value using the first- in, first-out method.

Fixed assets

Fixed assets are reported at cost less accumulated depreciation, which is generally provided on a straight-line method over the estimated useful lives of the assets. Estimated useful lives range from three to forty years. Significant expenditures, which extend the useful lives of existing assets, are capitalized. Maintenance and repair costs are expensed as incurred.

 

9

Asphalt, Inc., LLC dba Lone Star Paving Company and ACE Aggregates, LLC

Notes to Consolidated and Combined Financial Statements

September 30, 2024

 

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Business combinations

The Company records business acquisitions in accordance with FASB ASC 805, Business Combination which requires the acquisition purchase price to be allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition dates. The excess of the purchase price over these estimated fair values is recorded to goodwill. Significant estimates and assumptions, including fair value estimates, are used to determine the fair value of assets acquired, liabilities assumed, and contingent consideration transferred as well as the useful lives of long-lived assets acquired. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill based on changes to initial estimates and assumptions. Upon conclusion of the measurement period or final determination of the values of assets acquired and liabilities assumed, whichever comes first, any subsequent adjustments are recorded to operating expenses on the accompanying consolidated and combined statement of operations.

Goodwill

The Company has accounted for goodwill in accordance with the FASB ASC 350, Intangibles - Goodwill and Other. The carrying amount of goodwill is reviewed annually and whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. During the year ending September 30, 2024, the Company did not identify an event or circumstance that indicated the fair value of the Company is below its carrying value.

Long-lived assets - impairments and disposals

The Company reviews the carrying values of its long-lived and identifiable intangible assets for possible impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Any long-lived assets held for disposal are reported at the lower of their carrying amounts or fair value less cost to sell. No impairment provisions were recorded by the Company during the year.

 

10

Asphalt, Inc., LLC dba Lone Star Paving Company and ACE Aggregates, LLC

Notes to Consolidated and Combined Financial Statements

September 30, 2024

 

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Operating leases

The Company leases land and equipment under various operating leases with terms exceeding one year, exclusive of optional renewal periods, and accounts for these leases in accordance with FASB ASC 842, Leases (“ASC 842”). This guidance requires lessees to recognize a lease liability and a right-of-use asset for all leases, including operating leases, with terms greater than 12 months on its balance sheet. Whether an arrangement contains a lease is evaluated at the inception of the arrangement. The Company estimates its lease liability at the present value of future rent payments required under a lease using its incremental borrowing rate for a term approximating the lease term, exclusive of optional term extensions or terminations. The Company’s right-of-use asset initially is equal to its lease liability, adjusted for any lease incentives received or lease payments made. Rent expense is recorded on a straight-line basis over the term of a lease. At September 30, 2024, the Company does not lease any assets under finance leases. Leases of 12 months or less are not included in the Company’s right-of-use assets and lease liabilities. Rent expense for such leases is recorded on a straight-line basis over the term of the lease.

Revenue and cost recognition

FASB ASC 606, Revenue from Contracts with Customers, (“ASC 606”) requires entities to assess the products or services promised in contracts with customers at contract inception to determine the appropriate unit at which to record revenue, which is referred to as a performance obligation. Revenue is recognized when control of the promised products or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for the products or services.

Revenue from contracts with customers is recognized using the following five steps:

 

•

Identify the contract(s) with a customer;

 

•

Identify the performance obligations in the contract;

 

•

Determine the contract price;

 

•

Allocate the transaction price to the performance obligations in the contract; and

 

•

Recognize revenue when (or as) the Company satisfies a performance obligation

The Company’s performance obligations for contracts with customers for asphalt sales do not meet the criteria to be recognized over time, therefore, those performance obligations are recognized at a point-in-time and the related revenue is recognized only when the performance obligation is complete, generally upon delivery to the customer. Revenue from the sale of asphalt is recognized upon delivery of the asphalt to the customer’s transportation unit at the asphalt plant.

 

11

Asphalt, Inc., LLC dba Lone Star Paving Company and ACE Aggregates, LLC

Notes to Consolidated and Combined Financial Statements

September 30, 2024

 

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Revenue and cost recognition (continued)

The Company’s paving contract costs and related revenues are generally recognized over time as work progresses due to continuous transfer to the customer. Revenues from fixed-price and modified fixed-price construction contracts are recognized on the percentage-of-completion method measured by the cost-to-cost method. This method is used because management considers expended costs to be the best available measure of progress on these contracts.

Contract costs include all direct material and labor costs and those indirect costs related to contract performance, such as indirect labor, equipment rental, supplies, tools, repairs and depreciation costs. Selling, general and administrative costs are charged to expense as incurred. Provisions for estimated losses on uncompleted contracts are made in the year in which such losses are determined. Changes in job performance, job conditions and estimated profitability, including those arising from contract penalty provisions and final contract settlements, may result in revisions to costs and income and are recognized in the year in which the revisions are determined. Profit incentives are included in revenues when their realization is reasonably assured. Claims are charged against revenues when realization is probable and can be reasonably estimated.

The asset on the accompanying consolidating and combined balance sheet, “Costs and estimated earnings in excess of billings on uncompleted contracts,” represents revenues recognized in excess of amounts billed. The liability on the accompanying consolidated and combined balance sheet, “Billings in excess of costs and estimated earnings on uncompleted contracts,” represents billings in excess of revenues recognized.

Advertising expense

The Company accounts for advertising costs as expenses in the year in which they are incurred. Advertising expense for the year ending September 30, 2024 was $249,234 and is included in selling, general and administrative expenses on the accompanying consolidated and combined statement of income.

Income taxes

The Company is a limited liability company, and such does not incur income taxes directly. Accordingly, all income and expenses flow directly to the members for Federal income tax purposes. Therefore, no provision or liability for current or deferred federal income taxes has been included in these consolidated and combined financial statements. However, the Company is subject to state tax based on the Company’s taxable gross margin.

 

12

Asphalt, Inc., LLC dba Lone Star Paving Company and ACE Aggregates, LLC

Notes to Consolidated and Combined Financial Statements

September 30, 2024

 

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Income taxes (continued)

The FASB ASC, 740-10 Accounting for Uncertainty in Income Taxes clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. ASC 740-10 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC 740 requires that a company recognize in its financial statements the impact of tax positions that meet a “more likely than not” threshold, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement.

The Company did not identify any uncertain tax positions therefore, no adjustments were made to the consolidated and combined financial statements.

Sales tax

The Company records sales and other taxes collected from customers and subsequently remitted to government authorities as accounts receivable with a corresponding offset to sales tax payable. The Company removes sales tax payable balances from the consolidated and combined balance sheet as cash is collected from the customer and remitted to the tax authority.

Concentration of credit risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and contract receivables. The Company maintains its cash balances in highly rated financial institutions, which at times may exceed federally insured limits. The Company has not experienced any loss relating to cash and cash equivalents in these accounts.

The Company is engaged primarily in highway and road paving, maintenance and repair of parking lots in the Central and South Texas region. Concentrations of credit risk with respect to contract receivables are with property management companies, construction companies and developers. Liens are filed on properties when necessary to assure payment. The Company performs periodic credit evaluations of its customers’ financial condition and generally does not require collateral.

One customer represented 25% of the Company’s total revenues and total contract receivables at and as of September 30, 2024, respectively.

The Company purchases a substantial portion of materials from third-party vendors. As of September 30, 2024, one represented 14% of the Company’s total accounts payable. The Company believes there are numerous other suppliers that could be substituted should the supplier become unavailable or non-competitive.

 

13

Asphalt, Inc., LLC dba Lone Star Paving Company and ACE Aggregates, LLC

Notes to Consolidated and Combined Financial Statements

September 30, 2024

 

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Subsequent events

The Company has evaluated subsequent events occurring after September 30, 2024, the date of the most recent consolidated and combined balance sheet date, through January 13, 2025, the date the consolidated and combined financial statements were issued. See specific subsequent events disclosed in Note 15.

 

3.	CONTRACT RECEIVABLES

Contract receivables consisted of the following:

 

Balance at October 1, 2023		$	77,924,959
Accounts receivable - trade			83,079,391
Accounts receivable - retention			13,439,655
			96,519,046
Allowance for credit losses			(950,000	)
		$	95,569,046

 

4.	COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS

Costs and estimated earnings on uncompleted contracts are summarized as follows:

 

Costs incurred on uncompleted contracts		$	240,387,115
Estimated earnings on uncompleted contracts			28,714,470
			269,101,585
Less: billings on uncompleted contracts			(274,995,264	)
		$	(5,893,679	)

Costs, estimated earnings and billings on uncompleted contracts are included in the accompanying consolidated and combined balance sheet under the following captions:

 

		Balance at October 1, 2023				Balance at September 30, 2024
Costs and estimated earnings on uncompleted contracts in excess of billings		$	3,469,164			$	3,580,659
Billings in excess of costs and estimated earnings on uncompleted contracts			(7,337,580	)			(9,474,338	)
		$	(3,868,416	)		$	(5,893,679	)

 

14

Asphalt, Inc., LLC dba Lone Star Paving Company and ACE Aggregates, LLC

Notes to Consolidated and Combined Financial Statements

September 30, 2024

 

5.

INVENTORY

Inventory consisted of the following:

 

Raw materials - sand and aggregates		$	23,139,121
Raw materials - fluid			2,999,259
		$	26,138,380

 

6.	FIXED ASSETS

Fixed assets consisted of the following:

 

Construction equipment		$	80,496,425
Trucks and trailers			44,147,085
Land			89,764,789
Hotmix and mining equipment			109,518,404
Buildings			1,035,215
Computer and office equipment			450,913
Accumulated depreciation			(89,144,604	)
			236,268,227
Construction in process			11,793,413
		$	248,061,640

Depreciation expense totaled $21,939,485 for the year and is included in cost of paving and material revenues, and selling, general and administrative expenses on the accompanying consolidated and combined statement of income.

 

7.	ACQUISITIONS

In November of 2023, the Company completed the asset purchase of an entity engaged in the business of producing, transporting, distributing and selling construction aggregates. The total purchase price was $29,482,625 which was paid in cash. The goodwill arising from the acquisition consists largely of the Company’s efforts to expand operations in Texas. The acquisition has been accounted for as a business combination under ASC 805.

The purchase price was allocated to the assets acquired based on their fair value at the acquisition date which are reflected in the accompanying consolidated and combined balance sheet as follows.

 

15

Asphalt, Inc., LLC dba Lone Star Paving Company and ACE Aggregates, LLC

Notes to Consolidated and Combined Financial Statements

September 30, 2024

 

7.	ACQUISITIONS (continued)

Allocation of purchase price:

 

Inventory		$	2,804,624
Equipment			5,667,500
Land			17,849,000
Goodwill			3,161,501
		$	29,482,625

In February 2024, the Company completed the asset purchase of an entity engaged in the business of producing, transporting, distributing and selling hot mix asphalt. The total purchase price was $20,714,733 which was paid in cash. The goodwill arising from the acquisition consists largely of the Company’s efforts to expand operations in Texas. The acquisition has been accounted for as a business combination under ASC 805.

The estimated fair values of assets acquired are provisional and are based on the information that was available as of the acquisition date. The Company believes that information provides a reasonable basis for estimating the fair values of assets acquired, but the company is waiting for additional information necessary to finalize those fair values. Therefore, the provisional measurements of fair value reflected are subject to change and such changes could be significant. The Company expects to finalize the valuation and complete the purchase price allocation as soon as practicable but no later than one year from the acquisition date.

Accordingly, the purchase price was preliminarily allocated to the assets acquired based on their fair value at the acquisition date which are reflected in the accompanying consolidated and combined balance sheet as follows.

Allocation of purchase price:

 

Inventory		$	701,398
Equipment			8,624,835
Land			7,820,000
Goodwill			3,568,500
		$	20,714,733

 

8.

LEASES

For the year ended September 30, 2024, operating lease expense was approximately $1,300,000.

 

16

Asphalt, Inc., LLC dba Lone Star Paving Company and ACE Aggregates, LLC

Notes to Consolidated and Combined Financial Statements

September 30, 2024

 

8.	LEASES (continued)

At September 30, 2024, future minimum payments due under these operating leases agreements were as follows:

 

Year ending September 30,
2025		$	725,258
2026			515,701
2027			435,557
2028			342,346
2029			168,826
			2,187,688
Less: discount to present value			(238,340	)
		$	1,949,348

The weighted average remaining lease term was 3.70 years and the weighted average discount rate was 5.90% as of September 30, 2024.

 

9.	LINES OF CREDIT

The Company entered into a $40 million line of credit with a bank that expires in November 2026. On June 20, 2024, an amendment was entered into on this note to temporarily increase the principal amount to $60,000,000 for the period from June 20, 2024 through and including October 31, 2024. After November 1, 2024, the aggregate principal amount will reduce to $35,000,000. Bank advances on the credit line are payable on demand and carry an interest rate at 2.0% above Secured Overnight Financing Rate (SOFR) Average, which was 5.16% at September 30, 2024. The line is secured by substantially all assets of the Company. There was a balance of $13,668,194 on the line of credit as of September 30, 2024.

The Company also entered into a $1 million line of credit with a bank that expired on September 19, 2024. Effective December 6, 2023, the line of credit expiration date was amended to September 30, 2025 and effective May 9, 2024, the principal amount was increased to $10 million. Bank advances on the credit line are payable on demand and carry an interest rate at 4.10%. The line is secured by substantially all assets of the Company. There was a balance of $500,000 on the line of credit as of September 30, 2024.

Interest expense for the line of credit totaled $1,446,675 for the year ended September 30, 2024 and is included in interest expense on the accompanying consolidated and combined statement of income.

 

17

Asphalt, Inc., LLC dba Lone Star Paving Company and ACE Aggregates, LLC

Notes to Consolidated and Combined Financial Statements

September 30, 2024

 

10.	LONG-TERM DEBT

Long-term debt consisted of the following:

 

Note payable to a finance company with principal plus interest due in 60 monthly installments of $440,000 bearing an interest rate of 3.69%, secured by equipment, guaranteed by certain members of the Company.		$	3,080,000
Note payable to a finance company with principal plus interest due in 60 monthly installments of $250,000 bearing an interest rate of 3.57%, secured by equipment.			5,250,000
Note payable to a finance company with principal plus interest due in 60 monthly installments of $125,000 bearing an interest rate of 3.57%, secured by equipment.			3,125,313
Note payable to a finance company with principal plus interest due in 60 monthly installments of $200,008 bearing an interest rate of 5.99%, secured by equipment.			8,000,334
Note payable to an individual with principal plus interest due in 84 monthlyinstallments of $39,383 bearing an interest rate of 8.50%.			1,970,599
Note payable to an individual with principal plus interest due in 84 monthly installments of $39,282 bearing an interest rate of 8.50%.			1,970,599
Note payable to a limited liability company with principal plus interest due in 84 monthly installments of $143,474 bearing an interest rate of 8.50%.			7,086,389
Note payable to a bank with principal plus interest due in monthly payments of $159,000, a balloon payment for the full amount due in October 2028,bearing an interest rate of 3.00%.			26,924,019
Note payable to a limited liability company with principal plus interest due in 84 monthly payments of $39,044, bearing an interest rate of 8.50%.			2,340,222
Note payable to a limited liability company with principal plus interest due in 84 monthly payments of $31,417, bearing an interest rate of 8.50%.			1,566,458
Note payable to a bank with principal plus interest due in monthly payments of $173,878, bearing an interest rate of 7.77%.			5,531,878
Note payable to a bank with principal plus interest due in monthly payments of $37,945, bearing an interest rate of 7.90%.			1,355,965
Note payable to a bank with principal plus interest due in monthly payments of $50,750, bearing an interest rate of 7.53%.			2,204,299
Note payable to a finance company with principal plus interest due in 60 monthly installments of $185,945, bearing an interest rate of 7.16%.			10,784,814

 

18

Asphalt, Inc., LLC dba Lone Star Paving Company and ACE Aggregates, LLC

Notes to Consolidated and Combined Financial Statements

September 30, 2024

 

10.	LONG-TERM DEBT (continued)

 

Note payable to a bank with principal plus interest due in monthly payments of $47,230, bearing an interest rate of 6.35%.			9,351,618
Note payable to a bank with principal plus interest due in monthly payments of $219,413, bearing an interest rate of 6.35%.			43,443,821
Note payable to a bank with principal plus interest due in monthly payments of $50,750, bearing an interest rate of 7.53%.			13,388,427
Note payable to a bank with principal plus interest due in monthly payments of $50,750, bearing an interest rate of 7.53%.			7,234,168
Note payable to a bank with principal plus interest due in monthly payments of $45,650, bearing an interest rate of 4.10%.			1,278,200
Note payable to a finance company with principal plus interest due in 60 monthly installments of $41,675, bearing an interest rate of 6.74%.			1,667,000
Note payable to a related party with principal plus interest due in annual payments of $14,886, a balloon payment for the full unpaid amount due December 31, 2027, bearing an interest rate of 1.50%.			992,371
			158,546,494
Current portion			(27,612,500	)
		$	130,933,994

The future maturities of the long-term debt are as follows:

 

Year ending September 30,
2025		$	27,612,500
2026			24,620,061
2027			21,820,020
2028			36,411,652
2029			47,264,467
Thereafter			817,794
			158,546,494
Current portion			(27,612,500	)
		$	130,933,994

Interest expense for the long-term debt obligations totaled $8,232,908 for the year ended September 30, 2024 and is included in interest expense on the accompanying consolidated and combined statement of income.

 

19

Asphalt, Inc., LLC dba Lone Star Paving Company and ACE Aggregates, LLC

Notes to Consolidated and Combined Financial Statements

September 30, 2024

 

11.	MEMBERS’ CAPITAL

Members’ capital consists of membership units. As of September 30, 2024, there are 384,637 membership units issued and outstanding. No additional membership units in the Company may be issued in the absence of the affirmative vote of the members holding at least 85% of the units.

Distributions are paid based on the respective membership interest. Distributions of $35,000,000 were paid in the year ending September 30, 2024. Contributions of $750,000 were received.

Management of the Company shall be performed by the Operating Manager. The Operating Manager may be removed as a manager upon the affirmative vote of the Members holding at least 85% of the units.

 

12.	COMMITMENTS AND CONTINGENCIES

Legal proceedings

The Company carries a broad range of insurance coverage, including general liability, workers’ compensation and an umbrella policy.

In the normal course of business, the Company is subject to various litigation; however, there are no legal proceedings pending against the Company that would have a material adverse effect on the financial position or results of operations of the Company.

 

13.	RETIREMENT PLAN

The Company maintains a 401(k) defined contribution plan for its qualified employees. The 401(k) plan allows eligible employees to defer a portion of their annual compensation. The Company provides matching contributions and contributions to this plan are discretionary. Contributions to the plan totaled $1,666,145 for the year ending September 30, 2024.

 

14.	RELATED PARTY TRANSACTIONS

The Company was invested in two partnerships recorded under the equity method of accounting which sell readymix concrete and precast in Central Texas. In June of 2024, the Company purchased the remaining equity membership interests of the partnerships via a step acquisition, resulting in 100% ownership of both Partnerships. The Company remeasured its equity method interest to fair value, resulting in a net gain of $10,253,392. Simultaneously, certain assets of the partnership were exchanged with a member for the redemption of 20% ownership in Asphalt, Inc., LLC totaling $105,531,250.

 

20

Asphalt, Inc., LLC dba Lone Star Paving Company and ACE Aggregates, LLC

Notes to Consolidated and Combined Financial Statements

September 30, 2024

 

14.	RELATED PARTY TRANSACTIONS (continued)

The Company engages in business transactions with entities that have common minority ownership and/or employees. These activities include construction projects, subcontractor work, trucking, rent and royalties. The Company does not guarantee any of the liabilities of these entities. Additionally, the Company and these entities have no common primary beneficiary. Amounts due from and to these entities at September 30, 2024 were approximately $420,000 and $1,720,000, respectively. Amounts received from and paid to these entities during the year ended September 30, 2024 were approximately $1,560,000 and $9,420,000, respectively.

On December 31, 2023 the Company issued two notes receivable to related entities totaling $3,100,000. The notes bear interest at 3.5%, and interest-only payments are payable annually, with principal due December 31, 2028. On December 31, 2023, the Company issued a note receivable to a related entity totaling $4,800,000. The note bears interest at 5.0%, and interest and principal payments are payable monthly, with a maturity date of January 1, 2049. On December 1, 2023, the Company issued a note receivable to a related entity totaling $2,735,000. The note bears interest at 5.0%, and interest-only payments are payable monthly through December 31, 2024. Beginning January 1, 2025, principal and interest payments are payable monthly, with a maturity date of December 1, 2028. These notes are included in related party notes receivable on the accompanying consolidated and combined balance sheet, along with various existing notes receivables from related entities. The existing notes bear interest at 1.5%, and interest-only payments are payable annually, with principal due December 30, 2026. Outstanding balances on the related party notes receivable totaled $6,100,000 as of September 30, 2024. Interest income on these notes for the year ended September 30, 2024 totaled approximately $377,000 and is recorded in Other income on the accompanying consolidated and combined financial statements.

In January 2024, the Company purchased a 1,089 acre parcel of land from a related party for approximately $36,000,000 through a combination of cash and financing with a note payable to a bank with principal plus interest due in monthly payments of $47,230, bearing an interest rate of 6.35%.

On June 28, 2024, the Company issued nine notes payable to related parties totaling $57,742,500. These notes bear interest at 6.0% and are payable in a lump sum due January 1, 2025. During the year ended September 30, 2024, the Company made early payments on these notes totaling $4,030,000.

 

15.	SUBSEQUENT EVENTS

On October 17, 2024 the Company acquired all outstanding membership units of ACE Aggregates, LLC. The purchase price was $55,000,000 and consisted of a cash payment to members of $45,406,604 and the payoff of existing loans and fees totaling $9,593,396.

 

21

Asphalt, Inc., LLC dba Lone Star Paving Company and ACE Aggregates, LLC

Notes to Consolidated and Combined Financial Statements

September 30, 2024

 

15.	SUBSEQUENT EVENTS (continued)

On November 1, 2024 all outstanding membership units of the Company were acquired by Construction Partners, Inc. The aggregate consideration delivered at the closing of the acquisition consisted of (i) $654.2 million in cash and 3,000,000 shares of Class A common stock having an aggregate fair market value of approximately $238.9 million at closing. In addition, the acquiring party agreed to (i) pay cash to the selling unit holders in an amount equal to the working capital remaining in the Company at closing, as finally determined (subject to adjustments and offsets to satisfy certain indemnification obligations and any purchase price overpayments), to be paid out in quarterly installments over four quarters following the closing and (ii) purchase from the selling unit holders for $30 million in cash an entity that owns certain real property following receipt of specified operational entitlements by such entity.

 

22

SUPPLEMENTARY INFORMATION

Asphalt, Inc., LLC dba Lone Star Paving Company and ACE Aggregates, LLC

Schedule of Earnings from Construction Contracts

For the Year Ended September 30, 2024

 

 

		Revenues Earned				Cost of Revenues Earned				Gross Profit
Contracts in progress at year end			217,100,147				191,164,105				25,936,042
Contracts Completed during the period			229,983,169				160,321,377				69,661,792
			447,083,316				351,485,482				95,597,834

 

24

Asphalt, Inc., LLC dba Lone Star Paving Company and ACE Aggregates, LLC

Schedule of Earnings from Completed Contracts

For the Year Ended September 30, 2024

 

 

		Total Contract								Contract Totals												Before October 1, 2023												Period Ended September 30, 2024
Job Name		Contract Price				Gross Profit				Revenues Earned				Cost of Revenues				Gross Profits (Loss)				Revenues Earned				Cost of Revenues				Gross Profits (Loss)				Revenues Earned				Cost of Revenues				Gross Profits (Loss)
52647		$	23,803,210			$	4,835,595			$	23,803,210			$	18,967,615			$	4,835,595			$	23,617,063			$	18,868,059			$	4,749,004			$	186,147			$	99,556			$	86,591
75284			17,371,584				1,676,022				17,371,584				15,695,562				1,676,022				17,265,751				15,652,464				1,613,287				105,833				43,098				62,735
129284			15,379,536				1,270,285				15,379,536				14,109,251				1,270,285				15,282,214				14,109,185				1,173,029				97,321				65				97,256
75519			15,288,522				2,158,231				15,288,522				13,130,291				2,158,231				11,281,307				9,069,760				2,211,547				4,007,215				4,060,531				(53,316	)
53716			10,514,519				1,921,591				10,514,519				8,592,929				1,921,591				1,290,414				1,143,640				146,773				9,224,106				7,449,288				1,774,818
53186			7,367,579				1,686,034				7,367,579				5,681,546				1,686,034				7,074,176				5,624,322				1,449,854				293,403				57,223				236,179
75359			6,957,351				105,292				6,957,351				6,852,059				105,292				5,554,872				5,798,874				(244,002	)			1,402,479				1,053,185				349,294
131476			6,900,057				(61,530	)			6,900,057				6,961,587				(61,530	)			6,596,122				6,586,694				9,428				303,935				374,893				(70,958	)
75453			6,687,091				(239,240	)			6,687,091				6,926,330				(239,240	)			4,957,858				4,944,743				13,115				1,729,233				1,981,587				(252,355	)
53328			6,623,533				244,315				6,623,533				6,379,218				244,315				4,295,175				4,226,175				69,000				2,328,358				2,153,043				175,315
53304			5,846,641				405,591				5,846,641				5,441,050				405,591				4,229,267				3,915,587				313,679				1,617,374				1,525,462				91,912
52526			5,624,145				681,936				5,624,145				4,942,209				681,936				3,216,096				2,995,103				220,993				2,408,049				1,947,106				460,943
133126			5,352,457				815,438				5,352,457				4,537,019				815,438				2,194,520				2,020,865				173,655				3,157,937				2,516,154				641,784
131158			3,666,994				646,720				3,666,994				3,020,274				646,720				3,507,290				2,899,416				607,874				159,704				120,858				38,845
53625			3,575,759				357,706				3,575,759				3,218,053				357,706				3,225,303				3,068,168				157,135				350,456				149,885				200,571
52705			3,409,153				(70,159	)			3,409,153				3,479,312				(70,159	)			3,348,994				3,479,312				(130,318	)			60,159				—				60,159
52958			3,271,032				342,815				3,271,032				2,928,217				342,815				3,135,375				2,928,217				207,159				135,657				—				135,657
66164			3,146,401				625,634				3,146,401				2,520,767				625,634				—				—				—				3,146,401				2,520,767				625,634
131297			3,017,207				471,993				3,017,207				2,545,214				471,993				1,819,355				1,670,379				148,977				1,197,852				874,836				323,016
75873			2,980,238				157,564				2,980,238				2,822,674				157,564				2,235,249				2,123,263				111,986				744,989				699,411				45,578
52058			2,819,894				1,246,931				2,819,894				1,572,963				1,246,931				2,662,279				1,440,315				1,221,964				157,615				132,648				24,967
53956			2,635,047				616,942				2,635,047				2,018,104				616,942				—				—				—				2,635,047				2,018,104				616,942
131159			2,587,261				75,911				2,587,261				2,511,350				75,911				1,215,921				1,157,225				58,696				1,371,340				1,354,125				17,215
53368			2,560,374				349,779				2,560,374				2,210,595				349,779				—				—				—				2,560,374				2,210,595				349,779
Small Jobs			401,954,295				93,112,751				401,954,296				308,841,546				93,112,750				211,352,110				181,862,590				29,489,520				190,602,186				126,978,956				63,623,230
		$	569,339,880			$	113,434,146			$	569,339,881			$	455,905,735			$	113,434,146			$	339,356,712			$	295,584,358			$	43,772,354			$	229,983,169			$	160,321,377			$	69,661,792

 

25

Asphalt, Inc., LLC dba Lone Star Paving Company and ACE Aggregates, LLC

Schedule of Earnings from Contracts in Progress

For the Year Ended September 30, 2024

 

		Total Contract												Contract Totals												At September 30, 2024								Before October 1, 2023												Period Ended September 30, 2024
Job Name		Contract Price				Estimated Gross Profit (loss)				Billed to Date				Cost to Date				Total Estimated Costs				Earned Profit (loss) to Date				Costs in Excess Billings				Billings in Excess Costs				Revenues Earned				Cost of Revenues				Gross Profit (loss)				Revenues Earned				Cost of Revenues				Gross Profits (Loss)
53317		$	72,287,560			$	4,424,208			$	8,895,544			$	6,512,286			$	67,863,352			$	424,555			$	—			$	1,958,703			$	5,724,554			$	5,263,344			$	461,210			$	1,212,286			$	1,248,942			$	(36,655	)
54011			46,881,522				4,699,471				17,842,205				14,352,778				42,182,051				1,599,032				—				1,890,395				—				—				—				15,951,810				14,352,778				1,599,032
134005			43,333,410				3,918,755				8,024,888				7,287,617				39,414,655				724,563				—				12,709				—				—				—				8,012,180				7,287,617				724,563
53661			39,545,290				4,467,834				34,778,495				30,161,935				35,077,456				3,841,742				—				774,817				1,120,522				1,074,773				45,749				32,883,156				29,087,163				3,795,993
133269			34,412,552				2,722,867				5,334,750				4,238,016				31,689,685				364,142				—				732,592				—				—				—				4,602,158				4,238,016				364,142
134113			26,358,888				3,732,595				—				115,552				22,626,293				19,062				134,614				—				—				—				—				134,614				115,552				19,062
132059			25,098,749				2,110,837				18,504,323				16,565,623				22,987,913				1,521,118				—				417,582				10,428,617				9,816,028				612,589				7,658,124				6,749,595				908,529
134074			24,306,099				1,878,847				236,251				194,687				22,427,251				16,310				—				25,255				—				—				—				210,997				194,687				16,310
130293			23,757,466				974,520				14,570,857				15,215,126				22,782,946				650,813				1,295,083				—				9,282,835				9,616,224				(333,389	)			6,583,105				5,598,902				984,203
52937			22,590,395				469,588				10,310,424				9,879,085				22,120,807				209,716				—				221,623				4,688,098				4,575,651				112,447				5,400,704				5,303,434				97,270
133125			21,145,235				3,234,701				20,291,672				17,190,397				17,910,535				3,104,641				3,366				—				117,733				110,293				7,440				20,177,306				17,080,105				3,097,201
134162			17,623,164				2,670,183				929,632				853,124				14,952,981				152,344				75,836				—				—				—				—				1,005,468				853,124				152,344
132288			11,204,959				1,810,629				3,028,251				2,760,771				9,394,331				532,101				264,621				—				633,350				545,508				87,842				2,659,522				2,215,263				444,259
54013			9,935,017				1,446,472				9,924,067				8,488,545				8,488,545				1,446,472				10,950				—				—				—				—				9,935,017				8,488,545				1,446,472
53970			9,884,430				1,171,567				9,443,758				8,311,991				8,712,863				1,117,664				—				14,103				—				—				—				9,429,655				8,311,991				1,117,664
131321			9,402,311				227,624				7,993,535				8,159,007				9,174,686				202,425				367,897				—				3,433,173				3,171,764				261,410				4,928,258				4,987,243				(58,985	)
52876			8,798,010				598,952				7,704,070				7,102,635				8,199,058				518,857				—				82,578				3,534,023				3,505,314				28,709				4,087,469				3,597,321				490,148
131362			8,622,925				2,036,346				6,458,220				4,750,808				6,586,579				1,468,788				—				238,624				3,737,339				3,028,405				708,934				2,482,258				1,722,403				759,854
54012			8,090,188				845,116				7,564,094				6,774,530				7,245,073				790,228				664				—				—				—				—				7,564,758				6,774,530				790,228
53631			7,922,860				764,849				3,602,682				2,914,163				7,158,011				311,385				—				377,134				—				—				—				3,225,548				2,914,163				311,385
75953			7,181,536				474,217				2,046,047				1,996,273				6,707,319				141,139				91,365				—				—				—				—				2,137,412				1,996,273				141,139
54041			6,556,070				245,585				1,738,734				1,543,025				6,310,485				60,050				—				135,659				—				—				—				1,603,075				1,543,025				60,050
53517			6,411,102				522,589				4,101,133				3,650,974				5,888,513				324,014				—				126,146				1,219,225				1,138,468				80,757				2,755,762				2,512,506				243,257
133196			6,343,963				516,196				750,779				621,995				5,827,767				55,093				—				73,691				—				—				—				677,089				621,995				55,093
53828			6,253,991				385,763				3,717,293				3,367,021				5,868,229				221,340				—				128,932				33,398				33,213				185				3,554,962				3,333,808				221,155
134105			6,140,613				610,779				491,636				391,903				5,529,833				43,286				—				56,447				—				—				—				435,189				391,903				43,286
134001			5,670,349				491,830				1,707,002				1,510,339				5,178,519				143,444				—				53,219				—				—				—				1,653,784				1,510,339				143,444
53969			5,571,501				720,181				5,246,001				4,542,500				4,851,320				674,336				—				29,165				—				—				—				5,216,837				4,542,500				674,336
54042			5,366,852				132,647				1,803,466				2,194,186				5,234,205				55,606				446,326				—				—				—				—				2,249,792				2,194,186				55,606
134002			5,349,116				339,468				513,507				466,324				5,009,648				31,599				—				15,584				—				—				—				497,923				466,324				31,599
54269			5,079,255				216,620				—				28,677				4,862,636				1,277				29,954				—				—				—				—				29,954				28,677				1,277
53419			4,737,365				266,596				2,140,279				1,769,081				4,470,769				105,492				—				265,706				264,696				258,494				6,202				1,609,877				1,510,587				99,290
54285			4,582,540				166,612				764,789				563,426				4,415,928				21,258				—				180,105				—				—				—				584,684				563,426				21,258
52947			4,443,939				183,810				3,198,621				3,109,379				4,260,129				134,159				44,917				—				1,804,417				1,703,841				100,576				1,439,121				1,405,538				33,583
54078			4,066,964				1,043,808				3,913,578				2,883,554				3,023,156				995,607				—				34,416				—				—				—				3,879,161				2,883,554				995,607
54014			4,021,270				333,471				3,904,516				3,586,799				3,687,799				324,338				6,621				—				—				—				—				3,911,137				3,586,799				324,338
54217			3,848,917				190,400				—				22,565				3,658,517				1,174				23,739				—				—				—				—				23,739				22,565				1,174
54061			3,625,474				278,459				776,434				660,147				3,347,015				54,922				—				61,365				—				—				—				715,069				660,147				54,922
53562			3,575,591				645,646				2,590,157				2,081,193				2,929,945				458,614				—				50,351				51,499				48,944				2,555				2,488,307				2,032,249				456,058
53879			3,505,118				361,236				2,044,558				1,747,273				3,143,882				200,764				—				96,522				—				20,962				(20,962	)			1,948,037				1,726,311				221,726
134106			3,118,032				371,091				484,004				322,057				2,746,941				43,508				—				118,440				—				—				—				365,565				322,057				43,508
133118			2,875,857				179,250				2,329,756				2,233,623				2,696,607				148,474				52,341				—				177,832				164,017				13,816				2,204,265				2,069,607				134,659
53401			2,850,414				363,198				1,435,466				1,212,664				2,487,216				177,080				—				45,721				35,829				32,182				3,647				1,353,916				1,180,482				173,433
76142			2,659,959				83,476				—				122,577				2,576,483				3,971				126,548				—				—				—				—				126,548				122,577				3,971
53769			2,619,329				150,865				587,913				488,490				2,468,464				29,855				—				69,568				—				—				—				518,345				488,490				29,855
54192			2,147,035				203,607				2,147,035				1,823,428				1,943,428				191,035				—				132,572				—				—				—				2,014,463				1,823,428				191,035
134015			2,108,498				193,597				1,194,250				1,080,765				1,914,901				109,265				—				4,220				—				—				—				1,190,030				1,080,765				109,265
76055			2,105,542				163,184				71,745				65,226				1,942,357				5,480				—				1,039				—				—				—				70,706				65,226				5,480
131133			2,089,006				(7,012	)			1,572,292				1,616,502				2,096,018				(5,408	)			38,802				—				943,313				908,079				35,235				667,781				708,424				(40,643	)
Small Jobs			48,012,764				7,252,981				28,286,553				22,856,474				40,759,783				4,947,737				567,014				1,049,357				4,770,987				4,207,510				563,477				23,033,226				18,648,966				4,384,260
		$	644,118,993			$	61,286,110			$	274,995,264			$	240,387,115			$	582,832,883			$	28,714,470			$	3,580,659			$	9,474,338			$	52,001,440			$	49,223,012			$	2,778,428			$	217,100,147			$	191,164,105			$	25,936,042

 

26

Asphalt, Inc., LLC dba Lone Star Paving Company and ACE Aggregates, LLC

Schedule of Selling, General and Administrative Expenses

For the Year Ended September 30, 2024

 

Advertising and promotion		$	249,234
Auto and trucks			43,383
Bank charges			606,403
Bad debt			448,975
Computer and internet			901,537
Depreciation			62,960
Dues and subscriptions			620,070
Other			397,803
Insurance			1,572,562
Meals and entertainment			1,675,717
Office supplies			1,296,771
Payroll and benefits			14,050,682
Professional fees			447,522
Rent			865,646
Retirement			383,006
Taxes and permits			570,088
Utilities			439,127
		$	24,631,486

 

27

Asphalt, Inc., LLC dba Lone Star Paving Company and ACE Aggregates, LLC

Consolidated and Combining Balance Sheet

September 30, 2024

 

		Lone Star Paving Company				Pelican Asphalt Company, LLC				Lone Star Materials & LLC Asphalt,				Lone Star Assets Investment Holdings				Burnet Land Investments				Consolidation Eliminations				Consolidated				ACE Aggregates, LLC				Combination Eliminations				Consolidated and Combined
Assets
Cash		$	2,074,708			$	—			$	1,929,296			$	4,921,120			$	176,392			$	—			$	9,101,516			$	1,086,774			$	—			$	10,188,290
Contract receivables			93,505,972				—				2,315,477				—				—				(2,485,701	)			93,335,748				2,388,251				(154,953	)			95,569,046
Costs and estimated earnings on uncompletedcontracts in excess of billings			3,580,659				—				—				—				—				—				3,580,659				—				—				3,580,659
Other assets			—				—				—				1,957,557				—				—				1,957,557				—				—				1,957,557
Inventory			24,038,131				—				—				—				—				—				24,038,131				2,100,249				—				26,138,380
Related party notes receivable			—				—				—				10,835,000				—				—																6,100,000
Related party investments			66,000,000				—				—				6,025,000				—				(68,500,000	)			10,835,000				—				(4,735,000	)			—
																											3,525,000				—				(3,525,000	)
Operating lease right-of-use assets, net			2,005,658				—				—				—				—				—				2,005,658				—				—				2,005,658
Goodwill			20,846,765				10,483,699				4,779,621				—				—				—				36,110,085				7,700,000				—				43,810,085
Fixed assets, net			197,965,732				13,128,308				13,625,461				—				11,442, 10				—				236,161,511				11,900,129				—				248,061,640
Total Assets		$	410,017,625			$	23,612,007			$	22,649,855			$	23,738,677			$	11,618,402			$	(70,985,701	)		$	420,650,865			$	25,175,403			$	(8,414,953	)		$	437,411,315
Liabilities and Equity
Accounts payable		$	43,122,117			$	—			$	1,070,800			$	1,215,349			$	—			$	(2,485,701	)		$	42,922,565			$	791,753			$	(154,953	)		$	43,559,365
Accrued liabilities			1,218,138				—				243,159				268,562				—				—				1,729,859				368,111				—				2,097,970
Other payables			—				—				—				2,922,176				—				—				2,922,176				—				—				2,922,176
Billings in excess of cost and estimated earningson uncompleted contracts			9,474,338				—				—				—				—				—				9,474,338				—				—				9,474,338
Line of credit			13,668,194				—				—				—				—				—				13,668,194				500,000				—				14,168,194
Related party notes payable			—				—				—				53,712,500				—				—				53,712,500				—				—				53,712,500
Current portion of long-term debt			23,800,000				—				2,800,000				—				—				—				26,600,000				1,012,500				—				27,612,500
Current portion of operating lease liability			634,911				—				—				—				—				—				634,911				—				—				634,911
Long term debt, net of current portion			117,810,099				—				10,198,824				—				—				—				128,008,923				7,660,071				(4,735,000	)			130,933,994
Operating lease liabilities, net of current portion			1,314,437				—				—				—				—				—				1,314,437				—				—				1,314,437
Equity			198,975,391				23,612,007				8,337,072				(34,379,910	)			11,618,402				(68,500,000	)			139,662,962				14,842,968				(3,525,000	)			150,980,930
Total Liabilities and Equity		$	410,017,625			$	23,612,007			$	22,649,855			$	23,738,677			$	11,618,402			$	(70,985,701	)		$	420,650,865			$	25,175,403			$	(8,414,953	)		$	437,411,315

 

28